AUR#817 Feb 16 Playing With The Rules, Not By The Rules; Will Democracy Survive?; U.S. Amb Taylor On Missile Defense;

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The Verkhovna Rada is deliberately passing laws that contradict the
Constitution. In the heat of political competition, politicians have been
ignoring the principle of rule of law in an evermore blatant manner.

This means the preservation of democracy in Ukraine will now be
guaranteed, not by laws, but by the goodwill of political leaders.

As the coalition and the Government show little respect for the law,
there is no guarantee that they will not curtail other political institutions
whose responsibility is to oversee the Government and to criticize it-

the opposition, the media and civil society. [Article Three]

Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer

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

ANALYSIS & COMMENTARY: By Sarah Whitmore (In German)
Ukraine-Analysen, Bremen, Germany, Tuesday, 13 February 2006
Action Ukraine Report (AUR) #817, Article 1 (Original English version)
Washington, D.C., Friday, February 16, 2006

Jane’s Foreign Report, UK, Thursday, February 15, 2007

Viktor Chumak, Ivan Presniakov and Oleh Myroshnichenko.
ICPS Newsletter #5 (352); International Centre for Policy Studies
Kyiv, Ukraine, Monday, 12 February 2007

Behind the Breaking News, A briefing from the Institute for the
Study of Conflict, Ideology and Policy, Volume V, Number 2
Boston University, Boston, MA, Wednesday, January 31 2007

High court to rule on disputed Ukrainian cabinet law
Eurasia Daily Monitor, Volume 4, Issue 29
The Jamestown Foundation, Wash DC, Fri, Feb 9, 2007

INTERVIEW: With U.S. Ambassador William Taylor
By Mykola SIRUK, The Day Weekly Digest in English #5
Kyiv, Ukraine, Tuesday, February 13, 2007

Based on an article by Olaf Osica, Natolin European Centre analyst
Polish News Bulletin, Warsaw, Poland, Wed, Feb 07, 2007

UNIAN News, Kyiv, Ukraine, Monday, February 5, 2007

US general’s statement about Ukraine on missile defence questioned
ANALYSIS & COMMENTARY: By Vitaliy Portnykov
Glavred, Kiev, in Russian 0000 gmt 30 Jan 07
BBC Monitoring Service, United Kingdom, Jan 31, 2007

Interfax Ukraine News, Kyiv, Ukraine, Thu, February 1, 2007

REMARKS: Minister of Economy of Ukraine, Volodymyr Makukha
Ukraine Business Forum, Waldorf Astoria Hotel,
New York, New York, Wednesday, December 6, 2006

Incomes, house prices and freedom all on the rise
By Vitaliy Milentyev and Denys Volkov, The Winnipeg Free Press
Winnipeg, Manitoba, Canada, Thursday, February 15 2007

INFORM Newsletter, Issue 30, Yulia Tymoshenko Bloc (BYuT)
Kyiv, Ukraine, Monday, 12 February, 2007

One of the best Ukrainian documentary films hitting the screens soon
By Dmytro Desiateryk, The Day Weekly Digest #5
Kyiv, Ukraine, Tuesday, February 13, 2007

By Fedir Moroziuk, Member, Ukrainian Association of
Holodomor Researchers, Kherson Oblast (Written in 1997)
Posted on website, Kyiv, Ukraine
A Program of the International Charitable Fund Ukraine 3000
Action Ukraine Report (AUR) #817, Article 15 (in English)
Kyiv, Ukraine, Friday, February 16, 2007

SaveDarfur Full-Page Advertisement
Washington Post, Washington, D.C. Wed, February 14, 2006

ANALYSIS & COMMENTARY: By Sarah Whitmore (In German)
Ukraine-Analysen, Bremen, Germany, Tuesday, 13 February 2006
Action Ukraine Report (AUR) #817, Article 1 (Original English version)
Washington, D.C., Friday, February 16, 2006

The resignation of foreign minister Borys Tarasiuk and the promulgation of
the law ‘on the Cabinet of Ministers’ without the president’s signature are
the latest manifestations of the intra-executive power struggle which has
dominated politics in Kyiv since the appointment of Viktor Yanukovych as
prime minister in the aftermath of the March 2006 parliamentary elections.

These elections produced a reconfiguration both of political forces and of
the formal rules of the game in Ukraine. The Party of Regions emerged as the
biggest party in parliament, signalling the successful comeback of Viktor
Yanukovych after his defeat in December 2004 while at the same time, the
so-called ‘politreform’ (the constitutional changes negotiated at the height
of the orange revolution) came fully into operation, as the new government
with enhanced powers would be formed by a parliamentary coalition, not the

Since then Ukrainian politics has been characterised by heightened
uncertainty and by a bitter power struggle between the political elites,
which primarily centred on the battle between the president and prime

On one level this power struggle is a response to legal inconsistencies and
perceived deficiencies in the ‘politreform’ which the president and
parliament are seeking to remedy in their own favour, but the ‘war of laws’
is also a reflection of the deeper post-Soviet political condition, where
formal political institutions are viewed by actors as malleable and

Although much recent writing on post-Soviet politics has quite rightly
pointed to the importance of various types of informal rules, formal rules
remain worthy of concern as far as they continue to structure formal
opportunities for political actors in the decision-making process and
therefore remain an object of competition as rival players seek to use them
or shape them to their own advantage.

While institutions remain objects of competition, the formal rules are
subject to constant alteration (or the threat of alteration), which
precludes emergence of an institutional equilibrium whereby actors are
prepared to commit to existing formal institutions in order to reduce

Since 1996, Ukrainian history is littered with attempts to alter the
constitution either in letter or in spirit (via enabling legislation). In
this respect, the current uncertainty is nothing new, but the ‘politreform’
along with the accompanying change to a fully proportional electoral law
involved the most far-reaching alteration of the formal system of power for
a decade and consequently, has engendered a thorough-going period of
adjustment by elites to the new formal rules of the game which has
manifested itself in a multi-dimensioned institutional power struggle which
overlaid the ongoing struggle for economic preferences and advantages.

High levels of uncertainty have led all key political actors to focus more
obviously than ever on short-term objectives over strategic goals and to
expose publicly the cynical basis of political deals and legal nihilism
which shape their political actions.

The acrimonious battles over personnel (in particular dismissal of the
ministers appointed by the president) and institutions (most markedly over
the law ‘on the Cabinet of Ministers’) have been the clearest instances of
this institutional power struggle.

Since being appointed as Prime Minister, Viktor Yanukovych has unequivocally
sought to establish himself as the centre of political power in Ukraine. In
this he has strong resources, having a substantial lead in opinion polls as
the most trusted politician in Ukraine, having the financial backing of some
of Ukraine’s richest people and being backed by a parliamentary coalition
within which his Party of Regions was the overwhelmingly dominant force
(186 of 238 seats).

Despite initial predictions that the ‘anti-crisis coalition’ would be
short-lived, it has so far proved durable because the junior partners of the
Socialists and Communists have much to lose by leaving it. Yanukovych also
benefited from the rancorous relations between the parliamentary blocs left
outside the coalition, which each contained substantial (business)
constituencies unable to come to terms with being left out of government,
and correspondingly, without access to state resources.

Therefore, Yanukovych was in a strong position to pursue an assertive policy
aimed at securing his position and benefiting the financial-industrial
groups that back the Party of Regions. Although tensions exist between the
different factions within the party, these are minor compared to those
experienced in Yulia Tymoshenko’s eponymous bloc BYuT and especially
President Yushchenko’s Our Ukraine.

Viktor Yushchenko has struggled to accept the new constitutional reality and
the new government, neither of which correspond with his preferences. He
vacillated between seeking accommodation (for example, in signing the
Universal in August 2006 which permitted him to secure the appointment of
Yuriy Lutsenko as Minister of the Interior, and four Our Ukraine nominees as
ministers of justice, youth and sport, culture and health in Yanukovych’s
government) and resistance (in the use of presidential vetoes and appeals to
the Constitutional Court).

However, the president’s resources were limited due to the numerical
weakness and divided nature of his parliamentary party, Our Ukraine, his low
popularity, the new constraints on his constitutional authority and limited
support from his secretariat, which has been weakened by high staff turnover
and capricious dismissals (sometimes of entire departments) by the head of

Evidence of a thorough-going power struggle between the president and prime
minister emerged almost immediately after the government’s appointment in
August 2006, despite the much-trumpeted signing of the Universal, which was
supposed to ensure a co-ordinated policy from the executive in key areas,
but in reality served as a fig-leaf to shield Yushchenko from public
humiliation from appointing Yanukovych as premier.

Yanukovych seized the initiative and challenged the president’s authorities
on a number of policy and procedural issues, including the right to dismiss
the ministers of defence and foreign affairs (which remained the president’s
prerogative in the new constitutional arrangement) and initiated a new draft
law ‘on the Cabinet of Ministers’, a law long overdue in Ukraine (having
been vetoed five times by President Kuchma) that would clarify the new
division of powers firmly in the prime minister’s favour.

The entry of five presidential nominees into Yanukovych’s government (in
addition to his constitutional quota of the ministers of defence and foreign
affairs) was intended as a precursor to Our Ukraine formally joining the
ranks of the coalition, which would have bolstered Yanukovych’s
international image and allowed Our Ukraine businessmen access to state

However, rapidly escalating tensions between the president and prime
minister in a number of areas including the president’s right to issue
decrees without the premier’s countersignature, the budget and the prime
minister’s foreign policy role eventually led Yushchenko’s party to declare
itself in opposition and to recall its ministers from the government.

The four Our Ukraine ministers resigned in October, but not foreign minister
Tarasiuk, who along with non-party Anatoliy Hrytsenko, were nominated by
the president according to the new constitution.

However, the latter two, along with Interior Minister Lutsenko, held
portfolios of greater interest to the coalition and were a thorn in the side
of Yanukovych. Tarasiuk’s pro-Western position jarred with the electoral
platform of the Party of Regions and had long irked Russia, so that
speculation about Russian pressure on Yanukovych to get rid of him sounded

Lutsenko was known to have irritated businessmen in the Party of Regions
with investigations by law-enforcement bodies. And the ministry of defence
has a huge wealth of assets, especially land, under its control.

Campaigns to discredit the remaining pro-Yushchenko ministers were launched,
with allegations of corruption levelled at both Lutsenko and Hrytsenko. In
the Interior Minister’s case, both a criminal and parliamentary
investigation were conducted, while the government’s oversight body claimed
to have uncovered misuse of budget funds in the defence ministry.

However, in both cases, the political motivation behind the allegations was
clear. Hrytsenko robustly defended himself on the floor of parliament and
was left in place for the time being, but Lutsenko was censured for
ineffective work and sacked on November 30 by a vote of the Party of Regions
and Communists with the assistance of 18 deputies from Tymoshenko’s bloc.

Two days later, despite being part of the president’s ‘quota’ according to
the constitution, Tarasiuk was dismissed by the anti-crisis coalition.
Backed by the president and a court decision about the illegality of the
dismissal, Tarasiuk refused to leave his post.

However, Yanukovych prevented him from attending cabinet meetings and cut
off financing to the ministry, which eventually forced Tarasiuk to resign on
30 January. The successful ousting of Tarasiuk and Lutsenko deprived
Yushchenko of his main advocates in the government and represented
substantial defeats in the ongoing power struggle with Yanukovych.

Yanukovych was able to remove Lutsenko with the help of businessmen from
Tymoshenko’s bloc, exposing the internal contradictions at the heart of the
opposition, but much more damaging was the forced exit of Tarasiuk, which
serious undermined the president’s constitutional authority to choose the
foreign minister.

What remained unclear was what would happen if the parliament failed to
approve the president’s nomination of a new foreign minister? This was just
one of many possible examples of gaps in the new constitutional framework,
requiring procedural elaboration in a law ‘on the Cabinet of Ministers’.

The adoption of this law became a signal moment in the power struggle
between the president on one hand and the government and anti-crisis
coalition on the other, and was envisaged as one of the main instruments in
shoring up the constitutional authorities of each respective party.

Behind this process stood the ongoing uncertainty about the legality of the
‘politreform’ itself. Yushchenko continued to cast around for means to
overturn it, while one of the first moves of the anti-crisis coalition was
to adopt a law of questionable legality prohibiting the Constitutional Court
from ruling on the constitutionality of the December 2004 amendments.

