Since the beginning of the year, the Government’s Interdepartmental Working Group on Deregulation has reviewed more than a thousand business permit documents. However, the deregulation reform is not finished there. Further, the IWG will focus, in particular, on the review of instruments at the request of businesses, will work on the deregulation of individual sectors, and will help implement recommendations on the cancellation or optimization of instruments into concrete solutions. This was announced during a joint online event of the Ministry of Economy and the Center for Economic Strategy “Deregulation of business operations. Intermediate results and plans for the future” said the First Deputy Prime Minister of Ukraine – Minister of Economy of Ukraine Yulia Svyrydenko.
“From the beginning of 2023, the government’s Interdepartmental Working Group on Deregulation began a planned review of regulatory tools for business. And now I have reached the end of the list. More than a thousand permit documents were reviewed. Based on the results of the review, we recommended canceling almost a quarter of them, simplifying or digitalizing more than half of them. According to the calculations of the BRDO, the economic benefit for business from the implementation of the recommendations of the Ministry of Economy, for example, in the sphere of regulation of the Ministry of Economy alone, will amount to UAH 1.4 billion. In the agricultural sector – 8.5 billion UAH. More than UAH 250 million – in construction,” said Yuliya Svyrydenko.
Deputy Minister of Economy Oleksii Soboliev spoke in more detail about the further steps of the deregulation reform. In particular, about transferring the system of state supervision and control to a risk-oriented approach.
“We already have a draft of the law “On the basic principles of state supervision (control)”. This will introduce a risk-based approach. That is, if the entrepreneur did not violate anything, then the inspections will not come to him. Also, the next step is to review and optimize the work of inspections,” said Oleksii Soboliev.
“In 2021, more than 200,000 business inspections were carried out, in 2022 – 11,000, and as of the end of October 2023, about 15,000. Of course, there are more inspections this year than in 2022, for which there are objective reasons – business is working. But, despite this, after the introduction of a moratorium on business inspections, their number decreased tenfold and nothing happened. That is, whether it makes sense to return to classic checks that were in effect until February 24, 2022 is a rhetorical question. There is only one conclusion: the format and methods of inspection checks must be changed,” added Oleksii Kucher, Head of the State Regulatory Service of Ukraine.
Oleksii Dorogan, CEO of BRDO, told more about the approaches to determining the priorities of deregulation.
“It is necessary that on a systematic basis every year, based on analysis and surveys of entrepreneurs, we see a graph of how much money entrepreneurs spend. Based on this, you can set goals. It will be possible to see the problematic points and assess how effective deregulation is, whether the authorities have come up with any new regulatory instruments, etc. This work is part of the transition from a temporary solution to systemic work,” Oleksii Dorogan said.
In his presentation, the Senior Economist of the Center for Economic Strategy, Dmytro Goriunov, talked about the stages of the deregulation reform in Ukraine and voiced the recommendations of the Central Committee of Ukraine experts on further measures:
“We recommend focusing on point regulations that have the greatest impact and those that affect the largest number of entrepreneurs, and in search of those, survey businesses about which regulation is the most disruptive. In addition, it is worth very carefully reviewing the regulation of sectors that directly affect the lives of citizens, in particular, occupational health and safety, as well as sectors that do not simply deserve regulation – monopolies, etc.,” noted Dmytro Goriunov.
According to Serhii Vlasenko, the Deputy Minister of Environmental Protection and Natural Resources of Ukraine, the Ministry is currently working on implementing the recommendations of the Interdepartmental Working Group.
“The deregulation of our Ministry began in December 2022 with fruitful cooperation with the State Regulatory Service. After that, during the work of the IWG on deregulation, we supplemented the list of changes. In particular, we are canceling 61 instruments of state regulation, another 61 have been sent for simplification or digitization. We have already developed a number of NPAs – these are both draft resolutions and draft laws – sent for approval and are already being worked out so that there will be concrete results after the work of the IWG”, said Serhii Vlasenko.
“I am very glad that in the work plans of the IWG there is a general revision of the architecture of supervision and control as such. And our assessment is that the work of the group is super-effective, this gives hope that the state will eventually reform the tax service and customs, and look at the financial market, our economic freedom, our financial freedom. This gives us hope, and let’s move on to reviewing the spheres of supervision and control,” Kyrylo Kryvolap, Executive Director of the Center for Economic Recovery, concluded the discussion.
For reference:
The interdepartmental working group on issues of accelerated revision of instruments of state regulation of economic activity was created by the Government’s Decree on January 13, 2023. The working group, co-chaired by the First Deputy Prime Minister – Minister of Economy of Ukraine Yulia Svyrydenko, included, in particular, representatives of the ministries of economy, digital transformation, protection of the environment and natural resources, justice, finance, as well as the State Regulatory service. Experts from BRDO, the Center for Economic Recovery, the Center for Economic Strategy (with the support of the Ministry of Foreign Affairs of the Netherlands), EasyBusiness, the USAID Program “Competitive Economy of Ukraine”, the USAID/UKAid project “Transparency and Accountability in Public Administration and Services/ TAPAS” and the European Bank for Reconstruction and Development are involved in the work of the IWG.
BRDO’s joined the work of the IWG within the EU4busines: SME Policies and Institutions Support (SMEPIS) project, implemented by Ecorys in a consortium with GIZ, BRDO and Civitta.