Bees pollinate more than 80% of the world’s plants.
These insects increase the productivity of crops, and their unique by-product is known worldwide.
In Europe, the economic effect of pollination is estimated at 22 billion euros per year.
In Ukraine, beekeeping has been a popular activity for many centuries. Now it is a source of income for small and medium-sized businesses in villages.
However, some acts regulating the industry were adopted in Soviet times and do not cope with current challenges.
Bee conservation has recently become a critical issue. Due to air pollution, bees are in danger of dying out. One of the key threats to them is agrochemical poisoning.
The main reason is the lack of effective communication and cooperation between farmers and beekeepers. Farmers use plant protection agents on their lands, while beekeepers lose thousands of bee colonies as a result. This leads to millions of hryvnias of direct losses and hundreds of millions of hryvnias of indirect losses.
The economic effect of plant pollination by bees is measured not only by the cost of honey collected. Pollination also boosts crop yields and brings additional profits to the agricultural sector, but there are just a few positive cases of cooperation between beekeepers and farmers in our country.
One of them is the pollination of sunflowers that are grown by the Agroindustrial Group Arnika. (2,325 bee families from Poltava and Cherkasy regions were involved). Beekeepers received honey, and farmers — a good crop.
The Ministry of Economy and the Better Regulation Delivery Office (BRDO) have been working with the Association of Beekeepers and all parties concerned for three years to address beekeeping issues, in particular concerning the policy of good neighborliness of beekeepers and farmers.
This cooperation resulted in the Order of the Ministry of Economy #338 “On some issues in beekeeping” dated February 19, 2021. The approval of this document is an important step in ensuring an eco-friendly environment and protecting biological diversity in Ukraine.
In particular, the order introduces clear rules of the game for the state and beekeepers, creates modern and effective tools for regulating the beekeeping market.
This implies a simple and fast procedure for registration of bee farms and issuance of veterinary and sanitary certificates of bee farms, effective instructions for prevention and determination of a fact of bee poisoning by plant protection agents, the introduction of a mechanism for economic assessment of losses from bee poisoning.
From now on, the state, beekeepers, and other concerned parties will be able to obtain reliable information on the number of bee farms and the volume of honey production. The order also introduces a mechanism of communication regarding the use of plant protection agents between beekeepers and farmers that will prevent bee poisoning.
The next step should be the adoption of the Law “On Beekeeping” that will comprehensively regulate all problematic issues in the industry, as well as a legal document that will regulate the legal relationship regarding pollination.
As known, Ukraine must harmonize its legislation under the commitments made to the European Union and the requirements of the EU to producers in terms of implementing the European Green Deal.
As part of this policy proposed by European Commission President Ursula von der Leyen, two important strategies have been published: published: Farm to Fork (F2F) and Biodiversity.
Pollinators, including bees, are included in both strategies. Biodiversity is focused on the protection and restoration of natural areas, stimulation of sustainable and organic agriculture development.
The Biodiversity’s priority is to reduce the use of harmful pesticides for reducing the negative impact on natural ecosystems and preserving pollinators. Also, bees are discussed in paragraphs of the section “Bring nature back to agricultural lands” of the F2F strategy.
The authorities should continue to create a safe beekeeping infrastructure in Ukraine and conditions for agricultural producers to access EU markets in line with the Green Deal purposes.
Source: Economichna Pravda
The Better Regulation Delivery Office (BRDO) and the Dnipro city council signed a Memorandum on partnership and cooperation to improve the business climate in Dnipro. The document envisages joint work of BRDO and local authorities to improve the ease of doing business index in Dnipro (according to the Regional Doing Business rating) by implementing recommendations developed by BRDO experts.
Additionally, it is planned to provide support for small and medium-sized businesses: the #StartBusinessChallenge public information service will provide information on local regulatory acts regarding starting and running a business in Dnipro, as well as contact details of regional offices of local authorities.
“We are always open to active cooperation with local authorities which are ready to implement changes. Based on the results of this year’s Regional Doing Business rating, BRDO experts prepared recommendations for improving the investment climate in Dnipro. Our goal is to simplify the lives of all Ukrainian entrepreneurs significantly,” Oleksii Dorohan, CEO of the Better Regulation Delivery Office (BRDO) said.
“We believe that the signing of the Memorandum on partnership and cooperation with the Better Regulation Delivery Office confirms the importance of municipal authorities’ intentions to fully contribute to improving the city’s business climate, implement measures at the local level to simplify starting and running a business, and continue introducing modern and relevant forms of cooperation between the government and the public,” Oleksandr Sanzhara, Secretary of the Dnipro city council, said.
For information
#StartBusinessChallenge is a free public online service that provides full and updated information on how to legally open a business step by step. Currently, the service contains 127 instructions for starting a business, and all available instructions have already been reviewed by experts of the Dnipro city council. To increase the transparency and clarity of local rules for entrepreneurs, BRDO and the Dnipro city council have been cooperating since 2019, when Dnipro joined the platform.
