AUR#700 May 25 US Ambassador’s Parting Words; First Lady In Philadelphia, GUAM; Gas Crisis A Grave Strategic Challenge; Russian Language Issue Heats Up

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ACTION UKRAINE REPORT – AUR           
                 An International Newsletter, The Latest, Up-To-Date
                     In-Depth Ukrainian News, Analysis and Commentary

                      Ukrainian History, Culture, Arts, Business, Religion,
         Sports, Government, and Politics, in Ukraine and Around the World       

                        
ACTION UKRAINE REPORT – AUR – Number 700
Mr. E. Morgan Williams, Publisher and Editor  
WASHINGTON, D.C., THURSDAY, MAY 25, 2006 
           -——-  INDEX OF ARTICLES  ——–
         Clicking on the title of any article takes you directly to the article.               
Return to the Index by clicking on Return to Index at the end of each article
1.                    U.S. AMBASSADOR’S PARTING WORDS
              John HERBST: “I do not agree that a fresh look at the gas
           agreements will increase tensions between Ukraine and Russia”
INTERVIEW:
With U.S. Ambassador John Herbst
By Serhiy Solodky, The Day Weekly Digest in English #15
Kyiv, Ukraine, Tuesday, 23 May 2006

2UKRAINE GAS CO OWES $413 MILLION TO ROSUKRENERGO 

United Pres International (UPI), Kyiv, Ukraine, Tuesday, May 23, 2006

3UKRGAZENERGO EYES $1.2 BILLION IN LOANS TO FINANCE
                  GAS STORAGE FOR UKRAINE’S WINTER GAS 
Alex MacDonald, Dow Jones Newswires, London, Wed, May 24, 2006 .

4.     RUSSIA-UKRAINE GAS AGENT ROSUKRENERGO BUYS

Reuters, Moscow, Russia, Wednesday, May 24, 2006

5.              POLITICS: SIEGE OF THE EXCLUSIVE CIRCLE
         Gas crisis remains one of Ukraine’s gravest strategic challenges

  Political and economic “soap opera” playing inside and outside Ukraine
ANALYSIS AND COMMENTARY
: By Yulia Mostovaya
Zerkalo Nedeli On the Web; Mirror-Weekly, No. 19 (598)
Kyiv, Ukraine, Saturday, 20 – 26 May 2006

6.                GUAM – UNITED STATES JOINT STATEMENT
        US delegation led by David J. Kramer of the US State Department
Public Affairs Section, U.S. Embassy, Kyiv, Ukraine, Tue, May 23, 2006

7.              G.U.A.M. FAREWELLS ITS POST-SOVIET PAST
                Four former Soviet republics set a course for the West

   The GUAM Organization for Democracy and Economic Development
COMMENTARY: By Sergei Sidorenko & Vladimir Soloviev
Kommersant, Moscow, Russia, Wed, May 24, 2006

8.   FOUR EX-SOVIET STATES SAYS NEW REGIONAL ALLIANCE
NOT DIRECTED AGAINST RUSSIA BUT IS A PRO-EUROPE CHOICE
          Georgia, Ukraine, Azerbaijan and Moldova sign a new charter
Associated Press (AP), Kiev, Ukraine, Tue, May 23, 2006

9.            KREMLIN LOSES ITS GRIP ON IT’S DYING EMPIRE
       Four former Soviet republics set to abandon eastern commonwealth
ANALYSIS: By Richard Beeston, The Times, London, UK, May 24, 2006

 

10.   EASTERN UKRAINIAN REGION GIVES RUSSIAN LANGUAGE
                              SPECIAL REGIONAL STATUS
Associated Press (AP), Kiev, Ukraine, Thursday, May 18, 2006 

11UKRAINE’S MAJOR OPPOSITION PARTY ISSUES STATEMENT

                             ON RUSSIAN LANGUAGE ISSUE
Interfax-Ukraine news agency, Kiev, in Russian 1309 gmt 17 May 06
BBC Monitoring Service, United Kingdom, Wed, May 17, 2006

12UKRAINIAN CELEBRITIES SAY GIVING RUSSIAN LANGUAGE
                 SPECIAL STATUS IS A WAR AGAINST UKRAINE
   “We have a direct threat to the Ukrainian nation & Ukrainian state system.”
Natasha Lisova, Associated Press (AP), Kiev, Ukraine, Fri, May 19, 2006

13.    INCONSISTENT LANGUAGE POLICY CREATES PROBLEMS 
    PRU-led Ukrainian regions continue to adopt Russian as official language
ANALYSIS & COMMENTARY: By Oleg Varfolomeyev
Eurasia Daily Monitor, Volume 3, Issue 101
Jamestown Foundation, Washington, DC, Wed, May 24, 2006

14.      RUSSIAN MP SAYS UKRAINE MUST NOT TRAMPLE ON
                    RIGHTS OF RUSSIAN-SPEAKING MINORITY
ITAR-TASS news agency, Moscow, in Russian, 22 May 06
BBC Monitoring Service, United Kingdom, Monday, May 22, 2006

15RUSSIAN LANGUAGE COMPLAINT: ATTENTION OLEH SOSKIN
—– Original Message —–
From: Nadia Kerecuk; nadia.kerecuk@ntlworld.com

Action Ukraine Report (AUR) #700, Article 15
Washington, D.C., Thursday, May 25, 2006

16. PROSPECT OF BUSH VISIT PUTS PRESSURE ON KIEV PARTIES
By Tom Warner in Kiev, Financial Times
London, United Kingdom, Friday, May 19 2006

17. KATERYNA YUSHCHENKO TO VISIT PHILADELPHIA NEXT WEEK
      Meet with top health care professionals, address the World Affairs Council
By Morgan Williams, Publisher and Editor
Action Ukraine Report (AUR) #700, Article 17
Washington, D.C., Thursday, May 25, 2006

18.   ART EXHIBITION: “MAZEPIANA” – SERHIY YAKUTOVYCH
WHAT: The Embassy of Ukraine is proud to present an art exhibition
“Mazepiana” – the works of Serhiy Yakutovych.

WHEN: Thursday May 25, 2006, 7:00 pm
WHERE: Embassy of Ukraine, 3550 M St. NW, Washington, DC 20007

19“EMBASSY SERIES” CONCERT: THE EMBASSY OF UKRAINE

WHAT: Another marvelous pair of evenings of wonderful music
WHEN: Friday, May 26 – 8:00 pm; Saturday, May 27 – 8:00 pm
WHERE: Embassy of Ukraine; 3350 “M” Street, N.W., Washington

20
.          WASHINGTON IGNORES DEMOCRATIC VALUES
                                 IN QUEST FOR CHEAP OIL
Sylvie Lanteaume, Agence France-Presse, Wash, D.C, Sun, May 21, 2006
21.             INVESTING: ADVENTURES AT THE FRONTIER
       One market that Chief Investment Officer Chisholm likes is Ukraine
By Conrad de Aenlle, International Herald Tribune
Paris, France, Friday, May 19, 2006
 
22UKRAINIANS GATHER AT MASS GRAVE TO COMMEMORATE
                               VICTIMS OF STALIN REGIME 
Associated Press (AP), Kiev, Ukraine, Monday, May 22 2006
 
23.                               A BOOK FOR SKEPTICS: 
                “THE UKRAINIAN QUESTION” 70 YEARS LATER
By Mykola SIRUK, The Day Weekly Digest #15
Kyiv, Ukraine, Tuesday, 23 May 2006
 
24UKRAINIAN NATIONAL ASSOCIATION 36TH CONVENTION
Action Ukraine Report (AUR) #700, Article 23
Washington, D.C., Thursday, May 25, 2006
 
25  HUMAN RIGHTS WATCHDOG UNHAPPY WITH UKRAINE
  Ukraine continues to treat prison inmates cruelly and violate human rights
TV 5 Kanal, Kiev, in Ukrainian 1600 gmt 23 May 06
BBC Monitoring Service – United Kingdom; May 23, 2006
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1
                 U.S. AMBASSADOR’S PARTING WORDS
            John HERBST: “I do not agree that a fresh look at the gas
         agreements will increase tensions between Ukraine and Russia”

INTERVIEW: With U.S. Ambassador John Herbst
By Serhiy Solodky, The Day Weekly Digest in English #15
Kyiv, Ukraine, Tuesday, 23 May 2006

This week John E. Herbst, Ambassador Extraordinary and Plenipotentiary
of the US, is leaving Ukraine. He is heading for Washington to take over as
Coordinator of the State Department’s Office for Reconstruction and
Stabilization.

Obviously, the diplomat is leaving Kyiv with the sense that he fulfilled his
duties. When he arrived in Ukraine three years ago, he stressed that his
main objective was to improve relations between Kyiv and Washington.

The Orange Revolution occurred during his ambassadorial tenure. This was
followed by a real thaw in the relations between our two countries, crowned
by the repeal of the Jackson-Vanik amendment and the granting of market
economy status to Ukraine.

Herbst had a chance to witness what he calls two democratic elections in
our country.

[The Day] The Day began the interview with Ambassador Herbst by asking
if he believes his ambassadorial mission has been accomplished, even though
Ukraine is still without a cabinet.

[Amb. Herbst] “Naturally, it would be better to leave Ukraine after it has
formed a coalition government. But I am going long before the official term
for its formation expires. Why do I have to go to Washington right now? The
reason is the position that I will occupy has remained vacant for almost
four months.

Besides, although the formation of a coalition is extremely important, it is
not of a fundamental nature. The essential fact is that Ukraine has had two
democratic elections in a row: the presidential election rerun in 2004 and
the parliamentary election last March.

The Verkhovna Rada election may be unhesitatingly called the freest and
fairest in Ukrainian history. Above all, President Viktor Yushchenko must be
given credit for this. I consider the democratic nature of these elections
the logical final touch to my stay in Ukraine.”

[The Day] If the formation of a cabinet is not a fundamental factor, do you
think the domestic political situation in Ukraine is predictable?

[Amb. Herbst] “The last elections were important not only because the
authorities allowed them to be free but also because all the participants in
this race tried to achieve victory by democratic means. It was very pleasant
to watch political leaders doing their political work according to the same
standards that exist in all democracies.

As you know, some participants of the last parliamentary elections did not
adhere to democratic principles. As for the current problems with the
coalition, they are not unusual in a democratic society. We also witnessed
very difficult coalition negotiations in Germany after the latest
 elections.”

[The Day] Some politicians say that a coalition that includes the Party of
Regions will be a departure from democracy.

[Amb. Herbst] “We would like to see a coalition devoted to the cause of
reforms. The formation of the cabinet depends on the politicians who were
elected to the Verkhovna Rada. We will cooperate with the government that
is formed as a result of negotiations between these politicians.”

[The Day] Your successor William Taylor said the US is interested in a
revision of the Ukraine-Russia gas deal.

[Amb. Herbst] “The same applies here: it is the government of Ukraine that
should address this problem. If the government of Ukraine concludes that the
gas deal should be revised, it will find support and understanding on the
part of the US. As you know, since January of this year the US has not
hesitated to point out certain problems in this connection.”

[The Day] There have been many changes in US-Ukraine relations in the past
year. What problems are still on the agenda?

[Amb. Herbst] “As of today, our relations are very good indeed. We can
certainly point to a number of steps that prove this convincingly: the
restoration of privileges under the Generalized System of Preferences (a
program that gives most products from less-developed and developing
countries duty-free access to the US market – Ed.), a bilateral agreement on
the WTO, granting Ukraine market economy status, and the repeal of the
Jackson-Vanik amendment. All these steps show the progress Ukraine has
achieved in its reform-related activities.”

[The Day] What opportunities have been lost in US-Ukraine relations over
the past few years?

[Amb. Herbst] “US-Ukrainian relations saw a cool period of three or four
years that lasted approximately from 1999-2000 until the presidential
election. I can say that this period was lost time. But we have regained
what we lost in the last 15 months.”

[The Day] What would you advise your successor and all foreigners who
want to know more about Ukraine? What three pieces of advice would
you offer?

[Amb. Herbst] “It is very important to listen attentively to the people you
are dealing with. It is equally important to understand the motivation of
the people with whom you are talking and contacting, the motivation of
political forces. And, of course, it is extremely important to understand
the national interests of your own country.

The positive side of being the US ambassador to Ukraine is that Ukraine
and the US generally have very similar interests. This interest is, above
all, that Ukraine should be a democracy and a market economy. This is

the road not only to freedom but prosperity.”                    -30-
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LINK: http://www.day.kiev.ua/162527/
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2.  UKRAINE GAS CO OWES $413 MILLION TO ROSUKRENERGO 
 
United Press Internationional (UPI), Kyiv, Ukraine, Tue, May 23, 2006
KIEV, Ukraine — A Ukrainian gas company confirmed that it owed $413
million dollars to Swiss-based RosUkrEnergo.
 
State oil and gas company Naftohaz Ukrayiny confirmed it owes more than
$400 million for gas supplied by RosUkrEnergo in January and February of
this year, Yarolsav Dykovytskyy, acting director for financial and investment
issues and the head of Naftohaz’s department for economics and price policy,
said at a news conference in Kiev, UNIAN news agency reported.
Dykovytskyy was responding to allegations made in Ukraine over Naftohaz’s
debt to RosUkrEnergo. “It is not the case that we have not peen paying for
gas for four month. We have been paying for gas.
 
The debt was accumulated due to (the Russian state gas monopoly) Gazprom’s
failure to pay Naftohaz Ukrayiny for the transit of (Russian) gas (through
Ukraine),” Dykovystksyy said.                      -30-
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3. UKRGAZENERGO EYES $1.2 BILLION IN LOANS TO FINANCE
                   GAS STORAGE FOR UKRAINE’S WINTER GAS 

Alex MacDonald, Dow Jones Newswires, London, Wed, May 24, 2006 .

LONDON — The recently created Ukrainian natural gas supply company
UkrGazEnergo expects to raise $1.2 billion in loans to finance gas storage
for peak consumption during the winter months, Igor Voronin, Chairman of
UkrGazEnergo said Wednesday.

The new venture, called UkrGazEnergo, expects to raise $1.2 billion in loans
payable over a five-year period from “big banks” in order to buy and store
gas for this coming winter, Voronin told reporters at a press conference in
London. Voronin expects to secure the loan by August.

The company plans to store up to 12 billion cubic meters of gas in Ukraine
this year, about 38% of the 32 billion cubic meters of gas it plans to
import into Ukraine during 2006. Voronin also said the company plans to
increase its gas imports to 58bcm a year over the next five years.

He said that UkrGazEnergo has “the cheapest gas in Ukraine” and “as of today
… (it’s) much lower than the European average,” which should help the
company attract more customers in the future.

The company, which expects to generate about $4 billion in sales this year,
has already signed 17bcm of annual gas contracts with industrial customers
and expects to sign more contracts before the end of the year, Voronin said.

UkrGazEnergo was established at the beginning of the year as a joint venture
between Ukraine’s largest gas supplier, Naftogaz-Ukrainy (NGAZ.YY), and
RosUkrEnergo to supply gas to Ukraine’s industrial consumers with the help
of Naftogaz.

RosUkrEnergo, a joint venture between Russian gas major OAO Gazprom
(GSPBEX.RS) and a handful of private individuals, was also created at the
beginning of the year to solve a gas price dispute between Gazprom and
Ukraine that led to a temporary reduction in gas supplies to Western Europe.

Under the contract, RosUkrEnergo agreed to provide Ukraine with Russian and
Central Asian gas at a price of $95 per 1,000 cubic meters – a nearly
twofold increase for Ukraine but far less than the $230 it would pay if it
was getting only Russian gas.

Voronin said the contract with RosUkrEnergo is fixed until the end of the
year. When asked whether the price would re-negotiated for next year, he
said he wouldn’t comment.

Separately, Voronin said UkrGazEnergo plans to expand beyond gas supply to
industrial customers and move into “exploration, production of gas fields
(in Ukraine and) … beyond Ukraine.”

The company is also planning to set up a business which would help utilities
modernize their power plants in order to make them more energy efficient.
Lastly the company also plans to open a division dedicated to scientific
research in the gas industry.

Voronin said the loans “will cover all of UkrGazEnergo’s finance needs.” He,
however, didn’t rule out the possibility of raising more funds if the
company’s investment plans changed.

Voronin said the company had no plans to buy stakes in Ukraine’s pipeline
system. He also said that acquiring gas storage wasn’t feasible at the
moment although the company intends to play a role in modernizing Ukraine’s
storage infrastructure.

Separately, Voronin said that the financial problems at Naftogaz were due to
regulatory issues and government policies rather than bad management. He
said that Naftogaz plans to pay off its debt to RosUkrEnergo by June via
loan agreements. Naftogaz has incurred $400 million in debt owed to
RosUkrEnergo.                                -30-
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-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328;
alex.macdonald@dowjones.com

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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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4.       RUSSIA-UKRAINE GAS AGENT ROSUKRENERGO BUYS
CONTROL OF BIG GAS FIELD IN RUSSIA’S ASTRAKHAN REGION
Reuters, Moscow, Russia, Wednesday, May 24, 2006

MOSCOW – RosUkrEnergo, which was appointed at the start of this year to
manage Russian gas exports to Ukraine, has bought control of a big gas field
in Russia’s Astrakhan region, Interfax news agency reported on Wednesday.

The southern block of the Astrakhan gas condensate field contains 220
billion cubic metres of gas and around 20 million tonnes of oil. Citing a
source in the regional Astrakhan government, Interfax said the firm had
bought 74.87 percent of Astrakhan Oil and Gas Co., which owns the field,

and RosUkrEnergo co-owner Dmitry Firtash was now chairman of the
firm’s board.

The remainder of the shares, enough to block board decisions, is owned by
the regional government of Astrakhan, which is on the north coast of the
Caspian Sea.

Company documents from Astrakhan Oil and Gas show that it will need

over a billion dollars to develop the field and achieve target production
of 6 billion cubic metres a year. Firtash owns 45 percent of RosUkrEnergo,
while Russian gas monopoly Gazprom owns 50 percent. The remaining 5
percent is owned by Ivan Fursin.                    -30-
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5.           POLITICS: SIEGE OF THE EXCLUSIVE CIRCLE
          Gas crisis remains one of Ukraine’s gravest strategic challenges
   Political and economic “soap opera” playing inside and outside Ukraine

ANALYSIS AND COMMENTARY: By Yulia Mostovaya
Zerkalo Nedeli On the Web; Mirror-Weekly, No. 19 (598)
Kyiv, Ukraine, Saturday, 20 – 26 May 2006

By now, our readers have surely become sick and tired of discussions of

the gas issue. However, ZN feels committed to informing you quickly and
consistently about the most essential episodes in this political and
economic “soap opera” playing both inside and outside Ukraine.

The gas crisis (even in its current latent form) remains one of Ukraine’s
gravest strategic challenges, and thus requires ongoing media coverage.

Last week, ZN got hold of an amazing document, namely, the minutes from
negotiations between three working groups, representing the NJSC
NAFTOGAS UKRAINY, OJSC GASPROM and ROSUKRENERGO
AG Company, held on April 10th and 11th, 2006.

The minutes were signed by Riazanov, Vice Chair of the GASPROM Board;
Palchikov and Chuychenko, CEOs of ROSUKRENERGO; and Voronin,
Vice Chair of the NAFTOGAS Board.

The last fact is noteworthy since, on the one hand, Ihor Voronin has a
formal power of attorney from Ivchenko to sign official documents on behalf
of NJSC NAFTOGAS, which he did on January 4th, 2006 in Moscow.

On the other hand, Voronin chairs the Board of the UKRGASENERGO Joint
Venture, a NAFTOGAS competitor on the Ukrainian domestic market. So

there is a manifest conflict of interests, which, however, seems to be of no
concern whatsoever to our country’s government.

The minutes affirmed that, as of early April 2006, the NAFTOGAS debt to
GASPROM and ROSUKRENERGO was USD $400 million: “The NJSC
NAFTOGAS UKRAINY suggested signing a supplementary agreement to
Contract #14/935-1/04 dated 29.07.04 on the purchase of 5.7 billion cubic
meters of natural gas at USD 95 per 1000 cubic meters from

ROSUKRENERGO AG in March 2006″ (you will remember that the
negotiations were held in April, which is yet another, albeit circumstantial,
piece of evidence that the NJSC still has no gas balance).

“The ROSUKRENERGO AG Company confirmed that it would be ready to
supply 5.7 cubic meters of natural gas at USD 95 per 1000 cubic meters to
the NJSC NAFTOGAS UKRAINY in March 2006, provided the latter pays
off its current debt for the gas supplied in January-February 2006 under
Contracts #14/935-1/04 dated 29.07.04 (for USD $10,953,079.87 in January
and USD $354,215,180.41 in February) and #5-TPK dated 29.07.04 (for USD
$48,176,389.41)”.

According to our sources in the NJSC, of late Ukraine’s gas debt has
increased to USD $900 million (given the gas price of USD $95 per 1000 cubic
meters). One of the objective reasons is that in January-February, Ukrainian
enterprises buying gas from NAFTOGAS under contracts concluded earlier

paid only half the actual price and did not pay VAT. Why?

Because the NJSC NAFTOGAS UKRAINY was slow in preparing the
documentation enabling NERC to notify industrial gas consumers of the new
price for gas supplied to Ukraine: it rose from USD $50 to USD $95;
accordingly, he Ministry of Economy set the selling price for industrial
consumers at USD$110.

As for VAT, the zero rate applies only to gas supplied to Ukraine under the
intergovernmental protocol. Since no such protocol has been signed yet,
industrial gas consumers should pay the tax. This explains why NAFTOGAS
could not settle its debt to Moscow in January-February.

What it does not explain is why it did not start paying later, when all
concerned parties recognized their rights and financial obligations. Neither
the Ministry of Finance nor the Ministry of Economy knows the answer, and
the NJSC refuses to disclose information on the status of its debt
settlement with both Ashgabat and Moscow.

Interestingly, the NJSC NAFTOGAS UKRAINY is planning to launch a USD
$400-million project for gas field development and gas production in the
United Arab Emirates despite its growing debt to Russia, its unapproved
financial plan and the governmental resolution making the company’s
participation in investment projects conditional on the approval of its
financial plan, unless expressly authorized otherwise by the Cabinet.
Moreover, the company has never submitted the Emirate project feasibility
study to the government.

Yet let us return to the minutes. Its next paragraph describes the NAFTOGAS
proposal to ensure the gas balance in Ukraine in April 2006 “by purchasing
up to 2.5 billion cubic meters of natural gas from the OJSC GASPROM or
ROSUKRENERGO AG Company at USD $95 per 1000 cubic meters out
of the gas reserves to be supplied to Ukraine in April 2006.

Given the agreement signed on January 4, 2006, the OJSC GASPROM stated it
would not be able to supply the NJSC NAFTOGAS UKRAINY with natural gas
at the price of USD $95 per 1000 cubic meters, as starting in April 2006 the
ROSUKRENERGO AG COmnaby would be selling gas at USD $230 per
1000 cubic meters”.

So Moscow said its usual “no” to the company’s request of direct gas
supplies at USD $95 and insisted that it buy the gas required for the
country’s gas balance at USD $230.

The next paragraph is even more remarkable. It reads as follows: “The
ROSUKRENERGO AG Company advised that it had neither an obligation
nor the opportunity to continue supplying the NJSC NAFTOGAS UKRAINY
with natural gas in April 2006 and until the end of the year”.

Some experts describe this paragraph as the RUE Company’s attempt to
renounce the contract. They also mention their earlier warnings that
ROSUKRENERGO might peel off, leaving Ukraine without the gas due
to it under the contract.

Yet most probably, this paragraph is not about RUE’s intent to stop
supplying gas to Ukraine (although the deliberate ambiguity of the language
leaves ample room for bureaucratic arbitrariness). RUE will supply gas at
USD $95 per 1000 cubic meters to the UKRGASENERGO Joint Venture
that it founded together with the NJSC NAFTOGAS, but not to the latter.

This means that NAFTOGAS will have to fulfill its credit obligations and to
provide gas to households and heating systems, which yields no profit; but
it will have no gas for sale to industrial consumers, and neither
ROSUKRENERGO nor GASPROM are going to lend a helping hand by
selling more gas at USD $95 per 100 cubic meters.

They could offer additional volumes of gas at USD $230 per 100 cubic meters.
The situation is further aggravated by the Ukrainian government’s
requirement that NERC should limit UKRGASENERGO’s license, allowing it to
sell as little as five billion cubic meters of natural gas on Ukraine’s
domestic market.

The Cabinet was thus trying to curb the ROSUKRENERGO AG Company’s
monopoly as a gas supplier to Ukrainian industrial consumers. Mr Voronin
filed a claim to increase the volume of gas supplies, but the court case has
not been won yet. The UKRGASENERGO Joint Venture has been operating

since April 1st, 2006.

Once it supplies the 5 billion cubic meters it is allowed, the gas price can
rise to USD $230 per 1000 cubic meters. Alternatively, gas supplies can be
suspended, and NAFTOGAS will have no gas to sell to industrial consumers
anyway, unless it buys it at USD $230 per 1000 cubic meters.

Ministries and agencies engaged in gas-related businesses are paying
attention to three critical implications of the negotiations as recorded in
the minutes.

[1] First, the state-owned company GAS UKRAINY, subsidiary of NJSC
NAFTOGAS UKRAINY, responsible for supplying gas to Ukraine’s
industrial enterprises, will not be able to fulfill its obligations for want
of the necessary gas reserves.

[2] Second, ROSUKRENERGO and GASPROM are determined to supply
cheap gas to the UKRGASENERGO Joint Venture alone, compelling
NAFTOGAS to buy gas at USD $230 per 1000 cubic meters.

Since there is no mention of any objections from the Ukrainian negotiators
in the minutes, it should mean that Mr Voronin, incumbent Chair of the Board
of NJSC’s competitor and former a member of the RUE Coordination Committee,
is quite happy with the negotiation outcomes, whereby NAFTOGAS is being
ousted from the profitable gas market.

[3] Third, experts believe that ROSUKRENERGO and GASPROM are paving
the way for an inevitable price rise. As matters stand, neither the Ministry
of Finance nor the Ministry of Economy knows the exact price at which
Ukraine buys gas. The abovementioned 5 billion cubic meters do not meet the
industrial sector’s annual need.

It is up to the UKRGASENERGO Joint Venture to either break this amount into
monthly quotas, or exhaust its limit within the next couple of months, after
which it could sell gas at USD $230 per 1000 cubic meters. Some analysts
suggest, though, that Russia will hardly raise gas prices for Ukraine on the
eve of the G-8 Summit.

However, a perplexing question mark hangs over the price that Moscow will
use to calculate Ukraine’s debt for the gas already consumed. Of course, it
can afford to postpone drastic measures as the joint venture’s revenues are
being built up and so are the NJSC’s losses.

Meanwhile, a number of gas supply and distribution companies in the EU
countries, including Gas de France, E.ON.Ruhr-Gas, RWE AG (Germany),
Winters-Hall, OMW, ZMB (Austria) etc, were subject to search and seizure of
their documentation.

The ZMB Company, for example, is remarkable in that, for one thing, it sells
Russian gas re-exported by Ukraine (Yuriy Boiko, former NAFTOGAS CEO,
knows a lot about it) and, for another, it is registered to the same address
as a “Ukrainian” CENTROGAS Company holding 50 percent of the
ROSUKRENERGO stock.

Officially, the search and seizure of documentation was executed last
Tuesday and Wednesday in five EU countries by authorized representatives of
the EU investigation group in order to check the companies’ compliance with
the Gas Directive, regulating the European gas market development.

The Directive aims to restrain monopolies in the spheres of gas supplies and
transportation. For instance, gas companies in Germany and Italy violate the
European Gas Directive by preventing foreign competitors (state-owned and
private companies from several countries) from entering their domestic
markets.

Employees at the Gas de France Kyiv Office confirmed the seizure of
documents but argued it did not imply any criminal activities or
incompliance on the part of the company. According to them, the documents
would be scrutinized for compliance with the company’s rules and procedures
within the European Gas Directive requirements.

At the same time, ZN sources report that the investigators involved in the
massive search and seizure of documentation could have other objectives,
too.

Ukraine’s gas problems and Russia’s promotion of ROSUKRENERGO as a
monopolist supplier of Russian and Asian gas, the alleged association of the
gas intermediary with criminal structures, and Russia’s switching off the
gas during last winter’s coldest days made Europe think hard about its own
dependence on Russian natural gas.

So now, Europe is striving to ascertain whether this dependence is objective
and unavoidable, to look into the pricing of supplied gas and to find out if
the earlier concluded gas agreements allow of abuse or corrupt practices.

Some experts maintain that the search was inspired by the British Company
Global Witness’s report on corruption in the arrangements for Turkmen gas
supplies to Europe. A large section of the report is dedicated to Ukraine
and ROSUKRENERGO.

Supposedly, one of the objectives of the recent investigation activities in
Europe is to determine if the actual volume of Russian gas supplies to the
EU countries corresponds to those declared by GASPROM and to make
sure it is within the 30% quota allocated to Russia on the EU market.

The investigators will also check whether the gas for European consumers is
overpriced due to the involvement of multiple intermediaries at different
stages of the supply chain, and if these intermediaries are implicated in
shadow schemes or criminal activities.

In its publications earlier this year, ZN has quoted the US leaders’
censuring remarks vis-a-vis Russia’s energy sector strategy. Last week’s
developments, described above, testify that Europe is also taking practical
steps to explore whether Moscow’s policy poses a threat to the security of
the EU’s energy supplies.

Both Washington and Brussels seem to recognize Ukraine’s role as a key
transit country for Russian gas going to Europe. Kyiv has a chance to play
its own civilized and smart game. It could lose this chance unless it makes
a clear and resolute statement in the run up to the G-8 Summit in July. All
Ukrainian government members who are not involved in corrupt gas schemes,
and with whom we met last week understand that.

What our leaders need now is firm political will to make an unambiguous
policy statement, and to begin serious negotiations with Europe and the USA,
who have indicated, albeit unofficially, that they are prepared to support
Ukraine with investments and loans compensating them for the abrogation of
its agreement with ROSUKRENERGO signed in January 2006.

Yet we know the President’s stance on the matter; the Supreme Rada is busy
forming coalitions; the new government will not be formed before the G-8
Summit; and Yuriy Yekhanurov, acting Prime Minister, has “no grievances
against Olexiy Ivchenko”.

In the meantime, NAFTOGAS’s debt to Russia and Firtash is growing, a price
increase to USD $230 is in the pipeline, the intergovernmental protocol is
still absent, the gas price is an enigma to many in Ukraine, and very few
seem concerned about all of it.

These few are fully aware of the imminent threat to the country if they do
not raise these issues immediately, as well as of the threat to their
careers if they do.

No matter how hard the West may be trying to break the vicious gas circle
around Ukraine, the siege from within and the internal opposition to the
final settlement of this problem could spoil even the most favourable
prospects.
                                     -30-
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http://www.mirror-weekly.com/ie/show/598/53426/?429496729=722cd6ddb928c6ce8d8b7a09897a9531
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6.             GUAM – UNITED STATES JOINT STATEMENT
         US delegation led by David J. Kramer of the US State Department

Public Affairs Section, U.S. Embassy, Kyiv, Ukraine, Tue, May 23, 2006

KYIV – On May 22-23, 2006 in Kyiv, Ukraine, the GUAM Member-States

and the United States met at the Eleventh Meeting of the Council of Ministers
for Foreign Affairs of GUAM and the GUAM Summit to continue their dialogue
and cooperation.  The U.S. delegation was led by David J. Kramer, Deputy
Assistant Secretary for European and Eurasian Affairs.

The United States supported the creation of the “Organization for Democracy
and Economic Development – GUAM” with Secretariat in Kyiv and pledged to
provide appropriate assistance. GUAM Members-States reiterated their
commitment to cooperate on strengthening democracy, increasing security, and
deepening political, economic, scientific, and cultural cooperation in the
GUAM region.

The United States congratulated Ukraine on its assumption to the GUAM
chairmanship and reiterated its support for GUAM projects and for the
Organization’s goal of regional cooperation and development.

The Participants addressed the current state and prospects of the GUAM-U.S.
dialogue, and noted with appreciation progress achieved in advancing the
GUAM-U.S. Framework Program, which is the product of a four-year

cooperative effort to generate concrete, multilateral projects to facilitate
regional security and economic development.

Since September 2005, the GUAM countries have completed their country-

based inter-agency offices for the Virtual Center and Interstate Information
Management System and continued the development of the regional task force
structure intended for conducting law enforcement cooperation.

The GUAM Member States have also created a Secretariat of the Steering
Committee on Trade and Transportation Facilitation and intensified their
cooperation for this project.

The GUAM Ministers expressed their gratitude to the Government of the United
States for providing technical and advisory assistance to the organization.
The Euro-Atlantic Advisory Team, established after 2005 Chisinau Summit of
GUAM and sponsored by the United States, has proved to be efficient and
instrumental in assisting implementation of the GUAM-U.S. Framework Program.

The Participants reaffirmed their willingness to develop consolidated
efforts with a view to strengthening cooperation in fighting international
terrorism, preventing proliferation of weapons of mass destruction and
related technologies, combating organized crime, and confronting other
global challenges.

The joint exploration of ways to confront these common challenges to the
GUAM Member-States and the United States constitutes an important aspect

of GUAM-U.S. cooperation.

The United States commended GUAM for promoting inter-parliamentary
cooperation that is considered to become an effective instrument of
parliamentary diplomacy at the regional and European levels.

The GUAM States reiterated their interest in further deepening cooperation
with the European Union, other organizations and states in fields of mutual
interest, including diversification of energy supplies with particular focus
on the Caspian region, providing security for energy infrastructure, and
realization of the projects of the GUAM-U.S. Framework Program.

The United States reaffirmed its support for the territorial integrity of
GUAM States, within their internationally recognized borders.
GUAM Member-States reaffirmed their willingness to proceed further with

the dialogue within the format of the GUAM-European Union and GUAM-
European Union-United States context.

The Participants agreed to continue mutually beneficial cooperation, and
also to explore new areas of interaction. They agreed to conduct their next
meeting in New York during the general debates of the UN General Assembly
session of 2006.                                  -30-
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http://kiev.usembassy.gov/infocentral_eng.html
Public Affairs Section, United States Embassy Kyiv
4 Hlybochytska St., Kyiv  04050  Ukraine
(380 44) 490-4026, 490-4090, Fax (380 44) 490-4050
http://kiev.usembassy.gov/; nfo@usembassy.kiev.ua
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7.           G.U.A.M. FAREWELLS ITS POST-SOVIET PAST
               Four former Soviet republics set a course for the West

    The GUAM Organization for Democracy and Economic Development
 
COMMENTARY: By Sergei Sidorenko & Vladimir Soloviev
Kommersant, Moscow, Russia, Wed, May 24, 2006

A GUAM summit concluded in Kiev yesterday. The forum’s main
characters – the presidents of Georgia, Ukraine, Azerbaijan, and
Moldova – transformed their regional alliance into an international
organization, declaring it open for other countries to join. No one
named Russia among the potential candidates, but Romania and
Bulgaria have been invited to join GUAM. All this means that the
GUAM quartet has made a final decision on its foreign policy
orientation, shaping up as the “anti-CIS.”

On the second day of GUAM’s Kiev summit, the leaders of the
four post-Soviet republics approved the proposal made by their
foreign ministers the previous day: to change the organization’s
status from regional to international. They also decided to change
its name, in line with the goals it has set for itself. This
alliance is now called the GUAM Organization for Democracy and
Economic Development.

The presidents of the four GUAM participants – Mikhail
Saakashvili, Viktor Yushchenko, Ilkham Aliyev, and Vladimir Voronin
- described this as a historic event. They signed a declaration
about the new organization, its charter, and a summit communique. In
the declaration, Tbilisi, Kiev, Baku and Chisinau said they are
prepared to cooperate on ensuring democracy, and confirmed their
policy course in favor of deepening Euro-integration and
strengthening ties with NATO.

At the final press conference, summit host Viktor Yushchenko
said: “The name itself indicates that our key goals are Euro-
integration and North Atlantic integration. The next stage will be
cooperation on organizing the work of our border guards and customs
services.” President Yushchenko said that prospects for the
immediate future include unifying tariff policies for energy
resources transit and road and rail transport.

Yushchenko’s statement was supported by President Ilkham Aliyev
of Azerbaijan: “We are discussing new hydrocarbon sources and
transporting hydrocarbons from the Caspian basin to new markets.”

According to Aliyev, progress on democratic processes will be more
difficult if economic development lags behind. “Our countries are
the natural corridor between Central Asia and Europe. Creating a
transport corridor here will greatly influence Europe’s
development,” said Aliyev, president of the only GUAM country with
oil and gas fields. Aliyev said that Azerbaijan will increase oil
output to 60 million tons per year over the next few years, and
commence industrial production of gas. He promised that as soon as
this happens, oil from Azerbaijan would fill an Odessa-Brody
pipeline.

The four presidents also commented on their motives for seeking
their fortune outside the CIS. Aliyev was the only one who refrained
from making harsh judgements. He preferred a neutral tone, saying
that GUAM is not a confrontational organization and is not aimed
against anyone else. “We want to cooperate for our own benefit. And
our relations with Russia are constructive,” said Aliyev. Moreover,
he proposed that Azerbaijan, being less involved in conflicts with
Moscow than the others, should help its fellow GUAM participants to
normalize their relations with Moscow.
The other three presidents stated openly why they have switched
from the CIS to GUAM. “In GUAM, we’ll try to solve the problems that
we couldn’t solve in the CIS,” said Mikhail Saakashvili. “At a time
when economic sanctions are in effect against Georgia, Ukraine, and
Moldova, it’s very important that we are introducing a free trade
regime that will deliver real economic profits for all our
countries.”
“We still can’t shake the Soviet Empire syndrome,” said
Moldovan President Vladimir Voronin. “We Moldovans are a peace-
loving people, but even we can’t accept an ‘Elder Brother-Younger
Brother’ format for relations.”

The presidents of the two wine-producing countries followed
this up with some emotional comments about Russia’s ban on wine
imports from Moldova and Georgia.

Viktor Yushchenko joined in the CIS-criticizing: “The CIS is
short on useful action. We have submitted proposals concerning
logistics, and border demarcation and delimitation – but they
haven’t been accepted. There are dozens of such issues. How can
relations develop within the CIS if it can’t even resolve this kind
of question?”

At the end of the summit, Vladimir Voronin proposed renaming
the already-renamed organization as follows: the Community of
European Choice for Democracy and Economic Development. According

to Voronin, this would clarify the priorities of GUAM members. It was
decided to consider this proposal at the next summit, this autumn.

All members agreed that the organization should be expanded.
Romania and Bulgaria were named as the leading candidates for GUAM
membership. They are set to join the European Union next year, and
could increase GUAM’s political weight by joining this organization
as well. Nobody mentioned Russia as a potential GUAM member.
(Translated by Elena Leonova)                  -30-
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8.  FOUR EX-SOVIET STATES SAYS NEW REGIONAL ALLIANCE
NOT DIRECTED AGAINST RUSSIA BUT IS A PRO-EUROPE CHOICE
          Georgia, Ukraine, Azerbaijan and Moldova sign a new charter

Associated Press (AP), Kiev, Ukraine, Tue, May 23, 2006

KIEV – The leaders of four ex-Soviet republics broadly aligned with the West
insisted Tuesday their newly strengthened alliance was not aimed against
Moscow.

But tension with their giant neighbor, who was not invited to the gathering,
hung heavily over the two-day summit of the regional grouping, which has won
support from the U.S. and European Union.

Its members – Georgia, Ukraine, Azerbaijan and Moldova – signed a new
charter that pledges to uphold democratic values, foster economic
development and help each other on their pro-European path. The four
presidents noted that they had all made a “pro-Europe choice” that must be
encouraged.

“We are focusing on a new reality that has appeared in our countries, new
interests that have crystallized over the last few years,” said Georgian
President Mikhail Saakashvili, whose country along with Ukraine and Moldova
have set the goal of E.U. membership.

The alliance – which will be formally registered as an international group
under the name GUAM-Organization for Democracy and Economic Development

and have a headquarters in Kiev – comes amid growing frustration from three of
the ex-Soviet republics with the Russian-dominated Commonwealth of
Independent States, and fresh trade disputes with Moscow.

Georgia has raised the prospect of quitting the 12-nation CIS, and the
Moldovan President Vladimir Voronin also said upon his arrival Tuesday that
his country’s parliament would soon take up that question, Ukraine’s Unian
news agency reported.

Both nations are currently arguing with Russia over Moscow’s decision to ban
imports of Georgian and Moldovan wine, a blow to their economies. Russia has
cited quality concerns, but the ban is widely seen as retaliation for these
countries’ pro-Western policies. Voronin said Tuesday the matter should be
handled “in a civilized way.”

Ukraine was engaged in its own bitter dispute with Russia’s gas monopoly
earlier this year over gas supplies, which resulted in a nearly twofold
increase in price.

Azerbaijan’s President Ilham Aliev, who is being courted by both Russia and
the West, characterized his oil-rich Caspian Sea nation’s relations with
Russia as positive, but said there was tension in the years immediately
after the Soviet collapse.

Yushchenko said that while Ukraine sees Russia as a strong trade partner,
the CIS has “some deficiencies.”

Saakashvili, who is the most outspoken in his frustration toward Moscow,
insisted that he was personally offended during last year’s CIS summit when
Ukraine’s proposals weren’t even put on the floor for discussion. “Ukraine
is not some kind of village on the edge of the forest,” Saakashvili said.
“If Ukraine is treated that way, it’s hard to imagine what will happen to
smaller countries.”

Russian Deputy Foreign Minister Andrei Denisov, speaking on Russian state
television, said Tuesday that Moscow didn’t “see anything anti-Russian” in
the Kiev gathering. But he questioned the usefulness of the organization,
saying that it would be better to concentrate on strengthening existing
regional bodies.

The presidents touted the creation of a free trade zone, and called for
increased cooperation in the energy transport sector. “We are the natural
corridor between Asia and Europe and back,” Aliev said, referring to gas and
oil pipelines that go through the region. “It is impossible to go around our
countries. We should use this to speed up European integration.”   -30-

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9.           KREMLIN LOSES ITS GRIP ON IT’S DYING EMPIRE
      Four former Soviet republics set to abandon eastern commonwealth

ANALYSIS: By Richard Beeston, The Times, London, UK, May 24, 2006

ONE of the last vestiges of the Soviet Union appeared to be crumbling
yesterday, when four former republics signalled that they were pulling out
of the organisation established to keep the Kremlin connected with its lost
empire.

At a meeting in Kiev the leaders of the pro-Western states of Azerbaijan,
Georgia, Moldova and Ukraine pledged to form their own association to
promote democratic values. They also hinted that they would leave the
Commonwealth of Independent States (CIS), which was created 15 years

ago as a group representing most of the former Soviet republics.

While the CIS never fulfilled any great economic or political function, its
very existence was supposed to reflect Moscow’s continued influence from
Eastern Europe to the Caucasus and on to Central Asia. But ties between the
Kremlin and some of its former client states have deteriorated in a wave of
democratic movements that swept pro-Western leaders into power in Georgia
and Ukraine and encouraged anti-Russian sentiment in Azerbaijan and Moldova.

The new group will be called the Organisation for Democracy and Economic
Development and will be based in Kiev. It will rival the CIS, which is based
in Minsk, the capital of Belarus, where it is headed by Vladimir Rushailo, a
tough former Russian Interior Minister.

Viktor Yushchenko, the Ukrainian President, said: “Our citizens are giving
us a mandate to develop strong democratic and successful states.” The move
is seen as a huge snub to Moscow, which has not been invited to join. It
faces the prospect of being left in a CIS of eight states, including
Belarus, regarded as the last dictatorship in Europe, Armenia, and the
Central Asian republics of Kazakhstan, Kyrgyzstan, Tajikistan and
Uzbekistan. The splits within the CIS ranks have been growing in recent
months.

Moscow, which backed Mr Yushchenko’s opponent in the Ukrainian elections,
clashed with Ukraine this year when it suspended gas sales, causing an
energy crisis across Europe in the middle of winter.

The Kremlin has also rowed openly with Tbilisi over Russian support for two
breakaway regions in Georgia and its reluctant withdrawal of troops from the
country. Moscow’s recent decision to ban the import of Georgian and Moldovan
wine has strained ties further.

Azerbaijan has provoked the ire of Moscow by developing close ties with the
US, and building an oil pipeline to pump crude from the Caspian Sea to
Turkey, bypassing traditional Russian control over energy supply routes.

Moldova signalled yesterday that it may be the first country to quit the
CIS. President Voronin said that the issue would soon be debated in
parliament, where the move was likely to be approved.

Zurab Nogaideli, the Georgian Prime Minister, said that his country was

also debating the value of remaining in the CIS, and that the question of
withdrawal would come up before parliament this summer.

“Many in Georgia have been very critical of the CIS, of its performance, of
its efficiency, and we, as a government, are accountable to the people’s
concerns,” he told The Times during a visit to London.

He said that Georgia had attempted to make the CIS more efficient and
capable of dealing with important bilateral disputes, such as the Russian
wine ban, but that the CIS was incapable of addressing real issues.

“What is the sense in having an organisation that fails to discuss basic
issues that affect the countries concerned?”, Mr Nogaideli said. “It seems
to me that Russia itself is not interested in the CIS, in reality. They want
to keep it as an organisation, but they don’t want it to be an effective and
functional organisation. Russia only keeps it for prestige.”    -30-

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LINK: http://www.timesonline.co.uk/article/0,,3-2193775,00.html
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10.  EASTERN UKRAINIAN REGION GIVES RUSSIAN LANGUAGE
                              SPECIAL REGIONAL STATUS

Associated Press (AP), Kiev, Ukraine, Thursday, May 18, 2006 

KIEV, Ukraine – The eastern Ukrainian region of Donetsk granted special
status Thursday to the Russian language despite warnings from President
Viktor Yushchenko that such moves violated the constitution, which declares
Ukrainian the country’s only official language.

More than 120 of the regional legislature’s 133 members voted to make
Russian a regional language, allowing it to be used together with Ukrainian
in state and public institutions as well as at universities and cultural
institutions, said Irina Tarana, spokeswoman for the council.

The move was inspired by the fact that about 75% of the region’s population
believe Russian to be their native language, said Tarana.

The overwhelmingly Russian-speaking Donetsk region becomes the fourth area
to adopt such a measure, following similar moves in the eastern region of
Luhansk, the eastern city of Kharkiv and the Crimean city of Sevastopol.

“The decision was made in the interests of community…In the region, people
will communicate in such a way as it is better for them,” head of the
Donetsky council Antoliy Blyznyuk was quoted as saying by the Unian news
agency.

Yushchenko’s office has ordered prosecutors to consider a legal challenge
because the moves come in conflict with Ukraine’s post-Soviet constitution,
which declared Ukrainian the sole state language. Blyznyuk also expressed
concern that prosecutors would appeal the council decision, Unian reported.

The language issue is a sensitive topic in this ex-Soviet republic, where
Russian is predominantly spoken in the east and south and Ukrainian in the
west. During Soviet times, Russian predominated and now many nationalists
see protecting Ukrainian as critical to national identity.

Declaring Russian a regional language is a lesser move than trying to have
it declared a second state language, but it could open the door to those
efforts. Tarana said the council also adopted a recommendation to the new
national parliament, calling on it to recognize Russian as a state language
in Ukraine. Yushchenko has vowed to fight this.

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11. UKRAINE’S MAJOR OPPOSITION PARTY ISSUES STATEMENT
                             ON RUSSIAN LANGUAGE ISSUE

Interfax-Ukraine news agency, Kiev, in Russian 1309 gmt 17 May 06
BBC Monitoring Service, United Kingdom, Wed, May 17, 2006

KIEV – The Party of Regions will initiate discussion of “the language policy
of the state” at the first session of the Ukrainian Supreme Council
[parliament] of the 5th convocation, the party’s political council has said
in its statement on the protection of constitutional rights of Ukraine’s
Russian-speaking citizens, which has been made public on the party’s
website.

“The Party of Regions pledges to continue to defend the right of people to
think, speak and educate their children in their mother tongue, as well as
the right of local communities to freely use the Russian language,” the
statement said.

The document described as legally ungrounded the statement by the Ukrainian
Justice Ministry saying that the decisions by the city councils of Kharkiv
and Sevastopol and the Luhansk regional council to give Russian the status
of a regional language were unconstitutional.

“Article 147 of the Ukrainian constitution stipulates that the
Constitutional Court is the only body of constitutional jurisdiction in
Ukraine, and only that court is entitled to rule on matters of compliance of
laws and other legal acts of the Ukrainian constitution and come up with
official interpretation of the Ukrainian constitution and laws,” the
statement said.

The document said that the Justice Ministry’s explanation that the text of
the European Charter for Regional or Minority Languages had been incorrectly
translated “cannot be taken seriously, as it refers to a law which was
passed by the Supreme Council [parliament] and came into force”.

The Party of Regions urged the Council of Europe to pay attention to the
situation with the charter’s implementation in Ukraine and deliver an
appropriate assessment of the Ukrainian government’s actions.

The Party of Regions views the policy of the current government and
political forces “on which it leans for support” as an offensive on
citizens’ rights. “This campaign obviously has a political background to it.
It is a continuation of the short-sighted and unclever policies which the
Orange forces contributed to the presidential election and which resulted in
a deep split in society,” the document said.

The political council warned the law-enforcement agencies against “brutal
interference in such a sensitive sphere as language politics”. The council
also recalled that the president [Viktor Yushchenko] “is the president of
all citizens, including those for whom Ukrainian is the native language and
those for whom Russian or any other language is native” and urged
“respectful treatment of the right to defend the native language”.

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12.  UKRAINIAN CELEBRITIES SAY GIVING RUSSIAN LANGUAGE
                 SPECIAL STATUS IS A WAR AGAINST UKRAINE
   “We have a direct threat to the Ukrainian nation & Ukrainian state system.”
 
Natasha Lisova, Associated Press (AP), Kiev, Ukraine, Fri, May 19, 2006

KIEV – Ukrainian cultural figures and celebrities on Friday slammed efforts
to grant Russian language special status in this ex-Soviet republic, calling
it an act of war against the Ukrainian state and the Ukrainian language.

Artists, writers, politicians and scientists, meeting for a round-table
discussion in Kiev, condemned recent decisions by several regional councils
to have Russian declared a regional language, allowing its use in official
business.

The overwhelmingly Russian-speaking region of Donetsk on Thursday became the
fourth area to take such measures. “Today they announced a war, and we must
react accordingly,” movie director Yuriy Illenko said.

President Viktor Yushchenko’s administration has said granting Russian
special status contradicts the constitution, which declares Ukrainian the
only state language. His office has vowed to challenge the decisions in the
two eastern regions, an eastern city and the Crimean city of Sevastopol.

The language issue has become one of the most sensitive in Ukraine, where
Russian dominated during Soviet times and today many still consider it their
native language, particularly in the east and south. In western regions,
Ukrainian dominates and nationalists see protecting the language as a way to
prevent meddling from Moscow.

“Today we have a direct threat to the Ukrainian nation and Ukrainian state
system,” said lawmaker Ivan Zayeyts. Yushchenko’s legal adviser Mykola
Poludyony said the councils have are no legal authority to make such
decisions.

Council officials say their decision is based on a European charter, which
was ratified by the Ukrainian parliament in 2003, that protects regional and
minority languages. Critics, however, say Russian should not be considered a
minority language and does not need special protection. “Russian isn’t a
language that is disappearing,” Poludyony said.

The Party of the Regions, the pro-Moscow opposition party that won the most
votes in last month’s parliamentary election, campaigned on a promise to
make Russian a second state language.                  -30-
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13. INCONSISTENT LANGUAGE POLICY CREATES PROBLEMS 
    PRU-led Ukrainian regions continue to adopt Russian as official language

ANALYSIS & COMMENTARY: By Oleg Varfolomeyev
Eurasia Daily Monitor, Volume 3, Issue 101
Jamestown Foundation, Washington, DC, Wed, May 24, 2006

The Party of Regions (PRU), which strengthened its grip on Ukraine’s
Russophone east and south after the March 26 parliamentary election,
continues to probe the government’s weaknesses, challenging it on the
sensitive issue of language.

The PRU-dominated Donetsk regional council has followed the example of the
PRU-dominated Luhansk, Kharkiv, and Sevastopol councils, approving
regional-language status for Russian. The government, in response,
threatened to come up with tough measures against all those who violate the
constitution, according to which Ukrainian is the only language having
official status.

The government’s position is that the councils’ language decisions are a
threat to national security, part of a plan to exacerbate tension in society
and downgrade the status of Ukrainian. The government also argues that
language matters are the remit of the national — rather than regional — 
bodies of power.

The PRU, meanwhile, looks set to raise the issue at the national level. On
May 17, the party’s governing body — the political council — issued a
statement, “On the Protection of Constitutional Rights of the
Russian-speaking Citizens of Ukraine,” promising to raise the Russian
language issue soon after the new parliament convenes on May 25.

In the statement, the PRU pledged “to continue to defend the right of people
to think, speak, and educate their children in the mother tongue.” The PRU
brushed aside the Justice Ministry’s protests against the decisions of
Luhansk, Kharkiv, and Sevastopol on the status of Russian, saying that only
the Constitutional Court is entitled to rule on language matters.

Incidentally, the PRU has been among the parties blocking the election of
new judges to the Constitutional Court, fearing that the Court might take
President Viktor Yushchenko’s side and reverse the recent constitutional
reforms that diminished the president’s authority.

On May 18, the Donetsk region council voted by 122 votes to three (with one
abstention) to give Russian the status of regional language. As in the cases
of Luhansk, Kharkiv, and Sevastopol, Donetsk deputies said they were guided
by the European Charter for Regional or Minority Languages.

The council not only ruled that Russian may be used in business, official
documents, and educational establishments on a par with Ukrainian, but it
also called on parliament to give Russian state-language status along with
Ukrainian.

The council said that the current constitution ignores the fact that Russian
is the mother tongue for about one-third of Ukrainians, equating Russian to
the many minority languages spoken by small communities inside Ukraine.
Along with the PRU, the Communists and the radical left-wing Progressive
Socialists in the Donetsk council supported the language decision.

Official reaction followed immediately. Donetsk Region Prosecutor Oleksiy
Bahanets, who is subordinated to Kyiv, promised to appeal the council’s
decision in court as soon as he obtains official documents on the matter
from the council. On May 18, the cabinet gathered for a meeting to condemn
the eastern councils on language matters.

Deputy Prime Minister for Humanitarian Affairs Vyacheslav Kyrylenko blamed
“certain forces” for trying to “downgrade and practically fully exclude the
state language from usage, rather than protect minority languages.”
President Yushchenko’s legal adviser, Mykola Poludyonny, went even further,
warning of a separatist threat.

The Justice Ministry was instructed to come up with amendments to language
laws and regulations in order to toughen penalties for language-legislation
violators. It was also decided that the next meeting of the National
Security and Defense Council would be on the language issue. It may,
however, take some time for the council to convene, as its secretary,
Anatoly Kinakh, resigned last week.

Kyrylenko apparently found it difficult to explain, speaking on television
on May 22, why exactly the elevation of the Russian language status in the
eastern regions was a national security threat. “The state has certain
principles, and state language is an element of national security… very
important for state institutes,” he offered.

The language row reveals the lack of understanding regarding how deep the
language problem runs in Kyiv. It has been ignored for years, and President
Yushchenko continues to insist that there is no language problem at all,
despite the fact that pro-Communist and pro-Russian forces have been
regularly using the language issue against the government in all sorts of
elections. There has been no consistent policy of Ukrainianization, famous
Ukrainian philosopher Myroslav Popovych believes.

Commenting for the website Forum, he noted that it is sometimes difficult to
admit that the issue is actually about the “assimilation of the
Russian-speaking population,” which has to be “logical and unforced,” but so
far has been forcible.

Media expert Mykola Knyazhytsky told Forum that the main mistake of the
government has been imposing Ukrainian in those regions where it is
traditionally barely spoken, instead of financing Ukrainian culture in the
traditionally Ukrainian-speaking areas, such as Lviv.          -30-
——————————————————————————————————–
(Interfax-Ukraine, May 17, 18; Channel 5, May 18; NTN TV, For-ua.com,

May 19; 1+1 TV, May 22; see EDM, May 17)
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14.     RUSSIAN MP SAYS UKRAINE MUST NOT TRAMPLE ON
                   RIGHTS OF RUSSIAN-SPEAKING MINORITY

ITAR-TASS news agency, Moscow, in Russian, 22 May 06
BBC Monitoring Service, United Kingdom, Monday, May 22, 2006

MOSCOW – Russian State Duma deputies believe it to be “very important”

that the question “of language policy” will be placed on the agenda of the first
session of the Ukrainian Supreme Council [parliament] of the new
convocation. Andrey Kokoshin, the head of the [State] Duma committee
for CIS affairs and ties with compatriots, has said this to ITAR-TASS today.

In his words, “a general tendency can be observed in Ukraine to squeeze out
the Russian language from the information, legal and cultural space”.

One of the latest confirmations of this, the committee’s chairman noted, is
the decision of Ukraine’s Justice Ministry to deem illegal the decisions of
the Kharkiv and Sevastopol city councils and the Luhansk and Donetsk
regional councils to give the Russian language regional status.

“What we have here is a violation of the rights of the Russian-speaking
citizens of Ukraine that live in large numbers on certain territories,”
Kokoshin stressed.

He recalled that State Duma deputies have constantly drawn the attention of
their Ukrainian colleagues “to the need to ensure the rights of the
Russian-speaking population in accordance with Ukraine’s constitution and
international obligations”.

This problem “goes beyond the framework of bilateral relations since the
Russian language and Russian culture are a generally recognized part of
world culture”, Kokoshin noted.

“Behind the resolving of this problem lie the fates of tens of millions of
people, prospects for the formation of Ukraine as a democratic state and
ensuring genuine friendly and equal relations between Russia and Ukraine,”
the head of the committee said.                          -30-
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15. RUSSIAN LANGUAGE COMPLAINT: ATTENTION OLEH SOSKIN

—– Original Message —–
From: Nadia Kerecuk; nadia.kerecuk@ntlworld.com

To: citynews@osp.com.ua
Sent: Friday, May 19, 2006 10:11 AM
Subject: Re Russian language – complaint for the attention of Oleh Soskin
Action Ukraine Report (AUR) #700, Article 15
Washington, D.C., Thursday, May 25, 2006

Dear Mr Oleh Soskin,

I have decided to write in order to express my greatest disappointment that
your very good city bulletin is now being published mostly in Russian. I was
quite appalled to see the encroachment of Russian in your bulletin after so
many years of Ukraine being independent.

 
When it was published in Ukrainian I was very delighted to reach each edition.
However, it has become an annoyance.

Ukrainian citizens ought to know better especially those that head
organisations such as yours. Indeed, Citizens of Ukraine whatever their
ethnic background ought to respect the UKRAINIAN language. Honestly, I
cannot understand this approach.

UKRAINIAN IS THE ONLY official language in Ukraine – as English is in
England or Portuguese in Brazil, Russian in the Russia (are there any
bulletins of cities in Russia being published in Ukrainian????)  or French
in France and so on !!!

Particularly with the long history of prohibitions of the Ukrainian language
and the abuse of it by the Old Russian Empire, the Soviet Union and many

in power in Ukraine since the Independence in Ukraine.

Could you kindly explain why this is happening – of course, I welcome

your reply in Ukrainian or English.

With best wishes,

Nadia Kerecuk, Historian of Ideas in Language Sciences,
Expert in Linguistics including Ukrainian and Slavonic
Expert in Ukrainian Affairs & Studies
———————————————————————————————–

FOOTNOTE: Oleh Soskin: Tel: (044) 235-98-28, 235-80-23
E-mail: CityNews@osp.com.ua; Web: http://www.CityUkraine.osp-ua.info
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16. PROSPECT OF BUSH VISIT PUTS PRESSURE ON KIEV PARTIES

By Tom Warner in Kiev, Financial Times
London, United Kingdom, Friday, May 19, 2006

A possible visit to Kiev by President George W. Bush in June or July is
causing consternation in Moscow and putting pressure on Ukraine’s
quarrelling pro-western political parties to agree quickly on a coalition
government.

The White House is hoping the Kiev visit could be combined with a
US-European Union summit in late June or with the Group of Eight summit

in Moscow in mid-July.

A Kiev visit timed closely to the G8 summit would allow Mr Bush to stress

US support for the western-oriented democracies on Russia’s perimeter that
have come under economic pressure from Moscow.

Mr Bush would also use the visit to promote Ukraine’s accession to Nato,
which his administration is suggesting could be launched at the alliance’s
summit in Riga in November and completed by 2008.

The aggressive schedule was outlined by William Taylor, Mr Bush’s nominee

to take over as US ambassador in Kiev, in a Senate confirmation hearing last
week.

At a conference on Nato in Moscow yesterday, Jaap de Hoop Scheffer, the
alliance’s secretary-general, defended proposals for Nato to take in Ukraine
and Georgia, which he said were “not directed against Russia”. Russian
speakers warned that Nato-Russia relations would change for the worse if
Ukraine was invited to join.

However, Mr Bush’s mission in Kiev depends on there being a government

to greet him. A newly elected parliament is not due to convene until next
Thursday, two months after the March polls.

The three parties that led the 2004 Orange Revolution and together won the
largest share of parliamentary seats continue to argue over the sharing out
of key jobs, including the prime minister’s.

Viktor Yushchenko, president, added impetus to the talks last week when he
said that he did not object to the candidacy of Yulia Tymoshenko, a former
prime minister, with whom he has had a somewhat rocky relationship.

Ms Tymoshenko leads the largest of the three groups in the prospective
coalition and her bloc insists she be premier.

Mr Yushchenko’s spokeswoman said Mr Bush was likely to visit this year

but no date had yet been set. “Thank god that in Ukraine the government is
formed without outside influence,” she said. “But the president is
optimistic that we will see a government by the middle of June.”  -30-
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17. KATERYNA YUSHCHENKO TO VISIT PHILADELPHIA NEXT WEEK
      Meet with top health care professionals, address the World Affairs Council

By Morgan Williams, Publisher and Editor
Action Ukraine Report (AUR) #700, Article 17
Washington, D.C., Thursday, May 25, 2006

WASHINGTON – Kateryna Yushchenko, first lady of Ukraine, will visit
Philadelphia next week. The Ukrainian Federation of America, The
World Affairs Council of Philadelphia  and the Ukrainian Human Rights
Committee will host Kateryna Yuschenko for a series of meetings
regarding improving Ukraine’s health care services and world affairs.

The first meeting will be a program and dinner on Tuesday May 30, 2006
hosted by the World Affairs Council of Philadelphia and the Ukrainian
Human Rights Committee.  The World Affairs Council of Philadelphia is
the premier public policy platform in America’s birthplace and one of the
top speaking forums in the nation.

The event will beheld at the prestigious Union League at 100 S. Broad St. in
Philadelphia.  Registration and reception will begin at 5:30 pm followed by
the address of the First Lady of Ukraine and dinner.  The cost for the
event is $75.00. (For registration information see FOOTNOTE below.)

 UKRAINIAN FEDERATION OF AMERICA “PROJECT LIFELINE”

The Ukrainian Federation of America through it’s Ukrainian health care
initiative “Project Lifeline” has organized a private program for Wednesday
in support of Kateryna Yushchenko’s primary program, through the
Ukraine 3000 Foundation, to substantially improve the health care received
by the people of Ukraine, especially Ukraine’s children.

The Federation, under the leadership of Dr. Zenia Chernyk, Chair,
Healthcare Commission and Vera Andryczyk, President, has arranged a
private breakfast on Wednesday for the first lady to meet with top U.S.
health care professionals and representatives of the pharmaceutical
industries.

The first lady will then visit the Children’s Hospital of Philadelphia, the
birthplace of pediatric medicine in the United States. The First Lady will
tour Children’s Hospital facilities and meet with Hospital leadership to
encourage a sharing of knowledge and experience between doctors in
the United States and the Ukraine, with the hope to improve healthcare
for children worldwide.

At the hospital Mrs. Yushchenko will meet with Lawrence McAndrews,
president, National Association of Children’s Hospitals and Related
Institutions (NACHRI), James M. Steven, M.D., S.M., senior vice president
for medical affairs and chief medical officer, The Children’s Hospital of
Philadelphia, Children’s Hospital physicians, researchers and administrators

Following the tour of The Children’s Hospital of Philadelphia, Mrs.
Yushchenko will be the Guest of Honor at a private luncheon meeting,
set up by the Ukrainian Federation of America, with representatives of
the World Trade Center of Greater Philadelphia and charitable organizations.
The luncheon will be held at Neville Gallery at University of Pennsylvania
Museum of Archeology and Anthropology.

Philadelphia is the second stop on the First Lady’s national tour. She will

also earlier visit Washington, D.C., and then stops in California.  This is
Mrs. Yushchenko’s second visit to Philadelphia, after first coming to the
city in September 2005 when President Victor Yushchenko received the
Liberty Medal.

