JSC OTP BANK and the European Business Association (EBA) in partnership held an offline event for Ukrainian export-oriented companies, as well as all business representatives interested in export opportunities.
“Exporters: Talk & Network” became a platform for discussing the challenges faced by companies in international markets, as well as finding ways to expand exports of Ukrainian goods and services.
In particular, Volodymyr Mudryi, Chairman of the Board of OTP Bank, mentioned programs from international organizations as opportunities for exporters. In his speech, he emphasized that the Bank’s mission today is to build a bridge between global companies and donors represented in Ukraine.
“In order to work in our country, all international organizations need a responsible and reliable partner with a history and a good reputation. Someone with whom you can speak the same language. So, for global companies, we act as a kind of “translator” of the needs that exist in our market. This is one of our missions,” said Mr. Mudryi. He emphasized that OTP Bank was among the first to start cooperation with the EBRD, and now it also has extensive programs with IFC. “In addition, within the framework of cooperation with the USAID Project “Investments for Business Sustainability”, we have closed one program of co-financing for MSMEs on preferential terms ahead of schedule, and recently received the second tranche to support business,” the banker emphasized.
However, in addition to global instruments such as programs with international companies, the Bank also supports exporters in their daily work. According to V. Mudryi, OTP BANK has developed profitable and customized services and products – a separate module “Currency Contracts” in the Click OTPay client-bank system, which has complete information on the status of settlements under export and import contracts, currency SWAP, lending, the “Trading Platform” service, which gives the client the opportunity to fix the exchange rate from 1 cent, and also provides access to the exchange of exotic currencies. “We try to optimize and personalize the work with the Bank for our clients as much as possible, to make it as convenient as possible. To this end, we have set up many processes: for example, any new contract must be processed and confirmed by the Bank on the same day,” said Mr. Mudry.
During the event, he advised entrepreneurs to expand their knowledge of ESG (environmental, social, corporate governance) sustainability standards, which are increasingly required by international organizations from Ukrainian businesses. “It is inevitable and it is already knocking on our door. There are requirements from the EBRD, the World Bank, and the National Bank of Ukraine is also planning to develop its own standards. So now, at the level of the NABU (Independent Association of Banks of Ukraine), we are trying to bring together all the requirements so that there is a common understanding of what we will implement, as well as to develop a schedule for the transition to ESG standards,” said Mr. Mudryi.
Yulia Vitka, Deputy Project Manager, spoke about various programs for exporters and SMEs and the opportunities of the USAID Investment for Business Sustainability Project. Ruslan Gashev, Chairman of the Board of Export Credit Agency, presented ECA’s experience and outlined changes in the Agency’s work that allowed it to expand cooperation with business representatives.
“Exporters: Talk & Network: tools to support export-oriented companies” was the third offline event for exporters that OTP BANK and the European Business Association held in partnership. Previous meetings with business took place in the summer and spring of 2024.
The European Business Association (EBA), the American Chamber of Commerce in Ukraine (AmCham) and the Association of Tobacco Manufacturers “Ukrtobacco” have appealed to the Verkhovna Rada to support in the second reading the draft law No. 11090 on increasing the excise tax on tobacco products as proposed by the Cabinet of Ministers.
“It is necessary to provide for the EU’s approach to determining a single euro to hryvnia exchange rate throughout the year (as of October 1 of the previous year for the entire next year) in order to ensure business planning for enterprises that are the largest taxpayers in Ukraine, which, according to the official opinion to the draft law and relevant letters, is insisted on by both the Rada Committee on Ukraine’s Integration into the EU and the Government Office for Coordination of European and Euro-Atlantic Integration of the Cabinet of Ministers,” the second version of the draft law reads on the EBA website.
The associations are confident that the initiatives of some Ukrainian MPs to introduce conceptual changes to the decision already adopted in the first reading to change the excise tax rates on tobacco products pose significant risks to the State Budget of Ukraine. These proposals could provoke a galloping growth of the illegal cigarette market, which has been reduced with extraordinary efforts for several months, taking into account the recommendations of the G7 countries and the leadership of the Chairman of the Parliamentary Financial Committee Danylo Hetmantsev.
