The Report commences by focusing at the current state of the AMCU’s institutional capacity, where we recommend to ensure that its’ annual plans clearly specifies the main priority areas for the forthcoming year, including, if applicable, markets to be studied.
While discussing lack of sufficient cooperation between the AMCU and other state authorities, it focuses on the need to develop a roadmap aimed at implementing the NCP Concept for 2014-2024 by the ministries and other state bodies.
The document continues with comprehensive analysis of the AMCU’s core operational functions comprising investigation, decision-making and enforcement.
As for the AMCU’s authority to grant consents on concentration, it is proposed that (i) consideration of a non-competition agreement (lodged while seeking such a consent) is conducted on the basis of a so-called “simplified procedure”; and that (ii) the legislation is amended to clearly identify the parties liable for failure to notify about concentration.
As for the AMCU’s function to investigate cases on abuse of monopolistic (dominant) position, it is recommended to (i) set clear deadlines for consideration (investigation) of such cases; and (ii) expressly provide that if an applicant were to withdraw its’ application, it shall not constitute the ground for automatic termination of case consideration.
The AMCU’s internal decision-making procedure is proposed to be adjusted to ensure that all decisions are jointly taken by all members of the AMCU’s Board of Commissioners, save for the Commissioner who investigated the case and who, nonetheless, remains to be entitled to present results of investigation at the respective procedural hearing, albeit without the right to vote.
As for the AMCU’s enforcement function, our main recommendation is to adopt Methodology for Calculating Amount of Fine as a binding legislative act.
As far as access to information is concerned, the Council proposes (i) introducing electronic database that would enable applicants to retrieve general information about the current status of consideration of requests/applications lodged with the AMCU, which is not confidential in nature; and (ii) improving existing procedure of granting parties to the AMCU’s hearings access to the materials of the case.
In order to make the existing leniency regime more inclusive, the Council recommends reducing fines for parties other than the first one to file.
As for the area of non-judicial challenging result of public procurements, the Council proposes to further specify the rights of the parties to the procedure of non-judicial challenging of the results of public procurements with the AMCU.
Last but not least, the Report concentrates on the forthcoming legal framework on the state aid, set to become effective in the middle of 2017.
The monthly information bulletin of the Centre of Policy and Legal Reform (CPLR) is dedicated to the analysis of state reforms,
in particular in the areas of parliamentarianism and elections, constitutional and judicial reforms, civil service, anticorruption,
etc.
COMBATTING RAIDERSHIP IN UKRAINE: CURRENT STATE AND RECOMMENDATIONSIaroslav GREGIRCHAK
Systemic Report of the Busines Ombudsman Council focused on combatting raidership in Ukraine
Among other things, we acknowledge that recent changes to the legislation and respective institutional framework (i.e., those that were initiated by the Ministry of Justice in course of 2015-2016) do contain important features aimed at ensuring ultimate eradication of the most known raidership attacks vis-à-vis corporate rights and/or property (tangible assets).
Nonetheless, the Report contains comprehensive set of further “anti-raidership recommendations” aimed, inter alia, at (i) introducing a notification system, which would enable owners (members) of a legal entity (or their representatives) to be informed about receipt of the request to conduct a registration action with the respective corporate rights; (ii) improving functioning of both the permanent commissions tasked to consider complaints in the sphere of state registration as well as mechanism of ministerial control over activities of the state registrars; (iii) improving efficiency of the work of law enforcement bodies; (iv) enabling notarization of images of scanned documents, based on which the registration actions were made, on the computer screen (screenshots); and (v) ensuring proper access to justice for the parties that suffered from raidership attacks.
The adoption of the 2015 Political Finance Reform Law has proven to be a significant step towards effective regulation of the role of money in Ukrainian politics. The Law was the result of concerted efforts by members of Ukraine’s parliament, civil society organizations, international organizations and experts.
This document provides an overview of key concepts and standards for monitoring administrative justice. It discusses why monitoring administrative justice is important to ensure accountability and adherence to fair trial standards. Administrative acts have a major impact on people's lives and rights, so it is essential that individuals can challenge these acts in court. International human rights law and OSCE commitments guarantee the right to a fair trial in administrative proceedings. This handbook aims to support monitoring of administrative justice systems to help strengthen the rule of law.
Detailed account of "Maidan Monitoring" project. The publication describes both the results of monitoring (quantitative, qualitative, communicative and legal) and the methodology of its implementation.
"For the first time in world practice during the parliamentary election in Ukraine in 2012 an interactive map of violations of election law has been created with strictly verified information crowd sourced by volunteers with mandatory documented evidence and legal commentary"
The monthly information bulletin of the Centre of Policy and Legal Reform (CPLR) is dedicated to the analysis of state reforms, in particular in the areas of parliamentarianism and elections, constitutional and judicial reforms, civil service, anticorruption, etc. The goal of the publication is to increase the level of expert awareness among the citizens and to strengthen their capacity to influence the government authorities in order to expedite democratic reforms and to establish good governance
in Ukraine.
The monthly newsletter of the Centre of Policy and Legal Reform is devoted to the analysis of the state reform, in particular in the areas of parliamentarism and elections, constitutional and judicial reform, civil service, anti-corruption, etc.
The purpose of the publication is to raise the awareness among citizens and to strengthen their ability to influence the state authorities in order to accelerate democratic reforms and establish proper governance in Ukraine.
If you want to receive the monthly newsletter by mail, please send an e-mail to busol@pravo.org.ua (Yaryna Busol, communications manager of the CPLR).
The monthly information bulletin of the Centre of Policy and Legal Reform (CPLR) is dedicated to the analysis of state reforms,
in particular in the areas of parliamentarianism and elections, constitutional and judicial reforms, civil service, anticorruption,
etc.
COMBATTING RAIDERSHIP IN UKRAINE: CURRENT STATE AND RECOMMENDATIONSIaroslav GREGIRCHAK
Systemic Report of the Busines Ombudsman Council focused on combatting raidership in Ukraine
Among other things, we acknowledge that recent changes to the legislation and respective institutional framework (i.e., those that were initiated by the Ministry of Justice in course of 2015-2016) do contain important features aimed at ensuring ultimate eradication of the most known raidership attacks vis-à-vis corporate rights and/or property (tangible assets).
Nonetheless, the Report contains comprehensive set of further “anti-raidership recommendations” aimed, inter alia, at (i) introducing a notification system, which would enable owners (members) of a legal entity (or their representatives) to be informed about receipt of the request to conduct a registration action with the respective corporate rights; (ii) improving functioning of both the permanent commissions tasked to consider complaints in the sphere of state registration as well as mechanism of ministerial control over activities of the state registrars; (iii) improving efficiency of the work of law enforcement bodies; (iv) enabling notarization of images of scanned documents, based on which the registration actions were made, on the computer screen (screenshots); and (v) ensuring proper access to justice for the parties that suffered from raidership attacks.
The adoption of the 2015 Political Finance Reform Law has proven to be a significant step towards effective regulation of the role of money in Ukrainian politics. The Law was the result of concerted efforts by members of Ukraine’s parliament, civil society organizations, international organizations and experts.
This document provides an overview of key concepts and standards for monitoring administrative justice. It discusses why monitoring administrative justice is important to ensure accountability and adherence to fair trial standards. Administrative acts have a major impact on people's lives and rights, so it is essential that individuals can challenge these acts in court. International human rights law and OSCE commitments guarantee the right to a fair trial in administrative proceedings. This handbook aims to support monitoring of administrative justice systems to help strengthen the rule of law.
Detailed account of "Maidan Monitoring" project. The publication describes both the results of monitoring (quantitative, qualitative, communicative and legal) and the methodology of its implementation.
"For the first time in world practice during the parliamentary election in Ukraine in 2012 an interactive map of violations of election law has been created with strictly verified information crowd sourced by volunteers with mandatory documented evidence and legal commentary"
The monthly information bulletin of the Centre of Policy and Legal Reform (CPLR) is dedicated to the analysis of state reforms, in particular in the areas of parliamentarianism and elections, constitutional and judicial reforms, civil service, anticorruption, etc. The goal of the publication is to increase the level of expert awareness among the citizens and to strengthen their capacity to influence the government authorities in order to expedite democratic reforms and to establish good governance
in Ukraine.
The monthly newsletter of the Centre of Policy and Legal Reform is devoted to the analysis of the state reform, in particular in the areas of parliamentarism and elections, constitutional and judicial reform, civil service, anti-corruption, etc.
The purpose of the publication is to raise the awareness among citizens and to strengthen their ability to influence the state authorities in order to accelerate democratic reforms and establish proper governance in Ukraine.
If you want to receive the monthly newsletter by mail, please send an e-mail to busol@pravo.org.ua (Yaryna Busol, communications manager of the CPLR).
CONTENTS
1. CPLR’s achievements over 21 years ... p.3
2. Year 2017 in constitutionalism ... p.5
3. Year 2017 in governance and public administration ... p.9
4. Year 2017 in judiciary ...p.15
5. Year 2017 in criminal justice ...p.19
6. Year 2017 in anticorruption ...p.23
7. CPLR as founder and active participant of CSOs coalitions ...p. 26
8. Analytical products and media activity ...p.29
9. Publications ... p.32
10. Budget ...p.33
CPLR annual activity report for 2015. Year 2015 in Ukraine for Constitutionalism, Governance and Public Administration, Judiciary, Criminal Justice, Combatting Corruption. CPLR achievements, publications, financial report, donors.
The monthly information bulletin of the Centre of Policy and Legal Reform (CPLR) is dedicated to the analysis of state reforms,
in particular in the areas of parliamentarianism and elections, constitutional and judicial reforms, civil service, anticorruption,
etc. The goal of the publication is to increase the level of expert awareness among the citizens and to strengthen their
capacity to influence the government authorities in order to expedite democratic reforms and to establish good governance
in Ukraine.
The Centre of Policy and Legal Reform worked on several public administration reforms in 2020:
1) Reform of the Government and central executive bodies was discussed but the comprehensive law on this was not passed. Reforming ministries' structures continued but was not fully implemented.
2) Reforming Ukraine's 136 administrative districts required adapting the territorial organization of the executive branch, and a draft law on this was submitted to Parliament.
3) Proposed amendments to civil service laws were rejected, and the competitive selection process deteriorated during the pandemic when appointments were made without competition. However, a draft law was submitted to address this.
4) A draft general administrative procedure law was adopted in first reading with the aim to regulate public services
Report #1 On results of long-term monitoring For the period August 28 - Septe...presskvukyiv
1. The legislative basis for the early parliamentary elections in Ukraine has some shortcomings, including preservation of the mixed electoral system and questionable constitutionality of some provisions.
2. Organization of elections will be challenging in parts of Luhansk and Donetsk oblasts that are under separatist control, and additional security measures will be needed.
3. Other issues that could impact the elections include the legitimacy of extending the Central Election Commission members' terms, inadequate preparation and resources for some District Election Commissions, and low transparency of campaign financing.
The monthly information bulletin of the Centre of Policy and Legal Reform (CPLR) is dedicated to the analysis of state reforms, in particular in the areas of parliamentarianism and elections, constitutional and judicial reforms, civil service, anticorruption, etc. The goal of the publication is to increase the level of expert awareness among the citizens and to strengthen their
capacity to influence the government authorities in order to expedite democratic reforms and to establish good governance
in Ukraine.
- The document discusses e-governance and the Right to Information Act of 2005 in India.
- E-governance aims to improve governance through the use of information and communication technologies, providing government services electronically.
- The Right to Information Act was passed in 2005 to increase transparency and accountability in public institutions. It requires them to proactively disclose information on their websites.
Legislative acts and digital tools developed with the participation of experts from the Better Regulation Delivery Office (BRDO) in 2015-2020 saved UAH 25 billion for Ukrainian small and medium-sized businesses, as well as UAH 5.5 billion of government spending.
This is stated in the BRDO report for 2020
During 5 years of BRDO activity:
166 legislative acts (co)drafted by our experts were adopted (in 2020 — 27, of which there are 10 laws);
1,245 regulatory acts that made it difficult to do business were repealed (36 in 2020);
5 unique online tools used by SMEs, civil servants, and local self-government bodies were developed.
Also, in 2020, BRDO experts conducted 18 researches in construction, energy, transport and infrastructure, IT&Telecom, agriculture, and supervision and control sectors. These researches have become or will become the basis for solving the problems of entrepreneurs and citizens.
“2020 was the year of the adoption of the largest BRDO initiatives we ever had related to public policy. However, those who profit from corruption also increase their resistance to change every year. Nevertheless, we can support the progress of reforms thanks to the creation of broad coalitions with representatives of various organizations and institutions,” Oleksii Dorohan, BRDO CEO, said.
Our mission is to play a key role in transforming Ukraine into a European democracy with effective governance and a strong economy.
Content:
1. CPLR in Board Members’ Words
2. Achievements of CPLR for 20 years .
3. 2016 in:
1) constitutionalism
2) governance and public administration
3) justice
4) criminal justice
5) anti-corruption
6) information and e-governance
4. Publications of CPLR
5. CPLR as institutor and active participant in coalitions of civil
society organizations
6. Statistics of analytical products and media activity of CPLR
7. Financial account
8. Budget for 2016, projects, donors
9. Revenue budget from donors
The BRDO was established in 2015 to promote effective regulation and economic freedoms in Ukraine. Over the past years, it has worked with relevant ministries to develop 10 packages of decisions to benefit business, deregulate economic activity, and simplify over 1,200 outdated acts. It has conducted comprehensive market research and developed legal acts and reforms in various sectors like agriculture, energy, transport, and construction to improve the business environment and Ukraine's rankings in the Doing Business report.
The document provides a summary of the European Union Election Observation Mission's report on the 2013 parliamentary elections in Jordan. Some key findings include:
- The elections were organized and conducted in a transparent and credible manner, though the legal framework had some gaps and deficiencies.
- Voting, counting and tabulation of results were well-administered in polling stations, but delays in tabulating and accessing national results undermined transparency.
- The legal framework curtailed universal suffrage by excluding some groups like armed forces from voting, contrary to international standards.
- Candidacy requirements were largely in line with international commitments, and 1,425 candidates contested the elections, including 191 women.
- The campaign
Experts analyzed implementation of key judicial reforms in framework of Priority II "Strengthening institutions and good governance". It is publish with the support of European Union and International Renaissance Foundation.
This document is a motion for a European Parliament resolution on implementing the EU Association Agreement with Ukraine. It notes that Ukraine has made progress in implementing reforms related to the agreement, but that more work remains, particularly in the areas of rule of law, governance, and anti-corruption. It acknowledges Ukraine's European aspirations but also expresses concerns about recent electoral laws and the pace of legislative reforms. It calls on Ukraine to fully respect human rights and international obligations.
Portal Of Public Services Of Russian Federation (Psir V2)Victor Gridnev
The document discusses proposals for developing a unified system of public services in Russia using information and communication technologies (ICT). It proposes creating a single federal portal and register of public services that would integrate regional portals and registers. This would provide citizens and businesses with unified access to information about and delivery of public services from all levels of government. It aims to standardize processes, reduce costs, and ensure equal access to services across Russia through use of ICT.
The document summarizes the structure of interagency interaction in financial monitoring in Russia. It outlines how the Federal Financial Monitoring Service of Russia (Rosfinmonitoring) interacts and shares information with executive bodies, law enforcement agencies, oversight bodies, and other federal executive bodies. It also discusses directions of cooperation between these groups, including forming joint legal acts, exchanging representatives, and sharing databases. Multilateral interaction is facilitated through interagency working groups and coordinating bodies.
SYSTEMIC REPORT "MAIN PROBLEMS FACED BY BUSINESS IN CUSTOMS SPHERE" (JULY 2018)Iaroslav GREGIRCHAK
The document contains analysis of the main problems currently faced by business in the customs sphere as well as focuses on the selected directions of its’ strategic reform in Ukraine.
In particular, the Report focuses on such issues as customs value’s determination; inefficient state of legal framework governing use of financial guarantees by declarants; as well as lack of efficient mechanism for bringing to liability officials of customs authorities. We then explore the problem of refund of excessively paid customs duties and fees. The respective recommendations are aimed at preventing the need to seek judicial protection for several consecutive times to attain this goal.
The Report continues with the comprehensive analysis of the problem of classification of goods, followed by the set of recommendations issued to the SFS and the Ministry of Finance, mainly aimed at ensuring unity, consistency and transparency while enforcing laws and regulations.
As far as analysis of the sphere of administrative liability for breach of customs rules is concerned, we recommend bringing Ukrainian legislation in this area in coherence with the best EU practices focused at ensuring that degree of liability is commensurable with the severity of breach and inflicted damages.
Besides, the Report is focuses on groundless intrusion at the part of law enforcers to the customs review procedure. Set of the respective recommendations is aimed at (1) ensuring adequate inter-agency coordination between customs and law enforcement authorities; as well as at (2) introducing legislative amendments which would further restrict the law enforcer’s ability to initiate or otherwise affect customs review procedures.
Furthermore, the Report concentrates on the problem of the protection of intellectual property rights (IPR) faced while transferring goods via customs border of Ukraine, which was examined by the Council from the standpoint of bringing Ukrainian legislation in compliance with the requirements and standards employed in the EU.
Finally, the Report contains critical analysis of selected strategical directions for reforming customs sphere. In particular, having acknowledged recent introduction of a “single window” at the customs, the Council concentrated on such widely anticipated progressive steps as ensuring (1) full-fledged practical use of «authorized economic operators» (АЕО); as well as (2) switch towards post-clearance audit procedure as the main form of control.
The document provides conclusions and recommendations from CVU's observation of the 25 October 2020 local elections in Ukraine. Some key points:
1) The Election Code of Ukraine needs substantial revision following issues identified in the elections. Amendments should not be made shortly before elections.
2) Using proportional representation in small communities should be abandoned, but may be used in larger communities.
3) The right of self-nomination should be provided at all levels of local elections.
4) The electoral quota for candidates to move up party lists should be reduced from 25% to 10%.
5) Requirements around gender quotas, candidate deposits, and other issues need clarification or revision.
This document provides a final report from the OSCE/ODIHR Election Assessment Mission that observed Latvia's parliamentary elections held on 4 October 2014. Some key findings include:
- The elections were administered in an impartial and transparent manner by the Central Election Commission and other election bodies.
- While the legal framework provides a basis for democratic elections, some aspects such as restrictions on candidacy rights and defamation laws could be further improved.
- The campaign environment was open and peaceful, and candidates represented different political views. However, some media outlets were perceived as not fully objective.
- Voting and counting on election day proceeded smoothly and transparently according to observers, although secrecy of the vote was at
Legal shorts 28.11.14 including FCA reminder of new ‘connect’ portal for firm...Cummings
The document provides a summary of recent developments in the financial services industry, including:
1) The FCA reminding firms of its new online portal for regulatory applications and notifications.
2) The UK government withdrawing its legal challenge to the EU cap on bankers' bonuses.
3) A speech by the EU Commissioner for financial services emphasizing putting consumers first.
4) Various regulatory developments and guidance from organizations such as the FCA, JMLSG, and IOSCO.
