Two S&P Investment Risk Management Agency Lawyers Named to 2022 The Best Lawyers in Ukraine™ ― page 2

Kyiv, Ukraine, 12 November, 2021 – S&P Investment Risk Management Agency is pleased to announce that two lawyers have been included in the 2022 Edition of The Best Lawyers in Ukraine. Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence.

Best Lawyers has published their list for four decades, earning the respect of the profession, the media and the public as the most reliable, unbiased source of legal referrals. Its first international list was published in 2006 and since then has grown to provide lists in over 75 countries.

“Best Lawyers was founded in 1981 with the purpose of highlighting the extraordinary accomplishments of those in the legal profession. After four decades, we are proud to continue to serve as the most reliable, unbiased source of legal referrals worldwide,” says CEO Phillip Greer.

Lawyers on The Best Lawyers in Ukraine list are divided by geographic region and practice areas. They are reviewed by their peers based on professional expertise and undergo an authentication process to make sure they are in current practice and in good standing.

S&P Investment Risk Management Agency would like to congratulate the following lawyers named to 2022 The Best Lawyers in Ukraine list:

• Nataliia Osadcha – Investment
• Mykola Siutkin – Litigation, Mergers and Acquisitions Law, and Real Estate Law

Natalia Osadcha is Co-Founder and Partner of S&P Investment Risk Management Agency. For over 20 years, Nataliia has been working in the field of law, risk management, investment, conflict resolution and government relation. She is an author of numerous research and articles on business protection and a creator of numerous investment strategies for a big international corporation in Ukraine.

Mykola Siutkin is Co-Founder and CEO of S&P Investment Risk Management Agency. He has been defending the interests of business in Ukraine in the field of law, business advising, risk management, business conflicts resolution and minimization for more than 18 years. He is also the founder and owner of the LDaily media platform.

###

About S&P Investment Risk Management Agency

For the past 15 years, S&P Investment Risk Management Agency is a leading consulting company in Ukraine, which serves the largest foreign players, not only at the stage of entering Ukraine, but also in the process of implementing investment projects and support of everyday business activity. The agency has helped companies to develop unique investment solutions and strategies and to enter and operate in the Ukrainian market transparently and securely. S&P Investment Risk Management Agency assists large foreign companies in developing their business models and processes in Ukraine, in strict accordance with the high international requirements and standards for transparent business operations.S&P Investment Risk Management Agency main services include legal, risk management, financial audit and government relation.

S&P Investment Risk Management Agency lawyer named to 2021 Best Lawyers list ― page 2

9 June 2020 – S&P Investment Risk Management Agency is pleased to announce that Mykola Siutkin has been included in the 2021 Edition of The Best Lawyers in Ukraine for his work in Mergers and Acquisitions Law and Litigation. This is the second consecutive year that Best Lawyers has recognized Mykola Siutkin for Mergers and Acquisitions Law. Since it was first published in 1983, Best Lawyers has become universally regarded as the definitive guide to legal excellence.

Best Lawyers has published their list for over three decades, earning the respect of the profession, the media, and the public as the most reliable, unbiased source of legal referrals. Its first international list was published in 2006 and since then has grown to provide lists in over 75 countries.

“Best Lawyers was founded in 1981 with the purpose of highlighting the extraordinary accomplishments of those in the legal profession. After three decades, we are proud to continue to serve as the most reliable, unbiased source of legal referrals worldwide,” says CEO Phillip Greer.

Lawyers on The Best Lawyers in Ukraine list are divided by geographic region and practice areas. They are reviewed by their peers on the basis of professional expertise, and undergo an authentication process to make sure they are in current practice and in good standing.

About S&P Investment Risk Management Agency

For the past 15 years, S&P Investment Risk Management Agency has been a strategic business and legal advisor for large foreign companies. The Agency helps companies develop unique investment solutions and strategies, enter and operate in the Ukrainian market transparently and securely. We assist large foreign companies in developing their business models and processes in Ukraine in strict accordance with the high international requirements and standards for transparent business operations.

In 2020, S&P Investment Risk Management Agency signed a Memorandum of Understanding with Mr. Budiarsa Sastrawinata, Managing Director of Ciputra Group, one of Indonesia’s largest developers and real estate investors in the Asia-Pacific region, and Mr. Jörg Bahren, Director Projects & Investments of RE RISE GmbH International Investments and Development Projects Management Company.

S&P Investment Risk Management Agency has unprecedented experience in developing unique business solutions and strategies for ambitious organizations striving to turn risks into new business opportunities.

Why our approach is unique? We combine the legal tools and business strategies that our clients need with a strategy of minimizing possible business and investment risks.

