Amendments to Draft Laws on State-Owned Enterprises and SPFU — 8250 and 8205

The specialized committee recommended the parliament to adopt two draft laws related to state-owned enterprises and the State Property Fund in the second reading and in general — 8205 “On the Features of Termination of State-Owned Enterprises” and 8250 “On the Optimization of the Structure of the SPFU.”

Today, the SPFU manages more than 1,300 economically inactive state-owned enterprises. But due to the imperfection of legal regulation, the state cannot ensure an effective process of their liquidation. This generates corruption, which is associated with the illegal use and alienation of the property of these enterprises without proper control by the state.

Draft law 8205 is to change that. It will make the procedure of termination of state-owned enterprises self-sustaining and allow attracting qualified specialists with relevant experience to conduct it. The sale of seized property of state-owned enterprises, whose ban has been in force since 2007, will also be unblocked. Such property will be sold through electronic auctions on Prozorro.Sale. 

With the new procedure, it will be possible to sell the assets of idle state enterprises for at least UAH 140 mln and repay their debts to the state budget.

TI Ukraine joined the working group on the preparation of proposals to the draft law to minimize corruption risks, in particular during the selection of managers of SOEs termination.

Draft law No. 8250 provides for a change in the organizational structure of the SPFU through the centralization of the agency’s management. It also gives the head of the Fund the authority to appoint and dismiss their deputies and heads of regional offices.

The State Property Fund itself stressed the need to finalize the draft law to ensure the continuity of powers during the reorganization.

At the meeting, the committee was informed that before the second reading, the document also included provisions on:

• management of confiscated, including russian, assets of sanctioned persons;
• unblocking of large-scale privatization;
• providing additional guarantees for buyers of privatization objects.

It is not yet known which amendments and proposals to this draft law the committee considered. However, TI Ukraine experts will definitely prepare a detailed analysis of all changes as soon as they are published.

This publication was prepared with the financial support of Sweden.