President Volodymyr Zelensky signs a law on reforming tax and customs services. Now all the regional offices of the two agencies will cease to be separate entities and will become branches of the same body – the State Fiscal Service, according to the law signed by Zelensky on Feb. 12. This is believed to be a step toward reforming the state fiscal system. However, the decision to separate these bodies, made in 2018, was one of the International Monetary Fund requirements to provide Ukraine with a $1.4-billion tranche of financing, part of its critical aid to the country.
The Infrastructure Ministry will invest into river, rail transport to reduce traffic on the roads. The docks and ports along Ukraine’s major river, the Dnipro, will see major repairs, Infrastructure Minister Vladyslav Krykliy said on Feb. 12. He also said the government will invest more in railway stations close to the river ports. “We are going to send cargo by other means of transport,” Krykliy said. “One million tons of cargo carried by river can reduce road repair costs by $41 million over four years.”
The Finance Ministry raises $200 million selling government bonds. The ministry has sold 14-month U.S. dollar-pegged government domestic loan bonds for $200 million with a cut-off rate of 3.5% per year, according to Interfax-Ukraine. The demand for government bonds reached $279 million at rates from 3.2% to 4.9%. The Finance Ministry rejected 21 applications out of 69 and lowered the average yield to 3.39% per year.
Ukraine imports 13.4% less petroleum products in January. The country’s imports of petroleum products in January 2020 were almost 600,000 tons, worth $372 million. This is a 13% decrease compared to January 2019, Interfax Ukraine reports. The major sources of the imports were Russia (40%), Belarus (37%) and Lithuania (14%). Ukraine also exported 27,000 tons of fuel worth $16 million, a 24% decrease compared to January 2020.
Revenues from electricity exports grow by 36.4% in January. Ukraine exported electricity for an additional $11 million dollars in revenue in January 2020 compared to the same period last year. The total amount of electricity exports from Ukraine equalled $42 million last January. The major buyers of Ukrainian electricity are Hungary ($23 million), Poland ($9 million) and Romania ($8 million). According to Interfax-Ukraine, last month Ukraine imported electricity worth $26 million.
European Commission’s new leadership intends to boost Ukraine’s economy. European Commissioner Oliver Varhelyi pledged EU economic support to Ukraine in all areas leading to economic growth and job creation. Varhelyi met Ukrainian Prime Minister Oleksiy Honcharuk late on Feb. 11, 2020 to discuss a broad spectrum of issues in economic cooperation between Ukraine and the European Union. Besides trade policies, energy, transport and communications were under discussion, according to UNIAN.
The Ukrainian government plans to update the economic part of the association agreement with the European Union. During his meeting with Varhelyi, Prime Minister Honcharuk stressed that Ukraine looks forward to reviewing the Deep and Comprehensive Free Trade Agreement with the European Union. Ukraine needs “to further liberalize trade, to achieve a balance that will create better opportunities for both parties and, in particular, for Ukrainian exporters in the EU,” Honcharuk said on Feb. 11. “We still have a lot we could do. We will continue to support Ukraine to implement the Association Agreement and reap the benefits this will bring to Ukraine and also to the people of this country,” Varhelyi agreed.
Ukraine intends to obtain an “industrial visa waiver” in 2020 for imports to the European Union. Obtaining the so-called “industrial visa free regime” means that Ukrainian companies will be able to export industrial products to the EU without additional certification. “We look forward to the arrival of a preliminary EU Assessment Mission to Ukraine to kick off negotiations” on the industrial visa free regime, Honcharuk said during his meeting with European Commissioner Varhelyi on Feb. 11. Ukraine has made progress toward accession to the Agreement on Conformity Assessment and Acceptance of Industrial Products (ACAA) with the EU, but still has failed to reach the level necessary to receive an “industrial visa waiver.” The EU and Ukraine intend to sign the agreement in 2021.
Ukraine imported 8.4% less coal and anthracite in January compared to the same period in 2019. The country imported 1.63 million tons this January, which is 149,170 tons less than in January 2019, according to the State Fiscal Service. The main sources of coal, according to Interfax-Ukraine, were the Russian Federation (66%), the United States (28%), and Kazakhstan (6%). Ukraine did not export any coal in January.
