UKRAINE BUSINESS NEWS - TEN ARTICLES
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1. UKRAINE AMONG HARDEST HIT DUE TO TRADE FINANCE FREEZE
Trade finance crucial for post-crisis, frontier economies.
Analysis & Commentary: By Daniel W. Riordan
President, Zurich Surety, Credit and Political Risk
Kyiv Post, Kyiv, Ukraine, Fri, Feb 5, 2010
2. OPIC WORKSHOPS HELP BUSINESSES ACCESS PROGRAMS FOR UKRAINE
Sponsored by the U.S.-Ukraine Business Council (USUBC)
By Jim Davis, Ukraine Business Online (UBO), Kyiv, Ukraine, Wed, 10 Feb 2010
3. UKRAINE'S ECONOMY IN WORST CONTRACTION IN 15 YEARS
Ukraine's economy shrank 15 percent in 2009
Sabina Zawadski, Reuters, Kiev, Ukraine, Tue Feb 16, 2010
4. UKRAINE MACRO MONTHLY, FEBRUARY 2010
Erste Bank Ukraine Research, Kyiv, Ukraine, Tue, Feb 16, 2010
5. UKRAINE FIXED INCOME MONTHLY, FEBRUARY 2010
Erste Bank Ukraine Research, Kyiv, Ukraine, Tue, Feb 16, 2010
6. UKRAINE'S DEBT IS MANAGEABLE
Letter to the Editor: The Wall Street Journal
By Tomas Fiala, Managing Director Dragon Capital, Kiev
The Wall Street Journal, NY, NY, Tue, Feb 16, 2010
7. UKRAINIAN INDUSTRIAL PRODUCTION SLUMPED 12.5% IN JANUARY
By Daryna Krasnolutska and Kateryna Choursina
Bloomberg News, Kiev, Ukraine, Wed, Feb 17, 2010
8. BEST WESTERN OPENS FIRST HOTEL IN UKRAINE IN SEVASTOPOL
Best Western International, Phoenix, AZ, Thu, Feb 11, 2010
9. BNP PARIBAS BANK Q4 RESULTS SHOW NO BAD DEBT RELIEF IN UKRAINE
Boris Groendahl, Reuters, Vienna, Austria, Wed, Feb 17, 2010
10. CHANGES IN NON-RESIDENTS' SALARY TAXATION IN UKRAINE
Legal Alert, Salans, Kyiv, Ukraine, Mon, Feb 15, 2010
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1. UKRAINE AMONG HARDEST HIT DUE TO TRADE FINANCE FREEZE
Trade finance crucial for post-crisis, frontier economies.
Analysis & Commentary: By Daniel W. Riordan
President, Zurich Surety, Credit and Political Risk
Kyiv Post, Kyiv, Ukraine, Fri, Feb 5, 2010
With the worst of the global financial crisis apparently behind us, we are left to survey the damage the storm has left behind. The effects of the crisis will be seen for years to come. Perhaps the most significant long term damage is that being inflicted upon the global trading system, and the impact will be most severe in post crisis emerging market economies such as Ukraine.
But before we get into more detail about Ukraine and why it was hit so hard, let me provide a bit of background to put the global nature and impact of
this into context.
This year, the global economy will experience the sharpest contraction in trade in the post World War II era, over 10 percent by volume according to
recent International Monetary Fund projections. This historically sharp decline reflects several factors.
[1] First is the reduction in global demand. [2] This is amplified by higher elasticity of global trade, caused by increasingly complex supply chains in
which goods are often imported, exported, and re-exported several times before the finished product is purchased by the end user. [3] A third and
often overlooked factor is the increased scarcity of trade finance.
The World Bank estimates a trade finance “gap” of $250 billion. This gap is beginning to close through extraordinary measures undertaken by multilateral
financial institutions and governments and as banks and other trade creditors rebuild their balance sheets and their risk appetites.
