#32|AUG06|2010

Energizing Ukraine This week’s Business Focus highlights efforts under way to reduce the nation’s wasteful consumption p of energy. Pages 8-9

На крок ближче до тебе –

.ua

новини on-line

українською та російською

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vol. 15, issue 32

Augustt 6 A 6, 2010

Identities For Sale Thousands of Ukrainians fall victim to identity theft each year. Their personal information is used by criminals to take out bank loans and make fraudulent purchases. While databases with pilfered confidential details are bought and sold, experts say banks and other supposedly reputable institutions are sometimes in on the scams. Critics say a new law doesn’t go far enough in protecting private data or in undoing the harm of identity theft.

B Y M A R I E S HAMOTA A N D OL E S I A O LES HKO SHAMOTA@KYIVPOST.COM AND OLESHKO@KYIVPOST.COM

A few years ago, someone took out a om a bank using Hr 130,000 loan from entity.

Svitlana Pisotka’s identity. r, didn’t know Pisotka, however, he only found anything about it. She n a police out recently, when officer called to tell her that n used her identity had been on to

by Lybid Credit Union obtain the money.

“Somebody stole my erpassport data, pern sonal identification code, forged Æ5 5

New tax code favors rich Tigipko accused of trying to rig poll

BY S V I T L A N A T U C HYN S KA

Key Aspects of Tax Code

TUCHYNSKA@KYIVPOST.COM

What’s in?

The government is promoting a revised tax code after earlier versions were met with strong opposition from business groups and other experts. This draft, however, is not likely to quell opposition – not even within Prime Minister Mykola Azarov's team.

The top official in charge of reforms, Deputy Prime Minister Sergiy Tigipko, moved fast this week to distance Æ2

Inside: 234-6500: Kyiv Post main number

What’s out?

• Value added tax rate gradually drops from • No progressive income tax; rate 20 percent to 17 percent by Jan. 1, 2014. remains a flat 15 percent.

• Corporate profit tax gradually drops from 25 percent to 20 percent by Jan. 1, 2014.

• No property taxes • No luxury tax (on expensive cars, yachts, etc.).

• Individual entrepreneurs in some professions have monthly tax rate hiked to Hr 600 from Hr 200.

• No VAT-free tax breaks for housing construction and home sales.

• No end to tax-avoidance agreement with Cyprus.

News Æ 2, 5 Opinion Æ 4, 10

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B Y M A R K R AC H K E V Y C H RACHKEVYCH@KYIVPOST.COM

A former adviser to President Viktor Yanukovych has accused current Deputy Prime Minister Sergiy Tigipko of offering a $1 million bribe to convince a pollster to rig an exit survey during the fraud-marred 2004 presidential election that triggered the Orange Revolution.

Business Æ 6 – 9

Employment/Real Estate/ Lifestyle Æ 11 – 13, 16 Classifieds Æ 14 – 15

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234-6503: subscriptions subscribe@kyivpost.com

Tigipko, who at the time served as campaign manager for current President Viktor Yanukovych, allegedly sought to get the pollster to show then-presidential candidate Yanukovych as the winner of the important and respected exit poll.

The accusation comes from Dmytro Ponamarchuk, a public relations specialist who has been close to Yanukovych’s Party of Regions. Æ5

2 News

AUGUST 6, 2010

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August 6, 2010

Vol. 15, Issue 32 Copyright © 2010

by Kyiv Post The material published in the Kyiv Post may not be reproduced without the written consent of the publisher. All material in the Kyiv Post is protected by Ukrainian and international laws.

The views expressed in the Kyiv Post are not necessarily the views of the publisher nor does the publisher carry any responsibility for those views. Газета “Kyiv Post” видається ТОВ “ПаблікМедіа”.

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прим. Ціна за домовленістю. Матерiали, надрукованi в газетi “Kyiv Post” є власнiстю видавництва, захищенi мiжнародним та українським законодавством i не можуть бути вiдтворенi у будь(якiй формi без письмового дозволу Видавця. Думки, висловленi у дописах не завжди збiгаються з поглядами видавця, який не бере на себе вiдповiдальнiсть за наслiдки публiкацiй. Засновник ТОВ “Паблік-Медіа” Адреса видавця та засновника співпадають: Україна, м. Київ, 01034, вул. Прорізна, 22Б Реєстрацiйне свiдоцтво Кв № 15261(3833ПР від 19.06.09. Надруковано ТОВ «Новий друк», 02660, Київ, вулиця Магнітогорська, 1, тел.: 559-9147 Замовлення № 10-5369 Аудиторське обслуговування ТОВ АФ “ОЛГА Аудит” Mailing address: 01034, Kyiv, 22B Prorizna Street Kyiv Post main number: 234-6500 Advertising: 234-6503 Subscriptions: 234-6503 Newsroom: 234-6300, 234-6310 Fax/Tel.: 234-3062 http://www.kyivpost.com Editorial queries: news@kyivpost.com letters@kyivpost.com Subscription queries: subscribe@kyivpost.com Advertising queries: advertising@kyivpost.com З приводу розмiщення реклами звертайтесь 234-6503 Відповідальність за зміст реклами несе замовник

Revised tax plan seen as favoring rich taxpayers Æ1 himself from the latest incarnation, which business and other experts described as disappointing for average Ukrainians and small business.

Experts also say the tax measure can hardly be called “reformist” – if reform means a simplified tax system that relies on broad-based streams of revenue sources, including a progressive income tax.

The newer version – still open to revision before lawmakers vote in the fall – is seen as a step forward in some ways. It reduces, for instance, the inspection powers of tax authorities and gradually reduces some tax rates.

However, the latest plan does not introduce a property tax on residential and business property. In many nations, such a tax is an essential component to preventing speculative bubbles by stimulating real-estate turnover and development, as well as providing a reliable source of revenue for local governments.

Moreover, a proposed luxury tax – on yachts, expensive cars, etc – has been nixed. Additionally, the income tax remains at a flat 15 percent, after attempts to introduce a progressive rate of taxation – based on the ability to pay – were scuttled.

Even further, nothing is done to ease the burden of payroll taxes – now at 37 percent – that go to fund pensions and various social benefits.

Iryna Akimova, President Viktor Yanukovych’s top economic adviser in the administration, has promised to resolve the issue later through legislation that overhauls the nation’s pension system.

“There is an ongoing discussion about a single social tax… But we simply cannot afford to lower those taxes in the near future, as this would require [an immediate] pension reform and many other complex actions,” Akimova said.

She also said that a property tax might also be introduced later.

And longstanding tax avoidance agreements remain in place with Cyprus and other offshore tax havens, which critics say robs the Ukrainian nation of billions of dollars in revenue yearly.

Business got modestly welcome news in other areas.

A woman sells vegetables at an Odesa street market. Average Ukrainians and small businesses seem to have the most to complain about in the new version of the tax code promoted by the government. (UNIAN)

The value-added tax will be gradually reduced to 17 percent in 2014 from the current 20 percent rate.

The current corporate profit tax, 25 percent, will be reduced to 20 percent, starting from 2014.

Business representatives also say the newer version of the proposed code eliminates some of the most aggressive inspection and pressure tactics from tax authorities.

Authorities, for instance, would no longer be able to search the premises of the company without permission of a court. Fines and other payments assessed by inspectors must also be approved by court order before they can be collected.

While offering tax cuts to Ukraine’s biggest businesses, including Yanukovych’s oligarch backers, some say the latest draft tax code is unfriendly to those who struggle the most to make ends meet – small entrepreneurs.

Yaroslav Misyats, head of the Small and Mid-Sized Business Party, said that the monthly tax for entrepreneurs in several professions would rise from the current Hr 200 to Hr 600.

“This includes Internet providers, accountants, engineering and others,” Misyats said. Business will be forced even more into the “shadows,” he said referring to Ukraine’s already large shadow economy.

Only small business will enjoy tax holidays, promised by Yanukovych during his presidential campaign: entrepreneurs and companies that make less than $38,000 per year.

Despite the lowering of the corporate profit tax and retention of many tax breaks, big business might not be happy either.

“It is critical to return the currently existing regime of the consolidated payment of corporate profit taxes.

The idea of separate assessment and payment by taxpayers’ subdivisions is targeted to collect more taxes from businesses and is very unfavorable,” said Kostyantyn Solyar, an associate of Asters law firm. “Also among negative trends is that the recent version of the code does not contain a taxpayer’s right to offset its tax liabilities against relevant financial liabilities of the state budget to such taxpayer.”

Politics at play The new version of the tax code also reveals political splits in the Yanukovych administration.

Tigipko, the deputy prime minister who finished third in the Jan. 17 presidential election and is considered a politically independent force, said the published version was not approved by him.

He said he is working on his own draft of the code, which is due on

Aug. 5. Moreover, members of leading business advocacy groups, such as the American Chamber of Commerce in Ukraine and the European Business Association, said they were also still working closely with Tigipko on his version of the tax code.

“There are a lot of differences between the published version and our version…We are going to present ours to the government…and members of parliament will decide which document is better,” Tigipko said.

Some believe politics – more than genuine differences – is behind Tigipko’s move, especially ahead of local elections scheduled for Oct. 31.

A rivalry appears to exist between Tigipko and Yanukovych’s ruling Party of Regions, which dominates all branches of government.

“Tigipko does not have real power and he had nothing to do with the first version of the tax code, created

by Prime Minister Mykola Azarov,” political analyst Volodymyr Fesenko said. “His version of the code won’t be official.”

There is still time to make changes.

Government will give the public another month to review the proposal and recommend changes.

“We will try to find a balance between creating good investment climate and necessity to collect taxes,” Azarov said.

Earlier versions were also criticized as favoring big business and giving too much power to inspectors, and the latest one does address some of that criticism.

“The text we currently see shows that the authorities are willing to hear the voice of business,” Slava Vlasov, partner at PriceWaterhouseCoopers, said.

But opponents say the tax code is not good for Ukraine.

Allies of former Prime Minister Yulia Tymoshenko are vowing to block the legislation in parliament. “We will not vote for that code as it will damage business and leave thousands unemployed,” said Tymoshenko bloc member Andriy Senchenko.

Kyiv Post staff writer Svitlana Tuchynska can be reached at tuchynska@kyivpost.com

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August 6, 2010 Advertisement

European Business Association News

*O 'PDVT

,EADERS 4ALK

Leaders Talk: The Automotive Industry in Ukraine

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www.eba.com.ua

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USED CARS RESTAURANTS AND RETAIL OUTLETS IN A RELATIVELY SMALL 4HIRD AS MOST OF POTENTIAL CAR BUYERS HAD CITY CENTRE AREA OF +YIV &OREIGN VISITORS ARE GENER PLANNED TO TRADE IN THEIR OLD CARS THEY FAILED TO ALLY FAMILIAR WITH COUNTRIES CITIES WHERE THE LUXURY DO IT OR THEY WERE DISAPPOINTED BY THE PRICE IN VEHICLES TEND TO BE DISTRIBUTED WIDELY ACROSS A LARGE THE MARKET !S A RESULT MARKET VOLUMES DROPPED GEOGRAPHIC AREA n

BY IN AND DURING *ANUARY -AY !ND WHAT IF THEY COULD MAKE CHANGES TOMOR THE MARKET WENT DOWN EVEN DEEPER BY ROW TO HELP THE AUTOMOTIVE INDUSTRY IN 5KRAINE

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4HINGS TO KNOW Parliament Registers EBA Draft Law on Protection of Children Enhancing the social protection of children brought up in single-parent families is essential. In order to fulfil the care, food, education and sporting requirements of children, additional financial support should be provided to meet standards.

