EU-Ukraine action plan

   
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    1. Introduction
    The enlargement of the European Union on 1 May 2004 has brought a historical shift for the Union and Ukraine in political, geographic and economic terms. The EU and Ukraine now share a border and, as direct neighbours, will reinforce their political and economic interdependence. Enlargement offers the opportunity for the EU and Ukraine to develop an increasingly close relationship, going beyond co-operation, to gradual economic integration and a deepening of political cooperation. The European Union and Ukraine are determined to enhance their relations and to promote stability, security and well-being. The approach is founded on shared values, joint ownership and differentiation. It will contribute to the further stepping up of our strategic partnership.
    The European Union and Ukraine are determined to work together, through the implementation of this European Neighbourhood Action Plan, to help ensure that no new dividing lines are drawn in Europe.
    Ukraine and the European Union agreed to enter into intensified political, security, economic and cultural relations, including cross border co-operation and shared responsibility in conflict prevention and conflict resolution.
    The pace of progress of the relationship will acknowledge fully Ukraine’s efforts and concrete achievements in meeting commitments to common values.
    This Action Plan is an important new step in this process. It covers a timeframe of three years. Its implementation will help fulfil the provisions in the Partnership and Cooperation Agreement (PCA) as a valid basis for EU-Ukraine cooperation, and will encourage and support Ukraine’s objective of further integration into European economic and social structures. Implementation of the Action Plan will significantly advance the approximation of Ukrainian legislation, norms and standards to those of the European Union. It will also build solid foundations for further economic integration, including through joint efforts towards an EU-Ukraine Free Trade Area following Ukraine’s accession to the WTO, on the basis of the adoption and implementation of economic and trade-related rules and regulations with the potential to enhance trade, investment and growth. The Action Plan will furthermore help to devise and implement policies and measures to promote economic growth and social cohesion, to raise living standards and to protect the environment, thereby contributing to the long-term objective of sustainable development.
    Ukraine and the EU will work together in implementing this Action Plan. As confirmed in the EU’s Common Strategy on Ukraine, the European Union acknowledges Ukraine’s European aspirations and welcomes Ukraine’s European choice.
    
    
    New partnership, economic integration and cooperation perspectives
    The European Neighbourhood Policy opens new partnership, economic integration and cooperation perspectives.
    • • The perspective of moving beyond cooperation to a significant degree of integration, including through a stake in the EU’s Internal Market, and the possibility for Ukraine to participate progressively in key aspects of EU policies and programmes.
    • • An upgrade in the scope and intensity of political cooperation;
    • • The opportunity for convergence of economic legislation, the opening of economies to each other, and the continued reduction of trade barriers which will stimulate investment and growth;
    • • Increased financial support: EU financial assistance for Ukraine will be available to support the actions identified in the present document. The Commission is furthermore developing a new European Neighbourhood and Partnership Instrument (ENPI), which will provide assistance to Ukraine also covering cross-border and transnational cooperation between Ukraine and the Member States. There will also be support through the European Investment Bank for projects involving infrastructure investment;
    • • Possibilities of gradual opening of, or reinforced participation in, certain Community programmes, promoting cultural, educational, environmental, technical and scientific links;
    • • Support for legislative approximation to meet EU norms and standards, including technical assistance, twinning and targeted advice and support through a mechanism such as TAIEX;
    • • Deepening trade and economic relations, including review of the feasibility of the establishment of an FTA following Ukraine’s accession to the WTO.
    • • Consideration will be given to the possibility of a new enhanced agreement, whose scope will be defined in the light of the fulfilment of the objectives of this Action Plan and of the overall evolution of EU – Ukraine relations. The advisability of any new contractual arrangements will be considered in due time.
    
    Priorities for Action
    This Action Plan sets out a comprehensive set of priorities in areas within and beyond the scope of the Partnership and Cooperation Agreement. Among these priorities, all of which are important, particular attention should be given to:
    • • Further strengthening the stability and effectiveness of institutions guaranteeing democracy and the rule of law;
    • • Ensuring the democratic conduct of presidential (2004) and parliamentary (2006) elections in Ukraine in accordance with OSCE standards;
    • • Ensuring respect for the freedom of the media and freedom of expression;
    • • Develop possibilities for enhancing EU – Ukraine consultations on crisis management.
    • • Enhanced co-operation in the field of disarmament and non-proliferation;
    • • Enhanced co-operation in our common neighbourhood and regional security, in particular working towards a viable solution to the Transnistria conflict in Moldova, including addressing border issues;
    • • Accession to the WTO;
    • • Gradual removal of restrictions and non-tariff barriers that impede bilateral trade and implementation of the necessary regulatory reforms;
    • • Improving the investment climate, through non-discriminatory, transparent and predictable business conditions, simplified administrative procedures and by the fight against corruption;
    • • Tax reform, improved Tax Administration and sound management of Public Finances;
    • • Establishing a constructive dialogue on visa facilitation between the EU and Ukraine, with a view to preparing for future negotiations on a visa facilitation agreement, taking account of the need for progress on the ongoing negotiations for an EC-Ukraine readmission agreement.
    • • Gradual approximation of Ukrainian legislation, norms and standards with those of the European Union; further reinforcing administrative and judicial capacity;
    • • Encourage dialogue on employment issues and best endeavours, in accordance with the PCA, to ensure that treatment of migrant workers does not discriminate on grounds of nationality.
    • • Full implementation of the Memorandum of Understanding on the closure of the Chernobyl nuclear power plant, including completing and starting-up of the ‘K2R4’ nuclear reactors, in compliance with the internationally accepted nuclear safety standards;
    
    Progress in meeting these priorities will be monitored in the bodies established by the Partnership and Cooperation Agreement.
    
