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“Britain may be leaving the EU, but is not forgetting Ukraine” | International relations audit

Ukraine’s Minister of Defense Stepan Poltorak at a meeting with the UK’s Secretary of State for Defense Michael Fallon at a meeting in London in September 2016. Photo:
“Britain may be leaving the EU, but is not forgetting Ukraine” | International relations audit
Article by: Serhiy Solodkyi, Mykola Bielieskov

The interaction between Ukraine and the United Kingdom demonstrates hundreds of examples of intensive collaboration, yet there are even more examples of shortcomings in the work between the two nations. Currently, Kyiv considers that it receives an insufficient level of support from London. Meantime Britain ties its policy on Ukraine to the success of reforms, and if the country could finally show achievements in the anti-corruption, then the British would be more motivated to help further.

Relations between the United Kingdom and Ukraine during the 25 years of its existence have had ups and downs. For London, the quality of Ukraine’s internal processes has been, and remains, a key factor for relations. However, Kyiv has demonstrated a steady interest in developing relations with Britain more at a formal level, especially prior to the war between Ukraine and Russia, evident by the vastly greater number of official visits of Ukrainian officials to London than the number of visits of senior British politicians to Kyiv. Since 1991, only one (!) full formal visit of a British Prime Minister to Ukraine took place, which was John Major’s visit in 1996.

Back in 2008, the two sides declared that their relations are strategic in a joint statement.

In its policy towards Kyiv, London was guided by the vision that it’s in British interests to transform Ukraine into a full-fledged member of NATO in the mid-2000s. However, later, during 2009-2013, the emphasis shifted to supporting the drafting and signing of the Association Agreement between Ukraine and the EU, after Ukraine declared its “non-alignment,” as a step to its future full membership in the EU.

“Britain may be leaving the EU, but is not forgetting Ukraine.”

At present, the official British Government defines its interests in Ukraine as follows:

  • guaranteeing a resolution to the Ukrainian-Russian conflict in accordance with international law;
  • ensuring the effectiveness of internal reforms by providing appropriate financial and technical assistance;
  • transforming Ukraine into a reliable partner in the international arena;
  • maximizing bilateral trade in the future.

Despite Brexit, Britain continues to pursue all these interests. This was clearly demonstrated through contacts at the highest level that Kyiv managed to establish with Theresa May’s government: visits to Ukraine by Secretary for Foreign and Commonwealth Affairs of the United Kingdom in September 2016 and March 2017, the visit of the Secretary of Defense of the UK to Ukraine in January 2017 and the working visit of the President of Ukraine to the UK in April 2017. These steps taken by the new leadership of Britain clearly fit into the motto “Britain may be leaving the EU, but is not leaving Europe,” or even “Britain may be leaving the EU, but is not forgetting Ukraine.”

Meanwhile, Ukraine’s interests towards Britain are:

  • maximum involvement of the UK in strengthening defense capability and increasing pressure on Russia to implement the Minsk Agreements under the Ukrainian vision and for the ending of the occupation of Crimea;
  • obtaining diverse assistance for domestic reforms;
  • continuance by the British Government of an active policy in the international arena, despite the withdrawal process from the EU – thereby the UK continues to be one of the major international partners of Ukraine;
  • attracting British investments.

So far it may be said that the interests of Ukraine and the United Kingdom are complementary ones. Although both countries have enough skeptics, who don’t anticipate drastic positive changes in relations between Ukraine and Britain at least until the British Government completes the process of “divorce” with the EU and for that Ukraine will have to stock up with patience for, at the very least, two years.

A decisive, but backstage role

Great Britain has always consistently supported the Euro-Atlantic and European integration of Ukraine. London favorably looked at the prospects of giving Ukraine the perspective of membership in the European Union in the future. The role of Britain was particularly tangible on EU-related issues ahead of the Vilnius summit in 2013, where the Association Agreement was planned to be signed. After the start for Russian aggression in 2014, the British demonstrated their partnership responsibility towards Ukraine through active efforts in sanctioning Russia, providing assistance in the defense sector, supporting reform efforts.

During 2009-2013, in its relations with Ukraine, the UK made the priority of promoting the Association Agreement, especially regarding a Free Trade Zone between Ukraine and EU, as the main mechanism for the transformation of Ukraine in accordance with British national interests, following the scenario used in Central and Eastern Europe in the 1990s. The UK perceived the Association Agreement as a first step towards future full membership of Ukraine in the EU.

This made the British side stand out, as such an interpretation of the Association Agreement between Ukraine and the EU was shared primarily by the Central European states (former Soviet bloc countries), while other European states stressed that this Agreement should not create illusions about an EU membership perspective in Ukraine.

Britain proved to be especially active during the most critical period of 18-21 February 2014 in order to achieve an agreement between the parties of the crises in Kyiv. The British government led by David Cameron adopted a position that it was the primary responsibility of the Ukrainian government to return the situation to a peaceful track. Also, the UK was one of the initiators of sanctioning Ukrainian authorities at the EU level and actively coordinated its position with Germany and Poland, who were mediators in the dialogue between the Ukrainian government and Euromaidan protesters.

