Finance Ministry provides on a regular basis the information coverage about the financial state of the Fund, recipients of funding, purposes and scope of its use.

As of 04/08/2020 the Ministry of Finance is launching a special section on the official website, which will contain all relevant information on the use of funds from the COVID-19 Response Fund and a complete list of regulations governing the Fund’s activities and the allocation of funds.

Information on the use of the COVID-19 Response Fund will be updated on a regular basis.

Deputy Prime Minister for European and Euro-Atlantic Integration of Ukraine Olha Stefanyshyna has signed three agreements with the European Commission on the financing of new EU assistance programs for Ukraine worth EUR 105 million. This funding is provided under the EU assistance package to Ukraine, aimed at supporting small business, pursuing reforms and overcoming the effects of the COVID-19 epidemic.

“The assistance from the European Union will be focused on a number of areas – from strengthening the capacity of the authorities and providing expert consultation on the reforms path, to investing in small farms and innovation grants for the development of small and medium enterprises. The implementation of the aforesaid programs will stimulate the development of Ukraine’s economy, as well as allow more effective counteraction to healthcare challenges,” commented Olha Stefanyshyna on the Government’s decision.

Thus, EUR 60 million will be allocated to the 2020 Technical Cooperation Program to increase the capacity of the authorities to carry out reforms under the Association Agreement, in particular, the ministries will receive expert support in the process of development and implementation of reforms. The program will also improve the quality of legislative processes in Parliament, carry out the necessary reforms in the health care sector and more.

A EUR 25 million resource will be directed to ensure the implementation of the EU Support Program for the Development of Agriculture and Small Farms in Ukraine. Under the Program, small farms will be eligible for receiving additional grant support, advice and new skills for the development of their production process, as well as for the purchase of land. Besides, the Program will allow to improve resource management in fisheries and forestries.

A EUR 20 million will be allocated to the EU4BUSINESS: Support for Small and Medium Enterprises (SMEs) in Ukraine. The program provides grants for innovative projects aimed at the development of small and medium-sized enterprises, job creation and business development at the local community level, as well as improving economic policy in this area in line with international best practices.

Background

The EU aid package to Ukraine, aimed at fighting and overcoming the consequences of the COVID-19 epidemic, is worth more than EUR 190 million. Assistance will be provided in the following key areas: support for urgent and short-term needs in healthcare sector; strengthening healthcare facilities, increasing the institutional capacity of the Ministry of Health; overcoming the consequences of the crisis in the social and economic spheres.

This project was published on July 31, 2020 – https://bit.ly/2DofZFV.

As reported, the draft order “On approval of the Rules for the formation of lists of national standards for the purpose of applying technical regulations” (hereinafter referred to as the draft order) was developed with the aim of bringing its own normative legal act in line with the current legislation, namely the Law of Ukraine “On technical regulations and conformity assessment “.

The draft order proposes to approve the rules for the formation by the central executive authorities and the Security Service of Ukraine, which are entrusted with the functions of technical regulation in certain areas of activity, lists of national standards for the purpose of applying technical regulations (hereinafter – the draft Rules).

The draft Rules establish general requirements for the structure, design and procedure for the formation of lists of national standards for the purpose of applying technical regulations, as well as additional requirements for the formation of lists of national standards for the purpose of applying technical regulations developed on the basis of legislative acts of the European Union, and lists of national standards for the purposes of technical regulations, except for those developed on the basis of acts of legislation of the European Union.

The Ministry of Economy informs that the draft Regulation has been developed taking into account the practice of publishing lists of names and symbols of harmonized European standards in the “Official Journal of the European Union” in the framework of the implementation of the relevant acts of the European Union legislation.

The draft Rules are aimed at ensuring the identity of the lists of national standards for the purpose of applying technical regulations, developed on the basis of acts of European Union legislation, with the lists of names and designations of harmonized European standards published in the framework of the implementation of the relevant acts of European Union legislation.

The draft order is subject to agreement with many central executive authorities.

If adopted, the document will come into effect from the day of its official publication.

