Law of the Republic of Belarus

Law of the Republic of Belarus

No. 2103-ХII of January 19, 1993

[As edited by the Law of July 16, 2010 № 172-З]

 

 

On  Privatization of State Property and Transformation of State Unitary Enterprises in Open Joint-Stock Companies

 

 

This Law is aimed at improving the legal and economic relations in the field of privatization of state property and transforming state unitary enterprises into open joint-stock companies with a view of creating conditions for attracting investments and development of an effective socially oriented market economy.

 

 

Chapter 1

Basic Provisions

 

 

Article 1. Main Terms Used in this Law and Their Definitions

For the purposes of this Law the following terms and their definitions are used:

objects of privatization of state property (hereinafter – privatization objects) – enterprises as property complexes of state unitary enterprises (hereinafter – enterprises as property complexes), shares (stakes in statutory funds) of economic companies which are in the ownership of the Republic of Belarus or in the ownership of administrative and territorial units (hereinafter, unless otherwise specified, – shares (stakes in statutory funds));

subjects of privatization of state property (hereinafter – the subjects of privatization) – natural persons, including individual entrepreneurs, foreign citizens and stateless persons, legal persons of the Republic of Belarus, with the exception of state organizations and economic companies in the statutory funds of which the number of shares (stake), belonging to the Republic of Belarus and/or its administrative and territorial units, exceeds 50 percent, foreign states and its administrative and territorial units, international organizations, foreign legal persons, as well as international organizations that are not legal persons;

privatization of state property (hereinafter – privatization) – selling privatization objects to subjects of privatization under the procedure and conditions established by this Law;

decisions on privatization – the decisions of the President of the Republic of Belarus, the Council of Ministers of the Republic of Belarus, privatization bodies, which determine the way, initial sale price (price) and other conditions of sale of privatization objects, as well as resolve other issues related to privatization in accordance with this Law;

privatization bodies – the republican body of state administration for managing state property, its territorial bodies, local executive and administrative bodies acting in the privatization and transformation of state unitary enterprises into open joint-stock companies on behalf of the Republic of Belarus or administrative and territorial units as owners of state property.  Separate powers of privatization bodies may be carried out by other state bodies (organizations) by the decision of the President of the Republic of Belarus.

 

 

Article 2. Legal Regulation of Relations in the Field of Privatization and Transformation of State Unitary Enterprises into Open

Joint-Stock Companies

Relations in the privatization and transformation of state unitary enterprises into open joint-stock companies are regulated by legislation on privatization based on the Constitution of the Republic of Belarus and consisting of this Law, normative legal acts of the President of the Republic of Belarus and other acts of legislation.

Privatization objects located outside the Republic of Belarus are privatized in accordance with this Law, unless treaties of the Republic of Belarus stipulate otherwise.

Objects being in the exclusive ownership of the state are not subject to privatization, unless otherwise established by laws, acts of the President of the Republic of Belarus.

 

 

Article 3. Scope of Application of this Law

This Law regulates relations arising from the privatization, transformation of state unitary enterprises into open joint-stock companies, and also determines the peculiarities of the legal status of such open joint-stock companies.

This Law does not cover relations connected to the alienation of privatization objects:

in cases of the fulfilment of obligations of the Republic of Belarus in accordance with the treaties of the Republic of Belarus;

when the Republic of Belarus, its administrative and territorial unit exercises the right to demand the redemption by the joint-stock company of shares being in the ownership of the Republic of Belarus or administrative and territorial units, as well as when the participants of economic companies, economic companies, third parties exercise the preemptive right to acquire shares (stakes in statutory funds);

in the course of execution of court rulings;

in cases established by the President of the Republic of Belarus.

This Law does not regulate relations concerning:

the disposal of shares (stakes in statutory funds) which belong to the Republic of Belarus or its administrative and territorial unit and are allocated to state organizations on the right of economic management or operative administration;

the privatization of dwellings of the State Housing Fund;

the transfer to private ownership of land plots.

 

 

Article 4. Methods of Privatization

Privatization is implemented through the sale of:

shares (stakes in statutory funds) at an auction;

shares (stakes in statutory funds) by a competitive bidding;

enterprises as property complexes at an auction;

enterprises as property complexes by a competitive bidding;

shares of an open joint-stock company according to the results of trust management.

Sale of a privatization object without holding an auction (competitive bidding) is carried out in the event of the sale of shares of an open joint-stock company according to the results of trust management and in other cases established by the President of the Republic of Belarus.

Chapter 2

Single State Policy and State Regulation in the Field of Privatization and Transformation of State Unitary Enterprises into Open Joint-Stock Companies

 

 

Article 5. Single State Policy in the Field of Privatization and Transformation of State Unitary Enterprises into Open Joint-Stock

Companies

Single state policy in the field of privatization and transformation of state unitary enterprises into open joint-stock companies is aimed at creating favorable economic conditions for the development of an effective socially oriented market economy.

The main principles of privatization and transformation of state unitary enterprises into open joint-stock companies are:

legitimacy;

a planned and systematic approach;

transparency, openness and public awareness on issues of privatization and transformation of state unitary enterprises into open joint-stock companies;

equality of the subjects of privatization;

alienation for compensation of privatization objects to the subjects of privatization;

observance and protection of rights of owners;

promotion of the development of an effective socially oriented market economy.

 

 

Article 6. Powers of the President of the Republic of Belarus in the Field of Privatization and Transformation of State Unitary

Enterprises into Open Joint-Stock Companies

The President of the Republic of Belarus defines a single state policy and exercises other powers in the field of privatization and transformation of state unitary enterprises into open joint-stock companies, assigned to him by the Constitution of the Republic of Belarus, this Law and other legislative acts.

Concerning privatization objects which are in the ownership of the Republic of Belarus, the President of the Republic of Belarus:

consents to plans for privatization and plans for transformation of republican unitary enterprises into open joint-stock companies;

takes decisions on privatization, lowering the initial sale price of privatization objects, granting powers to the Council of Ministers of the Republic of Belarus or the republican body of state administration for state property management to take decisions on privatization and on lowering the initial sale price of privatization objects, as well as on granting to other state bodies (organizations) powers to resolve certain issues during privatization;

exercises other powers provided by this Law and other legislative acts.

The President of the Republic of Belarus may establish other modes, ways and conditions of privatization than those established by this Law.

 

 

Article 7. Powers of the Council of Ministers of the Republic of Belarus in the Field of Privatization and Transformation of State

Unitary Enterprises into Open Joint-Stock Companies

In the field of privatization and transformation of state unitary enterprises into open joint-stock companies, the Council of Ministers of the Republic of Belarus:

ensures the implementation of a single state policy;

approves, in agreement with the President of the Republic of Belarus, plans for the privatization of privatization objects which are in the ownership of the Republic of Belarus, and plans for the transformation of republican unitary enterprises into open joint-stock companies;

determines, having regard to the requirements of this Law and other legislative acts, the procedure for holding auctions (competitive biddings) for the sale of privatization objects, procedure of competitive bidding for the transfer of shares of open joint-stock companies in trust management belonging to the President of the Republic of Belarus or its administrative and territorial units, including the redemption of part of those shares as a result of trust management, the procedure of holding the competitive bidding at the choice of the founder other than the state of an open joint-stock company established in the transformation of state unitary enterprises, and cases of its holding, as well as the procedure for determining the initial sale price of shares (stakes in statutory funds) in the ownership of the Republic of Belarus;

in cases established by acts of the President of the Republic of Belarus, takes decisions on privatization of privatization objects which are in the ownership of the Republic of Belarus, in accordance with approved plans for privatization and on lowering the initial sale price of privatization objects which are in the ownership of the Republic of Belarus;

is entitled to engage, as consultants on privatization issues, international organizations, foreign legal persons, as well as foreign organizations which are not legal persons, natural persons rendering services on conducting marketing research, assessment of property, determining conditions of sale of privatization objects and other services in this area, including consulting;

exercises other powers assigned thereto by the Constitution of the Republic of Belarus, this Law, other laws and acts of the President of the Republic of Belarus.

