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The Business Ombudsman Council provides recommendations to state bodies on the basis of individual cases and in accordance with published systemic reports. Here we have collected information on the implementation status of systemic recommendations only.

Report name
Issued recommendations
Execution status

SYSTEMIC REPORT "MAIN PROBLEMS FACED BY BUSINESS IN CUSTOMS SPHERE"

To develop a draft law on introducing amendments to the Code of Ukraine on Administrative Offenses of Ukraine by supplementing Chapter 12 of the Code of Ukraine on Administrative Offenses of Ukraine ("Administrative Offenses in the Areas of Trade, Public Catering, Services, Finance and Entrepreneurship") with an article to govern administrative liability of officers (officials) of customs authorities for violation of customs legislation, as well as to grant the power to issue protocols on such violations to the central executive authority tasked to implement the state regulatory policy, the policy on supervision (control) in the field of business activity, licensing and permit system in the field of business activity, as well as deregulation of business activity.

Ministry of Finance
Ministry of Justice

Not started - new recommendation

To develop and publish guidelines on procedures for declaring and controlling accuracy of customs value’s determination, including specification of the main stages of interaction between declarant and customs authority, as well as their rights and obligations (following the model employed in the UK Notice 252). Such an interpretation should be posted on the State Fiscal Service of Ukraine website or other official public sources.

Ministry of Finance

Not started - new recommendation
To develop and adopt an order, which would enable customs authorities and declarants to exchange documents issued in an electronic form (i.e., certified by declarants’ or authorized representatives’ electronic digital signature) with scanned copies of corresponding originals (if requested by customs authorities or provided by declarants’ on their own initiative) attached thereto.

Ministry of Finance

Not started - new recommendation

To prepare governmental draft Law of Ukraine introducing the following amendments to the Customs Code of Ukraine:

1.1. To supplement Paragraph 7 of Article 55 of the Customs Code of Ukraine to ensure that the general rule stating that validity period of guarantees issued by guarantors pursuant to Section X of the Customs Code of Ukraine “…shall not exceed 90 calendar days as of the date of the goods’ release” would not apply to financial guarantees issued in the form of a document.

1.2. To supplement Article 312 of the Customs Code of Ukraine with the provision stating that the validity period of a financial guarantee issued in the form of a document shall not exceed 365 calendar days after release of goods, provided that within 120 calendar days, following adoption of decision on customs value’s adjustment, a declarant would notify customs authority about its disagreement with such a decision.

1.3. To amend Article 314 of the Customs Code of Ukraine in order to harmonize eligibility criteria for parties entitled to grant financial guarantees to secure payment of customs duties with the current European practices (particularly taking into account provisions of Article 27 and Article 28 of the Convention on a Common Transit Procedure EU/EFTA).

Ministry of Finance

Not started - new recommendation

To introduce amendments to the Procedure for Refund of Advance Payments (Prepayment) and Erroneously and/or Excessively Paid Amounts of Customs Duties, approved by the Order of the Ministry of Finance of Ukraine dated July 18, 2017 No. 643, which would enable a declarant to attach to the application for refund of erroneously and/or excessively paid customs duties amounts a court decision rendering illicit or acknowledging unlawful decision or actions at the part of SFS authorities that led to (resulted in, caused) erroneous and/or excessive payment of customs duties (i.e., as an alternative to enforcement letter issued by a court and/or a court decision authorizing refund of certain amount of customs duties).

Ministry of Finance

Not started - new recommendation

To update the Explanation Letter, dated August 4, 2016 № 26593/7/ 99-99-19-01-01-17 or issue a new one or methodical recommendations for the customs to clarify the procedure for enforcing court decisions as well as decisions adopted within the framework of the administrative appeal procedure, approved in declarant’s favor. Due attention should be paid to the need to take into account not only the operative but also the reasoning part of the court decisions on the merits of the dispute. If a court decision were to find decision or action of the customs authority that led to (resulted in, caused) payment of excessive amount of customs duties as being erroneous or false – to state that such a language constitutes sufficient ground to proceed with the refund of overpaid sums of customs duties without initiating an additional judicial procedure.

State Fiscal Service of Ukraine

Not started - new recommendation

To ensure creation of a public electronic register of decisions on classification of goods, similar to practice employed in the EU. In the Council’s view, not only decisions adopted by customs authorities during customs clearance should be entered into such a registry, but also those ones adopted by the State Fiscal Service authorities during documentary inspections and (for the sake of comprehensiveness of registry information) court decisions adjudicating correctness of the classification of goods.

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

To issue Methodological Recommendations to ensure proper consideration by customs authorities of the existing case law on classification according to the relevant Ukrainian Classification of Goods for Foreign Economic Activity codes. Among other things such a document would have to establish that while conducting classification of goods under UCGFEA having the same, identical or similar characteristics, due attention should be paid to practice generated by both domestic courts as well as by the European Court of Justice.

State Fiscal Service of Ukraine

Not started - new recommendation

To prepare governmental Draft Law of Ukraine introducing amendments to Chapter 11 "Liability" of Section II “Administering Taxes, Duties, Payments" of the Tax Code of Ukraine and Chapter 67 "General Provisions on Customs Offence and Liability for Them" of Section XVIII “Customs Offence and Liability” of the Customs Code of Ukraine to eliminate the possibility of bringing individuals to liability if assignment of incorrect Ukrainian Classification of Goods for Foreign Economic Activity code resulted from actions conducted in good faith.

Ministry of Finance

Not started - new recommendation

To prepare and conduct educational training programs for the personnel of the State Fiscal Service of Ukraine on reasoning decisions on classification of goods by using examples from the practice of the European Court of Justice. Such trainings should be public (to the extent possible) to disseminate a uniform understanding of issues pertaining to classification of goods.

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

To prepare text of the governmental Draft Law of Ukraine on introducing amendments to Sections XVIII “Customs Offences and Liability" and XIX "Customs Offence Proceedings" of the CCU (or setting forth these sections in the new wording) aimed at ensuring balance, commensurability and fairness of liability for customs infringements, taking into account best practices employed in the EU, in particular, Proposal for a Directive No. 2013/0432/COD (draft). In particular, such Draft Law should provide for/contain:

a)    financial liability for legal entities that infringed customs rules during their business activity, - to be introduced as an alternative to administrative liability of their officials (or with a significant softening of the latter); 

b)    reference to a specific form of guilt (intention or negligence) as a mandatory element of each administrative offence; 

c)    sufficiently specified list of aggravating and attenuating circumstances (including, inter alia, status of Empowered economic operator; level of cooperation with the customs authority demonstrated in course of customs infringement’s investigation, etc.);

d)    lower and upper liability thresholds (in the form of the amounts of fines) for each article to make it possible to vary amount of fines depending on the circumstances of the case; 

e)    amounts of fines for infringing customs rules (which are established depending on the value of goods) to be brought in line with the indicative figures, specified in the Proposal for a Directive No. 2013/0432/COD (draft).

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

To elaborate and approve Inter-Agency Instruction on interaction of customs and law enforcement authorities. Such a document should, among other things, regulate (1) time limits for customs clearance, including liability (sanctions) for failure to observe such time limits; (2) restrictions with respect to the number of actions aimed at retrieving samples of the declarant’s goods; (3) communication between customs and law enforcement agencies in the course of such interaction.

State Fiscal Service of Ukraine
Ministry of Finance
Ministry of Internal Affairs of Ukraine
State Security Service of Ukraine

Not started - new recommendation

To develop and approve the mechanism for implementing the Resolution of the Cabinet of Ministers of Ukraine No. 479 “On Realization of Experimental Project Aimed at Creating Conditions Making It Impossible to Avoid Paying Customs Duties and Fees”, dated June 20, 2018 to ensure compliance with (1) Articles 338 and 558 of the Customs Code of Ukraine; (2) the Resolution of the Cabinet of Ministers of Ukraine No.467, dated May 23, 2012 “On Approval of the Exhaustive List of Grounds, Whose Existence is Required to Carry Out Examination (Re-Examination) of Goods, Commercial Transportation Vehicles by Fiscal Authorities of Ukraine”; as well as (3) the Order of the Ministry of Finance of Ukraine No.1316, dated December 12, 2012 “On Approval of the Procedure of Carrying Out Examination and Re-Examination of Goods, Commercial Transportation Vehicles”.

Ministry of Finance

Not started - new recommendation

In order to (1) place actions substantially similar to search outside the scope of customs examination procedure; and (2) narrow down powers of the law enforcers to demand from customs authorities carrying out such actions, - prepare governmental draft law on introducing amendments to Paragraph 2 Article 325 of the Customs Code of Ukraine to explicitly state that law enforcement authorities are not entitled to demand from persons that are transferring goods, commercial transportation vehicles through customs border of Ukraine carrying out operations, foreseen in paragraph one of this article (i.e., loading, unloading, reloading, fixing damaged packaging, unpacking, packing, re-packing, weighting along with the determination of other substantial characteristics of goods subjected to customs clearance, including taking samples of such goods, replacement of identification signs or marks on such goods or packaging thereto, commercial transportation vehicles as well as replacement of commercial transportation vehicles). Yet, such powers of the fiscal authorities shall remain in the effective wording of this article

Ministry of Finance
Ministry of Justice

Not started - new recommendation

To prepare amendments to the existing Draft Law of Ukraine No.4614 dated 06.05.2016 “On Introducing Amendments to the Customs Code of Ukraine to Ensure Protection of Intellectual Property Rights While Moving Goods Across Customs Border of Ukraine” No.4614 dated 06.05.2016; or to introduce an alternative draft law to ensure implementation in Ukraine of the requirements set forth in (i) Regulation (EC) No 608/2013 of the European Parliament and of the Council regarding customs enforcement of intellectual property rights; as well as (ii) Commission Implementing Regulation (EU) No. 1352/2013 establishing the forms provided for in Regulation (EU) No 608/2013, in particular:1.1.To bring the concept "goods infringing Intellectual Property Rights" in line with EU requirements, including exclusion of goods that are objects of so-called "parallel trade” from the substantial scope of this concept (in accordance with Clauses 3-5 of Article 1 of Regulation No. 608/2013);1.2.To set forth clear procedural terms, unified with European Union requirements, applicable within the procedure for suspending customs clearance of goods suspected of infringing IPR (as stipulated by Articles 3, 7, 9, 11-12, 17-18, 23, 26 of the Regulation No.608/2013);1.3.To improve the regulation of the procedure for destruction of goods, whose customs clearance has been suspended on suspicion of violating IPR, including laying down the "tacit consent” principle for their destruction in the absence of objections from a declarant or owner of goods; establishing a simplified procedure for the destruction of goods containing in small consignments (according to Articles 25 – 26 of Regulation No. 608/2013);1.4.To approve unified IPR protection measures related forms in accordance with European Union standards (as prescribed by Regulation No.1352/2013).