Such solutions meet the high standards of transparent business conduct of our clients who are looking for high-tech and safe business solutions in a tough yet profitable business environment – the Ukrainian market.

Without exaggeration, we can state that the S&P Investment Risk Management Agency team is unique. The combination of legal education and practical experience has empowered us to create innovative, high-tech, and secure business and investment solutions. Outstanding strategic decisions made by the S&P Investment Risk Management Agency team over the last 15 years have saved billions of dollars for our clients.

We offer clients our unique experience and knowledge to minimize and avoid possible negative consequences and losses in the future, to create a successful business in Ukraine.

Our goal is to find the shortest way to creating a profitable business with minimal risks for our client.

If you want to make real savings on your budgets, you should start working with risks ― page 2

Why should companies work on risks?

Why is it important to reduce risk?

The main reason is that by reducing risks, you minimize hours of litigation and criminal trials. This means you make savings. You save not only money but time, health and nerves, maintain your reputation and retain clients.

Unfortunately, in our country, most companies are at risk, especially in terms of additional tax assessment, as well as criminal prosecution, particularly in cases of tax evasion.

As a proficient executive, you are probably trying your best to prevent the above-mentioned unpleasant incidents from happening. However, not everyone can do this. Why?

The reason is that companies and their executives often lose sight of one important tool – issue or risk audit.

We are not talking about incredibly expensive financial audits. This is about a regular meeting with your business consultant and legal counselor in order to analyze the situation and gain an understanding of the ways to minimize additional charges or possible criminal trials. When we say to minimize, we mean keeping to a minimum or not getting at all.

The most interesting part is that such an analysis will definitely help you find similarities and/or patterns among all the problematic points. Most likely, you experienced all these problematic issues a dozen times before. As a result, you may have lost track of something significant. That is why the company constantly faces all the same issues.

For example, the policy of your company provides for engaging an external consultant only if you receive an additional charge on taxes and fees. Some companies, even in this case, try to deal with this issue on their own. After receiving an additional charge on taxes, the company and its executives are expected to have expensive and complex litigation, and at the same time, experience all the “great” things about criminal trials with interrogations, searches, and seizures of accounts and property.

You immerse in the process of solving your issues so often that you simply don’t see the full picture from above. This is exactly why the only thing you do is trying to solve the already existing problems.

Ask yourself a question: “Can I do something another way? Can my company avoid these high-priced issues by implementing a different policy? What should I do so that I simply don’t have such difficulties in the future? ”

What would you do if you were told that you can reduce additional charges on taxes without even reaching the stage of receiving a tax note decision and tax prosecution if you begin to conduct an audit (analysis) at the stage of receiving a request yet not after receiving a tax charge?

Maybe it’s time to introduce new policies and rules that will reduce both financial and time costs, and in some cases even help prevent sensitive lawsuits and criminal trials?

THIS is all about the REASONABLE ECONOMY!

If you are ready, go ahead!

Order services by link https://forms.gle/jHvYVJPQmfCgQMfX7

Never give up! ― page 2

Nataliia Osadcha, Co-founder of S&P Investment Risk Management Agency, shared her thoughts with LDaily on how to avoid issues in doing business during this extremely difficult time for the whole world. With 20 years of experience not only in saving but even developing a business during periods of crises of various levels, Nataliia advises first of all to search for new markets for activities. In fact, one of the most promising markets, especially for foreign business, is the Ukrainian one.

Communicating with our clients and partners from all over the world, we don’t have a shadow of doubt that the entire world is already in crisis due to the spread of COVID-19. As an anti-crisis management business consultant with over 20 years of experience, I can say with 100% certainty that the crisis is not something far and unknown for Ukraine and Ukrainians. For this country, the crisis is a daily reality. Unfortunately, or fortunately, crises have haunted our country since the day of its creation. It began with the years of independence, then we had the revolution and the war, and all this happened in the short 27 years of the country’s existence. As an anti-crisis consultant, I can explain all the mechanics of entering a crisis, passing through and getting out of it. Here is what a business needs to know about the crisis:

