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Fighting Corruption through Prozorro: how has the procedure for leasing state and municipal property changed?

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The draft law No. 1055-1 “On leasing state and municipal property” approved by the Verkhovna Rada on October 3 will make the lease procedure transparent, public and competitive. From now on, the property will be leased through the two-tier electronic trading system Prozorro.Sale, and a single accounting base for this property will be created.

According to the director of Prozorro.Sale, Oleksii Sobolev, the approved draft law has 3 key aspects:

  1. Businesses no longer have to look for “friends” to rent the necessary premises;
  2. The public can easily monitor who leases the premises out, to whom and for how much;
  3. Unscrupulous officials encounter obstacles to theft of the state and municipal property.

Centralized collection of information on leasing state and municipal property will allow controlling the use of this property, says the first deputy minister of development of economy, trade and agriculture Pavlo Kuhta.

“We expect an increase in contributions to the state and local budgets from the lease, as well as a decrease in corruption risks and increased process transparency and public scrutiny,” says Kuhta.

Prior to the adoption of draft law No. 1055-1, the lease procedure for state and municipal property was over-regulated, complicated and closed. This has contributed to corruption schemes, according to the analysts of the “Together against Corruption” initiative. The lease was executed through the State Property Fund by filing an application by a potential lessee. Then, if the Fund approved the application, it was sent to the property management body for consideration by the commission. In fact, there was no competition in the lease market as it was only the applicant that was informed of the possibility of renting. Also, a large part of state and municipal property was leased for a mere UAH 1 to entities that were not entitled thereto.

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