A group of People's deputies registered in the Verkhovna Rada of Ukraine the Draft Law №9266 of May 2, 2023 "On Electronic Agricultural Receipts". The UAC supports the draft law and, together with the International Financial Cooperation, took an active part in its development.

The purpose of this draft law is to introduce a new financial instrument - electronic agricultural receipts as non-issue of securities in electronic form. At the same time, the draft law does not repeal the Law of Ukraine "On Agricultural Receipts", but introduces a new financial instrument for lending to agricultural production along with traditional paper agricultural receipts.

Objectives of the draft law:

1. Simplification and cheapening of the procedure for issuing, circulating and terminating electronic agricultural receipts compared to traditional paper agricultural receipts. The draft law provides that electronic agricultural receipts will exist in the form of an electronic document in the Register of Electronic Agricultural Receipts. Debtors and creditors under an electronic agricultural receipt may issue, transfer or amend an electronic agricultural receipt in the Register of Electronic Agricultural Receipts independently using their electronic signature without the need to apply to notaries.
2. Expanding the range of entities that can issue electronic agricultural receipts compared to traditional paper agricultural receipts by including agricultural cooperatives.
3. Granting electronic agricultural receipts the status of an enforcement document in case of default by the debtor.
4. Expanding the subject of pledge under an electronic agricultural receipt - in addition to pledging future crops, the draft law provides for the possibility and procedure for pledging live animals and animal products, plant products, and products of their primary processing.
5. In order to increase the attractiveness and reliability of agrarian receipts as a lending instrument, the draft law provides that in case of insufficiency or absence of collateral under an electronic agrarian receipt to satisfy the creditor's claims, the debt under an electronic agrarian receipt is collected indisputably on the basis of a special extract from the Register of Electronic Agrarian Receipts by foreclosing on other property of the debtor under the electronic agrarian receipt. In addition, penalties expressly provided for in the agrarian receipt are collected in this way.

In order to eliminate the potential risk of raiding of agricultural land owners, the Law prohibits the pledging of agricultural land plots under electronic agricultural receipts, as well as the prohibition of debt collection under an electronic agricultural receipt for agricultural land plots owned by the debtor.

Today, limited bank lending and a lack of own funds encourage companies to look for alternative mechanisms to attract financing to the agricultural sector. Further expansion of the use of agricultural receipts may become such an alternative mechanism to facilitate access to financial and commodity resources for agricultural producers.