Since that time, Mrs. Yushchenko has met with many in the American
medical and pharmaceutical industries, through the “Project Lifeline”
program of the Ukrainian Federation of America, in order to further her
effort to elevate medical standards in Ukraine.            -30-
——————————————————————————————–
FOOTNOTE: For more information concerning the program set up

by the Ukrainian Federation of America on Wednesday please contact
Dr. Zenia Chernyk at 215 275 7902 or Vera Andryczyk at 610 539 8946.
 
For more information about the speech at the World Affairs Council in
Philadelphia go the following website:
http://www.wacphila.org/programs/speaker_eve.html#yushchenko
or call Adele Kauffman at 215 561 4700, extension 235. The Council
will be closed on Friday, May 26th and Monday, May 29th.  You can
also contact Ubulana Mazurkevich at 215-858-3006 or by e-mail:
ubulana@aol.com.
———————————————————————————————-
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18.  ART EXHIBITION: “MAZEPIANA” – SERHIY YAKUTOVYCH

WHAT: The Embassy of Ukraine is proud to present an art exhibition
“Mazepiana” – the works of Serhiy Yakutovych.
WHEN: Thursday May 25, 2006, 7:00 pm
WHERE: Embassy of Ukraine, 3550 M St. NW, Washington, DC 20007

Serhiy Yakutovych is an Honored Artist of Ukraine, Associate Member of
the Ukrainian Academy of Arts, The National Taras Shevchenko Prize
winner in 2004. Author of more than a hundred  illustrative cycles for
the books of Ukrainian and foreign classics such as “Three Musketeers”
by Dumas, “Song About Roland”, “Tristan and Isolde”, “Taras Bulba”

by Gogol, works of M.Gorky, O.Tolstoy, L.Tolstoy, P.Dostoevsky,
O.Gonchar, Golsuorsy, O.Walde, Nietzshe, and DeCoster.

Winner of numerous national and international graphic competitions, the
works of Sergiy Yakutovich are included in the museum collections of
Ukraine, Russia, Germany, France, Italy, Spain and in many private
collections.

FOR MORE INFORMATION:
RSVP by telephone at (202) 349-2961 or by e-mail at nholub@ukremb.com
LINK: http://yakutovich.com/ukr/sergiy/gallery_content.php?dir
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19. “EMBASSY SERIES” CONCERT AT THE EMBASSY OF UKRAINE

 
WHAT: Another marvelous pair of evenings of wonderful music by
Ukrainian artists in the elegant Ukrainian Embassy, a national treasure.
Violinist Solomiya Ivakhiv (with Roman Rabinovich on piano) is a winner
of the Prokofiev and Kocian International Competitions, recipient of
the Fritz Kreisler Gold Medal from the Curtis Institute of Music and
was awarded a scholarship from the President of Ukraine.  Ukrainian
buffet to follow.

WHEN: Friday, May 26 – 8:00 pm; Saturday, May 27 – 8:00 pm
WHERE: Embassy of Ukraine; 3350 “M” Street, N.W.
Washington, D.C. ; COST: $75.00

FOR MORE INFORMATION: See

http://www.embassyseries.com/events.htm
To order tickets, call Jerome Barry at (202) 625-2361 or order easily
online at http://www.embassyseries.org.
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20.       WASHINGTON IGNORES DEMOCRATIC VALUES
                               IN QUEST FOR CHEAP OIL
 
Sylvie Lanteaume, Agence France-Presse, Wash, D.C, Sun, May 21, 2006
WASHINGTON – The United States, eager to find new sources of oil
at the time when petroleum prices are skyrocketing, is increasingly giving
up its strategy of promoting democracy, analysts here say.

The US government of President George W. Bush has recently made
contradictory moves towards key foreign oil producers, sowing confusion
about its policy goals, according to Frank Verrastro, of the Center for
Strategic and International Studies, a Washington-based think tank.

If the democracy and support for humans right are the main engine of US
diplomacy, “then you have to wonder why we have not taken a tougher line
with Russia, why we have not taken a tougher line with Kazakhstan, why we
have not taken a tougher line with Libya?” he asked.

Yet US officials “use it when we talk about Venezuela, and we use it when we
talk about the Middle East,” said Verrastro, an expert in energy policy.
“Increasingly it is looking like a case by case application of what is more
important,” he said. “It is depending on what the perceived needs of the day
are.”

Washington announced on May 15 it was normalizing relations with Libya,
which has important crude oil reserves, despite the lack of political
reforms visible in a country led since 1969 by the same man, Moamer Kadhafi.

On the same day US officials imposed sanctions on Venezuela, a country that
supplies 15 percent of US oil imports. The stated reason: populist President
Hugo Chavez’s lack of cooperation in the US-led “war on terror”.

Washington also charged Chavez’s government with restricting the freedom of
the press and harassing his political opponents.
One day later US officials suspended free trade negotiations with Ecuador,
another important oil supplier, after Quito cancelled its contract with
US-based Occidental Petroleum and took over their assets.

On May 4 US Vice President Dick Cheney took a swipe at Russia over
democratic reform, accusing Moscow of “improperly restricting” human rights
and using oil and gas supplies as a weapon.

“No legitimate cause is served when oil and gas become tools of manipulation
or blackmail,” Cheney said, referring to the cut-off of gas supplies to
Ukraine last January which also affected parts of Europe.

Yet just hours later Cheney was praising the authoritarian government of
Kazakhstan for its “economic development and political development”.

Since 1993, the US has invested about 12 billion dollars (9.42 billion
euros) in Kazahkstan, which has oil reserves of 24 billion barrels, making
the US the biggest single investor in the country.

The Bush administration claims it is pursuing a coherent energy policy, but
recognizes that oil producing countries are politically profiting from the
high price of crude, a US State Department energy expert said, speaking on
condition of anonymity.

“You have the bulk of the world hydrocarbons resources owned by state owned
oil companies. And they are feeling very powerful now, as we saw in Ecuador
and Russia and Venezuela,” the official said.

However, Washington has not given up defending the democracy. “We have
principles,” the official said, pointing to Libya, which had to meet strict
guidelines to be withdrawn from the US list of state sponsors of terrorism.

“The evidence would suggest that America has put … our values above the
mercantilist energy issues,” the official said.

Richard Haass, president of Council on Foreign Relations, another
Washington-based think tank, disagreed.

“Today’s situation may lack drama in the sense that there has been no
successful terrorist attack on some tanker or refinery,” Haas wrote in the
most recent issue of Newsweek magazine.

“But current energy policy (or the lack of one) empowers some of the most
repressive and reckless regimes in the world, further impoverishes hundreds
of millions of the world’s poor and contributes to global climate change.”

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21.          INVESTING: ADVENTURES AT THE FRONTIER
        One market that Chief Investment Officer Chisholm likes is Ukraine

By Conrad de Aenlle, International Herald Tribune
Paris, France, Friday, May 19, 2006

In a world that keeps getting smaller, and where ever less remains unknown
and untried, emerging markets do not stay that way for very long before
joining the mainstream. So where can a globetrotting investor go in search
of a few thrills and more than a few bucks?

Some investment advisers are turning to so-called frontier markets. About
two dozen countries, in such places as Africa, the Balkans and the
Caribbean, have economies that are too raw and undeveloped even to be
classified as emerging, but they do have stock markets where investors can
experience opportunities and challenges reminiscent of a decade or more ago
in what are now emerging markets.

“Frontier markets tend to be relatively small and illiquid, even by
emerging-markets standards, and information is generally less available than
in other markets,” Charles Wang, co-director of research at Acadian Asset
Management, wrote in a recent report. “However, they represent a vast store
of untapped economic potential that may be very compelling as a long-term
investment opportunity.”

Just how untapped is made clear by their size. When Wang takes inventory, he
comes up with 285 publicly traded stocks in 22 countries and a total market
capitalization of $101 billion, or barely one-fourth the size of Exxon
Mobil.

What they lack in bulk – just 22 stocks have market valuations greater than
$1 billion each – they make up for in strength. Wang said that since
Standard & Poor’s started following these minnow markets in December
1995, they have comfortably outperformed larger and more familiar ones.

Frontier markets rose at an annualized rate of 11.6 percent in the 10 years
through last December, compared with 8.2 percent for conventional emerging
markets. Volatility has been lower in frontier markets.

Making the case for investing in the region, Max King, a strategist at
Investec Asset Management, which runs a pan-African mutual fund, pointed out
that African economic growth has exceeded that of the rest of the world in
each of the last five years, and he cited a Goldman Sachs study that
predicted that Africa’s share of the global equity market would more than
double over the next 20 years.

King tossed out several names to illustrate the region’s diverse investment
opportunities, including Orascom, an Egyptian company involved in such
activities as telecommunications, tourism and computing; Lafarge Maroc, a
Moroccan cement business controlled by the French company Lafarge;
Kenya Airways and Kenya Electricity Generating.

“If there is one stock to look at, I suggest the recently privatized KenGen,
which we were keen on and which was well-subscribed” when the government
sold shares to the public, King said.

So far, looking at frontier stocks is all that Acadian is doing. John
Chisholm, the firm’s chief investment officer, has not committed money to
any of them yet, but Acadian is drumming up business among institutional
investors, and he expects to start buying later this year.

One market that Chisholm likes is Ukraine, and one of his favorite stocks
there is the fertilizer producer Azot Cherkassy. “The company’s cheap, but
it’s expected to have good growth going forward,” he said. “That’s the
typical profile of what we’re looking for in these markets.”

Chisholm finds the same attractive mix in Tunisia, where his preferred
stocks include Banque Internationale Arabe de Tunisie and Frig Brass, a
maker of soft drinks and beer.

As appealing as these companies may be, frontier markets have their
drawbacks. Jerome Booth, research director at Ashmore Group, an
emerging-market investment house, maintains limited exposure to frontier
equities because trading is limited and “we put a premium on liquidity,” he
said.

Another shortcoming is in furnishing information. “Data availability and
quality ranges from quite good to extremely dubious,” Wang acknowledged.
A further limitation, he said, is that most stocks do not have analyst
coverage and therefore lack forward-looking factors, like earnings
estimates.         -30-

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http://www.iht.com/articles/2006/05/19/yourmoney/minvest20.php
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22. UKRAINIANS GATHER AT MASS GRAVE TO COMMEMORATE
                               VICTIMS OF STALIN REGIME 

Associated Press (AP), Kiev, Ukraine, Monday, May 22 2006

KIEV – Relatives and survivors gathered in a forest outside Kyiv Sunday at

the site of Ukraine’s largest mass grave for victims of Soviet dictator Josef
Stalin, commemorating up to 120,000 Ukrainians killed during his regime.
People laid flowers and tied linen towels with Ukrainian embroidery on trees
at the Bykovnya grave.

“It’s hard to imagine how it was possible to bury over 100,000 people in one
forest. The most awful is that it’s impossible to answer the question why
they were killed,” President Viktor Yushchenko said.

Historians say millions were killed throughout the Soviet Union during
Stalin’s reign, accused of state treason and other crimes.

Separately, up to 10 million Ukrainians died of the 1932-33 Great Famine,
which Stalin provoked as part of his campaign to force Ukrainian peasants
to give up their land and join collective farms.

On Thursday, thousands of Crimean Tatars marched in the capital of Crimea to
mark the 62nd anniversary of their deportation from the Black Sea peninsula
under Stalin, a forced exile that lasted almost half a century. Some 200,000
Tatars were deported in May 1944 after Stalin accused them of collaborating
with the Nazis and were not allowed to return until the Soviet collapse of
1991.              -30-

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23.                            A BOOK FOR SKEPTICS: 
         “THE UKRAINIAN QUESTION” 70 YEARS LATER

By Mykola SIRUK, The Day Weekly Digest #15
Kyiv, Ukraine, Tuesday, 23 May 2006

The British Embassy in Ukraine recently hosted the launch of a book of
articles by British journalist Lancelot Lawton, entitled “The Ukrainian
Question.” The publication of this book is an important event for the
Ukrainian public. Readers now have an opportunity to examine documents
that confirm the tragic events that occurred in Ukraine in the 1930s.

“The Ukrainian question is still one of the most important ones as far as
Europe is concerned. EU and NATO countries are paying a lot of attention
to developing good relations with Ukraine so that it will be stable,
prosperous, and independent,” British Ambassador Robert Brinkley told
The Day after presenting the “The Ukrainian Question.”

Lancelot Lawton was a British journalist and founding member of the
Anglo-Ukrainian Committee created in 1935, whose members were British
politicians, historians, and other individuals who were concerned about the
plight of Ukrainians.

The book contains the original speech “Ukrainian Question,” and its
Ukrainian translation, which was delivered in the British parliament in
1935, as well as the article “Ukraine, Europe’s Greatest Problem,” which
appeared in 1939.

The British ambassador said that it is very important that Lawton’s book has
appeared at this time. “This book shows that in the 1930s, when Britain and
the rest of Europe faced the rising menace of Hitler’s Nazi regime, there
were public figures in London who took an interest in the fate of Ukraine
and Ukrainians. Today this seems rather surprising. So, in my view, it is
important to reopen this fact of history and remember it,” Brinkley said.

The historian Serhiy Kot, a senior research associate at the Institute of
the History of Ukraine, who prepared the book for publication, told The Day
that the British journalist included an enormous amount of information in
his articles.

Written in a succinct style, these materials can be called a concise course
on the history and culture of Ukraine. Dr. Kot noted that the British
journalist had no links with Ukraine, i.e., he was not of Ukrainian descent.
Lawton freely joined the initiative of civic and political figures in Great
Britain, who wanted to encourage official London to establish closer
contacts with Ukraine.

“London took an interest in Ukraine: this is proved by the reports and
analytical notes concerning Ukraine, which were written by Moscow and
Warsaw consuls, and which dealt at length with the Holodomor.

In the 1930s the British wrote that the Holodomor had claimed five to seven
million human lives,” said Dr. Kot, noting that it took two years to trace
Lawton’s original articles, which were located at the Library of Congress in
the US. A total of 2,000 copies of the book have been printed.

Now the main thing is for the book to find its way to universities and
Eastern European research centers. “The book will also be useful to the
‘doubting Thomases’ in Ukraine, i.e., those who are skeptical about Ukraine.

They will read the British journalist’s articles and may adopt an entirely
different stance; they may rethink this page of Ukrainian history,” says Dr.
Kot.           -30-
———————————————————————————————–
LINK: http://www.day.kiev.ua/162552/
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24. UKRAINIAN NATIONAL ASSOCIATION 36TH CONVENTION

Action Ukraine Report (AUR) #700, Article 23
Washington, D.C., Thursday, May 25, 2006

WASHINGTON – The Ukrainian National Association (UNA) will hold its

36th Convention at Soyuzivka, the UNA resort in the Catskill Mountains
of New York State from the Friday the 26th through Monday the 29th of
May 2006.

Although much smaller than the 1970 Convention in Cleveland and the 1974
Convention in Philadelphia which hosted 431 and 426 delegates respectively,
the 2006 convention with its 100+ delegates still promises to be a major
event in the Ukrainian community.  The UNA has been a leader in the business
and social world of Ukraine’s Diaspora and hopes to continue this status in
the future.

Running for the Presidency of the UNA this time will be Walter Prochorenko,
a business executive with extensive international sales and marketing
background and experience. Dr. Prochorenko will be opposing the present
President of the UNA Mr. Stefan Kaczaraj who has held the post for the past
4 years.

The Convention promises to be a lively affair with honored guests such as
Ukrainian Ambassador to the US, Dr. Oleh Shamshur, His Excellency Bishop
Paul Patrick Chomnycky, and Ukraine’s Consul General in New York Mykola
Kyrychenko attending. Entertainment will be provided by the Dumka Choir of
NY, Baritone Oleh Chmyr. Violinist Marian Pidvirny, Singer Olya Fryz, and
the Syzokryli Dance Ensemble.              -30-
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25. HUMAN RIGHTS WATCHDOG UNHAPPY WITH UKRAINE
    Ukraine continues to treat prison inmates cruelly and violate human rights

TV 5 Kanal, Kiev, in Ukrainian 1600 gmt 23 May 06
BBC Monitoring Service – United Kingdom; May 23, 2006

KIEV – [Presenter] The international fight against terrorism looks
increasingly like a fight against human rights, representatives of Amnesty
International in Ukraine have said.

Ukraine continues to treat prison inmates cruelly and violate human rights,
the annual report of this respectful organization has said.
[Correspondent] Racist and anti-Semite attacks, human trafficking and cruel
treatment of detainees – Ukraine has failed to get rid of all that, the
Amnesty International in Ukraine Annual Report says.

Representatives of the organization blame the guarantor of the constitution
[president] for systematic violations of human rights. In particular, the
organization holds President [Viktor] Yushchenko personally responsible for
the deportation of 11 Uzbeks who asked for political asylum.

[Nataliya Dulneyeva captioned as head of Amnesty International in Ukraine]
Amnesty International in Ukraine, Ukrainian Helsinki Committee and other
organizations for protection of human rights in Ukraine have started an
unlimited action that will be ended only when the investigation is complete,
when the cases of the 11 asylum-seekers are handed over to the High
Commissioner for Refugees in Ukraine and when those who are guilty are
punished.

Torturing and sending people for torturing, are the most serious violations
of human rights from our viewpoint. [Passage omitted: Amnesty International
criticizes the governments of Western countries for violations of human
rights.]            -30-
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AUR#700 May 25 US Ambassador’s Parting Words; First Lady In Philadelphia, GUAM; Gas Crisis A Grave Strategic Challenge; Russian Language Issue Heats Up

========================================================
ACTION UKRAINE REPORT – AUR           
                 An International Newsletter, The Latest, Up-To-Date
                     In-Depth Ukrainian News, Analysis and Commentary

                      Ukrainian History, Culture, Arts, Business, Religion,
         Sports, Government, and Politics, in Ukraine and Around the World       

                        
ACTION UKRAINE REPORT – AUR – Number 700
Mr. E. Morgan Williams, Publisher and Editor  
WASHINGTON, D.C., THURSDAY, MAY 25, 2006 
           -——-  INDEX OF ARTICLES  ——–
         Clicking on the title of any article takes you directly to the article.               
Return to the Index by clicking on Return to Index at the end of each article
1.                    U.S. AMBASSADOR’S PARTING WORDS
              John HERBST: “I do not agree that a fresh look at the gas
           agreements will increase tensions between Ukraine and Russia”
INTERVIEW:
With U.S. Ambassador John Herbst
By Serhiy Solodky, The Day Weekly Digest in English #15
Kyiv, Ukraine, Tuesday, 23 May 2006

2UKRAINE GAS CO OWES $413 MILLION TO ROSUKRENERGO 

United Pres International (UPI), Kyiv, Ukraine, Tuesday, May 23, 2006

3UKRGAZENERGO EYES $1.2 BILLION IN LOANS TO FINANCE
                  GAS STORAGE FOR UKRAINE’S WINTER GAS 
Alex MacDonald, Dow Jones Newswires, London, Wed, May 24, 2006 .

4.     RUSSIA-UKRAINE GAS AGENT ROSUKRENERGO BUYS

Reuters, Moscow, Russia, Wednesday, May 24, 2006

5.              POLITICS: SIEGE OF THE EXCLUSIVE CIRCLE
         Gas crisis remains one of Ukraine’s gravest strategic challenges

  Political and economic “soap opera” playing inside and outside Ukraine
ANALYSIS AND COMMENTARY
: By Yulia Mostovaya
Zerkalo Nedeli On the Web; Mirror-Weekly, No. 19 (598)
Kyiv, Ukraine, Saturday, 20 – 26 May 2006

6.                GUAM – UNITED STATES JOINT STATEMENT
        US delegation led by David J. Kramer of the US State Department
Public Affairs Section, U.S. Embassy, Kyiv, Ukraine, Tue, May 23, 2006

7.              G.U.A.M. FAREWELLS ITS POST-SOVIET PAST
                Four former Soviet republics set a course for the West

   The GUAM Organization for Democracy and Economic Development
COMMENTARY: By Sergei Sidorenko & Vladimir Soloviev
Kommersant, Moscow, Russia, Wed, May 24, 2006

8.   FOUR EX-SOVIET STATES SAYS NEW REGIONAL ALLIANCE
NOT DIRECTED AGAINST RUSSIA BUT IS A PRO-EUROPE CHOICE
          Georgia, Ukraine, Azerbaijan and Moldova sign a new charter
Associated Press (AP), Kiev, Ukraine, Tue, May 23, 2006

9.            KREMLIN LOSES ITS GRIP ON IT’S DYING EMPIRE
       Four former Soviet republics set to abandon eastern commonwealth
ANALYSIS: By Richard Beeston, The Times, London, UK, May 24, 2006

 

10.   EASTERN UKRAINIAN REGION GIVES RUSSIAN LANGUAGE
                              SPECIAL REGIONAL STATUS
Associated Press (AP), Kiev, Ukraine, Thursday, May 18, 2006 

11UKRAINE’S MAJOR OPPOSITION PARTY ISSUES STATEMENT

                             ON RUSSIAN LANGUAGE ISSUE
Interfax-Ukraine news agency, Kiev, in Russian 1309 gmt 17 May 06
BBC Monitoring Service, United Kingdom, Wed, May 17, 2006

12UKRAINIAN CELEBRITIES SAY GIVING RUSSIAN LANGUAGE
                 SPECIAL STATUS IS A WAR AGAINST UKRAINE
   “We have a direct threat to the Ukrainian nation & Ukrainian state system.”
Natasha Lisova, Associated Press (AP), Kiev, Ukraine, Fri, May 19, 2006

13.    INCONSISTENT LANGUAGE POLICY CREATES PROBLEMS 
    PRU-led Ukrainian regions continue to adopt Russian as official language
ANALYSIS & COMMENTARY: By Oleg Varfolomeyev
Eurasia Daily Monitor, Volume 3, Issue 101
Jamestown Foundation, Washington, DC, Wed, May 24, 2006

14.      RUSSIAN MP SAYS UKRAINE MUST NOT TRAMPLE ON
                    RIGHTS OF RUSSIAN-SPEAKING MINORITY
ITAR-TASS news agency, Moscow, in Russian, 22 May 06
BBC Monitoring Service, United Kingdom, Monday, May 22, 2006

15RUSSIAN LANGUAGE COMPLAINT: ATTENTION OLEH SOSKIN
—– Original Message —–
From: Nadia Kerecuk; nadia.kerecuk@ntlworld.com

Action Ukraine Report (AUR) #700, Article 15
Washington, D.C., Thursday, May 25, 2006

16. PROSPECT OF BUSH VISIT PUTS PRESSURE ON KIEV PARTIES
By Tom Warner in Kiev, Financial Times
London, United Kingdom, Friday, May 19 2006

17. KATERYNA YUSHCHENKO TO VISIT PHILADELPHIA NEXT WEEK
      Meet with top health care professionals, address the World Affairs Council
By Morgan Williams, Publisher and Editor
Action Ukraine Report (AUR) #700, Article 17
Washington, D.C., Thursday, May 25, 2006

18.   ART EXHIBITION: “MAZEPIANA” – SERHIY YAKUTOVYCH
WHAT: The Embassy of Ukraine is proud to present an art exhibition
“Mazepiana” – the works of Serhiy Yakutovych.

WHEN: Thursday May 25, 2006, 7:00 pm
WHERE: Embassy of Ukraine, 3550 M St. NW, Washington, DC 20007

19“EMBASSY SERIES” CONCERT: THE EMBASSY OF UKRAINE

WHAT: Another marvelous pair of evenings of wonderful music
WHEN: Friday, May 26 – 8:00 pm; Saturday, May 27 – 8:00 pm
WHERE: Embassy of Ukraine; 3350 “M” Street, N.W., Washington

20
.          WASHINGTON IGNORES DEMOCRATIC VALUES
                                 IN QUEST FOR CHEAP OIL
Sylvie Lanteaume, Agence France-Presse, Wash, D.C, Sun, May 21, 2006
21.             INVESTING: ADVENTURES AT THE FRONTIER
       One market that Chief Investment Officer Chisholm likes is Ukraine
By Conrad de Aenlle, International Herald Tribune
Paris, France, Friday, May 19, 2006
 
22UKRAINIANS GATHER AT MASS GRAVE TO COMMEMORATE
                               VICTIMS OF STALIN REGIME 
Associated Press (AP), Kiev, Ukraine, Monday, May 22 2006
 
23.                               A BOOK FOR SKEPTICS: 
                “THE UKRAINIAN QUESTION” 70 YEARS LATER
By Mykola SIRUK, The Day Weekly Digest #15
Kyiv, Ukraine, Tuesday, 23 May 2006
 
24UKRAINIAN NATIONAL ASSOCIATION 36TH CONVENTION
Action Ukraine Report (AUR) #700, Article 23
Washington, D.C., Thursday, May 25, 2006
 
25  HUMAN RIGHTS WATCHDOG UNHAPPY WITH UKRAINE
  Ukraine continues to treat prison inmates cruelly and violate human rights
TV 5 Kanal, Kiev, in Ukrainian 1600 gmt 23 May 06
BBC Monitoring Service – United Kingdom; May 23, 2006
========================================================
1
                 U.S. AMBASSADOR’S PARTING WORDS
            John HERBST: “I do not agree that a fresh look at the gas
         agreements will increase tensions between Ukraine and Russia”

INTERVIEW: With U.S. Ambassador John Herbst
By Serhiy Solodky, The Day Weekly Digest in English #15
Kyiv, Ukraine, Tuesday, 23 May 2006

This week John E. Herbst, Ambassador Extraordinary and Plenipotentiary
of the US, is leaving Ukraine. He is heading for Washington to take over as
Coordinator of the State Department’s Office for Reconstruction and
Stabilization.

Obviously, the diplomat is leaving Kyiv with the sense that he fulfilled his
duties. When he arrived in Ukraine three years ago, he stressed that his
main objective was to improve relations between Kyiv and Washington.

The Orange Revolution occurred during his ambassadorial tenure. This was
followed by a real thaw in the relations between our two countries, crowned
by the repeal of the Jackson-Vanik amendment and the granting of market
economy status to Ukraine.

Herbst had a chance to witness what he calls two democratic elections in
our country.

[The Day] The Day began the interview with Ambassador Herbst by asking
if he believes his ambassadorial mission has been accomplished, even though
Ukraine is still without a cabinet.

[Amb. Herbst] “Naturally, it would be better to leave Ukraine after it has
formed a coalition government. But I am going long before the official term
for its formation expires. Why do I have to go to Washington right now? The
reason is the position that I will occupy has remained vacant for almost
four months.

Besides, although the formation of a coalition is extremely important, it is
not of a fundamental nature. The essential fact is that Ukraine has had two
democratic elections in a row: the presidential election rerun in 2004 and
the parliamentary election last March.

The Verkhovna Rada election may be unhesitatingly called the freest and
fairest in Ukrainian history. Above all, President Viktor Yushchenko must be
given credit for this. I consider the democratic nature of these elections
the logical final touch to my stay in Ukraine.”

[The Day] If the formation of a cabinet is not a fundamental factor, do you
think the domestic political situation in Ukraine is predictable?

[Amb. Herbst] “The last elections were important not only because the
authorities allowed them to be free but also because all the participants in
this race tried to achieve victory by democratic means. It was very pleasant
to watch political leaders doing their political work according to the same
standards that exist in all democracies.

As you know, some participants of the last parliamentary elections did not
adhere to democratic principles. As for the current problems with the
coalition, they are not unusual in a democratic society. We also witnessed
very difficult coalition negotiations in Germany after the latest
 elections.”

[The Day] Some politicians say that a coalition that includes the Party of
Regions will be a departure from democracy.

[Amb. Herbst] “We would like to see a coalition devoted to the cause of
reforms. The formation of the cabinet depends on the politicians who were
elected to the Verkhovna Rada. We will cooperate with the government that
is formed as a result of negotiations between these politicians.”

[The Day] Your successor William Taylor said the US is interested in a
revision of the Ukraine-Russia gas deal.

[Amb. Herbst] “The same applies here: it is the government of Ukraine that
should address this problem. If the government of Ukraine concludes that the
gas deal should be revised, it will find support and understanding on the
part of the US. As you know, since January of this year the US has not
hesitated to point out certain problems in this connection.”

[The Day] There have been many changes in US-Ukraine relations in the past
year. What problems are still on the agenda?

[Amb. Herbst] “As of today, our relations are very good indeed. We can
certainly point to a number of steps that prove this convincingly: the
restoration of privileges under the Generalized System of Preferences (a
program that gives most products from less-developed and developing
countries duty-free access to the US market – Ed.), a bilateral agreement on
the WTO, granting Ukraine market economy status, and the repeal of the
Jackson-Vanik amendment. All these steps show the progress Ukraine has
achieved in its reform-related activities.”

[The Day] What opportunities have been lost in US-Ukraine relations over
the past few years?

[Amb. Herbst] “US-Ukrainian relations saw a cool period of three or four
years that lasted approximately from 1999-2000 until the presidential
election. I can say that this period was lost time. But we have regained
what we lost in the last 15 months.”

[The Day] What would you advise your successor and all foreigners who
want to know more about Ukraine? What three pieces of advice would
you offer?

[Amb. Herbst] “It is very important to listen attentively to the people you
are dealing with. It is equally important to understand the motivation of
the people with whom you are talking and contacting, the motivation of
political forces. And, of course, it is extremely important to understand
the national interests of your own country.

The positive side of being the US ambassador to Ukraine is that Ukraine
and the US generally have very similar interests. This interest is, above
all, that Ukraine should be a democracy and a market economy. This is

the road not only to freedom but prosperity.”                    -30-
————————————————————————————————
LINK: http://www.day.kiev.ua/162527/
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2.  UKRAINE GAS CO OWES $413 MILLION TO ROSUKRENERGO 
 
United Press Internationional (UPI), Kyiv, Ukraine, Tue, May 23, 2006
KIEV, Ukraine — A Ukrainian gas company confirmed that it owed $413
million dollars to Swiss-based RosUkrEnergo.
 
State oil and gas company Naftohaz Ukrayiny confirmed it owes more than
$400 million for gas supplied by RosUkrEnergo in January and February of
this year, Yarolsav Dykovytskyy, acting director for financial and investment
issues and the head of Naftohaz’s department for economics and price policy,
said at a news conference in Kiev, UNIAN news agency reported.
Dykovytskyy was responding to allegations made in Ukraine over Naftohaz’s
debt to RosUkrEnergo. “It is not the case that we have not peen paying for
gas for four month. We have been paying for gas.
 
The debt was accumulated due to (the Russian state gas monopoly) Gazprom’s
failure to pay Naftohaz Ukrayiny for the transit of (Russian) gas (through
Ukraine),” Dykovystksyy said.                      -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3. UKRGAZENERGO EYES $1.2 BILLION IN LOANS TO FINANCE
                   GAS STORAGE FOR UKRAINE’S WINTER GAS 

Alex MacDonald, Dow Jones Newswires, London, Wed, May 24, 2006 .

LONDON — The recently created Ukrainian natural gas supply company
UkrGazEnergo expects to raise $1.2 billion in loans to finance gas storage
for peak consumption during the winter months, Igor Voronin, Chairman of
UkrGazEnergo said Wednesday.

The new venture, called UkrGazEnergo, expects to raise $1.2 billion in loans
payable over a five-year period from “big banks” in order to buy and store
gas for this coming winter, Voronin told reporters at a press conference in
London. Voronin expects to secure the loan by August.

The company plans to store up to 12 billion cubic meters of gas in Ukraine
this year, about 38% of the 32 billion cubic meters of gas it plans to
import into Ukraine during 2006. Voronin also said the company plans to
increase its gas imports to 58bcm a year over the next five years.

He said that UkrGazEnergo has “the cheapest gas in Ukraine” and “as of today
… (it’s) much lower than the European average,” which should help the
company attract more customers in the future.

The company, which expects to generate about $4 billion in sales this year,
has already signed 17bcm of annual gas contracts with industrial customers
and expects to sign more contracts before the end of the year, Voronin said.

UkrGazEnergo was established at the beginning of the year as a joint venture
between Ukraine’s largest gas supplier, Naftogaz-Ukrainy (NGAZ.YY), and
RosUkrEnergo to supply gas to Ukraine’s industrial consumers with the help
of Naftogaz.

RosUkrEnergo, a joint venture between Russian gas major OAO Gazprom
(GSPBEX.RS) and a handful of private individuals, was also created at the
beginning of the year to solve a gas price dispute between Gazprom and
Ukraine that led to a temporary reduction in gas supplies to Western Europe.

Under the contract, RosUkrEnergo agreed to provide Ukraine with Russian and
Central Asian gas at a price of $95 per 1,000 cubic meters – a nearly
twofold increase for Ukraine but far less than the $230 it would pay if it
was getting only Russian gas.

Voronin said the contract with RosUkrEnergo is fixed until the end of the
year. When asked whether the price would re-negotiated for next year, he
said he wouldn’t comment.

Separately, Voronin said UkrGazEnergo plans to expand beyond gas supply to
industrial customers and move into “exploration, production of gas fields
(in Ukraine and) … beyond Ukraine.”

The company is also planning to set up a business which would help utilities
modernize their power plants in order to make them more energy efficient.
Lastly the company also plans to open a division dedicated to scientific
research in the gas industry.

Voronin said the loans “will cover all of UkrGazEnergo’s finance needs.” He,
however, didn’t rule out the possibility of raising more funds if the
company’s investment plans changed.

Voronin said the company had no plans to buy stakes in Ukraine’s pipeline
system. He also said that acquiring gas storage wasn’t feasible at the
moment although the company intends to play a role in modernizing Ukraine’s
storage infrastructure.

Separately, Voronin said that the financial problems at Naftogaz were due to
regulatory issues and government policies rather than bad management. He
said that Naftogaz plans to pay off its debt to RosUkrEnergo by June via
loan agreements. Naftogaz has incurred $400 million in debt owed to
RosUkrEnergo.                                -30-
————————————————————————————————
-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328;
alex.macdonald@dowjones.com

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
4.       RUSSIA-UKRAINE GAS AGENT ROSUKRENERGO BUYS
CONTROL OF BIG GAS FIELD IN RUSSIA’S ASTRAKHAN REGION
Reuters, Moscow, Russia, Wednesday, May 24, 2006

MOSCOW – RosUkrEnergo, which was appointed at the start of this year to
manage Russian gas exports to Ukraine, has bought control of a big gas field
in Russia’s Astrakhan region, Interfax news agency reported on Wednesday.

The southern block of the Astrakhan gas condensate field contains 220
billion cubic metres of gas and around 20 million tonnes of oil. Citing a
source in the regional Astrakhan government, Interfax said the firm had
bought 74.87 percent of Astrakhan Oil and Gas Co., which owns the field,

and RosUkrEnergo co-owner Dmitry Firtash was now chairman of the
firm’s board.

The remainder of the shares, enough to block board decisions, is owned by
the regional government of Astrakhan, which is on the north coast of the
Caspian Sea.

Company documents from Astrakhan Oil and Gas show that it will need

over a billion dollars to develop the field and achieve target production
of 6 billion cubic metres a year. Firtash owns 45 percent of RosUkrEnergo,
while Russian gas monopoly Gazprom owns 50 percent. The remaining 5
percent is owned by Ivan Fursin.                    -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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5.           POLITICS: SIEGE OF THE EXCLUSIVE CIRCLE
          Gas crisis remains one of Ukraine’s gravest strategic challenges
   Political and economic “soap opera” playing inside and outside Ukraine

ANALYSIS AND COMMENTARY: By Yulia Mostovaya
Zerkalo Nedeli On the Web; Mirror-Weekly, No. 19 (598)
Kyiv, Ukraine, Saturday, 20 – 26 May 2006

By now, our readers have surely become sick and tired of discussions of

the gas issue. However, ZN feels committed to informing you quickly and
consistently about the most essential episodes in this political and
economic “soap opera” playing both inside and outside Ukraine.

The gas crisis (even in its current latent form) remains one of Ukraine’s
gravest strategic challenges, and thus requires ongoing media coverage.

Last week, ZN got hold of an amazing document, namely, the minutes from
negotiations between three working groups, representing the NJSC
NAFTOGAS UKRAINY, OJSC GASPROM and ROSUKRENERGO
AG Company, held on April 10th and 11th, 2006.

The minutes were signed by Riazanov, Vice Chair of the GASPROM Board;
Palchikov and Chuychenko, CEOs of ROSUKRENERGO; and Voronin,
Vice Chair of the NAFTOGAS Board.

The last fact is noteworthy since, on the one hand, Ihor Voronin has a
formal power of attorney from Ivchenko to sign official documents on behalf
of NJSC NAFTOGAS, which he did on January 4th, 2006 in Moscow.

On the other hand, Voronin chairs the Board of the UKRGASENERGO Joint
Venture, a NAFTOGAS competitor on the Ukrainian domestic market. So

there is a manifest conflict of interests, which, however, seems to be of no
concern whatsoever to our country’s government.

The minutes affirmed that, as of early April 2006, the NAFTOGAS debt to
GASPROM and ROSUKRENERGO was USD $400 million: “The NJSC
NAFTOGAS UKRAINY suggested signing a supplementary agreement to
Contract #14/935-1/04 dated 29.07.04 on the purchase of 5.7 billion cubic
meters of natural gas at USD 95 per 1000 cubic meters from

ROSUKRENERGO AG in March 2006″ (you will remember that the
negotiations were held in April, which is yet another, albeit circumstantial,
piece of evidence that the NJSC still has no gas balance).

“The ROSUKRENERGO AG Company confirmed that it would be ready to
supply 5.7 cubic meters of natural gas at USD 95 per 1000 cubic meters to
the NJSC NAFTOGAS UKRAINY in March 2006, provided the latter pays
off its current debt for the gas supplied in January-February 2006 under
Contracts #14/935-1/04 dated 29.07.04 (for USD $10,953,079.87 in January
and USD $354,215,180.41 in February) and #5-TPK dated 29.07.04 (for USD
$48,176,389.41)”.

According to our sources in the NJSC, of late Ukraine’s gas debt has
increased to USD $900 million (given the gas price of USD $95 per 1000 cubic
meters). One of the objective reasons is that in January-February, Ukrainian
enterprises buying gas from NAFTOGAS under contracts concluded earlier

paid only half the actual price and did not pay VAT. Why?

Because the NJSC NAFTOGAS UKRAINY was slow in preparing the
documentation enabling NERC to notify industrial gas consumers of the new
price for gas supplied to Ukraine: it rose from USD $50 to USD $95;
accordingly, he Ministry of Economy set the selling price for industrial
consumers at USD$110.

As for VAT, the zero rate applies only to gas supplied to Ukraine under the
intergovernmental protocol. Since no such protocol has been signed yet,
industrial gas consumers should pay the tax. This explains why NAFTOGAS
could not settle its debt to Moscow in January-February.

What it does not explain is why it did not start paying later, when all
concerned parties recognized their rights and financial obligations. Neither
the Ministry of Finance nor the Ministry of Economy knows the answer, and
the NJSC refuses to disclose information on the status of its debt
settlement with both Ashgabat and Moscow.

Interestingly, the NJSC NAFTOGAS UKRAINY is planning to launch a USD
$400-million project for gas field development and gas production in the
United Arab Emirates despite its growing debt to Russia, its unapproved
financial plan and the governmental resolution making the company’s
participation in investment projects conditional on the approval of its
financial plan, unless expressly authorized otherwise by the Cabinet.
Moreover, the company has never submitted the Emirate project feasibility
study to the government.

Yet let us return to the minutes. Its next paragraph describes the NAFTOGAS
proposal to ensure the gas balance in Ukraine in April 2006 “by purchasing
up to 2.5 billion cubic meters of natural gas from the OJSC GASPROM or
ROSUKRENERGO AG Company at USD $95 per 1000 cubic meters out
of the gas reserves to be supplied to Ukraine in April 2006.

Given the agreement signed on January 4, 2006, the OJSC GASPROM stated it
would not be able to supply the NJSC NAFTOGAS UKRAINY with natural gas
at the price of USD $95 per 1000 cubic meters, as starting in April 2006 the
ROSUKRENERGO AG COmnaby would be selling gas at USD $230 per
1000 cubic meters”.

So Moscow said its usual “no” to the company’s request of direct gas
supplies at USD $95 and insisted that it buy the gas required for the
country’s gas balance at USD $230.

The next paragraph is even more remarkable. It reads as follows: “The
ROSUKRENERGO AG Company advised that it had neither an obligation
nor the opportunity to continue supplying the NJSC NAFTOGAS UKRAINY
with natural gas in April 2006 and until the end of the year”.

Some experts describe this paragraph as the RUE Company’s attempt to
renounce the contract. They also mention their earlier warnings that
ROSUKRENERGO might peel off, leaving Ukraine without the gas due
to it under the contract.

Yet most probably, this paragraph is not about RUE’s intent to stop
supplying gas to Ukraine (although the deliberate ambiguity of the language
leaves ample room for bureaucratic arbitrariness). RUE will supply gas at
USD $95 per 1000 cubic meters to the UKRGASENERGO Joint Venture
that it founded together with the NJSC NAFTOGAS, but not to the latter.

This means that NAFTOGAS will have to fulfill its credit obligations and to
provide gas to households and heating systems, which yields no profit; but
it will have no gas for sale to industrial consumers, and neither
ROSUKRENERGO nor GASPROM are going to lend a helping hand by
selling more gas at USD $95 per 100 cubic meters.

They could offer additional volumes of gas at USD $230 per 100 cubic meters.
The situation is further aggravated by the Ukrainian government’s
requirement that NERC should limit UKRGASENERGO’s license, allowing it to
sell as little as five billion cubic meters of natural gas on Ukraine’s
domestic market.

The Cabinet was thus trying to curb the ROSUKRENERGO AG Company’s
monopoly as a gas supplier to Ukrainian industrial consumers. Mr Voronin
filed a claim to increase the volume of gas supplies, but the court case has
not been won yet. The UKRGASENERGO Joint Venture has been operating

since April 1st, 2006.

Once it supplies the 5 billion cubic meters it is allowed, the gas price can
rise to USD $230 per 1000 cubic meters. Alternatively, gas supplies can be
suspended, and NAFTOGAS will have no gas to sell to industrial consumers
anyway, unless it buys it at USD $230 per 1000 cubic meters.

Ministries and agencies engaged in gas-related businesses are paying
attention to three critical implications of the negotiations as recorded in
the minutes.

[1] First, the state-owned company GAS UKRAINY, subsidiary of NJSC
NAFTOGAS UKRAINY, responsible for supplying gas to Ukraine’s
industrial enterprises, will not be able to fulfill its obligations for want
of the necessary gas reserves.

[2] Second, ROSUKRENERGO and GASPROM are determined to supply
cheap gas to the UKRGASENERGO Joint Venture alone, compelling
NAFTOGAS to buy gas at USD $230 per 1000 cubic meters.

Since there is no mention of any objections from the Ukrainian negotiators
in the minutes, it should mean that Mr Voronin, incumbent Chair of the Board
of NJSC’s competitor and former a member of the RUE Coordination Committee,
is quite happy with the negotiation outcomes, whereby NAFTOGAS is being
ousted from the profitable gas market.

[3] Third, experts believe that ROSUKRENERGO and GASPROM are paving
the way for an inevitable price rise. As matters stand, neither the Ministry
of Finance nor the Ministry of Economy knows the exact price at which
Ukraine buys gas. The abovementioned 5 billion cubic meters do not meet the
industrial sector’s annual need.

It is up to the UKRGASENERGO Joint Venture to either break this amount into
monthly quotas, or exhaust its limit within the next couple of months, after
which it could sell gas at USD $230 per 1000 cubic meters. Some analysts
suggest, though, that Russia will hardly raise gas prices for Ukraine on the
eve of the G-8 Summit.

However, a perplexing question mark hangs over the price that Moscow will
use to calculate Ukraine’s debt for the gas already consumed. Of course, it
can afford to postpone drastic measures as the joint venture’s revenues are
being built up and so are the NJSC’s losses.

Meanwhile, a number of gas supply and distribution companies in the EU
countries, including Gas de France, E.ON.Ruhr-Gas, RWE AG (Germany),
Winters-Hall, OMW, ZMB (Austria) etc, were subject to search and seizure of
their documentation.

The ZMB Company, for example, is remarkable in that, for one thing, it sells
Russian gas re-exported by Ukraine (Yuriy Boiko, former NAFTOGAS CEO,
knows a lot about it) and, for another, it is registered to the same address
as a “Ukrainian” CENTROGAS Company holding 50 percent of the
ROSUKRENERGO stock.

Officially, the search and seizure of documentation was executed last
Tuesday and Wednesday in five EU countries by authorized representatives of
the EU investigation group in order to check the companies’ compliance with
the Gas Directive, regulating the European gas market development.

The Directive aims to restrain monopolies in the spheres of gas supplies and
transportation. For instance, gas companies in Germany and Italy violate the
European Gas Directive by preventing foreign competitors (state-owned and
private companies from several countries) from entering their domestic
markets.

Employees at the Gas de France Kyiv Office confirmed the seizure of
documents but argued it did not imply any criminal activities or
incompliance on the part of the company. According to them, the documents
would be scrutinized for compliance with the company’s rules and procedures
within the European Gas Directive requirements.

At the same time, ZN sources report that the investigators involved in the
massive search and seizure of documentation could have other objectives,
too.

Ukraine’s gas problems and Russia’s promotion of ROSUKRENERGO as a
monopolist supplier of Russian and Asian gas, the alleged association of the
gas intermediary with criminal structures, and Russia’s switching off the
gas during last winter’s coldest days made Europe think hard about its own
dependence on Russian natural gas.

So now, Europe is striving to ascertain whether this dependence is objective
and unavoidable, to look into the pricing of supplied gas and to find out if
the earlier concluded gas agreements allow of abuse or corrupt practices.

Some experts maintain that the search was inspired by the British Company
Global Witness’s report on corruption in the arrangements for Turkmen gas
supplies to Europe. A large section of the report is dedicated to Ukraine
and ROSUKRENERGO.

Supposedly, one of the objectives of the recent investigation activities in
Europe is to determine if the actual volume of Russian gas supplies to the
EU countries corresponds to those declared by GASPROM and to make
sure it is within the 30% quota allocated to Russia on the EU market.

The investigators will also check whether the gas for European consumers is
overpriced due to the involvement of multiple intermediaries at different
stages of the supply chain, and if these intermediaries are implicated in
shadow schemes or criminal activities.

In its publications earlier this year, ZN has quoted the US leaders’
censuring remarks vis-a-vis Russia’s energy sector strategy. Last week’s
developments, described above, testify that Europe is also taking practical
steps to explore whether Moscow’s policy poses a threat to the security of
the EU’s energy supplies.

Both Washington and Brussels seem to recognize Ukraine’s role as a key
transit country for Russian gas going to Europe. Kyiv has a chance to play
its own civilized and smart game. It could lose this chance unless it makes
a clear and resolute statement in the run up to the G-8 Summit in July. All
Ukrainian government members who are not involved in corrupt gas schemes,
and with whom we met last week understand that.

What our leaders need now is firm political will to make an unambiguous
policy statement, and to begin serious negotiations with Europe and the USA,
who have indicated, albeit unofficially, that they are prepared to support
Ukraine with investments and loans compensating them for the abrogation of
its agreement with ROSUKRENERGO signed in January 2006.

Yet we know the President’s stance on the matter; the Supreme Rada is busy
forming coalitions; the new government will not be formed before the G-8
Summit; and Yuriy Yekhanurov, acting Prime Minister, has “no grievances
against Olexiy Ivchenko”.

In the meantime, NAFTOGAS’s debt to Russia and Firtash is growing, a price
increase to USD $230 is in the pipeline, the intergovernmental protocol is
still absent, the gas price is an enigma to many in Ukraine, and very few
seem concerned about all of it.

These few are fully aware of the imminent threat to the country if they do
not raise these issues immediately, as well as of the threat to their
careers if they do.

No matter how hard the West may be trying to break the vicious gas circle
around Ukraine, the siege from within and the internal opposition to the
final settlement of this problem could spoil even the most favourable
prospects.
                                     -30-
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http://www.mirror-weekly.com/ie/show/598/53426/?429496729=722cd6ddb928c6ce8d8b7a09897a9531
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6.             GUAM – UNITED STATES JOINT STATEMENT
         US delegation led by David J. Kramer of the US State Department

Public Affairs Section, U.S. Embassy, Kyiv, Ukraine, Tue, May 23, 2006

KYIV – On May 22-23, 2006 in Kyiv, Ukraine, the GUAM Member-States

and the United States met at the Eleventh Meeting of the Council of Ministers
for Foreign Affairs of GUAM and the GUAM Summit to continue their dialogue
and cooperation.  The U.S. delegation was led by David J. Kramer, Deputy
Assistant Secretary for European and Eurasian Affairs.

The United States supported the creation of the “Organization for Democracy
and Economic Development – GUAM” with Secretariat in Kyiv and pledged to
provide appropriate assistance. GUAM Members-States reiterated their
commitment to cooperate on strengthening democracy, increasing security, and
deepening political, economic, scientific, and cultural cooperation in the
GUAM region.

The United States congratulated Ukraine on its assumption to the GUAM
chairmanship and reiterated its support for GUAM projects and for the
Organization’s goal of regional cooperation and development.

The Participants addressed the current state and prospects of the GUAM-U.S.
dialogue, and noted with appreciation progress achieved in advancing the
GUAM-U.S. Framework Program, which is the product of a four-year

cooperative effort to generate concrete, multilateral projects to facilitate
regional security and economic development.

Since September 2005, the GUAM countries have completed their country-

based inter-agency offices for the Virtual Center and Interstate Information
Management System and continued the development of the regional task force
structure intended for conducting law enforcement cooperation.

The GUAM Member States have also created a Secretariat of the Steering
Committee on Trade and Transportation Facilitation and intensified their
cooperation for this project.

The GUAM Ministers expressed their gratitude to the Government of the United
States for providing technical and advisory assistance to the organization.
The Euro-Atlantic Advisory Team, established after 2005 Chisinau Summit of
GUAM and sponsored by the United States, has proved to be efficient and
instrumental in assisting implementation of the GUAM-U.S. Framework Program.

The Participants reaffirmed their willingness to develop consolidated
efforts with a view to strengthening cooperation in fighting international
terrorism, preventing proliferation of weapons of mass destruction and
related technologies, combating organized crime, and confronting other
global challenges.

The joint exploration of ways to confront these common challenges to the
GUAM Member-States and the United States constitutes an important aspect

of GUAM-U.S. cooperation.

The United States commended GUAM for promoting inter-parliamentary
cooperation that is considered to become an effective instrument of
parliamentary diplomacy at the regional and European levels.

The GUAM States reiterated their interest in further deepening cooperation
with the European Union, other organizations and states in fields of mutual
interest, including diversification of energy supplies with particular focus
on the Caspian region, providing security for energy infrastructure, and
realization of the projects of the GUAM-U.S. Framework Program.

The United States reaffirmed its support for the territorial integrity of
GUAM States, within their internationally recognized borders.
GUAM Member-States reaffirmed their willingness to proceed further with

the dialogue within the format of the GUAM-European Union and GUAM-
European Union-United States context.

The Participants agreed to continue mutually beneficial cooperation, and
also to explore new areas of interaction. They agreed to conduct their next
meeting in New York during the general debates of the UN General Assembly
session of 2006.                                  -30-
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http://kiev.usembassy.gov/infocentral_eng.html
Public Affairs Section, United States Embassy Kyiv
4 Hlybochytska St., Kyiv  04050  Ukraine
(380 44) 490-4026, 490-4090, Fax (380 44) 490-4050
http://kiev.usembassy.gov/; nfo@usembassy.kiev.ua
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7.           G.U.A.M. FAREWELLS ITS POST-SOVIET PAST
               Four former Soviet republics set a course for the West

    The GUAM Organization for Democracy and Economic Development
 
COMMENTARY: By Sergei Sidorenko & Vladimir Soloviev
Kommersant, Moscow, Russia, Wed, May 24, 2006

A GUAM summit concluded in Kiev yesterday. The forum’s main
characters – the presidents of Georgia, Ukraine, Azerbaijan, and
Moldova – transformed their regional alliance into an international
organization, declaring it open for other countries to join. No one
named Russia among the potential candidates, but Romania and
Bulgaria have been invited to join GUAM. All this means that the
GUAM quartet has made a final decision on its foreign policy
orientation, shaping up as the “anti-CIS.”

On the second day of GUAM’s Kiev summit, the leaders of the
four post-Soviet republics approved the proposal made by their
foreign ministers the previous day: to change the organization’s
status from regional to international. They also decided to change
its name, in line with the goals it has set for itself. This
alliance is now called the GUAM Organization for Democracy and
Economic Development.

The presidents of the four GUAM participants – Mikhail
Saakashvili, Viktor Yushchenko, Ilkham Aliyev, and Vladimir Voronin
- described this as a historic event. They signed a declaration
about the new organization, its charter, and a summit communique. In
the declaration, Tbilisi, Kiev, Baku and Chisinau said they are
prepared to cooperate on ensuring democracy, and confirmed their
policy course in favor of deepening Euro-integration and
strengthening ties with NATO.

At the final press conference, summit host Viktor Yushchenko
said: “The name itself indicates that our key goals are Euro-
integration and North Atlantic integration. The next stage will be
cooperation on organizing the work of our border guards and customs
services.” President Yushchenko said that prospects for the
immediate future include unifying tariff policies for energy
resources transit and road and rail transport.

Yushchenko’s statement was supported by President Ilkham Aliyev
of Azerbaijan: “We are discussing new hydrocarbon sources and
transporting hydrocarbons from the Caspian basin to new markets.”

According to Aliyev, progress on democratic processes will be more
difficult if economic development lags behind. “Our countries are
the natural corridor between Central Asia and Europe. Creating a
transport corridor here will greatly influence Europe’s
development,” said Aliyev, president of the only GUAM country with
oil and gas fields. Aliyev said that Azerbaijan will increase oil
output to 60 million tons per year over the next few years, and
commence industrial production of gas. He promised that as soon as
this happens, oil from Azerbaijan would fill an Odessa-Brody
pipeline.

The four presidents also commented on their motives for seeking
their fortune outside the CIS. Aliyev was the only one who refrained
from making harsh judgements. He preferred a neutral tone, saying
that GUAM is not a confrontational organization and is not aimed
against anyone else. “We want to cooperate for our own benefit. And
our relations with Russia are constructive,” said Aliyev. Moreover,
he proposed that Azerbaijan, being less involved in conflicts with
Moscow than the others, should help its fellow GUAM participants to
normalize their relations with Moscow.
The other three presidents stated openly why they have switched
from the CIS to GUAM. “In GUAM, we’ll try to solve the problems that
we couldn’t solve in the CIS,” said Mikhail Saakashvili. “At a time
when economic sanctions are in effect against Georgia, Ukraine, and
Moldova, it’s very important that we are introducing a free trade
regime that will deliver real economic profits for all our
countries.”
“We still can’t shake the Soviet Empire syndrome,” said
Moldovan President Vladimir Voronin. “We Moldovans are a peace-
loving people, but even we can’t accept an ‘Elder Brother-Younger
Brother’ format for relations.”

The presidents of the two wine-producing countries followed
this up with some emotional comments about Russia’s ban on wine
imports from Moldova and Georgia.

Viktor Yushchenko joined in the CIS-criticizing: “The CIS is
short on useful action. We have submitted proposals concerning
logistics, and border demarcation and delimitation – but they
haven’t been accepted. There are dozens of such issues. How can
relations develop within the CIS if it can’t even resolve this kind
of question?”

At the end of the summit, Vladimir Voronin proposed renaming
the already-renamed organization as follows: the Community of
European Choice for Democracy and Economic Development. According

to Voronin, this would clarify the priorities of GUAM members. It was
decided to consider this proposal at the next summit, this autumn.

All members agreed that the organization should be expanded.
Romania and Bulgaria were named as the leading candidates for GUAM
membership. They are set to join the European Union next year, and
could increase GUAM’s political weight by joining this organization
as well. Nobody mentioned Russia as a potential GUAM member.
(Translated by Elena Leonova)                  -30-
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8.  FOUR EX-SOVIET STATES SAYS NEW REGIONAL ALLIANCE
NOT DIRECTED AGAINST RUSSIA BUT IS A PRO-EUROPE CHOICE
          Georgia, Ukraine, Azerbaijan and Moldova sign a new charter

Associated Press (AP), Kiev, Ukraine, Tue, May 23, 2006

KIEV – The leaders of four ex-Soviet republics broadly aligned with the West
insisted Tuesday their newly strengthened alliance was not aimed against
Moscow.

But tension with their giant neighbor, who was not invited to the gathering,
hung heavily over the two-day summit of the regional grouping, which has won
support from the U.S. and European Union.

Its members – Georgia, Ukraine, Azerbaijan and Moldova – signed a new
charter that pledges to uphold democratic values, foster economic
development and help each other on their pro-European path. The four
presidents noted that they had all made a “pro-Europe choice” that must be
encouraged.

“We are focusing on a new reality that has appeared in our countries, new
interests that have crystallized over the last few years,” said Georgian
President Mikhail Saakashvili, whose country along with Ukraine and Moldova
have set the goal of E.U. membership.

The alliance – which will be formally registered as an international group
under the name GUAM-Organization for Democracy and Economic Development

and have a headquarters in Kiev – comes amid growing frustration from three of
the ex-Soviet republics with the Russian-dominated Commonwealth of
Independent States, and fresh trade disputes with Moscow.

Georgia has raised the prospect of quitting the 12-nation CIS, and the
Moldovan President Vladimir Voronin also said upon his arrival Tuesday that
his country’s parliament would soon take up that question, Ukraine’s Unian
news agency reported.

Both nations are currently arguing with Russia over Moscow’s decision to ban
imports of Georgian and Moldovan wine, a blow to their economies. Russia has
cited quality concerns, but the ban is widely seen as retaliation for these
countries’ pro-Western policies. Voronin said Tuesday the matter should be
handled “in a civilized way.”

Ukraine was engaged in its own bitter dispute with Russia’s gas monopoly
earlier this year over gas supplies, which resulted in a nearly twofold
increase in price.

Azerbaijan’s President Ilham Aliev, who is being courted by both Russia and
the West, characterized his oil-rich Caspian Sea nation’s relations with
Russia as positive, but said there was tension in the years immediately
after the Soviet collapse.

Yushchenko said that while Ukraine sees Russia as a strong trade partner,
the CIS has “some deficiencies.”

Saakashvili, who is the most outspoken in his frustration toward Moscow,
insisted that he was personally offended during last year’s CIS summit when
Ukraine’s proposals weren’t even put on the floor for discussion. “Ukraine
is not some kind of village on the edge of the forest,” Saakashvili said.
“If Ukraine is treated that way, it’s hard to imagine what will happen to
smaller countries.”

Russian Deputy Foreign Minister Andrei Denisov, speaking on Russian state
television, said Tuesday that Moscow didn’t “see anything anti-Russian” in
the Kiev gathering. But he questioned the usefulness of the organization,
saying that it would be better to concentrate on strengthening existing
regional bodies.

The presidents touted the creation of a free trade zone, and called for
increased cooperation in the energy transport sector. “We are the natural
corridor between Asia and Europe and back,” Aliev said, referring to gas and
oil pipelines that go through the region. “It is impossible to go around our
countries. We should use this to speed up European integration.”   -30-

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9.           KREMLIN LOSES ITS GRIP ON IT’S DYING EMPIRE
      Four former Soviet republics set to abandon eastern commonwealth

ANALYSIS: By Richard Beeston, The Times, London, UK, May 24, 2006

ONE of the last vestiges of the Soviet Union appeared to be crumbling
yesterday, when four former republics signalled that they were pulling out
of the organisation established to keep the Kremlin connected with its lost
empire.

At a meeting in Kiev the leaders of the pro-Western states of Azerbaijan,
Georgia, Moldova and Ukraine pledged to form their own association to
promote democratic values. They also hinted that they would leave the
Commonwealth of Independent States (CIS), which was created 15 years

ago as a group representing most of the former Soviet republics.

While the CIS never fulfilled any great economic or political function, its
very existence was supposed to reflect Moscow’s continued influence from
Eastern Europe to the Caucasus and on to Central Asia. But ties between the
Kremlin and some of its former client states have deteriorated in a wave of
democratic movements that swept pro-Western leaders into power in Georgia
and Ukraine and encouraged anti-Russian sentiment in Azerbaijan and Moldova.

The new group will be called the Organisation for Democracy and Economic
Development and will be based in Kiev. It will rival the CIS, which is based
in Minsk, the capital of Belarus, where it is headed by Vladimir Rushailo, a
tough former Russian Interior Minister.

Viktor Yushchenko, the Ukrainian President, said: “Our citizens are giving
us a mandate to develop strong democratic and successful states.” The move
is seen as a huge snub to Moscow, which has not been invited to join. It
faces the prospect of being left in a CIS of eight states, including
Belarus, regarded as the last dictatorship in Europe, Armenia, and the
Central Asian republics of Kazakhstan, Kyrgyzstan, Tajikistan and
Uzbekistan. The splits within the CIS ranks have been growing in recent
months.

Moscow, which backed Mr Yushchenko’s opponent in the Ukrainian elections,
clashed with Ukraine this year when it suspended gas sales, causing an
energy crisis across Europe in the middle of winter.

The Kremlin has also rowed openly with Tbilisi over Russian support for two
breakaway regions in Georgia and its reluctant withdrawal of troops from the
country. Moscow’s recent decision to ban the import of Georgian and Moldovan
wine has strained ties further.

Azerbaijan has provoked the ire of Moscow by developing close ties with the
US, and building an oil pipeline to pump crude from the Caspian Sea to
Turkey, bypassing traditional Russian control over energy supply routes.

Moldova signalled yesterday that it may be the first country to quit the
CIS. President Voronin said that the issue would soon be debated in
parliament, where the move was likely to be approved.

Zurab Nogaideli, the Georgian Prime Minister, said that his country was

also debating the value of remaining in the CIS, and that the question of
withdrawal would come up before parliament this summer.

“Many in Georgia have been very critical of the CIS, of its performance, of
its efficiency, and we, as a government, are accountable to the people’s
concerns,” he told The Times during a visit to London.

He said that Georgia had attempted to make the CIS more efficient and
capable of dealing with important bilateral disputes, such as the Russian
wine ban, but that the CIS was incapable of addressing real issues.

“What is the sense in having an organisation that fails to discuss basic
issues that affect the countries concerned?”, Mr Nogaideli said. “It seems
to me that Russia itself is not interested in the CIS, in reality. They want
to keep it as an organisation, but they don’t want it to be an effective and
functional organisation. Russia only keeps it for prestige.”    -30-

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LINK: http://www.timesonline.co.uk/article/0,,3-2193775,00.html
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10.  EASTERN UKRAINIAN REGION GIVES RUSSIAN LANGUAGE
                              SPECIAL REGIONAL STATUS

Associated Press (AP), Kiev, Ukraine, Thursday, May 18, 2006 

KIEV, Ukraine – The eastern Ukrainian region of Donetsk granted special
status Thursday to the Russian language despite warnings from President
Viktor Yushchenko that such moves violated the constitution, which declares
Ukrainian the country’s only official language.

More than 120 of the regional legislature’s 133 members voted to make
Russian a regional language, allowing it to be used together with Ukrainian
in state and public institutions as well as at universities and cultural
institutions, said Irina Tarana, spokeswoman for the council.

The move was inspired by the fact that about 75% of the region’s population
believe Russian to be their native language, said Tarana.

The overwhelmingly Russian-speaking Donetsk region becomes the fourth area
to adopt such a measure, following similar moves in the eastern region of
Luhansk, the eastern city of Kharkiv and the Crimean city of Sevastopol.

“The decision was made in the interests of community…In the region, people
will communicate in such a way as it is better for them,” head of the
Donetsky council Antoliy Blyznyuk was quoted as saying by the Unian news
agency.

Yushchenko’s office has ordered prosecutors to consider a legal challenge
because the moves come in conflict with Ukraine’s post-Soviet constitution,
which declared Ukrainian the sole state language. Blyznyuk also expressed
concern that prosecutors would appeal the council decision, Unian reported.

The language issue is a sensitive topic in this ex-Soviet republic, where
Russian is predominantly spoken in the east and south and Ukrainian in the
west. During Soviet times, Russian predominated and now many nationalists
see protecting Ukrainian as critical to national identity.

Declaring Russian a regional language is a lesser move than trying to have
it declared a second state language, but it could open the door to those
efforts. Tarana said the council also adopted a recommendation to the new
national parliament, calling on it to recognize Russian as a state language
in Ukraine. Yushchenko has vowed to fight this.

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11. UKRAINE’S MAJOR OPPOSITION PARTY ISSUES STATEMENT
                             ON RUSSIAN LANGUAGE ISSUE

Interfax-Ukraine news agency, Kiev, in Russian 1309 gmt 17 May 06
BBC Monitoring Service, United Kingdom, Wed, May 17, 2006

KIEV – The Party of Regions will initiate discussion of “the language policy
of the state” at the first session of the Ukrainian Supreme Council
[parliament] of the 5th convocation, the party’s political council has said
in its statement on the protection of constitutional rights of Ukraine’s
Russian-speaking citizens, which has been made public on the party’s
website.

