Voluntary Financial Restructuring Now Possible in Ukraine 

 In 2016, the Ukrainian parliament passed the Law on Financial Restructuring (the "Financial Restructuring Law") with the aim of creating a workable procedure for voluntarily restructuring debt obligations of Ukrainian borrowers. Technically, the Financial Restructuring Law became effective on 19 October 2016 but did not become operational because the required bodies envisaged in the Financial Restructuring Law were not in place.

In April 2017, the Financial Restructuring Secretariat (the "Secretariat") – a special body responsible for providing administrative support during voluntary financial restructurings carried out under the Financial Restructuring Law – becomes operational. The establishment of the Secretariat was preceded by the election of the Financial Restructuring Arbitration Committee in March 2017 and the Financial Restructuring Supervisory Council in late 2016.

The launch of the Secretariat marks the actual effectiveness of the Financial Restructuring Law. Ukrainian corporations can now restructure their debts in accordance with the Financial Restructuring Law. In order to commence the voluntary debt restructuring process, a Ukrainian debtor should submit a restructuring application to the Secretariat.

For further details on the financial restructuring procedure, please refer to our presentation by following this link.

Additional notes

This LEGAL ALERT is issued to inform Baker McKenzie clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The comments above do not constitute legal or other advice and should not be regarded as a substitute for specific advice in individual cases.