Edict of the President of the Republic of Belarus

(Unofficial translation)

 

Edict of the President of the Republic of Belarus

No. 113 of February 25, 2008

[Amended as of August 15, 2017]

 

On the Order and Conditions of the Sale of Enterprises as Property Complexes of Loss-making State Organizations to Legal Persons

 

For the purposes of ensuring loss-free functioning of state organizations:

1. To establish that:

1.1. the sale of enterprises as property complexes of loss-making state organizations* (hereinafter – enterprises as property complexes) is carried out at a competitive bidding to legal persons (hereinafter – the organizations-buyers) with regard to requirements established by the legislative acts.

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* For the purposes of this Edict a loss-making state organization means a republic or communal unitary enterprise the financial standing and results of economic activities of which are characterized by the fact that during the three and more years prior to the taking, in accordance with this Edict, of the decision about its sale, there is a negative finance result from realization of products, goods (works, services) or net losses.

1.2. the initiators of the sale of enterprises as property complexes of loss-making state organizations shall be republic bodies of state administration and other state organizations subordinated to the Government of the Republic of Belarus, Administration of Affairs of the President of the Republic of Belarus, another state body and another state organization subordinated to the President of the Republic of Belarus, National Academy of Sciences of Belarus, local executive and administrative bodies to which the loss-making state organizations are subordinated (make part of);

1.3. annually, till the April 15 of the year following the reported year, for the sale of enterprises as property complexes:

republic bodies of state administration and other state organizations subordinated to the Government of the Republic of Belarus, Administration of Affairs of the President of the Republic of Belarus, another state body and another state organization subordinated to the President of the Republic of Belarus, National Academy of Sciences of Belarus, local executive and administrative bodies shall form lists of loss-making state organizations which are subordinated to (make part of) them and submit them to the State Committee on Property, for the organizations the property of which is in the republic ownership.

The State Committee on Property presents, in the established order, the mentioned lists to the Council of Ministers of the Republic of Belarus for approval.

Regional and Minsk city executive committees shall ensure the formation and approval of lists of loss-making state organizations, concerning the organizations the property of which is in communal ownership;

1.4. preparation of draft decisions about the sale of enterprises as property complexes shall be made by:

the State Committee on Property, concerning the organizations the property of which is in the republic ownership;

local executive and administrative bodies, concerning the organizations the property of which is in communal ownership.

The state bodies specified in part one of this subclause shall organize work on determining assessment value, conditions and time limits of the sale of enterprises as property complexes in accordance with the legislation on privatization and this Edict;

1.5. the starting price of the sale of the enterprise as a property complex is determined in the amount of 20 percent of its assessment value on the 1 January of the current year. When the assessment value is equal to zero or has a negative value, the starting price of the enterprise as a property complex shall be a base unit established in the Republic of Belarus on the first day of the month in which the sale takes place. And the period between the date on which the assessment of the enterprise as a property complex is made and the date of conclusion of the transaction may not exceed a calendar year.

The land lot is allocated on the right of lease without holding an auction and charging the payment for the right to conclude the lease contract of the land lot;

1.6. obligatory conditions of the sale of the enterprise as a property complex shall be:

availability of an investment project coordinated with the republic body of state administration, other state organization subordinated to the Government of the Republic of Belarus, with the Administration of Affairs of the Presidient of the Republic of Belarus, with another state body, another state organization subordinated to the President of the Republic of Belarus, with the National Academy of Sciences of Belarus, with a local executive and administrative body, to which the loss-making state organization is subordinated, providing for the development of the organization-buyer in the part of using the enterprise as a property complex being purchased (hereinafter – the investment project);

obligations set for the organization-buyer in the sales contract concerning:

implementation of the investment project, social programs on supporting the collective of workers;

maintenance of work places for the period of repayment of indebtedness of the loss-making state organization, creation of additonal work places in accordance with the investments project;

acceptance of non-fulfilled obligations of the of the loss-making state organization on payment of taxes (dues), interest collected in accordance with tax legislation, customs legislation of the Customs Union and legislation of the Republic of Belarus on customs regulation, budget loans, credits, other obligatory payment to the republic and local budgets (including state special-purpose budgetary funds), as well as on payment to the state non-budgetary Fund of Social Protection of Population of the Ministry of Labour and Social Protection, on economic penalties, payment of fines and penalty interests accrued, for violations of the legislation, other non-fulfilled obligations;