“The Party of Regions pledges to continue to defend the right of people to
think, speak and educate their children in their mother tongue, as well as
the right of local communities to freely use the Russian language,” the
statement said.

The document described as legally ungrounded the statement by the Ukrainian
Justice Ministry saying that the decisions by the city councils of Kharkiv
and Sevastopol and the Luhansk regional council to give Russian the status
of a regional language were unconstitutional.

“Article 147 of the Ukrainian constitution stipulates that the
Constitutional Court is the only body of constitutional jurisdiction in
Ukraine, and only that court is entitled to rule on matters of compliance of
laws and other legal acts of the Ukrainian constitution and come up with
official interpretation of the Ukrainian constitution and laws,” the
statement said.

The document said that the Justice Ministry’s explanation that the text of
the European Charter for Regional or Minority Languages had been incorrectly
translated “cannot be taken seriously, as it refers to a law which was
passed by the Supreme Council [parliament] and came into force”.

The Party of Regions urged the Council of Europe to pay attention to the
situation with the charter’s implementation in Ukraine and deliver an
appropriate assessment of the Ukrainian government’s actions.

The Party of Regions views the policy of the current government and
political forces “on which it leans for support” as an offensive on
citizens’ rights. “This campaign obviously has a political background to it.
It is a continuation of the short-sighted and unclever policies which the
Orange forces contributed to the presidential election and which resulted in
a deep split in society,” the document said.

The political council warned the law-enforcement agencies against “brutal
interference in such a sensitive sphere as language politics”. The council
also recalled that the president [Viktor Yushchenko] “is the president of
all citizens, including those for whom Ukrainian is the native language and
those for whom Russian or any other language is native” and urged
“respectful treatment of the right to defend the native language”.

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12.  UKRAINIAN CELEBRITIES SAY GIVING RUSSIAN LANGUAGE
                 SPECIAL STATUS IS A WAR AGAINST UKRAINE
   “We have a direct threat to the Ukrainian nation & Ukrainian state system.”
 
Natasha Lisova, Associated Press (AP), Kiev, Ukraine, Fri, May 19, 2006

KIEV – Ukrainian cultural figures and celebrities on Friday slammed efforts
to grant Russian language special status in this ex-Soviet republic, calling
it an act of war against the Ukrainian state and the Ukrainian language.

Artists, writers, politicians and scientists, meeting for a round-table
discussion in Kiev, condemned recent decisions by several regional councils
to have Russian declared a regional language, allowing its use in official
business.

The overwhelmingly Russian-speaking region of Donetsk on Thursday became the
fourth area to take such measures. “Today they announced a war, and we must
react accordingly,” movie director Yuriy Illenko said.

President Viktor Yushchenko’s administration has said granting Russian
special status contradicts the constitution, which declares Ukrainian the
only state language. His office has vowed to challenge the decisions in the
two eastern regions, an eastern city and the Crimean city of Sevastopol.

The language issue has become one of the most sensitive in Ukraine, where
Russian dominated during Soviet times and today many still consider it their
native language, particularly in the east and south. In western regions,
Ukrainian dominates and nationalists see protecting the language as a way to
prevent meddling from Moscow.

“Today we have a direct threat to the Ukrainian nation and Ukrainian state
system,” said lawmaker Ivan Zayeyts. Yushchenko’s legal adviser Mykola
Poludyony said the councils have are no legal authority to make such
decisions.

Council officials say their decision is based on a European charter, which
was ratified by the Ukrainian parliament in 2003, that protects regional and
minority languages. Critics, however, say Russian should not be considered a
minority language and does not need special protection. “Russian isn’t a
language that is disappearing,” Poludyony said.

The Party of the Regions, the pro-Moscow opposition party that won the most
votes in last month’s parliamentary election, campaigned on a promise to
make Russian a second state language.                  -30-
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13. INCONSISTENT LANGUAGE POLICY CREATES PROBLEMS 
    PRU-led Ukrainian regions continue to adopt Russian as official language

ANALYSIS & COMMENTARY: By Oleg Varfolomeyev
Eurasia Daily Monitor, Volume 3, Issue 101
Jamestown Foundation, Washington, DC, Wed, May 24, 2006

The Party of Regions (PRU), which strengthened its grip on Ukraine’s
Russophone east and south after the March 26 parliamentary election,
continues to probe the government’s weaknesses, challenging it on the
sensitive issue of language.

The PRU-dominated Donetsk regional council has followed the example of the
PRU-dominated Luhansk, Kharkiv, and Sevastopol councils, approving
regional-language status for Russian. The government, in response,
threatened to come up with tough measures against all those who violate the
constitution, according to which Ukrainian is the only language having
official status.

The government’s position is that the councils’ language decisions are a
threat to national security, part of a plan to exacerbate tension in society
and downgrade the status of Ukrainian. The government also argues that
language matters are the remit of the national — rather than regional — 
bodies of power.

The PRU, meanwhile, looks set to raise the issue at the national level. On
May 17, the party’s governing body — the political council — issued a
statement, “On the Protection of Constitutional Rights of the
Russian-speaking Citizens of Ukraine,” promising to raise the Russian
language issue soon after the new parliament convenes on May 25.

In the statement, the PRU pledged “to continue to defend the right of people
to think, speak, and educate their children in the mother tongue.” The PRU
brushed aside the Justice Ministry’s protests against the decisions of
Luhansk, Kharkiv, and Sevastopol on the status of Russian, saying that only
the Constitutional Court is entitled to rule on language matters.

Incidentally, the PRU has been among the parties blocking the election of
new judges to the Constitutional Court, fearing that the Court might take
President Viktor Yushchenko’s side and reverse the recent constitutional
reforms that diminished the president’s authority.

On May 18, the Donetsk region council voted by 122 votes to three (with one
abstention) to give Russian the status of regional language. As in the cases
of Luhansk, Kharkiv, and Sevastopol, Donetsk deputies said they were guided
by the European Charter for Regional or Minority Languages.

The council not only ruled that Russian may be used in business, official
documents, and educational establishments on a par with Ukrainian, but it
also called on parliament to give Russian state-language status along with
Ukrainian.

The council said that the current constitution ignores the fact that Russian
is the mother tongue for about one-third of Ukrainians, equating Russian to
the many minority languages spoken by small communities inside Ukraine.
Along with the PRU, the Communists and the radical left-wing Progressive
Socialists in the Donetsk council supported the language decision.

Official reaction followed immediately. Donetsk Region Prosecutor Oleksiy
Bahanets, who is subordinated to Kyiv, promised to appeal the council’s
decision in court as soon as he obtains official documents on the matter
from the council. On May 18, the cabinet gathered for a meeting to condemn
the eastern councils on language matters.

Deputy Prime Minister for Humanitarian Affairs Vyacheslav Kyrylenko blamed
“certain forces” for trying to “downgrade and practically fully exclude the
state language from usage, rather than protect minority languages.”
President Yushchenko’s legal adviser, Mykola Poludyonny, went even further,
warning of a separatist threat.

The Justice Ministry was instructed to come up with amendments to language
laws and regulations in order to toughen penalties for language-legislation
violators. It was also decided that the next meeting of the National
Security and Defense Council would be on the language issue. It may,
however, take some time for the council to convene, as its secretary,
Anatoly Kinakh, resigned last week.

Kyrylenko apparently found it difficult to explain, speaking on television
on May 22, why exactly the elevation of the Russian language status in the
eastern regions was a national security threat. “The state has certain
principles, and state language is an element of national security… very
important for state institutes,” he offered.

The language row reveals the lack of understanding regarding how deep the
language problem runs in Kyiv. It has been ignored for years, and President
Yushchenko continues to insist that there is no language problem at all,
despite the fact that pro-Communist and pro-Russian forces have been
regularly using the language issue against the government in all sorts of
elections. There has been no consistent policy of Ukrainianization, famous
Ukrainian philosopher Myroslav Popovych believes.

Commenting for the website Forum, he noted that it is sometimes difficult to
admit that the issue is actually about the “assimilation of the
Russian-speaking population,” which has to be “logical and unforced,” but so
far has been forcible.

Media expert Mykola Knyazhytsky told Forum that the main mistake of the
government has been imposing Ukrainian in those regions where it is
traditionally barely spoken, instead of financing Ukrainian culture in the
traditionally Ukrainian-speaking areas, such as Lviv.          -30-
——————————————————————————————————–
(Interfax-Ukraine, May 17, 18; Channel 5, May 18; NTN TV, For-ua.com,

May 19; 1+1 TV, May 22; see EDM, May 17)
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14.     RUSSIAN MP SAYS UKRAINE MUST NOT TRAMPLE ON
                   RIGHTS OF RUSSIAN-SPEAKING MINORITY

ITAR-TASS news agency, Moscow, in Russian, 22 May 06
BBC Monitoring Service, United Kingdom, Monday, May 22, 2006

MOSCOW – Russian State Duma deputies believe it to be “very important”

that the question “of language policy” will be placed on the agenda of the first
session of the Ukrainian Supreme Council [parliament] of the new
convocation. Andrey Kokoshin, the head of the [State] Duma committee
for CIS affairs and ties with compatriots, has said this to ITAR-TASS today.

In his words, “a general tendency can be observed in Ukraine to squeeze out
the Russian language from the information, legal and cultural space”.

One of the latest confirmations of this, the committee’s chairman noted, is
the decision of Ukraine’s Justice Ministry to deem illegal the decisions of
the Kharkiv and Sevastopol city councils and the Luhansk and Donetsk
regional councils to give the Russian language regional status.

“What we have here is a violation of the rights of the Russian-speaking
citizens of Ukraine that live in large numbers on certain territories,”
Kokoshin stressed.

He recalled that State Duma deputies have constantly drawn the attention of
their Ukrainian colleagues “to the need to ensure the rights of the
Russian-speaking population in accordance with Ukraine’s constitution and
international obligations”.

This problem “goes beyond the framework of bilateral relations since the
Russian language and Russian culture are a generally recognized part of
world culture”, Kokoshin noted.

“Behind the resolving of this problem lie the fates of tens of millions of
people, prospects for the formation of Ukraine as a democratic state and
ensuring genuine friendly and equal relations between Russia and Ukraine,”
the head of the committee said.                          -30-
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15. RUSSIAN LANGUAGE COMPLAINT: ATTENTION OLEH SOSKIN

—– Original Message —–
From: Nadia Kerecuk; nadia.kerecuk@ntlworld.com

To: citynews@osp.com.ua
Sent: Friday, May 19, 2006 10:11 AM
Subject: Re Russian language – complaint for the attention of Oleh Soskin
Action Ukraine Report (AUR) #700, Article 15
Washington, D.C., Thursday, May 25, 2006

Dear Mr Oleh Soskin,

I have decided to write in order to express my greatest disappointment that
your very good city bulletin is now being published mostly in Russian. I was
quite appalled to see the encroachment of Russian in your bulletin after so
many years of Ukraine being independent.

 
When it was published in Ukrainian I was very delighted to reach each edition.
However, it has become an annoyance.

Ukrainian citizens ought to know better especially those that head
organisations such as yours. Indeed, Citizens of Ukraine whatever their
ethnic background ought to respect the UKRAINIAN language. Honestly, I
cannot understand this approach.

UKRAINIAN IS THE ONLY official language in Ukraine – as English is in
England or Portuguese in Brazil, Russian in the Russia (are there any
bulletins of cities in Russia being published in Ukrainian????)  or French
in France and so on !!!

Particularly with the long history of prohibitions of the Ukrainian language
and the abuse of it by the Old Russian Empire, the Soviet Union and many

in power in Ukraine since the Independence in Ukraine.

Could you kindly explain why this is happening – of course, I welcome

your reply in Ukrainian or English.

With best wishes,

Nadia Kerecuk, Historian of Ideas in Language Sciences,
Expert in Linguistics including Ukrainian and Slavonic
Expert in Ukrainian Affairs & Studies
———————————————————————————————–

FOOTNOTE: Oleh Soskin: Tel: (044) 235-98-28, 235-80-23
E-mail: CityNews@osp.com.ua; Web: http://www.CityUkraine.osp-ua.info
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16. PROSPECT OF BUSH VISIT PUTS PRESSURE ON KIEV PARTIES

By Tom Warner in Kiev, Financial Times
London, United Kingdom, Friday, May 19, 2006

A possible visit to Kiev by President George W. Bush in June or July is
causing consternation in Moscow and putting pressure on Ukraine’s
quarrelling pro-western political parties to agree quickly on a coalition
government.

The White House is hoping the Kiev visit could be combined with a
US-European Union summit in late June or with the Group of Eight summit

in Moscow in mid-July.

A Kiev visit timed closely to the G8 summit would allow Mr Bush to stress

US support for the western-oriented democracies on Russia’s perimeter that
have come under economic pressure from Moscow.

Mr Bush would also use the visit to promote Ukraine’s accession to Nato,
which his administration is suggesting could be launched at the alliance’s
summit in Riga in November and completed by 2008.

The aggressive schedule was outlined by William Taylor, Mr Bush’s nominee

to take over as US ambassador in Kiev, in a Senate confirmation hearing last
week.

At a conference on Nato in Moscow yesterday, Jaap de Hoop Scheffer, the
alliance’s secretary-general, defended proposals for Nato to take in Ukraine
and Georgia, which he said were “not directed against Russia”. Russian
speakers warned that Nato-Russia relations would change for the worse if
Ukraine was invited to join.

However, Mr Bush’s mission in Kiev depends on there being a government

to greet him. A newly elected parliament is not due to convene until next
Thursday, two months after the March polls.

The three parties that led the 2004 Orange Revolution and together won the
largest share of parliamentary seats continue to argue over the sharing out
of key jobs, including the prime minister’s.

Viktor Yushchenko, president, added impetus to the talks last week when he
said that he did not object to the candidacy of Yulia Tymoshenko, a former
prime minister, with whom he has had a somewhat rocky relationship.

Ms Tymoshenko leads the largest of the three groups in the prospective
coalition and her bloc insists she be premier.

Mr Yushchenko’s spokeswoman said Mr Bush was likely to visit this year

but no date had yet been set. “Thank god that in Ukraine the government is
formed without outside influence,” she said. “But the president is
optimistic that we will see a government by the middle of June.”  -30-
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17. KATERYNA YUSHCHENKO TO VISIT PHILADELPHIA NEXT WEEK
      Meet with top health care professionals, address the World Affairs Council

By Morgan Williams, Publisher and Editor
Action Ukraine Report (AUR) #700, Article 17
Washington, D.C., Thursday, May 25, 2006

WASHINGTON – Kateryna Yushchenko, first lady of Ukraine, will visit
Philadelphia next week. The Ukrainian Federation of America, The
World Affairs Council of Philadelphia  and the Ukrainian Human Rights
Committee will host Kateryna Yuschenko for a series of meetings
regarding improving Ukraine’s health care services and world affairs.

The first meeting will be a program and dinner on Tuesday May 30, 2006
hosted by the World Affairs Council of Philadelphia and the Ukrainian
Human Rights Committee.  The World Affairs Council of Philadelphia is
the premier public policy platform in America’s birthplace and one of the
top speaking forums in the nation.

The event will beheld at the prestigious Union League at 100 S. Broad St. in
Philadelphia.  Registration and reception will begin at 5:30 pm followed by
the address of the First Lady of Ukraine and dinner.  The cost for the
event is $75.00. (For registration information see FOOTNOTE below.)

 UKRAINIAN FEDERATION OF AMERICA “PROJECT LIFELINE”

The Ukrainian Federation of America through it’s Ukrainian health care
initiative “Project Lifeline” has organized a private program for Wednesday
in support of Kateryna Yushchenko’s primary program, through the
Ukraine 3000 Foundation, to substantially improve the health care received
by the people of Ukraine, especially Ukraine’s children.

The Federation, under the leadership of Dr. Zenia Chernyk, Chair,
Healthcare Commission and Vera Andryczyk, President, has arranged a
private breakfast on Wednesday for the first lady to meet with top U.S.
health care professionals and representatives of the pharmaceutical
industries.

The first lady will then visit the Children’s Hospital of Philadelphia, the
birthplace of pediatric medicine in the United States. The First Lady will
tour Children’s Hospital facilities and meet with Hospital leadership to
encourage a sharing of knowledge and experience between doctors in
the United States and the Ukraine, with the hope to improve healthcare
for children worldwide.

At the hospital Mrs. Yushchenko will meet with Lawrence McAndrews,
president, National Association of Children’s Hospitals and Related
Institutions (NACHRI), James M. Steven, M.D., S.M., senior vice president
for medical affairs and chief medical officer, The Children’s Hospital of
Philadelphia, Children’s Hospital physicians, researchers and administrators

Following the tour of The Children’s Hospital of Philadelphia, Mrs.
Yushchenko will be the Guest of Honor at a private luncheon meeting,
set up by the Ukrainian Federation of America, with representatives of
the World Trade Center of Greater Philadelphia and charitable organizations.
The luncheon will be held at Neville Gallery at University of Pennsylvania
Museum of Archeology and Anthropology.

Philadelphia is the second stop on the First Lady’s national tour. She will

also earlier visit Washington, D.C., and then stops in California.  This is
Mrs. Yushchenko’s second visit to Philadelphia, after first coming to the
city in September 2005 when President Victor Yushchenko received the
Liberty Medal.

Since that time, Mrs. Yushchenko has met with many in the American
medical and pharmaceutical industries, through the “Project Lifeline”
program of the Ukrainian Federation of America, in order to further her
effort to elevate medical standards in Ukraine.            -30-
——————————————————————————————–
FOOTNOTE: For more information concerning the program set up

by the Ukrainian Federation of America on Wednesday please contact
Dr. Zenia Chernyk at 215 275 7902 or Vera Andryczyk at 610 539 8946.
 
For more information about the speech at the World Affairs Council in
Philadelphia go the following website:
http://www.wacphila.org/programs/speaker_eve.html#yushchenko
or call Adele Kauffman at 215 561 4700, extension 235. The Council
will be closed on Friday, May 26th and Monday, May 29th.  You can
also contact Ubulana Mazurkevich at 215-858-3006 or by e-mail:
ubulana@aol.com.
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18.  ART EXHIBITION: “MAZEPIANA” – SERHIY YAKUTOVYCH

WHAT: The Embassy of Ukraine is proud to present an art exhibition
“Mazepiana” – the works of Serhiy Yakutovych.
WHEN: Thursday May 25, 2006, 7:00 pm
WHERE: Embassy of Ukraine, 3550 M St. NW, Washington, DC 20007

Serhiy Yakutovych is an Honored Artist of Ukraine, Associate Member of
the Ukrainian Academy of Arts, The National Taras Shevchenko Prize
winner in 2004. Author of more than a hundred  illustrative cycles for
the books of Ukrainian and foreign classics such as “Three Musketeers”
by Dumas, “Song About Roland”, “Tristan and Isolde”, “Taras Bulba”

by Gogol, works of M.Gorky, O.Tolstoy, L.Tolstoy, P.Dostoevsky,
O.Gonchar, Golsuorsy, O.Walde, Nietzshe, and DeCoster.

Winner of numerous national and international graphic competitions, the
works of Sergiy Yakutovich are included in the museum collections of
Ukraine, Russia, Germany, France, Italy, Spain and in many private
collections.

FOR MORE INFORMATION:
RSVP by telephone at (202) 349-2961 or by e-mail at nholub@ukremb.com
LINK: http://yakutovich.com/ukr/sergiy/gallery_content.php?dir
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19. “EMBASSY SERIES” CONCERT AT THE EMBASSY OF UKRAINE

 
WHAT: Another marvelous pair of evenings of wonderful music by
Ukrainian artists in the elegant Ukrainian Embassy, a national treasure.
Violinist Solomiya Ivakhiv (with Roman Rabinovich on piano) is a winner
of the Prokofiev and Kocian International Competitions, recipient of
the Fritz Kreisler Gold Medal from the Curtis Institute of Music and
was awarded a scholarship from the President of Ukraine.  Ukrainian
buffet to follow.

WHEN: Friday, May 26 – 8:00 pm; Saturday, May 27 – 8:00 pm
WHERE: Embassy of Ukraine; 3350 “M” Street, N.W.
Washington, D.C. ; COST: $75.00

FOR MORE INFORMATION: See

http://www.embassyseries.com/events.htm
To order tickets, call Jerome Barry at (202) 625-2361 or order easily
online at http://www.embassyseries.org.
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20.       WASHINGTON IGNORES DEMOCRATIC VALUES
                               IN QUEST FOR CHEAP OIL
 
Sylvie Lanteaume, Agence France-Presse, Wash, D.C, Sun, May 21, 2006
WASHINGTON – The United States, eager to find new sources of oil
at the time when petroleum prices are skyrocketing, is increasingly giving
up its strategy of promoting democracy, analysts here say.

The US government of President George W. Bush has recently made
contradictory moves towards key foreign oil producers, sowing confusion
about its policy goals, according to Frank Verrastro, of the Center for
Strategic and International Studies, a Washington-based think tank.

If the democracy and support for humans right are the main engine of US
diplomacy, “then you have to wonder why we have not taken a tougher line
with Russia, why we have not taken a tougher line with Kazakhstan, why we
have not taken a tougher line with Libya?” he asked.

Yet US officials “use it when we talk about Venezuela, and we use it when we
talk about the Middle East,” said Verrastro, an expert in energy policy.
“Increasingly it is looking like a case by case application of what is more
important,” he said. “It is depending on what the perceived needs of the day
are.”

Washington announced on May 15 it was normalizing relations with Libya,
which has important crude oil reserves, despite the lack of political
reforms visible in a country led since 1969 by the same man, Moamer Kadhafi.

On the same day US officials imposed sanctions on Venezuela, a country that
supplies 15 percent of US oil imports. The stated reason: populist President
Hugo Chavez’s lack of cooperation in the US-led “war on terror”.

Washington also charged Chavez’s government with restricting the freedom of
the press and harassing his political opponents.
One day later US officials suspended free trade negotiations with Ecuador,
another important oil supplier, after Quito cancelled its contract with
US-based Occidental Petroleum and took over their assets.

On May 4 US Vice President Dick Cheney took a swipe at Russia over
democratic reform, accusing Moscow of “improperly restricting” human rights
and using oil and gas supplies as a weapon.

“No legitimate cause is served when oil and gas become tools of manipulation
or blackmail,” Cheney said, referring to the cut-off of gas supplies to
Ukraine last January which also affected parts of Europe.

Yet just hours later Cheney was praising the authoritarian government of
Kazakhstan for its “economic development and political development”.

Since 1993, the US has invested about 12 billion dollars (9.42 billion
euros) in Kazahkstan, which has oil reserves of 24 billion barrels, making
the US the biggest single investor in the country.

The Bush administration claims it is pursuing a coherent energy policy, but
recognizes that oil producing countries are politically profiting from the
high price of crude, a US State Department energy expert said, speaking on
condition of anonymity.

“You have the bulk of the world hydrocarbons resources owned by state owned
oil companies. And they are feeling very powerful now, as we saw in Ecuador
and Russia and Venezuela,” the official said.

However, Washington has not given up defending the democracy. “We have
principles,” the official said, pointing to Libya, which had to meet strict
guidelines to be withdrawn from the US list of state sponsors of terrorism.

“The evidence would suggest that America has put … our values above the
mercantilist energy issues,” the official said.

Richard Haass, president of Council on Foreign Relations, another
Washington-based think tank, disagreed.

“Today’s situation may lack drama in the sense that there has been no
successful terrorist attack on some tanker or refinery,” Haas wrote in the
most recent issue of Newsweek magazine.

“But current energy policy (or the lack of one) empowers some of the most
repressive and reckless regimes in the world, further impoverishes hundreds
of millions of the world’s poor and contributes to global climate change.”

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21.          INVESTING: ADVENTURES AT THE FRONTIER
        One market that Chief Investment Officer Chisholm likes is Ukraine

By Conrad de Aenlle, International Herald Tribune
Paris, France, Friday, May 19, 2006

In a world that keeps getting smaller, and where ever less remains unknown
and untried, emerging markets do not stay that way for very long before
joining the mainstream. So where can a globetrotting investor go in search
of a few thrills and more than a few bucks?

Some investment advisers are turning to so-called frontier markets. About
two dozen countries, in such places as Africa, the Balkans and the
Caribbean, have economies that are too raw and undeveloped even to be
classified as emerging, but they do have stock markets where investors can
experience opportunities and challenges reminiscent of a decade or more ago
in what are now emerging markets.

“Frontier markets tend to be relatively small and illiquid, even by
emerging-markets standards, and information is generally less available than
in other markets,” Charles Wang, co-director of research at Acadian Asset
Management, wrote in a recent report. “However, they represent a vast store
of untapped economic potential that may be very compelling as a long-term
investment opportunity.”

Just how untapped is made clear by their size. When Wang takes inventory, he
comes up with 285 publicly traded stocks in 22 countries and a total market
capitalization of $101 billion, or barely one-fourth the size of Exxon
Mobil.

What they lack in bulk – just 22 stocks have market valuations greater than
$1 billion each – they make up for in strength. Wang said that since
Standard & Poor’s started following these minnow markets in December
1995, they have comfortably outperformed larger and more familiar ones.

Frontier markets rose at an annualized rate of 11.6 percent in the 10 years
through last December, compared with 8.2 percent for conventional emerging
markets. Volatility has been lower in frontier markets.

Making the case for investing in the region, Max King, a strategist at
Investec Asset Management, which runs a pan-African mutual fund, pointed out
that African economic growth has exceeded that of the rest of the world in
each of the last five years, and he cited a Goldman Sachs study that
predicted that Africa’s share of the global equity market would more than
double over the next 20 years.

King tossed out several names to illustrate the region’s diverse investment
opportunities, including Orascom, an Egyptian company involved in such
activities as telecommunications, tourism and computing; Lafarge Maroc, a
Moroccan cement business controlled by the French company Lafarge;
Kenya Airways and Kenya Electricity Generating.

“If there is one stock to look at, I suggest the recently privatized KenGen,
which we were keen on and which was well-subscribed” when the government
sold shares to the public, King said.

So far, looking at frontier stocks is all that Acadian is doing. John
Chisholm, the firm’s chief investment officer, has not committed money to
any of them yet, but Acadian is drumming up business among institutional
investors, and he expects to start buying later this year.

One market that Chisholm likes is Ukraine, and one of his favorite stocks
there is the fertilizer producer Azot Cherkassy. “The company’s cheap, but
it’s expected to have good growth going forward,” he said. “That’s the
typical profile of what we’re looking for in these markets.”

Chisholm finds the same attractive mix in Tunisia, where his preferred
stocks include Banque Internationale Arabe de Tunisie and Frig Brass, a
maker of soft drinks and beer.

As appealing as these companies may be, frontier markets have their
drawbacks. Jerome Booth, research director at Ashmore Group, an
emerging-market investment house, maintains limited exposure to frontier
equities because trading is limited and “we put a premium on liquidity,” he
said.

Another shortcoming is in furnishing information. “Data availability and
quality ranges from quite good to extremely dubious,” Wang acknowledged.
A further limitation, he said, is that most stocks do not have analyst
coverage and therefore lack forward-looking factors, like earnings
estimates.         -30-

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http://www.iht.com/articles/2006/05/19/yourmoney/minvest20.php
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22. UKRAINIANS GATHER AT MASS GRAVE TO COMMEMORATE
                               VICTIMS OF STALIN REGIME 

Associated Press (AP), Kiev, Ukraine, Monday, May 22 2006

KIEV – Relatives and survivors gathered in a forest outside Kyiv Sunday at

the site of Ukraine’s largest mass grave for victims of Soviet dictator Josef
Stalin, commemorating up to 120,000 Ukrainians killed during his regime.
People laid flowers and tied linen towels with Ukrainian embroidery on trees
at the Bykovnya grave.

“It’s hard to imagine how it was possible to bury over 100,000 people in one
forest. The most awful is that it’s impossible to answer the question why
they were killed,” President Viktor Yushchenko said.

Historians say millions were killed throughout the Soviet Union during
Stalin’s reign, accused of state treason and other crimes.

Separately, up to 10 million Ukrainians died of the 1932-33 Great Famine,
which Stalin provoked as part of his campaign to force Ukrainian peasants
to give up their land and join collective farms.

On Thursday, thousands of Crimean Tatars marched in the capital of Crimea to
mark the 62nd anniversary of their deportation from the Black Sea peninsula
under Stalin, a forced exile that lasted almost half a century. Some 200,000
Tatars were deported in May 1944 after Stalin accused them of collaborating
with the Nazis and were not allowed to return until the Soviet collapse of
1991.              -30-

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23.                            A BOOK FOR SKEPTICS: 
         “THE UKRAINIAN QUESTION” 70 YEARS LATER

By Mykola SIRUK, The Day Weekly Digest #15
Kyiv, Ukraine, Tuesday, 23 May 2006

The British Embassy in Ukraine recently hosted the launch of a book of
articles by British journalist Lancelot Lawton, entitled “The Ukrainian
Question.” The publication of this book is an important event for the
Ukrainian public. Readers now have an opportunity to examine documents
that confirm the tragic events that occurred in Ukraine in the 1930s.

“The Ukrainian question is still one of the most important ones as far as
Europe is concerned. EU and NATO countries are paying a lot of attention
to developing good relations with Ukraine so that it will be stable,
prosperous, and independent,” British Ambassador Robert Brinkley told
The Day after presenting the “The Ukrainian Question.”

Lancelot Lawton was a British journalist and founding member of the
Anglo-Ukrainian Committee created in 1935, whose members were British
politicians, historians, and other individuals who were concerned about the
plight of Ukrainians.

The book contains the original speech “Ukrainian Question,” and its
Ukrainian translation, which was delivered in the British parliament in
1935, as well as the article “Ukraine, Europe’s Greatest Problem,” which
appeared in 1939.

The British ambassador said that it is very important that Lawton’s book has
appeared at this time. “This book shows that in the 1930s, when Britain and
the rest of Europe faced the rising menace of Hitler’s Nazi regime, there
were public figures in London who took an interest in the fate of Ukraine
and Ukrainians. Today this seems rather surprising. So, in my view, it is
important to reopen this fact of history and remember it,” Brinkley said.

The historian Serhiy Kot, a senior research associate at the Institute of
the History of Ukraine, who prepared the book for publication, told The Day
that the British journalist included an enormous amount of information in
his articles.

Written in a succinct style, these materials can be called a concise course
on the history and culture of Ukraine. Dr. Kot noted that the British
journalist had no links with Ukraine, i.e., he was not of Ukrainian descent.
Lawton freely joined the initiative of civic and political figures in Great
Britain, who wanted to encourage official London to establish closer
contacts with Ukraine.

“London took an interest in Ukraine: this is proved by the reports and
analytical notes concerning Ukraine, which were written by Moscow and
Warsaw consuls, and which dealt at length with the Holodomor.

In the 1930s the British wrote that the Holodomor had claimed five to seven
million human lives,” said Dr. Kot, noting that it took two years to trace
Lawton’s original articles, which were located at the Library of Congress in
the US. A total of 2,000 copies of the book have been printed.

Now the main thing is for the book to find its way to universities and
Eastern European research centers. “The book will also be useful to the
‘doubting Thomases’ in Ukraine, i.e., those who are skeptical about Ukraine.

They will read the British journalist’s articles and may adopt an entirely
different stance; they may rethink this page of Ukrainian history,” says Dr.
Kot.           -30-
———————————————————————————————–
LINK: http://www.day.kiev.ua/162552/
————————————————————————————————-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24. UKRAINIAN NATIONAL ASSOCIATION 36TH CONVENTION

Action Ukraine Report (AUR) #700, Article 23
Washington, D.C., Thursday, May 25, 2006

WASHINGTON – The Ukrainian National Association (UNA) will hold its

36th Convention at Soyuzivka, the UNA resort in the Catskill Mountains
of New York State from the Friday the 26th through Monday the 29th of
May 2006.

Although much smaller than the 1970 Convention in Cleveland and the 1974
Convention in Philadelphia which hosted 431 and 426 delegates respectively,
the 2006 convention with its 100+ delegates still promises to be a major
event in the Ukrainian community.  The UNA has been a leader in the business
and social world of Ukraine’s Diaspora and hopes to continue this status in
the future.

Running for the Presidency of the UNA this time will be Walter Prochorenko,
a business executive with extensive international sales and marketing
background and experience. Dr. Prochorenko will be opposing the present
President of the UNA Mr. Stefan Kaczaraj who has held the post for the past
4 years.

The Convention promises to be a lively affair with honored guests such as
Ukrainian Ambassador to the US, Dr. Oleh Shamshur, His Excellency Bishop
Paul Patrick Chomnycky, and Ukraine’s Consul General in New York Mykola
Kyrychenko attending. Entertainment will be provided by the Dumka Choir of
NY, Baritone Oleh Chmyr. Violinist Marian Pidvirny, Singer Olya Fryz, and
the Syzokryli Dance Ensemble.              -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
25. HUMAN RIGHTS WATCHDOG UNHAPPY WITH UKRAINE
    Ukraine continues to treat prison inmates cruelly and violate human rights

TV 5 Kanal, Kiev, in Ukrainian 1600 gmt 23 May 06
BBC Monitoring Service – United Kingdom; May 23, 2006

KIEV – [Presenter] The international fight against terrorism looks
increasingly like a fight against human rights, representatives of Amnesty
International in Ukraine have said.

Ukraine continues to treat prison inmates cruelly and violate human rights,
the annual report of this respectful organization has said.
[Correspondent] Racist and anti-Semite attacks, human trafficking and cruel
treatment of detainees – Ukraine has failed to get rid of all that, the
Amnesty International in Ukraine Annual Report says.

Representatives of the organization blame the guarantor of the constitution
[president] for systematic violations of human rights. In particular, the
organization holds President [Viktor] Yushchenko personally responsible for
the deportation of 11 Uzbeks who asked for political asylum.

[Nataliya Dulneyeva captioned as head of Amnesty International in Ukraine]
Amnesty International in Ukraine, Ukrainian Helsinki Committee and other
organizations for protection of human rights in Ukraine have started an
unlimited action that will be ended only when the investigation is complete,
when the cases of the 11 asylum-seekers are handed over to the High
Commissioner for Refugees in Ukraine and when those who are guilty are
punished.

Torturing and sending people for torturing, are the most serious violations
of human rights from our viewpoint. [Passage omitted: Amnesty International
criticizes the governments of Western countries for violations of human
rights.]            -30-
———————————————————————————————–
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Constitution of Ukraine – 25 May 2006

CONSTITUTION OF UKRAINE

(as of 25 May 2006)

[Text effective as of 25 May 2006]

[Consolidated version by Ministry of Justice of Ukraine]

[Unofficial translation]

Source: Venice Commission

CORRECTED

- Table of contents -

Chapter I
General Principles

Chapter II
Human and Citizens’ Rights, Freedoms and Duties

Chapter III
Elections. Referendum

Chapter IV
Verkhovna Rada of Ukraine

Chapter V
President of Ukraine

Chapter VI
Cabinet of Ministers of Ukraine. Other Bodies of Executive Power

Chapter VII
Prokuratura

Chapter VIII
Justice

Chapter IX
Territorial Structure of Ukraine

Chapter X
Autonomous Republic of Crimea

Chapter XI
Local Self-Government

Chapter XII
Constitutional Court of Ukraine

Chapter XIII
Introducing Amendments to the Constitution of Ukraine

Chapter XIV
Final Provisions

Chapter XV
Transitional Provisions



CONSTITUTION OF UKRAINE

(adopted at the Fifth Session f the Verkhovna Rada of Ukraine on 28 June 1996

and amended on 8 December 2004 by Law No. 2222-IV)

The Verkhovna Rada of Ukraine, on behalf of the Ukrainian people – citizens of Ukraine of all ethnicities,

expressing the sovereign will of the people,

based on the centuries-old history of Ukrainian state-building and on the right to self-determination realised by the Ukrainian nation, all the Ukrainian people,

providing for the guarantee of human rights and freedoms and of the worthy conditions of human life,

caring for the strengthening of civil harmony on Ukrainian soil,

striving to develop and strengthen a democratic, social, law-based state,

aware of our responsibility before God, our own conscience, past, present and future generations,

guided by the Act of Declaration of the Independence of Ukraine of 24 August 1991, approved by the national vote of 1 December 1991,

adopts this Constitution – the Fundamental Law of Ukraine.


Chapter I

General Principles

Article 1

Ukraine is a sovereign and independent, democratic, social, law-based state.

Article 2

The sovereignty of Ukraine extends throughout its entire territory.

Ukraine is a unitary state.

The territory of Ukraine within its present border is indivisible and inviolable.

Article 3

The human being, his or her life and health, honour and dignity, inviolability and security are recognised in Ukraine as the highest social value.

Human rights and freedoms and their guarantees determine the essence and orientation of the activity of the State. The State is answerable to the individual for its activity. To affirm and ensure human rights and freedoms is the main duty of the State.

Article 4

There is single citizenship in Ukraine. The grounds for the acquisition and termination of Ukrainian citizenship are determined by law.

Article 5

Ukraine is a republic.

The people are the bearers of sovereignty and the only source of power in Ukraine. The people exercise power directly and through bodies of state power and bodies of local self-government.

The right to determine and change the constitutional order in Ukraine belongs exclusively to the people and shall not be usurped by the State, its bodies or officials.

No one shall usurp state power.

Article 6

State power in Ukraine is exercised on the principles of its division into legislative, executive and judicial power.

Bodies of legislative, executive and judicial power exercise their authority within the limits established by this Constitution and in accordance with the laws of Ukraine.

Article 7

In Ukraine, local self-government is recognised and guaranteed.

Article 8

In Ukraine, the principle of the rule of law is recognised and effective.

The Constitution of Ukraine has the highest legal force. Laws and other normative legal acts are adopted on the basis of the Constitution of Ukraine and shall conform to it.

The norms of the Constitution of Ukraine are norms of direct effect. Appeals to the court in defence of the constitutional rights and freedoms of the individual and citizen directly on the grounds of the Constitution of Ukraine are guaranteed.

Article 9

International treaties that are in force, agreed to be binding by the Verkhovna Rada of Ukraine, are part of the national legislation of Ukraine.

The conclusion of international treaties that contravene the Constitution of Ukraine is possible only after introducing relevant amendments to the Constitution of Ukraine.

Article 10

The state language of Ukraine is the Ukrainian language.

The State ensures the comprehensive development and functioning of the Ukrainian language in all spheres of social life throughout the entire territory of Ukraine.

In Ukraine, the free development, use and protection of Russian, and other languages of national minorities of Ukraine, is guaranteed.

The State promotes the learning of languages of international communication.

The use of languages in Ukraine is guaranteed by the Constitution of Ukraine and is determined by law.

Article 11

The State promotes the consolidation and development of the Ukrainian nation, of its historical consciousness, traditions and culture, and also the development of the ethnic, cultural, linguistic and religious identity of all indigenous peoples and national minorities of Ukraine.

Article 12

Ukraine provides for the satisfaction of national and cultural, and linguistic needs of Ukrainians residing beyond the borders of the State.

Article 13

The land, its mineral wealth, atmosphere, water and other natural resources within the territory of Ukraine, the natural resources of its continental shelf, and the exclusive (maritime) economic zone, are objects of the right of property of the Ukrainian people. Ownership rights on behalf of the Ukrainian people are exercised by bodies of state power and bodies of local self-government within the limits determined by this Constitution.

Every citizen has the right to utilise the natural objects of the people’s right of property in accordance with the law.

Property entails responsibility. Property shall not be used to the detriment of the person and society.

The State ensures the protection of the rights of all subjects of the right of property and economic management, and the social orientation of the economy. All subjects of the right of property are equal before the law.

Article 14

Land is the fundamental national wealth that is under special state protection.

The right of property to land is guaranteed. This right is acquired and realised by citizens, legal persons and the State, exclusively in accordance with the law.

Article 15

Social life in Ukraine is based on the principles of political, economic and ideological diversity.

No ideology shall be recognised by the State as mandatory.

Censorship is prohibited.

The State guarantees freedom of political activity not prohibited by the Constitution and the laws of Ukraine.

Article 16

To ensure ecological safety and to maintain the ecological balance on the territory of Ukraine, to overcome the consequences of the Chornobyl catastrophe — a catastrophe of global scale, and to preserve the gene pool of the Ukrainian people, is the duty of the State.

Article 17

To protect the sovereignty and territorial indivisibility of Ukraine, and to ensure its economic and informational security are the most important functions of the State and a matter of concern for all the Ukrainian people.

The defence of Ukraine and the protection of its sovereignty, territorial indivisibility and inviolability, are entrusted to the Armed Forces of Ukraine.

Ensuring state security and protecting the state border of Ukraine are entrusted to the respective military formations and law enforcement bodies of the State, whose organisation and operational procedure are determined by law.

The Armed Forces of Ukraine and other military formations shall not be used by anyone to restrict the rights and freedoms of citizens or with the intent to overthrow the constitutional order, subvert the bodies of power or obstruct their activity.

The State ensures the social protection of citizens of Ukraine who serve in the Armed Forces of Ukraine and in other military formations as well as of members of their families.

The creation and operation of any armed formations not envisaged by law are prohibited on the territory of Ukraine.

The location of foreign military bases shall not be permitted on the territory of Ukraine.

Article 18

The foreign political activity of Ukraine is aimed at ensuring its national interests and security by maintaining peaceful and mutually beneficial co-operation with members of the international community, according to generally acknowledged principles and norms of international law.

Article 19

The legal order in Ukraine is based on the principles according to which no one shall be forced to do what is not envisaged by legislation.

Bodies of state power and bodies of local self-government and their officials are obliged to act only on the grounds, within the limits of authority, and in the manner envisaged by the Constitution and the laws of Ukraine.

Article 20

The state symbols of Ukraine are the State Flag of Ukraine, the State Coat of Arms of Ukraine and the State Anthem of Ukraine.

The State Flag of Ukraine is a banner of two equally-sized horizontal bands of blue and yellow.

The Great State Coat of Arms of Ukraine shall be established with the consideration of the Small State Coat of Arms of Ukraine and the Coat of Arms of the Zaporozhian Host, by the law adopted by no less than two-thirds of the constitutional composition of the Verkhovna Rada of Ukraine.

The main element of the Great State Coat of Arms of Ukraine is the Emblem of the Royal State of Volodymyr the Great (the Small State Coat of Arms of Ukraine).

The State Anthem of Ukraine is the national anthem set to the music of M. Verbytskyi, with words that are confirmed by the law adopted by no less than two-thirds of the constitutional composition of the Verkhovna Rada of Ukraine.

The description of the state symbols of Ukraine and the procedure for their use shall be established by the law adopted by no less than two-thirds of the constitutional composition of the Verkhovna Rada of Ukraine.

The capital of Ukraine is the City of Kyiv.



Chapter II

Human and Citizens’ Rights, Freedoms and Duties

Article 21

All people are free and equal in their dignity and rights.

Human rights and freedoms are inalienable and inviolable.

Article 22

Human and citizens’ rights and freedoms affirmed by this Constitution are not exhaustive.

Constitutional rights and freedoms are guaranteed and shall not be abolished.

The content and scope of existing rights and freedoms shall not be diminished in the adoption of new laws or in the amendment of laws that are in force.

Article 23

Every person has the right to free development of his or her personality if the rights and freedoms of other persons are not violated thereby, and has duties before the society in which the free and comprehensive development of his or her personality is ensured.

Article 24

Citizens have equal constitutional rights and freedoms and are equal before the law.

There shall be no privileges or restrictions based on race, colour of skin, political, religious and other beliefs, sex, ethnic and social origin, property status, place of residence, linguistic or other characteristics.

Equality of the rights of women and men is ensured: by providing women with opportunities equal to those of men, in public and political, and cultural activity, in obtaining education and in professional training, in work and its remuneration; by special measures for the protection of work and health of women; by establishing pension privileges, by creating conditions that allow women to combine work and motherhood; by legal protection, material and moral support of motherhood and childhood, including the provision of paid leaves and other privileges to pregnant women and mothers.

Article 25

A citizen of Ukraine shall not be deprived of citizenship and of the right to change citizenship.

A citizen of Ukraine shall not be expelled from Ukraine or surrendered to another state.

Ukraine guarantees care and protection to its citizens who are beyond its borders.

Article 26

Foreigners and stateless persons who are in Ukraine on legal grounds enjoy the same rights and freedoms and also bear the same duties as citizens of Ukraine, with the exceptions established by the Constitution, laws or international treaties of Ukraine.

Foreigners and stateless persons may be granted asylum by the procedure established by law.

Article 27

Every person has the inalienable right to life.

No one shall be arbitrarily deprived of life. The duty of the State is to protect human life.

Everyone has the right to protect his or her life and health, the lives and health of other persons against unlawful encroachments.

Article 28

Everyone has the right to respect of his or her dignity.

No one shall be subjected to torture, cruel, inhuman or degrading treatment or punishment that violates his or her dignity.

No person shall be subjected to medical, scientific or other experiments without his or her free consent.

Article 29

Every person has the right to freedom and personal inviolability.

No one shall be arrested or held in custody other than pursuant to a substantiated court decision and only on the grounds and in accordance with the procedure established by law.

In the event of an urgent necessity to prevent or stop a crime, bodies authorised by law may hold a person in custody as a temporary preventive measure, the reasonable grounds for which shall be verified by a court within seventy-two hours. The detained person shall be released immediately, if he or she has not been provided, within seventy-two hours from the moment of detention, with a substantiated court decision in regard to the holding in custody.

Everyone arrested or detained shall be informed without delay of the reasons for his or her arrest or detention, apprised of his or her rights, and from the moment of detention shall be given the opportunity to personally defend himself or herself, or to have the legal assistance of a defender.

Everyone detained has the right to challenge his or her detention in court at any time.

Relatives of an arrested or detained person shall be informed immediately of his or her arrest or detention.

Article 30

Everyone is guaranteed the inviolability of his or her dwelling place.

Entry into a dwelling place or other possessions of a person, and the examination or search thereof, shall not be permitted, other than pursuant to a substantiated court decision.

In urgent cases related to the preservation of human life and property or to the direct pursuit of persons suspected of committing a crime, another procedure established by law is possible for entry into a dwelling place or other possessions of a person, and for the examination and search thereof.

Article 31

Everyone is guaranteed privacy of mail, telephone conversations, telegraph and other correspondence. Exceptions shall be established only by a court in cases envisaged by law, with the purpose of preventing crime or ascertaining the truth in the course of the investigation of a criminal case, if it is not possible to obtain information by other means.

Article 32

No one shall be subject to interference in his or her personal and family life, except in cases envisaged by the Constitution of Ukraine.

The collection, storage, use and dissemination of confidential information about a person without his or her consent shall not be permitted, except in cases determined by law, and only in the interests of national security, economic welfare and human rights.

Every citizen has the right to examine information about himself or herself, that is not a state secret or other secret protected by law, at the bodies of state power, bodies of local self-government, institutions and organisations.

Everyone is guaranteed judicial protection of the right to rectify incorrect information about himself or herself and members of his or her family, and of the right to demand that any type of information be expunged, and also the right to compensation for material and moral damages inflicted by the collection, storage, use and dissemination of such incorrect information.

Article 33

Everyone who is legally present on the territory of Ukraine is guaranteed freedom of movement, free choice of place of residence, and the right to freely leave the territory of Ukraine, with the exception of restrictions established by law.

A citizen of Ukraine may not be deprived of the right to return to Ukraine at any time.

Article 34

Everyone is guaranteed the right to freedom of thought and speech, and to the free expression of his or her views and beliefs.

Everyone has the right to freely collect, store, use and disseminate information by oral, written or other means of his or her choice.

The exercise of these rights may be restricted by law in the interests of national security, territorial indivisibility or public order, with the purpose of preventing disturbances or crimes, protecting the health of the population, the reputation or rights of other persons, preventing the publication of information received confidentially, or supporting the authority and impartiality of justice.

Article 35

Everyone has the right to freedom of personal philosophy and religion. This right includes the freedom to profess or not to profess any religion, to perform alone or collectively and without constraint religious rites and ceremonial rituals, and to conduct religious activity.

The exercise of this right may be restricted by law only in the interests of protecting public order, the health and morality of the population, or protecting the rights and freedoms of other persons.

The Church and religious organisations in Ukraine are separated from the State, and the school — from the Church. No religion shall be recognised by the State as mandatory.

No one shall be relieved of his or her duties before the State or refuse to perform the laws for reasons of religious beliefs. In the event that the performance of military duty is contrary to the religious beliefs of a citizen, the performance of this duty shall be replaced by alternative (non-military) service.

Article 36

Citizens of Ukraine have the right to freedom of association in political parties and public organisations for the exercise and protection of their rights and freedoms and for the satisfaction of their political, economic, social, cultural and other interests, with the exception of restrictions established by law in the interests of national security and public order, the protection of the health of the population or the protection of rights and freedoms of other persons.

Political parties in Ukraine promote the formation and expression of the political will of citizens, and participate in elections. Only citizens of Ukraine may be members of political parties. Restrictions on membership in political parties are established exclusively by this Constitution and the laws of Ukraine.

Citizens have the right to take part in trade unions with the purpose of protecting their labour and socio-economic rights and interests. Trade unions are public organisations that unite citizens bound by common interests that accord with the nature of their professional activity. Trade unions are formed without prior permission on the basis of the free choice of their members. All trade unions have equal rights. Restrictions on membership in trade unions are established exclusively by this Constitution and the laws of Ukraine.

No one may be forced to join any association of citizens or be restricted in his or her rights for belonging or not belonging to political parties or public organisations.

All associations of citizens are equal before the law.

Article 37

The establishment and activity of political parties and public associations are prohibited if their programme goals or actions are aimed at the liquidation of the independence of Ukraine, the change of the constitutional order by violent means, the violation of the sovereignty and territorial indivisibility of the State, the undermining of its security, the unlawful seizure of state power, the propaganda of war and of violence, the incitement of inter-ethnic, racial, or religious enmity, and the encroachment on human rights and freedoms and the health of the population.

Political parties and public associations shall not have paramilitary formations.

The creation and activity of organisational structures of political parties shall not be permitted within bodies of executive and judicial power and executive bodies of local self-government, in military formations, and also in state enterprises, educational establishments and other state institutions and organisations.

The prohibition of the activity of associations of citizens is exercised only through judicial procedure.

Article 38

Citizens have the right to participate in the administration of state affairs, in All-Ukrainian and local referendums, to freely elect and to be elected to bodies of state power and bodies of local self-government.

Citizens enjoy the equal right of access to the civil service and to service in bodies of local self-government.

Article 39

Citizens have the right to assemble peacefully without arms and to hold meetings, rallies, processions and demonstrations, upon notifying in advance the bodies of executive power or bodies of local self-government.

Restrictions on the exercise of this right may be established by a court in accordance with the law and only in the interests of national security and public order, with the purpose of preventing disturbances or crimes, protecting the health of the population, or protecting the rights and freedoms of other persons.

Article 40

Everyone has the right to file individual or collective petitions, or to personally appeal to bodies of state power, bodies of local self-government, and to the officials and officers of these bodies, that are obliged to consider the petitions and to provide a substantiated reply within the term established by law.

Article 41

Everyone has the right to own, use and dispose of his or her property, and the results of his or her intellectual and creative activity.

The right of private property is acquired by the procedure determined by law.

In order to satisfy their needs, citizens may use the objects of the right of state and communal property in accordance with the law.

No one shall be unlawfully deprived of the right of property. The right of private property is inviolable.

The expropriation of objects of the right of private property may be applied only as an exception for reasons of social necessity, on the grounds of and by the procedure established by law, and on the condition of advance and complete compensation of their value. The expropriation of such objects with subsequent complete compensation of their value is permitted only under conditions of martial law or a state of emergency.

Confiscation of property may be applied only pursuant to a court decision, in the cases, in the extent and by the procedure established by law.

The use of property shall not cause harm to the rights, freedoms and dignity of citizens, the interests of society, aggravate the ecological situation and the natural qualities of land.

Article 42

Everyone has the right to entrepreneurial activity that is not prohibited by law.

The entrepreneurial activity of deputies, officials and officers of bodies of state power and of bodies of local self-government is restricted by law.

The State ensures the protection of competition in entrepreneurial activity. The abuse of a monopolistic position in the market, the unlawful restriction of competition, and unfair competition, shall not be permitted. The types and limits of monopolies are determined by law.

The State protects the rights of consumers, exercises control over the quality and safety of products and of all types of services and work, and promotes the activity of public consumer associations.

Article 43

Everyone has the right to labour, including the possibility to earn one’s living by labour that he or she freely chooses or to which he or she freely agrees.

The State creates conditions for citizens to fully realise their right to labour, guarantees equal opportunities in the choice of profession and of types of labour activity, implements programmes of vocational education, training and retraining of personnel according to the needs of society.

The use of forced labour is prohibited. Military or alternative (non-military) service, and also work or service carried out by a person in compliance with a verdict or other court decision, or in accordance with the laws on martial law or on a state of emergency, are not considered to be forced labour.

Everyone has the right to proper, safe and healthy work conditions, and to remuneration no less than the minimum wage as determined by law.

The employment of women and minors for work that is hazardous to their health, is prohibited.

Citizens are guaranteed protection from unlawful dismissal.

The right to timely payment for labour is protected by law.

Article 44

Those who are employed have the right to strike for the protection of their economic and social interests.

The procedure for exercising the right to strike is established by law, taking into account the necessity to ensure national security, health protection, and rights and freedoms of other persons.

No one shall be forced to participate or not to participate in a strike.

The prohibition of a strike is possible only on the basis of the law.

Article 45

Everyone who is employed has the right to rest.

This right is ensured by providing weekly rest days and also paid annual vacation, by establishing a shorter working day for certain professions and industries, and reduced working hours at night.

The maximum number of working hours, the minimum duration of rest and of paid annual vacation, days off and holidays as well as other conditions for exercising this right, are determined by law.

Article 46

Citizens have the right to social protection that includes the right to provision in cases of complete, partial or temporary disability, the loss of the principal wage-earner, unemployment due to circumstances beyond their control and also in old age, and in other cases established by law.

This right is guaranteed by general mandatory state social insurance on account of the insurance payments of citizens, enterprises, institutions and organisations, and also from budgetary and other sources of social security; by the establishment of a network of state, communal and private institutions to care for persons incapable of work.

Pensions and other types of social payments and assistance that are the principal sources of subsistence, shall ensure a standard of living not lower than the minimum living standard established by law.

Article 47

Everyone has the right to housing. The State creates conditions that enable every citizen to build, purchase as property, or to rent housing.

Citizens in need of social protection are provided with housing by the State and bodies of local self-government, free of charge or at a price affordable for them, in accordance with the law.

No one shall be forcibly deprived of housing other than on the basis of the law pursuant to a court decision.

Article 48

Everyone has the right to a standard of living sufficient for himself or herself and his or her family that includes adequate nutrition, clothing and housing.

Article 49

Everyone has the right to health protection, medical care and medical insurance.

Health protection is ensured through state funding of the relevant socio-economic, medical and sanitary, health improvement and prophylactic programmes.

The State creates conditions for effective medical service accessible to all citizens. State and communal health protection institutions provide medical care free of charge; the existing network of such institutions shall not be reduced. The State promotes the development of medical institutions of all forms of ownership.

The State provides for the development of physical culture and sports, and ensures sanitary-epidemic welfare.

Article 50

Everyone has the right to an environment that is safe for life and health, and to compensation for damages inflicted through the violation of this right.

Everyone is guaranteed the right of free access to information about the environmental situation, the quality of food and consumer goods, and also the right to disseminate such information. No one shall make such information secret.

Article 51

Marriage is based on the free consent of a woman and a man. Each of the spouses has equal rights and duties in the marriage and family.

Parents are obliged to support their children until they attain the age of majority. Adult children are obliged to care for their parents who are incapable of work.

The family, childhood, motherhood and fatherhood are under the protection of the State.

Article 52

Children are equal in their rights regardless of their origin and whether they are born in or out of wedlock.

Any violence against a child, or his or her exploitation, shall be prosecuted by law.

The maintenance and upbringing of orphans and children deprived of parental care is entrusted to the State. The State encourages and supports charitable activity in regard to children.

Article 53

Everyone has the right to education.

Complete general secondary education is compulsory.

The State ensures accessible and free pre-school, complete general secondary, vocational and higher education in state and communal educational establishments; the development of pre-school, complete general secondary, extra-curricular, vocational, higher and post-graduate education, various forms of instruction; the provision of state scholarships and privileges to pupils and students.

Citizens have the right to obtain free higher education in state and communal educational establishments on a competitive basis.

Citizens who belong to national minorities are guaranteed in accordance with the law the right to receive instruction in their native language, or to study their native language in state and communal educational establishments and through national cultural societies.

Article 54

Citizens are guaranteed the freedom of literary, artistic, scientific and technical creativity, protection of intellectual property, their copyrights, moral and material interests that arise with regard to various types of intellectual activity.

Every citizen has the right to the results of his or her intellectual, creative activity; no one shall use or distribute them without his or her consent, with the exceptions established by law.

The State promotes the development of science and the establishment of scientific relations of Ukraine with the world community.

Cultural heritage is protected by law.

The State ensures the preservation of historical monuments and other objects of cultural value, and takes measures to return to Ukraine the cultural treasures of the nation, that are located beyond its borders.

Article 55

Human and citizens’ rights and freedoms are protected by the court.

Everyone is guaranteed the right to challenge in court the decisions, actions or omission of bodies of state power, bodies of local self-government, officials and officers.

Everyone has the right to appeal for the protection of his or her rights to the Authorised Human Rights Representative of the Verkhovna Rada of Ukraine.

After exhausting all domestic legal remedies, everyone has the right to appeal for the protection of his or her rights and freedoms to the relevant international judicial institutions or to the relevant bodies of international organisations of which Ukraine is a member or participant.

Everyone has the right to protect his or her rights and freedoms from violations and illegal encroachments by any means not prohibited by law.

Article 56

Everyone has the right to compensation, at the expense of the State or bodies of local self-government, for material and moral damages inflicted by unlawful decisions, actions or omission of bodies of state power, bodies of local self-government, their officials and officers during the exercise of their authority.

Article 57

Everyone is guaranteed the right to know his or her rights and duties.

Laws and other normative legal acts that determine the rights and duties of citizens shall be brought to the notice of the population by the procedure established by law.

Laws and other normative legal acts that determine the rights and duties of citizens, but that are not brought to the notice of the population by the procedure established by law, are not in force.

Article 58

Laws and other normative legal acts have no retroactive force, except in cases where they mitigate or annul the responsibility of a person.

No one shall bear responsibility for acts that, at the time they were committed, were not deemed by law to be an offence.

Article 59

Everyone has the right to legal assistance. Such assistance is provided free of charge in cases envisaged by law. Everyone is free to choose the defender of his or her rights.

In Ukraine, the advocacy acts to ensure the right to a defence against accusation and to provide legal assistance in deciding cases in courts and other state bodies.

Article 60

No one is obliged to execute rulings or orders that are manifestly criminal.

For the issuance or execution of a manifestly criminal ruling or order, legal liability arises.

Article 61

For one and the same offence, no one shall be brought twice to legal liability of the same type.

The legal liability of a person is of an individual character.

Article 62

A person is presumed innocent of committing a crime and shall not be subjected to criminal punishment until his or her guilt is proved through legal procedure and established by a court verdict of guilty.

No one is obliged to prove his or her innocence of committing a crime.

An accusation shall not be based on illegally obtained evidence as well as on assumptions. All doubts in regard to the proof of guilt of a person are interpreted in his or her favour.

In the event that a court verdict is revoked as unjust, the State compensates the material and moral damages inflicted by the groundless conviction.

Article 63

A person shall not bear responsibility for refusing to testify or to explain anything about himself or herself, members of his or her family or close relatives in the degree determined by law.

A suspect, an accused, or a defendant has the right to a defence.

A convicted person enjoys all human and citizens’ rights, with the exception of restrictions determined by law and established by a court verdict.

Article 64

Constitutional human and citizens’ rights and freedoms shall not be restricted, except in cases envisaged by the Constitution of Ukraine.

Under conditions of martial law or a state of emergency, specific restrictions on rights and freedoms may be established with the indication of the period of effectiveness of these restrictions. The rights and freedoms envisaged in Articles 24, 25, 2 7, 28, 29, 40, 47, 51, 52, 55, 56, 57, 58, 59, 60, 61, 62 and 63 of this Constitution shall not be restricted.

Article 65

Defence of the Motherland, of the independence and territorial indivisibility of Ukraine, and respect for its state symbols, are the duties of citizens of Ukraine.

Citizens perform military service in accordance with the law.

Article 66

Everyone is obliged not to harm nature, cultural heritage and to compensate for any damage he or she inflicted.

Article 67

Everyone is obliged to pay taxes and levies in accordance with the procedure and in the extent established by law.

All citizens annually file declarations with the tax inspection at their place of residence, on their property status and income for the previous year, by the procedure established by law.

Article 68

Everyone is obliged to strictly abide by the Constitution of Ukraine and the laws of Ukraine, and not to encroach upon the rights and freedoms, honour and dignity of other persons.

Ignorance of the law shall not exempt from legal liability.



Chapter III

Elections. Referendum

Article 69

The expression of the will of the people is exercised through elections, referendum and other forms of direct democracy.

Article 70

Citizens of Ukraine who have attained the age of eighteen on the day elections and referendums are held, have the right to vote at the elections and referendums.

Citizens deemed by a court to be incompetent do not have the right to vote.

Article 71

Elections to bodies of state power and bodies of local self-government are free and are held on the basis of universal, equal and direct suffrage, by secret ballot.

Voters are guaranteed the free expression of their will.

Article 72

An All-Ukrainian referendum is designated by the Verkhovna Rada of Ukraine or by the President of Ukraine, in accordance with their authority established by this Constitution.

An All-Ukrainian referendum is called on popular initiative on the request of no less than three million citizens of Ukraine who have the right to vote, on the condition that the signatures in favour of designating the referendum have been collected in no less than two-thirds of the oblasts, with no less than 100 000 signatures in each oblast.

Article 73

Issues of altering the territory of Ukraine are resolved exclusively by an All-Ukrainian referendum.

Article 74

A referendum shall not be permitted in regard to draft laws on issues of taxes, the budget and amnesty.



Chapter IV

Verkhovna Rada of Ukraine

Article 75

The sole body of legislative power in Ukraine is the Parliament — the Verkhovna Rada of Ukraine.

Article 76

The constitutional composition of the Verkhovna Rada of Ukraine is 450 People’s Deputies of Ukraine who are elected on the basis of universal, equal and direct suffrage, by secret ballot.

A citizen of Ukraine who has attained the age of twenty-one on the day of elections, has the right to vote, and has resided on the territory of Ukraine for the past five years, shall be eligible to be elected a People’s Deputy of Ukraine.

A citizen who has a criminal record for committing an intentional crime shall not be eligible to be elected to the Verkhovna Rada of Ukraine if the record is not cancelled and erased under the procedure established by law.

The authority of People’s Deputies of Ukraine is determined by the Constitution and the laws of Ukraine.

The term of office of the Verkhovna Rada of Ukraine is five years.

Article 77

Regular elections to the Verkhovna Rada of Ukraine take place on the last Sunday of the last month of the fifth year of the term of authority of the Verkhovna Rada of Ukraine.

Special elections to the Verkhovna Rada of Ukraine are designated by the President of Ukraine and are held within sixty days from the day of the publication of the decision on the pre-term termination of authority of the Verkhovna Rada of Ukraine.

The procedure for conducting elections of People’s Deputies of Ukraine is established by law.

Article 78

People’s Deputies of Ukraine exercise their authority on a permanent basis.

People’s Deputies of Ukraine shall not have any other representative mandate, be in the civil service, hold any other paid offices, carry out other gainful or entrepreneurial activity (with the exception of teaching, scientific, and creative activities), or to be a member of the governing body or supervisory council of an enterprise or a profit-seeking organisation.

Requirements concerning the incompatibility of the deputy’s mandate with other types of activity are established by law.

Where there emerge circumstances infringing requirements concerning the incompatibility of the deputy’s mandate with other types of activity, the People’s Deputy of Ukraine shall within twenty days from the date of the emergence of such circumstances discontinue such activity or lodge a personal application for divesting of People’s Deputy authority.

Article 79

Before assuming office, People’s Deputies of Ukraine take the following oath before the Verkhovna Rada of Ukraine:

“I swear allegiance to Ukraine. I commit myself with all my deeds to protect the sovereignty and independence of Ukraine, to provide for the good of the Motherland and for the welfare of the Ukrainian people.

I swear to abide by the Constitution of Ukraine and the laws of Ukraine, to carry out my duties in the interests of all compatriots.”

The oath is read by the eldest People’s Deputy of Ukraine before the opening of the first session of the newly-elected Verkhovna Rada of Ukraine, after which the deputies affirm the oath with their signatures below its text.

The refusal to take the oath results in the loss of the mandate of the deputy.

The authority of People’s Deputies of Ukraine commences from the moment of the taking of the oath.

Article 80

People’s Deputies of Ukraine are guaranteed parliamentary immunity.

