Business news from Ukraine

Business news from Ukraine

UKRAINIAN CONSTRUCTION MINISTRY IN 2020 BANS HOSTELS, SHOPS OVER 1,000 SQUARE METERS IN HOUSING COMPLEXES

The updated state construction standards, which ban to arrange hotels, hostels and shops with a total area over 1,000 square meters in the new housing complexes, will come into force from January 1, 2020, a press service of Deputy Minister of Regional Development, Construction, Housing and Utilities Lev Partskhaladze has said.
According to a report, new state construction standards also ban to arrange in the housing complex specialized establishments and enterprises, operation of which can cause air or territory pollution; specialized stores of construction materials, lubricants and other goods (for example, paints, varnishes, flammable substances and materials); workshops for the repair of shoes and household appliances and appliances with an area of over 100 square meters: baths, saunas, production facilities, funeral homes and others.
At the same time, the document permits designing on any floors of the housing complex built-in and built-in attached public premises: shops, cafes, beauty salons, bank branches, etc. Previously, this was permitted only up to the third floor inclusively.
The norm applies exclusively to new construction of the residential buildings. In addition, a mandatory requirement for the placement of such a built-in institution is placing it in a separate fire compartment.
The exception is objects that negatively affect a person in terms of noise, vibration, electromagnetic radiation and radiation. For example, a cafe with a round-the-clock mode of operation, increased noise levels and so on.

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LEADING MOBILE OPERATOR OF UKRAINE KYIVSTAR OPPOSES DISCONNECTION OF ‘GREY’ PHONES USING IMEI CODE

The customs office should address the issues of “grey” imports of mobile terminals, not mobile communications operators.
“As for IMEI codes [international mobile equipment identity], we oppose to disconnecting subscribers due to the fact that an unscrupulous seller sold them a ‘grey’ phone. The fight against illegal import and sale of mobile phones is a function of customs authorities and law enforcement agencies. Shifting this work to telecom operators is wrong,” Kyivstar President Alexander Komarov said in an interview with Interfax-Ukraine.
He also said that in order to solve the problem of stolen telephones there is a so-called “black list of devices,” into which the “phones” get under a statement of the owner about theft or loss and after that they can no longer be used in the networks of operators of a particular country.
At the same time, Komarov said that the identification of subscribers is needed. However, it should be carried out sequentially, in several stages, with certain incentives for subscribers from the operators and the state, he said.
“Identification is, first of all, protecting the subscriber himself from the fact that someone can “steal” the phone number and withdraw money from the card. For some reason, our people are not afraid of this, they think about mythical surveillance, and not about basic security principles of their funds,” the president of Kyivstar said.
According to him, today, up to 15% of the subscribers in the Kyivstar network are identified customers.

UKRAINIAN LAWMAKERS UPDATE DRAFT LAW ON OPENING SPACE FOR PRIVATE COMPANIES

A new version of the draft law “On amendments into some legislative acts of Ukraine on favoring of space development and attracting investments into space sector of Ukraine” that permits private companies to launch space rockets and conduct work in space.
The document was drafted by the group of the deputies from Servant of the People faction, eHealth coordinator Jaanika Merilo wrote on Facebook.
“On the first day, the deputies registered a bill to open space for private companies, but it turned out that this bill was not the one that was developed by BRDO [Better Regulation Delivery Office] and the private market. Many thanks to the deputies, the head of the committee and the author of the bill, Dmytro Natalukha, the Servant of the People team and Prime Minister Oleksiy Honcharuk for their quick response, absolute understanding and cooperation regarding the fact that the sky needs to be opened. After consultations and discussion of problems in this bill, the bill was recalled and resubmitted in a form that really opens the sky,” she wrote.
According to Merilo, there are many companies in Ukraine that could develop various different solutions for the space industry, emphasizing that space today is more likely to relate to logistics than to the defense sector.
Following the explanatory note to the bill, the text of which was published on the website of the Verkhovna Rada, its adoption will ensure the creation of a competitive environment for the development of private property enterprises along with the public sector of the space industry, as well as lead to attract investment in the space industry of Ukraine.
At present, activities related to the testing, production and exploitation of rocket vehicles can only be carried out by the state-owned companies.