    2.1. Political dialogue and reform
    Democracy, rule of law, human rights and fundamental freedoms
    In line with Ukraine’s international commitments and its strategic goal of further European integration, Ukraine will continue its internal reforms based on strengthening democracy, rule of law, respect for human rights, the principle of separation of powers and judicial independence, democratic election in accordance with OSCE and Council of Europe norms and standards (political pluralism, freedom of speech and media, respect for the rights of persons belonging to national minorities, non discrimination on grounds of gender, and on political, religious and ethnic grounds).
    1. Strengthen the stability and effectiveness of institutions guaranteeing democracy and the rule of law
      Ensure democratic conduct of presidential (2004) and parliamentary (2006) elections, in accordance with OSCE standards and OSCE/ODIHR recommendations, including on the media;
      Ensure that any further legislative reforms be conducted in line with international standards;
      Continue administrative reform and strengthening of local self-government, through appropriate legislation, in line with those standards, contained in the European Charter on Local Self Government
    
    2. Further judicial and legal reform, so as to ensure the independence of the judiciary and strengthen its administrative capacity, and to ensure impartiality and effectiveness of prosecution
      Ensure implementation of recent reforms of civil, criminal and administrative codes and codes of procedure, based on European standards;
      Continue the reform of the prosecution system in accordance with the relevant Council of Europe Action Plan (and supported by the European Commission/ Council of Europe Joint Programme);
      Address reported shortcomings in the work of the law enforcement organs and prosecution;
      Complete and implement reform of the court system to ensure independence, impartiality and efficiency of the judiciary;
      Effective implementation of ECHR judgements;
      Enhance training of judges, prosecutors and officials in judiciary, administration, police and prisons, in particular on human rights issues (and supported by the European Commission/Council of Europe Joint Programme);
      Implement relevant actions envisaged in the EU-Ukraine Action Plan on JHA matters and the implementation scoreboard (see below, section 2.4)
    
    3. Ensure the effectiveness of the fight against corruption
      Join the Council of Europe Group of States Against Corruption (GRECO) and implement relevant recommendations, including a revision of the Ukrainian national strategy for the fight against corruption;
      Promote transparency and accountability of the administration, in particular concerning the reform of the civil service based on European standards;
      Implement relevant measures as foreseen under the JHA scoreboard
    
    4. Ensure respect of human rights and fundamental freedoms, in line with international and European standards
      Promote adherence to and ensure implementation of core UN and Council of Europe Conventions and related optional protocols. [1]
    
    5. Foster the development of civil society.
      Ensure respect of freedom of association and involvement of the citizens in the decision making process, including through civil society organisations;
    
    6. Ensure respect for the freedom of the media and expression.
      Further improve and enforce the legal and administrative framework for freedom of media. taking into account relevant Council of Europe recommendations;
      Ensure effective respect of freedom of media, including journalists’ rights.
    
    7. Ensure respect for rights of persons belonging to national minorities
      Continue efforts in designing relevant legislation and effectively protecting the rights of persons belonging to national minorities, based on European standards;
      Continue close cooperation between government authorities and representatives of national minorities;
    
    8. Prevention of ill-treatment and torture
      Further improvement of the legal basis and practice in the sphere of detention, in particular pre-trial detention, in order to address effectively the problem of arbitrary detentions, detention conditions and ill-treatment of detainees by law enforcement officials, including through provision of training. Implement European Committee for the Prevention of Torture (CPT) recommendations;
      Enhance the human rights training of police;
    
    9. Ensure equal treatment
      Continue efforts to ensure the equality of men and women in society and economic life;
    
    10. Ensure respect of Children’s rights
      Implement the recommendations by the UN Committee on the Rights of the Child of 2002;
      Ensure full implementation of juvenile justice standards in line with relevant international standards;
      Exchange of information on the results of the implementation of the UN and Hague Conventions on protecting the rights of the children in the EU and Ukraine.
    
