The Government of Ukraine approved the Plan for the Ukraine Facility and submitted it to the European Commission for consideration.
Ukraine Facility is a program of financial support for Ukraine from the EU in the amount of 50 billion euros, which will be directed to the Ukrainian economy during 2024-2027. Funds from European partners will not be able to fully cover the country’s budget deficit, but they will definitely make a significant contribution to the stability of our economy.
Why is this important?
The plan for the Ukraine Facility is a technical document necessary for the launch of the program. This is the first time that an integrated economic development plan for the next 4 years has appeared in Ukraine.
Reforms in the Plan for Ukraine Facility are divided into 3 main blocks: basic reforms, economic reforms, as well as key sectors, the rapid development of which will stimulate comprehensive economic growth. According to the Plan it is:
The implementation of the Plan will contribute to the European integration of Ukraine and the further sustainable development of the economy. It is undeniably positive that the EU is already starting to work with Ukraine as a full member of the community – the Ukraine Facility was created according to the model in which the EU finances its own members.
What is BRDO’s role?
Work on the Plan was carried out in close cooperation with the European Union.
The document was prepared by the Government under the coordination of the Ministry of Economy of Ukraine in constant consultation with representatives of the European Commission.
BRDO provided analytical support during the development of the Plan with the assistance of the Kyiv School of Economics within the framework of the project “EU support in reconstruction and recovery”. We also joined the consultations on the Plan, which the Government conducted with expert centres, business, the public, people’s deputies and representatives of the regions.
What’s next?
Now it’s up to the European partners: the EU must finally approve the Plan, which will allow the Ukraine Facility to fully operate. It is expected that this will happen already in April-May this year. Next, Ukraine and the EU have to conclude a series of agreements to receive the main funding within the framework of the program.
Ukraine Facility Plan and its brief presentation available at https://www.ukrainefacility.me.gov.ua
For this, the industry needs to be reformed. In 2023, the Ministry of Agrarian Policy launched systemic changes aimed at several goals.
The first is to simplify the conduct of the fishing business, for which it is necessary to minimize the contacts of entrepreneurs with state bodies and introduce modern digital services. The second is to de-monopolize the industry, create healthy competitive operating conditions on the market and tools for attracting investments. The third is to implement the legislative requirements of the EU, which will contribute to the European integration of Ukraine and open up European markets for our business.
For this reason, the state, in particular, fights against illegal, unaccountable and uncontrolled fishing. According to the estimates of various experts, the shadow market before the start of the reform amounted to 6 to 9 billion UAH. Individual players are not interested in the development of the industry, in the introduction of modern digital solutions and in paying taxes to the state budget. The reformers are forced to overcome the opposition of unscrupulous entrepreneurs, but they are determined to develop and improve a promising industry, which is extremely necessary in the conditions of war.
The reform of the fisheries industry began in 2023 at the initiative of the Ministry of Agriculture, the Ministry of Statistics, the State Fisheries Agency and experts from the BRDO Effective Regulation Office. Law No. 2989-IX was the first step and the basis for the digitization of the industry.
The document finally established electronic auctions for the right to special use of aquatic bioresources in fishery water objects (before that, they were already operating, but based on an experimental resolution of the CMU). The competitive sale of contracts ensures that every business has equal access to a common natural resource. In this way, the industry is demonopolized, and the market comes out of the shadows. Figures to confirm: in 2023, electronic auctions brought 95 million hryvnias to the state and local budgets, in the first two months of 2024 – 45 million hryvnias. Before the reform, the amount of revenues for special use did not exceed 13 million hryvnias per year.
The law also introduced the Unified state electronic management system for the fishing industry – eRyba, which allows entrepreneurs to receive government services and permits online. It also marked the beginning of the implementation of EU legislation, which is the basis for the Common Fisheries Policy of European countries.
The first services are already available on the eRyba platform, for example, electronic declaration of the right to commercial fishing. The instrument of state regulation is a new European integration requirement for Ukrainians, similar to the European license for the right of industrial fishing. However, the Government introduced a simpler tool for business – declaration instead of licensing.
The declaration system became an important tool for bringing the market out of the shadows and made it possible for the first time to identify fish reception points as a special place of accounting for aquatic biological resources. During the reform period, 147 new fish reception points were registered, which is 42% of the total number of existing ones (349). A system of remote monitoring of vessels using GPS trackers was also implemented. Since the beginning of the tracking requirements, entrepreneurs have declared 313 new vessels. Before that, 982 ships were officially operating in this field, that is, in just two months, their number “increased” (actually – detinized) by 31%.
