Issue 01/2018
TOP 50 UKRAINIAN LAW FIRMS
BUSINESS UKRAINE 01/2018: This month we present the annual Top 50 Law Firms in Ukraine ranking and offer insight into the Ukrainian legal industry as it plays a key role in efforts to reform Ukraine’s judiciary while adapting to the changing demands of the country’s post-Maidan economy. Special thanks to our Legal Industry issue sponsor EVRIS law firm
Russia’s retreat from Ukraine is a tale of unforced errors As the undeclared war between Russia and Ukraine enters its fifth year, it is becoming increasingly difficult to remember a time when the two countries were not at each other’s throats. The toxic present has succeeded in poisoning our perceptions of the past. Instead of the old odes to eternal Slavonic fraternity, the talk now is far more likely to be of Muscovite oppression and treacherous Ukrainians. Oceania has always been at war with Eastasia. With ancient animosities amplified by the ongoing conflict, it is tempting to regard the collapse of the Russian-Ukrainian relationship as somehow inevitable. This is simply not true. Following the Soviet collapse, Ukraine was one the few countries where Russia possessed the requisite soft power tools to maintain its influence. While Ukrainian society emerged from the Soviet era harboring numerous grievances against Moscow, the strong ethnic, religious, social and linguistic ties binding the two countries at the grassroots level meant that no other Soviet republic felt closer or more intimately familiar to Russia than Ukraine. In the years following 1991, Ukrainians and Russians continued to have much in common. They watched the same TV shows, listened to the same pop music and laughed at the same jokes. In many respects, the Ukraine of these early post-Soviet years was not so much a Russian colony as a Russian clone. The country had gained independence but had not yet found an identity of its own. By 2001, Ukraine’s second president Leonid Kuchma felt sufficiently concerned to write a book entitled, “Ukraine is not Russia”. What happened to transform this “Russia-lite” version of Ukraine into the strikingly patriotic nation of today? The rise of Ukraine’s first post-independence generation played a crucial role merely by growing up with a non-Soviet sense of self. However, this generational shift would have been far slower and less pronounced were it not for Russia’s inexplicably self-defeating approach to all things Ukrainian. Since the dawn of the Putin era in 2000, the Kremlin has pursued policies to-
wards Ukraine that have often appeared tailor-made to insult and unite Ukrainian society in equal measure. Putin’s decision to visit Ukraine on the eve of the 2004 presidential elections and lecture the country on how to vote was a case in point. This characteristically chauvinistic display infuriated even the most apolitical of Ukrainians, helping to spark the Orange Revolution. Nine years later, as Ukrainian society debated a possible EU Association Agreement, Russia responded by unilaterally launching a trade war. There was no attempt to charm Ukraine or appeal to the deep ties between the two nations. Instead, Russia threatened dire consequences and assured Ukrainians that Europe did not want them. The ultimate example of Russia’s tone-deaf approach to Ukraine came in spring 2014 when the Kremlin launched a hybrid invasion based on the delusion that Russian-speaking Ukrainians would flock to Moscow’s banner. This blunder was the final nail in the coffin of Putin’s Ukraine policy, but it was very much in line with all that had gone before. Remarkably, Russia remains apparently incapable of learning from these failures. In March 2018, the Kremlin once again succeeded in uniting Ukraine against it by suddenly cutting gas supplies. Ukrainians responded with emergency measures to reduce energy consumption. They will long remember how close Russia’s actions brought them to humanitarian catastrophe. It is hard to avoid the conclusion that Russia simply cannot come to terms with the idea of a genuinely independent Ukraine. Instead, the Kremlin insists on treating the country like a recalcitrant child despite the obviously detrimental effect this has had on Russian influence. Publicly, Putin prefers to accuse everyone from NATO to the EU of driving an artificial wedge between Ukraine and Russia. In reality, he must know that he only has himself to blame.
About the author: Peter Dickinson is the publisher of Business Ukraine magazine and a nonresident fellow at the Atlantic Council
5
legal industry focus
Ukrainian law firms seeking new niches Legal industry analysis: law firms look ahead with growing focus on tech sector and other niche markets
The legal industry in Ukraine continues to play a key role in the reform processes taking place in the country, both in terms of directly contributing to the reform of the judiciary and in response to the fast-evolving economic climate. The latest edition of the “Top 50 Leading Law Firms in Ukraine” survey, conducted by Yuridicheskaya Practika publishing house annually since 1997 and published this month in English-language format by Business Ukraine magazine, reveals a legal sector firmly on the road to recovery following the slump of 2014-15. It is also an industry seeking to reinvent itself in order to meet the changing demands of Ukraine’s shifting economic landscape.
Contributing to Ukraine’s Post 2014 Transformation The past year has been a particularly dynamic one for law firms practicing in Ukraine. Along with developments in the legal services industry, the professional community has also been intricately involved in the broader national process of judicial reform. Notably, in 2017 practicing lawyers were able to put themselves forward as candidates for the new-look Supreme Court, with nine candidates eventually becoming judges following a lengthy selection process. The effectiveness of Ukraine’s recalibrated Supreme Court will be one of the key issues to monitor over the coming year. It is part of :
About the author: Oleksiy Nasadyuk is Head of the Top 50 Leading Law Firms of Ukraine annual research program 8
legal industry focus
: the wider judicial reform process central to Ukraine’s post-Maidan
transformation. “The key challenge for lawyers and for the whole of Ukraine is the pace and success of judicial reform. This will directly affect the investment attractiveness of the country. When the prospects for domestic and international investors of Ukraine become clearer, we can expect to see significant economic growth. This growth will also impact the legal market,” says Asters law firm Managing Partner Oleksiy Didkovskiy.
Niche Appeal
While traditional legal sector focuses such as litigation, corporate and tax law are still the most profitable segments of the market, there are signs of a shift towards specialization amid growing levels of interest in emerging fields of practice connected with tech innovation and the most impressive sectors of the Ukrainian economy. This acclimatization fits well with the Ukrainian legal services industry’s famously well-versed adaptation ability. Indeed, the Ukrainian legal business is so adept at changing step to accommodate economic and political turbulence that many professionals prefer not to talk in terms of difficulties but rather to speak about crisis opportunities. As the industry continues to recover from the lows of 2014-15, market analysis points increasingly towards the appeal of niche sectors. The most profitable niches at present include energy and agriculture – both sectors that have witnessed significant increases in activity since 2014. The most striking current trend is the growing popularity of IT-related legal services. This reflects the rising importance of the IT sector for the Ukrainian economy as a whole, as well as the rapid physical expansion of the sector.
10
The emphasis on technical innovations extends to the sphere of legal services connected to bitcoins and crypto currencies, while crossing over into the Legal Tech sector. Ukrainian legal services professionals are now regularly speaking about Legal Tech in the context of industrywide modernization, with bots carrying out tasks like patent research and producing draft contracts. The vast majority of Ukraine’s legal market participants have now come to recognize the futility of ignoring technological progress in their field, and the most forward-looking market players are actively looking to introduce artificial intelligence tools and other innovations into their day-to-day operations. “Legal consulting in the IT sector and FinTech innovations both look like attractive prospects for 2018 and in a longer term perspective. Considering the ongoing digitalization of business and the pace of development, today this sector is one of the most prospective for everyone including for lawyers,” says Antika law firm Managing Partner Alexey Kot. The booming world of crypto currencies has rarely been out of the headlines over the past year and Ukrainians have been among the most responsive audiences to the opportunities presented by this emerging financial sector. Unsurprisingly, this focus has also made itself felt in the legal industry. “The market is seeing demand for legal support for transactions with ICO (Initial Coin Offering) elements and IT solutions involving blockchain technologies. There is also interest in services related to the investigation of fraud in these spheres,” says Sayenko Kharenko law firm Partner Vladimir Sayenko. Meanwhile, according to Lavrynovych & Partners law firm Managing Partner Maksym Lavrynovych, we can expect to see significant development of legal services protecting the rights of crypto currency miners in Ukraine over the coming two to three years. “The current :
legal industry focus
Legal Industry Commentary: Rustam Kolesnik Chief Editor of Yuridicheskaya Practika publishing house
The results posted by the Ukrainian legal services market in 2017 are generally positive. Financial revenues increased by 15% to 20% and reached a total of UAH 5.4 billion. However, it is also important to note that the five most profitable law firms generated one-quarter of these revenues alone. It was an active year on the legal services market despite the fact that the majority of expectations regarding Ukraine’s economic recovery, the pace of reforms, and the arrival of international investment did not come to fruition. These areas will remain in focus over the coming year. Whichever way you look at it, 2018 is shaping up to serve as a litmus test for Ukraine’s commitment to reforms. In the context of the legal market, attention will focus on the activities of the rebooted Supreme Court and procedural reforms.
: absence of a legal response to issues related to mining and crypto currencies is the prerequisite for this growth,” he explains.
Industry Overview
Market analysis identifies a somewhat paradoxical situation in the personnel sector of Ukraine’s legal services market. On the one hand, the market appears to have an oversupply with legal experts, but on the other hand, many law firm partners note the difficulties of finding lawyers who meet all their requirements. This is particularly true when it comes to niche specializations. We can expect this picture to develop in the coming years as lawyers and law school graduates seek to hone their skillsets to meet the needs of the industry more specifically, but it is unlikely to change significantly in 2018. While there is clearly an expanding market for lawyers with niche skills, the levels of movement within the industry are relatively modest at present. Indeed, more than half the employees from surveyed law firms have not changed their place of work for the past three years. The portrait of a leading law firm in Ukraine has not changed much over the course of the past year. Based on the latest survey results, it is more than sufficient to have a team of 25 to 30 lawyers in order to
manage a top law firm in Ukraine, while less than half this number will suffice to achieve success in the boutique category. However, it is worth noting that the three law firms occupying the top spots in this year’s Top 50 ranking all have more than 80 lawyers on their staff. In terms of senior management, law firms featured in the Top 50 have an average of five to six partners. Just two of the Top 50 have more than ten partners, while at the other end of the scale, 13 law firms have three partners or fewer. Overall, the average ratio of partners to salaried lawyers across all surveyed law firms is one to six. According to the results of this industry survey, Ukraine’s legal sector is a particularly experienced segment of the Ukrainian economy. Almost two-thirds of surveyed lawyers, or 62.5%, have legal industry experience of more than five years, while 34% can boast over a decade of practicing law in Ukraine, and 11.9% are real veterans with 15 years or longer under their belts. This creates the impression of a mature and adult legal services sector, but it is also important to note the role played by young specialists. With the industry emphasis slowly but surely shifting towards new tech-related segments and other niche markets, younger market entrants may soon find themselves in growing demand – assuming they have acquired the requisite skills to tap into the needs of the evolving industry.
Legal Industry Commentary: Oleksiy Nasadyuk Head of the Top 50 Leading Law Firms of Ukraine annual research program
For a number of years we have witnessed the steady flow of practicing lawyers into state service, whether it be as members of parliament, the Presidential Administration, Antimonopoly Committee of Ukraine, the High Qualification Commission of Judges of Ukraine, individual government ministries, or at state-owned enterprises. Many of them continue in these posts, but others have returned to the market. One of the key reforms in 2017 was the formation of new Supreme Court. The legal professional community has yet to evaluate whether the lawyers and scientists who passed the unprecedentedly competitive selection process and became judges of the Supreme Court will be able to fulfil their new roles. However, the impact of this migration on the legal market is already obvious, leading to changes at individual law firms who have lost key specialists. 12
Top 50 Ukrainian Law Firms
14
LAW FIRM
1
BAKER MCKENZIE
2
ASTERS
3
SAYENKO KHARENKO
4
ILYASHEV & PARTNERS
5
AEQUO
6
ARZINGER
7
AVELLUM
8
GOLAW
9
VASIL KISIL & PARTNERS
Managing Partner: Serhiy Chorny Managing Partner: Serhiy Piontkovsky
Managing Partner: Oleksiy Didkovskiy Senior Partner: Armen Khachaturyan
Partner: Michael Kharenko
Managing Partner: Mikhail Ilyashev
Managing Partner: Denis Lysenko
Managing Partner: Timur Bondaryev
Managing Partner: Mykola Stetsenko
Managing Partner: Valentyn Gvozdiy
Managing Partner: Andriy Stelmashchuk
NUMBER OF LAWYERS
RANKING
English-language version of annual rating covering 2017 produced by Business Ukraine magazine in partnership with Yuridicheskaya Praktika
CONTACT DETAILS
PRACTICE AREAS
55
Banking & finance, M&A, intellectual property, tax, land and real estate, competition, litigation, labor, corporate, compliance, debt restructuring, international arbitration, international trade and WTO rules, capital markets, PPP and GR
24 Bulvarno-Kudriavska Street, Kyiv, 01601, Ukraine Tel.: (044) 590-01-01 www.bakermckenzie.com/ukraine kyiv@bakermckenzie.com
85
Litigation, competition, corporate, M&A, banking & finance, tax, debt restructuring, criminal law, intellectual property, aviation, international arbitration, bankruptcy, business protection, real estate and land, family law, private clients, labor & employment, PPP and GR, international trade and WTO rules, capital markets, compliance, mediation
19-21 Bohdana Khmelnytskoho Street, Kyiv, 01030, Ukraine Tel.: (044) 230-60-00 www.asterslaw.com info@asterslaw.com
Litigation, banking & finance, bankruptcy, corporate, M&A, criminal law, intellectual property, compliance, labor, debt restructuring, international arbitration, mediation, family law, private clients, tax, land and real estate, competition, business protection, international trade and WTO rules, capital markets, aviation, PPP and GR
11 Kudryavska Street, Kyiv, 04053, Ukraine Tel.: (044) 494-19-19 www.attorneys.ua office@attorneys.ua
ND
43
ND
59
Banking & finance, corporate, M&A, litigation, international arbitration, criminal, intellectual property, compliance, labor & employment, debt restructuring, mediation, energy, private clients, tax, land and real estate, competition, bankruptcy, business protection, international trade and WTO rules, capital markets, PPP and GR
Corporate, M&A, International Arbitration, Banking & Finance, Intellectual Property, Litigation, Restructuring, Private Clients, Tax, Real Estate & Land, Antitrust/ Competition
Litigation, Banking & Finance, Restructuring, Corporate, M&A, Criminal Law, Intellectual Property, International Arbitration, Tax, Real Estate & Land, Antitrust/Competition, Business Protection
34
Corporate, M&A, Restructuring, Banking & Finance, Litigation, Labor & Employment, International Arbitration, Private Clients, Tax, Real Estate & Land, Antitrust/ Competition, Capital Markets
ND
Litigation, Tax, Corporate, Criminal Law, Compliance, Labor & Employment, Private Clients, Real Estate & Land, Business Protection
40
Litigation, Labor & Employment, Corporate, Banking & Finance, Criminal Law, Intellectual Property, Transport (Aviation, Maritime), International Arbitration, Private Clients, Tax, Real Estate & Land, Antitrust/Competition, PPP & GR
10 Muzeyny Provulok, Kyiv, 01001, Ukraine Tel.: (044) 499-60-00 www.sk.ua info@sk.ua
52 Bohdana Khmelnytskogo Street, Kyiv, 01030, Ukraine Tel.: (044) 490-91-00 www.aequo.ua office@aequo.ua Senator Business Center, 32/2 Moskovska Street, Kyiv, 01010, Ukraine Tel.: (044) 390-55-33 www.arzinger.ua mail@arzinger.ua 38 Volodymyrska Street, Kyiv, 01030, Ukraine Tel: (044) 591-33-55 www.avellum.com info@avellum.com 19B Instytutska Street, Suite 26,29,30, Kyiv, 01021, Ukraine Tel.: (044) 581-12-20 www.golaw.ua info@golaw.ua 17/52A Bohdana Khmelnytskoho Street, Kyiv, 01030, Ukraine Tel.: (044) 581-77-77 www.vkp.ua vkp@vkp.ua
www.bunews.com.ua
EQUITY
11
LCF
12
INTEGRITES
13
14
ND
Litigation, Criminal Law, Bankruptcy, Business Protection, Restructuring, Banking & Finance, Corporate, Intellectual Property, Tax, Real Estate & Land
ND
Litigation, banking & finance, debt restructuring, bankruptcy, corporate
ND
Litigation, Banking & Finance, International Arbitration, Real Estate & Land, Antitrust/Competition, Corporate, M&A, Criminal Law, Intellectual Property, Bankruptcy
CMS-KYIV (CMS Cameron McKenna LLC and СMS Reich-Rohrwig Hainz)
36
DENTONS
Corporate, M&A, Antitrust/Competition, Banking & Finance, Litigation, Intellectual Property, Compliance, Labor & Employment, International Arbitration, Restructuring, Real Estate & Land, Bankruptcy
ND
Banking & Finance, Corporate, M&A, Restructuring, Intellectual Property, Real Estate & Land, Litigation, International Arbitration, Labor & Employment, Compliance, Tax, Antitrust/Competition, Bankruptcy, International Trade & WTO Rules, Capital Markets, PPP & GR
Senior Partner: Viktor Barsuk
Managing Partner: Anna Ogrenchuk
Managing Partner: Oleksiy Feliv
Managing Partner: Graham Conlon Managing Partner: Johannes Trenkwalder Managing Partner: Oleg Batyuk
15
ILF
16
AVER LEX
17
GRAMATSKIY & PARTNERS
18
SALKOM
19
LAVRYNOVYCH & PARTNERS
20
21
NUMBER OF LAWYERS
RANKING 10
PRACTICE AREAS
Managing Partner: Tetyana Gavrysh
Managing Partner: Olga Prosyanyuk
President: Ernest Gramatskiy
President: Evgen Kubko
Managing Partner: Maksym Lavrynovych
SPENSER & KAUFFMANN Managing Partner: Yuriy Petrenko
EGOROV PUGINSKY AFANASIEV & PARTNERS Managing Partner: Serhii Sviriba
February 2017
ND
Litigation, Banking & Finance, Corporate, Criminal Law, Labor & Employment, Private Clients, Tax, Real Estate & Land
32
Criminal Law, Business Protection, Litigation, Compliance, Tax