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

To implement Clauses 15.3 - 15.9 of the European Union Customs Blueprints, - in particular, to create a central IPR unit as a center of operational expertise under the State Fiscal Service of Ukraine.

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

To ensure existence of effective legal framework on governing mechanism of authorized economic operators, which would be consistent with the relevant European Union legislation, - to ensure prompt adoption of the Draft Law of Ukraine No.7473, whose provisions would, inter alia, foresee:1.1.Grounds for extension (or suspension) of 120-day time period for conducting assessment of compliance with Authorized Economic Operator eligibility criteria to enable requesting from a candidate (and corresponding disclosure) of additional documents and information - for instance, when additional information is required to ensure a comprehensive compliance assessment, whose disclosure requires significant time.1.2.That existence of a pre-trial investigation in a criminal proceeding should not, by itself, constitute a self-sufficient ground for suspending Authorized Economic Operator status (contrary to what was envisaged by the Draft Law of Ukraine No.4777).1.3.That while contemplating revocation of Authorized Economic Operator status due to infringement of customs rules, it is mandatory to ascertain existence of connection between the amount of losses (losses of the State/unpaid taxes resulting from such infringements) and total invoice value of goods that were moved by an entity across customs border of Ukraine during period of time employed by customs administration for conducting such a comparison.

Verkhovna Rada of Ukraine

Not started - new recommendation

To adopt a secondary legislative act (in the form of an order), which would establish the possibility and necessity (at least for the first two or three years while Authorized Economic Operator mechanism is being put into operation) to engage foreign specialists to train local personnel and actually conduct audits, required for granting Authorized Economic Operator status.

Ministry of Finance

Not started - new recommendation

To ensure openness of data about average time required for release of goods, taking into account methodology contained in the "Time Release Study" document of the World Customs Organization. The relevant data can be regularly published at the official website of the SFS of Ukraine. Along with the publication of this data, an interactive survey of companies should be carried out in terms of such data’s authenticity/acknowledgement.

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

To introduce a transparent system for evaluating the effectiveness of post-clearance audit of companies; based on which risk criteria for operations and/or enterprises should be continuously updated. The relevant statistics should be disclosed and provided on a regular basis (on quarterly and annual basis), according to the following indicators:i.the number of carried out audits; ii.total amounts of additionally imposed charges with a separate indication of the amount of so-called “agreed obligations”;iii.percentage correlation between the total number of inspections and audits where an additional charge was imposed in the amount exceeding certain indicator (this indicator may be set as a fixed UAH amount or as a percentage of the total amount of operations of the company that became the subject of an audit). The introduction of the relevant indicator will enable systemic assessment of post-clearance audit effectiveness, preventing small amounts from distorting overall figures;iv.percentage of audits (amongst the total number of inspections) where customs declarations were checked without physical examination of goods and/or seeking disclosure of additional documents and/or issuing decisions on classification of goods and/or adjustments of customs value;v.percentage of customs declarations whose clearance involved employing customs control measures in the form of physical inspection of goods and/or request for additional documents, making decisions regarding classification of goods and/or adjustments of customs value;vi.financial indicators demonstrating outcomes of customs control measures in the form of physical inspection of goods and/or request for additional documents, making decisions regarding classification of goods and/or adjustment of the customs value;vii.the number of cases launched for infringing customs rules;viii.the total amount of sanctions imposed to customs rules infringers following consideration of cases on infringement of customs rules;ix.percentage correlation between the total number of cases on customs rules infringement and cases where sanctions were imposed on infringers.

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

In order to control the declared customs value, ensure functioning of the system of interaction between fiscal authority and a declarant, where all information exchange will be carried out in electronic form. It appears it might be achieved by introducing changes to the respective software of the State Fiscal Service of Ukraine.

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

To ensure a gradual switch of customs value control from customs clearance to post-clearance audit stage, save when fiscal authority has reasonable doubts (to be justified by the respective criteria) about ability to collect amounts of additionally imposed charges in the future. For instance, use of risk-oriented system based on score-ranking method is advisable vis-à-vis entities incorporated shortly before customs clearance, where managers/owners have changed or have been brought to criminal or administrative liability. It appears that initially such a switch of control could be determined in methodological recommendations (letters) issued by the State Fiscal Service of Ukraine and/or the Ministry of Finance of Ukraine followed by introducing respective amendments to the Customs Code of Ukraine.

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

To update software employed for communication between the State and declarants. Based on successful examples of other countries – to ensure functioning of a single, up-to-date online system that would maximize automation of relevant iterations, simplify declaring procedures and ensure transparency.

Ministry of Finance
State Fiscal Service of Ukraine

Not started - new recommendation

SYSTEMIC REPORT "GETTING ACCESS TO ELECTRICITY"

To file a hook-up application in electronic form as an option.

National Energy and Utilities Regulatory Commission

Implemented
— comments: In accordance with the clause 4.4.1 of the Code on Distribution Systems, a hook-up application, together with copies of documents attached thereto, shall be submitted by the Customer either in person or by registered mail, or electronically through the official website of the DSO (Distribution System’s Operator) via Internet with the use of electronic digital signature in accordance with the procedure established by law or using other electronic services offered by the DSO.

To simplify the requirements of the documentation on placement of the customer’s electrical facilities, which shall be attached to its hook-up application, excluding the necessity to attach the detailed replication from the topographical and geodetic plan at a scale of 1:2000 indicating the location of the power facility, land plot or planned connection point.

National Energy and Utilities Regulatory Commission

Implemented
— comments: In accordance with the clause 4.4.2 of Section 4.4 of the Code on Distribution Systems, only the general "replication from the topographical and geodetic plan or building plan indicating the location of the land" shall be attached to the hook-up applicati

To expand the ways of confirming the customer’s legal rights to its facility or a respective land plot on the basis of the extract from the Registry of Real Rights in Immovable Property, obtained via the e-service cabinet.

National Energy and Utilities Regulatory Commission

Implemented
— comments: In accordance with the clause 4.4.2 of Section 4.4 of the Code on Distribution Systems, either a copy of the document confirming the ownership or use of the respective object, or a copy of the extract from the Registry of Real Rights Over Immovable Property, or, in the absence of the respective object, a copy of the document confirming the ownership or use of the land plot or a copy of the extract from the Registry of Real Rights Over Immovable Property shall be attached to the hook-up application.

To move towards fixed rates for getting hooked up to electricity, with the cost calculation to be based on the quantity of power capacity declared by the customer. This transfers the requirement to prepare a project design to the power utility, which relieves the customer from the obligation to seek technical conditions for getting hooked-up to electricity from the utility company.

National Energy and Utilities Regulatory Commission

Implemented
— comments: There is a final (but not yet approved with the Energy Community) Draft Methodology (order) for the formation of the fee for hooking-up to transmission and distribution systems.

Design documentation shall be prepared by the power utility without issuance of technical conditions to the customer

National Energy and Utilities Regulatory Commission

Implemented
— comments: According to the clause 4.6.2 of the Code on Distribution Systems in the case of standard and non-standard “turnkey” hook-up, the development of design and appraisal documentation for the electrical installation of external power supply is carried out by the DSO (and includes an input device with a switching device).Meanwhile, the technical specifications contain requirements for engineering maintenance in the customer's networks and, accordingly, the design and construction thereof shall be ensured by the Customer; the terms of reference (technical task) contain the requirements for engineering maintenance in the DSO networks and, accordingly, their design and construction shall be carried out by the DSO.

To simplify the process of approving project documentation by power utility with various third parties by establishing fixed terms for securing such approvals (with the cost calculated based upon the power capacity declared by the customer and implementation of a “silent (implied) consent” mechanism, including the liability of the power utility for any failure to observe such terms, calculated as a percentage of the total cost of getting hooked up, which should be reimbursed to the customer.

National Energy and Utilities Regulatory Commission

Implemented
— comments: Clauses 4.2.4, 4.3.3, 4.5.6 of the Code on Distribution Systems set forth as follows:Time limits for the preparation and issuance by the transmission organization of the draft hook-up agreement and the signed technical specifications, which are an integral part of the hook-up agreement (no later than 10 working days from the day of the customer's hook-up application regarding the electrical installation and 20 working days, if it is necessary to agree them);the deadlines for the provision of the standard connection service for the electrical installations of the first-to-third power levels (20-30 calendar days from the date of payment by the customer to the transmission organization of the hook-up fee in accordance with the hook-up agreement);the deadline for the provision of the non-standard hook-up service ("turnkey") (120-350 calendar days).The hook-up agreements, which are integral Annexes 1 and 3 to the Code on Distribution Systems, Section 5 thereof establishes the liability of the DSO in the event of the breach of its obligations under the hook-up agreement.

