Corruption, lack of fair trial scare investors away

80% of companies do not feel the reforms in Ukraine have caused any positive changes.

This was stated by representative of the European Business Association Yulia Venherovych, referring to the research into investment and business attractiveness of the national economy.

“”More than 50% of companies describe the business climate in Ukraine as unfavorable. There are three main reasons: huge level of corruption, imperfection of tax laws, and inability to defend their interests in the court. I want to turn your attention to the fact that ongoing military operations in the territory of Ukraine are not among the top three,” the Human Rights Information Centre correspondent quotes Yulia Venherovych as saying.

The expert says that the Association is often addressed by the member companies following the raider attacks or failure to protect their legitimate rights and interests in the court.

“We are often invited to the hearings. Therefore, the foreign investor can effectively protect its business interests only when he draws the attention of the public, the government officials, and the business associations to a particular problem. Ukraine loses huge sums at the European Court of Human Rights due to the fact it cannot provide a fair judicial protection for the foreign investors,” Yulia Venherovych says, noting that Ukraine needs to develop the investment-security concept, based on effective and fair protection of its rights and interests in the court.

Yulia Venherovych mentions that many investors seek the Association’s advice on investment directions, but the unpredictable “rules of game” of the judicial system stop them.

Andriy Klymenko, the founder of the Alla Company operating in Ukraine, the Western Europe, America and China, confirms the negative experience of defending his rights in the Ukrainian courts.

“We have a number of trials, lasting for more than a year. The judges simply put off hearing for four or five times for inadequate reasons. It’s just violation of the law, it’s situation of absolute impunity, and it further remains such,” he says.

Andriy Klymenko believes that the current judicial system in Ukraine is also a business.

“I know people who realize they will become judges in three or five years. He needs to reach a certain age, so he pushes a pen in the tax office, or deals with papers somewhere in the prosecutor’s office. He knows he will be the judge in five years. He knows how much money he has to pay, and how much money he will earn in court later. When asked why he wants to work there, he says, “Well, I must make money somehow. I don’t know how to earn money. I don’t know how to do business because it’s a risk. I would need to work, to strain myself, to read books, to consult, not sleep at night, but it will be all right if I go to the court,” Andriy Klymenko says.

According to Klymenko, the court currently adjourns the hearings, thus putting lawyers in a situation when they have to go and “solve problems.”

Andrius Venskunas, President of the Ukrainian-Lithuanian Business Club, who was forced to close down his business in Ukraine in 2004, does not believe that the current government will be able to solve the problem of Ukraine’s business attractiveness. He argues that the government’s approach has not changed and does not differ from the approach of the authorities under all the previous presidents.

Andrius Venskunas recommends that the Ukrainian authorities should attract foreign business advisors to speed up the reconstruction of the state.

“Dear Europeans, I sincerely ask you to help Ukraine! These people in power will not help,” President of Ukrainian-Lithuanian Business Club appealed emotionally to the embassies’ representatives.

As known, the experts called on the Constitutional Commission and the President to consider the proposals from the public on the eve of adoption of the draft amendments in terms of judiciary.

They note that, despite the conclusions of the Venice Commission, the amendments retain a layered and intricate judicial system, do not provide for renewal of the judiciary, and step up the dependence of the judges on political bodies, in particular, on the president.

As a reminder, only 9% of Ukrainians trust the Ukrainian courts, while 81% express their distrust of courts, according to results of the poll, conducted by the Ilko Kucheriv Democratic Initiatives Foundation.