EBRD, Donors Helping Businesses Flourish In Ukraine

Matteo Patrone, the European Bank for Reconstruction and Development's regional managing director, speaks with the Kyiv Post on Feb. 13, 2019.

By Volker Ahlemeyer

Endless aisles of multi-coloured tulips, prickly cacti, exotic birds of paradise and a plethora of other flowers can overwhelm even the most seasoned shopper when entering the world of Ukraflora in Kyiv, Ukraine. The EBRD and donors helped the business overcome unexpected challenges through the creation of an ombudsman.

“We’re a leading florist in Ukraine and have been operating in the country for over 26 years,” explains CEO of Ukraflora, Alyona Storchak. “Our flowers come from all around the world: the Netherlands, Ecuador, Kenya and many other countries. In 2019 alone, we imported more than 4 million units of flowers.”

For a flower business, it is absolutely vital that products are delivered to stores swiftly and at their freshest, she stresses. After all, who would want to bring a bouquet of dried out daffodils to a dinner?

Stuck in customs

However, even with the best logistical planning, there can be factors outside a company’s control. Flowers and plants were delayed by extensive customs checks at the Ukrainian border last spring and this started to pose a serious challenge for Ukraflora’s business.

“We faced unreasonable and systematic delays of our goods at Volyn Customs. We incurred big losses, since flowers are perishable goods. It was critical for us to ensure that they could clear customs in the shortest possible timeframe,” says Alyona.

The issue of the flower business was one of over 3,000 cases to date solved by the Business Ombudsman Council. Over 70 per cent of them were brought forward by small- and medium-sized enterprises. The companies come from all sectors and their complaints are wide-ranging: a pastry maker needed help to overturn the unsubstantiated results of a tax audit; a PR consultant to challenge an administrative fine; and a chicken producer was incorrectly classified as a high-risk tax payer.

“In this case, our intervention was comparatively straight-forward,” explains Deputy Business Ombudsman Iaroslav Gregirchak. An investigator spoke to Volyn Customs and reminded officials that checks of goods should not exceed four hours in total.

“We emphasised that in this case lengthy checks can cause a particularly adverse impact on business,” adds Gregirchak. “We requested customs officials to comply with legislative requirements in order to bring the case to a satisfactory closure.”

Building a transparent economy

Solving wider problems starts with individual cases like this. The ultimate goal of the Business Ombudsman Council is to fight corruption, make Ukraine more attractive for investors and promote a fair, open and accountable public service culture.

The activities are part of a broader initiative led by the EBRD and donors of the EBRD Ukraine Stabilisation and Sustainable Growth Multi-Donor Account to build an open, transparent economy in Ukraine. They also include, for example, the recruitment of young new officials into the public administration, building a reliable public procurement system and establishing the Office of the National Investment Council to attract foreign businesses to Ukraine.

The contributors to the multi-donor fund are Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Norway, Poland, Sweden, Switzerland, the United Kingdom, the United States and the European Union, the largest donor.

Flourishing businesses

Ukraflora’s customs issues are now in the past, Alyona explains: “The ombudsman’s team responded quickly to our case and helped to solve this situation once and for all.”

It is practical support like this which can help a business to thrive. The impact, however, is much larger. It shields other businesses from facing the same issue now or in the future, while preparing fertile ground for the Ukrainian economy to bloom in the long run.

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