 

 

Article 8. Powers of the Local Councils of Deputies in the Field of Privatization and Transformation of State Unitary Enterprises into

Open Joint-Stock Companies

Local Councils of Deputies ensure implementation of a single state policy in the field of privatization and transformation of communal unitary enterprise into open joint-stock companies in the territory of corresponding administrative and territorial unit in accordance with their competence determined by the Constitution of the Republic of Belarus, this Law and other acts of legislation.

Local Councils of Deputies define in compliance with the requirements of this Law and other acts of legislation the procedure for:

 forming and approving plans for privatization objects which are in the ownership of administrative and territorial units and plans for transformation of communal unitary enterprises into open joint-stock companies;

taking decisions on privatization of privatization objects which are in the ownership of administrative and territorial units, and decisions on transformation of communal unitary enterprises into open joint-stock companies;

determining the initial sale price of shares (stakes in statutory funds) which are in the ownership of administrative and territorial units;

lowering the initial sale price of privatization objects which are in the ownership of administrative and territorial units.

Local Council of Deputies in the field of privatization and transformation of communal unitary enterprise into open joint-stock companies exercises other powers in accordance with the Constitution of the Republic of Belarus, this Law and other acts of legislation.

 

 

Article 9. Powers of Privatization Bodies

Privatization bodies shall:

implement a single state policy in the field of privatization;

organize the privatization;

engage, in accordance with acts of legislation, specialists for performing works on privatization;

create commissions on privatization;

prepare draft decisions on privatization in accordance with acts of legislation;

take decisions on transformation of state unitary enterprises into joint-stock companies in accordance with acts of legislation;

prepare proposals on ways and conditions of sale of privatization objects;

stand out as founders of open joint-stock companies being created in the process of transformation of state unitary enterprises;

organize holding of auctions (competitive biddings) for the sale of privatization objects and competitive bidding for the transfer of shares of open joint-stock companies in trust management with the right of redemption of the part of those shares as a result of trust management;

create commissions on holding auctions (competitive biddings) for the sale of privatization objects and commissions on holding competitive biddings for the transfer of shares of open joint-stock companies in trust management with the right of redemption of the part of those shares as a result of trust management;

file statements of claim on disputes arising under privatization contracts, including statements of claim on  the establishment of facts of nullity of privatization transactions and on the application of consequences of the invalidity of such transactions;

exercise other powers in accordance with this Law and other acts of legislation.

In cases established by acts of the President of the Republic of Belarus, the republican body of state administration for managing state property takes decisions on privatization of privatization objects which are in the ownership of the Republic of Belarus, and on lowering the initial sale price of privatization objects which are in the ownership of the Republic of Belarus.

 

 

Chapter 3

Planning Privatization and Transformation of State Unitary Enterprise into Open Joint-Stock Companies and Preparing for Holding Privatization

 

 

Article 10. Planning Privatization and Transformation of State Unitary Enterprise into Open Joint-Stock Companies

Plans for privatization and plans for transformation of state unitary enterprises into open joint-stock companies formed on a three year period:

on privatization objects which are in the ownership of the Republic of Belarus, and on republican unitary enterprises by the republican body of state administration for managing state property on the basis of proposals of republican bodies of state administration and other state organizations subordinated to the Government of the Republic of Belarus, the National Bank of the Republic of Belarus, the Administration of the President of the Republic of Belarus, the Administration of Affairs of the President of the Republic of Belarus, other state bodies and other state organizations subordinated to the President of the Republic of Belarus, as well as of the National Academy of Sciences of Belarus  (hereinafter – state bodies, state organizations);

on privatization objects which are in the ownership of administrative and territorial units and on communal unitary enterprises, under the procedure determined by corresponding local Councils of Deputies.

Plan for privatization shall contain a list of state unitary enterprises property complexes of which are subject to privatization, the list of economic companies shares (stakes in statutory funds) of which are subject to privatization, and expected terms of their privatization.

Plan for transformation of state unitary enterprises into open joint-stock companies shall contain the list of state unitary enterprises which are subject to transformation into open joint-stock companies, and expected terms of their transformation.

Plans for privatization and plans for transformation of state unitary enterprises into open joint-stock companies are approved:

on privatization objects in the ownership of the Republic of Belarus and on republican unitary enterprises by the Council of Ministers of the Republic of Belarus in agreement with the President of the Republic of Belarus;

on privatization objects which are in the ownership of administrative and territorial units, and on communal unitary enterprises by corresponding local executive and administrative bodies, under the procedure determined by local Councils of Deputies;

Plans for privatization and plans for transformation of state unitary enterprises into open joint-stock companies shall be published in the print mass media determined by the Council of Ministers of the Republic of Belarus.

Additionally, plans for privatization and plans for transformation of state unitary enterprises into open joint-stock companies shall be placed in Internet on the sites of privatization bodies.

 

 

Article 11. Organization of Privatization

For the privatization of an enterprise as a property complex through its sale at auction (on competitive bidding) the privatization body creates a commission on privatization which:

determines the composition of an enterprise as a property complex, subject to privatization;

identifies debtors and creditors of the state unitary enterprise;

prepares proposals for the further use of social objects, objects that make an exclusive property of the state, objects which are in the exclusive ownership of the state, and dwellings of the State Housing Fund;

determines the estimated value of the enterprise as a property complex;

makes a conclusion on the initial sale price, sales conditions (in the case of sale through competitive bidding) of the enterprise as a property complex;

organizes the fulfilment of other works related to privatization of the enterprise as a property complex.

The commission on privatization includes representatives of the privatization body, representatives of employees of state unitary enterprise, the representative of state body, and the state organization to which  the state unitary enterprise is subordinated (makes part of).

Since the establishment of a commission on privatization the head of state unitary enterprise agrees with the commission transactions entailing changes in the composition and the cost of the property of state unitary enterprise the sum of each from which exceeds 5 percent of net assets of the state unitary enterprise on the first day of the month in which the transaction has been made. The decisions of commission on privatization on these transactions are binding for the fulfilment by the head and employees of the state unitary enterprise.

The privatization body shall appoint its representative as the chairperson of the commission on privatization.  Members of the commission are responsible for compliance with legislation on privatization, including the objectivity of the materials prepared for taking a decision on privatization of an enterprise as property complex in accordance with legislative acts.

