AUR#869 Sep 20 Painful Export Restrictions; Bread & Bolshevism; Commerzbank; Ferexpo; Holtec Contract; Ballot Woes; USUF; Bandurist Chorus

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By John Marone, Kyiv Post Staff Writer
Kyiv Post, Kyiv, Ukraine, Thursday, September 20, 2007

Interfax Ukraine Economic, Kyiv, Ukraine, August 6, 2007


Ukrainian News Agency, Kyiv, Ukraine, August 2, 2007


Interfax Ukraine Agro, Kyiv, Ukraine, June 24, 2007

Kyiv Post Senior Journalist, based in Ukraine.
Eurasian Home, Moscow, Russia, Monday, June 25, 2007


Interfax, Vinnytsia, Ukraine, Tuesday, Sep 18, 2007
Interfax-Ukraine news agency, Kiev, in Russian, 19 Sep 07
BBC Monitoring Service, United Kingdom, Wed, Sep 19, 2007

Luke Harding, The Guardian – United Kingdom
London, United Kingdom, Tuesday, Sep 18, 2007

By Roman Olearchyk in Kiev, Financial Times

London, UK, Tuesday, September 18, 2007

Lionel Laurent,, NY, NY, Wednesday, September 19, 2007

By Brett Foley and Mark Herlihy, Bloomberg, London, UK, Wed Sep 19

By Rebecca Bream, Utilities Correspondent, Financial Times
London, United Kingdom, Thursday, September 20 2007


Holtec International, Marlton, New Jersey, Tuesday, September 18, 2007

Caroline Binham,  The Lawyer, London, UK, Monday, 17-Sep-2007


Ukrainian News, Kyiv, Ukraine, Sunday, September 9, 2007

By Stephen Bandera, Kyiv Post Editor
Kyiv Post, Kyiv, Ukraine, Thursday, Sep 20, 2007


Black Sea TV, Simferopol, in Russian 1600 gmt 17 Sep 07
BBC Monitoring Service, United Kingdom, Wed, Sep 19, 2007

Kyiv Post, Kyiv, Ukraine, Thursday, September 20, 2003

Yushchenko said liberals who swept him to power would win 
REUTERS, Ukraine, Wednesday, September 19, 2007

EDITORIAL: Kyiv Post, Kyiv, Ukraine, Sep 19 2007

Mitch Potter, Europe Bureau, Toronto Star
Toronto, Ontario, Canada, Sunday, Sep 16, 20007

REUTERS, Kaniv, Ukraine, Wed, September 19, 2007
Friends of the U.S.-Ukraine Foundation (USUF)
Washington, D.C. Thursday, September 20, 2007
Anatoli Murha, Ukrainian Bandurist Chorus (UBC)
Detroit, Michigan, Thursday, September 20, 2007
PinchukArtCentre, Kyiv, Ukraine, Thursday, September 20, 2007
By Lubomyr Luciuk, The Glove and Mail,
Toronto, Ontario, Canada, September 15, 2007
Victoria Ruan, Dow Jones Newswires, Beijing, China, Sep 19, 2007
Rebecca Bream, Financial Times, London, UK, Sat, Sep 15 2007

Ukrainian News Agency, Kyiv, Ukraine, Wednesday, September 19, 2007

By John Marone, Kyiv Post Staff Writer
Kyiv Post, Kyiv, Ukraine, Thursday, September 20, 2007

It was only a few months ago that critics of the government’s grain export
quotas were gnashing their teeth at the announcement of a virtual ban on
grain exports.

President Viktor Yushchenko’s Secretariat said the stiffening of the export
quotas on this year’s harvest would hurt Ukraine’s bid to join the World
Trade Organization.

Farmers and traders recalled hundreds of millions of dollars in losses from
last year’s quotas, which the government had imposed without warning. The
country’s future as an international breadbasket was under threat,
agricultural organizations warned.

But, now, as the country reaps another low harvest, agro-industry players
are silently acknowledging the rectitude of the Cabinet’s June decision to
all but halt foreign grain sales this year.

And although grain traders aren’t expecting much of a relaxation of the
quotas from an upcoming government review, that hasn’t dampened hopes
of future profits, as global demand for grain looks to keep climbing
sharply, and Ukraine’s rich soil continues to promise double the size of

recent harvests.

Some international grain companies are not just waiting for better times,
but advancing and expanding into Ukraine in anticipation of larger harvests.

France’s largest grain trader, Soufflet, recently announced it was setting
up a 50-50 joint venture with Australia’s top barley exporter, ABB, to
extend its operations in Ukraine.

“Our decision was taken with a vision of the middle and long-term basis, as
we both believe Ukraine will be an important exporter in coming years,”
General Director of Soufflet Ukraine Ltd. Jean-Marc Philouze told the Post.

Ukraine ranked as the world’s sixth largest grain exporter in 2005, when it
harvested a bumper crop of 38 million metric tons. But last year, this
figure dropped to 34 million metric tons. This year, it should be around 29

But experts say the country has the potential to produce almost twice as
much grain. The Ukrainian Grain Association has floated potential harvest
figures for Ukraine as high as 58 million tons, citing similar numbers from
Soviet-era harvests.

Such possibilities are attractive for companies like Soufflet, which
operates malting operations in Ukraine but is not currently one of the top
grain players operating in the country. For ABB, the joint venture means a
foothold on the market.

Together, the two companies can split the risk,” said Philouze. “Soufflet
group doesn’t intend to develop international trading operations alone but,
through this deal, wants to reach a significant size on the Ukrainian
market.and limit climate-related and political risks in the country,” reads
a statement released by the French company.

This year’s bad harvest is due to a climate-related drought that Ukraine
experienced in May. However, the grain export quotas introduced and raised
by the government in the last year are the result of lower-than-expected
harvests as well as soaring world grain prices, which threatened to raise
the cost of bread at home.

After a decent harvest, Ukraine exports on average around 10 million tons of
grain. Last fall, the government introduced export caps of around one
million tons, citing the need to guarantee the country’s food security.

Grain traders, who had already stored their grain in port for shipment,
cried foul. The Ukrainian media ran reports of grain being dumped into the
sea to avoid crippling storage costs.

The ambassadors of the US, Germany and the Netherlands, where top Ukrainian
grain traders are headquartered, harshly criticized the Ukrainian government
in public statements. Ukrainian farmers were hit the worst, with farmers
associations reporting losses as high as $200 million.

Both traders and farmers said the unexpected introduction of the quotas was
worse than the quotas themselves. By June of this year, with an even lower
harvest being predicted, the government introduced tighter quota limits of
only 3,000 tons for each type of grain.

Traders, diplomats and farmers questioned the move but the response was much
less vociferous than last fall. Unlike last year, the government gave
traders advance notice.

As for farmers, the government approved a modest compensation of Hr 95
million (around $24 million) in drought relief.

Moreover, according to industry insiders, although farmers could have made
more money on their grain without the quotas, they still reported record
earnings from sales on the domestic market this year.

Nevertheless, critics at home and abroad warned that the new quotas would
hurt Ukraine’s reputation as a reliable supplier and lead farmers to plant
non-food crops.

President Yushchenko’s Secretariat, a fierce political opponent of Prime
Minister Viktor Yanukovych, said the government restrictions might hurt the
country’s chances of being accepted into the WTO.

Now, only three months later, traders and analysts are more optimistic about
Ukraine’s future grain trade.

Soufflet’s Philouze said his company hopes to be exporting as much as two
times more than last year’s entire market quota within three years. “Our
target is to achieve between 1 and 2 millions [metric tons] of grain per
year within 3 years,” he said.

However, despite a government review of the quotas expected before the end
of this month, Philouze doesn’t foresee any changes in Ukraine’s export
policy until the political situation settles down. “Unfortunately, we do not
expect anything before 1 or 2 months after the elections,” said Philouze.

Other grain traders interviewed by the Post said they expect the government
to free up no more than 1.2 million tons of grain by December 31.

In anticipation of an impending government decision, the market has already
reported a rise of around a three percent rise in the price of grain.

Citing the danger of a sharp price rise, Deputy Prime Minister Viktor Slauta
has spoken out against any changes in the government’s quotas before the end
of the year. “I am inclined to maintain the quotas and licensing until
January 1, 2008,” he said on Sep 18.

However, market watchers like Radion Rybchinsky, chief analyst at
Dnipropetrovsk-based APK Inform, don’t see the government’s restrictions
as a permanent obstacle to the country’s grain trade. “Sooner or later these
quotas will be lifted – it’s just a matter of when,” he said.

With the use of agricultural land for bio-fuel and growing populations in
India and China, the demand is not going to decrease, and Ukraine has the
potential to meet this demand, he added.

Ukraine’s Ministry of Agricultural Policy has put the country’s domestic
grain needs at 27 million tons, which means anything harvested above this
figure can go towards export.

Yushchenko has already signed a decree ordering the government to secure
the country’s position on the grain market between by 2015. The decree set
Ukraine’s export goal at 50 million tons of grain.

In the mean time, companies like Soufflet and ABB will continue to try and
expand their operations in Ukraine in anticipation of greater export

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

Interfax Ukraine Economic, Kyiv, Ukraine, August 6, 2007

KYIV – The International Monetary Fund [IMF] does not advise Ukraine’s
government to use administrative control over the prices.

In particular, we consider restoring quotas for grain export and
interventions into price formation process to be very dangerous, MF Senior
Resident Representative in Ukraine Jeffrey Franks said in an interview with
the Dzerkalo Tyzhnia newspaper, published last week.

We know that Ukraine has a lot of prices, which are regulated by
administrative methods, he said. This allows to keep inflation on a low
level for certain period of time, for example by fixing the natural gas
price for households on a low level, he said.

