You're reading: Great Britain showcases commitments to nation

The Kyiv Post speaks with British Ambassador to Ukraine Leigh Turner to get his assessment of the state of investment opportunities in Ukraine.

A broad range of British companies took part in the British Business Days exhibition held at Kyiv’s Globus shopping center on March 17-19.

Bentley automobiles, energy giant Shell, airliner British Airways, InterContinental Hotel and clothes retailer Marks & Spencer all made grand appearances at the exhibition – the first of its kind in Ukraine.

Organized by the British Embassy and the United Kingdom’s government agency devoted to trade and investment, the event showcased British companies and investors active in Ukraine.

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A kick-off conference that preceded the exhibition was attended by Leigh Turner, British ambassador to Ukraine; Petro Poroshenko, head of the National Bank of Ukraine’s Council; Mohammad Zahoor, head of the ISTIL Group and Kyiv Post owner; Roger Munnings, board member of the financial corporation Sistema; and David Hill, JCB’s regional manager.

The business leaders took part in a debate chaired by TV presenter Andriy Kulykov and discusses investment climate in Ukraine.

Olexandr Popov, head of the Kyiv City Administration, joined other politicians and business representatives on the firt day of the event.

Poroshenko, the former foreign minister, said: “I want to underline why Ukraine is interested in foreign investors and in British in particular. Usually, foreign companies which come to Ukraine, have a global name, perfect reputation and audit reports. They bring latest technologies, create new qualified and well paid jobs and are a reliable income source to the state budget.”
In order to attract investors, several steps should be undertaken, according to Zahoor, the former steel magnate: “The main task of the government is to improve the credibility of Ukraine as of reliable partner.”

The second day was marked by a visit of Prime Minister Mykola Azarov. On the second and third days, a major exhibition of British business and brands was opened to the public.

In the run-up to the exhibition, the Kyiv Post interviewed British Ambassador to Ukraine Leigh Turner to get his assessment of the state of investment opportunities in Ukraine.

Kyiv Post: Is there a lot of business between Great Britain and Ukraine?

Leigh Turner: Britain is already the seventh biggest investor in Ukraine. Since 1992, we invested around 2 billion pounds [$3.5 billion] in the nation.

There are more than a hundred British companies working here. If we look in the other direction, London is the center of finance for Europe.

Many Ukrainian companies are raising funds using London. One recent example is an agribusiness called Avangard, which is Ukraine’s largest egg producer.

They recently raised 200 million pounds on the London Stock Exchange to modernize their work in Ukraine. So, there is a lot of trade in both directions.

KP: How has the level of British investments into Ukraine changed one year into the presidency of Viktor Yanukovych?

LT: In 2009, when we had the global financial crisis, trade levels were less. They recovered quite strongly in 2010 and are continuing to grow.

There is more macroeconomic stability in Ukraine. There’s been a good proposal for a new law on public procurement.”

– Leigh Turner, British Ambassador.

We still think that there is a lot that we need to do to improve the business climate here in Ukraine. On the one hand, there are positive developments which we welcome.

For example, there is more macroeconomic stability in Ukraine. There’s been a good proposal for a new law on public procurement.

We have promises of action to introduce automatic refunds of value added tax. And we have heard talk about lifting the moratorium on the sales of agricultural land. That’s all positive.

At the same time, we also have continued reports of corruption. We hear about problems with the rule of law.

We have problems at the customs services. We have repeatedly heard about planned changes that will bring the automatic refund of value added tax, but it never quite seems to happen.

In addition to that we have some new challenges such as the introduction of grain export quotas and proposals for a new grain export monopoly. These kinds of things make investors uncertain. Therefore it delays investments and holds back trade.

KP: How have the government’s export restrictions on grain and non-transparent issuance of export quotas affected Ukraine’s investment climate?

LT: I have heard concrete examples of international companies which have been keen to invest hundreds of millions of dollars in agriculture in Ukraine.

But because it has become difficult or even impossible for companies freely to export grain, those investors have thought again about whether they should invest in Ukraine.

The existence of grain quotas, in itself, creates uncertainty in the market. That’s one problem. The second problem is how the grain quotas are distributed.

If you have a system where grain quotas are distributed in such a way that nobody knows quite why some people receive grain quotas and other companies do not, that creates uncertainty.

The IMF and other international institutions have strong mechanisms in place to try and make sure that the money which they give to Ukraine is spent wisely.”

– Leigh Turner, British Ambassador.

It creates the possibility that people will suggest that some companies received grain quotas because they have good connections. This is bad for competition, bad for business.


KP: It’s no surprise to anyone that corruption is a big problem in Ukraine. Wouldn’t it be easier for Ukraine to overcome its problem if the International Monetary Fund, for example, stopped lending until the nation made progress in combating corruption?

LT: The IMF and other international institutions have strong mechanisms in place to try and make sure that the money which they give to Ukraine is spent wisely. We, as the United Kingdom, work very closely with Ukraine in a number of areas to try to diminish corruption here …

We’ve been working with the SBU [Security Service of Ukraine], organizing visits by experts, to help Ukraine tackle cybercrime, counter terrorism and other technical areas ahead of Euro 2012.

But in the end, I think that unless everybody in Ukraine begins to accept that this is a real problem there will a very little progress.

KP: Would tougher measures by the West work, such as travel bans on Ukrainian oligarchs?

LT: We have quite clear rules about who should receive visas. If people meet the required standards we will issue them a visa.

We have quite clear rules about who should receive visas. My message to all the very wealthy Ukrainians is that if you want to get a visa, you have to show in your visa application that you have enough money.”

– Leigh Turner, British Ambassador.

One of my big problems here in Ukraine is that sometimes extremely wealthy people get in touch with me and say: ‘I can’t understand it. I haven’t received a visa even though I have billions of dollars in my bank account.’

Usually, the problem is that people who are very wealthy don’t want to show how much money is in their bank account, so they don’t give enough evidence to the visa officer to demonstrate that they can support themselves in the UK and then the visa officer turns them down during visa application.

So, my message to all the very wealthy Ukrainians is that if you want to get a visa, you have to show in your visa application that you have enough money …

Of course, if somebody lies in their visa application, or if anybody has been convicted of a serious crime, then that might have an effect on their visa application.


Kyiv Post staff writer Oksana Faryna can be reached at [email protected].