Before the reform of the fisheries sector, the state actually did not have reliable data either on the accounting of aquatic biological resources at fish reception points or on the fishing vessels used by the subjects of the fishery. There were cases when two fishing vessels caught under the same registration number, or when one vessel was simultaneously registered by two users, which created conditions for market shading.
Full traceability of fishery products is not a whim of Ukrainian legislators, but a mandatory requirement of the EU. Ukraine can become Europe’s leading exporter of fish and mariculture, including oysters, mussels, shrimp, and sturgeon. But in order for our producers to open European markets, the reform must continue.
The Government is currently planning the following steps to combat the illegal circulation of aquatic biological resources and combat shadow business:
– introduction of digital contracts for the right to special use of water bioresources in fishery water bodies;
– transfer of the procedure for obtaining permits for the special use of aquatic bioresources in fishery water bodies for industrial fishing and experimental fishing to an online format;
– introduction of digital logs of fisheries activity;
– marking of fishing gear.
Draft law No. 9545, which is currently awaiting first reading in the Verkhovna Rada, will allow guaranteeing the legality of the origin of Ukrainian fish. The document will introduce a system of traceability of aquatic biological resources from the place of the catch for sale to the final buyer or export. The control will extend to both the field of commercial fishing and the aquaculture sector (artificial fish farming), and electronic waybills will be used for this.
Aquaculture production is a particularly promising direction of entrepreneurship, taking into account its environmental friendliness. In order to achieve sustainable extraction of aquatic bioresources, the EU reduces fish catch every year. Thus, in 2024, it is planned to reduce the catch in the Mediterranean Sea by 9.5%. In 2022, the volume of the world aquaculture market was 75.6 million tons ($289.6 billion), by 2028, according to international experts, it will reach 100.3 million tons ($421.2 billion). Unfortunately, the Ukrainian market is currently lagging behind the world market in terms of technological level and growth rate – currently we produce only 0.02% of aquaculture products in the world.
We can borrow practices for stimulating business in the field of aquaculture from successful neighbors. Norway, a major global producer, replenishes the state budget by $600 million every year only through auctions for the right to aquaculture activities in the country’s coastal zones. Only 20% of these revenues are kept by the state, 80% are directed to the Aquaculture Fund, which is redistributed to scientific developments and industry support. A similar Fisheries Development Fund can be introduced in Ukraine as part of the state budget fund of Ukraine and filled with funds received from auctions and fines for violation of fishing rules. Further, the money would be allocated to the reproduction of aquatic biological resources, the equipment of modern fish reception points, the purchase of refrigeration units, the renewal of equipment for aquaculture and the development of scientific activities.
Bill No. 8119, which is also pending consideration by deputies, is designed to increase the industry’s investment attractiveness and stimulate the emergence of new enterprises. The document will introduce competitive and transparent auctions for the sale of rights to invest in the development of aquaculture. The auction will take into account the efficiency of economic activity, the impact on the environment, the creation of new jobs, the economic benefit for the state and the possibility of entering export markets.
The last point is critically important for the import-dependent Ukrainian economy: currently 80% of the domestic consumption market consists of fish and fish products imported from abroad. Domestic aquaculture has sufficient potential to change this indicator and leave in the country at least a part of the currency that goes out of the economy of Ukraine every year – which is $389.4 million in 2023 alone.
The country should use its favorable geographical location to open new markets and sell fish and mariculture products to Europe. The fishing industry of Ukraine can become a modern and profitable branch of the economy, which will benefit both entrepreneurs and the state. But for this, the world and European partners expect from us effective solutions aimed at preserving the environment and fighting corruption risks in the industry, so the reform must continue.
The opinion was published in Delo.ua
How to strengthen the safety of passenger and cargo transportation in Ukraine?
The IWG on deregulation, during the recent meeting, considered the problems of state regulation in the field of transportation, and recommended simplifying a number of procedures related to state supervision (control). This decision will make it easier to do business in this area, and at the same time will increase the security of citizens who use these services.
In particular, the IWG recommended to:
To remind, on the website of the deregulation reform a dashboard has been launched that reflects the progress and achievements of the reform. The website also publishes the minutes of meetings of the IWG and it is possible to follow the stages of development of legislative drafts created to implement the decisions of the IWG.
The IWG, created in January 2023, included, in particular, representatives of the ministries of the economy, digital transformation, protection of the environment and natural resources, justice, finance, and the regulatory service.
With the support of the USAID Program “Competitive Economy of Ukraine”, BRDO prepares analytics on the expediency of maintaining or canceling regulations, participates in IWG meetings and the development of relevant regulatory and legal acts.
