Business in Ukraine

The Cabinet of Ministers of Ukraine believes it is necessary to draft a mechanism for supporting solvent demand for housing in Ukraine, Prime Minister Yulia Tymoshenko has said.

“A mechanism should be drafted to support solvent demand [for housing],” she said at a council on Nov.11.

Tymoshenko said that the government at a meeting on Monday passed a draft resolution aimed at tackling the crisis in the construction industry and relieving the burden on builders through the removal of charges of all types.

She said that the local authorities are currently charging around 50% in taxes on each square meter of housing. The premier noted that the removal of all “supernatural fees” would help decrease the prime cost of housing.

Tymoshenko also stressed the need to take all measures to facilitate regulatory procedures in the construction sector.

“We improved this mechanism yesterday and submitted it to the parliament,” she said.

Tags: Building Industry by Vitaliy Tretyakov
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Zaporizhstal Integrated Iron & Steel Works JSC is one of the largest industrial enterprises in Ukraine, which products - HRC and CRC ( hot rolled coils and cold rolled coils ) - are well known and are in demand among customers at the domestic market and in many countries of the world.

The Works produces high quality hot-rolled and cold-rolled carbon, low-alloy, alloy and stainless steel products 0.5 to 8.0 mm thick. Main consumers of the Works’ products are welded tube producers, automotive, machine-building, agricultural, transport engineering industries, producers of domestic appliances. The Works holds a stable position in the market moving up the list of major steel producers.

Zaporizhstal JSC is primarily concentrated on development of new markets and mastering of new product types and improvement of its positive image, expansion of Zaporizhstal market share. The foundation of success lies in strict adherence to and consistent perfection of manufacturing processes, high product quality and strict fulfillment of contractual commitments, orientation to the needs of the market and proficient integration of market control mechanisms.

The international acknowledgement of Zaporizhstal in the business world is confirmed by many international awards and certificates.

Certification of Zaporizhstal JSC

At Zaporizhstal JSC special attention is drawn to the product quality aspect. Quality of the supplied raw materials, the shipped products and the compliance with manufacturing processes are controlled. The high quality of the Works? steel products is affirmed by TUV Nord Certificates certifying that hot rolled products 3.0-6.0 mm thick in sheets and coils of steel grades St.2 ps and St.3 ps correspond to the standards EN 10025, EN 10207, DIN 17100, DIN 17172.

Starting from 01.05.2003 the TQM System has been implemented at Zaporizhstal JSC, corresponding to the requirements of international standards ISO 9001:2000.

In October the Works successfully passed the certification audit of the TQM System under ISO standards 9001:2000 carried out by the German supervising society TUV NORD.

Mr. A.J.Putnoki, 1st Deputy Chairman of the Board, Technical Director, has been appointed representative of the management for quality.

The Works? specialists have made use of the experience of working out of similar systems at metallurgical enterprises of Ukraine and the CIS. The work on preparation for certification was done with consulting support from ” TUV Nord Ukraine “.

Special attention was given to training of the personnel and making out of the necessary documentation. 81 standards of the Works were worked out, 21 of which were prepared for the first time. The processes connected with consumers are determined and documented. A uniform order of estimation and choice of suppliers is established. Incoming control requirements are determined more precisely. The required traceability of the products is provided.

A group of internal auditors has been trained at the Personnel Training Centre of the Ukrainian association of quality.

Within the framework of the TQM System consumers, suppliers and personnel regularly fill in questionnaires. The results of the analysis of the questionnaires are used to improve the quality of the products and the TQM System.

A technical re-equipment programme up to 2010 has been worked out at the Works. The provided measures are aimed first of all at the improvement of quality and the competitiveness of the products, replacement of fixed assets, use of the newest technologies, widening of the range of products, protection of the environment and saving of raw materials and power resources.

Fulfilment of the planned measures and constant improvement of the TQM System is considered a pledge of the consumer?s satisfaction and increases the competitiveness of the products.

The creation of the TQM System at Zaporizhstal JSC corresponding to the requirements of international standards ISO, series 9000, is the first step on the path to the achievement of the concept of total quality management (TQM) at the Works.

Tags: Steel sector enterprises by Vitaliy Tretyakov
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Nadra Bank today is a universal national commercial Bank. Every day the professional team of Nadra Bank works to make the Bank better, even closer to each client. Nadra Bank is the first Bank, which pleasantly surprises by its openness and accessibility.

Nadra Bank’s logo is essentially different from official and austere logos of other banks. Stylized red flower – is a collective image of favorite Ukrainian flowers - mallow, poppy and marigold. In Ukrainian folk symbolism these flowers signify love to native country and its people, longevity and mystery of life. Opened flower means life, prosperity, openness, warmth of soul and friendly smile. It is a symbol of openness and accessibility of a truly Ukrainian bank for every client. It represents active growth, prosperity and perennial youth.

Today Nadra Bank offers innovative approach to solving any financial need of its clients, tries not only to provide high-quality banking solutions, but to give as much positive emotions to the clients as possible.

As part of large-scale rebrending we developed a number of new and unique products, which main advantages are – integrated approach, individual approach, prompt decision-making.

«Welcome!» service package is one of the first brainchildren of rebranding. Within this package the client may get the comprehensive range of services. Service package includes everything a client needs for effective use of monetary funds: current and accumulation accounts, deposit accounts, payment cards, overdrafts, standing orders. You can choose any service package suitable for you, depending on results you want to achieve. Any of these offers enables not only to save time, but also money with the help of transactions made via ATMs and information and payment terminals of the Bank.

Our customer service encompasses 700 branches in many Ukrainian cities, around 1000 ATMs, approximately 4500 multifunctional РОS-terminals, and contemporary Call center.

Nadra Bank is plastic cards market leader. Up to date we have issued around 7 million payment cards, which according to EMA rankings puts Nadra Bank into second place among Ukrainian financial institutions as to the number of issued cards.

International rating agency Moodу’s Investors Service has confirmed the long-term foreign currency deposit rating of Nadra Bank at B2 / “Stable” Outlook, long-term global local currency deposit rating at В1 / “Stable”, senior unsecured foreign currency debt rating - В1 / “Stable”, the national scale rating - Aа2.ua, bank financial strength rating at E + with a “Stable” outlook.

International rating company Standard and Poor’s assigned a long-term credit rating “В-“ (B minus) to Nadra Bank. Outlook is “Negative”.

International rating agency Fitch Ratings has confirmed ratings of Nadra Bank: a long-term foreign currency issuer’s default rating (IDR) at “ССС” with “Stable” Outlook, short-term foreign currency IDR “C”, individual rating “E”, a support rating “5”.

