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How to o ski in el on a tight Bukovel budgett Kyiv Post staff writer Nataliya Horban shows rson can how a person ree days spend three mous at the famous ans Carpathians ski resort for only e $200. See Lifestyle, page 23.

February ry y 18 18, 2011

Ever wonder why most Ukrainians live so poorly although the nation is one of the world’s leading exporters of steel, chemicals, weapons and food? Experts blame ubiquitous corruption and insider dealing that cost the nation billions of dollars each year. Future generations will pay for today’s graft as the nation sinks more heavily into debt.

“I think the root of all evil is rampant, systemic corruption that has permeated all structures at all levels,” Security Service of Ukraine chief Valeriy Khoroshkovsky told Mirror of the Week newspaper in 2008, then last November he repeated to European Union officials that “corruption at all levels” is the nation’s biggest impediment to reform. If government would clean up its act, business experts and political analysts believe, the nation’s wealth would be far greater and spread much more widely than it is now. In the illustrations above, from left, questions have been raised about policy and spending with respect to Euro 2012, Kryvorizhstal and privatization, the grain trade, RosUkrEnergo and the gas trade, Ukrtelecom, the value-added tax and the oil trade. BY Y U R I Y O N YS H K I V an d MA R K R AC H K E VYC H ONYSHKIV@KYIVPOST.COM, RACHKEVYCH@KYIVPOST.COM

Ukraine’s reliance on foreign loans has raised its public debt to $54 billion, even as the government still hopes to borrow up to $12.1 billion more in loans from the International Monetary Fund. But does the nation really need to borrow so heavily?

Inside:

No, say a growing number of economists and investment bankers. If Ukraine’s government would stop interfering heavy-handedly in the market, end subsidies and sweetheart deals for insiders and clamp down on financial fraud, there would be no need to rack up debt that future generations will have to pay off, some argue. “Corruption makes us poor,” said Oleksandr Paskhaver, president of the Center for Economic Development. “If we eliminate corruption even on the

News Æ 2, 13, 16, 17 Opinion Æ 4, 5, 14

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lowest levels – bribes to tax authoritties, police, etc., the sum would be much greater than the IMF loans.” Putting a price on Ukraine’s losses is difficult, but the sums are staggering. The international financial watchdog Global Financial Integrity estimates that the financial system leaks $10.75 billion a year through the deliberate under-pricing of exports, overpricing of imports and the purchase of nonexistent services – assisted through offshore tax havens in Cyprus, the

Seychelles and the Cayman Islands. All are designed to ensure that profits are held offshore and out of reach of the Ukrainian tax system. Put another way, the government’s public debt of $54 billion is roughly 40 percent of the nation's annual gross national product. It’s about $20 billion more than the government’s annual budget for its 46 million citizens. In human terms, the lost money is a big reason why everything from universities to hospitals to roads Æ16

Business Æ 6 – 12

Employment/Real Estate/ Lifestyle Æ 19 – 29, 32 Classifieds Æ 30, 31

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INSIDE: • Business Focus: Swimming in Ukraine's muddy tax waters. Pages 8-12 • Kyiv Post launches “Jailhouse Watch” to spotlight abuse of lengthy pretrial detention. Page 13 • Economist: Authorities want to control workers. Page 17


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Торговая марка McFoxy выглядит как брат-близнец McDonald’s.

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В Украине нагло копируют известные бренды Катерина Панова Наткнувшись в интернете на кондиционеры Yamaha, не сразу можно сообразить, что с ними что-то не так. Японская корпорация Yamaha известна своими мотоциклами и музыкальными инструментами, но кондиционеры никогда не производила. Этот факт мало заботит киевскую компанию Сатурн-ТВ, которая называет себя официальным дилером Yamaha Electric Co., зарегистрировала соответствующую торговую марку чтобы товары легче было растаможивать, и продает под видом японской техники продукцию кустарной фабрики в Китае. «Это бизнес. Думали, раз можно – то можно», – объясняет коммерческий директор Сатурн-ТВ Андрей Свиридов. Получив судебное решение, компания поняла, что все-таки нельзя...

Влада «доінтегрувалася» в Європу аж її прямим текстом … направили в інший бік На минулому тижні зовнішньополітичне обличчя влади отримало чергового «смачного ляпаса». «Дипломатичним рукоАндрій Пишний прикладством» цього разу відзначився посол Європейського Союзу

в Україні Жозе Тейшейра. Ляпас був доволі відчутний – посол сказав, як відрізав. Ось пряма мова: «Ситуація в Україні не відповідає вимогам для того, щоб навіть обговорювати питання її членства в ЄС». Зверніть увагу на формулювання «навіть обговорювати питання членства в ЄС». Іншими словами, про вступ в ЄС з нинішньою владою навіть розмовляти ніхто не буде. Ось нам з вами полегшення візового режиму, зона вільної торгівлі та поглиблення парнерства. Як на мене, червоніти від такого публічного приниження має зовнішня політика влади, але ж з них станеться. Вони давно в Європі...

Бюсты Сталина в Грузии подлежат регистрации.

В селах Грузии описывают бюсты Сталина Kyiv Post В Кахетии, восточном регионе Грузии, началась переписка бюстов эксвождя Советского Союза Сталина. Опись происходит по всем местным селам, причем, причина и цели ее не объясняются...

Нові водії не можуть отримати права Світлана Тучинська Отримати водійські посвідчення та свідоцтва про реєстрацію транспортних засобів неможливо у багатьох містах України. У реєстраційно-екзаменаційних відділах (МРЕВ) ДАІ кажуть, що немає бланків. «Здав іспит на водійське посвідчення ще три тижні тому, але посвідчення немає до сих пір. Причому часто по телефону не кажуть, є посвідчення чи ні, мовляв, приїжджайте і дізнавайтеся», – скаржиться вінничанин Валентин Поліщук...

Украина и ЕС держат последние рубежи в переговорах по свободной торговле Юлия Раскевич Украина и ЕС ведут 15-ый ожесточенный бой в переговорах о зоне свободной торговли. И, хотя, по словам обеих сторон, 96 процентов разногласий по либерализации торговли уже утрясли, за оставшиеся четыре процента обе стороны пока стоят насмерть. Основные камни преткновения — товары сельского хозяйства и защита торговых марок. Открытие свободной торговли открыло бы доступ европейским товарам и услугам на украинский рынок, и наоборот. Для этого необходимо гармонизировать законодательство, санитарные и другие нормы, отменить пошлины и квоты на ввоз товаров. Этот процесс между Украиной и Европейским Союзом вяло идет с 2008 года, но только в конце прошлого года стал заметен некоторый прогресс. Но дата, когда зона свободной торговли может таки заработать, пока не обсуждается. Согласно самым оптимистичным прогнозам, договор может быть подписан к концу 2011 года, а начало работы ЗСТ может растянуться от 3 до 10 лет...

Погружение в маразм: Рецензия на пещерный триллер “Санктум” Алексей Бондарев История о приключениях гореспелеологов обернулась фарсом. Если бы “Оскары” давали за киноляпы и бредовые сценарии, то самый кассовый режиссер планеты Джеймс Кэмерон получал бы их намного чаще, чем за традиционные достижения в кино. Например, недавно спродюсированный им спелеологический триллер “Санктум” вполне мог бы собрать целый букет таких “горе-Оскаров”. Кэмерон пообещал аудитории зрелищный фильм с новейшими 3D-технологиями, основанный на реальных событиях. А выдал на-гора невнятное зрелище с фантастическим, даже по меркам голливудских блокбастеров, сюжетом и кучей ляпов, заметных даже простому зри-

телю, и способных довести профессиональных спелеологов до истерики...

Пенсионная реформа строится на неправильных принципах Вся пенсионная реформа затевается ради экономии в 5 млрд. гривен. При этом разрушительная экономическая политика праНаталия вительства приКоролевская вела к тому, что только за два за последних месяца в стране появилось 150 тыс. новых безработных. Только по этой причине поступления в Пенсионный фонд сократились на 1 млрд. гривен. В то же время, создание 500 000 рабочих мест даст возможность увеличить отчисления в Пенсионный Фонд на сумму порядка 4 млрд. грн в год. Вместо того, чтобы шокировать людей пенсионной реформой, правительству следовало бы заняться экономикой: стимулированием предпринимательства, созданием условий для конкуренции и свободного рынка. Именно такие меры приведут к созданию рабочих мест, соответственно, вырастут и отчисления в Пенсионный фонд...

Андреевская церковь в опасности, спасателей пока не видно Елена Загребина Киевские активисты бьют тревогу: жемчужина города, Андреевская церковь, может сползти с Андреевского спуска на Подол. Более того, Андреевский спуск остро нуждается в защите от застроек и реконструкций, говорят специалисты. Андреевская церковь, построенная в 17 веке в стиле барокко по проекту архитектора с мировым именем Бартоломео Растрелли, сейчас из-за оползней частично висит в воздухе, говорит Игорь Гурчик, координатор гражданской организации «Наша земля»...

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Five most-read stories on

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(for the week ending Feb. 17):

(за период с 10 по 17 февраля):

1. Libel Warriors 2. Tarasiuk: An ‘authoritarian’ Ukraine will never join European Union 3. Law enforcement raid on prestigious law firm sparks more fears of persecution 4. Nunn, Foley: Orphanage children unprotected from abuse, neglect 5. Trip to Washington exposes ugly truth about Yanukovych

1. У столиці Єгипту святкують перемогу революції 2. Любомир Гузар уходит в отставку 3. Янукович говорив з Онопенком, але не про те 4. Німецька преса “проїхалася” по Пшонці 5. Япония не отдаст России Курилы даже под угрозой оружия


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Leaders Talk: This week we talk to Jonathan McGhie, Managing Director of SCA

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4

HE 3#! HYGIENE PRODUCTS LIKE :EWA ,IBRESSE ,IBERO AND OTHER ARE PRESENT IN ALMOST EVERY 5KRAINIAN HOUSEHOLD 4ODAY WE INTERVIEW A PER SON BEHIND IT 3#! -ANAGING $IRECTOR *ONATHAN -C'HIE WHO EXPLAINS HOW EASY IT IS TO DELIVER THE DAILY NECESSITIES TO 5KRAINIAN POPULATION AND GIVES US A BROADER INSIGHT INTO PROS AND CONS OF DOING BUSINESS IN 5KRAINE

*/.!4(!. -C'HIE

-ANAGING $IRECTOR

DOING ANYTHING ELSE SO IT ALSO HAS TO BE FUN )F WE GO THROUGH THE DAY AND WE HAVENlT HAD A LAUGH THEN ITlS A DISAPPOINTING DAY $OES 5KRAINE DIFFER FROM OTHER COUNTRIES WHERE 3#! IS ALSO PRESENT IN TERMS OF PRODUCT RANGE CONSUMPTION VOLUME #ONSUMPTION PER CAPITA DIFFERS SIGNIFICANTLY ACROSS MARKETS AND HERE THIS CONSUMPTION LEVEL IS MUCH LOWER THAN IN SAY 7ESTERN %UROPE 4HIS CONSUMPTION DOES INCREASE WITH ECONOMIC GROWTH AND INDIVIDUAL SPENDING POWER SO WE ARE VERY OPTIMISTIC OF THE POTENTIAL IN 5KRAINE 3#! HAS BUSINESS IN MANY DEVELOPING MARKETS SO UNDERSTANDS THE DYNAMICS THAT APPLIES AND SEES 5KRAINE AS ONE OF OUR HIGHEST GROWTH OPPORTUNITIES /UR PRODUCT RANGES ARE CONSISTENT ACROSS MARKETS BUT WE HAVE A NUMBER OF DIFFER ENT BRANDS ACROSS THE WORLD

&OR AN IMPORT ORIENTED COMPANY IS IT DIF 9OU HAVE MOVED TO 5KRAINE QUITE RECENT FICULT TO OPERATE IN 5KRAINE LY HOW EASY DID YOU FIND IT TO ADAPT HERE 7E WORK WITH 5KRAINIAN CUSTOMS OFFICIALS BOTH PERSONALLY AND PROFESSIONALLY 7HENEVER YOU MOVE COUNTRY IT IS ALWAYS THE AND IT IS AN INTERESTING GAME OF CHESS OR MAYBE SAME THINGS THAT PRESENT CHALLENGES IN THE FIRST POKER IS A BETTER ANALOGY 7E ARE AN IMPORT FEW WEEKS FINDING SOMEWHERE TO LIVE SORTING BUSINESS AND HAVE TO CLEAR CUSTOMS PRETTY MUCH OUT BANKING ARRANGEMENTS OBTAINING VISAS EVERY DAY AND THAT PRESENTS ITS OWN CHALLENGES AND WORK PERMITS AND FIGURING OUT WHERE TO ON TOP OF THE LOGISTICS MANAGEMENT ISSUES THAT BUY -ARMITE #OMMUNICATION IS ALWAYS THE COME WITH BRINGING PRODUCT FROM MANY INTERNA FIRST CHALLENGE IN A NEW COUNTRY AND %NGLISH TIONAL LOCATIONS AND ACROSS THOUSANDS OF MILES IS WIDELY SPOKEN HERE IN THE BUSINESS COMMU 4HE RECENT CHANGES IN TAX CODE HAVE SEEN SOME NITY WHICH IS HELPFUL #OMMUNICATING OUTSIDE CHANGES IN BEHAVIOR FROM THE CUSTOMS DEPART OF WORK CAN BE A CHALLENGE AND OFTEN LEADS TO MENT WHICH HAVE BEEN PUZZLING WE HAVE YET TO AN ENTERTAINING GAME OF CHARADES WITH SHOP EXPERIENCE A CHANGE THAT RESULTS IN AN EXPECTA KEEPERS ESPECIALLY IF ) AM TRYING TO BUY ONE OF TION OF LOWER DUTY (AVE THE RECENT REGULATORY TRIBULATIONS RESULTED IN BIG LOSSES FOR YOUR COMPANY 0ROFESSIONALLY IT HAS BEEN EXCITING MOVING 7ElVE HAD CHALLENGES WITH INDICATIVE PRICING TO AN ORGANISATION THAT HAS NOT HAD A RESIDENT AND 6!4 PRODUCTS MAGICALLY CHANGING THEIR MANAGER BEFORE PREVIOUSLY THE BUSINESS HERE IMPORT PRODUCT CODE AND ALSO SOME DELAYS !S WAS MANAGED FROM -OSCOW ON A FUNCTIONAL BASIS RATHER THAN AS ONE TEAM 4HIS GIVES A LOT ) SAID ITlS FUNNY HOW THE DUTY RATE NEVER DROPS OF SCOPE FOR DEVELOPING THE BUSINESS STRUCTURE WHEN THIS HAPPENS 7E ARE AWARE OF THE COST AND ITlS SIGNIFICANT VERY SIGNIFICANT BUT WE ARE OPTIMIS AND PROCESSES AS WELL AS DRIVING GROWTH TIC THAT WE WILL SEE IMPROVEMENT IN THIS AREA 7HEN WAS THE 3#! OFFICE OPENED HERE OUR OWN PRODUCTS

!PART FROM CUSTOMS WHAT OTHER LEGISLA 7ElVE BEEN HERE FOR YEARS FIRST OF ALL TIVE ADMINISTRATIVE PROBLEMS DO YOU FIND AS WITH A 2EPRESENTATIVE /FFICE UNTILL AND WE CREATED OUR OWN LEGAL ENTITY 3O WE HAVE IMPEDING YOUR OPERATIONS IN 5KRAINE 4HERE ARE SOME CURIOUS ADMINISTRATION PRAC HAD A FULL COMPANY HERE FOR ABOUT YEARS TICES AND REQUIREMENTS HERE AND IT IS INCREDIBLE 9OU STARTED AS A COMPANY PRODUCING TO ME HOW DIFFICULT WE CAN MAKE SOME VERY BASIC FORESTRY 7HAT MADE YOU SWITCH TO PAPER ACTIVITIES ,IKE ALL OF THE BIG INTERNATIONAL COMPA AND HYGIENE PRODUCTS PRODUCTION NIES WE ARE GOOD CORPORATE CITIZENS WE COME TO A )T HASNlT BEEN A SWITCH AS SUCH JUST AN COUNTRY MAKE OUR INVESTMENT WE PAY OUR DUTIES EXPANSION OF OUR BUSINESS ACTIVITIES 3#! AND OUR TAXES AND WE WILL DO SO TRANSPARENTLY WAS FOUNDED IN WITH THE MERGER OF TEN AND HONESTLY EVERY DAY OF THE WEEK AND ITlS FRUS 3WEDISH FORESTRY COMPANIES AND IT WASNlT UNTIL TRATING WHEN THE PROCESSES THAT ARE PUT IN PLACE TO THAT WE STARTED TO BUILD UP A HYGIENE MAKE SURE THAT WE DO ARE HOW CAN ) SAY DIFFICULT BUSINESS &ORESTRY AND THE ASSOCIATED ACTIVI ) BELIEVE THERE IS A SIGNIFICANT OPPORTUNITY FOR THE TIES LIKE PULP PRODUCTION ARE CYCLICAL IN NATURE AUTHORITIES HERE TO REDUCE BUREAUCRACY AND RED AND HAVING A STRONG &-#' BUSINESS HELPS US TAPE THAT WOULD NOT IMPACT FISCAL COMPLIANCE BUT BALANCE THOSE CYCLES )TlS ALSO ABOUT POTENTIAL WOULD GIVE COMPANIES A BETTER CHANCE TO FOCUS ON AND SCALABILITY AND IN CONSUMER PRODUCTS WE GROWING AND CREATING WEALTH HAVE A HIGHER GROWTH POTENTIAL THAN IF WE 7HAT BENEFITS DOES THIS COUNTRY HAVE FOR STAYED ONLY IN OUR ORIGINAL CORE BUSINESS YOU 7HAT IS YOUR IMPRESSION OF THE EXPERI &OR MY FAMILY ITlS ANOTHER CHANCE TO LIVE IN A ENCE OF WORKING WITH 5KRAINIAN PERSONNEL NEW ENVIRONMENT MAKE NEW FRIENDS AND EXPERI 7HAT IS YOUR PERSONAL MOTIVATION STYLE ENCE A BIG CHANGE FROM OUR PREVIOUS LIFE IN !SIA -Y 5KRAINIAN COLLEAGUES ARE EXCITED AND &OR ME SPECIFICALLY ITlS REALLY EXCITING TO BE HERE MOTIVATED BY THE SAME THINGS MY FORMER COL IN A MARKET THAT IS GROWING AND DEVELOPING ) LEAGUES IN 5+ 4AIWAN AND 6IETNAM WERE BUT COULD BE BACK IN THE 5+ ARGUING WITH 4ESCO TO OF COURSE THERE ARE SOME CULTURAL DIFFERENCES WORK OUT WHERE THE NEXT PERCENT OF GROWTH WHEN IT COMES TO GIVING FEEDBACK TO THE BOSS COMES FROM BUT HERE WE REALLY GET TO MAKE HERE )lM NEVER LEFT IN ANY DOUBT WHAT THEY PLANS WITH DECENT DOUBLE DIGIT GROWTH NUMBERS THINK OF MY IDEAS WHICH IS GREAT )N THE WIDER CAN BRING ABOUT CHANGE AND HAVE THE CHANCE TO BUSINESS COMMUNITY ) MEET A LOT OF 5KRAINIAN REALLY SEE PEOPLE AND BUSINESS GROW 4HAT FOR BUSINESS PEOPLE WHO INSPIRE ME WITH THEIR ME IS A MUCH MORE INSPIRING WAY TO SPEND SOME PROFESSIONALISM AND PASSION 7E MUSTNlT FOR YEARS IN THE SECOND HALF OF MY LIFE GET WE SPEND MORE TIME AT WORK THAN WE DO

www.eba.com.ua

The Know-How of the New Tourist Fee tarting 1 January, 2011 hoteliers of Ukraine are left to their own devices with no instructions as to how to administrate the new tax and anticipating imminent fines, since the introduction of a special tourism payment fee by the Decision of the State City Administration in Kyiv. The new fiscal regulation first emerged in the Tax Code of Ukraine which was forcefully enacted in the beginning of this year. With no clarifications from authorities, collecting money to the state budget that has been approved containing the said tax may appear as painstaking both for hotel business operators and the local tax authorities. Among the range of local taxes envisaged by the newly adopted Tax Code there is a tourism fee, which is supposed to be paid by travellers who arrive to the administrative territory, where such fee is introduced by local authorities. Just as the year was coming to an end, on 30 December 2010, Kyiv City Council issued the Decision No. 573/5385 approving Budget of Kyiv City for 2011. In particular, this decision foresees payment of a local tax – tourism fee. Payers of such fee will be citizens of Ukraine, foreigners who arrive to the territory of Kyiv and obtain services of temporary residence like overnight accommodation. The fee amounts to 1% of the sum paid for accommodation. Currently, there is no clarity as to how the fee is going to be administered. No instructions or recommendations as for requirements to documentation of such administration have been issued to help the hotel business with reporting. An across-the-board fee existing in many European cities means paying a fixed amount which varies within 1-2 Euros per room per person is a convenient and predictable mechanism of tax collection, unlike the percentage from the price paid for accommodation. Still, many market operators in Ukraine point out that percentage fee is also convenient for them to administrate provided they receive clarifications regarding a number of vague issues. Another area of concern is exceptions for people who are freed from such kind of payment. The latter cover disabled persons, children of the disabled, people accompanying the disabled and those travelling on business. Questions arise when it comes to certification of the status of such persons in certain cases. Besides, people arriving to Kyiv on business make a very substantial part of the whole bulk of city visitors. That is why, excluding such travellers from the list of persons obliged to pay the tourism fee will also lead to shortfalls in city budget. The last straw is definitely lack of documents which can be classified as proof in case of foreign travellers on business, who have no such reporting requirements outside Ukraine, in the EU, the United States etc. While the regulators are keeping silence, the hoteliers are tolling the alarm bell, asking for clarifications and trying to suggest alternative ways to efficiently administer the ambiguous payment.

Revenue Manager, Radisson Blu Hotel s a transparent organization, we need to be always ready to implement new changes from authorities and it is our responsibility to be compliant. Tourism tax is a practice of levying tax to prosper the city tourist infrastructure – though not widely spread – rather common in Europe. While introduction of the 1% from room rate tourist tax in Kyiv is accepted as natural course of actions by hoteliers of Ukraine in view of the influx of tourists prior to EURO 2012, there are some difficulties related mostly to administration of the tax and technical aspects. NATALIYA Vernyhora The proposed mechanism of fee exemptions is seen as labor intensive, and such that could invite legal disputes regarding the proof of the guest’s purpose of travel. The existing document used during check-in process – registration card, signed by all guests - does allow the guest to personally declare his/her trip as business or leisure - which should be sufficient proof (as not specified otherwise in legislation). Should we have had a chance to suggest a more efficient way of levying tourist tax, we would incline towards a fixed fee - as more in line with European standards.

A

Sales& Marketing Director, Premier International, Hotel Management Company o implement the tax we need the tools to identify the exemptions - business travelers, disabled people etc. There are no instructions on what documents can prove their status, especially when it comes to foreigners. With no exemption for business travelers the mechanism would be easier and even more beneficial for the state. In many cases it is complicated to prove guests are on business trip - e.g. foreigners who do not have business trip certificates. TANYA Podgoretska Fixed amount depending on hotel average room rate, e.g. 5 & 10 UAH respectively with no exemption for business travelers - it would bring more tax income and would be easier to administrate, forecast and control.

T

2%')/.!,.EWS What Prevents Women from Developing Successful Business in Ukraine?

T

he EBA-IFC Round Table focusing on regulatory barriers gathered Donetsk local authorities, representatives of businesses community, women organisations and mass media. Participants of the meeting underlined the importance of women’s participation in social and economic development of Ukraine. IFC experts presented a survey of the investment climate in Ukraine as seen by business, trying to explain how three key regulatory factors: obtaining permits, undergoing state inspections and technical regulations procedures, are perceived by business-ladies in terms of their complexity. As per IMF, simplification of regulatory burden will positively influence companies headed by businesswomen.