According to Franks, this is only the delay, since the price pressure does
not disappear, and the problem is not solved. And the longer this
disproportion lasts, the harder will be the process of balancing.

The IMF suggests to substitute administrative methods by market mechanisms.
If there is a threat of bread deficit, the government should take measures
to expand the supply, he said, adding that is a short-term prospect this can
be done via interventions of the State Reserve Fund.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Ukrainian News Agency, Kyiv, Ukraine, August 2, 2007

KYIV – The European Commission considers that Ukraine’s grain export

quotas are too strict. Head of the trade department of European Commission
delegation in Ukraine Luis Manuel Portero Sanchez disclosed this to
Ukrainian News.

He marked that the European Commission knows that in 2007, Ukraine had grave
climate conditions, which demanded certain actions from the representatives
of Ukrainian power.

He said that the commission discussed the issue with Ukraine and Ukrainian
authorities assured that the taken measures would be temporary and would be
taken under permanent control.

“However, the commission is concerned that taking into account information
about the yield, export quotas are too strict,” he said.

At the same time, the European Commission understands that not later than

in October, more liberal grain mode will be introduced.

“In the future, it is important to limit application of any trade
constrictions, introducing them only in the cases there is critical fall of
foodstuff on the base of thorough forecasting of the yield,” he said.

He also said that the European Commission had proposed to Ukrainian
authorities access to European Mars system of explicated analysis and
forecasting, which is applied in the farm sector of the European Union. It
would help Ukraine to improve abilities on harvest forecasting.

As Ukrainian News earlier reported, Deputy Prime Minister for Agriculture
Viktor Slauta thinks that Ukraine may export up to 5 million tons of grain
in the 2007/2008 marketing year (from July 1, 2007 to June 30, 2008).

The Cabinet of Ministers introduced a 12,000-ton grain export quota for the
2007/2008 marketing year. The Economy Ministry initiated the introduction of
export quotas on wheat, barley, mixture of wheat and rye, corn, and rye in
the amount of 3,000 tons on each of the cultures from July 1 to October 1,
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


Interfax Ukraine Agro, Kyiv, Ukraine, June 24, 2007

KYIV – U.S. Ambassador to Ukraine William Taylor has said that the

Ukrainian government should let market forces regulate the country’s
grain trade.
The ambassador said this in a TV interview with the 5th Channel on
Wednesday, commenting on the Ukrainian cabinet’s decision to introduce
quotas on grain exports in the third quarter of this year.

According to the diplomat, though experts forecast that this year’s grain
harvest in Ukraine will be lower than last year due to the drought, there is
no need to limit grain exports. By limiting wheat exports, the government
harms farmers, Taylor said.

As reported, on Wednesday, the Ukrainian government imposed quotas on
exports of wheat, rye, corn, and barley in the third quarter of 2007, set at
3,000 tonnes for each crop.

The cabinet said these measures were prompted by the abnormally hot weather
in May and a drought that has lasted 40-50 days in certain regions of

The Ukrainian government introduced licensing and quotas for grain exports
in the fall of 2006, but export quotas were later lifted.

The introduction of grain export quotas by Ukraine drew criticism from grain
traders and a number of countries with which the country is negotiating
accession to the World Trade Organization (WTO).

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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Kyiv Post Senior Journalist, based in Ukraine.
Eurasian Home, Moscow, Russia, Monday, June 25, 2007

The Soviet authorities loved to portray their country to the world as a
dictatorship of workers and peasants.

In fact, the peasants were at the bottom of the Soviet Union’s
socio-economic hierarchy, forced to feed the workers, the army and the
party functionaries who controlled their lives.

Independent Ukraine may eventually have to again force a large percentage
of its people to till the fields in order to provide the rest of the country
with something to eat, following the latest demonstration of command
economics by the government.

Last week, the Cabinet finally admitted that it intended to renew severe
restrictions on the export of grain.

Despite vigorous protests by grain traders, farmers and foreign governments,
no one was surprised by the new quotas, which merely represented the
continuation of a policy instituted last fall.

The government’s reason for the renewed restrictions was Ukraine’s recent
bout of dry weather.

Indeed, this year’s harvest could end up being smaller than last year’s due
to drought; however, in the opinion of everyone but the government, the
harvest is not so small as to justify quotas.

But who should Ukrainians believe – blood sucking capitalists and
foreigners, or the vanguard of the proletariat, whose only concern is that
the people get cheap bread?

As for the country’s farmers, they ceased being seen as wholesome laborers
as soon as they started trying to make a profit.
Ukrainian farmers may have finally gotten the point, though, this time

Why should they risk investment against bad weather and world markets if the
government is going to force them to sell their produce at a lower price to
‘the people’ anyway?

It’s the people, of course, whom the government has in mind, as the
coalition of prime-minister Viktor Yanukovych gets ready to challenge the
country’s pro-Western opposition in early elections later this year.

There is nothing like cheap food, as well as the rises in pensions and state
wages that the government has promised, to dispose voters to their cause.

Although the prime-minister has spent no great effort to change his public
image as a cheat in the last presidential elections to that of a modern
leader of a market economy, his choice of coalition comrades in the
parliament speaks to the contrary.

Together with the Socialists and Communists, the champions of the peasant,
Yanukovych has shown himself to be at best indifferent to implementing
reforms directed at greater integration with Europe.

Yanukovych’s Regions faction itself is a loose mix of post-Soviet
reactionaries and pragmatic industrialists.

All the same, as in Soviet times, party officials and industrial workers
need farmers to feed them.

But following the government’s June 20 decision to re-impose grain quotas,
farmers are expected to start planting more profitable crops such as rape
seed, which is used in the production of bio-fuel.

Experts say that the increased use of land worldwide to produce bio-fuel is
the main reason for skyrocketing international grain prices. Increasingly
capricious weather and a higher world population have also raised the
demand for bread.

These trends could be a windfall for Ukraine, currently the world’s sixth
largest grain exporter.

Instead, out of incompetence and short-term planning, Ukraine’s government
is shooting itself in the foot.

When the government first imposed grain quotas last fall, farmers had
already started work toward this year’s harvest. But next year may bring
even smaller grain yields than this year and last, regardless of the
weather, as farmers switch to crops they can sell.

Experts estimate that Ukrainian farmers have already lost upwards of $200
million in the last nine months due to the government’s command-economy

Most damaging has been the way the government introduced its restrictions:
suddenly, secretly and with no input from farmers and traders.

Since grain export quotas were introduced last fall, traders have reported
losses of up to $100 million in fines for broken contracts. Even if the
government does decide to free up exports in October, when its newest quotas
are due for renewal, there will not have been enough time to arrange sales.

Last year, with a harvest just a little below average, around 34 million
metric tons, the government also said it was looking after the country’s
food security.

It didn’t explain, however, why it hadn’t taken the precaution of buying
enough grain for state reserves, instead of unilaterally and belatedly
halting grain shipments abroad.

Moreover, grain traders and farmers have repeatedly said that the worst part
of the government’s policy has been its unpredictability.

Last year, for example, the government unexpectedly and immediately
introduced inaccessible export licenses, then switched to quotas that were
cancelled over the course of the next several months, promised that it would
cancel the last quotas this May and then – surprise, surprise – announced
new quotas with two weeks notice in June.

When foreign diplomats have protested, they were told to mind their own
business; when traders have complained, they were said to be exaggerating
their losses.

Is this the behavior of a modern market-oriented government? One gets the
impression that the Ukrainian government’s economic gurus think that world
markets operate like a corner store.

Apparently sensitive to last year’s media reports of grain traders throwing
rotting grain into the Black Sea to avoid paying crippling extra storage
fees, the government proudly announced this year that it had given traders a
full month to export the grain that they had already stored at port.

With such foresight in policymaking, one wonders whether it’s incompetence
or outright self sabotage that guides Ukraine’s government.

The secretariat of President Viktor Yushchenko, for example, has already
said the grain quotas will hurt Ukraine’s chances of joining the World Trade
Organization. Unlike his leftist coalition partners, Yanukovych has
supported WTO entry, which would benefit the industrial wing of the Regions

However, the prime-minister has hampered other initiatives toward Western
integration, preferring closer ties with the Kremlin, which supported his
ill-fated grab for the presidency.

No one would deny that the Ukrainian government has the right, the
obligation, to ensure that Ukrainians have enough to eat. Some are even
sympathetic to the fact that the cash-strapped government is afraid of
paying market prices for grain.

However, there is no excuse for the opaque and unpredictable way that the
export restrictions have been carried out.

Moreover, the size of the new quotas – only 3,000 metric tons for each type
of grain exported – equates to a complete ban. Normally, Ukraine exports
around 9 million metric tons of grain a year.

Although the government recently reported that as much as 10 million tons of
grain might have been damaged from draught, this figure is just a forecast,
and one not shared by anyone else.

So if Ukraine ends up with more grain than it needs, who will sell what’s
left? Not the grain traders, as they have been effectively put out of
business. The opportunity afforded by such a situation to well connected
middlemen speaks for itself and to a return to old-style corruption.

Another equally important question that arises is who will be planting
Ukraine’s next crop? The peasants of Soviet times weren’t thrilled about
feeding the workers, army, party bosses and intelligentsia. That’s probably
why the Communist authorities had to keep them from moving to the city.

If the government doesn’t start understanding the complexity and fragility
of the market economics that it claims to espouse, it may have to start
making people become peasants again.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Interfax, Vinnytsia, Ukraine, Tuesday, Sep 18, 2007
VINNYTSIA – Ukrainian Prime Minister and leader of the Party of
Regions Viktor Yanukovych has called for creating legal barriers to
prevent large companies, especially foreign ones, from continuing to
buy up land en-masse in Ukraine.

