The Cabinet of Ministers approved the mechanism for the transfer of state and communal property with the right of usufruct

The Cabinet of Ministers of Ukraine adopted a resolution regulating the mechanism of usufruct property transfer, the procedure for submitting documents and mandatory control according to its use.

According to the document, state and local self-government bodies can transfer state and communal property for use (usufruct) to state and communal economic associations, enterprises with a state or communal share of more than 50%, as well as to legal entities whose sole founder is the state or community.

After the entry into force of Law No. 4196-IX and the cancellation of the Economic Code, the system of property relations in the public sector underwent significant changes. Ukraine is moving away from outdated Soviet mechanisms of asset management — economic trust and operational management.

Instead, a modern tool of real property law is being introduced – usufruct, which allows authorities and communities to transfer state and communal property into free ownership and use (for a period of up to five years or without a time limit).

The right of usufruct means a limited real right to use someone else’s property with the possibility of receiving income from it, but without the right to sell, donate or alienate it. It is being implemented instead of outdated forms of economic management and operational management.

“We are modernizing the system of property relations in Ukraine, abandoning the Soviet atavisms – economic knowledge and operational management. The introduction of usufruct instead of the right of economic ownership or operational management will ensure uniform rules for the use of state and communal assets and the transparency of their accounting,” Deputy Minister of Economy, Environment and Agriculture Daria Marchak noted.