Special attention the Bank pays to its employees. Nadra Bank employs around 9 thousand of highly skilled professionals. The Bank developed unique internal programs of training, aimed at improvement of client servicing and professional development of employees.

Every day Nadra Bank works to become better and better. We want all changes at our Bank to meet the demands and expectations of our clients.

Nadra Bank Investments

Although the bank management has strategically decided to focus entirely on banking activities, it has also spotted that the shareholders value can be increased by investments in promising non-bank financial services and in real estate. As a consequence, the bank has set up a number of funds managed by independent Asset Management Companies (AMCs), which formulate investment and exit recommendations.

As a policy, the target IRR should be 25% plus. The target lifetime of an investment is expected to be several years.

The bank funds portfolio currently includes companies in consumer lending, risk insurance, leasing, life assurance.

All portfolio companies are run independently. However, the Bank cooperates in cross selling of products both through the bank branch network and through the branch networks of the companies. All cooperation is done on arm’s-length basis on the market conditions. This approach essentially increases value for both the Bank and its customers.

Nadra Bank History

2007

As part of large-scale rebranding in Nadra Bank were developed and implemented new, integrated products: Autopack «All Inclusive», Personal Loan Pack «We are Ready for Everything», «For My Family» deposits, Loan Pack «Housing Solutions».

Loan pack “Housing Solutions” won an award at All-Ukrainian “Bank of the Year - 2007” Awards in nomination “Hypothecation of the Year” and Autopack “All Inclusive” reached the second place in nomination “Banking Product of the Year”.

Based on voting results among the consumers the Bank won the ranking contest «Ukrainian Brand of the Year - 2007» in nomination «New Image» of «Services» category.

As part of rebranding Nadra Bank changed the look of 100 selling sites according to new style.

Ministry of Health of Ukraine, Nadra Bank and All-Ukrainian Charity Fund «Children’s World» sign Memorandum on cooperation in charity program «Healthy Children in Happy Country ».

Nadra Bank substantially strengthens its position among leading Ukrainian banks: according to the National Bank of Ukraine the Bank belongs to 5 biggest national financial institutions according to such indicators as net profit and total increment of assets.

International ranking agency Moody’s Investors Service improves Nadra Bank’s rating on national scale: depositary rating in national currency – В2/ “Positive”, depositary rating in national currency – Ва3/”Positive”, rating of unsecured liabilities in foreign currency - Ва3/”Positive”, rating on national scale – Аа1.ua/”Positive”, financial strength rating – Е+ with forecast “Positive”.

In 2007 Nadra Bank starts cooperation with international ranking company Standard & Poor’s. In January of 2008 agency assigned Nadra Bank a credit rating “B”. Rating forecast – “Stable”.

Nadra Bank’s rating is confirmed by Fitch Ratings ranking agency: long-term issuer default rating (IDR) “B”, short-term “B”, individual rating “D/E”, back up rating “5” and back up level of long-term IDR “B”. Also Fitch changes its forecast on long-term IDR from «Stable» to «Positive».

Nadra Bank signs credit agreement to draw down a third participation loan from foreign banks for 85 million US dollars. It is the first participation loan in the history of the Bank, which contains a two-year tranche.

Nadra Bank completes floatation of 3-year Eurobonds for 175 million US dollars.

Nadra Bank signs a credit agreement to draw down a fourth participation loan from foreign banks in the amount of 130 million US dollars.

Nadra Bank signs subsidiary credit agreement with OJSC “Ukreximbank” as part of IBRD project “Second project of export development”.

Nadra Bank signs credit agreement with the Ministry of Finance of Ukraine as part of World Bank project “Enlarged Access to Financial Services Markets”, which objective is the development of financial-crediting market infrastructure in the countryside.

2006

Nadra Bank Signs UN Global Treaty and joins international initiative on business’ social responsibility support. The Bank founds All-Ukrainian Charity Fund «Children’s World».

World Bank and the Ministry of Finance of Ukraine approve the participation of OJSC CB «Nadra» in the project « Enlarged Access to Financial Services Markets».

Nadra Bank announces the start of large-scale rebranding, as part of which new integrated programs are implemented - «Welcome!» tariff package and Real Credit Card «45 days of loan with no interests».

Private floatation of Nadra Bank’s shares among foreign investment funds took place. The price of shares based on the results of floatation reached 19 US dollars. Total block of shares, owned by international investment funds, amounts to around 7.7%.

2005

Nadra Bank is placed first under VISA credit cards issue within CIS and Eastern European countries. Start of the restructuring process for organizational structure to facilitate client-oriented bank’s business philosophy and to be in compliance with the best international banking practice. Nadra Bank is the first Ukrainian bank that signed the Credit Guarantee Facility with US EXIM Bank. Debut syndicated (from foreign banks) unsecured loan facility in the amount of US$32 million with the lowest interest rate is recorded in Ukraine. Completion of debut US$ 100 million 3-year Eurobond issue with the lowest spread rate ever mentioned in the history of Ukrainian commercial banks entering the Eurobond market.

The Commodity Credit Corporation (CCC) establishes US$5.3 credit limit OJSB CB Nadra Bank for sales of U.S. agricultural commodities (GSM-102 guarantee program). Completion of the 8th share issue. Thus total capital amounts to US$ 146 mln.

2004

Nadra Bank is a well-known and reliable financial institution cooperating with export credit agencies. It broadens the spectrum for the Ukrainian import financing in line with a growing demand from customers and is approved by Austrian, Belgian, Danish and Dutch ECAs. By the end of the year, the Bank has issued over 2 million electronic cards. A new share issue is been successfully completed.

In 2004, the Bank starts issuing credit cards in partnership with the European Travel Network international discount company (ETN) and DC cosmetics store network (DC-Ukraine). It was the first time the Bank has launched a program for repayment of funds from manufacturers to a Your Money Maestro card.

2003

The Bank’s international business increases, as did the number of its credit lines and the number of its trade finance transactions. The Bank collaborated with the German bank AKA Ausfuhrkredit-Gesellschaft m.b.H. (AKA) to provide long-term export finance to Ukraine. The Bank also signs Euler Hermes Credit Facility Agreement with AKA.

Following the successful implementation of the development of the branch network and the regional outlets, the Bank is represented in every Ukrainian oblast and issues about one million electronic cards and. Moody’s upgrades the Bank’s rating to Ukraine’s country rating ceiling of “B2” from “B3” which is accompanied by the country’s sovereign rating.