Better Regulation Delivery Office (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.
The draft decision that will resolve the situation has been considered for more than a year and a half — mobile operators are deliberately delaying the process. The document is currently being approved by the State Regulatory Service and then can finally be submitted to the Government.
Background
Mobile subscribers are increasingly complaining about being charged for content services they did not order. These are jokes, SMS horoscopes, dating clubs, and many other services that mobile operators impose on consumers from year to year. For example, in 2016 – the first half of 2020, the National Commission for State Regulation of Communications and Informatization (NCCIR) has received 1,809 complaints of consumer rights violations in the provision of content services, and the dynamics of complaints is constantly growing.
Due to significant gaps in the legal regulation of the procedure for ordering and providing these services, everything is working against consumers: services are imposed; subscribers are charged without their knowledge; it is impossible to protect the violated rights. Most subscriptions do not require special services: in most cases, subscribers obtain their subscriptions without knowing it, sometimes it is enough to accidentally click on a picture on the Internet on your mobile, or become a victim of a software virus.
“The problem is very serious. All prepaid subscribers are not protected, ie. 86% of mobile subscribers. Market players hide the value of services, but we have indirectly estimated that the volume of the market of content services is at least a billion hryvnias a year. Our goal: subscribers have to pay only for what they really intended to order,” Ihor Samokhodskyi, ICT Sector Head at BRDO, said.
What should be done?
Back in 2019, BRDO experts drew attention to the problem of violations of subscribers’ rights in the provision of content services and proposed mechanisms to address it. One and a half years ago, the NCCIR developed a document designed to regulate the provision of content services — a draft resolution of the Cabinet of Ministers of Ukraine “On Amendments to the Rules for the Provision and Receipt of Telecommunications Services”. It proposes to resolve the problem of unfair receipt of content services by introducing a double acceptance mechanism: subscribers will have at least twice to confirm their desire to purchase a certain service. Moreover, the draft resolution provides for the obligation to inform subscribers when they are charged for some services, as well as the option to block the provision of content services to a particular subscriber.
“Instead of one month specified by law, the draft resolution has been discussed for more than a year and a half. Mobile operators do not support the idea to inform subscribers about write-offs and strengthen the protection of subscribers in general. Therefore, they block the change of rules directly and through their business associations. We emphasize that it is unacceptable to continue using unscrupulous schemes of providing content services,” Ihor Samokhodskyi said.
Currently, the draft resolution has been approved without comments by the Ministry of Digital Transformation, the Administration of the State Service of Special Communication and Information Protection, the Ministry of Economic Development, Trade and Agriculture, the Antimonopoly Committee, the State Service on Food Safety and Consumer Protection, and the Ministry of Finance. Among the central bodies, the final approval by the State Regulatory Service is expected, and then the document can be submitted to the Cabinet of Ministers.
By signing the Association Agreement with the EU, Ukraine has committed itself to ensure a high level of consumer protection and achieve harmonization between Ukrainian and EU consumer protection systems.
BRDO calls on as soon as possible to support the adoption of amendments to the “Rules for the Provision and Receipt of Telecommunications Services” and protect the rights of millions of telecom service consumers.
Based on the recently presented Regional Doing Business 2020 rating, the Better Regulation Delivery Office developed a set of recommendations for Ukrainian regional centers to facilitate doing business.
According to the study, a systemic failure of almost all regional centers is related to the time-consuming formal procedures. It implies not only the number of days that businesses spend on necessary bureaucratic stages but also the number of visits to government agencies. This can be no less a source of damage to businesses than spending money.
Excessively bureaucratized formal procedures create unfavorable conditions for investment, and in some cases create serious obstacles (complicated by the pandemic) for entrepreneurs.
“One of the main tasks of the government is to reduce the regulatory burden on business, so the rating will be useful to produce solutions in the context of deregulation reform and entrepreneurship development. Local authorities need to clearly understand what to do next to increase the regional investment attractiveness. We developed such a road map for all regional centers,” Oleksii Dorohan, BRDO CEO, said.
According to him, the rating results showed that even this year’s leader — Zhytomyr region — still has a lot to improve.
Recommendations for all regional centers can be found here (in Ukrainian): https://bit.ly/3vbR26B
The Regional Doing Business 2020 rating is based on a survey of Ukrainian entrepreneurs in accordance with the adapted World Bank’s Doing Business methodology. The assessment included the number of contacts with representatives of licensing authorities (“visits”); the number of calendar days spent on obtaining permits (“time”); and the costs of entrepreneurs (“money”).
According to the rating, Zhytomyr (with 356 points) has the best business climate among all regional centers. Mykolayiv, Khmelnytsky, and Kherson regions (with 303, 304, and 310 points respectively) ranked last in the rating.
Let’s briefly analyze whether it is possible to implement a high-speed rail project in Ukraine and what the concessionary terms mean for investors.
