Business Ukraine 01/2019

Issue 01/2019

KYIV REAL ESTATE GUIDE

12 months, UAH, per annum

BUSINESS UKRAINE 01/2019: This month’s issue focuses on the Kyiv real estate sector. The Ukrainian capital is one of Europe’s fast-growing cities and is also home to some of the continent’s greatest historical and natural treasures. This makes for a vibrant and dynamic real estate market where investment opportunities and heritage challenges can often be found in close proximity.

The Eurovision Guide to Modern Ukrainian History Anyone who feels that Eurovision has become too politicized need look no further than Ukraine for confirmation. Nobody takes the song contest quite as seriously as the Ukrainians, who treat it as an extension of foreign policy complete with furious nationwide debates and heavy-handed government interventions. The latest scandal, which has seen Ukraine withdraw from Eurovision 2019 after the winner of the national competition was deselected following outcry over her decision to continue performing in Russia despite the undeclared war between the two countries, is entirely in keeping with the exaggerated political importance attached to Ukraine’s annual participation.

This seemingly complete lack of any sense of proportion over something as harmless as the Eurovision Song Contest is a symptom of the unresolved national identity issues that continue to hamper independent Ukraine’s nationbuilding efforts. Indeed, for students of modern Ukrainian history, the country’s yearly Eurovision soap opera offers an entertaining and informative guide to Ukraine’s broader post-Soviet progress.

For the first ten years of independence, Ukraine did not participate in Eurovision at all. This absence mirrored the country’s international anonymity during a lost decade which saw Ukraine mired in domestic dysfunction and firmly entrenched in Russia’s shadow. Ukraine’s Eurovision odyssey finally began in spring 2004 when Ruslana’s “Wild Dances” won the song contest in what was only the country’s second appearance. Outside of the sporting arena, this was Ukraine’s first major international success since independence and its impact on Ukrainian society was disproportionately large. It is no exaggeration to suggest that Ruslana’s victory helped fuel the rumblings of a national awakening that would erupt months later with the Orange Revolution. Her folksy ethno-anthem chimed perfectly with the zeitgeist of the time, resonating among a generation of Ukrainians starved of reasons for patriotic positivity and setting impossibly high standards for all who would follow.

If Ruslana’s victory was a cultural landmark in Ukraine’s nation-building journey, the Ukrainian Eurovision entry three years later represented a bold declaration of the country’s European credentials. Cabaret drag act Verka Serdyuchka’s glorious 2007 effort was quite simply peak Eurovision. Everything from the artist’s human disco ball costume and playfully political chorus of “Russia Goodbye” to the song’s infectious Eurotrash beat and nonsense mishmash of English and German lyrics made for the quintessential Eurovision experience. It showcased the rising self-assurance of post-Orange Ukraine as a nation with the confidence to laugh at itself and the savvy to appreciate the kitsch ethos that defines Eurovision. Verka was ultimately beaten into second place by Serbia following an avalanche of incestuous Balkan block voting, but Ukraine’s entry has since come to be recognized as the best song never to win the contest. Sadly, it was also to prove the country’s first and last attempt at light-hearted Eurovision humor.

Ukraine continued to take Eurovision far too seriously throughout the late

2000s and early 2010s, maintaining its budding song contest superpower status by finishing second again in 2008 before claiming third in 2013. By now, the annual selection process had evolved into one of the highlights on the Ukrainian showbiz calendar, attracting the biggest star names and generating months of headlines as the nation subjected each candidate to the kind of po-faced scrutiny more typically reserved for key ministerial appointments.

The Russian seizure of Crimea and invasion of eastern Ukraine then brought the country’s Eurovision bandwagon to an abrupt halt, with the authorities deciding in early 2015 not to enter that year’s song contest. With Ukraine’s continued existence as an independent state hanging in the balance, few had time to dwell on this temporary withdrawal. Nevertheless, for the Eurovision-loving Ukrainian public, it served to underline the gravity of the crisis.

Ukraine returned to Eurovision in 2016 as a battle-hardened nation intent on weaponizing the contest to refocus international attention on Russian aggression. The result was arguably the most political Eurovision entry of all time. The song in question officially addressed the WWII-era Soviet deportation of the Crimean Tatars, but few were under any illusions that the real subject matter was the contemporary Russian occupation of Crimea and Putin’s ongoing hybrid war against Ukraine. A lesser artist might have crumbled under the weight of such lofty geopolitical ambitions, but Crimean Tatar diva Jamala rose to the occasion and gave the performance of a lifetime to secure Ukraine’s second Eurovision win.

Jamala’s achievement was a masterpiece of cultural diplomacy that succeeded in thrusting the Ukraine conflict back into the international spotlight. Not everyone was impressed, however. Many commentators accused Ukraine of hijacking Eurovision and bemoaned the politicization of an event originally conceived to bring Europeans closer together.

The debacle of Ukraine’s 2019 Eurovision selection process suggests we are no nearer to leaving the politics behind. On the contrary, Eurovision remains hostage to the culture of paranoid politicization that has permeated so many aspects of daily life in today’s Ukraine.

Over the years, the song contest has played a useful part in Ukraine’s wider struggle to assert its European identity, but all too often it has also been the cause of partisan squabbling that has aggravated national divisions and left the country out of tune with the rest of the continent. This is not how it is supposed to work. The bitter irony, of course, is that there is nothing more European than treating the annual song contest as a bit of a joke. When Ukrainians finally learn to regard Eurovision as an apolitical exercise in sheer silliness, we will know that Ukraine has truly come of age as a European nation.

About the author: Peter Dickinson is the publisher of Business Ukraine magazine and a nonresident fellow at the Atlantic Council

5

FLY M O R E WITH THE AIRLINE THAT FLIES TO MORE COUNTRIES THAN ANY OTHER

turkishairlines.com

THE BRITISH UKRAINIAN CHAMBER OF COMMERCE (BUCC) Annual Statement

The UK Trade Minister, Liam Fox MP, addresses Ukrainian Week in London The British Ukrainian Chamber of Commerce (“BUCC”) brings together companies and individuals doing business in Ukraine and/or the UK, including in the City of London, the international financial capital for Europe, Africa and the Middle-East. The BUCC’s Committees, described below, conduct a wide variety of other business focused activities. We also organize many charitable activities for Ukraine.

During 2018, the BUCC organized or participated in the holding of over 50 events in Kyiv, London and Lviv, and conducted numerous other activities for our Members, including Ukrainian Week in London, described below. The BUCC holds monthly networking events in Kyiv, and is now doing so in London. We also include within our focus the Commonwealth nations, and last year held events on India and Malaysia.

The BUCC’s Discount E-Card The BUCC is launching the BUCC Membership “E-Card” to give discounts to our Members of 5% to 35% at leading restaurants, hotels, shops, etc. in Ukraine and the UK.

UKRAINIAN WEEK IN LONDON The BUCC organized Ukrainian Week in London in October 2018, attended by over 1,000 participants at the Savoy Hotel, the EBRD and RUSI, the largest event ever held abroad on Ukraine. At Ukrainian Week, the UK Secretary of State for Trade, Liam Fox, announced that Ukraine will now receive priority consideration from the UK for a new, post-Brexit, free trade agreement (along with the US, China, Japan, Canada, Australia and several other important trading countries). First Deputy Prime Minister Kubiv also spoke on Ukraine’s desire to increase trade with the UK. The BUCC, through its Ukrainian Week in London initiative, aims over the next several years during the UK’s Brexit transition, to accelerate the development of greater commercial integration between the UK and Ukraine. We believe that the UK, as Europe’s largest net importer of food, should become the principal trading partner in Europe of Ukraine, Europe’s largest net exporter of food.

Ukrainian Week is now an annual event to showcase Ukraine’s investment and trade opportunities and create business links. We will hold this year’s event during the week of 2 December 2019.

COMMITTEES The BUCC focuses on facilitating the development of major projects to address important business needs for Ukraine through the following Committees.

AGRICULTURE COMMITTEE The BUCC’s Agriculture Committee currently focuses on (1) developing future UK markets for post-Brexit trade, and (2) encouraging greater irrigation farming to respond to the problem that crop yields in southern Ukraine are decreasing due to more frequent droughts, apparently due to climate change.

The BUCC has a proposal to exempt, from the current Moratorium on the sale of agricultural land, sales of land in designated drought destressed areas to farmers that commit to spend specified amounts on irrigation equipment, since land leases do not provide such a suitable basis for such investment.

BRITISH-UKRAINIAN IT COMMITTEE The BUCC’s British-Ukrainian IT Committee brings together IT associations and clusters, IT companies and others involved in IT in the UK and Ukraine.

Ukraine is increasingly important to UK IT, as (1) Ukraine is one of the world’s leading IT outsourcing destination (after India and China) and the leading IT outsourcing destination for the UK, (2) Ukraine is a leading destination for western IT firms to invest in branches for software development and (3) leading Ukrainian IT companies increasingly have branches in the UK, presenting cutting edge innovative ideas to the UK market.

TRADE, INVESTMENT AND BREXIT COMMITTEE The BUCC’s Trade, Investment and Brexit Committee is reacting to Brexit with strategies to develop further trade between Great Britain and Ukraine. Because the UK imports more than half of its food, Ukraine, as one of the world’s largest food exporters, should be a major beneficiary from Brexit as soon as a new UKUkraine free trade agreement applies to replace for the UK the restrictive EUUkraine DCFTA and the Committee is focused on encouraging the conclusion of such a trade treaty. Ukrainian Week in London was, in particular, intended to promote the priority execution of a new UK-Ukraine free trade agreement.

LAW AND ACCOUNTING COMMITTEE The BUCC’s Law and Accounting Committee has projects (1) for establishing branch UK and US law school LLM programs in Ukrainian law schools (in some cases with other business associations), and (2) for reform of Ukrainian laws and the Ukrainian legal system. The BUCC has proposed the creation of one-year UK or comparable foreign LLM law programs at leading Ukrainian law schools, in particular because of the reduction in scholarship programs to allow Ukrainian law students to study abroad.

REAL ESTATE COMMITTEE The BUCC’s Real Estate Committee has obtained significant changes to the implementation of the laws and regulations on the OSBBs that manage

buildings in Ukraine (please see our previous KyivPost article on this on our website). We are continuing our work to improve OSBB management (and, discourage corporate raiding of buildings).

INFRASTRUCTURE AND TRANSPORTATION COMMITTEE The BUCC’s Infrastructure and Transportation Committee is concentrated on improving container transport through Ukraine. This was one of the focuses of the discussions with the President of Ukraine at the BUCC’s dinner at the Armourers Hall for his official visit to London.

TOURISM COMMITTEE The BUCC’s Tourism Committee promotes tourism in Ukraine and the UK. In particular, we are focused on London, as Europe’s largest market for attracting tourists to Ukraine. The Committee is presently aimed at obtaining UK destination tourism PR for Ukraine, to show potential UK tourists the excellent sites, restaurants and hotels that Ukraine has to offer, such as in Lviv, Kyiv, Chernihiv and Odesa.

ART, DESIGN AND CULTURE COMMITTEE Among other cultural initiatives, the BUCC has been holding exhibitions and receptions on the Ukrainian Impressionist artist Mykhailo Tkachenko, who was one of the prominent early impressionist artists painting in Paris when Impressionism was developed, but who was largely forgotten after his death in Kharkiv in 1916. Professor James Rubin, one of the world’s leading experts on Impressionism, has spoken at several of our Tkachenko Impressionism events, featuring notable paintings by Tkachenko. The Committee plans to hold a major exhibition of Tkachenko paintings in leading museums in London, Paris and New York.

OTHER BUCC INITIATIVES LEGAL OMBUDSMAN PROPOSAL For Ukraine’s judicial reforms and anti-corruption programs to actually help protect UK and other foreign investors into Ukraine, the BUCC has developed a proposal for a Judicial Ombudsman for Ukraine, as was developed by Sweden when corruption in the Swedish courts was a problem in the early 1900s (in addition to the Business Ombudsman that focuses on administrative issues).

This proposal would allow litigants to take court decisions that constitute an abuse of justice to the Judicial Ombudsman for immediate review.

POLITICAL RISK INSURANCE The BUCC believes that Ukraine needs greater availability of insurance for political/conflict risk, so that such risk does not discourage foreign as well as domestic investment in Ukraine. The BUCC’s proposal for this is based on increasing the level of political/conflict risk insurance available from the World Bank’s MIGA, just as has been previously successfully organised, for similar reasons, for the West Bank and Gaza.

The BUCC is a very active Chamber, but we need your support to carry out our activities for a better Ukraine. To join the BUCC, please contact us at +38 (044) 490-6000 or 278-1000 or by email to buccukraine@bucc.com.ua Further information on the BUCC, including pictures and press releases on BUCC events, can be found on our website (www.bucc.com.ua) and the BUCC Facebook Page.

Kyiv Real Estate

Investment Guide The Ukrainian capital is one of the fast-growing cities in Europe with an estimated population of four million that is expanding by hundreds of thousands annually. Today’s Kyiv boasts an increasingly dynamic local economy and a vibrant cultural scene that is benefiting from the city’s status as focal point of Ukraine’s post-2014 national reawakening. Events such as the 2017 Eurovision Song Contest and the 2018 UEFA Champions League Final have helped to raise Kyiv’s international profile, with record numbers of visitors from EU and Asian countries in 2018 and expectations for further tourism growth in 2019.

Getting to Kyiv has certainly never been easier. The city’s primary air hub Boryspil International Airport has seen annual passenger volumes virtually double between 2014 and 2018 from 6.9 million to 12.6 million. New airlines including everyone from prestige carrier Qatar Airways to low-cost market leader Ryanair have recently launched Kyiv flights. Meanwhile, in late 2018 the city unveiled a long-anticipated express train service connecting the airport to the central railway station in downtown Kyiv.

Kyiv is at the heart of Ukraine’s economic transformation as the country looks beyond the old Soviet comfort zone and builds business bridges with the wider world. Long dependent on trade with Russia, key Ukrainian export markets now include the European Union, China and India. Kyiv unites the country’s twin economic engines of grains and brains, hosting the head offices of Ukraine’s giant agricultural concerns and serving as home to the nation’s largest IT cluster.

All this makes Kyiv a theoretically attractive real estate investment opportunity. However, many potential investors are hesitant due to well-publicized corruption and rule-of-law issues that continue to plague Ukraine as a whole. Security concerns also provide an unwelcome distraction. Russian troops are firmly entrenched in the

12

eastern borderlands of the country and remain in control of Crimea, with no end in sight to a geopolitical confrontation that has dragged the entire world to the brink of a new Cold War. While these challenges should not be underestimated, it is also worth noting that they are not new. Meanwhile, the slowly mounting international buzz around Kyiv suggests that the positives may finally be starting to outweigh the possible pitfalls.

Perhaps the biggest single obstacle to Kyiv’s emergence on the international investment map is the lack of accurate information reaching outside audiences. Global media coverage of Ukraine remains fixated on the question of Russian aggression and still tends to come via Moscow-based correspondents who are understandably reluctant to sing the praises of a nation that is in the process of escaping from the Kremlin orbit after hundreds of years in Russia’s shadow. As a result, Ukraine remains Europe’s best kept secret, with Kyiv as the jewel in the shrouded crown.

This situation cannot continue indefinitely. Indeed, there are already indications that international investors are waking up to Ukraine’s potential. The past eighteen months have seen numerous major strategic investments in the agriculture, infrastructure, manufacturing and tech sectors from a host of EU-based companies along with their Norwegian, American, Canadian, Saudi Arabian, Korean and Chinese counterparts. Ukrainian investment groups are also increasingly betting on the future of their own economy, with record volumes of commercial real estate acquisitions during 2018. If this trend continues, margins will narrow and the early bird advantages currently available to investors will evaporate. For the time being, however, Kyiv offers some of the most exciting real estate opportunities in Europe for those prepared to gamble on the continent’s last great frontier market.

real estate

www.bunews.com.ua

13

real estate

Kyiv Mayor Klitschko seeks to cultivate Europe’s garden city The rapid expansion of the Ukrainian capital creates real estate opportunities and heritage challenges

About the interviewee: Vitali Klitschko is the Mayor of Kyiv Today’s Kyiv is among Europe’s fastest-growing cities. With a population already well above the official figure of around three million, it is also one of the continent’s largest capitals. This growth is fuelling a construction boom that presents both considerable investment opportunities and challenges as the city’s ancient heritage sites and famed green spaces come under threat.

Kyiv Mayor Vitali Klitschko told Business Ukraine magazine how he intends to strike the right balance between development and preservation, and explained why he thinks now is the right time for international real estate investors to consider the Ukrainian capital.

What do you regard as the most exciting real estate development opportunities in today’s Kyiv?

The most interesting individual projects at present include the plans for an aerial cableway over the Dnipro River and the development of the amusement park area in Gydropark (a popular island recreation zone located in the middle of the Dnipro River in the geographical heart of Kyiv – Ed). Over the past three years, Kyiv has concluded 37 real estate investment agreements worth over UAH 1.35 billion. These projects involve a broad range of sectors 14

including infrastructure services, commercial property, retail, residential, schools, healthcare, and sports facilities. Work also continues on plans to develop the city’s brownfield land. This should result in the transformation of abandoned Kyiv sites into venues for fabulous contemporary architecture.

How can Kyiv develop as a modern international capital city while preserving its historic architectural heritage?

Protecting Kyiv’s historic architectural heritage is a hot button issue nowadays. In the past, former city administrations have been guilty of transferring large numbers of publicly owned historic buildings into private hands.

Some particularly unscrupulous developers have even intentionally engineered the deterioration and demise of historically important buildings in order to receive the necessary permission to erect shopping malls and residential buildings in their place. We aim to take back control of Kyiv’s neglected buildings and plan to pass the necessary legislation in the near future. Last year, Kyiv City Council initiated amendments to the Law on Cultural Heritage Protection and other related regulations. The bill has passed an initial reading and we hope it will become law soon. This is a particu- : www.bunews.com.ua

100 Velyka Vasylkivska Street Kyiv, Ukraine

Tel. +38-044-495-85-33 Fax. +38-044-495-85-15

Official website: torontokyiv.com Official Facebook Page: https://www.facebook.com/torontokyiv/ Official Instagram Account: https://www.instagram.com/torontokyiv/

real estate

: larly pressing issue given the pace of Kyiv’s expansion. The population of

the Ukrainian capital is growing at a rate of around 200,000 newcomers per year, so there is strong demand for new residential real estate along with the kind of accompanying infrastructure necessary for a comfortable modern lifestyle. To meet this challenge, we have introduced a Smart City system of municipal government. The goal is to make city life more convenient and improve local services. We are also trying to keep pace with the latest global trends in urban innovation. This includes Kyiv’s new City Data Centre, the Kyiv resident card, online medical appointment and kindergarten enrollment schemes, e-petitions and more. At the same time, we are very conscious of the need to preserve the city’s heritage. Kyiv’s ancient history and extensive green spaces are essential elements of the city’s unique personality. The key is to strike the right balance between safeguarding this inheritance and implementing modern innovations that will improve the quality of life in the city.

