The publication two months ago of the draft law "On Tourism" caused an explosion of emotions. Today there is no talk of any particularly loud battles. Has agreement been reached? What stage is the document at now and when will it come into force?
- Here is draft law No. 2482 in front of me, which we received from the Cabinet of Ministers in early December. This is the version that was maximally refined by a group of Verkhovna Rada deputies headed by Ekaterina Samoilik and submitted for discussion in the session hall. In my opinion, the draft in its current form, in most of its provisions, addresses the problems existing in our tourism industry. I see absolutely nothing terrible or dangerous for the fate of tourism activity and for those who want to work civilly and transparently in normal legal conditions. Of course, those who are satisfied with the current state of the swamp, including the legal one, will oppose any changes. Moreover, regardless of what is written in the law.
- Has anything changed in the draft of the new law in recent months?
- The most painful point, as you know, turned out to be the guarantee fund, which was criticized by everyone, even without properly reading what is written in the relevant article. The first reaction, including in the press, was: bad, because bad. About half of the responses were of exactly that nature. When we began to explain our position, we talked primarily about the importance of familiarizing ourselves with the legislation of foreign countries, with generally accepted world experience. Because we, while preparing the document, had carefully read all of it. And to debate without knowing the subject of the dispute is unprofessional.
In all this story, however, there is one positive moment: many heads of tourist enterprises have finally familiarized themselves with the law under which they work. As a result, a decision was made: since there is opposition and this point is perceived with hostility, let the Cabinet of Ministers determine the mechanism and procedure for ensuring financial guarantees of tourism business entities. This norm was written into Article 20 of the draft law. But it also caused an ambiguous reaction. Especially from the people's deputies, who initially have a not entirely positive attitude toward government initiatives. It would be a pity if, during its discussion in the Rada, the norm provokes a debate not so much about its necessity, but about why the government should introduce the norm and why it is not spelled out in the law itself.
- And what does the Cabinet intend to propose regarding this norm?
- Taking into account the current sentiments of the people's deputies, which manifested themselves as a result of several of our recent meetings, including with the inter-factional deputy association in support of tourism, most likely several options will be submitted for their consideration. And let the deputies decide which one suits them better: the mechanism of insurance of financial liability of tourism business entities, a bank guarantee ensuring the financial solvency of the entities, or perhaps the same guarantee fund? Or maybe some other option. In the world, for example, there is also such a form as a bank deposit, though in our conditions it is not very acceptable. After all, the deposit remains an asset of the tourism business entity, and if, God forbid, bankruptcy occurs, the deposit is the same asset as buildings, funds in the account, and so on. This means that all existing rules of bankruptcy procedure apply here, and as a result the tourist ends up in the queue of all other creditors. Therefore, introducing such a mechanism just for the sake of introducing it is inexpedient.
- When can the law be adopted?
- This is already the third time that the people's deputies have been unable to vote on including in the agenda not only our issue, but many others as well. I can only say, based on my own experience, that there is a certain logic to how and when such events should take place. In my opinion, in the tourism industry, a law of this kind should be adopted either before March 1, or somewhere after October 1. Because entering the new season (during which tourism companies earn their main money to live on for the rest of the year) while, so to speak, being in a state of legislative experiment is wrong. Even the introduction of normal civilized norms still requires serious adaptation. And in the midst of the season, when tourists are flowing in, there is simply no time for that - you need to do your work. Although it is hard to predict how the people's deputies will decide the issue. They might vote everything through with a bang, or they might not approach the problem for months.
- If the law is adopted in the form you envision, how will it affect the practice of small tourism firms?
- The fact is that when a negative attitude is expressed toward the draft law and the changes it provides for in general, there is often a certain distortion of concepts. First, we are talking about business, and business is, a priori, making money. And in the charters of all business entities, including small enterprises, it is written that their goal is to make a profit. And if someone works unprofitably, simply doesn't know how to earn, then I completely fail to understand how these people intend to operate with other people's money. In this case, with the tourist's money. After all, the tourist pays first and then receives the service. Who should trust their money to such a would-be entrepreneur for his "business" experiments?
