Business news from Ukraine

INTELLECTUAL PROPERTY DEPARTMENT TO BE CREATED IN ECONOMY MINISTRY – DEPUTY MINISTER

Soon a separate department which will regulate and protect intellectual property will be created in the Ministry of Economic Development, Trade and Agriculture, Deputy Minister Dmytro Romanovych has said.
During a speech at the Media Law conference on Tuesday, he said that the issue of protecting intellectual property is one of eight priorities that the minister identified as promising.
“This is one of our priorities. We have eight of them. You also know that in fact we are now representing two and a half ministries. Therefore, there are a lot of priorities, as well as the areas for which the Economy Ministry is responsible. Being among our eight priorities is a sign that that the field of intellectual property is a very important industry,” Romanovych said.

UKRAINIAN GOVERNMENT AMENDS ACTION PLAN ON IMPLEMENTATION OF ASSOCIATION AGREEMENT WITH EU

The Cabinet of Ministers of Ukraine has amended the Action Plan on Implementation of the Association Agreement between Ukraine and the EU, the press service of the Ukrainian government reported. “The Cabinet of Ministers of Ukraine adopted a resolution amending the Action Plan on Implementation of the Association Agreement between Ukraine and the EU. The updated plan takes into account the deepening of the Ukraine-EU bilateral relations and a series of decisions adopted by the bilateral bodies of the Association Agreement in recent years,” reads the statement.
The amended document actualizes, aligns and streamlines the objectives with the dynamically evolving EU legislation. The updated tasks are related to customs and financial policy; taxation, entrepreneurship, financial services and competition; justice, social and humanitarian issues; transport; energy economy and energy efficiency; digital sphere, science, technology and innovation; nature management and others.
It is expected that the government’s decision will accelerate Ukraine’s advancement towards the EU and make this process more transparent.

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UKRAINIAN SOLAR ENERGY ASSOCIATION NOT IN FAVOR OF IDEA TO RESTRUCTURE FEED-IN TARIFFS

Restructuring of the feed-in tariff for electricity generated by solar power plants is inappropriate for the sector, Executive Director of the Solar Energy Association of Ukraine Artem Semenyshyn said at a press conference at Interfax-Ukraine in Kyiv on Tuesday. “If from January 1 [2020] for the new solar energy projects, the feed-in tariff is reduced, according to the law, by 25%, then the proposal to further reduce it by another 25% (thus, by 50%) crosses the line of economic feasibility,” he said.
At the same time, Semenyshyn said that such changes would cause investor concern and adversely affect the country’s investment climate. In addition, market players do not currently have a clear understanding of government plans for regulating the industry, which does not allow Ukrainian or foreign companies to plan business projects.
In turn, KNESS Group Business Development Director Yevhen Didichenko said that the restructuring of the feed-in tariff, which is being discussed, as a measure to stabilize the market situation, will not produce the desired effect.
“If 50% of all plants go to reduce the tariff by 20%, this will add UAH 3 billion to the Guaranteed Buyer’s balance, while at present we have a misbalance [the Guaranteed Buyer’s shortage] of UAH 16 billion, and the industry operates UAH 300 billion. That is, it is such a miniscule figure and such dire consequences that it is not worth it,” he said.
Didichenko also focused on the fact that the current model of the electric energy market does not comply with the principles defined by law.
“The problem should not be solved by patching holes. We need to look more broadly. The only right solution is to establish a free market,” he said and recalled that in particular, it is about lifting price restrictions, entering the market by National Nuclear Generating Company Energoatom and PJSC Ukrhydroenergo.
“Preliminary calculations show that when entering the market, Energoatom will receive an additional UAH 80 billion a year. Ukrhydroenergo will receive an additional UAH 10 billion. The state could use these resources to subsidize the population and renewable energy (under the existing model for plants that have already been built.) The state would also have a resource to enhance the competitiveness of state-owned thermal power plants,” Didichenko said.
Semenyshyn said that the association prepared a draft memorandum of understanding with the government. It will identify mechanisms acceptable for Ukrainian business to further stimulate the development of solar energy.

OFFICE ABSORPTION IN KIEV GROWS BY 70% – COLLIERS

The total absorption in the high-quality office real estate market in Kyiv in July-September 2019 increased by more than 70% compared to the same period in 2018 and amounted to near 46,000 square meters, according to a press release of Colliers International (Ukraine), the international consulting company.
“In general, during the first nine months of 2019, the volume of transactions amounted to about 131,000 square meters, which already exceeds the results of entire 2018. According to the results of the third quarter, IT industry companies (48%) had the main share of the total absorption, as well as companies from industry and energy (33%),” Colliers said.
According to the company, new offer in the third quarter amounted to 10,000 square meters, or some 15% of the declared for commissioning in the second half of 2019.
According to Colliers, developers announced five facilities with a total area of about 57,000 square meters for going live by the end of 2019.
“A significant part of the office space under construction already has signed preliminary lease agreements. This trend is one of the indicators of increased demand and the formation of the landlord market. Given the shortage of high-quality office space, the vacant space of facilities with a good location and concept is quickly absorbed by the market,” Colliers said.
According to company analysts, rental rates in Kyiv offices in the third quarter remained at the level of the previous quarter. In particular, the range of base rental rates in Class A business centers amounted to $22-30 per square meter, in the class B centers it is $14-21, and in the class C centers it is $9-13.
Modest growth is projected during the first half of 2020.

