Cooperation of Ukraine in the framework of the world trade organization (WTO)
The Path of Ukraine into the WTO.
In accordance with Article XII of the Marrakesh Agreement Establishing the World Trade Organization, an accession to the WTO is being carried out on terms to be agreed upon between the government of an applying country and the WTO.
The process of Ukraine’s accession to the WTO started on 30th of November 1993 with forwarding the official application of the Government of Ukraine on its intention to join the Organisation to the GATT Secretariat.
There had been 17 formal meetings and a succession of informal meetings of the Working Party for consideration of the application of Ukraine for the accession to the WTO. At the last meeting, held on January 25, 2008, members of the Working Party adopted the «accession package» of Ukraine: the Report of the Working Party, the schedules of specific market access commitments of Ukraine in goods and services, a draft decision of the WTO General Council and a draft Protocol of Accession.
On February 5, 2008, the accession package was considered and approved by the WTO General Council. The President of Ukraine and Director General of the WTO signed the Protocol of Accession of Ukraine to the WTO.
On April 10, 2008, the Verkhovna Rada (Parliament) of Ukraine approved the Law of Ukraine No. 250-VI «On Ratification of the Protocol of Accession of Ukraine to the World Trade Organization».
On April 16, 2008, the President of Ukraine signed the Law on the ratification of the Protocol and at the same day the Ministry of Foreign Affairs of Ukraine sent an official notification about this to the WTO. Starting from that day, the countdown of the 30 days, i.e. the official period from the notification to the membership in the WTO, started.
On May 16, 2008, Ukraine became the 152nd member of the World Trade Organization.
Ukraine’s WTO accession is a significant achievement, which is expected to have a positive impact on the country’s economic development in the future and result in further liberalization of the foreign trade, creation of transparent business environment for foreign investments.
Ukraine implements all its accession commitments, as contained in the Protocol on Ukraine’s accession to the WTO, as well as takes an active part in the current Doha Development Agenda negotiations aiming at facilitating integration of other countries into the world economy.
To find the general information on the history of establishment, directions and principles of activity of the WTO please visit the web-site at www.wto.org.
On 25 June 1992, eleven countries of the Black Sea region signed the Istanbul Declaration on the Black Sea Economic Cooperation (BSEC), which defined the general framework of this intergovernmental initiative.
The Charter of the Organisation was signed at Yalta BSEC Summit of Heads of State and Government on June 5, 1998. It came into force on May 1, 1999, converting this intergovernmental cooperation initiative into a full-bodied international regional organisation.
The Organisation is composed of twelve member states: Albania, Azerbaijan, Armenia, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Serbia, Turkey and Ukraine.
The following institutional bodies are actively functioning within the BSEC Organisation: the Parliamentary Assembly (PABSEC), Black Sea Trade and Development Bank (BSTDB), Business Council and the International Centre for Black Sea Studies (ICBSS). These bodies operate in compliance with principles, laid down in the Istanbul Declaration and the BSEC Charter, as well as their own statutory documents. In order to develop closer cooperation, there are coordination meetings being held from time to time within the framework of the BSEC bodies at the participation of presiding country and the heads of secretariats of the mentioned bodies.
According to the Charter, the member states interact in the following areas: trade and economic development, finance and banking, communications, energy, transport, agriculture, health care and pharmacy, environment protection, tourism, science and technology, culture, statistic data and economic information exchange, customs cooperation, humanitarian contacts, combating organised crime, etc.
The BSEC Charter stipulates for a rotating six-month chairmanship, undertaken by the member states in alphabetical order. During this period Minister of Foreign Affairs of a member state chairing the Organisation coordinates all the BSEC activities and ensures proper management as well as execution of resolutions and decisions taken. In case if a member state waives its chairmanship, it is automatically delegated to another country according to the alphabetical order.
In 2001 the «Economic Agenda for the BSEC» was adopted by the member states, which was in fact a joint strategy aimed at achievement of specific results and goals of the BSEC.
The main decision-making standing body of the BSEC is the Council of Ministers of Foreign Affairs (CMFA). It meets twice a year at the end of the chairmanship of a member state. The Council decides on all maters relating to the operation of the Organisation, reviews the activity results of the subsidiary bodies and renders related resolutions, decisions and recommendations. The CMFA decisions are taken through consensus. Coordination of the BSEC activities in the period between CMFA meetings is performed by the acting Chairman of the Organisation – the Minister of Foreign Affairs of the presiding country.