36
Tax, Real Estate & Land, Litigation, Bankruptcy, Business Protection, Banking & Finance, Corporate, M&A, Criminal Law, Intellectual Property, Compliance, Labor & Employment, Restructuring
26
Corporate, Contract Law, Litigation, Banking & Finance, Antitrust/Competition, Criminal Law, Labor & Employment
ND
Litigation, Banking & Finance, Corporate, M&A, Real Estate & Land, Antitrust/Competition, Bankruptcy, Business Protection, Intellectual Property, Compliance, Private Clients, Tax
36
Litigation, Banking & Finance, Corporate, M&A, Intellectual Property, Labor & Employment, Restructuring, Family Law, Private Clients, Tax, Real Estate & Land, Antitrust/ Competition, Business Protection
ND
Litigation, Corporate, M&A, Business Protection, International Arbitration, Criminal Law, Banking & Finance, Intellectual Property
CONTACT DETAILS
4 Rylskyi Lane, Kyiv, 01001, Ukraine Tel.: (044) 277-22-22 www.equity.law info@equity.law
legal industry focus
LAW FIRM
47 Volodymyrska Street, Office 3, Kyiv, 01001, Ukraine Tel.: (044) 455-88-87 www.lcf.ua
1 Dobrovolchykh Batalioniv Street, Kyiv, 01015, Ukraine Tel.: (044) 391-38-53 www.integrites.com info@integrites.com
38 Volodymyrska Street, 6 Floor, Kyiv, 01034, Ukraine Tel.: (044) 391-33-77 www.cms.law kyivoffice@cms-cmno.com 49A Volodymyrska Street, Kyiv, 01001, Ukraine Tel: (044) 494- 47-74 www.dentons.com kyiv@dentons.com
22 Shovkovychna Street, Suite 3, Kyiv, 01024, Ukraine Tеl.: (044) 390-77-77 www.ilf-ua.com office@ilf-ua.com 2 Khrestovyi Alley, Kyiv, 01010, Ukraine Tel.: (044) 300-11-51 www.averlex.com info@averlex.com
16 Mikhaylovskaya Street, Kyiv, 01001, Ukraine Tel.: (044) 581-15-51 www.gramatskiy.com office@gramatskiy.com 12 Khreschatyk Street, Kyiv, 01001, Ukraine Tel.: (044) 591-31-00 www.salkom.ua salkom@salkom.kiev.ua
41 Saksaganskogo Street, Kyiv, 01033, Ukraine Tel.: (044) 494-27-27 www.lp.ua office@lp.ua 7A Klovsky Uzviz, Kyiv, 01021, Ukraine Tel.: (044) 288-83-83 www.sklaw.com.ua office@sklaw.com.ua
38 Volodymyrska Street, Kyiv, 01030, Ukraine Tel.: (044) 492-82-82 www.epap.ua kyiv_office@epap.ua
15
23
Managing Partner: Sergey Boyarchukov
DLA PIPER UKRAINE
Managing Partner: Margarita Karpenko
24
MORIS GROUP
25
REDCLIFFE PARTNERS
26
EVRIS LAW FIRM
27
PWC LEGAL
28
L.I. GROUP
29
ETERNA LAW
Managing Partner: Andriy Romanchuk
Managing Partner: Olexiy Soshenko
Managing Partner: Andriy Dovbenko
Managing Partner: Andrey Pronchenko
Senior Partner: Mykola Kovalchuk Senior Partner: Artur Megerya
Council of Partners
30
ANTIKA
31
KPMG-UKRAINE
32
PAKHARENKO & PARTNERS
33
16
ALEKSEEV, BOYARCHUKOV & PARTNERS
Managing Partner: Alexey Kot
Partner: Sergey Popov
Managing Partner: Antonina Pakharenko-Anderson
KM PARTNERS Managing Partner: Alexander Minin
NUMBER OF LAWYERS
RANKING 22
LAW FIRM
CONTACT DETAILS
PRACTICE AREAS
ND
Litigation, Bankruptcy, Banking & Finance, Corporate, Criminal Law, Private Clients, Tax, Business Protection
41
Banking & Finance, Corporate, M&A, Intellectual Property, Labor & Employment, Restructuring, Tax, Real Estate & Land, Antitrust/Competition, Bankruptcy
49
Litigation, Banking & Finance, Corporate, Intellectual Property, Tax, Business Protection
27
Litigation, Banking & Finance, Corporate, M&A, Antitrust/ Competition, Compliance, International Arbitration, Restructuring, Tax
ND
Litigation, Corporate, M&A, International Arbitration, Private Clients, Tax, Bankruptcy, Business Protection
26
Corporate, M&A, Litigation, Banking & Finance, Restructuring, Criminal Law, Intellectual Property, Compliance, Labor & Employment, Real Estate & Land, PPP & GR
ND
Litigation, Bankruptcy, Banking & Finance, Corporate, Criminal Law, Intellectual Property, International Arbitration, Family Law
ND
International Arbitration, Litigation, Corporate, Intellectual Property, Labor & Employment, Restructuring, Family Law, Real Estate & Land, Infrastructure & Logistics
16
Litigation, Corporate, M&A, Banking & Finance, International Arbitration, Energy, Private Clients, Real Estate & Land, Antitrust/Competition, Infrastructure & Logistics, PPP & GR
ND
Tax, Corporate, M&A, Compliance, Litigation, Banking & Finance, Labor & Employment, International Arbitration
ND
Intellectual Property, Litigation, Corporate, Private Clients, Antitrust/Competition, Business Protection
ND
Tax, Litigation, Corporate, M&A, Criminal Law, Intellectual Property, Labor & Employment, Real Estate & Land, Antitrust/Competition
11 Shota Rustaveli Street, Kyiv, 01001, Ukraine Tel.: (044) 235-88-77 www.abp.kiev.ua office@abp.kiev.ua
77A Velyka Vasilkivska Street, Kyiv, 03150, Ukraine Tel: (044) 490-95-75 www.dlapiper.com/en/ukraine ukraine@dlapiper.co.uk 8b Moskovskaya Street, Kyiv, 01010, Ukraine Tel.: (044) 359-03-05 www.moris.com.ua info@moris.com.ua
75 Zhylyanska Street, Kyiv, 01032, Ukraine Tel: (044) 390 -58-85 www.redcliffe-partners.com office@redcliffe-partners.com
Vector Business Center, 52 Bohdana Khmelnytskogo Street, Kyiv, 01030, Ukraine Tel.: (044) 237-72-50 www.evris.law office@evris.law 75 Zhilyanska Street, Kyiv, 01032, Ukraine Tel.: (044) 354-04-04 www.pwc.com/ua legal@ua.pwc.com
36d Eugene Konovaltsya Street, Office 4, Kyiv, 01133, Ukraine Tel.: (044) 227-05-14 www.ligroup.com.ua lawyer@ligroup.com.ua Sophia Business Centre, 6 Rylskiy Lane, Kyiv, 01001, Ukraine Tel.: (044) 490-70-01 www.eterna.law office.kyiv@eterna.law
12 Khreschatyk Street, Kyiv, 01001, Ukraine Tel.: (044) 390-09-20 www.antikalaw.com.ua office@antikalaw.com.ua 32/2 Moskovska Street, Kyiv, 01010, Ukraine Tel.; (044) 490-55-07 www. kpmg.ua
72 Bolshaya Vasilkovskaya Street, Kyiv, 03150, Ukraine Tel.: (044) 593-96-93 www.pakharenko.com pakharenko@pakharenko.Ń om.ua 5 Pankivska Street, Kyiv, 01033, Ukraine Tel.: (044) 490-71-97 www.wts.ua, admin@kmp.ua
www.bunews.com.ua
EY
35
KONNOV & SOZANOVSKY
36
DOUBINSKY & OSHAROVA
37
DYNASTY
38
SOKOLOVSKIY & PARTNERS
39
NUMBER OF LAWYERS
RANKING 34
PRACTICE AREAS
CONTACT DETAILS
52
Tax, Corporate, M&A, Litigation, Banking & Finance, Labor & Employment, Private Clients, PPP & GR
ND
Corporate, M&A, Intellectual Property, Tax, Litigation, International Arbitration, Real Estate & Land
30
Intellectual Property
ND
Litigation, Real Estate & Land, Banking & Finance, Corporate, Criminal Law, Restructuring, Tax
20
Litigation, Tax, Criminal Law, Bankruptcy, Business Protection, Corporate, M&A, Intellectual Property, Compliance, Restructuring
EUCON
ND
Tax, Litigation, Corporate, Criminal Law, Intellectual Property, Labor & Employment, Private Clients, Real Estate & Land, Business Protection
40
KINSTELLAR
33 T. Shevchenka Blvd. Office 12, Kyiv, 01032, Ukraine Tel.: (044) 238-09-44 www.eucon.ua office@eucon.ua
15
Litigation, Banking & Finance, Corporate, M&A, Criminal Law, Compliance, International Arbitration, Real Estate & Land, Antitrust/Competition
41
ICF LEGAL SERVICE
ND
Tax, Business Protection, Banking & Finance, Corporate, M&A, Intellectual Property, Compliance, Private Clients, International Trade & WTO Rules, Capital Markets
1-ะ Sportyvna Sq., 16th Floor, Gulliver Business Center, Kyiv, 01601, Ukraine Tel.: (044) 394-90-40 www.kinstellar.com kyiv.reception@kinstellar.com
42
TRUSTED ADVISORS
18
Litigation, Bankruptcy, Corporate, Criminal Law, Restructuring, Tax, Real Estate & Land, Business Protection
43
PAVLENKO LEGAL GROUP
ND
PPP & GR, Litigation Corporate, M&A, Intellectual Property, Tax, Business Protection, Infrastructure & Logistics
44
EVERLEGAL
ND
Litigation, Corporate, M&A, Labor & Employment, International Arbitration
Partner: Albert Sych
Managing Partner: Alexey Ivanov
Managing Partner: Michael Doubinsky
President: Denys Myrgorodsky
Managing Partner: Vladyslav Sokolovskyi
Managing Partner: Yaroslav Romanchuk
Managing Partner: Kostiantyn Likarchuk
Managing Partner: Nataliya Ulyanova
Managing Partner: Ivan Mishchenko
Managing Partner: Oleksandra Pavlenko
Managing Partner: Yevheniy Deyneko
February 2017
19A Khreschatyk Street, Kyiv, 01001, Ukraine Tel.: (044) 490-30-00 www.ey.com/ukraine kyiv@ua.ey.com
legal industry focus
LAW FIRM
23 Shota Rustaveli Street, Suite 3, Kyiv, 01033, Ukraine Tะตl.: (044) 490-54-00 www.konnov.com info@konnov.com 37 Zhilyanska Street, 3 Floor, Kyiv, 01033, Ukraine Tel.: (044) 490-54-54 www.iplaw.com.ua info@iplaw.com.ua
2 Glinky Street, MOST-City Center, Dnipro, 49000, Ukraine; Tel.: (056) 371-30-30 www.dynasty.legal office@dynasty.legal 25 Klinichna Street, Kyiv, 03141, Ukraine Tel.: (044) 495-19-25 www.splf.ua pravo@splf.ua
10 Muzeynyi Lane, Office 101, Kyiv, 01001, Ukraine Tel.: (044) 338-12-53 www.icf.ua info@icf.ua 40/85 Saksaganskogo Street, Kyiv, 01033, Ukraine Tel.: (044) 359-06-64 www.trustedadvisors.ua info@trustedadvisors.ua
23A Zlatoustovskaya Street, Kyiv, 01135, Ukraine Tel.: (044) 281-06-00 www.plglaw.ua office@plglaw.ua
4 Rylskyi Lane, 6 Floor, Kyiv, 01001, Ukraine Tel.: (044) 337-00-16 www.everlegal.ua hello@everlegal.ua
17
45
OMP
46
VB PARTNERS
47
JUSCUTUM
48
ANK LAW OFFICE
49
INTERLEGAL
50
Partner: Mykola Orlov
Managing Partner: Volodymyr Vashchenko
Managing Partner: Artem Afian
Managing Partner: Alexander Kifak
Partner: Arthur Nitsevych
Partner: Nikolay Melnykov
SHKREBETS AND PARTNERS Managing Partner: Eugene Shkrebets
NUMBER OF LAWYERS
RANKING
LAW FIRM
CONTACT DETAILS
PRACTICE AREAS
35
Agribusiness, Real Estate & Land, Pharmaceuticals & Medicine, Tax, Litigation, Corporate, M&A, Labor & Employment, Bankruptcy
9
Litigation, Criminal Law, Business Compliance, Real Estate & Land
66
Tax, Business Protection, Litigation, ТМТ, Corporate, M&A, International Business Administration, Criminal Law, Intellectual Property, Family Law
ND
Litigation, Corporate, M&A, Transport, Infrastructure & Logistics, Tax, Real Estate & Land, Business Protection, PPP & GR
14
Maritime & Shipping, Infrastructure & Logistics, International Trade & WTO Rules, International Arbitration
15
Litigation, Criminal Law, Tax, Energy, Bankruptcy, Corporate
Protection,
Tax,
9 Tarasivska Street, Kyiv, 01033, Ukraine Tel.: (044) 391-30-01 www.omp.com.ua office@omp.com.ua
22 Rybalska Street, Kyiv, 01011, Ukraine Tel.: (044) 581-16-33 www.vbpartners.ua office@vbpartners.ua
35 Olesya Honchara Street. Kyiv, 01034, Ukraine Tel.: (044) 359-08-96 www.juscutum.com office@juscutum.com
9 Lanzheronovskaya Street, Suite 17, Odesa, 65026, Ukraine Tel.: (048) 234-87-16 www.ank.odessa.ua office@ank.odessa.ua 24B Genuezska Street, Odesa, 65009, Ukraine Tel.: (048) 233-75-28 www.interlegal.com.ua office@interlegal.com.ua
14 Kaplunivski Lane, Kharkiv, 61002, Ukraine Tel.: (057) 720-90-01 www.shkrebets.com office@shkrebets.com
50 Leading Law Firms of Ukraine
Methodology of the Annual Ranking The annual “50 Leading Law Firms of Ukraine” ranking is widely recognized as the long-running and most authoritative survey of the Ukrainian legal sector. Launched in 1997, the ranking is produced using research conducted by leading Ukrainian legal industry publishing house Yuridicheskaya Praktika and aims to provide a comprehensive picture of the development of the Ukrainian legal services market. Business Ukraine magazine is the official English-language partner of the ranking. Over the course of the past two decades, the methodology underpinning the ranking has been adapted and finetuned to reflect changes in the Ukrainian legal industry. The ranking includes a number of established criteria: the number of lawyers, profitability, complexity of transac18
tions and lawsuits handled, and financial efficiency. The professional reputation of each individual law firm is an important additional factor. The analytical team that produces the annual ranking is receptive to the strict requirements of confidentiality regarding information provided by law firms for the purposes of the ranking. The research period for the current ranking covers the fourth quarter of 2016 and the first to third quarters of 2017. Once all data is calculated and the preliminary ranking is calculated, a panel of legal industry experts assess the ranking and provide their own input. Participating legal experts provide their feedback in isolation, and are not aware of other expert recommendations until following the final publication of the ranking. www.bunews.com.ua
Jeantet is one of France’s leading and oldest independent business law firms. We deliver customized services with added value. Our firm was established over 90 years ago. Today our team of 180 lawyers work from seven different international offices, while our partner network spans 130 countries. We offer the services of our excellent team of seasoned Ukrainian lawyers led by Bertrand Barrier and Karl Hepp de Sevelinges. Our areas of expertise include Corporate and M&A, Banking & Finance, Foreign Investments, Private-Public Partnership, and Antitrust issues.
www.jeantet.fr • bbarier@jeantet.org
Paris • Casablanca •
4 Volodymyrska Street, Kyiv, 01001, Ukraine +380-44-2060980
Luxembourg • Geneva • Budapest • Kyiv • Moscow
legal industry focus
Tax and legal advice for potential Ukraine investors Andriy Dovbenko explores the legislative opportunities and obstacles to investments in Ukraine
About the author: Andriy Dovbenko is the Managing Partner at EVRIS law firm Ukraine is slowly but steadily creeping up the annual Ease of Doing Business rankings, but Ukrainian corporate law remains very inflexible. Before embarking on any investment plans in Ukraine, it worth seeking answers to a range of legal questions. Ukraine has adopted a number of new business-related legislation in recent years. However, in many cases, these laws have yet to enter into force. Others remain untested. With this in mind, potential investors may want to consider setting up a joint venture established in another jurisdiction and functioning as a non-resident holding company. This way, you could structure the required documentation and agreements at that level, meaning a Shareholders Agreement or option agreements could be concluded and governed by the laws of a jurisdiction where such agreements have been tested by the courts. Over the last few years, thresholds for acquisitions requiring Antimonopoly Committee of Ukraine (AMC) clearance have increased, but they remain relatively low compared to most jurisdictions. Even in cases where your planned acquisition is just a small- or medium-sized business, you should still check if AMC approval is required. It is not always easy to prove liability regarding the actions of local management, even in cases of misconduct, making it hard to get losses reimbursed. It is often useful to include clauses in your Corporate Charter restricting the ability of local directors to act in certain instances. This can relate to capital issues like the disposal of key assets, or when entering into transactions exceeding certain thresholds, as well as with regard to payments over a set amount. You can introduce requirements for pre-approval by a shareholders’ meeting or a two-signature policy, for example. These limitations should also feature in the Company Register and banking documents. Investors need to appreciate that the National Bank of Ukraine has introduced a number of specific limitations on payments from Ukraine. Such limitations may affect the repatriation of invested sums or the proceeds from any investments. In particular, these limitations concern payment of dividends for certain periods as well as early repayment of loans to non-residents. With all this in mind, investors should consider the following five issues when doing business in Ukraine. First priority is the tax environment. Ukraine levies seven statewide taxes, as well as two local taxes and two local mandatory fees. The major taxes payable by Ukrainian businesses include corporate income 20
tax (18%), value added tax (20%), and payroll related taxes: personal income tax (18%), unified social contribution (22%), and military tax (1.5%). For businesses such as oil and gas extraction, mining, the tobacco industry, alcohol businesses, and car dealers, rent tax and excise tax will also represent a material portion of their tax bills. Choosing the right form of business presence and taxation system is key. Depending on your area of business, making the correct choice could allow you to reduce your tax burden. For instance, permanent establishments engaged in the services industry can determine their CIT based on the simple method of applying taxation at a flat 30% rate of revenues. Agricultural companies may opt for a simplified tax system, replacing CIT with a single tax based on the value of land used in agricultural production, irrespective of income generated from the sale of agricultural products. Your choice of jurisdiction for parent, financing, and/or licensing companies requires some thought too. Ukraine levies withholding tax (WHT) at a rate of 15% upon distribution of dividends, payment of interest or royalties, and certain other types of income to foreign recipients. WHT can be significantly reduced or even eliminated based on over 70 double tax treaties to which Ukraine is a party. The proper choice of jurisdiction for parent, financing, and licensing companies is important to ensure the overall tax efficiency of an international business structure. Tax incentives and reduced tax rates are another hugely important topic. Ukrainian tax laws provide for significant tax incentives for large infrastructure projects related to inter-governmental agreements. In certain cases, the Ukrainian parliament voted for laws granting tax incentives for specific infrastructure projects, including full CIT and VAT exemptions. It is possible to eliminate the WHT rate for interest on financing attracted from foreign lenders that have raised financing on foreign stock exchanges, or to reduce it to 5%. With regard to special rates of VAT, a reduced rate of 7% applies to imports and sales of pharmaceuticals and medical devices. Software supplies are VAT exempt until 2023. Qualified agricultural producers are entitled to VAT subsidies. No excise tax applies to supplies of electricity produced from renewable sources. Finally, transfer pricing rules should certainly be taken into account. Transactions with foreign partners may trigger transfer pricing (TP) implications. Ukrainian transfer pricing rules generally follow OECD guidelines and require that controlled transactions take place at arm’s length. Ukraine sets relatively low transfer pricing thresholds. For example, if annual sales reach EUR 4 million, or if transactions with certain foreign partners reach or exceed EUR 285 000 in a specific year, either of these could qualify as controlled transactions for Ukrainian TP purposes. Transactions meeting these thresholds qualify as controlled transactions if the foreign partner of a Ukrainian company is a related party, a company incorporated in a low-tax jurisdiction, and/or a specific kind of entity mentioned in the relevant Ukrainian government list. The EUR 285 000 threshold also applies to transactions with Ukrainian permanent establishments of foreign companies. Ukraine has not yet introduced a country-bycountry reporting obligation, but as far as controlled transactions is concerned, Ukrainian businesses must prepare the relevant TP documentations and submit annual transfer pricing reports. These are all issues that conscientious investors should address prior to proceeding with Ukraine market entry. However, it is also worth emphasizing that economic and legislatively speaking, there has never been a better time to invest in Ukraine.
legal industry focus
Ten things to know about Ukraine’s new law on LLCs Changes to Ukraine’s company legislation have potentially major implications for business community the New Law lists circumstances when the LLC may not distribute dividends. This includes if the LLC has debts towards former participants or their successors, if the LLC does not have sufficient assets to settle all creditor claims, or if such insufficiency will occur after payment of dividends. Additionally, the LLC may not pay dividends to any participant who failed to make their contribution to the share capital (partially or in full).
3. Significant and Interested-Party Transactions
About the author: Illya Tkachuk is a Local Partner at Jeantet Ukraine On 6 February 2018, the Ukrainian parliament adopted the Law on Limited Liability and Additional Liability Companies (the “New Law”). Although the New Law is yet to be signed by President Poroshenko and published in official media, it is already difficult to overestimate its possible impact on the activities of more than half a million companies. Indeed, the New Law is a complex document establishing an entirely new legal framework for limited liability and additional liability companies in Ukraine. In this article, we identify ten of what we believe are the most important issues raised by the New Law.
1. Corporate Agreements
The New Law introduces the long-awaited option of concluding corporate agreements, something previously not common in limited liability companies due to a lack of regulations. Corporate agreements between participants of an LLC may now inter alia serve to regulate the sale and purchase of shares and issues of corporate governance. It is also worth mentioning that on 15 February 2018, the President of Ukraine finally signed the Law on Corporate Agreements adopted by parliament almost one year earlier on 23 March 2017.
2. New Rules for Payment of Dividends
The New Law introduces a number of rules relating to the payment of dividends by LLCs. The New Law states that dividends are payable for any quarter or any multiple quarters unless the charter establishes a different period. Secondly, 22
The concept of ‘significant’ and ‘interested-party’ agreements is not new. It already exists for joint stock companies. Since LLCs are mostly private companies, the idea here is to allow LLCs to decide whether they want to require corporate approvals for significant and interested-party agreements. However, the article on significant transactions, as seen in the last available draft of the New Law, is subject to interpretation in a way that makes it an obligatory requirement to seek corporate approvals for transactions exceeding 50% of the net assets of the LLC. This could be an issue for a number of LLCs, especially those with negative net assets.
4. Net Assets
Many of us are well aware of the existing provision requiring LLCs to adopt a decision on liquidation in the event of negative net assets. The New Law changes this by setting forth that “if the value of net assets of the company has decreased by more than 50% compared to their value as of the end of the previous year, the executive body of the company shall convene a general participants’ meeting. This meeting is to take place within 60 days from the day of such a decrease. The agenda of the meeting shall include measures to be taken to improve the financial condition of the company, decrease the charter capital of the company, or liquidation of the company.” Therefore, an LLC may adopt a business plan to restore net assets without having to liquidate. The main purpose of this provision is to ensure participants are well aware of the current financial condition of the LLC.
5. Supervisory Board and Audit Commission
The New Law allows for the creation of a Supervi-
sory Board to control the executive body of the LLC. In parallel, it abolishes such archaic bodies as the Audit Commission.
6. Maximum Number of Participants
The New Law removes the maximum number of participants in a LLC, which, according to the Law on Business Companies, constitutes 100. This will allow joint stock companies with thousands of shareholders to consider the possibility of changing their business form.
7. Civil Law Contract with General Director
Although the New Law is not explicitly clear, it mentions the possibility of concluding a civil law governed contract with the general director as an alternative to employment. In fact, this provision corresponds to the “fiduciary duty”, which is also introduced by the New Law as indicated below.
8. Fiduciary Duty
The New Law imposes liability on Supervisory Board members and members of the Board of Directors (the Director) for damage caused to the LLC. Moreover, these officers may not act as private entrepreneurs in the same field where the LLC is active. They cannot be full participants of a partnership conducting business in the same field where the LLC is active. Nor can they be members of the Supervisory Board or the Board of Directors (the Director) of a company that operates in the same field where the LLC is active.
9. Debt to Equity Swap
The New Law abolishes a number of provisions in the Civil Code of Ukraine. One such provision is the prohibition on releasing participants from the obligation to contribute to charter capital, including by way of set-off. This provision was often cited as prohibiting debt to equity swaps by way of set-off of claims
10. Last But Not Least
The New Law introduces a number of important additional concepts and tendencies including removal of the quorum requirement, simplification of charters, the possibility of pledging shares, and wide discretion for LLCs to depart from general rules.
Swiss bank accounts and Ukrainian clients Farewell to bank secrecy and full inviolability of deposits in Switzerland
Swiss bank accounts: reasons for account blocks and possible responses Switzerland is one of the largest financial centers in the world. A combination of reliable legislation to ensure the stability of the banking system, banking secrecy at the state level, and high levels of banking services continue to attract investors from all over the world. However, in recent years, this famously “quiet harbor” for global finance has shown signs of shedding its aura of absolute secrecy and inviolability. Due to the toughening requirements of legislation addressing money laundering and corruption, control over customer transactions has strengthened while requirements to provide information about the sources of income have increased. In this new regulatory environment, refusals to open new accounts and the blocking of funds in existing accounts are both becoming more frequent. This applies not only to people considered politically exposed persons (PEP), but also to ordinary investors including respectable business figures and senior managers from Ukraine. In this article, we will consider who can block accounts and why. We will explore how the blockage procedure operates in Switzerland, what an account blockage means for the owner of the funds, and how to unblock an account and renew access to your funds.
Block via Bank or Swiss Prosecutor’s Office
In many cases, compliance departments of banks initiate account blocks. Reasons include suspicious monetary transactions, lack of supporting documents, or failure to cooperate with the bank in providing sufficient information on the source of funds. Accounts can also be subject to blocks based on publicly available information implicating the account holder in illegal activities in his or her homeland. In more and more cases, account holders do not receive prior notice from the bank before blockage. The Swiss Financial Regulator (FINMA) has introduced specialized IT programs to identify and uncover suspicious transactions. Banks receive a daily list of so-called “anxious” operations for investigation. When suspicion focuses on a specific client, the bank may block the 24
About the authors: Denys Bugay is a Partner of VB PARTNERS (Ukraine). Kateryna Turcanu is a Counselor of VB PARTNERS (Switzerland) relevant account. Furthermore, all banks are required to file suspicious activity reports with Switzerland’s specialized Money Laundering Office (MROS). MROS analyzes suspicious activity reports in connection with money laundering and takes decisions on extending seizures or unblocking funds. In order to unblock an account, it is sometimes sufficient to provide explanations and Banks receive a daily list of so-called “anxious” operations for investigation. When suspicion focuses on a specific client, the bank may block the relevant account. Furthermore, all banks are required to file suspicious activity reports with Switzerland’s specialized Money Laundering Office (MROS). MROS analyzes suspicious activity reports in connection with money laundering and takes decisions on extending seizures or unblocking funds. In order to unblock an account, it is sometimes sufficient to provide explanations and produce the respective documents. The bank will usually provide the client with a list of questions and required documents. In cases assessed as involving serious suspicions, MROS forwards the case to the relevant law enforcement agencies for follow–up actions. The Swiss Prosecutor’s Office then initiates an investigation and, if the case involves a Ukrainian account holder, notifies the Prosecutor’s Office of Ukraine. In such cases, account blocks can last for years before clarifying the circumstances involved and reaching the point of final court decisions.
Block via the Ukrainian Authorities There are also cases of accounts blocked at the request of the Swiss Prosecutor’s Office within the framework of international legal mutual assistance. In order for this to happen, the Ukrainian law enforcement authorities must first initiate a criminal case and acquire information about funds deposited by a potential suspect (or related persons) to an account held with a Swiss bank. They may receive this information either during the course of their investigation or directly from their colleagues in other jurisdictions. It is worth noting that the second of these two routes is becoming more and more popular. Ukraine’s law enforcement authorities have recently established close and productive ties with foreign jurisdictions. Their European colleagues are happy to share information (sometimes at their own initiative) received from banks in the process of financial monitoring. The second step sees the relevant law enforcement authority, namely the General Prosecutor’s Office or the National Anti-Corruption Bureau of Ukraine (NABU), send an inquiry to the Swiss Federal Department of Justice with a request to take provisional measures to block funds temporarily. In order for the Swiss authorities to consider any inquiry, the Ukrainian authorities must clearly indicate exactly which account should be subject to measures. Once this step is complete, the Swiss Justice Department notifies the Swiss Prosecutor’s Of-
www.bunews.com.ua
Upon receiving an official request, the Swiss Prosecutor’s Office can decide to extend the account blockage. The Mutual Assistance Act does not specify what exactly constitutes an official request from another state. Most often in cases related to Ukrainian account holders, such a request reflects a decision reached by a Ukrainian court to arrest the property featured in the case. However, the Swiss Prosecutor’s Office requires that official requests contain evidence of the link between illegal activities and the funds held in the account. Due to this requirement, the existence of a criminal procedure or a court decision is not sufficient grounds for final blockage. The request must also contain evidence that the money transferred to the blocked account is the result of illegal activity.
Revoke of seizure: challenging Swiss Prosecutor’s Office decisions
As mentioned above, a temporary account blockage usually lasts 90 days. However, this term may be longer or shorter. It is at this stage that it is important to challenge its legitimacy in the Swiss Prosecutor’s Office. It is worth mentioning that the Swiss Prosecutor’s Office does not consider the merits of the case. Its task is legal assistance, within the framework of the Mutual Assistance Act. Although the Swiss prosecutors proceed from the presumption of conscientiousness on the part of Ukraine’s law enforcement authorities, they are ready to take into account and consider evidence that contradicts the allegations of the Ukrainian Prosecutor’s Office. It is possible to challenge the legitimacy of actions taken by the Ukrainian authorities by providing evidence of violations of national procedural legislation, demonstrating the legality of the seized funds, or offering evidence of the bias of the Ukrainian
bodies. This is why the most effective approach usually involves a legal team consisting of Ukrainian lawyers involved in litigation in Ukraine and a lawyer residing in Switzerland. This Swissbased lawyer can then use a power of attorney issued by the client to represent the client’s interests in the Swiss Prosecutor’s Office. If the Swiss Prosecutor’s Office decides to extend the account blockage, there is still an opportunity to challenge this decision within 30 days in the Federal Criminal Court of Switzerland. In order to do so, the client will need to get a Swiss lawyer. This process is quite a long process and entails significant costs. Alternatively, you may seek a positive decision on the case in Ukraine by either seeking the removal of arrest on the property involved via an investigating judge, or by seeking reconsideration of the case on its own merits and a withdrawal of charges.
legal industry focus
fice about the inquiry, which takes a decision to block the account temporarily. The legal basis for mutual assistance in criminal matters is as follows: • European Convention on Mutual Assistance in Criminal Matters ETS No. 030. • Second Additional Protocol to the European Convention on Mutual Assistance in Criminal Matters ETS No. 182. • Convention on the Laundering, Search, Seizure and Confiscation of the Proceeds from Crime ETS No. 141. • Federal Act On International Mutual Assistance in Criminal Matters (hereinafter - the “Mutual Assistance Act”). • Swiss Criminal Procedure Code. In accordance with Art. 18 of the Mutual Assistance Act that forms part of the legal basis for this process, Switzerland may take provisional measures to safequard threatened legal interests if it receives an express request from another state. These measures can include temporarily blocking funds or seizing property located in Switzerland to ensure their security until the exact circumstances of their status are clarified in the country that made the request. Consequently, in order to block an account temporarily, the Swiss Prosecutor’s Office needs to receive a request from the Ukrainian authorities and have reliable information relating to the bank account. The Swiss Prosecutor’s Office then sends the respective inquiry to the bank and issues, upon the bank’s confirmation of the account’s existence, an appropriate order to the bank to block it. For the bank, this means that it is not entitled to conduct any financial transactions relating to the account, including allowing the owners to withdraw or transfer money from the account. The Swiss Prosecutor’s Office also notifies the Ukrainian Prosecutor’s Office about their decision and gives the Ukrainian side the opportunity to provide a more detailed explanatory official request. It is possible to contest a Swiss Prosecutor’s Office decision on temporary blockage within 10 days in the Federal Criminal Court of Switzerland. There are no legal requirements as to the term of a temporary account blockage. The Swiss Prosecutor’s Office may set the term at its own discretion. However, in respect to Ukraine and other CIS countries, temporary account blockages usually last for 90 days. If the Ukrainian Prosecutor’s Office does not provide an explanatory official request within this period, the account will be unblocked and the owner will regain access to funds.
Key Recommendations
If your bank asks questions of you when your account is not subject to any blocks and they have not yet transferred information to MROS, you should not avoid communication but rather demonstrate maximum openness. This could include explaining the sources of your funds while providing all the necessary documentation and clarifying any transactions. At this stage, it is already advisable to contact competent experts in the field of Swiss Banking Law who could negotiate with the bank on your behalf. If you receive notice of a funds blockage based on an order issued by the Swiss Prosecutor’s Office, you should urgently contact lawyers. They may then acquire information on the reasons and grounds for this decision. The Swiss Prosecutor’s Office is open to procedural cooperation and, as a rule, there are no difficulties in such a situation.
Swiss Bank Account Blocks at a Glance
1. Blocks on a Ukrainian client’s Swiss bank account can occur due to the initiative of the bank, the law enforcement bodies of Switzerland, or a request from Ukraine. 2. The Swiss Prosecutor’s Office may block an account at the request of the Ukrainian authorities (General Prosecutor’s Office or NABU) within the framework of mutual legal assistance agreements in criminal matters. This procedure has undergone simplification and been reduced to the exchange of letters. 3. Temporary blockage usually lasts 90 days. Removing an account blockage is possible by challenging the actions of the Ukrainian authorities in the Swiss Prosecutor’s Office and demonstrating an absence of links between the funds in the account and any illegal activities for which the customer is under suspicion. 4. Removal of permanent account blockage requires complex legal procedures including challenging the decision in the Federal Criminal Court of Switzerland or the withdrawal of charges or removal of property seizure in Ukraine 25
26
legal industry focus
Lviv law firms leading
regional reinvention Economic and legislative changes are forcing law firms across Ukraine to rethink their professional focuses The transformations taking place in Ukrainian society since 2014 have also left their mark on the country’s legal industry. The appearance of new state institutions, wholesale changes to legislation, and the emergence of entirely new economic priorities have obliged many Ukrainian law firms to rethink their professional focuses. This trend is evident across the country, with numerous regional nuances reflecting Ukraine’s diversity. The overall picture in early 2018 is one of guarded optimism throughout Ukraine’s legal industry as law firms throughout the country complete their adaption to the new environment and begin to anticipate a return to growth. The economic shocks of the past four years are clearly subsiding. In their place are expectations of consolidation based on solid if unspectacular GDP growth and positive indicators in sectors as diverse as retail and IT outsourcing.
Lviv Leads the Way
Lviv is leading the regional revival of the Ukrainian legal sector. A slowly rising tide of international investment in western Ukrainian is fuelling demand
www.bunews.com.ua
for new services and creating new markets for legal sector professionals. This comes as no surprise to those monitoring the regional breakdown of Ukraine’s investment appeal. Relatively speaking, Lviv has been one of Ukraine’s few post-2014 investment success stories. The city’s close proximity to EU markets, coupled with its strong academic traditions and business-friendly local authorities, have helped to attract a number of international investors and generate considerable demand for suitable legal services at the local level. Lviv-based law firm Advice Group’s Managing Partner Anton Podilchuk says demand has been strongest for one-stop-shop legal services ranging from company registration to launch. This mix can include everything from M&A, tax planning, personnel issues, land and real estate agreements, licensing and certification, to support in establishing the terms of cooperation with international financial institutions. Fellow Lviv specialist lawyer Serhiy Matviyiv, who serves as Managing Partner at Matviyiv & Partners, concurs. He says the increasingly attractive investment climate in the Lviv region is contributing to the development of a new legal
:
27
legal industry focus
: services market for international clients based on what he calls “a turnkey ba-
sis”. This growing demand for legal services is also helping to fuel the creation of so-called startup law firms in the Lviv region, some of which fall short of the standards international clients might expect to encounter. “Many of the new market players are not able to provide the necessary quality of service,” says Matviyiv, adding that they tend to drive prices down by engaging in dumping practices. Unsurprisingly, this is not a popular trend among the city’s more established legal services practitioners. With more and more international companies seeking to develop presences in Lviv, the city’s legal industry professionals are also finding themselves increasingly called upon to address issues of international compliance. “EU and US regulations encourage businesses to implement compliance policies and to adopt a zero tolerance attitude towards corruption. This leads to rising interest in these kinds of services. There is also a marked increase in demand for investigations to search for possible “white collar” crime within companies. Investigations of this nature have been the flavor of the month recently,” says Podilchuk.
Zakarpattia Battles Brain Drain
South of Lviv and across the Carpathian mountains in Ukraine’s Zakarpattia region, legal innovation has taken a back seat to more immediate challenges presented by a local workforce that is shrinking due to the recent rise in economic migration to nearby EU countries Slovakia, Poland, Romania and Hungary. “For many companies, legal services have become a secondary issue compared to the simple struggle to hold on to sufficient personnel and keep the business afloat,” says Rostislav Pazyna, Managing Partner at Collegium law firm. He notes local frustrations with the quality of the region’s judges. Pazyna says this has led to fewer cases going to court locally.
Odesa Market Expansion
Ukraine’s largest Black Sea port city Odesa has witnessed growing interest in legal services related to all things nautical over the past year. The city has always been a hub for legal practices relating to international trade and the protection of seamen abroad, but there has recently been a marked upturn in demand for legal support in areas connected to sea transport and infrastructure. This is in part due to rising international investment in Ukraine’s river port and seaport infrastructure as the country seeks to develop its international trade capacity. With local maritime expertize already in place, Odesa law firms are ideally positioned to take advantage as international companies and Ukrainian businesses alike look to upgrade the country’s nautical gateways and seafaring traffic. The Odesa legal sector is also attracting additional market participants. Jurline law firm Managing Partner Volodymyr Zubar says one of the most prominent trends in the Odesa region legal sector over the past twelve months has been the appearance of new law firms. “This growing number of small and mediumsized law firms appearing in the city will inevitably affect the balance of power within the Odesa legal services market over the coming two to three years,” he says. Zubar believes this will add to the evolution of the market, a process that has already seen Odesa law firm clientele increasingly inclined to use the services of several law firms in parallel while also maintaining their own inhouse legal teams.
and biggest river port terminal in the heartlands of Ukraine’s famed breadbasket, making it a logical focus for many of the new companies entering the Ukrainian market and seeking agribusiness legal services. Evgeniy Smirnov, the Managing Partner of Smirnov, Tarasevich & Partners law firm, says services relating to agribusiness acquisitions were among the most popular in Dnipro throughout 2017. “Foreign investors tend to acquire Ukrainian agricultural enterprises that come complete with considerable volumes of long-term land lease agreements for agricultural purposes,” he comments. Smirnov says that in line with recent market trends, many of the international companies investing in Ukraine’s agricultural sector tend to seek out regional law firms located closer to their assets. This has providing the Dnipro legal sector with additional business that might have previously gone to Kyiv-based law firms. Another agriculture-related area of Dnipro region legal practice experiencing growing demand over the past year is protection against so-called raider attacks and illegal land grabs. “Despite the frequent statements made by various state agencies underlining their commitment to preventing raider attacks on
agrarian enterprises, the protection of businesses throughout the agriculture sector remained just as relevant in 2017,” says Smirnov. “Over the past year, new raider schemes have emerged focusing on entire enterprises and also land banks under long-term lease.” This aspect of the legal services industry remains in high demand throughout Ukraine, where complaints over lax law enforcement remain all too common.
Kharkiv Wealth Management
In eastern Ukraine’s largest city, one of the most striking trends of the past 12 months has been the growth in demand for wealth management services from law firms. Maksym Sheverdin, the Managing Partner at Sheverdin & Partners law firm, says that while requests of this nature are nothing new for the Kyiv legal sector, they are now becoming more commonplace in regional centers like Kharkiv as wealthy members of the local business community seek more secure and transparent ways to manage their assets. “Wealth management requirements tend to involve a complex cocktail of legal consulting services covering all aspects of the financial life of private clients with large personal fortunes. This can include advice on investments, taxation, long-term planning, and things like corporate rights management,” explains Sheverdin. “It is not yet time to talk about the emergence of an entirely new legal practice as wealth management tends to involve a synthesis of various different legal specializations. Nevertheless, it is becoming a more popular service in all of Ukraine’s regional capitals. This is true of Kharkiv in particular.”
Dnipro: Gateway to the Breadbasket
As Ukraine’s agricultural sector goes from strength to strength and attracts growing levels of international interest, law firms in Dnipro are finding themselves faced with rising demand for agribusiness-related services. Although primarily seen as Ukraine’s industrial capital, Dnipro is also the largest city 28
About the author: Khrystyna Posheliuzhna is a correspondent for Yuridicheskaya Practika
Legal High School Opens in Central Kyiv Members of Ukraine’s legal services industry gathered at the Leonardo Center in downtown Kyiv in early 2018 to mark the opening of the Legal High School project. This innovative initiative is the brainchild of legal sector publishing house Yuridicheskaya Practika. It seeks to raise the bar for legal education in Ukraine by providing a platform where leading lawyers, officials and academics can share their insights into every aspect of the fast-evolving world of Ukrainian legal practice. The School favors a pluralistic approach to study and has already secured partnerships with many of Ukraine’s leading law firms as well as a number of judges and various state authorities. Memorandums of cooperation are in place with the Antimonopoly Committee of Ukraine, the Institute of International Relations at Taras Shevchenko National University, and the Ukrainian Academy of
30
Advocacy, while negotiations continue with a range of additional institutes and state bodies. Classes take place on a daily basis in central Kyiv and feature personal appearances from many of Ukraine’s most prominent legal industry professionals sharing their experience. Distance learning options are also a possibility with lectures live streamed online or available in archived format. The themes on the Legal High School curriculum are subject to regular updates and additions, with a new class focusing on tax law in March. The ultimate goal is to support the emergence of the next generation of Ukrainian lawyers and address the practicalities of the legal profession in a constructive manner that will complement the professional qualifications they have acquired via traditional academic routes.
legal industry focus
31
www.bunews.com.ua
What do the results of the latest Corruption Perception Survey reveal? Business representatives were also asked to choose what they believe is a key step that Ukraine needs to take to progress in combating corruption. As a result, more than half of the respondents chose creation of the Anti-Corruption Court. 71% of respondents stated that the most corrupt state institutions are the courts, followed by tax and customs authorities - 54% and local government authorities - 34%.
The results of the survey over the past 4 years show that in 2017, 96% of respondents considered corruption a widespread phenomenon in Ukraine. In comparison, this figure was 97% in 2016, in 2015 it was 98%, and 99% in 2014.
About the author: Andy Hunder, President of the American Chamber of Commerce in Ukraine, Member of the National Reforms Council under the President of Ukraine, and Treasurer of AmChams in Europe Executive Committee.
The American Chamber of Commerce in Ukraine last month presented the results of our annual Corruption Perception Survey. The latest survey was conducted anonymously for the fourth year in a row among representatives of Member Companies of the American Chamber of Commerce in Ukraine. The results of the survey are based on the assessment of the perception of the situation by the international business community operating in Ukraine today.
184 respondents took part in the survey, 80% are representatives of multinational companies. Compared to 2016, the number
of survey participants increased by 50%. 36% of respondents believe that the level of corruption has decreased over the last year (47% in 2016). The majority of respondents named Ukraine’s National Anti-Corruption Bureau the anticorruption champion of 2017. Half of all respondents consider the launch of electronic declarations to be the greatest success in the anti-corruption fight over the last year.
76% of business representatives believe that there is no need for companies in Ukraine to engage in corruption activities in order to have higher chances of success.
Corruption remains a problem for the business community in Ukraine. 89% of respondents believe that combating corruption is a priority for improving Ukraine’s business climate. 91% of business representatives indicated that they had faced corruption while doing business in Ukraine, which is 10% more than last year. The fight against corruption together with the creation of Anti-Corruption Court remains a priority for 2018, with the business community’s expectations of eliminating corruption seen as a key to economic growth and Foreign Direct Investment attraction.
31
Expert view Kateryna Oliinyk Co-Chair of the Chamber IPR CommitteeCounsel, Head of the IP Practice Arzinger Law Office
Legislative Gridlock Under the Dome: Collective Management Organizations and Dcfta Implementation The Ukrainian IPR laws are now the most flexible part of the Ukrainian legislation which is
currently harmonized with the European standards of IPR protection under the umbrella
of DCFTA implementation. EU-Ukraine Association Agreement sets up the standards for the IPR protection and also touches upon the issues related to collective management of
rights. Under Art. 168 of the said Agreement, Ukraine accepted that there is the need for the respective collecting societies to achieve a high level of rationalization and transpar-
ency with respect to the execution of their tasks for the purpose of mutually ensuring
easier access to and delivery of content between the territories of the Parties and mutual transfer of royalties.
However, the issues related to reformation of the system of collection and distribution of royalties in Ukraine remains one of the most debatable topic for years in Ukraine, mostly due to that fact that Ukraine remains on the Priority Watch list in the “Special 301” Report
prepared by USTR for 2017, mostly due to the unfair, nontransparent administration of the system for collective management organizations.
At the same time, for the time being the Ministry of Economic Development and Trade of Ukraine which is now responsible for the IPR policy during the transition period to the Intellectual Property Office is now deprived to effect the accurate monitoring onto the activities of CMOs operating in Ukraine as a number of regulations governing the procedures
for supervision and monitoring of CMOs activities have been cancelled either by the court order or respective Cabinet’s decree.
Within last year file draft laws have been filed to Verkhovna Rada (The Ukrainian Parlia-
ment) which suggested different interpretations of reformation of CMOs in Ukraine. The history of these submissions clearly illustrates that, although all the lawmakers claims that all the changes in the law governing operation of CMOs in Ukraine shall secure CMOs’
transparency and accountability and shall foster good governance in all their activities as
the fundamental safeguards for the effective bottom-up stakeholder operating model of
the collective management system, there is no consensus view on the operational model of CMOs which would achieves transparency and accountability so that to promote creativity and the fair and accurate distribution of royalties to the authors.
Thus, all the discussions of the draft laws under the Dome of Verkhovna Rada in the relevant standing committees typically ended with recriminations between the parties deepening and no sign of progress towards ending the impasse.
However, on February 8, 2018 the relevant standing committee considered draft law
7466 as of December 28, 2017 “On the Effective Management of the Economic Rights of Rightholders in the field of Copyright and/or Related Rights” and made the decision to adopt it as a basis at first reading. However, the draft law was passed with the reservation that the draft law will be subject to significant modifications to eliminate a number
of inaccuracies and inadequacies so as to secure the interest of community of Ukrainian authors and the adequate transformation of one of the major SMOs – Ukrainian Agency of Copyright and Related Rights – and harmonization of the Ukrainian legislation with
EU Directive 2014/26/EU on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market.
The Ukrainian community does hope that the consensus will be reached that will result in the sustainable transition to the new transparent and accountable model of administration of the system for collective management organizations in Ukraine.
nian legislation with EU regulations. It should be noted that Draft Law contains a number
of positive developments, among others: Reducing the list of objects, which may be con-
Alexander Kozyriev Co-Chair of the Chamber IPR Committee Legal Counsel and Compliance Officer Bayer HealthCare Pharmaceuticals
Effective Patents’ Protection to Streamline Inventions Since the 1990’s, the pharmaceutical industry has brought over 1,100 new medicines to European patients, radically improving their lives. IP incentives have been and will con-
tinue to be critical to long-term innovation, especially for a pharmaceutical market, which
is improving the life of patients all over the world. That is why IP protection is especially relevant for such sensitive markets as pharmaceuticals.
Here are the reasons why Ukraine should refine the IP incentives and rewards system to encourage research and innovation: encourage companies to invest in R&D by protecting
any invention from copying for a limited period of time, during which a patent holder can prevent unfair practices by competitors that did not have to undergo risky, expensive and complex R&D; in exchange for exclusivity, the investor makes the invention public to enable more research; extend exclusivity for a pharmaceutical product that is protected by
a patent to compensate for the time lost during the lengthy development period before a medicine can be made available on the market and ensure sustainable funding for such
research; incentivize companies to research and develop medicines for rare diseases by providing specific development support and protecting them once marketing authorization is obtained from market competition with similar medicines for the same rare (‘orphan’) indications.
In this context on February 01, 2018 the Ukrainian Parliament registered Draft Law No. 7538 “On Amending Certain Legislative Acts of Ukraine on Improving the Legal Protection
of Inventions and Utility Models”. This is definitely a positive signal for development and implementation of innovations, investment in the country and harmonization of Ukrai-
sidered as utility models (an instrument for combatting a so-called ‘patent trolling’); new
opposition mechanisms called ‘pre-grant opposition’ and ‘post-grant opposition’; on-line applications.
At the same time, the Draft Law has certain shortcomings that may derail the positive aspirations behind the Draft Law. Specifically, the Draft Law aims to solve the problem with registration of so-called ‘evergreen patents’ [‘вічнозелені патенти’ in Ukrainian] that are
blocking access of cheaper generic medicines to Ukrainian market. The Draft Law is supposed to reduce the list of patentable objects that may be covered by ‘evergreen patents’. Unfortunately, such changes can also significantly limit protection of intellectual property
rights and narrow the rights of applicants regarding the legal protection of their inventions and obtaining supplementary protection certificates. Other controversial changes include:
- Clause 3 Article 6 contains a lengthy list of substances that are not subject to patent pro-
tection. This provision can completely downplay the added value of innovation due to the inability to protect the rights to such innovations.
- Clause 5 Article 31 concerns actions that are not recognized as a violation of IP rights. These provisions substantially limit protection of intellectual property rights in Ukraine
given weaknesses in the domestic judicial system and in procedure for the registration of medicines. Such changes may lead to uncontrolled imports of commercial batches of medicines that violate IP rights, pretending that they are destined for non-commercial usage or R&D.
It is noteworthy that similar provisions are not to be found in the EU Directives or regulations; and we hope that the lawmaker will ultimately eliminate them from the text of the Draft Law.
While we recognize the challenges faced by health system in Ukraine, a rollback in
the IP protection and EU aspirations of Ukraine is not the answer. In this regard, the
current version of the Draft Law substantially restricts the rights of innovative companies, including pharmaceutical companies, and does not correspond to the EU standards and best practice.
Expert view Ruslan Drobyazko Co-Chair of the Chamber IPR Committee Partner Baker & McKenzie – CIS, Limited
Yuliya Kolchenko Expert of the Chamber IPR Committee Senior Associate Baker & McKenzie – CIS, Limited
Strengthening Cooperation with Authorities and Looking for New Possibilities in the Fight Against Counterfeits One of long-standing problems in the fight against counterfeits in Ukraine is the lack of efficient enforcement mechanisms on-line Even a strongly grounded statement of crime may not result in successful criminal pro-
ceedings in Ukraine. In the complicated and long criminal procedures infringers sometimes come unscathed out of the battle. It is almost impossible to block an online store
selling counterfeits, but even if the police manages to close the website, in a few days the
same store will emerge again under another domain name. Therefore, as long as procedures for blocking web-sites are so complicated, the struggle against illegal online stores would be in an infinite loop. One of the latest bills aimed to break this loop is the Draft
Law of Ukraine “On Amendments to the Law of Ukraine “On Consumer Rights Protection”
and Certain Legislative Acts of Ukraine on Measures for the Suspension of the Activities
of E-commerce Entities” No. 6754 dated 17 July 2017. The draft law stipulates that the State Service of Ukraine for Food Safety and Consumer Protection will be empowered to
decide on blocking websites, if the seller (under the respective website) does not provide information about a valid contact number, an address and a name of the seller’s entity. This
amendment in the draft law may help to determine the sellers and quickly disable malicious websites avoiding a long procedure of criminal investigation.
Another problem high on the agenda for most right holders using the Ukrainian IP cus-
toms register is the need to prolong the term for examination of suspended goods and simplify communication with the customs authorities.
Time to Champion Intellectual Property Rights in Ukraine In today’s economy, business must innovate and create in order to succeed. Intellectual property is a so-called product of creativity, an intangible asset, which creates a competi-
tive advantage of any business. Sometimes IP represents the largest asset of a company,
possessing a greater value than a factory or plant. Decent IPR enforcement is crucial for businesses as by protecting intellectual property rights the company protects its talents, innovations and investments. Ukraine can’t boast of a proper IPR protection and contin-
ues facing serious challenges, while IP is vital for economic growth in terms of research,
innovation, and employment. Here the question arises – if there is a poor protection of innovation, why innovate at all?
Better IPR Protection for Better Ukraine
IP right holders urge to enhance cooperation with the customs service to enable more
effective and smooth functioning of the IP customs register. The right holders (even if they requested an extended suspension of the infringing goods) can hardly manage to inspect the infringing goods and obtain the results of IP examination within 10+10 cal-
endar days. The customs can initiate an administrative case on the grounds of violation
of customs rules (importing counterfeit goods), however, for this, they would need to obtain an accredited IP expert report confirming that the imported goods are counter-
feit based on the requirements of Part 14 Article 399 of the Customs Code of Ukraine. Moreover, right holders cannot possibly travel to each customs unit of Ukraine to check
the goods, take samples or photos of the goods. For this reason, it is necessary to develop an efficient procedure of cooperation between the right holders and customs authori-
ties and stipulate the grounds for extended suspension of the suspended goods prior to initiating an administrative procedure by the customs. Another core issue in this case
is the lack of obligation to involve right holders during the procedure of destruction of
counterfeit goods by enforcement authorities. Whereas, such procedures were envisaged by the draft law “On Amendments to Certain Legislative Acts of Ukraine on En-
hancing Liability and Protection of Rights in the Sphere of Intellectual Property” dated
09.08.2016 published for discussion by the Ministry of Economic Development and Trade of Ukraine, however this draft law did not reach the Parliament yet. Therefore, there is room for improvement.
#GiveChancetoDream Promoting innovations and creativity in Ukraine and in honor of the World Intellectual
Property Day, we launched a special social project #GIVECHANCETODREAM together
with our partners. It became possible due to the support of Lubomyr Levitskiy team, the US Embassy in Ukraine, the United States Agency for International Development
(USAID), America House Kyiv, the Association of the Music Industry of Ukraine and the Antipiracy Initiative “Clear Sky”. The project envisages a series of public awareness
campaigns by showing antipiracy videos on television and the Internet, creating of a web-resource with access to legal content and the project web-page to draw attention
to the problem of copyright infringements and piracy in cinematographic, music, and IT industries.
IPR – I Protect & Respect
Proper IPR enforcement is a guarantee of the stable economic development and one of
In order to achieve further economic growth Ukraine has to be fueled by a strong IPR
tance of developing IPR standards as preconditions for the success of any economy in the
Ukraine – to find an IPR Champion in the Government who will drive this issue at the high-
the priorities of the American Chamber of Commerce in Ukraine, stated in the Chamber Roadmap on 5 steps for Ukraine’s sustainable economic recovery. Realizing the impor21st century, the Intellectual Property Rights Committee is successfully functioning within
the Chamber Policy platform. Since 2016 the Committee’s experts managed to move the
IPR issue off the dead center. But still a lot needs to be done to promote domestic innovations and creativity, attracting FDI and talents into Ukraine. In particular, the IPR Commit-
tee is currently advocating for harmonization of national legislation with EU law, creation
of effective mechanisms to combat counterfeit and illegal trade, establishment of fair and transparent administration of the system for collective management organizations, and
development of enforcement mechanisms. The Chamber is also pushing to pass the legislation regulating IPR issues – Government’s action plan on the reform of the state system
of legal protection of intellectual property in Ukraine. Judicial reform is needed to ensure
the efficient enforcement of property rights. In 2017, Ukraine passed legislation to create a specialized High Court on Intellectual Property. Now it exists only in the form of Order of the President of Ukraine, thus we are looking forward to its soonest formation.
protection system. To effectively address IP challenges, Ukraine needs bold leadership on IPR protection and promotion. It’s high time to champion intellectual property rights in
est level. The American Chamber of Commerce in Ukraine is ready to continue providing all the support and professional expertise to move the IP agenda forward, opening Ukraine for innovations and creativity. So, let’s protect, respect and stand for intellectual property together, giving chance to someone’s dreams.