To improve the current practice of allotting land plots required for constructing and operating power networks through wider use of a land servitude mechanism: for land plots that are in communal ownership - not requiring a servitude agreement to involve a decision by vote during a session of the local council, but accepting as sufficient the signature of authorized officials, such as the mayor, the land department manager, and the council secretary, ensuring that general grounds for termination of land servitude agreement32 may, in certain cases, not apply to servitudes executed for the placement of electrical facilities.

Ministry of Energy and Coal Industry

In process
— comments: To date, the Parliament continues working on the Draft Law of Ukraine "On Amendments to the Land Code of Ukraine and Certain Legislative Acts of Ukraine regarding the Issuance of Rights to Land under Energy Sector", registered under the number 6255, dated 28 March 2017, seeking improvement of the current legislation in the field of establishment of the land servitude on energy lands. Current status: "30 March 2017 - Submitted for review":http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61448

To hook up a customer’s power unit to power network pursuant to contract only (without filing a separate application).

National Energy and Utilities Regulatory Commission

In process – requires additional research
— comments: Currently, the Retail Market Rules are approved, and this issue is better to be foreseen in this document.Meanwhile, the new market suggests that the use of electric power is possible in the presence of two contracts, namely, the agreement on the power distribution, concluded between the supplier and the operator of the distribution system, as well as the agreement on the power supply, concluded between the supplier and the customer.

To change the moment of signing the supply agreement based on whichever of the following takes place later: commissioning the outside power supply unit or the customer putting its facility into operation.

National Energy and Utilities Regulatory Commission

Recommendation is no longer relevant
— comments: Due to the effect of "unbundling" rules, the owner of the utility networks (i.e. oblenergo) may not necessarily be a "power supply organization".

To hook up a customer’s power unit to power network pursuant to contract only (without filing a separate application).

Ministry of Regional Development, Construction and Residential Services

In process
— comments: In accordance with the Section 3 of the Code on Distribution Systems, the DSO/oblenergo implements long-term planning for the development of the distribution system, including conducting all the necessary researches and assessments/forecasts. For this purpose, the DSO develops a DSO Development Plan, which is to be submitted for approval to the Regulator in accordance with this Code.The DSO Development Plan is a document that contains the planned items of new construction, reconstruction and technical re-equipment of the distribution system for the next 5 calendar years, with the definition of the required amount of investment and the timing for the implementation of the relevant measures.Therefore, we assume that the electrification of a certain territory may be included to the DSO development plan.

To streamline tender procedures conducted by natural monopolies through wider use of framework contracts.

National Energy and Utilities Regulatory Commission

Not started
— comments: The BOC does not have any information on the actions of the NEURC, aimed at optimizing the criteria and timing of procurement procedures for subjects of natural monopolies due to the widespread use of framework agreements.

SYSTEMIC REPORT "PROBLEMS FOR BUSINESSES AS A RESULT OF THE MILITARY SITUATION IN THE EAST OF UKRAINE AND THE ANNEXATION OF CRIMEA"

To fulfil all financial commitments to businesses whose employees were mobilized for a “specified term” of the ATO by compensating them the average salary of such employees for the entire period starting from 27 March 2014, when Law No.1169-VII was adopted.

Cabinet of Ministers of Ukraine

Implemented
— comments: The CMU by its Resolution No.911 dated 4 November 2015 improved the procedure of payment a compensation to enterprises, institutions, organizations within an average salary of employees that were mobilized for a “specific term” of ATO.

To amend the Law “On the 2015 State Budget of Ukraine” and provide the necessary expenditures to compensate businesses for 2014 and to fully reimburse them for expenses in 2015. Given the number of mobilized individuals, the amount of budget funds required to cover the arrears for 2014 is UAH 1.6bn, while an additional UAH 955mn is needed to completely cover this compensation in 2015.

Ministry of Social Policy
Ministry of Finance

Implemented
— comments: The Law of Ukraine "On the 2015 State Budget" No.80-VIII dated 28 December 2017 stipulates a new budget program under the code 2501350 “Compensation to enterprises, institutions and organizations within an average salary of employees called up to serve in the military during mobilization period for a specified term.
To institute targeted payments to mobilized employees by: setting up a single register to track budget payments to employees mobilized for a specified term;- establishing electronic exchange of information among he State Fiscal Service, the Pension Fund, the Ministry of Social Policy and the Ministry of Defence; working on the issue of organizing a bank account set-up for such payments.

Cabinet of Ministers of Ukraine

Implemented

To revise the criteria used as a basis for including a commercial entity on a given list. Some of the criteria presented in the Procedure for being entered into the list and the priority for reviewing such applications leave room for corruption because of the possibility of variously assessing how well the entrepreneur meets the criteria. In particular, the Procedure should clearly state: - what state agency’s assessment regarding the applicants lack of links to terrorist activity is necessary and sufficient to be included in the list; - clear, quantitative parameters for determining an organization’s social and export orientation.

Cabinet of Ministers of Ukraine

Implemented

To get the state agencies that coordinate the process of crossing the border — SBU, MIA and SFS — to establish the timeframes and procedure for getting approvals from line ministries for special permits: a list of documents needed, timeframes, a clear series of steps the business entity must take in order to receive special permits and transport goods (freight) across the line of contact. This requires a specific list of line ministries that approve and issue such special permits.

Cabinet of Ministers of Ukraine

Implemented
— comments: The CMU issued the Resolution "On Approval of the Procedure for transportation of goods to the area or from the area of Anti-Terrorist Operation" No.99 dated 1 March 2017 ("Resolution No.99"). The Resolution No.99 settled issues of documents that are necessary for the enterprises to include them into the relevant list of enterprises, which carrying out the transportation of goods, as well as timeframes of consideration of such documents.
To improve the current system of issuing permits for transporting goods (freight) using a “one-stop-shop” approach, where the responsible state agencies can review the necessary information using available registers from various agencies, thus both saving time and reducing the risks of corruption connected with the issuing of such permits

Cabinet of Ministers of Ukraine

Implemented
To revisit the decision and lift the moratorium on the movement of any Ukrainian-owned boxcars — many of which were loaded before the ban came into force — for which the owners have confirmation documents.

PJSC Ukrzaliznytsia

Implemented
To establish a joint Commission with the Ministry of Infrastructure, the SBU, the Customs Service, in order to resolve the issue of ensuring the security of cargo crossing the nominal border with occupied Crimea, and to set up procedures for verifying the content of loaded boxcars pending crossing the border with mainland Ukraine.

PJSC Ukrzaliznytsia
Ministry of Infrastructure
SSU

Implemented

SYSTEMIC REPORT "PROBLEMS WITH CROSS-BORDER TRADING IN UKRAINE"

To amend the Law of Ukraine “On the Scrap Metal” which regulates export and import, to streamline procedures and improve the economic and legal provisions related to operations with scrap metal.

Ministry of Economic Development and Trade

In process
— comments: Part one of Article 9 of the Law of Ukraine “On the Scrap Metal” regarding obligatory registration of contracts (agreements, treaties) for the export of scrap metal was excluded based on the Law No.1455-VIII dated 12 July 2016. On 17 January 2018, the Draft Law No.7497 "On Unshadowing of the Market of Metallurgical Raw Materials (on amendments to certain legislative acts concerning operations with scrap metal)" was registered with the VRU. Current status - in the committee.
To bring legislation on quota allocation of the scrap metal in line with Ukraine's WTO commitments and obligations connected to the implementation of the DCFTA schedule.

Ministry of Economic Development and Trade

Not started
— comments: In September 2016, the President of Ukraine signed the Draft Law No.3868 "Proposals of the President to the Law "On Amendments to Article 13 of the Law of Ukraine "On Foreign Economic Activity" Regarding Reduction of Shortage of Ferrous Metals on the Domestic Market", which imposes additional export duties on ferrous metal scrap.On 1 August 2017, the President of Ukraine signed the law on prolongation of the increased export duty on ferrous metal scrap adopted by the VRU on 13 July 2017, at the rate of EUR 30/t (earlier EUR 10/t) for one more year. The foregoing is contrary to the principles of the WTO and Ukraine-EU Deep and Comprehensive Free Trade Agreement.
To reconsider the approach to setting scrap metal export volumes to reflect industrial needs for scrap metal among iron and steel enterprises based on reliable statistical data for steel production in the previous year, projections for the current year and a detailed analysis of scrap metal consumption on the domestic market.

Ministry of Economic Development and Trade

Not started

To distribute scrap metal volumes based on supply and demand in accordance with the number of applications for export quotas from domestic enterprises.

Ministry of Economic Development and Trade

In process
— comments: According to CMU's Resolution dated 20 December 2017 No.1018 "On approval of the list of goods, the export and import of which is subject to licensing, and quotas for 2018", the quota for exports of scrap metal has not been introduced.
To increase export levels whenever domestic iron and steel enterprises are fully supplied and excessive surpluses of scrap metal build up.

Ministry of Economic Development and Trade

Not started
To change the collegial approach to quota allocation currently used by the MEDT, using auctions as an alternative. Auctions can ensure minimal intervention by the regulator in the quota distribution process. Should the quota system be further used for scrap metal exports, reconsider the approach to forming the responsible Commission in the Ministry. Amend the current regulatory framework and establish public, clear and competitive procedures and rules for the allocation of export quotas for scrap metal.

Ministry of Economic Development and Trade

Not started
— comments: Based on the need of ferrous metals scrap, the CMU has the right to introduce a quota regime or a complete ban on its export. This provision does not apply to export of scrap and iron-and-steel waste to countries with which Ukraine has the relevant mutual international obligations.
To amend Cabinet Resolution No.155 dated 15 February 2002: To draw up an exhaustive list of grounds for refusal to register export contracts to avoid any abuse of powers by MEDT officials and misinterpretations of regulatory norms; To set a time limit for the Ministry to decide on the registration of export contracts; To introduce a procedure to appeal a negative decision; To establish clear deadlines for re-registering export contracts in case of fluctuations in the world market, as provided in Para. 11 of the Cabinet Resolution.

