Investors met halfway

Alexander Lukashenko backs proposal to place punitive sanctions against investors on hold for one year, where they have failed to finish construction projects on time

Alexander Lukashenko backs proposal to place punitive sanctions against investors on hold for one year, where they have failed to finish construction projects on time

The Minsk Region’s Governor, Semen Shapiro, notes, “I’m ready to look into the violation of construction contracts by investors. However, I don’t want us to make a habit of dropping sanctions for defaulted obligations, since we may encourage unfinished construction. If a contractor promises something, they should stay on schedule. However, if objective reasons are at play, then we should definitely support investors, particularly at the present time.”

Mr. Shapiro explains that many unfinished investment construction projects were registered in the Minsk Region several years ago. The authorities are supposed to terminate such contracts if construction is unfinished on time, while the investor is supposed to repay privileged terms and preferential customs duties.

“We’ve chosen a different path in order not to crush investors. We’ve asked the Head of State to allow postponement of deadlines in exchange for fines,” notes Mr. Shapiro. He believes this approach will be more profitable for private companies than the termination of contracts and the payment of all penalties. “Today, I asked the Head of State to postpone fines for a year, taking into account the complicated conditions in which private companies are obliged to operate. If they fail to finish construction within the coming year, they’ll have to pay fines due this year,” Mr. Shapiro adds. “The respite will apply to 20-30 investors,” he said, noting that the President had backed the proposal.

Another issue concerning the failure of investors to honour their commitments was also mentioned. Mr. Lukashenko said, “Some time ago, we handed over business assets to investors, such as agricultural enterprises. Now — after buying the assets for a cheap price — some investors are starting to resell them at triple prices. In addition to suppressing this practice we need to take measures to reacquire everything. I absolutely support you on this.”

By Alexander Pimenov
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