Yuliia Stelmakh Chamber Policy Officer YStelmakh@chamber.ua Lidiya Levitska Chamber Policy Officer llevitska@chamber.ua
B2G Dialogue Presentation of the Chamber Corruption Perception Survey
For 4 years, the American Chamber of Commerce in Ukraine has been con-
Perception Survey among representatives of Chamber Member Companies.
tise. For the fourth year in a row the Chamber holds its annual Corruption
an attractive investment climate in Ukraine.
tinuously pushing for much-needed reforms at the highest level with regard to fighting corruption, supporting the Government with professional exper-
The fight against corruption together with the creation of Anti-Corruption
Court remains a priority for 2018 and an indisputable condition for creating
New Chamber Working Groups
Working Group on Agricultural Machinery Issues within the Chamber Agricultural Committee
Working Group on Electricity Issues within the Chamber Energy Committee
The objective of the new Working Group is to serve as a platform for effective cooperation between
Working Group on Electricity Issues was established to contribute
producers of agrarian machinery and responsible state authorities aimed at creating favorable conditions for functioning and development of the agricultural machinery market in Ukraine. Head of the Working Group: Peter Sachse, Country Manager, John Deere Ukraine
to the modernization of Ukrainian electricity market and partici-
pation in drafting and discussion of the secondary legislation for implementation of the Law “On Electricity Market�. Responsible Junior Policy Officer: Vladyslava Levakina,
Responsible Policy Officer: Mariia Goncharenko,
vlevakina@chamber.ua
MGoncharenko@chamber.ua
Working Groups on Health & Medical Services Providers and Healthcare Supply Chain Providers within the Chamber Healthcare Committee Newly launched Working Groups are
aimed to serve as a platform for effective cooperation between Chamber members and responsible state authorities aimed at establishing competitive landscape
for development of healthcare sector in Ukraine. The Chamber is actively working
with private clinics and logistic providers in the respective Working Groups.
Head of the Working Group on
Head of the Working Group on
Healthcare Supply Chain Providers:
Health & Medical Services Providers:
Igor Mozolevych, Delta Medical
Ruslan Sovershennyi, Cratia
Responsible Policy Officer:
Committee Assistant:
Maxim Proskurov,
Inna Markus,
MProskurov@chamber.ua
imarkus@chamber.ua
B2G Dialogue
Meeting with Ulana Suprun, Acting Minister of Health of Ukraine and Olga Stefanyshyna, Deputy Minister of Health Acting Minister of Health of Ukraine Ulana Suprun and Deputy Minister of
Health Olga Stefanyshyna presented the priority directions for transformation of healthcare system of Ukraine to the Members of the American
Chamber of Commerce in Ukraine and discussed ways of cooperation with the business community as well as priorities of the state healthcare policy for 2018.
Meeting with Volodymyr Omelyan, Minister of Infrastructure of Ukraine Chamber Infrastructure Committee held a meeting with Volodymyr Omelyan, Min-
Participants of the meeting discussed next steps of the Ministry of Infrastructure of
State Service for Marine and River Transport of Ukraine (Maritime Administration).
the State Service for Marine and River Transport of Ukraine and its further plans.
ister of Infrastructure of Ukraine, Raivis Veckagans, Acting Head of the State Enter-
prise “Ukrainian Sea Ports Authority� (USPA) and Dmitriy Petrenko, Acting Head of
Ukraine regarding implementation of the Transport Strategy of Ukraine, as well as
plans of the Ministry for 2018. The most topical issue of discussion was creation of
Meeting with Judges of Commercial Cassation Court within the Supreme Court
Chamber Members had an exclusive opportunity to meet and address their questions to representatives of relaunched higher judicial instance in Ukraine.
Among the participants of the meeting: Bohdan Lvov, Deputy Head of the Supreme
Court, Head of Commercial Cassation Court within the Supreme Court; Ganna Vronska, Judge, Secretary of III Chamber of Commercial Cassation Court within the Supreme Court; Yuriy Chumak, Judge of Commercial Cassation Court within the Supreme Court.
Meeting with Myroslav Prodan, Acting Head of the State Fiscal Service of Ukraine The Chamber meeting with Myroslav Prodan, Acting Head of the State Fiscal Service
of Ukraine was focused on the results of the State Fiscal Service of Ukraine activities
in 2017 and plans for 2018, further work of the System of Tax Invoices Blocking, reform of the State Fiscal Service of Ukraine as well as other issues and proposals within tax and customs spheres.
Annual Members Appreciation Reception 2018 On February 1, the American Chamber of Commerce in Ukraine held its Annual Members
Board of Directors and Managing Director of McDonald’s Ukraine Grzegorz Chmielarski
Chamber Annual Members Appreciation Reception passed under the sign of economic
the growth of their business in 2017 and 82% are planning to expand their business in
Appreciation Reception that gathered 400+ distinguished guests – Chamber Members, state officials, partners and friends of the Chamber.
growth. All distinguished speakers – Prime Minister of Ukraine Volodymyr Groysman, U.S. Ambassador to Ukraine Marie Yovanovitch, CEO of the American Chamber of Commerce
to the EU Susan Danger, Chamber President Andy Hunder, Chairman of the Chamber
– mentioned the importance and hope in further growth during their speeches. According to the results of the survey held in real time during the event, 63% of Members saw
Ukraine in 2018. Answering the question “Did your company increase salaries in 2017?”,
the whole business community answered “yes” – 70% of respondents for more than 10%, 24% for more than 30%, 6% - for more than 50%.
SOFT DRINKS SPONSOR
WINE SPONSOR
BEER SPONSOR
Andy Hunder, President of the American Chamber of Commerce in Ukraine, delivering speech at the Annual Members Appreciation Reception
Andy Hunder, President of the
Volodymyr Groysman,
Marie Yovanovitch,
American Chamber of Commerce in Ukraine
Prime Minister of Ukraine
U.S. Ambassador to Ukraine
Grzegorz Chmielarski, Chairman of the Chamber Board of Directors
Susan Danger, CEO of the American
and Managing Director of McDonald’s Ukraine
Chamber of Commerce to the EU
Annual Members Appreciation Reception 2018
WELDI Business Breakfast During the first in 2018 WELDI* Business Breakfast a very special guest, CEO
of the American Chamber of Commerce to the EU Susan Danger, named by PO-
LITICO as one of the top 20 women influencers in Brussels, shared her secrets of leadership.
*WELDI - Women’s Executives Leadership Development Initiative is a personal development & business-networking platform of the American Chamber of
Commerce in Ukraine that brings together successful, goal-oriented, and modern women leaders.
PREMIUM SPONSOR
WELDI participants with CEO of the American Chamber of Commerce to the EU Susan Danger
From left to right: Iryna Kalmykova, Events Coordinator of the American Chamber of Commerce in Ukraine; Susan Danger, CEO of the American Chamber of Commerce to the EU; Tetyana Prokopchuk, Vice President of the American Chamber of Commerce in Ukraine.
St. Valentine’s Blood Donation Love can be demonstrated not only with flowers and chocolate. This winter
20 liters of blood for Kyiv local hospitals. Donation of Blood means a few min-
citizens joined our initiative and became donors. This time we gathered over
partners – Donor.UA and ParkInn Hotel – for making this event possible.
the American Chamber of Commerce in Ukraine held Saint Valentine’s Day
Blood Donation. A lot of socially responsible business representatives and SPONSORED WITH LOVE BY
utes to you but a lifetime for somebody else.
We are very grateful to our sponsor – Sayenko Kharenko Law Firm and our PARTNERS
Ukrainian employers facing HR perfect storm Companies must compete against expanding EU employment options and booming IT sector According to UN figures, the CEE region is home to the ten fastest-shrinking populations in the world. This process poses a major threat to Ukraine’s economic well-being, since Ukrainians represent the best solution to long-term demographic decline for many Central and Eastern European countries. Currently Ukraine ranks in the top five of the UN’s fastest-shrinking populations. It is one of a number of factors contributing to a perfect storm of recruitment and retention challenges facing Ukrainian employers.
graphic crisis. The record low birthrates of the mid-1990s mean the country is now witnessing a generational drop in the number of university graduates and young recruits entering the job market.
Companies Must Compete
From the Baltic to the Balkans, national governments are relaxing employment regulations and looking at ways to bolster their Ukrainian workforce. Many are actively recruiting within Ukraine itself, with billboards in towns and cities advertising seasonal work or full-scale emigration. For now, Poland is the regional leader with a workforce of approximately 1.5 million Ukrainians. Others are seeking to catch up. For example, the Czech Republic announced early this year its plans to double the annual quota for Ukrainian fast-track migrant workers from 9,600 to 19,600. Three years ago, the quota had been just 3,800. Prague’s message is clear - Ukrainian workers are not merely welcome but vital to the Czech Republic’s economy.
With a diminishing pool of potential recruits and greater competition from both domestic and international alternatives, Galina argues that Ukrainian employers must find ways to become more competitive. “We are faced with an unappealing overall picture of the human resources situation in Ukraine,” she says. “It is becoming more difficult to attract quality candidates and young talent. For instance, nowadays it takes companies twice as much time to fill vacant positions, while 3% of vacancies in our bank remain open.” Part of the solution is to boost the benefits on offer to potential employees. Credit Agricole has long been among the Ukrainian market leaders in terms of the corporate benefits on offer to staff members, with medical and life insurance alongside highly preferential loan options and a special mortgage program designed to help employees get onto the property ladder. The bank revised and upgraded the terms of these benefits in early 2017 as part of efforts to reward employee loyalty and attract quality candidates.
As the HR Director at Credit Agricole Bank in Ukraine, Galina Nechaeva has watched this perfect storm gain momentum in recent years. She acknowledges the effect of economic migration to neighboring EU countries. The recent relaxation of Euro zone restrictions has contributed to the outflow of qualified specialists. This factor comes in parallel to increasingly intensive competition for the nation’s limited HR resources from Ukraine’s own thriving IT and commercial sectors, especially the agribusiness sector. The domestic economic situation in Ukraine is improving but not fast enough to ensure the prosperity of the business sector. The rate of inflation is still high, leading to higher salary expectations and staff turnover that has reached 30% in the banking sector in particular. This is forcing companies in Ukraine to overpay in to keep the staff onboard. The staff turnover at Credit Agricole represented about 24% over the past year - lower than average for the banking sector in Ukraine but still high. These trends are taking shape against the backdrop of Ukraine’s own demo-
Galina Nechaeva believes that in Ukraine’s increasingly competitive recruitment market, corporate teambuilding can play an important role in retaining employees. Credit Agricole invests significantly in corporate activities for staff members, with a number of major events on the annual calendar along with sponsorship of sports leagues and participation in cycling races and marathons. She cites the specific example of a manager who recently turned down a lucrative offer to leave the bank, stating that he was happy in his current job and particularly valued his extracurricular involvement in the company football team. “We actively promote a sense of team spirit,” says Ms. Nechaeva. “This warm atmosphere and sense of belonging is definitely an attractive feature for potential employees.” This approach chimes well with the priorities of young Ukrainians. While salary demands remain a key concern, Ms. Nechaeva says factors such as office perks and work-life balance are now playing far more prominent roles in the decision-making processes of the emerging generation. “Many young Ukraini-
Central Europe Recruits Ukrainians
Growing Domestic Competition
Teambuilding Appeal
With a diminishing pool of potential recruits and greater competition from both domestic and international alternatives, Ukrainian employers must find ways to become more competitive 46
economy
ans are familiar with the less formal working environment at IT companies and are interested in things like open space offices, full-scope benefits, and the possibilities of working from home. As a bank, we are not always able to meet these expectations, but we aim to offer other work-life benefits including corporate teambuilding.”
Investing in Employees
In the battle to attract the best candidates, opportunities for career growth are an important selling point where more well-established companies enjoy potential advantages over the uncertainties of EU employment and many of the more recent IT arrivals. Credit Agricole seeks to emphasize the opportunities within the company via its internal mobility approach and give priority to existing employees for all vacancies. Meanwhile, high potential employees seeking further educational qualifications may count on company support to study either in Ukraine or internationally, with the bank providing living expenses as well as tuition fees. “We cover everything,” says Galina. “It is an investment in our staff and it is also a retention tool that involves a contractual commitment to further employment with the bank for a given period.” She also advocates active engagement with undergraduates in order to help them develop the practical skillset needed to enter the workforce upon graduation. This is not always a popular policy among management, where many prefer to target professionally experienced recruits, but Galina believes the benefits of engaging at the undergraduate level far outweigh the costs. “Graduate recruits tend to be the most loyal and cost effective in the long run, but they do require investment in terms of training.”
Rising Salaries
Ultimately, salaries will remain one of the most important factors in the battle
About the author: Galina Nechaeva is HR Director at Credit Agricole Bank in Ukraine to attract and retain Ukraine’s promising employees. Galina says salary expectations have risen significantly over the past year, with broadening employment options and the rising cost of living fueling this growth. Credit Agricole have responded by putting in place an action plan with a balanced combination between salary increases and additional benefits. Ms. Nechaeva believes Ukrainian employers need to address these rising salary expectations if they are to avoid losing staff. “This is not just an issue for the banking sector. It is evident throughout the Ukrainian economy. Companies have to be more imaginative and proactive if willing to compete for the best specialists.”
We Accept Your Health Insurance The longest serving and most trusted preferred health provider among global insurances in the region, including Cigna, Allianz, and Bupa. AMC’s goal is to make quality healthcare accessible to everyone. Call us to learn more about insurance direct billing and AMC’s many benefits.
www.amcenters.com
www.bunews.com.ua
Kyiv Lviv Odessa Tbilisi Batumi Almaty
+38 (044) 490 76 00
47
reform
Time to crack down on Ukraine’s multi-voting MPs Absentee voting in Ukrainian parliament makes a mockery of country’s democratic aspirations The contemporary Ukrainian political debate is full of talk about combating corruption and establishing the rule of law. Few would doubt that these are key national priorities, but the country currently lacks plausible role models. When it comes to abiding by the law, Ukrainian society should be able to rely on those who create the laws to set a good example. However, in practice, Ukrainian MPs are often the most brazen of all when it comes to breaking the laws they pass. Perhaps the most immediately obvious example of this disregard for the law is the failure of MPs to comply with the simple procedures governing parliamentary votes. There is a long and very damaging parliamentary tradition in Ukraine of voting for absent colleagues. Known variously as “piano-playing”, “multi-voting” or by the Ukrainian term “knopkodavstvo” (literally meaning “button pushing”), the practice of crafty MPs pressing the electronic voting buttons of their non-attending fellow party members is an everyday occurrence that Ukrainian society has grown wearily accustomed to. Technically, voting for absentee colleagues is in breach of not one but three separate laws: the Ukrainian Constitution, the law governing MPs, and the law outlining parliamentary regulations. Nevertheless, the practice continues to flourish despite repeated promises to clamp down on offenders. According to the Ukrainian NGO “Chesno”, 73 different MPs engaged in multi-voting on 265 separate occasions in 2017. In other words, almost 20% of all MPs stand accused of engaging in this practice over the past year alone. Nor is the situation showing signs of improvement. On the contrary, the total incidence of absentee voting in 2017 was higher than the overall totals for 2015 and 2016 combined. Scenes of Ukrainian MPs running around the parliamentary session hall or leaning across from row to row
are often the subject of jokes and dark humour, but the reality is no laughing matter. By showing such complete disregard for one of the most basic principles of parliamentary procedure, Ukraine’s MPs are undermining the already minimal levels of public trust in parliament as an institution. As well as the appalling optics created by multi-voting MPs, there are also practical aspects to consider. Allowing MPs to vote on behalf of their absent colleagues creates a culture of part-time parliamentarianism. Instead of demonstrating due respect for their parliamentary duties, MPs are able to skip work whenever it suits them. According to the Committee of Voters of Ukraine, more than 70% of MPs missed over half of the parliamentary votes in January 2018. Around one tenth of MPs did not vote at all throughout the entire month. Clearly, many MPs regard parliament as little more than a private members club or a hobby. Levels of public apathy towards this kind of brazenly undemocratic conduct are high. This makes it unlikely that voters themselves will punish repeat offenders at the ballot box. The best route to reform may lie at the legislative level. It is crucial to clarify responsibility for multi-voting. Present legislation governing the status of MPs applies responsibility for voting violations to everyone but the MPs themselves.
This absurd situation needs to change. Sanctions for voting on behalf of absent colleagues should range from loss of parliamentary seat to criminal liability. In addition to legislative amendments, the recent experience of the Kyiv City Council offers a ready technological solution. The Kyiv authorities have adopted a voting system whereby it is physically virtually impossible to vote for absent colleagues. Council members must vote with one hand while identifying the relevant legislation with their other hand. Both buttons must be pressed for a certain period simultaneously in order for an individual vote to register. While not 100% fool proof, this tried and tested system would radically reduce the scope for multi-voting in the Ukrainian parliament. As Ukraine moves into a new election cycle, it is particularly important to support the credibility of the country’s democratic institutions. Unfortunately, we cannot rely on the conscience and integrity of the current crop of MPs in this regard. With that in mind, all progressive parties should show their support for symbolic measures such as outlawing multivoting. Putting an end to this practice would demonstrate that Ukraine’s parliamentary culture is maturing. It would also reflect the public mood, which is no longer prepared to tolerate the dysfunctional democracy of the past few decades.
About the author: Sergiy Gusovsky is a member of the Kyiv City Council where he serves as head of the Samopomich faction
48
Ukraine needs a higher profile in Brussels AmCham EU CEO says Ukraine cannot afford complacency as Brussels focuses on internal issues
About the interviewee: Susan Danger (right) is CEO of the American Chamber of Commerce to the EU As CEO of the American Chamber of Commerce to the EU, Susan Danger knows all about the importance of effective communication campaigns in Brussels. Ms. Danger was at the forefront of AmCham EU’s recent award-winning multimedia efforts to promote the benefits of the European Union’s single market, and received recognition from politico.com in 2016 as one of the top twenty women influencers in the EU capital. She came to Kyiv for the first time in early 2018 as guest of American Chamber of Commerce in Ukraine to attend the Chamber’s annual Membership Appreciation Meeting. During her visit, she spoke to Business Ukraine magazine about the communications issues Ukrainians face as they seek to keep the country as high as possible on Europe’s political and economic agendas. In her role at the helm of AmCham EU, Ms. Danger focuses primarily on European Union themes. She says developments in key neighborhood countries like Ukraine are very much on the Brussels radar, but cautions against any assumptions regarding the extent of EU interest. Instead, she points to the many major internal issues currently preoccupying EU leaders such as Brexit, Transatlantic trade and the future of the single market. Ms. Danger says Ukraine’s European choice has clearly registered in Brussels, but argues that the country could benefit from efforts to promote itself more actively. “Ukraine has a reputation as a country that sees itself moving closer towards the EU, but there is also recognition that this is a long process,” she says. “While there are reports that the pace of Ukraine’s transition may be slowing, I am hearing from institutions that progress continues. That should be the preferred narrative. It is vital for Ukraine to demonstrate that it is becoming more attractive to investors and moving forward.” Since 2014, there have been a number of initiatives to raise Ukraine’s profile in Brussels. Ms. Danger supports the idea of prioritizing this direction further, arguing that it is important for Ukraine to have both an active EU-wide communications strategy and a strong physical presence in the EU capital itself. 50
In common with many international observers, she says virtually all the media coverage of Ukraine she encounters relates to the ongoing conflict in the east of the country and the problems of institutional corruption. An emphasis on positive developments taking place in Ukraine could help to move the country’s image gradually away from these damaging negative associations. “As the country looks to develop its EU communications strategy, Ukraine could benefit from a greater focus on success stories like the Ukrainian IT sector,” she says. “You cannot expect to change a country’s international image overnight, but shifting attention towards attractive themes like the expanding IT sector would help to move the discussion away from negative perceptions. Ukraine has a very highly skilled and welleducated workforce, while at the same time being extremely competitive in terms of costs. Those factors can serve as the ingredients of a potentially persuasive narrative.” Ms. Danger’s own most recent communications campaign experiences have convinced her of the need to make sure that whatever you are trying to say, it is crucial to make it as relevant as possible to individual audience members. Her AmCham EU campaign highlighting the benefits of the European Union’s free trade zone won plaudits by offering specific insights into the ways free trade had improved everyday life for ordinary EU citizens. She now sees this storytelling element as an essential tool. In an era where facts are often no longer sufficient to win the argument, Ukraine can also learn from this experience. “Events in recent years have shaken people all over the world out of a kind of complacency rooted in the idea that facts speak for themselves and audiences will always eventually ‘get it’. Things like the Brexit vote have made us realize that this is not always the case,” she says. “Whether it is EU free trade or Ukraine seeking to present itself as an attractive potential partner, nobody can afford to be complacent. Instead, the key is to tell your story in an engaging and relatable manner.”
