The Ministry of Regional Construction (Minregionbud), BRDO and IDLO initiate the restructuring of activities of the Science and Technology Council at the Ministry of Regional Development, Construction and Housing and Communal Services of Ukraine.
In Ukraine, the system of building rules and standards has been “dusted” long ago. However, non-fulfillment of these requirements is also a way to nowhere. Rules and standards are a compulsory aspect. Except for cases when the Science and Technology Council of the Minregionbud approves the deviations from standards.
The Council is still almost a “state in the state”. In the 21st century, which is the era of open data and maximum publicity, this body is still a closed structure hidden behind seven seals. This status is determined by the Regulations.
The Minregionbud, BRDO and IDLO initiate the restructuring of activities of the Science and Technology Council in terms of its openness and transparency.
A draft order with amendments to the Regulations on the Science and Technology Council of the Ministry of Regional Development, Construction and Housing and Communal Services of Ukraine has been already developed at the initiative of the Ministry and with the involvement of BRDO and IDLO experts.
Amendments to the Regulations provide for:
These amendments mean not only “cosmetic” clarifications on the activities of the Council, but also the mandatory inclusion of representatives of anti-corruption public associations, expert organizations, basic organizations of the Ministry of Regional Development for scientific and technical activities in construction, self-regulatory organizations in the field of architectural activities and international advisory organizations on the list of its members.
The procedure for approving deviations from the current building standards will undergo the most significant changes. It has always been closed and had corruption risks in terms of the approval due to uncertainty. The new procedure is clearly defined and minimizes the possibility of corrupt actions of “dishonest dealers” or civil servants.
The new version of the Regulations on the STC contains a clear list of documents and data to be provided by applicants. The terms and the procedure for reviewing applications are also clearly defined. A special focus is on the obligation to publish the applications on the Minregionbud’s website to make it available to the public. In addition, new rules stipulate that multiple, repeated applications for deviating from standards allows to initiate the development of respective amendments to the current DBN and standards.
We hope that the new Regulations on the Science and Technology Council of the Minregionbud will be approved as soon as possible. Then there will be a chance to abolish the mandatory sites for carpet beating near twenty-story residential complexes and garbage disposal units in five-star hotels.
Source: biz.nv.ua.
There is a duty in Ukraine, which hardly any guesses about. I am sure that it will be a surprise for most accountants and lawyers. However, almost every Ukrainian pays it added to the price of products.
There is a blank media duty (blank disk duty, personal playing duty) (Duty). It was established to support authors / performers, both Ukrainian and foreign ones.
When importing technical devices into Ukraine, importers are required to pay a fee in the form of a percentage of their value (up to 1.5%). This is stipulated by Article 42 of the Law “On Copyright and Related Rights”.
A list of thirty-three types of technical devices, on which this Duty is paid, was established by the CMU’s Resolution No.992 dated 26/07/2003. In particular, it includes:
Unlike taxes, which are paid to the state and fill the budget, the Duty is paid to a private person – the Collective Management Organization (CMO). In total, there are only 2 CMOs authorized by the state to receive funds from paying this duty, in our country.
As for the CMOs, they should distribute the funds between authors and performers.
There are similar duties in many EU countries as well as in the Russian Federation (known as “Nikita Mikhalkov’s tax”). However, in Ukraine, the Duty exists in special conditions, when its management is completely non-transparent.
Three factors of the duty’s non-transparency:
In addition, the Duty is notable because of the fact that it causes litigations between CMOs and importing companies, including well-known international brands.
You can find the lawsuits of CMOs to ASBIS-Ukraine, Sony-Ukraine, Elko Ukraine, Philips Ukraine and others for the last year in the United Register of Judgments.
It is unlikely that the non-transparency and a large number of litigations will allow to characterize this Duty as the effective one.
That is why the Better Regulation Delivery Office experts propose to consider suspending this Duty until all transparent and clear mechanisms for its collection and distribution are developed and approved.
The relevant draft Resolution of the Cabinet of Ministers of Ukraine along with all documents have already been developed by BRDO experts and will be sent to the state authorities in the near future, as well as published for extensive public discussion.
We do not know much whom and how much we pay due to legislative rules. The IFAK study showed that only 10% of Ukrainians knew how many taxes they pay.
The more public attention is drawn to duties and taxes, the procedure of their management and use, the more order and efficiency there will be.
The fixed broadband access (BBA) is the main and most reliable way to access the Internet. Developed countries implements the optical network development strategy nationwide. Increasing the Internet connectivity in the country by 10% reflects in more than 1% of GDP. In Ukraine, according to official figures, the level of fixed BBA connectivity is only 11.8 subscribers per 100 people, while in neighboring Slovakia, it is 23.3, in Hungary – 27.4, and in Belarus – 31.4.
