Here is the October 30, 2024 edition our weekly Ukraine Business Roundup newsletter. Subscribe here to receive the latest news on business and technology from Ukraine in your inbox.
Starting mid-November, companies in Ukraine who were expecting to be “reserving” their employees from military service may not be able do so.
The government of Kyiv announced last week that they are currently auditing the exemption process to determine which businesses qualify for the “critical enterprise status”, which allows them to avoid having to serve some employees.
Since the beginning of the full-scale invasion in Ukraine, some men of conscriptionage have been exempted from conscription. This is to keep strategic sectors, such as the defense industry, afloat, and to reduce the economic toll of Russia’s war.
As the war enters its third year, Ukraine struggles to mobilize enough troops to compensate for troop losses and the need to rotate the soldiers who have been fighting in the conflict since 2022.
In Ukraine, this is a controversial issue. Some feel it’s unfair that some people don‘t serve because of their profession. It has also led abuse of the system.
In mid-August, around 1.5 million Ukrainians were exempted from military service.
A high-ranking official from the Presidential Office, who declined to be named, told NV that President Volodymyr Zelensky was unhappy with the high number and the fact that it had almost doubled in a few months. This led to the decision to conduct the audit.
The audit was prompted by the abnormal growth in the number critical enterprises and reserved employees. The Cabinet of Ministers stated that this is done to strengthen the country’s defence capability and prevent abuses.
The government announced over the weekend that employees who were exempted from military service in “strategic sectors” of the economy before May 31, 2024 will be able extend their exemption.
Watch this space for updates on the situation.
Naftogaz wins against Russia
Naftogaz reported on October 28 that a Finnish court had ruled in favour of Ukraine’s state oil and gas company Naftogaz, allowing it to seize Russian assets worth tens or millions of dollars in Finland as part of its claim against Russia for its annexation Crimea.
A tribunal in The Hague has ordered Russia to pay Naftogaz $5 billion in 2023 as compensation for assets illegally confiscated during the Russian occupation in Crimea in 2014. However, Russia has not yet paid this amount.
“Since Russia has refused to pay Naftogaz in full the funds stipulated in The Hague decision we continue to use every available mechanism to collect them.” “We are now one step closer to restoring the justice,” said Oleksii Chernyshov, CEO of Naftogaz, following the Finnish court decision.
The Finnish daily Helsingin Sanomat reported that Finnish authorities confiscated Russian state property as early as October 28, seizing the Russian Center of Science and Culture at Helsinki.
Dmitry Peskov, the Russian president’s spokeswoman, told reporters that Moscow will “use all legal means to protect our interests.”
Real estate mogul dies aged 61
Adnan Kivan was a businessman who owned the Kadorr Group, the English-language Ukrainian Kyiv Post and the Kadorr Group. He died on October 28, according to a group statement.
The millionaire and investor from Odesa, Syria, would have celebrated his 62nd birthday in December. The cause of death was not specified in the statement.
The Kadorr Group’s main projects are construction and real estate. Forbes Ukraine ranked Kivan as the 42nd wealthiest person in Ukraine in 2021 with a fortune worth $240 million. His group was also engaged in agriculture and media.
Kivan bought the Kyiv Post from British-Ukrainian Mohammad Zahoor in 2018. In November 2021, Kivan suspended the Kyiv Post after a conflict over editorial independence.
After being fired, the former editorial team of Kyiv Post founded Kyiv Independent. It is now the biggest English-language media outlet of the country.
Cash for Everyone
Last week, the government of President Volodymyr Zelensky made a decision which brought back memories of Covid. It decided that every Ukrainian would receive an Hr 1,000 payment (about $24) to “support the population during winter.”
Isn’t Ukraine’s military and budget starving for funds? According to the government the money will come from funds that Kyiv received from its international partners and which must be used before the end year. They can’t go to the military.
The money can only be used for certain services, such as utilities, medicine and transport, cell phone plans or buying Ukrainian books. The government has said that people can also donate their money to army if they so wish.