There is a real threat, however, that the decades old norm of preferential treatment of trade finance could be overturned by the actions taken by the
governments of some crisis hit emerging markets. If continued, this may result in scarcer and more expensive trade credit, with the most severe consequences to be felt by post-crisis emerging market and frontier economies that stand to gain the most by integration into the global economy.
Trade finance often receives less attention than the more glamorous corners of finance due to the routine nature of its operations. But since 90 percent
of trade transactions involve short term trade finance in the form of some version of credit, insurance or guarantee, it is vital to the functioning of the global economy. Trade finance is particularly important to frontier and post-crisis economies, such as Ukraine.
For these countries, it is often one of the few forms of international finance available. Because exporters are perceived to have preferential access to scarce foreign reserves, and because trade finance transactions can be structured so that goods provide security for loans, international trade finance often operates in markets that commercial lenders and investment bankers avoid.
Exporter credit agencies and private insurers, such as Zurich Surety, Credit and Political Risk, provide a critical facilitating role for trade finance. They allow trade finance creditors to manage their risk exposures through guarantees and insurance. Last year insurance for exports provided by members of the Berne Union, an international association of public and private export credit providers and investment insurance agencies, amounted to $1.4 trillion.
While trade finance may be one of the most basic and fundamental forms of global finance, because trade finance lines are short term and self liquidating, trade finance can quickly evaporate if it is not given priority treatment in times of crisis. As the IMF has noted in the past, "Sharp declines in trade credit have a number of adverse consequences, disrupting a country's trade and growth performance and possibly exacerbating the crisis."
Past crises have taught us that policy makers in crisis hit emerging economies must act decisively to restore trade finance before any vigorous
recovery can get underway.
In 1998, Russia excluded some trade finance obligations from a 90-day moratorium on foreign exchange payments. In 2002, Argentina allocated a higher share of its scarce foreign reserves to debtors with foreign trade obligations, and recognized the central importance of maintaining trade flows and keeping financing lines in place by exempting debtors from obtaining Central Bank approval to convert and transfer payments to meet obligations insured by members of the Berne Union.
In 2001, when Turkey began to experience liquidity problems, the central bank quickly identified the maintenance of trade finance lines as a priority. After spending over $20 billion restructuring and recapitalizing the domestic banking sector, Turkey received commitments from trade creditors to maintain their lines.
In the current crisis, the most notable tests of the principle of preferential treatment of trade finance have occurred in Ukraine and Kazakhstan. Both of these countries suffered failures of systemically important banks with significant trade finance obligations. In each case, the commitment placed on the restoration of trade finance lines by government officials has been ambivalent at best. Likewise multilateral financial institutions have yet to provide clear support for the principle in their consultations with national authorities.
IN UKRAINE NO SERIOUS COMMITMENT
In Ukraine, where the bank failures have been widespread and the recession has been particularly severe, the Ministry of Finance has yet to demonstrate
a serious commitment to the recapitalization of several systemically important banks or to offer appropriate restructuring terms to trade creditors.
Furthermore, a recently passed banking law aimed at improving the procedures for the financial rehabilitation of Ukrainian banks has undermined the
rights of creditors, including trade creditors, by downgrading the ranking of trade creditors in case of a bank liquidation relative to obligations due
to the Ministry of Finance and the National Bank of Ukraine.
In Kazakhstan, bank failures have been more limited, but the negotiations for the restructuring of the debts of BTA Bank, formerly Kazakhstan’s biggest lender, have been particularly concerning for trade creditors. BTA’s restructuring offer included a 82.25 percent haircut, with no exemption or referential terms offered to trade creditors.
As if those terms didn’t communicate the Kazakh government's stance clear enough, Grigory Marchenko, the chairman of the central bank of Kazakhstan, when asked if he was concerned that the harsh terms would raise concerns among investors, said:"Image is nothing."
FAILURE OF GOVERNMENT OF UKRAINE
The failure of the governments of Kazakhstan and Ukraine to place appropriate emphasis on the restoration of trade finance is undermining the
recovery of their economies.