The privatization body shall prepare a draft decision on privatization, unless otherwise established by this Law:

an enterprise as a property complex on the basis of the conclusion of the commission on privatization;

shares (stakes in statutory funds) which are in the ownership of the Republic of Belarus on the basis of proposals of state bodies, state organizations;

shares (stakes in statutory funds) which are in the ownership of administrative and territorial units under the procedure determined by relevant local Councils of Deputies.

After determining the composition of an enterprise as a property complex which is subject to privatization and before taking a decision on its privatization, the head of state unitary enterprise ensures, in accordance with acts of legislation, implementation of the state registration of the establishment of the enterprise as a property complex and creation of rights thereto.

Sellers of privatization objects concerning privatization objects which are in the ownership of:

the Republic of Belarus, are the republican body of state administration for managing state property;

administrative and territorial units, are relevant local executive and administrative bodies.

 

 

Article 12. Determining the Composition of an Enterprise as a Property Complex  which is Subject to Privatization

The composition of an enterprise as a property complex which is the subject of privatization is determined on the basis of balance with regard to the inventory of property and liabilities of the state unitary enterprise.

An enterprise as a property complex which is subject to privatization includes all types of property intended for its activities, including capital structures (buildings, constructions), equipment, inventory, raw materials, products, other property, rights of demand, debts, as well as rights to indications individualizing the legal person, its products, works and services (trade name, trademarks, service marks), and other exclusive rights, unless otherwise provided by acts of legislation.

Social objects may be, in accordance with the decision on privatization, included in the composition of an enterprise as a property complex which is subject to privatization or transferred within the ownership of the Republic of Belarus and/or administrative and territorial units, or transferred to the buyer of privatization object in gratuitous use subject to the preservation of their intended use.

An enterprise as a property complex which is the subject of privatization does not include objects which make the exclusive property of the state, objects which are in the exclusive ownership of the state, unless otherwise established by laws, acts of the President of the Republic of Belarus, and dwellings of the State Housing Fund.  The decision on privatization of an enterprise as a property complex may provide for:

preservation of the right to and the type of use or change the type of use, or the termination of the right to use of these objects in accordance with acts of legislation, – on objects which make the exclusive property of the state;

transfer of the ownership within the ownership of the Republic of Belarus and/or administrative and territorial units, – on dwellings of the State Housing Fund;

transfer within the ownership of the Republic of Belarus and/or administrative and territorial units or the transfer to the buyer of the privatization object in the gratuitous use subject to the conservation of their intended use, – on objects which are exclusively in the ownership of the state.

The intended use of objects allocated in the gratuitouis use is the use each of  objects by the person to whom they transferred according to its purpose, determined in accordance with acts of legislation.  In cases when the use of objects transferred in the gratuitous use according to its purpose is impossible or when these objects in practice may not be used for the purpose, the intended use of such objects is deemed to be the maintenance of these objects in the state ensuring the safety, integrity and readiness to use by a person to whom such objects transferred in the gratuitous use.

Land plots are provided or right to a land plot is transferred to the buyer of an enterprise as a property complex in accordance with legislation on protection and use of lands.

 

 

Article 13. Determining the Initial Sale Price of an Privatization Object

The initial sale price of an enterprise as property complex for sale at auction (through a  competitive bidding) (with the exception of the case provided by part 4 of this article) is determined in the amount of its estimated cost, unless otherwise established by the President of the Republic of Belarus.

The estimated cost of an enterprise as a property complex is determined on the first date of the month and is valid for 12 months from the date on which this cost is determined.

Determination of the estimated cost of an enterprise as a property complex is carried out under the procedure established by acts of legislation.

The initial sale price of an enterprise as property complex which have a number of employees  of up to 100 people, whose outstanding financial liabilities on the date of determining the estimated cost of the enterprise as a property complex equals the balance cost of assets or exceeds this cost, when it is sold through a competitive bidding the estimated cost is to be one base unit on the date of holding the competitive bidding, established in accordance with acts of legislation.

The procedure for determining the initial sale price of shares (stakes in statutory funds), with the exception of the procedures for determining the sale price of shares of open joint-stock companies as a results of trust management, is established, concerning shares (stakes in statutory funds) which are in the ownership of:

the Republic of Belarus, – by the Council of Ministry of the Republic of Belarus;

administrative and territorial units, – by relevant local Councils of Deputies.

The initial sale price of privatization objects may be reduced:

by 20 per cent after the first ineffective or aborted trading;

to 50 percent inclusively after the second ineffective or aborted trading.

The decision on the reduction of the initial sale price of privatization objects are taken on privatization objects being in the ownership of:

the Republic of Belarus, – by the President of the Republic of Belarus or by the state body authorized by him;

administrative and territorial units, – under the procedure determined by relevant local Councils of Deputies.  In the cases established by legislative acts, decisions on the reduction of the initial sale price of privatization objects are taken in agreement with the President of the Republic of Belarus.

 

 

Article 14. Taking Decisions on Privatization

The decision on privatization are taken on privatization objects which are in the ownership of:

the Republic of Belarus, – by the President of the Republic of Belarus or by the state body authorized by him;

administrative and territorial units, – under the procedure determined by relevant local Councils of Deputies.  In the cases established by legislative acts, decisions on privatization are taken in agreement with the President of the Republic of Belarus.

The decision on privatization shall define the privatization object, method, the initial sale price (the price) and other conditions for sale of the privatization object, including the number of shares to be sold as a result of trust management, as well as when a state unitary enterprise has in economic management objects for social purpose, objects being exclusively in the ownership of the state, dwellings of the State Housing Fund and in the use objects which constitute the exclusive property of the state, – conditions for the further use of such objects in accordance with parts 3 and 4 of article 12 of this Law.

 

 

Article 15. Information Support to Privatization

Information about the auction (competitive bidding) for the sale of an object of privatization, and the competitive bidding for transfer of shares of open joint-stock companies into trust management with the right of redemption of a part of those shares as a result of trust management should be published not later than 30 days prior to the auction (competitive biding) in respect of privatization objects owned by:

Republic of Belarus - in the print mass media determined by the Council of Ministers of the Republic of Belarus;

administrative and territorial units - in the print mass media determined by regional and Minsk City executive committees.

Information about the announced auction (competitive bidding) and the object of the privatization is placed additionally at least 30 days before the day of the auction (competitive bidding) in the global computer network Internet in respect of  privatization objects owned by:

the Republic of Belarus , - on the official site of the republican body of state administration of state property management;

administrative and territorial units, – on the official sites of regional and Minsk City executive committees.

During the privatization of enterprises as property complexes by selling at auction (through a competitive bidding) following information is to be obligatorily published in the print mass media and placed in the global computer network Internet:

full and abbreviated name of the state unitary enterprise;

the location of the state unitary enterprise;

name of the privatization body and its location;

method and time limits of privatization;

time limits for presenting claims by creditors;

initial selling price of the enterprise as property complex;

deposit amount to be included for participation in the auction (competitive bidding);

total sum of liabilities of the state unitary enterprise;

number of employees of the state unitary enterprise;

terms of sale of the enterprise as property complex (when privatizing an enterprise as property complex through the sale on a competitive bidding).