Networking event “EU for Ukrainian SMEs: Together We Are Resilient!” was held on February 29. The event closed the ‘Together We Are Resilient. Together we are Europe’ communication campaign, which was running from October 2023 to the present day and informed Ukrainians about the support provided by the European Union to small and medium-sized enterprises during the war. Since the beginning of the full-scale Russian invasion, the EU has helped entrepreneurs overcome fundamentally new challenges: from maintaining or reorienting production to military needs, to business relocation, adaptation to work in conditions of limited technological capabilities, labor shortages, loss of sales markets and partnerships.
68% of Ukrainian SMEs continued to work during the war, adapted to work in the conditions of relocation and in the de-occupied territories, restore partnerships, enter the EU markets. Many small and medium enterprises were headed by women and veterans.
❓Why is this important?
The participants of the event were presented with the results of the second foresight session “Small and Medium-sized Businesses in the Process of European Integration: Scenarios and Strategies“. More than 80 foresight participants representing business, government, EU-funded projects, international organisations and experts joined the foresight in October 2023. They discussed the key factors influencing the development of SMEs, identified and described scenarios and strategies for its further development in the context of European integration.
The retention and development of mass entrepreneurship, i.e. small and medium-sized businesses was established as a key factor for positive scenarios.
“Ukraine is fighting off a ruthless aggressor. At the same time, it is working on its recovery, demonstrating amazing resilience and vitality, implementing reforms and preparing for EU accession. This is the choice of the people of Ukraine. The European Union has supported and will continue to support Ukrainians on this path. In the middle of the full-scale war, we are working for our common future. We are at the beginning of a challenging path – negotiations on Ukraine’s accession to the EU and reconstruction. To make this path easier, we have established a new instrument for reliable financial support – the Ukraine Facility worth EUR 50 billion – which enters into force from 1 March”,- said Stefan Schleuning, Head of Cooperation at the EU Delegation to Ukraine.
Hanna Bashniak, head of BRDO’s “Regulatory Policy” sector, spoke at the event about BRDO’s deregulation initiatives, which since the beginning of the full-scale invasion had a significant impact on the adaptation of SMEs to war conditions and helped both entrepreneurs and the budget of Ukraine to save money. Particular attention was paid to the success of the work of the IWG on deregulation, which BRDO joined within the framework of the EU4Business: SME Policies and Institutions Support (SMEPIS) project, implemented by Ecorys in a consortium with GIZ, BRDO and Civitta with the financial support of the European Union. During one year of activity, the IWG on deregulation reviewed 1,323 instruments of state regulation and recommended to get rid of 456 of them altogether. According to BRDO experts, the economic effect of the implementation of the IWG decisions will amount to more than UAH 12 billion.
In recognition of the resilience and achievements of Ukrainian SMEs involved in the EU4Business programmes, Iryna Hubarets, Sector Manager – Competition and Economic Cooperation, Delegation of the European Union to Ukraine, presented Business Recognition Awards 2023 in the following categories:
Under the EU4Business: SME Recovery, Competitiveness and Internationalization programme, more than 1,100 grants totalling EUR 5.5 million were awarded from February 2022 to December 2023 to provide comprehensive support to small and medium-sized businesses, with a total of EUR 7 million in direct grant assistance.
Deregulation of Ukraine’s economy continues. During a joint briefing, Oleksii Kucher, the Head of the State Regulatory Service, and Oleksii Dorohan, CEO of BRDO, spoke about what the 2023 reform was marked by.
✅ SRS reported on the annual results of the structure’s work, its achievements and plans. In 2023, the SRS reviewed 1,229 drafts of regulatory acts of central, regional, and local executive bodies. According to the results of the analysis and calculation of the costs of the implementation of regulations (according to the RIA of the developers of the projects of regulatory acts), approval was refused for 49 of them. Thanks to this, 14.8 billion UAH were saved for business and 15.8 million UAH for the state.
In particular, Oleksii Kucher talked about how the moratorium on business inspections affected entrepreneurs, and what the international experience of the SRS was this year and the way to cooperation with the Regulatory Policy Committee of the Organisation for Economic Cooperation and Development (OECD).
✅ Oleksii Dorohan summarised the annual results of the work of the Interdepartmental Working Group on Deregulation, which includes the Head of the SRS. To remind, in January 2023, the Government created the Interdepartmental Working Group on Deregulation, which has already reviewed 1,323 regulatory instruments for business. Of them, 456 are recommended to be canceled, 584 to be modernised.
In particular, within the framework of the work of the IWG, a large-scale area of regulation was reviewed – the tools contained in the state sanitary norms and rules. 298 tools were detected. According to the results of the review, the IWG proposed to cancel 222 of them, i.e. 74% of the total number. The rest of the tools are recommended to be optimised and brought into line with the current legislation.