According to the generally accepted meaning of concession, it is a type of cooperation, in which investors create or reconstruct state-owned infrastructure. Instead, they are permitted to operate facilities for a fee for a certain period of time. Usually, this period is limited and determined by the contract at the planning stage. For example, Taiwan’s high-speed railway built with private investment is to become state-owned after 68 years of operation.
The attraction of private investors for high-speed rail (hereinafter — HSR) projects is widely used in many countries around the world, as it involves not only a high-tech but also extremely expensive transport mode in terms of specialized infrastructure construction. For example, Spain spent 31 billion euros, France — more than 38 billion euros, Italy — almost 32 billion euros, and Germany — 28.5 billion euros to implement such a project. China has already spent $1.2 trillion to build high-speed lines and is still a record-holder.
It is estimated that the project in Ukraine will cost at least 60 billion euros. HSR trains cannot operate on Ukrainian railway lines. This requires tracks with wider turning angles so that trains do not derail at high speeds. It will be necessary to build separate new routes corresponding to all high-speed rail standards between the announced cities. For example, there is a mountain section on the Kyiv-Lviv HSR route, so new tunnels and railway overpasses should be additionally provided there. All this requires significant capital investment in construction.
Moreover, the project of high-speed routes requires new trains, the price of which is many times higher than the price of Ukrainian “Tarpans” and much higher even than the currently operated Hyundai trains. The cost of such an HSR train with a total of 350 seats, ie almost twice less than in Hyundai trains, is about $20-25 million. Its annual maintenance will cost almost $1.2 million. At least ten trains should be purchased for the announced routes.
Also, the maintenance of 1 km of railway tracks (it is about $100 thousand) should be taken into account. It is estimated that at least 2,000 km of new railways will be needed to connect the announced cities.
The project announced by Ukrzaliznytsia proposes to use existing railway stations. According to Volodymyr Zhmak, the first project stage is a station concession. It covers Kyiv, Odesa, and Kharkiv railway stations. It is also planned to involve the Lviv station. The project provides transforming them into large shopping centers, where about 60% of visitors are not passengers but visitors.
However, it’s not that simple. These stations are located within the city. This means that a high-speed train must run at a permitted speed on existing tracks in the city. This, in turn, will significantly increase the travel time and reverse the high-speed rail idea as such. The second option is the construction of new infrastructure of separate tracks within the city. It looks too unrealistic right now. That is why separate stations are built on the outskirts of cities for high-speed rail lines in other countries.
In general, the HSR project looks quite ambitious, as Ukrzaliznytsia itself claims. However, it is not because of the construction activities and the size of external investments involved. The real issue is the feasibility of such a project. According to UZ, passenger transportation remains unprofitable from year to year. According to the report for January-October 2020, the cost of intercity passenger transportation amounted to UAH 5.66 billion, and revenues — only UAH 1.7 billion, ie the operating result was (-3.94). In 2019, expenditures amounted to UAH 15.4 billion, revenues — 9.2, so the operating result was (-6.3). It is still unclear whether the new routes will be profitable.
However, Ukrzaliznytsia can increase the speed of trains to 180 km/h on existing tracks. These are Intercity trains, which can currently run at 170 km/h on some sections and usually run at 90 km/h. As Intercity trains run on the same tracks as cargo trains, railway tracks constantly require adjustments and minor repairs. For this purpose, a track-testing car that checks a grading of track deformed under the weight of cargo cars should run on the track first.
However, today the level of infrastructure deterioration is critical. 34% (over 9 thousand km) of the almost 27 thousand km of main tracks need major repairs and reconstruction. In 2020, UZ repaired less than 2%. Additionally, station and special tracks also need major repairs and reconstruction. Last year, the need for their repair was met by less than 1%.
It should be noted that the implementation of the high-speed routes project requires the introduction of a free market of railway transportation in Ukraine. There are prerequisites for this. The draft laws “On Railway Transport of Ukraine” and “On the National Commission for State Regulation of Transport” have already been registered in the Verkhovna Rada. Their task is unbundling, ie the division of Ukrzaliznytsian into cargo, passenger, and infrastructure operators. Only the infrastructure will remain fully nationally owned, while market conditions will be created for other operators and it will be possible to attract private investors.
Ukraine will not be able to afford the implementation of the high-speed rail project within its budget for the next ten years. But even if we assume that there will be an investor who is ready to cooperate on concessionary terms within the current legal framework, it is completely unclear why they need Ukrzaliznytsia for this.
Source: mintrans.news
The Ministry for Development of Economy, Trade, and Agriculture of Ukraine excluded the requirement to approve the opening hours of private restaurants and cafes.
In response to BRDO’s request to the State Regulatory Service, the agency clarified to local self-government bodies that there were no legal grounds for such a requirement.
Previously, local self-government bodies interpreted the provisions of the Law of Ukraine “On Local Self-Government” and the Order of the Ministry of Economy as authorizing them to establish convenient for the population work schedules of both public utility companies and private companies.
