As a European company, we are accustomed to the idea that honest business is a partner of the state, and any issues can be resolved within the legal framework. However, in Ukraine, this rule, based on our experience, does not seem to apply.
Over the past year, we have witnessed firsthand how the Ukrainian government is creating obstacles for businesses operating in the country, which will soon have a detrimental impact on the entire Ukrainian economy and international investments.
About a year ago, we accidentally discovered that Arricano business in Ukraine was involved in a criminal investigation, the content of which was not just erroneous but absurd. The main accusation was the assumption by the investigation that Arricano Real Estate Plc’s shopping malls in Ukraine were financing the terrorist state of Russia in 2022-2023. Such accusations are technically absurd, as Ukrainian companies have had a severely limited range of financial operations they can conduct outside of Ukraine since 2022, according to the NBU resolution. However, the law enforcement and prosecution are not interested in this argument or the company’s transparent financial records. It is clear that the issue here is not about stopping any illegal activities.
From the beginning, all the lawyers, consultants, and partners we worked with told us one thing – your business was targeted. We often heard about the impunity of law enforcement, abuse of power, and the corrupt relationship between the government and businesses. Various sources mentioned the names of SBU unit leaders and their „curators,“ who, according to them, were the main beneficiaries. But we were confident that the court would be on our side, as the absurdity of the accusations was evident. However, we found ourselves in a situation where, based on the same prosecution arguments, one judge from Solomianskyi Court decided to freeze part of our assets and accounts and transfer them to ARMA management, while another judge considered the prosecution’s evidence insufficient and refused to block two other shopping malls.
It is hard to find logic where there is none from the start. And if there is no logic and evidence, there are other motives. So, all our consultants who spoke about the targeting were likely right. Someone is indeed using their influence on the SBU, prosecution, and courts to take away the business of a European investor. And such a situation has become the norm for Ukraine. But who benefits from this? Ukraine? One or two corrupt officials who hold power? The answer is obvious. Ukraine is digging itself into a hole that corrupt officials are digging for businesses, as there are dozens, if not hundreds, of similar cases in courts. As a result, companies close, investors become disillusioned, and they no longer invest in the country’s economy, which is at war. The government seeks money and raises taxes, leading to the closure of even more businesses. This vicious cycle will not only fail to lead to victory in the war but will simply play into the hands of the enemy.
As a European company, we are used to the idea that honest business is a partner of the state, and any issues can be resolved within the legal framework. However, in Ukraine, this rule, based on our experience, does not seem to apply under any government, regardless of whether there is a war or not. In our history in Ukraine, there was a case with Sky Mall, where businessmen and influential corrupt officials illegally seized our business ten years ago. Unable to find justice within the Ukrainian legal system, we initiated an international arbitration procedure, which would have cost the Ukrainian state and its taxpayers hundreds of millions of dollars in compensation. However, after February 24, 2022, we stopped this process, realizing that we cannot stab the country in the back while it is at war. However, our desire to support Ukraine may ultimately cost us the entire Ukrainian business. As they say, the road to hell is paved with good intentions.
Currently, our experience is repeating itself almost the same as ten years ago. We are once again fighting against the Ukrainian legal system, judiciary, and calling on the government to use common sense. But even the structures created by the government to protect businesses, while formally submitting statements to the prosecution and SBU, informally wash their hands – „if there is the SBU, we cannot and will not do anything.“ This means that law enforcement and prosecutors become superior to the executive branch and serve as an indisputable argument that the Ukrainian law cannot handle. As a result, we will have to go to European courts and arbitrations to receive compensation from Ukraine for the property stolen by corrupt officials and our ruined business.
In conclusion, the situation in Ukraine, where the government is creating obstacles for honest businesses, is not only detrimental to the economy but also undermines the trust of international investors. It is essential for the Ukrainian government to address these issues and create a more transparent and fair business environment to attract investments and promote economic growth. Failure to do so will only lead to further economic decline and damage the country’s reputation on the international stage.