With the support of the USAID Program “Competitive Economy of Ukraine”, BRDO prepares analytics on the expediency of maintaining or canceling regulations, participates in IWG meetings and the development of relevant legislation. You can follow the news of the reform on the website ▶️ https://deregulation.me.gov.ua
The full recording of the briefing is available ▶️ https://www.youtube.com/live/47zS1Nh9ZBE?si=4exs14musM_hjP8H
According to the results of the competition “Financial assistance to providers of electronic communication services operating in the de-occupied territories”, organized within the framework of the program ReACT4UA (“Utilization and Implementation of the Association Agreement between the EU and Ukraine in the field of trade”), which is financed by the German Government and implemented by the German federal company “Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH”, 68 winners were selected. They will receive funding for telecom projects in the de-occupied regions of Ukraine.
“We are very pleased to cooperate with the German federal company “Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH “. Germany is a long-standing partner of Ukraine in supporting the development of the sustainable economy of our country. This support was realized, in particular, in our joint project, because according to its results, 68 Ukrainian telecom operators will receive grant support for the development of their business. And this means saved jobs, improved access to the Internet both for the population of the de-occupied territories, and for other businesses, primarily small and medium-sized, which is the basis of the functioning of the Ukrainian economy,” said Ihor Samokhodskyi, head of the “IT&Telecom” sector of BRDO.
In total, the expert commission processed 113 submitted applications, among which 68 winners were selected. The largest number of projects will be implemented in Kyiv (16), Sumy (13) and Kharkiv (11) regions.
50 winning companies use technologies of the xPON family (passive optical networks). These technologies belong to the family of broadband Internet access technologies, in which the distribution network does not contain active components. This means that communication is ensured even in the absence of electricity in the consumer’s premises. Also, xPON allows to provide a connection speed of up to 1 Gbit/c.
It is also worth noting that 17 winning companies are managed by women, and 26 are owned by women.
Reference information
Non-reversible financial support (grants) to Ukrainian telecommunication operators in de-occupied territories is provided within the international cooperation project ReACT4UA (“Utilization and Implementation of the Association Agreement between the EU and Ukraine in the field of trade”), financed by the German Government and implemented by the German federal company “Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH”. The grants were made possible by ad-hoc funding from the German Government. The programme aims to support Ukraine’s economic resilience, recovery and growth, create better conditions for the development of Ukrainian small and medium-sized enterprises (SMEs) as well as support innovation and exports.
The strategic implementer of the programme is the German federal company “Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH”. The implementing partner is Better Regulation Delivery Office (BRDO). The support is given by: The Ministry of Digital Transformation of Ukraine.
The contents are the sole responsibility of BRDO and do not necessary reflect the views of the European Union and the German Government.
#eu4business, #MovingForwardTogether, #gizSME
The preliminary forecasted effect of the deregulation reform increased by ₴2.7 billion – experts of the BRDO estimated.
Such an economic effect will be achieved due to the abolition and digitization of the instruments of state regulation of the economy in 6 areas, in which the Ministry of Internal Affairs, the Ministry of Internal Affairs, the Ministry of Environment, the Ministry of Health, the Ministry of Finance, as well as the Ministry of Strategic Industry and the State Space Agency are responsible for regulatory policy.
❓Entrepreneurs of which industries will save the most?
The economic effect of the deregulation reform for 6 markets will be:
Previously, the preliminary forecast effect of the deregulation reform amounted to ₴10.2 billion and applied to 5 markets.
Follow the news of the reform on the updated website ➡️ https://deregulation.me.gov.ua/
Subscribe to the deregulation digest ➡️ https://forms.gle/fSBrVmgDPSfaqV9n6
To remind, during the year of the deregulation reform, the Government reviewed 1,323 tools for regulating business operations. The Interdepartmental Working Group on Deregulation, created in January 2023, included, in particular, representatives of the Ministries of the Economy, Digital Transformation, Environmental Protection and Natural Resources, Justice, Finance, and the Regulatory Service. With the support of the USAID Program “Competitive Economy of Ukraine”, BRDO prepares analytics on the expediency of maintaining or canceling regulations, participates in IWG meetings and the development of relevant regulatory and legal acts.
The deregulation reform will allow Ukrainian entrepreneurs to save more than ₴10.2 billion. Such an economic effect will be achieved due to the cancellation and digitalisation of the instruments of state regulation of the economy, decisions on which have already been made by the Interdepartmental Working Group on Deregulation.
The amount of savings was calculated by BRDO experts, who joined the work of the IWG on Deregulation within the EU4Business: SME Policies and Institutions Support (SMEPIS) project, implemented by Ecorys in a consortium with GIZ, BRDO and Civitta.
