Introducing the trust property as a way to secure performance of obligations related to credit repayments may help increase Ukraine’s positions in the DoingBusiness ranking and, consequently, improve the country’s investment attractiveness. This matter was discussed at a meeting organized jointly by the Better Regulation Delivery Office BRDO and the American Chamber of Commerce (ACC).
The BRDO head Oleksiy Honcharuk participated in the event and presented the draft Law “On amendments to certain legislative acts of Ukraine regarding introducing the trust property as a way to secure performance of obligations” developed by the BRDO experts for discussion. This draft law was registered under #4188 in the Verkhovna Rada of Ukraine on March 10, 2016 and is one of the regulations listed in the DoingBusiness-2017 Roadmap approved by the Cabinet of Ministers of Ukraine.
The draft law provides for supplementing the list of existing mechanisms to secure performance of obligations by means of the trust property. The trust property is a kind of title to property that a creditor can’t use but just may apply to the court for recovery. Trust property items can be any property that may be alienated and against which recovery proceedings may be brought. The draft law provides for amendments to a number of existing legislative acts to ensure applying the trust property procedure.
“The introduction of the trust property concept meets the needs of the time. This mechanism protects both the rights of a creditor and an investor as well as guarantees the debtor’s rights by limiting the right to use the property transferred in trust ownership. This mechanism is effectively applied in Canada, the United States, Australia and many other countries. We are confident of its effectiveness to improve the investment environment in Ukraine. Now, having the full support of experts, bankers and business, we hope to be supported by legislators,” the BRDO head Oleksiy Honcharuk commented the meeting’s results.
The Chairman of the Management Board at Pravex Bank Taras Kirichenko, the partner at the Baker&McKenzie international law firm Ihor Olekhov, the legal advisor at the Redcliffe Partners law firm Dmytro Orendarets, the project coordinator of the Odesa Financial Forum Roman Motychak, business leaders, representatives of leading consulting companies, lawyers, financiers and investors participated in this discussion.
We remind that the World Bank’s Doing Business experts will conduct their regular analysis of the business environment in May of 2016. In autumn 2015, specialists of the Ministry of Economic Development of Ukraine together with BRDO experts developed a program consisting of 43 steps to simplify the business environment in Ukraine. The Cabinet of Ministers approved this Roadmap in December. Each step involves adopting certain documents amending the existing legislation, removing certain barriers and harmonizing procedures that exist in Ukraine with the best international practices.
According to experts, performing only the first 23 points of this plan by May 31, 2016 should provide Ukraine with a position in the TOP-50 countries in terms of ease of doing business. Steps under the Doing Business 2017 Roadmap’s program is a way to systemic changes. This implies not only simplified registration procedures or reduced control over business, but also the possibility to increase the effectiveness of the business environment’s development systematically by providing the access to more affordable credit resources and strengthening the protection of investors’ rights and many other positive results.