The document discusses deregulation in Ukraine. It provides an overview of Ukraine's poor ratings in terms of doing business and economic freedom compared to other countries. It then discusses why a "guillotine" approach to deregulation that abolishes all regulations at once is not advisable, as Ukraine has international obligations and harmonized legislation with the EU. The document outlines a vision for deregulation reform through decreasing regulations and inspections while strengthening regulatory bodies. It proposes establishing a Better Regulation Delivery Office to review legislation sector by sector and guide deregulation efforts. Several initial deregulation initiatives and their results are highlighted.
CONTENTS
1. CPLR’s achievements over 21 years ... p.3
2. Year 2017 in constitutionalism ... p.5
3. Year 2017 in governance and public administration ... p.9
4. Year 2017 in judiciary ...p.15
5. Year 2017 in criminal justice ...p.19
6. Year 2017 in anticorruption ...p.23
7. CPLR as founder and active participant of CSOs coalitions ...p. 26
8. Analytical products and media activity ...p.29
9. Publications ... p.32
10. Budget ...p.33
CPLR annual activity report for 2015. Year 2015 in Ukraine for Constitutionalism, Governance and Public Administration, Judiciary, Criminal Justice, Combatting Corruption. CPLR achievements, publications, financial report, donors.
The monthly information bulletin of the Centre of Policy and Legal Reform (CPLR) is dedicated to the analysis of state reforms,
in particular in the areas of parliamentarianism and elections, constitutional and judicial reforms, civil service, anticorruption,
etc. The goal of the publication is to increase the level of expert awareness among the citizens and to strengthen their
capacity to influence the government authorities in order to expedite democratic reforms and to establish good governance
in Ukraine.
The Centre of Policy and Legal Reform worked on several public administration reforms in 2020:
1) Reform of the Government and central executive bodies was discussed but the comprehensive law on this was not passed. Reforming ministries' structures continued but was not fully implemented.
2) Reforming Ukraine's 136 administrative districts required adapting the territorial organization of the executive branch, and a draft law on this was submitted to Parliament.
3) Proposed amendments to civil service laws were rejected, and the competitive selection process deteriorated during the pandemic when appointments were made without competition. However, a draft law was submitted to address this.
4) A draft general administrative procedure law was adopted in first reading with the aim to regulate public services
Report #1 On results of long-term monitoring For the period August 28 - Septe...presskvukyiv
1. The legislative basis for the early parliamentary elections in Ukraine has some shortcomings, including preservation of the mixed electoral system and questionable constitutionality of some provisions.
2. Organization of elections will be challenging in parts of Luhansk and Donetsk oblasts that are under separatist control, and additional security measures will be needed.
3. Other issues that could impact the elections include the legitimacy of extending the Central Election Commission members' terms, inadequate preparation and resources for some District Election Commissions, and low transparency of campaign financing.
The monthly information bulletin of the Centre of Policy and Legal Reform (CPLR) is dedicated to the analysis of state reforms, in particular in the areas of parliamentarianism and elections, constitutional and judicial reforms, civil service, anticorruption, etc. The goal of the publication is to increase the level of expert awareness among the citizens and to strengthen their
capacity to influence the government authorities in order to expedite democratic reforms and to establish good governance
in Ukraine.
- The document discusses e-governance and the Right to Information Act of 2005 in India.
- E-governance aims to improve governance through the use of information and communication technologies, providing government services electronically.
- The Right to Information Act was passed in 2005 to increase transparency and accountability in public institutions. It requires them to proactively disclose information on their websites.
Legislative acts and digital tools developed with the participation of experts from the Better Regulation Delivery Office (BRDO) in 2015-2020 saved UAH 25 billion for Ukrainian small and medium-sized businesses, as well as UAH 5.5 billion of government spending.
This is stated in the BRDO report for 2020
During 5 years of BRDO activity:
166 legislative acts (co)drafted by our experts were adopted (in 2020 — 27, of which there are 10 laws);
1,245 regulatory acts that made it difficult to do business were repealed (36 in 2020);
5 unique online tools used by SMEs, civil servants, and local self-government bodies were developed.
Also, in 2020, BRDO experts conducted 18 researches in construction, energy, transport and infrastructure, IT&Telecom, agriculture, and supervision and control sectors. These researches have become or will become the basis for solving the problems of entrepreneurs and citizens.
“2020 was the year of the adoption of the largest BRDO initiatives we ever had related to public policy. However, those who profit from corruption also increase their resistance to change every year. Nevertheless, we can support the progress of reforms thanks to the creation of broad coalitions with representatives of various organizations and institutions,” Oleksii Dorohan, BRDO CEO, said.
Our mission is to play a key role in transforming Ukraine into a European democracy with effective governance and a strong economy.
Content:
1. CPLR in Board Members’ Words
2. Achievements of CPLR for 20 years .
3. 2016 in:
1) constitutionalism
2) governance and public administration
3) justice
4) criminal justice
5) anti-corruption
6) information and e-governance
4. Publications of CPLR
5. CPLR as institutor and active participant in coalitions of civil
society organizations
6. Statistics of analytical products and media activity of CPLR
7. Financial account
8. Budget for 2016, projects, donors
9. Revenue budget from donors
The BRDO was established in 2015 to promote effective regulation and economic freedoms in Ukraine. Over the past years, it has worked with relevant ministries to develop 10 packages of decisions to benefit business, deregulate economic activity, and simplify over 1,200 outdated acts. It has conducted comprehensive market research and developed legal acts and reforms in various sectors like agriculture, energy, transport, and construction to improve the business environment and Ukraine's rankings in the Doing Business report.
The document provides a summary of the European Union Election Observation Mission's report on the 2013 parliamentary elections in Jordan. Some key findings include:
- The elections were organized and conducted in a transparent and credible manner, though the legal framework had some gaps and deficiencies.
- Voting, counting and tabulation of results were well-administered in polling stations, but delays in tabulating and accessing national results undermined transparency.
- The legal framework curtailed universal suffrage by excluding some groups like armed forces from voting, contrary to international standards.
- Candidacy requirements were largely in line with international commitments, and 1,425 candidates contested the elections, including 191 women.
- The campaign
Experts analyzed implementation of key judicial reforms in framework of Priority II "Strengthening institutions and good governance". It is publish with the support of European Union and International Renaissance Foundation.
This document is a motion for a European Parliament resolution on implementing the EU Association Agreement with Ukraine. It notes that Ukraine has made progress in implementing reforms related to the agreement, but that more work remains, particularly in the areas of rule of law, governance, and anti-corruption. It acknowledges Ukraine's European aspirations but also expresses concerns about recent electoral laws and the pace of legislative reforms. It calls on Ukraine to fully respect human rights and international obligations.
Portal Of Public Services Of Russian Federation (Psir V2)Victor Gridnev
The document discusses proposals for developing a unified system of public services in Russia using information and communication technologies (ICT). It proposes creating a single federal portal and register of public services that would integrate regional portals and registers. This would provide citizens and businesses with unified access to information about and delivery of public services from all levels of government. It aims to standardize processes, reduce costs, and ensure equal access to services across Russia through use of ICT.
The document summarizes the structure of interagency interaction in financial monitoring in Russia. It outlines how the Federal Financial Monitoring Service of Russia (Rosfinmonitoring) interacts and shares information with executive bodies, law enforcement agencies, oversight bodies, and other federal executive bodies. It also discusses directions of cooperation between these groups, including forming joint legal acts, exchanging representatives, and sharing databases. Multilateral interaction is facilitated through interagency working groups and coordinating bodies.
SYSTEMIC REPORT "MAIN PROBLEMS FACED BY BUSINESS IN CUSTOMS SPHERE" (JULY 2018)Iaroslav GREGIRCHAK
The document contains analysis of the main problems currently faced by business in the customs sphere as well as focuses on the selected directions of its’ strategic reform in Ukraine.
In particular, the Report focuses on such issues as customs value’s determination; inefficient state of legal framework governing use of financial guarantees by declarants; as well as lack of efficient mechanism for bringing to liability officials of customs authorities. We then explore the problem of refund of excessively paid customs duties and fees. The respective recommendations are aimed at preventing the need to seek judicial protection for several consecutive times to attain this goal.
The Report continues with the comprehensive analysis of the problem of classification of goods, followed by the set of recommendations issued to the SFS and the Ministry of Finance, mainly aimed at ensuring unity, consistency and transparency while enforcing laws and regulations.
As far as analysis of the sphere of administrative liability for breach of customs rules is concerned, we recommend bringing Ukrainian legislation in this area in coherence with the best EU practices focused at ensuring that degree of liability is commensurable with the severity of breach and inflicted damages.
Besides, the Report is focuses on groundless intrusion at the part of law enforcers to the customs review procedure. Set of the respective recommendations is aimed at (1) ensuring adequate inter-agency coordination between customs and law enforcement authorities; as well as at (2) introducing legislative amendments which would further restrict the law enforcer’s ability to initiate or otherwise affect customs review procedures.
Furthermore, the Report concentrates on the problem of the protection of intellectual property rights (IPR) faced while transferring goods via customs border of Ukraine, which was examined by the Council from the standpoint of bringing Ukrainian legislation in compliance with the requirements and standards employed in the EU.
Finally, the Report contains critical analysis of selected strategical directions for reforming customs sphere. In particular, having acknowledged recent introduction of a “single window” at the customs, the Council concentrated on such widely anticipated progressive steps as ensuring (1) full-fledged practical use of «authorized economic operators» (АЕО); as well as (2) switch towards post-clearance audit procedure as the main form of control.
The document provides conclusions and recommendations from CVU's observation of the 25 October 2020 local elections in Ukraine. Some key points:
1) The Election Code of Ukraine needs substantial revision following issues identified in the elections. Amendments should not be made shortly before elections.
2) Using proportional representation in small communities should be abandoned, but may be used in larger communities.
3) The right of self-nomination should be provided at all levels of local elections.
4) The electoral quota for candidates to move up party lists should be reduced from 25% to 10%.
5) Requirements around gender quotas, candidate deposits, and other issues need clarification or revision.
This document provides a final report from the OSCE/ODIHR Election Assessment Mission that observed Latvia's parliamentary elections held on 4 October 2014. Some key findings include:
- The elections were administered in an impartial and transparent manner by the Central Election Commission and other election bodies.
- While the legal framework provides a basis for democratic elections, some aspects such as restrictions on candidacy rights and defamation laws could be further improved.
- The campaign environment was open and peaceful, and candidates represented different political views. However, some media outlets were perceived as not fully objective.
- Voting and counting on election day proceeded smoothly and transparently according to observers, although secrecy of the vote was at
Legal shorts 28.11.14 including FCA reminder of new ‘connect’ portal for firm...Cummings
The document provides a summary of recent developments in the financial services industry, including:
1) The FCA reminding firms of its new online portal for regulatory applications and notifications.
2) The UK government withdrawing its legal challenge to the EU cap on bankers' bonuses.
3) A speech by the EU Commissioner for financial services emphasizing putting consumers first.
4) Various regulatory developments and guidance from organizations such as the FCA, JMLSG, and IOSCO.
The document discusses deregulation in Ukraine. It provides an overview of Ukraine's poor ratings in terms of doing business and economic freedom compared to other countries. It then discusses why a "guillotine" approach to deregulation that abolishes all regulations at once is not advisable, as Ukraine has international obligations and harmonized legislation with the EU. The document outlines a vision for deregulation reform through decreasing regulations and inspections while strengthening regulatory bodies. It proposes establishing a Better Regulation Delivery Office to review legislation sector by sector and guide deregulation efforts. Several initial deregulation initiatives and their results are highlighted.
This publication was prepared in the framework
of the Energy Watchdog Coalition project,
implemented by DiXi Group together with Expert
Forum (Romania) and the Secretariat of the
Steering Committee of the Eastern Partnership
Civil Society Forum with the support of the
European Union. The contents of this publication
can under no circumstances be regarded as
reflecting the position of the European Union
Legal shorts 25.10.13 including aifmd updates and crd bonus capsCummings
This document provides a summary of recent legal and regulatory developments in the financial services industry from the past week. Key updates include the FCA clarifying timeframes for AIFM full-scope applications, ESMA publishing a table of AIFMD MoUs between EU and non-EU regulators, HM Treasury issuing a call for evidence on the UK-EU balance of competences on financial services, and the FCA setting out its proposed approach to implementing the CRD IV bonus cap.
This presentation by John Davies Freshfields was made during a roundtable discussion on Public interest considerations in merger control held at the 123rd meeting of the Working Party No. 3 on Co-operation and Enforcement on 14 June 2014. More papers, presentations and contributions from delegations on the topic can be found out at www.oecd.org/daf/competition/public-interest-considerations-in-merger-control.htm
The document discusses the implementation of procurement legislation in Trinidad and Tobago. It outlines that key parts of the legislation need to be proclaimed to become operational, including establishing the Office of Procurement Regulation and appointing a Regulator. It also discusses the challenges of implementing major organizational changes across many public and private entities using a change management approach. Next steps proposed include reinstating an oversight committee to guide the implementation process.
This report analyzes factors that influence national compliance with the legal commitments of regional economic communities (RECs) in Eastern and Southern Africa. It identifies conditioning factors like the coherence of legal/institutional frameworks and political leadership. It also examines compliance variables such as the clarity of rights/obligations in treaties and monitoring mechanisms. The report finds that compliance is higher when community law is precise and easily transposed into national law. It also notes the importance of technical leadership and addressing economic challenges to compliance. Monitoring systems are still developing in RECs and would benefit from greater independence, comprehensiveness, and links to outcomes that can drive change. Overall, the report recommends politically astute prioritization of commitments that are clear benefits to many
The document discusses debarment of companies from public contracts in the European Union. It provides context on the development of debarment and the issues it presents. It then summarizes the key aspects of the new EU Public Procurement Directives implemented in 2014, including strengthened mandatory grounds for exclusion/debarment such as conviction for corruption, fraud, or other criminal offenses. The directives aim to increase transparency and prevent conflicts of interest in public procurement through measures like mandatory reporting of violations and record keeping of high-value contracts.
The document provides summaries of regulatory news from January 2019 across multiple areas:
1. ESAs published joint standards for simple, transparent, and standardized securitizations to ensure consistent treatment under EMIR.
2. The EBA launched consultations to simplify credit risk data reporting requirements and promote sustainability in EU capital markets.
3. The European Commission adopted implementing regulations for securities financing transaction reporting under SFTR, which also impact EMIR.
Legal shorts 14.11.13 including AIFMD proportionality and EMIR implementationCummings
This document provides summaries of recent legal and regulatory developments in the UK financial services industry across various topics:
1) The FCA updated guidance on proportionality under AIFMD requirements for risk management function segregation.
2) The FCA will publish more detailed approved persons application data every six months, starting with Q2-Q3 2013 figures.
3) The EU Commission rejected a proposal to delay EMIR trade reporting for exchange traded derivatives until 2015; four trade repositories have been registered under EMIR.
SYSTEMIC REPORT: "ADMINISTRATIVE APPEAL: CURRENT STATE AND RECOMMENDATIONS"Iaroslav GREGIRCHAK
The Report is devoted to improving existing state of administrative (internal) appeal procedure in Ukraine.
In Ukraine, government agencies generate a significant number of disputable decisions (actions, inactions). The main reasons for such a situation are both inefficient and corrupt state apparatus. An important reason is also the lack of a quality legal framework governing administrative procedure.
In the light of the foregoing, the possibility of eliminating defects created by the state apparatus promptly and without excessive costs is vital for both businesses and the State. It thus makes administrative (internal) appeal to be a rather urgent topic.
Despite skepticism of business towards this mechanism, it nonetheless appears to be a quite popular tool among entrepreneurs as an alternative to a lawsuit. If there is an opportunity to challenge a controversial decision (action, inaction) of a government agency within the framework of administrative appeal procedure first, or immediately go to court, 73.3% of participants of the Council's survey would firstly lodge an administrative appeal, and only 26.7% of respondents would immediately go to court.
The Report commences with an overview of the current state in this sphere, where: (i) the optional nature of the administrative appeal procedure in Ukraine is highlighted; (ii) reasons for low confidence of business in the administrative appeal procedure and inclination to seek judicial protection are analyzed; and (iii) differences in the degree of development of administrative appeal procedures in different spheres are described.
The Report then proceeds to ascertaining specific problems of the administrative appeal mechanism and elaborating ways to resolve them. A wide range of issues was categorized based on their belonging to one or another of the general 8 principles of administrative procedure, whose observance is the key to a high-quality administrative (internal) appeal procedure, namely: (1) accessibility and comfort (convenience); (2) neutrality (impartiality); (3) openness and transparency; (4) officiality (ex officio); (5) proportionality; (6) timeliness and reasonable terms; (7) reasonableness, consistency, and systemic nature; and (8) effectiveness.
The document summarizes the EBA's FinTech roadmap based on feedback from its consultation on its approach to financial technology. Key points include:
- Respondents supported the EBA's work on FinTech and priorities like authorizations, sandboxes, and business model impacts.
- The roadmap sets priorities for 2018-2019 including monitoring regulations, risks, and consumer issues to promote innovation while ensuring stability and protection.
- An EBA FinTech Knowledge Hub will facilitate knowledge sharing between authorities and firms to help monitor FinTech's effects.
The European Commission report evaluates the implementation of the Late Payment Directive across EU member states. It finds that while the directive has increased awareness of late payments and led to some reductions in average payment periods, its effects have been modest so far. Public authorities in over half of member states do not meet the 30-day limit, and businesses often do not exercise their legal rights due to commercial relationships. The report recommends maintaining the directive, establishing common monitoring systems, and encouraging additional national measures to further accelerate its impact.
This document provides summaries of recent developments in European financial services regulation and related areas in 3 sentences or less:
The European Parliament and EU states have broadly agreed on regulating high frequency trading as part of MiFID II proposals, excluding a minimum resting period requirement for orders. ESMA is consulting on procedural rules for imposing fines under EMIR on trade repositories. The European Commission has outlined its 2014 work program, identifying MiFID II, the single resolution mechanism, ELTIFs and the fourth money laundering directive as priority financial services legislative proposals.
D bove and a yokwana 'the role of competition advocacy in shaping 20 years of...Daniela Bove
12th Annual Conference on competition law, economics and policy (2018)
A paper presented by Daniela Bove and Azania Yokwana on "the role of competition advocacy in shaping 20 years of competition law in South Africa."
The paper shows how competition advocacy played a significant role in cases in the Antiretroviral market, in the construction sector, in markets that employ procurement or bidding processes and in market inquiries. The paper also highlights some of the strategic alliances formed through the competition advocacy initiatives of the Competition Commission of South Africa.
This document provides an introduction and outline for a master's thesis examining the European Commission's 2014 White Paper regarding the regulation of non-controlling minority shareholdings between competitors. The thesis will analyze whether the changes proposed in the White Paper are consistent with closing any existing "regulatory/enforcement gap" and whether they represent an overregulation of the market. It will provide historical context on EU merger control law and examine theories of potential harm from minority shareholdings. It will then analyze the specific systems proposed in the White Paper to address minority shareholdings. The thesis aims to evaluate the proportionality of the proposals and their impact on businesses and the Commission. It focuses solely on the issue of minority shareholdings and does
The document summarizes recommendations from a civil society working group on improving the European Union's financial rules and regulations to better support civil society organizations. The working group welcomes proposed changes to regulations but notes issues that were not properly addressed, such as indirect costs for projects and operating grants. The working group recommends recognizing in-kind contributions, clarifying rules around systemic errors and risk levels. It also recommends increasing funding limits for indirect costs, differentiating between surplus and profit, and broadening exceptions for competitive tender processes. The working group calls for further discussion on these issues to achieve more efficient and effective support for civil society.
