November 27, 2015. On November 26, the Agreement between Ukraine and Japan on promotion and protection of investments came into force. “This Agreement will not only give an impetus to the influx of new investments into Ukraine, but is also a support for the country. Economic growth and development is now very important for Ukraine to meet all challenges, including those associated with the conflict in the east of Ukraine and to ensure stability,” said Sumi Shigeki, Ambassador Extraordinary and Plenipotentiary of Japan to Ukraine at a press briefing at Ukraine Crisis Media Center.
Mr. Shigeki said that many Japanese companies are currently looking for new investment destination, and Ukraine, due to its geographical location, lower labor costs and the overall high level of education, is a very attractive option for the European market-oriented companies. In particular, in September this year FudjikuraAutomotive, which produces wire harnesses for automobiles, entered the market in Lviv. Besides, added Mr. Shigeki, some companies are currently considering a similar perspective. The only thing that currently makes investors hesitate is unfavorable business environment. “For the investment inflow to be started, we expect improvement of investment climate in Ukraine. In particular, transparency and predictability of legislation and policy as a whole,” noted the Japanese Ambassador. According to him, investors are wary of certain subjectivity and unpredictability of interpretation of legislative regulations as well as currency restrictions. “We hope that the Ukrainian government will improve the business environment by implementing the reforms mentioned in this Agreement,” concluded Mr. Sumi Shigeki.
The Agreement between Ukraine and Japan on the Promotion and Protection of Investments was signed in February 2015. The Agreement provides for granting “Most Favored Nation Treatment” to investors of the contracting parties as to the establishment, acquisition and expansion of investments. In particular, protection against unlawful expropriation and nationalization of investments is reciprocally guaranteed. The Agreement establishes the right of investors to the free transfer of funds related to investments, and determines the procedures for the settlement of investment disputes.