1. The crisis cannot be pleasant. It is complex from a psychological and financial point of view.
2. During the crisis, the established old processes and business solutions do not work and will not work.
3. In order to survive, a company needs to be able to rapidly change (business processes, search for new markets, ways to optimize and reduce operating costs, introduce new types of services, etc.) and make fairly fast and innovative management decisions.
4. You need to become flexible and start seeing opportunities where you simply haven’t seen them before or where there were no opportunities at all.
5. Accept the fact that financial losses are an invariable part of the crisis. However, this process is temporary and if everything is done correctly, minus will turn into a big plus.
6. Accept the fact that it may not work, but you should continue to act against all the odds. Every day you should do the best that can be done even in a very difficult situation.
7. Of course, never ever give up (the words of great Churchill during the great world crisis of 1941).
8. Create an anti-crisis headquarters which consists of your team members (it is better that experts from various departments be assigned to it), regularly conduct brain storming, and discuss new opportunities, existing challenges and possible options for action.
9. Study living examples in practice, the existing methods of overcoming the crisis.
10. Create your own anti-crisis strategy based on the individual needs of your business.
11. Select individual tools necessary and acceptable for your anti-crisis strategy implementation.
12. Check your anti-crisis strategy every day and make the necessary changes to it depending on the external and internal situation.
13. The good news is that every crisis has both its beginning and its end. The date of term of the crisis can be calculated to a high precision, based on the analytical data.

We can definitely state that crises are necessary for all of us – there is no growth without them, no change, no movement. A crisis is a unique opportunity; it works in the same way for a business, for a person or for the whole world; it is a chance to become even stronger. Moreover, if passing and exiting from the crisis properly, it will guarantee you incredible advantages and bonuses. What bonuses you can get in the case of the crisis:

1. Business processes optimization.
2. Search and development of new markets.
3. New products and services creation.
4. Business resilience to new challenges and crises.

Therefore, an anti-crisis way of thinking, studying the crisis and creating an anti-crisis business strategy should become an integral part of any business environment and any management decision made. An anti-crisis strategy developed and implemented in business processes in time will help move away from the ‘crisis = death or chaos’ concept, and move on to understanding that crisis = opportunity. Furthermore, there are huge opportunities for growth. This is what will help businesses and people be ready, come to the understanding that the crisis is a necessary part of growth and it is during the period of crisis that you can start with a breakout success.

For Ukraine, the crisis caused by COVID-19 is a big chance.

Almost all types of businesses have an anti-crisis strategy in Ukraine. It is simply impossible to survive in Ukraine, much less to become successful without an anti-crisis strategy. A great deal of companies does not know that they have such a strategy, but any Ukrainian company has it.

For a foreign investor, during the global crisis Ukraine is becoming attractive and these are the reasons:
1. Perfect territory location for the logistics services production and/or provision both for the domestic market and for the market of EU countries.
2. New market outlet (42 000 million people).
3. Possibility of obtaining a private ownership asset in conjunction with a land plot by purchasing the land directly from the state.
4. Significant reduction in operating costs for any business:

• Cheap labor force (there is a large number of skilled labor). A high salary for a highly skilled worker is €300
• Cheap local material resources used in production.
• Opportunity to receive reduced tax rates if an asset is sold in a special taxation zone.
• Low land and asset cost.

5. There is no severe competition; the market is not structured.
6. Minimum term to enter a new market.
7. Opportunity to receive planned profit during the global crisis.

Moreover, Ukraine is a new market which in fact is so much-needed by large industrial corporations that really suffered heavily due to the spread of COVID-19 and the actual shutdown of a huge number of business processes in the world. Therefore, Ukraine can become a lifeline that will allow many global corporations to stay afloat with their profit or at least without significant losses.
New markets give new opportunities, including the ability to stay alive. Be flexible and open to inevitable changes and you will change yourself, become stronger and discover new worlds.

Information on the COVID-2019 quarantine ― page 2

Criminal prosecution of large business in the new conditions: what to keep in mind and what to be ready for ― page 2

Nataliia Osadchaya, the co-founder of S&P Investment Risk Management Agency, a Candidate of Legal Sciences, a Lawyer, an adviser on investment risks and conflicts.

We expected that “a new way of life” of Ukrainian business will become easier after the presidential and parliamentary races. However, large investors in Ukraine haven’t noticed any decrease in the number of problems over  the past few years; on the contrary, the difficulties of some of them have even become more global.

Large businesses have faced a significant increase in the number of criminal cases regarding tax, antitrust, environmental, and other issues recently.

The authorities of the Prosecutor’s Office of Ukraine, including the GPU and NABU, intensified their activities recently. The spectrum of “questions” that arise in front of businesses is so wide that any system can be hardly traced. There is a high probability that such problems arise for large companies which are actively investing in Ukraine.

We are talking about criminal cases on causing damage to the state, tax evasion, fictitious entrepreneurship, forgery of documents, abuse of power, misappropriation and embezzlement of property through malpractice, violations of the environmental safety rules, damage to the land, pollution of the atmosphere, violations of the water protection rules – these are only some cases in which the state starts a criminal prosecution against large domestic and foreign businesses.

However, as our experience shows, the evidence in similar criminal cases against our clients is generally very weak. Despite this, business advisers have to take huge efforts to prove the absence of a crime and to stop the criminal prosecution, and restore the reputation of the company and its executives.