People’s Deputies of Ukraine are not legally liable for the results of voting or for statements made in Parliament and in its bodies, with the exception of liability for insult or defamation.

People’s Deputies of Ukraine shall not be held criminally liable, detained or arrested without the consent of the Verkhovna Rada of Ukraine.

Article 81

The authority of People’s Deputies of Ukraine terminates simultaneously with the termination of authority of the Verkhovna Rada of Ukraine.

The authority of a People’s Deputy of Ukraine shall terminate prior to the expiration of his or her term in office in the event of:

(1) his or her resignation through a personal application;

(2) a guilty verdict against him or her entering into legal force;

(3) a court declaring him or her incapacitated or missing;

(4) termination of his or her citizenship or his or her departure from Ukraine for permanent residence abroad;

(5) his or her failure, within twenty days from the date of the emergence of circumstances leading to the infringement of requirements concerning the incompatibility of the deputy’s mandate with other types of activity, to remove such circumstances;

(6) his or her failure, as having been elected from a political party (an electoral bloc of political parties), to join the parliamentary faction representing the same political party (the same electoral bloc of political parties) or his or her exit from such a faction;

(7) his or her death.

The pre-term termination of the authority of a People’s Deputy of Ukraine shall also be caused by the early termination, under the Constitution of Ukraine, of authority of the Verkhovna Rada of Ukraine, with such termination of the Deputy’s authority taking effect on the date when the Verkhovna Rada of Ukraine of a new convocation opens its first meeting.

A decision on pre-term termination of the authority of a People’s Deputy of Ukraine on grounds referred to in subparagraphs (1), (4) of the second paragraph of this Article shall be made by the Verkhovna Rada of Ukraine, while the ground referred to in subparagraph (5) of the second paragraph of this Article shall be a matter to be decided by court.

Where a guilty verdict against a People’s Deputy of Ukraine becomes legally effective or where a court declares a People’s Deputy of Ukraine incapacitated or missing, his or her powers terminate on the date when the court decision becomes legally effective, while in the event of the Deputy’s death – on the date of his or her death as certified by the relevant document.

Where a People’s Deputy of Ukraine, as having been elected from a political party (an electoral bloc of political parties), fails to join the parliamentary faction representing the same political party (the same electoral bloc of political parties) or exits from such a faction, the highest steering body of the respective political party (electoral bloc of political parties) shall decide to terminate early his or her authority on the basis of a law, with the termination taking effect on the date of such a decision.

Article 82

The Verkhovna Rada of Ukraine works in sessions.

The Verkhovna Rada of Ukraine is competent on the condition that no less than two-thirds of its constitutional composition has been elected.

The Verkhovna Rada of Ukraine assembles for its first session no later than on the thirtieth day after the official announcement of the election results.

The first meeting of the Verkhovna Rada of Ukraine is opened by the eldest People’s Deputy of Ukraine.

Article 83

Regular sessions of the Verkhovna Rada of Ukraine commence on the first Tuesday of February and on the first Tuesday of September each year.

Special sessions of the Verkhovna Rada of Ukraine, with the stipulation of their agenda, are convoked by the Chairperson of the Verkhovna Rada of Ukraine, on the demand of the President of Ukraine or on the demand of no fewer People’s Deputies of Ukraine than one-third of the constitutional composition of the Verkhovna Rada of Ukraine.

In the event that the President of Ukraine declares, by proclaiming a decree, a state of martial law or of emergency upon the whole territory of Ukraine or in some areas of the State, the Verkhovna Rada of Ukraine shall assemble within two days without convocation.

In the event that the term of authority of the Verkhovna Rada of Ukraine expires while a state of martial law or of emergency is in effect, its powers are extended until the day when the Verkhovna Rada of Ukraine elected after the cancellation of the state of martial law or of emergency convenes its first meeting of the first session.

Rules on the conduct of work of the Verkhovna Rada of Ukraine shall be laid down in the Constitution of Ukraine and the Rules of Procedure of the Verkhovna Rada of Ukraine.

According to election results and on the basis of a common ground achieved between various political positions, a coalition of parliamentary factions shall be formed in the Verkhovna Rada of Ukraine to include a majority of People’s Deputies of Ukraine within the constitutional composition of the Verkhovna Rada of Ukraine.

A coalition of parliamentary factions in the Verkhovna Rada of Ukraine shall be formed within a month from the date of the first meeting of the Verkhovna Rada of Ukraine to be held following regular or special elections to the Verkhovna Rada of Ukraine, or within a month from the date when activities of a coalition of parliamentary factions in the Verkhovna Rada of Ukraine terminated.

A coalition of parliamentary factions in the Verkhovna Rada of Ukraine submits to the President of Ukraine, in accordance with this Constitution, proposals concerning a candidature for the office of the Prime Minister of Ukraine and also, in accordance with this Constitution, submits proposals concerning candidatures for the membership of the Cabinet of Ministers of Ukraine.

Framework for forming, organising, and terminating activities of a coalition of parliamentary factions in the Verkhovna Rada of Ukraine shall be established by the Constitution of Ukraine and the Rules of Procedure of the Verkhovna Rada of Ukraine.

A parliamentary faction in the Verkhovna Rada of Ukraine whose members make up a majority of People’s Deputies of Ukraine within the constitutional composition of the Verkhovna Rada of Ukraine shall enjoy the same rights under this Constitution as a coalition of parliamentary factions in the Verkhovna Rada of Ukraine.

Article 84

Meetings of the Verkhovna Rada of Ukraine are conducted openly. A closed meeting is conducted on the decision of the majority of the constitutional composition of the Verkhovna Rada of Ukraine.

Decisions of the Verkhovna Rada of Ukraine are adopted exclusively at its plenary meetings by voting.

Voting at the meetings of the Verkhovna Rada of Ukraine is performed by a People’s Deputy of Ukraine in person.

Article 85

The authority of the Verkhovna Rada of Ukraine comprises:

(1) introducing amendments to the Constitution of Ukraine within the limits and under the procedure specified in Chapter XIII of this Constitution;

(2) instituting an All-Ukrainian referendum on issues referred to in Article 73 of this Constitution;

(3) adopting laws;

(4) approving the State Budget of Ukraine and introducing amendments thereto; exercising control over the implementation of the State Budget of Ukraine and adopting decision in regard to the report on its implementation;

(5) determining the principles of domestic and foreign policy;

(6) approving national programmes of economic, scientific-technical, social, national-cultural development, and of the protection of the environment;

(7) calling elections of the President of Ukraine within the terms specified in this Constitution;

(8) hearing annual and special messages of the President of Ukraine on the internal and external situation of Ukraine;

(9) declaring war upon the submission by the President of Ukraine and concluding peace; approving a decision by the President of Ukraine on the use of the Armed Forces of Ukraine and other military formations in the event of armed aggression against Ukraine;

(10) removing the President of Ukraine from office under a special procedure (impeachment) as provided for in Article 111 of this Constitution;

(11) considering and adopting a decision in regard to the approval of the Programme of Activity of the Cabinet of Ministers of Ukraine;

(12) appointing to office – upon the submission by the President of Ukraine – the Prime Minister of Ukraine, the Minister of Defence of Ukraine, the Minister of Foreign Affairs of Ukraine; appointing to office – upon the submission by the Prime Minister of Ukraine – other members of the Cabinet of Ministers of Ukraine, the Chairperson of the Antimonopoly Committee of Ukraine, the Head of the State Committee on Television and Radio Broadcasting of Ukraine, and the Head of the State Property Fund of Ukraine; dismissing from office the officials mentioned above; deciding on the resignation of the Prime Minister of Ukraine and of members of the Cabinet of Ministers of Ukraine;

(12) appointing to office and dismissing from office – upon the submission by the President of Ukraine – the Head of the Security Service of Ukraine;

(13) exercising control over activities of the Cabinet of Ministers of Ukraine, in accordance with this Constitution and law;

(14) confirming decisions on loans and economic aid to be granted by Ukraine to foreign states and international organisations and also decisions on the receipt by Ukraine of loans not envisaged by the State Budget of Ukraine from foreign states, banks and international financial organisations; exercising control over the use of such funds;

(15) adopting the Rules of Procedure of the Verkhovna Rada of Ukraine;

(16) appointing to office and dismissing from office the Chairperson and other members of the Chamber of Accounting;

(17) appointing to office and dismissing from office the Authorised Human Rights Representative of the Verkhovna Rada of Ukraine; hearing his or her annual reports on the situation with regard to the observance and protection of human rights and freedoms in Ukraine;

(18) appointing to office and dismissing from office the Head of the National Bank of Ukraine upon the submission by the President of Ukraine;

(19) appointing and dismissing one-half of the membership of the Council of the National Bank of Ukraine;

(20) appointing and dismissing one-half of the membership of the National Council of Ukraine on Television and Radio Broadcasting;

(21) appointing to office and dismissing from office, upon the submission of the President of Ukraine, the members of the Central Electoral Commission;

(22) approving the general structure and numerical strength of the Security Service of Ukraine, the Armed Forces of Ukraine, other military formations created in accordance with laws of Ukraine, and of the Ministry of Internal Affairs of Ukraine, as well as defining their functions;

(23) approving decisions on providing military assistance to other states, on sending units of the Armed Forces of Ukraine to a foreign state, or on admitting units of armed forces of foreign states onto the territory of Ukraine;

(24) establishing national symbols of Ukraine;

(25) granting consent for the appointment to office or dismissing from office by the President of Ukraine of the Prosecutor General of Ukraine; taking a vote of no confidence in the Prosecutor General of Ukraine, the result of which shall be his or her resignation from office;

(26) appointing and dismissing one-third of the members of the Constitutional Court of Ukraine;

(27) electing judges for permanent terms;

(28) causing the early termination of the authority of the Verkhovna Rada of the Autonomous Republic of Crimea where the Constitutional Court of Ukraine finds that the Verkhovna Rada of the Autonomous Republic of Crimea has violated the Constitution of Ukraine or laws of Ukraine; calling special elections to the Verkhovna Rada of the Autonomous Republic of Crimea;

(29) establishing and abolishing districts, establishing and altering the boundaries of districts and cities, assigning localities to the category of cities, naming and renaming localities and districts;

(30) calling regular and special elections to bodies of local self-government;

(31) giving its approval to decrees by the President of Ukraine – within two days from the moment of the President’s address – on introducing a state of martial law or of emergency in Ukraine or in its some areas, on declaring total or partial mobilisation, and on declaring particular areas to be ecological emergency zones;

(32) granting consent – by adopting a law – to the binding character of international treaties of Ukraine and denouncing international treaties of Ukraine;

(33) exercising parliamentary control within the scope provided for by this Constitution;

(34) adopting decisions on forwarding an inquiry to the President of Ukraine at request by a People’s Deputy of Ukraine, a group of People’s Deputies or by a Committee of the Verkhovna Rada of Ukraine, provided that such a request has been previously supported by no less than one-third of the constitutional composition of the Verkhovna Rada of Ukraine;

(35) appointing to office and dismissing from office the Head of Staff of the Verkhovna Rada of Ukraine; approving the budget of the Verkhovna Rada of Ukraine and the structure of its staff;

(36) approving the list of objects owned by the State that are not subject to privatisation; establishing legal principles of the expropriation of objects of private ownership;

(37) approving by law of the Constitution of the Autonomous Republic of Crimea and amendments thereto.

The Verkhovna Rada of Ukraine shall also exercise any other powers falling within its competence under the Constitution of Ukraine.

Article 86

At a session of the Verkhovna Rada of Ukraine, a People’s Deputy of Ukraine has the right to present an inquiry to the bodies of the Verkhovna Rada of Ukraine, the Cabinet of Ministers of Ukraine, chief officers of other bodies of state power and bodies of local self-government, and also to the chief executives of enterprises, institutions and organisations located on the territory of Ukraine, irrespective of their subordination and forms of ownership.

Chief officers of bodies of state power and bodies of local self-government, chief executives of enterprises, institutions and organisations are obliged to notify a People’s Deputy of Ukraine of the results of the consideration of his or her inquiry.

Article 87

The Verkhovna Rada of Ukraine, on the proposal of the President of Ukraine or no fewer People’s Deputies of Ukraine than one-third of its constitutional composition, may consider the issue of responsibility of the Cabinet of Ministers of Ukraine and adopt a resolution of no confidence in the Cabinet of Ministers of Ukraine by the majority of the constitutional composition of the Verkhovna Rada of Ukraine.

The issue of responsibility of the Cabinet of Ministers of Ukraine shall not be considered by the Verkhovna Rada of Ukraine more than once during one regular session, and also within one year after the approval of the Programme of Activity of the Cabinet of Ministers of Ukraine or during the last session of the Verkhovna Rada of Ukraine.

Article 88

The Verkhovna Rada of Ukraine elects from among its members the Chairperson of the Verkhovna Rada of Ukraine, the First Deputy Chairperson and the Deputy Chairperson of the Verkhovna Rada of Ukraine, and recalls them from these offices.

The Chairperson of the Verkhovna Rada of Ukraine:

1) presides at meetings of the Verkhovna Rada of Ukraine;

2) organises work of the Verkhovna Rada of Ukraine and co-ordinates activities of its bodies;

3) signs acts adopted by the Verkhovna Rada of Ukraine;

4) represents the Verkhovna Rada of Ukraine in relations with other bodies of state power of Ukraine and with the bodies of power of other states;

5) organises the work of the staff of the Verkhovna Rada of Ukraine.

The Chairperson of the Verkhovna Rada of Ukraine exercises authority envisaged by this Constitution, by the procedure established by the Rules of Procedure of the Verkhovna Rada of Ukraine.

Article 89

To perform the work of legislative drafting, to prepare and conduct the preliminary consideration of issues ascribed to its authority as well as to exercise control functions according to the Constitution of Ukraine the Verkhovna Rada of Ukraine establishes from People’s Deputies of Ukraine committees of the Verkhovna Rada of Ukraine, and elects Chairpersons to these Committees, their First Deputies, Deputies and Secretaries.

The Verkhovna Rada of Ukraine, within the limits of its authority, may establish temporary special commissions for the preparation and the preliminary consideration of issues.

To investigate issues of public interest, the Verkhovna Rada of Ukraine establishes temporary investigatory commissions, if no less than one-third of the constitutional composition of the Verkhovna Rada of Ukraine has voted in favour thereof.

The conclusions and proposals of temporary investigatory commissions are not decisive for investigation and court.

The organisation and operational procedure of committees of the Verkhovna Rada of Ukraine, and also its temporary special and temporary investigatory commissions, are established by law.

Article 90

The authority of the Verkhovna Rada of Ukraine is terminated on the day of the opening of the first meeting of the Verkhovna Rada of Ukraine of a new convocation.

The President of Ukraine may terminate the authority of the Verkhovna Rada of Ukraine prior to the expiration of term, if:

(1) there is a failure to form within one month a coalition of parliamentary factions in the Verkhovna Rada of Ukraine as provided for in Article 83 of this Constitution;

(2) there is a failure, within sixty days following the resignation of the Cabinet of Ministers of Ukraine, to form the personal composition of the Cabinet of Ministers of Ukraine;

(3) the Verkhovna Rada of Ukraine fails, within thirty days of a single regular session, to commence its plenary meetings.

The early termination of powers of the Verkhovna Rada of Ukraine shall be decided by the President of Ukraine following relevant consultations with the Chairperson and Deputy Chairpersons of the Verkhovna Rada of Ukraine and with Chairpersons of Verkhovna Rada parliamentary factions.

The authority of the Verkhovna Rada of Ukraine, that is elected at special elections conducted after the pre-term termination by the President of Ukraine of authority of the Verkhovna Rada of Ukraine of the previous convocation, shall not be terminated within one year from the day of its election.

The authority of the Verkhovna Rada of Ukraine shall not be terminated during the last six months of the term of authority of the Verkhovna Rada of Ukraine or President of Ukraine.

Article 91

The Verkhovna Rada of Ukraine adopts laws, resolutions and other acts by the majority of its constitutional composition, except in cases envisaged by this Constitution.

Article 92

The following are determined exclusively by the laws of Ukraine:

1) human and citizens’ rights and freedoms, the guarantees of these rights and freedoms; the main duties of the citizen;

2) citizenship, the legal personality of citizens, the status of foreigners and stateless persons;

3) the rights of indigenous peoples and national minorities;

4) the procedure for the use of languages;

5) the principles of the use of natural resources, the exclusive (maritime) economic zone and the continental shelf, the exploration of outer space, the organisation and operation of power supply systems, transportation and communications;

6) the fundamentals of social protection, the forms and types of pension provision; the principles of the regulation of labour and employment, marriage, family, the protection of childhood, motherhood and fatherhood; upbringing, education, culture and health care; ecological safety;

7) the legal regime of property;

8) the legal principles and guarantees of entrepreneurship; the rules of competition and the norms of antimonopoly regulation;

9) the principles of foreign relations, foreign economic activity and customs;

10) the principles of the regulation of demographic and migration processes;

11) the principles of the establishment and activity of political parties, other associations of citizens, and the mass media;

12) the organisation and activity of bodies of executive power, the fundamentals of civil service, the organisation of state statistics and informatics;

13) the territorial structure of Ukraine;

14) the judicial system, judicial proceedings, the status of judges, the principles of judicial expertise, the organisation and operation of the procuracy, the bodies of inquiry and investigation, the notary, the bodies and institutions for the execution of punishments; the fundamentals of the organisation and activity of the advocacy;

15) the principles of local self-government;

16) the status of the capital of Ukraine; the special status of other cities;

17) the fundamentals of national security, the organisation of the Armed Forces of Ukraine and ensuring public order;

18) the legal regime of the state border;

19) the legal regime of martial law and a state of emergency, zones of an ecological emergency situation;

20) the organisation and procedure for conducting elections and referendums;

21) the organisation and operational procedure of the Verkhovna Rada of Ukraine, the status of People’s Deputies of Ukraine;

22) the principles of civil legal liability; acts that are crimes, administrative or disciplinary offences, and liability for them.

The following are established exclusively by the laws of Ukraine:

1) the State Budget of Ukraine and the budgetary system of Ukraine; the system of taxation, taxes and levies; the principles of the formation and operation of financial, monetary, credit and investment markets; the status of the national currency and also the status of foreign currencies on the territory of Ukraine; the procedure for the formation and payment of state domestic and foreign debt; the procedure for the issuance and circulation of state securities, their types and forms;

2) the procedure for deploying units of the Armed Forces of Ukraine to other states; the procedure for admitting and the terms for stationing units of armed forces of other states on the territory of Ukraine;

3) units of weight, measure and time; the procedure for establishing state standards;

4) the procedure for the use and protection of state symbols;

5) state awards;

6) military ranks, diplomatic and other special ranks;

7) state holidays;

8) the procedure for the establishment and functioning of free and other special zones that have an economic and migration regime different from the general regime.

Amnesty is declared by the law of Ukraine.

Article 93

The right of legislative initiative in the Verkhovna Rada of Ukraine belongs to the President of Ukraine, the People’s Deputies of Ukraine and the Cabinet of Ministers of Ukraine.

Draft laws defined by the President of Ukraine as not postponable, are considered out of turn by the Verkhovna Rada of Ukraine.

Article 94

The Chairperson of the Verkhovna Rada of Ukraine signs a law and forwards it without delay to the President of Ukraine.

Within fifteen days of the receipt of a law, the President of Ukraine signs it, accepting it for execution, and officially promulgates it, or returns it to the Verkhovna Rada of Ukraine with substantiated and formulated proposals for repeat consideration.

In the event that the President of Ukraine has not returned a law for repeat consideration within the established term, the law is deemed to be approved by the President of Ukraine and shall be signed and officially promulgated.

Where a law, during its repeat consideration, is again adopted by the Verkhovna Rada of Ukraine by no less than two-thirds of its constitutional membership, the President of Ukraine is obliged to sign and to officially promulgate it within ten days. In the event that the President of Ukraine does not sign such a law, it shall be without delay promulgated officially by the Chairperson of the Verkhovna Rada of Ukraine and published under his or her signature.

A law enters into force in ten days from the day of its official promulgation, unless otherwise envisaged by the law itself, but not prior to the day of its publication.

Article 95

The budgetary system of Ukraine is built on the principles of just and impartial distribution of social wealth among citizens and territorial communities.

Any state expenditures for the needs of the entire society, the extent and purposes of these expenditures, are determined exclusively by the law on the State Budget of Ukraine.

The State aspires to a balanced budget of Ukraine.

Regular reports on revenues and expenditures of the State Budget of Ukraine shall be made public.

Article 96

The State Budget of Ukraine is annually approved by the Verkhovna Rada of Ukraine for the period from 1 January to 31 December, and under special circumstances for a different period.

The Cabinet of Ministers of Ukraine submits the draft law on the State Budget of Ukraine for the following year to the Verkhovna Rada of Ukraine no later than on 15 September of each year. The report on the course of the implementation of the State Budget of Ukraine in the current year is submitted together with the draft law.

Article 97

The Cabinet of Ministers of Ukraine submits the report on the implementation of the State Budget of Ukraine to the Verkhovna Rada of Ukraine in accordance with the law.

The submitted report shall be made public.

Article 98

The Chamber of Accounting shall, on behalf of the Verkhovna Rada of Ukraine, exercise control over State Budget revenues and the use of State Budget funds.

Article 99

The monetary unit of Ukraine is the hryvnia.

To ensure the stability of the monetary unit is the major function of the central bank of the State — the National Bank of Ukraine.

Article 100

The Council of the National Bank of Ukraine elaborates the basic principles of monetary and credit policy and exercises control over its execution.

The legal status of the Council of the National Bank of Ukraine is determined by law.

Article 101

The Authorised Human Rights Representative of the Verkhovna Rada of Ukraine exercises parliamentary control over the observance of constitutional human and citizens’ rights and freedoms.



Chapter V

President of Ukraine

Article 102

The President of Ukraine is the Head of State and acts in its name.

The President of Ukraine is the guarantor of state sovereignty and territorial indivisibility of Ukraine, the observance of the Constitution of Ukraine and human and citizens’ rights and freedoms.

Article 103

The President of Ukraine is elected by the citizens of kraine for a five-year term, on the basis of univrsal, equal and direct suffrage, by scret ballot.

A citizen of Ukraine who has attained the age of thirty-ive, has the right to vote, has resided in Ukrainefor the past ten years prior to the day of elctions, and has command of the sate language, may be elected as the President of Ukraine.

One and the same person shall not be the President of Ukraine for more thn two consecutive terms.

The President of Ukraine shall not have another epresentative mandate, hold office in bodis of state power or in associationsof citizens, and also perform any other paid or entrepreneurial activity, or be a ember of an administative body or board of supervisors of an enterprise that is aimed at making profit.

Regular elections of the President of Ukraine are held on the last Sunday of the last month of the fifth year of the term of authority of the President of Ukraine. In the event of pre-term termination of authority of the President of Ukraine, elections of t he President of Ukraine are held within ninety days from the day of termination of the authority.

The procedure for conducting elections of the President of Ukraine is established by law.

Article 104

The newly-elected President of Ukraine assumes office no later than in thirty days after the official announcement of the election results, from the moment of taking the oath to the people at a ceremonial meeting of the Verkhovna Rada of Ukraine.

The Chairperson of the Constitutional Court of Ukraine administers the oath to the President of Ukraine.

The President of Ukraine takes the following oath:

“I, (name and surname), elected by the will of the people as the President of Ukraine, assuming this high office, do solemnly swear allegiance to Ukraine. I pledge with all my undertakings to protect the sovereignty and independence of Ukraine, to provide for the good of the Motherland and the welfare of the Ukrainian people, to protect the rights and freedoms of citizens, to abide by the Constitution of Ukraine and the laws of Ukraine, to exercise my duties in the interests of all compatriots, and t o enhance the prestige of Ukraine in the world.”

The President of Ukraine, elected by special elections, takes the oath within five days after the official announcement of the election results.

Article 105

The President of Ukraine enjoys the right of immunity during the term of authority.

Persons guilty of offending the honour and dignity of the President of Ukraine are brought to responsibility on the basis of the law.

The title of President of Ukraine is protected by law and is reserved for the President for life, unless the President of Ukraine has been removed from office by the procedure of impeachment.

Article 106

The President of Ukraine:

1) ensures state independence, national security and the legal succession of the state;

2) addresses the people with messages and the Verkhovna Rada of Ukraine with annual and special messages on the domestic and foreign situation of Ukraine;

3) represents the state in international relations, administers the foreign political activity of the State, conducts negotiations and concludes international treaties of Ukraine;

4) adopts decisions on the recognition of foreign states;

5) appoints and dismisses heads of diplomatic missions of Ukraine to other states and to international organisations; accepts credentials and letters of recall of diplomatic representatives of foreign states;

6) designates an All-Ukrainian referendum regarding amendments to the Constitution of Ukraine in accordance with Article 156 of this Constitution, proclaims an All-Ukrainian referendum on popular initiative;

7) designates special elections to the Verkhovna Rada of Ukraine within the terms established by this Constitution;

8) terminates the authority of the Verkhovna Rada of Ukraine in cases specified by this Constitution;

9) puts forward, upon the proposal by the parliamentary coalition formed in the Verkhovna Rada of Ukraine as provided for by Article 83 of the Constitution of Ukraine, the submission on the appointment by the Verkhovna Rada of Ukraine of the Prime Minister of Ukraine, no later than fifteen days after the receipt of such a proposal;

10) puts forward to the Verkhovna Rada of Ukraine the submission on the appointment of the Minister of Defence of Ukraine and the Minister of Foreign Affairs of Ukraine;

11) appoints to office and dismisses from office the Prosecutor General of Ukraine, with the consent of the Verkhovna Rada of Ukraine;

12) appoints and dismisses one-half of the composition of the Council of the National Bank of Ukraine;

13) appoints and dismisses one-half of the composition of the National Council of Ukraine on Television and Radio Broadcasting;

14) puts forward to the Verkhovna Rada of Ukraine the submission on the appointment to office and dismissal from office of the Head of the Security Service of Ukraine;

15) suspends the operation of acts by the Cabinet of Ministers of Ukraine on grounds of their inconsistency with this Constitution and challenges concurrently the constitutionality of such acts before the Constitutional Court of Ukraine;

16) revokes acts of the Council of Ministers of the Autonomous Republic of Crimea;

17) is the Commander-in-Chief of the Armed Forces of Ukraine; appoints to office and dismisses from office the high command of the Armed Forces of Ukraine and other military formations; administers in the spheres of national security and defence of the State;

18) heads the Council of National Security and Defence of Ukraine;

19) puts forward to the Verkhovna Rada of Ukraine the submission on the declaration of a state of war, and, in case of armed aggression against Ukraine, adopts a decision on the use of the Armed Forces of Ukraine and other military formations established in accordance with laws of Ukraine;

20) adopts a decision in accordance with the law on the general or partial mobilisation and the introduction of martial law in Ukraine or in its particular areas, in the event of a threat of aggression, danger to the state independence of Ukraine;

21) adopts a decision, in the event of necessity, on the introduction of a state of emergency in Ukraine or in its particular areas, and also in the event of necessity, declares certain areas of Ukraine as zones of an ecological emergency situation — with subsequent confirmation of these decisions by the Verkhovna Rada of Ukraine;

22) appoints and dismisses one-third of the composition to the Constitutional Court of Ukraine;

23) establishes courts by the procedure determined by law;

24) confers high military ranks, high diplomatic and other high special ranks and class orders;

25) confers state awards; establishes presidential distinctions and confers them;

26) adopts decisions on the acceptance for citizenship of Ukraine and the termination of citizenship of Ukraine, and on the granting of asylum in Ukraine;

27) grants pardons;

28) creates, within the limits of the funds envisaged in the State Budget of Ukraine, consultative, advisory and other subsidiary bodies and services for the exercise of his or her authority;

29) signs laws adopted by the Verkhovna Rada of Ukraine;

30) has the right to veto laws adopted by the Verkhovna Rada of Ukraine (except for laws on amendments to the Constitution of Ukraine) with their subsequent return for repeat consideration by the Verkhovna Rada of Ukraine;

31) exercises other powers determined by the Constitution of Ukraine.

The President of Ukraine shall not transfer his or her powers to other persons or bodies.

The President of Ukraine, on the basis and for the execution of the Constitution and the laws of Ukraine, issues decrees and directives that are mandatory for execution on the territory of Ukraine.

Acts of the President of Ukraine, issued within the limits of authority as envisaged in subparagraphs 5, 18, 21, and 23 of this Article, are co-signed by the Prime Minister of Ukraine and the Minister responsible for the act and its execution.

Article 107

The Council of National Security and Defence of Ukraine is the co-ordinating body to the President of Ukraine on issues of national security and defence.

The Council of National Security and Defence of Ukraine co-ordinates and controls the activity of bodies of executive power in the sphere of national security and defence.

The President of Ukraine is the Chairperson of the Council of National Security and Defence of Ukraine.

The President of Ukraine forms the personal composition of the Council of National Security and Defence of Ukraine.

The Prime Minister of Ukraine, the Minister of Defence of Ukraine, the Head of the Security Service of Ukraine, the Minister of Internal Affairs of Ukraine and the Minister of Foreign Affairs of Ukraine, are ex officio members of the Council of Nation al Security and Defence of Ukraine.

The Chairperson of the Verkhovna Rada of Ukraine may take part in the meetings of the Council of National Security and Defence of Ukraine.

Decisions of the Council of National Security and Defence of Ukraine are put into effect by decrees of the President of Ukraine.

The competence and functions of the Council of National Security and Defence of Ukraine are determined by law.

Article 108

The President of Ukraine exercises his or her powers until the assumption of office by the newly-elected President of Ukraine.

The powers of the President of Ukraine terminate prior to the expiration of term in cases of:

1) resignation;

2) inability to exercise his or her powers for reasons of health;

3) removal from office by the procedure of impeachment;

4) death.

Article 109

The resignation of the President of Ukraine enters into force from the moment he or she personally announces the statement of resignation at a meeting of the Verkhovna Rada of Ukraine.

Article 110

The inability of the President of Ukraine to exercise his or her powers for reasons of health shall be determined at a meeting of the Verkhovna Rada of Ukraine and confirmed by a decision adopted by the majority of its constitutional composition on the basis of a petition of the Supreme Court of Ukraine – on the appeal of the Verkhovna Rada of Ukraine, and a medical opinion.

Article 111

The President of Ukraine may be removed from office by the Verkhovna Rada of Ukraine by the procedure of impeachment, in the event that he or she commits state treason or other crime.

The issue of the removal of the President of Ukraine from office by the procedure of impeachment is initiated by the majority of the constitutional composition of the Verkhovna Rada of Ukraine.

To conduct the investigation, the Verkhovna Rada of Ukraine establishes a special temporary investigatory commission whose composition includes a special Prosecutor and special investigators.

The conclusions and proposals of the temporary investigatory commission are considered at a meeting of the Verkhovna Rada of Ukraine.

For cause, the Verkhovna Rada of Ukraine, by no less than two-thirds of its constitutional composition, adopts a decision on the accusation of the President of Ukraine.

The decision on the removal of the President of Ukraine from office by the procedure of impeachment is adopted by the Verkhovna Rada of Ukraine by no less than three-quarters of its constitutional composition, after the review of the case by the Constitutional Court of Ukraine and the receipt of its opinion on the observance of the constitutional procedure of investigation and consideration of the case of impeachment, and the receipt of the opinion of the Supreme Court of Ukraine to the effect that the acts, of which the President of Ukraine is accused, contain elements of state treason or other crime.

Article 112

In the event of the pre-term termination of authority of the President of Ukraine in accordance with Articles 108, 109, 110 and 111 of this Constitution, the execution of duties of the President of Ukraine, for the period pending the elections and the assumption of office of the new President of Ukraine, shall be vested in the Chairperson of the Verkhovna Rada of Ukraine. The Chairperson of the Verkhovna Rada of Ukraine, for the period of executing the duties of the President of Ukraine, shall not exercise the powers envisaged by subparagraphs 2, 6-8, 10-13, 22, 24, 25, 27 and 28 of Article 106 of the Constitution of Ukraine.



Chapter VI

Cabinet of Ministers of Ukraine. Other Bodies of Executive Power

Article 113

The Cabinet of Ministers of Ukraine is the highest authority in the system of bodies of executive power.

The Cabinet of Ministers of Ukraine is responsible to the President of Ukraine and the Verkhovna Rada of Ukraine as well as under the control of and accountable to the Verkhovna Rada of Ukraine within the limits provided for by this Constitution of Ukraine.

The Cabinet of Ministers of Ukraine is guided in its activity by this Constitution and the laws of Ukraine and also by decrees made by the President of Ukraine and resolutions made by of the Verkhovna Rada of Ukraine in accordance with the Constitution and the laws of Ukraine.

Article 114

The Cabinet of Ministers of Ukraine is composed of the Prime Minister of Ukraine, the First Vice Prime Minister, Vice Prime Ministers and Ministers.

The Prime Minister of Ukraine is appointed by the Verkhovna Rada of Ukraine upon the submission by the President of Ukraine.

The name of a candidate for the office of the Prime Minister of Ukraine is put forward by the President of Ukraine upon the proposal by the parliamentary coalition formed in the Verkhovna Rada of Ukraine as provided for in Article 83 of the Constitution of Ukraine or by a parliamentary faction whose People’s Deputies of Ukraine make up a majority of the constitutional membership of the Verkhovna Rada of Ukraine.

The Minister of Defence of Ukraine and the Minister of Foreign Affairs of Ukraine are appointed by the Verkhovna Rada of Ukraine upon the submission by the President of Ukraine; the other members of the Cabinet of Ministers of Ukraine are appointed by the Verkhovna Rada of Ukraine upon the submission by the Prime Minister of Ukraine.

The Prime Minister of Ukraine manages the work of the Cabinet of Ministers of Ukraine and directs it for the implementation of the Programme of Activity of the Cabinet of Ministers of Ukraine adopted by the Verkhovna Rada of Ukraine.

Article 115

The Cabinet of Ministers of Ukraine divests itself of its powers before the newly elected Verkhovna Rada of Ukraine.

The Prime Minister of Ukraine, other members of the Cabinet of Ministers of Ukraine have the right to announce their resignation to the Verkhovna Rada of Ukraine.

The resignation of the Prime Minister of Ukraine or the adoption by the Verkhovna Rada of Ukraine of a resolution of no confidence in the Cabinet of Ministers of Ukraine shall result in the resignation of the entire Cabinet of Ministers of Ukraine. In such cases, the Verkhovna Rada of Ukraine shall form a new Cabinet of Ministers of Ukraine within the terms and under the procedure provided for by this Constitution.

The Cabinet of Ministers of Ukraine that has divested itself of its powers before the newly elected Verkhovna Rada of Ukraine or whose resignation has been accepted by the Verkhovna Rada of Ukraine shall continue to exercise its powers until the newly formed Cabinet of Ministers of Ukraine starts its work.

Article 116

The Cabinet of Ministers of Ukraine:

1) ensures the state sovereignty and economic independence of Ukraine, the implementation of domestic and foreign policy of the State, the execution of the Constitution and the laws of Ukraine, and the acts of the President of Ukraine;

2) takes measures to ensure human and citizens’ rights and freedoms;

3) ensures the implementation of financial, pricing, investment and taxation policy; the policy in the spheres of labour and employment of the population, social security, education, science and culture, environmental protection, ecological safety and the utilisation of nature;

4) elaborates and implements national programmes of economic, scientific and technical, and social and cultural development of Ukraine;

5) ensures equal conditions of development of all forms of ownership; administers the management of objects of state property in accordance with the law;

6) elaborates the draft law on the State Budget of Ukraine and ensures the implementation of the State Budget of Ukraine approved by the Verkhovna Rada of Ukraine, and submits a report on its implementation to the Verkhovna Rada of Ukraine;

7) takes measures to ensure the defence capability and national security of Ukraine, public order and to combat crime;

8) organises and ensures the implementation of the foreign economic activity of Ukraine, and the operation of customs;

9) directs and co-ordinates the operation of ministries and other bodies of executive power;

(91) sets up, re-organises, and liquidates, in accordance with law, ministries and other central bodies of executive power, acting therewith within the limits of funds allocated for the maintenance of bodies of executive power;

(92) appoints to office and dismisses from office, upon the submission by the Prime Minister of Ukraine, the heads of central bodies of executive power who are not members of the Cabinet of Ministers of Ukraine;

10) exercises other powers determined by the Constitution and the laws of Ukraine.

Article 117

The Cabinet of Ministers of Ukraine, within the limits of its competence, issues resolutions and orders that are mandatory for execution.

Acts of the Cabinet of Ministers of Ukraine are signed by the Prime Minister of Ukraine.

Normative legal acts of the Cabinet of Ministers of Ukraine, ministries and other central bodies of executive power, are subject to registration through the procedure established by law.

Article 118

The executive power in oblasts, districts, and in the Cities of Kyiv and Sevastopol is exercised by local state administrations.

Particular aspects of the exercise of executive power in the Cities of Kyiv and Sevastopol are determined by special laws of Ukraine.

The composition of local state administrations is formed by heads of local state administrations.

Heads of local state administrations are appointed to office and dismissed from office by the President of Ukraine upon the submission of the Cabinet of Ministers of Ukraine.

In the exercise of their duties, the heads of local state administrations are responsible to the President of Ukraine and to the Cabinet of Ministers of Ukraine, and are accountable to and under the control of bodies of executive power of a higher level.

Local state administrations are accountable to and under the control of councils in the part of the authority delegated to them by the respective district or oblast councils.

Local state administrations are accountable to and under the control of the bodies of executive power of a higher level.

Decisions of the heads of local state administrations that contravene the Constitution and the laws of Ukraine, other acts of legislation of Ukraine, may be revoked by the President of Ukraine or by the head of the local state administration of a higher level, in accordance with the law.

An oblast or district council may express no confidence in the head of the respective local state administration, on which grounds the President of Ukraine adopts a decision and provides a substantiated reply.

If two-thirds of the deputies of the composition of the respective council express no confidence in the head of a district or oblast state administration, the President of Ukraine adopts a decision on the resignation of the head of the local state administration.

Article 119

Local state administrations on their respective territory ensure:

1) the execution of the Constitution and the laws of Ukraine, acts of the President of Ukraine, acts of the Cabinet of Ministers of Ukraine and other bodies of executive power;

2) legality and legal order; the observance of laws and freedoms of citizens;

3) the implementation of national and regional programmes for socio-economic and cultural development, programmes for environmental protection, and also — in places of compact residence of indigenous peoples and national minorities — programmes for their national and cultural development;

4) the preparation and implementation of respective oblast and district budgets;

5) the report on the implementation of respective budgets and programmes;

6) interaction with bodies of local self-government;

7) the realisation of other powers vested by the state and also delegated by the respective councils.

Article 120

Members of the Cabinet of Ministers of Ukraine and heads of central and local bodies of executive power do not have the right to combine their official activity with other work (except for teaching, scientific and creative activity outside of working hours), or to be members of a governing body or supervisory council of an enterprise or profit-seeking organisation.

The organisation, authority and operational procedure of the Cabinet of Ministers of Ukraine, and other central and local bodies of executive power, are determined by the Constitution and the laws of Ukraine.



Chapter VII

Prokuratura

Article 121

The Prokuratura of Ukraine constitutes a unified system that is entrusted with:

(1) prosecution in court on behalf of the State;

(2) representation of the interests of a citizen or of the State in court in cases determined by law;

(3) supervision of the observance of laws by bodies that conduct detective and search activity, inquiry and pre-trial investigation;

(4) supervision of the observance of laws in the execution of judicial decisions in criminal cases, and also in the application of other measures of coercion related to the restraint of personal liberty of citizens;

(5) supervision over the respect for human and citizens’ rights and freedoms and over how laws governing such issues are observed by bodies of executive power, bodies of local self-government and by their officials and officers.

Article 122

The Prokuratura of Ukraine is headed by the Prosecutor General of Ukraine, who is appointed to office and dismissed from office, with the consent of the Verkhovna Rada of Ukraine, by the President of Ukraine. The Verkhovna Rada of Ukraine may express no confidence in the Prosecutor General of Ukraine that results in his or her resignation from office.

The term of authority of the Prosecutor General of Ukraine is five years.

Article 123

The organisation and operational procedure for the bodies of the Prokuratura of Ukraine are determined by law.



Chapter VIII

Justice

Article 124

Justice in Ukraine is administered exclusively by the courts. The delegation of the functions of the courts, and also the appropriation of these functions by other bodies or officials, shall not be permitted.

The jurisdiction of the courts extends to all legal relations that arise in the State.

Judicial proceedings are performed by the Constitutional Court of Ukraine and courts of general jurisdiction.

The people directly participate in the administration of justice through people’s assessors and jurors.

Judicial decisions are adopted by the courts in the name of Ukraine and are mandatory for execution throughout the entire territory of Ukraine.

Article 125

In Ukraine, the system of courts of general jurisdiction is formed in accordance with the territorial principle and the principle of specialisation.

The Supreme Court of Ukraine is highest judicial body in the system of courts of general jurisdiction.

The respective high courts are the highest judicial bodies of specialised courts.

Courts of appeal and local courts operate in accordance with the law.

The creation of extraordinary and special courts shall not be permitted.

Article 126

The independence and immunity of judges are guaranteed by the Constitution and the laws of Ukraine.

Influencing judges in any manner is prohibited.

A judge shall not be detained or arrested without the consent of the Verkhovna Rada of Ukraine, until a verdict of guilty is rendered by a court.

Judges hold office for permanent terms, except judges of the Constitutional Court of Ukraine, and judges appointed to the office of judge for the first time.

A judge is dismissed from office by the body that elected or appointed him or her in the event of:

1) the expiration of the term for which he or she was elected or appointed;

2) the judge’s attainment of the age of sixty-five;

3) the impossibility to exercise his or her authority for reasons of health;

4) the violation by the judge of requirements concerning incompatibility;

5) the breach of oath by the judge;

6) the entry into legal force of a verdict of guilty against him or her;

7) the termination of his or her citizenship;

8) the declaration that he or she is missing, or the pronouncement that he or she is dead;

9) the submission by the judge of a statement of resignation or of voluntary dismissal from office.

The authority of the judge terminates in the event of his or her death.

The State ensures the personal security of judges and their families.

Article 127

Justice is administered by professional judges and, in cases determined by law, people’s assessors and jurors.

Professional judges shall not belong to political parties and trade unions, take part in any political activity, hold a representative mandate, occupy any other paid positions, perform other remunerated work except scholarly, teaching and creative activity.

A citizen of Ukraine, not younger than the age of twenty-five, who has a higher legal education and has work experience in the sphere of law for no less than three years, has resided in Ukraine for no less than ten years and has command of the state language, may be recommended for the office of judge by the Qualification Commission of Judges.

Persons with professional training in issues of jurisdiction of specialised courts may be judges of these courts. These judges administer justice only as members of a collegium of judges.

Additional requirements for certain categories of judges in terms of experience, age and their professional level are established by law.

Protection of the professional interests of judges is exercised by the procedure established by law.

Article 128

The first appointment of a professional judge to office for a five-year term is made by the President of Ukraine. All other judges, except the judges of the Constitutional Court of Ukraine, are elected by the Verkhovna Rada of Ukraine for permanent terms by the procedure established by law.

The Chairperson of the Supreme Court of Ukraine is elected to office and dismissed from office by the Plenary Assembly of the Supreme Court of Ukraine by secret ballot, by the procedure established by law.

Article 129

In the administration of justice, judges are independent and subject only to the law.

Judicial proceedings are conducted by a single judge, by a panel of judges, or by a court of the jury.

The main principles of judicial proceedings are:

1) legality;

2) equality before the law and the court of all participants in a trial;

3) ensuring that the guilt is proved;

4) adversarial procedure and freedom of the parties to present their evidence to the court and to prove the weight of evidence before the court;

5) prosecution by the Prosecutor in court on behalf of the State;

6) ensuring the right of an accused person to a defence;

7) openness of a trial and its complete recording by technical means;

8) ensuring complaint of a court decision by appeal and cassation, except in cases established by law;

9) the mandatory nature of court decisions.

The law may also determine other principles of judicial proceedings in courts of specific judicial jurisdiction.

Persons guilty of contempt of court or of showing disrespect toward the judge are brought to legal liability.

Article 130

The State ensures funding and proper conditions for the operation of courts and the activity of judges. Expenditures for the maintenance of courts are allocated separately in the State Budget of Ukraine.

Judges’ self-management operates to resolve issues of the internal affairs of courts.

Article 131

The High Council of Justice operates in Ukraine, whose competence comprises:

1) forwarding submissions on the appointment of judges to office or on their dismissal from office;

2) adopting decisions in regard to the violation by judges and Prosecutors of the requirements concerning incompatibility;

3) exercising disciplinary procedure in regard to judges of the Supreme Court of Ukraine and judges of high specialised courts, and the consideration of complaints regarding decisions on bringing to disciplinary liability judges of courts of appeal an d local courts, and also Prosecutors.

The High Council of Justice consists of twenty members. The Verkhovna Rada of Ukraine, the President of Ukraine, the Congress of Judges of Ukraine, the Congress of Advocates of Ukraine, and the Congress of Representatives of Higher Legal Educational Establishments and Scientific Institutions, each appoint three members to the High Council of Justice, and the All-Ukrainian Conference of Employees of the Prokuratura — two members of the High Council of Justice.

The Chairperson of the Supreme Court of Ukraine, the Minister of Justice of Ukraine and the Prosecutor General of Ukraine are ex officio members of the High Council of Justice.



Chapter IX

Territorial Structure of Ukraine

Article 132

The territorial structure of Ukraine is based on the principles of unity and indivisibility of the state territory, the combination of centralisation and decentralisation in the exercise of state power, and the balanced socio-economic development of regions that takes into account their historical, economic, ecological, geographical and demographic characteristics, and ethnic and cultural traditions.

Article 133

The system of the administrative and territorial structure of Ukraine is composed of the Autonomous Republic of Crimea, oblasts, districts, cities, city districts, settlements and villages.

Ukraine is composed of the Autonomous Republic of Crimea, Vinnytsia Oblast, Volyn Oblast, Dnipropetrovsk Oblast, Donetsk Oblast, Zhytomyr Oblast, Zakarpattia Oblast, Zaporizhia Oblast, Ivano-Frankivsk Oblast, Kyiv Oblast, Kirovohrad Oblast, Luhansk Ob last, Lviv Oblast, Mykolaiv Oblast, Odesa Oblast, Poltava Oblast, Rivne Oblast, Sumy Oblast, Ternopil Oblast, Kharkiv Oblast, Kherson Oblast, Khmelnytskyi Oblast, Cherkasy Oblast, Chernivtsi Oblast and Chernihiv Oblast, and the Cities of Kyiv and Sevastopol.

The Cities of Kyiv and Sevastopol have special status that is determined by the laws of Ukraine.



Chapter X

Autonomous Republic of Crimea

Article 134

The Autonomous Republic of Crimea is an inseparable constituent part of Ukraine and decides on the issues ascribed to its competence within the limits of authority determined by the Constitution of Ukraine.

Article 135

The Autonomous Republic of Crimea has the Constitution of the Autonomous Republic of Crimea that is adopted by the Verkhovna Rada of the Autonomous Republic of Crimea and approved by the Verkhovna Rada of Ukraine by no less than one-half of the constitutional composition of the Verkhovna Rada of Ukraine.

Normative legal acts of the Verkhovna Rada of the Autonomous Republic of Crimea and decisions of the Council of Ministers of the Autonomous Republic of Crimea shall not contradict the Constitution and the laws of Ukraine and are adopted in accordance with the Constitution of Ukraine, the laws of Ukraine, acts of the President of Ukraine and the Cabinet of Ministers of Ukraine, and for their execution.

Article 136

The Verkhovna Rada of the Autonomous Republic of Crimea, within the limits of its authority, is the representative body of the Autonomous Republic of Crimea.

The Verkhovna Rada of the Autonomous Republic of Crimea adopts decisions and resolutions that are mandatory for execution in the Autonomous Republic of Crimea.

The Council of Ministers of the Autonomous Republic of Crimea is the government of the Autonomous Republic of Crimea. The Head of the Council of Ministers of the Autonomous Republic of Crimea is appointed to office and dismissed from office by the Verkhovna Rada of the Autonomous Republic of Crimea with the consent of the President of Ukraine.

The authority, the procedure for the formation and operation of the Verkhovna Rada of the Autonomous Republic of Crimea and of the Council of Ministers of the Autonomous Republic of Crimea, are determined by the Constitution of Ukraine and the laws of Ukraine, and by normative legal acts of the Verkhovna Rada of the Autonomous Republic of Crimea on issues ascribed to its competence.

In the Autonomous Republic of Crimea, justice is administered by courts that belong to the unified system of courts of Ukraine.

Article 137

The Autonomous Republic of Crimea exercises normative regulation on the following issues:

1) agriculture and forestry;

2) land reclamation and mining;

3) public works, crafts and trades; charity;

4) city construction and housing management;

5) tourism, hotel business, fairs;

6) museums, libraries, theatres, other cultural establishments, historical and cultural preserves;

7) public transportation, roadways, water supply;

8) hunting and fishing;

9) sanitary and hospital services.

For reasons of nonconformity of normative legal acts of the Verkhovna Rada of the Autonomous Republic of Crimea with the Constitution of Ukraine and the laws of Ukraine, the President of Ukraine may suspend these normative legal acts of the Verkhovna Rada of the Autonomous Republic of Crimea with a simultaneous appeal to the Constitutional Court of Ukraine in regard to their constitutionality.

Article 138

The competence of the Autonomous Republic of Crimea comprises:

1) designating elections of deputies to the Verkhovna Rada of the Autonomous Republic of Crimea, approving the composition of the electoral commission of the Autonomous Republic of Crimea;

2) organising and conducting local referendums;

3) managing property that belongs to the Autonomous Republic of Crimea;

4) elaborating, approving and implementing the budget of the Autonomous Republic of Crimea on the basis of the uniform tax and budget policy of Ukraine;

5) elaborating, approving and realising programmes of the Autonomous Republic of Crimea for socio-economic and cultural development, the rational utilisation of nature, and environmental protection in accordance with national programmes;

6) recognising the status of localities as resorts; establishing zones for the sanitary protection of resorts;

7) participating in ensuring the rights and freedoms of citizens, national harmony, the promotion of the protection of legal order and public security;

8) ensuring the operation and development of the state language and national languages and cultures in the Autonomous Republic of Crimea; protection and use of historical monuments;

9) participating in the development and realisation of state programmes for the return of deported peoples;

10) initiating the introduction of a state of emergency and the establishment of zones of an ecological emergency situation in the Autonomous Republic of Crimea or in its particular areas.

Other powers may also be delegated to the Autonomous Republic of Crimea by the laws of Ukraine.

Article 139

The Representative Office of the President of Ukraine, whose status is determined by the law of Ukraine, operates in the Autonomous Republic of Crimea.



Chapter XI

Local Self-Government

Article 140

Local self-government is the right of a territorial community — residents of a village or a voluntary association of residents of several villages into one village community, residents of a settlement, and of a city — to independently resolve issues o f local character within the limits of the Constitution and the laws of Ukraine.

Particular aspects of the exercise of local self-government in the Cities of Kyiv and Sevastopol are determined by special laws of Ukraine.

Local self-government is exercised by a territorial community by the procedure established by law, both directly and through bodies of local self-government: village, settlement and city councils, and their executive bodies.

District and oblast councils are bodies of local self-government that represent the common interests of territorial communities of villages, settlements and cities.

The issue of organisation of the administration of city districts lies within the competence of city councils.

Village, settlement and city councils may permit, upon the initiative of residents, the creation of house, street, block and other bodies of popular self-organisation, and to assign them part of their own competence, finances and property.

Article 141

A village, settlement, city, district and oblast council is composed of deputies elected for a five-year term by residents of a village, settlement, city, district and oblast on the basis of universal, equal and direct suffrage, by secret ballot.

Territorial communities elect for a four-year-term on the basis of universal, equal and direct suffrage, by secret ballot, the head of the village, settlement and city, respectively, who leads the executive body of the council and presides at its meetings.

The status of heads, deputies and executive bodies of a council and their authority, the procedure for their establishment, reorganisation and liquidation, are determined by law.

The chairperson of a district council and the chairperson of an oblast council are elected by the respective council and lead the executive staff of the council.

Article 142

The material and financial basis for local self-government is movable and immovable property, revenues of local budgets, other funds, land, natural resources owned by territorial communities of villages, settlements, cities, city districts, and also objects of their common property that are managed by district and oblast councils.

On the basis of agreement, territorial communities of villages, settlements and cities may join objects of communal property as well as budget funds, to implement joint projects or to jointly finance (maintain) communal enterprises, organisations and establishments, and create appropriate bodies and services for this purpose.

The State participates in the formation of revenues of the budget of local self-government and financially supports local self-government. Expenditures of bodies of local self-government, that arise from the decisions of bodies of state power, are compensated by the state.

Article 143

Territorial communities of a village, settlement and city, directly or through the bodies of local self-government established by them, manage the property that is in communal ownership; approve programmes of socio-economic and cultural development, and control their implementation; approve budgets of the respective administrative and territorial units, and control their implementation; establish local taxes and levies in accordance with the law; ensure the holding of local referendums and the implementation of their results; establish, reorganise and liquidate communal enterprises, organisations and institutions, and also exercise control over their activity; resolve other issues of local importance ascribed to their competence by law.

Oblast and district councils approve programmes for socio-economic and cultural development of the respective oblasts and districts, and control their implementation; approve district and oblast budgets that are formed from the funds of the state budget for their appropriate distribution among territorial communities or for the implementation of joint projects, and from the funds drawn on the basis of agreement from local budgets for the realisation of joint socio-economic and cultural programmes, and control their implementation; resolve other issues ascribed to their competence by law.

Certain powers of bodies of executive power may be assigned by law to bodies of local self-government. The State finances the exercise of these powers from the State Budget of Ukraine in full or through the allocation of certain national taxes to the local budget, by the procedure established by law, transfers the relevant objects of state property to bodies of local self-government.

Bodies of local self-government, on issues of their exercise of powers of bodies of executive power, are under the control of the respective bodies of executive power.

Article 144

Bodies of local self-government, within the limits of authority determined by law, adopt decisions that are mandatory for execution throughout the respective territory.

Decisions of bodies of local self-government, for reasons of nonconformity with the Constitution or the laws of Ukraine, are suspended by the procedure established by law with a simultaneous appeal to a court.

Article 145

The rights of local self-government are protected by judicial procedure.

Article 146

Other issues of the organisation of local self-government, the formation, operation and responsibility of the bodies of local self-government, are determined by law.



Chapter XII

Constitutional Court of Ukraine

Article 147

The Constitutional Court of Ukraine is the sole body of constitutional jurisdiction in Ukraine.

The Constitutional Court of Ukraine decides on issues of conformity of laws and other legal acts with the Constitution of Ukraine and provides the official interpretation of the Constitution of Ukraine and the laws of Ukraine.

Article 148

The Constitutional Court of Ukraine is composed of eighteen judges of the Constitutional Court of Ukraine.

The President of Ukraine, the Verkhovna Rada of Ukraine and the Congress of Judges of Ukraine each appoint six judges to the Constitutional Court of Ukraine.

A citizen of Ukraine who has attained the age of forty on the day of appointment, has a higher legal education and professional experience of no less than ten years, has resided in Ukraine for the last twenty years, and has command of the state language, may be a judge of the Constitutional Court of Ukraine.

A judge of the Constitutional Court of Ukraine is appointed for nine years without the right of appointment to a repeat term.

The Chairperson of the Constitutional Court of Ukraine is elected by secret ballot only for one three-year term at a special plenary meeting of the Constitutional Court of Ukraine from among the judges of the Constitutional Court of Ukraine.

Article 149

Judges of the Constitutional Court of Ukraine are subject to the guarantees of independence and immunity and to the grounds for dismissal from office envisaged by Article 126 of this Constitution, and the requirements concerning incompatibility as determined in Article 127, paragraph two of this Constitution.

Article 150

The authority of the Constitutional Court of Ukraine comprises:

1) deciding on issues of conformity with the Constitution of Ukraine (constitutionality) of the following:

laws and other legal acts of the Verkhovna Rada of Ukraine;

acts of the President of Ukraine;

acts of the Cabinet of Ministers of Ukraine;

legal acts of the Verkhovna Rada of the Autonomous Republic of Crimea.

These issues are considered on the appeals of: the President of Ukraine; no less than forty-five People’s Deputies of Ukraine; the Supreme Court of Ukraine; the Authorised Human Rights Representative of the Verkhovna Rada of Ukraine; the Verkhovna Rada of the Autonomous Republic of Crimea;

2) the official interpretation of the Constitution of Ukraine and the laws of Ukraine;

On issues envisaged by this Article, the Constitutional Court of Ukraine adopts decisions that are mandatory for execution throughout the territory of Ukraine, that are final and shall not be appealed.

Article 151

The Constitutional Court of Ukraine, on the appeal of the President of Ukraine or the Cabinet of Ministers of Ukraine, provides opinions on the conformity with the Constitution of Ukraine of international treaties of Ukraine that are in force, or the international treaties submitted to the Verkhovna Rada of Ukraine for granting agreement on their binding nature.

On the appeal of the Verkhovna Rada of Ukraine, the Constitutional Court of Ukraine provides an opinion on the observance of the constitutional procedure of investigation and consideration of the case of removing the President of Ukraine from office b y the procedure of impeachment.

Article 152

Laws and other legal acts, by the decision of the Constitutional Court of Ukraine, are deemed to be unconstitutional, in whole or in part, in the event that they do not conform to the Constitution of Ukraine, or if there was a violation of the procedure established by the Constitution of Ukraine for their review, adoption or their entry into force.

Laws and other legal acts, or their separate provisions, that are deemed to be unconstitutional, lose legal force from the day the Constitutional Court of Ukraine adopts the decision on their unconstitutionality.

Material or moral damages, inflicted on physical and legal persons by the acts or actions deemed to be unconstitutional, are compensated by the State by the procedure established by law.

Article 153

The procedure for the organisation and operation of the Constitutional Court of Ukraine, and the procedure for its review of cases, are determined by law.



Chapter XIII

Introducing Amendments to the Constitution of Ukraine

Article 154

A draft law on introducing amendments to the Constitution of Ukraine may be submitted to the Verkhovna Rada of Ukraine by the President of Ukraine, or by no fewer People’s Deputies of Ukraine than one-third of the constitutional composition of the Verkhovna Rada of Ukraine.

Article 155

A draft law on introducing amendments to the Constitution of Ukraine, with the exception of Chapter I — “General Principles,” Chapter III — “Elections. Referendum,” and Chapter XIII — “Introducing Amendments to the Constitution of Ukraine,” previously adopted by the majority of the constitutional composition of the Verkhovna Rada of Ukraine, is deemed to be adopted, if at the next regular session of the Verkhovna Rada of Ukraine, no less than two-thirds of the constitutional composition of the Verkhovna Rada of Ukraine have voted in favour thereof.

Article 156

A draft law on introducing amendments to Chapter I — “General Principles,” Chapter III — “Elections. Referendum,” and Chapter XIII — “Introducing Amendments to the Constitution of Ukraine,” is submitted to the Verkhovna Rada of Ukraine by the President of Ukraine, or by no less than two-thirds of the constitutional composition of the Verkhovna Rada of Ukraine, and on the condition that it is adopted by no less than two-thirds of the constitutional composition of the Verkhovna Rada of Ukraine, and is approved by an All-Ukrainian referendum designated by the President of Ukraine.

The repeat submission of a draft law on introducing amendments to Chapters I, III and XIII of this Constitution on one and the same issue is possible only to the Verkhovna Rada of Ukraine of the next convocation.

Article 157

The Constitution of Ukraine shall not be amended, if the amendments foresee the abolition or restriction of human and citizens’ rights and freedoms, or if they are oriented toward the liquidation of the independence or violation of the territorial indivisibility of Ukraine.

The Constitution of Ukraine shall not be amended in conditions of martial law or a state of emergency.

Article 158

The draft law on introducing amendments to the Constitution of Ukraine, considered by the Verkhovna Rada of Ukraine and not adopted, may be submitted to the Verkhovna Rada of Ukraine no sooner than one year from the day of the adoption of the decision on this draft law.

Within the term of its authority, the Verkhovna Rada of Ukraine shall not amend twice the same provisions of the Constitution.

Article 159

A draft law on introducing amendments to the Constitution of Ukraine is considered by the Verkhovna Rada of Ukraine upon the availability of an opinion of the Constitutional Court of Ukraine on the conformity of the draft law with the requirements of Articles 157 and 158 of this Constitution.



Chapter XIV

Final Provisions

Article 160

The Constitution of Ukraine enters into force from the day of its adoption.

Article 161

The day of adoption of the Constitution of Ukraine is a national holiday — the Day of the Constitution of Ukraine.



Chapter XV

Transitional Provisions

1. Laws and other normative acts, adopted prior to this Constitution entering into force, are in force in the part that does not contradict the Constitution of Ukraine.

2. After the adoption of the Constitution of Ukraine, the Verkhovna Rada of Ukraine exercises the authority envisaged by this Constitution.

Regular elections to the Verkhovna Rada of Ukraine shall be held in March 1998.

3. Regular elections of the President of Ukraine shall be held on the last Sunday of October 1999.

4. The President of Ukraine, within three years after the Constitution of Ukraine enters into force, has the right to issue decrees approved by the Cabinet of Ministers of Ukraine and signed by the Prime-Minister of Ukraine on economic issues not regulated by laws, with simultaneous submission of the respective draft law to the Verkhovna Rada of Ukraine, by the procedure established by Article 93 of this Constitution.

Such a decree of the President of Ukraine takes effect, if within thirty calendar days from the day of submission of the draft law (except the days between sessions), the Verkhovna Rada of Ukraine does not adopt the law or does not reject the submitted draft law by the majority of its constitutional composition, and is effective until a law adopted by the Verkhovna Rada of Ukraine on these issues enters into force.

5. The Cabinet of Ministers of Ukraine is formed in accordance with this Constitution within three months after its entry into force.

6. The Constitutional Court of Ukraine is formed in accordance with this Constitution, within three months after its entry into force. Prior to the creation of the Constitutional Court of Ukraine, the interpretation of laws is performed by the Verkhovna Rada of Ukraine.

7. Heads of local state administrations, upon entry of this Constitution into force, acquire the status of heads of local state administrations in accordance with Article 118 of this Constitution, and after the election of chairpersons of the respective councils, tender resignations from office of the chairpersons of these councils.

8. Village, settlement and city councils and the chairpersons of these councils, upon entry of this Constitution of Ukraine into force, exercise the authority as determined by it, until the election of the new composition of these councils in March 1998.

District and oblast councils, elected prior to the entry of this Constitution into force, exercise the authority as determined by it, until the formation of the new composition of these councils in accordance with the Constitution of Ukraine.

City district councils and their chairpersons, upon entry of this Constitution into force, exercise their authority in accordance with the law.

9. The procuracy continues to exercise, in accordance with the laws in force, the function of supervision over the observance and application of laws and the function of preliminary investigation, until the laws regulating the activity of state bodies in regard to the control over the observance of laws are put into force, and until the system of pre-trial investigation is formed and the laws regulating its operation are put into effect.

10. Prior to the adoption of laws determining the particular aspects of the exercise of executive power in the Cities of Kyiv and Sevastopol in accordance with Article 118 of this Constitution, the executive power in these cities is exercised by the respective city administrations.

11. Article 99, paragraph one of this Constitution shall enter into force after the introduction of the national monetary unit — the hryvnia.

12. The Supreme Court of Ukraine and the High Court of Arbitration of Ukraine exercise their authority in accordance with the legislation of Ukraine that is in force, until the formation in Ukraine of a system of courts of general jurisdiction, in accordance with Article 125 of this Constitution, but for no more than five years.

Judges of all courts in Ukraine, elected or appointed prior to the day of entry of this Constitution into force, continue to exercise their authority in accordance with the legislation in force, until the expiration of the term for which they were elected or appointed.

Judges whose authority has terminated on the day this Constitution enters into force, continue to exercise their authority for the period of one year.

13. The current procedure for arrest, holding in custody and detention of persons suspected of committing a crime, and also for the examination and search of a dwelling place or other possessions of a person, is preserved for five years after this Constitution enters into force.

14. The use of existing military bases on the territory of Ukraine for the temporary stationing of foreign military formations is possible on the terms of lease, by the procedure determined by the international treaties of Ukraine ratified by the Verkhovna Rada of Ukraine.

——————————————————————————–

[*] Unofficial translation.

