Welcome to the U.S.-Ukraine Business Council

U.S.-Ukraine Business Council (USUBC)
Kyiv, Ukraine, Monday, February 4, 2008

KYIV - Hryhoriy Nemyrya, Vice-Prime Minister of Ukraine, addressed an
overflow crowd of members and guests of the U.S.-Ukraine Business
Council (USUBC) in Kyiv on Thursday, January 31, with a vivid description
of changes that have already been made during the first few weeks of the
Yulia Tymoshenko government.

This was Nemyrya's debut performance before any business organization
since becoming one of two vice prime ministers and a leading player in the
new government's Westward-looking reform program.

Nemyrya emphasized the immense opportunities that lie ahead as soon as the World Trade Organization board approves Ukraine's membership application and parliament ratifies the agreement. WTO approval is expected on Feb. 5, with parliamentary approval expected before the end of February.

WTO accession, as important as it is, is only a precursor to the next step
that is thought by many to be of greater importance to Ukraine's economic

Nemyrya said that preparations have already been made for the beginning of negotiations of an EU-Ukraine Free Trade Agreement and that he expects EU Trade Commissioner Peter Mandelson to visit Kyiv to kick off the
negotiations in March.

Nemyrya cautioned, however, that in spite of the early progress that appears possible with the EU's help, it would take at least two years to negotiate the treaty.

Nemyrya pointed to the guiding principles encapsulated in the Tymoshenko
Transparency Initiative as not just words on paper but an actual plan of
work that the government takes very seriously and is pursuing very

As a part of this effort to run an entirely open and transparent government,
Nemyrya will head the Government Committee for European and International Integration. "If we're serious about going global, we have to be predictable and reliable partners," Nemyrya added.

The vice prime minister pointed to the very recent disbursal of some sizable
payments in VAT refunds as a example of the way the government want to
not only deliver on its promises but to do so in an expeditious fashion. He
said new procedures are being implemented that should soon significantly
reduce the huge VAT refund backlogs, over $250 million, suffered by
USUBC members.

He also pointed to RosUkrEnergo, the controversial intermediary that now
deals with Ukraine's natural gas supplies from Russia, as an example of
an unnecessary and possibly corrupt structure that must be swept aside.

Nemyrya spent over an hour answering questions from a considerable
number of USUBC members and guests on issues such as tax reform;
restrictive grain export quotas; customs regulations and delays; business
partnerships with international energy companies; land privatization;
corporate raidership; intellectual property rights for IT, agricultural
seed/crop protection companies, and pharmaceutical companies;
reform of the legal and court system and the major government
reorganization needed for effective decision making and for the
implementation of policies and programs.

He emphasized the government is doing everything possible to solve
problems rapidly and fairly and to implement new business reforms.

However, in response to a member's question about the government's ability to help business and industry deal with the problems that might be caused in complying with new WTO regulations, Nemyrya admitted the government has a long way to go.

"We fear agencies and ministries are not ready to deal with WTO. We will
try to improve their skills and capabilities to deal with all the issues.
The whole challenge is one of compatibility."

The VPM was asked what the new government planned to do about the
Overseas Private Investment Corporation (OPIC), a major business
development agency of the U.S. government, being closed for Ukraine
because of a rather small claim that has not been settled by the Ukrainian
government since 1999.

Nemyrya said he was fully aware of the situation and expected the problem
to be resolved soon. When questioned by USUBC president Morgan
Williams as to whether 'soon' meant within 90 days Nemyrya said he
expected the issue to be resolved within that time period.

The VPM outlined the important role he thinks the new investors council
to be appointed by Prime Minister Tymoshenko will play. He asked the
USUBC and AmCham to recommend members for the council and to
support the secretariat needed for the council to be effective.

USUBC President Williams said he believed Nemyrya's appearance marked
an excellent beginning to hopefully a new era of cooperation between
Ukrainian governments and the international business community.

"The USUBC believes that Hryhoriy Nemyrya is an excellent choice for
VPM in the new government. With him at the prime minister's side,
there is an extremely competent official, who is well known in the
international business community, to help deal with important issues,"
Williams said.

Williams thanked Jorge Zukoski, president of the American Chamber of
Commerce in Ukraine (AmCham) for attending along with Jim Hitch,
Partner, Baker & McKenzie law firm, a new member of USUBC, who
serves as chairman of the AmCham board. "USUBC and AmCham's joint
efforts should increase the business communities ability to make a positive
impact on Ukraine's future," he added.

Members and guests of USUBC who attended the meeting included: AES;
Baker & McKenzie; Bechtel; Bunge; Business Ukraine; Cargill; Capital
Partners; CFC Consulting; Chadbourne & Parke, Citi; Deloitte & Touche;
Deutsche Bank; DHL; Dipol Chemical International; Eli Lilly; Horizon
Capital; IBM; IETG; Kraft; Kyiv-Atlantic Ukraine; Kyiv Post; Marathon;
Max-Well; NDI; PBN; RULG; Salans; Shell; SigmaBleyzer; Softline; Squire,
Sanders & Dempsey; Toepfer/ADM; The Bleyzer Foundation; UMBRA;
CRDF; Ukrainian Weekly; US-Ukraine Foundation; U.S. Department of
Justice, U.S Treasury Department, U.S. Department of Commerce, U.S.
Embassy, USAID, Westinghouse, Vanco and Volia Cable.

The USUBC meeting was held in the conference room of the new corporate
offices of the SigmaBleyzer Emerging Markets Private Equity Investment
Group located in the Mandarin Plaza in Kyiv.

Click here to see the photos from this event