    11. Ensure respect for trade unions’ rights and core labour standards
      Continue efforts to ensure trade unions’ rights and core labour standards, based on European standards and in accordance with relevant ILO conventions.
    12. Ensure international justice
      Enhance co-operation to promote international justice and fight impunity, including through further support to the International Criminal Court and the establishment of a consultation mechanism on ICC’s activities and functioning;
      Establishing close cooperation aimed at elaboration of appropriate draft laws, necessary for ratification of the Rome Statute;
      Signing and ratification on the agreement on privileges and immunities of the ICC;
      Maintain co-operation within the framework of the Special Working Group on the Crime of Aggression and other special groups.
    Regional and international issues, cooperation on foreign and security policy, WMD non-proliferation and disarmament, conflict prevention and crisis management;
    13. Further strengthen and focus political dialogue and co-operation on foreign and security policy issues
      Improve working methods in established political dialogue formats, including through more focused and result-oriented agendas;
      Work with the EU to make multilateral institutions and conventions more effective, so as to reinforce global governance, strengthen coordination in combating security threats and address related development issues;
      Continue dialogue on implementation of the European Security Strategy;
      Develop possibilities for enhanced EU – Ukraine consultations on crisis management.
    14. Strengthen co-operation on regional and international issues, conflict prevention and crisis management
      Ukraine will continue its constructive efforts as mediator in the settlement process to solve the Transnistria conflict in Moldova;
      Further EU involvement in supporting the OSCE and mediators, including Ukraine, in the conflict resolution process on Transnistria, towards a viable solution;
      Ukraine will develop co-operation with Moldova on border questions, covering the entire Ukraine – Moldova border, including effective exchange of information about flow of goods and people across the common border.
      Active engagement in, and practical follow-up to, the trilateral expert talks involving Ukraine, Moldova and the European Commission;
      Further build on the good experience of Ukraine’s participation in the EUPM in Bosnia and Herzegovina and EUPOL in fYROM. Jointly identify opportunities for Ukraine’s participation in future ESDP operations.
      Further implement “Seville” Arrangements for Consultation and Co-operation between the EU and Ukraine in EU-led crisis management operations, including Ukraine’s participation in relevant crisis management exercises;
      Continue consultations on the possible EU use of Ukraine’s long haul air transport capacities.
      Conclude negotiations on an EU-Ukraine “Security Agreement” (procedures for the exchange of classified information);
      Conclude negotiations on an EU – Ukraine Agreement establishing a framework for the participation of Ukraine in EU crisis management operations (legal and financial modalities for possible participation by Ukraine in EU crisis management operations);
      Conduct consultations on sanctions applied by the EU.
    15. Further develop co-operation in addressing common security threats, including combating terrorism, non-proliferation of weapons of mass destruction and illegal arms exports
      Develop EU-Ukraine co-operation on the fight against and prevention of terrorism, in particular through implementation of the Justice and Home Affairs Action Plan.
      Co-operate to reinforce the role of the UN in the multilateral fight against terrorism, including through implementation of UNSC Resolutions 1373/01 and 1267/01, through implementation and enforcement of the UN Convention for the Suppression of the Financing of Terrorism
      Implement the standards laid down in the FATF’s recommendations on terrorist financing;
      Ensure respect for human rights in the fight against terrorism;
      Ukraine to take due account of the content and principles of the EU Code of Conduct on Arms Exports;
      Further develop co-operation in the fight against the trafficking of firearms and nuclear materials;
      Cooperate on non-proliferation of weapons of mass destruction , including on aspects related to the accession to and implementation of relevant international instruments and export control regimes, in the light of the EU WMD Strategy adopted by the European Council in December 2003 and the GAERC conclusions of 17 November 2003; Further improve an effective system of national export control controlling export and transit of WMD related goods, including WMD end use control on dual use technologies;
      Take steps to achieve ratification by Ukraine of the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and Their Destruction;
    Jointly address threats for security, public health and environment, posed by Ukrainian stockpiles of old ammunition, inter alia anti personnel land mines;
      Develop EU – Ukraine co-operation with regard to risk based customs control ensuring safety and security of goods imported, exported or in transit.
    2.2. Economic and social reform and development
    Functioning Market Economy
    1. Continue progress in the establishment of a fully functioning market economy, including price-formation, control of state aid, and a legal environment that ensures fair competition between economic operators.
    2. Further advance in gradual approximation of basic legislative and regulatory framework to that of EU, and ensure its effective implementation.
      Implementation of a strategy for approximating legislation on priority areas identified under PCA§51, including improvement of quality and consistency of drafting.
      On a basis of common understanding, finalise joint work for preparation of a scoreboard and on prioritisation for monitoring and assisting implementation.
      Eliminate inconsistencies in the existing economic and civil codes.
    3. Improve investment climate, including by ensuring transparency, predictability and simplification of regulation and its application.
      Carry out consultation with domestic and foreign economic operators on drawing up a work programme for further implementation of regulatory reform, aimed at reduction of administrative barriers to the development of business.
      Ensure uniform application of regulations across Ukraine at central and sub-central levels
      Adopt and implement a system of impact assessment of regulatory measures, consultation of stakeholders, and prior notification of regulatory changes to economic operators to ensure transparency (predictability of regulatory environment).
      Ensure full application of GATT Article X (referenced in PCA Article 16) and in particular:
    • • that Ukrainian authorities (including all administrative bodies) apply trade and investment legislation in an uniform way across the territory of Ukraine without discrimination between operators,
    • • that judicial review for trade and investment issues is streamlined, notably through the allocation of more resources to economic courts and through improved training of specialised judges, to allow for prompt, impartial and uniform review of administrative actions and appeal procedures for trade and investment issues.
    
    Monetary, exchange rate and fiscal policies
    4. Consolidate progress in macro-economic stabilisation and growth policies.
      Strengthen the independence of the National Bank of Ukraine including, if necessary, by amending the ‘Law on the National Bank’ so as to bring it in line with EU standards.
      Reinforce fiscal sustainability, including by implementing tax reforms and by taking measures to address medium-term trends in the pension system.
    
    Structural reforms
    5. Undertake consistent and far-reaching structural reform programme to further consolidate the functioning of market economy.
      Implement privatisation programme, including large-scale privatisation, and increase transparency of privatisation process.
      Reduce the involvement of state in setting prices with a view to avoiding trade and economic distortions.
      Strengthening banking regulation and supervision. Intensify financial sector reform, including improvement of the functioning of the State Savings Bank.
      Develop the domestic securities markets and further improve the regulatory and supervisory framework for non-bank financial institutions.
      Adopt a new Joint Stock Company law improving the definition of the responsibilities of directors, managers and shareholders’ meetings, strengthening disclosure requirements, and increasing the protection of minority-shareholder’s rights.
      Adopt the accompanying legislation necessary for the effective implementation of the new Land Code. Remove current restrictions in article 82 of the Land Code to non-agricultural land ownership by Ukrainian legal entities with foreign stakeholders, including those with 100% foreign ownership.
    
    Social situation, employment, poverty reduction
    6. Strengthen dialogue and co-operation on social matters (as provided for in article 1 of the PCA); ensure a closer approximation of Ukraine to EU standards and practices in the area of employment and social policy.
      Engage in a dialogue on employment and social policy with a view to developing an analysis and assessment of the situation and to identifying key challenges and ways of bringing Ukraine’s policies and practices closer to EU standards (social and civil dialogue, health and safety at work, gender equality, labour law, employment policy, social protection, including social security issues and social inclusion).
      Monitor relevant legislative and policy development.
    7. Introduce effective employment creation and poverty reduction measures, aimed at a significant reduction in the number of people with income below the poverty line and improved social cohesion, including sustainable systems for education, health and other social services with access for all.
    
    Regional Development
    8. Reducing regional imbalances and improve local development capacities
      Introduce strategic planning at the national and regional levels in Ukraine and elaborate a draft State strategy of regional development up to 2015; and establish a legislative basis for promotion of regional development, including depressed territories.
    