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AUR#699 May 24 Politics Strains Economic Performance; WTO Protocol With Australia; Messy Side Of Democracy, What To Do With Yulia?; Tatar Rally In Crimea

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ACTION UKRAINE REPORT – AUR           
                 An International Newsletter, The Latest, Up-To-Date
                     In-Depth Ukrainian News, Analysis and Commentary

                      Ukrainian History, Culture, Arts, Business, Religion,
         Sports, Government, and Politics, in Ukraine and Around the World       

                        
ACTION UKRAINE REPORT – AUR – Number 699
Mr. E. Morgan Williams, Publisher and Editor  
WASHINGTON, D.C., WEDNESDAY, MAY 24, 2006 
             -——-  INDEX OF ARTICLES  ——–
           Clicking on the title of any article takes you directly to the article.               
  Return to the Index by clicking on Return to Index at the end of each article
1.       UKRAINE POLITICS STRAIN ECONOMIC PERFORMANCE
Emily Barrett, Dow Jones Newswires, London, UK, Sunday, May 21, 2006
 

2UKRAINE: HIGH POLITICAL DRAMA HITS ECONOMIC ACTIVITY
    Story of political upheaval, geopolitical rivalry & uncertainty for investors
By Tom Warner in Kiev, Financial Times, London, UK, Fri, May 19, 2006

3EBRD: GROWTH TO SLOW IN EASTERN EUROPE AS FDI FALLS
      “In Ukraine…a sizable hryvnia correction looks likely later this year…”
Paul Hannon, Dow Jones Newswires, London, UK, Sun, May 21, 2006

4DEVELOPMENT BANK TO CITE CENTRAL EUROPE TRIUMPH
   New EBRD Strategy to focus investment in Russia, Ukraine and 17 other
     countries in Southeastern Europe, Caucasus & Central Asia after 2010
By Paul Hannon, Dow Jones Newswires 
New York, New York, Friday, May 19, 2006

5.   EU TRADE DEFICIT WIDENS WITH RUSSIA DUE TO ENERGY
Anne Jolis, Dow Jones Newswires, Brussels, Belgium May 24, 2006 

6.         BUSINESSMAN JOURNALIST SHOT DEAD IN UKRAINE
UNIAN news agency, Kiev, in Ukrainian 0939 gmt 24 May 06
BBC Monitoring Service, United Kingdom, Wed, May 24, 2006

7.       UKRAINE DOES NOT ALLOW IMPORT OF POLISH MEAT 
Polish News Bulletin, Warsaw, Poland, Monday, May 22, 2006

8. IBERIA MOTOR CO INVESTS IN ASSEMBLY PLANT IN UKRAINE 

Polish News Bulletin, Warsaw, Poland, Thu, May 18, 2006

9POLAND: RUSSIA USES ENERGY RESERVES FOR BLACKMAIL 
Dow Jones Newswires, London, UK, Friday, May 19, 2006

10.                       SO LONG, WASHINGTON (FOR NOW)
By Anne Applebaum, OP-ED Columnist, The Washington Post
Washington, D.C., Wednesday, May 24, 2006; Page A23

11.        UKRAINE SIGNS WTO PROTOCOL WITH AUSTRALIA
     Document marked the end of one of the longest bilateral talks processes
UNIAN news agency, Kiev, in Ukrainian 0823 gmt 20 May 06
BBC Monitoring Service, United Kingdom, Saturday, May 20, 2006

12UKRAINE’S CHANCES TO FIND ALTERNATIVES TO GAZPROM 

Vedomosti , Moscow, Russia, in Russian 10 May 06
BBC Monitoring Service, United Kingdom; Thu, May 18, 2006

13RUSSIA REPORTED TO PAY MORE FOR KAZAKH GAS, PLANS
                   TO RAISE COST OF GAS SOLD TO UKRAINE

Alex Nicholson, Moscow, Russia, AP Worldstream, Mon, May 22, 2006

14UKRAINE PM SURE RUSSIA WON’T UP GAS PRICE THIS YEAR
                 Ukraine is one of the biggest gas consumers in Europe.
Associated Press (AP), Kiev, Ukraine, Tue, May 23, 2006

15 UKRAINE SEEKS G8 TALKS ON GAS SUPPLY FROM RUSSIA
By Stefan Wagstyl in London and Tom Warner in Kiev
Financial Times, London, UK, Tue, May 23 2006

16.   YUSHCHENKO TELLS SUMMIT OF UKRAINE’S INTEREST
                      IN NEW OIL TRANSPORT PROSPECTS 
Interfax-Ukraine news agency, Kiev, in Russian 0830 gmt 23 May 06
BBC Monitoring Service, United Kingdom; Tuesday, 23, 2006

17PARSING CHENEY’S ‘HOLD ON THERE, VLADIMIR’ SPEECH’
           Real news of U.S.-Russian relations is the reversal of fortunes
COMMENTARY: By Jim Hoagland, The Washington Post
The Wall Street Journal, NY, NY, Monday, May 22, 2006

18.   RUSSIA REBUFFS EUROPEAN UNION ON NATURAL GAS
          Kremlin Resists Calls To Liberalize Sector, Sign Energy Charter
By Guy Chazan, The Wall Street Journal
New York, NY, Wednesday, May 24, 2006; Page A6

19.                              KREMLIN CAPITALISM:
         Russian Car Maker Comes Under Sway Of Old Pal of Putin
Tight Circle in Government Is Drawing Key Industries Into State’s Orbit
                                     Frictions With Partner GM
By Guy Chazan, The Wall Street Journal
New York, NY, Friday, May 19, 2006; Page A1

20.            RUSSIA: THE FOLLY OF RENATIONALIZATION
ANALYSIS & COMMENTARY: By Anders Aslund, Moscow Times
Moscow, Russia, Tuesday, May 23, 2006. Issue 3416. Page 10.

 
21.     UKRAINE DEALS WITH MESSY SIDE OF DEMOCRACY
                                        What to do with Yulia?
ANALYSIS:
By Mara D. Bellaby, Associated Press Online
Kyiv, Ukraine, Sunday, May 21, 2006
 
22.   PARTY OF REGIONS NAMES IT’S PARLIAMENT LEADERS
Interfax-Ukraine news agency, Kiev, in Russian 1153 gmt 17 May 06
BBC Monitoring Service, United Kingdom, Wed, May 17, 2006
 
          ANNIVERSARY OF THEIR DEPORTATION BY STALIN
Black Sea TV, Simferopol, in Russian 1600 gmt 18 May 06
BBC Monitoring Service, United Kingdom, Thu, May 18, 2006
 
24.                EUROVISION SONG CONTEST: OH, LORDI
          Ukrainian voters vote for Russia, Russians vote for a Ukrainian
REVIEW & OUTLOOK: The Wall Street Journal
New York, New York, Tuesday, May 23, 2006
 
                                       ENERGY PRICE HIKES
Associated Press (AP), Kiev, Ukraine, May 24, 2006
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1
. UKRAINE POLITICS STRAIN ECONOMIC PERFORMANCE

Emily Barrett, Dow Jones Newswires, London, UK, Sunday, May 21, 2006

LONDON — The Ukrainian economy minister’s speech began with a rough
inflation projection and notice of his departure from the country’s messy
political scene.

In his address to a packed hall at the European Bank for Reconstruction and
Development’s annual meeting, Arseniy Yatsenyuk typified the bewildering
state of Ukraine’s political climate.

Yatsenyuk told his audience of foreign investors that he had just discovered
that he would probably not be joining the new government, and was therefore
not in a good position to outline its likely plans. “I’ve just found out,”
he said. “I’m not sure I can tell you the truth about the future of this
government.”

He then went on to list the “internal challenges” faced by Ukraine’s new
government which, two months after national elections, still hasn’t been
decided.

A revival of the tattered Orange Revolution team looks barely more likely
than a coalition between the parties of President Viktor Yushchenko and the
opposition led by Viktor Yanukovich.

The political strain has taken its toll the local currency. The deputy
governor of the National Bank of Ukraine Sunday said that defending the
hryvnia’s peg against the dollar at UAH5.02 had cost $1.7 billion in the
last quarter.

Analysts at the Institute of International Finance predict a “sizable
hryvnia correction” later this year, “due to a growing current account
shortfall and heavy outflows of residential capital.”

They say a drop in demand for steel and sharp increase in the cost of
natural gas from Russia whittled Ukraine’s current account surplus from
10.5% of gross domestic product in 2004 to 3% last year, and estimate this
was transformed into a deficit of 5% in the three months to March.

But NBU deputy Governor Oleksandr Savchenko said foreign direct

investment inflows, around $824 million in the first quarter, are helping
support the local currency.

“There are some factors that push the hyrvnia to depreciate, but there are
more fundamental factors that bring it to appreciate,” Savchenko said.

Big-ticket privatisations – including the $5 billion resale last year of the
country’s biggest steel mill, Krivorizhstal, to steel giant Mittal – have
also boosted the country’s coffers.

Savchenko also reiterated the bank’s intention to cut the dollar’s share in
its currency reserves from 40% now and raise the euro’s share from 30%

while also increasing the shares of other currencies.

He also said the bank planned to reduce intervention in the foreign exchange
market over the next year, moving closer to inflation targeting as its
central remit. The NBU expects the inflation rate to stand at 10% this year.

“We’re going to make the exchange rate more flexible, we’re going to leave
the forex market and intervene only in exceptional cases,” the deputy said.

The deputy governor pointed out that international investment banks widely
regarded the hryvnia as one of the most undervalued currencies in the world.
He said the central bank was looking to adjust its hyrvnia peg to UAH5
against the dollar, within a flexible 3%-4% trading band.

In the meantime, Savchenko said the country needed a deeper government

bond market. “We need to develop our markets – we have a shortage of state
securities,” he said.

But that will be difficult to achieve for the time being, as political
uncertainties continue to exert unwelcome pressure on yields. The cost of
borrowing on international markets is still rising.

In his address, Finance Ministry official Vitaly Lisovenko praised the
record-low 4.95% interest rate Ukraine secured on last year’s 10-year
euro-denominated bond. “It looks like this record won’t be repeated for
another few years, unfortunately,” he said.             -30-
———————————————————————————————–
-Emily Barrett, Dow Jones Newswires, 
emily.barrett@dowjones.com

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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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2. UKRAINE: HIGH POLITICAL DRAMA HITS ECONOMIC ACTIVITY
    Story of political upheaval, geopolitical rivalry & uncertainty for investors

By Tom Warner in Kiev, Financial Times, London, UK, Fri, May 19 2006

For almost two years, Ukraine has lived an intensely dramatic story of
political upheaval, geopolitical rivalry and uncertainty for investors. And
more of the same lies ahead.

Having been through the Orange Revolution in late 2004, the acrimonious
collapse of the first post-revolution government in 2005, a natural gas
supply war with Russia at the beginning of this year, and an inconclusive
parliamentary vote in March, Ukraine faces a potentially chaotic showdown in
parliament over who will lead the new government and which direction the
country will take in the years ahead.

The outcome is still not clear. The five parliamentary blocs and parties had
held three meetings by May 11 but failed to agree even on a date when
parliament will convene, which the constitution says must happen by May 26.

As Viktor Yushchenko, the president (pictured above), said in a local
newspaper interview, “I don’t have any ready decision on a candidate for
premier. Everyone has a chance.”

As the political talks stall, the economy is increasingly stagnant. Gross
domestic product growth this year is forecast to roughly match last year’s
rate of 2.6 per cent, down from 12.1 per cent in 2004 when world prices for
steel, the main export, were at their peak. Increased gas prices have pushed
the trade balance into deficit for the first time since the 1990s.

The best economic news in recent months has been a slowing of inflation,
which is running at an annualised rate of 7 per cent after years of
double-digit rises.

Interest from foreign investors remains high although the flow of deals has
slowed as investors wait for the government to be formed. Jorge Zukoski,
head of the local American Chamber of Commerce, said many investors were
impressed by the fairness of the March elections and hardly seem to be
bothered by the lack of clarity.

“There’s a feeling that Ukraine has turned the corner and is going to
continue moving in the right direction. The only question is how quickly,”
Mr Zukoski said.

Deal-making in the banking sector is continuing at full speed, with several
large European banks hurrying to catch up with their rivals Raiffeisen,
Banca Intesa, BNP Paribas and Credit Agricole, all of which have bought a
Ukrainian bank in the past year.

However, many investors have been surprised and disappointed by the rapid
political decline of Mr Yushchenko, a pro-western liberal who created high
hopes when he emerged victorious, seemingly with the country in his hand,
from the Orange Revolution.

After a stunning defeat in the March election, in which his Our Ukraine bloc
came third, Mr Yushchenko is now struggling to stay in the game. A revised
constitution dramatically reduced his powers in favour of parliament, which
will control the new cabinet.

The leading candidate for prime minister is Yulia Tymoshenko, a charismatic,
sharp-tongued and often populist former prime minister who led the first
post-Orange Revolution government until Mr Yushchenko sacked her last
September, using his powers under the old constitution.

Her bloc and the closely allied Socialists have a combined total of 162 of
parliament’s 450 seats, while Our Ukraine, which has tentatively declared
its intention to join them in a coalition, has 81 seats.

The Regions party, led by Viktor Yanukovich, a former prime minister whose
presidential ambitions were foiled by the Orange Revolution, has 186 seats.
The Regions favours closer cooperation with Russia and more support for
domestic big business. The Communists have 21 seats.

Both Mr Yushchenko and Ms Tymoshenko support a western-oriented foreign
policy and a legislative reform program geared at rapid entry to the World
Trade Organisation and eventual membership in the European Union.

Although Ms Tymoshenko presents herself as centre-left and Our Ukraine
presents itself as centre-right, in practice they have both favoured
generous social spending backed by stricter tax collection and
privatisation.

However, Mr Yushchenko and Ms Tymoshenko have consistently quarrelled

over details, particularly when business interests are at stake. Their most
important disagreement is over a gas supply deal that Mr Yushchenko’s
government signed with Russia in January and the exclusive supply role it
gave to RosUkrEnergo, a Swiss-registered company owned half by Russia’s
Gazprom and half by two Ukrainian businessmen.

Ms Tymoshenko has promised to cancel the deal, which Mr Yushchenko says is
unfeasible. Russia has warned that if the agreement is annulled unilaterally
it could again cut gas supplies to Ukraine, as it did in January, or sharply
increase prices. Russia’s recent ban on imports of Georgian and Moldovan
wine has also increased worries in Ukraine, which sends 22 per cent of its
exports to Russia.

The US is pushing to get Ukraine officially started on the path towards Nato
membership by November, and Russia has warned it would respond negatively.
Mr Yushchenko is keen to move quickly on Nato, while Ms Tymoshenko and the
Socialists are cautious.

Another problem for Ms Tymoshenko is that she has made many enemies within
Our Ukraine, notably the current prime minister, Yuri Yekhanurov, and Petro
Poroshenko, a leading businessman.

Ms Tymoshenko’s bloc has warned that if her bid for the premiership fails it
will not back any other candidate. That could lead Our Ukraine to switch
partners and team up instead with The Regions.

Opinions vary widely about what such a coalition would do, with some
analysts seeing a positive scenario in which domestic investment would pick
up and pressure from Russia would drop. Others, however, see a slide back
towards the corrupt authoritarianism that prevailed before the Orange
Revolution.


If both coalition options fail, Mr Yushchenko might be forced to call early
elections – but he would be very reluctant, as opinion polls show that Our
Ukraine’s support has fallen further since March. Talks could potentially
stretch into autumn.                      -30-          
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LINK: http://news.ft.com/cms/s/3bacd080-e749-11da-9046-0000779e2340.html
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3. EBRD: GROWTH TO SLOW IN EASTERN EUROPE AS FDI FALLS
      “In Ukraine…a sizable hryvnia correction looks likely later this year…”

Paul Hannon, Dow Jones Newswires, London, UK, Sun, May 21, 2006

LONDON — Economic growth in the countries of eastern Europe and the former
Soviet Union will slow over the next five years as inflows of foreign
investment level off, the European Bank for Reconstruction and Development
said Sunday.

In its twice-yearly Transition Report, the development bank said the
economies of the 27 countries in which it invests will grow on average 5.3%
this year, marking a slowdown from the 5.6% rate of growth recorded in 2005
and the 6.7% rate of growth recorded in 2004.

But for the five years from 2007, the EBRD said annual growth will average
4.5% as inflows of foreign investment, which in recent years have been high
by historic standards, tail off. Foreign direct investment totaled $55.6
billion in 2005, more than double the $25.6 billion recorded in 2000. The
EBRD expects FDI to fall to $44.7 billion in 2006.

“In the region as a whole we think foreign direct investment will level off
and the signs we are seeing right now of a cooling of interest in emerging
markets will contribute to that,” said Erik Berglof, the EBRD’s chief
economist.

The EBRD warned that growth may slow even further if there were to be a
crisis of confidence in emerging markets. “Any loss of confidence in
emerging markets would have an impact in the region and could cause a
significant drop in growth and FDI (foreign direct investment),” the EBRD
said.

While emerging markets around the globe have benefitted in recent years from
strong inflows of foreign investment, rising interest rates in the U.S., the
euro zone and the prospect of higher rates in Japan have in recent weeks led
to an outflow of funds from some.

However, in a separate report also published Sunday, the Institute for
International Finance – a Washington, D.C. based group that counts many

of the world’s largest banks among its membership – forecast that foreign
investment in the region’s equity markets would rise over the next two
years, to $14.7 billion this year and $9 billion in 2007 from $4 billion in
2005.

The IIF expects investment in the region’s equity markets to rise despite a
loss of momentum in the process of economic reform.
“Reform momentum has diminished across the region as a result of recent or
forthcoming elections and the rising appeal of populist parties opposed to
market-oriented reforms and foreign investment,” the IIF said.

Inflows of FDI have been particularly important as a driver of growth in the
eight central European countries that joined the European Union in 2004. FDI
surged to $22.7 billion in that year from $8.2 billion in 2003, and rose
again to $28 billion last year.

Berglof said one of the challenges faced by the eight new members is to
generate growth in those sectors of the economy that aren’t controlled by
foreign investors. “A lot of the growth comes from foreign-controlled
enterprises,” he said. “The big challenge is to get the rest of the economy
to catch up.”

The EBRD said the large budget deficits being run by a number of governments
in the E.U.8 could make them vulnerable to a reversal of investment flows.

“Many countries…face continuing difficulties in balancing public spending
with government revenues,” the EBRD said. “This reflects the relatively high
level of social expenditures, substantial enterprise subsidies, and large
infrastructure investments. The larger…countries especially need to
tighten their fiscal policies.”

The Czech Republic, Hungary, Slovakia and Poland have all said they want to
join the euro zone by the end of the decade or shortly thereafter. But some
are running budget deficits that exceed the 3% of gross domestic product
limit set as one of the euro-zone’s entry criteria.

In the short term, the EBRD expects their budget deficits to widen, taking
them further away from adopting the euro. In 2006, it expects Hungary’s
budget deficit to widen to 6.2% of GDP from 6.1%, while it expects the Czech
Republic’s budget deficit to widen to 3.9% of GDP from 3.2%, Poland’s to
widen to 3.2% from 2.9% and Slovakia’s to widen to 3.5% from 3.0%.

“With voters turning away from advocates of genuine fiscal reform,
governments have shied away from many of the measures needed to scale back
social spending and solidify fiscal adjustment,” the IIF said. “Slovakia
alone has enacted reforms bold enough to bring within reach a medium-term
deficit path complying with the Maastricht fiscal criteria.”

Despite the continued high price of oil and gas, the EBRD expects the
Russian economy to slow this year, growing 5.5% as against 6.4% in 2005

and 7.1% in 2004.

“There has been a marked slowdown in the natural resources sector due to
capacity constraints and ineffective government policies,” the EBRD said.

The development bank expects other natural-resource rich parts of the former
Soviet Union to post some of the highest economic growth rates in the world
this year. Azerbaijan topped the world growth league in 2005 with an
expansion in its GDP of 26.4%, and the EBRD expects 2006 to be only a little
weaker, with GDP growing 25.0%.

But it also forecasts that Kazakhstan’s economy will grow 8.5%, marking a
slowdown from 9.4% in 2005, and that Turkmenistan’s economy will grow

10.6%, a pickup from 9.6% in 2005.

As a whole, however, the EBRD expects growth in the former Soviet Union
excluding the Baltic States to slow significantly to 5.7% in 2006 from 6.6%
in 2005 and 8.0% in 2004.

“The rate of growth…is declining sharply and is likely to fall further in
2006, reflecting the limited investment to date in productive capacity,” the
EBRD said.

By contrast, the EBRD expects growth in southeastern Europe to pick up

this year to an average rate of 4.8% from 4.5% in 2005.
 
It said the region is benefiting from improved trade and investment links
with the E.U., led by Romania, where growth is forecast to pick up to 5%
from 4% last year.

However, the EBRD said the region faces a number of risks, largely of a
political nature. “In the western Balkans, significant political risks
persist due to several unresolved issues – the future of Kosovo, the
possible break up of…Serbia and Montenegro,” the development bank said.

Despite the cooling of investor appetite for emerging markets securities in
recent weeks, the IIF said it doesn’t expect to see widespread depreciations
of local currencies in the region, the main exception being Ukraine, where
the central bank has been intervening heavily in support of the hryvnia.

“In Ukraine…a sizable hryvnia correction looks likely later this year due
to a growing current account shortfall and heavy outflows of resident
capital,” the IIF said.                            -30-
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Paul Hannon, Dow Jones Newswires, paul.hannon@dowjones.com
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4.  DEVELOPMENT BANK TO CITE CENTRAL EUROPE TRIUMPH
   New EBRD Strategy to focus investment in Russia, Ukraine and 17 other
     countries in Southeastern Europe, Caucasus & Central Asia after 2010

By Paul Hannon, Dow Jones Newswires 
New York, New York, Friday, May 19, 2006

LONDON – Development banks rarely have the opportunity to declare victory
and move on, but that is exactly what the European Bank for Reconstruction
and Development will do at its annual meeting Sunday and Monday in London.

The 60 government shareholders of EBRD, established in 1991 to help the
countries of Eastern Europe and the former Soviet Union make the transition
to market economies, are set to approve a new five-year strategy for the
bank under which it will by 2010 “graduate” the eight countries in Central
Europe that joined the European Union in May 2004.

That will leave the bank investing in Russia, Ukraine and 17 other countries
in Southeastern Europe, the Caucasus and Central Asia.

Approval of the new strategy will signal that the 60 governments believe all
of the EU8 — the Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Poland, Slovakia and Slovenia — will have completed the transition by the
end of this decade.

For EBRD President Jean Lemierre, the 2010 deadline represents a triumph

not just for the eight countries, but also for the bank. “It’s important for a
public institution to have a clear way to measure its raison d’être and its
mission,” Mr. Lemierre said.

The new strategy is a compromise between the U.S., which had been pressing
the EBRD to set a deadline for withdrawal from the EU8 as early as next
year, and the European Union, which had argued that graduation would occur
naturally as private-sector banks and investors become increasingly willing
to lend at cheaper rates than those charged by the EBRD.

The U.S., the EBRD’s single-largest shareholder, will get its deadline. The
EU will get a few more years of EBRD investment in its newest members.

Since the eight soon-to-be graduates joined the EU, it has become
increasingly clear that most of the EBRD’s potential clients in those
countries have or will soon have access to private-sector sources of
finance. Indeed, large Western European banks such as Unicredit SpA of
Italy now run much of the lending in the new EU member states through
subsidiaries. The area’s domestic banks remain coveted assets by
established financial institutions.

That isn’t to say that the changes are complete. There is still a long way
to go before the countries achieve convergence with the older EU members,
particularly when it comes to average incomes.

In 2003, the most recent year for which comparable figures are available,
gross domestic product per capita in Germany was Euro26,217 ($33,427). In
the Czech Republic, it was Euro7,867, in Poland it was Euro5,011 and in
Hungary it was Euro7,260.

But narrowing that gap isn’t the EBRD’s core task, and the geographical
focus of its activities will shift south and east.

In some of the countries where the EBRD will continue to operate, the
transition process will likely follow the same path as in the EU8, aided by
the desire of governments to change their economies and political systems

in order to join the EU.

Without the promise of membership, it is likely that the transition in the
eight new member countries would have taken longer to complete. Bulgaria

and Romania probably will join the bloc next, followed by Croatia. Other
countries in the Balkans also harbor realistic ambitions to join.

“The main lesson is the extraordinary power of the EU process,” Mr. Lemierre
said. “In some of the countries, the story is quite the same as in Central
Europe with a gap of a few years. It is EU-driven.”

However, in Russia, Central Asia and the Caucasus, EU membership isn’t on
offer. Russia will be the main beneficiary of the transfer of resources that
had been devoted to the eight graduates.

Under the new strategy, the EBRD will continue to invest roughly the same
mount of money annually that it does now, about Euro4 billion. This year, it
expects 15% of that to go to the EU8, 31% to Russia and 54% to all other
countries. By 2010 it expects to make 41% of its new investments in Russia,
6% in the EU8 plus Croatia, and 53% in all other countries.

The increased focus on Russia comes at a time when the country is enjoying
a surge in revenue from oil and gas exports as a result of the rise in
prices since 2002. The Central Bank of Russia’s foreign-exchange reserves

rose to a record $236.1 billion on May 12, up 61% from $147.1 billion at the
end of May 2005.

Mr. Lemierre said Russia needs the EBRD’s help to diversify its economy away
from oil and gas by supporting private-sector companies operating in other
sectors, and tackle weaknesses in its infrastructure that could hamper
future growth.                                      -30-
————————————————————————————————-
Leos Rousek in Prague contributed to this article. Write to Paul Hannon

at paul.hannon@dowjones.com.a
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5.   EU TRADE DEFICIT WIDENS WITH RUSSIA DUE TO ENERGY

Anne Jolis, Dow Jones Newswires, Brussels, Belgium May 24, 2006 

BRUSSELS — Fueled by oil and gas imports, the European Union’s trade
deficit has more than tripled since 1999, rising to EUR50.3 billion last
year, statistics published by Eurostat Wednesday show.

The deficit data comes a day before E.U. leaders meet Thursday with Russian
President Vladimir Putin at a summit which looks set to underline
differences over energy.

Energy has made Russia the E.U.’s third most important trading partner after
the U.S. and China. Europe’s dependence on Russian energy was highlighted
this past winter, when Moscow cut gas supplies to Ukraine, which curtailed
deliveries to the E.U.

According to the Eurostat figures, energy accounted for more than two-thirds
of Russia’s exports to the E.U. by value, or EUR70.6 billion last year, up
from EUR17.6 billion in 1999. Russia is the largest single supplier of
natural gas to the E.U., providing one-quarter of Europe’s gas. It is also
the second-biggest source of E.U. oil.

Europe is selling more to an expanding Russia. Its exports grew to EUR56.4
billion from EUR16.6 billion on Russian demand for European machinery and
vehicles. Russia’s largest trading partner is Germany, which exported
EUR17.2 billion to Russia in 2005. Italy came next, exporting EUR6.1
billion.

Germany and Italy were also Russia’s largest importers in 2005, with Russia
exporting EUR20.7 billion to Germany and EUR11.8 billion to Italy. These two
countries traditionally have been the most friendly to Russia. Germany has
angered its neighbor Poland by agreeing to build a new gas pipeline under
the Baltic Sea, which would avoid passing through Poland.

At the Thursday and Friday summit, the E.U. wants Russia to provide
safeguards for foreign investors and allow access to Russian energy
infrastructure, including gas pipelines. As energy prices continue to soar,
Russian President Vladimir Putin has resisted any action that would lessen
state-run OAO Gazprom’s (GASPBEX.RS) monopoly over energy exports.
—————————————————————————————————
By Anne Jolis, Dow Jones Newswires; anne.jolis@dowjones.com

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6.  BUSINESSMAN JOURNALIST SHOT DEAD IN UKRAINE

UNIAN news agency, Kiev, in Ukrainian 0939 gmt 24 May 06
BBC Monitoring Service, United Kingdom, Wed, May 24, 2006

BILA TSERKVA – Businessman Vadym Hudyk was killed in central Bila

Tserkva today. He was killed outside the Kavyarnya cafe, which is located
in the town’s central Freedom Square. The businessman was killed with two
shots from a pistol without a silencer in his own car.

Bila Tserkva archive employees, who went out of their office after hearing
gunshots, said they had seen a young man dressed in a tracksuit near the
car. The police and prosecutors have arrived at the scene.

Hudyk was a prominent businessman in the city. He was also known to have
authored expose articles for the Ukrayina Kriminalnaya website about a
former Bila Tserkva prosecutor, Oleksandr Lupeyko.           -30-
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7.  UKRAINE DOES NOT ALLOW IMPORT OF POLISH MEAT 

Polish News Bulletin, Warsaw, Poland, Monday, May 22, 2006

WARSAW – Deputy PM and Agriculture Minister Andrzej Lepper believes

that there is no chance of Polish meat exports to Ukraine being resumed on
20 May. Lepper said that Ukraine has not agreed to reopen its market.

Talks on the issue run by a Polish delegation in Kiev have not brought any
results. “I met the Ukrainian agriculture minister at our ministry. There is
the will to lift the ban, but veterinary conditions must be met,” said
Lepper.

The situation concerning the Russian market, which is closed to Polish food,
is even more complicated. Referring to the Russian case, Lepper declared he
was ready to go to Moscow personally to discuss the issue.

“There is a political aspect, but Poland must stop regarding Ukraine and
Russia as countries which will accept goods of lower quality. Their demands
are sometimes higher than the European Union’s,” said Lepper. He added that
Poland must stick to these demands “because we are striving for their
markets, not they for ours.”                     -30-

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========================================================
8. IBERIA MOTOR CO INVESTS IN ASSEMBLY PLANT IN UKRAINE 
Polish News Bulletin, Warsaw, Poland, Thu, May 18, 2006

WARSAW – Ukraine’s Eurocar, in which Iberia Motor Company holds a

10-percent stake, has opened a new $51m division of its assembly plant in
Salomonovo (near Uzgorod), Ukraine, allowing a 45-percent output increase.
The new plant will assemble Skodas, while the old one will specialise in
Volkswagens and Seats (in the summer).

By 2011, Eurocar intends to invest as much as $149m in the construction of a
paint shop (to be completed by 2008) and increasing production output to
120,000 cars per year by 2009, as was disclosed by IMC owner Krystian
Polaczek.

IMC Deputy Supervisory Board Chairman Arkadiusz Wieckiewicz, speaking

of the reasons for the location of the assembly plant in Ukraine, pointed to
the disparity between excise duty levels on ready-made cars and car parts:
excise on the former amounts to 25 percent, and only 0.5 percent on the
latter.                                              -30-
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9.  POLAND: RUSSIA USES ENERGY RESERVES FOR BLACKMAIL 

Dow Jones Newswires, London, UK, Friday, May 19, 2006

LONDON – Poland’s Defence Minister Radek Sikorski has accused Russia

of using its energy reserves as a means of blackmailing its western neighbors,
the BBC Web site reported Friday.

In a BBC interview, Sikorski said Poland wanted a commercial relationship
with Russian energy suppliers, without monopolies, price-fixing or
blackmail.

His comments echo concerns raised by U.S. Vice-President Dick Cheney at a
recent eastern European regional meeting. Next week, Russia and the European

Union will have summit talks at a Black Sea resort.

Poland has previously criticized Russia for cutting gas supplies to Ukraine
in January in a price dispute, and for signing a deal with Germany to build
an undersea gas pipeline bypassing Poland. Sikorski recently compared the
deal to the pre-World War II Nazi-Soviet pact which carved up Poland.

The $5-billion pipeline, agreed in September 2005, will connect Babayevo in
Russia to Greifswald in Germany. The 1,200-kilometer pipeline is now under
construction and will deliver Russian gas to Germany – and eventually to
other Western European nations – by 2010.

Poland has asked the E.U. to forge a more coherent common policy on energy
in the face of new challenges. But its proposal for a new Energy Security
Treaty, to provide mutual energy security in the same way as the North
Atlantic Treaty Organization offers protection against military attack, has
so far won little public support.          -30-
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BBC News Web site: http://news.bbc.co.uk

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10.                   SO LONG, WASHINGTON (FOR NOW)
 

By Anne Applebaum, OP-ED Columnist, The Washington Post
Washington, D.C., Wednesday, May 24, 2006; Page A23

To be perfectly honest, I never really got used to it. However many times I
had to say it, the words never sounded natural. “What does your husband

do?” the nice woman in the carpool line or the pleasant man at the cocktail
party would ask, and I’d try to toss it off lightly: “Well, actually, he’s the
defense minister of Poland.”

Then the nice woman or the pleasant man would look at me slightly
cross-eyed, trying to guess whether I was serious. After they had worked
out that I was indeed completely serious, they would demand explanations.

“How on earth did that happen?” was a frequent question, as if the answer
might involve some mysterious deus ex machina or a coup d’etat, nothing

so dull as a democratic election. “Oh, that must be terribly difficult,” was a
common commiseration — as if we were discussing a great tragedy.

But my favorite reaction by far — and it was by no means unusual — came
from the people who wrinkled their foreheads and asked: “Is that a job you

can do in Washington?”

Well, no, being Polish defense minister isn’t a job you can do in
Washington. Nor is it a job that can be done while commuting from
Washington. On the contrary, the Polish defense minister pretty much has
to be in Poland all the time, what with cabinet meetings to attend, NATO
summits to plan, interviews to give and troops to manage in Iraq,
Afghanistan, Kosovo and elsewhere.

Nevertheless I find it heartwarming that so many Washingtonians think that
maybe someone could be the Polish defense minister while living in
Washington. It is often alleged that we now live in a thoroughly globalized
world, a world where everyone knows everything in real time, where everyone
has instant access to all information, where the man who answers Microsoft’s
help line is in Bangalore and the grapes at the Chevy Chase supermarket come
from Chile.

Yet even so, Washington — the metaphoric capital of this globalized
world — still retains a streak of the small-town provincialism it had when
I was a child.

Those who live in the orbit of the White House and Capitol Hill still find
it hard to imagine how anyone could bear to exist beyond the Potomac
watershed. Those who live in the orbit of the Chevy Chase supermarket still
think of foreign countries as places to go on vacation.

Poland, Brazil, Congo, Kazakhstan, Wherever: They may be Allies, they may
be Strategic Partners, they may be Important Front Page Stories, but — 
let’s face it — they’re still less absorbing than the latest K Street scandal or
Little League game. It’s a relief, somehow, to know that the global village
hasn’t yet replaced real villages altogether.

I concede that there really was something odd about living for the past year
in Washington while my husband ran for election to the Polish senate, joined
the government there and became defense minister.

There was a long prehistory to the situation (we lived in Poland before, my
husband was in government before) and a good explanation for it (I wanted
my children to finish the school year here), but it’s still been surreal to
read about his life in the Polish press — while waiting in that carpool
line on my way to the supermarket.

All of which is an overlong way of explaining why this column is about to
disappear, temporarily. When it reappears, a few months from now, I will
be in Poland or somewhere close by.

But I doubt I’ll write again about my husband’s job: After all, my views
about most things were formed long before he had it. In fact, I’m only
writing about it now because if I don’t explain why I’m leaving, lots of
people — relatives, friends, childhood acquaintances — will wonder what
happened.

I realize, of course, that out there in cyberspace no one could care less if
another local writer leaves town for Europe or blasts off into outer space.
But Washington — not the metaphoric Washington, but the real Washington –
still cares about its offspring. And I hope it always will.     -30-
—————————————————————————————————
E-mail: applebaumanne@yahoo.com
http://www.washingtonpost.com/wp-dyn/content/article/2006/05/23/AR2006052301530.html

NOTE:  Anne Applebaum is married to Poland’s Defense Minister
Radek Sikorski.
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11.   UKRAINE SIGNS WTO PROTOCOL WITH AUSTRALIA
    Document marked the end of one of the longest bilateral talks processes.

UNIAN news agency, Kiev, in Ukrainian 0823 gmt 20 May 06
BBC Monitoring Service, United Kingdom, Saturday, May 20, 2006

KIEV – Ukraine and Australia have completed bilateral talks and signed a
protocol on mutual access to markets of goods and services required for
Ukraine’s accession to the World Trade Organization (WTO), UNIAN learnt

from the Economics Ministry’s press service.

The ministry said that the signing of the protocol, which took place on 19
May, was an important step towards the completion of Ukraine’s accession to
the WTO. This document marked the end of one of the longest bilateral talks
processes.

Among other things, the protocol specifies the conditions for access to
sugar markets proposed by Ukraine which sought to protect its players’
interests in these markets.

Deputy Economics Minister Valeriy Pyatnytskyy signed the protocol on behalf
of Ukraine. At the end of April, Paytnytskyy said that Ukraine is planning
to complete the WTO accession talks by the first half of June. [Passage
omitted: background]                            -30-
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12. UKRAINE’S CHANCES TO FIND ALTERNATIVES TO GAZPROM 
                    
Vedomosti , Moscow, Russia, in Russian 10 May 06
BBC Monitoring Service, United Kingdom; Thu, May 18, 2006

Ukrainian government officials are looking for alternatives to Gazprom to
supply gas to their country. National Security and Defence Council Secretary
Anatoliy Kinakh stated that Russian oil companies could possibly become
suppliers. But analysts consider this maneuver unlikely and the oil
companies themselves will not break into Ukraine with their own gas.

Ukraine intends to begin negotiations to attract companies to supply gas
from Russia as alternatives to Gazprom. Anatoliy Kinakh stated this in an
interview with the Ukrainian daily newspaper Ekonomicheskaya Gazeta. “We

are talking about forming a more liberal gas market,” the government official
explained.

“In particular, one of the components of our negotiation strategy is
creation of a gas exchange market.” In his words, there are many companies
wishing to supply gas to Ukraine “at sufficiently acceptable prices.” He
named, in particular, Lukoil and TNK-BP. “We are talking about tens of
billion of cubic meters,” Kinakh elaborated.

Gazprom is not worried about the prospect of a competitor appearing in the
Ukrainian gas market. “These are only words,” an employee of the gas
monopoly’s press service said to Vedomosti. “There is nothing for us to
comment on. We will do this only in the case if oil companies and the
Ukrainian side reach some kind of real agreements.”

Russian oil companies are not concerned with expansion into the Ukrainian
gas market. A representative of TNK-BP, which extracted 4 billion cubic
meters of gas last year, told Vedomosti that the company had no plans to
supply fuel to Ukraine.

“We have a contract with Gazprom,” says a source in Lukoil. “All the natural
gas that we extract from the Nakhodkinsk deposit in the Yamalo-Nenetsk

Okrug [2.63 billion cubic meters in 2005] we sell to them according to this
contract. We do not have other volumes.”

Market analysts regard the possibility of oil companies’ direct deliveries
of gas to Ukrainian frankly. “Even if the Ukrainian side sets up some kind
of bridges with alternative suppliers, they will all the same have to agree
with Gazprom,” Konstantin Baturin from Alfa-Bank is certain.

The monopoly on gas exports practically belongs to the concern. “Gazprom
will not give up its place,” Baturin is sure. He adds that Russian oil
companies in any case do not have the volumes of available gas to meet
Ukraine’s requirements.

IFK Solid analyst Denis Borisov has the same opinion. “Gazprom will not
yield its status as the exclusive exporter of gas for at least five years,”
he is sure. “The monopoly has a significant argument – the state is holding
down domestic prices for this fuel.” In addition, the expert notes, recently
Russia has clearly started to use gas deliveries overseas as an instrument
of political influence.

Therefore the authorities are interested in Gazprom having this instrument.
Borisov also adds that Kinakh’s statement serves purely political motives –
to tone down the hullabaloo in Ukraine over RosUkrEnergo, which started
after the beneficiaries of this company became known.

In 2006, with 20 billion cubic meters of its own gas extracted, Ukraine will
require 76 billion cubic meters. In the beginning of January, Gazprom and
Naftogaz Ukraina signed an agreement, according to which in the first half
of 2006 Ukraine will buy gas from the Swiss Rosukrenergo at the border with
Russia for 95 dollars per 1000 cu.m.                        -30-
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13.  RUSSIA REPORTED TO PAY MORE FOR KAZAKH GAS, PLANS
            TO RAISE COST OF GAS SOLD TO UKRAINE

Alex Nicholson, Moscow, Russia, AP Worldstream, Mon, May 22, 2006

MOSCOW – Russia has agreed to pay nearly triple the amount it currently does
for Kazakh natural gas and plans to partly offset the hike by raising the
cost of gas it sells to Ukraine, a Russian business newspaper reported
Monday.

Kommersant cited unnamed sources close to the negotiations as saying that
Moscow agreed to pay US$140 (A110) per 1,000 cubic meters of Kazakh gas
compared to the US$50 (A39) price it paid previously. A spokesman for
Russian state-controlled natural gas monopoly OAO Gazprom declined to
comment immediately on the Kazakh deal.

The deal comes as competition for the energy resources of oil- and gas-rich
Central Asia is intensifying. U.S. Vice President Dick Cheney paid a
high-profile visit to Kazakhstan earlier this month to lobby for American
energy interests. EU Energy Commissioner Andris Piebalgs also traveled to
the Kazakh capital Astana to discuss the possibility of a European-bound gas
pipeline that could skirt Russia.

Russia imports about 8 billion cubic meters of natural gas per year from
Kazakhstan and Kommersant calculated that the increase would cost

Gazprom an additional US$700 million (A548 million) annually. In exchange
for shouldering a more market-oriented price, Russia would expand its
presence in the Kazakh gas industry, the paper reported.

Kazakhstan previously announced plans to raise capacity by 40 billion cubic
meters per year and plans on forming two joint ventures with Russia to tap
the Imashevsk field and the Tsentralny field under the Caspian Sea, which
hold an estimated 129 billion and 2 trillion cubic meters of gas
respectively.

Apparently referring to steps that would partly offset the price hike,
Kommersant quoted Gazprom’s deputy management board chairman Alexander
Ryazanov as saying that Ukrainian consumers would pay a higher price as July
1 – US$130 (A102) per 1,000 cubic meters.

Russia and Ukraine faced off in a bitter spat over natural gas prices over
the New Year holiday – a dispute that resulted in gas supplies temporarily
being shut off to Ukraine. The two sides ultimately reached deal under which
Ukraine would buy wholesale gas from Russia and Central Asia at a blended
price of US$95 (A74) per 1,000 cubic meters from a gas trading company 50
percent owned by Gazprom.

The disruption, which also affected several European countries, led to calls
for the EU to diversify its energy sources.

Yaroslav Dykovytsky, a finance director with Ukraine’s state-owned Naftogaz
gas and oil company, said he knew nothing of plans for increased prices.

“I don’t know what kind of statements from the Russian side there are. We
have a five year deal under which Ukraine pays US$95 per 1,000 cubic
meters,” he said. “I see no ground for the price to be reviewed.”  -30-
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Associated Press writer Anna Melnichuk contributed to this story from Kiev.
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14. UKRAINE PM SURE RUSSIA WON’T UP GAS PRICE THIS YEAR
                 Ukraine is one of the biggest gas consumers in Europe.

Associated Press (AP), Kiev, Ukraine, Tue, May 23, 2006

KIEV – Prime Minister Yuriy Yekhanurov Tuesday expressed confidence the
price Ukraine pays for natural gas imports from Russia wouldn’t be increased
this year. Yekhanurov said it will “without doubt” stay the same, according
to his spokesman Velentin Mandriyivsky.

Monday, the Russian daily Kommersant quoted Alexander Ryazanov, deputy
management board chairman of Russian state-controlled natural gas monopoly
OAO Gazprom (GSPBEX.RS), as saying Ukrainian consumers would pay a

higher price from July 1 – $130 per thousand cubic meters.

Ryazanov was apparently referring to plans to offset a major increase for
Kazakh gas imports that Russia has agreed to, according to the Kommersant
report.

A Gazprom spokesman said the price RosUkrEnergo pays for the Central

Asian gas could change if Kazakhstan were to raise its prices. The comment
appeared to indicate that such an increase could result in a price hike for
Ukrainian consumers.

In January Russia and Ukraine faced off in a bitter spat over natural gas
prices – a dispute that resulted in gas supplies temporarily being shut off
to Ukraine.

The countries reached a deal under which Ukraine would receive all of its
imported natural gas at $95 a thousand cubic meters from a little-known
intermediary company, RosUkrEnergo, that is owned jointly by Gazprom and
another company whose owners weren’t identified until last month.

Yekhanurov also called for a 50% increase for gas prices for private
consumers, saying such a move would prevent the excessive use of gas by

some Ukrainians. This month, private consumers, such as apartment residents,
have already experienced a 25% price increase. Ukraine is one of the biggest
gas consumers in Europe.                          -30-
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15.  UKRAINE SEEKS G8 TALKS ON GAS SUPPLY FROM RUSSIA

By Stefan Wagstyl in London and Tom Warner in Kiev
Financial Times, London, UK, Tue, May 23 2006

Ukraine has appealed to the US and European Union to help safeguard Russian
gas supplies to itself and other east European states when they assemble for
the Group of Eight summit in St Petersburg in July.

Arseniy Yatsenyuk, economy minister, told the Financial Times that the
security of Ukraine’s energy supplies was a matter not only for Ukraine but
for the whole of Europe. “I hope the G8 will raise this issue. It’s very,
very important to co-ordinate our concerns,” he said.

Mr Yatsenyuk said Ukraine was feeling the economic effects of the recent gas
supply deal with Russia in which prices were nearly doubled from $50 to $95
per thousand cubic metres. The full impact would be felt in the second half
the year in slower economic growth and increased inflation, he said.

But Mr Yatsenyuk warned that a further sharp increase in prices could cause
“the collapse” of the Ukrainian economy. Referring to report that Russia
might seek an increase to $230 per thousand cubic metres, he said such as
increase could lead to a 6-7 per cent drop in gross domestic product and a
leap in inflation to 25-30 per cent.

Ukraine has forecast a 2.8 per cent growth in GDP this year and an 11.4 per
cent increase in inflation.

Mr Yatsenyuk urged western countries to press Russia to ratify the
much-delayed Energy Charter, which includes commitments to liberalise access
to energy sources and pipelines. Agreed by almost all European states in the
early 1990s, the charter has never been implemented because of Russian
objections, which have grown more vocal in recent years.

Mr Yatsenuk’s appeal is unlikely to persuade Russia to adopt the charter.
But his call for Ukraine’s energy supply concerns to be raised at St
Petersburg will meet a positive response in Washington and Brussels.
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16.    YUSHCHENKO TELLS SUMMIT OF UKRAINE’S INTEREST
                      IN NEW OIL TRANSPORT PROSPECTS 

Interfax-Ukraine news agency, Kiev, in Russian 0830 gmt 23 May 06
BBC Monitoring Service, United Kingdom; Tuesday, 23, 2006

KIEV – Ukrainian President Viktor Yushchenko has said that Ukraine is
interested in new oil transport prospects. He said this today during the
GUAM summit [bloc of Georgia, Ukraine, Azerbaijan and Moldova] in Kiev.

Yushchenko said that “first and foremost, I would like to say on behalf of
Ukraine: we are interested in new oil transport prospects”.

According to him, Ukraine is interested in transporting oil from Azerbaijan
and Kazakhstan to large consumers in the European Union. Yushchenko

said that “we are prepared to allocate Ukrainian resources for all kinds of
development of this project, including the Odessa-Brody oil pipeline”.

Yushchenko also said that Ukraine sees the need to build a large oil
terminal to ensure the supply of large volumes of oil. He also stressed that
Ukraine is ready to consider a project to build new terminals and new
transport lines. Yushchenko proposed the creation of a working group today,
which would work on the project data at the level of experts.

Yushchenko also expressed his satisfaction with the fact that today in Kiev
a protocol on putting into action an agreement on free trade between GUAM
member states will be signed. “This agreement has taken a long road and the
path to this protocol was a long one”.

Yushchenko also said that the issue of unification of tariff policies and
unification of the work of customs and border services of GUAM member

states is an acute one. He said that “without unifying tariff policy or customs
policy we will not be able to make use of the potential of the free trade
zone”.

Yushchenko also expressed the view that “first and foremost, there is a need
to draw attention to coordinating the work of the secretariat [of GUAM]“.

The president also added that there is a need to correctly form the
priorities of activity formed on the basis of the GUAM organization. He said
that “perhaps there is a need to look at the frequency of our meetings”.
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17.  PARSING CHENEY’S ‘HOLD ON THERE, VLADIMIR’ SPEECH’
            Real news of U.S.-Russian relations is the reversal of fortunes

COMMENTARY: By Jim Hoagland, The Washington Post
The Wall Street Journal, NY, NY, Monday, May 22, 2006

The fallout from U.S. President George W. Bush’s crash-and-burn approval
ratings does not stop at the water’s edge. Foreign leaders — in particular,
Russia’s Vladimir Putin — oppose U.S. goals and policies abroad more
directly and forcefully as Mr. Bush’s support and his time left in office
fade away together.

A May 4 speech in Vilnius by Vice President Dick Cheney criticizing Mr.
Putin’s record on democracy caught the headlines recently. But the real news
of U.S.-Russian relations is the reversal of fortunes that has made Mr.
Putin the confident, overbearing leader and Mr. Bush the transitional figure
who heads a divided nation.

The comfort that Mr. Putin feels in reviving the Sinatra Doctrine at the
Kremlin — doing it his way — came home on three fronts recently. The first
was hearing Dmitri Trenin, a clear-eyed Russian scholar based in Moscow,
describe the Kremlin’s satisfaction at how well the war in Chechnya is
going, at least from the Russian point of view. The conflict has essentially
been Chechenized, according to Mr. Trenin and to diplomats in Moscow,

with Russian forces standing down as local forces stand up.

But the diplomats also report that removing Chechnya from the East-West
chessboard of big power politics seems to be intensifying, rather than
moderating, Mr. Putin’s aggressive determination to make sure Russia is no
longer treated “like part of the furniture” in foreign policy terms.

The second and most significant example of the new assertiveness came when
U.S., European and Russian negotiators met in New York two weeks ago to
discuss stopping Iran’s drive to enrich uranium. In a previously undisclosed
move, Russian Foreign Minister Sergei Lavrov proposed that Iran be allowed
to conduct an experimental research and development program of enrichment if
Tehran gives up its plan for full-scale development of nuclear reactors.

This was one big step backward. Russia had previously agreed with U.S. and
EU insistence that Iran be allowed no access to any type of enrichment, a
key step to possessing a nuclear weapon. “It is a red line we do not accept
being crossed,” said one U.S. official.

Russia’s control over natural gas supplies to Europe has also emboldened Mr.
Putin in his determination to keep Ukraine and Georgia from moving rapidly
along the path to NATO membership. Political turmoil in Ukraine has given
the Kremlin new relief on that third political front.

Mr. Cheney’s speech marked a growing concern about Mr. Putin’s unhelpfulness
in foreign affairs rather than an attempt to roll back Mr. Putin’s power at
home. After all, the Russian president’s 72% approval rating is more than
double Mr. Bush’s favorable standing in U.S. polls.

The Group of Eight summit that Putin will host in St. Petersburg in July is
now only weeks away. Time grows short to reach an understanding on political
disputes that could spoil Mr. Putin’s moment on the world stage. That, I
think, was Mr. Cheney’s essential message — a last effort to caution the
Russian against overplaying his hand.                   -30-
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18.     RUSSIA REBUFFS EUROPEAN UNION ON NATURAL GAS
          Kremlin Resists Calls To Liberalize Sector, Sign Energy Charter

By Guy Chazan, The Wall Street Journal
New York, NY, Wednesday, May 24, 2006; Page A6

MOSCOW — Hopes that this week’s Russia-European Union summit at the

Black Sea resort of Sochi would resolve smoldering tensions over energy
receded when Russia said it would resist calls to liberalize its natural-gas sector.

With Russia enjoying surging export revenue from its oil and gas resources,
President Vladimir Putin has sought to recast his country as an energy
superpower and has made energy security the centerpiece of his presidency of
the Group of Eight leading nations.

The Kremlin’s decision to briefly cut gas supplies to Ukraine over a pricing
dispute in January sparked doubts in Europe about Moscow’s reliability as an
energy supplier and calls for the EU to wean itself from relying on Russian
gas, which now accounts for a quarter of Europe’s supplies.

Russia has since threatened to divert gas supplies to Asia if the ambitions
of state-run OAO Gazprom to acquire retail assets in Europe are thwarted.

At tomorrow’s summit, the EU will press Russia to ratify the Energy Charter,
an international treaty that provides safeguards for foreign investors and
imposes market-based rules on the energy trade, especially with regard to
pricing and distribution. By ratifying the treaty’s Transit Protocol, Moscow
would have to allow third-party suppliers access to its pipeline network.

“We will continue our discussions with Russia on this [energy] partnership,
on the benefit of having a clear, understandable, predictable environment in
which to proceed with energy relations,” EU spokeswoman Emma Udwin said

in Brussels yesterday. She also said Russia should consult more with its
customers on energy pricing.

Russia says it has no plans to back the charter. Sergei Yastrzhembsky,
Russia’s envoy to the EU, called for a separate protocol addressing Russia’s
specific concerns about the treaty. “We’d like [it] to take into
consideration not only the EU’s interests but those of Russia, too,” he
said.

In an interview with a Russian newspaper yesterday, Igor Shuvalov, an aide
to Mr. Putin, said independent producers might one day be allowed access to
Gazprom’s pipeline, but the company would keep its export monopoly. “We

will always sell gas on external markets through a single export channel,” he
said. “That’s in the interests of everyone, including the EU.”

Mr. Yastrzhembsky played down tensions over energy. “There’s no drama in
discussions on this subject,” he said, adding that the two sides would sign
an agreement easing visa procedures and another making it easier to re-admit
illegal migrants who cross their borders. Officials also will discuss how to
replace the framework treaty that is the basis for their relationship, the
Partnership and Cooperation Agreement, which expires in 2007.    -30-
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Write to Guy Chazan at guy.chazan@wsj.com

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19.                                 KREMLIN CAPITALISM:
            Russian Car Maker Comes Under Sway Of Old Pal of Putin
 A Tight Circle in Government Is Drawing Key Industries Into State’s Orbit
                                       Frictions With Partner GM

By Guy Chazan, The Wall Street Journal
New York, NY, Friday, May 19, 2006; Page A1

MOSCOW — Last December, the head of Russia’s state arms-trading agency
emerged from the shadows as one of the country’s most powerful businessmen.
Aided by 300 heavily armed police, he took control of Russia’s largest auto
maker.

His agency had no experience running a car company, nor did it own any
shares of this one, OAO Avtovaz, producer of the ubiquitous Lada. But the
chief arms trader, Sergei Chemezov, had one invaluable asset: He is an old
friend of Russia’s president, Vladimir Putin.

Mr. Chemezov says he has known Mr. Putin since the two were KGB agents in
the 1980s. He acknowledges that his ties give him a leg up in business. “It
means we can get a lot of issues resolved fast,” he says.

Since being tapped in 2004 to run the arms-export business, Mr. Chemezov

has been using his unique access to turn the state agency, called
Rosoboronexport, into a conglomerate with interests ranging from helicopters
to oil-drilling gear to cars. Its newest target is one of the world’s
largest titanium producers, a critical supplier for Airbus and Boeing Co.

Rosoboronexport is one of several fast-growing companies headed by friends
of Mr. Putin that embody his particular brand of state capitalism. Across
Russian industry, private capital is in retreat as state-controlled entities
ride a wave of consolidation and confiscation to dominate oil, gas,
aviation, engineering and other sectors Mr. Putin deems strategic.

It’s a process with strange echoes of the past. In the 1990s, a generation
of aggressive young businessmen used connections to snap up assets at rigged
privatization auctions. Now, some of Mr. Putin’s closest associates are
taking advantage of their proximity to the Kremlin to build up similarly
huge, although nominally state-owned, business empires.

Their growth worries the few outspoken advocates of market-oriented policies
left in the top ranks of the Putin government. “We do not have enough ways
and means to keep track of state-controlled firms, many of them monopolies,
as they grab market assets,” said Economics Minister German Gref at a
conference in April.

Long noted for graft and inefficiency, Russian state-owned behemoths
increasingly have become tools of government policy. In January, gas
monopoly OAO Gazprom briefly shut off the fuel to neighboring Ukraine in a
price dispute that was widely denounced as a move to punish the pro-West
government in Kiev.

The Kremlin rejects those accusations and says big state-owned companies
will be subject to the discipline of the market, often with some shares
available to foreign investors. (The government is planning an initial
public offering of state oil company OAO Rosneft this summer.)

But at Avtovaz, Rosoboronexport’s takeover wasn’t good news for General
Motors Corp.’s $340 million joint venture with the Russian auto giant. The
change in management brought to a head simmering tensions at the operation.
Now there are signs the entire deal, the largest foreign investment in
Russia’s auto sector, could unravel.

Until recently, Rosoboronexport was barely known, an operation with a few
hundred employees headquartered on a quiet Moscow boulevard. It was, and
remains, one of Russia’s most opaque companies: Its business activities are
largely a state secret. With Mr. Chemezov at the helm, however its profile
began to grow.

According to Mr. Chemezov, he and Mr. Putin met when both were KGB
intelligence officers in Dresden, East Germany — a claim the Kremlin won’t
comment on but one published in a government-controlled magazine. Mr.
Chemezov says the two lived in the same apartment block and their families
socialized. They kept in touch after their return to Russia. In 1996, when
Mr. Putin got a job as a mid-level Kremlin bureaucrat, he made Mr. Chemezov
his deputy.

In 1999 Mr. Chemezov moved to the arms industry. It was a time of corruption
and chaos. The advent of capitalism had left defense factories starved for
cash. Desperate to survive, the mostly state-owned firms competed with one
another for foreign contracts, often with the help of dubious middlemen.

After Mr. Putin became Russian president the following year, he took control
of the trade. He formed Rosoboronexport as a state monopoly to squeeze out
freelance arms salesmen and root out graft, staffing it with old comrades.
Mr. Chemezov became its deputy head and then, in 2004, its chief.

Russian weapons exports boomed. They totaled $6 billion last year, up 70%
since 1999. Rosoboronexport, which takes a 3.8% commission on all sales,
prospered.

The agency expanded its horizons. Last year, it merged all of Russia’s
helicopter makers, some of them privately owned, into one of its
subsidiaries. Now it is involved in a similar effort to consolidate Russia’s
struggling airplane manufacturers under state control.

Mr. Chemezov’s influence grew as the Kremlin picked him to represent the
state on the boards of a string of large defense firms. But his most
ambitious gambit yet involved Avtovaz. The auto story developed fast last
fall, ignited by a meeting in the Kremlin between President Putin and the
long-serving CEO of the publicly held car company.                                    

                                   DOWN ON ITS LUCK
Avtovaz was built in the late 1960s in Togliatti, a drab Volga River city
named after an Italian Communist. In the 1990s the city was torn apart by
mafia wars, as rival gangs vying for control of the auto works staged
shootouts at the factory gates. The company was broke. Big profits, however,
were being racked up by trading firms — some linked to Avtovaz
management — that supplied auto parts and sold the company’s finished cars.

More recently, Avtovaz has struggled to hold market share as some in
Russia’s growing middle class switch from clunky Ladas to foreign-brand
cars. By mid-2005, corporate raiders, some alleged to have criminal
connections, were tightening their grip on the big auto maker. They bought
up parts suppliers and dealerships, installing loyal managers and acquiring
shares.

Mr. Chemezov says that when President Putin met last fall with Avtovaz’s
chief, 64-year-old Vladimir Kadannikov, the veteran auto executive said he
wanted to retire. Mr. Kadannikov declined to be interviewed. People close to
him say he didn’t have much choice in his decision to leave. A Kremlin
spokesman said Mr. Putin doesn’t fire the managers of private companies.

After consulting with aides, Mr. Putin gave Rosoboronexport the task of
cleaning up Avtovaz, Mr. Chemezov says.

Moving in was a simple operation. Avtovaz’s managers control the auto maker
through an arcane system of cross-shareholdings. By replacing the bosses,
Rosoboronexport could take charge of the company without having to buy any
shares.

First, though, the old management team had to be persuaded to leave
peacefully. After Mr. Kadannikov resigned in October, a team of police
investigators and prosecutors was airlifted in to begin the process. “To
impose order…the state had to bring in 300 policemen from outside,” says
Mr. Chemezov.

“Over the next few months, we had to replace virtually the entire police
force, both in Togliatti and in the factory itself.” Soon, three of
Avtovaz’s senior accountants found themselves facing charges of theft and
tax evasion. The charges were dropped a few weeks later.

On Dec. 22, a tight police cordon encircled Avtovaz’s high-rise headquarters
in Togliatti as shareholders gathered to elect a new board. Within half an
hour, they had voted for the new, state-approved slate. Most had never even
seen the candidates before. No alternatives were on the ballot.
                                              AUTO GIANT
President Putin defended the takeover. “Let’s face it, the enterprise is in
a bad way,” he told reporters in January. “And if a state structure goes in
as crisis manager to try to improve the situation, then that’s no bad
thing.”

The new bosses are pushing for $4.5 billion in state money to roll out new
models and build a new factory to make 450,000 cars a year. Some in the
government want Avtovaz to go further, absorbing other, smaller Russian car
makers to form a national auto giant. Mr. Chemezov has a personal notion of
how to restore the car company’s onetime glory. He has just announced it
will build a Jeep-type vehicle for the army, to be called the Kalashnikov.

On the whole, workers appear to have welcomed the change at the top. “With
the new lot, at least there’s hope they’ll get rid of the mafia. They’re the
only ones who can,” says Pyotr Zolotaryov, head of Edintsvo, Avtovaz’s
independent trade union.

Rosoboronexport moved quickly to get control over Avtovaz’s lucrative sales
operations. One of the first steps was to put the company’s Moscow office in
the hands of the brother of Avtovaz’s new chairman.

Then the new regime shifted a big chunk of Avtovaz’s financial flows,
including some of its hard-currency accounts, to a preferred bank. Called
Novikombank, it is tiny but has close links to Russia’s defense industry.
For years, one of its main shareholders was Russia’s Association of Foreign
Intelligence Veterans, and in the late 1990s it was run by Mr. Chemezov’s
Rosoboronexport predecessor, another old KGB hand.
                                         A SPAT WITH GM
Rosoboronexport soon was in a spat with Avtovaz’s American joint-venture
partner, General Motors. GM had seen relations cool with the previous
management team. But it was stunned in February when the new bosses at
Avtovaz suddenly stopped supplying parts to the companies’ five-year-old
joint venture, closing down its production line for 10 days. “There was no
discussion at all about a shutdown,” says Warren Browne, head of GM in
Russia. “They took that decision unilaterally.”

Avtovaz had long grumbled that the joint venture wasn’t paying enough for
the parts Avtovaz supplied. After tough negotiations, the sides worked out a
compromise that raised the price, though not by the 60% that Avtovaz had
demanded. But that deal expires at the end of this year, and beyond that,
the venture’s prospects look murky. “There’s still a lot of distrust on both
sides,” says a banker familiar with the project. “I think one will buy the
other out.”

That would be a big blow for a pioneering project that in its time put GM
way ahead of competitors in one of the world’s fastest-growing car markets.
GM took the risky step of putting its Chevrolet logo on a Russian-designed
car, a strategy that initially paid off as Chevrolet became Russia’s
top-selling foreign brand in 2004. After this year’s tiff, GM says it
remains committed to the joint venture. “It’s debt-free, it’s got cash flow
and it achieved a profit a year before we expected it to,” says Mr. Browne.

Avtovaz’s new bosses are less effusive. “When it started, the venture was a
breakthrough, but times change,” says Vladimir Artyakov, Avtovaz’s new
chairman. “It got stuck in its original format…and began to limp. It no
longer really fits into Avtovaz’s strategy.” Asked if Avtovaz might seek to
buy out GM, he says, “Why not?”

GM appears to be looking at other alternatives. It has taken out an option
on land in St. Petersburg for a possible assembly plant there, which it
would own with no local partners.
                                           METALS RACE
Mr. Chemezov is also on the lookout for other business. He’s in talks to
have his Rosoboronexport buy a stake in publicly held OAO VSMPO-Avisma,

one of the world’s main producers of titanium. It would become part of a big new
state company producing metals and alloys for the Russian defense industry.

VSMPO has just signed a $1.4 billion contract to sell the lightweight metal
to Airbus through 2015. It’s also a key supplier to Boeing. Rosoboronexport
says it wants to make sure not all of the country’s store of the metal ends
up abroad. VSMPO “is a strategic enterprise,” Mr. Chemezov says. “It
supplies all our defense plants with titanium. And naturally we want it to
be…under state control.”

He denies that his plan would amount to nationalization, although he
acknowledges that the price Rosoboronexport is offering is only about

half the titanium maker’s current share price.

As Mr. Chemezov’s influence expands, the line separating his different
roles — civil servant and entrepreneur — is increasingly blurred. “You
know, we’re not really the state, we’re businessmen,” he says of
Rosoboronexport. “Call it state commerce.”              -30-

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Write to Guy Chazan at guy.chazan@wsj.com
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20.         RUSSIA: THE FOLLY OF RENATIONALIZATION

ANALYSIS & COMMENTARY: By Anders Aslund, Moscow Times
Moscow, Russia, Tuesday, May 23, 2006. Issue 3416. Page 10.

Something strange is happening in the Russian economy. Since 1999, it has
delivered stellar growth numbers of almost 7 percent per year, with
virtually all of the growth coming from the private sector, which has been
led not only by the recovery in the oil and metals sectors, but also by
retail and construction.

It only took off a few years after privatization, because other market
reforms were lagging and new owners needed to consolidate their ownership.