From now on, entrepreneurs will have legal grounds for refusing to comply with the illegal requirements of local self-government bodies.
In particular, these are the cities where local authorities restricted the operation of private companies related to the trade, services, and catering industry (Zhytomyr, Chernivtsi, and Khmelnytsky). These decisions of local councils are illegal and contradict the principles of state regulatory policy.
Legislative acts and digital tools developed with the participation of experts from the Better Regulation Delivery Office (BRDO) in 2015-2020 saved UAH 25 billion for Ukrainian small and medium-sized businesses, as well as UAH 5.5 billion of government spending.
This is stated in the BRDO report for 2020
During 5 years of BRDO activity:
166 legislative acts (co)drafted by our experts were adopted (in 2020 — 27, of which there are 10 laws);
1,245 regulatory acts that made it difficult to do business were repealed (36 in 2020);
5 unique online tools used by SMEs, civil servants, and local self-government bodies were developed.
Also, in 2020, BRDO experts conducted 18 researches in construction, energy, transport and infrastructure, IT&Telecom, agriculture, and supervision and control sectors. These researches have become or will become the basis for solving the problems of entrepreneurs and citizens.
“2020 was the year of the adoption of the largest BRDO initiatives we ever had related to public policy. However, those who profit from corruption also increase their resistance to change every year. Nevertheless, we can support the progress of reforms thanks to the creation of broad coalitions with representatives of various organizations and institutions,” Oleksii Dorohan, BRDO CEO, said.
Our mission is to play a key role in transforming Ukraine into a European democracy with effective governance and a strong economy.
In 2020, Ukraine’s export of IT services exceeded $5 billion a year for the first time, as well as exports of transport services and mineral products.
This is according to the NBU data on external accounts and foreign trade, given in the presentation of the Better Regulation Delivery Office (BRDO).
According to the NBU, Ukraine’s total exports decreased by 4.6% in 2020. Both exports of goods and services also decreased.
At the same time, IT industry exports increased by $853 million, or more than 20% per year. Thus, the share of computer services in total exports reached 8.3%.
It should be noted that despite the pandemic, the IT industry demonstrates positive impacts on the Ukrainian economy. However, the possibility of further increasing Ukraine’s exports of IT services will depend on the growing number of IT specialists in the labor market. By the way, low rates of training of IT specialists by Ukrainian higher education institutions were analyzed by BRDO experts in the study “Analysis of IT education in Ukrainian universities”.
“Despite the challenging year, IT exports increased significantly. The long-term growth in exports of IT services requires to focus on human capital development. It should be addressed both through education (training of new specialists) and through immigration (attracting foreigners),” Ihor Samokhodsky, ICT Sector Head at BRDO, said.
Since 2020, foreigners have gained access to the immigration mechanism, but some issues still need to be improved.
Also, foreigners can be single tax payers without having a residence permit, and from October 2020, they do not need to make an “extra departure” from Ukraine to obtain a temporary residence permit in Ukraine.
You can see the NBU data at https://bank.gov.ua/ua/statistic/sector-external/data-sector-external#1
The number of IT bachelors graduating from Ukrainian universities will increase significantly in the coming years. In 2024, more than 20,000 students will obtain a bachelor’s degree in IT (this is 23% more than in 2020).
This is evidenced by the results of the “Analysis of IT education in Ukrainian universities” developed by experts from the Better Regulation Delivery Office (BRDO).
In Ukraine, the demand for new IT specialists counts up to 30000-50000 per year. In turn, higher education institutions annually produce an average of 16200 graduates with bachelor’s degrees in IT.
Colleges and technical schools prepare an average of 6300 junior specialists per year, and this number is increasing. However, junior specialists without further education will be insufficiently involved in the IT market, so they will continue their university studies.
The number of IT students in Ukrainian universities financed by the state has been gradually declining over five years, but it was significantly expanded in 2020.
In the future, the number of IT graduates will also depend on the positive demographic situation and the proportion of university applicants who chose to be IT specialists. Experts developed three scenarios, under which this proportion can change.
A “dynamic growth” scenario: the proportion of university applicants taking IT courses will continue to grow at the current rate up to 16.1% in 2026. Accordingly, in 2030 we can expect the production of 37.4 thousand new specialists, which roughly corresponds to the current real change in the number of specialists in the market.
A “restrained growth” scenario: the proportion of university applicants taking IT courses will remain at the same level as now — 12%. Under this scenario, in 2030 we can expect the production of 27.8 thousand new specialists. In this scenario, the increase in the number of graduates is achieved only through demographic changes.
A “slow growth” scenario: the proportion of university applicants taking IT courses will gradually decrease to 10% in 2026. Accordingly, in 2030 we can expect the production of 23.2 thousand new specialists.