Ministry of Economic Development and Trade

Recommendation is no longer relevant
— comments: The Government abolished the registration of contracts for the export of scrap metal by the CMU Resolution No.1035 dated 28 December 2012 (the CMU Resolution No.155 dated 15 February 2002 has lost its effect).
To prevent possible violations by unfair market players by no longer hand managing the business reputation of applicants; monitor international contracts by exchanging relevant information with the State Fiscal Service, including Customs.

Ministry of Economic Development and Trade

Not started
To study the requirements for obtaining formal conclusions on the classification of scrap metal, such as the Green List of waste materials prepared by the Trade Ministry in cooperation with the Environment Ministry. Provided that it does not contradict the Basel Convention on the Control of Cross-border Transportation of Hazardous Wastes and their Disposal, abolish the requirement for exporters to arrange such a certificate.

Ministry of Economic Development and Trade

Not started
To draft and adopt the new edition of the Law “On Foreign Economic Activities” to reflect modern trade regulation trends and WTO commitments, and to cover all necessary provisions of EU acquis communautaire, in particular: To bring the law fully in line with WTO agreements and EU requirements, which should increase access to global markets: (a) simplifying formalities and procedures; (b) harmonizing applicable laws and regulations; (c) applying international agreements; and, (d) making a commitment to regulatory cooperation. To change the regulations for foreign trade, export/import licenses and protection measures in accordance with WTO rules and regulations. For instance, licenses should be required only for the import or export of goods that effect public security, the life and health of individuals, animals and plants and so on, in accordance with the definitions used by the EU. Based on stakeholder consultations, to reduce (a) the number of cross-border trade operations subject to licensing and (b) the number of commodity groups subject to restrictions or limitations as to export or import. To implement methods for export-import quota administration according to best practices and WTO recommendations: First-Come, First-Served; Auction Quota Rights; Give Away Quota Rights.

Cabinet of Ministers of Ukraine
Ministry of Economic Development and Trade

In process
— comments: In December 2017 the Draft Law "On protection of Ukrainian exporters" (On amending the Law of Ukraine "On Foreign Economic Activity") aimed at the liberalization of foreign economic activity was registered at the VRU under No. 7365 and henceforth was submitted for consideration at the first reading. The Draft Law was developed by a joint Working Group, which included representatives from leading national business associations, USAID, UkraineInvest and the BOC.
To reduce direct contact with applicants and the number of documents that must be submitted to obtain permission for export-import. Streamline the application process in favour of using e-information in state databases instead of hard copy documents.

Ministry of Economic Development and Trade

Not started

To publish a consolidated Official List of Goods Subject to State Export Control Service on the official website of the State Export Control Service. The Service must ensure that the List is updated regularly.

Ministry of Economic Development and Trade
State Export Control Service

Implemented
— comments: In 2017, the Export Control Service has harmonized all changes to the Single List of Dual-Use Goods subject to Export Control, which in its structure corresponds to the List of Dual-Use Items of the European Union, given in Annex I to the Council Regulation (EC) No.428/2009 dated 5 May 2009, setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items.
To ensure that the State Export Control Service complies with timeframes for state reviews and consideration of documents. To achieve this goal, complex measures can be recommended, together with the MEDT, including: introducing an integrated e-system of document flow to streamline the review process. The MEDT, as the supervisory body, can control timeframes; implementing the practice of having the causes of each delay in a state review justified before the supervisory body; applying fines to responsible managers based on monitoring by the Ministry.

Ministry of Economic Development and Trade
State Export Control Service

In process
— comments: According to the letter of the State Export Control Service dated 26 March 2018, the latter is taking measures to develop and implement an electronic licensing system, during the use of which the applicant will oversee the status of the application and the timeframes of its consideration.

To organize the system of state evaluations of goods subject to export control in a way to optimize costs, resources and time for businesses. Businesses should have access to licensed expert organizations on the territory of Ukraine. The State Export Control Service should ensure the optimal infrastructure for dual-use goods evaluations, which includes (a) licensed expert organizations in export control for all types of dual-use goods, (b) information on the official web-page, (c) awareness-raising events for the business community that engage in foreign economic activity involving dual-use goods.

Ministry of Economic Development and Trade
State Export Control Service

In process
— comments: The list of expert organizations that have the authority to carry out activities related to the preliminary identification of goods in the field of state export control is posted on the official website of the State Export Control Service.Awareness-raising events for the business community that engage in foreign economic activity involving dual-use goods is carried out during seminars and conferences, as well as within the framework of the “hotline”.
To draft comprehensive User Guide on Strategic Goods and Services and have it adopted by the State Export Control Service. The guide should include: (i) a description of special international regimes; (ii) an outline of the regulatory base; (iii) a list of authorized agencies; (iv) a description and categories of special goods; (v) the policy and regulations on the export, import and transit of special goods; (vi) a detailed description of licensing procedures, and so on.

Ministry of Economic Development and Trade
State Export Control Service

In process
— comments: According to the letter of the State Export Control Service dated 26 March 2018, at present the State Export Control Service is drafting amendments to the relevant Procedures required in connection with the adoption of the Single List of Dual-Use Goods.

To develop a special section in the new edition of the Law “On Foreign Economic Activity” that follows WTO rules, EU legislation, and best EU practice at the national level: To publish information on penalties and sanctions. This information should include the penalties and sanctions that apply, the reason for such penalties and sanctions, the responsible authority, and when and how payment is to be made; To shorten the grounds for applying sanctions and review the variety of such sanctions, where practicable; To limit specific penalties and sanctions in connection with foreign trade to the approximate cost of the services rendered in connection with a specific import or export operation; To the penalty imposed should depend on the facts and circumstances of the case and should be commensurate with the degree and severity of the breach.

Ministry of Economic Development and Trade

Implemented

As a short-term solution: To develop working mechanisms to immediately notify companies about special sanctions imposed against them. The mechanism of mediation should be foreseen prior to the application of special sanctions, which can include any explanations and/or objections regarding the alleged violations. To approve a clear minimum materiality threshold for failure to comply with Laws and Regulations on foreign trade activities and formalize this through an executive Order. To reduce the maximum timeframe for reviews of individual licensing applications to any rationale number of working days, reflecting the types of foreign trade activity. To delegate individual licensing responsibilities from the Ministry to its regional offices.

Ministry of Economic Development and Trade

Implemented
To repeal CMU Resolution No.724 dated 16 September 2015, by which the State Customs is empowered to apply indicative benchmarks to import customs value arbitrarily.

Cabinet of Ministers of Ukraine

Implemented
— comments: The CMU Resolution No.724 dated 16 September 2015, was declared invalid by the CMU Resolution No.686 dated 5 October 2016.
To adopt amendments to the Customs Code to implement post-clearance control procedures. The main idea is to transfer control from the customs declaration stage to the stage after the release of goods for free circulation.

State Fiscal Service of Ukraine

In process
— comments: The CMU has submitted to the VRU the Draft Law "On amendments to the Customs Code of Ukraine (regarding certain issues of the implementation of Chapter 5 of Section IV of the Association Agreement between Ukraine, on the one hand, and the European Union, on the other hand"), registered on 29 December 2017, No.7473, which, in particular, provides for the introduction of a new form of control - post-clearance control.
To update the list of cases when the customs authorities may have concerns regarding the accuracy of declared customs value (DCV). In case the customs officer requires additional consultations regarding the customs value of goods, the information source has to be single and clear. In case the customs officer has doubts, he must justify causes of these doubts based on documental evidence.

State Fiscal Service of Ukraine

Not started
To reduce the number of inspections during customs control and clearance of goods in the national system of customs standards; strengthen the role of risk management and post-audit control.

State Fiscal Service of Ukraine

Not started
To provide regular training for customs officers in order to improve their capacity for customs valuation. It is critical that Customs officials develop an in-depth understanding of the methods of goods valuation and be able to apply official recommendations and clarifications from the World Customs Organization.

State Fiscal Service of Ukraine

In process
— comments: Improvement of the qualification of SFS customs officers is carried out in accordance with the Guideline on professional development of the SFS officials (seminars, trainings, training courses, lectures, round tables, practical classes).
To reload the post clearance control system in Ukraine and provide effective coordination, planning, implementation and execution of the procedure according to Arts. 345-354 of the Customs Code, put in place the appropriate database, audit schedule, tracking system, and so on.

State Fiscal Service of Ukraine

Not started
— comments: It should be noted that revival of this way of customs control is scheduled for 2018, in accordance with the Customs Reform Action Plan (Direction 14), developed by the Ministry of Finance.
To prepare and adopt a Law on compensation for damage caused by the unlawful actions of customs officials, to strengthen the role of administrative pre-trial settlement of disputes and prevent the abuse of power.

Cabinet of Ministers of Ukraine

In process
— comments: Draft Law No.3763 dated 13 January 2016 "On the National Customs Service of Ukraine" provides for criminal, administrative, disciplinary and civil liability of officials guilty of violating customs legislation. Current status - pending review.

SYSTEMIC REPORT "PROBLEMS WITH ADMINISTERING BUSINESS TAXES IN UKRAINE"

To eliminate the requirement of depositing the balance of VAT accounts with operational cash from the Tax Code due to its’ non-compliance with the best international practices and harmful effect for the day-today activities of the taxpayers. Thus, VAT electronic administration shall cease to be employed as a tool for replenishing state budget through cash advances and start performing its core administrative function.

