Rada entitles Ukrainian government to impose moratorium on foreign commercial debt repayment

The Ukrainian Verkhovna Rada passed legislation on Tuesday to entitle the Cabinet to impose a moratorium on the repayment of debts to foreign commercial creditors to protect national interests.

The Ukrainian Verkhovna Rada passed legislation on Tuesday to entitle the Cabinet to impose a moratorium on the repayment of debts to foreign commercial creditors to protect national interests.

The bill 'On specifics of exercising powers in relation to government and government-backed debt and municipal debt' and the accompanying bill 'On amending the Ukrainian Budget Code in connection with the passage of the Ukrainian law 'On specifics of exercising powers in relation to government and government-backed debt and municipal debt' were supported by 256 and 246 parliamentarians respectively. The former document was passed taking into account an amendment proposed orally, which envisions that the law would remain in effect until July 1, 2016.

The bill "On specifics of exercising powers in relation to government and government-backed debt and municipal debt' entitles the Cabinet of ministers and city councils to make decisions on suspending payments on all or some government foreign borrowings, foreign loans (borrowings) guaranteed by the state, and local foreign borrowings and on imposing a moratorium on satisfying creditors' demands on obligations on which the Cabinet of ministers and/or a relevant city council have made a relevant decision.

The law is applicable to all government and government-backed foreign debts and included in the restructuring process, except for Ukreximbank's, Oschadbank's and Ukrzaliznytsia's Eurobonds.

Amendments to the Budget Code suspend the effect of some of its provisions obliging the Finance Ministry to service and clear government and government-backed debts in relation to which a relevant decision has been made.

All rights reserved by Rossiyskaya Gazeta.