With this in mind, the EBA Women Club helped to develop a Draft Law on the protection of children which aims to increase the minimal size of aliments (not less than 50% of living wage and when a child is younger than 3 years old - 100%), the size of state help (difference between the aliments and size of living wage) and other important issues.

On 29 July 2010 Oleg Shevchuk, the First Deputy Head of the Parliament Committee on Social Policy and Labour has registered the “Draft Law on Amendments to Some Laws of Ukraine (concerning the protection of children brought up in single-parent families) No.7017� in the Parliament and the EBA will continue its work in this area and will lobby for adoption of this Draft Law.

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to the State Budget but to the Special Fund with no specific plan how to spend it for the benefit of agriculture. The selection of the products for inclusion is also very arbitrary.

Why for example did it not include fertilizer, seeds, machinery, irrigation equipment etc?

The products imported by EBA member companies are generally already more expensive than the local production products due to their sophistication and production costs so this only distorts the market.�

2%')/.!,.EWS On 23 July 2010 the EBA Southern Branch in Odessa held a new and unusual event called "Creative City - Art-Plant Cement".

More than 70 guests attended to take part in the event including representatives of EBA members companies, designers, artists and media representatives. At the beginning of the evening guests gathered in an active Cement Storage Plant where they were welcomed by dancers in glowing suits. There, guests could talk, explore and enjoy an exhibition of paintings and design installations made of metal, wood, plastics and other materials. During the second half of the evening guests were invited to an active workshop at the Cement Plant where they enjoyed live orchestral music, food & snacks and delicious Portuguese wine.

The night finished with a prize-draw with guests winning gifts and discount certificates, Spa treatments and books.

7E LOOK FORWARD TO YOUR FEEDBACK AT

PGGJDF!FCB DPN VB

4 Opinion

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August 6, 2010

Editorials

A log in thy eye President Viktor Yanukovych, while on vacation in Crimea, this week ordered a review of all possibly illegal land transactions on the peninsula.

“I am giving an order to conduct an official investigation, and start criminal investigations where necessary, into the violation of laws by authorities, private individuals and companies in Crimea,” the president’s press service reported him as saying on Aug. 3.

There is no doubt that dubious or criminal land deals need to be fully investigated, and those guilty of misappropriation of state property need to be punished.

But we suggest that the president should start with Mezhyhirya, a 140-hectare estate outside of Kyiv. It is the very estate the president calls home.

This former forest preserve is guarded so heavily that none of the multiple buildings located on this land has ever been photographed up close. Nevertheless, it has been the subject of multiple journalistic investigations, leading to the conclusion that the chain of companies involved in many land transactions there are closely associated with Yanukovych. The president himself has confirmed that he bought the house that stands on this land, but did not reveal the price he paid. He has said a part of the land is being developed by “other” investors.

Ex-Prime Minister Yulia Tymsohenko frequently mentioned Mezhyhirya during her failed presidential bid. The prosecutor general dutifully pronounced all deals surrounding the land and properties to be clean. That gave all officials the permission they needed to refuse all further comment.

Journalists, however, continue finding trails of evidence that the deal is not as straightforward as it should have been if the president really wants to show that his anti-corruption talk is more than just hot air.

As the saying goes, the fish rots from the head. This administration has shown no appetite to solve Ukraine's greatest crimes. Top officials also give every reason to suspect that they only want to simulate a fight against crime and corruption for public show. Not much more could be expected from a president whose supporters conspired to rig the presidential election in 2004, and whose associates have been implicated in some of the most serious instances of corruption in the nation's independent history.

Unless the president gives up Mezhyhirya, he can order as many criminal investigations and create as many anti-corruption groups as he wants. The nation won’t find him credible until he leads by example.

“He’s not wearing a hat!”

“He has overheated!”

“The Communists have always been in opposition to big capital! Especially now, as part of the ruling coalition, we’re the only active opposition!”

Police state Ukraine’s police force has never been the world’s friendliest bunch. But now there is mounting evidence that it’s radically reconsidering its role in the society. Instead of protecting the citizens, officers now seem bent on doing the persecuting.

Interior Minister Anatoliy Mohylyov is already undoing some of the hard-won civil and human rights protections of the post-President Leonid Kuchma years.

Many of the freedoms guaranteed by the Constitution in reality are threatened

by President Viktor Yanukovych's administration. This includes the freedom of movement, the freedom of expression and speech, the right for privacy and equality, the right for peaceful gatherings and personal security. The list goes on.

Mohylyov was appointed in March. One of his first acts was to dissolve an internal unit that monitored human rights – an essential check on the abuse of power by police officers on the 300,000-member force. The minister’s decisions progressively got worse from there.

As human rights activist Yevhen Zakharov writes in an opinion article on this page, many complaints are being registered about policy interference in the holding of peaceful gatherings and protests. In one of the most recent cases, the Orthodox Church of Kyiv Patriarchate complained on July 27 that law-enforcement officials attempted to prevent church followers from traveling to Kyiv to take part in a holy procession commemorating the 1022nd anniversary of the baptism of Kyivan Rus. In Kharkiv, the police turned a blind eye to thugs who beat up activists protesting the felling of trees in a park.

The death of student, Ihor Indylo, in a Kyiv district detention center on May 18 highlighted the problem of torture and abuse in prisons and pre-trial detention centers. An internal investigation was allegedly launched into this case, but there has been no word of it since, nor will there likely be any conclusive or credible probe.

Despite law enforcement’s inability to solve real crimes and history of political subservience, police officers are getting more powers. The minister once again wants foreigners to undergo rigorous checks of their documents. Also, the ministry is seeking to re-introduce personalized railway tickets, recording personal data of the travelers. All this is done under the pretext of fighting crime.

Mohylyov promised the president at a July 27 meeting that he will present a big plan for improving the Interior Ministry by the end of the summer. One big improvement would be law enforcers who solve crimes fairly, competently and honestly. They should serve all citizens, not bully them.

NEWS ITEM: Communist Party leader Petro Symonenko said his party represents the true political opposition – even though his 27-member faction has no intention of quitting the majority coalition run by President Viktor Yanukovych’s Party of Regions. “Opposition is a class notion,” Symonenko is quoted as saying on the party’s website. “We want to change not individual people and parties, but the whole social order.” Oleksandr Sochka, a member of ex-Prime Minister Yulia Tymoshenko’s bloc in parliament, suggested that Symonenko was suffering from the heat. “Clearly, the heat outside seriously affects people,” Sochka said, accusing the party of evading responsibility for misrule of the nation.

Assault on human rights under way YEV H EN Z A K H A ROV

Mohammad Zahoor, Publisher Jim Phillipoff, Chief Executive Officer Brian Bonner, Chief Editor Deputy Chief Editors: Andrey Chernikov, Roman Olearchyk Editors: Katya Gorchinskaya, Valeriya Kolisnyk, James Marson, Yuliya Popova Staff Writers: Alexey Bondarev, Tetyana Boychenko, Nataliya Bugayova, Peter Byrne, Oksana Faryna, Natalia A. Feduschak, Olga Gnativ, Kateryna Grushenko, Nataliya Horban, John Marone, Olesia Oleshko, Yura Onyshkiv, Iryna Prymachyk, Mark Rachkevych, Graham Stack, Marie Shamota, Svitlana Tuchynska Photographer: Oleksiy Boyko. Photo Editor: Yaroslav Debelyi Chief Designer: Vladyslav Zakharenko. Designer: Angela Palchevskaya Marketing: Iuliia Lysa Web Project Manager: Nikolay Polovinkin Sales department: Yuriy Timonin, Maria Kozachenko, Yulia Kovalenko, Elena Symonenko, Alina Chernysh Nataliia Protasova, Subscription Manager Svitlana Kolesnykova, Newsroom Manager Tatiana Protasova, Office Manager

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Interior Minister Anatoly Mohylyov has recently spoken a lot about human rights. He even said during a July 9 TV show on Inter channel called “Big Politics” that “in relation to each violation of human rights we will carry out a most rigorous investigation.”

Yet human rights violations by officers at the Interior Ministry itself mainly arise from the top minister’s instructions.

Since 2005, the Interior Ministry has had a Public Council on Human Rights that had been created in 2005 under thenInterior Minister Yuriy Lutsenko. I co-chaired the council.

But since the arrival of the new government and the new minister, members of the council tried for more than Æ10

Æ ”Do we really wish to demonstrate the full power of Ukraine’s ‘police state’ to guests arriving for the Euro 2012 soccer championship?”

Feel strongly about an issue? Agree or disagree with editorial positions in this newspaper?

The Kyiv Post welcomes letters to the editors and opinion pieces, usually 800 to 1,000 words in length. Please e-mail all correspondence to Brian Bonner, chief editor, at bonner@kyivpost.com or letters@kyivpost.com. All correspondence must include an e-mail address and contact phone number for verification.

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News 5

August 6, 2010

Identity theft victims have trouble undoing damage Æ1 my signature and got a huge chunk of money,” Pisotka, an economist from Kyiv, said. Later she learned she was not the only one: The same credit union somehow obtained and used personal information from more than 60 people to acquire bank loans.

The credit union mysteriously disappeared in 2009, along with its founders and Hr 12 million of depositors’ money.

Thousands of Ukrainians are victims of identity theft every year. According to the Interior Ministry, about 3 percent of bank loan applications are made with stolen identities. Many, like Pisotka, underestimate the danger of having their personal data stolen or leaked by unscrupulous guardians of the information.

Ukraine is, however, making its first steps to improve personal data protection. President Viktor Yanukovych signed a law on personal data protection on June 1. Legal experts say it’s a significant step towards European standards, but there is still room for improvement.

Identities bought, sold Personal data is a pricey commodity. Criminals pay handsomely to get access to people’s identities and use the sensitive information for fraudulent activities, including the acquisition of bank loans, and to privatize land plots and other types of fraud.

Sometimes fraud is performed using a stolen passport with a new photo pasted in of the person coming to apply for a bank loan. But some ID thieves don’t have to do much work at all: They get other people to loan them passports and other documents for a small fee of Hr 100.

In 2008, a resourceful Kyiv student “borrowed” passports from his dorm roommates, and later the data was used to privatize expensive land plots in Kyiv suburbs.

But the easiest way by far to obtain personal data in bulk is to visit Petrivka book market or Karavayevy Dachi gadgets market in Kyiv and buy a CD. The hottest buys are the databases of Ukraine’s State Tax Administration, containing personal and business information, and the Technical Inventory Bureau database with property ownership and other records.

