{"id":770339,"date":"2018-09-18T11:54:07","date_gmt":"2018-09-18T08:54:07","guid":{"rendered":""},"modified":"2018-09-18T11:54:07","modified_gmt":"2018-09-18T08:54:07","slug":"ukraine-new-guidelines-on-state-aid-in-relation-to-international-financial-institutions","status":"publish","type":"post","link":"https:\/\/new.eba.com.ua\/en\/ukraine-new-guidelines-on-state-aid-in-relation-to-international-financial-institutions\/","title":{"rendered":"Ukraine: New guidelines on state aid in relation to international financial institutions"},"content":{"rendered":"

On 17 September 2018<\/strong>, the Antimonopoly Committee of Ukraine (the “AMC<\/strong>“) published new guidelines on state aid dated 6 September 2018 (the\u00a0“Guidelines<\/strong>“) that clarify the AMC’s approach to financing provided by international financial institutions (“IFIs<\/strong>“) and to state and municipal guarantees securing the obligations in respect of such financing. While the Guidelines do not include a definition of an IFI, they do expressly mention the European Investment Bank, the European Investment Fund, the International Monetary Fund and the European Bank for Reconstruction and Development. Therefore, financing provided by these IFIs in connection with state aid falls under the scope of the Guidelines.<\/p>\n

The Ukraine’s legislation on state aid is built around the concept of “state resources” and “municipal resources”, the granting of which may constitute “state aid”. Follow this link<\/a> to download a detailed overview of state aid legislation in Ukraine.<\/p>\n

Financing by IFIs<\/strong><\/p>\n

According to the Guidelines, if a state or municipal authority provides a loan to an undertaking, e.g.<\/em>, Ukrainian business organisation or individual entrepreneur (the “beneficiary<\/strong>“), such a loan is regarded as “state resources” or “municipal resources”, respectively, and its granting may be considered as state aid \u2013 even if funding is provided by an IFI \u2013 unless the following exception applies. If the IFI designates the beneficiary and determines the purpose and disbursement regime in relation to the loan, such financing provided by the IFI is not considered as state aid and does not trigger the requirement for the state or municipal authority to obtain the consent of the AMC.<\/p>\n

On-lending by Ukrainian state-owned banks <\/strong><\/p>\n

With reference to the European Commission’s Notice on the notion of State aid<\/a>[1]<\/a>, the AMC has clarified that state resources include all resources of the state-owned sector of the economy, to the extent the state is able to direct the use of such resources. According to the Guidelines, state resources therefore include the resources of state bodies (in particular Ukraine\u2019s central bank) and of state-owned companies.<\/p>\n

With this in mind, the Guidelines allow the following interpretation in relation to, e.g., a Ukrainian state-owned bank. If an IFI provides a loan to a Ukrainian state-owned bank for the purpose of on-lending to other borrowers and the IFI does not designate the beneficiary and determine the purpose and disbursement regime of such a loan but instead provides the bank with guidelines for the selection of borrowers and sets other loan parameters, the financing by the bank may be regarded as state aid and the bank may need to obtain consent of the AMC.<\/p>\n

Co-financing with Ukrainian state and municipal authorities<\/strong><\/p>\n

In contrast, if an investment project is financed jointly by an IFI and a Ukrainian state or municipal authority, in accordance with the Guidelines the state or municipal authority must obtain the AMC’s consent only in relation to the part of the financing that is considered state or municipal resources.<\/p>\n

State and municipal guarantees<\/strong><\/p>\n

According to the Guidelines, a state or municipal guarantee is a state aid measure and requires the consent of the AMC unless all of the following conditions are satisfied:<\/p>\n