Recent legal and business developments in Belarus, April 2010
1. The National Bank of the Republic of Belarus (National Bank) adopted Resolution of the Board of the National Bank No.106 dated 16 April 2010 that provides for reduction of refinancing rate by 0,5% to 12,5% per annum starting April 19, 2010.
With this decision the National Bank follows its interest rate policy, which cornerstone is to sustain the interest rates on a real surplus level that, in turn, encourages the attractiveness of the bank deposits in Belarusian rubles over the bank deposits in foreign currency.
The National Bank is pursuing the interest rate policy aimed at gradual reduction of the overall interest rate in the economy, together with ensuring the stability of the national currency and the financial system as a whole.
Moreover, The Republic of Belarus Monetary Policy Guidelines for 2010 provide for reduction of the refinancing rate down to 9 -12% per annum, and rates on credits down to 12-15% per annum.
2. The Government is drafting the new version of the Investment Code meeting the call for improvement of the investment climate in the country.
The Investment code was adopted in 2001 and at the moment does not serve its main function that is to promote attracting investments, as government spokesman said during the conference «Theoretical and practical aspects of implementation of the legislation of Belarus when conducting entrepreneurial, commercial (economic) activity».
The provisions of the Investment code went out of date, some of its regulations contradict to legislative acts. The Code needs to be fully advised with the legislative acts that were adopted after the enactment of the Investment code. Besides, the forms of the investing activities prescribed by the Code, the legal issues of public-private partnership (concession), the issues of carrying out of state comprehensive expert examination of investment projects and other provisions require revision as it was shown by law enforcement practice.
3. The competitive tender on sales of shares of 5 enterprises is scheduled in August of 2010. The World Bank has provided technical support in preparation of the bid. The list of the enterprises was approved by the President and consist of OJSC «Bobruisk machine building plant»,OJSC «VolMET», OJSC «Lida casting and mechanical plant», OJSC «Barhim», OJSC «Rechica textile».
Three professional firms providing Audit, Tax and Advisory services (KPMG, Ernst & Young and Uniter) had accepted the proposition of the Government to facilitate the privatization of the enterprises from the list.
It was announced that at present about 10 enterprises are preparing for sale as it was earlier decided. However, the authorities declare that: «the sale of the companies of strategic importance requires strategic approach and long-term investor», and «the target of privatization in Belarus – is to entice investors and not just to derive an income». However, around 30 companies are now discussed over for privatization in the Government.
4. A package of economic draft bills is to be introduced during the spring session of the lower House of the Belarusian Parliament. The spring session opened on April 2, 2010.
In particular, the bill that provides for amendments to the law «On economic entities» shall be considered shortly. «The amendments set forth advantageous and more transparent rules for the economic entities, raise their protection level, and what is crucial – simplify and adjust the legislation to the new economic conditions» - the speaker of the lower House explained.
The alterations were introduced to the legislation on technical regulation and standardization per feedback of World Trade Organization. The alterations mainly touch upon the simplification of the procedures, which would promote for removing administrative barriers in international trade.
The definition of «financial operation» in the law «On some measures of preventing laundering proceeds of crime and financing of terrorist activity» is clarified according to the respective bill of law.
