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New requirements for the product labeling may cause the shortfall in the product supply

11/ 02/ 2020
  Having set a course for the European integration, Ukraine undertook the obligations to align the national legislation with the EU requirements. This commitment also includes the obligation to apply the Latinized units of measurement to the products, for example, to use “Kg”, “S”, “V” instead of the abbreviation “Кг”, “C”, “B” for the indication of kilograms, seconds and volts. This change is made in order to remove the technical barriers in the trade, so the products made in Ukraine can freely enter the EU market and vice versa. In 2015 the Ministry of Economy adopted the relevant Order №914 and some companies and industries, such as the producers of equipment and electronics, did not have any problems with its execution. Others had to turn for the additional clarification and suggest the changes to the industry-specific legislation. Currently, the Order entails the possibility to voluntarily provide the Ukrainian translation of units of measurement along with their Latinized versions. At the same time, some industries cannot fulfill the requirements of this Order as their industry-specific legislation allows product labeling solely in Ukrainian. Thus, the collision continues to exist. For example, the producers of veterinary preparations, crop protection products and others have difficulties with the implementation of the respective rules. Therefore, there is a debate on this Order. Thus, some industries insisted on the necessity to meet the requirements for labeling solely in Latin alphabet, others asked to remove the discrepancies in the legislation and allow them to label the products solely in Ukrainian, in accordance with the industry-specific legislation. Order №914 was amended several times throughout four years. However, unfortunately, no systematic solution was found to comply with the aspirations of Ukraine for the European integration from the one side, and to resolve the discrepancy of this Order with other legislative acts from the other side. As of today, according to the current edition, all the products which will be placed in the Ukrainian market after January 1, 2021, shall have obligatorily Latinized labeling and may additionally have Cyrillic labeling. However, this solution does not satisfy all the industries. At the same time, recently the Ministry of Economy has published a draft amendment to the Order №914, which will worsen the situation if adopted. In particular, a newly proposed edition requires that all products shall be labeled with units of measurements in Latinized and Cyrillic versions. According to the EBA member companies, a proposed edition does not solve the existing legislative discrepancies for a range of industries ( for example, the spheres of agrochemicals and veterinary preparations, etc), but on the contrary it significantly worsens the conditions of doing business for those industries and companies that already have fulfilled the requirements outlined in the current edition of Order №914 and use Latinized labeling. This matter is especially critical for companies that produce small devices, for example, headphones, USB drives, cameras, mobile phones, and other small electronics. It is often impossible to put the labels and signs in several languages. This requirement is often fulfilled only by the creation of a separate manufacturing line for products intended for the Ukrainian market. This, in turn, would cause an increase in the prime costs of those products for the Ukrainian customer and shorten the range of products that are legally supplied to Ukraine. Therefore, the European Business Association does not support the proposed draft Order as the one that worsens the conditions of doing business in Ukraine. As the adoption of this Draft will not neutralize the risks for the business activity. At the same time, the business community is ready for the dialogue to discuss the specifics of the application of Labeling Rules in different industries in order to develop a balanced solution, which from the one side, does not contradict the course of Ukraine for the European integration and from the other side does not complicate the conditions for doing business in Ukraine.

Having set a course for the European integration, Ukraine undertook the obligations to align the national legislation with the EU requirements. This commitment also includes the obligation to apply the Latinized units of measurement to the products, for example, to use “Kg”, “S”, “V” instead of the abbreviation “Кг”, “C”, “B” for the indication of kilograms, seconds and volts. This change is made in order to remove the technical barriers in the trade, so the products made in Ukraine can freely enter the EU market and vice versa. In 2015 the Ministry of Economy adopted the relevant Order №914 and some companies and industries, such as the producers of equipment and electronics, did not have any problems with its execution. Others had to turn for the additional clarification and suggest the changes to the industry-specific legislation.

Currently, the Order entails the possibility to voluntarily provide the Ukrainian translation of units of measurement along with their Latinized versions. At the same time, some industries cannot fulfill the requirements of this Order as their industry-specific legislation allows product labeling solely in Ukrainian. Thus, the collision continues to exist. For example, the producers of veterinary preparations, crop protection products and others have difficulties with the implementation of the respective rules.

Therefore, there is a debate on this Order. Thus, some industries insisted on the necessity to meet the requirements for labeling solely in Latin alphabet, others asked to remove the discrepancies in the legislation and allow them to label the products solely in Ukrainian, in accordance with the industry-specific legislation. Order №914 was amended several times throughout four years. However, unfortunately, no systematic solution was found to comply with the aspirations of Ukraine for the European integration from the one side, and to resolve the discrepancy of this Order with other legislative acts from the other side.

As of today, according to the current edition, all the products which will be placed in the Ukrainian market after January 1, 2021, shall have obligatorily Latinized labeling and may additionally have Cyrillic labeling. However, this solution does not satisfy all the industries.

At the same time, recently the Ministry of Economy has published a draft amendment to the Order №914, which will worsen the situation if adopted. In particular, a newly proposed edition requires that all products shall be labeled with units of measurements in Latinized and Cyrillic versions.

According to the EBA member companies, a proposed edition does not solve the existing legislative discrepancies for a range of industries ( for example, the spheres of agrochemicals and veterinary preparations, etc), but on the contrary it significantly worsens the conditions of doing business for those industries and companies that already have fulfilled the requirements outlined in the current edition of Order №914 and use Latinized labeling.

This matter is especially critical for companies that produce small devices, for example, headphones, USB drives, cameras, mobile phones, and other small electronics. It is often impossible to put the labels and signs in several languages. This requirement is often fulfilled only by the creation of a separate manufacturing line for products intended for the Ukrainian market. This, in turn, would cause an increase in the prime costs of those products for the Ukrainian customer and shorten the range of products that are legally supplied to Ukraine.

Therefore, the European Business Association does not support the proposed draft Order as the one that worsens the conditions of doing business in Ukraine. As the adoption of this Draft will not neutralize the risks for the business activity. At the same time, the business community is ready for the dialogue to discuss the specifics of the application of Labeling Rules in different industries in order to develop a balanced solution, which from the one side, does not contradict the course of Ukraine for the European integration and from the other side does not complicate the conditions for doing business in Ukraine.

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