For the first time in the modern history of the Ukrainian capital, we have created a database of Kyiv landmarks including information on the status of every historic building. This publicly accessible database already includes over three and a half thousand entries and is just one of numerous initiatives launched to protect ancient Kyiv. Last summer, Kyiv City Council adopted a resolution on the preservation of archeological treasures excavated close to Poshtova Square, including the remains of buildings dating back over one thousand years to the Kyiv Rus era. Work is underway to develop an Archeological Conservation Center and museum via open tender.

Kyiv is one of Europe’s greenest major cities. Are the city’s parks and green zones safe from property development?

It is true to say that Kyiv is a city of parks. As the municipal authority, we do everything we can to preserve this status by expanding the number of wellkept green zones while reconstructing and repairing old parks and squares.

Over the last four years, 308 land plots have received protected green status from the city council. During the same period, we have redeveloped 339 parks and squares. One prominent example of these efforts is the formerly abandoned Natalka Park, which has escaped encroaching development thanks to a combination of the Kyiv authorities and urban activists. This is now one of the finest parks in the city. It has become a genuine Kyiv landmark and a real feather in our collective cap. This process will continue. Despite the many challenges we face, I am confident that Kyiv will remain by far the greenest major capital city in Europe.

Kyiv has witnessed significant real estate development in recent years without the accompanying development of local infrastructure to accommodate greater numbers of residents. How can this challenge be resolved?

As Kyiv has grown in recent years, we have indeed encountered problems due to chaotic development. The questionable distribution of construction permits as long as ten years ago has also created numerous contemporary issues. We are now attempting to untie the various knots resulting from this legacy, because property developers often ignore municipal development rules. The same is true for local infrastructure such as kindergartens, schools and hospitals. We are increasingly pressing the construction industry to adhere to development standards. This includes warning developers against the prevailing culture of “regulatory nihilism”. The feedback we receive direct from the community must take first priority and we will consistently cancel land tenancy agreements for property developers who break the rules or fail to meet their obligations.

What message should Kyiv be sending to international investors and real estate developers considering the city as a potential investment opportunity?

One of the cornerstones of Kyiv’s investment attraction policy is the transparency and accountability of the city authorities. This approach seems to work well. Over the past few years, Kyiv has been the largest Ukrainian recipient of investment, welcoming 60% of total investment and a third of all capital investment coming into the country. In 2018, Foreign Direct Investment Magazine recognized the Ukrainian capital for its attractiveness as an investment destination and positively assessed its approach to foreign direct investment.

Meanwhile, Kyiv ranked third among major European cities for cost effectiveness and entered the top 10 for FDI strategy in the Major European Cities of the Future 2018/19 ranking. This approach includes a number of specific propositions designed to appeal to international investors. For example, the city has revised rental rates for municipal premises and now provides a 30% discount on all municipal properties. Anyone looking to invest in private education can benefit from a symbolic annual rental rate of just one hryvnia. In addition to this, we offer to refund 30% of costs related to energy efficiency improvements. Kyiv is also the first Ukrainian city to integrate Smart City solutions into its urban governance. Smart technology is one of the most promising fields for investment, especially as the Ukrainian capital is now among the leaders of the East European IT industry. Today’s Kyiv is an IT hub hosting 40% of the country’s IT professionals, making it the ideal place to implement Smart City innovations.

Whenever I am networking with potential investors, I always emphasize my readiness to serve as a personal bodyguard for each individual investor in order to protect them from corruption and bureaucracy. Anyone visiting Kyiv will see the dynamic pace of the city’s development for themselves and will quickly appreciate the investment opportunities this creates. My advice to investors is to seize these opportunities now while they are at their most attractive.

“The population of Kyiv is growing by around 200,000 people per year, so there is strong demand for new residential real estate along with the infrastructure necessary for a comfortable lifestyle” 16

www.bunews.com.ua

real estate

Kyiv real estate market passes the stress test Kyiv’s transition from survival to growth mode is driving demand for more sophisticated properties

About the interviewee: Yuriy Kryvosheya is President and Managing Partner of PJSC Toronto-Kyiv As President and Managing Partner of the Toronto-Kyiv complex in the heart of the Ukrainian capital, Yuriy Kryvosheya has over two decades experience of international investment in the Ukrainian real estate market. He sees the Ukrainian-Canadian joint venture, which features the country’s first Holiday Inn hotel as well as office, retail and other commercial elements, as a case study of successful international real estate collaboration in Ukraine that underlines the importance of finding credible local partners. Kryvosheya believes current Ukrainian market trends are creating a window of opportunity for similar successes. He also counsels against excessive investor caution, arguing that the margins presently on offer will diminish once international audiences become more familiar with Ukraine’s increasingly enticing investment story.

Kryvosheya’s optimistic outlook sits on the twin foundations of Ukraine’s broadly encouraging macroeconomic performance and the seemingly insatiable demand for quality new properties within the country’s commercial real estate sector. The Ukrainian economy posted 3.4% annual GDP growth in 2018, the third successive year this key indicator has risen. GDP forecasts show continued increases in 2019 and 2020, reflecting the belief that after years of turmoil and transition, the Ukrainian economy is on the right track. “Now is a good time for foreign investors to enter the Ukrainian real estate market,” comments Kryvosheya. “The country as a whole has moved from survival mode to growth mode, but a lot of properties are still emerging from the post-crisis period and price levels in many cases have yet to catch up. This creates opportunities for investors to benefit from additional marginality. The further they delay, the higher the entrance ticket price they will have to pay.”

18

Today’s Kyiv is a rapidly expanding and modernizing city that is more New Europe than Post-Soviet. Anyone visiting the Ukrainian capital will be struck by the sense of vibrancy reflected in a diverse range of commercial real estate projects that are already overtaking many Western capitals in terms of creativity and sophistication. This boom town mood is evident in everything from Kyiv’s funky co-working office culture and globally-competitive restaurant scene to the city’s innovative retail spaces and multi-purpose residential complexes featuring entire lifestyle eco-systems.

One key driver behind this upwards trajectory is the Ukrainian IT industry, which has risen to prominence in recent years as an increasingly crucial component part of the national economy while attracting attention and investment from many of the world’s biggest tech brands. IT companies are helping to change attitudes towards working environments and fueling growing demand for quality office space that local developers are struggling to meet. Undersupply has become such an issue that Kryvosheya says some companies are now exploring the possibilities of paying a premium to convert high-end retail space into office premises. “Smart real estate investors who are able to offer quality supply to the market might find they have a competitive advantage. In today’s Ukraine, more and more companies appreciate the importance of a quality working environment. It has become an important element of HR policy. You need the proper infrastructure to attract the right staff and retain them.”

Kryvosheya sees the greater sophistication of Kyiv’s commercial real estate market as a sign of the times as Ukraine becomes more sure of itself within the wider international community. “It’s a mix of different factors coming together,” he says. “In one sense what we’re seeing is a natural evolution within Ukrainian society as people grow increasingly worldly in their outlook. Inevitably, their expectations also become more sophisticated. There is also a sense that the business community realizes they need to rely on themselves to create the country they want. They are not prepared to wait for the government to fix things for them. Instead, domestic investors and entrepreneurs are going where their creativity leads them. Their success is convincing others that there is huge appetite for creative approaches in Ukraine. All this is having a direct impact on the economy by creating additional demand.”

This sunny appraisal of Ukraine’s real estate investment appeal overlooks the seemingly ominous geopolitical clouds on the horizon, with the conflict in eastern Ukraine still far from resolved and Crimea under Russian occupation. Tensions with Russia and domestic political instability are often cited as reasons to delay any decisions on entering the Ukrainian market, but Kryvosheya believes these factors should not be overstated. “None of the most pessimistic predictions regarding Ukraine in recent years have come true,” he notes. “In reality, things tend to turn out more positively than the forecasts. Some investors will always find excuses not to invest in Ukraine, whether it is waiting for presidential elections, parliamentary elections, or specific reforms, but this hesitation could prove expensive. When today’s cautious investors become more bullish on Ukraine, those who invest now will already be in a position to gain.”

Kryvosheya says the turbulence of recent years may actually have strengthened Ukraine’s case as a potential real estate investment destination by demonstrating the market’s durability. “If I am a provider of capital like a bank, I need to analyze how a client will behave during bad times. Will they survive the crisis? In the case of Ukraine and the country’s commercial real estate market, you do not need to rely on theoretical models. The country went through a major stress test in 2014 and 2015 and now has a proven track record.” www.bunews.com.ua

real estate

Reforms and real estate Ukraine’s improving economy highlights how reform agenda is creating a better business environment Over the last few years, global investments into the real estate sector have increased by around 18%, according to the latest “Winning in Growth Cities” report. Can Ukraine play a greater role in this growing international real estate investment trend? That largely depends on the vision and expectations of potential investors, as well as international awareness of changes taking place in the Ukrainian legislative environment that are helping to create a more attractive investment climate.

While the Ukrainian market cannot yet provide the variety of investment instruments that are commonly found in the more mature investment markets of Western Europe and North America, today’s Ukraine is currently demonstrating stable economic growth and can offer numerous interesting opportunities for active and adventurous investors. The latest developments in the country’s legal framework offer particular encouragement for anyone considering the Ukrainian real estate market as a possible investment destination.

One of the first things for any potential investor to note is that Ukraine ranks highly among European markets in terms of undervalued real estate prices. At the same time, the country’s key financial and economic indicators reflect a market that is both relatively stable and positioned to continue along the current trajectory towards further growth. According to the National Bank of Ukraine, the country’s GDP grew by more than 3% in 2018, an increase that was in line with the expectations of most ratings agencies and international financial institutions.

This stability is even more noteworthy given the external aggression the country continues to face. Towards the end of 2018, an escalation in this aggression forced the Ukrainian government to temporarily impose martial law in maritime regions and parts of the country bordering Russia. In practical terms, this month-long period served as a stress test for the Ukrainian economy and highlighted the localized nature of the conflict, while also demonstrating the ability of the country’s financial system and real estate market to remain stable in such conditions.

It is possible to identify numerous positive indications in the Ukrainian real estate sector.

20

About the author: Natalia Kochergina is a Partner and Head of Real Estate and Construction at DLA Piper Ukraine LLC Indeed, some industry experts regard 2018 as the most successful year in the past decade for the Ukrainian property market in terms of both investment volumes and the number of transactions on the market. This progress is also being felt in the country’s retail sector, with global brands such as H&M and Under Armour entering the Ukrainian market over the past year. Swedish furniture giant IKEA has also confirmed plans to open its first Kyiv outlet in 2019.

The relative stability and sustained recent growth of the Ukrainian economy are partly down to the country’s reform agenda. This has included measures broad measures such as government decentralization and the removal of grounds for the abuse of office, along with specific improvements to Ukraine’s title registration and protection system and more modern approaches to the management of stateowned property. Ukraine continues to modify its legal framework to make the business environment for investors safer and more attractive. Significant changes have been introduced to corporate governance rules, currency regulations, real estate finance, the regulation of construction, and the use of agricultural lands.

On 7 February 2019, Ukraine introduced sweeping new changes to the country’s cur-

rency regulations, repealing a range of obsolete rules that dated back to 1993. These new regulations cancelled existing currency restrictions on things like exchange controls, the mandatory sale of revenue in foreign currency, and the registration of loan agreements with nonresidents of Ukraine. This provides greater flexibility for businesses while making it easier to attract financing for real estate projects.

In June 2018, a new law on limited and additional liability companies came into force. Key changes include the introduction of shareholder agreements, an end to limitations on the number of participants in share capital of a limited liability company, and the cancellation of some formalities regarding the transfer of shares in the capital of limited liability companies. Also last summer, the Ukrainian parliament passed a law governing the renewal of loans in order to provide greater protections for mortgage borrowers. This is expected to help facilitate the granting of loans secured by mortgages, resulting in new capital entering the Ukrainian real estate market.

Construction sector reforms have been particularly significant, with more the 150 amendments introduced to the country’s construction industry regulations in 2018. Most of the obsolete requirements for road and residential construction have been abolished, opening the door for new projects. These changes also pave the way for the development of multifunctional complexes and are expected to have a positive impact on street-level retail thanks to the removal of restrictions on business activities in residential complexes.

Over the past year, the Ukrainian business climate has already felt the positive effects of previously implemented and far-reaching reforms of the legal framework that underpins Ukraine’s investment climate. This has allowed the Ukrainian economy to remain stable despite hostile external impacts. At the same time, further steps were taken in 2018 towards the liberalization and harmonization of Ukrainian legislation with the best contemporary regulatory practices in the world. In the coming years, these measures should encourage further economic growth, which is why the current period may be the ideal time for investors to enter the Ukrainian real estate market.

www.bunews.com.ua

Kyiv’s premier international-class venue for corporate, commercial, diplomatic and cultural happenings The Toronto-Kyiv Complex in central Kyiv offers a wide range of hosting options to suit every occasion from brand presentations and corporate hospitality events to art exhibitions, trade fairs, diplomatic receptions and fashion shows. Toronto-Kyiv Complex clients include some of the biggest names in the Ukrainian business world and diplomatic community: - Jaguar Ukraine - Lexus Ukraine - BMW Ukraine and Mini Ukraine - Rolls-Royce Ukraine - L’Oreal Ukraine - Levi’s Ukraine - Henkel Ukraine (Schwarzkopf Ukraine) - Marie Claire Ukraine - Elle Ukraine - WNISEF - International Organization for Migration (UN Migration Agency) - Canadian Embassy in Ukraine - Canada-Ukraine Chamber of Commerce and CUTIS - American Chamber of Commerce in Ukraine - Philip Morris Ukraine (Parliament cigarettes)

Toronto-Kyiv Complex 100 Velyka Vasylkivska Street Kyiv, Ukraine

Tel. +38-044-495-85-33 Fax. +38-044-495-85-15

Official website: torontokyiv.com Official Facebook Page: https://www.facebook.com/torontokyiv/ Official Instagram Account: https://www.instagram.com/torontokyiv/

real estate

Digitization and Dialogue Technical innovations are shaping the construction sector but teamwork remains key to success DELTA Ukraine is a whole service provider operating in the Ukrainian construction industry offering both international best practice and strong local experience. The Austrian-based company has been present in Ukraine for thirteen years. Today, DELTA Ukraine has a staff of 45 working out of offices in both Kyiv and Lviv, with a diverse portfolio of completed projects including the LEONI Ukraine II automotive component plant in western Ukraine along with the Winner Bentley showroom and BMW headquarters in Kyiv. Projects currently underway include the HEAD Ukraine production plant in Vinnytsia, Zeppelin headquarters in Kyiv, and the Alexander Plaza shopping mall in Zaporizhia. Business Ukraine magazine spoke to DELTA Ukraine CEO Wolfgang Gomernik about his experience of the Ukrainian construction sector and asked him how technical innovation was shaping the future of the industry in Ukraine.

What would you identify as the key trends in the Ukrainian real estate and construction industries since you entered the market?

Digitalization has progressed rapidly from the time when we first arrived in Ukraine. BIM (building information modeling) is becoming standard.

We began implementing BIM as well as our “datenpool” documentation and communication platform for Ukrainian projects some years ago. DELTA Ukraine is a pioneer in digitalization and already uses BIM 5D as well as drones in construction. We employ Augmented Reality technologies a lot in order to give customers the opportunity to walk through a building and literally feel it before construction has even begun.

In recent years, we have implemented projects like the LEONI production plant and the KWS processing plant as industrial buildings have come to play an increasingly important part in our business. There is also growing demand for healthcare facilities and housing projects. As the country continues to emerge from the crisis conditions of recent years, people are once again showing an interest in Ukrainian projects because they can see the good performance and strong competences of the country. For example, we have found that our employees in Austria can learn about the latest technologies from their colleagues in Ukraine as well as vice versa.

How will digitization shape the further of the Ukrainian real estate and construction industries?

Digitization serves on the one hand to improve existing processes and on the other hand to open up new business models. If digitization creates added value for the customer or increases the efficiency of our work, it is a success. There are important aspects of digitalization in the construction industry that will provide many advantages in the future.

Working with BIM and seeking digital ways of communicating is now unavoidable. Building with the help of 3, 4 or 5D planning and the use of drones on construction sites are the future. Blockchain technologies will also change

processes and workflows with smart contracts and supply chains. It will become possible to connect blockchain with BIM, allowing construction sites to order their own curtain walls, deliver them, and bill them precisely. With our in-house datenpool platform, project members can communicate and work together everywhere and at any time, facilitating efficient communication and reliable document distribution. Developed by DELTA construction and IT experts, this tool offers comprehensive search functions, structured storage and configurable workflows. It provides everything necessary for the management of a project with multiple participants.

Based on your experience in Ukraine, what are the key ingredients for successful project development?

Besides all the technical tools and digitalization issues, teamwork remains the most important element for any successful project. Our projects rely on a culture of mutual respect and partnership. This partnership-based project culture has a direct and measurable impact on future success. By adhering to costs, deadlines and quality, this culture ultimately leads to economic benefits. A partnership-based project culture is only possible if everyone involved is 100% behind it from the outset, and if they are given the opportunity to contribute.

In particular, the client has a decisive, trend-setting role in this process. The first step is to get to know each other and develop a common vision for the project. For this purpose, all parties must have a clear understanding of the client’s goals. It is vital to communicate the expectations of project team members, together with possible challenges and solutions, at an early stage. This establishes common rules of the game, with compliance becoming the shared responsibility of the entire project team. Constant dialogue is just as important to maintain a positive culture and to keep an eye on the end goal. DELTA has been working for many years with these approaches to partnership project culture and has successfully completed many construction projects featuring regular workshops, team-building and open communication. Additionally, our employees are very motivated and are willing to go to great lengths to finish a project successfully (in 2017 and 2018 this included around 30 projects with a total area of over 300,000 square meters). We even opened a new office in Lviv last year in order to be closer to our clients in western Ukraine.

What steps would you advise to anyone looking to shape a winning project culture in today’s Ukraine?

Create transparency, trust, and commitment in every project. Manage projects directly and maintain a respectful interaction between the project participants while also fostering a culture of mutual support. Encourage feedback and make your strengths visible. Create positive reference points through mutual success, honest communication, and solutionoriented conflict culture. Be open to new ways of thinking and working.

Above all, the most important thing is to rely on your employees. Encourage them to learn new things and to rise above themselves.

