The experts from UAC analytical center "Smart Country" and the USAID “Agricultural and Rural Development” Program presented a joint analysis of opponents' comments on the draft law “On Amendments to the Land Code of Ukraine and Other Legislative Acts to Improve Land Governance and Deregulation in the Land Relations” №2194, which provides for the transfer of state lands to communities communal ownership.

During the online conference "Land Decentralization: the bill №2194 is under the microscope", experts presented an analysis of 16 remarks made by People’s Deputies in the session hall on December 2, 2020 before voting on the bill in the second reading.

"The draft law №2194 is strongly opposed for one simple reason: it takes away power from many dishonest officials and deprives them of the opportunity to earn unfair money using their status, as this document transfers land to communities," UAC Deputy Chairman Mykhailo Sokolov said.

Serhii Kubakh, the head of the land reform department of the USAID “AGRO” project, called all the "horror stories" of People's Deputies as performative ones.

"Lands are given to foreigners, uncontrolled change in the purpose of the land plot usage, violate environmental requirements, insufficient qualification of communities to dispose of land on their own - these are all fears that populists promote. It is necessary to tell frankly: with the help of this bill, we depart from old procedures and begin public management of the land. And the community will be responsible before making any decisions,” Serhii Kubakh explains.

Yevgene Berdnikov, who was within the experts and worked on the draft law №2194, called it revolutionary, spoke about the benefits of the law and mentioned that opposition deputies did not work hard analyzing the document.

"First of all, this bill is a part of a package of bills and laws that have already been adopted. In 2021, other laws will come into force, in particular on the circulation of agricultural land and the law on land use planning. Accordingly, the rules come into force simultaneously and must be interpreted as a whole. The Deputies did not take this into account and analyzed only the text of the draft law №2194, which was prepared for the second reading, and did not pay attention to anything else," he said.

The experts of UAC analytical center "Smart Country" and USAID formalized the remarks of People's Deputies opposing the Draft Law of Ukraine №2194 and publicly presented them. And, to avoid further speculation on this draft law provisions, the experts have developed amendments that will be made for a second reading by the People's Deputy of Ukraine Oleh Tarasov.

DETAILED ANALYSIS OF OBSERVATIONS

OPPONENTS’ OBSERVATIONS №1: "This draft law provides for the possibility of acquiring agricultural land by foreigners."

ANSWER/ADVICE: Today, the bill №2194 provides for a change in the current wording of the Part Five of the Article 22 of the Land Code of Ukraine from: “5. Agricultural lands may not be transferred to foreigners, stateless persons, foreign legal entities and foreign countries"

to the editor: “5. Acquisition of agricultural land ownership is carried out taking into account the requirements of the Article 130 of this Code."

This is not a problem, as the Article 130 will be amended in the new version of the Law “On Amendments to the Certain Legislative Acts of Ukraine Concerning the Conditions of Agricultural Land Circulation” of March 31, 2020 № 552-IX and provides that the acquisition of ownership of agricultural land can be made only by 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 and the state. Foreigners, stateless persons and legal entities are prohibited from acquiring shares in the authorized (composed) capital, shares, units, membership in legal entities (except in the authorized (composed) banks capital), which are agricultural land owners (until otherwise will be decided at the referendum).

At the same time, in order to remove all risks and speculations, UAC and USAID specialists propose to the state the Fifth Part of the Article 22 of the Land Code of Ukraine as follows:

"Agricultural land may not be transferred to foreigners, stateless persons, foreign legal entities and foreign states. Acquisition of agricultural land ownership is carried out taking into account the requirements of the Article 130 of this Code."

OPPONENTS' OBSERVATIONS №2: Foreigners will be able to acquire agricultural land through a "scheme" of change in the purpose of the land plot usage, first to non-agricultural, and then, after their purchase, to agricultural one again.

ANSWER/ADVICE: In practice, due to the difference in the monetary value of agricultural and non-agricultural land, such a "scheme" is completely unprofitable.

At the same time, in order to make it even theoretically impossible, UAC and USAID specialists propose to add new parts to the new version of the Article 82 of the Land Code of Ukraine, which was adopted in the first reading

"The Article 82. The ownership right of legal entities land

2. Land plots of agricultural purpose inherited to the legal entities, which in accordance with this Code cannot acquire their ownership, shall be a subject to alienation within one year.

