Overview of the main changes in legislation in the real estate, construction and energy sectors in Belarus

Publication / 1 August 2022 / Kiryl Apanasevich, Alesia Khadasevich, Olga Solovyanchik

We are pleased to present to you our overview of the main changes in legislation in the real estate, construction and energy sectors in Belarus in 2021 and the first half of 2022. Hereinafter any legal acts and state bodies mentioned are legal acts and state bodies of the Republic of Belarus unless specified otherwise.

Extraordinary attestation, and change in the requirements for obtaining certificates of compliance in construction and their termination

In July 2021, an extraordinary attestation was initiated for a number of foreign organisations, some of which subsequently lost their certificates of compliance.

Despite the fact that the Ministry of Architecture and Construction previously had the right to initiate an extraordinary attestation for a holder of a certificate of compliance at any time during its period of validity as well, this did not happen so often in practice, and for many organisations it turned out to be an unpleasant surprise. Therefore, we would like to remind you of some important points:

the certificate holder is notified of the extraordinary certification no later than five working days before it is carried out (in practice, such a notification can be received precisely five working days in advance)
the certificate holder is obliged to provide information confirming compliance with the qualification requirements prior to the extraordinary attestation, i.e., the certificate holder may only have five working days to collect and prepare all the necessary documents
failure to provide this information is regarded as a refusal to undergo an extraordinary attestation and entails termination of the certificate of compliance

Moreover, since, generally, every year from December 1 to December 31, all holders of certificates of compliance must provide the authorised body (RUE Belstroycenter) with information on confirmation of compliance with qualification requirements (except in cases of having obtained the certificate of compliance one month prior to the date of such confirmation), we recommend adding appropriate reminders to calendars for this year.

In the second half of 2021 and at the beginning of 2022, a number of amendments to the legislation on attestation in construction also came into force.

On 3 September 2021, in particular:

the lists of grounds for extraordinary attestation were clarified
the lists of grounds for termination of certificates of compliance were clarified
starting from this date owners of construction projects were again required to receive certificates of compliance

For your information: according to the existing legislation, in order to “perform functions of the owner of the project within the implementation of activities for the erection, reconstruction, restoration, improvement of construction objects classified as 1-4 complexity classes” obtaining a certificate of compliance is required. Having such certificate was not required in the period from 28 February 2018 to 2 September 2021.

Since 21 March 2022:

Amendments have been made to the qualification requirements for legal entities and individual entrepreneurs for obtaining certificates of compliance of the first – fourth category:

– there is no need for an applicant to have a certified quality management system; labour safety management system; certificates of compliance of works in construction; measuring and control tools necessary for quality control of the declared type of activity in the field of construction

– the requirements regarding education and work experience of the head of an organisation for obtaining a certificate of compliance of the fourth category for engineering surveys have been clarified

– the requirements regarding an applicant’s experience in performing works (rendering services) for the declared type of activity have been clarified

– the requirements regarding composition and positions of specialists working for an applicant for obtaining a certificate of compliance have been clarified.

Changes to joint house ownership regulation

On 8 July 2021, a new version of the law No. 135-Z “On Joint House Ownership”, dated 8 January 1998, came into force.

Among the most significant changes to the regulation of relations regarding joint house ownership, the following are worth noting:

1) the membership of joint house ownership has been extended

2) land plots and land use rights are excluded from the common property, as well as from the list of objects to which joint house ownership relations apply

3) the procedure for managing common property has been changed

4) the procedure for incurring expenses for common property maintenance has been regulated

Changes to the regulation of The Great Stone China-Belarus Industrial Park operation

On 17 September 2021, a number of legislative amendments came into force aimed at improving the investment climate at the Great Stone China-Belarus Industrial Park and simplifying the applicable procedures. Among them the following are worth noting.

In the field of land relations:

the administration of the industrial park has the right to make decisions on the division, merger or change of the boundaries of land plots in the park
the procedure for the seizure of land plots for state needs will be applied in the event of seizure of land plots outside the boundaries of the industrial park for building the transport and engineering infrastructure facilities necessary for operation of the industrial park
the Joint Industrial Park Development Company (Joint Company) is entitled to act as a mortgagee of land plots it has sold until the buyer pays in full
it is possible to lease (or sublease) land plots to residents of (or investors in) the industrial park, while preserving the ownership rights of the Joint Company to the amenities, engineering and transport infrastructure facilities located on such land plots

In the field of construction:

the administration of the industrial park is empowered:

– to act as an organiser of public discussions of construction projects

– to ensure the preparation and issuance of construction permits, to allow design and survey works to be carried out

– to approve the prepared design documentation and deviation from it during construction

– to approve the extension of construction terms

– to determine and change the purpose of real estate objects and whether they can be used for this purpose at all

a separate resolution of the Council of Ministers regulates the procedure for preparing and issuing construction permits of the industrial park facilities
there is no need to prepare estimate documentation as part of the design documentation for a construction object
the period for the state examination of design documentation has been established – no more than 15 working days from the date of the document submission

New rules for parallel design and construction

On 4 September 2021, special legislation came into force in Belarus establishing the possibility of parallel design and construction with regard to a number of objects (Resolution of the Council of Ministers No. 486 “On Parallel Design and Construction of Objects and Implementation of Administrative Procedures”, dated 27 August 2021).

