Reforms in Ukraine 2016-2019: Irreversibility of Changes Table of Contents

Reforms in Ukraine 2016-2019: Irreversibility of Changes Table of contents

Reforms in Ukraine 2016-2019: Irreversibility of Changes 04 Medium-term Government priority action plan to 2020 is a roadmap for reforms and changes

08 Strategic goals and progress. Key achievements 14 Economic growth 30 Eff ective governance 42 Human capital development 56 Rule of law and ﬁ ght against corruption 62 Security and defense

70 Progress in european and euro atlantic integration

80 Donors support coordination

84 Ukraine Now brand

86 Ukraine Reform Conferences

90 Reforms architecture

94 Abbreviations 04

MEDIUM-TERM GOVERNMENT PRIORITY ACTION PLAN TO 2020 IS A ROADMAP FOR REFORMS AND CHANGES

international partners. The Plan has become the ﬁ rst medium-term strategic plan of the Government in Ukraine. The Medium-Term Government Priority Action Plan deﬁ ned the main objectives for the Government’s activity for 2017–2020 and formed the basis for budget planning, the Government’s annual operational planning, strategic planning at the ministerial level, donor assistance targeting and various other Medium-Term activities.

Government Priority The introduction of the medium-term Budget Declaration as a strategic document of the Government aims Action Plan to to combine the strategic priorities of the state with the capabilities of 2020 is a Roadmap the state budget. This approach will allow directing limited budget funds for priority reforms in the respective for Reforms spheres of activity of central executive and Changes bodies. Implementation of the Medium-Term Government Priority Action Plan to 2020 accelerates overall reform ABOUT THE PLAN progress, enhances the capacity of responsible executive bodies, Ukraine continues a steady pace of implementation synchronizes and coordinates of deep structural reforms and by mid-2019, this Government reform activities. In Reforms in Ukraine activity has produced positive economic and social its annual priority action plans, the 2016-2019: results. Early 2017 saw the Medium-Term Government Government sets out speciﬁ c actions, Irreversibility of Changes Priority Action Plan to 2020, a document discussed those responsible, deadlines and among a wide range of experts, with public and performance indicators in more details. The principal framework used in drafting the Medium-Term STRATEGIC GOALS AND KEY ACTIONS Government Priority Action Plan to 2020 and Annual Priority Action Plans for 2017–2019 includes:

 Systemic approach (i.e. choosing priorities with greatest impact on the country’s socio-economic development, drivers Economic Growth Eff ective Governance for change across other spheres of activity). Maintaining macroeconomic stability, agriculture Public administration  Feasibility (i.e. setting viable objectives). sector reform, privatization, deregulation, energy reform, public ﬁ nance  Achievability (i.e. clearly framed implementation phases and reform, tax and customs reform, increasing exports management reform, resources). and attracting investment. decentralization,  Simple and transparent evaluation of achievements (against e-governance. clearly deﬁ ned measurement criteria).  Coordinated development (through inter-related reforms in progress and strategic policy documents).

The Government is focusing on improving citizen’s lives and achieving the following ﬁ ve strategic objectives: Human Capital Anti-corruption Defense and Security Development and Rule of Law Protection of sovereignty 1. Economic growth. Development of people Eff ective anti-corruption and territorial integrity, 2. Eff ective governance. through better education, policies and institutions, securing a safe 3. Human capital development. healthcare, social security protection of property environment for citizens. 4. Rule of law and ﬁ ght against corruption. and culture. rights, equal access to 5. Security and defense. justice.

PURPOSES OF THE MEDIUM-TERM ACTION PLAN: IMPLEMENTATION

Identiﬁ cation and adoption of key objectives and priorities for the  Execution through annual Action Plans of the Government. Government for 2017–2020  Action Plan for 2019 includes 558 detailed actions (583 in 2018).  Policy coherence.  Daily monitoring of the Plan is performed online by the Secretariat of the  Strategic view. Cabinet of Ministers of Ukraine and the Reforms Delivery Offi ce.  Long-term planning.

Foundation for medium-term budgeting and planning of ministries’ activities  Medium-term Budget Declaration.  Annual budgets.  Evaluation of the eff ectiveness of budget programs.  Cost review results.

Coordination of resources and donor support  Priorities.  Assistance.  Commitments. 06

MEDIUM-TERM GOVERNMENT PRIORITY ACTION PLAN TO 2020 IS A ROADMAP FOR REFORMS AND CHANGES Expected results of this approach

 Ensuring the allocation of resources in accordance with the identifi ed state priorities.  Strengthening budgetary discipline through the introduction of expenditure ceilings and lending.  Strengthening of control over fi scal risks and implementation of MEDIUM-TERM BUDGET PLANNING measures for their minimization.  Increasing the role and responsibility In December 2018, the Parliament adopted of the main spending units in comprehensive amendments to the Budget Code determining the priorities of their of Ukraine and some other legislative acts on the activities and the eff ective use of implementation of medium-term budget planning, such funds to achieve them. which will allow to implement systemic reforms  Conducting cost-eff ectiveness and increase the level of responsibility of budget analysis and changing approaches to spending units for their effi ciency. their implementation by moving from maintenance of institutions to quality Instead of one-year Budget Policy Guidelines, a public service delivery. three-year Budget Declaration was introduced as a  Budget policy consistency. medium-term budgetary planning document. A new  Increase of trust from the society medium-term budget planning tool at the local level and potential investors. is a three-year local budget forecast. The new legislation also implements new budget rules. For instance, the The starting point for the development of the Budget public debt and the Government- Declaration are the forecasting and program docu- backed debt can’t exceed 60% of GDP, ments of economic and social development, including the state budget defi cit shall not exceed sectoral strategies and medium-term plans for the 3% of the GDP. Government fi nancial activity of the main spending units. guarantees shall not exceed 3% of the revenues of the general fund of Budgetary policy frameworks and state budget the state budget. The maximum state Reforms in Ukraine indicators for the medium term, defi ned by the budget defi cit in the law on the state 2016-2019: Budget Declaration, are the basis for drafting the budget for the respective year shall Irreversibility of Changes State Budget of Ukraine and medium-term forecasts not exceed the defi cit stipulated in the of local budgets. budget declaration. ALIGNMENT OF BUDGET PLANNING DESPITE TREMENDOUS CHALLENGES, STABILIZATION WAS REACHED AND THE MEDIUM-TERM PRIORITY AND ECONOMIC GROWTH BEGAN ACTION PLAN

Macroeconomic 2014-2015 2016 2017 2018-2019 Forecast  Lack of a clear vision  Macroeconomic  Macroeconomic  Focus on sustainable for changes needed stabilization reached. growth. economic growth. and desired results.  Initial implementation  Institutional weakness. of structural changes. Reforms  Fierce resistance from  Increase in quality the ‘old system’. of life.  Russian aggression.

Budget

FOCUS ON ECONOMIC GROWTH

From 2014–2016, Ukraine navigated the challenging road of macroeconomic stabilization and transformation. During these years, the country also developed a clear vision for change and deliverables, and grew in institutional strength to execute on its vision. 2014 2015 2016 2017 2018-2019

From 2016 to 2018, real GDP of Ukraine gained GDP GDP GDP GDP GDP an aggregate increase of 8.4%, showing that Ukraine has entered a phase of economic growth. -6.6%* -9.8% 2.4% 2.5% 3.3% (circa 2.8%***) According to the Cabinet of Ministers, the estimated forecast of economic growth for 2020 is up to CPI CPI CPI CPI CPI +3.6% and Ukraine has a good chance of achieving 24.9%* 43.3% 12.4% 13.7% 9.8% (7.4%**) + 3% GDP growth in 2019 as expected by the Government; this growth is the key goal of the Government and the major economic target for the coming years. The main drivers of economic growth * Change for a year will be the revival of Ukraine’s industrial sector and ** As of year-end development of innovative industries. *** Expected for 2019 Strategic goals. Key achievements

Reforms in Ukraine 2016-2019: Irreversibility of Changes Economic growth

Business Climate Improvement Privatization and State-Owned Enterprises  Targeted Government eff orts resulted in Reform Dynamic, sustainable and inclusive growth based +12 positions increase for Ukraine in Doing  “Small” privatization was successfully on structural modernization of the economy, Business Ranking. launched, the state was able to successfully improvement of business conditions and public  The electronic procurement system in sell assets at transparent electronic auctions sector effi ciency is of paramount importance Ukraine “ProZorro” was recognized as the for more than UAH 1 bn. for the future of Ukraine. For the last three years best practice in the whole world. Ukraine demonstrated visible progress in creation  In 2018, Ukraine ranked 83rd out of 140 of better conditions for investing and doing countries in the Global Competitiveness business in the country, as well as in the effi cient Report. utilization of limited resources.  In 2019, Ukraine ranks 47th among 129 economies in The Global Innovation Index Tax and Customs Reform (GII).  SFS reform initiated by dividing into The State Tax Service and the State Customs Service.  Introduction of automatic and transparent VAT refunds.  Introduction of a “single window” approach Infrastructure Reform at the customs.  Ukrainian air transport market has been  Introduction of a Single Treasury Account growing +25–30% annually for the past for prepayment of customs payments. three years. Passenger ﬂ ow of Ukrainian airports exceeded 20 mln people in 2018.  From 2016 to 2018, 5,444.6 km of public and local public roads were repaired. In 2018, UAH 23.8 billion has been earmarked for repair of 2,339.4 km of public and local Agriculture Sector Reform highways.  State support of agricultural producers amounts at least 1% of the total annual agricultural output in Ukraine.

Energy Sector Reform  Four years as Ukraine doesn’t purchase natural gas from the Russian Federation, while importing fuel from the EU countries in reverse.  Gas market was introduced. Electricity market is starting on July 1, 2019. 10

STRATEGIC GOALS AND PROGRESS. KEY ACHIEVEMENTS Public Administration Reform  Comprehensive Government strategic planning architecture established with 3-years budget planning, strategic directorates in ministries and online monitoring system.  Openness of civil service increased with the modern online vacancies portal – career.gov.ua – with 30,000 candidates applied resulting in an average 25 candidates per vacancy. The Government has become a more competitive employer attracting best talents to work in ministries.

Eff ective E-Governance governance  The quality of public services increased with around 120 e-services for citizens and businesses introduced and 778 Centers for Administrative Services operating across all regions of Ukraine. Eff ective governance is a crucial  Ukraine ranks the second by rate of opening public prerequisite for the successful data, as per Open Data Barometer Report, with competitive State, working in the 11,000 open data sets available on data.gov.ua portal. interests of citizens and securing their welfare and safety. With strong intention and commitment to reset and revamp the obsolete post-soviet administration and strengthen capacity of public institutions, the Government is implementing a comprehensive Decentralization public administration, e-governance,  899 amalgamated territorial communities were Reforms in Ukraine decentralization and public fi nance established till May 2019 uniting 4,187 communities 2016-2019: management reforms in accordance and 9.1 million people. Irreversibility of Changes with the European principles of good  Between 2016 and 2019 own revenues of local governance. communities grew by almost 121 billion hryvnas. Human capital development Healthcare Reform  Over 28 million Ukrainians signed service agreements with primary care physicians of their own choice. The qualitative development of human  The salaries of doctors and nurses in autonomised healthcare capital is the basis of the growth of the facilities grew up to 2-3 times. national economy and strengthening  Purchasing medicines through international organizations of Ukraine’s competitive position in the since 2015 resulted in up +39% savings of the allocated funds. world. Human Capital development aims to improve the quality of life and education, and to increase the productivity of labour. The Government is set on a course of fundamental social and humanitarian reforms with a long-term implementation time frame. The fi rst successfully reached goals provided a foundation for a sustainable Education Reform implementation of the reforms.  461.3 thousand fi rst-grade pupils who started school on 1 September 2018 benefi ted from the adoption of the “New Ukrainian School” standard.  The share of the state order in higher education grew up to +84.5%.

Pension and Social Support Reform  On 1 March 2019 pension beneﬁ ts underwent the ﬁ rst-ever annual indexing to consumer prices resulting in an increase to +8.9 million hryvnas.  Beginning 1 January 2019 the Government started monetisation of subsidies off ered to reduce the burden of utility bills for 3.5 million households. 12

STRATEGIC GOALS AND PROGRESS. KEY ACHIEVEMENTS

Rule of law

and fi ght Preventing and combating corruption  New anti-corruption institutions were created in Ukraine, including the National Anticorruption against bureau of Ukraine, the Specialized Anticorruption Prosecutor’s offi ce, State Investigation Bureau, corruption the National Agency for Corruption Prevention, and the National Agency of Ukraine for fi nding, tracing and management of assets derived from corruption and other crimes. In June 2018 Ukraine’s Parliament adopted the Law on High The rule of law is critical to sustainable Anti-Corruption Court. The start of the Court’s economic and social development. The operations is expected in September 2019. rule of law is a multifaceted concept  The electronic asset declaration system was covering many areas: from personal launched enabling citizens to inspect public safety and property rights to the fi ght offi cials’ earnings and assets online and help the against corruption. Eff ective prevention authorities to expose corruption. and fi ghting corruption involve the enforcement of legislation and eff ective, coordinated and transparent operation of anti-corruption institutions.

The overall aim of anti-corruption Justice sector reforms reform is to stop practices that lead to  An innovative approach to private enforcement or facilitate corruption, punish those offi cers was introduced into the system of who are found guilty of corruption, enforcement of court decisions. Reforms in Ukraine rebuild trust and conﬁ dence, and ﬁ nally,  A legal aid system and a network of 535 access 2016-2019: reduce the impact of corruption on the points to legal aid have been set up in Ukraine and Irreversibility of Changes state budget and the economic climate eff ective cooperation with other legal aid institutions in the country. has been established. Security and defense Defence Reform  The Government has been introducing democratic public control over the armed forces. The civil command of the Ministry of Defence The Government continues to reinforce the of Ukraine was appointed. The Joint Operational Headquarters, the country’s potential of countering various forms Special Operations Forces, and the Air Assault Forces were formed of external aggression. In addition to that, the within the Armed Forces of Ukraine. Government is tasked with adequate response  The Armed Forces of Ukraine receive modern weapons and military to any and all challenges by minimising risks equipment. The Government launched production of missiles and for citizens’ life and property - in particular, by ammunition at national manufacturing facilities. implementing measures aimed at infringement of their rights, preventing crime and adequate response to emergencies, maintaining the safety of public space and road traffi c.

Homeland Security Reform  The reformed patrol police operates in 38 localities, as well as on roads of national and international importance with a total length exceeding 6,4 thousand km. 43 patrol police stations were created. 14 KEY PRIORITIES  Provision of favorable conditions for ECONOMIC business development and conduct GROWTH to achieve a higher rate of economic growth and integration to the EU market.  Creation of auspicious taxation conditions, optimal regulation, support of fair competition and small and medium entrepreneurship development, activation of privatization processes and amendment of state- owned entities governance system, reform of public procurement, and expanding of foreign economic relations.  Increase of investment activity and improvement of the investment climate to create production capacity in the domestic economy.  Inclusive economic growth, envisaging Economic growth the beneﬁ ts of enriching the country for each citizen and, accordingly, reducing social inequality and tension in the society. Dynamic, sustainable and inclusive growth based  Creating the conditions for intensifying on structural modernization of the economy, the involvement of businesses in the improvement of business conditions and public implementation of large-scale public- sector effi ciency is of great importance for the future private partnership projects. of Ukraine. The formation of a modern and robust economy is a prerequisite for creating new jobs These priorities will strengthen the and raising citizens’ well-being and, accordingly, for national budget, provide conditions for improving the quality of life of every Ukrainian. modernization of industry, enable Ukraine to become a part of regional and global The key to economic growth is the creation of added value chains, encourage investment equal, transparent and predictable business rules, into Ukrainian economy and ensure the inclusion of Ukraine in regional and global creation of new jobs. All these elements Reforms in Ukraine value-added chains, creating the conditions for the combined will introduce new opportunities 2016-2019: development of high-tech industries, attracting more for the Ukrainian people and will have a Irreversibility of Changes investments into the country and developing the positive eff ect on the quality of life of each export potential of Ukrainian producers. Ukrainian. Business Climate Improvement

The level of entrepreneurial activity is ACHIEVEMENTS robustly associated with an increase in economic growth, production effi ciency, GDP structure and quality, employment Increase by 12 positions in Doing Business Ranking Key factors behind rate, social policies, and national improvement of business- competitiveness on the global arena. climate (Doing Business):

Clear and transparent rules of market 71  Deregulation of play, fair and predictable behavior procedures of of regulatory bodies, absence of 76 permitting in regulatory barriers is crucial to full-scale construction. development of entrepreneurship in the 80 country and attraction of investments.  Improvement of These are the conditions that should be 83 protection of minority created by the initiatives in the sphere of shareholders. business climate.  Better regulation of To encourage new enterprises to enter external trade. the Ukrainian market and to enable existing ones to focus on development  Improved enforcing rather than on continuous problem- contracts. solving, the Government of Ukraine has launched a number of reforms united by the single key goal of making Ukraine a more attractive place for doing business.

