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#Ukrainian corruption in infrastructure? What results for #EU money?

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The European Union provides Ukraine with financial resources for reform and economic development. Ukraine is located at the crossroads of many transit corridors that connect Europe with other countries. The development of transit corridors for different means of transport is an important task for Ukrainian officials. The EU and its financial institutions generally provide Ukraine around 6 billion EUR in various programs for the development of infrastructure s projects.

 

EU assistance

Originally, some of these funds have not been used in Ukraine due to the fact that the EU wants to make sure that these funds will be used transparently, without the corruption component https://mtu.gov.ua/news/31407.html  .

In order to establish effective use of the funds provided, the Ukrainian government has developed a Comprehensive Plan of Action for the Implementation of the Lifecycle Management Strategy for Infrastructure Projects in Ukraine for 2020-2024 http://surl.li/apkg .

In December 2017, the European Union approved a new Strategic Assistance to Ukraine program for 2018-2020 ( Single Support Framework ), which was developed with regard to 3 key goals of Ukraine's support: strengthening public administration, strengthening the economy and strengthening society. The European Community supports Ukraine in its pursuit of reform and finances these projects.

The total amount of EU assistance to Ukraine during this period should be 430-530 million EUR. Funding will be provided on a “ more for more ” principle , ie there is a direct dependence on funding from the implementation of projects and implementation of the reforms agreed upon the program.

It is important for European investors to understand who and how the international assistance funds will be used for the purpose of the transport industry and transit corridors development.

Strategy of the reforms by the "new faces "

The operation of transit highways and the creation of hubs in Ukraine is provided by the Ministry of Infrastructure of Ukraine http://mtu.gov.ua/en/ .This department is responsible for road, air, rail, sea and river routes.

It happens often so, that some good ideas are  used to cover formal use of resources or arbitrary decision implementation. Infrastructure Minister Vladislav Krykliy adheres the principle of staff  selection and appointment, based on the main criteria for him -  "new faces” . Between professionals and new people with an unknown level of expertise and training, preference is given to new people, and the level of their professionalism often does not match the level of positions and responsibilities hold by such appointees.

At the same time, the Minister of Infrastructure, who is the senior official in relation to many subordinated state-owned enterprises and subdivisions, is implementing a personnel policy that impedes the achievement of the European integration goals. About 60 heads of enterprises, subordinated to the Ministry, are in the status of acting, some structural units have no management at all.

Case of  " Delphi " tanker is indicative. This ship, under the flag of Moldova , lost the anchor in late November 2019. As a result, the tanker reached a shore near the city beach "Dolphin" in Odessa, which resulted in an spill of petroleum products and other harmful substances in the suburban water areas. Now the ship has already become a local attraction - against its background, people make pictures and selfies. It is not known, how the Ministry of Infrastructure plans to solve this problem.

Industry experts emphasize that ministry and many heads of its units do not have sufficient experience, but bear considerable responsibility for the development of Ukraine's transport infrastructure.

An example of successful business

In the transport sector Ukraine there are enterprises, which work on developing expansion of economic potential, such as state enterprise " Derzhhidrographia " ensure the provision of hydrographic and navigation services for safety of navigation in the sea area and inland waterways of Ukraine. The company maintains lighthouses and buoys, as well as other technical means which help to navigate the route for sea and river vessels.

In recent years, the team has modernized the electronic navigation system, using drones to digitize navigation maps. An important area of activity is the ordering of the navigation system and the safety of navigation on inland waterways. The company implements innovative solutions, which are being developed jointly with the National Academy of Sciences of Ukraine in order to increase the level of security and to increase the transit potential of the Ukrainian economy.

" Derzhhidrographia”  consistently protects national interests: it continues work to counteract aggression and security of sea navigation; at the request of the institution, the regional electronic map centers of the International Hydrographic Organization PRIMAR (Norway) and IC-ENC (United Kingdom) excluded Russian electronic navigational maps (ENC) of Ukrainian waters from its catalogs https://hydro.gov.ua/?p=1919 .

The institution is headed by an experienced professional Oleksandr Shchyptsov https://hydro.gov.ua/?page_id=2026  , who managed the reorganization of the enterprise, whereby funds are invested in human capital development, staff trainings are carried out, equipment and vessels are updated.

