On 3 October 2012 the Cabinet of Ministers of Ukraine (the “CMU”) adopted its Resolution No. 939 “On Amendment of Resolution of the Cabinet of Ministers of Ukraine No. 1729 of 27 December 2011 and Invalidation of Certain Acts of the Cabinet of Ministers of Ukraine” (the “Resolution”), which came into legal force upon its official publication on 13 October 2012.

The adopted Resolution eliminated the monopoly on the sale of natural gas imported into the territory of Ukraine by the National Joint-Stock Company “Naftogaz Ukrainy” (the “Naftogaz”) and by certain enterprises producing nitrogenous fertilizers.

Namely, by such Resolution CMU introduced changes to Resolution No. 1729 “On Supply of Consumers with Natural Gas” of 27 December 2011, cancelled Resolution No. 163 “On Sale of Imported Natural Gas within the Territory of Ukraine” of 5 March 2008 and other related legal acts.

Before adopting the Resolution, natural gas, imported into the territory of Ukraine under foreign-economic agreements, was available for further sale exclusively by Naftogaz and its subsidiary “Gaz Ukrainy”, whereas only a limited number of enterprises producing nitrogen fertilizers, specifically determined by the CMU, were allowed to directly import and use natural gas for their own purposes.

Since the Resolution became effective, limitations on the exclusive sale of natural gas imported under foreign-economic agreements are no longer effective, providing all participants of the Ukrainian gas market, which participants have met applicable legislative requirements, with an equal opportunity to sell natural gas imported under foreign-economic agreements.

Earlier, on 4 April 2011, the CMU also cancelled respective provisions under which customs clearance of imported natural gas might have been performed by the State Custom Service of Ukraine only in favor of Naftogaz.

The new Resolution was adopted as a step on the way to reorganizing the Ukrainian gas market, commenced earlier in March 2009 upon signing of Joint Application “Joint EU-Ukraine International Conference on Modernization of Gas-Transport System of Ukraine” and furthering Ukraine's connection to the Energy Charter.

Additional notes
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