On August 22, the roundtable devoted to the improvement of the electricity sector regulation “How to achieve a balance in the energy- and gas supply market” was held in the Sumy Regional State Administration office within the framework of #PRODialogue. During the event, Oleksiy Orzhel, the Head of the Energy Sector at the Better Regulation Delivery Office (BRDO), presented the White Paper on areas of optimization of the retail electricity market regulation.
This document was developed as a result of a comprehensive analysis of market issues based on the Green Paper, its submission to public consultations with representatives of regulatory bodies, businesses and the public and finalization taking into account positions of all market participants during May-July 2017. In such a way, according to the results of the analysis of state goals and relevant regulatory instruments in the sector by using the Rolling Review methodology, 20 regulatory cases were developed and 30 main problems of their application, which lead to failure in achieving regulatory goals in 96% of cases, were identified.
The White Paper includes the concept of regulatory reform in the sector, a list of necessary actions to promote it for the VRU, the Cabinet of Ministers, the Ministry of Energy, the National Commission for State Energy and Public Utilities Regulation and others. In addition, the document contains a series of BRDO proposals to empower the electricity consumers, create competitive principles in the market and increase the efficiency in the sector.
In particular,
The BRDO Office offers an approach based on economic modeling of business processes and the application of regulatory instruments. “To ensure the effective functioning, the market should operate according to system rules and instruments, the impact of which could be mathematically calculated regardless of lobbying preferences. In addition, the driving force, which comes from regions and from the bottom – from consumers and businesses, is crucial for promoting the reform. Therefore, the activity of the Sumy region to find a balance in the energy market is a very positive signal,” the BRDO expert Oleksiy Orzhel said.
In view of the adoption of the Law “On Electricity Market” by the VRU, a significant change in the legislative regulation of the market and the need to implement about 50 subordinate acts that should be fully implemented within 2 years, the approach proposed by the BRDO provides the basis to apply a comprehensive and systematic approach to the development of secondary legislation.
The Head of Sumy Regional State Administration Mykola Klochko, the Head of Sumy Regional State Administration apparatus Dmytro Zhyvytsky, the Chairman of the Board of the PJSC “Sumyoblenergo” Ihor Dyrbavka, the Chairman of the Board of the Association of co-owners of apartment buildings “Sumschyna” Roman Hurchenko and other energy market representatives participated in the event.
On August 22, the roundtable devoted to the improvement of regulation in the electricity- and gas supply market will be held in the Sumy Regional State Administration.
The BRDO Office will present a White Paper on areas of optimization of the retail electricity market regulation developed as a result of a comprehensive analysis of market issues based on the Green Paper, its submission to public consultations with market participants and taking into account positions of regulatory bodies, businesses and the public.
The White Paper includes proposals that will allow to ensure the fastest reform of the retail electricity market in order to provide the maximum consumer empowerment, maximize the efficiency of regulation of the non-competitive sector and create the basis for applying a comprehensive and systematic approach when developing the secondary legislation to the Law “On Electricity Market”.
The event will be attended by:
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Venue: Sumy Regional State Administration Office (Sumy, Nezalezhnosti sq., 2)
Time: 11:00 – 13:00, August 22, 2017
For more information, please contact us by phone:
(0542) 611078, (095) 8390187 – Roman V. Bezus, the specialist in the management of the housing and utility sector, energy saving and fuel and energy complex of the Regional State Administration.
How to prepare political files? What do you need to develop a political concept? What should be a Plan for Policy Implementation? This is just some of topics covered by workshops. There will be lectures and practical classes, team work and practical cases.
“The series of workshops will help future directorate employees understand the internal political processes, exchange experiences and learn how to assess the impact of policies on markets, monitor a situation in their sectors, identify problems and develop alternative solutions,” the BRDO Head Oleksiy Honcharuk said.
This intensive course will run for one and a half months, every Saturday. All participants will receive a certificate upon the completion of trainings. The next workshop will start this coming autumn. Wait for it!
Source: 24tv.ua.
The government stated that they are ready to introduce a new 4G mobile Internet standard. The website “24” found out what should be done and what has already been done in this area.
On August 9, the Cabinet of Ministers voted for the introduction of 4G in Ukraine. They promise to do everything in a quick manner. Mobile operators also confirmed that they were ready.
Oleksandr Kubrakov, the head of the IT and Telecom sector at the Better Regulation Delivery Office explained in a comment to the website “24” that there were several aspects that should be considered in the introduction of the 4G standard: legal aspects, regulation and technical training. But first, let’s consider the main issue.
Differences between 3G and 4G
You may ask about the difference. We explain: it is the speed. In the theory, the 4G mobile internet is 10 times faster than the 3G one. However, the experts say that in practice, the difference will be just in 4-5 times, which, actually, is still a lot.
If more clearly, the 4G will allow, in particular, to play online games of any complexity and use the multimedia Internet content of Full-HD quality with no hassles.
Another example to compare the speed: the network bandwidth for 3G is 3 Mbit/s for a fixed subscriber, and 384 Kbit/s – for mobile subscribers (in transport), as for 4G, it will provide 100 Mbit/s for mobile users and 1 Gb/s for the fixed ones.