The director of the Institute for Energy Research, analyst and political expert Dmitry Marunich in Facebook publicly emphasizes http://surl.li/apkx  that this enterprise has been able to implement a number of innovative projects that meet the best world models.

Despite this, the company and its management's were attacked by means of information campaign aimed at changing the company’s management. Former head of the institution Dmytro Padakin and Head of Maritime Transport Workers Unions of Ukraine Mykhailo Kireyev systematically fed false information to the Minister of Infrastructure , discredit the leadership of “Derzhhidrographia” and actual achievements of the enterprise. It seems that a group of individuals is interested in changing the leadership of the enterprise in its favor and establishing control over the sphere of strategic importance for the economy and security of Ukraine.

One can only hope that the Ministry of Infrastructure will properly assess the situation and make decisions solely in the interests of Ukraine.

Real problems of the industry

The Ministry of Infrastructure should pay attention to the real problems that most experts are aware of. For example, focus on the fact that the Maritime Administration of Ukraine, which is in charge for the accreditation of sailor training schools, conducts this accreditation by unclear criteria. Corruption is widespread in this area. One needs to pay shadow money to get a profile education, qualification certification, permits and admissions.

Experts and bloggers write about it , such as Ivan Niyaky http://surl.li/apip , who gives details about corruption manifestations in the certification of Ukrainian sailors .

Specialists who seek to obtain a sailor’s passport, certifying qualifications, encounter several corrupt circles. All those involved in the industry are aware of these phenomena, but it seems that the Ministry and infrastructure is not aware of this.

The Ministry declares a high level of transparency in its operations, but no comments for searches that were held in the office of the state secretary of the Ministry Andriy Halaschuk by the State Bureau of Investigation and the National Police http://surl.li/apne .

The European Union has previously supported the establishment of state secretaries positions in the ministries in Ukraine. The idea was that these officials should not be involved in the policy and quota principle of forming a government. But as it turned out, apolitical state secretaries may not always be anti-corruption ones.

Thus, we can conclude , that the introduction of new technologies in the transport sector of Ukraine depends on the trust of the European institutions in Ukraine. The financial resources earmarked by European partners for reforms in Ukraine's transport industry should be used to drive innovation and modern approaches to creating trans-European transport corridors and hubs in Ukraine. To this end, the Ukrainian authorities must demonstrate real steps in the fight against corruption and follow the best examples of activities in Ukraine and abroad.

Corrupt practices: raider seizure of State Hydrography

Despite the real achievements of the State Hydrographic Institution, the Ministry of Infrastructure of Ukraine sent to the Cabinet of Ministers of Ukraine on February 18 a Submission for approval by the Acting Head of the State Institution, Dmitry Padakin.  This is exactly the former head of the State Hydrography, who was fired in March 2019 and is a figure in criminal cases.

Experts state that http://surl.li/apyl is actually taking place in advance prepared raid capture of "State Hydrography" by the Minister of Infrastructure Vladislav Krykliy, Secretary of State of this Ministry Andriy Galuschuk persons.  This hobby was planned and is going against the economic interests of Ukraine, directed against industry experts.  The sole motive for Dmitry Padakin's appointment is to achieve the vested interests of a group of interested persons who heads the Ministry of Infrastructure and, using their official position, appoints their protégés to management positions.

Political expert Petro Oleschuk http://surl.li/apyf assessing the situation states in a Facebook audience that Dmitry Padakin does not make the impression of a "Noah's face" because he was already acting as a State Hydrography and in relation to him the Unified Register of Pre-trial Investigations has repeatedly submitted information on various corruption offenses.

The expert also points out that the central authorities of Ukraine http://surl.li/apyj and in particular the Ministry of Infrastructure have recently been caught up in corruption news.

There is a blatant and unconcealed violation of the procedures for appointing executives, there are no qualification checks of the candidate and no open competition is announced.

Attention should be paid to the personnel policy pursued by the Ministry of Infrastructure of the National Security and Defence Council and the Security Service of Ukraine, as it is an institution that provides national interests in the field of hydrography and navigation.  It is obvious that the human resources situation in the Ministry of Infrastructure undermines the confidence of the Ukrainian society in the Cabinet of Ministers and its anti-corruption policy, which shames it in the eyes of the international community.

