Two draft bills are waiting to be signed by the President - №2194 and №2195 - which complete land decentralization in Ukraine and regulate a significant number of processes before the land market start. At the same time, a lot of controversy and many myths continue to revolve around them. The UAC Adviser on Land Issues Victoria Kipriianova dispelled the main ones during a webinar organized by the UAC for agricultural producers.

"The law on the conditions of agricultural land turnover was more general in nature and contained only key rules concerning the launch of the land market. In order not to be delayed in its adoption, a certain transition period was introduced. The draft bill №2194 is a very large, voluminous document, where we can find a lot of information, which specifies certain provisions of the basic law. Some of the provisions of the draft bill №2194 come into force immediately, and some - simultaneously with the entry into force of the law on the agricultural land turnover," said the expert.

The first myth. The draft bill №2194 allows foreigners to buy land

It is not true. Foreigners will not be able to buy land and there is a direct provision of law. The draft bill №2194 completely removes this ambiguity. Until January 1, 2024, the purchase of agricultural land for commercial agricultural production and personal farming, which is allocated in kind at the expense of land share, will be exclusively persons who are citizens of Ukraine. From January 1, 2024, to acquire the right of agricultural land plots ownership can:

• citizens of Ukraine;
• legal entities of Ukraine, created and registered under the legislation of Ukraine, the participants (shareholders, members) of which are only citizens of Ukraine and/or the state, and/or territorial communities;
• territorial communities;
• the state.

Agricultural land ownership can also be acquired by banks only in the form of foreclosure as a subject of pledge. Such land plots must be taken by banks at land auctions within two years from the date of ownership acquisition.

Ownership acquisition of agricultural land by legal entities established and registered under the legislation of Ukraine, participants (founders) or ultimate beneficial owners of which are persons who are not citizens of Ukraine, may be carried out from the date and such a decision made through a referendum. All other persons will be prohibited from acquiring agricultural land ownership. That means the issue of foreigners' access to the agricultural land purchase must be resolved in an All-Ukraine referendum. Only if the citizens of Ukraine support such an initiative, foreigners be able to acquire land indirectly, i.e. through a legal entity established in Ukraine.

The second myth. Land plots will be bought by companies, which have the right to extract minerals, as they are the first in line to realize the preemptive right to purchase land

"None of the above! There are certain direct issues in this norm. The first thing - the right to buy land plots has a person who does not extract any minerals, but of national importance. The second thing - the right to extract not all minerals of national importance, but only those provided by the law article. These are metal ores of non-ferrous, precious, rare metal and rare earth metals, radioactive metals, electrical and radio technical raw materials. It is not all the earth crust interior that exists in Ukraine; it is a limited number that falls under this requirement. The third thing - not everyone who extracts minerals has the primary right to buy land. It must be real a person who has already received such a special permit and it is reflected in the StateGeoCadaster, the boundaries of the territory for which was given such a permit was issued. So, if there is such a permit, then it is clear that most likely no agriculture production is conducted there,” Victoria Kipriianova explained.

The third myth. All land plots will be bought through electronic auctions

The adopted bill №2195 regulates the issue of selling land through electronic auctions. Victoria Kipriianova mentioned that there is no rule in the law according to which privately owned agricultural land must be sold at auctions. Land plot owners can discuss this issue directly with the buyer. Auction sale - only at the request of the owner. Talking about agricultural land of state and communal ownership, the Law №552 “On the Conditions of Agricultural Land Turnover” contains a direct rule prohibiting its sale.

"The only one form of agricultural land for state and communal ownership that can be redeemed - farm land, which was given to citizens to establish a farm (AE) on the right of lifelong inheritable possession and permanent usage, as well as those of this right was re-leased until 2010. The draft bill №2195 does not allow to sale agricultural land of state and communal ownership, and it is only about the lease of such land through electronic auctions, so that the process was fully open, public and exclude any abuse and benefits for selected persons," said Victoria Kipriianova.