In Ukraine, by the second quarter of 2009, imports and exports were down by more than 50 percent year-on-year. While this is driven partly by demand,
anecdotal evidence suggests the scarcity of trade finance is having a major impact on Ukrainian firms.
In recent months, Zurich has been contacted directly and through business forums by Ukrainian companies that are unable to import capital goods that are critical to maintaining or expanding their business.
Alexander Gordin, managing director of Broad Street Capital, a merchant bank with extensive experience structuring and arranging financing for trade in Ukraine, recently estimated to Zurich that some 30 percent of the drop in trade is due to lack of trade finance.
In assessing the fallout of the collapse in trade finance, Gordin said "We have seen numerous examples where… projects which are vitally important to
the population are not getting done for lack of trade financing. Major manufacturers are forgoing the market and crossing it off their strategic plans since no financing is available."
It should not be surprising that the Ukrainian economy is believed to have contracted by 15 percent last year, the most severe recession of major
emerging market economies.
Multilateral financial institutions must also recognize that the treatment of trade finance in this crisis will have implications far beyond Kazakhstan and Ukraine. A clear repudiation of the principle of preferential treatment of trade finance, with no response by the multilateral financial institutions, will increase pricing and reduce availability of trade finance for emerging market and frontier economies.
NOTE: Daniel W. Riordan is the President of Zurich Surety, Credit and Political Risk. Between 2005 and 2008, Zurich Financial Services underwrote
trade credit and political risk insurance policies that facilitated $1.42 billion in trade and $465 million in foreign direct investment in Ukraine.
USUBC NOTE: Zurich Surety, Credit and Political Risk, Washington, D.C., is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
LINK: http://www.kyivpost.com:80/news/business/bus_general/ detail/58709
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2. OPIC WORKSHOPS HELP BUSINESSES ACCESS PROGRAMS FOR UKRAINE
Sponsored by the U.S.-Ukraine Business Council (USUBC)
By Jim Davis, Ukraine Business Online (UBO), Kyiv, Ukraine, Wed, 10 Feb 2010
KYIV - After years of efforts finally brought success in reopening the services of the U.S. Overseas Private Investment Corporation (OPIC) for Ukraine, the U.S.-Ukraine Business Council (USUBC) began implementing a series of programs to better inform current and potential investors on best methods to access the wide range of OPIC programs.
As a part of the In honor of OPIC being open for business in Ukraine, USUBC, Broad Street Capital Group (creators of the "Fluent in Foreign" book and workshop series), New York, NY, in cooperation with OPIC, the Government of Ukraine, the U.S. Commercial Service, with support from Marks Sokolov & Burd, SigmaBleyzer, Chadbourne & Park and other sponsors, is holding three workshops with the title, “Fluent in OPIC.”
Today’s workshop drew a large audience of interested business men and women to the corporate headquarters of SigmaBleyzer in Kyiv’s Mandarin Plaza in Kyiv. SigmaBleyzer is a major contributor to USUBC and helped sponsored today’s event. A third workshop will be held in New York City on a date to be announced soon, most likely in March.
The first workshop was held in Washington, D.C. on Wednesday, January 20, with over 80 persons attending. Those who attended described the event as very professional, informative, and helpful. Ukraine's Ambassador to the United States Oleh Shamshur; the former U.S. Ambassador to Ukraine, William Taylor; and William Klein, former senior member of the Economic Team at the U.S. Embassy in Kyiv, who worked on the OPIC settlement, attended the reception along with several high level representatives of OPIC.
Both of the workshops have presented a comprehensive "beyond the website" practical, hands-on, look at how to effectively utilize OPIC to finance and/or insure business transactions for Ukraine. The workshops have addressed the application process, deal structures, sponsor requirements and commitments, approval procedure, realistic time frame estimates, costs, fees and legal and developmental issues.
OPIC has worldwide scope and offers unique opportunities for developing countries
OPIC’s mission is to mobilize and facilitate the participation of United States private capital and skills in the economic and social development of less developed countries and areas, and countries in transition from nonmarket to market economies. There are predictions from experts that the impact of OPIC programs on Ukraine could result in financing and other benefits totaling over $500 million in the short run and could even be much greater in the long run.