The more entries a database has, and the more “exclusive” and up-todate it is, the more it will cost. Prices for an average database vary from several hundred dollars to $1,000.

Incidentally, $1,000 is also the standard payoff to the police if you’re caught selling this type of product, according to Petrivka vendors.

But if the case gets to court, the culprit can get either a Hr 850 fine, two years of correctional work, or six months in jail if convicted, according to Denys Kovryzhenko, legal program director at Kyiv-based Legislative Initiative Laboratory think tank. Those who leaked the database can also be punished, but rarely are because law enforcers have trouble proving their involvement.

“The problem is that most of the databases are poorly secured and it’s hard to trace an employee who accessed it, copied and disseminated the data in a malicious way,” Kovryzhenko of the Legislative Initiative Laboratory said.

“In Western countries, for example, each entry to a database is easy to trace

Æ ‘The problem is that most of the databases are poorly secured.’

– Expert Denys Kovryzhenko – who accessed it, what information they were looking for and what was copied or printed out. We have neither any adequate mechanisms of digitized data protection, nor proper internal control.”

While the new law should help, privacy experts say even tougher legislation is needed. “It just declares basic principles of data collection, maintenance and processing,” Kovryzhenko said. “The law establishes an agency that will be in charge of all databases containing personal data, but there is no clear definition of the scope of its powers. The mode of cooperation with other database holders, like the Tax Administration, for example, is not clear.”

Furthermore, the safety of people’s personal data will fully depend on the quality of work of the agency that will be regulating all aspects of data processing.

Blaming victims To add insult to injury, victims of identity theft are liable for fraud until they can prove otherwise.

The process is time-consuming and requires filing claims, explanations and assessments by various experts.

Pisotka has gone through the entire process. The assessment she hated the

most was from a handwriting expert, who required her to copy seven standard pages of text by hand.

“Two of those pages were extracts from the Criminal Code, including the article that regulates document fraud. The officers who investigated my case have a brilliant sense of humor,” Pisotska said.

U.S. banks, unlike Ukrainian ones, do not blame the victim. However, Americans with stolen identities have suffered damage to their credit-rating scores – an all-important barometer of how creditworthy a person is. Such ratings are not in use in Ukraine.

In America, “banks would waive the liability for the ID theft, you just need to quickly notify them. So a person won’t lose his or her money, it’s just a big hassle,” said Adam Levitin, professor of the Georgetown University School of Law in Washington, D.C. A colleague of Levitin, professor Edward Janger of the Brooklyn School of Law said that the banks suffer huge losses caused by unauthorized transactions, but they investigate the major cases only. “Nobody would investigate a $200 drain, as the cost of investigation is pretty high,” Janger said. “The banks though are externalizing some

of the risks on the merchants [in case of unauthorized online purchase].”

To make matters worse, law enforcers say some Ukrainian banks serve as accomplices to the crime by turning a blind eye when forged documents are used, or when discrepancies appear in signatures.

And several major Ukrainian banks are not helping public understanding or discussion of the increasingly important topic. Many refused to comment on fraud investigation procedures, citing “internal security rules.”

Happy ending Despite all the trouble, Pisotka’s story had a happy ending. She managed to prove that she had nothing to do with the Lybid affair.

Kovryzhenko said the long process is the only way to ensure the correct person is punished. “Financial institutions can’t waive liability just because a person says he or she is not liable.

Otherwise, a lot of bank clients would use this trick, and the bank would have to prove the opposite,” he said.

“That’s why people have to undergo those assessments. If the investigation shows that your signature was forged, they can start searching for the wrongdoers who did it and applied [for a loan] and also search for ths bank employees who assisted them. The procedure can cause inconveniences to ID theft victims, but they are the most affected parties, so they should cooperate with the investigation.”

Staff writers Marie Shamota and Olesia Oleshko can be reached at shamota@kyivpost.com and oleshko@kyivpost. com

Former Yanukovych aide: Tigipko offered $1 million in bid to doctor 2004 exit poll Æ1 Tigipko did not respond to repeated requests for comment about the accusations.

This is believed to be the first time that a Party of Regions insider has gone public with information implicating the camp in attempting to alter the outcome of a survey as part of the overall strategy to rig the Nov. 21, 2004, vote.

After that Nov. 21 vote, Central Election Commission officials declared Yanukovych the winner of the election.

The decision triggered widespread street protests by disbelieving Ukrainians, convinced that they had elected Viktor Yushchenko rather than Yanukovych.

Yanukovych’s declared victory was reversed by the Ukrainian Supreme Court, which found massive fraud in the Nov. 21 vote. Judges ordered a new election in which, on Dec. 26, 2004, Yushchenko defeated Yanukovych by a comfortable margin.

No credible criminal investigation has ever been conducted into the rigged 2004 presidential election, which vaulted Ukraine to the international stage for the democratic uprising that followed. No high-level officials have been punished and, to this day, Yanukovych and his supporters insist that no orchestrated fraud took place.

Exit polls were crucial to setting public expectations about the election results. And, evidently, that was the

motive for Tigipko’s alleged attempt to fix a Democratic Initiatives Foundation survey in the days leading up to the Nov. 21, 2004 vote.

The intended beneficiary of the bribe was the late Ilko Kucheriv, head of the foundation, who turned down the offer, according to Ponamarchuk.

“I was in Tigipko’s office … when the topic of exit polls came up,” Ponamarchuk said. “I told him I had known the director of the Democratic Initiatives Foundation since 1990.

Tigipko became interested and asked if I could offer Ilko $1 million if he would put Yanukovych in front, but within the sample error of the exit poll.”

Today, Ponamarchuk’s motives for making belated public accusations are unclear.

His accusations certainly support the integrity of Kucheriv, who died in May, for turning down Tigipko’s offer of $1 million in exchange for a doctored poll.

But the political spin doctor also may be trying to smear Tigipko, a government member whose Strong Ukraine Party is a serious challenger to the ruling Party of Regions ahead of the Oct. 31 local elections.

Ponamarchuk initially made the revelation in the most recent edition of Euroatlantika, a quarterly magazine, and confirmed the details in an interview with the Kyiv Post.

Far from doctoring his exit poll, Kucheriv conducted the only exit poll

during the election that was regarded as fair and accurate. The exit poll showed that Yushchenko had won the election, not Yanukovych.

Despite Tigipko’s silence on the matter, Kucheriv’s widow, Iryna Filipchuk, told the Kyiv Post that her husband told her about an attempt to fix the election exit poll. While Filipchuk could not confirm Tigipko’s alleged involvement, she said her husband came home one day on the eve of the 2004 presidential vote “consumed by something, burdened by a certain thought.”

When Filipchuk pressed him, Kucheriv said someone had offered him $1 million to doctor data on an exit poll that his organization was commissioning in the Nov. 21, 2004, contest.

“It turns out it’s quite easy to become a millionaire in this country,” Filipchuk recalled Ilko Kucheriv as jokingly saying when he returned home from work just days before the 2004 secondround presidential election.

“I asked him whether he could live with himself if he took the money and went through with it and he said, ‘no,’ so we just laughed it off,” Iryna Filipchuk said. “It was a tense time for us during the elections. Ilko (Kucheriv) probably thought he was guarding me from unsavory details into his work.”

Kucheriv could have used the money.

His pro-democracy and pro-NATO membership foundation depended on foreign grants. When he learned that

he was sick with cancer this year, Kucheriv appealed to friends for financial help with medical treatment.

Kucheriv, the late national democratic leader Viacheslav Chornovil and Ponamarchuk, as Rukh members, were among the 1992 founders of Democratic Initiatives. Kucheriv headed the organization until his death.

Ponamarchuk insists his reasons in going public are personal. “My motives were not political. I wrote a personal account of Kucheriv’s integrity. I’ve known many people in my life and he was the first to refuse so much money.”

Ponamarchuk claims that he no longer works with Yanukovych, and denied pointing the finger at Tigipko, not Yanukovych, who stood to gain most back in 2004 from a fixed exit poll.

Tigipko, however, told Focus magazine in a recent interview that he expected an upswing of political attacks on him as the Oct. 31 local elections approach in which his Strong Ukraine Party is considered a strong challenger to Yanukovych’s Party of Regions. “[They’ll make me] a scapegoat for everything…I will not exclude any scenario,” Tigipko said.

Rewriting history Yanukovych, who took over as president on Feb. 25 after winning his second campaign for the nation’s top job, has insisted the 2004 election was stolen from him. Like Yanukovych,

Tigipko has also denied any wrongdoing in the allegedly fraudulent events.

Yanukovych’s chances of rewriting history now are stronger that he is president.

“Firstly, we know there were [election] falsifications, how it was carried out and how pressure was organized,” said Olexiy Haran, a political science professor at Kyiv Mohyla Academy.

“Now many years have passed, the Orange forces have discredited themselves and the Party of Regions have been trying to re-write history.”

But Ponamarchuk’s revelation adds to a large pile of evidence that massive voter fraud was planned and organized at the highest levels of political power in Ukraine during the 2004 election for Yanukovych’s gain.

Ukrainian prosecutors brought a handful of lower-level officials to justice for election violations that occurred then, but no top officials have been held accountable.

Haran does not expect prosecutors seen as loyal to Yanukovych to launch a fresh investigation using Ponamarchuk’s revelation as new evidence. “They will cover it up as they have done so far,” he said.

Read an account of the Orange Revolution here: http://www.kyivpost. com/news/nation/detail/57094/ Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost. com

6 Business

www.kyivpost.com

August 6, 2010

Metro targets wholesale market

LG moves to direct deliveries

Metro Cash & Carry Ukraine opened a new store in Kremenchuk on July 21 (above). The wholesale warehouse – covering 2,000 square meters and stocking 2,000 products – is designed to serve the needs of mini-markets, kiosks and neighborhood stores. Another Metro Baza store is slated to open in Kirovohrad this fall, and the company has said it plans to open outlets cross Ukraine in under-served cities with populations of 200,000 residents. The German retail and wholesale giant will also continue opening retail stores in cities with more than one million people, with the next openings scheduled for the end of 2010 and early 2011. (Courtesy)

Yong Nam (left), vice chairman and CEO of LG Electronics, announces on Aug. 2 that the global electronics giant has fully switched to direct delivery of its products to Ukraine. The company had previously used a network of import companies to bring its goods into the country, but said it wanted to bring its operations into line with new tax legislation being developed this year. Sitting alongside Nam, Deputy Prime Minister Sergiy Tigipko said LG’s move would increase transparency in the electronics market in Ukraine. The South Korean company – which has been working on the Ukrainian market for 15 years – expects revenue in Ukraine to hit Hr 2.5 billion this year and jump a further 25 percent in 2011. (Yaroslav Debelyi)

ÆOn the move IHOR BEZPALKO was appointed financial director of Key Language School.

In his new post, Bezpalko is responsible for providing the school with sound business decisions as well as efficient and accurate financial services.

Before joining KLS, Bezpalko worked as a financial consultant at Ermis Domiki on a variety of financial projects.