When privatizing shares (stakes in statutory funds) through sale at an auction (trough a competitive bidding) the following information is to be obligatorily published in the print mass media and placed in the global computer network Internet: 

full and abbreviated name of the economic company;

location of the economic company;

amount of the statutory fund of the economic company;

portion of the state in the statutory fund of the economic company;

deposit amount to be included for participation in the auction (competitive bidding);

name of the privatization body and its location;

method and time limits of privatization;

number (amount) of shares (of the stake in the statutory fund) being sold;

nominal value of shares (cost of the stake in the statutory fund);

initial sale price of shares (stake in the statutory fund);

terms of sale of shares (stake in the statutory fund) (when privatizing shares (stakes in the statutory fund) through the sale on a competitive bidding).

When holding a competitive bidding on the transfer of shares of open joint – stock companies into trust management with the right of redemption of the part of those shares according to results of the trust management, the following information is to be obligatorily published in the print mass media and placed in the global computer network Internet:

full and abbreviated name of the open joint–stock company;

location of the open joint-stock company;

amount of the statutory fund of the open joint-stock company;

name of the privatization body and its location;

number of shares being transferred into trust management with the right of redemption of  the part of those shares according to the results of trust management;

amount of  shares subject to the sale according to the results of trust management;

nominal value of shares;

main financial indicators of the activities of the open joint-stock company (proceeds from the realization of goods, works and services, prime cost of goods sold, work performed, services rendered, the profits (losses), receivables and payables, the book value of assets for the last reporting period);

performance ratio of activity of the open joint-stock company and their parameters which are essential contract provisions, upon achievement of which according to the results of trust management of shares the right to their buy–out is realized.

The privatization body carries out the publication of the information and placement of the information about the conducting of the auction (competitive bidding) on the sale of the objects of privatization and the competitive bidding for the transfer of the shares of open joint-stock companies into trust management with the right to buy out a part of those shares according to the results of the trust management in the global computer network Internet and bears responsibility for the accuracy of the published (placed) information.

Information on the sold objects of privatization, buyers and terms of sale of privatization objects is placed on a monthly basis in the global computer network Internet on the sites of the privatization bodies, and is subject to publication quarterly, not later than 30th day of the month following the reporting quarter, concerning the privatization objects being in the ownership of:

the Republic of Belarus - in the print mass media determined by the Council of Ministers of the Republic of Belarus;

administrative and territorial units - in the print mass media determined by regional and Minsk City executive committees.

 

 

Chapter 4

Conduct of Privatization, Warranties to Workers in Privatization

 

 

Article 16. Organization of Auctions (Competitive Biddings) on Sale of Objects of Privatization

Sale of the objects of the privatization is carried out at the open auctions (competitive biddings) only for monetary funds.

Only subjects of privatization have the right to participate in the auctions (competitive biddings) on the sale of objects of privatization.

The privatization body sets the amount of the deposit (no more than 10 percent of the initial selling price of the object of privatization), accepts applications for participation in the auction (competitive bidding), creates a commission on conducting the auction (competitive bidding) on the sale of the objects of privatization.  The commission on conducting the auction (competitive bidding) on the sale of objects of privatization determines the participant, which won the competitive bidding, and draws up a protocol on results of the auction (competitive bidding) on the sale of the object of privatization (hereinafter - the protocol).

An auction (competitive bidding) is deemed to have failed if:

only one participant filed  an application for participation in the auction (competitive bidding);

no application was filed for participation in the auction (competitive bidding) ;

only one participant or none of the participants appeared at the auction (competitive bidding).

An auction is deemed to have no result if during the auction, none of the participants expressed a desire to acquire the object of privatization at the price announced by the auctioneer.

A competitive bidding is deemed to have no result if among the applications filed by the participants of the competitive bidding under the terms of the competitive bidding none of the proposals of the participants of the competitive bidding does not correspond to these terms.

The winner of the auction is deemed to be the participant who, in the course of the auction, proposed the highest price for the object of privatization.

In the event when the auction is deemed to have failed due to the fact than only one participant has filed the application for participation in the auction, the object of privatization is to be sold to that participant, upon his consent, at the initial price increased by 5 per cent. The commission on conducting the auction on the sale of the object of privatization draws up a protocol on the sale of the objects of the privatization to that participant.

The winner of the competitive bidding is deemed to be the participant all proposals of which, according to the conclusion of the commission on conducting the competitive bidding on the sale of the objects of the privatization, correspond to the terms of the competitive bidding or contain better terms in comparison with the terms of the competitive bidding.

When only one participant filed an application for participation in the competitive bidding and his proposals correspond to the terms of the competitive bidding, the sale of the objects of privatization is to be made to that participant under the terms proposed by him. The commission on conducting the competitive bidding on the sale of the objects of privatization considers proposals of that participant, gives an opinion on compliance or non-compliance of his proposals to the terms of the competitive bidding and, in the event of conformity of his proposals with the terms of the competitive bidding, draws up a protocol on the sale of the object of privatization to that participant.

In case the auction (competitive bidding) has been recognized to have no result or the auction (competitive bidding) has been recognized to have failed on the grounds specified in indents 3 and 4 of part 4 of this article or the sole participant of the auction (competitive bidding) has refused to acquire the object of privatization, a repeat auction (competitive bidding) may be conducted

The participant that won the auction (competitive bidding) and the commission on conducting the auction (competitive bidding) on the sale of the object of privatization sign the protocol on the day of the auction (competitive bidding).

The deposit should be returned to a participant who has not won auction (competitive bidding), the sole participant of auction (competitive bidding) who has not given the consent to acquire the object of privatization, and also in other cases provided by legislative acts, within five working days from the date of conducting of the auction (competitive bidding).  The amount of deposit paid by the participant who has won the auction (competitive bidding), and also by the sole participant of auction (competitive bidding) with whom the contract of sale of the object of privatization has been concluded is applied against the fulfilment of obligations under the contract of sale .

In the event of refusal (avoidance) of the participant who won the auction (competitive bidding) from signing the protocol or the contract being concluded as a result of the auction (competitive bidding), from compensation of expenses for the organization and conducting the auction (competitive bidding), and also in other cases provided by legislative acts, the deposit made by that participant is not refundable. In case of refusal (avoidance) of the sole participant of the auction (competitive bidding) who gave consent for the acquisition of the object of privatization from signing of the contract being concluded as a result of the auction (competitive bidding), from compensation of expenses for the organization and conducting the auction (competitive bidding), and also in other cases provided by legislative acts, the deposit made by that participant is not refundable.

The procedure for conducting auctions (competitive) on the sale of objects of privatization is determined by the Council of Ministers of the Republic of Belarus with regard to the requirements of this Law and other legislative acts.

 

 

Article 17.  Sale of Shares (Stakes in Statutory Funds) and Enterprises as Property Complexes

Sale of shares (stakes in statutory funds) and enterprises as property complexes at the auction is carried out when the buyer is not required to fulfil any conditions.

Sale at the auction to the subjects of the privatization of shares of the closed join stock companies and stakes in statutory funds of other economic companies is carried out in compliance with the order of offering of such shares, stakes in statutory funds to their participants, those economic companies, third persons in accordance with the legislative acts.

