The Interagency Working Group on Accelerated Review of State Regulation of Economic Activity (IWG on deregulation) has recommended that the Cabinet of Ministers abolish a significant part of state regulation instruments (permits, licenses, declarations of approvals, etc.) in the areas of policy making falling within the competence of the Ministry of Economy.

In total, 47% of licenses and permits were proposed to be canceled. This unprecedented decision is intended to significantly expand economic freedoms in Ukraine and stimulate business development. The decision was made at the first meeting of the IWG on deregulation on January 26, 2023.

“A free regulatory environment is an extremely important factor for economic growth. Ukraine has set a goal to make a leap from a transitional economy to a developing economy in ten years. To do so, we need to significantly increase the level of economic freedoms in Ukraine. And deregulation is one of the steps towards this goal. We will eliminate instruments that prevent businesses from operating normally, including some vestiges of the soviet era. We will significantly simplify and digitize the tools necessary to protect public interests.

We are starting with the tools administered by the Ministry of Economy. Almost half of them will be abolished, and the rest will be modernized. In the future, the IWG will work on regulatory instruments that fall within the competence of other authorities. Our task is to give business economic freedom,” said Yuliia Svyrydenko, First Deputy Prime Minister – Minister of Economy of Ukraine, co-chair of the IWG on deregulation.

There are many examples where business regulations can be simplified. For instance, in the area of labor relations and occupational safety, there are currently such archaic regulations as the need to obtain approval from the State Labor Service of Ukraine for the Instruction on procedure of dust removal in production facilities or the Schedule of workplace air analysis for dust and gas pollution. It is proposed to abolish such norms that create unnecessary obstacles for normal business operations.

At the first meeting of the IWG on deregulation, a proposal was made to abolish the permit for re-export of goods originating in other countries; the approval for issuing licenses for export operations with crude oil of Ukrainian origin and natural gas in gaseous form of Ukrainian origin under foreign economic contracts (agreements); individual (one-time) licenses in the field of export-import, etc. These regulations are either outdated or redundant, as adequate protection of the public is guaranteed by other existing regulations.

In addition to direct abolishment, the Interagency Working Group also recommended to optimize (digitize, bring in line with the Law of Ukraine “On administrative services”, and simplify) about a third of the instruments that fall within the competence of the Ministry of Economy. In addition, it was recommended to transfer some of the instruments of state regulation of economic activity to other ministries and agencies.

Instruments considered at the IWG meeting regulate business activities in the areas of export and import of goods (including military), investment and intellectual property, technical regulation, labor relations, and labor safety. The developed draft decisions (draft amendments to the Laws of Ukraine, decisions of the Government and the Ministry of Economy) will be agreed with the relevant ministries and agencies and submitted to the Cabinet of Ministers for consideration.

The group is co-chaired by the First Deputy Prime Minister – Minister of Economy and the Deputy Prime Minister – Minister of Digital Transformation. The first meeting approved the composition of the IWG on deregulation: representatives of the Ministries of Economy, Digital Transformation, Environmental Protection and Natural Resources, Justice, Finance, and the State Regulatory Service. Representatives of the Better Regulation Delivery Office, the Economic Recovery Center, and the Center for Economic Strategy are also involved in the work of the Interagency Working Group.

As reported earlier, the Interagency Working Group on Accelerated Review of State Regulation of Economic Activity was established by the Government on January 13, 2023. The main tasks of the working group are to coordinate actions of state bodies in terms of reducing and optimizing the instruments of state regulation of business, and improve the regulatory framework in terms of transferring state regulation instruments into electronic form.

The next meeting of the Interagency Working Group will consider instruments in the areas of policy-making falling within the competence of the Ministry of Environmental Protection and Natural Resources of Ukraine.

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Ukraine ranks 130th in the world according to the Economic Freedom Index with a score of 54 out of 100, which puts it in the category of mostly economically unfree countries. Deregulation is aimed at changing the current state of affairs and significantly expanding the level of economic freedoms in Ukraine to further economic growth.