In 2016, the Ukrainian BBA market volume was 6.1 billion hryvnas – it is the second largest market in the telecommunication segment – and has a significant potential for growth. Today, the market is served by more than 2700 companies, and 5 million subscribers have broadband access to the Internet.
The state, business public and expert community representatives discussed the market problems at the Roundtable “Internet to everyone: pain points of broadband access regulation” as part of the Public Dialogue #PRODialogue that took place in iHUB on June 15.
The Better Regulation Delivery Office (BRDO) analyzed the legislative environment of the sector and presented it in the Green Paper “Regulation of the market of the fixed broadband Internet access”. According to this study, the Ukrainian legislation does not contain any definition of BBA, and therefore, does not define the requirements for the minimum speed for broadband access.
Thus, in Ukraine, only 2 of the 10 largest BBA operators guarantee the minimum speed of 10 Mbit/s. 4 operators include the minimum access speed of nominal 64 kbit/s in the contracts with users, and another 4 operators do not mention this aspect at all. By the way, the EU set a goal to provide 100% of the population with the opportunity to connect at least at 30 Mbit/s and 50% of the population – at100 Mbit/s by 2020.
“A limited and unequal access of operators and providers to the infrastructure such as energy, cable sewage, construction and transport facilities is a significant problem for the development of the market and telecommunications networks,” the First Deputy Minister of Economic Development and Trade of Ukraine Maksim Nefyodov explains. “Basic issues of access to such facilities, which are often controlled by monopolists imposing unjustified conditions and too high prices, are still not regulated by laws. Sometimes, charges for using transmission towers are far different in various regions.”
The Head of the State Regulatory Service of Ukraine Kseniya Lyapina said that to address the market problems and maximize its potential, it was necessary to create an effective model of relations that will reflect the real situation while being friendly to business.
On March 2, 2017, the President of Ukraine signed the Law of Ukraine “On access to infrastructure of construction, transportation and energy facilities to develop telecommunication networks”. 10 subordinate acts should be adopted prior the Law comes into effect – by June 4, but no acts have been adopted so far. Thus, the conditions of access to infrastructure facilities for telecommunications market participants are still unregulated and noncompetitive. Inhibition of the telecommunications network development limits the development of SMEs in the country and in regions.
The Head of the BRDO’s IT and Telecom sector Oleksandr Kubrakov said: “In Ukraine, the level of BBA availability is very different in large cities and rural areas. 28% of a total number of subscribers live in Kyiv, and less than 40% of users live in other regions of the country, except Kyiv, Dnipropetrovsk, Donetsk, Odesa, Lviv and Kharkiv regions. This digital divide is a barrier to the technology development of regions. Solving the problem of access to infrastructure will allow to promote the development of SMEs, especially in the regions.”
The event was attended by Maksim Nefyodov, the Head of the State Regulatory Service of Ukraine, Kseniya Lyapina, the Head of the State Regulatory Service of Ukraine, representatives of the National Commission for state regulation of communications and informatization, the Internet Association of Ukraine, business representatives and service providers, experts and the public.
We are grateful to the iHUB founder Dmytro Podolev for the partnership and support of the technology startup industry in Ukraine.
Source: delo.ua.
Internet to every home or what the state does to provide its citizens with the right to information.
The broadband internet access (BBA) is a basic service allowing to use other digital features. The United Nations recognized the right of access to the Internet as a basic human right in 2011.
The organization says that every state should be responsible for providing the availability of the Internet to the wider population. As stated in the UN resolution, due to its unique and transforming character, the Internet not only enables individuals to exercise their right to freedom of opinions and share them, but also stimulates the development of society in general.
Therefore, developed countries are concerned about the development of fixed BBA as the most reliable and the main way to access the Internet. For example, the European Union set a goal to provide 100% of the population with the opportunity to connect at least at 30 Mbit/s and 50% of the population – at100 Mbit/s by 2020. Germany is implementing even a more ambitious plan: to provide the connection at least at 50 Mbit/s for 100% of the population within 2018. Norway set a goal to provide 90% of households with the Internet access at least at 100 Mbit/s by 2020.
However, the Ukrainian legislation doesn’t contain even an official definition of BBA, not to mention specific programmes to develop the networks. Only the “Strategy for Sustainable Development “Ukraine 2020” says that “according to the World Bank, the share of the broadband Internet will be 25 subscribers per 100 people”.
Compared to the current index – 11.8 subscribers – this may seem to be a progress. In fact, even this figure will make Ukraine an outsider, because today the number of fixed BBA subscribers per 100 people is 31 persons in neighboring Belarus, 27 – in Hungary and 23 – in Slovakia.