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4 Opinion

www.kyivpost.com

February 18, 2011

Editorials

As I see, the patient is recovering

IMF waking up? On Oct. 15, 2009, when Ukraine was erratically governed by President Viktor Yushchenko and Prime Minister Yulia Tymosheno, the Kyiv Post published an editorial called “Wake up, IMF” in which we urged the International Monetary Fund to stop lending Ukraine billions of dollars. Why? At the time, we argued that “Ukraine’s citizens will have to pay more in taxes to cover for their leaders’ gross mismanagement of the nation’s economy.” Then, many questions arose about government spending. The IMF loan indirectly enabled the National Bank of Ukraine to spend billions of dollars to bail out the nation’s ailing banks. Up to $1 billion of that alone was spent on Nadra Bank. Now we hear that some of it was allegedly embezzled by the bank's former chief executive officer, Ihor Gilenko, and others who remain fugitives from justice. Our warnings against further IMF lending are even stronger today. An IMF mission in Kyiv this week left without saying whether Ukraine would get a new $1.5 billion tranche from a $15 billion credit line. We hope this is a sign that even the IMF may have had enough of government mismanagement. If so, it would be a welcome about-face for an institution that has shown its primary motive is to help Western banks through macroeconomic stability, not by acting in the interests of average citizens of the recipient nation. But the IMF sent mixed signals. It also issued a statement on Feb. 15 that suggested the next tranche will be forthcoming because “the authorities’ economic program … is broadly on track and agreement has been reached on most policies to achieve program objectives for 2011.” Some positive changes have come from the IMF lending, including conditions that require a gradually end to subsidized household utility rates and an increase in the pension age from 55 to 60 for women. (It is already 60 for men). However, on balance, the IMF loans are not worth the billions of debt that future generations of Ukrainians will have to pay off. In 2009, IMF leaders admitted the institution is a financial “doctor,” not a “cop” – meaning it doesn’t delve into alleged misspending by governments. Too bad. The performance of Ukraine's government is even more abhorrent today than when Yushchenko and Tymoshenko clung to power. As today’s cover story “Bled Dry” shows, the nation is losing billions of dollars because of arguably rigged privatizations of state assets, unfair grain export quotas, inside favoritism – significantly through the value-added tax program – and the usual assortment of legalized schemes that those in government cook up. IMF loans in such conditions do nothing more than mask systemic corruption. The money cushions today’s economic shocks by mortgaging tomorrow’s future. That future looks bleaker with each successive loan. Last year was expensive for Ukraine: state debt surged by 36.4 percent to $52.3 billion. As Kenneth Rogoff, a Harvard University professor and former IMF chief economist said in 2009: “People think the IMF is tough. The truth is it finds it almost impossible to say no. The IMF is lending in places like Ukraine and Eastern Europe and over time it’s just going to let them dig a deeper hole.” So true – then and now. This is a rich country, or should be, if it weren’t being bled dry by those who are running the place and their friends.

Smokescreens One of Ukraine’s worst exports is also an illegal one. The nation is a gateway for cigarettes smuggled to the European Union. Many nations in the 27-nation bloc of democracies have wisely improved public health by raising the prices of their cigarettes through tax hikes, the best way to reduce smoking. Meanwhile, in Ukraine, tobacco companies each year keep making billions more cheap and lightly taxed cigarettes than even Ukraine’s heavy-smoking population can inhale. Naturally, with Ukraine’s cigarette taxes and prices so much lower than its EU neighbors, the excessive production provides a powerful financial incentive for cigarette smugglers. Just how powerful? This month alone, dozens of Romanian police and customs officials were busted on suspicion of aiding the illegal trade in cigarettes from Ukraine. On Feb. 11, Slovak and Hungarian authorities confiscated 13,000 cartons of cigarettes being smuggled from Ukraine. Also, six Ukrainian crew members of a ship have been arrested in Greece on suspicion of smuggling more than 4,000 boxes of cigarettes. Meanwhile, the tobacco industry in Ukraine falsely warns the government against raising cigarette taxes out of fear that the nation will become a destination for cigarettes smuggled from abroad. Nonsense. It’s the other way around. Ukraine’s poor public health policies, including cheap cigarettes, must change. Higher cigarette taxes are good for the nation and – as the recent smuggling cases show – for everyone else, too.

NEWS ITEM: Estimates vary, but all of them show that billions of dollars each year get siphoned out of Ukraine or never reach government coffers for many reasons, from insider tax breaks and non-transparent privatizations of state assets to no-bid government contracts. Meanwhile, as the nation loses money, it racks up more public debt – now at $52.3 billion – through international loans, including from the International Monetary Fund.

Showdown coming over free speech VA L ENTY N NA LY VA ICH ENKO

The attempt by the current government to persuade the world that there are no limitations on freedom of speech in Ukraine is a common Soviet-era reaction to a huge problem. It is abhorrent when the international community points out significant setbacks of democratic norms in Ukraine, but President Viktor Yanukovych’s administration pretends to be blind and seeks to blame others. These tricks are widely known. I am deeply troubled with the current government’s attitude and response. Whom do they cheat – themselves, us, or the whole world? They have effectively stopped the development of the country and turned it back to the times of censorship and lies. Recently, Freedom House excluded Ukraine from its list of free countries, and Reporters Without Borders states that, in 2010, Ukraine lost 42 positions in terms of freedom of speech. Only narrow-minded people fail to see these obvious setbacks. This was the first significant setback for Ukraine

Æ We cannot compromise on independent, free media since 2004. We have grown tired of useless statements about democracy and European integration. Not only does the opposition in Ukraine demand the restoration of democracy, but democracy in itself is a principle that cannot be molded by the current government officials. We not only speak about the problem, but also know how to deal with the issue. It is of utmost importance that the world not be indifferent, nor silent, about the antidemocratic situation in Ukraine. Violations of democratic liberties and the harassment of the opposition, civic activists and media – must stop today! We cannot compromise on free and independent media. The truth must be told. We will continue to fight for these principles. Valentyn Nalyvaichenko, chairman of the political council of Our Ukraine party, is the former head of the Security Service of Ukraine.

Letter to the editor Published by Public Media LLC Jim Phillipoff, Chief Executive Officer Brian Bonner, Chief Editor Deputy Chief Editors: Katya Gorchinskaya, Roman Olearchyk Editors: Alexey Bondarev, Valeriya Kolisnyk, James Marson, Yuliya Popova Staff Writers: Tetyana Boychenko, Peter Byrne, Oksana Faryna, Natalia A. Feduschak, Oksana Grytsenko, Kateryna Grushenko, Nataliya Horban, Vlad Lavrov, Olesia Oleshko, Yura Onyshkiv, Kateryna Panova, Mark Rachkevych, Yuliya Raskevich Nataliya Solovonyuk, Maria Shamota, Irina Sandul, Svitlana Tuchynska Photographers: Oleksiy Boyko, Joseph Sywenkyj. Photo Editor: Yaroslav Debelyi Chief Designer: Vladyslav Zakharenko. Designer: Angela Palchevskaya Marketing: Iuliia Panchuk Web Project: Nikolay Polovinkin, Yuri Voronkov, Maksym Semenchuk Sales department: Yuriy Timonin, Yulia Kovalenko, Maria Kozachenko, Elena Symonenko, Sergiy Volobayev Nataliia Protasova, Subscription Manager Svitlana Kolesnykova, Newsroom Manager Anastasia Forina, Office Manager

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Femen: Low on brains, big on hypocrisy -To The Editor: In the Feb. 4 edition of the Kyiv Post (Yanukovych: Sexist-in-chief), Maria Popova, a member of the Femen women’s group, disparaged Ukrainian President Viktor Yanukovych for inviting investors to come to Kyiv to experience “Ukrainian women taking off their clothes in spring.”

What is there to criticize? Yanukovych can hardly hope to entice investors with anything else his country has to offer these days: “Come to see our broken infrastructure!,” “Have a look at our begging pensioners!,” “Enjoy one of the most corrupt judicial systems on earth!,” “Try to navigate the least business friendly bureaucracy in Europe,”

“Pay bribes to be let go by vodka-drinking policemen for speaking English after midnight on Kreshchatyk.” None of these slogans will lure investors of sound mind to Ukraine, so the president went for the only tangible asset Ukraine currently has: Ukraine’s young women. Femen reacted irately to Æ14

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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Opinion 5

February 18, 2011

Will Ukraine stay free under Yanukovych?

Verkhovna Rad Speaker Volodymyr Lytvyn (C) takes shelter under an umbrella as eggs rain down on him in the smoky chamber of the Ukrainian parliament are visible during a session in Kyiv on April 27. Opposition lawmakers hurled eggs and smoke bombs inside Ukraine’s parliament as the chamber approved an agreement allowing the Russian Navy to extend its stay in a Ukrainian port until 2042. (Oleksiy Boyko)

and anti-Western, and therefore any coalition that includes such a political force cannot honestly be described as “reformist.”

Collapse of institutions Parliament became a rubber-stamp institution under Yanukovych for the first time in its history, because Kuchma never had a stable majority. Yanukovych’s Stability and Reforms coalition has bought in 50 opposition deputies, giving it more than 260 in total in the 450-seat Verkhovna Rada. The courts are in far worse condition today than under Kuchma. Supreme Court Chief Justice Vasyl Onopenko told the Kyiv Post that “courts as judicial bodies and judges have lost their independence. This is a direct threat to the judicial protection of human rights.” After the summer 2010 reform of the judiciary, “the Supreme Court has been denied the ability to perform its constitutional function,” Onopenko said. “No one guarantees the unity of case law and equal application of laws in state courts. The Supreme

Court, which previously did it, is now deprived of such powers.” Yanukovych has marginalized the Supreme Court as personal revenge for its December 2004 annulling of his second-round election victory. In a Feb. 11 interview with the BBC, Yanukovych again repeated that the Supreme Court had infringed the constitution in 2004 when it annulled his election and that he had won a “free election.” Under both Kuchma and Yanukovych, the unreformed “siloviki,” or security forces -- the Security Service (SBU), the Interior Ministry (MVS), and the Tax Police -- have been used against the political opposition and independent media. Prime Minister Mykola Azarov led the Tax Police throughout its first seven years of existence (19962002). The SBU under Yanukovych has adopted authoritarian tactics against academics, NGO activists, politicians, and journalists for the first time since under its predecessor, the Soviet Ukrainian KGB, in the pre-Gorbachev era.

Æ14

European Union needs Ukraine as much as nation needs EU NATA L I A A . FEDUSCHAK

LVIV, Ukraine – Sometimes the question needs to be asked: What does Ukraine’s governing elite really want from the European Union? Two answers to that question have been on display in Ukraine in recent weeks. One has come in the form of sometimes angry letters and statements from Party of Regions folks addressed to European officials that essentially demand Brussels help Kyiv bring former Prime Minister Yulia Tymoshenko to justice for alleged crimes committed at home. The other, more subtle and less publicized, was evident on an intimate stage in Lviv the other week when one of Tymoshenko’s supporters, politician Andriy Shevchenko, took part in a debate series that brings together European cultural heavyweights.

WITH MARINA VARLAMOVA

Do you think that smoking must be banned in public places? Yuriy Trakhimenko, student: “As far as I know, a law was recently adopted that requires both smoking and non-smoking areas are established in cafés. I believe smoking must be banned in public places, even outdoors. If authorities really punished individuals smoking in public places, I would not be smoking here at the moment. Moreover, I want to quit smoking, and the ban would be one more step to it.”

TA R A S K U Z I O

Some Western policymakers continue to argue that Ukraine’s political system is unlikely to evolve into a full authoritarian system along the lines of Russia and Belarus. President Viktor Yanukovych will slow down his authoritarian blitzkrieg, they argue, and the system will stabilize into a semi-authoritarian system. In other words, Ukraine will stabilize at “partly free,” the semi-authoritarian status that Freedom House gave it throughout the Leonid Kuchma era and to which it returned in 2010 after Yanukovych’s first year in office. An alternative viewpoint that’s gaining ground is that Ukraine will decline further to “not free,” the full authoritarian status that independent Ukraine has never held. If this were to take place, Ukraine would join the eight authoritarian ex-Soviet countries (Russia, Belarus, Azerbaijan, and the five Central Asian states) that are classified as “not free” by the U.S.-based rights watchdog. The Yanukovych administration has moved farther down the path of authoritarianism in only one year in office than Kuchma did in a decade. Both administrations resorted to taking political prisoners. Under Kuchma, members of UNA-UNSO (Ukrainian National Assembly-Ukrainian People’s Self-Defense) were imprisoned for their alleged involvement in the March 2001 riots. Under Yanukovych, former Prime Minister Yulia Tymoshenko and her former cabinet members are either under arrest or threatened with criminal charges. Under Kuchma, elections were falsified in 1999 and 2004 -- on both occasions with the assistance of Yanukovych at the local and national levels. Under Yanukovych, local elections were falsified last year. Free elections can only be trusted to democratic forces such as Yushchenko, under whose watch highquality elections were held in 2006, 2007, and 2010. Yanukovych is destroying the institution of free elections that brought him to power. In the 2002, 2006-07, and 2010 parliaments, Kuchma and Yanukovych both sought to bribe, coerce, and blackmail opposition deputies to defect to the ruling coalition. The Communist Party never entered government under Kuchma, but has joined both coalitions established by Yanukovych: the anti-crisis coalition in 2006-07 and Stability and Reforms since 2010. The neo-Stalinist Communist Party is anti-reform

VOX populii

At first blush, this varied approach could merely be attributed to political bravado; after all every politician, irrespective of nationality, wants to look good in the eyes of their respective audience. Yet a deeper assessment suggests that how Ukraine’s political elite approaches Europe and its varied institutions these days speaks increasingly of a generational divide that is evident with each passing day. It is the kind of divide that has fostered revolution in Egypt and promises to become more vociferous in other countries of the Middle East. The debate was co-sponsored by an entity called Eurozine, along with Lviv’s Center for Urban History of East Central Europe, a private academic foundation. Eurozine is a network of Europe’s leading cultural journals. Through its netmagazine, it not only promotes its 75 partner journals, but connects cooperating magazines and institutions to help foster new, and often, divergent ideas. Since 2009, Eurozine has been conducting a debate series among prominent thinkers. This year, the topic was to look at the rise of nationalism in Europe. Lviv was chosen as the backdrop for the

debate. At the crossroads of European culture, it has been home to many nationalities for centuries. The fabric of its multicultural life was virtually destroyed during World War II, but historical and cultural memory is making a strong comeback, as is nationalism. Shevchenko’s sparring partner was David Van Reybrouck, an award-winning Flemish writer, playwright and cultural historian who lives in Brussels. While rising nationalism was indeed explored, the discussion also became a discourse on the fallibilities of the European Union. Although he is a unionist, Van Reybrouck was quite critical of the body: The EU is too bureaucratic; he wondered if its nations could truly live together in harmony and cede enough autonomy to allow the union to work; and noted that sometimes its new members, after years of clamoring to get in, prove to be unruly. Hungary with its new oppressive media law is just the most recent example. All these collective problems are reason for Europe’s lethargy in accepting new members. “The European dream isn’t believed in Æ14

Lyubov Dalchenko, student: “I think the government should ban smoking in public places. However, there are people who are smokers, so they should be allowed to smoke in special smoking areas. I also believe that people should not smoke on the streets because sometimes, being not careful enough, they can hurt a person or burn their clothes with a cigarette.” Alla Fonotova, government executive: “I believe it should have been banned long ago. Fines would be a good punishment for people smoking outdoors. However, when we speak about buildings, their owners should think of areas where people could smoke.” Volodymyr Gelyuk, tour operator: “Walking in the street, I usually smoke. I would pay fines if there was such a punishment, but nowadays it is up to a person whether to smoke or not in public places.” Yevhen Manevych, manager: “Yes, I believe that smoking must be banned in public places. Even when a café (or another public place) has two areas – smoking and non-smoking ones – they must be totally separated. I mean there should be no air contact between those areas. Otherwise, people from the nonsmoking area may still breath in the cigarette smoke and smell.”


6 Business

www.kyivpost.com

February 18, 2011

ArcelorMittal: ‘This situation can’t be considered normal’ BY V L A D L AV R OV LAVROV@KYIVPOST.COM

ArcelorMittal, one of Ukraine’s largest foreign investors, cried foul this week saying that it is being harassed through endless tax inspections and pressure by state authorities. The company, which runs Ukraine’s largest steel mill in Kryvy Rih, said it is owed hundreds of millions of hryvnias in overdue tax refunds by authorities and is considering establishing a separate department to respond to twicedaily inspections by state bodies. ArcelorMittal Kryviy Rih, the Ukrainian arm of the world’s biggest steel producer, has come under consistent pressure from the authorities in the last year. Last year, it complained the government was using administrative pressure to renationalize the plant, which it bought in 2005 for $4.8 billion. The authorities had accused the company of violating its purchase agreement by not investing in the plant and social programs. The company eventually fought off the claims in court. Rinat Starkov, chief executive of

ArcelorMittal Kryviy Rih, said the company was owed Hr 2.3 billion ($288 million) in value-added tax (VAT) refunds as of the end of 2010. Refunds owed to the firm grew at a rate of Hr 300 million per month last year, according to Starkov. “The question of failing to return VAT was a serious problem for us for the whole of 2010 and, unfortunately, we don’t yet see any serious improvements in this matter, or even the desire of the government to do something about this situation,� he said at a press conference on Feb. 14. Starkov added that ArcelorMittal had been forced to pay taxes in advance amounting to Hr 1.2 billion by Dec. 31 last year. The company is also coming under the watchful eye of zealous state inspectors who carry out an average of two checks per day, according to Starkov. He said the number of inspections grew by 40 percent in 2010 compared to 2009. Ukraine has a dismal investment climate and has, as a result, attracted only a tiny amount of foreign direct investment compared to the levels that

ÆOn the move DEJAN DJORDJEVIC was appointed managing director of hospitality business at ESTA Holding, the real estate arm of System Capital Management, which manages the assets of Ukraine’s richest man, Rinat Akhmetov. Djordjevic will manage two five-star hotels, Kyiv’s Opera Hotel and Donetsk-based Donbas Palace, and will also run the new development project of a three-star hotel in Donetsk, which is set to open in 2012. Djordjevic has 19 years of experience with the Hyatt hotel chain in Moscow, Almaty and Belgrade. Prior to joining ESTA Holding he had worked with Alatau Hospitality for three years and was responsible for the asset management of the Four Seasons Bora Bora as well as two luxury hotel development projects in Almaty and the Seychelles. Djordjevic is a graduate of the University of Belgrade.

have flowed into neighboring Poland, for example. When the nation’s largest investor is treated this bad, observers say it raises questions about whether President Viktor Yanukovych’s administration is really serious about attracting more investment that Ukraine so desperately needs to fuel sustained economic recovery and long-term growth. Troubles facing ArcelorMittal last year were not isolated incidents. Since acquiring the Kyrvy Rih steel mill in 2005, the world leading steel producer has seen its top managers shot at by local gangs and top Ukrainian officials repeatedly threaten to challenge its ownership of the plant. “This situation can’t be considered normal, given that it substantially undermines the attempts of Ukraine to create the image of a country with an attractive investment climate,� Starkov said. Starkov’s words paint a very different picture to those of the presidential administration. Iryna Akimova, the president’s deputy chief of staff, told the Kyiv Post in a recent interview that the government at the end of last year had begun to

Formerly called Kryvorizhstal, the Kryviy Rih-based steel mill owned by ArcelorMittal is the largest in Ukraine. by By some accounts it is also the largest metallurgical plant in Europe. (Natalia Kravchuk)

“gradually remove� the majority of “sore spots� in relations between the government and ArcelorMittal and the

question of VAT refunds. Kyiv Post staff writer Vlad Lavrov can be reached at lavrov@kyivpost.com

Send On the Move news to otm@kyivpost.com or contact Kateryna Panova and Oksana Faryna at 234-6500. It should include a photograph of the individual who has recently been appointed to a new position, a description of their duties and responsibilities, prior experience as well as education. Note: The Kyiv Post does not charge for publishing these notices or any news material.

KONSTANTIN MAGALETSKY was promoted to principal of Horizon Capital, a regional private equity fund manager. In his new position Magaletsky will oversee the company’s investments in the consumer and industrial sectors of Ukraine, Belarus and Moldova. Magaletsky joined Horizon Capital as a senior associate in 2009. Before that he had over seven years of experience in management consulting and financial management with Deutsche Bank UK, Deloitte, SAP and Apple Consulting. Magaletsky received his Master of Business Administration from University of Chicago Booth School of Business in the U.S. and a master’s in economic cybernetics from Kyiv National University of Economics. He is a certified management accountant, certified accounting practitioner and SAP-certified financial consultant.

DENIS ZAKHARENKO was appointed deputy general director for marketing at Astelit, a leading Ukrainian mobile telecommunications service operator which operates under the life:) brand. Zakharenko has 12 years of experience in the telecommunications market. Before the appointment, Zakharenko worked at Kyivstar since 2001, where he was strategic chief marketing officer. Zakharenko graduated from Kyiv’s National Technical University. He also holds a degree in marketing and economics from the International Finance University, as well as a Master of Business Administration from the International Institute of Business Relations in Kyiv.

MARK MAGALETSKY was appointed head of infrastructure and energy at the Ukraine office of the European Bank of Reconstruction and Development (EBRD). He will be overseeing EBRD operations in the transportation, municipal infrastructure, energy and natural resource sectors in Ukraine, as well as policy dialogue with the government. Magaletsky joined the bank in 1998 and has extensive experience in Ukrainian infrastructure operations in both state and private sectors. Prior to joining the EBRD, he worked for Bain & Company, a leading international strategic consultancy. Magaletsky is a graduate of Kyiv National University of Economics.

