Welcome to the U.S.-Ukraine Business Council

UKRAINE BUSINESS NEWS - TEN ARTICLES
No VAT Refunds, IMF Returns, Non-Resident Taxation, New Cabinet
U.S.-Ukraine Business Council (USUBC), Mon, Mar 15, 2010

MONDAY, MARCH 15, 2010
Kyiv, Ukraine

UKRAINE BUSINESS NEWS - TEN ARTICLES
No VAT Refunds, IMF Returns, Non-Resident Taxation, New Cabinet

INDEX OF ARTICLES  ------
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article

1.  UKRAINE'S LACK OF VAT TAX REFUNDS CAUSES HUGE PROBLEMS
Agribusiness Leaders Meet with IMF and U.S. Treasury Department Officials
U.S.-Ukraine Business Council (USUBC), Wash, D.C., Mon, March 15, 2010

2.  BUSINESS ASSOCIATION URGES PRESSURE ON UKRAINIAN AUTHORITIES TO SOLVE PROBLEM OF GOVERNMENT'S FAILURE TO REFUND VAT 

UkrAgro Outlooks and Comments, Kyiv, Ukraine, Thu, March 11, 2010 

3 EBA TO PUT ISSUE OF VAT REIMBURSEMENT ON LIST OF CLAIMS
OF INTERNATIONAL CREDITORS AGAINST UKRAINE

Interfax Ukraine, Kyiv, Ukraine, Wed, March 3, 2010

4 UKRAINE'S STATE DEBT TO ILLICH STEEL MILL FOR VAT
REIMBURSEMENT REACHES UAH 800 M

Interfax, Kyiv, Ukraine, Wed, March 3, 2010

5 LONDON AGRIBUSINESS COMPANY BATTLES HOSTILE ENVIRONMENT IN UKRAINE
Fails to secure a $10 million VAT reimbursement on imported goods
By Graham Stack, Bne Media Ltd., Berlin, Germany, March 4, 2010

6 IMF READY TO BACK UKRAINE'S EFFORTS AIMED AT ECONOMIC GROWTH
Interfax Ukraine News, Kyiv, Ukraine, Fri, March 13, 2010 
 
7.  TAXATION OF FOREIGN INDIVIDUALS IN UKRAINE - IMPORTANT NEW DEVELOPMENT
KPMG News Flash, Kyiv, Ukraine, Thu, March 11, 2010

8.  TAXATION OF NON-RESIDENT'S INCOME IN UKRAINE
Human Capital News, Ernst & Young, Kyiv, Ukraine, March 9, 2010

9.  LEADING CULINARY COMPANY IN UKRAINE SOLD TO NESTLE  
Baker & McKenzie, Kyiv, Ukraine, Fri, Feb 26, 2010
 
10.  UKRAINIAN PARLIAMENT APPROVES NEW CABINET OF MINISTERS
Stepan Smyshliaev, Ukrainian News Agency, Kyiv, Ukraine, Thu, Mar 11, 2010 
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1.  UKRAINE'S LACK OF VAT TAX REFUNDS CAUSES HUGE PROBLEMS
Agribusiness Leaders Meet with IMF and U.S. Treasury Department Officials

U.S.-Ukraine Business Council (USUBC), Wash, D.C., Mon, Mar 15, 2010

WASHINGTON, D.C. - Agribusiness officials, who are members of the U.S.-Ukraine Business Council (USUBC) Agribusiness Committee and represent major companies who are large investors in Ukraine, met in Washington last week with officials of the International Monetary Fund (IMF) and the U.S. Department of the Treasury. 

The agribusiness leaders explained the huge problems they are facing in Ukraine because the government has not paid them back, for over a year now, any of the 20%  VAT which they paid in which they purchased grain from agricultural producers.  The top agribusiness officials urged the IMF and the U.S. Treasury to raise the serious VAT issue with officials in the new Ukrainian government and to urge the government to act quickly to develop a credible plan to start paying the back refunds and to keep current new VAT payments.

Agricultural commodity exporters are owed hundreds of millions of dollars by the government in VAT refunds.  Reports indicate the total VAT arrears owed to all exporters by the government of Ukraine is around 3 billion dollars. 

