UKRAINIAN ENTREPRENEURS FACE SERIOUS LEGAL PROBLEMS MORE OFTEN THAN FINANCIAL ONES.
AND CAN SOMETIMES LEAD TO THE CLOSURE OF THE ENTERPRISE.
OF COURSE, THE PANDEMIC HAS ADDED TO THE DIFFICULTIES: 43% OF ENTREPRENEURS AT THE END OF 2020 ASSESSED THE RISK OF THEIR BANKRUPTCY AS HIGH.
THIS IS THE DATA FROM THE EU PROJECT “PRAVO-JUSTICE”.
MEANWHILE, SMALL AND MEDIUM-SIZED ENTERPRISES ACCOUNT FOR MORE THAN 90% OF ALL ENTERPRISES IN UKRAINE AND HAVE A SIGNIFICANT IMPACT ON THE DEVELOPMENT OF THE STATE.
WHAT ACTIONS ARE NEEDED BY THE GOVERNMENT AND PARLIAMENT TO ENSURE THAT SUCH BUSINESSES DEVELOP ACCORDING TO THE BEST EUROPEAN STANDARDS? The number of small and medium-sized businesses in Ukraine exceeds 1.5 million, and they employ more than 60% of the working population.
Therefore, the state simply cannot ignore this part of the private sector: therefore, parliamentarians and ministers should pay special attention to the problems of small and medium-sized enterprises, comments Dovydas Vitkauskas, Head of the EU Pravo-Justice Project. “It is very important to recognize their role and understand that without small and medium-sized businesses it is really difficult to expect gradual socio-economic development of the state,” said Dovydas Vitkauskas. The consequences of legal problems can be fatal, comments coordinator of the Chernivtsi Regional Council for Justice Reform and lawyer Iryna Butyrska. From raider seizure of land or crops or termination of the lease of premises to revocation of the license and closure of the enterprise. After all, small businessmen often do not have a cash “airbag,” so they cannot survive turbulence for long. “Legal problems can block the activities of small and medium-sized businesses and usually inevitably entail negative economic consequences, such as the cost of a lawyer or the cost of paying certain fines,” – says Iryna Butyrska.
Передусім за результатами опитування підприємці відзначають три головні правові проблеми, з якими вони стикаються.
Перша й найбільша – спори з клієнтами та бізнес-партнерами.
У них беруть участь більше третини бізнесменів.
Проблеми з державою – в основному ліцензування та оподаткування – виникають у 16-18%.
Ще одна група проблем – рейдерство та шахрайство чи проблеми з землею.
Вони виникали у 22% опитаних.
При цьому остання група проблем є специфічною саме для українського підприємництва: у країнах Західної Європи їх майже немає, розповідає керівник Проєкту ЄС «Право-Justice» Довідас Віткаускас. Причина – недосконалість українського законодавства. «Якщо ми говоримо про рейдерство чи шахрайство – цієї проблеми у країнах Західної Європи не існує або вона мінімальна, – підкреслює Довідас Віткаускас.
– The reason is the lack of data security in Ukraine, both in terms of technical conditions and legal presumptions.
Ukraine still functions on the basis of documents.
You come to an institution with a document, and a presumption is created on its basis, and it may be unlawful.
In the Scandinavian and Baltic countries, legal presumptions are created not by documents but by data in electronic registers.
Therefore, a person who comes with a paper document will not persuade the state authorities in his or her favor, and this is very important in protecting property rights, property rights, and business rights. “. Dovydas Vitkauskas emphasizes that the best European countries according to the Doing business rating have long implemented e-government. It is not enough for the Ukrainian authorities to proclaim the “State in a Smartphone”; gradual steps are needed to implement this concept. To do this, first of all, the Verkhovna Rada should adopt the law on registries, which has been registered for two years, emphasizes the head of the EU Pravo-Justice Project. “In order to have a ‘State in a Smartphone’, the role of the state needs to be more consumer-oriented – to people and, of course, to business as a key consumer of public services,” says Dovydas Vitkauskas.
– The government is taking positive steps: but there are still some structural errors.
For example, the registers should be organized in terms of who collects what data.
Security and proper protection of electronic data must be ensured.
Currently, registries are scattered across different ministries: there are more than a hundred registries in Ukraine today.
And each ministry manages them as it sees fit, without coordination.
This makes it very difficult to guarantee the quality and security of the data collected “.
Business in Ukraine still suffers from the lack of a level playing field, emphasizes Dovydas Vitkauskas. The state itself often fails to pay debts to the private sector: both the authorities and state-owned enterprises. “In Ukraine, the private sector is discriminated against on a daily basis in favor of state-owned businesses that do not pay their debts, do not go through bankruptcy proceedings, and hide financial problems from society,” comments the head of the EU Pravo-Justice Project.
– ” And in general, the number of state-owned enterprises in Ukraine is too high: while in European countries there are no more than 100, in Ukraine there are 3500.
With the support of international partners, Ukraine has already made progress towards a rule-of-law state with good business conditions, emphasizes Dovydas Vitkauskas.
. “In particular, the Bankruptcy Code has been adopted, which allows for a transparent and fair procedure. In addition, the moratorium on debt collection from state-owned enterprises has been lifted: although the document still applies to amounts up to one hundred thousand hryvnias, this is progress, experts say. Also, a few years ago, private bailiffs started operating in Ukraine, and they are five times more efficient than state bailiffs. International and domestic lawyers are convinced that small and medium-sized businesses should be accountable but free. In these conditions, the introduction of a mediation mechanism, i.e. pre-trial dispute resolution, is effective for resolving the largest category of disputes – with customers and business partners. The relevant draft law has already been adopted in the Ukrainian parliament in the first reading. ” Disputes between business partners are first resolved through negotiations, and this is very good, and if negotiations have not led to anything, then in a commercial court. Although commercial courts try to resolve the issue as quickly as possible, the process still takes at least three months. A good way to resolve disputes with partners would be to introduce the institution of mediation: pre-trial dispute resolution with the help of a mediator. And now it is planned to introduce such a mechanism“, says Iryna Butyrska. In general, a dialog between entrepreneurs and the legal community is important for business self-regulation, emphasizes Dovydas Vitkauskas, the head of the EU Pravo-Justice Project. He urges businessmen to be not only recipients of public services, but also active participants in lawmaking and reforms, and to make their own proposals. For effective self-regulation of business, the state needs to do active legal education, emphasizes Iryna Butyrska, coordinator of the Chernivtsi Regional Council for Justice Reform. For example, lawyers and civil servants can prepare video displays explaining changes in laws and algorithms of actions. After all, entrepreneurs solve most legal problems on their own: according to the above survey, only 6% of small and medium-sized businesses have a full-time lawyer. Efforts of both parties are required for successful interaction between the state and business, experts of the EU Pravo-Justice Project emphasize. Further deregulation of entrepreneurship, combined with business accountability, and the realization by government agencies that they should help citizens and make business activities easier and more transparent, rather than just control and punish, are considered particularly important steps to improve the business climate in Ukraine. Oksana Viter for NV