Policy Papers

  • 24.10.2011

    Legal and Economic Assessment of the Impact of the Draft Law on Domestic Trade Does limiting Food Trade help the Poor?


    The draft law “on domestic trade” has been developed by the Ministry of Economic Development and Trade aiming at regulating domestic trade and trade-related activities in Ukraine. It is based on the Decree of the Cabinet of Ministers #632 from June 24, 2009 outlining a State Program on Domestic Trade Development until 2012. The draft law passed several public hearings until  July 2011 and is expected to be delivered to the Ukrainian Parliament by the Cabinet of Ministers in the second half of 2011. 

    Various interest groups voiced their concerns about the draft law including small and medium sized traders as well as large wholesale and retail chains. Their major concern is the limitation of the free choice of the area and size of the market outlets and the restriction of economic activities, limitation of trade contracts and direct price controls of socially sensitive goods. There are concerns that the draft law may force wholesale and retail traders to limit their product range because of excessive state control leading to less cheap and available food for the poor than before.  

    The general implicit strategy of the law is to broaden the regulatory scope of the Government and administration in domestic trade. It will thus limit the entrepreneurial activities and choices guaranteed by the Ukrainian constitution and other relevant laws. The draft law proposes to regulate trade relations which are already covered by the Civil Code of Ukraine and the Commercial Code of Ukraine. If the draft law would be approved, a number of contradictions due to different concepts of the draft law and the Civil Code and the Commercial Code will be inevitable. 

    Attached file  (169.2 kb)
    Authors:  Nivievskyi Oleg, Kandul Serhiy, Strubenhoff Heinz-Wilhelm, , , Huige Marinus, Rehbock Wolfram
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