Therefore both the government and the president each sought to expand the
limits of their constitutional powers at the other’s expense by initiating
their own draft laws ‘on the Cabinet of Ministers’ taking advantage of the
blank spots in the existing constitution. Both bills were drafted
specifically with the current incumbents and circumstances in mind, and
aiming to confer them with an advantage in the power struggle.

Although participants and observers predicted a compromise whereby the
government’s bill would form the basis of the new law, but some of the
president’s proposals would be taken into account to secure his signature on
the resultant law, the government was confident it had a range of options to
maximise its preferences: finding the necessary 300 votes to override a
presidential veto; utilising the new constitutional provisions that obviated
the need for the president’s signature; or, failing that, securing a
favourable ruling from the Constitutional Court.

Thus in late December the coalition passed the government’s version of the
law without taking any of Yushchenko’s proposals into account.
Yushchenko’s subsequent veto was overridden on January 12 amid a scandal:
the additional votes required were provided by Tymoshenko’s bloc in exchange
for the coalition’s support for the law on the so-called ‘imperative
mandate’ for deputies of local councils (i.e. that deputies loose their mandate if
they leave the party on whose list they were elected, needed by Tymoshenko
to stem the haemorrhaging from her party ranks at the local level) and the
law on opposition (in first reading).

Tymoshenko’s cynical deal with the Party of Regions dealt a significant blow
to Yushchenko’s position, but it was also a move that may cost her
substantial popular credibility.

The president then took the legally questionable decision to return the bill
to parliament a second time, but after some hesitancy, the coalition decided
to promulgate the law with the signature of the parliamentary speaker as
permitted by the new constitutional rules.

The law was official published on February 2 2007 and became the first law
to come into force without the president’s signature. Yushchenko filed an
appeal to the Constitutional Court, but the court has been strangely quiet
since its reconstitution in August, and is unlikely to rush to stick its
inexperienced head above the parapet into the fray between president and

The promulgation of the law set a startling precedent and roused
commentators to talk about inter-branch and intra-branch war, and again put
some wind in the sails of Tymoshenko’s preference for pre-term elections.

Within days the kaleidoscope of political alliances had turned and on
February 5th Tymoshenko signed a statement with Our Ukraine on co-
ordinated opposition activity in parliament, including a commitment to
work jointly to overturn the politreform, while the anti-crisis coalition
were already talking about amending the law to take into account some
of the president’s proposals.

The unclear constitutional and political configuration since the enactment
of the politreform has led political actors to respond with short-term
tactics directed to the acquisition of power and above all, ensuring their
own political survival.

All players thus sought to play with the rules to enhance their own position
in the future political game. This engendered rapidly shifting alliances
based on situational coincidence of interests: ‘You scratch my back, I’ll
scratch yours’.

In the circumstances, this behaviour is rational but also illustrates the
gulf between politicians and the interests of their electorate, as
politicians fleetingly allied themselves with yesterday’s declared enemies.
Such actions are also likely to reproduce political and institutional

As Robinson pointed out with regard to Yeltsin’s Russia (2000: 4-7), the
crux of the problem is the weakness of formal state institutions, which are
unstable and subject to change at the whim of politicians. Institutional
weakness (re-)produces instability because institutions lack legitimacy for
the competing political elites, who lack incentives to invest in such
institutions and adhere to formal rules when they are uncertain that other
competitors will also adhere to them and that the institution will remain
important in the future. So in such circumstances, the only certainty is
uncertainty. -30-
References: Neil Robinson (2000), ‘Introduction: Institutions and Political
Change in Russia’, in Neil Robinson (ed.), Institutions and Political Change
in Russia, Basingstoke: Macmillan, pp. 1-10.
NOTE: Sarah Whitmore, PhD, is Senior Lecturer in Politics, Oxford
Brookes University, UK and author of ‘State-Building in Ukraine:
Ukraine’s Parliament, 1990-2003′, London and New York:
NOTE: The English version of this article was published by
the AUR with permission from the writer Sarah Whitmore.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Jane’s Foreign Report, UK, Thursday, February 15, 2007

As Ukraine moves towards becoming a parliamentary republic,
deepening conflict between the executive and parliament has emerged.

President Viktor Yushchenko has suffered a major decline in public
support as his position has become increasingly isolated.

The resignation of pro-Western Minister of Foreign Affairs Borys
Tarasiuk in January is likely to signal a return of a multi-vector foreign

Ukrainian President Viktor Yushchenko has seen his position steadily
undermined following the introduction of a new constitution in January 2006
as part of the package of agreements that saw him become president in
December 2004. The main benefactor of the reforms has been his opponent
Viktor Yanukovych who returned as prime minister and head of the anti-crisis
majority parliamentary coalition government in August 2006.

In the latest of a series of blows to the increasingly isolated president,
Minister of Foreign Affairs Borys Tarasiuk resigned from his position on 30
January. This has seen the opposition bloc of Prime Minister Yanukovych take
the ascendancy in Ukrainian politics and caused a fundamental re-alignment
of Ukraine’s foreign policy away from the pro-Western ideals of 2004’s
‘Orange Revolution’.

Following the March 2006 parliamentary elections, pro-reform forces that had
backed the Orange Revolution spent three months creating a coalition and
government that subsequently collapsed within a week. The defection of the
Socialists to the then-opposition Party of Regions and the communists
permitted the creation of the anti-crisis coalition and a government headed
by Yanukovych.

Despite having spent only five months in office, the coalition has
successfully deepened constitutional reforms by removing greater powers
from the executive and transferring these to parliament. In January,
parliament adopted a law on the cabinet of ministers that transferred further
powers to the legislature, including aspects of foreign and defence policy.

Parliament is planning to adopt further laws on the president and the
National Security and Defence Council that will weaken the executive in
relation to the legislature. Some members of the Party of Regions have not
hidden their eventual goal of transforming Ukraine into a parliamentary
republic. At the same time, they have threatened impeachment if the
president disbands parliament and obtains backing from the constitutional
court to abolish constitutional reform.

Yanukovych’s rise in power has largely been at the expense of Yushchenko.
The president’s approval ratings began to plummet towards the end of 2005
and, according to various domestic opinion polls, he currently maintains
less than 10 per cent support. Yushchenko’s chances of maintaining his
position beyond the 2009 elections now appear remote.

Yushchenko’s low popularity is due to a number of factors including his
personal antipathy to former ally Tymoshenko, disillusionment among Orange
Revolution supporters at his September 2005 and early 2006 deals with
Yanukovych, and his perceived lack of political resolve. With the
progressive reduction of his executive powers likely to continue until the
next election cycle from 2009 to 2011, Yushchenko’s lame duck status is
only likely to get worse.

In an example of Yushchenko’s isolated status and, his critics would argue a
lack of resolve, Minister of Foreign Affairs Borys Tarasiuk was dismissed by
parliament on 1 December 2006. This is despite the fact that the reformed
constitution supposedly gives the executive control over the appointment of
the foreign and defence ministers. Tarasiuk also complained that the
presidential secretariat did not act or speak in a unified manner about his
removal from office.

Although Tarasiuk attempted to continue to act as foreign minister following
his dismissal, he was barred from attending government meetings. The final
affront came with the cutting off of government funds to the Ministry of
Foreign Affairs, preventing the payment of its salaries. Tarasiuk
subsequently resigned his position on 30 January.

The foreign minister’s dismissal also illustrates the way Yushchenko’s
pro-Western foreign policy agenda has been steadily undermined. Within
Ukraine, Tarasiuk was widely held as a key representative of the Orange
Revolution’s desire to break away from Russia’s sphere of influence and join
NATO and the EU. His removal is, therefore, likely to presage a return to
the multi-vector policy followed under previous president Leonid Kuchma that
sought to balance Ukraine’s relations with Russia and the West.

In the short term, this is likely to see an end to the move towards NATO
membership, especially as possible replacements for Tarasiuk, such as
presidential secretariat leader Oleksandr Chalyi, do not support NATO

Meanwhile, the EU’s new framework ‘Enhanced Agreement’, set to replace the
Partnership and Co-operation Agreement in 2008, will not outline provisions
for future membership.

This shift risks paralysing Ukraine’s foreign policy as competing
parliamentary factions and an isolated president vie to further their own
influence. As well as ending the short-term hopes of greater integration
with the West, such political infighting is also unlikely to lead to any
great rapprochement with Russia. Instead, Ukraine could find itself in both
a domestic and international political no-man’s land, unable to follow any
one clear direction.
Ukraine faces two potential short-term scenarios.

[1] First, the president supports the demands of the opposition to disband
parliament. This would open up the possibility of replacing the anti-crisis
coalition with a more pro-reform partnership backed by the president.

[2] Second, the president does not take the decision to disband parliament
and the current assembly remains in place until the next elections in March

This would threaten many of the reforms and policies brought forward by
the Orange Revolution and Yushchenko’s executive powers, which are
already severely curtailed, would be effectively removed.

Neither scenario is likely to see Ukraine’s medium-term political stability
or foreign policy coherence improve to any significant degree. -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Viktor Chumak, Ivan Presniakov and Oleh Myroshnichenko.
ICPS Newsletter #5 (352); International Centre for Policy Studies
Kyiv, Ukraine, Monday, 12 February 2007

The adoption and publication of the Law on the Cabinet of Ministers has
confronted Ukrainian society with a critical problem, say ICPS analysts
Viktor Chumak, Ivan Presniakov and Oleh Myroshnichenko.

The Verkhovna Rada is deliberately passing laws that contradict the
Constitution. In the heat of political competition, politicians have been
ignoring the principle of rule of law in an evermore blatant manner.

This means the preservation of democracy in Ukraine will now be
guaranteed, not by laws, but by the goodwill of political leaders.

As the coalition and the Government show little respect for the law,
there is no guarantee that they will not curtail other political institutions
whose responsibility is to oversee the Government and to criticize it-the
opposition, the media and civil society.
In H2’06, the cohabitation of a “strong” President and a “strong”
Government, both of whom had significant Constitutional powers but
came from different political camps, allowed a certain balance between
the two government institutions.

As in other countries, this kind of cohabitation blocked the implementation
of systematic policy at the state level.

However, finding it impossible to implement policy on a unilateral basis,
the various players had to seek compromise and make concessions to each
other at least regarding such issues as Ukraine’s accession to the WTO and
the adoption of the State Budget. This balance contributed to a relatively
democratic political situation.

But the Verkhovna Rada coalition and one of the opposition factions proved
ready to override a Presidential veto on a Cabinet Law that redistributed
powers from the President to the Cabinet of Ministers. Moreover, this was
done in a manner whose compliance with the Ukrainian Constitution is in
serious doubt, demonstrating how instable the political balance in Ukraine
really is.

The Verkhovna Rada majority shows every intention of continuing along this
course-adopting laws that expand its powers and those of the Government
and curtail the powers of the President, regardless of any problems with the
consistency of these laws and their compliance with existing legal norms.

Similar initiatives include a Bill on the President and amendments to the
Law on the National Security Council.
The Government and the Rada majority insist that the purpose of this process
is to move towards a parliamentary republic. But the means used to achieve
this goal raise serious doubts whether the result will be democratic.

[1] Firstly, the rules that govern relations between the President and the
Cabinet have become more contradictory, not less. Having a choice between
ordinary laws and the Constitution, political players will begin even more
to base their decisions on regulations whose legitimacy they uphold or
regulations that benefit them.

The Cabinet of Ministers will follow the Law just passed, while the
President will be driven by his understanding of the constitution, which is
the highest direct Law of the land.

In practice, decisions will be implemented in those instances where the
decisionmaker has direct power over those who must carry out the decision.
This situation will weaken the legitimacy of nearly all government decisions
derived from newly adopted laws.

[2] Secondly, there is no guarantee that the practice of ignoring the
Constitution will not now be repeated. If the country does not adhere to
the principle of rule of law, nobody can be sure that their powers are

There is no way to be certain, now, that the Rada opposition, independent
media or the other institutions needed for democracy to function will not
become the next victims whose wings are clipped after the President.
The adoption of laws that are legally suspect can be corrected when an
independent judiciary does its job properly. Balance of power can, for
instance, be restored through the Constitutional Court, according to
procedures specified in law.

But there are serious doubts whether Ukraine’s Constitutional Court will be
able to quickly decide whether new legislative norms comply with the
Constitution. At the moment, as much as 4-5 months can pass from the time
a law comes into force to the time when the Court cancels any illegitimate

To give an idea of how long it takes to wait for a Constitutional Court
ruling, the Court began hearing one appeal that was submitted on 20
September 2006 only on 18 January 2007-four months later. If the coalition
makes new decisions that are questionable as to their Constitutionality
during this time, the Constitutional Court will not be able to quickly
evaluate these new decisions.

