Land market draft law brought ready for the second reading

After consideration by the Agrarian Committee of the Verkhovna Rada of Ukraine (Parliament), the draft law No.2178-10 is ready for the second reading, Tymofiy Mylovanov, Minister for Development of Economy, Trade and Agriculture of Ukraine, informs on Facebook.

The text of the draft law can be found on the website of the Verkhovna Rada of Ukraine.

Bill No.2178-10 provides for the following:

• foreigners acquire rights to buy land only after a referendum;
• Ukrainian citizens and legal entities founded (exclusively) by citizens of Ukraine have the right to buy land;
• each person may buy no more than 10 thou. ha;
• limitation works in the following way: for example, a person owns 25% of the company, this company owns 8 thou. ha. Then it is considered that a person owns 1/4 of 8 thou. which equals 2 thou. ha. Thus, he may buy 8 thou. ha. There are no restrictions on associated persons;
• banks may become owners of land but only through the collection of collateral as a result of non-payment of the loan. The 10 thou. ha limit does not apply to banks. Banks must sell the land obtained as collateral within 2 years. All banks have the right to credit the land, regardless of the form of ownership. That is, banks with foreign capital can credit land, receive land as collateral but they must sell it. If banks do not sell the land within two years, the land will be confiscated. The state puts the land up for sale, covers the expenses, and the remaining amount is returned to the bank.

According to World Bank Senior Economist Anastasia Golovach, the most effective model for the farmland market in Ukraine is the maximally liberalized one.