Agribusinesses are being forced to cut back on their business operations in Ukraine, have stopped making new investments and are having to find ways to increase their margins to cover the added risk of doing business in Ukraine.  This is very costly to farmers, to each agribusiness and to economic development in Ukraine. 

The VAT refund problem is at the top of the list of issues the U.S.-Ukraine Business Council (USUBC) believes need to be addressed quickly by the new government in Ukraine headed by President Victor Yanukovich.  USUBC will continue to work with officials in the IMF, the World Bank, the EU, and the U.S. government to press the government of Ukraine to develop and implement a real program to resolve the VAT issue.  USUBC has been working on the VAT issue now for several months. 

Other top business associations such as the Ukrainian Grain Association (UGA), Ukrainian Agrarian Confederation (UAC), Ukrainian Union of Industrialists and Entrepreneurs (UUIE), the European Business Association (EBA) and the American Chamber of Commerce in Ukraine (Chamber) are also raising the VAT issue. 
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2.  BUSINESS ASSOCIATION URGES PRESSURE ON UKRAINIAN AUTHORITIES TO SOLVE PROBLEM OF GOVERNMENT'S FAILURE TO REFUND VAT 

UkrAgro Outlooks and Comments, Kyiv, Ukraine, Thu, March 11, 2010 

KYIV - The European Business Association [EBA], which was created upon the initiative of the European Commission for protection of European business interests in Ukraine, is calling on the International Monetary Fund [IMF], the World Bank [WB], the European Bank for Reconstruction and Development [EBRD], and the International Finance Corporation [IFC] to pressure the Ukrainian authorities to solve the problem of the government’s failure to refund VAT, said Alexey Kredisov, Vice President of the European Business Association and managing partner of Ernst & Young in Ukraine.

“We speak with the international financial organizations providing financial support to the government – IMF, WB, EBRD, IFC – and with embassies (of different countries in Ukraine) and the EU to make Ukraine fulfill these demands (for normalization of VAT refunds)," he said.

In the opinion of Mr. Kredisov, it would be expedient if the International Monetary Fund made this a demand to Ukraine (that it normalize VAT refunds) as a condition for receiving next stand-by loan tranche. According to EBA Executive Director Anna Derevyanko, the outstanding VAT refunds total more than UAH 20 Bl, [around 2.5 billion dollars] with roughly 10% of this amount being owed to the association member companies.

The EBA believes the problem of outstanding VAT refunds could be solved in several ways:

       [1] through issuing state VAT bonds (to solve the problem of the already accumulated tax refund debt of the government),
       [2] through issuing tax anticipation bills by VAT payers (to prevent the formation of new refund debts), and
       [3] through introducing mutual settlement of accounts between the government and VAT payers (write-off of the government’s VAT refund debt in lieu of income tax).

The EBA also hopes for a revival of the dialogue with the Ukrainian authorities on solving the problem of outstanding VAT refunds. As reported before, Serhiy Buryak, Head of the State Tax Association, stated in the middle of February that he estimated the total amount of outstanding VAT refunds at over UAH 20 Bl.

LINK: www.ukragroconsult.com

NOTE:  Ernst & Young Ukraine is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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3.  EBA TO PUT ISSUE OF VAT REIMBURSEMENT ON LIST OF
CLAIMS OF INTERNATIONAL CREDITORS AGAINST UKRAINE

Interfax Ukraine, Kyiv, Ukraine, Wed, March 3, 2010

KYIV - The settling of the problem of the untimely reimbursement of VAT is one of the important tasks that the new authorities of Ukraine face, according to the European Business Association (EBA).

Association CEO Anna Derevianko told the press on Tuesday in Kyiv that the introduction of responsibility for untimely VAT reimbursement was put on a list of proposals sent by the association to Ukrainian President Viktor Yanukovych.

The list also includes proposals to fight corruption, reform the court system, cancel a moratorium on trade with land plots, relax customs procedures, and improve current regulation, certification and standardization procedures for foreign trade.

