Friday, April 8, 2016

Government endorsed the draft Law "On the list of state property objects not subject to privatization"

The Government endorsed the bill “On the list of state property objects not subject to privatization” elaborated by the Ministry of Economic Development and Trade.
The draft was developed to optimize the list of state enterprises exempt from privatization. A list of such objects was approved in 1999 and includes 1478 enterprises, with 497 out of them liquidated.
The new bill envisages the cutting of the list of state-owned enterprises to 705 companies. All the companies are of strategic importance for defence, economy or social life of the country. Among them 394 enterprises are subject to corporatization, which implies the creation of a new transparent and publicly accountable governance structure. Another 275 enterprises located in the Autonomous Republic of Crimea have been included into a separate annex – those in property of the Ukrainian state and not for sale.

According to Yulia Kovaliv, First Deputy Minister of Economic Development and Trade of Ukraine, the new law has two objectives: to allow the privatization and corporatization of an increasing number of state-owned enterprises, as well as to clean up the list from already eliminated objects.
“We stress that the state shall not be an effective owner, neither in Ukraine nor globally. A large number of state-owned enterprises which are now prohibited for privatization are either unprofitable or corrupt. The possibility of attracting private investors, even for purchasing just a minority stake, is a chance that these businesses would start earning profit for the state,” said Yulia Kovaliv.
As a reminder, today in Ukraine there is in effect a two-level mechanism for the protection of public assets. Article 5 of the Law of Ukraine “On privatization of property of state-owned enterprises” defines the objects that shall not be subject for privatization. These include, for example, natural resources, property of budget organizations and public institutions, nuclear installations and objects, and more. The second level of protection is the Law of Ukraine “On the list of state property objects not subject to privatization”.


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