INTEGRATION WITHIN ASSOCIATION: DYNAMICS OF THE
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INTEGRATION WITHIN ASSOCIATION: DYNAMICS OF THE EU-UKRAINE AGREEMENT IMPLEMENTATION Veronika Movchan Institute for Economic Research and Policy Consulting In the framework of the project Ukraines integration in the EU common market:
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INTEGRATION WITHIN ASSOCIATION: DYNAMICS OF THE EU-UKRAINE AGREEMENT IMPLEMENTATION Veronika Movchan
Institute for Economic Research and Policy Consulting
In the framework of the project "Ukraine’s integration in the EU common market: achievements in the frame of the Association Agreement and the need for modernization»
Kyiv, 2021<br>
Institute for Economic Research and Policy Consulting
In the framework of the project "Ukraine’s integration in the EU common market: achievements in the frame of the Association Agreement and the need for modernization»
Kyiv, 2021<br>
02
In economic integration, the Association Agreement contains: Arrangements envisaging the “direct action”
Example: abolition of import duties
Arrangements, the implementation of which requires Ukraine to fulfill certain commitments that in turn opens an opportunity for additional EU decisions to deepen integration
Example: conclusion of the ACAA
Arrangements, the implementation of which contributes to the creation of level playing field for fair competition of Ukrainian and European companies on the common market. These arrangements do not pave the way for additional decisions on deepening integration as a result of Ukraine's fulfillment of its obligations
Example: strengthening the protection of intellectual property rights<br>
Example: abolition of import duties
Arrangements, the implementation of which requires Ukraine to fulfill certain commitments that in turn opens an opportunity for additional EU decisions to deepen integration
Example: conclusion of the ACAA
Arrangements, the implementation of which contributes to the creation of level playing field for fair competition of Ukrainian and European companies on the common market. These arrangements do not pave the way for additional decisions on deepening integration as a result of Ukraine's fulfillment of its obligations
Example: strengthening the protection of intellectual property rights<br>
03
In focus: sectoral integration We identified 15 spheres, in which Ukraine have to implement certain commitments to pave the way for the EU decisions on deeper integration Technical barriers to trade
Sanitary and phytosanitary measures
Customs procedures
Financial services
Postal and courier services
Telecommunication services
Transport (5 sectors)
Energy (2 sectors)
Public procurement
Education (recognition of qualifications)<br>
Sanitary and phytosanitary measures
Customs procedures
Financial services
Postal and courier services
Telecommunication services
Transport (5 sectors)
Energy (2 sectors)
Public procurement
Education (recognition of qualifications)<br>
04
Technical barriers to trade Market: industrial goods
Method of integration: Conclusion of the Agreement on Conformity Assessment and Acceptance of industrial products (ACAA)
Current situation:
October 2020 - May 2021: pre-assessment expert mission to assess the readiness of legislation in the framework of assessing Ukraine's readiness to conclude the ACCA Agreement. The results of the mission indicate a high level of legal harmonization, however, it is not fully sufficient and requires further work.
Second half of 2021: expected launch of the assessment of the legislation implementation and quality infrastructure effectiveness
Further harmonization of legislation and development of quality infrastructure<br>
Method of integration: Conclusion of the Agreement on Conformity Assessment and Acceptance of industrial products (ACAA)
Current situation:
October 2020 - May 2021: pre-assessment expert mission to assess the readiness of legislation in the framework of assessing Ukraine's readiness to conclude the ACCA Agreement. The results of the mission indicate a high level of legal harmonization, however, it is not fully sufficient and requires further work.