About the interviewee: Wolfgang Gomernik is CEO of DELTA Holding, CEO and Partner of DELTA Ukraine

22

www.bunews.com.ua

One Team, No Borders Core services in real estate • Full legal support in real estate and land transactions

Real estate practice and personally Natalia Kochergina ranked in #1 for Real Estate and Construction Services in Ukraine (2013-2018)

• Lease and property management • Retail • Real estate and pre-investment due diligence • Public sector projects • Construction and engineering • Sea ports and infrastructure • Agribusiness • Industrial assets and manufacturing sector

Key clients include: Billa, Bomond Group, DCH, EBRD, Dredging International, Hutchison Westports, Inditex (TM Zara, Massimo Dutti etc.), InterContinental Hotels Group, Leroy Merlin, McDonald’s, Royal Norwegian Embassy, Statsbygg, Starwood, Syngenta.

Natalia Kochergina Partner and Head of Real Estate in Ukraine T +380 44 490 9563 natalia.kochergina@dlapiper.com

real estate 24

Ukrainian real estate: competing for foreign investors is vital Ukrainians have no trouble developing reasonable and efficient business plans. We are familiar with the latest design and management principles. Unfortunately, these factors alone are not enough to attract international investment. In order for foreign capital to come to Ukraine, investors must give credence to the country and its economic abilities. However, these abilities still are often unpredictable. They can be hard to anticipate, assess or digitize.

The current Ukrainian investment climate is comparable to real estate. From the outside, we see a nice facade, so we think we are looking at an attractive building. However, there may be an outdated elevator inside. The staircase may be cluttered and the plumbing in need of replacement. In such uncertain cases, investor interest is understandably low. Today’s Ukraine finds itself in a similar situation. We live in a rich country that ought to be attractive to foreign investors, where business development and construction should be highly profitable activities. In practice, declarative changes often fail to produce global improvements. The country has attracted significantly less foreign investment than neighboring countries like Poland that began the post-Soviet period from a similar position. Poland’s comparative success is not the result of greater resources but of correct management.

The entire world competes for foreign direct investments (FDI), which serve as an important driver of economic growth and a key macroeconomic indicator. In principle, Ukraine is an attractive proposition for investors, including in the country’s real estate sector. However, Ukraine’s investment climate continues to suffer from negative assessments due to the perceived risks posed by factors such as so-called raider attacks. Sometimes these risk factors are associated with the country’s authorities.

Any successful real estate investment case in Ukraine is a victory. Likewise, any loss due to raider attacks is a failure. This applies to the entire real estate sector rather than to any individual company. It is not a secret that bad news has a long shelf life. This creates an unfavorable image of a toxic investment climate at a time when investment companies, business ombudsmen, industry associations and government institutions are working to enhance the country’s investment appeal.

About the author: Alexei Chernyshov Ukrainian businessman, investor, developer. Founder of VI2 Partners investment company, co-owner of AVEC group, Head of the Ukrainian Real Estate Club supervisory board Real estate occupies a conservative sector of any economy, typically featuring companies with multiyear histories. The health of this sector serves as an indicator of broader economic stability. If a real estate investor enters a developed economy, the market accepts them as a new entrant, not due to some specific agreements but according to the established market rules. I remain convinced that this will also be the case in Ukraine because the country has all the prerequisites in place for this. The Ukrainian real estate market has grown qualitatively in recent years. Now is the time for qualitative investment development.

This development will benefit from solid foundations. Throughout the evolution of the Ukrainian real estate market, any more or less correctly planned facility built at a suitable location has been able to generate a stable income. At present, the kinds of facilities generating the most interest are infrastructure and cluster-type properties following the latest global trends and meeting the expectations of both domestic and international investors.

Location, concept, competition environment, innovation and punctuality are all important factors underpinning successful projects, especially given the current intensity of market development and the broader transformation of the commercial real estate concept.

Investors entering the Ukrainian market necessarily take into account a multitude of

risk minimization indications and related criteria. It is entirely possible to manage investment risks and even to minimize them.

Professional business associations have a crucial role to play here and can help to attract foreign investment by providing such insights through sharing their experience and cooperating with both local and international experts. For example, in addition to enhancing awareness of Ukraine’s investment attractiveness among the international business community, the Ukrainian Real Estate Club (URE Club) business association also facilitates communication among real estate professionals at both the national and international levels, thus creating expanding opportunities for all market players. Can the government also participate in these activities? Absolutely. Nevertheless, the business community can perform an important function if it is able to consolidate efforts and effectively lobby for new opportunities and a better business climate.

The establishment of industry-specific business communities is a long-term practice that has proven efficient in Ukraine. Any individual company can exert itself to improve its prospects, but it is unlikely to be successful in independent attempts to modify legislation in the direction that the industry as a whole requires. However, in cooperation with professional peers, such objectives become realistic. Business associations make it possible for community participants to influence the development of their business environment from the inside rather than the outside.

All innovations are useful for the Ukrainian real estate market. This is equally true whether we are talking about internal measures to enhance competition and create a level playing field, or external input to facilitate a more transparent and attractive investment environment. Those of us engaged in real estate-related professional bodies must now focus on maintaining our own high standards, sharing reliable and credible information with global audiences, and building partnerships. There are arguably more direct ways of attracting foreign partners, but fostering a greater collective role for real estate industry professionals is one of the most honest and efficient approaches to enhancing the investment climate while also raising confidence in Ukraine.

www.bunews.com.ua

1,8 mln. m2 in use 3,5 mln. m2 in construction 250 professionals team 14 years of practice 42 awards Bringing returns on your investment with architecture.

Team of architects, engineers, practitioners and innovators archimatika specializes in the elaboration of residential and multifunctional complexes, as well as entire neighborhoods and areas of urban development. archimatika easily creates and develops large complex projects of any complexity at all stages - from concept to putting into operation.

The company deals only with ambitious and responsible developers who create significant objects and care about their reputation, the appearance of the city, and quality of life of citizens. archimatika is a renowned leader in applying BIM technologies.

Complex 3D modelling of the whole building allows for efficient cooperation between different professionals, increases speed of design and reduces the potential for mistakes. BIM They trusted us: makes it possible to predict use • KAN Development of materials during the early • bUd Development stages of the project and makes • UDP coordination with clients and • Stolitsa Group contractors easier.

• A Development • Intergal Bud In 2019, the company has three • BG Fundament offices: in New York, Moscow and • Eurobud headquarters in Kyiv.

• Wash Dim

archimatika 01054 Kyiv, Ukraine 38 Turhenievska St. p.: +380 44 228 77 28 info@archimatika.com archimatika.com/en

real estate

Navigating the Kyiv property market The Ukrainian capital city offers a expanding range of exciting real estate investment opportunities

Ukrainian market must seek to avoid?

Excessive prices for services are common in any business environment and this is equally true of the Ukrainian property market. Our company’s core principle is transparent management. This means public tenders for contractors and services. To give a specific example, during a recent facility management tender for a Kyiv business center, we received offers that varied from USD 55,000 per year to USD 250,000, with little discernable difference in the quality of the services on offer. This illustrates the dangers facing anyone looking to get a fair price without the requisite experience to navigate the market.

About the interviewee: Iryna Skorokhodova is the founder and CEO of STRIX Property Investment Boutique Iryna Skorokhodova brings eighteen years of professional experience to her role as founder and CEO of STRIX Property Investment Boutique. As Vice President of Alfa Bank Ukraine, she has been responsible since 2012 for the sale and management of a broad commercial property portfolio. Over the past year alone, Skorokhodova has been instrumental in some of the biggest transactions to take place on the Ukrainian property market worth a total of USD 240 million, including a key role in the sale of Kyiv’s 69,000 square meter Horizon Park Business Center, which was widely hailed as the Ukrainian office real estate deal of the decade. She is now leveraging this experience at the head of a company that aims to act as a one-stop-shop bringing together international real estate investors and Ukrainian property owners.

Skorokhodova shared her recipe for Kyiv property investment success with Business Ukraine magazine and explained why she believes many international investors have yet to appreciate the full potential of the Ukrainian real estate market.

What do you regard as the most exciting investment opportunities in today’s Kyiv real estate market?

The Kyiv market is currently enjoying a prolonged period of expansion and this is creating opportunities in a range of different property sectors. For example, rents for many Class B business centers have risen by 40-45% over the past two years, while vacancy rates have dropped to around 2% to 3%. In the Class A segment, rents are up 20-25% and occupancy is 92% or higher.

Meanwhile, existing contracts signed before the current upward trend began now face renewal under current market conditions, which should ensure further growth in yields.

What are the most common traps any property investor entering the 26

How do you envisage your role as a partner for international real estate investors in Ukraine?

It is a fact that international investors can make attractive profits on the Ukrainian real estate market. However, it is also a fact that many are not yet aware of all the specifics of the local market. Some international investors have had negative prior experiences that have created the wrong impression about today’s Ukrainian market. This has often been due to a lack of credible partners ready to act in the interests of the investor. Our team can provide a complete range of services for international property investors to help them identify the right real estate, carry out all necessary background checks, and negotiate the most advantageous purchase terms. Following acquisition, we offer property management services to ensure ongoing profitability for the new owner. Thanks to my eighteen years of experience on the real estate market and trust-based relationships with many of the country’s leading property owners, we can also offer potential clients projects that are not available on the open market. Many Ukrainian property owners prefer to avoid public listings, so the best opportunities might not necessarily be easy to find.

What is your strategy for identifying the most attractive opportunities in a sector where information is not always openly available?

Our key asset is our reputation and we intend to guard this by offering maximum transparency to our clients. Prior to any acquisition, we hold a detailed property audit and search for hidden pitfalls while double-checking to avoid any possible frauds. It is entirely realistic to run a fair and compliant business in Ukraine if you adopt the right approach.

Your new property investment boutique seeks to play an intermediary role between international investors and Ukrainian real estate owners.

What kind of additional value can you offer to property owners?

We provide full sales support for commercial property owners. Any sale begins with the right preparation. It is crucial to gauge the maximum potential of the property, including everything from the profit margins it could bring for new owners, to the potential for further development or redevelopment.

Our task is to analyze the asset independently in order to identify hidden potential and eliminate inefficiencies. Sometimes it might make sense to take on the management of a property in order to improve its operational profitability prior to a future sale. The next stage is the sale process itself. If the owner wants to pursue a public sales strategy, this means international promotion through global platforms and major industry events such as MIPIM in Cannes. In cases where the owner prefers to maintain confidentiality, our approach is to organize private presentations. www.bunews.com.ua

Historic Kyiv is ready for gentrification

The ancient Ukrainian capital could benefit from policies of downtown urban renewal As a rule, Kyiv’s expats overwhelming choose to live in the city center and usually in older historical buildings. When discussing this topic with Ukrainian friends, it is not uncommon to hear criticisms of this choice along the lines of: ”It’s noisy there, the air is bad, there’s no parking, the entrance areas are terrible, those buildings have bad infrastructure,” and so forth. This sense of stigma attached to living in Kyiv’s historic downtown area is so commonplace that it has become conventional wisdom among large parts of the local population. Such thinking is one of a number of factors contributing to the underdevelopment of Kyiv’s center. While downtown Kyiv is regarded as a place for expats, tourists, restaurants and cafes, the city center can often appear quite shabby when compared to the historical downtowns of other European capitals, with many buildings and apartments in desperate need of renovation. By incentivizing investment in these historic districts and encouraging gentrification, the Kyiv authorities could significantly improve the overall quality of life in the Ukrainian capital while also providing a sustained boost to the local economy.

Kyiv’s Unrenovated Housing Stock

There are two basic types of older buildings in central Kyiv, Tsarist and Stalinist. Tsarist (or prerevolutionary) buildings date from the late 19th to early 20th centuries. They incorporate many styles (most notably Art Nouveau), and feature numerous ornate architectural flourishes. Most Tsarist buildings are protected architectural monuments. However, it should be noted that unlike in many other countries, there are no strict protections that require owners of apartments in these buildings to preserve the ornate interiors and features of their apartments. In fact, most protections are limited to a building’s street-facing exterior and common areas. Tsarist buildings are typically low-rise with three to five floors, with some featuring an additional floor or two added to the top of the buildings. Apartments generally feature high ceilings, large windows, thick walls and spacious living areas. Stalinist buildings (or “Stalinkas”) were built in the 1920s to the 1950s. Stalinkas can be taller than Tsarist buildings and apartments tend to be slightly smaller, while ceilings can be almost as high. While these buildings lack the ornate architectural features of Tsarist buildings, they are solidly built with spacious common areas and apartments.

Tsarist buildings are almost exclusively located in Kyiv’s center and the riverside Podil district. There are approximately 1,500 of these buildings in Kyiv. Assuming a conservative estimate of five apartments per building, this produces a total of about 8,000 Tsarist building apartments in Kyiv, including dozens of derelict buildings in prime locations. Stalinist buildings can be found in Kyiv’s center and in districts near to the center. There are about 1,800 Stalinkas in Kyiv. Assuming 6 floors and 3.25 apartments per floor, there are about 40,000 Stalinka apartments

in the city. We can therefore talk about a housing stock of approximately 50,000 Kyiv apartments in historical buildings.

What is the current condition of these buildings? After WWII, some Tsarist buildings were partially reconstructed and now feature concrete floors along with partially updated heating, water and sewage systems.

However, many Tsarist buildings were not reconstructed and apartments still have old water systems, sewage lines, heating systems, no ventilation and floors with the original wooden floor beams. Other old Kyiv buildings have fallen into disrepair or stand derelict, often due to legal issues and protracted ownership disputes.

Insolvent and Unmotivated Owners

Many apartments in Kyiv’s historical buildings were received through post-Soviet privatization or otherwise acquired during the early years of Ukraine’s independence. Typically these apartments have two types of owners: elderly pensioners who lack the financial means to renovate their apartments, or long-time owners who renovated their properties more than a decade ago and are now unwilling or unable to refurbish them to make them suitable for modern living.

Another factor contributing to underinvestment in Kyiv’s historical buildings is the strong preference among Ukrainians to buy apartments in new buildings or even to move outside Kyiv to the suburbs. Many local homebuyers are also discouraged by the real and perceived challenges of renovating apartments in older buildings. Such projects often require technical skills and planning beyond the experience of many contractors, who would much prefer to renovate an apartment in a new building. Moreover, without proper planning before renovating an apartment in an historical building, such projects have a tendency to go over budget and off schedule.

Disincentives for Investment

Ukraine’s real estate laws and regulations create disincentives to investing in Kyiv’s historical apartment buildings. Unlike in many other markets, carrying costs for Ukrainian property owners are small to nonexistent, making it easy to hang on to properties for extended periods.

Property taxes are currently insignificant, communal charges remain quite low (although are now rising with increasing energy tariffs), and owners typically don’t pay mortgages since they received their property during privatization or purchased long ago. As a result, current owners have relatively little incentive to invest in or sell their properties. Meanwhile, the Kyiv authorities lack the legal tools necessary to force the sale of derelict buildings that are currently subject to disputes among multiple owners, leaving these buildings undeveloped.

Ukrainian legislation has established punitive “anti-speculation” taxes for owners who sell their properties after holding them for less than three years, or those who sell more than one property in a calendar year.

For example, the income tax on real estate sales for foreign non-residents is 18% if the real estate is sold within one year of purchase, and

About the author: Tim Louzonis (tim@aimrealtykiev.com) is a co-founder of AIM Realty Kiev and AIM Realty Lviv, real estate agencies that specialize in real estate for foreign investors and expats. Tim is a long-time expat with Ukrainian roots; he first came to Ukraine as an exchange student in 1993 and returned in 2008.

28

real estate

5% if sold one to three years after purchase. For Ukrainian residents, the tax is 5% if a property is sold within three years of purchase. Such taxes put the brakes on investment in a very real sense. Not all property investors wish to be long-term landlords or run AirBnB properties for several years. Instead, many investors wish to get in, exit quickly, and move on to their next investment. In the US, some call this strategy BRRRR investment which stands for “buy, rehab, rent, refinance, and repeat”. There are legal strategies to mitigate the impact of Ukraine’s anti-speculation taxes on real estate investment, but these strategies entail higher overhead costs for investors, making them potentially unattractive for some smaller investors.

How to Encourage Investment

Many other countries offer interesting incentives to stimulate real estate investment and encourage renovation of historical downtown locations. For example, real estate investors in the United States can take advantage of something called a 1031 exchange. The most popular form of a 1031 exchange is called a delayed like-kind exchange where the exchanger relinquishes the original property before he acquires a replacement property. The property the exchanger owns is transferred before the target property is acquired. The exchanger has to market his property, find a buyer, and execute a sale. Then the proceeds are held in trust by a third party intermediary and the exchanger has up to 180 days to acquire a replacement property. In this way, an investor is able to reinvest their capital gains and defer taxes to the future. In addition to the benefits of tax deferment, a 1031 can also allow a property investor to shift the focus of their investments. For example, from a highmaintenance to a low-maintenance property, or from one location to another location.

In Ukraine, a structure similar to a 1031 exchange would allow investors to harvest capital gains from properties that they have redeveloped, then reinvest these gains in new investments while deferring taxes on their gains. For example, as prices rise in downtown Kyiv, an investor could redeploy capital opportunistically to areas near the center as www.bunews.com.ua

prosperity spreads outward. Creating incentives that would allow such investors to pay the lower 1% income tax on total sale proceeds if they were to hold their properties for a required amount of time would keep this investment capital within Ukraine and help rebuild Kyiv’s housing stock. Introducing such progressive legislation in Ukraine would also attract restless BRRRR-type investors who wish to invest, rehabilitate their properties, and quickly move on to their next investment, thus unlocking investment capital from all over the world.

Once Kyiv succeeds in breaking the legal deadlock surrounding many derelict historical buildings, it would be helpful to create specific programs that target investment in historical buildings to accelerate their redevelopment. One such example is the Federal Historic Preservation Tax Incentives Program in the US, which provides a 10% tax credit for the rehabilitation of old non-historical buildings and a 20% tax credit for rehabilitation of certified historical buildings. Kyiv could greatly benefit from adopting a similar program.

Benefits of Gentrification

Ukraine’s current property laws and regulations have contributed to the chronic neglect of apartments in Kyiv’s historical buildings, leading to an underdeveloped downtown area that is far from realizing its potential. While it may have become a dirty word in other countries, Kyiv could do with a little gentrification to tidy up its historical center and modernize this housing stock. A fully renovated downtown area would stimulate the economy and offer residents the benefits of smart urban living, while also preserving the character of Kyiv’s historical architecture. Changing the status quo will require coordinated action and political will. However, we only have to look at what Ukraine’s green tariffs have done to stimulate investment in wind and solar power to see the potential of measures designed to encourage gentrification.

(Please note that this is article not intended to replace qualified legal advice, but instead to introduce readers to common legal issues for foreign real estate investors in Ukraine.)

29

Kyiv Cable Cars: Coming Soon?