Legal shorts 19.06.15 including MiFID II and ESMA launches new strategyCummings
The document provides a weekly legal briefing on developments in the financial services industry from Cummings Law. It summarizes recent statements, reports and consultations from various regulatory bodies including ESMA, IOSCO, the European Commission, the FCA and the EBA on topics such as MiFID II implementation, ESMA's new strategy, EMIR frontloading rules, the Capital Markets Union, FCA's Project Innovate, equivalence of third country GAAP standards, and responses to consultations on remuneration guidelines and securities financing transactions. Readers are invited to contact the firm to discuss any of the points raised.
EMIR draft regulatory technical standards on contracts having a direct direct, substantial and foreseeable effect within the Union and non-evasion of provisions of EMIR
This document summarizes some of the key challenges involved with hostile takeovers from a Ukrainian antitrust perspective. It notes that Ukrainian law provides limited statutory guidance on hostile takeovers, leaving several issues unclear or problematic in practice. These include difficulties for acquirers in obtaining necessary information from unwilling target companies, uncertainty around timing requirements for antitrust reviews, and potential conflicts between Ukrainian and European Union/UK takeover laws and deadlines. The lack of regulation in Ukraine on this issue can benefit resisting target management but contradicts the "board neutrality" principle followed in the EU of allowing shareholders to decide on bids.
Similar to SYSTEMIC REPORT "CHALLENGES AND PROBLEMS IN THE SPHERE OF COMPETITION PROTECTION AND OVERSIGHT" (20)
СИСТЕМНИЙ ЗВІТ "АДМІНІСТРУВАННЯ ПОДАТКІВ, ЯКІ СПЛАЧУЄ БІЗНЕС" (СЕРПЕНЬ 2020)Iaroslav GREGIRCHAK
Документом охоплюються найбільш «болючі» для бізнесу практичні податкові питання, з якими Рада бізнес-омбудсмена стикалась за всі роки свого існування.
Звіт розпочинається з аналізу специфічних проблемних аспектів адміністрування наступних чотирьох податків, які сплачує бізнес в Україні: податок на додану вартість (ПДВ), єдиний соціальний внесок (ЄСВ), єдиний податок та податок на прибуток підприємств.
Що стосується ПДВ документ зосереджується на проблемах, які виникають у бізнесу в процесі функціонування новітніх інструментів його адміністрування – Єдиного реєстру податкових накладних (ЄРПН), Системи електронного адміністрування (СЕА) та Системи моніторингу критеріїв оцінки ризиків (СМКОР). Також були досліджені проблеми повноти декларування та сплати ПДВ в ході податкових перевірок та затримки із його бюджетним відшкодуванням.
Аналіз скарг, пов’язаних із ЄСВ насамперед стосується питання нарахування єдиного внеску «сплячим» (таким, що не ведуть діяльності) підприємцям. Далі було досліджено застосуванням пільг з ЄСВ. Наприкінці проаналізовані проблеми, пов’язані з системою обліку недоїмки з ЄСВ.
В частині дослідження спрощеної системи оподаткування (єдиного податку), - що відіграє вкрай важливу роль для малого бізнесу в Україні, - документ аналізує аспект визначення та застосування ставок цього місцевого податку. Далі піднімається цілий пласт питань, пов’язаних із тим, що незначні порушення з боку бізнесу часто можуть призводити до втрати бізнесом права перебувати на спрощеній системі оподаткування та, на додаток, загрожують вкрай суворою відповідальністю.
У розділі, присвяченому податку на прибуток підприємств було вирішено вибірково зупинитись на кількох проблемних аспектах, з якими бізнес часто звертається до Ради: (i) практика невизнання податковими органами витрат, які «не мають ділової мети»; (ii) спірні питання, пов’язані із обчисленням авансових внесків з цього податку; та (iii) суперечки, що виникають при відображенні в обліку деяких поширених видів фінансових операцій, які здійснюються всередині груп компаній.
Надалі у звіті розглянуті окремі процедурні аспекти проведення податкових перевірок (зокрема, формування та періодичне коригування планів-графіків перевірок, призначення позапланових перевірок, виконання таких процедурних дій у ході перевірок як запит документів, проведення інвентаризацій матеріальних активів тощо). Приділена увага й важливості встановлення правильних ключових показників ефективності (KPI) для контрольно-перевірочної роботи.
Розділ, присвячений оскарженню рішень податкових органів, аналізує низку специфічних саме для податкової сфери аспектах цього інституту. Увага була приділена як процедурі розгляду заперечень на акти перевірок, так і власне адміністративному оскарженню рішень податкових органів у ДПС України.
Завершальні розділи документу присвячені узагальнюючим податковим консультаціям (УзПК), оприлюдненню інформації податковими органами та веденню інтегрованих карток платників податків (ІКП)
SYSTEMIC REPORT "ADMINISTERING TAXES PAID BY BUSINESS" (AUGUST 2020))Iaroslav GREGIRCHAK
The Report comprehensively covers the most topical tax issues for business encountered in the Council’s investigatory practice since its inception back in 2015.
The document commences by focusing on specific problems related to administration of the following four taxes paid by businesses in Ukraine: value added tax (VAT), unified social contribution (USC), single tax and corporate profit tax.
As for VAT, the Report explores problems faced by business due to the manner in which newest tools of its administration are functioning, namely – the Unified Register of Tax Invoices (URTI), the System of Electronic Administration (SEA) and the System of Monitoring Tax Invoices’ Compliance with Risk Criteria (SMKOR). Besides, it examined problems “traditionally” associated with this tax – i.e., completeness of declaration and payment of VAT during tax inspections and delays with its refund.
The chapter analyzing complaints related to USC starts with the issue (which emerged on 2017) of a single contribution’s accrual to “dormant” (non-operating) entrepreneurs. Thereafter it highlights several issues related to application of USC privileges. Problems related to USC’s arrears recordation system were also scrutinized.
While examining simplified taxation system (single tax) regime – which plays an extremely important role in the life of small business in Ukraine – the Report focuses on the problematic aspect of determining and applying rates of this local tax. Thereafter, it concentrates on substantial liability invoked on businesses due to minor violations of businesses often resulting in a loss of their right to remain on the simplified taxation system.
Chapter devoted to corporate profit tax touches upon: (i) non-recognition of expenses having “no business purpose” by tax authorities; (ii) controversial issues related to calculation of advance payments of this tax; and (iii) disputes arising from accounting certain common types of financial transactions carried out within groups of companies.
The Report then examines selected procedural aspects of conducting tax audits (particularly, formation and periodic adjustment of inspection’s plans-schedules; ordering of unscheduled inspections; performing such procedural actions during inspections as requesting documents; taking physical inventories of tangible assets, etc.). Attention is also paid to the importance of establishing the correct key performance indicators (KPIs) for control and audit activities.
In the chapter on tax authorities’ decisions appeal the document addressed procedures for considering objections to tax audits reports and actual administrative appeal of tax authorities’ decisions with the State Tax Service of Ukraine.
The remaining chapters of the systemic report deal with generalized tax consultations (GTC), disclosure of public information by tax authorities and maintenance of taxpayers’ integrated cards (TIC).
СИСТЕМНИЙ ЗВІТ "ЗЛОВЖИВАННЯ І ТИСК ПРАВООХОРОНЦІВ НА БІЗНЕС"Iaroslav GREGIRCHAK
У системному звіті «Зловживання та тиск правоохоронців на бізнес» (грудень, 2021) експерти Ради під керівництвом заступника бізнес-омбудсмена Ярослава Грегірчака системно дослідили найбільш поширені порушення правоохоронців щодо бізнесу та розробили пакет з 27 рекомендацій Міністерству юстиції України, Офісу Генерального прокурора та Міністерству внутрішніх справ України.
Звіт розпочинається з дослідження проблематики початку досудового розслідування кримінальних проваджень. РБО обґрунтовує доцільність диджиталізації процедури внесення даних до Єдиного державного реєстру досудових розслідувань. Далі актуалізуються попередні рекомендації Ради щодо (i) безпідставного відкриття кримінальних проваджень за ухилення від сплати податків; та (ii) необґрунтованої відмови у відкритті кримінальних проваджень.
Наступний розділ присвячено неефективності (затягуванню) досудового розслідування. Було проаналізовано проблематику в кримінальних провадженнях, які були відкриті до 15 березня 2018 року, стосовно яких КПК не встановлює граничні строки досудового розслідування, що робить такі кримінальні провадження зручним інструментом тиску на бізнес. Далі РБО зупиняється на проблемі відсутності належного доступу потерпілого і підозрюваного до окремої інформації про хід досудового розслідування. Обгрунтовується необхідність наділити сторону захисту і потерпілого правом самостійно подавати до прокурора або слідчого судді клопотання про продовження строку досудового розслідування. Наприкінці розділу документ досліджує проблематику судових експертиз.
У розділі, присвяченому зловживанням під час досудового розслідування РБО зупиняється на (i) незаконному утриманню арештованого майна; (ii) передачі матеріалів кримінальних проваджень від одного органу досудового розслідування до іншого; та (iii) практика повторних арештів.
Звіт закінчується розлогим розділом про дисциплінарну відповідальність слідчих і прокурорів.
SYSTEMIC REPORT "ABUSES AND PRESSURE INFLICTED BY LAW ENFORCERS ON BUSINESS"Iaroslav GREGIRCHAK
In the Business Ombudsman Council's Systemic Report "Abuses and Pressure of Law Enforcers on Business" the Council's team led by Iaroslav Gregirchak, the Deputy Business Ombudsman, comprehensively examined the most common malpractices at the part of law enforcers and developed a set of 27 recommendations to the Ministry of Justice of Ukraine, the General Prosecutor’s Office of Ukraine and the Ministry of Internal Affairs of Ukraine.
The document commences by examining problems related to the stage when criminal proceedings are being launched. The Report advocates the need for digitalization of the way the data is entered with the Unified State Registry of Pre-Trial Investigations (USRPI). Thereafter it updates the Council’s earlier recommendations aimed at alleviating pressure inflicted on business through (i) groundless launching of criminal proceedings based on allegations of tax evasion; as well as (ii) groundless denial to launch criminal proceedings.
The next chapter is focused on an inefficient (delayed) course of pre-trial investigation. The document commences by concentrating on (i) criminal proceedings launched prior to March 15, 2018, in whose regard the Criminal Procedural Code does not set forth deadlines of pre-trial investigation, thus resulting in such criminal proceedings becoming a convenient tool for inflicting pressure on business. While drawing attention to the lack of proper access to selected information about the course of pre-trial investigation, the Report calls for the need to simplify both suspect’s and victim’s access to the USRPI. Afterwards the document advocates vesting the defence and injured party with the right to independently lodge motions with prosecutor or investigatory judge seeking extension of terms of pre-trial investigation. The chapter ends by focusing on the taxonomy of problems stemming from the current state of legal framework governing use of court-ordered/forensic expert examinations.
In the subsequent chapter discussing procedural abuses in course of pre-trial investigations, the Report concentrated on the following taxonomy of this problem: (i) illicit retention of arrested property; (ii) transfer of materials of criminal proceedings from one body of pre-trial investigation to another; and (iii) practice of reiterative arrests. The Report ends with a comprehensive chapter focused on disciplinary liability of investigators and prosecutors.
UCGA - CERTIFICATE IN CORPORATE GOVERNANCE - IAROSLAV GREGIRCHAKIaroslav GREGIRCHAK
Certificate in Corporate Governanace issued to Iaroslav Gregirchak by the Ukrainian Corporate Governance Academy and INSEAD Corporate Governance Center
СИСТЕМНИЙ ЗВІТ "АДМІНІСТРАТИВНЕ ОСКАРЖЕННЯ: ПОТОЧНИЙ СТАН ТА РЕКОМЕНДАЦІЇ"Iaroslav GREGIRCHAK
Звіт присвячений удосконаленню процедури адміністративного (відомчого) оскарження в Україні.
Результати опитування, проведеного Радою бізнес-омбудсмена протягом березня-травня 2019 року засвідчили неабияку актуальність теми адміністративного (відомчого) оскарження; а з іншого – надзвичайно низький рівень довіру бізнесу до цього інституту.
У відповідь на цей запит документ містить як всебічний аналіз вказаної проблеми так і цілий комплекс пропозицій щодо його вдосконалення, виходячи з їх приналежності до 8 принципів адміністративної процедури, дотримання яких, на нашу думку, є запорукою якісного адміністративного (відомчого) оскарження. Мова йде про (1) доступність і зручність; (2) безсторонність і неупередженість органів оскарження; (3) відкритість і прозорість; (4) офіційність; (5) пропорційність; (6) своєчасність; (7) обґрунтованість, послідовність та системність; і власне (8) ефективність.
З огляду на це, левова частка рекомендацій відштовхується від необхідності прийняття Закону України «Про адміністративну процедуру». При цьому, Рада пропонує при підготовці законопроєкту взяти за основу положення попереднього проєкту Закону України «Про адміністративну процедуру» від 28 грудня 2018 року № 9456, який був зареєстрований у Верховній Раді України VIII скликання, однак жодного разу не розглядався у першому читанні.
Публичная администрация в Украине продуцирует достаточное количество противоречивых (а с точки зрения бизнеса вообще незаконных) решений, действий и бездействия. Суды обходятся дольше и дороже. При таких условиях правильным путем будет следование лучшей международной практике. В развитых юрисдикциях административное обжалование является классическим элементом досудебного урегулирования всяческих конфликтных ситуаций в отношениях с публичными субъектами. Это еще одна вариация на тему квазисудебной процедуры.
Соответственно, процедура административного обжалования органично ложится в концепт реформы публичной администрации и изменения парадигмы отношений между бизнесом и властью.
СИСТЕМНИЙ ЗВІТ "ПРОБЛЕМИ АДМІНІСТРУВАННЯ ПОДАТКІВ ДЛЯ БІЗНЕСУ В УКРАЇНІ" (ЖОВ...Iaroslav GREGIRCHAK
Звіт розпочинається з вивчення нещодавно запровадженої системи електронного адміністрування ПДВ – одного з найбільш критичних питань для українських платників податків. Наступна тема – аналіз поточної ситуації з відшкодуванням ПДВ, що історично вважається одним із найбільш істотних проблем українського бізнесу. Третє питання, на яке ми звернули увагу у звіті – зловживання податкових органів при реалізації ними своїх повноважень щодо перевірки місцезнаходження платника податків шляхом присвоєння йому так званого «стану 9», що саме по собі може бути пов’язане із багатьма негативними наслідками для платника. Четверте системне питання, описане у звіті – проблема податкових перевірок, що проводяться податковими органами. Остання системна проблема, що розглядається у звіті – неефективність процедури адміністративного оскарження протизаконних дій податкових органів.
Вивчення викладених у звіті системних проблем виявив два ключові недоліки, загалом притаманні вітчизняній податковій системі. На наш погляд, обидва з них вимагають належного реагування як суттєва запорука ефективності запланованих змін до Податкового кодексу.
По-перше, це низький рівень управління комунікаціями в податкових органах України всіх рівнів (у тому числі в Державній фіскальній службі та в податкових органах нижчих рівнів). Отже, існує нагальна потреба регулярно оприлюднювати певні відомості та статистичні дані. Очікується, що такий підхід дасть змогу організувати ефективний громадський контроль за діяльністю Державної фіскальної служби. Точний перелік інформації, що підлягає оприлюдненню, має бути розроблений за участі представників громадськості та недержавних організацій. Тим не менше, на наш погляд, він має містити інформацію про суми надходжень до державного бюджету (з розподілом за основними податками); суми відшкодованого та не відшкодованого ПДВ; суми переплат платників податків; суми заборгованостей платників податків; кількість податкових перевірок із поділом на види; кількість скарг щодо рішень податкових органів (із поділом на успішне та неуспішне вирішення) тощо.
По-друге, запланована «податкова реформа» має бути реалізована виходячи з того, що змінене таким чином податкове законодавство буде, в подальшому, залишатися незмінним, а, отже, передбачуваним. Хоч відповідний принцип вже протягом тривалого часу міститься в українському податковому законодавстві, на практиці він фактично не діє. За минулий рік податкове законодавство доповнювалося та змінювалося багато разів, що постійно провокувало суспільний резонанс і порушувало нормальну щоденну діяльність українських підприємств. Отже, очікується, що, як тільки «податкова реформа» буде реалізована, Уряд не повинен запроваджувати суттєвих змін протягом доволі тривалого періоду.
SYSTEMIC REPORT "PROBLEMS WITH ADMINISTERING BUSINESS TAXES IN UKRAINE" (OCTO...Iaroslav GREGIRCHAK
The Report commences by studying recently introduced system of the VAT electronic administration – one of the most turbulent issues for the corporate taxpayers in Ukraine – followed by the analysis of the current situation with VAT cash refund, which has historically been one of the most significant problems in the Ukrainian tax system. The third issue we paid attention to in the Report is the practice at the part of the tax authorities to abuse their authority to verify the actual location of the taxpayers by assigning taxpayers’ with the so-called “state 9 status”, which triggers various negative ramifications for the latter. The fourth systemic issue described in the Report is the problem with the tax audits carried out by the tax authorities. The last systemic problem studied in the Report is the inefficient functioning of the procedure of the so-called “administrative appeal” aimed at enabling taxpayers to challenge the malpractice of the tax authorities.
Our analysis of the foregoing systemic problems unveiled two major cross-cutting deficiencies attributable to the Ukrainian tax administration system as a whole. In our view, both of them require adequate redress, at least by ensuring that the contemplated amendments to the Tax Code are sufficiently effective.
First, it is the poor level of communication management of the Ukrainian tax authorities at all levels (including both the State Fiscal Service and tax authorities at the lower levels). Hence, there is a strong need to regularly disclose certain data and statistics to the public. Among other things it is expected that such an approach should enable the latter to better monitor the activities of the State Fiscal Service. The specific list of such information and/or data shall be elaborated in cooperation with the representatives of the public and non-governmental organizations. Yet, in our view, it may include, inter alia, amounts of incomings to the State Budget (with a breakdown into major taxes); amounts of VAT reimbursed and VAT outstanding for reimbursement; amounts of taxes overpaid by the taxpayers; amount of the taxpayers’ tax debt; number of tax audits with breakdown into various types of audits; number of appeals against the decisions of the tax authorities (with a breakdown into successful and non-successful), etc.
Second, the contemplated “tax reform” shall be implemented with the view of the subsequent predictability (stability) of the revised tax legislation. The respective principle has been historically embodied in Ukrainian tax legislation, but rarely complied with in practice. Over the past year, the tax legislation has been amended and changed many times, thus, provoking the public outcry and disturbing the normal day-to-day operations of the Ukrainian businesses. Hence, it is expected from the Government, that once the “tax reform” is implemented, it will not undergo further significant change for a reasonably long period of time.
