Tax and accounting insights for Ukraine
06.11.24
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Ban on the use of software of Russian origin: what business thinks

The European Business Association appealed to the Government and Parliament with a proposal to finalize Draft Law #11492, which bans the use of sanctioned software and access to electronic information resources.

The business community understands the importance of adopting the draft law to ensure a better level of cyber defense, countering disinformation and preventing threats to Ukraine's national security. At the same time, the business community suggests taking into account several important points so that the innovations do not have a negative impact on companies, but instead facilitate a faster and easier transition to alternative software solutions.

The EBA experts suggest developing a clear list of hostile software products and categories of electronic resources that fall under the law. This may include the creation of a list of criteria that will determine the resources to be banned. It is also equally important to specify some general terms that need to be more clearly defined in order to avoid misinterpretation, abuse or excessive restrictions.

According to EBA experts, the transition to domestic software requires significant resources. Therefore, the business believes it is necessary to provide state support (financial assistance, tax benefits, or subsidies for licenses for new software) to companies that will make such a transition. An important step of such support is also to establish a transition period of 12-24 months to minimize the impact of software changes on companies' operations and reduce risks to the economy.

At the same time, business believes it is necessary to promote the development of Ukrainian IT products. This will not only reduce dependence on foreign programs, but also stimulate the development of the national IT industry. According to the EBA experts, the introduction of grant programs and investment incentives for Ukrainian developers and the expansion of cooperation between the state and IT companies will contribute to this development.

The transition to domestic products also requires significant resources from software integrators. According to EBA member companies, the market has previously experienced a shortage of such specialists, and in recent years it has only intensified. A possible solution in this situation would be to introduce cost-effective booking for critical specialists in this area.

In addition, we would like to note that an alternative draft law No. 11492-1 has also been registered in the Verkhovna Rada of Ukraine, to which business has similar comments. Therefore, to ensure that the measures introduced by this draft law are more effective and have minimal negative consequences for the economy, EBA representatives propose to finalize draft law No. 11492 or No. 11492-1, taking into account these business proposals.

European Business Association
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