Anti-Corruption Reform

PROJECT MANAGEMENT OFFICE

NATIONAL REFORMS COUNCIL

REFORMS MONITORING PROGRESS 9 Months, 2015

TABLE OF CONTENTS

THE RESULTS OF THE NATIONAL REFORMS COUNCIL'S ACTIVITY FOR 9 MONTHS OF 2015...... 6

ANTI-CORRUPTION REFORM...... 12

PUBLIC PROCUREMENT REFORM...... 16

DECENTRALIZATION REFORM...... 19

LAW ENFORCEMENT REFORM...... 24

DEREGULATION...... 26

HEALTHCARE REFORM...... 30

TAX REFORM...... 33

PUBLIC ADMINISTRATION REFORM...... 35

FINANCIAL SECTOR REFORM...... 38

EDUCATION REFORM...... 41

ENERGY SECTOR REFORM...... 44

STATE OWNED ENTERPRISE GOVERNANCE REFORM...... 47

AGRICULTURAL SECTOR REFORM...... 50

JUDICIAL REFORM...... 53

CONSTITUTIONAL REFORM...... 55

NATIONAL SECURITY AND DEFENCE REFORM...... 57

UKRAINE PROMOTION PROGRAM...... 60

...... APPENDIX 63 3 INTRODUCTION

Society’s perception of reforms doesn’t always fully reflect the fulfillment of reform action plans within government. Reform scorecards show real progress but ordinary people express disappointment. When sociologists asked people to evaluate whether they perceive any changes as a result of reforms, respondents were mostly critical. Although progressive changes are occurring, the situation is still not acceptable for Ukrainians. The highest positive evaluation was given by the public to the following reforms: army and national security, promotion of Ukraine globally, police reform, and decentralization. The least confidence was expressed in anticorruption reform, judicial reform, reform of public administration, and health care reform.

The National Reforms Council was not established to prepare optimistic bi-monthly reports. If this were the case, we would never have received recognition and support from international donors and partners. The Council’s key task is to facilitate positive changes not under pressure from the IMF, the EBRD or the EU but, first of all, for the Ukrainian people. Technocratic reform progress should be aligned with positive changes ordinary Ukrainians feel in their everyday lives. This is our focus going forward.

A significant number of positive results have been achieved over the past nine months. These results are a strong foundation for further changes. Successful reforms in policing and public procurement have been spread to the deregulation process. The Better Regulation Development Office was created to analyze and improve the efficiency of regulation in various areas, primarily in relation to small and medium-sized businesses.

Dmytro Shymkiv, We have completed comprehensive discussion of the tax reform concepts. During a National Reforms Council meeting, we heard proposals from the Ministry of Finance, the Parliamentary Committee, and civil society experts. The search for compromise is underway. Deputy Head of the Presidential For the first time, the National Reforms Council held a meeting focused solely on anticorruption reform. Establishment of key anticorruption Administration of authorities and institutions will soon be finalized. We have made significant progress in establishing the National Anticorruption Bureau, recruiting Ukraine, Secretary of the the first detectives, and reaching compromise regarding establishment of the National Anticorruption Agency. Our next priority steps are the creation of the Anticorruption Prosecutor’s Office, approval of staffing of the National Anticorruption Policy Council, and commencement of the National Reforms Council Bureau’s activity.

In this report, you will find a detailed description of the progress of reforms as well as and the most pressing challenges. It is essential that the citizens of Ukraine are actively engaged in implementing changes.

Participative democracy is now reflected in electronic petitions to the President of Ukraine. They clearly reflect the vital issues thatareso concerning the people of Ukraine. Quite often these issues are exactly the topics we have identified as priority reforms.

Our main task is to make these changes completely irreversible to honor those who have given their lives for the chance to make a better country. Slava Ukrajini!

4 5 RESULTS OF THE NATIONAL REFORMS COUNCIL DURING 9 MONTHS 2015

6 RESULTS OF THE NRC DURING 9 MONTHS 2015

The National Reforms Council (NRC) was established as a platform to discuss and implement vital steps in building the new Ukraine. NRC members are key national decision makers: the President, the Prime Minister, the Chairman of the Parliament, Ministers, Chairs of Parliamentary committees, and four representatives of civil society. NRC meetings are also attended by the leaders of parliamentary coalition factions and heads of other government authorities who are invited depending on the meeting’s agenda.

Since the first meeting of the National Reforms Council on December 24, 2014,13 meetings have been held, 172 decisions were taken, and more than half of these have already been implemented. Five more meetings are planned by the end of 2015.

The main results of the National Reforms Council are the following:

• NRC provides a system to coordinate and set standards in reporting on design and progress of reforms. The strategic vision “Strategy 2020” has been approved, along with goals and KPIs for reforms. 18 priority reforms and identification of those responsible for their implementation have been determined. 18 Reform Task Forces (RTF) were also established as a monitoring system on progress (for monitoring system details see Appendix). NRC, with the support of its Project Management Office, plays an important role in systematization of information on reforms, thus providing a comprehensive view on the reform process. With RTFs and the responsible ministers’ participation “Reform Passports” have been developed and reform action plans and logic models are under development.

• NRC provides a platform for finding political consensus on the content and pace of reforms as well as for consolidating opinions and efforts of key stakeholders. NRC meetings provide a unique opportunity to share information, explain reform content and receive feedback from key decision makers. Consensus has been found inter alia on reforms related to: anti-corruption, the Prosecutor’s Office, railways, education, public procurement, decentralization, and the financial sector.

• NRC ensures engagement of civil society in decision-making and provides transparency of the reforms process. Four representatives of civil society are NRC members. Ukrainian and international experts, as well as civil activists, are invited to NRC meetings, depending on the agenda of the meeting. All materials and decisions are published on the NRC website www.reforms.in.ua (www.reforms.org.ua)

• NRC acts as a moderator of controversial issues. Different proposals on tax reform have been presented at NRC meetings and steps were made to agree on key positions. NRC acted as a mediator between the Ministry of Health and Ministry of Regional Development and Construction to align the concept of healthcare reform with decentralization strategy. NRC also facilitated discussion between the Ministry of Health and the relevant Verkhovna Rada committee on the issue of draft laws on autonomy of hospitals.

• NRC plays a key role in communicating reforms both to society and political leaders. NRC’s status as a neutral, honest and objective entity creates widespread credibility, bringing attention to key reforms even if they are controversial. For example, NRC ensured broad dialog on public administration reform and works to push healthcare reform on the national political agenda.

[1] Presidential Decree #5 of 12.01.2015. 7 NRC MEETING #11

Anti-corruption reform, September 18, 2015 As a result of decisions made at the NRC meeting:

• The following draft laws were adopted: - In the first reading: package of draft laws on establishment of a specialized agency to identify, seize and return stolen assets; - In the second reading: Law on the Prosecutor’s Office (determining provisions for a specialized anti-corruption Prosecutor’s office), law on financing of political parties, law on transparency of property registers. • The National Council for Anti-corruption Policy was established.

• Different reform aspects were also discussed during other NRC meetings (including meeting #13 on implementation of Ukraine’s commitments under international agreements and obligations to implement a Visa Liberalization Action Plan), thus attracting attention of key stakeholders to the issue of anti-corruption.

NRC MEETING #13

Education reform, October 5, 2015 Political consensus was reached on key reform milestones:

• Preservation of standardized external testing • Transition from 11 to 12-year system of general secondary education • Comprehensive reform of education content (including launching a competence-based approach and modernizing curricula) • Voluntary certification of teachers at independent testing centers • Optimization of schools network • Favorable conditions for private capital • Decentralization of management and increase of employers’ participation in vocational training • Transferring financial support for scientific research from state budget to a grant basis via Ukrainian State Fund for Fundamental Research

8 NRC MEETING #9

Railway reform, July 23, 2015

The meeting approved key reform parameters:

• Completed establishment of Public Joint-Stock Company “Ukrzaliznytsia (Ukrainian Railways)” (corporatization) and a new organizational structure. • Introduction of new management model that complies with structural changes and the EU legislation; separation of railway infrastructure and infrastructure operators; transferring of railway tariffs regulation to an independent regulator – National Commission for Transport Regulation. • Efficient and transparent procurement system. • Change of the tariff system.

NRC MEETING #6

Public procurement reform, May 15, 2015 Key principles and stages of the reforms have been agreed:

1. Implement a pilot project of e-procurement (Prozorro). 2. Prepare to scale up e-procurement for all procurement to EU thresholds (legal documents, IT, education). 3. Carry out phased transition to e-procedures for all public procurement.

As result of the meeting, a draft law “On Public Procurement” (#2087а) was adopted by the Verkhovna Rada in the second reading. A plan to implement e-appeals during e-procurement was also developed.

All central executive bodies have joined the e-procurement systems (including Prozorro) as a result of solid implementation of this NRC decision.

9 MONITORING OF REFORMS PROGRESS

10 REFORMS SCORECARDS AND INDICATORS

24,6% 19,6% 15% 32,9% 23,5%

ANTICORRUPTION JUDICIAL DECENTRALIZATION PUBLIC ADMINISTRATTION DEREGULATION EVALUATION

45% 64% 76% 33% 56% BY RESPONSIBLE MINISTRIES AND NRC PROJECT OFFICE 44,3% 60,8% 16,1% 23,5% 26,6%

NATIONAL SUCURITY LAW ENFORCEMENT HEALTH CARE TAX ENERGY EFFICIENCY AND DEFENCE

41% 55% 55% 69% 31%

49,9% 21,4% 28% 20,1% 24%

UKRAINE PROMOTION STATE OWNED AGRICULTURAL EDUCATION PROGRAM ENTERPRISE FINANCIAL SECTOR

65% 80% 59% 82% 69%

Survey conducted by the Y% TNS agency on a monthly 32,4% 26,5% PERCEPTION (TNS) basis. Y% of citizens see the changes

Age of respondents: 18-55 Question asked: How would you evaluate the PROGRESS 2015 reforms progress? CONSTITUTIONAL PUBLIC PROCUREMENT REFORM According to plan Blue segment: people, who answered that Risk zone Х% the changes really exist 56% 52% Out of plan Х% — tasks execution progress Red color represents those who doesn’t see any changes 11 ANTI-CORRUPTION REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Electronic system of filing, disclosure and verification of asset declarations of public officials

Merit-based human resource system in the public service that eliminates nepotism, promotes integrity and provides fair remuneration Effective mechanisms for prevention of Reduced impact of private equity on policy through the introduction of public funding of parties and corruption are established in public and transparency and accountability of party finances private sectors Effective system of identifying and eliminating corruption risks, including introduction of e-governance tools

Effective system of business compliance Corruption must be eliminated as a risk to the country’s national security and All persons found guilty of corruption, subjected proportionate sanctions and removed from service barrier to sustainable economic development Effective system of seizure and confiscation of illicit assets Inevitability of responsibility and punishment for corruption is ensured System of integrity checks and lifestyle monitoring for all civil servants, illegal enrichment is punishable Specialized anti-corruption agencies and courts are economically and politically independent in their operations

Citizens, business and bureaucrats aware of the phenomenon of corruption, its social damage and personal liability, as well as the methods of fighting and preventing corruption Society professes "zero tolerance" to Significantly reduced susceptibility and tolerance to acts of corruption corruption Proactive watchdog mechanisms enabling citizens, civil society and independent media to partici- pate in the exposure of corruption

Reform passport – a brief review of the reform, of its targets and expected results, based on the key strategic documents: Sustainable development Strategy “Ukraine 2020”; the Coalition agreement; the Program of the Ukrainian Government; the Association Agreement between the EU and Ukraine (including DCFTA); Ukraine – IMF Memorandum.

12 REFORM PASSPORT ANTI-CORRUPTION REFORM

Progress to date: acting criminal corruption violations, which are per- document packages submitted by National Corrup- central government web-portal and associate web petrated by the top officials that threaten the nation- tion Prevention Agency membership contenders, sites, and calls, for instance, for the obligatory publi- • The Government approved the State Anti-Corrup- al security. The Anti-Corruption Bureau is supposed and started holding individual interviews. The selec- cation of public procurement databases, the register tion Strategy Implementation Program for years to become the key agency to suppress corruption tion of candidates is expected to be finished by late of legal entities, the city development documents, 2015 to 2017 setting out the core tasks within the in top tiers of the Government. The staff of the Na- October. etc. The Law substantially curtails opportunities for scope of the Anti-Corruption reform for the three tional Anti-Corruption Bureau has been hired since • The Law of Ukraine “On Prevention of Corruption” corrupt practices. years, and specifying responsible parties and dead- June 2015. The current plan provides for staffing the (# 1700-VI of October 14, 2014) introduced a new • The Ministry of Justice of Ukraine has launched an lines. The draft program was discussed with the head office of the Bureau of 506 officers by the year system of financial control calling for the replace- updated register of perpetrators of corruption public, and was supported by experts and interna- end. The selection process takes place with the in- ment of paper-based declarations of assets, income, violations. Earlier, the register could have been tional organizations. The program is placed on the volvement of members of the Public Control Council expenses and financial liabilities of public officials searched by the last name only; currently, the search web site of the Ministry of Justice. set up by the open vote. The first 70 detectives were with property, income, expense and financial liabil- can be based on the first name, the patronymic, the • The membership of the National Anti-Corruption chosen and started a 5-week training course on ities declarations of persons authorized to perform place of work at the time of the corruption violation, Policy Council was approved with a Presidential September 7; after that, they will be ready to start functions of the state or local self-government to the nature of the violation, and the type of the pun- Decree. The Council was established in 2014 as a investigating. be submitted via the official web site of the National ishment or penalty. More information is now made board of advisers to the President of Ukraine. Musta- • On March 18, 2015, the Cabinet of Ministers of Agency for Corruption Prevention. Declarations are public as a result of the search. It will also be pos- fa Dzhemilev was appointed the Head of the Council. Ukraine adopted a resolution to establish the Na- to be submitted in the electronic form and published sible to download a file with the information about The following are the core tasks of the National An- tional Corruption Prevention Agency. On March in a Universal State Register on the National Agen- persons that made it into the register recently. At ti-Corruption Policy Council: 1) to prepare and sub- 25, 2015, the Cabinet of Ministers of Ukraine issued cy for Corruption Prevention’s web site (except for the moment, the register is working in a test mode mit proposals on defining, updating and improving resolutions needed to hold a contest for the selection some details). to make sure that technical issues are detected and the Anti-Corruption strategy; 2) to carry out systemic of National Corruption Prevention Agency members. • On July 2, the Verkhovna Rada (Parliament) adopted made good. analysis of the situation with the corruption preven- The National Corruption Prevention Agency will be- amendments to the law on the public prosecution • On April 14, the Rada adopted amendments to some tion and suppression in Ukraine, the efficiency of the come the central executive agency in charge of the system to specify, for instance, the procedure of the laws of Ukraine to improve transparency in the implementation of the Anti-Corruption strategy, the development and the implementation of the state establishment of the Specialized Anti-Corruption field of property relations for the purposes of measures taken to prevent and counteract corrup- Anti-Corruption policy. Functions of the agency Public Prosecution Office (SAPPO). The Special- the prevention of corruption to open up registers of tion; 3) to prepare and submit agreed proposals on include the analysis of the status of the corruption ized Anti-Corruption Public Prosecution Office is owners of the property, vehicles and land. The Law the improvement of the co-ordination and interac- suppression in Ukraine, the development of the supposed to oversee the pre-trial investigations of must improve the openness of public property regis- tion among entities taking measures in the field of draft Anti-Corruption Strategy, the research into the the National Anti-Corruption Bureau, and prosecute ters, so that citizens gain access to the information the corruption prevention and suppression; 4) to corruption situation, the maintenance of universal cases in courts. According to the Law, the head of about owners of registered vehicles and real estate, assess the status and support he implementation registers of declarations made by officials and of the SAPPO and other officers must be appointed as a and the complete information about land plots from of recommendations of the Group of States against perpetrators of corruption violations, the co-oper- result of an open tender by a commission consisting the State Land Cadaster (including, importantly, the Corruption (GRECO), the Organization for Econom- ation with corruption whistleblowers, etc. Five Na- of 4 representatives of the Prosecutor General Office information about land plot owners and users). This ic Cooperation and Development (OECD), and other tional Corruption Prevention Agency members were and 7 representatives nominated by the Verkhovna Law would contribute to the public control over the leading international organizations in respect of pre- supposed to be elected by late April, but the process Rada. The Verkhovna Rada appointed its 7 represen- payment of taxes by officials, and the openness and venting and suppressing corruption, and to improve got delayed. In August 2015, the Ministry of Justice tatives on September 17; the 4 representatives of the transparency of local governments and executive the efficiency of Ukraine’s international co-operation took the lead in setting up the National Corruption the Prosecutor General Office were delegated even agencies. The Law came into effect from October 6, in this field; 5) to foster scientific and methodological Prevention Agency by resolving the public conflict re- earlier. The contest commission started working on 2015. support in the field of the corruption prevention and garding the setup of the contest commission for the September 21, and is going to complete the SAPPO • On October 8, the Rada approved the draft Law suppression. The Council held met for the first time selection of National Corruption Prevention Agency Head selection process by early December. on the amendment of some legislative acts of on September 21. members: Four representatives of the public were • On April 9, 2015, a law on the access to the infor- Ukraine to prevent and suppress political cor- • On April 16, the President appointed Artem Sytnyk re-elected to the commission on August 28 as a re- mation in the form of open data was adopted ruption aimed at introducing direct public funding of as Director of the National Anti-Corruption Bu- sult of a transparent and open process. On Septem- (the bill was developed by civil society experts and political parties starting from the year 2017. The draft reau as a result of an open and transparent contest. ber 2, the Cabinet approved the membership of the submitted to Verkhovna Rada by the President of Law defines criteria for the parties to be financed The National Anti-Corruption Bureau is a special commission chaired by the first deputy Minister of Ukraine). The Law introduces the notion of open from the state budget, the relevant expense items, state law enforcement agency tasked with counter- Justice. The Commission has already analyzed the data, provides for the publication of such data on a and specifies the ceiling limits for annual contribu-

REFORM PROGRESS 13 ОНОВЛЕННЯANTI-CORRUPTION ВЛАДИ REFORM ТА АНТИКОРУПЦІЙНА РЕФОРМА

tions to parties made by legal entities and individuals. the Specialized Anti-Corruption Public Prosecu- the transparency of local governments and executive monitoring over public officials. • On October 8, a package of draft laws on the estab- tion Office (SAPPO). According to the Law, the head agencies. The Law came into effect from October 6, • The Anti-Corruption Strategy for years 2015 to 2017 lishment of a specialized public institution in of the SAPPO and other officers must be appointed 2015. calls for establishing (specifying) an extra-judicial charge of the search for, and disposal of, assets as a result of an open tender by a commission con- • On October 8, the Rada approved the draft Law on mechanism of oversight in the field of access to in- obtained from corruption and other offenses was sisting of 4 representatives of the Prosecutor General the amendment of some legislative acts of formation. So far, no central agency in charge of over- approved in the first reading. It also provides for the Office and 7 representatives nominated by the Verk- Ukraine to prevent and suppress political cor- sight has been appointed. introduction of appropriate amendments into the hovna Rada. The Verkhovna Rada appointed its 7 rep- ruption aimed at introducing direct public funding of No draft Law on the procedure of the integrity check of Criminal Procedural Code as regards specific issues resentatives on September 17; the 4 representatives political parties starting from the year 2017. The draft individuals authorized to exercise state or local self-gov- of the property garnishment, and into the Criminal of the Prosecutor General Office were delegated even Law defines criteria for the parties to be financed ernment functions has been submitted to the Verkhov- and Civil Codes aimed at improving the mechanism of earlier. The contest commission started working on from the state budget, the relevant expense items, na Rada, although the program documents provide for the special forfeiture in order to eliminate corruption and specifies the ceiling lim- this to be done. In August 2015, the Ministry of Justice risks. Thanks to these laws, corrupt officials will not its for annual contributions sent the draft law to the European Commission for De- be able to conceal their assets by re-registering them The Ministry of Justice of Ukraine has launched an updated to parties made by legal en- mocracy through Law (Venice Commission) seeking in names of nominee owners or offshore companies. register of perpetrators of corruption violations. tities and individuals. an opinion on its conformity with European standards. The newly established agency will be able to prompt- On October 8, a package ly garnish, appraise and sell property, and channel of draft laws on the estab- Ongoing high-priority actions to accelerate the funds into the special fund of the state budget. This September 21, and is going to complete the SAPPO lishment of a specialized public institution in reform: will prevent corrupt officials from withdrawing as- Head selection process by early December. charge of the search for, and disposal of, assets sets from the garnishment and avoiding liability. • The Ministry of Justice of Ukraine has launched an obtained from corruption and other offenses was • Complete training of the first group of National An- updated register of perpetrators of corruption approved in the first reading. It also provides for the ti-Corruption Bureau detectives. Continue hiring offi- Including also the 3rd Quarter: violations. Earlier, the register could have been introduction of appropriate amendments into the cers to investigation and administrative jobs on the searched by the last name only; currently, the search Criminal Procedural Code as regards specific issues National Anti-Corruption Bureau staff. • The National Anti-Corruption Bureau has been staffed can be based on the first name, the patronymic, the of the property garnishment, and into the Criminal • Complete the selection of five National Corruption since June: The first 70 detectives were chosen and place of work at the time of the corruption violation, and Civil Codes aimed at improving the mechanism of Prevention Agency members. Set up the minimum started a 5-week training course on September 7; af- the nature of the violation, and the type of the pun- the special forfeiture in order to eliminate corruption staff of the Agency for it to start operating. ter that, they will be ready to start investigating. ishment or penalty. More information is now made risks. Thanks to these laws, corrupt officials will not • Appoint the head of the Specialized Anti-Corruption • In August 2015, the Ministry of Justice took the lead public as a result of the search. It will also be possible be able to conceal their assets by re-registering them Public Prosecution Office, and the minimum required in setting up the National Corruption Prevention to download a file with the information about persons in names of nominee owners or offshore companies. number of Anti-Corruption public prosecutors to Agency by resolving the public conflict regarding the that made it into the register recently. At the moment, The newly established agency will be able to prompt- support investigations run by the Anti-Corruption setup of the contest commission for the selection of the register is working in a test mode to make sure ly garnish, appraise and sell property, and channel Bureau. National Corruption Prevention Agency members: that technical issues are detected and made good. funds into the special fund of the state budget. This • Adopt a package of draft laws on the establishment of Four representatives of the public were re-elect- • On April 14, the Rada adopted amendments to some will prevent corrupt officials from withdrawing as- a special agency for the search for, and the recovery ed to the commission on August 28 as a result of a laws of Ukraine to improve transparency in the sets from the garnishment and avoiding liability. of, the stolen assets, and the introduction of appropri- transparent and open process. On September 2, the field of property relations for the purposes of ate amendments into codes to regulate mechanisms Cabinet approved the membership of the commis- the prevention of corruption to open up registers of What hasn’t yet been acheived: of the garnishment and the special forfeiture of the sion chaired by the first deputy Minister of Justice. owners of the property, vehicles and land. The Law property of criminal origin in the second reading. The Commission has already analyzed the document must improve the openness of public property reg- • A delay with setting up the Specialized Anti-Corrup- • Open up registers of owners of the real estate, vehi- packages submitted by National Corruption Preven- isters, so that citizens gain access to the information tion Public Prosecution Office rendered the Anti-Cor- cles and land plots, and ensure their operation in action Agency membership contenders, and started about owners of registered vehicles and real estate, ruption Bureau unable to start investigating corrup- cordance with requirements of the law. holding individual interviews. The selection of candi- and the complete information about land plots from tion violations in spite of having detectives for doing Develop a plan for the Anti-Corruption communication dates is expected to be finished by late October. the State Land Cadaster (including, importantly, the so. campaign. Hold an international Anti-Corruption con- • On July 2, the Verkhovna Rada adopted amendments information about land plot owners and users). This • A delay with setting up the National Agency for Cor- ference in Kyiv on November 16. to the law on the public prosecution system to speci- Law would contribute to the public control over the ruption Prevention postpones the commencement fy, for instance, the procedure of the establishment of payment of taxes by officials, and the openness and of the operation of the new system for the financial