Indeed, small enterprises make up the majority of tourism business entities in our country. Today they perform 90% of the function envisaged by the new law. The only function that this draft law can take away from them is going to embassies and opening visas. Many of them, by the way, live off exactly that today. And then we hear that Ukraine is a supplier of illegal emigrants, that almost everyone here initially strives to leave for the West, and so on. So, these things—emigration and tourism—must be separated. That is what the draft law is aimed at. Therefore, fears that small tourism companies will not be able to work are far-fetched. What do these very 90% of their work volume represent today? They are not selling their own services, but those of our leading operators! That is, they conclude agency agreements and work. So what is the problem?
Another point: that small business which is an additional type of livelihood in relation to one's main occupation. It is also called rural or green tourism. This applies, for example, to the Carpathian region and Crimea. We are talking about people providing accommodation services. They do not fall under the definition of tour operator or travel agent at all! This is a completely different sphere of activity, and it is prescribed in a completely different section of the law. And when someone shouts that the establishment of a guarantee fund will lead to the fact that in the Carpathians and in Crimea homeowners will not be able to pay the notorious 130,000 hryvnias, he is simply being disingenuous. The fund has nothing to do with these people.
- Will the law not force small firms, in the literal sense, to pay not only for their own mistakes but also for the blunders of their business partners?
- We are talking about intermediaries. A tourism company—tour operator and travel agent—is by nature an intermediary. Since it is an intermediary, by its status it is responsible only for its own actions. If that is so, then who in such a situation is responsible to the tourist? When he deals with the direct producer of services, then it is clear who is responsible for what. And when a tourist works through an intermediary—where are the boundaries of responsibility of the first, second, and third parties in the process of serving this tourist? Therefore, with regard to responsibility, the thoughtfulness of the draft law raises no doubts in me. Moreover, the introduction of new norms should also lead to the structuring of the industry. After all, the practical state we have today—the presence of large, medium, and small companies—is not legally fixed anywhere. As a result, there is a regulatory swamp when a tourist 'butts heads' with an agent, who seems to be responsible to the tourist by nature. But in fact, the given tourist was served by the tour operator, and the agent suffered precisely because of the operator, but cannot prove anything.
With airlines, for example, which are, so to speak, the closest relatives of tourism organizations, everything is clear. The agent issues a ticket on behalf of the airline, and if he made a mistake in the ticket, he is responsible for exactly that. And if something happened during the service of the tourist during transportation, then the airline is responsible to the person who bought the ticket. How the agent settles accounts with the airline, all these procedures—that is their internal affair. These are two economic entities—let them sort it out. This is roughly the scheme envisaged by the draft law.
- What specific international experience was taken into account when developing the draft law?
- Unfortunately, in terms of scientific support for the industry, we lag far behind even our closest neighbors, for example, Russia. Only recently has the government adopted a decision to create a Scientific Center for Tourism Development—a structure that, in our opinion, should 'monitor' the market. That is, there are a lot of issues that should be handled specifically by scientists. In Russia this is how it works. For example, a textbook 'International Tourism and Law' has been published. It, in particular, cites the Italian law adopted in the framework of implementing the EEC directive of 1990. Article 21 of the law provides for a guarantee fund—it is written in black and white who pays what, where, how much, and why.
Today's tourism business is tied up in a triangle: travel firm—tourist—state. It is in this triangle that all legal relations are formed. And all over the world today, on the initiative of, first of all, coordinating international economic organizations, a norm is being introduced according to which persons who have received a license to engage in tourism activities are obliged to engage exclusively in this activity. So that what happens in our country does not happen, when 'Ukrvzryvprom', a meat processing plant, or the 'Department of Water Supply and Sewerage' start dabbling in tourism... Thank God, they have not yet gotten around to a funeral home! This cannot and should not be! Moreover, this norm is introduced not because one wants to somehow single out this sphere of activity, but for a simple economic reason—so that the funds accumulated by the travel firm are not transferred to another business. After all, another business is another risk. And this entails shifting the risk onto the tourist who paid the firm. And so you took a risk and, God forbid, 'got caught'. This can very well happen, and not necessarily as a result of fraud. Something was not taken into account and... as a result, the money is spent. There is no way to return the money to the tourist, nothing to provide the promised service with, and no way to settle with the service provider. What to do in such a situation? That is why such mechanisms are introduced—to ensure the safety of tourists' financial resources.
- But will this not actually limit the tourist's right to receive certain services from the firm with which he has concluded a contract? Something like: this is tourism, we can do it, but this is no longer tourism—we cannot do anything.
- “Exclusive type of activity” does not mean that a company is obliged to engage in tourism in its, so to speak, crystallized form. The draft law stipulates that a tourism company must do everything a tourist asks of it. You ordered a service - you provide it. Even if it is the most incredible and not explicitly spelled out in the law. Although the draft provides for all types of the most characteristic tourism services that companies have the right to provide. But again, the concept of a travel agent - this pure intermediary both on the part of service providers and on the part of the seller of these services - must be clearly separated from a tour operator, who on the part of providers can be both an agent and a buyer, and take under guarantee, and so on, and on the other hand bears full responsibility to the tourist, including for the actions of third parties. Someone must answer to the tourist for what happens. Especially when it comes to a person who has gone abroad. Where is he to seek justice there? At the consular office of Ukraine? And if it is located 500 kilometers from the scene? And if he has already returned here, so then what - sue somewhere far away?
Today we have several such classic operations in use. For example, I am an intermediary. For informing, telling, and showing, I received my money here - that is my payment. And for direct services abroad, please pay there. You paid abroad, then you failed to use the service - will you go collect the money abroad? How will you sue while in Ukraine? Or will you go to the Canary Islands, the Bahamas to sue? Therefore, the one who sold this “service” to our citizen here must bear responsibility for it.
- One of the reasons for amending the current law is said to be the need to bring Ukrainian legislation into line with international requirements. Who is demanding what from us?
- Nobody is making anything up here. There is a European Economic Community directive No. 90/314 of 1994. It divides all tourism companies into tour operators and travel agents, and spells out their rights and obligations in considerable detail. I think the EEC directive was written by people who know what they are doing. By the way, the Italian law already mentioned is also aimed at implementing this directive. There is another directive - “On a model contract.” Moreover, there are several EEC directives that we, unfortunately, simply could not take into account in the draft in any way, because they concern more complex matters - for example, timesharing - which we have not yet lived to see.
- Will the new law lead to a reduction in employment in the tourism industry?
- I do not share such fears, which are most often backed by manipulation of figures. I want to point out only two aspects. First: the tourism industry does indeed employ 130 thousand people. This figure is a stumbling block in our discussions with the opposing side, which keeps saying that their employment is under threat. But what does this figure actually represent? 130 thousand are people employed in five thousand hotels, sanatoriums, rest homes, campsites, motels, and so on, as well as about five thousand tourism enterprises. Of this mass of people, intermediaries who could be affected by the notorious guarantee fund (if the provision on it had been adopted) and the mechanism of financial guarantees in general, amount to only 13 thousand. This figure was obtained from official reports of the entities themselves. These reports are signed by them, sealed, and so on. Let me emphasize again - 13 thousand across 2.1 thousand tourism enterprises!
Second. A hundred largest tourism enterprises employ 6.5 thousand people, that is, 51% of those 13 thousand - who in any case will not go anywhere: they have been, are, and will be working on the tourism services market. That leaves 6.5 thousand whose employment may indeed be partly affected by the adoption of the law. But I want to point out the following. Of the approximately five thousand tourism business entities operating on the market today, 2,600 report. About 500 of them are hotels, sanatoriums, and so on, that is, accommodation facilities that are not classic tour operators and travel agents. An amazing thing happens: each of these enterprises accounts for 51 hryvnias in budget payments. This means that even if people were paid a minimum wage of 117 hryvnias, a budget payment of 51 hryvnias just wouldn't work out. Because a single payroll accrual from 117 would already give a different figure. And what about the other taxes? The average employment at these enterprises, according to their own data, is about three people. The question arises: do people actually receive wages, or is this hidden unemployment? And if 400 of these 2,100 enterprises show zero, I emphasize, zero reports - zero volumes, zero taxes, zero salaries... But three people are employed! What do they do? What do they live on? So, if anyone leaves the market, it will only be those who today are outright selling visas. And even then, not all. There will be craftsmen who will find loopholes even in the new legislation.
- Lately, Crimea seems to have become a stronghold of opposition to the draft law...
- I would not use such terms in this case. Because it is useful for the common cause when people worry and express their anxiety in various civilized ways and means. I would say - opponents, that is, those who disagree with you and have their own reasoned point of view. After all, the mess that has formed in tourism legislation has dragged along confusion in other legislation (pertaining to tourism, of course) - tax, foreign economic, and others, as well as in various instructions, including banking ones. All this disgrace has led to the fact that many travel companies have occupied their own niches. And therefore, even if very clever people had worked on the law, it would still, one way or another, have destroyed these profitable "quiet backwaters" in which one can build various financial schemes that allow legally, I emphasize, legally saving on taxes. Well, since the legislation allows it, why not build it? Well done! They cannot openly say that their scheme has been blocked. Therefore, the law as a whole is criticized.
As for Crimea proper, there were not one but about five meetings. And we are familiar with all the appeals of travel companies. But I emphasize once again: in my opinion, there are two variants of discussions. The first is if you and I understand that the legislation is imperfect and needs to be refined to conform to European norms. So that a foreign tourist comes here and knows that the laws work here exactly as they do in his own country. And if we understand this and our goal is the same, but each sees different ways to achieve it, a constructive discussion arises. And if someone says: yes, everything is bad, but nothing needs to be done, because you will come up with something even worse, then the discussion turns out to be unconstructive.
For the first time, in early December, I read in the newspaper "Voice of Ukraine" that, it turns out, there are still outrages in tourism. And even that the legislation needs to be improved... But before that, when we had just begun to discuss the draft law, I heard something else - that our law is simply ideal in its parameters and positions! And nothing needs to be changed! Heads of travel companies came to me and assured me that the tourism industry is a self-sufficient industry, self-regulating, and you here are inventing things! Why have you suddenly got concerned about tourists? And us, the heads of travel firms, did you worry about us? People do not even want to think about the fact that they are operating first with other people's money and only then receive their own.
- So, perhaps, the external misunderstanding of the law is just playing to the gallery? You yourself spoke about the occupied niches. In fact, they all understood perfectly...
- There is an elementary misunderstanding. Many, for example, criticize the draft law after reading only one norm. And they immediately begin to model how it all will happen, which causes corresponding emotions. You should not read just one norm! You need to see how it is interconnected with one, two, three, and perhaps ten more norms of the law. The number of 'torn out' norms, that is, those that are written in only one article and are not tied to others, is extremely small. And all the rest are very closely connected with each other. Indeed, often the questions that were asked to me were related to the fact that people read, for example, Article 21, but did not parse that Article 17, Article 1 with terminology, Article 32 with some subsequent ones, and so on are attached to it. And when you tie it all together, you look: indeed, everything seems logical.
