Business Ukraine 10/2017 by Business Ukraine magazine

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BUSINESS UKRAINE ISSUE 10/2017 - NEW YEAR 2018: Ukrainian-Finnish relations are in the spotlight this month as Kyiv and Helsinki prepare to celebrate the centenary of diplomatic relations between the two countries. Diplomatic ties date back to 1918 when Finland became one of the first countries to establish an Embassy in Kyiv during Ukraine’s early twentieth century independence bid.

Ukraine has reason to cheer first year of Trump presidency At the dawn of 2017, there was a thinly veiled sense of panic in Kyiv over the advent of the Trump presidency. The new US President had made no secret of his desire to repair relations with Russian leader Vladimir Putin, while there were also fears of retribution for Ukraine’s perceived backing of Trump rival Hillary Clinton in the race for the White House. The prospects for US-Ukrainian relations seemed extremely gloomy. Looking back on the first year of the Trump era, these concerns now appear to have been overblown. Indeed, there is a very good case for arguing that the Trump administration has actually proven surprisingly pro-Ukrainian. The White House underlined this supportive stance in late December by agreeing to provide Ukraine with defensive weapons, a move that reversed years of refusals by the Obama administration. The decision to arm Ukraine was the most striking in a series of steps throughout 2017 that served to bolster Ukraine’s position in its confrontation with the Kremlin. Trump’s choice of Kurt Volker as Special Representative for Ukraine in July 2017 was perhaps the most important in a number of US appointments and personnel changes welcomed in Kyiv foreign policy circles. Volker has brought a refreshing frankness to the dialogue over the war in Ukraine, often abandoning diplomatic niceties in order to stress direct Kremlin responsibility for the conflict while speaking unambiguously about “100% Russian command and control” of the socalled separatist republics. Other prominent figures in the Trump administration such as Secretary of State Rex Tillerson have also made it clear in talks with the Kremlin that the only road to improved US-Russia ties runs directly through Ukraine. Far from throwing Ukraine under the bus, the Trump White House has spent much of 2017 underlining its non-negotiable support for the country’s territorial integrity.

Meanwhile, pro-Russian members of the Trump camp have fallen out of favor. The most prominent casualty was short-lived National Security Advisor General Michael Flynn, who resigned in early February over his contacts with Russian officials and remains a central figure in the probe into alleged Kremlin meddling in the 2016 US presidential election. Nor has there been any progress in the widely anticipated thaw between Washington and Moscow. Russian politicians famously toasted Trump’s election victory with champagne and spoke openly of putting “their man” in the White House, but there has been precious little evidence of a new era in bilateral relations. On the contrary, ties have deteriorated significantly throughout the course of Trump’s first year in office. This downward spiral has included additional sanctions and the seizure of diplomatic compounds, culminating in the recent publication of a new US National Security Strategy that identifies Russia as a rival power seeking to erode American security and prosperity. The elephant in the room here is the ongoing investigation into collusion between the Trump team and the Kremlin. Skeptics will no doubt argue that in light of the accusations he faces, President Trump has had little choice but to pursue a demonstrably tough Russia policy, regardless of his continued personal preference for some kind of geopolitical deal with Putin. This may well be the case, but it matters little as far as Ukraine is concerned. What really counts is continued US support in the fight against Russian aggression. In that respect, Kyiv has considerably more reason for optimism going into 2018 than Moscow.

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

ТОВ “ВІННЕР ІМПОРТС УКРАЇНА, ЛТД”. ЄДРПОУ 20054535

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finland in ukraine

Finland in Ukraine

Finnish Ambassador to Ukraine Juha Virtanen says an emphasis on innovation can help foster closer cooperation and build business bridges between Kyiv and Helsinki

About the interviewee: Juha Virtanen is the Finnish Ambassador to Ukraine Finland celebrated a century of independence in December 2017. Like Ukraine, Finland sought to break free from Russian imperial rule one hundred years ago as Tsarist authority collapsed during the latter stages of WWI. Unlike Ukraine, the Finns succeeded. The subsequent twentieth century fates of the two countries could hardly have been more different. Finland would go on to become one of the most economically prosperous and socially advanced members of the European community, while Ukraine spent over seventy years trapped in Soviet isolation. The fall of the USSR enabled Helsinki and Kyiv to renew a diplomatic relationship that dates all the way back to the tumultuous events of 1918. As Ukraine and Finland prepare to mark the centenary of diplomatic ties between the two countries, Business Ukraine magazine sat down with Finnish Ambassador to Ukraine Juha Virtanen to discuss strengthening bilateral business ties, hybrid war concerns, and Finlandâ&#x20AC;&#x2122;s relaxed relationship towards the countryâ&#x20AC;&#x2122;s imperial Russian inheritance. 10

What are the priorities for Finnish-Ukrainian relations in 2018? In 2017, we had the great honor of celebrating the centenary of Finlandâ&#x20AC;&#x2122;s independence here in Ukraine. In 2018, we will celebrate 100 years of diplomatic relations between our two countries. This historical achievement will give an added dimension to the work of the Embassy over the coming year. Maintaining frequent high-level political contacts will remain the basis and top priority of our bilateral relations. In the spirit of solidarity, Finland will also remain committed to supporting Ukraine in its reform process towards a modern European state and in consolidation of its sovereignty and territorial integrity. Practical support will continue. Since 2014, we have assisted Ukraine with over EUR 32 million in aid. In 2018, we will also be busy with the launch of two new cooperation projects in the education and energy efficiency sectors. The promotion of trade and economic relations is al- :

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: ways high among the priorities of the Embassy. We expect the bilateral

economic commission to begin meeting again in 2018. There is huge potential to enhance bilateral economic cooperation and boost trade in a number of promising areas. I would also like to place a special emphasis on tourism exchange. More Finns should come to visit Ukraine and vice versa. If we want to make this happen, we need to increase promotion activities around our “VisitFinland” initiative. How can Ukraine attract greater volumes of Finnish investment? The total amount of Finnish investment in Ukraine today is close to EUR 100 million. Ukraine’s business and investment climate remains quite challenging and Finnish companies are closely following its development. Ukraine seems to be broadly on the right track. Achievements include a more stable macroeconomic situation, banking sector reforms, and deregulation of some administrative burdens. However, there are still quite a wide range of different obstacles and barriers in place. The list is familiar to everyone who takes an interest in the Ukrainian business climate and includes taxation, the predictability of legislation and its fair implementation, the judicial system, customs clearance and unnecessary bureaucracy. Finland is an innovation-driven country and one of the most innovative economies in the world. I have noticed that today’s Ukraine is also showing signs of growing demand for innovative approaches in all spheres of life. I believe that in the coming years we will see increasing cooperation in this field, which bodes well for the development of broader bilateral business cooperation. Energy-efficient and ecologically clean technologies have always played a key role in Finland’s economy. I am confident that Finland and Ukraine have a lot to share in these and many other sectors. The new Ukraine has the considerable advantage of being able to use our decades of experience together with its own untapped potential in order to boost the efficiency and attractiveness of the Ukrainian economy considerably. What do you see the key opportunities for Ukrainian exporters looking to enter Finnish markets? The main factor or facilitator here is Ukraine’s European choice. The DCFTA between the EU and Ukraine provides a solid legal and formal basis for Ukrainian exporters to modify their products and become

more competitive in the European market. In addition, it is important to remember that we also have several bilateral agreements for facilitating business covering areas such as the protection of investments, avoidance of double taxation, and enhanced customs cooperation. There is huge potential for trade, cooperation and joint ventures between Finland and Ukraine in a range of industrial sectors. So far, the exports of both countries tend to focus on traditional items where they enjoy comparative advantages. The majority of Ukrainian exports to Finland are concentrated in the agro, chemicals, metals and manufacturing sectors. Both countries should try to diversify their export portfolios to include more value added products and services. In the Ukrainian case, this could mean developing and refining bulk products and transforming the present offer to be more competitive in relation to other European suppliers. I see three essential elements in this question. Firstly, confidence in the reliable production, distribution and quality of agricultural products is of the utmost importance to European consumers. Ukraine’s commitment to align itself with EU legislation and standards on all animal and plant health and food safety measures supports the competitiveness of Ukrainian products in this sector. Secondly, there must be active marketing of Ukrainian products in the Finnish market. Thirdly, Finland is a northern country whose own agricultural production is limited due to climate conditions. There is therefore important demand for some imported grains, vegetables and fruits. Increased supply of high quality Ukrainian agricultural products in Finland would be very welcome.

How is “Brand Ukraine” perceived in Finland and how have perceptions of the country evolved over the past few years of heightened media coverage? Unfortunately, Ukraine and its history are still relatively unknown to many Finns. Traditionally, Ukraine is probably most closely associated in Finland with fertile soil and the supply of cereals. It also has a reputation for metal manufacturing and engineering, with Ukrainian companies such as Antonov enjoying considerable brand recognition. Meanwhile, sports and music-loving Finns know Ukraine as a two-time Eurovision Song Contest winner and the co-host of the Euro 2012 football championship. Andriy Shevchenko and the Klitschko brothers are household names. It is also common to see Ukraine’s impressive female :

“Russian occupation of Crimea and the conflict in the Donbas have dominated Finnish perceptions of Ukraine since 2014, but this has also led to greater public interest in Ukraine and the emergence of a more complex picture” 12

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: biathlon stars featured on Finnish TV.

Inevitably, the Russian occupation of Crimea and the conflict in the Donbas have dominated Finnish perceptions of Ukraine since 2014, but this has also led to greater public interest and the emergence of a more complex picture. President Poroshenko’s January 2017 official visit to Finland in particular presented the media with the opportunity to add context and provide deeper insight into contemporary Ukrainian affairs. This trend is continuing. Numerous regional Finnish newspapers have recently published profiles of Ukrainian seasonal workers that have been broadly positive in tone while highlighting their contributions. How has the war in Ukraine affected defense and security thinking within Finnish society? In concrete terms, there was a slight increase in the number of people supporting Finnish NATO membership at the beginning of the conflict, but today this effect has virtually disappeared. Notwithstanding the conflict in Ukraine, Finland is well aware of and concerned by the many security threats in the world today. However, we do not feel directly threatened militarily. While we do take serious care of our national defense capabilities and see international defense cooperation playing a significant role, we do not base our security on military alliances. It is important for Finland to have the will and ability to defend itself and not to allow anyone to use its territory for hostile purposes against third countries. In the context of the current Russian-Ukrainian confrontation, the notion of “hybrid threats” has become more visible. With this very much in mind, Finland recently established the European Centre of Excellence for Countering Hybrid Threats in Helsinki. This Centre will in-

crease public and collective awareness of new security threats at both the national and international levels.

Finland has recently celebrated the 100th anniversary of the country’s independence from Russia. Nevertheless, visitors to Helsinki can still find monuments to Russian tsars and Lenin in the city, while some Russian street names also remain. How would you characterize Finland’s approach to the country’s Russian imperial past and what role does this aspect of Finnish history play in presentday relations with Russia? In Finland, we prefer to consider history as a sequence of facts and tend to reject subjective interpretations of history that lead to different points of view at different times. We are not willing to use history for contemporary political purposes, but rather try to look at the past in a scientific and objective manner. Perhaps this explains the conservation of numerous Russian elements in some Finnish cities. Finland’s status as a Grand Duchy of the Russian Empire during 18091917 was in many ways a preparatory phase towards future independence. In the 19th century, Finland was able to build its national identity based on Western values and institutions inherited from 600 years of Swedish rule. The cultural differences between Finland and Russia also made it easier to develop our own Finnish identity and national characteristics. The tsars themselves often enjoyed considerable prestige in Finland as the guarantors of Finland’s wide autonomy against the oppressive measures of the Russian authorities. Today, Finland’s common history with Russia is evident in our shared interest in maintaining and visiting historical sites and monuments, especially in Helsinki and St. Petersburg, and in commemorating historical figures like Marshal Carl Mannerheim, who served in both countries.

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finland in ukraine

Centenary of diplomatic relations

Finland and Ukraine can look back to 1918 as they seek to strengthen twenty-first century ties

About the author: Andrii Olefirov is Ambassador of Ukraine to the Republic of Finland The year 2018 marks the one hundredth anniversary of the establishment of diplomatic relations between Finland and Ukraine. Indeed, back in 1918, Finland was one of the first countries to open a diplomatic mission in Kyiv. That same year, the Ukrainian diplomatic mission was among the first six foreign embassies to open in Helsinki, the capital of newly independent Finland. Konstiantyn Lossky was the first Ukrainian Ambassador to Finland and Herman Gummerus was the first Ambassador of Finland to Ukraine. After completing his diplomatic mission in 1919, Ambassador Gummerus wrote a book of memoirs entitled: “Ukraine in Crucial Times.” “We Finns will enjoy the success of the independence aspirations of the Ukrainian people, which are so much in the interests of our country. When, one day, the time comes for Ukraine’s freedom, it will be clear that the desire to establish friendly relations between Finland and the country of Bohdan Khmelnitskiy, Mazepa and Shevchenko was not in vain,” wrote Ambassador Gummerus at the time. The historical destinies of the two countries would diverge significantly during the course of the twentieth century. Finland managed to hold on to its independence and was able to celebrate its centennial jubilee in 2017, while Ukraine became part of the Soviet Union. When the USSR finally collapsed, Finland recognized the independence of Ukraine on 30 December 1991, and on 26 February 1992, the two countries restored diplomatic relations.