 

 

Article 18. Sales of Shares (Stakes in Statutory Funds) at a Competitive Bidding

Sales of shares (stakes in statutory funds) is carried out at a competitive bidding when the buyer is required to fulfil certain conditions set forth in the decision on the privatization.

Sale at the competitive bidding to the subjects of the privatization of shares of the closed join stock companies and stakes in statutory funds of other economic companies is carried out in compliance with the order of offering of such shares, stakes in statutory funds to their participants, those economic companies, third persons in accordance with the legislative acts.

Participants of a competitive bidding on the sale of shares (stakes in statutory funds) may not be economic companies shares (stakes in statutory funds) of which are put up for sale.

The decision on the privatization through sale of the shares (stakes in  statutory funds) at a competitive bidding may determine the following conditions :

volume, timing and spheres of investments;

preservation and/or creation of a certain number of jobs within a certain period;

preservation of the profile of the economic company within a certain period;

preservation and funding for a certain period of social facilities that the economic company have in the ownership or under a contract of gratuitous use;

other conditions.

 

 

Article 19. Sale of Enterprises as Property Complexes at a Competitive Bidding

Sales of enterprises as property complexes is carried out at a competitive bidding when the buyer is required to fulfill certain conditions set forth in the decision on the privatization.

The decision on privatization of enterprises as property complexes through the sale at a competitive bidding may determine the following conditions :

volume, timing and spheres of investments;

preservation and/or creation of a certain number of jobs within a certain period;

retraining, and/or advanced training of the employees;

preservation within a certain period of the range of manufactured products (types of works, services);

preservation within a certain time of the profile of the state unitary enterprise;

other conditions.

In the event of sale of an enterprise as property complex at a competitive bidding with the establishment of an initial sale price equal to one base amount, the owner of the privatized enterprises as property complex is required to repay the indebtedness on financial obligations of the state unitary enterprise the property complex of which he has acquired, to keep a certain amount of jobs, to ensure operational and commercial activities of the enterprise and meet the other conditions of the contract of sale.

 

 

Article 20. Sale of Shares of Open Joint-Stock Company According to the Results of Trust Management

Sale of a part (not more than 10 percent of the statutory fund) of shares of open joint-stock companies owned by the Republic of Belarus or an administrative and territorial unit, the indebtedness of which on financial obligations  within two years preceding the date of the decision on privatization, primarily (no less than 14 months) are equal to balance sheet value of assets or exceeds its assets (hereinafter in this article - unprofitable open joint-stock companies) may be carried out according to the results of trust management of shares of unprofitable open joint-stock companies.

Draft decisions on privatization of shares of unprofitable open joint-stock companies by selling a part of shares according to the results of trust management are prepared concerning the shares being the ownership of:

the Republic of Belarus, by the republican body of state administration for managing state property, based on proposals of state bodies, public organizations in the management of which are the shares;

administrative and territorial units, by relevant local executive and administrative bodies.

Shares of unprofitable open joint-stock companies owned by the Republic of Belarus or an administrative and territorial unit may be transferred into trust management with the right to buy out those shares according to the results of trust management to the subjects of privatization – professional securities market participants.  Without special permission (license) for professional and exchange activities on securities, the trust management of shares of unprofitable open joint-stock companies, with the right of to buy out those shares according to the result of trust management may be performed by other subjects of privatization in the cases established by the President of the Republic of Belarus.

Transfer to the subjects of privatization in accordance with the decisions on the privatization shares of unprofitable open joint-stock companies into the trust management with the right to buy out those shares according to the results of trust management  is carried out on a competitive bidding, and in case the competitive bidding has been recognized to have failed on the grounds specified in indent 2 of part 6 of this article – according to the result of direct negotiations with sole participant of the competitive bidding.

The privatization body accepts applications for participation in the competitive bidding, creates a commission on conducting the competitive bidding.  The commission on conducting the competitive bidding determines the participant who won the competitive bidding, and draws up a protocol on the results of the competitive bidding.

A competitive bidding is deemed to have failed if:

only one participant filed  an application for participation in the competitive bidding;

no application was filed for participation in the competitive bidding;

only one participant or none of the participants appeared at the competitive bidding.

A competitive bidding is considered to have no result if among the applications filed by the participants of the competitive bidding under the terms of the competitive bidding none of the proposals of the participants of the competitive bidding does not correspond to those terms.

The winner of the competitive bidding is deemed to be the participant whose all proposals, according to the conclusion of the commission on conducting the competitive bidding, correspond to the terms of the competitive bidding or contain better terms in comparison with the terms of the competitive bidding.

In case the competitive bidding is recognized to have failed on the ground specified in indent 2 of part 6 of this article, the commission on conducting the competitive bidding considers the proposals of the sole participant of the competitive bidding and gives a conclusion on the conformity or nonconformity of his proposals with the terms of the competitive bidding and draws up a protocol. In case the proposals of the sole participant of the competitive bidding correspond to the terms of the competitive bidding or an agreement has been reached in the course of direct negotiations on his fulfilment of all terms of the competitive bidding, the privatization body may take the decision to transfer the shares of an unprofitable open joint-stock company into the trust management with the right to buy out a part of those shares according to the results of trust management to that participant.

In case the competitive bidding has been recognized to have no result or to have failed on the grounds specified in indents 3 and 4 of part 6 of this article, and if the application was filed only by one participant and according to the results of direct negotiations between the privatization body and that participant, that participant has not been not selected as trust manager, a repeated competitive bidding may be held.

The participant that won the competitive bidding and the commission on conducting the competitive bidding sign, on the day of the competitive bidding, a protocol on the results of the competitive bidding.

The procedure for conducting the competitive bidding on the transfer of the shares of unprofitable open joint-stock companies into the trust management with the right to buy out a part of those shares according to the results of the trust management and for concluding the contract on trust management of shares with the right to buy out a part of those shares according to the results of the trust management (hereinafter – contract of trust management with right to buy out) as well as for control over its fulfilment is determined by the Council of Ministers of the Republic of Belarus with regard to the requirements of this Law and other legislative acts.

Contracts of trust management with the right to buy out are concluded concerning the shares being in the ownership of:

the Republic of Belarus, with the republican body of state administration for managing state property;

administrative and territorial units, with corresponding local executive and administrative bodies.

The subject of the privatization that concluded a contract of trust management with the right to buy out, after the termination of the trust management and in case he fulfilled all conditions of the contract of trust management with the right to buy out has the right to purchase a part of the shares transferred to him into trust management, in the ownership under a contract of sale subject to conditions specified in the contract of trust management with the right to buy out. Sale price of shares of unprofitable open joint-stock companies is determined by their nominal value in accordance with the charters of those companies on the date of the conclusion of the contract of trust management with right to buy out. The conclusion about fulfilment by the subject of privatization of all terms of the contract of trust management with right to buy out is given concerning the shares being in the ownership of:

the Republic of Belarus, by a state body or state organization, in the management of which those  shares were prior to the transfer into the trust management;

administrative and territorial units, by relevant local executive and administrative bodies.

In the event of non-fulfilment of terms of the contract of trust management with the right to buy out, the subject of privatization has no right to buy out shares of an unprofitable open joint-stock company and bears the liability provided by the contract of trust management with the right to buy out.

