200 days of war – outcomes for business
On September 11, 200 days have passed since the beginning of the full-scale invasion of Russian troops on the territory of our state. For more than half a year, Ukrainian society – businesses and citizens – have been fighting against the aggressor for the right to live and work in our country, for our independence, and for a better future.
Despite the extremely difficult business conditions in Ukraine, companies manage to adapt to the challenges of the war. Understanding their responsibility to employees, partners, and consumers, as well as their role in supporting the economy, companies are trying to resume their routine work. As of August, all member companies of the European Business Association that we surveyed have resumed their work. Of them, 49% resumed their activities in full, and another 51% – partially.
At the same time, business continues to bear losses as a result of hostilities. At least 38% of our companies have suffered direct losses, while all businesses suffer from indirect losses due to broken supply chains and logistics, a drop in purchasing power, population migration, etc. However, the last 200 days brought not only difficulties and trials to the business – we also see certain encouraging developments.
So what changes have helped businesses continue to operate and maintain the economic front?
Undoubtedly, the greatest achievement is obtaining the status of a candidate for EU membership. This is an important political signal for Ukraine and a serious incentive for reforms. Unblocking the ports of Odesa for the “grain corridor” is another economic victory for Ukraine. About 100 vessels have already used this route. Road transport will now take advantage of the “transport visa-free regime” with the EU, and for all companies engaged in foreign economic activity, the “customs visa-free regime” will start in October, which will speed up procedures and reduce bureaucracy.
The Ukrainian energy system was included in the unified energy system of Europe, which made it possible to start exporting it to EU countries. According to the Government’s estimates, Ukraine will be able to receive more than UAH 70 billion per year from the sale of electricity. It was also possible to cancel the list of critical imports and the relevant currency restrictions, which made it possible to resume foreign economic activity. Operations on the capital market were also resumed.
In the HR field, the administration of labor relations was simplified, which made it possible to support employees and ensure the smooth operation of enterprises. A mechanism for booking employees was developed and the valid bookings were extended for another two months. Also, the need to obtain a permit for reservists to move between regions was canceled, and the provision of mandatory military registration of women, which caused many questions in business, was postponed for a year.
In the pharmaceutical industry, a strategic document was adopted – the new Law of Ukraine “On Medicinal Products”, designed to modernize legal relations in the field of medicinal products and adapt Ukrainian legislation to EU regulations and practices. In addition, the widespread introduction of e-prescription for medicinal products has begun, and the issue of providing compassionate medicinal products to patients has also continued.
Several positive changes also took place in the payment market. In particular, the Law of Ukraine “On Payment Services” entered into force, the norms of which change outdated approaches to the legal regulation of the payment market. In addition, deadlines were established before all merchants must ensure the possibility of making cashless payments. In addition, the mandatory use of an e-signature on a protected data storage carrier has been postponed.
In addition, it was possible to prevent the introduction of an additional 10% import duty, which was opposed by businesses, to ensure a stable system of registration of veterinary medicinal products and to cancel the licensing of wheat exports. The framework Law on Waste Management was also adopted, which creates a waste management system by analogy with the system that currently exists in the EU member states. A moratorium on scheduled inspections was introduced as well as the possibility to continue the operation/receive new permit documents based on the submission of a declaration.
What else can be done to support the business?
To facilitate the planning of business activities, it is necessary to adopt as soon as possible a draft law on the booking of employees for the period of mobilization in wartime, which excludes the presence of a mobilization task as the only prerequisite for the booking of employees, as well as to sign the resolution on “e-Business trip” or another effective mechanism as soon as possible to grant business the opportunity to make short-term business trips abroad.
It is extremely important for businesses to ensure predictable tax and financial policies during martial law, and to maintain constructive interaction between the government and business so that companies are informed of the government’s plans and can respond timely.
Further development of border infrastructure and the introduction of an electronic queue for road transport are needed to improve the capacity of railway and road western border crossings. We also hope for continued unblocking of ports and ensuring safe corridors for other cargoes, not only grain.
Currently, the issue of blocking customs clearance and further supply to health care facilities of medicines as humanitarian aid, which were imported into the customs territory of Ukraine as commercial cargo before February 24 and are in customs warehouses, has not yet been resolved, as previously reported by the Association.
An important reform will be the signing of the “industrial visa-free agreement with the EU” (on mutual recognition of conformity assessment and labeling procedures) and its expansion to new sectors, as well as the continuation of deregulation. An urgent issue is the development and adoption of laws that will stimulate the development of our military and security sector, namely the law on arms circulation, private detective activity, and private-state partnership in the defense industry.
Business is waiting for the reform of the system of payment of deductions from technology and media, as well as for the updating of the legislation on the protection of consumer rights and electronic commerce to harmonize them with EU legislation. Not only during wartime but also permanently, business needs to update the labor code, as well as the development and implementation of pension reform.
The Association’s proposals to increase the limits for non-cash payments abroad using hryvnia corporate payment cards and to simplify the conditions for transferring foreign currency funds to pay interest to foreign investors following concluded credit agreements remain extremely relevant.
It is worth simplifying the reporting system for payment transactions made with the use of corporate payment cards and satisfying the need of insurers to fulfill their obligations to pay reinsurance premiums under reinsurance contracts with non-resident reinsurers, supplementing the list of exceptions to the ban on cross-border transfers of currency values with the participation of clients postal operators.
In the environmental sphere, it is necessary to resolve the issue of the practical implementation of the exemption of enterprises from paying the eco-tax through the legislative establishment of a list of territories where active hostilities are taking place or those that are under occupation. It is also necessary to update the environmental impact assessment (EIA) procedure and deregulate environmental legislation.
In the energy sector, it is necessary to ensure the continuity of legally provided guarantees for RES investors, prevent the introduction of any retrospective changes to the current legislation, and eliminate artificial obstacles for payments to prevent the bankruptcy of enterprises, to promote further integration of the energy market of Ukraine with the European market.
The association expects to continue effective dialogue with state bodies to resolve these issues and is ready to provide its expert support in the future. The Association community continues to work and support Ukraine in this difficult time and plans to do so in the future – 91% of our companies will continue to work on the Ukrainian market in 2023.
We thank our heroic defenders, volunteers, entrepreneurs, and all citizens who are fighting back! We believe in Ukraine and work for victory!
