Developments in Legislation to Come into Effect in

17.5.1 New version of the Quality Food Law effective from 20 September 2015

On 22 July 2014, the Verkhovna Rada of Ukraine adopted the Law on Amendments to Certain Legislative Acts of Ukraine Regarding Food Products, which is effective from 20 September 2015. In particular, the Quality Food Law was replaced by a new version. It aims 1) to harmonize the legislation of Ukraine with the EU legislation in the field of safety and food quality; 2) to ensure a high level of protection of human health and consumer interests; 3) to create transparent conditions for business; and 4) to improve the competitiveness of domestic foods and reduce their prices. It clarifies terminology, types of offenses and penalties, cancels some permits and procedures pursuant to the EU legislation.

The most significant changes effective from 20 September 2015 are the following:

(1) An operating permit is needed by only production facilities for the production and / or storage of food products of animal origin (i.e., milk, meat, fish and shellfish, including fresh, chilled or frozen, eggs, honey, derivatives and other products made from animal parts, their organs and / or tissues intended for human consumption).

(2) If it is not necessary to obtain an operating permit, the production facilities can be registered at any stage of the production and / or circulation of food products;

(3) The list of products subject to state registration has been extended. In particular, new food products, nutritional supplements, flavorings, enzymes, processing aids and materials in contact with food that are released onto the Ukrainian market for the first time; drinking water that is classified as “natural mineral water”;

(4) Application of HACCP is obligatory. For a breach regarding the implementation of HACCP, legal entities will pay a fine of from 30 to 75 times the minimum monthly salary, i.e., UAH 36,540 - UAH 91,350 (approximately USD 2,327 - USD 5,793 or EUR 1,975 - EUR 4,938). For the same violations individual entrepreneurs will pay a fine of from 3 to 15 times the minimum monthly salary, i.e., UAH 3,654 - UAH 18,270 (approximately USD 232 - USD 1,159 or EUR 198 - EUR 988). However, this requirement does not apply to primary production and related activities (transportation, storage, etc.). 17.5.2 New Law on Standardization effective from 3 January 2015 On 3 January 2015 the Law of Ukraine on Standardization (the “Standardization Law”) of 5 June 2014 came into effect. Under the Standardization Law, among the objects that are subject to

standardization are the following: 1) materials, components, equipment, systems, their compatibility; 2) rules, procedures, functions, methods, activities or their results, including products, control systems; 3) requirements for terminology, symbols, packaging, marking, labeling, etc. It does not apply to sanitary measures

regarding food safety; veterinary, sanitary and phytosanitary measures; construction standards; pharmaceuticals; health care standards; accounting; assessment of property, education and other social standards.

The Standardization Law provides for the establishment of a national standardization body (the “Standardization Body”) that is in charge of the realization of state policy in the field of standardization. The powers of the Standardization Body include organization and

coordination in the field of standardization, approval of the schedule of standardization, adoption and cancellation of national standards, including the establishment and termination of technical committees on standardization, representation of Ukraine in international regional organizations.

In addition, the Standardization Law envisages two levels of standardization: 1) national standards that are adopted by the Standardization Body (application is voluntary, unless otherwise expressly provided for in the relevant legislative acts); 2) standards and technical standards that are adopted by enterprises (application is voluntary).

The existing USSR standards (GOST), the standards of the Ukrainian Soviet Socialist Republic (PST USSR), codes of practice and technical standards that were adopted before the Standardization Law became effective, as well as the industry standards (OST) and other similar regulations of the former USSR, the industry standards of Ukraine (GSTU) shall be applied until they are replaced by national standards or codes of practices, or cancelled, which must take place within 15 years of the enactment of the Standardization Law. At the same time, the application of industry standards is voluntary unless it is expressly required by the relevant legislative acts.