Business suffers from a variety of investigative actions conducted within the initiated criminal cases – search raids, the seizure of documents and equipment, the disclosure of bank secrecy, asset seizures, endless interrogations of management, employees and counterparties. All this ends with unspoken actions – eavesdropping and recording telephone conversations, removing information from servers of telephone companies, surveillance, etc. In addition, the entire business community is actively watching the whole process in relation to such companies, as after every high-profile investigative action, any search or inspection, relevant information appears in the media. So, another issue for a business suffering from conflicts is restoring its reputation and refuting this information or sharing its position with the public media.

Interestingly, many of the criminal cases, which have recently been intensified by investigative actions, have been initiated since the time of past power. It should also be remembered that the current law does not provide any terms for the criminal pre-trial investigation if a criminal case has been formally opened before March 15, 2018, and if a company is not suspected. The investigation process can last for years, during which any investigative action can be taken. That’s what is happening today. Limitations of the pre-trial investigation terms, which came into force on March 15, 2018, apply only to criminal proceedings opened after this date. Therefore, if a criminal case was instituted before March 15, 2018, we can forget about any pre-trial investigation period. What’s more, we used to face situations when for preserving the indefinite deadlines of the investigative actions, law enforcers found some old case initiated ages ago, changed the plot, attracted new sides, as a result, there was no time limit anymore! Keep in mind that courts satisfy any petitions of law enforcement agencies representatives in 95% of cases. These are requests regarding temporary access, searches, account and property seizures, bank secrecy, silent investigative actions (including wiretaps), etc. So, the person under the investigative actions is left absolutely disempowered and without any chance to demonstrate evidence of his/her innocence.

So, one can actually submit evidence, but law enforcement agencies do not accept such documents physically. According to the current law of criminal procedure, the person being investigated does not have official status in the specific case before being suspected, therefore, no petition from such a person will be considered, and the documents received by the authorities are simply not included in the case.

Another matter of concern is that criminal cases being filed against large foreign companies that invest plenty of money in the economy, create jobs and pay large amounts of taxes.

All these negative phenomena affect the country image and discourage potential investors. It’s not a secret that foreign investors are interested in the safety of their investments and the level playing field within the legislation. Ukraine still needs to improve this.

Rescuing Businesses

There is no single answer to the question: “Why do businesses face problems?”. Each case is unique. It is clear that the underlying causes of such conflicts do not only relate to legal mistakes. I mean that legal or procedural mistakes not always become the basis for “starting creating problems” for businesses.

As for our experience, a fairly large percentage of our clients who have been the subject of serious prosecution by the state, have made mistakes at the initial stages of building their business processes. This allowed their “opponents” to turn these mistakes into a serious problem. Series of search raids in the company and its counterparties, the seizure of a huge number of documents, interrogations and examinations – all these consequences naturally arise if state bodies become interested in a business.

Resolving one of such cases took us a year of painstaking work, more than a hundred motions to the GPU, over 60 appeals to the court, official help from the diplomatic missions, international organizations and media channels. I’d like to highlight that one year is a strong result of solving such a complex conflict. The process can often last much longer, interfering with normal business processes and destroying the business reputation.

Being One Step Ahead

When the confrontation with law enforcement agencies sharpens, it becomes increasingly difficult to prove the correctness of a business. Both conflict sides possess evidence that goes in their favor. Therefore, the solution to such conflicts is a difficult process, but it is essential for a company. Sure, the victory in conflicts will be the immunity for possible subsequent attacks. Compromise is not the key in such confrontations, it is either defeat or victory. As our experience shows, compromise is an illusion; in fact, it is a sign of a future defeat. Our state has never compromised on business, except only temporarily and solely for the sake of winning in the future. Additionally, let’s not forget the considerable credibility that the new government now has.

Under such circumstances of political and social instability, it is crucial that all risks be calculated at the “zero” stage (it means before signing any contracts or before starting the implementation of any projects). Having this done won’t leave even the slightest opportunity for your opponents to cause problems to your business. Unfortunately, nowadays, we still have to save businesses than to minimize risks at the start. However, businesses learn from mistakes as humans do.

Being one step ahead of opponents is one of such lessons.

Doing business in Ukraine during the period of political instability: what to focus on ― page 2

Nataliia Osadcha, the co-founder of S&P Investment Risk Management Agency

Throughout the entire period of the Ukrainian state formation, business was accompanied by political and economic instability. Six presidents have changed during 27 years of the development of Ukraine, we have experienced two revolutions, a complete transformation of external state relations and a country’s development course.

At the same time, business remains the most sensitive to political changes throughout all the stages of the development of Ukraine, especially during the re-election of the president and parliament of the country, change of government. Every change is a separate epoch with its own rules, goals and consequences both for the country and for the business as a whole. At all times, stability remains the main goal for business, as well as saving assets and obtaining planned profit, regardless of any political fluctuations and changes.

After the second revolution –  Revolution of Dignity – with the start of hostilities in the Donbas and the annexation of the Crimea, our country experienced a deep political and economic crisis. However, , macroeconomic performance has improved recently. Ukraine has begun to show steady economic growth. From an economic point of view, the financial crisis has made the country more attractive to foreign investors: inflation, falling asset prices, a decrease in the cost of labor and production costs. At the same time, the decline in investment in recent years was mainly due to military actions, despite the fact that the war was not at an active stage.

There is tough competitiog during the period of markets’ consolidation. Large international business is trying to find new, economically interesting markets, especially, if these markets are geographically located in Europe. Ukraine is exactly such a market. What makes Ukraine an attractive country for foreign capital:

• there is no free agricultural land market (due to the moratorium on the sale of agricultural land);
• the privatization of large state enterprises which are interesting for large foreign players, has not yet completed;
• there are no toll roads, and public-private partnership is just beginning to emerge;
• the largest area in the center of Europe with the population of 42.3 million people;
• more than 42 million hectares of agricultural land.

All this is impressive, still, there are risks inherent in the developing countries, and Ukraine is no exception. Every five years, a large-scale change of political power takes place in the country, which leads to changes in legislation and, sometimes, even the entire course of the country’s development.

Ukraine is now again on the verge of political change, and forecasts are extremely different: from the complete crisis to an unprecedented victory of democracy. Honestly speaking, nobody can give a clear forecast of how events will develop and what changes will take place. Time will tell.

The second major risks are business ones. This category includes changes in the business climate and legislation announced by the previous government and the president declared in regulations and “rules” of doing business in Ukraine. The main risk, like 27 years ago, when Ukraine had just started its way as an independent state, remains the risk of losing assets. In fact, this risk has become less relevant over 27 years, as in other developing countries. Another important risk remains financial one associated with economic performance. Political, business and financial risks are interconnected, they interact closely and are the result of each other.

In fact, the above-mentioned risks in an economically attractive environment is not something unique for Ukraine. Any developing country is a market with potentially high risks and at the same time high profit rates. To be successful in any developing country, you need to learn how to correctly calculate these risks, that is, consciously accept the fact of their existence and learn how to manage them. Risk management exists exactly as long as humanity exists. It is just that the term is not familiar to everyone, but this does not mean that we do not do these actions for 24 hours every day. Going out of the house, we are looking at the weather forecast and choose clothes according to it, we take or not take an umbrella, calculate the time spent in traffic jams to get to the scheduled meeting on time. In the snowfall, we change the wheels of our cars, set the alarm signal in houses or apartments for the safety of our lives, minimizing the risk of a possible unwanted intrusion. We constantly calculate our risks, but not always, we do that in business.

To protect your business from loss of assets and other risks, the first rule is to clearly understand the existence of risks, identify the threats they carry and determine how to manage them.

As a risk minimization specialist and a business consultant with more than 20 years of experience in asset protection and risk minimization in Ukraine, I can say that you can not only calculate a lot of risks, but also successfully minimize them. And if, after analysis, it turns out that the risks are very high and their minimization or prevention are impossible, you can save time, money and health simply by stopping such an unjustifiably risky business project.

So, where does risk management begin, and at what stage is it better to apply it in the realities of Ukraine? The risk management process must be implemented at the earliest stage of a business project. The perfect start is the stage of a business plan (calculation, analysis, the formation of financial indicators, ownership structure, partnership, the procedure for acquiring assets and their structure, management, etc.). At at this stage, risk management is not only necessary, it is vital for the implementation and receipt of what has been carefully calculated by experts in the business plan. When we calculate risks at the “zero” stage, we take into account everything that can at least somehow adversely affect the implementation of the project in the future or lead to the loss of an asset. Political risks will not be so important or fundamental factor if attention is paid to mechanics. Properly structured partnership relations (taking into account the system of checks and balances), the correct procedure for acquiring an asset and structuring a transaction, the stage and process of starting construction work, are correctly defined. They will give you high guarantees, and regardless of the change of power in the country and political balance of power, you will remain with your business. There are actually a lot of examples. Let’s see how many foreign companies which “entered” the country during the period of political cataclysms, are still doing business successfully. Some have been successful in Ukraine for over 27 years. And no matter during what period of political relations these companies “entered” the market: if the risks are calculated correctly, they will remain here for a very long time. There are also a lot of negative examples when a business lost millions or even hundreds of millions of dollars. Unable to cope with risks, they simply left the Ukrainian market, having suffered multimillion-dollar losses. I’ve been studying such situations for a long time, so, I can say that in 90 percent of negative cases, investors made significant mistakes. Mistakes often occur at the beginning stage of the business plan implementation. The main mistake is that companies do not identify the Ukrainian market as high-risk, do not accept this fact as a necessary element of the formula. If this element is not taken into account in the formula, all components of your business plan will fail. And the company will not get the planned business and financial results. Investors make different mistakes:

• hopes that the guarantees given to them by the government will be respected (for a political change of power every five years it is unreasonable to rely on government guarantees, which perhaps will not be at this time);
• hopes that partners will be honest and keep their word (will not be, if you do not force this, will not make the partner unprofitable to violate the agreement);
• hopes that small legal inaccuracies will not have significant consequences (as practice shows, there were always minor inaccuracies in the basis of the most complex conflicts);
• the hope that nothing bad can happen to you, so, there is no need to spend money on insurance. As practice shows, 95 percent of success is the detailed preparation and calculation of all possible risks and probability of these risks occurring. This statement is true regardless of whether you go to the mountains, plan diving, rafting or prepare for serious investments in a country like Ukraine. Without a detailed plan, guide and risk calculation, this is a frivolous and risky undertaking with an uncertain outcome.

Implementing risk management process during the formation of a business plan gives a high chance of success. At the stage of the business functioning, risk management should already be implemented directly in all business processes of a company and, especially, in management decision-making processes.

For example, the decision to start building a large business object should not only include risk auditing, but also be the subject of discussion at the highest level of company’s CEO and business owners, the conscious acceptance of the identified risks and taking steps to minimize them.

Companies which are not only engaged in long-term planning but also have a precise coordinate system which helps to get into the planned future, have been and will remain successful. However, without a conscious risks calculation, this does not seem possible.

S&P Investment Risk Management Agency is a multi-level consulting company. Our company has been accompanying a large foreign business in Ukraine for almost 12 years. Our main directions are risk management, crisis management (taking companies out of crises of different complexity levels), reputational protection (essential factor for overcoming crises), and legal services. Our specialists combine various expert knowledge and deep practical experience as crisis managers, business consultants, PR specialists, GR, lawyers, tax agents, investigators, detectives, strategy consultants, and many other professions. This combination distinguishes S&P Investment Risk Management Agency among other companies. We calculate and minimize for the business in Ukraine the following types of risks: business, investment, financial, reputational and legal ones.

We act as business consultants for companies with the purpose of preventing business conflicts and their actual avoidance, and minimizing potential negative consequences. For those companies that are already in a business conflict, for example with a client, counterparty, competitor or government/law enforcement agency, we not only develop a strategy for successful conflict resolution, but we also use various tools and accompany the business until the successful conclusion of a crisis/conflict. Moreover, our high-level lawyers allow us to provide our clients with a full range of consulting services. At the same time, the essential difference between our company and the classical legal consulting is that the legal strategy that we develop is derived from the risk management and crisis management strategies. Therefore, legal instruments are selected and provided to the client together with a risk minimization strategy. In this case, the legal strategy itself and its implementation are fundamentally different from standard legal tools and moves.

Despite the fact that legal services are only one of the lines of our company activity, it is highly appreciated by leading independent ratings and experts. This year, the experts of the Kyiv Post editorial office conducted the first independent study of the legal services market in Ukraine. S&P Investment Risk Management Agency is in the TOP 50 of the best law firms in Ukraine and occupies 4th place in the category “Transparency and Responsibility”. For us, the high appreciation of the Kyiv Post is a very important indicator of our expertise and achievements.

S&P Investment Risk Management Agency in Kyiv Post Ranking: trust of independent experts ― page 2

Kyiv Post is the first and the most popular Ukrainian English-language newspaper that publishes topical news of the world and Ukrainian business every week. In April, the edition published an independent ranking of TOP 50 Law firms in Ukraine. The S&P Investment Risk Management Agency not only took rightful place among the best legal companies in Ukraine but also entered the TOP 5 Law firms in Ukraine in the Transparency and Responsibility category, in which took an honorable 4^th place.

For the first time in 12 years, S&P Investment Risk Management Agency has taken part in the national ranking due to its independence and high reputation among Kyiv Post experts.

The Kyiv Post ranking was based on the comprehensive, honest, non-commercial analysis of Ukrainian legal firms. Kyiv Post team monitored competent ratings in Ukraine and abroad to define which companies’ features are most valuable for clients. Candidates were ranked in five categories: responsibility, approachability, internationality, social balance and common strength of a legal firm. To evaluate the reliability and quality of companies, the experts and team of the Kyiv Post developed the most objective method based on mathematical formulas.