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KIEV-BASED STATE BANK UKREXIMBANK ANNOUNCES COMPETITION FOR POSITION OF BOARD CHAIRMAN

The supervisory board of Kyiv-based state bank Ukreximbank has announced a competition to select a candidate for the position of board chairman and hired international recruitment company Odgers Berndtson, the Finance Ministry of Ukraine reported on its website.
According to the statement, the supervisory board approved this decision on November 15. Applications from candidates will be accepted from November 18 until December 2, 2019. On December 3, the bank’s nomination and remuneration committee in cooperation with Odgers Berndtson will form a list of not more than 10 candidates admitted to the next stage of the competition. On December 4-6, interview with the candidates will be held after which three candidates will be admitted to the final stage of the competition.
On December 6, the final stage of the competition will be held.
A candidate for the position must have at least five years of experience in the financial sector in total, including at least three years on senior managerial positions as well as have impeccable business reputation.
As reported, on November 16, 2019, the Security Service of Ukraine acting in charge of the Prosecutor General’s Office of Ukraine (PGO) detained Board Chairman of Ukreximbank Oleksandr Hrytsenko in the framework of a criminal proceeding on the grounds of committing crimes under Part 1 of Article 255 (creation of a criminal organization), Part 5 of Article 191 (misappropriation, embezzlement of property or possession by abuse of office), Part 3 of Article 209 (legalization (laundering) of proceeds of crime).
Pechersky District Court of Kyiv chose a measure of restraint to Hrytsenko in the form of a UAH 3 million bail without keeping in custody.
According to the PGO, Hrytsenko is under investigation into case No. 12013220540000400 dated January 31, 2013, for being a part of a criminal organization, created by former President of Ukraine Viktor Yanukovych and his companions in February 2010, and is charged with assistance in lifting seizures from deposits and collateral for a $160 million loan for the purchase of the Ukrainian Media Holding.
Hrytsenko was appointed as Board Chairman of Ukreximbank in August 2014.
Ukreximbank, the sole owner of which is the state, was created in 1992. According to the National Bank of Ukraine, as of October 1, 2019, in terms of total assets (UAH 205.439 billion), the bank was third among 76 banks operating in the country.

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SON OF FORMER U.S. VICE PRESIDENT BIDEN RECEIVES $16.5 MLN IN PAYMENTS STOLEN FROM UKRAINE – UKRAINIAN MP

Some $16.5 million received by Hunter Biden, the son of former U.S. Vice President Joe Biden, as payment from Burisma was stolen from Ukrainian citizens, member of parliament Andriy Derkach has said. Derkach said at a press conference at the Kyiv-based Interfax-Ukraine news agency that on November 14 the Prosecutor General’s Office (PGO) announced a new suspicion to the owner of Burisma, former Ecology Minister Mykola Zlochevsky.
“The PGO document once again confirms the data I had previously published on Burisma and international corruption. According to Zlochevsky’s suspicion notice, Biden and partners received their $16.5 million for their services to Burisma. Biden received funds not due to the successful activity of Burisma or for brilliant business decisions or recommendations. This is the money of Ukrainian citizens. The funds were obtained by criminal means. That’s what they say in the PGO,” Derkach said.
Derkach said the new suspicion notice to Zlochevsky was received by him from investigative journalists.
“According to the investigation, Zlochevsky was directly involved in the withdrawal of funds by the Yanukovych “family” (the Yanukovych criminal organization, according to the notice). They laundered the funds of Yanukovych through three companies in Latvia,” Derkach said.
As reported, on October 9 Derkach made public official correspondence between the National Anti-corruption Bureau of Ukraine (NABU) and the U.S. Embassy, according to which First Deputy NABU Director Gizo Uglava through his assistant Polina Chizh provided the U.S. Embassy with information that affected the course of events in Ukraine and the United States.
According to him, Chizh received an order from U.S. Embassy employee Hanna Yemelyanova to provide information on the case of Ex-Ecology Minister and Burisma Group owner Mykola Zlochevsky.
Zlochevsky revealed the amount of money that was transferred to the representatives of Burisma Group, including Hunter Biden. According to the documents, about $16.5 million was transferred in favor of Hunter Biden, Aleksander Kwasniewski, Alan Apter, and Devon Archer.
According to Derkach, Ex-Prosecutor General Viktor Shokin repeatedly contacted NABU Director Artem Sytnyk in the framework of criminal proceedings involving Burisma, but constantly received formal replies. The activities of Shokin, according to Derkach, irritated Joe Biden during his fifth visit to Kyiv in two years on December 7-8, 2015. The visit was devoted to the issue of removing Shokin as Prosecutor General and the affairs of Zlochevsky and Burisma.
“The instrument issued for pressure was the $1 billion credit guarantee that the United States should have provided to Ukraine: Biden himself acknowledged the pressure in his speech to the U.S. Foreign Relations Council in January 2018,” Derkach said.
On November 11, Derkach said on his video blog that Head of the Specialized Anti-corruption Prosecutor’s Office (SAPO) Nazar Kholodnytsky launched an investigation into his allegations that the NABU had provided information to the U.S. Embassy in Ukraine. He also noted that from May 2014 until October 2015, Burisma transferred $4.817 million to Rosemont, and the latter transferred $871,000 to Hunter Biden.