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Law of Ukraine

"On Cooperation of Territorial Communities"

Date of entry into force:
July 24, 2014

The Law determines the organizational and legal foundations for cooperation of territorial communities, the principles, forms, and mechanisms of such cooperation, its incentives, financing, and control.

Article 1 of the Law provides definitions of terms "cooperation agreement", "cooperation of territorial communities (cooperation)" and "joint project".

The principles of cooperation are determined in Article 2 of the Law.

The cooperation entities are territorial communities of villages, townships, and cities. Territorial communities cooperate through village, townships and city councils. Cooperation is carried out in the sphere of common interests of territorial communities, within the scope of authority of appropriate bodies of local self-government, unless otherwise provided for by law (Article 3 of the Law).

According to Article 4 of the Law, cooperation is carried out in the following forms:
  • delegation of one or several tasks to one cooperation entity by other cooperation entities, together with a transfer of appropriate resources (Article 10 of the Law);
  • implementation of joint projects, which entails coordination of cooperation entities and accumulation of resources by them for a specified period of time, with the objective of joint implementation of appropriate measures (Article 11 of the Law);
  • joint financing (keeping) of municipal-owned companies, institutions and organizations –infrastructural objects, by cooperation entities (Article 12 of the Law);
  • creation of joint municipal companies, institutions and organizations – joint infrastructural objects, by cooperation entities (Article 13 of the Law);
  • creation of a joint management body by cooperation entities, for joint execution of the authority determined by law (Article 14 of the Law).

Article 5 of the Law establishes that cooperation can be initiated by the village, township or city head, deputies of the village, township or city council, or members of the territorial community under a local initiative procedure. The decision to give consent for organization of cooperation is made by the village, township or city council, based on the preliminary conclusions of its executive bodies that the cooperation initiation proposal conforms to the interests and needs of the territorial community. The decision to give consent for organization of cooperation, made by the village, township or city council according to the established procedure, constitutes basis for the village, township or city head to start negotiations between potential cooperation entities about its organization, and to create a commission for drawing up the cooperation agreement draft (hereinafter referred to as "commission").

Article 6 of the Law is dedicated to negotiations about organization of cooperation.

The commission includes equal numbers of representatives of all cooperation entities. The commission membership is approved by a joint decree of village, township or city heads that represent the territorial communities – cooperation entities. The work form of the commission is a session, held by decision of the commission head. Decisions made by the commission at the session are recorded in the minutes, signed by the head of session and the secretary. The commission session is headed by representatives of the cooperation entities, in turn. Organizational support of the commission's work is carried out by executive bodies of village, township or city councils – cooperation entities. The commission prepares a draft of the cooperation agreement within 60 days of its creation date (Article 7 of the Law).

According to Article 8 of the Law, village, township or city heads provide for a community discussion of the cooperation agreement draft prepared by the commission, within 15 days; based on the results of the discussion, village, township or city heads present the adoption of agreement draft for consideration by appropriate councils. The decision to adopt the cooperation agreement draft is made by village, township or city councils within 30 days of the community discussion of the agreement draft. The cooperation agreement is concluded in writing by village, township or city heads, after its draft is adopted by appropriate village, township or city councils.

The subject of the cooperation agreement is determined according to the cooperation form chosen by the cooperation entities, as provided for by Article 4 of the Law. The number of copies of the cooperation agreement must correspond to the number of cooperation entities plus one copy. Each cooperation entity receives one copy of the cooperation agreement. One copy of the cooperation agreement is submitted to the central executive authority that provides for creation of state policy in the sphere of local self-government development, to be entered into the register of cooperation of territorial communities (Article 9 of the Law).

According to Article 15 of the Law, state incentives for cooperation are provided by:
  • providing subventions to local budgets of cooperation entities in the priority spheres of state policy;
  • transferring state owned property into municipal ownership of cooperation entities;
  • methodical, organizational and other support for the work of cooperation entities.
The state provides incentives for cooperation in cases when:
  • the cooperation increases the ability of cooperation entities to provide for execution of authority determined by law;
  • the cooperation attracts additional resources, including financial ones;
  • the cooperation is carried out by more than three cooperation entities;
  • wide community participation in the cooperation is provided for.

Article 16 of the Law envisages that cooperation is financed at the expense of:
  • local budgets of cooperation entities;
  • self-taxation;
  • other sources not prohibited by the legislation, in particular, the state budget, international technical and financial assistance, and credit resources.
Financing of cooperation measures starts from the following budget period. Cooperation entities ensure open access to reports on the use of funds, through their own Internet resources.

Article 17 of the Law is dedicated to cooperation monitoring.

According to Article 18 of the Law, cooperation is terminated in the following cases:
  • the term of cooperation agreement has expired;
  • the objectives of cooperation have been achieved;
  • the cooperation entities failed to fulfill their obligations;
  • one or more cooperation entities renounced cooperation under the cooperation agreement, which makes further cooperation impossible;
  • bankruptcy of municipal-owned companies, institutions and organizations created within the scope of cooperation;
  • a court resolution to terminate cooperation;
  • cooperation was not carried out within one year after the cooperation agreement had taken effect.
Termination of cooperation is carried out by consent of its entities, according to the procedure provided by Articles 6-9 of the Law for cooperation organization, with regard to certain specifics, by concluding an appropriate agreement by village, township or city heads, after its draft is approved by village, township or city councils.

Based on the preliminary conclusion of an executive authority of a village, township or city council of one of cooperation entities, stating that at least one of the above reasons is present, the village, township or city council makes a decision to terminate cooperation, and addresses other cooperation entities with a written proposal to hold negotiations on termination of cooperation. Cooperation entities communicate the notice of cooperation termination to the public attention by publishing it in local media. Negotiations on termination of cooperation are initiated within 30 days after the cooperation entities receive the respective proposal. Lack of response of cooperation entities to the proposal for negotiation on cooperation termination within 30 days of delivery of such proposal is considered to constitute their agreement to such termination (Article 19 of the Law).

Specifics of cooperation termination depending on the form of cooperation are determined by Article 20 of the Law.

The Law also introduces appropriate amendments to Article 63, part 1 of the Economic Code of Ukraine, Article 169, part 2 of the Civil Code of Ukraine, and Article 26, part 1 of the Law of Ukraine "On Local Self-Government in Ukraine".