Ulf Schneider Founder and Managing Partner
We provide our international clients with the back office services they need to expand their business into or within Ukraine, Russia, Kazakhstan, Belarus, Poland and Germany. Our services include market entry support, accounting outsourcing, tax consulting, import, ERP systems and support in legal matters with a focus on migration, labor and corporate law. Contact us to receive your individual offer.
www.schneider-group.com
Contact person | Kateryna Kotenko +380 / 44 / 490 55 28 | kyiv@schneider-group.com
Reinventing Brand Ukraine at Davos Making Ukraine fashionable: the Ukraine House team pose for a group portrait while clad in suitably patriotic Ukrainian designer outfits at the World Economic Forum in Davos in January 2018
Ukraine House initiative seeks to counter stereotypes and emphasize Ukrainian innovation
The 2014 Revolution of Dignity and subsequent Russian invasion have raised Ukraine’s global profile to unprecedented levels, but the country remains trapped in a negative news cycle dominated by talk of war and corruption. In a bid to change the conversation, a group of investment and tech sector professionals came together in 2016 with a plan to present an altogether more engaging Ukrainian narrative at the World Economic Forum in Davos. Andrey Kolodyuk talks us through the development of the Ukraine House concept and explains why it was so important to present the best of the new Ukraine to the global elite as they gathered in the Swiss Alps earlier this year.
How It All Began
Two years ago, Ukraine found itself practically excluded from the official program of the World Economic Forum in Davos. It seemed clear at the time that the world had become tired of hearing about Ukraine’s confusing hybrid war and the country’s chronic corruption problems. I recognized then that Ukraine needed a more authentic voice at Davos and decided to act. Together with my colleagues at the Ukrainian Venture Capital and Private Equity Association (UVCA), we began work on what would eventually become Ukraine House. By the time of the 2017 World Economic Forum, we had yet to convince enough people of the need for a major Ukrainian presence. Initial support came from the Western NIS Enterprise Fund and Ciklum along with the Victor Pinchuk Foundation and the National Reforms Council. This was not enough for a fullyfledged Ukraine House presence, but it did allow us to host two events under the branding “Ukraine Davos Nights”. We focused on inviting investors and technology entrepreneurs from around the world and achieved a modicum of 54
success, attracting over 400 guests. This experience was to serve as the prototype for the future Ukraine House, giving us a feel for the specifics of Davos and convincing us that the concept was worth pursuing further. We set our sights on unveiling the inaugural Ukraine House at the 2018 Forum. From Day One, everyone involved in the Ukraine House initiative agreed not to ask for any government help, which we knew could drown the project in bureaucratic procedures and other barriers. Instead, we would rely on our own resources and the financial support of our sponsors. The second key challenge was to set out our goals. It was noticeable that the more Ukraine’s political leaders spoke about the conflict with Russia and other problems in the country, the more difficult it became to attract international investment to Ukraine. We identified our key task as diverging from the dominant geopolitical narrative and presenting Ukraine in a far more pragmatic and practical manner. We wanted to tell the world about Ukraine as an investment opportunity and as a global technology partner. Our experience in Davos in 2017 had convinced us that there was significant untapped interest in the technology sector and considerable potential appetite for Ukrainian opportunities. We spent many exciting and inspirational months developing our agenda. I remember travelling to Lviv by intercity train with Olga Afanasyeva (UVCA Director) and Marina Vyshegorodskikh (Ciklum) and discussing the Ukraine House agenda for five hours without pausing for breath. We reached a consensus that we must seek to address global themes from a Ukrainian perspective rather making Ukraine itself the subject. As the team took shape, I eventually found myself as the only male on the organizing committee alongside Olga and Marina from my Lviv train journey, Lenna Koszarny (Horizon Capital), Jaroslawa Z.
Making Ukraine Relevant
They say that more world leaders gathered at the Davos Forum this year than at the last G20 Summit. Unsurprisingly, many observers regard the Forum as the place where the political and economic agendas for the coming year are set. However, political heavyweights do not generally come to the Swiss Alps to talk to each other. For most, the priority is to engage with the business world. This suited us perfectly and gave us a chance to alter the optics surrounding Ukraine. Our task was straightforward if challenging – we had one week to move the debate around Ukraine away from the fruitless subjects of war and corruption by presenting the country from a fresher perspective as an attractive and innovative economic opportunity. With this in mind, we focused the Ukraine House agenda on hot business topics like blockchain technologies and crypto currencies. This was a strategic decision as both of these themes are major world trends where Ukraine already enjoys a growing reputation as a frontline nation. Just one week before the start of the 2018 World Economic forum, a Citibank study placed Ukraine among the world’s top five countries for bitcoin business development. Crucially, we did not ask for money. Instead, we invited investors to become partners in Ukrainian technology projects or to consider opening development centers in Ukraine. This partnership approach kept people coming back to Ukraine House throughout the week, including those looking for more substantive meetings to discuss the details of potential cooperation. During our event with Ukrainian President Petro Poroshenko, fellow panel member Sir Suma Chakrabarti, who serves as president of the European Bank of Reconstruction and Development, noted that Ukraine was among the bank’s top three priorities. This was encouraging, as was the interest we registered from Indian, Asian and Middle Eastern investors. Many were surprised to learn www.bunews.com.ua
that Ukraine had risen 75 places in the World Bank’s “Ease of Doing Business” ranking over the past five years and expressed an interest in visiting Ukraine in order to take a closer look at the opportunities for themselves. Our experience in Davos was eye-opening in many ways. It produce hundreds of potentially exciting business connections that could go on to prove significant for the development of the Ukrainian economy. Perhaps even more importantly, the reactions we encountered confirmed that it is possible to rebrand Ukraine as a nation defined in terms of creativity, innovation and opportunity. By bringing together many of the brightest minds and most original thinkers from Ukraine’s IT, investment and high tech industries, we were able to shift the debate away from the geopolitical grandstanding and post-Soviet stereotypes that have long obscured the exciting realities of independent Ukraine. The challenge now is to build on this progress. Work is already underway on what will be the fourth Ukraine Discovery tour, while the interest generated at Davos has convinced us of the need to organize a special tour to Ukraine focusing specifically on blockchain technologies and crypto currencies. Plans are also underway to host a conference for potential Asian investors on 12 October in Ukraine’s main Black Sea port city Odesa.
brand ukraine
Johnson (WNISEF) and Svitlana Grytsenko (Victor Pinchuk Foundation). Alexa Chopivskaya then joined us as director of Ukraine House. The whole team understood that our program had to appeal to a broad spectrum. By its very nature, Davos is a competition for the attention of world leaders. It is a battle for speakers, for knowledge, and for guests. In order to stay relevant and avoid becoming stuck in a narrow niche, we focused on a program covering the most interesting and contemporary topics in the tech world such as blockchain technology, crypto currencies, agrotech and energy, while also positioning Kyiv as a high tech hub. We eventually managed to gather speakers from 10 countries and invite about 5000 guests including global politicians, entrepreneurs, investors and journalists. During our time at Davos in 2017, we had taken a shine to the Timberland store with its transparent walls and handy location in the heart of the city, right on the main promenade. However, the premises had never been available for rent during the World Economic Forum before. Our contacts assured us it was simply not a possibility. By refusing to take no for an answer and mobilizing our own networks of contacts, we managed to secure the location as our Ukraine House site for the 2018 Forum. What we did not know at the time was that by positioning ourselves in this location, we would be establishing the inaugural Ukraine House directly opposite Russia House. Many naturally assumed this was a deliberate and somewhat confrontational step on Ukraine’s part. In reality, it came as a complete surprise. The previous year, Russia’s representation had been located some 70 meters further along the road. This close proximity could have been awkward, but it actually generated significant attention and allowed us to drum up additional media interest. In the first few days of the Forum, Ukraine House received coverage in the New York Times, Bloomberg and a host of other international media outlets. It also helped to draw in crowds of visitors.
Wanted: Strategic Vision
Our experience in Davos highlighted the need to communicate a broader strategic vision outlining Ukraine’s future direction. The Ukrainian government has not yet been able to come up with an economic roadmap that would indicate where the country is going, nor has it been able to give investors a clear idea of what they can expect from Ukraine in the medium to long term. This needs to change. Private sector initiatives like Ukraine House are effective communications tools, but they cannot attract the volumes of international investment that Ukraine requires and warrants. This will only prove possible when potential investors can count on a business climate corresponding to accepted international practice coupled with a coherent vision for the years ahead. Despite these strategic shortcomings at the governmental level, the Ukraine House initiative in Davos was able to create an important new platform for direct dialogue between the Ukrainian and international business communities. It demonstrated that through the combined efforts of various private sector stakeholders, it is possible to raise Ukraine’s profile and present an appealing picture of the country that is relevant to outside audiences. I now hope to continue this process by creating a Ukrainian Davos Club to help develop public relations efforts both domestically and on the world stage. This envisioned Davos Club can play an important role maintaining dialogue and momentum during the annual lull between one World Economic Forum and the next. In this way, the ethos of Ukraine House can continue to contribute to the wider process of changing international attitudes towards our country and building new global alliances. This year’s Ukraine House premiere at Davos was a landmark event, but it was only the beginning of a much longer journey.
About the author: Andrey Kolodyuk is chairman of the Ukrainian Venture Capital & Private Equity Association (UVCA) and a venture capital investor
55
New Baltic blockchain hub
banks on Ukrainian clients Ukraine’s IT strengths and weak governance issues make it ideal blockchain technology innovator People might be sick of hearing about the rise of virtual currencies and their potential for economic disruption, but the use of the blockchain technology that underpins them is gaining traction. Ukraine features pre-eminently for mining the world’s so-called crypto currencies as its much vaunted information technology (IT) industry contrives uses for this unique software to ultimately build trust between citizens and their governments, while providing tools that offer security to business relationships and protect the integrity of crucial documents. This Ukrainian enthusiasm for all things blockchain-related was evident at the opening of the Blockchain Centre Vilnius in Lithuania in early 2018. This Centre is positioning itself to serve as a knowledge hub for the emerging technology in Europe. Part of a larger eponymous network that spans Melbourne and Shanghai, it hopes to attract the interest of a significant Ukrainian contingent. While acknowledging Ukraine as both an integral IT outsourcing destination replete with “talent” and where there is an “ongoing problem of confidence in public institutions,” Paulius Kuncinas, chairman of Blockchain Centre Vilnius, told Business Ukraine magazine that he wants the Baltic country’s hub to be a place for Ukrainians to feel comfortable and help them do business. “This should be a place to meet partners and somewhere they could raise capital and network. This is their home outside of Kyiv, Dnipro, Kharikiv, Lviv and Odesa,” he said of Ukraine’s largest cities where existing IT industry communities flourish.
Game-Changing Technology
As the platform that drives virtual currencies such as Bitcoin, blockchain is a potential deal breaker and game-changer in both the public and private sectors. What exactly is blockchain technology? It is encrypted software often compared to either Lego blocks or pages in a book. It cannot
be easily hacked or manipulated. Its practitioners say it is “immutable,” to use their terminology, because of the sequential nature of their blocks. To tear out a “page,” for example, is impossible without somebody noticing the intrusion on a particular block’s “fingerprint”. Each “chain” has its unique content code and comes referenced to its predecessor and successor, making data changes difficult. The technology relies upon a peer-to-peer relationship. It differs from the traditional client-server model whereby an administrator manages data and can easily make changes to it. In other words, for a hacker to infiltrate a blockchain, they would have to re-write the whole system, a labour-intensive effort that even the most sophisticated of the current artificial intelligence augmentative systems cannot accomplish. This is why the Ukrainian government is using the technology to manage its registry of farmland with the help of technology from BitFury Group, a global technology firm that has an office in Kyiv. The announcement of this initiative came in April 2017. By September, Ukraine’s Justice Ministry had started using the platform to auction seized assets and begun transferring state property and land registries. In this particular case, the technology helped create a ledger of transactions – a chain of blocks – to permanently record and track assets or transactions. This is a potentially crucial upgrade in a country rife with institutional corruption and suffering from numerous examples of shady business partners illicitly taking over businesses by doctoring land or business ownership titles with the use of dishonest notaries and judges. “In Ukraine, people don’t trust the government and there are in certain cases valid reasons for this,” Gleb Paienko, software senior project manager for Bitfury in Ukraine, told Business Ukraine magazine. “We tell our government interlocutors that with blockchain you can’t change data or remove it, so that when a new government is in place, they’ll have preexisting records preserved.”
Ukrainians Leading Global Innovation
About the author: Mark Raczkiewycz is an American journalist based in Kyiv where he works as The Ukrainian Weekly’s incountry correspondent. He has contributed to Bloomberg, The Financial Times, The Associated Press and other international media publications.
56
Ukraine currently ranks among 14 global leaders in blockchain innovation, Ukrainian government advisor Kostantyn Yarmolenko told guests at the latest World Economic Forum in Davos. As home to Eastern Europe’s largest pool of programmers, Ukraine was specifically mentioned as a “network hotbed” in the Blockchain Research Institute’s report that its CEO and co-founder Don Tapscott also presented at Davos. Additionally, Ukraine helped contribute to the 45% of developers that helped launch “initial coin offerings (ICO)” in 2016 among former USSR republics, said Paienko of Bitfury. So far, the financial services sector uses the technology the most. The technology assists banks in areas of transparency, trade finance and as a payment system. Other commercial uses include securing provenance, patents and copyrights, said Kristof Van de Reck, Holland-based regional head of Europe and council member of the non-profit NEM.io Foundation. His foundation has developed the technology that a group of Australian farmers now use for tracking supply-chain logistics.
finance
The January 2018 launch of Blockchain Centre Vulnius is part of Lithuanian efforts to position itself as a global blockchain hub. Nearby Ukraine is also among the world’s leading blockchain innovator nations and a potentially key partner for the Baltic initiative Still, the technology “isn’t ready for prime time yet,” said European Central Bank financial coordinator Dirk Bullmann, because “there’s no level playing field. The technology is still looking for a catalyst.” Other potential uses include preserving or securing identification, licenses, certificates and voting, governance and “track and trace” of transactions or products,” added Van de Reck of NEM.io Foundation. Some want to use the technology to reverse the “expropriation of data” from consumers that financial and online social media companies have done, explained Swiss-based non-profit 20|30 & Pillar Project co-founder Tomer Sofinson. He wants to create a “single” virtual currency wallet controlled by the consumer and which data vendors, online or off, cannot access. This could allow customers to regain “control of their own information.” Because the technology is still at the trial-and-error stage, it is difficult discerning where the hype ends and where meaningful application begins, visionaries at the Vilnius event conceded. “It’s a ‘chicken or egg’ issue, really,” said Dr. Antif Ansar, program director at the Said Business School at Oxford University, who advised the government of Gibraltar on regulating the use of blockchain technology. The hype certainly drives interest in the technology. Just by mentioning that it will start using blockchain, “a company can raise its share price,” quipped Layla Dong, who flew to Vilnius direct from the World Economic Forum in Davos where she had been part of the Global Shapers Community. It also encourages charlatans and helps to fuel the proliferation of business scammers that launch ICOs without even www.bunews.com.ua
using blockchain. To help prevent fraud, hubs around the world like the one that opened in Vilnius in January serve to educate and connect stakeholders, explained Davidson of Melbourne’s blockchain centre. “It is highly unlikely that anyone who comes to the Blockchain Centre here in Vilnius or in Melbourne for any period of time is going to invest in a scam,” he said. “Our physical location is a conduit for all members of society to come together such as European central bankers, cryptographers, new startup businesses, legislators, and regulators. This (Vilnius hub) is going to be the right environment for people to look at this technology sensibly and create ideas.” In order for this exciting technology to blossom, firm foundations and sustainability are essential. The alternative could be another dot.com bubble, said Dr. Ansar of Oxford University. As one of the pioneer countries that are already putting early-stage blockchain technology to use, Ukraine in a good position to lead the global community when it comes to practical implementation, said Kuncinas in Vilnius. “The people of Ukraine deserve better. In that sense, blockchain could be a revolutionary tool for Ukraine,” he said. “It could have a huge impact in terms of overcoming trust issues.” According to Kuncinas, the resulting economic benefits could help to shape the country’s broader development. “Ukraine has a similar problem as Lithuania. It is slowly depopulating. The only way that countries can solve the problem of brain drain and emigration is by creating these kinds of jobs.” 57
The investment case for redeveloping Kyiv’s historical buildings as housing Can renovation of historic buildings ease the Ukrainian capital’s shortage of quality rentals? The Kyiv real estate market suffers from a striking undersupply of modern downtown residential housing. It is a well-known fact that there is currently a severe lack of multi-bedroom apartments with Western-style renovations for lease in the very center of Kyiv. Elderly people without the financial means to refurbish their property occupy many of Kyiv’s historic city center apartments. Other typical downtown residents including people who acquired apartments in prime locations more than a decade ago but are now unwilling or unable to invest in order to update the interiors or the engineering infrastructure. New residential construction projects are unlikely to fill the gap. A lack of suitable downtown land plots means that newly developed residential buildings with apartments that meet expat standards are in short supply and will remain so. The few that do exist tend to belong to wealthy local owners who use them as residences or expect unreasonably high rental rates. Meanwhile, central Kyiv has scores of derelict historical buildings in prime locations that could be excellent candidates for redevelopment as premium housing. This article explores the investment case for redeveloping Kyiv’s historical buildings to overcome the city’s residential housing shortage, and discusses market demand, potential yields, redevelopment strategies, and legal issues that potential buyers should bear in mind.