At the same time, the index of 11.8 is somewhat manipulative and does not give the honest presentation of the situation. The existence of so-called “digital divide”, in other words, situations when the availability of BBA is very different in big cities and small villages, is a painful issue in Ukraine. According to the National Commission for state regulation of communications and informatization, 1.4 million of 5 million or 27% of fixed BBA subscribers are concentrated in Kyiv and in the capital together with the region – more than 30%. In addition to the above, only 11% of the population live in the capital region.
A large proportion is recorded in major cities. Almost 60% of fixed BBA users live in Kyiv, Kyiv, Dnipropetrovsk, Donetsk, Odesa, Lviv and Kharkiv regions. This situation deepens inequality in rights and opportunities for people and causes social injustice and economic disparity.
Does the state make something to improve the situation?
The Law of Ukraine “On access to infrastructure of construction, transportation and energy facilities to develop telecommunication networks” can be considered as the first effective step towards increasing the availability of fixed BBA. It regulated the basic issues of access to infrastructure facilities, which are often controlled by monopolists imposing unjustified conditions and prices. For comparison, the monthly fee for access to one pole is 2.5 hryvnas in Kherson region and 15.95 hryvnas in Rivne region. It is unlikely that this difference can be explained by climatic or other characteristics of regions.
This law will become fully operational only after the development of access rules and methods of charging for access to each type of infrastructure. The following agencies are responsible for the development and approval of relevant acts: the Ministry of Energy, the Ministry of Regional Development, the Ministry of Infrastructure, the NEURC, the NCCIR and the Derzhspetszviazok (State Service of Special Communications and Information Protection). However, despite the fact that the law has been signed by the President on March 2, no document has not been adopted as yet, so the development of telecommunication networks continues to be slowed down.
The BBA availability is not enough to ensure that the Internet meets rapidly growing requirements of users. The quality is a rather hot issue. Operators and providers often provide poor quality services to consumers due to ignoring the definition of BBA in laws as well as related limited technical and methodological possibilities of the NCCIR.
While today Europe is thinking about the “fast BBA” at from 30 Mbit/s to 100 Mbit/s and “ultrafast BBA” at more than 100 Mbit/s, the most domestic operators do not mention in contracts the minimum speed they provide the Internet access with or give nominal figures of 64 kbit/s, that is 68 times less than the required available level in Europe!
Meanwhile, in Ukraine, there is even no definition of BBA, and these legal “delays” slow down not only the development of the Internet, but the country as a whole. Without a radical improvement of the situation in the fixed BBA market, our country will be among the third world countries and the level of public access to information, education and other opportunities offered by the digital era will limit opportunities of Ukrainian people for development and realization.
The availability of BBA services and their appropriate quality in every settlement of the country should be a key priority for development of the telecommunications industry in Ukraine. We will discuss this issue with the government and market participants as part of the roundtable “Internet to everyone: pain points of broadband access regulation” this Thursday, on June 15. Join, it concerns all of us!
Ukraine has not still defined the required minimum speed for broadband Internet access by law. Therefore, domestic operators can afford to provide users with Internet access services at the level of nominal figures of 64 kbit/s. This is 468 times less than the required available level in Europe. Ukraine has one of the lowest levels of providing the fixed Internet access among European countries, and it is only 11 subscribers per 100 people.
What do we need to provide all citizens with Internet access across the country? How to remove barriers to develop networks outside the cities? What changes will help provide users with quality services?
The state and business representatives with try to find answers and solutions to market problems as part of the Roundtable “Internet to everyone: pain points of broadband access regulation” on June 15.
The event will be attended by:
Business, public, expert community and media representatives.
BRDO experts conducted a rolling review of the quality of market regulation, the results of which have been presented in the analytical research – the Green Paper “Regulation of the market of the fixed broadband Internet access”, that will be the subject of discussion at the roundtable.
Join the dialogue! Discussion results will be used as the basis to develop particular legislative changes in the market.
Venue: Kyiv, iHub (Khreschatyk St, 10)
Time: 10:00 – 13:00, June 15, 2017
The event’s agenda is available here.
You can register here. Details at: 063 440 47 07.
Accreditation of media representatives is till 18.00 on June 14 by calling 099 256 59 56.
Ukraine annually loses hundreds of hectares of forest, but still do not have the approved strategy of the forest policy development. Forests and their rational use are not controlled and the regulatory environment of this sector has many gaps.
The ways to preserve Ukrainian forests and achieve the balance of state and business interests will be discussed at the roundtable “Regulatory jungles: is forest a commodity or a resource?” in Zhytomyr on June 8, 2017.