❓ How did we calculate the preliminary forecast economic effect of deregulation for business?
BRDO analysts considered 5 main markets that will be affected by deregulation initiatives: agriculture, construction, IT and Telecom, energy and the sphere of the Ministry of Economy of Ukraine.
For calculations, the method of standard business costs (M-test, or the test of small-sized business) was used in accordance with the Methodology approved by the Resolution of the CMU No. 308.
The expected amount of savings from deregulation was calculated by comparing the financial and time costs of business to fulfill the current regulatory requirements and the new optimised requirements. In the case of digitalisation of the state regulatory instrument, we calculated the difference between the costs of business for two procedures – “paper” and electronic.
We did not take into account the material costs of entrepreneurs for the direct fulfillment of regulatory requirements. Only the administrative costs of the business were calculated – for obtaining primary information about regulatory requirements, organising their implementation, developing and implementing internal procedures, etc.
❓Entrepreneurs of which industries will save the most?
The economic effect of the deregulation reform will be:
Shortly, we’ll calculate how much money will be saved due to the abolition of outdated instruments of state regulation, and how much thanks to digitalisation, as well as which market areas will primarily be affected by the economic effect of deregulation.
Follow the news of the reform on the updated website ➡️ https://deregulation.me.gov.ua/
Subscribe to the deregulation digest ➡️ https://forms.gle/fSBrVmgDPSfaqV9n6
To remind, during the year of the deregulation reform, the Government reviewed 1,323 tools for business regulation. The IWG on Deregulation, created in January 2023, included, in particular, representatives of the Ministries of Economy, Digital Transformation, Environmental Protection and Natural Resources, Justice, Finance, and the State Regulatory Service.
BRDO joined the work of the IWG within the EU4Business: SME Policies and Institutions Support (SMEPIS) project, implemented by Ecorys in a consortium with GIZ, BRDO and Civitta with the financial support of the European Union. The content of this publication is the sole responsibility of SMEPIS and does not necessarily reflect the opinion of the European Union.
Politically exposed persons (or PEP) are natural persons who are national or foreign public figures and figures who perform public functions in international organisations. They are subject to financial monitoring, as well as persons related to them and members of their families.
In October 2023, the new Law of Ukraine No. 3419-IX entered into force, which introduced changes to the legislation on the prevention and combating of money laundering against politically exposed persons. In particular, Ukrainian society was shaken by the adopted norm on the lifelong status of PEPs, which in practice means problems, in particular, with opening and maintaining bank accounts for PEPs and their family members.
Ukraine is on the list of countries with increased corruption risks. Accordingly, the financial monitoring of Ukrainian REPs should be effective, especially in light of the provision of international financial aid for the recovery of Ukraine, because often it is REPs that are mentioned in corruption scandals involving the use of budget funds. However, such financial monitoring should not create pressure on existing and potential PEPs, and should not prevent participation in political life.
On February 6, the National Bank of Ukraine published clarifications on financial monitoring issues. These clarifications, as well as the question of how to improve the process of monitoring politically significant persons, were discussed during the public session organised by the Better Regulation Delivery Office together with the Center for Financial Crime and Security Studies (CFCS) at the Royal United Services Institute (RUSI) as part of the project “Supervising and monitoring Ukraine’s reconstruction funds” (SMURF).
According to the SMURF study, Ukraine is not unique in its desire to build effective financial monitoring of politically exposed persons. According to the Financial Action Task Force (on Money Laundering) (FATF) State of Performance and Compliance Report (April 2022), only 31% of jurisdictions assessed for compliance with the FATF recommendations on public figures fully met the requirements.
Global trends are that banks are increasingly terminating business relations with clients perceived as more risky, in particular with PEPs. Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) standards are often used as justifications, when the real motives may actually be ethical, reputational and commercial.
According to Yulia Yudina, Chief Economist of the Department of Regulation and Methodology of the Department of Financial Monitoring of the National Bank of Ukraine, the approach to financial monitoring of PEPs should be balanced.
Thus, the NBU emphasises on the obligation to use a risk-oriented approach during the financial monitoring of PEPs. In particular, from now on, a high-level risk is established for those PEPs that are foreign public figures, as well as for persons related to them, members of their families and clients, the ultimate beneficial owners of which are the specified persons. Such risk is not automatically established for national PEPs and their related persons, unless such risk has been established based on the results of monitoring business relations of national PEPs (it can be high, medium or low).