This issue is clear, let’s go further.
What is required of mobile operators?
Oleksandr Kubrakov said that a lot of work has already been done. When operators launched the 3G standard, they have installed many fiber optic lines, so they have the more or less equipped core network. When they placed the 3G equipment, a considerable amount of base stations with the 4G-ready equipment has appeared. So, when operators get licenses, certain legal aspects are resolved and everything is agreed, they can quickly introduce the 4G in many regions.
“I do not say that they do not need to invest in something else, because they need. But there are certain facilities with the necessary equipment for 4G support. At a certain level, they will need some rebooting, additional loading and purchasing some software – and go for it. Of course, they will need to install the install completely new equipment in many facilities, and it will require some time,” the expert explains.
He reminded that we have seen the implementation of 3G, it didn’t appear everywhere at once, but city by city. Similarly, it is likely to be with 4G.
What is required of citizens?
To have appropriate gadgets that support the 4G standard. According to various estimates, on average 30-40% of subscribers in Ukraine (various operators have different figures) use smartphones. In big cities, the proportion of smartphones is even higher. All of them support 3G, and many of them – even the 4G.
“So, we can say that already many hundreds of thousands of people will be able to use the 4G,” Kubrakov said.
What is required of the state?
To provide mobile operators with licenses, distribute frequencies and sell them at the auction to these operators.
It’s already known that the fourth generation mobile Internet will work in frequency bands of 1800 and 2600 MHZ. In this case, the redistribution of the first frequencies still requires to be considered, but 2600-frequencies are already free. Moreover, the state budget will receive a minimum of 6.3 billion hryvnas from the licenses for Ukrainian mobile operators.
Introduction opportunities
Oleksandr Kubrakov expressed his hope that the tender would be held by the end of this year and operators could get frequencies to introduce the 4G.
“We have done a lot of work, cooperated with a consulting company, the market, the regulator and operators. We have developed a plan to use the frequency resource, choose frequencies for different technologies. The auction will be held soon and operators who received the frequencies will be able to introduce the 4G,” he said.
The government supports the introduction of the new standard, and the Prime Minister’s statement confirms this readiness. There were many nuances and questions why just these frequencies. Now, they are resolved.
“But I would not say that now it is just a matter of technologies. We have been introducing the 3G for several times: it was first announced in 2007, and then in 2009, but it was launched inly in 2014. I hope that this will not happen now, because we can not compare the situations now and then. So, let’s wait,” the expert summed up.
By Yanina Tkachuk
Source: biz.nv.ua.
Why does the state delay in providing its citizens with equal access to the Internet?
The President signed the law on access to construction, transport and electricity facilities to develop telecommunications networks in February, and it was published in March. And this was a victory. We took a big step to overcome the digital divide in our country.
Ukraine still takes one of the last places in terms of the availability of broadband Internet access (BBA) for the population. The level of its use in Ukraine is much lower than in the neighboring countries. For example, according to the regulator (the National Commission for the State Regulation of Communications and Informatization – NCCIR), the index was only 11.8 connections per 100 people, in Poland – 19, in Belarus – 31, in Germany – 37.
The saddest thing in our situation is that the number of fixed BBA subscribers in Ukraine is growing very slowly. According to the International Telecommunication Union, the number of fixed BBA connections worldwide increased by 11.35% in 2016/2015, while the growth index in Ukraine in the 1st quarter of 2017 increased by only 3.34% compared to the 1st quarter of 2016 (from 4898 ths. subscribers to 5062 ths.). With such a pace, technology gaps will only deepen, and Ukraine will still be among the Third World countries.
And while it is possible to get BBA with no hassles in large cities, most of people living in rural areas are deprived of this basic service. That is, at least one third of the population have no opportunity to connect to the fixed BBA at all.
Of course, everything is far from ideal in urban areas as well. There are problems with asset holders, certain settlements and even with buildings. Fortunately, those days when alternative providers have been “pushed out” from a city while providing one desired provider with preferences are over, but such “selection” still takes place at the level of buildings. As a result – one provider have too high prices for its services along with questionable quality. Why are other players not allowed? The association of co-owners of apartment buildings or the HMO made this decision. There are no arguments. As well as there are no explanations (with calculations) from natural monopolists, why a provider should pay 1,000 hryvnas for the right to place his equipment on one transmission pylons in a city with a million-plus population. Or why there is such a difference in prices for placing equipment on transmission pylons in neighboring regions: 2.5 hryvnas in Kherson region and 5.1 hryvnas in Odesa region.
The adopted law prevents these manipulations, obliges to provide equal access to everyone who wants to. This will increase the competition and improve the quality of services. The law stipulates the maximum prices for the development and issuance of technical specifications for access (0.5 of minimum wage (MW), now 1,600 hryvnas). And monthly fees for access to infrastructure elements (for example, 0.3% of MW per transmission pylon). As you can see, it will be impossible to manipulate when determining the size of the fee for access, namely, 1,000 hryvnas for access to one pylon, and usually it is required to have the access to not less than one hundred pylons, because 1,600 hryvnas is the maximum single fee for the access to the infrastructure regardless of whether there are 10 or 300 pylons.
