ALERT: Anticipating the Commencement of the “Large-scale Privatisation”

On the 13th September 2019 the Parliament of Ukraine adopted the draft law No.1054-1 “On Abolition of Law of Ukraine on List of Objects of State Ownership that cannot be Privatised” on its first reading.

Initially, there was another draft law No.1054 that was identified by the President of Ukraine as urgent.

However, in September the same MPs who composed the draft law No.1054 made changes and introduced the new draft law No.1054-1 to the public. Finally on the 2nd October the Bill No.1054-1 was adopted by the Parliament. 

The law provides amendments to the following laws of Ukraine: On Privatisation of State and Communal Property and On List of Objects of State Ownership that cannot be Privatised.

Although the proposed amendments are very narrow compared to other current draft laws in the Ukrainian Parliament, this particular law is expected to be supportive to investment activity in Ukraine. Furthermore, it shows a clear shift from inherited aspects of the Soviet-era planned economy and a purposeful step closer to a free market economy in Ukraine.


The main change introduced by this draft law will occur in the Law of Ukraine On List of Objects of State Ownership that cannot be Privatised (the “List”). The List, which will be abolished by this draft law, includes precise names and locations of public enterprises in Ukraine that cannot be privatised. The substantiation of the List is another Law of Ukraine On Privatisation of State and Communal Property that in article 4 contains criteria of state assets that cannot be privatised. Based on these criteria, the Ukrainian Parliament had adopted as a Law of Ukraine the list of specified public enterprises that cannot be sold to the private sector. 

The List was first adopted in 1999 (with amendments) and includes terminals of seaports, airports, grain elevators, even airlines (for instance, Public Enterprise “Odessa Airlines”), radio centres and film studios.

Effect of adopting the draft law No.1054-1 

The draft law proposes to abolish the List and make it possible to privatise such assets. However, it is only the beginning of the privatisation process. The State Property Fund of Ukraine will be responsible for the sale of state assets through an open auction process. 

The draft law also amends the Law of Ukraine On Privatisation of State and Communal Property. It proposes amending the criteria of public enterprises that cannot be privatised such as military equipment manufacturers and sport infrastructure for international sporting competitions. Moreover, the draft law forbids the privatisation of state assets situated in temporarily occupied territories.

Every region has many state objects to sell (in the list you can find the most relevant examples), including a Regional Broadcasting Center, distilleries and grain elevators. Schedule 1 lists the state property that can be legally privatized as a result of this law. 

Meanwhile, the State Property Fund of Ukraine this January approved the list of privatisation in 2019 that included electricity plants (Ternopil Oblenergo, Centerenergo, Kharkivoblenergo, Zaporizziaoblenergo) and Odessa Port Factory. This privatization has not occurred and a new list should be shortly prepared by the Fund and updated to reflect law No.1054-1 (as it was notified as urgent by the President of Ukraine).


To summarise, although the law No.1054-1 is very small in volume (only one page of a text), it determines an important aspect of state policy for coming years and aims to promote significant investment activity in Ukraine. The draft law represents a first step in the revamped process of privatisation. The decision to sell state assets remains the competence of the State Property Fund of Ukraine. Privatisation is seen a key priority among the supranational institutions supporting Ukraine and the law sends a signal to the international community that Ukraine serious about reforming its economy.

Schedule 1 

Donetsk region (mines) 

Central Bureau of Scientific Technical Information 

The Dzerzinski mine 

The Torezka mine 

The Nova mine 

The Pivnicna mine

The Artem mine 

The Pivdenna mine 

The Mechanical Repair Factory “Dzerzinskcoal” 

The Dzerzinska factory 

The Mariupol Seaport 

Dnipro region (mechanical engineering, metallurgy, grain elevators, distilleries) 

The Eastern Mining and Processing Plant 

The Dnipro Regional Broadcasting Center 

The Pavlograd Chemical Plant 

The Southern Mechanical Engineering Factory 

The Isotope Enterprise “Ukrmetalurgisotop” 

The Pavlopil Grain Elevator 

The Balivka Bakery 

The Dnipro Stud Farm 

The Dnipro Distillery Factory 

The Dnipro Wine Distillery Factory 

Ivano-Frankovsk region 

The Company for Purchasing Liquefied Gas “Ukrtransgas” 

Kyiv region 

The Borispol Company on Petroleum Product Pipelines 

The Central Company for Processing Radioactive Wastes 

The Zuliani Mechanical Engineering Plant “Visar”

Lviv region 

The Dashava Factory of Composite materials 

Petroleum Product Pipelines Company “Druzba” 

The Lviv Regional Broadcasting Center 

The Special Production Factory “Lorta” 


Naftogas of Ukraine 

The Company of Technological Connection “Ukrnaftozviazok” 

The National Expo Center of Ukraine 

The Production Enterprise “Isotop” 

The Special Production for Arsenal Factory 

The Mechanical Engineering Firm Artem

Borispol International Airport 

Publishing houses “Veselka”, “Dnipro”, “Zdorovia”, “Libid”, “Mistectvo”, “Muzicna Ukraina”, “Ukrainska Enciklopedia”, “Urozai”, “Tehnika” 

Film studios “Ukrkinhronika”, “Ukranimafilm” 

Vinnitsia region (distilleries, grain elevators) 

The Kalinivka Production Factory 

The Vinnitsia Alcohol Factory 

The Bershad Alcohol Factory 

The Bar Alcohol Factory 

The Martinivka Alcohol Factory 

The Chechelnitski Alcohol Factory 

The Trostianecki Alcohol Factory 

The Urkivecki Alcohol Factory 

The Bdzilnianski Alcohol Factory 

The Ovecacki Alcohol Factory 

The Uladiv Alcohol Factory 

The Nemiriv Alcohol Factory 

The Gaisin Alcohol Factory 

The Pishansk Open-Cast Mine 

The Vinnitsia Distillery Factory

The Ladizinka Alcohol Factory “Extra” 

The Brailov Juice Factory

Volin region

The Lutsk Distillery Plant 

The Kovel Veterinary Plant 

The Lutsk Bakery 

The Volodimir-Volinski Bakery 

Zaporizhia region

The Factory “Tramplin” 

The Zaporizzia Electronic Mechanical Engineering Plant “Iskra” 

The Zaporizzia Regional Broadcasting Center 

The Berdiansk Seaport 

Lugansk region 

The Petrovski Chemival Plant 

The Chemical Plant “Zoria” 

The Workbench Factory 


The Komunar Shipbuilding Factory 

The Mykolaiv Seaport

Odessa region (seaports) 

The Odessa Seaport 

The Illichivsk Seaport 

The Illichivsk Fish Seaport 

The Reni River Port 

The Izmail Seaport 

The Southern Seaport

Sumi region 

The Shostka Factory “Impuls” 

The Shostka Factory “Zirka” 

Kharkiv region

The Kharkiv Radio Factory 

The Dzerzinsk Izum Instrument Making Plant 

The Kharkiv Machine Engineering Plant “Fed” 

The Production Union “Monolit” 

The Kharkiv Aviation Production Enterprise 

The Kharkiv Electronic Mechanical Plant “Hems” 

The Production Union “The Malishev” Plant 

The Kharkiv Plant of Electronic Equipment

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