Serhiy Kiral: Destruction of the investment climate in Lviv – the new action front of Lutsenko’s Prosecutor General’s Office

The new front of politically motivated, selective actions of the authorities represented by the Prosecutor General’s Office of Yuriy Lutsenko: this time it is the investment climate in Lviv that is under the gun. Foreign investors are being frightened off, which, according to the authorities’ plan, should result in the outflow of foreign capital, loss of jobs, and the gradual decline of Lviv as the city friendly for foreign investors.

In 2012, Lviv was the first to develop and approve by the council’s decision the concept of development of the industrial park “Riasne-II”. It was introduced into the state register under number “3”. Following the results of an open competition (the competition commission was headed by the current chairman of the Lviv Region State Administration, the then first deputy mayor of Lviv Oleh Syniutka), Dutch company “CTP”, which is the undisputed leader in Europe in development and management of industrial parks, was involved.

The city has been persuading the investor for three years that nothing was as bad as it looked and that it was safe to invest in Ukraine. We discussed the investor’s plans with the then first deputy minister of economy of Ukraine, Yulia Kovaliv. We had advertisements of the company’s industrial parks in the Czech Republic right at the exit from the “Arrivals” in Prague airport.

And then, the government launched an offensive and it keeps hitting the most vulnerable points of the stable development of Lviv, of its competitiveness and image of the city as comfortable for living and attracting investments. Because the mayor of Lviv – leader of the Samopomich Union – and Lviv itself with its million community are becoming a hostage in the attempts of political violence against the democratic, constructive opposition.

Six months ago, the Prosecutor General’s Office launched a criminal proceeding into the abuse of authority by the mayor, who allegedly sold a plot of land at a lower price than its normative estimate. I have already written about this.

A few weeks ago, at the request of the Prosecutor General’s Office within the criminal proceeding mentioned above, the Pechersk District Court of Kyiv gave permission to conduct an unscheduled inspection of the taxpayer concerning his paying taxes. But wait, how is this related to the criminal proceeding mentioned above? The Prosecutor’s Office has no right to conduct checks in the frame of general supervision. It turns out the decision of the court is illegal.

Following the results of the inspection, inspectors of the State Fiscal Service in the Lviv region draft an act by which they make the CTPark pay more than 1.2 million UAH of land rent for the three months of 2015. The representative of the company, KPMG, write 4 pages of objections and appeal to the President of Ukraine, the Prime Minister, the chairman of the State Fiscal Service of Ukraine to be protected from the arbitrariness of the tax officials who

– do not take into account the decision of the Lviv city council – which is relevant, uncontested and not canceled by anybody – on granting the privilege, on the basis of which the investor concluded the lease agreement,

– and guaranteed by the laws of Ukraine “presumption of legitimacy” of the taxpayer in case of legal conflict, conflict of norms of various laws, codes, other normative documents that are binding.

Today I came to the meeting of the State Fiscal Service Commission on reviewing taxpayers’ objections. In the presence of the media, this attack was repulsed – it was decided to postpone the decision on additional taxes in order to verify the decision of the Lviv city council (does it mean that the decision of the Lviv city council – which is the only body that has the authority to make decisions on land issues in its territory – has not been even considered before), and then to defend the community’s chance to create more than 3,000 jobs and attract hundreds of millions of dollars of investment… However, I believe that neither the tax authorities nor the employees of Lutsenko’s Prosecutor’s Office are going to stop. I also believe the pressure on Samopomich through persecution and selective justice in regard of everything that is important for Samopomich, its Leader and mayor of Lviv Sadovyi, and finally, for residents of whole Lviv will only intensify and will last by 2019, by the end of the election campaign for the election of the President of Ukraine.

The investor is shocked. They have hardly started working, and the community is threatened again. The cynicism and lack of principle of our authorities overwhelm: first they beg the Dutch MPs to support the association’s agreement, and then demonstrate their “gratitude” by exercising pressure on Dutch investors in Ukraine. And most importantly, what signals are we sending to potential foreign investors, without whose capitals Ukraine will not reach the level of 10-15% of GDP in order to get ahead!

Another deputy’s appeal has been sent to the Prosecutor General with a demand to fulfill his promise given in a private conversation with me after his recent speech with a “report” in the Verkhovna Rada of Ukraine. He promised to leave the investor alone and to protect the investor from the arbitrariness of all the other controlling bodies. Unless he is a hypocrite, it’s time to deliver on the promise!

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