DIGEST OF REFORMS 23.01-29.01.2016

DIGEST OF REFORMS 23.01-29.01.2016
January 29, 2016.

Privatization

Ukrainian Parliament finally introduced new rules for state property sales. From the 19th attempt, Parliament supported the corresponding draft law in the first reading. Under this law, manipulations with state property and attempts to understate its market price will be nearly impossible. Counselors, engaged by the State Property Fund of Ukraine, will monitor sales in order to verify their conformity to the rules. The second reading of the draft law is expected in two weeks. The adoption of new privatization rules is a requirement of the International Monetary Fund and one of preconditions for a large-scale privatization, which was announced in 2015. In 2016, budget revenues from privatization are expected to amount 17.1 billion US dollars.

Competition policy

Competition law reform announced last year by a new team of the Antimonopoly Committee of Ukraine (AMCU) headed by Yuri Terentiev, has been laucnhed. Parliament finally supported the AMCU’s idea to increase economic concentration thresholds. MPs voted for the corresponding draft law as a whole. This technical solution entails many positive changes for business, for the regulator, and for competition development in general. Most purchase and sale transactions in business do not affect the competitive environment. This eliminates the need to obtain permissions from the AMCU, which will save entrepreneurs time and money. The AMCU, for its part, will not scatter attention on details and will focus on large transactions and on monitoring the compliance. Raising the economic concentration thresholds is one of the requirements for obtaining the EU tranche of 600 million euro.

Anti-corruption reform

Anti-corruption reform is among outsiders for the second week in a row. This week the Parliament had to cancel the state budget-2016 provision for postponing the introduction of an open electronic register of officials’ declarations until 2017, and thus to save face in the eyes of the international community. The electronic registry introduction in 2016 is a prerequisite for Ukraine’s visa-free regime with the EU. But Parliament hesitates.  Meanwhile, 94,4% Ukrainians consider corruption to be the most painful problem for the country. However, progress in solving it remains insignificant. According to the results of the Corruption Perception Index CPI-2015, Ukraine received 27 points out of 100, which is only one point more than last year. Transparency International noted the positive developments towards the establishment of anti-corruption bodies and the rise of anti-corruption civic movement. Interaction between business and government had the most adverse effect on CPI index.

 

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