Ukrainian President Petro Poroshenko signed the long-awaited law on privatization on March 2, intended to finally sell off more than 3,000 state-owned companies, many of which are inefficient cash cows for corruption.

Poroshenko signed the privatization law of state-owned enterprises during the session of the National Council of Reforms.

“The law envisages fair, transparent, and competitive privatization,” Poroshenko said.

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“Previously, what was the privatization? So-called special conditions, qualification requirements. It seemed like Ukraine has built a wall, defending itself from investments. Why was this done? For bribery. And today, it is the exact opposite. The state is an inefficient owner. It usually receives only losses, and profits traditionally flowed into private hands through corruption schemes.”

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“We will not allow any schemes of fraud, money laundering through Ukrainian privatization,” the president said. “It will make it impossible to accept people associated with the country-aggressor to the auction. I emphasize that Russian money will not take part in privatization in Ukraine.”

Poroshenko said that the law will protect the investor through British courts.

“We must protect the investor. And for the additional guarantee, foreign investors are given the opportunity to appeal to the laws of England and Wales until 2021 – until the completion of judicial reform and the creation of new courts at all levels,” Poroshenko added.

Ex-Economy Minister Aivaras Abromavicius strongly promoted privatization, but resigned two years ago, complaining he was hamstrung by Ukraine’s ingrained corruption and interference from Poroshenko’s top ally and business partner, Ihor Kononenko.

Ukraine’s privatization process stalled until Jan. 18, when Ukraine’s parliament passed a privatization law aimed at boosting investors’ confidence in taking part in tenders for the privatization of Ukraine’s biggest state-owned companies.

The law is supposed to set specific conditions for competition and independent advisory boards. Only strategically important state-owned enterprises should be kept in state ownership. Small enterprises will be sold through an open online auction while large scale objects will be sold with the involvement of advisers. Foreign buyers can pay for the acquired privatization through foreign currency as well.

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Yuliya Kovaliv, head of the office of the National Investment Council, a non-governmental organization that partners with government to lure investors to Ukraine, told the Kyiv Post that the privatization law will decrease corruption.

“It’s everything when you decrease the interference of the public sector in the business,” Kovaliv said. “It is a mixture of giving room for private capital, liberalization and fighting corruption. Because what is the source of corruption – state-owned companies and bureaucracy.”

“The law opens up a way for many ineffective and unprofitable enterprises to get a new life.”

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