However, to make this law working, the Ministry of Infrastructure, the Ministry of Regional Development, the NEURC and the NCCIR should develop the Rules of access to infrastructure and Methods of charging fees. The Rules should be approved by the Cabinet of Ministers after their approval, and the Methods – at the level of ministries and agencies.
Given the fact that the law was published in early March, the Rules and Methods had to be approved in the early days of June. But… this, of course, did not happen. Deadlines of approval of these regulatory documents have been extended several times, and, unfortunately, there is a high probability that they will be extended in the future. After all, the officials have the low interest in the earliest adoption of these documents.
With the purpose to accelerate the introduction of the law, the BRDO developed seven of ten required regulatory acts, finalized and agreed them with leading telecommunication associations such as Ukrainian Association of communication providers “Telas”, the Internet Association of Ukraine and the Association “Telecommunication Chamber of Ukraine”, and sent these documents to all interested central executive bodies in May-June. Some documents, such as the Rules for providing access to the infrastructure of construction facilities, the Rules of providing access to the infrastructure of house distribution networks and the Rules of providing access to the infrastructure of electricity facilities are already being prepared to be published on the websites of ministries for their public discussion.
At the same time, the Methods of charging fees (for all types of infrastructures) as well as the Rules of providing access to the transport infrastructure continue to be studied and agreed by subdivisions of different ministries. That is, their adoption is delayed for no clear reasons.
It should be noted that the bureaucratic procedure has such specific features that if we want to remove the barriers for the BBA development in our country next year, the subordinate acts should pass the level of subdivisions of central executive bodies and be published on their websites for public discussions in August. After all, all documents should be approved by the NCCIR, and the Rules – also by the State Special Communications Service. In addition, all regulatory acts should be agreed upon by the State Regulatory Service and the Ministry of Justice, and only then they will be approved by the Cabinet of Ministers (the Rules) and different ministries (the Methods).
We hope that the reason of the current delay in ministries is the holiday season, and that we will soon see the enthusiasm of officials, and all draft documents will be presented for public discussion by mid-August. Otherwise, there is a picture that everyone – from power engineering specialists and transport workers to the HMO director – are interested in preserving the non-transparent system with a wide range of illegal providers, high tariffs and the low-quality Internet for the population.
Source: Ekonomichna Pravda.
Why do we need the trust property as a way to secure performance of obligations
If people didn’t trust each other, they would have to live within their means.
Herbert V. Prochnow
One of the fundamental elements of the market economy and the legal system is the ancient Roman principle Pacta sunt servanda (agreements should be performed).
However, in Ukrainian realities, a lack of business culture, the specific experience of primary capital accumulation and a range of devaluations helped the national business community to develop its own maxima: “Only the cowards repay”.
As a result, we obtained overload and inefficient state enforcement services along with the wide use of unofficial means to collect debts, which are close to break the law or even step beyond its bounds.
At the same time, the laws regulating the most common way to secure the performance of obligations – a pledge – proved to be too inefficient.
If you wish to have a general idea of how pledge holders get nothing, read the draft law #2286a rejected by the Verkhovna Rada of Ukraine as an unsuccessful attempt to “fill” some of gaps in the law on pledge.
Are there any options to solve the problem of non-performance of obligations? It seems like that.
The full implementation of a system of private enforcement agencies as an alternative and a competitor of the slow-moving state executive service, the reform of bankruptcy legislation and the improvement of the law on real estate mortgage, probably, can help.
But even the reforms described above may not be enough. Therefore, another way to address this problem may well be the introduction of trust property as a way to secure the performance of obligations, which is an alternative to the pledge. This is a mechanism known in the West as fiduciary transfer of title. According to it, a debtor transfers some of his property to the creditor’s ownership by analogy with the case of transferring the property to a creditor as a pledge to secure the performance of obligations.
The creditor can sell the transferred property only if the debtor fails to perform his obligations, and the extra amount of proceeds should be returned to the debtor.
At first glance, the described mechanism seems to be too similar with a pledge. The only exception is that the creditor has the ownership right for this property.
This difference is a main advantage of the trust property concept over the pledge – as a rule, creditors will not need to apply to the court or to the executive service in order to enforce the property transferred to the trust ownership. He can do it independently on his own behalf.
In this case, the debtor will be deprived of the possibility to apply most of the existing mechanisms that would block the enforcement, because he will not have the ownership right for such property.
However, this security mechanism also has its weak points. The main of them is the creditor’s ownership right. After all, it will be difficult for the debtor to agree to give away his property psychologically.
Moreover, the creditor’s financial position or his reputation may be not very attractive. In addition, the balance of interests is clearly unequal in these relations – the creditor has significant advantages and a potential opportunity to abuse his rights.
That is why the trustee’s status should be regulated very carefully, and the use of trust property in practice will naturally be limited to cases, when the debtor has no other opportunity to obtain a loan.
