To eliminate of agricultural producers’ discrimination in access to concessional loans under the state program of support for small and medium scale businesses. The Ukrainian AgriCouncil addressed this request to the Ministry of Agrarian Policy and Food of Ukraine.

“On March 12, 2022 the Cabinet of Ministers of Ukraine adopted Resolution No. 274 amending the Procedure for providing financial support to small and medium scale businesses, approved by the Cabinet of Ministers of Ukraine as of January 24, 2020 No. 28 (hereinafter — the Procedure). According to these amendments, agricultural producers have received the right to receive financial support through interest rate compensation by the Business Development Fund and provision of portfolio guarantees to authorized banks to ensure loan performance granted to agricultural producers. Such loans are granted by the authorized banks until 31 May 2022 for the purchase of fixed assets of agricultural production and to cover any expenses related to agricultural activities as defined by the Law of Ukraine “On State Support of Agriculture of Ukraine,” is mentioned in the statement.

At the same time, according to paragraph 2 item 2 of the Procedure, the recipient of such aid shall be a legal entity, the ultimate beneficial owners (controllers) of which are residents of Ukraine. Consequently, agricultural producers, registered in Ukraine, which cultivate agricultural land, are located in Ukraine and are engaged in agricultural production, create jobs in Ukraine and pay taxes to the country's budget, support the Armed Forces with machinery and workers as part of the mobilization, but which ultimate beneficiaries are non-residents of Ukraine, are actually deprived of access to the mentioned program of state lending.

«We consider this approach to state support is unfounded and unfair, as well as one that contains signs of discrimination against business entities - agricultural producers, and damage Ukraine among the agrarian community of the European Union. It should also be taken into account that many non-Ukrainian residents, who own agrarian enterprises, are now actively working to provide the country with humanitarian aid and financial support for the Ukrainian Armed Forces, the population of the affected regions and refugees." - is commented by the UAC

It is mentioned, that in connection with the above, it should be noted that the above provisions of the Procedure are inconsistent with both the primary legislative act pursuant to which it was adopted and the Commercial Code of Ukraine. In particular, based on the preamble of the Cabinet of Ministers Resolution No. 28 of 24.01.2020, which approved the Procedure, such resolution was adopted pursuant to Articles 12 and 16 of the Law of Ukraine “On the Development and State Support of Small and Medium Enterprises in Ukraine” and Article 48 of the Commercial Code of Ukraine. However, the above articles of these legislative acts do not provide for restrictions in access to the support program for business entities registered in Ukraine and whose beneficial owners are non-resident individuals.

“Instead, the Law of Ukraine “On the Development and State Support of Small and Medium Enterprises (SME) in Ukraine” defines “ensuring the development of small and medium scale enterprises in order to create a competitive environment and increase their competitiveness” (paragraph 2, part 1, article 3) as one of the goals of state policy in the field of small and medium scale enterprise development, and notes such principles as “accessibility of state support to small and medium scale enterprises”, “creation of equal opportunities for small and medium scale enterprises, which meet the requirements of national, regional and local small and medium scale enterprise development programs to participate in such programs and to receive state support", “accessibility of SME support infrastructure to all SMEs” as principles of state policy in the development of small and medium enterprises (paragraphs 2, 4, 7, part 2, article 3).” – is said by the experts

“In view of the above and considering the purpose of the state loan program for agrarians and the importance for the state to ensure all farmers, registered in Ukraine, carry out a proper sowing and harvesting campaign, and taking into account the above principles of state policy to support business entities, we ask you to initiate amendments to the Procedure, which would eliminate such condition to the beneficiary as “the presence of ultimate beneficial owners (controllers) — natural persons — residents of Ukraine,” is mentioned in the statement.

However, it is obligatory to keep such criteria for refusing to receive state support in the Procedure as belonging of the recipient to a person, whose participant (shareholder, member) or ultimate beneficiary is a citizen of a state, recognized by Ukraine as an aggressor state or an occupant state, and/or a person belonging or belonged to a terrorist organization, a legal entity in which a person belonging or belonged to a terrorist organization is a participant (shareholder, member) or the final beneficiary (subparagraph 1.1 paragraph 8 of the Procedure).