On Financial and Industrial Groups

This Law lays down conditions for the creation, state registration, operation and termination of operation of financial and industrial groups in the territory of the Republic of Belarus.

Article 1. Legislation of the Republic of Belarus on Financial and Industrial Groups

The activities of financial and industrial groups are governed by the Civil Code of the Republic of Belarus, this Law, international treaties (agreements) signed by the Republic of Belarus and other legislative acts of the Republic of Belarus.

Relations that are not regulated by the Civil Code of Republic of Belarus, this Law and other legislative acts of the Republic of Belarus are governed by an agreement on setting up a financial and industrial group made by its participants.

Article 2. The Concept of a Financial and Industrial Group

A financial and industrial group is an association of legal persons (the group participants) conducting business activities on the basis of the agreement on setting up the financial and industrial group.

A financial and industrial group is created for the purpose of ensuring economic integration of its participants in order to implement investment projects and programs aimed at enhancing the competitiveness of the products (woks, services) and expanding their sales markets, increasing the production efficiency, creating new jobs.

A financial and industrial group is not a legal person.

Article 3. Transnational Financial and Industrial Groups

A transnational financial and industrial group is a financial and industrial group among the participants of which there are legal persons - residents and non-residents of the Republic of Belarus.

A transnational financial and industrial group set up on the basis of an inter-governmental agreement becomes an inter-state financial and industrial group. The specific terms and conditions of the creation, activity and termination of operation of an inter-state financial and industrial group shall be established by corresponding inter-governmental agreements.

The conditions of the national treatment of the participants of the inter-state financial and industrial group are established by inter-governmental agreements with the observance of the principle of mutuality.

An inter-state financial and industrial group sets up with the consent of the President of the Republic of Belarus on the basis of an inter-governmental agreement on establishing the financial and industrial group.

The specific conditions and procedure for the presentation of documents which have to be submitted, with the purpose of obtaining state registration, by state-owned enterprises and organizations, or by enterprises and organizations with a government property share in their authorized capital fund, participating in inter-state financial and industrial groups sets up by inter-governmental agreements.

The procedure and conditions for the creation, activity and termination of operation of transnational financial and industrial groups sets up other than on the basis of an inter-governmental agreement are governed by the provisions of this Law related to financial and industrial groups.

Article 4. Participants in a Financial and Industrial Group

The participants in a financial and industrial group can be legal persons that engage in any business activities which are not prohibited by the legislation of the Republic of Belarus and make products (execute works, provide services), as well as banks and/or non-bank credit and financial organizations. Financial and industrial groups, in compliance with the legislation of the Republic of Belarus, may also include other organizations which participation is important for the support of the investment process in a financial and industrial group.

Recognized as the participants of the financial and industrial group are legal persons of any legal form of organization and ownership - residents and non-residents of the Republic of Belarus that have signed the agreement on setting up the financial and industrial group, as well as the central company founded by them (hereinafter referred to as "legal persons").

For coordination of their business activities and for handling transactions, the participants of a financial and industrial group sets up a central company, which possess legal personality, or, with the consent of all the participants of the financial and industrial group, is delegated with the authority to coordinate its business activities and to handle the transactions of the financial and industrial group to one of the participants of this financial and industrial group (hereinafter referred to as "the headquarters enterprise"). In this case the headquarters enterprise will exercise the powers of a central company in addition to its operation as a business entity.

A legal person may not be part of more than one group.

State-owned enterprises and organizations, or enterprises and organizations with a government property shares in its authorized capital fund, and may take part in a financial and industrial group with the consent of a competent republican government body, an association (institution) subordinate to the Government of the Republic of Belarus, a local executive and administrative authority which is charge of these enterprises and organizations.

A subsidiary enterprise can be a member of a financial and industrial group only when its parent enterprise is a participant of this financial and industrial group.

Republican government bodies, the National Bank of the Republic of Belarus and local executive and administrative authorities cannot be participants of a financial and industrial group.

Creation and operation of financial and industrial groups in the territory of the Republic of Belarus isprohibited if its aimed for the monopolizing production and/or sales of the products (works, services), preventing, restricting or eliminating competition, infringing the legitimate interests of consumers, and also in other cases when creation and operation of a financial and industrial group contradicts the legislation of the Republic of Belarus, causes damage to the sovereignty, national security, territorial integrity, political and economic stability of the Republic of Belarus, infringes on the citizens' rights and freedoms.

Article 5. Agreement on the Creation of a Financial and Industrial Group

An agreement on setting up a financial and industrial group stipulates the following:

the financial and industrial group name;

the procedure of founding a central company, when none of the financial and industrial group's participants is authorized to operate as a headquarters enterprise;

the method whereby the financial and industrial group is founded;

the purpose of setting up the financial and industrial group and the methods of attaining the common economic objective;

the procedure of forming the governing council of the financial and industrial group, the scope of authority and other conditions of the council's operation;

the procedure of making changes in the composition of the financial and industrial group;

the procedure of distributing profits and paying taxes;

the procedure of the acquisition and use of property by the central company (headquarters enterprise);

the amount, procedure and conditions of pooling the assets of the financial and industrial group's participants;

the term of validity of the agreement;

other terms and conditions, mandatory or typical for these civil-law relations, which are established by the participants proceeding from the goals and tasks of the financial and industrial group being created and in conformity with the requirements of the legislation of the Republic of Belarus.

