Business Ukraine spring 2021 by Business Ukraine magazine

Spring 2021

GERMANY IN UKRAINE

BUSINESS UKRAINE MAGAZINE: SPRING 2021 This issue features a special focus on German-Ukrainian business ties. Germany is currently Ukraine’s No. 4 international trade partner with a bilateral trade turnover in 2020 of USD 7.2 billion. The prospects for further growth appear promising. With German companies looking to diversify post-COVID production and optimize supply lines, Ukraine is now positioning itself as Germany’s ideal nearshoring partner.

Vladimir Putin does not want peace with Ukraine When Volodymyr Zelenskyy won the Ukrainian presidency two years ago, his election owed much to promises of ending the country’s undeclared war with Russia. Many of Zelenskyy’s supporters hoped the charismatic comic and political outsider would be able to move beyond the hostility that had poisoned bilateral ties since 2014 and reach a negotiated settlement with Vladimir Putin. He certainly seemed to be cut out for such a role. In contrast to the vocal patriotism of his predecessor Petro Poroshenko, Zelenskyy had made a name for himself as a Russian-speaking Ukrainian celebrity with a following throughout the former USSR. He boasted a Kremlin-friendly record of repeatedly poking fun at the symbols of Ukrainian national identity throughout his comedy career. Prior to entering politics, many of Zelenskyy’s TV and movie projects had been geared primarily towards the lucrative Russian market, while he had personally spent a significant portion of his working life in Russia collaborating with Russian colleagues. In other words, Zelenskyy’s worldview and professional activities both appeared to confirm Kremlin claims regarding Ukraine’s natural place within the wider Russian World. This background makes Zelenskyy’s recent actions all the more surprising. In the first few months of 2021, the Ukrainian President has shut down three Kremlin-linked Ukrainian TV channels and slapped sanctions on Vladimir Putin’s closest Ukrainian ally, Viktor Medvedchuk. He has also targeted pro-Russian MPs within his own parliamentary party and adopted a noticeably more strident tone in his public declarations regarding Russian aggression and Ukraine’s Euro-Atlantic ambitions. What is behind Zelenskyy’s apparent transformation? The short answer is that he has belatedly recognized the futility of attempting to find common ground with the Kremlin. This was not for want of trying. During the first year-and-a-half of his presidency, Zelenskyy made numerous concessions to Moscow. These included the withdrawal of Ukrainian troops from key strategic positions along the front lines in eastern Ukraine and the introduction of measures restricting the Ukrainian military’s ability to respond to Russian attacks. Meanwhile, he consciously attempted to dial down tensions by employing ambiguous and euphemistic language to describe the conflict. This often meant avoiding any mention of Russia whatsoever. Russia chose not to respond in kind to these goodwill gestures. On the contrary, the Kremlin has taken a number of steps since Zelenskyy’s April 2019 election that make the prospect of peace significantly more unlikely. Russia has categorically rejected calls to revise the Minsk Accords and has repeatedly vetoed attempts to schedule a second Normandy Format summit of Ukrainian, Russian, German and French leaders to follow on from an initial Paris meeting in December 2019. In recent months, Moscow has also effectively blocked the work of the Trilateral Contact Group, which seeks to coordinate the details of a diplomatic solution to the conflict. Throughout this period, the Kremlin-controlled Russian media has maintained a relentless drumbeat of vicious anti-Ukrainian propaganda and disinformation. The single most egregious example of continuing Kremlin hostility has been Moscow’s decision to distribute Russian passports to Ukrainian citizens in

occupied eastern Ukraine. This policy, which was first unveiled in the days immediately following Zelenskyy’s election triumph, aims to transform the regions currently under Kremlin control into long-term Russian passport protectorates. By granting Russian citizenship to hundreds of thousands of local Ukrainian residents, Moscow has dramatically reduced the chances of ever returning these regions to full Ukrainian control. Russia’s actions have now succeeded in convincing Zelenskyy that his charm offensive is pointless and forced him to throw his full weight behind Ukraine’s Euro-Atlantic choice. He has learned a hard lesson that Vladimir Putin simply does not want peace with Ukraine. To many observers, Putin’s reluctance to reciprocate has come as no surprise. While Zelenskyy’s own personal interactions with the worlds of Russian business and politics may have led to an unfortunate degree of wishful thinking, there are a number of compelling reasons why the Kremlin strongman dare not end his campaign of aggression against Ukraine. Putin is well aware that if successful, Ukrainian democracy will prove highly contagious and could soon bring about the downfall of his own authoritarian regime. He remains haunted by the pro-democracy wave that swept through Soviet Central Europe in the late 1980s, and understands that Ukraine’s defection to the West could easily spark a similar process inside Russia itself. This was the key motivation behind Putin’s decision to use force in 2014, and it remains the main obstacle to peace. Reaching a settlement with Ukraine would also entail withdrawing the illicit but considerable Russian military presence from the east of the country. After years of blanket denials, this retreat would expose the scale of Russia’s secret war and shatter what remains of the Kremlin’s international credibility. Once the Ukrainian authorities and international community were able to access the formerly occupied regions of eastern Ukraine, Moscow would likely find itself accused of war crimes and forced to answer all manner of awkward questions. Over the past two years, the failure of Zelenskyy’s peace efforts has dispelled any lingering illusions over the possibility of compromising with the Kremlin. Instead, it has forced Ukraine and the country’s international partners to accept the inevitability of a protracted confrontation. There is a certain irony to this state of affairs. When he was first elected, Zelenskyy’s critics feared his alleged pro-Russian sympathies would lead to a disastrous reconciliation with Russia on the Kremlin’s terms. Instead, Zelenskyy himself has been obliged to acknowledge that Russia is an implacable enemy. Far from returning Ukraine to the Russian sphere of influence, his presidency looks set to confirm the finality of the geopolitical divorce between the two countries. Peter Dickinson Publisher Business Ukraine magazine

investment promotion

INTRODUCING THE NEW UKEF 2.5 BILLION GBP CREDIT FACILITY FOR BRITISH-UKRAINIAN TRADE AND RELATED INVESTMENT The UK initiated a huge 2.5 billion GBP credit facility (“Credit Facility”) for trade and related investment with Ukraine on 8 October 2020, in conjunction with the new Agreement on Political Cooperation, Free Trade and Strategic Partnership between Ukraine and the UK. This Credit Facility is managed by UK Export Finance (UKEF). It constitutes the greatest recent development to finance foreign trade and investment with Ukraine. This article summarises the highlights of the BUCC’s Webinar on this Credit Facility held on 23 February, 2021, to explain how UK and Ukrainian exporters and importers can benefit from it in practice. To begin with, through this Credit Facility, Ukrainian importers and British exporters can access funding in varying amounts for very long terms (up to 10 to 18 years, depending on the activity involved) at very reasonable interest rates. For amounts under GBP 5 million, loans to Ukrainian importers and British exporters can be agreed directly through authorized Ukrainian and UK banks that have agreements for such lending to be guaranteed by UKEF. Up to 85% of the cost for a transaction or project can be so financed. The types of expenses that can be covered are very broad, and can include not just exports of goods and services, but also product development, working capital and other associated expenses. While investment in a project per se is not covered, it can effectively be UKEF financed in connection with exports of goods and/or services for the project. UKEF can be very innovative, so it is possible to structure a variety of types of project financings and other transactions using UKEF finance. WHAT IS UKEF UKEF is the operating name of the British government’s Export Credits Guarantee Department. It is regularly rated as one of the world’s best export credit agencies. UKEF can enhance the credit worthiness of transactions and projects by using the very high UK sovereign credit rating as the basis for on-lending, and the giving of guarantees to banks that lend, to the Ukrainian

buyers of British exports, as well as to the British exporters. By cutting the risk for exporters and for the banks providing finance, transactions for Ukraine that have previously been impossible can now be undertaken. For example, most production equipment can now be imported and paid for over the life of the equipment, with the exporter being paid immediately by UKEF, that is then repaid over time. The UK can thereby meet the needs for most Ukrainian trade and projects, as the world’s ninth largest manufacturer and a world leader, in particular, in advanced manufacturing, advanced aerospace, automotive, rail and marine design and engineering, and other engineering of all sorts, infrastructure, architectural design, ship-building, transport in general, advanced materials, vaccines and pharmaceuticals, and many other sectors. With minimum required UK content of only 20%, UKEF funding can usually be used to finance related goods and services involved in a transaction or project that are coming from Ukraine and other countries. UKEF does not aim to compete with the private sector, but rather to fill in the gaps where the private sector cannot lend, which for Ukraine is especially problematic due to the perceived country risk. It can often be impossible in Ukraine to obtain long-term finance. DESIRABLE SECTORS The Export Facility’s credits are allocated on a “first come – first served” basis. While UKEF can consider lending for most types of transactions and projects, UKEF is especially interested in supporting the following areas in Ukraine: 1) Agriculture and Aquaculture; 2) Transport Infrastructure and Construction, including for hospitals, bridges, green buildings, clean transportation, sustainable water and wastewater management; 3) Renewable Energy Industries, such as onshore and offshore wind, solar, green and low carbon technology, electric vehicles,

The London Stock Exchange Group welcomes Ukrainian President Volodymyr Zelenskyy during his October 2020 visit to the UK that saw the signing of a new Agreement on Political Cooperation, Free Trade and Strategic Partnership between Ukraine and the UK (Photo: president.gov.ua) hydrogen energy and the civil nuclear sector; 4) Health Care, including for the supply of vaccines and other pharmaceuticals; 5) Civil Aerospace and Aircraft; 6) Mining (but not for oil, gas and coal); 7) IT in all forms, including agritech, fintech, medical technology, educational technology, the Internet of Things, artificial intelligence, gaming, etc; and 8) Defence and Security, including to provide equipment for the Ukrainian Army, Navy and Air Force. PROJECT STRUCTURES UKEF can flexibly work with a variety of different structures for private and public buyers. In addition to the usual loans and guarantees, transactions and projects can be structured using project finance with limited recourse, public private partnerships (“PPPs”), capital market transactions, refinancing, and many other forms for transactions. ELIGIBILITY CRITERIA While past UKEF deals have financed transactions with a value of up to GBP 1.2 billion for large companies, the majority of UKEF’s financings has been to support small and medium-sized enterprises (“SMEs”). The following criteria apply: 1) Minimum 20% UK Content. A great variety of goods and services produced in the UK by UK or foreign-owned companies can count to satisfy the requirement for a minimum of 20% UK content, including even legal and

accounting services and intangible assets. 2) Period for Repayment. The term must be at least 2 years, with 10 years being typical for long-term projects, though depending on the activity involved, the term can go up to 18 years, for example for water and renewable energy projects. 3) Borrower Status. In principle, a borrower must have a creditworthy record, with three years of audited accounts, though exceptions can be made depending upon the situation. 4) Bank. The bank involved must be acceptable to UKEF, which has a panel of approved partner banks in the UK and Ukraine to arrange and administer loans on UKEF’s behalf or with UKEF’s support. 5) UKEF Premium. Minimum risk standards must be met for transactions. UKEF charges a premium for the risk they take, determined on case-by-case basis. 6) Ethical Compliance, based on an assessment of environmental, social and human rights impacts as well as for bribery and corruption risks. Authors: Bate C Toms - Managing Partner, B. C. Toms & Co, and Chair, BUCC; and Maria Atamaniuk - Projects Manager, B. C. Toms & Co, and Managing Director, BUCC LLC. HOW TO APPLY To find out more or to discuss a project with the UKEF team, please email UKEF: customer.service@ukexportfinance.gov.uk

UKRAINE IS INCREASINGLY PREPARED TO WELCOME AND ASSIST NEW INVESTORS The UK’s new GBP 2.5 billion credit facility managed by UK Export Finance (UKEF) (as described on pages 6-7) should greatly stimulate Ukrainian economic development. For example, it could be used for the acquisition of capital goods from the UK to implement investment projects in Ukraine. In this article, the British-Ukrainian Chamber of Commerce (BUCC) and UkraineInvest, the Ukrainian state institution responsible for attraction and support of foreign investment and related trade, highlight new important Ukrainian measures to assist investors in Ukraine, which should facilitate the use of the new UKEF credit facility.

1. Investment Support Initiatives The initiatives described below, together with the greatly expanded Ukrainian privatization program, the increasing use of public-private partnerships and other measures, are further improving the investment climate in Ukraine.

Investment Projects with Significant Investments On 10 February 2021, the Law of Ukraine “On State Support for Investment Projects with Significant Investments” No. 1116-ІХ, dated 17 December 2020 (the “Investments Law”) was signed. It provides that agreements for state support for up to 15 years can be concluded with “investors with significant investments”, including to provide for special tax exemptions, exemptions from import duties on equipment, preemptive land use rights and land plot purchases upon the expiry of a special investment agreement, construction of related infrastructure facilities, assistance with connections to utilities, etc. To qualify as a significant investor, the amount to be invested must total at least EUR 20 million, for which the amount of Ukrainian state support, tax relief and other such assistance can constitute up to 30% of the planned investment amount. The implementation period for an investment project may not exceed five years. Recently, UkraineInvest has been authorized by the Government to become the institution responsible for supporting investment projects with significant investment under the Investments Law.

Decentralization and Regional Development The Ukrainian Government’s decentralization reform, which began in 2014, has helped to transform Ukraine’s regions, handing over control regarding many economic and administrative matters to local authorities. As a result, the budgets of local authorities in Ukraine have almost doubled between 2015 and 2018, so that 60% of their tax receipts remain in the localities, which allows each region’s agency for attracting investors to do more to facilitate foreign investment. After this decentralization, local authorities have understood the importance of investment for regional budgets, as, inter alia, investments stimulate economic growth, the creation of jobs and increased tax revenues.

2. Ukraine as a Principal Manufacturing Hub for the UK and Europe Ukraine is now a principal destination for the UK and other European companies to relocate their manufacturing facilities from Asia so that they can be much more easily monitored due to improved proximity to European management. The UK imported USD 164 billion worth of goods from Asia in 2020, and this amount is presently expected to continue to rapidly increase annually. However, usually it takes over 30 days to deliver goods from Asia to Europe, which requires costly spending on logistics and remote management. Instead, British companies could use the new UKEF facility to help relocate production facilities for goods to Ukraine, in particular for electronics and technology, vehicles, chemicals, furniture, toys and sports equipment, metalworking, light industry, glass, ceramics and stone. Ukraine should be an important industrial and manufacturing hub for British and other European businesses, benefitting from the experience and skills of Ukraine’s workforce, Ukraine’s close location, its abundant natural resources and other advantages.

For further information, please contact the BUCC at buccukraine@bucc.com.ua and UkraineInvest at info@ukraineinvest.gov.ua

legal sector focus

Legal Industry Review The Ukrainian legal services industry faced a range of novel challenges in 2020 due to the global pandemic. Law firms proved largely equal to the task, adapting quickly to coronavirus-related everyday restrictions and responding creatively to new market conditions

About the author: Oleksiy Nasadyuk is the head of the Top 50 Leading Law Firms in Ukraine annual research program Throughout the past year, the Ukrainian legal services industry has been dominated by the repercussions of the coronavirus crisis. As with virtually every other sector of the Ukrainian economy, legal service providers have had to reckon with the entirely novel and at times unpredictable business climate created by the global pandemic. With revenue flows under pressure and ordinary work patterns no 10

longer necessarily practical, Ukrainian law firms have been forced to seek out creative and competitive responses to the crisis conditions. This made 2020 something akin to a stress test for the country’s legal services industry. The agility and durability of individual law firms was put to the test, as was the strength of relationships with both clients and employees. On the whole, Ukraine’s legal services providers proved more than a match for these challenges, with the ample expe- : www.bunews.com.ua

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legal sector focus

Legal Industry Commentary Rustam Kolesnik Chief Editor of Yuridicheskaya Praktika publishing house The good news is that the Ukrainian legal services market avoided a total collapse in 2020, despite widespread fears in the second quarter of the year following the initial introduction of lockdown regulations. However, it must be noted that this owes much to the long-term budgetary commitments made by major corporate clients prior to the coronavirus crisis. The bad news is that there appears to be less money allocated for legal services in this year’s budgets. With no end in sight to pandemic-related disruption to the business climate, 2021 is going to be a challenging period. At the same time, 2020 taught legal services professionals the value of making rapid management decisions, repositioning practices, and remaining sensitive to new developments. These skills will be in high demand during the present year and could prove decisive in terms of maintaining and strengthening market positions.

: rience of prior crises equipping them with the skills and mentality to navigate the challenges created by COVID-19. Due the coronavirus conditions and restrictions this has placed on the Ukrainian economy since spring 2020, the legal services market has witnessed an inevitable decline in transactional work. At the same time, dispute resolution has come to the fore, including arbitration and criminal law. However, there have also been pandemic-related practical problems to contend with. For example, some courts initially ceased to operate due to lockdown limitations, creating major backlogs. Due to the complex impact of the pandemic on employment norms, demand for legal consultations relating to Ukrainian labor laws grew considerably during 2020. With many companies looking to temporarily downsize or otherwise restructure their teams, there has been a sharp rise in requests for legal guidance on these topics. Much has certainly changed in the way law firms go about their day-to-day work, with some of the changes leading to surprising discoveries. The past year has demonstrated that it is not actually necessary to spend every day in the office in order to provide clients with quality legal services. This triumph of distance working has been one of the success stories of the coronavirus crisis in the Ukrainian legal services sector, much as it has been elsewhere. The picture is not quite as rosy in terms of mentoring and team building, but even in this sphere, the situation is far from hopeless. Ukrainian law firms have adapted relatively well to travel restrictions, with Zoom and other platforms serving to partially replace face-to-face meetings and business trips. At present, most people within the industry expect the current restricted work mode to remain more or less in place for an extended period, possibly beyond the end of 2021. If and when Ukraine returns to something approaching pre-coronavirus conditions, certain elements of the new business etiquette look set to remain. This is likely to raise questions over the need for large office space and the possibility of working to more flexible schedules. Inevitably, legal services industry revenues fell during the first three 12

quarters of 2020. Total income for the top 50 leading law firms in Ukraine as featured in Yuridicheskaya Praktika’s annual survey for the twelve-month period from October 2019 to September 2020 was UAH 6.02 billion. This represented a 7.5% year-on-year decrease and was comparable to the figure for the same period in 2016-17. The main revenue drivers within the Ukrainian legal services sector included dispute resolution and international arbitration. Meanwhile, the banking and financial sector was also a key business engine for the industry, accounting for 16.7% of overall revenues. The client portfolios of Ukrainian law firms in 2020 mirrored key trends taking place in the wider Ukrainian economy. The banking sector remained the main employer of legal services, accounting for 16.7% of the overall market. In second place was the energy sector with 9.9%. Given the turbulence surrounding the Ukrainian government’s ongoing negotiations with renewable energy investors over previously agreed feed-in tariffs, this prominence comes as no surprise. Close behind energy was the agriculture and food industry, with a 9.4% market share that reflected the growing importance of agribusiness to Ukraine’s export balance sheet and overall economy. Next after agriculture was IT and e-commerce, which accounted for 7.9%. This is also very much in line with market trends. IT has consistently been the standout growth sector of the Ukrainian economy throughout the past decade, while e-commerce enjoyed a year of record growth as coronavirus lockdown conditions forced tens of millions of Ukrainians to embrace online shopping. Generally speaking, the mood throughout the legal sector in spring 2021 remains relately upbeat. Despite the many pessimistic forecasts the could be heard one year ago, most Ukrainian law firms were able to restructure their work and continue operating at close to optimum levels despite the unique challenges of the COVID-19 crisis. While clients in a wide range of economic sectors also experienced similar turbulence, overall workloads remained relatively high. In the very specific context of an unprecedented global pandemic, it is reasonable to consider 2020 a comparatively successful year for Ukraine’s crisis-resistant legal services industry. www.bunews.com.ua

legal sector focus 14

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legal sector focus 16

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A Proposed Rule of Law Solution to Protect Investors in Ukrainian Courts Create a Ukrainian Judicial Ombudsman and Encourage New Investment for Ukraine The British Ukrainian Chamber of Commerce (“BUCC”) seeks to solve the most important rule of law problems in Ukrainian courts, in particular to protect existing investors and encourage new investment, by proposing the creation of a Ukrainian judicial ombudsman. So far, the various initiatives for court reform in Ukraine have largely failed. There are an increasing number of clearly wrongful decisions by Ukrainian courts when investors seek to defend their interests against raiders and other fraudsters, which is a principal impediment against further investment. It is time for a different approach. The Proposed Judicial Ombudsman What is needed is true systemic reform that addresses the content of judicial decisions affecting litigants. The BUCC’s proposed solution is to create a Ukrainian judicial ombudsman (also called a “legal ombudsman”) to respond to the critical problem facilitating corrupt court decisions in Ukraine, which is the total absence of any independent systematic outside oversight over what courts actually do, i.e. of the quality of their decisions. The judicial ombudsman is a “silver bullet” solution that should be relatively simple to implement and that would fundamentally improve the Ukrainian judicial system. By creating a judicial ombudsman, similar to that first used in Sweden, to review decisions that are claimed to not be properly based on applicable law, litigants would be protected from much of the corruption apparently used by raiders and others to dispossess investors in Ukraine, that has resulted in so many bilateral investment treaty (“BIT”) arbitrations over clearly wrongful Ukrainian court decisions. In the early 1900s, Swedish courts were also perceived as being among the most corrupt in Europe, but Sweden’s creation of a judicial ombudsman put their courts onto a completely different course. Ukraine has the potential now to develop, as Sweden has, into a model country, both for commerce and for justice, which are, of course, linked. Under Ukrainian BITs, the standard that is generally applied is whether a court decision constitutes a “denial of justice” (i.e. where a court fails to observe its duty to decide a case in accordance with law, and instead renders a decision for which there is no reasonable legal basis). The proposed judicial ombudsman would apply this standard to decisions by judges, including by applying the Ukrainian judicial oath of office under Article 126 of the Constitution based on which a judge may be dismissed for failing to “objectively, impersonally, impartially, independently and fairly administer justice, complying only with the law, to honestly and faithfully perform the duties of a judge”. The proposed ombudsman should be able to: (1) send any decision determined to constitute a denial of justice, at any judicial level, back for reconsideration by different judges at the same court level, and (2) recommend that the judges who adopted the denial of justice decision be investigated and possibly lustrated for cause (i.e. for breach of their oath of office). The proposed ombudsman would therefore provide for relatively quick review at any judicial level. The ombudsman would not

act like another court to decide cases – but rather would provide an independent outside review of the legal basis for a judgment and where the judgment clearly lacks any proper legal basis, a common problem in Ukrainian courts, the ombudsman would send the case back for a rehearing. For this proposal to work, the ombudsman needs to be someone universally respected as being both incorruptible and having the highest level of legal expertise and competence. As for the Ukrainian Business Ombudsman, the appointee might be an eminent foreign legal authority (like the former judges and other legal experts typically appointed to BIT arbitration tribunals), which should help, in particular, to restore foreign investor confidence in Ukrainian courts. (The ombudsman’s office would also assist the ombudsman with an independent staff of Ukrainian legal experts.) Benefits to Investors For most investors, a full BIT arbitration process takes much too long to protect their investment, and also costs too much, usually many millions of US dollars. Typically, even where eventually, after five to seven years or longer, a denial of justice is found in a BIT case, it is too late for the investor to recover its business or property, so the investor can only obtain a monetary award for damages. It is also ordinarily then too late for the authorities to address the judges’ earlier improper behaviour and improve the judiciary. The proposed judicial ombudsman could thus review decisions in time to save a litigant’s property before it is sold on or otherwise destroyed in value pursuant to a wrongful court decision. The ombudsman’s decision would function, in effect, as a review to safeguard the litigant’s legal position and to secure its business and property pending a rehearing. This would allow new judges to then review the case in detail and the legal problems identified by the ombudsman in order to render a lawful decision. Investors would thereby be able to rely on the ombudsman to protect their business and property interests from being quickly taken through improper court action. Conclusion – this Initiative Will Greatly Increase Investment Ukraine needs systemic reform to address the lack of any independent outside oversight of the Ukrainian judiciary in order to quickly remedy the denial of justice court decisions that currently often result from corruption – i.e. reform that focuses on what courts actually do in cases, and responds to denials of justice for actual litigants in reality, rather than only in theory. The proposed judicial ombudsman should address this need by timely blocking wrongful court decisions from effectively dispossessing investors and others of property without any genuine legal basis, and thereby greatly benefit Ukraine by providing the foundation for a great increase in investment into Ukraine. Author: Bate C. Toms*

*Chairman of the BUCC; Managing Partner of Law Offices B C Toms & Co, Kyiv and London; JD Yale Law School. Mr. Toms has over 30 years of experience assisting to bring investment into Ukraine, and also to defend investors and their property in Ukrainian and foreign litigation as well as BITs arbitrations, including by obtaining the largest ever award for a dispossessed investor in a Ukrainian BIT case, at the Permanent Court of Justice at The Hague.

Top 50 Ukrainian Law Firms

LAW FIRM

ASTERS

NUMBER OF LAWYERS

RANKING

Ukraine’s top 50 leading law firms for 2020: Business Ukraine magazine presents the official English-language version of the annual Yuridicheskaya Praktika legal industry rating

SAYENKO KHARENKO

Litigation, International Arbitration, Banking & Finance, Competition, Criminal Law / White Collar Crime, Business Protection, Corporate, Energy, M&A, Family Law, Real Estate & Land , Intellectual Property, Labor & Employment, Capital Markets, Financial Restructuring, Tax, International Trade & WTO Rules, ADR

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

Banking & Finance, Litigation, M&A, Corporate, Competition, Criminal Law / White Collar Crime, Labor & Employment, Tax, International Arbitration, Intellectual Property, International Trade & WTO Rules, Capital Markets, Business Protection, Compliance, Real Estate & Land , Financial Restructuring, Private Clients, Bankruptcy, PPP & GR

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

Litigation, Bankruptcy, Corporate, International Trade & WTO Rules, Business Protection, Labor & Employment, Criminal Law / White Collar Crime, Intellectual Property, Competition, Banking & Finance, M&A, Compliance, Tax, Real Estate & Land , International Arbitration, PPP & GR

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

Litigation, International Arbitration, Intellectual Property, Competition, M&A, Banking & Finance, Corporate, Tax, Real Estate & Land , Private Clients, Capital Markets, Financial Restructuring, Infrastructure & Logistics, Business Protection, Labor & Employment, Transportation, International Trade & WTO Rules, PPP & GR

Senator Business Center, 32/2 Moskovska Street, Kyiv, 01010 Tel.: (044) 490-91-00 office@aequo.ua www.aequo.ua

Litigation, Criminal Law / White Collar Crime, Bankruptcy, Business Protection, Banking & Finance, Financial Restructuring, Private Clients, Enforcement, Tax, Real Estate & Land , PPP & GR, Corporate, International Arbitration, Competition

4 Rylskiy Lane, Kyiv, 01001 Tel.: (044) 277-22-22 info@equity.law equity.law

Litigation, Banking & Finance, Criminal Law / White Collar Crime, Corporate, Tax, Financial Restructuring, M&A, Compliance, Labor & Employment, Bankruptcy

19B Instytutska Street, Kyiv, 01021 Tel.: (044) 581-12-20 info@golaw.ua www.golaw.ua

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

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

Regulatory, Litigation, Business Protection, Tax, Corporate, Intellectual Property, International Arbitration, Banking & Finance, Labor & Employment, Real Estate & Land , Bankruptcy, Compliance

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

Litigation, Bankruptcy, Banking & Finance, Financial Restructuring, Corporate, Tax, International Arbitration, Intellectual Property, Infrastructure & Logistics, Private Clients, Real Estate & Land

47 Volodymyrska Street, Office 3, Kyiv, 01001 Tel.: (044) 455-88-87 info@lcf.ua www.lcf.ua

Michael Kharenko partner

ILYASHEV & PARTNERS Mikhail Ilyashev managing partner

AEQUO Denis Lysenko managing partner

EQUITY Viktor Barsuk senior partner

GOLAW Valentyn Gvozdiy managing partner

BAKER MCKENZIE Serhiy Chorny managing partner

Serhiy Piontkovsky managing partner 8

ARZINGER

Timur Bondaryev managing partner

LCF LAW GROUP Anna Ogrenchuk managing partner

CONTACT DETAILS

139

Oleksiy Didkovskiy co-managing partner Serhii Sviriba co-managing partner Armen Khachaturyan senior partner 2

PRACTICE AREAS

NUMBER OF LAWYERS

RANKING

AVELLUM

ETERNA LAW

Banking & Finance, M&A, Tax, Litigation, Corporate, Capital Markets, Private Clients, Competition, Energy, Real Estate & Land , International Arbitration, Labor & Employment, Infrastructure & Logistics, International Trade & WTO Rules, Family Law, Financial Restructuring

38 Volodymyrska Street, Kyiv, 01033 Tel.: (044) 591-33-55 info@avellum.com avellum.com

Corporate, International Arbitration, Litigation, Transportation (Aviation), Tax, Banking & Finance, M&A, Labor & Employment, Infrastructure & Logistics, Intellectual Property, Real Estate & Land , Financial Restructuring, Competition, International Trade & WTO Rules, Bankruptcy, Business Protection, Enforcement, PPP & GR

1-А Sportyvna Sq., 32th Floor, Gulliver Business Center, Kyiv, 01601 Tel.: (044) 490-70-01 office.kyiv@eterna.law eterna.law

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

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

Criminal Law / White Collar Crime, Business Protection, Litigation

2 Khrestovyi Alley, Kyiv, 01010 Tel.: (044) 300-11-51 info@averlex.com www.averlex.com

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

41 Naberezhno-Khreshchatytska Street, 9th floor, Kyiv, 04070 Tel.: (044) 494-47-74 kyiv@dentons.com dentons.com

Litigation, M&A, International Arbitration, Labor & Employment, Banking & Finance, Corporate, Tax, Competition, Criminal Law / White Collar Crime, Intellectual Property

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

Real Estate & Land , Litigation, Business Protection, Tax, Corporate, Mediation, Banking & Finance, Criminal Law / White Collar Crime, Labor & Employment, Financial Restructuring, Bankruptcy, M&A, Intellectual Property, Compliance, , Transportation (Aviation), Private Clients, Family Law

16 Mikhaylivska Street, Kyiv, 01001 Tel.: (044) 581-15-51 office@gramatskiy.com www.gramatskiy.com

Litigation, Bankruptcy, Banking & Finance, Business Protection, Criminal Law / White Collar Crime, Corporate, Private Clients, Real Estate & Land

11 Shota Rustaveli Street, Kyiv, 01001 Tel.: (044) 235-88-77 office@abp.kiev.ua www.abp.kiev.ua

Litigation, Corporate, Tax, Real Estate & Land , Labor & Employment, M&A, Intellectual Property, Criminal Law / White Collar Crime, PPP & GR

22 Shovkovychna Street, Suite 3, Kyiv, 01024 Tel.: (050) 339-23-07 office@ilf-ua.com ilf-ua.com

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

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

Bankruptcy, Litigation, Corporate, Criminal Law / White Collar Crime, Business Protection, Financial Restructuring, Family Law, Tax

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

Council of Partners

CMS

CONTACT DETAILS

Mykola Stetsenko managing partner 11

PRACTICE AREAS

Graham Conlon managing partner CMS Cameron McKenna Nabarro Olswang

legal sector focus

LAW FIRM

Johannes Trenkwalder managing partner CMS Reich-Rohrwig Hainz 13

AVER LEX Olga Prosyanyuk managing partner

DENTONS Oleg Batyuk managing partner

EVERLEGAL Yevheniy Deyneko managing partner

GRAMATSKIY & PARTNERS Ernest Gramatskiy president

ALEKSEEV, BOYARCHUKOV & PARTNERS Sergey Boyarchukov managing partner

ILF Tetyana Gavrysh managing partner

MORIS Andriy Romanchuk managing partner

L.I.GROUP Mykola Kovalchuk senior partner Artur Megerya senior partner

www.bunews.com.ua

: 19

LAW FIRM

VASIL KISIL & PARTNERS

NUMBER OF LAWYERS

RANKING

DLA PIPER UKRAINE

Litigation, Corporate, M&A, Criminal Law / White Collar Crime, Intellectual Property, Labor & Employment, International Arbitration, Banking & Finance, Tax, Real Estate & Land , Transportation, Private Clients, Family Law, Competition

17/52A Bohdana Khmelnytskoho Street, Kyiv, 01030 Tel.: (044) 581-77-77 vkp@vkp.ua www.vkp.ua

Tax, Litigation, Corporate, Labor & Employment, Intellectual Property, Banking & Finance, M&A, Competition, Criminal Law / White Collar Crime, Real Estate & Land , Infrastructure & Logistics, Financial Restructuring, Transportation (Aviation), Compliance, Private Clients, Bankruptcy, Business Protection, Enforcement

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

Tax, Corporate, M&A, Compliance, Litigation, Real Estate & Land , Private Clients, Banking & Finance, International Arbitration, Intellectual Property, Labor & Employment, Privatization

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

Litigation, Banking & Finance, International Arbitration, Real Estate & Land , Competition, Corporate, M&A, Criminal Law / White Collar Crime, Intellectual Property, Bankruptcy

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

Litigation, Corporate, Real Estate & Land, International Arbitration, Tax, Competition, Banking & Finance, M&A, Energy

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

Litigation, Banking & Finance, M&A, Competition, Corporate, Intellectual Property, Capital Markets, Tax, Real Estate & Land , International Arbitration, Financial Restructuring

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

Litigation, Banking & Finance, Tax, Real Estate & Land , Private Clients, Labor & Employment, Business Protection, Enforcement, PPP & GR, Corporate, Criminal Law / White Collar Crime, Financial Restructuring, Bankruptcy, M&A, Compliance, Family Law, Competition

7 Klovsky Uzviz, Office 22, Kyiv, 01021 Tel.: (044) 280-88-87 office@aderhaber.com aderhaber.com

Litigation, Banking & Finance, Criminal Law / White Collar Crime, Labor & Employment, Real Estate & Land , International Arbitration, Competition, Business Protection, Private Clients, Intellectual Property

12 Khreschatyk Street, Kyiv, 01001 Tel.: (044) 591-31-00 salkom@salkom.kiev.ua salkom.ua

Tax, Corporate, Litigation, M&A, Criminal Law / White Collar Crime, Intellectual Property, Compliance, Labor & Employment, Real Estate & Land, Infrastructure & Logistics, International Trade & WTO Rules, Business Protection, PPP & GR, Private Clients

5А Peremohy Avenue, office 500, Kyiv, 01135 Tel.: (044) 238-09-44 office.ua@euconlaw.com www.euconlaw.com

Tax, M&A, Corporate, PPP & GR, Private Clients, Litigation, Labor & Employment, Financial Restructuring, Competition, Banking & Finance, Intellectual Property, Infrastructure & Logistics

19A Khreschatyk Street, Kyiv, 01001 Tel.: (044) 490-30-00 kyiv@ua.ey.com ey.com/ukraine

Intellectual Property, Business Protection, Corporate, Litigation, Criminal Law / White Collar Crime, PPP & GR, Compliance, Capital Markets, Tax, Transportation (Aviation), Infrastructure & Logistics, Private Clients, M&A, Labor & Employment, Real Estate & Land

35 Olesya Honchara Street, Kyiv, 01034 Tel.: (044) 359-08-96 office@juscutum.com juscutum.com

Litigation, Private Clients, Criminal Law / White Collar Crime, Business Protection, Tax, Compliance

9 French Boulevard, Office 10, Odesa, 65012 Tel.: (098) 589-47-10 info@barristers.org.ua barristers.org.ua

Margarita Karpenko managing partner

KPMG LAW UKRAINE Sergey Popov partner

INTEGRITES Oleksiy Feliv managing partner

ANTIKA LAW FIRM Alexey Kot managing partner

REDCLIFFE PARTNERS Olexiy Soshenko managing partner

ADER HABER Yuriy Petrenko managing partner

SALKOM Eduard Tregubov managing partner

EUCON LEGAL GROUP Yaroslav Romanchuk managing partner

CONTACT DETAILS

Andriy Stelmashchuk managing partner 22

PRACTICE AREAS

Vladimir Kotenko partner Borys Lobovyk partner 31

JUSCUTUM Artem Afian managing partner

BARRISTERS Oleksii Shevchuk partner

NUMBER OF LAWYERS

DOUBINSKY & OSHAROVA

Intellectual Property

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

Litigation, International Arbitration, Energy, Banking & Finance, Corporate, Competition, Criminal Law / White Collar Crime, M&A, Compliance, Real Estate & Land , Infrastructure & Logistics, Labor & Employment

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

Litigation, Criminal Law / White Collar Crime, Tax, M&A, Banking & Finance, Corporate, Business Protection, Financial Restructuring, International Arbitration, Bankruptcy

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

Intellectual Property, Litigation, Corporate, Private Clients, Competition, Business Protection

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

Tax, Litigation, Criminal Law / White Collar Crime, Labor & Employment, Corporate, M&A, Intellectual Property, Compliance, Real Estate & Land , Competition, Business Protection, International Arbitration, Private Clients

