Law of Ukraine
“On the State Privatization Program”
Date of entry into force:
February 19, 2012
The Law adopts the State Privatization Program for 2012 - 2014 (hereinafter referred to as “Program”).
The Program determines the objective, means, methods, measures and tasks of privatization (clause 2 of the Program).
Clause 4 of the Program envisages that its objective is facilitating optimization of the state sector of the economy in the market conditions, increasing the efficiency of the economy, and increasing its competitiveness. The Program is carried out through:
- ensuring high speed of privatization of state property objects with no privatization restrictions or prohibitions, which are superfluous to the exercise of the functions of the state, have no buyer demand, are unprofitable and low-return;
- using individual privatization terms for companies that have strategic importance to the economy and defense of the state, companies with signs of domination on the national goods (works, services) market, and those that require individual approach due to the use of unique resources and intangible assets in the production process (group G);
- facilitating privatization of land plots containing state property objects to be privatized;
- decreasing restrictions on privatization of state property objects, provided that it has no negative impact on the exercise of the functions of the state and creates no threat for socioeconomic and environmental conditions in the society;
- involving investors interested in long-term development of companies after privatization;
- increasing the level of privatization attractiveness for investors, creating a positive image of privatization in Ukraine and in the world.
According to Article 5 of the Program, high privatization speed of state property objects shall be ensured by:
- involving a wider range of state property objects in privatization;
- expanding the circle of potential buyers by increasing the level of their awareness;
- simplifying privatization preparation procedures in order to decrease time costs;
- implementing simplified methods of selling state property objects (except for control blocks of shares of joint stock companies included in group G) that find no demand with potential buyers (if such objects are not sold using other competitive methods), namely: 1) sale by lowering the price to the level of actual demand, without limiting the minimal sale price; 2) splitting blocks of shares (for state-owned blocks of shares that constitute less than 25% of a joint stock company statute capital) and selling them as separate lots at stock exchanges; 3) sale without an announced price;
- establishing specific privatization timeframes for state property objects – up to 2 years from the decision to privatize.
Measures to implement the Program objective are provided for by Chapter IV of the Program.
According to clause 14 of the Program, implementing it will allow for:
- completing the large-scale process of transforming property relations and optimizing the state sector; creating conditions for privatization of state property objects that are economically unfeasible to retain in state property; facilitating economical growth;
- decreasing the state sector of the economy to 25-30% of the gross domestic product. A production complex capable of ensuring efficient exercise of the functions of the state shall be created in the state sector of the economy;
- involving large amounts of private capital, including foreign capital; creating powerful vertically integrated structures that would be competitive on the international market; modernizing production; implementing innovative technologies; creating new types of products; implementing modern management methods;
- creating a foundation for development of small and medium enterprises and adapting them to market conditions;
- decreasing the burden of managing the state sector of the economy, allowing to increase the efficiency of state management.
Chapter VI of the Program determines the financial results of the Program implementation. In particular, it envisages that the forecasted amount of proceeds to the State Budget of Ukraine from sale and management of state property shall be UAH 40-60 billion, during the course of the Program.
The tasks to ensure implementation of the Program are established in Chapter VIII of the Program.