Category: News

Ukrainian Danube Shipping and the International Finance Corporation (IFC), which is part of the World Bank Group, signed an agreement on attracting private investment for the modernization and expansion of the fleet at the Ukraine Recovery Conference in London, reported the press service of the Ministry of Community Development, Territories and Infrastructure.

The International Financial Corporation will also promote the implementation of European standards of corporate policy, compliance, and financial transparency in the Danube Shipping Company.

Renewing the fleet of the Ukrainian Danube Shipping Company will allow to expand the capabilities of the logistics ecosystem of the Danube. The Danube cluster is an effective alternative route for cargo circulation in conditions of blocking of the main sea routes.

Ukrainian Danube Shipping Company is a state-owned private joint-stock company.

After the full-scale invasion of Russia, the company rebuilt its business model, introduced reforms for transparent and efficient management. Ukrainian Danube Shipping Company launched new lines of activity, implemented a number of investment projects, started construction and modernization of the fleet, the ministry notes.

For the first time in its history, Danube Shipping received a profit from its activities, as a result of which the state budget received record dividends in 2022 – more than UAH 146 million ($4 million).

At the beginning of May 2023, Ukraine received an additional $1.5 billion from the Danube ports after the liberation of Snake Island in the Black Sea.

On June 21, a ship with a record deadweight of 24,000 tons entered the port of Izmail in southern Ukraine.



https://biz.liga.net/en/ekonomika/transport/novosti/dunayskoe-parohodstvo-dogovorilos-so-vsemirnym-bankom-ob-obnovlenii-flota

As reported by RBC-Ukraine (see link to press release), Philip Morris International invests over 30 million US dollars in launching a new production in Lviv region. Preparatory work on the future factory will start just in July 2023.
The company notes that the production will facilitate complete satisfaction of domestic demand.
The company expects starting production process just in the first quarter 2024. The new factory will employ over 250 people engaged mostly in production. Employment will be primarily offered to employees of the company’s Kharkiv plant.
Massimo Andolina, president of the company’s European region, says, “We are proud to announce this new investment in Ukraine. Our new enterprise will secure reliable supply of products and employment opportunities for Ukrainians. But this is more than just an investment in infrastructure and expansion of our company’s capacities. In fact, it shows our commitment to Ukraine and its people. Such investment is a powerful signal to other international investors – confidence in economy of Ukraine, the Ukrainian people and the future of Ukraine”.
For his part, Maksym Barabash, Philip Morris Ukraine Director General, added that investments in the new enterprise once again show the company’s support for Ukraine.
He notes, “Such investment embodies our commitment as a long-term economic partner of the country. New production at the location proposed by UkraineInvest will create jobs, satisfy the Ukrainian market demand with quality products and support the Ukrainian economy in a difficult time. We are not waiting for end of the war – we are investing now”.
Philip Morris Ukraine has been operating on the Ukrainian market since 1994. For this time, the company invested over 700 million US dollars in the economy of Ukraine. In 2022, Philip Morris Ukraine paid 25.3 billion UAH as taxes in the Ukrainian budget.

https://www.rbc.ua/rus/news/kiyivskiy-oblasti-poshkodzheno-lep-cherez-1687250272.html

In brief

On 17 May 2023, at the Council of Europe Summit, the European Union and 43 other countries signed the agreement on the Register of Damage Caused by the Aggression of the Russian Federation Against Ukraine (“Register”).

The Register constitutes the first component of a future international compensation mechanism, which is intended to compensate damages caused by the Russian Federation’s aggression against Ukraine.

The signing of the agreement was preceded by the Resolution of the Committee of Ministers of the Council of Europe dated 12 May 2023 establishing the Enlarged Partial Agreement on the Register and the Statute of the Register.

About the Register

The Statute provides that the Register will be created as a legal entity under the national law of the Kingdom of the Netherlands and Ukraine with its seat in The Hague (the Netherlands). The statutory functions of the Register are as follows:

• Receive and process information on damage claims and evidence.
• Classify and organize such claims.
• Assess and determine the eligibility of such claims for inclusion in the Register.
• Record the eligible claims for the purposes of their future examination and adjudication.