The event will be attended by:
The independent analytical center BRDO (Better Regulation Delivery Office) studied the problems of the forest sector regulation and presents the results in the Green Paper, which will be discussed at the Roundtable. The event devoted to this topic was also held in Kyiv in April. Details – at www.regulation.gov.ua.
The event’s program is available here.
Time and venue: Zhytomyr, Reikartz hotel (Zamkovaya Square, 5/8), 10:00 – 12:00.
Accreditation of media representatives – till 18.00 on June 7, 2017 by calling 099 256 59 56.
Join the dialogue! Discussion results will be used as the basis to develop particular legislative changes in the market.
The Ministry of Economic Development and Trade together with the State Regulatory Service with the assistance of the BRDO initiated the regulatory reform. The EU is supporting this process in the framework of the EU4Business/FORBIZ initiative.
The Public Dialogue between the government and businesses is aimed at improving the state regulation and the business climate in the country.
BRDO experts have analyzed 1211 subordinate acts on fire safety, labor protection and ensuring sanitary and epidemiological welfare and selected 363 acts. They make the life of business owners more difficult and require covering excessive demands along with additional costs.
In addition, funds from the budget are used to maintain a bloated system of state supervision (control) – an army of inspectors, a large number of laboratories and so on.
In total, BRDO experts recommend to abolish:
This innovation will:
The results will be submitted to the Ministry of Economic Development. It is expected that the Cabinet of Ministers will consider BRDO’s proposals at the next deregulation day.
You can learn more about draft acts here:
Source: delo.ua
On July 19, business owners will not be demanded sealed documents any longer. So, what the near future holds for Ukrainian entrepreneurs?
First, a seal of enterprises or individual entrepreneurs loses its legal status. The presence or absence of a seal on the document will not create any legal consequences.
The loss of the validity does not mean the interdiction of seals use. Entrepreneurs still will be able to use the seals, but they will have only the decorative function in legal terms.
However, it should be remembered that legislative changes did not concern the status of seals of those persons who are not considered as business entities (for example, state and local authorities, notaries, arbitration managers, etc.). That is why these persons continue to use seals without any changes.
Secondly, any state authority or local government body can not require the presence of the enterprise (or entrepreneur) seal on documents submitted to this body. It concerns even those cases when the presence of seal’s press is caused by a regulation (for example, the Cabinet of Ministers of Ukraine’s resolution).
Thirdly, in case if some state authority or local government official will demand from enterprises or entrepreneurs to set a seal, this official will bear administrative responsibility – a fine from 50 to 100 untaxed citizens’ minimums. The State Regulatory Service of Ukraine will be able to impose this fine.
Forth, the procedure to authorize copies of documents submitted by enterprises and entrepreneurs to state authorities and local government bodies will be clearly regulated. From the moment of enacting the law, it will be enough to apply an enterprise executive director’s signature or an entrepreneur’s signature on such copies to authorize them. Notarized copies will be demanded only in case if it is stated de jure, which is extremely rare.
The abolishment of seals refocuses the attention at a person’s signature applied on the document. However, unfortunately, the signature as an identifier of the identity of the signatory is no better than the seal.
Factually, there is no statutory regulation of the signature in Ukraine, and the signature itself is based solely on traditions. Is it necessary for a person to have a signature? Which criteria must it correspond: can the letters, signs, pictures be there? Which size and orientation? How often a signature can be changed? What is the maximum of signatures a person may have? Is there another way of applying a signature except by a pen?
The uncertainty of answers to these questions leads to the conclusion that the main role of signatures is not only to identify a person who signed a document (although often it is quite possible), but to confirm that a person signed a document agreed with the content of this document and giving it the legal value.
How to protect from the deception, fraud and raiding without seals?
First, in case of negotiating of important contracts you should demand signing the contract by your counterparty in your presence (better take in presence of several witnesses).
Secondly, the signatures on the most important contracts should be notarized. A draft decree, which is initiated by the government and abolishes the minimal cost of notaries’ services (1% of a contract price), is currently submitted to the President of Ukraine, so, we hope that this protection method will be less expensive for the business.
Thirdly, it is necessary to take a close look at the data of the United State Register of legal entities, individual entrepreneurs and public organizations. This register is freely available in the Internet, and it is easy to find there the information about those who have a right to sign documents from the behalf of the enterprise (perform transactions) and restrictions set to such person.
It is useful to examine the Register data not only on your counterparty but also on your enterprise – the details of restrictions prescribed (if they are there) to perform transactions on behalf of the enterprise by executive bodies of the enterprise.
Forth, in case when it is impossible to sign the documents in the presence of the counterparty, you should widely use and even sometimes duplicate the paper documents with the electronic ones signed by the electronic signature.
What exactly should not be expected?