СИСТЕМНИЙ ЗВІТ "ВИКЛИКИ ТА ПРОБЛЕМИ У СФЕРІ ЗАХИСТУ ТА КОНТРОЛЮ ЗА КОНКУРЕНЦІЄЮ"Iaroslav GREGIRCHAK
На початку Звіту особлива увага приділена поточному стану інституційної спроможності АМКУ, де Рада рекомендує забезпечити останнім чітке визначення в щорічних планах пріоритетних напрямків діяльності на майбутній рік, включаючи, де таке можливо, інформацію про ринки, що будуть досліджуватися.
У ході розгляду питання про недостатню співпрацю між АМКУ та іншими органами державної влади основна увага приділяється необхідності розробити план дій, спрямований на реалізацію Концепції Загальнодержавної програми розвитку конкуренції в Україні на 2014-2024 роки.
Далі Звіт містить всебічний аналіз основних операційних функцій АМКУ, до яких відносять проведення розслідувань, прийняття відповідних рішень та їх виконання.
Що стосується повноваження АМКУ надавати дозвіл на здійснення концентрації, запропоновано (i) здійснювати розгляд угод про відмову від конкуренції за «спрощеною» процедурою; та (ii) внести відповідні зміни до законодавства, щоб чітко визначити сторони, відповідальні за вчинення концентрації без отримання відповідного дозволу.
Щодо функції АМКУ розглядати справи про зловживання монопольним (домінуючим) становищем, то рекомендується (i) встановити чіткі строки розгляду (розслідування) таких справ, та (ii) прямо передбачити, що відкликання заявником своїх заяв не є підставою для автоматичного припинення розгляду справи.
Також запропоновано внести зміни до порядку прийняття рішень АМКУ, щоб забезпечити, що всі рішення АМКУ приймаються колегією державних уповноважених АМКУ, за винятком державного уповноваженого, який розслідував справу. Пропонується щоб останній, тим не менш, брав участь у відповідних засіданнях з метою оприлюднення результатів розслідування, проте без права голосу.
Що стосується виконання рішень АМКУ, то наша основна рекомендація полягає в необхідності прийняття Методики розрахунку штрафних санкцій як юридично обов’язкового нормативно-правового акту.
Що стосується доступу до інформації, Радою запропоновано (i) впровадити електронну базу даних, яка б дала можливість заявникам отримувати загальну інформацію про поточний стан розгляду справ/запитів, поданих до АМКУ, які не мають конфіденційний характер; та (ii) вдосконалити існуючу процедуру надання особам, які беруть участь у слуханнях АМКУ, доступу до матеріалів справи.
Із метою запровадження більш комплексної програми звільнення від відповідальності, Радою рекомендовано розглянути доцільність зменшення розміру штрафів за участь у антиконкурентних узгоджених діях для заявників, наступних після першого заявника.
Що стосується сфери досудового оскарження результатів публічних закупівель, то Радою запропоновано детальніше регламентувати права сторін процедури оскарження в АМКУ результатів публічних закупівель.
Насамкінець, в Звіті приділено увагу правовому регулюванню державної допомоги.
СИСТЕМНИЙ ЗВІТ "АКТУАЛЬНІ ПРОБЛЕМИ БІЗНЕСУ У МИТНІЙ СФЕРІ" (ЛИПЕНЬ 2018)Iaroslav GREGIRCHAK
Документ зосереджується як на актуальних проблем бізнесу у митній сфері так і окремих стратегічних напрямів її реформування.
Так, у Звіті досліджуються питання, пов’язані із визначенням митної вартості, неефективністю регулювання використання декларантами фінансових гарантій та відсутністю дієвих механізмів притягнення до відповідальності службових осіб митних органів. Вивчається проблема повернення надміру сплачених митних платежів та розроблені рекомендації спрямовані на уникнення необхідності кількаразового звернення з цією метою бізнесу до судів. Звіт продовжується комплексним аналізом проблем класифікації товарів, за наслідком якого надається низка рекомендацій ДФС та Мінфіну, спрямованих, головним чином, на забезпечення єдності, прозорості та послідовності правозастосовної практики. В частині аналізу сфери адміністративної відповідальності за порушення митних правил, рекомендовано привести законодавство України у цій частині у відповідність до кращих практик ЄС, забезпечуючи співмірність відповідальності з небезпечністю порушень та завданими збитками. Не оминає Звіт увагою і питання невиправданого втручання правоохоронних органів у процедуру митного огляду. Набір відповідних рекомендацій зосереджується на (1) необхідності забезпечення належної міжвідомчої взаємодії правоохоронців та митників; та на (2) законодавчих змінах, які обмежать можливості правоохоронців щодо ініціювання митних оглядів та/або здійснення фактичного впливу на їх проведення. Звітом також охоплена проблема захисту прав інтелектуальної власності (ПІВ) під час переміщення товарів через митний кордон України, яка була досліджена Радою з точки зору приведення законодавства України у відповідність з вимогами та стандартами ЄС.
Нарешті, Звіт містить огляд окремих стратегічних напрямків реформування митної сфери. Тут Рада зосередила увагу на інших очікуваних прогресивних нововведеннях, таких як (1) повноцінне практичне застосування інституту «авторизованих економічних операторів» (АЕО); та (2) перехід до пост-митного аудиту як до основної форми контролю. По цим питанням Рада підготувала рекомендації, які пропонують запровадити законодавчі зміни, які (i) належним чином запустять роботу інституту АЕО; а також (ii) створять умови для поступового зміщення фокусу митного контролю зі стадії перетину товарами митного кордону на стадію пост-аудиту.
Системний звіт «Зловживання повноваженнями з боку правоохоронних органів у їх...Iaroslav GREGIRCHAK
В Звіті розглядається наступна типологія зловживань, яка базується на досвіді діяльності Ради бізнес-омбудсмена: (1) безпідставний початок досудового розслідування кримінальних проваджень; (2) необґрунтовані відмови у відкритті кримінальних проваджень; (3) неефективність (затягування) досудового розслідування; та (4) зловживання, які вчиняються на стадії досудового розслідування
Кожен з вищезазначених типів зловживань розглянуто шляхом (1) опису суті відповідної проблеми (з посиланням на конкретні справи, з якими ми стикалися в нашій практичній роботі), та шляхом (2) підготовки переліку конкретних рекомендацій, спрямованих на мінімізацію розповсюдженості таких зловживань в майбутньому.
Sytemic Report "Abuse of Powers by the Law Enforcement Authorities in their R...Iaroslav GREGIRCHAK
The document discusses various abuses of power by law enforcement authorities against businesses in Ukraine. It analyzes complaints received by the Business Ombudsman Council regarding four main types of abuses: 1) groundless commencement of criminal proceedings, 2) groundless refusal to commence criminal proceedings, 3) inefficient pre-trial investigations that last for years, and 4) abuses during the pre-trial investigation stage. For each abuse, the document describes examples from the Council's cases and provides recommendations to address the issues, such as setting time limits for investigations and restricting seizure of business documents. The overall aim is to minimize unlawful pressure on businesses and ensure proper oversight of law enforcement activities.
СИСТЕМНИЙ ЗВІТ БОРОТЬБА З РЕЙДЕРСТВОМ: СУЧАСНИЙ СТАН ТА РЕКОМЕНДАЦІЇIaroslav GREGIRCHAK
Визнається, що ініційовані Мін’юстом протягом 2015-16 років зміни в законодавство та інституційне поле містять важливі новели, покликані остаточно викорінити найбільш відомі схеми рейдерського захоплення корпоративних прав та/або активів (майна). В той же час, Звіт містить актуальний набір наших подальших «анти-рейдерських» рекомендацій.
This document analyzes Ukraine's ranking in the World Bank's Doing Business 2015 report for the indicator "Getting Electricity" against Ukraine's legal framework in mid-2015. It finds that Ukraine's ranking does not fully reflect recent legal changes that simplified the process. Specifically, it argues the number of procedures should be 5 instead of 10, and the total duration should be 77-117 days instead of 277 days. The document makes recommendations to further streamline the process to improve Ukraine's international ranking and reduce corruption.
Genocide in International Criminal Law.pptxMasoudZamani13
Excited to share insights from my recent presentation on genocide! 💡 In light of ongoing debates, it's crucial to delve into the nuances of this grave crime.
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee
Presentation slides for a session held on June 4, 2024, at Kyoto University. This presentation is based on the presenter’s recent paper, coauthored with Hwang Lee, Professor, Korea University, with the same title, published in the Journal of Business Administration & Law, Volume 34, No. 2 (April 2024). The paper, written in Korean, is available at <https://shorturl.at/GCWcI>.
Integrating Advocacy and Legal Tactics to Tackle Online Consumer Complaintsseoglobal20
Our company bridges the gap between registered users and experienced advocates, offering a user-friendly online platform for seamless interaction. This platform empowers users to voice their grievances, particularly regarding online consumer issues. We streamline support by utilizing our team of expert advocates to provide consultancy services and initiate appropriate legal actions.
Our Online Consumer Legal Forum offers comprehensive guidance to individuals and businesses facing consumer complaints. With a dedicated team, round-the-clock support, and efficient complaint management, we are the preferred solution for addressing consumer grievances.
Our intuitive online interface allows individuals to register complaints, seek legal advice, and pursue justice conveniently. Users can submit complaints via mobile devices and send legal notices to companies directly through our portal.
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...Massimo Talia
This guide aims to provide information on how lawyers will be able to use the opportunities provided by AI tools and how such tools could help the business processes of small firms. Its objective is to provide lawyers with some background to understand what they can and cannot realistically expect from these products. This guide aims to give a reference point for small law practices in the EU
against which they can evaluate those classes of AI applications that are probably the most relevant for them.
Receivership and liquidation Accounts
Being a Paper Presented at Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) on Friday, August 18, 2023.
What are the common challenges faced by women lawyers working in the legal pr...lawyersonia
The legal profession, which has historically been male-dominated, has experienced a significant increase in the number of women entering the field over the past few decades. Despite this progress, women lawyers continue to encounter various challenges as they strive for top positions.
Lifting the Corporate Veil. Power Point Presentationseri bangash
"Lifting the Corporate Veil" is a legal concept that refers to the judicial act of disregarding the separate legal personality of a corporation or limited liability company (LLC). Normally, a corporation is considered a legal entity separate from its shareholders or members, meaning that the personal assets of shareholders or members are protected from the liabilities of the corporation. However, there are certain situations where courts may decide to "pierce" or "lift" the corporate veil, holding shareholders or members personally liable for the debts or actions of the corporation.
Here are some common scenarios in which courts might lift the corporate veil:
Fraud or Illegality: If shareholders or members use the corporate structure to perpetrate fraud, evade legal obligations, or engage in illegal activities, courts may disregard the corporate entity and hold those individuals personally liable.
Undercapitalization: If a corporation is formed with insufficient capital to conduct its intended business and meet its foreseeable liabilities, and this lack of capitalization results in harm to creditors or other parties, courts may lift the corporate veil to hold shareholders or members liable.
Failure to Observe Corporate Formalities: Corporations and LLCs are required to observe certain formalities, such as holding regular meetings, maintaining separate financial records, and avoiding commingling of personal and corporate assets. If these formalities are not observed and the corporate structure is used as a mere façade, courts may disregard the corporate entity.
Alter Ego: If there is such a unity of interest and ownership between the corporation and its shareholders or members that the separate personalities of the corporation and the individuals no longer exist, courts may treat the corporation as the alter ego of its owners and hold them personally liable.
Group Enterprises: In some cases, where multiple corporations are closely related or form part of a single economic unit, courts may pierce the corporate veil to achieve equity, particularly if one corporation's actions harm creditors or other stakeholders and the corporate structure is being used to shield culpable parties from liability.
Lifting the Corporate Veil. Power Point Presentation
SYSTEMIC REPORT "CHALLENGES AND PROBLEMS IN THE SPHERE OF COMPETITION PROTECTION AND OVERSIGHT"
1. CHALLENGES AND PROBLEMS IN THE SPHERE
OF COMPETITION PROTECTION AND OVERSIGHT
SYSTEMIC REPORT
2016
2.
3. 3www.boi.org.ua
CONTENTS
Contents
FOREWORD 5
CHALLENGES AND PROBLEMS 10
2.1 Institutional capacity of the AMCU 10
The Problem 10
The Council’s Recommendations 12
2.2 The AMCU’s co-operation with other state authorities 13
The Problem 13
CASE No. 1. Lack of Consistent Interpretation of Legislation 15
CASE No. 2. Lack of Interaction between the AMCU and the Sectoral Regulators 16
The Council’s Recommendations 17
2.3 The AMCU’s Administrative and Procedural Discretion 18
2.3.1 Consideration of applications lodged to receive concentration consents 18
The Problem 18
(a) Non-competition agreements 19
(b) Liability for concentration committed without AMCU’s prior approval 20
Council’s Recommendations 20
2.3.2 Consideration (investigation) of applications and cases
on abuse of monopolistic (dominant) position 21
The Problem 21
CASE No. 3. Abuse of Dominant Position by a Natural Monopoly 21
The Council’s Recommendations 23
2.3.3 The AMCU’s internal decision-making procedure 24
The Problem 24
The Council’s Recommendation 25
2.3.4 The AMCU’s enforcement authority 26
(a) Methodology for determining amount of fines 26
The Problem 26
The Council’s Recommendations 27
(b) The possibility to challenge amount of fine in court 28
The Council’s Recommendation 30
(c) Information outreach 30
The Problem 30
The Council’s Recommendation 30
1
2
4. 4www.boi.org.ua
2.4 Access to information 31
2.4.1 Status of various filings lodged with the AMCU 31
The Problem 31
The Council’s Recommendations 32
2.4.2 Access to the materials of competition cases 32
The Problem 32
The Council’s Recommendations 33
2.5 Leniency regime 33
The Problem 33
The Council’s Recommendation 34
2.6 Public procurement 35
2.6.1 Right to present additional evidence/submit new documents 36
The Problem 36
2.6.2 Use of electronic procurement system data 36
The Problem 36
The Council’s Recommendations 37
2.7 State Aid 38
2.7.1 Awareness about State Aid 38
The Problem 38
The Council’s Recommendations 39
2.7.2 State of Secondary Legislation 40
The Problem 41
The Council’s Recommendations 41
2.7.3 State Aid Register 41
The Problem 41
The Council’s Recommendations 42
5. 5www.boi.org.ua
FOREWORD
FOREWORD
Strong competition environment is one of
the cornerstones of an effective economy.
Thus, in order to foster inflow of investment
needed for sustainable growth, Ukraine needs
to ensure existence of the strong competition
law and policy. The importance of this issue is
acknowledged, among others, in the EU-Ukraine
Association Agreement1
and through continuing
process of adoption of the National Competition
Development Programme2
(hereinafter – the
“NCDP”).
The foregoing factors represent favorable
context for implementing reforms aimed
at making Ukrainian economy to be more
competitive and market-oriented, where
enhancing (and, where necessary, untapping)
institutional capacity of the Anti-Monopoly
Committee of Ukraine (hereinafter – the
“AMCU”) constitutes a key cross-cutting
element of such a complex endevour.
Yet, the Business Ombudsman Council
(hereinafter – the “Council”) receives periodic
complaints challenging manner in which the
AMCU (and/or its’ territorial divisions) exercise
its’ powers. Although the number of such
complaints is not large in comparison with
other spheres where we regularly record
occurrence of business malpractice (such as
administering business taxes or abuses at the
part of law enforcement authorities or bodies
of sub-national governance), by no means we
underestimate the importance of resolving
existing challenges and problems in the field of
competition in Ukraine.3
Hence, in this report the Council discusses
systemic problems and challenges in the
sphere of competition protection and oversight
(hereinafter – the “Report”). The Report
focuses on specific issues in selected areas
of competition law and policy relevant to
the Council’s mandate to contribute to the
transparency of the activities of state authorities,
reduction of corruption and to prevent unfair
treatment of business.4
From that perspective
the scope of this Report is inherently narrower5
than comprehensive studies of the competition
law and policy in Ukraine that are being
currently conducted (or contemplated to be) by
OECD and the World Bank.6
1
See Competition related extracts from the Association Agreement between the European Union and its Member States, on
the one part, and Ukraine, of the other part. OJ L 161, 29 May 2014, p. 3-2137. Available at http://ec.europa.eu/competition/
international/bilateral/ukraine_eu_2014.pdf (hereinafter - the “EU-Ukraine Association Agreement” or, where the reference
to the part of the EU-Ukraine Association Agreement containing provisions on the Deep and Comprehensive Free Trade
Agreement, is more relevant - the “DCFTA”, as the case may be).
2
See in Ukrainian at http://zakon0.rada.gov.ua/rada/show/690-2012-%D1%80#n9.
3
Among other things, it is evidenced by a rather low ranking Ukraine currently occupies in the World Economic Forum’s Global
Competitiveness Index comparing 140 countries. In particular, for “intensity of local competition” Ukraine is ranked 99th; for
“extent of market dominance” – 98th; and for “effectiveness of anti-monopoly policy” – 136th in the world. See at http://www3.
weforum.org/docs/gcr/2015-2016/UKR.pdf.
4
See, generally, the Resolution of the Cabinet of Ministers of Ukraine No. 691, dated 26 November 2014, as amended “On
Establishment of the Business Ombudsman Council”.
5
Hence, such competition related topics as protection of consumer’s rights, pricing (including parallel pricing and tariffs), as
well as various industry-specific issues (covered elsewhere in the Report, if applicable) fell beyond the scope of the Report.
6
As at the time of this Report OECD was reportedly revising both its’ country study “Ukraine – Peer Review of Competition
Law and Policy”, prepared in 2008 as well as the “Voluntary Peer Review of the Competition Law and Policy of Ukraine”,
prepared by UNCTAD in 2013. During fall 2016, the World Bank visited Ukraine with the Scoping Mission aimed at facilitating
preparation of the program dedicated to the development of competition in the country.
1
6. 6www.boi.org.ua
FOREWORD
Hence, the primary objective of this Report is
to enhance the overall quality of competition
environment in Ukraine by introducing further
legislative changes, improving the AMCU’s
exercise of its’ administrative and procedural
discretion along with competition advocacy
function to be based, inter alia, on strengthened
cooperation between the AMCU and other state
authorities as well as business.
1) ensure that its’ annual plans clearly specifies
the main priority areas for the forthcoming
year, including, if applicable, markets to be
studied;
2) adopt legislative changes aimed at
unleashing the AMCU’s existing capacity
by improving its’ organizational structure
and equipping it with sufficient operational
resources; and
3) intensify the AMCU’s advocacy activities.
1) promptly adopt the National Competition
Development Program;
2) accelerate working relationships between
the AMCU and the state authorities (with
the emphasis on sectoral regulators)
by expanding the practice of executing
memorandum on partnership; and
3) ensure that not only the AMCU itself but also
other relevant authorities play active role in
eliminating factors impeding ability of the
national competition authority to effectively
exercise powers vested to it in connection
with anti-trust clearance of privatization
transactions.