“We should pass a law that would make it impossible for both
Ukrainian and foreign large corporations to buy up land,” Yanukovych
said in live remarks on the Vinnytsia TV and radio station on

This concerns primarily foreign capital, because “foreign capital is
stronger than Ukrainian capital,” he said.

The prime minister also zeroed in on the corruption accompanying the
sale of land in Ukraine. “We cannot afford officials enriching
themselves at the expense of the state and the people,” the premier
said, stressing the necessity of public control over land sales.

“We should not allow officials to tackle the issue during the land
reform. Everything should be under public scrutiny,” Yanukovych said.

FOOTNOTE: This is strange article as land cannot be bought and
sold in Ukraine today.  Ukraine also needs billions of dollars to
develop is agricultural and food system potential. This investment
will need to come from all sources…domestic and international.
Ukraine does not need restrictions likes the ones mentioned in the
article above. AUR Editor.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax-Ukraine news agency, Kiev, in Russian, 19 Sep 07
BBC Monitoring Service, United Kingdom, Wed, Sep 19, 2007

KYIV – The Ukrainian deputy prime minister for agriculture, Viktor Slauta,
has said that the restrictions on grain exports should be extended from 1
October 2007 to 1 January 2008, the Interfax-Ukraine news agency reported

on 18 September.

He said that lifting the export restrictions would cause an increase in
internal prices of grain. However, Slauta said it would be possible to
increase corn export quotas due to the rich harvest expectations.

Ukraine is capable of exporting 4m-5m tonnes of grain, mainly fodder grain,
in this marketing year, Slauta said. He confirmed that this year’s harvest
forecast at 29m-30m tonnes of grain.

FOOTNOTE: Ukraine continues to shoot itself and its farmers and
agri-businessmen in the foot with these restrictive and unnecessary
grain export restrictions.  Soviet operating handbooks seem to still
be in style in Ukraine with some leaders and also corruption.  AUR Editor
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
NOTE: Send in a letter-to-the-editor today. Let us hear from you.

LUKE HARDING, The Guardian – United Kingdom
London, United Kingdom, Tuesday, Sep 18, 2007

Ukraine is to cover the site of the Chernobyl nuclear reactor with a vast
metal shelter in a long overdue operation designed to prevent the further
leak of deadly radiation.

Officials in Kiev yesterday said they had hired a French firm to replace the
crumbling concrete sarcophagus that has stood at Chernobyl since 1986 – when
it was the scene of the world’s worst ever nuclear disaster.

The new shelter is an arch-shaped metal structure 105m (345ft) tall and 150m
(490ft) long. It will enclose the sarcophagus hastily put up after the
accident. That precarious structure has been leaking radiation for more than
a decade.

“I am convinced that today, possibly for the first time, we can frankly tell
the national and international community that the answer to the problem of
sheltering the Chernobyl nuclear plant has been found,” President Viktor
Yushchenko said, according to his presidential website.

The European Bank for Reconstruction and Development has funded the $505m
deal with a French construction firm, Novarka. The plan is to eventually
dismantle the sarcophagus and the exploded reactor inside the new shelter.

According to official estimates, the reactor still contains about 95% of the
original nuclear fuel from the plant. There are fears that if the
sarcophagus collapses another cloud of lethal radioactive dust could escape.

Chernobyl’s reactor No 4 exploded on April 26, 1986, spewing radiation over
a large swath of the former Soviet Union and much of northern Europe. An
area roughly half the size of Italy was contaminated, forcing the
resettlement of hundreds of thousands of people.

Anton Usov, a spokesman for the European Bank for Reconstruction and
Development, said it will take about 1 1/2 years to design the shelter and
another four to build it.

Officials also signed a $200m contract with the US firm Holtec International
to build a storage facility for spent nuclear fuel from the plant’s three
other reactors, which kept operating until the station was shut down in

“The successful implementation of the project depends not only on the
progress of the construction work, but also on the continued commitment of
both the Ukrainian authorities and the international community,” the
European bank’s president, Jean Lemierre, said in a statement.

Within the first two months after the disaster, 31 people died from
illnesses caused by radioactivity. But there is no consensus over the
subsequent death toll. A 2005 report from the UN health agency estimated
that about 9,300 people will die from cancers caused by Chernobyl’s
radiation. Some groups, such as Greenpeace, insist the toll could be 10
times higher. Some 200,000 residents were evacuated from Ukraine alone.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


By Roman Olearchyk in Kiev, Financial Times

London, UK, Tuesday, September 18, 2007

Commerzbank is buying a 60 per cent stake in Ukraine’s Bank Forum for

$600m, the German group said on Tuesday, the latest in a flurry of
purchases by European banks seeking to gain exposure to the former
Soviet republic’s promising banking market.

Under the agreement, Commerzbank has also secured the option to purchase

an additional 25 per cent stake within 36 months. It will finance the deal
through existing resources.

“After an intensive search, we have found an ideal complement for our
network of operational outlets in the booming region of central and eastern
Europe in the form of Bank Forum, the 10th largest bank in Ukraine by total
assets,” said Martin Blessing, a member of Commerzbank’s managing board.

“This represents another step in our strategy of selective acquisitions to
grow within our target regions. With approximately 12,000 corporate
customers, of which 9,500 are small and medium-sized enterprises, Bank Forum
is already making an important contribution to strengthening our Mittelstand
business. In addition, we plan to expand Bank Forum’s retail customer
business considerably in the coming years,” Mr Blessing added.

Bank Forum is majority owned by Ukrainian-born Leonid Yurushev and his
family. Mr Yurushev, a Greek national, also has investments in Ukrainian
real e state development projects and assets in industry.

The bank was founded in 1994 and, after rapid expansion, now has assets
totalling the equivalent of Euro1.4bn and a market share of 2.3 per cent. It
plans to increase the number of branches to 400 in the next four years,
whilst doubling its market share.

Commerzbank officials said the Ukrainian banking market had seen strong
growth in recent years, with bank assets rising at an average rate of more
than 50 per cent over the past five years.

Market penetration of banking services in Ukraine remains low, but growth
potential is considered high and foreign banks have tripled their presence
in the market to about 30 per cent in the past three years.

In July, Bank Austria Creditanstalt, the Austrian subsidiary of Italy’s
UniCredit, agreed to pay $2.2bn for Kiev-based Ukrsotsbank, one of

Ukraine’s top five banks in terms of net assets and branch network size.

Other European banks to enter Ukraine recent years have included Austria’s
Raiffeisen and Erste Bank Groups, France’s BNP Paribas and Crédit Agricole,
Hungary’s OTP Bank and Sweden’s Swedbank.

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

Lionel Laurent,, NY, NY, Wednesday, September 19, 2007

LONDON – Germany’s Commerzbank is following in the footsteps of European
rivals such as BNP Paribas with a major Ukrainian investment, as it takes a
60% stake in Kiev-based Forum Bank for $600 million, which values the firm
at $1 billion. But it may be a case of too little, too late, for too much.

Shares in Commerzbank closed up 1.51 euros ($2.11), or 5.5%, to 28.91 euros
($40.38) on Wednesday in Frankfurt. The positive effects of the U.S Federal
Reserve’s 0.50% interest rate cut on Tuesday also spread to Deutsche Bank,
up 4.3% to 94.23 euros ($131.61), and Allianz up 4.1% to 157.98 euros
($220.66). The benchmark DAX index rose 175.63 points, or 2.3%, to 7,750.84

On Tuesday Commerzbank said the $600 million transaction would strengthen
its position in Eastern Europe, through a 60% stake bought from majority
Forum Bank investor Leonid Yurushev. The German bank has also secured the
option to buy a further 25% of the Ukrainian bank after 3 years.

But Commerzbank is not alone to be eyeing Eastern Europe, and it may be
moving in too late. In 2005, France’s BNP Paribas  acquired a controlling
stake in UkrSibbank, the fourth-largest Ukrainian bank by asset value, and
at the end of July the French bank teamed up with insurer AXA to buy 99%

of Ukrainian insurer Vesko.

“Ukraine could be a further growth area for this world, however they are
entering very late and at relatively high multiples,” said an analyst
covering Commerzbank who did not wish to be named. The analyst said the

deal valued the whole of Forum Bank at $1 billion, five times more than its
market worth of $197.3 million.

But the positive side to the story is that Commerzbank is able to do deals
at a time of great uncertainty in the financial markets and the European
banking sector.

Inter-bank lending has faced an intense lack of liquidity as banks worry
about credit lines, which took a hit from investments in the American
mortgage-backed securities market.

Commerzbank will nonetheless be forced to write off 80 million euros ($111.8
million) in losses related to investments in the U.S. subprime loan market,
it said Tuesday.

In August, Commerzbank and Deutsche Postbank (other-otc: DEUPF – news –
people ) said it had exposure to over $1 billion each in subprime mortgage

Deutsche Postbank said this was largely due to investments in fellow lender
IKB’s collapsing U.S. vehicle Rhineland Funding.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Miner of iron ore in Ukraine held initial public offering (IPO) in June

By Brett Foley and Mark Herlihy, Bloomberg, London, UK, Wed Sep 19

LONDON – Ferrexpo Plc, the miner of iron ore in Ukraine that held an initial
public offering in June, plans to boost output further after first-half
profit more than doubled on higher production.

The Baar, Switzerland-based company plans to expand production of iron-ore
pellets beyond the target detailed in its IPO, Chief Executive Officer
Michael Oppenheimer said on a conference call today.