Thus, parallel design and construction of objects is allowed in cases of construction activities for the erection, reconstruction or restoration:

of social infrastructure facilities included in the State Investment Program, or regional investment programmes
of linear-type objects (i.e., roads, railways, underground, power lines, communication lines, pipelines, canals)
of engineering infrastructure facilities in free economic zones
of construction objects necessary for the functioning of reclamation and water management systems
of technological objects of industry (i.e., industrial facilities, including facilities of the fuel and energy complex, where the technological process of processing raw materials and other kinds of material, as well as the transportation and distribution of finished products is carried out)
of objects unique at the national level (i.e., theatres, museums, art and exhibition complexes, national sports facilities, hotels of the highest category, as well as objects included in the State List of Historical and Cultural Values of the Republic of Belarus).

For information: previously, parallel design and construction was possible only in rare exceptional cases established by the President; as a rule, when implementing specific investment projects (for example, the construction of the Great Stone China-Belarus Industrial Park) and (or) in case of conclusion of an investment agreement with the Republic of Belarus.

Administrative procedures for state registration of real estate: new regulation

On 27 March 2022, the Resolution of the Council of Ministers No. 156, dated 17 February 2012 (Resolution No. 156), which determined the rules for the implementation of administrative procedures at the request of legal entities and individual entrepreneurs, became invalid. The Resolution of the Council of Ministers No. 548, dated 24 September 2021, which was adopted to replace the terminated resolution, established a new unified list of administrative procedures carried out with respect to business entities (Unified List).

It is worth noting that the now-terminated Resolution No. 156 regulated in detail specific procedures for state registration depending on the type of real estate, and actions or transactions made in relation to it. At the same time only generalised procedures are set out in the Unified List, while the Resolution of the State Committee on Property No.11 “On Approval of the Regulations of Administrative Procedures”, dated 25 March 2022, adopted as a follow-up establishes an unsystematised list of all the documents that can be provided to a registrar. In this regard, prior to applying to a registrar, additional preparation is currently necessary to analyse the existing regulation and determine the package of documents required to carry out specific registration actions.

Personal data will not be displayed in real estate extracts

Due to the entry into force of the law “On Personal Data Protection” on 15 November 2021, the extracts from the registration book do not indicate personal data in respect to individuals and individual entrepreneurs who are the rightsholders of real estate, with the exception of their surname, first name and patronymic.

Read more about the new regulation in the field of personal data protection here.

Changes in legislation in the electrical power industry

On 21 October 2021 a number of new regulatory legal acts came into force, in particular the Presidential Edict No. 153 “On the Development of the Electric Power Industry”, dated 16 April 2021; and the Resolution of the Council of Ministers No. 381 “On Measures of Implementation of the Edict of the President of the Republic of Belarus dated 16 April 2021 No. 153”, dated 2 July 2021, which provide for two main changes in the electrical power industry.

Firstly, the creation of a single operational dispatching office (ODO) in the electrical power industry to ensure forecasting of volumes and balance of production and consumption of electrical energy.

In this regard, legal entities and individual entrepreneurs who are owners of block stations connected directly or indirectly to energy supply organisations’ electrical networks until 1 December 2021 had to ensure the conclusion of contracts for the provision of ODM services in the electrical power industry with a provider of ODO services (RUE-oblenergo). In case of refusal to conclude a contract, the block station of such an owner was disconnected from the electrical network of the energy supply organisation. The contract for the provision of ODO services is public and is concluded for an indefinite period.

The owners of the block stations – consumers of ODO services also have to:

provide RUE-oblenergo with departmental reports on the volumes of production, transmission, distribution and sale of electrical energy
fulfil the summary daily hourly schedules for the production of electrical energy by the block station as provided by RUE-oblenergo
inform RUE-oblenergo about emergency shutdowns of block stations, etc.

Secondly, owners of block stations connected directly to the electrical networks of energy supply organisations are entitled to transmit (distribute) electrical energy to their separate units and other structural units through the networks of the State Production Association Belenergo, both within a single region and a number of different regions, on the basis of a contract for the provision of services for transmission and distribution of electric energy concluded with RUE-oblenergo. Such an agreement is public and is concluded for a term no shorter than a settling period (a month). Based on such an agreement, the costs of energy supply organisations involved in the transmission/distribution of such energy are reimbursed.