2002

In 2002, Commerzbank AG and Hermes Insurance Company start working with the Bank on a program for long-term financing of German exports to Ukraine. As part of a diversification of its activities, the Bank obtains a NBU license to import and trade precious metals and Moody’s upgrades the Bank’s rating to Ukraine’s country rating ceiling of “B3” – the highest one for Ukraine. The Bank obtains approvals from German, Italian and Hungarian official export credit agencies and the Export-Import Bank of the USA (USExim). The Bank also becomes the leading Ukrainian bank for EBRD and IBRD credit lines.

The Association of Ukrainian Banks (the AUB) and the members of the Europay International Payment System (EMA), rank the Bank among the top three Ukrainian banks (based on the number of Ukrainian electronic cards issued). The number of the Bank’s branches and outlets increases to 152.

2001

The Bank makes a significant breakthrough in the electronic cards market because the number of issued electronic cards exceeds 100,000 and it has over 60 ATMs.

The Bank acquires the right to make QuickPay money transfers via Western Union. The Bank also works on the EBRD micro financing program in Kharkiv and Kyiv. The Bank joins VISA International as a principal member. In the same year, the Bank enters into an agreement with Ria Telecommunications, Inc. for servicing international money transfers through the Ria Envia system, making the Bank one of the leaders in low-cost cross-border fund transfers.

The Bank becomes Ukraine’s first financial institution to be assigned “Caa3” long-term credit rating by Moody’s in 2001. The Bank continues to develop its international presence further when it was approved by EGAP, the official credit agency of the Czech Republic, and the Black Sea Trade and Development Bank chooses the Bank for its first credit line in Ukraine for pre-export financing. The Bank’s expansion into western and southern oblasts continues.

2000

The highest available rating for a business entity domiciled in Ukraine is assigned to the Bank by the international rating agencies, Thomson Financial BankWatch and FITCH IBCA. The Bank expands its regional services by entering into special cooperation agreements with the regional state authorities of the Sumy and Vinnytsya oblasts, which enables the Bank to start servicing various state-owned and municipal companies, institutions and organizations. In the same year the Bank took over two more banks, Kyiv-Pechersk Joint Stock Commercial Bank and Slobozhanschyna Joint Stock Commercial Bank. The Bank also opens a representative office in Budapest, Hungary. The Hungarian Export-Import Bank establishes limits for lending and for confirmation of documentary transactions. The Bank, together with three other Ukrainian banks, becomes a member of the EBRD Trade Facilities Program.

1999

In 1999, the Bank starts to develop its international presence. In an IMF pilot project, the Bank is assigned the highest rating of all the rated Ukrainian banks under the CAMEL system. The Bank becomes a member of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) and begins offering electronic payment services. The Bank also starts issuing Eurocard/MasterCard cards, as a principal member. The Bank joins the group of institutions-partners effecting money transfers within the Western Union International system. In the same year the Bank starts trading in Ukrainian Government foreign currency denominated bonds, a new financial instrument. The Bank was also one of the Ukrainian administrators of the credit lines provided by the European Commission (European Union Project TACIS EDUK 9602).

1993-1998

In 1998, the Bank obtains a credit line from EBRD aimed at supporting SMEs as well as a credit line from IBRD aimed at restructuring the coal mining industry. The Bank also begins to issue American Express electronic cards, as an associate member.

In 1997, the Bank changes its strategic goals entering into new markets and targeting customers from a broader range of industries.

In 1995, the Bank participates in the first merger in the Ukrainian banking industry when it acquired Luhansk Ugleprogress Joint Stock Bank.

On 26 October 1993, the Bank is registered as an open joint stock company commercial bank with the NBU (registry number 205) for an unlimited period of time focusing solely on the coal-mining industry. It also establishes correspondent relations with various foreign banks, including Deutsche Bank Trust Company America, Dresdner Bank AG and Commerzbank AG, which enabled it to conduct settlements in all of the major international currencies.

Tags: Banking System by Vitaliy Tretyakov
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Raiffeisen Bank Aval, an Open Joint Stock Company (”Bank Aval”), was registered as the “Joint Stock Commercial Bank Aval” on March 27, 1992 (operated under the brand name of Joint Stock Postal Pension Bank Aval until September 25, 2006). Since October 2005, the Bank has been part of the Raiffeisen International Bank Holding AG Group (as of January 1, 2008 the Group held 95.96% of shares in the Bank).

Raiffeisen Bank Aval continues to retain a leadership position among Ukrainian banks, as measured by total assets. As of the beginning of 2008, the Bank served a total of 4.1 million individual clients, 196 thousand SME clients and over 9 thousand corporate clients.

The Bank provides a broad range of standard and innovative banking services through its nationwide network which comprised, as of January 1, 2008, a total of 1,180 outlets located in big cities, provincial and community centres and villages throughout Ukraine.

The Bank has an effective management structure, based on a clear division into business lines (corporate, retail, SME and treasury) and supporting verticals (information technologies, operation support, accounts, controlling, security and other) both in the Bank’s Head-office and regional directorates. As a truly international bank, Raiffeisen Bank Aval clearly separates front-office functions from back-office ones to achieve higher quality of client service and enhance risk mitigation.

Through all these years, clients, partners, and banking experts have frequently recognized the high quality of Raiffeisen Bank Aval’s performance. In particular, during the international festival contest The Choice of the Year the Bank was awarded prizes in the nominations Mortgage Programme 2007 and Deposit Programme 2007.

In 2007, the Bank also won the MasterCard Bank of the Year contest in Ukraine. Raiffeisen Bank Aval was recognized among the best in the nominations Mortgage of the Year and Banking Product of the Year. The all-Ukrainian rating programme Brand Guard 2007 named the Bank’s brand as the highest-valued among Ukraine banks.

The reputable UK-based magazine The Banker named Raiffeisen Bank Aval Ukraine’s best bank as part of its Awards for Excellence rating. At the same time, the European Bank for Reconstruction and Development has for the fourth consecutive year recognized Raiffeisen Bank Aval as Ukraine’s most active bank participating in the EBRD’s Trade Facilitation Programme (TPF).

To crown it all, Raiffeisen Bank Aval was recognized in 2007 as an employer that cares about its personnel and is committed to promoting their professional growth and social security. The Bank was named Ukraine’s best banking employer according to a survey commissioned by the Correspondent magazine and conducted by the Gfk Ukraine company. The Personnel Training magazine named the Bank as the Best Corporate Training Environment.

The Bank’s regional directorates have also been recognized among the best in their respective geographical areas.