Intensifying Bilateral Ties

This shared past creates a promising foundation for contemporary and future relations between our two countries. Bilateral relations are currently developing with new impetus. Over the past three years, the presidents of Ukraine and Finland have had a dozen meetings and numerous telephone conversations. In 2015, the Speaker of the Ukrainian Parliament visited Finland. The foreign ministers of both countries have also exchanged visits. 16

Ukraine appreciates Finland’s unwavering support for the sovereignty and territorial integrity of Ukraine. Finland supports Ukraine on both the political and humanitarian levels. For example, Finland is the third largest contributor to the OSCE Special Monitoring Mission to Ukraine. In 2016, Finns built a state-of-the-art new school for local Ukrainian schoolchildren in the village of Antonivka in Kherson Region. Meanwhile, the official visit of the President of Ukraine to Finland in January 2017 has led to a significant intensification of political and intergovernmental contacts between the two countries. Thanks to this new impetus, there are significant developments in the spheres of energy efficiency, education and business. In November 2017, the Foreign Ministry of Finland and the Nordic Environment Finance Corporation, with its headquarters in Helsinki, signed an agreement to set up a trust fund that will provide financial support for energy efficiency and renewable energy projects in Ukraine. The total value of the new trust fund is EUR 6 million. The Finland-Ukraine Trust Fund will promote cooperation and identify projects in the fields of energy efficiency, renewable energy and alternative energy resources for power and heat generation, as well as for district heating networks. Ukraine and Finland are also preparing to sign a bilateral agreement on co-operation in the education sector. This cooperation initiative aims to improve both the quality of education and perceptions of the Ukrainian education system.

Trade Increases 17.5% in 2017

Commercial ties between the two countries are also strengthening. According to the State Statistics Service of Ukraine, in the first three quarters of 2017, the total volume of trade in goods and services between Ukraine and Finland increased by 17.5% compared to same period of 2016. A growing number of Ukrainian companies are interested in the development of new European markets for products. They are actively establishing new business contacts, in particular with Finnish partners. There are also currently over 40 companies with Finnish investments present in the Ukrainian market. The October meeting in Kyiv of the co-chairs of the joint intergovernmental Commission on Trade and Economic Development contributed to the ongoing dialogue underpinning this growing bilateral commercial relationship. The next goal on the horizon is to hold the seventh meeting of the Commission in Kyiv in 2018. The EU-Ukraine Association Agreement and Ukraine’s visa-free EU status, both of which came fully into effect in 2017, will provide powerful additional stimulus for deepening Ukrainian-Finnish business cooperation. At present, the only issue where the two countries do not see eye to eye is Russia’s proposed Nord Stream 2 pipeline. Finland looks at this issue in commercial terms, whereas Ukraine considers implementation of the Nord Stream 2 project as very harmful to European energy security. Ukraine remains convinced that it is a purely political project. Even in this matter, both parties deem it necessary to hear each other out. The last time it was under discussion by the Prime Minister of Finland and the President of Ukraine was during the EU’s November 2017 Eastern Partnership Summit in Brussels. We hope that our Finnish colleagues will adopt a balanced approach to further consideration of this issue within the framework of the EU.

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Finnish giant helps Ukrainian cargo industry load up

Cargotec Ukraine sees significant room for growth as Ukrainian cargo industry eyes greater efficiency

As one of Europe’s great transit nations, Ukraine is a major focus of the continent’s cargo industries. The flagship Finnish presence in the Ukrainian cargo industry is Cargotec Ukraine LLC, which has been active in Ukraine providing cargo handling and loading solutions since 2008. Cargotec Ukraine is a subsidiary of Finland’s Cargotec Corporation, a global market leader in cargo flow that brings together load handling brands Hiab, Kalmar and MacGregor. The key focus of the Cargotec Ukraine business is the sale and servicing of Haib brand products for road transportation loading. The company’s product range in Ukraine includes Hiab loader cranes, Loglift and Jonsered forestry and recycling cranes, Moffett truck mounted forklifts, Multilift hook loaders and skip loaders, and Del, Waltco, and Zepro tail lifts. Cargotec Ukraine’s Vladimir Kuptsov explained to Business Ukraine magazine why he sees huge scope for the development of the loading business in a Ukrainian cargo industry that is increasingly seeking to modernize and upgrade.

Since entering Ukraine in 2008, you have established yourselves among the market leaders. How do you seek to maintain this position amid growing international interest in the Ukrainian cargo industry? Our position depends on the three words that form the essence of everything we do as a company: simply put, this means, “built to perform”. Since its foundation, our company has remained focused on the needs of our customers. We know how to offer an individual approach to each client’s specific needs, while also adhering to clear and understandable corporate rules and regulations. This creates a solid foundation for business and provides the kind of clarity necessary to build long-term partnerships. Technical advantages also play a key role in allowing us to maintain our leadership position in Ukraine. The unique Hiab technologies we are able to offer, along with a wide selection and unrivalled security, help to generate faith in our brand and give us a competitive edge.

What do you see as your most important achievements in the Ukrainian market? In the nine years since we began operations in Ukraine, we have managed to establish ourselves as a reliable supplier and partner for companies operating in a variety of industries. We have developed productive relationships with both international companies and regional enterprises in a wide range of different spheres including the construction industry, the electricity industry, timber, waste management, communal services, agriculture, the defense industry and much more. We now have a nationwide dealer and service network that allows us to offer high quality service and to support to our clients at short notice. Our qualified specialists are always on hand to provide professional advice and, when required, original spare parts. We also cooperate with the world’s leading manufacturers in the cargo and transportation sectors, so we are able to handle complex orders and manage supply issues in a manner that takes into account the individual requirements of the client and the specifics of their particular business. Our partners are successful businesses and we aim to play our part in making sure they stay that way by providing them with effective solutions. The goal is always the same – fruitful, long-term and mutually beneficial cooperation. How do you see the cargo loading business developing in Ukraine over the coming few years? In my opinion, the Ukrainian market for lifting and loading equipment still has huge growth potential. We are seeing more and more interest in lifting equipment among companies engaged in the cargo transportation industry as they seek to improve safety while reducing downtime and optimizing loading and unloading processes. According to current statistics, Ukraine has more than 1.3 million cargo-bearing vehicles, but only around 2% have lifting equipment installed. Meanwhile, in the European Union the figure is one in every three cargo-bearing vehicles. The difference between these two statistics serves to underline the massive room for growth in Ukraine. It also gives us something to work towards and aim for.

About the interviewee: Vladimir Kuptsov is the General Director of Cargotec Ukraine

Kyiv Celebrates Century of

Finnish Independence

Finland marked the centenary of the countryâ&#x20AC;&#x2122;s independence in December and Kyiv joined in the global celebrations with a dazzling diplomatic reception at Art Hall D12 in the Ukrainian capital. Highlights of the evening included a spellbinding performance from the Schedryk Childrenâ&#x20AC;&#x2122;s Choir and additional musical entertainment from an authentic Finnish band playing evergreen Finnish and international melodies. Finnish Ambassador to Ukraine Juha Virtanen thanked guests for their congratulations and shared the stage with Ukraineâ&#x20AC;&#x2122;s Deputy Prime Minister for Euro-Atlantic Integration Ivanna Klympush-Tsintsadze, who delivered a keynote speech congratulating Finns on reaching the 100-year landmark and thanking Finland for its support as Ukraine continues along the road towards greater European integration. This evening of centennial festivities in Kyiv was possible thanks to the support of the Finnish business community in Ukraine including Cargotec, Konecranes Ukraine, Nokian Tyres, Orion Pharma, Ruukki Ukraine, Hotel Leopolis and Vodka Finlandia. 20

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www.bunews.com.ua

Jessikka Aro is an investigative reporter at Finnish national broadcaster YLE 22

finland in ukraine

The Finnish Journalist Working to Uncover

Putin’s Troll Empire

Back in 2014, Jessikka Aro was among the first international journalists to recognize the scale of Kremlin information warfare. Her research made her a target but she has refused to be cowed and is now preparing to publish a book on Vladimir Putin’s troll empire

When Russia launched a massive information offensive in early 2014 as part of the Kremlin’s hybrid war against Ukraine, the outside world was taken largely by surprise. While the concept of information warfare is as old as war itself, the appearance of slick and sophisticated fake news reports along with the deployment of industrial-scale troll farms caught international audiences offguard. This was a new and innovative form of information warfare tailored to capitalize on the almost limitless possibilities presented by the social media revolution. One of the first international journalists to recognize the scale of the problem was Finnish investigative reporter Jessikka Aro, who works at Finland’s national broadcaster YLE. Ms. Aro began investigating the phenomenon of Kremlin troll factories in summer 2014 as the hybrid Russian offensive in eastern Ukraine was in full flow. She soon became a target of the trolls herself, with coordinated and relentless social media campaigns of harrassment designed to discredit her work and intimidate her into silence. These included the publication of personal information and attempts at character assassination, with one particularly notable incident involving the release of an entire music video attacking her as an American agent. This abuse has taken its toll on Ms. Aro but she says the support she has received from the Finnish public and the international community has helped her to cope. She has remained engaged in the issue of Russian information warfare for the past three years and is currently preparing to publish a book of her findings. Business Ukraine magazine spoke to Ms. Aro about the threat posed by Kremlin information warfare and asked her how counter-measures www.bunews.com.ua

can be balanced against the need to safeguard the core Western principles of free speech and freedom of expression.

You were among the first people internationally to draw attention to Russian infowar tactics in 2014. How has international understanding of this phenomenon grown over the past four years? Greatly. A phenomenom that was previously discussed by a relatively small circle of international experts has become a familar subject of coffee table conversations among the general public. There are two key factors behind this heightened public awareness. Firstly, it is a result of the sheer volume of investigations into Russian information warfare conducted over the past four years in a number of different countries. No less important is the high level of brutality used in the Kremlin’s disinformation campaigns, which means they cannot go unnoticed.

There are a growing number of international intitiatives to counter Russian information warfare, from fact-checking services to entire agencies dedicated to debunking fake news. How useful do you think these efforts are, and where would you like to see efforts focused? They are extremely important and need even more funding and support. Many projects are understaffed compared to the volume of material the Kremlin’s propaganda machinery produces. Special efforts need to be directed towards supporting the segments of society most vulnerable to Kremlin propaganda. In the most educated circles, Kremlin disinformation is often easily detected, dismissed and even countered, but in every affected society there are indi- : 23

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: viduals and groups who need special support in order to realize

that they are being systematically targeted by state-sponsored manipulation. This task could most credibly be carried out by media organizations and NGOs, or addressed at the level of national education systems. In many cases, fake news or other influence operations have succeeded without their targets understanding that the Kremlin is involved. For example, many people spreading extremist far-right propaganda don’t realize the material originates in Russia or is financed by Russian entities. If this mechanism for radicalizing parts of the population is not addressed, more hate crimes will follow. Your forthcoming book “Vladimir Putin’s Troll Empire” aims to offer readers new insights into Kremlin information warfare. As somebody who has long been familiar with the subject matter, what have been the most surprising findings of your research for the book? I was surprised to learn that the concept of social media propagandists pretending to be genuine opinionated citizens has much longer roots historically than many people had previously acknowledged. Another important finding has been the cynical and in some cases highly sophisticated abuse of the journalistic principles that guide most traditional Western media outlets. The Kremlin knows exactly how to play Western journalists and this is something all Western media should take into account when making publishing or broadcast decisions. Yet another fascinating finding has been the sheer diversity of local or regional disinformation campaigns. I have actually come to the conclusion that one book is not enough to cover even a small part of the Kremlin’s trolling and disinformation operations, and am now considering publishing a series of books. Social media is arguably the key battleground of today’s information warfare. Is greater regulation required in order to hold social media platforms more accountable? This is the key question. National governments should require social media companies to obey and respect both national legislation and international agreements on human rights. So far, social media giants such as Facebook and Twitter have made their platforms available to trolls, pro-Kremlin extremists and harassers. It was only the US investigation into Russian meddling in America’s 2016 presidential elections that forced them to admit their services had been abused by malicious state-sponsored operators. As social media companies have not been able to provide credible plans to tackle the issue of social media meddling, individual governments definitely need to push them more, and should also look to co-operate internationally to achieve results. At the moment, social media companies are given too much power to define what kind of public communication is lawful and what is not. In many non English-language areas, for instance, Facebook still doesn’t remove troll content including death threats directed at named individuals or agitation against religion or ethnicity, even though this content is clearly illegal. There should be no debate over such clear-cut examples: they are dangerous and need to stop. Many information warfare analysts were critical of recent US actions against Kremlin media platforms RT and Sputnik, arguing that by taking measures against these outlets, the US allows them to generate sympathy while also compromising America’s

free speech commitments. Where do you stand on this subject? RT, Sputnik and other propaganda platforms use every imaginable trick to try and lobby the idea that any regulation or counter-measure against them is an attack on freedom of speech. This is a case of severe spin, showing how propaganda channels try to mold the very definition of free speech to fit their own political purposes. The idea of freedom of speech is to enable people to obtain and send information, as well as to observe and criticize the decisions of political decision makers. It is not meant to help state-sponsored propagandists and fake news sites spread their political messages. RT and Sputnik should be considered as lobbying organizations or political companies, not as media. They do not operate in accordance with journalistic ethics or adhere to the journalistic principle of reporting the facts.

