The lack of a fair judicial system in Ukraine has always been a longstanding concern for investors eyeing Ukraine for potential investments. Ensuring the rule of law through implementation of judicial reform and elimination of corruption is a key priority for the American Chamber of Commerce and an indisputable condition for creating an attractive investment climate in Ukraine. Thanks to joint efforts of the business community and Ukraine’s Government, 2017 was eventful in terms of positive steps towards amelioration and modernization of the legal framework.
An End to Unlawful Pressure on Business?
September 14th may go down as a landmark day for the business community: on that day, a meeting took place with President Poroshenko, Prime Minister Groysman, Prosecutor General Yuri Lutsenko and representatives of law enforcement agencies, together with 300 key business leaders. During this meeting, I asked for an immediate stop to unauthorized heavy-handed raids by law enforcement officers in balaclavas with machine guns breaking down the doors of businesses in search of tax document receipts. I used the words of George Orwell: “Imagine a boot stamping on a human face.”
Three weeks later, Ukraine’s Chief Prosecutor signed a letter in a ceremony that I attended together with colleagues from the Ukrainian business community and the European Business Association where he promised to stop all violations of the rights of business entities. This is a tangible result in the ongoing B2G dialogue. Nevertheless, plenty of work remains ahead. According to a latest American Chamber survey on Investment Climate, 75% of respondents see a problem in the heavy-handed activities of law enforcement agencies.
Corporate Agreements and Squeeze-Out
Aristotle once said, “Law is order, and good law is good order”. In 2017, the business community benefited from changes in corporate legislation when parliament adopted draft laws on Corporate Agreements and Procedure of Squeeze-Out. The first Draft Law previews the mechanisms that facilitate the settlement of disputes between owners of limited liability companies or shareholders, ensuring validity and effective application of corporate agreements in practice. The second focuses on the introduction of the mechanism of squeeze-out, which ensures simplifying procedure for buy-out of minority stocks aimed at alignment of Ukrainian legislation with international standards. Thus, to ensure favorable legal conditions for doing business in Ukraine, a gradual contribution of business and the Government to further development of modern corporate legislation is vital.
Saying NO to Corruption
Despite all efforts of the Government’s anti-corruption bodies, according to our latest survey on the Ukrainian investment climate, corruption remains the #1 challenge for business in Ukraine. Nevertheless, in 2017 the National Agency for Prevention of Corruption approved an anti-corruption program for legal entities. The document, which corresponds to international standards, will ensure better adherence to integrity not only by international companies, but also local ones and, most importantly, state-owned enterprises.
Keep It Legal
Understanding the need of a platform that brings together leading experts in the legal sphere, the American Chamber of Commerce in Ukraine launched a Legal Committee three years ago. Year in, year out, the Committee is becoming more formidable. It is currently functioning as a successful platform for B2G dialogue, promoting business integrity, and addressing issues in the judicial, anti-monopoly, and anti-corruption spheres. We look forward to further modernization of Ukraine’s legal framework for business activities, eliminating corruption, and ensuring full-scale judicial reform