BSEC Committee of Senior Officials (CSO) represents the Ministers of Foreign Affairs of the member states between the CMFA meetings and acts in their name. In particular the CSO reviews the activities of the subsidiary bodies, controls the execution of the CMFA decisions and recommendations, prepares proposals for new decisions and introduces draft BSEC budget to be adopted by the CMFA.
The subsidiary bodies of the BSEC are the working groups, which meet regularly to discuss the specific areas of sector cooperation. There are several working groups operating within the Organisation in the following fields: agriculture, finance and banking, combating crime, information and communication technologies, emergency assistance, energy, environmental protection, exchange of statistical data, health care and pharmacy, science and technology, promotion of SME’s, tourism, trade and economic development, transport, culture, education, organisational issues. Besides that, other Ad Hoc Groups of Experts can be established in case of need.
The Permanent International Secretariat (PERMIS) located in Istanbul is the executive body of the BSEC. The Secretariat operates under the general management of the Acting Chairman of the Organisation and under the direct management of the PERMIS Secretary General (from May 1, 2006 the Secretariat is chaired by L.Chrysanthopoulos, Greece).
The Troika mechanism has been established within the BSEC Organisation. Troika meetings are called by the Acting Chairman in order to exchange views on ongoing operations of the Organisation, BSEC lines of activity for the future and its relations with other international organisations and institutions.
In 2004 the BSEC Project Development Fund was established in order to give financial support to the development and implementation of international sectoral projects. With the same purpose in 2007 Greece initiated the creation of the BSEC Hellenic Development Fund consisting of a voluntary contribution from the Hellenic Republic in the amount of 2.000.000 Euros for a period of four years starting from 2008.
It was for the first time in the Organization’s history that the program-oriented budget was approved during the Armenian BSEC Chairmanship-in-Office (November 2008 – May 2009). This would ensure implementation of projects and programs of cooperation in all sectoral dimensions of activity.
There is a number of documents on regional cooperation signed by the BSEC Participating States, namely: the Agreement on Collaboration in Emergency Assistance and Emergency Response to Natural and Man-Made Disasters and the Additional Protocol to this Agreement; the Agreement on Cooperation in Combating Crime, in Particular in its Organized Forms and the Additional Protocol to this Agreement; Memorandum of Understanding (MoU) on Facilitation of Road Transportation of Goods in the BSEC Region; MoU on the Development of Motorways of the Sea at the BSEC Region; MoU for the Coordinated Development of the Black Sea Ring Highway; MoU on Cooperation Among Diplomatic Academies and Institutes of the BSEC Member States. The following BSEC documents are open for signature by the Member States: the Agreement on Simplification of Visa Procedures for the Businesspeople Nationals of the BSEC Member States and the Agreement on Simplification of Visas for the Professional Lorry Drivers in the BSEC Member States.
The BSEC has developed relations with other international regional organizations and initiatives. In October 1999 the Organisation of the Black Sea Economic Cooperation was granted observer status within the United Nations General Assembly.
Interest in the BSEC as regional organisation is intensified due to the representation of countries and institutions which cooperate with the Organisation within the framework of related agreements or which have observer status in the BSEC Organisation. These are: the Energy Charter Secretariat, the European Commission, the Commission for Protection of the Black Sea Against Polution, the US, Austria, Germany, France, Poland, Slovakia, Croatia, the Czech Republic, Italy, Belarus, Egypt, Israel, Tunisia. Besides that, a number of international non-governmental organisations got the status of BSEC Sectoral Dialogue Partners.
Other Organisations
The Central European Initiative (CEI) is a regional organisation associating countries of Central and Eastern Europe. Its activities are aimed at promotion of multilateral cooperation in political, social, economic, scientific and cultural spheres among its member states, as well as strengthening stability and security in the region. The organisation is composed of 18 member states: Albania, Austria, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Italy, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia and Ukraine.
In November 1989 a group of countries (Italy, Austria, Hungary and Yugoslavia) established in Budapest a Quadragonal Cooperation, aiming at preparation of Hungary and Yugoslavia to join the European Union.
Following its gradual enlargement, in 1992 the grouping was renamed to Central European Initiative. The Executive Secretariat of CEI is located in Trieste, Italy.
The CEI operates at three structural levels: Heads of Government, Ministers of Foreign Affairs and National Coordinators of the member states.