The state, by contrast, has learned little, and continues to fail. Most
branches of the state, including law enforcement, the armed forces, public
health care and education, the bureaucracy and public infrastructure, are
patently flawed. The common denominator in all of these problematic sectors
is public ownership.

Under these circumstances, a rational and accountable government should
pursue two related courses: accelerated privatization and comprehensive
reforms in the public sector. Sensibly, the government was doing so until
2003. But the last three years have brought a halt to all reforms, and this
situation is expected to continue until President Vladimir Putin has left
office.

Incredibly, underperforming state corporations are swiftly gobbling up
successful private firms on a major scale. According to the European Bank
for Reconstruction and Development, the share of gross domestic product
created by private companies fell from 70 to 65 percent last year.

The most spectacular renationalizations have been in the oil industry. From
1987 to 1996, the old state-owned corporations managed to halve output in
Russia’s oil industry through mismanagement and pervasive criminalization.
Fortunately, insiders successfully privatized the LUKoil and Surgut oil
majors, allowing for some economic recovery.

In the other companies, however, the situation remained dire. The Russian
government realized that drastic measures were necessary, and succeeded in
privatizing several of the most criminalized companies in sales to young
outside businessmen.

By 1999, 90 percent of the oil industry was in private hands and, over the
next five years, oil production rose exponentially, at an average annual
rate of 8.5 percent, as foreign technology and expertise were brought in to
revive Russia’s old brownfields. Meanwhile, international oil prices rose,
allowing the government to fill its coffers by means of ever-higher taxation
of the oil companies.

By 2000, Yukos was paying $6 billion in taxes, far more than anybody would
have considered it worth when it was privatized in 1995, proving that
legalization and a sensible taxation policy generate much larger state
revenues than nationalization. Corporate governance improved in parallel.
The stock market favored the newly privatized companies and was waiting

for the promised privatization of Rosneft and Zarubezhneftegaz.

Although the privatized economy was booming as never before,
renationalization began in 2003. It wasn’t failure or illegality that
exposed the private oil industry to this danger, but its success and
transparency. The first notable renationalization was Rosneft’s purchase of
a small oil company, Severnaya Neft, in early 2003. Remarkably, Rosneft paid
$600 million for assets that had been bought for $7 million only a couple of
years earlier.

The biggest renationalization has been Rosneft’s seizure of Yukos, which is
still being completed. It started in the summer of 2003, when the government
began systematically destroying the company through lawless persecution and
confiscatory taxation. Rosneft will soon pick up the remaining morsels of
Yukos.

In a very different renationalization in September, state-owned Gazprom
purchased Sibneft from Kremlin-friendly businessman Roman Abramovich,

who wisely lives in Britain. Gazprom paid a high market price of $13 billion for
Abramovich’s controlling stake.

Since government persecution made it impossible for the Yukos management

to run the company effectively, its investment and output levels began to
plummet. Likewise, the long delay in Sibneft’s sale reduced its output.
Rosneft, in turn, invested little in its operations, because it was spending
all of its cash on acquisitions.

The remaining major private producers — TNK-BP, LUKoil and Surgut — 
realized the danger of investing too much or boosting production
excessively, so they moderated their production increases.

In 2005, the increase in oil output growth dropped to 2.7 percent, with all
of the growth coming from the three big private companies. This year, the
government forecast growth of just 2 percent, but after four months output
had risen by an annual rate of only 1.7 percent, and stagnation appears to
be approaching.

The government could easily and swiftly bring a halt to this ongoing damage
through renewed privatization. In particular, Russia needs private companies
to develop the difficult new fields where state companies have long failed.
Instead there is talk that Rosneft plans to purchase another private
company, Surgut.

Poorly performing Rosneft is preparing an international IPO to raise
billions to to repay loans, while the company’s management will be
handsomely remunerated in stock options.

Another key sector damaged by renationalization has been banking, in which
five big state-owned banks are buying up smaller competitors. Their raids
are sometimes accompanied by smear campaigns, bank runs and accusations

of money laundering.

As a consequence, the banking sector remains state-dominated, and the ratio
of the broad money supply to GDP is about 10 percentage points lower than in
less-developed Ukraine, where private banks dominate and flourish.

At Russia’s current stage of development, its automotive sector should be
taking off, but this will require major investment from international
companies. Despite announcements by major manufacturers that they are
opening production plants in the country, their projects are being impeded.

Meanwhile, Rosoboronexport has taken control of yet to be restructured giant
AvtoVAZ, which will receive huge state subsidies that will continue to block
the modernization of Russia’s automotive industry.

Some heavy machinery companies, notably Uralmash, have recovered, but last
year its mother company, OMZ, was sold to Gazprom for inexplicable reasons.
Another decent private corporation, Siloviye Mashiny, was similarly sold to
Unified Energy Systems, thus diverting the latter from its core activities.

In the oversized Russian aircraft industry, a few small private companies
have recorded success, but they are now to be merged with the big dying
state enterprises into a huge AiRUnion corporation, with three-quarters of
its shares in state hands. There is no doubt that the big bad state
companies will crowd out the promising upstarts with the help of state
subsidies.

Transactions like these are proliferating throughout Russia’s big business
sector at an ever-increasing speed. Some owners are friendly with the
Kremlin, and are well-paid. Others, having neglected their relations with
the Kremlin, are paid little, but sell in any case because they fear ending
up like poor Mikhail Khodorkovsky.

As all of these examples demonstrate, structural effects are of no interest
to the government. Renationalization is being driven by the interests of
state officials looking to extend their power and wealth. The government
does not even promote these moves until they have already happened, and
there is no apparent socialist ideology behind nationalization.

In January, at his annual press conference, Putin said: “We have about 10
relatively large private oil companies. … Nobody is going to nationalize
them; nobody is going to interfere with their activities. They are going to
develop according to market conditions, like private companies.

I think that this kind of balance is better for the Russian economy today,
and this includes active participation from our foreign partners and
shareholders.” Meanwhile, a new draft law has named 39 strategic industries
that the Kremlin wants to dominate, and renationalization proceeds on
course.

Indeed, if no good argument can be found for renationalization, no positive
effect is likely to materialize.                           -30-
————————————————————————————————
Anders Aslund is a senior fellow at the Institute for International
Economics in Washington.
————————————————————————————————
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21.      UKRAINE DEALS WITH MESSY SIDE OF DEMOCRACY
                                        What to do with Yulia?

ANALYSIS: By Mara D. Bellaby, Associated Press Online
Kyiv, Ukraine, Sunday, May 21, 2006

KIEV – What to do with Yulia? The fate of the ousted prime minister is much
the talk among Ukrainians _ those, at least, whose eyes haven’t glazed over
from a surfeit of politics.

The heady days of revolution and unity of purpose have given way to
squabbling and complex coalition dealings, and the nation of 47 million is
discovering how messy democracy can be.

With her feisty manner and intricately braided blond hair, Yulia Tymoshenko
was one of the highest-profile figures in the 2004 Orange Revolution that
swept Viktor Yushchenko to the presidency of the former Soviet republic.

She became prime minister but fell out with Yushchenko and was fired, only
to bounce back in parliamentary elections two months ago with more votes
than her potential coalition partners combined.

That election was hailed as Ukraine’s most democratic ever. But no party won
enough seats to form a government, and with the parliament session due to
start Thursday, the wheels of coalition-building are grinding slowly.
Tymoshenko wants her old job back. Yushchenko is cool to the idea.

The fate of Tymoshenko is not the only unresolved issue. There are plenty of
other potential deal-breakers that need to be sorted out, or risk scuttling
any alliance that does form. And many of them are rooted in Ukraine’s Soviet
past:

[1]  NATO: Yushchenko wants Ukraine to join, but the Socialists, a potential
coalition partner for the president’s Our Ukraine party, opposes entering
the Western military alliance.

[2] Russian gas: A deal this year nearly doubled the price Ukraine pays, and
has underlined how much clout the Kremlin retains even if it ceased to rule
this nation nearly 15 years ago. Tymoshenko wants the deal reversed;
Yushchenko says Ukraine got the best deal it could, but allies of his party
have sent mixed signals about how far they will go to defend it.

[3] Privatization: Some industries, such as the energy sector, communized in
Soviet times, remain state-owned and inefficient. Yushchenko has made their
privatization a priority. The Socialists, however, oppose privatization on
principle. Tymoshenko’s views are harder to read.

While prime minister, she called for a large-scale review of murky
privatizations carried out under former President Leonid Kuchma. Investors
saw her stance as an assault on ownership, which Tymoshenko strongly denied.

[4] Language: Yushchenko has pledged to protect Ukrainian as the nation’s
only state language. The Socialists say they would support making Russian a
second state language, noting that much of Ukraine’s east and south is
Russian-speaking.

The three parties in negotiations to share power run from left through
center to right. United by hatred of Kuchma’s former corruption-tainted
regime, their alliance quickly showed cracks once the old order was gone,
highlighted by the sacking of Tymoshenko and her government last September
amid mutual allegations of incompetence and corruption.

Despite Yushchenko’s reluctance to give Tymoshenko her old job back, the
alternative is even more awkward. The party of Viktor Yanukovych, the
pro-Russia candidate who was humbled in the upheaval that brought Yushchenko
to power, won the most votes in the March election. He has reached out to
his former opponents, but all have rebuffed him – publicly at least.

The Socialist party differs the most ideologically from its potential
coalition partners, but it won the fewest votes and has proven in the past
that it knows how to compromise.

“If the Socialist Party is interested in creating a coalition of democratic
forces, it must modify its position; otherwise there cannot be a coalition,”
Foreign Minister Borys Tarasyuk said last week.

Andriy Dmytrenko, an economics analyst with Dragon Capital, sees a more
pliant Tymoshenko emerging, too. “When Tymoshenko was campaigning, we

heard a lot of pro-populist rhetoric, but there are hints now that she has become
a lot softer, particularly after winning significantly,” he said.

“People still associate her term as prime minister with an economic slowdown
and price controls. She has to recover her image as a good economic
manager.”          -30-
———————————————————————————————–
Mara D. Bellaby has reported from Ukraine for The Associated Press since

the 2004 Orange Revolution.
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22. PARTY OF REGIONS NAMES IT’S PARLIAMENT LEADERS

Interfax-Ukraine news agency, Kiev, in Russian 1153 gmt 17 May 06
BBC Monitoring Service, United Kingdom, Wed, May 17, 2006

KIEV – The leader of the Party of Regions, Viktor Yanukovych, will chair the
parliamentary faction of the party, the party’s political council decided
today, Interfax-Ukraine has learnt from the press service of the Party of
Regions.

Rayisa Bohatyryova [the faction's leader in the previous parliament] will be
Yanukovych’s first deputy and Yevhen Kushnaryov, Mykola Azarov and

Volodymyr Rybak will be his deputies.

Borys Kolesnykov, Oleksandr Yefremov, Andriy Klyuyev, Vasyl Dzharty,
Oleksandr Peklushenko and Volodymyr Makeyenko will be the coordinators

of the faction’s six deputy groups. According to the results of the [26 March
parliamentary] election, the Party of Regions will delegate 186
representatives to [450-seat] parliament; 180 of them have already been
registered.                                      -30-
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
23.  MASS TATAR RALLY IN UKRAINE’S CRIMEA MARKS 62ND
           ANNIVERSARY OF THEIR DEPORTATION BY STALIN

Black Sea TV, Simferopol, in Russian 1600 gmt 18 May 06
BBC Monitoring Service – United Kingdom; May 18, 2006

SIMFEROPOL – [Presenter] A total of 15,000 Crimean Tatars today gathered

in the Crimean capital Simferopol for a mass rally to commemorate the 62nd
anniversary of their forced deportation from the peninsula [on Stalin's
orders].

In a resolution, rally participants called on the Council of Europe and the
European Union to encourage Ukraine to pass laws restoring the rights of the
Crimean Tatar people.

Addressing the rally, Mustafa Dzhemilyev, the head of the Majlis [Crimean
Tatar ethnic assembly], criticized the recent announcement by Cossacks that
they will form vigilante groups to patrol the peninsula in order to control
the interethnic situation there. Dzhemilyev said that Crimean Tatars could
respond with a similar move.

[Correspondent] With final preparations made and brief instructions issued,
the column of marchers starts moving at 1200 o’clock sharp. There are five
such columns marching along the main Simferopol roads. An ambulance
accompanies every column: this year a particularly large number of old
people are taking part in the march. There are also many children. And the
midday sun is mercilessly hot.

[Video shows a column of Crimean Tatars chanting Allahu Akbar (God is

Great) and La ilaha il Allah (There is no other God, except Allah) in Arabic.]

[Correspondent] Dozens of buses with policemen are deployed near the
entrances to Simferopol’s central square – the march’s gathering point. The
policemen are languid with the heat. Organizers of the mournful rally have
promised that they will keep their speeches short.

One must not keep people standing under the scorching sun for a long time.
Rally participants are holding placards with slogans, mostly demanding land.
The newly elected Crimean authorities say that land will be distributed
among all those who need it, even the borders of Simferopol will be revised
if needed but, first of all, just another inventory of land should be taken.

[Anatoliy Hrytsenko, Crimean parliament speaker] On the whole, I can see no
problem in allocating land plots among Crimean Tatars. The situation has
been created artificially.

I can assure you that you [pauses, changes tack] I can repeat what I have
said already, that on one hand local authorities are dragging their feet,
and on the other hand, deported people [Crimean Tatars] want to receive land
plots on the Crimean south coast [a prime property area]. This problem is
not only a problem of the deported people, it is a problem of all Crimeans.

[Correspondent] And the head of the Crimean Tatar Majlis, Mustafa
Dzhemilyev, was mostly concerned at the recent statements by Cossacks.

On the eve of 18 May they promised to form vigilante units to patrol the
peninsula’s hot spots of ethnic tension [see report by Black Sea TV,
Simferopol, in Russian 1900 gmt 15 May].

[Mustafa Dzhemilyev] Law-enforcement agencies and local authorities

should take measures, first of all, to curb the activity of these paramilitary
units, so-called Cossacks. Otherwise, if some ethnic group is allowed to
create paramilitary units on an ethnic basis, then the other side will be
compelled to create similar units. [Passage omitted: rally participants
interviewed]

[0021-0330; Video shows a column of Crimean Tatar marching along a
Simferopol street, carrying Crimean Tatar banners, placards with slogans
"The state should distribute farming land fairly among Crimean Tatars",
"Stop land lawlessness in Crimea" and chanting; thousands of Crimean Tatars
flooding Simferopol's central square; the mournful rally; Dzhemilyev and
Hrytsenko interviewed.]                           -30-
————————————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24.                EUROVISION SONG CONTEST: OH, LORDI
             Ukrainian voters vote for Russia, Russians vote for a Ukrainian

REVIEW & OUTLOOK: The Wall Street Journal
New York, New York, Tuesday, May 23, 2006

Forget bureaucratic Brussels, seat of the European Union. The real face of
European unity was on display Saturday night in Athens, this year’s host of
the Eurovision Song Contest.

It’s the EU through a looking glass. For starters, Eurovision is relaxed
about who gets in. No need to prove democratic or free market bona fides
here, or meet geographic litmus tests.

Armenia and Belarus take part, as does Turkey, which won in 2003. Morocco
once competed, and Israel does so every year. For 2006 it fielded a gospel
Group fronted by Eddie Butler, the Israel-born son of black Jews from
Chicago.

The contest, unlike Brussels, is also a model of democracy and transparency.
Winners are chosen by country-by-country call-in votes, in which listeners
may cast their preference with any nation’s band except their own.

Though Eurovision does produce the occasional catchy tune, it’s taken for
granted that most of the songs are bad, while costume designers subscribe

to the principle that there is no such thing as too many sequins. With a level
playing field of kitsch, the voting patterns are an indicator of feeling for
fellow Euro-man.

Some of this year’s voting patterns were surprising. Ukrainian voters gave
their highest rating to Russia, having apparently forgiven the Kremlin’s
hard-nosed gas-pricing policy that threatened to leave millions of
Ukrainians without heat in January. Or maybe they just loved Russian singer
Dima’s staging, which included ballerinas and a woman in white body paint
emerging from a grand piano.

Russian voters returned the affection, giving their second-highest rating to
Tina Karol, Ukraine’s answer to Britney Spears, who performed the pop

tune “Show Me Your Love” with tambourines and folk dancers.

The Turks, meanwhile, gave their second-highest score to a historical
antagonist, Armenia. The countries have no diplomatic relations. But what
goes around evidently comes around: Turkey won top marks from both

France and the Netherlands, whose “no” votes to the EU constitution last
year were partly motivated by fears of future Turkish membership in the
bloc. While most bands chose to sing in English, Sibel Tuzun belted out
disco in her native tongue. Call her Turkey’s Kylie Minogue.

Europeans really united, though, behind the Finnish band Lordi, which
performed, as it always does, in elaborately gruesome monster costumes.
Finland beat second-place Russia by a wide margin, and in a contest
sometimes plagued by regionalism, won top marks from countries as far

away as Britain and Greece.

Europeans may not be able to agree on much these days, but horns and

scales, a lead singer with a sonic growl, and lyrics announcing the
“arockalypse” have brought a troubled Continent together.       -30-
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
25.       UKRAINE TRADE UNIONISTS RALLY AGAINST
                                 ENERGY PRICE HIKES

Associated Press (AP), Kiev, Ukraine, May 24, 2006

KIEV – Thousands of Ukrainian union members jammed the capital’s main

square Wednesday to protest the increase in gas and electricity prices and
demand that this ex-Soviet republic do more to raise its people out of poverty.

President Viktor Yushchenko’s government has increased wages for state
workers in this nation of 47 million, but the increases have been quickly
gobbled up by rising prices for food and utilities.

This month, private consumers saw gas prices jump 25%, and Prime Minister
Yuriy Yekhanurov warned Tuesday that another 50% increase could be on the
horizon. The cost of other communal services, such as electricity, have also
increased.

The sharp increases became a necessity after this year’s gas dispute with
Russia, which led to a twofold increase in the gas price charged to Ukraine.
Ukrainian lawmakers initially pledged that there would be no immediate
impact on the population, and kept the promise until after the March
parliamentary elections.

The protesters, who numbered some 15,000, carried signs reading, “Increase
in prices means an increase in poverty.” Nurses and medical workers, wearing
long white laboratory coats, brushed shoulders with eastern Ukrainian miners
in red hard hats and Communists waving Soviet flags.

Yekhanurov Wednesday ordered the Ministry of Fuel and Energy to explain

the reasons behind the increase and provide comparisons with neighboring
countries, many of which pay more than Ukraine for energy supplies. Ukraine
is one of the biggest gas consumers in Europe, but critics say that huge
amounts are wasted through inefficiency.

Oleksiy Shvetlichny, a member of the Donetsk Union of Metalworkers and
Miners, said he feared that the rising cost of energy could drive some of
Ukraine’s factories and mines out of business. “How much are we supposed

to endure,” he said.                    -30-
————————————————————————————————
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AUR#698 May 16 Rule Of Law In Ukraine After March 2006 Parliamentary Elections; Regions Party Controls Crimea; Belarus Letter; Romania & Bulgaria To EU ?

=========================================================
ACTION UKRAINE REPORT – AUR           
                 An International Newsletter, The Latest, Up-To-Date
                     In-Depth Ukrainian News, Analysis and Commentary

                      Ukrainian History, Culture, Arts, Business, Religion,
         Sports, Government, and Politics, in Ukraine and Around the World       

                        
ACTION UKRAINE REPORT – AUR – Number 698
Mr. E. Morgan Williams, Publisher and Editor  
WASHINGTON, D.C., TUESDAY, MAY 16, 2006 
             -——-  INDEX OF ARTICLES  ——–
           Clicking on the title of any article takes you directly to the article.               
  Return to the Index by clicking on Return to Index at the end of each article

1.       THE RULE OF LAW IN UKRAINE AFTER THE MARCH 2006
                               PARLIAMENTARY ELECTIONS
PRESENTATION: By Judge Bohdan Futey
Embassy of Ukraine, Washington D.C., April 27, 2006
Action Ukraine Report (AUR) #698, Article 1
Washington, D.C., Tuesday, May 16, 2006
 
2.     POLISH VETS TRY TO SAVE MEAT EXPORTS TO UKRAINE
Polish News Bulletin, Warsaw, Poland, Monday, May 15, 2006

3      LEADER OF OPPOSITION BLOC “FOR YANUKOVYCH”

     ELECTED CHAIRMAN OF SUPREME COUNCIL OF CRIMEA
     “For Yanukovych” bloc won 44 of 100 seats in Crimean Parliament 
Interfax-Ukraine news agency, Kiev, in Russian, 12 May 06
BBC Monitoring Service – United Kingdom; Friday, May 12, 2006

4.    UKRAINE’S CRIMEA: “CRISIS APPEARS UNAVOIDABLE”
  Standoff between Crimean Tatars and Slavic residents likely to get worse
ANALYSIS:
By Oleksandr Chalenko, Journalist
Segodnya, Kiev, Ukraine, in Russian 13 May 06; p 3
BBC Monitoring Service – United Kingdom; May 15, 2006

5.    FRENCH BANK SOCIETE GENERALE LOOKING TO EXPAND
              IN UKRAINE THROUGH 100,000 CONSUMER LOANS
Abstracted from Les Echos – France, Monday, May 15, 2006

6.   UKRAINE’S FORUM BANK TO OPEN CZECH REPUBLIC OFFICE
Lenka Ponikelská, Czech Business Weekly
Prague, Czech Republic, Monday, May 15, 2006

7. UKRAINE TO MARK 80TH ANNIVERSARY OF PETLYURA’S DEATH 

Interfax, Kyiv, Ukraine, Monday, May 15, 2006
8. BELARUSSIAN OPPOSITION ASKS UKRAINE TO OFFER UNIVERSITY
   PLACES TO BELARUSSIAN STUDENTS EXPELLED FOR PROTESTING
Associated Press, Kiev, Ukraine, Monday, May 15, 2006

9AN OPEN LETTER FROM THE UKRAINIAN INTELLIGENTSIA TO THE
    PRESIDENT OF UKRAINE ON HUMAN RIGHTS VIOLATIONS IN THE
REPUBLIC OF BELARUS & THE NEED FOR DEMOCRATIC SOLIDARITY
LETTER: Dmytro Potekhin, Director, European Strategy Group
Coordinator, “Know!” Civic Initiative, Kyiv, Ukraine
Action Ukraine Report (AUR) #698, Article 9
Kyiv, Ukraine, Tuesday, May 16, 2006

 
10BELARUS OFFICIALS BARRED FROM VISITING UNITED STATES
Bloomberg, New York, New York, Monday, May 15, 2006

11       CORRUPTION STILL DOGS BULGARIA ON EVE OF EU

                                    RULING ON MEMBERSHIP
 Sofia expected to be admitted, faces call to get tough on crime & dishonesty
Nicholas Watt in Sofia, The Guardian, London, UK, Monday May 15, 2006
 
12.      ROMANIA AND BULGARIA MAY GET EU APPROVAL BY
              ADVANCING BATTLE AGAINST GRAFT AND CRIME  
Bogdan Preda in Bucharest & Elizabeth Konstantinova in Sofia
Bloomberg.com, New York, NY, Tuesday, May 16, 2006
       
13.                     WORLD BRIEFING: RODEO DIPLOMACY
COMMENTARY: By Simon Tisdall, The Guardian
London, United Kingdom, Wednesday, May 10, 2006

14.                                    LOOK WHO’S BACK
ANALYSIS & COMMENTARY: By Andrew C. Kuchins
The Wall Street Journal, New York, NY, Tuesday, May 9, 2006

15           VARIETY.COM REVIEWS: LIGHT FROM THE EAST 
               A ‘Light From the East’ release of a SigmaBleyzer production

By Joe Leydon, Variety.com, New York, New York, Wed, May 10, 2006

16.                                LIGHT FROM THE EAST
By Rory L. Aronsky, FilmThreat.com, Los Angeles, CA, May 1, 2005

17.           FROM LITTLE ACORNS GREAT OAK TREES GROW
                           A strong bond between Ukraine and Wales
LETTER-TO-THE-EDITOR:
from Margaret Siriol Colley
United Kingdom, Subject: Gareth Jones Memorial
Action Ukraine Report #698, Article 17
Washington, D.C., Tuesday, May 16, 2006

18.   COMMEMORATION IN HONOR OF GARETH VAUGHAN JONES
REMARKS: By Lord Elystan Morgan at Aberystwyth University

Aberystwyth, Wales, Tuesday, May 2, 2006

19A MAN NAMED GARETH JONES LIVED HERE 70-ODD YEARS AGO
REMARKS: By Ihor Kharchenko, Ukrainian Ambassador to United Kingdom
At the Commemorative Plaque Unveiling Ceremony for Gareth Jones
University of Wales, Aberystwyth, Wales. Tuesday, 2nd May 2006

20.      THEREFORE I WOULD LIKE TO KNOW THE FULL LIST OF

                    HOLODOMOR AS A CRIME AGAINST HUMANITY
LETTERS-TO-THE-EDITOR: Holodomor
FROM: Luís Ribeiro, History Teacher, Portugal
Action Ukraine Report (AUR) #698, Article 20
Washington, D.C., Tuesday, May 16, 2006

21.           FAMINE-GENOCIDE EXHIBIT IN KYIV FEATURES U.S.

                                    INVESTOR’S COLLECTION                               
By Zenon Zawada, Kyiv Press Bureau, The Ukrainian Weekly
Parsippinany, New Jersey, Sunday, December 11, 2005
 
22.   CENTRAL ASIA EMERGES AS STRATEGIC BATTLEGROUND
THINKING GLOBAL: By Frederick Kempe
The Wall Street Journal, NY, NY, Tuesday, May 16, 2006
========================================================
1
THE RULE OF LAW IN UKRAINE AFTER THE MARCH 2006
                            PARLIAMENTARY ELECTIONS

PRESENTATION: By Judge Bohdan Futey
Embassy of Ukraine, Washington D.C., April 27, 2006
Action Ukraine Report (AUR) #698, Article 1
Washington, D.C., Tuesday, May 16, 2006
 
The winners and losers of the March 2006 parliamentary elections are clear.
The Party of Regions obviously won the popular vote, Tymoshenko’s Bloc did
better than expected, Our Ukraine bloc underperformed, the Communists are
fading away, and Lytvyn’s People’s Bloc was undeniably a loser.

The biggest winner of all, however, were the Ukrainian people because by
general consensus the parliamentary elections of March 2006 were truly
democratic. (1)

In an editorial in the Wall Street Journal Europe, nevertheless, President
Yushchenko acknowledged that problems remain, stating “[c]ultural, religious
and linguistic differences have no place on the political agenda” and that
“[t]he harmonious regional and socio-economic development of our country
is a common goal upon which all parties should be able to agree.” (2)

Although the national elections to Parliament were free and democratic,
there were a number of voting irregularities and possible election fraud at
the local level. (3)  Some recommendations to improve the voting process
include holding parliamentary and local elections at different times,
reducing the number of ballots, and creating a computerized database of
voters.

In addition, NGOs advocate larger polling stations and setting up a national
election center for training polling station commissioners.  One would hope
that although improvements still need to be made, the fact that the
parliamentary elections went so favorably bodes well for the future of
democracy in Ukraine.

The Rule of Law is the lynchpin to promote democracy throughout the world,
and democracy, in turn, will provide a better and more prosperous economic
life.

Article 8 of the Ukrainian Constitution underscores “the principle of the
rule of law is recognized and effective,” but what exactly do we mean when
we say “the rule of law”?  There are many characteristics of the Rule of
Law.

Let me just mention what I consider to be essential.

[1] The supremacy of law, which means that all persons (individuals and
government officials) are subject to the law.  No person is above the law,
regardless of his or her status.
[2] Rule of Law – not “law of the rule”.  (An example of the latter:  Nazi
regime in Germany and the Soviet Union under the Communist Party.)
[3] The source of the law must be the people themselves.
[4] A concept of justice which emphasizes interpersonal adjudication, law
based on standards and the importance of procedures.
[5] President Abraham Lincoln, speaking before Congress in 1861 about the
establishment of the U.S. Court of Claims, said: “It is as much the duty of
government to render prompt justice against itself, in favor of citizens, as
it is to administer the same, between private individuals.”
[6] The importance of preservation of individual liberties: free speech,
peaceful assembly, freedom of press, worship as one pleases, equal
opportunity, due process of law, right to counsel, and independent
judiciary.  Without the courts to assure that human rights, especially those
of minorities or unpopular groups, are enforced, many provisions of the
Constitution will be reduced to pieces of paper.
[7] The doctrine of judicial precedent.
[8] Legislation should be prospective and not retrospective.
[9] A political system based on separation of powers with appropriate
checks and balances.
[10] An independent judiciary.
[11] As there cannot be a market economy without private ownership of
property, there cannot be respect for the Rule of Law unless there is an
independent judiciary.  We look forward to the courts to promote
democracy and the Rule of Law.

The rule of law has flourished in many ways since Ukrainian independence,
for example, freedom of the press had been attained, but the pace at which
it has progressed has been slowed by a number of factors.  The accusations
that corruption still exists in the government is a major roadblock to
establishing a rule of law.  It at least appears that those in power who
hold on to their influence through corrupt means obviously prefer the status
quo.

Furthermore, the loyalties of many still in power lie more with Russia or
pro-Russian forces rather than with Ukraine.  Instead of building up a
democratic and strong Ukraine, they have attempted to steer the country in

a direction that benefits Russia using corruption and putting personal
interests over national ones. (4)

The recent political reform, or at least the manner in which is was adopted,
in my opinion, is a great disservice to encouraging democracy in Ukraine
because it violates the principles of the rule of law and is probably also
unconstitutional. (5)  The political reform that resulted from the Orange
Revolution in many respects transforms the Ukrainian government from a
presidential-parliamentary system to a parliamentary-presidential system.

A few of the major characteristics of the reform are as follows:

[1] The opening session of the Rada will occur thirty (30) days after the
CEC’s publication of the results of the election.  The reform requires the
formation of a majority coalition within thirty (30) days from the opening
session of the Rada.  If no majority coalition is formed the President may
choose to dissolve the Rada.

This does not seem likely because it appears that the blocs and parties that
joined together during the Orange Revolution have once again formed a
coalition that constitutes the majority of seats.

[2] The majority of the Rada will now select most of the ministers, and,
importantly, will propose a candidate for Prime Minister to the President
for nomination.  In addition, the real day-to-day power will be exerted by
the Prime Minister.

Nevertheless, if a government is not formed within sixty (60) days of the
opening session of the Rada the President has the power to dissolve the
Verkhovna Rada.  If this happens, a new election may be held within a short
time. (6)

[3] The President, in his capacity as commander-in-chief and head of foreign
affairs, will now only appoint the ministers of Defense and Foreign Affairs.
The President also appoints the Prosecutor General and the Head of the SBU
(Security Service), but must obtain the consent of the Verkhovna Rada to
dismiss them.

[4] The cabinet of ministers, under the Prime Minister, will be able to
create new ministries and executive agencies instead of the President.

The political reform, which in many ways was left unchallenged, violates the
rule of law tenets.  Therefore, because the political reform changed the
essential characteristics of the government, it should have been submitted
to a national referendum. (7)  Without a referendum, the reform is
unconstitutional.

The were a number of other aspects in the adoption of the reform which
contradict the Constitution.  This of course, brings up the issue of
judicial independence.  Currently, there is no quorum in the Constitutional
Court and, therefore, no way to determine the constitutionality of the
political reform.

Since mid-October 2005, the Constitutional Court has been unable to form a
quorum.  By way of background, there are eighteen judges on the
Constitutional Court.  The President, Council of Judges, and the Verkhovna
Rada each appoint or elect six members to the court.

Eleven judges constitute a quorum at a meeting for purposes of opening or
rejecting a case (at least six judges must vote to open a case), twelve
judges must participate in a plenary meeting, and ten judges must vote in
support of a decision or conclusion on the merits during a plenary meeting.

A crucial problem that has existed for some months is Parliament’s avoidance
of electing its share of judges to the Constitutional Court which has been
postponed from one week to another.

Pursuant to a questionable provision in the Law on the Constitutional Court,
each candidate for the Constitutional Court, regardless of whether he or she
was appointed by the President, or elected by the Verkhovna Rada or the
Council of Judges, must take an oath of office before the Parliament. (8)

Although the Constitution provides for the oath of office of the President
and Rada deputies, the Constitution does not have such requirements for
judges of the Constitutional Court.  The swearing-in requirement, in my
view, therefore, is likely unconstitutional itself because it allows the
vitality of the Constitutional Court to rest in the hands of the Verkhovna
Rada – a clear violation of the separation of powers.

The Law on the Constitutional Court also violates the principle of judicial
independence because by requiring the oath, it gives Parliament oversight
authority that the Constitution does not provide (9) and Article 153 (10) of
the Constitution can not be interpreted as providing authority to require an
oath. Naturally, such a law could be applicable only to judges elected by
the Rada, but not by the President or the Council of Judges.

Since mid-October 2005, however, there has been no quorum at the
Constitutional Court to consider the constitutionality of the swearing in
because the Verkhovna Rada did not schedule a session to swear-in candidates
appointed by the President or the Council of Judges upon the expiration of
certain judges’ terms.

Therefore, the Verkhovna Rada has effectively prevented the operation of
the Constitutional Court by not filling vacancies and not allowing the
appointees assume their seats on the court.  It is difficult to believe that
after the Orange Revolution and its ideals, the Parliament was so negligent
in its duties to have an acting Constitutional Court that is so vital and
crucial to the rule of law in a country.

As I predicted in August 2005, (11) the battling factions currently within
Parliament had difficulty cooperating with each other and the lack of
consensus prevented the placing of a swearing-in ceremony on the
Parliament’s schedule and precluded the attainment of the 226 votes

necessary to schedule a swearing-in ceremony in the event a consensus
was not reached. (12)

To date, no swearing in ceremony has been scheduled (which, as previously
stated, is likely unconstitutional anyway) and the fighting over appointees
continues.

In a recent speech on the anniversary of his inauguration, President
Yushchenko announced to the nation that 2006 would be a year of reform and
that the judicial system would be a key element of change.  In my mind, the
following changes are essential to building a strong judiciary:

1. STRENGTHEN JUDICIAL INDEPENDENCE IN GENERAL
     a. Provide adequate salaries for judges.
     b. Ensure appropriate funding and assistance for courts.
     c. Prompt publication and availability of judicial decisions.
     d. Transparency in decision-making.
     e.  Courts should avoid deciding political questions.  Judges should
be insulated from political pressure as much as possible.
     f.  Judges should not fear from retaliation for deciding cases or be
concerned with salary reductions.
     g. State Court Administration should become a part of the judicial
branch (currently an organ of the executive branch).
     h. The Judiciary needs to have its own constituency, primarily the
legal profession and strong bar associations.  These will be responsible
to expose or oppose coercive tactics upon Judges and enlist the press
on their side.

2. ENFORCEMENT OF JUDICIAL DECISIONS
     a. Lack of enforcement by the executive and legislature must be
addressed.
     b. Part and parcel of a credible, respected and independent judiciary.
     c. Strengthen adherence to the law.
          i.  For example, strict enforcement prohibition on dual mandates.
          ii. Individuals from within the government who are appointed to
              new positions should immediately resign from their prior
              posts.
     d. Domestic and foreign investors will be hesitant to engage in
financial transactions in a country that fails to adequately protect their
rights.  The courts should provide stability to trade and commerce,
foreign and domestic, that the parties will receive impartial judgments for
contracts and commercial dealings.

3. ADOPT CODE OF CONDUCT FOR JUDGES OF UKRAINE
Judicial independence does not mean the Judges do as they choose, but do as
they must in accordance with the Constitution and laws of the country.  In
civil, as well as common law countries, judicial independence in the final
analysis will depend largely on the conscience and courage of the Judges
themselves.

Judges will not be respected until they respect themselves.  Adoption of a
Code of Conduct that is binding and truly regulates judge’s conduct should
proceed as soon as possible. (13)

4. EX-PARTE COMMUNICATIONS
     a. Judges should not only avoid conduct which on its face is improper,
but also conduct which creates an appearance of impropriety.
     b. Courts need to do away with visiting hours where parties can meet
individually with judges behind closed doors without any record.
          i.  Appearance of impropriety is sometimes as damaging as the act
              itself.

5. APPOINTING CHIEF JUDGES
To remove any appearance of impropriety and to avoid political partisanship,
those responsible for judicial reforms in Ukraine should consider adopting
the tenure-based system used in the United States for the selection of Chief
Judges of lower courts. (14)

The implementation of such a system would reduce and minimize the
opportunity for external pressure.  In the event the tenure-based system is
not adopted, Ukraine should consider instituting comparable procedures to
those currently in place at the Constitutional Court and Supreme Court.

Stated another way, lower court judges should elect their Chief Judges
through secret ballots.  Although the tenure-based system and election
system possess obvious advantages, a compromise arrangement at a minimum
could be instituted, perhaps, in the event both procedures are rejected.
The compromise, while not originating completely in any of the systems
discussed above, does incorporate certain aspects contained therein.

6. ELECTION DISPUTES
In 2004, an Administrative Specialized Court was created by statute, its
jurisdiction includes adjudication of election disputes.  This specialized
court system is still in its formative stage and is not yet fully
operational.  A Higher Administrative Court has been established, and the
intermediate appellate Administrative Court is in the process of being
formed.

Nevertheless, the lower specialized administrative courts have not yet been
organized.  In the interim, lower courts of general jurisdiction will still
decide certain elections disputes.  In order to ensure the speedy and
uniform adjudication of election disputes, the government must work to
establish the lower trial courts.  In the past, the issues of jurisdiction
and venue were improperly addressed by the courts in elections disputes.

Some cases were heard in seemingly improper venues; that is, cases were
heard in courts outside of the geographic area in which the alleged acts
took place, examples include the Krihovard Court overturning the results
of the 1998 mayoral election in Odesa and a court in the city of Lviv
invalidating the June 29, 2003 election of the mayor in the City of
Mukachevo.  Other times, the appropriate court refused to take a case.

Therefore, forum shopping was rampant, with parties filing cases with
certain courts because they believed that court would give them the result
they desired.  The Administrative Procedure Code and the Law on the
Election of National Deputies will hopefully resolve the issues of
jurisdiction (subject matter) and venue (geographic area in which a case

will be tried) that have thus far plagued the courts in election disputes.

All of these things must be done in order to improve public confidence in
the judiciary.   Although the Supreme Court’s decision in Yushchenko v. CEC
on December 3, 2004 helped improve the people’s view of the judiciary.

In a survey of Ukrainians taken in April 2005, fifty-seven percent (57%)
strongly or somewhat agree that the judiciary acted correctly during the
presidential election crisis.  Furthermore, sixty percent (60%) think the
Supreme Court was justified in its decision to invalidate the November 21st
election and hold another election in December.

Sixty-two percent (62%) also support its decision to legitimize the December
26th election results. (15)  Clearly, the Supreme Court’s action in this
case was well supported by the people and helped clear the way for a
legitimate election.  Further, in a poll taken two months after the
election, forty one percent (41%) of Ukrainians said their impression of the
judiciary has improved. (16)

A more recent poll, however, shows that this new found confidence has
eroded somewhat. (17)  One would hope that the recent decision by the Higher
Administrative Court in Vitrenko v. CEC on April 26, 2006, will restore
public confidence in the judiciary.

                        THE PROCURATOR GENERAL

The role of the Procurator General is somewhat murky at this point.  Under
the Constitution the responsibilities of the Procurator General are as
follows:
[1] prosecut[e] in court on behalf of the State;
[2] represent[] . . . the interests of a citizen or . . . the State in court
or in cases determined by law;
[3] (3) supervis[e] . . . the observance of laws by bodies that conduct
detective and search activity, inquiry and pre-trial investigation;
[4] (4) supervis[e] . . . the observance of laws in the execution of
judicial decisions in criminal cases, and also in the application of other
measures of coercion related to the restraint of personal liberty of
citizens. (18)
[5] Under the political reform following the Orange Revolution, the
Procurator is now also responsible for enforcing human rights, formerly
the province of the Ombudsman

Given the Ukrainian Constitution’s specific enumeration of the Procurator
General’s powers and given the Office of the Procurator General’s intended
or unintended association with the executive branch, the Procurator General
can not have oversight of the courts.

Stated another way, the Procurator General and, in turn, the executive
branch, through its apparent control over the Procurator General, must not
attempt to implement measures to control the outcome of judicial
adjudications.

Ukraine’s Constitution adopts the principle of separation of powers in
Article 6 and establishes legislative, executive and judicial branches.19
In order to avoid superordination or subordination of the separate branches,
the Ukrainian Constitution provided each branch with a range of checks and
balances over the other branches.

To properly effectuate the principle of separation of powers, however, the
Constitution requires that the branches of government not only be separate
but also, in my view, coequal.  This proposition presupposes that one branch
of government does not exert undue influence over the other and does not
attempt to “oversee” the actions of the other.

While to some “oversight” of the judiciary could appear to be a viable
solution to the perceived problem of judicial shortcomings, in practice it
contravenes the rule of law and undermines judicial independence.  Whether
the so-called control is viewed as positive or negative, it nevertheless
amounts to outside influence, a phenomena which should not be present in any
judicial proceeding.

Plainly stated, “oversight” is a back-handed vehicle by which to influence
judicial decisions.  The Constitution and the laws of Ukraine, however,
provide for and guarantee the independence and immunity of judges. (20)

It cannot be disputed that “[j]ustice in Ukraine is administered exclusively
by the courts.” (21)  Further, the Constitution of Ukraine explicitly prohibits
“[i]nfluencing judges in any manner . . . .” (22)

This provision is incorporated within Article 14 on the Law “On Judiciary in
Ukraine”: “[w]hile administrating justice judges are independent of any
influence, unaccountable to anybody, and subordinated only to the law.”

It is the courts, not the Prosecutor General, that are empowered to decide
legal matters and merits of cases.

In his inaugural address, attended by thousands on Kyiv’s Independence
Square, President Yushchenko explained that although Ukraine has been
independent since 1991, it has only now become free.  He underscored that
an independent judiciary is vital to establishing a civil society based on
the Rule of Law.

President Yushchenko also emphasized that an independent judiciary was
an integral part of his pledge to protect individual rights and fight
corruption.  To fulfill his promise to the citizens of Ukraine, President
Yushchenko, inter alia, appointed a committee on judicial reform.

The motivations behind the appointments were well-intentioned, but the
proceedings of this committee progressed in a  manner that was neither clear
nor transparent, and resonated with an exertion of undue influence and
control over the judiciary.

A new committee  called the National Committee to Strengthen Democracy
and Rule of Law is working under the Ministry of Justice and has recently
produced a concept paper analyzing the nature of justice and the judiciary.

Hopefully, this new committee will be able continue its work free of the
political storm that is sure to descend on the new parliament.  If so,
perhaps it can promote reforms to the judiciary and the rule of law that
will bring Ukraine in line with European standards.

Regardless of which of the leading parties form a coalition, although it
appears that the Orange Revolution allies have once again joined together,
the issues of the geographic divide between Eastern and Western Ukraine,
the cultural and linguistic divides, citizen’s attitudes towards the
ownership of private property, and the integration of Ukraine with the

European Union and NATO or closer ties with Russia must be resolved
as soon as it is feasible.

The resolution of these divisive matters is essential to the security, both
social and economic, and the continued growth of Ukraine’s nascent
democracy.  As the success of the Orange Revolution and the March 2006
elections have shown, the people of Ukraine have passed the test of
democracy, time will only tell if the leaders can continue on this path.

NOTE: April 26, 2006 was the last session the deputies to the Rada of the
Fourth Convocation.  President Yushchenko now finds himself in a very
unusual position.  I have confidence that the President is a true believer
in democracy, but, until the new government is formed, he is in complete
control of the government.  Until the new Rada convenes, there is no
parliament, and currently, there is no quorum in the Constitutional Court.
Only the executive branch is intact.

Although I do not think that the President will abuse the situation, perhaps
at this time he should use his powers as guarantor of the Constitution
(Article 102) to see that the oath of office is administered now to his
appointments to the Constitutional Court and to the judges elected to the
Constitutional Court by the Council of Judges.  This way, a quorum and a
functioning Constitutional Court could exist in order to resolve any
potential disputes that may occur.                       -30-
———————————————————————————————

NOTE: Bohdan A. Futey is a Judge on the U.S. Court of Federal Claims
in Washington, DC and has been active in various Rule of Law and
Democratization Programs in Ukraine since 1991.  He served as an advisor
to the Working Group on Ukraine’s Constitution, adopted June 28, 1996.
Judge Futey served as an official international election observer for the
International Republican Institute (IRI) during the first two rounds of the
Ukrainian presidential election as well as during the repeat second round
and during the Parliamentary Election of March 2006.  AUR EDITOR
————————————————————————————————
                                        FOOTNOTES:
1  Press Release, The International Republican Institute, Ukrainian
Elections Meet International Standards (March 27, 2006); Press Release,
Committee of Voters of Ukraine, Voting Was Conducted Under Free and
Transparent Conditions (March 27, 2006); Press Release, OSCE, Ukrainian
Elections Free and Fair, Consolidating Democratic Breakthrough (March 27,
2006); Former Prime Minister Lauds Ukraine’s ‘First Honest Elections in 15
Years,’ Voice of America, March 29, 2006.
2  Viktor Yushchenko, Op-Ed: State of the Union, Wall Street Journal
Europe, April 3, 2006 at 12.
3  See Press Release, The International Republican Institute, Ukrainian
Elections Meet International Standards (March 27, 2006).  See also Local
elections in Zhytomyr, Vinnytsia, Zaporizhia, and Crimea.
4  Anne Applebaum, Poison and Power in Ukraine, Wash. Post, April 12,
2006, at A17.
5  A number of legal experts and President Yushchenko have questioned the
constitutionality of the amendments.  See, e.g., Serhiy Holovaty: I Believe
the Political Reform Can be Abolished After the New Year,
http://www.pravda.com.ua/en/news/2005/12/29/4954.htm; Ukrainian President
Proposes Political Stabilization Plan in Speech Marking First Anniversary of
his Inauguration, BBC Monitoring Service (UK), January 23, 2006.  See also,
Bohdan A. Futey, Rule of Law in Ukraine: A Step Forward or Backward?
60 The Ukrainian Quarterly 57 (2004).
6  Ukr. Const., arts. 82, 83, 90.  (as amended December 8, 2004)
7  People’s Authority to Amend Constitution, decision by the Constitutional
Court, October 5, 2005
8  Law on the Constitutional Court, art. 17.
9  Ukr. Const., art. 6
10 “The procedure for the organization and operation of the Constitutional
Court of Ukraine, and the procedure for its review of cases, are determined
by law.”  Ukr. Const., art. 153.
11  Bohdan A. Futey, “Crisis in the Constitutional Court of Ukraine:  A
Court Without Judges?” August 18, 2005.
12  Ukr. Const., art. 91 (“The Verkhovna Rada of Ukraine adopts laws,
resolutions, and other acts by the majority of its constitutional
composition . . . .”).
13  In October 2002, a code was adopted but it remains only a formal
declaration.
14  Given the emphasis in the United States on prohibiting a Chief Judge
from holding that office once he or she has reached the age of 70, it may be
worthwhile to reconsider the mandatory retirement age for judges in Ukraine,
which is 65.  Compare 28 U.S.C. § 45(a)(3)(A), (C), and 28 U.S.C. §
136(a)(3)(A), (C), with Ukr. Const. chap. VIII, art. 126(2).
15  See International Foundation For Election Systems, Public Opinion in
Ukraine After the Orange Revolution, April 2005, at 8 (2005)
16  Id.
17  See International Foundation For Election Systems, Public Opinion in
Ukraine After the Orange Revolution, November 2005, at 25 (2005)
18  Ukr. Const. chap. VII, art. 121.
19  Id. chap. I, art. 6 (“State power in Ukraine is exercised on the
principles of its division into legislative, executive and judicial
 power.”).
20  Id. chap. VIII, art. 126; see also id. chap. VII, art. 129 (“In the
administration of justice, judges are independent and subject only to the
law.”).
21  Id. chap. VIII, art. 124.
22  Id. chap. VIII, art. 126.
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2. POLISH VETS TRY TO SAVE MEAT EXPORTS TO UKRAINE

Polish News Bulletin, Warsaw, Poland, Monday, May 15, 2006

WARSAW – Until recently it seemed that nothing could disturb the planned

20 May re-opening of the Ukrainian market to Polish meat. This is what the
Polish and Ukrainian veterinary services agreed upon during their talks on
3-4 May. Meanwhile, the matter does not look too good for Polish exporters.

A lift on the embargo is hanging by a thread, after the Saturday
announcement by Agriculture Minister Andrzej Lepper. He said that the
agreement was only signed by the Polish side. Lepper also said that Ukraine
named a number of conditions Poland still has not met, which gives little
hope for the opening of the Ukrainian market on 20 May.

Chief Vet Krzysztof Jazdzewski and his deputy, Cezary Bogusz, instantly

went to Kiev to explain the matter and tendered their resignations to the
PM, without giving any comment. The meat sector is surprised. 
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3.    LEADER OF OPPOSITION BLOC “FOR YANUKOVYCH”
   ELECTED CHAIRMAN OF SUPREME COUNCIL OF CRIMEA
       “For Yanukovych” bloc won 44 of 100 seats in Crimean Parliament 

Interfax-Ukraine news agency, Kiev, in Russian, 12 May 06
BBC Monitoring Service – United Kingdom; Friday, May 12, 2006

KIEV – The leader of the [opposition] bloc “For Yanukovych”, Anatoliy
Hrytsenko, was elected chairman of the Supreme Council [parliament] of
Crimea today. [Out of 100 Crimean MPs] 71 voted in favour of Hrytsenko’s
candidacy.

Anatoliy Hrytsenko was born in 1958. He is a member of the [opposition]
Party of Regions. In 1989, he graduated from the Crimean agricultural
institute, majoring in economics and business administration in agriculture.

From 1997 to 1998, Hrytsenko was the chairman of the Crimean parliament.
[Passage omitted: In 1998-2005, Hrytsenko occupied various posts in village
councils and district administrations.]

In September 2005, he was elected the first deputy chairman of Crimea’s
Council of Ministers. [Passage omitted: The opposition bloc "For

Yanukovych" won 44 of 100 seats in the Crimean parliament during the 26
March parliamentary election.]                             -30-
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4.    UKRAINE’S CRIMEA: “CRISIS APPEARS UNAVOIDABLE”
 
  Standoff between Crimean Tatars and Slavic residents likely to get worse

ANALYSIS: By Oleksandr Chalenko, Journalist
Segodnya, Kiev, Ukraine, in Russian 13 May 06; p 3
BBC Monitoring Service – United Kingdom; May 15, 2006

What is going on in Crimea? Will the conflict in Partenit and other similar
conflicts continue? Or will emotions subside? Prominent Crimean politicians

from both sides have told Segodnya that they do not rule out the possibility
that the standoff between Crimean Tatars and Slavic residents will aggravate.

Leonid Hrach, the Crimean Communist leader and a former Crimean parliament
speaker (whose pro-Russian sentiment is well known), blames the authorities
in Kiev, saying they are interested in these developments, and also the
Crimean Tatar Majlis [self-styled ethnic assembly].

Hrach believes that the current administration in Ukraine needs the
stand-off to worsen so that it can have a permanent pretext to control the
autonomy and meddle in its affairs. Say, influence the composition of the
local government.

“Look at how supportive [Ukrainian President Viktor] Yushchenko is of the
radical nationalist Crimean Tatar Majlis, which has not been registered
anywhere and whose representatives tour Crimea waving Islamic flags. In
particular, their manifesto says that their aim is to build a national state
of their own in Crimea.

Yushchenko only implores them, ‘dear friends, don’t do this’, but they
persist. No wonder – [Majlis leader] Mustafa Dzhemilev is a member of the
propresidential Our Ukraine faction in parliament,” Hrach said.

Crimean Tatar Majlis leader Mustafa Dzhemilev, for his part, also believes
that tension can increase dramatically in the near future. But the reason is
different, he believes.

“If they go on erecting crosses (worship crosses regularly erected by
Orthodox believers in Crimea – Chalenko) at approaches to local towns, like
the one there currently is outside Feodosiya, we will have to take them
down,” Dzhemilev told us.

He said he also disliked the actions by local Cossacks, who are aided by
brothers-in-arms who came to Crimea from Ukraine, Belarus and Russia. The
Majlis leader sees them as a threat. A Cossack gathering was held in Crimea
yesterday [12 May] to decide what to do next, Dzhemilev said. The Cossacks’
moods are resolute.

It appears as though the situation in Crimea can indeed worsen in the near
future. Ukraine’s interior troops commander, Oleksandr Kikhtenko, told
Segodnya that the situation in Crimea is tense, but controllable.

If it gets worse, the interior troops will act on the minister’s orders –
maintain order (using force, if necessary). But in the mean time, interior
troops’ units are acting as a deterrent and are in the reserve, albeit
stationed not far from the scene.

The Security Service of Ukraine has so far not commented on what is

going on in Crimea – either on state or local level.             -30-
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5. FRENCH BANK SOCIETE GENERALE LOOKING TO EXPAND
           IN UKRAINE THROUGH 100,000 CONSUMER LOANS

Abstracted from Les Echos – France, Monday, May 15, 2006

Societe Generale (SG), the French bank, is planning to issue 100,000 loans
in Ukraine by the end of this year, through its subsidiary Prosto Finance.
The current average loan in the country is for less than $400, but with a
new range of loans for property renovation, it hopes to increase this figure
to $1,500.

Marc Rey, the head of Prosto Finance, has said that an acquisition is also
being considered, but that current prices are too high.
During its first six months in Ukraine, Prosto Finance has targeted loans
for the fast-growing markets of cars and audiovisual products.

It has had to train its 200 staff in the business of consumer credit, a
phenomenon present in Ukraine for just two years, as well as convince
retailers that its services could boost sales. Prosto Finance’s workforce
could quadruple by the end of 2006.  (Original article by F. T.)

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6. UKRAINE’S FORUM BANK TO OPEN CZECH REPUBLIC OFFICE

Lenka Ponikelská, Czech Business Weekly
Prague, Czech Republic, Monday, May 15, 2006

The Ukrainian lender Forum bank plans to open its first foreign
representation in the Czech Republic within a couple of months. The
Kiev-based bank is awaiting the consent of National Bank of Ukraine to
open its Prague office.

“We expect the decision to come in early June and are ready to start
operating immediately after receiving the consent,” Alexis Pavlov, head of
Forum’s international finance department, told CBW in a phone interview.

Forum is opening a Czech branch in order to establish contacts with local
banks and companies and increase the trade exchange between the two
countries. The bank also sees the Czech Republic as a potential gate to the
other European Union markets.

“We might consider opening a full-service branch, depending on the volume

of business we would get,” Pavlov said.

Banks headquartered outside of the EU are obliged to receive consent from
the local banking sector supervisor, like the Czech National Bank (CNB), to
allow them to offer commercial services in the EU zone. Commercial
representation, like Forum’s, can only offer limited services, such as
co-financing of projects and investment activities between the Czech
Republic and Ukraine.

According to Pavlov, Forum has already cooperated with Czech banks and
companies. “We want to increase the cash-flow between the two countries,”

he said, but he declined to give the names of its Czech partners.

Forum currently has no division abroad, but is considering opening
representative offices in Slovakia and Kazakhstan this year. The company

operates 110 subdivisions in Ukraine, offering the full scale of financial
services to retail and corporate customers.

Forum’s net assets were worth UAH 4.4 billion as of April 1, 2006, when its
credit portfolio amounted to nearly UAH 2.9 billion and its own capital
amounted to UAH 473.7 million. The bank ended the first quarter of 2006 with
a net profit of UAH 6.137 million. Net profit for the year 2005 amounted to
UAH 32 million.

The bank is controlled by the Ukraine-based insurance house Provita, which
holds a 58 percent stake in the company.

Apart from Forum, other banks from the post-Soviet region are eyeing the
Czech market to increase business opportunities and enter EU markets via
this country.

Conversbank Financial Group, a Moscow-based financial holding that controls
8 banks in Russia, Lithuania and Latvia, plans to open several subsidiaries
in the Czech Republic this year to offer retail and corporate banking
services. (see “Conversbank to move into CR,” CBW, April 18, 2006).

Another bank with Russian equity, First Czech Russian Bank, has a
representation office in Prague, but is trying to get a license to offer
full banking services in this country. The company, which finances
investment projects and export to Russia, appealed against the decision

last month by CNB not to grant the license.              -30-
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LINK: http://www.cbw.cz/phprs/2006051511.html
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7. UKRAINE TO MARK 80TH ANNIVERSARY OF PETLYURA’S DEATH 
 
Interfax, Kyiv, Ukraine, Monday, May 15, 2006
 
KYIV – Ceremonies  commemorating  the  80th anniversary  of the death
of Symon Petlyura are to be held in Ukraine at the end  of  May, Ukrainian 
Culture and Tourism Minister Ihor Likhovyy told reporters in Kyiv on
Monday.

“Regrettably,  Petlyura’s  personality  is  yet  to find its proper
place, which  would  match  his  contribution  to  the  building  of the
Ukrainian  nation  and  statehood. A political decision has been made at
the highest  level  in  an  attempt  to reverse the widespread custom of
scaring little children with Symon Petlyura,” the minister said “We must
break this stereotype,” he added.

An  organizing committee, to be headed by Likhovyy, has been set up
and an action  plan  has been worked out in cooperation with the Academy
of Sciences  to immortalize the memory of outstanding Ukrainian figures,
Deputy Culture and Tourism Minister Olha Shokalo-Bench said.

The  anniversary  ceremonies  will include a film about Petlyura, a
photo exhibition  called “The Knight of the Ukrainian Revolution” at the
National  History  Museum, a roundtable on the theme “Symon Petlyura – A
Public,  Political and Military Figure of Ukraine” and a memorial plaque
at a site  where a monument to Petlyura is to be unveiled on December 1,
2006.

A number  of  books  devoted  to  his  life  and  work will also be
released. The  city  of  Piltava  will  host  a series of events dedicated to
Petlyura.

Petlyura, a Ukrainian Central Rada deputy, chief military commander
of the Ukrainian   People’s  Republic  in  1917-1918  and  head  of  the
Ukrainian  People’s Republic Directorate in 1919-1920, led the Ukrainian
government  in exile after emigrating in November 1920. In 1923 he moved
to Austria,  and then to Hungary and Switzerland.

 
In 1924, he settled in Paris where  he  was  assassinated  two  years later
by a Ukrainian-born Jewish anarchist Sholom Schwartzbard.  Petlyura is
buried at the Montparnasse cemetery in Paris.           -30-
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8. BELARUSSIAN OPPOSITION ASKS UKRAINE TO OFFER UNIVERSITY
   PLACES TO BELARUSSIAN STUDENTS EXPELLED FOR PROTESTING

Associated Press, Kiev, Ukraine, Monday, May 15, 2006

KIEV – Belarussian opposition activists appealed to Ukraine Monday to offer
some state university places to Belarussian students expelled from their own
universities for protesting against their country’s authoritarian leader.

The activists said they didn’t have exact numbers, but up to 2,000
Belarussians had been arrested for participating in protests against
President Alexander Lukashenko, many of them students. The students have
faced jail time, and many have been thrown out of universities and fired
from their jobs.

“I understand that there might be concern that our children might take the
place of Ukrainians, but it would be an act of international solidarity
between our countries,” said Belarussian activist Tatyana Vanina, head of a
Belarussian group called Rebirth of the Fatherland.

Ukraine’s 2004 Orange Revolution mass protests, which helped usher in a new
pro-Western, reformist leader, were seen as a model by the Belarussian
opposition, which staged similar protests after Lukashenko won a new term in
a March election dismissed by the opposition and Western nations as
illegitimate.

The Belarussian opposition held an unprecedented series of protests, but
they were smaller than the rallies in Ukraine and the tent camp young
demonstrators set up on a central square in the capital Minsk was broken up
by police.

About 100 Belarussians have come to Ukraine and applied for political
asylum, said Vyacheslav Sivchik, head of the Belarussian activist group
Razom.

“The repression has only increased,” said Zmitser Dashkevich, leader of the
Belarussian Youth Front, who was freed from jail Saturday but faces a new
criminal case. Dashkevich planned to return to Belarus, but appealed for
help for those Belarussians who see no alternative but to stay away for the
time being.

Nikolai Ilyin is one of those. He was badly beaten when police broke up the
Minsk tent camp, but managed to escape when police brought him to the
hospital for treatment. He fled to Ukraine, he said, and now he is working
for the Ukrainian branch of Amnesty International.

Ukraine’s Foreign Ministry has mildly criticized Lukashenko but refrained
from harsh censure, raising complaints among Ukrainian activists who had
hoped that President Viktor Yushchenko, a former opposition leader whose
party faced official harassment from the government of former President
Leonid Kuchma, would take a stronger approach.

Ukraine’s Education Ministry refused to comment on the Belarussians’
request, saying it had received no formal appeal. Yushchenko administration
officials couldn’t immediately be reached for comment.

Oleh Yastenko, the head of a Ukrainian students’ group, said his
organization had won assurances from some university rectors to provide
space for Belarussians in daytime and distance learning programs.
Belarussian opposition leaders have made similar appeals to other nations,
including Lithuania and Poland.                     -30-

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==========================================================
9. AN OPEN LETTER FROM THE UKRAINIAN INTELLIGENTSIA TO THE
    PRESIDENT OF UKRAINE ON HUMAN RIGHTS VIOLATIONS IN THE
REPUBLIC OF BELARUS AND THE NEED FOR DEMOCRATIC SOLIDARITY

LETTER: Dmytro Potekhin, Director, European Strategy Group
Coordinator, “Know!” Civic Initiative, Kyiv, Ukraine
Action Ukraine Report (AUR) #698, Article 9
Kyiv, Ukraine, Tuesday, May 16, 2006
Kyiv, Ukraine, May 16, 2006
President of Ukraine Viktor Yushchenko
Dear Mr. President:

In light of recent events in Belarus, we, Ukrainian researchers and
literati, representatives of the media and civic organizations, would like
to turn your attention to the following facts:

The authorities in the Republic of Belarus systematically disregard
fundamental human rights and civil liberties: residents of Belarus are
deprived of the right to free expression of will, freedom of speech,
freedom of peaceful assembly, and freedom of association;

In their battle against the opposition, the regime in Belarus hasn’t
neglected the darkest methods of state terror: abduction and killing of
political adversaries, dispersal of rallies and demonstrations, intimidation
and beating of opposition activists, searches and arrests.

We remind you that on April 6, 1999, Genadz Karpenko, the Deputy
Chairman of the 13th convocation of the Verkhovna Rada of the Republic
of Belarus and presidential candidate from the opposition United People’s
Party, died under mysterious circumstances.

In 1999-2000, well-known oppositionaries Yuriy Zakharanko and Viktor
Ganchar, businessman Anatol Krasovsky, and journalist Zmitser Zavadsky
disappeared without a trace.

The Belarusian authorities have turned the investigations into their
disappearances into a farce.  But the facts indicate that these people are
no longer along the living and the trails to those who ordered their
destruction point to the highest leaders of Belarus.

The global community suspects that the following people are connected to
these crimes: Viktar Sheyman (former Head of the Presidential Administration
of the Republic of Belarus and campaign manager for Oleksandr Lukashenka),
former Minister of Internal Affairs of the Republic of Belarus Yuriy
Sivakov, current Minister of Internal Affairs Vladzimir Navumov, and
commander of the Special Rapid Reaction Detachment Zmitzer Pavlichenka.
The countries of the EU have declared them personae non grata.

Ukraine did not support this resolution

On the night of March 24, 2006, Belarusian OMON stormed the tent city on
Orange Square in Minsk.  Peaceful protesters opposed to the fraudulent
presidential elections in Belarus were brutally beaten, and roughly 400
people – among them Ukrainians – were arrested and jailed.  Systematic
arrests of opposition activists continued up until the pogrom of the tent
city.

According to the lowest figures, over several days Belarusian “law
enforcement” bodies detained over 460 opposition-minded Belarusians.
They also detained and, in best case, deported citizens of third countries,
who the Belarusian authorities suspected in “export of revolution”.

In response, EU foreign ministers declared personae non grata Aliaksandr
Lukashenka and 30 other Belarusian officials, including the Head of
Lukashenka’s administration Genadz Nevyglasa, Education Minister Aliaksandr
Radzkov, Information Minister Uladzimir Rusakevich, Justice Minister Viktar
Halavanov, Head of State Television and Radio Aliaksandr Zimovsky,
Prosecutor General Piotr Miklashevich, and Head of the Belarusian KGB
Stsiapan Sukhorenka.

Ukraine did not support this resolution.

It is clear that persecution of the opposition and violation of human rights
in Belarus will continue, and will likely take on an even more brutal
character.

Dear Mr. President:

We highly respect the fact that Ukraine joined on to several joint EU
resolutions on Belarus, specifically with regard to freedom of speech, and
that Ukraine supported the OSCE’s assessment of the presidential races in
Belarus, thus confirming its choice in favor of civilization and democracy.
However, this was done so hesitantly that it raises doubts as to whether
official Kyiv is capable of consistently embodying its proclaimed
priorities.