US President Donald Trump routinely lambasts leading American media outlets as “fake news”. The term is now used in public discourse with increasing regularity, often in reference to anything someone disagrees with. Are we in danger of reaching a point where talk of information warfare and fake news becomes meaningless? No, we are not. The reality is quite the contrary. US President Donald Trump actually risks rendering himself meaningless with his repeated public lies and extremist statements. Journalists are in the most important position when it comes to countering the spread of fake news. In the case of the US President, this is most effectively done by continuously publishing factual information about Trump’s statements, his activities, and his policy-making. There will always be some support for liars and extremists, but in Western societies fact-based journalism still commands the biggest audiences. The majority of the audience demands factually correct and politically unbiased news. I believe this era of disinformation and attacks on the integrity of the media should motivate all journalists to produce stronger journalism than ever before. How does the information environment in Finland today compare to 2014? Is there still a strong Kremlin troll presence, and how have their tactics developed over the past four years? There have been many different developments. On the one hand, most of the most common trolling techniques have stagnated at the vulgar levels of 2014 and remain focused on name-calling, smearing and personal attacks. However, trolls are obviously still active in various languages and continue to spread disinformation and extreme views on a variety of different topics in Finnish as well as in the international information spaces. It is interesting to note how some trolls have widened their themes of interest: in 2014 they were mostly spreading obvious, old-fashioned pro-Kremlin lies about Ukraine or attacking the EU. Nowadays they cover a much broader selection of themes: they talk about next year’s Finnish presidential election, they assess the quality of Finnish journalism, produce hate speech against foreigners in Finland, and post antimuslim comments. In addition to that, they actively promote antiestablishment street protests and attack Finnish law enforcement. The good news is that awareness among Finnish audiences on the topic of troll influence has evolved a great deal over the last four years. Finnish society is much more resilient in this respect today than it was in 2014.

THE FINNISH INSTITUTE UKRAINE - Strengthening Finnish-Ukrainian ties

- Connecting Finnish and Ukrainian businesses

- Providing access to Finnish culture and arts

- Promoting innovation exchange

- Promoting Finnish language studies

- Engaging with the Finnish media

The Finnish Institute Ukraine was established in 2017 to promote Finnish culture, education, social and environmental innovations, and closer economic relations with Ukraine. The Institute seeks to develop new networks and connections though promotional work, events and individual matchmaking between cultural and educational institutions along with private and public sector organizations. The Finnish Institute Ukraine focuses on modern and innovative cross-sector projects that have the potential to become real change-makers with a measurable impact in Ukraine. The Institute’s offices are located in Lviv and Kyiv in Ukraine, and in Espoo, Finland. Additional premises for seminars, conferences and other events are also available via partners, while the Institute has apartment accommodation in Lviv available for visiting Finnish guests. Through its own activities and via participation in Ukrainian events like conferences and trade fairs, the Institute aims to raise awareness about Finland while promoting bilateral relations in the cultural, social and economic spheres. The Institute is 100% privately funded and independent of official Finnish and Ukrainian state bodies. This adds flexibility and credibility to the Institute’s work with local institutions, partners and wider audiences. A core focus of the Institute is the promotion of Finnish language teaching across Ukraine. Lviv is the educational and cultural capital of Ukraine, making it a logical place to begin this language initiative. The Department of International Affairs at Lviv National University is providing great support in this direction. The Institute is also active in the translation and publication of books. The Institute has helped produce a Ukrainianlanguage version of the book “Finland – Country of Innovation”, which can be ordered from the Institute. Future goals include a quarterly Finnish Institute Ukraine newsletter for distribution in the Finnish language to 10,000 Finnish businesses, opinion-shapers and media personalities. Engaging with the Finnish and international media is a key objective of the Institute, with events planned that will introduce media representatives to the realities of today’s Ukraine and add new layers to their understanding of the country. The Institute assists Ukrainian startups and IT companies to participate in Finnish events including Slush, the biggest startup conference in Northern Europe. A number of other programs are under development to support closer ties in the tech sector.

HOW TO CONTACT US: Finnish Institute Ukraine Tel.: +38-073-0315486 Email: finnishinstitute@gmail.com www.finnishinstitute.org

Mrs. Olena Lesyk-Laikari is the Executive Director of the Finnish Institute Ukraine

Nordic nation has no major mountains but plenty of snow and a wealth of skiing options Most people associate Finnish tourism with Santa Claus and trips to Lapland, but the country also has a thriving skiing industry that boasts one of the longest annual seasons in Europe. With Ukrainians now able to travel throughout the EU Schengen Zone without visas, Finnish ski resorts are hoping to welcome increasing numbers of Ukrainian guests over the coming months. There are over one hundred ski resorts in Finland. This is quite a high number for a country that has no mountains. Instead of mountains, there are a great deal of skiable hills covered with snow for about 200 days a year. Finnish ski resorts are practically guaranteed to have snow for the whole season, which starts as early as October and ends, at the latest, in midMay. Visitors will find slopes to fit every skill level. Even small children and absolute beginners can enjoy skiing down gentle family slopes. Most of the slopes are easy, wide and not very long, but there are also some international-class race slopes challenging enough to test seasoned skiers. As well as traditional downhill skiing, there are also plenty of parks for snowboarders and other winter sports fun on offer including traditional Finnish saunas.

Pyha Ski Resort The idyllic Pyha Fell is just a short drive away from Rovaniemi airport.

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At Pyha, the wilderness is truly on your doorstep and everything is easily accessible by walking or skiing. If you have never experienced downhill skiing before, the slopes and off-piste routes at Pyha satisfy the needs of both beginners and experienced adventurers. The new and improved Pyha Ski Resort serves skiers better than ever before. It now features nine lifts and 14 slopes set in stunning natural surroundings. Pyha-Luosto National Park is located just to the side of Pyha and Luosto tourist centres, connecting these two centres via hiking and skiing trails. This National Park is a superb destination for day trips and short hikes throughout the year, but is especially breathtaking during the long winter months.

finland in ukraine

Finland hopes to welcome visa-free Ukrainian skiers

Saariselka Ski Resort Saariselka is located in the far north of the country, but is still just a short flight from Helsinki. A wide range of accommodation options and other amenities are available nearby, yet the peace of the wilderness is only a few steps away. Most visitors come to Saariselka to indulge in outdoor activities against the magnificent backdrop provided by the fells. In winter, there are about 200km of well-maintained cross-country skiing tracks. Downhill skiers can choose from 15 slopes spanning two fells, : along with a vast selection of other winter activities.

Vuokatti Ski Resort Vuokatti, thanks to its unique geographical location in Kainuu region, is one of the most popular holiday resorts in Finland throughout the year. Situated at the crossroads of the famous Finnish Lakeland area and Lapland itself, Vuokatti and the surrounding area offer a mixture of all the highlights of the authentic Finnish experience in one package. In wintertime, one can easily experience the full range of Finnish snow activities such as snowmobiling, reindeer and husky safaris while in Vuokatti area. Meanwhile, thanks to the resort’s ski & snowboard tunnel, Vuokatti can offer all-year winter activities, including training for professional-level winter sports. Vuokatti has plenty of experience hosting different national and international sports teams who come each year to set up training camps in the area.

Levi Ski Resort

Levi is the largest ski and recreational resort in Finland. It sits 170km north of the Arctic Circle. The resort has a great variety of slopes and ski lifts. Levi offers downhill enthusiasts everything from kids’ runs to black slopes, while the resort’s cross-country skiing tracks range for an impressive 230km. The season starts in late October and lasts until early May. Levi offers a wide variety of hotels, cabins and apartments ranging from one to five stars in quality. Whether you are looking for an Alpine-style apartment in the middle of the village, a log cabin surrounded by nature, or a glass igloo, you will find a suitable option. Levi is Finland’s only ski resort with Alpine World Cup slopes. Alpine World Cup races for both men and women take place at Levi every November.

Ruka Ski Resort

Ruka is located in Kuusamo, Eastern Lapland, and is reachable through good

travel connections. Ruka is one of Finland’s most popular ski and holiday resorts and a lively alpine-like town. Ski season lasts from October until May and the resort is one of the most snow-secure places in Europe. 21 ski lifts and 34 slopes guarantee cool runs for downhill skiers and snowboarders. A vast network of cross-country ski tracks circle around the ski resort. Guests find themselves surrounded by pristine nature of magnificent hills, pure rivers, wild woodlands and wonderful natural scenery. With a wide selection of services, there are plenty of things to do besides skiing, ranging from visits to reindeer farms to enjoying the warmth of the Finnish sauna experience.

Tahko Ski Resort

Tahko is a compact and warm-hearted ski resort located in the Lakeland area of Finland. Picturesque slopes, a wide range of interesting outdoor activities, and high-level accommodation attract crowds of people to spend their winter holidays in Tahko. It is the fourth biggest skiing center in Finland and famous for perfectly groomed slopes. If you are looking to take in some of Finnish city life while in the country, Tahko Ski Resort is located less than an hour’s drive from Kuopio, one of the larger cities in Finland.

Iso-Syote Ski Resort

Iso-Syote ski area and its 17 slopes and 10 lifts offer excellent settings for skiers and snowboarders of all skill levels. The children’s Snow World has four slopes and four lifts designed for safe and fun learning. Long and wide blue slopes are perfect for easy and enjoyable runs, while black and red slopes offer challenges for the more experienced. Thrill seekers can also enjoy great off-piste and park facilities. The nearby Pikku-Syote ski area has nine slopes suitable for those who are just starting their skiing career.

White Hell: Tested Under Extreme Conditions

Nokian Tyres is a well-known tire manufacturer focusing on safety and driving comfort. For more than 80 years, the world’s northernmost tire manufacturer helps drivers overcome any road conditions in heavy rain or snow, hot or cold weather. Today Nokian Tyres is one of the largest tire manufacturers with two factories in Nokia, Finland and Vsevolozhsk, Russia equipped with modern equipment. The pride of the company is the White Hell testing center for winter tire testing. White Hell is the only test center in the world located beyond the Arctic Circle. In terms of size, it is unrivalled: White Hell spans over 700 hectares of snowy plains in Ivalo, Lapland. The test tracks at White Hell work at full capacity between November and May - more than 200 days a year. On tracks with a total length over of 100km, we test 20,000 tires each season, clocking up a mileage of 40,000 kilometers. Multistage testing at White Hell is the main factor allowing Nokian winter tires to demonstrate precise handling, excellent grip, extreme road safety and brilliant results in independent tire tests. This year, Nokian Tyres introduced two new premium tires – Nokian Hakkapeliitta 9 and Nokian Hakkapeliitta 9 SUV for powerful off-road vehicles. Our revolutionary double stud concept Eco Stud 9 provides excellent longitudinal grip and supreme lateral grip on winter roads. An innovative rubber compound and special tread pattern significantly improve driving comfort, while low rolling resistance reduces fuel consumption. Another advantage is the extended Hakka Guarantée for Nokian premium tires purchased at Vianor tire centers. In case of accidental tire damage, your tire will be repaired. If repair is impossible, we will replace your tire free of charge up to one year from the period of Hakka Guarantée activation. Such support is very necessary on our roads.

2017 in review: looking forward to the next quarter of a century Andy Hunder, President of the American Chamber of Commerce in Ukraine

spheres. We established new mechanisms of cooperation with major law enforcement bodies – Prosecutor General’s Office of Ukraine, National Police of Ukraine, and Security Service of Ukraine – and actively participated in the National Reforms Council.

2017 was a very special year for the members of the American Chamber of Commerce in Ukraine as we celebrated our silver jubilee – 25th anniversary. The Chamber was founded in 1992 and has grown from strength to strength over the past quarter of a century serving our members and the business community in Ukraine.

2017: A year of growth for Chamber members 2017 has been a year of growth for the majority of our Members. The economy is picking up. We’re seeing GDP growth around 2.2%. Still a modest indicator, but, for sure, a positive change in the trajectory of the economy. We are anticipating continued growth next year. In 2017 the American Chamber of Commerce in Ukraine signed up 73 new Members. Represented by 30 Committees and Working Groups, the Chamber organized 1.190 B2G and 100 B2B events, and achieved 72 Chamber-driven policy successes in different

Understanding the crucial need to move the country forward, we have been tirelessly promoting Ukraine and reforms in the country worldwide through cooperation with the U.S. Embassy and Washingtonbased institutions, holding 23 High-level meetings with U.S. Ambassador to Ukraine Marie Yovanovitch, 22 High-level meetings with U.S. Officials and 53 joint events with U.S. Embassy, getting the voice of business across. We still have a lot to do in order to make Ukraine a place where investors want to come and set up business.

What’s on the agenda for 2018?

What do we need to do to achieve economic growth in Ukraine? The answer is simple – it is, above all, Foreign Direct Investment. FDI is, without doubt, key to Ukraine’s sustainable economic growth and should be the basis for the rapid economic recovery. Attracting FDI should be one of the highest priorities for 2018. The continuation of the IMF program in Ukraine is vital for investors already operating here and for potential investors eyeing Ukraine to make investments. The headquarters of international companies are closely monitoring what is happening in Ukraine. Sustainable economic growth is exactly what they are looking for. So, we’re looking forward to the support of the IMF to achieve further economic growth. In this context, it is crucial to support the protection of investors’ rights through full-scale

judicial reform to make investors feel safe here. Investors need to be sure that their contracts are enforced, and their assets and property won’t be stolen from them.

For 2018 we see our mission in continuing to help the Government to push reforms forward, as we do not have a right to step back. Ukraine can implement a number of much-needed reforms, but if widespread corruption prevails – all our efforts are in vain. Quoting the words of U.S. Secretary of State Rex Tillerson: “It serves no purpose for Ukraine to fight for its body in Donbas if it loses its soul to corruption. Anticorruption institutions must be supported, resourced, and defended.” Eliminating corruption is key to achieving stability, security, and prosperity for all Ukrainians. The American Chamber of Commerce in Ukraine will continue to be a driver of positive changes with regard to doing business, cooperate with the Government at the highest level to push reforms forward and do our best promoting Ukraine internationally as an attractive investment destination. We were, we are, and we will be fighting for the betterment of the business environment, because Ukraine’s future depends on this. Looking forward to the next quarter of a century.

celebrates record year

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infrastructure

Kharkiv International Airport

Kharkiv International Airport welcomed a record number of passengers in 2017, establishing a new annual high as the airport continues its robust recovery from the lows of 2014-15. The airport experienced strong passenger growth throughout the year, setting new monthly records and surpassing the impressive figures posted by Ukraine’s air travel sector as a whole.

East Ukraine’s Busiest Airport

According to preliminary figures, Kharkiv International Airport’s overall passenger total for 2017 will be 805,000 people, representing a 34% increase on the figure for 2016. This makes Kharkiv the busiest air hub in eastern Ukraine and among the country’s top five airports in terms of passenger volumes. The sharp rise in the number of passengers using Kharkiv International Airport outpaces the growth figures released by the Ukrainian aviation industry for the country as a whole. According to end-ofyear statistics made public by Ukraine’s State Aviation Authority, passenger traffic at the country’s airports rose by 29.6% year-onyear for the period January-November 2017, or around 15% lower on average than the increase registered in Kharkiv.

Euro 2012 Infrastructure Upgrade

The strong performance of Kharkiv International Airport reflects the improving regional economic outlook in eastern Ukraine and is particularly welcome news for Oleksandr Yaroslavsky, who invested over USD 100 million into the complete reconstruction of the airport complex as part of Kharkiv’s preparations for Euro 2012. This overhaul included the construction of two new termi46

nal buildings and the restoration of existing terminal facilities, together with a state-backed upgrade of the airfield itself and airport runway facilities. The new-look airport came into operation in 2010 and was one of the infrastructure centerpieces of Ukraine’s Euro 2012 commitments. Kharkiv did not initially feature among Ukraine’s four selected Euro 2012 host cities, but a readiness to engage in major infrastructure improvements such as the redeveloped airport complex played a key role in convincing UEFA officials that Ukraine’s former capital city would be a good choice for the championships. Kharkiv went on to host group stage matches and welcome football fans from across the world, setting a passenger record in June 2012 that would remain in place until May 2017. The events of 2014-15 in Ukraine, together with Kharkiv’s relative proximity to the Donbas conflict zone and the Russian border, inevitably led to a slump in air traffic. Nevertheless, the current positive dynamic was already clearly visible a year ago, with the airport posting a 61% annual increase in passenger numbers for 2016 compared to 2015.

Expanding International Reach

One of the driving forces behind the rising number of passengers passing through Kharkiv International Airport in 2017 has been the airport’s ability to attract new carriers and expand its geographical reach by adding new flight destinations. Landmarks over the past twelve months have included the opening of a daily Kharkiv-Istanbul service operated by Turkey’s national carrier Turkish Airlines. “The opening of a new flight from Kharkiv will

infrastructure

not only improve tourism between both countries but will also facilitate business trips and strengthen economic cooperation,” commented the Turkish Embassy’s Deputy Head of Mission Ozgun Talu during the opening ceremony for the new service on 30 May. This new Istanbul service proved an instant hit with travelers. The Chief Marketing Officer of Turkish Airlines Ahmet Olmustur confirmed reservations for 8000 tickets in the three months prior to the launch of his airline’s daily Kharkiv-Istanbul flights, which is significantly higher than the average level of demand for Turkish Airlines flights from other Ukrainian airports. This popularity led the carrier to increase the planned number of Kharkiv flights from four to seven per week. The arrival of Turkish Airlines means that there are now three daily flights from the eastern Ukrainian capital to Turkey’s largest city, with Pegasus and Atlasjet Ukraine also offering daily services from Kharkiv to Istanbul. The growing international reach of Kharkiv International Airport has also allowed the airport to expand its own catchment area and attract more passengers from surrounding regions of Ukraine. Figures for 2017 point to rising numbers of Ukrainians from Poltava, Dnipro, Sumy, Zaporizhia, Donetsk and Luhansk regions choosing to travel internationally via Kharkiv.

Ambitious 2018 Plans

Kharkiv’s upwards trajectory looks set to continue into 2018 as the airport adds new destinations and welcomes new carriers. Low-cost airline WizzAir has already confirmed new flight services from Kharkiv to Dortmund (Germany) and Katowice (Poland), with tickets currently on sale. Meanwhile, Ukraine’s new low-cost www.bunews.com.ua

airline SkyUp plans to offer new services connecting Kharkiv with Rimini (Italy), Barcelona (Spain), Burgas (Bulgaria), and Larnaca (Cyprus). “All the positive indicators we are now seeing are the result of professionalism and hard work,” comments DCH Group President and Kharkiv International Airport chief investor Oleksandr Yaroslavsky. “I would like to stress that the record numbers we are now seeing are just the beginning. There are plans in place to triple passenger traffic. To achieve this goal, we will continue to introduce new flight services for passengers and to attract new international carriers. Considering the circumstances, the recent performance of Kharkiv International Airport is without equal anywhere in Europe. This is something that is increasingly recognized within the air travel industry, both in Ukraine and internationally.” International recognition of the airport’s performance has been evident since the end of 2016, when Kharkiv International Airport’s impressive annual growth stats earned the airport a place among Europe’s best performers in the “below five million passenger” category from the Airports Council International Europe (ACI Europe). This made Kharkiv only the second Ukrainian air hub to feature in the annual ACI Europe rating. Mr. Yaroslavsky says he expects this year’s indicators to attract further international attention and help fuel the continued development of the airport. “The administration of the airport is constantly moving forward and adapting. I am confident that in 2018 the management of Kharkiv International Airport will succeed in establishing new records.” 47

business

Swedish cleaning service set for 2018 Kyiv launch Assistanspoolen to offer innovative residential services as part of social entrepreneurship initiative Starting in early 2018, residents of the Ukrainian capital will be able to enjoy state-of-the-art Swedish home cleaning services courtesy of new market entrant Assistanspoolen. This Swedish company has an ambitious 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. The Assistanspoolen story began 22 years ago in Sweden, when the family of company owners Carina and Christer Ryder sought to create an enhanced care environment for Carina’s disabled sister Anette that would allow her to lead as fulfilling a life as possible. The company has since expanded its services in Sweden, offering an innovative brand of care for disabled Swedes. Assistanspoolen enjoys access to state support in Sweden, but the company’s business model in Ukraine envisages the launch of services including home and office cleaning along with preschool, nanny and elderly care services that will then help to finance the provision of comprehensive care for disabled Ukrainians.

Scandinavian Service Standards

The first step of Assistanspoolen’s Ukrainian expansion plans will be the launch of home cleaning services in the first months of 2018. The co-author of the company’s cleaning service model in Ukraine is the former owner of the largest Swedish home and office cleaning service, who has helped to create a framework that meets the needs of the Ukrainian market while taking into account the best practices of the contemporary Swedish model. Cleaners will utilize high-tech solutions in order to create tailored digital guidelines for individual homes complete with room-by-room instructions, while clients will be able to provide real-time instructions and communicate any specific requirements digitally. The available technology will even make it possible for homeowners to identify specific items that need particular care or attention. Recruitment is already underway, with an anticipated 100 cleaners expected to complete training at the company’s newly established Ukrainian academy by February 2018. The work of the academy borrows heavily on the company’s more than two decades of experience in Sweden and involves a multifaceted approach to personal and professional development dubbed “Life Leadership”. Ongoing training is a core part of the Assistanspoolen ethos, with cleaning staff participating in an annual cycle of training covering everything from the ethics of client confidentiality to the technical aspects of cleaning things like kitchen appliances. As the company expands the range of services it offers in Ukraine, those who have already qualified as cleaners or academy leaders will have the opportunity to apply for more senior positions within

the company as managers, nannies or care providers. One of the more obvious challenges facing this Swedish arrival on the Ukrainian market will be promoting services in a country where many rely on informal cleaning arrangements to meet their domestic needs. Kyiv has a flourishing shadow industry of cleaners drawn from local communities who often play the role of multipurpose helpers in the homes of middle and upper class families. Assistanspoolen owner Carina Ryder says she is well aware of current local residential cleaning market realities but sees considerable potential demand for the levels of service she aims to provide. “First of all, we are talking about topnotch quality,” she says. In addition to the kind of professionalism her team can offer, Mrs. Ryder also believes that security, reliability and consistency will be important factors. “If you rely on the same cleaner on a regular basis, what happens if they become ill or if their circumstances change in some other way? We are offering a system that takes care of this risk while providing peace of mind. In our model, we can guarantee a consistently high level of quality and reliability whoever comes to clean your home, while also offering the kind of security and peace of mind you’d expect from an experienced international company.”

Social Entrepreneurship

As the Assistanspoolen offer expands in Ukraine, they hope to be able to launch care services for disabled and elderly Ukrainians by mid2018. The social entrepreneurial model adopted by the Swedish company should make it possible to provide care free of charge to the most needy, while also making these services available commercially for those able to afford it. They take the social responsibility and commit 4% of turnover to the non-profit organization AP Care. This is the company’s first experience operating outside of Sweden. Mrs. Ryder says it represents a long-held personal ambition of hers to contribute to the wellbeing of disabled people internationally. The choice of Ukraine was due to preexisting ties between one of her Assistanspoolen colleagues and a Ukrainian charity. Mrs. Ryder first visited the country in late 2016. She says spending time in the homes of families with disabled children proved a distressing experience, while she also took inspiration from the humanity and resilience of the Ukrainians she encountered. “It just feels right,” she reflects. “We like it here and we love the people. It is also only two hours from Stockholm.” Ultimately, Mrs. Ryder hopes their company can play a role in the process of overcoming taboos and helping those with disability to play a fuller role in Ukrainian society. “We would like to help remove the stigma attached to disability that is present in all societies, not just in Ukraine. Sweden is certainly not perfect in this respect, but disability remains a major taboo in today’s Ukraine. We would like to help society deal better with disability. Ukrainians should not feel that they must hide disabled relatives away or send them to foreign countries in order to get the care they require. They should be able to live their lives here in Ukraine without fear or prejudice.”

About the interviewee: Carina Ryder is co-owner of Assistanspoolen

reforms

Fighting corruption by promoting ethical business New Ukrainian initiative seeks to encourage integrity and starve corruption schemes of supply

while respecting the principles of integrity and compliance.” Much like the Business Ombudsman initiative, UNIC has received support from the international donor community. It will initially be two-thirds donor-funded with a gradual transition towards self-financing from membership fees (companies currently pay EUR 300 to EUR 3000 annually depending on their size). In order to gain membership, companies must commit to a range of core principles and complete a detailed integrity self-assessment leading to an annual ethics implementation plan.

Anti-Corruption as Marketing Tool

About the interviewee: Algirdas Semeta is Ukraine’s Business Ombudsman Most observers agree that Ukraine is losing the fight against the country’s culture of corruption. Despite two post-Soviet revolutions fueled by public outrage over corrupt rule, the problems of endemic graft and abuse of office remain as current as ever as Ukraine approaches the fourth anniversary of the most recent Maidan uprising. Indeed, many believe Ukraine is currently embroiled in a full-scale counter-revolution, with modest anti-corruption gains since 2014 under attack from political forces tied to enrichment schemes and opaque business practices that have put down deep roots within the country’s institutional architecture. With many of the officials responsible for anti-corruption implementation also among those who stand to lose the most, hopes of a clean break with the corrupt past are fading fast.

Time to Stop Facilitating Corruption

A new initiative is seeking to break this vicious circle by helping individual companies opt out of corrupt practices voluntarily, while at the same time empowering the public to vote with their wallets and support ethical businesses. Launched in October, the Ukrainian Network of Integrity and Compliance (UNIC) is the brainchild of Ukraine’s Business Ombudsman Algirdas Semeta. He sees it as a way of enabling and incentivizing ethical conduct while targeting the somewhat neglected supply side of the corruption equation. “In highly corrupt countries, it is not enough to act exclusively on the demand side of corruption via targeted legislation. There is also a strong need to act on the supply side of corruption and address those who provide the illicit payments that facilitate corruption. The best way to approach this is to bring together companies willing to commit to ethical standards.” Membership so far stands at fifty companies, with Mr. Semeta confident this number will continue to rise in the coming months. “Our ultimate goal is to unite a critical mass of companies committed to meeting business integrity standards. In my role as Business Ombudsman, I often meet CEOs who talk about the need to draw a line under the era where business activity in Ukraine was almost impossible without some kind of involvement in corruption. They want to open a new chapter where companies are able to operate successfully 50

One of the key selling points of the UNIC model is the prospect of securing certification and the right to use the UNIC brand for marketing purposes, allowing the public and fellow businesses to show their support for the principles UNIC represents. Certification will only be attainable following a rigorous audit and will be subject to regular monitoring, but Mr. Semeta is confident that the advantages will be worth the effort. “The experience of other countries with similar initiatives shows this ethical status helps to increase sales. It is reasonable to expect a consumer faced with a choice between three similar products to choose the one with the anti-corruption brand association. That makes it an attractive instrument for potential new members.” As well as the prospect of improved sales thanks to the anti-corruption credentials provided by UNIC brand associations, Mr. Semeta points to a number of additional advantages member companies can expect to enjoy. The organization will offer practical insights into ethical conduct with an emphasis on implementation. Initial examples include a standardized “prohibited practices” text developed by UNIC that can be included in labor contracts to minimize a company’s exposure to in-house corruption. Member companies will share best practices and host seminars on different aspects of implementation. This educational aspect plays a vital role in the broader UNIC vision as many Ukrainian companies currently lack the requisite knowledge to translate a broad commitment to business integrity into results on the ground. “We want this initiative to be as practical as possible,” says Mr. Semeta. “At the regional level especially, our research has found that even those companies who talk enthusiastically about integrity do not always know what it means in practice. A standardized approach and concrete case studies will help companies to adopt a more ethical approach.”