In modern Europe the CEI is seeking an opportunity to play a more notable role as a regional international organisation, defining one of its priority tasks as providing comprehensive assistance to its member states on their way to the EU. Nine of the eighteen CEI member states are already members of the EU, all the other (except for Belarus) have declared their intention to join it.
The CEI actively cooperates with other European regional organizations, such as the Adriatic Ionian Initiative, Regional Cooperation Council, BSEC, Council of the Baltic Sea States, etc.
In achieving its goals the CEI relies on support from governments and business circles of its member states rendered through its special bodies, namely the Parliamentary Dimension of the CEI and the Central European Chambers of Commerce Initiative. These structures do not directly belong to the CEI. They operate independently, performing general coordination through the CEI Secretariat.
Ukraine started developing contacts with the CEI in 1992 through participation in several working groups of the Initiative. In March 1994 our state became the member of the CEI Associated Council and on May 31, 1996 Ukraine gained full membership in the Organisation.
Ukraine regards the CEI as an important mechanism for integration to the European economic and political space, and also for stability strengthening in the region and further development of close relations between the CEI member states. Ukrainian experts participate in such CEI focal points as cross-border cooperation, transport, energy, science and technology, working on continuing basis on intensification of Ukrainian enterprises participation in cooperation projects within the CEI framework.
The latest CEI Summit оf Heads оf Government was held on November 13, 2009 in Bucharest, Romania, where participants discussed the ways of regional cooperation intensification through realisation of multilateral projects and technical assistance programmes aimed at CEI member states joining or approaching to the EU.
In 2010 Montenegro holds the presidency in the Central European Initiative.
The creation of favorable development conditions for the business climate in Ukraine remains one of the most urgent task. The amount of foreign direct investment (equity) in the economy of Ukraine on 1st of July 2015 totaled USD 42851,3 million and 1000,5 USD per capita (excluding the temporarily occupied territory of the Autonomous Republic of Crimea, Sevastopol and the part of the zone of counter-terrorist operations).
From January to June 2015 the foreign investors invested USD 1042,4 million in Ukraine, and took out 351,3 million USD of direct investments (share capital). Reduction of the share capital cost due to reassessment, losses and requalificationamounted 3604,0 million USD, including USD 3539,3 million lost due to exchange rate difference.
In the year 2015 the investments floated from 133 countries. The EU countries made USD 33154,9 million of the investments (77.4% of total share capital), the other countries of the world scored USD 9696,4 million (22,6%). More than 83% of direct investments accrue to ten major countries-investors: Cyprus - 12274,1 million USD, Germany – 5489,0 million USD, the Netherlands – 5108,0 million USD, Russia – 2685,6 million USD, Austria – 2354,3 million USD, UK – 1953,9 million USD, the British Virgin Islands – 1872,6 million USD, France – 1539,2 million USD, Switzerland – 1371,2 million USD and Italy - 966,6 million USD.
At the same time the amount of Ukrainian direct investments (share capital) to the foreign countries economies on the 1 of July 2015 totaled 6254,4 million USD, including the EU countries- 6015,4 million USD (96,2%), and other countries of the world - 239,0 million USD (3.8%). Direct investments from Ukraine were injected to 46 countries around the world, mostly to Cyprus (93,0%).
The requirements of the Ukrainian direct investors for the debt instruments to the enterprises of direct investment abroad made up 218,0 million USD on 1 July 2015. The amount of direct investments (capital share and debt instruments) in the economy of the countries of the world totaled 6472,4 million USD.
