Why are financial statements still not publicly available?
On February 4 at 11:00, open data experts will hold a round table to discuss this issue.
You can join the meeting by clicking the following Zoom link: https://us02web.zoom.us/j/83869204074
The meeting is organized by the Better Regulation Delivery Office (BRDO) together with OpenUp Ukraine, youcontrol.com.ua – YouControl, and the Public Council (GromRada) at the Ministry of Digital Transformation.
Corporate financial statements are one of the most popular data sets among businesses, government agencies, and the public. Financial reporting analysis helps to create a transparent business environment, as well as prevent financial and corruption risks.
We invite you to join the round table to understand what prevents making financial statements public, hear the experts and discuss current challenges that require the synchronization of efforts and collaboration.
The following issues will be discussed at the meeting:
The round table will be attended by:
as well as representatives of the State Statistics Service of Ukraine, the State Tax Service of Ukraine, and the Ministry of Justice of Ukraine.
Moderator — Nadiya Babynska, OpenUp coordinator.
Please keep in mind that you can participate in a survey on the use of financial statements of Ukrainian enterprises: https://forms.gle/LSnkJVeoMBgbYKfA9. If you use this type of open data, please fill out the form. This information will help our experts in analyzing the quality and completeness of published data.
The event is organized as part of the RAPID project implemented with the support of the Press, Education, and Culture Department of the US Embassy in Ukraine, as well as in partnership with the American Councils and the Open World Ukraine program. The views of the participants do not necessarily reflect the official position of the U.S. Government.
We are refuting fake information!
The media is actively spreading information that Ukrainians are obliged to register SIM cards using their passports starting from 2022.
There is a real risk of introducing a “passport system” for SIM cards, and there are such parliamentary initiatives. But the adopted laws do not contain such provisions.
Therefore, there is no aim to introduce the “passport system” for SIM cards and registration of subscribers in the new year.
The adopted Law on the National Commission does not contain the risks that BRDO experts have previously emphasized.
Read how to protect subscribers from fraud without using the mandatory certification of SIM cards in the comment of the IT and Telecom Head to the Suspilne Movlennya.
In the heating season 2021-2022, Ukrainians may face coal shortages and power outages.
According to the Ukrenergo transmission system operator, coal reserves available in warehouses are not enough to fully supply TPPs and CHPPs. Accordingly, the Government is considering switching energy generating companies to more expensive gas.
Anton Zorkin, a BRDO expert, commented on the situation to the Ukrainian Business Resource: “The average monthly consumption of TPPs and CHPPs in winter is from 2 to 2.2 million tons, depending on weather conditions. Therefore, under a realistic scenario with an average monthly import of 400 thousand tons and typical winter temperatures, we can expect a coal deficit of 1 million tons by the end of March. However, the use of gas along with the lack of coal will lead to higher electricity prices.”.
Learn more about whether the Government will resort to power outages in this situation in his comment to the web portal. Our proposals for overcoming the crisis are available in the presentation (UA).
In Ukraine, water use is extremely inefficient.
One-third of the water from underground sources is lost during the extraction — that’s how outdated the production process in Ukraine is.
More than a third of water and sewage networks have deteriorated and need to be replaced immediately. This affects the quality of drinking water supplied to the population, but only up to 2% of networks (out of the infrastructure that should be replaced) are replaced annually.
Moreover, the volume of water consumption by users is decreasing — compared to 2010, water consumption fell by 39% in 2019. Drinking water supply in the regions of Ukraine is also uneven: only a third of the rural population is provided with centralized water supply services. Other rural consumers are sometimes forced to use water from wells, but it does not meet drinking water quality standards.
The financial status of water supply and sewerage companies is also unsatisfactory in recent years: in 2019, the net loss of relevant enterprises amounted to UAH 2.13 billion.
All these problems accumulate because Ukraine has the lowest water availability in Europe, and these resources rapidly become polluted. It is clear that the domestic water supply and sewerage sector needs urgent changes.