30

real estate

The Kyiv city authorities have developed a range of ambitious and imaginative projects to improve the Ukrainian capital’s transport infrastructure and enhance the city’s tourism appeal. The standout concept is probably the initiative to create a network of cableway stations straddling the Dnipro River and connecting the ancient heart of Right Bank Kyiv with the residential district of Rusanivka on the Left Bank. The first stage of this project envisages the construction of three cableway stations connecting the Druzhby Narodiv www.bunews.com.ua

Arch platform with Poshtova Square in the riverside Podil district and Truhaniv Island in the center of the Dnipro River. This phase of the project comes with a price tag of EUR 16.65 million and an estimated payback period of five-and-a-half years. If completed, the cableway service would certainly provide spectacular views of the Kyiv panorama and would complement the pedestrian bridge walkway currently under construction that will link the Druzhby Narodiv Arch platform with the nearby St. Volodymyr’s Hill from spring 2019.

31

legal

Legal Sector Focus Ukraine’s legal services sector experienced a year of major mergers in 2018 and looks set for further shifts in the coming months as the country’s leading law firms seek to adapt to the changing priorities of the Ukrainian economy

About the author: Oleksiy Nasasdyuk is head of the Top 50 Leading Law Firms in Ukraine annual research program 2018 will be remembered by many in the Ukrainian legal services industry as a year of landmark mergers. While a number of prominent law firms joined forces in 2018, the headline development was undoubtedly the merger of legal industry heavyweights Asters and EPAP Ukraine. Many observers and industry insiders see this merger trend as a long-term factor in the Ukrainian legal services sector that will lead to further such moves in 2019 and beyond.

Denys Bugay, a partner of VB PARTNERS, says the choice facing Ukrainian law firms will become increasing stark. “I think the biggest companies on the market will become even bigger while 32

many medium-sized companies will be forced to drop out of the race.

For these middle-sized law firms, the choice will be simple: either join their larger competitors or become highly efficient boutiques with relatively narrow legal specializations. The boutique strategy offers significant savings in terms of resources, time, marketing, PR and office space. However, you need to pay salaries that are above the going market rate because such specialized legal work places high demands on lawyers,” Bugay comments.

The merger mania on the legal market over the past year has also led to significant personnel changes throughout the industry. : www.bunews.com.ua

legal 34

: For the first time, Ukraine now has a law firm with over 25

partners. Promotions also reached unprecedented levels, despite the steadily rising list of professional qualifications required of Ukrainian legal professionals. One of the biggest changes during the previous year was the implementation of new regulations restricting court representation of clients. This innovation in particular has encouraged legal services professionals to upgrade their qualifications and acquire the requisite courtroom status.

Meanwhile, the line between traditional legal segments and more specific business practices continued to blur as demand for criminal law services maintained its growth trajectory. Nevertheless, the three traditional core practices of judicial, corporate and tax law occupied the leading positions on the Ukrainian legal services market in 2018 and remained the most profitable segments.

Ukraine’s legal services industry enjoyed a profitable year, with total income among the country’s 50 leading law firms reaching UAH 6.5 billion in the twelve-month period from Q4 2017 to Q3 2018, representing a year-on-year increase of 20%. This rise was not due to any dramatic shifts in the key focuses of the industry. Dispute resolution remained dominant, with corporate law and M&A practices occupying second place. In an encouraging indication for the wider economy, there was markedly less focus on distressed assets than in previous years. Meanwhile, banks continued to serve as key clients for the country’s legal services industry, accounting for 15% of all revenues.

Sector specialization gained further momentum throughout the legal industry in 2018 as law firms adapted their services to meet the changing demands of the Ukrainian economy. Popular sectors included energy, pharmaceuticals and agriculture, reflecting the developments taking place in the country as a whole. This boutique approach was often combined with more traditional legal services and is not yet a standalone feature of the market as a whole, but the profitability of some specific spheres such as agriculture will inevitably encourage law firms to explore this direction further.

“The legal services market is still highly dependent on the overall state of the Ukrainian economy,” comments Volodymyr Sayenko, a partner at Sayenko Kharenko law firm. “The relative stability of 2018 had a positive effect on the market, leading to growth in demand for legal services in all major sectors of the economy. However, this growth was not uniform. Transactional practices were kept particularly busy due to heightened investor activity in the fields of IT, alternative energy and the agricultural sector. At the same time, the market remains highly competitive and this forces law firms to fight for each individual client.”

ILF law firm managing partner Tatiana Gavrish agrees. “The owners of law firms operating in Ukraine today are acutely aware of growing competition,” she says. “In response to these pressures, they are consolidating and looking to increase their market share, or seeking to stand out by monopolizing niche market segments.”

GOLAW senior partner Serhiy Oberkovich believes Ukrainian law firms face considerable transformational challenges if they are to keep pace with the evolution of the country’s business environment.

“To ensure long-term success in what is a rapidly changing market, the traditional business model favored by law firms needs to be updated and firms must be ready for transformational changes.

Today, law firms face twin challenges from the automation of processes and the evolution of the market where clients demand better service at lower prices. ” Salkom law firm senior partner Yevheniy Kubko expects to see emerging segments of the Ukrainian economy play an increasingly prominent role in the future direction of the legal services sector.

While the traditionally dominant segments of legal practice still currently occupy the leading positions within the industry in terms of revenues and workload, he notes the rapid emergence of new sectors that will set the pace in the years ahead. “In the coming period, practices related to expanding areas of the economy will develop at a faster rate thanks to trends such as the reorientation of Ukrainian businesses towards European markets and the dramatic :

www.bunews.com.ua

legal

Legal Industry Commentary: Rustam Kolesnik Chief Editor of Yuridicheskaya Practika Publishing Although Ukraine’s reform agenda is not being implemented as quickly or efficiently as many had perhaps hoped or expected, the stable economic situation in the country during 2018 led to increasing activity in the market for legal services, primarily in the transaction segment. Looking ahead, any further delays on key reforms such as the planned creation of an Anti-Corruption Court over the coming months could have a markedly negative impact on the country in terms of Ukraine’s international relationships with both institutional donors and private investors.

The present year is set to be dominated by Ukraine’s forthcoming presidential and parliamentary elections. Due to this electoral focus, external factors look set to determine the configuration of the Ukrainian legal market in the medium term. Lawyers are generally assigned the role of extras during such periods of political drama and have minimal chances to actually influence the course of events. Nevertheless, there may be opportunities to take advantage of the situation as it evolves in the coming months.

: growth of the country’s IT industry,” he offers.

With Ukraine’s long-anticipated judicial reform still widely regarded as an unfinished work in progress, big business still prefers to resolve its disputes in foreign jurisdictions, observes Asters co-managing partner Oleksiy Didkovskiy. He says this tendency is helping to stimulate the development of cross-border dispute resolution practices and international arbitration, while also adding to the popularity of alternative out-of-court settlement options.

In common with many of his peers, Didkovskiy identifies growing demand for niche segment legal services and predicts that lawyers who are ready to focus on these relatively narrow and specialized areas will find their services highly sought after in the months and years to come. “We launched the country’s first integrated Cyber Desk in 2018, bringing together leading cybersecurity specialists with our lawyers,” he notes. “In my opinion, this combination of

36

expert professional competences is the future of legal consulting services in Ukraine.”

This IT focus is a recurring theme in consultations with industry professionals throughout the Ukrainian legal services sector. Antika law firm managing partner Oleksiy Kot speaks for many when he identifies the rise of the tech industry as one of the factors expected to define the expansion of Ukraine’s legal services market into the 2020s. “Once you take into consideration the current levels of digitization throughout the business community and the pace of development, it is clear that IT will remain one of the most promising areas of legal practice in 2019 and for the next few years,” he says. Kot identifies FinTech as a particularly attractive segment of the IT sphere for legal services providers, and also singles out booming sectors of the Ukrainian economy such as agriculture and energy efficiency as good bets for future legal services growth.

www.bunews.com.ua

Top 50 Ukrainian Law Firms

38

LAW FIRM

1

ASTERS

2

SAYENKO KHARENKO

Co-managing partner: Oleksiy Didkovskiy Co-managing partner: Serhii Sviriba Senior partner: Armen Khachaturyan

Partner: Michael Kharenko

3

BAKER MCKENZIE

4

ILYASHEV & PARTNERS

5

ARZINGER

6

AEQUO

7

GOLAW

8

AVELLUM

9

EQUITY

Managing partner: Serhiy Chorny Managing partner: Serhiy Piontkovsky

Managing Partner: Mikhail Ilyashev

Managing Partner: Timur Bondaryev

Managing Partner: Denis Lysenko

NUMBER OF LAWYERS

RANKING

English-language version of annual rating covering 2018 produced by Business Ukraine magazine in partnership with Yuridicheskaya Praktika

ND

Litigation, Corporate, M&A, Antitrust And Competition, Banking & Finance, International Arbitration, Criminal Law, Energy, Intellectual Property, Labor & Employment, Capital Markets, Tax, Land & Real Estate, Debt Restructuring, Transport, International Trade, Business Protection

19-21 Bohdana Khmelnytskoho Street, Kyiv, 01030 Tel.:(044) 230-60-00 www.asterslaw.com info@asterslaw.com

ND

Banking & Finance, Corporate, M&A, Litigation, International Arbitration, Criminal Law, Intellectual Property, Compliance, Labor & Employment, Energy, Tax, Land & Real Estate, Antitrust And Competition, Bankruptcy, Business Protection, International Trade & WTO Rules, Capital Markets, PPP & GR

10 Muzeyny Provulok, Kyiv, 01001 Tel.:(044) 499-60-00 www.sk.ua info@sk.ua

Litigation, Banking & Finance, Bankruptcy, Corporate, M&A, Criminal Law, Intellectual Property, Compliance, Labor & Employment, Debt Restructuring, International Arbitration, Mediation, Family Law, Private Clients, Tax, Land & Real Estate, Antitrust And Competition, Business Protection, International Trade & WTO Rules, Capital Markets, Aviation, PPP & GR

11 Kudryavska Street, Kyiv, 04053 Tel.:(044) 494-19-19 www.attorneys.ua office@attorneys.ua

54

53

60

ND

Senior partner: Viktor Barsuk

Banking & Finance, Debt Restructuring, Corporate, M&A, Antitrust And Competition, Intellectual Property, Land & Real Estate, Compliance, Labor & Employment, Capital Markets, Tax, Litigation, International Arbitration, Private Clients, International trade & WTO Rules, PPP & GR

Litigation, Business Protection, Antitrust And Competition, Intellectual Property, International Arbitration, Tax, Land & Real Estate, Banking & Finance, Corporate, M&A, Criminal Law, Bankruptcy Litigation, International Arbitration, Intellectual Property, Corporate, M&A, Antitrust And Competition, Banking & Finance, Capital Markets, Tax, Land & Real Estate, Debt Restructuring

Litigation, Banking & Finance, Tax, Criminal Law, Corporate, M&A, Compliance, Labor & Employment, Bankruptcy, Business Protection

Managing Partner: Valentyn Gvozdiy

Co-managing partner: Mykola Stetsenko Co-managing partner: Aminat Suleymanova

CONTACT DETAILS

PRACTICE AREAS

44

ND

Banking & Finance, Corporate, M&A, Litigation, Labor & Employment, Capital Markets, Energy, Tax, Land & Real Estate, International Arbitration, Infrastructure & Logistics, Private Clients, Family Law, Antitrust And Competition, International Trade & WTO Rules Litigation, Criminal Law, Banking & Finance, Tax, Land & Real Estate, Bankruptcy, Business Protection, Enforcement Proceedings, PPP & GR, Corporate

24 Bulvarno-Kudriavska Street, Kyiv, 01601 Tel.:(044) 590-01-01 www.bakermckenzie.com/ukraine, kyiv@bakermckenzie.com

Senator Business Center, 32/2 Moskovska Street, Kyiv, 01010, Ukraine Tel.: (044) 390-55-33 www.arzinger.ua mail@arzinger.ua

52 Bohdana Khmelnytskogo Street, Kyiv, 01030, Ukraine Tel.: (044) 490-91-00 www.aequo.ua office@aequo.ua 19B Instytutska Street, Suite 26,29,30, Kyiv, 01021, Ukraine Tel.: (044) 581-12-20 www.golaw.ua info@golaw.ua

38 Volodymyrska Street, Kyiv, 01033 Tel.:(044) 591-33-55 www.avellum.com info@avellum.com 4 Rylskiy Lane, Kiev, 01001 Tel.:(044) 277-22-22 www.equity.law info@equity.law

www.bunews.com.ua

LCF LEGAL GROUP

11

VASIL KISIL & PARTNERS

12

13

Managing partner: Anna Ogrenchuk Managing partner: Andriy Stelmashchuk

CMS

(CMS CAMERON MCKENNA NABARRO OLSWANG & CMS REICH-ROHRWIG HAINZ) Managing partner: Graham Conlon Managing partner: Johannes Trenkwalder

DENTONS

Managing Partner: Oleg Batyuk

14

DLA PIPER UKRAINE

15

ILF

16

AVER LEX

17

ETERNA LAW

18

GRAMATSKIY & PARTNERS

19

EVRIS

20

ALEKSEEV, BOYARCHUKOV & PARTNERS

21

Managing partner: Margarita Karpenko

Managing Partner: Tetyana Gavrysh

Managing Partner: Olga Prosyanyuk

Council of Partners

President: Ernest Gramatskiy

Managing partner: Ihor Kravtsov

Managing partner: Sergey Boyarchukov

INTEGRITES

Managing partner: Oleksiy Feliv

February 2017

NUMBER OF LAWYERS

RANKING 10

ND

PRACTICE AREAS

CONTACT DETAILS

Litigation, Banking & Finance, Debt Restructuring, Bankruptcy, Corporate, Tax, International Arbitration, PPP & GR

47 Volodymyrska Street, Office 3, Kyiv, 0100 Tel.:(044) 455-88-87 www.lcf.ua, info@lcf.ua

ND

Litigation, Banking & Finance, Corporate, M&A, Antitrust And Competition, Tax, Land & Real Estate, Intellectual Property, Compliance, Labor & Employment, International Arbitration, Bankruptcy

38 Volodymyrska Street, 6 Floor, Kyiv, 01034 Tel.:(044) 391-33-77 www.cms.law kyivoffice@cms-cmno.com

ND

Banking & Finance, Corporate, M&A, Debt Restructuring, Intellectual Property, Land & Real Estate, Litigation, International Arbitration, Labor & Employment, Compliance, Tax, Antitrust And Competition

48

ND

Litigation, Corporate, M&A, Criminal Law, Intellectual Property, Labor & Employment, International Arbitration, Banking & Finance, Tax, Land & Real Estate, Transport, Private Clients, Family Law, Antitrust And Competition

Corporate, M&A, Tax, Intellectual Property, Land & Real Estate, Litigation, Banking & Finance, Criminal Law, Labor & Employment, Debt Restructuring, Antitrust And Competition, Business Protection

ND

Litigation, Corporate, Criminal Law, Labor & Employment, Tax, Land & Real Estate, PPP & GR

29

Criminal law, Business Protection, Litigation

31

International Arbitration, Litigation, Corporate, Intellectual Property, Labor & Employment, Debt Restructuring, Family Law, Land & Real Estate, Infrastructure & Logistics

40

Land & Real Estate, Litigation, Business Protection, Tax, Banking & Finance, Corporate, M&A, Criminal Law, Intellectual Property, Bankruptcy

33

Litigation, Tax, Corporate, M&A, Banking & Finance, Debt Restructuring, Intellectual Property, International Arbitration, Bankruptcy, Business Protection, Enforcement Proceedings

49

ND

Litigation, Bankruptcy, Business Protection, Criminal Law, Corporate, Tax, Private Clients

Litigation, Banking & Finance, International Arbitration, Land & Real Estate, Antitrust And Competition, Corporate, M&A, Criminal Law, Intellectual Property, Bankruptcy

legal industry focus

LAW FIRM

417/52A Bohdana Khmelnytskoho Street, Kyiv, 01030 Tel.:(044) 581-77-77 www.vkp.ua vkp@vkp.ua

49A Volodymyrska Street, Kyiv, 01001 Tel.:(044) 494-47-74 www.dentons.com kyiv@dentons.com

77A Velyka Vasilkivska Street, Kyiv, 03150 Tel.:(044) 490-95-75 www.dlapiper.com ukraine@dlapiper.com

22 Shovkovychna Street, Suite 3, Kyiv, 01024 Tel.:(044) 390-77-77 www.ilf-ua.com office@ilf-ua.com 2 Khrestovyi Alley, Kyiv, 01010; Tel.:(044) 300-11-51 www.averlex.com info@averlex.com

6 Rylskiy Lane, Sophia Business Centre, Kyiv, 01001 Tel.:(044) 490-70-01 eterna.law office.kyiv@eterna.law 16 Mikhaylivska Street, Kyiv, 01001 Tel.:(044) 581-15-51 www.gramatskiy.com office@gramatskiy.com

52 Bohdana Khmelnytskogo Street, Vector Business Center, Kyiv, 01030 Tel.:(044) 364-91-91 www.evris.law office@evris.law 11 Shota Rustaveli Street, Kyiv, 01001 Tel.:(044) 235-88-77 www.abp.kiev.ua office@abp.kiev.ua

1 Dobrovolchykh Batalioniv Street, Kyiv, 01015 Tel.:(044) 391-38-53 www.integrites.com info@integrites.com

: 39

40

LAW FIRM

22

MORIS GROUP

23

SALKOM

24

ADER HABER

25

KPMG LAW UKRAINE

26

REDCLIFFE PARTNERS

27

L.I.GROUP

Managing partner: Andriy Romanchuk

President: Evgen Kubko

Managing partner: Yuriy Petrenko

Partner: Sergey Popov

Managing partner: Olexiy Soshenko

Senior partner: Mykola Kovalchuk Senior partner: Artur Megerya

28

EVERLEGAL

29

JUSCUTUM

30

ANTIKA LAW FIRM

31

EUCON LEGAL GROUP

32

DYNASTY

33

PAKHARENKO & PARTNERS

Managing partner: Yevheniy Deyneko

Managing partner: Artem Afian

Managing Partner: Alexey Kot

Managing partner: Yaroslav Romanchuk

President: Denys Myrgorodsky

Managing partner: Antonina PakharenkoAnderson

NUMBER OF LAWYERS

RANKING

:

CONTACT DETAILS

PRACTICE AREAS

48

Litigation, Banking & Finance, Corporate, M&A, Tax, Land & Real Estate, PPP & GR, Private Clients, Antitrust And Competition, Bankruptcy

30

Litigation, Banking & Finance, Criminal Law, Labor & Employment, Tax, Land & Real Estate, Antitrust And Competition, Contract Law

29

Litigation, Tax, Land & Real Estate, Debt Restructuring, Antitrust And Competition, Bankruptcy, Business Protection, Enforcement Proceedings, Banking & Finance, Corporate, M&A, Criminal Law, Intellectual Property, Compliance, Labor & Employment

