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Introduction of a temporary administration may adversely affect the country’s investment attractiveness

22/ 12/ 2021
  On December 1, the Ministry of Energy published a draft Law of Ukraine On Amendments to the Law of Ukraine On the Electricity Market . This document provides for the introduction of a temporary administration in case of threat of violation of the security of electricity supply. Thus, the draft law stipulates that the Ministry of Energy can apply measures to influence electricity market participants by introducing temporary administrations in case the market participant violates licensing conditions. It should be noted that the Law of Ukraine On Electricity Market and On the National Energy and Utilities Regulatory Commission determine the NEURC as the body responsible for monitoring compliance of licensees with licensing conditions for economic activities in the energy sector. Besides, they specify the procedure for bringing to justice and contain an exhaustive list of sanctions for violations (Part 2 of Article 22 On the National Energy and Utilities Regulatory Commission). Therefore, the powers of the Ministry of Energy to control and prosecute for violating licensing conditions in the energy is an interference in the activities of the NEURC and a violation of the principle of independence of the Regulator. At the same time, the draft law does not define the list of threats to the security of electricity supply and the types of violations of licensing requirements that would result from the introduction of a temporary administration. The procedure for selecting a temporary administrator, rules, principles, and decision-making procedures are also not specified in the Draft Law. Moreover, the draft law proposes to introduce temporary administrations for electricity market participants, including for an indefinite range of violations of licensing conditions. Also, the draft Law does not contain a procedure for reviewing violations by market participants, establishing the degree of their guilt, allowing them to express their explanations and objections. Under such conditions, the imposition of liability in the form of the imposition of temporary administrations is likely to pose corruption risks. Moreover, the Ministry of Energy may be given the right to arbitrarily interpret the need for a temporary administration. Therefore, business does not support this document, as it can have negative consequences for both the investment attractiveness of the country and the work of business.   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

On December 1, the Ministry of Energy published a draft Law of Ukraine “On Amendments to the Law of Ukraine” On the Electricity Market “. This document provides for the introduction of a temporary administration in case of threat of violation of the security of electricity supply.

Thus, the draft law stipulates that the Ministry of Energy can apply measures to influence electricity market participants by introducing temporary administrations in case the market participant violates licensing conditions.

It should be noted that the Law of Ukraine “On Electricity Market” and “On the National Energy and Utilities Regulatory Commission ” determine the NEURC as the body responsible for monitoring compliance of licensees with licensing conditions for economic activities in the energy sector. Besides, they specify the procedure for bringing to justice and contain an exhaustive list of sanctions for violations (Part 2 of Article 22 ” On the National Energy and Utilities Regulatory Commission”). Therefore, the powers of the Ministry of Energy to control and prosecute for violating licensing conditions in the energy is an interference in the activities of the NEURC and a violation of the principle of independence of the Regulator.

At the same time, the draft law does not define the list of threats to the security of electricity supply and the types of violations of licensing requirements that would result from the introduction of a temporary administration. The procedure for selecting a temporary administrator, rules, principles, and decision-making procedures are also not specified in the Draft Law. Moreover, the draft law proposes to introduce temporary administrations for electricity market participants, including for an indefinite range of violations of licensing conditions. Also, the draft Law does not contain a procedure for reviewing violations by market participants, establishing the degree of their guilt, allowing them to express their explanations and objections. Under such conditions, the imposition of liability in the form of the imposition of temporary administrations is likely to pose corruption risks. Moreover, the Ministry of Energy may be given the right to arbitrarily interpret the need for a temporary administration.

Therefore, business does not support this document, as it can have negative consequences for both the investment attractiveness of the country and the work of business.

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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