First 100 days of VRU: outlook

06/ 12/ 2019

Almost half, namely 46% of the CEOs of the EBA member companies evaluated the work of the newly elected Verkhovna Rada of Ukraine as satisfactory. Another 32% rated the work of the new MPs negatively and 22% - positively. These are the results of a survey of the top managers of the EBA member companies on the results of the first 100 days of Parliaments work. One hundred days is not too long, but it is a time when the first conclusions can be made. This period can be characterized in one word - turbo mode. During the first hundred days, the deputies took an extremely fast pace of preparation and elaboration of legislative initiatives. So, what changes have already been introduced by the Verkhovna Rada, and what has been left out of the attention of MPs? AGROCHEMICALS It is extremely important for the agrochemical business to adopt by the end of the year a draft Law No. 2289 that will remove restrictions on the importation of CPPs samples for state testing and research purposes and bring current legislation in line with best international practices. ANIMAL HEALTH The new edition of the Law on Veterinary Medicine is a top priority for animal health companies that are looking for fruitful cooperation with Parliament to update the veterinary legislation. GRAIN AND OILSEEDS In this sphere, there is an urgent need for a legislative decision to renew VAT refunds on soybean and rapeseed exports. EBA Grain and Oilseeds Committee members are awaiting the adoption of draft Law No. 2446, which would allow fair competition in the agrarian market. ELECTRONIC PAYMENTS The President of Ukraine has signed the Laws of Ukraine 128-IX, 129-IX on the de-shadowing of payments in the sphere of trade and services related to fiscalisation and other important aspects of the use of cash registers. The draft law No. 2179 was adopted in the first reading, which proposes to comprehensively improve the legislation on financial monitoring, in particular on the introduction of terminology commonly accepted in the AML EU Directives; applying a risk-oriented and case-based approach; raising the threshold and reducing the number of signs of mandatory reporting of suspicious transactions. At the same time, the draft Law does not sufficiently address several issues related to the identification of those clients who use electronic money (EG - an anonymous payment instrument by definition), which needs further improvement of the legislative regulation. INFORMATION TECHNOLOGIES Currently, issues related to the IT industry are under discussion within working groups in the Verkhovna Rada. These include, in particular, the development of a new Labour Code, the introduction of contractual relations, and the implementation of the Law on Personal data protection. To provide a supportive environment for IT business and industry development, it is necessary to focus on developing effective solutions to these issues. LOGISTICS AND INFRASTRUCTURE The adopted Law of Ukraine On Concession No. 155-IX now allows to regulate at the legislative level the issues of public-private partnerships, the attraction of private domestic and foreign investments. This law introduces one of the most common forms of public-private partnerships in the world to attract private investment - a concession. Main must-dos in the logistics sector include the development and adoption of a draft law that will create an independent body, the National Transport Regulatory Commission; development and adoption of the draft Law on Railway Transport of Ukraine. At the same time, reducing the load on the railways and roads is possible with restoring the river connection, which requires the development and adoption of a special sectoral draft law - On Inland Water Transport. WOODWORKING AND FURNITURE The adopted Law of Ukraine On Concession contains amendments to the Forest Code of Ukraine, which prevent transferring forests to the concession. The EBA Woodworking and Furniture Committee has emphasized the importance of preventing forests from being subject to a concession. At the same time, the industry expects the legislative implementation of timber sales rules for processors focused on providing raw materials to domestic woodworking enterprises, promoting in-depth timber processing and efficient use of forest resources. HEALTH CARE In the field of health care, the business expects that a common position of the Government and the Parliament on the continuation of the reform of the health care system, the set goals and the ways of their achievement and the further development of directions in the context of reform will be brought to the public and expert communities. Also, careful consideration should be given to strategic directions for changes in the regulation of the pharmaceutical sector and a conceptual analysis of the impact of new legislative initiatives on its development in the short, medium and long term; it’s necessary to ensure that there are no breaches of Ukraines obligations under international treaties and a negative impact on Ukraines investment attractiveness. Another important step is the development and adoption of amendments to the Law of Ukraine On Public Procurement intending to introduce the worlds best tools for access to innovative medicines, and further elaborating the issue of increasing access to high-tech medical devices. In the field of clinical trials, it is necessary to improve the ability to bring international clinical research to Ukraine in favour of patients access to innovative treatment and health care development. The professional community looks forward to the adoption of amendments developed by the Association to the Laws of Ukraine On Medicines and On Insurance, the abolition of the 321-2 article of the Criminal Code of Ukraine which creates unjustified pressure on the industry, exemption from VAT of imports of investigational drugs and related materials imported for non-commercial purposes and at the expense of sponsors of research, regulation of legislation regarding taxation of researchers. FUEL AND ENERGY The Law of Ukraine On Amendments to Certain Laws of Ukraine Concerning the Separation of Natural Gas Transportation Activities 264-IX was adopted, which allows to create an independent GTS operator, which may in the future affect the continuation of natural gas transit to the European Union. At the same time, the business is waiting for changes to be made to the legislation on the model of support for electricity producers from alternative sources of energy to maintain the investment attractiveness of the sector and further increase the share of green energy. CONSUMER ELECTRONICS In the context of counteraction to the shadow economy, Laws 128-IX and 129-IX were adopted, which envisage increasing the responsibility of business for non-issuance of fiscal checks, introduction of the so-called cashback mechanism, gradual expansion of the compulsory use of cash registers and the possibility of using modern technologies, the introduction of cash desk service are important aspects for consumer electronics and retail. At the same time, it is necessary to regulate market surveillance issues, in particular, to adopt in the second reading and in general the draft Law No. 2172, taking into account the proposals of the Association. The Association is also looking forward to changes in consumer protection legislation and e-commerce law to create more civilized rules for online commerce. TAX AND CUSTOMS The Verkhovna Rada adopted the Law of Ukraine No. 141-IX, which introduces the mechanism of an authorized economic operator, similar to the one functioning in the EU, with the prospect of further mutual recognition. The recognition of AEO status by the customs authorities of the EU countries will ensure the participation of Ukrainian AEOs in the formation of secure supply chains, will allow customs clearance to be completed faster and will increase their competitiveness in the external and internal markets. The EBA welcomes the adoption of the Law of Ukraine 78-IX On the regime of joint transit and introduction of the national electronic transit system, which will allow to apply European transit rules and exchange information with the customs authorities of the EU countries. The Law of Ukraine 202-IX on the Protection of Intellectual Property Rights was also adopted, which should strengthen the prevention and counteraction of the movement of counterfeit goods across the customs border of Ukraine. The work of the new Verkhovna Rada on tax initiatives was rather hasty and unsystematic during this time. The Association emphasizes that any legislative changes should take into account the principle of stability of tax legislation, as well as taking into account all agreements with business that are reached in the process of working on the draft laws, in particular concerning draft law No. 1210. LABOUR RELATIONS The business is waiting for the adoption of the long-awaited Labour Code or other legal acts to modernize labour law and regulate labour relations. FOOD AND REGULATORY ISSUES In the food industry, the business is waiting for the adoption of the draft law On Amendments to the Customs Code of Ukraine and Certain Legislative Acts of Ukraine on Food Products and Other Objects of Sanitary Measures, which comprehensively address issues in the food sector. At the same time, the business is concerned about the delay in the implementation of the provisions of the Law of Ukraine “On Feed Safety and Hygiene” No. 2264-VIII regarding the recognition of international requirements for state registration of feed additives. As the issue of waste management in Ukraine is quite acute, the business community emphasizes the importance of adopting the Waste Management Law No. 2207-1, which aims to ensure legislative regulation of waste management relations, taking into account the requirements of the relevant EU directives.