State Fiscal Service of Ukraine
Ministry of Finance

Recommendation is no longer relevant
— comments: Respective amendments were proposed by the BOC during the discussion of amendments to the Tax Code of Ukraine in December 2015. However, the proposals were not approved by the Ministry of Finance.
To ensure proper technical functioning and maintenance of the VAT electronic administration system. Manual control and unauthorized intrusion into the system, resulting, inter alia, in a questionable "losses" of VAT invoices, refusals to register VAT invoices due to "state 9", etc., shall be eliminated. Same approach shall be employed in relation to those instances, when the records in the VAT return and the VAT administration system do not reconcile. This can be achieved, inter alia, by introducing personal disciplinary, administrative and financial liability of the officials of the tax authorities. In addition, the Tax Code shall be amended to provide for financial liability of third-party entities providing technical maintenance and support of the electronic administration system (for instance, sanctions shall be imposed if the taxpayer is unable to register VAT returns due to inaccessibility of the system or its' failure).

State Fiscal Service of Ukraine

In process
— comments: Implementation of the Law No.1797 dated 21 December 2016 "On Amendments to the Tax Code of Ukraine to Improve the Investment Climate in Ukraine" is still in process of its' eventual implementation. It is aimed at simplifying tax administration and is an important part of the reform of the SFS. This is a joint work of the VR deputies, experts and business representatives dating back to the last year.
To ensure that the local tax authorities are trained and prepared to effectively support the taxpayers with all kinds of issues arising in connection with the implementation of VAT electronic administration. Besides, the State Fiscal Service shall promptly collect information about typical problems arising in connection with the VAT electronic administration followed by the practice of issuing formal clarifications.

State Fiscal Service of Ukraine

In process
— comments: This recommendation has been discussed many times during the meetings between the BOC and the SFS. Although, the SFS provides taxpayers with explanations of the most typical problems, the local tax authorities are usually not ready to effectively support taxpayers for all types of issues arising from the functioning of the electronic system of VAT administration.
To ensure stability of respective laws and regulations, once the deficiencies in the VAT electronic administration functioning are eliminated, so that they will remain unchanged (or significantly unchanged) for a significant time. If the sense of predictability is achieved, it would enable the taxpayers to plan their activities accordingly and significantly decrease administrative expenses covering the cost of adjustment to the new rules and regulations.

Ministry of Finance
State Fiscal Service of Ukraine

In process
— comments: Although significant part of deficiencies of the electronic VAT administration system was eliminated during 2015-2017, the system still needs to be periodically updated (for example, to correct methodological mistakes or to keep records of other shortcomings). At the moment, another set of amendments is being discussed by the working group at the Ministry of Finance.
To implement a transparent, informative and user-friendly interface of the electronic record system aimed at providing taxpayers with the information on the status of their VAT accounts. This could be implemented via a single electronic office of the taxpayer. Such electronic office shall provide comprehensive information to the taxpayer, so that the taxpayer could reconcile the information in the electronic administration system with the records of the VAT reports. It shall be ensured that the records made in the system cannot be changed manually. Besides, it shall also not only indicate the threshold amount calculated according to the prescribed formula, but also clearly itemize the algorithm of formation of the computed elements of the formula.

State Fiscal Service of Ukraine

Implemented
— comments: In 2017, the SFS and the State Treasury of Ukraine implemented the transparent, informative and user-friendly interface of the electronic record system aimed at providing taxpayers with the information on the status of their VAT accounts. Such electronic office provides comprehensive information to the taxpayer, so that the taxpayer is now enabled, albeit not to the full extent, to reconcile the information in the electronic administration system with the records of the VAT reports.
To make enforceable in practice, the mechanism to return the excessive balance on the taxpayer's VAT account. In particular, there shall be no delays in communication between the tax authorities and the State Treasury regarding return of such excessive balance upon the taxpayer's request. This can be achieved, inter alia, by introducing personal disciplinary, administrative and financial liability of the officials of the tax authorities (for instance, in case of their failure to timely provide the State Treasury departments with the necessary information).

State Fiscal Service of Ukraine

Implemented
— comments: See the Law No.1797 dated 21 December 2016 "On Amendments to the Tax Code of Ukraine to Improve the Investment Climate in Ukraine".
The Tax Code shall provide for an effective procedure of administrative appeal (please see Section "Administrative appeal" for details) whereby the supervising tax authorities will monitor compliance by the lower-level tax authorities with all VAT refund procedures.

State Fiscal Service of Ukraine

In process
— comments: On October 21, 2015, the Ministry of Finance has issued the Order No.916 "On approval of the procedure for registration and filing of complaints by taxpayers and their review by the controlling bodies".In particular, in accordance with the Order No.916, the review of the complaint materials in a closed meeting takes place with the participation of the authorized representative of the BOC; the BOC has the opportunity to file its own objections.However, the administrative appeal procedure needs further improvement.
To amend the Resolution of the CMU No.39 dated 17 January 2011, as well as Joint Order of the State Fiscal Service of Ukraine and the State Treasury of Ukraine No.68/23 dated 3 February 2011, to clearly state that the state treasury departments shall promptly pay to the taxpayer the VAT refund confirmed by a valid court ruling and with no further confirmation from the tax authorities.

State Fiscal Service of Ukraine

In process
To amend the Tax Code to set out a clear procedure for calculation and payment of penalties imposed for late VAT refund. It shall be clearly stated in the Tax Code that the amount of penalty shall be paid to the taxpayer irrespective of the fact of its' receipt of reconciled VAT refund.

Ministry of Finance
State Fiscal Service of Ukraine

Recommendation is no longer relevant
— comments: The relevant amendments were proposed by the BOC during the discussion of amendments to the Tax Code of Ukraine in October-December 2016. However, the proposals were not approved by the working group at the Ministry of Finance.
To amend the Tax Code to provide for personal disciplinary, administrative and financial liability of the officials of the tax authorities for unlawful delays with processing VAT refunds.

Ministry of Finance

In process
The State Budget of Ukraine shall reflect consolidated VAT amount (i.e., the difference between the income from VAT and expenses for VAT refund). For this purpose the Budget Code of Ukraine shall be respectively amended. In our view, if implemented, such an approach would allow overthrowing traditional argumentation of the tax authorities that VAT refund is effectively limited by the limits foreseen in the State Budget.

Ministry of Finance

In process
— comments: Although the objective for which this recommendation was issued has been seemingly achieved (i.e., current VAT is properly refunded), - further analysis is required whether suggested approach to reflect consolidated VAT amount with the State Budget is actually adhered to in law and practice.
It could be expedient to officially recognize the VAT refund amounts due to businesses as internal state debt. Such state debt shall be subject to restructuring according to mechanisms amicably agreed in negotiations between the tax authorities and businesses. The selection of the mechanisms should be flexible enough to allow restructuring with the account of specifics of particular case and business.

Ministry of Finance
State Fiscal Service of Ukraine

In process
— comments: The launch of the automated registry of VAT refund is foreseen by the Law No.1797 dated 21 December 2016.On 17 January 2018, the CMU adopted a draft law governing VAT refund to tax payers that filed their refund applications prior to 1 February 2016, though failed to be refunded from the state budget.Additionally, the draft law governs the issue of the VAT refund claimed for recovery before February 1, 2016, but denied by the SFS as of 1 January 2017 (the taxpayers were not entitled for budget refund) and in respect of which the court decision to grant budgetary refund to the tax payer has become effective.Thus, the draft law will ensure fair conditions for the tax payers during the period of referring to the provisions of the Tax Code on the matters of VAT refund from the state budget according to applications registered within the Temporary Registry and on applications in terms of which the administrative and court proceedings have been completed.
To revise the Procedure of Taxpayers’ Record Keeping to significantly narrow down the scope of discretionary power currently vested with the tax authorities. In particular, the following amendments are worth being considered: the grounds for launching verification of the tax payers’ location by the tax authorities shall be limited to include only limited and specific number of instances to be directly envisaged in the legislation (for instance, during a tax audit of a taxpayer deemed to be in violation of its duties); if the information on the taxpayer’s location is properly confirmed through the State Registrar, this should be regarded as the sufficient proof for tax authorities; moreover, in this case tax authorities shall not be entitled to carry out such verification for certain reasonable period of time (for instance, one year).

Ministry of Finance
State Fiscal Service of Ukraine

Implemented
— comments: Commencing March 2016, the fiscal authorities are no longer entitled to issue the form 18-OPP (notice on the absence of legal entity at its location).Respective provisions have been excluded from the Procedure for Taxpayer Registration pursuant to the Order of the Ministry of Finance No.375 dated 18 March 2016.
To ensure proper and effective control over regulatory practices employed by the local tax authorities, especially when they did not comply with the procedures, envisaged by the Procedure of Taxpayers' Record Keeping. Strict compliance therewith shall be ensured through personal liability of the officials of the tax authorities for malpractice.

State Fiscal Service of Ukraine

In process
— comments: Local control agencies are vested with servicing functions only; whereas the control is transferred to the MD SFS.The procedure for holding liable remains difficult to apply, enabling the officials to evade disciplinary liability.
To perform tax audit procedures in strict compliance with the established "audit tests" (i.e., clear guidance on "what and how" shall be audited). Such tests are expected to be developed as part of the deregulation process currently implemented by the Ministry of Economic Development and Trade of Ukraine. The practice of guidance by internal regulations issued by the State Fiscal Service which are not available to public shall be eliminated.

State Fiscal Service of Ukraine

Not started
To apply and interpret tax laws and regulations with the due regard being given to common court practice shall be communicated by the State Fiscal Service of Ukraine to the tax authorities of all levels. The practice when, despite existence of similar cases (or even regarding the same taxpayer) the tax authorities continue embarking upon questionable argumentation which have been routinely assessed by courts in the taxpayer's favour, shall be eliminated.