“Thus, the system of formal higher education currently does not meet the market demand for IT specialists and, obviously, will not be able to achieve this goal in the future. Retraining and non-formal education of specialists in other areas, as well as immigration of IT specialists and attraction of foreigners remotely, are also important “growth points” (outside the formal education system) for human capital in the IT sector,” Ihor Samokhodsky, ICT Sector Head at BRDO, said.
Let us recall that the immigration mechanism, which allows IT specialists to work as private entrepreneurs without additional restrictions while being single tax payers without a residence permit, has become available since 2020. Moreover, from October 2020, foreigners do not need to make an “extra departure” from Ukraine to obtain a temporary residence permit in Ukraine.
The analysis in Ukrainian is available for download.
The Better Regulation Delivery Office (BRDO) welcomes the simplification of procedures for starting road construction and improving the e-system in the construction sector but warns that amendments to the law regarding the chief architect’s powers create corruption risks.
On February 4, 2021, the Verkhovna Rada adopted the draft law “On Optimization of Road Construction and Improvement of Urban Development Legislation” (registration #2680) that was drafted with the participation of BRDO experts.
The law provides for the simplification of the procedure for obtaining the right to perform road reconstruction activities and major repairs. The law also improves the procedure for providing construction-related administrative services through the Unified State Electronic System in construction, reducing time to introduce certain services.
From now on, investors will be able to launch road construction activities without complicated bureaucratic procedures. In particular, this involves the acceleration of repair works on roads and, consequently, the stimulation of settlement infrastructure development.
Along with the positive changes, the amended version of the law contains provisions creating corruption risks related to the powers of chief architects. To be more specific, these include the power to approve project designs for a large number of objects. At the same time, there are poorly defined procedures and no established criteria for such approvals.
For example, according to the adopted contradictory amendment, the main reason for refusing the approval is a negative conclusion of the Architectural and Urban Planning Council. However, the same provision establishes that the Council’s conclusions shall be formulated as recommendations.
At the same time, the grounds for negative council’s conclusions are not established. Thus, it will be possible to refuse to approve any project without reason, and given the fact that the architectural and urban planning council is a collegiate advisory body that operates on a voluntary basis, there also will be no responsibility of those who made such a decision. And this is not the only element of collective irresponsibility introduced into the law because, in addition to the architectural and urban planning council, the decision of such a collegiate body as the advisory council on cultural heritage protection should be also taken into account. For each project on an individual basis! Even for objects with minor consequences!
The deadline of 15 working days to provide administrative services for approval is expected to be missed, as it seems impossible to prepare conclusions of two collegiate bodies with an irregular schedule of meetings during this time. And when it comes to the cases when the projects are submitted to the higher level council for consideration due to the absence of a local architectural and urban planning council, it will be even a longer period. That is, the complicated approval procedure will be significantly extended for the vast majority of construction projects, and this will certainly harm the investment attractiveness of the national construction market and worsen Ukraine’s position in the Doing Business rating.
In such a way, chief architects may use their own judgements with unlimited discretion and without liability for wrongful decisions. Besides, the construction project approval with chief architects is the only paper construction-related procedure that was removed from the functionality of the Unified State Electronic System in construction due to the new amendments.
According to experts, the priority task of chief architects should be the formulation of general rules: urban planning documentation, design code of a city or its separate parts, architectural competitions, etc. The formulated general rules prevent conflicts and inefficient spending of resources by participants in urban planning activities. Instead, approval procedures for each project carry the risk of unjust unpredictable decisions while being ineffective when it comes to the chief architect’s working time and not allowing them to focus on priority tasks.
For information:
Back in 2011, the state reformed construction relations and unified approval procedures in this sector. The Laws of Ukraine “On Regulation of Urban Planning Activities” and “On Architectural Activities” established a provision on exemption of projects developed following the initial data (urban planning conditions and restrictions) from any approval. The logic of such changes is simple and effective: requirements for construction projects should be made before design activities, not ex post facto. Every land owner, user, or buyer should understand the red lines for their plans before they spend money on their implementation. This is in line with the rule of law ideas, according to which the regulation of activities should be predictable for the persons to whom it applies.
Areas of historical significance are protected by cultural heritage protection tools. According to the BRDO analysis, several regulatory tools are applied to new construction projects in areas of historical significance. These include: approval of land allocation, approval of project documentation, permit for earthmoving operations, and works on monuments. In case of construction activities in the protection zone of local monuments located in the area of historical significance, approvals and permits shall be issued simultaneously by the Ministry of Culture of Ukraine and local cultural heritage protection authorities.
According to the study, Zhytomyr region is the best one for doing business in 2020. Chernihiv region (2nd position), Kyiv city (3rd position), and Rivne region (4th position) also are in the TOP-4 of the Regional Doing Business – 2020 rating. Vinnytsia and Ivano-Frankivsk regions gained the same number of points and are both ranked fifth in the rating.
Kyiv region (assessed separately from the capital), Luhansk region (Severodonetsk was assessed), Kharkiv region, Kherson region, Khmelnytsky region, and Mykolayiv region ranked last in the rating 2020.