This will leave relations among government institutions in legal limbo, if
not outright chaos in the meantime.

At the level of courts of general jurisdiction, this situation can raise
conflicts as a result of a wave of claims filed by ordinary citizens and
civil servants based on legal acts at various levels-the Constitution and
amended laws on the Cabinet of Ministers, local administrations, and so on.

Soon, Ukraine is likely to witness “raiding” of a new type. Having armed
themselves with mutually contradictory court decisions on the legality of a
particular appointment by the President or the Government, candidates for
positions of deputy ministers or deputy governors of local administrations
will assault executive buildings and take higher offices by force.

The example of the Mukacheve court banning the publication of the Law
on the Cabinet of Ministers is only the first sign.
The main condition for democracy in Ukraine to be stable is to immediately
enforce the principle of rule of law. The main instruments of this must be a
strong, impartial judicial system and an effective, independent
Constitutional Court.

As with all strategic goals, this goal cannot be achieved easily or rapidly.
It will require a lot of time, which means that the President, the
opposition and the Government should begin to work on it right now.

The vigor with which the President and his Secretariat are fighting over the
Law on the Cabinet would yield more results if they focused on lobbying
for reform of the judiciary and of law enforcement bodies, especially as
Concepts for these two sets of reform were developed long ago.

In addition, with an instrument like the National Security Council, this
issue can be raised at an NSC meeting and the necessary Decrees issued
that are binding on the Government.

The Verkhovna Rada opposition could bring equally worthwhile benefits to
Ukrainian society, if, at when debating the 2007 State Budget, it would ask
aloud how much money the Budget has allocated to implement these reforms
instead of vaguely reproaching the Cabinet for its “antisocial” Budget.

One effective measure would be a campaign among ordinary Ukrainians and
thinktanks oriented on jurisprudence for a legal evaluation of the legality
of government decision making, involving wide media coverage of the issue
of the failure of government bodies to adhere to the rule of law. -30-
For additional information, contact ICPS analyst Ivan Presniakov via email
at ICPS newsletter is a weekly publication of the
International Centre for Policy Studies, delivered by electronic mail.
To be included in the distribution list, contact the ICPS publications
department at ICPS newsletter editor Olha
Lvova ( English text editor L.A. Wolanskyj.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Behind the Breaking News, A briefing from the Institute for the
Study of Conflict, Ideology and Policy, Volume V, Number 2
Boston University, Boston, MA, Wednesday, January 31 2007

On 30 January, Ukraine President Viktor Yushchenko suffered a major blow
when he was forced to accept the resignation of his pro-western Foreign
Minister and longtime ally Borys Tarsyuk. (1)

The resignation is the latest salvo in a political struggle that has left
Yushchenko isolated and under a continuous barrage not only from Prime
Minister Viktor Yanukovych, but also from his former ally and former Prime
Minister Yulia Tymoshenko. In the process, Yushchenko, largely through his
own actions, has lost most of the authority he won during the Orange

The political struggle also has caused confusion in foreign capitals; it is
unclear who is directing foreign policy, it is unclear who speaks for
Ukraine internationally, and it is unclear if either the president or the
prime minister has the ability to follow through on promises made to
potential international allies.
Borys Tarasyuk had been in the middle of a tug of war between the president
and prime the minister for almost two months. On 1 December, at Prime
Minister Yanukovych’s request, parliament voted to dismiss Tarasyuk, who had
been appointed by Yushchenko. The president strenuously objected to the
move and maintains that the vote was invalid. (2)

This dispute between the president and prime minister centered on Tarasyuk’s
unfailing pro-western orientation and his determination to pursue European
Union and NATO membership for his country. Yanukovych has rhetorically
supported Ukraine’s pro-Western orientation, but rejects NATO membership
and has stopped all concrete movement toward the EU.

Until his resignation, Tarasyuk continued to represent Ukraine on foreign
trips at Yushchenko’s behest, while at the same time being barred by
government security from entering his office or participating in cabinet
meetings. (3) However, possibly in reaction to a decision by a Ukrainian
district court to call Yushchenko to testify during Tarasyuk’s appeal, the
president backed down.

The retreat likely signals a major foreign policy shift, with only one
Yushchenko ally remaining in the government – Defense Minister Anatoliy
Hrytsenko. Although the constitution allows Yushchenko to appoint a new
foreign minister, the parliament must approve the nomination.
The domestic situation in Ukraine became significantly more confusing on 12
January, when parliament extended its attack to include not only Yushchenko’s
foreign minister, but also Yushchenko’s most basic influence on the
government. The chamber voted to override Yushchenko’s veto of a bill that
drastically reduces his power. (4)

In particular, the Law on the Cabinet of Ministers allows the parliament to
appoint the prime minister without presidential approval, taking away
Yushchenko’s ability to influence the formation of the cabinet. The bill
also grants the prime minister the authority to appoint and dismiss the
foreign and defense ministers, removing this prerogative from Yushchenko’s

This latter provision directly contradicts the country’s constitution and
likely would be overturned in any constitutional legal challenge.

Yushchenko’s Our Ukraine political bloc is challenging the legality of the
Law on the Cabinet override, based on what the party says are differences in
the wording of the bill originally vetoed by the president and the bill sent
to the president after the override vote.

The president received new wording of the bill, his press service said, and
therefore, parliament’s vote cannot be considered an override. (5) On 22
January, following an Our Ukraine complaint, the Mukacheva District Court
agreed with the president and issued an injunction against implementation of
the law, pending further review. (6)

Prime Minister Yanukovych and his ally, Parliamentary Speaker Oleksandr
Moroz, deny that the wording of the bill was changed and have vowed to
implement the law, despite the court order.

On 30 January, Moroz published “information about the official publication”
of the law in the government and parliament newspapers, but has refrained
from publishing the text. (7)

One day earlier, he suggested that parliament may be ready to support the
president’s amendments to the law. (8) The president responded weakly by
calling for a “roundtable” to search for “compromise.” (9)

Given the lack of success at past presidential roundtables, and his retreat
over Tarasyuk, it is doubtful that such a move would do much to ease
Yushchenko’s plight. It is clear, however, that Ukraine remains mired in a
legal and political morass.

The override removing many of Yushchenko’s powers succeeded only because his
former Orange Revolution ally Yulia Tymoshenko chose to support the measure.

With this vote, it became apparent that the president no longer can expect
the unilateral support of her bloc on any piece of legislation – even a
measure on which they were united previously.

The vote against the president seemed unexpected to members of Our Ukraine,
who marched out of the parliamentary chamber in protest. (10) Yushchenko can
now count on the support of only 80 out of 450 deputies for his proposals –
on a good day.

The move by Tymoshenko prompted cries of “betrayal” from Our Ukraine, and
suggestions that Tymoshenko and the 125 members of her parliamentary bloc
had turned away from the “orange ideals.” (11)

The vote also shocked many of those who had stood in Ukraine’s Independence
Square, watching their two leaders arm in arm, during what would become
known as the Orange Revolution.

Although the two have endured strained relations throughout most of their
political careers, a vote by Tymoshenko to remove significant powers from
Yushchenko and turn them over to revolution opponent Yanukovych seemed

This is particularly true since, in 2004, Tymoshenko fought vehemently
against constitutional reforms that granted the prime minister’s office
greater powers – reforms which Yushchenko ironically supported.

But much has changed in Ukraine. Since the Orange Revolution, Yushchenko has
seen a significant diminution in public support, while both Yanukovych and
Tymoshenko have seen their popularity ratings surpass the president’s.

Instead of moving quickly to consolidate his power directly after taking
office, Viktor Yushchenko chose to separate himself from his closest allies,
while reaching out to his former opponents. In the process, he alienated
his revolution partner Tymoshenko and allowed Yanukovych gradually to
undermine his power.

Despite the current suggestion from Our Ukraine that Tymoshenko has betrayed
them with this latest vote, the first break in the “Orange” team, as
Yushchenko and Tymoshenko became known during the revolution, actually
occurred when Yushchenko dismissed Tymoshenko from the post of prime
minister in September 2005.

The dismissal came during a purge of several Yushchenko allies who had been
accused of corrupt or inappropriate activities (none were ever proven) in
their positions.

Neither Tymoshenko nor anyone in her cabinet was mentioned in these
allegations, but the prime minister had used her position successfully to
increase her popularity and had bumped heads with Yushchenko’s aides on a
number of issues. When the president dismissed his tarnished aides, in
one broad sweep, he dismissed Tymoshenko and her allies, too. (12)

Shortly thereafter, Yushchenko signed a Memorandum of Understanding with
Viktor Yanukovych, resuscitating the political career of his former
presidential and revolution opponent. In return, Yanukovych agreed to vote
to confirm Yushchenko’s new choice for prime minister. (13)

The president was criticized heavily for the agreement, which included
support of an amnesty for electoral fraud and the introduction of immunity
from prosecution for local deputies. (14)

The voters took their first revenge during the March 2006 parliamentary
elections, as Yushchenko’s Our Ukraine bloc (14%) was beaten soundly by The
Yulia Tymoshenko Bloc (BYUT) (23%). Yanukovych, meanwhile, placed first
with 32%.

But instead of actively supporting a reuniting of the “orange coalition,”
which would have controlled a parliamentary majority, Yushchenko introduced
Yanukovych’s name into parliament for confirmation as prime minister. Our
Ukraine joined an ill-fated coalition government with Yanukovych, and
Tymoshenko announced her “radical opposition” to the government.

Given the history of the two since the Orange Revolution, it is no surprise
that Tymoshenko’s reflex reaction to support Yushchenko was not in top form.
Nevertheless, the vote by Tymoshenko is more than a bit perplexing.

As longtime Ukraine analyst Taras Kuzio wrote in his recent BBC blog, “Those
of us who have been following Soviet and post-Soviet developments have
become used to reading between the lines and figuring out what is really
going on behind the scenes. This ability is now seriously stretched.” (15)
Surely, there must be more of a reason for the vote than irritation over
Yushchenko’s past treatment of his former ally.

Tymoshenko quickly suggested that this vote “absolutely did not” represent
any alliance with Yanukovych and named several reasons for the action.
First, in return for assisting in the override of the President’s veto, the
ruling coalition supported, in the first reading, the Law on the Opposition.
This bill, which guarantees the political opposition a number of important
rights, could be a major step forward in Ukrainian politics.

If passed into law in the second reading, it would place Ukraine securely in
the realm of Western European, pluralistic, parliamentary republics.
Tymoshenko said, “What you have seen is an interim position in order to
secure gains for Ukraine’s long-term future.” (16) But even Tymoshenko
admitted that passage of the Law on Opposition in the second reading is not

BYUT’s Law on Imperative Mandate for local councils also was passed in the
second reading. The law will make it virtually impossible for a local
deputy elected on a party list to oppose the wishes of the party leadership,
for fear of being expelled.

This could be a major improvement, eliminating the potential for bribery,
extortion and coercion of individual deputies. This will only be the case,
however, if the provision to expel members is not abused by party

Tymoshenko also suggested that the vote would “end the constitutional
crisis” between the president and the prime minister by placing power
securely in the hands of one, and that this vote is meant to set the stage
for a dismissal of parliament by the president. (17)

In fact, at a meeting congress of 3,000 BYUT local deputies, Tymoshenko
announced that she already had begun creating a new election list for a new
election. (18)

It seems unlikely that this vote by BYUT will end the constitutional crisis,
since constitutional challenges are likely to ensue if the law comes into
force as passed. Moreover, it seems even less likely that Yushchenko will
embrace Tymoshenko’s idea to dismiss parliament, which would necessitate
working with Tymoshenko during and following any new parliamentary election.

In the past, Yushchenko has demonstrated an almost pathological aversion to
working with Tymoshenko, even to his own detriment and to the detriment of
his programs. This likely will increase after the latest vote.

It may be possible that Tymoshenko doesn’t have any real expectation that
the president will dismiss parliament, especially given the lack of any
legal reason to do so. Instead, with the vote, Tymoshenko forces Yushchenko
into a choice—enter into further agreements and compromises with Yanukovych
or begin working in a collaborative manner again with her to push forward
his agenda.