5 Pankivska Street, Kyiv, 01033 Tel.: (044) 490-71-97 admin@kmp.ua www.wts.ua, www.kmp.ua

Litigation, Corporate, Tax, Real Estate & Land , Financial Restructuring, Private Clients, Bankruptcy, Business Protection, PPP & GR

36-D Yevhena Konovaltsia Street, 5th floor, Kyiv, 01133 Tel.: (044) 277-24-47 office@hillmont.com.ua hillmont.com.ua

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

14 Kaplunivski Lane, Kharkiv, 61002 Tel.: (057) 720-90-01 office@shkrebets.com shkrebets.com

Criminal Law / White Collar Crime, Litigation, Business Protection, Private Clients, International Arbitration, Tax

22 Rybalska Street, Kyiv, 01011 Tel.: (044) 581-16-33 office@vbpartners.ua vbpartners.ua

Litigation, Criminal Law / White Collar Crime, Tax, Financial Restructuring, Bankruptcy, Corporate, M&A, Intellectual Property, Compliance, Labor & Employment, Business Protection, Family Law

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

Litigation, Corporate, Business Protection, PPP & GR, M&A, Banking & Finance, Tax, Competition, Capital Markets, Real Estate & Land , Private Clients, Intellectual Property, Compliance, Labor & Employment, Financial Restructuring, Transportation, Infrastructure & Logistics, Family Law, Bankruptcy, Enforcement

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

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

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

Maritime & Shyping, Litigation, Criminal Law / White Collar Crime, Tax, Business Protection, PPP & GR, Infrastructure & Logistics, Private Clients

9 Lanzheronivska Street, Suite 17, Odesa, 65026 Tel.: (048) 234-87-16 office@ank.odessa.ua ank.odessa.ua

RANKING 33

PRACTICE AREAS

Michael Doubinsky managing partner 34

KINSTELLAR Olena Kuchynska managing partner

DYNASTY LAW & INVESTMENT Denys Myrgorodsky managing partner

PAKHARENKO & PARTNERS Antonina Pakharenko-Anderson managing partner

KM PARTNERS Alexander Minin senior partner

HILLMONT PARTNERS Serhii Nyzhnyi partner

legal sector focus

LAW FIRM

CONTACT DETAILS

James Hart partner 39

SHKREBETS & PARTNERS Eugene Shkrebets managing partner

VB PARTNERS Volodymyr Vashchenko managing partner

SOKOLOVSKYI & PARTNERS Vladyslav Sokolovskyi managing partner

PAVLENKO LEGAL GROUP Vitaliy Burdak managing partner

KONNOV & SOZANOVSKY Alexey Ivanov managing partner

ANK Alexander Kifak managing partner

www.bunews.com.ua

: 21

LAW FIRM

MITRAX

NUMBER OF LAWYERS

RANKING

legal sector focus

Litigation, Business Protection, Criminal Law / White Collar Crime, Corporate, Tax, Real Estate & Land , Financial Restructuring, Private Clients, Bankruptcy, Enforcement, PPP & GR

10, Lypska Street, Kyiv, 01021 Tel.: (044) 240-15-51 info@mitrax.com.ua mitrax.com.ua

Litigation, Tax, Competition, Banking & Finance, Business Protection, Criminal Law / White Collar Crime, Corporate, Private Clients, Compliance

29 Lesi Ukrainki blvd, office 75, Kyiv, 01014 Tel.: (067) 325-95-82 office@amber-corp.com www.amber-law.net

Criminal Law / White Collar Crime, Litigation, Tax, Business Protection, Banking & Finance, Private Clients, Ecological Law

3- A, Leiptsigska Street, Kyiv, 01015 Tel.: (044) 280-20-28 lawyersles@gmail.com lc-les.com

Bankruptcy, Litigation, Banking & Finance, Corporate, Tax, Family Law, Enforcement, Business Protection

10, Poltavska Street, Office 238, Kyiv, 01135 Tel.: (044) 222-79-05 office@goretskyy.com.ua www.goretskyy.com.ua

Criminal Law / White Collar Crime, Business Protection, Private Clients, Litigation, Compliance, Labor & Employment, Real Estate & Land , Corporate, Tax

1-B, Shumskogo Street, Office 119, Kyiv, 02098 Tel.: (044) 361-00-37 info@gracers.com, gracers.com

Litigation, Banking & Finance, Bankruptcy, Criminal Law / White Collar Crime, PPP & GR, Private Clients, Real Estate & Land , Infrastructure & Logistics

3а, Leiptsigska Street, Kyiv, 01015; Tel.: (093) 892-50-80 office@vdagroup.com.ua www.vdagroup.com.ua

Arseniy Salalayko СЕО 46

AMBER Semen Khanin managing partner

LES Sergiy Kolesnik managing partner

GORETSKYY & PARTNERS

CONTACT DETAILS

PRACTICE AREAS

Oleg Goretskyy managing partner 49

GRACERS Sergiy Lysenko managing partner

VDA GROUP Eugene Kolomiyets managing partner

www.bunews.com.ua

As the first foreign law firm to open an office in Kyiv in 1991, we are presently celebrating our 30th anniversary in Ukraine. During that time, we have successfully completed many of Ukraine’s milestone projects, including: • The First IPO in Ukraine (to raise approximately USD 500 million by a Ukrainian energy company’s listing on the London Stock Exchange); • The First True Project Financing in Ukraine (for oil and gas exploration and development, including processing facilities, pipelines, railroad construction, etc., funded by the EBRD); and • Eight Ukrainian Agricultural IPO’s. In recent years, we have successfully handled the legal work for many of the largest and most complex transactions and disputes in Ukraine, including: • The Largest Acquisition in the Ukrainian Energy and the Natural Resources Sectors; • The Largest Bilateral Investment Treaty Arbitration Concerning Ukraine (at the Permanent Court of Arbitration in The Hague); • The Largest Acquisition in the Agricultural Sector (by a major foreign investor to purchase a Ukrainian farming business, for which we earlier handled its creation, IPO and other financings); and • A Highly Complex Corporate Raid Defense Simultaneously Involving Over 50 Related Proceedings. Our legal practice is based on our commitment to provide client service of the highest quality. We organize our practice in teams around our clients to respond to and understand fully each client’s needs and efficiently deliver timely legal work. We were ranked in the independent KyivPost Survey of Law Firms among the top three law firms in Ukraine. We would be pleased to assist you for your proposed transactions or to defend you should your property or contract rights be challenged. We also provide legal research reports on significant problems in Ukrainian legislation that investors should be aware of, but that are not widely known.

18/1 Prorizna Street, Suite 7 Kyiv 01001, Ukraine

B.C. Toms & Co Attorneys and Counselors at Law www.bctoms.com

+38044-490-6000 kyiv@bctoms.net

Ukraine must address mounting renewable energy sector crisis Renewable energy payment issues could lead to legal challenges and loss of investor confidence

The Ukrainian energy market faced a difficult year in 2020 that saw disputes over the development of a competitive electricity market along with an escalating confrontation between the government and RES (renewable energy sources) investors over previously agreed payments for energy deliveries. This confrontation remains unresolved and is expected to reach a conclusion in the current year, with investors seeking indications of the government’s readiness to meet its commitments. The outcome will do much to shape the further development of the Ukrainian electricity market and energy sector in general. Payment problems in the Ukrainian electricity market were already obvious in March 2020, with the state-owned Guaranteed Buyer responsible for meeting agreed feed-in tariff rates for renewable energy supplies reducing payments by 47%. By the end of July, payment levels had fallen to less than 5% and debts had grown to UAH 25.4 billion. Mounting financial pressures brought the entire renewable energy industry close to insolvency. Numerous individual companies active in the Ukrainian energy market were unable to service their loans. In some cases, there were also difficulties covering the operational and maintenance costs of power plants. These obstacles caused RES investors to consider their options, with many seeking to protect their investments via arbitration or aiming to reach a compromise with the Ukrainian authorities. The situation left the Ukrainian government with a choice between increasing electricity tariffs for end consumers or decreasing previously agreed feed-in tariffs and facing up to the prospect of defaulting on state guarantees to investors. Following months of negotiations, a Memorandum of Understanding was finally signed on June 10 between the Ukrainian government and two of the three major associations representing the interests of RES investors. The parties to the Memorandum agreed to a feed-in tariff haircut for solar and wind power plants, with average reductions of 15% and 7.5% respectively. Different conditions were envisaged for power plants commissioned be-

fore 2015, which faced more drastic haircuts. Meanwhile, stricter regulations were proposed for RES producers regarding electricity generation forecasts. Within the framework of the Memorandum, the Ukrainian government undertook to avoid introducing any further reductions in feed-in tariffs or other measures that might impair renewable energy projects. The authorities committed to establishing the conditions for timely and full payments by the Guaranteed Buyer and ensuring the restructuring of loans issued to RES producers by state-owned banks. Furthermore, the government agreed to oversee the organization of “green” auctions for new renewable energy projects. The Memorandum envisaged clear deadlines for the repayment of outstanding debts incurred by the Guaranteed Buyer during the period prior to August 2020. In line with the terms of the Memorandum, 40% of these debts would be payable by the end of 2020, with the remaining 60% set to be paid off during the course of 2021 on a quarterly basis. The majority of terms set out in the Memorandum were further formalized in the Ukrainian parliament by the passing of a corresponding law on July 21, 2020. As a result of these agreements, the feed-in tariffs for the Guaranteed Buyer decreased significantly. Nevertheless, there was little indication that the authorities were prepared to take the necessary steps to meet their obligations in line with the terms of the Memorandum. New problems soon arose over a revised electricity transmission tariff for the national transmission system operator, Ukrenergo, with the rate fluctuating during the second half of 2020 and failing to meet the expectations of RES producers. This was regarded as a failure on the government’s part to meet its obligations as established in the Memorandum. During autumn and winter 2020, Guaranteed Buyer payments to RES producers fell behind schedule with an approximately onemonth delay. The anticipated repayment target of a 40% share of all outstanding debts by the end of 2020 was not met. Due to these setbacks, the mood of cautious optimism among investors that had arisen thanks to the signing of the Memorandum and subsequent passing of related legislation during the summer months began to decline sharply. In its place was a determination to seek a settlement by other means. Consequently, the number of lawsuits against the Guaranteed Buyer increased. The total volume of claims against the Guaranteed Buyer in December 2020 reached around UAH 1.1 billion, approximately 15% of which represented penalties for delayed payments. In early 2021, the Ukrainian authorities took a number of steps

About the author: Ivan Bondarchuk is a Counsel and Head of Energy & Natural Resources at LCF Law Group 24

legal sector focus

towards resolving the mounting challenges faced in the energy sector. In order to reduce the financial deficit in the electricity market, the government increased electricity rates for households. However, while reducing the financial pressure on the Guaranteed Buyer caused by public service obligations (PSO), this measure did not reduce the need for reasonable Ukrenergo tariffs. Nor did it solve the problems surrounding the repayment of existing debts to RES producers. Back in December 2020, the Ukrainian Cabinet of Ministers adopted a resolution approving the provision of state guarantees for Ukrenergo to attract loans from state-owned banks in order to repay debts to the Guaranteed Buyer amounting to UAH 11.3 billion. The relevant loans to Ukrenergo were approved by the National Energy and Utilities Regulatory Commission (NEURC). According to the available information, the current volume of funds provided to Ukrenergo by state-owned banks is UAH 6.4 billion. However, despite the expectations of the RES producers, they have received only half this amount. The remainder has reportedly been distributed to state-owned energy companies Energoatom and Ukrgidroenergo, which have suffered losses due to public service obligations and low household rates. Even though Ukrenergo expects to receive an additional UAH 4 billion in the near future, this amount will not resolve the outstanding debt issues. In a separate initiative, the Ukrainian Ministry of Energy has announced the issue of state bonds to generate funding for the www.bunews.com.ua

Guaranteed Buyer, as well as plans to finance renewable energy via increases in CO2 emission tax. However, these options remain somewhat vague and the chances of their successful implementation in 2021 are rated as low. At present, it appears that the Ukrainian authorities are once again close to losing the trust of RES investors, who are instead exploring their options in terms of possible arbitration and litigation in national courts. If the numerous potential arbitration proceedings do in fact materialize, the possible cost to the state in losses is difficult to overestimate. In the short term, the figure includes at least an additional 15% to 18% in penalties along with existing debts, which could mean a further UAH 3-5 billion. In the long run, Ukraine would face the possibility of numerous multi-million dollar awards in investment arbitration cases. The Ministry of Energy is currently seeking to attract investments in order to finance storage facilities for the electricity market as well as the development of ambitious hydrogen projects. The success of these efforts will depend to a significant degree on the settlement of existing problems with RES producers. Unless the Ukrainian government takes unpopular steps to resolve the country’s renewable energy crisis, any further investment projects will be at risk due to the loss of trust among international investors and rising interest rates on loans from international banks for projects in other sectors of Ukraine’s energy industry. 25

legal sector focus

Ukraine seeks to entice investors with Nanny Law New legislation offers incentives to major investment projects of more than EUR 20 million

About the author: Bertrand Barrier is a Partner at Jeantet Ukraine Last year saw a significant drop in the amount of foreign direct investment (FDI) coming into Ukraine. The reasons for this slump were multiple, and while a lot could be attributed to the ongoing coronavirus pandemic, one could also argue that Ukraine has begun to lose its allure for foreign investors due to solely domestic issues. This represents a setback for Ukrainian President Volodymyr Zelenskyy, who set himself the goal of making Ukraine more attractive to foreign businesses and hopes to attract major strategic investments to help finance Ukraine’s ambitious infrastructure projects. Efforts are now underway to rectify the situation. One of the most recent steps designed to improve the investment climate in Ukraine was the enactment of a new Law of Ukraine on State Support of Large Investment Projects in Ukraine (the so-called “Nanny Law”) in February 2021. This was followed by two further laws on tax and customs duties exemptions which were approved by Ukraine’s parliament in early March of this year. The Nanny Law is designed to help attract strategic investors, both foreign and domestic, by way of granting them state support. The envisioned measures aim to improve the investment climate in Ukraine and promote incoming direct investments. The Nanny Law provides for support to investors implementing projects with investments exceeding EUR 20 million in a range of industries including processing, transport, treatment of waste, warehouses, mail delivery and couriers, logistics, education, science and research, culture, tourism, healthcare and recreation, and sports. Among the principal requirements for such investment projects is that they must be implemented in Ukraine, must create 26

at least 80 new jobs, and should last for up to five years. In order to qualify under the terms of the Nanny Law, an investment project must entail a new construction, modernization, technical and/or technological overhaul of investment facilities, or acquisition of necessary equipment and components. Implementation of suitable investment projects will be guaranteed by execution of a direct agreement between the investor and the government, complete with supervision and assistance by UkraineInvest, a specially created body, and extension of a number of preferences. These preferences include tax and customs incentives such as exemption from payment of income tax for five years, exemption from payment of customs duties and VAT for importation of new equipment and machines in Ukraine, and state permission to use infrastructure required for the implementation of the investment project. The latter feature includes construction of new roads or the use of existing roads, communication lines, power transmission lines, heating, gas, and water as well as other pipelines. In total, the level of state support for investment projects within the framework of the Nanny Law could reach up 30 percent of the total cost of the project. In accordance with the two additional laws approved by parliament on 2 March, investors approved by the “Nanny” Office of the Cabinet of Ministers of Ukraine will receive import VAT and customs duties exemption, together with corporate income tax exemption for five consecutive years from the date of commissioning of the investment facility, and a discount on the land lease fee paid to the local Ukrainian authorities. The laws concerning tax exemptions and customs duties are expected to be signed by the president quite soon. While these legislative moves are encouraging, Ukraine has a rather mixed record when it comes to the treatment of foreign investors. Even without having to dig too far into history, it is easy to see why investors might remain cautious. In late 2019, Ukraine passed investor-friendly legislation to enable the implementation of large-scale concessions of seaports and highway infrastructure. However, at approximately the same time as this was taking place, another arm of the government (the state-owned Guaranteed Buyer responsible for making purchases of electricity from private producers in line with government commitments) was generating multi-billion dollar debts by delaying payment of feed-in tariffs to strategic investors in the renewable energy sector. This raised the possibility of multiple investment claims against Ukraine. Whether these debts are going to be repaid remains an open question. While it is encouraging to see Ukraine continuing to expand financial incentives and tax exemptions for investment projects, additional work clearly needs to be done in order to make Ukraine more attractive to foreign investors. In that regard, the recently adopted Nanny Law is a step into the right direction. One could argue, though, that an integrated approach including judicial reform and anti-corruption measures would be far more effective in terms of marketing Ukraine to the outside world as an attractive destination for international investment. www.bunews.com.ua

legal sector focus

Ukraine’s renewable energy conundrum Exploring the legal options available to investors with claims against the Ukrainian authorities gitimate expectations of investors regarding the sanctity of the host state’s investment rules. This move might have further exposed some of the investors to the risks of having effectively expropriated their investments in the country.

Investment Protection

About the author: Olexander Martinenko is a Partner and Head of Dispute Resolution at Kinstellar LLC. For the past ten years, Ukraine has experienced quite a boom in the construction of renewable energy source (RES) power generation facilities (PGF), primarily in the solar and wind energy sectors. Lavishly high feed-in tariff rates determined by Ukrainian legislation drove an unprecedented investor rush into this sector of the Ukrainian energy market. The bonanza came to an abrupt end in 2020 when the Ukrainian government realized that the structure of the RES sector was unsustainable going forward. In August 2020, it remodeled the country’s RES legislation to implement immediate and significant feedin tariff cuts, and to effectively ban the unbridled development of new solar and wind PGFs going forward.

The Investor Case The government might have saved itself a few hryvnias, but it also succeeded in enraging foreign investors who only a few years earlier were being actively courted by the Ukrainian state to invest in the sector. Investors now argue that they relied to their detriment on these entreaties by borrowing on international markets and investing on the Ukrainian government’s own terms. By changing the rules mid-game, the Ukrainian authorities have violated the le28

Legitimate expectations and effective expropriation concepts are both pillars of the international investor-state dispute settlement (ISDS) mechanism, an important part of the modern system of public international law. They are reflected in thousands of international investment treaties, and further developed by international investment jurisprudence. The legitimate expectations doctrine is based on the premise that the foreign investor’s legal regime in the host state will not become worse than it is on the day the investor makes its initial investment. The effective expropriation concept prohibits so-called indirect expropriation of foreign investor assets by the host state without fair and timely compensation equal to the value of such assets.

