In 2018, the Business Ombudsman Council received 1792 complaints from entrepreneurs and closed 1439 cases, which is respectively 9% and 34% as many as compared to 2017. The BOC managed to reach the 97% applicants satisfaction rate. State bodies implemented 94% out of 2185 case-by-case recommendations addressed to them in 2015-2018.
Ukrainian companies filed the majority of complaints (85%). Inquiries predominantly came from small and medium businesses (73%). The most active industries were wholesale (29%), manufacture (13%), agriculture and mining (10%), real estate (9%), and individual entrepreneurs (7%).
Traditionally, tax issues (61%), actions of law enforcement bodies (14%), malpractice by state regulators (7%) and local municipalities (4%) constituted vast majority of complaints. Within those four groups, the BOC observed both positive and negative developments. Among the positive were overall decline in the number of complaints on state regulators and local municipalities, significant reduction of inquiries related to VAT refund and activity of the State Security Service. On the other hand, there was a notable increase of complaints related to imposition of ungrounded additional taxes and penalties as a result of tax inspections, growth of complaints linked to tax criminal cases, as well as activity of National Police and General Prosecutor’s Office.
Apart from helping businesses in terms of individual complaints, the BOC’s mandate implies identifying and solving systemic issues affecting quality of business environment in Ukraine. Throughout 2015-2018, the BOC published 13 systemic reports with 249 recommendations to government agencies. At the end of 2018, the implementation rate was 41%, which means that almost every second systemic advice of the BOC was followed by its recipient. Public agencies that demonstrated the best implementation rate are the State Architectural and Construction Inspectorate (100%), the Cabinet of Ministers of Ukraine (67%), the National Energy and Utilities Regulatory Commission (57%), the Ministry of Economic Development and Trade (53%), and the National Agency on Corruption Prevention (50%). On the contrary, the Verkhovna Rada, the Ministry of Regional Development, the Ministry of Finance, the State Fiscal Service performed low in terms of fulfilling the BOC’s systemic recommendations.
There were several noteworthy systemic wins of 2018 based on the BOC’s recommendations to state agencies. To mention a few, the law known as #MaskShowStop2, expanding mechanisms for challenging illicit actions or inactions on the part of law enforcers and bringing them to personal liability, came into force. The Verkhovna Rada adopted the Law “On Currency and Currency Transactions" and effectively abolished special sanctions in export/import operations. State registrars are no longer able to carry out registration actions with immovable property with the breach of territoriality rules due to software/technical changes implemented by the Ministry of Justice. The National Energy and Utilities Regulatory Commission approved fixed rates for getting hooked up to electricity, with the price to be calculated based on the quantity of power capacity declared by the customer. State Architectural and Construction Inspection launched online tools which contain all documented information about the construction, thereby increasing customer usability and eliminating risks of abuse. The law introducing a “single window” approach to customs clearance has become effective, thus ensuring fulfillment of the respective recommendations set forth in the BOC’s systemic reports on international trade and customs.
“When it comes to summing up our results, we prefer figures to speak for themselves. Over the past 4 years of the BOC’s operations in Ukraine, we received more than 5000 complaints from businesses and closed around 3000 cases. The Council helped companies recover over UAH 13.3 bn, cease hundreds of episodes of state bodies’ malpractice, close dozens of ungrounded criminal cases, obtain licenses and permits. A lot has already been done, but we never catch a break and keep on monitoring the implementation of our recommendations, as well as selecting next systemic topics for analysis”, Algirdas Šemeta, Business Ombudsman, sums up the results of 2018.
The Annual Report 2018 is available here.