Tags: Banking System by Vitaliy Tretyakov
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General Information

PrivatBank has many times been announced as “The Best Bank in Ukraine”
The Commercial bank PrivatBank was founded in 1992. Currently PrivatBank is one of the most dynamically developing Ukrainian banks and occupies leading positions in the national bank rating. As of October 1st, 2005, PrivatBank’s total net assets equaled UAH20,014 million. The statute fund of the bank comprised UAH1,130 million, and property assets were UAH1,918 million. The credit portfolio of the bank made UAH14. 948 billion, including credits to individuals totaling UAH5.5 billion. The financial result of PrivatBank for three quarters of 2005 totaled UAH345.685 million

At the end of 2005 Global Finance magazine, for the second year in a row, acknowledged PrivatBank as the Best bank in Ukraine. Global Finance also also acknowledged PrivatBank as the best bank in Ukraine in the annual nomination of The Best Emerging Market Bank 2005. Financial and analytic magazine The Banker, based on results of research conducted in 2000 and in 2002, gave the The Bank of the Year rank to PrivatBank. Another influential magazine, Euromoney, for four years in a row - in 1999, 2000, 2001, 2002, as well as 2005 - acknowledged PrivatBank as the best bank of Ukraine.

PrivatBank also is a leader among the Ukrainian commercial banks for number of clients: its services are used by more than 16% population of Ukraine population.

PrivatBank is a modern universal bank
Possessing a general license from  the National Bank of Ukraine for conducting bank transactions, PrivatBank carries a complete spectrum of bank services available in the domestic market for corporate and individual clients, in full accordance with international standards. The long-term interests of our clients are the main priorities of the bank. Our highly skilled team of specialists and personal managers carry the responsibility of providing high-quality services, which are timely and exactly meet all of our customers’ demands. Inculcating the new types of banking and constantly perfecting the complex of bank services, PrivatBank currently serves 306 thousand corporate clients and small businesses, and over 9.4 million individual accounts. As of October 1st, 2005 the amount of deposits from legal entities to PrivatBank comprised UAH6,583 million, including legal-entity deposit portfolio of UAH2,843. The amount of deposits from individual clients comprised UAH8.528 billion, the highest total among Ukrainian banks, including the individual-client deposit portfolio as UAH6,423 billion.

PrivatBank is the socially oriented bank
Successive policy of strengthening the bank’s stability and perfection servicing, PrivatBank considers it one of its priorities to develop the complex of hi-tech services to individual clients. At the moment, the bank offers more than 150 types of the most modern services, among which are account servicing, deposit operations, plastic card products, numerous programs on the consumer crediting, partnership projects with leading Ukrainian and foreign companies (media, real-estate, mobile, autoproducers, etc). PrivatBank was empowered by the government of Ukraine to proceed payments of pensions and social assistance to citizens, as well as indemnification payments to the victims of Nazi pursuits. Today the pension and social payments via PrivatBank are made to over 1 million people.

The national service network
The national network of PrivatBank servicing, including 1,902 branches and offices all over Ukraine, allows any client to receive the highest level of banking services virtually anywhere in Ukraine. The wide range of PrivatBank’s foreign partners not only demonstrates its position as a competent participant of the world banking system but also, and most importantly, allows it to completely satisfy the necessities of the bank’s clients in their international activites. PrivatBank has tight relations with the largest foreign banks, co-operating with them in different segments of the financial market. PrivatBank is empowered to service credit lines of the World bank of reconstruction and development (MBRR), European bank of reconstruction and development (EBRR) and German-Ukrainian Fund (GUF) of assistance to small and middle businesses.

PrivatBank is the leader in presenting innovative bank services
PrivatBank is the acknowledged payment cards leader in Ukraine. The bank has issued more than 8.9 million plastic cards (36% of the total number of cards issued by Ukrainian banks). PrivatBank’s network of servicing plastic cards comprises 2,703 ATM’s, and PrivatBank’s cards are accepted by more than 16.6 thousand retail institutions all over Ukraine. The nation wide network of card product services allows PrivatBank to actively inculcate “salary card programs” of payments to employees of the bank’s corporate clients.
PrivatBank is also the leader in the market of services to individual clients. So, more than 40% of Ukrainian banks’ clients accept credit on domestic purchases via the credit programs of PrivatBank. 27.8% of total clients choose Privatbank’s deposit programs, and more than 26% of clients perform the currency exchange operations in the bank. Almost 21% of the clients of all Ukrainian banks’ choose PrivatBank while opening accounts and more than 15% utilize PrivatBank’s services for money transfers.

PrivatBank is a team of highly skilled specialists
Reliability and quality of bank transactions depends in a great deal on the experience and competence of its specialists. Today the personnel of PrivatBank have a team of highly skilled specialists which is able to solve the most intricate problems in a timely manner, and satisfy the growing necessities of bank services clients. Right now, more than 23 thousand employees work at PrivatBank, including 2,400 specialists at its head office. The average age of the employees of the bank is 34 years. Most employees of PrivatBank (75%) have higher education, to meet the requirements of their positions. PrivatBank makes it very easy for its employees to upgrade their education (including high school and secondary education), more than 50% employees are annually promoted.

Bank Requisites

The closed joint-stock company the commercial bank “PrivatBank”

Address:  Naberezhna Pobedy Street, 50, Dnipropetrovsk, 49094, Ukraine

K/S 32009100400 in UNBU in the Dnipropetrovsk region
MFO 305299
EGRPOU 14360570
YNN 143605704021, certificate No40374554

PrivatBank was registered at National Bank of Ukraine’s ”Book Of Banks’ Registering” under No 92 on March 19, 1992, the Bank license No 22 dated December 4, 2001.

Enquiry Telephones:

• 8 800 500 00 30 around the clock, free of charge throughout Ukraine
• (380) 562 390 000 for international calls
• 390 000 in Dnipropetrovsk

E-mails:

•  privatbank@pbank.com.ua
•  hotline@pbank.com.ua

SWIFT: PBANUA2X
SPRINT: PRIVAT/UKRPACK

Tags: Banking System by Vitaliy Tretyakov
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Regulation On cashless settlements in domestic currency in Ukraine (approved by the Resolution of the Board of the National Bank of Ukraine # 22 of 21.01.2004 and registered with the Ministry of Justice of Ukraine under # 377/8976 of 29.03.2004 (with amendments).

General rules, forms and standards of settlements for legal entities and natural persons and banks in monetary unit of Ukraine in the territory of Ukraine, accomplished with participation of banks shall be set by new version of the Regulation on the national currency cashless settlements in Ukraine (below - Regulation), which is approved by the Resolution of the Board of the National Bank of Ukraine # 22 of 21.01.2004 and registered with the Ministry of Justice of Ukraine under # 377/8976 of 29.03.2004.