State Fiscal Service of Ukraine

In process
The administrative appeal procedures available to the taxpayers willing to challenge the results of the tax audits shall be effective and time-efficient, rather than formalistic as it often appears to be (please see Section "Administrative appeal" for details). While appointing and performing the tax audit, the tax authorities shall strictly comply with the procedures prescribed by the law, and the supervising authorities shall ensure such compliance in an effective manner. The Tax Code shall be amended to specify particular sanctions to be imposed on the officials of the tax authorities for procedural and other violations during appointment and performance of the tax audit. Such sanctions shall be personalized and variable (from reprimand to dismissal and fine) depending on the degree of violation by the particular official.

Ministry of Finance
State Fiscal Service of Ukraine

In process
— comments: Although this recommendation has been discussed repeatedly, the extent of its' practical implementation remains quite limited.
Instances of abuse of power by the tax authorities in launching criminal proceeding based on the results of the tax audit or against the taxpayer's officials shall be eliminated. Prevention of fraud and malpractice in the course of launching and performing of tax criminal investigations could be guaranteed by "checks and balances" system and personalized liability of the tax authorities' officials. The BOC will address these issues in its systemic report for the forth quarter of 2015 on abuses of criminal procedural law by law-enforcement agencies.

State Fiscal Service of Ukraine

Implemented
— comments: In 2016, the Methodological Recommendations were amended respectively. The number of criminal proceedings has generally decreased. Only in rare cases the criminal proceedings are initiated before the administrative appeal procedure completed.
To forbid the tax authorities to initiate criminal proceedings against the taxpayer's officials based on the results of the tax audit until the taxpayer's tax obligation is duly acknowledged (i.e., until the administrative appeal and / or consideration in a court are finished). If the results of the tax audit are successfully challenged by the taxpayer in court, the criminal proceedings initiated merely based on results thereof, shall be immediately ceased.

Ministry of Finance

Implemented
— comments: Article 56.22. of the Tax Code of Ukraine provides as follows: "If a taxpayer challenges a decision of a control authority to the court or through the appropriate administrative procedure, such taxpayer cannot be accused of tax evasion exclusively on the ground of such decision of the control authority until the proceedings have been ultimately settled by the court or through the appropriate administrative procedure."
To reflect in the Tax Code and enforce in practice the approach evidenced by a widespread judicial practice, whereby minor mistakes or deficiencies in primary documents cannot be used as a ground for charging additional tax liabilities, penalties and fines on the taxpayer.

Ministry of Finance

In process
— comments: The Supreme Court in its decisions specifies that the facts of the occurrence of errors in executed primary documents or the absence of individual ones, shall not, as such, constitute the ground for the conclusions on the absence of the actual business transaction, - provided that the other data or evidence prove otherwise.
To implement a systemic risk-based approach to conducting unscheduled tax audits. Such approach shall ensure comprehensive evaluation of the particular taxpayer and the necessity of subjecting its activities to unscheduled tax audit to the contrary of the current approach whereby the tax authorities are empowered to launch unscheduled tax audit even if a single (and often casual) criterion pops out.

State Fiscal Service of Ukraine

In process
— comments: Pursuant to Article 78 of the Tax Code of Ukraine the unscheduled documentary tax audit shall be appointed if at least one of the grounds specified in the article is applicable.There is a positive dynamics, however, – the number of unscheduled tax audits somewhat reduced. At the same time, it appears that the risk-oriented system is virtually never employed in practice.At present, the issue of including the taxpayers to the plan of audits became rather significant. According to the Tax Code, the plan shall be issued for the entire year. However, since February 2018, the SFS began to make massive changes to the plan of audits in violation of direct provision of the Tax Code.
To disclose to the general public statistics on the administrative appeal procedure on a regular basis (for instance, on a quarterly basis). Such information shall include, inter alia, information regarding the total number of complaints, the results (positive and negative) of administrative consideration of complaints at each appeal level, etc.

State Fiscal Service of Ukraine

In process
— comments: The statistics is disclosed to public on the SFS web-site, but its form and information content shall be improved.
To guarantee the transparency and objectivity of the administrative appeal procedure by mandatory involvement of experts to be engaged in consideration of the taxpayers' complaints. Such experts shall be independent from the State Fiscal Service and the Ministry of Finance. Involvement of experts shall be mandatory irrespective of the amount of additional tax liabilities charged and fines and penalties imposed.

State Fiscal Service of Ukraine

In process
— comments: On 21 October 2015, the Order No.916 "On approval of the procedure for registration and filing of complaints by taxpayers and their review by the controlling bodies" was adopted.In particular, according to the Order No.916, the consideration of the complaint materials shall take place in closed meeting with the participation of the BOC’s authorized representative; the BOC is entitled to submit its own objections.Yet, the administrative appeal procedure needs further improvement.
To increase the timing for administrative appeal by the taxpayer, while the timing available to the tax authority for providing feedback to the appeal shall be decreased. This timing could be fixed at traditional 30 calendar days for both parties.

Ministry of Finance
State Fiscal Service of Ukraine

Recommendation is no longer relevant
— comments: The respective amendments have been proposed by the BOC during the discussion of amendments to the Tax Code of Ukraine in October-December 2016. However, the proposed amendments have not been approved by the Ministry of Finance working group.
To amend the Tax Code to foresee personal administrative and financial liability of the officials of the tax authorities for instances of malpractice and nonprofessional behaviour.

Ministry of Finance

In process
— comments: The respective amendments to the legislation are being approved by the Ministry of Finance together with the relevant regulatory authorities.
To ensure that the principle of interpreting ambiguous provisions of the Tax Code in favour of the taxpayer shall be consistently complied with by the tax authorities at all levels. An effective "checks and balances" system and introduction of personalized liability for the malpractice committed by the officials of the tax authorities shall be used as tools to achieve this.

State Fiscal Service of Ukraine

In process
— comments: The BOC and the SFS discussed this recommendation during the number of meetings. However, its’ practical application is still very limited. Both the SFS and the local tax authorities apply, as a rule, fiscal approach to the interpretation of the provisions of the Tax Code.Therefore, in practice this principle almost never applies. The exception is the established position of the Supreme Court or the official position of the Ministry of Finance.
To forbid the tax authorities to found their conclusions (formalized in the act of the tax audit) on internal biased information, which is not available to the taxpayer and the public. Further, the tax authorities cannot be motivated by informal internal instructions regarding the fines and penalties to be collected from the taxpayers.

State Fiscal Service of Ukraine

In process
— comments: The BOC and the SFS discussed this recommendation during the number of meetings. However, its' practical application is still very limited.
The decisions of the tax authorities to appeal in the court of law shall be subject to "second-eye review" (for instance, by the supervising tax authority) from the perspective of expediency and legal feasibility. Such approach appears to be timely given the recent changes in the procedural law whereby the court fee relief enjoyed earlier by the tax authorities was further discontinued.

State Fiscal Service of Ukraine

In process
— comments: The BOC and the SFS discussed this recommendation during the number of meetings. However, its' practical application is still very limited due to a large number of current disputes (around 100,000). At the same time since the 2016, all appeals to the Supreme Court are subject to the SFS's prior approval.

SYSTEMIC REPORT "NATURAL MONOPOLIES VS. COMPETITIVE BUSINESS: HOW TO IMPROVE RELATIONS"

To develop amendments to the Law of Ukraine “On regulating Urban Development Activities” to encourage local governments to develop territorial and detailed zoning plans.

Ministry of Regional Development, Construction and Residential Services

Not started
— comments: The current legislation in the sphere of urban planning does not directly oblige the duly authorized municipal authorities to develop, approve and publish territorial and detailed zoning plans, in particular, it does not consist the measures of legal responsibility of local governmental officials. However, absence of such plans after 01 January 2015 greatly limits the activities of authorized city planning and architecture authorities. Hence, the existing legislative restrictions shall be treated as an incentive factor for the development and approval of urban planning documentation at the local level by the authorized city planning and architecture authorities.
To oblige operators of engineering network system to publish technological requirements for hook-ups and warehouse facilities to facilitate the implementation of investment programs.

National Energy and Utilities Regulatory Commission

In process
— comments: According to the information provided by the NEURC, this requirement is currently established for gas transmission and gas distribution system operators due to the relevant provisions of the Code on Gas Transmission System, and the Code on Gas Distribution Systems.Also, in accordance with the clause 4.1.38 of the Code on Distribution Systems, the DSO shall publish and update all necessary information on their official websites and bear responsibility for timely disclosure of information and its authenticity. However, current legislation does not oblige operators of other engineering network systems (heat, water supply and sewage) to publish information on technological requirements for hook-up to networks.
To require licensees to disclose all consumer applications to hook up and their status, etc.

National Energy and Utilities Regulatory Commission

In process
— comments: According to the information provided by the NEURC, starting from 11 December 2017 applicants for hook-up services provision can monitor online the detailed flow of events concerning the organizational and technical measures that are carried out by the electricity transmission company in order to provide the hooking-up service. Operation of the personal online cabinet is regulated by the paragraph 4.9 of the Code on Distribution Systems. At the same time, this requirement is not implemented in relation to other engineering network systems (gas, heat, water supply and sewage).
To develop amendments to the Law "On regulating urban development activities" regarding the cancellation of developer's equity contribution as an outdated mechanism that is applied in a non-transparent way and appears to be an indirect tax, which is forbidden by law.

Ministry of Regional Development, Construction and Residential Services

In process
— comments: The Cabinet of Ministers of Ukraine has developed a Draft Law "On amendments to certain legislative acts of Ukraine on improving the investment climate in Ukraine", which include the initiative on cancellation of the developer’s equity contribution. According to the news published at the website of the Ministry of Regional Development, Construction and Residential Services, on 15 March 2018 the Government approved the cancellation of the equity contribution for development of the infrastructure - http://www.minregion.gov.ua/press/news/uryad-shvaliv-vidminu-payovoyi-uchasti-u-rozvitok-infrastrukturi-naselenogo-punktu/Meanwhile, the said Draft Law is registered in the Parliament under No.6540, dated 06 June 2017; the latest status - "20 March 2018 - The project was revoked": http://w1.c1rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61950
To organize public hearings with business associations, experts and the community to come up with better instruments for territorial development on a transparent basis.