"Today we sent an official address to ambassadors of the states that are members of the board of the International Monetary Fund (IMF), so that they raise the issue at the board and tried to include transparent VAT reimbursement in the conditions that Ukraine should implement to receive credits," she said.

The vice president of the association and managing partner of Ernst & Young in Ukraine, Oleksiy Kredysov, said that tough claims from international creditors could force Ukraine to change its policy of VAT non-reimbursement.

"Business was deprived of what belongs to it, and it is not returned to business. All our calls were left unheard. International organizations, in particular, the IMF, put forward certain requirements to close similar loopholes in their programs. We want this problem to be on the list of those that Ukraine has to solve," he said.
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4.  UKRAINE'S STATE DEBT TO ILLICH STEEL MILL
FOR VAT REIMBURSEMENT REACHES UAH 800 M

Interfax, Kyiv, Ukraine, Wed, March 3, 2010

KYIV - OJSC Mariupol Illich Steel Mill (Donetsk region) has said that its key task in relations with the state is to achieve the payment of a VAT debt that has reached UAH 800 million,the mill's board chairman and director general,Volodymyr Boiko,said at a press conference in Mariupol on February 9.

"It's not out fault that the state does not keep its promises. We'll try to survive for two or three months and then we'll try to achieve a VAT reimbursement before the mill is forced to stop. The whole world will support us,as we worked honestly during all the previous years," he said. Boiko said that the state paid only its debt for August of UAH 70 million,while the debt for September totals UAH 154 million.

"If relations with the state had been normal,we would have had funds to increase wages in January,but today we see huge losses and have to daily compute expenses for the production of every tonne of cast iron and steel," he said.  He said that the new president faces a difficult task,as there are no funds to back up the promises of the candidates.
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Promoting U.S.-Ukraine business relations & investment since 1995.
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5.  LONDON AGRIBUSINESS COMPANY BATTLES HOSTILE ENVIRONMENT IN UKRAINE
Fails to secure a $10 million VAT reimbursement on imported goods

By Graham Stack, Bne Media Ltd., Berlin, Germany, March 4, 2010

KYIV - Ukraine and agriculture should be a no-brainer, given the country's large swathes of famously fertile soil and its close proximity to Europe. The problem is the institutions. The financial results published March 1 from London-listed Landkom reveal just how hostile an environment Ukraine can be for the unwary.

Landkom's pre-tax loss of $27.2m for the first 10 months of 2009 - the financial reporting date was brought forward to October 31 from December 31 in order to better match the cropping cycle with the financial reporting cycle was further exacerbated by two disasters that have cost the company millions and illustrate the difficulties of operating in Ukraine.

NO VAT REIMBURSEMENT OF $10 MILLION
The first major blow was the failure to secure a $10m VAT reimbursement on imported goods from the Ukrainian government. Landkom is only one of many companies to have suffered from the reluctance of Ukraine's cash-strapped government to reimburse VAT. The state currently owes an estimated $3bn in VAT refunds to companies, especially exporters, which it is more or less openly refusing to pay.

One of the country's largest metal companies, MMK Ilyich, has even threatened to send its 27,000 workforce home unpaid if the government doesn't return $12m in VAT refunds it owes the company.

The issue raises questions about Ukraine's investment climate. When the news first broke of Landkom's difficulties with VAT reimbursement last year, a company press release added that "Landkom is alarmed at the permanent interest of the police, [Security Service of Ukraine], Prosecutor General's Office, frequent checks and demands to show private, financial, economic and labour documents."

Charismatic founder and former CEO, Richard Spinks, was quoted as saying that tax inspectors simply laughed at his refund request, saying the government had no money. Now the company has written off the sum in its 2009 accounts. According to a company statement, "although the Group intends to continue to seek reimbursement of the VAT, given the financial and political situation in the country, prudence dictates that there is a write-down of this receivable."

The new management under Vitaly Skotsyk is reluctant to take up swords with the government over the issue, preferring to put the blame on the previous management team. Its track record indeed left a lot to be desired, recording pre-tax losses of $53.3m in 2008 before being replaced in 2009.