Article 6. State Registration of a Financial and Industrial Group

An association of legal persons shall acquire the status of a financial and industrial group as from the date of obtaining state registration in accordance with the requirements of this Law.

To obtain state registration of a financial and industrial group, the central company (headquarters enterprise) submits the following documents to the republican government body authorized by the President of the Republic of Belarus (hereinafter referred to as the "authorized republican government body"):

an application of the financial and industrial group fondation;

an agreement of the financial and industrial group fondation;

copies of the documents confirming the state registration of legal persons, participants of the financial and industrial group, certified by their heads;

an extract from the register of the joint-stock company shareholders (if the financial and industrial group is being organized so that each participant has a share in the property of each of the other participants, or when all or some of the participants are joint-stock companies);

the organizational project of the financial and industrial group.

The Government of the Republic of Belarus may specify additional requirements for the set of documents to be submitted, if needed.

A decision on providing or denying state registration to a financial and industrial group is made by the authorized republican government body within 15 days after the date of filing an application for the creation of the financial and industrial group.

The authorized republican government body notifies the central company (headquarters enterprise) of the financial and industrial group about the adopted decision within five days.

The decision to deny state registration to a financial and industrial group is made by the following cases:

in the event of violation of the procedure for the creation of a financial and industrial group;

when the documents necessary to obtain state registration fail to conform to the requirements of the legislation of the Republic of Belarus;

on revealing the circumstances stated in the eighth part of Article 4 of this Law.

A denial to register a financial and industrial group must be accompanied with a written explanation of the reasons.

The state registration of a financial and industrial group is confirmed by the issue of a registration certificate.

Any amendments and addenda to the agreement of setting up a financial and industrial group are liable to state registration.

In the case when the proposed amendments and addenda will lead to the changing of the essential terms and conditions of the agreement on founding the financial and industrial group or to modify the organizational project, the financial and industrial group must be reregistered.

A registered financial and industrial group includes to the State Register of financial and industrial groups and other business groups of the Republic of Belarus, the Register being kept by the authorized republican government body.

The decision to deny registration of the financial and industrial group is judicially appealable.

No legal person other than the central company (headquarters enterprise) of a financial and industrial group have the right to use the words "financial and industrial".

Article 7. Organizational Project of a Financial and Industrial Group

The organizational project of a financial and industrial group is a set of documents containing the required information on the purposes and tasks of creating the financial and industrial group, the investment projects and other substantiating papers submitted by the would-be participants of the financial and industrial group to the authorized republican government body in order to obtain registration of the financial and industrial group.

The requirements of the organizational project of a financial and industrial group are specified by the Government of the Republic of Belarus.

Article 8. Management of a Financial and Industrial Group

The supreme management body of a financial and industrial group is the governing council which made up of the representatives of all the participants thereof.

The scope of authority of the governing council of a financial and industrial group is determined by the agreement on the creation of the financial and industrial group.

The method of managing a financial and industrial group is established by the agreement on the creation of the financial and industrial group.

Article 9. The Central Company Founded by the Financial and Industrial Group Participants for Coordination of Their Business Activities

The central company is a legal person set up with the purpose of representing the interests of all the parties to an agreement on creating a financial and industrial group in the form of a joint-stock company which is registered in the territory of the Republic of Belarus and authorized by the agreement on creating a financial and industrial group to handle transactions of this financial and industrial group.

The central company is founded by all the parties to an agreement on setting up a financial and industrial group.

The only object of the central company's activities is a support operation of the financial and industrial group.

The central company:

represents the participants in relations connected with the creation and operation of this group;

keeps summary (consolidated) accounting, balance sheet and records related to the financial and industrial group activities as established by the Government of the Republic of Belarus;

prepares a report on the financial and industrial group operation;

performs financial transactions by the interests of the financial and industrial group participants in compliance with the legislation of the Republic of Belarus.

Other activities of the central company related to the financial and industrial group transactions are stipulated by the Statutes of the central company and by the agreement on the creation of the financial and industrial group.

The responsibility of the central company of a financial and industrial group arising as result of fulfilling the obligations connected with participation in the activities of the financial and industrial group is regulated by the agreement to setting up the financial and industrial group.

Article 10. Government Support of Financial and Industrial Group Operation

Government measures to support operation of financial and industrial groups are:

offsetting the debt of a financial and industrial group's participant, whose shares are sold at investment contests, against the amount of investments specified by the investment contest conditions for a financial group buying the shares;

giving a financial and industrial group's participants the right to independently determine the time of the equipment depreciation and the time of the depreciation deductions accumulation, with the obtained funds being used to support of the financial and industrial group activities;

transferring in trust to the central company (headquarters enterprise) of a financial and industrial group those blocks of shares of this financial and industrial group participants which are temporarily assigned to the government;

providing government guarantees in order to attract various investments;

providing investments credits and other financial support for investment projects and programs of a financial and industrial group.