The situation resembles that of September 2005, when Tymoshenko refused to
support Yushchenko’s choice to replace her as prime minister. The president
then chose to sign the soon-to-be-broken Memorandum of Understanding with

This move drastically undermined voter support for him and his party, and
would not have been necessary had Tymoshenko supported him. Tymoshenko
used that memorandum effectively in her parliamentary election campaign.

To this end, BYUT deputy head and foreign policy advisor Hryhoriy Nemyria
suggests that Tymoshenko was attempting to block any possible new agreements
between Yushchenko and Yanukovych, thus clarifying once again the choice
facing the president. (19)

Regardless, in Internet chat rooms and on the streets of Kyiv, voters now
are expressing not only irritation with Yushchenko, but also with
Tymoshenko, for voting “with” the man she has always fought, and against the
man she has always supported.

She, no doubt, is trusting that her oratory and political skills, which have
served her in good stead in the past, will help her explain her position and
calm the criticism of this vote.

Should Tymoshenko quickly return to “radical” opposition tactics, voters may
overlook this “situational” alliance with Yanukovych—as they did after the
September 2005 prime minister vote. But there is no doubt that the strategy
is a risky one.

The next steps of both Tymoshenko and Yushchenko will determine what effect
this vote may or may not have on their popularity and on the future
direction of the country.

While nothing is certain in Ukraine, given the President’s past inability to
outmaneuver opponents politically, prospects for his political career seem
bleak. And prospects for Ukraine’s Western orientation also seem dim in the
near future.

“Frankly speaking, we do not understand who represents Ukraine,” said
Poland’s Ambassador to Ukraine Jazec Klyuchkovsk recently. (20) Latvian
President Vaira Vike-Freiberga was even more blunt during the Davos World
Economic Forum on 26 January. “The Ukrainian people deserve much better
than what they have,” she said. (21)
(1) “Ukraine’s foreign minister resigns,” Associated Press, 2025 CET, 30
Jan 07 via Yahoo! News, and “The president to advocate for Tarasyuk in
court,” Ukrayinska Pravda, 11:11 CET, 30 Jan 07 via
(2) “Ukraine’s FM, interior minister sacked by parliament,” Xinhua General
News Service, 1400 CET, 1 Dec 06 and Ukrainian President’s Chief-of-Staff
Insists Foreign Minister Not Dismissed,” Interfax-Ukraine news agency, 1627
GMT. 26 Dec 06 via Lexis-Nexis.
(3) “Ukrainian Foreign Minister Blocked from Attending Cabinet Session
Again,” TV 5 Kanal, 0900 GMT, 20 Dec 06 via Lexis-Nexis.
(4) “Tymoshenko Contributes to Overriding the Veto on the Law On the
Cabinet,” Ukrayinska Pravda, 2257 CET, 12 Jan 07 via
(5) Ukrainian News Agency, Kyiv, Ukraine, 19 Jan 07.
(6) “Mr. Kril appealed to the court to stop tug-of-war,” Press Service of
the Our Ukraine Bloc, 1302 CET, 23 Jan 07 via
(7) ForUm, 11:50 CET, 30 Jan 07 via
(8) ForUm, 14:35 CET, 29 Jan 07 via
(9) “President wants compromise,” Press Office of Viktor Yushchenko, 14:47
CET, 29 Jan 07 via
(10) “Our Ukraine Walks Out of Parliament,” Ukrayinska Pravda, 2258 CET, 12
Jan 07 via
(11) “Liliya Hryhorovych: BYUT has betrayed democracy in Ukraine,” Press
Service of the Our Ukraine Bloc, 1000 CET, 18 Jan 07; “Anton Klimenko: BYUT
has helped the ‘anti-crisis’ coalition to usurp power,” Press Service of the
Our Ukraine Bloc, 1158 CET, 18 Jan 07 via
(12) Lynch, Tammy, “Orange Revolution: Round Two?,” Behind the Breaking
News, A briefing from the Institute for the Study of Conflict, Ideology and
Policy, 14 Sep 05 via
(13) “Yushchenko praises accord reached as triumph of democracy,”
ITAR-TASS, 22 Sep 05 via Lexis-Nexis.
(14) Committee of Voters’ of Ukraine, “Statement on the memorandum signed
by President Viktor Yushchenko and the Party of Regions,” 22 Sep 05.
(15) “Legal Chaos or Bardak in Ukraine,” Taras Kuzio Official Blog, 05:36 PM
EST, 18 Jan 07 via, originally published at
(16) BYUT Inform (a newsletter of the Yulia Tymoshenko Bloc), Issue 27, 24
Jan 07.
(17) Ibid.
(18) “Timoshenko to press for early parliamentary election in Ukraine,”
ITAR-TASS, 17:50 CET, 30 Jan 07 via
(19) BYUT Inform (a newsletter of the Yulia Tymoshenko Bloc), Issue
27, 24 Jan 07.
(20) ForUm, 18:03 CET, 25 Jan 07 via
(21) “Ukraine’s Prime Minister Touts Country’s Credentials – but Gets
Lukewarm Response,” Associated Press, 11:59 AM EST, 26 Jan 07.
LINK:; Tammy Lynch (
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Send in names and e-mail addresses for the AUR distribution list.
High court to rule on disputed Ukrainian cabinet law

Eurasia Daily Monitor, Volume 4, Issue 29
The Jamestown Foundation, Wash DC, Fri, Feb 9, 2007

Ukrainian President Viktor Yushchenko and the ruling coalition in Kyiv have
failed to find a compromise over the “Law on the Cabinet of Ministers.”

The law is meant to complement the constitution, more clearly defining the
remits of the president, the cabinet, and parliament; at the same time, it
cuts Yushchenko’s authority. Yushchenko has vetoed the law.

Prime Minister Viktor Yanukovych and the coalition argued that he had
violated the constitution by vetoing the same law twice. Yushchenko insisted
that he had acted within his rights.

The law came into effect despite Yushchenko’s protests, as it was published
in the official newspapers signed by parliamentary speaker Oleksandr Moroz,
an ally of Yanukovych. It is now up to the Constitutional Court to decide
who is wrong.

Yushchenko argued that the law, originally passed last December, was out

of tune with the constitution.

He particularly objected to provisions stating that:

[1] parliament appoints the prime minister and the ministers of foreign
affairs and interior if the president fails to do so in a timely
[2] the president has no power to veto the Cabinet’s action plans;
[3] deputy ministers are be appointed by the Cabinet;
[4] ministers may not appeal their dismissal in courts; and
[5] the Security and Defense Council may not influence the Cabinet’s
decisions (see EDM, January 17).

Yushchenko vetoed the law for the first time on January 11, but on January
12 parliament overrode the veto by more than 300 votes out of the 450-seat
chamber. Yushchenko promised that his legal advisors would find a way to
outplay parliament, and he kept his word.

On January 19, Yushchenko returned the law to parliament again. He said that
this was not a second veto, which would have been a violation of the
constitution, but a veto of a different law.

It turned out that the texts he vetoed on January 11 and 19 differed on one
point, where an original paragraph from the earlier version of the law was
incorporated into the text of the previous paragraph in the newer version.
This, according to Yushchenko, means that he vetoed a different law.

Moroz and Yanukovych flatly rejected Yushchenko’s argument, saying that the
difference was a mere printing error, and the law would come into force
without Yushchenko’s signature. Yanukovych, who is backed by the ruling
coalition in parliament, suggested that parliament should later amend the
law, taking account of some of Yushchenko’s objections.

Yushchenko rejected the offer and warned Yanukovych and Moroz against
publishing the law in the official press, which, according to the Ukrainian
constitution, would mean it is coming into force.

Yushchenko’s warning was ignored. The text of the law was published in the
newspaper of the cabinet, Uryadovy Kuryer, and of parliament, Holos Ukrainy,
on February 2. This was the first case in Ukrainian history when a law was
signed not by the president, but by Speaker Moroz.

The latter argued that he was legally authorized to do that, as Yushchenko
failed to sign the law within 10 days, as required by Ukrainian law.

Yushchenko’s Our Ukraine parliamentary caucus said that the publication of
the law meant “complete usurpation of power by the Yanukovych cabinet and
the ruling coalition.”

Yushchenko met Moroz and Yanukovych in his office on February 5,
probably in an effort to negotiate a way out of the situation. The talks
failed. The same evening, Yushchenko referred the law to the Constitutional C


“The Cabinet cannot work or live with a fake passport,” he said. “I am
absolutely confident that the constitution does not empower the Speaker to
sign laws returned by the president to parliament for revision.”

It is now up to the court to decide the fate of the law. It may take the
court several months to deliver a verdict, and it is hard to predict the
outcome. If Yushchenko takes the upper hand, and the law is returned to
parliament, his veto may not be overridden again, depending on Yulia
Tymoshenko’s position.

On January 12, parliament overrode Yushchenko’s veto thanks to the votes of
Tymoshenko’s faction. This was reportedly part of a deal between her and the
ruling coalition in exchange for the coalition’s support for the laws on the
opposition and on the binding mandate.

The law on the binding mandate, allowing Tymoshenko to secure her grip over
local councils, has since been passed, but the fate of the opposition law is
still not clear.

On February 5, Tymoshenko and the leader of the Our Ukraine faction in
parliament, Vyacheslav Kyrylenko, signed a statement proclaiming a unified
opposition. They declared that they aim to reverse constitutional reforms
that decreased the president’s powers in favor of the Cabinet and
parliament, and to hold an early parliamentary election to get rid of the
pro-Yanukovych majority in parliament.

If Tymoshenko is serious about a union with Yushchenko’s party, there is a
slim chance that the coalition will secure her support for the Cabinet law
for a second time. -30-

(UNIAN, January 19; Channel 5, January 24, 31, February 2, 5; 1+1 TV,
Kommersant Ukraina, February 5; Interfax-Ukraine, February

[return to index] [Action Ukraine Report (AUR) Monitoring Service]

INTERVIEW: With U.S. Ambassador William Taylor
By Mykola SIRUK, The Day Weekly Digest in English #5
Kyiv, Ukraine, Tuesday, February 13, 2007

The possible deployment of elements of an anti-ballistic missile defense
system on the territory of the Czech Republic and Poland is being widely
discussed in the political circles of Europe, Russia, and even Ukraine.

The US says that the deployment of anti-ballistic missile defense elements
in Europe by 2011 is aimed at protecting American and NATO installations
from enemy threats coming from the Middle East, not Russia.

This was announced on Jan. 29 by US Army Brigadier General Patrick J.
O’Reilly, Deputy Director of the Pentagon’s Missile Defense Agency.

The general also announced that the US is already negotiating with Russia
about American plans in the National Missile Defense (NMD) sphere and
inviting the Russians to take part in its implementation. He says that
Russian participation in this process will strengthen Russia’s defense

However, the Russian side views this as a threat. Russian President Vladimir
Putin called the statement by supporters of the deployment of an
anti-ballistic missile defense system in Eastern Europe to warn against
threats coming from Iran ungrounded and expressed confidence that Russia’s
reply will be asymmetrical and effective.

Some politicians in Ukraine also think that the deployment of anti-missile
defense systems in the Czech Republic and Poland will be a threat to Russia.

After his meeting with US Ambassador to Ukraine William Taylor, Ukraine’s
Minister of Defense Anatolii Hrytsenko expressed the opinion that the US has
lost the information campaign on the possible deployment of their NMD
elements on the territory of the Czech Republic and Poland. Hrytsenko said
that Europe’s reaction to the deployment will depend on the purpose of these

The Day asked Ambassador Taylor to explain the purpose of the US
deployment of NMD elements in Europe.

[The Day] From the reports in the mass media it looks as if nobody
understands why the US needs to deploy elements of the National Missile
Defense: a radar in Czech Republic and anti-ballistic missiles in Poland.
Can you explain to our readers what the purpose of this deployment is – to
defend what from whom?

[Amb. Taylor] I’m very glad to give you the best explanations I can. We
think there is a very clear answer to that question. We are interested in
talking to the Poles and the Czechs in order to improve the security of
Europe and the United States.

We think we improve the security of Europe and the United States by placing
these systems or at least negotiating to place these systems in Poland and
the Czech Republic to resist the emerging ballistic missile threats from the
Middle East.

These systems, if these countries agree, will not protect Europe or the
United States against missiles fired from Russia. The decision on where to
place the anti-ballistic missile systems is made on the basis of geography
and geometry. Experts and analysts in our Defense Department have spent a
lot of time doing that geometry.

And as an expert, you can probably understand better than I. But as I
understand it, that analysis shows that Poland and the Czech Republic are
newly optimal locations if we are defending against missiles coming out of
pariah- states in the Middle East.