This norm is mainly aimed at block stations that generate electric energy from renewable energy sources to meet the needs of the owners of such block stations and their separate units and structural units. However, please note that sale of electric energy produced at such block stations to any end users is still prohibited.

The norm also applies to housing and communal services organisations that are owners of block stations connected directly to the electrical networks of energy supply organisations.

Changes in legislation in the field of renewable energy use

On 20 April 2021, the Republican Interdepartmental Commission for the Establishment, Distribution, Release and Withdrawal of Quotas for Creation of Installations for the Use of Renewable Energy Sources decided not to establish new quotas for the creation of installations for the use of renewable energy sources for 2021–2023. Subsequently, from 6 November 2021 the Council of Ministers suspended until 1 January 2024 application of the relevant provisions of the Regulation on the Procedure for Establishment, Distribution, Release and Withdrawal of Quotas for Creation of Installations for the Use of Renewable Energy Sources, approved by the Resolution of the Council of Ministers No. 662, dated 6 August 2015.

At the same time, we remind the holders of previously established quotas that such quotas may be withdrawn if, on or after July 1 of the year for which the quota is allocated, the legal entity, individual entrepreneur does not have design documentation for the creation of installations that have passed state examination in the prescribed manner and title documents for the land plot for the purpose of creating installations.

A new law No. 173-Z “On the Regulation of Relations in the Field of Renewable Energy Sources” came into force on 1 June 2022. In our opinion, the law continues the tendency started last year to reduce the pace of further development of the use of renewable energy sources.

Read more about the provisions of the law here.

Development of the market of electric vehicles and electric charging stations

Based on the decision of the Council of the Eurasian Economic Commission adopted in 2020, in the period up to 31 December 2021 a rate of import customs duty at 0% of the customs value was applied to certain types of motor vehicles with electric motors. From 1 January 2022 it was again necessary to pay import customs duties of 15% when importing electric vehicles into the Republic of Belarus.

However, in March 2022 the Council of the Eurasian Economic Commission adopted a new decision on granting tariff benefits in the form of exemption from customs duties for electric vehicles imported into the countries of the Eurasian Economic Union for citizens permanently residing in the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan or the Kyrgyz Republic. At the same time, there is a ban on the transfer of ownership, use and disposal of electric vehicles to persons who have citizenship of and/or permanent residence in the Russian Federation.

Other measures stimulating the use of electric vehicles provided for by the Presidential Edict No. 92 “On Stimulating the Use of Electric Vehicles”, dated 12 March 2020, continue to be applied, for example:

individuals are exempt from VAT when importing electric vehicles for personal use to the Republic of Belarus
the possibility for individuals to return VAT to a total of up to 500 basic units paid when purchasing an electric car in the Republic of Belarus
exemption from charging payment for the use of communally owned car parks until 1 January 2026
the right to apply an investment deduction granted to legal entities engaged in the acquisition (creation) and operation of electric vehicles and charging stations
exemption of charging stations imported by legal entities or individual entrepreneurs to the territory of the Republic of Belarus from import VAT (provided that charging stations are used during their entire service life exclusively on the territory of the Republic of Belarus for the purpose of charging electric vehicles)
simplified procedure of land plots allocation and issuance of permits for construction of certain charging infrastructure facilities, etc.

In April 2021, the Council of Ministers also approved the Comprehensive Program for the Development of Electric Transport for 2021-2025. The program provides in particular for the possibility of developing and applying additional economic and organisational benefits and preferences to support electric transport consumers, the development of charging infrastructure and the production of electric vehicles, for example:

improvement of credit conditions for the purchase of electric vehicles from authorised dealers
leasing of electric vehicles manufactured at enterprises of the Republic of Belarus
establishment of a stimulating tariff for electric energy used by charging stations at night, etc.

Restrictive measures have been introduced in Belarus against businesses from unfriendly countries

A list of countries committing unfriendly actions against Belarusian entities was introduced in Belarus since 8 April 2022. It includes: all the EU states, the USA, the UK, Switzerland, Canada etc. Ukraine is not included in this list. The criteria for determining a foreign entity against whom restrictive measures may be imposed are, first of all, “connectedness” with unfriendly foreign states from the list, for example: a) citizenship of these states; b) place of registration; c) place of business; d) place of primary profit; е) being under the control of these foreign entities/persons.

The government has taken various measures against entities from such countries. Thus, by the Presidential Edict No. 93 “On Additional Measures to Ensure Stable Functioning of the Economy”, dated 14 March 2022, a measure was adopted according to which the Council of Ministers has the right to impose a fee and penalty for early termination of a lease agreement on the initiative of entities from these foreign states. Also, the Council of Ministers has the right to make decisions on setting the size of the basic rental value without taking into account changes in the consumer price index for the last year in relation to the previous one.

For information: by the Resolution of the Council of Ministers No. 180, dated 28 March 2022, the total basic rental value was determined, equaling 16,9 Belarusian rubles, and has remained unchanged so far.