On April 15, 2019, the President of Ukraine signed a new Code of Bankruptcy Procedure. The document introduces fundamentally new approaches to bankruptcy, in particular bankruptcy of individuals and electronic auctions for the sale of debtors’ property.
Why is this important for Ukraine?
An auction on the sale of bankrupt property is the last step in the bankruptcy procedure. If the auction does not operate, bankruptcy is an ineffective mechanism a priori, therefore reform failure is possible.
To reform the bankruptcy system, the Code specifies:
Such principles reduce the corruption risk of collusion and the manipulation of auction results, as well as the monopolization of the bankruptcy market.
RPR experts believe that the ProZorro.Sale system is in line with the requirements of the Code, because the public enterprise “PROZORRO.SALE” is the administrator of the only Ukrainian electronic trading system, which covers more than 50 authorized electronic platforms. Assets worth UAH 17 billion have already been sold through the system. ProZorro.Sale Administrator ensures functioning of the ETS and the auction module, in line with the Code.
To prevent monopolization of the bankruptcy market and corruption, RPR experts call on the Cabinet of Ministers of Ukraine and the Ministry of Justice of Ukraine to: