Radio workers were unable to reach an agreement with the Ukrainian Music Alliance (UMA) on royalty tariffs for the use of music works and phonograms. Representatives of the Radio Committee note that tariffs must be based on economic justification and that the formula for calculating  royalties proposed by the UMA is unacceptable - it does not take into account the criteria provided for by law. 

"Furthermore, during the negotiations (with UMA – editor’s note) it was said that the tariffs will be revised every year. For the radio business, as for any business, predictability is important. And in this case, we cannot predict how tariffs will change," said Oleg Solimchuk, National Media Association (NAM) lawyer, Radio Committee partner. 

During the quarantine, UMA sent letters to radio workers demanding to sign a contract with them by May 15. According to Oleg Solimchuk, the letters were written in the form of an ultimatum and contained several provisions that contradict the law or cannot be implemented. For example, UMA offers a monthly fee, but radio stations make annual reports and the monthly accounting is an additional burden on business. Several provisions of the document require an interference in commercial activity. 

Interestingly, UMA requested information about all authors of all musical works that were used on the air, .Such information should be in an automated system, which should have been implemented by the Ministry of Economic Development and Trade of Ukraine, but has not yet done so. The system is still only on paper. 

Earlier, the Consumer Electronics Committee of the European Business Association, which represents importers of equipment and electronics, noted that the increase of private copying levy offered by the Ukrainian Music Alliance will increase the cost of equipment for end-users and make the business of official importers even more non-competitive. "It is important to negotiate in a normal manner to find a fair and logical solution. After all, the format proposed earlier was not constructive and did not allow business representatives to fully participate in the negotiation process. It is not permissible to implement additional unjustified levies for manufacturers and consumers in a rush, especially during the current economic crisis and a sharp decrease in the purchasing power of Ukrainians,” - the EBA commented on the format of negotiations with UMA amid lockdown. 

The UMA collective management organization was established by phonogram producers and accredited by the Ministry of Economic Development and Trade of Ukraine to collect royalties from TV channels, radio, importers and electronics manufacturers. On July 30, 2020, the Sixth Administrative Court of Appeal declared illegal and revoked the decision of the Cabinet of Ministers of Ukraine of August 14, 2019 № 696. This decision of the Cabinet of Ministers amended the previously adopted regulatory acts, which regulated the payment of royalties in various areas before enactment the Law of Ukraine "On effective management of property rights of copyright holders in the field of copyright and (or) related rights" and which were adopted in 2003. 

"In fact, the Cabinet of Ministers of Ukraine approved temporary tariffs, without making any calculations, in particular: economic justification of tariffs, their compliance with economic indicators in 2019 and the impact of such temporary tariffs on economic activities of business entities that fall under the regulatory influence of the contested decision." - it is said in the court decision.