Business news from Ukraine

KYIV. Jan 12 (Interfax-Ukraine) – State-run Ukroboronprom Concern is mulling participation in a program for the modernization of PT-91 Twardy main battle tanks (MBT) used by the Armed Forces of Poland.

Prospects for Ukraine-Poland cooperation in the program for PT-91 MBT modernization were discussed during a recent visit of Ukrainian defense industry specialists to Warsaw for talks with Polski Holding Obronny sp. z o.o., or Polish Defense Holding, Ukroboronprom’s press service said.

The sides will continue talks in Ukraine in the middle of January, and now Polish specialists are to visit Lviv armored fighting vehicle plant to familiarize themselves with the production of components of the Ukrainian-made T-72 tank (a Soviet-designed T-72M1 was the prototype of the PT-91 main battle tank), the press service reported with reference to Director of Ukroboronprom’s Kharkov machine-building plant “FED” Oleksandr Paschenko, one of the Ukrainian delegates who visited Poland.

During talks in Warsaw, the Ukrainian side confirmed its readiness to cooperate with Poland’s defense industry in retrofitting the Mikoyan MiG-29 twin-engine fighter jet (NATO reporting name Fulcrum).

FED produces and repairs integral hydraulic servo actuators and hydraulic units, and fuel metering equipment for the aviation industry. Its equipment is installed almost in all types of civil and military aircraft in Ukraine and Russia. The company claims its equipment used in more than 60 countries.

KYIV. Jan 12 (Interfax-Ukraine) – Bosch (Stuttgart, Germany), one of the leading auto parts producers in the world, opened 41 Bosch Auto Service stations in Ukraine in 2015, and the number of stations in the country reached 218 (taking into account Bosch Diesel Service stations), Director General of Robert Bosch Ltd. (Kyiv) and Vice President of Bosсh Termottechnik GmbH in Baltic and CIS countries (apart from Russia) Vitaliy Bulda has said.

“In 2014, we had 219 stations, including 42 stations on the occupied territory of Ukraine. In 2014 we lost 42 stations in Crimea and in eastern Ukraine. They were closed, as we do not supply auto parts to the occupied territory. In 2015, we opened 41 stations in other regions,” he said at a briefing on Monday.

He said that new stations were opened in Ivano-Frankivsk, Kharkiv, Mariupol.

“Financial flows after the occupation of territories of Ukraine were redistributed: if earlier Zakarpattia region was not popular, today with the development of tourism and infrastructure it has become a promising region. I cannot say that there are failure regions – business is moving, and Bosch Services closed in Luhansk and Simferopol moved to other regions. In addition, the development of roads in the country, even careful, also promotes the appearance of servicing stations on them,” Bulda said.

He did not disclose the number of stations that will be opened this year, although he said that in 2019 it is planned to bring their number to 332.

Bulda said that in 2015, a trend of opening Bosch Auto Services by companies that earlier worked with one group of cars, for example, VW, was first recorded in 2015. Bosсh allows servicing a wide range of cars and supplies equipment.

“We supply auto parts, provide technical documents, train and supply equipment. I think that it is hard to resist to this combination,” he said.

Bulda said that the auto part market reacts to the situation on the Ukrainian automobile market that more than halved last year.

“We here see the trend that shows that clients prefer reliable companies that exited on the market yesterday, they exist today and will exist tomorrow – Bosch is this company,” Bulda said.

Bosch began developing the project Bosch Service in Ukraine in January 2002, in late 2001 it signed an agreement with the European Bank for Reconstruction and Development (EBRD) on the issue of $12.35 million for lending participants of the created franchise network of service stations.

In summer 2007, the EBRD decided to provide Bosch Ukraine with another loan of EUR 6 million.

Bulda said that at present the company does not attract funds from the EBRD to open new stations.

Bosch Auto Service provides maintenance, diagnostics and repair of cars and minibuses, Bosch Diesel Service specializes in maintenance and repair of all traditional components of diesel injection systems.