Publishing its first ranking, the Kyiv Post edition expressed its hope that impartial research will become the basement for trust in rankings from both community and legal entities side. The 50 best legal services providers were selected first of all for the quality of service they guarantee to clients. The researchers did not take into account the scale of firms. The bases of the evaluation were transparency, approachability and benefits, which their activity brings to Ukrainian society and business. The ranking compilers mainly oriented to businesses which need legal support and ongoing advice for efficient work. A follow up from Kyiv Post readers showed that results of such kind research are appreciated. They motivate companies to improve and show readers the true market leaders in legal services.

We are proud of the trust of the independent Kyiv Post experts! The best value of our activity is the results of work performed.

The special feature of S&P Investment Risk Management Agency is in effective combining of risk management, crisis management, reputational protection and jurisprudence. Herewith, the legal strategy development and its appliance fundamentally differ from standard legal tools and mechanisms. We believe we help businesses change the economic system from the inside.

Our performance over the past three years (in figures):

• additional tax requirements and fees for companies have been reduced in the total amount of 400 million UAH;
• thanks to successful proceedings, VAT in the amount of 50 million UAH have been returned to business;
• illegally blocked VAT in the amount of 370 million UAH has been returned to the current amount;
• 25 criminal proceedings against foreign companies have been canceled in the total amount of 950 million UAH;
• trainings for more than 45 foreign companies have been conducted.

Effective business protection. S&P Investment Risk Management Agency version ― page 2

Mykola Siutkin, the founder and CEO of S&P Investment Risk Management Agency.

Preventing problems is not only more effective, but also cheaper than overcoming negative consequences. This concerns all spheres of our life from health to business.

In 2018, there was a lot of high-profile cases and raider attack attempts (BRSM-Nafta, EuroPower, Rostok Holding, Victoria Gardens shopping mall), as well as pressure on business of law enforcement authorities (Nova Pochta, Philip Morris Ukraine, Risoil S.A.). An unprecedented anti-leader remains the pre-trial investigation initiated by the Kyiv Prosecutor’s Office, in which 42 companies with foreign investments – Huawei, Samsung, Kyivstar, Bayer, Sanofi and other international giants – are accused in tax evasion and the illegal withdrawal of funds abroad. According to law enforcement officers, the total amount of unpaid taxes is about 950 million hryvnia.

We, from the S&P Investment Risk Management Agency company, have analyzed the results of our work on the protection of the business. We can note the fact that over the past 3 years only with the help of our company were closed 25 high-profile criminal cases against large foreign companies and their leaders on tax evasion in the total amount of more than 950 million UAH!

Business under pressure: anti-trends in 2018 ― page 2

2018 year did not bring innovations to the most common business problems in Ukraine. Business is still “at gunpoint” of many controllers, who have only increased their pressure over the past year.

Problem №1. Criminal prosecution

As a year ago, criminal prosecution by the GPU, the SBU, the tax police and the police are still the most painful. The main unpleasant news is that the number of criminal cases and the amount of damages incriminated to the business, especially in tax crimes, have increased significantly over the past year.

We made the rating of popular types of criminal cases that were opened in relation to business in 2018. The first place both in the number of cases and the charged amounts refers to the Art. 212 of the Criminal Code of Ukraine (tax evasion). Everyone remembers the high-profile case of the LLC “Promotion Staff” / LLC “Promotion Outsourcing”, when more than 42 foreign large companies were accused of tax evasion totaling 955 million UAH. This criminal case is still being investigated.

The second place is for fictitious business (Article 205 CC). Of course charges of fictitiousness very often go together in combination with tax evasion (Article 212 CC). It is also incriminated in the Outstaff case.

In the “honorable” third place is the excess of official authority (art. 364 CC). This is a very “interesting” article according to which business is often being charged and in totally different circumstances. We even joke, that if law enforcement officers “do not know where to start”, then they try to start from Art. 364 CC. It is a universal article for creating problems. The mentioned criminal case of the LLC “Promotion Staff” / LLC “Promotion Outsourcing” was first initiated by this article and only then re-qualified for tax evasion and fictitious entrepreneurship.

The main “know-how” of 2018 in criminal prosecution of business can be considered the “base” expansion for creating problems. So, if earlier the tax and law enforcement agencies “caught” agreements on the actual purchase of the goods by the taxpayer from the “problem” counterparty, then in 2018 they began to charge taxes on transactions for purchased services, but not for the goods. 

Problem №2. Additional tax payments

The next major threat after the prosecution is the additional charge of taxes and fees. It is relevant both for domestic and foreign business operating in Ukraine. However, this problem is also not new one, since the budget needs to be constantly replenished. It is clear that additional tax payments and accusation under Art. 212 CC (tax evasion) go hand in hand. Therefore, enterprises that have been charged the taxes to pay in 95% of cases will also have to “fight back” from the criminal case.