14 REFORM PROGRESS ANTI-CORRUPTION REFORM

45% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 Anticorruption Bureau has finalized investigations; State Programme for implementation Transparency International Corruption Perception National Anticorruption Bureau is launched at least 20% of assets under arrest are confiscated, of 2014-2017 Anticorruption Strategy is 100% 75% Index ranking of Ukraine grew significantly and and functioning including assets located abroad (after the Bureau approved approaching the target been launched)

Group of Countries against Corruption REFORM Specialized Anticorruption Prosecution is All declarations of public officials have been verified (GRECO) positively assess situation with 0% 83% PERCEPTION launched and functioning according to the Law on Prevention of Corruption recommendations implementing regarding the level of corruption

Web portal of open data functions. Public data are 19,6% National Agency for Prevention of Corruption available on web portal in the scope defined by 38% Level of trust in NABU is launched and functioning Cabinet of Ministers and in the format, which is suitable for free access and processing 80,4% Reformed system of financial control of Following registers are available in open data format Share of respondents who had experience of bribery assets and incomes of public officials is 0% and updated on a regular basis: 1) Unified register (were solicited for a bribe or offered/gave a bribe) launched of businesses, 2) public procurement data, 3) public (35%, TNS) THE CITIZENS THINK THAT: funds data (Law «On open public funds data»), NO CHANGES 4) unified register of asset declaration of public CHANGES EXIST Legislation on financing of political parties officials, 5) data base of National Commission for Society evaluates anticorruption efforts as effective and election campaigns is reformed, 75% foreseeing public financing of political parties Securities and Stock market (19.6%, TNS)

Draft law on access to publicly important information in open data format is adopted; 75% independent state supervisory body for Survey conducted by the access to public information identified TNS agency on a monthly basis. Draft law on integrity checks of public 25% officials is adopted Age of respondents: 18-55 Question asked: How would you evaluate the reforms progress? Blue segment: people, who answered that the changes really exist

Red color represents those who doesn’t see any changes

THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 SCORECARD IN TIME RISK ZONE OUT OF TIMING 15 PUBLIC PROCUREMENT REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Phased transition to electronic auctions

Legislative support electronic auctions and implementation of necessary interna- TRANSPARENCY OF PP tional standards through launching electronic auctions and monitoring BI introduction, statistics and analytics

External monitoring and risk assessment system

Effective complaints system

COMPETITIVENESS create faith among Gathering and publication of business intelligence businesses in fair PP processes and promote the new PP system Proactive Involvement of suppliers Into biddings The best public procurement (PP) system in Europe to ensure efficient Facilitating the access of businesses to PP public spending

e-learning & e-testing followed by voluntary certification of PP

PROFESSIONALIZATION of PP officers through training and law Pro active law clarifications clarification

Standard specifications for procurement objects

JOINING TO WTO GPA and development of export capacity

16 REFORM PASSPORT PUBLIC PROCUREMENT REFORM

Progress to date:

• ProZorro electronic public procurement system was developed and launched. • By October 1, 2015, there were more than 980 public procuring entities; tenders were announced to the tune of more than UAH 4 billion; savings averaged 12 to 18 percent. These figures are more than three times as much as Tentative savings amount to approximately UAH 300 million. in the second quarter. • New functions of a dedicated department in the Ministry of Economic Development and Trade were formulated and agreed; the new department structure was determined; a new team, including 10 new specialists, was hired. • New acting director was appointed to State-owned Enterprise Zovnishtorhvydav publishing house; the financial performance of the enterprise was analyzed. • IT audits of the existing web portal and ProZorro system were carried out, and ways toward the integration of both these systems were identified. • The process of Ukraine’s accession to the WTO Agreement on Government Procurement was started. • A Ukrainian Road Map for harmonization with EU directives was developed

Including also the 3rd Quarter:

• The public procurement legislation was amended to support further reforms. Anti-Corruption and deregulation provisions were introduced; procurement thresholds for the application of the Law were raised (making it possible to hold about 70 percent of the procurement electronically already now); the legislation was brought into conformity with international requirements. • A draft law on public procurement was developed that provides for establishing a brand-new system of the government procurement (which will be referred to as the “public procurement”), defines the notion of the “electronic procurement”, and calls for the gradual transformation of all the procurement into the electronic form during the year 2016.

Ongoing high-priority actions to accelerate the reform: A draft law on public procurement • Have the Public Procurement Law to be adopted in 2015. • Establish cooperation with the Special Communication and Information Protection Service of Ukraine • Make it possible to integrate the electronic procurement system with open registers • Permit at a legislative level to make use of foreign clouds certified under ISO 27001 for the placement of non-secret public information. • Approve the Road Map of harmonization with EU directives at the Cabinet of Ministers of Ukraine

REFORM PROGRESS 17 PUBLIC PROCUREMENT REFORM

52% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015

New normative base in the public Capacity building & functions’ optimization of High level of trust to the eProcurement system 100% procurement sphere developed & accepted in 75% Savings from tenders’ planned value the Authority body formed line with DCFTA Roadmap for 2015-2017

Implementation of anticorruption actions in All procurement procedures conducted in High level of trust toward the Authority body from REFORM 75% PERCEPTION Ukraine’s legislation eProcurement system business formed

Integration of ProZorro IT-system with official Average number of participants in public procurement web-portal & transfer of control to the 50% increased 26,5% government

The share of tenders, where participants are from E-procurement legislation approved 33% 73,5% different parts of Ukraine, increased

Number of participants from other countries Procurement procedures fully automated 0% increased THE CITIZENS THINK THAT: NO CHANGES CHANGES EXIST Ukraine joined the WTO GPA 33% The share of competitive procedures increased

Survey conducted by the TNS agency on a monthly basis.

Age of respondents: 18-55 Question asked: How would you evaluate the reforms progress? Blue segment: people, who answered that the changes really exist

Red color represents those who doesn’t see any changes

18 IN TIME RISK ZONE OUT OF TIMING SCORECARD THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 DECENTRALIZATION REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Separation of powers between local governments and public authorities

An effective system of governance The transfer of sufficient financial resources to local governments

Providing the openness, transparency and public participation in solving local prob- lems

Efficient use of resources for sustainable development Creating a safe and comfortable environment for citizens' lives in High level of competitiveness of the Ukraine through an effective system of Favorable conditions for business governance regions

Effective interregional collaboration

State quality standards (norms) of administrative services

High quality services Quality of services

Accessibility to services

REFORM PASSPORT 19 DECENTRALIZATION REFORM

Progress to date: proved by the Cabinet of Ministers: Vinnytsia, were con- Volyn, Dnipropetrovsk, Donetsk, Zhytomyr, cluded for The financial decentralization over the 9 months of the year The Concept of Reform of Local Self-Gov- Zaporizhzhia, Ivano-Frankivsk, Luhansk, Myko- the consol- 2015 resulted in the increase in local budget revenues by 40.7% ernment and Territorial Organization of the layiv, Odesa, Poltava, Rivne, Sumy, Kharkiv, idation of or UAH 70.9 billion vs UAH 50.4 billion in 2014. Government in Ukraine has been endorsed Kherson, Khmelnitskyi, Chernivtsi, Cherkasy, local gov- and its Implementation Action Plan has been and Chernihiv; ernments velopment strategies have been developed. approved. - Long-term Plan of the Spatial Development of in solving local issues on a contractual basis. Ten oblasts: Vinnytsia, Volyn, Donetsk, Za- • Laws have been adopted that create legal Municipalities of Kirovohrad Oblast was sub- • The financial decentralization over the 9 karpattia, Zaporizhzhia, Odesa, Lviv, Terno- basis for the improvement of the financial mitted to the Cabinet for review; months of the year 2015 resulted in the in- pil, Kherson, Chernihiv, and the city of Kyiv and economic capacity of municipalities: - Long-term Plans of 2 oblasts (Lviv and Kyiv) crease in local budget revenues by 40.7% developed action plans of the implementation “On Voluntary Merger of Territorial Communi- are undergoing legal expert appraisal in the or UAH 70.9 billion vs UAH 50.4 billion in of regional development strategies, which are ties” and “On Co-operation between Territorial Ministry of Justice. 2014. These are the funds managed by local being prepared for the endorsement. Communities”. • Over the reporting period, the merger governments on their own together with their • With the EU project support, the Ministry of • The Sustainable Municipality Formation process has been initiated in more than municipalities. Since the system supports Regional Development, Construction, Hous- Methodology has been developed and en- 6,000 municipalities (more than half of the autonomy of the adoption of local bud- ing and Utilities implemented the online dorsed by the government (Resolution # 214 those existing). gets and the decentralization, these changes platform of the State Regional Develop- of April 8, 2015). • The first local elections of mayors and will deliver synergies in the future, and local ment Fund (dfrr.minregion.gov.ua). For the Regional reform offices were set up in each council members were announced with a budget revenues will increase by a factor of 2 first time, regional development investment oblast with the donor support. resolution of the Central Electoral Commis- to 3. This will provide local governments with projects are being selected on the basis of an sion in these resources for tackling local development is- open tender, rather than manually. There are 159 merged municipalities comprising almost 800 159 merged sues. • The Verkhovna Rada of Ukraine adopted the village, town, and city councils. municipali- • 23 municipality cooperation contracts were draft Law of Ukraine “On Service in Local ties. concluded for the consolidation of local gov- Self-government Bodies” (new wording, • Creat- ernments in solving local issues on a contrac- registration # 2489 of March 30, 2015) in the • Oblast administrations developed Long- ing such a large number of merged municipal- tual basis. first reading on April 23, 2015; the draft law is term Plans of the Spatial Development of ities became possible thanks to the concerted • The State Regional Development Strategy being prepared for the second reading. Communities in Oblasts with the support action taken by the Cabinet of Ministers of of Ukraine is being implemented; regional • The Verkhovna Rada of Ukraine adopted the by regional reform offices and the Associa- Ukraine, the Verkhovna Rada of Ukraine, and development strategies were developed Law of Ukraine “On Local Elections” # 595- tion of Ukrainian Cities, and with the active the President of Ukraine in adopting appro- and approved by 20 oblasts; (the rest are VIII of July 14, 2015. involvement of municipalities. The long-term priate amendments to the legislation as at the stage of being updated or approved); • The draft law “On Municipal Guard” sup- plans have been endorsed in 22 oblasts as at regards the first local elections (the Law strategy implementation plans are being de- posed to make it possible for local councils to the end of Q3. The Long-term Plans were not of Ukraine # 676 of September 4, 2015). This veloped, and the legal framework is being de- establish municipal police has been adopted endorsed by oblast councils of 2 oblasts: Za- Law made it possible to additionally obtain veloped for the implementation of the region- in the first reading in the Rada. karpattia and Ternopil Oblasts. a decision of the Central Electoral Commis- al policy efficiency and effectiveness monitor- • The President of Ukraine signed a law that • Real financial decentralization was undertak- sion to schedule the first local elections in ing and evaluation system, the institutional decentralizes powers in the field of the en by adopting amendments to the Budget 85 merged municipalities that comprise al- support to the regional development, and the architectural and construction control, and Tax Codes of Ukraine that vested local most 400 former municipalities. As a result, financing of regional development programs and improves urban planning legislation: governments with additional budgeting the 86 municipalities joined the ranks of 74 and projects on the basis of the EU standards The Law of Ukraine # 320-VIIof April 9, 2015, powers and stable sources of revenue for the municipalities, where the first elections have and approaches (in pursuance of the Law of “On Amendment of Some Legislative Acts of exercise thereof. been scheduled by oblast councils making Ukraine adopted by the Verkhovna Rada “On Ukraine to Decentralize Powers in the Field the number of merged municipalities to reach Principles of the State Regional Policy” # 156 of the Architectural and Construction Control, As at September 30, 2015: 159 as a result. of February 5, 2015). In 15 oblasts, the action and Improve Urban Planning Legislation”. The Long-term Plans of 19 oblasts were ap- • 23 municipality cooperation contracts plans of the implementation of regional de- • Draft laws “On Local Referendum” have

20 REFORM PROGRESS DECENTRALIZATION REFORM

been registered by the Verkhovna Rada of with the Ministry of Regional Development, rently reviewing the developed materials in of measures at a central, regional and local Ukraine, and are being reviewed by the Rada’s Construction, Housing and Utilities (MORD) order to come up with road maps and action levels in respect of the information and expert committees. has developed, concurred with stakeholders, plans of the reform in relevant areas and sec- support to decentralization amendments to • The State Geodesy, Cartography and Cadaster and implemented Stage 1 of the universal re- tors within the scope of the decentralization the Constitution of Ukraine. Service developed the draft Law of Ukraine form support communication plan (“Support reform in line with the Concept of Reform of • Develop a package of laws on the decen- on the amendment of some legislative acts to Voluntary of Municipalities”), under which Local Self-Government and Territorial Orga- tralization: of Ukraine calling for the delegation of state- the state-owned television and radio organi- nization. 1. Develop Laws of Ukraine needed owned land management powers to local zations throughout Ukraine (NTKU, NRKU, to implement decentralization amend- governments and the strengthening of the DTRK UTR World Service, oblast and regional What has not yet been achieved: ments to the Constitution of Ukraine: state control over the use and the protection state-owned television and radio companies) “On Local Self-government in Ukraine” (new of land. carried out awareness campaign on the TV • Adoption of amendments to the Constitution wording), “On Prefects”, “On Principles and • The draft law has been endorsed by central during the first half of 2015 on the decentral- of Ukraine in part of decentralization of pow- Procedure of Solving Issues of the Subna- executive agencies and submitted to the Gov- ization reforms: specialized shows, informa- ers and authorities are crucial to implement a tional Organization of Ukraine”; ernment for review. tion issues, etc. In Q3, the state-owned televi- comprehensive reform of the local self-gov- 2. Develop laws of Ukraine that do • Importantly, the draft Law of Ukraine “On sion and radio companies delivered about 380 ernment and the subnational organization not require any amendment of the Con- Amendment of the Constitution of Ukraine hours of television products and 320 hours of government in all areas and sectors. The stitution of Ukraine, such as: (Regarding the Decentralization of Pow- of radio products on this subject; printed and further comprehensive and systemic work on – in the field of land relations, urban plan- er)” (registration # 2217a of July 15, 2015, placed advertising in health care establish- the implementation of reforms must be car- ning, proposals on the improvement of submitted by the President of Ukraine as ments, at railway stations, education estab- ried out within the context of amendments to inter-budgetary relations, local taxes and a priority bill) has been adopted in the first lishments, and transport facilities. the Constitution of Ukraine, including, for duties, administrative services, and social reading on July 16, 2015, after more than a • As of today, the head office of the reform is instance, the decentralization of powers of standards; year of review by experts and the Constitu- developing the strategy for Stage 2 of the executive agencies and their devolution to – proposals on the improvement of the leg- tional Commission of the Verkhovna Rada of communication plan “Support to Constitu- local governments. islation in related areas and sectors calling Ukraine. The bill has been submitted to the tional Amendments” to be implemented in • The following draft laws must be adopted for the decentralization of powers of the Constitutional Court for opinion. within three executive branch; • The Law of Ukraine “On Amendment of the months of 3. Proposals should be developed on the op- Constitution of Ukraine (Regarding the Decen- A Donor Co-ordination Council is being set up at the MORD to the effec- timization of the territorial organization of tralization of Power)” (registration # 2217a of ensure efficient co-operation with donor countries. tive date of the government, such as territorial bodies July 15, 2015) has been pre-endorsed by the the Law of of central executive agencies: the develop- Rada on August 31, 2015. Ukraine “On ment of the future model of administrative • The working wording of the draft law “On Pre- October to December 2015 aimed at running Amendment of the Constitution of Ukraine districts as future raions. fects” developed by the Ministry of Regional an information campaign to support the con- (Regarding the Decentralization of Power)”: • Consolidate local governments in tackling Development, Construction, Housing and stitutional amendments. – “On Local Self-government in Ukraine” (new local issues on a contractual basis: by im- Utilities has been discussed by experts and • The Council will determine the need for chan- wording); plementing the legislation in terms of the im- reviewed at a meeting of the Central Co-ordi- neling technical and financial assistance on – «On Prefects»; plementation of inter-regional co-operation nation Council, but the final wording can only the implementation of reforms in the areas – “On Principles and Procedure of Solving projects. be adopted after the amendment of the Con- being in need of the highest attention. Issues of the Subnational Organization of • Promising models should be developed on stitution of Ukraine. • Based on the initiative of the MoRD, Kharkiv Ukraine”. the optimization of the territorial organization • The Ministry of Information Policy of Ukraine Law Academy analyzed legislation in 22 areas of the government, such as territorial bodies was appointed as the party in charge of the and sectors that are in need of the decentral- Ongoing high-priority actions to accelerate of central executive agencies: (setting up ad- co-ordination of the communication support ization of governing powers. Task teams in the reform: ministrative districts as future raions). to reforms at the 8th meeting of the National line ministries were set up on the basis of an Reforms Council. instruction by H.H. Zubko, Vice Prime Minister • Support the process of the amendment of • The Ministry of Information Policy together in charge of the reform. These teams are cur- the Constitution of Ukraine by taking a set

REFORM PROGRESS 21 DECENTRALIZATION REFORM

76% Progress in Tasks TASKS completion for 2015 Approval/ update of the plan Adoption of the Law of Ukraine of measures on realization of «On the Principles of the State Regional Policy» that regulates the The adoption of the Law of Development and approval of Online platform of the State the Concept of reforming local 100% legal, economic and organizational 100% Ukraine «On Administrative and Perspective Territorial Plans for 85% Fund for Regional Development 100% government and territorial grounds of the state regional policy Territorial Structure» to ensure with the purpose of improving the Capable Communities created organization of power in efficiency of the state regional – based on the amendments Ukraine development administration system introduced to the Constitution of Ukraine - the principle under 50% which the same area has no REFORM Adoption of the Law of Adoption of the Law of Ukraine more than one body of self- The European system of Ukraine «On Amendments to «On Amendments to Certain government of the same level statistic reports has been PERCEPTION Opening regional reform offices the Constitution of Ukraine» Legislative Acts to Extend and ubiquity of the jurisdiction introduced for monitoring and 80% the Powers of Local Self- 50% and ensuring their effective 100% 80% pertaining to local self- of local self-government at the assessment of the social and Government Bodies in Disposal activity government and territorial of Land Plots and Monitoring level of Territorial Communities economic development of the authority structure reform Use and Protection of Land» regions of Ukraine 32,9% Providing financing through Approval of Regional Communication support for The State fund of regional The Framework for Creation of Adoption of the Law of Ukraine Development Strategies development projects (including the decentralization reform 100% Capable territorial Communities 100% «On Self-Organized Bodies» 60% developed taking into account 84% 50% cooperation projects and held according to the approved 67,1% adopted (new version) new approaches based on voluntarily United territorial reform communication plan communities) European practices

THE CITIZENS THINK THAT: Adoption of the Law of Ukraine Adoption of the Law of Ukraine «On Adoption of the Law of Ukraine «On Approval of Action Plans The Single Unified List of NO CHANGES «On Voluntary Association Municipal Police» aimed at ensuring 70% Service in Local Self-Government 60% to implement regional 60% Standards for the Provision of 10% CHANGES EXIST of Territorial Communities» law and order in communities Bodies” (new version) development strategies Public Services created with the purpose of legislative settlement of organizational 100% Adoption of the Law of Ukraine «On Adoption of the Law of Ukraine Approval of the new procedure and legal grounds for the Local Self-Government in Ukraine» «On Election of Deputies to of preparation, assessment so as to ensure the optimal emergence of capable territorial the Verkhovna Rada of the and selection of investment Adoption of the Law of Ukraine distribution of powers among 100% 100% 50% communities that can provide local self-government bodies and 40% Autonomous Republic of programs and regional Crimea, Local Councils, Village, development projects to be «On Local Referendum» the entire scope of public executive authority bodies based on the amendments to the Constitution Town and City Heads” (new financed from the State Fund services within the community of Ukraine version) for Regional Development Survey conducted by the TNS agency on a monthly basis. Adoption of the Law of Ukraine Adoption of laws of Ukraine on Adoption of the Law of Ukraine «On Local Self-Government in Ukraine» On Amendments to Certain amending the Budget and Tax Codes (new version) so as to ensure the Legislative Acts of Ukraine of Ukraine as to decentralization optimal distribution of powers concerning Decentralization of 100% 50% 100% Age of respondents: 18-55 of finance, strengthening of the among local self-government bodies Powers in the Field of Architecture Question asked: How would you evaluate the material and financial basis of local and executive authority bodies and Construction Control and reforms progress? based on the amendments to the Improvement of Urban Planning self-government Constitution of Ukraine Legislation» Blue segment: people, who answered that the changes really exist

Red color represents those who doesn’t see any changes

22 IN TIME RISK ZONE OUT OF TIMING SCORECARD THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 DECENTRALIZATION REFORM

OUTCOMES PERCEPTION

Index of human development in regions Survey response about the level of basic Voluntary creation of united territorial The level of state budget financing for regional due to the implementation of state service provision in the community communities development programs and projects regional policy (education, medicine)

Technical and financial support from Answer to the question about the international organizations for the availability of effective methods of Effective functioning of capable The share of local budgets in the general state implementation of regional development influence on local government and control communities in terms of subsidies budget projects (expected - EUR 50 million in of local authorities (self-government, law 2015-2018 budget years) enforcement, judges)

Effective functioning of capable Employment in regions due to the state communities as to their financial self- regional policy implementation Ensured the distribution of powers based sufficiency on the principle of subsidiarity among local Survey among heads of LSGB and authorities and executive authorities (functional selectively – LSGB department heads - decentralization), and between local governments concerning the availability of appropriate Index of human development in regions of various levels of the administrative and resources in LSGB as well as powers to Effective functioning of capable due to the implementation of state territorial structure whose powers are provided perform their duties communities as to the growth of own regional policy compared to the average with adequate financial resources revenues EU indicators

Ensured the distribution of powers based Survey among heads of LSGB and on the principle of subsidiarity among local selectively – LSGB department heads Energy efficiency of regions due to the authorities and executive authorities (political - answer to the question «Do you think Financial support of investment projects state regional policy implementation decentralization), and between local governments that decentralization resulted in increased of territorial community cooperation - level of the final energy resources of various levels of the administrative and efficiency of public service provision and consumption territorial structure whose powers are provided more prompt and high quality response to with adequate financial resources citizens’ requests?»

