Page 6 - UKRRptApr21

2.0 Politics
2.1 Ukraine rules to nationalize Motor Sich, extend Russian bank
sanctions.
Ukraine’s National Security and defence Council, headed by President Zelenskiy, decided at its March 11 meeting to return the aerospace firm Motor Sich to the state, the president’s website reported.
“The enterprise will be returned to the Ukrainian people, to the Ukrainian state, in a legal, constitutional way in the very near future,” the council's secretary Oleksiy Danilov commented.
A majority stake of the company was sold by entities close to Motor Sich president Vyachslav Boguslayev to the Chinese company Skyrizon in 2016-2017, though the government refuses to officially approve the Chinese firm as a controlling shareholder.
Among the key opponents to letting the Chinese firm enter the company is the US government, whose top official called such a deal as a “malign Chinese investment” in August 2020.
In another decision, the council prolonged personal sanctions against Ukrainian subsidiaries of Russian state-owned banks for three years. The sanctions against five such banks were introduced for the first time in March 2017. The measures banned any money transfers to the banks’ related companies abroad. Since then, one Russian state-owned bank (VTB-Ukraine) has been recognised as insolvent, one bank has been sold to a Ukrainian owner, and one terminated its banking operations in Ukraine.
At this moment, two such banks, Sberbank-Ukraine and Prominvestbank (subsidiary of Russian state institution Vneshekonombank) continue operating in Ukraine.
Among other decisions on March 11, the council ruled to study an opportunity to nationalize Donetskoblgaz (gas distribution and supply company in the partially occupied Donetsk region of Ukraine), which has a non-transparent ownership structure.
Also, the council ruled to study the circumstances behind the approval of the so-called Kharkiv agreements between Ukraine and Russia in April 2010, based on, which Ukraine extended the presence of Russian naval fleet in Crimea for 2017-2042.
“While the prolongation of the sanctions against the remaining banks that are owned by Russian state entities was an expected event, the rulings to consider the nationalization of Motor Sich and Donetskoblgaz are unexpected moves,” Alexander Paraschiy of Concorde Capital said in a note.
“The government’s proactive position in resolving the Motor Sich issue is a good start after more than three years of uncertainty. Meanwhile, it is not clear in what way the company will be “returned” to state hands after more than two
6 UKRAINE Country Report April 2021 www.intellinews.com