government and society

Socially irresponsible owners´ property may be nationalized

31.10.2012 | ,

The Verkhovna Rada of Ukraine has registered a bill on the nationalization of enterprises privately owned by socially irresponsible owners

The draft law on nationalization was registered as No 11384 and published on the official website of the Parliament.

´The bill was designed to establish a legal framework for civilized enforcement of socially inefficient owners towards appropriate social responsibility,´ a memorandum to the document reads.

According to the document, nationalization is forcible compensatory withdrawal of privately owned enterprises for public needs in favor of the state. The bill defines the order of nationalization, the competence of state bodies in implementation of nationalization, and the rights of the owners of property that has been forcibly expropriated through nationalization.

Nationalization will involve property owned by legal persons, irrespective of their legal form, as well as property of private entrepreneurs. Property located on the territory of Ukraine, owned by a foreign legal entity or a non-resident individual entrepreneur, will be subject to nationalization, unless otherwise is stipulated by international treaties.

As stated in the explanatory memorandum to the bill, nationalization of property complexes of enterprises shall be conducted only in exceptional circumstances and for good cause provided by law (for example, mass layoffs in the local industry, or if the company manufactures products, goods or provide services that are of strategic importance for the security of the state).

The bill provides that the decision to nationalize any particular property complex of an enterprise will be made by a separate law. Payment of compensation to the owner of nationalized property, according to the document, proceeds with money from the budget.

As noted, one of the objectives of the bill on nationalization is to protect private property owners from abuses of state bodies, as due to the period of time between nationalization and privatization set at five years, the state loses the opportunity to replace private owners through the nationalization-privatization procedure.

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