The Need to Act The concept of legitimate expectations is a strong suit for disgruntled investors to play in any claims against the Ukrainian government, which has violated their legitimate expectations by changing the feed-in tariff rates after their investment in Ukraine had already been made. Investors can further claim for their portion of the debt accumulated by the government’s failure to pay in full for the electricity already supplied under existing power purchase agreements (PPA). The aggregate amount of outstanding debt has fluctuated at around USD 800 million since early 2020. Investors who are still at the PGF pre-commissioning stage and who have not signed pre-PPAs are in a slightly more complicated situation. However, they can raise an effective expropriation claim against Ukraine: they brought their money into the country; they might have even already constructed their PGFs; but now they have lost the opportunity to realize their investment due to the Ukrainian government’s expropriative behavior. Essen-

tially, they have been left with only illusory hopes of winning an occasional governmental auction to put their PGFs into operation, and even in that case, only as the loss-leader victors of a reverse auction process.

Existing Restraints Everything seems to be pretty straightforward. Yet, many investors still appear reluctant to initiate legal actions against Ukraine. One reason is that investment arbitration is perceived to be an expensive exercise. The cost of investment arbitration proceedings for the claimant starts at around USD 6 million. This figure can rise depending on the complexity of the case. Judging from the preliminary analysis of the average losses that RES investors have sustained in Ukraine as a result of the recent changes, the economics of treaty arbitration likely works for only a few of the largest investors with PGFs in the country.

Overcoming Difficulties Other investors must make a difficult choice. They can either write off their investments or join forces with fellow partners-in-losses to sue the host state. The latter approach may be more rewarding than it might initially appear. These days, investors can tap into the resources of third-party funders who invest money into a speculative claim in the anticipation of attractive profits. In the context of treaty claims, a funder would typically cover 100% of the arbitration costs plus the full costs of enforcement proceedings. In exchange, the funder would claim back the full amount of its expenses plus a certain negotiated percentage of the recovered amounts upon the successful completion of the case. Advantageous terms for investors can be negotiated to engage a funder wherever a fairly rich pool of combined potential claims exists. That, plus diligent case planning, will be of paramount importance to eventual success. International funders are already following the RES disputes in Ukraine with great interest. The question is whether investors will decide on the option of banding together to protect their legitimate rights. www.bunews.com.ua

legal sector focus

Kyiv’s Legal High School opens LHS Gallery Kyiv’s Legal High School marked its third anniversary in early 2021 by launching a new arts project in the Ukrainian capital. The recently unveiled LHS Gallery welcomed guests to an inaugural exhibition with a seasonal flavor entitled “In Anticipation of Spring” featuring paintings by Oksana Svizhak. Launched in 2018, the Legal High School initiative offers training courses and lectures from many of Ukraine’s top legal services professionals and industry experts.

www.bunews.com.ua

GERMANY IN UKRAINE

germany in ukraine

ermany is currently Ukraine’s No. 4 international trade partner with a bilateral trade turnover in 2020 of USD 7.2 billion. Economic cooperation

between the two countries has been intensifying in recent years with growing German investment in Ukraine and the development of exciting initiatives such as the automotive cluster

components

Ukraine-based for

the

companies

German

manufacturing

automotive

industry.

Meanwhile, Germany is a leading market as Ukraine continues to strengthen ties with the European Union and increase exports to EU markets. The prospects for further growth appear promising. With German companies looking to diversify post-COVID production and optimize supply lines, Ukraine is now positioning itself as Germany’s ideal nearshoring partner. Business Ukraine magazine spoke to some of the key figures who are driving the GermanUkrainian business relationship forward.

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germany in ukraine

GERMANY IN UKRAINE From automotive hub initiatives to nearshoring opportunities: Germany is poised to consolidate its position as a key international investor in Ukraine Germany ranked among Ukraine’s top trade partners in 2020, maintaining a tradition of strong bilateral economic ties that stretches back to the early years of Ukrainian independence. Business Ukraine magazine spoke to the President of the German-Ukrainian Chamber of Commerce and Industry, Heiko Kreisel, about the prospects for German business in Ukraine. The COVID crisis dominated the headlines in 2020 and created a range of unique economic challenges. What kind of year was it for German businesses in Ukraine? The economic outcome in 2020 actually ended up being much better than we had expected during the first half of the year. Overall, the Ukrainian economy shrank by about 5%. That is the same level as the drop in Germany. However, if we speak about absolute numbers, the 5% contraction of German GDP, which reached about USD 4 trillion in 2019, is equal to USD 200 billion. So the total losses incurred in Germany last year were more than 30% higher than Ukraine’s annual GDP, which is currently around USD 150 billion. This gives you an idea of the relative amounts involved. From my point of view, the Ukrainian government chose a very cautious and balanced approach to reducing mobility and restricting business activities during 2020. Maybe this was motivated by an understanding that you cannot expect to impose full lockdown conditions for an extended period if a major part of the population does not have any savings or sufficient money to survive without the ability to earn. Such an approach would be impractical in a country like Ukraine. Our chamber is a part of a worldwide network of German chambers in 94 countries covering a total of 140 locations. Twice a year, we conduct a survey and ask German businesses in all these countries how they are doing. We call this survey the AHK Outlook. In the survey’s latest edition produced last autumn, German businesses in Ukraine were among those with the most optimistic

About the interviewee: Heiko Kreisel is President of the German-Ukrainian Chamber of Commerce and Industry outlook for the near future. This was not only in terms of Europe, but globally. Ukraine has emerged in recent years as an increasingly popular location among German companies for the production of automotive components and electronics. Can you tell us a little about the development of this sector and explain the logic behind your current plans to establish an automotive cluster initiative together with German and Ukrainian companies? This is a very interesting topic. Our initiative to establish an automotive cluster is really a

question of catching up with something that first began to take root in Ukraine 15 to 20 years ago. At that time, German and other international automotive suppliers started coming to Ukraine and manufacturing components for the German automotive industry. Initially, this was limited to the assembly of cable networks. However, step by step, more value-added manufacturing has developed. This process is still continuing. In parallel with the growth of the automotive sector, additional suppliers have arrived in Ukraine and have begun manufacturing components for household electronics. So : www.bunews.com.ua

far, German businesses have created approximately 40,000 to 45,000 workplaces in both sectors in Ukraine, with more in the pipeline. One German supplier is currently building a second plant in Ukraine, while another has already decided to search for a location for an additional Ukrainian plant. In my opinion, the current cluster initiative should have been established 10 years ago. However, there was no neutral platform at that time capable of uniting the range of different players in the market, many of whom compete with each other in some sectors. In Western Europe, it is typical for central or regional governments to provide this kind of neutral platform. In the absence of any similar initiatives in Ukraine, the German-Ukrainian Chamber has proposed to support the establishment an automotive cluster.

This is a very important step forward, because we need more industrial success stories about Ukraine that provide fresh perspectives for the country’s future development. Businesses in this sector are now coming together and will be able to share this particular positive story about Ukraine. Our goal is to attract so-called original equipment manufacturers, or OEMs, to Ukraine. Once these OEMs start to consider Ukraine as a potential location for their production facilities, the dynamics of development in the sector will change dramatically. Ukraine’s IT industry enjoyed another year of strong growth in 2020 and remains arguably the standout performer in the Ukrainian economy. How is cooperation between German companies and the Ukrainian IT industry currently developing?

The IT industry is one of the most successful business sectors in Ukraine. This also applies to exports. There are currently a lot of Ukrainian IT companies that provide solutions for German industry. You do not tend to hear a lot about this because as a rule, German companies do not like to speak about suppliers from different countries. On the contrary, they prefer to underline the German character of their products and brands. But if you drive a German premium class car today, it is likely that the wire network will not be the only element to come from Ukraine. There is a good change that the car’s software solutions may also be Ukrainian in origin. This includes everything from infotainment controls to the coordination of audio, navigation, and car information systems. Nor is this trend limited to the automotive sector. Ukrainian IT solutions can be found in other

germany in ukraine

Assembly line at the Eurocar plant in the village of Solomonovo in western Ukraine’s Zakarpattia Oblast www.bunews.com.ua

germany in ukraine

Handover of seven Fendt tractors to Mriya Agro Holding by Zeppelin Ukraine, the official Fendt Dealer in Ukraine

: spheres such as machine building. Even in the banking sector, Ukrainian IT companies are already developing successful cooperation with German companies. What were the key landmarks in 2020 for German businesses in Ukraine? As I have already mentioned, 2020 saw progress towards new German production plants in Ukraine. Another very important landmark during the past year was the signing of the German-Ukrainian Energy Partnership in summer, along with the first German-Ukrainian Energy Day in December 2020. It is true that the energy sphere in Ukraine is currently full of challenges such as the issue of outstanding payments for renewable energy in line with prior government commitments. I hope that all of the previously agreed payments will soon be settled. This topic is having a very negative impact on international perceptions of Ukraine’s investment attractiveness. “Pacta sunt servanda” or “agreements must be kept” is a fundamental principle of law and business that must also apply in Ukraine. Despite these concerns, I see numerous po38

tential directions for German-Ukrainian economic cooperation in the energy sphere. This could include the development of hydrogen as an energy source. During last year’s German-Ukrainian Energy Day, experts discussed whether it would be possible in Ukraine to develop green hydrogen with more renewables. Furthermore, some experts commented that Ukraine is the only country on the border with the European Union that possesses the relevant storage and transportation facilities for this type of hydrogen. If this is true and the technical adaptations for a shift from natural gas to hydrogen could be implemented easily within the existing Ukrainian pipeline system, this could become a potential game changer for the future. Ukraine is now the No. 4 food exporter to the European Union. What role does agriculture currently play in trade between Ukraine and Germany? In 2019, agricultural products and food accounted for 15% of German imports from Ukraine, but this was surpassed by electronics, which reached 22% and became the largest category of imported goods.

These electronics imports included components produced in Ukraine for the German automotive and household electronics industries. In other words, agriculture and food still represent an important part of German-Ukrainian trade, but the segment no longer qualifies as the largest Ukrainian export category to Germany. Ukrainian companies sell a wide range of agricultural commodities to Germany with an emphasis on unprocessed and non-branded products. Making the leap to effective and successful branding is one of the biggest challenges facing Ukrainian manufacturers today. I believe this is just a matter of time. In future, we will see more and more Ukrainian goods appearing on German supermarket shelves. When we speak about German-Ukrainian trade in the agricultural sector, we should also mention world-renowned German brands such as Fendt (AGCO), Claas, Horsch, Bayer, and BASF that deliver machinery, implements, spare parts, seeds, and crop protection solutions to their Ukrainian clients. These German brands are making a significant contribution towards better and larger Ukrainian harvests. : www.bunews.com.ua

germany in ukraine

: How are perceptions of Ukraine evolving within the German business community? To a degree, perceptions of Ukraine are a matter of branding and marketing. In that sense, today’s Ukraine needs to make progress both internally and externally. This means implementing genuine domestic reforms, especially with regard to the judiciary and rule of law. At the same time, Ukraine also needs a good international image campaign. This would not be cheap, but I think it would be money well spent if the campaign was implemented by a professional and globally recognized marketing company. At the moment, the outside world simply does not know enough about Ukraine. Whenever they travel abroad, individual Ukrainians should regard themselves as unofficial ambassadors for Ukraine. And as with any good ambassador, they should try to focus on telling exclusively positive stories about their home country. What could Ukraine be doing to make itself more attractive to German businesses and investors? The absence of rule of law is the greatest single obstacle to more international investment

into Ukraine. There have been no real reforms in this sphere for many years. This is not news to anyone living or working in Ukraine. On the contrary, it seems to me that everyone is aware of the problem. Lack of trust in the Ukrainian legal system extends far beyond the business community and is shared by the entire population of Ukraine. One of my fellow CEOs captured the essence of the issue when he stated that once rule of law is established in Ukraine, everything else will also fall into place, step by step. If I can go to court in Ukraine and feel confident my rights will be respected and upheld, then the rules of the game will change fundamentally. Do you have any recommendations for German colleagues who may be considering Ukraine? Which sectors of the Ukrainian economy currently offer the most attractive opportunities for German businesses? There are so many interesting opportunities that I cannot realistically list them all. For manufacturing companies in particular, Ukraine offers excellent “nearshoring” options. Relocating to Ukraine represents a huge opportunity for manufacturers de-

livering their products to EU markets. A Ukrainian location can provide significantly greater supply chain resilience in light of factors such as the unsolved trade conflict between US and China and current Covid-19 pandemic restrictions. Ukraine’s creative industries are also booming and worthy of closer inspection. Together with the Ukrainian IT sector, they are currently growing at a rapid rate. One good example of this trend is the Ukrainian gaming sector, which already began attracting interest from international companies some years ago. The same is now happening with the fashion industry. Another area where we are seeing rapid expansion is the production of videos for films, TV, adverts, and the music industry. A growing number of global brands and international heavyweights are learning that it is possible to produce world-class video footage in Ukraine for far more competitive prices than in other European locations. When this is paired with Ukraine’s highly skilled IT industry, it is easy to understand why Ukraine’s creative sector is starting to be seen as a potential alternative to the traditionally dominant West European and US markets.

The Zhytomyr plant of German automotive supplier Kromberg & Schubert

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One of ProCredit Bank’s recently unveiled Service Points located in Kyiv’s Blockbuster Mall 42

germany in ukraine

Ukrainian division of Germany’s ProCredit Bank launches innovative shopping mall service points New initiative aims to promote digital services while maintaining physical presence The Ukrainian division of German-based international banking group ProCredit Bank is taking the concept of retail banking to a new level with the launch of innovative Service Points in a number of Kyiv’s biggest shopping malls. This initiative was developed during 2020, with the first Service Points www.bunews.com.ua

unveiled in the Ukrainian capital during the early months of 2021. Each Service Point offers a range of banking options including payment and cash withdrawal facilities along with pickup points for banking cards. Unlike traditional bank branches, they are not staffed, but offer the opportunity for

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germany in ukraine

ProCredit Bank’s new Service Points aim to support the bank’s digital strategy while maintaining an efficient physical presence : existing and potential customers to sit down and engage with client advisors in real time via video link. The Service Point format was developed specifically for the Ukrainian market. Viktor Ponomarenko, the General Manager of ProCredit Bank in Ukraine, sees the new Service Points as the face of the bank in the digital age. He explains that the goal of the initiative is to support ProCredit Bank’s growing emphasis on digital banking services while also maintaining a physical presence and creating efficient points of contact with the public, including both current clients and those who might be interested in learning more about what the bank has to offer. “Our customers do not really depend on bank branches as they can do virtually everything online,” says Ponomarenko. “But of course, there are still instances where customers rely on a physical presence from their bank. This includes things like cash withdrawals and cash payments. And ultimately, people still need to see that the bank exists. They need to see our brand. These new Service Points provide clients with convenient access to our digital services and transmit the image of our bank.” The choice of location was determined following brainstorming sessions and research by bank executives in Kyiv. “We felt that the traditional high street branch model was no longer the right answer to the need for a continued physical presence. At the same time, we wanted to be more accessible to customers and potential clients,” offers Ponomarenko. “We are now confident that big shopping malls are the best solution to this challenge. These are places that large numbers of people regularly visit with a view to accessing convenient services.” The recent launch of ProCredit Bank’s first Service Points is part of a longterm shift towards digital services that has been underway for a number of years. This transition was further boosted by the new market realities of the COVID crisis, which has driven sharp growth in all forms of digitization throughout the Ukrainian economy. Ponomarenko says that despite the many challenges facing all businesses in Ukraine last year, ProCredit Bank enjoyed an encouraging twelve months. The bank’s loan portfolio to businesses grew, as did customer deposits and overall client numbers. “While the world continues to face pandemic-related problems, from the business development standpoint, we were quite successful in 2020. We continued to develop and grow in all the business areas where we focus.” This development has included the introduction of new digital offers and services aimed at personal banking clients. “The COVID crisis has accelerated the digitization process but we are still moving in broadly the same direction we have been pursuing for a number of years,” offers Ponomarenko. The most striking aspect of ProCredit Bank’s expanding service portfolio for private individuals is the bank’s entry into the personal loans market, with the launch in late 2020 of mortgage services along with auto loans and

general investment loans. Ponomarenko says this development reflects the changing market conditions and points to unfavorable prior circumstances including high interest rates and economic instability. The situation is now more favorable, he notes. Ponomarenko is scathing of what he terms as the impenetrable terms and conditions that can often lead to hidden costs for banking clients when taking out loans. He vows to build up ProCredit Bank’s personal loan service portfolio in Ukraine based on the core value of transparency. “This is our competitive advantage,” he comments. “Typically, banks cheat their clients by manipulating them in terms of things like hidden costs and changing interest rates. We prefer transparency. This is the same principle that we have applied to our private bank accounts, which come with clear and easily identified monthly fees.” ProCredit Bank’s new Service Points will help to promote the bank’s entry into the personal loan segment along with other digital offers. “It’s not enough to offer great service. People also need to see this. That’s why we cannot give up completely on a physical presence. Instead, we want to offer a more sophisticated solution that suits the Ukrainian market,” say Ponomarenko. “This is why we are developing a Service Point presence to complement our digital business model. We already offer efficient digital banking services. The Service Points complement these services.”

About the interviewee: Viktor Ponomarenko is the General Manager of ProCredit Bank in Ukraine (Photo by Natalya Kravchuk)

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LOST IN COMPLICATIONS OF THE UKRAINIAN TAX LEGISLATION?

Mandatory tax registration of non-residents in Ukraine since January 2021 “Starting from January, 1st 2021 every non-resident conducting commercial activity in Ukraine through a permanent establishment has to be registered as a corporate profit tax payer instead of existing permanent establishment or before the start of such activity. Registration deadline: March, 31st 2021.” The registration procedure is yet to be approved by the Finance Ministry.

Want to ensure compliance & avoid penalties? Get in touch now!

Artem Barinov, ADIT Director, Legal & Tax +380 / 44 / 490 58 74 BarinovAA@schneider-group.com www.schneider-group.com

Gateway to the EU: How to benefit from manufacturing opportunities in Ukraine For some years now, tensions in international trade relations have become more apparent. More and more companies seek to strengthen their supply chains. One option is to bring production closer to their market geographically. Especially in the area of labour-intensive production and low automation, Ukraine is in the spotlight as a production location. In the past, many manufacturing companies in the automotive and textile sectors chose Ukraine. These companies take advantage of the geographical proximity to markets and customers in Western Europe, relatively low wages, and the good level of education of the workforce in Ukraine. Ukraine offers a secure legal framework for investment and clear alignment with European Union standards. Last but not least, profit taxation in Ukraine can also be considered low.

Company law Ukrainian law offers a secure legal framework for investors to reliably embed investments and contractual relationships. Various legal forms are available for investments. The most common legal form is the limited liability company, abbreviated in Ukrainian as TOV. The TOV can largely be compared with LLCs in other jurisdictions, although special features must be observed in detail. Special forms such as the GmbH & Co KG, which are well known from German law, are theoretically possible under Ukrainian law, but since Ukrainian partnerships are also taxed like legal persons, there is no tax incentive to do so.

