Members of the Ukrainian Council of Business coalition, which includes 110 business associations from various sectors of the economy, analyzed draft law No. 9422 “On Amendments to Certain Legislative Acts of Ukraine on Improving State Regulation of Financial Services Markets” and note the following:
Several norms of this draft law do not relate to its general content regarding the regulation of credit relations in microcrediting, but provide for the exclusion of regulatory legal acts (NPAs) developed by the NBU regarding non-banking financial institutions from the scope of the Law of Ukraine “On the Basics of State Regulatory Policy in the Field of Economic activity”.
That is, regulatory legal acts for the non-banking financial market will be developed and approved without prior development of regulatory impact analysis and economic calculations, as well as without mandatory publication and consideration of comments and suggestions received from market participants.
Such a legislative innovation not only carries the risk of violating the interests of businesses operating in the non-banking financial market, but is generally an unacceptable precedent that a large industry actually remains without the possibility of business, public and professional associations participating in the development of regulatory documents that will determine them activity.
This contradicts the state’s goals of preventing the adoption of economically impractical and ineffective regulatory acts, reducing state interference in the activities of economic entities and removing obstacles to the development of economic activity, and will significantly change the balance between entrepreneurs and state bodies.
The changes in the process of development of the NPA, which will take place in the event of the adoption of these norms in draft law No. 9422, contradict EU regulations, legislation and the rule-making practice of EU member states and will lead to a violation of the rights of citizens, business entities and their associations. In European countries, public participation in the development of NPA is an integral part of the process of law-making and regulation.
We would also like to draw the attention of the country’s leadership that the position of business associations is shared by the State Regulatory Service of Ukraine, whose task is to maintain the balance of the interests of business and the state in the development of NPA, and the Ministry of Finance of Ukraine.
The main scientific and expert department of the Verkhovna Rada of Ukraine concluded that removing the regulatory acts of the National Bank of Ukraine from the sphere of regulation of the Law will not contribute to the implementation of such principles of implementation of the state regulatory policy defined in the current legislation, such as: expediency; balance; predictability; transparency and consideration of public opinion.
The Committee of the Verkhovna Rada of Ukraine on the Integration of Ukraine into the European Union notes in its conclusion that the introduction of such unfounded initiatives will lead to the implementation of regulatory competence in this area at the discretion of the department, which, in the conditions of the combination of powers to regulate two alternative markets in one regulatory body, will not allow to ensure the necessary balance of interests of subjects of the banking and non-banking sectors providing financial services, citizens and the state, and can also be considered as a violation of constitutionally established requirements“.
We believe that this approach to rule-making is not exclusively a separate problem of a certain industry, it is a step towards violating the rights of civil society in Ukraine.
Therefore, the members of the URB call on the President of Ukraine, the Chairman of the Verkhovna Rada of Ukraine and the Prime Minister of Ukraine, people’s deputies, representatives of state authorities to prevent the violation of European and democratic principles in relations between government and business when developing regulatory and legal acts and:
- to exclude from draft law No. 9422 the norms that remove the NBU from the effect of the law “On the principles of state regulatory policy in the sphere of economic activity”
- to consider the expediency of implementing the same conditions for the development of regulatory legal acts for all financial market regulators: the National Bank and the NKCPFR in accordance with the general procedure for the development of NPA projects in Ukraine – with their approval by the State Regulatory Service and registration with the Ministry of Justice.
Best regards
Business association
Members of the Ukrainian Business Council