MAIN TASKS

 Removal or minimization of administrative barriers for doing business.  Creation of eff ective regulation and provision of a systematic review of the acting regulation. 2016 2017 2018 2019  Better access of SMEs to loans.  Continuation of economic euro integration, fostering of Source: World Bank internationalization of SMEs. Greater cooperation between state 16 authorities and business communities, leading public organizations. ECONOMIC GROWTH As a result of the collaboration, the Government provided a new approach to systematic review of regulations, which were creating numerous ACHIEVEMENTS barriers for businesses. Nowadays the Government conducts special meetings Better regulation on deregulation quarterly.  More than 800 regulatory acts were reviewed or canceled for the better doing business during three The new risk-based approach to state years of the reform. supervision.  Concept of Reform of the Institute of Self- Regulation in Ukraine was adopted. It provides Starting from 2019, frequency and an opportunity for entities of economic and information on state inspections of legal professional activities to execute self-regulation entities in Ukraine is based on the level and creates the legal basis for delegation to self- of risk, connected with a legal entity and regulatory organizations some of the functions that its production processes. Information are currently performed by the state. about scheduled inspections, their  The Cabinet of Ministers of Ukraine approved the dates and duration, as well as results are decree “On Adoption of the Small and Medium available at the special web-resource Entities Development Strategy 2020” and https://inspections.gov.ua/ adopted the Action Plan for the Strategy. The Strategy determines 6 key branches for further Technical regulation and improvement: creation of favorable business-climate standardization. for SMEs’ development, ease of access to funding, simplifi cation of taxes administration, popularization The process of harmonization of the of entrepreneurship, promotion of export, increase national legislative base in the fi eld of of competitiveness and innovativeness of SMEs. technical regulation with international  The Complex Resolution of the Cabinet of Ministers and European ones in order to create of Ukraine on the improvement of Ukraine conditions for expansion the presence performance in the Doing Business ranking. The of domestic producers in the world Resolution has simplifi ed the process of bringing markets: Ukraine gained full membership the statutes of existing LLCs in compliance with the in the Metric Convention; technical Law “On Limited Liability Companies”, allowed the regulations in the three priority sectors banking institutions to receive information from the of Ukrainian industry were amended. Reforms in Ukraine state registers about persons applying for loans. By the end of 2018 Ukraine adopted 2016-2019: As a result, the novels, provided by the Resolution, 5105 national standards, and the level of Irreversibility of Changes will increase the country’s performance in Doing harmonization with European standards Business 2020 ranking. reached 64%. Public Procurement. in EU grant competitions with an average annual budget of EUR 100 million has become available for Ukrainian business associations, NGOs, public For the purpose of electronic procurement, a unique electronic procurement authorities and businesses. system “ProZorro” was created, which includes the web-portal of the Authorized Procurement Body (database and module of the electronic For the business and other organizations specialized web sites of the auction) and authorized electronic platforms. Today, electronic procurement European Commission on business development has become available: system ProZorro is one of the leading and most advanced electronic  EU Trade Helpdesk: for exporters – information regarding customs duties, procurement systems in the world, which enables transparent procurement taxes, and certifi cation in specifi c EU countries. by disclosing all procurement information and signifi cantly reducing  European Business Portal: for businesses - information regarding EU corruption risks during procurement procedures. As of 3Q 2019 2.97 million support programmes. purchases with a total value of 1.71 trillion UAH were successfully conducted,  European Cluster Collaboration Platform: for clusters - access to the EU in which more than 234.8 thousand participants took part . database which provides opportunities for collaboration with clusters in the EU and worldwide. The Government has successfully implemented a pilot project on the  Erasmus for Young Entrepreneurship: for young entrepreneurs – access organization of the activity of a centralized purchasing organization and, as a to information regarding work practice jobs at EU enterprises. result, developed a legislative act regulating the peculiarities of the creation  Gateway for women’s entrepreneurship: for women entrepreneurs and activity of centralized purchasing organizations. opportunities for fi nding mentors and collaborating with women entrepreneurs from the EU. The average annual growth rate of exports of goods and services in 2016- 2018 was 7.6%. Further plans  MEDT will continue deregulation in a number of sectors. Those of Development of state institutions on systemic support to the business. top priority include freight transportation, subsoil use, construction, agriculture and food, fi scal policy, foreign economic activities, energy,  Export Promotion Offi ce. The strategic goal of the institution is to help information technology, and telecommunications. Ukrainian business to become successful in foreign markets.  The continued eff ort to improve Ukraine’s Doing Business ranking. For  UkraineInvest. The institution was created to attract and support example, MEDT will coordinate central Government agencies to ensure investments in Ukraine. The institution provides investors with objective, fulfi llment of the tasks defi ned in the Action Plan on Implementing Best real-world information, and advice about doing business in the country. Practices of Eff ective Regulation.  Small and Medium Enterprise Development Offi ce. Advisory body to the  Adopt 3,000 more national standards by the end of 2019. Ministry of Economic Development and Trade of Ukraine. The mission of  In 2019, the practice of using uniform acts should be introduced - a list of the Offi ce is to develop an SME support system by improving access to specifi c requirements for each type of business required for inspection. information, fi nancing, infrastructure development and promoting the  A fully-fl edged Integrated Automated State Control System (IAS) should culture of entrepreneurship in Ukraine. be launched.  Continue systematic work within the framework of public procurement Ukraine took part in Europe’s programme for small and medium-sized reform. enterprises (COSME) (2014-2020).  Adoption of the Law of Ukraine “On Concessions” and improvement of by-laws. The Ukrainian small and medium-sized business has been granted access to the Enterprise Europe Network, which enables the presentation of goods and services at international markets in 65 countries. With the help of the European Enterprise Network, over 45 international contracts have been concluded between Ukrainian and foreign enterprises since 2017. Participation 18

ECONOMIC GROWTH

Privatization and State- Owned Enterprises Reform

The state is the largest asset holder in Ukraine, and of those enterprises deemed as having the reform in privatization and SOEs has been long strategic importance to the country. awaited. Strategic assets will be restructured to implement corporate governance rules Almost 3,500 state-owned enterprises have been that are OECD compliant for companies registered. 40% of these enterprises are inactive and operating in the public sector. operate only on paper, every third enterprise makes a loss and is a potential source of ﬁ scal risks. SOE MAIN TASKS operations are a source of corruption risks and losses for the state because of poor control mechanisms  Strengthening transparency and and inadequate transparency. oversight in public sector.  Ensuring the quality of reporting by The reform’s primary objective is to ensure that SOEs. assets are eff ectively managed for the beneﬁ t of  Improving effi ciency of SOEs Ukrainians as their main stakeholder. The Government through implementing of corporate must act as a professional and responsible owner of governance. enterprises and concentrate on adding value to the  Minimizing the amount of SOEs and assets. liquidation of non-operated SOEs. Reforms in Ukraine 2016-2019: The ultimate goal of the reform is to sell state-owned Irreversibility of Changes enterprises to private investors, with the exception ACHIEVEMENTS

 At the beginning of 2018 the Verkhovna Rada  The reform of the nominations committee To improve the of Ukraine passed the draft law on privatisation with the supervisory board for state-owned performance of state- which helped to re-launch the process of selling enterprises was welcomed by the IMF, the EBRD owned enterprises the state assets. The new law distinguishes two and the IFC. The decision-making process with Government approved levels of privatisation diff ering in regulations and regards to nominating candidates was escalated the ownership policy approaches: the “small-sized” privatisation and to the Government level, and leading managerial framework for state- the “large-sized” privatisation. recruitment companies were involved in the owned enterprises based  The new regulations for the “small-sized” assessment process. on OECD Guidelines on privatisation helped the Government to sell of  The reformed Nominations Committee set Corporate Governance of 1 billion hryvnas worth of assets at transparent up four supervisory boards for four state- SOEs. Ownership policies electronic auctions. owned companies: Ukrzaliznytsia, Ukrenergo, were approved for 15  At the beginning of 2016 the Verkhovna Rada Ukrposhta, Ukrainian Sea Ports Authority, and state-owned enterprises. passed amendments to the Law of Ukraine “On Boryspil international airport. The Committee the Management of State-Owned Property” is preparing to commence the formation of the providing the legal foundations for establishing Ukrhydroenergo supervisory board. independent and professional supervisory boards  The supervisory boards began to exercise their at state-owned enterprises. The ﬁ rst supervisory statutory powers to appoint CEOs of state- boards were established at “Naftogaz of Ukraine” owned enterprises. The appointment of the CEO and “Main Gas Pipelines of Ukraine”. of Ukrzaliznytsia was the ﬁ rst case of the boards applying the newly bestowed powers. 20

ECONOMIC GROWTH

Infrastructure Reform

It is important to reform Ukraine’s transport MAIN TASKS infrastructure given its economic and geographic position on a strategic junction of transport routes  Improvement of management, between Europe and Asia and between the Baltic/ modernization of infrastructure, Nordic countries and the Black Sea. Infrastructure increase its safety and is also critical for Ukraine’s domestic development harmonization with EU standards. because it needs an eff ective, effi cient, and  Deregulation and liberalization of extensive transport network among all of its regions. transport markets. Infrastructure plays a vital role for successful  Accelerate passenger and freight development of the country’s economy. delivery by using high-speed transport and improving logistics The Ukrainian transport sector needs signiﬁ cant  Engage strategic investors and modernization, better eff ectiveness and partners in the development of competitiveness, and adaptation to European public–private partnerships. standards.

The reform is ultimately aiming to create an eff ective transport system in Ukraine, meet people’s need for safe and aff ordable transportation, improve Reforms in Ukraine conditions for doing business in the sector, provide 2016-2019: for the full integration of the Ukrainian transport Irreversibility of Changes network into the Trans-European Transport Network. ACHIEVEMENTS FURTHER PLANS

 The Government has approved the National Transport Strategy of Ukraine (Drive Ukraine  Funding 55 billion UAH towards road renovation in 2019. 2030). Its implementation should help Ukraine to turn into a developed, high-technology,  Continuing action to improve traffi c safety, including and innovative country by developing its transport and infrastructure and using advanced implementation of the 500-500-1000 Program (the technologies. Government program for construction of 500 road rings,  The air transport market has been liberalized and leading global airlines have been 500 refuge islands, and 1,000 pedestrian crossings) as attracted, including Ryanair, Europe’s largest low-cost airline. The Ukrainian air transport part of development of the road system. market has been growing 25–30% annually for the past three years in a row.  Carrying out a pilot project of construction of weigh-in-  A number of large national projects have been carried out on the rail infrastructure. motion sites. Beskydy Tunnel has been completed and commissioned, substantially increasing the  Continuing the implementation of pilot projects for throughput of Pan-European International Transport Corridor No. 5 and shortening rail concession of state stevedoring companies, conducting travel time between Ukraine and the EU. Kyiv Boryspil Express, a rail link between Kyiv tenders and awarding the fi rst concession contracts for and Boryspil International Airport, has also been completed and commissioned. Olvia and Kherson ports, drafting a concept memo and a  In 2018, for the fi rst time in 25 years, 3.4 thousand freight cars were purchased and feasibility study for the concession of Yuzhnyi port. manufactured by UZ, 118 passenger cars upgraded, and 115 locomotives fi tted out. In  Corporatization of SOE Ukrainian Sea Ports Authority addition, 15 modern locomotives were delivered and 15 more arrived in early 2019 under — the strategic and largest enterprise in the maritime a contract with General Electric (USA). It is for the fi rst time in 10 years that the Ukrainian sector. Railways got new locomotives.  Drafting the Methodology for calculation of port fees  A number of large-scale national projects were carried out in the fi eld of road rates and the Procedure for Compensation of Investment management. The State Road Fund started operating. UAH 23.8 billion in 2018 were in Strategic Facilities of Port Infrastructure. allocated to repairing of the State and local highways, and 2 539.4 km of roads have been  Increasing the percentage of regional airports in overall repaired. As of 2016, 5,444.6 km of public and local public roads have been repaired. The air transport fi gures by expanding the presence of length of repaired and constructed public and local highways is the highest in the last 14 low-cost airlines in Ukraine. years due to increased public investment.  Developing an international multimodal transport hub  The GO Highway project, a major international infrastructure project designed to connect on the basis of Bila Tserkva Airport by opening an the ports of the Black and Baltic Seas and become part of the Trans-European Transport international checkpoint at the Airport and starting Network, has commenced. The key stage is scheduled for 2019 and the project at the international air freight transportation. Lviv-Uman section is expected to be completed in 2020.  Launching Terminal F at Boryspil Airport and  Port charges were reduced by 20% with eff ect from January 1, 2018, off ering a positive commencing construction of a bus station. multiplier eff ect of making logistics cheaper, increasing freight transshipment at Ukrainian  Computerizing rural offi ces of PJSC Ukrposhta ports, and improving their competitiveness. (40% offi ces to be computerized by end of the year).  The State Service of Maritime and River Transport of Ukraine (the Maritime Administration) has been created and started functioning. MarAd’s main objective is to implement public policy in the area of maritime and river transport safety.  39 Ukrainian infrastructure projects covered by Drive Ukraine 2030 were included in the Indicative Investment Action Plan for the Trans-European Transport Network (TEN-T). The Plan was drafted by the European Commission and World Bank to develop the transport link in the Eastern Partnership countries.  40% of rural post offi ces of JSC UkrPoshta are computerized. hectares. This document was drafted 22 by the Ministry of Agrarian Policy and Food in close cooperation with ECONOMIC the Association of Farmers and GROWTH Private Landowners — Ukraine’s largest professional union of farmers. Agriculture sector  The Government off ered extended opportunities and access to fi nancial reform support tools – in particular, partial compensation of the purchased agricultural machinery and Agriculture is crucial for the country’s economy and equipment made in Ukraine; seeds of food security. Today it contributes 12% to GDP and agricultural plants grown in Ukraine; about 40% foreign currencies from exports. With expenses specifi c to advisory this in mind, the Government needs to support an services in agriculture; reducing eff ective operation of this sector. It is small and loan costs; budgetary subsidies per medium-sized businesses in the rural areas that have unit of cultivated agricultural land (1 the largest potential for development. hectare).  Each year the Government support Today there are about 33,000 farms in Ukraine, which of agricultural producers accounts accounts for more than 70% of all economically for at least 1% of the agricultural active agricultural enterprises. production.  Access to the information contained The key task of the reform - to unleash the potential in the State Land Cadastre was of Ukrainian agriculture market players. de-monopolised. The NABU, the NACP, the National Police, the SFS, MAIN TASKS notaries public and land surveyors were granted access to the  Improve performance and competitiveness of database. farms.  2018 marked the launch of the pilot  Expand export geography for agriculture project to implement an electronic products. land auctions which resulted in  Promotion of farming to create the rural middle holding the fi rst auction for the class, develop rural areas, and improvement of leasehold rights to state-owned the welfare of country dwellers. agricultural land plots.  In 2018, the Parliament of Ukraine ACHIEVEMENTS adopted Law # 2496-VIII “About Basic Principles and Requirements Reforms in Ukraine  The Government has approved the Concept for Organic Production, Circulation 2016-2019: of Development of Farms and Agricultural Co- and Labeling of Organic Products”, Irreversibility of Changes operation in 2018-2020. It is designed exclusively which came into force in August to support farms with an area of up to 100 2019. Direct government support of agro-industrial Record crops of grains, sunfl ower and soy FURTHER PLANS enterprises (million UAH)  Continued pilot project for the 5,909 70.1 implementation of electronic land 5,448 63.9 66.1 62.3 60.1 61.9 66 auctions, and elaboration of the Law 4,232 of Ukraine “On Amendments to Land 45.3 Code of Ukraine for Introduction of Electronic Land Auctions” which provides for the introduction of sales 14.2 of land plots and the associated rights 10.9 11.2 13.6 12.2 340 8.3 10.1 13 exclusively in the form of electronic land auctions. 3.9 4.5 2.4 2.7 3.9 3.9 4.3 4 2016 20172018 2019  Continued fi nancial support of farming and extension of funding Average From 2016 through 2019 the level of funding 2012201320142015 2016 2017 2018 in 2016- streams to provide additional support agro-industrial enterprises grew 17 times. This x17 2018 to farming enterprises which have enabled more than 12,600 business entities and TIMES Grain crops, Sunfl ower, Soy, individuals to benefi t from the state support. the status of family farms. 800 million million tones million tones million tones hryvnas was allocated for 2019.  Continued state programme of animal husbandry support. The total budget of the programme is 3.5 billion Exports of Ukraine’s agricultural sector (USD million) Compared to 2016 agricultural businesses increased: hryvnas.  Continued State Programme for Supporting Agricultural Producers in 17,756.9 18,611.8 +1.8% +3.2% +9.3% +10.3% Procuring Ukrainian-Made Agricultural 15,281.8 Machinery and Agro-Industrial Complex Equipment, and the 10,254.4 The The The The implementation of the additional production of production production of production of incentive “Partial Compensation milk of livestock poultry eggs animals (live of Cost of Special Grain Carriages weight) and Equipment for Production of Bioethanol and Electricity from 20162017 2018 1/2 2019 Biomass”. The scope of support is +9.7% +93.8% 1,336 882 million hryvnas. to 2017 The exports of Ukraine’s agricultural sector grew by 3,330 USD million or by 22% (in 2018 compared to 2016). +22% Milk cow The amount New work The genetics In January-June 2019 the exports of products of 2016 2018 productivity of investment places were of the Ukraine’s agricultural sector amounted to 41.5% into cattle created livestock was of the country’s total export trade. breeding improved by grew importing In the fi rst half of 2019, exports of agricultural pedigree products accounted for 41.9% of total exports of stock goods in Ukraine 24

ECONOMIC GROWTH Energy Sector Reform

The energy sector is one of the most strategically The fi nal goal of these eff orts is important industries of Ukraine’s economy. This is not modernisation of the sector, boosting only due to the objective importance of the industry its investment potential, creating the within Ukraine, but also due to Ukraine’s important conditions for sustainable energy sector role in providing energy security of the entire development, and overall qualitative European continent. improvement of Ukraine’s economic, energy and environmental safety. Ukraine is crossed by one of the largest gas transmission systems in the world which ensures MAIN TASKS reliable transit of natural gas to EU countries. Ukraine also has an extensive system of underground gas  Increasing energy independence: reservoirs allowing to store substantial amounts of diversifying energy sources and gas. Zaporizhia nuclear power plant in the east of ways of supplying energy resources Ukraine is the largest nuclear power plant in Europe to Ukraine, and increasing domestic while the country’s land is abundant in large oil and production of energy resources. gas deposits including non-conventional reserves.  Implementing the principles of the EU’s Third Energy Package: The Government’s principal eff orts in reforming the establishing fully functional natural energy sector are aimed at its harmonisation with gas and electricity markets in EU regulations and standards, liberalisation of the Ukraine, and integration of Ukrainian industry, establishing fully functional natural gas and and EU energy markets. electricity markets with transparent and competitive  Boosting energy effi ciency and price formation mechanisms as well as their energy saving. integration with European energy markets.  Promoting renewable energy. Reforms in Ukraine 2016-2019: Irreversibility of Changes ACHIEVEMENTS FURTHER PLANS  On July 1, 2019, a new electricity  Long-term energy policy document of market was introduced in Ukraine in  Ensuring the continuation of electronic auctions. Ukraine approved - Energy Strategy of accordance with the Law of Ukraine Improvement of the procedure for the preparation Ukraine until 2035. “On the Electricity Market”. The of subsoil. Implementation of an electronic system of  Projects are being implemented to procedure for conducting electronic permitting procedures in the fi eld of subsoil use. replace defi cit anthracite coal. auctions for the electricity sale  Introducing a fully functional gas and electricity  Implementation of the project for under bilateral agreements and the markets. construction of the Centralized procedure for selecting the organizers  Unbundling the state-owned gas monopolist and Storage of Used Nuclear Fuel. of electronic auctions for the sale of monopolists in the electricity market as required by  Increased supply of nuclear fuel from electricity under bilateral contracts the EU’s Third Energy Package. alternative supplier. have been approved.  Further diversifying nuclear fuel supplies.  Ongoing integration of Ukraine’s  Since 1 March 2019 Ukraine has  Adoption of conceptual bases of development of the energy system with the European implemented daily balancing on the market of oil products and gas fuels of Ukraine. energy system. natural gas market, which allows for  Integration of the grid of Ukraine with the European  Diversifying supplies of fuel resources precise balancing of gas demand with grid. Implementation of the Ukraine-European Union and increasing energy independence: the actual supply within 24 hours. Energy Bridge project. For the last four years Ukraine has  Liberalization of subsoil use: In 2018,  Implementation of the National Emission Reduction managed to deal without purchasing the practice of open auctions for the Plan for Large Combustion Plants. Russian gas, importing fuel from the sale of special permits for subsoil  Introducing a procedure for tenders for construction EU countries instead. The dependence use was introduced. 4 rounds of of generating capacity on Russian nuclear fuel has also been electronic auctions took place, where  Reconstruction of hydroelectric power station of substantially reduced. 37 plots were proposed, including the Dnieper cascade, construction of additional  Domestic extraction of natural gas hydrocarbons – 24, ores and non- hydropower facilities. and oil is gradually growing - and so ores – 11. is the generation of electricity from  The Energy Effi ciency Fund was renewable sources. The Government established to ensure effi cient use plans to increase the share of “green” of state funding in implementing energy in the overall consumption up activities aimed at increasing energy to 11% in 2020. saving and energy effi ciency. 26

ECONOMIC GROWTH

The other main problems are:

 Lack of regulation of the basic principles of the state policy implementation in the area of climate change and protection of Ecology and natural the ozone layer.  Lack of civil society and public resources authorities awareness of all aspects of climate change, protection of ozone layer and low-carbon development of the country, use of ozone-safe technologies. The problem of waste in Ukraine is of particular  Imperfection and out-of- magnitude due to dominance of resource-intensive dated nature of the system multi-waste technologies in the national economy. of state supervision (control) The large scale of resource use and the energy and of environmental legislation raw materials specialization of the economy together compliance. with the outdated technological base determine the  Duplication of supervisory (control) high rates of waste generation and accumulation. functions of the state executive authorities. This situation leads to worsening of ecological crisis  Inconsistency of the system of and socio-economic situation in society and makes it organization of state supervision Reforms in Ukraine necessary to reform taking into consideration global (control) of environmental 2016-2019: experience of the entire legal and economic system legislation compliance with Irreversibility of Changes of waste management. international standards. MAIN TASKS FURTHER PLANS

 Creating and ensuring the proper  The Concept of the implementation of the  Adoption of legislation: functioning of a nationwide waste state policy in the fi eld of climate change for ○ “About Waste Management”. prevention system, collection, recycling and the period till 2030 is approved, which is the ○ “About ozone-depleting disposal, neutralization and environmentally fi rst comprehensive regulatory document of substances and fl uorinated sound disposal. Ukraine in the fi eld of climate change, the greenhouse gases”.  Improvement of the state policy in the Actions Implementation Plan of the Concept ○ “About the basics of organization sphere of climate change for achievement is approved. and implementation of monitoring, of sustainable development of the  The Low Carbon Development Strategy reporting and verifi cation of state, creation of legal and institutional of Ukraine until 2050 has been developed. greenhouse gas emissions”. preconditions for ensuring gradual transition Ukraine has become the 9th party of  Preventing climate change by to low-carbon development under the the Paris Agreement, which fulfi lled this reducing anthropogenic emissions conditions of economic, energy and requirement of the Paris Agreement. and increasing absorption of ecological security and increase of well-  The Concept and Strategy for reforming of greenhouse gases and ensuring a being of citizens. the State Supervision (Control) System in gradual transition to low-carbon  Transition from ineffi cient and outdated the fi eld of environmental protection were state development. total environmental control to a system of approved, and the Actions Implementation  Implementation of mechanisms preventing violations and monitoring of the Plan was approved. aimed at reducing consumption state of environment.  The decision to terminate the State of ozone-depleting substances  Creation of a single integrated body of Environmental Inspectorate and to establish and stimulating transition to use environmental oversight and elimination of the State Environmental Protection Service of alternative substances and duplication of state oversight functions in was approved. Liquidation of separate technologies. the specifi ed fi eld, competitive selection territorial bodies of the State Inspectorate  Development of the State of all employees, creation of conditions for and creation of interregional territorial Environmental Protection Service of preventing corruption in the fi eld of state bodies has started. Ukraine, creation of 10 inter-regional environmental protection.  The criteria for assessing the risk of territorial bodies and ensuring economic activity are approved and complete liquidation of 23 territorial ACHIEVEMENTS frequency of implementation of planned units of the State Environmental measures of state supervision (control) Inspectorate.  The National Waste Management Strategy in the fi eld of environmental protection, for Ukraine until 2030 was approved, rational use, reproduction and protection of which addresses the problematic situation natural resources are determined. of waste generation, storage, processing, recycling and disposal. The National Waste Management Plan for 2030 was approved as well.  The Paris Agreement has been ratifi ed. Ukraine has become one of the fi rst European countries to ratify this global climate agreement. 28

ECONOMIC GROWTH

Tax and Customs MAIN TASKS Reform  Improving stability and predictability of the tax system.  Improving the quality and eff ectiveness of tax administration. Effi cient operation of the customs and tax services  Extension of taxable base. are essential for creating a favourable business  Improvement of taxpayer environment in the country. At the moment Ukraine compliance with tax legislation. is actively implementing the State Fiscal Service  Promotion of security and reform which provides for its division into two international trade including separate branches: the State Tax Services and the simplifi cation and harmonisation of State Customs Service to benefi t from organisational customs procedures. structures building according to the functional  Raising the effi ciency of making principle, optimisation of costs, and modernisation and customs payments. automation of business processes.  Development of infrastructure, electronic technology and services Reforms in Ukraine The reform is ultimately aiming to build a fair modern for international trade. 2016-2019: tax and customs system to ensure equality of all  Improving the effi ciency of Irreversibility of Changes taxpayers before the law and improve the transparency international customs cooperation. and effi ciency of newly created authorities. ACHIEVEMENTS FURTHER PLANS  Elaboration and adoption of by-laws aimed at the implementation of Taxation  Finalisation of the State Fiscal Service the provisions EU Customs Code re-organisation by separating it into the (Regulation (EU) 952/2013), the  Implementation of steps aimed at countering State Tax Service and the State Customs provisions of Regulation (EU) 608/2013 Base Erosion and Profi t Shifting (BEPS). In Service. concerning customs enforcement of 2017 Ukraine joined BEPS - an OECD project  Holding expert discussions regarding intellectual property rights, and Council aimed at combating tax planning strategies adoption of distributed profi t tax instead Regulation (EC) 1186/2009 setting up with the intention of artifi cially shifting profi ts of the current taxation model as a viable a Community system of reliefs from to off shore tax jurisdictions. alternative for transforming the tax customs duty, and the institution of  VAT refunds. Transparent automatic VAT system. authorised economic operator. refunds were implemented with providing  Accession to the Convention on Joint  Creating a convenient online service public access to the electronic VAT refund Transit Procedure and NCTS (New enabling businesses to view prior registry enabling entrepreneurs to verify the Computerized Transit System). decisions on customs classifi cation status of their payments online. Steps were  Deployment of Authorized Economic of goods. Implementation of taken to ensure transparency of the VAT Operator Program. international data models (World recovery process. VAT recovery administration  Creation of an online business service customs organization’s datamodel terms were signifi cantly decreased while the and customs service for obtaining and EU datamodel) in the electronic refunds are made automatically. preliminary decisions on the classifi cation documents of Government authorities of goods and reviewing the relevant and in customs information systems. register of previous decisions. Customs

 ‘Single-window’ system was implemented at the customs. A unique computer-controlled IMPACT share of investments was allocated to information complex was developed to agricultural companies and wholesale organise ‘single window’ operations. Access  Business Expectations Index in the 1st and retail trade. to the complex is provided to enterprises, quarter of 2019 reached 119.7, which  Fiscal consolidation, tight monetary supervisory authorities and Government is the highest level over the last three policy and lower energy prices are agencies. As at 2019 99% of customs years. Positive business expectations the main factors behind deceleration declarations are processed using the ‘single and gradual improvement of the of consumer price increase and FX window’ method. business-climate (reﬂ ected in the stability.  Introduction of a single treasury account World Bank’s Doing Business Index)  The largest volumes of direct for customs payments. The purpose of the support investment growth. investments are directed to industrial initiative is to simplify the administration of  Cooperation with the IMF and the enterprises -33,2% and establishments prepaid customs payments for businesses. stable macroeconomic situation and organizations engaged in Instead of administering 26 accounts for supported inﬂ ow of FDI in 2018 and the wholesale and retail trade - 16,7%. prepayment of customs payments used for 1st quarter of 2019 (by cumulative USD customs clearance in diff erent customs, a 3.5 bn). single account is used at any customs offi ce.  According to the NBU, in 2018 FDI totaled USD 2.5 bn, 60% of which were directed to the real sector. Large 30

EFFECTIVE GOVERNANCE

Eff ective governance

Restructuring line ministries, strengthening the role of the Cabinet The Government of Ukraine has identiﬁ ed Eff ective of Ministers to provide strategic Governance, with Public Administration Reform leadership and developing a (PAR), E-governance, Public Finance Management professional and ethical civil service (PFM) and Decentralization, as key pillars in its with the right skills to deliver reforms Medium-Term Government Priority Action Plan to are central to the eff ective governance 2020 agenda to enhance transparency and accountability. Eff ective governance is essential for the effi cient running of the state and a precondition to achieve Modern public administration is also a the broader government objectives of economic key element in building trust between growth and human development. Good and citizens and the state. Reforms in Ukraine effi cient Governance at central level, combined with 2016-2019: empowered local Government institutions, will also Building eff ective governance system Irreversibility of Changes contribute to better service delivery for citizens and is an important step for Ukraine on its sustainable public ﬁ nances. European integration path. Public Administration Reform

The PAR focuses on the development of strong MAIN TASKS public institutions, professional civil service and delivering quality public services to the citizens. Building an eff ective and accountable public administration that recognizes the rights and needs of citizens, ensures sustainable development of the country and improvement of the living The reform began in 2016 with implementation standards for citizens providing high quality public services. The PAR Strategy has 4 reform of the new Law on the Civil Service and areas with identifi ed specifi c objectives: comprehensive PAR Strategy 2020, which were assessed positively by European experts from  Effi cient Government decisions are  The accountable system of state OECD/SIGMA. The years of 2017 and 2018 were evidence based and coordinated; provide bodies is rational, economically marked by active phase of the reform involving for implementation of strategic goals feasible and transparent, with reorganization of ministries, launch of new policy and priorities; are achievable, have the a clear division of powers and development and strategic planning directorates, public interest in mind; and the necessary responsibilities both between civil service recruitment via transparent fi nancial resources. The Government’s state bodies and inside each body. competitions on career.gov.ua platform, and roll- decision-making process is transparent, Citizens should have free access to out of e-services for citizens and businesses. inclusive and eff ective. information about state bodies and  Professional civil service is virtuous, result- their activities in a convenient and On the reform path, the EU is providing signifi cant oriented and enjoys trust amongst citizens. understandable form. expert, technical and fi nancial support for the PAR. The state is a competitive employer with  Quality administrative services and The PAR progress in Ukraine in 2017-2018 was proper working conditions; introduces procedures are clearly defi ned in the positively evaluated by EU experts of more than modern and automated HR tools; recruits legislation, provide basic guarantees 75% progress that allowed additional EU fi nancial the best professionals through open and for citizens, and are available both assistance for a total amount of about EUR 23.5 merit-based competitions; has transparent at the local level (through modern million to be raised during the period. performance evaluation procedures and Centers for Administrative Services responsibilities. - CASs) and electronically. In 2018, OECD/SIGMA experts performed a comprehensive baseline assessment of public administration and produced recommendations that were taken as a base for the revised PAR Strategy.

Eff ective, accountable and transparent public administration is a foundation of successful implementation of all other reforms, an important prerequisite of Ukraine’s European integration, crucial for building a strong European democracy. 32

EFFECTIVE GOVERNANCE

ACHIEVEMENTS

Eff ective Government decisions: The accountable system of state  Comprehensive Government strategic planning was bodies: aligned with mid-term budget planning.  The requirements for the structure  The methodology and architecture of the of pilot ministries were approved Government strategic planning developed, with public policy-making function Government’s Strategic Plan up to 2020, were separated from non-core functions elaborated. An e-Government Portal with of ministries. Government Action Plan Monitoring systems (based  The reorganization of 8 pilot on MS Sharepoint) was created. ministries was completed, where  The implementation of electronic systems for the 58 Policy making Directorates were approval of draft regulatory legal acts (RLAs) and formed and 562 specialists were electronic documents management system in the appointed. CEBs has begun. The format of a new electronic  The optimization of non-core document according to European standard ETSI functions and support functions of EN 319 162 ASIC (Associated Signature Containers) ministries has begun. Baseline Proﬁ le was approved. 636 public institutions have been connected to the System of Electronic High-quality administrative services Interaction. and procedures:  The accessibility of administrative Professional civil service: services has been increased through  Competitive selection procedures into the civil the operation of 778 Centers of service were updated in accordance with the best EU Administrative Services (CAS). practices. A modern vacancies portal, career.gov.ua,  The system of electronic interaction was launched, through which more than 31 thousand of state electronic information applications to civil service were submitted. resources (TREMBITA) was put into  Procedures for annual performance evaluation were experimental operation. introduced and all civil servants were assessed in  Uniﬁ ed State Open Data Web 2018. The category A evaluation was made public. Portal (data.gov.ua) was updated  A tender was conducted under the World Bank and 11,000 open data sets were procedures, and a contract was signed by the published. Reforms in Ukraine supplier for the implementation of the Civil Service 2016-2019: Human Resources Management Information System Irreversibility of Changes (HRMIS), in order to increase its effi ciency and transparency. FURTHER PLANS IMPACT

Eff ective Government decisions:  Eff ective governance is  Further simplify the Regulations of the Cabinet of Ministers of essential for the effi cient Ukraine to improve the planning, coordination and Government running of a state and is a decision approval process. precondition to achieving >31,000 8  Strengthen the Centre of Government capacity to coordinate the broader Government public policy and clearly defi ne its roles and functions in objectives of economic applications to new ministries accordance with the principles of “Good Governance”. growth and human civil service positions reorganized  Expand the implementation of electronic systems for draft RLAs development. submitted through approval and e-document management to all ministries.  Reforms are helping the career.gov.ua Government deliver better Professional civil service: services for citizens,  Continue optimization of competitive selection procedures and and are increasing develop the Ukrainian School of Governance, which also includes the transparency and the Centre for the Evaluation of Candidates for the Civil Service. accountability of public  To ensure a fair and transparent remuneration system for administration as a whole. civil servants based on the job classifi cation and updated Modern technology, competency framework. tools and processes are 58 562  Implement HRMIS key modules in the ministries. decreasing operational costs and increase the policy making specialists appointed The accountable system of state bodies: quality and speed of many directorates formed on reform staff  Complete the reorganization of all ministries, in line with the administrative processes. positions unifi ed target ministry model, to increase responsibility and  According to Global capacity for policy areas and continue the withdrawal of non- Competitiveness Index core functions from ministries. 2016-2018, at Public-sector  Optimize the functions of ensuring CEBs operation on the basis performance ranking of “outsourcing” and “shared service centers” principles. Ukraine has gained + 30  Introduce proactive and client-oriented approaches to points (89th position in disseminating public information about Government agencies. 2018 out of 140). 778 11,000 High-quality administrative services and procedures:  Ensure the adoption of the Law on administrative procedures, its Centers of data sets available on further implementation, and promote wide public awareness. Administrative the open data portal  Reduce the administrative burden on citizens and business, Services (CAS) are data.gov.ua including through simplifi cation (re-engineering) of basic operating services and their subsequent “digitalization”.  Introduce periodic tools for monitoring the quality of administrative services and the level of customer satisfaction of these services.  To connect up to 25 basic state registries to the system of electronic of the state bodies interaction (TREMBITA). mobile administrative services centres 34 were established in united territorial communities. EFFECTIVE  The single state open data web portal was GOVERNANCE upgraded based on a common design of the code, and the portal migrated to the CKAN platform. More than 11,000 Development data sets were published on the portal. The information on vehicles inTexty.org. of e-governance ua and the capabilities of Opendatabot were integrated into services used by citizens for over 1 million times. Supervisory Government authorities also enabled Implementation of e-governance tools is one of the public access to data on more than top priorities in building an effi cient governance 143,400 business audits scheduled for system and reforming the Government control system. 2019. This includes adoption of electronic governance  The “Digital by Default” principle was tools for ensuring effi cient and transparent implemented providing for the digital Government control, increasing the Government form of implementing all processes and operation effi ciency, implementing high-quality carrying out digital expert assessment of electronic services and building a closer collaboration all laws and regulations on informatization, (integration) between the state and the citizens. e-government, formation and use of national electronic information resources,  Implementing priority electronic services in all development of information society, areas of civil life. e-democracy, provision of administrative  Publication of high-quality sets of open data services or digital development. based on the level of public interest, the best  The implementation of an electronic international practices and in accordance with identifi cation system began by launching the established requirements with regards to the integrated electronic identifi cation openness and transparency of operations. system id.gov.ua. This system is intended  Implementation of electronic integration of state to integrate e-identifi cation systems electronic information resources. enabling the use and development of  Development of an electronic document all the applicable tools such as Bank ID, management system. Mobile ID, electronic digital signature/  The ASC network was signifi cantly extended electronic passport to pave way for ‘single and optimised while the scope of administrative window’ operation. services was greatly extended. In 2018 over  “Trembita” system for secure data 15 million services were obtained via ASCs by exchange between public registers was Reforms in Ukraine citizens averaging over 57 thousand services introduced in testing mode enabling 2016-2019: daily. Throughout the year 54 administrative Government agencies to quickly exchange Irreversibility of Changes services centres were opened, 84 remote centre the information required for the provision administrator workstations were created and 3 of e-services to individuals and businesses.  At the Government web portal Electronic services FURTHER PLANS kmu.gov.ua over 120 electronic services are available to  Full-scale deployment of the “Trembita” system and its connection individuals and businesses which 120 to electronic registers. services are ranked the highest in terms  Further optimisation and re-engineering of administrative services of priority and social importance to cater for life events and business situations. - in particular: most needed  Extension of data sets and improving the quality of open data being Government 29 7 20 8 published. services are services services services services ○ Social protection - 14 services. now available  Additional local Government authorities and united territorial Finance and Transport Land and Citizenship ○ online Construction and real estate - taxation Environ- and communities to be connected to the electronic document exchange 10 services. mental Migration system. Implementation of electronic system for approving draft Protection ○ Land management and The number pieces of legislation, an electronic archive system and e-contracting. environmental protection - of users of  Further legal and technical regulation of the unifi ed e-identifi cation e-services 20 services. tripled system enabling the use and development of all applicable tools ○ Business registration and such as Bank ID, Mobile ID, electronic digital signature/electronic administration - 28 services. passports. ○ Citizenship and migration - All e-services in Ukraine 8 services. are available ○ Finance and taxation - via the 4 28 10 14 IMPACT Government services services services services 29 services. portal at Security and Business Construction Social ○ kmu.gov.ua Transport - 7 services. Judiciary Registration and Real Protection  According to a recent United Nations Е-Government Survey ○ Security and judiciary system - System and Admini- Estate 2018, Ukraine was ranked 82nd among 193 countries in terms of 4 services. stration E-Government Development Index, which clearly attests to the need of further improvements to the quality and level of services, extending the scope of telecommunications infrastructure  193 Government authorities, Electronic document management and developing tools for involving the public into Government agencies and organisations were processes. connected to the electronic  In 2018 Ukraine took the second place among the countries most document exchange system. 193 Government successful in the publication and use of open data for increasing This resulted in implementing authorities, agencies Government accountability, developing innovation and social intergovernmental collaboration of and organisations infl uence and the seventeenth place among 30 countries which 673 organisations. All city councils were connected to the adopted the International Open Data Charter. The Charter was of regional centres, 336 regional 673 electronic document ratifi ed by Ukraine in 2016 (Open Data Barometer report). Since state administrations, 8 cities with exchange system September 2018 Ukrainian Government data is automatically regional status and 12 territorial Government in 2018. published alongside data of EU Governments on the European Data communities were connected to authorities, agencies Portal. The portal integrates over 860 thousand data sets from 35 the electronic document exchange and organisations countries and 78 local and national portals. system. Electronic document format are connected to the They exchange about in accordance with ETSI EN319 electronic document 5,400 electronic 162 ASiC (Associated Signature exchange system documents daily. Contrainers) Baseline Profi le was implemented and approved. 36

EFFECTIVE GOVERNANCE

Public Finance Management Reform

For a long time the Ukrainian system of public fi nances MAIN TASKS suff ered from a lack of end-to-end strategic planning which prevented proper control over budgetary  Building an effi cient modern system planning and weakened the coordination of budget of public fi nance management as programmes with the priorities in state development. the basis for sustainable economic growth. The reform is primarily aimed at providing proper  Ensuring eff ective accumulation of Reforms in Ukraine funding of Government functions by means of ensuring state resources and their allocation 2016-2019: eff ective allocation and use of fi nancial resources. based on state development Irreversibility of Changes priorities in the mid-term. ACHIEVEMENTS

 Introduction of medium-term The ratio of total public debt and Revenues of the general fund of local budgetary planning. The the debt guaranteed by the state to: budgets(without considering intergovernmental Verkhovna Rada of Ukraine GDP, %GDP transactions) (billion hryvnas) developed, approved and adopted comprehensive changes to the Budget Code of Ukraine and 258,6 amendments to a number of other legislative instruments on 234,1 implementation of medium-term 79,1 80,9 192,7 budgetary planning. 71,8  Medium-Term Public Debt Management Strategy 2018-2020 60,9 146,6 was adopted. The strategy deﬁ nes the goal of reducing the debt-to- 101,6 GDP ratio from 52.3% at the end of 2018 to 43% by the end of 2022. It also sets quality goals to not only reduce the level of debt relative to the GDP, but also to improve its structure and its current-day risks.

