Certification

Ukraine is moving increasingly to a free market oriented certification system. Recently the overall number of licenses was lowered from 112 to 42. Ukraine's domestic production standards and certification requirements proclaim equality of treatment of both domestically produced and imported products.

In 1994 the Ukrainian government introduced compulsory certification requirements for goods imported into Ukraine. The list of goods subject to certification and the relevant certification procedures are updated every year. Certificates may be one of two types: (a) Certificate of Acceptance of a foreign certification issued by a Ukrainian certifying agency, and (b) Conformance Certificate issued by a Ukrainian agency upon certification of goods. As a minimum, imports to Ukraine are required to meet the certification standards of their country of origin. In cases where Ukrainian standards are not established, country of origin standards may prevail. However, certificates issued by foreign certification authorities are recognized in Ukraine only to the extent provided in international treaties to which Ukraine is party, i.e. basically only with CIS countries.

In 1996, the State Standardization Committee (UkrDerzhStandard) adopted as national standards the ISO-9000 series for production systems certification. Based on these standards, Ukrainian certification bodies can evaluate the quality of a production system rather than the quality of a single product. The procedure for issuing ISO certificates requires a visit from Ukrainian standards specialists to the importer's production facilities to inspect the system's quality. Adoption of the ISO-9000 series aims at facilitating the process of certifying goods as system quality certificates are issued for a three-year period. However, the ISO-9000 standard certificate does not prevent the importer from certifying selective individual products.

UkrDerzhStandard is entitled to supervise the work of the network of 93 certifying agencies and testing laboratories (centers), located throughout Ukraine, which work on a private profit basis. Pricing rules exist, but they are too vague to be enforced, and UkrDerzhStandard does not have proper supervision over the various bodies. Each agency operates as an independent entity, often with monopolistic positions, and is responsible for testing a particular item. For many products, multiple agencies are involved in the certification process, and often multiple certificates are required. Furthermore, local, regional, and municipal authorities often require additional documentation beyond that required by central agencies.

In addition, licensing of activities is being widely introduced in Ukraine and is imposed on businesses directly affecting peoples' health, the environment, and national security. To acquire a license, certain rules and procedures established by the Cabinet of Ministers of Ukraine or a Cabinet-designated body has to be observed. The typical business has to secure roughly a dozen licenses.

In sum, the existing certification procedures are still far from transparent and there are many regulations and procedures that serve as barriers to entry for new business establishments. There is a lack of clear regulations. The registration schemes are unfeasible. The requirements are constantly changing and unevenly enforced. There is a lack of procedural flexibility. The import license procedures are overly complex and lengthy, and the certification and licensing fees are inordinately high. Foreign companies regard Ukraine's certification system as one of the most serious obstacles to trade, investment, and ongoing business, and many consider Ukraine's system to be far more difficult than Russia's. As a result, the bureaucratic procedures have significantly raised the cost of doing business in Ukraine, provided opportunities for corruption, and driven much activity into the shadow economy. In addition, while the law may stipulate formal equality of treatment of both national and foreign companies, foreign businesses in Ukraine repeatedly complain that the laws are not applied equally and that, in fact, there is discrimination against foreign companies.