“This is the third study of the business climate in Ukrainian regions conducted by BRDO. The rating is based on a survey according to the adapted World Bank’s Doing Business methodology. Progress in the decentralization reform provides local self-government bodies with new powers. The way in which powers are exercised often has a defining impact on public services that local entrepreneurs will receive. The implementation of the adopted reform laws often depends on local self-government bodies. Regional Doing Business is a litmus test that indicates to local self-government bodies what aspects require attention to improve the business environment and attract investors,” Oleksii Dorogan, CEO of the Better Regulation Delivery Office (BRDO), said.
The Regional Doing Business – 2020 rating is determined by the amount of points gained by a regional center in six components: starting a business, paying local taxes, land plot registration, connection to electricity grids, obtaining construction permits, and electronic services. The assessment was conducted using the adapted World Bank’s methodology and based on a survey of Ukrainian entrepreneurs (1,754 respondents from 25 regions and the city of Kyiv).
“Zhytomyr region won in this year’s rating having gained high scores by such components as “starting a business”, “land plot registration” and “connection to electricity networks”. However, even the rating’s leader has significant gaps that should be eliminated: Zhytomyr received an extremely low result in terms of “electronic services” in comparison with some regional centers, which are at the bottom of the ranking. Therefore, the rating is about an intermediate result that should be consolidated and further improved,” Vadym Zaharii, BRDO project manager, emphasized.
Zaporizhzhia (+10 positions), Kropyvnytskyi (-5 positions), Chernivtsi (+6 positions), Kherson (-5 positions), Khmelnytskyi (-8 positions) and Mykolayiv (- 11 positions) are among the regional centers with significant rating changes.
“Regional Doing Business is aimed at achieving two goals. First of all, it is a guide for potential investors showing a burdensomeness level of the most common administrative procedures in a particular city. Second, the rating is useful for local and regional authorities seeking to become leaders next year. This is honest feedback from businesses that should encourage local authorities to change,” Valerii Prokopets, Deputy Director of the Entrepreneurship Development and Regulatory Policy Department of the Ministry of Economic Development, Trade and Agriculture, said.
The Regional Doing Business rating that assesses the ease of doing business in all regional centers of Ukraine has been developed by BRDO experts since 2017.
View rating results: https://rdb.brdo.com.ua/
Learn more about the methodology: https://rdb.brdo.com.ua/DB2020.pdf
Download the presentation: https://bit.ly/39As8oi
For information:
The Better Regulation Delivery Office is an independent expert and analytical center funded by international donors, primarily the European Union as part of the FORBIZ project within the EU4Business Initiative. We focus on improving the business environment and investment attractiveness of Ukraine, promoting the development of entrepreneurship, and establishing a public dialogue between the government and businesses.
In recent days, the Ukrainian parliament has been facing a significant crisis of credibility both within individual factions and from the society, whose interests people’s deputies should defend.
In this context, it is quite difficult to predict how this situation will affect the legislative process, especially in terms of those initiatives that are not backed by resource lobbyists or private interests of beneficiaries of certain political forces.
For example, this Wednesday the parliament will consider draft law No.4221 on self-regulation of economic and professional activities. This is a framework document designed to provide all business areas with the right to self-organization to ensure fair competition and the development of entrepreneurs’ reputation.
For example, a self-regulatory association of entrepreneurs is entitled to establish mutually agreed quality standards in the relevant field, protect consumer rights if one of the association members does not comply with the stipulated rules, act as an authorized representative of the sector in cooperation with authorities and international professional communities, and advocate for the simplified business environment in the market.
Currently, not everyone has this right. Entrepreneurs engaged in land valuation, architectural activities, professional activities in the securities market, activities of arbitration managers, insurance activities, tourism, and several other areas are allowed to create self-regulatory organizations (SROs).
This right is granted to entrepreneurs by the provisions of 37 different regulations prescribing very different requirements for SROs and different approaches to functioning. This often leads to corruption and abuse of power.
In some laws, the self-regulatory status is given to a specific organization, and this fact creates room for manipulation and often slows down market development.
In addition to restoring the right to self-regulation for all entrepreneurs, the draft law No.4221 will solve the problems of existing SROs, such as conflict of interest in management, manipulation of market access for new players, bribes for documentation from SROs, non-transparency of organization’s decisions and more.
The draft law establishes uniform, unambiguous and clear rules of the game for everyone. For example, a mandatory requirement for a self-regulatory organization to publish internal rules and documents, financial statements, a register of members, draft decisions, and so on.
The draft law that will soon be considered by parliamentarians expands opportunities to protect the interests of all Ukrainian businesses, reduces state interference in a particular activity, and expands ways to protect the rights of consumers, who, in case of dissatisfaction with the goods or services of some entrepreneurs, can apply to the SRO, of which they are members. Absolutely all citizens will benefit from its implementation.