The situation with Landkom, however, is worse than the government's general refusal to refund VAT, because in Landkom's case, the government doesn't even acknowledge most of the debt.

According to Skotsyk, the former management was caught out by a change in the VAT rules, rather than singled out for rough treatment. "The company at that time was not even registered in the state's VAT system," Skotsyk tells bne.

Up to four years ago, imported agricultural machinery booked as capital assets was not liable for VAT, and management should have seen that this exemption was abolished, just as the company was importing masses of modern Western equipment in its investment phase following the 2007 IPO on London's Alternative Investment Market.

"Our aim is now to return Landkom to the VAT system and then return the debt to Landkom. It is highly unlikely to be paid in cash, but could be offset against other taxes," hopes Skotsyk.

The general conclusion, Skotsyk says, is "that you need local knowledge to operate in Ukraine. Most problems faced by Landkom have been caused by the fact that it is the only 100% foreign-owned company in Ukrainian agriculture and also had 100% foreign management." The main problem has thus been "misunderstanding" the situation.

"I have never had problems with VAT," says Skotsyk, who previously headed Amaco, one of the largest suppliers of agricultural machinery and inputs in the CIS. "It's just a case of knowing the right people and what to do."

According to CFO Richard Pickup, there was a conscious decision on the part of board to choose a Ukrainian CEO this time round to replace former RAF pilot Spinks. Skotsyk's background in Ukrainian agriculture means he is well connected in the corridors of power.

However, he himself admits that the current political mess means even good connections do not always help. Landkom as a London-listed company is additionally disadvantaged by its refusal to pay bribes to have VAT reimbursed, although "this might speed up the process," says Pickup. "We are not at the top of the queue."

LOST CONTROL OF 5,000 HECTARES OF LAND 
The VAT debacle wasn't the only disaster. The company's accounts published March 1 also exclude from its landbank 5,000 hectares (ha) of fields previously claimed by Landkom, because the company has lost control of them. This includes 3,000 ha of fields planted with winter crops in 2009, about one-eighth of the total area sown.

The issue touches on another institutional shortcoming: Ukraine has declared a moratorium on the sale of agricultural land initially privatized to villagers in the 1990s. This means agricultural companies have to lease land from individual small freeholders, with leases seldom running for more than 15 years, which is a huge handicap when it comes to raising capital and making investments.

Apparently, the former Landkom management was conned by an individual who had accumulated a large number of leases and agreed to hand them to Landkom. A combination of leaky paperwork and bad faith mean that the individual is now demanding extra payment to continue the arrangement after Landkom has already planted the fields.

Skotskyk again blames former management. "I cannot understand how the company planted this land two years in succession while legally not having anything to do with the land. This was just gambling." At the same time, he says that Landkom is "using all tools" to show the individual in question that the company is serious about having the land returned to them, and puts the chances of returning the land at 80%.

Regarding the land sale moratorium, Skotsyk is pessimistic about the prospects of it being lifted any time soon. Newly-elected President Viktor Yanukovych and Prime Minister Yulia Tymoshenko both spoke out against its removal during their recent bitterly contested presidential race, and there is a majority against its removal in parliament.

But for Landkom this may even be a blessing in disguise. "We don't currently have the money to buy out our land," says Skotsyk, "but there are other people who do."

Landkom produces chiefly rapeseed oil for export to Europe where it is processed into biofuel. A bright spark on the horizon for Landkom is new Ukrainian legislation stimulating domestic biofuel production, of which Skotsyk was one of the initiators. Ukraine imports most of its fuel needs, and the government is looking for ways of changing this for the sake of energy security. "This is a huge difference in strategy," he argues.

Alongside a number of tax preferences, the new legislation effective as of January 1, 2010, sees Ukraine's petrol producers obliged to mix 1% of bio-ethanol in their product, with the proportion set to increase by 1.5% each successive year. "This is the crucial thing," says Skotsyk. "You can imagine what this means in terms of volume."