The 2018 innovation was the opening by the law enforcement agencies of criminal cases under Art. 212 CC without an audit and even without additional taxation by the State Fiscal Service of Ukraine.

In general, in 2018 the actions of the tax police and its pressure on business remained the same acute problem as before. Despite the loss of this authority’s powers. The courts remained in the old position and actively gave permission to the tax police to conduct investigations. The number of criminal cases investigated by the tax police has increased. In other words, the loss of authority by the tax police turned out fictitious, because in fact, it did not affect its activities.

Important moment! No matter how weird it would seem to you, but one of the main reasons for the criminal proceedings growth against large businesses, in our opinion, is the stimulation by the business itself of such behavior of the controlling authorities. So, if we are talking about the popular Art. 212 CC (tax evasion), then we are talking about the panic fear of many large companies of the criminal proceedings. Exactly this threat pushes such taxpayers to make a decision on the voluntary repayment of additional payments which are not always fair. If the threat enters the active phase and investigative actions begin in the form of interrogation, search or temporary access to things and documents, then this convinces “those who hesitate” who were not ready to surrender so quickly, go with the “piece” and pay the additional amounts to the budget. It’s about the facts. A fairly large number of foreign companies after a brief hesitation decide to pay the additional amounts to the budget. Oddly enough, but this scheme worked and still works.

There are not so many players who take an active stand and prove that there is no crime in their actions, especially if we are talking about Art. 212 CC. Changing the tendency and, as a result, reducing risks depends on the position of the business, especially the large one. After all, if business allows tendencies are only strengthen.

Problem №3. The arbitrariness of “environmentalists” 

To the trends of the passing year we should also add the complex business relations with the State Environmental Inspectorate. According to the estimates of the European Business Association and the Office of Effective Regulation, in 2018 business losses from illegal actions of the State Environmental Service amounted to about $ 200 million. In addition to daily losses from a blocked ship and cargo in the port, which fluctuated from $ 15 thousand to $ 30 thousand a day. In short, “gentlemen ecologists” during 2018 used “prohibited methods”, in other words they just stopped the ships in the port that could last from 1 to 7 days. They stopped it very simply: put a stamp on the shipping documents that there was radiation cargo on the ship. Despite the fact that the cargo was actually clean, as while loading on the ship, it had already passed radiation control and the radiation frame did not work. They released the ship from the ports in different ways: someone “agreed”, someone paid a fine for “pollution” of the water area. There was great disturbance of the business, core business associations required the actions of environmentalists to be brought within the law, to change the procedure and deprive them the right to conduct radiological monitoring. The legislator even changed a number of laws to minimize abuses by representatives of the State Environmental Inspectorate. However, the result was not changed. Corruption is still continue, only the ban on the ship’s departure is now made out not by stamping, but using the decree on the ban on leaving the port.

Why does a business suffer such losses? Because over the past year, none of the officials who exceeded their authority was not brought to any responsibility. Experiencing enormous losses from illegal decisions of the State Environmental Inspectorate, business has never transferred them on the shoulders of the state and the person who directly took one or another illegitimate decision. No responsibility – no changes.

In the dry residue

If there will be no fundamental political changes, we can expect that in 2019 everything will remain the same without significant changes. In other words, changes that are important for business are not going to happen without actions. Therefore, the business must unite efforts and break by itself these unfavorable tendencies.

If the political alignment of forces will change, then anything can happen. It can not be modelled or predicted.

5 basic business recommendations for 2019

1. Carefully examine the requests to the company from tax and law enforcement agencies. First of all, identify the legality of the claim.
2. Do not put forward original source documents, especially if such a requirement is not specified in the request or there is no requirement for issuing documents at all (companies often issue original documents, even if they are not asked. This is a mistake!).
3. Think carefully about the response to enforcement or tax authorities. It depends on what you write in the answer whether you have temporary access to documents or a search in your company. You can help yourself and avoid the above problems.
4. Prepare the company and its employees for possible investigative actions. I am personally fundamentally against “modeling mask shows” (the guys come to your office and “simulate” the search). You will not achieve nothing, but shock and panic among the staff. We stand for a step by step approach. Start from the office, then develop and implement internal rules for communication between employees and departments. After that, step by step, teach every employee what to do at certain points in time. If you remove panic and fear then you will gain efficiency. So, you will avoid “surprises” during investigative actions. And you will not suffer extra expenses.
5. Perform constant monitoring of actual and future counterparties. This is a simple rule, which ignoring is very expensive later. It is all about preventive measures that are effective protection against possible negative events in the future.