Bezpalko holds a master’s degree in economic theory from Kyiv Economic Institute of Management.

Send On the Move news to grushenko@kyivpost.com, or contact Kateryna Grushenko at 234-6500.

Send business photos and press releases to: news@kyivpost.com, or contact the newsroom at 234-6310.

IRYNA MYKHAILOVA

OLEH BEKETOV

was appointed executive director of corporate business in Ukraine for Forum Bank, a part of Commerzbank Group, the second-largest bank in Germany.

In her new post, Mykhailova supervises the large corporate department, international desk, and the department of structured finance and cash management. She is responsible for top bank customers.

Mykhailova has over 18 years’ experience in the banking sector, including OTP Bank in 1998-2009 where she occupied the position of board member in 2006-2009. In 1992-1998 she worked for First Ukrainian International Bank. Her key area of expertise is corporate banking.

Mykhailova graduated from Kyiv National Economic University with a degree in finance and credit. She also has a degree from Kyiv National Linguistics University.

was promoted to counsel at AstapovLawyers, a Kyiv-based law firm.

He previously worked as a senior associate and headed the international litigation department for the firm. Beketov has over nine years of work experience in Central and Eastern Europe in international commercial arbitration and litigation, commercial and civil litigation, trade law, corporate and commercial law and foreign investments. Before joining AstapovLawyers, Beketov practiced international law at Magisters, Alston & Bird LLP, Pavlenko and Statsenko & Osinchuk. He also worked as assistant to the chair of the Ukrainian Parliamentary Committee on Legal Policy where he gained rich practical experience in the harmonization of Ukrainian legislation with European Union legislation. Beketov is a graduate of Lviv National University’s law school and holds a master’s degree in international law from American University, Washington College of Law in Washington, D.C.

ANNA TYSHCHENKO has joined the international litigation department of Kyiv-based law firm AstapovLawyers as a senior associate.

Tyshchenko has significant experience in representing companies in international arbitration as well as litigation courts worldwide.

Tyshchenko specializes in international arbitration, international litigation, international commercial law, investments and international trade.

Prior to joining AstapovLawyers, Tyshchenko worked for several years as a senior associate at Integrites law firm, where she headed the international arbitration and litigation department.

Tyshchenko holds a law degree from Kyiv National Polytechnic University.

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Business 7

August 6, 2010 Advertisement

Business Sense

Editor’s Note: Business Sense is a feature in which experts explain Ukraine’s place in the world economy and provide insight into doing business in the country.

To contribute, contact chief editor Brian Bonner at bonner@kyivpost.com

WITH JORGE ZUKOSKI JZUKOSKI@CHAMBER.UA

By taxing foreigners at higher rate, tax code will hurt investment The latest version of the draft tax code was published this week for public discussion.

Since the chorus of disapproval that met its first publication in June, some positive changes have been made. But a large number of discriminatory and unfavorable provisions remain, and more work is needed to create a fair and thoughtful final document that will likely be voted on in parliament in September.

The American Chamber of Commerce in Ukraine applauds the foresight of parliament in ensuring that this far-reaching piece of legislation is open for input from relevant stakeholders.

The chamber and the business community we represent has spent a lot of time preparing professional and detailed recommendations and targeted amendments that are geared to protecting the interest of the state as well as the private sector and the citizens of Ukraine.

Unfortunately, and despite assurances from the relevant parliamentary committee as well as the Cabinet of Ministers, a majority of these suggestions have not yet been incorporated into the latest version of the document.

Keep in mind that the original version of the draft tax code submitted to parliament on June 15 created such an outcry that the process of adoption was put on hold to solicit and accept input for the new comprehensive Tax Code.

Therefore, committees and working groups comprised of tax experts united under the chamber umbrella continue working on improving the quality and consistency of this piece of draft legislation within the framework of a working group on the draft tax code headed by Deputy Prime Minister Sergiy Tigipko, as well as with other relevant decision makers.

One of the primary focuses of the business community has been and will continue to be focused on ensuring equitable and equal treatment of all taxpayers. The latest version of the draft tax code no longer creates addi-

Æ A 30 percent income tax on foreigners is unjustified, compared to 15 percent for Ukrainians tional problems for taxpayers within the process of administration of taxes, but some outstanding issues remain rather restrictive.

An example of a positive improvement is a provision that foresees that a documentary check is conducted by tax authorities only by agreement with the taxpayer. This important change will significantly simplify doing business considering the historical number of tax audits experienced by the business community in the past.

Another positive sign is that the latest version of the draft tax code contains regulations that foresee a resolution in favor of the taxpayer, not regulatory bodies, in a case where there are contradictions within various legislative provisions.

At the same time, the foreign investment community remains concerned with the personal income taxation section, which foresees an unfriendly and discriminatory 30 percent income tax for foreign employees working in Ukraine, keeping in mind that the income tax rate for Ukrainian citizens stands at 15 percent. This is not in line with international best practices and in some cases may contravene bilateral tax treaties. (Foreigners working in Ukraine will pay income tax at 15 percent on worldwide income if they declare themselves residents.)

This discriminatory taxation of professionals creates unfavorable conditions for recruiting new employees and retention of current expatriates and will adversely impact the business activity of many international compa-

nies operating in Ukraine.

The business community remains strongly committed to further promoting the necessity to balance the rights, obligations and accountability of taxpayers and the tax authorities. More specifically, it is crucially important to introduce a provision into the draft tax code obliging authorities to be liable to taxpayers for failure to refund value-added tax or accurately execute legislatively prescribed acts on a timely basis. Such practices are common around the globe and will bring Ukraine’s tax system in line with international best practices, helping to attract and retain investment.

The expert community, united under the chamber’s umbrella, continues its work on developing a well thoughtthrough and viable final version of the draft tax Code, advocating for muchneeded, comprehensive reform of the Ukrainian taxation system, promoting tax efficiency, fairness, neutrality as well as effective tax administration and enforcement, which are essential to increasing Ukraine’s competitiveness and helping to overcome the recession that the economy is experiencing and allowing the country to take advantage of global growth trends.

It is a big task and one that the business community is committed to getting right the first time.

Jorge Zukoski is president of the American Chamber of Commerce in Ukraine, one of the largest non-government, non-profit business organizations representing companies operating in Ukraine. He can be reached at JZukoski@chamber.ua

#64*/&44"%7*4&3 Incentives for Investment in the Ukrainian Alternative Energy Industry In view of the high prices for natural gas and given the need to reduce dependency on foreign energy sources, production of electricity from alternative energy sources is a high priority for Ukraine.

YAROSLAV PETROV Associate

In an interview, Yaroslav Petrov, associate with Asters, highlights important aspects of the alternative energy market and its regulation in Ukraine.

How would you describe the alternative energy market in Ukraine?

For the last several years we have witnessed a strong interest of foreign investors in the alternative energy market of Ukraine. This trend even increased after adoption of laws on "green" tariff. We have recently analyzed the number of Ukrainian companies selling energy from alternative sources and applying the "green" tariff. As of July 2010, Ukraine has 5 companies selling wind energy, 2 companies selling biomass energy, and 58 companies selling hydro energy produced by small hydroelectric power plants. These companies produce approximately 1 percent of the overall electric energy production of Ukraine. If we look on a global scale, in 2009 approximately 18 percent of global electricity supply is produced from alternative/renewable sources of energy (Source: See Renewables 2010 Global Status Report REN21). Of course there are pioneers in production of alternative energy, such countries as Sweden, Germany, the Netherlands, Spain, China and others.

What is considered an alternative source of energy?

Solar, wind, geothermal, waves and tides, hydro energy, biomass, gas produced of organic wastes, gas produced at sewerage stations and biogas are recognized as the main sources of alternative energy under Ukrainian legislation. Secondary energy resources such as blast furnace gas, coke oven gas, coal bed methane gas and some others are also considered as alternative sources of energy.

However, not all of these alternative sources of energy are entitled to preferences under Ukrainian law. For example in Ukraine the preferential "green" tariff does not apply to energy produced using blast furnace gas and coke oven gas. For hydro energy the "green" tariff applies only to energy generated by small hydroelectric power plants where production does not exceed 10 megawatt.

Are there any important incentives for investment in development of alternative energy projects in Ukraine?

The main incentive is that energy produced from such sources can be sold under a special "green" tariff. This tariff can be several times higher than the tariffs for energy produced from conventional sources of energy such as fossil fuels and nuclear power. This "green" tariff is supposed to remain in effect until 2030.

Another important incentive is that the wholesale energy market of Ukraine is obliged to buy produced alternative energy applying the "green" tariff, provided its volumes were not sold by generation companies to direct customers.

Can you be more specific on the sale price for alternative energy?

Producers of alternative energy may sell electricity to customers directly or to the wholesale electricity market under the "green" tariff.

The NERC approves the "green" tariff for each producer separately based on the alternative energy source. The NERC approves tariffs for alternative energy generating companies on a monthly basis. However, the "green" tariff set by the NERC cannot be less than the minimum statutory "green" tariff. For example, minimum "green" tariff for wind energy varies from 70.15 kopeks to 122.77 kopeks per 1 kilowatt-hour depending on volumes of the produced energy (in the range up to 600 kilowatt and above 2000 kilowatt). For biomass energy it is 134.46 kopeks per 1 kilowatt-hour. For solar energy from 463.00 to 505.09 kopeks per 1 kilowatt-hour (tariff depends on the location of solar batteries). Finally, for small hydroelectric power plants it is 84.18 kopeks per 1 kilowatthour. 20 percent VAT should be added to these tariffs.

Are there any pitfalls and problems with production and sale of alternative energy in Ukraine?

Unfortunately, indeed there are some problems related to production and sale of alternative energy. For example, taking into consideration that "green" tariffs are only effective till 2030, if an alternative energy unit is installed and starts operations later, its operator would benefit less from the "green" tariff. Also, by law the preferential "green" tariff will be gradually reduced for units installed after 2014, 2019, and 2024. In addition to this there are some bureaucratic problems with connection of generation units to the electric grid. Another limitation of the current legislation is that the "green" tariff does not apply to those generating units which can use both fossil fuels and alternative fuels.

ASTERS

Russian wildfires claim at least 50 lives A firefighter attempts to extinguish a forest fire near the village of Dolginino in Ryazan Oblast, 180 kilometers southeast of Moscow, on Aug. 4. Drought during the hottest July on record is also expected to cut the wheat crop by 25 percent, prompting Russian officials to order a temporary ban on grain exports. Almost 600 fires were still raging on Aug. 5 as the country endured its hottest summer on record. (AP)

Leonardo Business Center, 19-21 Bohdana Khmelnytskogo Str., Kyiv, 01030 тel. + 380 44 230 6000, fax + 380 44 230 6001 info@asterslaw.com, www.asterslaw.com

PROJECT IN PARTNERSHIP WITH TNK-BP IN UKRAINE

8 Business Focus

www.kyivpost.com

August 6, 2010

How energy subsidies have sapped Ukraine’s efficiency

BY O L G A G N AT I V GNATIV@KYIVPOST.COM

As one of the world’s most wasteful energy users, Ukraine badly needs investment in energy efficiency projects to increase the competitiveness of its economy. But with little spare cash or financing available to fund improvements and reduced incentives because of subsidized energy prices, only a small number of firms are investing.