OPIC’s political risk insurance and financing have helped U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency's 38-year history, OPIC has supported $188 billion worth of investments that have helped developing countries to generate over 830,000 host-country jobs. OPIC projects have also generated $72 billion in U.S. exports and supported more than 273,000 American jobs.
Several top level OPIC experts were in Kyiv as participants in today’s workshop. However, OPIC operates its programs only through its Washington headquarters, operating at a practical level through United States embassies around the world. Persons in Ukraine interested in seeking information about accessing the potential benefits of OPIC programs should contact the U.S. Foreign Commercial Service, 4 Hlybochyts'ka St., 4th floor, in Kyiv. 044-490-4018.
To learn more about OPIC, link below: http://www.opic.gov/
LINK: http://www.ukrainebusiness.com.ua/news/972/USUBC-workshops-help-businesses-access-OPIC-programs-for-Ukraine.html
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3. UKRAINE'S ECONOMY IN WORST CONTRACTION IN 15 YEARS
Ukraine's economy shrank 15 percent in 2009
Sabina Zawadski, Reuters, Kiev, Ukraine, Tue Feb 16, 2010
KIEV - Ukraine's economy shrank 15 percent in 2009 -- the worst contraction in 15 years -- hit by a dramatic drop in steel exports as global demand waned during the financial crisis. But as the economy tumbled, politicians were focused on a power struggle, which culminated in a bitterly-fought presidential election this month.
The preliminary estimate published by the economy ministry on Tuesday is exactly in line with a forecast from the International Monetary Fund, which has had to come to Ukraine's aid with a $16.4 billion bailout. That programme was suspended at the end of last year over broken budget promises.
The figure, however, is worse than a median of 14.0 percent in a Reuters Poll of analysts taken earlier this month and the 12.5 percent predicted by Economy Minister Bohdan Danylyshyn at the end of last year.
Quarterly figures released a day earlier showed signs of a fragile recovery -- the economy shrank 7 percent in the fourth quarter year-on-year, the smallest drop last year. The largest was just over 20 percent in the first quarter.
The economy grew 2.1 percent in 2008.
Although the government does not now publish quarter-on-quarter data, the central bank said Ukraine emerged from recession in the second quarter of 2009 when it grew 4.5 percent after a drop of 12.9 percent in the first quarter.
Signs of recovery are welcomed as Ukraine struggles to pay its debts.
A deputy finance minister on Monday raised the prospect of short-term domestic debt getting out of hand as it is forced to issue more of at skyhigh yields to cover recently-issued debt falling due. He proposed borrowing abroad.
But "people could be discounting the additional factor" of economic recovery, said UniCredit economist Dmitry Gourov. "If the economy continues to improve then the treasury will have more finances available and would have to borrow less to pay debt back. The export sector is improving," he said.
RECORD BANKING LOSSES
Analysts have long said reliance on steel -- a legacy from the Soviet days -- dictates the fate of the economy and until structural reforms are introduced, the country will continue to swing with the price of metals.
"Steel is a particularly bad commodity from the credit perspective because every time there's a credit crunch, people stop buying cars and houses," said Commerzbank analyst Dmitry Sentchoukov.
NOT USHER IN PERIOD OF FUNDAMENTAL REFORMS
Few believe President elect Viktor Yanukovich, backed by wealthy industrialist and steelmen from the eastern regions, would usher in a period of such fundamental reforms.
"So the medium term outlook is not really positive because there's high probability of Ukraine meeting the next crisis with the same reliance on steel and a higher debt load when a blank cheque from the IMF may not be available," Sentchoukov said.
The fall in exports prompted a sharp fall in the hryvnia -- it lost over half of its value to the dollar at the end of 2008 when the economy began to slide and traded at only slightly stronger levels last year thanks to central bank intervention.
