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The Association Agreement stipulates Ukraine’s commitment to implement about 350 European acts (directives, regulations, decisions) by 2025.

According to the deadlines set in the Agreement, for the period from July 1 to November 1, 2016, Ukraine had to adapt 44 EU acts in the fields of energy, environment, public health, social policy, business, taxation and public procurement, the largest number of which fell on the energy (13) and environment (15) sectors.

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The assessment shows that there has been no significant progress in fulfilling the commitments under the Association Agreement, as only 8 of the 44 commitments have been fulfilled (Ukrainian legislation has been adapted to EU requirements).

As in the previous report, the most successful areas were public procurement and energy, where systematic work is underway to approximate Ukrainian legislation to EU legislation. In other areas, the implementation of European integration commitments is at various stages. For the full implementation of EU requirements regarding the legislation governing the collection of excise duties remains to adopt several technical amendments, while the adaptation of environmental regulation is very slow.

The biggest obstacles to the timely adaptation of EU norms in Ukraine were the delays in the consideration and adoption of relevant draft laws by Parliament, the slow and over-bureaucratic procedure for approving draft regulations at the governmental level, and the lack of staff to develop quality draft laws.

The most successful adaptation of legislation

Public procurement. The Ministry of Economic Development and Trade of Ukraine (MEDT) demonstrated the best results by completing all the steps in adaptation and implementation provided for in the Association Agreement by November 1, 2016. In particular, the basic program document “Roadmap in Public Procurement” was adopted, requirements for the procurement process were defined, and the institutional division of powers between MEDT and the Antimonopoly Committee of Ukraine (AMCU) was established. The former should determine the state policy in the field of public procurement, and the latter should review the decisions of customers.

Energy. Thanks to the systematic work of the State Agency for Energy Efficiency and Energy Saving and the Ministry of Economic Development and Trade as regards the reform of the system of national technical standards, Ukraine managed to launch a national energy labeling system for energy-absorbing products that fully meets the requirements of the new Directive 2010/30/EU. As of November 1, 2016, Ukraine has adopted framework legislation and 4 technical regulations on the labeling of refrigerators, washing machines, dishwashers, as well as electric lamps and lighting fixtures, which are fully implemented in the practices of manufacturers, importers, and government agencies. Completion of this reform requires the adoption of other regulations as soon as possible, as well as the implementation of the directive’s requirements for the state’s ability to control the accuracy of energy labeling information.

The need to meet new and stricter EU nuclear safety standards prompted the State Nuclear Regulatory Inspectorate of Ukraine (SNRIU) to begin the process of adapting domestic regulations to EU standards in improving safety standards for nuclear installations, protection against ionizing radiation, and transportation of radioactive waste and nuclear fuel. So far, most of the necessary by-laws of the SNRIU have been adopted. However, some important institutional changes, such as the reform of the nuclear energy regulator, have unfortunately been blocked due to poor parliamentary work and delayed approval of draft regulations at the level of the Cabinet of Ministers.

One step towards successful adaptation of legislation

Taxation. Adaptation of the requirements of two EU directives governing the codification and collection of excise duty is almost complete by now and introduced into the practice of the State Fiscal Service of Ukraine (SFSU). In order to be completed, it is necessary to fully unify the list of excisable goods in accordance with EU requirements, as well as to harmonize the structure and rates of excise duty levied on tobacco products with European requirements.

Fail on the way of successful adaptation of legislation

Environmental protection. The fulfillment of commitments in this sector is quite complex, given a large number of commitments. In addition, the environment is not a priority on the national reform agenda, which also affects the pace of implementation of legislation.

The Ministry of Ecology of Ukraine has started the adaptation of national legislation to European requirements developing basic systemic laws, such as the ” On Strategic Environmental Assessment” and “On the Environmental Impact Assessment”. However, due to the strong conflict between the main stakeholders and the lack of active outreach on social and environmental importance, the draft laws were vetoed by the President. Legislation has also been adopted to adapt the provisions of the EU Water Directive. Work on other changes is underway at the draft laws development stage. The implementation of the Directives on the protection of habitats, protection of birds, control of emissions of volatile compounds, marine environment, and trade in greenhouse gas emissions, has not yet begun.

Stuck in the adaptation process

Company law. Work on reforming the company law in line with EU standards has been carried out with varying degrees of success. On the one hand, the opening of the data of the Unified State Register of Enterprises and Organizations of Ukraine (USREOU) can be assessed quite positively, but access to the registration files of companies is not provided. Also, information on branches of foreign companies operating in Ukraine is still not subject to disclosure. In the area of ​​corporate governance, work is currently underway to implement the relevant EU standards, and International Financial Reporting Standards (IFRS) are used in a narrower extent than required by Regulation 1606/2002.

Public health. Current legislation in the field of tissue, cell, and organ transplantation only partially meets the requirements of EU directives, which had to be implemented by November 1, 2016. In particular, as regards a transplant permit, the law allows the use of the full range of anatomical material in clinical practice, but in terms of confidentiality standards, proper quality system, tissue, and cell preparation standards, Ukrainian legislation still does not correspond to the relevant European regulations. In order to fully harmonize national legislation in the field of transplantation with the requirements of EU directives, it is necessary to adopt draft law No 2386a-1 “On Amendments to Certain Legislative Acts of Ukraine on Health and Transplantation of Organs and Other Human Anatomical Materials” which will implement most of the relevant EU directives.

In the field of tobacco regulation, the adaptation of Ukrainian legislation to European standards has been delayed for a year. Two draft laws No 2430-1 (based on the old Directive2001/37/EC) and No 2820 (based on the new directive No 2014/40/EU) are registered in the Verkhovna Rada. However, due to long discussions on which draft law to adopt – the one based on the new directive or the one based on the old one – the process of adaptation in this area has been virtually halted.

Social policy. The work on the adaptation of the legislation of Ukraine to the EU norms regulating the issues of labor protection of mining workers is being carried out at the preparatory stage in violation of the terms stipulated by the Association Agreement. To complete it, it is necessary to adopt two orders of the Ministry of Social Policy of Ukraine, which regulate the minimum requirements for occupational safety and health of employees of mining enterprises. At the moment, they have not even been made public.

Conclusions:

  1. Due to the weak staffing capacity of the state authorities, the implementation of European integration commitments is carried out unsystematically. In the sectors where responsible actors have sufficient institutional capacity to create quality regulation and communicate effectively at the level of the Cabinet of Ministers and Parliament, the adaptation process is successful, while if it is not the case, the adaptation is slow.
  2. Today, the Verkhovna Rada remains a weak link in the process of European integration reforms. Most of the draft regulations that need to be adopted at the level of the law are blocked at the stage of consideration and voting. This is due to the lack of motivation and lack of understanding of the importance of European legislation by MPs, as well as due to unpopular and often quite strict EU requirements for the adaptation of national legislation.
  3. Another problem is the complicated procedure for considering draft regulations at the level of the Cabinet of Ministers, when the approval of an act may take years.

Recommendations. In order to effectively implement the Association Agreement and adapt national legislation to EU legislation, it is recommended to develop and implement a mechanism for the accelerated passage of regulations implementing the Agreement. This can be achieved by setting a clear time slot for European integration draft laws during each session day and developing an accelerated procedure for consideration of European integration acts by the Cabinet of Ministers of Ukraine.

 

Dmytro Naumenko, Senior Analyst, Ukrainian Centre for European Policy

Liubov Akulenko, Executive director, Ukrainian Centre for European Policy