We commence by focusing at the current state of the AMCU’s institutional capacity, where we
recommend to:
While discussing the lack of sufficient cooperation between the AMCU and other state
authorities, we focuse on the need to:
7. 7www.boi.org.ua
FOREWORD
1) to ensure that consideration of consent
on concerted actions due to execution of
non-competition agreement is conducted on
the basis of simplified procedure, provided
that receipt of concentration consent is
already carried out on the basis of simplified
procedure; and
2) to ensure clear identification of parties liable
for failure to notify about concentration. It
would allow determining party responsible
for committing concentration without seeking
AMCU’s prior consent, provided that the
latter is necessary.
1) set clear deadlines for consideration
(investigation) of such cases; and
2) expressly provide that if an applicant were to
withdraw its’ application in a case on abuse
of monopolistic (dominant) position, this shall
not constitute the substantial ground for the
AMCU to exercise its’ procedural discretion
to terminate consideration of a case.
The AMCU’s internal decision-making
procedure is proposed to be adjusted to ensure
that when rendering an initial decision on its’
merits falls under the authority of the AMCU’s
Board of Commissioners, the adoption of such
a decision shall require majority of the AMCU’s
composition established by law (i.e., 5 persons),
save for the Commissioner who investigated
the case. The latter, nonetheless, should remain
to be involved into decision-making process by
being entitled to present results of investigation
during the respective procedural hearing.
As for the AMCU’s enforcement function, our
main recommendation is to enable judicial
challenge of the amount of fine imposed by
the AMCU body, subject to existence of the
Methodology for calculating the amount of
fine for breach of competition laws, adopted in
the form of legislative act, whose application is
mandatory for both the AMCU and the bodies of
judicial power.
As for the AMCU’s authority to grant consents on concentration, it is proposed:
As for the AMCU’s function to investigate cases on abuse of monopolistic (dominant) position, it is
recommended to:
The Report continues with comprehensive analysis of the AMCU’s core operational functions
comprising investigation, decision-making and enforcement.
8. 8www.boi.org.ua
FOREWORD
1) to introduce electronic database that
would enable applicants to retrieve general
information about the current status of
consideration of requests/applications
lodged with the AMCU, which is not
confidential in nature.
2) to set maximum time limits for (a) responding
with further explanations and/or clarifications
requested by the AMCU; and (b) lodging
objections by the parties that disagree with
the AMCU’s interim procedural decisions in
cases on mergers/ concerted actions.
3) to establish specific/maximum time limits
for the AMCU’s consideration of requests on
access to the case materials lodged by the
parties; and
4) to expressly enable interested
parties to lodge requests with the AMCU
to seek initiation of hearing on
concentrations/concerted actions,
with such requests being subject to
the AMCU’s mandatory consideration
and provision of grounded answer within
reasonable time limits.
As far as access to information is concerned, the Council proposes:
In order to make the existing leniency regime
more inclusive, the Council recommends
reducing fines for parties other than the first
one to file.
1) to enable complaining bidder or any other
participant of the appeal procedure to
submit additional documents related to the
merits of the complaint; and
2) to ensure admissibility of evidence lodged
with the Ukrainian courts in the form of
electronic documents.
1) to continue enhancing awareness amongst
state and municipal authorities and business
about the substance of the forthcoming
legal framework on state aid and the general
implications stemming therefrom;
2) to maintain active dialogue with both
providers and beneficiaries of state aid to
discuss existing and contemplated policy
choices in the field;
3) to ensure availability and quality of pending
secondary legislation; and
4) to promptly start inventory of state aid
measures subject to availability of the
relevant and properly tested material base
(hardware and software).
As for the area of non-judicial challenging result of public procurements, the Council’s main
recommendations are:
Last but not least, the Report concentrates on the forthcoming legal framework on the state
aid, set to become effective in the middle of 2017. Having acknowledged the importance of effective
dialogue between public authorities and business to discuss the existing and prospective policy choices
in this field, the Council primarily recommends:
9. 9www.boi.org.ua
FOREWORD
The Report is based on extensive desk-based research and a fact-finding held
by the Council. The desk-based research covered a review of the competition
legislation, decisions of the AMCU, actions taken by other government agencies as well
as international and domestic legal texts on competition law and policy.
The analytical part of this Report is based on complaints received by the Council and
illustrated in the Report, proposals made by market participants, discussions with
leading local and international expert organizations, review of relevant literature, and
the Council’s own conclusions. The Council has also used information publicly available
on the web sites of relevant public authorities.
This Report has been prepared by
the Deputy Business Ombudsman
Mr. Iaroslav Gregirchak
the Council’s Investigators
Ms. Tetyana Kheruvimova,
Mr. Volodymyr Kutsenko
Junior Investigator
Mr. Andrii Chornous
under the supervision of
the Business Ombudsman
Mr. Algirdas Šemeta
While working on the Report
the Council received valuable
assistance from the Anti-
Monopoly Commiittee of
Ukraine, the Delegation
of the European Union to
Ukraine and the EU Twinning
project "Strengthening
Institutional Capacity of the
AMCU to conduct market
studies and effectively
enforce competition law
in accordance with EU
standards".
10. 10www.boi.org.ua
CHALLENGES AND PROBLEMS
CHALLENGES AND PROBLEMS2
Within last years Ukraine has made considerable
efforts aimed at bringing its’ competition law
in accordance with the best international
standards in the field. Much, however, remains
to be done to ensure country’s compliance
with its’ obligations under the DCFTA7
.
Moreover, as the AMCU’s ability to perform its’
regulatory tasks is dependent upon existence
of efficient institutional structure supported by
sufficient financing and operational resources,
competition policy cannot succeed only by
aligning national legislation with international
standards. Legislative achievements may,
therefore, be compromised by a slow pace
of the AMCU’s institutional transformation.
As pointed out in a relevant international
publication:
“The comparison of Ukraine’s competition law with international best practices demonstrates that
Ukraine’s statutory framework does not require drastic changes. However, much remains to be done
in order to create the preconditions for the modernisation of the AMCU into a truly independent and
powerful competition authority that would not only punish infringements or control prices, but would
also help to establish an effective competitive environment and ensure competition in markets in
Ukraine.”8
2.1. Institutional capacity of the AMCU
The Problem
7
See, in particular, Chapter 10 (Competition) of Title IV of the EU-Ukraine Association Agreement.
8
See, in particular, para. 88 of the UNCTAD Voluntary Peer Review of the Competition Law and Policy of Ukraine in 2013
(UNCTAD//CLP/2013/3 (OVERVIEW) available at http://unctad.org/en/PublicationsLibrary/ditcclp2013d3_overview_en.pdf.
The following summarizes the Council’s understanding of the scope of this challenge followed by the
respective recommendations.
11. 11www.boi.org.ua
CHALLENGES AND PROBLEMS
Indeed, to create a strong competitive
environment in Ukraine, the AMCU should
act in adherence with a comprehensive
strategy for the development of
competition. Although the AMCU annually
issues lengthy summary reports9
, it is effectively
unclear how the priorities of its’ activities are set
for each forthcoming year. In the Council’s view,
however, adoption of an annual plan, setting
forth such strategical priorities, would improve
the overall awareness and predictability as well
as help business to understand which markets
will be studied in the coming year. As pointed
out in the authoritative source on this matter:
Efficient institutional structure, supported
by sufficient operational resources, is
also essential precondition for the AMCU’s
ability to ensure successful implementation
of competition reform in a short time. Even
though the AMCU is becoming more visible
as pro-competition agency, it appears that its’
operational capacities remain to be scarce.
Hence, to properly utilize existing resources, it
appears that the manner in which the AMCU
exercises its’ authority should be primarily
focused on investigation of the most serious
infringements and anti-competitive practices as
well as the most risky mergers.
The Council observes that such an approach
has recently been employed once with the
recent increase of concentration thresholds11
.
Nonetheless, it ought to be followed by
further legislative and institutional changes,
to be supported by reallocation of existing
professional resources to ensure that the
former has actually became a continuous trend.
The Council is also aware of selected instances
when, due to the lack of adequate data storage
capacities, the AMCU’s staff is prompted to
perform hand-operated searches to retrieve
information sought, for instance, by former
applicants. Thus, such applicants might have
been provided with the requested information
in somewhat untimely manner. Largely this
is caused by the fact that the AMCU would
benefit from both sufficient number of staff and
existence of internal unified storage system.
It is well-known that a modern competition
agency must do more than just simply
enforce competition laws. Accordingly, strong
competition advocacy (i.e. elaboration and
implementation of state competition policy)
should become one of the key functions for the
“The competition authorities can give publicity to their priority setting in different ways. Some
authorities publish their overall policy or general strategic planning for the next year(s) in which
they highlight the competition areas on which they intend to focus their activities in the near future.
Authorities may also opt to give publicity to more targeted priorities in order to give a signal to certain
market actors and to induce compliance with competition rules.”10
9
See, for instance, the Reports for 2014 and 2015 available at http://www.amc.gov.ua/amku/doccatalog/
document?id=110270&schema=main and http://www.amc.gov.ua/amku/doccatalog/document?id=122547&schema=main
accordingly.
10
See ECN Recommendation on the Power to Set Priorities at page 4, available at http://ec.europa.eu/competition/ecn/
documents.html.
11
As of 18 May 2016 the Law of Ukraine “On Protection of Economic Competition”, No. 2210-III, dated 11 January 2001, as
amended (hereinafter – the “Economic Competition Law”) has been amended to introduce new (increased) turnover/total
assets’ volume thresholds determining the need to seek receipt of the concentration consent from the AMCU.
12. 12www.boi.org.ua
CHALLENGES AND PROBLEMS
AMCU as it aspires to both attain competition
policy objectives and ensure better law
enforcement12
.
Areas calling for competition advocacy are
numerous and the respective efforts may take
different forms13
.In particular, the AMCU, while
preventing occurrence of anti-competitive
practices, should perform and publicize reviews
of both effective and perspective legislation,
including review of existing restraints on
competition. Other efforts include outreach
activities to enhance the overall level of
awareness of business. Needless to say, such
steps are particularly important as the AMCU
plays a vital role in the context of ongoing
privatization and liberalization of state owned/
regulated markets.
Moreover, the AMCU should use market studies
as an instrument of competition advocacy
aimed at bringing the attention of the business
to the structure and business practices at the
relevant market 14
.The Council supports the
view that stakeholder involvement can help
identify urgent issues and avoid serious errors
or misinterpretations of evidentiary base near
the completion of market studies15
.Hence,
if the AMCU were to publish information on
competition areas on which its’ activities wil be
focused in the near future, it would enable its’
market study team to solicit stakeholder input16
.
To make sure that the AMCU’s existing
institutional capacity is properly utulized, the
Council recommends as follows:
1) To make sure that the AMCU’s e that annual
plans, prepared by the AMCU, clearly
specify (i) the main priority areas of the
AMCU’s activities for the forthcoming year;
and, where relevant, (ii) markets that will
be subjected to comprehensive studies. It
is thought that, if employed, such practice
would enhance the AMCU’s credibility as the
national competition authority and would
facilitate involvement of wider array of
stakeholders into cooperation process.
2) To adopt legislative amendments aimed at
unleashing the AMCU’s existing institutional
capacity.
It is thought that such amendments would
strengthen the AMCU’s ability to use well-
balanced and effective law enforcement tools
The Council’s Recommendations
12
See the UNCTAD Voluntary Peer Review of the Competition Law and Policy of Ukraine in 2013 (UNCTAD//CLP/2013/3
13
See, in particular, OECD Publication “Competition Advocacy: Challenges for Developing Countries” (2004), at page 3 available
at http://www.oecd.org/daf/competition/prosecutionandlawenforcement/32033710.pdf.
14
See TWINNING PROJECT FICHE “Strengthening institutional capacities of the Antimonopoly Committee of Ukraine to conduct
market studies and effectively enforce competition law in accordance with EU standards”, at page 11 available at http://www.
bmwi.de/Dateien/BMWi/PDF/Twinning/twinning-project-fiche-strengthening-institutional-capacities-of-the-antimonopoly-
committee-of-ukraine.
15
See OECD Market Studies (DAF/COMP(2008)34) (2008), at page 66 available at http://www.oecd.org/regreform/
sectors/41721965.pdf.
16
See MARKET STUDIES GOOD PRACTICE HANDBOOK, prepared by ICN ADVOCACY WORKING GROUP (Revised handbook
presented at the 15th Annual Conference of the ICN, Singapore, April 2016), at page 9 available at http://www.
internationalcompetitionnetwork.org/uploads/library/doc907.pdf.
13. 13www.boi.org.ua
THE AMCU’S CO-OPERATION
WITH OTHER STATE AUTHORITIES
to be employed with the focus at the most
serious infringements of the competition
law, control of concentrations (or other
market deficiencies and/or trade-distorting
practices17
) that substantially restrict
competition.
3) The AMCU’s advocacy activities has to be
broadened by (i) strengthening cooperation
with other government bodies; and
(ii) improving existing practice of issuing
practical recommendations based on the
prior market studies performed by the
AMCU.
17
To the extent it relates to Ukraine’s obligations under the DCFTA.
18
This statement do not extend to issues related to cooperation with law enforcement bodies and courts that are part of
continuing reforms intended to establish a modern judicial and law enforcement system.
19
See in Ukrainian at http://www.kmu.gov.ua/control/publish/article?art_id=246616724.
20
See in Ukrainian at http://www.amc.gov.ua/amku/doccatalog/document?id=130142&schema=main.
Lack of coordination and interaction
between the AMCU and the state bodies vested
with authorities directly or impliedly affecting
state of competition in the country (such as
sectoral regulators, the Ministry of Economic
Development and Trade of Ukraine, etc.),
including, inter alia, deficit of information
exchange is known to be a long-standing
problem18
.
The Council observes that the main
constraint for intensifying such cooperation is
the absence of officially adopted strategic
plan for the reform and development
of competition. While the latter is being
elaborated under the framework of the NCDP
Concept for 2014–2024, the NCDP itself was
adopted by the Cabinet of Ministers of Ukraine
(hereinafter – the “CMU”) but has not yet been
lodged with the Verkhovna Rada19
. Therefore, it
is hoped that, once adopted, this programme
would streamline the ongoing efforts focused
at achieving strategic objectives of competition
reform in Ukraine.
The Council also faced instances when certain
state bodies were reluctant to assert
the authority by attempting to shift the
responsibility to other bodies. Yet, in order
to develop pro-competition environment, not
only the AMCU but also other state authorities
shall be actively involved. In particular, to attain
common goals, sectoral ministries should
help with establishing conditions for effective
competition in the industries also falling within
the scope of the AMCU’s general competence.
Among other things, this can be achieved by
coordinating their decision-making process with
the AMCU based on an effective exchange of the
respective information.
For instance, the AMCU recently signed the
Memorandum with the National Commission
for State Regulation in the Energy and Utilities
(hereinafter - the “NCSRE”)20
. This document
is aimed at demonstrating joint institutional
vision and intention of the signatories to build a
pro-competition environment at the Ukrainian
energy market. Hence, in addition to what falls
2.2. The AMCU’s co-operation with other state authorities
The Problem
14. 14www.boi.org.ua
under the prerogative of primary legislation21
, it
appears that the practice of the AMCU entering
into partnership memorandum is worth being
expanded to other key regulators and/or state
bodies.
The Council also observed that, due to the
lack of effective institutional cooperation,
the business might be suffering from certain
specific problems while participating in
the process of privatization. In particular, some
businesses allege that the State Property Fund
of Ukraine (hereinafter – the “SPF”) might
provide inaccurate or incomplete information
about the potential target. Recently amended
Procedure of Notifying the AMCU for Prior
Approval of Concentration of Undertakings
states that each party is liable for accuracy of
information such party has prepared22
. Yet, it is
worrysome that if the SPF were to refuse signing
the application together with potential bidders,
the direct applicant (i.e., potential buyers) could
be held liable for accuracy and sufficiency
of information. This point is crucial, as, from
the formal standpoint, it is a bidder/potential
buyer rather than the SPF (especially when the
respective antitrust clearance application lacks
latter’s signature) that bears responsibility for
the accuracy of information submitted with the
AMCU23
.
Last but not least, there is a problem with
ensuring necessary level of uniform
interpretation of applicable legislation
by the different authorities involved. Indeed,
some complaints lodged with the Council depict
situations when businesses were suffering from
negative implications caused by conflicting
and/or ambiguous interpretation of applicable
legislation. Although the AMCU might not deny
the existence of the problem (provided that
supremacy of competition law is observed),
the practical attempts to solve it has been
quite sporadic and lack systemic approach.
As such, respective improvements have so far
been triggered primarily by the conditionalities
foreseen, among others, in the DCFTA and the
Energy Charter Treaty.
These problems can be illustrated by the
following cases from the Council’s practice:
21
Pursuant to Article 20 of Law of Ukraine “On the Antimonopoly Committee of Ukraine”, No. 3659-XII, dated 26 November
1993, as amended (hereinafter – the “AMCU Law”) the AMCU and its’ territorial offices shall cooperate with the bodies of
state power, bodies of local self-governance and bodies of administrative and commercial management in the areas of
development of competition and demonopolization of the economy.
22
See Item 18 of the Chapter X of AMCU Resolution “On Procedure for Notification of the Antimonopoly Committee of Ukraine
for Prior Approval of Concentration of Undertakings” No. 33-p, dated 19 February 2002 (hereinafter – the “Procedure of
Notifying the AMCU for Prior Approval of Concentration of Undertakings”).
23
Article 50 Items 14 and 15 of the Competition Protection Law specifies the type of infringement; while Article 52, para 1 states
that the AMCU can impose fine on economic entities but not on other state authorities.
THE AMCU’S CO-OPERATION
WITH OTHER STATE AUTHORITIES
15. 15www.boi.org.ua
The Council received a complaint from a
commercial bank (the “Complainant”)
challenging abuse of the AMCU’s right to request
certain information to prove infringements
of public procurement legislation allegedly
committed by the Complainant’s clients. In
course of investigation, the AMCU requested
the Complainant to disclose information not
only about its’ clients (in particular, date of
transaction, debit/credit amount of funds, ID
number, details on the counterparty, purpose
of payment, etc.) but also about third party
contractual partners of the Complainant’s
clients.
Pursuant to competition law, the AMCU is
unconditionally entitled to request unlimited
scope of information24
. Banking legislation
also contains general rule that information on
legal entities and individuals, which constitutes
banking secrecy, shall be disclosed by banks
to the AMCU25
. However, as far as disclosure
of information on third parties is concerned,
provisions governing banking secrecy contain
special rule, that such a disclosure is subject
to the valid court ruling or consent of such a
third-party26
. As the latter requirement was not
met, the bank limited the scope of information it
disclosed to the AMCU.27
The Complainant‘s approach is evidently
affirmed by the National Bank of Ukraine
(hereinafter – the “NBU”) claiming that
information about third party clients of other
banks can be disclosed subject to a court
decision or a consent of such third parties.
Otherwise, the Complainant could have been
subjected to penalties for breach of banking
secrecy legislation.
On the other hand, the AMCU maintains that
its’ activity should be governed exclusively by
competition legislation28
. As a result, as the
fine for submission of incomplete information
was eventually imposed by the AMCU,
the ambiguity between competition and
banking secrecy legislation was, de facto,
interpreted against the Complainant.
