ROUND TABLE "SCRAP MARKET OF UKRAINE"

Consulting company "Formative Partners" in its practice deals with the most topical issues.

On December 6, 2019, with the assistance of the Chairman of the Economic Committee of the Verkhovna Rada of Ukraine Natalukha Dmytro Andriyovych, the initiative of the company's independent metallurgy expert Yuriy Vushkalenko and managing partner Jalal Huseynov, a round table discussion was held on "Scrap Market in Ukraine".

The event was held to establish a dialogue between active players in the secondary metallurgical products market and representatives of the parliamentary corps to create a common position on the development of the industry, which is an important component of metallurgical production and entrepreneurship in Ukraine.

As a result, the participants of the round table signed a Memorandum of Understanding and Cooperation in the field of scrap metal market development, which will be the basis for further communication.

All participants in the discussion showed their interest in solving the existing problems in this area, including, in particular:

- legal inaccuracies of Article 213 of the Criminal Code of Ukraine, which create obstacles for the operation of points of reception and processing of scrap metal;

- increase in the cost of scrap procurement due to corruption on the part of regulatory authorities;

- inflated requirements for scrap procurement and excessive number of regulatory procedures;

- the need to introduce cash payment for the purchase of scrap metal from individuals;

- the need to de-shadow, liberalize exports and open this market.

The last point is a priority in the crisis of the mining industry, which Ukraine faced in 2019 and which in the near future may pose a threat to the economic stability of the country due to job losses, loss of budget revenues at various levels, undermining confidence in national producers and their displacement by foreign companies.

The main conclusion reached by the participants of the discussion is the need for liberalization, which will be manifested in the creation of conditions for expanding investment in this sector and protecting the interests of Ukrainian exporters in domestic markets.

At present, the priority goals for the development of the industry are to create a competitive market, increase export potential, ensure revenues to the State Budget from the activities of scrap metal market operators and, most importantly, protect the interests of domestic producers.

Therefore, we can count on significant changes in the legal regulation of secondary metallurgical products, which are already happening and will continue to happen in the near future.

In particular, in July 2020, the Verkhovna Rada in the second reading and in general supported the bill №2426 "On Amendments to Certain Legislative Acts (on the de-shadowing of the market of metallurgical raw materials and operations with scrap metal)". 237 deputies voted for the bill. Subsequently, the President of Ukraine Volodymyr Zelensky signed the relevant Law.

Only forward!

Analyst: Dmytro Shevchenko