STATE AID IN UKRAINE WILL BE BASED ON COMPETITION AS IN THE EU

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On November, 9, Verkhovna Rada hosted the seminar-roundtable “State Aid in the Context of the EU-Ukraine Association Agreement” where members of the Parliament, representative of the Antimonopoly Committee, European Experts and the EU-funded Project Leader took part.

The main topic of the discussion was harmonisation of Ukrainian state aid control system with the obligations under the Association Agreement between the EU and Ukraine. In particular, participants discussed ensuring transparency of public spending, including openness to public, creation of the register of state aid schemes, regulations that determine criteria for state aid qualification. Among expected results of introducing the state aid monitoring and control systems are establishment of higher standards of public finance management and increase of competition on the market.

“Main task of the Ukrainian authorities is to deal with the chaos in the system of providing state aid to enterprises as soon as possible as it has been handled without transparency and based on unclear principles. As a result of this chaos the state aid was not targeted at support of development of promising enterprises and start-ups, it was rather a compensatory aid, but we have to move towards the European model of development”, said Victor Halasiuk, Head of the Verkhovna Rada Committee on Industrial Policy and Entrepreneurship, who chaired the roundtable.

Ostap Semerak, Head of the Ukrainian Part of the Parliamentary Committee of Association, noted: We have to establish a system of state aid which is similar to one in the EU – take this holistic model as an example and start using it rather than fixing the existing laws here and there. And this model is written in the Association Agreement between Ukraine and the EU.”

Commissioner of the Antimonopoly Committee of Ukraine Anna Artemenko talked about the tasks of the Antimonopoly Committee in reforming the staid aid system: It is necessary to conduct a complete inventory of the entire system of state aid: create a registry of all structures that provide state aid, develop and implement a competitive procedure of state aid, determine the form and criteria for state aid and explain these rules to everyone concerned in the civil service and business”.

Eugene Stuart, Team Leader of the EU funded Project “Harmonisation of Public Procurement System in Ukraine with EU Standards”, said that the main purpose of adopting the EU State aid regulatory system in Ukraine is to allow only State supports to the business sector that do not have undue negative impacts on market competition and trade. “While the Law on State aid to Undertakings comes into full effect in August 2017, all Ministries and public organisations which give support of any kind to businesses need to prepare for the new rules. Ukraine continues to suggest new initiatives that may well not be allowed after the Law comes into effect and account should be taken of this now rather than later”. Dr. Stuart referred to a range of Parliamentary legal initiatives planned for 2015-2016 and said that at least 20 of these could be problematic in the future and in doubtful compliance with EU State aid rules.

The roundtable was organized with the support of the Committee on Industrial Policy and Entrepreneurship and Ukrainian Part of the Parliamentary Committee of Association.

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