During the financial monitoring of PEPs, the monitoring subjects (both banks and non-financial institutions) should carry out the following measures:
It is important that paragraphs 2-4 may not be used in relation to PEPs that have ceased to perform significant public functions. That is, from now on, banks are obliged to review risks and remove from enhanced monitoring those PEPs that have ceased their activities and do not pose high corruption risks, but on the condition that 12 months have passed since the termination of the performance of public functions and if the subject of financial monitoring is convinced that there are no risks.
At the same time, the subject of financial monitoring is obliged to prevent unjustified refusals to provide banking services to REP. The new law introduces a mechanism for responding to such refusals: in the event that such a refusal took place, the subject of financial monitoring is obliged to provide a justified explanation of the reason for the refusal within 5 working days.
Among the key recommendations of the NBU for financial monitoring entities regarding work with PEPs are the following:
The main emphasis of the NBU’s recommendations is that the risk assessment of PEPs by the financial monitoring entity should be dynamic and take into account all the existing circumstances that may affect the risk of money laundering and terrorist financing. To do this, financial monitoring entities should promptly identify and analyse PEPs in order to reassess the level of risks.
In order for this to become possible, the NBU will check compliance by financial monitoring subjects with the requirements for monitoring public persons, in particular from the point of view of compliance with the rights of politically significant persons. The NBU will take into account information on violations held by financial monitoring entities, as well as information received directly by the NBU from market participants, including from the most politically significant persons, but supervision is carried out periodically and there is currently no effective mechanism for the prompt consideration of individual complaints.
The project “Supervising and monitoring Ukraine’s reconstruction funds” (SMURF) invites PEPs to participate in a survey on the problems and obstacles encountered when receiving banking services and undergoing financial monitoring “The Status of PEP as a Catalyst of Bank Rejections”. This survey will allow the project experts to analyse the trends of refusals and the most common reasons for receiving negative responses from banks in order to outline the vector of work with banks to improve PEP monitoring.
In addition, the search for a researcher in the SMURF project is ongoing. The job envisages participation in the formation of new policies that will help solve problems of integrity during the financing of the reconstruction of Ukraine, and the development of a strategy that will guarantee the further implementation of these policies in practice by the government, entrepreneurs and public organisations. Successful candidate will also work on issues of financial monitoring of PEP. Working conditions, responsibilities, a list of skills and competencies required by the candidate – at the link: https://brdo.com.ua/news/doslidnyk-u-proyekt-smurf/.
On December 21, 2023, the Parliament finally adopted draft law No. 7457, which is awaiting the President’s signature. The document should change the approach to the regulation of the technical hemp market so that it corresponds to global practice and EU legislation.
Deregulation transforms hemp into a common agricultural crop without law enforcement oversight.
The USA is a long-time leader in the production of hemp products. Even the first president of the United States, George Washington, was a hemp farmer.
During World War II, the USDA produced the film “Hemp for Victory” to encourage the public to grow the crop to support the war effort. Fibers were used to make parachutes, ropes, shoes and clothes.
The result – during the post-war crisis, many small farmers were able to survive thanks to the cultivation of the hemp plant (Cannabis). In 1950, this agricultural crop gave US farmers a profit of about 1 billion dollars.
Thanks to the development and liberalization of legislation for the cultivation and processing of technical hemp, taking into account its cultivation without the use of plant protection products and with low water consumption, the world markets are constantly growing.
IMARC Group estimates that the global market for industrial hemp will reach $5.4 billion in 2023 and will grow to $19.7 billion by 2032, with a CAGR of 15.1% during 2024-2032.
Due to strict regulation, technical hemp in Ukraine is equated with narcotic substances. This hinders the development of the market, which is promising for the state, in particular due to the potential of using hemp products to supply the army.
Ukrainian varieties of hemp have a low level of tetrahydrocannabinol, a high percentage of fibrous stems and can be used in the military industry. Natural canvas is produced from hemp fibers, from which textiles can be made, including for use in the military sphere. It is durable, antibacterial and mold resistant.
In the Zhytomyr region, kikimores and military footwear – berets and sneakers – are already being produced from hemp fiber for the Ukrainian military. Composite materials for parts of the aviation industry can also be made from hemp.
For example, the Canadian company Hempearth developed the world’s first “hemp” aircraft, Hemp. Its advantage is that it is lighter compared to aluminum or fiberglass. The result is fuel savings. Ukrainian aircraft designers should use this important experience.
In addition, in 2015, the National Academy of Agricultural Sciences investigated the use of hemp components for the production of gunpowder. Scientists have proven that such powder has strong ballistic characteristics and is resistant to moisture.
Ukrainian entrepreneurs produce flour, protein and oil from hemp, as well as high-calorie energy bars that are supplied to the military. Ropes are made from hemp fibers, which are used in insulation, decoration and decoration of premises, for rescue purposes and insulation of pipelines.