 The Procedure for verifi cation 20152016 2017 20182015 2016 2017 2018 2019 and monitoring of pensions, aid, subsidies and other publicly funded welfare payments was defi ned. The verifi cation process is to ensure that the Government transfer payments Open Budget index (calculated every are actually received by those in 2 years, 100 points total) need of Government support. The verifi cation of 2016-2018 resulted in the revocation of improperly allocated welfare payments for the total amount of 172 million hryvnas.  Providing extended access to the information on public funds to the 46 54 citizens of Ukraine. The Government launched the unifi ed register of public spending (spending.gov.ua) 2015 2017 and the open budget web portal (openbudget.gov.ua). 38

EFFECTIVE GOVERNANCE

Decentralisation MAIN TASKS  Formation of capable territorial communities and support of their development to empower their Being another key priority in building eff ective provision of high-quality and governance, decentralisation enables the creation accessible services to the local of a modern local self-Government system and population. territorial organisation of power based on European  Achievement of an optimum values of developing local democracy (in particular, balance of powers between the the European Charter of Local Self-Government) and local Government authorities and refl ecting Ukraine’s local specifi cs. the state executive authorities. The commencement of decentralisation process in  Ensuring the accessibility and Ukraine in 2014 was marked by the adoption of the quality of public services to be Concept of the Reform of Local Self-Government and provided in accordance with Territorial Organization of Power, the Law of Ukraine national standards in consideration “On Voluntary Unifi cation of Territorial Communities” of the need for ensuring territorial and amendments to the Budget and Tax Codes (with accessibility, creating the basic regards to fi nancial decentralisation). infrastructure, and maintaining the This process enabled the creation of a viable and openness of information regarding Reforms in Ukraine effi cient mechanism of local self-Government at the services, the procedures 2016-2019: the basic level - the united territorial communities and terms of their provision, Irreversibility of Changes (UTC) in line with the European Charter of Local and providing them at a high Self-Government. professional level. Amalgamated Territorial Communities

ACHIEVEMENTS  As a result of decentralisation, communities 924 4,277 10 gained access to sizeable resources, funding and powers - a powerful set of tools and ATCs established communities million people opportunities for ensuring fully realised local As at 10 May 2019 28,3% of the total 26% of the entire development. Pursuant to the amendments number of local councils population of Ukraine made to the Tax and Budget Codes of Ukraine as at 01 January 2015 the newly created communities received the powers and resources on par with cities of regional status - in particular, the ability to off set 60% of individual income tax revenues to the local budgets for the discharge of their authorities. In addition to that the entire revenues from single tax, income tax of These changes have already brought ﬁ rst results community-owned enterprises and ﬁ nancial institutions, and real estate (real property, land), and transport tax go into the local 258,6 budgets. 234,1  Amalgamated territorial communities 192,7 engage in direct inter-budget relations with 146,6 the state budget (before the reform direct +30% x1.5 transactions were only allowed for regional and district budgets and those of cities of average annual growth times regional status). Furthermore, to enable of local taxes and The expenditure of the their discharge of powers delegated by the charges in ATC development budget state ATCs are provided targeted transfers 20162017 2018 2019* per person (grants in aid, subventions for medicine and education, subventions for the development of own revenues of local budgets community infrastructure etc.). The legislative in the period from 2016 to changes also enabled local self-Government 2019 grew by almost authorities to approve local budgets 112 billion hryvnas irrespective of the date of passing the law on the State Budget. *According to The State Treasury Service of Ukraine reporting data as of July 1, 2019 40

EFFECTIVE GOVERNANCE

 The amount of state funding aimed at the improvement of community infrastructure regional development grew by 13.4 billion hryvnas compared to the level at the commencement of reforms in 2016 ACHIEVEMENTS  Transfer of authorities speciﬁ c to architecture 20.75 and construction supervision - 100 communities 19.37 received new authorities. 16.1  A 2018 resolution of the Cabinet of Ministers of Ukraine marked the beginning for the transfer of 7.3 farmland from state ownership to the communal ownership of ATCs. Last year alone ATCs took communal ownership of 1,450.8 thousand Reforms in Ukraine hectares of land. 20162017 2018 2019 2016-2019: Irreversibility of Changes (billion hryvnas)  The Government also launched sectoral decentralisation IMPACT

 Government decentralisation is a long-term reform which not only drives changes in the territorial structure of the country and transfer of resources and authority to local communities, but also marks a shift in the paradigm of control and responsibility at all levels of 793/1,284 1,388 governance. The development of community territory infrastructure by the local self-Government authorities, the ability to make 2019 (01.06.2019) school buses were purchased, which independent economic management and development decisions is A network of new modern schools helped to provide access to high- bound to considerably improve the living standards in every locality in 2016-2019 - 793 hub schools and quality education to 69 thousand and in the entire country. 1,284 branches were built schoolchildren residing in the country.  Many communities have already been able to see the value of the reforms: ○ Communities gained access to additional resources and authority providing an impetus for realised development. Many towns, villages and hamlets started to restore roads, healthcare and  The Government started reorganisation of network of healthcare educational facilities which remained decrepit for decades. institutions throughout the entire territory of Ukraine. ○ Local Government is interested in boosting investment attractiveness of their territories for the beneﬁ t of local communities as the locally paid taxes are spent on improving the living standards of the local residents. ○ A number of various permits and business registration documents can now be obtained locally enabling the communities to better attract investments and promoting their 96 582 1,020 social and economic development. secondary hospital village outpatient clinics service vehicles districts and 76 hospital The Government initiated the construction of boards were created in a network of new modern primary healthcare 15 regions of Ukraine. institutions in countryside communities aiming to build 582 village outpatient clinics and purchase 1,020 service vehicles. 42

HUMAN CAPITAL DEVELOPMENT

Human capital development

Creating the necessary basic conditions for a Although a number of fundamental comfortable and secure life, opportunities for social and humanitarian reforms realizing the potential of citizens is one of the most have been actively implemented for important functions of the state. The qualitative some time, most of these reforms are development of human capital is the basis of the designed for long-term implementation. growth of the national economy and strengthening However, the ﬁ rst achievements of Ukraine’s competitive position in the world. and successfully met goals provide Reforms in Ukraine a foundation for sustainable 2016-2019: Human Capital development aims to improve the implementation of the reforms. Irreversibility of Changes quality of life and education, and to increase the productivity of labour. Pension Reform

The introduction of fair retirement MAIN TASKS IMPACT benefi ts aims to eliminate a signifi cant gap between special  Recalculation of pension amounts to better correspond to It is expected that the and ordinary pensions and ensure standards of living. implementation of the reform that citizens who pay contributions  Cancelling decrease in pensions for working pensioners. will eliminate the Pension Fund’s during their work life without  Recalculation of military pensions. defi cit in the mid-term. This will hiding incomes receive good  Increased duration of pensionable term of service required for support the macroeconomic compensation afterwards. future pensions. and fi nancial stability of the  Compulsory annual indexation of pensions. country. During 2018-2021, the In October 2017, before the  Elimination of the Pension Fund’s defi cit. defi cit of the Pension Fund launch of the reform, eight million should remain stable, with the pensioners (68% of all pensioners) gradual reduction starting from received the minimum pension 2022. amount, irrespective of their ACHIEVEMENTS pensionable term of service or The reform also aims to pensionable salary. A failure to  Starting October 1, 2017, pensions have been raised for 10.2 M stimulate young and middle- introduce necessary changes to pensioners. The average size of the increase was +561 UAH, or aged people to legalize their the pensions system could have +31% vs. 01/01/2017. income, which should result in led to the inability of the state to  On March 1st, 2019, the fi rst annual automatic pension indexation better pension conditions for guarantee pensions within 5 - 10 has been performed. Pensions increased for 8.9 M pensioners; them in the future. years.  Pensions were increased for 500 thousand military pensioners in 2018 and 455 thousand pensioners in 2019. The average size of the The introduction of the 2nd level The new law “On Amendments to increase was 1,476 UAH and 764 UAH, respectively. and improvement of the 3rd Some Legislative Acts of Ukraine level of the pension system will on the Increase of Pensions” provide a sustainable basis for became fully operational on larger pensions for current and January 1, 2018. This fi rst stage of FURTHER STEPS future generations, and act as a the reform is designed to stabilize long-term national investment the pension system, eliminate The second stage of the reform is the introduction of the 2nd level resource. pension levelling and ensure fair of the pension system (compulsory cumulative insurance) and the calculation of pensions in the improvement of the 3rd level (voluntary cumulative insurance). future. The Law also seeks to lay the basis for subsequent stages of Key legislation that needs to be adopted: reform, including the introduction  The draft law “On the compulsory cumulative pension insurance”. of compulsory pension insurance.  The draft law “On making amendments to certain laws of Ukraine on cumulative professional pension program”. 44

HUMAN CAPITAL DEVELOPMENT

MAIN TASKS

 Modernization of social payments system, impacting 20 M citizens.  Digitalization of social services.  Monetization of subsidies and social beneﬁ ts. Social Support  Improving of social support of war veterans. Reform  Implementation of a uniﬁ ed system of providing social services on a territorial community level.  Ensuring the upbringing of each Improvement of the eff ectiveness of social support child in the family or in the family- system aims to provide help to those who need it type conditions. Reforms in Ukraine the most, protect the poor and support them in the  Ensuring the safety and well-being 2016-2019: process of social integration. of each child. Irreversibility of Changes ACHIEVEMENTS FURTHER PLANS

Eff ective state social support of the population:  Adoption by the Parliament of the draft law  Monetization of subsidies started in January 2019, impacting 4.0 M “On verifi cation and monitoring of state households. disbursements”. The document aims to  14 social services centres in the “Transparent Offi ce” format opened since comprehensively regulate verifi cation of eligibility 2017, 15 more planned in 2019. for subsidies and other state aid.  The Ministry for Veterans Aff airs has been established in December 2018.  E-Social” system modernization, in particular reaching the test operation phase by the end of Development of social and rehabilitation services in territorial communities: 2019.  Local services for disabled persons transportation created, 49 special  Adoption of the state program for the prevention vehicles purchased during 2018-2019. and counteraction of domestic violence;  The adopted new State Construction Standard “Inclusivity of buildings”  Adoption of the state standards of social services, ensures implementation of inclusivity features for any new construction. that will be implemented on the local level.  The system of providing technical and other rehabilitation measures for  Adoption by the Parliament of the draft law “On disabled persons has been reformed based on “money follows the person” the amendments to the legislation regarding principle. the reform of the institutional system of children upbringing and childcare”. Adoption of the 2nd Protection of children’s rights: phase action plan of the respective National  120+ houses bought for the establishment of family-type orphanages, 1,300+ Strategy. fl ats bought for orphans.  Introducing cash benefi ts for housing and  Monthly payments of UAH 1,700 for the third and each next child introduced, communal services, ~160 thousand families participating.  Further increase in the number of communities  50+ thousand places created in kindergartens during 2017-2018. provided with specialized vehicles for the  183 child services were established in newly created communities. transportation of disabled persons,  Reform of day-care facilities (deinstitutionalization) is being implemented to ensure the right of children for care in a family or family-friendly settings. Since the implementation of the reform in 2017, 59 boarding schools have been optimized (22 eliminated).

Gender equality:  Adoption of the state program for ensuring equal rights and opportunities for women and men for 2018-2021.  The role of Governmental Commissioner for Gender Policy established, competition winner appointed in February 2018. THE MAIN PRIORITIES OF THE 46 REFORM ARE:

HUMAN CAPITAL  Creating a new health care system DEVELOPMENT based on medical insurance. This would require a comprehensive transformation of the system by means of creating and implementing a new model of funding, an eff ective and fair distribution of public funds and reduction of under-the-table payments, creating incentives for improving the quality of medical aid, and improving the effi ciency of its administration.

 Improving the accessibility of medicinal drugs and the effi ciency of using public funds by implementing reimbursement mechanisms and changes in the procurement system and price control.

Healthcare  Emergency and highly specialised medical care: providing timely and quality emergency care to the population of Ukraine, ensuring Total expenditure on Ukrainian health care, of treatment of medical emergencies patients and the Government combined, matches the which threaten the life of patients with average of many European countries. For many years blood circulation system diseases, medical services in Ukraine were provided free of and promoting the development of a charge, but that only existed on paper. transplantation service.

The transformation of the health care system is  Developing a public health system aimed at enabling equal to high-quality medical by focusing the health care system services to all citizens of Ukraine and re-building the on maintaining and promoting health, health care system around the patient. increasing longevity and improving quality of life, preventing diseases, Reforms in Ukraine The reform is based on the Law of Ukraine “On State extending active and working age, and 2016-2019: Financial Guarantees of Public Health Care” passed reducing the economic burden on the Irreversibility of Changes by the Ukrainian Parliament on 19 October 2017. health budget. MAIN TASKS ACHIEVEMENTS

Creating a new health care system based on Creating a new health care system based on The level of computerisation of health care medical insurance: medical insurance: institutions  Establishing a single national company for procurement of medical services.  On 30 March 2018 the National Health  Implementing the ‘money follows the Service of Ukraine was established. The newly patient’ principle. established service compensates the cost of  Decoupling of health care providers. the actually provided medical service according  Establishment of an electronic medical to the ‘money follows the patient’ principle. records database.  1,308 health care facilities entered into contracts 97%  Implementation of a health care services with the NHSU which paid 13.1 billion hryvnas to package guaranteed by the state. the facilities for the medical services rendered 4%  Medical education reform. in 2018-2019. During the national promotional campaign over 28 million Ukrainians chose their 2017 Q1 2019 Improving accessibility of medicinal drugs: physicians by signing declarations. Thanks to  Transparent and eff ective procurement of the reform the salaries of doctors and nurses in medications. certain health care institutions grew 2-3 times.  Implementing a reimbursement  Four-component Uniﬁ ed State Qualiﬁ cation mechanism for treatments for a number of Exam (USQE) for medical students has been “Aff ordable Medicine” Government programme common diseases. introduced.  Implementation of reference price formation. Improving the accessibility of medicinal drugs:

Emergency and highly specialised medical  Since 2015 state purchases of medicinal drugs care: has been done made through international  Creating operations control centres in the organizations. This helped reduce the purchase 6,000 >6.6 35 >1.8 regions. prices of some medicines dozens of times pharmacies million million billion Ukrainians prescriptions hryvnas  Providing additional material and technical while the number of medicine purchases Every third resources for the emergency medical care enabled by savings under some programs pharmacy in Beneﬁ ted from For which Amount of system. reached +85% of the targets. On 25 October Ukraine joined the programme patients reimbursements the programme since April 1, received for medication  Creation and development of regional 2018 SOE ‘Medical Procurements of Ukraine’ 2017 medication during the reperfusion networks. was established. The company is intended to during the programme  Development of the national replace international organisations purchasing program transplantation system. drugs on behalf of the Government.  As of April 1, 2019, the administration of the Development of public health system “Aff ordable Medicine” programme has been  Development of regional public health transferred to the NHSU. As of August 2019, systems. 6,179 pharmacies are participating in the  Promoting of immunoprophylaxis. programme, more than 4 million electronic  Building a national blood system. prescriptions have been released. 48 “Saving Lives” Project HUMAN CAPITAL DEVELOPMENT

ACHIEVEMENTS 26 13 angiographs angiographs Emergency and highly specialised medical care: purchased 2019  The number of 24/7/365 reperfusion centres grew 2017-2018 (planned) from 23 as at May 2016 to 40 as at Q1 2019 while the Government plans to purchase 13 additional angiographs.  The Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine on Health Care and Transplantation of Human Organs and Other Anatomical Materials” was passed creating the legal framework for the development of the national transplantation system. 24,000  13 operations control centres were established in Ukraine’s regions. drug-eluting stents were purchased using the state budget Public health system development: funds in 2018 (100% of the demand met)

 The Concept of Public Health System Development and National Action Plan adopted. Results: The number of stent  Of the 25 planned, 12 regional public health centres angioplasties performed on patients with have been established and are operating. acute myocardial infarction doubled.  National Action Plan on Non-communicable Diseases adopted to achieve the Global Sustainable Development Goals. The Ministry of Healthcare of Ukraine, together with other ministries, is launching a long-term national campaign to prevent non- communicable diseases. 10,774  Following a shift to three-year vaccine acquisition Reforms in Ukraine planning Ukraine has all the vaccines required by the 5,300 2016-2019: National Vaccination Calendar. Compared to 2016 Irreversibility of Changes the coverage of children under 1 year with certain preventative vaccinations grew 2-3 times. 2015 2018 FURTHER PLANS IMPACT