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Business 7

February 18, 2011 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 OLGA PIKULSKA

Facebook, Twitter can help enhance brand, productivity Social media are not just for keeping in touch with friends, but also an effective tool to enhance companies’ image, popularity and productivity. They offer the opportunity to communicate with current and potential clients and journalists, as well as creating small- and large-scale public relations campaigns. But many companies in Ukraine have a long way to go to take full advantage of social media, such as Facebook, Twitter and blogs. There are plenty of opportunities and risks involved. Each firm needs a strategy to take best advantage, and avoid pitfalls. The media landscape has undergone a revolution over the last decade. The key change is that the traditional media professional is no longer a gatekeeper who can systematically admit or deny information. Consumers program their own print, TV, or radio, and download what they want to their personal devices. Social media can take many different forms, including Internet forums, blogs, micro blogging, wikis, podcasts, picturesharing outlets, video, rating and social bookmarking. It is often seen as trendy, accessible and interactive, yet controversial in terms of its reach, intimacy and permanence. Naturally, this huge potential can be used at a corporate level. The company should carefully research social tools and determine those that overlap with their business objectives and strategy. Moreover, management should think twice whether it is ready to tackle greater exposure, being in the public eye and handling the unpredictability of ever-changing internet environment. The practice of using new media may be not as glamorous as it seems at first glance. There are several points to bear in mind before launching a social media campaign, including questions of privacy. Given the porosity of online environment, it is much harder to direct your message to the necessary audience, as your information runs the risk either

Æ Social media provide ways to reach clearly defined business goals of turning into spam or reaching the wrong receiver. With this in mind, we should take an innovative look at the target audience. Our online and offline communities are very different from each other. Even within these two groups there can be numerous sub-communities we’d like to address. Your message, therefore, can’t be uniform – it should be tailored separately for each online community. Once two-way communication has been established, another challenge arises for a company and its employees – greater involvement. Involvement means genuine dialogue, which in itself can be challenging. Dialogue requires disclosure of information that makes the management of the company vulnerable. It is the same as talking on a crowded train, where all your conversations can be heard. Greater openness seems to be a fearful reality for many companies regardless of the benefits it brings about. Thus, before plunging into the blogosphere, for example, where you take an obligation of providing regular (and eye-catching) posts, make sure you correctly gauge your strengths and don’t promise too much. A social media campaign will not deliver tangible results unless there is a list of clearly defined goals and expectations. As in any business enterprise, research, planning, setting of objectives and evaluation are paramount. Back in 2008, British Airways initiated a social media campaign for launching OpenSkies, a new airline, which incorporated blogging and feedbackgathering techniques. Through blog posts the company introduced people

to OpenSkies, recruited flight attendants, unveiled cabin classes, shared a time-lapse video of the painting of the first plane, discussed the meal service and shared the experience of the inaugural flight. The results of social media marketing were impressive: Pre-launch anticipation was achieved; community co-creation of the brand was demonstrated; widespread word-of-mouth and inbound links from forums, blogs and communities became a common thing; and significant advantages in search engine optimization, resulting in substantial organic search traffic, were achieved. As long as you plan carefully and know exactly what you are pursuing, a social media campaign can deliver tremendous results through two-way dialogue with your target audiences. In Ukraine, the most popular use of social media by companies is by use of traditional marketing in social networks, which takes the form of a monologue and excludes interactive communication. Increasingly popular is social media marketing, involving communication between the brand and the audience – a great way to get feedback. What is really lacking is involving marketing, which implies not only communication between the brand and the audience, but also the interaction within the audience itself. When people are talking about your company and you can watch what they are saying, you have a great tool for assessing their real opinions about what you’re getting right and wrong. Olga Pikulska is public relations manager at Paritet law firm in Kyiv. She can be reached at olga.pikulska@paritet.ua

In case you missed them, read the last five Business Sense columns by experts online at kyivpost.com Feb. 11 with Timothy Ash, global head of emerging markets research at the Royal Bank of Scotland in London: “Ukraine needs to work harder for slice of investment”

Feb. 4 with Oleksandr Lozovyi, analyst at Kyivbased investment bank Phoenix Capital: “Economy in 2011: Hopeful prospects to brighten outlook”

Jan. 28 with Oleksiy Chernyavskiy, director of Energobusiness, a Kyiv-based consultancy: “Subsidized oil imports harm Ukraine”

Jan. 21 with Slava Vlasov, partner with the tax and legal department at PricewaterhouseCoopers in Ukraine: “Implications of new tax code still unknown”

Jan. 14 with Jorge Zukoski, president of the American Chamber of Commerce in Ukraine: “Grain export quota allocation lacks transparency, fairness”

Dec. 3 with Sergey Kuun, oil and fuel market expert at A-95 Consulting Group: “Import schemes in energy market cost state dearly”

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Ukraine's New Tax Code: Some Major Changes Kostya Solyar, associate at Asters, provides an overview of certain key changes brought by the new Tax Code. KOSTYA SOLYAR On 1 January 2011 the new Tax Code of Ukraine associate at Asters became effective although a number of its provisions will become effective later. Some of the major changes concerning corporate profit tax, VAT and personal income tax are as follows:

Corporate Profit Tax ("CPT") The Code gradually reduces CPT rate (generally by 2 pp annually) from 23% applicable from 1 April 2011 to 16% from 1 January 2014. The lawmakers tried to make CPT accounting closer to statutory bookkeeping regulations. In particular recognition of income and expenses for tax purposes will be generally based on the national financial accounting standards (however with some restrictions and exceptions). Unlike the provisions of the previously-existing law being effective in 2010, the new Code does not contain restrictions on carry forward of tax losses. The Tax Code imposes a restriction on tax deductibility of royalties, expenses related to purchase of marketing, advertising and consulting services from non-residents (unless such services are provided by the non-resident's Ukrainian PE and, respectively, are subject to tax in Ukraine). These payments are tax deductible to the extent they do not exceed 4% of the Ukrainian taxpayer's sales (revenue) for the previous year. A similar restriction applies to engineering services purchased from non-residents. In this case the limitation is 5% of customs value of the equipment imported pursuant to the respective contract. All of the above payments, no matter the amount, are not deductible if they are made to non-residents registered in an offshore jurisdiction appearing on the list approved by the Ukrainian government. In respect of the dividends distributed by a Ukrainian company, the Tax Code specifically exempts CPT payers from advance CPT on dividends payable to individuals. Furthermore, unlike previous tax regulations, the Code allows shareholders (including nonresidents) to extend financial aid to Ukrainian subsidiaries on the tax-free basis provided that such financial aid is returned by the subsidiary within 365 days. Starting from 1 April 2011 depreciation of all groups of fixed assets will be calculated for each item separately (in contrast to the group-based approach in the previous legislation). The Code has substantially increased the number of fixed assets groups: 16 for tangible assets and 6 for intangible assets. The Tax Code establishes a concept of service permanent establishment. Provision of services (including consulting, but except for provision of personnel) by a nonresident in Ukraine though its personnel shall constitute a taxable permanent establishment if such services are related to a single project and are provided for more than 6 months in any 12-month period. A 10-year exemption from CPT is granted to, inter alia, aircraft makers, shipbuilders, hotels, light industry, and producers of agricultural machinery.

Value Added Tax The current 20% VAT rate is to be reduced to 17% in 2014. Consulting, engineering, legal, audit, actuarial and other services of consulting nature, and supply of software, its development and/or testing as well as other IT-related services are now exempted from VAT in Ukraine. Until 1 January 2014 supply of grain and industrial crops (except for their first supply by the producers) is exempt from VAT. Due to a technical inconsistency in the previous legislation reorganization of a legal entity required adjustment of input VAT, resulting in VAT liabilities for such transactions as merger, spin-off etc. The Code has eliminated this inconsistency making reorganization transactions free from VAT liabilities. The Code introduces a procedure for so-called "automatic" VAT refund for exporters, being a kind of a little bit simplified procedure for obtaining the tax repayment. However, from the practical perspective the eligibility requirements with respect to this procedure remain unclear to many taxpayers. A positive trend is that a penalty for untimely VAT refund has been established by the Code. Further overburden in tax administration is a negative trend. In particular, the VAT invoices giving the right to declare input VAT for amounts exceeding certain thresholds are subject to mandatory state registration. Also, under the Code VAT invoices are only valid and can be used to declare tax credit only within 365 days from their issuance.

Personal Income Tax ("PIT") Unlike previous legislation, the Tax Code generally establishes the same rate of 15-17% for resident and non-resident individuals. For this reason it is no longer necessary to obtain Ukrainian tax residency certificates for foreign nationals. Monthly income that does not exceed 10 minimum wage amounts (currently approx. US $1,176) is subject to 15% PIT, the balance (if any) – 17% PIT. Dividends received by individuals from Ukrainian companies are subject to 5% rate (previously – 15%). Ukrainian-sourced interest income is generally exempted from tax till 1 January 2015. Afterwards a 5% rate will apply. The Code makes it possible for tax authorities to reclassify civil-law services contracts concluded by a company with individuals as establishing employment rather than independent contractor relations resulting in the relevant tax consequences. However, the criteria and procedure for such reclassification are currently unclear. Therefore, the businesses should carefully evaluate their practices in respect of engaging individuals-independent contractors. As a general note, despite certain positive trends established by the Code, the Ukrainian business feels frustration. First of all, the document is full of new rules being practically untested and ambiguously drafted. Not only the taxpayers in many instances do not know how to deal with the new rules, but also the local tax authorities are not prepared to provide the guidance.

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


8 Business Focus

www.kyivpost.com

February 18, 2011

Special coverage ahead on the following topics in Business Focus: March 4 Accounting & audit firms

March 25 Ukraine investment opportunities

April 22 Real estate

April 8 Legal services in Ukraine

May 5. Mergers & acquisitions

Squaring off with top tax man proves revealing, testy at times Æ “Last year we fulfilled the tax revenues budget plan for the first time in four years. We will do everything possible to execute this year’s plan to the full extent.”

BY K AT E RY N A PA N OVA PANOVA@KYIVPOST.COM

For obvious reasons, most Ukrainian citizens, foreigners and businesses in the country try to avoid having contact with officials from the State Tax Administration. But the Kyiv Post was eager to get the tax administration’s official line on what are often sensitive issues, including interpretation and implementation of the new tax code. In this Kyiv Post interview, Oleksiy Lyubchenko, deputy head of Ukraine’s State Tax Administration, was sometimes evasive, other times shockingly blunt. KP: Let’s start with a key question in the minds of many companies working in Ukraine. When will the government start refunding value added tax to exporters on time and in full? Oleksiy Lyubchenko: A balance is needed between the interests of the state and business. A company applies for the refund, a huge refund. That’s all it demands from the state of Ukraine. On the other hand, this company gives something back: taxes, pension fund and social payments, salaries and payroll taxes. So, generally the situation around the country is positive.

Oleksiy Lyubchenko is deputy head of Ukraine’s State Tax Administration

– Oleksiy Lyubchenko KP: Sounds wonderful, but what about the fact that some companies got no VAT refunds last year at all? OL: We have 2,000 businesses applying for VAT refunds every month. We owe everyone, more than half to the steel industry. We are in a situation of constant deficit in terms of finances and doubts as to the transparency of VAT process overall. In order to refund VAT to a company, its suppliers actu-

Business Sense

ally have to pay this VAT in the first place. Today, we have suspicious VAT requests in the order of Hr 100 billion. A company has to prove its right – through our inspection, or court, if necessary – in situations which look fictitious. How can you refund VAT if it was never paid to the budget in the first place? KP: But the tax administration claims that starting in mid-March,

VAT will be refunded automatically within 26 days after application if a company meets certain criteria. How difficult will it be to meet this pledge? OL: The toughest criteria [to qualify] will be exports in the order of 50 percent of output, or more. The difference between a tax credit and tax due should not exceed 10 percent. Another very important factor is the level of wages. -Average wages at a

company should be at least 2.5 times higher than the minimum wage. It has to have at least 20 employees on staff and the adequate production facilities … and, of course, no debts on tax payments. We really want to stop all this talk about kickbacks [for VAT refunds]. We will have a chat with companies and give them advice. If you are on the automatic VAT refund list, you will be getting it back for sure. If some- Æ10

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 OLEG CHAYKA

Officials’ failure on VAT refund fuels corruption, discourages investment Ukrainian export-oriented industries need to offer competitive prices in order to sell their goods on volatile international commodity markets. But the government’s continued failure to refund value-added tax (VAT) puts many companies at a disadvantage in competition with firms from neighboring and Asian countries. It also discourages foreign companies from investing in Ukraine. Failure by the government to return value-added tax to exporters has already ceased to be a purely fiscal issue and became an important indicator of Ukraine’s investment attractiveness. Indeed, why should foreign investors seriously consider Ukraine for investment, especially export-oriented

industries, if the cost of production by default goes up dramatically due to the government’s consistent failure to give refunds for the value-added tax? Combined with corruption, the absence of the rule of law and excessive regulatory and administrative burden, taxation has become a decisive factor for many foreign investors to divert their investments past Ukraine. Being aware of the VAT refund problem, the government had promised to resolve the longstanding sore point of VAT in the new tax code by introducing an accelerated, automatic refund of VAT. However, the recently introduced mechanism is so bureaucratized that it is impossible for most bona fide businesses to formally qualify for it.

Æ Wanted: Simple and transparent tax policies This mechanism is primarily introduced for operating export-oriented businesses that do not have any taxes due and meet a long list of additional (primarily formalistic) requirements. As the tax authorities do not have instant access to all the necessary

information to confirm taxpayer’s eligibility for the accelerated VAT refund procedure, they have no choice but to solicit the relevant confirmations from other state authorities, and/or put the onus of proof on the taxpayers. And this is not the end of the VAT refund saga. Even though the tax code is clear that the VAT refund claims are only subject to the desk audit by the tax authorities, the government has recently ruled that almost all such VAT refund claims be subject to field VAT audits. Numerous additional bureaucratic barriers are also inherent in the accelerated VAT refund mechanism. All these inefficiencies should again significantly delay the refund of VAT beyond the ideal four-week period.

To sum up, the effective accelerated VAT mechanism is drafted in such a way that it would virtually be impossible for most bona fide businesses to qualify for it. This situation creates ideal environment for corruption, business blackmailing and selective favoritism to businesses that are loyal to the government. If the government is indeed serious about enhancing investment attractiveness of Ukraine, setting up a fair, reasonable and transparent VAT refund mechanism would be a good starting point for achieving this goal. Oleg Chayka is director in the tax and legal department of the Ukrainian office of KPMG, an international consulting firm.


www.kyivpost.com

Business Focus 9

February 18, 2011

New tax law puts squeeze on optimization schemes BY O K S A N A FA RY N A FARYNA@KYIVPOST.COM

Uncertainty and ambiguity are rife among businesses in Ukraine after the new tax code was adopted at the end of last year. Lawyers, accountants, auditors and tax consultants are overloaded with clients’ requests how to understand and apply certain provisions of the new legislation. One of the main provisions raising questions is relations between businesses and private entrepreneurs who provide services to them and pay taxes under the simplified system of taxation. It’s a scheme that allows companies to avoid declaring de facto staff as employees, in turn freeing them of the obligation to pay hefty payroll taxes which often exceed 30 percent of salaries paid to staff. Long used as a tax optimization scheme by employers, registering de facto employees as private entrepreneurs has deeply hurt revenues going to the pension fund. With the new tax code, authorities have tried to eliminate it. But from a legal standpoint, it remains unclear whether the scheme can still be used. But this is by far not the only problem area businesses are facing in connection with the new tax code. “All the disadvantages that the tax code contains are becoming visible now and are driving accountants and specialists who deal with taxes mad,” said Oleksandr Minin, senior partner at law firm KM Partners. “At the same time, the state tax administration is taking a very tough position that is very unfavorable for taxpayers.” Most chapters of the recently adopted tax code came into force at the beginning of 2011. Some other rules envisioned in the new tax law will take effect several months later this year. The first two months of 2011 showed that businesses still have many questions that have no clear solutions – neither by lawyers nor by tax authorities. Among them are procedures related to the refunding of value-added tax, payment of dividends and royalties and calculation of profit tax, the rate of which will be gradually reduced from

the current 25 percent to 23 percent in 2011 and 16 percent in 2014. “We have a lot of work at hand,” said Hennadiy Voytsitskyi, partner and head of the tax practice at the Ukrainian office of Baker & McKenzie, an international law firm. Voytsitskyi said that since the beginning of the financial crisis in 2008 a large part of their work was devoted to their clients’ court disputes with tax authorities. Now, however, clients are more busy seeking consultations regarding the new tax code and how it will affect them.

Back in the shadows Use of the private entrepreneur scheme, which has for many years allowed de facto full-time employees at companies to pay a “simplified” tax of Hr 200 per month, is one of the biggest headaches. “Many sectors of our economy have been very dependent upon such schemes,” said Voytsitskyi. “This is one of the factors why a significant part of the Ukrainian economy remains beyond official statistics – in the shadows.” Estimates published in Ukrainian media suggest that about three million employees across the country abused the system. Firms could deduct the costs of goods and services purchased from these private entrepreneurs from their tax bills. But from April 1 this year, they won’t be able to do so anymore, making it less favorable to work with many small traders who have no other way to earn income. Voytsitskyi from Backer & McKenzie offers four solutions in this situation. In the short term, companies – especially unprofitable ones – could continue working with private entrepreneurs, not declaring their losses. In the long term, this solution is not suitable as every company is interested in being profitable sooner or later. A second scenario proposed by the lawyer is to work with private entrepreneurs who pay not Hr 200 under the privileged tax option, but the usual 15-17 percent individual profit tax. In this case the employee may agree partially or completely to cover addi-

tional tax expenses of the individuals. However, this will only happen with qualified professionals who are in demand on the market. More often the tax burden will be carried by the individuals. The third possibility is for individuals to open a private service company, which according to the new tax code will receive a five-year tax holiday. The fourth solution for the company is to hire those private entrepreneurs as full-time employers and to pay the hefty payroll taxes. “Regarding tax planning, the best option is the simplest one,” Voytsitskyi said, referring to the fourth option. “The simplest solution is to switch to labor relations where everything is regulated. But it is a big is whether this advice corresponds with business models and business opportunities of the clients.” The answer, says Olexander Minin from KM Partners, is that many businesses are not prepared to shoulder the burden of heavy payroll taxes and prefer to operate in the shadows. “In most cases companies are not ready to register these people as staff employees and pay all social taxes,” he said. “As often happens, individuals will be left to survive on their own. Shadow payments and salaries in envelopes will increase at that point. Others will lose their jobs.”

Crackdown planned Why did protests by smaller businesses erupt last year? The new taxation legislation essentially decreases the burden on big businesses, cutting profit taxes, for example. It increases the burden on small- and medium-sized businesses. There are signs that government is preparing to crackdown on tax optimization schemes used by small and mediumsized businesses. But no specific action is seen by government to also target big companies that have long funneled much of their profits into offshore tax havens, such as those owned by the nation’s all-powerful oligarchs. According to Iryna Akimova, deputy head of presidential administration, the government has been preparing a draft law on a simplified system of

Where it is easy and hard to pay taxes Easiest (rank)

Most difficult (rank)

Maldives

1

Jamaica

174

Qatar

2

Panama

175

Hong Kong SAR, China

3

Gambia

176

Singapore

4

Bolivia

177

United Arab Emirates

5

Venezuela

178

Saudi Arabia

6

Chad

179

Ireland

7

Congo, Rep.

180

Oman

8

Ukraine

181

Kuwait

9

Central African Republic

182

Canada

10

Belarus

183

Source: Doing Business 2011 report produced by the World Bank and International Finance Corporation.

taxation that may limit application of a single tax. Besides this, the new tax code already contains a rule that if relations between an employer and an individual are recognized as a full-time job, they will have to pay full payroll taxes. “The rule is not clear but it gives room for tax officials to abuse their powers,” said Ivan Yurchenko, senior attorney at Vasil Kisil & Partners. Amendments to the civil code adopted recently contain a definition of reasonable business object. It says

that if the transaction, or in this case an agreement between company and individual, does not have a reasonable business object but is aimed at minimizing taxes, then it will be recognized invalid with all legal consequences. “New rules and amendments are not clear enough but give a sign that the tax authorities will operate more actively regarding tax optimization schemes using this new arsenal of tools,” Yurchenko said. Kyiv Post staff writer Oksana Faryna can be reached at farina@kyivpost.com


10 Business Focus

www.kyivpost.com

February 18, 2011

Deputy tax chief describes new tax code as imperfect Æ8 thing happens – call the hotline number on our website. Anonymity is guaranteed. And we will kick [the violators’] heads. KP: So, you are calling businessmen not to give bribes, but where is the guarantee that the process of making a decision whether a company meets the requirements for automatic VAT refunds is transparent? OL: Lawmakers have answered your question. Take, for example, registration of tax invoices. If the tax administration hasn’t done this during one day, it’s automatically considered registered. This principle of silent consent is not that bad, I think. KP: Let’s take a real life example. Ruukki, a Finnish company which produces roofing in Ukraine, has still not received Hr 35 million in VAT refunds for last year. OL: The treasury probably didn’t have enough money. I remember this case. I see the problem. They have been transferred to a different department. If all is approved, they will get the money by the end of this month. [After making a few phone calls about the Ruukki case, he added]: Well, they seem to have such an unprofitable business. It smells really bad. If a company asks for Hr 1 and pays Hr 1 as profit tax, they get refunds every month – 100

Ruukki, a Finish producer and supplier of metal-based products, has made a major mark on Ukraine. It has invested heavily into the country, building domestic production. Its metal siding and roofing products are used in construction of prominent buildings across the country, including wholesale-retail stores Metro Cash & Carry, Furshet and Auchan. The brand new airport terminal (above) being built just outside Kyiv in Boryspil will also heavily display Ruukki materials. Given such a big role, you’d think Ukrainian authorities would treat the investor well. But Ruukki claims it has not received Hr 35 million in VAT refunds for last year. The amount is tiny compared to the total overdue VAT refunds owed to businesses by Ukraine’s State Tax Administration. Still, it is damaging to Ruukki’s business in Ukraine and symbolic of tax headaches businesses face in the country. (Courtesy)

percent. If they pay back at least 70 percent, they also get refunded immediately. Even if half of the refunds are paid back as profit tax, they get VAT on a priority basis. Thanks to your intervention, we will try to give them Hr 17 million by the end of the month.

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KP: So, will Ruukki get their VAT refund or be subject to inspections? OL: Afterwards, they will get inspections, of course. We will search for their profits in a couple of months. But let me tell you something else. Last year we fulfilled the tax revenues budget plan for the first time in four years. We will do everything possible to execute this year’s plan to the full extent. This is what we will refund VAT with. We are performing this job. How do you like Hr 100 billion of VAT not paid to the budget during the last three years? Every year Hr 33 billion went into the shadow economy. Somebody was really enjoying this situation. Enjoying very much! That’s why they have the money to pay for all this noise and complain that they are being kicked. KP: So, should business be afraid that unplanned inspections will increase? OL: We have to decrease the number of inspections. As for the planned ones, we have statistics: 47,800 in 2009, 43,100 in 2010. As for the unplanned inspections, last year we had 25,000 of them. The reasons [for conduction unplanned inspections] are clearly outlined in the Tax Code. Firstly, one reason arises when companies

don’t respond to our inquiries. Also, everything that has to do with VAT refunds requires unplanned inspections. Because, when we ask companies questions, they give us all sorts of irrelevant documents. Other reasons include liquidation, reorganization of companies, and, finally, investigations and court cases. It’s no secret that our function is to control. We divide taxpayers into categories. Depending where you are, that’s how much you are loved by the controlling organs. If a company deals with dubious enterprises, has fictitious owners, front man companies and so forth, then in 99 percent of such cases we have tax evasion. By the way, the new tax code does not change guidelines for unplanned tax inspections. KP: Should taxpayers be relaxed when it comes to fines for violations? A provision in the new tax code envisions that fines during the first half year – a period granted for taxpayers to get accustomed to the new rules – stand at just Hr 1. OL: Everybody started dreaming about using this provision to their benefit. Let’s say I, as a taxpayer, have a declaration and need to pay Hr 2 billion but made a mistake and say here is Hr 1. Some people think they don’t have to submit tax declaration at all. This is wrong. The idea was as follows: the accountant makes a mistake in calculation somewhere and the fine is Hr 1. You can make any mistakes that you want, but by July 1. There is one nuance: if you want a VAT refund. We have to check your application each month. There is no other way. If we find something wrong, you get fined Hr 1. Then, let’s assume, that during the next application, in March, you make another mistake. You again get fined Hr 1. But in August, the fine will be 75 percent of the total violation. This is really one area that many people should think very well about when applying for VAT refunds. It might turn that you owe taxes, rather than deserving a VAT refund. KP: And how much VAT you do refund? OL: In January and February, Hr 2.5 billion was refunded. On average, we refunded Hr 3.5 billion each month. KP: Many entrepreneurs complain that they have to pay taxes for non-existent violations, and

Which countries require most payments and time to complete taxes? Payments (number per year) Fewest

Most

Sweden

2

Sri Lanka

62

Hong Kong

3

Côte d’Ivoire

64

Maldives

3

Nicaragua

64

Qatar

3

Serbia

66

Norway

4

Venezuela

70

Singapore

5

Jamaica

72

Mexico

6

Montenegro

77

Timor-Leste

6

Belarus

82

Kiribati

7

Romania

113

Mauritius

7

Ukraine

135

Time (hours per year) Fastest

Slowest

Maldives

0

Ukraine

657

United Arab Emirates

12 Senegal

666

Bahrain

36 Mauritania

696

Qatar

36 Chad

732

Bahamas

58 Belarus

798

Luxembourg

59 Venezuela

864

Oman

62 Nigeria

938

Switzerland

63 Vietnam

941

Ireland

76 Bolivia

1,080

Seychelles

76 Brazil

2,600

Note: The indicator on payments is adjusted for the possibility of electronic or joint filing and payment when used by the majority of firms in an economy. Source: Doing Business 2011 report produced by the World Bank and International Finance Corporation.

tax inspectors explain this citing requirements set by their superiors. OL: We don’t have any planned sum of fines that need to be collected. When such situations arise, you have to report them to us. Now is a very convenient time, with reforms under way. People will be fired [for such violations]. KP: What about alleged demands by tax officials for businesses to pay taxes in advance? ArcelorMittal complained this week about it. OL: Probably, there was some condition given to them. Probably, the tax administration in Kryviy Rih has the right to impose such conditions. We are just administrators implementing laws. We are given the mechanism. We work with it. If the wheel is a square one, and we are told to keep pedaling, then we ask legislators to adopt changes. KP: What about the new Tax Code? Is the wheel round or square? OL: It is oval-shaped. Kyiv Post staff writer Kateryna Panova can be reach at panova@kyivpost.com

Lawyers, accountants work to find ways to cut tax burden BY K ATERY NA PA NOVA PANOVA@KYIVPOST.COM

The new tax code will likely not, as promised by government, lessen pressure on taxpayers. Rather, it could hit hard on tax minimization schemes medium- and large-sized businesses had been using happily for years. Lawyers and accountants are now working hard to find new ways for clients to minimize taxes payments, legally of course. Volodymyr Kotenko, partner and head of tax practice at Ernst & Young, an international consulting company, said: “All companies use tax optimiza-

tion schemes. Everybody tries to interpret laws to their favor. Not doing so would be silly.� Some Ukrainian companies surrender 55 percent of their profits to state coffers in various taxes. According to the World Bank’s Doing Business report, paying taxes in Ukraine ranks amongst the toughest levels seen globally. Together with informal payments, and bribes that are paid in Ukraine’s notoriously corrupt economy, plus problems with getting value-added tax refunds on time and in full, many businesses struggle to stay profitable. Loosening tax pressure is a matter of life and death for many.

