Ukraine has taken a major step forward towards the improvement of its investment climate with the appointment of a Business Ombudsman for the country’s Anti-Corruption Initiative that was established in May this year.
The post of Business Ombudsman is a key element in the Initiative agreed under a Memorandum of Understanding among the Ukrainian government, international organisations, including the EBRD and the OECD, and the following Ukrainian business associations: the American Chamber of Commerce in Ukraine, the European Business Association, the Federation of Ukrainian Employers, the Ukrainian Chamber of Commerce and Industry and the Ukrainian League of Industrialists and Entrepreneurs.
The governing body of this Initiative unanimously nominated and the Cabinet of Ministers approved former European Commissioner for Taxation, Customs, Statistics, Audit and Anti-Fraud Algirdas Šemeta to the position of Business Ombudsman.
The Anti-Corruption Initiative was launched by the EBRD as part of a collaborative effort to improve the investment climate in the country and the Bank has since played a pivotal role in developing and driving this effort, devising an appropriate structure and an effective legal foundation for the Business Ombudsman Institution that is being funded by several international donors through the Multi-donor Account for Ukraine* recently established at the EBRD.
EBRD President Sir Suma Chakrabarti welcomed the nomination: “I am glad that the Anti-Corruption Initiative, which the EBRD has championed, is progressing. Improving the investment climate in Ukraine is crucial if the country's economy is to recover and grow,” he said.
OECD Secretary-General Angel Gurria said: “Fighting corruption is an essential element to build trust in institutions and increases the capacity of Ukraine to implement the necessary reforms to attract investment and build a better future. The appointment of the Ombudsman shows Ukraine means business.” This follows Ukraine’s decision to call in the OECD to help tackle corruption, strengthen its tax systems and improve competitiveness.
Dmytro Oliinyk, Vice-President of the Federation of Employers of Ukraine, said that the institution of Business Ombudsman is “a kind of attorney for business" and added: “The Business Ombudsman for investors is an independent person entitled publicly to appeal to the Government if corruption at customs, tax service, public authorities, state regulators are being detected or where the rights of entrepreneurs are impaired.”
Anna Derevyanko, EBA Executive Director: “Speaking on behalf of 900 companies operating in Ukraine, the European Business Association supports the Anti-Corruption Initiative. We believe our synergy will make the fight against corruption possible provided there is political will and commitment from the Ukrainian government and policymakers.”
Mr. Taras Kachka, Acting President of the American Chamber of Commerce in Ukraine: “American Chamber of Commerce in Ukraine welcomes the appointment of Mr. Šemeta to the position of Business Ombudsman. We all know that corruption is the primary impediment to attracting the domestic and foreign direct investment that Ukraine’s economy needs to modernize and grow. The only one way to combat it is to join the efforts of the Government, Business Associations, International Financial Institutions and Civil Society Organizations. In this case appointment of such professional and highly-qualified person as Business Ombudsman is one more step towards the new Ukraine. We are ready to take an active part in discussions and further cooperation with Mr Šemeta and his team aimed at building productive business environment and increase investment attractiveness of Ukraine. Also, I continue to underline the importance of setting Key Performance Indicator (KPI) for ongoing anti-corruption initiatives, particularly a Top 20 in 2020 target for Transparency International’s Corruption Perceptions Index, with a clear road map to achieve this target. This would send a very strong message to those international investors hesitant to invest in Ukraine because of corruption.”
Anatoliy Kinakh, President of the Ukrainian League of Industrialists and Entrepreneurs: “The Ukrainian League of Industrialists and Entrepreneurs (ULIE) supports the EBRD’s initiative on establishing an independent business ombudsman institution in Ukraine and backs up Algirdas Šemeta as a nominee for the business ombudsman post. Of extreme importance is the body’s regulatory status that would allow the business ombudsman or its representatives in the field to respond to requests from entrepreneurs and address their problems on a prompt basis. The business ombudsman’s powers should be clearly defined and supported by relevant legislative norms. They may not overlap with the already existing state structures cooperating with business, and must entitle the business ombudsman to communicate with law-enforcement, fiscal, judicial and other bodies on an equal footing. Investors, both foreign and domestic, are not so frightened by high Ukrainian tax rates and the country’s imperfect regulatory system. Of much greater concern to them is a lack of any state guarantees in Ukraine for the protection of owners’ rights, low corporate security, and prevalence of corrupt manifestations. Only by joining our efforts we will manage to achieve a pragmatic outcome, so desirable both to the Ukrainian industrialists and entrepreneurs and to foreign investors working or willing to work in Ukraine.”
Mr. Šemeta, the newly appointed Business Ombudsman stated the following: "I am deeply convinced that by accepting this very challenging job, I will positively and practically contribute to the improvement of business climate, combating corruption and promotion of best international practices in Ukraine."
In response to Ukraine’s efforts to improve the business climate the EBRD has stepped up its efforts in the country and is on target to invest about €1 billion in private and public sector projects this year alone.
With the creation of this new institution, businesses will be able to report claims of unfair treatment and corruption. The office of the Business Ombudsman will assess the claims. Where it concludes that the alleged business malpractice may have occurred, it will be able to request further investigation by the relevant bodies and seek to have these complaints addressed by governmental authorities.
It will periodically report to the general public, including the business community, about the progress made in the fight against corruption.
Algirdas Šemeta served as Minister of Finance in the Government of Lithuania from 1997 to 1999 and again 2008-2009. From this position he was nominated to become European Commissioner, first for Financial Programming and Budget (2009-2010) and then for Taxation, Customs, Statistics, Audit and Anti-Fraud (2010 – 2014).
*The donors of the Ukraine Stabilisation and Sustainable Growth Multi-Donor Account are Denmark, Finland, France, Germany, Japan, Netherlands, Sweden, Switzerland, United Kingdom and United States