    Sustainable development
    9. Promotion of sustainable development
      Take further steps towards completion of administrative structures and procedures to ensure strategic planning of sustainable development and co-ordination between relevant actors.
      Complete and adopt a national strategy on sustainable development, and take steps to ensure its implementation. Take steps towards completion of a long-term strategy.
      Take further steps for the integration of environmental considerations into other policy sectors, particularly industry, energy, transport, regional development and agriculture.
    
    2.3. Trade, market and regulatory reform
      Undertake first assessment of the impact of EU enlargement on trade between the EU and Ukraine during 2005 and regularly thereafter as appropriate.
    
    2.3.1. Movement of goods
    Trade Relations
    1. Full implementation of PCA commitments in sphere of trade in goods.
      Gradual removal of all export and import restrictions in the spirit of PCA title III and, following Ukraine’s accession to the WTO, ensure compliance, inter alia, with the provisions of GATT Articles XI, XII, XIV, XIX, XX, XXI.
      Gradual liberalisation of trade in steel products and gradual removal of export duties on ferrous scrap in line with the EU-Ukraine bilateral steel agreement, ahead of full liberalisation upon Ukraine’s accession to the WTO.
    
    2. Accession to the WTO
      Implementation of Ukraine’s bilateral commitments and of requirements of WTO rules (action defined below under specific sections)
      Address specific non-tariff issues raised by the EC, including through the appropriate commitments in the WTO Working Party report.
    
    3. Advance and implement the necessary administrative and macro-economic reforms envisaged under the PCA (sections 2.2 and 2.3 of the action plan refer). In accordance with article 4 of the PCA, and in the light of advances in economic reform and implementation of PCA commitments, consider jointly the feasibility the establishment of a Free Trade Area following Ukraine’ s accession to the WTO.
      Undertake review of the 1999 joint economic feasibility study on the establishment of a free trade agreement between the EU and Ukraine; and a review of progress on implementation of measures (July 2002).
      On completion of this review, hold consultations to agree next steps for both sides towards the above mentioned objective and to set out the priorities for the deepening of EU-Ukraine trade and economic relations.
    
    Customs
    4. Elaboration and implementation of customs legislation aligned with international and EU standards
      Finalize implementing legislation for the Customs Code, in line with the internationally recognised standards especially WTO agreements, in particular in the area of customs value, and with the EU Customs legislation.
      Further revision of the Customs Code, taking into account EU legislation and recommendations already made.
      Ukraine to adopt and keep up to date the Harmonised System in use, with a view to adopting the Combined Nomenclature in the longer term, as agreed in the PCA.
      Implement the principle of risk based customs control and set the necessary organisational framework
      Preparation and entry into force of customs-related legislation: provisions on customs control of precursors, counterfeit and pirated goods, dual use goods, and cultural goods.
    
    5. Improve functioning of customs service; simplify and modernise customs procedures at borders and inland
      Develop a single window approach for all international trade related documentation and control starting by increased co-operation between all agencies working at the border.
      Set up a mechanism to ensure regular consultation/ information of the trade community on import and export regulations and procedures.
      Adopt and implement a Customs Ethics Policy based on internationally recognised standards (Arusha Declaration).
      Provide additional training to customs officials, strengthen the computerisation of the customs administration and upgrade Customs laboratories.
    
    Standards, technical regulations and conformity assessment (EU harmonised areas)
    6. Continue the alignment of Ukraine with the EU and international regulatory and administrative practices and prepare for Ukraine’s participation in the EU internal market in selected priority industrial sectors
      Jointly identify priority sectors for alignment with EU and international regulatory practices and possible inclusion in an Agreement on Conformity Assessment and Acceptance of Industrial products, (ACAA), including through consultations with producers and exporters.
      Harmonise the necessary framework and sectoral legislation with the EU technical regulations in the priority sectors.
      Ensure transparency and predictability of the regulatory environment to the economic operators.
      Continue the revision of existing Ukrainian standards, providing for harmonization with international and European standards and for voluntary application.
      Reinforce institutional capacity on standardisation, accreditation, conformity assessment, metrology and market surveillance, integrating the Ukrainian institutions, to the extent possible, into the European and international structures. Continue the revision of institutional arrangements to avoid the concentration of functions within a single institution and related conflicts of interest.
      Approximate legislation on liability for defective products and general product safety.
      Gradually simplify procedures of conformity assessment of industrial products, in accordance with the requirements of the Technical Regulations (EU Directives), and with the objectives of avoiding compulsory certification of non-risk products and multiple testing of products.
      Consolidate and develop the market surveillance capacities of the Ukrainian institutions based on best practice of EU Member States.
    
    
      Elimination of restrictions and streamlined administration (EU non-harmonised areas)
    
    7. Facilitate the movement of goods through i) prevention of quantitative restrictions, ii) gradual elimination of import licences and iii) progressive removal, and prevention of new discriminatory measures. Improve institutional and administrative co-operation.
      Gradually eliminate non-automatic licensing requirements for certain goods, which are not justified under PCA article 20 or GATT articles XX and XXI.
      Harmonise remaining import licensing and registration requirements with those of the EU.
      Analyse legislation and administrative procedures in order to identify and progressively remove discrimination against imported products. Begin by reviewing national measures covering the weight, composition, labelling manufacture and description of products.
      Ensure effectiveness and training of enforcement authorities, including of the central administrative unit responsible for implementation of movement of goods.
      Ensure that interested parties (importers, exporters and manufacturers) are given an opportunity to identify problems and comment on draft legislation.
      Nominate a contact point to facilitate co-operation and improved information flow between the EU and Ukraine on national measures and obstacles that could hinder the movement of goods.
    Sanitary and phytosanitary issues
    8. Increase food safety for consumers and facilitate trade through reforms and modernisation of the sanitary and phytosanitary sectors.
      Ensure implementation of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures upon Ukraine’s accession to the WTO, including by nominating a central enquiry point and creating a rapid information system.
      Accede to the Codex Alimentarius Commission and the International Plant Protection Convention.
      Carry out a comparative assessment of the sanitary and phytosanitary control systems in Ukraine and the EU.
      Review list of measures to be taken for gradual convergence towards the principles of the EU sanitary and phytosanitary control legislation and institutions, accompanied by timetables and a financing plan. Advance effective reform in this area (e.g. clear division of competences of institutions, principles of Directive 96/22 on prohibition of substances and 96/23 on monitoring the residues of substances).
      Conduct comparative assessment of EU and Ukrainian legislation in the sphere of food hygiene, including food processing. If necessary draw up measures for legislative approximation in this area, accompanied by a financing plan.
      Progress in convergence with EU food traceability legislation; general food safety principles and requirements (Regulation 178/2002/EC); effectively implement the Hazard Analysis Critical Control Point system at enterprises and controlling bodies, including the fish industry.
      Review the national laboratory network and identify the national reference laboratories in the sanitary and phytosanitary sectors with special attention given to the necessary equipment and appropriate methods of analysis (residue testing) and prepare for their accreditation in compliance with ISO standards.
      In the light of progress on the above, jointly define steps towards veterinary and phytosanitary agreements.
    