“I would say tax optimization is a noble occupation, helping all mankind to survive,â€? laughs Yaroslav Lomakin, founder of Moscow-based consulting firm Honest & Bright, which specializes in tax minimization. It’s only a matter of time before loopholes are found in the new tax system, he said. “Every virus eventually gets its own antivirus,â€? Lomakin added. How are companies adapting two months under the new tax code? A few new schemes are already in the works. Overstating expenditures has long been used to minimize profit tax payments, sources said. Last year, Æ11


www.kyivpost.com

Business Focus 11

February 18, 2011

Lawyers, accountants working overtime to help find ways for companies, clients to minimize tax burden Æ10 many companies offset purchases of goods or services made from private entrepreneurs who paid a small flat tax. This option will no longer be available as of April 1, when the relevant provisions of the tax code will come into effect. However, there is still a way, tax consultants say, to exploit the simplified tax system intended for small entrepreneurs. Businesses that successfully converted employees to individual entrepreneurs can still save on a hefty 43 percent payroll payment relative to

the salaries paid to employees. Last year, some big retailers used a sophisticated trick to keep the value added tax they got from sales. They bought various difficult-to-measure and sometimes fictitious services – like legal advice, auditing services and engineering work – the price of which included VAT. Then a retailer would ask the tax administration for tax credit to offset VAT they “paid” for these services against what they have to pay to the budget out of their sale revenues.

But now such consulting services are granted exemption from VAT. “All of a sudden, a gorgeous scheme is destroyed,” says Kotenko. Kotenko notes, however, that advertising will still be subject to VAT payments and companies will be likely to use the schemes that involve ad services – both real and fictitious – more intensively. Paying foreign residents has long been favorite scheme to get money out of Ukraine and supposedly as an expense. Owners of a Ukrainian

company would set up an enterprise in an offshore tax haven, such as the British Cayman Islands, with a front company in a respectable country like the Netherlands, to avoid direct dealings with offshore destinations subject to extra tax charge. The scheme allowed business owners to show minimal profits in Ukraine, where profit taxes are in double-digit percentage levels. Meanwhile, millions of dollars was often paid to offshore companies as royalties for various services, including use of a trademark,

said Sergiy Melnyk, an associate at Salans international law firm. The new tax code makes an attempt to limit such practices. Ukrainian companies will no longer be able to pay foreign suppliers of services more than 4 percent of what they earned as sales revenues in the previous year. Experts say this change has shaken up many businesses. They are now in panic mode seeking new loopholes to compensate. Kyiv Post staff writer Kateryna Panova can be reach at panova@kyivpost.com Advertisement

TAX CONSULTING Listing is arranged in alphabetical order TEL./FAX

TOP EXECUTIVE

OWNERSHIP, UKRAINIAN/ FOREIGN (%)

HEADQUARTER'S

# OF FULL-TIME EMPLOYEES IN UKRAINE

MAIN SPECIALIZATION

TAX OPTIMIZATION SERVICES

# OF CLIENTS

MAJOR CLIENTS

FOREIGN LANGUAGES

PRICE RATE (PER HOUR, $)

AMPARO Consulting Group, (in Ukraine since 2008), www.amparo.ua, amparo@amparo.ua, 15 Saksahanskoho Str., off.#10, Kyiv 01033, Ukraine (44) 289-4242 (44) 289-3888

Aleksandr Zlenko

100/0

Kyiv, Ukraine

16

Corporate, commercial, tax, financial, criminal law (commercial crimes), audit, representation in courts, bankruptcy

Tax planning and consulting, Tax disputes, VAT, tax audit, tax basis optimization, foreign legal entities

WND

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English

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English, German, French

70 -350 Euro

English

WND

UKRTATNAFTA, Christian Dior, Naturprodukt Vega, Hellenic Bank, Faberlic, HARDEX, BEJO, Grain Alliance, Vianor Club

English, Russian

WND

Raiffaisen Bank Aval, OTP Bank, Lactalis-Ukraine, GRAWE-Ukraine

English, German

WND

Arzinger, (in Ukraine since 2002), www.arzinger.ua, mail@arzinger.ua, 75 Zhylyanska Str., 5th floor, Kyiv 01032, Ukraine (44) 390-5533 (44) 390-5540

Timur Bondaryev

WND

Kyiv, Ukraine

85

Legal services

Tax planning & optimization, choice of jurisdiction, foreign investments taxation etc.

Asters, (in Ukraine since 1995), www.asterslaw.com, info@asterslaw.com, 19-21 Bohdana Khmelnytskoho Str., Leonardo Business Center, Kyiv 01030, Ukraine (44) 230-6000 (44) 230-6001

Oleksiy Didkovskiy

100/0

Kyiv, Ukraine

100

Legal services

Direct and indirect taxes, customs issues, taxation of non-residents, tax structuring services, tax disputes etc.

WND

MasterCard, Coca-Cola Ukraine, Telenor, Austrian Airlines, Sopharma, Sumitec Ukraine, PPG-Helios etc.

Audit Company HLB UKRAINE LLC, (in Ukraine since 1994), www.hlb.com.ua, office@hlb.com.ua, 8 Panasa Myrnogo Str., off.#6, Kyiv 01011, Ukraine (44) 222-6010 (44) 569-1900

Valeriy Bondar

100/0

London, UK

93

Audit, transformation (IFRS, GAAP), due diligence, tax, consulting, legal, forensic, financial analysis, appraisal

Tax planning and consulting, tax audit, tax law compliance review, expert appraisal of tax acts, appeal decisions of tax authorities

WND

Audit Firm “RSM APiK”, (in Ukraine since 1992), www.rsmapik.com.ua, office@apik.com.ua, 37/19 Donetska Str., Kyiv 03151, Ukraine (44) 501-5934

Tetyana Bernatovych

100/0

Kyiv, Ukraine

60

Banking, investment, leasing, insurance and industrial sectors

Corporate tax planning, foreign legal entities, value added tax, compliance review

WND

AVELLUM PARTNERS, (in Ukraine since 2009), www.avellum.com, info@avellum.com, 19-21 Bohdana Khmelnytskoho Str., Leonardo Business Center, 11th floor, Kyiv 01030, Ukraine (44) 220-0335

Mykola Stetsenko

100/0

Kyiv, Ukraine

21

Banking and finance, capital markets, mergers and acquisitions, restructurings, antitrust/merger control, real estate, tax

Corporate restructuring services, crossborder tax advice, and M&A tax structuring advice

WND

WND

English, German, French

WND

Baker & McKenzie – CIS, Limited, (in Ukraine since 1992), www.bakermckenzie.com, kyiv_info@bakermckenzie.com, 24 Vorovskoho Str., Renaissance Business Center, Kyiv 01054, Ukraine (44) 590-0101 (44) 590-0110

Serhiy Chorny, Serhiy Piontkovsky

0/100

Chicago, USA

97

Legal services

International tax planning, tax transactions, transfer pricing, tax disputes, VAT, wealth management, customs duties

WND

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English, German, French, Russian

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English, German

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BDO Legal Ukraine, (in Ukraine since 1993), www.bdo.com.ua, bdo@bdo.kiev.ua, 201-203 Kharkivske Road, 10th floor, Kyiv 02121, Ukraine (44) 393-2688 (44) 393-2691

Managing Partner/ Director BDO Sergiy A. Balchenko

100/0

Brussels, Belgium

300

Audit, tax and legal advisory, corporate finance, valuation & business advisory services

Written tax consulting, tax audit, tax consulting support, assistance in preparation of tax returns, tax planning and optimization

WND

Business Focus is the Kyiv Post’s spotlight on companies, industries and services in Ukraine. The stories on the news pages of Business Focus are written by Kyiv Post editorial staff members, but the lists of companies are paid advertisements. Listing is arranged in alphabetical order. For more information about publishing your company's information in our list, please contact the advertising department at advertising@kyivpost.com. Key to abbreviations: WND – would not disclose.

Five ways to improve your competitive advantage

FIRST

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12 Business Focus

www.kyivpost.com

February 18, 2011

TAX CONSULTING

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EBRD, IFC, OPIC, Bank of Cyprus, Interpipe, Khortytsia, Turkcell, ExIm Bank of the US, Wizz Air Ukraine

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Chadbourne & Parke LLP, (in Ukraine since 1993), www.chadbourne.com, Kyiv@chadbourne.com, 25-B Sahaydachnoho Str., 3rd floor, Kyiv 04070, Ukraine (44) 461-7575 (44) 461-7576

Jaroslawa Johnson

0/100

New York, USA

38

Legal services: corporate/M&A, banking and finance, dispute resolution, tax, capital markets, financial restructuring

Corporate tax planning, VAT, excise, personal income tax, social security contributions, tax due diligence, tax structuring

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DLA Piper Ukraine, (in Ukraine since 2005), www.dlapiper.com, Ukraine@dlapiper.com, 77-A Chervonoarmiyska Str., Kyiv 03150, Ukraine (44) 490-9575 (44) 490-9577

Margarita Karpenko

100/0

London, UK

64

Legal (corporate and tax, finance and projects, regulatory, IP and technology, litigation & arbitration)

Corporate tax, VAT & customs, tax restructuring, M&A, reviews of entities' tax profiles, tax controversy, etc.

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EBS (Emergex Business Solutions), (in Ukraine since 1998), www.ebskiev.com, info@ebskiev.com, 13-A Universytetska Str., Kyiv 03110, Ukraine (44) 249-7905 (44) 249-7906

Helen Volska

0/100

Kyiv, Ukraine

85

Accounting outsourcing, IFRS/GAAP reporting, management consulting, legal services, IT consulting, HR management

- advisory on Ukrainian taxation VAT, CPT, PIT - tax advisory on transactions with nonresidents - legal advisory on tax consequences

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English, German, French, Spanish, Italian

starting from 60

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English, German, Polish, Dutch

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Ernst & Young, (in Ukraine since 1991), www.ey.com/ua, kyiv@ua.ey.com, 7 Mykhailivska Str., Kyiv 01001, Ukraine Kyiv: (44) 490-3000 (44) 490-3030 Donetsk: (062) 340-4770

Alexei Kredisov, Country Managing Partner, Vladimir Kotenko, Head of Tax and Law Practice

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London, UK

517

Assurance, tax and legal, advisory, transactions

Corporate/individual tax planning, tax review, international tax structuring, NPL sale and structuring, disputes

KPMG-Ukraine Ltd., (in Ukraine since 1992), www.kpmg.ua, info@kpmg.ua, 11 Mykhalyivska Str., Kyiv 01001, Ukraine (44) 490-5507 (44) 490-5508

Floris Schuring, Managing Partner, Craig Richardson, Partner, Head of Tax and Legal, Sergey Popov, Partner

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KPMG is a global network presented in 146 countries worldwide

300

Audit, tax & legal, advisory (transactions & restructuring, risk & compliance, performance & technology)

Outsourcing and tax compliance, corporate tax, international corporate tax, legal, M&A, people, transfer pricing

Mazars Ukraine, (in Ukraine since 1993), www.mazars.ua, info@mazars.ua, 8 Illynska Str., Business Center Illynsky, entry 1, 6th floor, Kyiv 04070, Ukraine (44) 390-7107 (44) 390-7106

Gregoire Dattee

WND

Paris, France

20

Audit, accounting, outsourcing, tax advisory services

Corporate tax planning, foreign legal entities, value added tax, compliance review, expatriate desk

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English, French, German

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Orange Telecom, Koopman International, GeDeBruyn Trans Ukraine

English, Swedish

From 50 Euro

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English

35-100

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English

35-400

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From 150 Euro

Multinational corporations, developers, commercial and investment banks, insurance companies, investment funds

English, French, German

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English, German, French, Polish, Swedish, Spanish, Italian

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Monvair, (in Ukraine since 2008), www.monvair.com, info@monvair.com, 42/44 Shovkovychna Str., Kyiv 01601, Ukraine Kyiv: (44) 490-1244 London: +44 (0) 207-903-5187

Roman Chukhvitsky Managing Partner/ Anthony Wood Partner

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Kyiv, Ukraine

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Accounting outsourcing, tax & legal advisory, financial engineering, business advisory, restructuring, human capital

Tax consulting & reporting, corporate tax planning, payroll, VAT, IFRS, GAAP, online accounting, compliance review

OLGA Audit, (in Ukraine since 1997), www.audit.com.ua, olga@audit.com.ua, 39-41 Khoryva Str., Kyiv 04071, Ukraine (44) 545-6535 (44) 545-6777 (44) 545-6525

Artur Surmenko

100/0

Kyiv, Ukraine

26

Audit, accounting & tax consulting, M&A, due diligence, business planning and financial analysis

Corporate tax planning, tax optimization, tax planning and consulting

OL.Consulting, (in Ukraine since 1997), www.olconsulting.com.ua, office@olconsulting.com.ua, 39-41 Khoryva Str., Kyiv 04071, Ukraine (44) 545-6777 (44) 545-6525

Aleksey Gachkovskiy

100/0

Kyiv, Ukraine

47

Business start-up, audit, accounting, taxation, legal services, M&A, project management

Tax optimization, business consulting, corporate tax planning, tax planning and consulting

ROEDL & PARTNER, (in Ukraine since 2003), www.roedl.com, info_ua@roedl.pro, 40 Hlybochytska Str., Kyiv 04050, Ukraine (44) 586-2303 (44) 586-2304

Klaus Kessler

0/100

Nuremberg, Germany

WND

Tax consulting, legal advice, business process outsourcing, audit

Corporate tax planning, local and international tax applications, value added tax, compliance review

Salans, international law firm, (in Ukraine since 1992), www.salans.com, kyiv@salans.com, 49-A Volodymyrska Str., Kyiv 01034, Ukraine (44) 494-4774 (44) 494-1991

Oleg Batyuk, Managing Partner, Kyiv

0/100

International law firm, 22 offices worldwide/1 office in Ukraine

70

Corporate/M&A, banking and finance, real estate, tax, employment, competition, energy/natural resources, dispute resolution, IP

Tax structuring of M&A transactions and financing, IP tax planning, tax planning for manufacturing and distribution activities

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UKRAINE CONSULTING, (in Ukraine since 2006), www.ukraine-consulting.eu, info@ukraine-consulting.eu, 42-44 Shovkovychna Str., Horizon Towers, Kyiv 01061, Ukraine (44) 490-5528 (44) 490-5529

Sven Henniger

0/100

Hamburg, Germany

20

Accounting outsourcing, tax consulting, legal address, office sublease, IT-services, recruiting

Tax optimization and planning, tax due diligence, personal income tax declaration, corporate income tax

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Vasil Kisil & Partners, (in Ukraine since 1992), www.kisilandpartners.com, vkp@vkp.kiev.ua, 17/52-A Bogdana Khmelnytskogo Str., Kyiv 01030, Ukraine (44) 581-7777 (44) 581-7770

Oleg Makarov (Managing Partner), Oleksiy Filatov, Denis Lysenko, (Partners, Co-Heads of Tax practice)

100/0

Kyiv, Ukraine

110

Legal and consulting services

Corporate tax planning, tax advice, tax dispute resolution

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www.kyivpost.com

News 13

February 18, 2011

Editor’s Note: Experts say excessive pre-trial imprisonment is a major humanrights problem in Ukraine, where suspects can be jailed for up to 18 months before trial. The practice violates democratic principles that call for speedy, fair and public trials as well as the presumption of innocence until proven guilty. More than 40,000 people in Ukraine are imprisoned without trial. The Kyiv Post will keep track of this issue through this new feature called “Jailhouse Watch.”

Jailhouse Watch

Former Tymoshenko government officials in jail

Party of Regions officials in jail

Tetyana Rud, head of the government's pricecontrol office. Arrested in November on bribery charges. Yuriy Lutsenko, former interior minister. Arrested in December for alleged misappropriation of state assets.

Valeriy Ivashchenko, former acting defense minister. Arrested in August on suspicion of abuse of office.

Oleksandr Davydov, former deputy transportation minister. Arrested in June on suspicion of inadequate execution of duties.

Viktor Bondar, former governor. Temporarily arrested in December on suspicion of exceeding authority. Released but still under investigation.

Hyhoriy Filipchuk, former environment minister. Arrested in December on suspicion of abuse of office.

Viktor Kolbun, former deputy pension fund board chairman. Arrested in November on suspicion of exceeding authority.

Lyudmila Kachurova, former head of Kyiv City Administration health department. Arrested in November on bribery charges.

Volodymyr Shcherbina, former Mayor of Alushta. Arrested in October on suspicison of exceeding authority.

Bohdan Presner, former deputy environment minister. Arrested in June on suspicion of bribery.

Mykola Petrenko, director Ukrmedpostach. Arrested in December on suspicion of abuse of office.

Tetyana Hrytsun, former state treasury deputy head. Arrested in July on suspicion of abuse of office.

Tryzub members, charged with hooliganism (blowing up a bust of Josef Stalin in Zaporizhia on Dec. 31), in jail

Mykola Sinkovskiy, former deputy head of the State Committee of Ukraine’s Government Material Reserve. Arrested in April on suspicion of abuse of office.

Ex-Naftogaz, ex-customs officials in jail Former Naftogaz and State Customs officials have been jailed since last summer for their roles in ex-Prime Minister Yulia Tymoshenko's acquisition 11 billion cubic meters of natural gas from RosUkrEnergo. Naftogaz reportedly dropped the claim after Tymoshenko left power, allowing RosUkrEnergo to reclaim the gas.

Eduard Andriuschenko Arrested in January

Roman Khmara Arrested in January

Vasyl Labaychuk Arrested in January

Artem Tsyhanok Arrested in January

Ihor Zahrebelny Arrested in January

Vitaliy Vyshniuk Arrested in January Vasyl Abramiv Arrested in January Yuriy Ponomarenko Arrested in January Viktor Davydenko Arrested in January Pylyp Taran Arrested in January Anatoliy Onufriychuk Arrested in January Andriy Stempitskiy Arrested in January Stepan Bychek Arrested in January

Others in jail

U.S. citizen Robert Fletcher arrested in November 2009 for alleged fraud

Oleksandr Danyevych, former state treasury deputy head. Arrested in July on suspicion of abuse of office.

Taras Shepitko, former deputy head of the Kyiv regional energy customs service office. Arrested in July on suspicion of abuse of office.

Ihor Didenko, former deputy head of Naftogaz. Arrested in July on suspicion of abuse of office.

Anatoliy Makarenko, former customs service chief. Arrested in June on suspicion of abuse of office.


14 Opinion

www.kyivpost.com

February 18, 2011

Finally, we have defeated Ukraine’s bureacracy. Here is the report!

Kuzio: It’s scary now in Kyiv Æ5

Journalists disappear Under Kuchma the murder of journalist Heorhiy Gongadze became an international scandal after a tape recording was released in which the president allegedly ordered Interior Minister Yuriy Kravchenko to violently beat Gongadze. What is less well known is that journalist Ihor Aleksandrov was also killed in 2001 in Donetsk when Yanukovych was governor of the region. Last month, The Washington Post asked Yanukovych about Kharkiv editor Vasyl Klymentyev, who disappeared only seven months after Yanukovych was elected. Yanukovych nonchalantly replied, “Many journalists disappear all over the world.” Media censorship took place under Kuchma, but the situation is worse today. What differentiates the Kuchma and Yanukovych presidencies was that total censorship under the former was impossible because of the strength of the opposition and pluralism within the ruling elites. Yanukovych claims that “mercenaries” in the West have been bought to

NEWS ITEM: President Viktor Yanukovych has repeatedly said his administration is doing everything in its power to eliminate Ukraine’s stifling bureaucracy, including announcing a plan to cut government positions and streamline government. However, Ukrainian business owners and foreign investors say that the government’s bureaucratic requirements still remain as onerous as ever, a year after Yanukovych came to power.

Æ Yanukovych appears intent on rolling back democratic freedoms in all areas of society write negatively about Ukraine and that the Czech government was bribed to grant former Economy Minister Bohdan Danylyshyn political asylum. Yanukovych’s worldview exports Ukraine’s domestic situation -- where Ukrainian journalists are often paid to place articles and politicians and cabinet ministers are often corrupt -- to the outside world. This worldview does not see either the legitimacy of Western criticism or the legitimacy of domestic criticism by the opposition and media. Yanukovych refuses to acknowledge that democratic regression is taking place on his watch and, in this, he is similar to Kuchma. But, in five areas -- political repression, parliamentary independence, media censorship, the

use of the “siloviki,” and quality of elections -- democratic regression is worse under Yanukovych than it was under Kuchma. If it continues, it will lead to Ukraine becoming ranked as “not free” by the end of Yanukovych’s first term in office. Taras Kuzio is an Austrian Marshall Plan Foundation visiting fellow at the Center for Transatlantic Relations, School of Advanced International Studies, Johns Hopkins University. Copyright (c) 2011. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington, D.C., 20036. The article can be found at http://www.rferl.org/content/commentary_partly_free_ukraine_ to_not_free/2310282.html

Feduschak: EU needs fresh ideas, optimism Æ5 anymore,” said Van Reybrouck. Throughout the discussion, Shevchenko, 35, often listened politely,responded to questions when asked, and rebutted when necessary. Then he made a comment that gave everyone pause. “The importance of the [union] for countries that aren’t in the EU yet is that it a source of inspiration,” he said. For those countries, the EU represents hope and freedom. In that one statement, Shevchenko underscored the overriding difference between his generation, and the one running Ukraine: His generation gets it. It gets the importance of Europe. It gets its values. It gets that the role of Brussels is not to resolve home-grown conflicts, but is there ensure all those institutions that promote and defend democracy work, even when it means bringing – through transparent insti-

tutions – individuals to justice. The transparency of those institutions is questionable in Ukraine. Shevchenko’s generation also gets another important point: As much as Ukraine needs the EU, the EU needs them. It needs the freshness, optimism and even pride Ukraine’s youth can bring, if only given a chance. I have observed Ukrainian politics for literally half my life now. There was a time when the only Ukrainian politician who could speak English was Serhiy Holovaty, now a Region’s party member. Because he was the only person they could understand, all the foreign reporters flocked to him and Holovaty’s opinions went around the globe. Today, however, Ukraine is filled with young people who have traveled the world, studied abroad and know a multitude of foreign languages.

Indeed, the Lviv debate was conducted in English and I was surprised how many audience members did not wear headsets to hear the translation; they understood. I am not sure I can answer the question I started with: What does Ukraine’s governing elite really want from the European Union? Yes, we can talk about easing visa regimes and trade restrictions. The question, though, is a deeper one. What I can say with certainty is that to understand what Europe – and the West generally -- wants from them, more Ukrainian leaders would be well-served if they listened in when their country’s younger generation participated in Europe-wide debates like Eurozine’s. Kyiv Post staff writer Natalia A. Feduschak can be reached at feduschak@ kyivpost.com.