EU

EU says it has resolved 17-year aircraft battle with US

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A worker adjusts European Union and U.S. flags at the start of the 2nd round of EU-US trade negotiations for Transatlantic Trade and Investment Partnership at the EU Commission headquarters in Brussels November 11, 2013. REUTERS/Francois Lenoir/File Photo
European Commission President Ursula von der Leyen holds a news conference with European Council President Charles Michel and Canada's Prime Minister Justin Trudeau after a EU-US summit, in Brussels, Belgium June 15, 2021. REUTERS/Yves Herman

The European Union and the United States have resolved their near 17-year conflict over aircraft subsidies, the EU said today (15 June), bringing to a close one set of Trump-era tariffs which had soured relations between them.

The two sides have been battling since 2004 in parallel cases at the World Trade Organization over subsidies for U.S. planemaker Boeing (BA.N) and European rival Airbus (AIR.PA).

They agreed in March to a four-month suspension of tariffs on $11.5 billion of goods from EU wine to US tobacco and spirits, which they had imposed in response to the row. On Tuesday they were set to remove them for five years, while still working on an overall deal on what subsidies to allow.

"This meeting has started with a breakthrough on aircraft. This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft - after 17 years of dispute," European Commission president Ursula von der Leyen said before an EU-U.S. summit with U.S. President Joe Biden.

The agreement should allow them to focus on the threat posed by China's nascent commercial aircraft industry.

It will also remove one of two major trade irritants left over from Donald Trump's presidency, the other being tariffs imposed on grounds of national security on EU steel and aluminium imports.

The European Commission, which oversees EU trade policy, last month suspended for up to six months a threatened June 1 doubling of retaliatory tariffs on Harley-Davidson motorbikes, US whiskey and motorboats, and refrained from slapping tariffs on more US products from lipstick to sports shoes.

Brussels and Washington have said they would seek to address excess global capacity largely centred in China.

The United States may find it tougher to remove the metals tariffs, which also apply to other countries such as China, because they are still backed by many US metal producers and workers.

Brussels is also pushing what is dubs a new "positive agenda" on trade with Washington, including forging an alliance to drive WTO reform.

The two are also likely to agree to co-operate on trade and technology, such as for setting compatible standards and facilitating trade in artificial intelligence.

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Environment

Greening of transport 'must provide realistic alternatives'

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In an opinion adopted at its June plenary session, the European Economic and Social Committee (EESC) says that the energy transition must – without denying its objectives – consider the economic and social characteristics of all parts of Europe and be open to an ongoing dialogue with civil society organizations.

The EESC supports the greening of transport, but stresses that the energy transition must be fair and provide viable and realistic alternatives that take account of the specific economic and social territorial features and needs of all parts of Europe, including rural areas.

This is the main message of the opinion drafted by Pierre Jean Coulon and Lidija Pavić-Rogošić and adopted at the Committee's June plenary session. In its assessment of the 2011 White Paper on Transport, which aims to break the transport system's dependence on oil without sacrificing its efficiency and compromising mobility, the EESC takes a firm stand.

Limiting modes of transport is not an option: the aim should be co-modality, not modal shift. In addition, the ecological transition must both be socially fair and preserve the competitiveness of European transport, with full implementation of the European Transport Area, as part of the full implementation of the Single Market. Delays in this respect are regrettable.

Commenting on the adoption of the opinion on the sidelines of the plenary, Coulon said: "Curbing mobility is not an alternative. We support any measures aimed at making transport more energy efficient and reducing emissions. Europe is going through a period of headwinds, but this should not lead to changes of course in terms of social and environmental expectations of the various European initiatives."

Continuous consultation of civil society organizations

The EESC encourages an open, continuous and transparent exchange of views on the implementation of the White Paper between civil society, the Commission and other relevant players such as national authorities at different levels, stressing that this will improve civil society buy-in and understanding, as will useful feedback to policy makers and those carrying out implementation.

"The Committee draws attention to the importance of securing the support of civil society and stakeholders, including through participatory dialogue, as suggested in our previous opinions on this matter", added Pavić-Rogošić. "A good understanding and broad acceptance of strategic goals will be extremely helpful in achieving results."