    2.3.2. Right of establishment; company law and services
    Establishment and company law
    1. Full implementation of Title IV, Chapter II of the PCA, and in particular of the most favoured nation and national treatment principles (Conditions affecting establishment and operation of companies)
    
    a) Operation of companies:
      Establish a suitable environment for companies, e.g. adopt and implement effectively competition and bankruptcy legislation.
      Abolish discriminatory measures affecting the operation of EU and Ukrainian companies.
    • b) Establishment:
      Ensure full and effective implementation of most favoured nation and national treatment.
      Ensure that the conditions under which companies invested are maintained.
      Ensure that EU and Ukrainian subsidiaries or branches receive a treatment not less favourable than that granted to its own nationals (national treatment).
      Complete a review by Ukraine of national legislation to identify barriers to establishment with the aim of abolishing them.
      Remove progressively restrictions on establishment.
      Ensure effectiveness of a central co-ordinating body facilitating establishment.
    • c) Ukrainian legislation in the automobiles sector:
      Alignment of Ukrainian legislation in the automobiles sector with the PCA provisions, taking into account relevant WTO commitments of Ukraine.
    d) Company law:
      Improve the competence and independence of auditors.
      Converge with and ensure effective implementation of key principles in relevant international and EU rules and standards.
      Create the unified state register of legal persons and physical persons-entrepreneurs companies and ensure publication of information on the organisation and financial situation of companies. Define and ensure effective activity of an administrative authority, which ensures the control of the incorporation of a company or the legality of certain acts.
      Encourage adoption of a code on corporate governance.
    
    Services
    2. Gradual abolition of restrictions to progressively allow the supply of services between the EU and Ukraine in certain sectors, in line with PCA commitments in Title IV, Chapter III (Cross-border supply of services).
      Preparation for the implementation of Ukraine’s commitments on services in WTO accession negotiations.
      Complete a review of national legislation by Ukraine to identify barriers to the provision of services. Removal of obstacles identified, taking into account WTO services commitments.
      Ensure co-ordination between all relevant administrative entities in order to facilitate the supply of services and to eliminate barriers to trade in services.
      Ensure effective implementation of legislation that sets out basic principles of non-discrimination, introducing more detailed secondary or sector-specific legislation as necessary.
      Financial services:
    - - Comply with the recommendations of the IMF's Financial Sector Assessment Program (FSAP) of November 2003.
    - - Put into place and ensure effective implementation of a prudential regulatory framework for financial markets and supervision equivalent to that existing in the EU.
    - - Ensure effective implementation of independent and well-trained supervisory authorities in accordance with internationally recognised standards.
    - - Put into place and ensure effective implementation of adequate company law, accounting and governance rules.
    
    2.3.3 Movement of capital and current payments
    1. Full implementation of PCA commitments under Title V (current payments and capital).
      Ensure the free movement of capital relating to direct investments or other investments made in accordance with the provisions on establishment (Chapter II of Title IV) and ensure application of the standstill clause of Article 48.3;
      Guarantee the protection of foreign investments as well as the liquidation or repatriation of these investments and of any profits stemming there from.
      Hold consultations on the goal of liberalisation of other capital movements in line with Article 48.4.
    
    2.3.4 Movement of persons including movement of workers
    Equal treatment of migrant workers (employment and working conditions)
    
    1. Full implementation of commitments under Article 24 of PCA (Labour conditions)
      Ensure full application of the best endeavour clause by abolishing all discriminatory measures based on nationality which affect migrant workers, as regards working conditions, remuneration or dismissal.
    
    Co-ordination of social security systems
    
    2. Full implementation of provisions on co-ordination of Social Security under Article 25 and 26 of PCA.
      Continue process of concluding Agreements with Member States on the full application of provisions on coordination of social security as contained in Article 25 and subject to the conditions of Article 26 of PCA.
    
    2.3.5 Other key areas
    
    Taxation
    1. Development and implementation of tax systems and their institutions based on international and European standards.
      Carry out tax reform, including:
    • • Adoption and implementation of VAT and excise-duty legislation compatible with the PCA and WTO norms;
    • • Ensure the compatibility of Free Zones with WTO rules in accordance with Ukraine’s WTO commitments, and begin process of alignment of Ukrainian legislation on Free Zones with EU legislation.
    • • Solving the issue of current VAT refund backlog and preventing re-accumulation of arrears, including through ensuring efficient procedures and allocating sufficient resources.
    • • Eliminate discriminatory treatment in the use of promissory notes, including through the appropriate legislative amendments.
      Implement a comprehensive strategic plan for the State Tax Administration, defining the necessary administrative structures and procedures, identifying its needs in terms of financial, human, logistic and IT resources.
      As Ukraine comes closer to the internal market, adoption of and compliance with the principles of the EU Code of Conduct for Business Taxation.
    