Ensured law enforcement and safety GNP power intensity, toe/S000 according Increase of efficiency of land use in associated The index of openness of local self- organization at the level of communities to the purchasing power parameters in territorial communities government and regions 2005 prices

Conclusion of cooperation agreements of territorial communities with the The efficiency of the system of state participation of village, town and city administration of regional development increased. councils

ОПИС МЕТОДОЛОГІЇ ОЦІНКИ НА СТОРІНКАХ 58-60 SCORECARD IN TIME RISK ZONE OUT OF TIMING 23 LAW ENFORCEMENT REFORM

Progress to date:

• On July 2, the Verkhovna Rada adopted the sectoral Law “On National Police” that initiated the reform of the Ministry of Interior. It came into force on November 7, 2015. For instance, the new patrol service started working in Kyiv on July 4 Currently the police patrol is staffed and works in the four largest cities - Kiev, Odessa, Lviv and Kharkiv and covers Boryspil airport. More than 5,000 young people selected and trained under the new system impressed the capital, first of all, by their humanism and the readiness to help not only in case of public order issues, but also in usual household situations. There were numerous videos on the Internet illustrating new approaches chosen by new patrol officers: they help to push cars, carry people in wheelchairs upstairs, save animals from the road, etc. This project gave the society a chance to believe into the irreversibility of reforms and became a bright example of the successful government work. The patrol police has been staffed and launched in four largest • The Verkhovna Rada adopted a set of amendments to the traffic safety legislation to implement, for instance, cities (Kyiv, Odesa, Lviv, and Kharkiv), and covers Boryspil photo and video recording of road traffic violations. This law will make it possible to remove policy with radars from the roads without compromising the safety of motor roads and reduce the corruption hazard in this airport. The selection and training of officers for the patrol area at the same time. This Law is supposed to come into effect in November 2015. police was started in 19 other cities from Zakarpattia to Donetsk Oblast. Including also the 3rd Quarter:

• On a pilot basis, the road police monitors 2 motor roads: Kyiv to Zhytomyr and Kyiv to Boryspil. • The process of selection and training for police patrol is launched in 19 other cities. • The competitive selection of the staff for newly established local public prosecution offices in all regions of the country is going on in line with the new Law “On Public Prosecution Office”. This competitive selection attracted about 11,000 contenders. By now, they have been tested for their knowledge of laws and the overall level of knowledge. The finalists, who will be interviewed by contest commissions, have been determined as a result. New local public prosecution offices must be established by December 15, 2015.

What has not yet been achieved:

• The draft law“On Services and Service Centers of the Ministry of Interior of Ukraine” is awaiting its second reading. It calls for the transformation of corruption-prone MREOs and other departments of the Ministry of Interior involved into the provision of administrative services into contemporary service units that deliver rapid and high-quality service to the public. This draft law has been subjected to a lengthy process of seeking concurrence from stakeholders, and is expected to be adopted in the nearest future. • Rada members send the draft law“On State Bureau of Investigation” for the repeated second reading; it must be refined by the Rada committee in charge.

Ongoing high-priority actions to accelerate the reform:

• The draft law “On Services and Service Centers of the Ministry of Interior of Ukraine” should be adopted in the second reading. • The draft law “On the State Bureau of Investigation” should be adopted in the second reading. • The process of replacement of the personnel in regional public prosecution offices and the Prosecutor General Office of Ukraine should be started to make it possible to improve the quality of prose- cutorial self-administration bodies envisaged by the Law.

24 REFORM PROGRESS LAW ENFORCEMENT REFORM

41% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015

The State Bureau of A quality investigation of protestor Increased people trust in the New law on the national police New patrol service is 100% 100% Investigation is created and 25% persecution and Maidan shooting new patrol in the selected 58% is adopted established and operates operates incidents is conducted cities (TNS)

The single universal special MIA structure is optimized and New law on agencies of interior HR processes are optimized Increased trust in the police by 65% 17% police unit is created and 0% harmonized with European standards in 15% REFORM affairs is adopted in the MIA people (TNS) PERCEPTION operates terms of personnel quantity

Business costs of organized crime (GCI) Law enforcement reform Law enforcement agencies are 67% 0% Index change by 0.5 points in the positive People started feeling safer package is adopted decentralized direction 44,3%

Standard operating procedures/ Organized crime level Index change by 0.5 People believe that police is less affected 45% 55,7% instructions are developed points in the positive direction by corruption

THE CITIZENS THINK THAT: Internal documents that will NO CHANGES Reliability of police services (GCI) Index influence internal discipline CHANGES EXIST 0% change by 0.5 points in the positive and enforcement are developed direction and approved (MIA)

Rule of Law Index Index change by 0.5 points in the positive direction

Survey conducted by the TNS agency on a monthly Criminal Justice Framework and basis. Independence Index change by 0.5 points in the positive direction

Age of respondents: 18-55 Question asked: How would you evaluate the reforms progress? Blue segment: people, who answered that the changes really exist

Red color represents those who doesn’t see any changes

THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 SCORECARD IN TIME RISK ZONE OUT OF TIMING 25 DEREGULATION

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Strengthened the institutional capacity of government by creating Better Regulation Delivery Office

Radically decreased number of business Decreased number of regulations, permits etc regulations and inspections Decreased number of inspection bodies

Create transparent, predictable, limited inspection purposes

Strengthen the State Regulatory Service function by putin place necessary staff and training them for the best practices

Barriers to creation of new regulations Implementation of Regulatory Impact Assessment, Small business test, peer analysis and strengthened other relevant tools on the way of legal act TOP-30 regulatory environment in the world in 2020 for: •SME business development Authorities trained to produce qualitative Regulatory Impact Assessment documents •Increase of FDI and capital investments •Healthy market competition Technical regulation and Food Safety systemsare aligned with EU and mutually recognized

Market surveillance system harmonized with EU

International trade regulation simplified and harmonized with DCFTA and WTO requirements Efficient regulatory environment created and functioning Enabled electronic communication between business and authorities

Developed concept and legal framework for self-regulatory organization creation

Regulations switched to the market-regulation mode, where possible

26 REFORM PASSPORT DEREGULATION

Progress to date: cle packaging waste was abolished. The • Significant amendments to the Law up with a bill calling for the reversal or the company’s turnover has been about UAH on protection of minority shareholders issue on a declaratory basis of more than • The updated Deregulation Concept 300 mln with little positive effect for the rights were adopted. These included ob- 30 permitting documents (at the final was approved; the Better Regulation economy or environment. The new law ligation to publish information about any stage of the co-ordination with central Delivery Office was set up with the fo- on packaging waste recycling would transaction if there is an enquiry; obliga- executive agencies). cus on sectors and industries most valu- allow to create 10 000 new jobs and to tion to attract an independent auditor to • A bill on the list of administrative ser- able for the small and medium business clean the country from the packaging assess the transaction in comparison to vices has been registered (it calls for the during 9 months of the year 2015. garbage. normal market conditions. reduction in the number of such services • Out of 212 priority initiatives, 70 were • Quarantine certificate was abolished– it’s • The process of new business registration from more than 3,000 to fewer than 500 adopted before and 26 after the approv- cost for businesses was about UAH 2 bln was simplified, e.g. obligatory usage of and suggests measures to prevent the al of the official plan. At the moment, 20 per year notary stamps for enterprises was abol- introduction of new administrative ser- bills are being reviewed by the Verkhov- • The term of issuance of phyto-sanitary ished (voluntary). vices). One more bill regulating the provi- na Rada, 5—by the Cabinet of Ministers, certificate was significantly shortened • 4 bills on the reform of controlling sion of administrative services has been 50—are reviewed by central executive (from five to two days), which saved up authorities were registered in the Rada submitted to the Cabinet of Ministers for agencies, and the rest are under devel- to UAH 5 bln per year for businesses. (on liberalization, liability of officials for review. opment. According to experts, almost 60 • Permission procedures to use natural unlawful acts, establishment of an inte- • More than 90 percent of the annual percent of priority initiatives have been plan of the adaptation of European implemented taking into account the Amendments were introduced into the law “On Public Procurement” (2087a) to technical regulation directives were im- implementation stages; the Deregula- simplify access for businesses to the public procurement (the self-declaration plemented. Out of 4 top priority technical tion Plan implementation status is 41 regulations, 1 is adopted; 2 are under re- principle, a shortened list of required documents, et al.). percent. view at the Cabinet of Ministers, and 1 is • Obligatory certificates were canceled being coordinated with central executive for 13 product types, including tech- resources were simplified, which de- grated public database of audits, harmo- agencies. nical rehabilitation facilities, detergents, creased yearly costs for businesses by nization with the EU legislation, exten- the bulk of the fuel market, the baby UAH 3 bln per year. sion of the provisional moratorium on Including also the 3rd Quarter: foods, etc. • It was legally assured that termination business inspections). • Ukraine acceded to the 1958 UN Gene- of production, sales or provision of ser- • 3 more bills to reform the anti-trust • Negotiations with donors were complet- va Agreement on Motor Transport that vices by businesses could be enforced by legislation also await voting in the Verk- ed and the first technical assistance made it possible to cancel the obliga- a court decisions only. hovna Rada (they simplify the pursuit of tranche was obtained from the Govern- tory certification of new vehicles. • The moratorium on company inspections business for the small and medium enter- ment of Canada for the reforms. Also • Overall the number of permission docu- has been in force for almost 1.5 years. prises, make actions of the Antimonopoly the agreement on financing of the Bet- ments were abolished (permits, conclu- This has been one of the most efficient Committee of Ukraine more transparent ter Regulation Delivery Office from 2016 sions etc) from 143 to 84. measures for protection of businesses in and predictable). was signed with the EU. • The number of business activities need Ukraine. • Bills calling for the reversal of 4 li- • In September, an independent Better to be licensed was reduced from 56 to • Business-ombudsman Council created, censes, the reversal or the declaratory Regulation Delivery Office funded by 30, electronic issuance of licenses was safeguarding legal protections for busi- basis for the issue of 22 permits in the donors was established as a key motive introduced. nesses. field of agriculture have also been reg- force of the deregulation. It will comprise • State owned company UkrEcoResursy’s • The procedure to grant work permit for istered with the Rada; the Ministry of Eco- about 70 specialists (lawyers, business monopoly to collect, re-work and recy- foreigners was simplified. nomic Development and Trade also came analysis and experts on the FTA with the

REFORM PROGRESS 27 DEREGULATION

EU), who will analyze the regulatory en- ery Office for the next 12-24 months. tion. • Speed up the voting of Deregulation laws vironment of Ukraine on an ongoing ba- • The Law “On Electronic Commerce” • The list of non-ferrous metal products in Verkhovna Rada. whose exports are subject to licens- • Continue moratorium on company in- In September, an independent Better Regulation Delivery Office funded by ing has been shortened substantially. spections till the end of 2016. • • donors was established as a key motive force of the deregulation. The requirement for veterinary cer- Adopt laws in the spheres of insolvency, tificates was canceled (Form 2). contract enforcement and property reg- • The obligatory certification of the im- istration that would lead to rising up to sis and draft regulatory instruments on has been adopted to regulate activities in ported alcohol was canceled. 13 points in the Doing Business rating. the deregulation. The team is almost set this field. • The Ministry of Infrastructure under- up; the last organizational issues are be- • The Cabinet of Ministers of Ukraine ad- took partial deregulation in the field ing sorted out and the priority action plan opted the Technical Regulation Sys- of the sea transport. The commis- is being developed. tem Development Strategy till Year sion-based control aboard vessel, the • In September, changes to the Rules of 2020 as the official road map for the chemical control of the isolated ballast, Procedure of the Cabinet of Ministers harmonization of the Ukrainian system the procedures for the passage between were adopted to simplify the approval of with the EU system. ports of Ukraine, the yacht registration deregulatory documents (the period for • The National Accreditation Agency procedures, the financial guarantees review has been reduced to 5 days; some has obtained the next portion of rec- of the cargo delivery were canceled. In documents may be presented to the ognition from the EU (“Conformity addition, the environmental declaration Government for review without prior en- Assessment. Requirements for Bodies was canceled and the automated ra- dorsement by central executive agencies That Certify Products, Processes and diological control and other procedures on a case-by-case basis on permission Services”), and implemented its portion were introduced to substantially reduce of the Prime Minister). of the preparation for the commence- the time needed to process cargo. • There is a preliminary agreement on ment of the process of entry into the holding the Deregulation and Business ACAA Agreement (on the mutual recog- What has not yet been achieved: Development Day in the Verkhovna Rada nition of technical regulation systems). in November, when the voting on dereg- • The National Standardization Body • There is a substantial delay with the re- ulation draft laws is scheduled to take has been revitalized; the work on the view of draft laws in the Rada. Twenty place. adoption of harmonized standards was deregulation bills have been registered • New methodology of regulatory impact unlocked. Currently, the tenders for the in Rada, but not yet voted. assessment was developed and cur- standardization activities are at their fi- • The development and the approval of li- rently is being tested. The draft law that nal stages. A working group was estab- censing conditions for various types of introduces the obligatory usage of regu- lished to work on launching the TRADOS business that require licensing lag be- latory impact assessment was drafted by software for the automated translation hind the target terms substantially. parliamentarians and currently is set for of standards. approval procedure by the central exec- • The State Food Product Safety and Con- Ongoing high-priority actions to accelerate utive bodies. sumer Protection Inspectorate has been the reform: • Preliminary agreement was reached with established; it absorbs 8 former inspec- the World Bank to run twinning project tors and marks the beginning of their • Speed up the setting up and the launch with the British Better Regulation Deliv- physical reorganization and/or liquida- of the Better Regulation Delivery Office.

28 REFORM PROGRESS DEREGULATION

56% Progress in Tasks TASKS OUTCOMES completion for 2015 Necessary amendments Action plan for immediate in the regulatory and legal Improved positions in the Doing deregulation is developed, 100% regulations to enable 0% 100% E-Database of standards 5% Business rating complied and approved the issuance of permits electronically made REFORM PERCEPTION Law «On the number of Number of new standards Monitoring procedure for the Changes in the number of 100% administrative services and 75% 60% adopted in compliance with the 21% Action plan defined inspection bodies Payment» adopted EU regulation

24,6% Comprehensive deregulation Comprehensive inventory of the Concept and Action plan existing legal framework for Execution of the Plan of the 70% 0% 36% state control and regulation of developed, agreed and Outdated regulations cancelled, priority deregulation (131 item) 75,4% business conducted approved reduced number of permits, licensing and conciliation, State Regulatory Service (DRS) Concept of delegation of the list of business activities particular state functions THE CITIZENS THINK THAT: developed and implemented an subjected to licensing, and through implementation of the NO CHANGES effective mechanism for proper the list of products subjected 0% regulatory impact assessment mechanisms of self-regulation CHANGES EXIST to compulsory certification in PERCEPTION (RIA), which provides for the developed; the number Ukraine. Legal acts and acts inclusion of ODS due to projects 20% of business activity that 0% that used to regulate business of all laws and regulations (in can assess themselves on activities that are not placed in consultation with the World compliance to the requirements the public domain cancelled Business expectations index of Ukrainian Bank) to ensure protection and adopted norms instead enterprises for the next 12 months, against excessive government of system of governmental 94.5% (NBU) regulation observation increased

Survey conducted by the Law of Ukraine «On technical TNS agency on a monthly Technical regulations based on basis. Necessary amendments regulations and conformity 100% the European Directive on the in the Law of Ukraine «On assessment procedures» is principles of «New Approach» Administrative Services» and adopted in new wording to technical harmonization «On licensing system in the 50% 89% Age of respondents: 18-55 and standardization and sphere of economic activity» to Question asked: How would you evaluate the «global approach» in the field reforms progress? enable the issuance of permits Independent metrology and of conformity assessment electronically made standardization bodies in line 100% Blue segment: people, who answered that with EU legislation established developed and implemented the changes really exist

Red color represents those who doesn’t see any changes

THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 SCORECARD IN TIME RISK ZONE OUT OF TIMING 29 HEALTHCARE REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Efficient, transparent health products public procurement system in place MEDICINES AND VACCINES Increased axess to medicines and medical products via market deregulation of good quality are more accessible and affordable for people Strategic long-term planning to vaxines and essential medicines purchasing deployed

Hospital network optimized to meet health needs of people HEALTH CARE SERVICES of better quality delivered in efficient and Autonomy of public providers of health services introduced patient-centered manner

Access to primary care services of good quality ensured

Cost-efficient single payer system of public hinds pooling and allocation in place Modernised health system providing European FAIR FINANCING SYSTEM levels of care at responsible in place with more financial protection and Guaranteed volume of free medical care defined and provided prices lew informal payments Health services are funded on "money follows the patient" principle

New Public Health Agency established and effectively operating NEW PUBLIC HEALTH SYSTEM established and provides quality population Health in all policies" principle in place" health services Health promotion system designed and deployed

Unique functions defined and cut down and/or outsourced MOH IS RE-PROFILED away from operational functions toward New functions implemented, respective capacities built policymaking Newsystem of data management (including eHealth) and accountability in place

30 REFORM PASSPORT HEALTHCARE REFORM

Progress to date:

• Laws were adopted on March 19 to apply the mechanism of the public procurement of pharmaceuticals and medicinal products via international organizations. This is a key change for over- coming corruption and improving efficiency of the public procurement of pharmaceuticals and medicinal products, and for making them more affordable. In the first half of the year, the progress in this area was modest, but it got going in Q3. In July and August, the Ministry of Health chose UNICEF, UNDP and Crown Agents as procurement agencies. On October 8, the Cabinet issued a resolution to specify a list of pharmaceuticals and medicinal products subject to the international procurement. On October 12, the Ministry of Health signed a Procurement Service Provision Memorandum with UNICEF. On October 27 agreement with UNDP was signed. The signature of agreement between Ministry of Health and Crown Agents is planned for 6th of November, 2015. Thus, the probability of the commencement of pharmaceuticals delivery by international organizations in year 2015 somewhat increased. • In October, the Ministry of Health together with the European Commission set up a task force for the development of a new national system for the public procurement of pharmaceuticals and medicinal products. The new transparent and efficient national procurement system is expected to start working after the termination of the mechanism of procurement via international organizations in 2019. • In September, the Cabinet permitted the Ministry of Health to set up a new Public Health Center with its resolution. This is the important first step in building up a new public health system in Ukraine. It is supposed to replace the Soviet An agreement was signed with the World Bank for the model with the rudiments in the form of the old Sanitary and Epidemiology Service (SES). implementation of the “Serving People, Improving Health” • The Ministry of Health developed its own Health Care Reform Concept within the context of decentralization processes; Project on the basis of a USD 214 million loan to support the the contentious issues with the health sector reform were negotiated away as a result of its discussion with the Ministry health sector reform. of Regional Development and experts at the first stage of the decentralization reform.

