Does consumer protection matter for the approximation agenda in Ukraine?

Oksana Holovko-Havrysheva,
Ph.D. in Law, Associate Professor,
European Law Department, Ivan Franko National University of Lviv,

Associate Professor,
International and European Law Department, National University “Kyiv-Mohyla Academy”,

Ukrainian European Studies Association,

After the collapse of the Soviet Union Ukraine, as many post-Soviet countries, faced the need to develop a legal framework for the relations with the European Union as of the key global actors on the international arena. Being treated by the EU at first as the post-Soviet country belonging to the post-Soviet bloc, Ukraine manifested a constantly growing interest for deepening the relations with the European Union. After the Partnership and Cooperation Agreement was signed in 1994 and entered into force in 1998 the country for the first time undertook a unilateral obligation to adapt its domestic legislation to the EU rules and standards. After the EU-Ukraine Association Agreement was concluded in 2014 and entered fully into force in 2017 Ukraine’s obligation on adjustment of the domestic legislation to the EU acquis became more intense, thus the need to develop a coherent approach to deal with the rapprochement of legislative and regulatory practices to the EU standards became even more acute.

The national legislative and approximation practices are based in terms of constitutional regulation on Article 9 of the Constitution of Ukraine which determines the correlation between international treaties, to which Ukraine is a party and which are dully ratified by the Ukrainian Parliament, and acknowledges their status as a part of the domestic legislation. At the same time the Constitution of Ukraine stipulates that if an international treaty contradicts to it, the latter can be signed only after the relevant constitutional amendments take place. This constitutional provision shapes until today the domestic practice of the implementation of international treaties in Ukraine, including the EU-Ukraine Association Agreement and gives floor for the debate on the correlation of international law and domestic law, since the enforcement of the international legal rules in Ukraine in different fields, e.g. human rights, causes a lot of controversies both in practical and theoretical terms, since a coherent approach towards such fundamental issue is not achieved yet neither by state policies nor in academic environment. Moreover, the Ukrainian Constitution does not recognize the direct applicability of the international rules, thus the enforcement debate is closely linked to question of the direct effect and direct application of international law in the country. Even being amended in 2019 with clauses reflecting the European aspirations of Ukrainian people, including the expectation to become full membership in the EU and NATO, the both the implementation practices for the international legal rules in general and the implementation of the EU-Ukraine Association Agreement did not receive a coherent and transparent structure.

Bearing in mind the diverse practices Ukraine applies to the implementation of international legal rules, it needs also to be mentioned, that the legislative and regulatory approximation practices were firstly based upon the framework rules, especially Article 51 of the Partnership and Cooperation Agreement between the European Union and Ukraine (PCA), where the fields of such adjustments were enlisted, however the clarity as to the terms and procedures for the adaption of the Ukrainian legislation to the EU acquis was lacking. The national approach towards the approximation practices, however started to be shaped merely by active governmental efforts, which started to develop a statutory and secondary legislation in this area already at the stake of the XX-XXI centuries with particular focus on EU law compatibility checks, translation of the EU acquis and institutionalization of the decision-making and control over the implementation of the Ukrainian obligations under the treaties with the EU.

Consumer protection was mentioned among the areas, where the adjustments had expected. The expectations of the parties became more clearly expressed in Article 75 of the PCA, where the compatibility between consumer protection systems was envisaged as the main goal of the bilateral cooperation in the consumer protection matters, including support for the modernization of the consumer protection system of Ukraine, introduction of a national warning system on hazardous products, consumer empowerment and education as particular cooperation topics.

After the PCA conclusion and its entering into force the cooperation in the consumer matters did not occupy a prominent place during the PCA implementation and in the post-PCA approximation agenda. The EU-Ukraine Association Agreement, as a next step in contractual framing of the relations between the EU and Ukraine, contains both detailed provisions on legislative and regulatory approximation in many of cooperation areas, including the consumer protection. The consumer protection matters are regulated extensively in the EU-Ukraine Association Agreement, linking consumer protection, antidumping and compensatory measures, e-commerce, protection of intellectual property, on state aid and consumer protection, pricing on energy and gas markets, cooperation in nuclear energy sector, on the protection of consumer on financial services markets. A special chapter on cooperation in consumer protection (EU-Ukraine AA 2014: Art. 415-418) has been added as well, defining the framework cooperation rules and referring to the Annex XXXIX, which entails a list of the relevant EU consumer acquis to be implemented in Ukraine in most cases within 3 years after the Association Agreement enters into force.

However even having more precisely regulated the cooperation in the consumer protection matters in the EU-Ukraine Association Agreement, there is still not very much progress in this area achieved: the overall progress in aligning of Ukrainian consumer protection legislation to the EU acquis is rated by 42% in 2020, with no remarkable achievement for 2019. The mostly advanced areas, where the Ukrainian legislation is partly aligned to the relevant EU consumer acquis, cover product safety, distance and out-off premises contracts, including the financial services contracts concluded in a distance format, consumer credits and market surveillance. In the course of the AA implementation Ukraine adopted renewed National Concept of the Consumer Rights Protection in 2017, which expired in 2020 and seems not to be fulfilled. The National Action Plan for the Realization of the National Concept of the Consumer Rights Protection to 2020 provided indicators for four priorities areas – improvement of consumer rights protection legislation, enhancement of the cooperation among the government, municipal communities, business environment and consumers, information support for consumers and consumer education, where the most important one – the amendment of the Consumer Rights Protection Act (Consumer Rights Protection Act (hereafter – CRPA 1991, Law 1023-XII 1991) is not fulfilled yet.

The factors influencing such a low degree of the compliance of the Ukrainian legislation to the EU consumer acquis are of political, economic and legal nature. In the first case challenges lay both in the lack of political will to pursue actively the consumer protection agenda at the state law combined with a rather weak consumer protection civic activism, ensuring putting the consumer rights and protection of consumers on the political agenda. In the second case the raising consumer protection standards is traditionally linked to the questions of the economic development, so that raising of the consumer protection standards reaches necessary support from the state, consumer society and businesses. The necessary equilibrium has been hard to reach before the pandemic; economic reality during the pandemic makes the situation more sensitive. In the third case the legal peculiarities of the implementation of the EU-Association Agreement are addressed both as mentioned here and in a wider context of ensuring the compatibility between the Ukrainian legal system and European practices of regulating social life.

Ukraine articulates the willingness to negotiate the amendments of the EU-Ukraine Association Agreement, pursuing beyond the political cooperation issues ambitious goals to revise trading quotas, to conclude the Agreement on Conformity Assessment and Acceptance of Industrial Products, to take part at the European Green Deal and to get access to the EU Digital Single Market. All these ambitious plans have to deal with consumer protection issues at their core, since the safety of consumers both in in the EU Internal Market and Digital Single Market is a value, upon the EU economic integration is based upon. The safety and well-being of consumers can be effectively ensured if the consumer system functions effectively. Due to political and economic reasons Ukraine seems to deploy rather the a-la carte approach towards rapprochement of the EU consumer acquis, e.g. the Ukraine has been granted the access to the Early Warning System on Hazardous Products in the EU in 2020, it introduced a number of legislative changes in this area, however the systematic approach towards ensuring efficient consumer protection and enforcement of consumer rights is still not debated as a key priority for maintenance sustainable economic development of the country. Thus, there is the time for placing of the consumer protection among key priorities in the political agenda in Ukraine, if the ambitious goals of the Government of Ukraine to foster the cooperation between the EU and Ukraine are to be taken seriously.

Expert article 2935

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