On July 23, during a working visit to Brussels, Denys Shmyhal met with Valdis Dombrovskis, Executive Vice-President of the European Commission.

During the meeting the parties discussed the following issues:

 – joint response to coronavirus pandemic;

 – the aggression of the Russian Federation in Donbas, the sanctions regime and the deteriorating human rights situation in Crimea, which requires increased attention of the global community;

 – Ukraine’s course towards the EU and NATO, as well as structural reforms on this path;

– updating of the EU-Ukraine Association Agreement and intensification of the dialogue regarding the Agreement on Conformity Assessment and Acceptance of Industrial Products;

– macro-financial assistance to Ukraine from European partners.

The Prime Minister of Ukraine told his European counterpart that “the Government of Ukraine is guided by the need to continue reforms aimed at deepening economic integration with the European Union. Apart from that, we have embarked on forming a Roadmap containing over 60 European integration laws, which we plan to put to a vote in Parliament.”

Moreover, Denys Shmyhal stressed the importance of launching a systematic and productive dialogue on the renewal of the EU-Ukraine Deep Free Trade Area, as well as on the broader context of cooperation with regards to mutual access to markets.

“It is critical for Ukraine to intensify the dialogue on concluding the Agreement on Conformity Assessment and Acceptance of Industrial Products. This pursues two main purposes: first, to align our quality infrastructure with European standards; secondly, to facilitate the access of Ukrainian products to the EU market. Experience has shown that access to the EU market opens up other world markets to us,” told the Head of the Ukrainian Government.

For his part, the Executive Vice-President of the European Commission noted that the European Union will continue to support progress of reforms in the sectors of healthcare, education, decentralization, land relations, as well as the reform of customs and fiscal authorities.

Denys Shmyhal invited Valdis Dombrovskis to visit Ukraine and consider the possibility of a joint visit to the eastern regions of Ukraine or to the border line with Crimea.

Ukraine and the EU have signed a Memorandum and Loan Agreement on disbursement to our country an exclusive macro-financial assistance in the amount of EUR 1.2 billion from the European Union.

The relevant documents were signed on July 23 during the working visit of the Prime Minister of Ukraine Denys Shmyhal to Brussels. Minister of Finance Serhii Marchenko and Governor of the National Bank Kyrylo Shevchenko are taking part in the working trip together with the Head of Government.

The macro-financial assistance program is intended for 12 months and will be disbursed in two tranches of EUR 600 million each. It is assumed that the allocation of the first tranche is possible immediately after the entry into force of the Memorandum of Understanding and the Loan Agreement.

Receipt of the second tranche will be possible after the Ukrainian side implements a number of special conditions and after the European Commission conducts an appropriate assessment of the fulfilled obligations.

“Today’s signing of the Memorandum of Understanding and the Credit Agreement, under which Ukraine will receive a 1.2 billion euros support, gives us confidence in the economic stability of the country and the continuation of reforms that will ensure the well-being of our Ukrainian citizens. The new macro-financial assistance program is quite ambitious but realistic, and its successful implementation will be a joint victory for both Ukraine and the EU,” said Prime Minister Denys Shmyhal.

The provisions of the draft Memorandum agreed with the European Commission provide for eight obligations to be fulfilled by the Ukrainian side to receive the second part of macro-financial assistance, which include the following:

1) increasing the transparency and efficiency of medical procurement;

2) introduction of tax and customs administrations reform and implementation of tax and customs reform plans;

3) strengthening the independence, integrity, effective functioning of the judiciary;

4) strengthening the transparency and efficiency of the public administration system and the independence and efficiency of the work of anti-corruption bodies and the prosecutor’s office;

5) extending powers of private bailiffs; recovery of assets in state-owned banks;

6) adoption in the first reading of the draft law on the establishment of a new agency (body) for the investigation of serious economic and financial crimes;

7) introduction of the regulatory framework for corporate governance for state-owned enterprises (in accordance with the OECD guidelines);

 8) improving the functioning of the gas market.

It is worth mention that on May 20, 2020, the Council of the European Union decided to disburse new macro-financial assistance to Ukraine and nine other EU neighboring countries. The credit is intended to address the effects of the crisis caused by the COVID-19 pandemic and to improve macro-financial stability.