1.7. decisions about the sale of the enterprises as property complexes shall be taken in the order established by the legislation;

1.8. sellers of the enterprises as property complexes (hereinafter – the sellers) shall be:

the State Committee on Property, concerning the organizations the property of which is in the republic ownership;

local executive and administrative bodies, concerning the organizations the property of which is in the communal ownership;

1.9. the sellers shall conclude sales contracts with the organizations-buyers, sign transfer acts, effectuate control over the compliance of the organizations-buyers of conditions of the sales contracts;

1.10. according to the results of the competitive bidding for the sale of the enterprise as a property complex and the right to conclude the leasing contract of the land lot:

a sales contract for the enterprise as a property complex shall be concluded between the seller and the organization-buyer;

a leasing contract for the land lot shall be concluded between the local executive and administrative body and the organization-buyer;

1.11. the sales contract for the enterprise as a property complex may stipulate its payment in installments for 6 years, without indexation of the payments;

1.12. turnovers amount for the realization of the enterprise as a property complex and the profit from its realization are not subject to taxes, dues (duties).

The monetary funds received from the sale of the enterprise as a property complex shall be directed:

to the republic budget, concerning the organizations the property of which is in the republic ownership;

to the budget of the respective administrative and territorial unit, concerning the organizations the property of which is the communal ownership;

1.13. the organizations-buyers are granted, in the order established by this Edict, in the part of indebtedness of the loss-making state organization:

1.13.1. postponement for 3 years of repayment of the indebtedness on:

payment of taxes, dues (duties) to the republic budget, payments to the Fund of Social Protection of the Population of the Ministry of Labour and Social Protection), on customs payments collected in accordance with the customs legislation of the Customs Union and legislation of the Republic of Belarus on customs regulation;

repayment of budget loans, including interest for using them, and budget interest-free loans;

1.13.2. payment by installments, for 3 years (with repayment monthly in equal shares) for taxes, dues (duties) to the republic budget, payments to the Fund of Social Protection of the Population of the Ministry of Labour and Social Protection) subsequent to the expiration of the effective period of the postponement granted in accordance with indent 2 of subclause 1.13.1 of this clause;

1.13.3. payment by installments, for 6 months (with repayment monthly in equal shares) on customs payments subsequent to the expiration of the effective period of the postponement granted in accordance with indent 2 of subclause 1.13.1 of this clause;

1.13.4. payment by installments, for 2 years (with repayment monthly in equal shares) on obligatory payments to the Fund of Social Protection of the Population of the Ministry of Labour and Social Protection, provided that the organizations-buyers pay the current payments to the said Fund;

1.14. monetary funds released in connection with postponement (installment payment) granted according to subclause 1.13 of this clause shall be directed by the organization-buyer to financing investments to the fixed capital and increment of current assets of the purchased enterprise as a property complex;

1.15. the effect of the postponement with subsequent payment by installments of the indebtedness, provided for in subclauses 1.13.1 – 1.13.4 of this clause, begins from the day of state registration of the sales contract concerning the enterprise as a property complex. The postponement with subsequent payments by installments is granted on the basis of a written application submitted by the organization-buyer to the body which controls making the payments on which they are granted;

1.16. on the sum of the indebtedness on which postponement (payment by installments) has been granted in accordance with subclauses 1.13.1, 1.13.2 of this clause (with the exception of the indebtedness for repayment of budget loans, including interest for using them, and budget interest-free loans) interest is accrued and paid in the amount of ј of the refinancing rate of the National Bank valid on the day of repayment of that indebtedness.

