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Business news from the Ukrainian League of Industrialists and Entrepreneurs

COMPETITION AGENCY PERMITS INTERNATIONAL INSURANCE CONSORTIUM B.V. TO BUILD UP 90% STAKE IN PROVIDNA INSURER

KYIV. Aug 18 (Interfax-Ukraine) – The Antimonopoly Committee of Ukraine has permitted International Insurance Consortium B.V. (the Netherlands) to build up a stake of over 90% in Providna insurance company (Kyiv), the company has told Interfax-Ukraine.

The company said that at present, a Western European shareholder holds 9.9992% in the share capital of Providna.

The deal is scheduled to be finalized this year.

As reported, according to the National Commission for Securities and the Stock Market of Ukraine, as of Q1 2015, 90.0001% of shares in Providna belonged to Russia’s Rosgosstrakh.

Providna has been working in the insurance market of Ukraine since 1995. It has an extensive regional network, which includes more than 300 offices, 25 centers for loss settlement, and 25 medical centers in Ukraine. The company provides over 80 mandatory and voluntary insurance products to individuals and companies.

AMBASSADOR ANDREW TESORIERE APPOINTED NEW HEAD OF EUBAM

KYIV. Aug 17 (Interfax-Ukraine) – Ambassador Harcourt Andrew Pretorius Tesoriere has been appointed as Head of the EU Border Assistance Mission (EUBAM) to Moldova and Ukraine, the EU Delegation to Ukraine has reported.

“I am delighted to have been selected for this position. I very much look forward to consolidating and strengthening EUBAM’s close working relationship with our partners in Moldova and Ukraine, both those in government service, but also elected representatives, the business community and civil society. I also wish to contribute positively within the terms of EUBAM’s mandate to inclusive solutions that enhance regional cooperation, including economic prosperity for Transnistria,” Tesoriere said.

“He is taking up this position at a crucial time for the Mission, when strengthening regional border security has never been more vital. At the same time, security must be supported by building economic prosperity in the region including Transnistria. The implementation of Association Agreements and Deep and Comprehensive Free Trade Area with Moldova and Ukraine will further facilitate regional trade and strengthen economic stability of these countries. The EU Border Assistance Mission has an important role to play in delivering on this agenda as part of the EU’s wider efforts,” the EU Delegation to Ukraine said.

Before his appointment, Andrew Tesoriere served as the Deputy Head of Mission since December 2014. He has deep experience at a senior level with the UN, OSCE, NATO and the British Government in the work of EUBAM, notably integrated border management, trade facilitation, good governance and mediation.

Andrew Tesoriere is a former senior British diplomat and is a specialist in security, trans-boundary, governance and Islamic issues. He has served as British Ambassador to Albania, Algeria and Latvia; and Chargé d’Affaires to Afghanistan and Syria. Andrew has served in the British Armed Forces, as Executive Chairman of the OSCE postgraduate Academy, and has studied diverse languages, including French, Russian, Arabic, Spanish, Farsi, Pashto, Latvian and Albanian.

EUBAM’s primary objective is to make a sustainable contribution to the development of border-management procedures, thus deterring cross-border crime and fraud. By serving the legitimate needs of Ukrainian and Moldovan citizens, travelers and business, including from Transnistria, EUBAM contributes to enhancing regional security and economic development. The Mission has been working with the border and customs services of Moldova and Ukraine since 2005 to assist the two states in bringing their control procedures into line with EU and international standards. The Mission is funded under the EU’s European Neighborhood Instrument.

UGA PROPOSES THAT FINANCE MINISTRY SETS UP AD HOC GROUP TO SOLVE GRAIN EXPORT PROBLEMS

KYIV. Aug 17 (Interfax-Ukraine) – The Ukrainian Grain Association (UGA) has appealed to Minister of Finance Natalie Jaresko with a proposal to establish a working group to address problems affecting grain exports, according to a press release issued by the association.

“Market participants point out a number of risks for the normal functioning of the grain market. According to the companies, there are cases of grain arrests on ships and at port terminals. Unknown persons buy grain from producers and middlemen for cash, including foreign currency,” the association said.

In addition, the issue of cancelling VAT accumulation and the transfer of farmers to the general system of taxation is being actively discussed. There are also remarks to the mechanisms of transfer pricing, rate fixing, etc.