7A Klovsky Uzviz, Kyiv, 01021; Tel.:(044) 280-88-87 www.aderhaber.com office@aderhaber.com

Corporate, M&A, Banking & Finance, Litigation, Antitrust And Competition, Intellectual Property, Compliance, Capital Markets, Tax, Land & Real Estate, International Arbitration, Debt Restructuring, Infrastructure & Logistics

75 Zhylyanska Street, Kyiv, 01032 Tel.:(044) 390-58-85 www.redcliffe-partners.com office@redcliffe-partners.com

ND

Litigation, Corporate, M&A, Labor & Employment, International Arbitration, Antitrust And Competition, Banking & Finance, Enforcement Proceedings

ND

Business protection, PPP & GR, Capital Markets, Tax, Litigation, Banking & Finance, Corporate, M&A, Criminal Law, Intellectual Property, Compliance

4 Rylskyi Lane, 6 Floor, Kyiv, 01001 Tel.:(044) 337-00-16 www.everlegal.ua hello@everlegal.ua

13

Litigation, Corporate, M&A, Land & Real Estate, Energy, International Arbitration, Antitrust And Competition

ND

Tax, Corporate, M&A, Litigation, Criminal Law, Intellectual Property, Compliance, Labor & Employment, Transport, Infrastructure & Logistics, Business Protection

ND

Litigation, Banking & Finance, Corporate, Criminal Law, Tax, Land & Real Estate, Business Protection

ND

Intellectual property, Litigation, Corporate, Antitrust And Competition, Private Clients, Business Protection

ND

36

ND

Tax, Corporate, M&A, Litigation, Banking & Finance, Compliance

Litigation, Bankruptcy, Banking & Finance, Corporate, Criminal Law, Intellectual Property, International Arbitration, Family Law

8b Moskovska Street, Kyiv, 01010 Tel.:(044) 359-03-05 www.moris.com.ua info@moris.com.ua

12 Khreschatyk Street, Kyiv, 01001 Tel.:(044) 501-31-00/01 www.salkom.ua salkom@salkom.kiev.ua

Senator Business Center, 32/2 Moskovska Street, Kyiv, 01010 Tel.:(044) 490-55-07 www.kpmg.ua info@kpmg.ua

36d Eugena Konovaltsya Street, Office 4, Kyiv, 01133 Tel.:(044) 227-05-14 www.ligroup.com.ua lawyer@ligroup.com.ua

35 Olesya Honchara Street.

Kyiv, 01034 Tel.:(044) 359-08-96 www.juscutum.com office@juscutum.com

12 Khreschatyk Street, Kyiv, 01001 Tel.:(044) 390-09-20 www.antikalaw.com.ua office@antikalaw.com.ua

33 T. Shevchenka Blvd., Office 12, Kyiv, 01032 Tel.:(044) 238-09-44 www.euconlaw.com info@euconlaw.com

2 Glinky Street, MOST-City Center, Dnipro, 49000 Tel.:(056) 371-30-30 www.dynasty.legal office@dynasty.legal

72 Velyka Vasilkivska Street, Kyiv, 03150 Tel.:(044) 593-96-93 www.pakharenko.ua pakharenko@pakharenko.com.ua

www.bunews.com.ua

EY

35

KM PARTNERS

36

LAVRYNOVYCH & PARTNERS

37

DOUBINSKY & OSHAROVA

38

SOKOLOVSKYI & PARTNERS

39

KONNOV & SOZANOVSKY

40

KINSTELLAR

41

ANK

42

SHKREBETS & PARTNERS

43

VB PARTNERS

Partner: Vladimir Kotenko Partner: Albert Sych

Senior partner: Alexander Minin

Managing partner: Maksym Lavrynovych

Managing partner: Michael Doubinsky

Managing partner: Vladyslav Sokolovskyi

Managing partner: Alexey Ivanov

Managing partner: Kostiantyn Likarchuk

Managing partner: Alexander Kifak

Managing partner: Eugene Shkrebets

Managing partner: Volodymyr

NUMBER OF LAWYERS

RANKING 34

PAVLENKO LEGAL GROUP Managing partner: Oleksandra Sasina (Pavlenko)

February 2017

CONTACT DETAILS

60

Tax, Corporate, M&A, PPP & GR, Litigation

ND

Tax, Litigation, Corporate, M&A, Criminal Law, Intellectual Property, Compliance, Labor & Employment, Land & Real Estate

35

Litigation, Banking & Finance, Corporate, M&A, Land & Real Estate, Intellectual Property, Compliance, Tax, Antitrust And Competition, Bankruptcy, Business Protection

ND

Intellectual Property

20

Litigation, Criminal Law, Tax, Debt Restructuring, Bankruptcy, Corporate, M&A, Labor & Employment, Intellectual Property, Compliance

ND

Corporate, Intellectual Property, Litigation, Land & Real Estate, Banking & Finance, M&A, Compliance, Labor & Employment, Tax, Debt Restructuring, Business Protection

23 Shota Rustaveli Street, Suite 3, Kyiv, 01033 Tel.:(044) 490-54-00 www.konnov.ua info@konnov.com

16

Litigation, International Arbitration, Banking & Finance, Corporate, M&A, Criminal Law, Land & Real Estate, Antitrust And Competition, Business Protection, Ppp & Gr, Compliance

ND

Litigation, Shipping & Maritime, Land & Real Estate, Tax, Corporate, M&A, Criminal Law, Infrastructure & Logistics, Private Clients, Business Protection

1-Đ? Sportyvna Sq., 16th Floor, Gulliver Business Center, Kyiv, 01601 Tel.:(044) 394-90-40 www.kinstellar.com kyiv.reception@kinstellar.com

ND

Litigation, Energy, Criminal Law, Labor & Employment, Corporate, Tax, Land & Real Estate, Private Clients, Bankruptcy

11

Litigation, Criminal Law, Business Protection, Compliance, Tax, International Arbitration

ND

Litigation, PPP & GR, Corporate, M&A, Banking & Finance, Criminal Law, Tax, Business Protection

Vashchenko 44

PRACTICE AREAS

legal industry focus

LAW FIRM

19A Khreschatyk Street, Kyiv, 01001 Tel.:(044) 490-30-00 www.ey.com/ukraine kyiv@ua.ey.com 5 Pankivska Street, Kyiv, 01033 Tel.:(044) 490-71-97 www.kmp.ua admin@kmp.ua

41 Saksaganskogo Street, Kyiv, 01033 Tel.:(044) 494-27-27 www.lp.ua office@lp.ua

110 Zhylyanska Street, 9 Floor, Kyiv, 01032 Tel.:(044) 490-54-54 www.iplaw.com.ua info@iplaw.com.ua

19, Pirogovskogo Street, Build 4, Kyiv, 03110 Tel.:(044) 495-19-29 splf.ua pravo@splf.ua

9 Lanzheronivska Street, Suite 17, Odesa, 65026 Tel.:(048) 234-87-16 www.ank.odessa.ua office@ank.odessa.ua 14 Kaplunivski Lane, Kharkiv, 61002 Tel.:(057) 720-90-01 www.shkrebets.com office@shkrebets.com 22 Rybalska Street, Kyiv, 01011; Tel.:(044) 581-16-33 www.vbpartners.ua office@vbpartners.ua

23A Zlatoustivska Street, Kyiv, 01135 Tel.:(044) 281-06-00 www.plglaw.ua office@plglaw.ua

: 41

LAW FIRM

45

LEXWELL & PARTNERS

46

INTERLEGAL

47

GRYPHON LEGAL

48

BARRISTERS

49

Managing partner: Andrey Kolupaev

Partner: Arthur Nitsevych Partner: Nikolay Melnykov

Managing partner: Olena Lynnik Managing partner: Igor Lynnik

Partner: Denys Ponomarenko Partner: Oleksii Shevchuk

JURLINE

NUMBER OF LAWYERS

RANKING

:

13

International Arbitration, Litigation, Corporate, M&A, Tax, Labor & Employment

26

Shipping & Maritime, International Trade & WTO Rules, Litigation, Tax, International Arbitration, Infrastructure & Logistics, PPP & GR

ND

Corporate, Banking & Finance, Compliance, Capital Markets, Tax, Debt Restructuring, Forensics, Litigation

ND

Litigation, Criminal Law, Private Clients, Business Protection, Enforcement Proceedings

ND

Litigation, Corporate, M&A, Criminal Law, Labor & Employment, Tax, Land & Real Estate, International Arbitration, Transport, Infrastructure & Logistics, Private Clients, Family Law, Antitrust And Competition, International Trade, Banking & Finance, Business Protection

Managing partner: Volodymyr Zubar 50

ALEXANDROV & PARTNERS Managing counsel: Oleg Shevtsov

CONTACT DETAILS

PRACTICE AREAS

ND

Land & Real Estate, Litigation, Corporate, Criminal Law, Private Clients, Bankruptcy, Business Protection

6 Rylskiy Lane, 5 Floor, Kyiv, 01001 Tel.:(044) 228-60-80 www.lexwell.com.ua lexwell@lexwell.com.ua 24B Genuezska Street, Odesa, 65009 Tel.:(048) 233-75-28 www.interlegal.com.ua office@interlegal.com.ua

36D Evgena Konovaltsya Street, Office 1, Kyiv, 01133 Tel.:(044) 227-92-12 www.gryphongroup.com.ua office@gryphoninvest.com.ua 9 Frantsuzkyi Boulevard, Office 10, Odesa, 65012 Tel.:(048) 737-71-51 www.barristers.org.ua info@barristers.org.ua 66/1 Frantsuzkyi Boulevard, Odesa, 65009 Tel.:(048) 738-08-93 www.jurline.ua office@jurline.ua 58 Poliova Street, Sofiivska Borshchahivka, Kyiv Region, 08131 Tel.:(067) 524-93-14 www.lawyers.com.ua office@lawyers.com.ua

50 Leading Law Firms of Ukraine

Methodology of the Annual Ranking The annual “50 Leading Law Firms of Ukraine� ranking is widely recognized as the long-running and most authoritative survey of the Ukrainian legal sector. Launched in 1997, the ranking is produced using research conducted by leading Ukrainian legal industry publishing house Yuridicheskaya Praktika and aims to provide a comprehensive picture of the development of the Ukrainian legal services market. Business Ukraine magazine is the official English-language partner of the ranking.

Over course of the past two decades, the methodology underpinning the ranking has been adapted and finetuned to reflect changes in the Ukrainian legal industry.

The ranking includes a number of established criteria: the number of lawyers, profitability, complexity of transactions 42

and lawsuits handled, and financial efficiency. The professional reputation of each individual law firm is an important additional factor.

The analytical team that produces the annual ranking is receptive to the strict requirements of confidentiality regarding information provided by law firms for the purposes of the ranking. The research period for the current ranking covers the fourth quarter of 2017 and the first to third quarters of 2018. Once all data is calculated and the preliminary ranking is calculated, a panel of legal industry experts assess the ranking and provide their own input.

Participating legal experts provide their feedback in isolation, and are not aware of other expert recommendations until following the final publication of the ranking. www.bunews.com.ua

Your Urgent Care Clinic: When You Need Us    

+38 (044) 490 76 00

24/7 Primary & Inpatient Care Online Chat or Video consultations Annual Memberships Convenient Direct Insurance Billing

Kyiv Odesa Lviv Tbilisi Batumi Almaty Astana

www.amcenters.com

Ukraine’s New Bankruptcy Code Olena Volyanska of LCF Law Group analyzes landmark changes to Ukraine’s bankruptcy legislation

About the author: Olena Volyanska (Volyanska@lcf.ua) is Counsel, Attorney at Law, and insolvency practitioner at LCF Law Grouр In October 2018, the Ukrainian parliament adopted a new Code on Bankruptcy Procedures. Is it accurate to say the country has entered a new era of bankruptcy proceedings?

All the indications are that the implications of this major reform of the bankruptcy process will become evident during the present year. This is a welcome and arguably long overdue development. Ukraine currently scores very low marks for insolvency resolution in the World Bank’s annual Ease of Doing Business survey and occupies 145th position in that particular section of the ranking. This is one of the country’s worst indicators and serves as a key negative factor dragging down Ukraine’s overall score. The adoption of the new bankruptcy code should now allow Ukraine to climb further in the Doing Business ranking and generally improve the country’s investment attractiveness.

For Ukraine, it is no exaggeration to say that the new code is a revolutionary document in the field of bankruptcy regulation. For the first time in the country’s legislative history, it introduces the institution of bankruptcy for individuals, or consumer bankruptcy as it is termed in the code. This means that bona fide debtors now have a legal procedure 44

for clearing outstanding debts via the courts, while creditors have a mechanism for the maximum satisfaction of their claims.

I also look forward to changes in the field of corporate bankruptcy. This section of the code is not quite so revolutionary in character. In fact, it would be more accurate to talk about the evolution and improvement of bankruptcy procedures in this sphere. It is also obvious that many of the established legal positions of the courts will now become invalid, and the interpretation and application of the new rules will cause difficulties for both the participants of bankruptcy procedures and for the courts themselves. Nevertheless, within the legal profession we are ready to work within the framework of the new rules. Legal services practitioners will have an active part to play in the development of new approaches to judicial practice arising from these changes.

How exactly are the regulations governing bankruptcy of legal entities evolving?

In my opinion, the most important changes relate to the sale of bankruptcy property during the liquidation procedure. This is the

Do you think individual debtors are ready to take advantage of the solvency restoration procedures laid out in the new bankruptcy code?

Individual Ukrainians with debts, especially those with mortgage loans received in foreign currency, are already active when it comes to asserting their rights. I think that many of them are already preparing for the entry into force of the new bankruptcy code and will take advantage of the proposed mechanisms very quickly. It is worth underlining that the new code provides for the abolition of the Law of Ukraine “On the moratorium on collecting the property of Ukrainian citizens provided as collateral for loans in foreign currency” one year after the code enters into force. At the same time, the code offers these persons unprecedented conditions for the restructuring of their debts for a

temporary period of five years. In general, it is important to understand that bankruptcy is not a punishment. It is not a measure designed to humiliate or pressure debtors. On the contrary, it is a privilege. In order to take advantage of this procedure, any individual should be prepared to demonstrate their integrity and readiness to do everything possible to repay their debts.

legal

cornerstone of the whole procedure. The sale of bankrupt assets at the highest price and to the maximum satisfaction of creditor’s claims is one of the main tasks of the competitive process. In line with the changes introduced by the new code, it is now possible to sell bankrupt property exclusively via electronic trading. The new legislation includes guarantees for the transparency of this procedure through the introduction of a two-tier electronic trading system. Meanwhile, the new code introduces significant simplifications to the procedure for initiating a bankruptcy case as well as greater access to the judicial procedure. The code abolishes many of the previous rules regarding the requirements faced by the debtor. There is no longer a lower limit on debt or need for a valid court decision within a three-month timeframe.

Pre-trial procedures have undergone significant changes including clarification of the roles played by creditors, debtor stakeholders and the economic courts. When viewed from a broad perspective, these changes suggest that the institution of bankruptcy for legal entities will cease to be a primarily declarative process and will instead become a genuine route to restoring the debtor’s solvency. This could have the additional impact of reducing the burden placed on judicial bodies.

Another important change is the increase in the period during which a debtor’s suspicious transactions are subject to revision. There are many examples where “experienced” future bankrupts have begun to prepare for bankruptcy immediately after receiving a loan. In such cases, transactions entered into by the debtor without violating the letter of the law but aimed at worsening the company’s position are only subject to challenge within the context of bankruptcy law. Recent changes mean that creditors can now contest the financial activities of unscrupulous debtors for a longer period.

Do you see any potential shortcomings or oversights in the new bankruptcy code?

It is obvious that before the formation of a unified practice of the higher courts in the application of the new provisions of the law, the courts of first instance will face difficulties, and we will certainly encounter different interpretations and different law enforcement practices during the transition period.

For example, questions will likely arise regarding contested debtor transactions and calculations related to liquidation. The right of appeal over transactions may also create opportunities for ambiguity or confusion. According to article 42 of the new code, arbitration managers and creditors have the right to appeal. However, at the same time, articles 44 and 60 of the code state that property managers and designated liquidators also have the right to appeal against a debtor’s transactions. When applying these rules, there is a danger that some parties may face challenges enforcing their rights. Judicial practice will provide the answers to these questions in due course.

Whose interests enjoy greater protection under Ukraine’s new bankruptcy code – creditors or debtors?

It is fair to say that discussion around the new country’s bankruptcy legislation often focuses on the theme of whether the new framework is more favorable to creditors or debtors. In this context, Western experts often evaluate Ukraine’s bankruptcy legislation as pro-creditor, meaning that it aims to facilitate the procedure of liquidating and selling off the debtor’s assets in order to satisfy the creditor’s claims, rather than restoring solvency and providing the debtor with the opportunity to resume business activities. However, domestic experience indicates that debtors confidently exploit any gaps or loopholes in the law in order to make the bankruptcy process lengthy and in many cases hopeless for their creditors. I would cautiously argue that the new code is balanced. Those features that may at first glance appear to be in favor of the creditor can actually serve to discipline all participants in the bankruptcy process with an emphasis on the debtors, obliging them to refrain from any unfair actions.

“For Ukraine, it is no exaggeration to say that the new code is a revolutionary document in the field of bankruptcy regulation”

www.bunews.com.ua

45

legal

Making sense of sanctions strategy Clarity often lacking as more and more businesses in Ukraine feel the impact of sanctions

About the author: Volodymyr Vashchenko, аttorney-at-law and partner of VB PARTNERS We live in an era where the issue of sanctions is increasingly intruding on everyday business life. On 27 January 2019, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) lifted sanctions imposed on En+ Group plc, UC Rusal plc, and JSC EuroSibEnergo, following an earlier notification submitted to the US Congress on 19 December 2018. The reason stated for the lifting of these sanctions was that the companies involved had reduced the ultimate shareholder’s stake and agreed to unprecedented transparency.

Lack of transparency is a common theme in the field of sanctions. While the OFAC publishes official press releases regarding the application of sanctions, the initiators and reasons for the application of sanctions in Ukraine often remain in the shadows. In addition, this primarily refers not to Russian persons, but to sanctions against European companies.

The reasons for their sanctioning are sometimes extremely vague.

This gives cause for reasonable doubt about the legitimacy of their objectives.

For example, on 14 May 2018, Decree No. 126/2018 appeared on the Ukrainian President’s official website without any accompanying lists of sanctioned entities. On 25 May, the National Bank of Ukraine canceled the registration of the domestic payment system WebMoney.

UA. However, publication of the Ukrainian President’s Decree, the National Security and Defense Council’s decision, and the associated lists only took place in the President’s Official Bulletin on 5 June.

Distribution of this edition then proceeded on 11 June.