Kyiv’s Expat Housing Deficit
In Kyiv, plenty of landlords were spoiled by the good times of the pre-2008 financial crisis and, to a lesser extent, the pre-Maidan period. Lingering memories of these more profitable times mean that many still refuse to update their price expectations to present-day realities. Landlords who are already depressed by what they see as low prices are generally reluctant to take on additional expenses to make their properties compliant with embassy housing requirements. Diplomats are among the most sought-after tenants for expat-friendly premium housing, but many embassies have strict and lengthy housing requirements for safety and security covering everything from electrical load capacity and grounding to elaborate requirements for entrance doors and locks. This impasse helps to aggravate the expat housing supply deficit while pushing up prices further, leaving potential tenants exasperated and wondering why rents should be comparatively higher than in other Central and Eastern European capitals. With the Ukrainian economy in the early stages of a steady if unspectacular growth period, the problems associated with the current housing shortages look set to become more acute if more premium rental housing does not appear online downtown quickly.
Wanted: Premium Rental Options Unlike much of the world, Kyiv has comparatively little purpose-built rental housing, while virtually nothing like this exists for the premium segment in particular. In Ukraine, it is simply not prestigious to live in rental housing. Local developers are generally interested in the potentially higher returns offered by apartment sales and often do not want to trouble themselves with renovating, furnishing, and managing apartments. Why bother with all these details when you can sell an unrenovated “shell and core” property with decent margins? Besides, many Ukrainian developers tend to lack the experience and expertise to develop and manage premium rental housing to meet the needs of premium expat clients. Thus far, few shown the ability to conduct even rudimentary market research to create a housing concept that meets a clear market need for any segment. A farsighted international investor with redevelopment experience could potentially fill this gap in the market with a housing product tailored to the needs of expat tenants. For example, an entire building could be redeveloped taking into account all of the safety and security requirements of embassies together with foreign tenant preferences for design and functionality. What about investment yields? Today in Kyiv, savvy buyers have been able to achieve 10-12% gross yields on apartments in older buildings in the prime rental districts. Similar yields are certainly achievable for investors who buy and renovate the right building in the right location.
Legal Status and Escrow Options
Foreign investors who are considering buying an historical building in Kyiv face a number of key legal issues. In Ukraine, you can structure your acquisition as either an asset or a share deal. In a share deal, it is important to analyze and structure the legal and corporate presence of a buyer, taking into account investment protection and profit repatriation considerations. Debt or equity financing of acquisitions are both options, and each has a particular impact on cash flow and taxation. A foreign entity without permanent establishment or a foreign individual who owns a building in Ukraine should register with the tax office through an agent who will pay real estate property tax. Lease payments paid by a Ukrainian resident lessee to a foreign entity or individual are subject to withholding tax at a rate of 15%, unless a relevant double tax treaty provides for either lower tax rate or tax relief. For some deals, antimonopoly clearance might be necessary where parties to a deal have turnovers exceeding established financial thresholds. This is particularly relevant for share deals where a buyer acquires a controlling stake in a project company. In an asset deal, antimonopoly clearance is less frequently obtained, particularly where an operating business and an underlying property are bought forming a so-called “integral property
About the author: Tim Louzonis (tim@aimrealtykiev.com) is a co-founder of AIM Realty Kiev, a real estate agency that specializes in real estate for foreign investors and expats. Tim is a long-time expat with Ukrainian roots; he first came to Ukraine as an exchange student in 1993 and returned in 2008.
58
real estate
complex”. Some leases associated with a change of control can also call for antimonopoly clearance. Recently introduced in Ukraine, escrow bank accounts can help mitigate risks during the acquisition of a building. Thus far, this tool has mainly featured in large capital projects, but it is also suitable for the acquisition of smaller assets such as buildings or apartments if the parties are prepared to incur the related costs.
Historic Buildings Have Histories
Since Ukraine’s online public register of real estate has only been operating since 2013, thorough due diligence is obligatory. This includes investigating the history behind the target property and previous transfers of title, as well as an assessment of any ongoing disputes that might prevent a sale or affect the title of any new owner. Many derelict buildings in Kyiv have ongoing disputes that would need to be resolved. The general statute of limitations in Ukraine is three years, but this does not provide any absolute guarantees against third-party claims against a new owner. In certain instances, the courts can renew the statute of limitations. Prospective buyers should also check the title to the land plot underlying the target asset and identify whether it provides for ownership, lease or permanent use. The cadastral number of an underlying land plot should feature in any sale and purchase agreement for a building or premises. However, this does not entail the automatic transfer of title to the land, and the buyer of a building needs to acquire and register rights to this land plot, if possible. This is because separate title documents each certify rights to a plot of land or building, and the procedures for each may differ. Renovation or reconstruction works performed without proper permits, or otherwise illegally, can affect or prevent a deal, even where both parties are interested in completion. Any buyer should check the technical passport for a property and ensure it includes updates to reflect renovations. It is notoriously difficult to sell real estate involving illegal renovation work. A court ruling may prove necessary before the buyer and seller can proceed with the deal. Whether a particular renovation requires any permits and changes www.bunews.com.ua
to the property’s technical passport and title document requires assessment on a case-by-case basis. This depends on the nature and scope of the works as well as the effect on a building. When buying historical real estate in Ukraine, you should check documentation for compliance with the specified usage. This applies to urban development plans and limitations, zoning plans, and other city planning documentation as well. Such information is not always systematized and publicly available online, meaning that you may need to check with the local authorities. When buying an older building in Kyiv it is especially important to check whether the target property enjoys classification as a monument of architecture. Cultural heritage sites have a special legal status that aims to protect and enhance their integrity. Various restrictions and requirements can have implications for everything from the transfer of ownership to proposed future renovation of the property. It may be necessary to enter into special “protection” contracts with the relevant state authorities that manage the protection of the city’s cultural heritage.
An Exciting but Challenging Segment
As the saying goes, “if it were easy, everyone would do it”. This certainly applies when it comes to buying and redeveloping derelict historical buildings as premium housing in Kyiv’s city center. Nevertheless, market demand and potential investment yields are hugely enticing. It is clearly not an easy prospect, but bold international investors teamed with experienced real estate and legal advisors could achieve considerable returns if they take up this challenge. As the Kyiv premium market grows increasingly crowded, it is certainly one of the most exciting segments of the residential segment to watch. Special thanks to attorneys Svitlana Teush and Robert Shantz with Redcliffe Partners for their contributions to this article. Please note that this is article not intended to replace qualified legal advice. You should also bear in mind that your specific circumstances may differ from the assumptions used here.
59
60
media
The Editor vs
The Oligarchs Vitaly Sych first made his name as the long-serving editor of Ukraine’s top current affairs weekly, but he cemented his reputation by resigning rather than bowing to Yanukovych era censorship. He is now back at the helm of a new journalistic empire that aims to challenge the media monopoly of Ukraine’s oligarch elite “We don’t feel under any pressure from the government,” says Vitaly Sych, the chief editor of Ukraine’s most ambitious and editorially independent media holding. “Sometimes we have a dialogue with the authorities, but that is healthy. We recently published a lead article that was highly critical of Prosecutor General Yuriy Lutsenko. He contacted me personally and we met for a long discussion about his work and his background. I do not see anything wrong in that. He didn’t send men in balaclavas after me.” Forty-two year old Sych speaks with authority when it comes to the considerable potential for rough and tumble in the Ukrainian media industry. He first cut his teeth in the late 1990s as a reporter at the English-language Kyiv Post newspaper before rising to national prominence as chief editor of Russian-language weekly Korrespondent magazine. Sych spent over a decade running Korrespondent, gaining a reputation as one of the most influential and innovative media managers in the country. All that changed overnight in summer 2013 when members of President Yanukovych’s inner circle sought to censor him by purchasing the publication. Faced with the prospect of becoming muzzled, he resigned. Since 2014, Sych has headed up the Novoye Vremya (literally “New Time”) holding, a new and rapidly expanding post-Maidan multimedia platform backed by Ukraine’s leading investment bank, Dragon Capital. Novoye Vremya makes no secret of the fact that it aims to set the standard for professional journalism in the country, while also serving as a flagship for the values that drove Ukraine’s Revolution of Dignity.
Maintaining the Maidan Momentum
Sych has spent the first few months of 2018 somewhat preoccupied with preparations for the launch of a nationwide talk radio station. This new radio station is the latest addition to his growing empire, joining Novoye Vremya’s existing portfolio that consists of a weekly Russian-language current affairs magazine and bilingual news webwww.bunews.com.ua
site. This expansion into radio is part of a conscious effort to chip away at the dominant position enjoyed by the handful of oligarchs who control the lion’s share of Ukraine’s media market. The Novoye Vremya project is very much a child of Maidan. Conceived during the revolution at a time when Kyiv was in flames, the first edition of the print publication hit the streets in late spring 2014 as Russian hybrid forces were overrunning towns and cities across eastern Ukraine. The debut cover page of the magazine featured a machine-gun toting Vladimir Putin in full combat gear with Ukraine’s fugitive ex-president Viktor Yanukovych in street thug attire crouching by his feet. This baptism of fire set the tone for four years of no holds barred current affairs coverage that has left nobody on Ukraine’s political Parthenon unscathed.
Investment Bank Backing
All this is possible thanks to the financial backing of Dragon Capital, a Kyiv-based international investment bank headed by Czech national Tomas Fiala. Dragon Capital is the sole owner and investor in the Novoye Vremya media holding, providing the project with the kind of ownership clarity that is sometimes lacking in the Ukrainian media industry. Virtually all of Ukraine’s leading mainstream media outlets are associated with individual oligarchs, while second-tier platforms are frequently characterized by opaque ownership structures and hidden agendas. There is no such mystery surrounding Dragon Capital’s decision to enter the media industry. As Sych points out, few stakeholders stand to benefit more from the strengthening of Ukraine’s independent media than the country’s most prominent investment bank.
Hipster Vibe
Despite approaching its fourth anniversary, the Novoye Vremya project retains the dynamic air of a startup. The media holding’s offices are located in a converted former administrative building 61
nestled among the factories and plants that clutter the Kyiv riverside horizon as picturesque Podil gives way to the significantly less glamorous rust belt of the Ukrainian capital. In a neighborhood full of smoke stacks and nondescript Soviet facades, the Novoye Vremya HQ is a pocket of unlikely hipster cool signposted by the Banksystyle street art decorating the building’s courtyard entrance. Sych’s no-frills second floor office is almost completely devoid of decor. The sole personal touch is a large map of Ukraine covered in pins, with each pin indicating one of the forty cities where his new talk radio station broadcasts. The nationwide launch of the station was possible thanks to the acquisition of Ukraine’s oldest talk radio station, Radio Era, by Dragon Capital in late 2017. Sych explains that the purchase was purely to secure the existing station’s frequencies, a process that could have otherwise taken years to conclude. Other than that, the rebranded Radio NV will have nothing in common editorially with its predecessor. Instead, it promises to bring the same journalistic values espoused by its sibling print and online platforms to the Ukrainian airwaves. The media group’s relative independence led to some revealing interviews as Sych sought to recruit the Radio NV team. ““Editorially, we are open to all points of view, but this is something that even experienced Ukrainian journalists can sometimes find hard to grasp. Numerous candidates asked me who would be on our blacklist, while others assumed we would pursue our own political agenda. The culture of paid political content is everywhere in the Ukrainian media but it is not something we can afford to engage in. If we did, our audience would notice immediately and our reputation would suffer accordingly.”
Reputation Enhanced by Resignation
Sych’s reputation for ethical journalism is rooted in long years of credible current affairs coverage, but one incident in particular stands out. Back in 2013, he walked away from his high-profile role at Korrespondent magazine following its purchase by Yanukovychlinked oligarch Serhiy Kurchenko. Despite offers of a major payday and veiled threats about difficulties finding alternative employment, Sych refused to continue under the new owners and left the post he had held for more than a decade. His departure was widely interpreted as evidence of the rapidly deteriorating media climate under President Yanukovych. Sych’s
prospects at the time looked bleak, but events would soon overtake the government and throw Ukraine’s political arena into turmoil. Within weeks of Sych’s resignation, Ukraine witnessed the start of the protest movement that would eventually become the Revolution of Dignity. Although nobody realised at the time, Yanukovych’s days were numbered. The demise of the Yanukovych regime paved the way for the emergence of the Novoye Vremya project. It also allowed Sych to begin the process of rehiring the Korrespondent staff members who had resigned alongside him. Looking back at the situation he found himself in during the twilight of the Yanukovych era, Sych now sees the incident as indicative of the corrupted thinking that underpinned the ousted regime. “They seemed genuinely shocked that I could reject their offer. Their first reaction was to propose more money, but some things are simply out of the question, regardless of the price. It seemed strange to me that they thought they could buy a publication with a reputation based on quality journalism and impose a more or less criminal agenda without any repercussions for the magazine’s reputation. That was their mentality. Everything could be bought.”
Oligarch Influence Hampers Media Market
Sych says the decision to enter the radio segment of the Ukrainian media market reflects the practicalities of an industry that is largely immune to standard economic logic. Ukraine’s 2004 Orange Revolution marked the end of direct Kremlin-style government control over Ukraine’s national media agenda, but the country’s biggest TV channels remain the property of oligarchs who manage them as “loss leaders” and personal tools of influence within their broader business empires. The result is a dysfunctional media market where the biggest brands routinely operate in the red and sell advertising space at dumping rates, thereby eroding the economic argument for honest competition and restricting membership of the mainstream media owners club to likeminded billionaires ready to pay for the privilege. “The TV market is too expensive to enter and is simply not profitable,” explains Sych. “All the major oligarchs lose huge money on their TV stations, so we decided to opt for the talk radio format instead.” Sych’s strategy involves expanding his audience reach both geographically and demographically. Radio NV should allow him to en-
Ukraine’s 2004 Orange Revolution marked the end of direct Kremlin-style government control over Ukraine’s national media agenda, but the country’s biggest TV channels remain the property of oligarchs who manage them as “loss leaders” and personal tools of influence
62
media
About the interviewee: Vitaly Sych is Chief Editor of Novoye Vremya media holding gage with entirely new audiences across Ukraine. His weekly print magazine is already widely read by many of Ukraine’s top politicians and business leaders, while the Novoye Vremya site has firmly established itself among Ukraine’s top ten online news resources. Radio now offers access to a completely different demographic dominated by middle-aged male car drivers. Sych sees considerable scope for synergy between the print, online and radio platforms of the Novoye Vremya stable, with the promise of increased exposure helping to improve access to the country’s powerbrokers. He hopes it will give the media holding considerably more clout when it comes to approaching big name studio guests and potential commercial partners alike. Looking ahead, this commercial component is central to the sustainability of the Novoye Vremya presence on the Ukrainian media market. Despite all the crusading talk of promoting ethical journalism and the long-term vision espoused by the media holding’s investment banker owners, the project ultimately needs to become financially self-sufficient. Sych says the post-2014 crash has set back plans to break even by several years, but believes this remains a realistic objective. Much may depend on his ability to diversify in order to monetize the Novoye Vremya brand. Over the coming twelve months, Sych expects to branch out into the sphere of brandwww.bunews.com.ua
ed events with prestige sponsors. Such spinoffs could eventually account for a significant slice of the media holding’s revenues.
Moving Ukraine Forward
If he succeeds in building a profitable media empire without compromising his professional ethics, Sych could find himself serving as pathfinder for a whole new generation of Ukrainian journalists. It is a role he is acutely conscious of, having recently begun lecturing undergraduates in Kharkiv as part of a new training initiative. “They are simply amazed that it is possible to practice honest journalism in Ukraine,” he reflects. This lack of faith in the media industry is symptomatic of broader public skepticism across Ukraine towards an outwardly democratic system of government that remains dominated by the narrow business interests of competing clans. Ukraine’s media industry may no longer be subject to the kind of state censorship common in Russia and other former Soviet republics, but it is widely perceived as a core component of an oligarchic system that continues to prevent Ukraine from progressing. “We want to move the country forward,” Sych says of his media endeavors. “This means promoting the principles the Western world has long since adopted and the values that helped the countries of Central Europe succeed. Our goal is to help introduce them to Ukraine.” 63
Assistanspoolen Prelaunch Gala at National Opera House Swedish company Assistanspoolen signaled its arrival on the Ukrainian market in early 2018 with a gala reception at Kyiv’s National Opera House. The Swedish company has an ambitious and innovative agenda in Ukraine that anticipates the launch of an expanding range of services over the coming months, with the goal of creating a platform for the company’s core activity: the provision of empowering care and support for the disabled.
64
The company’s business model in Ukraine envisages the launch of services including home and office cleaning along with preschool and nanny services that will then help to finance the provision of comprehensive care for disabled Ukrainians. The Assistanspoolen team welcomed guests and partners to their introductory event at the National Opera House, with company co-founder Carina Ryder receiving a special honor from Opera House officials in recognition of her work in Ukraine.
networking events
www.bunews.com.ua
65
Business Networking at Buddha Bar Kyiv International networking group for professionals Fryday Kyiv introduced a new feature in February to its regular Friday evening events. From now on, Fryday Kyiv events will feature a special guest who will mingle with attendees throughout the evening. The special guest at the 16 February event at Buddha Bar Kyiv was Sean Keilty of Assistanspoolen, a Swedish company entering the Ukrainian market in 2018.