Creating a new health care system based Emergency and highly specialised medical The implementation of the healthcare system on medical insurance: care: transformation will result in improving the quality of public medical services, upgrading health  Approval of the guaranteed package  Emergency medical care: purchases of care institutions, improving the accessibility of of medical services: transparently new service vehicles with the necessary medicinal drugs, raising salaries of medical staff , defi ned volume of primary, secondary equipment, training courses on modern combating corruption and reducing hidden (specialized), tertiary (highly specialized), methods of providing pre-hospital payments in the healthcare system. emergency medical care and medicines, emergency care, and extension of which all citizens of Ukraine have the transition programme for paramedics. The long-term ambition of health reform is to right to receive in case of need.  Continued building of the reperfusion improve the living standards, extend the average  Electronic document exchange at the centre network. life expectancy and reduce mortality rate. primary level introduced in 2019.  Implementation of the second phase of the pilot project on changing the Transition to the system of professional mechanism of funding surgical treatment licensing of doctors: involving transplantation.  Ensuring the functioning of the Licensing Council and its Secretariat. Public health system development:  Conducting a full licensing exam for  Continued development of regional practitioners in the transitional period (5 public health centres. years).  Further harmonization of public health  Coordinating the development and legislation with EU legislation and best approval of professional standards for international practices. doctors.  Ensuring the epidemiological well-being of the population by reaching the Improving the accessibility of medicinal coverage of 95% of the population with drugs: preventive vaccinations.  Launching a national blood system that  Reducing the level of self-medication ensures the circulation of safe donor and increasing controlled therapy by a blood components at the country-wide doctor. level.  Improving the system of state regulation of prices for medicines.  Establishing a medical technology assessment agency as an independent advisory body to the Ministry of Healthcare of Ukraine in line with international best practices.  Development of the institutional capacities of SOE ‘Medical Procurements of Ukraine’. 50  Secondary education reform HUMAN CAPITAL (“New Ukrainian School”): school DEVELOPMENT will be a place where children acquire not only knowledge, but also the ability to apply it as well as core values to guide them in the contemporary world. In addition to being an educational institution, it will also provide a safe development environment where children will Science and learn to communicate with one another. Education  Modernisation of career and technical education: the facilities and equipment of CTE institutions will be upgraded along with the For many years Ukrainian science failed to meet curriculum to better refl ect the the modern needs of the individual, society, and labour market demands of today. economy. Students at Ukrainian schools and  Higher education and adult universities mostly gain a body of knowledge education reform: improvement without being aware of how it can help them with and updating of the curriculum, self-realization. Furthermore, the learning process at a rethink of fi nancial ties and vocational and higher education institutions hardly economic relations, strengthening correlates with modern-day needs of the labour institutional capacity both at the market. level of specifi c higher education institutions and at the entire This is why a systemic transformation of this area has industry level. started with the main goal of achieving a new quality  Creation of a new system for of education on all levels. The reform is aimed at research management and funding: transforming Ukrainian education into an innovative The reform aims to stop the environment where school and university students stagnation in science, to formulate acquire key competences required for a successful a demand for quality scientifi c life in the contemporary world, and where academics training, to increase the effi ciency will have all the opportunities and resources they of research and development in the need for their work. fi eld of basic and applied sciences, to narrow the gap between research Reforms in Ukraine A large-scale reform of Ukrainian education became and implementation of their results, 2016-2019: possible with the adoption of the framework Law of to integrate higher education and Irreversibility of Changes Ukraine “On Education”. The main priorities of the science of Ukraine into the world reform are: science. MAIN TASKS ACHIEVEMENTS

Secondary education reform: Secondary education reform:  A new content of education aimed at building  461.3 thousand fi rst-grade pupils who started school on 1 September 2018 benefi ted from the competences (economic competence, critical thinking, adoption of the “New Ukrainian School” standard. The planned investments into improving emotional intelligence etc.). the quality of secondary education for 2018-2019 amount 6.8 billion hryvnas, which helped to  Implementation of project work and learning through purchase modern furniture and over 50 thousand equipment units (projectors, tablet PCs etc.). doing.  The State Service for Education Quality and 10 of its territorial bodies were established, which  Implementation of cooperative pedagogy in secondary will enable, among other matters, to carry out an institutional audit of schools. education.  Introduction of contests for school head teachers and Improvement of teacher Enhancement of education extension of their capacities. qualifi cation accessibility in rural areas  Establishment of the State Service of Education Quality to (hub schools/affi liates) provide institutional auditing of education institutions. 41.5 105 Modernisation of career and technical education: thou. teachers thou. teachers 137/360 793/1,284

 Diversifi cation of funding sources of CTE institutions and 2018 including 22 thou. 2019 planned2016 2019 (01.06.2019) upgrading their facilities and equipment. – 1 grade  Modernizing vocational (technical) education and the introduction of dual education system elements. Higher education and adult education reform: Improvements in the quality of teaching School bus  Creation of a system for internal education quality control Raising teacher salaries general science and purchases at universities. mathematics  Adoption of new standards of higher education based on a schools received competence approach. 1,925/3,573 3,655.3/6,782.6 equipment for biology +1,388 352 5.2 (590 units), geography  Abandonment of manual distribution of state order in 2016Min/max 2019 Min/max thousand (364), mathematics 2016-2018 2019 (planned salary hryvnas salary hryvnas (558), physics (511), higher education. by the end and chemistry (545) of 2019)  Availability of a functional service to control the quality of classrooms higher education.  Ensuring academic integrity as the key principle of higher Inclusive education. Expenditure on Inclusive learning learning Creation of a new system for research management and funding: inclusive classes  Gradual increase of general and grant fi nancing of science. created since 209.5 504.5 8.4 2016  Establishment of a new system for evaluating the thousand mln. hryvnas mln. hryvnas performance of scientifi c institutions and scientifi c State budget 2018 State budget 2019 activities of higher education institutions based on Pupils with special educational needs for the fi rst time in 2019 directed international best practices. +9.1 gained access to secondary education 37.2 towards inclusive learning of Introducing fi nancial support for the scientifi c activity of (from 2,720 pupils in 2015/2106 preschool children  thousand to 11,860 in 2018/2019) mln. hryvnas higher education institutions.  State support for scientifi c activity of young scientists.  Implementation of the strategy of Ukraine’s accession to Inclusive learning the European Research Area and systematic use of its Resource Centres were 575 created and equipped capabilities. during 2018-2019 Innovation and technology transfer: 52  Preparation of the strategic document of the state policy in the area of innovations and technology HUMAN CAPITAL transfer: The Strategy of development of the area DEVELOPMENT of innovative activity for the period till 2030 is approved, the action plan for its implementation is ACHIEVEMENTS being prepared.  Improvement of the procedure for registration of Modernisation of career and technical education: technologies and their components: an electronic  Starting in 2016 the funding of CTE institutions is partially system of registration of technologies with shared with local communities. 100 training centres with remote access has been introduced and the list of industrial specialisation created at those institutions’ facilities. necessary documents has been reduced. 71 competence-based CTE standards were approved. Duel education elements were implemented in 198 education SCIENCE institutions with over 800 employers involved in the organisation of practical training. The National Council for Science and Technology Development was Higher education and adult education reform: established  73 new standards for bachelor training and 27 standards for master training approved. The share of state order distributed according to the targeted principle grew up to 84.5%. The National Research  Test operation of the fi rst phase of National Repository of Fund established Academic Texts started.  The new staff of the National Agency for Higher Education The State Budget 2019 provides in grant Quality Assurance approved. support of fundamental and applied  Law of Ukraine “On Professional Pre-higher Education” 262.4 research based on the results of open mln hryvnas adopted. competitions

Creation of a new system for research management and funding:  The National Council of Ukraine for Science and Technology by 1.63 Development, an advisory body to ensure coordination of all times stakeholders in the formulation and implementation of public Increase in the amount of scholarships and funding for research policy in the fi eld of science was established. The Government for young scientists also created the National Research Fund tasked with grant support of the specifi c scientifi c projects with the budget of 58,221.7 94,869.5 262 million hryvnas for 2019. thousand hryvnas thousand hryvnas  15 inter-university centres of collective use of laboratory 2017 2018 equipment created at higher educational institutions. State Reforms in Ukraine certifi cation of scientifi c institutions started. Funding of priority Competition for the best Competition for the best research and development research and development 2016-2019: areas of scientifi c and technical activity of higher education projects among young talent – projects among young talent – Irreversibility of Changes institutions introduced. Ukraine received a separate funding 39,428.8 thousand hryvnas. 68,715.1 thousand hryvnas. Support of young talent Support of young talent window for Erasmus+ Program contests in 2019–2020. (scholarships and grants) – (scholarships and grants) – 18,792.9 thousand hryvnas 26,154.4 thousand hryvnas FURTHER PLANS IMPACT

Secondary education reform: A comprehensive reform of the industry is intended to improve its technical, ﬁ nancial, and  Adoption of the State Standard of Basic Secondary Education administrative support as well as enhance the based on a competence approach. effi ciency of managing education and research  A new teacher certiﬁ cation procedure aimed to introduce institutions. contemporary forms and methods of motivating teachers to undergo professional development was tested. Secondary and tertiary school will be able to  The National Educational Platform was populated with electronic train active, resourceful and responsible citizens. content. The content of career and technical education  The Law of Ukraine “On Complete Secondary Education” was and higher education will consider the needs of adopted. employers.

Modernisation of career and technical education: These factors will help to boost the country’s competitiveness, increase the share of high-tech  Adoption of the law “On Vocational (Career and Technical) industries in the economy, and enlarge the Education”. contribution of research and development into  Further creation of contemporary training centres with industrial Ukraine’s GDP. specialisation supported with employers’ investments.  Creating conditions for further implementation of dual education.

Higher education and adult education reform:

 Updating higher education standards in consideration of the labour market demands.  Upgrading the physical facilities of higher education institutions.  Drafting of the law “On Adult Education” to provide a legal framework for life-long learning.  Establishing a new mechanism of state budget funds allocation among higher education institutions.

Creation of a new system for research management and funding:

 Conducting state attestation of scientifi c institutions and institutions of higher education in terms of conducting their scientifi c activities.  Increase in fi nancial support for research projects and scholarships, as well as awards for young scientists.  Updating the system of priorities of science development.  Integration into priority European research infrastructures for Ukraine. 54 ACHIEVEMENTS

HUMAN CAPITAL  The Ukrainian Book Institute was established. The DEVELOPMENT Institute is tasked with transforming the domestic publishing industry into a European-style cultural industry, promoting book reading in Ukraine, support book publishing, provide incentives for translation, and contribute to popularisation of Ukrainian literature abroad. Participation in 10 international book fairs is scheduled for 2019 (in 2016 Ukraine took part in only 1 fair). 2 mln. 390 thousand copies were purchased to replenish library holdings.  Establishment of the Ukrainian Cultural Fund solved an urgent problem in creating a transparent budget support tool for cultural initiatives on a competitive basis, facilitated the creation of a developed ecosystem of culture and creativity in Ukraine. 769 projects were already supported by the Fund.  The Law of Ukraine “On State Support of Cinematography in Ukraine”, which incorporates best European practices, was adopted in 2017. State funding of the industry grew substantially. In 2018 35 Ukrainian fi lms were released on the big screen (compared to 8 fi lms in 2015) whereas the number of Culture viewers of Ukrainian fi lms in cinemas grew from 324 thousand in 2015 to 2,454 thousand in 2018.  2018 marked the commencement of full-scale operation of the Ukrainian Institute - a management MAIN TASKS structure within the Foreign Ministry of Ukraine tasked with representing Ukrainian culture and  Effi cient management in the cultural building a positive image of the country abroad. sector.  In April 2019 the Parliament passed the law “On  Development and popularisation of Ensuring the Functioning of the Ukrainian Language Ukrainian language. as the State Language”. State programmes for the  Creation of high-quality cultural and development and popularisation of the Ukrainian Reforms in Ukraine art products and development of language will be elaborated by the Ministry of 2016-2019: creative industries. Culture. Irreversibility of Changes Youth policy and sports

MAIN TASKS

 Provision of patriotic education.  Formation of a healthy nation.  Creating new opportunities for young people.  Promoting a positive image of Ukraine in the world sports.

ACHIEVEMENTS

Provision of patriotic education: Creating new opportunities for young people:  During 2015-2018, more than 150 international  The implementation of the Youth-2020 Pact since 2016 has been joined by 137 employers-partners and all-Ukrainian events were held, with the who have created 35,083 places for youth internships and employment. 614 partnerships have been coverage of more than 850 thousand people. established between employers and the education sector.  A competition was launched to identify  In 2016, youth exchanges between Ukraine and Poland and Ukraine and Lithuania were initiated. 247 projects of patriotic education developed by joint projects have been implemented involving about 8,000 young people. civil society institutions.  Monitoring of the situation of young people in Ukraine has started.  National exchange of students between diff erent regions of Ukraine “GOxChange” started. Formation of a healthy nation:  In 2016-2018, over UAH 1 bn. was allocated Promoting a positive image of Ukraine in the world sports: through the State Regional Development Fund  An experiment has been introduced to involve sports federations in organizing and conducting for the construction and reconstruction of sporting events, which lays the groundwork for the autonomous development of sports in sports facilities in the regions, including: accordance with world best practices. ○ In 2016 - 32 projects.  Criteria for transparent allocation of budget funds between Olympic sports have been approved. ○ In 2017 - 100 projects.  The amount of rewards, scholarships, allowances for athletes and their coaches has been ○ In 2018 - 137 projects. increased, including a double increase for prize winners and champions of World and European  Budget ﬁ nancing for the construction of Championships. multifunctional sports palaces and other  In 2016-2018, 4 new state Olympic Training Centres were opened. investments in major sports facilities:  The Anti-Doping Supervisory Board was established, the Anti-Doping Rules of the National ○ 2018 - UAH 150 mln. Anti-Doping Centre approved. The Council of Europe Anti-Doping Convention and the UNESCO ○ 2019 - UAH 600 mln. Convention, as well as the World Anti-Doping Code, ratiﬁ ed by Ukraine. 56

RULE OF LAW AND FIGHT AGAINST CORRUPTION

Rule of law and ﬁ ght against corruption

The rule of law is critical to sustainable economic and society to corruption, ensuring the social development. The rule of law is a multifaceted inevitability of responsibility for concept covering many areas: from personal corruption and corruption-related safety and property rights to confl ict resolution off enses. and government checks and balances and the fi ght against corruption. Eff ective prevention and Ensuring that Ukraine’s law enforcement counteraction of corruption require proper legislative agencies as a whole operate eff ectively, framework, eff ective activity and interaction of together with the effi cient identifi cation, anti-corruption bodies. investigation and management of assets derived from corruption and other The overall purpose of anti-corruption reform is to crimes, are all essential components shape properly the state anti-corruption policy, to of the eff ective system to fi ght formulate virtuous behavior of government and local corruption and to assert the rule of law. Reforms in Ukraine self-government offi cials, to ensure transparency of By exposing corruption schemes, the 2016-2019: the state bodies activities, to identify and minimize Government can save signifi cant budget Irreversibility of Changes current corruption and human rights risks in various funds and use them to foster national spheres of corruption, the negative attitude of prosperity. Preventing and Combating Corruption

MAIN TASKS Agency or ARMA). In June 2018 NATIONAL ANTI-CORRUPTION BUREAU OF UKRAINE Ukraine’s Parliament adopted the Law  Minimize corruption risks in on High Anti-Corruption Court. It was Phase of Legal Proceedings the public sector that threaten followed by amendments to the Law functioning of the state, protection on the Judicial System and the Status of human rights and freedoms. of Judges to defi ne the jurisdiction of  To create in the society an appeals in existing corruption-related atmosphere of intolerance to cases. By this amendment, appeals in 196 112 28 corruption and a positive attitude corruption cases fi led by the National Submitted to court Under review Individuals sentenced towards anti-corruption measures Anti-Corruption Bureau cannot be undertaken by the Government. considered by other courts except  Strengthen the institutional capacity the HACC Appeals Chamber. All cases of anti-corruption bodies. regarding top offi cials will be handled 45 39  To strengthen the system of by the HACC. On August 2, 2018 The Proceedings not initiated Cases resolved Government control over political Higher Qualifi cations Commission Reasons for review delays: Details of judges’ decisions: parties’ fi nancing. announced and held a competition for 3: Appeal review of complaint 30: defendant found guilty regarding the return of the bill of including plea deals

 Increase the level of integrity of the 39 vacant positions of judges at the indictment 7: decisions on relief from criminal governmental bodies and local self- High Anti-Corruption Court, of which to: 4: New proceedings initiated in April liability government offi cials and increase the Supreme Anticorruption Court - 27 5: Trial participants failed to show 1: decision on closing criminal public confi dence in the service at judges; The Court of Appeal of the 14: Review delayed for other reasons proceedings the positions in public service and High Anti-Corruption Court - 12 judges. 3: Prolonged formation of the judicial 1: decision reversed by the appeal court local self-government. In April 2019, 27 judges of the High panel 13: Anti-Corruption Court and 11 judges of No judges available 3: Problems with establishing ACHIEVEMENTS The Court of Appeal of the High Anti- jurisdiction Corruption Court were sworn in. In May Development of anti-corruption 2019, the Chairman of the High Anti- institutions Corruption Court and the Chairman ARMA has detected assets in Ukraine and abroad to arrest Over 2015–2019 new anti-corruption of The Court of Appeal of the High and confi scation institutions were created in Ukraine, Anti-Corruption Court were elected. Asset 2017 2018 1st half 2019 Corporate rights share in the authorized including the National Anticorruption HACC is expected to begin operations 0 21 160 5 546 capital of companies, UAH million bureau of Ukraine (NABU), the in September 2019. Securities, UAH million 0 557 50 Specialized Anticorruption Prosecutor’s The above-mentioned institutions are Real estate 782 7 093 3 595 offi ce (SAPO), acting as an independent called to ensure irreversible criminal Land plots, units 329 4 457 2 465 Vehicles, units 14 3 758 1 093 structural unit within the structure of and administrative responsibility as well Other property (goods), units 0 2 522 46 034 Prosecutor General’s Offi ce (PGO), as punishment for corrupt off ences Agricultural machinery, units 4 950 202 Ownership of rights to inventions, 0 848 66 State Investigation Bureau (SIB), and corruption-related off ences, trademarks, units. the National Agency for Corruption compensation for losses and other Cash: UAH, million 0 358 310 Prevention (NACP), and the National damage, and to do what is appropriate US $ million 0 98 7 Agency of Ukraine for fi nding, tracing for them to be doing in order to restore Euro, million 0 2 7 and management of assets derived the rights and lawful interests of from corruption and other crimes persons damaged by corruption. (Asset Recovery and Management As of 2018, the fi gure was 472 decisions. 58 In the fi rst half of 2019, 1.5 times more decisions were made as to the results of RULE OF LAW the full verifi cation of the declarations of AND FIGHT AGAINST the subjects of the declaration than for CORRUPTION the whole of 2018. Thus, the rate of initiation and completion of full year checks by one ACHIEVEMENTS authorized person is planned to bring up to 100 checks per year, as is done in the Social transparency and accountability increase countries of the European Union. According to the results of the full  Electronic declaring and electronic state registers verifi cation of the declarations of the subjects of declaring on the grounds The electronic asset declaration system was of crime, 54 substantiated conclusions launched enabling citizens to inspect online were approved. public offi cials’ earnings and assets and helping State bodies and local authorities the authorities to expose corruption. First and have established secure channels of foremost, the system guarantees public control communication (through the offi cial over the wealth of public servants paid, among website, telephone lines, e-mail box) other sources, from the state budget. Secondly, for reporting corruption. In 2016, 368 the system contributes to forming an oppositional messages were received through these public response to and an overall negative communication channels, in 2017 - 748, perception of manifestations of corruption. The in 2018 - 13 237, in Q1 and Q2 2019 - system provides a source of information for 2248. exposing corruption by both specially authorised In 2019, the NAPC has put into operation anti-corruption agencies and public activists. the information and telecommunication The institutional capacity of the National Agency system “Unifi ed State Register of to carry out full scrutiny of the declarations of Corrupt or Corrupt-related Off enses”. declarations entities continues to strengthen. Since February 04, 2019 NAPC has been In 2019, a logical and arithmetic control is creating and maintaining a Register, implemented, which is carried out automatically: which allows any user to receive online internal verifi cation of the declaration of the information. The operation of the subject of declaration and external (with e-declaration control system involves information of the relevant registers and automatic information exchange with 16 databases). registries and databases of Government An automated exchange of information with agencies of Ukraine. 13 state registers and information bases out of Reforms in Ukraine 16 required is carried out, by means of which The Government intends to initiate 2016-2019: in the fi rst half of 2019 1020 full checks of the restoration of the legal norm on Irreversibility of Changes declarations of the subjects of declaring were criminal liability for illicit enrichment. initiated and conducted.  Financing of political parties by the state Number of declarations submitted through the system (thousand declarations) The Law of Ukraine “On Amendment of Certain Legislative Acts of Ukraine on Prevention and Countering Political Corruption” was put into eff ect with regards to its provisions on state fi nancing of statutory 3,364 activities of parliamentary political parties. Over 3 years the number of reports submitted by political parties 2,457 regarding their property, income, expenses and fi nancial liabilities grew from 195 in 2016 to 276 in 2018. The number of administrative off ence reports on violations of legislation on the prevention of political 1,353 corruption has grown to 1,386 since 2016.