[The Day] You mentioned Poland and the Czech Republic, but I have heard
there was an inquiry from two MPs, who are asking whether the US is also
talking to the European Union, because those two countries are members of
the EU.

[Amb. Taylor] We are certainly keeping our NATO allies informed. By the way,
we are trying to keep our Russian friends informed. I have had many
conversations with Ukrainian officials about this.

I have not heard of conversations with the European Union, primarily because
this is not within the competence of the European Union. This question is
clearly within the competence of individual member states.

[The Day] But NATO is one bloc, while the European security system is
another, and they do not always overlap. Is the US taking this fact taken
into account?

[Amb. Taylor ] In this sense you are right that NATO members are not exactly
the same as European Union members. Yes, EU members that are not members
of NATO, we don’t have the same level of military defense and n ational
security dialogue as we do with NATO allies.

[The Day] Is there consensus in NATO? Will NATO consensus be needed to
reach a final decision on this particular matter?

[Amb. Taylor] I don’t think so. This has not been a decision for NATO. It
does affect conversations on security issues with two NATO members. But it
does not require decisions by NATO as a whole.

[The Day] How would you explain the objections of Russia and even former
Ukrainian defense minister Kuzmuk, who says that this deployment, those
elements of missile defense, will be a threat to Russia?

[Amb. Taylor] Honestly, I don’t know. As I said in response to your first
question, these systems, if they eventually agree, will have no effect on
Russia. Indeed, they would provide some defense for Russia, which should be
concerned about missiles coming from Iran, as well as Europe and the United

During a recent press conference President Putin hastened to say that there
would be an adequate response from Russia to this threat connected with the
deployment of the US National Missile Defense in Europe.

Since there is no such a threat, I don’t know what an adequate response will
be. However, this statement may be true: if he speaks of an adequate
response to a threat, an adequate response to no threat is no response.

[The Day] You mentioned your discussions with Ukrainian officials about the
deployment of elements of the National Missile Defense in Europe. What was
their reaction? Were you able to convince them of the necessity of such a

[Amb. Taylor] I don’t know, you had better ask those Ukrainian officials if
they are convinced. However, I’ve been very pleased with the nature of the
discussions with Ukrainian officials. They recognize the geography and
geometry questions that you and I have spoken about.

[The Day] If the Czech and Polish governments approve the decision to deploy
elements of the NMD, is there a possibility of engaging Ukraine, possibly
together with Russia, to take part in the work to implement this project?

[Amb. Taylor] The answer is built into your question. Yes, this problem can
best be examined after the discussion with the Poles and Czechs. But during
those discussions we will keep our Russian friends and our Ukrainian
partners well-informed of the progress of these discussions.

[The Day] Why, in your opinion, have many high-ranking Russian military men
and defense experts from the very beginning rejected the possibility of
getting Russia on board regarding the deployment of anti-missile defense
elements in Europe?

[Amb. Taylor] I don’t know why the Russians take the actions they do. But in
any case, any participation in this anti- missile program would be purely
voluntary on the part of the Russians or Ukrainians, or the Czechs or Poles.

[The Day] There is some public concern, and even polls in Poland show, that
more than half the population is not in favor of such deployment, and there
are rising protests in the Czech Republic against the placing of the radar.
In light of this situation, will the United States insist on carrying out
this project?

]Amb. Taylor] No, we will not insist. This is a decision for the government
of Poland and the government of the Czech Republic. We are not insisting now
and will not insist in the future. This will be a decision for those two
governments. They are fully sovereign governments, they represent their
people, and we fully respect them.

[The Day] How would you explain the opinion voiced by some politicians
that the US has already lost the information part of this campaign?

[Amb. Taylor] The United States must do this – explain our rationale for
these discussions taking place concerning these deployments to the people
and reporters who have questions about this.

I think we have convincing arguments that these systems are directed at
missiles coming from the Middle East. If these systems are deployed, Europe,
including Ukraine, and the United States will be more secure. We need to be
clear about that calculation.

One thing that might help in this – we see on the map: this is the Persian
Gulf, this is Washington D.C. This is the shortest distance that a missile
will take. And this shows that the Czech Republic and Poland are right on
that trajectory. This is something you will not see when looking at a flat
map. The next question is explaining ourselves.

I think it is this kind of analysis and conclusion and the fact that the
weapon systems placed in these areas will defend the United States and
Europe. This is the most important argument.

[The Day] What is the deadline by which the Polish and Czech governments
should make their decision? Has one been established?

[Amb. Taylor] I don’t know about any deadline. The discussions, or serious
negotiations, will begin in a couple of months; they will only start in a
couple of months.

[The Day] Is this a good time for the initial disclosure of this
information, considering that the Russian elections are approaching?

[Amb. Taylor] The time to begin talking about this was not based on
political decisions like the Russian elections. The time was based on when
the discussions were necessary in order to keep the planning going of the
deployment of these systems.

President Bush released the National Policy of the Anti-Ballistic Missile
Defense in May 2003. In this policy it was explicit that this was to defend
the United States as well as their friends and allies. So, this has been the
US line for four years, since 2003.

[The Day] Do you believe that at some point in the future Russia and the US,
as countries with huge arsenals of ballistic missiles and ballistic missile
capabilities, will join forces to create a shield not just for part of the
world but the whole world?

[Amb. Taylor] This would be a very positive thing for the world’s security.
We all face the threats of nuclear ballistic weapons coming from Iran and
North Korea. Russia is threatened, Europe is threatened, and the US is
threatened. The world is threatened. We could come up with a defense against
those states, those irresponsible states, which would be for international

But not every country believes this, especially Russia, that the two
countries you mention are irresponsible. The Russians, I think, agree with
us that Iranian and North Korean nuclear weapons are a threat.

[The Day] Why is there no agreement or mutual understanding between the US
and Russia with regard to the deployment of the American NMD system in

[Amb. Taylor] I believe that the Russians, some Ukrainians, some Poles, some
Czechs, as they think this through and look at the analysis, in the end they
will agree that they will be better off if there are preventive measures
against these threats. -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Based on an article by Olaf Osica, Natolin European Centre analyst
Polish News Bulletin, Warsaw, Poland, Wed, Feb 07, 2007

This is a breakthrough in American approach to allies from out region. The
US government asked Poland and Czech Republic to join negotiations on the
matter of placing a part of the strategic antimissile defence programme on
their territories.

So far Washington’s tactic meant waiting until one of the Central European
allies offered its territory for base construction.

Knowing the region’s history, its politicians’ sensitiveness to national
security and the inclination to perceive the US as a warrant of stability in
Europe, American dissidents thought this approach may pay off.

In October 2006 during a seminar devoted to the antimissile shield,
organised by the International Relations Institute in Prague in cooperation
with the Czech Foreign Ministry and US Embassy, the State Department
representative made a speech, from which one may conclude that “a reward”
for making its territory available for constructing the base, is going to be
“an invitation” from the US government to? build it.

Adopting such logic, having nothing in common with the real situation,
clearly weakened Warsaw’s and Prague’s negotiating position. Especially that
both capitals were delicately, but clearly encouraged to allied rivalry.

Current situation opens before Poland a good staring position for talks.
However the opposite side has experience in such negotiations. Haste and
emotions can therefore quickly turn the tables. The mere fact of beginning
the negotiations will increase the pressure to push aside the disputed
matters and reach an understanding.

During the negotiations, Poles will have a national debate on the matter of
whether such cooperation with the US is reasonable. This will make winning
more difficult.

Before we start convincing ourselves, let’s give the US time to present its
arguments that the shield has something to do with our security. Arguments
about ruffian states and terrorism, although important, do not impress

So far prevailing during the discussion seems to be the view that Poland’s
share in the American antimissile defence project is a matter of choice, not

Meanwhile the shield exposes us to threats, from which we are not free (for
example Iranian attack). Therefore simply locating the shield in Poland does
not increase Polish security, or at best, is neutral. The base protects us
against threats, which it causes.

This is why Poland wants additional protection, for example in the form of
Patriot system missiles, in order to defend Polish territory against
short-range missile. Poland also wants to tighten intelligence cooperation
with the US. Such a broad scope of agreement would probably be acceptable
for majority of the political elite, because it compensates threats for

Having said that, there is still one serious problem. Evaluating the results
of locating the shied in Poland the risk is not only underestimating
potential threats, but also expecting that the shield can play an important
role in foreign policy.

Such hope comes from the assumption that every kind of closer cooperation
with the US translates into strengthening of Poland’s position on the
international arena. Looking at it from today’s perspective, it is difficult
to see such direct relation.

Poland’s problems associated with strengthening its position in
international policy and having influence on the feeling of security are
strictly political. On one hand they concern evolution in the role of Poland
in the EU.

On the other they concern the processes occurring beyond our eastern border.
In both cases, trying to force its line of thinking, Poland must rely on its
own ability to build political support.

US support for Polish postulates is beneficial. The problem is that this
support is nowhere to be seen, perhaps apart from numerous nice and
friendly declarations. The US is more interested in Asia.

Unlike the 1990’s, current realities of military security in Europe cannot
change political preferences of the main players.

Therefore we may have the shield and the Patriot system, and still live in
uncertainty associated with the direction the evolution in Russia will take,
its conflicts with Belarus or Ukraine, as well as struggle along to convince
EU partners to change their point of view towards the energy problem.

These matters require the kind of effort and political support, which is
different from the efforts aimed at getting compensation for making one’s
territory available for construction of a military base by a third state.

This is the core of the misunderstanding in the intentions of Polish and
American side. Poland’s hopes towards US go along with the US politicians’
conviction that the strategic defence project is not a matter associated
with increasing their engagement in Eastern Europe, but a “technical” backup
in its global strategy.

Thus the reluctance to meet Polish postulates concerning military
compensation. Realising them will give Russia a pretext to retaliate and at
the same time increase Polish pressure on Washington to actively join the
Polish-Russian conflict, and indirectly also some of the Polish-German
matters. There is nobody willing to do that in Washington.

Therefore in order to convince the American partner to pay greater attention
to our problems, we should seek other, more refined methods.

Building political ties with a military alliance based on common
infrastructure, not goals, in which both parties define their priorities
differently, does not look like success, but another disappointment.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
NOTE: Send in a letter-to-the-editor today. Let us hear from you.

UNIAN News, Kyiv, Ukraine, Monday, February 5, 2007

KYIV – A Senior Ukrainian official criticized U.S. plans to deploy its
missile defense system in Poland and the Czech Republic in comments
released Monday.

“First of all missiles deployed near our territory are objects for attack by
any sides. So it is a threat to involve Ukraine in a direct conflict,” First
Deputy Prime Minister Mykola Azarov said according to his office.

Washington announced last month that it wants to put a radar system in the
Czech Republic and a missile interceptor site in Poland.

Last week, a top U.S. general in charge of developing U.S. missile defenses
said that the United States was looking for ways to involve Ukraine in its
plans to develop such a system in Europe. But the Ukrainian government said
that it had no plans to deploy the U.S. missile defense system in its

Russia, meanwhile, has harshly criticized the U.S. plans to build missile
defense sites in Central Europe, shrugging off U.S. assurances that the
installations would be meant to deal with a potential threat from Iran and
calling them an effort to strengthen U.S. military might in the region.

Azarov said that the issue will not help supporters of NATO membership for
Ukraine to achieve their aim. Ukraine has been divided over the issue of
possible NATO membership, with Western-leaning President Viktor Yushchenko
backing the move and pro-Russian Prime Minister Viktor Yanukovych opposing

Most Ukrainians, particularly in the largely Russian-speaking east and
south, remain deeply skeptical of the alliance. -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
US general’s statement about Ukraine on missile defence questioned

ANALYSIS & COMMENTARY: By Vitaliy Portnykov
Glavred, Kiev, in Russian 0000 gmt 30 Jan 07
BBC Monitoring Service, United Kingdom, Jan 31, 2007

A Ukrainian newspaper has criticized a US statement on consultations with
Ukraine on cooperating to create a missile-defence shield. The author said
it is absolutely unrealistic that the Ukrainian parliament would ratify
anything to do with US missiles in Ukraine.

He said the only consequence of the US statement will be an increased rift
between pro-Western and pro-Russian elites in Ukraine, while Russian
propagandists will have a field day. The following is the text of the
article by Vitaliy Portnykov, entitled

“The Ukrainian element”, published on the Ukrainian web site on 30 January:

A statement by [deputy director of the Pentagon’s Missile Defence Agency,
US Brig Gen] Patrick O’Reilly on a readiness to cooperate with Ukraine in
setting up a missile defence shield has already become the main news on
Russian television. And that is only the beginning.

