Ukraine Game
Is it time for investors, entrepreneurs and foreign residents to leave Ukraine? Just at the point in history where Ukraine was starting to open up and grow beyond the limited expectations of those that do not wish to see her strong and independent, along comes another idiotic decree from the government in Kyiv.
Do the “powers that be” in Ukraine believe that making it more difficult and expensive for people to work, live and do business in Ukraine is in the best interest of this nation? Is Ukraine still Soviet?
Ukraine limits labour market for foreigners
The Ukrainian government has introduced severe limitations on the accessibility to the country’s labour market for foreigners – especially as concerns foreign managers, Polskie Radio reported.
“This is a huge slap in the face for Polish investments. Without Polish managers, controlling investments in the country will become practically impossible,” stated Marian Przezdziecki, Deputy Head of the International Society of Polish Companies in the Ukraine (MSPPU).
The legislative changes, going into effect in May, are meant to increase the number of spaces on the labour market for Ukrainians, claims Ludmil Denisova, the Minister of Labour and Social Policy of Ukraine.
According to the decision made by Prime Minister Yulia Tymoszenko’s government, on May 1, the number of required documents for obtaining a work permit in Ukraine will be greatly increased. Not only will an employer need to prove the necessity of hiring a foreigner, but the employee will have to provide notarized copies of educational and professional documents as well as sworn statements proving that one holds no debts or a criminal record.
The Ukrainian daily Kommiersant-Ukraina highlights the fact that the most important changes in the regulations affect managers and directors claiming that current regulations allow foreigners to have work permits for as long as the contract requires. The changes will limit work permits to a three year period for managerial positions and one year for lower-level positions.
Violating the new regulations will incur heavy fines – current law dictates a fine of about 100 USD, but new regulations increase the number to 1500 USD.
Polish Labour Minister Denisova added that, according to new regulations, foreign workers found to violate the laws will be deported from the country at the cost of their employer.
“Whoever thought up this law does not know exactly what they are doing. No foreign company working in the Ukraine will hire anyone to high-level positions that does not have the proper experience or high-tech knowledge necessary in, for example, our firm. And finding such people [in the Ukraine] is a problem,” stated Zyslaw Krowiak, financial director of Cersanit, the Polish manufacturer of sanitary facilities that recently opened a factory in the country.
There are currently about 400 Polish companies located in the Ukraine with about 700 million USD invested in the country at the end of 2008.
From Polskie Radio
Tags: Cersanit, Denisova, entrepreneurs, Kommiersant, Krowiak, Kyiv, MSPPU, polish investors, Przezdziecki, ukraine, visa
May 13th, 2009 at 12:38 am
Moody’s Investors Service has downgraded the global foreign currency (GFC) deposit ratings of 19 Ukrainian banks to B3 from B2 and the foreign currency debt ratings of five Ukrainian banks to B1 from Ba3. It also downgraded the local currency debt ratings of two Ukrainian banks. The outlook is negative on the long-term GFC deposit ratings and the long-term foreign currency debt ratings affected by this rating action.
Moody’s rating action was triggered by the downgrade of Ukraine’s foreign currency bank deposit ceiling to B3 with negative outlook from B2, the downgrade of Ukraine’s foreign currency bond ceiling to B1 with negative outlook from Ba3 and the downgrade of Ukraine’s local currency bond ceiling to Ba1 from A3.
The decision reflects the rating agency’s concerns about the deterioration of the macroeconomic environment and the banking system, persistent political uncertainty and tighter capital control regulations in Ukraine.