Probably, most lawyers reading this text understood right from the start: trust property as a way of security is a result of the Anglo-Saxon system of law. Therefore, many of them doubted the possibility of its implementation in the Ukrainian legislation.
You can agree with such doubts, but the fact that EU countries with the continental legal system integrated the transfer of title into their legislation with no hassles offers some room for optimism.
Moreover, according to the Directive 2002/47/EU, every EU Member State should implement the possibility of transferring the property into trust ownership as a way of security. What is more interesting, Ukraine committed to implement the Directive mentioned above under the provisions of the Association Agreement with the European Union.
That is why the introduction of trust property has become one of the important parts of the comprehensive draft law #6540 developed by government and BRDO experts and aimed to significantly improve the investment climate of our country.
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Will it be easy to implement the trust property concept in Ukraine? What can said for certain is that it won’t. The introduction of a new method of securing an obligation will require to amend the tax legislation, accounting and bank reservation standards.
In addition, we will have to develop a judicial practice from a scratch. Is it worth these efforts? It seems like that. But the cornerstone of this should be the effective and careful work of the parliament – since too interesting and serious tool is planned to be introduced.
Source: delo.ua.
The law on access to infrastructure came into force already two months ago. This document puts things in order when it comes to the relationship between operators and providers on the one hand and the infrastructure owners (buildings or transmission towers) on another hand. To make this law working, the government should adopt several subordinate acts by June. However, these documents have been adopted yet because of the opposition of two agencies.
There is one comprehensive problem, which has been hindering the development of fixed broadband Internet access (BBA) in Ukraine for many years – the access to infrastructure. The construction of a telecommunication network requires using the existing infrastructure: electricity supply pylons, cable drainage, buildings. However, until recently, there was no clear regulation of the conditions, under which owners of infrastructure facilities should provide telecommunications operators with the access to them.
Operators and providers have often faced with denials of access to infrastructure or with too high prices. This aspect negatively affected the development of the BBA, since a particular infrastructure facility is often non-alternative to build a network. These problems should be resolved by the law on access to infrastructure, which came into force on June 4,2017.
However, the implementation of adopted provisions requires the approval of subordinate acts – the Rules and Methods of charging fees for access to each type of infrastructure. Specific working groups have been created in the relevant ministries with a purpose of their approval. But the process is much longer than expected – they should be approved a few months ago. Hleb Schehol, the lawyer of the IT and Telecom sector at the Better Regulation Delivery Office (BRDO) told Delo.UA why this happened.
How was the law on access to infrastructure perceived by the telecom market? Were there any provisions that caused dissatisfaction of providers?
The law was developed by the relevant committee of the Verkhovna Rada, and it took into account most of the wishes of telecommunications operators. Associations and businesses support the innovations introduced by the law and look forward to its implementation.
And how was this law perceived by infrastructure owners?
Any business, and especially the Ukrainian one, has a negative attitude to the government’s intervention into its own activities. Monopolists try to avoid the state intervention, and the infrastructure owners, naturally, are the monopolists, some of them – at the level of apartment buildings and others – at the city or regional level.
Therefore, they give a hostile reception virtually to all restrictions imposed by the law.
The law obliges to provide economically feasible and equal access conditions for all participants that restricts the possibilities of monopolists to use their position for abuses.
The Parliament made arguments that the law on access to infrastructure would allow the Internet providers to improve the quality of network coverage, develop business in the regions, ensure healthy competition and even reduce the cost of services. On the contrary, providers voiced the views that price ceilings established by the law were too high and end consumers would still pay more. Who of them is right?
Today it is difficult to determine whether the tariffs are set too high or not: infrastructure owners refused to justify their own tariffs before the law entered into force. The adoption of tariff calculation methods is precisely aimed at improving this situation: owners will be obliged to disclose the costs associated with the additional load from telecommunication networks, and the tariffs will recover these expenses with a certain profit margin. Indeed, this will lower the network construction costs, which should make it economically viable to provide broadband Internet access services in low density areas. This, accordingly, will promote the development in regions.
Equal access conditions will also contribute to increased competition for sure. As for the growth or reduction of prices for end consumers: of course, they should not expect the growth since the law doesn’t oblige infrastructure owners to raise prices if they are lower than ceiling tariffs, only to reduce these ones, which are higher.
At the same time, of course, it is unlikely that providers will reduce existing tariffs for subscribers. However, they will have some “margin of safety” in case of rising expenses due to inflation, for example, that will allow them to keep stable tariffs for a longer time.
How did they get access to various types of infrastructure earlier? Who set the prices for specific infrastructure facilities?
The access to infrastructure facilities has not been regulated prior the Law (with the exception of access to utility tunnels owned by operators / telecommunication providers).
The infrastructure owners set the fees for access as they wish.
For example, in this July, the PUC “Kyivmisksvitlo” required from telecommunications providers almost 300 thousand hryvnas (it is about 1 thousand hryvnas for connection to one transmission tower) for connection to its transmission towers at a site of 3 km.