One that on July 20, 2017 all the entrepreneurs seals will be in a trash can, and the documents will be registered solely by signatures. Old habits die hard.
But the sooner it happens, and the sooner business adapts to new realities and business processes, the less problems this business and government bodies and institutions will have.
On May 31, 2017, the World Bank experts stop considering changes and start processing data for the annual ease of doing business index “Doing Business”. Countries entering the top ten of the Doing Business ranking receive 50 times more foreign direct investments than those countries entering the last ten. Ukraine ranked 80 among 190 countries in the Doing Business index. What results should we expect at the end of this year? This topic was discussed at the briefing “Doing Business 2018: what to expect?” in the CMU’s press center on May 30.
The First Deputy Minister of Economic Development and Trade of Ukraine Maksim Nefyodov declared that the Ministry of Economic Development has initiated making amendments to the Resolution of the Cabinet of Ministers of Ukraine No.1406 “On approval of the Action Plan for implementation of best practices of quality and efficient regulation as reflected in the World Bank Group’s methodology of the Doing Business Index for 2016”.
“Doing Business is one of the main rankings targeted by investors when choosing countries for investment. This year, we initiated the visit of a mission, which will assess the reforms implemented by interviewing business representatives and experts, in Ukraine. Last year, this commission was not involved, so we failed to receive several positions in the ranking. If they consider all changes, we estimated that it would give Ukraine 10 positions in the ranking,” Maksim Nefyodov said.
Oleksiy Honcharuk, the Head of the Better Regulation Delivery Office, presented the steps taken last and this year to improve Ukraine’s positions. The key steps include: introducing administrative responsibility for government officials for refusing to accept documents without seals and simplifying the registration of land ownership.
The access to electricity networks was improved – now electricity supply companies undertake to pay compensation to consumers if electricity interruptions last more than 24 hours.
In addition, the Ministry of Economic Development initiated making amendments to the List of dual-use goods, which reduced the number of such goods simplifying the work of importers and exporters. It is expected that this reform will improve Ukraine’s positions in terms of the International Trade component.
“Progress in the ranking can not be an end in itself, but this ranking is a marker of reforms implemented. The Ministry of Economic Development together with the Better Regulation Delivery Office developed an Action Plan to improve the investment attractiveness of Ukraine. Increased positions in the ranking will help attract more foreign investment,” Oleksiy Honcharuk said.
The Deputy Minister of Regional Development, Construction, Housing and Utilities of Ukraine Lev Partskhaladze said about innovations in the construction sector that will have a significant impact on the ranking:
“The new law No.2020-VIII to improve the conditions for construction, which came into force on May 12, 2017, will improve Ukraine’s positions in the Doing Business ranking in terms of the component “Getting Construction Permits” as well as facilitate the deregulation of economic activities in the sector. It will simplify the construction business activity due to cancellation of the procedure to obtain data and technical specifications from the State Emergency Service, which is duplicated, since this procedure is also prescribed in designing. The law also improves the quality of performance monitoring, since it provides for compulsory higher education of performers of construction works,” he said.
In addition, according to Lev Partskhaladze, this document determines the legal conditions to improve the collection of state statistical reporting data on finished facilities accepted for operation – the functions of architectural and construction control were transferred to local authorities, but there are no obligations to provide statistical data in this area.
[gview file=”https://en.brdo.com.ua/wp-content/uploads/sites/5/2017/06/DOING-BUSINESS-IN-UKRAINE-6-UKR.2.pdf”]
For information
Doing Business is one of the most popular rankings of countries prepared by the World Bank. The ranking characterizes the investment climate of countries.
The World Bank’s Doing Business ranking is a result of annual researches that assess the ease of doing business based on 10 indicators in 189 countries. Components of the ranking assess the regulatory acts that regulate activities of small and medium enterprises throughout their life cycle as well as their actual use in practice.
To improve the business climate in Ukraine and increase Ukraine’s positions in the Doing Business ranking, the Ministry of Economic Development together with the Better Regulation Delivery Office has developed the roadmap consisting of 43 points. This roadmap was approved by the CMU Resolution 1406 dated December 16, 2015.
A briefing on issue “Doing Business 2018: what to expect?” will be held on Tuesday, May 30, 2017 at 14:00.
On May 31 of this year, the World Bank experts stop considering changes and start processing data for the annual Doing Business ranking. This ranking is a kind of marker in terms of increased investment attractiveness of countries on the map of the world economy. The countries entering the top ten of the Doing Business ranking receive 50 times more foreign direct investments than those countries entering the last ten.
Ukraine ranked 80 among 190 countries in the Doing Business index. Participants of the briefing will speak about the steps that have been taken to improve this position:
Venue: House of Government (Hrushevskogo st., 12/2, the 1st entrance).