As can be seen from the provisions of the Statute, the right to submit a damage claim should be granted to natural and legal persons, as well as the State of Ukraine, including its regional and local authorities, and state-owned or controlled entities that suffered damage, loss or injury that was caused on or after 24 February 2022 in the territory of Ukraine by the Russian Federation’s internationally wrongful acts in or against Ukraine.

It should be noted that the Register should have no authority to adjudicate claims, including determining responsibility and allocating any payments or compensation. Such authorities will be granted to other bodies established within the framework of international compensation mechanism.

Such a mechanism may provide for the establishment of a claims commission and a compensation fund authorized, accordingly, to adjudicate claims and/or pay compensation for damage.

In addition, the document also provides for the establishment of a satellite office of the Register in Ukraine for the purpose of facilitating contact with potential claimants in Ukraine, in particular, with regard to the existence and purpose of the Register, the procedure for filing claims for damage, etc.

Conclusions and recommendations

As of today, the Register is in the creation stage. The Statute of the Register provides that the date from which the Register shall be open for submitting claims will be determined later. It also provides that the eligibility criteria for recording claims in the Register shall be determined in the rules and regulations of the Register.

In light of the above, we recommend following the publication of information on the opening of the Register and the eligibility criteria for the purposes of correct completion and timely submission of claims for damage.


https://eba.com.ua/en/mizhnarodnyj-reyestr-zbytkiv-zavdanyh-agresiyeyu-rf-proty-ukrayiny-pidpysano-ugodu-pro-stvorennya/

On the second day of the Council of Europe Summit in Reykjavik, Iceland, Marija Pejčinović Burić, Secretary General of the Council of Europe, Katrín Jakobsdóttir, Prime Minister of Iceland, Mark Rutte, Prime Minister of the Netherlands, Thórdís Kolbrún Reykfjörd Gylfadóttir, Minister for Foreign Affairs of Iceland and President of the Council of Europe’s Committee of Ministers, Denys Shmyhal, Prime Minister of Ukraine, and Denis Malyuska, Minister of Justice of Ukraine, have announced the establishment of the Register of Damage Caused by the Aggression of the Russian Federation Against Ukraine through an Enlarged Partial Agreement.

44 countries and the European Union have joined or indicated their intention to join the Register set up by the participants to the Summit of the Heads of State and Government of the Council of Europe held in Reykjavik on 16-17 May 2023. (*)

“Support and solidarity with Ukraine is one of the main priorities of the Icelandic Presidency and we have worked hard to ensure that the outcome of the Reykjavik Summit addresses the need for comprehensive accountability for Russia’s aggression against Ukraine,” said Katrín Jakobsdóttir. She emphasised that “the Council of Europe can and should play an important role in ensuring accountability. The Register is an important step towards accountability for crimes committed in Russia’s brutal war and a strong message of support to Ukraine.”

Marija Pejčinović Burić said “the decision to set up the Register of Damage under the auspices of the Council of Europe is an historic decision”. She said “it will support victims in recording their losses and is vital for any compensation mechanism. Supported by a very large coalition of member and non-member states, and by the EU, it is one of the first legally binding decisions to hold Russia accountable for its acts.”

The European Union, represented by the President of the European Council, Charles Michel, and the President of the European Commission, Ursula von der Leyen, has provided a substantial contribution towards the startup costs. The Register will have its seat in The Hague (the Netherlands), with a satellite office in Ukraine and Mark Rutte underlined that “Russia must be held accountable, including for damage suffered by Ukraine and its people. We are therefore proud that the seat of the Register of Damage will be in The Hague, the legal capital of the world”. The Register is established for an initial period of three years and will serve as a record of evidence and claims information on damage, loss or injury caused by the Russian aggression against Ukraine. It paves the way towards a future international comprehensive compensation mechanism for the victims of the Russian aggression.