 Ultimate beneﬁ cial owners disclosure 112

Ukraine has also disclosed the information on ultimate benefi cial 2016 2017 2018 2019 owners (UBO) in the companies register. Companies that run business, carry out at least one registration action per year on average. This wide information provide an opportunity for a deeper analysis of the The amount of state budget allocation for fi nancing of structure of ownership of a company. political parties by the state (million hryvnas) At present, the technical administrator is taking steps to update the software of the Unifi ed State Register of Legal Entities, Individual Entrepreneurs and Public Formations in order to provide structured 565.7 513.7 information on the ultimate benefi cial owners of the legal entity and 513.7 search for relationships between legal entities and their founders (participants), fi nal benefi cial owners (controllers), heads of legal 442.4 entities, visualization of all direct and indirect links, which also allowed 442.4 391.0 casting to ensure integration with Global register on benefi cial owners of Open Ownership. Technical administrator of the register works on implementation of BODS (benefi cial ownership data standard). Ukrainian authorities in cooperation with civil society and international 251.9 experts are also working towards a very ambitious goal - to draft a concept on verifi cation of information on UBO. This practice is absent in 161.8 most countries globally.

 Improving standards of integrity

Introduced a free online Confl ict of Interest online course on Prometheus Online Prometheus (prometheus.org.ua), aimed at raising 2016 2017 2018 2019 standards of integrity in preventing and resolving confl icts of interest, and other restrictions and obligations stipulated by the Law of Ukraine Approved for the year “On Prevention of Corruption”. Since the beginning of the course, more Cash expenses for the year than 40,000 students have taken part in it. Cash expenses for the fi rst half of 2019 of the level of enforcement. The effi ciency of 60 enforcement of court decisions on alimony and salaries was improved. In 2018 state RULE OF LAW enforcement offi cers collected UAH 4.6 AND FIGHT AGAINST billion in favour of 555 thousands children CORRUPTION and UAH 461.4 million for payment of salaries. Data on debtors for alimony and salary is disclosed in the Unifi ed Register of Debtors. As of beginning of 2019 there are 146 private enforcement offi cers registered in the Unifi ed Justice Sector Register of Private Enforcement Offi cers of Reforms Ukraine.  Provision of Free Legal Aid In 2011, a free legal aid system was introduced in Ukraine, which as of 2019 has 535 access MAIN TASKS points to free legal aid and established eff ective cooperation with other institutions providing  To reform the system of enforcement of judicial rulings, free legal aid. In total, over 22 million Ukrainians  Ensure creation of a fl exible free legal aid provision (about 52% of the total population) are system, entitled to receive the services of a lawyer or  To increase transparency and effi ciency of the judiciary an employee of the free legal aid system at the and prosecution sectors in Ukraine expense of the state. From 1 July 2015 to 1 July 2019, 1 627 430 persons received legal advice and clarifi cation free of charge, and 14 909 ACHIEVEMENTS persons were referred to partner institutions. In addition, free secondary legal aid centers Judiciary sub-sector reforms issued 609,274 warrants to attorneys and orders for centers’ staff to protect the rights of The Justice Sector Reform Strategy and Action Plan individuals in criminal cases and to represent 2015-2020 (JSRSAP) foresees a wide- ranging reform of interests in civil and administrative matters. justice sector in Ukraine, elaborating policy interventions with complex results-oriented indicators.  Penitentiary and probation system On August 2, 2018, the HQCJU announced a competition On March 29, 2018, the decision of the for 78 vacant positions of judges of cassation courts collegium of the Ministry of Justice of Ukraine within the Supreme Court. On May 7, 2019 75 judges were approved the passport of the reform of the appointed by the President. The staffi ng of the Supreme penitentiary system and probation for 2018- Court has reached 193 judges out of possible 200. 2021. One of the strategic goals is to create a Reforms in Ukraine system of reintegration to provide a proper 2016-2019:  Enforcement of court and other bodies decisions environment that encourages people to live Irreversibility of Changes New developments were introduced in the system of without committing off enses. enforcement of decisions which resulted in increase The ultimate goal of reforming the penitentiary raised, the procedure for admission to the magistracy IMPACT system and probation is to improve the security of has been improved by the introduction of the Single society by correcting and re-socializing those who Professional Entrance Test and the Single Entrance  More effi cient use of the state funds have been in confl ict with the law. Exam, the refusal of the state order for the external and their allocation for specifi c, Within the framework of the reform of the form of education. priority needs penitentiary system and probation, the  Eliminating corruption risks in the Administration of the State Criminal Enforcement Prosecution sub-sector reform operations of executive Government Service of Ukraine, State Institution «Probation agencies and state companies, Center» and State Institution «Health Center of the As a result of the reform, the prosecutor’s offi ces strengthening civil oversight and State Penal Enforcement Service of Ukraine» were have lost the function of pre-trial investigation but control over their activities formed as independent institutions coordinated by temporarily continue to carry it out during transitional  Laying the foundations for the Deputy Minister of Justice of Ukraine. period (until 20.11.2019 but only in criminal proceedings transparent political party operations One of the key areas of reform of the State opened before 20.11.2017). On November 27, 2018 and their monitoring; better control Penitentiary Service of Ukraine is the creation the State Bureau of Investigations has started its and oversight of funding for political of a Unifi ed Register of Convicts and Persons functionality. In this regard, in the structure of the parties and election campaigns Imprisoned and the creation of a reintegration Offi ce of the Prosecutor General of Ukraine the  Strengthening the institutional system to provide a proper environment that Department of Organization and Procedural Guidance infrastructure and the capacity of encourages a person to live without committing for the Pre-trial Investigation of Criminal Off enses anti-corruption agencies for policy crimes. Investigated by the State Bureau of Investigations planning and implementation, and The innovation of the criminal process was the was created. This Department on SBI supervision will ensuring effi cient operation of anti- preparation and fi ling of probation, which would carry out obligations with regard to observance of corruption bodies facilitate the election by the court of the criminal the fulfi lment of laws by operational units of the SBI.  Making decisions for anti-corruption punishment, necessary and suffi cient for correcting By now, work is underway to develop interagency policies based on the analysis of the off ender, expanding the practice of applying regulatory and methodological documents that reliable data on corruption and factors punishments, alternative to imprisonment. regulate issues of interaction with the SBI. One of the that enable corruption As a result of the activities of the United Nations main priorities of the work of the Department on SBI  Improved positions in international Special Monitoring Mission on Human Rights in supervision is to provide eff ective procedural guidance anti-corruption rankings Ukraine, from 2014 to 2018 there were no cases of in criminal proceedings on corruption-related crimes.  Improved national image and accusations against DCAF personnel for repressing As a result since establishment of the Department on increased confi dence of international actions against prisoners / prisoners who had SBI supervision 21 indictments were sent to courts in partners and investors in Ukraine complained about their misuse or abuse. improper corruption related off ences. During 2018, prosecutors  Reduced tolerance to corruption conditions of detention. (without the military prosecution) have sent 299 in the society and increased public indictments against 395 people to the court. support of the state anti-corruption  Legal education and legal awareness policies and initiatives. Since 2017, the project “I HAVE THE RIGHT!” Is Ukraine has adopted the law on misdemeanour. The the fi rst in Europe a nationwide advocacy project. category of misdemeanour will include 126 criminal More than 2 million people received legal assistance off ences. The institute of misdemeanour and simplifi ed under the project. investigation procedures were introduced with the In order to improve the quality of legal education, purpose to relief investigators from unnecessary a draft Concept for the Development of Legal workload, which will allow them to concentrate on Education was developed. Requirements for investigations of crimes. admission to the bachelor’s degree have been 62

SECURITY AND DEFENSE

Security and defense

The desire to feel safe is among the strongest The development of defence aspirations of Ukrainians today. Reliable protection capabilities is carried out in accordance of sovereignty and restoration of territorial integrity with Euro-Atlantic standards and the of Ukraine are key prerequisites for ensuring a capacities of the Ministry of Defence of healthy development of the Ukrainian state. The Ukraine, the Armed Forces of Ukraine, Government is committed to continuing enhancing and other components of the defence the country’s potential of countering various forms forces are developed to adequately of external aggression including a comprehensive respond to military threats to the support of the capabilities of the Ukrainian Armed national security, Ukraine’s sovereignty, Forces. In addition to that the Government is tasked its territorial integrity, inviolability of its with adequate response to any and all challenges borders, contribute to global peace and by minimising risks for citizens’ life and property - in security and meet the NATO ascension particular, by implementing measures aimed at criteria. Reforms in Ukraine infringement of their rights, preventing crime and 2016-2019: adequate response to emergencies, maintaining Irreversibility of Changes safety of public space and road traffi c. Defence Reform

The Government’s unconditional priority MAIN TASKS is maintaining the state’s ability to military sphere, protection of Ukraine, withstand diff erent forms of foreign  Implementing a shift to a joint its sovereignty, territorial integrity and aggression, including by thoroughly command of defence forces. Creating territorial integrity, borders, support building the capacities of the Armed a radically improved new system of for international peace and security. Forces. At the same time a modern commanding defence forces based  Improving the system of defence confl ict aff ects many more facets of on a new allocation of authority, and budget planning and creating social life instead of being only limited functions, responsibilities, and an integrated risk management to the military component. accountability on a strategic and system. operational level based on the best  Implementing an open and This exactly why Ukraine chose a practices of NATO member states. transparent electronic procurement strategic course on becoming a full-  Ensuring eff ective communications system for all public purchases, fl edged member of the European Union capacity on a strategic, operational, planning Government defence and NATO. Ukraine is actively adopting and tactical level of a formation. contracts for a three-year period NATO standards - in particular, the  Ensuring the elaboration and with the possibility of annual defence reform is being implemented implementation of an eff ective adjustment of the order numbers. in line with the principles and values policy and a resource planning and  Implementing advanced technology shared by NATO member states. management system in the defence in the production of military Ukraine’s strategic goal in the area of sector. equipment, creating end-to-end security and defence is integration into  Ensuring operational (battle and cycles for the development and the Euro-Atlantic security framework special) capabilities of the defence production of key weaponry, and, primarily, into the North-Atlantic forces. military and special machinery, and Treaty Organization (NATO). In addition  Development, in accordance with updating the military infrastructure to that the defence reform pivots on a Euro-Atlantic norms and criteria of management system. vision approved by Ukraine’s Military NATO membership, capabilities of Doctrine for preparing the state for a the Ministry of Defense of Ukraine, potential armed confl ict and applying Armed Forces of Ukraine and other military force to defend its sovereignty, components of the defense forces territorial integrity, and other vital necessary for adequate response national interests. to threats to national security in the end of 2018 the share of civilian personnel of the 64 Ministry of Defence administration amounted 82% with only 18% servicemen. SECURITY The Ministry of Defence of Ukraine is empowered AND DEFENSE to shape the state defence policy whereas the General Staff - to implement it.

ACHIEVEMENTS Eff ective resource planning and management

Joint command of defence forces The Government continues implementing a new system of defence planning based on enhancing The chief element of the new system of command is an effi cient capacities: structure of the Ministry of Defence and the General Staff of the  The organizational basis was determined and Armed Forces build in line with NATO standards and meeting a defense review was started to assess the the principles of eff ective democratic civilian control of defence state and readiness of the Armed Forces and fi eld. The Government continues the reform of the Ministry other components of the defense forces to of Defence aiming to streamline the number of staff and the fulfi ll the tasks of the state defense, the state organisation of structural units. The reform included a revision of of their personnel, fi nancial, logistical and functions, accountability, and scope of authority associated with other types of security, as well as available responding to challenges in managing defence forces and aimed capabilities for eff ective responding to at improving coordination between the MoD and the General challenges and threats in the military fi eld. Staff of the Armed Forces. According to the results of the defense review, On February 21, 2019, the Law of Ukraine “On Amendments to it is expected to determine a promising model the Constitution of Ukraine (Regarding the Strategic Course of the Armed Forces and other components of the State for Acquiring Full Membership of Ukraine in the of the defense forces, taking into account real European Union and in the North Atlantic Treaty Organization)” and potential threats in the military sphere came into force. and fi nancial and economic capabilities of the The Constitution of Ukraine enshrines the civilizational choice, the state. European identity of the Ukrainian people and the irreversibility  Programme and project management is being of the strategic course of the state for the acquisition of full introduced. membership of Ukraine in the European Union and in the Organization of the North Atlantic Treaty Organization. This involves management of risks to mitigate the Ukraine is actively implementing NATO standards in its Armed threats caused by poor managerial decisions and Forces. In particular, these eff orts include reorganization of the irreparable losses while using budget funds. structural units of the General Staff of the Armed Forces in line A new system of procuring weapons and military with the principles and values shared by NATO member states. equipment (WME) and other materials is being The intensity of combat training of servicemen is being increased deployed. The Ministry of Defence was authorised with an active instruction input from NATO member states and to import weapons from foreign partners. A three- Reforms in Ukraine partners. year WME procurement and modernization cycle 2016-2019: The Government continues implementing democratic public within the scope of the state defence contract was Irreversibility of Changes civilian control over the Armed Forces. The civil command of introduced. the Ministry of Defence of Ukraine was appointed, and as at the Enhancing operational capacities of Supply of samples of new and Accepted (supply) Armed Forces defence forces upgraded weapons and military samples of weapons and military equipment to the Armed Forces of equipment (units) The 2028 Development Strategy Ukraine (thousand units) of Ukraine’s Defence Industry, which defi nes its strategic areas of 21 development, was adopted. These areas include, inter alia, upgrading and 17 10.8 enhancing the productive capacity of 13 enterprises in the defence industry. 7.6 Ukraine is extensively cooperating with and gravitating towards NATO. 2.7 Politically, NATO offi cially recognized Ukraine’s Alliance aspirations in 2018. Start of Start of In their Brussels Summit Declaration Government 2017 2018 Government 2017 2018 on July 11, 2018, NATO member states tenure tenure acknowledged Ukraine’s prospects of NATO membership.

National manufacturing facilities set up Samples of weapons and military Weapons and military equipment production of missiles and ammunition. equipment are allowed to operate repaired by the defense industry of Ukraine and transferred to military The Joint Operational Headquarters, the units (units) Special Operations Forces, and the Air Assault Forces were formed within the 963 979 923 Armed Forces of Ukraine. 50 The Government continues eff orts aimed at restoring the capabilities of the Ukrainian navy. The newly formed 29 22 Naval Command and the Marine Corps Command are increasing their capabilities. The Ukrainian Navy’s Missions Centre is under construction as Start of Start of part of the eff orts aimed at rebuilding Government 2017 2018 Government 2017 2018 the base infrastructure of the Ukrainian tenure tenure Navy on the coasts of the Black and Azov Seas and the creation of a modern management system together with the engineering service of the U.S. Sixth Fleet. 66

SECURITY AND DEFENSE

ACHIEVEMENTS

Integrated logistics and medical support systems  “Senior company (battery) combat medic” and “Squad combat medic” Two functional vertical structures of the integrated positions introduced. logistics system were formed and now undergo  Combat medic training commenced capability development: planning the logistical support at the tactical medicine centre in and direct management of logistical assets while accordance with NATO standards. organising logistical support. The new food and nutrition  The procedure of setting up and system which relies on the Food Catalogue was eff ecting medical evacuation and the adopted at 73 military units. mechanism for providing medical care to servicemen at civilian health care Over 100 new materiel items were introduced with institutions were defi ned. the material support norms revised and updated. The  Qualifi ed medical care was brought Armed Forces personnel is fully provided with combat as closely as possible to the wounded uniforms. to reduce lethality during medical evacuation and while providing Reforms in Ukraine The system of the Armed Forces medical support and medical care. 2016-2019: other defence forces components are being improved Irreversibility of Changes in accordance with NATO principles and standards - in particular: Professionalizing defence forces and creating the requisite IMPACT military reserve force  Ukraine is extensively cooperating with and gravitating The Armed Forces gained a unique experience while carrying towards NATO. In their Brussels Summit Declaration out six phases of partial mobilization during which 217 thousand on July 11, 2018, NATO member states acknowledged people eligible for military service (including over 35 thousand Ukraine’s prospects of NATO membership. volunteers) were drafted and 8.5 thousand equipment items  Ukraine is actively implementing NATO standards in were commandeered from the national economy of Ukraine. The its Armed Forces, In particular, these eff orts include number of contract servicemen reached 166 thousand. At present reorganization of the structural units of the General the share of soldiers and sergeants serving under contract is 85%. Staff of the Armed Forces in line with the principles and values shared by NATO member states. The intensity of The Armed Forces’ gender policies are changing to comply combat training of servicemen is being increased with an with the modern standards. Among other matters, this includes active instruction input from NATO member states and introduction of gender advisors in the Armed Forces of Ukraine partners. and other military formations. Equal rights and opportunities for  The defence industry of Ukraine is being reformed men and women while performing active duty are now protected and developed. The infrastructure of training centres, by law, and 57 positions of gender advisors were created. There military communities and ranges of the Armed Forces, are over 27 thousand service women including 3.7 thousand complexes of airfi eld buildings and runways is being offi cers performing active duty in the Armed Forces of Ukraine. gradually restored.  The Government is continuously increasing the The structure of the pay service of military personnel was investments into the development of new types of reconsidered for the fi rst time in 30 years. The minimum amount weaponry. The 2028 Development Strategy of Ukraine’s of basic pay services of military personnel and the combat zone Defence Industry, which defi nes its strategic areas bonuses were increased. A mechanism of fi nancial compensation of development, was adopted. These areas include, for renting accommodation is provided for enlisted personnel among other matters, modernisation and enhancing (soldiers, sergeants, and starshynas) serving under a contract. the productive capacity of enterprises in the defence industry. A contemporary system of military education was created  The Ukrainian Navy’s Missions Centre is under enabling training of military specialists at all levels of higher construction as part of the rebuilding of the base education. The Military Armoured Corps Institute and the State infrastructure of the Ukrainian Navy on the coasts of Research Institute for Testing and Certifi cation of Weapons and the Black and Azov Seas and the creation of a modern Military Equipment Military Law Institute at Yaroslav the Wise management system together with the engineering National Law University were created. A prospective model for service of the USA Sixth Fleet. promoting career growth of offi cers based on acquiring military  The Armed Forces of Ukraine’s gender policies are education combined with learning foreign languages (including changing to comply with modern standards. courses abroad) was approved and is now being implemented. The personnel structure was streamlined which involved downgrading a number of core position categories of senior offi cers. The development of a professional non-commissioned offi cer corps continues. 68 ACHIEVEMENTS Reform of the Ministry of Internal Aff airs SECURITY AND DEFENSE Strategic priorities for further reform were defi ned by the Strategy for the Development of the System of Ministry of Internal Aff airs till 2020 (dated November 15, 2017). The Ministry of Internal Aff airs has respective departments for interaction with subordinated agencies: State Border Guard Service, State Migration Service, National Police, State Emergency Service, National Guard.

In addition, in December 2018, the Security Sector Coordination Unit for Counteracting Homeland Security Hybrid Threats was established under Division for Critical Infrastructure Protection of the Reform Policy-making Department of the Ministry of Internal Aff airs of Ukraine.