Admission by passports and editorial cards only.
Accreditation of media representatives – till 11.00 on May 30: https://goo.gl/xEMKrC
If you have any questions, please call 050 689 93 28.
Welcome to the event!
For information
Doing Business is one of the most popular rankings of countries prepared by the World Bank. The ranking characterizes the investment climate of countries.
The World Bank’s Doing Business ranking is a result of annual researches that assess the ease of doing business based on 10 indicators in 189 countries. Components of the ranking assess the regulatory acts that regulate activities of small and medium enterprises throughout their life cycle as well as their actual use in practice.
To improve the business climate in Ukraine and increase Ukraine’s positions in the Doing Business ranking, the Ministry of Economic Development together with the Better Regulation Delivery Office has developed the roadmap consisting of 43 points. This roadmap was approved by the CMU Resolution 1406 dated December 16, 2015.
Source: www.business.ua
Ukraine is among the top 10 largest world producers of metal, but it does not use its potential. While declaring its desire to move from the resource-based economy to commodity exports and innovative development, the state does not do anything for this purpose. Rather, on the contrary, it preserves outdated technologies and hinders the development of modern production. Existing regulatory rules and standards reduce the market competition preventing not only from participation in many international projects, but also from the development at the domestic level.
However, the market of metal structures means more than 20 thousand jobs. Budget revenues from it amounted to 462 million hryvnas of taxes and brought the country 71 million dollars of foreign exchange earnings last year. And 830 market enterprises generated almost 3 billion hryvnas of added value. And this all was not as a result of, but in spite of.
The high-rise construction has long characterized modern cities, and its facilities – architectural landmarks in many countries
The catalyst was the extensive use of steel building structures at the beginning of the XX century. The construction market was rapidly growing, but we are talking about the world market and not the Ukrainian one. We have made first steps just in the middle of the last century and stopped halfway.
Good news. Two of the ten most prominent buildings in the world have been built using Ukrainian metal. One of them is the 828-meter Burj Khalifa skyscraper in Dubai. It was made of 60% of Ukrainian raw materials. The second building – a new object “Shelter 2” in Chernobyl, which can be seen from space even with the naked eye. There’s also our metal. But the good news ends with these facts.
The industry regulation is ineffective and contradictory. More than half of 59 regulations require to be updated and one in seven has signs of being illegal. Regulatory changes are needed in all processes: starting from vocational education and training of design engineers to putting finished objects into operation.
For example, today, Ukrainian designers can not participate in international projects at the legislative level. After all, they are certified exclusively by national standards.
However, it has been allowed to design according to both national standards and Eurocodes since 2015. But! In accordance with recently adopted amendments to the urban planning legislation, it is no allowed to design by Eurocodes for facilities of consequence class CC3! And CC3 can be any industry facility! That is, foreign investors wishing to build an agricultural complex, warehouse or industrial premises face with a direct ban to design by European standards in Ukraine. Only by domestic DBN codes of 1958, which are quite satisfactory for the old school of designers. And it does not matter that some requirements of these standards can not be met because there simply no most of materials described available. Instead, everything is familiar and time-tested. But innovations can wait.
Another remarkable example of outdated regulation is our fire standards on fire protection. They are much higher than in Europe. In fact, they do not increase the safety of facilities in any way, but significantly increase the cost of the process. What will customers choose: to build at less cost by using concrete or at a higher cost from metal? The answer is clear and it is against technological metal.
The situation with the production of metal structures is slightly better. There are 462 supporting standards for 57 Eurocodes. 200 regulatory acts have been already translated and adapted.
Thus, today there are two parallel systems on the market: Soviet and European systems. Expert-oriented producers are using European standards, others, by force of habit, – the Soviet ones (updated with renewed date).
Double regulation only complicates the market operation
Here is a simple example. The export of metal structures brought Ukraine 1.57 billion hryvnas for 46.6 thousand tons of goods last year. 21 thousand tons totaling 1.12 billion hryvnas were imported. Do you see the difference? We sell our metal structures 2 times cheaper than we buy them. The reason – international companies require certificates by international standards. And our enterprises have to adhere the national ones. As a result, just one-fifth of steel produced in Ukraine is used in construction.
At the same time, the potential of the domestic market has the ability to quickly ramp up the production of metal structures. Its development depends on the ability to introduce innovations. Therefore, now we need a government’s sole decision on transformations. There is a need in comprehensive reengineering of the system – from providing vocational education and training of design engineers to introducing a new system.
Recipes have been already prescribed, we just need to begin taking medicines.