The EESC also highlights the need for more robust social evaluation and reiterates the statement made in its 2011 opinion on the Social aspects of EU transport policy, urging the European Commission to put in place the necessary measures to ensure the harmonisation of social standards for intra-EU traffic, bearing in mind that an international level playing field is also needed in this respect. Establishing an EU Social, Employment and Training Observatory in the transport sector is a priority.

Monitoring progress in a timely and effective manner

With reference to the evaluation process for the 2011 White Paper, the EESC points out that the procedure was launched late and that the Committee was only involved because it expressly asked to be.

The Commission should have a clear plan for monitoring its strategic documents from the beginning and publish progress reports on their implementation on a regular basis, so that it is possible to assess in a timely manner what has been achieved and what has not and why, and to act accordingly.

In the future, the EESC wishes to continue to benefit from regular progress reports on the implementation of Commission strategies and to contribute effectively to transport policy.

Background

The 2011 White Paper Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system set the paramount objective of European transport policy: establishing a transport system that underpins European economic progress, enhances competitiveness and offers high-quality mobility services while using resources more efficiently.

The Commission has acted on almost all of the policy initiatives planned in the White Paper. However, the oil dependency of the EU transport sector, although clearly decreasing, is still high. Progress has also been limited in addressing the problem of road congestion, which persists in Europe.

Several initiatives in the context of the White Paper have improved the social protection of transport workers, but civil society and research organisations still fear that developments like automation and digitalisation could negatively affect future working conditions in transport.

The needs of EU transport policy are therefore largely still relevant today, in particular in terms of increasing the environmental performance and competitiveness of the sector, modernizing it, improving its safety and deepening the single market.

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Corporate tax rules

Big-tech companies to be given historical changes to their international tax agreements

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Recently, some of the richest landmarks and countries of the world, have come to an agreement concerning the closing of international tax loopholes that have been endorsed by the biggest multinational corporations. Some of these tech companies have the largest share prices within the stock market, such as Apple, Amazon, Google and so on.

While tech taxation has long been an issue that international governments have had to agree on between themselves, betting too shares similar problems, especially due to its increase in popularity and allowed legalisation globally. Here we have provided a comparison of new betting sites which follow through on the correct taxation laws and legalities necessary for international usage.

During the G7 summit- which our last reports spoke about the topic of Brexit and trade deals, representatives of the United States, France, Germany, United Kingdom, Canada, Italy and Japan, came to a unified agreement to support the global corporation tax rates of at least 15%. It was in agreement that this should happen as these corporations should pay taxes where their businesses are in operation, and to the land they operate in. Tax evasion has long been propagated using initiatives and loopholes found by corporation entities, this unanimous decision will put a stop to hold tech companies responsible.

This decision is believed to be years in the making, and the G7 summits have long wanted to reach an agreement to make history and reform the global taxation system for the rising innovation and digital age that is on the horizon. Making companies like Apple, Amazon and Google take accountability, will keep taxation in check for what is estimated to be the surge of their developments and involvement overseas. Rishi Sunak, the United Kingdom’s Chancellor of the Exchequer, has mentioned that we are in the economic crisis of the pandemic, companies need to hold their weight and contribute to the reformation of the global economy. Reformed taxation is a step forward in achieving that. Global tech companies such as Amazon and Apple have massively increased in shareholder prices for each quarter after the major drop last year, making tech one of the most sustainable sectors to obtain taxes from. Of course, not all would agree on such comments, being that taxation loopholes have long been a thing and issue of the past.

The deal agreed upon will put massive pressure on other countries during the G20 meeting that is to occur in July. Having a base of agreement from the parties of G7 makes it very likely that other countries will come to an agreement, with nations such as Australia, Brazil, China, Mexico etc. who are to be in attendance. Lower tax haven countries like Ireland will expect lower rates with a minimum of 12.5% where others may be higher depending. It was expected that the 15 percent tax rate would be higher at the level of at least 21%, and countries who agree with this believe that a base level of 15% should be set with possibilities of more ambitious rates depending on destination and region that multinational companies operate and pay taxes from.

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