Analysis of the draft law:
1. Substance of the draft law
The draft law is aimed at streamlining the regulatory framework in the field of foreign economic activity by repealing the obsolete Decree of the Cabinet of Ministers of Ukraine “On Providing State Guarantees for Foreign Credits Granted to Ukraine in Accordance with International Treaties.” Furthermore, the document provides for a technical adjustment of Article 9 of the Law of Ukraine “On Foreign Economic Activity” to bring it into compliance with new legal realities. In fact, this is a step toward “clearing” the legislation of regulatory norms that have lost their relevance or contradict modern budgetary procedures.
2. Structure of the draft and main changes
The structure of the draft is concise and consists of two main blocks:
- Repeal of an act: Declaring the Cabinet of Ministers Decree, which regulated the provision of state guarantees for foreign credits, as no longer in effect. This act had long been a relic of 1990s legislation.
- Amendments to current legislation: Adjustment of Article 9 of the Law “On Foreign Economic Activity,” specifically, the exclusion of the provision that granted the authority to act as a guarantor for credits for foreign economic activity entities under the collateral of the State Currency Fund.
Compared to previous approaches to public debt regulation, this change reflects a shift away from outdated mechanisms where the state acted as a guarantor for individual foreign economic activity entities, which currently contradicts the principles of budgetary discipline and modern public debt management practices based on the norms of the Budget Code of Ukraine.
3. Key points for stakeholders
- For legislators and experts: The main aspect is bringing legislation into line with a single standard. Repealing the provision regarding the State Currency Fund collateral eliminates a legal conflict, as the modern public financial management system does not provide for the use of such an instrument in the form it was established by the 1990s decree.
- For business: Entities engaged in foreign economic activity should note that the mechanism for obtaining foreign credits under state guarantees, based on the norms of the repealed Decree, is finally ceasing to exist. This signifies a transition to modern procedures for attracting financing, provided for by the Budget Code and special legislation on public debt.
- For citizens: For the general public, the changes are rather technical and contribute to the transparency of public administration. This is the removal of obsolete “forms” from the legislation that theoretically created opportunities for non-transparent financial obligations of the state toward foreign creditors.
Analysis of the explanatory note:
Analysis of the Draft Law on the repeal of Cabinet of Ministers Decree No. 25-93
Greetings. As a lawyer with many years of experience, I have analyzed this document. Effectively, we are dealing with a process of “legislative cleaning”—purging our legal field of obsolete norms that have remained since the early 90s and today only create legal conflicts.
1. Substance of the draft law
This draft law is aimed at repealing the 1993 Cabinet of Ministers Decree regarding the provision of state guarantees for foreign credits, as it has lost its relevance. At the same time, the document provides for a technical adjustment of the Law of Ukraine “On Foreign Economic Activity” to bring the norms of law into compliance with the modern Budget Code.
2. Reasons and necessity of adoption
According to the drafters, the main problem lies in the obsolescence of the legislation. Firstly, this 1993 Decree was closely linked to another act (on currency regulation), which has long been repealed. Secondly, the mechanisms for providing state guarantees that were in effect previously are now fully regulated by the Budget Code of Ukraine, which is the special and priority act in this area. The existence of a Decree that duplicates or partially contradicts the Budget Code creates legal uncertainty, which the Ministry of Finance seeks to eliminate within the framework of systematic legislative review.
3. Main consequences for the state and business
From the point of view of legal practice, the following points are the most important:
- Elimination of conflicts: Repealing the obsolete Decree eliminates the situation where one norm (the Decree) suspended the effect of provisions of the Law “On Foreign Economic Activity” (regarding the functions of the National Bank as a guarantor). This restores the logic of the current legislation.
- Systematization: For business, this is a positive signal—the legal framework is becoming more transparent. We are getting rid of the “Soviet-transitional” legacy in the legislation, which simplifies the interpretation of norms for lawyers and investors.
- Lack of financial impact: It is important to understand that this law does not change the actual procedure for providing state guarantees—it remains, as it has been, exclusively within the scope of the Budget Code. This is purely technical, “clean-up” work that does not require additional budget expenditures and does not create new risks for the economy.
Summary for the media: This is a classic example of legal inventory. We are simply “throwing out old junk” from the legal field so that no one is tempted to use outdated norms for manipulation or confusion in budgetary processes.
Analysis of other documents:
The Cabinet of Ministers of Ukraine, as a subject of legislative initiative, fully supports this draft law. The Government is initiating the repeal of the obsolete 1993 Decree because it has lost its relevance, contradicts modern budgetary legislation, and creates a legal conflict that no longer meets the requirements of the time.
To understand the importance of this step, I would highlight several key points that legislators and businesses should be aware of:
- Elimination of a legal atavism: The Cabinet of Ministers Decree of March 17, 1993, No. 25-93 is a document of the “transitional era” of the 90s. Today, relations regarding the provision of state guarantees for credits are regulated by the Budget Code of Ukraine and other relevant acts, so the existence of a parallel, obsolete Decree only creates legal uncertainty.
- Systemic “cleansing” of legislation: In addition to repealing the Decree itself, the draft law provides for amendments to the Law of Ukraine “On Foreign Economic Activity.” This concerns the exclusion of references to this Decree, which is a necessary step to bring the legislative framework into line with modern realities.
- Lack of risks for business and the state: The repeal of this document does not create any negative consequences, as the mechanism for providing state guarantees has long been functioning according to completely different, relevant rules. On the contrary, it simplifies the regulatory field and makes the legal system more transparent for investors and international partners.
- Preparation for legal certainty: For businesses and experts, this is a signal that the state is systematizing its debt obligations and removing documents that could be used for ambiguous interpretation of the law in the future.
Thus, this is a technical, but extremely important draft law aimed at clearing the Ukrainian legal field of norms that effectively ceased to operate decades ago but formally continued to exist in our legal system.