What has not yet been achieved:

• The adoption of the legislation on the autonomy of health care establishments did not happen. Thus, the process of “autonomization” of hospitals has a chance of starting only in mid 2016 in the best-case scenario. • No substantial progress has been observed with the deregulation of the pharmaceutical market being the major strategy for improving the selection of pharmaceuticals in Ukraine and making them more affordable. In spite of the existence of several task forces and some concepts, no overall strategy for the deregulation of the pharmaceutical market in Ukraine was developed over 9 months. • There is effectively noreform of the Ministry of Health. The Ministry remains a structure concentrated on the bureaucratic routine with an extremely low institutional capacity for the implementation of reforms. • The “Serving People, Improving Health” project of the World Bank financed with a USD 214 million loan almost grounded to a halt due to organizational difficulties.

Ongoing high-priority actions to accelerate the reform:

• A compromise must be found and the legislation on the autonomy of health care establishments must be adopted as soon as possible. This is critical for the implementation of the next changes of the health care financing reform, including the financing on the basis of the “money follows the patient principle”. • The Ministry of Health needs strengthening in terms of human resources and experts. The low institutional capacity of the Ministry of Health is the major bottleneck preventing the rapid progress of reforms. • The development of a shared approach toward the synchronization of health care reforms and decentralization between the Ministry of Health and the Ministry of Regional Development remains to be an urgent issue. The lack of such synchronization threatens a conflict between the two reforms in 2016.

REFORM PROGRESS 31 HEALTHCARE REFORM

55% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 New national public health centre established, with The concept of ‘medical Health care reform local branches and single lab service’ determined in Public support for the health 40% 60% 40% 16% implementation plan approved network (by reorganization legislature; service costing reform (TNS) existing institutions and methodology developed organizations)

REFORM Approved formula for distribution of medical PERCEPTION subvention from the state Project for a World Bank loan budget to the local budgets Evidence based clinical Subjective evaluation of the 100% 20% 30% 13% for health care reform prepared on the basis of the standarts guidelines approved healthcare system (TNS) 16,1% per capita of services provided and successfully treated case based on the DRG methodology

Working group created 83,9% for the preparation of law Shift toward financing based on Healthcare facilities Satisfaction with the quality of 50% 20% 0% 5% amendments related to standarts per capita autonomization health care services (TNS) advertising of medicines

THE CITIZENS THINK THAT: NO CHANGES Legislation developed to CHANGES EXIST Pharmaceutical market eliminate corruption in the 100% 50% deregulation public procurement system

National reform coordination Amendments made to mechanism established for Provisions on the Ministry 40% 100% the reform of the health care of Health (MOH); Order on Survey conducted by the system structure of the MOH adopted TNS agency on a monthly basis. Public procurement of Law on health care facilities 50% medicines successfully 40% and health services approved completed in 2015 Age of respondents: 18-55 Question asked: How would you evaluate the reforms progress? New National list of essential 40% Blue segment: people, who answered that medicines developed the changes really exist

Red color represents those who doesn’t see any changes

32 IN TIME RISK ZONE OUT OF TIMING SCORECARD THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 TAX REFORM

Progress to date:

• The Tax Reform Concept was discussed within the scope of the communication platforms (14 industry platforms and 6 open platforms). • Twelve meetings of the Tax Reform Task Force took place to discuss various tax models, review the European experience and approve principles of the tax reform. • The Plan of Institutional Changes in Activities of the State Fiscal Service was endorsed by the Minister of Finance (on June 4, 2015), and the IMF. • The Draft Law “On Amendment of the Tax Code of Ukraine (Reduction of the Tax Pressure on Tax Payers)” (registered # 2004) was adopted by the Verkhovna Rada and signed by the President. This Law has come into effect. • A number of draft laws on theimprovement of the tax administration were developed and submitted to the Verkhovna Rada. • The Law of Ukraine “On Amendment of the Tax Code of Ukraine and Some Other Legislative Acts of Ukraine (Tax Reform)” was adopted (an electronic VAT administration system was implemented; criteria for the automated VAT refunds were reviewed). • The negotiations are going on to co-ordinate two tax reform concepts suggested by the Ministry of Finance and the alternative reform project from the Committee of the Verkhovna Rada. The Minister of Finance of Ukraine presented the • The National Tax Reform Dialog has started: the first meeting took place in Lviv and further meetings are scheduled to tax model developed as a result of communication take place in Kharkiv and Dnipropetrovsk. platforms to the National Reform Council on • A draft law was developed on the reduction of rental fees for private gas production companies. September 3. • A Strategy of the Revision of Ongoing Double Taxation Conventions was developed aimed at bringing them into conformity with the OECD Model Convention. The revision procedures started with several countries. • The system of the administration of cash registers has been simplified for tax payers. • The transfer pricing control legislation was improved in line with the OECD principles.

What has not yet been achieved:

• No new draft Tax Code was submitted to the Verkhovna Rada in September 2015, because the relevant committee of the Rada developed an alternative tax model, and the joint work on developing a single tax model was started. • The government-sponsored draft law on the rental fees was not supported by Rada members (an alternative bill tabled by a Rada member was supported).

Ongoing high-priority actions to accelerate the reform:

• Ensure close co-operation between the Cabinet of Ministers and Verkhovna Rada, adhere to a single concept of the tax system reform.

REFORM PROGRESS 33 TAX REFORM

69% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 Developed and approved the Agreements on avoidance of Concept of tax reform (which, Taxation aligned with EU double taxation with other requirements: (1) is brought into inter alia, will include reducing countries and agreements on Rating «Paying Taxes» of the World Bank the tax burden, including payroll, compliance with EU requirements for Taxpayers positively evaluate the 60% exchanging information with 50% excise goods, which should include and the International Finance Corporation reducing the number and scope of reformed tax system tax returns, abolition of inefficient countries that are included in electricity. (2) harmonized with the (IFC) taxes and fees, the abolition of tax the list of offshore zones have EU requirements the structure of benefits). the excise tax on tobacco products. been signed. (3) The amount of the excise tax on REFORM tobacco products brought into line Developed and endorsed the with EU law: the proportion of tax Introduced new tax treatment PERCEPTION institutional changes of DFS in the weighted average retail price of mining industry taking into (including the reduction of DFS 100% 80% of tobacco products increased to Taxpayers trust the DFS 17% account the best international 60%, while the tax amount is not 50% employees and optimizing its employees (TNS) practices less than EUR 90 per 1 thousand structure). pieces. (4) introduced the system of 23,5% reimbursement of VAT tax subjects - legal entities that are not based in The Tax Code of Ukraine and The effect of the general VAT the EU. (5) the harmonized structure other legislative acts amended Taxpayers are generally satisfied with the 75% regime extended to the entire 75% of excise duty on alcohol and according to the Concept of alcoholic beverages by introducing DFS service level agricultural sector. 76,5% tax reform. a new category of excisable goods - «intermediate goods» (drink strength 1.2% - 22% of the volume, Improved tax administration VAT system brought in line with which is a mixture of natural wine 25% and alcohol). THE CITIZENS THINK THAT: by amending the Tax Code of EU legislation. NO CHANGES Ukraine, which provide for: CHANGES EXIST (1) consolidation of functions providing integrated tax Legislation on the control of Included changes to legislation, advice for the Ministry of transfer pricing harmonized 100% which provides conditions for 100% Finance; (2) the introduction of according to the OECD repayment of stale VAT refund. financial mediation (improving principles. procedures for administrative 65% appeal); (3) the transfer of large taxpayers - legal entities Increased transparency of the tax registered with the inspection system: (1) created public database Introduced personal financial Survey conducted by the of individual tax advice; (2) services to large taxpayers; responsibility of DFS for losses TNS agency on a monthly expanded use of electronic services 100% incurred by taxpayers through 0% basis. (4) introduction of taxpayers - for taxpayers. (3) open access to tax individuals with large amounts information on specific economic illegal acts or omissions of of income in the inspection entities; (4) The tax control depends employees of DFS. on the risk of taxpayers’ activities. Age of respondents: 18-55 service for large taxpayers. Question asked: How would you evaluate the reforms progress? Simplified system of tax Included changes to legislation Blue segment: people, who answered that administration for taxpayers 100% that simplified procedure for 100% the changes really exist which use cash registers automatic VAT refund. Red color represents those who doesn’t see any changes

34 IN TIME RISK ZONE OUT OF TIMING SCORECARD THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 PUBLIC ADMINISTRATION REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Civil servants are professional, result oriented and politically independent

Professional civil servants ensure protection of Civil servants have fair, transparent and competitive remuneration which ensure proper the public interest and achieving government motivation objectives Modern HRM practices and tools are implemented and effectively operate in the state bodies

The state administration bodies ensure accountability, liability and transparency

Each state body has clear responsibilities with corresponding functions and the optimal organizational structure An efficient public administration system with The rational and responsive system of state bodies effectively develops and implements the modern management The state bodies use public financial resources transparently, effectively and efficiently public policy processes focused on sustainable in accordance with strategic goals development

Government institutions effectively perform all procedures critical to consistent and competent policy making harmonized with strategic planning

Public services are available, affordable and accessible to all the citizens

Citizens receive high-quality and convenient services oriented to satisfy their needs All citizens receive quality public services

State policy aims to reduce the administrative burden and to ensure fair treatment in . .administrative cases. Citizens are satisfied with the level of administrative burden

REFORM PASSPORT 35 PUBLIC ADMINISTRATION REFORM

Progress to date:

• The Reform Strategy of the Civil Service and Service in Local Self-government Bodies until 2017 was adopted and the Action Plan for its implementation was approved (the Cabinet of Ministers resolution dated March 18, 2015 № 227-r). • Draft laws“On Civil Service” (# 2490) and “On Service in Local Self-government Bodies” (# 2489) were adopted in the first reading on April 23, 2015. • The Government started preparing the Public Administration Reform Strategy till Year 2020, and the Plan of its implementation. The completion has been postponed till Q4 2015. Negotia- tions with the EU proceed regarding the financial support to the implementation of the public administration reform. • The draft Law “On Amendment of Some Laws of Ukraine in Respect of the Organization of Activities of the Cabinet of Ministers of Ukraine and Central Executive Agencies” (# 2354a of July 15, 2015) was registered.

Including also the 3rd Quarter: 1300 amendments to the draft Law “On Civil Service” – The establishment of a register of vacancies in the state authorities on the basis of data of the National Public Ser- (# 2490) were considered. The draft law was recommended vice Agency of Ukraine was started. The National Public Service Agency approved its Order # 161 of July 24, 2015, for the second reading. The draft law is recommended “On Approval of Forms of Reporting on the Quantity of Public Officers”. The data gathering exercise has started. by the relevant Parliament Committee of Ukraine to be adopted in second reading and as a whole law. What has not yet been achieved:

• The adoption of the new law on the civil service and amendments to laws on the Cabinet of Ministers and central executive bodies (as required by the Coalition Agreement) failed. • Comprehensive functional analysis and the organizational restructuring of state authorities (as required by the Coalition Agreement) was not performed. • Reduction of overlaping and redundant functions of the state authorities did not take place and no reduction in the number of public servants occurred, and, accordingly, no salary increases in the state service happened (as required by the Cabinet of Ministers Action Plan). • It was not possible to implement new mechanisms of the financing of ministries and other central executive bodies on the basis of the amount of tasks vested and their performance results (as required by the Coalition Agreement).

Ongoing high-priority actions to accelerate the reform:

• Adopt the law “On Civil Service” and amendments to laws on the Cabinet of Ministers of Ukraine and central executive bodies; introduce appropriate changes into the Rules and Procedures of the Cabinet of Ministers. • Approve the Public Administration Reform Strategy, the plan, and the costs of its implementation, and come to an agreement with the EU on the relevant financial support. • Introduce the competitive selection of public servants and enhance salaries for professionals. • Amend the Budget Codes of the ministries and other central executive bodies so that the budgets are planned in accordance to functions not to the quantity of employees.

36 REFORM PROGRESS PUBLIC ADMINISTRATION REFORM

33% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 Number of non-core assets and New Regulation Act adopted to budget expenditures for their Stakeholders (civil society, business Concept of public administration distribute responsibilities and ownership reduced. (Target - to % Increase of average civil service salary Number of basic administrative services tasks among public bodies (central associations, other) are satisfied reform and 2015-2017 reduce significantly the number (in 2015 increase of salaries is to be delegated to local self-government (1 40% executive bodies, bodies with special 0% with openness and transparency of implementation plan developed of non-core assets and budget ensured via reduction of functions and September 2015 – 70%, 1 July 2016 – status, national commissions) - decision-making (policy making) in and adopted expenditure for their maintenance posts in public administration) traffic police (100%) based on public administration government bodies reform concept in the system of central executive bodies) REFORM Total number of centres of administrative New Law on Civil Service adopted Law(s) on decentralization PERCEPTION in line with SIGMA benchmarks. services. Number/share of centres of of essential administrative Global Competitiveness Indicator administrative services in compliance with Supporting regulations to Citizens positively assess the services developed and by World Economic Forum: Ukraine Ukraine’s ranking in World Bank’s quality requirements. Number/share of implement the new Civil Service 70% 20% Government and Ministries’ results holds 130th out of 140 according to Worldwide Governance Indicators centres of administrative services, which Law adopted. (List of regulations adopted (May 2015 – 75%), of activity. regarding traffic police – by «Institutional efficiency» are positively assess by independent experts 23,5% will be finalized after adoption of . (Target: 2015 – 50%; 2016 – 75%; 2017 the law) December 2015 (100%) – 100%.)

Law(s) on fees for New law On Service in Local 76,5% Self-Government adopted in line administrative services Number of reduced administrative services with European principles of public developed and adopted (2015 Attracting 70% of new civil servants (also (permit, certificate, other). Reduction in Commission for Senior Civil Servants Citizens assess civil service to be service Supporting regulations to 70% year) – 100%. Law(s) that set 10% incl. law enforcement, courts, other state relation to the number of administrative is created and the staff is appointed effective and transparent implement the new Law adopted. fees for basic administrative bodies) services on 1 January 2015: by 30% in 2015; (List of regulations will be finalized by 15% in 2016; by 15 % in 2017. THE CITIZENS THINK THAT: services: 2015 – 75%; 2016 after adoption of the law) NO CHANGES - 100% CHANGES EXIST

Order of the Agency to create Civil servants (including heads Perception of quality of administrative a Register of Public Servants The number of civil servants on managerial Law On Administrative of central executive bodies) are Number of ministries where state services based on the results of the and relevant statistical forms level (categories A and B) does not exceed adopted. Register launched, 60% Procedure developed and 50% appointed based on merit via open secretaries are appointed on competitive national social research - «good» 1/3 of civil servants on execution level primary information created, recruitment in line with the new Civil basis and «very good»: 2015 – 20%; 2016 adopted - 2015 (100%) (category C) register renewed on a regular basis Service Law – 35%; 2017 – 50%. (quarterly) .

Average assessment of quality of Survey conducted by the Share of civil servants who Share of strategic decisions adopted at the Changes to the Laws on Cabinet administrative services provided in TNS agency on a monthly underwent performance appraisal Cabinet level (according to set criteria). Web-portal of administrative services basis. of Ministers and Central Executive 50% Indicators of effectiveness the Centres (exit polls) - «good» and according to the new Civil Service Share of draft Cabinet decisions published launched: 2015 – full informational service. Bodies developed and adopted and efficiency of government «very good»: 2015 – 80%; 2016 – Law in advance performance and civil service 90%; 2017 – 95%. are developed and adopted. Age of respondents: 18-55 0% Question asked: How would you evaluate the (incl. effectiveness of the use List of outdated, irrelevant, and redundant of public funds) (in the form of functions and programmes of government reforms progress? Average salaries for comparable Changes to the Cabinet Rules of Order of the Agency for Civil bodies is identified. Number of such 0% posts in central executive bodies Procedure developed and adopted functions and programmes reduced in 2015 Blue segment: people, who answered that Service) diverge by no more than 20% the changes really exist at least by 25%, in 2016 - at least by 50%, in 2017 - at least by 25%. Red color represents those who doesn’t see any changes

THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 SCORECARD IN TIME RISK ZONE OUT OF TIMING 37 FINANCIAL SECTOR REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Full-fledged competition and free movement of capital are introduced

Strengthened macro and micro prudential regulation

Corporate Governance of Financial Market Participants is Improved Financial Stability and Dynamic Development of Financial Sector are achieved Modern financial instruments are introduced

Financial Sector Infrastructure is modernized

Creditors Rights Protection is ensured FINANCIAL SECTOR TO BE: • Fully competitive Institutional and financial independence is ensured, internal control and • Investment attractive governance of regulators is increased • Innovative • EU-standards driven Transformation of Financial Sector regulators is performed functions Regulators Institutional Capacity is are distributed; risk-based supervision is introduced 2.3 Co-ordination • Capable to ensure sustainable economic strengthened between all regulators and between regulators and market participants is growth improved

Coordination between all regulators and between regulators and market participants is improved

Financial literacy is increased

Protection of Consumers and Investors is Consumers Protection Legislation corresponds to EU standards ensured

New tools for consumers and investors protection are introduced

38 REFORM PASSPORT FINANCIAL SECTOR REFORM

Progress to date: resumption of lending (draft laws # 2286a of ber of the stock market were synchronized with bill is a structural milestone under the IMF Mem- July 3, 2015, # 2460a of July 29, 2015 on the pro- the principles introduced in Ukraine’s banking orandum of July 21, 2015. • The availability of an instrument for creat- tection of creditors; 2506a-2508a of August 14, sector (amendments to Decision of the NSSMC • Strengthen the institutional capacity of the ing sustainable and predictable deposit base 2015, on private enforcement officers). # 394 of March 13, 2012, endorsed by the Reg- National Securities and Stock Market Com- for banks was ensured (Law of Ukraine “On • In pursuance of the IMF program, a draft law on ulator on September 18, 2015); new securities mission, and vest the supervision of non-state Amendment of Some Legislative Acts of Ukraine the financial restructuring was developed with listing requirements were approved (Decision of pension funds in this commission, and vest on Conditions of Repayment of Term Deposits” the support from international donors (e.g., the NSSMC #1217 of August 6, 2015). the supervision of insurance companies, credit # 424-VIII of May 14, 2015). EBRD and IMF) to solve the issue of problem • A draft law was developed tosupport the devel- unions, and other financial institutions in the NBU, • Regulatory instruments were adopted to clean loans and improve the supervisory system— opment of the capital market: “On Amendment provide additional tools for the stock market up the bank market and reduce insider lend- for instance, to reduce the credit risk concentra- of Some Legislative Acts of Ukraine (Regulated clean-up (the draft Law of Ukraine “On Amend- ing in line with IMF requirements on the basis of tion (draft law # 3111 of September 16, 2015, on Markets and Derivatives)”. ment of Some Legislative Acts in Respect of the the disclosure of the ownership structure, the in- NBU credit register). • Substantial steps were made to clean up the Implementation of IOSCO Principles in Respect formation about related parties, the requirements • Steps were made to solve the challenge of non-bank financial institution market: over of the Operation of the Stock Market Regulator”; for the financial standing of holders of quali- foreign currency-denominated mortgage the 9 months of the year 2015, the National the draft law on amendment of some legislative fied participation in banks (Law of Ukraine “On loans—the Independent Association of Ukrainian Commission in Charge of the State Regulation acts of Ukraine in respect of the consolidation of Amendment of Some Legislative Acts of Ukraine Banks (NABU) developed a draft law “On Restruc- of Financial Service Markets annulled licenses of financial service market state regulation func- in Respect of the Liability of Related Parties of a turing of Liabilities of Citizens of Ukraine under more than 30 insurers (382 companies were li- tions (# 2413a of July 20, 2015); the draft law on Bank” # 218-VIII of March 2, 2015; Resolutions of Loans Denominated in Foreign Currency for the censed as at December 31, 2014); the new word- the amendment of item 3 of Section II “Final Pro- the NBU ## 315, 328, 332, 357). Acquisition of the Sole Shelter (Mortgage Loans)” ing of the Policy on Obligatory Criteria and Target visions” of the Law of Ukraine “On Amendment • The institutional capacity and the financial tentatively supported by the IMF. Ratios of Insurer Asset Sufficiency, Diversification of the Tax Code of Ukraine and Some Legislative independence of the NBU were secured (Law • Starting from April, the amount of domestic cur- and Quality was developed as a tool for the con- Acts of Ukraine in Respect of the Tax Reform” of Ukraine “On Amendment of Some Legislative rency deposits has been growing; in September, tinued clean-up of the insurance market. providing for the restriction of inspections in the Acts of Ukraine in Respect of National Bank of the amount of domestic currency deposits ex- field of business # 2300a of July 6, 2015). Ukraine’s Institutional Capacity Building” # 541- ceeded their level as of the start of the year by What has not yet been achieved: • Support the protection of rights of creditors VIII of June 18, 2015; Law of Ukraine “On Amend- 0.5%. The amount of foreign currency deposits and the reduction in the credit risk concen- ment of the Budget Code of Ukraine to Build Insti- grew by 1.4% in September (for the first time in • Most measures within the scope of the reform tration, and, accordingly, contribute to the tutional Capacity of the National Bank of Ukraine” two years). NBU’s international reserves grew program are implemented within the agreed time resumption of lending and the reliability of # 542 VIII of June 18, 2015, which came into effect to USD 12.8 billion as of October 1, 2015, from frames and with the proper quality, which is en- the system (draft law # 2286a mentioned above on July 10, 2015). USD 7.5 in the beginning of the year. The NBU dorsed by international donors, such as the IMF being a structural milestone under the IMF Mem- • The process of resolution of insolvent banks discount rate was reduced from 30 to 22 percent. or the EBRD. However, delays with the adoption orandum of July 21, 2015; draft law # 3111 imple- was improved (Law of Ukraine “On Amendment • Important steps were made to clean up the stock of the relevant bills needed for the implementa- menting the undertakings under the IMF Mem- of Some Legislative Acts of Ukraine in Respect of market from junk assets and manipulators: as of tion of the financial sector reform cause major orandum of July 21, 2015; draft laws # 2460a, the Improvement of the Household Deposit Guar- September 22, 2015, the National Securities and concern. 2506a-2508a of August 14, 2015, on private en- antee System and the Resolution of Insolvent Stock Market Commission opened 51 securities forcement officers). Banks”, # 629-VIII of July 16, 2015). market manipulation proceedings in connection Ongoing high-priority actions to accelerate the • Protect rights of financial service consumers with deliberate acts having indications of the reform: and, accordingly, contribute to the restoration price manipula- of the trust of the population (draft laws “On tion on the stock To speed up the reform progress, it will be neces- Amendment of Some Legislative Acts of Ukraine In 9 months of the year 2015, 27 insolvent banks were resolved market; within sary to adopt laws in autumn, which: To Improve Protection of Rights of Financial Ser- (32 banks were resolved during the entire year 2014). two months, the • Start of the pension reform as the source for vices Consumers” # 2456 of March 23, 2015; “On trades of 99 is- the long-term funding for the financial sector Consumer Lending” # 2455 of March 23, 2015). suers with the and give the development impetus to the stock Encourage the development of the non-bank Including also the 3rd Quarter: total capitalization of about USD 500 billion were market (the draft law on the amendment of some financial sector (draft law # 1797-1 “On Insur- suspended (to compare, the richest person in legislative acts of Ukraine in respect of the imple- ance”). • A package of draft laws focused on creditor Ukraine has the net worth of USD 6.7 billion or mentation of an accumulative system of the stat- protection were submitted to the Verkhovna UAH 154 billion); the principles of the acquisition utory state pension insurance and unified pension Rada; their implementation would support the of the substantial interest in a professional mem- accrual principles # 2767 of April 30, 2015). This

