Licensing of telecommunications services is canceled from January 1, 2018. However, the NCCIR (National Commission for the State Regulation of Communications and Informatization) to issue licenses to operators. The BRDO Office has prepared a draft Resolution that will permanently cancel licenses for telecom operators.
The budget revenues from licenses for telecommunications services amounted to only 0.07% and 0.08% of the total amount of telecommunication-specific fees. The state budget for 2018 doesn’t include such revenues at all, but the NCCIR plans to raise 12 million UAH of fees in this year.
According to BRDO experts, the greatest harm from such licensing is not extra cash expenses, but bureaucratic procedures hindering the activity of telecommunications operators, which are mostly small and medium businesses. Licensing manipulations allow to deny access for telecommunications operators to work or force them to seek “consultations” to register documents properly and receive permits in a timely manner.
Moreover, due to the current situation, Ukraine violates the EU Association Agreement that provides for the cancellation of licensing of telecom activities and the transition to the notification principle of access to the market.
Thus, the Resolution developed by BRDO experts will permanently cancel telecom licenses, identifying clear and unambiguous market rules. he document will soon be considered at the Government’s deregulation meeting.
Imagine: in the 2000s, Ukraine introduces price regulation of land survey works. You are an investor who enters into an agreement to develop a land allocation plan for 153 UAH. Yes, your heard it correctly. How many works can be performed for such a funny amount of money? Not many. Therefore, you should pay some lion’s share of money out of the contract actually by using shadow calculations. Who suffered from this? That’s right, the state budget suffered. And it still suffers, because the situation has not changed much since the 2000s.
In order to move away from the shadow schemes that involved customers of works and contractors, the Ministry of Economic Development together with the BRDO Office proposed to amend the Resolution of the Cabinet of Ministers No.1548 of 1996.
But a complete cessation of price regulation of land surveying is possible if the Law of Ukraine “On the Protection of Constitutional Rights of Citizens to Land” will cease to be in force. Don’t be misled by its patriotic name. This law intensified the shadow payment schemes for land allocation in 2005. At the moment, this law is so outdated that it is impossible to be implemented, but it still confuses citizens regarding prices for land survey works and involves them into shadow schemes.
Who benefits from share contributions in Ukraine? 11% of cities receive 60% of share contributions of investors to the development of city infrastructure. And 741 million hryvnias are concentrated among other 30 thousand settlements, that is, an average of 24 thousand UAH for each of them. How much can a city make having 24 thousand UAH?
Moreover, share contributions increase the cost of any construction by 10% for investors. Simple math shows that charges from investors just restrict the possibilities of a community to attract an investor, create new jobs and attract taxes to the budget.
What is more important to us: a tactical one-time collection of charges with hand-controlled calculations? Or the settlement’s strategic development and a good investment image of the country in the world investment market? We will have to make a choice, and it is desirable to do it as soon as possible.
Source: biz.liga.net
A new General Plan has not been approved in Kyiv for several years. The sluggishness of officials and deputies is too costly.
More than half of Ukrainian cities do not have a current General Plan – a strategic document for the development of any settlement. The capital is not an exception. Hence there is a constant struggle with the chaotic real estate development overloaded highways, communal collapses, etc. on a rush basis. This is an endless marathon of inefficient use of our resources by local authorities and its inability to formulate strategic goals and set tactical objectives.
Why is that and what is needed to make this marathon starting and ending and allow us, city residents, not to pay for it?
First of all, the current General Plan.
That is what should provide appropriate procedures for the human settlements development and serious protection against the architectural ensemble destruction, illegal construction facilities, traffic and communal collapses. If Kyiv had this plan, it would be impossible to obtain a permit to construct a “monster house” on Podol, and construction projects in recreational areas such as the Kachyne Lake in Poznyaky would be clearly identified as a violation. If there are clear rules, unscrupulous developers will lose the opportunity to create residential jungles like “ghettos” that multiply like clones not only around the city’s perimeter, but even in the historic centre. Kyiv authorities like to speak about strategies, but do not like to act strategically. Therefore, we are witnessing the strategic shift being replaced by tactical jumps in different directions.