Femen: Low on brains, big on hypocrisy Æ4 such a brazen advertisement of Ukraine’s women’s dress style, as their monopoly of making young Ukrainian women look sluttish internationally will come under dire threat if Yanukovych continues to promote Ukraine this way. Because, in fact, during my years in Kyiv, I have never seen a Ukrainian women take of her clothes in public, lest she be a member of Femen. But the Femen leadership did not really understand the president’s good intentions. He is in no way trying to dismantle Femen’s monopoly, but in fact he is finally acknowledging the great service Femen does to the nation: thanks to their frequent getting naked in front of the international press, including jumping around barebreasted for the entertainment of foreign TV viewers for no sensible reason except a desire to be on TV, Femen has

given the world a lasting picture what a Ukrainian girl is: beautiful, slim and ready to undress as soon as a camera is pointed at her. Yanukovych’s great error was to forget to mention that such displays of naked girl gatherings can be enjoyed all year round in Kyiv, not just in spring. So Maria Popova’s call for the impeachment of Yanukovych is an overreaction, born out of a misunderstanding. But such a lack of thought is standard for the leadership of Femen. Every time they move away from their naked to spoken messages, the complete opposite effect happens. They attempt to show that Ukraine is not a brothel by showing the same world lots and lots of young girls’ bosoms. They denounce pornography as degrading to women, but protest with a pornographic actress.

Such contradictory messages and lack of coherence are hallmarks of Femen’s activities. Thus, the leadership of Femen should be grateful for the clarity with which Yanukovych conveyed Femen’s only over-arching message to the world: “Ukrainian women easily take off their clothes.” And with Femen’s continuous advertisement campaign to investors’ base instincts and Yanukovych finally extending presidential gravitas to their campaign, bright times await this country as a future hybrid ThaiBelarus. Thomas Claus Theiner is a Kyivbased political consultant who specializes in long-term political and media campaigns. Currently he is preparing to launch a revamped ukraine.com and has been coming to Ukraine regularly for four years.


www.kyivpost.com

February 18, 2011

15


16 News

www.kyivpost.com

February 18, 2011

Nation suffers as elite get rich on murky deals Æ1 are not as good as they could be, why pensions are meager and why – when faced with an uncompetitive economy – six million Ukrainians choose to live abroad, according to the World Bank. Nearly nine million of the nation’s 14 million pensioners live on $120 a month, while as many as a third of Ukrainians are mired in abject poverty. All of this is happening in a nation that is one the world’s top exporters of steel, ore, grain, chemicals and arms. "The losses to the budget on nontransparent privatizations, grain export limitations, fictitious VAT [value-added tax] return and the like over the last several years amount to billions of hryvnia," said Oleksandr Zholud, senior analyst at the International Center for Policy Studies. Experts have identified the following areas as some of the biggest reasons why the national economy is in such sad shape for most Ukrainians as a cadre of billionaires grows even wealthier:

Shady privatization Independent Ukraine has a long and horrible history of selling state-owned assets in non-competitive, non-transparent ways to insiders often at cut-rate prices. This practice effectively deprives the state treasury of a large amount of revenue, easily in the billions of dollars, had the enterprises been sold through competitive bids. In fact, the only shining example of a clean, competitive privatization came in 2005. It was actually a re-privatization championed by then Prime Minister Yulia Tymoshenko. Mittal Steel (today ArcelorMittal) repurchased Kryvorizhstal, the nation’s largest steel mill, for $4.8 billion – six times the price paid the year before by a team representing government-connected Ukrainian billionaires Rinat Akhmetov and Viktor Pinchuk. Viktor Yanukovych was prime minister during the earlier privatization derided as a sham. Now, as president, he appears to be returning the nation to the familiar path of opaque sales of state assets. Ukrtelecom, the state telecoms monopoly and one of the few big

Exclusivity Price!

government assets left, is close to being sold uncompetitively, Vasyl Yurchyshyn, director of economic programs at the Razumkov Center said. Ukrainian investment bankers say the deal appears to be greased for Epic, an Austrian investment house. Bidding rules prevented some of the world’s leading telecoms from even attempting to buy the asset As a result, the sole bid came from Epic. An appraiser set the final price at roughly $10 million more than the $1.3 billion starting price. If the deal gets closed, Epic stands to buy Ukrtelecom at $500 million less than analysts say Ukraine could fetch in a competitive tender. “Everything has been decided and the sale will proceed,” said Oleksander Valchyshen, an analyst at Investment Capital Ukraine. “But the fact that it is not taking place at an auction demonstrates that [Ukraine] is not welcoming real strategic investors.” In 2010, Ukraine sold only $137 million worth of state assets, 83 percent shy of targets. Two assets sold last year – locomotive maker Luhanskteplovoz and fertilizer producer Severodonetsk Azot – had single bidders. Analysts believe Ukraine could have gotten more for them. For instance, Luhanskteplovoz sold for $7 million less than for what the same buyer paid three years earlier. Meanwhile, Severodonetsk Azot sold for 45 percent less than book value. “On average, whenever the government sells an asset to a single buyer, it losses one-third of the market price, but that depends on the specific sale,” said analyst Zholud. ,

RosUkrEnergo

Swiss-based gas trader RosUkrEnergo says it is a legitimate business that performed a needed role as gas-trading intermediary between Russia, Ukraine and Central Asia. Critics – including ex-Prime Minister Yulia Tymoshenko, Russian Prime Minister Vladimir Putin and the U.S. government – have raised questions about the company's transparency, its beneficiaries and its purpose. Many argue that RosUkrEnergo's billions in profits came at the expense

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Two of Ukraine’s richest billionaires, Rinat Akhmetov (L) and Victor Pinchuk meet during an economic forum in Kyiv on May 18. Their attempt to acquire the nation’s largest steel mill for $800 million in 2004 fell apart the next year, when the Orange Revolution team of President Viktor Yushchenko and Prime Minister Yulia Tymoshenko took the steel plant back and resold it for $4 billion more in a rare open, competitve sale of state assets. (UNIAN)

of the nation for the benefit of a few insiders.

Euro 2012 The government has embarked on a nobid process for jobs and projects to overhaul the country’s outdated transportation and other infrastructure leading up to the Euro 2012 soccer championship. And it’s doing so mostly with borrowed public funds. As little as 20 percent of Euro 2012-related expenditures might come from private investors. Organizers had planned to use $5 billion of state government money but the current plan envisions $18 billion of government money. The result? Runaway costs. The cost of building the Lviv stadium has doubled from Hr 1.12 billion to Hr 2.3 billion, said AnatoliyVolovenko, the stadium’s construction manager., on Feb. 8. And reconstruction of Kyiv’s Olympic Stadium may double to $600 million, making it one of Europe’s most expensive stadiums. One glaring, but relatively small, examples of oddly spent public money involves the purchase of 10 wooden benches for a Kharkiv metro station worth close to $8,000 apiece.

“There’s certain manipulation at work here. I don’t understand their current policy of holding non-competitive bids,” said Yuriy Pavlenko, the former minister of family, youth and sport. “Their approach is absolutely nontransparent.” Borys Kolesnikov, the vice prime minister in charge of Euro 2012, has justified non-competitive bids because of time constraints. But Pavlenko and other experts say that the Yanukovychcontrolled parliament could have easily streamlined public procurement laws – allowing Ukraine to get more bang for the public money spent.

Picking favorites The government is also on the verge of shorting itself on billions of lost export income as a result of grain export quotas in place since last summer. Then it granted a disproportionate share of export quotas, more than half, to just three domestic companies. The affair has been “unjustified, untransparent, and unfair,” according to the American Chamber of Commerce in Ukraine. The 2010 harvest was the third largest in Ukrainian history. The chamber

said a handful of preferred grain companies are suspiciously being granted the lion’s share of export quotas. The quotas are in place until June 30. But things could get much worse soon: the state could end up monopolizing the grain market altogether, running counter to the nation’s international trade commitments. According to Volodymyr Klymenko, the head of the Ukrainian Grain Association, a proposed law may force grain traders to buy from a state company instead of directly from farmers. Klymenko summed up the losses this way: “What is clear is that Ukraine could have raised $4.2 billion exporting grain from last season’s crop. Instead, Ukraine exported only $1.4 billion worth of grain due to export restrictions. At the end of the day, Ukraine missed out on $3 billion due to the destructive state policy in the agriculture sector.”

Duty-free oil Experts say hundreds of millions of dollars in tax revenue were lost last year because an obscure firm was permitted to import, duty-free, massive volumes of oil and related products. The firm, Livella, would have owed the state more than $375 million worth of import duties, according to Ukraine’s anti-monopoly committee, had the taxes been charged. The company stopped importing oil after protests from competitors and business lobbyists. “At a time when the government takes difficult and unpopular decisions [such as cutting public spending], the [duty and tax-free import privileges exploited by some companies] not only allows certain companies to evade paying taxes, but also distorts free competition on the Ukrainian fuel market, threatening investment in this sector,” read a recent Chamber of Commerce letter to government authorities.

Value-added tax By far one of the biggest boondoggles has been the government’s value-added tax refund program. It is designed to make Ukrainian exports more Æ17


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British ambassador: ‘This is a catastrophic situation for the business climate’ Æ16 competitive by rebating the VAT to exporters. However, the government’s chronic unwillingness or inability to pay exporters what they are owed has fueled suspicions of corruption involving fictitious companies. Some firms get VAT refunds, others don’t – and the government decides. The issue is an impediment to investment. Vice Premier Serhiy Tigipko said the government owed $1.2 billion to exporters as of December 2010 on top of more than $2 billion in VAT bonds it issued in September 2010 to companies it owed. Ukraine’s largest steel mill, ArcelorMittal Kryviy Rih, alone was owed $288 million in value-added tax China Russia 427 Mexico 416 Saudi Arabia 302 291 Malaysia United Arab Emirates 276 Kuwait 242 157 Venezuela Qatar 138 Nigeria 130 Kazakhstan 126 109 Philippines Poland 106 Indonesia 104 104 India Argentina 90 Ukraine 82 Turkey 77 Chile 70 Czech Republic 66 Source: Global Financial Integrity

News 17

February 18, 2011

refunds as of Dec. 31 British Ambassador Leigh Turner this month criticized the whole process. “Some companies receive it quickly, some receive it slowly, and some companies do not receive them at all. Unfortunately, there is an opinion, that how quickly you receive the VAT refund may be influenced either by political connections or corruption. Clearly, this is a catastrophic situation for the business climate,” Turner said. Government is correcting the problem, according to Iryna Akimova, the president’s top economic adviser. “We improved the VAT refund system and introduced fines that the state 2,176

Top 20 countries’ cumulative Illicit financial flows due to trade mispricing and unrecorded capital leakages as a result of bribery, theft, kickbacks, and tax evasion; 2000-2008 (billions of U.S. dollars)

has to pay in case of delays. There is also an automatic VAT refund system for exporters that meet certain criteria,” Akimova said. But government has a dismal track record in delivering on its promises. A case in point is ArcelorMittal, the steel giant. Its general director, Rinat Starkov, summed up 2010 this way: “We’re ready to invest in the modernization and further development of production. Unfortunately, the automatic VAT refund system hasn’t been put in place and VAT arrears remain a serious obstacle not only to development but also for the normal functioning of the enterprise.” Exactly how many billions of dollars that Ukraine loses through corruption, insider dealing or simply bad governance is difficult – if not impossible – to calculate. But it seems clear to many experts that borrowing from the IMF would be unnecessary if government would simply clean up its act. “I doubt Ukraine needs IMF loans now,” Razumkov Center's Yurchyshyn said. “It is correct to say that had the Ukrainian government been more efficient in generating income from privatization, lifting grain quotas and the like, IMF money would probably not be needed.” Kyiv Post staff writers Yuriy Onyshkiv and Mark Rachkevych can be reached at onyshkiv@kyivpost.com and rachkevych@kyivpost.com.

Economist: Authorities see small businesses as a threat BY K ATE RY N A PA N OVA PANOVA@KYIVPOST.COM

Leading Ukrainian economist Oleksandr Paskhaver said President Viktor Yanukovych’s administration will have a hard time changing the Soviet mentality of top officials, as well as rampant conflicts of interest between the president’s oligarch backers and government. Paskhaver, a former adviser to exPresident Leonid Kuchma, said that in order to understand the authorities’ motives, it’s important to remember that they are “representatives of Soviet management in an industrial region.” Many top officials come from the industrial Donetsk Oblast, he added. “They genuinely believe that whoever has power has ownership, that administrative pressure is better than economic stimuli, monopoly is more efficient than competition and informal pressure is more effective than the law,” Paskhaver said speaking at a roundtable organized by Frishberg & Partners law firm. He also said the authorities, who adopted legislation last year that increased the tax burden on small businesses while cutting rates for big enterprises, were not inclined to help small businesses. While large protests held late last year by small businesses temporarily rattled Yanukovych’s administration, cornering them into temporary compromises, don’t expect their mentality to change in the future, according to Paskhaver. Those in power treat small businesses as “an uncontrollable mass, self-sufficient and independent,” Paskhaver said. From the authorities’ point of view, “it would be much better for them to work in factories” that the oligarchs control, he added. While the new government is energetic, has launched reforms and has

Oleksandr Paskhaver shown itself ready to take unpopular measures, such as raising household gas prices, Paskhaver said it was completely focused on economic rather than social tasks. He said the authorities’ greatest shortcoming is they don’t just represent big business, but that they themselves are big business and are using political power to boost personal profits. This, he said, leads to massive conflicts between their personal interests and that of the nation. Paskhaver described the country’s ruling Party of Regions as split into two camps: Some want “to fatten the calf and then eat it, while the others say, ‘Are you mad, they’ll kick us out soon’” and want to take what they can while in power. As for Ukraine’s most pressing problem – corruption – Paskhaver suggested it couldn’t be stopped at the top of government. He proposed following Georgia’s example and concentrating on eliminating corruption among state officials at the middle and lower levels, as this will ease conditions for 95 percent of investors. Kyiv Post staff writer Kateryna Panova can be reached at panova@kyivpost. com

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Lifestyle

Quirky and jovial, Ukraine’s top wedding singer tells how he made it big

February 18, 2011

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

Ukrainians avoid talking about sex, but do it – a lot

In Kyiv night clubs, naughty, underdressed scenes are part of the program. Yet ask these people in daylight if they have sex, half of them won’t answer. BY A L E X A N D R A R O MAN OVS KAYA ROMANOVSKAYA@KYIVPOST.COM

Pedestrians walking by sex shops in Ukraine are fun to watch. Some lower their gaze, others giggle. A small fraction dares to venture in. In a country where short skirts and low cleavage are often part of the business dress code and where men refuse to swap speedos for swimming trunks on the beach, this reaction seems startling. While having sex is hardly a problem, speaking about it in Ukraine is still a taboo for many. Even owners of erotic shops and sales clerks stutter when asked what toys sell best in their establishments. Red-haired Olena Manoylova, who’s been working in Intim boutique for five years, is one of them. Sporting pretty makeup and a fur coat, the 30-year-old refused to say if she uses

any sex toys herself but gladly shared her observation about customers. “Some people can’t even say ‘genitals’ out loud,� she complained. “In my job, I have to use some psychology tricks to get them talking.� Ukrainians buy predictable toys, with vibrators, handcuffs and fetish costumes being the most popular. Sadomasochistic gear doesn’t sell too well, said Manoylova. “Most people buy things like gags, leashes or whips to try only once. Kyiv sadomasochists form a narrow group and prefer ordering stuff from abroad. So we sell only general stuff,� she said, pointing at a couple of collars and whips huddled above the fire extinguisher. The legal age to shop for sex trinkets in Ukraine is 18, but people usually become customers after 25. Middleaged men in search of pills and creams, some women after 50 buying lubricants

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and couples looking for gifts to spice up their nighttime make up the majority of Manoylova’s customers. “People with no regular sexual partners don’t waste their time in sex shops. They use it to find someone first.� But even after a ceremonial choreography of going from a first date to tying the knot, modern couples are still bashful to talk about it. A peculiar type of Soviet puritanism became so potent over the last 75 years that even Western television shows are not enough to break through – for now, say psychologists. According to findings by the sociological center Ratings in 2009, about half of Ukrainians polled between the age of 18 and 49 refused to even talk about sex. Among those who responded, some 3 percent said they have sex every day while another 20 percent

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Æ27

play under the covers several times a week. Others said they get intimate only a couple of times per month or even less than that. In another poll, however, Ukrainians admitted to having sex 108 times a year – that’s nine times a month. Conducted by the Durex condom company, the poll established the world’s average rate is 103 times a year. The world record breakers, though, are Greeks who get naked 11 times per month. According to sexologist Oleksandr Koregin, one of the signs of sexual culture is the number of words for “to loveâ€? in a language. Greeks have four separate words, Ukrainians two and Russians just one, he said, hinting that the nation’s not lost. A pioneer of sex shops in Kyiv, Oleksandr Solodar, would be the one to know. Opening the first naugh- Æ24

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Food d c Critic WITH ANTONINA ARMASHULA

Why are family-run restaurants hard to find in Kyiv? A friend recently told me that she was sitting in Oliva and thinking why there are so few small and cozy restaurants in Kyiv. You know, the places where you can get risotto porcini for Hr 50. Even if the serving doesn’t make you feel miraculously transported to Italy, at least it’s not like in Puzata Khata, where chewing on a sandwich with mayo makes you feel awfully sorry for yourself. So why is this type of eatery such a rare find in Kyiv? First, there’s a lack of a “family dining outâ€? culture. Everybody that I know stateside has their favorite family restaurant – where everybody goes for birthdays, Barmitzvas or Sunday brunches. Not so in Ukraine. If we speak about our population in general, then the tradition is to celebrate holidays and anniversaries at home. Restaurants are usually a big affair either for a wedding or for a 50th birthday. Of course, the younger and wealthier generation is changing this, but slowly. That elusive middle class suddenly appeared when banks started lending money for cars and flats. But then it went bellyup when the recession hit, and now it seems as elusive as ever in Ukraine. Second, there’s no glamour for Ukraine’s “eliteâ€? in going to a family restaurant. Now let’s think about those whose regular evening entertainment includes oysters and running people over in their Maybachs. Would they go to a small family restaurant? Highly unlikely. There is no glamour in that. The Maybach owner will be depressed over the fact that he can order neither a salad for Hr 3,200 (it actually exists in one Kyiv restaurant) nor a wine for the cost of a small car. Third, there’s no support for small business. OK, so we all know that life for an entrepreneur has always been hard here, but now it’s getting ridiculous. I should know, as I am a small business owner. It’s as if the government is having a large-scale experiment on when small- and mid-sized businesses will start dropping dead like flies in winter – after the new tax code or before the new labor code? Restaurants, with their relatively low margins, high entry barriers (find premises, get lease permit, create architectural, engineering and technical projects approved by city, get to know fire department, electricians and gas inspectors really well, apply for trade patent, get license for production and selling of food and don’t forget the permits for alcohol and tobacco sale, and then start working on ventilation, kitchen planning and so on), high Æ23


20 Entertainment Guide

February 18, 2011

Plan ahead

www.kyivpost.com

Friday, Feb. 25

National Georgian ballet Sukhishvili will stage four concerts in Kyiv: two in February and two in March. Their colorful and energetic performances have proved a hit with audiences worldwide. To dance in Sukhishvili, you need to be a top-notch acrobat. Dancers seem to mirror each other perfectly, as the synchronicity of the moves is flawless, be it a salto trick, jump, or knife juggling. Sukhishvili ballet has been around for over 65 years, and no matter where they go, they gather large crowds. Feb. 26-27, March 7-8, Palats Ukraina, 103 Velyka Vasylkivska St. Tickets: Hr 400-1200. Glenn Miller – Glenn Miller Orchestra is one of the world’s most famous jazz orchestras. It was founded in 1937 and led by trombonist Miller for seven years. Today, however, there are two licensed clones and one original. The one coming to Kyiv was formed 20 years ago by Dutchman Wil Salden. He spent a lot of time studying the history of Miller’s music and now uses that knowledge to recreate the original pieces with painstaking precision. Saturday, March 5, 7 p.m., Palats Ukraina, 103 Velyka Vasylkivska St., 2472303. www.glenn-miller.de. Tickets: Hr 60-600. Roxette – Evergreen Swedish pop duo Roxette heads to Kyiv in March as part of the world tour to promote their new album, “Charm School.” Marie Fredriksson and Per Gessle started working together in 1986 and since then never left the pop scene, scoring hits with songs such as “It Must Have Been Love” and “Listen to Your Heart.” They have won numerous awards and have sold around 60 million records. Thursday, March 10, 7 p.m., International Exhibition Center, 15 Brovarsky Prospekt. Tickets: Hr 400-3,500. Slayer and Megadeth are two American trash metal monsters rocking the scene from ‘80s. They are more than popular on their own. Imagine what happens when they get together on one stage. We know it's hard since this collaboration has never happened before. Megadeth was formed after the guitarist Dave Mustaine was fired from Metallica for drug abuse and obnoxious behavior. His independent albums, however, featured philosophical names such as “So Far, So Good...So What” or “Peace Sells...but Who’s Buying.” Sleyer is not for the faint of heart either. They hit hard on subjects of Satanism, religion or serial killers. Promise us you’ll stay sane! Sunday, March 13, 7 p.m, Vystavkovy Tsentr, 15 Brovasky Pr.Tickets: Hr 400-650. Deep Purple is one of the legendary pioneers of heavy metal. Performing since 1968, the band has a few generations of fans: During their concerts you can meet grandfathers rocking together with their grandsons. The recipe for their success may be in the trademark voice of Ian Gillan, ingenious guitar solos by Ritchie Blackmore, and lyrics for all tastes: naughty, sexy or philosophical. They’ve been to Kyiv so many times that it is hard to keep track of their concerts. But people want to see them again and again because they rock. Friday, March 25, 7 p.m., Mizhnarodny Vystavkovy Tsentr, 15 Brovasky Prospekt. Tickets: Hr 350- 2000.

Best gallery picks Artist Mykola Ridny is bogged down by never-ending paperwork. Sick and tired of powerbrokers, he offers an artistic take on stamps, folders, files, and ballot papers – solicitors of bureaucracy, in his exhibition “Documents.” Apart from photographs and paintings, there’s a video installation, in which children walk over the stones that are laid out in the shape of the word “power.” In another work, Ridny painted governmental seals in an effort to show his disdain for the political manipulation they stand for.

Time for tango magic Tango might as well be an aphrodisiac of art. If the goddess of love, Aphrodite, was around, she would no doubt commend Argentineans for inventing this passionate dance. Dancers Valeria Maside and Anibal Lautaro will fly all the way from South America fool you as Russians can also be quite romantic. Solo Tango was an official orchestra during famed international tango festivals Milonguero Nights 2010, Planetango V and El Tangon 2011. Friday, Feb. 25, 7 p.m., Budynok Ofitseriv, 30/1 Hrushevskoho, www. tangopasional.com.ar. Tickets: Hr 80-400.

The Small Gallery of Mystetsky Arsenal, Lavrska 12, 288-5140, www. artarsenal.in.ua, until Feb. 20 “Yin” exhibition unites different art genres and generations, presenting the works of 26 Ukrainian female artists. From surreal and sensual ceramics of 70-year-old Nelly Isupova to provocative and brutal paintings of 20-year-old Alina Kleytman, the artwork explores different sides of femininity. The curators say this emotional and romantic art mix symbolizes the arrival of the age of women in modern art. M17 Contemporary Art Center, 102-104 Gorkogo St. (Antonovycha), 596-2030, www.m17.com.ua, until Feb. 22 (closed Mondays) All 74 sculptures of world-famous French impressionist artist and painter Edgar Degas will make it to Kyiv. Degas, now considered a founder of the impressionist trend, denied the term back in the 19th century and called himself a realist. Only one sculpture was exhibited in his lifetime – “The Little Fourteen Year Old Dancer.” After Degas’ death, his heirs discovered about 150 wax sculptures, 74 of which were fit to be cast in bronze. Apart from this art mammoth, the Sculpture Saloon will present some 30 works from leading Ukrainian modern sculptors. Mystetsky Arsenal, 12-14 Lavrska, metro Arsenalna, 288-5225, until March 14. Tickets: Hr 40. Austrian photographer Andreas H. Bitesnich rose to fame some 10 years ago. His first collection published in “Nude” photobook in 1998 was marked by the Kodak special award. Over the years he collected the prestigious Gustav Klimt Prize and Vienna Award, among others, published five more photobooks of portraits, nude and travel photography and worked for international magazines. Check some of his most impressive work in “Body Architecture” exhibition in Brucie Collections, 55B Artema St. 353-1234, www.bruciecollections.com, until Mar. 14 Many still associate Solovetsky islands, also known as Solovki, in the north of Russia with Soviet gulags. But those cruel times are over and life goes on there. Alyona Malitska, a beginner photographer from Kyiv, has visited the islands twice to see how people there now fight against natural perils, rather than state persecutions. From November till May, ice floes prevent from reaching the island, while the sun shines only for four hours. Food deliveries are rare, hence outrageous prices. Nevertheless, the nature is stunning and residents impress with their resilience. Lavra gallery, 1 Lavrska St., metro Arsenalna, 280-0290, 12 p.m. – 8 p.m. until Feb. 20.