Denys Shmyhal said that “Ukraine welcomes the establishment of the Register of Damage. We are grateful to the Council of Europe and all the participating states for such a high level of support. We invite other states, from all corners of the world, to join the Register of Damage as a sign of support for the important issue of Russia’s accountability for its war against Ukraine. The Register is an important milestone on the road to justice and reparations for Ukraine and the Ukrainians who have suffered so much from this war. The hard work begins now – we need to ensure that the Register becomes operational soon, so that victims of Russian aggression could submit their claims. We also emphasise that the establishment of the Register is only the first step towards the establishment of a comprehensive compensation mechanism that will ensure that Russia pays full reparations to Ukraine in accordance with international law, including by means of its internationally located assets. We look forward to working with our partners on this important issue.”



https://www.coe.int/en/web/portal/-/council-of-europe-summit-creates-register-of-damage-for-ukraine-as-first-step-towards-an-international-compensation-mechanism-for-victims-of-russian-aggression

Transaction cost: 2 million EUR

Practices: Investments & Transactions, Corporate & Tax

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Interlegal acted as the Ukrainian company’s legal advisor, while the latter received a long-term loan amounting to 2 million EUR from the European Bank for Reconstruction and Development.

This loan will be aimed at restoring a recreation of Odesa mall “Riviera shopping city” owned by the Client affected by shelling by the russian army.

Interlegal lawyers drafted a complex legal opinion for EBRD regarding compliance of financial transactions with the Ukrainian law and their performance in Ukraine. Interlegal lawyers Dmytro Bondar and Irina Maltseva, associate attorney Marta Sverdlykivska, managed by associated partner Karyna Gorovaya and partner Artem Skorobogatov, led the case.

Denmark launched a special investment fund for Ukraine amounting to 1 billion DKK, i.e. ca. 133 million USD, as reported by the Ministry of Economy of Ukraine under the results of the Investment Forum in Copenhagen. 

Yuliia Svyrydenko, the Minister of Economy of Ukraine, explains that such investment fund will finance projects with Danish technologies and innovative solutions involved, available both to public and private sectors. 

Oleksandr Hryban, the Deputy Minister, notes that Ukraine sees great prospects in applying and placing Danish companies in Ukraine in priority industries, such as renewable energy, building materials, utility recovery technologies, as well as defense technologies and dual-purpose technologies. 

Forum speakers have announced on approval of financing for two pilot projects in agriculture and agrarian processing. Funds will be granted to war-affected companies in the south of Ukraine: for instance, Nibulon will receive 25 million EUR, while Agrofusion will gain 15 million EUR. 

Also, loans will be provided to agricultural companies located in Mykolaiv near the front line, aimed to restore destroyed production facilities by purchasing equipment from Danish exporters. 

Yuliia Svyrydenko notes that from the beginning of the full-scale war Denmark granted military aid to Ukraine equal to 1.4 billion USD, as well as sent humanitarian aid, including macro-financial, in the amount of 212 million USD. 

https://hromadske.ua/posts/daniya-vidkrila-investicijnij-fond-dlya-ukrayini-na-dollar133-mln?fbclid=IwAR2eYUlmD-NHvrRRmmMH7E-WJM73U2BGd7MjGXxAl8GVvM7PEaOJM8jMJn0

The European Bank for Reconstruction and Development resumed work aimed at Chornomorsk Sea Port modernization plan. 

The bank is resuming work upon providing assistance to the Ukrainian government aimed at Chornomorsk Sea Port modernization which was suspended after full-scale invasion of the russian federation into Ukraine. 

In addition, the EBRD and the International Finance Corporation (IFC) will provide experts and consultants to help Ukraine in drafting a tender for concession and fixing relations with investors, as reported by the EBRD. 

We remind that the Chornomorsk Sea Port terminals being prepared for transfer into concession, namely terminals No. 1, No. 5 and container terminal. 