    Competition policy
    2. Implement, and build upon, commitments on state aid under Art.49.2.2 and 49.2.3 of the PCA, and develop legislation and control regime compatible with that of the EU
      Draft and adopt state aid legislation, including in particular:
    - - a definition of state aid compatible with that of the EU;
    - - a principle of prohibition of state aids which distort trade between Ukraine and the EU.
    - - the establishment of transparency as regards state aid granted in Ukraine (particularly by establishing a list of all aid grantors and an independent surveillance body, a regular report on the amounts, types and recipients of aid).
    
    3. Implement, and build upon, the commitment under Article 49.2.1 of the PCA by ensuring adequacy and compatibility with the EU, of the domestic anti-trust legislation and control regime.
      Assess adequacy, and compatibility with EU, of current legislative framework, in practice, in particular its respect of the principles of non-discrimination, transparency and procedural fairness;
      Continue to reinforce independence of the Anti-monopoly Committee, ensure adequate legal powers and resources; and reinforce staff training.
    
    Intellectual and industrial property rights
    4. Ensure a level of protection similar to that in the EU, including effective means of enforcement, in line with provisions in Article 50 of the PCA.
      Ensure implementation and effective enforcement of TRIPS compliant legislation upon Ukraine’s accession to the WTO.
      Enforce legislation on trade marks and geographical indications.
      Continue harmonisation of legislation to EU legislation in the sphere of intellectual and industrial property rights protection.
      Ensure effective implementation of sanctions of infringements of intellectual and industrial property rights.
      Encourage the establishment and the effective functioning of the necessary associations of rights holders and establish a dialogue with them and the users of IP.
      Strengthen enforcement authorities (administrative and judicial) and ensure proper access to judicial review.
      Improve administrative co-operation between relevant Ukrainian national authorities and with third country authorities.
      Take effective measures against counterfeit/pirated goods in specifically targeted sectors.
    
    Public procurement
    5. Develop conditions for open and competitive award of contracts, in particular through calls for tenders, in line with the provisions of Article 55 of the PCA.
      Improve the functioning of the current system through increased transparency, information and training, limited use of exceptions, access to judicial review and appropriate legislative adjustments.
      Continue approximation to EU legislation on public procurement in order to ensure effective implementation of the key principles of transparency, non-discrimination, competition and access to legal recourse. These principles should apply to procurement for goods, services and works across all relevant public bodies at all levels.
      Ensure the possibility of independent/judicial review in the event of disputes.
      Ensure that contracting authorities and the business community are well informed about public procurement procedures, including through the publication of all relevant legislation and administrative rulings.
      Effective dissemination of tendering opportunities and time-limits (above agreed thresholds), which allow EU as well as domestic suppliers to prepare and submit tenders.
      Enhanced co-operation through exchanging of experience, information about best practice and regulatory frameworks.
      Co-operation with the EU in the application of modern E-tendering technologies in public procurement.
      Facilitate the effective, reciprocal and gradual opening of the public procurement markets
    
    Statistics
    6. Adoption of statistical methods fully compatible with European standards in relevant areas and advance the institution building of the State Statistics Committee of Ukraine
      Elaborate a short and medium term development strategy for harmonisation with European standards in relevant statistical areas;
      Ensure that statistical legislation includes the fundamental principles of impartiality, reliability, transparency and confidentiality of individual data;
      Improve the quality and coverage of the business register, by including also individual entrepreneurs;
      Introduce priority European statistical classifications and implement them in all statistical domains;
    
    Financial Control
    7. Sound management and control of public finances
    Treasury Accounting:
      Improve transparency of public finance management, including by developing and starting implemention of a strategy to modernize the Treasury accounting system.
      Take further steps to integrate the extra-budgetary funds into the Budget.
    
    Public Internal Financial Control:
      Development of the concept of development and restructuring of the system of public financial control and audit in Ukraine.
      Establish legislative framework for public internal financial control.
      Gradual harmonisation with the internationally agreed standards (IFAC, IIA, INTOSAI) and methodologies, as well as with EU best practice for control and audit of public income, expenditure, assets and liabilities.
    
    External Audit and Control
      Ensure the adequate functioning of the Supreme Audit Institution (Accounting Chamber) in line with the internationally accepted external audit standards (International Organisation of Supreme Audit Institutions).
      Promote the development of sufficient administrative capacity to prevent and fight effectively against fraud and other irregularities affecting national and international funds, including the establishment of well-functioning co-operation structures involving all relevant national entities.
      Ensure effective cooperation with the relevant EU Institutions and bodies in the case of on-the-spot checks and inspections related to the management and control of EU funds.
    
    Enterprise policy
    8. Develop a dialogue on enterprise policy aiming at the improvement of the administrative and regulatory environment of companies; develop the Ukrainian legislative and administrative framework for SME promotion, in line with art.73 of the PCA
      Implement a national registration system for companies, based on best practice in EU Member States and possibly leading to the accession of Ukraine to the European Business Register.
      Launching of a dialogue, involving the Commission and Ukrainian administration, business and academia, aiming at the exchange of information, best practices, and identification of difficulties in a few priority areas of enterprise policy. This dialogue should be based on a common policy reference framework, such as the European Charter for Small Enterprise
      Promote the exchange of experience and of best practice on enterprise policy, aiming at developing benchmarking and evaluation exercises on specific sectors (e.g. education and training for entrepreneurship; facilitation of access to financing for SMEs; promotion of investment and innovation; improvement of administrative and regulatory environment).
      Promote the exchange of experience on industrial restructuring, especially on the social effects of restructuring and state aid best practice.
      Explore possibility of opening of one or more Euro-Info-Correspondence Centres (EICC).
    