There is an active intervention to improve the A health development of the Ukrainian state is provision of services. As of today, there are impossible without building a unifi ed resilient and 156 regional service centers of the Ministry of functional internal aff airs system being an integral Internal Aff airs, including 114 new ones, which national security element. Modern-day challenges provide services under the principle of “one and threats - fi rst and foremost including hybrid ones window” in the format of an open-space - are caused by a combination of socio-demographic, offi ce. economic, political, legal, psychological and technological factors requiring systemic response, In August 2018, the service of open data adequate transformation both of the entire security on the primary registration of vehicles was sector and the internal aff airs system in particular as launched. Optimization of the process of well as integration of the system into the structure of certifi cation of specialists of driving schools, the country’s political priorities. which carry out training of drivers of vehicles started. In December 2018, a new online MAIN TASKS service “Checking the Vehicle Registration Certifi cate” was introduced.  Protection of people against violations of law. Reforms in Ukraine  Preventing crime. On December 21, 2018, the online service 2016-2019:  Ensuring the safety of public space and road traffi c. “Driver’s Electronic Cabinet” started Irreversibility of Changes  Ensuring observance of human rights and civil functioning. liberties. Reform of National Police Protection of public order during mass National Guard of Ukraine events has improved with the introducing Reform of criminal police is ongoing “Scandinavian model” of public order 5 regional (recruiting) centers started their including pre-trial investigation units protection. At present, communication work, the system of military reserve was which is provided in close cooperation groups are involved in mass events in all created. 1127 of reservists were trained with EUAM. It’s aim is to merge regions of the state. during training collections. investigators and operative police offi cers. Special police unit CORD was established Work is underway to improve the Response to criminal off enses has been for providing special operations (riot structure and composition of the National improved through Unifi ed contact police). New units of the National Police Guard’s Main Military Command, bring its centres “102” and newly created service were created, namely: organizational and staff structure closer to of dispatchers who carry out centralized that of other security and defense sector management of details/units at the level  Department of Strategic constituents, and similar military units of of region. Due to these changes, the time Investigations, the priority of the relevant NATO member states. of police response to reports of crimes or which is to counteract socially other events decreased from a few hours dangerous organized groups and One of the signifi cant results achieved to strictly set by the order of the NPU criminal organizations, as well as in the framework of joint projects is the norms: 7 minutes in regional centers and the prevention of increased activity creation of forces of the National Guard 20 minutes in district centers. of representatives of organized of Ukraine for security protection in the criminality. mountainous area, providing assistance to A comprehensive video surveillance  Department of organizational support tourists and the population. The issue of system is being introduced. Situational for the activities of the police units equipping NGU military units with modern centers (analytics of criminal situation) on the water and air, whose function and upgraded samples of equipment, actively use video information 19 is to coordinate the work of police special means, equipment and equipment thousand CCTV cameras, of which nearly units on the water, groups on the for ensuring public order protection is 2 thousand with video analytics system. use of unmanned aerial vehicles and ongoing. the introduction of helicopter police At present, the patrol police operates activities. During the implementation of the projects, in 38 localities, as well as on roads of  Criminal Analysis Department, the National Guard of Ukraine received national and international importance with the main tasks of which are the assistance and support in the process of a total length exceeding 6,4 thousand km. organization and coordination of the accession of the National Guard of 43 patrol police stations were created. information retrieval and analytical Ukraine to the International Association of In order to increase the eff ectiveness of work aimed at collecting, evaluating, Gendarmerie and Police Force in the status counteracting street crime, patrol police analyzing information, assessing risks. of a military institution of the FIEP and to tactical teams have been formed to assist  Patrol Police Academy was gain full membership. ordinary patrols in case of emergencies. established. Currently such groups are established in 24 regions and in Kyiv, consisting of 1233 employees. Patrol responding teams are created in small towns and rural areas. Progress in european and euro atlantic integration

Reforms in Ukraine 2016-2019: Irreversibility of Changes The membership with EU and day. Institutional changes happening “Roadmap” of priority draft laws on Ukraine’s NATO remains the number one everywhere. The Government eff orts European integration for the period of 2018-2019 priority of Ukraine’s domestic and are focused on building inclusive foreign policies. Our strategy of institutions and dismantling the ascending into the EU is based post-Soviet heritage. The results of on building a viable state using structural changes in such areas as the best international practices. ensuring the rule of law, reforming We are continuously working on the Government control system, the the integration into the economic, anti-corruption system, improving 57 11 13 political, and legal framework public welfare, and ensuring of the EU. In February this year stability and sustainable economic Total number of Adopted in Adopted Ukraine once again reaffi rmed its development attest to a gradual draft laws principle commitment to the chosen path. The transformation of Ukraine into a provisions on the political course on modern European country. securing EU and NATO membership were added to the Constitution of In 2018 Ukraine changed its approach Ukraine’s performance of the integration into the European single Ukraine. Enshrining Ukraine’s course to the implementation of the EU- Association Agreement including market - our principal aspiration in on the European and Euro-Atlantic Ukraine Association Agreement with the provisions on the DCFTA performing the Agreement. integration in the Constitution will (hereinafter ‘Association Agreement’). were highly recognised at the help to protect the state against The Government follows the adopted 20th EU-Ukraine summit held Ukraine’s achievements were political manipulation. The President’s Action Plan on Implementation of on the 9 July 2018, and at the recognised by the EU both in terms decree of 20 April, 2019 entitled the Association Agreement, which Association Council meeting on of the Association Agreement “Issues of European and Euro-Atlantic explicitly defi nes the entire range of 17 December 2018. The statement performance and with regards to Integration” approved the action plan tasks and enables performance status following the 5th Association meeting its commitments specifi c for the implementation of the state’s control and planning and setting Council meeting acknowledges the to the visa-free regime once again strategic course on a full membership additional goals. The work never parties’ commitment to enhancing proving its status of a dependable with the EU and NATO mandating stops. The monitoring system “Pulse cooperation in high-priority partner. Two million Ukrainians have the Government to endeavour best of the Agreement” helps to track areas. In order to strengthen already benefi ted from the new eff orts to meet these goals. the progress in implementing the political association and deepen regulations which enabled their Association Agreement in every area economic integration of the EU and travel for recreation and establishing Ukraine’s ambitions remain crystal of social life. Ukraine four high-priority areas of business contacts. Ukraine and clear: a successful performance of the cooperation were detailed including the EU continue collaboration on EU-Ukraine Association Agreement A list of high-priority Euro-integration digital economy, customs policy, countering common threats. including the provisions with regards bills was approved for submission energy, as well as legislation, freedom to the launch of a free trade area and to the Verkhovna Rada of Ukraine in and security. applying for EU membership upon order to improve the collaboration completing the reforms and ensuring of the Cabinet of Ministers and the The fi rst half-year of 2019 is to compliance with the EU criteria for Parliament along the lines of EU mark the adoption of decisions ascension. integration. This 2018-2019 roadmap on updating the Agreement to is being continuously updated. refl ect our commitment to sectoral The Ukrainian nation confi rms its commitment to this course every 72

PROGRESSIN EUROPEAN AND EURO ATLANTIC INTEGRATION

LIBERALISATION OF TRADE TERMS WITH THE EU AND THE WORLD

The implementation of the EU- Ukraine Association Agreement in part of establishing a free trade area The leader markets for Ukrainian goods created favourable conditions for the development of trade with the EU. The share of business with the EU in Ukraine’s foreign trade continues to grow. Over 2018 the specifi c weight of the trade in goods and services between the EU and Kyiv amounted to 17% approximately 42% of the entire volume 14% of Ukraine’s trade. 10% Ukraine was ranked third among the 8% 8% exporters of agricultural products to the EU pulling ahead of China. The amount of Ukrainian exports to the EU in the Reforms in Ukraine period from February 2018 to January 2016-2019: 2019 amounted 5.9 billion Euros. Almost Irreversibility of Changes 15,000 Ukrainian companies have Poland Italy Germany Hungary Netherlands received EU export permits. Dozens of projects are being implemented in such areas technical regulations, standardisation and metrology. as the development of transport infrastructure, housing On 1 January 2019 Ukraine repealed 10,917 outdated and public utility sector, the support of small and standards developed before 1992 which amounts to medium-size enterprises, energy effi ciency and many almost 90% of the total number of standards in the others. The scope of EU fi nancial and credit support country. exceeded 1.2 billion Euros in 2018. The roadmap for Ukraine’s accession to the joint transit According to the end-of-year results the most procedure EU / EFTA was approved. The adoption of signifi cant progress was reached in such areas as the Law of Ukraine “On Amendments to the Customs “Entrepreneurship”, “Agriculture”, “Technical Barriers to Code of Ukraine and Certain Other Laws of Ukraine on Trade”, and “Social Policy and Labour Relations”. the Implementation of the ‘Single Window’ Mechanism and Optimisation of Control Procedures for Movement Ukraine met a substantial number of its obligations of Goods Across the Customs Border of Ukraine” marks specifi c to ensuring the transparency of competition the beginning of bringing Ukrainian transit procedures policy through Government aid control, implementation into compliance with the Convention on a Common of corporate governance, and opening data regarding Transit Procedure. corporate operations. In April 2019 the Bankruptcy Code, which improves the eff ectiveness of bankruptcy On 25 April 2019 the Parliament took an important step procedures, protects creditor rights, and provides for towards the so-called ‘industrial visa-free regime’ for execution of court rulings, was adopted By and large Ukrainian goods. The Parliament passed the draft law as at 1 January 2019 Ukraine met 73% of its obligations “On Amendment of Certain Legislative Acts of Ukraine regarding harmonisation of its entrepreneurship Regarding the Implementation of European Union legislation with the EU laws. Legislation in the Area of Technical Regulation” and “On Common Transit Procedure” in the fi rst reading. These The implemented changes and the convergence of steps were the essential pre-requisites for initiating the policies and legislation on agriculture have turned offi cial procedure of assessing Ukraine’s readiness for Ukraine into an important supplier of organic products entering into the Agreement on Conformity Assessment to the EU market. The EU law provided the foundation and Acceptance of Industrial Products (ACAA). for adopting legislation on organic production, marking of organic products, and creating conditions To introduce the institute of Authorised Economic for producing competitive export products. Most of Representative (AER) the Verkhovna Rada of Ukraine Ukraine’s organic operators are certifi ed according to is expected to adopt the draft Law of Ukraine on the EU standards which are applied both to exporting amendments to the Customs Code of Ukraine to organic products and doing business on the domestic facilitate customs formalities for reputable enterprises, market. create the conditions for the recognition of Ukrainian AERs in the EU, pave the way for the participation of Industries continue to adopt international technical Ukrainian AERs in cargo tracking eff orts in accordance regulations eliminating non-tariff barriers to trade and with SAFE Framework of Standards of the World enhancing the access of Ukrainian industrial products Customs Organisation to result in boosting the to global markets. The country has made a signifi cant competitive advantage of Ukrainian enterprises. eff ort with regards to development and adoption of 74 “Energy”, “Statistics and Information Exchange”, and “Financial Services”. PROGRESSIN EUROPEAN AND EURO ATLANTIC Cybersecurity remains a priority INTEGRATION for Ukraine which is an important contributor in this area due to the existing threats. Ukraine joined a number of EU initiatives which strengthen its capabilities in countering cyber threats such as partnering with the European Network and Information Security Agency (ENISA) and the European Cybersecurity Research and Competence Centre. The Department of Strategic Investigations was established within the structure of criminal police of the National Police of Ukraine. Ukraine SECTORAL COOPERATION WITH THE EU continues collaborating with the EU on border management, migration, Changes in social policy and labour relations are providing refuge and crime prevention. achieved by developing professional standards, adopting new approaches to the operation of The year of 2018 also marked the State Employment Service of Ukraine and the commencement of technical implementing common standards of pension benefi ts. implementation of the mechanism for These transformations are based on EU standards. the procurement of goods and services under framework agreements. Similarly In furtherance of the EU-Ukraine Association to the procurement procedures, this Agreement the Government prepared the Strategy for mechanism relies on the ProZorro Ukraine’s Integration into the EU Single Digital Market system and enables clients to purchase and the Action Plan for its Implementation (roadmap) goods and services by entering into which is currently undergoing EU internal audits. Once framework agreements for the maximum the audits are completed, Ukraine expects a visit of term of 4 years. EU expert mission to assess the state of Ukraine’s digital market - in particular, the telecommunications. The introduction of the comprehensive The results will help defi ne joint EU-Ukraine activities draft Law of Ukraine “On Amendments aimed at the integration of digital markets. to the Law of Ukraine “On Public Procurement Improvement” and Certain Reforms in Ukraine Ukraine has made considerable progress in such areas Other Legislative Acts of Ukraine” to 2016-2019: as “Justice, Freedom, Security, and Human Rights”, the Verkhovna Rada of Ukraine and Irreversibility of Changes “Sanitary and Phytosanitary Measures”, “Energy its adoption remains among the top Effi ciency, Housing and Public Utilities Sector”, priorities. A series of regulatory instruments were passed in 2018 trust to the effi ciency of state regulation of the stock to implement the provisions of the Law of Ukraine “On market the draft Law of Ukraine “On Amendments Commercial Accounting of Thermal Energy and Water to Certain Legislative Acts of Ukraine on Protecting Supply” and “On Energy Effi ciency of Buildings”. Investors against Corrupt Practices on Capital The capacities of the Energy Effi ciency Fund were Markets” was developed. considerably expanded. Ukraine is implementing ecodesign - a European approach which defi nes The draft Law of Ukraine “On Amendment of requirements to the effi ciency and environmental Certain Legislative Acts of Ukraine on Credit Unions” impacts of various energy-consuming products. which, among other goals, is intended to provide transparency and ensure stability on the mutual The Government approved plans for the lending market and establish common approaches to implementation of Phase 1 of the Energy Strategy the regulations which govern credit union operations. of Ukraine (to 2020) and the synchronisation of the common energy system of Ukraine with the energy The Government also intends to redouble its eff orts grid of the EU member states. A new model of aimed at the performance of Ukraine’s obligations the electricity market was created, and the State under the Association Agreement in such areas Inspectorate for Energy Supervision was established. as “Education, Training and Youth”, “Transport, Cooperation on Infrastructure, Postal and Courier The Government is actively working on updating the Services”, “Government Procurement”, “Environmental energy annex to the Association Agreement to ensure Protection and Civil Defence”. These areas are integration with the EU energy markets. marked with considerable progress. The Government continues to implement state monitoring of water The eff orts aimed at ensuring the integration of reserves pursuant to the EU Water Framework Ukraine’s energy market with the EU energy market Directive. The Law of Ukraine “On Strategic include the work on updating Annex XXVII to the Environmental Assessment”, which provides for Association Agreement. The Government of Ukraine openness of information regarding the impact of approved the respective draft decision of the EU- Government projects and plans on the environmental Ukraine Association Council. conditions, recently became eff ective while beginning September 2018 the secondary education reform To improve the investment climate in Ukraine the draft “New Ukrainian School” was launched. Law of Ukraine “On Amendment to Certain Legislative Acts of Ukraine on Facilitation of Investment The Ukrainian and EU parties are collaborating on Attraction and Introduction of New Financial extending the presence of international education Instruments” was developed and awaits review by the institutions in Ukraine - in particular, by launching Parliament. The adoption of the new law will enable courses of the College of Europe and the Eastern regulation of the commodity market operation and Partnership School for public servants and further prevent manipulation. support and development of the European camp in Ukraine. To build an eff ective system of countering corrupt practices on the securities market and improving the attractiveness of Ukraine’s economy by building 76

PROGRESSIN EUROPEAN AND EURO ATLANTIC  Preparation of proposals for the EU INTEGRATION party on updating the Association Agreement to refl ect the dynamics in the FTA functioning and review of preferences.  Based on the results of the EU assessment of the Strategy for Ukraine’s Integration with the EU Single Digital Market and its Action KEY INITIATIVES AND PRIORITIES FOR Plan (roadmap) and the activities THE NEAR FUTURE of the EU expert mission tasked with assessing the convergence Ukraine will continue the dialogue with the European of Ukrainian legislation with the Union and its member states within the framework EU law in the digital domain the of its strategic course on European and Euro-Atlantic parties may approve a joint action integration. plan regarding further steps in the digital domain at the next scheduled Sectoral integration in high-priority areas such as meeting of the EU-Ukraine digital market, trade liberalisation, and energy as Association Council. well as justice, freedom and security will deepen.  Continued collaboration with a Therefore, the current agenda includes the following group of high-level EU advisors on issues: developing the draft strategy of integrated border management up  Updating the energy annex to the Association to 2025 and the action plan for its Agreement enabling Ukraine’s integration implementation. The document is with the energy markets of the EU states. The being developed based on eleven Government is actively working on this task. European principles of integrated  Entering into the EU-Ukraine Agreement on border management and, among Conformity Assessment and Acceptance of other matters, will provide the Industrial Products (ACAA) to mark an ‘industrial legal framework for the guarding visa-free regime” for Ukrainian goods. of borders, passage of individuals,  Eliminating customs barriers. The Verkhovna vehicles and cargo across the Rada of Ukraine is expected to adopt the state border, implementation of draft Law of Ukraine on Authorised Economic preventive activities to combat Reforms in Ukraine Representative and the common transit to trans-border crime, analysis of risks 2016-2019: contribute to customs liberalisation and create using a common integrated model, Irreversibility of Changes the conditions for joining the Convention on a countering illegal migration and Common Transit procedure in the long term. human traffi cking etc. FURTHER PLANS Further priorities also include the At the same time the development and implementation of the new trans-European revision of standards of higher education Transport Network (TEN-T) Investment in Ukraine along specialities in a number Action Plan for stronger connectivity of knowledge areas will include the approved at the meeting of foreign ministers defi nition of requirements to academic of EaP member states. The conclusion of programmes on matters of European and the EU-Ukraine Common Aviation Area Euro-Atlantic integration. E-services market agreement to liberalise the air transportation market. In addition to that the Ukrainian party intends to engage in consultations The time has come to update the EU-Ukraine with the EU party regarding the Association Agenda in collaboration with possibility of Ukraine’s participation in the EU party to refl ect Ukraine’s initiatives “Horizon Europe”, the EU’s next funding specifi c to achieving more comprehensive programme for research and innovation. sectoral integration in such areas as digital Energy sector market, customs cooperation, and energy as The near-term plans include extending well as justice, freedom and security. EU-Ukraine cooperation in matters of information security and cyber security, Furthermore, Ukraine will focus on creating ensuring the resilience of critical conditions for economic growth, improving infrastructure, countering trans-national the business climate, ensuring eff ective crime, strengthening the guarding of governance, creating conditions for borders, and mitigation of migration- investment into human capital development, related risks. Justice, Freedom, Security and continuing education and health care reforms and the eff orts aimed at strengthening the rule of law and fi ghting corruption.

