On 18 January 2011, the new Law of Ukraine on guaranteeing of the rights of the concessionaires came into force.
In general, the Law is aimed at strengthening concessionaires' rights to own and use the property related to the implementation of the concession projects; the new Law, undoubtedly, purports to create a more attractive and favourable legal climate for concessionaires and international investors in Ukraine.
In particular, the new Law amends the Land Code of Ukraine allowing concessionaires to acquire leasehold or freehold rights to state or communal land plots to be used for concession activity without undergoing land auction. This should reduce the concessionaires' costs during the implementation phase of the concession.
The Law also provides that both the state or communal lands and the concession objects located thereon shall be leased to the concessionaires for the whole term of the concession contracts. Previously, one of the biggest risks faced by the concessionaires and international investors was the absence of any legislative guarantee that the concession objects will be in a concessionaire's possession during the entire term of the concession contract. Such a guarantee is now provided in the Law.
The Law of Ukraine «On Concessions» is also amended
to provide that no changes to Ukrainian law shall impair the
conditions of concessionaire's implementation of the concession
under the terms of a concession contract.
Moreover, the concession law now provides that the
concessionaire's property and financial resources shall not be
subject to the compulsory expropriation. In this event, the
concessionaire shall have the right, in accordance with the law, to
claim compensation.
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The original publication date for this article was 02/02/2011.