Among natural fibers – linen, cotton, silk, wool, ramie – hemp fiber is the strongest, which is why it is still used for the production of ropes, ropes and tarpaulins. However, the main producing countries are Canada, China and France. By developing its own production, Ukraine can compete with them.
With the development and deregulation of the hemp production market, Ukraine can become a leading exporter of products with high added value. In Ukraine, the issue of regulating the circulation and use of cannabis needs to be resolved long ago.
BRDO has been investigating the market for technical hemp since 2020. The result was the green paper The Market for Technical Hemp. Farmers’ interest in this market is due to the high profitability of hemp and the demand for hemp products.
This market is controlled by the Ministry of Internal Affairs, the State Medical Service and the Ministry of Health, and should be controlled by the Ministry of Agrarian Policy.
The Ministry of Internal Affairs gives permission for the use of premises intended for the circulation of narcotic drugs, psychotropic substances and precursors, to which technical hemp is unjustifiably included, and controls crops. The State Medical Service issues a license for the cultivation of hemp and sets annual quotas for its cultivation.
Revision of state regulatory instruments will make the sector attractive for investment and give impetus to the development of hemp production.
The material was initially published in the “Ekonomichna Pravda“
The Government of Ukraine is completing an important stage in the implementation of a unified standard for the certification of mine action operators and mine action processes. The Cabinet of Ministers approved this experimental project on February 2, 2024. The BRDO team participated in its development.
Ukraine needs to attract as many mine action operators as possible – both Ukrainian and foreign. According to the data of the State Emergency Service, as of February 17, 2023, the total area of the territories of Ukraine that may be contaminated by explosive objects (EXP) as a result of the military aggression of the Russian Federation is about 174,000 km2.
Accordingly, the process of certifying operators should be optimised and transparent – less bureaucracy and more clarity in the rules for all participants in the process. This will contribute to the accelerated demining of territories and the formation of a competitive market for demining services, as well as ensure cost savings.
In addition, mine action operators are small and medium-sized entrepreneurs. The capacity of existing operators is not comparable to the scale of the current challenges. Demand is increasing, but not supply: in 2021, 4 operators were certified, in the next 1.5 years of full-scale war – only 18. As of the same beginning of 2023, the total number of PMD operators was 23. Thanks to the experimental project, access to new ones will be possible players to the market who are faster to clear agricultural fields and other areas where business can develop.
This experiment is designed to harmonize certification approaches for all certification centers. Until now, there were differences in requirements between the centers of the Ministry of Defense and, for example, the State Emergency Service. Now, any operator, regardless of the choice of the certification center, is required to provide a single set of documents and go through standardized procedures. This simplification minimizes the bureaucratic burden and contributes to the digitization of certification processes.
In the Procedure for implementing the experimental project:
In addition, the provisions of the Procedure for the implementation of the experimental project set the validity period of the certificate of conformity in the case of initial certification – 3 years, and in the case of re-certification – 5 years. In addition, exceptional grounds for termination or suspension of the certificate are defined.
The procedure for the implementation of the experimental project was developed by the Ministry of Economy with the participation of BRDO experts in consultation with other state bodies, in particular with the Ministry of Defense, the State Emergency Situations Service, the State Security and Transport Service, and the involvement of non-governmental operators and Ukrainian and international experts in the field of mine action. The experimental project is designed for 2 years.
Experts of BRDO joined the development of an experimental project within the framework of the EU4business: SME Policies and Institutions Support (SMEPIS) project, implemented by Ecorys in a consortium with GIZ, BRDO and Civitta with the financial support of the European Union. The content of this publication is the sole responsibility of SMEPIS and does not necessarily reflect the opinion of the European Union.
On January 26, the Government of Ukraine, for the first time in history, decided to lease the water spaces of the Suhyi lyman (a bay with sea water, Odesa region).
The Cabinet of Ministers has issued an order to hold an auction, the winner of which will be able to conclude a lease agreement for the use of the water area for the purpose of carrying out economic activities in the field of mariculture.
This news signals positive changes for representatives of the aquaculture products market.
Ukraine has more than 1 million hectares of water ples, suitable for use by producers, and therefore has a great potential for increasing the production of aquatic bioresources and the development of aquaculture in general.
❓ How should the state further promote the development of the industry?
The Verkhovna Rada of Ukraine has registered draft law No. 8119 “On Attracting Investments in the Development of the Fisheries Industry”, developed by the Ministry of Agrarian Policy and Food of Ukraine, the State Agency for Land Reclamation and Fisheries of Ukraine, and the BRDO within the framework of the USAID Program for Agrarian and Rural Development project – AGRO.