Regulation On approval of changes to the Regulation on cashless settlements in domestic currency in Ukraine (approved on December 4, 2006 by Resolution # 236 of the Board of the National Bank of Ukraine of 18.10.2006, registered with the Ministry of Justice of Ukraine under # 1218/13092 of 20.11.2006 (published in the official Herald of Ukraine, 2006 # 47 of 04.12.2006, Article 3137).

Regulation On procedure of exercising by banks transactions with bills of credit in the national currency in the territory of Ukraine (approved by the Resolution of the Board of the National Bank of Ukraine # 508 of 16.12.2002 and registered with the Ministry of Justice of Ukraine under # 174/7495 of 29.02.2003).

On December 16, 2002 the Board of the National Bank of Ukraine adopted Resolution # 508, which approved the Regulation on procedure of exercising by banks transactions with bills of credit in the national currency in the territory of Ukraine (below - Regulation). The above-mentioned Resolution of the National Bank of Ukraine is registered with the Ministry of Justice of Ukraine under # 174/7495.

According to this Resolution, there became invalid the Regulation on banks transactions with bills of credit, approved by the Resolution of the Board of the National Bank of Ukraine under # 258 of 28.05.1999.

The necessity to develop and approve a new Regulation was caused by passing of the Law of Ukraine “On the bill circulation in Ukraine under # 2374-111 of April 5, 2001.

The Regulation shall set new rules and procedure of effecting by banks bill transactions, which are drawn and are due to be paid in national currency within Ukraine.

Regulation on drawing up applications on purchase or sale of foreign exchange or banking metals by customers payment orders in foreign exchange or banking metals and providing them to authorized banks and other financial institutions and the procedure of their execution (approved by the Resolution of the Board of the National Bank of Ukraine # 82 of 05.03.2003 and registered with the Ministry of Justice of Ukraine under # 224/7545 of 20.03.2003).

This Regulation regulates, in particular, procedure of drawing up by customers payment orders in foreign exchange or banking metals and determines terms for effecting foreign exchange transfers and namely, a customer can chose such terms for foreign exchange transactions as “urgent”, “time” or “general”.

This Regulation also specifies procedure of drawing up by customers payment orders in foreign exchange, when making transfers within an authorized bank.

Furthermore, the Regulation makes provision for requirements on procedure of returning unexecuted foreign exchange payment orders by authorized banks servicing customers.

Regulation on procedure of effecting transactions with foreign exchange cheques in the territory of Ukraine (approved by the Resolution of the Board of the National Bank of Ukraine # 520 of 29.12.2000 and registered with the Ministry of Justice of Ukraine under # 152/5343 of 21.02.2001).

This Regulation sets uniform rules and procedure on foreign exchange cheque transactions effected by authorized banks and financial institutions

According to this regulation, a cheque as a pay document shall comprise a written order of drawer of a cheque to holder of a cheque on paying out within a certain term of foreign exchange amount indicated in it.

World experience testifies to the fact that cheques payable to somebody are mostly widespread among all kind of cheques. They are well protected both in case of reimbursement and of loss. In accordance with the terms of this regulation, all cheques payable to somebody shall comprise the following essential elements:

• name of a document - “cheque” shall be written in a language in which it is drawn (or without a name, when a cheque is drawn in such countries as Great Britain, USA, Canada, Australia, Germany, etc.);

• an order to pay out e certain amount to holder of a cheque;

• name and requisite elements of an issuer and an payer;

• holder of a cheque’s company name for a legal person or family name for a natural person for whom a payment is effected;

• indication of currency type and amount of a cheque.

• cheque drawing date and cheque number;

• place of cheque issue;

• signature of a cheque drawer

For lack of the above-mentioned essential elements, a cheque is considered invalid, shall be returned to holder of a cheque and is not collected by a bank. Period of cheque validity is indicated on a cheque. For lack of such indication, period of cheque validity shall make up 6 months since the day of its issue.

Bank in Ukraine shall accept registered cheques in foreign exchange from holder of a cheque only for collection. Cheques in foreign exchange of the 1st group of foreign exchange Classificator of the National Bank of Ukraine (below - 1 group of Classificator) and 2d group of foreign exchange Classificator of the National Bank of Ukraine shall be accepted by a bank for collection only from their holders after providing documents, which identify their person or against their notary power of attorney.

Bank shall accept cheques for collection from natural persons both residents and nonresidents against application on accepting for collection cheques in foreign exchange. Cheques delivered to a bank by another person can be accepted for collection only in the following cases:

• in case of providing by holder of a cheque a duly authorized power of attorney;

• in case of a death of holder of a cheque, cheques from his heirs shall be accepted only for collection against documents, requested in accordance with the current legislation of Ukraine;

• a cheque, drawn in favour of a teenager before 15 years old or an incapable person can be delivered to a bank only by their legal representatives (parents, trustees);

• after reaching 15 years of age, a teenager can do it personally, but against written consent of his parents or other legal representatives, authorized in accordance with the current legislation of Ukraine (birth certificate, adoption certificate, trustee certificate, etc.)

Bank can accept cheques for collection on the security in accordance with the current legislation of Ukraine in the following cases:

• there is a need to guarantee execution of holder of a cheque his liabilities as to paying out commission to payers, when a bank which accepts a cheque for collection has some doubts as to paying it out;

• cheques have some damages (torn out and put together, original colour is changed, partially burn out, have some ink, paint or oil spots, but all these damages do not interfere with cheque identification);

• cheque period of validity is expired;

• bank which accepts a cheque for collection has no correspondent relations with issuing bank.

After receiving funds against cheque from a payer, a bank in accordance with preliminary agreement with a drawer of a cheque shall inform him per phone or with a letter on accepting cheques for collection, on receiving funds and on the name and location of a bank which is to pay funds.

Natural persons (residents and nonresidents), having foreign exchange current account in the bank, can receive funds against cheques in their account, the number of which shall be indicated in application form on accepting a foreign exchange cheque for collection.

Natural persons (residents and nonresidents), who have no foreign exchange current account in the bank, can receive funds against cheques in cash.

On request of a natural person (resident or nonresident), foreign exchange amount against cheque can be sold to the bank by foreign exchange purchase rate on the day of transaction; at this a natural person - nonresident, is provided with the form 377 together with cash foreign exchange warrants.