Paradoxically, there is the general plan for the city. Even two plans. The first one developed since 1997 and adopted in 2002 actually had to be operational by 2020. And the second plan, which has been being developed since the Leonyd Chernovetsky’s administration and then by the Oleksandr Popov’s administration, is currently being finalized under Vitaliy Klychko as mayor for the period up to 2025. And so, these plans provide for a fundamentally different strategic approach to the city’s development.
The General Plan of Kyiv until 2020 envisages the development of Kyiv and suburban areas by joining 10 regional administrative districts (Boyarka, Vyshneve, Irpin, Vyshgorod, etc.). However, the General Plan 2020 was not agreed with territorial communities and local self-government bodies, the Kyiv Regional Council and the Kyiv Regional State Administration. As for the new draft General Plan 2025 (which, by the way, does not coincide with reality while having not yet come into force) provides for the city’s development through the use of own areas – that is, in fact, due to the urban densification in the areas with buildings of 1950-1970s.
These two strategic documents (the existing one and the draft plan) lead to a situation when the main formal decisions are made with reference to the current General Plan 2020, and individual tactical decisions on the development of detailed plans of territories – with reference to the draft General plan 2025.
In my opinion, there are a number of reasons that led to such a situation in the capital.
First, this is rule-making inconsistencies, which are traditional in Ukraine. In particular, validity periods of general plans and the decision of 2011 on the indefinite extension of general plans. In the opinion of lawyers, now it is difficult to adopt a new General Plan, since the legislation does not provide for replacing the document completely, but revising the existing one.
Secondly, there are difficulties related to the development of a historical and architectural key plan, which is part of the General Plan and provides for the boundaries of protected zones and the rules that should work for the territory of architectural monuments. By the way, the Ministry of Culture reports about at least 3,600 monuments in Kyiv.
Thirdly, chaotic zoning decisions (land zoning plan by purpose and restrictions). Initially, it was expected to develop a land zoning plan (its draft has been already developed) and include it into the General Plan. Although then this decision was changed, and they decided to approve the new General Plan and then – the zoning plan. As of today, nothing has been decided on zoning.
And, finally, the lack of political will at the level of local authorities to approve a unified strategy and cancel the “hand management” of the city. Because now, the majority of decisions regarding the city development are taken not at the strategic level of the General Plan, but on the basis of tactical, so-called detailed plans of territories (smaller area schemes).
According to the authorities, dealing with detailed plans of territories is “more dynamic and convenient” for investors. But they do not take into account global dimensions, long-term impact on infrastructure and social protection of living standards.
Using detailed plans of territories, developers shall agree with the local authorities only some areas for development projects without a comprehensive vision. That’s how the “residential ghettos” appear. And in this, it is logical that real estate developers are interested in the construction of only profitable facilities – residential mega complexes, shopping malls and office centers.
According to UN forecasts, in 2050, 66% of the population will live in cities. At the moment, this indicator is 54%. Annually the population of cities increases by 68 million. That is, the urbanization will amount to at least 180,000 people a day in the next few decades. And Kyiv is no exception. In terms of the urbanization index, the capital of Ukraine is moving absolutely within the global trend.
According to experts, over the past 7 years, the standard residential population of the capital has grown by more than 200,000 – now this is 2.9 million Kyiv residents. The actual number is almost 4 million people. At the same time, according to the General Plan 2020 developed since 1997, the private transport development was expected to provide almost 750 thousand of vehicles by 2020.
But now, according to the National Police, the officially registered number of vehicles in Kyiv is 1.2 million. It is 60% more than expected. That’s the increased load on the road infrastructure. And this is traffic jams, the lack of parking lots and overcrowded public service vehicles.
Kiev urgently requires a new, real and adequate General Plan. The city will not be able to exist with the simultaneous implementation of two concepts and with the hand management. The marathon should be completed.
On July 2, 2008, the roundtable “Professional Licensing of Doctors: Implementation Challenges” was held with the participation of the Deputy Minister of Health Oleksandr Linchevsky, the BRDO Head Oleksiy Honcharuk and with the support of the American Chamber of Commerce.