Ukraine’s Law on Sanctions confirms the National Security and Defense Council’s right to apply any sanctions at its own discretion.

However, the most common sanctions for companies tend to involve the blocking of assets and suspension of financial transactions.

This makes it impossible to establish business contacts, enter into transactions, or conduct any operations with financial and other assets in Ukraine. For Ukrainian residents this means the cessation of commercial activity, making it impossible for them to comply with their obligations to the budget and third parties.

46

According to updated procedural law, disputes regarding the legality of the Ukrainian President’s decrees shall be subject to consideration in simplified litigation by a panel of judges of the Cassation Administrative Court. The Grand Chamber of the Supreme Court is the appellate court. Meanwhile, as the European Court of Human Rights (ECHR) has established, the right of ownership may be restricted only if the law provides for restriction, if restriction is in the public interest, or if restriction would comply with the principle of proportionality of the interests of the state and the individual in question.

Restriction of property rights should reflect a fair balance of public interests and fundamental rights and may not impose an “excessive burden” on the owner.

Subject to the above requirements, the Ukrainian authorities should determine in each particular case whether the country’s national interests require precisely such a level of interference with the rights and freedoms of any individual or company. Nevertheless, due to the current position of the Ukrainian Supreme Court, the use of sanctions by the state does not constitute a violation of rights and freedoms.

The possibility of imposing sanctions is provided for by the law and has a legitimate aim, namely the need to immediately and effectively response to threats to the national security of Ukraine.

Taking into account this formal approach, achieving a positive outcome in any sanctions disputes with the state is unlikely. To date, appellants have lost all disputes. The sole exception is case No. 9901/759/18, which provides the only example of a suspension in sanctions proceedings at the request of the Ukrainian President’s representative.

In addition, foreign investors may also apply for international arbitration with regard to the direct and indirect expropriation of assets.

This is applicable because some decisions of the authorities on the procedure for applying sanctions deprive an investor of the ability to manage and control assets. As an example, the National Securities and Stock Market Commission’s Decision No. 1707 dated 13 October 2015 recognized the shares of sanctioned shareholders as non-voting.

Thus, non-voting shares are not counted when determining the quorum of the shareholders meeting. A company with a significant stock of shares loses its representatives in the management and the right to vote on all issues on the agenda.

The actions of Ukrainian state bodies often conceal the interests of particular “favorite friends” and financial groups that have nothing to do with issues of national security. Therefore, a portion of the decisions taken around the issue of sanctions may be either a means of applying pressure on business, or a means of redistributing the market (for example, gambling), or a means of indirect expropriation of assets.

I certainly do not challenge the importance of sanctions legislation in most cases. However, there is a need for the Ukrainian authorities to explain the reasons for imposing sanctions on business. It is also important to establish the legitimacy of the aims behind sanctions measures. This could be subject to verification by the Supreme Court in respect to the compliance of any decision with the basic criteria of reasonableness, objectivity, good faith and proportionality. www.bunews.com.ua

Do you want to setup your business in Ukraine?

Armenia | Belarus | Germany | Kazakhstan | Poland | Russia | Ukraine | Uzbekistan

We offer you all the back-office services you need: Market Research | Business Setup | Accounting Outsourcing and Reporting | Taxation | IT/ERP Systems | Transfer Pricing | Due Diligence and Internal Audit | Legal Services | Compliance Services | Legal Address | Interim Management | Expert Recruiting and Outstaffing

Yuri Donets General Director +380 / 44 / 490 55 28 kyiv@schneider-group.com schneider-group.com

business set-up in Ukraine Scan this QR-Code to learn more about it!

legal

Top five legal industry themes for 2019 Key issues to consider this year as Ukraine’s ambitious judicial reform process continues requirements towards litigation counsels and higher expectations regarding a counsel’s reputation. An attorney certificate alone is no longer a sufficient measure of merit. Experience, reputation and brand will now be more important than ever before.

3. E-court implementation

About the author: Gleb Bialyi (gleb.bialyi@asterslaw.com) is a partner and co-head of the domestic litigation practice at Asters. Asters associate Roman Gerasymenko is the co-author.

1. Ukrainian justice reform continues Last year saw the new Supreme Court begin its activities following its creation as one of the centerpieces of Ukraine’s justice system reforms. In autumn 2018, we also saw the reboot of the country’s appeal courts. The process of justice system reforms remains very much a work in progress. Coming steps include the completion of work on newly updated courts as well as the creation of highly anticipated new court bodies such as the High Court of Intellectual Property and the High Anti-Corruption Court.

The main function of the High Anti-Corruption Court will be to execute justice in criminal proceedings concerning corruption-related offences such as money laundering and declarations by the public officials featuring unreliable information about personal assets. This is a key element of Ukraine’s broader post2014 reform process. It will generate significant national and international interest. Meanwhile, the High Court of Intellectual Property will execute justice in intellectual property cases regarding rights to inventions, trademarks, and so forth. It will also handle disputes concerning intellectual property contracts and related issues. Intellectual property rights have been a longstanding issue for Ukraine in its relations with the international community, making this legal reform a strategic priority.

2. Court representation reforms

Amendments adopted by the Ukrainian parliament in 2016 stipulate that only attorneys with the respective certificate may perform the role of court representation. This prevents non-attorneys from representing clients in court. This law provided for an adaptation period for implementation. The exclusive right of attorneys to represent a client (except for state authorities) in the Supreme Court commenced from 1 January 2017, while in the appeal courts the date was 1 January 2018. Due to these changes, only certified attorneys were entitled to represent their clients in the Supreme Court and appeal courts in 2018. January 2019 saw implementation of the same rule in Ukraine’s first-instance courts. Nevertheless, there is a flipside to this coin. The majority of lawyers without the relevant certificates have already passed the necessary attorney exams during the adaptation period. This demonstrates the relative simplicity of access to attorney status. The most likely effect of all this on Ukraine’s legal services sector is the raising of client 48

The primary objective of Ukraine’s e-court system is to simplify trial procedures by optimizing casework and speeding up the decision-making process.

Newly adopted procedural codes confirm implementation of an e-court system allowing for the exchange of procedural documents among the parties and the court, as well the recording of the trial process and participation in trials via video conference. The filing of e-lawsuits or other procedural documents in electronic form, along with trial participation via video conference and video recording of court hearings, are actually nothing new for the Ukrainian justice system. For example, the filing of the first Ukrainian lawsuit in electronic form took place back in 2015, long before the adoption of the new procedural codes.

In fact, filing procedural documents using e-signatures was possible even earlier, but lawyers did not previously take up this opportunity. In practical terms, the significance of the current e-court system implementation is to unify and simplify document circulation and interaction between the parties and the court by creating one single software system that will include all the necessary functions for e-trial procedures.

4. Legal-tech in litigation

There has been a lot of chatter in recent years about the rise of legal-tech and the impending demise of the legal profession. In reality, we are highly unlikely to see the automation of litigation or computers replacing lawyers in 2019.

Nevertheless, progress in this direction continues. Today’s Ukrainian litigators are already actively using various applications and software in order to simplify and optimize their performance. At present, this primarily means applications that are able to update information online about issues such as the status of a particular court case, the appointment of meetings, or the release of procedural court decisions. This trend is no surprise and is evident elsewhere in Ukraine. For example, a number of Ukrainian insurance companies have recently begun actively using special software to draft standard packages of documents. This software is able to pick out the relevant information about an insurance event and include it in a standard lawsuit draft or any other procedural document. As a result, lawyers spend much less time initiating an action or preparing other standard documents. Another hot-button issue in legal-tech is the development of software providing forecasts for trial outcomes taking into account the nature of the situation, the parties involved, and the personality of the presiding judge. However, at present all software solutions serve an ancillary role in support of the lawyer. This role may be increasingly useful, but it cannot replace the functions of the legal fraternity completely.

5. Expect the unexpected

It is always wise in Ukrainian litigation practice to expect the unexpected, and this is particularly good advice in 2019 as the country prepares for presidential and parliamentary elections. There are a number of potential variables capable of completing reversing or derailing current trends in litigation practice. These include the aforementioned elections, changes to key state policies such as the ban on agricultural land sales, or geopolitical turbulence in eastern Ukraine. www.bunews.com.ua

legal

Ukraine’s new approach to international arbitration Yulia Atamanova explores the implications of recent changes to international arbitration in Ukraine further pointed out by the court that it is inadmissible to limit the right to appeal to the economic court, providing that the reason to terminate legal proceedings is the readiness of both parties to refer the dispute to arbitration, drawn up by an appropriate appeal to the court.

This position of the highest judicial authority in the country sparked considerable concern among arbitration lawyers and arbitrators of the ICAC at the Ukrainian Chamber of Commerce and Industry, because it demonstrated that the judicial system seemed to be overlooking the fundamental principles of autonomy of parties engaged in foreign economic relations and the credibility of international commercial arbitration bodies. In this context, the adoption of new procedural codes establishing fresh approaches and tools supporting arbitration in Ukraine has led to general expectations for the improvement of the arbitration climate in the country.

About the author: Yulia Atamanova (atamanova@lcf.ua) ) is a Counsel, Ph.D and Attorney at Law at LCF Law Group What is the significance of judicial reform for the development of the practice of international arbitration in Ukraine?

The general objective of Ukraine’s ongoing judicial reform process is increasing public confidence in the judiciary and strengthening the foundations of the rule of law. This has long-term implications in terms of systemic changes to various social institutions and a general increase in the level of legal culture in the country. These changes also apply to the dispute resolution system which is an alternative to the state courts – namely international commercial arbitration, the performance of which is controlled and facilitated by state jurisdictional bodies. The new procedural codes that entered into force in December 2017 have laid the legal foundations for an increase of public confidence in the institution of alternative dispute resolution, which in recent years in Ukraine has periodically suffered from what many have termed as the “unfriendly attitude of state courts”.

What do you regard as the greatest challenges facing international arbitration in Ukraine?

One specific example would be the high-profile case (No. 910/8318/16) in which the Supreme Court of Ukraine absolutized the right of appeal to the court, despite the existence of an arbitration agreement. The Supreme Court held that the parties had the legal opportunity, as opposed to the obligation, to refer their dispute to the arbitral tribunal. It was 50

How has the situation changed over the past year?

The first year of work of the courts under the new procedural norms has brought positive results. For example, the Grand Chamber of the Supreme Court has expressed its position which made it possible to charge compound interest on arbitration awards. We have also seen the introduction of positive new practices in applying interim measures in arbitration proceedings and in providing evidence. The introduction of the principle of interpretation of an arbitration agreement in favor of its authenticity and enforceability, which should change the judicial approach to establishing competence to resolve a dispute, is particularly important. For example, in case No. 904/4384/17, the court applied this approach when interpreting the inaccuracies of the arbitration agreement in the title of the arbitration. In the court’s opinion, this did not justify the refusal of the arbitration tribunal to consider the dispute as within its competence.

Can you identify any important judicial decisions over the past twelve months that will further develop the practice of enforcing international commercial arbitration rulings in Ukraine?

Although only a year has passed since the moment when the new procedural rules governing international arbitration came into force in Ukraine, it is important to recognize the significance of the Supreme Court’s position on the question of the court’s responsibility to assess threats to public order resulting from the implementation of international arbitration rulings. The issue of public order has long been one of the cornerstones underpinning the implementation of international arbitration decisions in Ukraine. This is due in large part to the challenges of accurately assessing the character of any potential threats to public order caused by implementation of international arbitration decisions and the difficulties in establishing any violations of it. The Supreme Court’s resolution of 27 June 2018 (case No. 519/15/17) provided some welcome clarification on the relationship between arbitration cases and the maintenance of public order in Ukraine. The resolution concluded that rulings relate not only to transactions between the parties to the arbitration proceedings itself, but should also seek to verify whether recognition and enforcement of arbitral awards may lead to public order disturbances in Ukraine. www.bunews.com.ua

legal

Confidentiality in Ukrainian legal practice International clients should avoid assumptions on key issues such as attorney-client privilege If you are a US general counsel or an investor looking for a lawyer or law firm to represent your interests in Ukraine, I appreciate that you look for, among many criteria, a particular skillset, good recommendations, good English drafting skills, and timely advice. After identifying your dream team, you then send them your standard corporate terms of engagement, setting out billing and conflict procedures. Do your standard terms cover confidentiality or have you assumed a lawyer’s duty of confidentiality to apply? What about the issue of attorneyclient privilege?

Unfortunately, you cannot assume that either a duty of confidentiality or attorney-client privilege will necessarily apply to Ukrainian attorneys under Ukrainian law. The “Bar” and associated ethical rules as understood in the US apply to all US attorneys. However, in Ukraine, as in Russia and other neighboring countries including several EU member states for that matter, duly licensed “attorneys” are generally “advocates”, or to borrow a term from the more familiar jurisdiction of the UK, “barristers”. Everyone else is a “jurist” (i.e. a solicitor).

Your company’s in-house counsel or outside counsel in Ukraine may or may not be an “advocate”. The Ukrainian law firm you hire most likely is not an “association of advocates” or an “advocate bureau.”

In such cases, Ukraine’s law “On Advocacy and Advocate Activity” will not apply. The legal requirements stipulated in the law as to “advocate secrecy” will not apply. You may feel relieved that your inhouse counsel is an expat lawyer or your Ukrainian law firm has an expat or expats within their team. Let us assume they are British or American to keep this analysis relatively brief.

If they are duly licensed in their home jurisdiction, then likely the rules of those home jurisdictions will apply to such individuals even when they are working abroad. In the worst case, however, a Ukrainian court or agency may not care. Are these individuals registered in the “Unified Register of Advocates of Ukraine”, for example? What about the rest of the Ukrainian “jurists” with whom you are in contact?

52

About the author: Myron Rabij is a partner with the US law firm, McCarter & English LLP. He worked in Kyiv for 22 years before returning to the US to focus on cross-border US-Ukraine transactions and assistance to Ukrainian and other foreign companies in the US capital and finance markets.

To be clear, attorney-client privilege, as a statutory evidentiary protection in Ukraine, will not apply to your communications with them. This is not unusual for the region, but a US attorney may overlook this qualification. As to confidentiality, unless you include clear confidentiality provisions in your terms of engagement or a separate NDA, you are not covered. When drafting, you must include provisions as you would when contracting with any counterparty. Your protections are limited to contract rights. Additionally, it is important to ensure that your company’s standard engagement letter or terms of engagement will be adequate for crossborder contract purposes in Ukraine.

I have worked for and with many reputable Ukrainian lawyers and law firms over the past 25 years and can attest to the very high standards of conduct to which my many distinguished colleagues and friends rigorously adhere. Nevertheless, problems can arise if some of their employees do not adhere to such high standards, or if counterparties in

litigation or arbitration, courts or government agencies make disclosure demands.

There could also be issues if government agencies (such as tax or anti-corruption authorities) conduct investigatory “raids” or even scheduled audits.

In terms of litigation or arbitration, this is not limited to in-country litigation. The DOJ (in an FCPA investigation for example), EU agencies, or foreign counterparties may all make discovery requests. Furthermore, even in the case of an advocate, “advocate secrecy” in Ukraine does not apply in cases of anti-corruption investigations. If you have an internal company FCPA reporting record at your Ukrainian office or subsidiary, this can be subject to disclosure even if the records are kept at your advocate’s office.

Offices of international law firms and reputable local law firms include strong confidentiality provisions in their standard legal service agreements. In Ukraine, law firms are also establishing affiliated “associations of advocates” formed from among staff advocates. These associations subcontract with clients to allow for greater client protection. If you are not sure whether your local counsel has created such an association, you should enquire.

Alternatively, you might choose to consider engaging and contracting your Ukrainian lawyers through your US outside counsel in order to fall within US attorney-client privilege rules. This provides some protection at least against discovery requests made outside of Ukraine. It is also worth considering what documentation and records you wish to keep in Ukraine or on local servers in Ukraine. You may wish to limit the scope of discovery in a Ukrainian litigation or an arbitration case by limiting what is discoverable.

If you also would have dealings with licensed notaries in Ukraine (for example, for real estate closings), please note that even though these individuals are also lawyers, they are subject to separate legislation which provides similar protections equivalent to those afforded to advocates.

The same exemptions for issues like anticorruption investigations also apply.

www.bunews.com.ua

UKR-ID.COM

KEY TOPIC: REVOLUTION OF VALUES

JUNE 7-8th 2019 KANIV

DISCUSSION PANELS:

SPECIAL DISCUSSION PANELS:

-

- NEW ENERGY STRATEGY: THE BALANCE OF ECOSYSTEMS

ECONOMY ID HUMAN SECURITY ID COMMUNITY ID TECHNOLOGY ID CULTURE ID TOURISM ID MEDIA ID JUSTICE ID EDUCATION ID

- BIG IDEAS FOR SMALL CITIES - INVESTMENT INTO THE HYDRO INFRASTRUCTURE OF UKRAINE: HOW TO RESURRECT OUR WATERS? - AGRICULTURAL BUSINESS OF THE FUTURE – PROFIT ABOVE ALL OF THE ECOLOGY OF NEW CONSCIENCE?»

Five Key Takeaways from Davos 2019 for Ukraine current Kyiv Mayor Vitali Klitschko promised to be a personal bodyguard for investors. All this was laid on the foundation of tangible reforms that have taken place since 2014.

2. Women leaders spearheaded Ukraine Davos

“No other event has the same global appeal,” commented Andy Christie, private jets director at Air Charter Service, predicting up to 1,500 individual private jets flights to be made in and out of this year’s Davos summit. Top global business leaders, political leaders, economists, celebrities, and journalists turn up year after year to the World Economic Forum to discuss the most pressing global issues.

Ukrainians came well prepared to Davos this year. Here are my five key takeaways from Davos 2019: 1. Ukrainians are getting their act together in marketing their country

Ukraine has changed, but it has struggled to convey the depth of change to the global business community. That now seems to be improving. This year at Davos, Ukraine was presented professionally and eloquently. It was some of the best investment promotion that I have seen Ukraine perform. The private sector took responsibility for the assignment. On the Promenade of Europe’s highest town, Ukraine House opened its doors. Privately funded, uniting companies, foundations, funds, and business associations, the multi-format space showcased investment opportunities in the country’s growing economy to global white-collar and gold-collar elites. Ukraine House pulled together top-quality panel discussions, events promoting the country, investment sessions and networking receptions. It showcased the new Ukraine as a vibrant and dynamic European democracy. President Petro Poroshenko spoke with major investors in fluent English and oversaw signings of two major investment deals totaling $370 million. The unmistakable former World Boxing Champion and

It is the Davos Man who dominates the annual economic forum. A meagre twenty-two percent of the forum participants were women.

In contrast, the entire organizing committee of Ukraine Davos House was female. A tangible shift from Homo Sovieticus to Davos Woman.