Employment law One of the few areas of law that has not yet been fundamentally reformed by a new Code is labour law. The Labour Code of 1971 is still applicable, albeit with many amendments. A new Labour Code has been under discussion for many years, and last year it became apparent that a comprehensive reform could be achieved in the near future. It is expected to be more employer-friendly and flexible and to reduce unnecessary bureaucratic regulations. Ukrainian labour law is largely mandatory. Contracts between employers and employees may therefore not contain any provisions that worsen the employee’s legal position as defined in labour legislation. Exclusively for company officials (e.g. directors, general managers) in companies, there is a bit more flexibility for contractual provisions. Foreign nationals can be employed only on the basis of a work permit. For highly qualified foreign employees, permits can be obtained easily.

Real Estate law Over the past 30 years, Ukrainian real estate legislation developed into a secure investment framework. There are, however, special features that continue to astonish investors, especially investors from German-speaking countries. For example, the ownership of the building and the ownership of land may be in different hands and this is often the case in practice. With a statutory right to use, and a pre-emptive right to acquire the underlying land, the building owner’s position is safe. As for the acquisition of land, no investment is required. This can also be an advantage. Since 2013, a unified real estate register has been introduced, which includes all proprietary rights to buildings and land. Rights to buildings and land can officially be recognized only after its registration in the real estate register. Data in the register is publicly available and can be accessed by anyone via Internet.

Julian Ries is Senior Partner and Head of International Offices at INTEGRITES

Investment promotion A Law «On State Support of Investment Projects with Significant Investments» was recently enacted, which provides for special support for investment projects that meet the following criteria: • Investment project concerns the manufacturing industry (except for tobacco and alcohol), extraction of mineral resources for further processing (except coal, oil and gas), waste management, transport, storage, postal and courier services, healthcare, arts, culture, sports and leisure • Construction, modernisation or technical equipment of facilities/buildings for the above-mentioned purposes • The investment volume amounts to at least EUR 20 million • The implementation of the project will not exceed 5 years • Creation of at least 80 new jobs with salaries at least 15% above the normal regional salary for equivalent jobs By means of a special investment promotion agreement, the investor can be granted the following subsidies:

• Exemption from certain taxes (to be determined) • Exemption from import duties for new equipment • Priority right for lease of state or municipal land with the right of later pre-emptive acquisition • Establishment of infrastructure (roads, communications, energy) at the expense of the state or municipality The total amount of benefits or subsidies may not exceed 30% of the planned investment. The conditions of state support for each investor will be provided in special investment agreements. Interestingly, the investment agreement can also be concluded under foreign law and a non-Ukrainian arbitration court can be chosen for disputes. In addition, there is currently a draft law on stimulation of an electric vehicles cluster under consideration. The draft law suggests exemption from profit tax for the production of electric vehicles and essential components thereof.

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Expanding opportunities for German–Ukrainian cooperation EU integration and improving legislative landscape put Ukraine on the investment radar

About the authors: Timur Bondaryev is the Managing and Founding Partner at Arzinger. Markian Malskyy is a Partner and Head of the Western Ukrainian Office at Arzinger, and Honorary Consul of Austria in Lviv. Oksana Karel is a Counsel at Arzinger. Alesya Pavlynska is a Counsel at Arzinger. Ever since Ukraine signed an Association Agreement with the EU in summer 2014 featuring a free trade component, the country has been developing closer economic ties with the rest of Europe and becoming increasingly attractive to European investors. It is not difficult to see why Ukraine is appearing on the radar. A common border with the EU, qualified workforce, competitive costs, and legislative support have allowed Ukraine to establish itself as a unique manufacturing destination for strategic investors in a range of economic sectors. The recently adopted law “On State Assistance to Investment Projects with Significant Investments in Ukraine” is the latest move to increase state support for large investment projects. In order to qualify, investments must exceed EUR 20 million, create over 80 working places, and meet a number of other requirements. Ukraine has adopted several further laws relating to foreign investments that set ground rules for interaction with the state and provide legal protections for foreign investors in line with the best global practices. Ukrainian legislation currently prohibits nationalization without due compensation of foreign investments; investors are protected from governmental pressure; and legislation also allows investors to claim compensation for actions, inaction, or inappropriate fulfillment of obligations by state authorities leading to loss of business. In addition to this investment protection legislation, Ukraine and Germany concluded a bilateral treaty in 1993 on support and mutual protection of investments. The treaty prohibits any discriminatory measures against investors or the expropriation of foreign investments. It also regulates compensation in cases of expropriation due to public necessity or damage caused by armed conflict, revolution, state of emergency, or rebellion. The treaty guarantees unrestricted money transfer possibilities and means of protection for investors, including amicable negotiations and arbitration. If these guarantees are violated, investors can launch investment dispute claims against Ukraine via international investment arbitration institutions or ad hoc arbitration. Ukraine is a party to a number of international multilateral investment protection and investment arbitration treaties, and has consented to the principle of finality regarding awards in investment disputes. Unlike awards made by commercial arbitration institutions, which still require recognition from national courts, awards in investment disputes are viewed as equal to decisions made by the national Supreme Court and are enforceable without any additional procedures in Ukraine. It is worth underlining that Ukraine has a strong reputation for obeying arbitration awards and “paying the arbitration 48

bill”, unlike some regional neighbors such as Russia, for example. The Ukrainian economy is rather liberal and accessible with regards to foreign investors, with almost no regulatory barriers for foreign investment. Over the 30 years of Ukrainian independence, a number of significant assets in various sectors of the economy have changed hands and ended up being owned by major global publicly traded investors. Apart from domestic merger control regulations with very low thresholds and some specific exceptions, there are no regulatory obstacles to investing in the country. As long as an asset is on the market, any investor can purchase it. This situation may be about to change. The Ukrainian government is reported to be seriously considering the introduction of an FDI (foreign direct investment) screening regime to control inflows of foreign investments into strategic sectors of the Ukrainian economy. These regulations are expected to be based on the best global practices with a focus on telecommunications, defense, aerospace, and other strategically important sectors. We expect the relevant laws to be passed and implemented by the end of 2021. With this in mind, any investors eyeing Ukrainian deals that may theoretically fall within the scope of FDI screening are advised to close them as soon as possible. German investors looking for opportunities in Ukraine may be interested to learn that the Ukrainian authorities are currently conducting a major privatization wave of around 3,000 state-owned assets. These assets are drawn from a range of sectors including manufacturing, retail, hospitality, infrastructure, and much more. International investors are very much welcome to participate in this large-scale sell-off, with a number of measures introduced by the State Property Fund to make the process more accessible and transparent for foreign buyers. Looking ahead, the key drivers of the Ukrainian economy in the coming years are expected to be the agricultural sector and the IT industry, which continues to demonstrate remarkable annual growth. With Ukrainian food exports entering new global markets and legislative changes creating a long-anticipated agricultural land market, many international investors are set to place their bets on Ukraine’s famed breadbasket. Ukraine’s national infrastructure upgrade continues and will likely benefit from recent legislative support for concessions and public-private partnerships. Meanwhile, the country is witnessing increasing amounts of residential and warehouse construction. Together with rising EU trade volumes, these domestic factors give rise to optimism for sustained GDP growth in the years ahead. www.bunews.com.ua

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germany in ukraine

Ukraine can be Germany’s ideal nearshoring partner

Ukraine offers German companies a range of advantages ranging from geography to scalability

About the author: Sergiy Tsivkach is the Executive Director of UkraineInvest Germany and Ukraine have a long history of mutually beneficial economic cooperation dating back to the early days of Ukrainian independence, with the relationship experiencing further robust growth in recent years. Looking ahead, Ukraine can offer German companies scalability and a range of competitive advantages as well as close proximity to strategic markets. In 2020, Germany ranked as Ukraine’s fourth-largest trading partner following China, Russia, and Poland, with annual bilateral trade worth US 7.2 billion. In terms of investments, Germany has long occupied a position among Ukraine’s top five international investors. Around 2,000 German companies currently operate in Ukraine, accounting for over USD 2.3 billion of FDI stock. The list of German companies present in Ukraine includes Bader, Kromberg & Schubert, Leoni, Henkel, Knauf, Linde Gas, BASF, Bayer, and many more. Some of the most striking examples of today’s burgeoning German-Ukrainian economic relationship can be found in the automotive sector, electronics and technology, the chemicals industry, metalworking, and the manufacture of toys, clothing, and sporting equipment. Meanwhile, as the largest economy in the European Union, Germany is a major recipient of Ukraine’s growing exports to the EU. While the expansion in bilateral trade over the past few years is encouraging, there is still significant room to develop cooperation further and in new directions. The disruptive events of the global coronavirus pandemic over the past twelve months may have inadvertently helped to highlight some of the most attractive opportunities for the future direction of German-Ukrainian economic cooperation. The COVID crisis has caused significant disruption to a wide range of global supply chains, affecting businessess worldwide. This is fueling a surge in diversification initiatives as global industry looks to restructure its exposure 50

and explore relocation options. For most of the world’s leading economies, this means shifting some manufacturing out of Asia to new locations. As the world begins to look towards the post-coronavirus recovery period, EU trade commissioner Phil Hogan has stated that companies operating in the European Union need to consider diversifying their supply chains to reduce their reliance on individual countries. This rebalancing may well be long overdue. In 2019, imports from Asia to EU countries totaled nearly USD 1.2 trillion. A major wave of relocation measures could lead to logistics cost savings of up to USD 71 billion annually, while also slashing delivery terms in many cases by more than a month. The push to diversify away from Asian manufacturing bases is creating huge opportunities for markets situated closer to the EU’s biggest economies such as Germany. In particular, the countries of Central and Eastern Europe along with Turkey offer attractive locations in terms of nearshoring. This new economic reality presents Ukraine with a unique opportunity to become an instrumental link in the global supply chain. Thanks to a number of competitive advantages, Ukraine now has a chance to become a leading manufacturing and industrial hub with huge nearshoring appeal. These advantages include a unique location at the crossroads of key trade routes linking Europe, Asia, and the Middle East. Ukraine also boasts a highly skilled and cost-competitive workforce, along with a wide selection of greenfield and brownfield locations that are readily available for development. Ukraine can also offer German companies the promise of scalability. Concerns are growing in Germany that the country is starting to approach the upper limits of its manufacturing and human capital capacities. These are areas where Ukraine excels. German companies can establish a presence in Ukraine as an extension of existing activities in Germany and other parts of Europe. This model is particularly suitable for the electronics, automotive, and chemicals industries, but can equally apply to a wide range of other sectors. In addition to these selling points, Ukraine is working hard to boost its competitiveness on global investment markets and is seeking to create the conditions for enhanced integration into international supply chains. In line with these efforts, the Ukrainian parliament recently adopted new legislation designed to improve the business climate and introduce a range of incentives for investors. This new law On State Support for Investment Projects with Significant Investments features a number of benefits including tax incentives; simplified access to land; construction, reconstruction, and infrastructure at the expense of the state; and the consolidation of investor guarantees through the conclusion of a direct agreement with the Ukrainian authorities for up to 15 years. State support will cover up to 30% of investments. These attractive terms will be available to investors who invest more than EUR 20 million while meeting other criteria such as creating at least 80 new workplaces. The Ukrainian government’s investment agency, UkraineInvest, has been authoritized to serve as the institution responsible for supporting investment projects that fall within the framework of this new legislation. The UkraineInvest team is now looking forward to cooperation with German businesses seeking to build on the synergies and advantages on offer in Ukraine. www.bunews.com.ua

Ukraine’s quarterly English-language current affairs publication since 2007

Positive outlook for economic growth in Ukraine in 2021 After very positive economic developments in 2019 and early 2020, Ukrainian gross domestic product (GDP) slumped by 6 percent in 2020. In 2021, the Ukrainian economy is expected to return to the path of economic growth. The forecasts of the various authorities (such as the NBU and World Bank) anticipate an increase in Ukrainian GDP of between 1.5 and 4 percent. The pace of Ukraine’s economic growth depends above all on overcoming the corona pandemic, continued cooperation with the IMF, and growth in foreign investments. We are confident that Ukraine will develop positively in 2021. We see this in practice with our client support. Our law firm supports large and medium-sized companies from Germany and other countries around the world. We help clients with investment projects in Ukraine and provide services in a range of areas including legal advice, taxes, accounting, audit, etc. We see that foreign companies have regained optimism in Ukraine in the past few years. Companies see the benefits of investing in Ukraine. Key factors include proximity to the EU border, well-trained workforce, competitive costs, and good infrastructure. In addition, the Ukrainian government has passed a lot of new laws since 2014 and made many legislative changes to improve the investment climate. It is not possible to enumerate all positive developments here, but they create a positive environment for new foreign investments. We receive inquiries every day. We offer the best solutions to optimise the implementation of projects. Every completed project fills us with great satisfaction and allows us to have a positive outlook towards the future in Ukraine.

Rödl & Partner is a German advisory and auditing firm. We are represented with 5,120 employees at 109 locations in 49 countries. Klaus-Peter Kessler is the Managing Director of the Rödl & Partner office in Ukraine.

Email: klaus.kessler@roedl.com Tel. +49 89 9 287 80 – 702 Mobile: +49 173 929 52 74

German cleaning technology giant

invests in Ukrainian flagship HQ Construction work is underway on a new state-of-the-art Kaercher complex in the Kyiv region Work is currently underway at a construction site on the Odesa highway just beyond Kyiv’s southern city limits that will soon become the new flagship Ukrainian HQ of German cleaning technology giant Kaercher. Expected to be unveiled in the first quarter of 2022, the complex will feature state-of-the-art office space along with a Kaercher Academy, Ukraine’s largest Kaercher Center, and dedicat-

ed areas offering equipment servicing and showcasing the brand’s trademark car cleaning options. This Office and Competence Center project is the latest stage in the expansion of the Kaercher brand in Ukraine, with the significant investment involved reflecting the German mother company’s faith in its Ukrainian subsidiary. This confidence it perhaps not surprising. Kaer-

cher Ukraine has posted double-digit sales growth for each of the past five years, and was recognized in 2018 as the number one Kaercher subsidiary globally. Kaercher Ukraine Managing Director Ivan Bechko has been with the company for thirteen years and has held his present position since 2016. He says the current work underway to build a new HQ reflects the German brand’s ambitious growth expectations for the Ukrainian market. Plans for the new facility offer an optimistic vision of where Kaercher Ukraine hopes to be in the next decade or so. The top floor of the four-story, five thousand square meter Kyiv region complex will initially remain unoccupied in order to accommodate envisioned annual staff increases of around 10% to 15%. “I am convinced that within five or six years, we will already be using the top floor of the new office space,” explains Bechko. He also expects colleagues from countries throughout the Kaercher www.bunews.com.ua

germany in ukraine

Architectural plan of the new Kaercher HQ which is currently under construction in Kyiv region

international network to visit Ukraine in the coming years in order to participate in training opportunities at the planned Kaercher Academy. As a brand that relies heavily on its reputation for innovation, Kaercher places great emphasis on regular staff training in the latest cleaning technologies. With its state-of-the-art new facility, Ukraine will soon be well-placed to take on a leadership role as a training hub. The Kyiv region Kaercher Academy will feature a wide selection of floors and surfaces for training purposes encompassing the full spectrum of Kaercher equipment focuses, from industrial and professional to home and garden. Bechko is enthusiastic about this training role and is looking forward to welcoming colleagues from around the world. “Here in Ukraine, we have plenty of useful experience to share with them,” he notes. The plans for the new HQ outside Kyiv have been developed by Ukrainian architects and designers working to German standards in line with the Kaercher brand book. In keeping with Kaercher corporate : 53

One of Kaercher Ukraine’s most memorable social initiatives was the cleaning of Odesa’s iconic Potemkin Stairs

: policy, a key feature of the design is attention to ecological issues. The coming Office and Competence Center will include a range of innovative eco-friendly features such as solar power paneling. Given the centrality of water to many of the company’s most popular cleaning technologies, special care has also been taken to maximize the preservation of local water resources and minimize any potential impact on the surrounding environment. “We will install large storage tanks and collect rainwater for use in the Kaercher Academy and other aspects of the facility,” says Bechko. “The most up-to-date technologies will be used to clean and process the water we use for everyday purposes along with any water required for training and demonstration purposes.” Bechko is confident that the new facility will have a significant positive impact on the local community of nearby Kyiv region village Hatne. Construction of the complex is already creating new work places for local residents. Once operational, the complex will also generate considerable additional tax revenues for local budgets while potentially bringing extra customers to local businesses. Hatne residents can also expect to see Kaercher active locally with efforts to improve the environment. This is part of a corporate strategy that has seen Kaercher contributing to cleaning initiatives across Ukraine for a number of years. One particularly striking aspect of this approach involves Kaercher teams using the company’s equipment to engage in clean-ups of public spaces and prominent landmarks. Of course, this has the added benefit of showcasing the quality of Kaercher’s cleaning technologies to Ukrainian audiences and municipal authorities, who often subsequently become clients. One particularly memorable example of this approach was the cleaning of Odesa’s iconic Potemkin Stairs. Kaercher teams cleaned half of the famous landmark staircase in Ukraine’s largest Black Sea port city and left the results on display for a number of days before proceeding to finish the job. Other prominent locations to receive a Kaercher cleaning include Lviv’s centrally located Shevchenko Monument and Shevchenko Park in the Ukrainian capital. The forthcoming Office and Competence Center on the southern fringes of Kyiv will serve as the new flagship for the Kaercher brand in Ukraine and will complement a network of 13 existing Kaercher Centers in most of Ukraine’s largest cities. These Kaercher Centers serve as regional hubs where customers can test, purchase, and maintain equipment. Kaercher has yet to establish a direct production presence in Ukraine, but Bechko does not rule anything out. The German-based brand already partners with a number of Ukrainian companies to offer locally-manufacwww.bunews.com.ua

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Kaercher Ukraine has posted double-digit sales growth for each of the past five years, and was recognized in 2018 as the number one Kaercher subsidiary globally tured elements such as steel frames and tubing along with Ukrainian-produced detergents. “At present, there is no Kaercher manufacturing in Ukraine, but who knows what could happen in the future if Ukraine continues to make progress. Everything is possible,” comments Bechko. The steady expansion of Kaercher Ukraine over the past five years despite the challenging economic environment in the country certainly suggests that there is good reason to embrace an ambitious outlook. The arrival of an innovative new HQ in early 2022 will be a major milestone in the company’s Ukrainian expansion, but Bechko is already looking beyond this immediate objective. “We believe in Ukraine and in the further positive development of the Ukrainian market,” he notes. “This is the reason why we have decided to invest in a major new facility with a view to additional growth over the coming fifteen to twenty years.”