Making Integrity Fashionable

As Ukraine’s Business Ombudsman, Mr. Semeta is under no illusions as to the scale of the corruption challenge facing the country. While he argues that facilitating corruption actually creates a range of risks and inefficiencies for individual businesses, he recognizes that for many Ukrainian companies it remains a part of everyday life. His hope is that UNIC can help to highlight the potential advantages of ethical business and encourage a gradual shift in thinking throughout the Ukrainian business community. “We are realists,” he says. “We do not expect things to change overnight. However, little by little, as positive stories start to emerge of companies achieving success thanks to adherence to the principles promoted by UNIC, we will be able to enlarge this network to reach a critical mass. This will help to make it fashionable for Ukrainian businesses to act with integrity and compliance.”

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it industry

Kyiv’s next global IT success story? Data analytics company .io technologies looks to build on burgeoning international reputation echoed British WWII leader Winston Churchill’s famous exhortation: “I have nothing to offer but blood, toil, tears and sweat.” It also provided insight into a worldview rooted in the idea that anything is possible through dedication. “My whole life, I was told that ‘everything will always be bad because everything has always been bad’. I now realize that it’s possible to make your own way in life,” he says.

IT Innovation Experience

About the interviewee: Den Golotyuk is co-founder of .io Ukraine’s global branding has suffered in recent years thanks to persistent gloomy headlines in much of the international press. Whether it be the war in the Donbas, corruption, or parliamentary punch-ups, positive news about Ukraine often goes unheard. Against this grim backdrop, one regular source of good news is the country’s IT industry. Consistently ranked as an emerging global IT industry leader, Ukraine’s pool of ambitious and highly educated young professionals has created a plethora of companies determined to achieve success. In the process, they are challenging negative stereotypes about the country and re-branding Ukraine’s image for the better. Ukrainian startups like Mobalytics and Sixe, which offer cyber sports and cloud sharing services respectively, have already received multi-million dollar investments in 2017. There are hundreds if not thousands of other teams seeking to emulate their success. Another startup launching itself onto the world stage that has already established a unique brand and reputation for itself is .io technologies.

Simplified Data

Founded in 2015, .io technologies is a US based data analytics company with its R&D department based in Kyiv. It develops analytics tools for media and e-commerce projects across the world. Several major international brand names already use .io’s tools including the UK’s Express Group, along with global media giants like Bauer Xcel and CNN. Simple to use but incredibly detailed, .io technologies’ data dashboards are at the absolute cutting edge of the industry and, combined with an emphasis on customer service, the company has huge potential for significant expansion on global markets.

Optimistic Outlook

For .io technologies’ co-founder, Den Golotyuk, the watchword driving his company’s success is optimism. It is a trait he has gained a reputation for among his peers in the vibrant Ukrainian tech sector. A Churchillian letter Golotyuk wrote to his staff after receiving a substantial (and still confidential) investment went viral recently amongst the Ukrainian startup community, highlighting the importance he places on inspiring his team to go the extra mile. Reminding colleagues that with more opportunity comes greater difficulty, Golotyuk’s letter promised harder work and greater challenges. This 52

Born in Kyiv amidst the final death throes of the Soviet Union, Golotyuk attended several schools and had a particular focus on mathematics, while also finding time for tango classes. After studying at Kyiv Polytechnic Institute, which he describes as “desolate and rotten to the core,” Golotyuk worked in outsourcing for several years before creating one of Ukraine’s IT giants. “From 2008 to 2015 I was at Genesis. I had the unique and unrepeatable experience of building a company. Beginning with three people in a shabby apartment, the company grew to 300 staff in five offices around the world. It was a real period of growth and learning.” This experience also helped sow the seeds for his current work. “At Genesis, I spent a lot of time working with data. For the first three years, we were literally rubbish, mindlessly copying the decisions and processes of other companies. Then we realized that it was time to think for ourselves. The analytical phase began.”

Education, Education, Education

Since its founding, .io has grown rapidly. Starting out with a small team all personally known to one another, .io now has a staff of 50 together with a brand new office inspired by Silicone Valley and ambitious plans for further expansion. The company’s success owes as much to its philosophy as it does to professionalism. Anybody who joins rapidly familiarizes themselves with the company’s mantra of personal education and development. Everyone, from new employees to Golotyuk himself, must be studying at least three books or courses at any given time. This emphasis on education has produced a highly ambitious team motivated to succeed through both personal and professional development. “The most important advantage of .io is the team and culture we have fostered,” says Golotyuk. “Everything else, such as our product, our support and our sales, all derive from the people who work here. We absorb new tasks and opportunities like a big sponge.” This ability to embrace new thinking has allowed .io to position itself as an attractive debutant on the international data analytics scene, garnering the attention of suitors despite a crowded marketplace of competitors. In this context, Golotyuk’s infectious optimism is understandable. Nor is this positive outlook limited to his perceptions of his own company. Golotyuk shares this sentiment when speaking about Ukraine too, despite the fact that the country is often criticized for suffering from an overly negative mindset. “I don’t actually think there is anything wrong with the mindset in Ukraine,” he reflects. “It is a young country. We will have a bright future. We just need to work hard and try to apply ourselves. A mindset is something that must develop over time. We are all people. We all have fears and doubts, and we all deceive ourselves sometimes, but deep inside, we are all as pure and sincere as children. You need to remember to listen to your heart.”

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Hotel group plans 2018 regional expansion Carlson Rezidor Hotel Group hopes for progress on regional projects as guests return to Ukraine of quiet optimism. Mr. Henriksen says his hotel group shares this positive outlook and is looking to make progress on a number of regional Ukrainian expansion initiatives in 2018, with Odesa and Lviv the top priorities. The Black Sea port city in particular has long attracted interest from a host of major international hotel groups. Carlson Rezidor Hotel Group have plans in place for Odesa and are assessing opportunities for Lviv. Mr. Henriksen believes the expansion of international hotel chains in Ukraine will help to fuel further investment in the country, creating a sense of familiarity and reassurance for business visitors that will bolster Ukraine’s own brand. “If you want to attract people to new destinations, you need branded hotels that they are able to recognize. Investors in particular appreciate the sense of security this creates. It sends out a powerful message that global brands are already present and it is safe to proceed.”

Connecting Kyiv

About the interviewee: Jesper Henriksen is the Kyiv City Director for Carlson Rezidor Hotel Group Hotel manager Jesper Henriksen has only been in Kyiv for just over half a year, but he has already noticed some positive trends in the Ukrainian capital city’s hotel sector that he believes bode well for the future of the Ukrainian economy as a whole. As Kyiv City Director for Carlson Rezidor Hotel Group, Mr. Henriksen oversees Kyiv’s two Radisson Blu hotels and the recently opened 196room Park Inn by Radisson Kyiv Troyitska Hotel close to the Olympic Stadium Complex. He says rising occupancy rates at these three venues mirror broader trends evident across the Kyiv hotel industry, and argues that as tourist traffic is still at low levels, increased occupancy reflects growing business interest in Ukraine. “2017 has been a breakthrough year for the Kyiv hotel sector, with occupancy rates climbing from around 45% up to 55%. As tourism is not yet a major factor for Kyiv hotels in the traditional sense, we can assume that the vast majority of this extra 10% of visitors are business travelers. This is a clear trend pointing to Ukraine’s emergence as an international investment destination. If people are making the journey to Ukraine, they obviously intend to do business here.”

Odesa and Lviv Ambitions

The recent spike in Kyiv business travel arrivals is even more striking given the low point reached in 2014 when revolution and war wrought chaos throughout the Ukrainian economy and left most hotels in the capital city operating at below 25% occupancy. The subsequent recovery of the Ukrainian hospitality industry has been steady if unspectacular, with a number of new Kyiv hotel openings in 2017 reflecting a growing mood 54

While Lviv and Odesa are both earning reputations as emerging international tourism destinations, Mr. Henriksen believes much more needs to be done in order to make the most of the Ukrainian capital city’s own tourism appeal. The success of the Eurovision Song Contest in May 2017 served to highlight Kyiv’s tourism credentials, with visiting journalists offering rave reviews. Nevertheless, limited connections and an absence of brand recognition are preventing Kyiv from occupying its natural position as a major East European destination. “Kyiv has huge potential. There is more than enough on offer, from wonderful sightseeing and strolling to the vibrant restaurant scene, but the city must learn to market itself to international audiences,” says Mr. Henriksen. He is critical of the lack of cheap flights connecting Kyiv to the rest of Europe – a factor that serves to undermine the positive appeal of the low costs on offer in the Ukrainian capital itself. “City breaks are now one of the most popular types of tourism among European travelers, with many people taking five or six such trips per year. When you are travelling so often, you do not want to be spending hundreds of euros on every airline ticket you purchase and this becomes a major factor when you are looking at potential destinations. Kyiv needs to attract far more budget airlines in order to allow visitors to come for a few days and enjoy the city. This is probably the single biggest challenge the Kyiv tourism industry faces today.” Kyiv will have a wonderful opportunity to promote itself in spring 2018 when the city plays host to the UEFA Champions League Final. This showpiece match of the annual international club football calendar is coming to the Ukrainian capital for the first time. The event will likely attract upwards of 100,000 visitors along with thousands of VIP guests and the world’s media. Like his colleagues in the Kyiv hotel sector, Mr. Henriksen expects to experience a healthy Champions League business boost in the second half of May 2018, but he is more encouraged by the implications for the longer-term development of the Ukrainian capital city’s tourism sector. “The Champions League Final is a great business generator, but more importantly, it will boost the positive image of Kyiv among international audiences. This is exactly what the city needs right now.”

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.

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plays host to international politicians

Businessman Oleksandr Yaroslavsky has made no secret of the fact that he regards the Premier Palace Hotel Kharkiv as his favorite child. The business magnate, who has interests in a diverse range of sectors, invested an estimated USD 126 million into the construction of the hotel. It now looks as if his investment is paying off. American publication U.S. News & World Report ranked the hotel as Ukraine’s fourth best in 2016, while in 2017 it has enhanced its regional reputation further by hosting a string of international political heavyweights.

Giuliani Checks In

Former New York Mayor Rudolf Giuliani checked in to the Premier Palace Hotel Kharkiv on 20 November when he arrived in eastern Ukraine’s largest city for meetings focusing on security. Giuliani, who remains a prominent figure in the US Republican Party and serves as an advisor to US President Donald Trump, is currently involved in cybersecurity issues. The former Big Apple mayor was enthusiastic about the warm welcome he received in Kharkiv, sharing positive first impressions of the city and commenting on the quality of the five-star hotel where he is staying. Giuliani was particularly pleased to encounter a familiar sight in the Premier Palace lobby – the leather jacket worn by his friend Arnold Schwarzenegger in the Terminator movies. “Did you know this jacket belongs to my good friend? I went to this movie!” he told reporters. This iconic piece of Hollywood history is fast becoming something of a Kharkiv tourist attraction in its own right. It arrived in the city after Premier Palace Hotel Kharkiv owner Yaroslavsky purchased it for USD 350,000 at a charwww.bunews.com.ua

industry

Five-star Premier Palace Hotel Kharkiv

ity auction in 2016 held in honor of Ukrainian boxing legend Wladimir Klitschko’s fortieth birthday.

Hosting Heads of State

The President of Poland was the next international politician at the Premier Palace Hotel Kharkiv. Polish President Andrzej Duda met with Ukrainian President Petro Poroshenko at the hotel to discuss security issues as Warsaw prepared for a two-year role as a non-permanent member of the United Nations Security Council beginning in early 2018. President Duda was not the first visiting head of state hosted by the hotel in the past twelve months. In June 2017, the Premier Palace Hotel Kharkiv served as the venue for a meeting between President Poroshenko and Lithuanian President Dalia Grybauskaite.

Fruit of Euro 2012

The Premier Palace Hotel Kharkiv is a relatively new addition to the city’s downtown skyline. Construction of the hotel took place in record time as the east Ukrainian city prepared to serve as one of Ukraine’s four designated host cities at the UEFA Euro 2012 football championships. Kharkiv needed a suitably international-quality five-star hotel in order to meet UEFA conditions and qualify as a host city, making it one of the centerpieces of Oleksandr Yaroslavsky’s Euro 2012 investments. Kharkiv was not initially favored for selection as one of Ukraine’s four host cities but was able to impress UEFA officials sufficiently to join Kyiv, Lviv and Donetsk on the list. 57

legal

Ukrainian builders and international contracts

FIDIC contracts can help implement international standards in the Ukrainian construction industry FIDIC is the International Federation of Consulting Engineers founded in 1913. It publishes international standard forms of contracts for works and for clients, consultants, sub-consultants, joint ventures and representatives, together with related materials such as standard pre-qualification forms. FIDIC contracts differ from those usually used in Ukraine for construction projects. However, foreign investors and contractors are familiar with FIDIC contracts and are now actively lobbying for their use in Ukraine. FIDIC contracts have already featured in a number of Ukrainian projects financed by foreign banks and international financial institutions such as the European Bank for Reconstruction and Development, the European Investment Bank, and the World Bank. This activity has largely focused on the energy, transport and municipal infrastructure sectors. The Ukrainian authorities have also become FIDIC advocates in recent years. Minister of Infrastructure Omelyan announced in 2016 that the use of FIDIC contracts in road construction would help facilitate higher quality and greater cost control. The Ukrainian Sea Port Authority has recently started to introduce FIDIC contracts into its projects such as dredging work at Yuzhny Port. Most of Ukraine’s existing experience with FIDIC methodology relates to highway construction projects. Reconstruction work on parts of the Kyiv-Kharkiv highway and Kyiv-Chop highway featured FIDIC contracts. This initial experience with FIDIC contracts has helped to identify a number of challenges presented by the increasing use of FIDIC regulations in Ukraine.