Both the Ukrainian and the EU parties strive to build closer interpersonal ties. To that end the Government will continue investigating Education and Science possibilities regarding extending the presence of foreign education institutions in Ukraine - in particular, by launching courses of the College of Europe and the Eastern Partnership School for public servants and further support and development of the European camp in Ukraine. 78

PROGRESSIN EUROPEAN AND EURO ATLANTIC INTEGRATION

EURO-ATLANTIC INTEGRATION

Within the context of implementing the state Euro- systematic informational activities aimed Atlantic integration policy, the approaches to NATO at raising public awareness of the content integration were completely updated, the work on and the end goal of Ukraine-NATO strategic convergence of Ukraine and NATO was cooperation were resumed to enlist the organised, the defence planning system built on the civic support of the Government policy NATO standards was created, a clear mechanism on Euro-Atlantic integration; the security of monitoring, coordination, and control of the and defence sectors are strengthened cooperation with the Alliance was implemented by laying institutional foundations for by forming the intergovernmental Committee on the introduction of gender advisors / Coordination of Ukraine’s Euro-Atlantic integration contact persons on gender issues and eff orts chaired by the Vice Prime Minister of the integration of gender agenda into Ukraine for European and Euro-Atlantic Integration; the learning process at the education organisational conditions were created for the institutions of the security and defence professional development of the Government offi cials sector of Ukraine; and the adoption of involved in cooperation with NATO and reforming NATO standards in the security and Ukraine’s security and defence sector; the targeted and defence sector of Ukraine.

Reforms in Ukraine 2016-2019: Irreversibility of Changes The annual national programme (ANP) is Ukraine’s introducing key performance indicators. This enables key instrument of promoting its Euro-Atlantic tracking the progress in the implementation of each aspirations. The document had laid the framework speciﬁ c reform or, conversely, identify any deﬁ ciencies for strategic reforms and other activities to ensure and failures. eff ective, decisive and systemic preparation of Ukraine to becoming a NATO member. The programme is At the moment the implementation of the programme primarily focused on ensuring compliance with the documents is ensured by 300 experts from 84 criteria for ascension into the Alliance. Instead of being ministries and agencies. The Government is actively focused on the process ANP-2019 marks a shift to the preparing ANP-2020. new result-oriented approach.

For the ﬁ rst time the document contains the logical chain: “strategic goal - methods of meeting the goal - priority tasks for the current year - activities aimed at completing high-priority tasks”. In addition to that the ANP framework provides for a monitoring system by Donors support coordination

Reforms in Ukraine 2016-2019: Irreversibility of Changes DONOR AID PLANNING

In 2017 the Government fi rst developed Government representatives and The regular meetings on donor aid are primarily and approved the Medium-Term Priority international partners to provide a aimed at establishing a systemic platform for Action Plan. The new medium-term plan clear understanding of the vision and strategic dialogue regarding the areas of Ukraine’s to be developed in 2019 is to defi ne the cooperation areas with regards to cooperation with international partners and primary goals and priority areas for the development. Such approach is expected enhancing such cooperation and partnership Government in 2020-2022. The new plan to synchronise the operations of all donors in the future, and systemic coordination and will provide the foundation for medium- in Ukraine contrary to a situation in which approval of the priorities of the Ukrainian term budgetary planning and the plans of each donor forms its own agenda of Government and the donors. ministries and other central Government providing aid with allocations to certain authorities, and will help to better align sectors based on its medium-term or long- The fi rst national forum was a continuation of donor aid with the actual development term planning perspective (3-10 years). international conferences on reforms held in priorities. The introduction of medium- London and Copenhagen and became a key term budgetary planning integrated with The updated approach builds on phase in the preparation to the International the state strategic planning system is to the partner countries’ ‘and donors’ Reform Conference on Reforms in Toronto, ensure eff ective fi nancing of strategic commitments on shared responsibility, Canada. The meeting of the members of Ukrainian activity areas and reforms and contribute transparency and accountability, as Government and international partners resulted to establishing a clear connection between identifi ed in the Paris Declaration on in mutual commitments on enhancing the the amounts of funding and the results External Aid Eff ectiveness, which Ukraine eff ectiveness of international aid provided by the of implementing the respective policies. joined in 2007. donor community. The new approach to strategic planning will help to improve the existing donor During the International Conference coordination system to become an effi cient on Reforms in Copenhagen the Prime tool for the dialogue with donor countries Minister suggested to analyse the existing at all levels. The new medium-term plan cooperation practices in order to improve will defi ne the key areas and the expected donor coordination and attracted foreign results of respective activities enabling its assistance use effi ciency. In December use as a tool for enlisting foreign aid and 2018 this initiative was supported during allocating the resources of foreign donors the “Partnership for Development” national to fi nance high-priority areas of state donor coordination forum in the history of development and reforms. Ukraine.

The change in the donor coordination The Prime Minister proposed to apply the model was initiated in 2018. The updated principle of demand driven approach to model is based on holding regular attract external assistance. meetings between the highest-level 82 improved compliance of the projects DONORS SUPPORT with the current priorities of Ukraine. COORDINATION The document contains alternative proposals for increasing the average level of IFIs disbursement and improvement of project management at various levels including the development of tools for minimising currency risks, creating an information exchange system and a multi-level project monitoring system, regular review of the credit portfolio and establishing an open registry of IFIs projects.

In furtherance of the decisions made during the forum the Government DONOR AID PLANNING continues the optimisation of the process of attracting and using foreign The forum resulted in forming working groups technical aid. which included representatives of the central Government authorities, the donor community To improve the effi ciency of external and the Reforms Delivery Offi ce. The activities of technical assistance, the Ministry of the working groups address the challenges in the Economic Development reviews project implementation of international technical aid projects, portfolios jointly with the largest speeding up the implementation and disbursement donors annually. During 2014-2018, the according to the approved investment projects of following was done: international ﬁ nancial organisations, and enhancing the coordination of strategic collaboration with  Signing 107 international international partners. agreements and other bilateral documents on technical and In December 2018 the respective working group ﬁ nancial cooperation. chaired by the Minister of Finance elaborated  Improving procedures for attracting, the Concept for Enhancing the Implementation using and monitoring international Eff ectiveness of Projects of International Financial technical assistance. Organisations along with a key actions plan. The  Introducing new eff ective Reforms in Ukraine Cabinet of Ministers reviewed and approved these approaches in cooperation with 2016-2019: documents at the meeting on 27 December 2018. the EU through the introduction Irreversibility of Changes The Concept provides for a change of approach of annual assistance programming to selecting projects to receive IFIs funding and missions for the coming year. FURTHER STEPS

The Government intends to further and priorities specifi c to attracting update the foreign aid coordination foreign technical aid, will become a programme to be consistent with the key component of donor coordination strategic priorities identifi ed in the eff orts. On 14.07.2019 the Government Government’s Program of Action, other has already amended the Cabinet of strategic and programmatic documents, Ministers of Ukraine resolution as of and regional development strategies. February 15, 2002 No. 153, “Establishing a Unifi ed System for Attracting, Using The ProAid online portal is to play a key and Monitoring International Technical role in raising public awareness of the Assistance,” which establishes a ITA projects. The portal will be updated “demand driven approach” at the with the latest information regarding all legislative level and will improve donor the technical aid programs supported engagement, guided by national by international donor organisations in development priorities. Ukraine. The administrative functions are expected to facilitate and ensure The change in approach will contribute timely electronic registration of to enhancing the Government’s projects and electronic accreditation capacities specifi c to a systemic of contractors. The ProAid is intended coordination of planning and using as a convenient tool for the public, foreign aid to meet the Government’s non-governmental organisations and goals and objectives as well as all concerned parties in monitoring enhancing the eff ectiveness of using foreign aid streams. This mechanism is the aid to meet high-priority goals and to improve transparency standards and implement reforms. minimise corruption risks enhancing confi dence with the Government.

The elaboration and adoption of the new Priority Action Plan 2022, which will contain the priorities for medium- term planning and deﬁ ne the tasks Ukraine Now brand

Reforms in Ukraine 2016-2019: Irreversibility of Changes BRAND AMBASSADORS INTERNATIONAL RECOGNITION

The brand primarily relies on the openness and the versatility of application - by anyone, anywhere. More and more businesses are introducing the brand into their communications.

The brand is steadily gaining recognition as a powerful tool for promoting Ukrainian goods and services on global markets. The logo frequently appears at various international exhibitions. It is widely used on display Thanks to its simplicity and design - Red Dot Design stands and on gifts presented to visitors convenience Ukraine NOW Award 2018. The coherent and partners. quickly became popular and style of presenting the gained international acclaim for country won in the Corporate The key branding tasks include its contemporary and creative Identity nomination. Being a demonstration of the country’s style. In addition to national synonym of quality, Ukraine SUCCESSFUL CAMPAIGN achievements to inspire the world and success and ﬁ rst prizes at local NOW becomes a symbol of encourage people to visit Ukraine, start marketing competitions the Ukraine. The Red Dot award Ukraine NOW is the largest image- a business or invest in its economy. brand was also well-received acknowledges recognition building Government campaign in the by the international expert of the creative industries and entire history of independent Ukraine. Ukraine NOW does just that! It is safe to community. Ukraine NOW Government communications The campaign was a collaborative eff ort say that Ukraine NOW has turned into a won one of the world’s of Ukraine by the international of experts, leading communicators, mark of premium Ukrainian products. most prestigious awards in community. British consultants, representatives of the creative industries and the Government offi cials. The brand success steps from successful communications focused on creativity.

Ukraine NOW became an important component of building a positive image of Ukraine worldwide. The brand demonstrates the unity of the state in showcasing the positive changes taking place, presenting the achievements in social and economic development, improving the business climate and attracting investments. Ukraine Reform Conferences

Reforms in Ukraine 2016-2019: Irreversibility of Changes UKRAINE REFORM CONFERENCE, UKRAINE REFORM CONFERENCE, LONDON, 2017 COPENHAGEN, 2018

On July 6, 2017 the UK jointly with Ukraine hosted the The second Ukraine Reform Conference International partners remained fi rst Ukraine Reform Conference – an annual international was hosted by the Kingdom of committed to supporting the reform conference on reforms in Ukraine under the patronage Denmark and took place on June 27, work of the Ukrainian Government and of the Prime Minister Volodymyr Groysman. The meeting 2018 in Copenhagen. The conference further strengthening the partnership in London focused on the progress Ukraine has made in strengthened the role and image of the with Ukraine. A well-functioning, reforms since 2014 and on presenting the Government event as a “driver for change” and a prosperous and resilient Ukraine Priority Action Plan until 2020. The initiative brought meeting point for representatives of the remains of key strategic importance together representatives of the international community international community and Ukraine, to Europe and the wider international and top Ukrainian offi cials and decision-makers to discuss and focused mainly on the substantial community and is Ukraine’s best answer priority reform areas and show their support for Ukraine. progress, achieved by the Ukrainian to Russian aggression. However, more Government in implementing reform reform work is to be done for Ukraine Alongside ministerial-level plenary discussions, the priority areas that have been defi ned to truly achieve its full potential and conference included detailed conversations on each of the by the Government Priority Action Plan become a modern and prosperous priority reform areas defi ned by the Action Plan: until 2020. nation.

 Economic growth. The Prime Minister of Ukraine presented In the period ahead, the Ukrainian  Eff ective governance. an overview of achievements and Government focuses on achieving  Human capital development. priorities for further reforms on the sustainable economic growth. As was  Rule of law and ﬁ ght against corruption. backdrop of economic recovery and stated by the Prime Minister, priority is  Security and defense. increasing growth. The presentation to be given to privatization and state- was followed by plenary discussions owned enterprises reform, favorable The wave of reforms in Ukraine that started in 2014 focusing on two priority reform areas, business climate development, has been the most far-reaching and deepest since its particularly Good Governance and agriculture sector reform, anticorruption independence. However, there is still a long way to go and Economic Development. and rule of law, energy sector the Ukrainian Government commitment and continued reform, logistics and infrastructure international support is crucial. The Conference also focused on a development, public administration number of key reforms implemented by reform and innovation development. Ukraine has great potential. But only through transforming the Government, such as: itself into a stable, transparent, prosperous democracy can Ukraine meet its citizens’ aspirations and realize its  healthcare reform full economic potential. Reforms will enhance Ukraine’s  pension reform stability, which is important to the stability and security of  education reform wider Europe. Ukraine’s international partners also have a  privatization and SOE reform direct interest in upholding the rules-based international  agriculture sector reform order, which has been violated by Russia in Ukraine.  public administration reform

This conference brought the international community together with the Ukrainian Government, civil society, business and politicians to strengthen support for reforms. 88

UKAINE REFORM The main topic of the Conference is CONFERENCES “Irreversibility of Changes”. Despite a number of internal and external challenges, namely the Russian military aggression in Ukraine’s East, for the past years the country has been going through the path of deep and structural reforms that have already demonstrated substantial success. At the same time, this year’s Conference takes place amid two election campaigns in Ukraine, which makes it vital to preserve the achieved results and secure the irreversibility and continuity of the reforming process.

The 2019 Conference will be held for the ﬁ rst time in an interactive format and contain not only inclusive plenary discussions with the participation of the Ukrainian governmental delegation, foreign ministers, heads of international institutions, Parliamentarians, private sector, civil society and think tanks, but also discussions on investments and innovation, democratic integrity and resilience, and security and defence. UKRAINE REFORM CONFERENCE, Ukraine House will be showcasing TORONTO, 2019 Ukrainian culture, creativity, innovation, and opportunity. In 2019, the third annual Ukraine Reform Conference is hosted by Canada and takes place on July 2-4 in Finally, the Reanimation Package Toronto. The event once again unites international of Reforms, the largest coalition of community, represented by delegations from the EU, leading Ukrainian NGOs and experts, NATO and G7 countries, as well as other international will present its “Toronto Principles” – an Reforms in Ukraine delegations and the Ukrainian Government, civil expert paper, designed to outline 2016-2019: society and business representatives who support priority tasks in key reform areas for the Irreversibility of Changes reform process in Ukraine. 5 years to come. HON. CHRYSTIA PAVLO FREELAND KLIMKIN P.C., M.P., Minister Minister of Foreign Aff airs of Foreign Aff airs of Ukraine

I am delighted that Canada is I am very much looking hosting the Ukraine Reform forward to the Ukraine Reform Conference in Toronto this year. Conference taking place in This is an invaluable opportunity Toronto later this year. The for Canada and the international occasion presents a great community to demonstrate opportunity for Ukraine to come our committed support for together with our international reform in Ukraine. Together, we partners to take stock of the will continue to work toward progress we have made to date strengthening the rules-based and to work in partnership on international order and building the roadmap that is paving the future that the people of the way to a brighter future Ukraine deserve. for Ukraine and its place in the world. Reforms architecture

Reforms in Ukraine 2016-2019: Irreversibility of Changes LESSONS LEARNED

Human capital

1. Reforms implementation requires motivated local professionals focused on the result. 2. More than 95% of reform experts were hired within Ukraine and they UKRAINE REFORMS ARCHITECTURE stay in the country.

URA is a comprehensive association of Governmental and non-governmental organisations uniting several thousand young professionals aiming to achieve qualitative Political commitment transformations in Ukraine. 1. No reform can be launched without The main task of the URA is to stimulate reform processes within the Government by the government offi cials’ political supporting daily operations of ministries and Government agencies, and providing commitment institutional support to the Government of Ukraine for effi cient implementation of 2. No RSTs are formed without PAR reforms. commitment from the Minister or other top offi cial The innovative approach to implementing reforms adopted by Ukraine is studied by foreign experts for possible replication in other countries requiring drastic reformation. Initial plan of reforms

1. Signed in 2014, and ratiﬁ ed in 2017, the Association Agreement is our reform roadmap 2. Detailed TORs for RSTs before their launch 92

REFORMS ARCHITECTURE

This a coherent and effi cient architecture consist of three core elements:

REFORMS DELIVERY REFORM SUPPORT STRATEGIC ADVISORY OFFICE (RDO) TEAMS (RSTs) GROUP SUPPORTING UKRAINIAN REFORMS An advisory body to the The Reform Support Teams (SAGSUR) Cabinet of Ministers of Ukraine, (RSTs) are formed of coordinated by the Prime professionals from outside SAGSUR is providing uniﬁ ed, Minister and headed by the the Ukrainian civil service strategic advice to the Prime Minister of the Cabinet of and work in ministries on a Minister. SAGSUR advises on how Ministers of Ukraine, with a temporary basis to implement to implement comprehensive focus on ensuring consistency priority reforms and transform reforms eff ectively, based on of reforms delivery across the Ministries themselves. The ﬁ rst-hand successful experi- Ministries, with special goal is to lay the foundations ence elsewhere, bringing best attention paid to the Public for a new generation of international practice and link to Administration Reform. reform-oriented Ukrainians international resources. SAGSUR working in the civil service. is headed by Ivan Mikloš, a former It is expected that the RSTs Deputy Prime Minister of Slovakia, members will gradually be with an outstanding record of integrated in the civil service. delivering reform.

Reforms in Ukraine 2016-2019: Irreversibility of Changes National Reforms Council (NRC)

PRIME MINISTER PRESIDENT SPEAKER OF PARLIAMENT

STRATEGIC ADVISORY GROUP FOR SUPPORT OF UKRAINIAN REFORMS CABINET OF MINISTERS OF UKRAINE REFORMS DELIVERY OFFICE

on reforms (SAGSUR) High-level advice High-level

MINISTRY OF AGRARIAN POLICY MINISTRY OF INFRASTRUCTURE MINISTRY OF FINANCE MINISTRY OF ECONOMY AND FOOD

MINISTRY OF REGIONAL MINISTRY OF ENVIRONMENT AND MINISTRY OF EDUCATION STATE ROAD AGENCY DEVELOPMENT… NATURAL RESOURCES (to be launched)

Reform Support Team (RST) Reform Support Team (RST) Funded through the Ukraine EU Technical Assistance Multi-Donor Account (MDA) Abbreviations

Reforms in Ukraine 2016-2019: Irreversibility of Changes A AFU Armed Forces of Ukraine M MEDT Ministry of Economic Development and Trade of ARMA National Agency of Ukraine for fi nding, tracing Ukraine and management of assets derived from MFA Ministry of Foreign Aff airsNational Anticorruption corruption and other crimes (Asset Recovery bureau of Ukraine and Management Agency) ATC Amalgamated Territorial Communities N NABU National Agency for Corruption Prevention NACP National Agency for Corruption Prevention B BEPS Base Erosion and Profi t Shifting NBU National Bank of Ukraine NHSU National Health Service of Ukraine C CAS Centers for Administrative Services NUS New Ukrainian School CEB Central Executive Body CMU Cabinet of Ministers of Ukraine P PAR Public Administration Reform COSME Competitiveness of Enterprises and Small and PFM Public Finance Management Medium-sized Enterprises PGO Prosecutor General’s Offi ce CTE Career and Technical Education R RLA Regulatory Legal Act D DSA District State Administration S SAPO Specialized Anticorruption Prosecutor’s offi ce E EDC Electronic Digital Signature SE State Enterprise E-governance Electronic Governance SFS State Fiscal Service SIB State Investigation Bureau H HACC High Anti-Corruption Court SME Small and Medium-sized enterprises HQCJU High qualifi cation comission of judges of Ukraine SSQE Single State Qualifi cation Examination HRMIS Human Resources Management Information System U UBO Ultimate Benefi cial Owners

J JSRSAP Justice Sector Reform Strategy and Action Plan 2015-2020 www.kmu.gov.ua www.rdo.in.ua www.facebook.com/KabminUA/ www.facebook.com/ReformsDeliveryOfficeCMU/ [email protected]

Reforms Delivery Offi ce of the CMU is ﬁ nanced from the Ukraine Stabilisation and Sustainable Growth Multi-Donor Account (MDA) managed by the EBRD. Contributors to the Ukraine MDA are Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Poland, Sweden, Switzerland, the United Kingdom, the United States of America and the European Union, the largest donor.