 

 

Article 21. Contracts on Privatization

The sale of objects of privatization, including the sale of shares of the open joint-stock companies according to the result of trust management, is carried out on the basis of the contract of sale concluded between the privatization body and the subject of privatization.

The contract of sale of the shares of open joint-stock companies according to the results of trust management is concluded after the termination of trust management of the shares and subject the fulfilment by the subject of the privatization of all the terms of the contract of trust management with the right to buy out.

The contract of sale of the object of privatization is to determine:

object of the privatization, price, order and time limits of payment, transfer period of the object of privatization to the subject of privatization, responsibility  for non-fulfilment of the terms of the contract of sale;

time limits within which the buyer applies for the state registration of the contract of sale and the transfer of the ownership of the enterprise as property complex (in case of privatization of the enterprise as property complex);

other terms in accordance with acts of legislation as well as those  established on agreement of the parties.

The enterprise as property complex is transferred to the customer after the state registration of contract of sale under the transfer act.  State registration of the transfer of the ownership of the enterprise as property complex is carried out after the full payment of the object of the privatization by the buyer in accordance with the contract of sale.  The ownership of the enterprise as property complex is transferred to the buyer from the moment of state registration of the transfer of the ownership.

The ownership of the shares (stakes in statutory funds) being acquired is transferred to the buyer under the procedure established by the acts of legislation and the contract of sale.

 

 

Article 22. Procedure for Payment for the Object of Privatization and Liability for its Violation

Payment for the object of privatization is to be made not later than 30 working days from the date of the contract of sale, unless otherwise stated in the decision on privatization.

In the event of untimely remittance to the corresponding budget of funds to be paid for the object of privatization, the subject of privatization shall pay to the republican or the relevant local budget a fine in the amount of 10 percent of the purchase price for the object of privatization and a penalty interest in the amount of 1/360 of the refinancing rate of the National Bank, established on date of remittance of funds (making payments), on the unpaid sum for each day of delay.

Recovery of the fine and penalty interest specified in part 2 of this article is carried out in the uncontested procedure  on the basis of decisions of the Committee of State Control of the Republic of Belarus, the Ministry on Taxes and Dues of the Republic of Belarus and its territorial bodies, of the Ministry of Finance of the Republic of Belarus, its regional bodies and local financial bodies, on information provided by privatization bodies.

 

 

Article 23. Funds from Privatization

Funds from privatization of the objects of the privatization being in the ownership of the Republic of  Belarus are directed to the republican budget unless otherwise established by the acts of the President of the Republic of Belarus.

Funds from the privatization of the objects of the privatization being in the ownership of the administrative and territorial units are directed to the corresponding local budget unless otherwise established by the legislative acts.

 

 

Article 24.  Guarantees to the Employees upon the Sale of the Enterprises as Property Complexes

Upon the sale of enterprises as property complexes, the employees of state unitary enterprises  are provided with guarantees in accordance with the labor legislation.

Legislative acts may establish additional guarantees for the employees of state unitary enterprises upon the sale of enterprises as property complexes of those enterprises.

 

 

Chapter 5

Transformation of State Unitary Enterprises into Open Joint-Stock Companies, Peculiarities of Legal Status of Such Open Joint-Stock Companies

 

 

Article 25. Transformation of State Unitary Enterprises into Open Joint-Stock Companies

Decisions on the transformation of state unitary enterprises into open joint-stock companies in accordance with approved plans on the transformation of state unitary enterprises into open joint- stock companies are made:

concerning republican unitary enterprises with the number of employees of 1000 persons or more – by the republican body of state administration for managing state property;

concerning republican unitary enterprises with the number of employees of less then 1000 persons – by territorial bodies of the republican body of state administration for managing state property;

concerning communal unitary enterprises – by corresponding local executive and administrative bodies.

The founders of open joint-stock companies established during the transformation of state unitary enterprises (hereinafter in this chapter – the open joint-stock companies) are to be the privatization bodies.  The founders of open joint-stock companies other than the state (hereinafter - the founders other than the state) may be the subjects of privatization who have made monetary and/or non-monetary contributions to the statutory funds of the open joint-stock companies.

Selection of the founders other than the state is to be made by the privatization body by holding a competitive bidding, and in case the competitive bidding has been recognized to have failed on the ground specified in indent 2 of part 5 of this article – according to the results of direct negotiations of the privatization body with the sole participant of the competitive bidding.  The procedure for holding a competitive bidding on selecting the founder other than the state and cases when it is to be held are determined having regard to the requirements of this Law by the Council of Ministers of the Republic of Belarus.

The privatization body accepts applications for participation in the competitive bidding, creates a commission on conducting the competitive bidding.  The commission on conducting the competitive bidding determines the participant who won the competitive bidding, and draws up a protocol on the results of the competitive bidding on selecting the founder other than the state.

A competitive bidding is deemed to have failed if:

only one participant filed  an application for participation in the competitive bidding;

no application was filed for participation in the competitive bidding;

only one participant or none of the participants appeared at the competitive bidding.

A competitive bidding is considered to have no result if among the applications filed by the participants of the competitive bidding under the terms of the competitive bidding none of the proposals of the participants of the competitive bidding does not correspond to those terms.

The winner of the competitive bidding is deemed to be the participant whose all proposals, according to the conclusion of the commission on conducting the competitive bidding, correspond to the terms of the competitive bidding or contain better terms in comparison with the terms of the competitive bidding.

In case only one participant filed the application and according to the results of direct negotiations between the privatization body and the participant that participant was not selected as the founder other than a state, as well as in case the competitive bidding has been recognized to have failed on the grounds specified in indents 3 and 4 of part 5 of this article, or the competitive bidding has been recognized to have no result,  on the decision of the privatization body a repeat competitive bidding may be held or the privatization body may take the decision on transforming the state unitary enterprise without other founders.

Works on creating an open joint-stock company with participation of the founder other than the state, including the preparation of a draft contract on the establishment of open joint-stock company with the participation of the founders other than the state, are performed in accordance with this Law and other acts of legislation.

The decision on the creation of an open joint-stock company with participation of the founder other than the state is to be adopted at the constituent meeting of the open joint-stock company, attended by the founders (or their representatives).

State bodies, state organizations, local administrative and executive bodies shall, during the transformation of state unitary enterprises into the open joint-stock companies:

create sectoral commissions on the transformation of state unitary enterprises into open joint-stock companies (hereinafter in  this article – sectoral commissions);

ensure that the subordinated (making part thereof) state unitary enterprises create the commissions on transformation of state unitary enterprises into open joint-stock companies (hereinafter – the commission on transformation).

The sectoral commission includes representatives of the state body, state organization, local administrative and executive body to which the state unitary enterprise being transformed is subordinated (makes part of).

The commission on transformation includes representatives of the collective of workers of the state unitary enterprises and representatives of the state body, state organization, local administrative and executive body to which the state unitary enterprise being transformed is subordinated (makes part of).

Works on transformation of the state unitary enterprise into open joint-stock company are performed by the commission on transformation.  The commission on transformation carries out the check of the accuracy of the inventory of assets and liabilities of the state unitary enterprise, determines the structure and value of state property and the amount of statutory fund of the open joint-stock company, prepares offers on the further use of social objects, objects that constitute the exclusive property of the state, the objects which are only in the ownership of the state and dwellings of the state housing fund, prepares the project of transformation of the state unitary enterprise into an open joint-stock company and submits it to the sectoral commission.

