Law Digest

Ukraine to join Government Procurement Agreement

Ukraine has joined the WTO’s Government Procurement Agreement (GPA), which will give Ukrainian suppliers an opportunity to participate in international tenders. Draft Act No.0085, which the President of Ukraine initiated, was passed on 16 March.

According to the Ministry of Economic Development, Ukraine’s joining the WTO’s GPA means getting access to the global procurement market, which is estimated to be worth USD 1.7 trillion.

A reminder that the WTO’s Committee on Government Procurement agreed to Ukraine’s accession to the GPA as far back as in November 2015.  The Ministry of Economic Development is now informing the business community on the opportunities that will open up for it after Ukraine joins the GPA. 

The Act on Electronic Income Declaration

The Act On Amendments to Certain Legislative Acts of Ukraine Regarding the Particularities of Submission of Declarations on Property, Incomes, Expenses and Financial Obligations by the Officials in 2016, No.1022-VIII was adopted on 15 March 2016.

The Act amends the Criminal Code of Ukraine, the Code of Ukraine on Administrative Offences, as well as the Corruption Prevention Act. Lawmakers introduced a system of submission and promulgation of declarations by persons authorised to perform state or local self-government functions.

Furthermore, the Act stipulates penalties to be applied for the violation of the e-declaration procedure. For instance, the Act provides for administrative liability for deliberate submission of false data in the declaration. For violation of the said norm, the Act envisages a penalty of 1,000 to 2,500 untaxed minimum incomes of citizens. Administrative liability for deliberate submission of false data takes place if such data differs from true information by an amount of 100 to 250 minimum wages. Criminal liability takes place if the submitted data differs from true information by an amount of over 250 minimum wages. In such case, for deliberate submission of false data in the declaration or intentional non-submission of such declaration, a penalty of 2,500 to 3,000 untaxed minimum incomes of citizens will be changed, or public works for 150 to 240 hours will be imposed, or officials will be punished by deprivation of freedom for up to 2 years with deprivation of the right to hold certain positions or be engaged in certain activities for up to 3 years.

A declaring person is entitled to adjust his/her declaration within 7 days after the initial submission. If any false data is discovered in the declaration, the declaring person is obliged to submit a relevant declaration with true data filled in it.

Verification of an official’s declaration may be carried out either during the period of performance by such official of his/her functions, or within 3 years after he/she has terminated his activity.

Cabinet of Ministers to implement new business costs estimation system

On 15 March the Resolution of the Cabinet of Ministers of 16 December 2015, No.1151 On Amendments to the Resolution of the Cabinet of Ministers of Ukraine of 11 March 2004, No. 308 came into force. Implementation of the policy regarding small and medium-sized business to the national legislation of Ukraine has been determined as one of the priorities of EU – Ukraine association. The policy, which is based on 10 principles of the Small Business Act for Europe (SBA), provides for the introduction of the M-test in the process of its implementation. 

According to the Resolution, any Draft enactments recognized as being of a regulatory nature will be followed by numerical estimation of the cost to business. Such tests are conducted by interviewing the business community and getting main statistical data. All these tests are followed by public consultations, questionnaires, round-table meetings, etc. The M-test can greatly contribute to reducing small business expenses by proving that a new regulation would be burdensome on business. 

This technique has been implemented in order for government decisions to be economically grounded and efficient as well as for the developer of the regulatory Draft to be able to prove the cost-effectiveness of his/her decision in an intelligible and understandable form.  

Introduction of the M-test is, first and foremost, supposed to have a beneficial business environment effect as the business community gets an opportunity to calculate the cost of any regulatory act by taking into account any extra expenses which would be incurred when setting the price of goods or services.   

Scheduled and unscheduled audit procedure is set

The Procedure of Scheduled and Unscheduled Audits of Compliance of Licensing Authorities with Legal Requirements in the Sphere Conducted by the Designated Authority has been approved by the Government Decree of 16 March 2016, No.182. The Decree approves the audit procedure conducted by the State Regulatory Service. Provisions are made for the requirements on the preparation of the documents needed for the auditing and presentation of its results (an auditing order, an auditing certificate, an auditing act), a list of issues to be analyzed during auditing, etc. The notification on the scheduling of the audit is sent to the licensing authority not later than 10 days prior to the date. In the case of an unscheduled audit the licensing authority is not notified.  During an unscheduled audit only those issues which caused it come under consideration. However, according to the appropriate order the same licensing authority undergoes scheduled auditing no more than once a year.