At its meeting, the Parliamentary Committee on Economic Development recommended the Parliament of Ukraine, taking into account certain proposals, to adopt in the first reading the Draft Law 5648, which amends the Law of Ukraine “On State Aid to Undertakings” and other legislative acts of Ukraine on improving control and monitoring of State Aid to undertakings.
The document allows to bring national legislation in line with the EU acquis and the rules of monitoring and control of State Aid, enshrined in the Association Agreement.
Main novelties of Draft Law 5648:
- the criterion of impact on international trade between Ukraine and the EU countries is added. It will allow narrowing the range of support measures that may fall under the definition of “State Aid”;
- an establishment of a definition of “undertaking” that is narrower than that provided by the Commercial Code which allows to narrow the scope of the Law application to undertakings in general;
- an establishment of a definition of “economic activity” that is narrower than the business activity (activity of an undertaking) to which the Law will apply;
- an establishment of a definition of “advantage”, which is necessary for the correct qualification of State Aid;
- the provisions on minor state aid and services of general economic interest are detailed, namely, the possibility for state or local authorities to determine them independently is established;
- an effective division of authority between the AMCU`s bodies is established for the efficient and prompt consideration of State Aid notifications and cases.
The Draft Law will bring Ukraine closer to the EU legislation in the field of State Aid, will positively affect the functioning of the system for monitoring and control of State Aid in Ukraine, will simplify law enforcement for both state authorities and undertakings, and will allow to channel the focus of the country on larger and more complex cases of State Aid affecting trade with the EU.
To be noted, Draft Law 5648 was registered by the Parliament of Ukraine on 10.06.2021. In July 2021, the Draft Law was supported by the Parliament`s Committee on Ukraine's European Integration.