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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

An Unnecessary Bill?

13 September, 2005 - 00:00

“A wealthy prospective investor wishes to meet a Ukrainian counterpart to set up a television or radio company in Ukraine. Those who are unwilling to bypass the law need not apply.” Indeed, to launch a channel in Ukraine, a foreigner must find a reliable partner with a Ukrainian passport. Otherwise he won’t be allowed to do so under the law, specifically as outlined in Article 13, which reads that “in Ukraine television and radio broadcasting companies cannot be created by foreign legal entities, individuals, and stateless persons. The creation and operation of television and radio companies with foreign investments is banned if the statutory fund consists of more than 30% foreign investments.” The Verkhovna Rada failed to change the latter clause during its session on September 6, when 263 MPs voted for a repeat first reading of the bill that provides for an increase of up to 35% in such television and radio companies. They did not like it. Could it be because one of the prerequisites for membership in the WTO, to which our government and the president aspire, is maximum (up to 100%) transparency governing the inflow of foreign investments in the media, or because in order to obtain foreign investments, e.g., in a newly formed television company, it is easy to set up a firm in Ukraine, which will actually become its owner? Under the law, each license application must specify the founder’s, name, location, etc., but not the actual owner of a television or radio organization. In fact, most people know who controls one channel or another, but no one can prove it.

The National Television and Radio Council of Ukraine says there are 23 television and radio companies officially registered in this country, with one nonresident or a business with foreign investments as a cofounder. Of these, 7 are national broadcasters (including Inter, 1+1, TET, Novyi kanal, ICTV), 3 are national radio broadcasters, 2 are regional, and the rest are considered local networks. How is this bad and who is bothered by the fact that foreigners will be investing their capital in the Ukrainian media? NTRCU member Viktor Ponedilko says that investment has actually nothing to do with the statutory fund. According to Ukrainian law, the statutory fund can only have zero investment. The owner of a television or radio company, again according to our law, must go to a bank to obtain a loan. Therefore, the percentage that someone may have registered in the statutory fund is irrelevant. Thus, this clause should be abolished so as to provide full access to foreign investments. Regulatory measures would then be required only with regard to foreign media information activities in Ukraine, not economic ones, and this would be much simpler.