Business news from Ukraine

UKRAINE TO REFORM ECOINSPECTORATE

The newly created Ministry of Energy and Environmental Protection sees the reset of the Environmental Inspectorate as its priority, the ministry said on its Facebook page. “One of our priorities is a complete reload of the Environmental Inspectorate’s work. We must establish effective monitoring of emissions and effluents. Regulatory indicators must exist not only on paper, but also be seen in practice. To do this, we will establish the effective work of the Environmental Inspectorate,” the press service quotes Minister Oleksiy Orzhel.
He also emphasized the importance of preserving nature and taking additional measures to reduce an impact on the environment.
“We have information that half of 4.7 billion cubic meters of effluent falls into rivers with excessive levels of pollutants. This situation is unacceptable. We will work to reduce this figure,” said Orzhel.
Another key task, according to the minister, is to establish control over compliance with environmental laws and eco-monitoring.
As reported, Ukrainian resident Volodymyr Zelensky instructed the Cabinet of Ministers to conduct a “full personnel reshuffle” at a number of departments by the end of 2019 as part of the elimination of large-scale corruption schemes in state authorities. This list includes: the State Service of Ukraine for Geodesy, Cartography and Cadastre (DerzhGeoCadastre), the State Service for Geology and Subsoil of Ukraine (DerzhGeoNadra), the State Architectural and Construction Inspectorate, the State Environmental Inspectorate, UkrTransBezbeka and the Ukravtodor Road Agency.

STATE-RUN UKRZALIZNYTSIA PLANS TO REFORM PROCUREMENT SYSTEM

JSC Ukrzaliznytsia (Kyiv) in several weeks will present a strategy for reforming procurement, Ukrzaliznytsia Board Chairman Yevhen Kravtsov has said.
“Everyone asks if a conversation has already taken place with the new head of the Ministry of Infrastructure of Ukraine Vladyslav Krykliy. Yes, and very detailed. I can already say about the priority steps. Ukrzaliznytsia has a green light to make order in procurements,” he wrote on his Facebook page.
According to him, in particular, Ukrzaliznytsia intends to create a public council on increasing transparency and procurement efficiency with the participation of representatives of anti-corruption nongovernmental organizations and the media.
In addition, Kravtsov said that Ukrzaliznytsia begins a comprehensive audit at the branch of the Center for the Provision of Production, where, according to him, the largest amount of procurement is made. In addition, an internal audit of the Service Center is ongoing.
“I am tired of reading media reports about obscure tenders and personally canceling them. Such a volume of procurement cannot be coordinated manually. It is good that we respond to signals from the public, but it is bad that we give them reasons [to make these signals],” he said.

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UKRAINE PLANS TO REFORM SECURITY SERVICE

The new Ukrainian authorities are planning to reform certain elements of the governance system, including the Security Service, Ukrainian National Security and Defense Council Secretary Oleksandr Danyliuk said. “We have a security sector reform on our agenda. Without reforming the Security Service, any other reforms make absolutely no sense, because the Security Service has been historically integrated into multiple processes,” Danyliuk said in a televised interview.
“The Security Service should become a powerful organization, but in one key field; namely, counterintelligence. The Security Service should be deprived of other functions it has, including economic matters and efforts against corruption,” he said.
“Our international partners and the president actively support all of this,” Danyliuk said.
“A lot will have to be changed to make these reforms a reality; in particular, legislative amendments will have to be made,” he said.
“I have set up a group to work on [bills], and we are moving ahead very quickly. I know that we already have a bill, but, for some reason, our partners, such as, for example, NATO, do not approve of it. And our experts don’t support it for some reason, either. Why? Because this legislation would leave the Security Service’s work unchanged. We don’t need such bills. I am convinced that the Security Service and our Ukrainian and Western partners should be engaged in drawing up bills. This is exactly what is happening now,” Danyliuk said.

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JOINING CLEARSTREAM INTERNATIONAL DEPOSITARY BECOMES MAIN REFORM IN UKRAINE’S CAPITAL MARKET OVER FIVE YEARS

The accession of the Ukrainian market to the network of the Clearstream international depositary is a very important step for the infrastructure, ensuring long-term prospects for the capital market in Ukraine, and the National Bank (NBU) intends to further actively develop the market infrastructure, as it considers it to be its area of responsibility, Deputy Governor of the NBU Oleg Churiy has stated.
“[Joining Clearstream] is the most important reform in the capital market over the past five years. It will provide an opportunity to more actively attract funds from non-residents,” he told the Interfax-Ukraine news agency on the sidelines of the Sweden-Ukraine Business Forum held in Kyiv.
Commenting on the opinion that such a simplification of entry/exit of non-residents to the Ukrainian market threatens with the outflow of their funds, Churiy noted that “only one-third of the short-term money of non-residents [are invested in government domestic loan bonds] maturing this year, while two-thirds [are invested in those maturing] next year.”
The banker added that often non-residents invest these funds in new government bonds, therefore this does not mean that they will leave immediately after the bonds are redeemed.
At the same time, Churiy stressed it is necessary to do a lot more for the development of Ukraine’s capital market, and the National Bank intends to actively participate in this process.

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NEXT EUR 20 MLN TRANCHE FROM EU FOR GOVERNANCE REFORM COULD ARRIVE IN APR-MAY 2019

Minister of the Cabinet of Ministers Oleksandr Saenko expects that the next tranche from the European Union (EU) in the amount of EUR 10-20 million for governance reform could arrive in April or May 2019. “We had a very good political dialog with our European partners. They already have an official position regarding readiness to continue supporting this reform. We expect the next tranche in April-May,” he said in an interview with Interfax-Ukraine.
According to Saenko, the amount of the tranche will depend on the criteria, but according to forecasts, next year Ukraine will receive about EUR 10-20 million for this reform.
“Next year, much will change in the remuneration of civil servants. The remuneration of new reform specialists is a prototype of the remuneration model of civil servants, where the fixed part is at least 70%. This model is laid down in the law on public service. For specialists on reform issues, these parameters have already been established. We have limited the bonuses to 30%. This makes it impossible to establish sky-high bonuses,” the minister added.
Saenko said that now there is still a big imbalance in the system itself, when the position salary is minimal, and total wages and salaries increase significantly due to allowances and bonuses. This, according to the minister, creates dependence on the political biased will of the chief with all the attendant consequences.
“The new system will be more transparent and balanced, and we will gradually transfer the financing of the reform at the expense of the main programs of the ministries’ central offices,” Saenko said.

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THIRD INTERNATIONAL UKRAINE REFORM CONFERENCE WILL BE HELD IN CANADA IN 2019

Canadian Foreign Minister Chrystia Freeland has announced the holding of the third international Ukraine Reform Conference in Canada in 2019. Canada is pleased to host the next conference, she noted at the second international Ukraine Reform Conference in Copenhagen (Denmark).
We are passing the baton to Canada, Danish Minister of Foreign Affairs Anders Samuelsen said.

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