    2.4. Co-operation in Justice and Home Affairs
    A specific EU Action Plan on Justice and Home Affairs with Ukraine of 10 December 2001 defines the areas for co-operation in this field. As provided for by that Action Plan, a Scoreboard has been set up in consultation with the Ukrainian authorities as a tool for implementation, monitoring, evaluation and definition of annual priorities.
    Co-operation in the field of Justice and Home Affairs in the context of the European Neighbourhood Policy will be based on this EU Action Plan on Justice and Home Affairs with Ukraine and it’s implementing Scoreboard.
    The priorities for co-operation in the field of Justice and Home Affairs are defined on an annual basis by the EU-Ukraine JHA Ministerial Troika meeting. The first EU-Ukraine JHA Ministerial Troika of November 2002 assigned priority in cooperation on Justice and Home Affairs to readmission and migration, border management, money laundering, trafficking in human beings, drugs as well as corruption, preventing and fighting sexual exploitation of women, children and child pornography.
    In the context of EU enlargement and the European Neighbourhood Policy, a constructive dialogue on visa facilitation between the EU and Ukraine will be established, with a view to preparing for future negotiations on a visa facilitation agreement, taking account of the need for progress on the ongoing negotiations for an EC-Ukraine readmission agreement.
    According to the JHA Action Plan, the EU Council should review the operation of this Action Plan towards the end of 2005, and may decide to carry out further reviews in relation to this matter. Based upon such reviews and developments in Ukraine, new objectives and actions could be considered to be added to the Action Plan with Ukraine in the context of the European Neighbourhood Policy.
    
    2.5. Transport, energy, information society and environment
    Transport
    1. Elaborate and start implementing a national transport strategy, including transport infrastructure development
      Further elaborate a concept for a national sustainable transport policy for the development of all transport modes, coherent with the EU’s White Paper on transport.
      Develop an infrastructure policy in order to identify and evaluate the priority infrastructure projects in various sectors and continue participation in the joint development of the Pan-European Corridors and Areas as well as in the TRACECA programme.
      Identify and commit sources of financing and adopt financing strategies, also in light of the decision for the extension of EIB mandate. Address issues of infrastructure financing (e.g. Public/Private Partnerships, shadow-tolling, etc.).
      Develop co-operation in satellite navigation (including joint research actions and applications)
    
    2. Implement selected measures and reforms in the road transport sector
      Ensure that international and national transport sector is regulated in terms of access to the profession; Introduce and enforce mandatory driving times and rest periods in the international transport sector complying with international standards.
      Adopt and start implementation of an action plan for improving road safety.
    3. Implement selected measures and reforms in the railway transport sector
      Improve efficiency of freight transport services (including issues of border crossing procedures). Promote multi-modal services, address issues of interoperability.
      Further develop OSJD/OTIF co-operation.
    
    4. Implement selected measures and reforms in the aviation sector
      Determine an effective model of negotiations on bilateral aviation agreements concluded with EU Member States in order to include the Community designation clause, taking into account the horizontal mandate given to the Commission.
      Obtain full member status in the European Joint Aviation Authorities (JAA), explore possibilities for arrangements in the field of aviation safety with a view to the stated Ukrainian objective to become a member of EASA.
      Co-operate on safety and security issues
    
    5. Implement selected measures and reforms in the maritime and inland waterway sectors
      Co-operate with EU with a view to aligning maritime safety policies.
      Encourage the restructuring of the state-owned port sector (separating operational and commercial functions).
      Implement relevant international IMO (International Maritime Organisation) conventions; pursue effective enforcement in the areas of Port State Control and Flag State implementation as well as resolutions of the Maritime Environment Protection Committee on tanker safety.
      Participate actively in the promotion of the Danube aiming at fully using its potential as one of the backbones of European inland waterway transport.
    
    Energy
    6. Adoption of an overall energy policy converging towards EU energy policy objectives.
      Prepare and adopt, by the appropriate instance, sub-sectoral energy policy documents with an indication of possible financing sources for implementation
      Reinforce EU-Ukraine energy policy co-operation
      Explore the possibility for participation in the Intelligent Energy -Europe programme
    
    7. Gradual convergence towards the principles of the EU internal electricity and gas markets.
      Establish a list of measures for gradual convergence towards the principles of the EU internal electricity and gas markets, including regarding the regulator, accompanied by time schedules and a financing plan. Reciprocity issues to be addressed appropriately (market opening, environmental norms, internationally accepted nuclear safety standards)
      Price developments towards convergence of the Ukrainian and the EU markets.
      Adopt and implement a law developing the National Electricity Regulatory Commission.
      Further develop an internal gas sector restructuring plan.
      Further restructure the electricity sector including debt restructuring and adoption of the relevant debt law.
      Participation in EU related energy events as appropriate, including gradual involvement in the European Gas and Electricity Regulatory fora.
    
    8. Progress regarding energy networks.
      Increase performance of networks and reduction of network losses (oil, gas, electricity).
      Develop infrastructures for the diversification of oil and gas supplies. This should include, inter alia, the Odessa-Brody-Poland oil pipeline (Ukraine Poland Agreement should be implemented further).
      Feasibility analysis of electricity interconnection of Ukraine with the UCTE synchronous network.
    
    9. Progress in the transit of natural gas
      Increase performance, safety and security of the gas transit network.
      Further explore the possibilities for the financial and legal restructuring of the gas transit business including unbundling; and unbundling and transparency of accounts (cf Gas Directive 2003/55).
    
    10. Advance in the restructuring of the solid fuels mines.
      Further implement Ukraine's mine restructuring plan. Reduce mine accidents, i.a. by gradually applying EU mine safety standards and practice.
      Advance in assessing the technical and financial feasibility of implementing clean coal technology and promotion of it.
    
    11. Progress on energy efficiency and the use of renewable energy sources.
      Adopt Action Plans for improving energy efficiency and enhancing the use of renewable energy, for reinforcing the institutions, accompanied by financing plans and timetables for implementation. Further implement existing plans in this area.
      Cooperation regarding energy conservation projects.
    