Project Paperwork

The very first impression from starting work with FIDIC contracts is their significant volume. A typical FIDIC contract consists of general and particular conditions, with the volume of the former alone often running to around 100 pages. Meanwhile, the particular conditions further amend or supplement the general conditions, often taking into account the specifics of the Ukrainian legal framework. In addition to this, even a midscale construction contract usually includes a number of annexes totaling hundreds of pages with tender, technical and other details. As the project progresses, the volume of documentation increases significantly. Correspondence between the various parties may generate thousands of pages. The management of so many documents requires special skills and knowledge. Otherwise, failure to meet various deadlines, preconditions and other FIDIC contract requirements will usually lead to additional costs, project delays and in many cases will ultimately result in complex legal disputes.

Engineer Authority

The most recognizable feature of FIDIC contracts is the highly specific role of engineers in the construction project. This is usually a special company with a qualified staff. Even though the engineering group may not be a party to the contract, they perform a number of crucial functions such as monitoring quality control and work acceptance, as well as considering complaints and making decisions on various other issues. This is in stark contrast to standard practice in the Ukrainian construction industry. The functions of FIDIC engineers overlap with the

authority of a number of state institutions. In order to address the legislative gap highlighted by the lack of accommodation for the FIDIC engineer role in Ukraine, the Cabinet of Ministers of Ukraine adopted a resolution in December 2016 introducing the notion of a “consulting engineer” into the Ukrainian legal framework. However, this resolution exclusively relates to road construction and is merely the first step. It actually raises more questions than it answers in terms of the FIDIC engineer role under Ukrainian law. Furthermore, on 8 November 2017, the government amended the resolution by substantially limiting the scope of its application. Thanks to these amendments, we are unlikely to see substantial reforms even in the road construction industry, which used to be a regarded as a pioneer for FIDIC in Ukraine.

Double Accounting

Ukraine’s mandatory forms for calculation of work value and their acceptance do not fit into the budgeting and work acceptance procedures stipulated under FIDIC. This might require the parties to perform “double accounting”, for themselves under FIDIC contract requirements and then in line with Ukrainian law requirements.

Extension Inflexibility

It is often the case that a construction project requires adjustments in time or costs. FIDIC conditions are well equipped for dealing with such issues, while this is not the case for Ukrainian public procurement rules. The employer in the kind of large-scale infrastructure projects which FIDIC is typically used for is usually a state authority. This means that any adjustments of time and pricing are very limited. Consequently, the employer may not be able to accept even reasonable requests for extensions of time or additional costs, regardless of whether the engineer independently backs these requests. This leaves the contractor no other option but to proceed with legal claims against the employer.

Dispute Resolution

Default FIDIC conditions provide a three-tier dispute resolution clause. First, the engineer rules on disputable issues. The “DAB” (Dispute Adjudication Board) is the second tier and is the forum where parties can contest the engineer’s decisions. The DAB is usually composed of three persons, with the majority being engineers rather than lawyers. Finally, any of the parties not satisfied by the DAB’s decision may appeal for international commercial arbitration. Obviously, Ukrainian practice, and in particular the Ukrainian law enforcement system, is not familiar with this kind of procedure for resolving disputes. However, this approach has proven an efficient way to achieve construction dispute settlement in a number of countries.

Attracting Investment

FIDIC contracts are featuring more and more in large-scale construction projects in Ukraine. The participants of any projects featuring FIDIC contracts need to make sure they are well prepared to meet a number challenges in the structuring and management of their work. Making Ukrainian law more “FIDIC friendly” will not only help make implementation of ongoing construction projects smoother – it could also facilitate investment into the infrastructure sector of Ukraine. However, implementation requires care and attention.

About the author: Volodymyr Yaremko is a senior lawyer at Sayenko Kharenko law firm

Asian markets often huge growth potential as Ukrainian exporters broaden their global horizons

trade

Ukrainian companies eye India expansion The geopolitical implications of Ukraine’s Association Agreement with the European Union have dominated the headlines in recent years, but many Ukrainian companies are discovering even greater opportunities in eastwards expansion. Asia offers Ukrainian businesses the chance to tap into some of the world’s fastest-growing economies while boasting expanding populations eager to benefit from Ukraine’s agricultural wealth and high tech knowhow.

Indian Opportunities

India emerged as the largest single market for Ukrainian agricultural products in the first ten months of 2017, accounting for over 11% of all Ukrainian agricultural exports with a value of around USD 1.5 billion. In second place was Egypt, accounting for a 7.5% share, while the largest European export market was the Netherlands, which received 6.9% of Ukraine’s agricultural exports over the same period. This trend towards Asian and African markets highlights the broadening global horizons of Ukrainian agribusinesses, while also emphasizing the potential offered by vast Asian markets such as emerging economic superpower India. Ukraine ranks among the world’s leading exporters of sunflower oil, maize and wheat, with India already receiving around one-third of Ukraine’s sunflower oil exports. Ukraine’s share of the Indian market rose approximately 10% over the past year and now accounts for 39.4% of Indian sunflower oil imports. Many market observers believe this trend will strengthen in the coming years. Ukraine’s increasingly impressive Asian export figures have attracted the attention of government officials charged with promoting Ukrainian exports on global markets, leading to a major trade mission to India in early autumn 2018. The mission, which was organized by Ukraine’s Export Promotion Office and sponsored by the Western NIS Enterprise Fund (WNISEF), visited New Delhi and Mumbai. Ukraine’s Deputy Minister for Economic Trade and Development Nataliya Mykolska and Deputy Minister for Agrarian Policy Olha Trofimtseva led a large delegation of Ukrainian officials and representatives of individual companies in a host of governmental and B2B meetings. This trade mission reflects the proactive approach adopted by Ukraine in the wake of the 2014 Revolution of Dignity. The country’s recently established Export Promotion Office has been at the forefront of this process, coordinating a series of similar missions globally in a bid to open up new markets and move beyond the relatively narrow confines of the former Soviet sphere. WNISEF export promotion manager Vitaliy Bigdai sees the India mission as a demonstration of Ukraine’s newfound willingness to take the initiative in promoting itself as an international trade partner. “We often hear people say ‘the world is not waiting for Ukraine.’ In the case of the trade mission to India, we demonstrated an appreciation of this fact and showed our readiness to visit the market and explore while listening and learning from new contacts.” India is likely to remain high on the list of priorities among Ukraine’s export promotion pioneers for some time to come. Mr. Bigdai notes that India is currently Ukraine’s third largest export market after the EU and Russia, with Ukrainian exports focusing on raw materials and commodities. “Given India’s population of 1.3 billion and rising standards of living, the country represents a market of great untapped potential for Ukrainian manufacturers and service providers. There is huge immediate potential for increased exports in the agricultural and processed food sectors, as well as machine building and manufacturing. There is also great potential for Ukrainian exporters to build market share in India’s consumer goods market by offering high quality and www.bunews.com.ua

affordable goods.” Mr. Bigdai believes the India outreach initiative demonstrated the value of Ukrainian government and private sector cooperation but also stressed the importance of a case-by-case approach that recognizes the nuances and peculiarities of every individual export market. “I believe the India trade mission can serve as an excellent example of the possibilities when we have the public and private sectors working together to promote Ukrainian economic interests abroad. However, in order to maximize our potential in any foreign market, we must first take time to understand the specifics of the market including the local needs and business practices, while also looking to identify our own competitive advantages. This requires time, effort, and a long-term commitment on the part of both government and the private sector. The opportunities for success are there for the taking.”

Learning Curve

Such trade missions represent a real-time learning curve for Ukraine’s exporters themselves, many of whom are eagerly seeking out new markets in the wake of geopolitical realities that have restricted access to the formerly dominant Russian market. Andy Kozlov, who is Sales and Marketing Director at privately owned Ukrainian research and development company R&S Quantum, was part of the trade delegation that made the trip to India. He welcomes greater government promotional efforts of this nature, both for the direct networking benefits they can bring and for the longer-term insights they provide into competing on global markets. “The more foreign trade missions we take part in with the Export Promotion Office, the more insights we gain into boosting Ukraine as a brand and assisting other Ukrainian exporters with life hacks when it comes to engaging customers outside of Ukraine. After brainstorming with our fellow Ukrainian exporters, we have realized that we have to start monitoring online tendering platforms like the EU’s TED. We have not yet had any successful bids, but we are confident that investing in this learning curve will position us as a key private sector authority on foreign tenders in Ukraine, especially when it comes to high-value, high tech exports from Ukraine.” 59

Reform Review Can Ukraine get back on track in 2018? This progress was somewhat undermined by setbacks elsewhere, with the IMF refusing to release a scheduled USD 1.9 billion tranche due to Ukraine’s failure to meet anti-corruption and economic reform obligations. In a bestcase scenario, Ukraine will receive these IMF funds in the second quarter of 2018. Citing the same concerns, the European Commission also refused to deliver the planned third and final EUR 600 million tranche of the current macro-financial assistance program in December 2017. This tough love stance on the part of the IMF and the EU won considerable support from reformist circles and Ukrainian civil society, with many arguing that rendering assistance regardless of Ukraine’s reform progress would send dangerous signals to the Ukrainian authorities. Many Ukrainian anti-corruption activists hope additional international funding will not be forthcoming until Ukraine is able to demonstrate genuine reform progress.

Anti-Corruption Agencies Under Attack

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 As we look back over the past twelve months, it is clear that 2017 was the year when Ukraine’s gradual post-Maidan reform slowdown gave way to outright reform rollback. Key political forces sought to push back against reform progress made since 2014, while President Poroshenko continued the process of consolidating his influence and strengthening his power vertical, leaving Ukrainian society faced with new levels of uncertainty and political populism. Nevertheless, thanks to the joint efforts of civil society, progressive elements within both parliament and government, and the country’s international partners, Ukraine was still able to make tangible progress in a number of reform areas during 2017. The big question now is which of these two tendencies will prevail over the coming year.

International Displeasure Proves Expensive For Ukraine

On the international stage, Ukraine secured a number of headline-grabbing reform-related successes in 2017, but also paid a high price for rollbacks. The biggest breakthrough of the year was undoubtedly the advent of visafree travel to the EU, which finally arrived in June 2017. For most Ukrainians, visa-free EU travel is by far the most tangible benefit to come from the country’s European pivot. 60

It says much about the deteriorating reform climate in 2017 that Ukraine’s most fundamental state-building reforms of the past few years were also the ones to suffer the greatest rollbacks. The list is long and inglorious. The verification of state officials’ e-declarations by the NACP (National Agency for the Prevention of Corruption), experienced sabotage. Endless delays disrupted high-profile anti-corruption court cases. Parliament tried to kill off the ProZorro electronic state procurement system. The Chairman of the Parliamentary Committee on Corruption lost his post on seemingly politically motivated grounds, while government pressure on anti-corruption actors intensified with a range of new tactics including mandatory e-declarations, defamation campaigns and physical violence. The centerpiece of this apparent counter-revolution was the campaign against the National Anti-Corruption Bureau of Ukraine (NABU). This involved attempts to limit NABU authority, efforts to appoint a government loyalist NABU auditor, and the exposure of NABU undercover agents. At times, the confrontation resembled a war between Ukraine’s existing law enforcement agencies and the newly formed NABU. This unprecedented attack on anti-corruption efforts provoked a strong reaction from Ukraine’s G7 international partners and sparked a steady flow of negative coverage in the Western media. International outrage was enough to ward off the most recent parliamentary attack on NABU independence in December 2017, but many observers expect the campaign against Ukraine’s fledgling anti-corruption authorities to resume in early 2018.

Decentralization Dividends

Domestically, one of Ukraine’s most successful post-Maidan reforms has been the decentralization process. This has seen greater authority pass from Kyiv to regional and district authorities, with more budget revenues now remaining at the local level. This process has involved the amalgamation of small and often rural communities into larger administrative units, with greater local accountability coming in tandem with better access to state funds. By the beginning of 2018, 665 individual communities had amalgamated and conducted elections, giving them access to broader administrative

Public Broadcaster Progress

Another encouraging but incomplete reform success in 2017 was the establishment of a public broadcasting company funded from the state budget. This creates the potential for the emergence of politically neutral media in Ukraine at a time when the country’s mainstream media outlets remain under the control of a handful of oligarch owners. Ukraine’s planned public broadcasting company registered as a legal entity in 2017 and elected a board. However, despite strong international support for the public broadcaster initiative, it received just 50% of the minimum state funding necessary to operate. Many experts saw this financial shortfall as an attempt to exert pressure on the editorial independence of the fledgling public broadcaster. The saga will continue in 2018.

Healthcare Package Adopted

One of the most high-profile reform successes of 2017 was the passing by parliament of a healthcare reform package championed by Acting Health Minister Ulana Suprun. This package envisages financial incentives for better quality healthcare, with patients able to choose doctors in line with the principle “the money follows the patient”. The package aims to create a more transparent medical services market and stimulate competition among doctors, with patients set to be the ultimate beneficiaries of improved healthcare. The bill underwent considerable reworking prior to adoption by parliament and significant resistance remains to this initiative, both within the healthcare system and among political groupings. This makes healthcare one of the key sectors to monitor in 2018 for signs of renewed reform rollbacks.