BRDO experts analyzed the sector economic performance and the current regulation and concluded that the existing public policy in the sector was ineffective and did not meet Ukraine’s obligations under the Association Agreement with the EU, strategic planning was imperfect, and tariff policy discouraged investment in the sector and prevented further development.
To outline solutions to the problems in the sector and create conditions for its development, our experts prepared a Green Paper “Water supply and sewerage market regulation”.
The Green Paper contains:
Our study will be useful for executive bodies to formulate public regulatory policies in the sector comprehensively, improve the technical condition of water supply and sewerage systems, as well as improve the drinking water supply quality.
The Green Paper is available here
The Law on the National Commission in the spheres of electronic communications, radio frequency spectrum, and provision of postal services adopted last Friday does not pose any risk of introducing conflicting rules that BRDO experts have previously warned about.
Before the adoption of the law, there were risks that the National Commission might have powers to introduce mandatory verification of the legality of purchased mobile phones.
If that had happened, each owner of a new mobile phone would be forced to change the status (IMEI) of purchased devices from “temporarily authorized” into “authorized for use in the electronic communications network” in case of purchasing devices abroad and importing them into Ukraine as personal items. For this purpose, they would need to contact the competent authorities and confirm the purchase of a mobile phone or the border crossing. This would in no way protect users from frauds, but would only create inconveniences and bureaucratic delays. We analyzed this issue in detail in September.
Additionally, there was a risk of introducing subscriber identification, in other words, the “certification” of SIM cards. They tried to introduce such an innovation as protection of subscribers from stealing their phone numbers and other cyberfraud types.
“All tools to protect subscribers from spam or illegal charging of fees do not work properly. No one really protects subscribers. Therefore, neither the state, committees nor deputies won’t do that. As for the subscribers’ protection, operator procedures (including the SIM card replacement) should be improved. Also, we should deal with another problem — fraudsters committing criminal acts,” the IT & Telecom Sector Head Ihor Samokhodsky commented the situation to the Suspilne Movlennya: https://suspilne.media/189556-pasportizacia-sim-kart-ci-potribno-vprovadzuvati-v-ukraini-ta-aki-riziki/
Is it possible to assess the situation with “registration” raiding in Ukraine and the effectiveness of public authorities in combating it?
This phenomenon that implies gaining control over business assets by manipulating information from state registers is a long-standing one in Ukraine. However, public authorities still do not have reliable data on the raiding status and dynamics. No summary statistics on “registration” raiding are kept, and data that may directly or indirectly indicate raider attacks are inconsistent and fragmented across different government agencies.
As a result, the public has no opportunity to assess and measure the effectiveness of “anti-raiding” initiatives. In turn, this increases the dissatisfaction of citizens and businesses and discourages potential investors.
Moreover, public authorities that have to combat raiding do not have the tools to assess the situation and, consequently, cannot identify effective further steps to combat this phenomenon and ensure the inviolability of private property rights.
Given these problems, Ukraine ranked 106th in the recent rating of protection of property rights among 129 countries.
To help solve the outlined problems, experts from the Better Regulation Delivery Office (BRDO) have developed RaidBarometer — an index assessing the dynamics of raider attacks.
“RaidBarometer 2020 is a result of the first comprehensive attempt to assess “registration” raiding in Ukraine. We analyzed the dynamics of raider attacks and assessed the effectiveness of public authorities in counteracting this phenomenon. RaidBarometer should improve the interaction and accountability of institutions in the areas of law, justice, and law enforcement. Additionally, the Index will help public authorities to formulate and improve state policies in the area of guaranteeing property rights,” Oleksii Dorogan, BRDO CEO, said.
The Index is based on a comprehensive calculation methodology and consists of the assessment of the registration raiding dynamics, the assessment of the effectiveness of public authorities in combating raiding, and public perception of raiding.
