The Verkhovna Rada of Ukraine voted for the new Law "On Financial Leasing"

This is the first thorough modification of the basic law in the field of financial leasing market regulation since 2004. The Law is aimed to harmonize legislation in this area, including EU legislation, and to eliminate gaps and ambiguities.

The main innovations presented by the Law are the following:

1. Strengthening the protection of the rights of consumers of financial leasing services, in particular, the introduction of a ban on the lessor to link the conclusion of a financial leasing agreement with the consumer with the requirement to conclude agreements on other services with a particular third party (insurance contracts, property valuation, notarial services, etc.)
2. Determination of the list of essential conditions of the financial leasing agreement, including the description of the object of leasing, which will allow to clearly identify it, terms of ownership, use of the object and term of transfer to the lessee, payment procedure, insurance regulations
3. Determination of the conditions of early termination of the agreement, including the procedure for the termination of the financial leasing agreement in case of significant overdue lease payments (more than 60 days); and
4. Establishing a simple written form of a financial leasing agreement as a general rule, giving the parties the opportunity to notarize the agreement at will.

State regulation and supervision of the financial leasing market is carried out by the National Bank of Ukraine (hereinafter – the "NBU").

According to a comment provided by the NBU, the adoption of the Law will significantly expand the use of leasing as an alternative to long-term financing for the purchase of transportation, equipment, other machinery and real estate.

PwC Legal welcomes these positive developments in the financial leasing market!