Ukraine and the Association Agreement: How to Prevent a Storm?

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Business Climate

On May 31, the Verkhovna Rada registered a draft law amending the Law "On Public Procurement" and some other laws of Ukraine related to procurement monitoring64. The document received the required opinions from the Parliament Committee on Economic Policy and the AMCU with recommendations to adopt the law in principle in the first reading, which has not been done. As one of the Strategy implementation steps, the ProZorro electronic procurement system was launched in the country on August 1, 2016. This online procurement system allows monitoring the whole process of public procurements, simplifying access for businesses. As of late December 2016, ProZorro helped to save UAH 19.34 billion65, the integration of open state registers, public monitoring, and intensive promotion of public procurement are planned for 2017 to further develop ProZorro66. An integrated part of the ProZorro web portal is an analytical resource whose creation and launch was planned in the Strategy for 2016. The analytical module uses all available information about already announced tender competitions and allows their comprehensive analysis based on the following criteria: below-threshold and above-threshold procurements, competitive or noncompetitive, currently underway or completed, or failed. It is also possible to see and explore the tender competition dynamics: their number and total amount; for the whole period since the launch of the system or for a specific period, and by regions. Generally speaking, the analytical module automatically calculates the total amount saved for the system's entire period in operation, summarizing the difference between the asking price for a product or service and its final selling price67. In addition, the dozorro system has been created to monitor procurements and officially notify the regulatory agencies of any possible violations. The web portal allows civil society activists and the media to discuss a specific tender competition with suppliers and give them an expert opinion about correct wordings in the tender documents, etc. In addition, contracting authorities may not only evaluate a particular supplier, but also analyze the feedback from business and correspondingly adjust their procurement process68. To further improve the procurement system, Ukraine and the EU discussed the mutual integration of public procurement websites to extent access to information and allow for systemic analysis. The EU public procure64 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=59264 65 http://bi.prozorro.org/sense/app/fba3f2f2-cf55-40a0-a79f-b74f5ce947c2/sheet/HbXjQep/state/analysis 66 https://prozorro.gov.ua/ua/pro-reformu/#etapy 67 http://bi.prozorro.org/sense/app/fba3f2f2-cf55-40a0-a79f-b74f5ce947c2/sheet/HbXjQep/state/analysis 68 http://dozorro.org/

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