Cover Story (#11 November 2013)

Danylo Getmantsev: Demanding Changes Domestically

As a part of the autumn series of events to celebrate the 10th anniversary of Jurimex Law Firm, on 2 October the conference “How to Start Business in Ukraine” was held by Jurimex Law Firm and its Spanish partner, law firm Global Abocados, in cooperation with the Chamber of Commerce of Barcelona. The conference generated keen interest on the part of Spanish businesses as they are very actively looking for investments in new markets. Apart from it, the conference covered the main aspects of investment climate in Ukraine for a foreign business.

We have asked Danylo Getmantsev, PhD, honorary president of Jurimex, to share his comments on the venue.

UJBL: Why did you choose Spain? What were the criteria for you choosing the country?

Danylo Getmantsev: To begin with, the event that was held by Jurimex was not the first event of that level. We have organized a similar event in Prague for Czech businesses together with the Chamber of Commerce of the Czech Republic this year. That time we were surprised by the interest and response the event triggered in the Czech business environment. It turned out that there is huge interest in our country. Information is extremely scarce, and myths and rumors caused by some adverse features of business life in Ukraine scare off investors, who discard Ukraine as an object of their business interests. We targeted Spain after we examined the volume of trade between the two countries. It turned out that one of the most powerful economies in Europe has much less business with Ukraine, than, say, France or Italy. And it is not because Spaniards are passive. The reason is there is a lack of information and we made an attempt to resolve the problem with the resources we had available. Our partner, a well-known Spanish law firm, Global Abocados, which serves Spanish businesses, also played a significant role. Our partners provided us with significant support for staging the conference.

UJBL: How did Spanish businesses receive you?

D.G.: You know, the main concern of our partners was that there would be few persons willing to participate in the conference. However, there were not enough seats in the large conference room of the Barcelona Chamber of Commerce as businessmen even from Madrid came to attend. And we understood that the event succeeded. The fact is that the current EU economy is not very attractive for investment, as it offers a disproportionately low interest compared with developing economies. Business is looking for investment opportunities outside. Of course, emerging economies have additional risks. Therefore, we focused on persuading Spanish businesses that doing business in Ukraine is not only profitable, but also safe. 

UJBL: Some examples of illegal actions against businesses in Ukraine worked against you.

D.G.: Indeed, the news from Ukraine is akin to war reports for foreigners, and they constitute the main factor generating fears with regard to our country. They speak openly about the fears. The things that we face in certain sectors of Ukraine’s economy, the nature of our clients’ problems that we are supposed to solve, those cannot be accepted as the normal course of affairs. To date we have faced some instances of raiding and not only by individual criminals but also by the state, whose officials often abuse their powers. This is unacceptable, and it hurts, and to be honest one would rather run away from this. But as they say the grass is greener on the other side of the fence. Therefore, I would not say that the legal system in Europe is ideal, and I would not demonize our country either. The fact is that Europe has had its long historical road over and along the road; bribes to judges have been transformed into state duty and legal purchase of offices has been replaced by a transparent competition of equal applicants. We have been going along this road for 20 years. We have little experience or knowledge, many of us are even unwilling to change anything. But our path is predetermined. And I am convinced that it is in Europe.


UJBL: Is this what you tried to convince the Spaniards of?

D.G.: Yes, and also that if they join this process with us without fear to invest money right now, when things are not perfect, their efforts and risks will be plentifully compensated in the near future. The assessment “not perfect” has various shades, but in our case it should be understood literally. Because, in less than 30 years (the life span of one generation!) we have managed to develop quite good legal, judicial, taxation system, protection of rights and legitimate interests of businesses. Of course, there are issues of all kinds, including governmental and legal. Social institutions need adaptation and the political will is needed for the purpose of consistent implementation. But now that the Ukrainian government has made the final and irrevocable decision to integrate with the EU, the last border line has been crossed on the road to the European public life in Ukraine. By the way, I strongly disagree with the myth of the Soviet or — what is even worse — of the Slavic roots of corruption. Corruption is a phenomenon without nationality. It will always be present in any government and any society, and also any reasonable government will build a system of relationships and restructure the society in order to minimize the impact of corruption. I will say more. The issue of corruption is not the government’s concern. It is an issue which concerns all citizens, as they are just as much responsible for it than the government. If you want to live in Europe, begin with yourself, with the little things — stop at red lights, keep your turn in the line, don’t give bribes. As soon as people understand that compliance with the rules and basic human decency are more profitable (even in the material sense) in the long run it would mean that the half of the path has been trodden. Though it might be surprising for you but kickbacks, which is so typical of post-Soviet countries, is a well known phenomenon not only in Spanish, but also in Italian and Greek economies (of course in the scope incommensurate with our practices). 

UJBL: Did Spanish businesses agree with you?

D.G.: Certainly, we did not discuss ways to eliminate corruption in Ukraine. I am of the opinion that we need to criticize the government and demand changes domestically. When abroad, we cannot wash our dirty linen in public. Otherwise, we would discredit not only the government but also ourselves, our homeland in the broadest sense of the word. That is how myths about the semi-wild Ukraine originate, the myths, which we are working hard to overcome.

UJBL: In your opinion, what will be the outcome of the conference, as it is difficult to hope that Spanish business will rush to come to Ukraine?

D.G.: Of course not. Such hope is naive. After all, attraction of investments is a complex and thorny path that cannot be taken by a single law firm by itself. But the events, where foreigners see ordinary people, citizens of Ukraine who are proud of their country in spite of all the problems that exist, who share many universal values with Europeans and, importantly, speak in the same language, bring our countries closer.

UJBL: And association with the EU, do you think it will have a predetermining impact?

D.G.: I will tell you more — not so much for Europeans, but for us. It is an illusion that ordinary Europeans trace our international policies. But for us it is much more than just an international agreement. It is our hope, the light at the end of the tunnel. Until recently, I could not believe that our current government would be able to make this choice. Believe me, I have absolutely no illusions as to the quality and nature of the current government team. I know it well from inside. That’s why I understand that common sense and the long-term outlook gave an opportunity for the country’s leaders to win over short-sighted politicians. And that’s where I see the guarantee of our further integration with European countries.

UJBL: Does Jurimex intend to continue its European initiatives?

D.G.: Of course! By the end of the year we plan to hold a similar event with our partner Global Abocados. Our colleagues will explain the features of investing in Spain (mainly on private investments, including in real estate). This fall, we hold a similar conference in one of the countries of Central Europe. For spring 2014, we have already agreed to hold an event in the Czech Republic. We intend to make it an annual event. At the Barcelona conference, we were asked to take in Madrid. We are also negotiating with the Chambers of Commerce of other countries.

We understand that we cannot cover everything, but we will certainly make our contribution to the development of Ukraine’s European contacts!

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