REFORM PROGRESS 39 FINANCIAL SECTOR REFORM

69% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 Reform program and The status of Ukraine’s Legislative provisions of the methodology for indicators Herfindahl-Hirschman financial market according Experts’ assessment of the 100% creditors’ rights protection 50% Consumer price inflation (CPI) to the classification of assessment have been concentration index success of regulators (adoption of the law) international index agency developed FTSE

Project teams have been Legislative provisions of the The level of foreign- Market participants’ created to implement the rights of financial services Credit-to-deposit Financial market 100% 50% currency and gold 18% assessment of financial REFORM reform program, action consumers (adoption of ratio development reserves market infrastructure PERCEPTION plans developed the law)

Changes to legislation to strengthen the institutional The development of The level of cash in the The penetration rate Stock exchanges Social assessment of 24% capacity and financial 100% derivatives (adoption of 25% economy of insurance regulation financial market credibility independence of the NBU the law) have been provided

76% Changes to legislation to Strengthening control strengthen institutional and responsibility for the The level of non-cash Technical reserves of Economic freedom capacity and financial 25% operations of banks’ related 100% payments in local payment insurers index independence NSSMC have THE CITIZENS THINK THAT: party transactions (adoption system NO CHANGES been provided of the law) CHANGES EXIST Amendments to legislation regarding the transfer of regulators’ functions have been Stimulation of the insurance The level of dollarization of Pension savings of Legal rights reliability conducted (transfer of functions 50% market (a new edition of 50% from The National Commission loans and deposits HHs index for State Regulation of Financial the Law «On insurance») Services Markets to the NBU and NSSMC) Survey conducted by the Changes to legislation to Ensuring resource base TNS agency on a monthly The level of nominal interest basis. strengthen the institutional of banks extension by Assets of the second 100% 100% rates on new loans in capacity of DGF have been adopting the law on term tier pension scheme national currency provided deposits Age of respondents: 18-55 Question asked: How would you evaluate the reforms progress? Improving the protection Legislation on taxation and of minority shareholders Blue segment: people, who answered that services in the financial 20% through the introduction 100% The level of capital adequacy Assets of public JII the changes really exist sector has been amended. of the derivative action Red color represents those who doesn’t see institution any changes

40 IN TIME RISK ZONE OUT OF TIMING SCORECARD THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 EDUCATION REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Systemic renewal of educational content is conducted

Qualitative content and learning methods Alignment of educational programs to meet the needs of the market and incorporation of scientific and technological innovation in education

Academic autonomy of educational institutions is ensured

Effective network and suffiient infrastructure for educational institutions is provided Equal access to qualitative education Accessability of education is ensured (physical access and adaptable educational content, methods and environment) Quality education that fosters critical and creative thinking and prepares socially active citizens Financial and organizational autonomy of educational institutions is able to ensure cultural and sustainable economic ensured development in the framework of globalized competitiveness Division of control and support functions in education management Effective management of education system and system is conducted; Efficient mechanism of public participation in spendinding of public funds education is implemented

Transparent and rational system of finance distribution is organized

Qualitative changes to teacher preparation is ensured

Highly qualified and motivated teachers / Teacher’s qualification system is demonopolized academics

A new generation of academic personnel is formed

REFORM PASSPORT 41 EDUCATION REFORM

Progress to date:

• Two draft laws were developed: (1) “On Vocational Education” providing for the complete reformation of the vocational training system and offering opportunities for employers to influence the development of the vocational education (the bill is now reviewed by the Cabinet of Ministers) and (2) “On Research and Science/Technology Activities” providing for the modification of the process of organizing and financing scientific research. These draft laws have been submitted to the Parliament and are expected to be reviewed in November. • On July 15, the Horizon 2020 agreement was signed with the EU for Ukrainian universities and research institutions to gain access to the financing of innovative research and development projects (Horizon 2020 has a budget of EUR 80 billion). • The academic autonomy of universities was substantially expanded. They are able to set up curricula and recognize for- Activities of 76 higher education establishments and their eign diplomas on their own. branches, which did not deliver the proper educational • For the first time, the ZNO external independent assessment was merged with the state final assessment in the Ukrainian language (in the future, the range of such combined assessment subjects will be expanded; two final assess- quality, were terminated. ments will be merged with the ZNO). • Curricula of the elementary and general secondary school were reviewed for being overloaded with content.

Including also the 3rd Quarter: An important step toward the financial autonomy of • The control was strengthened over the academic integrity (suppression of plagiarism). • The procedure of the internal and external academic mobility of students and teachers was introduced. universities was made by adopting a resolution that • The 2015 enrollment campaign took place on the basis of a new principle: the enrollee had to assign a priority to his permits accounts to be held with state-owned banks for or her applications; they were selected automatically on the basis of the assigned priorities, and proposals for the the own funds of educational establishments and makes state-funded training were made in line with the enrollee’s top priorities. This made it possible to circumvent informal it possible to use these funds freely for the development university enrollment schemes and select students motivated to study. of the establishments. The transparency of the use of What has not yet been achieved: funds is supported by the requirement for educational establishments to publish their financial and other The implementation of the Law “On Higher Education” is not taking place fast enough. The Ministry developed more than 30 reports on their websites. (out of 40) regulatory instruments needed for the implementation of this Law. 19 of them were adopted, while the rest are being under review. The red tape slows the reform substantially.

There is a delay with the submission of the draft Law “On Education” to the Cabinet of Ministers for review. This situation is caused by diverging interests of a large number of stakeholders, because this is the most important law for the educational sector that will set out the new ground rules for the whole system. The bill was broadly discussed by the educational community, the general public, and parents’ organizations. In late June, the public insisted on substantial refinement of the suggested bill before its submission to the Verkhovna Rada. The bill was under review during August and September. Plans call for the draft Law to be submitted to the Cabinet of Ministers for review in the nearest future.

Ongoing high-priority actions to accelerate the reform:

• Adopt the Law “On Education” • Speed up the adoption of the regulatory framework for the higher education reform • Develop the concept of the Law of Ukraine “On General Secondary Education”.

42 REFORM PROGRESS EDUCATION REFORM

59% Progress in Tasks TASKS OUTCOMES completion for 2015 Mechanism for access to finance Informatization and computerization of Scientific and methodical Developed Strategy for Higher and administrative information Transparency of administrative and schools (adoption of a new sanitary, council and scientific and of local education departments education reform in Ukraine 50% 50% 0% finance activity of Universities and medical norms for computer classes methodical commissions at developed (in particular to until 2020 vocational institutions and adoptions requirements to the MoES organized the system of school budgets allocation at the local level) informational (program) supply

Developed draft Laws «On Transparency of administrative and REFORM System of theses preparation Electronic competitions of English-language environment for children Education», «On Vocational 100% 60% 100% finance activity of local education PERCEPTION and submission reformed school textbooks and youth created Education» departments

New Law «On Education» 50% Increasing the number of Universities, Participation in PISA 28% adopted Ukraine-EU Agreement New specification of fields schools , research institutions «Horizon 2020» signed and 100% and specialities for Higher 100% participating at international education ratified Developed draft Law «On education institutions programs (Horizon2020, Erasmus+ and 72% Scientific and Technique 50% international projects) De-bureaucratization of education activity»

National Agency for Quality THE CITIZENS THINK THAT: Assurance in Higher education Law «On Vocational External Independent Tests Increasing of competitiveness of 25% 70% 100% NO CHANGES organized and started its Education» adopted improved Ukrainian education PERCEPTION CHANGES EXIST work Public trust to teacher and 67% scholar increased (TNS) Implementation of National New State standards for Network of vocational institutions 30% professional education 37% School curriculums revised 100% framework of qualifications developed and approved (1-4 classes, 5-9 classes) improved Society estimates education reform as successful Survey conducted by the Concept and Action Plan Concept for pedagogical TNS agency on a monthly for national and patriotic Legislative documents Educational, vocational, and scientific Increased level of employees’ basis. education developed and 100% education development 50% on preschool institutions 0% curriculums in higher educational satisfaction of the quality of higher approved revised financing developed institutions developed and approved and vocational education and its aim to satisfy the needs of labour market Age of respondents: 18-55 Question asked: How would you evaluate the Normative-legislative base Equalize conditions for reforms progress? for inclusive education MoES analytical capacity operation of pre-school and Pre-School education enrolment realization at all Ukraine 50% 55% 30% Blue segment: people, who answered that increased primary school institutions of increased educational levels the changes really exist different types of ownership developed. Red color represents those who doesn’t see any changes

THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 SCORECARD IN TIME RISK ZONE OUT OF TIMING 43 ENERGY SECTOR REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Equal access to the market for state-owned and private companies is ensured; transparency and competition increased

Market-based prices is ensured for all energy resources; tariffs for electricity and gas for all customers (incl. households) are on Energy Markets Liberalized economically feasible level

Majority of state-owned energy companies are privatized and/or restructured and managed in line with best practices

Building a system with long-term sustainability for the national finances, national security, Diversification of supply sources for all energy resources is ensured consumers, businesses and the environment

Energy Resources Supplies Diversified and Rationally Utilized Increased production of own energy resources

National energy consumption is decreased

Independent and enhanced energy regulator is functioning Effective Market Regulation, Safety and Environment Protection are Ensured Enhanced State Control of Energy Safety and Environment

44 REFORM PASSPORT ENERGY SECTOR REFORM

Progress to date: clear fuel supply volumes and price decreases • The draft Law of Ukraine On“ State Support of which anticipated the actual decrease of gas - Law of Ukraine “On the Termination of the Ef- the Coal Industry” was developed and is cur- royalties as of 1 October 2015 was not adopted • With the aim to create an effective competitive fect of the Agreement between the Cabinet of rently undergoing public consultations, which by the Verkhovna Rada of Ukraine. environment in Ukraine’s energy markets, and Ministers of Ukraine and the Government of envisages new pricing principles, new princi- • The Verkhovna Rada did not adopt the Law of with due account of key requirements of EU the Russian Federation on the Cooperation in ples for the provision of government support to Ukraine ”On the National Commission for legislation: the Construction of Energy Blocks No. 3 and the coal industry in order to implement effec- State Regulation of Energy and Public Util- - the Law of Ukraine “On the Natural Gas 4 of the Khmelnytskyi Nuclear Power Plant tive restructuring of the sector (liquidation and ities”. Market” was passed on 9 April 2015. Sec- (NPP)” was adopted with the aim to retain al- conservation of coal mines), ensure self-suffi- • The Verkhovna Rada of Ukraine did not adopt ondary legislation developed and approved to ternative equipment suppliers with respect ciency of coal extraction and cut state support the Law of Ukraine “On State Support of the implement this law to the construction of the nuclear blocks. by 2020 (for dewatering, output increase and Coal Industry”. - the draft Law of Ukraine On“ the Electricity • Clean, cost efficient NPP-generated electricity environmental protection operations only). • Trading in steam coal through stock ex- Market” was developed, public consultations grew from 47% to 56% of Ukraine’s electricity • The Concept of the Development of the changes in order to determine its fair market were completed, positive assessments from production structure Ukrainian Coal Industry was developed, ap- price was not implemented. the Energy Community and EU experts on its • The preparation of the first report of the Ex- proved by trade unions and the Cabinet of Min- compliance with EU legislation (Third Energy tractive Industries Transparency Initiative isters of Ukraine and submitted to the Verkhov- Ongoing high-priority actions to accelerate the Package) were received, the development of (EITI) is at its final stage. The publication of the na Rada of Ukraine. reform: secondary legislation with the participation of report it is anticipated to introduce internation- • The Concept of the Development of the leading experts commenced al reporting standards, improve the adminis- Ukrainian Nuclear Industrial Sector was • Adopt a number of important draft laws, includ- - the draft Law of UkraineOn “ the National tration system with regards to natural resourc- developed and submitted to the Cabinet of Min- ing the draft law “On the Electricity Market”, “On ( Commission for State Regulation of Elec- es, strengthen the trust of the international isters of Ukraine. the National Commission for State Regulation tricity and Public Utilities” was developed, community, private investors and international • According to Ukraine’s commitments to the of Energy and Public Utilities”, “On the State approved by the Cabinet of Ministers and sub- financial institutions to Ukraine. The Law of IMF and pursuant to the approved schedules, a Support of the Coal Industry”, and the Concept mitted to the Verkhovna Rada Ukraine “On Amending Certain Legislative phased increase of tariffs on natural gas and of the Development of the Ukrainian Coal In- • Ukraine’s energy security improved signifi- Acts of Ukraine on Ensuring Transparency electricity for all consumer groups, including dustry and the Concept of the Development of cantly due to the significant diversification in Extractive Industries” was passed on 16 residential consumers, is being implemented. the Ukrainian Nuclear Industrial Sector. of the energy supply routes and the reduc- June 2015. A transition to an economically-sound level of • Improve communication and approval of laws tion of Ukraine’s dependence on one traditional • With the participation of leading experts, new natural gas and electricity tariffs will stimulate and secondary legislation between different gas supplier: royalties on gas extraction were conceptual- efficient use of these resources and installation public authorities. - Substantial decrease in imports of Russian ly developed (decreasing from 55% in relation of energy efficient equipment. To protect the • Increase the level of interaction and coordina- gas, which is now often significantly less than to fields with the depths more than 5000 me- most vulnerable groups of the population, the tion within the Reform Task Force, to strength- volumes of gas supplies at Ukraine’s western ters , and 28%, in relation to the fields with the system of subsidies for housing and public en the role of independent experts. border depths of less than 5000 meters, to 29% and utilities was simplified. • Introduce a mechanism of operational reaction - Diversification of energy supply routes en- 14%, respectively) in order to provide economic to investors’ concerns in the energy sector. hanced effective negotiations with the Rus- incentives to increase domestic production of What has not yet been achieved: • Intensify reforms with respect increasing ener- sian Federation and resulted in a decrease of hydrocarbons and reduce imports. gy efficiency. the gas price from USD 337.1 per 1,000 cubic • Economic incen- • To develop a number of rules aimed at the effi- meters (1st Quarter 2015) to USD 227.40 (4th The process of privatization is ongoing for power utilities tives for boosting cient use of energy resources. Quarter 2015). and coal mining enterprises. The list of coal mining the domestic pro- • To improve the financial condition of state en- • With the purpose to diversify supply sources duction of hydro- terprises as a result of further cost optimiza- for nuclear electricity plants: facilities subject to privatization in 2015 has been updated, carbons (in order to tion and implementation of priority investment - agreements with alternative suppliers namely 26 entities, pre-privatization preparation was reduce imports) and programs. were signed (in particular, with Westing- completed in relation to five coal mining enterprises, for attracting private • To change the approach to the system of re- house) to supply modified fuel deliveries and investments in the en- taining professional staff in the central power to enrich uranium, providing Ukraine with a including one in Volyn oblast and four in Lviv oblast. The ergy sector were not bodies and state enterprises. number of important benefits including guar- preparation of enterprises in the Donetsk and Luhansk yet established legally. anteed fuel supplies to all energy blocks in oblasts is underway. • The draft Law of case of crisis circumstances, increase of nu- Ukraine No. 2352а

REFORM PROGRESS 45 ENERGY SECTOR REFORM

31% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 The volume of gas Legislative level guarantee Implemented mechanism The system of targeted consumption by population, of an independent energy to determine the market subsidies to vulnerable social Prices for coal of energy budgetary institutions Citizens understand the 20% regulator according to the 15% 35% price of coal energy through groups to pay for gas and brands are determined by and organizations and economically justified requirements of the Third electronic exchange trading electricity is improved the market enterprises CTV is reduced tariffs Energy Package by 3.66 bn. cub. m. (to twenty bn. cub. m.) REFORM Ensured implementation Approved the National Action of normative legal and PERCEPTION Approved by the State the Plan on energy efficiency for State support of coal Target economic program of technological measures to the period until 2020 to improve industry is reduced to a 25% sync the Energy System 20% 25% Conducted thermo- reforming the coal industry the efficiency of final energy minimum (less than 2 Consumers are satisfied of Ukraine with the united modernization of 24% for the years 2015-2020 consumption and reduction or bln UAH Per year) and is with the quality of gas and energy systems of EU substitution of natural gas apartment and individual countries directed exclusively to electricity supply services 26,6% houses funding for mine drainage Accepted secondary A mechanism of energy and conservation A first phase of a legislation for the reform services (ESCO contracts) to transparent and effective and liberalization of the 73,4% 70% natural gas market in 40% attract private investment for 25% Completed process of Provided 100% control of Community is involved privatization of mines is energy efficiency measures privatization of state coal gas, heat consumption and in the implementation of accordance with the in budgetary institutions is completed Law «On the natural gas enterprises metering of water energy efficiency programs market» implemented THE CITIZENS THINK THAT: Uniform tariffs for all NO CHANGES Energy-intensiveness of CHANGES EXIST Provided organization consumers, including the GDP in 2020 is reduced by and infrastructure for the population, for electricity 70% of respondents at least 20% compared Provided organization reorganization of «Naftogaz Created Energy Efficiency and gas set at economically evaluate the process of 40% to 2014. and infrastructure for an Ukraine» in accordance Fund as an instrument for feasible levels arranging and receipt of effective system of social with the law «On natural guaranteed state support targeted subsidies to pay support of the coal industry gas market» and investment in the workers and the population 25% 20% The system of targeted for gas and electricity as implementation of energy of areas with coal and subsidies for vulnerable «simple» and «effective» Survey conducted by the coal-processing enterprises efficiency measures in homes social groups to pay for gas TNS agency on a monthly The law contains a provision on and institutions of public Annual import into Ukraine that are under liquidation creation of economic incentives and electricity is functioning basis. sector of natural gas, oil / (conservation) to build the state hydrocarbon 30% production (to reduce imports) Implemented new petroleum, coal and energy and to attract private investment in the energy sector liberalized market model fuel for nuclear power does Age of respondents: 18-55 of gas and electric power not exceed 30% from the Question asked: How would you evaluate the based on market relations single source / provider reforms progress? Conducted gradual elimination Adopted basic legislation between all parties, in for reform of electricity of cross-subsidization and Blue segment: people, who answered that accordance with the Third the changes really exist market in accordance with 20% alignment of prices for natural 50% the requirements of the Third gas and electricity for all Energy Package Red color represents those who doesn’t see Energy Package consumers any changes

46 IN TIME RISK ZONE OUT OF TIMING SCORECARD THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 STATE OWNED ENTERPRISE GOVERNANCE REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Transparency guidelines & disclosure standards are developed & adopted

TRANSPARENCY & ACCOUNTABILITY Compulsory external audits are implemented SOE sector is transparent and disclosure standards improved Regular reporting requirements on SOE sector are implemented

SOE sector web-page developed and operational

Law on corporate governance and mechanisms of appointing Independent Board members is adopted

Supervisory Boards in unitary enterprises are established OWNERSHIP POLICY & CORPORATE Operating efficiency of SOEs GOVERNANCE STANDARDS Code of Corporate governance is implemented improved with proper budgetary Strategic objectives and principles of SOEs oversight, Government’s management and its short- and long-term Corporatization of SOEs is conducted ownership policy towards SOEs targets and key principles of corporate and other state-owned assets governance in SOEs developed based on OECD Strategic planning standards improved developed, corporate governance Guidelines and the best foreign practices of SOEs strengthened, Clear objectives for SOEs are set restructuring and reorganization of SOEs completed and privatization process transparency Management system of non-commercial activities of SOEs is implemented executed Nomination procedure for CEOs and Board Members implemented NOMINATION AND REMUNERATION CEOs are nominated with transparent procedure and proper incentives plans that help to align owners Remuneration Policy of CEOs and Board members is implemented and management interests developed to prevent embezzlement Management selection and remuneration procedure is implemented