Funds against cheques intended for legal persons (residents) are prior transferred to foreign exchange clearing account, opened by bank for a legal entity in accordance with the Transaction Rules on foreign exchange interbank market of Ukraine, approved by the Resolution # 127 of 18.03.99 of the Board of the National Bank of Ukraine and registered with the Ministry of Justice of Ukraine on 18.03.99 under the # 171/3464.

Funds against cheques intended for representations of legal persons-nonresidents are transferred in accordance with normative and legal acts of the National Bank of Ukraine The Regulation sets requested essential elements for travelers cheques as well. A travelers cheque is a pay foreign exchange document used in non-trade international settlements which is drawer of a cheque’s money liabilities to pay out an amounts indicated in a cheque to a holder of a cheque, whose signature shall be put in a duly site by sale. Travelers cheque is to have the following requisite elements:

• name of a document - “travelers cheque”;

• name of issuing companies: American Express, Visa, Thomas Cook, City Corp., Bank of America, Swiss Bakers Travelers Cheques, etc;

• name of payer and his requisite elements;

• signatures of issuing companies’ authorized persons;

• foreign currency face value and its name;

• its series and number;

• place for signature of a person, intending to buy a cheque;

• place for signature of holder of a cheque by paying a cheque off.

The validity period of travelers cheques is not limited.

Date and place for cheque’s filling up are indicated in information message on travelers cheques sale. Travelers cheques are issued of a certain denomination.

Travelers cheques are drawn for a single holder, seldom - for two holders (signature of a holder (two holders) is put in a certain place at the sale day. Travelers cheques drawn for two holders can be used by both. Any of two signatures is valid when receiving cash funds against a cheque.

Banks which have according to the current legislation of Ukraine a special permission of the National bank of Ukraine for importing travelers cheques forms to Ukraine, shall have the right to conclude agreements with other resident banks for their further sell in Ukraine.

Transactions on travelers cheques’ purchase (pay off) and sale (change of foreign exchange in cash against foreign exchange cheques, below - sale) is executed by a bank against foreign exchange of the 1st group of Classificator or against Hryvnias.

Recovery to holder of a cheque for the lost travelers cheques is effected by the bank against agreements concluded with travelers cheques’ issuer.

Regulation on procedure of effecting bank transactions on guarantee in national currency and foreign exchange (approved by the Resolution of the Board of the National Bank of Ukraine # 639 of 15.12.2004 and registered with the Ministry of Justice of Ukraine under # 41/10321 of 13.01.2005).

This Regulation sets general rules of the National Bank of Ukraine on procedure for effecting bank transactions on granting and receiving banking guarantee in national currency and foreign exchange.

Regulation on discharge of transactions, arrest and forced writing off funds in foreign exchange and banking metals (approved by the Resolution of the Board of the National Bank of Ukraine # 515 of 03.12.2003 and registered with the Ministry of Justice of Ukraine under # 167/8766 of 06.02.2004).

This Regulation shall specify general rules of the National Bank of Ukraine and the procedure of execution by authorized banks and other financial institutions of discharge of transactions, arrest and forced writing funds in foreign exchange and banking metals off customers’ accounts and corresponding accounts of authorized banks residents, opened in other authorized banks residents.

Regulation on procedure of effecting transactions on documentary credits in settlements on foreign-economic transactions, which are carried out by authorized banks (approved by the Resolution of the Board of the National Bank of Ukraine # 514 of 03.12.2003 and registered with the Ministry of Justice of Ukraine under # 1213/8534 of 24.12.2003).

This Regulation shall specify general rules on opening, notifying, conducting and closing of documentary credits, which are effected by authorized banks for their customers, when settling accounts on foreign-economic contracts in foreign exchange and national currency.

Tags: Finance by Vitaliy Tretyakov
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Legal Status of the National Bank of Ukraine

Legal status, principles of organization and activities of the National Bank of Ukraine are determined by the Constitution of Ukraine and the Law of Ukraine “On the National Bank of Ukraine”.

The National Bank of Ukraine is a legal entity with separated property, which is the object of the state property. Its authorized capital amounts to UAH 10 million and is the state-owned property which is in the full economic competence of the National Bank.

According to Article 99 of the Constitution of Ukraine, adopted in 1996, the main function of the country’s central bank is to ensure stability of monetary unit-the Hryvnia. To carry out its main function, the National Bank shall foster the stability of the banking system and, within its competence, the price stability.

According to the Law of Ukraine “On the National Bank of Ukraine”, the National Bank is the central bank of Ukraine, a specific central body of the state administration, its issuing center which pursue common state policy in money circulation, credit, strengthening of monetary unit; it coordinates functioning of the banking system in general; determines exchange rate of the monetary unit against foreign currencies. The National Bank determines a kind of bank notes, their denomination, distinctive features and their protection system. The National Bank of Ukraine ensures the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals. The National Bank of Ukraine sets up the order of determining a discount rate and other interest rates; it gives permission for commercial banks’ registration and licenses banking business; determines the standard of emergency funds for commercial banks and other financial and credit institutions.

Functions of the National Bank of Ukraine

Main Function

According to the Constitution of Ukraine, the main function of the National Bank is to ensure the stability of Ukraine’s monetary unit.

To carry out its major function, the National Bank shall foster the stability of the banking system and within its competence, the price stability.

Other Functions

The National Bank shall carry out the following functions:

1. to determine and pursue the monetary policy in accordance with the General Principles of the Monetary Policy developed by the Council of the National Bank of Ukraine;

2. to issue the national currency of Ukraine on a monopoly basis and to organize its circulation;

3. to act as the last-instance creditor for banks and to organize the refinancing system;

4. to establish the rules of conducting banking transactions, accounting and reporting, protection of the information, funds and property for the banks and other financial and credit institutions;

5. to organize and to provide the methodological support to the system of the monetary, crediting and banking statistical information and the statistics of the balance of payments;

6. to organize and to provide the methodological support to the system of the monetary, crediting and banking statistical information and the statistics of the balance of payments;

7. to determine the areas of the development of modern electronic banking technologies, to establish, co-ordinate and control the creation of electronic means of payment, payment system, banking automation and the banking information protection facilities;

8. to exercise the banking regulation and supervision;

9. to keep a Register of banks, their branch and representative offices, currency exchanges and financial and credit institutions, to license banking business and transactions, if provided for by the laws;.