In these circumstances, as the AMCU apparently
does not have specific methodology for
administering banking secreacy information, the
Complainant is concerned that such information
might inadvertently end up in the hands of
its’ competitors (or other third parties) or
otherwise trigger negative implications for the
Complainant’s own clients.
CASE No. 1. Lack of Consistent Interpretation of Legislation
24
See Article 22-1 of the Law of Ukraine “On Antimonopoly Committee of Ukraine”, No. 3659-XII, dated 26 November 1993, as
amended (hereinafter – the “AMCU Law”).
25
See Article 62, para 1, item 3 of Law of Ukraine “On Banks and Banking Activity”, No. 2121-III, dated 7 December 2000, as
amended (hereinafter – the “Banking Law”).
26
See Article 62, para 1 of the Banking Law.
27
See Article 62, para. 4 of the Banking Law.
28
According to Article 19 of the AMCU Law “in the course of consideration of applications and cases of coordinated actions
and concentration, violation of the legislation on protection of economic competition…making orders and decisions under
the applications and cases, as well as exercise of other powers in the field of control over observance of the legislation
on protection of economic competition and control over the coordinated actions and concentration the AMCU … shall be
governed only by the legislation on protection of economic competition.”
THE AMCU’S CO-OPERATION
WITH OTHER STATE AUTHORITIES
16. 16www.boi.org.ua
The complainant challenges inactivity of the
NCSRE, the SPF and the AMCU. In particular,
the complainant challenged alleged failure to
assign status of the natural monopoly to several
legal entities (hereinafter – the “Potential
Monopolists”). The complainant applied to
the AMCU to include the Potential Monopolists
into the Consolidated Natural Monopolies
List, arguing that they are the only companies
providing certain transportation services and
in the past they used to be included into the
consolidated list for a long time.
The AMCU informed the Council that since
1994 the AMCU administers the List of Entities
Occupying Monopolistic Market Position
(subsequently - the List of Subjects of Natural
monopolies)29
.
At the same time, since January 2013 the
AMCU is no longer vested with the authority
to exclude or include certain entities to/from
registers of the subjects of natural monopolies.
This function was transferred to the NCSRE;
and in the other spheres where subjects of
natural monopolies operate – to the national
commissions for regulation of the respective
natural monopolies30
. Accordingly, as the
Potential Monopolists provided transportation
services in question, such function should haven
been fulfilled by either NCSRE or the Ministry
of Infrastructure of Ukraine. However, it is not
directly foreseen in the law.
Having investigated the matter, the Council
recommended ensuring proper state regulation
of the activity of the respective subjects of
natural monopolies in compliance with the
principles of such regulation and tasks vested
with the national commissions for regulation of
natural monopolies.
Besides, should such necessity arise, the Council
recommended drafting amendments to the
Law of Ukraine “On Natural Monopolies” to
ensure proper (i.e., more precise) definition
and regulation of the transportation services in
question.
CASE No. 2. Lack of Interaction between the AMCU
and the Sectoral Regulators
29
According to Article 4 of the Law of Ukraine “On Natural Monopolies”, No.1682, dated 20 April 2000, as amended
(hereinafter – the “Natural Monopolies’ Law”) state regulation of the subjects of natural monopolies activity in the spheres set
forth in Article 5 of the Law, shall be carried out by the national commissions for regulation of natural monopolies, which are
created and operating according to the Law. State control over compliance with legislation on the protection of economic
competition in the spheres of natural monopolies shall be carried out by the AMCU according to its’ authority. According
to Article 5, para. 1 of the Natural Monopolies’ Law, activity in the sphere of transportation of other substances by pipeline
transport, including transit, shall be regarded as the area of activity of natural monopolies, controlled and regulated by the
state.
30
According to Article 5, para. 2 of the Natural Monopolies’ Law, consolidated list of the subjects of natural monopolies is
conducted by the AMCU under the registers of the subjects of natural monopolies in the sphere of housing and utilities
services, formed by the national commission for regulation of public utilities and in the other spheres where the subjects of
natural monopolies act – by national commissions for regulation of natural monopolies in relevant sphere or by the executive
authorities performing the function of such regulation before the creation of the commissions.
THE AMCU’S CO-OPERATION
WITH OTHER STATE AUTHORITIES
17. 17www.boi.org.ua
Based on the foregoing, the Council
recommends as follows:
1) To develop a roadmap aimed at
implementing the NCDP Concept for
2014–2024 by the ministries and other state
bodies. To attain this goal, the adjusted NCDP
shall be adopted by the Verkhovna Rada to
ensure that the governmental decisions are
consistent with the State competition policy.
2) To accelerate working relations between the
AMCU and the state authorities (with the
focus on sectoral regulators) by expanding
the practice of entering into respective
cooperation agreements/memorandums on
competition-related issues.
3) In order to facilitate effective exercise of
powers vested with the AMCU in connection
with anti-trust clearance of privatization
transactions, ensure that not only the AMCU
itself but also other authorities should
play active role in eliminating some of the
existing impediments. Hence, the Council
recommends as follows:
a) To specify the exact scope of duties to be
borne by each institution involved into
privatisation process (for instance, the SPF,
sectoral regulators, etc.).
b) To introduce transparent procedure for the
exchange of information between the AMCU
and the relevant bodies (including the SPF,
the regulators managing the state enterprise,
bidders, etc.) for the purpose of the AMCU’s
transaction clearance. If such an approach
were to be employed (for instance, between
the AMCU and the SPF), this would help
addressing allegation of the business that the
SPF might provide inaccurate or incomplete
information about the potential target.
The Council’s Recommendations
THE AMCU’S CO-OPERATION
WITH OTHER STATE AUTHORITIES
18. 18www.boi.org.ua
As national competition authority, the
AMCU’s core operational functions comprise
investigation, decision-making and enforcement.
To ensure fulfillment of these fuctions the
AMCU is vested with rather broad discretionary
powers.
Such broad discretion is particularly descriptive
of the AMCU’s authority to consider applications
and cases on breach of competition laws,
carry out investigations thereunder, consider
applications and cases on granting consents,
issue conclusions (or preliminary conclusions)
regarding concerted actions, concentration,
carry out respective studies pursuant to such
applications and cases, etc.31
Hence, the following comprises analysis of
certain problem faced by business due to the
manner, in which the AMCU exercises its’ broad
procedural powers at the following operational
phases: (i) consideration of applications
lodged to receive concentration consents; (ii)
consideration (investigation) of applications
and cases on abuse of monopolistic (dominant)
position; (iii) AMCU’s internal decision-making
procedure; as well as (iv) AMCU’s exercise of its’
enforcement authority.
2.3. The AMCU’s Administrative and Procedural Discretion
The Problem
The recent simplification of the procedure
for lodging applications to receive permit on
concentration was welcomed by business.
Pursuant to the new rules, the scope of
documents and information to be lodged by
applicants has been considerably shortened32
.
Nonetheless, the Council suggests addressing
selected important issues, namely (i) receipt
of consent on concerted actions due to the
execution of the non-competition agreement;
and (ii) indetification of undertakings that
shall be held liable for failure to inform about
concentration.
2.3.1. Consideration of applications lodged
to receive concentration consents
The Problem
31
See Article 7 of the AMCU Law.
32
See amendments to the Procedure of Notifying the AMCU for Prior Approval of Concentration of Undertakings that became
effective on 19 August 2016. The amendments were introduced under Competition Protection Law dated 26 January 2016.
The Law not only increased the thresholds but also introduced both the simplified procedure of lodging the applications and
opportunity to hold preliminary consultations with the AMCU.
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
19. 19www.boi.org.ua
Pursuant to recent legislative changes,
undertakings are entitled to lodge an application
with the AMCU seeking receipt of concentration
consent by employing simplified procedure33
.
Hence, the undertakings are released from
the need to collect substantial quantity of
documents. It is worth noting, however, that
the procedure for receipt of consent in case
of concerted actions, in its’ turn, is far more
complex and lengthier than the procedure to
be followed while seeking receipt of consent on
concentration.
Nonetheless, in course of concentration
undertakings are sometimes employing such
concerted actions mechanism as a so-called
“non-competition agreement”. The execution
of such an agreement is subject to the AMCU’s
prior approval if it is aimed at coordinating
competition behavior between the undertakings
(i.e., signatories to such an agreement)34
. Hence,
it is not uncommon that concentration may, in
practice, require receipt of two simultaneous
permits.
Currently Ukrainian legislation do not foresee
any special simplified procedure for receipt of
consent in case of concerted actions within the
framework of transaction whereby consent on
concentration is being (or has already been)
received. As such, the parties to the non-
competition agreement are nonetheless forced
to prove the substance of positive social effect
stemming from their decision not to compete
(effectively comprising the substance of the
concerted actions), which, in itself, is rather
complex task.
Hence, to properly proceed with the anti-trust
clearance of such transaction, the businesses
are anyway forced to collect the complete set
of documentation35
. To address this problem,
it is worth consider amending competition
laws by providing that applications lodged to
receive consents in case of concerted actions,
which is being filed together with applications
on concentration within the framework of a one
single transaction, shall be considered on the
basis of a short list of documents, provided that
the simplified procedure for receipt of consent
on concentration is already employed.
In the Council’s view, such an approach
corresponds to one of the basis EU principles
on control over economic concentrations,
stating that a decision declaring a concentration
compatible shall be deemed as extending
to other restrictions that may relate to the
particular concentration and are necessary for
its’ implementation36
.
a) Non-competition agreements
33
Chapter VII Item 2 of the Procedure of Notifying the AMCU for Approval of Concerted Practices of Undertakings.
34
See AMCU Resolution “On the Procedure for Filing Applications with the AMC for Obtaining its Approval of Concerted
Practices of Undertakings” No. 27-р., dated 12 February 2002, as amended (hereinafter – the “Procedure of Notifying the
AMCU for Approval of Concerted Practices of Undertakings”).
35
See item 6.10.6. of the Procedure of Notifying the AMCU for Approval of Concerted Practices of Undertakings.
36
See Article 8 Council Regulation (EC) No.139/2004, dated 20 January 2004, available at http://eur-lex.europa.eu/LexUriServ/
LexUriServ.do?uri=OJ:L:2004:024:0001:0022:en:PDF.
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
20. 20www.boi.org.ua
Under the general rule, committing
concentration without securing the AMCU’s prior
approval (provided that receipt of such approval
is required) constitutes breach of competition
laws37
.
However, even though legislation stipulates,
generally, that undertakings could be penalized
for such an ommission, it does not specify
whether liability shall be borne by all or selected
participants of concentration38
. Yet, having
analyzed certain provisions of the Competition
Protection Law39
, it appears that it is actually the
undertaking that is acquiring control/purchases
controlling stake (rather than other participants
of concentration) that would, most likely, be
held liable for its’ failure to notify the AMCU
accordingly.
Nonetheless, the legislation lacks provision,
which would expressly identify the party,
which should be held liable for committing
concentration without securing AMCU’s prior
consent, if the latter is required by law.
Therefore, in the Council’s view, to avoid
conflicting interpretations and abuses, the issue
of liability shall be clearly and unequivivocally
addressed in the legislation by clearly specifying
participants of concentration that shall be held
liable for breach of competition laws.
b) Liability for concentration committed without
AMCU’s prior approval
37
See Article 50, para. 1, item 12 of the Competition Protection Law.
38
Ibid, Article 51.
39
Ibid, Articles 23 and 26.
1) To amend the Procedure of Notifying the
AMCU for Prior Approval of Concentration of
Undertakings to ensure that consideration
of consent on concerted actions due to
execution of non-competition agreement
is conducted on the basis of simplified
procedure, provided that receipt of
concentration consent is already carried out
on the basis of simplified procedure. Among
other things, it would allow narrowing down
the scope of information necessary for the
AMCU to conduct impact analysis in such a
scenario.
2) To amend Article 52, para. 2, part 2 of the
Competition Protection Law to ensure clear
identification of parties liable for failure to
notify about concentration. It would allow
determining party responsible for committing
concentration without seeking the AMCU’s
prior consent, provided that the latter is
necessary.
Council’s Recommendations
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
21. 21www.boi.org.ua
One of administrative procedures in the sphere
of protection of economic competition is
the procedure for determining monopolistic
(dominant) market position of an undertaking.
Its’ exercise might trigger supervision of an
activity of such an undertaking-monopolist at
the respective market of goods, works and
services.
Although monopolistic (dominant) position, as
such, is not prohibited in Ukraine, pursuant
to the general rule, abuse of such position
constitutes breach of competition laws and
is prohibited regardless object, grounds or
consequences40
.
Even though the AMCU is vested with sufficient
discretionary powers, the Council notes
that consideration of cases on abuse of
monopolistic (dominant) position might
last several months or even years41
.
2.3.2. Consideration (investigation) of applications and cases
on abuse of monopolistic (dominant) position
The Problem
40
See, generally, Chapter II of the Competition Protection Law.
41
For instance, Decision of Administrative Panel No.24, dated 15 July 2016 in the Case No. 02-06/07-2015 on breach of
competition laws and imposition of penalty was rendered following consideration of application dated 19 May 2014. See, in
more details at http://www.amc.gov.ua/amku/doccatalog/document?id=82553&schema=sum.
As at the date of this Report, the Council
was investigating complaint challenging
inactivity of employees of Poltava Oblast
Territorial Division of the AMCU (hereinafter -
the “Oblast Division”). In particular, the
Complainant argued that the Oblast Division
was providing formal responses in response to
it’s numerous requests to address violations
of economic competition at the part of the
PJSC “Poltavaoblenergo”, comprising abuse of
monopolistic market position by establishing the
amount of fee for use of networks to adjust joint
hanging.
Following consideration of numerous petitions
lodged by the Complainant, on 2 September
2016 the AMCU launched case
No. 01-02-50/46-2016 regarding breach
of competition laws at the part of PJSC
“Poltavaoblenergo”. The case was launched
following numerous requests lodged by the
complainant with the AMCU since March 2016.
To avoid groundless delays with consideration of
this case and ensure its’ efficient consideration,
the Council is monitoring development of this
case.
CASE No. 3. Abuse of Dominant Position by a Natural Monopoly
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
22. 22www.boi.org.ua
As a rule, cases on possible abuse of
monopolistic (dominant) position are rather
complex and, hence, often require complex
economic studies42
. Yet, in the Council’s view,
the AMCU shall, where it is objectively feasible,
aspire narrowing the overall length of time
spend while conducting such studies and
adopting final decision on existence of breach of
competition laws and, eventually, imposition of
penalties.
As for the relevant international practice, the
Council observed that while the laws in some
jurisdictions do not foresee any time limit for
the proceedings, in others the overall duration is
set while, in a small number of jurisdictions, the
specific time limits for the different steps of the
procedure are fixed. In some jurisdictions, there
are specific time limits for certain periods of the
procedures, which are fixed by the competition
laws or an internal rule43
.
As for Ukraine, the need to ensure prompt
exercise of the AMCU’s authority is also
proved by cases іn the Council’s consideration,
when undertaking, occupying monopolistic
(dominant) market position, while being aware
of an existence of complaint lodged against it,
was attempting to threaten the applicant. As
a result, the latter may be forced to withdraw
its’ application, which may subsequently be
perceived by the AMCU as a sufficient ground to
stop consideration of a case.
One of the possible ways to improve the
situation could be to enhance transparency
of each stage when the case on abuse of
monopolistic (dominant) position is being
considered (investigated). This could be
achieved, for instance, by introducing the
practice of publishing resolutions on launching
the case – i.e., to the extent they fall under the
category of a so-called “act of application of
law”44
.
42
For instance, the Methodology for Determining Monopolistic (Dominant) Market Position of Undertakings in the Market,
approved by the Resolution of the AMCU, No.49-р, dated 5 March 2002 (hereinafter – the “Monopolistic Market Position
Methodology”) sets forth broad scope of issues that are subject for studies (for instance, determining objects for analysis
aimed at ascertaining monopolistic (dominant) position; preparation of the list of goods (works, services) in whose respect
a given undertaking’s monopolistic (dominant) position is to be ascertained; calculation of market share occupied by an
undertaking, etc.
43
See, for instance, Greece, Spain, Lithuania and the Netherlands. In particular, in Spain, the competition authority has 12
months from the formal opening of the procedure until the submission to the Council of the proposed decision. The
Council then has 6 additional months to adopt the final decision, the maximum length being therefore of 18 months
after the notification of the starting of procedures to the parties. In Lithuania, the competition authority has 5 months for
investigations, which are extendable each time it is deemed necessary by 3 months. In practice, cases take an average of
17-19 months. In Poland, the competition authority has 30 days (60 days in complex cases) for carrying out explanatory
proceedings and 5 months for antimonopoly proceedings. These deadlines may be extended (e.g., where the competition
authority requires more time to gather information from undertakings). In Latvia and Slovenia, there is a general period of 2
years for the adoption of a decision. See Decision-Making Powers Report by ECN WORKING GROUP COOPERATION ISSUES
AND DUE PROCESS (2012), at page 57 available at http://ec.europa.eu/competition/ecn/decision_making_powers_report_
en.pdf.
44
At present, pursuant to the Monopolistic Market Position Methodology, only decisions in particular cases are due to published
in paper media or disseminated in an electronic form.
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
23. 23www.boi.org.ua
To facilitate efficient protection of businesses
suffering from abuses committed by
undertakings occupying monopolistic (dominant)
market position, the Council recommends as
follows:
1) To set clear deadlines for consideration
(investigation) of cases on abuse of
monopolistic (dominant) market position
by introducing respective amendments
into Chapter VII of the Competition
Protection Law and/or Chapter VII of the
Rules of Consideration of Applications
and Cases on Violation of Legislation on
Economic Competition, approved by the
Resolution of the AMCU No. 5, dated
19 April 1994 (hereinafter – the “Rules
of Consideration of Applications on
Violation of Competition Legislation”).
2) To expressly provide that if an applicant were
to withdraw its’ application in a case on abuse
of monopolistic (dominant) position, this shall
not constitute the substantial ground for the
AMCU to exercise its’ procedural discretion
to terminate consideration of a case. Hence,
the respective amendments are proposed to
be introduced to the Rules of Consideration
of Applications on Violation of Competition
Legislation. In the Council’s view, it should
allow minimizing the risk of possible pressure
inflicted on an applicant by an undertakings
occupying monopolistic (dominant) market
position in whose relation the respective case
has been launched.
The Council’s Recommendations
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
24. 24www.boi.org.ua
To the extent issues pertaining to the AMCU’s
investigatory function has already been
discussed above (please see Section 2.3.2), the
following concentrates on selected aspects of
the AMCU’s internal decision-making design45
,
which has drawn particular attention lately as,
among other things, the AMCU’s authority has
been broadened to include state aid46
.
While investigation is carried out by a respective
professional team headed by the AMCU
Commissioner in charge of the particular field,
the decision-making function is exercised by
the AMCU Board of Commissioners, which, as a
collegial body, renders decisions by conducting
periodic meetings47
.
Some commentators criticize selected elements
of the foregoing model. In particular, it is argued
that the appearance of bias might be stemming
from the fact that the AMCU Commissioner,
who was responsible for investigation, might be
attempting to influence the substance of the
final decision on the case48
.