What is specifically provided for in the draft Rules and Methods of charging fees for access to each type of infrastructure?
For example, the Rules will oblige owners to respond to requests in a clearly defined timeframe instead of delaying answers for “wrong” operators for half a year. In addition, the owners will have the right to refuse access only if there are no technical capabilities, which can be checked with the help of relevant expert organizations.
Previously, you could obtain a refusal without any explanation and justification.
Another document – the Methods – defines a mechanism to calculate and set the fees for access to infrastructure elements. That is, it indicates what expenses the owners can include into the calculation of the access cost and obliges them to show these calculations. Thus, it will be possible to estimate whether the ceiling tariffs are set too high or they are underestimated and to come to the economically justified prices. At the same time, the price calculated according to these methods will be the same for all participants that will develop the competition.
Why do the Ministry of Regional Development and the Ministry of Energy delay this process?
They start delaying already in the spring – the first working groups were created only in mid-May, some of them – even in late June. The law was published on March 4 and provided for the adoption of acts by June 4. Despite the regular meetings of working groups, the discussion of draft resolutions takes too much time since they discuss almost every point.
The representatives of companies that own infrastructure facilities and relevant ministries complain that the law is imperfect, it does not take into account their interests (although representatives of all interested ministries participated in the working group involved in drafting the law and the document itself was approved by the relevant ministries).
To tell the truth, the interest of infrastructure owners is in the possibility to independently approve decisions on access of a business entity to their own infrastructure and independently set the fee for access to this infrastructure.
For example, the representatives of infrastructure owners, which opinions are carefully considered by the relevant bodies, promote the following formulation of rules and methods, according to which the technical specifications should be issued for each infrastructure element. That is, a one-time fee for access to transmission towers to provide a network within one residential quarter can be more than 80 thousand hryvnas. If we support such a formulation, the price for BBA to the Internet will surely increase by times. Thus, we will preserve the letter of the law, but completely discredit the spirit of the law.
Did you contact Oleksandr Danchenko, who heads the relevant parliamentary committee, and the deputy head of the Presidential Administration Dmytro Shymkiv regarding delaying the adoption of subordinate acts, without which the changes will not work?
The implementation of the law on the development of rules and methods by the Cabinet of Ministers and central executive bodies was considered at the regular meeting of Danchenko’s committee on June 21. This revealed the problems of communication within the ministries: for example, representatives of the Ministry of Infrastructure understood the need to develop the relevant acts only during this meeting, although the BRDO representatives informed the ministry about their readiness to provide the results of their work and participate in the relevant working group a month before.
The committee’s meeting gave some impetus to the process of drafting regulations, but no document, even the ones approved by the working group, has not been proposed for public discussion, which should last at least a month before the adoption of the act, yet.
Interviewed by Irina Hudz
The BRDO Office and the Union of Ukrainian Entrepreneurs (SUP) launched the study “Regional Doing Business”, the main purpose of which is a systematic analysis of the business climate for small, medium and large businesses in all regions of Ukraine and in Kyiv.
The first stage of the study was a systematic analysis of local taxes and fees, and the main sources of information – decisions of city councils in regional centers and in Kyiv. There is no need to prove that the higher the taxes, the worse the conditions for doing business are. However, the smaller the taxes, the less number of administrative services for citizens and enterprises the local government bodies can provide. Therefore, each region chooses its own strategy creating a unique tax climate for entrepreneurs, which is the subject of study at this stage.
They analyzed six main local taxes, the rate of which can be changed by local authorities within limits prescribed by the state, because these revenues come to the local budget, particularly:
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The analysis was conducted on the basis of decisions of local councils published on websites of the relevant bodies as public data.
The general trends in the country indicate a lack of dynamics of local authority responses to changes in the government policy. In particular:
In general, the situation with taxes shows lame tries of local authorities to improve the business climate in the region. The negative factors that directly lead to this are: the obsolete system of taxation, the centralized definition of basic rates and their range at the level of the entire state. This reduces the desire of local authorities to deal with this issue and try to establish a dialogue to improve the business climate in the region and increase its investment attractiveness.
You can see the final results of the study in early September this year.
The next stage will be the interviewing of entrepreneurs in all regions of Ukraine and in Kyiv in four areas:
You can join the study by filling out forms following the above link right now. The principle of filling out the forms: one form – one regional center, where the business is conducted. If you have any questions, you can contact Anton Maleyev, the analyst of the Better Regulation Delivery Office who coordinates this study – 095 708 46 28 or by e-mail – [email protected].
Source: biz.nv.ua.
In 2017, the Ukraine’s investment attractiveness index reached its peak in the last six years – 3.15 points on a five-point scale.
The European Business Association made this conclusion after a survey conducted among the directors of142 largest international and Ukrainian companies.
At the same time, the last year’s index was 2.88 points in June. The last time the index was more than 3 points only at the end of 2011.
The survey results showed that businessmen still have the negative mood, but it is less strong than before.
The NV Business interviewed key experts on aspects that allowed Ukraine to increase its investment attractiveness, what it means for businesses and how to improve the investment climate in the country.