It appears that in Moscow, it’s not that they didn’t understand what sort of
propaganda effect could be made of this news, they simply haven’t yet
decided how to use this effect.

The readiness of the United States to place elements of a missile defence
shield in Poland and the Czech Republic has already provoked an irritated
reaction from Russia’s political leaders and allowed them to speak of steps
in response.

And that is while Washington continues to insist on the need to protect
Europe from missiles from such unpredictable countries as Iran and North
Korea, and not from Russia.

But the very idea of anti-missile systems appearing in Ukraine – now that
really is marvellous news for Russian propagandists. Even if no elements of
such a system appear in the neighbouring country.

Because it becomes increasingly clear that Russia is nearly encircled by a
ring of enemies, and that ring will be managed in Washington. And because
even before Ukraine joins NATO, the Americans are trying to use its
territory to deploy arms which could have a negative impact on Russia’s own
strategic security.

And because it is becoming clear that the goals of the overseas patrons of
the Orange Revolution are to deploy space weapons and instil a unipolar
world! Well, and so on and so forth, I don’t want to over-anticipate the
coming commentaries.

The Ukrainian leadership will also be caught in a tight spot. The
president – in order to remind the Americans of his pro-Western reputation –
will have to support the offer to deploy the anti-missile system, if such an
offer is really made.

The Minister of Defence will say that such a system carries no threat to
Russia and he will offer Moscow to join in the Ukrainian-American

Naturally, parliament will vote down any bill which could make a
Ukrainian-American agreement on the anti-missile system achievable.

The prime minister will speak of the importance of Ukrainian-American and
Ukrainian-Russian relations in the economic sphere and say that Ukraine
should not be hostage to the polemics of its strategic partners in military
matters. In short, there will be no anti-missile defences in Ukraine. But
the aftertaste will remain.

Now we need to answer one question: why in this case did the gentleman
from the agency make a statement doomed to failure?

But that is a question for American diplomacy altogether, the Americans
being perfectly sure that if a decision is made in Washington, no-one and
nothing can stop it. And it does not look like it is possible to try to
explain to a standard American bureaucrat that this is not so.

Even specialists in the post-Soviet landscape are incapable of assessing the
moods in the region or the essence of inter-elite contacts which nullify any
political slogan. And Mr O’Reilly is not a specialist in the post-Soviet
landscape. He is a specialist in anti-missile defences…[ellipsis as
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax Ukraine News, Kyiv, Ukraine, Thu, February 1, 2007

KYIV – Ukraine should not host elements of the U.S. National Missile Defense
(NMD) on its territory, former Ukrainian Defense Minister Oleksandr Kuzmuk

“I would not support the deployment of elements of the U.S. NMD on the
country’s territory. First of all, this would not be understood in the world
at large. Ukraine’s two early warning stations work in Russia today.

“Ukraine has a non-allied status. Ukraine is not a member of either NATO or
the EU. What reasons should this be done for? Against whom should we protect
ourselves with this anti-missile umbrella?” Kuzmuk said on Channel Five
television on Wednesday evening.

“The possible deployment of U.S. missile defense elements in the Czech
Republic and Poland would mean a new chapter of the arms race,” he said.

“The missile defense system in the world was set up after the U.S. and the
USSR signed a treaty. The U.S. withdrew from the ABM Treaty in 2002.

Russia in response deployed new systems, the well-known Topol-M, which
can overcome the U.S. missile defense. In my view, a response to this could
be a multi-echelon defense system with stations positioned in Europe,”
Kuzmuk said.

Ukraine’s attitude toward the deployment of U.S. missile defense elements
should be determined above all by Russia’s reaction, he said.

“I can understand Russia’s reaction. Russia sees a threat to itself.
Russia’s appropriate response will surely follow, because its European part
or even more of it will become virtually transparent to the U.S., and the
U.S. will fully control that territory of Russia [in the case of missile
defense elements being deployed in Poland and the Czech Republic],” he said.

Iran and North Korea “do not pose any threat, because those countries cannot
build intercontinental ballistic missiles against which missile defense
bases could be deployed in Europe,” Kuzmuk said.

“The deployment [of missile defense bases] in Poland and the Czech Republic
will not close the U.S. missile defense circle. Everything still lies ahead
of us,” Kuzmuk said. -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

REMARKS: Minister of Economy of Ukraine, Volodymyr Makukha
Ukraine Business Forum, Waldorf Astoria Hotel,
New York, New York, Wednesday, December 6, 2006

Dear Ladies and Gentlemen,

On behalf of the Government of Ukraine let me present my complements
to all of you and express my sincere gratitude to the organizers of this
Ukraine Business Forum.

The level of participation and the importance of issues scheduled for
discussion allow me to notice without exaggeration that this event could be
considered as an outstanding element of the US-Ukraine investment
cooperation, the positive dynamics of which we are contemplating these days.

The cooperation between Ukrainian and American financial and business
communities will promote strategic partnership between our countries,
further developing mutually beneficial investment cooperation both through
the wider presence of the US businesses on the Ukrainian market and the
Ukrainian businesses in the USA.

Positive trends in the development of the bilateral economic relations
between Ukraine and the USA will constitute the basis for fostering the
process of integration of Ukraine into the global economic system.

In my remarks I would like to outline the plans of the Government to
transform Ukraine into the country with a competitive economy and new
opportunities created for business activities and the attraction of
investments into its industries.
First of all let me outline the major macroeconomic indicators of Ukraine.

During the year of 2006 Ukrainian economy demonstrated positive
development dynamics, overcoming negative impacts of a significant rise
in prices for energy resources at the beginning of the year. We are
contemplating a certain adaptation of our industries to the new business

The results of the first 10 months of 2006 reflect the existence of real
positive trends in our economy. During January-October real growth of
GDP amounted to 6.5%; the industrial production increased by 5.3%.

Growth of the foreign investment for 9 months of 2006 constituted 3.3
billion dollars, which is 3.3 times higher then for the same period of the
previous year.

The overall amount of foreign direct investments today makes up a amount
equaling 19.9 billion US dollars, which is twice the amount for the same
date of the previous year.

At the same time, despite all positive trends that our economy has
demonstrated this year, the resources for extensive development have been

The industrial structure of the Ukrainian economy resembles that one of
developed countries in the fifties-sixties of the last century – with high
level of energy consumption and low added value, namely – metallurgy,
chemicals, energy production. Such a structure of our economy also has a
negative impact on the environmental situation in our country.

Hence, the Government of Ukraine is facing challenges both in conducting
already initiated economic reforms and development of the brand new ones.
The main objective of these reforms will be the facilitation of economic
development of Ukraine and wellbeing of its people.

I realize the importance of businesses having a real vision of the
Government’s intention in order to be able to plan their activities and do
not feel threats from the State

As all of you are aware, Prime-Minister of Ukraine Viktor Yanukovych is
considered to be a pragmatic person. In the same way, our economic policy
and the Action Program of the Cabinet of Ministers of Ukraine will be
pragmatic. The Government will become more predictable and transparent.

At this very moment, the Government is finalizing the development of a
strategic document entitled “Competitive Ukraine”.

The draft of this Program provides for two stages: the objective of the
first one – for up to 2008 – is to ensure sustainable economic growth, while
the second one – during 2008-2011 – would aim at creating the necessary
conditions for transformation of Ukraine into the postindustrial economy.

Now, what are the major steps to be taken by the Government of Ukraine in
order to transform Ukraine into an “investment attractive” country with a
competitive economy?

[1] FIRST – we are planning to go ahead with the reform of the Public
Administration system in order to stimulate other transformations, to make
public sector less inclined to corruption and bureaucracy, to improve the
image of our country.

As a result, Ukraine will be in a position to take the fast-track pace in
attracting the investments, facilitate the growth and development.

The State must stimulate economic development rather than create barriers
for other economic reforms. The role of the State is not to compete with
the private sector but assist it by creating the attractive environment for
business activities.

One of the major elements of this reform is going to be transformation of
the taxation system in order to reduce tax burden and simplify the
administering of taxes.

Bearing in mind the amendments to the Constitution of Ukraine that ensure
efficient cooperation between the Parliament and the Cabinet of Ministers
and in longer term allow for the Government to be in power on a firmer
basis, today we have a unique opportunity to successfully implement the
Public Administration Reform.

[2] SECOND – we are committed to ensure a predictable and stable legislative
process. Last year the investors have experienced the highly negative impact
of unpredictable legislation, when changes to the Law on the Budget resulted
in multiple amendments to many other laws and regulations—sometimes post

It is obvious that judicial system is a key element that ensures justice in
the State, including the protection of investors’ rights which are
guaranteed by a number of laws.

Despite the adoption of the Law on Judiciary System, this branch of power
remains weak and experiences lack of independence which constitutes the
major barrier for development of efficient legal environment.

The low level of law enforcement is another major problem.

It is worth mentioning that by the end of 2006 our Government is planning to
renew the activities of the Commission on Prejudicial Dispute Settlement
between the foreign investors and executive bodies.

[3] THIRD – the development of regulatory reform and liberalization of
business activities. Our Government is committed to further enhance the
successful transformation of the regulatory environment for business
activities achieved in 2005-2006.

On the other hand, we now are experiencing a low level of law enforcement
and reluctance of regional authorities to change the existing system of

That leads us to reconsidering the existing system of remuneration for the
civil servants, who at the moment are more inclined to preserve rather then
to reduce the requirements for obtaining numerous permits.

The Government of Ukraine will continue to take efforts aiming at further
liberalization of business activities through the regulatory reform.

We are confident that the improvement of procedures of organization and
voluntary dissolution of a business, reduction in a number of licenses and
permits, the establishment of a simple and a comprehensible system of
inspections are among the key conditions for the attraction of investors.

[4] FOURTH – improvement of corporate governance and protection of
shareholders rights. Direct and efficient solution of many problems
connected with corporate governance could be established by adoption
of the Law “On Corporations” that meets international standards.

This legislation, in particular, has

1) to make a clear distinction between public and joint-stock
2) to determine functions and authority of the board of the company;
3) to simplify dispute settlement procedures among shareholders;
4) to improve the protection of minority shareholders;
5) to set clear requirements concerning divulging of information. A
draft bill that contains considerable part of these principles was
approved by the Cabinet of Ministers of Ukraine in the end of 2005.

So, the important task of the new Parliament and the Government is to
expedite the adoption of the Law “On Corporations” in a wording that meets
international standards.

[5] FIFTH – continuation of liberalization of movement of goods and capitals
through the borders.

Comparatively low wages (in comparison with the EU standards) and highly
qualified labor force make Ukraine very attractive for businesses who look
for opportunities to effectively invest their funds and who are ready to
organize the facilities in Ukraine for manufacturing and exporting their
products all over the world.

But those investors are restrained by non-transparent custom procedures and
strict controls over capital movement that are often corruption-related and
seriously undermine all the attractiveness of the low primary cost.

The main direction in solving these problems is Ukraine’s accession to the
WTO (we are almost already there) and the creation of free trade zone with
the European Union.

The removal of trade restrictions with Ukraine’s largest trade partner will
promote the attraction of investors from European countries and expansion
of Ukrainian exports.

I would like to emphasize that Ukraine’s WTO accession will open new
prospects for creation of predictable and transparent environment for the
influx of foreign investments.

[6] SIXTH – strengthening of the financial sector. Easy access to credits is
one of the most important matters impacting the creation and development of
small and medium investors. Today the banking credit system is the most
common source of financing of the business activities in Ukraine.

However it cannot satisfy existing credit funds demand because of the high
level of interest rates and short terms of repayment.

Other alternatives of getting funds such as, for instance, emission of the
corporate bonds for public sale are used seldom due to the underdevelopment
of financial markets.

The main actions for the improvement of companies’ access to the financing
sources provide for:

1) the strengthening of the banking sector and
2) facilitation of the development of non-banking finance institutions.

Needless to say, there are representatives of Ukrainian businesses now
participating in our forum; they are exploring the possibilities of entering
the world capital market by taking an example from the best practices of
the American companies.
As for talking about the attraction of foreign investments into Ukraine’s
economy, I would like to indicate the following:

1) The legislation of Ukraine provides for concrete guarantees of
foreign investors’ rights protection.
2) Foreign investors enjoy treatment that provides them with equal
conditions of operation with domestic investors and prohibits the
nationalization of foreign investments. Besides,
3) Ukrainian Parliament has ratified the Washington Convention of
1965 on the Settlement of Investment Disputes between States and
Nationals of Other States.