The structure of property of the state unitary enterprise subject to transformation into an open joint-stock company is determined on the basis of balance sheet taking into account inventory of assets and obligations of the state unitary enterprise.

The property of the state unitary enterprise subject to transformation into an open joint-stock company is to include all kinds of property intended for its activity, including capital structures (buildings, constructions), equipment,  stock, raw materials, products, other property, claims, debts, and also the rights to indications individualizing the legal person, its products, works and services (a company name, trade marks, service marks) and other exclusive rights unless otherwise provided by this Law and other acts of legislation.

The decision on transformation of a state unitary enterprise into an open joint-stock company, when the state unitary enterprise has in economic management social objects, objects that are only in the ownership of the state, dwellings of the state housing fund and in the use the objects constituting the exclusive property of the state, shall determine conditions of the further use of such objects in accordance with parts 18 and 19 of this article.

Social objects may be included in the statutory fund of the open joint-stock company, or be transferred within the limits of the ownership of the Republic of Belarus and/or administrative and territorial units, or transferred to the open joint-stock company into gratuitous use.

The statutory fund of the open joint-stock company may not include objects constituting the exclusive property of the state, objects which are only in the ownership of the state, dwellings of the state housing fund. The decision on transformation of the state unitary enterprise into an open joint-stock company may provide:

preservation of the right to and the type of use or change the type of use, or the termination of the right to use of these objects in accordance with acts of legislation, – on objects which make the exclusive property of the state;

transfer within the limits of ownership of the Republic of Belarus and/or administrative and territorial units, – on dwellings of the state housing fund;

transfer within the limits of ownership of the Republic of Belarus and/or administrative and territorial units or the transfer to the open joint-stock company being created in the gratuitous use subject to the conservation of their intended use, – on objects which are exclusively in the ownership of the state.

The intended use of objects allocated in the gratuitous use is the use each of  objects by the person to whom they transferred according to its purpose, determined in accordance with acts of legislation.  In the events when the use of objects transferred in the gratuitous use according to its purpose is impossible or when these objects in practice may not be used for the purpose, the intended use of such property is deemed to be its maintenance in the state ensuring the safety, integrity and readiness to use by a person to whom such objects transferred in the gratuitous use.

The amount of statutory fund of the open joint-stock company is determined based on the balance sheet value of assets and liabilities of the state unitary enterprise or several state unitary enterprises on January, 1st of the year in which the transformation is being conducted, under the procedure established by the republican body of state administration for managing state property, and in the event of participation of the founder other than the state, also based on the value of the contribution of such a founder, determined in accordance with acts of legislation, and may not be below the minimum size established by legislative acts.

The commission on transformation has the right to make the decision on engaging individual entrepreneurs or the organizations rendering corresponding services for the performance of some works on the transformation of the state unitary enterprise into an open joint-stock company.

The sectoral commission carries out the coordination of works on transformation of state unitary enterprises into open joint-stock companies and control over their course.

The sectoral commission coordinates the project of transformation of the state unitary enterprise into an open joint-stock company, prepares the conclusion about the possibility of creation of an open joint-stock company.

On the basis of the conclusion of the sectoral commission, the privatization body makes the decision on creation of an open joint-stock company in the course of transformation of the state unitary enterprise or in the course of transformation of several state unitary enterprises.

 

 

Article 26. Peculiarities of Participation of the Republic of Belarus, Administrative and Territorial Units in Management of Open

Joint-Stock Companies

The republican body of state administration for managing state property carries out possession and disposal of shares of open joint-stock companies, belonging to by the Republic of Belarus, transfers the mentioned shares in management of other state bodies, state organizations in accordance with  the acts of legislation which appoint the persons who have had passed special training as representatives of the state in management bodies of open joint-stock companies.  Powers of those state bodies, state organizations on management of shares are determined by acts of legislation.

The republican body of state administration for managing state property provides special training of persons for the right to be appointed as representatives of the state in management bodies of open joint-stock companies.

Local executive and administrative organs carry out possession and disposal of shares of open joint-stock companies, belonging to administrative and territorial units, under the procedured determined by corresponding local councils of deputies.

In the open joint-stock companies the shares of which belong to the Republic of Belarus and/or an administrative and territorial unit, the board of directors (supervisory board) is to be created.  Representatives of the state from the Republic of Belarus and/or an administrative and territorial unit are appointed into the board of directors on the basis of decisions of state bodies, state organizations, local executive and the administrative organs, authorized to manage the shares of that company, belonging to  the Republic of Belarus and/or an administrative and territorial unit (hereinafter – the possessory supervision body), to be taken prior to the general meeting of shareholders in which agenda the question on election of members of the board of directors (supervisory board) is included.

The possessory supervision body has the right to replace a representative of the state appointed to the board of directors (supervisory board) of an open joint-stock company, another representative of the state at any time.

The basis for participation of the representative of the state in work of management bodies of an open joint-stock company is the decision of the possessory supervision body on appointment of representatives of the state and the power of attorney issued by that body.

Powers of an representative of the state on participation in activity of the management bodies of an open joint-stock company are determined by acts of legislation, decisions of the possessory supervision body, the power of attorney issued by that body.

During the period when the Republic of Belarus or an administrative and territorial unit posses 100 percent of shares of an open joint-stock company, the decision of the general meeting of shareholders is to be the decision of the possessory supervision body.

 

 

Article 27. Reorganization of an Open Joint-Stock Company by Joining to It of a State Unitary Enterprise

Decisions on the consent to join a state unitary enterprise or several state unitary enterprises to an open joint-stock company are to be taken:

concerning republican unitary enterprises – by the President of the Republic of Belarus on the proposal of the Council of Ministers of the Republic of Belarus;

concerning communal unitary enterprises – under the procedure determined by corresponding local councils of deputies. In the cases established by legislative acts, decisions on the consent to join a communal unitary enterprise or several communal unitary enterprises to an open joint-stock company are to be taken in agreement with the President of the Republic of Belarus.

After the decision to give consent to joining a state unitary enterprise or several state unitary enterprises to an open joint-stock company has been taken, state bodies, state organizations, a corresponding local executive and administrative body shall:

ensure the creation by the subordinated state unitary enterprises (making part thereof) of the commissions on joining the state unitary enterprise or several state unitary enterprises to the open joint-stock companies (hereinafter – the commission on joining);

create sectoral commissions on joining the state unitary enterprise or several state unitary enterprises to the open joint-stock company (hereinafter in  this article – sectoral commissions on joining).

The sectoral commission on joining is formed in under the procedure order similar to the procedure of formation of the sectoral commission according to part 12 of article 25 of this Law. In the event of joining to an open joint-stock company of several state unitary enterprises which are in subordination (make part) of several state bodies, state organizations and/or local executive and administrative bodies, the sectoral commission on joining is to be created under the procedure determined by the republican body of state administration for managing state property.

Works on joining a state unitary enterprise or several state unitary enterprises to an open joint-stock company directly at the enterprise are to be performed by the commission on joining.

