People’s deputies of Ukraine
Members of the Ukrainian Council of Business Coalition, which includes 111 business associations from various sectors of the economy, analyzed the draft Law on Amendments to Certain Legislative Acts of Ukraine on Placing Temporary Buildings for Business Activities and Vehicle Parking Areas, registered under No. 10308 and was entered on 01.12.23 note the following.
The specified draft of the Law was developed without taking into account the opinion of the public, and, in particular, the position of medium, small and micro enterprises. The proposed draft of the Law significantly worsens the situation of entrepreneurs who carry out their activities in temporary structures, which are already under the influence of unfavorable conditions in connection with Russia’s military aggression against Ukraine. Adoption of the proposed draft law will lead to the fact that the state will not provide stable conditions for conducting business activities for medium, small and micro enterprises.
According to experts from independent analytical centers and members of the coalition, the draft Law needs significant revision, namely:
– The draft Law introduces a two-stage procedure for placing temporary structures (TS), which will lead to additional costs for entrepreneurs and complicate administrative procedures. We offer to simplify the procedure – to provide all procedures in the “single window” mode.
– The comprehensive scheme must necessarily cover all existing vehicles that are placed on legal grounds, i.e. have contracts with the city authorities.
– Provision of a land plot for the placement of vehicles is carried out on a competitive basis for a period of 5 years. A period of 5 years is considered suboptimal, it is advisable to increase the period of use approximately twice.
– Holding an auction is necessary and appropriate only if there are several applicants for one place for placing a temporary structure or parking lot (this is evidenced by international experience). If no competing applications are received within a specified period (for example, 15 working days), the entrepreneur’s application is automatically approved. The amount of the fee is determined by the starting price according to the formula, based on the regulatory monetary valuation of the land in a given location (using the example of the already working mechanism of renting state and communal property).
– If a pavilion (temporary structure made of light structures with solid walls and a roof, which requires professional installation, finishing works, connection to networks, etc.) is installed on the site, the auction can be held, but on the condition that:
– After the expiration of the current contracts. Termination of contracts, as proposed by draft law No. 10308, is counterproductive and will cause massive lawsuits and court decisions against the state.
– In the terms of the auction, mechanisms for compensation of monetary losses incurred by the entrepreneur during the construction of the object, its connection to electricity, water, gas, and heat supply networks, and improvement of the adjacent territory should be laid down. These detailed mechanisms can be developed by the Resolution of the CMU.
– The auction may not be held if the entrepreneur agrees to the average rent for the settlement, based on the results of similar auctions for similar lease terms.
– In accordance with the best global practices – the comprehensive scheme for placing temporary structures should be open and accessible to entrepreneurs, so that the entrepreneur who wants to place a temporary structure has the opportunity to check the availability of a place for placing a temporary structure and determine its starting price
– It is proposed to finance the formation of land plots for the installation of temporary structures at the expense of entrepreneurs who wish to install temporary structures. According to the current version of the project #10308, this is expected at the expense of local budgets, which will lead to significant losses of local budgets and additional bureaucracy. It is necessary to provide for the framework conditions of contracts between entrepreneurs and local authorities (conditions for early termination, dismantling, etc.). In the current version of the project, it is proposed to transfer it to the CMU.
Taking into account the above, we urge you to include representatives of the Ukrainian Business Council in the working group regarding the development of Draft Law No. 10308 and take into account the business proposals outlined in the letter.
Best regards,
Members of the Ukrainian Business Council