“Our production outlook will be more aggressive and will be significantly
above the 20 million tons by 2014 we stated before the IPO,” Oppenheimer
said, without specifying a target. Details of the expansion will be released
later this year, he said.

Mining companies are expanding iron-ore output to meet demand for the
steelmaking ingredient as construction surges in emerging economies such as
China, the world’s largest user.

Steelmakers agreed to a 9.5 percent increase in benchmark iron- ore contract
prices this year, the fifth straight annual rise. Prices may climb 30
percent next year because of a shortage of supply, Merrill Lynch & Co. says.
‘Positive’ Market
“The current positive market environment for our business is set to
continue,” Chairman Michael Abrahams said in the statement. The “strong
outlook” for steel and iron ore will continue through the “second half of
this year and beyond,” he said.

Net income climbed to $36.6 million in the six months to June 30 from $15.5
million a year earlier, the company said in a statement.

Ferrexpo rose 4 pence, or 1.6 percent, to 254 pence in London trading as of
9:40 a.m., giving the company a market value of 1.54 billion pounds ($3.09
billion). The shares have climbed 81 percent since they were sold on June 15
at 140 pence each.

The volume of iron ore Ferrexpo mined during the half rose 15 percent to
14.4 million metric tons from a year earlier while pellet production
increased 19 percent to 4.7 million tons, the company said.

Ferrexpo plans to source the ore for its expansion from new mines near its
existing facility after purchasing concentrate from third parties to make
pellets became too expensive, Oppenheimer said. Ferrexpo will seek
additional investors to help finance the program, he added.

“These will be strategic investors that will help with funding, project
experience or technology,” Oppenheimer said. “Talks are ongoing.”
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

If you are receiving more than one copy of the AUR please contact us.

By Rebecca Bream, Utilities Correspondent, Financial Times
London, United Kingdom, Thursday, September 20 2007

Ferrexpo has started looking for a partner to help it build new iron ore
mines in Ukraine, as part of its aim to more than double its current

Mike Oppenheimer, chief executive of the mining group, said it had already
planned to double its output of iron ore and iron ore pellets by 2014,
“but now we are looking at opportunities to be more aggressive”.

The Switzerland-based company, controlled by Kostyantin Zhevago, the
32-year-old Ukrainian billionaire businessman and politician, listed in
London in June.

Ferrexpo produced 14.4m tonnes of iron ore in the first half of the year,
which it turned into 4.7m tonnes of iron ore pellets, which are used in

Revenues rose 39 per cent to $328m (£164m), while pre-tax profits increased
threefold to $54.5m, thanks to a production increase and higher prices.

Ferrexpo’s current operations are focused on the southern end of Ukraine’s
sizeable Poltava iron ore deposit, but over the next few years it plans to
open up mines further north.

Mr Oppenheimer said only a small portion of the Poltava ore body had so far
been exploited. “We are not limited by [iron ore] re-sources, we are sitting
on iron ore, it’s a question of how quickly we can get new projects up and

He said Ferrexpo could fund some of the expansion itself, “but if we want to
push this forward aggressively we need assistance, financially and

Mr Oppenheimer said the group was “in the very early stages of contact with
a variety of different parties” that could invest in the Poltava expansion
projects and was especially interested in partnerships with companies “that
can plan and execute big capital projects”.

Iron ore prices have soared over the past four years because of rising
demand for steel, especially in China. CVRD of Brazil and London-listed
mining giants Rio Tinto and BHP Billiton dominate the iron ore market,
controlling more than 70 per cent of supplies. Ferrexpo shares rose 5p to
255p yesterday.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Send in a letter-to-the-editor today. Let us hear from you.

Holtec International, Marlton, New Jersey, Tuesday, September 18, 2007

In a ceremony on September 17, 2007 in Kyiv, Ukraine, presided by President
of Ukraine Victor Yushchenko, General Director of the Chernobyl Specialized
State Enterprise, Igor Gramotkin and Holtec’s President and CEO, Dr. Kris
Singh, signed the Contract documents that bind Holtec and the Ukrainian
government to complete the interment of Chernobyl’s used nuclear fuel in dry
storage systems in full conformance with Ukraine’s national safety

The project was started under an interim authorization-to-proceed on August
3, 2007; the contract signed on September 17, which is backed by a full
endorsement from the Assembly of Donors, places the project on a solid path
to completion.

Removing the radioactive fuel from the three Chernobyl reactors is essential
to the start of decommissioning of the three undamaged reactor units that is
a part of the agreement between the Government of Ukraine and the Donor
countries (countries of Western Europe, U.S. and Japan).

Holtec will complete the dry storage project, begun in 1999 by another
contractor, and plans to use as much of the previous accomplishments on the
project as is feasible with the protection of public health and safety as
the overriding criteria.

Ukraine’s regulations for the dry storage of used nuclear fuel require that
all of its used fuel be dried of virtually all moisture and placed in
double-wall containers of supreme physical integrity to guarantee that any
radiological release at the storage site to the environment is highly

Speaking at the press conference after the contract signing, Dr. Kris Singh
emphasized public safety as a paramount consideration declaring “We endorse
Ukraine’s regulatory criteria for storing used nuclear fuel to protect
public health and safety which are amongst the most stringent in the world.

“We consider Ukraine’s strict regulations as our silent allies in enhancing
the public’s confidence in the safety and ruggedness of nuclear power here
in Ukraine and around the world.”

Holtec International is a U.S.-based diversified energy technology company
with global operations on four continents. The company is currently carrying
out used nuclear fuel management projects similar to Chernobyl’s at numerous
plants in the U.S., Spain, Switzerland, China, and Korea.

The Central Spent Fuel Storage Project for Ukraine’s VVER reactors is also
being implemented by Holtec International under a separate contract with
NAEK Energoatom.

Holtec has established a regional operations center in Kiev to facilitate
the development of local technical know-how inside the country for serving
domestic and overseas markets.

FOOTNOTE:  Holtec International is a member of the U.S.-Ukraine
Business Council (USUBC) in Washington.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Caroline Binham,  The Lawyer, London, UK, Monday, 17-Sep-2007

LONDON – CMS Cameron McKenna has launched a series of raids on local
rivals to bolster its new Ukraine office. The raids come as UK firms circle
the former Soviet state looking to take advantage of an underlawyered but
buoyant emerging market.

Camerons will be the first City firm with an on-the-ground presence in Kiev
when it launches there this month, but a number of UK firms have also been
contemplating Ukraine launches.

Clifford Chance managing partner David Childs denied rumours of an imminent
launch, but admitted: “It’s on my radar. A number of our clients are doing
an increasing amount of work there.”

Camerons is in the midst of a hiring frenzy, taking on more lateral partners
in one week than during the past three years. It signed up seven new
partners last week, the bulk of them for its Ukraine office.

Linklaters’ former Central and Eastern Europe managing partner Nick Eastwell
commented: “Ukraine has 48 million people and it’s a vast country full of
natural resources. There are signs of real sustainable growth there, so law
firms are naturally looking at it.

“Of the old CIS [Commonwealth of Independent States] countries beyond
Russia, it’s really the one to have, along with Kazakhstan.

“Personally I think we should [be opening in Kiev], but I don’t think we
will be in the near future given everything else we’re doing. It’s a
question of priorities.”

Camerons raided Baker & McKenzie, Chadbourne & Parke, local boutique
Levenets Maciw & Partners and Ukraine’s justice ministry for, respectively,
corporate partner Olexander Martinenko, corporate partner Adam Mycyk, name
partners Oleksiy Levenets and Christina Maciw, and corporate partner Daniel

The office will launch with another 13 associates and regional corporate
head Helen Rodwell will relocate for six months, as first reported by The
Lawyer (9 July).

Camerons’ hiring spree is also spreading to London, with Reed Smith Richards
Butler head of immigration Caron Pope returning to the firm she trained at
and Dundas & Wilson funds partner Gawain Hughes also moving to the firm,
although Camerons declined to comment on the latter move.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Ukrainian News, Kyiv, Ukraine, Sunday, September 9, 2007

KYIV – The Central Electoral Commission’s Chairman Volodymyr Shapoval and
the United States’ Ambassador to Ukraine William Taylor have discussed the
electoral rights of citizens who are unable to move around unaided. The
press service of the Central Electoral Commission announced this in a

According to the statement, Taylor expressed concern about participation of
such citizens in the Ukrainian parliamentary elections. The press service
said that Taylor expressed the opinion that the rights of these citizens are
not clearly protected.

Shapoval said that the Central Electoral Commission has no power to regulate
this issue. The statement says that Taylor intends to issue a public
assessment of this issue in order to draw the attention of the international
community to it.

Moreover, Shapoval and Taylor discussed voting opportunities for citizens
located outside Ukraine and those returning to the country a few days before
the parliamentary elections.

According to Shapoval, it will be sufficiently difficult to reinstate data
about these citizens in election lists if they return to Ukraine three or
fewer days before the voting day.

As Ukrainian News earlier reported, the Central Electoral Commission has
promised the Parliamentary Assembly of the Council of Europe (PACE) that it
will explain procedures for voting at home to election commissions.
Campaigning in the parliamentary elections started on August 2; voting is
scheduled for September 30.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

By Stephen Bandera, Kyiv Post Editor
Kyiv Post, Kyiv, Ukraine, Thursday, Sep 20, 2007

Problems with electoral law can lead to nearly a million Ukrainians losing
the right to vote and have created additional opportunities for
falsification in the Sept. 30 vote for parliamentary seats, analysts said.

