Ukraine: GR Goes All Out To Become Fashionable

Public law and regulation can make or break any business. Government relations and public policy practice helps clients to promote policy change, shape draft legislation and manage regulatory risk.

Rapid changes in the political environment in Ukraine and active implementation of reforms have provided a new approach for international and local businesses to deliver messages to government stakeholders in a transparent and compliant manner.

The desire to influence decision-making has always been one of the distinguishing features for a company that has reached a certain level of development. But the primary task of GR is to establish permanent contacts and a reliable relationship between the stakeholders and business at all levels.

WHY DOES GR HAVE AGO-GO TREND?

GR and lobbying are not currently subject to specific regulation in Ukraine, but it has moved sharply into selfstanding legal practice. Why has that happened?

  • After the Euromaidan revolution of 2014 and the start of a widespread reform agenda, demand for GR experts and related expertise skyrocketed;
  • The moving of lawyers into government and the executive branch expanded contacts with the legal and business communities;
  • Starting from 2015 the increasing pace of DCFTA implementation and its impact on business, both private business and the legal community, established permanent GR practices.

Although Ukrainian law firms strongly communicate their involvement in GR practice, very few of them actually report cases publicly. On a separate note, the enlisting of foreign-based corporations as clients with highest standards of provision of GR services, requires from a legal consultant active promotion and communication of their experience in this area. Subsequently, compliance with local laws and with FCPA (Foreign Corrupt Practices Act) and the UK Bribery Act is a must to reach the most reputable clients. Moreover, having certified officers in GR in law, as well as an established zero-tolerance approach to corruption, would provide much greater chances of success in a diverging and challenging area of legal consultancy.

Today, GR in Ukraine is mostly about "know-who" rather than "know-how". However, a deep understanding of "knowhow" is also a key issue for a timely and proper approval of regulations. Mitigation of contradiction between business and the state in an unstable and changing legal environment pushes each stakeholder to benefit from GR - starting from legal drafting and ending with implementation of best practices in industry regulations, which also require foreign experience.

Attracting a GR expert is relevant when the regulatory framework goes against the actual state of play on the market while also contradicting basic regulatory principles. A large portion of GR work is done on updating existing legislation and implementing the Association Agreement that Ukraine signed with the EU, establishing a completely new regulatory framework in practically all segments of the economy.

HOW GR IS DONE

GR lawyers and lobbyists use sophisticated political experience and unmatched legal knowledge to advise businesses and governments on policy, legislation and regulation.

Clients seeking government relations solutions to legal or business issues need experienced advocates who understand the complexities of the legislative process involving all branches of powers. The most effective advocates must also be adept at using the rules of the legislative or regulatory process to develop and implement practical solutions, providing clients with services of the highest caliber.

A wealth of valuable and extensive contacts supported by extensive knowledge of the working environment helps to identify and craft innovative solutions for clients beyond what is typically offered by traditional lobbying shops and so create "added value" for businesses.

The current partisan alignment and "divided" political climate necessitate the ability to work effectively with members of all political parties. Although partisanship remains prevalent, the ability to "reach across the aisle" is often necessary for the successful advancement of legislation and policy initiatives.

What are main features of a GR lawyer in Ukraine? He or she is an experienced consultant with outstanding application of legislative norms in practice with permanent monitoring on where and what the real powers of state regulators actually are. The portrait of a Ukrainian GR expert are a business-oriented approach to a client's activities with best way solutions on how to be fit into the changing regulatory environment without significant losses.

For example, they offer companies interested in making certain legislative changes the opportunity to prepare a draft bill. This is a sort of exclusive service as it is not only a question of how to technically write or approve such a draft. This is also about how to maneuver between the norms already laid down in legislation with the proposed one so as to avoid any conflict and to smoothly overcome all the stages of approval and processes. Additionally, Ukrainian legislation requires all drafts of acts to be accompanied by a regulatory impact assessment (RIA). Put simply, a RIA calculates the cost of regulation for government and business and discovers analysis of alternative options of new regulatory changes. Without proper economic and data analysis it would be problematic to overcome the very requirements of the State Regulatory Service responsible for monitoring and approving the implementation of new drafts to all stakeholders.

A complex and sophisticated procedure and requirements of adoption to new regulations increased demand for GR experts not only from the business sector but also institutional stakeholders that, logically, do not have sufficient expertise in the area of lobbying.

The cost of GR services depends on the scale of the idea (depending on what changes the idea entails for all other market participants), the volume of legal and GR work (how much related legislation needs to be drafted and promoted) and the need to enlist experts with special knowledge of the economy, audit and data analysis.

On the other hand, the most effective results are delivered when consultants are involved through the entire legislative process, from identifying initial objectives to drafting new bills and from implementing legislation to application and enforcement.

HOW TO APPROACH GR IN UKRAINE

We have identified the main steps on how to approach GR consulting in Ukraine.

  1. Clearly identify your objectives in government relations - draw up a distinct and tangible list of GR objectives for 12-24 months that would most assist your business and investment. Outline a wish list and draft a detailed plan, including opportunities and risks.
  2. Know your key stakeholders. Stakeholder mapping is a fine, traditional instrument used in GR practice. Know who the decision-makers, influencers, opponents and supporters are. If in doubt on stakeholder analysis - contact your GR adviser.
  3. Know Anti-corruption legislation - always be compliant with local laws and with FCPA (Foreign Corrupt Practices Act) and the UK Bribery Act, including policy on gifts and entertainment. Clearly communicate a zero-tolerance approach throughout your organization. You could end up being personally liable for criminal prosecution if anti-corruption legislation is not fully adhered to.
  4. Identify any/all past dealings with government officials. Discuss with lawyers and inform your compliance department, review any past and existing compliance issues and report immediately in accordance with company procedures and local legislation.
  5. Closely monitor ongoing challenges in legislation and policy-making that are relevant to your business. Implement early warning systems in order to avoid any surprises. Look at opportunities for making your voice heard for changes in legislation.
  6. Be active in demonstrating the value that you are bringing to the country, economy and local community.
  7. Make maximum use of industry associations, both local and international, and foreign embassy support in Kyiv. Engage the business ombudsman (soon to be appointed).
  8. Work out and implement a clear and sustainable Communications Strategy, with clear messaging, delivery, including internal communications. Evaluate, in detail, the pros and cons of not going to the press with an issue.
  9. Build long-term relationships with all stakeholders. Never put all your eggs in one basket, especially with coalition politics. Speak one language - constantly engage with stakeholders, define how and who will communicate with them. Many public officials now speak fluent English and are delighted to demonstrate this. Make sure not to embarrass those who don't. Ascertain which language your stakeholder is most comfortable, or uncomfortable, speaking - Ukrainian, English or Russian.
  10. . Work with professional and reputable Government Relations advisers, offering first-rate local knowledge, advice and experience, while at the same time being able to communicate with top global captains of industry and government. Local knowledge of the legal system and experience of drafting of legislation is extremely important. Avoid short-term "fixers".

AFTERWORD

Adoption of lobbying regulations would provide the business community and public authorities with transparent and proper rules, creating additional value for all stakeholders, and a regulatory framework in generaL Along with ongoing active implementation of EU regulations and boosting of the Ukrainian economy, business would be more deeply involved in lobbying and GR activities, pushing the legal community to develop and introduce new ethical standards and expanding GR practice within both companies and law firms.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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