Best classical picks • Friday, Feb.18 – An evening of trumpet music with pieces from Vivaldi, Hendel, Shostakovich and others at 7 p.m., the House of Organ Music, 77 Velyka Vasylkivska St., 528-3186. Tickets: Hr 20-50. • Saturday, Feb.19 – Igor Zavadsky will play accordion at 7 p.m., Budynok Aktora, 7 Yaroslaviv Val, 235-2081. Tickets: Hr 50-120. • Sunday, Feb. 20 – violinists from chamber ensemble Kyiv Soloists will play pieces by Mozart, Bach, Stankovich and others at 7 p.m, Budynok Aktora, 7 Yaroslaviv Val, 235-2081. Free admission. • Monday, Feb. 21 – charity concert by Kyiv-classic orchestra to draw attention to the problem of children with cancer at 7 p.m., Budynok Aktora, 7 Yaroslaviv Val, 235-2081. Free admission. • Thursday, Feb.24 – A night of jazz: foreign classics and Ukrainian folk songs at 7 p.m., Budynok Aktora, 7 Yaroslaviv Val, 235-2081. Tickets: Hr 50

Compiled by Nataliya Horban and Alexandra Romanovskaya


www.kyivpost.com

February 18, 2011

Movies

Entertainment Guide 21 Live Music

The film is based on Federico Fellini’s “Nights of Cabiria.â€? Fellini’s black-andwhite film, however, follows the love life of a prostitute. THE DAUGHTER OF DECEIT Language: Spanish with Russian subtitles Drama. Mexico (1951) Directed by Luis BuĂąuel Starring Fernando Soler, Alicia Caro and Fernando Soto A small business owner returns home early and catches his wife cheating with his best friend. After she tells him that he’s not the father of their child, he angrily leaves their daughter on the doorstep of some poor drunkard. For 20 years he lives with guilt before starting to search for her. After a series of comic misunderstandings, one traffic accident, one romance and one step sister, the father finally reunites with his daughter, who blossomed into a beautiful young woman.

The scene from ‘The Girl Who Played with Fire,’ which tells the story of sex abuse and sex rings. (www.suspiciouskind.blogspot.com)

THE GIRL WHO PLAYED WITH FIRE Language: English with Ukrainian subtitles Crime/Drama/Mystery. Sweden, Denmark, Germany (2009) Directed by Daniel Alfredson Starring Noomi Rapace, Michael Nyqvist and Lena Endre Michael runs exposing and controversial stories in his Millenium magazine about the Swedish government. When young journalist Dag contacts him with exclusive information on sex-trafficking and authorities abusing under aged girls, Michael jumps on the story. But Dag and his girlfriend are found shot in their own apartment just before the results of the investigation go to print. Lisbeth, a weird computer hacker, is accused of their murder. Michael tries to clear his friend’s name‌ The film, a sequel to “The Girl with the Dragon Tattoo,â€? is based on the second book of the “Millenium Seriesâ€? by Swedish best-selling author Stieg Larsson. NORWEGIAN SHORTS Language: Norwegian with Ukrainian or English subtitles Nordic romance, wintery mountains and fearless Vikings – a collection of short films from Norway comes to Kyiv.

Young Tim attends a parade with his drunken mother on the National Day of Norway and meets a balloon man there in “The Tale of Balloons.� Erik’s father, who gave him up for adoption, wants to undo the damage in “The Passenger.� Two men, who play Vikings in a theatre, compete to win the heart of the local pub worker in “Playing the Clarinet.� Gard endures violence at school because of his love to a beautiful girl in “En Gard.’� Seven-year old Tiril uses magic to make her parents stop fighting in “Simsalabim.� Three boys climb the “Svolvaer Mountain� during a severe Nordic winter. Torfinn Iversen, “The Tale of Balloons� director, will open the program. SWEET CHARITY Language: English with English subtitles Comedy/Drama/Music. USA (1969) Directed by Bob Fosse Starring Shirley MacLaine, John McMartin and Chita Rivera Charity Hope Valentine and her friends work as taxi dancers. She falls in love all the time with the wrong men. One of them even pushed her off a bridge in the Central Park. When Charity gets stuck in an elevator with Oscar, a modest insurance clerk suffering from claustrophobia, she falls for him. But Oscar doesn’t know what she does for a living.

THE SECRET Language: French with Ukrainian subtitles Drama/Romance. France (2001) Directed by Virginie Wagon Starring Anne Coesens, Michel Bompoil and Tony Todd Marie, 25, sells encyclopedias and loves her husband Francois. He wants a second child but she’s doubtful for reasons she cannot understand herself. One day at work she meets an interesting customer. Intrigued at first, Marie gradually starts falling for him.

ZHOVTEN 26 Kostyantynivska St., 205-5951 Norwegian shorts Feb. 19-20 at 4:15 p.m. and 6:10 p.m. The Girl Who Played With Fire Feb. 18-23 1:25 p.m., 5:20 p.m. and at 9:15 p.m. MASTERCLASS CINEMA CLUB 34 Mazepy St., 594-1063 The Daughter of Deceit Feb. 22 at 7 p.m. Sweet Charity Feb. 22 at 7 p.m. BUDYNOK KINO 6 Saksaganskogo St., 287-7557 The Secret Feb.21 at 7 p.m.

Want to adver tise in

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14A Artema Str., square www.restoranchik-fluger.com.ua

Band ‘Legkiy Flirt,’ or light flirt, will perform in Art Club 44 on Feb. 19 (Courtesy).

ART CLUB 44 44B Khreshchatyk St., 279-4137, www.club44.com.ua Concerts traditionally start at 8 – 10 p.m. Feb. 18 David Goloshchekin Jam Session (Russia), Hr 300 Feb. 19 Legkiy Flirt, Hr 50 Feb. 20 The Queers (USA), Hr 100 Feb. 21 Revenko Band, free admission Feb. 22 Winter Jazz Nights Trombone Battle: Kirill Pagudin VS Yuriy Koinichenko, Hr 50 Feb. 23 Hobot I K, Hr 30 Feb. 24 Rollik’s, Hr 40 DOCKER’S ABC 15 Khreshchatyk St., 278-1717, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m. Feb. 18 Antitela, Animals Session, Hr 70 Feb. 19 Goodlife, Second Breath, Hr 50 Feb. 20 Mertvyi Piven, Vostochny Express, Hr 100 Feb. 21 Showtime, free admission Feb. 22 Tres Deseos Latino Party, Hr 20 Feb. 23 Defender of the Fatherland Day: Angie Nears, Partizanskie Vytivky, Hr 50 Feb. 24 Bangladesh Orchestra, Hr 30 DOCKER PUB 25 Bohatyrska St., metro Heroyiv Dnipra, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m. Feb. 18 Ukrayinska: Mad Heads XL, Red Rocks, Hr 70 Feb. 19 Mandry, More Huana, Hr 70 Feb. 20 Yuriy Loza & Foxtrot Music Band Feb. 21 Second Breath, free admission Feb. 22 Tex-Mex Company, free admission Feb. 23 Defender of the Fatherland Day: Rockin’ Wolves, The Magma, Hr 50 Feb. 24 Partizanskie Vytivky, free admision BOCHKA PYVNA ON KHMELNYTSKOHO 4B-1 Khmelnytskoho St, metro Teatralna,

390-6106, www.bochka.com.ua Concerts traditionally start at 9-10 p.m. Feb. 18 True Colors, Carte Blanche Feb. 19 Lucky band, Chill Out Feb. 23 Chill Out Feb. 24 Juke Box PORTER PUB 3 Mazepy St., 280-1996, www.porter.com.ua Concerts traditionally start at 7:30 p.m. Feb. 18 Gravity Feb. 19 Ace Ventura Feb. 20 Art I Shock Feb. 23 Dikie Liudi Feb. 24 Yuhym Dym JAZZ DO IT 76A Velyka Vasylkivska St., 599-7617, http://jazz-doit.com.ua Concerts traditionally start at 8:30 p.m. Feb. 18 Tatiana Arefieva Duo Feb. 19 Jazz Inside Duo Other live music clubs: GOLDEN GATE IRISH PUB, 15, Zolotovoritska St., 235-5188, http://goldengatepubkiev.com/ TO DUBLIN IRISH PUB, 4 Raisy Okipnoi St., 569-5531, http://www.to-dublin.com.ua/ PIVNA NO.1 ON BASEYNA, 15 Baseyna St., 287-44-34, www.pivna1.com.ua DRAFT 1/2 Khoryva St., metro Kontraktova Ploshcha, 463-7330 KHLIB CLUB 12 Frunze St., www.myspace. com/xlibclub CHESHIRE CAT 9 Sklyarenko St., 4282717 O’BRIEN’S 17A Mykhaylivska St., 279-1584 DAKOTA 14G Heroyiv Stalinhrada St., 4687410 U KRUZHKI 12/37 Dekabrystiv St., 5626262.

Compiled by Alexandra Romanovskaya and Svitlana Kolesnykova


22 Lifestyle

www.kyivpost.com

February 18, 2011

A couple looks at Doge’s Palace, the seat of Venitian rulers and government from 14 century until Napoleon’s conquest in 1797. (Yuliya Popova)

Venice in winter: low on crowds, rich on culture BY N ATA L I A A . F E D US C HAK FEDUSCHAK@KYIVPOST.COM

VENICE, Italy – An early morning mist glides over the white marble bridge. A dog in the distance barks, then silently trots up slippery steps and disappears. An old trawler, its deck filled with red, orange and yellow fruit, flows under the bridge, and then anchors. The men with fresh fish piled high on ice have erected their stalls long ago. Draped in heavy cotton vests, their collective breath creates another mist which evaporates in an instant. This is the scene near Venice’s famed Rialto Bridge, in the heart of the city’s commercial district, on an early winter morning. For visitors, it is as close as they’ll get to experience this ancient city as it may have been hundreds of years ago. Without the usual crush of tourists who descend on the city most times of the year, Venice in winter is more of a sensation than a place. It is the season when Venetians take their city back. Mothers luxuriate with hours of chatter on the Campo Santa Margherita. A sales lady at the stationery store on the Calle della Bissa sighs and says: “This is the Venice of the ages. I love this time of the year.” It is also the season when there are no lines and hotels are more affordable. Many people will try to see Venice in a day: The 6:45 a.m. fast train from Rome is frequently filled with blearyeyed tourists who hope an 11-hour jaunt will be sufficient to see the city’s splendors. But for someone who has visited Venice six times now, the city is best when it is returned to, savored and, like an old lover, experienced anew. The heart of Venice is Piazza San Marco with its St. Mark’s Basilica and Doge Palace. If you have only one day, or even a few hours, in the city, this is a must-see. The piazza is easily reached

The domes of San Marco Basilica, bell tower Campanile and the red-tiled roofs of Medieval houses are among the most recognizable symbols of Venice. (Yuliya Popova)

A couple strolls along the Grand Canal pier on St. Valentine’s day, Feb. 14. (Yuliya Popova)

by foot from almost any corner of the city. Signs posted on building corners throughout point the way to it, as well as other major landmarks, including Rialto Bridge. Ukrainian visitors will immediately feel a kinship with the basilica; it is one of the finest examples of Byzantium architecture in the world. Like Kyiv’s St. Sophia’s Cathedral, St. Mark’s boasts images of the Oranta – the Virgin Mary – as well as inscriptions in Latin and Greek. Nicknamed the Chiesa d’Oro, or Church of Gold, because of its gilded interior, some of the cathedral’s most splendid and easily viewed mosaics are hidden behind

curtains in chapels reserved for prayer. If you enter, however, be sure to actually pray. If you duck into a chapel merely to take a peek, guards and worshippers alike may reprimand you with a “tisk-tisk.” In winter, the basilica is best seen in the morning. Although it has its charm with low winter light, St. Mark’s becomes dark in mid-afternoon, making its stunning mosaics harder to see. After so many visits, the one Venetian interior I had never seen was Doge’s Palace. The deterrent had always been the long lines on each previous visit. This time, however, I paid the 12 euro

entrance fee and had the palace virtually to myself. Constructed between 1309 and 1324, the Doge was the seat of government of the former Venetian Republic. Filled with magnificent wood paneled rooms and sumptuous paintings, the palace boasts a number of breathtaking staircases and chambers. In the Doge’s apartments, my favorite was the map room, which hosts two huge globes and regional maps painted onto the walls. Be sure to ask the museum officials where you can see a painting by young Titian, hidden in a secret place. In the institutional chambers, which housed the organs of political and judicial

administration, the 54-meter length Grand Council Chamber will take your breath away. Even without a crush of tourists, you’ll need at least two hours to see Doge’s Palace. Afterwards, linger at the Grand Canal, the main water artery cutting the city in half. Even on a cloudy day, this is the vantage point to get a true appreciation of the artistry and skill it took to build Venice. One of my favorite corners of the city is the Jewish ghetto, although a trip there may not be for everyone. Poorly maintained, the quarter is most famous for its historical significance. Located not far from the Santa Lucia train station, it was one of those rare places in Europe where Jews were allowed to go about their lives normally in the Middle Ages. The Jews couldn’t leave the quarter but weren’t burnt for heresy as was the case in many other European kingdoms. The word ghetto apparently originated from this area. Today, this intimate quarter is home to five synagogues, a kosher restaurant and shops selling a wide variety of Jewish art, including colorful mezuzahs made of Murano glass. No trip to Venice is complete without a ride along the Grand Canal. While gondola journeys have become pricey in recent years, it is one of those life pleasures that should not be missed. Still, one of the best deals in Venice today is the so-called tourist travel card on the ACTV public boats. With certain exceptions, it allows unlimited travel on the system’s water and land services for periods from 12 hours to seven days. It’s chilly in winter, but go ahead, (secretly) uncork a bottle of wine, get a seat at the front of the boat – it’s easy this time of year – and put on Vivaldi. He was born in Venice, you know. Kyiv Post staff writer Natalia A. Feduschak can be reached at feduschak@ kyivpost.com.


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Lifestyle 23

February 18, 2011

No need to spend much money when skiing in Carpathians BY N ATA L I YA H OR B AN HORBAN@KYIVPOST.COM

Over the years, Bukovel skiing resort in the Carpathian Mountains developed into a “Courchevel” of Ukraine. Although hardly comparable in luxury of accommodation and quality of the slopes, this neat village impresses with fast lifts, modern lodging and well-kept ski trails. Bukovel is popular with middle-class skiers who can afford Hr 800 for a double bed per night, for instance, but budget travelers need not be deterred. I dug up a three-day tour for Hr 750 inclusive of transportation, housing, breakfast and dinner. No, I didn’t have to sleep on a rug but had to travel by bus from Kyiv and live 30 kilometers outside Bukovel, in the village of Yaseni. The trip started on a late Thursday evening when a group of accidental travelers met near Dorogozhychy metro station in Kyiv. The bus was big, modern and pretty comfortable. Afraid of getting cold at night, I slipped on my ski jacket and pants for the ride, but it proved unnecessary since the bus was heated. Just as the bus started moving, somebody from the group asked “Who’s got

Bukovel ski slopes are arguably best-groomed in Ukraine. (Courtesy)

the booze?” This battle cry was enough to find like-minded drinkers in their 20s and stay up past midnight, laughing and speaking very loudly. Sadly, we had to bear with their company during an 11-hour journey. But after that, it was all uphill. Arriving at Yaseni at 7 a.m., we were met by accommodation managers who lodged us in groups of eight between guest houses. Sharing a room with another lone traveler I met on the bus, I was content with amenities. Hot water, a separate shower and a homemade breakfast – you don’t need

more when you travel for the rush of adrenaline on the ski slopes. I don’t have my own skis yet but that’s not a problem in the Carpathians. Hotels, sports shops, even people in private homes offer ski rentals. In Yaseni, rent them from Hr 40 – 80 a day. In Bukovel, prepare to pay twice as much, often for a much older pair than you’d find in Yaseni. A three-day ski pass for Hr 728 is definitely pricier here than in other nearby resorts, but the quality of the slopes makes it worth the money. Lifts are modern and fast; tracks are well-groomed

with a wide range of runs to choose from unlike the icy and bumpy runs with rope tows or slow lifts in places like popular resort Slavske, for instance. Beware of some skiers who love cutting in front of the lines near the ski lifts. Trying to stop them does not always work as they often seem to have an excuse why they need to be there first. Also, many Ukrainian skiers don’t warn you when cutting in front on the slope, creating a dangerous situation. In the U.S., for instance, fellow snow racers shout “right” or “left” to prevent collision. Sadly, none of this courtesy is found here. Options for lunch at Bukovel range from budget fast foods to restaurants. For a quick snack, have a pancake with butter for Hr 8 or a sandwich for Hr 22 sold near ski lifts. I took three bags of dried fruits and peanuts from Kyiv with me and packed a hot flask. I love it when I am out in the frost racing the hills and working out my muscles, and when I get cold or a bit tired I stop for a few minutes, pull out the hot tea and healthy snacks from my backpack, revitalize and head to a mountain top again. The idea of junk food or a big meal doesn’t fit with my vision for good skiing. The lifts stop operating at 4:30 p.m.,

so every day a bus was ready to take us back to Yaseni at 5 p.m. I suggest spending the evenings in a sauna. There are plenty of them around for about Hr 100 per hour. Although I had planned for a good dose of steam, I could never stay up after skiing and was in bed by 8 p.m. If, however, you still have some energy to spend, staying in Bukovel is an option as they have some bars and clubs. Prepare to pay Hr 120 for a taxi back to Yaseni though. On Sunday evening, we packed our things back on the bus and traveled through the night to be in Kyiv by the break of dawn. It was rather convenient as I had enough time to take a shower before turning up for work full of impressions to write this story. Kyiv Post staff writer Nataliya Horban can be reached at horban@kyivpost.com Links: Tour operator: www.vladots.com.ua (only in Russian) Bukovel information: www.bukovel. com/en Budget: • Transportation, lodging, food: Hr 750 • Three-day ski pass: Hr 728 • Ski rental: Hr 50 per day

Kyiv dining scene lacks family options for many reasons Æ19 employee turnover, seasonality and theft issues, are definitely not a good option. Fourth, there’s no glamour in it for the owner and employees. Somehow, this culture thinks of people who are in the service business as serfs. Unlike other countries where there is a mindset of pride and consideration for the industry, brewing a cup of coffee and serving it to a guest here is considered a low-level job. Most waiters have no respect for their profession, and most owners wouldn’t be caught dead in the dining room talking to patrons. Fifth, there’s a lack of managerial

skills. A lot of small restaurants that opened last year have bankrupted due to simple mismanagement. The majority of cafe owners have no clue about basic human resources principles or marketing strategy or cash flow forecasting. So is there no hope? Where there’s a will, there’s a way. Let’s just pray for that ethereal middle class that will drive both ownership and clientele for family restaurants. Antonina Armashula is a marketing director at Mark Tapley Ltd., a consultancy in Kyiv. A culinary devotee, Armashula blogs about fine dining and cooking at www.edok.in.ua.

ÆMost waiters don’t have respect for profession, and most owners wouldn’t be caught dead in dining room.

Oliva chain of restaurants is a rare gem in Kyiv's shallow selection of cozy, family-like eateries. (Joseph Sywenkyj)


24 Lifestyle

www.kyivpost.com

February 18, 2011

Sex is popular in Ukraine, but less so sex education, sex shops Æ19 ty boutique in Independence Square 13 years ago, he first served gawkers before more serious customers could brave the light and enquire about a dildo. “We even thought about charging an entrance fee in the beginning to at least make some profit,” said Solodar, the owner of Edem. Now the majority of his customers are middle-aged men and women, with elderly and the youth popping in for a look some times. The problem seems to stem from the lack of proper sexual education. In high schools, teachers often give reproduction chapters to students for an independent study. Scrambling for words, parents also often prefer to delegate sex talk to Internet articles, TV shows and school. Famous Russian sexologist Igor Kon argues that communism didn’t aim to hammer out sexual communication. In his many books on sexual culture in Eastern Europe, he notes that restrictions on sexuality were in place much earlier than the Soviet times. Edem, 1/2 Sofiyivska St., tel. 279-4542, www.eromarket.com.ua Opening hours: Mon-Fri from 11 a.m. - 8 p.m. and Sat-Sun from 11 a.m. - 7 p.m. Intim chain: www.aaaa.in.ua, 093453-8832 • 20 Gnata Yury St., Kvadrat mall, 3rd floor. • Maydan Nezalezhnosti subway across the Monarh shoe shop • Paladina Ave, metro Akademmistechko, the Troitsky market.

The Christening of the Kyivan Rus in 988 and increasing authority of the church “brought the boundaries unknown before and the negative attitude to sex per se,” wrote Kon in his “Sexual Culture in Russia” book. Abstinence was required on holidays, from Friday till Sunday and during fasting. So, there were only 50-60 days a year left for people to have sex without breaking the church rules. In 18th century, Peter the Great condemned promiscuity while reforming the military. Later, Catherine II banned the use of shared baths. Some think that the sexual revolution penetrated Ukraine from the West. Sexologist Koregin disagrees. “The nudist beaches, for example, were in Kyiv in 1918 already,” he said. As people were rising against different governments at the time, they questioned other restrictions as well, including sex. Soviet government didn’t need that type of freethinking. In 1924, “Twelve Sexual Commandments of the Revolutionary Proletariat” book was published. Kon who studied this guide writes that love was considered free, but frequent intercourses were discouraged since they took away the energy from serving the country. Sex before marriage was strictly prohibited, as well as sexual diversity, flirting and jealousy. And the main reason for sex was claimed to be ideological closeness. Most of these rules seem ridiculous today. Yet neither educational institutions, nor parents are prepared to make sex a part of the school program.