The main goal of the roundtable was to discuss the elements of the system of professional licensing of doctors: the duration and contents of a transition period, the procedure to form a Licensing Board and other important aspects related to the Concept implementation.
Oleksandr Linchevsky noted that the introduction of professional licensing was not only a new system to enter the profession of medicine, but first of all, it was an important step towards radical changes in the relationship between doctors and the society. The Concept provides for a new approach to the training of new doctors who are just going into medical education and the transition period for those doctors who are already working.
The discussion of the draft Concept involved members of expert groups of the Ministry of Health of Ukraine in various areas.
“The Concept creates new rules of the ‘long’ game. Today, together with the professional community, it is necessary to develop practical mechanisms for achieving the quality of the training and licensing of specialists we seek,” Oleksiy Honcharuk emphasized.
While working in teams, doctors worked out and presented their vision of the principles of the Licensing Board’s formation and work, as well as the stages of the transition period for practicing physicians.
The appointment of members and functions of the Licensing Board, which should become the body that will control the process of issuing, confirming and canceling licenses for medical practice, was actively discussed.
All roundtable participants agreed that the introduction of professional licensing was a highly necessary change that would improve the quality of medical care and the level of trust in the medical profession.
The draft Concept of professional licensing of doctors is still discussed with all interested parties. Based on this discussion, brief summaries will be prepared.
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The BRDO Office and the UUE start a regional analysis of ease of doing business. The second Regional Doing Business rating will be made based on the research results. The research is based on the World Bank’s methodology, which was adapted to the country’s specific regional features.
Regional Doing Business is an annual research assessing a favorable investment climate in all regions of Ukraine as of July 1 of a given year.
“The rating takes into account the components that can actually be influenced and changed by local authorities: obtaining construction permits, registering a land plot, connecting to electricity networks, starting a business and paying local taxes, and a new component is electronic services. The survey will be conducted among representatives of local businesses, and this will allow to assess the real business climate in selected regions and compare them,” the UUE’s Executive Director Kateryna Hlazkova said.
“In addition to general six areas, we will also analyze the implementation of recommendations provided by our experts based on the results of the first Regional Doing Business last year by the regions. These recommendations were provided to all regions and aimed at facilitating a dialogue between the government and businesses, reducing administrative burdens on business and increasing the investment attractiveness of regions. So we will see who followed our advices,” the BRDO Head Oleksiy Honcharuk said.
The overall rating is measured by the sum of points obtained by the region for each of six components.
The maximum amount of points each region can obtain for each component is 100 points. The overall maximum possible amount of points is 600. The results of the rating will be presented in early autumn.
We invite business representatives to join the research and give their feedback on doing business.
Read more about the methodology here:
https://regulation.gov.ua/rating/doing-business20
You can fill out the questionnaire form for the ease of doing business analysis here:
https://goo.gl/forms/rVa9GEk0lSVovfQz2
Registering a land plot https://goo.gl/forms/UPT0Rjqjjkfb2rgq1
Obtaining construction permits https://goo.gl/forms/3WMrRR2nO7iBO2KD3
Starting a business https://goo.gl/forms/oXeqqAkMkHH8LsCg1
Connecting to electricity networks https://goo.gl/forms/tWFUrQVeknra1SWN2
Results of the last year’s rating are available here:
https://regulation.gov.ua/rating/doing-business
On 21.06.2018, the agricultural and land relations Committee of Verkhovna Rada of Ukraine recommended the draft law №5448-d “On main principles and demands of organic production, turnover and labelling of organic products” to the second reading in Verkhovna Rada of Ukraine.
Better regulation delivery Office took part in refinement of draft law №5448-d, which shall become “National organic standard” and implement into national legislation of Ukraine the demands of EU Regulations № 834/2007, 889/2008, 1235/2008.
With the proposals of BRDO: the mechanism of official controls over organic sector was improved; accreditation of certification bodies and their responsibility for non-fulfillment of delegated capacity was improved; export and import of organic products were detailed.