Today the Government of Ukraine is working on the improvement of
enforcement of the Laws: “On Product Sharing Agreements”, “On
Concessions”, “On Concessions for the Construction and Operation of
Highways”, that will further facilitate the influx of investments into the
economy of Ukraine.

The opportunities of investment cooperation with international financial
institutions are most promising in the implementation of major
infrastructure projects –i.e.- construction and modernization of highways,
bridges and the airports, production, transportation and distribution of
energy as well as telecommunications projects.
The concept of “the establishment of the industrial parks in Ukraine” has
been developed. It provides for the mechanism and sequence of actions to
implement the government policy in creation and development of industrial
parks in order to facilitate the investment and innovation activities.

Today the regional authorities together with the potential investors are
already drafting first pilot projects.

In 2007, the Government of Ukraine anticipates that it will provide, on the
firm legal basis, a number of incentives for investors who will operate on
the special territories, in particular:

1) granting the investment tax credit for profit tax;
2) exemption from payment of import duties for equipment and
its parts that are imported within the framework of investment
3) providing the companies that implement investment processing
projects in free economic zones with the right to place the
promissory notes with the customs authorities for the amount of
import duties and VAT. This provision, however, would not
include importing of excisable goods:

In 2005, in order to create favorable conditions for foreign investors, the
Government of Ukraine has established the Ukrainian Center for Facilitation
of Foreign Investments and has approved its supervisory board.

The supervisory board includes the representatives of the Government,
international financial institutions and the business community.
In conclusion I would like to mention the following:

Ukraine is among the few countries of the world that possess space
technology, aircraft construction facilities, and scientific inventions in
such leading branches of the modern science like virology and

Such indicators as a high average level of education of the population of
Ukraine, availability of highly skilled experts and a powerful scientific
potential allow us to compete with the leading countries that ensure global

The favorable location of Ukraine on the borders of two integration zones
(the European and the Eurasian) will allow Ukraine to benefit from the
effects of interaction of large-scale and deep integration processes by
fostering cooperation in both directions.

The competitive advantages of the Ukrainian economy mentioned above
have been recognized by such transnational corporations as Microsoft,
Deutsche Telecom, Sony, Mittal Steel, Philip Morris, Lukoil, Coca-Cola
and others that are already in the field.

Dear Colleagues,

I want to assure you that Ukraine is and will remain a European country
with a predictable domestic and foreign policy.

The Ukrainian State will continue to protect the interests of private sector
which represents the foundation stone of the successful development of
the country and which will play the key role in all further development of
Ukrainian economy.

Now, I invite you, the representatives of Ukrainian businesses, to turn
and answer the questions that are of the interest for American side.

Thank you for your attention. -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
If you are receiving more than one copy of the AUR please contact us.
Incomes, house prices and freedom all on the rise

By Vitaliy Milentyev and Denys Volkov, The Winnipeg Free Press

Winnipeg, Manitoba, Canada, Thursday, February 15 2007

Just two years after the Orange Revolution and the triumph of democracy,
Ukrainians seem to have grown weary of the results. President Viktor
Yushchenko, once called the Messiah of Ukraine, is now popular with just 15
per cent of voters. Moreover, over 63 per cent say they are unhappy with the
democratic process.

Despite the unstable political environment, however, the economic indicators
look surprisingly strong. Ukraine’s economy has outperformed expectations
and last year’s numbers.

Though inflation in 2006 was 12.5 per cent, compared to 10.4 per cent in
2005, the real disposable income of households grew faster to 16.5 per cent.
Higher income has, in turn, fuelled higher household consumption.

Two years ago, thousands of Ukrainians stood united against widespread
election fraud. Then opposition leader Yushchenko, who almost died after
being poisoned during the election campaign, became the new president of

At that time, Yushchenko’s presidential challenger, Prime Minister Viktor
Yanukovich, was accused of manipulating the election results and was

forced to leave public office, but not for very long.

Two years later, Yushchenko and Yanukovich govern together, with one

Viktor as president and the other as prime minister. A constitutional power
struggle between the two men and Parliament began a year ago over a
power-sharing formula that gave more power to the prime minister and
Parliament. Yushchenko’s two predecessors had almost absolute power
over Parliament and the prime minister.

Despite such political instability, the GDP grew seven per cent in real
terms (after adjusting for inflation), compared to just 2.6 per cent a year

Food and drug industries, auto sales, tourism, retail and many other
industries are booming. The banking sector, insurance companies and other
financial services have also enjoyed a year of double-digit growth.

Last year, more foreign banks entered Ukraine than ever before, mostly
through the acquisition of Ukrainian banks. Foreign investors have been
lured by the positive outlook in the banking sector. Currently 28 banks in
Ukraine are wholly or partially foreign-owned.

Growth of the financial services sector has led to development of consumer
financing from mortgages to credit cards and personal loans.

This inevitably translated to even higher demand for big-ticket items. The
lines in the stores for bread and other staples in mid-90s have moved to car
dealerships for some of the more popular brands, such as Honda, Mazda,
Hyundai and others. In some cases, consumers have to wait as long as three
to six months to buy a brand new vehicle.

That is not to say that last year was all about positive change in the
economy. Real estate prices reached record highs. Prices for residential
property in Kiev have surpassed those of other Eastern European capitals and
are now comparable to prices in some West European and North American

If you want to buy a two-bedroom apartment in the Ukrainian capital, be
prepared to lay out at least $150,000 US. Unfortunately, no one knows for
certain whether such growth was driven by actual demand or tacit collusion
among real estate market operators deliberately holding off the supply to
harvest bigger profits.

According to the latest rating by the U.S.-based think tank Heritage
Foundation and The Wall Street Journal, Ukraine scored 53.3 on a 100-point
scale on the Index of Economic Freedom, ranking 125th out of 157 countries

This puts Ukraine into the “mostly-unfree” category. Ukraine scored high on
fiscal freedom with a relatively low personal income tax of 15 per cent, a
maximum corporate tax of 25 per cent on profits.

However, Ukraine was considered weaker in freedom from government, monetary
freedom, investment freedom, property rights, and freedom from corruption.

The Orange Revolution which polarized the nation two years ago is still full
of surprises. Revolutions can change regimes, but they cannot bring
stability. If Ukrainian politicians cannot bring political stability, they
should, at the very least, encourage investments and economic growth.

As the last Soviet leader, Mikhail Gorbachev once said: “The market is not
an invention of capitalism. It has existed for centuries. It is an invention
of civilization.” -30-
NOTE: Vitaliy Milentyev is the vice-president of the ING Bank (Ukraine).
Denys Volkov has a Masters degree in Public Administration from the
University of Manitoba (
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Send in a letter-to-the-editor today. Let us hear from you.

INFORM Newsletter, Issue 30, Yulia Tymoshenko Bloc (BYuT
Kyiv, Ukraine, Monday, 12 February, 2007

On 5 February, the pro-presidential Our Ukraine bloc signed a cooperative
framework agreement with the bloc of Yulia Tymoshenko (BYuT) to

strengthen the multi-factional Orange opposition force in Ukraine’s
Verkhovna Rada (parliament).

The new agreement will enable the opposition forces to provide a more
effective counterweight to the government led by the Anti-crisis Coalition,
comprising the pro-Russian Party of Regions, the Socialist Party and
Communist Party.

The pact, which was signed by Our Ukraine’s new leader Vyacheslav
Kyrylenko and leader of the opposition and her eponymous bloc, Yulia
Tymoshenko, is designed to tie the two blocs closer together on key
principles of domestic and foreign policy, and on constitutional and
security issues.

Significantly, the agreement states, “Our cooperative oppositional activity
will wipe out corruption as soon as possible as well as revive European
democratic development in Ukraine by calling early parliamentary elections.”

In return for voting together on key policies, BYuT undertook not to vote
for presidential overrides. On 12 January BYuT sent a powerful message to
President Viktor Yushchenko by voting with the Yanukovych-government to
override the president’s veto on the Law of the Cabinet of Ministers –
legislation which shifts certain presidential powers to parliament and
curtails the president’s authority to rule by decree.

Specifically, BYuT agreed not to vote for and override presidential vetoes
on laws defining major home and foreign policy, National Security and
Defence Council, and the Constitutional Court – these being the main
sources of presidential power in the country.

One political analyst told Inform, “Tymoshenko has shown herself to be a
canny operator. By voting against the presidential veto she set alarm bells
ringing at Our Ukraine. The fear of being marginalised propelled them to the
negotiating table.

“Tymoshenko got what she wanted by the president signing the Imperative
Mandate. Her willingness to agree to clauses in the new agreement not to
vote against the president confirms that the 12 January vote was merely a
tactical ruse. It’s beyond reproach that she would collaborate with the
Party of Regions; she’s the one political leader in Ukraine who has refused
to be blown off course and must be given credit for this.”

The Ukrainian political analyst Kost Bondarenko, speaking to Regnum, said,
“For Yulia Tymoshenko it is, undoubtedly, an achievement. She showed that
she can unite. It is a signal for the electorate that there is plenty of
life left in her and her bloc can not only generate slogans, but work

The Our Ukraine bloc is a broad church and, not surprisingly, not everyone
was pleased with the new found unity. However, the Head of the Secretariat
of the President, Viktor Baloha, told journalists, “Our Ukraine and BYuT
should be together.” Then addressing the issue of dissenters in Our
Ukraine’s ranks, he expressed, “We do not have any disagreements. After all,
everyone in Our Ukraine can express his position and opinion.”

Yulia Tymoshenko was pleased with the agreement. She said, “It paves the

way for a strong and united opposition that will fight for liberal economic
reforms, social justice and pro-European foreign policy. It is high time we
restore faith in our parliamentary system, which most people see as
nothing more than an exclusive business club. We will reject amendments to
the Constitution and will push for early parliamentary elections.”

Lilia Hryhorovych, an Our Ukraine deputy, said she shared BYuT’s opinion
that four years is too long a time for Viktor Yanukovych to govern the
[1] Cooperatively work out amendments to the Constitution of Ukraine

and initiate cancellation of ungrounded and unreasonable amendments
to the Fundamental Law.
[2] Introduce the Imperative Mandate for local MPs and form a democratic
political system, establish civilised political traditions and fight
corruption on a local level.
[3] Aim for early parliamentary elections and elections to local
[4] Cooperatively work out and legitimise the status of local
governments according to European norms by enlarging powers
of local authorities. This provision should be included to the
amended Constitution of Ukraine. In this connection, the blocs refuse
to back Bill 3207-1 in its current wording.
[5] Back the Law on the Parliamentary Opposition which was previously
[6] Cooperatively work out a series of bills to improve living
standards, advance minimal wages and pensions, improve health services
and other social guarantees.
[7] Ensure cooperation between BYuT and Our Ukraine at the local level.
Present a consolidated position to the public worldwide.
[8] Cooperatively agree and approve appointments considered by the
Verkhovna Rada.
[9] Not to support amendments to the Constitution of Ukraine that ruin
the government system,jeopardise territorial integrity, distort the system
of executive power or limit the president’s authority provided by the
[1] Laws defining main courses of home and foreign policy, the
president, National Security and Defence Council, the Constitutional Court,
bills on local governments if the abovementioned bills are proposed by the
Anti-crisis Coalition.
[2] Any other bills limiting rights and freedoms of the citizens,
independence of Ukraine, powers of the Constitutional Court, local
[3] Any amendments to the state budget that cut social and humanity
programs, military projects and financing of local authorities. -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
One of the best Ukrainian documentary films hitting the screens soon
By Dmytro Desiateryk, The Day Weekly Digest #5
Kyiv, Ukraine, Tuesday, February 13, 2007

Serhii Bukovsky’s film Say Your Name, whose premiere in October 2006

was one of the most important cinema events of the season, will now be
seen by the public at large.

The film will be screened at Kyiv’s Butterfly-Ultramaryn and Zhovten cinemas
starting from Feb. 15. Afterwards it will be shown in Dnipropetrovsk,
Zaporizhia, Odesa, Chernivtsi, and Kolomyia.

This was announced at a press conference, where journalists’ questions were
answered by the film’s producers and director, representatives of the Shoah
Foundation founded by Steven Spielberg, the foundation headed by Viktor
Pinchuk, who was the co-producer of the project, and historians.