Ukraine’s National Investment Council head Yulia Kovaliv brought top caliber CEOs from multibillion corporations to Ukraine House Davos. Speakers on Ukraine House’s discussion panels included the new generation of Ukraine’s female leaders: Finance Minister Oksana Markarova, deputy Prime Minister Ivanna KlympushTsintsadze, Founding Dean and Chair of the Lviv Business School Sofia Opatska, and Kira Rudik, COO of Ring Ukraine, a company that was acquired by Amazon for $1 billion.

3. The diaspora’s impact is becoming increasingly significant

Ukraine has one of the largest diasporas in the world. The Ukrainian World Congress represents the interests of over twenty million Ukrainians outside Ukraine. Its new president, 47-yearold Canadian-Ukrainian Paul Grod, plans to focus on investment promotion. Paul was present in Davos, as were fellow CanadianUkrainians Chrystia Freeland and Roman Waschuk. Chrystia started her career in journalism writing for the Financial Times, the Washington Post, and the Economist while working in Ukraine; today she serves as Canada’s Foreign Minister. Waschuk is Canada’s ambassador in Kyiv.

The strategy and inspiration of Ukraine’s presence at Davos was steered by Ukrainian diaspora trailblazers Lenna Koszarny and Jaroslava Johnson, who both have over twenty years in business and investment in Ukraine. Washington-native Alexa Chopivsky was the executive director of Ukraine House Davos. Daniel Bilak, chairman of UkraineInvest, the investment promotion office, moved to Kyiv from Canada over two decades ago. Detroit-born Health Minister Ulana Suprun is doing truly commendable work reforming Ukraine’s healthcare sector. Former Finance Minister, Chicago-native Natalie Jaresko, was the first diaspora female to go in to Ukraine’s government. More are likely to follow.

53

From left to right, Andrey Kolodyuk, Chairman of Ukrainian Venture Capital and Private Equity Association (UVCA); Andy Hunder, President of the American Chamber of Commerce in Ukraine; Lenna Koszarny, Founding Partner and CEO at Horizon Capital; Michael Collins, CEO, Invest Europe; Helen Volska, Founding Partner, EBS. 4. Foreign investors are beginning to show interest $370 million of investment deals were signed at Ukraine House Davos: France’s Total Eren and Norway’s NBT revealed investments in the country’s largest windfarm in southern Ukraine. Horizon Capital, the leading private equity firm in Ukraine, announced a $200 million private equity fund.

“Foreign investors are returning to Ukraine on the back of reform,” commented Sir Suma Chakrabarti, president of the European Bank for Reconstruction and Development. This international financial institution has thus far invested $13 billion in Ukraine. The National Investment Council united around the table Poroshenko and top global investors, the likes of Lakshmi Mittal, whose company ArcelorMittal has invested over $9 billion in Ukraine’s largest steel mill.

DXC Technology, the world’s leading independent end-to-end IT services company, announced this month that it is acquiring Luxoft, a software development company, for $2 billion. The company employees 4,000 Ukrainians led by female chief executive Oleksandra Alkhimovych. There

is much to do to boost FDI, but it seems the country is on the right track.

5. The unpredictability of election results won’t hamper investors In less than ten weeks, Ukrainians go to the polls to pick a new president.

The elections are so open that no one can predict the outcome. Yulia Tymoshenko, Ukraine’s first female prime minister, leads. Timothy Ash, a respected emerging markets strategist, has forecast that Tymoshenko will beat Volodymyr Zelenskiy, a popular TV comedian, in the second round of voting. Many senior executives I spoke to in Davos agreed that Tymoshenko will likely make the second round, but it will be the incumbent, Petro Poroshenko, that she will have to beat. Tymoshenko lost the presidential elections in 2010 and 2014, finishing second in both. She is hoping to become the country’s first female president. A general election to the 450-seat parliament follows in October. Likewise, the outcome is unclear.

The business community is anticipating that after the year’s double elections, the president, parliament, and the new government will have five uninterrupted years to deliver continued reform and economic growth.

Source: Atlantic Council.

Expert view BUSINESS SEEKS EFFECTIVE IPR MANAGEMENT FOR UKRAINE Changes of 2014 were followed by long-awaited reforms in many spheres. Still, qualitative reform of the Ukrainian Patent office (UPO) remains one of the highest priorities for business community.

Let’s admit that the UPO worked quite well for at least 10 years.

However, there is always a room for improvement. Thus, the Government decided to proceed with reforming the UPO. From the start the process was organized quite well being mostly supported by the professional community and relevant stakeholders. In particular, in 2016 the Government issued concept for the reform, hired independent auditors to develop new effective management system for the UPO, involved esteemed professionals to develop respective draft law.

In simple words the major idea of the reform was creating one new entity instead of the two existing authorities responsible for registration of intellectual property (IP) rights: Ukrainian Institute of IP (examining IP) and the State IP Service (signing IP patents and certificates). This looked logical and should have

Taras Kyslyy Co-Chair of the Chamber IPR Committee Сounsel Asters Law Firm been completed by the first half of 2017. However, the process is still ongoing.

Indeed, the concept of the reform was approved, the new management system was developed, and respective draft law was prepared to implement the reform. The State IP Service was liquidated, and its authorities were transferred, including financing tools to the Ministry of Economy Development and Trade (MEDT). In fact, the MEDT took the driver’s seat to move the reform forward. The common goal for both business and state authorities is to increase the level of IP protection in Ukraine. Thus, business community is looking forward to launching the effective enforcement mechanisms soon.

There is already visible upper iceberg side of the stuck reform, namely significant delays in granting registrations for IP rights already harming business. However, quite soon we may evidence even more severe consequences of this incomplete reform, when the delays may become beyond any reasonability, or the state IP protection system almost stops functioning and it may take years to recover.

AMCHAM UKRAINE IPR COMMITTEE TO FINISH THE REFORMS STARTED: ENFORCEMENT MECHANISMS Business community has great hopes on launching of the Supreme Court on Intellectual Property (hereinafter – IP Court) which is the first specialized court in Ukraine. It is created because administrative and commercial courts do not have judges with enough level of knowledge and qualifications to deal with specific IP-related disputes. That is why, IP Court would become the “arbiter of fashion” in terms of interpretation and defining the areas of IP protection.

SYSTEMIC APPROACH TO FIGHTING COUNTERFEIT: PROACTIVE PATH

Consumer safety and brand protection from counterfeit products are among top business’ challenges. When it comes to counterfeiting, we mean any product that is manufactured in infringement of the intellectual property of another owner. The purpose of this action is clear - the products of a famous brand are much easier to recognize on the market. How can we overcome the problem of manufacturing counterfeit products? The potential option is to review the country’s strategy and tactics to combat counterfeiting and to implement the reform of intellectual property protection.

Experts of the Chamber IPR Committee participate in the devel-

opment of the National Intellectual Property Strategy, which is a set of measures to be implemented by the state to stimulate and support the effective creation, use, implementation and protection of intellectual property rights at the national level.

HARMONIZATION OF NATIONAL LEGISLATION WITH EU NORMS After signing the Association Agreement with EU in September 2017, Ukraine has committed to harmonize the provisions of the Ukrainian legislation in the field of the IP protection with the European Union law.

Experts of the Chamber IPR Committee support Draft Law #9088 amending the level of protection of the rights of intellectual (industrial) property and Draft Law #9385 on implementation of certain provisions of the European Union legislation in the field of intellectual property, which both have been registered in the Verkhovna Rada. Chamber Member Companies’ experts also provided their proposals to the Draft Laws, based on bringing current IP legislation in line with the EU values.

Lidiia Levitska Chamber Policy Officer (Committees) llevitska@chamber.ua

B2G Dialogue MEETING WITH PAVLO PETRENKO, MINISTER OF JUSTICE AND OLENA SUKMANOVA, FIRST DEPUTY MINISTER OF JUSTICE The Chamber Members met with Minister of Justice Pavlo Petrenko and his First Deputy Olena Sukmanova to discuss the hottest topics for business in the sphere of justice: plans of the Ministry for 2019, execution of judgments and anti-raiding initiatives of the Ministry.

MEETING WITH VOLODYMYR OMELYAN, MINISTER OF INFRASTRUCTURE What are the plans of the Ministry of Infrastructure in road, railway, maritime and postal spheres for 2019? Chamber Members had a great opportunity to hear directly from Minister of Infrastructure Volodymyr Omelyan.

MEETING WITH ULANA SUPRUN, ACTING MINISTER OF HEALTH The Chamber Members met with Ulana Suprun, Acting Minister of Health. In focus of the discussion: priorities of the Ministry of Health of Ukraine for 2019; state strategy for implementing the state policy of providing the population with medicines by 2025 and respective action plan; cooperation between the

Ministry of Health and the State Expert Center, the State Service on Medicines and Drugs Control, the National Health Service and other institutions; and further cooperation with the Chamber Healthcare Committee within the framework of the signed Memorandum of Cooperation.

B2G Dialogue MEETING WITH ANDRIY KOBOLYEV, CHIEF EXECUTIVE OFFICER OF NAFTOGAZ OF UKRAINE Chamber Energy Committee Members discussed implementation of gas market reforms with Andriy Kobolyev, CEO of Naftogaz of Ukraine, and Ukrtransgaz representatives. In focus: the unbundling status, negotiations on gas transit maintenance, plans and strategy in upstream sector and launch of daily balancing in March.

MEETING WITH OLEXIY FILATOV, DEPUTY HEAD OF THE ADMINISTRATION OF THE PRESIDENT OF UKRAINE, COORDINATOR OF THE JUDICIAL REFORM COUNCIL UNDER THE PRESIDENT OF UKRAINE The Chamber Legal Committee had a productive meeting with Olexiy Filatov. Participants discussed hot topics on judicial reform – launching High Court on Intellectual Property and High Anti-Corruption Court, state of reforming local courts and appeal courts, as well as developments in legislation on advocacy services.

PRESENTATION OF FINANCING OPPORTUNITIES OF THE EXPORT-IMPORT BANK OF THE UNITED STATES Douglas Frye, US EXIM Bank Senior Loan Officer and Business Developer presented to Chamber Members Export-Import Bank of the United States cover policy for Ukraine along with terms, support parameters and loan requirements.

B2G Dialogue TAX COMMITTEE MEETING WITH GOVERNMENT REPRESENTATIVES REGARDING DRAFT LAW ON ADMINISTRATION OF SINGLE SOCIAL CONTRIBUTION Yevgeniy Kapinus, Chairman of the Pension Fund, and Pavlo Kukhta, Deputy Head of the Strategic Advisory Group on Reform Support in Ukraine, joined Chamber Tax Committee Meeting to discuss updated Draft Law regarding administration of single social contribution.

Yevgeniy Kapinus, delivered presentation “Introduction of fair mechanism for assessment of a single social contribution”.

KICK-OFF MEETING OF THE TASK FORCE ON AUTHORIZED ECONOMIC OPERATORS The Chamber has been continuously promoting Authorized Economic Operators Concept (AEO) and contributed to development of relevant legislation. Moreover, in order to speed up the AEO adoption, AmCham Ukraine established the Task Force on AEO. The implementation of the AEO will create favorable conditions for crossborder trade of transparent and reliable companies as Ukrainian legislation will be harmonized with the advanced EU customs legislation based on standards of the World Customs Organization.

MEETING WITH ANDRIY RYAZANTSEV, ECONOMIC AND FINANCIAL DIRECTOR OF UKRZALIZNYTSYA The Chamber Members met with Andriy Ryazantsev to discuss main components of tariff increase and Draft Order of the Ministry of Infrastructure on annual automatic indexation of tariffs for transportation of goods by railway within Ukraine.

HR COMMITTEE MEETING WITH OLGA MAKOGON, DEPUTY HEAD OF THE STATE EMPLOYMENT SERVICE Chamber HR Committee Members discussed with Olga Makogon the concept of the new Law “On Development of Labor Market and Activation of Employment” and initiatives of the State Employment Service in 2019. In particular, career advisor for employee, adviser and consultant for employer, as well as the most topical aspects of employment system reform in Ukraine.

B2G Dialogue MEETING WITH PAVLO KOVTONIUK, DEPUTY MINISTER OF HEALTH AND OLEKSANDR ZHYHINAS, EXECUTIVE CONSULTANT OF THE NATIONAL HEALTH SERVICE Chamber Healthcare Committee held a meeting with Pavlo Kovtonyuk and Oleksandr Zhyhinas on the next steps within the healthcare reform and reimbursement program in 2019. Meeting’s participants also discussed the establishment of the Investment Office under the Ministry of Health and further cooperation with the Chamber Healthcare Committee.

PHARMA ACCESS TALKS: MANAGED ENTRY AGREEMENTS (MEAS) AND NEGOTIATION PROCEDURES What do you know about the experience of Lithuania, Estonia and Hungary in implementation and negotiation of Managed Entry Agreements (MEA) within healthcare sector? This topic was in the focus of the latest Pharma Access Talks session which gathered international experts, AmCham Ukraine business community and responsible state officials. The event was organized jointly with Chamber Member Company Danevych.Law and the Association of Pharmaceutical Research and Development.

Truly outstanding speakers Neringa Bernotiene, Kärt Veliste, and Márk Péter Molnár shared their expertise and insights on MEAs with Chamber Members.

COMPLIANCE CLUB MEETING Chamber continues promoting best practices in compliance – on January 30, Chamber Compliance Club held its meeting devoted to such elements of effective compliance program – third party due diligence, periodic testing and review of the program, discipline and incentives for employees. Also, participants had an opportunity to learn about analyzing underlying misconduct from Michael Volkov – internationally recognized expert in the sphere of compliance.

PARTNER OF THE EVENT

CHAMBER REGIONAL OUTREACH - KRIUKIV RAILWAY CAR MANUFACTURING PLANT IN KREMENCHUK On the right track. Accelerating Ukraine’s infrastructure development, AmCham Ukraine President Andy Hunder got together with the GE in Ukraine team at Kriukiv Railway Car Manufacturing Plant in Kremenchuk, which is carrying out the final assembly of 30 GE Evolution Series freight locomotives. A great example of U.S.-Ukraine business partnership, this GE Transportation project is a tangible step toward modernizing Ukraine’s transportation infrastructure.

ANNUAL MEMBERS APPRECIATION RECEPTION

On February 5, the American Chamber of Commerce in Ukraine held its Annual Members Appreciation Reception that gathered 450+ distinguished guests Chamber Members, state officials, partners and friends of the Chamber.

The AmCham Ukraine was honored to welcome on stage Petro Poroshenko, President of Ukraine, Volodymyr Groysman, Prime Minister of Ukraine, Marie Yovanovitch, U.S. Ambassador to Ukraine, and Lenna Koszarny, Chair of 2019 Chamber Board of Directors and Founding Partner and Chief Executive Officer, Horizon Capital.

PARTNERS OF THE EVENT

ANNUAL MEMBERS APPRECIATION RECEPTION

Traditional Business Networking Cocktail “Welcome Back”

All guests had a great opportunity to enjoy a warm atmosphere of Chamber community, meet old and new friends, and discuss business opportunities. At the highlight of the event AmCham together with Certificate Partner Air Malta run a drawing of 2 round-trip tickets Kyiv – Malta – Kyiv.

CERTIFICATE PARTNER

VENUE PARTNER

PARTNER

OF THE EVENT

WELDI BUSINESS BREAKFAST “FASHION VS DESIGN. WHAT’S THE DIFFERENCE?” Design, fashion and personal style – main topics during the last AmCham’s WELDI Business Breakfast. Inspiring speakers Fyodor Vozianov and Anna Danevych guided participants through the world of fashion and design, demonstrated magical transformations and gave valuable recommendations how to match your clothing for a perfect outfit.

PREMIUM SPONSOR

GIFT PARTNERS

ST. VALENTINE’S DAY BLOOD DONATION

With the support by Sayenko Kharenko Law Firm and in partnership with DonorUA and Hilton Kyiv hotel, the Chamber continues its initiative to celebrate St. Valentine’s Day by donating blood for Kyiv hospitals.

96 people donated 43 liters of blood – amazing results of 2019 St. Valentine’s Day Blood Donation. Share love, save life!

SPONSORED WITH LOVE

PARTNERS

KYIV

opinion

Ukraine needs a national IT strategy Ukraine is gaining a reputation for IT excellence but must fight for a place on the global innovation map

About the author: Andriy Dovbenko is a businessman and venture investor The sphere of AI development worldwide now resembles a heated sporting competition if not a direct international confrontation.

As they develop their domestic AI industries, individual countries are effectively struggling to knock each other out. Ukraine is more than capable of meeting the challenges this creates, but it needs to determine an accurate and effective strategy for future action if the country is to make the most of its considerable intellectual resources.

Ukraine currently ranks as the third-placed country in the region in terms of number of companies working with artificial intelligence. This was the conclusion of the 2018 report “The Artificial Intelligence Industry in Eastern Europe”, issued by the Deep Knowledge Analytics company. This is also the message carried in multiple enthusiastic headlines throughout the Ukrainian media.

While it is true that we have much to be proud of, Ukraine does not have time to rest on its laurels.

Upon closer reading, the above-mentioned report actually suggests that new technologies are developing in today’s Ukraine in spite of rather than because of the broader business climate.

On the one hand, we have less investment funding than all of our neighboring countries. On the other hand, Ukraine is one of the leaders of the European IT outsourcing industry. If we analyze these two facts, it is clear that in the short term, the present situation is a big plus for our IT talent and for Ukrainian entrepreneurs. However, in the longer term, we risk remaining stuck in a lower rung niche reserved for the suppliers of labor. In this scenario, Ukrainian tech companies will not develop to their full potential as producers of innovative products. Therefore, I suggest we treat this recent rating somewhat critically: yes, it serves as confirmation of our capabilities, but it is also provides clear conclusions about where the country needs to go next.

At the same time as Ukraine’s number three regional ranking went public, news emerged that US Donald Trump had instructed Amer70

ica’s federal agencies to boost the development of artificial intelligence technologies. This move reflects fears that the US is lagging behind China in a number of strategic tech areas. Such steps by the world’s leading powers confirm once again that a very real international struggle is taking shape in the innovation arena. What is the role of Ukraine in this AI arms race? At present, the Ukrainian role remains relatively insignificant, but we have considerable untapped potential that the country has yet to utilize.

The disproportionate relationship between the number of tech companies and the number of investors in Ukraine (with the former dramatically outnumbering the latter) indicates that supply of tech specialists far outweighs current levels of domestic demand. Ukraine needs to challenge this as a matter of urgency. The outflow of skilled personnel leaving Ukraine is already high, posing strategic challenges to the country as a whole. Support for existing and emerging Ukrainian innovation projects should become a recognized priority of the state.

Of course, it is important to note that attitudes towards innovation in Ukraine are already changing. The current leaders of the country have demonstrated an understanding of how relevant this area is. What they lack is a consistent and long-term strategy for the development of artificial intelligence. A growing number of European countries are now adopting such strategy documents.