Courts Unable to Command Confidence

In late 2017, Ukraine welcomed a new Supreme Court consisting of 114 judges. Problems with this new body were immediately apparent when civil society watchdogs identified 25 of these new judges as having tainted backgrounds. However, some would argue that this represents progress when compared to the composition of the previous Supreme Court. It is also worth noting that for the first time since Ukraine gained independence in 1991, the selection process for the Supreme Court was open and included the involvement of a public control body. Elsewhere in the sphere of judicial reform, there was little progress on the key demand to create a special anti-corruption court. Meanwhile, the largest backwards step in the fight for a functioning judiciary was the new Law on the Constitutional Court of Ukraine, which eliminated the competitive selection of judges and deepened the crisis of public trust in the judiciary.

Privatization Prospects and Administrative Abuses

Ukraine enters 2018 with talk once again turning to the prospects for a successful round of privatizations. While widely perceived as a potential game changer in terms of international investment, Ukraine has repeatedly failed to get its privatization bandwagon up and running. A new privatization law passed its first reading in late 2017, raising hopes that this time things might be different. If confirmed, the new law will increase transparency, minimize www.bunews.com.ua

pricing manipulations and simplify privatization procedures. Elsewhere in the world of international investments, business associations in Ukraine continued to identify corruption and illegal administrative pressure among the key obstacles to investment. Government officials made a number of commitments in late 2017 to reduce the potential scope for raids on offices, with new regulations limiting such search operations and requiring the presence of lawyers. There will be considerable interest in 2018 to see whether these measures prove effective. Meanwhile, the widely criticized tax militia faced abolition in December 2016 but remains operational and actually received budget funding throughout 2017. The creation of its long-awaited replacement, the Financial Investigation Service, remains on hold due to delays blamed on the law enforcement bloc within government and the Presidential Administration.

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and budgetary autonomy. Nevertheless, reformers hope to see further progress on this front in 2018. For example, parliament failed to grant local communities the right to dispose of land plots outside of populated areas in 2017, leaving this issue in the hands of local state administrations that tend to lack the confidence and trust of their constituencies.

2018 Priorities

The developments highlighted in this article offer some insight into Ukraine’s key reform priorities for 2018. Few would disagree that judicial reform remains the most urgent item on the entire reform agenda, with the establishment of an anti-corruption court based on the Venice Commission’s recommendations being the most important challenge. The coming year should also see further overhauls of the country’s existing courts in order to improve public trust in this branch of the state, which is currently among the lowest in the entire world. Meanwhile, in order to prevent any backsliding on the limited progress made since 2014, NABU must receive safeguards against further attacks on its activities and pressure on civil society actors must cease. On the economic side of the reform agenda, it is crucial to fully adopt the new privatization law, create legal conditions for a competitive land market, establish a Financial Investigation Service, and eliminate illegal administrative pressure on business. These reforms would go a long way to improving the business climate and, together with the emergence of a functioning judiciary, would serve to attract international investment.

International Pressure Essential

With 2019 parliamentary and presidential elections already looming large on the horizon, the Ukrainian political agenda over the coming twelve months will be full of populist initiatives that are easy to communicate and that carry the potential to translate into votes. This is unlikely to include potentially painful reforms. Therefore, Ukraine’s international partners will need to make full use of the considerable leverage they currently enjoy in order to prevent a further deterioration of the reform environment. When European Union officials sit down with their Ukrainian colleagues in early 2018 to discuss the potential for a new macro-financial assistance program and its conditions, it will be an opportunity to make sure these conditions are just as stringent as the terms for the previous program. Wherever possible, these conditions can also be coordinated with other international partners, primarily the IMF. This will send a strong message to Ukraine that continued Euro-Atlantic support is not a foregone conclusion. Indeed, this conditionality could also place demands on Ukraine in order to maintain existing gains, with the trump card being visa-free EU travel. This would be very much in line with the messaging currently coming out of Brussels. The European Commission recently reacted to appeals from Ukrainian civil society representatives by reiterating, “EU support is not unconditional.” It is high time for the EU to make it clear to Ukraine’s political elites that they cannot expect to use the rhetoric of European integration in their election campaigns while doing so little in practical terms to promote Ukraine’s alignment with European values. 61

Kyiv Housing Market 2018 Forecast More foreign investors and property funds expected in the Ukrainian capital in coming year

As Ukraine enters 2018, the hopeful signs of nascent economic recovery that we first saw in early 2016 appear to be bearing fruit. Looking forward to the year ahead, there are reasons for further guarded optimism. Economic forecasts for Ukraine project accelerating GDP growth at 3% or more, while numerous indicators point to heightened international interest in the Ukrainian market. With these positive signs in mind, what can we expect from Kyiv’s housing market in 2018? This forecast reviews current trends for Kyiv housing, including pricing for rentals and sales. It also explores the likely political and economic risks for Ukraine over the coming twelve months.

Looking Back at 2017

To quote Quaithe from Game of Thrones, “to go forward, you must 62

go back”. This applies equally to forecasting the future direction of the Kyiv residential real estate market. In late 2017, rental prices for apartments in Kyiv city center in the USD 1,000 to USD 3,000 per month price range began to creep back up since the supply of expatsuitable housing is very tight and many companies have begun to bring in expat employees and mid-level managers for the first time since the steep decline in 2014-2015. At the same time, demand remains relatively soft for premium rentals of USD 5,000 per month and higher. These top category properties are typically appealing to ambassadors and country directors. If the optimistic economic forecasts for Ukraine in 2018 prove accurate, we can expect to see a gradual return of big-budget country managers to Kyiv’s rental housing market over the course of the next year. When these senior managers do return to the market, they will find that Kyiv suffers

Expat Investors Return to the Market

Among foreign buyers in Kyiv, the second half of 2017 marked a decided shift in sentiment and activity. In both 2015 and 2016, interested buyers typically asked brokers: “Have we reached the bottom yet?” In late 2017, the key issue on everybody’s lips was different, with brokers facing the question: “How much longer will these buying opportunities last?” While sales of downtown apartments on Kyiv’s secondary market continue to be relatively soft when compared with 2016, foreign buyer interest and purchases sharply increased in 2017. This general trend is likely to continue to strengthen in 2018. What kind of foreign investors were buying Kyiv apartments in 2017? While the sharp hryvnia devaluation of early 2015 attracted amateurish wannabe vulture investors seeking “fire sales” and quick profits, the foreign buyers currently entering the Kyiv market are typically clear-eyed veteran value-investors. Many have prior experience investing in Central and Eastern Europe and other emerging markets, and take a long-term view towards their investments. They are typically ready to do the hard work necessary to make a success of investing in an emerging market.

Unsold Apartments

What about sales of new apartments on Kyiv’s primary market in 2018? For several reasons, and with few exceptions, Kyiv’s new apartment complexes offer few promising opportunities for foreign investors who are seeking to maximize their returns. Firstly, in all price segments, new apartment buildings in Kyiv come with completely unrenovated apartments, which depresses potential rental yields as few tenants want to live in a construction zone for three to five years. Secondly, few new complexes are located inside the tiny area for premium rental apartments preferred by Kyiv’s expats. According to some accounts, Kyiv had more than 70,000 unsold new apartments by the late summer of 2017. This situation creates the impression of a housing bubble in Kyiv, but is this actually the case? The answer is no. The bulk of these unsold apartments represent budget housing and are located well outside the prime rental area of Kyiv, so they will not depress rents in the premium downtown area. Why are there so many unsold apartments in Kyiv? One big reason is the utter lack of proper market research and planning by Kyiv’s oligopolistic developers prior to construction. This has led to generic, undifferentiated products built without any clear target market in mind. For example, IT is the one of the most dynamic sectors of Kyiv’s economy, but if you are a senior IT developer, who is currently building apartments with you in mind? The answer is nobody.

Elections and External Risks

By the end of 2017, the business headlines for Ukraine were decidedly more upbeat than the political headlines. With elections on the horizon, the coming year may see the country’s political and economic fortunes converge to a greater degree. At any rate, it is a

general rule that enthusiasm among politicians for deep economic reforms generally decreases proportionally as they get closer to the next election cycle. Energy and pension reforms pushed by the IMF would hit pensioners the hardest and Ukrainian politicians have traditionally been reluctant to antagonize these voters, so it would not be surprising if reforms were to slow down in 2018 as politicians look towards 2019 elections. Stalled economic and anti-corruption reforms could undermine EU, US and IMF backing, with IMF support in particular regarded as especially important for maintaining currency exchange rate stability in 2018. The mostly likely scenario is that Ukraine’s current economic growth will continue to accelerate in 2018 based on growing domestic demand, while Ukraine’s politicians will do just enough to retain continued US, EU and IMF support. In terms of external risks to Ukraine’s economy in 2018, we cannot forget about Russia with its unpredictable political culture and interest in an unstable Ukraine. Putin and his supporters will con-

real estate

from a woeful undersupply of high quality three- and four-bedroom apartments that will meet their requirements.

tinue their efforts in 2018 to hold Ukraine down and discourage foreign investment. Nevertheless, there are signs that these scare tactics are losing their power to intimidate investors. In 2017, far fewer potential foreign investors appeared concerned about the situation in the Donbas compared to prior years. Meanwhile, the global economy is again awash in liquidity. The current Bitcoin bubble reminds one of the 1999 Internet bubble and the 2008 housing bubble, but while today’s party will inevitably end at some point, it is uncertain whether this will happen in 2018.

Expect More Investors in 2018

To sum up, in 2018 we can expect an acceleration of the 2017 trends for Kyiv housing. This means increasing numbers of expats seeking rental housing, reducing the supply of available premium housing even further in downtown Kyiv. More and more foreign investors, property funds and big budget buyers will enter Kyiv’s housing market in 2018 in order to address this need. If this were a holiday wish list instead of a forecast, then we would ask Santa to bring a foreign investor with an appetite for risk and a long-term view who would buy a derelict historical building in Kyiv’s downtown, redevelop it as premium residential housing, and start a new trend. We would also ask Santa to help a local developer to discover modern marketing or to bring an enlightened foreign developer to Ukraine’s market and offer homebuyers an innovative housing product based on market research, targeted to a specific market niche, and sold with turnkey renovations instead of unrenovated apartments. While we will probably have to wait far beyond the next twelve months to witness these breakthroughs, 2018 has the makings of being a good year for some specific segments of the Ukrainian capital city’s housing market. With special thanks to Yaroslav Ploshko and Alexander Smirnov at CMS Group for their marketing insights for Kyiv real estate.

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. www.bunews.com.ua

Ukrainian Legal Industry in 2018 Rule of law reforms are top 2018 priority as Ukraine fails to maintain Maidan momentum

It seems that Ukraine’s political and economic traffic lights have been stuck in the yellow position for the past four years following the 2014 Revolution of Dignity. Analysts continue to speculate over whether these traffic lights will turn red or green, and we enter 2018 with no definitive indication of where the country is heading. Recent developments have offered little cause for optimism among those who hoped to see Ukraine break decisively with the past following the events of 2014. Images of crowds attempting to storm Kyiv’s October Palace in midDecember 2017 offered a flashback to the country’s last Maidan uprising and served to highlight the growing mood of popular discontent over the lack of progress towards a more rules-based and law-abiding Ukraine. While there is little evidence of public support for a new mass protest movement, there is a sense of tangible bitterness and anger among many Ukrainians who are tired of watching the nation’s traffic lights stuck on yellow and feel that the chance of a better life is once again slipping from their grasp.

Low Happiness Rating

Ukraine’s poor performance in global happiness surveys illustrates this sense of lost momentum and evaporating opportunity. More and more people now recognize happiness as the most appropriate measure of social progress and 64

the ultimate goal of all public policy. The OECD recently committed itself to redefining traditional growth narratives by putting people’s well-being at the center of government efforts. Some UN officials are also speaking out against what they call “the tyranny of GDP”, arguing that what matters today is the quality of the growth a country experiences. Ukraine does not fare well in such assessments. The country was number 132 out of 155 featured nations in the 2017 World Happiness Report, alongside the likes of Cambodia, Sudan and Burkino Faso. This is a marked decline from Ukraine’s position a decade ago. In the global pursuit of happiness, Ukrainians are in danger of losing out entirely. Nor does a reliance on less subjective GDP figures present a rosier picture. Ukraine has succeeded in reversing the steep GDP drops of 2014 and 2015, but the growth figure of 2.3% posted in mid-2017 and the projected 2018 growth rate of 3% are well below global averages. These figures are clearly not going to transform today’s Ukraine into an economic success story.