10. to compile, analyze and forecast the balance of payments;

11. to represent Ukraine’s interests in central banks of other states, international banks and other crediting institutions, where the cooperation takes place at the level of central banks;

12. to exercise the currency regulation with the competence to be defined by a special law, to determine the procedure of effecting payments in the foreign currency, to organise and exercise the currency control over the commercial banks and other credit institutions which are in possession of a National Bank’s license for the transactions with currency values;

13. to ensure the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals;

14. to analyze the status of the monetary, crediting, financial, pricing and currency relations;

15. to organize the collection and transportation of bank notes, coins and other values;

16. to implement the national policy of the protection of state secrets within the system of the National Bank;

17. to take part in the training of personnel for Ukraine s banking system;

18. to exercise other functions in the monetary and crediting sphere within its competence defined by the law.

Tags: Finance by Vitaliy Tretyakov
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The evolution of the national banking system in Ukraine started in March, 1991, after the adoption of the Law of Ukraine “On Banks and Banking” by the Ukrainian Verhovna Rada. The Ukrainian banking system is a two-tier structure consisting of the National Bank of Ukraine and commercial banks of various types and forms of ownership including the state-owned Export-Import Bank and a specialized commercial Savings Bank.

The National Bank of Ukraine serves as the country’s central bank which pursues a uniform state monetary policy to ensure the national currency stability.

Commercial banks are formed as joint-stock companies or as companies on an equal footing with both legal and natural persons involved. The range of commercial banks activities includes: receiving deposits of enterprizes, institutions and households, crediting of economic entities and households, investments in securities, formation of cash balance and reserves, as well as other assets, cash and settlement servicing of the economy, foreign exchange operations and other services to natural persons and legal bodies.

The banks act in accordance with the Constitution of Ukraine, the Laws of Ukraine “On the National Bank of Ukraine“, “On Banks and Banking“, the Ukrainian legislation on joint-stock companies and other economic entities, as well as with the normative regulations of the National Bank of Ukraine and their Statutes.

Tags: Finance news by Vitaliy Tretyakov
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Overview

The American Chamber of Commerce in Ukraine (ACC) is among the most active and effective non-government, non-profit business organizations operating in Ukraine. One of the Chamber’s principal activities is to represent the foreign investment community as well as to facilitate the entrance of potential new investors into market of Ukraine. The Chamber advocates on behalf of the Membership, who are from more than 50 nations across the globe, not only to the Government of Ukraine, but also to all other governments of the states, which are the economic partners of Ukraine, on matters of trade, commerce, and economic reform. The Member organizations of the ACC represent the largest strategic and institutional investors operating in the country, who have committed a majority of the foreign direct investment into this market. The Chamber’s diverse Membership base unites companies from a variety of regions of the world, including North America, Europe, Asia, Russia, and Ukraine.

Chamber Members collectively employ hundreds of thousands of Ukrainians, providing them with exposure to international business practices and the opportunity to develop into leading Ukrainian professionals. Chamber Members also bring international expertise, business standards and business knowledge to Ukraine, are among some of the largest taxpayers in the state, and strive to be good corporate citizens.

The American Chamber of Commerce in Ukraine’s Mission

• Unite leading organizations in Ukraine, irrespective of national origin, around common principles.
• Provide an effective platform for networking, information sharing and achieving common goals.
• Advocate for a business environment governed by the fair and transparent application of the rule of law to enable private enterprises to flourish.
• Provide access to information, resources, contacts and business support services to facilitate new investment.

The Vision of the American Chamber of Commerce in Ukraine is to be:

• The leading voice of the internationally oriented business community in Ukraine, which provides superior value and does not compromise in our values of providing excellence to our Members and external stakeholders.
• A respected, influential and sought-after interlocutor to Ukrainian authorities, diplomatic and donor communities on business, investment and economic issues.
• An indispensable partner of the business community, providing assistance to new investors and innovative value added benefits to Members as well as maintaining an effective forum for networking and sharing information.

ACC Pricnciples

• We do not compromise on our values and following principles in our activities.
• We behave ethically and honestly in our business dealings and expect our individual Members to do so as well.
• We are advocates of free-enterprise and encourage reform aimed at the development of an equitable and transparent business environment in Ukraine.
• We provide a forum for our Members to advocate for achieving common goals through ownership and active participation in the advocacy activities of the Chamber (i.e. Chamber Committees and Working Groups).
• We maintain an open, supportive and welcoming atmosphere in which Members can network, share information and interact.
• We effectively communicate with our Members and other relevant stakeholders in an open, relevant and timely manner.
• We strive to facilitate the entrance of new investors and the expansion of previous investment into Ukraine.
• We contribute to the development of the community and to charities that benefit Ukrainians.
• We are good corporate citizens who respect Ukraine and its rich traditions.

ACC Code of Product

s Members of the American Chamber of Commerce, the goal is to operate and conduct business in accordance with the law of the land and to accept certain guiding principles based on U.S. and Western business practices as a preferred code of conduct. Without attempting to draw up detailed guidelines to govern every situation that might arise in the course of diverse and complex business activity in Ukraine, the American Chamber of Commerce has established these basic principles only as general operating guidelines that all Members are expected to follow:

• Members will make every effort to comply with the laws of Ukraine to which they are subject.
• Members will avoid knowingly assisting any third party in violating any law of Ukraine.
• Members will not knowingly pay or receive bribes or participate in any other unethical, fraudulent or corrupt practice.
• Members will endeavor to honor all business obligations and commitments that they undertake with professionalism and integrity.
• Members will keep business records in a manner that properly reflects the true nature of their business transactions and activities.
• Members will ensure that their management and supervisors are familiar with applicable labor laws and corporate policies and will take responsibility for preventing and detecting violations in the course of their business operations.
• We encourage all member companies and their affiliates to adhere to the provisions of the Foreign Corrupt Practices Act of the United States.

The principles outlined here are not intended to preclude business or professional relationships that are recognized as both legal and acceptable under applicable law and custom, and that would not cause embarrassment to any party involved, if publicly known.

Contact Information

Horizon Office Towers
42/44 Shovkovychna Vul., LL1 Floor
Kyiv, 01601, Ukraine

Phone: (380-44) 490-5800
Fax: (380-44) 490-5801

WWW: http://www.chamber.ua
e-mail: chamber@chamber.ua

Tags: NGO in Ukraine by Vitaliy Tretyakov
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DONETSK – As Donetsk’s industrial plants have slowed production, locals say they have noticed an improvement in the city’s air quality. But this small blessing has hardly left the inhabitants of the capital of Ukraine’s eastern industrial heartland breathing more easily, as concern over wage cuts and layoffs grows.