3. In the situation of a changing the purpose of the non-agricultural land purpose with the assignment of such land to the category of agricultural land, owned by a person who in accordance with the provisions of this Code, can not acquire ownership of agricultural land because such a land is a subject of alienation during one year"

OPPONENTS' OBSERVATIONS №3: An opportunity is created regarding the acquisition of land owned by foreign citizens.

ANSWER/ ADVICE: Today, the bill №2194 provides for the removal of the word "Ukraine" from the first part of the Article 33 and the first part of the Article 131 of the Land Code of Ukraine:

"The Article 33. Land plots of personal farms

1. Land plots intended for personal farming can be transferred by citizens for the use of legal entities of Ukraine and can be used by them for commercial agricultural production, farming without changing the purpose of the land plots.

"The Article 131. Acquisition of land ownership at the basis of other civil law agreements

1. Citizens and legal entities of Ukraine, as well as territorial communities and the state have the right to acquire land plots at the basis of exchange, rents, gifts, inheritance and other civil-law agreements. "

In order to avoid the risks to which the deputies pay attention, UAC and USAID experts propose to return the word "Ukraine" to the first part of the Article 33 and to the first part of the Article 131 of the Land Code of Ukraine.”

OBSERVERS' OBSERVATIONS №4: The draft law provides for the exclusion of the notion of especially valuable lands and soils and the authority of the Verkhovna Rada of Ukraine to agree questions connected with their exclusion, which opens the way for privatization of game preserve, historical and cultural significance lands (the Article 150 of the Land Code of Ukraine).

ANSWER/ ADVICE: In fact, the version of the bill №2194 prepared for the second reading provided for the preservation of most of the Article 150 of the Land Code of Ukraine, only the second part, which did not concern soils, was removed:

"The Article 150. Especially valuable lands and the procedure for termination of rights to them

1. Especially valuable lands are:

a) as a part of agricultural lands: uneroded non-solonetz-like loamy black soils of forest origins; meadow-black earth unsalinated non-solonetz-like loamy soils; dark-gray and black-earth podzol soils in forests and glades; brown mountain-forest and deep and medium-deep brown-turf soils; podzol loamy-turf soils; chestnut soils of the Southern coast of the Crimea and deep turf soils of Transcarpathia region)

b) peatlands with a depth of peat more than one meter and drained regardless of depth;

c) lands provided for permanent use by Massandra Winery and enterprises that are parts of it; lands of research fields of research institutions and educational establishments;

d) lands of game preserve, historical and cultural significance lands

2. Termination of the right of land plots permanent use especially valuable lands, defined in items "c" and "d" of the part one of this article, on the grounds of voluntary refusal to use them or by their withdrawal is carried out in coordination with the Verkhovna Rada of Ukraine.

3. Approval of withdrawal materials (purchase) of land plots especially valuable lands which are owned by citizens and legal entities shall be carried out by the Verkhovna Rada of Ukraine on the proposal of the Verkhovna Rada of the Autonomous Republic of Crimea, regional, Kyiv and Sevastopol city councils."

In order to avoid the risks of privatization of game preserve, historical and cultural significance lands, UAC and USAID specialists propose not to delete the second part of the Article 150, but to write it in such a way:

«2. Termination of the right of land plots permanent use especially valuable lands, defined in item "d" of the part one of this article, on the grounds of voluntary refusal to use them or by their withdrawal is carried out in coordination with the Cabinet of Ministers of Ukraine."

At the same time, given that the Verkhovna Rada practically does not consider these issues, their consideration should be entrusted to the Cabinet of Ministers as a permanent executive body formed by the Verkhovna Rada of Ukraine, but to prevent the return to the state and communities of the NAAS usage of which is connected not only with a science, but with corruption - it is not necessary.

OPPONENTS' OBSERVATIONS №5: The owner of a state or communal land plot will be able to change any purpose of the land plot without the consent of the authorized body of executive power.

ANSWER: In this part, the bill does not need to be changed

In fact, the landowner will be able to choose the land’s purpose only if the relevant local council approves the Comprehensive Spatial Development Plan of the Territorial Community, which will divide its territory into certain zones, and only within the types of purpose approved for the zone. At the same time, a comprehensive plan must pass public discussions, approval of all government agencies as part of the Architectural Council and as part of a comprehensive construction examination, but a single land user for the third time and "individually" will no longer need to go through these circles of hell.