The government support and other additional privileges and guarantees aimed at facilitating operation of financial and industrial groups registered in the territory of the Republic of Belarus and other countries may be provided on the basis of the results of the state assessment of the investment projects and programs of these financial and industrial groups conducted by the authorized republican government body in the order established by the legislation of the Republic of Belarus.

Article 11. Taxation and Non-tax Payments of a Financial and Industrial Group

A financial and industrial group, through the agency of its central company (headquarters enterprise), shall pay taxes and non-tax payments in the order and under the conditions established by the legislation of the Republic of Belarus.

Article 12. Financial and Industrial Group Profit

Financial and industrial group profit is the consolidated profit of its participants.

When a financial and industrial group keeps a summary (consolidated) balance sheet, the profit shows in the balance sheet of the central company (headquarters enterprise).

The procedure and purpose of spending of the made profit or to cover the sustained losses is determined by the governing council, unless otherwise specified by the agreement on founding a financial and industrial group.

Article 13. Responsibility of a Financial and Industrial Group Participants

The participants of a financial and industrial group bears joint responsibility for the obligations of the central company (headquarters enterprise) arising as a result of the participation in the operation of this financial and industrial group.

Article 14. Supervision over and Reporting of a Financial and Industrial Group Activities

Within three months after the end of fiscal year the central company (headquarters enterprise) presents a report on the financial and industrial group operation and the results of audit of the financial and industrial group performance by to all of the participants of this financial and industrial group, and, if it has a share of the government property, to the republican government body, association (institution) subordinate to the Government of the Republic of Belarus which is in charge of the financial and industrial group participants.

A participant of a financial and industrial group have the right to address to the governing council a proposal to make a check of the financial and industrial group performance.

If a financial and industrial group holds a share of the government property, the republican government body, association (institution) subordinate to the Government of the Republic of Belarus which is in charge of the financial and industrial group participants have the right, not more than once a year, to check operation of a financial and industrial group registered in the territory of the Republic of Belarus

If the annual report data or the results of a check of a financial and industrial group operation reveal doubtful information in the presented documents, shows any non-conformity of the financial and industrial group operation to the agreement on its foundation and to the organizational project, non-conformity of the central company operation to its Statutes, violation of the legislation of the Republic of Belarus, the republican government body, association (institution) subordinate to the Government of the Republic of Belarus which is in charge of the financial and industrial group participants must take the following measures:

suggest that the central company (headquarters enterprise) should eliminate the discovered shortcomings in the specified time;

submit a proposal to the Government of the Republic of Belarus to deprive the financial and industrial group registered in the territory of the Republic of Belarus or a participant of the financial and industrial group, fully or partially, of the government support and to exclude it from the State Register of financial and industrial groups and other business groups of the Republic of Belarus.

The government supervision over the operation of a financial and industrial group registered in the territory of the Republic of Belarus is exercised in the order established by the legislation of the Republic of Belarus. The government bodies must check the operation of a financial and industrial group as prescribed by the legislation of the Republic of Belarus, but not less than once for every two years.

Article 15. Termination of a Financial and Industrial Group Operation

A financial and industrial group terminates its operation in the following cases:

on expiry of the validity of the agreement on setting up the financial and industrial group, unless it has been prolonged by its participants;

on cancellation of the agreement on creating the financial and industrial group by decision of all the group's participants using the procedure provided for by this agreement;

on entering into legal force of a court judgement invalidating the agreement on creation of the financial and industrial group in the territory of the Republic of Belarus;

on entering into legal force of a court judgement establishing violation of the legislation of the Republic of Belarus when creating the financial and industrial group or in the process of its operation;

when the Government of the Republic of Belarus makes a decision to stop operation of the financial and industrial group on revealing the circumstances envisaged by the forth part of Article 14 of this Law.

The authorized republican government body, in any of the above cases, nullifies the certificate of state registration of the financial and industrial group and makes a corresponding entry in the State Register of financial and industrial groups and other business groups of the Republic of Belarus.

The property, economic and legal issues arising in the event of termination of a financial and industrial group operation are considered in compliance with the legislation of the Republic of Belarus.

Article 16. Entry of This Law into Force

This Law comes in force from the date of its publication.

Before the legislative acts of the Republic of Belarus are brought in conformity with this Law, they applies only so far as they do not contradict this Law, unless otherwise stipulated by the Constitution of the Republic of Belarus.

Article 17. Bringing Legislative Acts in Conformity with this Law

Financial and industrial groups registered in the Republic of Belarus before this Law comes in force must within six months from the date of entering of this Law into force, bring the agreement on creation of the financial and industrial group and other documents regulating the financial and industrial group operation in conformity with it.

The Council of Ministers of the Republic of Belarus during three months is obliged to:

bring the resolutions of the Government of the Republic of Belarus in conformity with this Law;

ensure review and abolition by the republican government bodies subordinate to the Council of Ministers of the Republic of Belarus of their normative acts contradicting this Law.