After adopting the draft law and all bylaws the first organic producer may be certified under Ukrainian legislation.
Starting from June 19,2018, the electricity network maps of DTEK Kyiv electricity networks are available online. It simplifies the process of connecting to electricity networks and makes relations between customers and the energy company more transparent and constructive. The project was implemented by DTEK Networks in cooperation with the Ministry of Economic Development and the Better Regulation Delivery Office (BRDO).
In accordance with a new Law of Ukraine “On Electricity Market” and the Code of Distribution Systems, all Ukrainian energy supply companies are required to make the maps of their electricity networks (geoinformation data) available to the public starting from January 1, 2019. DTEK Kyiv electricity networks is one of the first companies in Ukraine that fulfilled this requirement – already in June 2018.
By using the geoinformation system (GIS), customers can obtain online information on the location, voltage levels, the length of overhead transmission lines, addresses and names of transformer substations, the capacity of distribution substations, the distance from a land plot to the point of connection to networks, the connection cost, etc. The GIS functionality will be improved and extended in accordance with the Law and for ease of use by the company’s customers.
“We admit that the connection procedure has been accompanied by a number of complications for many years. Today, the company is working systematically to make it simple and transparent for customers. We have already published a map showing the existing electricity transmission lines and substations in Kyiv along with the data on their capacity. This will allow customers to calculate the connection cost by their own and potential investors to assess the investment attractiveness of facilities. In parallel, we are working on creating the same service for customers in Dnipro and the Dnipropetrovsk region,” the Director General of DTEK Networks Ivan Helyukh commented.
“The disclosure of information about electricity networks of companies makes the monopoly transparent and provides businesses with an opportunity to develop the best possible investment project. I welcome such initiatives and believe that they will help Ukraine to improve its position in the Doing Business rating,” the Deputy Minister of Economic Development and Trade of Ukraine Maksym Nefyodov said.
“For many countries, open data to assess the possibility of connecting to infrastructure networks comes as no surprise. However, in Ukraine, open data on electricity networks has looked like rarely updated lists of transformer substations until quite recently. That is why, thanks to the support of people’s deputies, our proposals on open data were considered at the legislative level, and today, the first electricity supply companies, in particular DTEK Networks, make their information open. This benefits not only consumers, but also the companies that are getting closer to consumers while implementing the best world practices,” the BRDO Head Oleksiy Honcharuk commented.
Representatives of the Ministry of Economic Development and the Better Regulation Delivery Office (BRDO) emphasized that the simplicity and transparency of the conditions to connect to networks were important indicators in assessing the country’s investment attractiveness according to the Doing Business rating.
Last year, Ukraine gained 4 positions in the Doing Business 2018 rating and ranked 76th to some extent due to reducing the cost to connect electrical installations to KYIVENERGO networks (now – DTEK Kyiv electricity networks).
See the maps at http://connect.dtek-kem.com.ua/energymap
Mechanisms for full price monitoring and accountability for violations in pricing also do not work. About 60% of commodity groups that are subject to state price regulation are not monitored, and penalty amounts are inadequately low. For example, Article 165-2 of the Code of Ukraine on Administrative Offences provides for a fine of 85-170 UAH for violation of the procedure for forming and applying prices and tariffs, as well as extra charges and extra payments to them.
The government, business, public and expert community representatives discussed the market issues during the Roundtable “State Price Regulation in Ukraine: pros and cons” on June 19. The event was organized by the BRDO Office with the support of EU4Business/FORBIZ as part of the Public Dialogue #PRODialogue.
BRDO experts conducted a rolling review of the legislation and found out that 228 out of 618 regulatory acts in state price regulation, or 37%, are irrelevant. The price regulation tools such as fixed and marginal prices, levels of trade and supply margins, profitability rates and so on, do not have a kind of application mechanisms while being duplicated, and the legal environment loaded with false information misleads consumers and entrepreneurs about current prices and tariffs.