Direct foreign investment inflow
(million USD)
|
|
Total |
including from |
|
|
EU countries |
other countries |
||
|
Non-residents direct investments (share capital and promissory instruments) on the 1st of January 2015 |
54070,7 |
42789,5 |
11281,2 |
|
Non-residents joint stock on the 1st of January 2015 |
45764,2 |
35603,9 |
10160,3 |
|
Non-residents joint stock inflow |
1042,4 |
419,8 |
622,6 |
|
Non-residents joint stock outflow |
–351,3 |
–222,2 |
–129,1 |
|
Other changes of the non-residents joint stock value (change of cost, loss, reclassification of investments and others) |
–3604,0 |
–2646,6 |
–957,4 |
|
difference in rate |
–3539,3 |
–2773,0 |
–766,3 |
|
Non-residents joint stock on the 1st of July 2015 |
42851,3 |
33154,9 |
9696,4 |
|
Promissory instruments (debt on credits and loans, liabilities for trade credits and other liabilities to direct investors) |
|
|
|
|
on the 1st of January 2015 |
8306,5 |
7185,6 |
1120,9 |
|
on the 1st of July 2015 |
8850,4 |
7609,1 |
1241,3 |
|
Non-residents direct investments (share capital and debt instruments) on the 1st of July 2015 |
51701,7 |
40764,0 |
10937,7 |
Direct foreign investment outflow
(million USD)
|
|
Total |
including from |
|
|
EU countries |
other countries |
||
|
Residents direct investments abroad (share capital and promissory instruments) on the 1st of January 2015 |
6562,7 |
6239,7 |
323,0 |
|
Residents joint stock in the economy of the world countries on the 1st of January 2015 |
6350,7 |
6033,3 |
317,4 |
|
Residents joint stock inflow |
26,4 |
0,0 |
26,4 |
|
Residents joint stock outflow |
–81,4 |
–1,9 |
–79,5 |
|
Other changes of the residents joint stock value (change of cost, loss, reclassification of investments and others) |
–41,3 |
–16,0 |
–25,3 |
|
difference in rate |
–40,9 |
–16,0 |
–24,9 |
|
Residents joint stock in the economy of the world countries on the 1st of July 2015 |
6254,4 |
6015,4 |
239,0 |
|
Promissory instruments (requirements after credits and loans, trade credits, and other requirements to the enterprises of the direct investing) |
|
|
|
|
on the 1st of January 2015 |
212,0 |
206,4 |
5,6 |
|
on the 1st of July 2015 |
218,0 |
207,5 |
10,5 |
|
Residents direct investments abroad (share capital and promissory instruments) on the 1st of July 2015 |
6472,4 |
6222,9 |
249,5 |
During 2014-2015 the Ukrainian government implemented a set of measures to create a whole new level of business environment, which is to provide economy revival and steady development in Ukraine.
Owing to this fact, In the World Bank rating Doing Business 2015» according to the indicator of the easiness of doing business, Ukraine occupies 96 position among 189 countries of the world (112-in 2014).
Legal framevork for investment and development of private-state partnership is set up in Ukraine. The legislation of Uktaine determines the guarantees for investors activity, economic and organizational foundation for the realisation of private-state partnership.
National regulations of investment activity are implied on foreign investors on the territory of Ukraine, equal bussiness conditions with local invesrors are granted. Foreign investments are not subjected to nationalization.
In case of shut down of investment activity foreign investor is guaranteed return on investment in its genuine form or in the currency of investment, tax free as well as revenues from the investment in monetary or commodity form. The state also guarantees unhampered and immediate abroad transfer of revenues and other funds in foreign currency legally obtained due to foreign investmens.
To enhance the protection of foreign investments the Washington Convention of 1965 on the Settlement of Investment Disputes between States and Nationals of Other States was ratified by the Law of Ukraine No. 1547 addopted on 16 of March 2000.
The Commissions for the assistance on the pre-trial settlement of disputes with investors that might be created by the executive authorities and local authorities as a temporary advisory consultative bodies to facilitate pre-trial settlement of disputes between an investor and executive authority (local government) are aimed at solving the disputable issues.
The intergovernmental agreements on promotion and mutual protection of investments are signed and ratified by the Verkhovna Rada of Ukraine with more than 70 countries of the world.
For the purpose of proper implementation of national foreign policy and foreign economic priorities, promoting Ukrainian exporters on foreign markets, protection of their economic and trade interests abroad as well as attraction of foreign direct investment in the economy of Ukraine the Council of exporters and investors has been operating at the Ministry for Foreign Affairs of Ukraine since April 2013.
For the aim of activation and realization of the investment potential of Ukraine, increasing foreign investments amounts, priority investment projects support, investment environment improvement, guarantee of the protection of investors’ rights, assessment in effective cooperation of investors with state authorities, in December 2014,by the decree of the president of Ukraine the National Investment Council was formed.
Aiming at the search of viable mechanisms of foreign investments involvement to Ukraine the government regularly holds business forums with foreign investors participation. Indicated measures are to contribute to improve the investment image of Ukraine and to provide growth of foreign investment amounts and capital investments in the economy of the state.
An important task of the Ministry of Foreign Affairs of Ukraine is to provide diplomatic maintenance and assistance in holding negotiations on concluding bi- and multilateral free trade agreements (further - FTA).
