Chamber News (#03 March 2015)

CHAMBER NEWS

Deregulation suggestions from business

The Chamber experts believe that the CMU Resolution No.42 is an important step on the way towards implementing the Association Agreement with the EU, as well as a significant contribution towards eliminating business barriers in Ukraine.

Deregulation in energy sphere

Resolution No.42 inter alia stipulates canceling obligatory geological monitoring of special conditions of subsoil use.Considering the monitoring as an excessive and unreasonable mechanism of the oil and gas industry regulation, the Chamber has strongly advocated for its cancelling and along with written requests addressed toMinister of Ecology, State Geology Service, andState Service of Ukraine for Regulatory Policy and Entrepreneurship Development, held a number of follow-up meetings with these bodies and representatives of state geological institutions that carry out monitoring. In spite of the necessity to take a number of steps to adjust legislative the base, the Resolution contributes significantly to establishing transparent rules in the extraction sphere.

Deregulation in the food industry

Due to the active involvement of the Chambers Food & Beverage Committee with the adoption of the Resolution, the Cabinet of Ministers of Ukraine cancelled its previous decision on the procedure of state registration of baby foods and dietary supplements. The decision could lead to highly complicated and extended state registration procedure for these products. The Chamber justified the need to leave the current procedure of registering baby foods and dietary supplements until the On Introducing Changes to Certain Legislative Acts of Dietary Supplements State Registration Act of Ukraine comes into effect on 20 Septem- ber 2015. The Chambers position is based on EU practices that do not entail such permit procedures, as well as on the fact that the aforementioned Act foresees cancelling state registration of baby foods and dietary supplements. The step has become another major achievement on the way of adjusting national legislation to EU standards.

Deregulation in agriculture

The Cabinet of Ministers included amendments of business community on the notable contraction of the quarantine regulation objects list in accordance with EU practices; as well as on the introduction of a 24-hour time limit for issuing all phytosanitary documents. These initiatives are intended to significantly decrease the cost for all participants of the grain market in Ukraine.

Deregulation in HR sphere

The Resolution No.42 among other things clarifies the list of assignees eligible for work permits application in Ukraine; clearly provides the possibility to extend a work permit for an unlimited number of times without paying the state fee; reduces the time given to authorized bodies for consideringwork permit applications.

The business community has for a long time advocated simplified procedures for issuing, extending and annulling work permits for foreigners on Ukraine. Amending Resolution No.42 in accordance with the Chambers recommendations streamlined the procedure of hiring foreigners for management positions in international companies, allowing for more attractive investment environment in the country.

Swift reforms will retain investments

During the meeting with Igor Pashko, head of the National Commission on the Financial Services Market State Regulation, that was held on 16 February, bankers and representatives of the financial sector proposed a strategy to the Commission on reforming the Ukrainian insurance market.

The strategy, inter alia, entails urgent rectification of the insurance market by increasing requirements for insurance companies audit; simplifying the requirements for insurance portfolio transfer; creating the institute of subordinated debt. The Chamber for the Banking and Financial Services Committee also emphasized the necessity of revising licensing conditions for insurance companies alongside empowering the regulative body with the right to liquidate bankrupt companies.

Bankers pointed to the importance of immediate implementation of IFRS in Ukrainian practice. A full and uncompromised transition to market economic relations and international standards is critical for cleansing the market, increasing competition and the quality of products and services in Ukraine. Only a fast comprehensive approach by the National Bank of Ukraine and Parliament voting on all the developed draft laws as a package (or set) of legislation, as well as political will to ensure the efficiency of judicial system can restore the trust of international private and institutional investors as well as the public. The Committee assured that only implementation of these reforms within a few weeks can keep foreign investors on the Ukrainian market.

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