12/21/2015 Ukraine: Daily Highlights - Russia imposed sanctions against Ukraine effective January 1, 2016

Russia imposed sanctions against Ukraine effective January 1, 2016

12.21.2015 Daily Highlights by the Digests & Analytics Ukraine Agency

Topics from Media and Social Networks

• Russia imposed sanctions against Ukraine effective January 1, 2016.
• MP Levus demanded the arrest for separatism of Medvedchuk, former head of the Presidential Administration.

Key Events in Ukraine

• Parliament Speaker Groisman said that the working group on budget and tax reform comprised of the representatives of the Cabinet and the parliamentary tax and budgetary committees agreed on the controversial provisions of the new tax code. He said that the simplified tax system for small and medium-size businesses will be maintained, a single social contribution will be reduced to 22%, and local budgets will be financed based on the same system as in 2015.
• MIA opened access to the registry of private vehicles.
• Cabinet once again postponed the second population census in Ukraine to 2020.
• National Bank of Ukraine agreed the verification procedure for payment systems in Ukraine.
• The official dollar rate has not changed: 23.52 ₴/$ (-0.03 UAH), 25.56 ₴/€ (+0.05 UAH), 3.30 ₴/10 ₽.

Ukraine at War

• During the fighting in Donbas, two soldiers were injured. During the shelling and attacks, the militants also used, besides small arms, tanks, MLRS "Grad," artillery, and heavy mortars.
• SBU held a special operation in Avdiyivka, during which about 100 local residents were detained. Most of them have been released. The rest are suspected of the involvement in the activities of subversive groups and foreign intelligence services. Unregistered weapons were seized during searches of the suspects.

Ukraine and the World

• A round of negotiations of Ukraine, Russia and the EU on the Free Trade Area ended without result. Foreign Minister Klimkin said that there will be no tripartite consultations on FTA implementation.
• Russian Prime Minister Medvedev signed a decree on the introduction starting January 1, 2016 of responsive measures to Ukraine’s joining the sanctions against Russian following the entry into force of the economic part of the EU–Ukraine Association Agreement. Other countries of the Eurasian Economic Union – Belarus, Kazakhstan, Armenia and Kyrgyzstan – will decide on terminating the FTA regime with Ukraine within the CIS within six months.
• The EU Council has officially confirmed the extension of sanctions against Russia through July 31, 2016 for its failure to comply with the Minsk Agreements.
• Energy Minister Demchyshyn said that Ukraine would buy gas from Russia provided that the price is below $ 200 per 1,000 m3 before discounts.
• Polish President Duda believes that Ukraine needs the support of the countries of Central and Eastern Europe and should not be left alone in the situation of a simmering conflict.
• Head of the Institute of National Remembrance Vyatrovich said that the Venice Commission in an interim report recognized the right of Ukraine to ban and criminalize the promotion of totalitarian regimes.
• Because of the sharp devaluation of the manat after the introduction of the floating exchange rate, Azerbaijan temporarily suspended money transfers and foreign exchange operations.

The Trends

• Tension around the adoption of the new Tax Code and the next year budget increased. The Government and the President have agreed with parliamentary committees a compromise version of the tax reform, however, civil society and business representatives insist on the adoption of the draft Code prepared by them. Finance Minister Yaresko believes the draft budget prepared by the Government and agreed with the IMF has no alternatives. Head of the National Bank Hontareva said that the adoption of the budget that has not been agreed with the IMF could jeopardize the economic and financial stability in the country. Delaying the adoption of the budget would lead to a delay in receiving the next IMF tranche and the related international funding totaling $5 billion. Parliament Speaker Groisman said that the budget should be adopted before the New Year, and may be amended thereafter.