Business news from Ukraine

FOREIGN MINISTER OF UKRAINE INVITES ACC, EBA TO ATTRACT INVESTMENTS TOGETHER WITH FM

Foreign Minister of Ukraine Dmytro Kuleba has offered President of the American Chamber of Commerce in Ukraine (ACC) Andy Hunder and Executive Director of the European Business Association (EBA) Anna Derevyanko cooperation to develop trade and attract investment, the press service of the ministry said. “In the United States, Asian countries, and EU countries, the protection of internal business abroad, the development of trade, and the attraction of investments are some of the key functions of the foreign ministries. Now we are creating such an effective system of economic diplomacy in Ukraine. I would like to invite the leading Ukrainian business to unite forces,” Kuleba said during a video conference on Tuesday.
Kuleba also told about the relaunch of the Council of Exporters and Investors under the Ministry of Foreign Affairs. A meeting of the members, 80% of whom were reelected, is scheduled for May 21. Participants will be organized according to industry principles and will develop a joint work plan for the year.
The minister also shared with Hunder and Derevyanko his vision of cooperation between the diplomatic system and business, which will fill the agenda of relations with other countries with real cooperation projects, liberalize trade, expand the geography of exports, and attract investment in Ukraine.
Kuleba believes that successful Ukrainian business is also able to play a key role in establishing an effective system of economic diplomacy. It is, in particular, about professional expert assessment, attracting business to diplomatic education, and conducting special trainings and courses.
Derevyanko and Hunder, in turn, expressed gratitude for the initiative, which, in their opinion, is able to bring cooperation between business and diplomacy to a new level and contribute to the protection of Ukrainian economic interests. For their part, they confirmed their readiness to cooperate under the Council of Exporters and Investors, as well as in the development of an assessment system and diplomatic education.The parties paid special attention to the subject of encouraging foreign companies that transfer production from other regions of the world closer to sales markets, to locating production in Ukraine.

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STATEMENT OF THE AMERICAN CHAMBER OF COMMERCE IN UKRAINE ON LABOR LAW

The American Chamber of Commerce in Ukraine (the Chamber) has been actively involved in the process of discussing changes to the labor law from the outset, providing comments and suggestions, and sharing the views of member companies’ experts. The Chamber Human Capital Committee regularly organizes meetings with representatives from political parties, government agencies, and institutions to discuss changes to the labor law. Also, the Chamber member companies’ experts are involved in activities of the working group of the Parliamentary Committee on Social Policy and Veterans’ Rights.
The Chamber members believe that the current labor legislation should be reformed, as the Labor Code, which is the main legislative act governing labor relations, was adopted in 1971. The Chamber has been actively working on the Draft Law #2708 that was recently withdrawn. It had to be revised, but at the same time, it could liberalize the excessively regulated labor law and make labor relations more flexible. Labor law reform will give businesses much more flexibility to retain current employees and quickly hire new employees.
The most relevant changes that need to be introduced to the legislation identified by the Chamber member companies’ experts include:
Reducing the state pressure and creating opportunities for employers and employees to decide the conditions of employment independently;
Introduction of electronic form of employment contract followed by the cancellation of employment records;
Regulating the types of involvement of third-party employees – outstaffing and outsourcing at the legislative level;
Updating regulations on material liability to meet the present-day demands;
Settlement of labor disputes;
Regulation of employment terms and conditions in the situation of country-wide lockdowns or other forms of restrictions that significantly influence business activity.
The situation with COVID-19 pandemic has also revealed gaps in the existing regulation that need to be addressed urgently to contain the spread of the virus and, at the same time, to keep the business working safely and effectively. The new flexible and distant ways of working shall be recognized and established on a legislative level. We now see that the digitalization of processes is not only a good initiative but a critical need nowadays.
Experts of the Chamber member companies are convinced that the liberalization of the labor legislation will help to create equal rules on the labor market as it will balance the interests of employees and employers. It will also provide incentives for business development, simplify entry-exit from labor relations in combination with effective mechanisms of protection against sudden loss of work, looking for a new job, and reducing unemployment. All these things will contribute to the development of the Ukrainian economy at large, increase investment inflow and business competitiveness.

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AMERICAN CHAMBER OF COMMERCE INTERESTED IN DEVELOPING DIGITAL ECONOMY IN UKRAINE

Representatives of the American Chamber of Commerce (ACC) and adviser to the president of Ukraine Mykhailo Fedorov have discussed the problematic issues of work in Ukraine and the prospects of development of digital economy, according to the official website of the president of Ukraine.
American business representatives focused, in particular, on searches at IT companies, IT industry taxation and access to infrastructure to install the telecommunications equipment of providers, as well as the key interests in the development of mobile and fixed broadband Internet, electronic court and the adoption of priority bills necessary for the IT industry.
The report says that all the above mentioned proposals will be considered by the Office of the President of Ukraine in order to attract innovative American business to the development of the digital sphere in Ukraine.
“We are very interested in attracting the capabilities of members of the American Chamber of Commerce to the development of joint projects in the field of broadband Internet, electronic identification, and so on,” Fedorov said.
ACC representatives expressed interest in the development of digital economy in Ukraine.
Fedorov presented a digital action plan during the meeting.
“The development of digital economy should be priority number one for Ukraine. We must implement the digital transformation of the existing sectors of the economy and create favorable conditions for the emergence of new ones. Otherwise, we risk lagging behind the leading economies of the world forever. Together with the core business and the public, we have defined clear objectives and goals until 2024,” he said.

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AMERICAN CHAMBER OF COMMERCE IN UKRAINE CONCERNED ABOUT INTRODUCTION OF THE PSA MECHANISM

The American Chamber of Commerce in Ukraine is concerned about the introduction of the PSA (product sharing agreements) mechanism in addition to the license/royalty regime which continues to run in parallel.
The Chamber said that the criteria discriminating PSA and other blocks are unclear. The current PSA process is seriously flawed.
“PSAs are not used in any EU country, and their use in Ukraine only underlines the urgent need for reforms in the existing oil and gas fiscal and regulatory regime,” the Chamber said, adding that a single, fair, stable and non-discriminatory environment for oil and gas is one of the key factors in attracting major international investment.
The American Chamber of Commerce in Ukraine looks forward to working with the government and members of the international community to offer ways to address shortcomings in the current PSA process and to create an environment that sparks a resurgence of interest in the sector and allows Ukraine to achieve its objectives including self-sufficiency in gas.

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