Ukraine is among the top 10 countries producing metal, but it spends over 1 billion hryvnas to purchase building metal structures abroad. 80% of Ukrainian metal are sold as a raw material, and only 20% are used to make finished products. One of the reasons of this situation is regulating this sector with outdated Soviet rules that do not allow the market to develop and introduce modern technologies in construction. According to the Better Regulation Delivery Office, 32 of 59 regulatory acts require to be updated and 7 of them have signs of being illegal.
The government, business, community and expert circles representatives were engaged in finding solutions to the problems of regulating the market of metal constructions at the roundtable “Iron standard: metal structures between yesterday and tomorrow” as part of the Public dialogue #PRODialogue on May 25.
“The market of metal structures is one of the most technological sectors in the country. We should develop a roadmap on the market deregulation and the opening of European markets, introduce modern technologies and attract investors in the short term,” the Vice Prime Minister, Minister of Regional Development, Construction, Housing and Utilities of Ukraine Hennadiy Zubko said when opening the event.
The market of metal structures is a sector with considerable added value for the economy and great potential for growth. Today, there are 830 enterprises working in the market. They create 20 thousand jobs and generate 2.6 billion hryvnas of value added per year. And this is just 20% of market facilities, which are currently used in Ukraine.
“Ukraine is facing the urgent task to reform the system of market regulation and improve the business climate. This will allow to harmonize the legislation with European standards in the framework of the Association Agreement with the EU and open the international market for Ukraine. There are a lot of work to be done with mandatory participation of all parties, but the reforms are worth it,” the manager of the EU Cooperation Programmes Berend de Groot believes.
According to the analysis conducted by the BRDO, the system of existing market regulation is a barrier to introduce new technologies and provide producers with access to international markets. In Ukraine, the surplus of steel production is 500% compared to consumption, but its export potential is limited by the need to certify products under international standards.
“The existing regulation creates artificial barriers for the market development and create excessive burdens for businesses. Cleaning the regulatory environment and eliminating inconsistencies in rules in terms of professional certification of experts and providing free access to base standards and government regulations will reduce financial costs of business owners by 39 million hryvnas per year,” the head of the BRDO Construction sector Olena Shulyak said presenting rolling review results of regulation quality for the market of metal structures in terms of effectiveness, corruption risks, favorable business and practicability.
The event was also attended by the Deputy Minister of Regional Development, Construction, Housing and Utilities of Ukraine Lev Partskhaladze, the Deputy Head of the State Regulatory Service of Ukraine Oleh Miroshnichenko and about 100 business, community and expert circles representatives. The discussion results will be considered and for the basis to develop legislative changes in the market of metal structures.
For information:
The Ministry of Economic Development and Trade together with the State Regulatory Service initiated public consultations as an essential element of the regulatory reform to make the rules for businesses more effective and clear and the process of their adoption – transparent and public. The independent BRDO analytical center is organizing public consultations and developing analytical materials in the framework of the EU4Business/FORBIZ initiative.
The Public Dialogue between the government and businesses is aimed at improving the state regulation and the business climate in the country.
Restructuring of regulatory rules on the cement market is impossible without active involvement of market participants – from raw material suppliers to state institutions-regulators. The head of the Construction sector at the Better Regulation Delivery Office (BRDO) Olena Shulyak emphasized this aspect at the today’s VII International Conference “UkrCemFor 2017: Cement industry. Best Practices. Development prospects”.
Olena Shulyak said that currently the BRDO conducted a rolling review of the regulatory environment of markets initiated on behalf of the First Vice Prime Minister Stepan Kubiv in 2016. And now the BRDO experts began working on the analysis of two related markets in the construction sector – the market of concrete and reinforced concrete structures and the cement market.
“Cement and concrete markets in Ukraine in total generate 18 billion hryvnas annually, and it is logical that these segments like the most of segments in the construction industry have problems with currently important and effective state regulation,” Olena Shulyak commented and added that the segment of cement and concrete products was a basis of Ukrainian construction and its result.
According to BRDO analysts, these markets generate almost 1200 enterprises. As BRDO experts claim, 15 regulatory acts, 53% of which require to be urgently updated, affect the market.
In the expert’s opinion, today there is a need to openly discuss problems of the regulatory environment with market participants and prepare amendments that can reduce the regulatory burden on businesses, restructure rules and make the processes of developing the regulatory policy of Ukraine as transparent and balanced between interests of the state and business as possible.
“This is why we together with partners initiated a Public Dialogue campaign, during which we present the results of the regulatory market analysis as Green Papers and discuss with market participants. This process is completely public and everyone can join it. All necessary information is available on a specially created platform of effective regulation PRO,” Olena Shulyak said.
