Draft Law of Ukraine

''On Amendment of the Law of Ukraine ''On Leasing''

This draft provides for a new wording of the current law of Ukraine “On Leasing”.

The proposed draft defines not only the concept of ‘leasing’, but it also outlines possible forms and types thereof.

This draft law stipulates essential conditions to be outlined in a leasing agreement and necessity to make such agreement in writing. There is a detailed description of lessor’s and lessee’s rights and duties under the leasing agreement. This draft also establishes the procedure for transferring the leased property into lessee’s ownership or returning it back to a lessor after expiration of the term of a leasing agreement.

In the event of financial leasing, lessee is responsible for all risks of accidental destruction or damage of the leased object. In the event of operational leasing such risks is the sole responsibility of a lessor. Damages caused to the third parties in the result of operation of the leased object shall be reimbursed by a lessee.

Leasing agreement may envisage accelerated depreciation of the leased object.

This draft establishes that in the event the object of lease is represented by state-owned property, or its acquisition will be funded by state, then such agreement is subject to state registration. The Cabinet of Ministers of Ukraine is to determine the relevant registration procedure. Leasing agreements that have not been duly registered will be considered invalid.