Oleksiy Honcharuk, the Head of the Better Regulation Delivery Office (BRDO):
If we talk about climate in general, I have no euphoria or some sort of impression that something has changed a lot. But this situation is really improving step by step, government’s approaches are being improved right now. There are such aspects as automatic VAT refunds. We greatly improved the inspection system last year. And we really hope that a fundamentally new, fully online system of inspections will start working in the autumn.
In addition, in 2017, we should improve our positions in the Doing Business rating, because we have implemented many targeted initiatives.
Therefore, my overall conclusion: the situation becomes better, but not much. The business can really feel it only when we restart lending, finally free up the land and natural resources and allow them to be a full part of public turnover. Because now, even if you own a quarry, you can not attract credit resources to place a new line there. Because the state still keeps your hands tied with the help of permits.
To allow business to develop successfully, it is necessary to fully switch to market relations. The land should be a commodity. And procedures of using natural resources should be established in such a way that there is a particular owner, who is responsible for the quality of their use. And at the same time, he could fully dispose of them.
Today, three things are important for foreign investors. The first one is the understanding that if you freely invested your money, you can also freely take them back. So that you are not afraid that someone will take them away, nationalize or simply freeze them.
The second aspect is the understanding of the existing rules. That is, how to behave in this country so that you will have no problems.
And the third one is the stability. This is what they want. Stable predictable rules and free flows of capital that will allow them to be mobile. If I invested some money today, I have the opportunity to withdraw the received profit without any problems. These are three key things that foreign investors need today.
The broadband Internet access (BBA) is needed to build a modern economy. At the same time, there is one problem, which has been hindering the development of fixed BBA in Ukraine for many years. BRDO IT & Telecom experts have developed 7 of 10 regulatory acts necessary for the free access of operators and providers to infrastructural facilities.
The construction of a telecommunication network requires using the existing infrastructure: electricity supply pylons, cable drainage, tunnels, buildings and so on. However, until recently, there was no clear regulation of the conditions, under which infrastructure facilities should provide telecommunications operators with the access to them. Operators and providers have often faced with denials of access to infrastructure or too high prices. This aspect negatively affected the development of the BBA, since a particular infrastructure facility is often non-alternative to build a network. Operators and telecommunication providers could not develop their own telecommunication networks, provide access to the Internet in rural areas and in “deprived” areas.
To resolve this problem, the Law No.1834-VIII, which came into force on June 4, 2017, was adopted. It defines the conditions for providing access to infrastructure facilities. But the implementation of provisions of this Law requires the approval of the Rules of access and Methods of charging fees for access to each type of infrastructure.
BRDO experts together with representatives of leading telecommunication associations such as the Ukrainian Association of communication providers “Telas”, the Internet Association of Ukraine and the Association “Telecommunication Chamber of Ukraine” have been working in the working groups of ministries related to the issue of access to infrastructure since May, and they have already developed almost all necessary draft regulatory acts. Currently, some of these documents are already being prepared for publishing on websites of relevant central executive bodies with the aim of their further public discussion. We hope that the developed Rules and Methods will be approved and will come into force in the near future.
This will make it impossible that, for example, an operator of telecommunications should pay 2.5 hryvnas to place equipment on electricity supply pylons in the Kherson region, and in the neighboring Odessa – 5.1 hryvnas. In addition, it will increase the competition and improve the quality of services.
The adoption of these Rules and Methods will put an end to the problem that hindered the development of broadband access to the Internet and will promote the development of the telecommunications market and related sectors of the Ukrainian economy.
Only 47% of Ukrainian ministries and agencies are able to conduct a public dialogue.
On July 25, BRDO presented the rating of ministries and agencies “Capacity for Dialogue”. It outlines the results of an analysis of how central executive bodies fulfill the requirements for the transparency and availability of information on their regulatory activities. According to this study, they fulfill, on average, only 47% of these requirements.
The rating is set on the basis of the analysis of 51 central executive bodies as of July 1, 2017.
According to the results of the “Capacity for Dialogue” study, the Ministry of Regional Development with 55 out of points 58 points and the State Audit Service with 49 points are at the top of the rating.
Outsiders were the State Space Agency of Ukraine with 23 points, the Ministry of Youth and Sports with 24 points and the Ministry of Justice – 26 points.
“The regulation is impossible without consulting with the public and businesses. Slim excuses such as “our website has broken”, “e-mail is not working” and “this employee took a vacation” are not accepted. Imagine: you come to work on January 2, and it turns out that the rules were changed on January 1. You had a New Year’s Eve to adapt to them. It is important for businesses to be informed about the plans of ministries and agencies more than once a year, keep abreast, respond to proposals online, adapt to them and fully participate in the dialogue,” Ihor Lavrynenko, the leading analyst at BRDO, said.