    12. Continue co-operation on nuclear energy and nuclear safety.
      Comply with the internationally accepted nuclear safety standards in completing and starting-up of the “K2R4” nuclear reactors; fully implement the Memorandum of Understanding on the closure of the Chernobyl nuclear power plant.
      Further strengthen the State Nuclear Regulatory Committee of the Ukraine.
      Take the necessary measures to ensure the entry into force and implementation of the agreement concluded with EURATOM on peaceful uses of nuclear energy.
      Make progress in decommissioning of Chernobyl NPP.
      Continue work on the Shelter Implementation Plan in order to transform Unit 4 of Chernobyl NPP into an environmentally safe site
      Adopt a nuclear waste strategy.
    
    Information Society
    13. Accelerate progress in electronic communications policy and regulation
      Adopt and start implementing the national concept for the development of electronic communications.
      Adopt regulations concerning licensing, interconnection, numbering and generally accessible telecommunications services in accordance with the Law of Ukraine on Telecommunications.
      Establish the National Communications Regulatory Commission in accordance with the Law of Ukraine on telecommunications.
      Ensure fair competition in the electronic communications markets.
    
    14. Accelerate progress in the development of Information Society services and in the integration of Ukraine into the IST research programme
      Adopt the State Programme “e-Ukraine” for the development of the Information Society and explore possible support by the EU for its implementation.
      Promote the widespread use of the new technologies by business and administration, in particular in the health and the education sectors (e-commerce, e-government, e-health, e-learning), via the provision of advanced infrastructures, the development of local content and the introduction of pilot projects, e.g. for the mutual recognition of electronic signatures.
      Improve the use of Internet and online services by the citizens via computer training programmes for the general public.
      Adopt a specific plan to promote the participation of Ukraine in the IST part of the 6th Framework Programme.
      Develop EU – Ukraine co-operation regarding the preparation of the second phase of the World Summit on the Information Society in Tunisia in 2005.
    
    
    Environment
    15. Take steps to ensure that conditions for good environmental governance are set and start implementing them
      Take further steps towards completion of administrative structures and procedures to ensure strategic planning of environment issues and co-ordination between relevant actors.
      Establish procedures regarding access to environmental information and public participation, including implementation of Aarhus Convention, particularly by establishing structures and procedures for ensuring an acceptable level of service to those wishing to have access to information.
      Reinforce structures and procedures to carry out environmental impact assessments, including in relation to trans-boundary issues. Establish communication strategies on the benefits of environmental policy; support civil society actors and local authorities
    
    16. Take active action for prevention of deterioration of the environment, protection of human health, and achievement of rational use of natural resources, in line with the commitments of Johannesburg Summit
      Develop framework legislation and basic procedures and ensure planning for key environmental sub-sectors identified in National Strategy for the Environment; take first steps towards their implementation. Enhance administrative capacities including those for permitting as well as for enforcement and inspections.
      Enhance/adopt national programmes and plans for key environment sub-sectors including priorities for investments in each sub-sector
    
    17. Enhance co-operation on environmental issues
      Implement provisions under the Kyoto Protocol and the UN Framework Convention on Climate Change
      Participate actively in the Danube – Black Sea Task Force to implement trans-boundary approach to water management; ensure active participation in the Eastern European, Caucasus and Central Asia component of the EU Water Initiative
      Possible participation in selected European Environment Agency activities
      Active participation in activities of the Joint Ukraine – EU Working Group on Climate Change
      Identify possibilities with neighbouring countries for enhanced regional co-operation, particularly in relation to trans-boundary impacts
    
    
    2.6. People-to-people contacts
    Science and technology, research and development
    1. Prepare Ukraine’s integration into the European Research Area
      Finalise the specific “Action plan to enhance cooperation between EU and Ukraine in the field of Science and Technology”.
    
    2. Develop Ukraine’s research and technological development capabilities in the service of the economy and the society
      Reinforce Ukraine’s human, material and institutional potential with the objective of improving the capabilities of natural and legal persons involved in RDT and Innovation,
      Promotion of an environment favourable to the exploitation of results,
    
    3. Promote Ukraine’s integration in high-level scientific exchanges
      Stimulate Ukrainian participation in Marie Curie international fellowships and establish appropriate return mechanisms,
      Reinforce the exchange of research personnel within joint projects and promote the participation of Ukrainian scientists in international fora and debates
      Make further progress in co-operation in the space sector and continue support for the joint space working group under the PCA
      Support distribution of information on the European Research Area through the Ukraine national S&T information centre.
    
    Education, training and youth
    4. Reform and upgrade the education and training systems and work towards convergence with EU standards and practices
      Work towards convergence in higher education by implementing measures that will enable Ukraine to adhere to the Bologna process.
      Involve civil society stakeholders and social partners in higher education; and VET reform;
      Address accreditation and licensing procedures;
      Use the existing programme Tempus III to explore the possibility of fostering the development of human resources and human capital, and in particular of promoting the reform and development of the lifelong learning system in Ukraine;
      Establish chairs for European studies and European law through the Action Jean Monnet and support studies opportunities for young researchers.
    
    5. Enhance co-operation in the field of education, training and youth
      Establish a policy dialogue between EU and Ukrainian authorities in the field of education and training
      Increase exchange opportunities for Ukrainians through participation in the Erasmus Mundus programme
      Reinforce Ukrainian participation to the programme Tempus III and use it to explore the possibility of extending co-operation in the areas of vocational education
      Enhance youth exchanges and cooperation in the field of non-formal education for young people and promotion of intercultural dialogue through the YOUTH programme
    
    
    Culture and audio-visual issues
    6. Enhance cultural and audio visual co-operation
      Consider support to cross border cultural links
      Develop a dialogue on cultural diversity, including in the context of the relevant negotiation in UNESCO
      Approximate relevant audiovisual legislation in full compliance with European standards (with a view to a possible future participation in the Media programme if prerequisites are fulfilled).
      Investigate the possibilities for co-operation in the framework of EU programmes in the field of culture.
    
    
    Civil society co-operation
    7.
    

Publication of 02 25, 2005.