That fall also shook the banking sector to the core as companies and ordinary Ukrainians who borrowed in dollars suddenly could not afford to repay their debts.
Data from the central bank issued on Tuesday showed the banking sector as a whole made its biggest losses on record -- 31.5 billion hryvnias ($3.9 billion) in 2009 against overall profits of 7.3 billion hryvnias in 2008.
The economy is expected to return to growth this year with estimates at 2.6-2.7 percent from the World Bank and the IMF. Danylyshyn said GDP could grow by as much as 3.7 percent.
But some analysts are pessimistic.
"Given that the banking sector is still very fragile and banks are providing very few loans to the real sector at affordable rates, we maintain our conservative 2010 GDP forecast of 2.1 percent," Renaissance Capital said in a note.
Ukraine, once the breadbasket and industrial powerhouse of the Soviet Union, gained independence in 1991. But its economy is still recovering from that shock -- its size in 2008 was only 74 percent of what it was in 1991. (Reporting by Sabina Zawadzki; Editing by Ron Askew)
LINK: http://www.reuters.com/article/idUSLDE61F0TV20100216 ?type=marketsNews
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4. UKRAINE MACRO MONTHLY, FEBRUARY 2010
Erste Bank Ukraine Research, Kyiv, Ukraine, Tue, Feb 16, 2010
KYIV - The Ukraine Macro Monthly Report for February 2010 from Erste Bank Ukraine Research provides the following analysis:
GDP: According to preliminary estimates from the State Statistics Committee, 4Q09 real GDP declined by 7% y/y. The figure came as a very big negative surprise for us and for other local economists. We will not change our outlook for 2010 GDP, which currently stands at 2.8% growth, until we see the full GDP breakdown.
If the reason for the strong 4Q GDP decline was in inventories, taxes and imports, we will most likely not review our estimates. However, if there was a notable decrease in household consumption, we might have to reevaluate our view of the current economic environment.
Inflation: Inflation is likely to decrease in y/y terms for the next several months, due to a base effect, as during the same period of last year, Ukraine was still feeling the effects of sudden hryvnia devaluation.
Wages: In 2009, the average wage in Ukraine increased by 5.5% to UAH 1,906 (EUR 165). The increase is well below the official consumer inflation for 2009 of 12.3%. As for 2010, the income of the population is expected to increase only slightly, based on the expected 2.8% real GDP growth.
Public debt: Public debt now stands at 32% of the estimated 2009 GDP. The National Bank of Ukraine has monetized government debt obligations worth 3.5% of GDP. Officially, the government ended the 2009 fiscal year with an official deficit of only 2.7% of GDP.
This is due to the use of coverage techniques of the actual deficit. Currently, we expect the total public debt to increase to 35% of GDP in 2010 on new borrowings and higher nominal GDP.
Balance of payments: In 2009, Ukraine suffered the worst capital outflows in CEE in relation to GDP and net FX reserves. The total outflow covered by the country’s FX reserves totaled USD 13.8bn. The main problem for the balance of payments was sentiment among the population.
The National Bank has estimated the total balance of payments deficit for 2010 at USD 3.2bn. This is a feasible target, as there should not be a money issuance commensurate to nominal GDP growth or a dramatic decline in consumer confidence.
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5. UKRAINE FIXED INCOME MONTHLY, FEBRUARY 2010
Erste Bank Ukraine Research, Kyiv, Ukraine, Tue, Feb 16, 2010
KYIV - The Ukraine Fixed Income Monthly Report for February 2010 from Erste Bank Ukraine Research provides the following analysis:
Money Market: The money market continues to function with high liquidity. Thus, money market rates continue to decline. The National Bank has set an interest rate of 8% for its 1M deposit certificates, which was enough to sterilize around UAH 7bn at the end of January compared to UAH 3.4bn at the beginning of the month. There is still no tendency among banks to expand the duration of deals on the money market.