About the interviewee: Ivan Bechko is the Managing Director of Kaercher Ukraine

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Veteran German expat reflects on three decades in Ukraine Dr. Thomas Winkelmann first arrived in Kyiv just weeks before the Berlin Wall fell in 1989

About the interviewee: Dr. Thomas Winkelmann is a Partner at Henniger Winkelmann Consulting German national Dr. Thomas Winkelmann is one of the elder statesmen of the Kyiv expat scene. Having first arrived in the Ukrainian capital in the weeks prior to the fall of the Berlin Wall in October 1989, he has a strong claim to being among the city’s longest-serving German expats. Winkelmann came to Ukraine from East Germany at a time of great change in the former Eastern Bloc. Soon after settling in Kyiv with his young family, the reunification of East and West Germany began. While many of his fellow Germans chose to head home, Winkelmann decided to stay on in Ukraine and explore the opportunities that he expected to present themselves as the old divides of the Cold War gave way to a new Europe. Thus began an expat odyssey that has lasted for more than three decades and counting. For much of the 1990s, Winkelmann represented German industrial interests in Ukraine and the former USSR. He then spent over a decade working for one of Germany’s leading consulting companies, before establishing his own Kyiv-based outsourcing and consulting company, Henniger Winkelmann Consulting, in 2014. For the majority of this period, he has remained resident in the Ukrainian capital. Winkelmann has had a ringside seat for many of the key events in the country’s remarkable post-Soviet nation-building journey. Looking back from the vantage point of early 2021, he reflects on the dramatic changes since the early years of independence. “Back then, everyone used to say that Ukraine couldn’t survive five minutes without Russian gas or Russian markets,” he recalls. “But Ukraine has proved everybody wrong and is growing used to life without Russia.” The diverging paths taken by post-Soviet Russia and Ukraine is a recurring theme in Winkelmann’s reminiscences. Having worked and traveled extensively throughout both countries during the past thirty years, he identifies a number of striking differences that challenge old stereotypes of Slavic broth58

erhood and help to explain the growing distance between modern Russia and Ukraine. “The Ukrainian mentality was always more Western, even in the 1990s,” he says. “Under Kuchma and Yushchenko [Ukrainian presidents from 1994 until 2010], Ukrainians began to embrace personal freedoms, democracy, and private enterprise. By the time Viktor Yanukovych came to power, it was too late to reverse it all.” Over the past three decades, Winkelmann has witnessed the transformation of the Ukrainian business climate as the country has moved from the Soviet economic model dominated by state ownership to a growing role in the global economy. “In the early days, everything was still very much oriented towards Russia, but now Ukraine exports to Europe, Asia, the Middle East, and beyond. Ukraine’s export portfolio has undergone drastic changes, with a growing emphasis on agricultural produce and gradual move towards more value-added exports.” Winkelmann believes the historic shocks of 2014 played a decisive role in determining Ukraine’s future direction. “Every crisis creates new opportunities,” he says. “2014 forced Ukrainians to seek out new alternatives to close cooperation with Russia. Without Russia’s self-defeating attack on Ukraine, this might otherwise never have happened.” It was during the tumultuous events of 2014 that Winkelmann chose to set up his own outsourcing and consulting company with colleague Sven Henniger. Despite the economic and political instability of the intervening seven years, the German remains optimistic about Ukraine’s prospects. He points to encouraging fundamentals such as the effective reform of the Ukrainian banking system and the establishment of adequate international currency reserves, and cites Ukraine’s slow but steady progress in international business rankings such as the World Bank’s annual “Doing Business” survey. “Ukraine’s international image has also improved a lot in recent years,” Winkelmann notes. “In the 1990s, Ukraine had no international profile to speak of and most people still regarded the country as part of Russia. That is no longer the case. Ukraine has become much more visible.” Looking ahead, the long-term German expat identifies a number of factors that are likely to drive investor interest in Ukraine. He sees huge opportunities in a range of sectors including agriculture, IT, light industry, and green energy, while also arguing that geography is strongly in Ukraine’s favor. “Thanks to its advantageous location, Ukraine is emerging as a hub between east and west with exciting manufacturing potential. Ukraine is on the doorstep of the EU, and COVID has reminded everyone of the importance of closeness.” He believes Ukraine’s ongoing infrastructure upgrade will prove attractive to international investors, and says the business climate is also improving, with favorable terms such as low taxes and competitive costs. Meanwhile, Ukraine’s decentralization reforms are creating incentives for local authorities to accommodate investors. In terms of standards of living, Winkelmann says today’s Kyiv is light years away from the Soviet city he first encountered and points out that similarly standards of living are also available in other major Ukrainian cities such as Lviv and Odesa. “The quality and range of services on offer is recognizably European, and so is the mentality.” Winkelmann believes Ukraine’s general geopolitical trajectory is perhaps the most encouraging indicator of all. “EU and NATO membership now enjoy overwhelming public support,” he notes. “For the Ukrainian people, there is no going back to the authoritarianism of old.” www.bunews.com.ua

Photo: Oleh Pavliuchenkov

germany in ukraine

Ukraine’s record-breaking conductor prepares to make history with Wagner Ukrainian classical music superstar Oksana Lyniv has spent much of her career challenging stereotypes and breaking down barriers. Four years ago, she made headlines as the first woman to be named chief conductor of the Graz Opera and Graz Philharmonic Orchestra. This July, she is poised to enter the history books again as the first female ever to conduct at one of classical music’s most celebrated events, the Bayreuth Festival in Germany.

krainian conductor Oksana Lyniv will make classical music history in summer 2021 when she becomes the first woman to conduct at Germany’s world-renowned Bayreuth Festival, which celebrates the works of the legendary Richard Wagner. Lyniv is set to open this year’s festival with a production of Wagner’s The Flying Dutchman. Lyniv’s headline-grabbing star turn at the Bayreuth Festival is set to be the latest in long line of stunning achievements that illuminate the remarkable career progress of the 43-year-old native of western Ukraine. Born in Brody in 1978 into a family of musicians, she spent her childhood immersed in music before entering Lviv’s Music School in the early 1990s amid the upheavals of Ukraine’s fledgling independence. The Ukrainian classical music star first conducted an orchestra at the tender age of 16. Despite reservations from some who felt there was little chance of building a serious career as a female conductor in a field dominated by men, Lyniv persevered. She gained her first :

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: international recognition in 2004, taking third place at an interna-

Photo: Serhiy Horobets

tional conducting contest in Bamberg. This enabled her to continue her studies and gain further experience in Germany. Lyniv significantly enhanced her reputation during an extended residency as associate chief conductor at Odesa Opera House that lasted from 2008 until 2013. While performing in Ukraine’s Black Sea port city, she won admirers for a number of daring premieres. Her career then took her back to Germany and the Bavarian State Opera. The talented Ukrainian entered the classical music history books

in 2017, when she became the first female to be named chief conductor of the Graz Opera and the Graz Philharmonic Orchestra. Lyniv’s upward trajectory has continued ever since. She is now widely recognized as an A-lister in the world of classical music, and was named Best Conductor at the OPER! Awards in Berlin in November 2020. As she prepares for this summer’s Bayreuth Festival, Business Ukraine magazine spoke to Lyniv about her barrier-breaking career in classical music and asked her what she thinks Richard Wagner

Oksana, you will make history this year as the first woman conductor ever to take the podium since the Bayreuth Festival was founded in 1876. What are your thoughts as you look ahead to the festival? Bayreuth is, of course, something akin to a sublime Olympus in the world of classical music. It is a very great honor for me to conduct

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at the festival. I am also acutely aware that as a conductor at such a prominent event, you are even more in focus and expectations will be exceptionally high. I am conscious of this responsibility and want to deliver the best possible performance of an opera that is very special to me personally. How did the invitation to perform at Bayreuth come about - was it something that had been discussed for a long time, or did it come as a surprise? :

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himself would have had to say about her upcoming historic appearance at the festival he founded almost a century and a half ago.

“Ukraine has so much to be proud of culturally and so much to offer to the rest of the world” : I cannot give you an exact answer as to when the idea first began to take shape, but I can confirm that the invitation was not recent news for me. I think that the management team of the Bayreuth Festival first noticed me during my time at the Bavarian State Opera [Lyniv joined the conducting staff in 2013]. In any case, by 2018 I had already received the invitation to conduct the Flying Dutchman in 2021. What do you think Richard Wagner would have thought about the decision to finally invite a female conductor to star at the Bayreuth Festival? Richard Wagner occupies a very special special place in the world of classical music. In the former Soviet Union, where I was born, his music suffered from negative connotations due to associations with Germany and WWII. As a result, I rarely encountered Wagner during my childhood years. The first thing I remember hearing about Wagner was during my college days, when I was told that one of the reasons he was performed so rarely was because his operas were so long and too complicated. But this complexity was precisely what spurred me on to get to know him as a composer. I would sit for days pouring over piano reductions of his operas borrowed from the library and listening to old vinyl records, totally absorbed in his masterpieces. At the time, I could not have dreamed that one day I would be able to conduct Wagner’s operas myself. The fact that I will be the first ever woman to conduct at this magical place is very special indeed for me. In most of his operas, Richard Wagner wrote key roles for women and typically depicted them in an extremely emancipated manner. That is why I genuinely believe he would be proud to know that, almost 140 years after his death, the honor of bringing his wonderful music to life at his festival will finally fall to a woman. You have had a groundbreaking career so far and were also the first female to be named chief conductor of the Graz Opera and Graz Philharmonic Orchestra. Did you consciously set out to challenge gender barriers and stereotypes in the classical music world? Ever since I started out on my path as a professional conductor when I was 18 years old, I have always aimed high. At the same time, I cannot say that I have consciously sought to challenge of overcome any particular gender stereotypes along the way. For me, the main motivation has always been a sincere passion for classical music and a sense of awe at the profession of conductor. Being able to lead the performance of the world’s greatest musical masterpieces is a dream come true, and I have been consumed by this calling since my early student days. I am also conscious of the huge responsibility that comes with pursuing a career as a conductor. In order to be a top conductor, you must be a leader and a professional in every sense. There are no gender or age privileges in this profession. How conscious are you of your position as a role model for girls looking to become conductors? I am always happy whenever I can help, inspire, or share my experience with the younger generation. Naturally, this also applies to young ladies who are 64

interested in becoming conductors. When I was a student, there were no such role models for me to study or take inspiration from. During the challenging early years at the very beginning of my career, there weren’t any female conductors in my country who I could look up to, and not even any other female classmates studying alongside me. At the time, it was not something that really bothered me. It just seemed normal, so I didn’t dwell on it. If anything, it made me even more determined to develop myself and learn as much as a possibly could. While I am pleased if I can serve as a role model for emerging talents, it saddens me that many potential future conductors and musicians have been unable to gain priceless experience over the past year due to the restrictions imposed as a result of COVID-19. This pandemic period has surely done a lot of damage to talents that might otherwise have been destined to emerge as the great stars of the classical music scene in the years ahead. The formative experiences that they have been deprived of over the past year can never be truly compensated. You are one of Ukraine’s most successful and high-profile cultural ambassadors. What does this status mean to you and how do you seek to represent Ukraine on the international stage? Representing Ukraine to global audiences and promoting culture inside Ukraine itself are both very important missions for me. Ukraine spent hundreds of years without statehood or sovereignty. This long struggle for national self-determination has inevitably had a very sad and negative impact on Ukrainian culture, especially in terms of music. As a result of the country’s troubled past, today’s Ukraine remains relatively unknown to the outside world, even in nearby Europe. My goal is to introduce international audiences to Ukrainian composers, Ukrainian music, and Ukrainian talent. We have so much to be proud of culturally and so much to offer to the rest of the world. This was the thinking that motivated me to organize and lead two classical music projects, the LvivMozArt international classical music festival in Lviv and the Youth Symphony Orchestra of Ukraine. The Youth Orchestra initiative brings together young musicians from across the country in what has become Ukraine’s most internationally successful youth ensemble. What is your advice to young Ukrainians considering a career in classical music? I would tell them that the key to success is to constantly push the boundaries of their own abilities and possibilities. Never stop learning. Challenge yourself with ambitious goals and try to create your own daring projects. Knowing how talented they are, I wish more young Ukrainians saw themselves as competitive on the global stage. In recent years, I have seen a lot of amazing young Ukrainian musicians secure places at some of the world’s top muscial academies in London, Madrid, Berlin, Tel Aviv, and beyond. I follow their careers and try to keep in contact with many of them, because I understand how important this kind of professional and personal support can be for young people.

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Photo: Oleksandr Shamov

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Coca-Cola deploys ambitious production expansion plan in Ukraine Despite the COVID-19 crisis, Coca-Cola HBC Ukraine is launching the expansion of production. Over EUR 25 million will be invested in the modernisation of one of Coca-Cola HBC’s largest production sites in Europe in 2021-22, its Kyiv plant. This investment program confirms the importance of the Ukrainian market for the company as well as its focus on innovation. The first stage of this investment initiative was deployed in January 2021. A high-speed canning line was launched with an investment of EUR 10 million. The modernisation process has resulted in an 80% increase in efficiency, bringing the capacity of the canning line to 90,000 cans per hour while energy consumption remains unchanged. Coca-Cola HBC Ukraine constantly invests in production capacity and equipment upgrades. Coca-Cola HBC’s total direct foreign investment in Ukraine since its establishment in 1992 amounts to USD 466 million. The Kyiv plant has been in operation for over 20 years. Currently, the plant’s 11 production lines produce beverages in PET and glass bottles, cans, and Tetra Packs. The company has a wide portfolio of beverages including sparkling soft drinks, juices, water, energy drinks and ready-to-drink tea. Coca-Cola HBC Ukraine produces drinks for the Ukrainian market as well as for export to Armenia, Moldova and Belarus. The exports of Coca-Cola HBC accounted for 6.8% of the total exports of soft drinks, mineral waters, and juices from Ukraine in 2019.

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Latest AmCham/Citi Business Climate Survey shows dissatisfaction among Ukraine’s business community The top 3 obstacles of doing business in Ukraine are the lack of rule of law, corruption, and the absence of a bold reform agenda. These are the results of our latest AmCham and Citi Ukraine survey - Business Climate Survey: A Year of Lockdown, which has just been published. The survey shows how one year of COVID restrictions has impacted businesses in Ukraine and identifies key concerns and expectations for doing business in 2021. 100 CEOs and top managers from the Chamber’s member companies took part in the survey. AmCham Ukraine has been advocating the importance of strengthening rule of law and has seen almost zero progress over the past decade. This is worrisome. The U.S. Chamber of Commerce, the world’s largest and most influential business association, has demonstrated a definitive link between rule of law and prosperity: countries that adhere to principles of good governance attract and develop top-caliber companies, which are better equipped to make long-term investments, create jobs, pay taxes, enact high labor and environmental standards, and put down roots in the communities where they operate. Another vital observation is that neither the public sector, the business community, nor civil society can singlehandedly improve a country’s commitment to rule of law. No one can ensure rule of law, eradicate corruption, and implement judicial reform apart from Ukrainians. The prosperity of Ukraine depends on Ukraine’s leadership. The country’s strategic partners, like the US & EU, can provide all necessary assistance and support at all levels. Among other key survey findings: 62% of business representatives are dissatisfied with the Ukrainian government’s performance in managing the COVID-19 outbreak, while 18% are satisfied. 60% of respondents are dissatisfied with Ukraine’s government’s commitment to supporting businesses during the lockdown, while 11% are satisfied. We asked members of the business community to name the top three things that Ukraine’s government should focus on to achieve economic recovery and growth in 2021. Among them are the following: implement real and effective judicial reform, rule of law, fair justice (74%), protect

CHECK THE DETAILED RESULTS OF THE SURVEY HERE

the population from COVID-19 through wide-scale testing, vaccination, and effective treatment (46%), and eradicate corruption (37%). According to the survey results, one year of lockdown has impacted the revenues, number of employees, and investments of AmCham member companies. 40% of members saw an increase in revenues; 37% reported a decrease. 56% of respondents indicated that their companies managed to retain employees, 24% hired new personnel, 20% had to cut staff. 19% of respondents reported that their companies increased investments in Ukraine during the lockdown, while 15% decreased. The biggest changes that AmCham member companies introduced during the lockdown were the introduction of the hybrid work environment, digitalization of workflow, development of new crisis management strategies, and introduction of resilient models that can serve clients despite the adverse circumstances. Emotional burnout, lack of teamwork, lack of communication, and digital fatigue are the biggest challenges that companies’ employees are currently facing. The top three major concerns regarding doing business in 2021 are the lack of clarity with COVID-19 vaccines, the continuation of the lockdown, and the security of employees. Only 59% of respondents plan to promote vaccination among their staff. The majority of business (60%) forecasts an increase in revenues in 2021. At the same time, 32% plan to increase the number of employees, and 39% plan to increase investments. With 43% of members being cautiously optimistic about doing business and potential investing in Ukraine in 2021, the key challenges remain the same. Businesses call upon the government to implement real and effective judicial reform, rule of law, fair justice, protect the population from COVID-19, and eradicate corruption.

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New app helps French bank in Ukraine navigate coronavirus crisis challenges Credit Agricole’s CA+ app was launched in June 2020 and proved a hit with Ukrainian clients For the past year, the coronavirus crisis has created unique challenges for businesses around the world. In the banking sector, these challenges were first felt in the retail sector, explains Galyna Zhukova, Deputy Chairman of the Board of Credit Agricole Bank in Ukraine with responsibility for retail business and network. According to Zhukova, retail banking customers tend to respond with particular caution to the onset of crisis conditions, typically reducing spending and becoming more reluctant to take on loans. This proved the case in Ukraine during 2020, but a combination of new digital tools and direct engagement with clients enabled Credit Agricole to end the year strongly and enter 2021 with an optimistic outlook. When Ukraine first introduced coronavirus lockdown conditions in March 2020, Credit Agricole responded by implementing a series of measures. A decision was taken to keep around 90% of the bank’s nationwide branch network open, with new disinfection measures introduced that meant individual branches were professionally disinfected twice daily prior to opening and during the lunchtime period. In order to minimize the need for clients to visit branches physically, the bank opted to automatically extend the expiry dates on existing banking cards. Additional services were also made available via the Credit Agricole Contact Center, allowing clients to access personal banking services without the need to travel.