Research shows that Ukraine uses three times more energy to produce each unit of gross domestic product than an average European Union country. The industries that dominate the country’s economy – cast iron, steel, cement, chemicals and grains – still use outdated Soviet technology.

Years of low energy prices means companies have little motivation to find ways to reduce their energy consumption, which often requires hefty

Æ Nation’s economy is dominated by inefficient, wasteful heavy industry investment in modern machinery and processes to replace old, inefficient equipment and techniques.

“Investments into energy efficiency are an extremely expensive measure, but necessary for 21st-century business,” said Roman Zinchenko, coordinator at Greencubator, a national non-profit network of energy efficiency projects.

The European Bank for Reconstruction and Development, a major investor in energy-efficiency projects in Ukraine, estimates that about $10 billion needs to be invested by

2015 and another $10 billion by 2030 to keep the economy competitive. The large efficiency gains can be achieved in both industry and in the business of supply heat and energy to households, as well as schools and hospitals.

Despite the fact that energy efficiency has been one of the main priorities of every government’s policy since independence, the first major impetus for reducing consumption came in 2006 when the price of natural gas imports from Russia sharply increased from $50 per 1,000 cubic meters.

Russia has since more than quadru-

pled gas prices for Ukraine. Current prices Russia charges Ukraine are in the $235-300 range.

According to Sergiy Maslichenko, principal business development manager at the EBRD, $1 billion was invested by industry in energy-efficiency projects from 2006 to 2008, the same amount as in the previous 15 years.

“For business, the main incentive to pursue energy efficiency investments is economic efficiency. If energy resources are cheap, they will postpone it as long as possible,” said Iryna Stavchuk, international climate change coordinator at National Ecological Centre of Ukraine.

The economic growth that coincided with gas price growth gave a boost to investments in heavy industry.

Starting in 2006, major steel mills – including Zaporizhstal, ArcelorMittal Kryvy Rih and Alchevsk attracted investment to carry out moderniza-

tion aimed at improving energy efficiency. Besides the metallurgical sector, an active shift toward more energyefficient production was observed in the chemical sector, cement production and agricultural companies.

International lenders led the way in putting money on the table. From 2006 to 2008, the EBRD committed nearly $770 million to sustainable energy projects in Ukraine. In the same period, the International Finance Corporation, the investment arm of the World Bank, spent $250 million on various projects.

But the financial crisis that hit in 2008 put the brakes on the promising progress, as financing dried up and companies cut expenditures and development programs.

“Before the crisis [in end of 2008], we had up to 20 project proposals annually, most of which received financial support. Now we get no Æ9

What’s being done to burn cleaner car fuel, improve air that everyone breathes This year was supposed to be the last before Ukraine switched to high-quality, environmentally friendly gasoline and diesel fuels for cars. But the industry-wide move to Euro-4 standard fuel, originally set for Jan. 1, 2011 by the government, could be postponed until 2013, as many fuel producers say they are not ready and need more investment in production.

The rising use of automobiles by Ukrainians, in tandem with continued use of low-quality fuels, is a major cause of the choking pollution experienced in cities across the country. And use of low-quality fuels can also negatively affect the performance of some modern cars that are made to run on the latest fuels.

Ukraine has been gradually moving toward cleaner fuels since 2000, when it declared its plan to follow European emissions standards. In 2005, the country signed a roadmap with the European Union aimed at improving fuel quality and reducing harmful emissions according to the “Euro” scale. Euro-4 fuels, which became standard in Europe in 2005, emit less than half the amount of toxic carbon monoxide as Euro-2 fuels, the current standard in Ukraine.

While there has been some movement in the right direction, overall progress seems to be hitting road blocks along the way.

“The movement toward more clean fuel has slowed due to little encouragement from the government and lack of motivation to invest into moderniza-

tion from owners,” said Serhiy Kuyun, head of the A-95 consulting group, which specializes in the oil and gas sector.

Spluttering progress One of the major steps forward was made when the government approved the Euro-2 standard in 2006 and set the goal to move to Euro-4 from the 2008.

“Then the industry first asked for additional time – three years – to conduct the necessary modernization on production, and the government agreed [to push the date back to] January 2011,” said Kuyun.

As the deadline approaches, industry experts say only two fuel processing plants in the country are prepared for Euro-4 standard: TNK-BP’s plant in Lysychansk, which has a 23 percent market share, and Lukoil’s plant in Odesa, which controls 8 percent of the market.

Other major fuel-processing plants, such as Privat Group’s plant in Kremenchuk, which has a 25 percent market share, and state-owned plant Shebelynka, with a 6 percent market share, as well as the smaller Nadvirna and Drohobych plants, also controlled by Privat Group, are not ready to produce Euro-4.

Oksana Volosko-Demkiv, partner at the Center for Environmental Consulting and Auditing, which works in environmental protection, said most fuel processing plants in Ukraine haven’t carried out overhauls – not because of a lack of financial assets, but due to a lack of business culture and responsibility.

Æ Shift to cleaner fuels is filled with delays and missed deadlines “Many work with old-fashioned equipment because legislation is weak and doesn’t set responsibility for polluting the environment, meaning modernization is [the company’s] decision,” said Volosko-Demkiv.

Ukrtatnafta, the subsidiary of Pryvat Group that operates Kremenchuk fuel processing plant, couldn't be reached for comment.

In response to this situation, the Ministry of Fuel and Energy last month suggested moving the deadline later – to Jan. 1, 2013.

The ministry didn’t respond to emailed questions. Although the final decision is still being made, market insiders expressed concern.

Fuel producers are concerned that after pumping millions of dollars into modernization, they will now be in a disadvantaged market position.

“Our main refinery [in Lysychansk] will produce only Euro-4 standard from the 2011. And we will have to sell

European Emission Standards for petrol and diesel fuels (Euro 1-6) Grams of Carbon monoxide (CO) per kilometer More polluting

GNATIV@KYIVPOST.COM

Standards for petrol Standards for diesel

3.16 3.16

2.3

2.2

Cleaner

BY O L G A G N AT I V

0.64 Euro-1

Euro-2

Euro-3

1.0

1.0

1.0

1.0

0.5 Euro-4

0.5 Euro-5

0.5 Euro-6

Source: Directive of the European Commission

it for the same price as other players sell Euro-2 fuel,” said Dmitri Zverev, TNK-BP’s press-secretary in Ukraine.

Negative effects The postponement of the shift toward Euro-4 has a significant ecological impact because it slows the movement to more ecologically friendly fuel consumption in Ukraine. If the government approved Euro-4 standards enforcement from 2011, old-fashioned and polluting patrols, like the A-76-80 would disappear completely, explained TNK-BP’s Zverev.

The market of low quality fuel also affects car imports, especially those with more ecological engines.

Oleksiy Litvinov, product and pricing manager at Toyota Ukraine, says that low official standards of fuel in Ukraine

can mean that car producers don’t offer their latest, best products. “The quality of fuel significantly affects the functioning of engines in new diesel and petrol models. Because of this we don’t import specific models that are sensitive to quality,” said Litvinov.

And it’s not just commitments to the EU that the government will be lagging on if the bar is not raised soon. A commitment was also made to the World Trade Organization when Ukraine joined in 2008 to bring the country into line with European standards by 2012.

“We are not sure that the next deadline [possibly in 2013] will be kept,” said Zverev. “This significantly halts the development of the overall market.”

Kyiv Post staff writer Olga Gnativ can be reached at gnativ@kyivpost.com.

www.kyivpost.com

August 6, 2010

Business Focus 9

Green energy struggles to grow

BY O K S A N A FA RY N A FARYNA@KYIVPOST.COM

Times when green energy was a matter of concern only for environmental enthusiasts and tree huggers are long gone. Today, energy produced from renewable sources is seen as a new market full of opportunities by many influential business groups and investors both worldwide and in Ukraine.

Not only are renewable resources clean and environmentally friendly, proponents say, they offer potential for long-term profits.

“You don’t need trains of coal or a million square meters of gas to feed a wind or solar power plant,” said Roman Zinchenko, network coordinator at Greencubator, a Ukrainian nongovernmental organization promoting energy innovations. “Wind and sun are free of charge.”

Although less than 1 percent of Ukraine’s energy is currently provided by renewable resources, and the development of green projects is hampered by the difficulty of securing financing and unclear legislation, the country is seen as having great potential, particularly for wind and solar power.

Some of Ukraine’s biggest businessmen are getting involved.

DTEK, the energy subsidiary of the System Capital Management group, owned by Ukrainian billionaire Rinat Akhmetov, plans to construct a 200 megawatt wind power plant in Zaporizhya Oblast between 2011 and 2014. The total volume of capital investments in this project will exceed 300 million euros.

DTEK has plans to build more wind power plants in the future with a total capacity of over 1,000 megawatts.

“DTEK regards the development of alternative energy as a strategically important direction of our business,” said Guerman Ainbinder, the company’s business development director.

Wind power projects have been announced by Dnipropetrovsk-based Concord Group, French company Beten International and Smart Holding, controlled by Ukrainian businessmen Vadym Novinsky, among others.

“Now several ambitious projects are under way,” Greencubator’s Zinchenko said. “If they are completed, then the volume of investments in renewable energy in Ukraine will rise beyond $1 billion.”

He added that most of the renewable projects are wind power plants of 200-300 megawatts.

Apart from wind power plants, businesses are interested in plants powered by solar energy. Austrian company Activ Solar, reportedly controlled by Ukrainian businessmen and politicians Andriy and Serhiy Klyuyev, has already started installing an 8.5 megawatt solar power plant near the village of Rodnykove in Crimea. This is a pilot project that could be finished as early as this autumn and be followed up by a bigger one.

The driving force behind the interest in green energy is the “green tariff.”

According to the law which was adopted on Apr. 1, 2009, the Ukrainian electricity market, represented by state company Energorynok, is obliged to buy electricity produced from alternative energy sources at a special price – the green tariff. This price, agreed on an individual basis and depending on the energy resource, is higher than that generally used for purchasing electricity from traditional sources and is set until 2030.

The National Electricity Regulatory Commission of Ukraine has already approved green tariffs for five wind power plants, 20 small water-powered plants and two companies which produce electricity from biomass – sunflower oil producer Kirovohradoliya and Smilaenerhopromtrans energy company.

At the end of June, the tariff was also given to the Ukrainian Milk Company, which, alongside dairy products, produces electricity and heat power from cow manure. The company’s farm, located in Velyky Krupol village near Kyiv, uses manure from its 4,000 cows and a biogas engine to produce 625 kilowatts of electricity and 686 kilowatts of thermal output. This is enough to power the whole plant and

Plants powered by renewable sources, such as Donuzlavska wind power plant in Crimea, produce less than 1 percent of Ukraine’s energy supply. But the share is expected to grow.

