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OECD Investment Policy Reviews: Ukraine 2016

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Ukraine’s post-Maidan authorities have embarked upon an ambitious reform programme to improve the country’s framework for investment and strengthen the country as an attractive investment destination. This review, which was prepared in close cooperation with the Ukrainian authorities in response to their 2011 request to adhere to the Declaration on International Investment and Multinational Enterprises (OECD Declaration), analyses the general investment framework as well as recent reform, and shows where further efforts are necessary. It assesses Ukraine’s ability to comply with the principles of openness, transparency and non-discrimination and its policy convergence with international investment standards such as the OECD Declaration. In light of the recently updated OECD Policy Framework for Investment, it also studies other areas such as investment promotion and facilitation, infrastructure development; financial sector development and responsible business conduct practices. In the scarcely two years since a new attempt at economic reforms was launched in earnest, Ukraine has made quite important progress in introducing a modern legal framework for investment. But additional efforts are required in some policy areas to reaffirm Ukraine’s attractiveness for investors.

 

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The policy framework for investment in Ukraine

During 2014-15 Ukraine deployed significant efforts to improve its investment environment. The ratification of the Association Agreement with the European Union and the entry into force of its economic part in January 2016 have provided an anchor for many reforms. Recent initiatives have focused on reducing administrative burdens and improving public procurement. The government has also introduced significant tax reforms, resulting in better tax transparency, and made headway on reducing bribery and other forms of pressure on businesses with the establishment of a Business Ombudsman institution. Corruption nevertheless remains a serious challenge, and investors still complain about inadequate enforcement of anti-corruption legislation. Problems in applying laws and regulations continue to plague the business environment and public consultation mechanisms are not yet fully satisfactory. The overall policy and institutional framework for investment promotion and facilitation needs to be consolidated.

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