Restructuring Support Zhukova notes that the onset of coronavirus lockdown measures was marked by a mood of uncertainty that left many clients with outstanding loans unsure of how long the crisis would last or whether their incomes would remain stable. “We immediately took the decision at Credit Agricole that we must be here to support our clients and help them,” she explains. What followed was an initiative to contact every 78

About the interviewee: Galyna Zhukova is Deputy Chairman of the Board of Credit Agricole Bank in Ukraine with responsibility for retail business and network

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Timely New App The biggest single development for Credit Agricole in Ukraine during 2020 was the unveiling of the bank’s new application. With the coronavirus crisis driving demand for digital banking services to unprecedented levels, the June 2020 launch of the new CA+ app proved particularly fortuitous. Zhukova says this timing was a “happy coincidence” and notes that development work on the app began one year earlier in summer 2019. The CA+ app has proved a resounding success. In the first eight months since its launch, it attracted around 90,000 registered users and entered the top three in its category for Ukraine in the Apple Store and Google Play marketplace. Zhukova at-

many different divisions of the Credit Agricole team in Ukraine, who worked closely with the bank’s in-house IT department. “We maintained a dialogue throughout the development process, both internally and with our clients. We are very happy with the result. It is an example of what can be achieved when everyone is involved,” Zhukova says.

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client who might be facing difficulties in order to offer personal consultations. This led to a large-scale loan restructuring campaign for clients who wanted to temporarily reduce monthly payments or introduce other changes to their payment plans in light of the pandemic. Looking at 2020 from the perspective of the Ukrainian banking industry, Zhukova says the year saw a number of clear seasonal patterns as clients and the market adapted to the new realities of coronavirus conditions. By the autumn period, earlier disruption became less prominent as quarantine regulations were relaxed and people adjusted their daily routines to account for the pandemic. Overall, she highlights the rise on contactless spending habits among Ukrainian consumers as a key trend. “Contactless payments have been rising sharply in Ukraine for a number of years, but in 2020 this growth accelerated due to the pandemic. We saw far more payments and transfers online, driving the rise of the Ukrainian e-commerce sector. People switched increasingly to online retail for everything, including daily essentials and food deliveries.” Indeed, consumer spending levels remained surprisingly crisis-resistant in Ukraine during 2020, with Zhukova attributing this partially to the additional disposal income in the market due to COVID-related restrictions on international travel. “People who could normally afford to travel abroad on vacation could not do so due to border closures. Instead, they spent much of this money in Ukraine, either traveling to domestic tourist destinations or on dining out and other purchases.” The robust nature of the Ukrainian banking industry was also visible in the car loans sector, where Credit Agricole has occupied the position of market leader since 2014. Zhukova says coronavirus conditions initially created inevitable difficulties that led to a temporary pause on some loan services, but these restrictions were relaxed by October. Overall, the bank issued around 6,000 auto loans in 2020, which represented approximately 40% of the overall Ukrainian market for loans to purchase new cars. This outcome was close to the result for 2019. “There were no disruptive changes due to coronavirus,” notes Zhukova. “The market, and our annual loan portfolio, remained more or less stable.”

Human Factor Looking ahead, Zhukova argues that the shift towards digital banking services over the past year of coronavirus disruption is part of a long-term trend that will inevitably continue to gain momentum in the years to come. However, she rejects zero-sum assessments of the relation-

“A successful app does not need one million different functions. It must offer the most popular services in a quick and simple format” tributes this popularity to the app’s customer-friendly emphasis on convenience and functionality. “A successful application does not need to offer one million different functions,” she argues. “It must enable users to access the most popular and frequently required services in a quick and simple format, allowing it to become an unobtrusive aspect of their everyday lives.” This user-friendly format did not come easily. “From the beginning, our objective was to achieve a maximum of intuitive simplicity,” notes Zhukova. “But of course, the more simple you want to make the app for customers, the more challenging it is from the development point of view.” This meant months spent developing the concept internally with regular input from the

ship between traditional banking branch networks and digital services. “Digital is an instrument not a strategy,” she says. “Clearly, digital services are essential and will be central to the future of the banking industry. But there must also be a human element. Our annual client surveys indicate that customers still place high value on professional advisors and personal contact. We all appreciate the convenience of digital solutions, but we are all human beings as well. When we have a problem or don’t understand something, it is very important to have a human face or voice on the phone who will take responsibility for answering our questions and solving our problems. Our strategy is to continue building long-term relationships that incorporate digital solutions.” 79

Do expats in Kyiv

pay too much rent? Many new arrivals to the Ukrainian capital are surprised to encounter relatively high residential rental rates, but there is a logic behind these prices and it is not just a matter : of overcharging expats, says Sean Almeida

real estate

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: Upon searching for long-term rental options in Kyiv, many first-time foreigners are shocked by the prices they see in terms of the quality of the accommodation that they are being offered. Almost immediately, these new arrivals tend to assume that they are being scammed by shameless real estate brokers or greedy owners, or both. This has helped fuel assumptions that expats are routinely asked to pay inflated rental rates. Faced with seemingly high rents, foreigners often resort to asking for help in expat-related groups on social media as they seek to understand where they should be looking for accommodation and how much they should realistically expect to pay. Often they say they want the “local price,” not the expat one. Equally often, they are bombarded with comments from well-meaning expats telling them that they should not pay more than USD 500 for a great place in the center of Kyiv. If they have a family and need a larger space, they might be encouraged by comments that for USD 1000 per month, it is possible to rent a “palace” in a great neighborhood. What is the truth about Kyiv apartment prices for expats, and what might make a country with a GDP per capita as low as Ukraine’s have such surprisingly high rental rates?

Demand and Supply The first thing that we should mention is that the Ukrainian real estate market is not magically immune from the laws of supply and demand. In a country with an almost catastrophic dearth of general residential housing, never mind the kind of accommodation that meets modern European quality standards, it should surprise no one that prices for good housing in Kyiv often feel out of step with the overall level of economic development in the country. 82

Today’s Ukraine has less than half as many square meters of housing per person as the European average, with twenty-three square meters per person compared to the general European figure of fifty square meters. This means that there needs to be an additional billion square meters of housing constructed in Ukraine before the country can catch up with European norms. Based on the current rate of new construction in the Ukrainian capital, which some people mistakenly call a “glut,” it will take about 70 years to reach this level. However, when you factor in the amount of currently dilapidated buildings and those that will become dilapidated in the medium-term period ahead, then the current pace of new construction per year is unlikely to ever bring Ukraine up to current European levels. With this deficit in mind, we can return to the issue of rental prices from the perspective of the broader housing market.

Hryvnias or Dollars The mid-range segment of the Kyiv property market features a lot of locals and expats who often end up competing for the same types of properties. In this segment, you have locals with solid jobs and you have expats who are paying out of their own pockets. Contrary to popular belief, the idea that all expats live right next to Golden Gate or near Kyiv’s downtown Khreshchatyk Street is not accurate. In reality, the Kyiv expat community is spread out over numerous districts of the city as well as in many of the villages the lie beyond the city limits in Kyiv Oblast. For those who know where to look, it is comparatively easy to find mid-range properties being advertised for rent that are in no way tar-

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geting the expat market. However, the bad news is that prices are still likely to be quite high. One significant difference is that properties not aimed specifically at expats are usually priced in UAH as opposed to being fixed in USD, which is often the case for a lot of apartments in the historical center where owners seek expat clients. In recent weeks, I have seen a twenty-eight square meter place in an old Soviet-era building in an average location available for UAH 11,000. Way further out near to the Kyiv ring road, I saw a forty square meter apartment in a newer building with a fresh renovation that was available for UAH 10,000 per month. Seeing these properties, you might start to suspect that the promises you read on Facebook of a great place in the historical center for USD 500 or a “palace” for USD 1000 might be a figment of somebody’s over-active imagination.

Old vs New This brings us to the higher end of the market. Here you will find expats armed with budgets assigned (often rather randomly) by their companies or embassies, alongside well-heeled locals. Who do you think ends up paying more? Many would assume it is the expats, but the answer is more complicated. Generally speaking, these two groups have quite different preferences, even if their rental budgets are exactly the same. Local clients tend to have bad memories of historical buildings in the center where they might have grown up or spent time in the transitional 1990s, so they place a high premium on newer buildings with clean entrances, shiny new lifts, underground parking, and other modern

amenities. It would not be unusual for this type of client to pay USD 4000 to USD 7000 per month for a freshly-renovated two-bedroom place, and they might even need more parking spaces for their luxury cars than actual bedrooms. On the expat side of this market, tenants tend to be more practical and often come with larger families, so the number of bedrooms will be more of a consideration. Besides that, without the memories of tough times in the 1980s and 1990s to color their thinking, many expats have a strong preference for the charm of older buildings in the historical center of Kyiv as opposed to the uninspiring apartment buildings sprouting up in random locations throughout the city. And with dozens of embassies, international organizations, and multinational companies located in the historical heart of the city, being within walking distance of work is regarded by many as the ultimate amenity in light of the ever-worsening traffic situation in Kyiv that can easily eat up hours of your day. I could write at great length about style preferences. On average, expats tend to prefer a simple Scandinavian style featuring furniture they are not afraid to sit on for fear of ruining something that costs more than their monthly salary, whereas many wealthy locals often have quite expensive tastes more reminiscent of Versailles. The average expat might balk at living in what looks like a museum, whereas a local might decry minimalist decor as overly modest. Due to these diverging preferences, bidding wars between these two groups are generally quite rare. But please note that in cases where a bidding war does break out, the local client is far more likely to win that battle.

About the author: Sean Almeida is CEO of Vestor.Estate real estate agency and has been resident in Kyiv since 2012 www.bunews.com.ua

Rethinking Yushchenko Ukraine’s third president is often dismissed as a political failure but his contributions to the country’s ongoing nation-building progress should not be underestimated

About the author: Brian Mefford is the Director of Wooden Horse Strategies, LLC, a govern-mental-relations and strategic communications firm based in Kyiv, Ukraine. He is a Senior Nonresident Fellow at the Atlantic Council. A version of this article was original published by the Atlantic Council’s UkraineAlert Service. “He plants trees which will be of use to another age,” said the Roman poet Caecilius Statius. This phrase captures the idea of a far-sighted leader who is focused on the distant future beyond their own lifetime. Those words may well be applied to Ukraine’s much maligned and often misunderstood third president, Viktor Yushchenko. With more than a decade now separating us from the end of Yushchenko’s 2005-2010 presidency, it is time to rethink his place in Ukrainian history and reevaluate his contributions to the country’s ongoing nation-building journey. As someone who has done extensive focus group work in Ukraine since 2004, I can confirm that Viktor Yushchenko conjures up very mixed emotions. Whenever I have asked Ukrainians for their impressions of Yushchenko, the most common responses range from nostalgia for the Orange Revolution to bitter disappointment. No leader before him ever inspired Ukrainians quite like Yushchenko. None dared them to hope. However, with great hope also comes great expectations. When Yushchenko took office in early 2005, he did so on a tide of history and high drama. In the 84

previous few months, he had survived a poisoning attempt, campaigned across Ukraine, led a wave of unprecedented national protests over a rigged presidential election, and ultimately won a rerun second round of voting as the world’s media looked on in amazement. Expectations were astronomical. From Day One, his presidency was proclaimed as the end of tyranny and the start of Ukraine’s procession towards membership of the European Union. However, not everyone was taken in by the euphoria. More prudent observers remembered Churchill’s famous quote after the battle of El-Alamein in 1942. At the time, the British war leader had sought to dampen expectations by commenting, “This is not the end. It is not even the beginning of the end. But it is perhaps, the end of the beginning.” Sixteen years on, it is now painfully apparent that Yushchenko’s presidency marked only the end of the beginning in Ukraine’s arduous path towards Europe. It was in Yushchenko’s single term as president that the country began to develop genuine democratic traditions and distance itself from the authoritarian political culture that had taken root elsewhere in the post-Soviet space. During this five-year incubation period for Ukraine’s fragile democracy, freedom of the press and the right to fair elections were properly cultivated and strengthened. The Orange Revolution, which Yushchenko led in 2004, was all about Ukraine making the choice to be Ukrainian and not Russian. A decade later, the Euromaidan Revolution saw Ukrainians choosing European civilization over the undemocratic Eurasian alternative favored across the former USSR. It is clear that without the Orange Revolution, there would have been no Euromaidan. Ukraine’s civil society, media, and political cultures would not have been sufficiently mature to prevail over the tyranny of the Yanukovych regime. One of the most frequently cited criticisms of Yushchenko is the myth that he facilitated the return of Yanukovych to power, first as prime minister in 2006, and ultimately as president in 2010. In 2006, Yushchenko merely obeyed his constitutional duty by submitting the nom-

inee of parliament for consideration. Nobody cheers the flawed Ukrainian Constitution, but democratic norms require adherence to the law even when it is not in one’s own self-interest to do so. In 2010, when Yanukovych defeated Yulia Tymoshenko to win the Ukrainian presidency, Yushchenko chose to endorse neither candidate. He did so with the confidence that he had raised up a nation that was now capable of defending its rights without the need for a lone leader to rally them. Yushchenko planted and cultivated the tree of Ukraine’s democracy. This was not the only tree that Yushchenko planted in the knowledge that another leader in the years to come would reap the benefit. The Ukrainian Orthodox Church received its independent recognition just over two years ago, but it was Yushchenko who first promoted this idea, and nearly succeeded in achieving it, back in 2008. Today, local administrations across Ukraine are enjoying the benefits of decentralization, which is widely acknowledged as one of the most effective reforms of the entire post-Soviet period. It was Yushchenko’s administrative and territorial reform attempt in 2005 that provided the blueprint for this success. In the first months of 2021, Vladimir Putin’s main Ukrainian ally, Viktor Medvedchuk, has been targeted by the Ukrainian authorities with a series of sanctions measures. However, it was Yushchenko who was courageous enough to first make him persona non grata at a time when Medvedchuk’s power was far greater than it is now. When Russia invaded Georgia in August 2008, it was Yushchenko who flew to Tbilisi to encourage the Georgians and warn the world that Ukraine would be next. Six years later, this warning came true. According to a popular saying in the American Wild West, “the pioneers take all the arrows.” Yushchenko’s fate is a reminder that in the “Wild East” environment of Ukrainian politics during the 1990’s and 2000’s, the situation was no different. Economically, Yushchenko had made an indel-

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opinion

ible mark on the country’s history even before he became president by launching the hryvnia currency during his time as Governor of the National Bank. He also brought inflation down from 10,000 percent to single digits and became the first prime minister to pay state salaries on time. As president, he conducted the most profitable privatization in Ukraine’s history. The 2005 sale of Kryvorizhstal brought in more money (USD 5.6 billion) to the state budget than all previous Ukrainian privatizations combined. Even more importantly, GDP grew by an average of five percent annually during the first four years of Yushchenko’s presidency. This was fueled by tens of billions of dollars in foreign direct investment (FDI) during Yushchenko’s term, which is in stark contrast to last year’s total of a mere USD 200 million in FDI. In short, Yushchenko inspired investor confidence in Ukraine. The 2008 credit crunch crisis caused economic pain across the globe, but it was Viktor Yushchenko who emerged as one of the principal political victims. The severe economic downturn that followed in Ukraine played a significant role in his eventual defeat in the 2010 election. Yushchenko’s perceived political failings have long dominated appraisals of his legacy. Most notably, he has been condemned for the incessant infighting with fellow Orange Revolution icon Yulia Tymoshenko that did so much to take the shine off Ukraine’s great democratic breakthrough during the years of his presidency. However, such shortcomings should not be allowed to obscure his transformational role in modern Ukrainian history. In hindsight, it is clear that Yushchenko’s greatest single contribution was to popularize the idea of being Ukrainian. For the first time, it was fashionable to “think Ukrainian”, to be Ukrainian, and to proudly celebrate Ukraine’s heritage. Some even refer to Yushchenko’s time in office as the “romantic period” of Ukraine’s history. They see it as a period when idealism mattered. Yushchenko wisely discerned that a nation must know its history, honor its traditions, and preserve its culture. From the restoration of historical buildings to transforming domestic and international awareness of the Holodomor, Yushchenko’s legacy will extend long after his lifetime. Ultimately, this will determine his place in Ukraine’s national story. Yushchenko indeed planted many trees, “which will be of use to another age.”

Ukrainian IT industry exports grew by 20.4% in 2020 to top USD 5 billion for the first time

While businesses around the world are counting the cost of a year disrupted by the unprecedented challenges of the COVID crisis, Ukraine’s IT sector continues to go from strength to strength. Recently released annual figures for the Ukrainian IT industry underline its world-beating performance. Ukrainian IT exports grew by 20.4% in 2020, according to economic data from the National Bank of Ukraine. This USD 853 million year-on-year increase pushed the sector’s annual export total beyond the USD 5 billion mark for the first time. The IT industry’s strong showing bucked a broader downward trend elsewhere in the Ukrainian economy. According to the latest National Bank estimates, Ukraine’s GDP declined by 4.4% in 2020 following four consecutive years of growth. Meanwhile, the country’s overall exports fell by 4.6%. Based on these recent figures, the Ukrainian IT industry now accounts for 8.3% of total exports. This makes the IT sector one of the key engines driving the Ukrainian economy and places it closer than ever to traditional heavyweights such as agriculture and metallurgy in terms of importance. The Ukrainian IT industry’s 2020 growth represents the latest stage in a remarkable success story that first began at the turn of the millennium before gathering pace over the past ten years. Less than a decade ago in 2013, the IT sector accounted for just 1.6% of Ukrainian exports, but this share has now undergone a fivefold increase. The industry’s apparent immunity to the recent COVID crisis is not entirely unprecedented. Ukraine’s IT export volumes have been increasing steadily since 2014 despite the extreme turbulence generated by the Euromaidan Revolution and the ongoing Russo-Ukrainian War. Entire regions of Ukraine have been under Russian occupation for the past seven years, but the country’s IT industry has continued to achieve consistent levels of annual growth. Are Ukraine’s current levels of IT industry expansion sustainable? The president of the American Chamber of Commerce in Ukraine, Andy Hunder, believes much will depend on the approach the government adopts towards the country’s booming IT sector. “What helped achieve this year’s impressive results? Minimum red tape, the professionalism of Ukraine’s IT specialists, and a stable industry-wide tax policy,” he notes. “It is vital to ensure sustainable and transparent conditions for the IT sector to stimulate further growth and development. Namely, this means preventing increased regulation. It is also essential to guarantee IT companies freedom of their activities, business models, and forms of interaction with human capital. IT companies must be safeguarded from unlawful interference in legitimate business activities.” While the absence of state interference is widely recognized as vital for the further development of Ukraine’s IT sector, the country must also find the necessary human resources to maintain current robust growth rates. This is far from assured. Many universities and specialist training institutes have rapidly expanded their IT www.bunews.com.ua

tech

Ukraine’s IT sector defies COVID crisis courses in recent years, but they are still struggling to keep pace with demand for qualified professionals. Current projections indicate that Ukrainian universities will be producing around 20,000 IT specialist graduates annually by 2024. However, this figure is significantly lower than the anticipated industry requirement of 30,000 to 50,000 new specialists per year. In theory, it should not be too difficult to convince young Ukrainians to pursue a career in the IT sector. Typical salaries are many times higher than the national average, while the industry’s overwhelmingly international client portfolios help insulate Ukrainian IT companies against currency exchange rate fluctuations and other unwelcome forms of domestic economic instability. With approximately 200,000 IT specialists, the sector is already a significant employer, particularly among younger Ukrainians. Ukrainian IT industry hubs such as Kyiv, Lviv, Kharkiv, Odesa, and Dnipro now boast an increasingly visible and upwardly mobile class of IT professionals. Indeed, there are already enough IT specialists in most major Ukrainian cities to influence local real estate markets and fuel the development of sophisticated hipster cafe and bar cultures. This prominence is adding to the attractiveness of the IT industry as a career choice. French tech executive Dominique Piotet believes the Ukrainian IT industry’s talent pool and adaptability have helped it to thrive in the COVID conditions of the past twelve months. Piotet spent seventeen years in Silicon Valley before coming to Kyiv in 2019 to take up his current post as CEO of Ukraine’s flagship innovation park, UNIT.City. He says that despite some initial hiccups, the pandemic has helped Ukrainian IT companies appreciate the advantages of their long-distance relationships with clients, resulting in a year of strong growth. Nevertheless, he cautions that Ukraine still needs to see greater investment in IT companies before the industry can approach its true potential. “This year’s performance is proof of the impressive tech talent in Ukraine and the great existing ecosystem of outsourcing companies in the country. However, in order to make the most of Ukraine’s IT industry for the country’s economy, we need to see the growth of product companies who are more capital-intensive. This is still one of the components that is lacking in today’s Ukrainian IT sector.” Diversification away from the current emphasis on outsourcing has long been a topic of discussion among IT professionals. Ukraine has earned a reputation in recent years as one of the world’s leading IT outsourcing destinations, but many feel it is time for the country to move up the tech food chain. This progress will depend on a number of factors including investment, government regulatory interventions, and a sufficient supply of qualified young professionals entering the industry. Despite these challenges, the current outlook remains highly favorable. With a growing global reputation and soaring export figures, Ukraine’s IT industry is the standout performer as the country looks towards a post-pandemic economic recovery.