The Parliament Committee on Agrarian and Land Policy recommended adopting as a basis the text of the document aimed at ensuring the openness, publicity and transparency of the procedure for attracting investments in the development of the fisheries sector, including aquaculture.
❓ Why is this important?
The implementation of the provisions of draft law No. 8119 will for the first time allow the state to draw up lists of specific objects to attract investments, as well as to determine the necessary investment volumes for such objects.
Equal opportunities for access to facilities, investment attraction, control and monitoring of compliance with legislative requirements, contractual legal relations will contribute to the development of the fishery industry and the growth of the economic potential and competitiveness of the production of aquatic biological resources and products from them in Ukraine.
We call on people’s deputies to support and pass draft law No. 8119.
The full-scale aggression of the Russian Federation did not make Ukrainians doubt their European choice, on the contrary, it accelerated European integration. Almost two years ago, on February 28, 2022, Ukraine applied to join the EU. On November 8, 2023, in its Communication on EU enlargement policy, the European Commission recommended the European Council to start accession negotiations with Ukraine, and on December 14, 2023, the Council decided to start them.
❓What “homework” from European institutions have Ukrainian policymakers already completed?
❓How did the Association Agreement affect the process of adapting Ukrainian legislation to European legislation?
❓How is this process useful for Ukrainian business?
BRDO CEO Oleksii Dorogan gave answers to these and other questions in the publication of Forbes Ukraine. Read further (in Ukrainian) about the creation of better conditions for business development and investment attraction, which will be achieved by fulfilling the tasks of the IWG on deregulation.
BRDO joins the work of the IWG within the EU4business: SME Policies and Institutions Support (SMEPIS) project, which is implemented by Ecorys in a consortium with GIZ, BRDO and Civitta with the financial support of the European Union. The contents of this publication are the sole responsibility of SMEPIS and do not necessarily reflect the views of the European Union..
Launch event of a CFCS at RUSI project SMURF in cooperation with expert-analytical center BRDO.
15:00 – 16:30 EET
06 February 2024
Join us for the launch of the series of anti-money laundering events, run in partnership with the BRDO, on the financial monitoring of the politically exposed persons (PEPs) in Ukraine. The event will focus on the implementation of the new law on PEPs, which was passed in October 2023, in discussion with representatives of the National Bank of Ukraine and YouControl.
This event will focus on a specific aspect of the implementation of the law – the measures used for the identification and monitoring of the PEPs. The NBU is preparing the recommendations to the market, which we will be discussing in details to understand the new approach.The NBU is preparing recommendations to the market, which we will be discussing in details to understand the new approach.
Speakers
Moderator: Oleksii Dorogan, BRDO CEO.
How to attend
This event is open to all. Please register to attend online: https://forms.gle/3jChMPR57VdV8jdd9. After registering, you will receive a confirmation email containing information about joining the webinar.
The webinar will be held in Ukrainian with no simultaneous translation.
For information:
The project “Supervising and monitoring Ukraine’s reconstruction funds” (SMURF) is an initiative led by CFCS in partnership with BRDO in Ukraine. The SMURF project aims to expand the capabilities of the “second line of defense” of Ukraine, civil society, to gather expert knowledge and tools that will enable it to monitor the proper distribution of funds and prevent kleptocracy and corruption. The project started in November 2022 with the support of NED.
Better Regulation Delivery Office (BRDO) is an independent think tank, a key platform for united reforms organisations which share values to implement changes. BRDO’s experts participate in the development of public policies to transform Ukraine into a European democracy with good governance and a strong economy.
Deregulation reform has been underway in Ukraine for a year now: the Government is reducing the burden on business by cancelling or digitising various licenses, permits, approvals, etc. For this purpose, in January 2023, the Interdepartmental Working Group on Deregulation was established, which has already reviewed 1,323 regulatory instruments for business.
Now the IWG on deregulation has launched a survey among entrepreneurs to find out their opinion about the instruments of state regulation. The received answers will help to assess the effectiveness of the IWG’s work and plan its next steps.
We invite business representatives to join and fill out the questionnaire at the link: https://deregulation.online/
The updated resource https://deregulation.me.gov.ua/ was launched in December, which contains full information about the progress, achievements and goals of the deregulation reform.
BRDO experts join the work of the IWG within the EU4business: SME Policies and Institutions Support (SMEPIS) project, which is implemented by Ecorys in a consortium with GIZ, BRDO and Civitta with the financial support of the European Union. The contents of this publication are the sole responsibility of SMEPIS and do not necessarily reflect the views of the European Union. The development of a new reform website and business surveys are also being carried out within the project.