(UNIAN)

to sell the rest electricity to the grid. In such a way the company also solves a problem of organic wastes utilization, and after the manure goes through the biogas plant, leftovers can be used as agricultural fertilizer.

Ukrainian Milk Company initially faced difficulties receiving green tariff because legislation does not state clearly whether cow manure can be identified as a biomass.

This is not the law’s only defect.

“Key regulations have not yet been adopted for implementation of the green tariff projects,” noted Maksym Sysoiev, an associate at Paritet law firm. These include a procedure on connection to power grids and for determining the amount of Ukrainian equipment used in the power plants – necessary to secure the special rate.

“These imperfections in the legislation, among other factors, significantly slow down the progress of the industry,” he added.

A further problem for green proj-

Power capacity

Electricity from traditional resources Wind power plants

Solar energy

Tariff rate 1

up to 600 kilowatt

1.2

600 – 2,000 kilowatt

1.4

more than 2,000 kilowatt

2.1

up to 10,000 kilowatt

1.8

Biomass energy Small water power plants

Investment in energy efficiency gradually increasing Æ8 more than 15 proposals, and only

Green tariff in Ukraine Producers receive a higher tariff for energy coming from renewable sources Type of energy

PROJECT IN PARTNERSHIP WITH TNK-BP IN UKRAINE

2.3

for plants located on the ground

4.8

for plants located on the roofs over 100 kilowatt

4.6

for plants located on the roofs under 100 kilowatt, and on the fronts of buildings

4.4

Sourse: Greencubator, National Electricity Regulatory Commission of Ukraine.

ects is the high price of financing, said Yegor Samusenko, an analyst at Concorde Capital investment bank.

Samusenko said the green tariff is approximately the same as in Spain, but whereas loans can be taken there at 3-4 percent annually, rates in Ukraine are around 20 percent per year. This means that projects have been slower off the ground.

The green tariff was introduced in most Western countries about ten years ago. Since then, annual global investments in renewable energy projects have sky-rocketed, reaching $162 billion in 2009, slightly down from 2008, but still nearly four times 2004’s total of $46 billion, according to New Energy Finance.

European Union countries have committed to increasing the share of renewable energy to 20 percent by 2020. Some countries have already exceeded this figure, including Denmark, which produces over 20 percent of its energy from wind power plants. In Ukraine the share of energy produced from all renewable resources is less than 1 percent.

But the country’s potential is huge.

Crimea and the southern coast of the Black and Azov Sea are perfect for launching wind and solar power plants. Wind power plants can be also constructed in some regions of the Carpathian mountains. The north of the country, which is covered with forests and bogs, has the potential to develop biogas plants powered by biomass. Central regions with its corn fields have the same potential, as straw can be used for producing fuel pellets.

Kyiv Post staff writer Oksana Faryna can be reached at faryna@kyivpost.com

five of them can possibly get approved,” said the EBRD’s Maslichenko.

“In the aftermath of the crisis not only the number of projects decreased but the overall quality of those projects suffered because many companies postponed energy investments for better times,” he added.

As the country creeps out of crisis, investments in modernization could resume. But experts say the government’s policy of cheap energy resources – including the $100 discount on Russian gas imports secured earlier this year – removes a major financial incentive for companies to invest.

“When energy resources are cheap, nobody bothers to conserve them,” said environmentalist Stavchuk.

“It would be better if everybody paid a fair price for energy, but could be reimbursed costs through state support programs for energy efficiency,” she added.

Despite more than 200 pieces of legislation on energy consumption, Ukraine still does not have a clear mechanism for encouraging the introduction of energy-saving measures, according to a recent report by the International Centre of Policy Studies, a Kyiv-based think-tank.

The report says that while current legislation contains such incentives as lower import duty and value-added tax relief on energy-efficient equipment, profit tax incentives for companies that manufacture alternative fuels or energy-efficient equipment, there is a lack of rules and mechanisms for regulating and introducing energysaving measures.

But with the price of energy set to continue rising, experts say firms will have little choice but to invest to reduce consumption in order to stay competitive.

“Since the cost of energy resources is growing, companies can’t ignore energy efficiency measures,” said the EBRD’s Maslichenko.

Kyiv Post staff writer Olga Gnativ can be reached at gnativ@kyivpost.com

10 Opinion

www.kyivpost.com

August 6, 2010

Zakharov: Police reverting to heavy-handed tactics again Æ4 three months to hold their next

ÆPolice should stop imitating crime fight and start protecting citizens

meeting, but to no avail. The government order that established this council under Lutsenko, No. 1243, has not been canceled. So, I feel I must fulfill my duties. Having no opportunity to make my recommendations during the council meetings, I am forced to do it publicly.

Checking everyone As far as troublesome instructions issued at the top of the ministry go, let’s start with Instruction No. 236 dated April 8. If you are a foreigner in Ukraine, pay special attention, as this order could affect you significantly.

It unjustifiably increases the powers of Interior Ministry officials, calling for “constant control over the stay of foreign nationals on service structures, carry out thorough checks of foreign nationals’ documents, give particular attention to whether they have registration cards issued by border guards.”

All these requirements are in gross contradiction with the existing laws.

Imposing constant surveillance over a person and checking their documents are specialized procedures that are regulated strictly by law. They cannot therefore be applied on a massive scale, whether in relation to Ukrainian or foreign nationals.

Freedom of movement In addition, according to Instruction No. 292 from April 23, railways are to re-introduce tickets containing full names, dates of birth, and the number of a person’s ID. The objective is, supposedly, for the public’s good – to seek out criminals.

Yet the Interior Ministry does not care that it is a blatant violation of the right to privacy and treats all Ukrainians as potential criminals. This system would hamper freedom of movement, which can only be restricted under global social threats – war, terrorist acts, mass riots or natural cataclysms.

None of these are taking place in Ukraine. Instead there is the overt wish by the Interior Ministry to control the movement of citizens in an arbi-

Interior Minister Anatoly Mohylyov

trary and unhampered fashion in the manner of police states. Do we really wish to demonstrate the full power of Ukraine’s “police state” to guests arriving for the Euro 2012 soccer championship?

Who needs privacy?

The introduction of mandatory fingerprinting of detainees is another example of systematic and wide-scale violation of privacy rights, which has increased dramatically under Mohylyov.

Under the nation's law, the procedure should only be carried out against those who are accused of criminal activities or those subject to administrative penalties. Yet it is currently applied widely against certain groups of the population, such as the Roma who are specially detained for that purpose, and then released. Such actions reinstate old forms of discrimination against the Roma which the Interior Ministry – before Mohylyov took over – had, over recent years, gotten rid of.

Peaceful gatherings During the first 100 days of new management at the Interior Ministry, regional and national media published more than 350 critical articles regarding how the police handled peaceful gatherings, such as protests. This was more than in 2007-2009 combined.

The nature and scale of these violations leaves no room for doubt that unlawful acts on behalf of the police were conducted with the Interior Minister’s full approval. Illegal actions included: preventing people from taking part in peaceful gatherings and giving preference to one side over another during them; unwarranted interference with peaceful gatherings and detention of their participants; unlawful failure by the police to respond to scuffles between opponents; and excessive use of force against participants in peaceful protests.

Given the current situation, I am forced to state publicly that the Interior Ministry leadership has chosen to implement repressive measures against peaceful assembly, despite the lack of any threat of mass riots or terrorist acts. Instead of cracking down unlawfully, the police should have used these protests as an opportunity to test their skills and tactics on how to use a minimum amount of force to maintain peace and security.

Torture and fudging figures Reports of torture and other forms of violence by the police, some with a fatal outcome, have recently become more frequent. From June 11-14 alone, four deaths were reported as a result of police actions. Another victim ended up in emergency care.

In my opinion, this is directly linked to the unprofessional and twisted goal of maximizing the number of people prosecuted, which Mohylyov mentioned during the July 9 TV program.

This self-stated goal is even worse than the assessment of work by the percentage rate of crimes solved, which used to be the case until 2005, and will lead to mass falsification of figures in

order to misrepresent achievements and thereby receive bonuses. Isn’t this where the 30 percent increase in the number of registered crimes during the first six months of 2010 comes from?

It’s pretty safe to assume that this figure will rise at the expense of trivial crimes, while the organizers and those who commit serious crimes – drug traffickers and the leaders of organized criminal gangs – will remain at large.

Pressure will also be widespread for those who are accused of crimes to confess to other ones they had not committed, so that that they can be added to the list and improve reporting. There is no need to mention that presumption of innocence is entirely forgotten in such cases.

The analysis made of the first 100 days under the new Interior Ministry leadership by former human rights advisers in the ministry clearly shows that no less than 60 percent of cases involving removal of weapons, ammunition and explosives are regularly falsified. And this is done to create the appearance of improvement in police work.

What human rights?

There is no more pretense about observation of human rights as all projects in this sphere have been stopped. As the former human rights advisers wrote: “The new Interior Ministry leadership, headed by Anatoly Mohylyov, has returned to a model of a police department as a closed and self-sufficient system with its own interests, which are radically divergent from those of the public. The nature of the ‘reform’ measures over the last several months leaves no room for illusions and clearly demonstrates that the police do not like civic activity, and that they intend to significantly restrict

it. We are also forced to note that the public statements from the [ministry] about the need for co-operation with the public have no practical application and remain merely populist slogans.”

The Department for the Monitoring of Human Rights and its 18 employees were dissolved by a ministerial order in March. During the July 9 television show, the minister also insulted these people. Only an entirely biased person could fail to see the enormous work done by that police department in less than two years, related to human rights. Hundreds of citizens who complained of unlawful actions by the police received assistance. They helped to uncover significant cases of police abuse. It was thanks to the former staff that the mobile groups monitoring observance of human rights in the ministry's detention centers began working systematically, improving conditions in temporary detention centers.

Conclusions There can be many views about changes the country underwent in the last few years. There is a clear awareness among Ukrainians that the government should serve the people, and not vice versa. Citizens want the authorities to spend taxpayers’ money to operate a police force that protects human rights, not one that violates it and oppresses citizens.

The police have no right to act without taking the population’s needs into account. It cannot pretend that it doesn’t matter how many people lose their lives or health as the result of unlawful actions by law enforcement.

In view of this, the Interior Ministry leadership should radically change their attitude to cooperation with the public, as well as to human rights, and stop violating them. They should reject statistics that foster violence, and stop imitating their fight against crime.

If they fail in this, they need to be ousted.

Yevhen Zakharov is the chairman of the Ukrainian Helsinki Human Rights Union and co-chairman of the Kharkiv Human Rights Group.

Lifestyle Play | Food | Entertainment | Sports | Culture | Music | Movies | Art | Community Events

August 6, 2010

Crops suffer in heat, drought Æ16 www.kyivpost.com

This organic house is located in Kyiv near Moskovska Square. Its flowing lines, no basement and plenty of light make it a cozy place to live.

(Oleksiy Boyko)

Organic homes

BY I RY N A P RY MAC H YK PRYMACHYK@KYIVPOST.COM

An ancient parable says that, after God created man, there was a small piece of clay left – and He gave it to man to build his own happiness.