However, the question remains: will the Ukrainian parliament be able to make the necessary, long-awaited decisions not for a specific business, but for all citizens?
Source: Ekonomichna Pravda
BRDO experts prepared a list of regulatory acts provided for by the Law “On Electronic Communications” and sent it to the relevant authorities and market participants.
The Law “On Electronic Communications” recently signed by the President of Ukraine will enter into effect on January 1, 2022. In the meantime, it is important to revise some bylaws, so that the law can become fully effective.
“The law is the basis of the reform, but it needs amended bylaws. In particular, it is necessary to harmonize the current regulatory acts of the government and other executive bodies. In addition, it is necessary to adopt the draft law No.4066 on the sectoral regulator, as well as amendments to the Tax Code regarding the mechanisms for calculating the rent for frequencies,” Ihor Samokhodskyi, IT&Telecom Sector Head at BRDO, said.
According to him, now it is important to start work on the preparation of these acts with the participation of authorities, market participants, and experts as soon as possible. By January 1, 2022, the entire legislative system should be ready to implement the provisions of the Law “On Electronic Communications”. In turn, the Better Regulation Delivery Office (BRDO) is ready to actively participate in the process.
The first EU Code-based version of the draft law was developed by BRDO experts. A working group within the Verkhovna Rada’s Committee on Digital Transformation, including representatives of operators, providers, associations, and experts from the Better Regulation Delivery Office (BRDO), prepared the draft law for the first reading.
The results of the “Regional Doing Business 2020” rating developed by experts from the Better Regulation Delivery Office (BRDO) will be presented on Monday, February 1, at 10:00 AM in the Ukraine Crisis Media Center (UCMC) (Khreshchatyk St., 2).
The rating assesses whether the investment climate is favorable in the regions of Ukraine based on the amount of points obtained by each region for the following six components: starting a business, paying local taxes, land plot registration, connection to electricity networks, obtaining construction permits and electronic services.
The assessment was conducted using the adapted World Bank’s methodology and based on a survey of Ukrainian entrepreneurs.
The presentation will be attended by:
Moderator: Yuliia Reshitko, Communications Sector Head at the Better Regulation Delivery Office (BRDO)
Please register at https://forms.gle/gXWV9aK78KHGtj2v8
For information:
The Better Regulation Delivery Office is an independent expert and analytical center funded by international donors, including the European Union as part of the FORBIZ project and the EU4Business Initiative. We focus on improving the business environment and investment attractiveness of Ukraine, promoting the development of entrepreneurship, and establishing a public dialogue between the government and businesses.
Raiding in Ukraine has a long history being based mainly on gaps in laws related to state registration procedures.
The essence of raiding remains unchanged: criminals commit some offenses (forgery or theft of documents, fraud, etc.) that allow them to gain control over the entrepreneur’s assets on allegedly legal grounds.
As the concept of “raiding” is not enshrined in law, sometimes those who do not commit illegal acts are blamed on it.
Often, the parties to a corporate conflict or debtors who do not want to return the property to its lawful owner use the raiding concept to manipulate public opinion. Such manipulations make it somewhat difficult to monitor real raiding cases.
According to the International Property Rights Index, in 2019, Ukraine ranked 109th out of 129 countries under study in terms of the quality of the private property rights protection system.
Due to the lack of protection of property owners and corporate rights from criminal acts, entrepreneurs are forced to spend significant additional resources to defend their rights and interests.
The lack of the rule of law in society creates social tensions, and Ukrainian and foreign investors do not see Ukraine as the location to invest.
During Ukraine’s independence, raiders regularly improved their schemes. Legislative changes usually provided a framework for this. Let’s take an example of the reform of administrative services in state registration of business and real estate that was carried out in 2015.
As a result, the “most popular” schemes of recent years involve seizing businesses and assets by illegally interfering with the operation of state registers and manipulating their information. Thus, the so-called “registration raiding” reached a new organized criminal level.
Raiders enter information about a new owner of corporate rights or real estate in state registers on the basis of forged documents or use the fact that other documents are not available in the database.
After gaining control over the entrepreneur’s assets, raiders usually alienate them through a fictitious person to an “honest” acquirer or a chain of such acquirers.
The state registration legislation has been amended several times over the past five years. Such legislative changes include the “anti-raiding” law No. 159-IX, which was drafted with the participation of the Better Regulation Delivery Office (BRDO).
But how to find out whether the “anti-raiding” legal amendments have resulted in a reduced number of raider seizures of businesses?
Today, the statistics of illegal takeovers in Ukraine are not kept. However, in late September, the Opendatabot open data platform estimated the raiding dynamics in Ukraine based on the number of registered criminal proceedings under the “raiding” articles of the Criminal Code (Articles 205-1, 206 and 206-2) per year and the number of cases heard in courts.
As of August 2020, 606 criminal proceedings have already been registered in Ukraine, 786 criminal proceedings — in 2019, and 500 —in 2018, so the Opendatabot concluded that the number of raider attacks increased annually in Ukraine.
