Attempts by the authorities to limit the list of places for the sale of alcohol and tobacco products, contained in bill No. 5805, registered on July 19 by MP Heorhiy Mazurashu (Servant of the People faction), will lead to an increase in the price of these products, and create additional financial burden for business, therefore it should be rejected, the European Business Association (EBA) said on its website on Friday.
According to the explanatory note to the document, the bill proposes to limit the sale of beer (except non-alcohol), alcohol, low-alcohol beverages, table wines, tobacco products, electronic cigarettes, liquids used in electronic cigarettes, devices for consuming tobacco products without heating them only to specialized fixed outlets (shops) where no other goods are sold than those listed above.
The association noted that this legislative initiative will require capital investments from businesses to equip separate sales outlets, which will lead to an increase in the price of legal products and an increase in the price gap between counterfeit and legal goods.
In this regard, the EBA appealed to parliamentarians with a request not to support such amendments and to reject bill No. 5805 during consideration.
“The number of official sales outlets may significantly decrease, or even disappear altogether, and thus encourage the consumption of counterfeit products. Questions are also raised about the timing of the proposed amendments. It is envisaged that the law will enter into force on the next day after its publication. Since it is physically impossible to create a place of trade in one day, this will stop the sale of alcohol and tobacco products in Ukraine for a long time,” the association said.
The EBA also notes that the proposed amendments may limit competition between business entities in the Ukrainian market. According to it, in most EU countries, there is no such experience of restricting trade in alcohol and tobacco products. In addition, there are no separate rules for regulating the sale of alcohol and tobacco products in public catering establishments.
“The bill does not take into account an assessment of financial and economic consequences of the introduction of such amendments for business and the state, for example, budget losses from a decrease in the number of licenses for retail trade in tobacco and alcohol products,” Svitlana Mykhailovska, the EBA Deputy Director for Advocacy, said.
According to her, the EBA shares the desire of the MP to minimize the impact of binge drinking and smoking on the nation’s health, but the proposed method is selective and inconsistent. In addition, the association did not see in the context of bill No. 5805 an analysis of law enforcement practice and statistical data, which would indicate the ineffectiveness and insufficiency of existing restrictions and bans on the sale of alcohol beverages and tobacco products.
The European Business Association (EBA) has called on the Interdepartmental Commission on International Trade of Ukraine to make efforts to resume the free trade regime with Belarus.
“The European Business Association calls on the Interdepartmental Commission on International Trade of Ukraine to make every effort to restore the free trade regime,” the EBA said.
“In June 2021, Belarus introduced an individual licensing regime for the import of a range of Ukrainian goods. The new regime should be applied to household goods, agricultural machinery, etc. The decision was caused by the fact that the Interdepartmental Commission on International Trade of Ukraine introduced a special duty on imports of wheeled vehicles from the Republic of Belarus to Ukraine,” the report says.
“This issue is extremely relevant for a number of Ukrainian companies that have already suffered from the introduction of new trade restrictions and suffered losses of millions of dollars,” it reds.
“This situation has put many producers in a difficult position, as many businesses have cooperated with the neighboring country. Thus, if the situation is not tackled, some Ukrainian companies will be forced to partially close production, cut jobs, and so on. In the absence of a rapid response from the Ukrainian government, the Belarusian market could be lost for years. The losses for both countries can be reduced if both sides reconsider their decisions, which grossly violate the free trade regime,” the EBA said.
The European Business Association (EBA) supports the idea of a systematic fight against smuggling and solving problems at customs, but considers a useful tool for this to be a reduction of the demand for illegally imported goods in the domestic market due to fiscalization and increased fines for the non-issuance of fiscal checks, as well as the mechanism of cashback, the association said in a release on Wednesday.
“A useful tool for solving this problem may be to reduce the demand for illegally imported goods in the domestic market of Ukraine. This can be achieved by strengthening control over the use of cash registers and gradually expanding the scope of mandatory use of payment transactions recorders,” Senior Manager of EBA Consumer Electronics Committee Viktoria Kulykova said.
According to her, the European Business Association has already asked the President to pay special attention to this issue, in particular – to prevent the weakening of reform and strengthen control and punishment for violations of legislation in this area.
According to the association, in the absence of fiscal checks and effective control over their issuance, unscrupulous entrepreneurs begin to evade the necessarytaxes and customs duties.
“Therefore, there is an urgent need to create transparent, equal, and civilized conditions for doing business, including the introduction of European practices for the fiscalization of payment transactions,” the association said.
However, the EBA representatives are convinced that the situation can be further improved: in particular, by increasing the fines for non-issuance of fiscal checks and introducing a mechanism to motivate customers to verify the authenticity of fiscal checks, the so-called cashback.
According to the EBA Consumer Electronics Committee, the volume of illegal imports of certain product categories amounts to 50-70%. To understand the scale of the problem, the Ukrainian budget loses about UAH 33-35 billion annually because of smuggling (UAH 11-14 billion from illegal petroleum products, UAH 7 billion from machinery, UAH 12 billion from alcohol, and about UAH 7 billion from medicines).
The European Business Association (EBA), in partnership with Huawei Ukraine and SAP Ukraine, has conducted an expert study of the current state of digital transformation deployment at private and public levels.