Landkom is not intending to set up its own bioethanol production facilities yet, although Skotsyk has business partners with experience of such. "First of all we need to establish normal operations at Landkom, and then this will be the following step," he says.
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6.  IMF READY TO BACK UKRAINE'S EFFORTS AIMED AT ECONOMIC GROWTH

Interfax Ukraine News, Kyiv, Ukraine, Fri, March 13, 2010
KYIV - The International Monetary Fund (IMF) is ready to support Ukraine's efforts aimed at economic growth, IMF Resident Representative in Ukraine Max Alier said after meeting with Vice Premier Sergiy Tigipko on Friday.

"We had fruitful discussions on the government's economic policy priorities for 2010, which includes re-engagement with the Fund. Mr. Tigipko requested an IMF mission to resume policy discussions. I indicated that the Fund stands ready to support Ukraine in its endeavor to return to a sustainable growth path, and that I will relay the request for a mission to our headquarters, and consult on next steps," he said.

The press release says that "in the meantime as part of our preparatory work, an IMF staff team will visit Kyiv next week to join the Resident Representative office in technical meetings on the budget."

As reported, the IMF in autumn 2008 decided to disburse about $17 billion under the SBA. Since then, Ukraine has already received three tranches worth almost $11 billion.

The allocation of the fourth tranche, worth $3.8 billion, was scheduled for November 2009 following the third review of the IMF's cooperation program with Ukraine. The IMF mission ended its work in Kyiv late in October 2009, but did not issue a positive statement on the completion of the review. The IMF said repeatedly that it expected a consolidated position from the Ukrainian authorities in the question of implementing anti-crisis measures.

Speaking at a press conference in Washington on January 14, 2010, IMF Managing Director Dominique Strauss-Kahn stressed the possibility of resuming cooperation with Ukraine under the Stand-By Arrangement (SBA) after the presidential election in Ukraine was over.

Prime Minister Mykola Azarov has already ordered Finance Minister Fedir Yaroshenko to urgently draft the state budget for 2010 and said that it should be tabled in parliament by April 11.
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7.  TAXATION OF FOREIGN INDIVIDUALS IN UKRAINE -
IMPORTANT NEW DEVELOPMENT

KPMG News Flash, Kyiv, Ukraine, Thu, March 11, 2010

KYIV - Taxation of Foreign Individuals in Ukraine - Important New Development:

[1]  At the end of December 2009, the Ukrainian tax authorities released Letter No. 28593/7/17-0717 dated 23 December (the "Letter"), pursuant to which the tax authorities indicated their view that the 15% personal income tax rate should apply to salaries only starting from the month in which the foreign individual receives a tax residency certificate (the "Certificate") as issued by the Ukrainian tax authorities. (Please see our News Flash dated January 15, 2010, for a more detailed description of the Letter.)

[2]  The Letter represented a sudden and significant change from prior practice, and was subject to a significant level of queries and challenges from the Ukrainian business community.

[3]  We are now advised that on or about 5 March 2010 the State Tax Administration has cancelled the Letter. While the details of the cancellation order are not yet available, this appears to be a positive development.  Most immediately, this implies that determination of Ukrainian tax residency is to be made solely by the Law of Ukraine "On Personal Income Tax." 

This in turn should mean that, if an individual receives employment income from a Ukrainian payroll and such individual satisfies and is prepared to substantiate (e.g., pursuant to maintaining appropriate documentary support) the criteria for claiming Ukrainian tax residency (e.g., pursuant to the number of days of the calendar year spent in Ukraine, their "center of vital interests," etc.), then such individual should be eligible for the 15% resident (as opposed to the 30% non-resident) tax rate without the necessity of obtaining a Certificate.

[4]  Notwithstanding the above, it currently is not clear what the tax authorities' approach regarding the requirements and implications for obtaining Certificates will be on a go-forward basis.  We look forward to providing further updates as the details of the cancellation order become available and/or there are further clarifications or developments. 

In the meantime, should your organization have concerns or questions regarding these or other tax or legal issues, we are available to assist and would welcome being contacted.   

