Ukraine: liberalisation of the grain market

25 April 2014 the acting president of Ukraine, Oleksandr Turchinov, signed the Law of Ukraine "On Amending Certain Legislative Acts of Ukraine with Respect to Reduction of the Number of Permitting Documents" (Law No. 1193-VII dated 9 April 2014), hereinafter – the “Deregulation Law”. The Deregulation Law provides for the repeal of a great number of permitting (licensing) documents, including the long-awaited abolishment of the mandatory certification in respect of grain operations.

The international agribusiness community should welcome the Deregulation Law, as it not only helps to liberalise the grain market, but also to improve its efficiency. The repeal of such permitting (licensing) documents as:

(i) a certificate of compliance for grain and grain processing product storage services; and
(ii) a quality certificate for grain and grain processing products,
is a much-needed initial step toward changing the state policy of near-total influence over the grain market.

This positive move will reduce the number of permits that are required for conducting agribusiness activities in Ukraine. In addition, the non-mandatory certification of grain operations corresponds to global best agribusiness practices.

Repeal of these certificates means that:

• grain warehouses in the territory of Ukraine shall no longer be obliged to undergo certification procedures (previously, unless certification was attained, a warehouse should not have (officially) accepted grain for storage);
• export and import operations, as well as domestic grain shipments, may be performed without the grain and its processing products quality certificates (previously these were necessary for any such operations, except for transit operations within the territory of Ukraine and transportation of seed grain); and
• any provisions and articles relating to the procedures for the issuance, termination, or revocation of certificates, or responsibility for non-compliance with certification requirements, etc. shall be removed from the Law “On Grain and the Grain Market in Ukraine”.

The Deregulation Law became effective on 26 April 2014.

Law: the Law of Ukraine "On Amending Certain Legislative Acts of Ukraine with Respect to Reduction of Permitting Document Number" No 1170-VII. Of 27 March 2014.