The long-term GFC deposit ratings of the following banks were downgraded to B3 (from B2) with a negative outlook:
- Calyon Bank Ukraine
- Dongorbank
- First Ukrainian International Bank
- Forum Bank
- ING Bank Ukraine
- Khreschatyk Bank
- OTP Bank Ukraine
- Pivdennyi Bank
- Pravex-Bank
- Privatbank Commercial Bank
- Raiffeisen Bank Aval
- Savings Bank of Ukraine
- Subsidiary Bank Sberbank of Russia
- Swedbank Invest
- Swedbank OJSC
- Ukreximbank
- Ukrsibbank
- Ukrsotsbank
- VAB Bank
The long-term foreign currency debt ratings of the following banks were downgraded to B1 (from Ba3) with a negative outlook:
- Forum Bank
- Privatbank Commercial Bank
- Ukreximbank
- Ukrsibbank
- Ukrsotsbank
At the same time, Raiffeisen Bank Aval’s local currency debt rating was downgraded to Ba1 from Baa3, while its national scale rating was downgraded to Aa1.ua from Aaa.ua.
Ukrsotsbank’s local currency debt rating was downgraded to Ba1 from Baa3.
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May 21st, 2009 at 12:41 am
LEGAL ALERT:
New Rules on Limits on Terms of Stay of Foreigners in Ukraine
On 6 May 2009, the Cabinet of Ministers of Ukraine amended the “Rules for Entry of Foreigners and Apatrides into Ukraine, Their Transit Through and Exit From Ukraine”, which were approved by Resolution of the Cabinet of Ministers No. 1074, dated 29 December 1995 (the “Rules”). Those amendments (the “Amendments”) became effective as of 15 May 2009.
1. Not More than 90 Days Stay within 180 Days
According to the new wording of Article 19 of the Rules, except for holders of certain limited types of visas (e.g., student visas, work visas), foreigners may stay in Ukraine only as follows: (1) a foreigner from a country, the citizens of which need a visa, may stay for the term of the validity of his/her visa, but for not more than for 90 days within 180 days counting from the date of the first entry; and (2) a foreigner from a country, the citizens of which do not need a visa, may stay for up to 90 days within 180 days counting from the date of his/her first entry, unless otherwise stipulated by a bilateral agreement to which Ukraine is a party. This limitation applies even if the visa (i.e., a business visa, a private visa, etc.), which has been issued to the foreigner, is valid for 6-months, 1-year, or longer.
This limit also applies to citizens, i.e., both tourists, private and business visitors, etc., of the EU, Japan, the USA, and all other countries, for which the requirement for a visa has been waived (since 2005) for visits of less than 90 days. Therefore, it will not be possible any longer to enter Ukraine for 89 days, to exit for a brief period, and, in a couple of days, to re-enter for the next 89 days.
If a foreigner needs to spend more than 90 days within the above-mentioned 180 days period, then an application for an extension must be filed within the appropriate division of the Ukrainian Ministry of Interior at least 3 business days before the expiration of the 90 days. If such extension is granted, it will be valid only for a continuous stay in the country (i.e., until the expiration of the term of the individual’s visa or of another allowed period, as the case may be), but not for re-entry into Ukraine. If the extension is not granted, then the foreigner must leave the country before the 90-days period comes to an end.
2. Alert to Citizens of WTO Member Countries
The Amendments have abolished the third item in Article 19 of the Rules, which previously allowed citizens of WTO member countries to spend up to 180 days within a year in Ukraine. According to oral information from a responsible officer of the State Borderguards Service, those foreigners from WTO member countries, who have already spent more than 90 days in Ukraine starting from 1 January 2009 (in reliance on the now-abolished third item of Article 19 of the Rules), will not be exempted from the abovementioned limitations, and the records indicating the duration of their stays in Ukraine will not be reset.
3. Alert to Foreign Employees of Representative Offices
Foreigners, who are employees of Ukrainian legal entities, are eligible to obtain Ukrainian work permits, work visas, and temporary residence permits. The combination of these three documents will allow them to enter/exit Ukraine as many times and at such times as may be necessary within the term of validity of their work permits. In contrast, foreigners, who are employed by Ukrainian representative offices of foreign companies, are not eligible for a Ukrainian work permit, in the oral opinion expressed by a responsible officer of the Kyiv City Employment Center (which opinion is not necessarily grounded on any specific Ukrainian legislation and, as such, is subject to challenge before the Ukrainian courts).