These recent examples demonstrate the desire of the British Government to play one of the leading roles in the choice of direction of Ukraine’s foreign policy in 2012-2013. Britain took part in this in a so-called backstage role: its efforts were crucial, sometimes decisive, but London did not always seek to demonstrate this or highlight any leading role. 

Rigid stance on Russia

The Ukrainian-British relations in the environment of Russian aggression experienced a significant upswing. The British side is not a member of the “Normandy format,” however, was one of the main proponents of the need to introduce and maintain the regime of sanctions against Russia. The British Government is also actively working on the reaching of a consensus on this issue both within the EU and within the framework of collaboration between the USA and European countries. However, Ukraine is not entirely happy with this situation, believing that the UK could and should be more active, given commitments made in the framework of the Budapest Memorandum in 1994, and that the British Government could have done much more to block Russian assets, given the significant presence of Russian capital in Britain.

With the start of Russian aggression against Ukraine in 2014, the main objective of Ukraine’s national foreign policy was to obtain maximum political support from international partners, especially the signatories of the Budapest Memorandum – not least the United Kingdom. On 2 March 2014, the Ukrainian Parliament in its address to the Parliaments of these nations urged them to send observer missions to Ukraine as well as organize a group to negotiate with Russia. In result, consultations were held between the Heads of the Foreign Ministries of Ukraine, UK, and the USA in Paris on 5 March 2014. The Kremlin ignored Britain’s invitation to the meeting. The Western participants of these discussions often reiterated the importance of this meeting, stating that every effort had been made to meet the requirements under the Budapest Agreements. Although many observers in Ukraine still pay attention to the untapped potential of the Budapest memorandum in the need for more active inclusion of the United Kingdom in the discussion process.

By 2 March 2014, official London refused to participate in the preparations for the G8 summit in Sochi. Also, UK, in concert with the United States, began to promote the idea of the need to introduce sanctions against Russia. The result of this mutual work was a joint statement by the G7 countries about the events in Ukraine, which effectively excluded Russia from this informal international association.

Similarly, at a meeting of foreign ministers of EU Member States, the United Kingdom put the need to introduce sanctions against Russia in response to the aggression against Ukraine on the agenda.

Britain was becoming a country from an informal minority group in the EU which advocated for the most rigid stance on Moscow. The British Secretary for Foreign and Commonwealth Affairs had said on 17 March 2014 that the EU was moving to impose sanctions on Russia by means of the freezing of assets and denial of visas to individuals. This step concerned 21 individuals and had been approved by the EU on the very same day.

However, Great Britain was not included in the so-called “Normandy” negotiations format over the conflict in Donbas, though such a presence would be more logical, given the Budapest commitments. Britain argues that the “Normandy Format” itself exists with the United Kingdom’s approval and thus reflects the position taken by Britain, believing that this format of discussions with Russia must not be extensive in order to be effective. However, London does not distance itself from the settlement process – it insists on tougher sanctions against Russia.

At the time when the main format of talks on resolving the conflict in Eastern Ukraine shifted to the Normandy quartet of the Heads of State and foreign ministers of Ukraine, Germany, France, and Russia, the political collaboration between Ukraine and the UK was limited to a number of aspects:

  • close coordination of efforts by London and Kyiv in the international arena to counter Russian aggression;
  • proactive efforts of the UK on building a consensus within the EU to introduce further sanctions and maintaining them until the full implementation of the Minsk Agreements by Russia;
  • active monitoring by Britain of the situation surrounding the Russia-Ukraine conflict.

Regarding the Russo-Ukraine conflict in Eastern Ukraine, Britain considers that security in the “Separate areas of Donetsk and Luhansk oblasts” is a necessary precondition for advancing a political settlement and that sanctions against Russia could be lifted only in the event of full implementation of the Minsk Agreement.

The United Kingdom considers the OSCE Special Monitoring Mission to be one of the key mechanisms for ensuring compliance with the Minsk Agreements. On 18 November 2014, the British Government announced the decision to transfer 10 armored vehicles with the appropriate communication equipment to the OSCE Special Monitoring Mission and its willingness to increase the number of British members of the Mission. The pledge to transfer the promised equipment was fulfilled on 13 January 2015. In 2017 there are 45 British citizens participating in the OSCE SMM, which forms the second largest national contingent.

Ukrainian reforms facilitator

Britain had been active in providing support for Ukrainian reforms, and this process intensified after the Euromaidan revolution. British politicians considered that only through effective internal reform Ukraine will be able to solve its problems of structural weaknesses, through which Russian aggression was largely made possible.

In May 2015 at the Eastern Partnership summit in Riga, David Cameron said that GBP 3.5 mn had been allocated to the Good Governance Fund to support good governance and economic reform, of which Ukraine was to receive GBP 2 mn. These funds were specifically aimed at establishing anti-corruption bodies (GBP 1 mn), and GBP 200,000 to ensure the work of independent media and journalism.