opinion

Ukrainian parliament finally moves to end multi-voting The practice of voting for absent MPs has made a mockery of Ukrainian democracy for decades

Ukraine scored a small but potentially significant victory in the battle against political corruption on March 2 with the launch of a new voting system in the country’s parliament that should put an end to the widespread practice of Ukrainian MPs voting on behalf of absent colleagues. Parliamentary deputies flooded social media with photos and videos following the early March presentation of the new voting system, which now includes an additional sensor feature. In order to cast their vote, MPs must activate the sensor with one hand while voting with the other. Crucially, they are obliged to keep the sensor activated throughout the duration of the voting period, thereby preventing them from voting on behalf of neighboring MPs. “Unless you know how to vote with your feet, it’s now physically impossible [to multi-vote],” noted Ukrainian MP Oleksandra Ustinova of Holos party. The Ukrainian parliament has long been plagued by incidents of multi-voting. Known locally as “Knopkodavstvo” (“buttoning”) or “Piano-voting”, the practice involves MPs using the parliamentary cards of non-attending colleagues to register votes. It has proven convenient for parties across the political spectrum, allowing them to harvest votes and cobble together majorities amid the often rapidly changing alliances and shifting sands of Ukraine’s diverse multi-party parliamentary system. While such conduct has always been against parliamentary regulations, the authorities have often appeared powerless to prevent frequent flagrant examples. Indeed, over the years, scenes of MPs casually voting for no-show colleagues have come to be regarded as a symbol of Ukraine’s robust but 88

often dysfunctional democracy. If the country’s lawmakers can routinely break the law while in the process of passing laws, it is hardly surprising that corruption continues to flourish in other areas of public life. The introduction of a sensor function is the latest in a long line of attempts to outlaw multi-voting. Efforts began in 2008 when the parliamentary speaker at the time, Arseniy Yatsenyuk, first sought to introduce a sensor system. However, the proposed format was found to be technically flawed and vulnerable to abuses. Once these issues had been addressed, the initiative fell victim to a range of stalling tactics, legal challenges, and other contrived obstacles. Multi-voting next appeared on the agenda in the immediate aftermath of the 2014 Euromaidan Revolution. With demands for reform dominating Ukraine’s post-revolutionary political landscape, there were calls to take decisive action against multi-voting. A tender was announced for a new parliamentary voting system, but no funding was ever allocated. Following Volodymyr Zelenskyy’s presidential and parliamentary election successes of 2019, the piano-voting issue once more began to attract attention. In December 2019, MPs from President Zelenskyy’s Servant of the People party were instrumental in passing a law that introduced criminal liability for multi-voting. However, this failed to produce the anticipated prosecutions and had little discernible impact on actual instances of multiple voting in parliament. After years of delays, excuses, and false starts, why

did parliament finally introduce an effective solution to the problem of multi-voting in spring 2021? One of the catalysts appears to have been the scandal over a late 2020 parliamentary vote to confirm Serhiy Shkarlet’s appointment as Minister of Education and Science. Shkarlet was widely seen as a dubious choice for a ministerial role, with many questioning his academic record and his ties to the disgraced administration of Viktor Yanukovych. Despite these concerns, Shkarlet’s appointment was approved by the thinnest of margins. However, the legitimacy of the vote was subsequently thrown into doubt by claims that eight MPs from the pro-Kremlin Opposition Platform-For Life party had backed the controversial candidate despite being absent during the ballot. The ensuing furor put multi-voting firmly back on the political agenda and paved the way for the apparent breakthrough in early March. The sensor voting system launched this spring is not in itself new. On the contrary, it utilizes the same sensor technologies that were first installed in the Ukrainian parliament back in 2008 but never activated. What’s changed is the political will to finally tackle multi-voting. This may be an indication of the evolving balance of power within parliament. Some suspect that the decision to proceed with sensor-backed voting reflects the growing political ambitions of Parliamentary Speaker Dmytro Razumkov, the person most directly responsible for the initiative. Razumkov’s profile is rising and his name is popping up with increasing frequency as a potential future presidential candidate. Being seen as the man who brought the debacle of piano-voting to an end would certainly boost his standing among the Ukrainian electorate, both as a reformer and as a politician capable of getting things done. “Politically speaking, the introduction of sensor voting can be seen as a signal from Mr. Razumkov, who has suddenly decided to take this step after a year and a half as parliamentary speaker and at a time when his relationship with President Zelenskyy is deteriorating,” commented European Solidarity MP Oleksiy Goncharenko. Regardless of the political motivations behind the move, it is a clear win for Ukrainian democracy. For years, multi-voting made a mockery of Ukraine’s democratic credentials and undermined the authority of the country’s parliament. Sensor-protected voting is not a panacea, but it is a small step in the right direction that mirrors Ukraine’s broader embrace of parliamentary traditions. www.bunews.com.ua

society

English language initiative aims to help

Ukrainian veterans enter civilian life US-based NGO seeks to empower Ukrainian military personnel with language skills

About the author: Tetyana Shea is President of the People of Ukraine Foundation. For further information please email the Foundation via people.of.ukraine@verizon.net

Seven years since the outbreak of hostilities with Russia, Ukraine is still coming to terms with the implications of a conflict that has left its mark on many different aspects of contemporary Ukrainian society. One of the most immediate challenges is meeting the medical, psychological, and material needs of a generation of veterans with representatives in virtually every city, town and village across the country. Ukrainian military veterans transitioning into civilian life often face many difficulties. Research shows that veterans who had an emotionally traumatic experience while serving or those who suffered a serious service-related injury can face particularly significant challenges as they attempt to reintegrate and reengage. While military service provides veterans with countless skills and opportunities to build their abilities, figuring out how to translate these into profitable employment in civilian life can be a complex and daunting task. For many veterans, the transition process could be improved by focusing and developing broader life skills. The US non-governmental organization “People of Ukraine” is attempting to tackle this issue with its “Hire Military Veterans of Ukraine Initiative.” The goal of this initiative is to empower Ukrainian military veterans and their spouses to succeed in the civilian workforce, while at the same time recognizing their distinguished con90

tribution to a free and prosperous Ukraine. Why are these Ukrainian military veterans of value to prospective employers? There are many widely recognized reasons. Ukraine’s veterans often excel at leadership and teamwork. Military experience produces individuals who work to earn the respect of their peers and understand how to bring people together to pursue common goals. They know how to lead by example as well as through direction, delegation, motivation, and inspiration. They also often have a range of transferable talents and knowledge. Veterans typically have well developed problem-solving skills and a demonstrated ability to quickly learn new skills and concepts. They offer integrity and understand the importance of accountability in the workplace. In addition to dealing successfully with the standard issues of personal growth, many Ukrainian veterans have also triumphed over great adversity. While the Ukrainian government provides some benefits for the country’s military veterans, the state does not typically help develop broader life skills such as English language proficiency and basic computer literacy. However, these tools can significantly improve employment prospects. Because many veterans transition back into the civilian workforce between the ages of 30 to 40, they must acquire or improve their professional qualifications and skills in order to compete successfully on the local job market. With this in mind, the People of Ukraine Foundation has been providing an English language learning program for Ukrainian military veterans since September 2019 using the web-based video conferencing tool Zoom. Each course duration is 20 weeks, which includes 40 lessons. Lessons are held twice a week, with each lesson including 45 minutes of direct instruction. Education materials are professionally developed, designed, and organized with eye-catching presentation slides for this unique training audience. During each class, additional materials are integrated such as videos, audio books, effective language learning applications, internet programs, and a range of visual tools. Lessons include creative dialogues and various genres of reading materials along with an additional focus on stimulating publications, idioms, and quotes. Now in its second year, this tailored English lan-

guage learning program continues to see an increase in participants. The initiative aims to improve participant communication skills and English language knowledge in order to facilitate their successful transition to civilian careers. In addition to the English language component, the program has also demonstrated positive results beyond language skills. Many participants report developing greater confidence and poise. Veterans also say the course helps them to better understand the specific requirements to move forward in their transitions to civilian life. Furthermore, the participant network created over “Zoom” facilitates a sense of community that some veterans lack after completing their service. This year, our English Language Program included 32 military veterans and family members. Some participants had physical disabilities and one was registered blind. Despite these challenges, all proved to be very active, capable, resilient, hardworking and focused people who believe that life continues after demanding military service. The program they completed included resume-building assistance in English, language completion certificates, and advocacy for employment. With tens of thousands of Ukrainians leaving military service and seeking to move on with the next stage of their lives, this program is currently in high demand throughout the combat veteran community. There is therefore an urgent need for increased financial support so that it can be expanded to meet demand. More professional language instructors are needed to assist as well as volunteers for conversational practice. Another important program under development is “Basic Computer Skills for Military Veterans and Families of Ukraine.” As the name suggests, this program aims to develop and improve basic computer literacy among Ukrainian military veterans. These new skills have a range of direct applications and everyday uses as well facilitating resume-building and enabling second careers in an office setting. The foundation seeks support from employers who are interested in hiring deserving veterans. We also welcome sponsors interested in helping to broaden the English language program and support the launch of the new computer literacy initiative. www.bunews.com.ua

society

Maidan’s metamorphosis mirrors Ukraine’s national coming of age The dramatic post-Soviet transformation of Kyiv’s central square tells the story of modern Ukraine

Kyiv’s Independence Square is probably the most famous location in Ukraine. Universally known by its Ukrainian-language name of Maidan Nezalezhnosti or simply “Maidan”, it has achieved a remarkable degree of international recognition as the venue of not one but two post-Soviet revolutions, and has lent its name to a grassroots form of protest politics that continues to give dictators across the former USSR nightmares. As a symbol of Ukrainian independence, nothing compares to Maidan. It was not always this way. Indeed, during the early years of Ukrainian statehood, Maidan was in many ways an accidental monument to the incompleteness of the newly independent country’s break with the Soviet past. When the USSR collapsed in 1991, the giant Lenin monument that had dominated the square for much of the Communist era was removed from its plinth and the name was changed from October Revolution Square to Independence Square. However, other symbols of the Soviet epoch lingered on for years, serving as a tongue-in-cheek commentary on Ukraine’s claims to sovereignty at a time when it often felt like all roads still led to the Kremlin. Until 2001, the hotel complex that dominates the skyline behind the square was called the Hotel Moscow. During preparations to mark a decade of Ukrainian independence, embarrassed officials decided that this Moscow branding was somewhat inappropriate for the country’s central square, and hurriedly changed the name to Hotel Ukraine. Meanwhile, a massive hammer and sickle Soviet crest carved in stone on the facade of the Trade Union Building continued to loom large over the north side of the square until 2003, when it was finally removed on the eve of independence day celebrations. In those early days, Maidan carried no special significance. It was an anonymous public space popular among weekend strollers that also served as a no-frills concert venue and impromptu taxi rank. Taxi drivers were attracted by the opportunity to gawp at a giant TV erected on the spot where Lenin once stood, which screened a strangely apt combination of cage-fighting and catwalk shows that captured the Weimar mood of the period. The 2004 Orange Revolution was a watershed moment in Maidan’s metamorphosis, imbuing the square was a sense of dignity and gravitas it had previously lacked. The mass rallies of the Orange Revolution were not the first political protests to take place on the square – that honor belonged to the student demonstrations of October 1990 that helped pave the way for 92

Ukraine’s August 1991 declaration of independence. However, the uprising of 2004 completely dwarfed anything that had come before it, with mass protests attracting hundreds of thousands of participants and captivating global audiences. Following the Orange Revolution, it became increasingly common for people to use the term “Maidan” in a political context. Nevertheless, it would take another decade before the square completed its transformation. In late 2013 and early 2014, Maidan once again became the focal point of a popular uprising. By now, the square’s associations with political activism were such that this new protest movement became known simply as “Euromaidan”. Unlike 2004, it did not end peacefully. In February 2014, dozens of protesters were gunned down in the immediate vicinity of the square as the uprising reached a bloody climax. This tragedy left an indelible mark on Ukraine and served to consecrate Maidan as a sacred place at the heart of the Ukrainian national story. Since the Maidan Massacre of early 2014, the square has become something more akin to a shrine. It no longer hosts glitzy pop concerts and rowdy public holidays. Instead, Maidan is now often the scene of memorial tributes to fallen soldiers and vigils marking events of national significance. The square also routinely features on the itineraries of visiting foreign dignities, who come to pay their respects to those who died on the spot seven years ago in defense of democracy. Maidan is not universally revered by all Ukrainians. For the many who reject the popular uprisings of 2004 and 2014, the square carries negative connotations as a place where a vocal minority was able to seize control of the state and steer Ukraine in the wrong direction. There is also considerable cynicism towards the Maidan phenomenon, with no shortage of populists and opportunists ready to exploit the powerful associations of the square in order to advance their own agendas. Despite these reservations, few would dispute that over the past three decades, Maidan has become synonymous with Ukraine’s state-building journey. In an era where the search for unifying symbols from the country’s troubled past has often sparked bitter memory wars and poisoned the political climate, Maidan’s evolution from ambiguity to iconic status offers an important echo of Ukraine’s own national coming of age. www.bunews.com.ua

SPRING SEASON WITH CITRONELLE Kyiv French restaurant Citronelle is ready to welcome you this spring season for a stylish dining experience in a COVID-compliant environment. Everything about Citronelle, from the venue’s intimate interior and abstract artworks to its intricately crafted dishes featuring authentic imported French ingredients, is designed to take guests on an unforgettable culinary journey.

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The restaurant has a new spring 2021 menu offering a range of seasonal delicacies, and regularly features cozy cultural events such as jazz evenings. With spring now in the air, you can also look forward to the Citronelle terrace, with views of the nearby Kyiv Opera House.

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Guests of Citronelle can enjoy new limited edition decorative porcelain plates featuring designs created by Citronelle founder Mariia Didkovska together with crockery brand Ganka for Home. This seasonal initiative is set to run throughout 2021, with new plates presented during the course of the year. The high-quality plate collections are available for purchase.

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Lovers of luxury will find a home-from-home at Citronelle this spring, especially as the venue is the first restaurant in the former USSR to boast its own signature champagne prepared especially for Citronelle by France’s Pierre Morlet champagne house, which traces its roots in the industry back for generations. The Pierre Morlet collection at Citronelle includes four varieties of champagne. Why not try them all this spring?

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Citronelle can also come to you! The French restaurant offers to create an authentic dining experience in any format and for unlimited numbers of guests at your home or preferred venue in the Kyiv region. This all-inclusive catering service comes complete with internationally-trained Citronelle service staff and a full selection of menu options ranging from light buffet-style delicacies to sumptuous banquets.

Citronelle 23 Bohdan Khmelnitskiy Street, Kyiv Restaurant reservations: 067-2171420, 044-4993936 All-inclusive catering: 050-932-6488

TOP 100 honors Ukraine’s financial sector leaders Ukrainian ratings publication TOP 100 began the 2021 spring season in style by welcoming members of the country’s financial services industry to a gala award ceremony in Kyiv. The annual event,

which was held on 3 March at Veranda on the Dnipro restaurant in the riverside district of the Ukrainian capital, was attended by many of Ukraine’s leading financial sector executives.

networking events

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and finally

Wladimir Klitschko becomes a Harvard heavyweight

Ukraine’s former boxing world champion Wladimir Klitschko dominated the heavyweight division for over a decade and is now looking to share his unique insights with global audiences. Since hanging up his gloves in 2017, the famously erudite pugilist has set his sights on contributing to the world of academia. In February 2021, Klitschko achieved a significant milestone in his quest for academic achievement when Harvard Business School published his “Challenge Management” philosophy of life as a case study for students. “Wladimir Klitschko’s ability to adapt, reflect, and reinvent himself is essential and

more in demand than ever in this century. I have enjoyed working on this project and am looking forward to teaching it,” commented Boris Groysberg, Professor of Business Administration at Harvard Business School. In a social media post, Klitschko expressed his sense of gratitude at having the opportunity to share his life experiences and personal perspective with Harvard Business School students. “I’m honored and privileged that my words can be used to inspire others, and used as an educational training method,” he noted. “It’s extremely rewarding to know I can give back in this way.” The younger of Ukraine’s celebrated Klitschko

boxing brothers, Wladimir enjoyed a reputation throughout his career as one of the most educated boxers in the business. This combination of brains and brawn earned him the ringside nickname “Dr. Steelhammer” during an extended reign as world heavyweight champ that saw him break record after record. Wladimir defeated a total of 23 boxers in world heavyweight championship bouts, breaking the all-time record that had previously been held by the legendary Joe Louis for over six decades. He remains one of Ukraine’s most famous faces and is particularly popular in Germany, which served as a home-fromhome for much of his boxing career.

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