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Land News from Ukraine

Thanks to strict observation of the Phased Plan measures, adjusted in September 2012, it was managed to return a project for creation of the National Cadastre System in Ukraine (NCS) to schedule.

World Bank Director for Ukraine, Belarus and Moldova Qimiao Fan writes in his letter to the government and Chairman of the State Agency of Land Resources Serhiy Tymchenko, the press service of the land agency told UKRINFORM about this.

“Currently existing 35 agreements to the amount of USD 30.37 envisage completion of supply with goods, fulfillment of works and rendering services for the term until April 30, 2013, i.e. on the moment of the project completion its aims will be fully reached, shortcomings will be removed and the funds effectively used,” the document notes.

Consequently, Qimiao Fan sums up, for today, even talks about the risks are not actual, which were spoken about in a report of the Accounting Chamber of Ukraine by results of an audit of the project fulfillment, held in October last year.

In particular, within the frames of the project, financing of nine leading higher educational institutions is ensured, which train specialists on a specialty “land arrangement and cadastre,” special software products were supplied, as well as computer and geodesic equipment, qualification of their teaching personnel raised, as well as qualification of workers of territorial land resources bodies, in total to the amount over USD 2.302 million.

Works have been fulfilled on replacement of more than 500,000 certificates for state land acts. Now, 6.6 million citizens have drawn up state acts for the land title, which is 96.7% of total number of persons who received certificates, out of these, state acts were issued to 6.41 million of them. In other words, replacement of certificates for state acts has been actually completed in Ukraine, the Land Resources Agency sources summed up.



Ukrainian lawyers told investors in Brussels (31 January) that they had little if any chance of doing business involving the use of land for agriculture or other activities, unless they hire a local partner to keep them “away from disappointment”.

The lawyers didn’t shy from saying the country was “subject of legal instability and corruption”, in the presence of a diplomat from the Ukrainian mission to the EU.

But at the same time they argued that foreign investment in Ukraine, including in agriculture, remained highly profitable and was worth the effort.

In successive presentations, lawyers from the Kyiv guided the Brussels audience through Ukraine’s ongoing land legislation reform, which includes the creation of a state property register and rules for consolidation of small land parcels.

As foreigners are banned from owning agricultural land, investors must lease land from Ukrainian legal owners. A foreigner can buy real estate or even land only in a residential area, for the purpose of building. Outside a residential area, a foreigner can buy only existing buildings, but cannot buy land for the purpose of building.

The legal term “emphyteusis” is used to describe the “use by a third part” of agricultural land. Similarly, the term “superficius” describes the use of land by a foreigner for construction building purposes.

Ukraine's “Moratorium on Alienation of Farm Land” (see background) has been introduced in 2005 and will remain in place at least until 2016, the law firm representatives said.

There are three types of property in Ukraine – private, state owned and municipal.

State-owned land can be sold to foreigner with the approval of the Parliament, but apparently this possibility remains only theoretical. Also in theory, municipalities can sell land, although the firm representatives advised against doing so.

For purchasing agricultural land, the lawyers advised setting up a structure where the foreign company establishes a first tier subsidiary in Ukraine, in liaison with a second tier Ukrainian subsidiary who legally owns the parcel.

Ukraine is a bureaucratic country and in spite of some attempts to reform, bureaucrats at various levels don’t want to lose their power, the lawyers said.

But their main message was that investing in Ukraine requires assistance of experienced and reliable advisors and partners.

“Only a local expert can keep you away from disappointment,” one of them said.

He also argued that corruption can be avoided, “if you know how to lobby, to put pressure on authorities and not play the game of corruption.”

Enterprises with foreign investments are actively broadening their activity in Ukraine. According to the data of specialists of the Ministry of Incomes and Fees for 2 years, from 2011 till 2012 inclusively the total amount of sold by such enterprises production grew by 4% – from UAH 838.6 billion to UAH 870 billion, while export amount – by 22% (from UAH 159.4 billion to UAH 205.3 billion).

Payment of taxes by the companies with foreign investments to the combined budget upped from UAH 50 billion in 2011 to UAH 54.2 billion last year.

In their part the specialists of the Ministry of Incomes assure that Ukraine is systematically and purposefully working with an aim to create favorable investment climate and equal competition conditions for Ukrainian and foreign companies alike.

A share of imported goods by the mentioned companies amounted 83.7% in 2012.

The number of planned documentary checks of enterprises with foreign investments is being constantly cut: if in 2011 inspectors visited such enterprises 1539 times, last year – only 1056. In whole, starting from 2010 the number of checks of companies with foreign investments fell almost 2.5fold.

According to the experts of the Ministry of Incomes and Fees, the activity of tax and customs services has been and remains directed to the introduction of legislative and organization innovations targeting creation of comfortable conditions of making business in Ukraine. In particular, recently the tax service triggered a new service for enterprises with foreign investments – giving legal evaluation of investment projects for existing tax risks. In such a way the tax workers will help to avoid risk situations through incorrect interpretation of the national legislation by foreign entrepreneurs.


Cabinet of Ministers of Ukraine

As of January 28 this year, during two weeks of actual work of the National Cadastral System (NCS), state registrars received more than 12 thousand people. Experts of the territorial bodies of land resources have registered more than 6,500 land lots and provided almost 1,600 extracts from the land cadastre, - the press service of the State Land Agency informs.


"As known, since the beginning of this year, new rules of registration of land ownership rights have been introduced. The formation of plots is recorded in the State Land Cadastre and the registration of titles to plots in the State Register of Real Property Rights and Encumbrances. Now the Land Agency and the State Register have arranged automatic data exchange - their bases are updated daily online," the agency informs.

In addition, January 1, 2013 gave force to Article 79-1 of the Land Code of Ukraine (the formation of a land plot as an object of civil right), in which for the first time at the legislative level, the notion was given to the formation of a land lot, which provides for a definition of its area, boundaries, and entering information about it in the State Land Cadastre.

As noted, a land lot is considered to be formed after assigning to it an inventory number. All the plots formed are subject to state registration in the State Land Cadastre.

A land lot may be a subject to civil powers only after news of it is put on two data bases - the State Land Cadastre and the State Register of Real Property Rights and Encumbrances.



Last year, the budgets of various levels were replenished with 89.8 million UAH, received as a compensation for losses of agricultural and forestry production, the agency in charge reported.

"The development of land for agricultural and forestry needs used 2.2 million UAH; the improvement of agricultural and forestry land 6.3 million UAH; the development of management projects for the protection of land 2.2 million UAH, protection of land in accordance with the working projects for land management 14 million UAH," the agency informed.

The conduct of the regulatory monetary valuation of land also used 20.1 million UAH; 10 million UAH was used for the demarcation of state and municipal land, and 27.6 million UAH for land inventory.

Today Ukraine has 557.3 million UAH on special accounts of the relevant local councils, including on banks deposit accounts 148.9 million UAH, which was received as a compensation of losses from agricultural and forestry production.



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