One hundred days is not too long, but it is a time when the first conclusions can be made. This period can be characterized in one word – turbo mode. During the first hundred days, the deputies took an extremely fast pace of preparation and elaboration of legislative initiatives. So, what changes have already been introduced by the Verkhovna Rada, and what has been left out of the attention of MPs?

AGROCHEMICALS

It is extremely important for the agrochemical business to adopt by the end of the year a draft Law No. 2289 that will remove restrictions on the importation of CPPs samples for state testing and research purposes and bring current legislation in line with best international practices.

ANIMAL HEALTH

The new edition of the Law on Veterinary Medicine is a top priority for animal health companies that are looking for fruitful cooperation with Parliament to update the veterinary legislation.

GRAIN AND OILSEEDS

In this sphere, there is an urgent need for a legislative decision to renew VAT refunds on soybean and rapeseed exports. EBA Grain and Oilseeds Committee members are awaiting the adoption of draft Law No. 2446, which would allow fair competition in the agrarian market.

ELECTRONIC PAYMENTS

The President of Ukraine has signed the Laws of Ukraine 128-IX, 129-IX on the de-shadowing of payments in the sphere of trade and services related to fiscalisation and other important aspects of the use of cash registers.

The draft law No. 2179 was adopted in the first reading, which proposes to comprehensively improve the legislation on financial monitoring, in particular on the introduction of terminology commonly accepted in the AML EU Directives; applying a risk-oriented and case-based approach; raising the threshold and reducing the number of signs of mandatory reporting of suspicious transactions. At the same time, the draft Law does not sufficiently address several issues related to the identification of those clients who use electronic money (EG – an anonymous payment instrument by definition), which needs further improvement of the legislative regulation.

INFORMATION TECHNOLOGIES

Currently, issues related to the IT industry are under discussion within working groups in the Verkhovna Rada. These include, in particular, the development of a new Labour Code, the introduction of contractual relations, and the implementation of the Law on Personal data protection. To provide a supportive environment for IT business and industry development, it is necessary to focus on developing effective solutions to these issues.

LOGISTICS AND INFRASTRUCTURE

The adopted Law of Ukraine “On Concession” No. 155-IX now allows to regulate at the legislative level the issues of public-private partnerships, the attraction of private domestic and foreign investments. This law introduces one of the most common forms of public-private partnerships in the world to attract private investment – a concession.

