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Ukraine has already made a significant progress in the legal approximation process. It is foreseeable that these efforts will provide positive results.
Law-makers, when amending legislation, are faced with one fundamental problem: should all changes be made at once? Or should the change be a gradual one, i.e. step by step? Ukraine has chosen a gradual approach, and the Project respects this choice.
Introducing legislation gradually makes the implementation of EU legal acts more adaptable to existing social, economic and political conditions, which provides for more successful further implementation. It is important for Ukraine to continue moving in this direction. The Project’s objective is to both, assist in defining new priorities and, support the implementation process so that the legislative effort will result in a policy, which reflects the principles of democracy, liberties and free market.
One must not forget that there are some 10 000 technical rules and regulations which support the main EU legislation. At the same time, a large number of Ukrainian technical rules and regulations remain valid, even though they are at odds with the EU technical rules and regulations. Looking into this situation and developing workable mechanisms for harmonization is a grandiose task but the Project team believes that this process is meaningful and beneficial for both sides.
In completing this task, the Project will take into full account the fragmented nature of EU law. They will also take into account that certain social areas are not fully regulated. Owing to the fact that EU law cannot be compared to national law, many results hoped for can only be achieved through gradual implementation.
The major challenges in implementing a system of laws in Ukraine that are reflective of EU standards are:
- strengthening the enforcement of laws and the continued dissemination of information on European Union related matters;
- creating a Free Economic Area; and
- defining an effective methodolog y.
In order to implement international agreements (including EU agreements) into domestic law, a wider and more organized system of dissemination of information is required. It is important therefore, to develop guidelines on the applicability and/or use of international instruments that Ukraine has acceded to. Ukrainian legislation clearly stipulates the primacy of international law. If Ukraine wishes to continue down its current path, it will be necessary to work on a model of implementation of international agreements which are effective in the EU member states.
Another crucial issue, which must be embarked upon, is judicial reform. The procedures used in Ukrainian courts require more transparency and must be made more understandable. All jurisdictions (general, commercial and administrative) should have the same number of instances. This is not the case at present (courts of general jurisdiction have three instances, whereas commercial and administrative courts have four). It would also be expedient to consider the introduction of specialised courts which deal specifically with competition or intellectual property law.
Judicial reform will not be successful however, unless mechanisms which ensure the implementation of court orders are developed. Annually, approximately 25%-30% of civil court decisions are not carried out. It is therefore of the utmost importance to amend the legislation to ensure enforcement of court decisions (possibly by introducing criminal liability for those who violate legal orders).
The existing Ukrainian legislation which regulates the activity of lawyers, and in particular the laws On the Bar of Advocates and On public notaries should be further developed to increase the responsibility of practising lawyers owe to their clients (especially the introduction of obligatory insurance requirements). These legal professions play an important role in the formation of legal consciousness and legal understanding in the process of adapting laws to the norms of the EU. The introduction of a hierarchy of legal professionals, including auditors, tax advisors, notaries, etc is also important.
Existing discrepancies between the Ukrainian Civil and Commercial Codes, especially with regards to the status of legal entities, contractual obligations and the protection of creditors (amongst others) hinder the formation of a free trade area. These shortcomings must be addressed, taking into account existing EU standards.
Particular efforts should be aimed at the development of Ukrainian corporate legislation, which at present is not as detailed as related provisions found in the EU acquis. Special attention must be paid to the prevention of corporate raider attacks (which also includes the protection of the rights of minority shareholder, increased control of corporate management and prevention of groundless withdrawal of assets).
Clear sets of rules for investors entering the Ukrainian market are also important. This could take the form of special concessions for international investors, particularly tax-breaks. These would be regulated by acts regarding state aid. It is important to guarantee transparency, efficiency and foresight in the sphere of investor protection.
The protection of creditor’s rights is another area of business activity which requires reform as currently there is no guaranteed protection under Ukrainian legislation. There have been numerous instances of bona fide creditors not being able to satisfy their legitimate claims because of ineffective bankruptcy procedure mechanisms used by the state service.
The activities of non-state pension funds, insurance companies, private investment funds and other financial projects, which handle the finances of citizens, must also be legally regulated according to EU standards. This sector is in fact overregulated which does not allow for the requisite amount of flexibility.
The public procurement market is not transparent enough which creates the precondition for abuses. Clear and understandable tender procedures, which will be under both government and public control, should be elaborated in complete accord with EU standards.
The public-private sector is another area of Ukrainian law, which requires further development. Of particular importance is the outsourcing of government services to the private sector and all that this entails (e.g. levels of government social responsibility in the private sector, the provision of public utilities etc.).
The current state of Ukrainian environmental regulation as well as the introduction of energy-saving technologies in Ukraine is far from European standards. Consequently, additional efforts are required in this field.
Despite the fact that Ukrainian consumer protection legislation is already close to EU directives, establishing effective control mechanisms in the field of consumers’ rights is still problematic. Ukraine must adopt measures to stop the inflow of low-quality foreign products. These products do not only, not meet the quality control standards of the EU, but they also damage the biosphere and natural environment.
As mentioned above, the first step in the entire process has been made. The next stages must focus on defining realistic future plans and strategies, for example:
- the formulation of structured approximation process plans, increasing the level of detail in existing plans and the setting of realistic deadlines for completion,
- The definition of an optimal algorithmic of legislative cooperation between all the governmental agencies, involved in the approximation process. This is of great importance because the implementation of the EU directives often requires a pre-implementation analysis of the existing legislation of various areas.
- Given the fragmented nature of EU law, interdepartmental cooperation is a top priority. It is important to identify both a coordinating body and process of development of approximated legislation.
In accordance to the Temporary Rules of Procedure of the Cabinet of Ministers of Ukraine, the sharing of expertise and even training activities are foreseen. In this regard, the Project is ready to share its independent expertise, which is based on a modern methodology.
A “Compatibility Clause” will have to become an integral part of legal drafting and such a clause will be indicative of conformity with EU law. A further “Financial, Economic, Environment and Employment Impact Clause” will also have to become an integral part of every stage of legal drafting. No legal act should come into effect without proper financial consideration. The Project team is prepared to share its expertise and is able to advise on both types of clause.
A ‘Comparative Table’ is another effective tool used to ensure transparency in the approximation process. Its purpose is to review and compare draft texts with EU laws. Although this process is difficult, it is an all important step in the decision making process. These tables have the complimentary effect of making information about EU law more widely available.
To fulfil its goal of European integration, Ukraine must take its ‘European Choice’ policy into account in every government program. This allows for the requisite level of financial and legal support of the adaptation process. Of course, financial issues should be solved gradually and according to resources available in the budget. To this end, the introduction of implementing measures will advance and enhance the legal approximation process.
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