Date of publication: 2 March 2015
Olena Omelchenko, Partner, Attorney at Law, Head of International Trade Practice
Source: Ekonomichna Pravda
Bringing the recently adopted Law “On introduction of amendments to certain acts of legislation related to simplification of business dealing” into effect will ensure finalization of the first stage of simplification of conduct of business.
Under the initiative of the Ministry of Economic Development and Trade of Ukraine (the Ministry) it is planned to draft and impose 77 measures aimed at simplification of licensing procedures on regulation of economic activities and 15 measures aimed at improvement of procedures of technical regulation and state supervision over regulation of economic activities. Six additional measures will be aimed at simplification of customs and tax regulations, eight measures – at improvement of Ukraine’s position in the business ranking Doing Business and 70 measures – at simplification of the business environment in agricultural, construction and oil and gas industries.
In its deregulation Action Plan the Ministry may include proposals related to abolition of licensing of more than 16 types of economic activities. In particular such types of activities may include: services on mediation in employment abroad, tour operator activities; import of medical drugs, customs and brokerage activities, baggage transportation services, export and import of laser discs and production of pre-printed forms of securities. Abolished may also be the licenses to carry out trade of breeding cattle, genetic testing of animals, introduction, importation, exportation of security holograms, conducting land evaluation and sale activities, trade of liquid fuels produced from biomass and biogas.
In addition, the Ministry is reviewing the possibility to abolish licensing of exports and imports of alcohol and tobacco products. Abolition of licensing of these activities will greatly facilitate the business process. However, the whole process of license abolition should not be performed mechanically so as not to be faced with unfair practices on the part of business entities. For this purpose the legislator must provide legislative and organizational requirements towards corresponding activities, ensure registration of economic entities and the ability to suspend or prohibit execution of such activities in case of violation of the legislation.
In general, it is advisable to retain a minimum number of types of activities subject to licensing and ensure strengthening of responsibility for conducting the economic activities in violation of the law. For example, an official of Ukrainian company involved into trade of agricultural chemistry without license may suffer only administrative responsibility (be fined).
Practical imposition of sanctions onto a legal person for practicing the said activities without a license in the form of a substantial fine, suspension or prohibition of such activities is not feasible.
Thus, licensing of activities is not always a panacea for ensuring safety of people and nature. It will be possible to achieve this goal through improvement of the mechanism of enforcement of administrative sanctions stipulated by the Commercial Code of Ukraine.
The Ministry has calculated that the deregulation law adopted by the Parliament may raise as much as UAH 40-60 billion by 2020 due to simplification of business dealing through abolition of 16 types of state regulation, harmonization of Ukrainian legislation with EU norms, reduction of the administrative burden on business and reduction of corruption risks in the corresponding procedures.