KYIV. Jan 11 (Interfax-Ukraine) – The Cabinet of Ministers has approved license terms for business activities on transporting passengers, dangerous goods and hazardous waste by rail, aimed at improving the mechanism of work of rail carriers.

This is fixed in government decree No. 1168 of December 9, 2015.

The Infrastructure Ministry told Interfax-Ukraine that among the innovations of the document is the requirement for the appropriate qualification of the staff of a business entity (a licensee), i.e. railway education, work experience, etc., as well as the presence of those responsible for organizing carriage of passengers and dangerous goods.

In addition, the licensee must formalize employment relationship with the staff of railway transport through signing a collective or employment contract; its director and deputy heads should not have outstanding convictions for premeditated crimes.

In addition, there will be limited the issuance and cancellation of licenses issued to economic entities, whose activities are affected by the residents of states conducting an armed aggression against Ukraine and/or whose actions create conditions for a military conflict and use of military force against Ukraine.

KYIV. Jan 11 (Interfax-Ukraine) – The National Commission for Communications Regulation (NCCR) at the suggestion of the Ukrainian State Centre of Radio Frequencies has approved the reduction of tariffs for a number of services related to the use of radio frequency resource of Ukraine and the measurement of parameters of telecommunications networks by 14-40%.

According to a press release from the center, the decision was approved at a NCCR meeting on December 29, 2015.

Thus, this decision introduces coefficients to the relevant articles of the tariffs. For example, when determining payment for the calculation of electromagnetic compatibility of radio electronic means for digital cellular communications GSM-900, E-GSM, R-GSM, GSM-1800 within the implementation of the mode of frequency hopping, coefficient 0.6 will be applied to the tariff. The tariff is UAH 665 for each base station.

When determining payment for the calculation of electromagnetic compatibility of radio electronic means for digital cellular communications GSM-900, E-GSM, R-GSM, GSM-1800, CDMA-450, CDMA-800, CDMA-2000, coefficient 0.8 will be applied to the rate. The tariff is UAH 420 per nominal frequency in each sector of a base station.

KYIV. Jan 11 (Interfax-Ukraine) – National Nuclear Generating Company Energoatom has raised a $35 million credit from state-run Ukrgasbank (Kyiv).

The company said on the public procurement website that the sides signed the agreement on December 21, 2015.

The cost of the credit line will be $13.125 million (value added tax not included), or 12.5% per annum. The credit line is opened for three years.

Alfa-Bank (Kyiv) with the offer worth $16.275 million took part in the tender.

Energoatom is the operator of all four Ukrainian-based operating nuclear power plants, which have 15 VVER reactors with an overall generating capacity of 13.835 gigawatts.

Ukrgasbank was created in 1993. The state held 94.9409% of shares in the bank as of October 2015. Ukrgasbank ranked 11th among 123 banks operating in the country on October 1, 2015 in terms of total assets (UAH 34.044 billion), according to the National Bank of Ukraine.

KYIV. Jan 11 (Interfax-Ukraine) – The Cabinet of Ministers of Ukraine has approved the updated procedure for electronic administration of value added tax (VAT).

According to cabinet resolution No. 1177 of December 30, 2015 the updated procedure was approved to meet the amendments to the Tax Code that took effect from January 1, 2016.

The government said that the electronic VAT administration procedure was updated to realize the mechanism for partial payment of VAT by agricultural companies that use the special taxation regime depending on the type of agricultural products they make.

The procedure settles the inclusion of the specific conditions for taxpayers who use cash taxation method into the electronic VAT administration system.

As reported, the Ukrainian parliament has approved a compromise on revoking the beneficial VAT taxation regime for farmers via granting the beneficial regime for the period until they transfer to the general taxation system.

In 2016 for the period when milk and meat producers transfer to the general taxation system 80% of VAT will be left for them and 20% will be sent to the budget.

Farmers working with grain and industrial crops will send 85% of VAT to the budget, and other farmers – 50%.

Since 2017, the VAT beneficial regime for farmers will be revoked.