Ukraine and the OECD
The OECD has worked with Ukraine for a quarter-century, supporting the country's efforts to transform its economy and integrate more deeply into international markets and institutions. The OECD's co-operation with Ukraine has been greatly intensified since 2014, under a Memorandum of Understanding between the OECD and the Government of Ukraine signed in the wake of the "Euromaidan Revolution". Under the Action Plan agreed for the implementation of the Memorandum, the OECD works to support reforms in Ukraine in three key areas identified as priorities by the government: anti-corruption; governance and rule of law, and investment and business climate.
On 15 June 2018, the OECD Deputy Secretary-General Mari Kiviniemi and the First Deputy Prime Minister of Ukraine Mr Stepan Kubiv signed the renewal of the OECD-Ukraine MoU until 2020. The renewal reflects their determination to continue working together in support of Ukraine’s reforms. At the OECD-Ukraine Co-ordination Council meeting on 15 February 2019, under the chairmanship of the First Deputy Prime Minister/Minister of Economic Development and Trade of Ukraine, Stepan Kubiv, the OECD and Ukraine agreed on an updated Action Plan for 2019-2020 that reflects new Government priorities. In his speech, the First Deputy Prime Minister stressed that “co-operation with the OECD was and remains an important and integral part of the course of reforms being implemented by Ukraine".
Areas of co-operation
Work under the Action Plan is financed by OECD members in close co-operation with other international organisations. The Plan provides for over 30 OECD reviews and projects in Ukraine and also sets explicit goals with respect to Ukraine's participation in major OECD Committees and other bodies, as well as its adoption of OECD principles and standards in such areas as corporate governance, tax administration, investment policy and competition. The current work of the OECD in Ukraine encompasses a wide range of policy areas, including:
- Agriculture: In June, the OECD launched the Agricultural Policy Monitoring and Evaluation 2017 report which includes a chapter on Ukraine. The report confirms that agriculture remains one of the most important economic sectors in Ukraine and highlights the need to develop a modern land cadastre as a condition for agricultural land market reform. In addition, Ukraine participates as observer in the OECD Tractor Codes, a set of rules and procedures for tractor testing with the aim to facilitate trade by updating international rules to certify tractors and their protective structures. Implementation of the Codes ensures that protective structures and performance criteria are carried out on a comparative basis to increase transparency, simplify international trade procedures, and open markets.
- Competition: In March 2017, the OECD launched Ukraine’s Competition Peer Review, which reviews the Antimonopoly Committee’s (AMC) progress in implementing the recommendations found in the peer reviews of the OECD (2008) and UNCTAD (2013) with a particular emphasis on post-Euromaidan developments regarding the competition regime, institutional arrangements and the work product. Relevant recommendations from the peer reviews are reiterated.
- Corporate affairs: The OECD has undertaken a review of the reform of the corporate governance of Naftogaz, the state oil and gas company, based on the OECD Guidelines for the Corporate Governance of SOEs (English | Українськa) . The OECD has previously reviewed the aircraft manufacturing state-owned company, Antonov, and will continue to assess SOE reform in the energy sector.
- Education: In March 2017, the OECD launched the review of Integrity in Ukraine’s education system that addresses the challenges posed by integrity weaknesses in Ukraine's education system and provides recommendations to eliminate risks and restore public trust in a merit-based education system. In 2018, Ukraine will participate in the Programme for International Student Assessment (PISA) for the first time. The OECD is reviewing Ukraine’s capacity to help prepare the country to successfully implement this large-scale assessment.
- Energy sector: The OECD has supported the competitiveness of the energy sector, looking at investment potential in biomass (Українськa), as well as by assessing and monitoring the potential to use Energy Service Companies (ESCOs) in Ukraine to contribute to the energy efficiency transition. The International Energy Agency has also established a country profile of Ukraine’s ESCO market. Also, the OECD is currently Supporting the Energy Sector Reform in Ukraine looking at issues related to competition, corporate governance, corruption and investment.
- Environment: The OECD is working with Ukraine to help "green" SMEs, exploring ways to mobilise commercial credit for green investments, as well as analysing instruments for financing water supply and sanitation. In March 2017, the OECD launched the first National Policy Dialogue on Water in Kyiv in collaboration with the Ministry of Ecology of Ukraine. Also, Ukraine is part of the EaP GREEN Programme which assists the six countries of the European Union Eastern Neighbourhood Partnership in progressing faster towards a green economy framework.
- Governance: Through SIGMA, the OECD produced in 2018 the Baseline Measurement Report for Ukraine which assesses the country’s state of play with public administration half way through the Public Administration Reform Strategy, and is currently helping the Ministry of Finance to draft its own monitoring report on the PFM Strategy and Action Plan. Further work includes support for measures to strengthen policy making, accountability, service delivery, public finance management and public procurement. The OECD is also involved in Supporting Decentralisation in Ukraine (2019), which builds on the recommendations of the OECD Territorial Review of Ukraine 2013.
- Integrity: Since 2014, the OECD has been directly involved in supporting some of Ukraine's most important anti-corruption reforms, including the creation of the Business Ombudsman Council and the National Anti-Corruption Bureau of Ukraine (NABU). Through the Anti-Corruption Project, the OECD is also involved in a diverse range of capacity-building activities, assistance in the drafting of legislation, and in the establishment and development of the National Asset Recovery and Management Office.
- Investment: With OECD assistance, Ukraine revised its investment incentives schemes to make them more transparent and to evaluate their costs and benefits, bringing the country's policies and practices into line with the standards adopted by OECD members. In March 2017, Ukraine became the 47th adherent to the OECD Declaration on International Investment and Multinational Enterprises.
- SME Policy: Ukraine is a participant in the OECD Working Party on SMEs and Entrepreneurship. Ukraine’s SME policies have been assessed and compared to the Small Business Act for Europe in the SME Policy Index. The OECD has also worked closely with the State Statistical Committee of Ukraine on producing the Compendium of Enterprise Statistics in Ukraine 2018 in order to improve its capacity to collect, analyse, disseminate and harmonise official business statistics.
- Taxation: The OECD offers regular training to Ukrainian officials in the detection and pursuit of financial and tax crimes. Ukraine is a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes and is also an Associate to the Base Erosion and Profit Shifting (BEPS) Project. In 2018, Ukraine became the 83rd jurisdiction to join the MLI – the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.
Participation in OECD thematic programmes
- Anti-Corruption Network for Eastern Europe and Central Asia (ACN): Ukraine has been a member of the ACN since its establishment in 1998. ACN is a forum to exchange information about new developments and trends in the area of preventing and combatting corruption, international standards and practice.
- Eurasia Competitiveness Programme: Ukraine has been part of the Programme since its inception. The ECP carries out country-specific projects, and also involves Ukraine in its regional work through peer reviews and in the regular assessment of SME policies in Ukraine.
- GREEN Action Programme: For more than 20 years, Ukraine has been part of this Programme, which promotes the integration of environmental considerations into economic, social and political reforms of countries in the ECCA region.
- SIGMA Programme: Ukraine has been a part of the EU-OECD Support for the Improvement of Governance and Management (SIGMA) programme since 2008. Ukraine relies on SIGMA’s assistance in priority areas such as financial control, civil service legislation, public administration reform and public financial management.