The FTA conclusion provides the creation of favorable conditions for development of trade and economic cooperation with the certain states or groups of states and therefore is the efficient instrument for increasing the Ukrainian export volume through the liberalization of access of goods and services on foreign markets. The establishing a free trade regime with the perspective trade and economic partners allows Ukraine to diversify geography and range of national export production due to liberalized terms of market accession in the long term.
First of all, the FTA conclusion pursues the aim of advance and protection of economic interests of the Ukrainian producers and exporters and also provides balanced tariff policy, including, in relation to sensitive groups of industrial and agricultural goods which have to become a basis of creating favorable conditions for the development of commerce and economic cooperation.
The valid FTAs
Ukraine concluded free trade agreements with The European Free Trade Association (EFTA), the CIS and also with Montenegro, Macedonia, Georgia, Azerbaijan, Uzbekistan, Tajikistan, Turkmenistan.
Creation of Deep and Comprehensive FTA between Ukraine and the European Union is provided by the economic part of EU- Ukraine Association Agreement, which was signed on June 27, 2014.
The Agreement on free trade between Ukraine and the states of EFTA (Switzerland, Norway, Iceland and Liechtenstein) was signed at Reykjavík (Iceland) on June 24, 2010; ratified by the Law of Ukraine No. 4091-VI of December 07, 2011 and came into force on June 1, 2012. The present Agreement covers trade in goods (industrial, agricultural, fish and sea production), services and settlements of disputes. Given the difference between economic and social development levels of Ukraine and EFTA member states the agreement provides the principal of asymmetrical obligations of the Parties which allows Ukraine to adapt its trade with the EFTA states with the free trade terms.
Two more documents were signed in the scope of Agreement in order to render technical and financial assistance to the Ukrainian Party for adaptation to the new terms of trade, namely: the Memorandum of understanding concerning the Program of bilateral cooperation in agriculture between the Ministry of Agrarian Policy and Food of Ukraine and the Swiss State Secretariat for Economic Affairs; and the Joint Statement on cooperation in the field of fisheries between the State Agency of Fisheries of Ukraine, the Ministry of Fisheries and Agriculture of Iceland and the Ministry of Fisheries and Coastal Affairs of Norway.
CIS Free trade Agreement (member countries: Ukraine, Azerbaijan, Belarus, Armenia, Kazakhstan, Kyrgyzstan, Moldova, the Russian Federation, Tajikistan, Turkmenistan, Uzbekistan) signed on October 18, 2011 and ratified by Ukraine on July 13, 2012.
Besides, bilateral FTAs between Ukraine and Azerbaijan (was ratified on July 12, 1996), Uzbekistan (November 04, 1995), Tajikistan (July 06, 2001) and Turkmenistan (November 05, 1994) are valid. The largest trade partners of Ukraine within the CIS are Russian Federation, Belarus, Moldova and Kazakhstan.
The free trade area between Ukraine and Georgia is valid since 1996 under the Agreement between the Government of Ukraine and the Government of Democratic Republic of Georgia on January 09, 1995 (came into force on June 04, 1996), and also under the intergovernmental Protocol on modification and additions in the Agreements specified on June 17, 2009 that is connected with Georgia's withdrawal from the CIS.
The Agreement on free trade between the Government of Ukraine and the Government of Montenegro was signed at Kiev on November 18, 2011 and was also ratified by the Law of Ukraine No. 5445-VI of October 16, 2012; became effective on January 01, 2013. The present Agreement covers trade in goods, services and settlements of disputes. Under the terms of the Agreement after the entry into force, Montenegro provides abolition of the import duties. Thus, for the purpose of prevention of potential negative consequences for the economy of Ukraine, the Ukrainian party within the Agreement excluded a number of sensitive groups of agricultural goods from the free trade area. Also, the right for application of export duties by Ukraine according to the existing obligations within the WTO is kept.
The Agreement on free trade between the Republic of Macedonia and Ukraine was signed at Skopje on January 18, 2001 and was ratified by the Law of Ukraine No. 2599-III of July 05, 2001. The present Agreement covers the removal of trade restrictions in industrial and agricultural goods, providing conditions for the fair competition in trade, creation of conditions for further investment promotion, development of joint investment projects, and also protection of intellectual property and cooperation between the Parties in the markets of the third countries.
The concluded FTAs promote the free movement of goods and services between the countries that, in turn, promotes attraction of investments, reduction in cost of import, development of domestic production and infrastructure, exchange of experience and technologies, provides employment of the population, receipt in budgets of taxes and fees and maintenance of close interstate connections.