OPPONENTS' OBSERVATIONS №6: A new document is submitted by a foreign legal entity to the application for land acquisition.

ANSWER: There is no such document

OPPONENTS' OBSERVATIONS №7: Subsoil users are given the primary right to purchase agricultural land

ANSWER: In this part the bill does not need to be changed. This is perfectly normal. Subsoil extraction is a strategic branch of the national economy, which can exist without following the legal rights and interests of holders of permits for special subsoil use in the relevant territory.

"The Article 130-1. Preferred right to purchase agricultural land

1. The preemptive right to purchase agricultural land has the following entities:

a) a person who has a special permit for the extraction of national importance minerals (metal ores of non-ferrous metals, metal ores of precious metals, metal ores of rare metals and rare earth metals, radioactive metals, electrical and radio engineering raw materials), if the information received from the State Cadastre, this land is located within the subsoil area provided to such person for use, except for land plots on which real estate objects (buildings, structures) are located, which are owned by the person who uses the land plot on the right of ownership, lease , emphyteusis, superficies, as well as in addition to land for gardening (first stage)”

OPPONENTS' OBSERVATIONS №8: Introduction of the possibility to lease a land plot not by the owner of such a plot, but by its actual user.

ANSWER: There is no such a rule. However, there is a useful rule that protects the heirs and buyers of leased land:

"The Article 148-1. Transfer of land plots ownership that are in use

4. Amendments to lease, superficies, emphyteusis, land easements or pledges indicating the new owner of the land are not required and are carried out only with the consent of the parties to the agreement.”

OPPONENTS' OBSERVATIONS №9: Local state administrations are deprived of the authority to exercise state control over land use and protection.

ANSWER: In this part the bill does not need to be changed. Local state administrations currently do not have such powers. The State Geocadastre has them and they are partially redistributed from it for the communities benefit.

OPPONENTS' OBSERVATIONS №10: The transfer of most state lands outside settlements to communities relieves officials of responsibility and threatens Ukraine's status as a unitary state

ANSWER: In this part the bill does not need to be changed. The transfer of land powers to the councils of territorial communities does not undermine Ukraine's status as a unitary state, but "undermines" the corruption of officials at the national and regional levels. This is a principled position of the bill, which must be fully supported.

OPPONENTS' OBSERVATIONS №11: Certified land managers will be able to enter the results of their work in the State Land Cadastre.

ANSWER: In this part the bill does not need to be changed. The draft law does not introduce such a permanent norm, but only instructs the Cabinet of Ministers to conduct a pilot project, which will either prove or disprove the anti-corruption effectiveness and security of such an approach. After all, the existing system, when the registration of land plots is carried out by officials who do not know the area and are not certified land managers, still proves its corruption and does not insure against errors.

OPPONENTS' OBSERVATIONS №12: The bill removes the limit of 10 thousand hectares.

ANSWER: In this part the bill does not need to be changed. There are no such norms concerning property in the bill, and concerning rent - direct restrictions do not exist today and they are not entered neither by this, nor by other bills.

OPPONENTS' OBSERVATIONS №13: Prerogative right is a fiction because there is no prerogative right for the farmer, for the UTC or for the neighbor.

ANSWER: In this part the bill does not need to be changed. If you infinitely extend the prerogative right or grant it on the basis of the size of the farm, the seller (shareholder) does not receive fair money for their land, and healthy economic competition will be artificially inhibited.

OPPONENTS' OBSERVATIONS №14: according to this bill, it will be possible to place power system facilities without the consent of landowners.

ANSWER: In this part the bill does not need to be changed. There is no such a norm. However, there is a useful rule that:

"The Article 76. Energy system lands

4. Linear energy infrastructure facilities may be located on land plots of all land categories without their purpose changing, including under easement agreements signed with owners or land users, in particular permanent users or tenants of land plots."

OPPONENTS' OBSERVATIONS №15: It is not possible to limit the size of a land plot leased to a citizen for gardening.

ANSWER: In this part the bill does not need to be changed. Unlimited gardening is one of the most common corrupt schemes of obtaining an unlimited amount of agricultural land without an auction. Restricting the provision of new land plots for gardening with an area of 0.60 hectares is neither too small nor burdensome.

OPPONENTS' OBSERVATIONS №16: The draft law on notarial acts incorrectly uses the term "identity".

ANSWER: The Agrarian Committee supported these amendments in the vote before the second reading.