Key areas of work were designated as building economic growth and job creation through integration with the EU, combating corruption and strengthening the rule of law, transparency and the accountability of government. A strong and successful economy is the basis of the interests of the UK in the nations of the Eastern Partnership. Today the UK is assisting Ukraine with four funds, with a significant portion of programs of three funds concerning the facilitation of internal reforms.

However, the UK has been ambivalent in accessing the results of reforms in Ukraine. On the one hand, during a visit to Ukraine in March 2017, the new Foreign Secretary Boris Johnson proposed to hold an International Conference in July to assess reforms to show that significant progress was being made in reforming Ukraine. On the other hand, a government document entitled Overseas Business Risk – Ukraine, published in September 2016 clearly stated that despite the fact that the last two governments have taken more steps towards reform than during the whole history of independent Ukraine, the rate of change was still slow. Therefore Ukraine should clearly understand that the expectations of the British side on the practical results of reforms will increase, otherwise Kyiv should not exclude the decrease the amount of aid.

Another aspect of British aid to Ukraine during this period was the decision taken 6 March 2014 to send a group of experts that would deal with the return of stolen financial assets transferred overseas. However, the situation in this regard has not particularly progressed since the British Government has drawn attention to the lack of effort on the part of law enforcement agencies in Ukraine.

Another form of British assistance to Ukraine could be liberalizing the visa regime. Negotiations on this matter are difficult after Britain’s withdrawal from the EU, in particular, to better control its borders, while the substantial costs and difficulties associated with British visas negatively impact Britain’s positive influence in Ukraine, especially after the establishment of the visa-free regime with the EU. In this situation, Britain could consider extending the period of duration of its GDP 85 visa from 6 months to 2 years, like it is for citizens of China, or enabling the Electronic Visa Waiver scheme, which exists for a number of Gulf States which is free and produces an electronic document without the need to visit a visa centre.

Military assistance to Ukraine by the UK

Along with assisting through NATO mechanisms, the British Government supplied material and logistical assistance to Ukraine. Overall, during the 2014-2016, the United Kingdom has provided material and logistical assistance to Ukraine to a total amount of $ 4.9 mn, or 2.9% of the total international assistance looking at the five major international donors.

Also, Britain organized training programs for Ukraine’s armed forces to reduce casualties in the Ukrainian military. In late 2016, British troops located in Ukraine had provided 30 different courses and training programs at 14 different sites. The British prograe helped prepare the biggest contingent of troops for the armed forces of Ukraine.

The extensive assistance by the United Kingdom has made possible the signing of the Memorandum on Cooperation in the military area on the 17 March 2016. Thus, military collaboration has been given a strong and stable nature.

Ukrainian-British trade and cooperation in economic sphere

Ukrainian interests toward the UK in the economic sphere are based on the intent to maximize foreign direct investments (FDI) and eliminate the imbalance in mutual trade. The UK still considers Ukraine as a state with significant business opportunities, which is why London demonstrated great interest in a free trade zone between Ukraine and the EU; however, British investors hesitate to enter Ukrainian market.

The UK’s withdrawal from the European Union could become a new obstacle, as both countries have not yet managed to envision the conditions for their cooperation in trade and economic sphere in two years, when the Association Agreement will not affect the UK anymore (unless, of course, London does not agree with the EU on the maintenance of this document after the Brexit). As of April 1, 2017, British FDI in the economy of Ukraine amounted to $2 bn, which makes the UK 4th biggest foreign investor in Ukrainian economy.

In 2016, Ukrainian-British trade in goods amounted to $1 bn ($317 mn of exports to the United Kingdom and $709 mn of imports). Ukraine mostly exports metals and agricultural products, while British exports mostly comprise chemical products, vehicles, and hardware. Overall, in 2016 the mutual trade amounted to $2.05 bn, compared to $2.1 bn in 2015.

There are several areas where the British presence is particularly noticeable and important – food industry, oil and natural gas production, consulting, retail. This in turn demonstrates the progress in trade and economic cooperation over past 25 years. However, we shouldn’t get illusions – Britain’s FDI in neighboring Poland in 2014 was EUR5.87 bn, over three times more.

British businessman named the following obstacles to doing business in Ukraine: political and economic instability, corruption, bureaucracy and overregulation of the economy, inefficient tax and legal systems, problems with protection of intellectual property rights, and lack of transport infrastructure. Obviously, these problems are not exclusive to relations with the UK, they are essentially universal in cooperation with any international partner. Moreover, there are additional risks, such as occupation of Crimea and the war in the east.

This report was conducted with the support of the “Think Tank Support Initiative” implemented by the International Renaissance Foundation (IRF) in partnership with Think Tank Fund (TTF) with the financial support of the Embassy of Sweden in Ukraine. The full report is available here.

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