As a result, a foreigner employed by a representative office will not be able to obtain a work visa and a temporary residency permit, for which a work permit is a prerequisite, at least not unless and until a Ukrainian court will rule that such foreigner is eligible for a Ukrainian work permit. As a result, such foreign employees of representative offices will not be exempted from the abovementioned restriction on the number of days that they can spend in Ukraine, but rather will be allowed only to stay 90 days within 180 days.
4. Consequences of Spending More Than 90 Days in Ukraine
As we have noted in our earlier Legal Alerts, the State Borderguard Service has launched a computerized system for recording each foreigner’s entries into and exits from Ukraine. This system automatically marks the commencement of the 180 day period upon a foreigner’s entry into Ukraine and calculates the number of days spent by the foreigner in Ukraine. Both the date of entry and the date of exit count towards the number of days spent in Ukraine. If a foreigner spends more than 90 days within 180 days (without obtaining an extension of stay mentioned above), then such foreigner may be subject to a fine of between UAH340 and UAH680 and, in addition, may be banned from entering Ukraine for a period of between 6 months and 5 years.
If a foreigner exhausts the 90 days within a 180 day limit of stay, such foreigner will not be permitted to re-enter the country until the 180 day limit expires. Thus, all foreigners, who do not have temporary residence permits (or permanent residence permits), should very carefully calculate the number of days which they spend in Ukraine and plan their visit(s) and the duration of their stay(s) in the country accordingly.
May 21st, 2009 at 2:18 am
EUROPEAN UNION policy toward its neighbours to the east is in trouble, despite the launch of its new Eastern Partnership. European public opinion is increasingly introspective and sporadically protectionist.
So what is to be done about the “grey zone” to Europe’s east – the six countries that now lie between the EU and Russia? Inaction is unacceptable. The region has been badly hit by the economic crisis, made all the worse by internal political turmoil and serious security dangers.
The idea for the “Eastern Partnership” (EaP) came from a Polish-Swedish initiative early last summer. So, by EU standards, it has been rushed through on a very fast track. The new initiative is exclusively for the region to the Union’s east – Ukraine, Moldova, Belarus, Georgia, Armenia, and Azerbaijan – and is designed to complement the European Neighbourhood Policy.
It has few new resources and a limited budget for technical projects (Ђ600 million over four years for the six countries). The idea is that the EaP will provide a positive signal to these countries, change the climate in which the region is discussed in the EU, and slowly help pull it into the EU’s orbit.
The offer has annoyed Russia. But the EU has its own problems with the initiative. For example, it had a lot of trouble persuading leaders to turn up in Prague last Thursday. And those who agreed to come are not a good advertisement for the region.
Ukraine’s President Viktor Yushchenko’s popularity ratings are below five per cent after steering his country from crisis to crisis since the “Orange Revolution” in 2004. Georgia’s Mikheil Saakashvili is dealing with domestic protests after his disastrous military misadventure in August 2008. Armenia also faces protests, following the controversial election of Serzh Sarksyan in February 2008, which led to the killing of ten people. In March 2009 Azerbaijani President Ilham Aliyev staged a constitutional referendum that opened the way for his lifetime presidency. Most controversial of all has been “Europe’s last dictator,” Belarusian President Alyaksandr Lukashenka. Previously, Belarus was not even in the European Neighbourhood Policy.
Five years after the EU’s “big bang” expansion took in eight former communist countries to its east, the Union is in danger of losing the hearts and minds of its eastern neighbours because of its complacency and long-winded approach to crises.
The eastern neighbours are not like the central European states that negotiated EU accession in the 1990s. Their statehood is weak, their leadership often weaker, and they lack the consensus about their European destiny that enabled difficult reforms in Poland, Slovakia, and the Baltic States to be pursued.