The negotiation processes under way
For the time being, negotiation processes on the conclusion of bilateral FTAs between Ukraine and Canada, Turkey and State of Israel are under way.
The work on determination of economic expediency of the conclusion of FTAs with other important trade partners of Ukraine is being conducted. Along with the carrying out the corresponding scientific researches we try to define the perspective countries for the FTAs conclusion through the consultations with business associations and leading producers and exporters of Ukraine.
International Monetary Fund
The International Monetary Fund is an international financial organization established in 1944. The IMF consists of 188 member-states. The Fund has the status of a specialized UN agency and its purpose is to regulate monetary cooperation of the member states and to provide the assistance in the balance of payments deficit by rendering short- and medium-term loans.
Ukraine became an IMF member-state according to the Law of Ukraine “On Ukraine's accession to the International Monetary Fund, International Bank for Reconstruction and Development, International Finance Corporation, International Development Association and the Multilateral Investment Guarantee Agency” of June 3, 1992.
Ukraine has been actively cooperating with the IMF since 1994 by using its financial and technical resources to achieve macroeconomic stability and to build up the necessary conditions for economic reforms. Such cooperation had been mainly carried out in the framework of 8 joint programs – STF (systemic transformation facility), “Stand-By” (stabilization loan), EFF arrangement (loan to support development), precautionary “Stand-By”.
The Government of Ukraine requested the IMF to start negotiations on the preparation of the new loan agreement between the Fund and Ukraine in February 2014 after two years break in relations. On April 30, 2014 the IMF Executive Board approved a new joint program "Stand-By" for the next 2 years, allocating for Ukraine the amount of $17.1 billion. In this connection Ukraine received two tranches: 3.2 billion USD in May and 1.4 billion USD in September 2014.
The agreement to expand financial support for Ukraine by replacing the existing IMF “Stand-By” program for the long-term EFF program was achieved in January 2015.
The Executive Board of International Monetary Fund made a decision on the transition to the long-term EFF program allocating for Ukraine $17.5 billion on March 11, 2015. This four-year Program provides support for the economic and financial stability in Ukraine. The first tranche in the amount of $5 billion entered Ukraine in March 2015. The decision to allocate for Ukraine the second tranche in the amount of $1,7 billion (EFF program) was made during the regular meeting of the IMF Executive Board held on July 31, 2015.
World Bank Group
The World Bank Group was established on December 27, 1945 to render a financial and technical assistance for the developing countries. The World Bank is a join-stock company with the 186 member-shareholder states. Ukraine became a member of the World Bank Group in 1992, under the Law of Ukraine dated June 3rd , 1992 №2402-XII. Ukraine as a member-shareholder of the World Bank has 0.77% of the equities.
Among the international financial organizations, the World Bank is the second lender of Ukraine after the IMF. The resources of this organization are used to maintain public budget, the implementation of institutional and structural reforms, preparation and realization of the long-term investment projects meeting the priority directions of the economic development of Ukraine.
Cooperation with the World Bank is based on Country Partnership Strategy for Ukraine for 2012-2016 adopted in February 2012. The Strategy aimed at the assistance to the Government in implementation of the economic reforms and EU integration.
Over the years of cooperation Ukraine received $7,4 billion from 50 loans of the World Bank totally allocating $10,1 billion. The greater part of these loans was directed for the structural reforms, financial sector reforms and further development of the banking system.
The Board of Directors of the World Bank adopted a decision to provide additional loan of $3 billion to support the reforms in our country on March 10, 2014.
12 projects are being realized at the moment. They aimed to improve the infrastructure, roads and traffic safety, power transmission as well as to rehabilitate hydropower stations, to develop urban infrastructure and energy efficiency including the district heating sector, to modernize the system of population social support and health care system.
European Bank for Reconstruction and Development
The EBRD is an international financial organization aimed to finance economic reforms in Eastern Europe. The EBRD activities is directed to facilitate in the issues of transition to a market economy in this region. The Bank was founded in 1991. Today 65 states are members of the EBRD. Ukraine is a member of the EBRD since August 1992 under the Decree of the President of Ukraine "On Ukraine's membership in the European Bank for Reconstruction and Development" of July 14, 1992, №379.
The EBRD operates only on a commercial basis. The bank provides only purpose loans for specific projects to private and public institutions for the economic development (60% of loans allocated for the private and 40% - allocated for the state sectors).