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UKRAINE RAISES GAS PRODUCTION TO 13.882 BLN CUBIC METERS IN JAN-AUG

Production of natural gas in Ukraine in January-August 2019 increased, according to recent data, by 0.9% (by 130 million cubic meters) compared to the same period in 2018, to 13.882 billion cubic meters, according to data from JSC Ukrtransgaz.
According to the calculations of the Interfax-Ukraine agency, gas production by Ukrgazvydobuvannia amounted to 10.073 billion cubic meters (0.6% less compared to January-August 2018), by PJSC Ukrnafta to 773.6 million cubic meters (9.9% more), and other companies to 3.036 billion cubic meters (4.3% up).
In August 2019, gas production amounted to 1.694 billion cubic meters (4.8% less compared to August 2018), in particular by extraction by Ukrgazvydobuvannia totaled 1.205 billion cubic meters (7.2% less), Ukrnafta some 100.9 million cubic meters (7.6% more), and other companies some 387.9 million cubic meters (down by 0.01%).

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NUMBER OF GREEN CARD INTERNATIONAL INSURANCE CONTRACTS IN UKRAINE 45.6% UP

The number of Green Card international insurance contracts signed by the member companies of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) increased by 45.6% in January-July 2019 compared with January-July 2018, to 618,969.
According to the MTIBU’s website, the amount of accrued insurance premiums for this period rose by 35.8% compared to the same period last year, to UAH 1.038 billion.
At the same time, the amount of compensation paid on claims grew by 22.41%, to EUR8.440 million, while the number of claims paid was up by 3.04%, to 3,047.
The MTIBU is the only association of insurers that carry out compulsory insurance of vehicle owners’ civil liability for damage caused to third parties. Its members are 51 insurance companies, including ten full bureau members having the right to sign Green Card agreements.

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FITCH UPGRADES UKRAINE’S LONG-TERM RATINGS TO ‘B’, OUTLOOK POSITIVE

Fitch Ratings has upgraded Ukraine’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to ‘B’ from ‘B-‘, the outlooks are positive, according to a report on the rating agency’s website.
“Ukraine has demonstrated timely access to fiscal and external financing, improving macroeconomic stability and declining public indebtedness, while a shortened electoral period has reduced domestic political uncertainty. Expected macroeconomic policy continuity, the new government’s strong stated commitment to structural reforms and engagement with IFIs mean that Fitch expects further improvements in creditworthiness,” the report says.
“President Volodymyr Zelensky’s strong popular support and his party’s control of government and parliament provide the government with a uniquely strong position to move ahead with its reform-minded policy agenda. After a commanding victory in the second round of presidential elections, the president’s party Servant of the People (SOP) obtained control of the Verkhovna Rada (256 out of 450 seats) in snap parliamentary elections (originally scheduled for end October). The recently formed government under Prime Minister Oleksiy Honcharuk includes technocratic, pro-western and reform-minded ministers. Key economic policy makers such as Minister of Finance Oksana Markarova remain in their positions, supporting the continuity of policies underpinning reduced macroeconomic imbalances and improved stability,” Fitch said.
“The new prime minister intends to negotiate a new and longer program with the IMF, possibly an Extended Fund Facility (EFF), in the near term. The high likelihood of continued IMF engagement will facilitate access to official and market financing to meet large sovereign debt repayments in 2020-2021, and serve as an anchor for policies and reforms that could potentially lift growth prospects,” the agency experts stated.
“Prudent fiscal management, stable growth, declining interest rates and moderate exchange rate depreciation pressure will support continued government debt reduction. We expect government debt to decline to 47.9% of GDP (55.8% including guarantees) by end-2019, down almost 20 p.p. from the peak of 69.2% (80.9% including guarantees) in 2016 and below the current 57.5% ‘B’ median, and reach 44.4% by 2021. Government debt dynamics are highly exposed to currency risk as 67% is foreign currency denominated, but greater non-resident participation in the local bond market will help increase the share of local currency debt and extend maturities,” according to the document
“The long-awaited increase in Ukraine’s credit rating was made possible thanks to macroeconomic stabilization, a decrease in government debt and a reduction in political risks. This means that confidence in Ukraine is growing, and the risks associated with our creditworthiness are decreasing. And most importantly, the cost of borrowing will decrease,” Finance Minister of Ukraine Oksana Markarova said.

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