Regulatory Affairs

08/ 07/ 2011

On 8 July 2011 the President of Ukraine signed the Law on Amending Certain Legislative Acts of Ukraine on Production Sharing Agreement (as for the state guarantees).

This Law was signed by the Parliament on 17 June 2011. The Law outlines the regulatory framework for production sharing agreements (PSA), namely the state guarantees as per investor-friendly “stabilisation clause”. According to the Law, the state gives warranties that the legislation in force on the date of entering PSA would apply to rights and liabilities of the investor under the respective PSA execution and closing, thus ensuring protection of investors’ rights from unfavorable changes of the legislation as the PSA projects progress.

On 8 June 2011 antedating the adoption of this amendment to the PSA law, the EBA addressed a letter to the respective Parliamentary Committee and to the President of Ukraine promoting the immediate adoption of the “stability clause” as a norm adding value to the investment attractiveness of Ukraine. The EBA strongly upholding the investment protection and augmentation, has also voiced the appeals to guard PSA legislation during the series of meetings with the Delegation of the European Union to Ukraine, representatives of the European Commission in Brussels and Members of the European Parliament.

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