Minister Lehtomäki signs agreement on promotion and protection of investments between Finland and Ukraine

Press release 228/2004
7 October, 2004


Paula Lehtomäki, Minister for Foreign Trade and Development, signed a new agreement between Finland and Ukraine on the promotion and protection of investments today at an event held in Helsinki. Signing on behalf of Ukraine was Kostyantyn Gryschenko, the Ukrainian Minister for Foreign Affairs. The new agreement between Finland and Ukraine was negotiated on the initiative of Finland. It replaces an earlier agreement that in many respects no longer corresponded with current international principles concerning the promotion and protection of investments. Finland strives by means of the new agreement to ensure that Finnish investors will receive a more just and equitable treatment in Ukraine.

Thus far, Finnish companies have made few production investments in Ukraine. The new agreement improves the investment climate and makes the country a more interesting site for Finnish investments in future.

Ukraine is among Finland’s most notable trade partners in the CIS area. Finnish exports to Ukraine amounted in 2003 to a little more than EUR 200 million and imports to over EUR 50 million. The volume of trade rose by one-quarter on the previous year. Finland’s most important export products are paper, telecommunications and electrical equipment, industrial machines, and paints and dyes. Imports, in turn, concentrate mainly on iron, steel and other ores, and on textiles. In 2003 fewer than 60 Finnish companies exported to Ukraine. More than 30 companies have premises in Ukraine.

There are now 48 agreements on promotion and protection of investments in force between Finland and other nations. The agreement shields Finnish companies’ investments against political risks and stipulates that even in variable conditions, investments must be treated impartially with regard to investments from both foreign and domestic companies. Further, the agreement guarantees the free transfer of invested funds and their returns to and from the country. The agreement also includes an obligation to pay compensation for losses arising through expropriation, confiscation and damage.

Additional information: Jukka Nystén, Head of Unit, Department for External Economic Relations, Ministry for Foreign Affairs, tel. +358 9 1605 5071.