Law of Ukraine

"On Ratification of the Agreement (in the Form of Exchange of Notes) between the Government of Ukraine and the Government of Japan Relating to the Loan Agreement for the Economic Reform Development Policy Loan between the Cabinet of Ministers of Ukraine and the Japan International Cooperation Agency"

Date of entry into force:
August 27, 2014

The Agreement (in the Form of Exchange of Notes) between the Government of Ukraine and the Government of Japan Relating to the Loan Agreement for the Economic Reform Development Policy Loan between the Cabinet of Ministers of Ukraine and the Japan International Cooperation Agency (hereinafter referred to as "Agreement") was signed on July 17, 2014.

The Constitution of Ukraine (Article 85, paragraph 32) states that the Verkhovna Rada of Ukraine provides consent for Ukraine to be bound by international agreements. And, according to Article 9 of the Law of Ukraine "On International Agreements of Ukraine", the Agreement is subject to ratification.

The Law ratifies the Agreement.

According to Paragraph 1 of the Agreement, a loan in Japanese yens, in the amount of up to ten billion yens (10,000,000) (hereinafter referred to as "Loan") shall be provided to the Government of Ukraine by the Japan International Cooperation Agency (hereinafter referred to as "JICA"), as an economic reform development policy loan, according to the appropriate laws and normative acts of Japan, in order to support the Government of Ukraine in its reform program, within the scope of the Action Program of the Cabinet of Ministers of Ukraine (hereinafter referred to as "Reform Program").

The loan shall be provided via a credit agreement to be concluded between the Government of Ukraine and the JICA. The terms of the loan provision and the procedures for its utilization shall be regulated by the above credit agreement within this arrangement, which shall contain, among others, the following principles:
  • the maturity term shall be 14 years after a grace period of 6 years;
  • the interest rate shall be 0.95% per annum;
  • the disbursement period shall be 3 years following entry of the above credit agreement into force.
The disbursement period can be extended by consent of the appropriate authorities of the two governments.

The loan shall be provided to cover budget expenses incurred by the competent authorities of the Government Ukraine in order to support implementation of the Reform Program, except for expenses on goods specified in the list mutually agreed on between the interested authorities of the two governments (Paragraph 3 of the Agreement).

According to Paragraph 5 of the Agreement, the Government of Ukraine shall ensure that procurement of products and/or services under the Loan is carried out according to the JICA rules for procurement, which provide for, among others, a procedure for international competitive bidding, except for cases when such procedures are inappropriate or unfeasible.

The Government of Ukraine shall indemnify the JICA of any fiscal deductions and taxes levied in Ukraine from and/or in relation to the Loan and the accrued interest (Paragraph 7 of the Agreement).

According to Paragraph 8 of the Agreement, the Government of Ukraine shall take the necessary measures to ensure that the Loan is used appropriately and exclusively for the budget expenses specified in Paragraph 3 of the Agreement.
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