“Ministries and agencies should understand that if consultation procedures are not followed, a regulatory act can be abolished. The advice is simple – to comply with the Ukrainian legislation,” Maksym Malashkin emphasized and went on to say that the right attitude is to initiate a comprehensive analysis of the regulation by markets in the format of Green and White Papers, as the BRDO Office was currently doing. “Then it is needed to hold a public discussion of these studies at roundtables involving various state bodies, businesses and experts. The Ministry of Regional Development is already actively involved in this format,” the State Secretary of the Minister for Regional Development Maksym Malashkin said.
The BRDO prepares Green Papers – analytical documents on regulatory issues in Ukrainian markets. The White Papers that will provide the basis of amednments to the legislation will be prepared on their basis. You can leave your comments and suggestions following this link: regulation.gov.ua.
“State institutions declare that they are ready to discuss their decisions with business, but often it’s more like a monologue of authorities. We do not know whether our recommendations are noticed and taken into account. But we are the ultimate beneficiaries of regulatory changes, we know the situation from the inside and fill the budget of the country. The companies, which are the members of the “Union of Ukrainian Entrepreneurs” (SUP) paid 14 billion hryvnas as taxes in 2015-2016. The government should be business-oriented, just then we can talk about the economic development of Ukraine,” the Executive Director of the Union of Ukrainian Entrepreneurs (SUP) Kateryna Glazkova said.
Many agencies consider fulfilling the requirements as a formality, they publish important documents in PDF, but it is impossible to find and work with such documents. The ministries do not inform the public about their plans, and amend regulatory acts and make them retroactive. Some institutions simply do not consider their regulatory acts as the regulatory ones. There is also a problem of interaction between the bodies, which shape and implement the policy. For example, the archive service is ready for dialogue, but the ministry does not do anything for 3-5 months, for a year. It happens and vice versa.
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“The government is taking steps aimed at improving communication: it informs about draft decisions, clarifies them. For this purpose, a single information platform – the Common Voice was created. Consultations are held, and today they have the obligation to report whether the public proposals have been taken into account. Accompanying documents should be clear and written in accessible language,” the Deputy Director of the Department of Information and Public Communications, Head of the Department for the Civil Society Development and Public Communications Natalya Oksha said.
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“In order to increase the protection of citizens and business representatives when adopting the regulatory acts, it is important to adopt the draft Law on Public Consultations and the draft Law on Administrative Procedures. In addition, it is needed to approve the obligatory responsibility for non-compliance with consultation procedures,” the expert of the Centre of Policy and Legal Reform Yevgen Shkolny said.
The analysis of ministries’ transparency was assessed by four markers:
Next, the BRDO will prepare analytical papers and explanatory letters on how state bodies can better communicate their regulatory activities.
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Source: biz.nv.ua.
When leaving the house, you will check only whether you took your mobile phone. You can do well without your wallet.
The Cabinet of Ministers has removed the barriers to the development of the mobile payments market since July 12. The Better Regulation Delivery Office (BRDO) estimated that the volume of this market would reach 17 billion hryvnas in two years.
In half the countries worldwide, a mobile account can be used to pay for goods and services, as well as for money transfers. For example, in Prague, it is possible to pay a subway fare via SMS. In Singapore, you can pay for Apple services without a bank card as well – it is enough to have a mobile phone. And so on.
In Ukraine, this sector is not developed at all not because the operators do not want, but due to regulatory barriers. Until recently, due to imperfect legislation, funds from a mobile account could be actually used only for communication services.
There were the following reasons for this:
In fact, these two provisions (subordinate) blocked the appearance of the entire market.
On July 4, 2017, the government adopted Resolution No.462, which removed these two barriers (came into legal force on July 12).
In the coming months, the following possibilities will become a reality for Ukrainians:
It’s only a matter of time when mobile operators will set up appropriate processes. And they promise to do it as soon as possible. Moreover, they are interested in this, because as a result, they will increase the average income per subscriber (which is very low in Ukraine).
It should also be emphasized that mobile payments will be available to subscribers without smartphones. It will be possible to pay without a wallet – just via SMS or USSD by using a regular phone even in a remote village without 3G and a smartphone.
This is especially important for the development of cashless payments in Ukraine, since there are only 11 thousand bank branches for almost 30 thousand settlements in Ukraine.
Mobile payments will be useful for many Ukrainians, as in Ukraine, only 53% of the population have a bank account (this rate is 78% in neighboring Poland). They will have another convenient method of payments.
The BRDO Office together with representatives of the Ministry of Economic Development and Trade has prepared the draft resolution No.462. Following the adoption of the Resolution, a roundtable with the participation of representatives of three operators, the Ministry of Economic Development, the NBU, the Regulatory Service, etc. was held.
According to the discussion’s results, the following regulatory issues, which should be addressed for the sustainable development of the mobile payments market, were identified:
When these issues are resolved, it will allow us to talk not only about the payments market, but about the integrated market of mobile financial services (which includes lending and so on).
On Tuesday, July 25, 2017 at 10:30, the presentation of the analytical study of the ability of central executive bodies to engage in public dialogue, on the basis of which the rating of ministries and agencies “Capacity for Dialogue” will be formed, will be held.