The sectoral commission on joining is formed in under the procedure similar to the procedure of formation of the commission on transformation in accordance with part 13 of article 25 of this Law.

The commission on joining carries out the check of the accuracy of the inventory of assets and liabilities of the state unitary enterprise, determines the structure of property of the state unitary enterprise under the procedure determined by parts 15 and 16 of article 25 of this Law, and its value, the amount of increase in the statutory fund of the open joint-stock company and the number of shares of the open joint-stock company to be transferred into the ownership of the Republic of Belarus or an administrative and territorial unit, prepares the draft contract  on joining the state unitary enterprise or participates in preparation of the draft contract on joining several state unitary enterprises to the open joint-stock company.

The decision on the consent to join a unitary enterprise or several state unitary enterprises to an open joint-stock company, when the state unitary enterprise or several state unitary enterprises have in economic management social objects, objects that are only in the ownership of the state, dwellings of the state housing fund and have in the use objects constituting exclusive property of the state shall determine conditions of the further use of such objects according to parts 8 and 9 of this article.

Social objects may be included in the statutory fund of the open joint-stock company to which a state unitary enterprise or several state unitary enterprises are being joined, or may be transferred within the limits of the ownership of the Republic of Belarus and/or administrative and territorial units, or be transferred into the gratuitous use to that open joint-stock company.

The decision on the consent to join a state unitary enterprise or several state unitary enterprises to an open joint-stock company may provide for:

preservation of the right to and the type of use or change the type of use, or the termination of the right to use of these objects in accordance with acts of legislation, – on objects which make the exclusive property of the state;

transfer within the limits of ownership of the Republic of Belarus and/or administrative and territorial units, – on dwellings of the state housing fund;

transfer within the limits of ownership of the Republic of Belarus and/or administrative and territorial units or the transfer to the open joint-stock company into the gratuitous use subject to the conservation of their intended use, – on objects which are exclusively in the ownership of the state.

The commission on joining has the right to make the decision on engaging individual entrepreneurs or organizations rendering corresponding services for the performance of some works on joining a state unitary enterprise or several state unitary enterprises to an open joint-stock company .

The sectoral commission on joining carries out coordination of works on joining a state unitary enterprise or several state unitary enterprises to an open joint-stock company and control over their performance.

Appraisal of the value of property of the state unitary enterprise or several state unitary enterprises being joined is determined based on the balance sheet value of assets and liabilities of that enterprise (those enterprises) on January 1st of the year in which the joining is conducted, under the procedure established by the republican body of state administration for managing state property.

For the purpose of joining a state unitary enterprise or several state unitary enterprises to an open joint-stock company the contract on joining that determine the procedure and conditions of joining is to be concluded between the state unitary enterprise or the several state unitary enterprises and open joint-stock company .  The contract on joining is subject to the approval by general meeting of shareholders of the open joint-stock company and the founder (founders) of the state unitary enterprise (state unitary enterprises). After the approval of the contract on joining, a joint general meeting of shareholders of the open joint-stock company and the founder (founders) of the state unitary enterprise (state unitary enterprises) is to take the decision on increase of the statutory fund of the open joint-stock company, on an additional issue of shares of the open joint-stock company, their transfer to the ownership of the Republic of Belarus or an administrative and territorial unit and on introduction of changes and additions into the statute of the open joint-stock company.  The procedure of voting on the joint general meeting is determined by the contract on joining or at that joint meeting.

When a state unitary enterprise or several state unitary enterprises join to an open joint-stock company,  its (their) rights and a duties pass according to the transfer act (transfer acts) to the open joint-stock company to which joining is carried out.

 

 

Article 28. Peculiarities of Disposal of Shares of Open Joint-Stock Companies

Shares of open joint-stock companies belonging to the Republic of Belarus or administrative and territorial units may be brought as contributions to statutory funds of other economic companies:

when economic companies are being created;

as payment for shares being additionally place upon the increase of statutory fund of joint-stock companies;

as payment for stakes in statutory funds of economic companies.

Decisions on introduction of shares of open joint-stock companies belonging to the Republic of Belarus or administrative and territorial units as contributions to statutory funds of economic companies are to be taken, concerning the shares of open joint-stock companies which are in the ownership of:

the Republic of Belarus – by the President of the Republic of Belarus;

administrative and territorial units, – under the procedure determined by relevant local councils of deputies.  In the cases established by legislative acts, decisions on introduction of shares of open joint-stock companies belonging to administrative and territorial units as contributions to statutory funds of economic companies  are to be agreed with the President of the Republic of Belarus.

Shares of open joint-stock companies belonging to the Republic of Belarus or administrative and territorial units may be transferred into the trust management, including through a competitive bidding, to legal persons being professional participants of the securities market. Without obtaining a special permission (license) for professional and exchange activities with securities, the trust management of shares of open joint-stock companies belonging to the Republic of Belarus or administrative and territorial units may be carried out by other legal and natural persons in the cases established by the President of the Republic of Belarus.

Decisions on transfer of shares of open joint-stock companies into the trust management, including through a competitive bidding, are to be made for the shares of open joint-stock companies which are in the ownership of:

the Republic of Belarus, –  by the Council of Ministers of the Republic of Belarus in agreement with the President of the Republic of Belarus;

administrative and territorial units, – under the procedure determined by relevant local councils of deputies.

The procedure for holding a competitive bidding on transfer of shares of open joint-stock companies belonging to the Republic of Belarus or administrative and territorial units into the trust management to legal and natural persons is determined by the Council of Ministers of the Republic of Belarus with regard to the requirements of this Law and other legislative acts.

Contracts of trust management of shares of open joint-stock companies belonging to the Republic of Belarus is to be concluded with the republican body of state administration for managing state property, and of those belonging to administrative and territorial units, – with corresponding local executive and administrative bodies.

Shares of an open joint-stock company may not be transferred into the trust management to the open joint-stock company which has carried out their issue.

 

 

Chapter 6

Invalidity of Transactions and Liability for Violation of the Legislation on Privatization

 

 

Article 29. Invalidity of Privatization Transactions

The privatization transactions concluded with the violation of the legislation are void.

 

 

Article 30. Liability for Violation of the Legislation on Privatization of State Poperty

Violation of the legislation on the privatization of state property entails the liability in accordance with legislative acts.

 

 

Chapter 7

Transitional Provisions

 

 

Article 31. Termination of the Sale of Shares on Preferential Terms

Sale of shares of open joint-stock companies established during the process of transformation of state unitary enterprises to the employees of those state unitary enterprises and persons equated with them in accordance with the legislation at the price being by 20 per cent less than their  nominal value is to be terminated since January 1, 2014.

 

 

Article 32. Exchange of Personal Privatization Checks «Property» for Shares

Before the termination of the circulation period of the personal privatization checks «Property» their exchange is carried out for the shares of open joint-stock companies created in the process of denationalization and privatization of state property prior to the entry into force of this Law.

Exchange of personal privatization checks «Property» for shares of the open joint-stock companies, indicated in part one of this article is carried out under the procedure established by the legislation in effect prior to January 1, 2011.

 

 

Chairperson of the Supreme Soviet of the Republic of Belarus

S. Shushkevich

 

 

 

 

* unofficial translation *