“We use annual calculation indicators. According to the results of calculations, we have the following categories: 0-1 — “catastrophic situation”; 1.1-5 — “unsatisfactory”; 5.1-8 — “neutral, there are some problems”; more than 8.1 — “optimal, there is a healthy business environment,” Julia Kornieieva, a chief economist at BRDO, said.
According to experts, RaidBarometer 2020 is “5.8” — this indicates the average situation with registration raiding in the country: there are problems that need to be addressed by the relevant public authorities. In particular, public policies in the area of state registration need to be further improved to create an environment for preventing raider attacks.
“At the same time, the effectiveness of certain public authorities, namely the Board of the Ministry of Justice and courts, in combating raiding has increased,” Maksym Maksymov, a lawyer at BRDO, said. “Some positive results in combating raiding are also confirmed by the society’s opinion: according to the survey, the situation with “registration” raiding in Ukraine has improved by 35% during the year.”
RaidBarometer 2020 will form the basis for monitoring “registration” raiding and the effectiveness of public authorities in counteracting it in the coming years. This will increase public awareness of this issue and the ability of public authorities to formulate and improve public policies in the area of guaranteeing property rights.
“Last month, we presented our other research in the area of “registration” raiding — the White Paper “Roadmap for preventing land raiding”, in which we proposed a list of measures to be taken to reduce registration raiding within the two-year planning horizon. They include: providing systematization and standardization of business registration processes, improving the efficiency of administrative appeals, creating risk subsystems of state registers, eliminating gaps in legislation. In the future, we plan to advocate for our proposed initiatives and participate in projects for their implementation,” Tymur Mykhailov, a lawyer at BRDO, said about the plans of the Better Regulation Delivery Office in this area.
The analytical report “Assessment of registration raiding in Ukraine”, the presentation, and the White Paper are available on the project page.
Today, Ukrainian Parliament adopted a law on the National Commission for state regulation in the spheres of electronic communications, radio frequency spectrum, and provision of postal services (#6055).
This document is aimed to ensure the independence and administrative capacity of the sectoral regulator. It established the legal status of the national commission and special aspects of the organization of its activities as a regulator, its functions and powers, a procedure for drafting regulatory acts, as well as special aspects of control in the relevant markets.
The adoption of this law is a vital element to implement the reforms under the Law of Ukraine “On Electronic Communications”, fulfill obligations under the Association Agreement in this sector, and integrate into the EU Digital Single Market.
The law takes into account the key comments of BRDO experts we wrote about earlier. In particular, the law was brought into line with the Constitution of Ukraine and requirements of the European Electronic Communications Code on ensuring the regulator’s independence in appointing and dismissing its members.
In turn, the current members of the NCCIR keep working until the end of the six-year period.
We are sincerely grateful for the support of the European integration approach to the sectoral regulator’s independence, in particular, the MP Kira Rudyk, as well the chairman of the Digital Transformation Committee Mykhailo Kryachko and MPs.
Yesterday, the Verkhovna Rada of Ukraine adopted draft law #5877 on strengthening the responsibility in the urban planning sector in the first reading.
The law drafted with the participation of BRDO experts provides for the following changes:
We are thankful to everyone involved in drafting the law and look forward to its adoption as a whole.
As a reminder, draft law 5655 drafted with the participation of BRDO experts and adopted in the first reading provided a new legislative framework for effective public administration in the urban planning sector. Generally, the urban planning reform is based on three draft laws: 5655 (urban planning reforms), 5656 (on amendments to the Budget Code), and 5877 (on strengthening the responsibility).
Learn more about changes in the urban planning sector after the reform from our infographic.
Yanina Dobrovolska, a BRDO expert, participated in the presentation of the Retail Guidebook — an online guide platform on main sales channels for small and medium-sized businesses: https://retail-guidebook.ubta.com.ua/
The portal, developed by the Ukrainian Business and Trade Association with the technical support of the BRDO team, is designed for agricultural producers, who are officially registered and aim to expand their sales channels, from all regions of Ukraine. Here, entrepreneurs will find a list of product certification agencies, a list of major agricultural market players, as well as structured and systematic information on the requirements of main sales channels, including retail chains, traders, distributors, marketplaces.
