Law of Ukraine
"On Management of State Property Objects in the Military-Industrial Complex"
Date of entry into force:
July 9, 2011
The present Law determines the specifics and the legal grounds for management of state property objects in the military-industrial complex. The Law is aimed at determining the specifics of management of state property objects in the military-industrial complex, ways to increase the work efficiency of the military-industrial enterprises, and ensure control of their activity.
Article 2 classifies the following as objects of state property management in the military-industrial complex:
- property of state military-industrial enterprises, including public enterprises included in the State Concern "Ukroboronprom";
- property transferred to the State Concern "Ukroboronprom" according to the established procedure;
- blocks of shares in statutory capitals of joint stock companies working in the military-industrial complex that are owned by the state and have been transferred to the State Concern "Ukroboronprom" for management according to the established procedure.
The subjects of managing state property objects in the military-industrial complex are:
- the Cabinet of Ministers of Ukraine;
- the State Concern "Ukroboronprom".
The State Concern "Ukroboronprom" is the business entity authorized to manage state property objects in the military-industrial complex. The State Concern "Ukroboronprom" includes state military-industrial enterprises, including public enterprises, based on the financial dependence on one or a group of members. The function of the State Concern "Ukroboronprom" is to provide for scientific, technical and industrial development, as well as carrying out investment, financial, foreign economic and other types of activity. The Concern members are not managed by the bodies of executive power (Article 4 of the Law).
According to Article 5 of the Law, the management bodies of the State Concern "Ukroboronprom" are its Supervisory Board, the Board of Directors, and the General Director. The supreme management body is the Supervisory Board. The Supervisory Board ensures protection of the interests of the state, and controls and regulates the activities of other management bodies. The Supervisory Board of the State Concern "Ukroboronprom" consists of five members (three appointed by the President of Ukraine, and two by the Cabinet of Ministers of Ukraine). The term of appointment of the State Concern "Ukroboron" Supervisory Board is five years. The Supervisory Board members work on a pro-bono basis. The Supervisory Board work is carried out in form of sessions.
The authority of the State Concern "Ukroboronprom" Supervisory Board is established by Article 6 of the Law.
According to Article 7 of the Law, the State Concern "Ukroboronprom" does the following in the process of managing state property objects in the military-industrial complex:
- regulates, controls and coordinates the activities of the concern members;
- creates enterprises, joint ventures and other state property based legal entities in the military-industrial complex, makes decisions as to their reorganization and liquidation;
- approves articles of association (provisions) of the concern members and regulatory documents as to the amendment thereof, controls the fulfillment of the requirements of the above documents;
- appoints and dismisses heads of concern members, concludes and terminates contracts with them, controls the fulfillment of such contracts;
- creates a development strategy for the concern and its members;
- approves annual financial and investment plans, as well as middle-term (3-5 years) investment plans for the concern members, as well as controls the fulfillment of such plans according to the established procedure;
- monitors the financial activity of the concern members;
- gives consent to alienate and write off state property management objects of the concern members in the military-industrial complex;
- manages the state participation rights in respect of state-owned blocks of shares in statutory capitals of joint stock companies that have been transferred to the State Concern "Ukroboronprom" for management according to the established procedure.
- initiates corporatization of the concern members;
- makes decisions as to the further use of state property that has not been included into statutory capitals of joint stock companies created in the process of corporatization of the concern members;
- approves conclusion of cooperation agreements by the concern members, under which the fixed assets held by them on the rights of economic management or operational control are used;
- provides for annual audit of the activities of the concern members;
- controls the activities of the concern members;
- keeps a record of state property objects managed by the concern, controls the efficient use and preservation of such objects;
- according to the legislation, participates in drafting of international agreements of Ukraine in respect of state property objects managed by the concern;
- ensures adjustment of the statutory and other regulatory documents of the concern members to correspond to the legislation;
- identifies state property temporarily not used by the concern and its members, and produces suggestions as to its further use;
- ensures deduction of a share of profits (revenue) to the State Budget of Ukraine by the concern members, according to the procedure established by the legislation;
- ensures reporting on the availability and the current condition of the state property objects managed by the concern, and of the changes in their condition, to the administrator of the Unified Registry of the State Property Objects;
- ensures inventory-taking of the concern's and concern members' property, according to the established procedure;
- provides for: environmental audit of the concern members; preservation of the statutory documents, orders and minutes of meetings of the appropriate executive bodies of the concern and concern members; legalization of rights to land plots (in case the necessary documents are not available) and amendment of land plot boundaries of the concern members;
- clarifies the scope of mobilization facilities and the amount of the mobilization reserve stock among the concern members, in order to determine the expediency of their further storage;
- grants consent to the concern members to rent state property and provides suggestions as to the rent agreement terms that must ensure efficient use of the rented property;
- controls the lessee's fulfillment of investment and technical development programs in respect of the rented state property objects managed by the concern members, if such programs are provided for by the rent agreement;
- organizes control over the use of rented state property managed by the concern members;
- attracts investors, particularly foreign ones, develops investment projects and controls their implementation, takes part in attracting resources from financial markets, particularly international ones, determines the sources and directions of use for the investment and innovation development funds;
- coordinates restructuring and rehabilitation plans for the concern members with the State Property Fund of Ukraine, in case of new business entities are being created with their participation;
- ensures fulfillment of the restructuring and rehabilitation plans in respect of the concern members that are of strategic importance to the economics and defense of the state;
- ensures management and preservation of physical carriers of secret information, and the measures aimed at protecting the secrets of state;
- carries out other functions related to the management of state property objects in the military-industrial complex in cases provided for by the legislation.
The Law also introduces appropriate amendments to the Economic Code of Ukraine and the Law of Ukraine "On Managing Objects That Are in State Ownership".