IFC Supports Reform of Ukraine’s Technical Regulations for Business

Kyiv, Ukraine, July 2008—IFC, a member of the World Bank Group, has published the results of a 2007 survey of the technical regulations system in Ukraine and its impact on the country’s economic development and consumer protection.

The survey found that the technical regulation system needs urgent reform. IFC identified key issues constraining enterprise development and economic competitiveness in Ukraine. These include mandatory compliance with state standards—applicable de facto to all goods and many services—and the mandatory certification of more than 400 types of goods and services, irrespective of their actual risk level to consumers.

Other constraints include the high number of business inspections, particularly at the production level, rather than at the marketplace where product safety and compliance with standards are ensured.

The survey also found that majority of existing standards originated during the Soviet era and are prescriptive, restrictive, and inconsistent with European standards. Also, technical regulations functions concentrated within one institution lead to conflicts of interest and prevent a focused approach to the issues.

The survey concludes that Ukraine’s World Trade Organization integration and the forthcoming negotiation of a free-trade agreement with the European Union offer exceptionally positive conditions for achieving a breakthrough in reforms.

Key recommendations include making most standards optional, keeping only safety requirements as mandatory, reducing the scope of mandatory certification, transitioning to a control system based on market checks and producer responsibility, and introducing international standards through simplified adoption procedures.

The survey was conducted in 2007 by the IFC Business Enabling Environment Project. The full document in both English and Ukrainian can be downloaded from the Project’s Web site at www.ifc.org/Ukraine/BEE.