Ministry of Regional Development, Construction and Residential Services

In process
— comments: As follows from the contents of the Explanatory note to the Draft Law No.6540, the developer's equity contribution does not have a clear goal-oriented nature (funds paid as the contribution, are not necessarily used for the infrastructure purposes), while payment of the engineering networks hook-up cost shall be made by the customers separately from the equity contribution. Thus, it was decided to cancel the obligation to pay the developer's equity contribution for development of the infrastructure, without replacing it with any other duty of the developer, which was reflected in the Draft Law No.6540.
To develop a concept of switching to a fixed hook-up fee with due consideration of all required procedures, financial sources and stakeholders that relieves the customer from the obligation to seek Technical Specifications for getting hooked up.

National Energy and Utilities Regulatory Commission
Ministry of Regional Development, Construction and Residential Services

Implemented
— comments: There is a final (but not yet approved with the Energy Community) Draft Methodology (order) for the formation of the fee for hooking-up to transmission and distribution systems.Also, according to the clause 4.6.2 of the Code on Distribution Systems in the case of standard and non-standard “turnkey” hook-up, the development of design and appraisal documentation for the electrical installation of external power supply is carried out by the DSO (and includes an input device with a switching device).Meanwhile, the technical specifications contain requirements for engineering maintenance in the customer's networks and, accordingly, the design and construction thereof shall be ensured by the Customer; the terms of reference (technical task) contain the requirements for engineering maintenance in the DSO networks and, accordingly, their design and construction shall be carried out by the DSO
To take into account all possible sources of funding (for modernization) in order to establish fair hooking-up fee.

National Energy and Utilities Regulatory Commission
Ministry of Regional Development, Construction and Residential Services

Implemented
— comments: There is a final (but not yet approved with the Energy Community) Draft Methodology (order) for the formation of the fee for hooking-up to transmission and distribution systems.
To develop clear parameters of hooking-up fee calculation.

National Energy and Utilities Regulatory Commission
Ministry of Regional Development, Construction and Residential Services

Implemented
— comments: In May 2017 the NEURC has developed and provided on its website an Estimated Cost Calculator for the standard hook-up service: http://www.nerc.gov.ua/?calc=ok Furthermore, the formula for calculating the fee for non-standard connection, contained in the Draft Methodology (order) for the formation of the hooking-up fee for the transmission and distribution systems, allows to calculate the cost of such a hook-up in advance
To hold additional public hearings while preparing a Draft Law "On amending certain legislative acts regarding the hooking-up fees..." to consider issues that arise when the customer's facilities are being hooked up to power grids and to discuss in detail possible ways to regulate them through legislation, including issues of greater access to information on the network conditions, available capacities, open register of hook-ups, etc.

National Energy and Utilities Regulatory Commission

Not started
— comments: To date, the issue of broadening access to information on the state of networks and available capacity, keeping record of the hook-up register has not been regulated at the legislative level yet.
To improve the monitoring of compliance with license conditions in the power supply field.

National Energy and Utilities Regulatory Commission

In process
— comments: The NEURC’s Draft Resolution "On approving the Procedure for monitoring the compliance of licensees, which carry out the activities in the areas of energy and utilities, with the legislation in the relevant fields and licensing conditions" was adopted on 29 December 2016, and then on 24 January 2017 it was published on its official website: http://www.nerc.gov.ua/?id=23368 At the same time, as reported to the Council by the NEURC, the proposed control procedure may be adopted only upon relevant licensing conditions in the fields of energy and utilities become effective.
To adopt the Procedure for monitoring the compliance of licensees with licensing conditions in order to improve the control measures in the fields of heat energy supply and production, its transportation by the main and local (distribution) heat networks.

National Energy and Utilities Regulatory Commission

In process
— comments: The NEURC’s Draft Resolution "On approving the Procedure of monitoring the compliance of licensees, which carry out the activities in the areas of energy and utilities, with the legislation in the relevant fields and licensing conditions" was adopted on 29 December 2016, and then on 24 January 2017 it was published on its official website: http://www.nerc.gov.ua/?id=23368 At the same time, as reported to the Council by the NEURC, the proposed control procedure may be adopted only upon relevant licensing conditions in the fields of energy and utilities become effective.
To regularly analyse the customers' complaints about the services, especially the issue of hooking up to the heating network, and to use the appropriate disciplinary measures under the results of such consideration.

National Energy and Utilities Regulatory Commission

Not started
— comments: The Council is not aware of the NEURC's practice of systematic analysis of the consumers' complaints and application of the relevant disciplinary measures.

To perform permanent explanatory activities aimed at informing the licensees on elimination of the revealed monopoly abuses.

National Energy and Utilities Regulatory Commission
Antimonopoly Committee of Ukraine

In process
— comments: As reported to the Council by the NEURC, when considering the complaints lodged by the individuals and/or legal entities, carrying out state supervision (control) measures, the latter conducts explanatory work with the licensees to prevent any abuse of their monopoly position (compliance with the relevant licensing conditions). Also on 29 September 2016 the Memorandum on strengthening cooperation in electricity and natural gas markets and in the fields of heat-, water supply and sewage between the AMCU and the NEURC was signed: http://www.amc.gov.ua/amku/control/main/uk/publish/article/130144;jses sionid=847042A438B05A2E8334164C53780D1B.app1 However, the Council is not aware of the nature, frequency, and efficiency of measures taken by the NEURC, jointly with the AMCU within the framework of the Memorandum implementation.
To ensure that the situation is analyzed on a regular basis and that licensees duly fulfil their duties.

Antimonopoly Committee of Ukraine

In process
— comments: As it is set forth in the Memorandum, concluded between the AMCU and the NEURC, they agreed, among other things, (i) to exchange information on problematic issues in the markets of electricity, natural gas, heat-, water supply and sewage for ensuring the possibility of taking prompt actions aimed at their settlement within the limits of their competence, (ii) create an efficient competitive environment for introduction of new models of electricity, natural gas, heat-, water supply and sewage, simplifying the procedure of hooking-up services peovision: http://www.amc.gov.ua/amku/control/main/uk/publish/article/130144;jsessionid=847042A438B05A2E8334164C53780D1B.app1 However, the Council is not aware of the nature, frequency, and efficiency of measures taken by the NEURC jointly with the AMCU within the framework of the Memorandum implementation.
To develop the legal framework for establishing the authority of local government agencies and the procedure for determining the priority of contracts for the purchase of heat energy, should two or more heating supply companies be connected to the heating network.

Ministry of Regional Development, Construction and Residential Services

Not started
— comments: Article 21 of the Law of Ukraine "On heat supply" sets forth the conditions for the increase of competition in the heat energy market and establishes basic principles of such competition, which, however, were not further developed. In particular, the procedure for conducting tenders for prioritizing conclusion of the heat energy purchase contracts, should two or more heating supply companies be connected to the heating network, is not currently developed or approved.
To hold consultations with licensees, experts and the public on issues regarding hooking-up of producers and consumers to heating networks and ways to resolve them.

National Energy and Utilities Regulatory Commission
Ministry of Regional Development, Construction and Residential Services
Antimonopoly Committee of Ukraine

In process
— comments: The NEURC in cooperation with the consultants of the USAID Municipal Energy Reform is working on drafting relevant regulatory documents for hooking up to centralized heating supply system. Within the framework of this USAID project, the NEURC’s specialists are members of a working group on the development of the procedure (methodology) for hooking up to heat networks, calculation of the hooking-up fee and financing of hook-up services, etc. The said procedures (methods) are not yet approved and therefore relevant consultations should continue to be carried out, if necessary
To renew the rules for connecting to water supply and sewage systems so that they regulate, among others, the issue of providing/receiving Technical Specifications, establishing the hooking-up fees for the water supply and sewage networks based on a formula using the costs of the works and services needed at various stages in this process.The new rules should clearly define “access” and “connection/hook-up” as well as contain norms that regulate a number of issues related to:issuing and receiving hook-up permission;drawing up construction blueprints showing the water and sewage connections;providing and receiving Technical Specifications, which includes establishing the order or methodology for formulating the value of specification issuing services;establishing the procedure for paying for a hook-up that includes the value of works and services at various stages of this process, including works and services related to hooking up to water supply and sewage networks;determining the equity contribution, with th s intention of preventing cases where customers are pressured under the guise of an equity contribution to buy materials and/or to carry out certain works on behalf of the provider that are not directly related to the procedure of hooking up ordered by the customer;covering temporary connections;launching networks for further transporting of water resources;changing ownership to prevent abuse and setting excessive installation requirements.

National Energy and Utilities Regulatory Commission
Ministry of Regional Development, Construction and Residential Services

In process
— comments: According to the information provided by the NEURC and the Ministry of Regional Development, Construction and Residential Services, the latter is currently working on amendments to the Rules for the use of centralized municipal water supply and sewage systems in settlements of Ukraine, in particular, to regulate the issue of specifications for hooking-up to centralized water supply and sewage systems. The relevant task is included in the Plan of applied scientific and technical developments in the priority areas of activity in the spheres of construction, housing and communal services and regional development of the Ministry of Regional Development, Construction and Residential Services in 2017. To date, the relevant changes have not been developed and approved.
To make the necessary adjustments so that the hooking-up fee for the gas networks is calculated based on the fair price principle.

National Energy and Utilities Regulatory Commission

Implemented
— comments: At present, basic requirements and conditions for calculating the charge for hooking-up the customers’ objects to gas transmission or gas distribution systems are specified in the Methodology for setting the hooking-up fees for the gas transportation and gas distribution systems, approved by the NEURC on 24 December 2015 No.3054: http://zakon2.rada.gov.ua/laws/show/z0396-16 The provisions of the above Methodology provide for, in particular, the establishment of transparent and non-discriminatory conditions for determining the fee for standard/non-standard hook-ups, ensuring possibility of determining hook-up service cost at the stage of business planning, preventing abuses by GTS/GDS operators while determining the cost of services for hooking up such objects.
To determine what is a "fair price" for the hooking-up service and prevent an abuse.