In today’s world, clay may not be enough for happiness. But it can be used to build a model of your dream home at a masterclass with an “organic” architect in Kyiv. No background in architecture or drawing is necessary – just bring your dreams along.

There are no straight walls or standard corners in an organic home. The materials used are often natural, and the window ledges might be made of grass. If it’s a house, it will have no basement, and the floor will be level with the ground. Think of the seashelllike Sydney Opera House in Australia or fairy Gaudi houses in Barcelona to picture fluid shapes and sketch your own organic exteriors. Unlike old Soviet architecture with its dictatorial square shapes and bleak facades, organic architecture works like organic food. It’s supposed to be good for you.

Hlib Usakovsky, owner of the Organic Architecture workshop, has been designing houses and flats for years. Sensing and forming connections between people, their homes and nature is what he does for a living.

“This can never be boring,” Usakovsky said. “An organic architect keeps silent and listens carefully – first to the land where the house is to be built, then to a person to understand their character.”

It takes him three months and around 20 personal meetings to understand a client and his potential needs.

“Once I had a client who was actively involved in extreme motor racing,” Usakovsky said. “I had to talk to him in a hospital a lot because he kept having one injury after another. Eventually, I found out that he dreamed of a piano ever since he was a child.” And so the architect suggested getting a piano. The

Hlib Usakovsky heads Organic Architecture and designs homes.

die-hard bought the instrument and started taking classes. Soon, he stopped frequenting doctors and diverted some of his energy into music.

Usakovsky talks to his clients about anything: from their bathing habits to childhood dreams that did not come true. They eat together and go shopping together. After hours of communication, the clay work begins. Often the client will make a model of their home with his own hands, under the architect’s supervision.

“Clay is the ideal material for transmitting people’s emotions, their true feelings,” said Usakovsky. In his workshop, people design their homes on a high stand, instead of a table, for “the model to be born out of their heart, not in their head,” Usakovsky said.

Building such a home in the city of thorny Soviet housing blocks may seem hard, but it's totally possible inside your own abode - no matter how small.

Entrepreneur Yuliya Filippovska, 28, converted her 50-square meter studio apartment into an organic home two years ago.

“Each day after work we met and talked for hours until I understood

234-6503: advertising advertising@kyivpost.com

how to make each tiny detail of the area perfect and natural and made the house basically with my own hands,” recalled Filippovska. Now her home is a fluid space without any sharp corners. “I truly believe that organic space can strike a balance in one’s life and bring harmony both inside and outside,” she said.

Usakovsky said he only works with clients who are ready to take the time to talk to him and put a lot of their own effort into the planning. “I refused to work for several [parliament] deputies just because they did not have enough time to spend with me. I could not feel their emotions and understand what they really wanted to get from a house or a flat,” he said.

But those who are ready to spare the time and effort, get a good result, he said.

Usakovsky learned the craft from Reinhard Coppenrath, a Germanborn architect. A graduate of the Kyiv National University of Construction and Architecture, Usakovsky ventured into the unknown organic construction and never regretted it. His efforts are paying off handsomely now. With a portfolio of 20 houses and even more flats done in Kyiv and the region, Usakovsky feels his skills are in demand.

An organic home, be it a redesigned flat or a large house, costs roughly the same to design or build as any other type. He said he charges as much as any traditional designer in Kyiv would$50 per square meter.

Those interested in taking a shot at organic modeling can visit one of the clay workshops that will start on September 8. A three-hour session costs Hr 250.

What: Organic architecture workshop Where: Shota Rustaveli 33B, tel. (044) 237-32-62, www.oa.org.ua When: classes start on Sept 8 at 7pm Price: Hr 1,000 for four sessions, each three hours long.

234-6300, 234-6310: newsroom news@kyivpost.com

Sydney Opera House in Australia resembles sails caught by the wind or sea shells. It’s a famous example of organic architecture. (Yuliya Popova)

12 Lifestyle

www.kyivpost.com

The job description for models is about to expand. In addition to strutting about in designer clothes and smiling nicely, they will now have to play volleyball. That’s, of course, if they want to win Maxim men’s magazine cup and a money prize.

Girls from 13 agencies will compete at Olmeca Plage beach club in Kyiv and Ibiza club in Odesa every weekend in August. The top 14 models who prove to be best with balls will qualify for the finals on Aug 21. The winning team gets Hr 15,000. Before the final game, though, you can enjoy watching volleyball girls in bikinis train in Kyiv’s Hydropark. Maxim is one of the most popular local men’s magazines. They’re pitching model volleyball for the fifth year round.

Olmeca Plage beach club (Hydropark Metro, past the Venetian bridge) or Ibiza at Arcadia beach in Odesa. Qualifying rounds on Aug. 7, 14 at 3:30pm. Finals on Aug 21 at 3:30pm. Tickets: Hr 100 (includes a beach bed) and Hr 300 (a beach bed by the pool)

(www.danceisrael.com)

Aug. 7, 14, 21

Dance in ‘The Tunnel’

Contemporary dance group Extreme Dance Life embarks on a journey through a ubiquitous tunnel to see if the light at the end of it is worth anything. In a fantasy-play “The Tunnel,� dancers will go through an imaginary corridor connecting this world with an afterlife. Why would one want to put themselves through this? For love, of course. Then, a traveler has to go back but it’s a tough decision to make since the grass looks a bit greener on the supernatural side. If this story sounds too philosophical put in words, the language of dance will hopefully untangle the plot. The program combines classical and modern choreography with elements of acrobatics and Brazilian dance capoeira.

Budynok Oficeriv (Hrushevskoho 30/1), Aug 8 at 8pm. Tickets ranging from Hr 100 to 200 on sale in Kyiv box offices.

Aug. 7

Bass guitar battle

Aug. 8

Compiled by Yuliya Popova

Aug. 10

Tennis lessons for children and adults on the most up-to date tennis courts.

Wide assortment of additional services, such as:

• sparing • individual tennis training and instruction • stringing • sales of tennis accessories • fitness • training gym • therapeutic massage • fresh-bar and cafe. • Wide parking and walking area.

89, Zhovtneva str., PP Borschagivka. Tel.: 044 409 2452, 044 409 2461 044 409 2435, 044 409 2443 (Ring road area close to Akademmistechko and Zhytomirskaya metro stations). www.tennisschool.com.ua

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Provide this coupon to receive a 15% discount every Monday, Tuesday and Wednesday.

Hollywood boys party in Kyiv

Eat your heart out, Moscow! You may have had Angelina Jolie gracing the Kremlin last month but Kyiv triples the star action with Sylvester Stallone, Jason Statham and Dolph Lundgren this weekend. Hollywood’s bad boys will present their new action thriller “The Expendables� and then hit the party. The movie kicks off across the nation on Aug. 12, dubbed into Ukrainian. The story’s about a diehard group of mercenaries on a mission to depose a villain of a president somewhere in Latin America. Apart from the three machos in Kyiv, the cast of “The Expandables� includes Mickey Rurk, Jet Li, and Arnold Schwarzenegger, among others. Jean Claude Van Damme was supposed to be in it as well but he couldn’t agree on the geography of the screenplay and dropped out. Never mind, we’ve already seen him twice in Ukraine. To meet the other big boys, head to Crystal Hall on Aug. 7. We’re yet to figure out what exactly they will be doing there, apart from auctioning off a movie poster with their signatures, which proceeds will go to charity. But organizers are rushing to put a program together with some popular Ukrainian and Russian bands to entertain the big guests.

Crystal Hall (Dniprovsky Spusk 1), Aug 7 at 11pm, tel. 067 442 92 67 or 288 50 69. Tickets: Hr 500 in a fan zone, $2,500 for a table.

(Andriy Yevdokymenko)

(Maxim men’s magazine)

Models with balls

www.aceshowbiz.com

August 6, 2010

Jazz concerts are a rare find in Kyiv despite the capital’s laid-back mood. Art Club 44 and online.fm radio cooked up a great jazz teaser for the summer hoping to kick start a trend. Every Tuesday, jazz musicians hit the stage at club 44 located right in the city center. Three Ukrainian bass titans will compete on Aug 10 next. Artem Lebedev, Nikolai Kistenev and Konstantin Ionenko want to create a show like the famous American jazz trio SMV. The unique alliance of musicians Stanley Clarke, Marcus Miller, and Victor Wooten has been on a fan wish list for over 15 years.

The Ukrainian trio is yet to explode but their resume, which inlcudes work with No Smoking Orchestrar and De Phazz, is promising enough to check out the concert.

Art Club 44 (Khreschatyk 44B), Aug 10 at 10 p.m., tel. 249-4137 Tickets: Hr 50

www.kyivpost.com

Paparazzi 13

August 6, 2010

Thai boxers hit hard in Kyiv

A dragon greets guests.

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Country club Rancho Bolivar hosted professional Thai boxing championship between Ukrainian and Russian fighters on Aug. 1. This ancient type of martial arts evolved on a battlefield when warriers lost their weapons. Boxers today try to use hands as swords, forearms and shins as shields, elbows as sledgehammers, and legs as axes. Although very violent, matches are also full of rituals, ceremonial dances and Thai music during rounds. (Sergey Zavalnyuk)

Judging Junior Eurovision talent

Teams line up to greet each other before the boxing rounds

A boxer performs a ritual dance before the match, with rope tied around each arm.

Junior Eurovision song contest was held in Artek children’s camp in Crimea on Aug 1. It is an offspring of the annual international Eurovision contest among adults. Yulia Gurska from Vinnytsia won the contest and will represent Ukraine during the finals in Minsk, Belarus, on Nov 20. She was picked by votes of the jury and televoting. Singing rector of the National Culture and Arts Institute, Mykhailo Poplavsky (far left), was evaluating the rising stars and looking for potential recruits. Producer Vlad Baginsky (second), singer-actress Kamaliya (third), Deputy President of First National Channel Walid Harfouche (fourth), singer Alyosha (fifth) and vocals tutor Natalia Yefymenko (far right) judged the performance of 14 contestants, ages 10-15. (Courtesy photo)

Special thanks to: Lead Sponsor

Organizational Partner

Informational Partner

gladly welcomes teams participating in the Kyiv Post Cricket League: KCC, BUCC, Seniors, Friends, Kagarlyk Kiev Cricket Club

Results of Kyiv Post Cricket League held on 31 July and 1 August, 2010

' % "# ! # $ +)*)

1:00 PM

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Leagu

The League`s competition will last through August 8, 2010 with games at the Voskhod Stadium at 6 Pryvokzalna Street, Kyiv. You are invited with family, friends & colleagues!

Cold beer & snacks available to beat the heat & enjoy watching the game.

Thanks to everyone involved in the Kyiv Post Cricket League opening event!

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Scores: KCC - 95 runs all out BUCC 96/9 in 19 overs

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Man of the Match: Joy

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’Village Green’ Cricket

$ ' ,*

4:00 PM

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Scores: Seniors XI – 175/6 runs Kagarlyk XI – 170/6

!" & ' - !$ " Man of the Match: Wayne Zschech

$ $"# * %"( !"