The new electoral provisions are designed to prevent the millions of
falsified votes that sparked mass protests in a 2004 presidential contest
dubbed the Orange Revolution. In the second round of the presidential race
in 2004, 2.8 million ballots were rigged, according to the Committee of
Voters of Ukraine.

But the changes may see parties lose – or steal – crucial points in a tight
race between the three front-runners: Prime Minister Viktor Yanukovich’s
Party of Regions, opposition leader Yulia Tymoshenko’s Byut bloc, and
Our Ukraine-Peoples’ Self-Defense, which is loyal to President Viktor

“This is a battle for 300,000 to 400,000 votes that will determine who will
win enough of the few seats required to form the majority in the next
parliament,” said elections administration expert and former Member of
Parliament Volodymyr Kovtunets.

Sociologists showed between three and seven parties, including the
Communists crossing the three percent qualifying barrier for seats in
parliament. More than ten percent of voters were undecided in early
September before a publication ban on poll results came into effect last

A million votes represent approximately four percent in the final tally.
With the so-called Orange (BYuT and OUPSD) and Blue coalition (Regions)
forces in a dead heat, the “golden share” of seats will determine who will
make or break a coalition in the next Rada.

Polls show that several political camps have a chance of landing the
kingmaker position, namely OUPSD, the bloc of former parliamentary
speaker Volodymyr Lytvyn, and the Communist party.
In its weekly election monitoring report, the CVU election watchdog
expressed concern about “the declarations by politicians and sociologists
concerning very high voter turnout in separate regions. According to CVU
estimates, the voter turnout will be between 60 to 70 percent.”

Ballot stuffing and multiple voting by certain voters is a concern. “If
voter turnout at separate polling stations will be higher than 85 percent
then the CVU will conduct a factual verification of voters concerning the
reality of their voting.”
Certain categories of citizens will not be able to cast their ballots due to
changes in electoral law. These include elderly and disabled people who are
immobile and live in distant villages.

Voters entering the country after Sept. 27 will not be able to cast their
ballot; students and migrant workers who are not at home on Election Day
will not be able to vote.

CVU spokesperson Oleksandr Chernenko said that these measures, together
with mistakes in voter lists, can result in 1.5 million voters losing the
right to vote on Election Day.
On Sept. 30 at least 102,000 of more than 450,000 polling station
commissioners will leave the premises of their stations to conduct what is
known as mobile-voting or voting-at-home – a major source of alleged
electoral falsification in the 2004 presidential race.

The commissioners will get into a car with mini ballot boxes to collect the
votes of immobile persons who are bound to their homes due to age or

Mobile-voting – as high as thirty percent at polling stations in Mykolayiv
and Donetsk regions during the fraud-ridden presidential elections in 2004 –
is potentially a major source of falsification, according to Kovtunets.

“The decisions on who votes at home are ultimately made at the polling
station level,” Kovtunets explained. “If we see that more than three percent
of total votes at urban polling stations were cast ‘at home’ that will give
us reason to be suspect.”

He said that up to 30 percent of elderly people unable to move from their
homes in the country’s distant villages will not be able to vote on Sept. 30
if the mobile voting groups do not visit them.

Kovtunets said that the race for the Rada is so close that false votes can
decide the balance: “You have more than 33,000 polling stations – ten false
‘votes-at-home’ or ten ballots stuffed in the ballot box at each station –
nobody will detect falsification,” Kovtunets said, adding that all parties
are responsible for electoral funny-business to varying degrees.

“CVU observers have found an abnormally high number of voters who want to
vote at home in certain regions. Although these incidents are few, they show
that falsifications are being prepared.

In Kharkiv region the CVU found that the number of Ukrainians requesting
voting at home is between 2 to 3 percent, while in two districts of the
regions that number reaches 10 percent.

“A large number of ‘dead souls’ were found in the voter lists for the city
of Lozova [in Kharkiv region],” according to the report, “this confirms
information that the city’s government is preparing a technology to vote for
these ‘voters.'”

In the last elections, more than 1.1 million voters applied to cast their
ballots at home. After voting was done more than 950,000 had voted from
their place of residence – nearly 4 percent of the total final vote tally.
The Ministry of Internal Affairs performed a pre-election sweep of homes to
verify residency records.  Local police officers randomly checked 890,000
apartments from June to August of this year, the ministry’s press service
reported on Sept 17.

Police registered or removed residential records for 402,000 citizens while
69,000 were determined to be living abroad. Nearly 95,000 people were found
to not be living at their registered place of residence. Nearly 26,000 were
charged for breaking administrative law.

The Regions’ press service picked up the information from the police
ministry – run by Socialist Vasyl Tsushko – and said that there were 3.32
million Ukrainian passport holders located outside of the country in

The blue party’s spin doctors said that 1.16 million of the Ukrainians
abroad (around 35 percent) come from four of the country’s westernmost
regions – the heartland of orange electoral support.

The Regions accused the president-appointed heads of regional
administrations of beefing up the voter numbers in the “traditionally-orange
oblasts” of Lviv and Sumy.

“These facts are proof of the purposeful use of the administrative resource
by the president aimed at creating the condition for falsifying voting
results,” the statement alerts election observers.

On Sept. 27, the state border service should provide the Central Election
Commission with passport numbers of registered holders who are outside of
the country. These passport holders will be stricken from the voter lists.

“There is a potential problem with voters arriving in Ukraine in the last
week before elections. Up to 400,000 votes could be lost if we consider that
75,000 Ukrainians enter the country on a daily basis,” calculated Kovtunets.

The Constitutional Court began hearings on the border-crossing voter
provisions on Sept. 18.
One source of multiple voting by a single person in the past has been
eliminated for these elections, namely absentee ballots.

CVU’s Chernenko estimated that abuse of the absentee certificates resulted
in a half million votes stolen in 2004. In the March 2006 elections, only
20,000 absentee voting certificates were issued due to stricter controls,
and the certificates have been completely eliminated for these elections.

Kovtunets estimated that nearly half a million voters will be
disenfranchised due to the innovation, including students and domestic
migrant workers. Domestic migration stood at nearly 343,000 persons in the
first seven months of this year, according to the State Statistics Committee.
More than 420,000 Ukrainians will be eligible to vote at polling stations
outside of the country, the CVU reported on Sept. 17. The NGO said that the
Foreign Ministry has included nearly a half million Ukrainians in the voter
lists for foreign voting stations.

But CVU head Ihor Popov told Deutsche Welle radio that no more than 10
percent of that number will actually cast their ballots on Sept. 3.

Popov said that no political party or bloc is “seriously concerned” about
voter abroad, because of the expected low voter turn out. On Sept 30 polling
stations will be open at 115 polling stations in 79 countries, according to
the CEC.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Suggested that his party supporters “finish the Orange off”

Black Sea TV, Simferopol, in Russian 1600 gmt 17 Sep 07
BBC Monitoring Service, United Kingdom, Wed, Sep 19, 2007

SIMFEROPOL – The leader of the Party of Regions and Ukrainian prime
minister, Viktor Yanukovych, has suggested that his party supporters “finish
the Orange off”.

A report on his rally in Crimea’s Kerch on 16 September, which was broadcast
by the Black Sea TV a day later, shows the prime minister seemingly
returning to the offensively informal rhetoric he used to practise during
the presidential campaign of 2004.

Then he was defeated by incumbent President Viktor Yushchenko supported by
what was called the Orange opposition.

The TV channel showed a crowd of supporters yelling admiringly when
Yanukovych thanked them for attending the rally and asked whether the Orange
should be “finished off”.

A few national TV channels broadcast the report on Yanukovych’s visit to
Crimea but did not include this video into their reports.

[return to index] Action Ukraine Report (AUR) Monitoring Service]
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Kyiv Post, Kyiv, Ukraine, Thursday, September 20, 2003

In the last three years US political technologists and other US-based
consultants have routinely argued that Viktor Yanukovych and the Party of
Regions have changed into a modern and democratic party. Little evidence
has been shown to prove this argument but nevertheless the mantra has been
chanted at every available opportunity.

Two factors explain such dogged claims. This first is the ideological
support for an oligarch-controlled economy and lack of scholarly

The Yulia Tymoshenko government came under intense criticism by US think
tank senior fellows in academic and media articles who used every speaking
engagement to attack its record as “odious.”

At the same time, these senior fellows have never criticized the Yanukovych
government for pursuing anti-market reform policies: oil price capping,
banning grain exports and non-transparent insider privatizations.

They have never sought to criticize any aspect of the Party of Regions,
which includes numerous senior deputies from the Kuchma era, such as energy
mogul Yuri Boiko and former Central Election Commission Chairman Serhi
Kivalov, as ‘odious’ in the same way as the criticism that they unleashed
against the Tymoshenko government and BYuT.

Secondly, financial support. Ukrainian and Russian media have claimed that
political technologist Paul Manafort’s contract with the Party of Regions is
worth millions of dollars.

Ukrainian oligarchs have reportedly distributed largesse to at least two
think tanks and one democracy promotion NGO in Washington DC.

According to an April 17 article entitled “How Lobbyists Help Ex-Soviets
Woo Washington” in The Wall Street Journal, “A company controlled by Mr.
Akhmetov donated $300,000 in 2005 to a human-rights charity run by Mr.
Jackson and his wife, an Internal Revenue Service document reviewed by
The Wall Street Journal shows. Mr. Jackson said he was grateful for the

Bruce Jackson is head of the Washington-based Project on Transitional
Democracies who supported the Orange Revolution in 2004.

Beyond wishful thinking there is no evidence to show that Prime Minister
Yanukovych or the Party of Regions have fundamentally changed from the
Kuchma era.

