October 2012

Establishment of the State Land Bank

On 13 October 2012 amendments to Banks and Banking Law regarding creation of the State Land Bank became effective. The amendments were introduced by Law No. 5248-IV adopted on 18 September 2012 (the "Land Bank Law").

The initial decision to establish a state land bank (the "Land Bank") was formulated by the Cabinet of Ministers of Ukraine (the "CMU") in its Regulation No. 609 of 2 July 2012. The latter defines the Land Bank as a Public Joint-Stock Company named "State Land Bank" with a charter capital of UAH 120 million split into 120 million ordinary shares with a par value of UAH 1.

The Law No. 5245-VI dated 6 September 2012 which is set to come into effect on 1 January 2013 envisages that the charter capital of the Land Bank will be formed by transferring to the bank state-owned agricultural land plots. The Land Bank will be 100 percent state-owned and its privatization will not be allowed.

Land Bank Law introduces the following rules for Land Bank's operations:

  1. The Land Bank shall have a right to engage in transactions with the land and rights to land "in accordance with its charter and Ukrainian laws".
  2. The CMU would have a right to form the charter capital of the Land Bank by contributing money or land.
  3. The National Bank of Ukraine will issue rules as to how the Land Bank is to be licensed and will establish special rules on the Land Bank's operations and supervision over them.

  4. For further information please contact senior partner Armen Khachaturyan
    and associate Iryna Scherbyna

© Asters 2012
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