President of Ukraine Viktor Yanukovych held an expanded meeting of the Committee on Economic Reforms. Opening the meeting, the President said that businessmen cannot realize their potential fully today because of the inadequate state of the regulatory environment in Ukraine.

"That potential, we have in Ukraine, and which is highlighted at virtually every international meeting with the business communities or investors is not being realized fully, because regulatory policies do not meet international standards. The fight against bureaucracy is continuous, but the Ukrainian state and people should be coming victorious out of any fight,” he said. 

Viktor Yanukovych expressed his assurance that complex procedure of obtaining permits and permanent attention of the supervisory authorities, which are interested in detecting violations and imposing fines more than anything else, are not conducive to the establishment and development of manufacturing enterprises. As an example, the President cited the situation in construction industry, which is regulated by more than 40 legal acts. 

"The primary objective is to develop clear rules, transparent and comprehensible for business. The basic principle of regulatory policy reform must be reducing state interference in economic activity," he said. 

State regulation and control should focus on activities, which are potentially dangerous to the society (national security, life and health of citizens), or which are connected with the access to limited resources, he said. 

"The interference in activities of all other entities must be minimal," Viktor Yanukovych added. 

Speaking of the first positive results in reforming the permit system, the President highlighted the fact that the procedure of obtaining the appropriate papers has become easier. 

The system of permit issuing centers has allowed further reducing corruption in the process of obtaining permits, Viktor Yanukovych said. "At the legislative level, preconditions for reducing the number of supervisory authorities were created and practical implementation of the declarative principle of launching economic activity was provided," he said. 

Soon, the President reminded, a number of bills would be approved to significantly improve the business climate, particularly, reducing the number of licenses, introducing electronic registration of business entities, reforming technical regulation and so on. 

Yet, President Yanukovych noted, despite some positive shifts, the pace of reform is still too slow, and state regulation system still hampers development of business and investment. According to him, simplifying licensing in the construction industry is particularly urgent. 

"Despite numerous declarations of Мinistry for Regional Development and Building leadership, no concrete and tangible results of deregulation were reached in this area. The majority of declared initiatives remain unimplemented, as no draft government decisions necessary for their implementation, were prepared," Viktor Yanukovych stressed. 

The President also noted that the law "On state control over economic activity” does not work still, although three years have passed since its adoption.

"The 13 authorities of state supervision have not approved yet the appropriate criteria for categorizing businesses by the risk degree. None of the supervisory authorities approved a list of measures in the framework of state inspections schedule. As a result, business faces excessive, unreasonably frequent inspections and spends time on dealing with controllers, rather than developing," Viktor Yanukovych said. 

According to the President, the causes of unsatisfactory pace of reforms are quite obvious. They are resistance of officials to any reforms and extremely poor performing discipline. 

"Each of the adopted laws that regulates business activity faces three stages of resistance: resistance during its preparation, attempts to reverse its essence during the adoption and sabotage by some officials at the stage of performance... The whole bureaucratic system resists liberalization and market reforms," Viktor Yanukovych said. 

"The situation with the law on reducing the number of regulatory agencies is the same today.  New, progressive laws are being lobbied against," President Yanukovych said, reminding that on September 21 the Parliament had rejected the bill on increasing the responsibility for infringement of procedures of permit issuing. 

He drew particular attention to active opposition to reforms by local governments. These bodies have considerable powers, yet use them to create benefits for friendly commercial structures instead of improving the overall business environment in the region, said the President. 

Addressing the local governments and ministries, the President stressed that he would expect their suggestions on reducing the number of their deputy assistants. "It is unacceptable, that a regional administration chairman or minister has 7 to 9 deputies on average. So I expect your proposals," the President said. 

The President also outlined the next steps in key areas of reform. 

As to the licensing system, Viktor Yanukovych said, there is a need to introduce the new permit issuing, when businessmen would work only with state administrators, not representatives of local licensing authorities. “There must be no direct contacts between a businessmen ant the person deciding whether to grant a permit," he said. 

The President also pointed to the need to thoroughly review all licensing procedures for the construction industry in order to minimize the number of documents and agreements necessary to begin construction and commission the built facilities. "Most of the facilities must be provided with all the papers in no more than 60 days," Viktor Yanukovych said. 

Besides, President Yanukovych demanded that the system of categorizing businesses by the degree of danger to citizens and society is implemented, and that regulatory authorities approve the lists of checks questions and unified forms. 

The President emphasized the need for radical reforming of the products quality monitoring system, reminding that he had brought in to the Parliament the Law "On Market Supervision and Goods Quality Control” and "On Prevention of Dangerous Products Trafficking in Ukraine” as urgent. 

"Passing these bills would introduce European principles of control over quality of products, which are sold at the domestic market. Manufacturers will be checked only upon the fact of detection of dangerous products," he said. 

President Yanukovych also noted the importance of reforming the area of administrative services, and the urgent need for adoption of the Law “On Administrative Services", concurrently with the Administrative Procedure Code. 

"These laws are to put strict requirements as to authorities’ powers to provide administrative services, introduction of the list of administrative services, establishment of a fair price for them and making some of them free, and creation of appropriate conditions for receiving them throughout Ukraine," he said. 

The next step, he said, would be the audit of all services provided by public institutions and enterprises created by them as to their compliance with the law.

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