Privatization list and changes to law on privatization allowing hiring advisors are approved PRIVATIZATION & RESTRUCTURING Transparency and credibility of privatization process is increased. SOE portfolio is Restructuring of unprofitable and unpromising SOEs is conducted restructured All loss-making SOEs with no turnaround potential are liquidated

REFORM PASSPORT 47 STATE OWNED ENTERPRISE GOVERNANCE REFORM

Progress to date: managers of state-owned enterprises and the ments were collected. on the establishment of the holding company Introduction of more stringent information market level of the compensation Analysis of the existing portfolio of state- has been developed. It includes a preliminary disclosure requirements for state-owned en- • The procedure of the appointment of manag- owned enterprises for the ascertainment of list of state-owned enterprises to be handed terprises ers of the largest state-owned enterprises was the restructuring strategy over to the holding company, and has been sent • Methodological Recommendations for the As- upgraded by means of the approval of amend- • Resolution of the Cabinet of Ministers # 761 to other ministries for approval. surance of the Transparent Operation of Busi- ments to Resolutions of the Cabinet of Ministers “On Approval of the Procedure of the Transfor- • Ministry of Economic Development and Trade ness Entities of the Public Sector of Economy # 777 of September 3, 2008, “On Competitive mation of a State-owned Unitary Commercial initiated the establishment of a working group were approved (Order of the Ministry of Eco- Selection of Chief Executive Officers of Business Enterprise into a Joint Stock Company” was comprising representatives of key line minis- nomic Development and Trade # 116 of Febru- Entities of the Public Sector of Economy”. approved. tries and the State Property Fund of Ukraine in ary 11, 2015). Harmonization of the salaries of chief officers • Information about non-working state-owned order to improve the communication process • A draft law was developed prescribing the of state-owned enterprises with the compen- enterprises has been obtained from managing and detect issues with the holding. obligatory disclosure of the in- bodies and processed. Due to the low Privatization of non-strategic state-owned formation (currently, disclosures quality of the available information enterprises have to be agreed upon with the The concept of a National Holding Company was and limited resources, a pilot project of • A list of 345 state-owned enterprises that can line ministries in charge). liquidation of state-owned enterprises be privatized in 2015 has been approved - Res- Analytical reports on the oper- developed on the basis of the best international practices managed by the Ministry of Econom- olution of the Cabinet of Ministers # 271 of ations of Top 100 state-owned and OECD guidelines. ic Development and Trade of Ukraine May 12, 2015, “On Transparent and Competitive enterprises were prepared by was launched in September. Plans call Privatization in 2015”. the Ministry of Economic Devel- for using the lessons learned for all • The Cabinet of Ministers approved a list of opment and Trade. sations on similar positions in the private sec- other ministries and state-owned enterprises state-owned enterprises not subject to the pri- • The first analytical report for the year 2013 and tor subordinated to them. vatization (913 SOEs), and submitted it to the 9 months of the year 2014 (Top 100) was pub- • A draft resolution of the Cabinet of Ministers Verkhovna Rada for ap- lished in English and Ukrainian. was prepared that will permit chief officers to proval (draft law # 1567). • The 2014 analytical report (Top 100) was pub- obtain market-based compensations (in line A list of 345 state-owned enterprises that can be privatized • Separate draft laws lished in English. with principles of the European Commission) in 2015 has been approved have been submitted to • The Q1 2015 analytical report (Top 100) was was developed and submitted to the Cabinet of the Verkhovna Rada call- published in Ukrainian. Ministers for review. The endorsement is ex- ing for the removal of Requirements for audits of financial state- pected. state-owned distilleries ments by independent auditors were made Setting up clear objectives for state-owned • The Cabinet of Ministers issued an instruction and seaports from the list of state-owned en- more stringent. companies and special obligations on the development of restructuring plans for terprises prohibited from being privatized. • Resolution of the Cabinet of Ministers # 390 • Data supplied by state-owned enterprises on top 12 state-owned enterprises with the high- of June 4, 2015, on “Some Issues of Audits of objectives of their activities have been pro- est fiscal risks. The deadline for this exercise is What has not yet been achieved: Business Entities of the Public Sector of Econo- cessed; the companies were divided into three November 1. my” was adopted. categories (purely commercial, commercial An Order of the Ministry of Economic De- Privatization of non-strategic state-owned • The analysis of responses of ministries on the plus strategic, purely strategic activity). velopment and Trade on the revision of the enterprises status of audits under Resolution of the Cabinet • A draft law on setting clear objectives for the methodology of the development of financial • Verkhovna Rada did not vote on draft law of Ministers # 390 of June 4, 2015, is going on. top 100 state-owned enterprises was sent for plans was approved; it provides for merging # 1567, the list of SOEs not subject to the pri- Establishment of supervisory councils in uni- endorsement. financial and strategic plans into a single doc- vatization (913 SOEs) and two alternative draft tary enterprises and the introduction of inde- • A methodology has been developed for gather- ument—a three-year action plan. laws (on distilleries and sea transport). pendent directors ing the information about special obligations of • Several meetings have been held with the par- • Verkhovna Rada did not approve amendments • Amendments to the Law of Ukraine “On Man- state-owned enterprises, the supervision and ticipation of line ministries, chief executives of to draft law 2319a “On Improvement of the Pro- agement of State-owned Enterprises” were en- management thereof. the largest state-owned enterprises and the cess of Privatization of State-owned Enterpris- dorsed by the Cabinet of Ministers and submit- • The preliminary analysis of special obligations Ministry of Economic Development and Trade es”. ted to the Verkhovna Rada for review. of the state has been carried out. for the discussion of challenges and the content • Rada’s Economic Policy Committee approved • Data on special obligations have been gathered of strategic and financial plans. Ongoing high-priority actions to accelerate the the amendments; they are expected to be voted and analyzed (commercial and non-commercial • Amendments are being developed to the exist- reform: in November, 2015. activity, regulated pricing). ing law-making procedures. • The draft law was also submitted to the IMF • The methodology of the disclosure of non-com- Establishment of the National Holding Com- Organize a number of meetings with factions of for review; the comments were discussed with mercial activities of state-owned enterprises pany to manage top 15 to 20 state-owned en- the Verkhovna Rada to explain amendments to representatives of the IMF. was developed and sent for review to indepen- terprises. draft laws to be approved. Transparent process of the appointment of dent auditors and foreign experts, and com- • A draft Resolutions of the Cabinet of Ministers

48 REFORM PROGRESS STATE OWNED ENTERPRISE GOVERNANCE REFORM

82% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 CMU Decree «On approval Legislation on Key financial information of the most of the Strategy on improving Business society trusts SOEs due to 100% corporatization process important SOEs is now available at the effectiveness of the SOE Reform Nomination Committee of SOEs except fiscal the web-site (TOP-100) entities in the public sector» structure and procedure enterprises changed. CMU approved - MEDT Decree 100% Decree “On adoption of 100% “On approval of principles transformation process of Number of CEOs of the most REFORM Guidelines on strategic of Nomination Committee” state unitary commercial important SOEs (TOP-50) selected PERCEPTION planning and management 100% enterprise into joint stock by the transparent procedure of Public society evaluates SOE reform are drafted company the Nomination Committee and concluded contracts

20,1% Preparation of the First Legislation on appointment Number of Supervisory boards which Annual Report on SOE 100% Legislation on mandatory of independent members consist of independent directors functioning audit of financial accounts for the Board of directors among TOP-100 SOEs of SOEs changed – CMU of especially important 100% 60% 79,9% Decree “On certain issues enterprises from the Number of approved plans to conduct Communication Strategy on of conducting audit of SOE professional sphere 100% audits of financial accounts of the SOE Reform prepared financial accounts” (Association of professional THE CITIZENS THINK THAT: directors) changed most important SOEs (TOP-100) NO CHANGES CHANGES EXIST

Legislation on privatization Necessary amendments to Appointment of Number of plans on privatization process with involvement the Law of Ukraine “On the management for SOEs of SOEs by SPFU approved in of advisors and preparation list of SOEs banned from 25% of especially important accordance of the adopted list for for sale of the privatization privatization” (excluded more enterprises through than 500 enterprises) 2015 100% objects in accordance with 20% contest, based on best international practices business competence and Survey conducted by the changed – Law of Ukraine TNS agency on a monthly appropriate motivation CMU Decree “On “On privatization of state basis. system transparent and competitive 100% property” privatization in 2015”

Age of respondents: 18-55 Question asked: How would you evaluate the reforms progress? Blue segment: people, who answered that the changes really exist

Red color represents those who doesn’t see any changes

THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 SCORECARD IN TIME RISK ZONE OUT OF TIMING 49 AGRICULTURAL SECTOR REFORM

PURPOSE STRATEGIC GOALS OPERATIONAL GOALS

Functioning infrastructure and framework for fair pricing including commodities and agro products exchange created FAIR PRICING for agricultural products for producers and buyers is ensured Existing mechanisms abolished or new mechanisms /efficient state regulation introduced over pricing for agricultural products

Favorable regulatory environment for agro producers created

PRODUCTIVITY Internationally recognized mechanisms and instruments, like crop receipt and agro insurance implemented via efficient use of resources and implementation of good practices increased Access to finance and knowledge via IMF, World Bank, EBRD, EIB and other support mechanisms improved

Increased agricultural Land market liberalized competitiveness and promotion of rural development in line with EU and international standards Promotion of domestic manufacturers and agro products on foreign markets enhanced

Level of EXPORT increased Ukrainian agricultural legislation and food safety requirements harmonized with EU standards

Overarching logistics chain for transportation and storage created

Level of processing of products increased

VALUE ADDED in agricultural products is Sectors where more value is added in agricultural products developed increased

Modernization and innovations in agriculture implemented

50 REFORM PASSPORT AGRICULTURAL SECTOR REFORM

Progress to date: • Law of Ukraine # 222 of March 2, 2015: Including also the 3rd Quarter: tion at bonded warehouses - licenses for the trade in pesticides have been • The procedure of the appointment of chief canceled; • The Agrarian Notes project has been ex- What has not yet been achieved: executives of state-owned enterprises - licenses for the fumigation have been can- panded to Cherkasy, Vinnytsia, and Kharkiv solely on an open competitive basis has been celed; Oblasts. • No success has been achieved with imple- introduced. - licenses for the trade in pedigree resources • The draft Resolution “On Amendment of the menting the resolution of the government • A pilot project of raising working capital loans have been canceled; Veterinary Documents Issue Procedure” providing for the privatization of 86 agrarian for farmers via agrarian notes has been suc- - licenses for the commercial fishing have developed by the Ministry of Agrarian Policy state-owned enterprises with further 15 cessfully implemented in Poltava Oblast. been canceled; and Food of Ukraine has been approved. The companies added to the list. None of them • The preferential VAT regime has been pre- - licenses for the land appraisal work and land resolution canceled the obligatory obtainment could be handed over into the scope of man- served for agricultural companies. tenders have been canceled; of the Form 2 Veterinary Certificate. agement of the State Property Fund. About • Resolution of the Cabinet # 42 of January 28, • Law of Ukraine # 247 of March 5, 2015: • Transparent and open competitions have 50 companies out of this number are still 2015, was adopted. - notaries have been vested with the power to been held for the appointment of directors of awaiting decisions of the Verkhovna Rada or - A list of objects of regulation requiring the register the lease interest in the agricultural state-owned enterprises subordinated to the the Cabinet of Ministers for formal reasons. obtainment of a quarantine certificate has land; Ministry. • The Verkhovna Rada did not support draft law been shortened. - it has been made possible to submit • An information center tasked with the pro- # 1159 providing for the conveyance of the documents in the elec- vision of individuals with the comprehensive state-owned agricultural land into the munic- The licensing regime for the importation of crop protection tronic form; information about activities of the ministry ipal ownership. agents was canceled in 2015. Resolution of the Cabinet - it has been made and its structural units started working at the possible to simulta- Ministry of Agrarian of Ministers of Ukraine # 1 of January 14, 2015, was neously submit docu- Policy and Food The development of the Universal Comprehensive adopted. ments confirming the of Ukraine. It also ownership of, and the provides advice on Strategy of the Development of Rural Areas of Ukraine lease interest in, the the registration of till Year 2020 has been completed with the support - The time for the issue of a quarantine or phy- land; agricultural compa- from the European Commission and the participation tosanitary certificate has been reduced from • Law of Ukraine # 87 of January 13, 2015: nies, the procedure of more than 170 international and Ukrainian experts. 5 days to 24 hours. - state support to medium and micro agri- of the exercise of - The procedure of the registration of crop pro- cultural producers by means of lifting limits business, the entry tection agents (CPAs) has been improved. on the capacity of animal farms and facili- into foreign markets, the green tourism, etc. Ongoing high-priority actions to accelerate • Law of Ukraine # 191 of February 12, 2015: ties that can claim the partial refund of the • Government decided to reform the system of the reform: - The list of essential conditions of a lease construction or rehabilitation costs from the fisheries. contract has been shortened. state; • Government approved a new procedure for • Raise financing to help implement the reform - Any disposal of the leased land without the • Law of Ukraine # 287 of April 7, 2015: issuing certificates for lumber, which will be program, and pay for the work of reform consent of the lessee is disallowed. - the legislation of Ukraine in the field of the issued to permanent forests users. teams. - The minimum agricultural land lease period management of byproducts of animal origin • 8 enterprises are transmitted to the State is 7 years. has been harmonized with the EU legislation. Property Fund for privatization. - The lease is payable in cash. • Law of Ukraine # 388 of May 12, 2015: • Access to overseas markets for Ukrainian - Voluntary development of design documents - the privatization of the land under facilities food products is ensured: China - dairy prod- on crop rotation. of the engineering infrastructure of amelio- ucts industry, Israel - eggs, Egypt - poultry. - Excessive regulation of the production of or- ration systems has been prohibited. • Government decided to approve a state sup- ganic products has been eliminated. - The system of seed production in Ukraine port for the livestock industry. - 14 permitting documents have been elimi- was tested against the EU requirements. • An opportunity for ships unloading at check- nated. points in ports with further products inspec-

REFORM PROGRESS 51 AGRICULTURAL SECTOR REFORM

80% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 Society determines the attractiveness Reform in the field of food safety Determining the legal status Increase in foreign direct investment Development of a single 100% of doing business and living in the and quality. (Strategy) and regulate the procedure of into the industry and comprehensive countryside 100% disposal of the collective land 30% agricultural strategy until property and of the land whose 2020 Legislative regulation of transfer Society determines a significant increase owners have died. Increased agricultural exports (in to communal ownership the in the quality and safety of Ukrainian food monetary terms) production land of state property outside REFORM 30% Deregulation of business the settlements, except for the PERCEPTION The transition from crop rotation An independent poll shows approval of activities in agricultural 100% land that has objects of state 100% Increase of employment in rural areas control to the soil quality control. reforms by market actors sector. property on it.

Privatization of state 21,4% 100% Exclusion from the law of Ukraine enterprises. norms that allow to acquire the Development, approval and adoption right of agro-land lease on non- of the concept of state support 0% 70% Promotion of domestic competitive basis; Promoting unity to farmers, small and medium 78,6% agricultural and food products 100% and self-organization of land owners agricultural producers. to foreign markets. (shares) to land consolidation.

THE CITIZENS THINK THAT: Implementation of Development, approval and 70% NO CHANGES cooperation programs Simplification of procedures adoption of a new tax system. CHANGES EXIST with the IMF, World Bank, for registration of land lease, 100% 100% EBRD, EIB and other particularly by encouraging parties to Development, approval and international financial notarize the land lease agreements; adoption of the Strategy to 70% institutions. (Program) reform rural areas.

Strengthening the responsibility Development, approval and Ensuring legislative of the land lease parties, in 100% adoption of the Strategy to 70% Survey conducted by the regulation and practical case of failure to comply with TNS agency on a monthly implementation of agreement. reform fish industry. basis. financial instruments in agricultural market Legislative securing of a Development, approval and (agricultural receipts, 100% minimum term to lease 100% adoption of the Strategy to 70% Age of respondents: 18-55 Question asked: How would you evaluate the futures and forward agricultural land. reform forestry. reforms progress? contracts, including those signed on the global Blue segment: people, who answered that Setting mandatory payment Development of the Concept to the changes really exist commodity and stock of the agricultural land rent 100% 70% markets). exclusively in monenaty form. reform agricultural science. Red color represents those who doesn’t see any changes

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Progress to date: • The Council for Judicial Reform has developed What has not yet been achieved: • The Cabinet of Ministers should take mea- draft amendments to the Code of Civil Pro- sures to ensure proper implementation of • The Council for Judicial Reform drafted and ap- ceedings, the Code of Commercial Pro- • It is necessary to improve the mechanism the Action Plan on realization of provisions proved the Strategy of Reform of the Judi- ceedings, and the Code of Administrative of implementation of the Action Plan on re- of the Strategy of reform of system of justice, cial System, court proceedings and associated Court Proceedings that are currently subject alization of provisions of the Strategy of reform court proceedings, and adjacent legal insti- legal institutions for 2015-2020 (the “Strat- to public and expert discussion. of the system of justice, court proceedings, and tutions for 2015-2020, by its subordinated egy”), and a detailed Action Plan as regards • The Council of Judges of Ukraine has drafted adjacent legal institutions for 2015-2020 bodies. implementation of its provisions. • The SJQC has • The Council for Judicial Reform should prepare • The Decree of the President of Ukraine The Council for Judicial Reform has developed, and not started quali- a draft policy document on structural optimi- dated 20 May 2015 approved the Strategy Verkhovna Rada of Ukraine has approved in the first fication evaluation zation of the court system. and requested that the Cabinet of Ministers of the judges of the • The Council for Judicial Reform should orga- specify the procedure for realization of the reading, the draft laws on the reform of the system of Supreme Court and nize public and expert discussion of the draft Action Plan as regards implementation of its enforcement of court decisions. other specialized su- laws on amendments to the Code of Civil provisions and inform peer organizations on preme courts due to Proceedings, the Code of Commercial Pro- the progress of the plan’s realization. failure to agree or late ceedings, and the Code of Administrative • The Verkhovna Rada passed the Law of Ukraine and approved the Regulation on the Procedure agreement by the Council of Judges of Ukraine Court Proceedings. “On Guarantee of the Right to a Fair Trial”, for Maintenance of the Judge Dossiers (profes- of the Regulation on the policy and procedure • The Council for Judicial Reform should finalize stipulating: sional records). for qualification evaluation of judges the process of preparation of the draft law of - the policies and procedures for effective judi- • The Dossiers are being prepared by the State Ukraine “On Advocacy”. cial staffing, includingevaluation of all judg- Judicial Administration. Ongoing high-priority actions to accelerate the es to verify their competence, honesty and • The SJQC has approved the Regulation on the reform: compliance with professional ethics; policy and procedure for qualification eval- - to implement recording of judges’ profes- uation of judges, the Regulation on the pro- • The President of Ukraine should submit to sional decisions; cedure for passing examinations and the Verkhovna Rada the draft Law on amendments - new transparent rules of establishment of system of scoring to be applied during qualifi- to the Constitution of Ukraine as regards the the Supreme Council of Justice (SCJ) and the cation evaluation of judges. system of justice Supreme Judges Qualification Commission of • The Council of Judges of Ukraine is in the • The Verkhovna Rada should submit the draft Ukraine (SJQC); process of evaluation of the Regulation on amendments to the Constitution as regards the - measures improving procedures for selec- the policy and procedure for qualification eval- system of law to the Constitutional Court of tion of new judges, raising requirements for uation of judges and the Regulation on the pro- Ukraine candidates; cedure for passing examination and the system • The Verkhovna Rada should pass a law that - to apply competitive procedures during ap- of scoring to be applied during qualification would enable to accelerate the process of pointments and transfers of judges; evaluation of judges, previously approved by agreement of the “Regulation on the policy - to implement effective procedures of dis- SJQC. and procedure for qualification evaluation of ciplinary proceedings as regards judges; • The draft law on amendments to several laws judges” and conduct qualification evaluation of - to restore the role of the Supreme Court of of Ukraine as regards improvement of cer- judges under public control Ukraine in the capacity of the supreme ju- tain provisions of legislation on court pro- • The Supreme Commission of Qualification dicial body in the system of courts. ceedings has been drafted and submitted to of Judges – after approval of amendments to • New members of the SCJ and SJQC selected the Verkhovna Rada (including on qualification the Law of Ukraine “On Court Proceedings and and appointed following a competitive proce- evaluation of judges) Status of Judges” – should commence quali- dure and based on the new procedures comply- • The Council for Judicial Reform is finalizing the fication evaluation of judges of the Supreme ing with the principles of rule of law, open- draft law of Ukraine On“ Advocacy” Court of Ukraine and specialized supreme ness, and political neutrality. courts.