The most critical and risky initiatives, according to the member companies, are the proposals to establish an ad valorem excise tax on tobacco products at 25% and to compare the tax rate for cigarettes and electrically heated tobacco products (EHT).
It is emphasized that such an initiative does not comply with the European approach and the practice of EU member states.
“Please take into account the position of the united business community when making the final decision on the revision of excise tax rates on tobacco products as part of the further consideration and adoption of Draft Law 11090,” the association summarized.
Earlier, the Union of Ukrainian Entrepreneurs (UUE) and the U.S.-Ukraine Business Council (USUBC) called for the adoption of the draft law on tobacco excise taxes in the version of the Cabinet of Ministers.
As reported, on June 4, the Verkhovna Rada supported in the first reading and adopted as a basis the draft law No. 11090 on increasing the excise tax on tobacco products.
The draft law provides for the conversion of excise tax rates on tobacco products from hryvnia to euros, reaching the EU minimum excise tax level on cigarettes (EUR90 per 1000 cigarettes) through a gradual increase in specific excise tax rates by 2028, returning to the differentiation of excise tax on HTPs and cigarettes, and introducing a special mechanism for calculating excise tax on tobacco products based on the exchange rate.
According to the estimates of the Ministry of Finance described in the draft Budget Declaration, this will increase state budget revenues by UAH 0.6 billion in 2025, by UAH 5 billion in 2026, by UAH 9.4 billion in 2027 and by UAH 13.9 billion in 2028.
The European Business Association (EBA) has appealed to the Chairman of the Verkhovna Rada Ruslan Stefanchuk not to vote for the draft laws No. 10439-10440 on the reform of the Bureau of Economic Security (BES) and amendments to the Criminal Procedure Code and other legislative acts to improve the work of the BES and to finalize the draft laws No. 10088 and No. 10088-1 on the reboot of the BES, which were previously registered in the Rada.
As noted in the EBA statement on Wednesday, the government’s draft law, in particular, does not specify the timeframe for the formation of a renewed BES team after the election of the head, and the re-certification of employees is postponed until after the war.
“For several years, the European Business Association has been emphasizing the need to reboot the BES in order to improve its efficiency and mitigate corruption risks that may arise in the work of this state body, which is responsible for combating economic crime and smuggling,” the EBA emphasizes.
The Association insists that the selection of key positions at the BES should be carried out on a competitive basis, and that it is extremely important and of top priority to appoint an effective leader who will continue to form the team. Therefore, the competition commission should propose to the Prime Minister one, not three, candidates for the position of director in order to avoid possible political influence on such an appointment.
According to business representatives, re-certification of all BES employees is necessary after the election of a new head, and all economic crimes (after the reform) should be within the BES’s competence.
Regarding the criticism of Draft Law No. 10440, the EBA pointed out the difficulty of implementing some of its provisions, in particular, the involvement of the Business Ombudsman Council in searches and seizures in BES proceedings. In addition, according to the association, some provisions duplicate or contradict others, for example, the failure to involve representatives of other law enforcement agencies in investigative actions.
As reported, on October 13, 2023, the Verkhovna Rada Committee on Finance, Taxation and Customs Policy recommended that the Parliament adopt as a basis the draft law No. 10088 “On Priority Measures for Reforming the BES” and its alternative No. 10088-1. This draft law was also supported by the Ministry of Finance and the Ministry of Economy, and the Ministry of Justice made comments.
Later, on December 29, 2023, the Cabinet of Ministers approved its draft law on reforming the BES, which declares a reboot of the Bureau a year after the war. It was sharply criticized by Vitaliy Shabunin, head of the Anti-Corruption Action Center, and Yaroslav Zheleznyak, first deputy head of the parliamentary committee in charge. According to them, in this form, the control over the BES will be retained by the President’s Office, and the IMF will not count this structural beacon.
As a result, the government postponed submitting the draft law to the Rada for a month, but even after it was finalized, it was criticized.
Ukrposhta has started paying pensions for April in all regions of Ukraine, including the difficult areas of Luhansk, Kherson, Chernihiv, Sumy and other regions, the company’s press service said on Wednesday.