“Today, state price regulation is ineffective: the government is not able to promptly address price fluctuations and inflation, and losses of economic entities reach billions of hryvnias. The law provides for compensation for the difference between regulated and economically justified prices for them, but in most cases it is not paid, so state benefits are actually provided at the expense of businesses. A new ‘price control’ model will promote price stability, development of competition and mostly market pricing,” the BRDO Market Surveillance sector head Volodymyr Holovatenko said.
For example, the losses of non-residential electricity consumers related to its supply to the population and benefit holders at the regulated tariff amounted to over 142 billion UAH in 2014-2017, while the losses in rail transportation – more than 2.4 billion UAH, and losses for services of acceptance/delivery of periodical publications amounted to 51.9 million UAH.
According to the BRDO study, it makes sense to apply price regulation for 61 areas. In particular, it is always reasonable for areas that have a negative external effect and for markets of activities of natural monopolies, and as for social services – subject to unjustified price fluctuations. As for another 78 areas, it should be cancelled, additionally monitored or the relevant legal acts should be amended. The existing model of ‘administrative state price regulation’ should be reformatted. Its essential components will be:
The event was also attended by the Head of the State Regulatory Service Kseniya Lyapina, the Acting Director General of “Ukrposhta” Ihor Smilyansky, the Executive Director of the International Blazer Foundation Oleh Ustenko, the Director General of the Ukrainian Association of Trade Networks Suppliers Oleksiy Doroshenko, representatives of the CMU Secretariat, the Ministry of Economy, the Ministry of Regional Development, the Ministry of Infrastructure, the Ministry of Social Policy, the State Aviation Service, Ukrzaliznytsya, the National Commission for the State Regulation of Communications and Informatization, Ukrteplocomunenerho, the Telas Ukrainian Communication Operators Association and the Land Union of Ukraine.
The forum was organized by the Eidos Center for Political Studies and Analysis in partnership with the Ministry of Youth and Sports of Ukraine and the Ukrainian Leadership Academy as part of the project “Support to Anti-Corruption Champion Institutions”. The event was attended by active representatives of young people who wanted to become the agents of changes in Ukrainian society. The main focus of the discussion was the leadership in three key areas: state administration, business and the public sector.
“I am glad to be here and see so many young people who have a desire to make changes,” Oleksiy Honcharuk said. “I have worked in business and faced with the fact that no matter how you conducted your business in this country, if the state is barbaric – you will never feel safe. My personal experience is what led me to the public service.”
As for the current state of public services, Oleksiy commented, “It happened that we got a fragment of the old bureaucratic system from the USSR, although a lot of cool people are working in this system. The stereotype that “all civil servants are corruptionists” is ridiculous. The state is me and you, it is an interaction protocol, it is a way, in which we will agree together to establish rules. You now have a fantastic opportunity to join, because there has been no such open government ready to changes yet. Once inside, you are convinced of this. I wish you to get real and look behind the scene – it is incredibly interesting there, and it depends just on you to make this cool state even better.”
Oleksiy gave an advice to those forum’s participants who wanted to work in state bodies: “Trust in your goal and your strengths. Even if everyone around says that nothing will work for you, it does not matter if you believe in yourself. It is just a matter of how much time and efforts you will make to achieve your goal.”
Together with Oleksiy Honcharuk, the panel discussion “Leadership in State Administration” was attended by the Deputy Head of the Presidential Administration Dmytro Shymkiv, the State Secretary of the Cabinet of Ministers of Ukraine Volodymyr Bondarenko and the Deputy Minister of Energy and Coal Industry of Ukraine on European Integration Natalya Boyko.
In Ukraine, 107.6 thousand entrepreneurs use cash registers (PTRs) for payment transactions. It is very costly to purchase and maintain them. But today, the Government approved two important decisions, on which the BRDO Office has worked together with the Ministry of Finance and the Ministry of Economic Development and Trade. These decisions will simplify the registration of PTRs and provide business owners with an opportunity to use smartphones or tablets as cash registers. They can register a PTR in one day. This will reduce business costs by about 30%.