The first stage is to develop feasibility study, the next stage is to hold the tender among those wishing to obtain a concession for the Chornomorsk Sea Port terminals. The process of drafting feasibility study will be financed by the Global Infrastructure Fund. Both the European Bank for Reconstruction and Development and the International Finance Corporation engage experts and consultants. 

Oleksandr Kubrakov, the Deputy Prime Minister for Reconstruction of Ukraine, noted that the future investor’s task is to effectively manage the Chornomorsk Sea Port terminals and to develop them.

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The European Commission has confirmed that it has developed legally acceptable options for using Russia’s assets, both private and state-owned, to restore Ukraine.

Source: Christian Wiegand, the spokesman for the European Commission, reported by European Pravda

Details: According to Wiegand, the assets of Russian individuals and legal entities under EU sanctions worth about €24.1 billion have been frozen in the European Union. The sanctions do not provide for the seizure of these assets, as this would violate the law.

Quote from Wiegand: “We have put forward a proposal to criminalise the violation of EU restrictive measures, and discussions with other EU institutions have already made significant progress. This will allow for the seizure of these assets in case of sanctions evasion, which will be done in accordance with the law, in this case, criminal law.”

More details: As for the state-owned assets of the Central Bank of Russia, they cannot be simply confiscated, but the European Commission suggested a different way at the end of last year.

“The idea is, in fact, to work with these assets and use the profits from them. Because, again, we have to follow the rule of law and cannot simply confiscate such assets. But, according to our legal opinion, we can work with these immobilised assets,” Wiegand added. 

Background: Earlier, US Attorney General Merrick Garland authorised for the first time the transfer of seized assets of a Russian oligarch to Ukraine for reconstruction purposes.

https://www.pravda.com.ua/eng/news/2023/05/11/7401736/

The European Bank will grant one and a half billion euros for Odesa Region restoration, but this is not related to the damage caused by hostilities, as reported by Tetyana Khomenko, the UN Program representative. She notes, 11 reconstruction projects have been approved in Odesa under the program of restoration of Ukraine, while two more are waiting for approval. 

It will be capital repair, reconstruction of the infectious disease hospital, repair of the first clinical hospital and several more schools in the city. It also includes hospitals, schools and kindergartens in the region, in particular, on the territory of the Baltic Community. Tender selection took place in August & September last year, the list of facilities was drafted jointly with the Odesa Region communities. We note that Odesa Region is the runner-up after Kyiv Region as for the number of restoration projects. We remind that Odesa Region is planning to hold four international expert events upon restoration of the region in order to join project development various industries. 

https://od.vgorode.ua/ukr/news/sobytyia/a1240132-jevropejskij-bank-vidilit-pivtora-miljarda-jevro-na-vidnovlennja-odeskoji-oblasti?fbclid=IwAR0HM_2F7qgMliNxmt89cUCqJXeo_3H7Nxj2WexZyEri03s7IZZL4Np3hl4

The Advantage Ukraine investment platform team in partnership with the Ukrainian Economy Ministry, has prepared the first investment projects totaling $430 million and forwarded them to the United.

“The first five projects have been accepted for consideration by the DFC. In particular, these are projects of Ukrainian investors in the construction, manufacturing, e-commerce, and residential real estate sectors totaling $430 million. Each of them will be evaluated separately. There is also a lending project worth several million [U.S. dollars] for a foreign investor to manufacture construction materials,” Deputy Economy Minister Alexander Giban said.

Several projects are being reviewed at an early stage now, which Advantage Ukraine expects to forward to the DFC soon, Giban said. In particular, these include projects in the logistics, high-degree processing of agricultural products, energy, animal husbandry, and construction materials sectors, he said.

The DFC recently announced its willingness to mobilize over $1 billion in private capital to support the Ukrainian economy, the ministry said.

The Ukrainian Economy Ministry and the DFC are working together to prepare and compile a list of investment projects with assistance from Advantage Ukraine, whose project team is in charge of the initial selection of projects with support from the USAID Competitive Economy Program in Ukraine and in cooperation with applicants.