The Ukrainian leadership, which regularly refers to the “traditions of
Maidan” and “the Orange Revolution” as one of the main grounds for its
legitimacy, has basically fenced itself off from those who are the true
carriers of the “Spirit of Maidan” in Belarus – from those who with deeds,
rather than words, defend human rights and civil liberties.

The Ukrainian leadership, which declares its agreement on policy with the
EU, which from time to time voices its Euro-integration intentions, and
which doesn’t tire from demanding statements from European structures that
the door is open for Ukraine, has yet been unable to support the EU
resolution on recognizing a list of higher Belarusian officials as personae
non grata.

We realize that Ukraine’s economic and energy dependence prevents it from
expressing overly categorical opinions on foreign policy and firmly standing
up for the unconditional defense of human rights throughout the world, in
particular in Belarus.

However, we stress that no economic interests justify the fact that official
Kyiv consciously closes its eyes to human suffering, the usurpation of power
in Belarus, and the persecution of those who yearn for freedom and who
defend their personal dignity.

In any case, the lack of a solid democratic position on the Belarus issues
makes Ukraine’s role as a truly independent and steadfast mediator between
the West and Belarus – which in your opinion Ukraine should play -
impossible.

In view of this, Mr. President, we affirm:

We are disappointed that in official Kyiv’s relations with official Minsk,
democracy has become betrothed to so-called “pragmatism”, and that
attempts at preserving trade among “traditionally friendly nations” has
resulted in the obvious disregard for the “ideals of Maidan”, the rule of
aw, and European integration.

We don’t understand why individuals involved in the falsification of
elections, political killings and abductions in Belarus, who are forbidden
entry into the EU, US, and EU candidate countries, can travel across
Ukraine freely and relax at Crimean resorts.

Therefore, we – members of the Ukrainian intellectual community, informed
citizens, voters, and after all, taxpayers – urge you Mr. President to
demonstrate your solidarity with the victims of political repression in
Belarus not with words, but with actions in line with the EU – first and
foremost, by forbidding Belarusian human rights violators entry into
Ukraine and travel across its territory.                       -30-
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http://www.znayu.org.ua/index.php?lang=ukr&get=OpenLetter&id=1261
———————————————————————————————-
Dmytro Potekhin, Director, European Strategy Group, http://europe.in.ua
Coordinator, “Know!” Civic Initiative, http://znayu.org.ua
mobile: +380504443345; e-mail: dp@znayu.org.ua
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10. BELARUS OFFICIALS BARRED FROM VISITING UNITED STATES

Bloomberg, New York, New York, Monday, May 15, 2006

WASHINGTON — Belarus government officials will be barred from visiting the
U.S. because the government of President Alexander Lukashenko has failed to
allow the country’s transformation to democracy, U.S. President George W.
Bush said.

The restriction applies to government officials “who formulate, implement,
participate in or benefit from policies or actions, including electoral
fraud, human rights abuses and corruption,” Bush said in a statement issued
today by the White House. Such actions “undermine or injure democratic
institutions or impede the transition to democracy in Belarus.”

Lukashenko, in office since 1994, has been criticized by the U.S, the
European Union, and the United Nations for jailing opposition politicians,
clamping down on the media and changing the constitution to scrap a two-term
limit for the presidency.

Opposition parties have protested since the presidential election in March,
saying the vote was rigged to keep Lukashenko in power. The U.S. joined
European observers in rejecting the results, which Lukashenko won with 82.6
percent of the vote.

The restrictions also apply to people who derive financial benefit from the
policies or actions of the Belarus government, Bush said in his statement.

The U.S. action is to help the people of Belarus “achieve their aspirations
for democracy,” Bush said, citing suppression of human rights and democracy
in Belarus, fraud perpetrated during the election, the detention of
protesters and “persistent acts of corruption by Belarusian government
officials.”
 
                                     TRAVEL CURBS
The EU said in March it would tighten travel curbs on Belarus government
officials after security forces cleared protesters from a square in the
center of the capital, Minsk, where the opposition was protesting the
election result.

The government faced international criticism last month for jailing
opposition leader Alexander Milinkevich, an unsuccessful candidate in last
month’s election. Milinkevich was jailed for 15 days for taking part in a
demonstration initially sanctioned by the authorities.

Belarus, a former Soviet republic of 10 million people, is bordered to the
west and north by EU members Poland, Latvia and Lithuania, to the east by
Russia and by Ukraine to the south.

The country is the last dictatorship in the heart of Europe and its people
want democratic changes, U.S. Secretary of State Condoleezza Rice said in
April. The Belarus government said at the time it wasn’t up to Rice to
decide the future of the country.

Lukashenko extended his term as president after winning a referendum in 1996
and won a second five-year term in elections in 2001. (To contact the
reporter on this story: Paul Tighe in Sydney at ptighe@bloomberg.net).
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http://www.bloomberg.com/apps/news?pid=10000087&sid=anIV9_ZKrSW0
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11.   CORRUPTION STILL DOGS BULGARIA ON EVE OF EU
                                RULING ON MEMBERSHIP
Sofia expected to be admitted, faces call to get tough on crime & dishonesty

Nicholas Watt in Sofia, The Guardian, London, UK, Monday May 15, 2006

Georgi never goes anywhere without a crumpled plastic bag which contains his
most treasured possession. Slowly drawing breath, the stocky builder reaches
inside to take out a well travelled picture of his bubbly looking wife who
was in perfect health until she encountered Bulgaria’s corrupt health
system.

It is nearly two years since Teodora, 30, died in a Sofia hospital after a
massive blood loss while giving birth to a boy, Stilian. Tragic mistakes are
made in hospitals all over the world, but Teodora’s husband blames her death
on a corrupt doctor who, he alleges, induced the birth so he could collect a
£170 bribe.

Teodora’s final hours serve as a grim illustration of endemic corruption in
Bulgaria, which is giving the EU pause for thought before it allows the
Balkans country to join.

Olli Rehn, Europe’s enlargement commissioner, is expected to rule tomorrow
that Bulgaria – and its northerly neighbour Romania – should be admitted to
the EU on January 1, though he will demand greater action against corruption
and organised crime.

Teodora’s family hope that EU membership will improve standards in Bulgaria
to ensure that their experience is not repeated.

In common with families across Bulgaria, they agreed to pay £170 to ensure
that Teodora received proper medical attention. When her doctor warned that
the baby was overdue and should be induced on a Sunday, the family assumed
he was planning to devote even more time to Teodora.

In fact, Teodora had not even started contractions, and his only interest
appeared to be the money: as the only doctor on duty he would receive the
full payment.

Staring blankly at the floor as he recounted the final moments of his wife’s
life, Georgi, 33, said: “The doctor refused Teodora’s request for a
caesarean because he wanted to make the birth look as natural as possible
and avoid questions about why she was admitted to hospital on a Sunday.”

Teodora died the following day after losing 10 litres (more than 17 pints)
of blood, and the family claims that staff at the hospital closed ranks to
protect their gynaecologist by reporting he had done nothing wrong.

“I would not wish this on anyone else. One day I will have to explain to my
son what happened to his mother,” said Georgi , who faces a two-year wait to
see whether his son will be permanently damaged by the birth.

Widespread corruption in Bulgaria’s public services has been a serious cause
of concern for EU officials deciding whether the country is fit to join the
union. A recent report called for greater efforts to make “public services
more resistant towards corruption”.

The report highlighted the disappointment in Brussels, where EU diplomats
had assumed Bulgaria would have less difficulty in meeting the strict
criteria for membership than Romania, which had been slow to embrace reform.

But Bucharest has overtaken Sofia in the past 18 months after a reforming
government attacked corruption and organised crime with a zeal that has
impressed Brussels. Progress has stalled in Bulgaria in the past year,
mainly because the Socialists took months to form a coalition government
after unseating the centre right last summer.

Efforts to stamp out corruption in public services, including the criminal
justice system, and a clampdown on organised crime have suffered.

Klaus Jansen, a German investigator sent by the EU to assess Bulgaria’s
criminal justice system, described Sofia’s efforts to tackle organised crime
as a “total mess”. He warned that sensitive European police information
could end up in the hands of Bulgarian criminals if the country joins the
EU.

Diplomats are nervous because Bulgarian criminal gangs, whose leaders speed
through Sofia in Porsches and Mercedes with trademark darkened windows,
appear to enjoy a charmed existence beyond the reach of the law.

Highly professional snipers carry out contract killings with apparent
impunity for around £20,000 a hit in broad daylight on the streets of Sofia.
Out of 100 such killings in the past 10 years, only one person has been
convicted.

A host of reasons explain why Bulgaria is a haven for criminal gangs.
Perched on the eastern edge of Europe by the Black Sea, it is on the main
drug-smuggling route to western Europe from Afghanistan. It is also a
transit country – and a country of supply – for trafficked women on their
way to western Europe from Moldova, Russia and Ukraine.

As one of the Soviet Union’s poorest satellite states, Bulgaria was
initially slow to embrace market reforms after the collapse of communism.
Just as it started to reform in the mid 1990s Bulgaria was badly hit by the
international blockade imposed on the former Yugoslavia, its western
neighbour.

Rumen Petkov, Bulgaria’s interior minister, freely acknowledges that his
country cannot be given a completely clean bill of health by Brussels.

“This is a real problem,” Mr Petkov said of the low rate of convictions of
contract killers. “These murders are very well planned and organised. It is
quite clear to everyone that it is difficult to solve them. The people who
carry them out are not amateurs, they do not practise in a village.

“I am stating this very honestly because I want Bulgaria to be welcome in
the EU. This means that our partners need to know us well.”

According to Mr Petkov, in the past eight months three contract killings
have been solved – though only one person has been convicted – and five
trafficking gangs have been broken up. A new penal code has been introduced
and a campaign against corruption led to the sacking of 40 civil servants
from the interior and foreign ministries in the first three months of this
year.

“This is a very difficult road,” Mr Petkov said of the reforms demanded by
the EU. “It is very important for us to be able to show the public and to
our European partners that this path is the only way.”

Mr Petkov looks up at a portrait of Vassil Levski, Bulgaria’s national hero
who led the fight against Ottoman rule, as he explains why Bulgaria should
join the EU. “Bulgaria is part of Europe and has given a lot to Europe. This
is where the Ottoman empire was stopped – so it did not reach the rest of
Europe.”

The EU will take a deep breath this week as it acknowledges that Bulgaria
belongs in the European family, said Daniel Cohn-Bendit, the veteran German
Green MEP and former leader of the 1968 student protests in Paris, who
visited last Sofia week. “We are taking a bet – a bet that we will stabilise the

region,” he said.
                                CONDITIONS FOR ENTRY
A series of “red flags” is likely to be imposed on Bulgaria and Romania by
the European commission as the price for allowing them to join the EU on
January 1 2007. Brussels hopes to speed up reforms by warning the two
countries they could be excluded from full EU business in flagged areas.

Bulgaria is expected to face red flags in justice and home affairs after
failing to do enough to tackle crime and corruption in public services.
Romania may face restrictions in areas such as food safety.

Olli Rehn, the European enlargement commissioner, believes they should join
the EU on the original target date because a delay might provoke a backlash
against reform. Their entry cannot be delayed beyond 2008.      -30-

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http://www.guardian.co.uk/international/story/0,,1774781,00.html?gusrc=rss 
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12.  ROMANIA AND BULGARIA MAY GET EU APPROVAL BY
          ADVANCING BATTLE AGAINST GRAFT AND CRIME  

Bogdan Preda in Bucharest & Elizabeth Konstantinova in Sofia
Bloomberg.com, New York, NY, Tuesday, May 16, 2006

Romania and Bulgaria, ranked among the most corrupt countries in Europe,
may learn today they’re on track to join the European Union on Jan. 1,
provided they step up their battle against graft and organized crime.

The European Commission, the EU’s executive arm, will release a report on
the progress of the two Balkan nations at a meeting scheduled to begin at 1
p.m. in Strasbourg. A final decision will be made by EU heads of government
in the autumn.

The two nations, with a combined population of 30 million, have lagged
behind other eastern European states since communism was toppled. The
transition to democracy and free-market economies has been marred by
violence, government and judicial corruption and growing organized-crime
involvement in contract killings, drug-running and people-trafficking.

The commission probably will “take the view that accession should take place
on Jan. 1 but with safeguard clauses that would be reconsidered in the next
several months,” said Geoffrey Van Orden, vice chairman of the European
Parliament’s Foreign Affairs Committee in a telephone interview from
Brussels. The commission has :serious reservations in some areas, but that
doesn’t necessarily mean it’s a signal for delay.”

Any go-ahead may contain conditions that curtail the countries’
participation in EU decisions on areas such as justice, home affairs and
food safety.

Romania ranked 80th in a 2005 league table of corrupt countries compiled by
Transparency International, a Berlin-based watchdog group, with Bulgaria
ranking 55th. On the European continent, only Serbia-Montenegro, Belarus,
Ukraine and Russia were lower than Romania.
                                         EXPANDING EU 
The countries are counting on EU membership to help raise per-capita wealth
from a third of the region’s average. Accession would expand the EU to 27
nations and extend its borders to the Black Sea from the Atlantic Ocean.

In the last expansion, in May 2004, Malta, Cyprus and eight former communist
states joined the EU: Poland, the Czech Republic, Hungary, Slovakia,
Lithuania, Latvia and Estonia and Slovenia.

“It has always been political and it always will be political,” said
Katinka Barysch, chief economist at the London- based research group Centre
for European Reform. “If I was an investor, I wouldn’t focus too much on all
the ups and downs.”

Bulgaria has Europe’s highest per-capita rate of organized crime killings
with police reporting 132 unresolved contract killings in the past five
years, some carried out in broad daylight in the center of the capital,
Sofia.

In response, the Interior and Foreign ministries fired 40 civil servants in
the first quarter while five trafficking gangs have been broken up,
according to the Interior Ministry. The commission will decide whether that
is enough.

                                          RED FLAGS 
“The fight against corruption is an issue in both countries and organized
crime particularly in Bulgaria, and clearly the report will have to focus on
that,” said Jonathan Scheele, the EC head of delegation in Romania, in an
interview in Bucharest.

Concerns about Romania also include the payment system for harmonized EU
value-added taxes, the way agencies will disburse EU agricultural aid,
veterinary standards for livestock and steps to contain infectious diseases
such as mad cow disease.

“If you compare the situation in Hungary and Poland, you’ll notice they had
more so-called red flags six months before entry,” Romanian Prime Minister
Calin Tariceanu told journalists in Bucharest yesterday. “The four matters
that have red flags on them do not threaten accession, and they’re issues
that will be solved before the end of this year anyways.”

Romania and Bulgaria have fallen behind regional peers in attracting
investment. In Bulgaria, foreign direct investment has totaled $13 billion
since 1992, and Romania has lured more than $27 billion since 1990, with
more than half coming since 2001. By comparison, the Czech Republic, which
joined the EU in 2004, has attracted $54 billion since 1993, when it split
from Slovakia.

                                     SLOWING REFORMS 
Any delay in membership may slow the pace of change that has been stoked in
both countries by the prospects of joining the EU.
“I wonder if all the 10 countries of the previous enlargement were better
prepared than we are now,” Simeon Saxe- Coburg, Bulgaria’s ex-king and a
former prime minister, wrote in a May 10 note to Bloomberg. “Bulgaria and
Romania are a stimulating example for the entire region. Only 16 years ago
these countries had a completely different social order.”

A delay would also defer access to EU aid. Romania expects to receive as
much as 1.7 billion euros ($2.2 billion) in the first year after entry and
Bulgaria, which has one-third of Romania’s population, would be entitled to
661 million euros.

Romanian central bank Governor Mugur Isarescu said in a May 12 interview
that a postponement may temporarily hurt the attractiveness of the
countries.

“We hope the commission and the council will adopt a flexible approach,
allowing their timely entry in 2007, without the implementation of safety
clauses,” said Alessandro Profumo, chief executive officer of UniCredit
SpA, Italy’s biggest bank, in an interview. UniCredit controls Bulgaria’s
biggest bank after the merger of Bulbank with HVB Biochimbank.

————————————————————————————————
Bogdan Preda in Bucharest at bpreda@bloomberg.net and 

Elizabeth Konstantinova in Sofia at ekonstantino@bloomberg.net
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13.                 WORLD BRIEFING: RODEO DIPLOMACY

COMMENTARY: By Simon Tisdall, The Guardian
London, United Kingdom, Wednesday, May 10, 2006

Dick Cheney’s just-completed east European rampage left Russia in a rage.
Peppering grapeshot in his inimitable way, the US vice-president accused the
Kremlin of using oil and gas exports to “intimidate and blackmail” European
neighbours; of “interfering with democratic movements” in places such as
Ukraine; and “unfairly and improperly restricting” civil rights.

Mr Cheney’s rodeo diplomacy in Lithuania, Croatia and Kazakhstan, all
formerly in the Soviet sphere of influence, recalled his roots in Wyoming’s
cattle-lands. And his down-home criticisms produced a stampede of uptight
Russian officials angrily shooting back. The old cold war hustler did not
know what he was talking about, they said.

But Sergei Lavrov, Russia’s foreign minister, kept cool. “I believe such
statements won’t undermine efforts we are making together with the United
States . . . to build a fair world without conflicts,” he said. “Russia
expects to be perceived as an equal partner in the world arena without whose
involvement it is impossible to solve a single problem.”

Such calm assurance about Russia’s rightful international role may help
explain Mr Cheney’s frustration. From Vladimir Putin down, Moscow’s
new-century message is that Yeltsin-era weakness has finally been banished.

The Kremlin is a global player once more, whether the issue is Iran or
Hamas, global warming or energy security. Buoyed by an ocean of
petro-dollars and a reviving nationalism, Russia is back – and, Mr Lavrov
implied, the US must deal on its terms.

Pre-emptive US attempts to avoid embarrassment for George Bush at the

July G8 summit, to be hosted by Mr Putin in St Petersburg, illustrate the
changing power balance. Officials have reportedly urged Moscow to bolster
its democratic and free market credentials by easing restrictions on
foreign-funded NGOs and guaranteeing energy supplies. But Russia has
shown scant interest so far.

When Mr Bush called Mr Putin last week to seek his support on Iran, the
Russian leader countered with a demand that talks on Russia’s World Trade
Organisation membership be speedily concluded. Mr Bush promised to help –
meanwhile, Russia is still blocking UN action against Tehran.

Similarly, the US has looked on as Moscow has imposed de facto trade
sanctions on Georgia, encouraged counter-revolution in Ukraine, and moved to
rebuild its influence in central Asia.

According to Irina Yasina of Open Russia, a pro-democracy organisation
founded by the jailed Yukos boss Mikhail Khodorkovsky, Mr Putin’s power

at home is expanding unchecked – and western concerns cut little ice.

‘Putin needs to know when he has to stop – but he doesn’t know,” she said.
“There is no real democratic opposition any more.” Once the Petersburg
summit was over, a new crackdown on NGOs was expected. “When the

good guys leave town, real problems will begin.”

US efforts to rein in Russia are also compromised by America’s chronic
foreign energy addiction – and perceived double standards. Trading on ties
forged during his time as a Halliburton oilman in Texas, Mr Cheney urged
Kazakh leaders to build new pipelines bypassing Russia.

Soft-pedalling on autocratic Kazakhstan’s (and Azerbaijan’s) poor human
rights record was a price he was apparently prepared to pay. But it still
may not be enough to keep Moscow at bay.

Russia’s increased economic and military collaboration with Beijing is
another stumbling block. If Washington pushes him too hard, Mr Putin, like
Richard Nixon in reverse, has a China card to play. Another reason, perhaps,
for Mr Cheney’s well-aimed but unproductive angst.         -30-
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14.                                  LOOK WHO’S BACK

ANALYSIS & COMMENTARY: By Andrew C. Kuchins
The Wall Street Journal, New York, NY, Tuesday, May 9, 2006

U.S. Vice President Richard Cheney made clear last week in Vilnius that he
is not pleased with Russia’s democratic backsliding, human-rights abuses and
rough behavior in its neighborhood. And to hammer the point home Mr.
Cheney then broke bread with the noted democrat, Kazakh President Nursultan
Nazerbayev, who got a complete pass on his dubious record. Alert the media:
We’ve identified double standards in U.S. foreign policy!

But the real story that Mr. Cheney and many in Washington and elsewhere
have a hard time dealing with is that Russia is back in the game. Rapidly
accumulating oil and gas wealth is fueling a new assertiveness in Russian
foreign policy that has been missing for nearly 20 years.

Whatever issue we look at in 2006 — be it Iran, the Middle East peace
process, gas supplies to Europe or accession to the World Trade
Organization — Russia is more confidently defending its interests as it
perceives them far more than two years ago, or even six months ago.

Russia’s previous two decades of geopolitical decline started with the
withdrawal from Afghanistan, and included the disbanding of the Warsaw
Pact and, of course, the collapse of the Soviet Union. But it is possible
that 2005 may be viewed retrospectively as a historical turning point in
Eurasia — the end of Russia’s decline. This recovery might be based on the
shaky foundation of high oil prices, but it’s real nonetheless.

The momentum of “color revolutions” has dissipated as at-risk countries and
their great power supporters have mobilized to prevent further spread. While
falsified elections in Kyrgyzstan resulted in regime change last spring,
subsequent elections in Kazakhstan, Azerbaijan and Belarus have been
effectively managed with incumbent presidents, ruling parties or elites
holding on to power.

Authoritarian ranks are drawing in tighter formation — led by Moscow and
Beijing — with Uzbekistan’s Islam Karimov, Belarus’s Alexander Lukashenko
and others to resist U.S.-led democratization.

The eviction of U.S. military forces in Uzbekistan and the subsequent
signing of a security alliance between the Russian Federation and Uzbekistan
last year also marks a turning point. If one chooses to look at the
U.S.-Russian relationship in Eurasia as a zero-sum game, then what took
place in Uzbekistan marked the first clear victory of Russian interests at
America’s expense.

The durability of this particular victory remains to be seen, but as long as
record-high energy prices fuel Russia’s status both substantively and
symbolically as an energy superpower this competition is likely to persist
if not grow.

The Russians are aggressively playing their energy card to expand economic,
commercial and political influence throughout Europe. They’re playing hard
on the inclinations of France and Germany to appease their great gas
supplier to the east, and to cater to Russian interests at the expense of
new European states, notably Poland and Ukraine.

If oil and gas prices remain high in coming years or even grow, so grows
the leverage of Russia in this region and the world. This is a simple but
powerful formula and certainly one that Mr. Cheney understands.

The Russian recovery is truly impressive. According to Moscow-based
investment bank Troika Dialog, in 1999 Russian GDP in nominal terms was
less than $200 billion; in 2006 it’ll be close to $1 trillion — growing at
a rate of more than 25% per year, though nominal dollar growth rates will

of course taper downward as the ruble appreciates in value.

Since Russia’s wealth is based on strategic commodities — first and
foremost hydrocarbons — rather than information technologies or consumer
goods, Russia’s weight as a strategic, geopolitical player will increase. It
will be able to punch above its weight class to some degree.

There are many questions about Russia’s capacity to be a real “energy
superpower,” something still unprecedented and rather undefined, but we
better take the notion seriously when we consider Russian interests.

Throughout the 20th century, and notably during the second half of the Cold
War, the currency of power was military forces. Remember Stalin’s famous
question about how many divisions the Pope commands? After a 15-year
retreat from power politics, the Russians are returning with a different
instrument, oil and gas. The good news is that oil and especially gas trade
creates mutual dependencies.

To the extent that Europeans can more efficiently use energy and diversify
supply sources (not easy to do in the near term), Russian leverage is
diminished. It would be extraordinarily naive not to expect Russia to try to
use its economic/energy leverage to advance political goals. It is fine to
say “let commercial and market interests decide,” but we should expect
Russian to try to balance commercial with political state interests.

Some, like Mr. Cheney evidently, will interpret Russia’s behavior as
“neo-imperial” — or worse. Maybe it is. But this kind of flexing of
strategic muscles is expected of great powers. And history suggests Russia
is prone to rather rough behavior with its less powerful neighbors. It is as
if the West has forgotten what Russia is like, but now the Russians are
acting like…well, Russians.

Since Russia has been for all intents defensive, if not out of the power
game, for the past 15-20 years, it may now have a tendency to overplay its
cards. The rush of petro-wealth is having the effect of “psychological
steroids” or mega antidepressants on Russian behavior.

There is also a tendency in Washington to overreact to aspects of Putin’s
Russia that America does not like. Instead, the U.S. needs to very carefully
and wisely play its cards to advance its own interests and hold no illusions
about how the Kremlin interprets its interests and the U.S. capacity to
shape those interests.

We seem to be on a slippery slope toward a new Cold War today. We
better get off it, take a deep breath, and think very hard about the real
relationship we want with Russia — not the one we might like to imagine.
——————————————————————————————-
Mr. Kuchins directs the Russian and Eurasian Program at the Carnegie
Endowment for International Peace [CEIP] in Washington, D.C.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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15.      VARIETY.COM REVIEWS: LIGHT FROM THE EAST 
             A ‘Light From the East’ release of a SigmaBleyzer production in
         association with Strike Prods. Produced by Amy Grappell, Christian
             Moore. Executive producers, Michael Bleyzer, Natasha Bleyzer.
             Co-producer, Chris Krager. Directed, written by Amy Grappell.

By Joe Leydon, Variety.com, New York, New York, Wed, May 10, 2006

‘Light From the East’ follows a group of American actors in the former
Soviet Union.

Though it covers widely reported events more than 15 years after the fact,
“Light From the East” generates genuine suspense as it follows a group of
American actors in the former Soviet Union during a fateful period of the
Perestroika era.

Illuminating time-capsule doc boasts impressive technical polish, and could
find receptive auds in commercial and nonprofit venues after its May 11-17
premiere run at New York’s Two Boots Pioneer Theater.

The year is 1991, and bad timing turns out to be good fortune for helmer
Amy Grappell. She and other members of New York’s La Mama Theater are
in the Ukraine to take part in a bilingual stage production with Ukrainian
counterparts when the attempted coup in Moscow threatens to drag the
region back to the bad old days.

Grappell starts out an inquisitive tourist, asking locals how they feel
about freedom after decades of Soviet rule. Helmer’s host, prickly and
pessimistic dramaturge Natalia Shevchenko, is supposed to provide literal
translation during interviews.

More often than not, however, Shevchenko instead offers cynical commentary
concerning respondents who care more about whether store shelves are full
than they do about freedom of expression.

Doc’s tone changes dramatically as reports circulate that Gorbachev has
disappeared, the Kremlin has been overthrown, and power now lies in the
hands of a few military men. Shocked — and, perhaps, more than a little
frightened — the helmer asks Shevchenko: “Does this happen often?”

The stranger-than-fiction irony: At a time that was filled with dark
portents of renewed repression, increasingly anxious U.S. and Ukrainian
thesps were collaborating on a play about Les Aurbas, a maverick theater
artist who rebelled against Soviet Realism and was killed during a 1937
Stalinist purge.

By the time the actors complete their limited run, the coup has been turned
back, Ukraine declares its independence — and “Light From the East”
demonstrates that, on stage on off, nothing is more satisfying than a happy
ending.

Camera (color), Christian Moore; editors, Kyle Henry, Leah Marino; sound,
Eric Friend; associate producers: Mark Rudkin, Rina Rudkin, Kevin Pruitt,
Kyle Henry. Reviewed on videocassette, Houston, May 7, 2006. Running
time: 73 MIN.                                  -30-
———————————————————————————————–

———————————————————————————————–
  FILM SHOWING IN NYC THU MAY 11 THROUGH WED MAY 17
The Two Boots Pioneer Theatre, 155 East 3rd Street, between
Avenues A and B (closer to A), New York City, (212) 591-0434
 
Thurs May 11 9pm; Fri May 12 9pm; Sat May 13 9pm
Sun May 14 9pm; Mon May 15 9pm; Tues May 16 9pm
Weds May 17 9 pm

Advance tickets: click by showtime or call (800) 595 4849 (service
charges do apply) admission $9 (members $6.50)
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16.                                 LIGHT FROM THE EAST

By Rory L. Aronsky, FilmThreat.com, Los Angeles, CA, May 1, 2005

While President Bush I went about his daily business in 1991, receiving
briefings on the escalating situation in the Ukraine, Amy Grappell was there
as part of an acting troupe that sought to present and celebrate the life of
pioneer Ukrainian theater artist Les Kurbas in a bilingual production
encompassing the American actors and their Ukrainian counterparts.

In fact, Grappell had arrived on the heels of celebration. It was enough to
take great joy in being part of this production, “Light from the East”, but
her camera soon captured the elation of the people of Ukraine, where Mikhail
Gorbachev was soon to sign a treaty that would push more power into the
hands of the republics.

Grappell roomed with Natalia Schevchenko, a theater historian, who becomes
a hugely important part of this documentary. At first, it seems odd that
Grappell doesn’t show a lot of footage of the rehearsals for this play, but
then the parallels between Kurbas and the current situation grow.

Soon the Ukrainian people are in an uproar, to which Grappell awakens to, as
it is learned that Gorbachev was booted from power, replaced by a military
government calling themselves the “Group for Extreme Measures”.

The drama here is in the words, in the concern running rampant through this
troupe, even going so far as to affect member Peter McCabe so deeply that he
heads back home just in case anything more dangerous should transpire. At
the beginning, he’s already homesick, but this is enough to get him back
there quicker.

Grappell is an amazing force in this documentary, as much as anyone else in
it. In shaping it as she has, with the help of editors Kyle Henry and Leah
Marino, it is not only a journey of expression, but also that of freedom,
change, and new lives shedding themselves of the old ones.

In this case, it’s about the end of being chained to the principles of the
Soviet Union. More than that, these Ukrainians live heftier lives than we do.
Everything that we want is available for us without fail. Looking at how
they live, how they fight for their right to be people (they even go on a
massive march at the risk of death to proclaim their desire to be free of
communism once and for all), they are heroes for the world.

They want lives that they can live, not lives that are merely tolerable.
“Light from the East” also makes note of what has amazed me over all these
years. We live under the same skies, and we all are of the same types. With
varying exceptions, we all have the ten-fingers-ten-toes package. We are
either men or women. But this world truly is different everywhere.

Consider seeing this at a film festival, in comfortable seats, watching
these various political situations unfold. Indeed the world is very
different in that way. People like Amy Grappell should be highly honored
for showing those parts of the world that we do not know, despite news
networks insisting otherwise.                      -30-
———————————————————————————————-
LINK: http://www.filmthreat.com/index.php?section=reviews&Id=7234
URL http://www.twoboots.com/pioneer/europe.htm#Light
Film URL www.lightfromtheeast.com
Film Trailer http://www.lightfromtheeast.com/trailer.htm
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
17.      FROM LITTLE ACORNS GREAT OAK TREES GROW
                          A strong bond between Ukraine and Wales

LETTER-TO-THE-EDITOR: from Margaret Siriol Colley
United Kingdom, Subject: Gareth Jones Memorial
Action Ukraine Report #698, Article 17
Washington, D.C., Tuesday, May 16, 2006

Dear Morgan,

How long ago was it that you found Gareth’s name on the website
http://www.garethjones.org. and contacted me?  The memorial plaque
unveiled in the great hall, know as the Quad in the University of
Aberystwyth was the climax of your discovery.

It was all that we could have asked for; now Gareth is remembered by
Wales as well as the Ukrainians both in their own country and further
a-field.

Gareth is no longer airbrushed out of history. I only regret that his
parents, Major Edgar Jones and Mrs. Annie Gwen Jones did not live to see
him recognized as he was last Tuesday in a most remarkable ceremony.

The Service in the College Chapel was very moving both in the speech by
Lord Elstan Morgan, but also in the prayers of the Ukrainian Orthodox
Priests.

The plaque was very impressive and notable in the fact that it was in three
languages, Ukrainian, Welsh and English.  Already there is a bond between
Ukraine and Wales in the fact that Donetsk is a city founded by the
Welshman, John Hughes and with whose family my grandmother lived, but
today the bond has been cemented even further.

The memorable ceremony laid down the foundation for further cooperation
between the two nations.  This was very evident in a very friendly but
somewhat joyous day, which celebrated his life.  We must not forget though
the millions who died in the Holodomor.

Prof Lubomyr Luciuk did an excellent job in arranging the plaque. It could
not have been more fitting to the occasion and to Gareth.  We must also
thank the vice Chancellor, Prof Noel Lloyd for the honour of allowing the
plaque to be erected in the University of Aberystwyth.

I thank you for being the acorn from which this wonderful event grew. The
culmination of all we could have wished for Gareth.

Yours most gratefully  Siriol Colley
[Niece of Gareth Jones, Welsh journalist]
—————————————————————————————————-
FOOTNOTE:  My heritage on both sides of the family is Welsh.  The
Welsh families came to the United States after the Civil War and settled
in Iowa and Missouri.  The Iowa family went into coal mining and the
Missouri family in farming.  I congratulate Margaret Siriol Colley and her

son, Nigel Colley, on the outstanding work they have done with the legacy
and archives of Gareth Jones.  It was a pleasure for me to discover their
new website a few years ago and then spread the information as far as I
could about Gareth Jones and the work of the Colley’s. AUR EDITOR
————————————————————————————————
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18. COMMEMORATION IN HONOR OF GARETH VAUGHAN JONES

REMARKS: By Lord Elystan Morgan at Aberystwyth University
Aberystwyth, Wales, Tuesday, May 2, 2006

May I on behalf of the Council of Aberystwyth University and the public
officers extend to you all the warmest and the sincerest welcome. Croeso.

We are very gratefully privileged to attend this event in commemoration and
thanks-giving for the life of a young man of integrity and honour, of
brilliance and of courage. We are pleased enormously that you have chosen
Aberystwyth as the appropriate locality.

Not only in the light of the fact that not only did Gareth Vaughan Jones
graduate here, but indeed that that was also the case with his father, Major
Edgar Jones, with his mother Mrs Gwen Jones and indeed both his sisters,
Gwyneth and Eirian were also graduates of Aberystwyth.  So the link between
the family and the Alma Mater is indeed a very, very close and warm one.

There are other persons far better more qualified than myself who will speak
later of the detailed aspects of Gareth Vaughan Jones’ life.

But we at this stage all tender our grateful thanks to Almighty God for the
strength, for the inspiration, the steadfastness with which this young man
relentlessly and valiantly pursued the holy grail of truth, thereby causing
the exposure of evil and oppression.

His assiduous studies of the cultural and economic trends his day. His deep
understanding of diplomatic intrigues and his finely honed intelligence and
his hunter’s instinct for significant news; all combined to place him, young
though he was, at the very pinnacle of his profession.

But it was, I believe, his messianic and remorseless determination to place
bravely and challengingly before the world the evidence of tyrannical greed
and power leading to atrocities of mass murder on a wholly unbelievable
scale that was the heart core and kernel of his very being. It was his
absolute dedication to such ends that led to his murder in captivity on
August 12th 1935, ironically on the eve of his thirtieth birthday.

The world today is a far reduced and accessible place than it was 70 years
ago.  Advances in mass communication have given the journalist a greater
range and impact than ever before. But the pursuit of factual truth is
nevertheless, an end in itself and the eternal commission for humankind.

It is a formidable dread that is constantly at the elbow of the tyrant and
the dictator – it is the fearful Achilles heel of every conspiracy to stifle
embarrassing and damaging facts.

Even the most flagrant actions can only be hidden for a period.

Frances Bacon, will be known to many of you, Bacon, the philosopher, the
Lord Chancellor, the essayist, said “truth is the daughter of kind and not
of authority, her birth may be delayed, but never totally frustrated.  No
edict from the most powerful source can ever suppress the voice.”

The capacity to expose to tyranny in all its obscene and terrifying forms is
the one of the fundamental elementals of human freedom and justice. The most
enlightened international laws, the most noble declarations of human rights,
the most carefully crafted treaties can never of themselves guarantee peace,
and justice and freedom for the people of this earth.

It is only the relentless and unremitting energy and commitment of the
investigative journalist that can breath the breath of life and emotion into
the cold clay and dry bones of such institutions.

Gareth Vaughan Jones did exactly that; in the prime of his life and at the
zenith of his powers. He gave to the world his foresight of the cataclysmic
potential of the Nazi powers.

He spelt out the massive atrocities of Japanese aggrandisement in China.

In relation to Russia, he already made himself fluent in that language. The
Ukraine held a very specialist place for him due to the fact that this
mother has lived there as young woman for some three years in Hughesovka

now Donetsk as a governess to the children of Hughes himself [Hughes was
a Welsh coal baron who developed coal mining in Ukraine at the request of
the Czar. AUR Editor]

His travels in the Ukraine in the early 1930’s led to him broadcast in the
press to the whole world, the brutal truth of the callous liquidation of
many millions of Ukrainians, probably between five and ten million in total,
a mass murder which went under the name of Agricultural Collectivisation and
which was of course, the very foundation of Five-Year Plan of Stalin, 1928
to 1933.

To the world it was a stain on name of human kind. To many of you here, you
have indeed been brought up in the very shadow of that unspeakable tragedy.

Gareth Jones spoke not as a political advocate, but as a witness of truth.
Soviet propagandists after his death sought in every way to try and demean
and denigrate his record, but it was a pathetic failure on their part.  His
investigative zeal, his lust for truth continued up to his death in Inner
Mongolia in 1935.

We may very well never know what dark and deepest forces of evil combined

to perpetrate his murder in captivity. David Lloyd George for whom he had
worked in relation to Foreign Affairs for some years described that area as
a “cauldron of political intrigue”. What we do know is that Gareth Vaughan
Jones’s name is flit large in annals of integrity and courage

The University is proud to honour him as one of the bravest and most
distinguished of its sons.

The Nation of Wales revels in the fact that he has enriched our nationhood
in such a splendid and unique way.

“Not gold but only men can make, a Nation rich and strong,
Men who for truth and for honours sake stand fast and suffer long
Brave men who work while others sleep, who stand while others fly..
They build a nation’s pillars deep and raise them to the sky.”

Gareth Vaughan Jones was such a man – We humbly thank Almighty God

for his life and sacrifice.                               -30-
————————————————————————————————
LINK: http://garethjones.org/gareth_jones_commemoration_elystan.htm 
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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19. A MAN NAMED GARETH JONES LIVED HERE 70-ODD YEARS AGO

REMARKS: By Ihor Kharchenko, Ukrainian Ambassador to UK
At the Commemorative Plaque Unveiling Ceremony for Gareth Jones
University of Wales, Aberystwyth, Wales. Tuesday, 2nd May 2006

Thank you very much Mr Vice Chancellor, since I have only been in the
country of Wales for two hours, I promise that next time I come here I will
be able to speak at least a couple of phrases in Welsh, as it is difficult
for me now.

May I complete the reading of the inscription on the plaque because we have
heard it in two languages; both Welsh and English and as I bet it is the
first Ukrainian script in Aberystwyth, I would now like to proudly read it
in Ukrainian:

“In Memory of Gareth Richard Vaughn Jones, born 1905, who graduated

from the University of Aberystwyth and the University of Cambridge. One
of the first journalists to report on the Holodomor, the Great Famine of
1932-33 in the Soviet Ukraine.”

I am really proud to be here in Wales and when driving up from London this
morning I was thinking about why people holding British, Canadian and
Ukrainian passports would gather here for this occasion in Aberystwyth,
Wales?

Why? Because, a man named Gareth Jones lived here 70-odd years ago? 

Yes, but not only.

Is it because Ukraine is now free and Wales is living through a remarkable
part of its history and we are now free to co-operate together? Yes, but not
only.

I think it would be good to recall that in Ukraine we have a novel in the
school curriculum written by the renowned Ukrainian author, Mychailo
Stelmach, entitled; “The Evil and the Truth” and I think in the remarks of
the sermon earlier this morning [by Lord Elystan Morgan], the President of
the University of Wales was recalling some common points of wisdom and
most appropriate as to why people from over the ocean, from different
cities and members of the public all came here.

Ukraine lived through a very difficult period of history in the 20th
century. We had more evils than truths and that is why Ukrainians will
always be grateful for every word of truth that has been broadcasted in
their countries and for this reason I am personally grateful to all
Ukrainian institutions and organisations, the University of Wales here in
Aberystwyth and members of the family who made this occasion happen.

I believe all of us standing here today, making their way to this place,
just to signify the point of common wisdom that reads, ‘truth will finally
prevail’.

And I think this is a valid occasion for us all to gather here together at
the University of Wales, Aberystwyth. Thank you very much.  -30-
————————————————————————————————
LINK: http://garethjones.org/gareth_jones_commemoration_kharchenko.htm
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
20. THEREFORE I WOULD LIKE TO KNOW THE FULL LIST OF

      TWENTY (?) COUNTRIES WHO HAVE CONDEMNED THE
             HOLODOMOR AS A CRIME AGAINST HUMANITY

LETTER-TO-THE-EDITOR: Holodomor
FROM: Luís Ribeiro, History Teacher, Portugal
Action Ukraine Report (AUR) #698, Article 20
Washington, D.C., Tuesday, May 16, 2006

Dear Friends,

I have a enormous interest about Ukraine, specially about the Holodomor
and this genocidal nature.

Therefore I want to promote, in Portugal, the political recognition of this
genocide, honoring the great, peaceful and respectable Ukrainian community
(68.000 persons).

Some countries or international organizations have already recognized the
1932-1933 famine (Holodomor) as an act of genocide or a political crime
against the Ukrainian nation:

ARGENTINA – Resolution of the Senate: “Declaración rindiendo homenaje a
las victimas de la hambruna provocada por el regimen sovietico en 1932 y
1933 en Ucrania” (n.º 1278/03-17/09/2003) and the new resolution proposal: “
Proyecto de Declaración rindiendo homenaje a las victimas provocadas por la
hambruna artificial en Ucrania, al conmemorarse un nuevo aniversario” ( n.º
3659/05 -14/11/2005);

AUSTRALIA – Resolution of the Senate: “Ukrainian Famine” (n.º
680 -31/10/2003);

BELGIUM – Resolution proposal of the Chamber of Deputies: “Proposition
de résolution relative à la reconnaissance de la famine organisée en Ukraine
par le régime stalinien” (n.º 51-2034/1-27/10/2005) and resolution proposal
of the Senate :”Proposition de résolution visant à reconnaître la famine
organisée en Ukraine par le régime stalinien” (n.º 3-452/1-20/04/2004);

CANADA – Resolution of the Senate: “The Genocide of Ukrainians”
(19/06/2003);

ESTONIA – Resolution of the State Assembly: “Riigikogu Avaldus”
(20/10/1993);

FRANCE – (not submitted) Resolution proposal of the Senate: “Proposition
de Loi relative à la reconnaissance du génocide ukrainien de 1932 à 1933″
(n.º 317-10/05/2001);

GEORGIA – Resolution of the Parliament: “On Perpetuation of the Memory
of Victims of the Political Repressions/Genocide in Ukraine in 1932-1933″
(20/12/2005);

HUNGARY – Resolution of the National Assembly: “Országgyulési határozati
javaslat az 1932-33. évi nagy ukrajnai éhínség 70. évfordulójára” (n.º
129/2003 – 26/11/2003);

ITALY – Resolution of the Chamber of Deputies (3th Foreign Affairs
Commission):”Stalinismo,  Unione  delle Repubbliche  Socialiste Sovietiche”
(n.º 7/0038 -22/03/2004);

LITHUANIA – Resolution of the Parliament: “Statement on the Commemoration
of the Victims of Political Repressions and Famine/Genocide in Ukraine in
1932-1933″ (24/11/2005);

POLAND – Resolution of the Senate: “W Sprawie Rocznicy Wielkiego Glodu

na Ukrainie” (n.º 90 S -17/03/2006);

SPAIN – Resolution of the Basque Parliament: “En recuerdo y condena del 70
aniversario de la hambruna genocida de Ucrania 1932-33″ (01/10/2003) and
(not submitted) resolution proposal of Congress of Deputies:” Proposición no
de Ley sobre el recuerdo y condena del 70 Aniversario de la Hambruna
Genocida de Ucrania” (n.º 161/002269 – 16/09/2003);

UKRAINE – Resolution of the Supreme Council:”Address of the Verkhovna
Rada to the Ukrainian nation on commemorating the victims of Holodomor
1932-1933″ (n.º 789-IV- 15/05/2003);

U.S.A. – House Representatives Resolution: “Expressing the sense of the
House of Representatives regarding the man-made famine that occurred in
Ukraine in 1932-1933″ (HR 356-20/10/2003) and House Representatives
Resolution: “To authorize the Government of Ukraine to establish a memorial
on Federal land in the District of Columbia to honor the victims of the
manmade famine that occurred in Ukraine in 1932-1933″ (HR 562 -16/11/2005);
Senate Resolution: “Expressing the sense of the Senate regarding the
genocidal Ukraine Famine of 1932-33″ (S. RES. 202 – 28/07/2003) referred to
the Committee on Foreign Relations;

VATICAN – Statement by Pope John Paul II on the 70th anniversary of the
Famine  (23/11/2003);

COUNCIL OF EUROPE – Resolution of the Parliamentary Assembly: “Need
for international condemnation of crimes of totalitarian communist regimes”
(n.º 1481-25/01/2006) including the starvation;

EUROPEAN UNION – (not submitted) Resolution proposal of the European
Parliament: “Propuesta de resolución del Parlamento Europeo sobre el 70
aniversario de la hambruna artificial en Ucrania” (B5-0396/2003 -
01/09/2003);

UNITED NATIONS – “Joint Statement on the Great Famine of 1932-1933 in
Ukraine (Holodomor)” (A/C.3/58/9 – 10/11/2003).
Joint statement by the delegations of Azerbaijan, Bangladesh, Belarus,
Benin, Bosnia and Herzegovina, Canada, Egypt, Georgia, Guatemala, Jamaica,
Kazakhstan, Mongolia, Nauru, Pakistan, Qatar, the Republic of Moldova, the
Russian Federation, Saudi Arabia, the Sudan, the Syrian Arab Republic,
Tajikistan, Timor-Leste, Ukraine, the United Arab Emirates, the United
States of America, Argentina, the Islamic Republic of Iran, Kuwait,
Kyrgyzstan, Nepal, Peru, the Republic of Korea, South Africa, the former
Yugoslav Republic of Macedonia, Turkmenistan and Uzbekistan on the
seventieth anniversary of the Great Famine of 1932-1933 in Ukraine
(Holodomor).

Therefore I would like to know the full list of twenty(?) countries who have
condemned the Holodomor as a crime against Humanity.

Respectfully,  Luís Ribeiro

(History teacher – Portugal) (luismatosribeiro@yahoo.com.br)
————————————————————————————————
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21. FAMINE-GENOCIDE EXHIBIT IN KYIV FEATURES U.S.
                                  INVESTOR’S COLLECTION

By Zenon Zawada, Kyiv Press Bureau, The Ukrainian Weekly
Parsippany, New Jersey, Sunday, December 11, 2005

KYIV – Among the biggest contributors to the Famine-Genocide exhibit
unveiled by President Viktor Yushchenko in Kyiv two weeks ago was

Morgan Williams, a prominent Ukrainophile.

Mr. Williams spent the last eight years accumulating and organizing what is
now the world’s largest known private collection of Holodomor artwork.

His collection consists of 300 items, including more than 100 posters and
35 paintings.

Having spent 25 years in international food system development, Mr. Williams
said he was deeply affected when he began learning the details about the
Holodomor. His first trip to Ukraine was in 1992 and by 1995 all his
professional work involved Ukraine, including investing and consulting.

“There were no photos from the Famine, and no one was allowed to write,
publish, or paint anything about this up until 1988,” Mr. Williams said.
“The suppression of facts that took place is amazing, and everything
exposing it was done outside of Ukraine.”

Mr. Williams’ exhibit was displayed between November 23 and 28 on the

second floor of the Ukrayinskyi Dim on European Square in Kyiv. Mr.
Yushchenko opened “The Bells of Remembrance” exhibit on its first day.

Among those pieces of artwork from his collection that most impressed the
president, Mr. Williams said, was a poster titled, “And We Watched and

Kept Silent.” It portrays a black crow with red eyes picking at a red thread
in Ukrainian embroidery, symbolizing death picking apart the fabric of
Ukrainian society.

Posters became a popular form of Holodomor art between 1988 and 1993

largely because the industry that churned out the massive volumes of Soviet
propaganda went bankrupt after the Soviet Union’s collapse. With production
means still intact and a cultural void to fill, poster artists began creating art
about the Chornobyl disaster and the Holodomor of 1932-1933, Mr. Williams
said.

Another poster impressing Mr. Yushchenko featured the slogan, “No One

Wanted to Die” against a blue-and-yellow background, with wheat fields and
crosses portrayed in the bottom half.

Mr. Williams’ collection  featured a lot of diaspora poster art, including
two postcards printed in 1948 by Ukrainians in Germany. “It was one of the
first visual expressions of Ukrainian protesting the famine,” he said of the
postcards, which he found the postcards in a Ukrainian museum in
Connecticut.

Other diaspora items included a program cover from a 1983 commemoration
event organized by the Winnipeg branch of the Ukrainian Canadian Committee
(today known as the Ukrainian Canadian Congress), as well as a poster
announcing the October 2, 1983 demonstration in Washington. With between
15,000 and 20,000 in attendance, the manifestation became one of the
largest gatherings of Ukrainian Americans in history.

Among the most recognizable paintings in Mr. Williams’ collection were those
of Viktor Zaretskyi, the husband of murdered Soviet dissident Alla Horska;
Kyiv artist Nina Marchenko, who painted four large oil canvas paintings
depicting rural scenes of starvation; and the late Holodomor survivor
Volodymyr Kutkin, who painted a somber scene of a crow sitting on a man

who had died trying to escape from his village to the city.

Aside from Holodomor art, Mr. Williams also displayed 300 works of folk

art to demonstrate what life was like in Ukrainian villages before the ruinous
genocide perpetrated by Soviet authorities.

Mr. Williams used many of his own funds to compile his collection, a figure
he declined to name. But he also received help and financial contributions
from the Ukrainian Orthodox Church of the U.S.A. the Ukrainian Federation

of America and the Bahriany Foundation [and the Swift Foundation].

Mr. Williams was born November 26, 1939, in Kansas, a state that bears “a
lot of similarities to Ukraine,” he said. Between 1997 and 1999, he ran an
agricultural development finance company. It folded when French banking

firm Societe Generale decided Ukraine was too risky an investment.

Since then, he has offered business and investment consulting services. He
is currently director of government affairs [Washington office] for

SigmaBleyzer, a private equity investment management company.  -30-
————————————————————————————————
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22. CENTRAL ASIA EMERGES AS STRATEGIC BATTLEGROUND

THINKING GLOBAL
: By Frederick Kempe
The Wall Street Journal, NY, NY, Tuesday, May 16, 2006

Central Asia, site of the 19th-century “Great Game” for supremacy between
the British Empire and czarist Russia, is emerging with its oil and gas
riches as the first strategic battleground of the “Multipolar Era” among the
U.S., China and Moscow.

The Cold War ended in 1990, and the dominance of the U.S. since then is fast
eroding. Now a globally rising China, an oil-intoxicated Russia and the U.S.
are locking horns in a struggle for resources and influence in Central Asia,
a region that regained its global strategic importance after its five states
gained independence from the Soviet Union in 1991.

Dick Cheney got plenty of press for his recent Russia-bashing speech in
independent Lithuania, a former Soviet state. Yet of greater note was the
vice president’s less-ballyhooed next stop in Central Asia’s Kazakhstan,
where he signaled a U.S. policy shift beyond rhetoric to actions aimed at
countering what he called Russian President Vladimir Putin’s use of oil and
gas as “tools of intimidation or blackmail, either by supply manipulation or
attempts to monopolize transportation.”

Former oilman Mr. Cheney befriended Kazakhstan’s Nursultan Nazarbayev and
solidified his support for energy cooperation, including agreement in
principle for a new pipeline across the Caspian Sea that would cut out the
Kremlin. That in turn would help break Moscow’s near-stranglehold on gas
exports out of landlocked Central Asia to Europe.

The trip followed a White House visit from Azerbaijani leader Ilham Aliyev,
who is participating in energy projects of like motivation in the
neighboring Caucasus.

Ultimately, the “New Great Game” for an Iraq-distracted U.S. is less about
winning and more about avoiding being marginalized by an ambitious China and
resurgent Russia. “We’re losing now but it doesn’t have to stay that way,”
says Zeyno Baran of the Hudson Institute, who keeps score on her frequent
travels to the region and meetings with its leaders. “Cheney’s trip was a
bold move. The U.S. is now there at the highest levels and has decided not
to let China and Russia monopolize the game.”

The White House’s embrace of Mr. Nazarbayev and Mr. Aliyev also marks its
return in the region to realpolitik from the democratic missionary work
which had estranged some Central Asian leaders. Mr. Nazarbayev suppresses
opponents and employs resource wealth to enrich his family.

But at the same time he has transformed his country from a dumping ground
for Soviet political prisoners and nuclear waste to an economy with 10%
average annual growth for the past five years, and where far-reaching
reforms have brought real development. He has balanced Russia’s influence

by pursuing energy deals with China and the West.

Mr. Putin speaks of U.S. hypocrisy in criticizing Russia as anti-democratic
while backing such authoritarians. But Bush administration officials, who
still give lip service to the notion that the region’s long-term stability
can only come from democratic change, have decided the stakes have grown

too high to be slave to principle.

Russia and China for months have been winning ground from the U.S. by
reassuring Central Asia’s leaders that they can help them resist the
contagion of Western-backed democratic revolutions in Ukraine, Georgia and
Kyrgyzstan.

What’s up for grabs is access to vast energy resources at a time of tight
supply and the use of military bases within easy reach of Iran and poised
between China and Russia. Growing Islamic extremist undercurrents

complicate matters.

Backing reigning autocrats for short-term gain could replicate the Mideast’s
political-instability problems, but U.S. officials believe abandoning the
region is a far worse option-and would leave only parties who lack interest
in human rights and democratic change.

One of the rising dangers to U.S. fortunes is the Shanghai Cooperation
Organization, or SCO, created by Beijing in 2001 to counter growing U.S.
influence. It excludes Washington but includes Russia, four of the region’s
states-Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan-and has given
observer status to Tehran.

It was at an SCO summit last July that China and Russia convinced Uzbek
leader Islam Karimov to ask the U.S. military to leave one of its
best-positioned bases anywhere, established after 9/11 and in preparation
for the war in Afghanistan.

Mr. Karimov was already in a foul mood toward the U.S. when he arrived at
the meeting, as the Bush administration was supporting calls for an
international investigation of his brutal crackdown on protesters in the
city of Andijan, Uzbekistan, the previous May. His security forces had
gunned down dozens of pro-democracy protesters whom Mr. Karimov

said were armed Islamist radicals.

The loss of the U.S. base, leaving it just one other base in the region, in
Kyrgyzstan, demonstrated the growing headwinds buffeting U.S. sway in

a more complex world.

Russia’s advantage in the three-way competition is Mr. Putin’s fierce focus,
knowing Central Asia is key to his aspirations to be an energy superpower.
Moscow energy giant Gazprom won’t be able to fulfill European contracts
beyond 2009 without Central Asian resources. The Russians also are
proficient at the region’s chief policy tools of threats and bribes.

China is playing the long game in its alliance of convenience with Moscow to
gain resources and counter what it considers creeping U.S. military
encirclement. Beijing believes it will be more attractive over the long run
to Central Asian elites, who are impressed with its mixture of glittering
economic success and autocratic rule. “China gives Central Asian leaders
red-carpet treatment and after what they see they come back asking, ‘Who
cares about democracy?’ ” says Ms. Baran.

The U.S. weapons in this asymmetrical battle include the enduring lure of
close relations with the West, access to European and U.S. markets and to
their technology and finance. Central Asian leaders also want a Western
counterbalance, suspect of Chinese motivations and too familiar with the
perils of imperial Russia.

That has made NATO partnership agreements attractive. “We can’t out-leverage
them, we can’t out-nasty them, so we have to win hearts and minds and
trust,” says a senior U.S. official.

A Kazakh proverb goes this way: If the Chinese hordes come, the Russians
will seem like your own father. That provides an opening for Uncle Sam, but
only if he answers the multipolar world’s challenge of more plentiful,
formidable and focused rivals.                    -30-
————————————————————————————————-
Write to Frederick Kempe at Thinkingglobal@wsj.com with your thoughts.

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AUR#697 May 15 William Taylor, Ambassador-Designate; Weeks After Ukrainian Vote, Unclear Who Won; Tatars; Light From The East In NYC; Minister Pynzenyk

=========================================================
 ACTION UKRAINE REPORT – AUR           
                  An International Newsletter, The Latest, Up-To-Date
                      In-Depth Ukrainian News, Analysis and Commentary

                       Ukrainian History, Culture, Arts, Business, Religion,
          Sports, Government, and Politics, in Ukraine and Around the World       

 
           IF CONFIRMED I WILL SUPPORT THE UKRAINIAN
               PEOPLE IN THEIR CONTINUING EFFORTS TO
                              TRANSFORM THEIR COUNTRY.
STATEMENT:
U.S. Ambassador-Designate to Ukraine William B. Taylor, Jr.
 

ACTION UKRAINE REPORT – AUR – Number 697
Mr. E. Morgan Williams, Publisher and Editor  
WASHINGTON, D.C., MONDAY, MAY 15, 2006 
             -——-  INDEX OF ARTICLES  ——–
           Clicking on the title of any article takes you directly to the article.               
  Return to the Index by clicking on Return to Index at the end of each article
 THEIR CONTINUING EFFORTS TO TRANSFORM THEIR COUNTRY
STATEMENT: Ambassador-Designate to Ukraine William B. Taylor, Jr.
U.S. Senate Foreign Relations Committee, Sen Dick Lugar, Chairman
Dirksen Senate Office Building, Washington, D.C., Friday, May 12, 2006
 
         NOMINATED TO BE U.S. AMBASSADOR TO UKRAINE
OPENING STATEMENT: Chairman Richard G. Lugar
Nominations Hearing, Senate Committee on Foreign Relations
Dirksen Senate Office Building, Washington, D. C., Friday, May 12, 2006

3.   WEEKS AFTER UKRAINIAN VOTE, IT’S UNCLEAR WHO WON
By Steven Lee Myers, The New York Times, NY, NY May 13, 2006

4     IMPORTANT MEMBER OF UKRAINIAN CABINET RESIGNS, 

MOVES TO PARLIAMENT MEMBER OF THE ‘OUR UKRAINE’ BLOC
UNIAN news agency, Kiev, in Ukrainian 1431 gmt 12 May 06
BBC Monitoring Service. UK, in English, Friday, May 12, 2006

5UKRAINIAN DEPUTY FOREIGN MINISTER LISTS CIS DRAWBACKS
NTN, Kiev, Ukraine, in Ukrainian 1630 gmt 14 May 06
BBC Monitoring Service – United Kingdom; Sunday, May 14, 2006

6.    PROFILE OF UKRAINE’S EX-GAS CHIEF OLEKSIY IVCHENKO
                The surprise resignation of the head of Naftohaz Ukrayiny
BBC Monitoring Research, BBC Monitoring Service, UK, Thu, May 11, 2006

7UKRAINE’S GAS FIRM’S FINANCIAL STANDING IS ‘VERY POOR’
NTN, Kiev, Ukraine, in Ukrainian 1630 gmt 11 May 06
BBC Monitoring Service – United Kingdom; Friday, May 12, 2006

8.   UKRAINE: REGIONS PARTY LEADER CRITICIZES PRESIDENT
   OVER GAS CHIEF’S RESIGNATION, DEPARTURE DISGRACEFUL
Interfax-Ukraine news agency, Kiev, in Russian 1048 gmt 12 May 06
BBC Monitoring Service – United Kingdom; Friday, May 12, 2006

9.  UKRAINE: CRIMEAN TATARS BLOCK TRAFFIC AHEAD OF 62ND
   ANNIVERSARY OF THEIR WWII DEPORTATION UNDER STALIN
AP Worldstream, Kyiv, Ukraine, Friday, May 12, 2006

10.    ORTHODOX CHURCH IN UKRAINE ATTACKS ‘CHARLATAN’
                             AND HIS BOOTY-SHAKING BABES
By Adrian Blomfeld, Telegraph, London, UK, Sat, May 13, 2006

11.             VARIETY.COM REVIEWS: LIGHT FROM THE EAST 

              A ‘Light From the East’ release of a SigmaBleyzer production in
           association with Strike Prods. Produced by Amy Grappell, Christian
              Moore. Executive producers, Michael Bleyzer, Natasha Bleyzer.
               Co-producer, Chris Krager. Directed, written by Amy Grappell.
By Joe Leydon, Variety.com, New York, New York, Wed, May 10, 2006

12AN EVENING IN NYC WITH AMY GRAPPELL AND A SCREENING 

         OF HER FILM “LIGHT FROM THE EAST” TUESDAY, MAY 16 
Action Ukraine Report (AUR) #697, Article 12
Washington, D.C., Monday, May 15, 2006

13.                      “REPLACEMENT WITHOUT CHANGE”
  Current system of law-making is blocking the building of a law-based state.
        Ukraine’s finance minister Pynzenyk criticizes government system
ANALYSIS & COMMENTARY
: Viktor Pynzenyk
Finance Minister of Ukraine
Zerkalo Nedeli, Kiev, in Russian 13 May 06, p 3
BBC Monitoring Service, UK, in English, Sunday, May 14, 2006

14.         NET PROFIT RISES AT AUSTRIA’S RAIFFEISEN BANK
                        Helped by acquisition of Ukrainian bank Aval
Staff Reporter, The Wall Street Journal, NY, NY, Thu, May 11, 2006

15.    POLISH, UKRAINIAN PRESIDENT STRESS ENERGY ISSUES,
     POLISH SUPPORT FOR UKRAINE AND HISTORICAL MEMORY
            To commemorate victims of the tragedy in Pawlokoma in 1945
Excerpt from report by Polish news agency PAP
Warsaw, Poland, in Polish 1334 gmt 12 May 06
BBC Monitoring Service, UK, in English, Friday, May 12, 2006

16.             “YUSHCHENKO STRETCHES OUT HIS HAND”
                            The best option is an orange coalition.
            Ukrainian President tells Polish newspaper of coalition hopes
INTERVIEW:
With Ukrainian President Viktor Yushchenko
BY: Waclaw Radzinowicza in Kiev
Gazeta Wyborcza website, Warsaw, in English 12 May 06
BBC Monitoring Service, United Kingdom; May 12, 2006

17.    POLISH PRESIDENT’S ADDRESS AT COMMEMORATION OF

      THE 1945 UKRAINIAN AND POLISH VICTIMS IN PAWLOKOMA
Cannot change the past, but we can make sure that it not determine the future.
SPEECH:
  By Polish President Lech Kaczynski
TVP1, Warsaw, Poland, in Polish 1031 gmt 13 May 06
BBC Monitoring Service, UK, in English, Saturday, May 13, 2006

18. UKRAINIAN PRESIDENT’S ADDRESS AT COMMEMORATION OF
       THE 1945 UKRAINIAN AND POLISH VICTIMS IN PAWLOKOMA
           “We declare today that Ukraine and Poland are this day manifesting
                      a new policy of solidarity. May God assist us in this.”
SPEECH:
By Ukrainian President Viktor Yushchenko
TVP1, Warsaw, Poland, in Polish 1022 gmt 13 May 06
BBC Monitoring Service, UK, in English, Saturday, May 13, 2006

19RUSSIAN BEAR IS BACK – AND THIS TIME IT’S GAS-POWERED
                      Petrodollars give Putin weight on world stage
                      America is ‘nervous and angry’, say observers
Ian Traynor, Nick Paton Walsh in Moscow & Ewen MacAskill in Washington
The Guardian, London, United Kingdom, Saturday May 13, 2006

20.                              RUSSIA: PRODDING THE BEAR
LEAD EDITORIAL: The Guardian
London, United Kingdom, Saturday, May 13, 2006
========================================================
1
. IF CONFIRMED I WILL SUPPORT THE UKRAINIAN PEOPLE IN

THEIR CONTINUING EFFORTS TO TRANSFORM THEIR COUNTRY

STATEMENT:
Ambassador-Designate to Ukraine William B. Taylor, Jr.
U.S. Senate Foreign Relations Committee, Sen Dick Lugar, Chairman
Dirksen Senate Office Building, Washington, D.C., Friday, May 12, 2006

Mr. Chairman and members of the Committee, I am honored to appear before
you today to discuss my nomination as the United States Ambassador to
Ukraine.

I deeply appreciate the confidence that President Bush and Secretary Rice
have placed in me.  If confirmed by the Senate, I pledge to work closely
with this Committee and your Congressional colleagues to advance U.S.
interests in Ukraine and the region.

My experience coordinating the assistance Congress made available to support
nascent democracy and market economics in the former Soviet states will
prove useful in Ukraine.  I first visited Ukraine in the early 1990s when
the newly independent country was experiencing freedom for the first time
since World War I.

