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“The team was recently visible advising on a number of pharmaceutical cases. Sources agree that the team is “moving in the right direction” and are particularly impressed by its work in the pharmaceutical sector”.

 

Depth of Recession

29.07.2014

Roman Marchenko, Senior partner at Ilyashev & Partners Law Firm
Source: The Ekonomichna pravda

Aggressive policy of the Russian Federation forced our government almost to cease military and industrial cooperation with Russia. It is quite logical as our defense factories supplied components for Russian arms and military equipment, which tomorrow can be used against our army and security forces in the ATO area (Donbas).

Meanwhile some strategic enterprises, in particular the aviation industry, continue their cooperation with Russian companies as previously signed intergovernmental agreements between the two countries have not been canceled after the Russian aggression began. Therefore, all agreements are still enforceable on the part of Ukraine. Moreover, Ukraine is ready for the implementation of joint projects in the aviation industry. However, political actions of the Russian Federation do not leave for our country other option but to cease any kind of cooperation.

It is noteworthy that after the start of an undeclared war, many Russian politicians and experts began to claim that the Russian Federation should “appropriate” all joint projects, in which Ukrainian enterprises participated actively. In their opinion, if it was a joint project, Russia has all rights to the results of joint activities. However, it is not always so and those wishing to appropriate the Ukrainian developments shall take the wind out of sales.

In aviation, e.g. the following rules apply. If a design bureau is “operating”, no actions, such as changes to the type design of the aircraft, can be taken without consent of the latter.

Now production of short-haul passenger aircraft AN-148, developed by Antonov ASTC has been launched in Voronezh according to license agreement. National state-owned enterprise as a technical writer receives royalties for each aircraft An-148 produced in Voronezh. The Russian party has no right to replace any detail specified in the technical documentation by any analog or to upgrade the aircraft without the consent of Antonov. Surely, the Russian party can ignore international law and use technical developments of Antonov ASTC for the production and modernization of aircraft in Russia illegally. The Russian government is already trying to apply such illegal behavior model as regards Soviet developments of the Ukrainian enterprise – AN-124 Ruslan and others.

The attempt to circumvent rights of the developer will only result in additional sanctions against the Russian Federation. All aircraft equipment manufactured or upgraded without the consent of SE “Antonov” cannot be used outside the Russian Federation. Although Russia has already proved to the world that compliance with international standards is more a matter of convenience rather than a priority.

At present many people are concerned how to separate joint industrial projects if the parties agree to terminate their agreements in a civilized manner. I note that a common mechanism of separation of the Ukrainian-Russian cooperation programs cannot exist. Each project has specific features that need to be studied and taken into account. This is a rather laborious process, which the parties are likely to through, possibly, in court.

It is also worth noting that the military aggression of the Russian Federation has a negative impact not only on the development of the domestic aviation industry, but also on air transportations. Our country is at war, and it is costly for both the state and average citizens. Solvency of the population falls. As a result, ticket sales reduce.

In addition, our country lost 5% of its territory as a result of annexation of the Crimea, and Ukrainian air carriers were deprived of destinations, which were in high demand in summer.

Events in the Donbas, especially Malaysian Boeing shot down by separatists, do not contribute to regular operation of the airlines.

All the above suggest that the domestic air transportation market will decline, the only question is the depth of recession. My estimation is that Ukrainian air transportation market will “shrink” to at least 25-30% as a result of the current year.

 

 
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