REFORM PROGRESS 53 JUDICIAL REFORM

64% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 Development of the Strategy for reforming the judiciary Development and adoption Results of surveys to determine structure, the judiciary of the Law of Ukraine «On Providing free legal aid in at least the level of user satisfaction proceedings and related legal 100% 100% Updated procedural law 50% institutions and the Action Plan ensuring the right to a fair 10% of civil cases (conducted by industry actors for its implementation for years trial» or external observers) indicates 2015-2020 increase of public confidence in the administration of justice in general REFORM New principles of formation and in the effectiveness of legal and activity of bodies aid, advocacy, judicial decisions’ PERCEPTION responsible for appointing the Providing free legal aid in at least 100% The introduction of e-justice 30% enforcers, notaries and alternative judiciary (High Judicial Council 20% of administrative cases dispute resolution systems in and the High Qualification particular 15% Commission of Judges)

Introduced new procedures for Improvement of Ukraine ranking in the selection and qualification Reform of the enforcement 50% 70% the World Economic Forum (WEF) examinations, special training of judgments for judicial candidates Global Competitiveness Report raiting 85% Results of surveys to determine the level of user satisfaction (conducted The introduction of within the performance management THE CITIZENS THINK THAT: qualification procedures Improvement of Ukraine ranking in Amendments to legislation system of the Prosecutor’s office NO CHANGES and regular evaluation of 60% 40% Governance Indicators raiting (Rule of or external observers) indicates CHANGES EXIST regulating the Bar judges (including self- Law Index (World Bank Institute) increase public confidence in the evaluation) Prosecutor’s Office in particular and / or criminal justice in general Bringing the powers and Покращення оцінки України в Attracting new staff to the activities of the Prosecutor 45% 60% рейтингу World Justice Project (Rule judiciary in line with the European standards of Law Index) Survey conducted by the TNS agency on a monthly basis. Improvement of Ukraine ranking The Ukrainian population’s in the World Justice Project raiting level of trust in the judicial 12% (Rule of Law Index) system (TNS) Age of respondents: 18-55 Question asked: How would you evaluate the reforms progress? Blue segment: people, who answered that Improvement of Ukraine ranking in the changes really exist the WB Doing Business Index raiting

Red color represents those who doesn’t see any changes

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Progress to date:

• Constitutional Commission, created in compliance with the Decree of the President of Ukraine, drafted amendments to the Constitution of Ukraine addressing decentralization, justice, and protection of human rights • Draft amendments to the Constitution of Ukraine ondecentralization: - were approved by the Constitutional Commission - received positive conclusion of the Venice Commission received conclusion of the Constitutional Court of Ukraine on its compliance with requirements of Articles 157 and 158 of the Constitution of Ukraine were voted by Verkhovna Rada of Ukraine in the first reading • Draft amendments to the Constitution of Ukraine as regards reform of thesystem of justice: - received positive preliminary conclusion of the Venice Commission The Venice Commission issued positive Preliminary - were elaborated considering the recommendations of the Venice Commission and results of public and expert discussion and Final Conclusions on the draft amendments to the - received positive final conclusion of the Venice Commission Constitution of Ukraine as regards reform of the system - were approved by the Constitutional Commission of justice with the comment “the last version of the • Draft amendments to the Constitution of Ukraine as regards decentralization of public power and reform of the system of justice are in full compliance with the applicable European Union standards amendments to the Constitution appears to be quite • Draft amendments to the Constitution of Ukraine as regards human rights: positive and well prepared, and deserves full support ” - were drafted by the Task Force on human rights issues - are subject to public and expert discussion

Including also the 3rd Quarter:

• Draft amendments to the Constitution of Ukraine as regards decentralization of power and draft amendments to the Con- stitution of Ukraine as regards reform of the system of justice, including on the regional level, have been widely discussed Verkhovna Rada of Ukraine voted for the draft amendments by the public and experts to the Constitution of Ukraine as regards decentralization • Draft amendments to the Constitution of Ukraine as regards reform of the system of justicewere approved by the Con- of public power in the first reading stitutional Commission

What has not yet been achieved:

The plan has been scrupulously followed.

Ongoing high-priority actions to accelerate the reform:

• The President should submit to the Verkhovna Rada draft amendments to the Constitution of Ukraine as regards reform of the system of justice • The Verkhovna Rada should submit to the Constitutional Court draft amendments to the Constitution of Ukraine as regards reform of the system of justice • The Constitutional Court should issue its conclusion on compliance of the draft amendments to the Constitution of Ukraine with requirements of Articles 157 and 158 of the Constitution of Ukraine • The Verkhovna Rada should approve in the first reading the draft amendments to the Constitution of Ukraine as regards reform of the system of justice (no later than December 2015) and pass the Law on Amendments to the Constitution of Ukraine on the reform of the system of justice (no later than by March 2016) • The Verkhovna Rada should pass the Law on Amendments to the Constitution of Ukraine on decentralization (no later than by January 2016)

REFORM PROGRESS 55 CONSTITUTIONAL REFORM

56% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 (As to decentralization) Inclusive and transparent Preliminary approval dialog of all stakeholders Redistribution of GDP through a 100% of amendments to the 0% The level of trust to the 9% (civil society, authorities) central budget on the amendments to the Constitution on Justice. Parliament (TNS) Constitution is organized.

REFORM (As to human rights) (As to decentralization) Inclusive and transparent PERCEPTION Conclusion on amendments dialog of all stakeholders Democracy Index according to The to the Constitution from 100% 70% The level of trust to CMU 14% (civil society, authorities) Economist Intelligence Unit the Venice Commission has (TNS) on the amendments to the been received. 32,4% Constitution is conducted (As to human rights) Conclusion of the Venice Amendments to the 67,6% 75% Commission on the 0% The level of trust to the President Constitution are adopted. amendments to Constitution is received.

THE CITIZENS THINK THAT: NO CHANGES (As to justice) CHANGES EXIST Inclusive and transparent Obtaining a positive dialog of all stakeholders conclusion from the 90% 0% The level of trust to the CCU/SCU (civil society, authorities) Constitutional Court of on the amendments to the Ukraine Constitution is organized.

Developing and finalizing the draft at the level Survey conducted by the of the Constitutional TNS agency on a monthly The level of trust to local Commission. Conclusion of 70% 22% basis. authorities (TNS) the Venice Commission on amendments to Constitution Age of respondents: 18-55 is received. Question asked: How would you evaluate the reforms progress? The level of trust to political parties Blue segment: people, who answered that the changes really exist

Red color represents those who doesn’t see any changes

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Progress to date:

• Ukraine abandoned no-bloc policy and reverted to its Euro-Atlantic integration course. • New National Security Strategy of Ukraine and Military Doctrine were approved. The development of the new wording of the Law of Ukraine “On Fundamental Principles of the National Security of Ukraine” was started. This work is 70 percent complete. • The Security and Defense Sector Reform Concept was developed; the development of the Law “On Planning in Ukraine Defense and Security Sector” was started. The Main Situational Center of Ukraine was established; the development of a network of situational centers of the security and defense sector agencies of Ukraine was started. This work is 25 percent complete. • The new Military Doctrine was developed. The development of the new legislation and relevant program documents was start- The new Military Doctrine was developed. ed. This work is 20 percent complete. • The United Intelligence Committee under the President of Ukraine was established; the development of the new National Intelligence Program was started together with he development of the relevant programming documents. • The development of appropriate programming documents on paramilitary formations was started. • The mobilization preparations and mobilization system are being reviewed on the basis of the experience of the partial mobilization in 2014 to 2015. • The Special Operations Forces of the Armed Forces of Ukraine are being set up within the scope of the migration toward a new functional structure of the Armed Forces of Ukraine. This work is 20 percent complete. • The Decree of the President of Ukraine on the new military administrative division of the territory of Ukraine was drafted. This work is 85 percent complete (pending approval). • The development of the Maritime Doctrine was started. • The establishment of situational centers was started but not completed.

What has not yet been achieved:

• The institutional reform of the Ministry of Defense of Ukraine and the General Headquarters of the Armed Forces of Ukraine was not started. • The principles of the territorial defense of Ukraine calling for the active involvement of patriotic military forces are being reviewed too slowly.

Ongoing high-priority actions to accelerate the reform:

• Speed up the reform of the Armed Forces and improve their credibility.

REFORM PROGRESS 57 NATIONAL SECURITY AND DEFENCE REFORM

55% Progress in Tasks TASKS completion for 2015 The development of a Development and adoption Development and adoption Development and adoption separate procedure for Development and adoption of draft law «On civil of draft amendments to application of the Law of of draft amendments to the of the revised National 100% democratic control of 50% the Law of Ukraine «On 25% 0% Ukraine «On Government 50% Law of Ukraine «On State Security Strategy of Ukraine defence and security sector counter-intelligence cleansing» for employees protection» of Ukraine» activities» of intelligence agencies of Ukraine

Development and adoption REFORM Development and adoption Development and adoption Amendments to the Law of Ukraine Development and adoption of draft amendments to «On Government cleansing» to PERCEPTION of the revised Military of draft amendments to the 100% of the Information Security 50% the Law of Ukraine «On 0% 25% establish a separate mechanism 0% Doctrine of Ukraine (Ukraine Law of Ukraine «On state of action for power cleansing in Concept operational investigative counterintelligence agencies in Military Security Strategy) secret» activity» Ukraine 39,2% The adoption of the Cabinet Development and adoption Development and adoption Development and adoption Development and adoption of Ministers of Ukraine of draft amendments to of draft amendments to Resolution «On Approval of Security and Defence 50% of the Cyber Security 50% 0% 0% 100% 60,8% the Law «On Security the Law of Ukraine «On of the Action Plan for the Sector Concept of Ukraine Concept Service of Ukraine» diplomatic service» National Confidential mobile network of Ukraine»

THE CITIZENS THINK THAT: NO CHANGES Amendments to the Law Development and adoption The adoption of the Decree Development of public and CHANGES EXIST of Ukraine «On Defence of draft amendments to Development and adoption of the President of Ukraine state target programs of «On Approval of the Annual 50% of Ukraine» and «On 50% the Law of Ukraine «On 100% of the draft law «On safety 50% 100% components of the security National Program of Ukraine’s mobilization readiness and the Foreign Intelligence of critical information» and defence of Ukraine cooperation with NATO for mobilization» Service of Ukraine» 2015»

Adoption authority and Development and adoption Development and adoption Development and composition of Interagency of draft amendments to Development and adoption of the draft law «On adoption of the «National committee under the Survey conducted by the 25% 50% the Law of Ukraine «On 100% of the Military-Medical 50% 100% TNS agency on a monthly planning in defence and Intelligence Program» till Cabinet of the Ministers the State Border Service of Doctrine basis. security sector of Ukraine» 2020 of Ukraine on Defence Ukraine» Industrial Complex

Age of respondents: 18-55 Development and adoption Development and adoption The adoption of the Decree of Question asked: How would you evaluate the Development and adoption reforms progress? of the bill on amendments of draft amendments to the President of Ukraine «On of draft amendments to Development and adoption the decision of the National to the Law of Ukraine «On 10% 25% the Law of Ukraine «On 100% 50% 50% Blue segment: people, who answered that the Law of Ukraine «On of the Maritime Doctrine Security and Defence of Ukraine’s National Security the National Guard of the changes really exist intelligence activities» Ukraine «On Ukraine’s Strategic Principals» Ukraine» Defence Bulletin (revised)» Red color represents those who doesn’t see any changes

58 IN TIME RISK ZONE OUT OF TIMING SCORECARD THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 NATIONAL SECURITY AND DEFENCE REFORM

TASKS OUTCOMES PERCEPTION

The development of a Creation of an effective Development and adoption Development and adoption Development and adoption separate procedure for Preparation of the legal NSDC administration reform Military commissariat personnel reserve for Increasing the prestige of the Development and adoption of draft law «On civil of draft amendments to application of the Law of framework and practical in accordance with its number optimization . Military acquisition of managerial Setting the level of spending on 0% of draft amendments to the Optimization of the financial military profession in society of the revised National 100% democratic control of 50% the Law of Ukraine «On 25% 0% Ukraine «On Government 50% implementation of the NATO 100% responsibilities for strategic 100% commissariats personnel 80% positions in the Ministry of 100% activities system of the State defence and law enforcement 100% Law of Ukraine «On State Security Strategy of Ukraine defence and security sector counter-intelligence cleansing» for employees Trust Funds to promote planning and forecasting to upgrade by officers - Defence and the Armed Forces Concern «Ukroboronprom» to up to 5% of GDP each year protection» ensure national security of Ukraine» activities» of intelligence agencies of Ukraine’s defence combatants. of Ukraine, ensuring priority for ensure the return of most of the ATO participants funds from the sale of contracts 0% Public trust in the Armed Forces Ukraine 46% for the production or supply of of Ukraine Development and adoption The development and adoption of arms by the manufacturer to Development and adoption Development and adoption Amendments to the Law of Ukraine Development and adoption of draft amendments to «On Government cleansing» to a legal act to withdraw the State The network of situation of State Unified Register for ensure their efficient operation of the revised Military of draft amendments to the establish a separate mechanism Special Transportation Service from Organization of military Setting defence spending at 100% of the Information Security 50% the Law of Ukraine «On 0% 25% 0% 100% security and defence sector 90% mandatory military service 80% and development 100% of action for power cleansing in the jurisdiction of the Ministry of specialists’ preparation in least 3% of GDP annually The society estimates the reform Doctrine of Ukraine (Ukraine Law of Ukraine «On state Infrastructure and to include it to agencies established establishment Concept operational investigative counterintelligence agencies in training centres in amounts of national defence and security 0% Military Security Strategy) secret» Ukraine the Armed Forces of Ukraine activity» that meet the needs of military as successful units in combat trained Optimization of organizational 100% The adoption of the Cabinet structure and functions of personnel and ensure the Development and adoption Development and adoption of Ministers of Ukraine the Ministry of Defence and Increasing the allowance establishment of military- The privatization of non-core Development and adoption Development and adoption The adoption of the Law of the General Staff of the Creating a system of financial of draft amendments to of draft amendments to Resolution «On Approval by increasing military trained reserve resource. assets of the Ministry of of Security and Defence 50% of the Cyber Security 50% 0% 0% 100% Ukraine «On Amendments to 50% Armed Forces of Ukraine in 100% 50% Creating recruiting centres for 0% planning for the Armed Forces 100% the Law «On Security the Law of Ukraine «On of the Action Plan for the accordance with the provisions salaries and the salary for Defence and directing funds to Sector Concept of Ukraine Concept Laws of Ukraine «On Defence « volunteers with the horizon 3-5 years Service of Ukraine» diplomatic service» National Confidential mobile of the Defence Ministry and military rank the development fund the General Staff of the Armed network of Ukraine» Forces, eliminating duplication

Amendments to the Law Development and adoption The adoption of the Decree Adoption of the new military- Development of public and of the President of Ukraine administrative division of Development and adoption of of Ukraine «On Defence of draft amendments to Development and adoption The adoption of the new Law Armed Forces of Ukraine The numer of professional state target programs of «On Approval of the Annual Ukraine and a new plan of draft law «On public-private 50% of Ukraine» and «On 50% the Law of Ukraine «On 100% of the draft law «On safety 50% 100% of Ukraine «On legal regime of 100% intelligence service structural 100% Amendments to the Law of 50% 0% military officers is 5,6 for 0% components of the security National Program of Ukraine’s deployment of the Armed partnership in the field of mobilization readiness and the Foreign Intelligence of critical information» martial law» and technical support renewal Ukraine «On Military Duty 1000 of citizens and defence of Ukraine cooperation with NATO for and Military Service» and Forces of Ukraine and the national security and defence» mobilization» Service of Ukraine» 2015» Regulation «On territorial National Guard of Ukraine defence of Ukraine» to Adoption authority and accumulate human capacity of 100% Development and adoption The development of concept Creation of Special Operations On the basis of cantonments, In order to form an effective Discontinued military- Development and adoption Development and composition of Interagency the Armed Forces of Ukraine formation of a system of draft amendments to Development and adoption of the reform of military Forces, including: the system of territorial defence, technical cooperation with 100% of the draft law «On adoption of the «National committee under the by trained military personnel, of autonomous military 25% 50% the Law of Ukraine «On 100% of the Military-Medical 50% 100% education, including military Special Operations Forces liquidation of the Defence Russia who have gained experience bases with the necessary planning in defence and Intelligence Program» till Cabinet of the Ministers training departments of civilian 25% Command, the definition of 50% infrastructure for location of 50% Promotion Society of Ukraine the State Border Service of Doctrine in the tasks of antiterrorist security sector of Ukraine» 2020 of Ukraine on Defence institutions. Organization of their objectives, organizational military units and with the fund and the establishment on its Ukraine» operation Industrial Complex cooperation with NATO military structure, system support and of service housing and social material base of military- infrastructure for military patriotic organization - Established military cooperation with educational institutions. training 0% personnel and their families. Ukrainian military organization NATO Development and adoption Development and adoption The adoption of the Decree of Development and adoption that would become the basis of the bill on amendments of draft amendments to the President of Ukraine «On of draft amendments to Development and adoption the decision of the National Amendments to the Law of for the formation and training to the Law of Ukraine «On 10% 25% the Law of Ukraine «On 100% 50% 50% Ukraine’s non block status of forces for territorial defence. the Law of Ukraine «On of the Maritime Doctrine Security and Defence of Development of the concept Ukraine «On Personal Data abolishment and legal Protection» to ensure the Start a program for financing The adoption of the Law of Ukraine’s National Security the National Guard of Ukraine «On Ukraine’s Strategic of import substitution in the 25% 100% 0% 41% intelligence activities» confirmation of NATO integration of public electronic housing for military personnel Ukraine «On Ukrainian military The transition to NATO standards Principals» Ukraine» Defence Bulletin (revised)» military-industrial complex membership aspiration information resources, organization» databases and data banks

IN TIME RISK ZONE OUT OF TIMING SCORECARD 59 UKRAINE PROMOTION PROGRAM

What has been done to support exporters: associations and unions). al forums: “Open for U” – on investment and busi- Export Promotion Council was established at the • June 2015 – protocol with Kazakhstan • November 2015 – Verkhovna Rada of ness potential of Ukraine; Ministry of Economic Development and Trade. The was signed in the framework of its WTO Ukraine ratified the WTO Agreement on trade “Grow Ukraine” – on ag- Council includes representatives of both the MEDT accession. This provides better access for facilitation. It is an important step to improve ricultural potential; Re- business conditions in foreign econom- form video – on the prog- and Business (Ukrainian exporting companies, Ukrainian goods to Kazakhstan. Kazakhstan ic activity, support exporters and improve ress of reforms; Energy international companies, national industry lifted restrictions on a number of Ukrainian Ukraine’s place in world trade rankings. & Energy Efficiency – on dairy producers (work is continuing concern- reforms in the sector. associations and unions). ing others). What has been done in the area of trade • “Open for U” brochures • July 2015 – completed negotiations on a merce Penny Pritzker and representatives protection: and leaflets were developed and translated Free Trade Agreement between Canada and into French, German, Chinese and Russian of the American business community came Ukraine. Currently conducting preparation to Ukraine. During a roundtable with mem- Represented Ukrainian interests during glob- and transferred to Ukrainian embassies. for signing and subsequent ratification of the • bers of the government further areas of trade al trade investigations on the markets of dif- • A brochure on the Free Trade Agreement be- agreement to open this major international and investment cooperation were identified ferent countries: USA, Mexico, Egypt, the EU, tween Canada and Ukraine: “New horizons market. Tangible perspective is substantial and the implementation status of economic Pakistan, India, Turkey, the Eurasian Union. for Ukrainian business” was prepared. liberalization of access to Canadian market reforms were discussed. All these issues are • Opened access to EU markets on preferen- • Export Promotion Project Office created un- and increase of exports of Ukrainian prod- der the Ministry of Economic Development a continuation of the work that began in July ucts. tial conditions for certain Ukrainian products 2015 at the US-Ukrainian business forum. which had been subject to trade restrictions. and Trade of Ukraine. • July 2015 – restored the US Generalized • On October 27 the eighth joint meeting of Worked at the World Trade Organization on • On October 9 in Astana, during the visit of System of Preferences (GSP) for Ukraine. • the Ukrainian-Italian Council on econom- protection of national interests and to create President Poroshenko to the Republic of This is an opportunity for free entry to the ic, industrial and financial cooperation was a positive image of Ukraine as a reliable trade Kazakhstan, a “Ukraine-Kazakhstan” busi- United States of more than 3,500 Ukrainian held. Following the meeting a Memorandum partner. ness forum was held and attended by about products. 300 businesspeople, including more than 50 of mutual understanding between the Minis- • September 2015 – US authorities returned try of Economic Development and Trade of On October 21, 2015 Ukraine filed a first re- Ukrainian companies. another three Ukrainian export products un- • On October 16 a meeting of the Work- Ukraine and the Ministry of Economic Devel- quest to the WTO for conducting consulta- der the scope of the GSP. ing Group on exports to Belarus within the opment of the Republic of Italy concerning • October 2015 – national export strategy and tions with the Russian Federation on fair framework of the Export Promotion Council cooperation on SMEs was signed. access of railroad at MEDT was conducted. The purpose was to • On October 30 a joint meeting of the High equipment (wag- work out a common position on negotiations Level Working Group on bilateral trade with Verkhovna Rada of Ukraine ratified the WTO Agreement ons and rolling with the Republic of Belarus. Following the Belarus was held. During the meeting a on trade facilitation. stock, switches meeting MEDT actively engaged on the issue range of issues holding back mutual trade, and other compo- of additional import duty, individual licens- including additional import duty regime, and individual licensing regime was discussed nents) originating ing regime and other important issues for action plan for its implementation from 2016- and the next steps for solving these issues from Ukraine. Ukrainian exporters. 2020 being developed on the initiative of the • On October 22 a Ukrainian delegation partic- were outlined. Ministry of Economic Development and Trade Ukraine took part in reviewing processes of ipated in the Ukrainian-German business fo- of Ukraine. The aim is to highlight the situ- • international trade disputes as a third party rum, the biggest ever bilateral event. During What has been done in communications ation, challenges, prospective markets and in 11 cases. the forum, an Agreement was signed between sector: basic steps to create favorable conditions for Ukraine began to diversify its exports, reject- the Government of Ukraine and the Govern- Ukrainian exporters. The Export Promotion • ing dependence on a single trading partner ment of the Federal Republic of Germany on • Unified calendar prepared. The calendar in- Council at the Ministry of Economic Devel- (the Russian Federation). the establishment of a German-Ukrainian cludes over 400 political, security, economic, opment and Trade was established. Its first chamber of commerce to facilitate the devel- business and cultural events where Ukraine’s meeting was conducted on October 15. The What has been done in bilateral trade and opment of business relations, and find new voice should be heard. Communication strat- Council includes representatives of both the ways to promote Ukrainian goods across egies and a visual plan for speakers were economic cooperation: MEDT and business (Ukrainian exporters, Europe. developed. Ukraine’s most capable global international companies, national industry • On October 26 the US Secretary of Com- opinion leaders are being involved, including • Prepared promotional videos for internation-

60 PROGRAM PROGRESS UKRAINE PROMOTION PROGRAM

politicians, journalists, civic activists, and the diaspora. German, Spanish, and Italian based on a database of more than 8000 contacts, including media • The embedded journalism program was introduced on May 12 to facilitate international media and thought leaders in the world, continued. access to the ATO zone. • English-language weekly e-mail bulletins on the progress of reforms in Ukraine were created • International public opinion poll as to the perception of Ukraine’s role in Europe was conducted and disseminated by the Ukrainian Reform Media Support Center. in key countries. • Within the scope of the “Public Communication Reform” project, advisers on strategic com- • Long-term residence of international journalists in Ukraine (over 90 days) and simplifying the munications were appointed, including international advisers, to key state agencies from the procedure of getting visas for international journalists were enabled. Presidential Administration to the military, economic, infrastructural, energy, and some social • A photo exhibition “50 Inventions Bestowed by Ukraine to the World” went on display. Brochures agencies of the government. were prepared and distributed during business forums with senior state officials. • Media trainings and public communication training courses have been held for a number of • The UATV channel promoting Ukraine for the international audience was launched on October 1, high-level officials representing Ukraine internationally. 2015. The broadcast frequencies were received by UTR and BTB TV channels. • Centralized support is provided to high-level officials with international media contacts during • UN Hundred Crimea Challenge brochures were prepared and disseminated within the scope of their international visits (development of op-eds, presentations, theses of speeches and media the UNGA. meetings). • Country of Dignity brochures in English were developed (USA + France, and UNESCO). • Press tours for meetings with high-level officials from Austria and France to Ukraine were orga- • Materials in English on military subjects were prepared. 2 films were dubbed in English (Airport nized and supported. and Raid); exhibitions “Presence” (evidence of Russian aggression in Ukraine) and the “Power of • An exhibition “Famous Ukrainians” has been on display in Boryspil Airport to familiarize tourists Unsubdued” (Progress to date of the Ukrainian Army) were organized; the English version of the with Ukraine’s cultural heritage. www.ukraineunderattack.org website was developed. • An international campaign “MH17. Ukraine Remembers” was organized on social media on the • Work on the dissemination of news and information digests from Ukraine in English, French, anniversary of the MH17 tragedy.