A sex shop in Maydan Nezalezhnosti subway huddles together a selection of videos, toys and lingerie hardly comparable to any red light district boutique abroad but can still light up a dreary winter evening. (Kyiv Post photo)

Manoylova wants to change it with her four-year old son, Roma. “His teachers in kindergarten were delighted when Roma started calling his genitals a penis instead of silly childish names parents usually teach their kids. After that, the whole group started calling

it properly in a matter of one day,” she said proudly. People should think of sex as they do about food, pondered the sex shop assistant looking at the pink, hightech style vibrator. “Having regular sex with no supplies every day is

like eating a boiled chicken without condiments. It tastes OK, but gets boring at some point. You need to spice it up.” Kyiv Post staff writer Alexandra Romanovskaya can be reached at romanovskaya@kyivpost.com


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CanadianUkrainian invests in the Carpathians BY N ATA L I A A . F E D US C HAK FEDUSCHAK@KYIVPOST.COM

VOROHTA, Ukraine – A decade ago, Canadian Ruslana Wrzesnewskyj opened a wooden Alpine-style resort. It wasn’t easy. It took countless trips between her home in Toronto and this remote Carpathian village, seemingly endless talks with local officials and builders and a two-year stint in a culinary school to reach this point. “It was sheer stubbornness and drive,� she said of her journey in building a small log-cabin resort in Vorohta. With a background in real estate, “I had a plan that I’d like to create an economy in the mountains,� said Wrzesnewskyj, who is the lone foreign investor in Vorohta. At 58, the Canadian of Ukrainian descent not only runs two businesses on separate continents, she has also been lauded for her humanitarian work with Ukrainian orphans through the Help Us Help the Children foundation. Yet in this tranquil mountainous region, which Ukrainian skiers invade in winter, running a company is far from smooth. Wrzesnewskyi began to think about opening something of her own after a trip to the Carpathian Mountains where her family comes from in 1993. Back then, she and her husband also committed to adopting a daughter from Ukraine. Opening a business in the Ukrainian mountains seemed like a perfect excuse to keep the family ties alive. Today, the resort, appropriately named “Khatky Ruslany,� or Ruslana’s

Lifestyle 25

February 18, 2011

cottages, consists of seven cottages and a restaurant, which opened two years ago. Each house is decorated in a different motif including Hutsul, African and Turkish. It all began on New Year’s Eve 2002 after Wrzesnewskyj secured a plot of land and opened her first two cabins next to former Soviet ski training grounds. Because land ownership by foreigners is troublesome, that asset belongs to a Ukrainian entity, although Wrzesnewskyj is its president. She said when business documents were being prepared she would get annoyed with the employee charged with the paperwork. “He was obsessive compulsive� to ensure everything was done by the letter of Ukrainian law, Wrzesnewskyj said. Now she is grateful to him because there are no problems with the documentation. Still, the venture “isn’t profit making� and her Canadian real estate business helps support it, Wrzesnewskyj said. She has invested some $1 million into the resort so far. Before opening the restaurant, Wrzesnewskyj spent two years in chef school in Canada to get to know that end of the resort business. Part of her graduation exam was to design a restaurant and come up with a menu. Wrzesnewskyj said she wasn’t interested in serving dishes that were widely available in the Carpathians. Instead, she created what she calls “Ukrainian fusion,� a merging of local foods and those Western European palates are

Khatky Ruslany resort, or Ruslana’s cottages, sits at the foot of the state ski training slope overlooking magestic Carpathian landscapes in Vorohta village, Ivano-Frankivsk Oblast (Courtesy).

Ruslana Wrzesnewskyj

more accustomed to. One dish that has become a hit is a mushroom and pasta affair, which was conceived after Italian tourists brought Wrzesnewskyj wild mushrooms and asked her to do something with them. Wrzesnewskyj used to visit Kyiv frequently, but now spends most of her time in Vorohta when she is in Ukraine. She spends six to seven months out of the year in the country. This winter, Wrzesnewskyj has been working in the kitchen with staff and transferring culinary knowledge obtained in Canada. “We’ve

learned how to work with spices,â€? cook Mariya Dzemiuk said. “It’s been a real education.â€? The resort has proven popular with Ukrainian and foreign tourists. “It is attention to detail‌you don’t find anywhere else. It’s a gem in the region,â€? said Alexa Chopivsky, a Kyiv-based journalist who with a German colleague was visiting on a recent weekend. The resort has synergized with Wrzesnewskyj’s other passion, her work with Ukrainian orphans. In 1994, Wrzesnewskyj launched Help Us Help the Children, an organization that since its founding has supported over 200 Ukrainian orphanages and helped some 45,000 children with supplies of medication, food and clothing. The organization also has a scholarship program and a prosthetics program for children with physical disabilities. The program was started after Wrzesnewskyj and her husband adopted a daughter. Wrzesnewskyj has annually brought orphans to the Carpathians and enlisted volunteers from Canada and other countries to work as counselors. She said fundraising has become more difficult in the year since President Viktor Yanukovych took office as donors have become uncertain about Ukraine’s future. Still, she has received significant support from local businesses,

particularly from the nearby Bukovel ski area, she said. Wrzesnewskyj’s humanitarian efforts have not gone unnoticed in Canada. She was recently a finalist for the “25 Transformational Canadians� award sponsored by Canada’s national newspaper, The Globe and Mail, and Cisco Canada. The award highlights the work of Canadians who through their vision, leadership and actions have “immeasurably improved the lives of others.� A friend of former President Viktor Yushchenko, Wrzesnewskyj admitted disappointment in the last five years, saying more should have been done to move the country forward. She noted, however, it has been more difficult to do business under Yanukovych as there has been an uptick in visits from tax inspectors and other government agencies. Those visits take their toll. “Every time when I come back to Canada, I think, ‘What the hell am I doing in Ukraine?’� Wrzesnewskyj said. She said she is considering shutting her restaurant this spring for a short period to study a host of new government regulations which affect the resort. “I need to find out what these draconian laws are all about,� she said. Kyiv Post staff writer Natalia A. Feduschak can be reached at feduschak@ kyivpost.com

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26 Paparazzi

www.kyivpost.com

February 18, 2011

Visible and invisible in Soviart gallery

Singer Gaitana (L).

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Artist Vadim Naidiouk (C)

Soviart Center of Modern Arts presented works of Ukrainian artist Vadim Naidiouk from his collection “Visible and Invisible” on Feb. 12. The artwork, which combines painting and photography, features exquisite females captured in highly emotional postures. Inspired by the trip to Brazil, Naidiouk started this series in 2005. His works are available for viewing and sale through Feb. 28 at 22-a Andriyvsky Uzviz, Tuesday-Sunday, 11 a.m. - 7 p.m. (Kyiv Post photo)

Photographer Leonid Naidiouk (L) and gallery owner Viktor Khamatov.

Guests study ‘Lava’ work.

A guest admires Axis Mundi (L) and Passion (R) works.


www.kyivpost.com

Lifestyle 27

February 18, 2011

Meet TIK: ‘Wedding punk with touch of ... erotica’ BY O K S A N A FA RY N A

Ukrainian band “TIK” in Vinnitsa on Feb. 7, 2008. (UNIAN)

FARYNA@KYIVPOST.COM

The band TIK may well be considered a showbiz phenomenon in Ukraine. With an overweight lead singer and mocking lyrics, they seem like an overthe-hill college act. And yet, TIK, short for sobriety and culture, has been winning audiences across Ukraine for the last six years. Founder and frontman Viktor Bronyuk jokingly describes their music as “wedding punk with a touch of philosophical erotica.” What he means is a jolly cocktail of trumpet, accordion, drums, and guitar that blends folk, gypsy and pop. It comes from Podillya where Bronyuk was born – a historical region occupying Ukrainian lands next to Moldova. The lyrics – a mixture of idiomatic Russian and Ukrainian words – however, are what make the band tick. Sitting down for breakfast with the Kyiv Post, Bronyuk orders oatmeal. With a receding hairline, the 31-year old singer has none of the celebrity dust to sift through. Laid back, funny and open, Bronyuk says that he’s on a diet because “it’s really difficult to move onstage and be dynamic. Plus, my accordion adds some 20 kilos.” He speaks in beautiful, pure Ukrainian – none of which you hear in his songs. “Some people accuse me of cynically ruining the Ukrainian language,” he said. “We can talk about it for hours but often, with the help of

slang, it’s much easier to say what you really mean. It’s not a big crime.” Growing up in a village influenced by Jewish, gypsy and Romanian cultures, Bronyuk compares his music to the Balkan mix. “We are trying to do what Balkan composer Goran Bregovic and director Emir Kusturica did,” said Bronyuk sitting down for breakfast with the Kyiv

Post. “Many people accused them of stealing music from the Balkan Gypsies but over the years many stepped over this heritage and some were even ashamed of it. Bregovic and Kusturica changed all that showing that ‘it’s cool and it’s ours!’ We want to do the same and show that in Ukraine there is also a lot of interesting music,” Bronyuk said.

The lead singer is no stranger to experiments beyond music. Educated as an art teacher, he tried his hand in a couple of professions: from painting to political technologies. At 26 though, he decided to take his accordion playing skills to a new level as a warm-up act during another band’s show, and started performing at corporate parties and weddings.

Rising to fame in just five years, TIK still doesn’t refuse wedding gigs, although now ceremonies involve politicians and other well-off people. Bronyuk said they get hired because TIK knows what an authentic Ukrainian wedding means. In the summer of 2008, Bronyuk organized his own nuptials in … a gym. Decorated in Ukrainian embroidered towels, it fit some 300 people in his native village of Sokolova. The video from Bronyuk’s wedding became part of the band’s video for the song “White Roses,” a cover version for the late ‘80s Russian hit. After breakfast, Bronyuk had to rush for a rehearsal before their next big gig at Kyiv’s Ukraine Palace on Feb. 21. TIK will perform together with the symphony orchestra and the choir of the Song and Dance Ensemble of Ukraine’s Armed Forces. Posters around town feature Bronyuk and his band sporting garish costumes combining black classy tailcoats with traditional Ukrainian skirts and sneakers over long white socks. Instead of kilts, musicians will wear red skirts native to the Podillya region, pointing out once again the origins of their music. Watch and listen to their music at www.tik.ua or see their concert on Feb. 21, 7 p.m., Palace Ukraina, 103 Velyka Vasylkivska (former Chervonoarmiyska), tickets: Hr 80-800. Kyiv Post staff writer Oksana Faryna can be reached at faryna@kyivpost.com


28 Paparazzi

February 18, 2011

Carnival rocks the train station

www.kyivpost.com

Kyiv Municipal Orchestra

Couples grace the grand hall of the railway station.

Singer Katya Buzhynska.

Publisher Ivan Malkovych (R) with the spouse.

Organizers Tatiana and George Logush

Æ

International charity fund “Mystetska Skarbnytsya” chose Kyiv’s central railway station for its annual masquerade Carnavalia. Up to 1,000 guests wearing masks, tuxedoes and sumptous dresses attended the party on Feb. 12. While travelers rushed for their evening trains, Ukrainian celebrities and businesspeople passed the crowds through the red carpet spread at the main entrance of the station. The combination looked odd to say the least but luckily no one was late for their train or the party. In the Blue ballroom, decorated in a Ukrainian neo-baroque style, they dined, danced and tried to guess each other’s masks. The ticket costs ranged from Hr 500 to 2,000. The entertainment program included performances from Brazilian, Indian and Chinese carnivals, dancing lessons and competitions. A retro train was parked on one of the tracks to reproduce the atmosphere of early 20th-century balls. (Yaroslav Debelyi)

Guests take a break for a sumptious dinner.

If you want Kyiv Post Paparazzi to cover your event, please send details or invitations to news@kyivpost.com or contact photo editor Yaroslav Debelyi at 234-6500


www.kyivpost.com

February 18, 2011

Publication of items in Kyiv Post Community Bulletin Board is free of charge. The newspaper will print as many submissions as space permits, but notices must be no more than 30 words, except for the people in need section. Advertising of paid services or commercial ventures is prohibited in this space. Permanent items must be resubmitted every three months. Deadline for submissions is 3 p.m. Friday for the next issue. New listings are boldfaced. Please e-mail news@kyivpost.com or contact lifestyle editor Yuliya Popova at 234-6500.

Business clubs – 4 listings Î The Business-English Center meets on Sundays at 3 p.m. for a series of business English skills workshops. For more information, call Alex at 234-0871 or email: e-club@i.com.ua or visit www. etcentre.com.ua. Î A new gentlemen’s club is always open for well-educated, successful members (free admission) to combine establishing business relationships with unconstrained socializing. Please contact us: vadym_n@ukr.net, kobserg@yahoo.com, (067) 7406820 Sergio. Î The British Business Club in Ukraine meets every Saturday for business discussion and once every month for networking. Membership is by invitation only and is open to individuals and companies. Please email: administrator@bbcu.com.ua. Î Free English discussions about Internet marketing. Bold Endeavours, a British marketing and web development company, welcomes senior marketing managers/directors to an English language discussion group about search engines and Internet marketing at noon on the first Saturday of each month. Call 221-9595, or register online at www.bold.com.ua.

Public speaking – 6 listings Î Dnipro Hills Toastmasters Club would like to invite success-oriented people to learn and develop public speaking, presentation and leadership skills. Join us Sundays from 10 to 11 a.m. at Kyiv Business School, 34 Lesya Ukrainky Street, metro station Pecherska. For detailed information, please, check our website www.dniprohills.org.ua Î EBA Toastmasters Club invites enthusiastic, goal-oriented people to learn and improve their communication and leadership skills in friendly learning and supportive environment. We meet every Monday at 7.30 p.m. at American Councils at Melnykova, 63. For more information, contact Svetlana Nesterenko at lana_svk@ukr.net or call 067 220 77 55. More information can also be found at: www.ebatmc.blogspot.com. Î Top Talkers Toastmasters Club is happy to invite ambitious and enthusiastic people to learn by doing. Together we will discover inner potential in public speaking and leadership in each of us. We meet every Tuesday at Kraft Foods, 23 Yaroslaviv Val St. at 7 p.m. Please check our website www. toptalkers.org Î American Chamber of Commerce Toastmasters Club invites English speaking business professionals to advance their presentation and communication skills in a friendly and supportive atmosphere. We meet each Wednesday at 7.30 p.m., at the Microsoft Ukraine office, 75 Zhylyanska St., Floor 4, Business Center Eurasia. To receive further details on the club and its membership, please contact our club vice president for membership, Anton Stetsenko at 093-609-5161. Î Kyiv Toastcrackers Club, a part of Toastmasters International, is a worldwide organization that helps men and women learn the arts of speaking, listening and thinking through effective oral communication. We invite new people to benefit from the meetings on Wednesdays, at 7 p.m. at the House of Scientists, 45a Volodymyrska St. For more information see www.toastcrackers.kiev.ua. Î Talkers Toastmasters Club invites those interested in improving their public speaking, communication skills, English and creative abilities to join its meetings on Saturday mornings at 11 a.m. Please, check club’s website at arttalkers.wordpress.com, call 096-565-6229 or e-mail: arttalkers@gmail.com

Religion – 8 listings Î Christ Church, Kyiv. We are the Anglican/ Episcopal Church, serving the English-speaking community in Kyiv. We meet Sundays at 3 p.m. at St Catherine’s German Lutheran Church, 22 Luteranska Street, a five-minute walk from Khreshchatyk. Bible study on Tuesdays at 7.30 p.m. Please call Graham at 098-779-4457 for more information, www.acny.org.uk/8592. Î You are invited to the St. Paul’s Evangelical Church. Roger McMurrin is its founding pastor. Music for worship is provided by the Kyiv Symphony Orchestra and Chorus. Worship services are held every Sunday at 2:30 pm at the House of Artistic Collectives (Veriovka Choir Hall, 4th floor) at 50/52 Shevchenko Blvd. Call 235-4503 or 235-6980. Î International Church, Kyiv. English and Spanish Bible study classes. We invite you to weekly services at 10.30 a.m. Saturdays at 13A Miropolskaya St. (metro Chernigovskaya, second stop by a tram Boichenka. Central entrance of two-story building). Telephone: 38-093-757-6848, 542-3194. Î Word of God Church offers Bible study every Sunday and Wednesday at 7 p.m. Sunday school, nursery for children. For more information call: 517-5193. Î International Baptist Church invites you to our English language worship services (Sundays at 10 a.m.). We are located near Vyrlytsya metro in the downstairs hall of Transfiguration Church, 30B Verbytskoho. http://livingvinechurch.googlepages.com. Î The Evangelic Presbyterian Church of the Holy Trinity invites you to our worship service, held in Ukrainian and Russian with simultaneous English translation. We meet each Sunday at 50-52 Shevchenka Blvd., #402 (4th floor). Worship begins at 11 a.m. Sunday school for adults begins at 9:45 a.m. Pastor Ivan Bespalov: tel. (044) 287-0815; (097) 317-9598; e-mail: ivanbespalov@gmail.com. Î Kyiv International Bible Church, an Englishlanguage evangelical nondenominational church meeting at 10:30 a.m. on Sundays at 34A Popudrenka, between Darnytsya and Chernihivska metro stops. Contacts: 501-8082, or kievIBC@ gmail.com. Î International Christian Assembly meets at 57 Holosiyivska St. Services are held every Sunday: 9 a.m. till 11:30 a.m. For further information contact: Paul, +050-382-2782, www.icakiev.com

Support groups – 5 listings Î Divorce mediation, commercial mediation, consulting on diagnostics of conflict resolution in

organization. Ukrainian Mediation Center, www. ukrmedation.com.ua Please contact Oksana Kondratyuk: 066-758-66-44, delo2@i.ua.

help in pre-school and English club starting coming September. For more details please call ASAP: Natalie Istomina: +067 501-0406, +093 798-9840.

Î Individual consultations, psychological support in divorce, family relations, stress management, health issues, relaxation, self-esteem, personal development. Call Elena: 097-294-6781.

Î Wave Language School offers free English speaking clubs to the public. Join us on weekends from 4 p.m. to 6 p.m. or 7 p.m. to 9 p.m. on Saturdays and 1 p.m.– 3 p.m. or 4 p.m. to 6 p.m. on Sundays. Please contact us by email if you are interested: info@wavelanguageschool.com. We hope to see you soon – everybody is welcome.

Î Alcoholics Anonymous English-speaking group meets Saturday/Sunday at 12.30 p.m. and Tuesday/Thursday at 7 p.m. at various locations. Contacts: aakyiv@ukr.net, 096-460-0137 (friend of Bill) for details of meeting location. Î Counseling/advising in relationships, personal growth, body/ mind/spirit matters. Well-known Ukrainian psychologist counsels expats in English and French in the center of Kyiv (Lyuteranska). See www.hohel.kiev.ua or call 050-595-3686 between 3 p.m. and 5 p.m. Î Individual psychological counseling for Russian and English speakers. Family issues, mood disorders, anxiety, depression. Psychological Rehabilitation & Resocialization Center. Call Elena Korneyeva, 050-573-5810, between 10 a.m. and 6 p.m., or e-mail: kornyeyeva@rambler.ru.

Social, sport and health clubs – 2 listings Î Volleyball group, expats and locals, seeks new players, male or female. Skill levels, advanced beginner to intermediate. We meet on Sundays, 11 a.m., near Livoberezhna metro. For more info, send email to vbkiev@gmail.com Î Kiev Hash House Harriers club meets every second Sunday at 1 p.m. at the Lucky Pub, 13 Chervonoarmiyska St. (near Lva Tolstoho metro station). For more details, visit the website at http:// hashhouseharriers.kiev.ua/

International clubs – 10 listings Î Free admission for foreigners to “Russian Speaking Club” on Saturdays, 15.00 in Kiev city center. Call Yana (095897 01 55) to ask for details or go to www.russianclub.com.ua Î Stolypin Club (Kiev) meets every third Wednesday of every month at 7 p.m. at various locations. It is a non-profit public organization uniting Kyiv’s citizenry, including prominent business representatives, politicians and the liberal professions. The club is private, but opens its doors and its spirit to the wider community, affording the public a chance to partake in certain events alongside club members and guests. Please contact Tamara Avdeyeva at 096-462-4646 or assistant@ stolypinclub.org. Î Welcome to the friendly atmosphere of a French-speaking club. We meet once weekly on Saturdays or Sundays for conversation practice and movie sessions. Please contact Svetlana: 067907-1456 or email: consonance-s@ukr.net. Î Student Embassy Project invites students to join intercultural events in Kyiv, Lviv and Ternopil. The initiative is aimed at international students’ integration into Ukrainian society, youth leadership development, intercultural dialogue. To learn more please e-mail us at studentembassy@gmail.com or visit: http://studentembassy.org.ua. Î The Kyiv Rotary Club meets on Tuesdays at 7 p.m. at Andreyevsky Prichal restaurant, 6 Bratskaya Str. For more information, please contact Nataliya Rodovanskaya at 067-296-5672 or n_radov@yahoo.com. Î The International Women’s Club of Kyiv (IWCK) welcomes women from around the world to join our support network and participate in our extensive social and charitable programs. For more information, see our website www.iwck.org, call or e-mail the IWCK Program Coordinator Galina Timoshenko at 234-3180, office@iwck.org. Address: 39 Pushkinska, #51, entrance 5, door code 250. Î The Rotaract Club Kyiv meets on Thursdays at 7 p.m. at the Ukrainian Educational Center, Prospect Peremohy,#30, apt. 82. For more information, please email: president@rotaract-kyiv.org.ua or visit our website www.rotaract-kyiv.org.ua. Î Democrats Abroad Ukraine is the official organization of the Democratic Party in Ukraine; connecting Americans with U.S. politics and the Democratic Party; registering, informing, and motivating voters; supporting U.S. candidates, holding events, and fundraising. To join, email info@democratsabroad.org.ua. Î The Kyiv Multinational Rotary Club welcomes all Rotarians who are in Kyiv and new potential Rotarians. Our meetings are conducted in English and are held every Wednesday evening at 7 p.m. at the Radisson Hotel, Yaroslaviv Val St. 22. For a map and further information please consult our website at: http://kmrclub.org. Î The Kyiv Lions Club is one of 45,000 Lions Clubs around the world. We raise funds and provide services to help those most in need in our community by supporting charities in our chosen sectors of giving: children, the disabled, and the elderly. We meet on the second Monday of every month in the downstairs bar of the Golden Gate Irish Pub at 7 p.m. For more information contact Paul Niland at 044-531-9193 or paul.niland@primerosfunds.com.

English clubs – 13 listings Î Cambridge graduate leads free conversations in British English most Sunday mornings in downtown Kyiv venue. GMAT my speciality, but discussion of a wide range of cultural and commercial issues is encouraged Michael_Bedwell@hotmail.com Î Free English speaking club A@5! Improve your English speaking skills and have fun. Be prepared to speak in English most of the time with native speakers. Conversational clubs and thematic discussions on Saturdays and Sundays. For more information, please contact Vadym at vadik_s@ukr. net or +066 767-4407 Î English-Russian Conversation Club for adults. People of different ages are invited for international meetings. Mini-groups, individual approach. Making new friends. Conversational trainings. Email: engrusglobe@i.ua Î Sprout Christian International School is looking for native English-speaking volunteers who are enthusiastic and love working with children to

Î Free English practice at conversation club, regular meetings on Fridays at 7 p.m. near Akademgorodok metro. English native speakers. Interesting topics for discussion. Everyone is invited. Join us at 76 Irpenskaya str., off.31. http:// english.in.ua/, 229-2838. Î Free book & DVD exchange. Hundreds of English books and movies. Bring one, take one at the Phoenix Center. Address: metro Pecherska, 2 Nemyrovycha-Danchenko, University of Technology and Design, blue 14-storied building, 3rd floor. Hours: Mon-Fri 6 p.m. to 7:30 p.m., Sat noon until 1:30 p.m. Î Native English speakers. Meet the best and the brightest in Kyiv, well-educated, ambitious, and talented young people 20-30 years old. Share your English skills and make new friends. Everyone is welcome to visit for free. We also organize picnics, balls and excursions. Five days a week at different locations. Please contact Mark Taylor at jmt260@ hotmail.com for more information. Î Free speaking English club in Irpen on Saturdays at Lan School. Call 093-623-3071. Î Improve your English-speaking skills and have fun. Be prepared to speak English most of the time with native speakers. Conversational club, thematic discussions on Saturdays and Sundays. For more information please contact Vadym. email: vadik_s@ukr.net or call 066-767-4407. Î Free international conversation club on Fridays at 7 p.m. at English Language Center. Interesting topics for discussion, studying the Bible sometimes. Join us at 4B Kutuzova lane office No. 106 (m. Pecherska) and 76 Irpenska, office No. 31 (m. Akademgorodok. The ELC LTD. Tel. 5811989, 229-28-38. http://english.in.ua Î Are you a native English speaker? We are glad to invite you to join our English-speaking club. Call 067-620-3120 (Olga) or e-mail Olga.Bondar@ atlantm.com.ua Î Free English/German conversation club on Sundays. Druzhbi Narodiv 18/7, office No. 3. Everyone is welcome. Tel: 529-75-77.