Antimonopoly Committee of Ukraine

Implemented
— comments: At present, basic requirements and conditions for calculating the charge for hooking-up the customers’ objects to gas transmission or gas distribution systems are specified in the Methodology for setting the hooking-up fees for the gas transportation and gas distribution systems, approved by the NEURC on 24 December 2015 No.3054: http://zakon2.rada.gov.ua/laws/show/z0396-16 The provisions of the above Methodology provide for, in particular, the establishment of transparent and non-discriminatory conditions for determining the fee for standard/non-standard hook-ups, ensuring possibility of determining hook-up service cost at the stage of business planning, preventing abuses by GTS/GDS operators while determining the cost of services for hooking up such objects.
To adopt the procedure for agreeing the natural gas customer database with gas distribution companies.

National Energy and Utilities Regulatory Commission

Implemented
— comments: The NEURC's Resolution "On Approving of the Amendments to certain Resolutions of the NEURC regarding the implementation of daily balancing in the natural gas market and procedures for the development, submission and approval of the plan for the development of the gas transportation system for the next 10 years", dated 27 December 2017 No.1437, envisages, in particular, the procedure for the formation of a supplier Register of Consumers, which shall operate on the information platform of the gas operator:
To develop a plan for the switch from cost-plus rate setting to RAB methodology for power and gas companies and implement all the necessary measures to ensure incentive-based rate setting in centralized heating, water and sewage services.

National Energy and Utilities Regulatory Commission
Ministry of Regional Development, Construction and Residential Services

In process
— comments: During 2015-2017, the NEURC has developed a regulatory framework for implementation of incentive management in the fields of energy and utilities, namely power transmission, power distribution field, heat- water supply and sewage. Thus, the Council is currently attempting to identify areas in which the concept of switching from "cost plus" rate setting methodology to RAB has not been yet developed and needs further regulatory settlement.
To draft amendments to the respective asset valuation methodology to improve the base for assessing and verifying results.

National Energy and Utilities Regulatory Commission
Ministry of Energy and Coal Industry
Ministry of Regional Development, Construction and Residential Services
State Property Fund of Ukraine

In process
— comments: The representatives of the NEURC, together with the SPFU representatives, participated in the working group on development of amendments to the Methodology for valuation of assets of natural monopolies entities, business entities on adjacent markets in the field of combined production of power and heat energy, approved by the SPFU Order No.293, dated 12 March 2013. Based on Working Group joint work results and cooperation with the USAID Project consultants, the changes were prepared for consideration and proposals, as well as sent for the SPFU’s consideration by the letter No.1510/18/7-17 dated 13 February 2017. Preparatory work for introduction of incentive management in the field of heat supply with respect to development of aggregate cost of reproduction value, which shall be attached to the Methodology, is carried out directly by the participants of the pilot project, namely PJSC "Kyivenergo" and PJSC "Oblteplocomunenergo" in Chernihiv with the participation of the State Enterprise "Scientific - Research institute of Building Production”.
To provide a training program for both the staff and licensees on the RAB methodology application.

National Energy and Utilities Regulatory Commission

In process
— comments: Educational activities for the NEURC staff and licensees in the spheres of water-, heat supply and sewage (i.e. training programs, workshops, seminars) are being conducted within the frameworks of the USAID Municipal Energy Reform Program in Ukraine (MERP) that is implemented in accordance with the annual working plans.
To ensure implementation of the Law "On the specifics of access to information in power and natural gas supply, centralized hot water, centralized drinking water and sewage services".

National Energy and Utilities Regulatory Commission
Regional State Administrations
Municipal Executive Authorities

In process
— comments: According to the NEURC it has implemented the following actions: all the data, specified in the Part 1 of Article 1 of the Law of Ukraine "On the specifics of access to information in power and natural gas supply, centralized hot water, centralized drinking water and sewage services” is published on the NEURC’s official web-site, as required by Part 1 of Article 4 of the said Law; the NEURC’s Resolution No.464 dated 30 March 2017 "On annual provision of consumers with key information on services in the energy and utilities sectors" was adopted : http://zakon3.rada.gov.ua/laws/show/v0464874-17;in April 2017 an additional service was introduced - the informational telephone line 044-204-70-72 for corresponding services consumers;a series of information leaflets for consumers were prepared: http://www.nerc.gov.ua/?id=26426.At the same time, government agencies and local authorities, whose responsibilities includes setting of prices/fees for goods, services of natural monopolies, generally failed to ensure implemtation of the Law.
To improve tracking systems in the networks.

National Energy and Utilities Regulatory Commission

In process
— comments: On 14 March 2018, the NEURC approved the Commercial Electricity Accounting Code, which defines the principles of accounting, processes and procedures for ensuring the formation of data on the volume of produced, transmitted, distributed, consumed, imported and exported electricity.The principles of commercial accounting, including distribution services, for heat-, hot water-, centralized water supply and provision of relevant accounting information for such services consumers, are determined by the Law of Ukraine "On Commercial Accounting for Heat Energy and Water Supply", which became effective on 02 August 2017. Currently, the NEURC, within its competence and in pursuance of Clause 7, Section IV "Final and Transitional Provisions" of the said Law, improves the legal framework in line with the requirements of the current Law.
To develop service quality indicators and classify them accordingly, as well as to develop control monitoring and enforcement systems.

National Energy and Utilities Regulatory Commission

In process
— comments: The monitoring of quality indicators of power supply services was introduced by the NEURC in 2006 and is currently being implemented in accordance with its Resolution, dated 23 March 2017 No.345: http://zakon.rada.gov.ua/laws/show/v0345874-17 In accordance with the NEURC’s Resolution, dated 31 May 2017 No.714, which came into force on 09 October 2017, monitoring of quality indicators for power transmission - NEC "Ukrenergo": http://zakon5.rada.gov.ua/laws/show/v0714874-17 is being implemented.In water supply and sewage sphere, service quality indicators monitoring was introduced with the adoption of the NEURC’s Resolution, dated 23 February 2017 No.226, which came into force on 23 August 2017: http://zakon5.rada.gov.ua/laws/show/v0226874-17 In natural gas supply sphere, monitoring of commercial services quality indicators is carried out in accordance with the NEURC’s Resolution No.1156, dated 21 September 2017, which came into force on 10 August 2017: http: //zakon3.rada .gov.ua /laws/ show/v1156874-17 Besides this, the NEURC develops quality indicators for heat supply services reporting forms. Control over compliance with quality of service indicators is exercised during control of compliance of the licensees with the legislation and licensing terms and conditions.
To design the procedure for overseeing that licensees uphold the terms of their licenses to do business in all areas of operation: power, water, heat and gas distribution.

National Energy and Utilities Regulatory Commission

In process
— comments: The NEURC’s Draft Resolution "On approving the Procedure for monitoring the compliance of licensees, which carry out the activities in the areas of energy and utilities, with the legislation in the relevant fields and licensing conditions" was adopted on 29 December 2016, and then on 24 January 2017 it was published on its official website: http://www.nerc.gov.ua/?id=23368 At the same time, as reported to the Council by the NEURC, the proposed control procedure may be adopted only upon relevant licensing conditions in the fields of energy and utilities become effective.
To develop a mechanism for interlinking rate levels and quality of service.

National Energy and Utilities Regulatory Commission

Implemented
— comments: The mechanism of interdependence between the fee levels and quality of services is taken into account in the transition to the incentive-based fee setting and is provided for power distribution companies natural gas distribution and gas supply companies, in the fields of water and heat supply by a number of NEURC's resolutions.
To strength the powers of the regulator and sanctions against natural monopolies.

National Energy and Utilities Regulatory Commission

Implemented
— comments: On 22 September 2016 the Law of Ukraine "On the National Energy and Utilities Regulatory Commission" was adopted, Article 17 of which clearly specifies the NEURC’s powers. The Law provides for the implementation of state control in energy and utilities markets (Article 19), liability for violations of legislation in the areas of energy and utilities (Article 22): http://zakon.rada.gov.ua/go/1540- 19th Thus, the Law strengthens the NEURC’s authority and provides tools for influencing unscrupulous service providers. Apart from that, with entering into force of the Law of Ukraine "On Electricity Market", the responsibility of service providers for violation of the legislation regulating functioning of electricity market has been strengthened.
To set up a single information system for the sector and a benchmarking system.

National Energy and Utilities Regulatory Commission

Not started
— comments: As reported by the NEURC to the Council, the development and creation of an information system for collection of information from licensees is provided by the District Heating Regulatory Reform Support Program at the expense of the Swedish for International Cooperation and Development Agency (SIDA) Grant. However, the Council is not aware of the actions taken by the NEURC to create such a system.
To establish the requirement on service providers to present information about key indicators of their operations on their websites.

National Energy and Utilities Regulatory Commission
Regional State Administrations
Municipal Executive Authorities

In process
— comments: The requirements for the service providers to disclose main indicators of their activity on web pages are determined by the Law of Ukraine "On the specifics of access to information in power and natural gas supply, centralized hot water, centralized drinking water and sewage services", which was adopted by the Parliament on 10 December 2015. However, service providers mostly did not ensure implementation of the Law.
To improve responsiveness to complaints from customers.

National Energy and Utilities Regulatory Commission
Antimonopoly Committee of Ukraine

In process
— comments: On 31 August 2017, the NEURC's Draft Resolution "On Approving the rules for settlement of disputes arising between business entities operating in the spheres of energy and utilities" was published on its official website: http://www.nerc.gov. ua /? id = 27182