1:00 PM

!" & ' / & #" Scores: BUCC – 89/10 Man of the Match: Aamir

Seniors XI – 90/2

$ $"# * ! " %"( ! ' 4:00 PM

! " & ' 0* !$ "

Scores: Friends – 195/7 Kagarlyk – 105 all out

Man of the Match: Sajjad

BUCC team photo is just after beating KCC on July 31.

Next weekend Matches: $ $"# .

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1:00 PM

$ $"# .

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4:00 PM

The ďŹ rst ladies practice on August 1.

The ladies are Irena and Inna.

Please let us know if you would like to play. To register, you can: call Iuliia Lysa, Marketing and communications manager, +380 (44) 234-3040, e-mail at lysa@kyivpost.com For more information please see www.kyivpost.com/projects/cricket

Partners:

14 Employment

www.kyivpost.com

August 6, 2010

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Kyivstar GSM A LEADING TELECOM MUNICATION OPERATOR MARKET LEADER FOR MOBILE COMMUNICATION AND DATA TRANSFER

is looking for a

BRAND MANAGER "RAND -ANAGER WILL BE RESPONSIBLE FOR THE DEVELOPMENT AND IMPLEMENTATION OF COM PANY S BRAND COMMUNICATION STRATEGY

Key Responsibilities

s 0LANNING OF CAMPAIGNS AND POSITIONING OF the brand (both strategic and tactic); s !DVERTISING CAMPAIGNS BUDGET MANAGEMENT s $EVELOPMENT AND EXECUTION OF ADVERTISING CAMPAIGNS #REATIVE -EDIA "4, 4- s /UTSOURCING TEAM MANAGEMENT WORKING WITH !DVERTISING !GENCY BOTH STRATEGIC AND tactic); s &INANCIAL -ANAGEMENT 2EPORTING s 0EOPLE MANAGEMENT

Position Requirements

s 5NIVERSITY $EGREE IN %CONOMICS -ARKETING -"! IS PREFERRED s YEARS OF PROVEN SUCCESSFUL BRAND MAN AGEMENT EXPERIENCE WITH INTERNATIONAL LOCAL COMPANIES s %XCELLENT COMMUNICATION SKILLS s &LUENT %NGLISH

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2ESPONSIBILITIES #ONTROL OVER IMPLEMENTATION OF MULTIPLE REAL ESTATE PROJECTS -ANAGEMENT OF PROJECT TEAMS AND ACTIVITIES -ANAGEMENT OF RELATIONS WITH CONSTRUCTION COMPANIES

SUB CONTRACTORS AND PERMITTING AUTHORITIES 2EPORTING ON PROJECTS DELIVERY +EY 2EQUIREMENTS p 0ROFOUND UNDERSTANDING OF REAL ESTATE DEVELOPMENT PROCESS p %XPERIENCE IN DELIVERY SEVERAL PROJECTS SIMULTANEOUSLY IN THE REAL ESTATE DEVELOPMENT AREA p -IN YEARS OF EXPERIENCE IN THE FIELD AND YEARS AT THE 0ROJECT MANAGER ROLES p %NGINEERING BACKGROUND IS AN ADVANTAGE p !DVANCED %NGLISH p 3TRONG DRIVE FOR RESULTS EXCELLENT DECISION MAKING AND NEGOTIATION SKILLS

MULTITASKING RISK AND TEAM MANAGEMENT SKILLS 3AL ARY RANGE AN EQUIVALENT OF + 53$ NET SUBJECT TO DISCUSSION WITH A SUCCESSFUL CANDIDATE

2ESPONSIBILITIES &ULL SCOPE OF PROJECT MANAGEMENT FUNCTIONS IN #OMPANYlS REAL ESTATE DEVELOPMENTS +EY 2EQUIREMENTS p 0ROFOUND UNDERSTANDING OF REAL ESTATE DEVELOPMENT PROCESS p 3TRONG 0ROJECT -ANAGEMENT )MPLEMENTATION SKILLS p 0ROVEN TRACK RECORDS OF COMPLETED PROJECTS MIN YEARS OF EXPERIENCE IN THE FIELD p %NGINEERING BACKGROUND IS AN ADVANTAGE p !BILITY TO COMMUNICATE REPORT IN %NGLISH p 4EAM ORIENTED STRONG DRIVE FOR RESULTS

DEVELOPED DECISION MAKING AND INFLUENCING SKILLS MULTITASKING 3AL ARY RANGE AN EQUIVALENT OF p + 53$ NET SUBJECT TO DISCUSSION WITH A SUCCESSFUL CANDIDATE 0LEASE SEND YOUR #6 AT EMPLOYMENT KYIVPOST COM WITH VACANCY REFERENCE CODE AT THE SUBJECT LINE

0LEASE SEND YOUR #6 AT EMPLOYMENT KYIVPOST COM WITH VACANCY REFERENCE CODE AT THE SUBJECT LINE

Please submit your current CV and Cover Letter with a reference “Brand Manager” to HR@kyivstar.net

POSITION ANNOUNCEMENT

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Duties and Responsibilities: s 4RANSLATION OF LEGAL MATERIALS INCLUDING LAWS

DRAFT LEGAL DECISIONS OTHER LEGAL DOCUMENTS AND MATERIALS RELATED TO THE PROJECT ACTIVITIES s )NTERPRETATION DURING MEETINGS WITH LOCAL GOVERNMENT PARTNERS AND COUNTERPARTS

SUBCONTRACTORS AS NEEDED FIELD VISITS AND interpretation during specific workshops and/ or trainings. s 0ROOFREADING AND REVIEWING MATERIALS RELATED TO THE PROJECT ACTIVITIES

Please e-mail CV and cover letter to Brian Bonner, chief editor, at bonner@kyivpost.com

Job Qualifications: s "ACHELORS OR EQUIVALENT DEGREE IN %NGLISH OR OTHER RELEVANT DISCIPLINE FROM A 5KRAINIAN UNIVERSITY s 4WO YEARS EXPERIENCE AS A TRANSLATOR WITH EXPERIENCE TRANSLATING LEGAL LANGUAGE s &LUENCY IN %NGLISH 5KRAINIAN AND 2USSIAN s !BILITY TO COMMUNICATE CLEARLY AND EFFECTIVELY IN %NGLISH AND 5KRAINIAN REQUIRED s 0REVIOUS 53!)$ OR OTHER INTERNATIONAL DONOR EXPERIENCE PREFERRED s +NOWLEDGE OF THE 5KRAINIAN LEGAL AND JUDICIAL SYSTEM PREFERRED Please submit resume and cover letter to office@ukrainerol.org.ua by August 13, 2010, with the position in the subject line.

No telephone inquiries, please. Shortlisted candidates will be contacted.

Представництво англійської компанії відкриває вакансію на посаду «КЕРІВНИКА ВІДДІЛУ».

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THE KYIV POST IS LOOKING FOR A PART-TIME

Marketing Associate YOUNG AND PROACTIVE PERSON WITH SOCIAL NETWORKING BASIC EXPERIENCE AND GOOD COMMAND OF ENGLISH.

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2ESPONSIBILITIES $EVELOPMENT AND IMPLEMENTATION OF MARKETING STRATEGY PROGRAMSl FOR EVERY PROJECT SITE -ANAGEMENT OF TENANTSl RELATIONS #ONTRACT MANAGEMENT +EY 2EQUIREMENTS p 3IMILAR BUSINESS EXPERIENCE IN SUCCESSFUL DEVELOPMENT PROJECTS p 5NDERSTANDING OF COMMERCIAL REAL ESTATE AND ADVERTISING MARKET p 0RACTICAL KNOWLEDGE OF LEGAL ASPECTS RELATING TO SITE LAUNCH AND TENANCY p !BILITY TO ESTABLISH AND MAINTAIN EFFECTIVE RELATIONSHIPS STRONG NEGOTIATION COMMUNICATION AND PRESENTATION SKILLS p )NNOVATIVE THINKING DRIVE FOR RESULTS

ORGANIZATION SKILLS ABILITY TO WORK AGAINST TIGHT TIME SCALES STRICT BUDGETS p -ARKETING BACKGROUND AND &LUENT %NGLISH ARE A MUST 3AL ARY RANGE AN EQUIVALENT OF p + 53$ NET SUBJECT TO DISCUSSION WITH A SUCCESSFUL CANDIDATE 0LEASE SEND YOUR #6 AT EMPLOYMENT KYIVPOST COM WITH VACANCY REFERENCE CODE AT THE SUBJECT LINE

REQUIREMENTS:

Marketing Background Experience in media marketing Positive ‘can do’ attitude Experienced PC user, advanced user of Windows, good knowledge of Microsoft Office (including Power Point) Promotion of the Kyiv Post on Facebook, Twitter (70% of time) Marketing activities assistance (30% of time): planning and organization events, special projects preparation, ad campaigns, creating advertisements and announcements in cooperation with designer, website administration, work with charity projects and mediapartnerships.

WE NEED SOMEONE WHO IS: proactive, dutiful, creative, gifted, peopleoriented, results-oriented, and stress-resistant.

Please, send your CV and cover letter with desirable salary to hr@kyivpost.com; indicate the job title in the message subject.

MINI

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DUTIES AND RESPONSIBILITIES:

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RESUME

#BTFE JO ,ZJW 6LSBJOF

Great English-language skills Enjoys working in a fast-paced, deadline-oriented environment at Ukraine’s leading English-language newspaper.

Journalism and website experience are helpful, but not required.

The position requires someone who has a positive attitude, who can quickly and accurately translate stories, letters and e-mails on occasion. The person must excel at solving problems in support of the administration, advertising and editorial staffs.

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The Kyiv Post is looking for an OFFICE MANAGER/ TRANSLATOR who is eager for career advancement.

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Chemonics International Inc. seeks a highlyqualified Ukrainian professional for the following position on the USAID Rule of Law (UROL) Project:

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16 Photo Story

www.kyivpost.com

August 6, 2010

Harvesting under a scorching sun The ongoing heat wave across Ukraine has hit farmers hard, causing drought and severely reducing some harvests. Coming after an exceptionally cold winter, this year’s scorching hot summer has killed 60 percent of expected crops in Novi Sanazhari village in Poltava Oblast, according to local farmers (1). The rich soil usually yields around six tons of grain per hectare, but this summer some farmers have struggled to harvest two tons per hectare.

Many small-scale local farmers don’t have the advantage of using modern equipment. Not only does this mean hours sweating in an old combine harvester (3), which has no air conditioning, but the outdated machines are also inefficient, losing up to 30 percent of the grain. Agrarians fear that extremely dry soil (2) will also cause difficulties for the sowing of winter crops and that the effects of the ongoing drought will be felt for some time to come.

But in bad times as well as good, Ukrainian farmers cheer themselves up with the centuries-long tradition of “obzhynsky," when community members gather and congratulate each other on having bread for the year with song and cheer.

– Story by Nataliya Horban; Photos by Yaroslav Debelyi

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