17.5.3 Technical Regulations and Conformity Assessment Law On 15 January 2015, the Verkhovna Rada of Ukraine enacted a new Law of Ukraine on Technical Regulations and Conformity

Assessment (the “Technical Regulations Law”) pursuant to the obligations of Ukraine under the Agreement on Technical Barriers to Trade of 1994. The Technical Regulations Law is a consolidation of the Law of Ukraine on Conformity Assessment and Law of Ukraine on Standards, Technical Regulations and Conformity Assessment Procedures. Overall the Technical Regulations Law will come into effect a year following the day when it is published (publication pending as of 20 January 2015), except certain provisions that will come into effect during 2015. It establishes unified legal and

organizational principles for the development, adoption and application of technical regulations and conformity assessment procedures. The Technical Regulations Law is applicable to all products except artwork and unique items of folk art and crafts; collectibles and antiques. However it is not applicable to sanitary and phytosanitary measures; conformity assessment of the quality of grain and grain products, seeds and planting material; conformity

assessment of wheeled vehicles and their parts; mandatory conformity assessment of services, etc.

The Technical Regulations Law extended the concept of “technical regulation”. It is defined as a legal act that stipulates the

characteristics of products or related processes and production methods, including the relevant administrative provisions the observance of which is mandatory. It may also include requirements for terminology, symbols, packaging, marking or labeling in so far as they apply to a product, process or production method. In the previous Technical Regulations Law technical regulation was limited only to the laws of Ukraine and legal acts adopted by the Cabinet of Ministers of Ukraine.

The purpose of technical regulations is to protect the life and health of people, animals and plants, the environment and natural resources, energy efficiency, property, national security and prevent business practice that defrauds consumers. However the legislation may specify other purposes of the adoption of technical regulations.

Technical regulations can be developed on the basis of both 1) international standards (except when such international standards or their relevant parts are ineffective, or use improper means to achieve the purposes of the relevant technical regulations); and 2) regional standards, national standards of Ukraine and other states, legislative acts of the EU and other economic groups, or other states, or the relevant parts of such standards and legislation. At the same time the Technical Regulations Law expressly stipulates that all technical regulations in Ukraine shall be developed, adopted and applied on the

basis of the principles established by the WTO Agreement on Technical Barriers to Trade of 1994.

Moreover, when technical regulations are developed on the basis of an EU legislative act, their content, form and structure should fully and accurately reflect the content, form and structure of the EU legislative act on the basis of which it is developed. All products must comply with the requirements stipulated in the relevant technical regulations, unless otherwise specified in the relevant technical regulation or the legal act that enacted this technical regulation.

The Technical Regulations Law also sets out the requirements for the conformity assessment procedure, the application of which is provided for by the relevant technical regulations. Such conformity assessment procedures shall be developed, adopted and applied on the basis of the principles established by the WTO Agreement on Technical Barriers to Trade of 1994. The conformity assessment procedures can be developed on the basis of 1) the guidelines or recommendations of international standardization organizations, except when they are inconsistent with the protection of life or health of humans, animals or plants, the environment or natural resources, energy efficiency, the protection of property, national security, the prevention of business practices that defraud consumers; 2) the guidelines or

recommendations of regional standardization organizations, legislative acts of the EU and other economic groups, or other relevant states. The assessment of conformity with the requirements of the technical regulations is carried out in the cases and through the use of the conformity assessment procedures defined in the relevant technical regulations. These procedures are performed by the producers or by the importers or distributors (when this obligation is imposed on them by the relevant technical regulations).

In addition, the technical regulations may provide for:

(1) A declaration of conformity with the technical regulations. In this case, the producer or its authorized representative shall

issue a declaration of conformity claiming that the

requirements applicable to the products defined in the relevant technical regulation have been met. If several technical regulations are applied with regard to one product and they provide for the issuance of a declaration of conformity, the producer or its authorized representatives shall issue one declaration to cover the conformity of the products with all the technical regulations. The producer, by virtue of issuance of the declaration of conformity, undertakes responsibility for the conformity of the products with the requirements laid down in the relevant technical regulations;

(2) The labeling of the products with the mark of conformity with the technical regulations. The terms and conditions of the labeling are established in the technical regulations. When such terms are not established, the Cabinet of Ministers of Ukraine shall adopt the relevant labeling terms.