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BRDO experts have prepared a Concept for reforming the self-regulation system in Ukraine

Ukrainian legislation allows to create self-regulatory organizations (SROs) for 15 types of activities. In fact, only 20 SROs for 5 of 15 types have been established. Dozens of associations and unions (in different markets) that seek to become self-regulatory organizations can not obtain this official status, as it had not been so established in legislation.    

Self-regulation is not a new institution for Ukraine. However, in our country, we have pseudo-self-regulation, since there is no definitions on what kind of phenomenon it is, there are no established and generally accepted principles of self-regulation, no single basic procedures. There is no holistic and systematic approach to the introduction and implementation of self-regulation. All this leads to occasional regulation, the diversity of self-regulation demonstrations and  creates obstacles to its spread.

39 legislative acts that formed the relevant regulatory environment not allow to identify any key features of self-regulatory activities, nor self-regulatory goals, nor the unique aspects of a self-regulatory organization status.

In most types of activities, self-regulation is formally impossible due to the lack of special laws (for example, advertising, security, banking, etc.). In some cases, the creation of a SRO is allowed, but there is no appropriated procedure (for example, tourism). As a result, today:

  • business and profession representatives can not unite in self-regulatory organizations and be engaged in legal regulation of the market;
  • in most cases, business and profession representatives can not control the quality of their market or professional activities, because they are excluded from their regulation;
  • public authorities spend significant resources to perform functions of regulating economic and professional activities that can be delegated to self-regulatory organizations.

Meanwhile, in world practice, self-regulation as a form of management and self-control of business associations significantly reduces administrative pressure on businesses and promotes higher standards of business activity, and hence better protection of consumer interests.

BRDO experts came to the conclusion that changes in the self-regulation area should start with the state policy-making instead of laws. Following discussions and consultations with all stakeholders, we have prepared a draft Concept for reforming the self-regulation system in Ukraine. Its approval will declare and give rise to a single state policy of self-regulation, as well as form the basis for further regulatory enforcement of such a policy. We call on the ministers to support the draft Concept for self-regulation at the forthcoming Government meeting.