The study was conducted from March 29 to April 14, 2021, according to a joint report by the companies. It covered 130 general, executive and technical directors of EBA member companies.
The majority of respondents assess the volume and quality of the provision of state electronic services as high or satisfactory (7% and 55%, respectively). Among the most widespread electronic government services, the respondents rated the work of the Diia single portal of government services the best of all.
At the same time, according to the respondents, the development of digital infrastructure, as well as improving access to the use of modern technologies (digital inclusion) are definitely priority tasks for the state.
Thus, 47% of respondents assess the level of development of digital infrastructure as moderate, 42% – as low or very low. The majority of respondents also rated the level of digital inclusion as low or very low (54%).
At the same time, 55% of respondents believe that the level of digital transformation of their industries is moderate, 16% – high, another 6% – very high. At the same time, 23% consider it low or very low.
Of the directors surveyed, 41% rate the digital literacy level of their employees as moderate, 13% as low, and 46% as high.
In addition, 47% of directors rated the level of digital development of their business as moderate, 39% think it is high, another 5% – very high. Only 9% of respondents consider the level of digital transformation of their companies to be low.
At the same time, the overwhelming majority (89% of those surveyed) admitted that the corporate strategy of their company contains the goals of digital transformation.
According to the results of the survey, the integral indicator of the digital transformation index of Ukraine amounted to 2.81 points out of five possible and found itself in the negative plane.
According to the research methodology, the integral indicator of the index consists of five equivalent components: the general level of digital transformation of companies; digital transformation of industries; development of digital infrastructure; digital inclusion; volume and quality of state electronic services.
“We are witnessing a dynamic growth of the Ukrainian IT market. However, there are certain barriers that hinder the development of digitalization due to the rather complex regulation of the industry, emigration of specialists, weak infrastructure support for new projects, restrictions on the use of cloud technologies in the public sector, etc. This is confirmed by the results of an expert study,” Director of SAP Ukraine Maxim Matyash said.
The non-approval of an order of the Ministry of Health amending the maximum residue levels of veterinary drugs in foodstuffs of animal origin by the State Regulatory Service could result in a ban on the sale of poultry meat, the European Business Association (EBA) said on its website.
The association said that on February 17, the Ministry of Health of Ukraine issued an Order amending the maximum residue levels of veterinary drugs in foodstuffs of animal origin.
The document proposes to bring the safety of poultry meat in line with European standards. The project concerns the authorization of the use of therapeutic feed additives for preventing coccidiosis. Without the proper prevention, this disease may lead to the death of 80-90% of all young birds.
The association said that as it became known, the State Regulatory Service, whose task is to implement the state regulatory policy, the policy on supervision (control) in the field of economic activity is preparing a draft refusal to this order. The draft order has already been approved by the Ministry of Economic Development, Trade and Agriculture, as well as the State Service for Food Safety and Consumer Protection.
The EBA said that the non-approval of this normative act will lead, in fact, to a ban on the sale of poultry meat both on the territory of Ukraine and abroad. After all, food products that are prohibited for domestic consumption are also prohibited for export.
The EBA has already sent a letter to the Ministry of Health and the State Regulatory Service asking them to support the proposed changes and to prevent a ban on the use of feed additives for poultry in Ukraine. This situation can lead to a loss in the total number of poultry, which in turn can lead to a sharp and uncontrolled rise in prices for this category of products.
The association said that these feed additives are not harmful to humans (including those used in European countries). However, they are very important for raising poultry and are used throughout its life cycle up to two or three days before slaughter.
Business awaits law enforcement reforms, but the latest version of the law on the Economic Security Bureau and the bill on the reform of the Security Service (SBU) adopted at first reading raise doubts about the quality of such reforms, the European Business Association (EBA) said in a release.
“It is worth noting that currently, the problem of cooperation with law enforcement agencies concerns not only SMEs and regional entrepreneurs but also large international companies and strategic investors,” the release says.
“The reform issue is especially relevant now in the context of the establishment of the Bureau of Economic Security. Although the community has not yet seen the final version of the document, the business was wary of the penultimate version of the draft law. Thus, there are fears that instead of a radically new analytical body that would help protect the interests of business, a new structure may be created with a new name, but with the same methods of work and even the same people,” the EBA says.
“At the same time, the SBU reform was launched, so to speak, by the adoption of the draft law No. 3196-d at first reading. Thus, the draft law was supposed to eliminate anti-corruption and economic units in the SBU, partially demilitarize the service, etc. However, there are fears that the liquidated SBU departments will be reincarnated as other functional units that will provide counterintelligence support in the economic context. In other words, it is likely to put continued pressure on the business. And, in general, this document invokes a lot of questions concerning the renewed functions and powers of the service,” it noted.
“Therefore, the European Business Association appeals to Volodymyr Zelensky, President of Ukraine, Denys Shmyhal, Prime Minister of Ukraine, and Arsen Avakov, Minister of Internal Affairs, to pay due attention to reforming the law enforcement system in 2021. It is unacceptable and unreasonable to persecute the business. Otherwise, the issue of attracting investment, business development, and economic development, in general, may become a big question. We hope that the time for fundamental reforms has come and we will finally move from talks to the action!” the document says.
