Business asks to remove the risks of additional administrative and fiscal pressure in consumer protection legislation

06/ 04/ 2023

At the beginning of the year, the European Business Association strongly opposed specific provisions of Draft Law No.6134 On Consumer Protection, as they contradict those of European directives, increase regulatory pressure on business, and contain corruption and other risks. Among the provisions that are strongly opposed by business is the creation of two new, rather monopolistic authorized bodies – the Union of Consumer Associations and the Commission for Alternative Dispute Resolution. They are supposed to have extended atypical powers to control business activities and hold them accountable, for example, to conduct additional business inspections; impose fines; determine the amount of compensation; conduct mandatory paid training for entrepreneurs; etc. The draft law also contains proposals to empower the competent authority to conduct control checks of businesses regarding the designation of persons responsible for consumer protection and to impose fines for failure to comply with these requirements or late compliance. Surely, there are similar organizations in European countries, but they have no influence on the activities of business entities. At the same time, there are also risky proposals to introduce alternative dispute resolution and decision-making by the Commission based on the Unions conclusions. However, according to Ukrainian law, the amount of monetary compensation for non-pecuniary damage can only be determined by a court. Business concerns have been exacerbated by the recently registered draft law No. 9095 on strengthening liability for violations of consumer protection legislation. Thus, the document proposes to increase the number of fines for certain types of administrative offences and to establish criminal liability for providing false information about products. It is worth noting that businesses are ready to be held accountable for actions or omissions that have had a particular impact on consumers. At the same time, given that the country has not yet established a foundation for the rule of law and an effective anti-corruption system, there are concerns that such a provision could unfortunately lead to abuse by regulatory authorities and the possibility of undue pressure on business. Therefore, the European Business Association appeals to Dmytro Natalukha, Chairman of the VRU Committee on Economic Development, and the Chairmen of other VRU Committees with a proposal not to support Draft Law No.9095 and Draft Law No.6134 with existing provisions that may contribute to excessive administrative and fiscal pressure on business. As for the latter document, as the community has already noted, it should be sent for revision, taking into account the reservations and comments of businesses, and only then put to the vote in the Parliament. And, in parallel, we as a country must work on establishing the rule of law so that businesses feel and understand that public authorities protect business interests regardless of circumstances.

At the beginning of the year, the European Business Association strongly opposed specific provisions of Draft Law No.6134 “On Consumer Protection”, as they contradict those of European directives, increase regulatory pressure on business, and contain corruption and other risks.

Among the provisions that are strongly opposed by business is the creation of two new, rather monopolistic authorized bodies – the Union of Consumer Associations and the Commission for Alternative Dispute Resolution. They are supposed to have extended atypical powers to control business activities and hold them accountable, for example, to conduct additional business inspections; impose fines; determine the amount of compensation; conduct mandatory paid training for entrepreneurs; etc.

The draft law also contains proposals to empower the competent authority to conduct control checks of businesses regarding the designation of persons responsible for consumer protection and to impose fines for failure to comply with these requirements or late compliance. Surely, there are similar organizations in European countries, but they have no influence on the activities of business entities.

At the same time, there are also risky proposals to introduce alternative dispute resolution and decision-making by the Commission based on the Union’s conclusions. However, according to Ukrainian law, the amount of monetary compensation for non-pecuniary damage can only be determined by a court.

Business concerns have been exacerbated by the recently registered draft law No. 9095 on strengthening liability for violations of consumer protection legislation. Thus, the document proposes to increase the number of fines for certain types of administrative offences and to establish criminal liability for providing false information about products. It is worth noting that businesses are ready to be held accountable for actions or omissions that have had a particular impact on consumers. At the same time, given that the country has not yet established a foundation for the rule of law and an effective anti-corruption system, there are concerns that such a provision could unfortunately lead to abuse by regulatory authorities and the possibility of undue pressure on business.

Therefore, the European Business Association appeals to Dmytro Natalukha, Chairman of the VRU Committee on Economic Development, and the Chairmen of other VRU Committees with a proposal not to support Draft Law No.9095 and Draft Law No.6134 with existing provisions that may contribute to excessive administrative and fiscal pressure on business. As for the latter document, as the community has already noted, it should be sent for revision, taking into account the reservations and comments of businesses, and only then put to the vote in the Parliament. And, in parallel, we as a country must work on establishing the rule of law so that businesses feel and understand that public authorities protect business interests regardless of circumstances.