The national postal operator notes that all clients served by Ukrposhta receive pension and payments specifically and in cash.
“If a person has changed their place of residence, the company has a mechanism for redirecting payments to any available branch. To do this, you need to contact the contact center of Ukrposhta or the Pension Fund and indicate the data of the new location. If a pensioner who previously received a pension from a bank does not yet have access to a bank branch, he can apply to the Pension Fund of Ukraine to receive a pension at the nearest branch of Ukrposhta or submit an application through the postman or at any post office,” the report says.
According to Ukrposhta, in March, the company delivered 85% (UAH 8.9 billion) of pensions in cash to cities and villages across Ukraine, where it was safe.
The vast majority, namely 83% of members of the European Business Association (EBA), forecast growth of their business in 2022, while a year ago 60% members said this, according to Business Forecast 2022 conducted by the European Business Association together with Nestlé Ukraine.
“In 2022, the vast majority, namely 83% of the respondents, forecast growth of their business, 15% of the directors assume it will be possible to sustain their business performance at the level of 2021, and only 2% expect some deterioration in their business situation (14% last year),” the EBA said.
According to the press release, the companies have significantly improved the financial forecasts for next year. Most entrepreneurs, namely 67%, forecast income growth by 10-20% – in hryvnia. This figure returned to the level of 2020 after a significant decline in the past.
Thus, 36% of directors expect revenue growth of up to 10% in volume terms, and almost half (49%) expect a 10-20% growth, the EBA said.
All respondents to this year’s survey note their plans to increase the salaries of their employees in 2022. Most managers, namely 55%, plan to increase salaries by 5-10%. Other 30% will increase salaries by 10-20%. It should be mentioned that last year 15% of the companies were not able to increase staff salaries.
The companies are enthusiastic about the plans to create new jobs. Thus, last year 60% of companies did not plan any changes in their staff, while this year their number is only 36%. The majority, namely 58% of the top managers, plan to expand their staff. And only 6% of the companies will be forced to reduce staff.
One-third of the entrepreneurs, namely 32%, plan to implement new investment projects next year with a budget from $20,000 to $400 million. Moreover, we are pleased to note that almost half of the respondents (49%) plan to invest in social initiatives aimed at supporting Ukrainian society next year.
“Such optimistic forecasts of the directors are certainly very uplifting. Maybe, for the first time since the pandemic broke, we can talk about a significant improvement in the assessments and sentiments of the top managers regarding their own business plans,” EBA Executive Director Anna Derevyanko said.
The CEOs also identified the top three tasks from business to the government for next year. It’s been the second year in a row that the first need mentioned is the need for judicial reform and the rule of law, the second is the fight against corruption, and the third is the need to ensure political stability and effective management in the country. Also, this year, the directors highlighted the importance of further reforming the tax and customs sectors.
Altogether, 95 CEOs of the EBA member companies took part in the Business forecast 2022 study, conducted in September 2021.
The adoption of a bill on public health protection from tobacco exposure alone with earlier rejected and repeatedly submitted proposals for the second reading, such as a ban on the display of tobacco products at sales outlets, would increase counterfeiting, the European Business Association (EBA) has said on its website.
The association said that on July 13, 2021, at the sitting of the Verkhovna Rada Committee, it was unanimously decided to recommend the wording of bill No. 4358 on amendments to certain laws of Ukraine on public health protection from tobacco exposure of November 10, 2020, for adoption at the first and final reading by Verkhovna Rada. The EBA has repeatedly submitted proposals for bill No. 4358 and the comments were partially taken into account.
“According to the information received in the working order, some MPs-initiators of the amendments to bill No. 4358, which had been rejected by the Verkhovna Rada Committee, announced their intention to initiate discussion of such amendments during the voting of bill No. 4358 in the second reading,” the association said.
These include amendments on banning the display of tobacco products at sales outlets, as well as amendments on introducing a standardized pack for cigarettes.
“Business urges MPs to implement the requirements of Directive 2014/40/EU of the European Parliament and of the Council of 3 April 2014 without excessive regulatory burden,” the EBA said.