Second half of 2021: expected launch of the assessment of the legislation implementation and quality infrastructure effectiveness
Further harmonization of legislation and development of quality infrastructure<br>
05
Sanitary and phytosanitary measures Market: agriculture and food products
Method of integration: decisions on recognition of equivalence in different sectors of agriculture and food industry
Integration: at the end of 2020, the EU recognized the equivalence of the control and certification system for Ukraine's cereal seeds
Current situation:
The Comprehensive Strategy for the Implementation of the SPS approved in November 2019 at the fourth meeting of the SPS Management Subcommittee
Further harmonization of legislation and infrastructure. For example, in 2021 the law "On veterinary medicine" was adopted
Ukrainian producers of animal-origin products actively exploit the opportunity of individual verification of establishments for exports to the EU<br>
Method of integration: decisions on recognition of equivalence in different sectors of agriculture and food industry
Integration: at the end of 2020, the EU recognized the equivalence of the control and certification system for Ukraine's cereal seeds
Current situation:
The Comprehensive Strategy for the Implementation of the SPS approved in November 2019 at the fourth meeting of the SPS Management Subcommittee
Further harmonization of legislation and infrastructure. For example, in 2021 the law "On veterinary medicine" was adopted
Ukrainian producers of animal-origin products actively exploit the opportunity of individual verification of establishments for exports to the EU<br>
06
Customs Market: all goods
Method of integration:
Joining the common transit system
Mutual recognition of authorized economic operators (AEO)
Current situation:
Ukraine has started granting the status of an authorized economic operators (AEO). One company has already received it, although the secondary legislation is not fully established undermining the benefits
Ongoing implementation of the NCTS that allows joining the common transit system. As of June 2021, this system operates in the national mode in parallel with the standard one<br>
Method of integration:
Joining the common transit system
Mutual recognition of authorized economic operators (AEO)
Current situation:
Ukraine has started granting the status of an authorized economic operators (AEO). One company has already received it, although the secondary legislation is not fully established undermining the benefits
Ongoing implementation of the NCTS that allows joining the common transit system. As of June 2021, this system operates in the national mode in parallel with the standard one<br>
07
Financial services Market: financial services
Method of integration: internal market treatment
Current situation:
At the beginning of 2020, the Strategy for the Development of the Financial Sector of Ukraine until 2025 was approved. It envisages the implementation of the remaining basic provisions of EU legislation required to obtain an internal market regime with the EU
Since July 1, 2020, the National Bank (NBU) and the National Commission on Securities and Stock Market (NCSSM) became responsible for regulating financial services. Natskomfinposlug stopped working
In July 2020, the Verkhovna Rada adopted a law on the introduction of new financial instruments, which implements the norms of EU acquis, including the relevant directive / regulation on markets for financial instruments MiFID II / MiFIR<br>
Method of integration: internal market treatment
Current situation:
At the beginning of 2020, the Strategy for the Development of the Financial Sector of Ukraine until 2025 was approved. It envisages the implementation of the remaining basic provisions of EU legislation required to obtain an internal market regime with the EU
Since July 1, 2020, the National Bank (NBU) and the National Commission on Securities and Stock Market (NCSSM) became responsible for regulating financial services. Natskomfinposlug stopped working
In July 2020, the Verkhovna Rada adopted a law on the introduction of new financial instruments, which implements the norms of EU acquis, including the relevant directive / regulation on markets for financial instruments MiFID II / MiFIR<br>
08
Telecommunications / digital market Market: digital market
Method of integration: internal market treatment
Current situation:
In the summer of 2020, as a result of the work of the EU expert mission, the report “On-the-spot assessment of commitments on telecommunications services under the Association Agreement between Ukraine and the EU” was published. As a result of which the Roadmap was updated.
At the beginning of 2021, Ukraine and the EU adopted a work plan in the field of electronic trust services, planned to be implemented over the next two years.
In January 2021, the law on "Electronic Communications" was signed. It will enter into force on January 1, 2022<br>
Method of integration: internal market treatment
Current situation:
In the summer of 2020, as a result of the work of the EU expert mission, the report “On-the-spot assessment of commitments on telecommunications services under the Association Agreement between Ukraine and the EU” was published. As a result of which the Roadmap was updated.
At the beginning of 2021, Ukraine and the EU adopted a work plan in the field of electronic trust services, planned to be implemented over the next two years.