Uncertainty surrounds the amount of funds that will be distributed. However, a deputy economy minister stated that a similar decision made during the Covid-19 Pandemic cost the government Hr 8 billion or around $200 million.
The final amount of the program for three winters months will depend on how many Ukrainians want to use it. Oleksiy Solobolev, deputy minister, said that it was not possible to specify the final amount at this time. Those who “don’t want” to participate in the program might not want to open the special account required to receive the funds.
There have been many reactions. Some have wondered why the government doesn’t direct the funds towards investments or low-income families. Others have wondered how the money will be delivered to the elderly and children who don’t have access to banks.
Prime Minister Denys Schmyhal defended the government’s decision. He said that the move had three major goals: to financially support Ukrainian families, to activate domestic demand for Ukrainian service, and to “demonstrate unity of Ukrainian society for stability and victory.”
If you live in Ukraine, especially in Kyiv, you will know that 24 dollars won’t get you far. I think many people will donate to the military.
Russia gets a free pass once again
After days of discussion, the world’s foremost anti-money laundering watchdog (FATF), decided last week not blacklist Russia, despite Kyiv’s efforts to influence members to do so due to the Kremlin’s increasing ties with North Korea and Iran, which are blacklisted.
Timothy Ash, senior emerging market (EM), sovereign strategist at BlueBay Asset Management told the Kyiv Independent that the FATF’s decision not to blacklist Russia revealed the lack of leadership in the West when it came to curbing Russia.
He said, “This should have a slam-dunk.”
Click here to read more.
What else is happening?
Ukrainian agricultural giant receives loan of $150 million from international lenders
Kernel, one of Ukraine’s biggest agricultural holdings, announced in a Facebook post that it had received a $150 million loan from ING Bank and Cooperatieve Rabobank of the Netherlands, as well as the Black Sea Trade and Development Bank. The funds will support operations to increase exports of Ukrainian agricultural goods, including sunflower oil.
G7 to provide Ukraine with $50 billion in loans secured by frozen Russian assets
The Group of Seven (G7) announced on October 25 that it had reached an agreement with Ukraine to provide a loan of approximately $50 billion backed by revenue from Russian assets abroad. The G7 leaders stated that they hoped to start disbursing funds by the end the year.
Kremlin: Russians are ‘legitimate targets’ for the Rheinmetall plant in Ukraine
Dmitry Peskov, Kremlin spokesperson, told Russian state-owned news agency Ria Novosti that the new factory of German arms maker Rheinmetall, which opened late October in Ukraine is a “legitimate target” for Russian attacks. According to Rheinmetall CEO Armin Papplerger, the facility, which already operates in Ukraine at an unidentified location, will produce a batch if Lynx infantry combat vehicles by the end the year.
EU increases capacity to export electricity in Ukraine to 2.1 gigawatts before winter
Transmission System Operators of Continental Europe are increasing their export capacity for Ukraine and Moldova from 400 megawatts to 2.1 gigawatts starting December 1, allowing Ukraine a greater reliance on electricity imports during the winter months when blackouts can be expected. Russia launched a massive aerial campaign against Ukraine’s energy grid in the spring. The attack destroyed 9 GW of capacity.
JP Morgan Chase CEO: ‘We cannot have a negative outcome’ on Ukraine and Russia’s nuclear threat
Jamie Dimon, CEO of JPMorgan Chase, said that nuclear proliferation is the greatest risk mankind faces at an Institute for International Finance event on October 24. Dimon said that the West must have clarity and prioritize many things to “ensure that this ends right.”
Liliane is a business editor for the Kyiv Independent. She worked previously at the Kyiv Post, first as a business reporter and then as a business editor. Liliane has a master’s in Russian, Eastern European and Eurasian Affairs with a focus in Ukrainian studies from Columbia University. She served as a Peace Corps volunteer in Ukraine from 2017-2020, and then interned at the Atlantic Council’s Eurasia Center.
Read More @ kyivindependent.com