CONTACT: Rob Shantz, Partner, Tax and Legal, Tel. +38(044) 490 55 07, Fax. +38(044) 492 82 98, RShantz@kpmg.ua; Sergey Popov, Partner, Tax and Legal, Tel. +38(044) 490 55 07, Fax. +38(044) 492 96 81; SPopov@kpmg.ua; Lena Sapko, Manager, Tax and Legal, Tel. +38(044) 490 55 07 Fax. +38(044) 492 82 98, LSapko@kpmg.ua.

NOTE: KPMG-Ukraine Ltd., is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.    
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8.  TAXATION OF NON-RESIDENT'S INCOME IN UKRAINE

Human Capital News, Ernst & Young, Kyiv, Ukraine, March 9, 2010

KYIV - Taxation of Non-Resident's Income in Ukraine: Further to our previous newsletters, in which we informed you about the new practical approach of the Ukrainian Tax Authorities towards taxation of foreign individuals’ income in Ukraine, we are pleased to provide you with the update on the status of the issue.

After having received numerous queries from representatives of the Ukrainian business community regarding contradicting provisions of the Overview letter #28593/7/17-0717 of 23 December 2009, the State Tax Administration of Ukraine cancelled its Overview letter on 5 March 2010 (as soon as the full text and details of the respective document are available, we will be pleased to share them with you).

Termination of the Overview letter means that determination of the Ukrainian tax residence status, as well as rules of taxation of foreigners’ income in Ukraine will further be regulated solely by the Law of Ukraine "On Personal Income Tax" # 889 of 22 May 2003.

Moreover, the STAU acknowledges the necessity to introduce respective amendments to the Personal Income Tax Law.
We will definitely keep you updated on the status of the issue regarding taxation of foreign individuals’ income in Ukraine, as well as any respective changes in Ukrainian law.

CONTACT: Ernst & Young LLC, Mykhailivska Street 7 | 01001 Kyiv | Ukraine, Phone: +380 (44) 490 3000, Fax: +380 (44) 490 3030, Website: www.ey.com/ukraine.

NOTE:  Ernst & Young is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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9.  LEADING CULINARY COMPANY IN UKRAINE SOLD TO NESTLE  
Baker & McKenzie Advises on Sale of  Technocom in Ukraine

Baker & McKenzie, Kyiv, Ukraine, Fri, Feb 26, 2010

KYIV - Baker & McKenzie advised on the sale of 100% of the participation interest in LLC Technocom, Ukraine's market leader in instant noodles, instant mashed potato, ready-to-eat soups and dehydrated seasonings under the Mivina brand, to Nestle S.A.

The value of the transaction is non-disclosable. LLC Technocom was founded in 1993 and has two factories in Kharkov (north-east Ukraine). With 1,900 employees, LLC Technocom has a turnover of around USD100 million and exports its products to 20 countries including Russia, the Baltic States, Hungary, Germany, Israel, Poland and Romania. 

The joint Baker & McKenzie team was led by a partner Viacheslav Yakymchuk in Kyiv with input from associates Olha Demianiuk, Olena Kuchynska, Oksana Vynarchyk in Kyiv, and Robert Hewitt in London.

Commenting on the transaction, Mr. Yakymchuk said: "We are very pleased to advise the client on such a milestone transaction, as it is the first deal of this size after the economic crisis came into Ukraine. Notwithstanding the current difficulties, we see a growing interest in Ukrainian food market, being a lucrative target for international investors."

CONTACT: Viacheslav Yakymchuk, Partner, +380 44 590 010, viacheslav.yakymchuk@bakernet.com; Oksana Buchatska, Marketing and PR Coordinator, +380 44 590 0101; oksana.buchatska@bakernet.com.

