Ministry of Environment, Ukraine Tenth Meeting of the EECCA Environmental Finance Network 22-23 February 2007, Paris Performance Review of the State Environmental Protection Fund of Ukraine Mykola Pilipchuk Ministry of Environment, Ukraine

Dynamics of Actual Proceeds and Expenditure Channeled by the State Environmental Protection Fund for Environmental Activities in 1998-2006 and Projection for 2007 10.9 37.4 56.6 65.9 81 95.9 124.5 509.1 516.8 6.9 11.3 23.7 64.4 51.1 95.4 118.1 41.6 129 415.6 2.7 100 200 300 400 500 600 1998 1999 2000 2001 2002 2003 2004 2005 2006* 2007* (projection) Year Amount of funding, mln HRV Proceeds Expenditure

ECONOMIC MECHANISM OF ENVIRONMENTAL ACTIVITIES CHARGE STANDARDS INDEXATION MECHANISM WAS DEVELOPED, WHICH WAS IMPLEMENTED BY DECREE OF THE CABINET OF MINISTERS OF UKRAINE NO. 1423 OF 18.10.06. AS A RESULT, PROCEEDS TO THE ENVIRONMENTAL PROTECTION FUNDS ARE PROJECTED TO INCREASE BY HRV 57.9 MLN IN 2007 VERSUS 2006, OF WHICH THOSE TO THE STATE FUND, BY HRV 37.6 MLN (7.5 PERCENT), AND THEY ARE PROJECTED TO INCREASE CONSISTENT WITH THE COUNTRY’S INFLATION RATE IN THE FUTURE. DRAFT LAW “ON AMENDMENTS TO SOME LAWS OF UKRAINE” WAS DEVELOPED (EXPANDING THE ENVIRONMENTAL POLLUTION CHARGE BASE), WHICH WILL INCREASE THE NUMBER OF PAYERS AND THE CHARGE BASE AND WILL RAISE PROCEEDS TO THE ENVIRONMENTAL PROTECTION FUNDS. FOR EXAMPLE, PROCEEDS FROM THE CHARGE FOR AIR POLLUTION FROM MOBILE SOURCES ALONE WILL EXCEED HRV 100 MLN VERSUS HRV 23.2 MLN IN 2005. DRAFT TAX CODE IS BEING DEVELOPED.

ORDER OF THE MINISTRY OF ENVIRONMENTAL PROTECTION OF UKRAINE NO ORDER OF THE MINISTRY OF ENVIRONMENTAL PROTECTION OF UKRAINE NO. 395 OF 4 SEPTEMBER 2006 ON POLITICAL PRIORITIES, STRATEGIC AREAS, AND OBJECTIVES OF THE MINISTRY WITH A VIEW TO ORGANIZING PROPER OPERATION OF THE MINISTRY OF ENVIRONMENTAL PROTECTION IN COMPLIANCE WITH THE PROVISIONS OF THE NATIONAL UNITY UNIVERSAL, COALITION AGREEMENT, AND REGULATION ON THE MINISTRY APPROVED BY DECREE OF THE PRESIDENT NO. 1842/2005 OF 27 DECEMBER 2005, I HEREBY ORDER: 1. SET POLITICAL PRIORITIES, STRATEGIC AREAS, AND OBJECTIVES OF IMPLEMENTATION OF THE STATE POLICY REGARDING ENVIRONMENTAL PROTECTION, MANAGEMENT OF NATURAL RESOURCES, ENVIRONMENTAL SAFETY, AND TOPOGRAPHIC, GEODETIC, AND CARTOGRAPHIC ACTIVITIES. ІІ. STRATEGIC AREAS AND OBJECTIVES: SET UP WITHIN THE FRAMEWORK OF THE MINISTRY OF NATURE A STAND-ALONE PUBLIC INSTITUTION – STATE ENVIRONMENTAL FUND AS A SINGLE MANAGER OF THE STATE FUND RESOURCES CHARGED WITH THE TASK OF MANAGING THE RESOURCES OF THE STATE ENVIRONMENTAL PROTECTION FUND.