I returned many times during the next decade, working to advance political
and economic reform.  If confirmed, I look forward to returning yet again to
help solidify the gains made to date and to support the Ukrainian people in
their continuing efforts to transform their country.

Following free and fair parliamentary elections this March, Ukraine is
striving to redefine itself as a stable and prosperous European democracy.
Ukraine has become a good partner to the United States on matters of
national security, free trade, human rights and other key issues.  If
confirmed
, I will work to strengthen and broaden our cooperation.

Ukraine has made significant progress since gaining freedom in 1991.  To be
sure, this progress has been uneven and opportunities have been missed.
Ukraine, like other countries making the transition from communism to
democracy and a free market, has had to overcome major hurdles and has
suffered setbacks.

But Ukraine has made notable advances.  These have been most significant
since the winter 2004 Orange Revolution, which radically transformed the
political dynamic in Ukraine.

The media is now unquestionably freer, respect for basic rights of citizens
has improved, a vibrant civil society has grown even stronger, and Ukraine
is a more constructive and energetic player in the region and worldwide.
Ukraine’s recent parliamentary election is proof of its progress.

This election was a critical test of Ukraine’s commitment to democracy -
and Ukraine passed convincingly.  The campaign and vote met OSCE and
international standards for democratic elections and were the most
democratic in Ukraine’s history.

The Orange Revolution also put our bilateral relations on a new trajectory.
Scandals and corruption limited our engagement with earlier Ukrainian
administrations, but our relations with the post-Orange Revolution
administration and governments have been characterized by close cooperation.

Over the last year and a half, with strong support from the U.S. Congress,
the Administration has worked with our allies to offer Ukraine an
Intensified Dialogue with NATO, restored generalized system of preferences
(GSP) trade benefits to Ukraine, recognized Ukraine as a market economy,
concluded a bilateral market access agreement–a key step to WTO accession
for Ukraine– and lifted Jackson-Vanik Amendment restrictions.

These steps were taken in response to Ukraine’s own positive actions and
reforms.  The Administration has also worked closely with Ukraine to halt
the proliferation of arms and potentially dangerous materials and
technology, and to advance democracy and security in the region.

Ukraine’s new coalition government will face a daunting but vital challenge:
to consolidate the gains to date of the Orange Revolution, and to further
Ukraine’s democratization, economic development, and integration with
Europe, Euro-Atlantic institutions, and the international community.  The
U.S. Government will continue to help.

The Administration strongly supports Ukraine’s NATO aspirations, and, if
confirmed,
I will do all I can to assist Ukraine in implementing the
political, economic, defense and security reforms necessary for possible
membership in NATO’s community of shared values.

If confirmed, I would look forward to continuing the already strong
cooperation with Ukraine to combat global threats such as trafficking in
persons, avian influenza, HIV/AIDS and TB.  If confirmed, I would work

with the government of Ukraine on effective implementation of an improved
export control system as part of our nonproliferation policy.

On the economic side, if confirmed, I will strongly support Ukraine’s
efforts to join the WTO and integrate its markets into international
structures, strengthen its–and Europe’s–energy security, and improve
energy efficiency and conservation. 

 
If confirmed, I will also do all that I can to help Ukraine strengthen rule of
law, combat corruption and money laundering, and improve its investment
climate.

Among the tasks ahead for Ukraine are developing domestic financial markets,
further improving protection of intellectual property rights, and
simplifying the regulatory environment and increasing access to credit for
small- and medium-sized entrepreneurs, who form the backbone of developed
economies.  Given Ukraine’s agricultural endowments, helping private farmers
play an increasing role in the economy is another key to a prosperous,
sustainable future.

Ukraine’s good and growing ties with the United States and with
Euro-Atlantic institutions are entirely compatible with Ukraine’s having
good neighborly relations with Russia.

If confirmed, I will join Ambassador Burns and my colleagues in encouraging
both countries to continue to build their bilateral relations on the basis
of mutual respect for each other’s sovereignty, territorial integrity, and
other principles of human rights to which Ukraine, Russia, and the United
States have subscribed in the United Nations and in the Organization for
Security and Cooperation in Europe.

As you know, Mr. Chairman, there is a terrific group of people on the ground
at Embassy Kyiv working toward these goals.  I look forward, if confirmed,
to leading them as we work to deepen cooperation with Ukraine and pursue
the interests of the American people.

Mr. Chairman, I appreciate the opportunity to share my initial thoughts
about Ukraine and its relations with the United States.  If confirmed, I
will look forward to working with you closely.  We all appreciate your
personal interest and leadership, not just in the area of weapons security,
but in Ukraine in particular.  I would welcome the opportunity to host you
and other interested members of Congress in Kyiv.

————————————————————————————————-
FOOTNOTE:  Your editor attending the confirmation hearing on Friday.
Ambassador-designate William Taylor’s nomination is expected to be
approved by the U.S. Senate soon. Assuming Bill Taylor is approved
reports indicate he will most likely be in Kyiv around Monday, June 12th
to assume his duties as U.S. Ambassador to Ukraine.  AUR EDITOR
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2. U.S. SENATE HEARING TO CONSIDER WILLIAM TAYLOR, JR.
         NOMINATED TO BE U.S. AMBASSADOR TO UKRAINE

OPENING STATEMENT: Chairman Richard G. Lugar
Nominations Hearing, Senate Committee on Foreign Relations
Dirksen Senate Office Building, Washington, D. C., Friday, May 12, 2006

Today, the Foreign Relations Committee meets to consider nominees to three
key diplomatic posts. Joining us are Mr. William Taylor, Jr., who has been
nominated to be Ambassador to Ukraine; Ms. Anne Derse, who has been
nominated to be Ambassador to Azerbaijan; and Mr. Daniel Sullivan, who has
been nominated to be Assistant Secretary of State for Economic and Business
Affairs. We are pleased to have these three nominees with us today.

Mr. Taylor has given decades of service to his country, including experience
in critical posts at the Departments of State, Defense, and Energy. As a
graduate of West Point, he served as a combat infantry officer in Vietnam.
He also is familiar with this body, having served for five years as a
legislative assistant to our good friend Senator Bill Bradley.

Currently, he is serving as Senior Advisor to the Coordinator in the Office
of Reconstruction and Stabilization at the Department of State. This office
originated out of a framework developed by this Committee, so we are
especially interested in Mr. Taylor’s experience in this capacity.

Prior to his current position, he served as the U.S. Representative to the
Quartet Special Envoy for Disengagement in Jerusalem and as Director of the
Iraq Reconstruction Management Office at the U.S. Embassy in Iraq.

The United States and Ukraine have developed a close relationship since
Ukraine achieved independence. Ukraine has been an excellent partner to the
Nunn-Lugar program in controlling and destroying the arsenal of weapons of
mass destruction that was left on its territory when the Soviet Union broke
up. As a result of this cooperation, Ukraine is nuclear weapons free.

We have been inspired by the struggle of the Ukrainian people to achieve
political, economic, and social freedoms. In November 2004, I witnessed this
struggle first hand when I served as President Bush’s representative to the
Ukrainian runoff elections.

On that occasion, the Ukrainian people would not let the election be stolen.
They demonstrated their commitment to democratic principles, which
eventually brought President Yushchenko to power.

But democracy cannot be won with a single event. We in the United States
have been working for more than 200 years to understand and to perfect our
own democracy. Even today, protecting the sanctity of the ballot box
requires constant vigilance.

Our experience has taught us that democracy is both difficult to establish
and hard work to maintain. I am hopeful that the new cabinet in Ukraine will
continue democratic momentum.

The United States must do its part to support the expansion of democracy

and free markets in Ukraine. Earlier this year, I was pleased that Congress
passed the bill that I had sponsored to repeal Jackson-Vanik trade
restrictions against Ukraine and extend permanent normal trade relations to
that country.

Ukraine faced another challenge earlier this year, when Russia took action
to deny some natural gas to Ukraine. The dispute led to sharp drops in gas
supplies reaching European countries that receive natural gas moving through
Ukrainian pipelines from Russia.

Russia charged that Ukraine was diverting gas intended for other European
nations. Eventually, the confrontation was resolved with a near doubling of
the price of natural gas sold by Russia to Ukraine.

Like the United States, Ukraine’s energy import dependence makes it
vulnerable to price volatility and the manipulation of supplying countries.
Development of alternative fuels, along with rapidly increased efficiency,
should be a central area of cooperation with Ukraine.

                      [------------------------------------------------------]

I would observe that today we are considering ambassadorial nominees to two
countries where energy is among the most important considerations in our
relationship. This is not an unusual circumstance. Our relations with dozens
of countries around the world – both allies and rivals – are dominated by
the opportunities and threats associated with energy supplies and our status
as an import dependent nation.

Recently, Secretary Rice and Undersecretary Burns have expressed to the
Foreign Relations Committee how central energy has become to broader issues
of U.S. diplomacy. In fact, global energy security is one of the main
reasons why the Administration has asked Congress to support the U.S.-India
Civilian Nuclear Agreement.

As we consider the talents and responsibilities of our two ambassadorial
nominees, I want to ensure that they and other ambassadors have the support
and institutional expertise necessary to effectively deal with energy
issues. In my judgment, the State Department must greatly increase its
capacity to address energy issues at the highest levels of its bureaucracy.

As my introduction indicated, the job description of the Assistant Secretary
for Economic and Business Affairs includes many other important topics
besides energy. Although I would urge Mr. Sullivan to develop a sharp focus
on energy as quickly as possible, the State Department needs to do more than
expand energy capabilities within the Economic and Business Bureau.

To address this situation, I have introduced S. 2435, the Energy Diplomacy
and Security Act, which would create a coordinator for energy diplomacy in
the Secretary’s office and expand the profile of energy considerations
within the department.

Unfortunately, despite a good deal of prodding, the State Department has not
been able to express a definitive view of the bill or its needs in this
area. The Foreign Relations Committee plans further hearings on this topic,
and we intend to be persistent.

I congratulate each of our nominees. Please deliver your statements in the
order that you were introduced. If you are summarizing a statement, the text
of your entire presentation will be included in the hearing record. Also,
please introduce family and friends that may have accompanied you on this
important occasion.                              -30-
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========================================================
3. WEEKS AFTER UKRAINIAN VOTE, IT’S UNCLEAR WHO WON

By Steven Lee Myers, The New York Times, NY, NY May 13, 2006

KIEV, Ukraine, May 12 – The politicians trying to reunite the political
parties that were swept to power in Ukraine a year and a half ago have drawn
up a list of the issues that divide them. They include the World Trade
Organization, membership in NATO, privatization of state properties and the
volatile issue of whether to allow sales of agricultural land.

The most divisive issue, though, is the most important of the moment: Who
will be Ukraine’s new and newly empowered prime minister?

Six weeks after parliamentary elections produced no outright winners, no one
can say for certain. The issue has stirred a new round of recriminations
among those who joined President Viktor A. Yushchenko in leading the popular
protests that overturned a fraudulent election in 2004 and cleared the way
for his presidency.

“They want a compromise with the past, the Kuchma era,” said Hryhory M.
Nemyrya, a newly elected member of Parliament, referring to the
scandal-tarred presidency of Leonid D. Kuchma, whose chosen successor, Mr.
Yushchenko, ultimately defeated him in what became known as the Orange
Revolution.

The leading candidate for prime minister is the head of Mr. Nemyrya’s party,
Yulia V. Tymoshenko, the erstwhile ally of the president who insists that
her bloc’s showing in the election – ahead of Mr. Yushchenko’s party, Our
Ukraine – makes her the rightful candidate among the so-called orange
coalition.

In an interview with a Polish newspaper, published Friday, Mr. Yushchenko
said he did not preclude that possibility. But at least some of his
supporters strongly oppose Ms. Tymoshenko, arguing that she would prove as
divisive as she was when she served as his first prime minister for eight
months last year – until tumultuous economic policies, political infighting
and dueling accusations of corruption prompted him to dismiss her.

Even as they hold talks to reunite last year’s orange coalition to form a
governing majority, Mr. Yushchenko’s supporters have raised the possibility
of compromise candidates.

“There are others on the bench,” said Anatoly K. Kinakh, a leader of Our
Ukraine and Mr. Yushchenko’s national security adviser, declining to
identify them. Mr. Kinakh resigned his security post on Friday to take a
seat in Parliament, presumably as part of the positioning to form a
coalition government.

Some, including the acting prime minister, Yuri I. Yekhanurov, have
suggested the possibility of a broader coalition government that could
include the party led by Mr. Yushchenko’s vanquished presidential rival,
Viktor F. Yanukovich, which led all parties in the parliamentary election
with 31 percent of the votes.

“For eight months we had an orange coalition, but it fell apart because many
of its members were united only by their opposition to Kuchma,” Mr.
Yushchenko’s spokeswoman, Irina B. Gerashchenko, said. “What the

president wants is a stable coalition.”

The result has been an impasse that threatens to undermine Mr. Yushchenko’s
political standing further, even as he faces a stalling economy, accusations
of overly cozy associations with big business and a new confrontation with
Russia over the price of natural gas.

In January the confrontation over gas resulted in a doubling of the price
Ukraine pays Russia. A compromise, which increased prices for Ukrainian
households by 30 percent as of May 1, allows Russia’s gas monopoly to raise
them again as soon as July 1.

The deal has been unpopular here, in part because of the higher prices and
in part because of questions surrounding the ownership of an opaque trading
company, RosUkrEnergo, which now has a monopoly on supplying the gas to
Ukraine.

The controversy over the deal deepened late last month with the disclosure
that the partial owners included a prominent Ukrainian businessman, Dmitry
Firtash. Mr. Yushchenko, who initially denied any Ukrainian involvement, met
with Mr. Firtash “on several occasions,” Ms. Gerashchenko said.

Ms. Tymoshenko has led the opposition to the gas deal, calling it a threat
to Ukraine’s national security. On Thursday the controversy claimed a new
victim, when Oleksiy Ivchenko, who negotiated the deal as the head of
Ukraine’s state gas company, resigned to take a seat in Parliament as part
of Mr. Yushchenko’s Our Ukraine bloc.

The new Parliament – with increased powers, including the ability to appoint
the prime minister and other cabinet ministers – is not expected to convene
until the end of May. Based on the electoral results, Ms. Tymoshenko’s bloc
will have 129 of the 450 seats, compared with 81 for Our Ukraine. With the
Socialist Party’s 33 seats, a reunited coalition could control a slight
majority.

Mr. Yanukovich’s Party of Regions won the largest number of seats, with 186,
while the Communists won 21.

The uncertainty over a coalition has raised the possibility that none will
be formed. That would allow Mr. Yushchenko to dissolve the Parliament at

its inception and call new elections, plunging Ukraine into new political
turmoil.

“He is losing public support,” Mikhail B. Pogrebinsky, director of the Kiev
Center for Political and Conflict Studies, said in an interview. “No smooth
movement can restore trust in him. He must make a decisive step. And he is
not prepared for it.”

Others in Mr. Yushchenko’s camp said that jockeying aside, the political
leaders who led the Orange Revolution would ultimately reunite in some form.
Roman P. Bezsmertny, another leader of Our Ukraine, said the immediate goal
was to agree on the policies that bind them and then deal with who would be
chosen as prime minister to carry them out. That is why lists of areas of
agreement, and disagreement, are being drafted.

Mr. Yushchenko’s spokeswoman, Ms. Gerashchenko, described the process

as something akin to restoring a marriage broken by betrayal. “It is like
trying to rebuild a family,” she said. “And it is difficult to rebuild a
family if both sides cannot realize why one side walked out and slammed the
door.”                                        -30-
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http://www.nytimes.com/2006/05/13/world/europe/13ukraine.html?_r=1&oref=slogin
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========================================================
4.    IMPORTANT MEMBER OF UKRAINIAN CABINET RESIGNS, 
MOVES TO PARLIAMENT MEMBER OF THE ‘OUR UKRAINE’ BLOC

UNIAN news agency, Kiev, in Ukrainian 1431 gmt 12 May 06
BBC Monitoring Service. UK, in English, Friday, May 12, 2006

KIEV – The secretary of the National Security and Defence Council, Anatoliy
Kinakh, has decided to work in parliament [Kinakh was elected to parliament
on the election list of the propresidential Our Ukraine Bloc]. Kinakh sent a
statement to this effect to the presidential secretariat.

Kinakh said that a number of political and economic risks are currently
mounting in Ukraine, dealing with this country’s switching to the
parliamentary-presidential form of governance. “The Supreme Council has
received very serious powers now that constitutional reform has been
implemented. Further sociopolitical and socioeconomic development of the
state depends on its coordinated and professional decisions,” he said.

Kinakh said that the country and the newly elected parliament are unprepared
to function under the parliamentary-presidential form of governance.
Difficult talks on forming a coalition in the Supreme Council and the
deteriorating socioeconomic situation are warning signs for the further
development of the state.

“It is clear today that the Supreme Council will begin to work in very
difficult circumstances. Bearing this in mind, I believe that my duty is to
concentrate my experience and efforts to ensure the most coordinated,
pragmatic, clear and professional lawmaking in the new parliament,” Kinakh
said.

Kinakh also said that the importance of the National Security and Defence
Council recently increased significantly as the agency develops, adopts,
implements and coordinates the implementation of decisions to ensure
Ukraine’s security in the entire spectre of the country’s life.

He said that a solid analytical base was developed, a range of systemic
presidential decrees were adopted on the basis of the National Security and
Defence Council’s decisions on improving security in the energy, food,
investment and information areas. Work to develop the national security
strategy is near completion. “This is a powerful foundation for functioning
and coordination between the future cabinet and the Supreme Council,” he
said.                                            -30-
————————————————————————————————-

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========================================================
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========================================================
5. UKRAINIAN DEPUTY FOREIGN MIN LISTS CIS DRAWBACKS

NTN, Kiev, Ukraine, in Ukrainian 1630 gmt 14 May 06
BBC Monitoring Service – United Kingdom; May 14, 2006

KIEV – Ukrainian First Deputy Foreign Minister Volodymyr Ohryzko spoke

about what he saw as drawbacks of the CIS live on the air of the Ukrainian
pro-opposition NTN TV on 14 May. He, however, did not say whether
Ukraine is going to quit the CIS, noting that Ukraine is formally not a member
of it anyway.

He also refused to comment on Georgia’s reported intention to quit the CIS.
The CIS has been unreformed, according to Ohryzko, and “no single economic
project has been implemented in the CIS”.

Ohryzko listed the following drawbacks of the CIS: [1] the free-trade
agreements of 1994 have not been ratified by Russia; [2] last year’s reform
proposals from Ukrainian President Viktor Yushchenko have been ignored; [3]
there’s been no proper border demarcation between CIS countries, so the
borders are transparent to illegal migration and contraband; [4] bulging CIS
bureaucracy gets a disproportionate share of funds.

Ohryzko denied a suggestion by the presenter that relations with Russia
recently worsened. He said the relations have not got worse, rather there’s
been more transparency.                              -30-

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========================================================      
6. PROFILE OF UKRAINE’S EX-GAS CHIEF OLEKSIY IVCHENKO
              The surprise resignation of the head of Naftohaz Ukrayiny

BBC Monitoring Research, BBC Monitoring Service, UK, Thu, May 11, 2006

The Ukrainian government on 11 May announced that it had accepted the
surprise resignation of the head of Naftohaz Ukrayiny, the state-owned oil
and gas giant. The ostensible reason for Oleksiy Ivchenko’s resignation was
that he has been elected to parliament on the ticket of the pro-presidential
Our Ukraine bloc – the Ukrainian constitution does not allow MPs to hold
executive posts.

But most government members elected to parliament are not in a hurry to make
a choice between their current jobs and the seat in parliament, while
uncertainty remains as to how many of them will keep their posts in the new
government. There appear to be several possible other reasons for Ivchenko’s
resignation.
[1] GAS DEAL WITH RUSSIA —–
Ivchenko was one of the main advocates of the controversial gas agreements
signed with Russia on 4 January 2006, after Moscow briefly switched gas
supplies amid a price dispute, also disrupting supplies to Europe.

Ukraine eventually accepted a price rise from 50 to 95 dollars per 1,000
cu.m. of gas, accompanied by a smaller rise in the rates charged by Ukraine
for the transit of Russian gas to Europe (ITAR-TASS news agency, Moscow,

in Russian 0738 gmt 4 Jan 06).

There was uncertainty as to whether the rate of 95 dollars was fixed for the
next five years or is subject to further rise. While President Ivchenko
Yushchenko and Ivchenko himself appear to believe that the rate can only
rise with Ukraine’s consent, Russia has been talking about another price
rise starting from July (Den, Kiev, in Ukrainian 13 Apr 06; p 1).

The choice of the intermediary company, RosUkrEnergo, to supply a mix of
expensive Russian and cheaper Asian gas to Ukraine has also stirred
controversy, with allegations that the company is linked to shadowy figures
(Zerkalo Nedeli, Kiev, in Russian 21 Jan 06; p 1, 4).

The Ukrainian opposition vehemently criticized the deal, even calling for
Ivchenko to be prosecuted for signing it, and Yuliya Tymoshenko at one point
spoke of reversing the deal with Russia as one of the conditions for forming
a ruling coalition in parliament with Our Ukraine and the Socialist Party
(Ukrayinska Pravda website, Kiev, in Ukrainian 17 Feb 06). Ivchenko’s
departure appears to have removed one of the obstacles for the ongoing
coalition talks between the three parties.
[2] NAFTOHAZ FINANCES —–
The Ukrainian media has repeatedly raised the topic of Naftohaz finances,
with allegations being made that the company is close to bankruptcy
(Kiyevskiy Telegraf, Kiev, in Russian 28 Apr 06). This has been flatly
denied by Naftohaz, but Finance Minister Viktor Pynzenyk publicly voiced
dissatisfaction with the company’s financial state and tax payments (UT1,
Kiev, in Ukrainian 1530 gmt 19 Apr 06), and the international ratings agency
Fitch on 24 April downgraded the company’s credit rating from BB- to B plus
(Ukrayinska Pravda, 24 Apr 06).
[3] MERCEDES SCANDAL —–
Ivchenko came under fire in April after the web site Ukrayinska Pravda
posted photos of his new company car, a Mercedes reportedly costing over
200,000 dollars (Ukrayinska Pravda web site, Kiev, in Ukrainian 7 Apr 06).

The web site questioned the need for a Ukrainian state company in a
difficult financial situation to buy expensive cars, given that Ivchenko’s
previous company car, another Mercedes, was less than two years old.

Ivchenko made the situation worse by commenting on television that using the
latest models of Mercedes cars was a matter of “tradition” for him (NTN,
Kiev, in Ukrainian 1400 gmt 8 Apr 06). After the scandal flared up in the
media President Yushchenko said at a press conference that he found
Ivchenko’s comments inappropriate, and ordered him to sell the car (UT1,
Kiev, in Ukrainian 0900 gmt 12 Apr 06).

But after the car was sold, the Tender Chamber announced an investigation
into the car’s purchase, as it appeared that the Mercedes had been bought
bypassing the compulsory tender procedure.
[4] PARLIAMENT PERKS
Finally, parliament seat itself could be an attractive option due to the
many perks that come with it – including immunity from prosecution.
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7. UKRAINE’S GAS FIRM’S FINANCIAL STANDING ‘VERY POOR’

NTN, Kiev, Ukraine, in Ukrainian 1630 gmt 11 May 06
BBC Monitoring Service – United Kingdom; Friday, May 12, 2006

KIEV – Ukraine’s National Security and Defence Council Secretary Anatoliy
Kinakh has said that the state oil and gas company Naftohaz Ukrayiny’s
financial standing is “very poor”.

Speaking in a studio interview with the NTN TV channel, Kinakh said: “It is
unacceptable to sink as low as paying taxes into the budget at the expense
of foreign loans with property pledged as security, while this is the
property of a strategic company.”

Kinakh said that Oleksiy Ivchenko’s resignation from the post of chief of
Naftohaz Ukrayiny is not directly linked to gas talks with Russia. He went
on to say that the reshuffle at Naftohaz will be followed by a serious
policy change to step up the competitiveness of Ukraine’s oil and gas
sector.

Kinakh said that the 4 January gas deals with Russia’s gas monopoly Gazprom
are imperfect and that a Ukrainian-Russian intergovernmental gas protocol
should be signed to guarantee gas supplies to Ukraine.

Kinakh said that Ukraine has “no alternative to Gazprom at present”, and
called for direct contacts between Naftohaz and Gazprom bypassing the
RosUkrEnergo gas intermediary.

“Ukraine has never been and will not be an advocate of RosUkrEnergo. We want
these relations to be transparent and commitments to be met, including the
price parameters. We have repeatedly proposed to Russia and to Gazprom to
establish direct contacts, without any intermediaries, between Naftohaz
Ukrayiny and Russia’s Gazprom,” Kinakh said.

Kinakh said that Ukraine is not considering “quitting the CIS immediately”,
and called on Russia to sign a free-trade zone agreement.         -30-

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========================================================
8. UKRAINE: REGIONS PARTY LEADER CRITICIZES PRESIDENT
 OVER GAS CHIEF’S RESIGNATION, DEPARTURE DISGRACEFUL

Interfax-Ukraine news agency, Kiev, in Russian 1048 gmt 12 May 06
BBC Monitoring Service – United Kingdom; Friday, May 12, 2006

KIEV – Oleksiy Ivchenko’s resignation as chairman of the board of the
Naftohaz Ukrayiny national joint-stock [oil and gas] company is a logical
outcome of the “highly unprofessional” personnel policy by President [Viktor
Yushchenko], members of the [opposition] Party of Regions think.

This is the comment a member of the political council of the Party of
Regions, Yevhen Kushnaryov, has made on Ivchenko’s resignation to
Interfax-Ukraine. He dubbed Ivchenko’s departure “disgraceful”.

“One has got to be a complete bungler to bring one of the most economically
efficient Ukrainian structures to the brink of bankruptcy in just 16
months,” he believes.

In his opinion, a professional, state-level manager should have been
appointed to such an important post rather than a person close to Yushchenko
in ideology.

He recalled that this was stressed publicly not only by representatives of
the opposition, but also by those members “of the propresidential forces who
are capable of assessing the situation realistically and who have the
courage to speak the truth”.

The politician says responsibility for the gas crisis between Ukraine and
Russia should rest “personally with Yushchenko and Ivchenko”.

He expressed hope that the post of Naftohaz Ukrayiny head will be occupied
“not by some other close or distant relative of the president, but by a real
professional, a patriot of Ukraine capable of running such a complex and
large organization efficiently and having the qualities of a real diplomat
in negotiations with Russia, Turkmenistan, Kazakhstan and other suppliers of
gas to Ukraine”.

The Ukrainian government yesterday relieved Oleksiy Ivchenko of his duties
as chairman of the board of the Naftohaz Ukrayiny national joint-stock
company after his resignation tendered because of his election to
parliament. Ivchenko had headed Naftohaz Ukrayiny since March 2005. He was
elected to the Supreme Council [parliament] of the fifth convocation on the
list of the Our Ukraine Bloc.                        -30-
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9. UKRAINE: CRIMEAN TATARS BLOCK TRAFFIC AHEAD OF 62ND
   ANNIVERSARY OF THEIR WWII DEPORTATION UNDER STALIN

AP Worldstream, Kyiv, Ukraine, Friday, May 12, 2006

CRIMEA – Hundreds of Crimean Tatars blocked traffic in southern Ukraine,
before the 62nd anniversary of their deportations under Soviet dictator
Josef Stalin, police said Friday.

The Tatars, in a column of some 600 cars, had tried Thursday to enter the
Black Sea village of Partenit – which they consider to be their historic
home – but were stopped by residents blocking the road, Crimean police
spokesman Oleksandr Dombrovsky said.

The blockade caused a 7-kilometer (4-mile) traffic jam until early Friday,
when police persuaded the Tatars to remove their cars from the road.

Partenit’s residents continued to block entry to the village, however, and
crowds of Tatars were gathered near the pedestrian crossings, Dombrovsky
said, adding that the situation was tense but under control.

The Crimean Tatars, a Muslim Turkic group, had inhabited the Black Sea
peninsula for more than seven centuries. Stalin accused Tatars of
collaborating with the Nazis, and on May 18, 1944, ordered that some 200,000
be deported to the Central Asian steppes, where many died of famine and
disease.

They were not allowed to return until around the time of the Soviet collapse
of 1991. Some 250,000 returned to Crimea, where they now make up 13 percent
of the population.

Unemployment is high among the Crimean Tatars today, and many live in grim
conditions in villages that lack basics such as water, natural gas and
roads. Fights break out frequently between Crimean Tatars and ethnic
Russians and Ukrainians.  The Ukrainian authorities under President Viktor
Yushchenko have pledged to restore Tatars’ rights.             -30-
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10. ORTHODOX CHURCH IN UKRAINE ATTACKS ‘CHARLATAN’
                          AND HIS BOOTY-SHAKING BABES

By Adrian Blomfeld, Telegraph, London, UK, Sat, May 13, 2006

KIEV – The Orthodox Church in Ukraine is not quite sure which part of
Sunday Adelaja’s weekly services it likes the least. The dubious Russian pop
and the pom-pom-waving Cossack dancers are certainly contenders. The
hot babes in choir dress swaying to the music might win the vote of its many
older and weaker-hearted clergymen.

Or it could be the thousands of Ukrainian teenagers squealing as the
diminutive Nigerian pastor preaches the word of God.

In the 1,000 years that it has been in existence, the Ukrainian Orthodox
Church has faced down many threats ranging from Reformation-era heretics
to Soviet iconoclasts and modern day schismatics.

But never before has it had to see off an intruder who encourages his
congregants to “shake their booty and praise the Lord”. Mr Adelaja is a
serious threat, even if it took the Church a while to realise it.

Twelve years ago, his Embassy of God church consisted of seven fellow
Africans who used to gather in his Kiev flat. Today he heads one of the
fastest-growing Christian congregations in Europe, with 250,000 members in
Ukraine alone. Among them is the first Protestant mayor of Kiev, elected to
the post in March.

Quite something for a man who, thanks to a Soviet scholarship won in 1986,
fled his impoverished Nigerian village at the age of 19 to escape the
“witchcraft” that killed many of his family.

Alarmed at his burgeoning congregation, the Church has launched a counter
attack, seeking to portray Mr Adelaja as a charlatan.
“Our main problem is that Sunday Adeleja has created a personality cult
around himself,” said Fr Evstratiy, a spokesman for the Kiev Patriarchate.

“Experts say he uses conscience manipulation techniques. He starts his
sermons in a low, ingratiating voice, and gradually gets heated up to the
point where he is running round the stage screaming.” At a recent service at
a Kiev ice hockey stadium 14,000 people crammed in to experience the effect.

As “Pastor Sunday” prepared to make a grand entrance, the choirgirls shook
their pompoms, the disco lights started to flash and a fanfare sounded. The
lights cut out, and Mr Adelaja emerged from a shroud of dry ice. Children
holding flags of the world wafted round him and the choir bellowed
“Sanctus!”

The congregation responded enthusiastically. Many danced in the aisles. With
his eyes closed and brows furrowed in concentration, he raised his arms
aloft. A hush fell over the audience.

“A man who is having problems functioning in his manly area, God is healing
you,” he intoned. “Those who are having skin problems, God is healing you.”

On and on he droned, curing everything from buttock problems to bankruptcy.
Some in the congregation wept, others bellowed hallelujahs. Ushers
discreetly passed around collection boxes.

African preachers heading largely white European congregations are no longer
such a rarity. Still, the 38-year-old stands out. Not only has he achieved a
phenomenal conversion rate in the birth place of Russian Orthodoxy, he has
also done it in one of Europe’s most racist countries – one where skinhead
attacks on ethnic minorities are reported on an almost daily basis.

“People would spit at me in the street, or call me ‘monkey’ and
‘chocolate’,” he recalled. “They thought it was an insult for a black man to
preach.” He attributes his success to the fact that he reached out to the
rejects of society: the drug addicts, criminals, prostitutes and the
homeless; those considered by the Church to be beyond redemption.

But Mr Adelaja also owes something of his success to his appeal among the
young. It was the young who were at the forefront of protests in Kiev’s main
square during the 2004 Orange Revolution that brought the pro-Western Viktor
Yushchenko to power.

Orthodox luminaries supported his Kremlin-backed opponent. Mr Adelaja made
no such mistake. Every day he joined the crowds and led them in prayer. Now
he is reaping the rewards.                            -30-
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11.          VARIETY.COM REVIEWS: LIGHT FROM THE EAST 
              A ‘Light From the East’ release of a SigmaBleyzer production in
          association with Strike Prods. Produced by Amy Grappell, Christian
              Moore. Executive producers, Michael Bleyzer, Natasha Bleyzer.
              Co-producer, Chris Krager. Directed, written by Amy Grappell.

By Joe Leydon, Variety.com, New York, New York, Wed, May 10, 2006

‘Light From the East’ follows a group of American actors in the former
Soviet Union.

Though it covers widely reported events more than 15 years after the fact,
“Light From the East” generates genuine suspense as it follows a group of
American actors in the former Soviet Union during a fateful period of the
Perestroika era.

Illuminating time-capsule doc boasts impressive technical polish, and could
find receptive auds in commercial and nonprofit venues after its May 11-17
premiere run at New York’s Two Boots Pioneer Theater.

The year is 1991, and bad timing turns out to be good fortune for helmer
Amy Grappell. She and other members of New York’s La Mama Theater are
in the Ukraine to take part in a bilingual stage production with Ukrainian
counterparts when the attempted coup in Moscow threatens to drag the
region back to the bad old days.

Grappell starts out an inquisitive tourist, asking locals how they feel
about freedom after decades of Soviet rule. Helmer’s host, prickly and
pessimistic dramaturge Natalia Shevchenko, is supposed to provide literal
translation during interviews.

More often than not, however, Shevchenko instead offers cynical commentary
concerning respondents who care more about whether store shelves are full
than they do about freedom of expression.

Doc’s tone changes dramatically as reports circulate that Gorbachev has
disappeared, the Kremlin has been overthrown, and power now lies in the
hands of a few military men. Shocked — and, perhaps, more than a little
frightened — the helmer asks Shevchenko: “Does this happen often?”

The stranger-than-fiction irony: At a time that was filled with dark
portents of renewed repression, increasingly anxious U.S. and Ukrainian
thesps were collaborating on a play about Les Aurbas, a maverick theater
artist who rebelled against Soviet Realism and was killed during a 1937
Stalinist purge.

By the time the actors complete their limited run, the coup has been turned
back, Ukraine declares its independence — and “Light From the East”
demonstrates that, on stage on off, nothing is more satisfying than a happy
ending.

Camera (color), Christian Moore; editors, Kyle Henry, Leah Marino; sound,
Eric Friend; associate producers: Mark Rudkin, Rina Rudkin, Kevin Pruitt,
Kyle Henry. Reviewed on videocassette, Houston, May 7, 2006. Running
time: 73 MIN.                                  -30-
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12. AN EVENING IN NYC WITH AMY GRAPPELL AND A SCREENING
         OF HER FILM “LIGHT FROM THE EAST” TUESDAY, MAY 16

Action Ukraine Report (AUR) #697, Article 12
Washington, D.C., Monday, May 15, 2006

WASHINGTON – The Ukrainian Congress Committee of America (UCCA)
& the Brooklyn Ukrainian Group is sponsoring an evening with documentary
filmmaker Amy Grappell and a screening of her film “Light From The East,”
on Tuesday, May 16, at the Pioneer Theater, East Third Street between
Avenues A & B, at 9 p.m in New York City.

The film, written by Amy Grappell, produced by Mr. Grappell and Christian
Moore, chronicles a tour of the Yara Arts Group to Kyiv and Lviv during
August of 1991 when Ukraine declared its independence from the Soviet
Union.  For discounted tickets call UCCA, 212 228 6840.      -30-
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========================================================
13.                     “REPLACEMENT WITHOUT CHANGE”
  Current system of law-making is blocking the building of a law-based state.
        Ukraine’s finance minister Pynzenyk criticizes government system

ANALYSIS & COMMENTARY: Viktor Pynzenyk
Finance Minister of Ukraine
Zerkalo Nedeli, Kiev, in Russian 13 May 06, p 3
BBC Monitoring Service, UK, in English, Sunday, May 14, 2006

Finance Minister Viktor Pynzenyk has sharply criticized the current system
of government in Ukraine. In a lengthy article published in an influential
weekly, he said the functions of various government bodies often overlapped,
while many agencies did not wield enough powers to perform their duties. He
also criticized parliament, in particular its approach to approving the
state budget – which is drafted by the cabinet.

The following is an excerpt from the article by Pynzenyk entitled
“Replacement without change” published in the Ukrainian weekly Zerkalo
Nedeli on 13 May; subheadings have been inserted editorially:

Every four or five years at the time of the latest elections, people hope
for changes for the better. Nevertheless, the number of optimists decreases
every time. Citizens feel intuitively that something is wrong here. And the
reason is obvious – power changes hands, but the machinery of power remains
unchanged.

The system remains old. And if it is not changed, the old machinery of the
system of power will pulverize both new people and good decisions. We now
have a unique chance to change it, considering the key principles of
changing the system of power when forming the structures of the newly
elected authorities.
                    LEGISLATIVE FUNCTIONS MISUSED
By the will of fate I had occasion to get to know well the cooking process
of elaborating and adopting decisions in the state – both in the legislature
and the executive. And through the nature of the present work (on the
budget) I also see features of the culinary art in other branches of power
as well.  [Passage omitted: introductory remarks]

The Constitution of Ukraine defines the division of power into the
legislature, the executive and the judiciary. In real life, such a clear-cut
division is lacking in Ukraine. It is only a declaration.

The legislature in Ukraine is fixed allegedly in the Supreme Council
[parliament]. In actual fact, this is far from the case. What is more, under
the existing system of power, this body may not be necessary at all. After
all, there are enough legislative institutions even without it.

We observe that legislative functions in this country may be completely
taken on (and that is happening) by the Constitutional Court. It is
producing the norms of law through interpreting the constitution and the
compliance of enforceable regulations with the fundamental law. Especially
popular in this regard is Article 22 of the constitution: “When adopting new
laws or introducing changes to existing laws, a narrowing of the content and
volume of existing rights and liberties is not permitted.”

When adopting the constitution, legislators laid down the aspiration to
defend the political rights and liberties of citizens. Their intentions were
good, but what happened was as it always is. This standard is used in
Ukraine for all cases in life.

Under this article any law or enforceable regulation can be rescinded; one
can give one’s own interpretation having the force of law. Decisions of the
Supreme Council can be changed. But the norm of a decision by the
Constitutional Court is final and not subject to revision (appeal). There
are no precedents of revision of such decisions in Ukraine.

Medical and pension reform have already been blocked by current decisions of
the Constitutional Court. It seems that our medicine is free. But then what
can one call the payment for maintaining medical institutions from the
budget? Or is this not money from the citizens of Ukraine?

The state of affairs with pension decisions is no better. How can we escape
a situation whereby some people are allocated and will be allocated 100 or
200,000 hryvnyas of pension, and not because they have worked and earned
more, but because they are “the chosen ones”, special people?

For some reason Article 24 of the constitution does not apply to them:
“Citizens have equal constitutional rights and liberties and are equal
before the law.” It seems that some people are more equal than others.

Since the Constitutional Court judged the norm establishing an upper limit
of pensions for “the chosen” to be unconstitutional. And now what we have
is – hands off pensioners who receive pensions amounting to 90 per cent of
their salary.

For others (who, by the way, are the majority) 1 per cent per year worked
will be enough. The word “pension” has lost its meaning. There is no point
in working and earning, since pensions in Ukraine do not depend on that.

Courts of general jurisdiction are also taking on the functions of
legislators. I recently studied a decision of two courts in Donetsk and
Zaporizhzhya regions. I am not a lawyer, but I always thought that courts
assessed the compliance of actions (or inaction) with the norm of the law.
It turns out that I was mistaken. After all, in the above cases these two
courts took a decision on a non-existent norm of the law.

There is a curious Ukrainian paradox: there is no norm of the law, but there
is non-compliance with it. Who can explain that? Or maybe there’s something
faulty with my logic? Or maybe it is that domestic justice has a unique
logic different from the rest of the world?

In essence the courts are creating their own new norms of law and taking on
legislative functions that do not belong to them.

We also witnessed legislative functions being enacted by the executive. This
is the granting of tax privileges, release from taxation, granting
preferential tariffs to individuals for services or production.

To be fair, I will note that that I cannot recall such decisions during the
period of work of the last two governments. But where is the guarantee
against a recurrence of such decisions?

All “active people” in the country are aspiring to the functions of the
executive, and at all levels. It was with enormous “satisfaction” that I
recently familiarized myself with the decision of one court in Kiev whereby
the finance minister was prohibited from conducting an in-house inquiry
regarding the actions of a worker in the finance system.

I’d like to ask the whole country: what norm of law concerning an in-house
inquiry was breached? Why is a court interfering in questions that are
within the remit of the executive?

There also exists a reverse influence of the executive on the judiciary.
True, it is not connected with the adoption of formalized decisions, but
exists in the well-known form of “telephone law”. I had occasion to witness
events when hundreds of millions of hryvnyas were removed from the budget.
And it was useless then to refer to many laws.
          LEGISLATURE ASSUMING EXECUTIVE FUNCTIONS
The legislature is assuming a lot of executive functions. The scale of the
problem is so large here that it requires separate consideration.

But what would your attitude be to the question of carrying out power
functions not by institutions of power at all? There is no such phenomenon
in the organization of power anywhere in the world, and yet it is the norm
for Ukraine. Functions of the disposal of state (budget) funds are delegated
to public (self-governing) organizations. It is they that carry out the
function of running state property, including alienation.

Hundreds of millions of hryvnyas of payments of a taxation nature are being
spent by non-state institutions, since they do not run them and do not bear
responsibility for them. State bodies in essence have no influence on the
policy of spending such funds, and they are not inconsiderable. It is
understandable when citizens voluntarily collect money.

Here the state has nothing to do apart from setting the rules of the game in
order to make deception of people impossible. But it is a matter of taxation
revenues. And the state turns out to be not involved in it.

The power function of the privatization of state property is carried out by
commercial economic organizations (regardless of their form of ownership).
The functions of regulating the spending of large sums of money on state
purchases are entrusted to a public organization – the chamber of tenders.

What is there left to add to the existing state of affairs? Perhaps the
absolute commercialization of power. For example, paying judges depending on
the number of convictions, policemen on the number of arrests and so on.
                 PROBLEMS IN APPROVING STATE BUDGET
The biggest systemic problems in the organization of power are manifest in
the relations of its legislative and executive branches. I already mentioned
the interference of the executive in the legislative field of activity. But
the reverse pull of powers is acquiring increasing scope. And it is only
strengthening from year to year.

With the consolidation of changes to the constitution of a new status of
resolutions of the Supreme Council of Ukraine, the Cabinet of Ministers may
become in general a superfluous rudiment in the organization of power. The
process that has been intensifying in recent years is acquiring its logical
conclusion.

Extremely dangerous phenomena on the example of the budget process are
especially clearly visible. In the adoption of the budget the government
essentially is carrying out consultative, basically technical functions
(compiling comparative tables, recalculating indicators, multiplying
material and so forth).

Consideration of the budget resolution is turned into a theatrical show that
nobody needs. The budget and the resolution, the first and second readings
(and sometimes a third) are different documents. Remember how the
government’s attempt to restrain the level of the 2006 budget deficit to 2
per cent as envisaged by the resolution ended. That figure remained only in
the budget resolution.

I want to cross myself when I hear about the last budget night. The politics
of the last budget night (when the entire budget is rewritten) is a road to
the abyss. It is the absence of possibilities to implement any
understandable prospect for the country, since it is impossible to implement
strategic tasks.

My schoolboy son asked me, “Dad, why can’t the government cope with sugar
crises? All you need to do is make a commodity intervention.”

This is an elementary task even for a schoolboy, but it cannot be solved.
Since there are no sugar stocks. And it is impossible to create them,
because the relevant funds lodged in the draft budget were simply thrown out
of the final document.

Funds for energy saving met a similar fate. Attempts to react to an
extremely serious challenge to the country in the coming years (energy
saving) ended in the same way. Of the funds put in, virtually nothing was
left after the last budget night. In a few hours or from a voice in the hall
it is not simply figures that are changed, but fundamental questions of
state policy are decided.

But the adoption of the budget is merely the beginning of budgetary trials.
The real ones start after its adoption and coming into force.

Have any of the readers pondered about what funds the people’s deputies so
unanimously divided recently? Because specialists don’t know. The point is
that the only law distributing state funds is the law on the State Budget.
As far as 2006 is concerned, the law was already passed last year. And now
the skin of an unkilled bear is being shared out.

Especially comical (were it not so tragic) is the division of money from the
privatization of [steel giant] Kryvorizhstal. Those funds were distributed
by a law approved by the Supreme Council. After that a new distribution
scheme was adopted. But what to do with the old designations? The norms of
which law are to be implemented? Or should our compatriots simply take
pleasure in the sweet promises heard?

After the approval of the budget, for some reason it became a matter of
glory and honour for many people to break a hole through that budget (for
example, to hit at incomes by granting tax privileges or to share out the
skin of an unkilled bear, having envisaged expenditure not lodged in the
budget).

Every year the law on the budget stops the action of laws, spending on which
exceeds budget revenues. This year marked a record – there will not be
enough in even three budgets to finance the populist laws passed.

A loaded gun will fire some time. If nothing is changed and this policy
continues, the burden of accumulated problems may some time explode in a
serious financial collapse.

The current system of law-making is blocking the building of a law-based
state.
                                 MPs’ BILLS ‘ILLOGICAL”
In Ukraine the answer to the simple question of whether laws passed should
be implemented is not unequivocal. And what about those laws that are
impossible to implement? Herein lies a serious threat of disrespect for the
laws, in particular to the legislative system as a whole too.

Since there are laws that are not being implemented because of the
impossibility of enacting them, why not treat other laws the same way? And
they are treated like that – there are many examples.

It would seem that the constitution protects the country from such policy.
Article 95 envisages that only the law on the state budget determines the
size and direction of spending. Logically no law concerning spending can be
passed if the money for it is not part of the budget. But another logic
operates in this country.

Increasing numbers of purely executive functions are being concentrated in
the legislative body. Deputies are compiling a list of facilities for
capital investment. It has reached the point where an amount of spending is
being determined for each of them. What kind of logic of priorities can this
be? What decision of strategic tasks?

Increasing numbers of procedures for spending funds have to be agreed with
the budget committee. But is this really a function of the legislature?
These are tasks purely for the executive.

A similar system of interaction is starting to become widespread locally as
well. Additional problems are arising at a low level. Who will draw up draft
budgets: the staff of executive committees or local state administrations?

It is obvious that fundamental changes are needed to the system of the
relationship between the legislative and executive branches of power.

I’ll ask an easy question: who should draw up the laws? The answer, it would
seem, is obvious: the legislator. That is what happens with us. Over 90 per
cent of all draft laws registered since 1 February 2005 were drawn up by
people’s deputies. Only 7 per cent came from the government. They formed
public opinion, as it should be.

The work of a deputy is assessed according to the number of draft laws. The
machine is operating at full throttle. But is has no chance of moving in a
clear-cut direction. Indeed, it cannot move, since these directions are
often multi-directional.

With such distortions of law-making in Ukraine there will never be a single
purposeful policy. Because there is no single centre for elaborating it.
There are at least 450 such centres (the number of people’s deputies).
Uniting in factions does not reduce the number of centres, since there is a
corporate solidarity at work: we vote because the author is one of us.

In these conditions the development and approval of a government action
programme loses any meaning. An approved programme and its implementation
are far from being the same thing.

Any clear-cut policy requires the presence of a single centre of its
elaboration. The government can and should be that centre. In other words,
the functions of drawing up and passing laws should be restricted. The
former should be transferred to the executive and the latter to the
legislature.

God forbid that you might think that I am encroaching on the holy of
holies – the right of a deputy’s legislative initiative. Nobody will deprive
him of that. But any initiative should pass through the government. Without
the government presentation, a draft law cannot be considered.

The logic of actions then becomes clear: a government action programme is
affirmed, the government is responsible for its enactment and all draft laws
correspond to the logic and aims of the programme.

Such changes of powers make it institutionally impossible to transform
elections into permanent natural disasters for Ukraine; it cannot be subject
to constant risks of serious problems arising.
PROCEDURE OF VOTING ON BUDGET SHOULD BE CHANGED
This logic should also be applied to the budget process taking consideration
of the special features of the relevant law. It should be adopted according
to a standard scheme: two readings instead of the current three. Both
readings are drawn up exclusively by the government (the deputies make
proposals on the first reading). And only the government draft is put to the
vote.

The law-maker has the right to say yes to the budget or no to the
government. If they don’t like the government, let them dismiss the
government. But don’t take this country and its citizens hostage.

This is a comprehensible, logical scheme. Especially in conditions where the
parliamentary majority forms the government. If the budget is not approved,
it means that there is no majority. The majority needs to be reformatted and
the government changed. Or (if this proves not to be possible) new elections
must be held.

Similar changes should also apply to local budgets. True, additional
problems appear here requiring legislative regulation in connection with
imperfect constitutional reform.

Unlike other laws, the budget cannot be voted on article by article. The
budget is a balance. The failure of any article means its violation. Further
voting has no sense. In both readings the voting should take place only on
the whole.

The current status of the budget resolution also has no sense. Today it is a
resolution of the Supreme Council. The resolution should become a government
document, a guideline of intentions of its policy that agrees with the
approved government action plan.

In new conditions a legislatively regulated role of resolutions of the
legislative body is required (a sharp restriction of the spheres of its
application). They cannot apply to tax and budget issues and functions of
the executive.

And now let us try to understand the logic of building the executive. In all
civilized countries the government is the sole central body. In all, except
ours. With us it is not the only one.

First, its functions are carried out by those branches of power that have
nothing to do with the executive. Second, the powers and functions of the
government, the secretariat of the Cabinet of Ministers and the secretariat
of the president of Ukraine have not yet been clearly delineated.
Interference in each other’s field of activity is obvious. [Passage omitted:
times changed since Soviet era]
       GOVERNMENT DOES NOT HAVE ENOUGH POWERS
It got to the point where bodies of the executive do not have the right to
receive the necessary information from the statistics committee to take
management decisions. This is forbidden by law. How then should decisions

be taken – by sticking you finger in the sky? Why in that case are statistical
data collected at all? Does it mean that the job – everything, the final
result (purpose) – means nothing?

But just try to stop, for example, attempts to steal billions of hryvnyas
through accounts of bank institutions. There are no instruments for reacting
to such attempts. For some reason in the West they exist and work. Accounts
are immediately frozen there (actions are prevented), and then the situation
is clarified (with the participation of the courts).

For us such actions are banned by law. We are left with only one right: to
express outrage – after the carve-up has taken place. Seeing all this, quite
a few qualified specialists from the bodies of power do not even want to
express themselves. Or perhaps the concept of anarchy and democracy in
Ukraine are one and the same?

The country needs functional structures of government; it is sector-based.
It is recreated also in the structure of every ministry. There is no
consolidation of functions and hence of responsibility for the relevant
bodies.

How many ministries of labour, health care, finance, education and science
are there in Ukraine? This list could be continued with a full roll-call of
central bodies of the executive power of the government.

There are at least 10 health ministers. The actual Health Ministry has its
own system of medicine. The army has its own, as does the SBU [Security
Service of Ukraine], the Academy of Medical Sciences and the railways. Each
of them has its own vision of the system, its own logic of development and
its own budget. [Passage omitted: more in the same vein]

Subordination to the Cabinet of Ministers, fashionable in Ukraine, means
subordination to nobody. For the Cabinet of Ministers is a collegial body
that meets once a week. Members of the government are not involved in
“subordinate” bodies. And the heads of those bodies do not possess the logic
of decisions of the government, since they are not members of it.

This sort of “subordination” at the beginning of the year led to the signing
by Naftohaz Ukrayiny [oil and gas monopoly] of the well-known gas
agreements. They affected the budget and the pocket of every citizen. But
the finance and economics ministries got to know about them after they were
concluded. Or are they trifles? And we have no shortage of such systemic
“trifles”.

Such a purely executive structure as the State Property Fund has dropped out
of the system of the single body of executive power altogether. And,
unfortunately, that status has been fixed by law. In civilized countries it
is not even a body of government but of the Finance Ministry (the treasury
looks after state funds and state property).

So we have a situation in which there is no cook to entrust with looking
after the broth, since it is too dangerous.

The country needs a functional construction of the government and the
structure of ministries with a clear-cut allotment of every function to a
single body.

In a functional government, the key figure should be the minister, while the
other bodies, whose heads are not members of the government, should join the
structure of the relevant ministry according to function.
                            FINANCE MINISTRY TOO WEEK
Every morning on the eight floor of the government building I see the sign
“Ministry of Finance of Ukraine”. It pleases me less and less. Because the
signboard exists, but the ministry, with the functions and powers that it
should have, does not.

I want to note here and now that it is not duty that moves my hand now. All
the more so in that in a month the country will have a new government and
new ministers. God forbid also that my exit will somehow touch the Finance
Ministry staff. I feel only respect for the competent qualified staff of
this collective.

But facts are facts: institutionally the Finance Ministry is very weak. And
to a certain extent it is a special ministry. Apart from the fact that it,
like every central body of executive power, is a disburser of funds, it also
holds the balance of the country. If it holds it, the country will be in
luck, if it doesn’t hold it, the country will not.

The system, and as a result society, little understands this responsibility,
and hence underestimates the role of the state’s main financial department.
But everyone feels it when it is not possible to hold the balance, when
general problems arise. And the main thing is that it is not clear where
they come from.

Today the Finance Ministry cannot answer for maintaining the balance, since
it has no instrument to do it. No draft law or other enforceable regulation
should be approved without a positive conclusion from the Finance Ministry
if it affects the country’s balance (budget revenue or expenditure). It will
not be superfluous to say that for Ukraine this is only a good wish, while
for civilized countries it is the general norm.

It is not a matter of a tug-of-war as some may see it. If a minister does
not suit, he has to be replaced. It is the minister that is taken on rather
than the function. The function must not be taken on (washed away).
Otherwise the Finance Ministry will never be able to ensure financial
stability and the implementation of the budget. Otherwise, there will always
be disputes with members of the government.

It is not a function of the Finance Ministry to determine policy, to direct
funds where and in what amounts or to decide what are the priority tasks. It
is for the government to elaborate them and for parliament to approve them.
The task of this agency is to implement the budget and keep the balance
(read: stability). [Passage omitted: more in the same vein]
                        FUNDAMENTAL CHANGE NEEDED
Over a year ago we won the right to make good changes. But I want to live in
a country where a change of government cannot create risks every time. In
order for that not to be, there have to be fundamental institutional changes
in the system of power. And then the arrival of new people will have only an
insignificant affect on the formed action system. But there will not be
dangerous surprises.

Today there is a unique chance for such changes – institutions of the new
government are being formed. At the same time, deep systemic changes

have to take place. After all, once structures have been formed and duties
distributed, it becomes impossible to do that.

The decisions necessary for this are clear. I have described many of them in
detail, and some of them emerge from the analysis conducted. Some important
things did not make it into this article, but they can all be set out on
several sheets of paper. And they could become an inalienable element of a
coalition agreement.

We need the will and understanding of the necessity for these changes. The
formation of the new face of Ukraine and a good future for it depend on a
harmonious mechanism of power.                         -30-
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14.      NET PROFIT RISES AT AUSTRIA’S RAIFFEISEN BANK
                          Helped by acquisition of Ukrainian bank Aval

Staff Reporter, The Wall Street Journal
New York, NY, Thursday, May 11, 2006

NEW YORK – Austria’s Raiffeisen International Bank-Holding AG said
first-quarter 2006 net profit rose 34%, helped by the acquisition of a
Ukrainian bank and continued growth in eastern European markets.

Net profit increased to Euro124.2 million ($158.4 million) from Euro92.8
million a year earlier. Net interest income — Raiffeisen’s main source of
revenue — rose 47% to Euro378.2 million from Euro258 million.

Raiffeisen saw the largest growth in its business in the Commonwealth of
Independent States, which contributed 30% of pretax profit, or Euro57.4
million, up 88% from Euro30.6 million the prior year.

The bank has aggressively expanded outside of Austria into the
faster-growing regions in Eastern Europe. The first-quarter results saw the
inclusion of Ukraine’s Bank Aval in the accounts for a full three months.

In April, Raiffeisen closed its acquisition of JSC Impexbank for around $550
million, becoming the largest foreign bank in Russia.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15.   POLISH, UKRAINIAN PRESIDENT STRESS ENERGY ISSUES,
   POLISH SUPPORT FOR UKRAINE AND HISTORICAL MEMORY
              To commemorate victims of the tragedy in Pawlokoma in 1945

Excerpt from report by Polish news agency PAP
Warsaw, Poland, in Polish 1334 gmt 12 May 06
BBC Monitoring Service, UK, in English, Friday, May 12, 2006

WARSAW – Polish-Ukrainian energy cooperation, assurance of the unchanging
nature of Polish policy towards Ukraine and the issue of historical memory
were the main threads of the talks between President Lech Kaczynski and the
Ukrainian leader Wiktor Yushchenko, who is visiting Poland.

“We spoke about matters of Ukrainian membership of NATO and about energy
initiatives presented by Ukraine,” said L. Kaczynski at a Friday [12 May]
press conference. “Perhaps in October we will be the co-hosts of a
conference on energy security in Warsaw,” he added. He stressed that this
was an idea of the Ukrainian leader.

Yushchenko added: “We spoke of cooperation in the area of energy, on the
implementation of the Odessa-Brody-Gdansk project. We regard it as sensible
to come out with initiatives concerning this project onto the international
level.” As he said, he is also discussing the activation of participation in
this project of the Kazakh side.

“For us, it is important that we should remain in solidarity in our stance
that stable supplies of energy products to the markets of other countries
are possible only through dialogue and cooperation,” stressed Yushchenko.

L. Kaczynski assured that that there was no change in Polish policy in
relation to Ukraine and that in this regard policy was stable.

A Ukrainian journalist at the press conference asked whether there would
not be a change in Polish policy towards Ukraine when, as he put it, “an
impression is gained of the temporary nature of the [present] Polish
government”.

“There has not been a coalition in Poland up until now, Poland was ruled for
six months by a minority government. At the moment there is no provisional
government. The present coalition is with certainty not an easy one, but I
think there is a chance that the coalition will be a lasting one,” responded
Lech Kaczynski in assuring that Polish policy towards Ukraine would not
change.

Both presidents also spoke about military cooperation, cooperation in the
area of youth exchange, teacher exchanges, and also the modernization of the
Polish-Ukrainian border.

L. Kaczynski announced that he would be doing everything for it to be
possible to increase the number of Polish-Ukrainian border crossings and to
increase their quality.
              VICTIMS OF THE TRAGEDY IN PAWLOKOMA
Yushchenko’s visit also has a historic dimension. Both presidents will on
Saturday [13 May] participate in ceremonies commemorating the Polish and
Ukrainian inhabitants who were victims of the tragedy in Pawlokoma, near
Przemysl [south-eastern Poland].

“As regards issues of historical memory, both sides have acknowledged that
there us no other way out that a march in that direction in which we shall
go tomorrow (Saturday – PAP editorial note), together visiting Pawlokoma,”
said the Polish president.

“Both sides are aware of the fact that is for each of us separately not an
easy way, but there is no other alternative,” he added.
Pawlokoma, where the presidents of Poland and Ukraine are to meet so as to
commemorate the Ukrainians and Poles who died there in 1945, has become one
of the tragic symbols of the complicated and often tragic history of both
nations.

According to most historians, 61 years ago a unit of the Home Army [AK]
commanded by Jozef Bissa, pseudonym “Waclaw”, shot 366 Ukrainian civilians.
This was in revenge for the abduction and murder of 11 Poles (some sources
state that it was nine). There are also sources indicating civilians as the
perpetrators of the revenge.

The Polish president was asked whether Ukraine will on Saturday hear the
word “sorry”. “You will hear my speech tomorrow. On our side we are moving
boldly forward, and no words of protest – and we have had such words
recently – will hold me back from this road,” replied the president.

A day before the arrival of the Ukrainian president, the All-Poland Youth
[MW] organization appealed to Lech Kaczynski to alter the formula for the
ceremonies in Pawlokoma. The authors of the appeal feel that the president
should not apologize for the events in Pawlokoma. Asked about this appeal,
Lech Kaczynski responded: “I spoke earlier of various voices that would not
hold me back.”

Yushchenko stressed that “both sides should with honour and honestly, as
befits neighbours, walk the distance to accord.” “We will win with the past,
not lose to it,” he stressed.

“I will be at the village of Pawlokoma and I will bow my head before this
tragedy that took place. We are doing this so that the past never again take
away the opportunity for accord today and development today,” Yushchenko
stressed. He added that “an honest historical dialogue” should be conducted.
“We will not build the future with a bad memory,” he stressed.

In the afternoon, Yushchenko laid a wreath at the Grave of the Unknown
Soldier [in Warsaw]. Before the end of the Day he was to meet with, among
others, the Speakers of the Sejm and Senate and deliver a lecture at the
European College in Natolin [near Warsaw]. [passage omitted - composition

of Ukrainian delegation]                              -30-
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16.            “YUSHCHENKO STRETCHES OUT HIS HAND”
                            The best option is an orange coalition.
             Ukrainian President tells Polish newspaper of coalition hopes

INTERVIEW: With Ukrainian President Viktor Yushchenko
BY: Waclaw Radzinowicza in Kiev
Gazeta Wyborcza website, Warsaw, in English 12 May 06
BBC Monitoring Service, United Kingdom; May 12, 2006

Text of interview with Ukrainian President Viktor Yushchenko, by Waclaw
Radzinowicz in Kiev, entitled “Yushchenko stretches out his hand”, by Polish
newspaper Gazeta Wyborcza website on 12 May:

[Headline:] Yushchenko stretches out his hand.

We must look each other in the eyes, sit down at a table, say to the end
that which has been passed over in silence. Yushchenko is coming to Poland
today; tomorrow he will unveil a monument to Ukrainians murdered in the
village of Pawlokoma.

[Waclaw Radzinowicz] Just under a year ago, together with President
Aleksander Kwasniewski, you opened the restored Orleta Cemetery in Lviv.
Now, together with President Lech Kaczynski, you are to unveil a monument to
360 Ukrainians who were murdered by Poles in 1945 in Pawlokoma. What does
this place mean, to you personally and to Ukrainians?

[Viktor Yushchenko] History may help or hinder in the development of good
relations between nations. Our joint history is complicated. It contains
everything – much good and much evil.

We would thus like to say goodbye to something, turn a page back, leave
something behind in the memory. That is why it is sometimes necessary to
look each other in the eye, sit down at a table, say to the end that which
has been passed over in silence.

That will be sufficient to leave a part of history behind us, so that it not
take away from us our present opportunities and mutual trust.

[Radzinowicz] You speak of politics. Nonetheless, these difficult events
from our not so distant history still call forth emotions in people.

[Yushchenko] Because behind each of these events there stand many people

who have had history pass through their hearts. On 9 May, we celebrated the
anniversary of the end of World War II. For Ukrainians, Red Army veterans,
this is the memory of a great victory, whereas for veterans of the Ukrainian
Insurgent Army [UPA] it is something completely different.

Year by year, however, the desire to understand the truth and the desire to
forgive grow – both between Ukrainians themselves as much as between
Ukrainians and Poles. There comes a moment in every history when we start to
understand that we must stretch out our hands to each other.

The Polish and Ukrainian people have for years now been going through a
process of reconciliation. I very much value the fact that we are capable of
this, of mutually forgiving each other, of stretching out our hands to each
other for accord in difficult and emotion arousing matters.

[Radzinowicz] Is the direction of Ukraine towards integration with the EU
still an open question, is it still capable of being the subject of
political disputes?

[Yushchenko] There are no longer any disputes over this issue. Thirty per
cent of our exports today go to EU markets, whereas five years ago this was
barely 18 per cent. Ukrainian business has already voted with its feet in
favour of the country’s European direction. We are convinced that the great
European market is opening up before us, but we understand that this is also
a challenge for us.

Ukraine must adapt itself to the principles that are in force in Europe. We
must fulfil the conditions that will allow us to enter the WTO, we must
modify 350 pieces of commercial and social welfare legislation. This is a
serious bit of homework for us.

We do not stand before a choice where we are to go – to the East or to the
West – but before the task of meeting the conditions that are indispensable
for integration with Europe.

[Radzinowicz] What will happen to the CIS? Russia is in the process of
economic warfare with Ukraine over gas, with Georgia and Moldova over the
import of wine and mineral water… [ellipsis in original]

[Yushchenko] The CIS is above all a political club whose members meet,
regularly indeed, but the effectiveness of its economic activities is very
low. And all the members of this club admit this.

Ukraine supports all methods of harmonization of cooperation between members
of the CIS. It would be best were this market to become a free trade zone,
but the accords on this matter that have been ratified by the Ukrainian
parliament are not being implemented because they have not been ratified by
the Russian Duma.

Border and customs barriers still exist between the countries of the CIS,
there is no unified tariff policy. Nothing has been changing here for years.

[Radzinow