Huge global demand for the steel that is the Donetsk region’s main export has brought several years of impressive economic growth. Wealth has trickled down from the super-rich oligarchs to blue-collar workers. But while local business and political leaders were advertising Donetsk’s great potential for future investment at the International Investment Summit last week, workers spoke of fears in the present. The global financial crisis and economic slowdown have seen prices and demand for steel plummet. And now their effects are starting to be felt throughout the local economy.

“There are no jobs. The steel factories are working four-day weeks and many people have been sent on holiday with no pay,” said Alik, a coal miner who had just emerged from his shift at a mine on the outskirts of the city. “We’re worried that the mines are next. People are worried about not getting paid.”

Factories across Ukraine’s industrial East have been slashing production and sending workers on leave as Ukraine’s export-oriented economy was hit by a slide in global demand. On Nov. 1, all three Ukrainian ferroalloy plants started phased shutdowns. Serhiy Taruta, chairman of the leading steel producer Industrial Union of Donbas, told the Kommersant newspaper last month that his company plans to lay off around 20,000 people.

“It’s not our fault,” he said. “We just can’t provide these people with a wage.”

The steel factories may have been the worst hit so far, with daily steel output dropping 50 percent since July, but there is fear that the turmoil is spreading quickly to the mines, as demand for coking coal used in the steelmaking process drops.

“We haven’t sold a single kilogram of coking coal since Aug. 25,” said Vera Lyashchenko, press officer for Makiyivvuhillya, which runs nine coal mines in the mining heartland of Makiyivka, 25 kilometers outside Donetsk.

Vladimir Boiko, director of steelmaker Illich, announced last week that it was shutting a mine in Luhansk, citing lack of demand.

“Most of the coking coal mines are still working at the moment and storing the coal,” said Anatoliy Akimochkin, deputy head of the Confederation of Independent Trade Unions (CITU). “But if the demand does not pick up, some could be forced to close.”

Many coal mines have not yet been affected by the crisis, as the demand for thermal coal, used in power stations, remains high. Mykola Lysenko, director of Makiyivvuhillya’s Butivska mine, even reported that he has been taking on new workers in the past few months on the back of a successful two years.

But the decreased demand for coking coal, which accounts for 60 percent of Makiyivvuhillya’s production, is starting to affect other mines.

“Young people felt stability and took out loans for cars,” Lysenko said. “Now they are coming from other enterprises looking for jobs. They ask me for help, but what can I do if no one is ordering coal?”

According to Akimochkin, there are more delays in wage payments to miners than usual, although 90 percent have already been paid for September.

It is not just Donetsk’s metallurgy and mining sectors that are starting to suffer. Easy credit and the stable hryvnia-dollar exchange rate drove a consumer boom in recent years as the growth spread throughout the local economy. Nationwide, consumer loans totaled Hr 213 billion in September, up from Hr 33.5 billion in 2005, according to national bank figures. But as the hryvnia has slid from a relatively stable 5 to the dollar to a high of around 7 last week, the pinch is being felt in all walks of life.

“I took a car loan in dollars,” said Mykola, a local taxi driver. “But now I’m struggling to pay it back with the exchange rate so high. I’m not getting as many customers and I’m counting the kopecks.”

And there is a widespread feeling that the worst is yet to come, with experts estimating an exchange rate ranging 7.5-10 hryvnias per dollar next year and unemployment predicted to hit 7.7 percent by the end of 2008.

“The average Ukrainian doesn’t realize what’s coming,” said Jorge Zukoski, president of the American Chamber of Commerce in Ukraine (ACC). “But they will when a family member or a neighbor loses their job and if the hryvnia continues to slip.”

People are clear about who they blame. “How can politicians sort the country’s problems out when they can’t even agree to work properly themselves?” said Mykola, the taxi driver. “We need a strong hand.”

Russian Prime Minister Vladimir Putin and Belarusian President Alexander Lukashenko are popular figures here for their perceived ability to get things done and help the people.

Although Victor Yanukovych, leader of the Donetsk-based Party of Regions still enjoys popularity among some workers, others are angry.

“Yanukovych can’t be the strong hand,” Mykola continued. “He makes many promises, but he doesn’t fulfill any of them. I’ll vote for him, but only because he’s from Donetsk.”

If politicians are taking most of the blame, oligarchs, many of whom have become rich after picking up industrial plants at cheap prices in quick-fire privatizations, are still widely respected as successful entrepreneurs who invest money in improving Donetsk.

Stories abound on the streets and in the media of Rinat Akhmetov’s generosity and help in reconstructing the city. Akhmetov is majority shareholder in System Capital Management and Ukraine’s richest man.

One local told how his granddaughter came back from her first day at school with a brand new diary, provided to all first-year pupils by Akhmetov. “This might be small change for him,” said Alik, the miner. “But at least he is doing something.”

And there is a great feeling of reliance on the business leader as a man who can help the region through the crisis. “Akhmetov knows what he is doing,” Alik continued. “He’s a clever man. I don’t expect he’ll let the steel factories close.”

At the International Investors Summit, business leaders were not keen to talk about immediate plans. The Financial Times reported that Akhmetov refused to comment in detail on the impact of the recession on jobs and wages, but pledged to avoid lay-offs at all costs.

Akhmetov made clear in his speech at the opening that the long-term strategy should focus on the development of the internal market. “I am convinced that not the metallurgists should be assisted, but the consumers of steel,” Akhmetov said. “We need a building boom. It is very important for the state to increase investments in large infrastructural projects: construction of airports, highways and bridges.”

Mykhailo Volynets, head of CITU, agreed, telling RBC news agency that one job in the construction industry created up to four jobs in connected industries.

This boom in infrastructure investment could come as early as next year as Ukraine prepares to co-host the European Football Championship in 2012. Preparations ahead of the tournament, including the reconstruction of roads, airports, railways and investment in new hotels, is estimated to cost more than $30 billion. Although analysts predict that Ukraine will fall into recession in the first half of 2009, they see the outlook for the second half of the year as more positive as exports benefit from the hryvnia’s expected fall and an anticipated rise in demand for steel.

There was much talk at the summit of getting through the turmoil and preparing for recovery. “There will be a need to scale back investment programs if the crisis continues,” said Jock Mendoza-Wilson, director of international and investor relations at Akhmetov’s SCM. He confirmed, however, that SCM intends to carry through on its 10-year, $5 billion investment into steel mill Azovstal because of the “competitive advantages” Ukraine offers.

But the immediate future looks far from easy for Donetsk’s blue-collar workers. As the turmoil continues and the business leaders try to come up with answers, there is little more that the workers can do than remain resolute. “All we can do is work hard and believe that things will get better,” said Lysenko, the mine director.

Tags: Macroeconomics by Vitaliy Tretyakov
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