66
networking events
Raiffeisen Bank Aval Takes Top Spot at Ukrainian Banking Sector Awards Many of Ukraine’s leading financial sector executives gathered at Kyiv’s Premier Palace Hotel at the start of the year for the annual banking sector awards co-organized by Financial Club and Yuridicheskaya Practika. The 2018 award for Most Profitable Bank went to Raiffeisen Bank Aval, while other winners included UkrGazBank and Oschadbank. The awards ceremony took place within the framework of the annual Legal Banking Forum, which addressed a wide range of topics related to the Ukrainian sector and relations with the National Bank of Ukraine. Ukraine’s banking sector continues to go through the most dynamic reform period since independence in 1991.
www.bunews.com.ua
67
New Networking Community Launches in Kyiv February saw the launch of The Big Meet, Kyiv’s freshest new community event. The people behind The Big Meet say the goal of the organisation is simple: to gather business professionals, expats and diplomats together to network, explore interesting venues and, most importantly, to have some fun
68
at the end of the working week. The pre-launch event took place at popular Kyiv restaurant Barvy. The next community event will take place on 16 March at Marriott International’s new ‘Aloft Kiev’ hotel. For more information and news of upcoming events, search for BigMeetUkraine on Facebook.
networking events
1918-2018: Celebrating the Centenary of Estonian Independence in Ukraine Politicians, diplomats and representatives of Ukraine’s international community gathered at the National Philharmonic Hall in Kyiv in late February for a gala concert dedicated to the one hundredth anniversary of the Republic of Estonia. The concert, entitled “Estonian Sounds”, included a number of musical compositions by Estonian composers illustrating a range of different historical periods. The concert was the result of collaboration between famous Estonian conductor Erki Pehk and the Ukrainian National Chamber Ensemble “Kyiv Soloists”. It featured soloists Monika Mattiesen (flute) and Indrek Leivategija (violoncello). A reception hosted by Ambassador Gert Antsu and Mrs Jana Antsu followed the concert. In common with Baltic neighbors Lithuania and Latvia, Estonia was part of the Tsarist Russian Empire before declaring independence 100 years ago amid the chaos of the Bolshevik Revolution. This initial period of independence ended when Soviet forces invaded Estonia in 1940 in line with the Molotov-Ribbentrop Pact between the Soviet Union and Nazi Germany. The Soviet occupation continued following WWII. Estonia regained independence from the USSR in August 1991 and joined the European Union and NATO in 2004. Today it is a global leader in the field of e-governance and boasts some of the highest standards of living in the former Soviet Union. www.bunews.com.ua
69
society
Occupied Crimea becoming human rights black hole Lack of international access makes it difficult to keep track of Russian abuses in occupied Crimea
About the interviewee: Madeline Roache is a British journalist specializing in human rights issues in post-Soviet Russia. Her work has appeared in the Guardian, Newsweek, Al Jazeera and a range of other international media. As the world marks the fourth anniversary of Vladimir Putin’s Crimean invasion, the Ukrainian peninsula is fast becoming a human rights black hole. International aid agencies are unable to keep track of widespread abuses, while international journalists attempting to shed light on the realities of life under Russian occupation are also encountering mounting difficulties. British journalist Madeline Roache found this out for herself when a February 2018 visit to Crimea ended in detention and expulsion from the peninsula. She spoke to Business Ukraine magazine about the implications of the informational iron curtain that threatens to isolate occupied Crimea from the outside world.
What first drew you to the theme of human rights abuses in Crimea? I became interested in post-Soviet human rights issues during my Masters in Russian and post-Soviet politics at University College London. For my final thesis, I researched the resumption of Soviet-era punitive psychiatry in Putin’s Russia. In March 2017, I discovered that this form of political repression had resurfaced in Crimea. As a journalist, I am interested in different forms of political repression and the lives of ordinary people in post-conflict zones. During visits to Crimea, I met with the families of the Crimean Tatar political prisoners. I wanted to learn about the public and personal challenges they face, including what it’s like for them to live in Crimea knowing they are constantly being monitored, or the impact on children unable to see their fathers. Over 100 Crimean Tatar children are now without their fathers due to Russian imprisonment. In my opinion, we have only recently begun to see what the Russian occupation of Crimea looks like in terms of its social, political and cultural consequences. Since 2014, the human rights situation has severely deteriorated. Abductions, imprisonments and murders are systematically being committed against journalists, activists and, particularly, the Crimean Tatar community. Restrictive Russian media laws have eliminated independent sources of information and crushed freedom of expression. This appears to be the unfolding reality of the Russian occupation in today’s Crimea. I believe coverage of this is just as important as reporting from active warzones. 70
Did you feel physically threatened or merely bureaucratically inconvenienced during your recent encounters with the Russian authorities in Crimea? The experience had the effect of intimidation more than anything. The officers made it seem as though I was under observation whilst in Crimea. During a standard immigration check, they asked about my journalistic work and political interest in the region. The officers said they knew I had used the word “annexation” in my conversations with local people and told me, “We do not like this word. It is not correct.” Whether they really overheard my conversations with local people or just pulled the language from one of my articles, the message they communicated was the same: we are watching people who are critical of the government. I am aware of the treatment Ukrainian and Russian journalists sometimes encounter during detention, so in that respect I consider myself lucky. I got off extremely lightly. It was an intimidation tactic to deter me from writing about human rights violations. It is just one example of the many ways in which the authorities are crushing free speech in Crimea. Did you receive any warnings from your Crimean contacts that you might encounter such problems? I did not receive any specific warnings but they did tell me that Crimea is not safe. Contacts advised me to “keep my head down” and not draw attention to myself as a foreigner. They also emphasized that I should not post anything on social media about my presence in Crimea and I should turn off all location services on my phone and computer.
The charges brought against you in Crimea suggest that you were under surveillance and imply that the people you spoke to also faced questioning. What do such practices mean for future media coverage of Crimea? I think the sense of surveillance certainly could deter international journalists from reporting on the ground in Crimea. However, as far as I am aware, very few foreign journalists have visited Crimea recently anyway. There are so many people in Crimea willing to speak with journalists about how their life has changed under Russia. I really hope news agencies will encourage and support their reporters to work in Crimea in any way they can. In the absence of on-the-ground reporting, I think social media can be a very powerful tool for international journalists to learn about what is happening and to contact people in the region who want to get their message out.
In an environment of deteriorating media freedom, how can the outside world hope to keep informed about the realities of life in Russianoccupied Crimea? I think they can keep informed by following the news coverage produced by local Ukrainian news outlets who are keeping a close eye on Crimea, and by reading updates from local NGOs and civil society groups like Crimean Solidarity. There are many Crimean activists working hard to have their voices heard over social media. Their posts and videos have been an invaluable source of information for journalists. Luckily, language is no longer an obstacle since Facebook now automatically translates posts.
opinion
Ukrainians must address the nation’s collective post-traumatic stress disorder
Australian Pete Shmigel: suppressed historical traumas continue to haunt Ukrainian society
My recent voluntary assignment here in Ukraine has been to help form a national telephone hotline to support people in emotional crisis and at risk of suicidal behaviour. When discussing with local experts who this hotline should serve, I am inclined to say, “Everyone.” Just as individuals are subject to mental illness and emotional crisis, so too are organisations, businesses and entire nations. When enough members of a nation go through a common set of stressors, it is more than likely they will respond in some common ways. Ukraine, in my view, is suffering from post-traumatic stress disorder (PTSD). While some of its citizens – returned soldiers, internally displaced people and those who witnessed violent events on the Maidan – may be more susceptible, it is probable that because of their common trauma experiences, millions of Ukrainians have some level of PTSD even if they do not realise it themselves. What are these traumas and what is the evidence of their impact? With regard to trauma, there are both historical and contemporary examples. Ukraine lost millions in an early 1930s artificial famine designed by the Soviet authorities to crush its national spirit, and yet the country is still in the process of truly recognising this fact. During World War II, Ukraine lost millions more, but then largely focused on celebrating the defeat of Nazism rather than the war’s horrific human toll. During the Soviet era, people felt forced into compartmentalisation and suppressing the most significant parts of their lives as their human rights were systematically denied. A moral code based on “survival of the fittest” took hold and still permeates some circles today. Across the post-independence era, Ukrainians have experienced the “obvious” pain of the war in the east and the deaths on the Maidan. Millions of Ukrainians also feel a particular personal pinch at the everyday injustices they face. The word “corruption” as used by many Ukrainians, whether it is in business or general conversation, seems to have taken on a broader meaning that signifies a general dissatisfaction with so much of what life is dishing up.
For all their stoicism, their extraordinary capacity to laugh or sing away so many problems, and the very productive roles that family, enterprise and church continue to play in this country, Ukrainians nevertheless need to admit that impactful events inevitably have an impact. These impacts take the form of PTSD symptoms including heightened anxiety, strong irritability, angry outbursts, lack of concentration and patience, low levels of empathy, sleeplessness, avoidance and flashbacks. It is little wonder many Ukrainians have a hard time feeling hopeful or optimistic about the future. It is no surprise that migration rates are as high as they are. A key feature of PTSD is a reduced capacity to assess the risk of situations appropriately. Risks are typically either underestimated or overestimated because the PTSD brain, at both the individual and national levels, does not function with the necessary clarity. Two examples spring to mind. It took Ukraine four years to acknowledge that it was at war with Russia even as 10,000 people died. Meanwhile, people tend to view every protest or demonstration, whether it involves 100 people or 100,000 people, as a failure of the state. This poor judgement, often expressed in the form of intense cynicism, is regularly exploited by Ukraine’s very real and non-imaginary enemy. Putin expertly pokes a stick into Ukraine’s open wounds. When traumatic impacts are not acknowledged and their PTSD symptoms are not actively addressed, or indeed, when they are largely denied, they leak to the surface as different forms of a toxic emotional sludge. Very sadly, Ukraine has among the highest rates in Europe for suicide, alcoholism, drug addiction and domestic violence. These are all perverse forms of self-medication against PTSD through either self-inflicted or lateral violence. To the PTSD sufferer, they represent a logical way out, a way to numbness, or a way to relieve suffering through extra adrenalin and cortisol. Like many mental health conditions, PTSD is not easily cured, but we do know that it can be managed and that people (and organisations, businesses and nations) with PTSD can make great contributions. If nothing else, they become wiser for their tough experience, but it takes time, rest, structured intervention and healing. Central to recovery is accepting that there is an issue and actively choosing a positive management plan. Without the selfawareness of this first step, it is very hard to go further. Denial is a literal killer. There is much discussion of Ukraine’s demographic problems. But fixing a problem, as Einstein masterfully argued, requires a very accurate definition of the problem. Ukraine’s leaders and decision makers need to deal not with the symptom of people leaving, but with the deeper emotional causes: there is little healing and acceptance in place to keep people in Ukraine. This is an amazing nation. It has an enviable culture and capacity for survival but Ukraine’s future should not remain the slave of past and present pain. In order to flourish, reform is not enough. Ukraine must choose to heal actively and assertively. That responsibility lies not only with its current leadership, but in the daily choices each of us makes on the streets of Kyiv, Konotop, Kryviy Rih and all Ukraine’s cities and villages. Ukrainians need to forgive themselves, to forgive others and to forge ahead positively.
About the author: Pete Shmigel is the former CEO of Lifeline Australia, a suicide prevention service. A frequent visitor to Ukraine, Shmigel is currently a guest of the Ministry of Health helping in the development of crisis support services in Ukraine.
72
Four years on: undeniable post-Maidan progress cannot mask growing sense of disillusionment As the dust first began to settle after the Revolution of Dignity in spring 2014, there was a sense that Ukraine was entering into a period of inevitable and fundamental change. Unlike the largely peaceful 2004 Orange Revolution, the events of winter 2013-14 had witnessed the deaths of over one hundred Ukrainians. Things simply could not continue as they had before. Ukrainian society certainly appeared ready to embrace a consciously European post-revolutionary identity. The presidential election of May 2014 saw proEuropean candidates dominate, while the virtual clean sweep achieved by pro-European parties in the parliamentary elections later that year completed the picture of a nation that had decisively turned westwards. The international situation was equally encouraging, with a broad coalition of G7 nations uniting behind Ukraine as it resisted Russian aggression and ready to support the country in its historic transformation. Four years on, Ukraine has reason to point with pride to a number of groundbreaking achievements. However, it is also clear that most of the revolution’s principle objectives remain unfulfilled. This unsatisfactory return on the enormous sacrifices made by Ukrainian society has taken its toll on the nation’s mood. Ukraine enters the fifth year of the post-Maidan era with the public showing signs of extreme fatigue and disillusionment. With attention now turning towards a new cycle of Ukrainian presidential and parliamentary elections, international support for the reform process will remain crucial over the coming twelve months, while civil society also has a vital role to play in maintaining Ukraine’s stuttering Maidan momentum. To paraphrase the opening line of the Ukrainian national anthem, Ukraine’s revolution is not dead yet – but it is in need of round-the-clock care.
Fruits of the Revolution
Despite the current emphasis on missed opportunities, it is important to stress that Ukraine has made unprecedented progress since 2014 on a wide range of fronts. The country has begun building an effective anti-corruption infrastructure, with the National Anti-Corruption Bureau leading the way. It has introduced one of the world’s most advanced e-declaration systems to monitor the assets of public officials. The Prozorro e-procurement system has led to large-scale budget savings and won international recognition. Decentralization policies have empowered local communities and radically improved regional budgets. Healthcare reform has shaken up one of the country’s most notoriously corrupt sectors. Dramatic transformations have taken place in the banking sector, where around half of Ukraine’s pre-2014 troubled banks have been shut down. Elsewhere, Ukraine’s energy sector giant Naftogaz has become a model for the country’s state-owned companies. Once kept afloat by state subsidies that amounted to over 6% of Ukraine’s GDP, Naftogaz is now profitable. The company has won a series of legal battles against Gazprom and has helped Ukraine wean itself off dependence on Russian gas supplies. The biggest single change for ordinary Ukrainians has been the introduction of visa-free EU travel as part of the broader EU-Ukraine Association Agreement. Recent data suggests that the free trade component of the agreement is also now producing results, with Ukrainian exports to the EU finally climbing above pre-Maidan levels. The Revolution of Dignity has also served as a catalyst for
opinion
Revolution of Dignity struggles to deliver on big promises the consolidation of Ukrainian civil society. This ongoing phenomenon has seen non-government organizations gain in confidence and influence across the country while serving as key drivers of the reform agenda.
Falling Short
While Ukraine’s post-revolutionary achievements demand recognition, they have not succeeded in taking the country beyond the point of no return. Civil society activists are facing increasing government attacks. Corruption remains largely unconquered, which makes the creation of an Anti-Corruption Court in line with Venice Commission recommendations arguably the number one reform priority for 2018. Broader wholesale reform of the judiciary is also essential if Ukraine is to attract international investment. Other economic goals include privatizing Ukraine’s vast portfolio of inefficient state-owned companies. Reformers are still waiting for the government to meet its commitment to establish a Financial Investigation Service, while international partners continue to call for a competitive land market. Crucially for a country engaged in a de facto war with Russia, Ukraine must also prioritize reform of the defense sector. This means improving the governance of state-owned defense sector companies, eliminating unnecessary secrecy, and demonstrating the political will to reduce corruption in the defense procurement sphere.
Ukraine’s Brain Drain Pain
Ukraine has undergone a series of traumatic shocks since 2014, with the Revolution of Dignity followed rapidly by Russian military aggression in Crimea and the east of the country. This has complicated the reform process considerably and added to the sense of emotional overload felt throughout Ukrainian society. Nevertheless, increasingly few Ukrainians now appear prepared to accept the conflict with Russia as an excuse for the failure to follow through on reforms. On the contrary, there is a widespread sense that rentseeking elites are guilty of artificially stalling the reform process. Patience is clearly wearing thin. Polls show that a majority of Ukrainians are no longer ready to tolerate financial difficulties for the sake of reforms. Millions are now voting with their feet and seeking greater levels of security and higher standards of living abroad. An estimated 1.5 million Ukrainians have moved to Poland alone since 2014. This brain drain includes many in the professional classes who have grown tired of waiting for the emergence of a new Ukraine. With elections on the horizon, many expect 2018 to be a year of populist politics. In view of this, the top priorities for Ukrainian civil society and the country’s international partners should be guarding Ukraine’s post-Maidan achievements and keeping strategic reforms high on the political agenda. Ukraine has made considerable progress since 2014 but it has missed a number of historic opportunities. The country cannot afford to backslide further.
About the author: Olena Prokopenko is Head of International Relations at Reanimation Package of Reforms, Ukraine’s largest civil society coalition uniting 83 NGOs and over 300 experts www.bunews.com.ua
73
in focus: agriculture
Ukraine becomes fourth largest food exporter to EU
Ukraine is now the fourth largest food exporter to the European Union following an impressive year-on-year increase in export volumes in 2017 confirmed by European Commission figures released in late February. Ukrainian agrifood imports into the EU rose 34% last year to reach EUR 5.5 billion, making the country the biggest annual gainer and 6% ahead of fellow growth leader Indonesia. The increase will come as welcome news to Ukrainian exporters and an indication that the free trade component of the Ukraine-EU Association Agreement is producing results following full implementation in the second half of 2017. Critics of the Association Agreement have raised concerns over the continued existence of significant quota restrictions limiting Ukrainian agricultural exports to EU markets, while the EU’s often complex and rigorous standardization and regulatory requirements have created additional obstacles. Nevertheless, Ukraine’s emergence in 2017 as the largest gainer and the fourth biggest contributor country among the EU’s agri-food import sources is a strong indication that Ukrainian exporters are adapting to market conditions. The growth in Ukrainian agricultural exports to the EU in 2017 was slightly more robust than the generally positive export trends registered throughout the country’s agribusiness sector. According to Ukrainian Agriculture Ministry figures, agricultural exports rose by 16.3% to reach USD 22.6 billion last year. Key exports included 5.7 million tonnes of sunflower oil worth approxi-
mately USD 4.3 billion and 19.4 million tonnes of maize with a value of USD 2.9 billion. Ukraine’s agricultural sector has been one of the best performers in recent years, with the geopolitically driven loss of access to Russian markets since 2014 sparking an international expansion campaign that is seeing more and more Ukrainian agricultural companies establishing presences in strategic global markets such as India, Iran, China and the Middle East. In Ukraine itself, the country’s agricultural infrastructure has emerged as one of the key focuses for international investment. Major projects have included new port loading and processing facilities designed to improve Ukraine’s ability to get its agricultural wealth to global customers. Mykolaiv, which serves as the primary gateway to Ukraine’s agricultural breadbasket, has been one of the main beneficiaries of this process, attracting Chinese and American investments worth hundreds of millions of dollars. Meanwhile, Ukraine signed a USD 1 billion agreement with General Electric subsidiary GE Transportation in February that will see the American company support the modernization of Ukraine’s largely Soviet-era railway transport fleet. GE Transportation will provide Ukraine with 30 new locomotives over the next two years with a second phase involving the production of 225 new locomotives and upgrades to 75 existing locomotives. The arrival of modern General Electric locomotives will help Ukrainian agricultural producers deliver more crops to global markets.
Letters to the editor: editor@bunews.com.ua Advertising inquiries: +38-067-4032762 Business Ukraine magazine is distributed every month free of charge at a wide range of leading business centres, embassies, international organizations, hotels and restaurants throughout Kyiv. Registration: KV 15006-3978PR Published by: Open Borders Media Director: Susanna Dickinson
74
No reproduction, use or adaptation of contents, logos, titles or designs is permitted in any manner without the prior written consent of the publisher. The opinions expressed by individual authors and contributors each month in Business Ukraine magazine do not necessarily reflect the position of the publishers. The publishers of Business Ukraine do not accept legal responsibility for the goods and services advertised within the publication.
www.bunews.com.ua
ENJOY THE PRIVILEGES WHERE BUSINESS MEETS BENEFITS
To become a member and start receiving benefits of Turkish Airlines Corporate Club, please visit corporateclub.thy.com
WHEN IT COMES TO
MEETINGS & EVENTS
WE HAVE
EVERYTHING 30 4000 370 50 2 3500
Meeting rooms
Guests
Bedrooms
Event specialists
Podil 21, Sahaidachnoho Str.
103, Stolychne Shose
Hotels
sqm exhibition areas
Atmosphera Mall 103, Stolychne Shose
dbihotels.com +38 044 205 15 20
21, Sahaidachnoho Str.