Unfortunately, seven years without changes to the Law of Ukraine "On Tourism" have caused it to become detached from real life. There are only one or two specific direct-effect norms that need to be complied with in the law. Rights and obligations are hypothetical. And this is also one of the reasons why you feel quite comfortable, because the legal swamp allows you to turn the same situation in the direction you need.
- You yourself, before becoming an official, were engaged in practical tourism for eight years. Does amateurism irritate you?
- Not only me. Today, tourists themselves have become much more competent. They read more carefully the documents that travel companies give them to sign. This is evidenced, in particular, by the practice of complaints and appeals that come to us. Previously, people went abroad, and everything was 'all the same' to them, as long as they could get out, because they had never been anywhere. And now the complaints are serious, specific, and substantiated.
Alas, over the past years, a mass of non-professionals has appeared in the industry. Because outwardly it seemed that anyone could do tourism. In this office, I quite often have to meet with wealthy people who say: 'Let my wife do the tourism business!' But tourists are people who buy good mood from you. And if you cannot do this, organize as you should, you will have eternal problems. And then your amateurism will also affect tourism itself. The apparent simplicity of the tourism business leads to people thinking that they will earn money easily and simply. And some see in it a fairly simple scheme for accumulating funds for certain purposes.
- Do you plan to make any concessions during the discussion? Or is your tactic to stand to the last?
- Currently, both the authors and I are criticized for the fact that the draft law has not fundamentally changed in the time elapsed since its publication. But to many of these critics I can say: you sat here with me, we discussed, and for some reason the norm remained as it is. What does this tell us? I think it tells us that you and I, in principle, hold the same point of view. They say - well, we, they say, could not convince you. But wait! After the discussion, I asked whether everyone agreed with the position we settle on. 'Yes.' They leave, and then they say they do not agree with anything.
A proposal has been made to define tourism not as it is defined throughout the world (and there is a developed methodology in this regard, recommendations of the World Tourism Organization), but differently. Those who traveled through a travel agency are tourists, and everyone else is not. But such an approach entails the most unpredictable consequences. Both for the tourist and for those who provide services. For example, I wanted to go to Odessa. On my own. I arrived, I live, I eat at a restaurant, I use transport... Who am I? Not a tourist? A homeless person?
On the other hand, the adoption of such a formulation may lead to the fact that, for example, travel companies as business entities will fall out of the structures that are involved in ensuring part of the technological processes of other companies not engaged in tourism. I have met with more than one foreigner and always asked how he came to us. "I went to a company in Canada, ordered all services there, it booked everything for me here. I paid the money there, but how it settled here, I don't know, it's not my business." I ask how this money is written off - he is a tourist, albeit a business one. "How? As expenses, where else should they be written off?" So, in such a situation with us, if we adopt the proposed formulation, this person will no longer be a tourist. And a travel company will not have the right to serve a non-tourist. And if it does serve, then who and for what should be responsible? How then to license all this?
- Can it be said that the discussion allowed us to see the existing problems more deeply?
- To some extent, certainly. I am even glad for many travel companies - they come up with such schemes, well, simply ideal. For example, some point is criticized, and to show its inconsistency, a possible situation is described. Of course, in life such a situation can only be modeled. Because it has no real economic meaning. After all, if you do not earn money on this, then why carry out such an operation? Nevertheless, such a utopian, in essence, model is proposed, and on its basis the norm is criticized.
I share the concerns of tourism business entities. The long absence of changes in the law has led to the fact that company executives no longer hope that anyone can do anything to bring the domestic tourism business into a civilized channel. However, the long period of discussion of the bill, meetings of tourism business entities - all this made people think about what they are doing. And, probably, many of them understand that if they pursue only their own interests, then there is simply nothing to talk about in terms of business as a whole. Then there is no reason to be indignant that in the embassies of civilized countries we are considered nobody. Whatever the legislation is, that's how they react to us - as third-class people. Therefore, personal interests should be commensurate with the interests of tourists, the state, and travel companies. Otherwise, the mess that was and still is will continue.