Weekly analytics for 03 – 09 June

CPLR WELCOMES THE ADOPTION OF DRAFT LAW 4380 ON THE ADMINISTRATIVE FEE IN THE FIRST READING

On June 5, the Verkhovna Rada of Ukraine passed Draft Law № 4380 “On the Administrative Fee” in its first reading. This marks a significant milestone in the reform of administrative service delivery, as the draft law had been awaiting parliamentary consideration for almost five years. It was registered back in November 2020 and recommended for consideration by the relevant committee in July 2023. The draft law defines the purpose of the administrative fee, in particular its compensatory nature, and establishes a clear procedure for calculating and paying such fees. Most importantly, the draft law also provides a list of key (most frequently used) administrative services, each with a clearly defined and transparent fee structure. This approach aligns with the best practices of several EU member states, including the Czech Republic, Poland, and Estonia and others.

The adoption of this law is long overdue. 

In Ukraine, administrative fees for the most in-demand services (such as registrations, permits, passports and others) are currently governed by a numerous laws and government regulations. Fee amounts often vary widely across sectors and lack transparency. Some fees are frequently revised, consist of multiple components or raise legal concerns (for example, excessively high charges for the “marriage in a day” service).

Many fees have not been reviewed since 1993, including those set by the Cabinet of Ministers’ Decree “On State Duty”. As a result, some fees remain unreasonably low (for example, just 0,85 UAH for marriage registration), while others are excessively high (such as an additional 650 UAH per service charged by the state-owned enterprise “Document” on top of the official fee).

Furthermore, the vast majority of administrative services, particularly those provided by local self-government bodies, are offered free of charge without justification. For example, 90% of 400 services offered by CPASs are provided free of charge. In fact, the cost of providing these services is covered by taxpayers.

Even partial cost recovery would help preserve a system that has taken over a decade to build, including with the support of international donors. Now more than ever, Ukraine must make effective use of all its internal resources.

Residents of small communities often face additional expenses for transportation to access services that are increasingly distant. Many government agencies (such as the State Migration Service, Ministry of Justice, and StateGeoCadastre, etc.) are “optimizing” their territorial networks, while the CPASs of local self-government bodies do not always assume responsibility for certain “free” services.

Every year, the law regulating administrative fees costs the public budget billions, primarily affecting local governments. Passing this law in a single decision would provide additional resources into the system and provide citizens with greater transparency regarding administrative fee payments.

Even partial cost recovery would help preserve a system that has been built over more than a decade, including with international support. Now, more than ever, Ukraine must make effective use of all available internal resources.

It is also important to emphasize that the draft Law on the Administrative Fee fully considers the needs of socially vulnerable groups. Essential services for these groups will continue to be provided free of charge. Specifically, administrative services related to social welfare – such as housing subsidies, pensions, various state benefits, and more. Additionally, including birth and death registration, issuance of the first citizen’s passport, and others will remain free of charge.

Looking ahead, the draft law faces the challenging task of refinement before the second reading, as well as the need to navigate certain departmental and commercial interests. It is crucial that the key advantages of the draft are preserved throughout this process – namely, the clear procedure for calculating and collecting administrative fees, along with transparent fee amounts for all basic (most used by citizens) services, enshrined directly in the law. This approach offers an optimal solution to the longstanding issues surrounding administrative fees in Ukraine. Moreover, it aligns with one of the EU’s direct recommendations outlined in the Ukraine Report 2024.