The project is designed to strengthen Ukraine's financial sector by providing crucial support to government bodies in drafting an Asset Resolution Companies (ARCs) law, revising existing legislation and regulations as needed, and improving the management and resolution of NPLs. It will further support private sector entities, providing them with the necessary tools and knowledge to deal effectively with distressed assets. Central to the reforms facilitated by this project is the establishment of mechanisms for the resolution of distressed assets in line with international standards recognized by global investors, including the International Finance Corporation (IFC), in order to reassure investors about the viability of investment opportunities in Ukraine. Asset Resolution Companies (ARCs), which have the characteristics of Special-Purpose Vehicles (SPVs) collect investor funds and invest them in NPLs which they hold on their balance sheet. They are bankruptcy-remote, i.e., ring-fenced from other entities involved in distressed asset resolution, and hold NPLs as their sole asset. The actual NPL resolution operations are carried out by separate specialized Credit Service Companies (CSCs). CSCs are regulated financial entities mandated by ARCs to perform all necessary activities to manage the ARC’s NPLs and to recover value from these distressed assets. CSCs are responsible for the efficient and compliant post-disbursement management of the loans acquired by the ARC, in line with regulatory requirements and financial best practice.