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LAW OF UKRAINE

of February 4, 2021 No. 1201-IX

About financial leasing

(as amended on 14-12-2021)

This Law determines general legal and organizational basis of financial leasing in Ukraine according to international standards in this sphere.

Section I General provisions

Article 1. Determination of terms

1. In this Law terms are used in such value:

the agreement of financial leasing - the agreement on which services in financial leasing are provided;

the lessor - the legal entity who acquired the right to provide services of financial leasing in the procedure established by the law and based on the agreement of financial leasing gives to the leasing recipient to ownership and use object of financial leasing;

the leasing recipient - physical person, physical person entrepreneur or the legal entity who according to the agreement of financial leasing receives from the lessor object of leasing in ownership and use;

the seller (supplier) - physical person, physical person entrepreneur or the legal entity at whom the lessor acquires in property property based on the purchase and sale agreement or the delivery agreement for the subsequent transfer to the leasing recipient based on the agreement of financial leasing;

financial leasing - type of legal relations on which the lessor shall according to the contract of financial leasing for term and for a fee, determined by such agreement to transfer to the leasing recipient to ownership and use as object of financial leasing property which belongs to the lessor on the property right and acquired by it without preliminary arrangement with the leasing recipient, or the property which is specially acquired by the lessor at the seller (supplier) according to the specifications and conditions established by the leasing recipient and also which provide at the same time observance at least of one of signs (conditions) of financial leasing provided by Items 1 - 4 parts one of article 5 of this Law.

2. Other terms in this Law are used in the values given in the Civil code of Ukraine, the Economic code of Ukraine, the Law of Ukraine "About financial services and finance companies", the Law of Ukraine "About consumer protection", the Law of Ukraine "About electronic commerce".

Article 2. Purpose and scope of the Law

1. The purpose of this Law is ensuring protection of the rights and legitimate interests of leasing recipients, lessors, creation of proper competitive environment in the sphere of financial leasing, harmonization of the legislation of Ukraine with the European Union law and international standards in this sphere, providing favorable conditions for development of economy of Ukraine.

2. This Law governs the relations arising in the sphere of financial leasing.

Article 3. The legislation in the sphere of financial leasing

1. The relations between the lessor and the leasing recipient arising based on the agreement of financial leasing are regulated by provisions of the Civil code of Ukraine, the Economic code of Ukraine, this Law taking into account the features established by the Law of Ukraine "About financial services and finance companies" and also the acts of the National Bank of Ukraine adopted according to the law.

2. The relations arising between the lessor and the seller (supplier) in connection with acquisition by the lessor in property of object of financial leasing for the subsequent transfer of this object to the leasing recipient based on the agreement of financial leasing are regulated by regulations of the Civil code of Ukraine on purchase and sale, delivery taking into account the features established by this Law.

3. Provisions of other regulatory legal acts govern the relations in the sphere of financial leasing in the part which is not contradicting this Law.

Article 4. State regulation and supervision in the market of financial leasing

1. State regulation and supervision in the market of financial leasing is exercised by the National Bank of Ukraine according to the Law of Ukraine "About financial services and finance companies", to this Law and other legal acts of Ukraine.

2. Other state bodies exercise control of activities of participants of the market of financial leasing and obtain from them information within the powers determined by the law.

Article 5. Signs of financial leasing

1. Leasing is considered financial if pass all risks and remunerations (benefit) concerning use to the lessee and ownership of object of financial leasing, on condition of observance at least of one of the following signs (conditions):

1) object of financial leasing is transferred to the term during which at least 75 percent of its original cost will be amortized, and the lessee shall based on the agreement of the financial leasing or other agreement determined by the agreement of financial leasing during the term of the agreement of financial leasing to acquire object of leasing with the subsequent transition of the property right from the lessor to the leasing recipient at the price and on the conditions provided by such agreement of financial leasing or other agreement determined by the agreement of financial leasing;

2) the amount of leasing payments at the time of the conclusion of the agreement of financial leasing is equal to original cost of object of leasing or exceeds it;

3) the balance sheet (residual) project cost of leasing at the time of the termination of the duration of the agreement of the financial leasing provided by such agreement constitutes no more than 25 percent of original cost of the price of such object of leasing of the beginning of the duration of the agreement of financial leasing;

4) the object of financial leasing made by request of the leasing recipient after the end of validity of financial leasing cannot be used by other persons, except the leasing recipient, proceeding from its technical and quality characteristics.

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