Following the lobbying efforts of the European Business Association (hereinafter – the EBA), the Cabinet of Ministers of Ukraine (hereinafter – the CMU) adopted Resolutions No215 and No216 on 1 July 2014. Resolution No215 postpones until 1 July 2015 the mandatory use of the technical regulations for medical devices adopted by CMU Resolutions No753, No754 and No755, dated 2 October 2013 (hereinafter – the Technical Regulations). Resolution No216 stipulates that all medical devices are subject to 7% VAT.
Background: On 1 May 2014, the updated texts of the Technical Regulations came into force. They were to be made mandatory starting from 1 July 2014. It was actually the third attempt since as far back as 2008 to make the new Technical Regulations in the sphere mandatory.
However, over nearly the last six years all the necessary terms were not fulfilled to ensure the faultless supply of medical devices into Ukraine. First of all, the unavailability of unified and clear Ukrainian regulation prevented all the parties being responsible during the conformity evaluation procedure and from basic transparent tariffs; no harmonized standards base and conditions for the recognition by Ukraine of medical devices’ compliance in case they comply with those standards which haven’t been adopted in Ukraine; no legislative terms for the recognition of medical devices-related certificates confirming compliance with EU legislation; shortage of relevant resources of the assigned conformity evaluation bodies in Ukraine to ensure the timely supply of the whole amount of medical devices as needed. Such a situation shrank the amount of internationally produced high-tech medical devices supply into Ukraine; manufacturers were actually deprived of the opportunity to plan their activities in Ukraine and did not consider Ukraine as a priority country for their business activities. As a result, a number of entities decided to select other countries as the destination of their products’ supply. This fact reduced medical products’ availability for the Ukrainian population.
In addition, importers faced another problem. On 1 July 2014, CMU Resolution No118, dated 23 April 2014, expired and thus the list of medical devices subject to 7% VAT was also due to expire. The new list has not been adopted as of 30 June 2014. Taking into account the social importance of these products, the EBA insisted on privileged taxation for them, with the same single privileged VAT rate as established for medicines. The general increase in the price of foreign medical devices, due to a significant shift in the currency rate, has added to the issue’s topicality.
The EBA made appeals with a detailed description of the existing problems and requests to facilitate their solution to all responsible state authorities. Besides, the problems were explained extensively to senior government officials during numerous meetings with the EBA’s participation. Recently, the EBA actively cooperated with Mr. Mykhajlo Pasichnyk, Head of the State Administration of Ukraine for Medicinal Products.
We are delighted to inform you about the adoption of the above-mentioned Resolutions No215 and No216 at the special extraordinary meeting of the CMU. Their enforcement will ensure that a negative impact on the medical devices’ market of Ukraine in the nearest months is avoided.
We hope that the period of the Technical Regulations’ postponement will appear sufficient to solve the above-mentioned problems. Their timely solution is a guarantee for the effective implementation of the Technical Regulations further on, and for the supply of the best quality and high-tech medical devices to favour the Ukrainian population.
We would like to thank all EBA Health Care Committee members and representatives of governmental authorities who supported and contributed to the positive results. At the same time the EBA will continue its lobbying activity aimed at creating a business friendly environment in Ukraine.