Business calls for adherence to European standards without crossing lines

06/ 07/ 2021

The business community, united by the European Business Association and the American Chamber of Commerce of Ukraine, has always supported Ukraine’s desire to bring its legislation in line with European legislation. Business experts have many times analyzed the draft laws that bring Ukrainian norms in line with the European ones. It is surprising that the focus of some initiatives is not on creating a high-quality regulation, but rather a strict one, which does not promote business development, but increases the pressure on entrepreneurs. On June 1, the Verkhovna Rada of Ukraine adopted in the first reading the draft law “On Amendments to Certain Laws of Ukraine on Public Health Protection from the Harmful Effects of Tobacco” (№ 4358 dated 10.11.2020) aimed at amending the regulation of production and sales of tobacco products and e-cigarettes. It is worth noting that this draft law introduces much stricter regulation than the European one, which will negatively affect business, as it will require appropriate changes in production and business processes. Meanwhile, some MPs report the registration of amendments to finalize the draft law before the second reading with norms that have already been rejected by the decision of the Committee on Public Health, Medical Care and Health Insurance in the Draft Law on Amendments to Certain Laws of Ukraine on the protection of public health from the harmful effects of tobacco (№2813). Thus, we are talking about the registration of amendments to the introduction of standardized packaging of tobacco products and a ban on the display of tobacco products at the salespoints. As estimated by PwC, losses from the introduction of standardized packaging amounted to UAH 15.3 billion for budgets of all levels for 5 years in 2020. According to the conclusions of the scientific and legal examination conducted by the Research Institute for Intellectual Property, the introduction of standardized packaging of tobacco products will violate the rights of consumers under the Law of Ukraine On Consumer Protection. Besides, the introduction of standardized packaging will increase the smuggling and counterfeiting of tobacco products, the level of which has already reached a record 12.8%. The ban on the display of tobacco products at the salespoints will also have negative consequences. According to the experience of European countries, where such a ban was introduced, about 10% of outlets (more than 7,000 kiosks) were closed due to a lack of funds to redecorate shop windows and halls. It also means that 15-20 thousand citizens of Ukraine will lose their jobs. Besides, the experience of these countries has shown that the display ban did not affect the level of smoking in these countries. That is, the ban is ineffective and will not lead to the achievement of declared goals but will destroy small and medium-sized businesses. To prevent the adoption of excessive regulation, which is impossible to implement, and will disrupt production, and reduce budget figures (while the state is looking for ways to replenish it), business proposes to involve EBA and Amcham experts to revise draft law № 4358, in creating a quality legislative field with joint efforts. Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

On June 1, the Verkhovna Rada of Ukraine adopted in the first reading the draft law “On Amendments to Certain Laws of Ukraine on Public Health Protection from the Harmful Effects of Tobacco” (№ 4358 dated 10.11.2020) aimed at amending the regulation of production and sales of tobacco products and e-cigarettes. It is worth noting that this draft law introduces much stricter regulation than the European one, which will negatively affect business, as it will require appropriate changes in production and business processes.

Meanwhile, some MPs report the registration of amendments to finalize the draft law before the second reading with norms that have already been rejected by the decision of the Committee on Public Health, Medical Care and Health Insurance in the Draft Law on Amendments to Certain Laws of Ukraine on the protection of public health from the harmful effects of tobacco (№2813). Thus, we are talking about the registration of amendments to the introduction of standardized packaging of tobacco products and a ban on the display of tobacco products at the salespoints.

As estimated by PwC, losses from the introduction of standardized packaging amounted to UAH 15.3 billion for budgets of all levels for 5 years in 2020. According to the conclusions of the scientific and legal examination conducted by the Research Institute for Intellectual Property, the introduction of standardized packaging of tobacco products will violate the rights of consumers under the Law of Ukraine “On Consumer Protection”. Besides, the introduction of standardized packaging will increase the smuggling and counterfeiting of tobacco products, the level of which has already reached a record 12.8%.

The ban on the display of tobacco products at the salespoints will also have negative consequences. According to the experience of European countries, where such a ban was introduced, about 10% of outlets (more than 7,000 kiosks) were closed due to a lack of funds to redecorate shop windows and halls. It also means that 15-20 thousand citizens of Ukraine will lose their jobs. Besides, the experience of these countries has shown that the display ban did not affect the level of smoking in these countries. That is, the ban is ineffective and will not lead to the achievement of declared goals but will destroy small and medium-sized businesses.

To prevent the adoption of excessive regulation, which is impossible to implement, and will disrupt production, and reduce budget figures (while the state is looking for ways to replenish it), business proposes to involve EBA and Amcham experts to revise draft law № 4358, in creating a quality legislative field with joint efforts.