People in need - 7 listings Î Twenty-one year old Zhenia Anhel was diagnosed with myelomonocytic leukemia in early January. He is currently treated in the Hematology Department of the Kyiv City Hospital going through the first stage of chemotherapy. Zhenia’s relatives contacted several hospitals in Germany, Poland and Israel in hope to continue therapy abroad. The family needs to raise 100,000 euro for the therapy itself and another 150,000 for the bone marrow transplant. The Anhel family pleads for your support and is thankful for any contribution, however small. Contacts: Olena Betliy, Teacher, +38 095 137 7743, history.ukma@gmail.com ; Egor Stadnyi, Student Committee Head, +38 096 905 5743, estadniy@ gmail.com ; Iryna Ivanivna Yurechko, Deanery coordinator, (+38 044) 425-14-20; iriv@ukma.kiev.ua . Website: http://www.helpangel.com.ua/ Bank details for individuals: PrivatBank card: 4627087834471890. Account number (Hryvnya): 4149 6050 5082 6437 Account number(EUR): 5457 0820 5027 5655 Bank details for legal bodies (Hryvnya): Recipient: Privatbank Bank name: PrivatBank Account number: 29244825509100 МФО code: 305299 ЄДРПОУ Code: 14360570 Details of payment: charitable contribution to Anhel Mariya Mykolaivna for medical treatment of her son, Anhel Yevhen # 4627087834471890 Tax ID 1915922443 Bank details for legal bodies (USD): BENEFICIARY: Anhel Mariya Mykolaivna Relief Fund for her son Evhen ACCOUNT: # 26258614433539 BANK OF BENEFICIARY: PrivatBank Dnipropetrovs’k, Ukraine Swift code: pbanua2x INTERMEDIARY BANK: jp morgan chase bank Chase metrotech center, 7th floor Brooklyn NY, 11245 USA CORRESPONDENT swift code: chasus33 ACCOUNT: 0011000080 Bank details for legal bodies (EURO): BENEFICIARY: Anhel Mariya Mykolaivna Relief Fund for her son Evhen ACCOUNT: # 26258614433443 BANK OF BENEFICIARY: PrivatBank Dnipropetrovs’k, Ukraine Swift code: pbanua2x INTERMEDIARY BANK: jp morgan AG Frankfurt/main, Germany Swift code: chasdefx CORRESPONDENT ACCOUNT: 6231605145 Î Katyusha Larionova is only 4 years old. At the age of 1,9 she was diagnosed with neuroblastoma, 4th stage. Since that time her parents has been fighting for her life. She had been treated in Ukraine without success. Due support of many responsive people Katyusha had a complex surgery, chemotherapy, radiation and bone marrow transplantation in Singapore, and finally went into a remission stage. For 1,5 year Katyusha lived as a normal child, studied at development school. But in January 2011 metastases appeared in skull bones. Katyusha’s doctor in Singapore recommended a course of complex therapy, including chemotherapy, MIBG therapy, antibodies and repeated marrow ransplantation. To start the therapy is necessary as soon as possible. The cost of it is 87 thousand pounds sterling. Katyusha’s parents hope people help them to save their daughter. Details on Katyusha's condition you can find at: http://katyalariohelp.ucoz.ru/ , or http://www. donor.org.ua/index.php?module=help&act=show &c=1&id=746 Contacts: Larionov Dmitriy, father, +050 501-

Community Bulletin Board 29 9566, Larionova Alina, mother, +050 621-1207, e-mail:desk@list.ru Or donate in Hryvnia: Privat Bank Account #29244825509100 МФО: 305299 Code: 14360570 Details of payment: replenishment of the card # 4149625301417414 Receiver: Larionova Alina Vladimirovna 2926510426 Î Nastya Kotova, 15, has been diagnosed with acute leukemia. She had a successful bone marrow transplant in Israel two months ago. Nastya is in a relatively stable condition now for the first time in many months. A step away from recovery, she still has to go through a rehabilitation period. The Kotov family urgently needs $12,000 to continue the treatment. Please help save their daughter’s life. More information: http://www.donor.org.ua/index.php?module=help &act=show&c=1&id=1170 http://fonddarina.com/ru/child/nastyakotova?news#72 Contact Nastya’s volunteer, Iryna: 096-373-89-71. Bank details: Beneficiary: Kotova Olena Vasylivna (Nastya’s mother) Deposit money on a banking account: # 4405885014676768 PrivatBank Account #: 29244825509100 MFO: 305299 Code: 14360570 Î Maksym Nalivkin, 12 years old, needs your help. The boy had suffered from cerebral haemorrhage and further subarachnoid hemorrhage, which led to 3 brain surgeries and constant artificial pulmonary ventilation. Since March 2010 the boy has been held at the resuscitation department, for 2 months he’s been out of coma, there are slight positive changes that give hope. He still needs a long-term rehabilitation; however his family already spent their savings on treatment. In case you have any possibility to support them, Maksym’s family would much appreciate it. Contacts: Mother Elena Nalivkina - mob.tel.: +380 99 6252475 Father Arkadiy Nalivkin - mob.tel: +380 50318-5499; tel: +380 552 22-2806; email: nag.box@gmail.com; skype: arkady_g.nalivkin; ICQ: 8423832 Webpage: http://nag.pp.net.ua/ Bank details for hryvnia transfer: Bank: Черноморское отделение Херсонского филиала «Приватбанк» МФО Code: 305299 ОКПО Code: 14360570 Account: 29244825509100 Purpose of payment: 4627085825848787, Nalivkina Elena Nikolaevna, ИНН: 2596602804 Multicurrency account (U.S. dollar, euro): BENEFICIARY: NALIVKIN ARKADYY, Kherson, Ukraine ACCOUNT: 2620001696644 BANK NAME: JOIN STOCK COMPANY "THE STATE EXPORT-IMORT BANK OF UKRAINE" (UKREXIMBANK), KHERSON BRANCH SWIFT: EXBSUAUXKHE BANK ADDRESS: 46, RADIANS'KA STR., KHERSON Maksym’s family also appeals for advice - any useful contacts of rehabilitation professionals, recovery programs, as well as charity organizations or grant programs for such cases. Î Two-year-old

Vanya

Chornozub

from

Kherson Oblast has brain cancer. Since no clinic in Ukraine was able to cure him, he has been transferred to Germany for further treatment. Due to the efforts of many people, two years of therapy brought very good results. Vanya is getting better. But his parents are very short of money to pay for further treatment. His parents appeal to anyone who can help support Vanya’s treatment. Contact person: volunteer Olga Kopylova: +38067-234-1225 Webpage www.donor.org.ua/index.php?module=h elp&act=show&c=1&id=870 Details for money transfers: PrivatBank Account: 29244825509100 Bank branch location code: 305299 Code: 14360570 Details of payment: card replenishment: 4405885012914724, Chornozub À.À., support for son’s treatment Î Sofia Sydorchuk, 3,5 years old, needs your help urgently. The girl has recently been diagnosed with myeloblastic leukemia, she is in hospital, the intensive chemotherapy department. Sofia needs to undergo a course of medical treatment that consists of 4 blocks of chemotherapy (one block has already been done). It is difficult to determine the exact cost of the treatment at this stage; our best estimate is around Euro 200,000. After chemotherapy Sofia needs to move to a specialised rehabilitation clinic in Israel or Germany. Sofia’s family hopes for your support, each day they do treatment and tests. You can make a donation via one of the following options: (1) Donations made through a bank transfer Banking details for transfers in Hr: Beneficiary: ÀÒ “Ukreksimbank” Account: 2924902234 Bank of the beneficiary: ÀÒ “Ukreksimbank” MFO code: 322313 EDRPOU code: 00032112 Payment purpose: receipt of funds to the account of Sydorchuk D.V. 0001025541 (2) Donations via web-money Z351457992891 R639870369876 E252216931289 U585571766822 (For instructions on transferring the money via web-money please refer to: http://webmoney.ua/ withdrawfunds/) Î The Down Syndrome Ukrainian Organisation gathers parents who have trisomic children, in order to help them raise their kids, and aims at changing the public perception of the disease. The Organisation is now opening a Center for Early Development of the Children with Down Syndrome in Kyiv. The association has recently launched the operation “Serebrenaya Monetka” (Silver Coin) in order to raise funds for the center. Transparent boxes have been displayed in the 100 branches of UkrSibBank (the subsidiary of the French BNP Paribas group) in Kyiv, in order to collect the small coins that everybody has in their pockets. All donations are welcome. Details can be found at http://www.downsyndrome.com.ua/; http://www.ukrsibbank.com. The operation will end on March 19th. All the proceeds of the operation will be used to buy equipments and furniture for this Center.” Hryvnya account: BENEFICIARY: Vseukrainskaia Bkagodiyna Organizatsia Down Syndrome ACCOUNT: 26007265663400 MFO 351005 UKRSIBBANK


30 Employment Associate/Principal Banker - Transport Kiev Resident Office The EBRD seeks to recruit an Associate/Principal Banker to be based in the Kiev Resident Office.

The European Bank for Reconstruction and Development has a unique challenge to assist the countries of central and eastern Europe and the CIS in their transition to democracy and market economies.

It offers a unique combination of public and private sector banking expertise, and supports projects through lending, taking equity positions and providing technical co-operation. The Bank focuses particularly on the private sector and is increasing its local presence in the countries of operations.

The Transport Team is a leading provider of finance for transport infrastructure in Central and Eastern Europe and the CIS. It finances projects in both the private and public sectors in all areas of transport including roads, railways, airports and aviation, ports and shipping, which require close cooperation with government counterparts. An Associate/Principal Banker is sought, with a proven track record, to play a leading role in structuring and closing transactions in both the public and private sectors, using the full range of financing structures available to the Bank. Key areas of responsibility The Associate/Principal Banker will work throughout the whole project life cycle of the Bank. This will be accomplished through project origination, screening, due diligence, structuring, negotiation, preparation of documentation, monitoring and disposal (if applicable) of projects. The Principal Banker would be expected to take responsibility increasingly for complex transactions. He/she would also further develop his/her project origination skills and should gain exposure to a variety of products and activities, including equity instruments. Essential Skills, Experience & Qualifications ‹ - ¢ tion. ‹ ( { ~ years for Principal level. ‹ / ƒ ¢ sis and their application in investment decisions and transaction structuring. ‹ 1

Ukrainian or Russian. To apply & for a more detailed job description, please visit our website at www.ebrdjobs.com and submit your CV. Ref. number: 60001143. The closing date for applications is 27 February 2011.

WWW KYIVPOST COM

February 18, 2011

Our company is based in London, England. We represent some of the biggest companies in the industrial world. We have a position available for a

Trainee Researcher 3FTQPOTJCJMJUJFT u *OJUJBMMZ ZPV XJMM XPSL GSPN IPNF 1IPOF BOE )JHI4QFFE *OUFSOFU XJMM CF QSPWJEFE CZ PVS DPNQBOZ u :PV XJMM SFTFBSDI BOE JEFOUJGZ PQQPSUVOJUJFT JO 3VTTJB $*4 BOE $FOUSBM &VSPQF GPS PVS DMJFOUT 3FRVJSFNFOUT u 5IF KPC SFRVJSFT GMVFOU &OHMJTI u :PV NVTU CF IJHIMZ NPUJWBUFE SFTPVSDFGVM ZPV NVTU CF BCMF UP XPSL BMPOF BOE ZPV NVTU IBWF UIF BCJMJUZ UP FYQMPJU SFTPVSDFT BWBJMBCMF WJB UIF *OUFSOFU The right candidate will be rewarded with a generous salary plus commission, plus travel on occasion to Europe and London. Please submit an English CV to mroque@tradepartner.eu

IFC Ukraine Investment Climate Project is looking for qualified candidates to fill in the position of

Legal Analyst to review and assess the effectiveness of legal and operational framework of production and selling/export of agricultural and food products, with the focus on regulations related to food safety, in particular in pilot subsectors (dairy, grain, meat, fruits/vegetables). • The Consultant shall also review regulations related to (1) agricultural inputs markets; (2) construction and operations of post-harvest handling and storage infrastructure of grains sector. • Detailed recommendations to simplify and streamline related regulatory procedures and requirements should be developed. The work requires extensive legal drafting as well as intense negotiations with the government and private sector stakeholders. Requirements/Qualifications: • Masters or PhD in Law, or equivalent, and at least 5 years relevant professional experience; • Outstanding knowledge of Ukrainian laws and regulations and strong analytical skills; • Extensive work experience in analyzing legislation and regulations; • Hands-on experience in drafting legislation or regulations; • Fluent Russian and Ukrainian, knowledge of English would be a major asset. More information about IFC is available at www.ifc.org Please send your CVs indicating the position in the subject line to UkrHR@ifc.org by March 7, 2011

Danish Refugee Council, an international NGO, seeks a

IFC, a member of the World Bank Group, creates opportunities for people to escape poverty and improve their lives. In addition to its investment work, IFC executes a large program of Advisory Services (AS) focused on private sector development. We look for qualified candidates to fill in the following Kyiv based positions:

Industry Analyst/Expert, Sustainable Energy Finance Advisory (Short-term contract with a possibility of off-hour work) Responsibilities: • Preparation of industry guides on selected Ukrainian industries under the aspect of energy and resource efficiency as well as renewable energy opportunities, targeting for financial institutions (credit officers) and enterprises. The industries selected so far relate to food and agro business and include bakery, dairy and meat industries. Each industrial chain will require a separate guide on the named industry as well as upstream industries. For example, the bakery industry chain will include the guides for: baking industry; flour-milling industry; grain storage and drying; planting (in particular, with the focus on No-Till technology); waste-to-energy in grain-crops planting (straw use). Other industries can be added up. CVs from respective candidates are also welcome. • Assistance in technical analysis of energy and resource efficiency opportunities during advisory engagement with financial institutions (FIs); • Other duties as defined by Project Manager (e. g. preparation of presentation materials for meetings; seminars etc.). Qualifications: • 2-5 years of relevant work experience in the industries listed above; • Proven technical background, preferably with the focus on energy and resource efficiency; • Knowledge of FIs’ requirements to business plans; competence in conducting economical/business studies and analyzing information, preparing recommendations; • Strong analytical and business writing skills; proficient in MS Office, • Attention to details; • Outstanding interpersonal skills and ability to work across teams; • High level of initiative and drive and ability to work independently; • Written and verbal fluency in English, Ukrainian and Russian.

Canadian project on local economical development is looking for a Financial and Administrative Manager The Conference Board of Canada is undertaking a five year project funded by the Canadian International Development Agency to build capacity in Evidence-Based Economic Development Planning (EBED) in Ukrainian oblasts and municipalities. The EBED project’s purpose is to have regional and municipal governments institutionalize an evidence-based economic development planning process that is aligned at all three levels of government. Accomplishing this purpose should have the long term impact of increasing the economic well being of Ukrainians and reducing regional economic disparity through the better economic performance of oblasts and municipalities. EBED is seeking a qualified candidate to join its regional team based in Kyiv as a Financial and Administrative Manager. Qualification requirements: 1) Post Secondary Education at the bachelor or master degree level; 2) Three or more years experience as a financial manager in international projects; 3) Familiarity with the financial reporting standards of international projects; 4) Computer literacy (MS Windows, Internet, 1S Accounting, etc.); 5) Appropriate English skills for communication and processing financial documents; 6) Training in financial reporting according to USAID, CIDA, EU requirements is an asset. Main responsibilities: t QMBOOJOH BOE NBJOUFOBODF PG CBOL BOE PUIFS GJOBODJBM PQFSBUJPOT XJUIJO UIF project; t NBJOUFOBODF PG BDDPVOUJOH BOE GJOBODJBM SFQPSUJOH t TVQQPSU JO UIF PSHBOJ[BUJPO PG CVTJOFTT USJQT XPSLTIPQT BOE PUIFS FWFOUT t GJMJOH BOE QSPDFTTJOH PG UIF OFDFTTBSZ BDDPVOUJOH BOE GJOBOJDBM EPDVNFOUT t TVQQPSU JO NBJOUFOBODF PG )3 EPDVNFOUBUJPO EBUBCBTFT PG QSPKFDU DPOTVMU ants, etc. Benefits: 1) part-time work and flexible work schedule; 2) 4 years project duration (agreement for 6 months with further prolongation); 3) payment is on the basis of private entrepreneur agreement. Interested candidates should send their detailed curriculum vitae and covering letter in confidence by February 23rd 2011, with the name of the position highlighted in the subject line, to the following: Tel/fax: +380-44-207-1259 E-mail: valentyna.liashenko@expertise.org.ua Tel. +38-098-302-3138, marked “For the attention of Valentyna Liashenko� We thank all candidates who wish to apply, however only short-listed applicants will be contacted.

For corporate information please visit www.ifc.org. Please send your CV and cover letter to the address UkrHR@ifc.org Closing date for applications is March 8, 2011.

VACANCY ANNOUNCEMENT United Nations Development Programme (UNDP) invites applications from highly qualified, energetic, proactive and experienced professionals for the posts of

PROCUREMENT ASSISTANT

Ukraine (FTA, UNDP COUNTRY OFFICE) who will be responsible for provision of procurement services ensuring high quality and accuracy of work, implementation of operational strategies, support to procurement processes, implementation of sourcing strategy and support to knowledge building and knowledge sharing.

DEADLINE FOR APPLICATIONS IS 25/02/2011 For detailed job description and in order to apply for these and other UNDP vacancies please visit http://undp.org.ua/jobs, complete the UN PERSONAL HISTORY FORM* (P-11) and attach it to the on-line application. UNDP Office in Ukraine 1, Klovskiy uzviz, Kiev 01021

The

One of Ukraine's top news sources, has an ongoing student internship program. We have openings for students who are:

majoring in journalism or mass communications or studying to become translators To be considered, please send CV to Brian Bonner, chief editor, Kyiv Post at bonner@kyivpost.com

Child-Focused Asylum Lawyer based in Kyiv, for asylum seeking children with experience practicing asylum law at all stages of asylum procedures, with both government and NGOs. Start immediately, through December 2012. Applications in the form of a CV and cover letter should be sent to

jobs@drc-ukraine.org by 23/02/11.

Ukrainian National Initiatives to Enhance Reforms (UNITER) project implemented by PACT, INC. seeks candidates to fill the position of

GRANTS MANAGER Summary of position: Grants Manager shall provide administration of the full cycle of grants management activities for the project in compliance with Pact’s procedures and donor’s regulations including grant announcement, preaward assessments, compliance visits and close-out procedures, maintain complete files for each grant. Also, GM shall provide direct technical assistance and/or arrange for technical assistance to NGO grantees. Requirements: • University Degree • At least 2 years working experience. Experience with international technical assistance programs supported by USAID is an asset. • Fluent oral and written English, Ukrainian and Russian. • Attention to details and ability to multi-task under pressure. • Excellent knowledge of Microsoft Excel. • Excellent interpersonal and communication skills. • Experience with NGO grant management and outreach is an asset. To Apply: Please send your CV and cover letter to jobs@pact.org.ua and put “Grants Managerâ€? in the subject by March 04, 2011. No phone calls please. Please refer to the website www.uniter.org.ua for more details.


WWW KYIVPOST COM

Employment/Education 31

February 18, 2011

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32 Photo Story

www.kyivpost.com

February 18, 2011

BY S V I T L A N A T U C H YN S KA

Hamina Mechanif, an Afghan woman who holds Ukrainian citizenship, stands near the window at the Mukachevo center for women and children.

TUCHYNSKA@KYIVPOST.COM

UZHGOROD, Ukraine – For a year and a half, a 15-square meter room in western Ukraine has been home for Said Mustafa Marufi, his mother and six siblings. It may be their home for years to come. The Latoritsa temporary shelter in Mukachevo is the family’s latest stop in a homeless refugee journey that forced them to flee Afghanistan, with stops in Pakistan and Russia, before ending up in Ukraine. “We fled Afghanistan during Taliban times and went to Pakistan,” Marufi sayd. Only 14 years old, he is now the head of the family after his father died in circumstances that they prefer not to discuss. Marufi had hoped to cross into Slovakia, making it into the European Union. But they were caught and have been held ever since, international refugees in limbo. The family has applied for asylum status in Ukraine. Last year, more than 1,500 migrants were detained on the border between Ukraine and neighboring EU countries. Another 700 were returned to Ukraine, under an agreement that allows EU countries to send migrants back upon proof that they entered from Ukraine. Tossed into poorly funded detention and temporary shelters, run by the police and border guards, migrants face ill treatment – from poor nutrition to beatings and torture, according to a recent report by Human Rights Watch. They have little hope of gaining refugee status and often remain at the centers for years. Latoritsa is home to 59 people like the Marufi family, including 32 children. Another temporary accommodation centre in Zakarpatska Oblast – Barvinok in Perechyn village accommodates 22 asylum seekers. Most of people in these centers arrived from Afghanistan, some from Tibet and Syria, transiting Ukraine on their way to the EU. Despite new furniture and heating, paid for by the EU, the centers haven’t received a penny from the state budget since the end of 2010. “We are learning to live without money,” said Luka Fedurtsya, who heads the two centers. The situation is worse at the Odesa temporary shelter, home to up to 200 asylum seekers, which has already asked United Nations to pay their electricity bills and meals. “In 2010, one liter of milk was given to a child every week. Now there is no milk at all. There is also no soap and shampoo,” says Marifat Ahmat Arshat of Afghanistan. He lives in Latoritsa with his wife and two small children. The Interior Ministry, which is now in charge of these centers, blames the financial troubles on administrative reform. The State Migration Service is in the process of being created to replace the State Committee of Nationalities and Religions. But in the meantime, there is no entity that can obtain money from the state budget. Many fear more problems. “People from the committee and those working in accomodation centers have acquired unique experience and received specialized training. If they all to be dismissed and replaced with untrained OVIR (foreign registration office) officers, it will be a disaster,” says Oldrich Andrysek, regional representative of the U.N. High Commissioner for Refugees (UNHCR) in Belarus, Moldova and Ukraine. Fedurtsya adds that it would be the same as if “a person who was a prosecutor for decades switched to being an advocate.” The State Border Service admits there is room for improvement in migrants’ treatment. Oleksandr Skigin, head of central administration department of State Border Service, says he was aware of most of the cases from the Human Rights Watch report. Eight officers suspected of mistreating

Europe’s way station in western Ukraine

A border guard stands in a hallway that is safeguarded by a grated metal door at an entrance to the Mukachevo residential shelter.

Khalid Jamal, a 25 year-old Iraqi asylum seeker, sits in a room that houses six other young men who fled various countries in the Chop temporary holding center.

A four-month-old Afghan baby girl lies on a bed that is shared by her parents and brother at the Latoritsa temporary center in Mukachevo.

A Turkish man lies in bed. (Photographs by Joseph Sywenkyj)

migrants were fired in 2010. “Guards have to be trained more, conditions need to be improved and the law has to be amended, but it takes time,” Skigin adds. Only 10 percent of detained migrants apply for asylum in Ukraine. And last year, only 10 percent of those applications were granted. “In most cases border guards or police do not tell people about their options. Often language barrier is the reason with few interpreters available,” says Mykola Towt, head of department for migration of Zakarpatska Oblast. Those who do not apply wait for a court decision and are either sent back

Protection Group. In nearby Chop, a new detention center for families is being built. However, the residents don’t want it in town. “The problem is the guards are very corrupt and they often let detainees out and even bring them prostitutes,” says Larysa Stupak, the deputy mayor of Chop. Even those given refugee status have a tough time. There is little state support for integration, such as language classes. Without a passport, they cannot receive an identification code to allow them to seek employment and pay tax, or receive unemployment benefits and free training.

home or, if they are undocumented and impossible to identify, let out of the detention centers after up to six months and often try to cross the border again. Those who don’t receive refugee status are left with no legal status, as Ukrainian legislation does not imply humanitarian status. In such an environment, corruption flourishes. Officials deny it, but refugees report that bribes get paid to the Committee for Nationalities and Religions in Kyiv, which decides on status. “According to refugees, the bribe for the status starts at $1,000,” says Dmytro Hroysman, head of the Vinnytsia Human Rights

Marufi, the 14-year-old head of a family of seven, is still waiting for a decision on their status as he dreams of studying computer science. This dream is not likely to come true in Ukraine. According to the law on education, refugees cannot get higher education for free. “I understand I only have God to ask for help. I will probably have to work to feed my family,” Marufi says. He proudly tells of his first job in Ukraine – chopping firewood with an axe in a village nearby, earning $7 per day. Kyiv Post staff writer Svitlana Tuchynska can be reached at tuchynska@kyivpost.com


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