By an accident of bureaucratic timing, the EaP is seen by many in the east as merely the EU’s response to the global economic crisis, not as a strategy tailored for the region. Indeed, Moldova’s President Vladimir Voronin dismisses it as “candies.”
To be sure, the EU’s technocratic focus on structural reforms is having some effect in the region. All six states, except Belarus, now trade more with the EU than with Russia. But the political relevance of these changing economic realities is close to nil. If anything, the region has been moving in the wrong direction, with security tensions and even war (in Georgia last summer) increasingly frequent. Fake elections are rapidly become the norm. The six states do not have the time or the inclination to swallow the EU’s bureaucracy in one gulp.
Russia has managed to revamp the way it operates in the region since it got its fingers burned by interfering so crudely in Ukraine in 2004. It now uses a broad range of hard and soft power, some incommensurate to that of the EU – for instance, the military bases that it has managed to secure in each of the six states.
Moreover, it does things that the EU does and does them better, a notable example (until recently) being its more open labour market. Russia is also using less coercion and more carrots, offering economic assistance, security guarantees and an ideology of “sovereign democracy” that appeals to many post-soviet elites.
The Eastern Partnership is a typical long-term EU technocratic instrument. The EU pledges to help set up “Western-type public institutions” and to transform the Eastern economies through comprehensive free-trade agreements.
That’s all good, but the EU needs to be quicker. It needs to show that its mission is to build up weak states, help them overcome short-term crises, and nurture democracy, rather than treat them as empty vessels for the export of EU policy. As a follow-up to the Eastern Partnership summit, the EU must initiate lower-level meetings of interior ministers to discuss migration, visas, and counter-terrorism, and should seek to integrate Ukraine and Moldova into the European energy market.
The alternative is a wall of instability in what is, after all, Europe’s neighbourhood. As with the United States and Mexico, the consequences of growing gaps in living standards, good governance, and the rule of law will inevitably flow across borders. The EU’s eastern policy should not be seen as philanthropy, but as a strategy promoting clear-cut pan-European interests.
June 4th, 2009 at 1:41 am
Ukraine seeking for European Union no-visa travel criteria
Today, 10:25 | Ukrainian News Print E-mail to a friend E-mail to an editorial Ukraine is asking the European Union to coordinate an action plan with the list of criteria whose implementation would make it possible to abolish the visa regime between Ukraine and EU member-countries, the press service of the Ukrainian justice ministry says.
Ukrainian Justice Minister Mykola Onyschuk made the call during the meeting of justice and interior ministers in the Ukraine - EU Troika format.
“Ukraine welcomes certain positive results of practical implementation of the agreement on liberalization of visa requirements during the past year. Unfortunately, all problems emerging in its observance by EU member-countries have not so far been settled over that period,” he said.
On top the minister pointed to the absence of EU’s standard requirements, particularly, concerning the visa issue procedure.
In his opinion, this does not allow Ukrainian citizens to use in a full measure the advantages provided by the Ukraine - EU visa facilitation agreement.
“Ukraine realized that its no-visa dialogue with the EU has just started. We hope it will be dynamic, substantial and oriented at a specific result,” Onyschuk stated.
The minister also says that EU’s next vital move should be a positive decision on canceling fee for drawing visas to Ukrainian citizens.
Beside that, he said it is inadmissible to employ EU’s visa policy as a tool of artificial restriction of Ukrainian citizens’ right to the freedom of movement by the EU territory.
As Ukrainian News earlier reported, the Ukraine - EU Troika meeting is in session in Luxembourg.
Ukraine and the European Union are planning to sign June 4 an action plan on no-visa negotiations.
The Foreign Affairs Ministry of Ukraine says it would be optimal to preserve no-visa travels for EU member-countries’ citizens on condition of rapid abolition of EU visas for the Ukrainians.