In January 2021, the law on "Electronic Communications" was signed. It will enter into force on January 1, 2022<br>
09
Postal and courier services Market: postal and courier services
Method of integration: internal market treatment
Current situation:
Ukraine has not yet adopted a law to implement the provisions of Directive 97/67/EC. The draft law is currently in the parliament. It needs to be finalized as it does not fully comply with the Directive<br>
Method of integration: internal market treatment
Current situation:
Ukraine has not yet adopted a law to implement the provisions of Directive 97/67/EC. The draft law is currently in the parliament. It needs to be finalized as it does not fully comply with the Directive<br>
10
Transport Market: transport services
Method of integration:
International maritime transport: internal market treatment
Air Transport: Common Aviation Area Agreement
Domestic river / rail / road transport: possibility of concluding special agreements
Current situation:
In 2021, the Government approved an updated Action Plan for the implementation of the National Transport Strategy until 2030 "Drive Ukraine 2030", which was approved in 2018 and provides for deepening integration with the EU
In 2020, a law on inland water transport was adopted, which partially incorporates the provisions of all six EU directives relating to this mode of transport<br>
Method of integration:
International maritime transport: internal market treatment
Air Transport: Common Aviation Area Agreement
Domestic river / rail / road transport: possibility of concluding special agreements
Current situation:
In 2021, the Government approved an updated Action Plan for the implementation of the National Transport Strategy until 2030 "Drive Ukraine 2030", which was approved in 2018 and provides for deepening integration with the EU
In 2020, a law on inland water transport was adopted, which partially incorporates the provisions of all six EU directives relating to this mode of transport<br>
11
Public procurement Market: public procurement of goods and services
Method of integration: access to the market to the extent specified by the provisions of the AA
Current situation:
In 2020, a new version of the law on public procurement came into force, which approximates the legislation to the EU directives in accordance with the requirements of the second (out of five) stage of the Indicative Schedule of the AA in the field of public procurement.
The EU and Ukraine have not yet agreed on the formal completion of the first phase.
In 2020, a draft law registered in the Verkhovna Rada provides for the introduction of localization requirements for the part of public procurement that does not correspond to Ukraine’s obligations under the AA<br>
Method of integration: access to the market to the extent specified by the provisions of the AA
Current situation:
In 2020, a new version of the law on public procurement came into force, which approximates the legislation to the EU directives in accordance with the requirements of the second (out of five) stage of the Indicative Schedule of the AA in the field of public procurement.
The EU and Ukraine have not yet agreed on the formal completion of the first phase.
In 2020, a draft law registered in the Verkhovna Rada provides for the introduction of localization requirements for the part of public procurement that does not correspond to Ukraine’s obligations under the AA<br>
12
Energy Market: markets for energy goods and services
Method of integration: not clearly defined in the Association Agreement, occurs within the framework of the European Energy Community
Current situation:
Gas market: following the results of 2020, the Energy Community assessed the status of implementation of European acquis on the gas market in Ukraine as "almost completed" (84%). Ukraine has achieved a significant level of integration through the creation of a separate independent operator of the gas transmission system of Ukraine, agreements on cooperation of operators of gas transmission networks of Ukraine and neighboring EU member states and signing an agreement on gas transportation between Naftogaz and Gazprom based on EU rules
Electricity market: one of the main European integration tasks was on the agenda - joining the ENTSO-E network. In May 2021, the President signed a law allowing Ukrenergo to be certified as a European-style OSP<br>
Method of integration: not clearly defined in the Association Agreement, occurs within the framework of the European Energy Community
Current situation:
Gas market: following the results of 2020, the Energy Community assessed the status of implementation of European acquis on the gas market in Ukraine as "almost completed" (84%). Ukraine has achieved a significant level of integration through the creation of a separate independent operator of the gas transmission system of Ukraine, agreements on cooperation of operators of gas transmission networks of Ukraine and neighboring EU member states and signing an agreement on gas transportation between Naftogaz and Gazprom based on EU rules
Electricity market: one of the main European integration tasks was on the agenda - joining the ENTSO-E network. In May 2021, the President signed a law allowing Ukrenergo to be certified as a European-style OSP<br>
13
Education (recognition of qualifications) Market: labor market
Method of integration: Mutual recognition of qualifications and competencies
Current situation:
In June 2020, the government approved a new version of the National Qualifications Framework, which is in line with European qualifications.
The working group, in which the National Qualification Agency and the Ministry of Economy have a leading role, is working on changes in the content and functions of Classification of occupations, which should be harmonized with the international standard classification of occupations ISCO-08
In April 2020, the government approved an action plan for 2020-2027 to implement the Concept for the implementation of public policy in VET, which, among other things, provides for the adoption of regulations on qualification centers<br>
Method of integration: Mutual recognition of qualifications and competencies
Current situation:
In June 2020, the government approved a new version of the National Qualifications Framework, which is in line with European qualifications.