Reform Roadblocks

The past twelve months have seen Ukraine’s widely publicized and much talked-about post-Maidan reform program stagnate. Ukraine managed to climb just five places in the latest edition of the World Bank’s annual Ease of Doing Business survey, moving up to 76 from 81. This is an extremely modest return

Rule of Law

Despite the pessimism surrounding the country’s stalled anti-corruption court, Ukraine has seen significant changes to the country’s judiciary in 2017. This includes amendments to Ukraine’s key procedural laws, the Code of Civil Procedure, the Code of Commercial Procedure, and the Code of Administrative Procedure, as well as the election of a new Supreme Court. As a result, Ukraine has simplified its court system and substantially widened the authority of the Supreme Court. These changes ae welcome but it will nevertheless be a struggle to overcome the traditional lack of Ukrainian public trust in the judiciary. The government proudly presented the new Supreme Court to the nation amid claims that it was the product of transparent selection procedures. However, many civil society representatives view it with a high degree of suspicion and skepticism. According to the Public Good Faith Council advisory body which monitored the formation of the Supreme Court, at least a quarter of the newly selected judges fall short of the high moral and professional ethical standards expected by the public, with numerous individuals tied to the old system. Sadly, many of the “new” Supreme Court judges look very much like their “old” discredited predecessors. The US Embassy in Ukraine has publicly expressed its concerns in this regard. Naturally, it is too early to write this reform off completely. The performance of the new Supreme Court will be one of the key indicators in 2018 of how far Ukraine has really progressed since the Revolution of Dignity.

many observers, is just as infected with corruption as the Ukrainian judiciary. In these difficult and challenging circumstances, Ukraine’s legal industry continues to adjust to the rapidly evolving political and economic environment. One of the key issues facing the legal profession remains insufficient legal education and practical training. As this has become a matter of professional survival for many lawyers, legal unions have begun to pay attention and new initiatives are appearing. Yuridicheskaya Praktika publishing house has recently announced the early 2018 launch of a Legal High School that aims to add value to traditional legal diplomas. This will see practicing lawyers lecture on corporate, tax and litigation topics in classrooms backed up by webcasts. This and similar efforts aim to bring a new generation of Ukrainian lawyers up to date without waiting for the long-awaited reform of the country’s traditional law schools to take place. Ukrainian legal sector professionals also face a sting of practical challenges such as tightening competition, the never-ending necessity to refocus on new practices, and declining legal fees. Traditional practices such as M&A and real estate are giving way to areas like dispute resolution, corporate and financial restructuring, and debt recovery. Meanwhile, industries such as IT, infrastructure and energy, especially the renewables market, look ready for growth in 2018. Many law firms are looking to expand in these directions.

legal

given that Ukraine was able to climb forty places between 2011 and 2013, when the country advanced from the 152 position to 112. Anti-corruption initiatives have been the biggest losers of 2017, with the newly created Anti-Corruption Bureau (NABU) and other anti-corruption efforts encountering severe challenges from existing law enforcement bodies and state organs led by the Prosecutor General’s Office. In the ensuing confrontation, NABU officers have faced accusations of illegality and attacks on their integrity in apparent response to investigations targeting a number of high-ranking state officials and their family members. Despite the evident ability of these new anti-corruption bodies to bring charges against high-profile suspects, post-Maidan Ukraine has yet to successfully prosecute a single senior politician or top state official on corruption charges. Instead, we witness what cynical observers have likened to sport fishing, with loud detentions subsequently leading to quiet dismissals at the pre-trial or trail stages. Meanwhile, unprecedented delays in the formation of an anticorruption court, a key element of the broader reform process, have fuelled further suspicions that there is little political appetite to engage in serious anticorruption efforts.

Will Ukraine Receive Green Light? The speed and success of the entire post-Maidan reform program remains Ukraine’s 2018 priority. The country remains stuck at the crossroads, pausing to see which color will follow the current yellow light flashing on the geopolitical traffic lights. Ukrainians are tired of waiting to receive the green light signaling a better future, and public patience will wear even thinner if progress does not come in 2018. With their professional knowledge, skills and experience, Ukraine’s legal community has a special role to play in the process of getting the country moving in the right direction. We all hope to see steady progress, but must also watch out for more red lights blocking the road ahead.

Legal Industry Challenges

The ongoing process of judicial reform is inevitably having a significant and direct impact on Ukraine’s legal industry. Apart from attempting to shake up the judiciary, reform efforts are also focusing on two other key elements of trial procedure – prosecution and advocacy. The Prosecutor General’s Office has seen its powers reduced since January 2017. The PGO’s authority is now limited to the organization and leadership of pre-trial investigations, along with support for public prosecutions in the courts, and representation of the state’s interests in the courts. These changes should see one of the PGO’s key functions, pre-trial criminal investigation, transferred to other state authorities such as the State Investigation Agency (SIA) and NABU. However, as is often the case in today’s Ukraine, the transition process has descended into institutional chaos and the GPO continues to perform investigative functions as before. The top priority now is cleaning up the pre-trial investigation system. The present system remains disbursed among multiple agencies and, in the opinion of www.bunews.com.ua

About the author: Armen Khachaturyan (armen.khachaturyan@asterslaw.com) is a senior partner at Ukrainian law firm Asters

networking events

Credit Agricole Bank Celebrates New Year 2018 Credit Agricole Bank welcomed 200 of the bank’s clients and partners to Kyiv’s Fairmont Grand Hotel in December for an “Elegant music soiree” to celebrate New Year 2018. The theme of this year’s event, which is among the highlights on the bank’s annual corporate calendar in Ukraine, was famous movie melodies with a French touch and a Christmas mood. “Our customers traditionally associ-

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ate us with business - services, credit lines, internet banking, and market overviews. But we feel it is also important to take the relationship further and strengthen our communication in an informal, relaxed, and friendly atmosphere surrounded by elegant music as we began one year ago,” commented Jean-Paul Piotrowski, CEO of Credit Agricole Bank in Ukraine.

Ukrainian Real Estate 2017 Winners As Ukraine prepared for the Christmas season, real estate professionals gathered at the Fairmont Grand Hotel in Kyiv’s riverside Podil district for the annual EE Real Estate Project Awards hosted by URE Club and Europaproperty.com. The Developer of the Year award in the residential real estate segment went to IntergalBud, while the title for commercial real estate went to Immochan Ukraine. Meanwhile, DIM took home the special award for excellence. Rustler Property Services and KAN Development enjoyed the honors in the property management category, with Integrites

claiming law company of the year in the real estate sector. Looking ahead, the ambitious Ocean Mall complex in downtown Kyiv won the title of future project of the year in the shopping mall category, while the Ukrainian capital’s Chicago Central House took the title of future residential project. It was not only about Kyiv, however. Lviv’s eco-friendly Optima Plaza won office project of the year. Event organizers said this year’s awards attracted more entrants than ever, reflecting growing international interest and domestic activity in the Ukrainian real estate sector for the third consecutive year.

networking events

Networking with Canadaâ&#x20AC;&#x2122;s Michael Bociurkiw Fryday Kyiv began the winter season by hosting Canadian journalist and global affairs expert Michael Bociurkiw for an informative and enjoyable evening of networking at new Kyiv venue Kitchen 21 in the Ukrainian capitalâ&#x20AC;&#x2122;s picturesque riverside Podil district. Michael gave a powerful and concise presentation summarizing the brain drain challenges currently facing Ukraine, while offering ideas on ways to improve the situation. A lack of economic opportunities, together with the ongoing Russian hybrid war in the east of the country, are key factors driving current high levels of emigration among Ukrainians.

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The traditional end of year dinner of the Turkish Ukrainian Business Association (TUID) proved a good opportunity for the Turkish business community to analyze the developments of the past year. TUID Chairman Burak Pehlivan welcomed guests to Mangal restaurant in central Kyiv and thanked them for their support throughout 2017 as the Turkish business community continued to expand in Ukraine. Mr. Pehlivan confirmed that growing Turkish investor interest in Ukraine since the 2014 Revolution of Dignity has now seen Turkey emerge as one of the top three investors in the Ukrainian economy. Turkish Ambassador to Ukraine Yรถnet Can Tezel, who was guest of honor at the dinner, underlined the role of TUID in improving Turkish-Ukrainian economic relations. The Ambassador commented that TUID is now widely recognized within the Ukrainian business community as being among the most active international business associations in Ukraine. TUID recently opened a new representative office in Zaporizhia, adding to a nationwide network including offices in Lviv, Kharkiv, Kherson, Odesa and Vinnitsia as well as a head office in Kyiv and representative office in Istanbul.

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networking events

Turkish Business Community in Ukraine Celebrates Year of Growth

Ukrainian Team of the Year Kharkiv Olymp Rugby Club All-conquering Kharkiv team achieved a clean sweep of Ukraine’s 2017 domestic rugby titles

Kharkiv sports fans have had relatively little to cheer following the 2016 demise of football favorites Metalist Kharkiv. However, Kharkiv Olymp Rugby Club helped restore local pride in 2017 by completing a clean sweep of all Ukraine’s domestic rugby trophies. Kharkiv Olymp won the 2017 Ukrainian Rugby Championship and Rugby Sevens Championship along with the National Cup and Sevens Cup, making it one of the most successful seasons in the club’s 35-year history.

Over a Decade of Dominance

The Kharkiv Olymp story began in the last decade of the Soviet era. Established in 1982, the Kharkiv club’s dominance of the contemporary Ukrainian domestic rugby scene dates from 2005 and the arrival of businessman Oleksandr Yaroslavsky as club president along with legendary Ukrainian rugby figure Valery Kochanov as head coach. Kochanov, who also serves as the coach of the Ukrainian national rugby team, has since overseen a golden era in Olymp’s fortunes, amassing a remarkable 35 national titles over the past 12 years. Unsurprisingly, the success of Kharkiv Olymp has also translated into dominance of the country’s international side, with the Kharkiv club supplying the backbone of the current Ukrainian national team squad. Despite enjoying relatively impressive financial backing in the cashstrapped world of Ukrainian rugby, club officials insist that Kharkiv’s success is the result of adherence to a day-to-day work ethic instilled at every level. Star player and leading scorer Oleg Kosarev says this is the essence of the Olymp philosophy. “As players, we all recognize that we have to surrender ourselves completely to the demands of the pitch. This applies to training just as much as it does to match days and cup finals. This complete dedication is the only way to get the kind of results we all expect of ourselves.” 72

Still Hungry The achievements of the 2017 season are testament to the continued hunger of the club despite the unprecedented success that successive Kharkiv Olymp sides have enjoyed for more than a decade. Head coach Valery Kochanov is the man whose task it is to keep the players motivated and prevent them from resting on their considerable laurels. He says it is crucial to keep the squad focused on the immediate task in hand, while also remaining aware of the need to maintain – and preferably surpass – the high standards set in previous years. “As a club, we always try to set ourselves the clear and simple objective of winning our next game. This winning mentality imbues everything we do, including training. We are also constantly trying to better ourselves by improving on our results and beating our own records. This is what keeps us on our toes and makes sure we stay in first place.”

Local Heroes

Rugby is not yet a major spectator sport in Ukraine but it is fast gaining devotees. The success of Kharkiv Olymp has helped put rugby on the map in the east Ukrainian city while also attracting the attention of Kharkiv regional state administration’s Governor Yulia Svitlychna. Governor Svitlychna honored this season’s triumphs by hosting an official reception for the Olymp players in late autumn where she praised them for giving Kharkiv fans so much to celebrate. The squad received commemorative sports watches similar to the one used by Conor MacGregor during his preparations for the Floyd Mayweather fight, while the club was given a special trophy featuring the Kharkiv Olymp crest and the Kharkiv region coat of arms. This trophy now stands in the lobby area of club president Oleksandr Yaroslavsky’s Premier Palace Hotel Kharkiv, were it is on prominent display. In return, players presented Governor Svitlychna with a souvenir Ukrainian national team jersey featuring the autographs of the Kharkiv Olymp squad.

sport

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last word

Brand Ukraine can win 2018 Champions League Final Which international organization has done the most for independent Ukraine? Many would opt for the EU, the UN, or perhaps even the IMF, but European football’s governing body UEFA also deserves serious consideration. UEFA’s first major contribution to Ukraine’s international emergence was the decision to award the country the right to co-host Euro 2012. It was a massive risk on UEFA’s part but it paid off handsomely, putting Ukraine on the map and denting a wide range of negative stereotypes. UEFA’s surprise choice of Kyiv for the 2018 Champions League Final could be even more important for Ukraine, providing the country with a global stage just when it needs it most. The Kremlin’s hybrid war against Ukraine has depended heavily on large doses of disinformation, with one of Russia’s key themes being the portrayal of Ukraine as a failed state. The goal is to discredit Ukraine internationally, leaving the country isolated from potential partners and vulnerable to further Russian aggression. To a significant degree, these efforts have succeeded. While many observers are sympathetic to Ukraine’s current plight, images of war, corruption, poverty and chaos continue to dominate outside perceptions. Ukraine has admittedly been slow to defend itself against Russian information attacks, but it was always likely to be an uphill struggle. Kyiv simply lacks the clout and the credibility to counter the Kremlin’s impressive global reach, and has often found itself hopelessly outgunned by the vast network of financial, diplomatic and academic resources available to Moscow. Exposing Russian fakes is futile if the debunking reaches less than 1% of the audience who swallowed the original lie. Rather than going head-to-head with the Kremlin’s troll armies and allowing Moscow to set the information agenda, Ukrainians

must try to promote alternative narratives of their own. Luckily, there is no shortage of material. The current struggle against Russian imperialism contains the kind of drama more commonly encountered in Hollywood blockbusters, but the sheer scale of the issues involved could prove too overwhelming for the wider audiences Ukraine needs to reach. Instead, it may actually be smarter to emphasize the everyday appeal of the country as both a partner and as a destination for tourism and business. Despite the grim headlines and hybrid war hyperbole, over 90% of Ukraine remains conflict-free and safer than most major European cities. It is a fascinating and friendly place where international visitors will encounter a warm welcome and fantastic value for money. This lesser known side of Ukraine will be center stage when the Champions League Final comes to Kyiv. The match itself will take place on 26 May and will attract a global TV audience numbering hundreds of millions. More importantly,

the world’s media will descend on the Ukrainian capital in the week preceding the match and will be hungry for additional stories to help justify the trip, presenting Kyiv with a priceless platform to sell itself as the vibrant heart of a new and exciting European nation. This should not be beyond the realms of possibility. After all, there are few places more aesthetically appealing that Kyiv in late May, while the city’s hipster vibe and post-Maidan cultural awakening are a feature writer’s dream come true. The 2017 Eurovision Song Contest offered a taste of Kyiv’s ability to impress visiting journalists. It is now up to the Ukrainian authorities and the Kyiv community to make sure the 2018 Champions League Final is an even greater triumph. Ukraine cannot hope to defeat Russia militarily or drown out Russian disinformation, but it can alter the equation by telling its own story in an engaging manner. UEFA has given Ukrainians a golden opportunity to do just that.

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