The study is focused on how Ukrainian ministries comply with the requirements for the openness and accessibility of information on their regulatory activities. Based on the study results, it was concluded that they fulfill, on average, only 47% of these requirements.
Presentation participants:
Venue: Ukraine crisis media center (Ukrainian House, 2 Khreshchatyk Street).
Admission by editorial cards only.
We invite you to participate in the event!
Source: delo.ua.
Seals on documents are no longer required for entrepreneurs. From now on, officials, tax authorities and bankers will be administratively sanctioned for requirements to certify contracts with a seal.
In March, the Verkhovna Rada supported the draft law No.4194, which abolishes mandatory seals of enterprises on official documents. In April, the President signed this law, and on April 19, it was published officially.
At the same time, in 2014, the Economic and Civil Codes were amended, and, accordingly, to have a seal became the right for entrepreneurs instead of being their obligation. That means that parties to a contract obtained the right to decide whether the contract should be sealed or it will be enough to sign it by authorized persons.
“Despite the legislative changes of 2014, in practice, the very few contracts between business entities were concluded without sealing the signatures,” the senior associate of the LLP “Alekseyev, Boyarchukov and partners” Inna Rudnyk says. “This is due, in particular, to the provisions of other legal acts. In most cases, fiscal authorities, banking institutions and others didn’t accept documents without any seal. It was easier for parties to seal and protect themselves from possible risks. As a result, the simplification of procedures on starting and doing business was exclusively declarative.”
In addition, despite the fact that since 2014 the use of seals has become voluntary, the Code of Administrative Offenses of Ukraine stipulated administrative sanctions for “violation of rules on producing and procedures on registering and storing seals and stamps”.
What is changing?
A business entity still has the right to use the seal in own activities, but its use is not mandatory. Whether documents contain a company’s seal or not – it does not create legal consequences.
“The loss of legal validity doesn’t imply a ban on the use of seals. Entrepreneurs will still be able to use the seals, but from a legal point of view, the seal will perform exclusively decorative functions,” the Deputy Head of the Better Regulation Delivery Office (BRDO) Denis Malyuska explains.
No state body or local government body can require a company’s seal (or entrepreneur’s seal) on a document submitted to it. This applies even to the cases, when the seals are stipulated by delegated acts (for example, by CMU’s Resolutions).
A copy of a document submitted by an enterprise to state bodies or local government bodies is considered to be certified in accordance with the established procedure if it has the signature of an authorized person or the personal signature of an individual entrepreneur. Officials do not have the right to demand notarization of a document’s copy (unless such a requirement is established by law).
However, the legislative changes did not affect the status of seals of persons, who are not considered to be the business entities (for example, state government and local government bodies, notaries, court-appointed administrators, etc.). “Therefore, these persons continue to use the seals without any changes,” Denis Malyuska says.
What are the sanctions for demanding requiring seals?
Officials can not continue to require entrepreneurs to have a seal on documents. Otherwise, officials can be brought to administrative responsibility. According to the law, a fine is from 50 to 100 non-taxable minimum incomes, that is, from 850 to 1,700 hryvnas.
“If any government agency refuses to accept a document without a seal from entrepreneurs, they have the right to file a claim in court to bring this agency to liability. It should be noted that the fine is paid to the state. And if this unjustified refusal caused you damages, you should initiate a separate lawsuit to recover them from officials,” Rudnyk explains.
Will there be any problems if documents do not have a seal?
“In many countries, seals have not been used for a long time,” the junior lawyer of the Investment Service Ukraine company Maksym Pirogov explains to Delo.UA. “When concluding external economic contracts, foreign counterparties are often surprised that contacts have seals. In Ukraine, nobody will take seriously contracts or warrants of attorney, which are not certified by seals,” Pirogov says.
According to him, it will be possible to persuade a counterpart company that the seal is not necessary without special problems. But it will be difficult to prove this fact to the state bodies. “You can appeal the decision on refusing to accept documents in court. But it is a waste of time and additional funds. It is much easier for enterprises to buy a seal and use it than to prove something to public servants,” the lawyer says. He assures that it is necessary to develop a new way of certifying documents for state bodies.
To protect yourself from fraud activities or raider attacks, the BRDO expert Denis Mayuska advises to require signing a contract by a counterpart in your presence when concluding important contracts, and signatures on such contracts should be notarized. In addition, the expert recommends to thoroughly study the data of the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Associations.
Experts of the BRDO IT and Telecom sector met with representatives of one of the largest European telecommunications services providers VEON Ltd having its headquarter in Amsterdam, the Netherlands: Tomas Lamanauskas – the Group Director Public Policy and the representative of the Kyivstar mobile operator, Kyiv, Ukraine: Vladyslav Radysh, the Advisor to the President of Kyivstar.
During the meeting, they discussed the urgent issues on removing regulatory barriers to introduce the latest digital services in Ukraine. In addition, Veon representatives admitted the effectiveness of BRDO’s cooperation with participants of the mobile service market. After all, the regulatory rules have been significantly improved and the barriers to launch mobile payments in Ukraine have been removed in a short period of time.