BRDO experts have already prepared the first draft of proposals to improve the regulatory environment for the market of concrete and reinforced concrete structures. The next step is to analyze the cement market. The direct involvement of business representatives working on these markets will make our activity as balanced and effective as possible – at this stage, experts act not only as developers of a new regulation model, but also as intermediaries between state and business positions.
Presentation is available here
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For information
“UkrCemFor 2017” has become a platform for discussions and brought together key players of the cement industry from both Ukraine and Europe for the seventh time. The event is aimed at focusing attention on important aspects – growing the cement market of Ukraine and the quality of products, and using the latest technologies to produce cement and building materials.
On May 24, the Cabinet of Ministers approved 9 draft amendments developed by the Ministry of Economic Development as part of the “Deregulation day”. BRDO experts participated in developing the provisions.
“The result of the Deregulation day was the liberalization of the state supervision (control) system that will allow to reduce the number of contacts of supervisory bodies and businesses as well as significantly reduce corruption risks,” the First Vice Prime Minister Stepan Kubiv said.
For example, in particular, the Government approved the implementation of a public integrated database of inspections, namely a Procedure of functioning an integrated automated system of state supervision (control), at the suggestion of the Ministry of Economic Development. This will make the activity of supervisory bodies more transparent, predictable and accountable. This system will provide the access of public representatives, business entities, government bodies and local government agencies to the information on state supervision (control) measures via the Internet. From now on, state supervision (control) bodies will have to submit the information on planned state supervision (control) measures no later than October 15 of the year, and on October 17, the system will automatically publish a draft plan of comprehensive measures related to state supervision (control).
“Our goal is ambitious, but completely achievable – the most effective inspection system in Europe. The task for this year is to launch the online system (Integrated database of inspections) and implement a risk-oriented approach,” the BRDO Head Oleksiy Honcharuk said.
In addition, the Government approved the methodology designed to help inspection bodies to determine the acceptable number of inspections. This methodology will provide a unified approach to developing criteria to assess risk levels of economic activities and determine the frequency of planned state supervision (control) measures, and standardized forms of acts prepared according to the results of planned (unplanned) state supervision (control) measures.
The Government also approved a Procedure of implementing comprehensive planned state supervision (control) measures. This Procedure establishes rules to conduct planned inspections in an integrated manner, in other words, by all bodies simultaneously.
“We expect that these decisions will allow to reduce the number of contacts of supervisory bodies and businesses by 15-30%, and the new methodology will allow to move to a system of business inspections based on risk management,” the First Deputy Minister of Economic Development and Trade Maksim Nefyodov.
The third initiative – the Ministry of Economic Development and the State Regulatory Service gained the right to monitor the observance of main provisions of the Law of Ukraine “On Basic Principles of State Supervision (Control) in Sphere of Economic Activity” by inspection bodies. This decision will allow to enhance the protection of businesses from inspection bodies by engaging the Ministry of Economic Development and the SRS into inspections at the initiative of companies.
The procedure of submitting documents to licensing authorities electronically was also improved. According to the decision, the unified procedure is established – electronic documents (or scanned copies in PDF format) are submitted to licensing authorities through a Unified State Portal of administrative services, including through information systems of licensing authorities integrated in it. There is no need to duplicate documents submitted electronically on paper any more.
Finally, they also approved the decision to provide the public access to information on urban planning documents via a new web service on the website of the Ministry of Regional Development. This decision will allow to obtain information on urban planning documents in a minute and identify promising areas for investment in a timely manner. The information will be available for 29.5 thousand settlements.
As a result of the Deregulation day, the Cabinet of Ministers has also approved the Development Strategy for small and medium businesses in Ukraine until 2020. Its implementation will help establish a system approach to develop and implement state policies in this sphere and create favorable conditions to develop competitive small and medium enterprises (SMEs).
From now on, sanitary certificates for base stations of mobile operators and telecommunication providers that should be obtained for their construction and modernization are canceled. BRDO experts together with the Ministry of Health, the Ministry of Economy, the Ministry of Justice, the SRS and Telas association initiated this proposal.
“This will reduce the period of constructing and putting into operation stations by 1 month and allow the business to save 5.500 hryvnas for each sanitary certificate,” the head of the BRDO IT and Telecom sector Oleksandr Kubrakov said and added that one mobile operator installed up to 2.500 stations in a city with a million-plus population while spending on average 13.7 million hryvnas for sanitary certificates.
According to the expert, this decision will improve the level of mobile communications for users and move Ukraine closer to setting up the 4G network.
In addition, today another barrier to introduce 4G was also removed, that is the electromagnetic radiation standards were adapted to European indexes. These standards have not been revised since 1996 while being a real barrier to introduce 4G in Ukraine, because the less capacity of base stations have, the more number of these stations is required to cover the same territory.