The EBRD is the Administrator of two international funds - the Nuclear Safety Account and the Chernobyl Shelter Fund. These Funds are financing international technical assistance projects for the preparation of the Chernobyl NPP decommissioning and conversion of object "Shelter" into an environment friendly system.
There are key projects in the public and municipal sectors in Ukraine, the EBRD had planned to finance at present:
- The project of building the Pan-European Corridor for the benefit of "Ukravtodor" (with appropriate parallel financing by the European Investment Bank);
- Expansion of the Trade Facilitation Programme that enables Ukrainian banking institutions to confirm through the EBRD an appropriate trade documentary tools;
- The project of gas compressor stations’ modernization on the pipeline Urengoy-Pomary -Uzhgorod (with the parallel financing by the European Investment Bank);
- The number of projects in the municipal and energy saving sector in the framework of the “Eastern Europe Energy Efficiency and Environment Partnership” (E5P) programme.
The MFA of Ukraine has been coordinating the international cooperation for the Chernobyl accident consequences overcoming for all years of the Ukrainian independence. Particularly, the collaboration with the European Bank for Reconstruction and Development (EBRD), as the Chernobyl Shelter Fund (CSF) and Nuclear Safety Account (NSA) supervisor, has been developing with the support of the MFA since 1997 when the appropriate Framework agreement was signed.
Consolidated CSF and NSA donors' efforts are focused on the New Safety Confinement (NSC) constructing and on the completion of other projects aimed to secure long-term safety of the ruins at Chernobyl. As for beginning of 2014 some 1.5 billions euros had been pledged to the CSF, but a considerable funding shortfall remained: a total of 615 million euros were still needed to be provided by donor countries and EBRD so that the project, much of which was already realized, can be completed.
During last two years a number of annual regular and extraordinary meetings of the CSF and NSA Assemblies of Donors were conducted. In July of 2014 EBRD leadership adopted the decision to provide an additional funding for the NSC constructing in the amount of 350 million euros including 165 million euros from “Group of Seven” (G7) and the EU states.
In 2015 within the framework of such meetings Germany, in context of it's G7 Presidency, also initiated the NSC additional financial assistance providing discussion. The goal of such initiative was to establish full financing of th CSF at the donor conferences and cover the deficit of funding in about 100 million euros. As a result of the last events the EBRD guidance has confirmed that if contributions of the third countries amount to less than 100 million euros the difference will be covered by the bank.
According to the Decree of the President of Ukraine “On Some Issues of Representation of Economic Interests of Ukraine Abroad” No.522 of April 8, 2010 Ministry of Foreign Affairs of Ukraine conducted a comprehensive work that resulted in elimination of trade and economic missions and establishment of divisions on economic issues within the Ukrainian diplomatic missions abroad (hereinafter referred to as UDMA).
Basic principles of activities, functions and tasks of these units are defined by the Provisions of Regulation on the divisions on economic issues within the Ukrainian diplomatic missions abroad and Directives for divisions on economic issues within the Ukrainian diplomatic missions abroad.
The optimization of the number of employees in economic sphere of UDMA was carried out. The importance of cooperation development with other states, particularly in economic sphere, was taken into account as well as opportunities for Ukraine to use regulatory, legal and institutional mechanisms of WTO with a view to advocate national interests on bi- and multilateral levels.
Considering the scope of new powers and functions stated in the Regulation for the Ministry of Foreign Affairs of Ukraine approved by the Decree of the President of Ukraine of April 6, 2011 No 381 redistribution of functions in foreign economic direction was held between structure units of the MFA central office.
The above measures resulted in increase of analyticity of documents and economic materials of UDMA, their quality and efficiency in processing of information generalized by the MFA and sent to the Administration of the President of Ukraine, the Cabinet of Ministers of Ukraine and the other executive bodies of Ukraine together with suggestions on appropriate reaction.
Divisions on economic issues provide overview of basic trends on world financial and economic, energy, agriculture, currency markets, measures taken by the governments of other states on import of goods into markets of relevant countries, including goods produced in Ukraine, international experience of regulation of different spheres of economic activity, interaction of public and private sectors in the most important spheres, actions taken by the governments of other states towards the challenges of the world economic, financial and trade systems.
Thereby the integrity of the state’s foreign policy was reached, efficient system of implementation of public policy in ensuring national economic interests on the world market was established in full compliance with current trends in international relations.