The Council is thus inclined to support elements
attributable to a so-called “non-unitary”
approach, when investigative and decision-
making activities are separated functionally,
although they are handled by one single
administrative institution. The investigation is
normally carried out by investigation services
and the final decision is adopted by a board of
this administrative institution.
In this regard, it appears that the collegial
nature of decision-making process at the
AMCU Board of Commissioners is well-suited to
ensure objective examination of evidence and
qualification of possible breaches. Besides, to
the extent investigative and decision-making
functions are split between different AMCU’s
divisions, it decreases the risk that, having
exhausted its’ investigatory resources, the AMCU
would be inclined to conclude that the breach
has indeed occurred to justify such expenses
incurred49
.
Nonetheless, the design of the foregoing “non-
unitary” structure merits further improvement.
2.3.3. The AMCU’s internal decision-making procedure
The Problem
45
There are three basic institutional models: (i) the monist administrative model (where a single administrative authority
investigates cases and takes enforcement decisions), (ii) the dualist administrative model (where investigation and decision-
making are divided between two bodies) and (iii) the judicial model (where the competition authority investigates the case
and the court adopts the decision). For more details, see Decision-Making Powers Report, dated 31 October 2012, issued by
ECN Working Group Cooperation Issues and Due Process available at http://ec.europa.eu/competition/ecn/decision_making_
powers_report_en.pdf.
46
See Article 8 of the Law of Ukraine “On State Aid”, No. 1555-VII, dated 1 June 2014 (hereinafter – the “State Aid Law”).
47
See Article 121
of Competition Protection Law.
48
We note, generally, that pursuant to such alternative approach authorities of the AMCU are likely to be limited only to
investigatory function, so that decision-making function to adjudicate violations of competition legislation is vested with
judiciary only. Under such scenario, the competition authority acts as a prosecutor, bringing the cases before a court, which
has the decision-making and/or fining powers.
49
The risk of confirmation bias whereby an authority having invested a large amount of resources to bring a case against a firm or
a set of firms has a natural tendency to legitimize its past efforts by finding the investigated firms in violation of the competition
law. For more details, please see Frederic Jenny “The institutional design of Competition Authorities: Debates and Trends” (2016),
at pages 23-24 available at https://polcms.secure.europarl.europa.eu/cmsdata/upload/e557fdce-07bc-44f5-8a8d-8cad9081803b/
Frederic%20Jenny%20The%20institutional%20design%20of%20Competition%20Authorities.pdf.
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
25. 25www.boi.org.ua
In particular, the Council is mindful that
the AMCU Commissioners, who have not
participated in the investigation, may not know
or understand the implications and/or results
stemming from prior investigatory actions.
Indeed, even if such decision-makers read the
investigatory file, they may not necessarily have
as intimate knowledge or understanding of the
case as those who might have spent months
meticulously investigating it.
Hence, in the Council’s view, it is not advisable to
completely shield the AMCU Commissioner who
was responsible for investigation of a particular
case from participation in the decision-making
phase.
Accordingly, the Council supports the approach
to organization of the AMCU’s internal decision-
making procedure (evidently advocated
by respectable segments of professional
public)50
, whereby all decisions are to be
jointly taken by all members of the AMCU
Board of Commissioners, save for the AMCU
Commissioner investigating the case who, while
being ineligible to vote, shall nonetheless be
entitled to report the outcomes of the case at
the respective hearing.
50
See in more details http://uba.ua/documents/Draft_Law_re_Due_Process_1.pdf and http://uba.ua/documents/UBA_The_
Institutional_Design_of_AMC.pdf.
51
For instance, the Competition Protection Law, the Natural Monopolies Law.
1) To adjust the AMCU’s internal decision-
making procedure to ensure that when
rendering an initial decision on its’ merits
falls under the authority of the AMCU’s
Board of Commissioners, the adoption of
such a decision shall require majority of the
AMCU’s composition established by law (i.e.,
5 persons), save for the Commissioner who
investigated the case. The latter, nonetheless,
should remain to be involved into decision-
making process by being entitled to present
results of investigation during the respective
procedural hearing.
It appears that the foregoing effect can
be achieved by (i) amending Article 121 of
the AMCU Law to incorporate thereunder
approach that is already employed in
para. 12 of the same Article while setting
forth the rules for the revision of previously
adopted decisions; as well as by (ii) amending
primary51
and AMCU’s secondary legislation
accordingly.
The Council’s Recommendation
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
26. 26www.boi.org.ua
Although within last two years the AMCU has
implemented several positive initiatives aimed
at facilitating compliance with competition laws,
the following briefly summarizes key issues that,
in the Council’s view, still merit attention.
Lack of methodology for determining amount of
fine in the form of binding legislative instrument,
is the traditional object of criticism in the
sphere of enforcement of competition laws in
Ukraine. For instance, one of the recent OECD
publications pointed out that the absence of
such methodology triggers risks of corruption52
.
At the same time, it is thought that existence of
such methodology would ensure transparency
and predictability of law enforcement53
, assist
with achieving necessary level of legal clarity54
and perform the function of special and general
prevention.
In this regard, the EU-Ukraine Association
Agreement foresees the obligation of
competition authority to approve and publish
the document explaining principles for
calculation of fines imposed for breach of
competition laws55
.
In September 2015, the AMCU for the first
time explained approaches employed for
determining amount of fines imposed for
the breach of competition laws, by adopting
respective recommended explanations,
which, however, have not acquired the status
of a binding legislative act (hereinafter – the
“Recommended Explanations”)56
.
2.3.4. The AMCU’s enforcement authority
a) Methodology for determining amount of fines
The Problem
52
See Report “On Anti-Corruption Reforms in Ukraine. Round 3 Monitoring of the Istanbul Anti-Corruption Action Plan”, page
182, adopted at the ACN meeting on 24 March 2015 at the OECD Meeting in Paris (https://www.oecd.org/daf/anti-bribery/
Ukraine-Round-3-Monitoring-Report-ENG.pdf)
53
ECA Working Group on Sanctions Pecuniary sanctions imposed on undertakings for infringements of antitrust law Principles
for convergence (May, 2008), at page 2 at available http://www.autoritedelaconcurrence.fr/doc/eca_principles_uk.pdf
54
Francesca Ammassari. Guidelines On The Method Of Setting Fines For Infringements Of Competition Rules: Key Issues (2014),
at page 231 available at http://iar.agcm.it/article/viewFile/11065/10258
55
See Chapter IV, Article 255, para. 5 of the EU-Ukraine Association Agreement.
56
Meanwhile, the Recommended Explanations were revised several times and currently exist in the wording dated 9 August
2016, as amended on 20 September 2016.
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
27. 27www.boi.org.ua
Yet, the business periodically contends that
officially published decisions of the AMCU
not always contain direct reference to the
Recommended Explanations and/or that such
decisions not always explain in sufficient details
the manner in which the methodology of
calculation has been applied.
The Council is mindful of the existence of the
Draft Law of Ukraine No. 2431 (hereinafter –
the “Draft Law No. 2431”), which has been
adopted in the first reading in November 2015,
currently existing in the wording prepared
for repetitive second reading. The Draft
Law No.2431 foresees, inter alia, adoption
of the “Methodology for calculating amount
of fines by the AMCU bodies for breach of
competition laws” (hereinafter – “Methodology
for calculating the amount of fines”) and
contains respective legislative substantiation of
its’ application.
57
For instance, in 2015 while considering the case on abuse on monopolistic position at the part of LLC "Lukoil Aviation Ukraine"
the original amount of fine was approximately UAH 18 million for two infringements. Yet pursuant to the text of the respective
decision, the AMCU, by taking into account approaches specified in the Recommended Explanations, decreased the base
amount of fine on 20% and on 50% by virtue of mitigating circumstances (see http://www.amc.gov.ua/amku/doccatalog/doc
ument?id=116845&schema=main). On the other hand, in 2016 following investigation of non-competitive concerted actions
between pharmaceutical company "Alcon" and distributors, the AMCU fined infringers for the aggregate amount of UAH 1.6
million, although have not specifically acknowledged that it employed the Recommended Explanations (see http://www.amc.
gov.ua/amku/control/main/uk/publish/article/129489).
58
See at http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=54479.
59
The current wording of the Draft Law No. 2431 prepared for the repetitive second reading foresees that the Methodology for
calculating amount of fine shall be approved by the Resolution of the AMCU.
60
See amendments to Articles 52 and 60 of the Competition Protection Law and to Article 21 of the Competition Protection Law
proposed by the Draft Law No. 2431.
In light of the foregoing, the Council
recommends as follows:
1) The AMCU, prior to the adoption of the
Methodology for calculating the amount of
fines, to carry out monitoring of application
of the existing Recommended Explanations
and regularly (at least once per quarter)
publicize information about its’ practical
application.
2) To adopt the Draft Law No. 2431 in so far as
it envisages existence of the Methodology
for calculating amount of fines as binding
legislative act.
The Council’s Recommendations
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
28. 28www.boi.org.ua
Another topic traditionally debated in Ukraine is
introducing possibility to go to court to challenge
not only the fact of infringement of competition
laws, as such, but also amount of fine imposed
for committing such an infringement.
The supporters of such an approach refer to the
best international practice61
, whereas opponents
argue that it could narrow down the AMCU’s
inherent authority and refer to the shortage of
well-trained judges in the competition law sphere.
As for the relevant EU practice on this matter,
it is based on the general premise that court’s
adjudicative authority shall not be restricted62
. In
practice it means that as a result of judicial review
the fine imposed by the national competition
authority can be revoked in total or its’ amount can
be decreased or increased. Hence, the exercise
of authority by a judicial body comprises both
review of the existence of infringement as well as
the amount of the fine imposed63
. Notably, the
methodology employed to calculate the amount of
fine employed by national competition authorities
are also mandatory for courts.
As a result, efficiency of a universal
approach/methodology employed by both
competition authority and court is proved
by the practice of judicial review in the EU.
In particular, in 90% of cases the amount of fines
imposed by the European Commission has been
left intact by the court64
.
b) The possibility to challenge amount of fine in court
The Problem
61
In the majority of national jurisdictions, the review courts may either increase or reduce the level of fines (e.g., Austria,
Belgium, Bulgaria, Germany, Denmark, Estonia, Greece, Finland, Hungary, Lithuania, Latvia, Poland, the UK). However, in some
jurisdictions the principle of prohibition of “reformatio in peius” applies, thus not allowing courts to impose more severe fines
than those applied by competition authorities (e.g. Spain, Estonia, Latvia, the Netherlands etc.). See Decision-Making Powers
Report by ECN WORKING GROUP COOPERATION ISSUES AND DUE PROCESS (2012), at page 24 available at http://ec.europa.
eu/competition/ecn/decision_making_powers_report_en.pdf.
62
See Article 261 of the Treaty on the Functioning of the European Union and Article 31 of Council Regulation (EC) No 1/2003,
dated 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty.
Additionally, Articles 6 and 13 of the Convention for the Protection of Human Rights and Fundamental Freedoms envisage
obligation for a fair and public hearing … by an independent and impartial tribunal established by law and effective remedy.63
Див. детальніше за посиланням http://ec.europa.eu/competition/cartels/overview/factsheet_fines_en.pdf; http://www.
eurointegration.com.ua/rus/articles/2015/07/2/7035469/view_print/
63
See Competition Policy Implementation Working Group - Sub group 3. Competition and the Judiciary. 2nd. Phase – Case
Studies. 6th. ICN Annual Conference (2007), available at http://www.internationalcompetitionnetwork.org/uploads/library/
doc372.pdf and “The Increased Level of EU Antitrust Fines, Judicial Review and the ECHR” by Wouter P.J. Wils, Issue 1, pp.
5–29, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1492736.
64
See in more details at: http://ec.europa.eu/competition/cartels/overview/factsheet_fines_en.pdf; http://www.eurointegration.
com.ua/rus/articles/2015/07/2/7035469/view_print/
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
29. 29www.boi.org.ua
65
See Article 255 in Chapter 10 (“Competition”) of the Title IV of the EU- Ukraine Association Agreement.
66
It was contemplated that while considering application lodged by the undertaking to seek invalidation of the decision of the
AMCU body in so far as it related to imposition of fine and/or imposing obligation remove consequences of the committed
infringement of competition laws, the competent commercial court would apply, inter alia, the Methodology for calculating the
amount of fines.
67
See Article 256 in Chapter 10 (“Competition”) of the Title IV of the EU- Ukraine Association Agreement.
As for Ukraine, Article 225 of the EU-Ukraine
Association Agreement obliges Ukraine to
create and implement transparent and non-
discriminatory procedure for challenging decisions
of the AMCU in courts based on right of defence
and principles of procedural fairness65
.
The text of the Draft Law No. 2431 adopted
in the first reading (already mentioned in the
Section 2.3.4 (a) above) contemplated the
opportunity not only challenge the fact of
committed infringement but also amount of fine
in case the AMCU bodies breached Methodology
for calculating the amount of fines66
.
However, the authority of the commercial court
to change the amount of fine imposed by the
AMCU body has been removed from the text
of the Draft Law No. 2431 prepared for the
repetitive second reading. Thus, if the Draft Law
No. 2431 were to be adopted in the wording
that existed at the time of this Report, the court,
following judicial review of the decision of the
AMCU body, will not be entitled to change the
amount of fine.
In light of the requirements set out
in the EU-Ukraine Association Agreement67
the Council recommends as follows:
To amend the Competition Protection Law
to enable judicial challenge of the amount of
fine imposed by the AMCU body, subject to
existence of the Methodology for calculating the
amount of fine for breach of competition laws,
adopted in the form of legislative act, whose
application is mandatory for both the AMCU and
the bodies of judicial power.
The Council’s Recommendation
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
30. 30www.boi.org.ua
Pursuant to the general rule, the AMCU is
entitled to issue recommendations that are
subject to mandatory review by the state
authorities, bodies of the self-governance
and subjects of business activity68
. From the
substantial standpoint, the recommendations
could be aimed at terminating actions or
inactions containing signs of infringement
of competition laws as well as removal of
grounds and incentives for committing such
infringements.
The Council observed that in course of the last
two years the AMCU has considerably intensified
its’ efforts in this direction by issuing regular
recommendations in the form of letters69
.
Nonetheless, the AMCU’s recommendations are
individual in nature and are not always disclosed
in the timely manner.
In the Council’s view, it is advisable to implement
the practice of periodic aggregation and
publication of the main substantial content
of individual recommendations issued by the
AMCU in the form of non-binding informational
letters. Such an approach, if employed, would
allow the AMCU to share its’ approaches to
interpreting and enforcing competition laws
to the wide circle of interested parties; which,
among other things, corresponds
to the substance of recommendation issued
to the AMCU by UNCTAD in 201370
.
c) Information outreach
The Problem
The Council’s Recommendation
68
See Article 7, para. 1, item 14 of the AMCU Law.
69
See Article 46 of the Competition Protection Law.
70
See similar recommendation contained in the Report “Voluntary Peer Review of Competition Law and Policy: Ukraine”, page
22, carried out by UNCTAD in 2013.
THE AMCU’S ADMINISTRATIVE
AND PROCEDURAL DISCRETION
31. 31www.boi.org.ua
ACCESS TO INFORMATION
71
See Information Exchanges Between Competitors under Competition Law (DAF/COMP(2010)37) of 11-Jul-2011 available at
www.oecd.org/competition/cartels/48379006.pdf.
72
See Section 2.1.1 of the Coalition Agreement.
73
See Law of Ukraine “On Introducing Changes to Certain Legislative Acts of Ukraine on Ensuring Transparency of Activity of
Antimonopoly Committee of Ukraine”, No. 782-VIII, dated 12 November 2015.
74
Pursuant to the general rule, set forth in Article 40 of the Competition Protection Law, a person is entitled to be acquainted
with the materials of competition case.
75
For instance, the decision search fool of the Belgian Competition Authorities and UK Competition and Market Authority
accordingly http://www.belgiancompetition.be/en/decisions; https://www.gov.uk/cma-cases?keywords=&case_
state%5B%5D=open&closed_date%5Bfrom%5D=&closed_date%5Bto%5D=
Efficient exchange of information between
the AMCU and business is crucial for both
efficiency and transparency of the former’s
activity71
. Indeed, the will to ensure access to
non-confidential information submitted during
investigations of infringements and in merger
cases is foreseen in the text of the Coalition
Agreement72
.
Important step in this direction was made at the
beginning of 2016, when the AMCU's decisions
on concentration, concerted actions, as well
as on the results of consideration of cases on
violation of antimonopoly legislation started to
be disclosed at the AMCU’s official website73
.
Nonetheless, the Council is aware that
businesses continue arguing that the AMCU
could still do better when it comes to granting
access to various types of information74
. Hence,
the following concentrates on selected aspects
of the AMCU’s activity, related to the access to
information, that, in the Council’s view, still merit
further revision.
2.4. Access to information
The Problem
It appears that the only way for businesses to be
able to ascertain the status of consideration of
application and requests lodged with the AMCU
is by engaging into direct personal contact with
the responsible member of the AMCU’s staff.
The process is, therefore, susceptible to be time-
consuming.
Hence, the Council is aware that many
businesses would welcome if the AMCU
would introduce online software enabling
applicants (or their representatives) to check
the status of various filings lodged with the
AMCU. If employed, the existence of such
collaborative tool would not only help enhancing
transparency and enabling quick verification of
the case status but also would correspond to
the practices already employed by reputable
national competition authorities75
.
2.4.1. Status of various filings lodged with the AMCU
The Problem
32. 32www.boi.org.ua
ACCESS TO INFORMATION
76
Access to the file is one of the procedural guarantees intended to apply the principle of equality of arms and to protect the
rights of the defence. See, Commission Notice on the rules for access to the Commission file in cases pursuant to Articles 81
and 82 of the EC Treaty, Articles 53, 54 and 57 of the EEA Agreement and Council Regulation (EC) No. 139/2004 available at
http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52005XC1222(03)
77
Article 40 of the Competition Protection Law.
78
As the law does not foresee a specific time limit, ultimate determination of what constitutes a reasonable term is left with the
AMCU’s discretion.
79
See, para. 38 of Commission Notice on Best Practices for the Conduct of Proceedings Concerning Articles 101 and 102 TFEU
(2011/C 308/06) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52011XC1020(02).
80
See Article 231 of the AMCU Law.
The Council is aware that in some applicant’s
view it might be difficult to promptly obtain
access to the materials of the competition
case76
. Another seemingly common problem is
one’s inability to get access to the deliverables
prepared by various third parties.
Hence, in the Council’s view, to maintain the
balance between confidentiality and access to
information, the scope of one’s right to seek and
receive access to the materials of competition
case77
, should be expressly stipulated in the law.
The Council noticed that the AMCU might grant
parties with time (i.e., typically 10 days) for filling
objections/requests for clarifications78
. However,
such time limit will, most likely, not be sufficient
if the merits of the case are complex (which is
not uncommon) or information is due to be
retrieved across several jurisdictions.
The Council also observed that time limits for
the AMCU’s consideration of requests on access
to the case materials lodged by the parties is not
specified in the legislation.
