Svitlana  Mykhailovska

Svitlana Mykhailovska, Deputy director, advocacy.

Svitlana  <span>Mykhailovska</span>

EBA highlights TOP-10 most important initiatives for business in 2018

30.03.2020 (№ LDaily #8)

Svitlana Mykhailovska, Deputy director, advocacy.

The EBA has identified 10 important initiatives aimed at creating transparent, fair European standards for doing business in 2018. They concern digitization, deregulation and demonopolization, regulation and “defrosting” of specific mechanisms – in 10 areas. However, of course, the list is not exhaustive.

The first concerns the field of currency regulation. Instead of the outdated and absolutely irrelevant Decree on currency regulation, Ukraine received a fundamentally new and progressive Law “On Currency”. It abolishes outdated regulations and restrictions, sanctions for violations of currency legislation, currency control for operations of up to 150 thousand UAH, and deadlines for settlements for operations of foreign economic activity in 180 days. At the same time, ongoing work is important in order develop subordinate legislation, which should detail the mechanisms of currency liberalization. We hope that in 2019 this will be developed and the legislation will become 100 % effective.

The second concerns the mechanism of the single window operation. In July, an appropriate law was passed, which was intended to optimize the interaction of control authorities at the customs. In the fall, the Government approved clear types of state control that should be carried out while checking goods at customs, identifying the list of goods to be subject to state control. The corresponding order of the Ministry of Agrarian Policy concerning periodicity of control is already registered by the Ministry of Justice. Therefore, business expects local
inspectors to clearly follow the regulatory requirements.

The third initiative concerns the food industry. This year the Law “On Information for Consumers of Food Products” was adopted, which aims to facilitate the harmonization of Ukrainian legislation with EU legislation and the fulfillment of Ukraine’s obligations in the area of sanitary and phytosanitary measures within the framework of the Association Agreement. According to the provisions of the Law, the level of protection of health and consumer interests will be increased by providing all necessary information for fully informed choice of food products. In addition, the Act introduces the proper responsibilities of food business operators for not misleading consumers. For example, now it will be necessary to indicate the presence of GMOs, and not their absence and the presence of certain allergens. For dairy products, the definition of the term “natural” is legally fixed . Also, it is mentioned that
any changes in labeling will take effect after two years. This gives time for business to make qualitative changes to their markings and will not create significant disruptions.

In addition, three initiatives concerned digitization, that is, introduction of electronic databases or services. These are the fourth, fifth and sixth initiatives in our list. Access to geological information for the extraction of hydrocarbons was introduced and its circulation liberalized (adopted by the resolution of the Cabinet of Ministers of Ukraine dated November 7, 2018, No. 939). Prior to that, the relevant databases were maintained by the State Geonadaras in paper form. These progressive changes will contribute to the proper maintenance of government databases and the creation of an electronic platform for attracting investors to exploration of hydrocarbons, as is the case in leading countries around the world.

The fifth laudable initiative was the introduction of electronic auctions for the sale of special permits to use subsoil through Prozorro. It also removed the auction mechanism for the provision of new oil and gas fields in use. From 2019, all new plots can only attract an owner through online bidding. In addition, the procedure for the issuance of special permits for the use of subsoil has been improved.

Also, rationalization of the service for checking vehicle registration certificates was begun, the need for which business has been emphasizing for a long time. It was important to create a mechanism to prevent fraud, in particular during freight transport, to introduce more qualitative and open conditions for the work of logistics companies. From now on, every citizen has the opportunity to check whether the certificate on the indicated number and the correspondence of the data in it have been issued.

Positive changes have been taken place in the matter of deregulation and demonopolization. In this aspect, business has identified four more initiatives.

Thus, the seventh initiative is about demonopolization in the phytosanitary services market. This was facilitated by the adoption of the Law “On Amending Certain Legislative Acts of Ukraine Regarding the Settlement of Certain Phytosanitary Procedures”. In fact, the law encouraged the involvement of the private sector in phytosanitary expertise in crop production. First, it will expand the network of phytosanitary laboratories. Secondly, it will reduce the time for the relevant procedures and help avoid duplication of operations. Thirdly, it will improve the quality of procedures and help minimize agrarians’ costs.

Eighth – the alcoholic beverage sphere. The Law on Amendments to the Tax Code of Ukraine abolished licenses for the right to import / export alcohol and the wholesale license for exclusively retail activities. This kind of license was not a tool to combat the illegal circulation of products and cost just 780 UAH a year. At the same time, for the provision of imported products, a license for wholesale trade was required, which costs 500 thousand UAH. Every year about 200 thousand UAH came to the budget from licenses payment, while the administration of the license cost a much bigger amount. The cancellation of the license will facilitate simplification of the legal business for export and import of alcoholic beverages and increase of foreign trade turnover
of the state.

The ninth initiative concerned the tax sphere. This year the rudimentary norm for cash discipline was canceled. Such an initiative was welcomed by business. At the same time, fines associated with its conduct and non-cash withdrawal remained. They are stipulated by an outdated Presidential Decree dating back to 1995. To this end, the Ministry of Finance needs to agree on amendments to the NBU Resolution No. 148 and the draft law on the abolition of the rudimentary Presidential Decree.

And finally – initiatives on plant protection products. Due to the fact that the Law on Environmental Impact Assessment was adopted last year, but the procedures for ecological and expert evaluation of pesticides were not approved, their registration stopped. However, in April 2018, the Cabinet of Ministers passed resolution No. 330, in which the Procedure for conducting examinations was prescribed. In fact, it unblocked the procedure for state registration of plant protection products (PPP). This year, Ukrainian and international importers and producers of PPP were able to complete the state registration process and Ukraine got a new generation of PPP.

The business community welcomes these decisions and hopes that the reforms begun in 2018 will continue. The upcoming year of dual elections should not be any reason to put Ukraine’s reform agenda in standby mode.

Please read: Establishing fair and transparent rules of the game begins with the business itself

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