Effectiveness of Free Economic Zones and Industrial Parks Debated at Seminar

On 24 February 2016, the Antimonopoly Committee, together with the Support group for Ukraine and the EU-funded Project “Harmonisation of Public Procurement System in Ukraine with EU Standards”, held a seminar on policy and regulatory issues regarding free economic zones and industrial parks. Officials from the Verkhovna Rada, Antimonopoly Committee, Ministry of Economic Development and Trade, Ukrainian and European experts took part in the seminar.

One of the challenges facing Ukraine within the obligations to establish an effective system of monitoring and control of state aid under the Association Agreement is the need to ensure equal competitive conditions for businesses activities. This requires a review of state aid rules, including the country’s policy on free economic zones (FEZ) and industrial parks functioning. Therefore the topic of the seminar was of particular relevance.

During the seminar, experts reviewed current initiatives concerning free economic zones (FEZ) and industrial parks in Ukraine, observed principles of operation and regulation of FEZ in Ireland, Poland and Romania, considered the countries’ approach to state aid to investors, and provided an assessment of success of FEZ. Critical analysis of free economic zones and industrial parks operation in Ukraine and studying of relevant international experience will allow developing an effective state policy in this field in accordance with EU standards.

Anna Artemenko, State Commissioner, Antimonopoly Committee of Ukraine, made opening remarks and said: “There are a lot of initiatives at present in the Parliament on aspects of industrial policy, including on free economic zones and industrial parks. Therefore today we want to discuss the relevance of the new Ukrainian State aid legislation on such policy initiatives as FEZ and industrial parks in Ukraine. Right now, our main goal as the Authorised body on State aid regulation is to raise awareness among providers and beneficiaries of State aid about this new sphere of regulation in Ukraine, which will be fully functioning from August 2017”.

Mr. Viktor Galasyuk, Head of the Verkhovna Rada Committee on Industrial policy and Entrepreneurship said that it was important to address the question of FEZs and the creation of industrial parks, as there is a clear need to promote economic development in Ukraine. “I welcome this opportunity to discuss international experience and talk about practical things related to improving productivity, promoting foreign investment and creating new jobs and I also welcome a continuing dialogue with the AMCU and international experts on best practices and regulatory considerations.”

Dr. Eugene Stuart, the EU Project Leader,pointed out that theSeminar was intended to promote further understanding and dialogue in respect of two types of initiatives currently being debated in Ukraine and having a State aid dimension – resumption of supports for firms locating in Special or Free Economic Zones and establishment of more Industrial Parks. Dr. Stuart said: “Based on international practice and experience of application of the EU State aid rules to such initiatives, the key questions are: Are these good ideas from the perspective of industrial policy? What has the international experience been as regards cost and benefits? And how will such initiatives be treated under the Ukrainian State aid regulatory system?”