Europe CIS M $ 7 282,3 M $ 4 524,2

% - 32,5% 33,6% 20,9% - 53,5

Asia America $ 7 163,2 M $ 455,0 M 2,1% 33,0% - 19,2% - 52,6%

Africa Australia and Oceania $ 2 194,0 M $ 8,7 M

- 23,9% 10,1% 0,04% - 25,0%

Export dynamics of goods in the continental context (7 months of 2015)

PROGRAM PROGRESS 61 UKRAINE PROMOTION PROGRAM

65% Progress in Tasks TASKS OUTCOMES PERCEPTION completion for 2015 Long-term residence of Provisions and Departments Program has received the highest international journalists in Voting for resolutions on Implementation Plan of the Ukraine is enabled (over 90 of international assessment on the flow of reforms 75% 100% 20% Ukraine in UNGA, UNSC, the 50% Ukraine Promotion Program days) and simplifying of the communications in CEA and governmental actions in different European Parliament, PACE have been developed procedure of getting visas for have been created areas - 4.0 of 10.0 international journalists

Series of conferences REFORM Draft State Target Ukraine Program of embedment Promotion Program has been about Ukraine have been providing foreign journalists Number of foreign tourists PERCEPTION developed and the country’s 60% 100% conducted abroad without 100% 0% Country Brand Index an accesses to ATO area in Ukraine had increased brand for 2016-2018 has been implication of governmental has been implemented created funding 49,9% Internship program for Example of support of the Society assesses the increase of Creation of the united self- foreigners in Ukrainian presentation of Ukrainian films 20% 60% positive image of the country as regulative organization for state authorities has been with wide scale presentations Net FDI inflows for the successful 50,1% support of foreign investors introduced on international platforms period 2015-2020 , with the delegation 40% according to World Bank 0% of particular state High-quality Ukrainian Series of photo exhibitions data would reach over 40 Research about international public functions (on the basis of English-speaking tele- about Ukraine have been billion US dollars perception of Ukraine had been 100% 80% THE CITIZENS THINK THAT: InvestUkraine) product UA|TV has been conducted on international conducted (USA, Canada, Australia, NO CHANGES created platforms Great Britain, Germany and other) CHANGES EXIST

Preconditions for the International sociological According to the results of a Promotion of the creation implementation of research in the crucial countries Doubled exports of nationwide survey, 90% Ukraine 75% of Pan European Russian 5% of focus on the perception of 100% 0% promotion projects have domestic products by 2019 citizens would feel pride for their Speaking Channel the European perspective for been prepared. Ukraine had been held state

Kyiv International school Increased Ukraine’s International sociological survey Survey conducted by the in crucial countries of focus TNS agency on a monthly Educational trainings for for young leaders under the presence in prominent demonstrates the knowledge of the basis. the representatives of patronage of the President 60% international conferences 80% economic missions of with national stand capital and major cities of Ukraine, of Ukraine have been that unites national Ukraine abroad have been the names of prominent figures of launched manufacturers culture, arts, sports Age of respondents: 18-55 conducted for improvement 50% Question asked: How would you evaluate the of professional skill reforms progress? Ukraine’s presence in accompanied by foreign Advisors on international prominent international Blue segment: people, who answered that investors and support of communications in CEA 50% 80% the changes really exist conferences with the report national exporters have been appointed had been increased Red color represents those who doesn’t see any changes

62 IN TIME RISK ZONE OUT OF TIMING SCORECARD THE REVIEW OF THE MONITORING FRAMEWORK METHODOLOGY ON PAGES 64-66 APPENDIX UKRAINE HAS A BROAD REFORM AGENDA AND THE NECESSARY TOOLS TO EFFECTIVELY DRIVE CHANGE

5 STRATEGIC DOCUMENTS 18 KEY REFORMS REFORMS GOVERNANCE & COORDINATION

EU-Ukraine Association Anticorruption President 1 Agenda Judiciary of Ukraine Chairperson of Cabinet of Ministers the Parliament, Decentralization of Ukraine chairpersons of the Public Administration committees Deregulation 2 Strategy 2020 National Reforms Law Enforcement Council National Security & Defence Representatives National Bank of of civil society Ukraine, NSDC, Public Health other bodies Taxation 3 Coalition Agreement Energy Promotion Of Ukraine REFORMS MONITORING FRAMEWORK

Agriculture ПРОГРАМА ПРОСУВАННЯ ІНТЕРЕСІВ УКРАЇНИ В СВІТІ ПРОГРАМА ПРОСУВАННЯ ІНТЕРЕСІВ УКРАЇНИ В СВІТІ 65% Прогрес ЗАВДАННЯ РЕЗУЛЬТАТИ СПРИЙНЯТТЯ виконання задач на 2015 рік ПРОГРАМА ПРОСУВАННЯ ІНТЕРЕСІВ УКРАЇНИ В СВІТІ Уможливлено довгострокове 65% Отримана найвища оцінка програ- Розроблено Положення та перебування міжнародних Прогрес ЗАВДАННЯ РЕЗУЛЬТАТИ СПРИЙНЯТТЯ Education Створеновиконання відділи задач з Голосування за резолюції ми просування інтересів України у План реалізації Програми журналістів в Україні (понад 75% 100% міжнароднихна 2015 комунікацій рік 20% щодо України в ГА ООН, 50% світі в контексті перебігу реформ просування інтересів 90 днів) та спрощення отри- у ЦОВВ РБ ООН, ЄП, ПАСЕ та дій влади у різних сферах - 4,0 України в світі мання віз для міжнародних Уможливлено довгострокове Отримана найвища оцінка програ- Розроблено Положення та перебування міжнародних 65% Ukraine-IMF Memorandum журналістів з 10,0 Створено відділи з Голосування за резолюціїЗАВДАННЯ ми просування інтересів України у РЕЗУЛЬТАТИ СПРИЙНЯТТЯ План реалізації Програми журналістів в Україні (понад Прогрес 4 75% 100% міжнародних комунікаційвиконання 20% задач щодо України в ГА ООН, 50% світі в контексті перебігу реформ просування інтересів 90 днів) та спрощення отри- на 2015 рік СПРИЙНЯТТЯ Розроблено Проект Державної Впроваджено програму Проведено серію кон- мання віз для міжнародних у ЦОВВ РБ ООН, ЄП, ПАСЕ та дій влади у різних сферах - 4,0 цільової програми просування КількістьУкраїни в іноземнихсвіті Уможливлено довгострокове Отримана найвища оцінка програ- embedment для доступу ференцій про Україну за журналістівВключення України в Country Brand Розроблено Положення таз 10,0 РЕФОРМИ інтересів України за кордоном 60% 100% 100% туристів в Україні зросла 60% перебування міжнародних Створено відділи з Голосування за резолюції ми просування інтересів України у іноземних журналістів в кордоном без залучення Index План реалізації Програми журналістів в Україні (понад та створення бренду країни на 75% 100% міжнародних комунікацій 20% щодо України в ГА ООН, 50% світі в контексті перебігу реформ доРозроблено 30 млн Проекту 2020 Державної році просування інтересів 90 днів) та спрощення отри- State Owned Enterprises 2016-2018 рр. зону АТО СПРИЙНЯТТЯдержавного фінансування Впроваджено програму Проведено серію кон- у ЦОВВ РБ ООН, ЄП, ПАСЕ та дій влади у різних сферах - 4,0 цільової програми просування Кількість іноземних мання віз для міжнародних embedment для доступу ференцій про Україну за України в світі Включення України в Country Brand 49,9% РЕФОРМИ інтересів України за кордоном 60% 100% 100% туристів в Україні зросла 60% журналістів з 10,0 Запроваджено програму іноземних журналістів в кордоном без залучення Index Створення єдиної Приклад супроводження пре- та створення бренду країни на Суспільство оцінює зростання до 30 млн у 2020 році стажувань для іноземців зентації українських фільмів 2016-2018 рр. зону АТО державного фінансування національної саморе- 20% 60% Чисті надходження пря- позитивного іміджу країни як СПРИЙНЯТТЯ Розроблено Проект Державної Впроваджено програму Проведено серію кон- в українських органах масштабними презентаціями цільової програми просування Кількість іноземних гулівної організації для 49,9% мих іноземних інвестицій успішне embedment для доступу ференцій про Україну за Включення України в Country Brand 50,1% державної влади на світових майданчиках Запроваджено програму РЕФОРМИ інтересів України за кордоном 60% 100% 100% туристів в Україні зросла 60% супроводження іноземних заСтворення період 2015-2020 єдиної років Приклад супроводження пре- Суспільство оцінюєіноземних зростання журналістів в кордоном без залучення Index 40% 31% стажувань для іноземців зентації українських фільмів та створення бренду країни на до 30 млн у 2020 році інвесторів із делегуван- занаціональної даними Світового саморе- 20% 60% Чисті надходження пря- позитивного іміджузону АТОкраїни як державного фінансування Проведено серію фото- в українськихПроведено дослідженняорганах сприйнят- масштабними презентаціями 2016-2018 рр. ням окремих функцій Створено якісний банкугулівної складуть організації понад для 40 мих іноземних інвестицій успішне виставок50,1% про Україну на державноїтя України влади громадськістю в країнах на світових майданчиках 49,9% Financial Sector ГРОМАДЯНИ ВВАЖАЮТЬ ЩО: держави (на основі український англомовний 100% 80% млрдсупроводження доларів США іноземних за період 2015-2020 років міжнародних майдан- світу (США, Канада, Австралія, Запроваджено програму Приклад супроводження пре- InvestUkraine) телепродукт UA|TV 40% Створення єдиної31% Суспільство оцінює зростання ЗМІН НЕМА чиках інвесторів із делегуван- Велика Британія, Німеччина та ін.) за даними Світового стажувань для іноземців зентації українських фільмів ЗМІНИ Є Проведено серію фото- національної саморе- Проведено дослідження сприйнят- 20% 60% Чисті надходження пря- позитивного іміджу країни як ням окремих функцій Створено якісний банку складуть понад 40 в українських органах масштабними презентаціями виставок про Україну на гулівної організації для тя України громадськістю в країнах мих іноземних інвестицій успішне Проведено міжнародне держави (на основі український англомовний 100% 80% млрд доларів США державної влади на світових майданчиках ГРОМАДЯНИ ВВАЖАЮТЬ ЩО: Збільшено удвічі обсяги За результатами загальнонац. міжнародних майдан50,1%- супроводження іноземнихсвіту (США, Канада, Австралія, за період 2015-2020 років Підготовлені передумови Просування створення Pan соціологічнеЗМІН НЕМА дослідження InvestUkraine) телепродукт UA|TV 40% 31% експорту товарів вітчиз- опитування 90% громадян чиках інвесторів із делегуван- Велика Британія, Німеччина та ін.) за даними Світового для реалізації проектів 75% European Russian Speaking 5% в ЗМІНИключових Є фокус-країнах 100% 0% Проведено серію фото- Проведено дослідження сприйнят- Опитування проводиться щодо сприйняття європейської няного виробництва до відчуватимуть гордість за свою ням окремих функцій Створено якісний банку складуть понад 40 просування Channel виставок про Україну на тя України громадськістю в країнах дослідницькою компанією перспективи для України 2019 року державу Проведено міжнародне Збільшено удвічі обсягидержави (на основі За результатамиукраїнський загальнонац. англомовний 100% 80% млрд доларів США TNS на замовлення Підготовлені передумови Просування створення Pan соціологічне дослідженняГРОМАДЯНИ ВВАЖАЮТЬ ЩО: міжнародних майдан- світу (США, Канада, Австралія, Проектного офісу експорту товарів вітчизInvestUkraine)- опитування 90%телепродукт громадян UA|TV для реалізації проектів 75% European Russian Speaking 5% в ключових фокус-країнахЗМІН НЕМА100% 0% чиках Велика Британія, Німеччина та ін.) Constitutional Національної ради реформ. ЗбільшенаОпитування присутність проводиться Міжнародне соціологічне дослі- ЗМІНИ Є няного виробництва до відчуватимуть гордість за свою Міжнародна школа для щодо сприйняття європейської Проведено навчальні тре- просування Channelдження в ключових фокус-кра- Щомісяця проводиться опитування 1000 молодих лідерів у Києві Українидослідницькою на провідних компанією перспективи для України 2019 року державу нінги для представників міжнароднихTNS на замовленнявиставках їнах показує знання столиці та Проведено міжнародне Збільшено удвічі обсяги За результатами загальнонац. респондентів з усіх регіонів і різних типів 50% під патронатом Президен- 60% 80% Підготовлені передумови Просування створення Pan населених пунктів у віці 18-55 років. економічних місій України національнимПроектного стендом, офісу найбільших міст України, прізвищ соціологічне дослідження Національної ради реформ. Міжнародне соціологічне дослі- експорту товарів вітчиз- опитування 90% громадян та України розпочала свою що об’єднує національних Міжнароднавидатних діячівшкола культури, для мисте- Збільшена присутність для реалізації проектів 75% European Russian Speaking 5% в ключових фокус-країнах 100% 0% Серед інших, ставиться питання: На за кордоном Проведено навчальні тре- Опитування проводиться дження в ключових фокус-кра- щодо сприйняття європейської няного виробництва до відчуватимуть гордість за свою роботу Щомісяцявиробників проводиться опитування 1000 молодихцтва, спорту лідерів у Києві України на провідних просування Channel Ваш погляд, в якій мірі відбувається нінги для представників міжнародних виставках дослідницькою компанією їнах показує знання столиці та перспективи для України 2019 року державу реформування в наступних сферах? респондентів з усіх регіонів і різних типів 50% під патронатом Президен- 60% TNS на80% замовлення населених пунктів у віці 18-55 років. економічних місій України національним стендом, Проектного офісу найбільших міст України, прізвищ Червоний колір – позначає респондентів, Збільшена присутність та України розпочала свою що об’єднує національних Призначено радників з Серед інших, ставиться питання: На за кордоном Національної ради реформ. видатних діячівМіжнародна культури, мисте школа- для Збільшена присутність Міжнародне соціологічне дослі- які вважають, що МАЙЖЕ НЕМАЄ або України на провідних роботу виробників Проведено навчальні тре-цтва, спорту дження в ключових фокус-кра- ЗОВСІМ НЕМАЄ змін в реформованій сфері. міжнародних комунікацій 30%Ваш погляд, в якій мірі відбувається 80% Щомісяця проводиться опитування 1000 молодих лідерів у Києві України на провідних Election reform реформуванняміжнар. в наступних конференціях сферах? з респондентів з усіх регіонів і різних типів нінги для представників міжнародних виставках їнах показує знання столиці та у ЦОВВ 50% під патронатом Президен- 60% 80% Синій колір – позначає респондентів, які доповіддю 2015-2017 Збільшена населенихприсутність пунктів у віці 18-55 років. економічних місій України національним стендом, найбільших міст України, прізвищ Червоний колір – позначає респондентів, Призначено радників з та України розпочала свою що об’єднує національних відповіли, що Є АКТИВНІ зміни або Є зміни, які вважають, що МАЙЖЕ НЕМАЄ або України на провідних за кордоном видатних діячів культури, мисте- 2015 Government Program Plan хоч і повільні. Серед інших, ставиться питання: На роботу виробників міжнародних комунікацій 30% 80% ЗОВСІМ НЕМАЄ змін в реформованій сфері. міжнар. конференціяхВаш погляд, вз якій мірі відбувається цтва, спорту 5 у ЦОВВ реформування в наступних сферах? Синій колір – позначає респондентів, які доповіддю 2015-2017 62 В ГРАФІКУ В ЗОНІ РИЗИКУ ЗНАЧНО ВІДСТАЄ ВІД ГРАФІКУ КАРТА ПОКАЗНИКІВ / SCORECARD ОПИС МЕТОДОЛОГІЇ ОЦІНКИ НА СТОРІНКАХ 64-66 Збільшена присутність відповіли, що Є АКТИВНІ зміни або Є зміни, Червоний колір – позначає респондентів, Призначено радників з хоч і повільні. які вважають, що МАЙЖЕ НЕМАЄ або України на провідних міжнародних комунікацій 30% 80% ЗОВСІМ НЕМАЄ змін в реформованій сфері. міжнар. конференціях з у ЦОВВ 62 В ГРАФІКУ В ЗОНІ РИЗИКУ ЗНАЧНО ВІДСТАЄ ВІД ГРАФІКУ КАРТА ПОКАЗНИКІВ / SCORECARDСиній колір – позначає респондентів, які ОПИС МЕТОДОЛОГІЇ ОЦІНКИ НА СТОРІНКАХ 64-66 доповіддю 2015-2017 Public Procurement відповіли, що Є АКТИВНІ зміни або Є зміни, хоч і повільні.

62 В ГРАФІКУ В ЗОНІ РИЗИКУ ЗНАЧНО ВІДСТАЄ ВІД ГРАФІКУ КАРТА ПОКАЗНИКІВ / SCORECARD ОПИС МЕТОДОЛОГІЇ ОЦІНКИ НА СТОРІНКАХ 64-66

The purpose of Reforms Monitoring Framework is to identify barriers to progress. This is IMF Memorandum and 2015 Government Plan. Commitments undertaken by the President/ done through the 18 scorecards specifically developed for each of the priority reforms. Five Parliament/Government under these documents are both comprehensive and legally binding. strategic documents form the content backbone for the scorecards. These documents are These commitments were used by Reforms Task Forces to prepare the scorecards. the EU-Ukraine Association Agenda, Strategic Vision 2020, Coalition Agreement, Ukraine-

64 REFORMS MONITORING FRAMEWORK METHODOLOGY

This group measures the availability and quality of planning tools. Its purpose is to A reform scorecard ensure that the work is performed according to the plan while the real results are represents not yet accessible. The indicators are determined on a quarterly basis in accordance a set of TASKS with the schedule for the quarter and measured on a monthly basis. Those indicators 20-30 indicators, ensures that work plans have not only been fulfilled formally, but were embodied divided into 4 groups in specific management decisions. Process indicators are determined once at the beginning of the year and are measured on a quarterly basis. Example: Deregulation to ensure complex reform. The number of canceled regulations; the number of liquidated regulatory evaluation. bodies among those subject to liquidation, etc.

This group consist of impact indicators, allow monitors to understand how Ukraine has changed as the result of particular reforms. Object indicators are determined once at the beginning of the reform and are measured annually. Example: Changes OUTCOMES in the position of Ukraine in global rankings such as Ease of Doing Business, the Global Competitiveness Index, etc.

The purpose of these indicators is to understand how society perceives the success of the reforms. Perception indicators are determined once at the beginning of the reform’s implementation and are measured on a quarterly basis (through PERCEPTION sociological surveys) or monthly (through expert interviews). Example: Evaluation obtained in the course of sociological research on a representative sample of citizens (eg, public confidence in the militia, the courts, the army; national pride of the country, etc.).

65 NATIONAL REFORMS GOVERNANCE MODEL

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У цій публікації висловлено виключно погляди авторів . Вони не обов’язково The views herein expressed are solely those of the author and contributors and do not відображають офіційну позицію Координатора проектів ОБСЄ в Україні. necessarily reflect the official position of the OSCE Project Co-ordinator in Ukraine.