Business news from Ukraine

UKRAINE-EU ASSOCIATION AGREEMENT MUST TAKE EFFECT IN FULL FROM JAN 1, 2016 – JUNCKER

KYIV. April 27 (Interfax) – The Association Agreement between Ukraine and the European Union is to enter force in full from January 1, 2016, said European Commission President Jean-Claude Juncker.

Juncker said at a joint press conference with Ukrainian President Petro Poroshenko and European Council President Donald Tusk in Kyiv on Monday that the European Commission and the European Council want to confirm jointly that the Association Agreement must enter force in full on January 1, 2016.

Juncker also said that there have been many postponements and one can put off things indefinitely. However, this agreement should take effect from January 1, 2016, he said.

17TH EU-UKRAINE SUMMIT: JOINT STATEMENT

KYIV. April 27 (Interfax-Ukraine) – Application of the Deep and Comprehensive Free Trade Area (DCFTA) between the EU and Ukraine should start on January 1, 2016, reads a joint statement of the 17th EU-Ukraine Summit in Kyiv on Monday.

“The leaders look forward to the provisional application of the Deep and Comprehensive Free Trade Area (DCFTA) between the EU and Ukraine starting on 1 January 2016 and the positive impact its implementation will bring about. They also noted the importance of continuing the trilateral consultations on EU-Ukraine DCFTA implementation in a constructive manner, using the existing flexibilities available to the contracting parties in the DCFTA,” says the statement posted on the Ukrainian presidential website.

Meanwhile, the summit participants noted that steering up of the reforms would be resolute from the point of view of political association and Ukraine’s economic integration to the EU.

“It was the first Summit in the framework of the EU-Ukraine Association Agreement, implementation of which will represent a fundamental step in the process of deepening the political association and economic integration of Ukraine with the EU on the basis of respect for common values and their effective promotion,” reads the document.

The leaders welcomed Ukraine’s strong commitment to an ambitious reform process.

They welcomed the first reform steps taken by Ukraine in key areas, notably constitutional reform, decentralization, the fight against corruption, the reform of the justice sector, the restructuring of the energy sector and the improvement of the business climate.

They underlined that implementation of these reforms will be key and should rapidly achieve further concrete results.

The leaders agreed on the need to further accelerate the reform process on key systemic issues such as: the finalization of an inclusive constitutional reform, as well as the reform of the legislative framework in due time before local elections, the fight against and the prevention of corruption, the restructuring of the energy sector, and the reform of the civilian security sector.

Besides, in the document the EU along with the Ukrainian leaders condemned the clear violation of Ukrainian sovereignty and territorial integrity by acts of aggression by the Russian armed forces since March 2014.

“The leaders underlined their strong support for the efforts aimed at de-escalation and a political solution based on respect for Ukraine’s independence, sovereignty and territorial integrity, in particular in the framework of the Normandy format. They expressed their full support for the Minsk Agreements including the Package of Measures of 12 February 2015, endorsed by UNSC Resolution 2202 of February 17, 2015,”says the document.

In addition, the participants of the summit called on all parties to swiftly and fully implement the Minsk Agreements and honour their commitments and underlined the Russian authorities’ responsibility in this regard.

“The leaders welcomed the progress in the trilateral talks between the EU, Ukraine and the Russian Federation on the delivery of gas from Russia to Ukraine with the goal to increase the security of gas supply for Ukraine and its citizens as well as ensuring stable, sufficient and uninterrupted transit of gas to the EU,” says the EU-Ukraine joint statement.

Moreover, the leaders reconfirmed their commitment to achieve the shared objective of visa-free travel provided that conditions for well-managed and secure mobility set out in the Visa Liberalization Action Plan are in place.

“They welcomed the progress made by Ukraine underlining the necessity for a full and effective implementation of all benchmarks and emphasizing in this regard the importance of the upcoming release of the next progress report on the Visa Liberalization Action Plan ahead of the Riga Summit,” the participants said.