Debt Market: Non-residents have substantially increased their interest in government bonds. The total holding of non-residents has grown to UAH 1.1bn, compared to UAH 0.4bn at the beginning of the year. In the pre-crisis period, non-residents held UAH 2.5bn in government securities. However, it is still hard to make an accurate comparison, as the supply of government securities is many times higher than pre-crisis levels.
The improved liquidity of the banking system and increased interest from non-residents will be putting downward pressure on domestic bond yields. However we expect the yields for government bonds to drop only slightly or remain at current levels at least till end of April, when MoF has the toughest period in terms of domestic debt redemptions.
The global risk aversion towards Europe on fears over Greece’s fiscal deficit had little impact on emerging market bonds. In a conference call with domestic primary bond dealers, the MoF declared its willingness to search for placements on external markets this year, as the yields have become more affordable.
FX Market: January proved a tough month for the hryvnia, as the National Bank had to fight off some pressure coming from the pre-election foreign currency cash purchases and having to cover the government’s needs for imported gas. In total, the NBU spent a very significant amount (USD 1.1bn) on interventions in January.
According to the deputy head of the NBU, Anatoliy Shapovalov, the central bank is prepared to protect the hryvnia from strong movements in the future with its interventions.
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6. UKRAINE'S DEBT IS MANAGEABLE
Letter to the Editor: The Wall Street Journal
By Tomas Fiala, Managing Director Dragon Capital, Kiev
The Wall Street Journal, NY, NY, Tue, Feb 16, 2010
KIEV - With regard to Christopher Granville's Jan. 18 op-ed "Ukraine is Headed for National Bankruptcy": The country's debt level remains manageable. Ukraine's pre-crisis gross external debt-to-GDP stood at a healthy 57%. After the crisis erupted, debt remained stable at around $100 billion but the contraction of GDP pushed the ratio to an estimated 90% by end-2009.
On this measure, Ukraine has a considerably more secure position than emerging European Union peers such as Hungary (186% by 3Q09), Bulgaria (123%) or Slovenia (119%).
Ukraine's end-2009 external public debt amounted to $24 billion, or 21% of GDP. A mere $1 billion out of this amount is due in 2010, with the country's current international reserves totaling $25.3 billion.
In the private sector, refinancing the current portion of the external debt ($80 billion in total, $18-$20 billion due in 2010) is hardly a "miracle scenario" since the bulk of this amount is related-party cross-border lending in the corporate sector. Out of an estimated $28 billion that was due in 2009, 82% was rolled over.
Although the budget suffered from the economic downturn (we estimate the 2009 budget gap at about 9% of GDP, or $10 billion), Ukraine financed the deficit without extensive money printing—largely thanks to the IMF stand-by program. This helped to stabilize the currency and reduce inflation to 12.3% in 2009 from above 20% in 2008.
The global commodity recovery is supporting Ukraine's steel giants, and the economy has been growing for three successive quarters at 2.5% on average (10% annualized). We record a clear revival of local, Russian and Western interest in Ukraine's market, with the stock index up 273% from its bottom in March 2009 and 14% so far in 2010.
LINK: http://online.wsj.com/article/SB10001424052748704804 204575069173473325304.html?mod=WSJ_latestheadlines#article Tabs%3Darticle
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7. UKRAINIAN INDUSTRIAL PRODUCTION SLUMPED 12.5% IN JANUARY
By Daryna Krasnolutska and Kateryna Choursina
Bloomberg News, Kiev, Ukraine, Wed, Feb 17, 2010
KIEV - Ukraine’s industrial production declined in January after two months of growth as manufacturers shut down factories during the extended holiday period.
Output fell 12.5 percent in January from December, the biggest monthly slump for a year, after a 2.6 percent gain in December, the state statistics committee said in a statement on its Web site late yesterday. Production increased on an annual basis by 11.8 percent. The median estimate of nine economists in a Bloomberg survey was for annual growth of 13 percent.
Output, which expanded an average 10.2 percent a year between 2000 and 2007, shrank last year as the global financial crisis cut demand for exports such as steel and chemicals. Production plummeted 21.9 percent in 2009, the most since 1994. Industrial output makes up a quarter of gross domestic product.