Say Your Name is a rare case when a work of art elicits both an artistic and
social response. This is the first Ukrainian full-length documentary film
made in the last year.

Spielberg, who is the film’s nominal producer, plays the role of an
archivist. The film is based on interviews of eyewitnesses to the Holocaust
in Ukraine.

Their testimonies were recorded in 1994-98 by associates of the Institute of
Video History and Education of the Shoah Foundation (University of Southern

The topic of the Holocaust in Ukraine is practically synonymous with Babyn
Yar. However, the director succeeded in going beyond this pre-determined
topic to create an impressive artistic and philosophical canvas about man in
the large and not always merciful panorama of history, and about the value
of each history in particular.

The main thrust of the film is about the space that could be common to all
of us because part of it is Babyn Yar. This is the way mankind survives its
biggest catastrophes by marking them on the large map of common memory.

The Shoah Foundation collects video testimonies about the Holocaust all over
the world and organizes programs on tolerance. This year in Ukraine, besides
the film screening, a special reference work will be published in September,
and seminars will be conducted for teachers 25 in each oblast.

According to Oleksandr Voitenko, the head of Nova doba, the history teachers
association, a request to officials to help introduce this book into the
school curriculum has already been drawn up.

The book is structured in the form of modules that can be used as part of
regular class work or as separate lessons. In any case, this goes far beyond
the coercive-barrack system of education that is traditional in our country.
The film and the testimonies, which are not included in the book, may be
used as illustrations to these lessons.

According to a representative of the American side, Say Your Name was
screened on Feb. 1 for United Nations employees in New York City.

Negotiations are now underway with the organizers of the film festival in
the Swiss city of Nyon, which is considered the most important gathering of
documentary filmmakers, and with the Cannes Film Festival about including
the film in the most prestigious program, Critic’s Week.

Bukovsky announced that he is working on a two-part feature film for
television, which the director admits is a relief after working with such
difficult material. He has invited the well- known Ukrainian actor Serhii
Romaniuk, who Bukovsky thinks is underestimated by Ukrainian
cinematographers, to play the lead role.

During the October premiere of Say Your Name Viktor Pinchuk said that it

is necessary to create such films about another great catastrophe in Ukraine,
the Holodomor, and unexpectedly this idea is being developed.

According to Pinchuk’s spokesman, the process of collecting video
testimonies of people who lived through the famine of the 1930s is nearing
completion. -30-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]

By Fedir Moroziuk, Member, Ukrainian Association of
Holodomor Researchers, Kherson Oblast (Written in 1997)
Posted on website, Kyiv, Ukraine
A Program of the Ukraine 3000 International Fund
Action Ukraine Report (AUR) #817, Article 15 (in English)
Kyiv, Ukraine, Friday, February 16, 2007

It is over half the century, to be exact 65 years, since the famine-genocide
in 1932-1933 in Ukraine. Although all progressive mankind have recognized it
as a reality, only P. Symonenko, leader of Ukrainian Communists, speaking on
television on Nov. 7 declared with irony, that the holodomor death toll
calculated by self-proclaimed researchers exceeds the Ukrainian population
of the country.

I will not speak for all Ukraine, but there are no Ukrainians left in the
Kherson oblast, let alone people speaking Ukrainian. We communicate in
surzhyk, a weird mixture of Russian and Ukrainian, while local leaders
communicate only in Russian.

Small wonder, as according to survivors from those times and archive
materials, the place of those who died from starvation was taken by settlers
from Russia’s oblasts Gorky, Ivanovo, other central oblasts as well as from
Belarus and other Soviet republics.

The numbers of settlers can be seen from the secret report by the All-Union
Committee for Resettlement under the Council of People’s Commissars of the
USSR of Dec. 29, 1933 and addressed to the head of GULAG Berman: “The
committee is sending you the report #38 on the resettlement to Ukraine as of
Dec. 28, 1933.

Simultaneously, we inform you that the plan for the number of resettled
persons has been fulfilled by 104.76 percent. In total, 21,856 peasant
households have been resettled, including 117,149 persons, 14,879 horses,
21,898 cows and 38,705 pigs and sheep.”

In 1932-1933, what is now the Kherson oblast was part of the Odesa oblast.
In accordance with the document, 2,120 households from Russia’s Gorky oblast
and 4,630 from Belarus had been resettled to the Odesa oblast [1]. These are
the figures for 1933 alone, while the resettlement to the south of Ukraine
lasted till the last days of the Soviet Union [1991].

Along with voluntary resettlement, there was a forced resettlement of
residents of Western Ukrainian oblasts after WWII. Here is an account of
that event given by Maria Stefanyshyn: “

It was exactly on Peter’s day [July 12 – AUR], soldiers surrounded our
village, drove all of us out of our homes and set fire to them. We were
taken under escort to Rozhnyativ, a rayon town in the Stanislav area, shoved
into cargo rail cars and taken to an unknown destination.

After 2 days they released us in Kherson. From there, we went on foot to the
village of Mala Lepetykha. We found ourselves amid boundless steppe, with
scorching sun and no water around.

Could we, the natives of the free Carpathian region, feel comfortable in
this hell? Of course, not. Hence, four attempts to flee back home. We were
caught at home and dispatched again to Kherson – until we found a decent
area to live – the village of Hladkivka, Hola Prystan rayon. It all
happened in 1950 through 1954.”

You may counter that the story has nothing to do with the 1932-1933
famine-genocide. Yes, it has. Back in 1932-1933, they used famine to
devastate Eastern Ukraine, later they used brutal force to destroy Western

In 1944, Beria [head of Stalin’s secret police – AUR] and Zhukov [general in
charge of Soviet army troops in the area – AUR] signed a special order,
under which all Ukrainians residing in the areas under German occupation had
to be resettled.

When I published this order in The Holoprystansky Herald, a rayon newspaper,
in September of 1997 alongside with my comments, it caused a turmoil, the
newspaper reported.

Veteran Communists dubbed the order a Goebbels-type fraud and me as a
historian who spits on his country’s history, past and achievements.

The newspaper’s editor was summoned for questioning by members of a
rayon council, I was threatened with a law-suit and punishment, while the
editorial board had to admit that the document was not an authentic
document but a fake.

However, according to Khrushchov’s revelations [in 1956 – AUR], Stalin
opted for large-scale resettlement to Ukraine.

Here is an excerpt from The Komsomolska Pravda: ” Much to Stalin’s
chagrin, he could not resettle all Ukrainians as the areas for resettlement
were scarce and there was the lack of transportation means.” [3].

The famine-genocide of 1932-1933 has led not only to physical
extermination of Ukrainians, it eroded their spiritual base, the national
idea and national awareness of the people.

We can see the consequences of the genocide today when small but
nationalistically aware Estonia, and not only Estonia, sides with the
countries of the West – while a 50-million Ukraine is wavering whether to
break away with its Communist past.

There was a multitude of appeals from the people to Verkhovna Rada,
president and government protesting the stupidity of marking the
anniversaries of the Bolshevik uprising in Petersburg, incidentally, called
by Ulyanov (Lenin) a coup.

The Russians have long stopped to mark it, but in Ukraine it is still a
state holiday. Take, for instance, our submissiveness, apathy, and neglect
of our own traditions. Aren’t they the consequences of the genocide? We have
learned to use Russian four-letter words in our speech, an unheard-of thing
in the past for a Ukrainian.

The Communist morals are convincingly demonstrated to us by our deputies
who prefer to resolve their problems in fist-fights in Verkhovna Rada, like it
happened on Apr. 16, 1997 when lawmakers Volodymyr Marchenko and
Natalia Vitrenko in a professionally thuggish way beat up their colleague Pavlo
Movchan. “I don’t have any scruples,” Marchenko said after the incident [4].
No wonder.

Instead of crosses we now put guns, tanks, monuments of soldiers with guns
over tombs. The road to the Taras Shevchenko monument in Kharkiv is lined
with stone soldiers grabbing to their rifles. What for? So that the great
Ukrainian feels the Russian spirit? The same assertiveness had been
confirmed by Russia President Borys Yeltsyn who said: “We must do away
with Chechen bandits in Russia”[5].

Such assertive statements have already been directed at Ukrainians,
especially after Moscow Mayor Luzhkov’s speech in Sevastopol: “Ukraine has
no claim to Sevastopol. So far, we are speaking only about Sevastopol”[6].
What will Russia claim tomorrow? The south of Ukraine?

Another turncoat and reportedly a descendant of Ukrainian Cossack Lebid, now
Governor of Siberia Gen. Lebid wants to take Ukraine to international court
to cede its territory to Russia, saying that in any way Sevastopol has
always been and will be Russia’s territory.

Army generals have been echoed by church generals: “The purpose of the
conference is to restore our Motherland,” Archbishop of Zaporizhia and
Melitopol Vasylij [Moscow-run Orthodox church in Ukraine – AUR] declared
on Dec. 24, 1996, speaking on the Channel 2 of Ukrainian television.

Most probably as a snub, the conference in question was held on Jan. 9-12,
1997 by Moscow-affiliated clergy in Zaporizhia, [the area with a glorious
Cossack past, the seat of the Cossack state, Sich – Translator].

Joining Levko Lukyanenko [a prominent Ukrainian nationalist and dissident –
AUR], I would like to ask indignantly, “How such abominable cruelty could
be done in independent Ukraine?” I refer to the events on July 18, 1995 on
Sofiyivsky square in Kyiv when police using gas and batons broke up the
burial procession of the Holy Patriarch of Kyiv and all Ukraine Volodymyr.

“They are ignorant of the national shrines and national symbols. On July 18
they demonstrated their closeness with the imperial forces by protecting the
Russia-affiliated church,” Levko Lukyanenko added.

Isn’t all this lack of spiritual beliefs and national awareness the result
of the genocide? How much longer must we suffer to unite and feel a
full-fledged nation, to feel that we are UKRAINIANS?

Such kind of ideological duality is present everywhere, especially in the
south of Ukraine. My native village, Hladkivka, is no exception. When on
November 7 the local Communist leaders and their cronies were marking the
day of the Bolshevik coup, across the street there was a commemorative
church service for the innocent victims of the famine in Ukraine. From of
old, November 7, or the Dmytrij day, has been the day of remembrance in

Therefore, the meeting of the Hladkivka branch of the Association of
holodomor-genocide researchers has appealed to the association council in
Kyiv to file a law suit with the international court on the grounds of the
crimes committed by Moscow in 1921-1923, 1932-1933, 1946-1947, with
appropriate compensations to be paid (excerpt from the meeting minutes of
Jan. 3, 1997).

We suggest that the council of the association should initiate a proposal
in Verkhovna Rada making November 7 the day of the holodomor-famine
remembrance. -30-
1. Collectivization and famine in Ukraine in 1929-1933. A collection of
documents and materials. Kyiv, 19992, P. 642.
2. Khrushchev N.S. On the cult of personality and its consequences.
Report to the 20th congress of the Communist party of USSR.
Feb. 25, 1956. Izvestia of the Central Committee, 1989, #3. – P. 152.
3. The Komsomolskaya Pravda, Feb. 3, 1990.
4. TSN TV program, Apr. 16, 1997.
5. Novosti TV program, Jan. 19, 1996.
6. Russia’s Vremya TV program , Dec. 26, 1996. -30-
NOTE: Translation of the article into English for the AUR was by
Volodymyr Hrytsutenko, Lviv, Ukraine. Translated article can be
used but only with permission from the AUR.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

SaveDarfur Full-Page Advertisement
Washington Post, Washington, D.C. Wed, February 14, 2006


After four years, 400,000 deaths, never-ending denials and countless
false promises, President al-Bashir continues to pursue his genocide
in Darfur.

In the face of looming humanitarian collapse, Congress, international
relief organizations and even many in the President’s own
Administration agree: the time for talk has ended. Plan A has failed.

It’s time for President Bush and other world leaders [including
Ukrainian President Viktor Yushchenko (AUR)] to move to Plan B by:

[1] Enforcing a full range of targeted sanctions, including
banning from our ports ships that have carried Sudan’s oil
[2] Preparing and overseeing the deployment of international
peacekeeping forces [including Ukraine]
[3] Implementing a no-fly zone
[4] Funding fully the U.S.’s share of peacekeeping and
humanitarian aid
[5] Producing a military contingency plan for a potential
collapse of security and humanitarian aid networks.


To Learn More And Send A Message to President Bush.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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