ULIE OFFICE IN BRUSSELS TO FOCUS ON DEEPENING BUSINESS CONTACTS

The Ukrainian businesses’ representative office which opened in Brussels on April 21 has joined the process of searching for business partners, investors, and markets for domestic entrepreneurs. This is extremely important as it is being carried out before the establishment of a free trade area between Ukraine and the European Union (EU), which will become effective as of January 1, 2016. The creation of the Deep and Comprehensive Free Trade Area (DCFTA) with the EU is the peak of the Ukrainian economy’s approach to Europe. The implementation of this procedure will in many aspects influence further economic development and, possibly, even the country’s future.

“Ukraine should fulfill its ‘home task’ with more responsibility to streamline its economy with the conditions of the Association Agreement with the EU, and increase the influence of civil society on the quality and dynamics of structural reforms in the country. We will suggest focusing on the development of the industrial sphere as well as small- and medium-sized businesses, which are the backbone of the economy, create jobs, and generate tax revenues for the national budget. It’s of paramount importance under the conditions of economic crisis and before the changes Ukrainian enterprises will face following the full inauguration of the DCFTA between Ukraine and the EU next year,” ULIE President Anatoliy Kinakh said.

Today, Ukraine has to speed up the adaptation of its legislation to free trade conditions with the EU. Some tasks have been realized in this direction – three bills (on standardization, metrology, and technical regulations) were adopted to overcome technical barriers, and two more (on food safety and animal identification) were passed to eliminate biosecurity obstacles. However, Ukraine should speed up the introduction of EU technical and sanitary standards, mutual recognition of certificates of conformity for products, and the harmonization of tax legislation with EU norms and regulations. Also, Ukraine continues to have very complicated and long standardization and certification procedures.

Complicated preparations of the economy for DCFTA conditions and European integration in general require clearly organized infrastructure and good management. However, Ukraine is still without a deputy prime minister for European integration to whom a relevant government office should be subordinated.

The ULIE Office is developing cooperation with all of the EU institutions – the European Parliament (EP), the European Commission (EC), the External Action Service, etc. – in order to intensify the European integration process. Its relations with BUSINESSEUROPE – the leading EU organization of entrepreneurs and employers including more than 40 national entrepreneurs’ associations of the Old World, are also very important.

The ULIE Office is planning to include the Ukrainian side in talks on the possible revision of the EU Neighborhood Policy concerning Ukraine, especially its businesses. Eastern Partnership programs for business development, crediting, and training of representatives of the real sector of economy have made a noticeable contribution to the reconstruction of the economies of new EU members, namely Poland, Lithuania and Latvia. They received and continue to obtain funds for the structural modernization of enterprises and increased economic competitiveness. Similar programs for Ukraine exist, which envisage the allocation of around EUR 11 billion until 2020, three quarters of which are loans and the rest are grants. However, merely 3% (between EUR 250 million and EUR 350 million) of these funds are designed for supporting small- and medium-sized businesses, and it is still difficult to receive these funds.

“European support is almost unavailable for Ukrainian businesses, first of all, because of unrealistic conditions of crediting. We will raise this issue when communicating with our European colleagues in order to change the situation, streamline cooperation mechanisms with nowadays reality, and bring specific results,” Kinakh said.

The ULIE Office in Brussels will carry out a very important information function – giving Ukrainian businesses an opportunity to learn about various EU institutions’ programs, select the ones that could give our entrepreneurs modernization prospects in line with the DCFTA requirements.

Many EP members, EC representatives, diplomats, businessmen and public activists, including the ULIE management, and clergy attended the Office’s ribbon-cutting ceremony.

The Interfax-Ukraine News Agency is the media partner of the ULIE Office opening in Brussels. It has set up a specific information product – Ukraine Open for Business – containing Ukrainian business news for Europeans, which will help European partners better understand Ukrainian economic trends and prospects.