“Our mission is to create a prosperous European state with good governance and efficient economy. Digital tools and the availability of information are what Ukrainian entrepreneurs need most to develop their businesses. That’s why we participated in the development of the Retail Guidebook.
“This platform is convenient because entrepreneurs can register a personal account. The goods that an entrepreneur produces can be added there, and the system automatically will add all the requirements for these goods in those sales channels and those regions that are chosen by the entrepreneur. In such a way, entrepreneurs have access to an internal filter for their products,” Yanina said.
The platform was created by the Ukrainian Business and Trade Association in partnership with the Better Regulation Delivery Office (BRDO) and with the support of the USAID Agricultural and Rural Development Support Program.
Cooperation is aimed at making the market of construction materials efficient, transparent and offering the state and market participants effective interaction tools. The Better Regulation Delivery Office (BRDO) signed a Memorandum of Cooperation with the All-Ukrainian Union of Manufacturers of Construction Materials.
On January 1, 2023, the law on the provision of construction products on the market, designed to implement the provisions of Regulation (EU) No 305/2011 laying down harmonized conditions for the marketing of construction products, will enter into force in Ukraine.
“Communication between experts and industry specialists is important to make this process more effective. We are expanding our cooperation with stakeholders to coordinate efforts to prevent corruption, increase transparency and efficiency in the construction materials sector,” Oleksii Dorogan, BRDO CEO, said.
The main tasks set by the BRDO and the Union of Manufacturers of Construction Materials include joint participation in the development of government policy on the provision of construction materials on the market. It is also crucial to develop cooperation with international organizations and national manufacturers, exchange information, initiate and implement projects of common interest.
“The uniqueness of the All-Ukrainian Union of Manufacturers of Construction Materials is that it is the largest cross-segment organization uniting manufacturers of construction products regardless of their profile. We are convinced that our cooperation will contribute to further digitalization of the sector, fighting against counterfeit construction products, and manufacturers of construction materials will be able to join the process of implementing BIM-technologies in Ukraine,” Oleksii Dorogan added.
Recently, BRDO experts have published a study “Provision of construction products on the market” launched a public consultation on the effective implementation of Regulation 305 and the Law “On the Provision of Construction Products on the Market”.
Join the discussion at: https://bit.ly/Survey_marketing_construction
News for the craft beer market: on November 30, the Verkhovna Rada of Ukraine adopted draft law #5600 on amendments to the Tax Code.
The document provides for the following changes:
We are glad that the proposal to introduce perpetual licenses for beer production raised by experts of the Regulatory Policy sector of the Better Regulation Delivery Office (BRDO) has finally been implemented. This aspect will change the lives of beer producers and small brewery owners for the better.
Unfortunately, a significant increase in excise tax for all beer producers (also stipulated by the new law) will negatively affect these small businesses. The increase is very significant: from 2.78 hryvnias per liter to 59.82 hryvnias per liter of 100% alcohol. On the contrary, the BRDO proposed to reduce the excise tax on beer production by 50% of the national excise tax rate for small producers.
In 2020, the Regulatory Policy sector studied the Ukrainian fermented beverages market, as well as held numerous consultations with brewers. Based on the results of the analysis, we prepared a Green Paper.
The proposals of BRDO experts to improve the business environment in the craft beer market served as a basis of draft Laws #5118 and #5119. In addition to the above provisions, we also consider it necessary to: increase the maximum production to 20 million liters per year for small brewers; revoke wholesale licenses for small beer producers; differentiate fines depending on the annual production volume.
We are waiting for the second reading of the draft laws and hope for their adoption as soon as possible.