The working group, in which the National Qualification Agency and the Ministry of Economy have a leading role, is working on changes in the content and functions of Classification of occupations, which should be harmonized with the international standard classification of occupations ISCO-08
In April 2020, the government approved an action plan for 2020-2027 to implement the Concept for the implementation of public policy in VET, which, among other things, provides for the adoption of regulations on qualification centers<br>
14
Prospects for integration in 2021-2023 Signing of the Common Aviation Area Agreement
Mutual access to public procurement markets recognizing the completion of several stages of the Indicative Plan
Ukraine's accession to the European common transit system
Connecting to the ENTSO-E network
Conclusion of an agreement on mutual recognition of electronic trust services
Conclusion of the ACAA
Further recognition of the equivalence of certification systems for agro-food products
Mutual recognition of authorized economic operators<br>
Mutual access to public procurement markets recognizing the completion of several stages of the Indicative Plan
Ukraine's accession to the European common transit system
Connecting to the ENTSO-E network
Conclusion of an agreement on mutual recognition of electronic trust services
Conclusion of the ACAA
Further recognition of the equivalence of certification systems for agro-food products
Mutual recognition of authorized economic operators<br>
15
Further steps for Ukraine Continue to harmonize legislation within the framework of the Association Agreement taking into account:
Necessity for consultations with EU on compliance of draft regulations with the EU acquis before the adoption of these regulations
Necessity for further verification of compliance with changes in EU norms and practices
Necessity for dynamic adaptation to changes in EU legislation
Continue to implement the new legislation and develop institutions
Refrain from steps that violate the Agreement / destroy what has already been achieved
Modernize the Agreement in the light of changes in the global agenda, such as the emergence of the European Green Deal, and seek additional opportunities to deepen integration<br>
Necessity for consultations with EU on compliance of draft regulations with the EU acquis before the adoption of these regulations
Necessity for further verification of compliance with changes in EU norms and practices
Necessity for dynamic adaptation to changes in EU legislation
Continue to implement the new legislation and develop institutions
Refrain from steps that violate the Agreement / destroy what has already been achieved
Modernize the Agreement in the light of changes in the global agenda, such as the emergence of the European Green Deal, and seek additional opportunities to deepen integration<br>
16
Further steps for the EU Continue to provide technical and financial support to the Association Agreement implementation
Participate in consultations with representatives of Ukraine regarding the compliance of draft regulations with the EU acquis before the adoption of these acts
Carry out regular verification of compliance of adopted legislation and its implementation with EU norms and practices and publish assessments
Modernize the Agreement in the light of changes in the global agenda, such as the emergence of the European Green Deal, and provide additional opportunities to deepen integration<br>
Participate in consultations with representatives of Ukraine regarding the compliance of draft regulations with the EU acquis before the adoption of these acts
Carry out regular verification of compliance of adopted legislation and its implementation with EU norms and practices and publish assessments
Modernize the Agreement in the light of changes in the global agenda, such as the emergence of the European Green Deal, and provide additional opportunities to deepen integration<br>
17
Contacts @IER_Kyiv www.ier.com.ua Reytarska 8/5-A, Kyiv 01054, Ukraine
tel: + 38-044-278-6360
e-mail: institute@ier.kyiv.ua IER.Kyiv This study was prepared within the project "Ukraine’s integration in the EU common market: achievements in the frame of the Association Agreement and the need for modernization" implemented by the Institute for Economic Research and Policy Consulting in partnership with DiXi Group and the Resource and Analysis Center “Society and Environment” by financial support of the International Renaissance Foundation. This is the fourth edition, updated and expanded. The first three publications were carried out by the International Renaissance Foundation within the framework of the Public Synergy action with the financial support of the European Union.<br>
tel: + 38-044-278-6360
e-mail: institute@ier.kyiv.ua IER.Kyiv This study was prepared within the project "Ukraine’s integration in the EU common market: achievements in the frame of the Association Agreement and the need for modernization" implemented by the Institute for Economic Research and Policy Consulting in partnership with DiXi Group and the Resource and Analysis Center “Society and Environment” by financial support of the International Renaissance Foundation. This is the fourth edition, updated and expanded. The first three publications were carried out by the International Renaissance Foundation within the framework of the Public Synergy action with the financial support of the European Union.<br>