“The decline was due to seasonal factors as we have many days off in January,” said Olena Bilan, an analyst at Kiev- based investment bank Dragon Capital, before the release. “We expect a gradual recovery in production through the year, driven by export-oriented industries such as steel and machine-building as well as sectors related to them. Full-year annual growth in industry is seen at 8 percent.”
The economy of the former Soviet republic contracted 15 percent in 2009, the biggest decline since 1994, the Economy Ministry said yesterday. Ukraine expects economic growth of 3.7 percent and industrial output to increase 2.9 percent in 2010, Economy Minister Bohdan Danylyshyn said on Sept. 12. [With assistance from Zoya Shilova in Moscow. Editors: Alan Crosby, John Simpson]
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8. BEST WESTERN OPENS FIRST HOTEL IN UKRAINE IN SEVASTOPOL
Best Western International, Phoenix, AZ, Thu, Feb 11, 2010
PHOENIX, AZ - Best Western International has expanded its portfolio in Eastern Europe with its first hotel in the Ukraine, the Best Western Sevastopol Hotel in Sevastopol, located in one of the largest sea ports and cultural-historical centers. The Best Western Sevastopol Hotel will be ideal for foreign tourists and business people traveling in and out of Crimea’s main resort destination.
"With the first Best Western property in Ukraine, travelers are able to stay with a trusted friend while exploring a city and nation rich in history,” said Suzi Yoder, Vice President of International Operations at Best Western International. “The Best Western Sevastopol Hotel will be ideal for foreign tourists and business people traveling in and out of Crimea’s main resort destination.”
Built in 1952, the Best Western Sevastopol Hotel is located in the heart of the historical center of the city. The 106-room hotel features unique architecture and an authentic style hotel conference hall, one of the finest and largest venues in Sevastopol, hosting a variety of events. Each luxurious guest room has high speed internet access, and many have balcony views of Sevastopol Bay.
Guests will also enjoy the convenience of 24-hour room service and an on-site restaurant that features a summer terrace with fascinating views of Sevastopol Bay. Other hotel amenities include a cocktail lounge, 24-hour on-site café, business center, concierge service and laundry service. The hotel is within walking distance of theaters, art galleries, museums, public beaches, restaurants and pubs, making it an ideal destination.
ABOUT BEST WESTERN INTERNATIONAL
Best Western International is THE WORLD'S LARGEST HOTEL CHAIN®, providing marketing, reservations and operational support to over 4,000 independently owned and operated member hotels in 80 countries and territories worldwide. An industry pioneer since 1946, Best Western has grown into an iconic brand that hosts 400,000* worldwide guests each night. Equally committed to the business and leisure traveler, Best Western recently embarked on a mission to lead the hotel industry in customer care.
World Vision is the charity of choice for Best Western in building the world's largest family, with our hotels and staff sponsoring children in need around the globe. Our partnerships with AAA/CAA, Michael Waltrip Racing and Harley Davidson help guests make the most of every trip. For the fastest way to a free night, join Best Western Rewards®, the only hotel frequency program that's truly global. For more information or to make a reservation, please visit www.bestwestern.com.
LINK: http://www.businesswire.com/news/home/201002110 06154/en/Western-Opens-Hotel-Ukraine
Photo: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6175685&lang=en
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9. BNP PARIBAS BANK Q4 RESULTS SHOW NO BAD DEBT RELIEF IN UKRAINE
Boris Groendahl, Reuters, Vienna, Austria, Wed, Feb 17, 2010
VIENNA - Fourth-quarter bad debt charges at the Ukrainian unit of BNP Paribas reversed a declining trend, possibly boding ill for upcoming results of other banks geared to the IMF-supported country.
BNP, which owns Ukraine's No.4 lender Ukrsibbank, said on Wednesday Ukraine loan loss provisions rose to 108 million euros ($147 million), up 10 percent from the previous quarter after three straight quarters of falling charges.