At the end of October, the Verkhovna Rada adopted a draft law #6055 “On the National Commission for State Regulation in the Spheres of Electronic Communications, Radio Frequency Spectrum and Provision of Postal Services of Ukraine” in the first reading. The regulatory body mentioned in the document should become the legal successor of the National Commission for State Regulation of Communications and Informatization (NCCIR). Gleb Shchegol, IT and Telecom sector expert at the Better Regulation Delivery Office (BRDO), said why the regulation in this sector should be changed, how that procedure affected Ukraine’s integration into the EU and the European digital market, and what we could do to avoid losing this chance in a conversation with Mind.
Joining the EU digital single market is one of Ukraine’s strategic goals after signing the Association Agreement with the European Union. This market covers several areas of activity, including electronic communications. The agreement provides a potential opportunity for our state to obtain a so-called internal market regime for this sphere. In other words, Ukraine has a chance to join the EU digital single market under the conditions that apply to the member states even before joining the EU.
Ukraine is currently implementing the latest legislation in the sphere of electronic communications at the same time as the EU countries. For example, on December 16, 2020, the Law “On Electronic Communications” drafted with the participation of BRDO experts was adopted. The law will enter into force on January 1, 2022. However, the full implementation of the Directive (EU) 2018/1972 of 11 December 2018 establishing the European Electronic Communications Code requires the adoption of a law on the national regulator in the sphere of electronic communications.
With regard to national regulatory authorities in the sphere of electronic communications, EU legislation requires EU member states first and foremost to ensure and guarantee their independence (political and financial one, independence from any individual or legal entity providing electronic communications services, and independence from any other authority when it comes to the tasks assigned to regulators under national legislation).
Under the Law “On Telecommunications” that will be no longer in effect on January 1, 2022, the NCCIR is the state regulatory authority in the sphere of telecommunications in Ukraine. This regulator is not so “independent”. It is under the authority of the President and reports to the Verkhovna Rada. It is financed from the state budget, and it has to coordinate its own decisions with other state bodies and register them with the Ministry of Justice.
The chairman and members of the regulator are appointed and dismissed by the president, and the candidates are selected without an open competition, ie this process is not transparent. Such a procedure for appointing the chairman and members does not comply with European rules. Moreover, the Constitutional Court found it inconsistent with the Basic Law of Ukraine.
It is possible to eliminate these discrepancies with EU legislation by adopting the law on the national regulator in the sphere of electronic communications.
However, draft law #6055 “On the National Commission…” registered in the Verkhovna Rada in September this year contains some provisions that undermine the independence of the sectoral regulator, do not comply with the Constitution of Ukraine and the obligations under the Association Agreement with the EU, threaten the implementation of the reform provided for by the Law “On Electronic Communications” and Ukraine’s chances to integrate into the EU digital market.
In particular, these are the provisions of the draft law regarding:
Experts of the Better Regulation Delivery Office (BRDO) submitted their proposals on the necessary amendments to draft law #6055 to the relevant Verkhovna Rada committees and the Government, and also tried to draw the President’s attention to them. The adoption of the law without taking them into account will negatively affect not only Ukraine’s European integration plans.
Due to the imperfect statutory provisions in the sphere of electronic communications and their inadequate implementation in Ukraine, the state regulation of the entire sector is still ineffective. After all, consumers suffer the most.
For example, today:
Full implementation of the sectoral reform of the electronic communications market will allow Ukraine to integrate into the EU digital single market, facilitate the development of the entire sector and improve the protection of the rights of consumers of electronic services. For this purpose, the state should finally begin to actively promote the sector transformation through a few specific steps: it is necessary to immediately develop and approve bylaws stipulated by the Law “On Electronic Communications”, adopt the law on the regulatory authority, establish the regulatory authority, and select its members under the European Electronic Communications Code and the Constitution of Ukraine.
Source:Mind.ua
Digitalization of the construction sector continues! Urban planning conditions and restrictions can now be obtained online.