However, the increase or decrease of criminal proceedings under “raiding” articles do not allow to come to an unambiguous conclusion about the increase or decrease in raiding cases. And there are several reasons for this.
First, not all pre-trial investigations of crimes related to raider attacks are conducted under “raiding” articles of the Criminal Code.
Due to the lack of unified approaches, investigations of raiding-related crimes are often conducted on the grounds of crimes under other articles of the Criminal Code: 187 (robbery), 190 (fraud), 191 (property misappropriation or embezzlement, or taking the property by means of the official position abuse), 356 (unsanctioned actions), 357 (theft of documents), 358 (forgery of documents) and 365-2 (abuse of power by a person providing public services).
Secondly, complaints on the crime commission filed with law-enforcement agencies are only one of the tools to protect against raider attacks. The highest priority task of entrepreneurs facing illegal takeovers is to cancel illegal registration actions.
To this end, businesses apply to the court or the State Registration Complaints Board at the Ministry of Justice of Ukraine.
Criminal proceedings are often initiated to strengthen the legal position in a commercial, civil or administrative case by filing a conviction in such criminal proceedings as evidence in the case.
Third, the number of criminal proceedings under both “raiding” and the above articles of the Criminal Code does not necessarily correlate with the number of raider attacks.
Being primarily interested in the immediate cancelation of a registration action, an entrepreneur will not always report to law enforcement agencies, because it may take years before the court delivers its verdict.
Therefore, a more illustrative indicator of the raiding increase or decrease is the ratio between the registration actions performed and the registration actions that were canceled through judicial and administrative procedures.
In such a way, a more complete conclusion about the raiding dynamics can be based on indicators that take into account the number of performed and canceled registration actions, as well as all the tools of entrepreneurs to protect their private property rights and compare such indicators over time.
Complaining to the State Registration Complaints Board at the Ministry of Justice of Ukraine is one of the most effective and quick ways to protect against raider attacks.
From September 2019 to September 2020, the Board at the Ministry of Justice considered 2,741 complaints from entrepreneurs, and this amount exceeds the annual number of criminal proceedings under “raiding” articles of the Criminal Code.
Accordingly, the conclusion on the raiding dynamics increase or decrease cannot be made without taking into account the performance indicators of the Board at the Ministry of Justice.
When assessing them, we should also bear in mind that the number of complaints received and considered by the Board at the Ministry of Justice may have been affected by the reformatting of its activity that took place in autumn 2019.
Thus, the Board increased the transparency of its activities (sound and video recording of meetings, regular publication of decisions), eliminated the practice of refusing to satisfy complaints of entrepreneurs on formal grounds.
This could help increase the confidence of expert circles in the institution and, consequently, increase the number of appeals from businesses and citizens during the end of 2019-2020.
In addition, we should take into account that the difference between the day of filing a complaint with the Board at the Ministry of Justice and the day of the registration action performed may be months or even years.
As a result, some of the complaints received by the Board at the Ministry of Justice today relate to appeals against registration actions taken in previous years, but not earlier than January 2016.
Moreover, businesses also use judicial mechanisms to protect their rights from raider attacks, despite the lengthy court proceedings.
The raiding dynamics can be seen due to the number of court decisions in cases of appeals against registration actions, which are considered by local administrative, commercial and general courts (depending on the subject matter and the parties involved in the dispute).
Another way to protect against illegal takeovers is to file a complaint with the Business Ombudsman Council (Council) that represents and defends the business interests in government agencies.
Business owners file a complaint with the Council to appeal against actions of state registrars, improper consideration of complaints by the Board at the Ministry of Justice, and inaction of pre-trial investigation bodies.
In its report for 2019, the Council reported on 114 raiding-related complaints from entrepreneurs during 2015-2019, with a trend of increasing the number of appeals for the third consecutive year. Therefore, it is also necessary to take into account the Council’s performance indicators to assess the raiding dynamics.
In such a way, conclusions on the increase or decrease of raiding in Ukraine cannot be based purely on the number of criminal proceedings under “raiding” articles of the Criminal Code.
Fighting against a raider attack, an entrepreneur or any citizen is primarily interested in the cancelation of illegal registration actions and tends to use all available legal remedies for this purpose.
Therefore, the calculation of the raiding dynamics in Ukraine and the effectiveness of government agencies should be based on comprehensive statistics on the number of performed and canceled registration actions, as well as consideration of appeals from citizens or businesses by relevant government agencies and institutions.
To this end, the Better Regulation Delivery Office announces the creation of a RaidBarometer, which is an index that most fully reflects the situation with raiding in Ukraine in recent years. The indicator itself and the calculation methodology will be presented soon.
Understanding the real situation with raiding, the state will be able to use the most optimal tools to ensure the private property right, while society will be able to assess the success or failure of legislative initiatives adopted in recent years to combat raiding.