Five policy areas prove that the Regions and Yanukovych have changed only
cosmetically since the Kuchma era.

[1] Firstly, the Party of Regions pursues a Janus-face approach to politics,
just as did former President Kuchma. The nice image cultivated by the
Regions in the West is very different from the reality on the ground in
eastern Ukraine where the Regions are entrenched.

This can be readily ascertained from a communication recently received from
Kharkiv: “The expansion of Donetsk capital in the Kharkiv region is very

The ‘Donetski’ are also expanding  their Soviet political culture into the
Kharkiv region through the use of Soviet discourse, exploitation of the myths
of the ‘Great Patriotic War’ and an aggressive stance towards Ukrainian
nationalism and the 1933 artificial famine,” explained my colleague in

He said that in his city, the Regions have aligned themselves with former
local organized crime boss Hennadiy Kernes.

[2] Secondly, the Regions’ unwillingness to distance itself from discredited
Kuchma-era officials. The Regions’ Rada faction and the Yanuovych government
are full of such officials who, if President Viktor Yushchenko had
implemented his election promises, would have faced criminal charges.

[3] Thirdly, continued non-transparency and corruption in the energy sector,
as evidenced by the return of Yuri Boiko as Minister for Fuel and Energy.
Boiko’s links to the non-transparent, corrupt intermediary Rosukrenergo have
never been in doubt.

In the 2007 elections Rosukrenergo majority shareholder Dmytro Firtash’s
representatives are in the Regions’ list. Of the major parties likely to
enter parliament this year only the Regions are in bed with Europe’s biggest
money launderer, Rosukrernergo.

[4] Fourthly, the return to non-transparent privatizations: Renat Akhmetov’s
Donbas Fuel-Energy company, the energy arm of Systems Capital Management,
was the only company effectively permitted to purchase shares in
Dniproenergo, Ukraine’s largest thermoelectric generator.

The Odessa Portside Plant could be the next major strategic asset  to be
privatized by Regions’ oligarchs in such a brazenly corrupt manner.

The two Yanukovych governments in 2002-2004 and 2006-2007 have never
undertaken any clean privatization tenders. Akhmetov’s and Viktor Pinchuk’s
privatization of Dniproenergo resembles that of Kryvorizhstal in 2004.

As the Kyiv Post pointed out last month, BYuT is the only political force
that has questioned Akhmetov’s takeover of Dniproenergo. The Tymoshenko
government organized Ukraine’s only transparent privatization of
Kryvorizhstal in fall 2004 when it obtained four times the value previously

[5] Fifthly, continued pursuit of undemocratic policies. The official reason
for failing to initially register BYuT rested on a legally dubious claim of
lack of full information provided by candidates in the BYuT list submitted
to the CEC.

BYuT retorted that the method of preparation of the list was exactly the
same as that used for the March 2006 parliamentary elections.

The refusal to register BYuT throws into doubt the evolution of the Regions
whose members on the CEC refused to register BYuT.

Since the 2004 elections Prime Minister Yanukovych and the Party of Regions
have worked through political technologists and consultants towards changing
their poor democratic image in the West by claiming their adherence to the
international principles of Western democracy.

There is no evidence to show that the Yanukovych government and the Party
of Regions are committed to four core principles:

     [1] battling corruption,
     [2] bringing transparency to the energy sector,
     [3] holding clean privatizations and
     [4] adhering to democratic norms and the constitutional

          balance of power.

Ukraine’s elections later this month give the country a chance to introduce
policies that were demanded by the one in five Ukrainians who participated
in the Orange Revolution three years ago.

These four core policies will never be implemented if the Yanukovych
government and the Anti-Crisis coalition return to power after the
elections. Ukraine needs real democrats and reformers in power who can
only come from the orange camp.
Dr. Taras Kuzio is a Research Associate at The Institute for European,
Russian and Eurasian Studies, George Washington University.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
President Viktor Yushchenko said liberals who swept him
to power would win Ukraines parliamentary election.

REUTERS, Ukraine, Wednesday, September 19, 2007

President Viktor Yushchenko said liberals who swept him to power would win
Ukraine’s parliamentary election and form a government that could be led by
“Orange Revolution” heroine, Yulia Tymoshenko.

Yushchenko, interviewed by Reuters late on Tuesday, also discounted
suggestions that he could cut a deal to form a “grand coalition” to govern
Ukraine alongside his arch rival from the 2004 revolution, Prime Minister
Viktor Yanukovich. Differences in aims and ideology were simply too great,
he said.

Asked about the possibility of Tymoshenko becoming prime minister again,
Yushchenko said: “I do not rule that out. There are no preconditions.

“I have no doubt the democratic forces will win the election. Nor do I doubt
that the democratic forces will learn the lessons of what happened a year
and a half, two years ago,” he said during a tour of central Ukraine.

The president hopes the Sept. 30 election will end months of deadlock and
enable long-delayed reforms to be implemented.

The pro-Western Yushchenko beat Yanukovich in the rerun of a rigged 2004
election, giving rise to plans to move Ukraine closer to the West and one
day perhaps joining NATO and the European Union.

But a government led by Tymoshenko, riddled by infighting, collapsed eight
months later, splitting the “orange” camp.

Yanukovich bounced back to become prime minister, spawning a struggle for
power that led the president to dissolve parliament and call a new election
expected to produce few changes.

In his comments, Yushchenko said “orange” forces, split by his dismissal of
Tymoshenko, “did not suffer a defeat at the hands of opponents. They lost
because of a lack of mutual understanding and the ambitions of individual

Tymoshenko’s fiery speeches inspired crowds in the 2004 rallies. But as
premier she aroused suspicion among investors with calls to review
privatisations. Relations with Russia were also bumpy.

The president’s reluctance to allow her to become prime minister again after
a parliamentary election barely a year ago helped Yanukovich regain office
after months of coalition talks.
The president has since reconciled with her and pledged to cooperate in the
new election. Analysts predict a blanket finish followed by difficult talks
to put together a stable coalition.

Yanukovich’s Regions Party leads polls, but the combined tally of “orange”
parties is right behind — though Tymoshenko’s bloc is far ahead of the
president’s Our Ukraine party.

Yushchenko did not rule out entirely a “grand coalition” to bridge the gap
between Ukraine’s nationalist west and centre that backs him and the
Russian-speaking east behind the premier.

But he described it as a “very difficult topic” given the history of
confrontation and calls by Yanukovich’s party for a referendum on two highly
sensitive issues — NATO membership and making Russian an official language
alongside Ukrainian.

“When we are talking about uniting the nation, you can only do this through
goals and priorities,” Yushchenko said.

Suggestions of an impending grand coalition have been fuelled by
Yanukovich’s fierce attacks on Tymoshenko in campaign speeches while
adopting a hands-off approach to the president.

Yushchenko said this merely showed the Regions Party had to court “orange”
parties as it was losing hope of maintaining its current governing coalition
with socialists and communists.

“It will naturally want to change the way it relates to the democratic
forces,” he said. “But this would be difficult for the democratic forces,
given the lack of respect and the values and the ideology displayed by the
Regions Party.”

U.S. Deputy Assistant Secretary of State David Kramer said it would be a
“major accomplishment” if Ukraine managed to hold a free and fair election
similar to that in March last year.

“That would be of considerable importance to Ukraine first and foremost, but
also for the region as setting a good model and example,” he said after
talks with EU officials in Brussels.

“We have no favourites in the election. Our interest is in seeing that a
government be formed rather quickly so we could get down to business with
that government.”

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

EDITORIAL: Kyiv Post, Kyiv, Ukraine, Sep 19 2007

For all the elections that have been held since our founding twelve years
ago, the Post has taken a clear stand and endorsed the candidates, parties
and blocs that we feel will best suit the country.

As a general consideration, we urge voters to make sure their ballot counts.
In this regard, voting for a party that is dear to one’s heart but has
little chance of passing the three percent qualifying barrier will
ultimately be a vote that will not count. The first message is to make sure
votes do count.

In terms of our endorsement, no party or bloc matches the “free markets,
free people” ideals so eloquently espoused by The Wall Street Journal.

A study of the election programs put forward by the various parties show
that, sadly, the mindset shared by most politicians is mired between
personal business interests, populistic promises and a desire to return to
the Soviet past.

While Ukraine has made significant progress in democracy and economic
growth, the free market revolution that emerged in North America, Europe and
parts of Asia has yet to make it here: all parties are calling for too much
government intervention into the economy.

Among the parties that have an outside chance of crossing qualifying barrier
for seats in the Rada, several have clear faults. The Communists seek to
return Ukraine to its tragic past.

Their ascent into power would cripple the economy, and possibly spell an end
to democracy. The same holds true for bloc led by Nataliya Vitrenko.

The Socialist Party, erstwhile ally to the “Orange” forces, showed it true
colors when leader Oleksandr Moroz could not resist the prospect of giving
up power and sold out. Their presence in the next Rada is under doubt.

Some polls show that former Rada speaker Volodymyr Lytvyn’s eponymous
bloc stands a chance of being in the next parliament. Lytvyn is also a
throwback – his political career reached its greatest heights while serving
President Leonid Kuchma.

And he, just like Moroz, still has much to explain concerning what they
allegedly know about the disappearance of journalist Heorhiy Gongadze  and
the Melnychenko tapegate affair.

Regardless of personal opinions concerning the Party of the Regions, Viktor
Yanukovych has shown signs of competence in government. But his camp has
tried to steal an election in the past.

Moreover, his government has failed to defend Ukraine’s energy interests,
hold transparent privatizations, and have interfered in the ag sector by
restricting grain exports.