Main must-dos in the logistics sector include the development and adoption of a draft law that will create an independent body, the National Transport Regulatory Commission; development and adoption of the draft Law on Railway Transport of Ukraine. At the same time, reducing the load on the railways and roads is possible with restoring the river connection, which requires the development and adoption of a special sectoral draft law – On Inland Water Transport.

WOODWORKING AND FURNITURE

The adopted Law of Ukraine “On Concession” contains amendments to the Forest Code of Ukraine, which prevent transferring forests to the concession. The EBA Woodworking and Furniture Committee has emphasized the importance of preventing forests from being subject to a concession.

At the same time, the industry expects the legislative implementation of timber sales rules for processors focused on providing raw materials to domestic woodworking enterprises, promoting in-depth timber processing and efficient use of forest resources.

HEALTH CARE

In the field of health care, the business expects that a common position of the Government and the Parliament on the continuation of the reform of the health care system, the set goals and the ways of their achievement and the further development of directions in the context of reform will be brought to the public and expert communities. Also, careful consideration should be given to strategic directions for changes in the regulation of the pharmaceutical sector and a conceptual analysis of the impact of new legislative initiatives on its development in the short, medium and long term; it’s necessary to ensure that there are no breaches of Ukraine’s obligations under international treaties and a negative impact on Ukraine’s investment attractiveness.

Another important step is the development and adoption of amendments to the Law of Ukraine “On Public Procurement” intending to introduce the world’s best tools for access to innovative medicines, and further elaborating the issue of increasing access to high-tech medical devices. In the field of clinical trials, it is necessary to improve the ability to bring international clinical research to Ukraine in favour of patients’ access to innovative treatment and health care development. The professional community looks forward to the adoption of amendments developed by the Association to the Laws of Ukraine “On Medicines” and “On Insurance”, the abolition of the 321-2 article of the Criminal Code of Ukraine which creates unjustified pressure on the industry, exemption from VAT of imports of investigational drugs and related materials imported for non-commercial purposes and at the expense of sponsors of research, regulation of legislation regarding taxation of researchers.

FUEL AND ENERGY

The Law of Ukraine “On Amendments to Certain Laws of Ukraine Concerning the Separation of Natural Gas Transportation Activities” 264-IX was adopted, which allows to create an independent GTS operator, which may in the future affect the continuation of natural gas transit to the European Union.

At the same time, the business is waiting for changes to be made to the legislation on the model of support for electricity producers from alternative sources of energy to maintain the investment attractiveness of the sector and further increase the share of green energy.

CONSUMER ELECTRONICS

In the context of counteraction to the shadow economy, Laws 128-IX and 129-IX were adopted, which envisage increasing the responsibility of business for non-issuance of fiscal checks, introduction of the so-called cashback mechanism, gradual expansion of the compulsory use of cash registers and the possibility of using modern technologies, the introduction of cash desk service are important aspects for consumer electronics and retail.

At the same time, it is necessary to regulate market surveillance issues, in particular, to adopt in the second reading and in general the draft Law No. 2172, taking into account the proposals of the Association. The Association is also looking forward to changes in consumer protection legislation and e-commerce law to create more civilized rules for online commerce.

TAX AND CUSTOMS

The Verkhovna Rada adopted the Law of Ukraine No. 141-IX, which introduces the mechanism of an authorized economic operator, similar to the one functioning in the EU, with the prospect of further mutual recognition. The recognition of AEO status by the customs authorities of the EU countries will ensure the participation of Ukrainian AEOs in the formation of secure supply chains, will allow customs clearance to be completed faster and will increase their competitiveness in the external and internal markets.

The EBA welcomes the adoption of the Law of Ukraine 78-IX “On the regime of joint transit and introduction of the national electronic transit system”, which will allow to apply European transit rules and exchange information with the customs authorities of the EU countries. The Law of Ukraine 202-IX on the Protection of Intellectual Property Rights was also adopted, which should strengthen the prevention and counteraction of the movement of counterfeit goods across the customs border of Ukraine.

The work of the new Verkhovna Rada on tax initiatives was rather hasty and unsystematic during this time. The Association emphasizes that any legislative changes should take into account the principle of stability of tax legislation, as well as taking into account all agreements with business that are reached in the process of working on the draft laws, in particular concerning draft law No. 1210.

LABOUR RELATIONS

The business is waiting for the adoption of the long-awaited Labour Code or other legal acts to modernize labour law and regulate labour relations.

FOOD AND REGULATORY ISSUES

In the food industry, the business is waiting for the adoption of the draft law “On Amendments to the Customs Code of Ukraine and Certain Legislative Acts of Ukraine on Food Products and Other Objects of Sanitary Measures”, which comprehensively address issues in the food sector. At the same time, the business is concerned about the delay in the implementation of the provisions of the Law of Ukraine “On Feed Safety and Hygiene” No. 2264-VIII regarding the recognition of international requirements for state registration of feed additives.

As the issue of waste management in Ukraine is quite acute, the business community emphasizes the importance of adopting the Waste Management Law No. 2207-1, which aims to ensure legislative regulation of waste management relations, taking into account the requirements of the relevant EU directives.