As a result, to promptly solve the situation and establish systematic work, the UGA proposed that the Ministry of Finance sets up a permanent interdepartmental working group on the grain market with the participation of representatives of profile associations and businesses.

For its part, the UGA has stated its willingness to actively cooperate and provide necessary expertise and organizational support.

The association believes that Ukraine in the next ten years could double the volume of harvest, and businesses and governmental agencies should work together to solve problems and ensure the effective operation of the grain industry.

STATE’S LOSSES FROM SHADOW SCHEMES IN AGRICULTURE TOTALS AROUND UAH 20 BLN – EXPERTS

KYIV. Aug 17 (Interfax-Ukraine) – The losses faced by the state as a result of shadow schemes in agriculture totals about UAH 20 billion, which exceeds the level of benefits agribusinesses received at the expense of VAT in 2014 standing at UAH 19.8 billion, according to a press release issued by the Ukrainian Agribusiness Club association (UAC).

The agency said that the government is not giving up its attempts to abolish VAT benefits for the agricultural sector.

“Now the issue of filling the budget to ensure the normal functioning of the state and fulfilling the requirements of international lenders is very acute. But instead of implementing the promised reforms, eliminating corruption and withdrawing the economy out of the shadows, the government is trying to cover the budget deficit by increasing tax burden on agriculture,” UAC agricultural markets expert Vitaliy Kordysh said.

According to him, the effect of abolishing VAT benefits could be reversed. It would lead to the reduction of GDP in the industry businesses retreating into the shadows. Currently, the share of agriculture in the shadows is lowest among all the sectors of the economy and stands at 15% with the national indicators being at a level of no less than 42%.

The association believes the main reason for tax shortage in the national budget is the shadow turnover of agricultural land, counterfeit seeds, plant protection agents and the shadow grain market. In addition, according to official statements, damage amounting to $200 million, or UAH 4.6 billion, was caused by the State Food and Grain Corporation via corruption schemes.

UKRAINIAN COMPANIES BRING 26.1 TIMES MORE GOODS TO CRIMEA THAN SHIP FROM IT IN H1 – STATISTICS

KYIV. Aug 17 (Interfax-Ukraine) – Shipments of goods to the Crimean free economic zone, which operates in temporary occupied territory of Ukraine, from the rest of Ukraine in the first half of 2015 amounted to $472.5 million, while shipments from Crimea to the rest of Ukraine were estimated at $18.09 million, which was 26.1 down, the State Statistics Service of Ukraine reported on Friday.

Shipments of Ukrainian goods to Crimea in June 2015 alone were estimated at $82.04 million, while they brought goods worth $2.6 million from Crimea, which was 31.5 times down.

Shipments to Crimea to the tune of $81.45 million in May 2015 were 27.6 times down on shipments from Crimea to Ukraine ($2.95 million).

As was reported, Ukraine’s State Statistics Service has started monitoring and publishing data about freight movement between Crimea and the rest of Ukraine only this year.

Special customs regulations are in effect for goods shipment across the administrative border between the Crimean free economic zone to and the rest of Ukraine as of January 1, 2015, under the law on the creation of the Crimean free economic zone and specific procedure for doing business in the temporary occupied territory of Ukraine dated August 12, 2014.

SURPLUS OF UKRAINE’S FOREIGN TRADE IN GOODS IN JUNE 2015 GROWS TO ALMOST $0.4 BLN – STATISTICS

KYIV. Aug 17 (Interfax-Ukraine) – The surplus of Ukraine’s foreign trade in goods in June 2015 demonstrated a positive trend for a fifth month in a row and amounted to $388.6 million against $296.1 million in May 2015 and $229.3 million in April 2015, the State Statistics Service reported on Wednesday.

The surplus of Ukraine’s foreign trade in goods in June 2015 from June 2014 soared by 6.4 times.

Goods exports in June 2015 declined by 29.3%, to $3.13 billion, while imports fell by 37.2%, to $2.74 billion.

Exports in June 2015 from May 2017 grew by 7.7%, while imports rose by 5%.

In the first half of 2015, goods exports declined by 35% year-over-year, to $18.53 billion, while imports fell by 38.5%, to $17.28 billion, while the surplus more than tripled to $1.25 billion.