BNP Chief Executive Baudouin Prot said however that the bad debt had stabilised in Ukraine, the biggest drag on earnings in BNP's emerging markets division last year, after boosting credit growth for years before the crisis.
The other international banks which own major lenders in Ukraine -- Raiffeisen International, UniCredit and OTP -- all booked a sharp rise in Ukraine bad debt charges over the last four quarters. BNP said in slides prepared for presentation on Wednesday that it would "refocus" its emerging markets division on its new Poland business -- acquired as part of Fortis -- Turkey and the northern African countries where it has a big franchise.
Among emerging European countries, banks in Poland and Turkey were the best at weathering the financial crisis by shunning the breakneck loan growth in countries like Ukraine, Romania or Bulgaria.
LINK: http://www.iii.co.uk/news/?type=afxnews&articleid=77 53464&subject=companies&action=article
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10. CHANGES IN NON-RESIDENTS' SALARY TAXATION IN UKRAINE
Legal Alert, Salans law firm, Kyiv, Ukraine, Mon, Feb 15, 2010
KYIV - On 12 February 2010 the State Tax Administration of Ukraine published draft amendments to Letter No. 28593/7/17-0717 dated 23 December 2009 “Regarding the overview letter dealing with taxes paid from income of foreign citizens and non-residents”. In particular, the draft proposes the following amendments:
[1] Foreign citizens are granted Ukrainian resident status starting from the tax period (month) stated in the notice/certificate. The notice/certificate is valid until the end of the accounting tax (calendar) year. The term for tax authorities to issue the notice/certificate must not exceed 30 calendar days from the date when the respective non-resident delivers the relevant documents to the tax authorities.
[2] For some categories of foreign citizen (those having permanent residence permits, employed by resident employers or the representative office of a foreign firm, or for foreign citizens having the “focus of their vital interests” within Ukraine) relevant lists of documents are stipulated which are to be submitted for the purpose of issuance of the notice/certificate.
[3] Foreign citizens having an employment permit or employed with the representative office of a foreign company in Ukraine and working in Ukraine for more than one calendar year (continuously or due to prolongation of the effective term of their contract) are entitled to early issuance of the notice/certificate for the next (accounting) year, provided they deliver evidence of their residence or stay in Ukraine for more than 183 days in the calendar year preceding the accounting year.
[4] Salaries paid by an employer to a foreign citizen who is non-resident for the first 183 days of his/her first year of stay in Ukraine (prior to the date on which the notice/certificate is granted) are subject to final tax at a 30% rate.
[5] A resident foreign citizen (including those registered as an entrepreneur) must submit (based on the results of the accounting tax year when he/she is granted Ukrainian resident status) an annual tax return indicating his/her global income (including income earned in Ukraine) earned from 1 January until 31 December. This duty applies irrespective of whether the resident foreign citizen has resident status during the period set for delivery of the annual tax return.
[6] If a foreign citizen is granted resident status early, prior to the accounting tax year, and his/her income is subject to tax at a 15% rate but he/she
terminates his/her contract (of employment) and has failed to stay in Ukraine for over 183 days, then the tax agent must adjust the tax paid from the annual taxable income paid to such non-resident and social tax benefits (if any) and apply a 30% rate.
[7] Taxpayers who acted pursuant to the Generalizing Clarifications of the State Tax Administration of Ukraine No. 50 of 29 January 2004, at the time when the State Tax Administration of Ukraine took a new standing with respect to taxes paid from the income of non-residents in its Letter No. 28593/7/17-0717 dated 23 December 2009, will not be brought to account.
For further information regarding taxation in Ukraine, please contact: Igor Davydenko, Partner, E: idavidenko@salans.com; Kateryna Mikheyeva, Associate
E: kmikheyeva@salans.com; Salans Kyiv 49-A, Volodymyrska Street, 2nd Floor, 01034 Kyiv, Ukraine, T: +380 44 494 4774, F: +380 44 494 1991
E: kyiv@salans.com
USUBC FOOTNOTE: Salans LLP is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business relations & investment since 1995.