Inside favoritism, with non-transparent dealings, are seeping up again under
their Yanukovych, whose capitalism continues to smack of cronyism.

Concerning Our Ukraine-Peoples’ Self Defense: rarely have so many done so
little with so many opportunities. In the aftermath of the Orange
Revolution, Yushchenko and his team had a chance to establish a new
political order.

Sadly, they failed. And, after last year’s elections, Our Ukraine had every
opportunity to build the coalition that was promised to voters.

Instead, they dawdled and left the country without government and reforms.
Although the bloc’s platform is closest to our hearts in terms of the ideals
of “free markets, free people”, doubt that it will actually be able to push
radical changes through remains high.

That leave’s the Yulia Tymoshenko bloc. Her term as prime minister was
filled with errors, false leads and showed that she lacked a clear
understanding of free markets.

She allowed political foes to paint her as a dangerous radical consumed with
re-nationalization (which never occurred). She flirted with price controls.
The Byut party program shows a dangerous tendency towards populism.

Sadly, Ukraine remains a country of political leaders and not political
ideas or ideology. All of the parties present similar, mishmash platforms.

None of the leading parties have shown the will to push through tough
political measures: privatizing land and industry, reducing taxes, etc.

Since these elections are once again about personalities and not their
policies, we endorse Tymoshenko with a certain degree of hesitation. She
has shown leadership in the fight against corruption. While she has
she has been most consistent and capable of getting things done.

Our hope is that this high-horse-power motor we call Tymoshenko will a
second time around stay out of the market and push through badly needed
reforms. We hope that she has learned from her experience of being
dismissed in the past.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Please contact us if you no longer wish to receive the AUR    

Mitch Potter, Europe Bureau, Toronto Star
Toronto, Ontario, Canada, Sunday, Sep 16, 20007

KYIV-He came to power with a face freshly ravaged by dioxin and a burning
need to know who, why and how it happened.

Today, Ukrainian President Viktor Yushchenko is still promising answers. But
the fact that the mystery prevails a full three years since the near-fatal
attack stands as arguably the single most symbolic disappointment of his
troubled leadership.

With Yushchenko’s Our Ukraine party struggling in the polls barely two weeks
before Sept. 30 parliamentary elections, the president has awakened interest
in the stalled investigation with pointed comments aimed at Russia.

Yushchenko stopped short of explicitly accusing Russian authorities in the
2004 assassination attempt. But his comments implied the dioxin that found
its way into his body originated in Russia, and that the Russian prosecutor
general’s office was protecting key Ukrainian suspects by ignoring
extradition requests.

Russia responded rapidly to Yushchenko’s comments, which were published
Wednesday in the French newspaper Le Figaro and The Times of London. In

an initial outburst, Viktor Chernomyrdin, the Russian ambassador to Ukraine,
told reporters in Kyiv that he was “really surprised” to hear Yushchenko’s

“Why should we investigate it?” Chernomyrdin said. “You sort it out
yourselves. You’re always looking for someone hindering you.”

But the following day, Moscow changed tack, announcing it would participate
in a joint investigation with Ukraine. Simultaneously, Russian media outlets
began publishing the names of the three main suspects in the case: Vladamir
Satsyuk, Taras Zalessky and Alexey Poletukha.

Satsyuk’s name has long been associated with the dioxin incident. It was
during a dinner at the former deputy Ukrainian Security Service chief’s
country home on Sept. 5, 2004, that Yushchenko first fell ill.

Yushchenko suffered sleeplessness and a severe headache that night and by
the next day new symptoms of pancreatitis and gastrointestinal pain arose.
Soon, he developed a facial rash, a condition later confirmed to indicate
severe dioxin poisoning.

It’s too early to say whether the week’s developments constitute a turning
point in a riddle that has long vexed Ukrainians. Or whether the resumption
of a long-stalled investigation will mitigate voter disappointment in
Yushchenko, who swept to power during the 2004 pro-democracy non-violent
uprising known as the Orange revolution.

“People just want to see justice done,” said Roman Shwed, a Kyiv-based radio
host. “And when Yushchenko was elected, he had the opportunity and the
mandate to unleash the greatest show trial of Ukraine history.

“But he disappointed. And that disappointment was emblematic of all the
other disappointments after the Orange revolution. Yushchenko spoke softly –
but he forgot to carry the big stick.”

Theories on why the investigation dragged on so long have helped sow doubts
over Yushchenko’s own party, one Western diplomat told the Star.

“Somebody has to go to jail for this and among the president’s many mistakes
is that nobody has yet paid the price. He had a country just waiting for
heads to roll.

“But the oligarchic side blocked him. Why? One imagines that they took him
aside and said, `Look, you are alive. You survived. So let it go. Because if
you pursue this to the end, we will expose the corruption in your camp,
too.’ “The reality in Ukraine is there are very few leaders around with nothing

to be embarrassed about.”

On the streets of Kyiv, not everyone expects answers.

Said one passerby, linguistics student Maxim Hovanchuk, 20: “The answer to
Yushchenko’s poisoned face is in the dark. It is not normal for a country
not to get answers. But for now, this is what passes for normal in Ukraine.
In this country, you don’t want to reach into the dark for answers. It can
hurt you.”

Retiree Mikhail Lazarev, on the other hand, ascribed the President’s
disfigurement to “the work of God. His Orange revolution was against the
scriptures and God made him pay for it.

“He entered a church strong as a bull three years ago and he came out with
his face on fire. That is how it happened.”

Others forgive Yushchenko for his government’s lack of investigative rigour
when it comes to the president’s own troubles. But they wonder about the
stalled investigations into other human rights violations in Ukraine, most
notably the unsolved Sept. 16, 2000, murder of investigative journalist
Gyorgy Gongadze.

Gongadze’s decapitated body was discovered in a forest near Kyiv and one
month later recordings emerged on which a voice resembling that of
then-president Leonid Kuchma was heard conspiring against the journalist.
The case galvanized Ukraine’s political opposition, helping build momentum
toward the Orange revolution.

Yushchenko himself staked claim to the Gongadze file upon taking office,
calling it “a matter of honour for me and my team.”

Three former Ukrainian interior ministry officers eventually were arrested
and charged with Gongadze’s murder. A trial was launched last year, but the
case has since been frozen, pending psychological evaluation of the

Ukraine’s handling of the case prompted the European Court of Human Rights
in 2005 to raise serious doubts about the investigation, ruling that
authorities were “more preoccupied with proving the lack of involvement of
high-level state officials than by discovering the truth.”

And even as Yushchenko was pointing a finger at Moscow, press freedom
watchdogs were pointing theirs at Yushchenko. The International Federation
of Journalists singled out the Ukrainian president for awarding a state
medal to former prosecutor general Mykhail Potebenko.

Gongadze is known to have appealed to Potebenko in the days prior to his
murder when he realized he was being followed, but the prosecutor ignored
his plea.

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

Associated Press (AP),  Kiev, Ukraine, Wed, September 19, 2007

KIEV – Ukraine has rejected a Russian proposal on how to determine the
origin of the poison that sickened President Viktor Yushchenko three years
ago, officials said Wednesday.

Yushchenko, who was a leader of the political opposition at the time, was
poisoned with dioxin during the 2004 presidential election campaign,
disfiguring his face.

No arrests have been made, but suspicions of Russian involvement
persist -both because Yushchenko was running against a Kremlin-backed
candidate and because Russia is one of four countries that produces the
specific formula of dioxin used against him.

Although the dioxin from all four countries is chemically identical,
differences in the manufacturing process yield various byproducts; testing
samples from each country for these byproducts could determine the origin of
the dioxin found in Yushchenko.

Three countries that produce this type of dioxin -U.K., Canada and the
U.S. -have submitted samples to Ukraine for testing, investigators say, but
Russia has refused. This month it offered to test samples of its dioxin in
Russia and report the results to Ukraine.

The Ukrainian Prosecutor General’s office rejected that offer this week, and
again asked Russia to let the test be conducted in Ukraine, a spokesman

“Under Ukrainian law, the tests will only be valid if they are conducted on
Ukrainian territory,” spokesman Yuriy Boychenko said.

Yushchenko has complained that Russia was stalling the investigation by
refusing to provide the dioxin samples and hand over key suspects. Ukrainian
authorities have not named any suspects, but Yushchenko has said the
suspects are hiding out in Russia.

On Wednesday, he said prosecutors would travel soon to Russia to meet

with their counterparts, a visit he said he hoped would solve the stalemate.

“Maybe in the course of that dialogue negotiations will be concluded
concerning the tests of dioxin which is produced in the Russian Federation
and holding accountable those people who are hiding in the Russian
Federation,” he told reporters.

The Kremlin strongly backed Yushchenko’s rival, Viktor Yanukovych, in the
bitterly contested 2004 presidential election, which deepened rifts between
Moscow and the West. Yanukovych was initially declared the winner. Massive
street protests -dubbed the Orange Revolution -broke out, and the Supreme
Court threw out the results on grounds of fraud. Yushchenko won a
court-ordered repeat vote.

Yushchenko has hinted that he knows those responsible for the poisoning.
While refraining from naming the alleged culprits until the investigation is
over, he has hinted that the poisoning could have been masterminded from
outside the country.

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

REUTERS, Kaniv, Ukraine, Wed, September 19, 2007

KANIV, Ukraine  – Ukraine’s president says he is pressing Kiev authorities
to solve a row over a building site which threatens to disqualify the city’s
main stadium from hosting the final of the 2012 European soccer

Viktor Yushchenko was speaking after UEFA president Michel Platini said
Kiev’s 84,000-seat Olympic stadium could not be used for Euro 2012, to be
held jointly with Poland, unless construction of a nearby shopping centre
was halted.