The relevant draft Resolution was approved by the Cabinet of Ministers of Ukraine during a meeting on Wednesday, July 22.

The newly formed Ministry will be headed by Deputy Prime Minister Oleh Uruskyy.

“In order for the new Minister to be able to fulfill the set tasks and achieve the planned goals, he needs to be given the necessary platform and resources. That is to set up a new Ministry. I have told that it is a pending problem. This was our strategy and promise at the very beginning of our Government’s work. There must be a new approach to the development of the industry through the formation of effective Government policy and strategy,” noted Prime Minister Denys Shmyhal during the session.

According to Deputy Prime Minister Oleh Uruskyy, the purpose of the act is to establish a central executive body responsible for formulating and ensuring the implementation of state industrial policy in the sector of development of strategic industries.

“The adoption of this Resolution will ensure the sustainable development of strategic industries, creation of new jobs, increasing revenues of the state budget, will facilitate the development of the regions,” said Oleh Uruskyy.

According to the Prime Minister, the priority of the new body is the high-tech defense industry, which has significant potential in Ukraine. “That is why today we are officially launching the establishment of a new Ministry,” added Denys Shmyhal.

On Monday, July 20, the first meeting of the sectoral working group of the Ministry of Health with representatives of international organizations providing assistance to Ukraine in the field of healthcare took place. Thus, a platform for the coordination of international technical assistance within the Ministry of Health was created.

“This is a constituent meeting of the sectoral working group, with the main task to develop cooperation between the Ministry of Health and the international community, ensure coordination of the Ministry’s action plans and donor plans, as well as monitor sectoral reforms and the role of donor organizations,” stressed Minister of Health Maxym Stepanov.

The co-chairs of the sectoral working group have been appointed Ihor Ivashchenko, Deputy Minister for European Integration; and on behalf of international partners – Dr. Jarno Habicht, Head of the WHO Office in Ukraine.

Today’s meeting of the group was held online, and in addition to the leadership of the Ministry of Health, it was attended by representatives of almost 30 international organizations, including the WHO Office in Ukraine, the UN Office in Ukraine, the World Bank, the European Bank for Reconstruction and Development, the European Investment Bank and the Global Fund, the Delegation of the European Union to Ukraine, as well as embassies of different countries.

Following the meeting, the parties agreed to establish thematic subgroups that are responsible for priority areas of work. Apart from representatives of the Ministry of Health, subgroups will involve experts from state institutions and enterprises subordinated to the Ministry, representatives of relevant ministries, independent experts, etc.

The first meetings of the thematic subgroups are scheduled for August.

According to preliminary estimates, Ukraine may improve its position and rise by 10-20 steps in the ranking of Doing Business-2021, which characterizes the ease of doing business in the country. Last year, Ukraine ranked 64th out of 190 participating countries. The rating is compiled by World Bank experts.

Doing business from the World Bank is one of the most influential ratings, which serves as an additional marker for investors. This year, despite the impact and consequences of COVID-19, we have continued to work on important legislative changes that make investment easier, more secure and more attractive. Therefore, Ukraine has every chance to demonstrate improved positions, which will give a positive signal to new investors, both domestic and foreign, “said Minister of Economy, Trade and Agriculture Igor Petrashko.

Every year during the programming period, which lasts from May to May, World Bank experts determine the ranking of countries on 10 indicators. The change in Ukraine’s position in the ranking will depend on several factors. In particular, the number of changes that World Bank experts take into account in time during the study, the dynamics of achievements of other countries and whether the rating methodology will change as such.

Currently, the Ministry of Economy has conducted its own preliminary analysis of each of the 10 indicators to determine the possible position of Ukraine in the 2021 ranking.

“The Ministry of Economy has analyzed more than 30 legislative changes that were introduced in Ukraine during the programming period and may affect the country’s rating this year. In general, Ukraine is showing significant progress in all 10 components,” the Minister added.