From now on, the procedure of using cash registers is simplified and the process of implementing innovative PTR models is launched. This will allow to introduce the recent developments, significantly expand the list of models and functions available, simplify the conditions for using PTRs and reduce business costs of purchasing and maintaining. Today, there are developments allowing to build fiscal memory on a flash drive and connect to a cell phone through a USB cable.
In addition, the draft resolution “On Amendments to the Maintenance and Repair Procedure for Payment Transaction Recorders” adopted significantly improves the information exchange mechanisms with commissioning, maintenance and repair of PTRs in service centers.
The automation of these procedures will create a convenient environment for cooperation between entrepreneurs and supervisory bodies.
We hope that owners of cash registers will reduce mandatory visits to the SFS significantly, and it will be possible to use cell phones, tablets, laptops and other communication options in a couple of months.
We expect that many sellers of goods will soon have electronic devices, payment transactions will be made on a non-cash basis and cash receipts will be sent to buyers by e-mail or other paperless method.
In Ukraine, bees are killed in great numbers. In this season, the exceptions are only two regions. One of the reasons is a lack of communication between beekeepers and agricultural producers. BRDO experts suggest to make a series of amendments to the beekeeping legislation and introduce a “principle of good neighbourliness”.
These amendments will help prevent bee deaths from poison used on agricultural lands, while the creation of effective mechanisms for collecting evidence will allow affected parties to obtain compensation for losses and protect their interests in the event of the death of bee colonies. The proposed legislative changes will also help simplify the rules for registering bee farms.
The BRDO Agriculture Sector Head Andriy Zablotskyi presented a Roadmap for beekeeping industry reform as part of Agro 2018 on June 7. According to him, non-transparent market rules cause administrative difficulties to open and run a business. SMEs should be in contact with government bodies 26 times to be registered and start functioning properly. At the same time, such regulatory burden does not protect honey producers from the negative impact of the use of plant protection agents by agricultural producers, which leads to mass bee deaths and threatens to destroy such a business.
“Such a number of regulatory tools do not provide businesses with a clear understanding of the rules of conduct in the market and provoke numerous corruption risks. In particular, this concerns the procedure for the use of veterinary and sanitary certificates of bee farms, which are the main documents to have access to the market. Another important step for the industry is the introduction of the insurance coverage for environmental risks by producers of plant protection agents to third parties and the insurance coverage for related activities by beekeepers,” Andriy Zablotskyi said. “Our roadmap proposes amendments to a number of legislative acts that will allow to have stable positive developments, promote the development of SMEs in the regions and establish new export records.”
As a reminder, Ukraine is among the three largest honey exporters in the world. In 2017, the export volumes amounted to 68 thousand tons.
A risk-oriented approach to business inspections conducted by the state is based on the simple truth – it is impossible to inspect everything! Although, by the way, the activity of our state often looks like a heroic attempt to deny this axiom. Moreover, it is not only impossible to inspect all enterprises, but it is also not necessary! Otherwise, a huge amount of resources will be spent in vain without obtaining the expected useful effect.
Consequently, the most important task of each inspection body is to determine the most risky enterprises within its control scope. How does it work now? The CMU approves the risk assessment criteria, on the basis of which business entities are included in one of three groups: of high, medium or low risk. However, it often happens that, for example, 1,000 enterprises are classified as high-risk enterprises, but the relevant inspection body has available resources, which are sufficient to inspect only half of them in a given year. The question is what 500 enterprises of the designated thousand entities “will be lucky” to be included in the annual plan of inspections? In the existing coordinate system, the answer is obvious – a well-known “manual” mode is in use.
What does the BRDO offer? Each inspection body should develop the risk assessment criteria based on a point-rating system in its control area. In this case, each enterprise will get a certain amount of points, after which it will be possible to make a rating (list) of all enterprises in the relevant area. And those who got more points will rank higher in the rating. So, in our example, 500 enterprises will be selected from the top of the rating starting from the first position. We are currently working on relevant legislative changes.
As an additional bonus of this system, it will be possible to quickly find out the level of risk generated by a particular enterprise, since the rating should be available online.
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