For the use of postponement with subsequent payment by installments, determined in subclauses 1.13.1 – 1.13.3 of this clause, the interest is paid from the sum of the indebtedness postponed simultaneously with payment of the first installment for the repayment of the indebtedness for which the payment by installments has been granted, and from the sum the indebtedness for which the payment by installments has been granted, in equal shares simultaneously with payments made for the repayment of such indebtedness. The accrual of the interest is made form the sum of the payment to be maid for the repayment of the indebtedness postponed (paid by installments);

1.17. when the payments for the repayment of the indebtedness postponed in accordance with subclauses 1.13.2 – 1.13.4 of this clause, interest for using postponement (payment by installments), current payments to the budget are not paid, as well as when monetary funds released in connection with granting postponement (payment by installments) according to subclause 1.13 of this clause, the organization – buyer loses the right to use postponement (payment by installments), and non-repaid sums and interest for the use of postponement (payment by installments) shall be levied with charging the penalty interest for each day of the delay in the amount of refinancing rate of the National Bank effective on the day of its levying. At that, the penalty fee shall be charged beginning from the day following the day of expiration of the time limits for the payment of taxes, dues (duties) and the interest for using postponement (payment by installments), established by the legislation, till their payment, including the day of their payment to the budget;

1.18. the state registration of the enterprise as a property complex, the sales contract, as well as of the rights to that property complex is performed simultaneously by the republic organization on state registration of immovable property, of rights thereto and transactions therewith on the basis of an application of the organization – buyer, the sales contract concerning the enterprise as a property complex, a respective decision about its sale adopted according to this Edict, of documents reflecting the structure of the enterprise as a property complex (balance sheet, deed of inventory, list of all debts (obligations), certificate of acceptance-delivery).

The date of  the state registration of the rights of the organization – buyer to immovable property objects included in the structure of the enterprise as a property complex shall be the date of the state registration of the enterprise as a property complex in accordance with part one of this subclause.

2. This Edict does not cover:

the sale of enterprises as property complexes which 100 work place or less, which have indebtedness on financial obligations equal to assets on the balance sheet or exceeding them, which is carried out at an auction with conditions and/or at a competitive bidding in accordance with the Decree of the President of the Republic of Belarus No. 3 of March 20, 1988 “On Denationalization and Privatization of State Property in the Republic of Belarus”;

loss-making state organizations in relation to which, in accordance with the legislations, a decision on the liquidation has been taken;

sale of enterprises as property complexes in accordance with the legislation on economic insolvency(bankruptcy);

realization of the property in the process of execution of court resolutions and other execution documents in accordance with the legislation on execution proceedings;

loss-making state organizations which have been granted state assistance, for the period of its granting.

3. To impose:

on the heads (or their deputies) of the state bodies and organizations specified in subclause 1.2 of clause 1 of this Edict, in subordination of which were (made part of) loss-making state organizations prior to the sale of enterprises as property complexes, the personal responsibility for:

search of potential investors and time limits of the sale of the enterprise as a property complex;

fulfillment of target plans of the investment project and obtainment of objectives of financial recovery of loss-making state organizations;

on the heads of organizations-buyers which have purchased enterprises as property complexes, the personal responsibility for fulfillment of target goals of the investment project and obtainment of objectives of financial recovery of loss-making state organizations;

4. To recommend to local councils of deputies:

to accept, in the order established by the legislation, dwelling objects and other objects of social sphere belonging to loss-making state organizations on the right of economic management or operative administration to communal ownership, prior to adopting decisions about the sale of enterprises as property complexes;

to grant to organizations-buyers a postponement (payment by installments) of the repayment of the indebtedness on payment of taxes, dues (duties), paid to local budgets (with the exception of income tax from natural persons), in the part of the indebtedness of the loss-making state organization, in the order and on the conditions similar to those determined in subclauses 1.13.1 and 1.13.3.2 of clause 1 of this Edict.

5. The Council of Ministers of the Republic of Belarus shall:

within three month period, ensure the bringing of acts of legislation in accordance with this Edict;

take other measures for the implementation of this Edict.

6. Local councils of deputies shall take decisions aimed at implementation of the provisions of this Edict.

7. To impose control over implementation of this Edict on the Committee of State Control.

8. This Edict enters into force from the day of its official publication.

 

President of the Republic of Belarus                                                                                                                                                                                                                                                                                                                                   A.Lukashenko

 

* unofficial translation *