The top three most effective updates include the protection of minority investors from abuse by owners of controlling stakes, which promises to improve Ukraine’s rating on the relevant component by 50 positions, as well as a significant simplification of registration of LLC, which can increase Ukraine by 15 positions on this component. Significant progress has been made in simplifying bankruptcy proceedings. According to this indicator, we claim 60 additional steps.

The positions in the rating will also be positively affected by changes in obtaining building permits, in particular, the abolition of the share contribution in the construction of industrial facilities; cheaper electricity connections by an average of 18.9% across the country, a number of deregulatory changes in the administration of taxes, according to which the Government intends to enter the TOP-30 in the coming years, and reduced trading time for both exporters and importers.

“In the end, two points of view are taken into account – the Government and local experts, which are based on the results of implementation, rather than the adoption of legislative changes. The first often takes longer than the rating cycle. Our goal is not a specific growth of Ukraine’s indicator in a specific year. We strive for sustainable development of entrepreneurship and constant growth of the country’s investment attractiveness,” explains Deputy Minister of Economic Development, Trade and Agriculture Dmytro Romanovych.

The calculations of the experts of the Ministry of Economy do not take into account the growth of other countries in the ranking, as well as this year’s planned updates of the criteria for assessing key indicators, on which the dynamics of Ukraine’s progress also depends.

On July 21, 2020, the IMF Technical Support Mission for Tax Policy was completed, which was held by video conference for almost three working weeks with the direct participation of representatives of the Ministry of Finance of Ukraine.

The scope of the Mission’s work included an analysis of recent changes in tax legislation on international taxation rules, in particular those introduced by the Law of Ukraine of 16.01.2020 № 466-IX “On Amendments to the Tax Code of Ukraine to improve tax administration, eliminate technical and logical inconsistencies in tax legislation “.

The experts considered the main tax innovations in the context of the implementation of the BEPS Action Plan: introduction of rules of controlled foreign companies, tools to prevent tax evasion and unjustified use of tax benefits; improving the rules for recognizing permanent establishments; improvement of transfer pricing control rules. The peculiarities of the possible implementation of the one-time voluntary declaration program in Ukraine, taking into account the experience of other countries, were discussed separately.

During the work, comments were provided on certain aspects of the implementation of these innovations, given the global experience in the application of these tax policy instruments. The experts’ proposals have practical value for the work of the Ministry of Finance and the State Tax Service on draft bylaws and clarifications on the practical application of tax innovations.

The Cabinet of Ministers of Ukraine extended the adaptive quarantine until August 31, 2020. The relevant decision was made by the Government at a meeting on July 22.

“Depending on the epidemic situation in the region or individual administrative-territorial units – districts, a green, yellow, orange or red level of epidemic danger of the spread of COVID-19 is set. The level is determined by automated software on the basis of certain algorithms and collected data and approved by the National Commission for Energy and Emergency Situations, “said Minister of Health of Ukraine Maksym Stepanov.

At the same time, the head of the Ministry of Health Maxim Stepanov stressed that even for the “green zone” certain quarantine restrictions continue to apply.

“All criteria are developed on the basis of our experience and the experience of Western partners …” Green zone “does not mean complete lifting of quarantine,” – said Maxim Stepanov.

Therefore, these are the following quarantine restrictions for the “green zone”:

– in public buildings it is mandatory to wear a mask or respirator;

– holding mass events can take place provided that no more than 1 person per 5 square meters is present;

– cinemas must be filled by no more than 50%;

– Passenger transport should only take place for seated passengers.

According to the decree, a region with a significant prevalence of COVID-19 is considered to be one that has at least one of the following features:

– bed occupancy in health care facilities designated for hospitalization of patients with a confirmed case of COVID-19 is more than 50%;

– the average number of PCR and ELISA tests is less than 24 per 100 thousand population in the last seven days;

– the rate of detection of cases of infection with COVID-19 is more than 11%;

– the rate of growth of COVID-19 infections is more than 10%.

Depending on the level of epidemic danger of the spread of COVID-19 in the region or individual administrative-territorial units, appropriate restrictive anti-epidemic measures are applied.

Note that the new resolution applies to the period from August 1 to August 31, 2020.