Yet, according to the EU practice examined
by the Council, addressees should be given a
reasonable time limit to reply to the request,
taking into account both length and complexity
of the request and requirements of the
investigation. In general, in the EU this time limit
will be at least two weeks from the receipt of
the request. If from the outset, it is considered
that a longer period is required, the time limit to
reply to the request will be set accordingly79
.
The Council also noted that although the
authority to initiate and conduct hearings on
concentrations/concerted actions is vested with
the AMCU, the legislation lacks specific provision,
which would enable applicants to lodge request
with the AMCU to seek initiation of such hearing.
Due to such procedural gap, applicants are
effectively unable to provide explanations
and clarifications, which may be important for
proper consideration of the application/cases on
mergers/concerted actions.
2.4.2. Access to the materials of competition cases
The Problem
To introduce electronic database that would
enable applicants to retrieve general information
about the current status of consideration of
requests/applications lodged with the AMCU,
which is not confidential in nature.
The Council’s Recommendations
33. 33www.boi.org.ua
LENIENCY REGIME
To improve existing procedure of granting
interested parties access to information, the
Council recommends as follows:
1) To amend Article 40 of the Competition
Protection Law in order to:
a) set maximum time limits for (i) responding
with further explanations and/or clarifications
requested by the AMCU; and (ii) lodging
objections by the parties that disagree with
the AMCU’s interim procedural decisions in
cases on mergers/ concerted actions;
b) establish specific/maximum time limits for
the AMCU’s consideration of requests on
access to the case materials lodged by the
parties;
c) expressly enable interested parties to lodge
requests with the AMCU to seek initiation
of hearing on concentrations/concerted
actions, with such requests being subject
to the AMCU’s mandatory consideration
and provision of grounded answer within
reasonable time limits.
The Council’s Recommendations
Investigation and prosecution of cartels is one of
the core functions of any competition authority.
Indeed, over the last decade, competition
agencies around the world have been rigorously
detecting, investigating and prosecuting hard-
core cartels81
.
As for Ukraine, although domestic legislation
does not employ such term as “cartel”,
Articles 5-11 of the Competition Protection
Law comprise legal framework with respect to
“unlawful concerted actions”, which is the notion
essentially identical to “cartels”.
Cartels are hard to detect. If detected, however,
it can be difficult to prove. Yet, it is known that
cartelists are often not friends and usually
there is no trust among them82
. Therefore, one
advantage of leniency regulation is to spread
uncertainty among the members of a cartel that
every moment there is the potential danger that
one of the cartelists applies for leniency.
Hence, it is not uncommon that for the AMCU
it might be better to encourage the infringer to
voluntary disclose the information. However,
the infringer might not necessarily always
be inclined to do so due to the absence of
2.5. Leniency regime
The Problem
81
As stated in OECD’s Executive Summary of the Discussion on the Use of Markers in Leniency Programs, dated 16 December
2014 “…hard-core cartels are universally recognized as the most serious violations of competition law and as such are
the main enforcement priority of many competition authorities”. For more details please refer to Executive Summary of
Working Party No. 3 on Co-operation and Enforcement, dated 29 May 2015 (DAF/COMP/WP3/M(2014)3/ANN3/FINAL)
available at http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DAF/COMP/WP3/M(2014)3/ANN3/
FINAL&doclanguage=en
82
Ibid. As cartels generally operate in secrecy, it complicates their detection and successful prosecution. To overcome this
difficulty, most jurisdictions around the world, including all 34 OECD member countries, have adopted leniency programs,
which offer cartelists a lenient treatment in prosecution in exchange for cooperation with the investigation.
34. 34www.boi.org.ua
LENIENCY REGIME
sufficiently inclusive leniency program in
Ukraine.
In particular, although the Competition
Protection Law provides for a leniency
programme intended to facilitate detection
of unlawful concerted actions, only the first
undertaking that lodged the respective
application with the AMCU is eligible for
immunity from a penalty granted by leniency83
.
In other words, Ukrainian leniency regime does
not allow any subsequent member of cartel to
qualify for immunity from liability. Hence, such
an approach implies a high risk for the reporting
party to admit a certain infringement without
knowing if cooperation with the competition
authority under the framework of leniency
program is (still) possible.
Notably, the cooperation with the AMCU implies
that the existence and the content of the
application cannot be disclosed to any other
cartel member84
. Thus, the Council observed
that even if the latter did not take active steps
to coerce other undertakings to participate in
the cartel, as the matter of the Ukrainian law,
it is nonetheless not entitled to benefit from
immunity unless it ended up being the first one
to lodge the disclosure application with the
AMCU.
83
See Article 6, para 5 of the Competition Protection Law. The AMCU rewards only the first-in applicant with immunity, foreseen
under the Regulation “On Submission of Applications to the Antimonopoly Committee of Ukraine on the Exemption from
Liability for a Breach of Legislation on Economic Competition under Article 50, para. 1 of the Law of Ukraine "On Protecting
Economic Competition", approved by the AMCU Resolution, No. 399-р, dated 25 June 2012 (hereinafter – the “Liability
Exemption Regulation”), available at http://www.amc.gov.ua/amku/control/main/uk/publish/article/120499.
84
See para. 2.16 of the Liability Exemption Regulation.
85
See OECD Publication “Leniency for Subsequent Applicants” (DAF/COMP(2012)25) at page 5 available
at http://www.oecd.org/competition/Leniencyforsubsequentapplicants2012.pdf
The Council recommends reducing fines for
parties other than the first one to file, thus
making the existing leniency regime more
inclusive. As pointed out in OECD’s recent
publication, while referring to the ongoing trend
characterizing jurisdictions with more advanced
leniency regime:
“… jurisdictions that operate leniency
programmes recognize the benefits of
rewarding not only the first-in applicant who
denounces the cartel but also subsequent
applicants who provide useful corroboration or
new evidence”85
.
To achieve this, the Liability Exemption
Regulation should be amended to enable the
undertakings that do not qualify for immunity
to benefit from a reduction of fines, provided
that (i) they provide evidence that represents
"significant added value" to that already in the
AMCU’s possession; and (ii) have terminated
their participation in the unlawful concerted
action.
As for the former criteria, evidence should be
considered to be of a "significant added value"
when it reinforces the AMCU’s ability to prove
the infringement. Accordingly, the first entity
The Council’s Recommendation
35. 35www.boi.org.ua
PUBLIC PROCUREMENT
to meet these conditions might be granted 30
to 50% reduction, the second - 20 to 30% and
subsequent companies - up to 20%.
Notably, the foregoing approach reflects one
of OECD’s specific recommendations related to
Ukraine made back in 201286
. Besides, the idea
of more inclusive leniency regime was endorsed
by the European Commission87
and is effectively
followed not only in selected EU jurisdictions
(e.g., Hungary, Latvia, Lithuania, Poland, Spain)
but also in Japan, Mexico etc.88
It is common legislative practice to enable
participants of public procurements to challenge
results thereunder prior to seeking judicial
protection.
Since 2010 it is the AMCU that is vested
with the authority to act as a pre-trial body
for consideration of complaints lodged by
individuals and legal entities to challenge
outcomes of the state procurement
procedures89
.
Complaints with respect to public procurements
meeting certain thresholds are considered
by the Permanent Administrative Panel
(“Колегія”) for Consideration of Complaints on
Violation of Legislation in the Sphere of Public
Procurements, established under the auspices
of the AMCU91
.
It is worth noting that in comparison with
the legal framework that was in effect until
July 2016, the procedure of appeal with the
AMCU of the decisions, actions and inactivity of
customers in public procurement undergone
certain progressive improvements. In particular,
(i) complaint shall now be submitted in
electronic form; (ii) for the period of appeal
consideration, the public procurement
procedure shall be automatically suspended;
and (iii) the complainants received free access to
the proposals of competitors, etc92
.
Nonetheless, the Council suggest
addressing several important issues, namely
(i) the procedural right to present additional
evidence and/or submit new documents; and
(ii) admissibility of electronic documents.
2.6. Public procurement
86
Ibid, at page 149.
87
See Training Materials on Leniency of the European Commission at http://ec.europa.eu/competition/cartels/leniency/leniency.
html
88
See, generally, European Commission Notice on Immunity from Fines and Reduction of Fines in Cartel Cases (2006/C 298/11),
available at http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52006XC1208(04).
89
See the Law of Ukraine “On Carrying out State Procurements”, No. 2289-VI, dated 1 June 2010, as amended.
90
Public procurement procedures are required to be carried out in electronic procurement system (See Article 12, para 2 of
the Law of Ukraine “On Public Procurements”, No.922-VIII, dated 25 December 2015, as amended (hereinafter - the “Public
Procurements Law”)), provided that one of the following thresholds is met: (i) the purchase of goods or services equals or
exceeds UAH 200,000, and purchase of works – UAH 1,500,000; or (ii) the purchase of goods or services in separate spheres
of business activity (i.e. gas production, transportation and storage, heating and water supply, etc.) equals or exceeds UAH
1,000,000, and purchase of works – UAH 5,000,000 (See Article 2, para 1 of the Law of Ukraine “On Public Procurements”).
91
The Panel was established by the Resolution of the AMCU, No.6-рп., dated 5 April 2015 (See http://www.amc.gov.ua/amku/
control/main/uk/publish/article/123942).
92
See, generally, the Public Procurements Law.
36. 36www.boi.org.ua
PUBLIC PROCUREMENT
Under the general rule, the complaint is
lodged with the AMCU in the form of electronic
document submitted via electronic procurement
system. The complaint is accompanied by
documents and materials in electronic form
evidencing breach of the procurement
procedure or unlawful nature of a consumer’s
actions or inactions93
.
In course of the complaint’s consideration, the
need to file additional documents may arise.
However, the opportunity to present such new
documents is not expressly envisaged by law
(contrary to expert opinions that may be lodged
by a consumer or subject of challenge and
which are due to be added to the materials of
the case94
).
Hence, there is a risk that submission of
additional documents by complaining bidder or
any other participant of the appeal procedure
could be substantially restricted or even not
allowed.
It is since 2005 that electronic documents
are formally acknowledged in Ukraine as
admissible evidence in administrative process95
.
Nevertheless, the Council observes that the
Ukrainian courts are often demonstrating that
they are not prepared to accept evidence in
electronic form in case the lawsuit is filed96
.
While this might be perceived as a general
problem, in the context of public procurement
it considerably frustrates use of data stored
at electronic procurement system for bidding
process and consideration of complaints.
2.6.1. Right to present additional evidence/submit new documents
2.6.2. Use of electronic procurement system
The Problem
The Problem
93
See Article 18, para. 1 of the Public Procurements Law.
94
See Article 18, para 10 of the Public Procurements Law.
95
See Article 79, para 1 of the Administrative Procedural Code of Ukraine, No. 2747-IV, dated 6 July 2005, as amended.
96
Usually the court continues suggesting to the parties purporting to submit evidence in the form of electronic documents to
present their “visual” paper copy, certified pursuant to requirements set forth in the “Procedure for Certifying Availability of
Electronic Document (Electronic Data) At Certain Moment in Time”, approved by the Resolution of the CMU No. 680, dated 26
May 2004, as amended.
37. 37www.boi.org.ua
PUBLIC PROCUREMENT
In light of the foregoing, the Council
recommends as follows:
1) To amend Article 18, para 10 of the Law of
Ukraine “On Public Procurements” to enable
complaining bidder or any other participant
of the appeal procedure to submit additional
documents related to the merits of the
complaint.
2) Whereas public procurement procedures
and non-judicial appeal procedure are
documented in electronic form, - to ensure
admissibility of evidence lodged with the
Ukrainian courts in the form of electronic
documents by either:
a) amending Article 79, para 1 of the
Administrative Procedural Code of Ukraine
and relevant regulations governing
circulation of electronic documents97
accordingly; or by
b) amending Article 12, para 3 of the Law of
Ukraine “On Public Procurements” along with
relevant provisions of the Administrative
Procedural Code of Ukraine on evidences98
,
to provide administrative courts with the
right to access electronic procurement
system.
The Council’s Recommendations
97
See, generally, Law of Ukraine “On Electronic Documents and Circulation of Electronic Documents No.851-IV, dated 22
May 2003, as amended; Law of Ukraine “On Electronic Digital Signature”, No. 8 52-IV, dated 22 May 2003, as amended; and
Procedure for Certifying Availability of Electronic Document (Electronic Data) At Certain Moment in Time”, approved by the
Resolution of the CMU No. 680, dated 26 May 2004, as amended.
98
See Chapter 6 of the Administrative Procedural Code of Ukraine, No. 2747-IV, dated 6 July 2005, as amended.
38. 38www.boi.org.ua
STATE AID
The Law of Ukraine “On State Aid to
Undertakings”, No. 1555-VII, dated 1 June 2014
(hereinafter – the “State Aid Law”) identifies the
AMCU as the “authorized body”99
for the system
of state aid that is due to become operational in
mid-2017100
.
Although the AMCU is very visible while
disseminating knowledge about the key
provisions of the State Aid Law101
, the notion of
state aid remains to be quite new in Ukraine.
Therefore, to make the forthcoming state
aid system fully operational, adoption of an
extensive body of secondary legislation will be
required (not least to ensure compliance with
the DCFTA)102
.
Hence, the following briefly analyses current
level of awareness about state aid, status of
work with adoption of secondary legislation and
launching of the State Aid Register from the
standpoint of Ukraine’s obligations under the
DCFTA.
2.7. State Aid
The State Aid Law contains rather complex
language while setting forth criteria of
admissibility of certain categories of state aid,
procedures for determining their compatibility
with the principles of free competition and
monitoring of state aid, etc. Yet, incorrect and/
or incomplete understanding and application
of these provisions may trigger quite serious
consequences for businesses, including
suspension or even recovery of inadmissible
state aid103
.
There is a risk, however, that aid beneficiaries
might not always recognize the importance of
quality professional advice. Besides, state and
local self-governance bodies might not always
be prepared to properly fulfil their role of aid
providers as contemplated under the law104
.
Therefore, it is important to ensure that certain
pre-emptive strategy is pursued by the AMCU
aimed at mitigating possible adverse effect
of the foregoing risks at the time when state
2.7.1. Awareness about State Aid
The Problem
99
See Article 8 of the State Aid Law.
100
See, in particular, para 1 of Transitional Provisions of the State Aid Law.
101
The Council noticed that the AMCU arranged several events (e.g., conferences, trainings etc.) specifically devoted to the
state aid in Ukraine. For instance, on 27 May 2016 International State Aid Conference: “A New Approach to State Aid to
Undertakings in Ukraine - Doing More with Less” was held in Kyiv. Additionally, the AMCU launched a separate section on its’
official webpage where one can find short introduction to the general principles of state aid. Besides, the AMCU has recently
published the first book on the state aid in Ukraine.
102
See, in particular, Articles 262 to 267 of the DCFTA.
103
See Article 14 of the State Aid Law, vesting the AMCU with authority to recover inadmissible state aid.
104
The notion of “state aid providers” comprises state bodies, local self-governance bodies, bodies of administrative and
commercial management and control, including legal entities acting on their behalf, authorized to control the state or local
resources and initiate and / or provide state aid (See Article 1 of the State Aid Law).
39. 39www.boi.org.ua
STATE AID
aid system would become operational. In this
regard, the Council welcomes that the AMCU
introduced special section on its’ official website
devoted specifically to state aid105
and set up
several working groups (with the involvement of
business community) tasked to elaborate, inter
alia, criteria of admissibility of certain categories
of state aid (i.e., for certain branches of
economy, small and medium business, regional
development, etc.)106
.
Besides, to deliver an efficient competition
advisory function and disseminating knowledge
about state aid, the AMCU should be equipped
with sufficient staff and technical resources.
During fact-finding mission at the AMCU, the
Council ascertained that currently the state aid
department is composed of 5 professionals. Yet,
it appears that in order to cope with anticipated
workload, once the new system becomes
operational, the team might require up to 70
professionals107
.
105
See in Ukrainian http://www.amc.gov.ua/amku/control/main/uk/publish/article/120893
106
As identified in the course of fact-finding mission at the AMCU. See in Ukrainian http://www.amc.gov.ua/amku/control/main/
uk/publish/article/128200
107
As identified in “Current situation and outlook of State Aid in Ukraine” presentation, prepared by the AMCU.
108
It is worth noting that the AMCU approved schedule of training and studies specifically developed for different state aid
providers. See http://www.amc.gov.ua/amku/doccatalog/document?id=120944&schema=main
109
See, generally, Articles 262-267 of the DCFTA.
In light of the foregoing, the Council
recommends the AMCU as follows:
1) To continue enhancing awareness amongst
state and municipal authorities108
and
business about the substance of the
forthcoming legal framework on state aid
and the general implications stemming
therefrom.
2) To maintain active dialogue with both
providers and beneficiaries of state aid to
discuss existing and contemplated policy
choices in the field. It appears that this would
not only help balancing up the interests of all
stakeholders but might also be beneficial for
ensuring compliance with the DCFTA.109
The Council’s Recommendations
40. 40www.boi.org.ua
STATE AID
According to the State Aid Law, the CMU has
to adopt a vast body of secondary legislation
to further specify, inter alia, the criteria of
admissibility of certain categories of state
aid;110
procedures for recovery, suspension or
withdrawal of state aid, etc. Notably, adoption of
such secondary legislation is primarily required
under the DCFTA111
. Hence, to the extent it
represents a substantial portion of the EU
competition law, the manner in which it is being
adopted has to take into account peculiarities of
the Ukrainian legal system.
The Council observed that the AMCU has
already made major contributions to ensure
smooth introduction of the state aid system. In
particular, in the course of fact-finding mission it
was identified that 7 acts of secondary legislation
in the sphere of state aid were approved, 127
drafts of legislative acts were assessed from the
standpoint of existing legal framework on state
aid and 12 recommendations on state aid were
issued112
. Nonetheless, it is evident that the
outstanding workload with drafting secondary
legislation remains to be quite significant.
2.7.2. State of Secondary Legislation
The Problem
110
For instance, as at the date of this Report the AMCU has reportedly prepared draft criteria of admissibility of certain
categories of state aid due be approved and adopted by the CMU (i.e., as foreseen in Article 6, para. 2, items 4,
6-7 of the State Aid Law).
111
See Article 267 of the DCFTA stating that “Ukraine shall in particular adopt national state aid legislation … within three years of
the entry into force of this Agreement”.
112
See “Current situation and outlook of State Aid in Ukraine” presentation, prepared by the AMCU.
In light of the foregoing, the Council
recommends as follows:
1) To ensure that pending secondary legislation
is both available and adequate from both
procedural and substantial standpoint. In
particular, to ensure compliance with Article
6 of the State Aid Law, the CMU shall adopt:
a) Resolutions on provision of state aid in
specific areas (i.e., regional development;
support of small and medium business
development; employees professional
development; reorganization and
restructuring of undertakings; development
of certain branches of economy, etc.);
b) Methodology for calculating amount of state
aid; and
c) Procedure for illicit state aid’s recovery.
2) Once the new system of state aid becomes
effective, it might be appropriate for the
AMCU to consider performing an additional
gap analysis to identify outstanding issues,
whose resolution could still require adoption
of respective secondary legislation.
The Council’s recommendations