UKRAVTODOR STARTS LOOKING FOR INVESTOR TO BUILD FIRST CONCESSION ROAD IN UKRAINE

KYIV. April 24 (Interfax-Ukraine) – The State Agency for Automobile Roads of Ukraine (Ukravtodor) has started assessing the level of interest of potential investors in participating in the realization of the first concession project in Ukraine – construction, further exploitation and maintenance of the new Lviv-Kamianets road.

The press service of the agency said that starting this week and until May 15 inclusively all interested companies, residents or nonresidents of Ukraine, that want to be an investor in the project and are in line with bidder requirements can send letters of intent to the international cooperation department of Ukravtodor.

The letters do not foresees any liabilities for companies and are written in any form, and companies can add information or presentation materials on the projects realized by them.

The concession tender is due to start in May 2015. If the tender is a success and the winner is selected, the winner is to settle the financial close of the project in 2016.

INFRASTRUCTURE MINISTRY DRAWS UP SEVERAL PORT INFRASTRUCTURE DEVELOPMENT PROJECTS

KYIV. April 24 (Interfax-Ukraine) – The Infrastructure Ministry of Ukraine has drawn up proposals on developing infrastructure at Ukrainian ports.

The press service of the ministry reported that among the proposals are promising projects on r existing and construction of new facilities and the development of port-side areas at Illichivsk, Izmail, Mariupol, Kherson, Odesa, Berdiansk, Bilhorod-Dnistrovsky, Mykolaiv ports and other seaports. The projects foresee public private partnership.

“We want to attract investors to develop the port infrastructure of the country. We’re working on the creation of effective conditions for the realization of investment projects. The seaports of Ukraine have a powerful competitive potential among Black Sea region countries and we could even increase it, improving infrastructure. We met several potential investors, visited ports and showed existing abilities,” reads the report, citing Deputy Minister Yuriy Vaskov.

The ministry said that the project to develop infrastructure at Odesa seaport foresees the building of a yacht complex along Androsivsky pier. Investment totals around UAH 152 million.

The project foresees the reconstruction of the handling complex near berth seven and berth eight. The annual complex’s capacity is 1.5 million tonnes. Investment totals some UAH 200 million.

It is planned to reconstruct a handling complex near berth 10 and berth 12 with the possible construction of a grain handling complex with an annual capacity of 2.5 million tonnes. The investment amounts to near UAH 282.5 million.

The project foresees the reconstruction of a handling complex on the base of berth 14 for general cargo with an annual capacity of up to 1-1.5 million tonnes. Investment totals around UAH 300 million.

The Ukraine shipyard will be also optimized and developed. Investment amounts to some UAH 1.2 billion.

The project will be financed using investors’ funds.

BYFREDERIC TO INVEST UP TO EUR 20 MLN IN BUILDING PORT TERMINAL IN CHERKASY REGION

KYIV. April 24 (Interfax-Ukraine) – ByFrederic Group, whose core business is seed planting, agricultural machinery sales and servicing, plans to build a port terminal on the Kremenchuk water reservoir in Cherkasy region to ship agricultural cargo.

According to a post on the website of Cherkasy District Administration, a memorandum on the realization of the investment project worth up to EUR 20 million was signed by the district administration and Semtek LLC, part of ByFrederic Group.

“Now, technical documents are being prepared. It would take two or three years to build the port,” the marketing department director at ByFrederic Serhiy Silin told Interfax-Ukraine.

He said that the project foresees the construction of a terminal. An elevator with a storage capacity of 60,000 tonnes of agricultural products will be built at the port, and a railway line passes through the site. Also, the company will lease river transportation to ship cargo.

ByFrederic is an international agricultural enterprise specialized in seeds sales (maize, sunflower, rape, soybeans, etc.) as well as sales and services of agricultural equipment. Currently, the group of companies consists of seven representative offices: two of them are in Ukraine (Shpola, Cherkasy region and Kyiv), five of them are in Russia (Moscow, Saratov, Rostov, Krasnodar and Pavlovskaya), and the group also works in Belarus, Georgia and Kazakhstan.

The founder of the group is French citizen Frederic Chavigny.