What should a Ukrainian strategy look like and what benefits can it bring? Ideally, it will help to determine the AI priorities of the state and establish the rules of the game for the business community, while also identifying key interests and areas requiring specific support. For this vision to become reality, all that is required is correct implementation.

A national AI strategy could also serve as a useful marker for Ukraine’s Western partners. It will help them to better understand our actions and make informed investment decisions, which is extremely important. Being a respected participant in the global innovation industry does not necessarily mean being the largest or richest player. It means being transparent and being predictable in the most constructive meaning of the word. The development of Ukraine’s intellectual resources will also mean the better definition of clear rules that will allow international business innovation to interact with our country.

Prominent positions in international ratings and glowing media reports about the growing contribution of the IT industry to Ukraine’s GDP represent important recognition of the sector’s achievements and the skills of the country’s IT professionals.

However, this recognition should serve as motivation to go further. We have taken the first successful steps along the road but still have a long way to travel. A national strategy should outline the next steps. The Ukrainian IT industry must seek to avoid compulsive and energy-consuming gestures for the sake of higher ratings and greater public resonance. Instead, the state and the tech industry must systematically move towards a set of established goals based on a clearly defined national strategy. www.bunews.com.ua

Banking on Ukraine’s

Expanding Middle Class ProCredit Bank’s Viktor Ponomarenko sees growing appetite for innovation among customers Photographer: Natalya Kravchuk

About the interviewee: Viktor Ponomarenko is the General Manager of ProCredit Bank in Ukraine The Ukrainian banking industry as a whole returned to profit in 2018 as the sector’s far-reaching post-Maidan reforms continued to bear fruit. As Ukraine’s banks have adapted to the new economic climate in the country since 2014, ProCredit Bank has been one of the top pound-for-pound performers and has remained consistently

ahead of the industry’s recovery curve.

The bank reported SME loan portfolio growth of 34% in 2018, which is only marginally down on the 35% achieved in 2017 and 40% in 2016.

While these robust stats are obviously welcome, ProCredit Bank officials say the most significant progress of the past year

actually came in the development of the bank’s offer for private customers. For the past few years, ProCredit Bank has been working on a long-term strategy to provide the kind of personal banking services that the growing Ukrainian middle classes increasingly expect. This has meant reinventing the options available to the bank’s private customers, with a new emphasis on convenience, transparency, and value via digital innovation and a membershipstyle flat fee system that allows financially active account holders to maximize benefits while avoiding hidden costs. According to ProCredit Bank’s General Manager in Ukraine Viktor Ponomarenko, 2018 was the year when this vision took shape.

“2018 was one of our most successful years in terms of business growth and development,” says Ponomarenko. “This progress is not something that can necessarily be measured in numbers alone. It many ways, it was qualitative rather than quantitative in nature. The task we set ourselves was to align our private customer services with the expectations of our target audience.

We see the middle class segment as exactly where we aim to do business. This segment is growing, so we need to expand with it.

This means trying to understand what middle class customers need from a bank and

“Ukrainians are comfortable with innovation and tend to be rapid adopters of new technologies”

72

what kinds of services they will require in the years ahead. Our goal has been to anticipate this coming demand. We now feel we have a very strong offer in place.”

Catering to Ukraine’s middle classes primarily means shifting the bank’s business model towards digital banking services. Over the past year, ProCredit Bank has upgraded its e-banking platform and launched a highly popular app that remains a work in progress with additional functionality introduced throughout 2018.

Since January 2019, new customers have been able to open an account online without visiting a physical branch at all. These digital innovations have benefited from the bank’s membership of the Germanbased international ProCredit Group. This has enabled the Ukrainian division to make the most of existing e-banking technology best practices while adapting them to local market conditions, resulting in digital banking services that are both fully EU compliant and tailored to the requirements of the Ukrainian market.

Meanwhile, cost effectiveness comes thanks to a flat fee approach that offers obvious benefits to middle class clients who traditionally tend to be among the most active day-to-day users of banking services. “We believe this is the most transparent and competitive approach to the issue of banking fees, especially for those who perform transactions on a daily basis,” explains Ponomarenko. “It is commonplace in many Western markets but is not yet the industry standard in Ukraine. This means that it can sometimes take a little time for Ukrainian customers to become comfortwww.bunews.com.ua

able with the format. However, once they are better acquainted with this approach, they quickly recognize the advantages it brings.” One of the clearest indications that this fee formula is winning converts, he says, is the fact that the bank is increasingly attracting new private customers by word of mouth as friends and colleagues share their experience.

The move towards digital banking is enabling ProCredit Bank to reduce its physical branch presence throughout Ukraine, with the bank now down to just nine branches nationwide. Ponomarenko says that even this minimal presence is becoming increasingly redundant, but concedes that some customers do still favor faceto-face contact. Nevertheless, with fewer branches to maintain, this allows the bank to invest elsewhere and upgrade its online offer further. “The concept of physical branch networks is becoming outdated.

Branches will probably remain a feature for some time to come, but the good news is we are no longer depend on them in order to make our business grow. On the contrary, we are seeing a readiness to embrace the benefits of digital banking. This is particularly true when it comes to the middle class segment. We have found that our private banking customers are very quick to adapt to new ways of conducting their banking business.”

This adaptability is a prominent feature of today’s Ukraine. The pace of change in the country during recent years has helped to create a dynamic climate where Ukrainian consumers in general are more inclined to embrace innovation. According to Mastercard

banking

“Catering to Ukraine’s middle classes primarily means shifting the bank’s business model towards digital banking services” officials, Ukraine was the number four nation globally during Q4 2018 in terms of contactless payments, a statistic that underlines the country’s enthusiasm for new banking tools.

According to Ponomarenko, this strengthens the case for digital banking and offers a clear indication of where the Ukrainian industry will be in a few years from now. “The figures for contactless payments say a lot about Ukrainian attitudes towards technology. Ukrainians are comfortable with innovation and tend to be rapid adopters of new technologies. We have found with our own customers that people are very open to using new banking services. They also quickly become very demanding. Once you convince them that a certain new service is the right way to go, you can expect customers to press for even greater innovation.”

Ukrainian society’s aptitude for innovative banking tools appears to bode well for ProCredit Bank as it continues along the route towards greater digitalization of services. Ponomarenko feels vindicated by the response he has encountered so far to the bank’s online focus, but acknowledges that the challenge now is to remain at the cutting edge of a sector that is advancing in leaps and bounds. “We have a clear idea of where we want to be one year from now,” he says. “We will keep improving our service offer with things like additional functionality and security upgrades. It is clear to us that the customers of the future will demand a different kind of banking service. In fact, they are already demanding it. Our strategy is to introduce these services today so that tomorrow we find ourselves ahead of the competition.”

73

society

Kyiv not Kiev

The Guardian becomes latest media outlet to adopt Ukrainian spelling of country’s capital city

British newspaper The Guardian officially changed its editorial style guide in February and will now spell the Ukrainian capital “Kyiv” instead of “Kiev”.

The change is a small but sweet victory for the many Ukrainian officials and activists who have long lobbied international media to stop using the Soviet era “Kiev” and adopt the official post-independence “Kyiv” spelling, which reflects the name of the city in the Ukrainian language. The Guardian’s decision to adopt the “Kyiv” spelling comes following a recent campaign launched in October 2018 by Ukraine’s Foreign Ministry to encourage media outlets to change their position on the issue. “Ukraine has been an independent nation for more than 27 years but the Soviet-era versions of many geographic names persist in international practice. The continued use of Soviet-era place names rooted in the Russian language is unacceptable,” read a social media statement that accompanied the start of the initiative.

Ukraine itself made the switch to “Kyiv” in the early years of independence and most governments have officially adopted the Ukrainian spelling. However, the persistent use of “Kiev” by much of the English-language international media has remained a source of irritation in Ukraine, with many regarding it as a mark of disrespect towards a country that is struggling to emerge from the Soviet shadows and shake off historic associations with Russia. Critics of the “Kiev” spelling have traditionally rejected it as a Russian language version of the city’s name and therefore an unwelcome relic of tsarist and Soviet imperialism. They argue that unlike harmlessly Anglicized 74

versions of European place names such as Munich (Munchen), Prague (Praha), and Rome (Roma), the spelling of the Ukrainian capital has important political implications, making the change from “Kiev” to “Kyiv” more akin to the post-Colonial transition from “Bombay” to “Mumbai” or from “Ceylon” to “Sri Lanka”.

The adoption of Ukrainian place names and the renaming of towns, cities, streets and squares has been a constant feature of Ukraine’s post-Soviet nation-building process. This trend has accelerated significantly since the start of Russian hostilities in spring 2014 and the adoption of decommunization laws in 2015 that outlawed many Soviet-era names. Keys changes in recent years have included the removal of the country’s remaining Lenin monuments and the renaming of Dnipropetrovsk as Dnipro.

Since 1991, independent Ukraine has had mixed success in persuading international audiences to adopt modern Ukrainian names and spellings. The old habit of referring to “The Ukraine” is no longer as ubiquitous as it once was, but it remains fairly commonplace – especially among older generations including many Western political leaders, with American President Donald Trump a particularly prominent repeat offender. Elsewhere, “Lviv” is now almost universally preferred to “Lvov”, “Lwow”, “Lemberg” or ‘Leopolis” when referring to the cosmopolitan capital of western Ukraine, but the Ukrainian spelling for the country’s Black Sea port city “Odesa” has struggled to gain any traction against the far more internationally familiar “Odessa”. www.bunews.com.ua

What is the Business Ombudsman Council?

The Business Ombudsman Council is an independent advocate for businesses operating in Ukraine The BOC investigates complaints from businesses concerning improper

BOC’s services for businesses operating in Ukraine are free of charge

connected with tax inspections or procedural abuse on the part of law enforcers, it can turn to the BOC for help in resolving the situation.

What does the Council NOT do?

The Council is funded by 13 countries through a multi-donor account set up

interests. The Business Ombudsman also does not accept complaints about cases

practices at government agencies. For example, when a business faces problems

at the European Bank for Reconstruction and Development.

What does the Council do?

and all complainants received by the Council remain strictly confidential.

Importantly, the Business Ombudsman Council does not lobby businesses

that are currently going through the courts. Complaints against other private businesses are also not part of the BOC’s remit.

The BOC investigates cases brought to it by businesses, usually problems related

Who can seek help from the Business Ombudsman and when?

owned companies. The decision to support the complainants’ position or not

The Business Ombudsman can be contacted by any company or private

The Business Ombudsman Council is not an executive authority, since its

and local agencies, or state-owned and state-controlled companies.

to illegal actions or inaction on the part of government agencies and statewill be taken once an investigation has been conducted.

recommendations cannot be binding on government agencies. However, the BOC

entrepreneur operating in Ukraine and experiencing problems with state

can and does use the power of its reputation, professionalism and credibility: that’s

how the Council achieved 94% implementation rate for its recommendations by the

What has the BOC done for businesses so far?

end of 2018.

Although the Council also does not assess the quality of individual laws and

Since May 2015, the Business Ombudsman Council has received over

regulations, it does systematize problems and offer government agencies

5,000 complaints and helped Ukrainian businesses recover more than

UAH 13 billion. Since the start of operations, the BOC team has prepared

a package of recommendations for specific sectors of the economy. So far, the Business Ombudsman Council has published 13 sets of systemic recommendations for improving legislation.

more than 2,000 recommendations for government agencies. When surveyed, 97% of businesses said they were happy with the results of working with the BOC.

Contact us:

Follow us:

+38 044 237 74 01

@Business OmbudsmanUkraine

info@boi.org.ua

www.boi.org.ua

2018 at a glance 1792

Direct financial impact:

complaints received

UAH 2 billion

1439 cases closed

TOP-5 most active regions

complainants are 97% ofsatisfied with working

Kyiv

Kyiv Oblast

36% 7%

Kharkiv Oblast

with the BOC

94%

8%

of recommendations to state bodies are implemented

TOP-5 subjects of complaints

Odesa Oblast

7%

Tax issues

Dnipropetrovsk Oblast

10%

61%

Actions of law enforcement bodies

14%

Size of business

Actions of state regulators

27%

7%

Large companies

Actions of local councils

4%

3%

2

TOP-5 industries

29%

29%

Wholesale and Distribution

Manufacturing

13%

9%

Agriculture and Mining

Real Estate and Construction

Individual Entrepreneur

Small/Medium

Origin of investment

Ministry of Justice actions

7%

73%

Systemic reports issued

85%

15%

Ukrainian

Foreign companies

Ukraine’s new Turkish Ambassador meets business community

The Turkish business community hosted friends and partners at Kyiv’s InterContinental Hotel in February for a special dinner to welcome new Turkish Ambassador to Ukraine Yagmur Ahmet Guldere. The event, organized by Turkish-Ukrainian Business Association TUID, was attended by a number of ambassadors and representatives of international organizations as well as senior executives from the thriving Turkish business community, which has expanded rapidly in recent years as Turkey has emerged as one of the Ukraine’s key trade partners and leading foreign investors. Ukraine and Turkey hope to sign a free trade agreement in the coming months, paving the way for a further deepening of bilateral ties between the two Black Sea neighbors.

78

networking events

Ukraine and Austria Begin Bilateral Cultural Year In 2019, Ukraine and Austria are celebrating a bilateral Cultural Year. The official opening took place in Kyiv in late February and saw the launch of a website (austriaukraine2019.com) featuring details of coming cultural events set to take place throughout the year in both Ukraine and Austria. The Cultural Year initiative was inaugurated by Austrian Ambassador Hermine Poppeller together with the head of the public diplomacy department of the Ukrainian MFA Serhiy Ustymenko, director general of the Ukrainian Institute Volodymyr Sheiko, and director of the Austrian Cultural Forum in Kyiv Dr. Ulf Hausbrandt. www.bunews.com.ua

79

Exclusive Invitation Only Networking High Above the Kyiv Skyline In late February, prominent members of Ukraine’s international business community enjoyed an evening of executive networking accompanied by outstanding cocktails high above the dazzling cityscape of historical central Kyiv at the recently-opened

80

panoramic 11 Mirrors Rooftop Restaurant & World Class Bar. The evening marked the launch of Kyiv’s new Invitation Only executive networking event. Contact BigMeetUkraine for details of forthcoming events in the Ukrainian capital.

networking events

www.bunews.com.ua

81

and finally

A Tale of Two Airports

The diverging fates of Lviv and Donetsk airports mirror Ukraine’s post-2014 transformation

Western Ukraine’s booming Lviv International Airport almost doubled passenger numbers in 2018 while on the other side of the country Donetsk International Airport lay in ruins as the ultimate monument to the futile destructiveness of Putin’s Ukraine War Western Ukraine’s primary air gateway Lviv International Airport set the pace in 2018 among the country’s regional airports, posting a 48% year-on-year increase in passenger numbers. This trend has continued into 2019, with airport officials expecting a further 38% annual increase to reach a new high of 2.2 million passengers. These figures place Lviv firmly at the forefront of an aviation industry boom fueled by Ukraine’s post-2014 economic recovery, while also reflecting the city’s growing international appeal as a tourism and investment destination.

Lviv’s success is hardly surprising. The city’s proximity to the EU and distance from the conflict zone in eastern Ukraine (the city is considerably closer to Berlin, Prague and Vienna than it is to the frontlines in Donetsk and Luhansk regions) have helped make it a relatively attractive option for international investors. Today’s Lviv boasts a growing manufacturing sector and a thriving IT industry that benefits from the human capital of the city’s large student population. It is also enjoying increasing recognition as an international tourist destination, attracting more than two million visitors in 2018 thanks to a dynamic tourism industry centered on the cozy environs and renaissance splendor of Lviv’s historic city center. No wonder Lviv International Airport is setting record after record.

While the recent experience of Lviv’s air gateway reflects the progress made by the city since 2014, the absolute opposite is true of Donetsk International Airport. The diverging fates of the two airports illustrate the dramatic changes that have taken place in Ukraine since 2014. As the unofficial capitals of western and eastern Ukraine, Lviv and Donetsk both saw comprehensive airport overhauls as part of Ukraine’s prepa-

rations to co-host the UEFA Euro 2012 European football championship. These upgrades transformed Soviet-era airport infrastructure in both cities into modern facilities designed to serve as international calling cards for the new Ukraine. However, while Lviv airport has become one of the brighter aspects of Ukraine’s European integration efforts, Donetsk International Airport now lies in ruins and serves as a tragic symbol of the undeclared war between Russia and Ukraine.

Russian hybrid forces first seized Donetsk International Airport in late spring 2014 as part of the Kremlin-led takeover of the Donbas region that followed Moscow’s annexation of Crimea. Ukrainian troops counter-attacked successfully and were able to regain control of the airport, but it soon became a battleground. As a result, no commercial flights have landed in Donetsk since 26 May 2014. Instead, Donetsk International Airport emerged as one of the most fiercely contested objectives as fighting raged around the city, with the increasingly outgunned and outnumbered Ukrainian forces remaining in possession of the airport until late January 2015. During months of intense daily clashes, the dogged Ukrainian defenders earned the begrudging nickname “cyborgs” from their exasperated adversaries. By the time this epic defense ended, the entire airport complex lay in complete ruins.

It remains a wasteland today, stranded on the frontlines of a simmering conflict with no end in sight. The grim fate of Donetsk International Airport mirrors the tragedy of the wider Donbas region. Meanwhile, the success of Lviv airport offers a hint of the benefits Donetsk might have also enjoyed if the city had been able to embrace Ukraine’s European choice in 2014 rather than becoming a focal point of Russian aggression.

Letters to the editor: editor@bunews.com.ua Advertising inquiries: +38-067-4032762 Business Ukraine magazine is distributed every month free of charge at a wide range of leading business centres, embassies, international organizations, hotels and restaurants throughout Kyiv.

Registration: KV 15006-3978PR Published by: Open Borders Media Director: Susanna Dickinson

82

No reproduction, use or adaptation of contents, logos, titles or designs is permitted in any manner without the prior written consent of the publisher. The opinions expressed by individual authors and contributors each month in Business Ukraine magazine do not necessarily reflect the position of the publishers. The publishers of Business Ukraine do not accept legal responsibility for the goods and services advertised within the publication.

www.bunews.com.ua

imagine

VENUES

R OOMS

AD V ANT AG E S

30 meeting rooms 4000 sqm 2000 participants 20 themed menus

281 rooms 58 apartments

4 restaurants 24/7 bar

Pillow menu Ironing board

SPA Treatment Cinema Bowling

Multimedia equipment Wi-Fi covering

Personal event coordinator

+38 044 205 15 20

Room service Mini bar

info@encorekiev.com

24/7 gym Executive Lounge

ramadaencorekiev.com

dbihotels.com