The new service is available in the Unified State Electronic System for the Construction Sector and on the Diia portal.
Why is this important?
Obtaining urban planning conditions and restrictions is the first stage of official registration of large construction projects when the lines of future buildings are determined.
Urban planning conditions and restrictions are a key document that allows obtaining a permit for multi-family housing construction and the construction of most industrial facilities. This is because it contains information about the possible number of storeys and density of buildings, building setbacks, and distances between buildings.
The Unified State Electronic System for the Construction Sector was developed by the Ministry of Regional Development in cooperation with the Ministry of Digital Transformation of Ukraine, with the support of the USAID/UK aid Transparency and Accountability in Public Administration and Services (TAPAS) project.
BRDO experts participated in the drafting of regulatory acts for the implementation of the E-construction system.
The Ministry of Digital Transformation published a draft resolution of the Cabinet of Ministers of Ukraine “On Amendments to the Rules for the Provision and Receipt of Telecommunication Services”.
If the resolution is adopted, subscribers will no longer be charged for content services that they did not order.
What was the problem?
Ukrainians lose hundreds of millions of hryvnias a year due to hidden content service schemes. In 2020, the National Commission for State Regulation of Communications and Informatization (NCCIR) received 19% more subscribers’ complaints when compared to 2019. In particular, these complaints include jokes, SMS horoscopes, dating clubs, and many other services for which subscribers are charged by mobile operators without their knowledge.
Due to significant gaps in the legal regulation of the procedure for ordering and providing these services were unprotected: content service subscriptions were imposed, subscribers were charged without their knowledge, and it was virtually impossible to protect the violated rights.
The BRDO estimated that all prepaid subscribers, ie. 86% of mobile subscribers, were not protected. At the same time, market players are hiding the value of services, but BRDO experts have indirectly estimated that the volume of the market of content services is at least a billion hryvnias a year.
To change the situation for the better and prevent subscribers from the illegal charging of fees, the Better Regulation Delivery Office (BRDO) drew attention to the problem of violations of subscribers’ rights in the provision of content services and proposed mechanisms to address it back in 2019.
In particular, BRDO experts drafted the first version of the resolution to regulate the provision of content services, and earlier this year the BRDO submitted a formal appeal to the Prime Minister of Ukraine, the Verkhovna Rada Committee on Digital Transformation, and the Office of the President of Ukraine regarding violations of consumer rights in the provision of content services and the need to address this problem immediately.
What will change if the resolution is adopted?
We welcome the publication of the draft resolution and look forward to its adoption!
From January 1, 2023, Ukraine will implement Regulation (EU) No 305/2011 into national legislation. This document establishes conditions for the marketing of construction products.
Also on January 1, 2023, the law “On Provision of Construction Products on the Market” will fully enter into force.
What will change in the Ukrainian market of construction products?
According to the European Commission, harmonized European standards that are one of the fundamental principles for changes cover about 75-80% of all construction products. A rule of mandatory declaration of product performance will apply to this share of the most important construction products, such as cement, mortars, and windows.
If manufacturers declare the conformity of their products with European standards, they will be fully responsible for this information. And consumers will not only receive complete information about manufacturers, suppliers, and properties of construction products but also be able to quickly verify the accuracy of this information. As a result, it will be possible to reduce the number of low-quality construction products on the market and improve market control.
How to quickly and effectively implement European rules in the Ukrainian construction market realities?
To facilitate the process, BRDO experts developed a Green Paper “Rolling review of the quality of state regulation of the provision of construction products on the market” that contains:
Additionally, the Green Paper contains methodological recommendations for the effective implementation of the Law of Ukraine “On Provision of Construction Products on the Market” that will be useful for both government policy makers and construction sector representatives.
The Green Paper is available at regulation.gov.ua (in Ukrainian).
BRDO is also launching a public consultation on the effective implementation of the provisions of Regulation 305 and the Law “On Provision of Construction Products on the Market”. Join the discussion.