About Baker & McKenzie: Founded in 1949, Baker & McKenzie provides sophisticated advice and legal services to many of the world's most dynamic and successful organizations through more than 3,900 locally qualified lawyers and 5,800 professional staff in 67 offices and 39 countries. Baker & McKenzie - CIS, Limited, Renaissance Business Center, 24 Vorovskoho St., Kyiv 01054, Ukraine, www.bakermckenzie.com

NOTE:  Baker & McKenzie is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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10.  UKRAINIAN PARLIAMENT APPROVES NEW CABINET OF MINISTERS

Stepan Smyshliaev, Ukrainian News Agency, Kyiv, Ukraine, Thu, Mar 11, 2010 

KYIV - The Verkhovna Rada approved staff of the Cabinet of Ministers led by Prime Minister Mykola Azarov. The new government composition was voted in by 240 members of parliament, when 226 votes are enough for passage. In particular they appointed:

[1]    Prime Minister Mykola Azarov, MP of the Party of Regions faction;
[2]    First Vice Prime Minister Andrii Kliuyev, MP of the Party of Regions faction;
[3]    Vice Prime Minister Borys Kolesnykov, MP of the Party of Regions faction;
[4]    Vice Prime Minister Volodymyr Seminozhenko, from May 2001 to November 2002 Vice Prime Minister for Humanitarian Affairs, headed the Party of Regions until April 2003, from October 2006 to December 2007 was advisor in the Cabinet of Ministers led by then prime minister Viktor Yanukovych;
[5]    Vice Prime Minister Volodymyr Syvkovych, MP of the Party of Regions faction;
[6]    Vice Prime Minister Viktor Slauta, MP of the Party of Regions faction;
[7]    Vice Prime Minister Serhii Tihipko, the leader of Strong Ukraine party, former governor of the National Bank of Ukraine;
[8]    Vice Prime Minister Viktor Tikhonov, MP of the Party of Regions faction;
[9]    Environmental Protection Minister Viktor Boiko, MP of the People's Party at the Verkhovna Rada of 4th convocation;
[10]   Fuel and Energy Minister Yurii Boiko, MP of the Party of Regions faction;
[11]  Transport and Communications Minister Kostiantyn Yefymenko, director of the state concern UkrTransHaz since March 2009;
[12]  Industrial Policy Minister Dmytro Kolesnykov, MP of the Party of Regions faction;
[13]  Culture and Tourism Minister Mykhailo Kuliniaka, deputy minister of culture and tourism;
[14]  Justice Minister Oleksandr Lavrynovych, first deputy parliament speaker;
[15]  Healthcare Minister Zynovii Mytnik, deputy minister of healthcare;
[16]  Interior Affairs Minister Anatolii Mohiliov, former head of the interior affairs ministry's main directorate in Crimea;
[17]  Labour and Social Policy Minister Vasyl Nadraha, Employers Federation Director-General since June 2009;
[18]  Housing and Utilities Minister Oleksandr Popov, MP of the Party of Regions faction;
[19]  Agricultural Policy Minister Mykola Prysiazhniuk, MP of the Party of Regions faction;
[20]  Family, Youth, and Sports Minister Ravil Safiullin, MP of the Party of Regions faction;
[21]  Science and Education Minister Dmytro Tabachnyk, MP of the Party of Regions faction, former vice prime minister;
[22]  Minister of the Cabinet of Ministers Anatolii Tolstoukhov, MP of the Party of Regions faction, former minister of the Cabinet of Ministers;
[23]  Economy Minister Vasyl Tsushko, former minister of interior affairs;
[24]  Finance Minister Fedir Yaroshenko, deputy head of the State Tax Administration;
[25]  Regional Development and Construction Minister Volodymyr Yatsuba, MP of the Party of Regions faction;
[26]  Coal Industry Minister Yurii Yaschenko, first deputy chairman of the national agency for the affairs of ensuring effective use of energy sources;
[27]  Minister of Emergencies and Affairs of Population Protection from the Consequences of the Chornobyl Catastrophe Nestor Shufrych, MP of the Party of Regions faction, former emergencies minister;
[28]  Defence Minister Mykhailo Yezhel, deputy minister of defense / naval forces commander from 1996 to 2001, and the naval forces commander-in-chief from 2001 to 2003;
[29]  Foreign Affairs Minister Kostiantyn Hryschenko, Ukraine's Ambassador to Russia since June 2008.

As Ukrainian News earlier reported, parliamentary factions of the Party of Regions, the Communist Party of Ukraine, and of the Lytvyn Bloc and separate members of parliament formed the Verkhovna Rada coalition of 235 lawmakers.
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