“I issued new instructions three days ago for Kiev city authorities to take
appropriate decisions on this matter in conjunction with the owners of the
site,” Yushchenko told Reuters in an interview late on Tuesday in central

“I met the owner and he said he was prepared to take a wrecker’s ball and
demolish the site if (international soccer officials) confirm that this is a
vital condition for the stadium to function.”

The site owner was also prepared, he said, to amend building plans
“including norms on the ground level concerning proper evacuation (of
fans)” — UEFA’s chief concern.

International soccer authorities have long warned that unless the
construction is stopped they will withdraw permission to hold matches

at the stadium.
Ukraine’s Interior Ministry this month, citing crowd control concerns,
limited ticket sales to 41,000 at Ukraine’s European 2008 qualifying match
against Italy.

In a letter last week to the head of Ukraine’s soccer federation, Platini
said blockage of exits and space limitations meant the stadium “clearly
cannot host matches for Euro 2012. We therefore hope and believe that the
appropriate state bodies in Ukraine will adopt the necessary decisions

Yushchenko, who played a key role in Ukraine and Poland winning the right
earlier this year to host Euro 2012, has issued a decree ordering the
dismantling of the building site. Four Ukrainian cities are to host
matches — Dipropetrovsk, Donetsk, Kiev and Lviv.

Ukraine and Poland, both ex-communist countries, face huge logistical tasks
in upgrading transport and communication links and building hotels.

In his comments to Reuters, Yushchenko renewed criticism of the early
organisation. He has already accused the government, led by his arch rival
Viktor Yanukovich, of failing to take preparations seriously.

“Many things that were supposed to have been completed by the organising
committee have not been implemented,” he said. “I have sent several letters
warning the organising committee to change its approach towards the
construction timetable.”

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

Friends of the U.S.-Ukraine Foundation (USUF)
Washington, D.C. Thursday, September 20, 2007

WASHINGTON – Since 2000, the U.S. Congress has directed the U.S.

Agency for International Development (USAID) to support the U.S.-
Ukraine Foundation.

In Fiscal Year 2007, the U.S. Senate directed USAID to fund the U.S.-Ukraine
Foundation at the $10 million level.  USAID’s response has been to cut off
all funding to USUF!

WHAT CAN YOU DO?  Call or fax Representatives Nita Lowey (D-NY)

and Frank Wolf (R-VA) Today!

Representative Nita Lowey (D-NY) – (202) 225-6506 – FAX:  202-225-0546
Representative Frank Wolf (R-VA) – (202) 225-5136 – FAX:  202-225-0437

Ask Representatives Lowey and Wolf to exercise their authority to restore
funding to the U.S.-Ukraine Foundation on the Continuing Resolution, so the
Foundation can continue its invaluable work in helping develop civil and
democratic society in Ukraine, a critically-important country to U.S.
foreign policy interests.

Representative Lowey is the Chairman of the House Appropriations
Subcommittee on State, Foreign Operations, and Related Programs, and
Representative Wolf is the Ranking Member of the House Appropriations
Subcommittee on State, Foreign Operations and Related Programs.

There is troubling news coming out of Washington these days –
and not just surrounding the war in Iraq.

EDITORIAL: The Ukrainian Weekly newspaper
Ukrainian National Association (UNA)
Parsippany, New Jersey, Sunday, September 16, 2007

Recently we learned that the U.S. Agency for International Development
(USAID) has refused to fund the U.S.-Ukraine Foundation, known to our
community and to Ukraine as one of the most effective non-governmental
organizations helping transform Ukraine from a post-Soviet society into a
democratic and transparent state governed by the rule of law and served by
accountable public officials.

That the Bush administration does not see the folly of this refusal is,
frankly, beyond belief. The U.S.-Ukraine Foundation has an excellent track
record – one that may be second to none in helping Ukraine by working with
what the foundation likes to call its “democratic modernizers.”

In the early 1990s, USUF was the first U.S. organization to provide hands-on
technical assistance to fledgling democrats involved in local government and
non-governmental institutions.

Some of these democrats of newly independent Ukraine received on-the-job
training in Ukraine; others were bought to the United States to learn from
counterparts in this country.

The successes have been many during USUF’s 15 years of work. O.P. Popov, a
“graduate” of USUF’s programs who today is Ukraine’s minister of housing and
communal services, recently wrote to Rep. Nita Lowey, chair of the House
Subcommittee on States, Foreign Operations and Related Programs, urging her
to support funding for the foundation so that it could “continue its
significant contributions not only to the development of local democracy in
Ukraine, but also . to the strengthening of relationships between our
countries both at the national level and at the level of people diplomacy.”

Another beneficiary of the USUF’s programs, Tymofiy Motrenko, who heads

the Main Department of the Civil Service of Ukraine and has been tasked with
reforming the public administration system, also provided a very positive
assessment of USUF programs.

In fact, he suggested to Rep. Lowey that a new program “focused on the top
300 or so Ukrainian civil servants who will develop the mindset and skills
to become the agents of change in their areas of responsibility” would
“provide maximum benefits.”

Clearly, there is much more that the U.S.-Ukraine Foundation can do in the
area of democratic institution-building in Ukraine. The key, of course, is
more funding – not a halt in funding.

Indeed, just last year, the U.S. Senate’s Committee on Appropriations
reported: “The committee is aware of the work of the U.S.-Ukraine
Foundation, and commends the foundation for its support of democracy

and the rule of law in Ukraine.

The committee directs USAID to continue to support the foundation’s
activities . The committee expects funding levels to exceed those of prior
years.” The counterpart committee in the House of Representatives expressed
similar sentiments.

So why has USAID decided to simply refuse funding for USUF? And why

are the wishes of the U.S. Congress being disregarded?

Is Ukraine no longer to be considered a strategic partner of the U.S.? These
are questions that must be answered, questions for which the administration
must be held accountable.

We strongly support the valuable work of the U.S-Ukraine Foundation and we
urge the Congress to demand that its recommendations with regard to aid
programs for Ukraine be followed.

Furthermore, we demand that the Bush administration back up its fine words
regarding U.S.-Ukraine relations and democracy-building in general with the
bucks required.

The Ukrainian Weekly, Roma Hadzewycz, Editor-in-chief, Parsippany,
N.J..  The Ukrainian Weekly Archive,
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
A concert series for 2007 by the Ukrainian Bandurist Chorus

Anatoli Murha, Ukrainian Bandurist Chorus (UBC)
Detroit, Michigan, Thursday, September 20, 2007
DETROIT – The all-male Ukrainian Bandurist Chorus (UBC), under
Artistic Director and Conductor Oleh Mahlay, announces its 2007
concert series Bandura – The Soul of Ukraine.  In October, the UBC
will embark on 10-day tour of the eastern United States and Canada.

Bandura – The Soul of Ukraine will tell a many centuries story about
cultural identity, survival and mystery. Because its development
closely reflects the history of the Ukrainian nation, the bandura, a
60-stringed instrument, is more than a national musical instrument: It
is the voice of Ukraine.

This inspiration has been a guiding force for the Ukrainian Bandurist
Chorus since its inception in Kyiv, Ukraine in 1918. As ambassadors
of Ukrainian music and culture for over 89 years, the UBC continues
to tell the story of truth, freedom, and human dignity heralded through

This year also marks the 100th anniversary of Hryhory Kytasty’s birth.
Hryhory Kytasty (1907-1984), the long-standing conductor of the UBC,
was a driving force in re-instilling Ukrainian choral and bandura art
in North America. Considered a legend in his own time, this composer,
conductor, performer, and teacher was a role model and inspiration to
young bandura players.

Friday, October 19 – Detroit
Saturday, October 20 – Cleveland
Sunday, October 21 – Washington DC
Monday, October 22 – Philadelphia
Tuesday, October 23 – Whippany, New Jersey
Thursday, October 25 – Hartford
Friday, October 26 – Montreal
Saturday, October 27 – Ottawa
Sunday, October 28 – Toronto

Friday, October 19 – 7:30pm; DETROIT
The Music Box at the Max M. Fisher Music Center
3711 Woodward Avenue — Detroit, MI 48201
Tickets and more information:
Max M. Fisher Music Center Box Office; 313.576.5111
Sponsored by: Ukrainian Future Credit Union and Ukrainian

Selfreliance Michigan Federal Credit Union
Members of Ukrainian Future Credit Union and Ukrainian Selfreliance
Michigan Federal Credit Union receive special discounted tickets,
please call Future (586.757.1980) or Selfreliance (586.756.3300) for
more details.

Saturday, October 20 – 7:00pm; CLEVELAND
United Methodist Church of Berea
170 Seminary Street — Berea, OH 44017
Tickets and more information:
Baldwin Wallace Academic and Cultural Events Series
440.826.2157; This concert is presented by the Baldwin Wallace

College World Music Series

Sunday, October 21 – 6:00pm; WASHINGTON DC
Sandy Spring Friends School
16923 Norwood Road — Sandy Spring, MD 20860
Tickets and more information: 240.353.7364

Monday, October 22 – 7:00pm: PHILADELPHIA
Ukrainian Educational & Cultural Center
700 Cedar Road — Jenkintown, PA 19046
Tickets and more information:
Ukrainian Educational & Cultural Center

Tuesday, October 23 – 7:00pm: WHIPPANY
Ukrainian American Cultural Center of New Jersey (UACCNJ)
60 North Jefferson Road — Whippany, NJ 07981
Tickets and more information:
UACCNJ – 973.585.7175; General – 917.559.8629

Thursday, October 25 – 7:00pm: HARTFORD
Theater of the Performing Arts
359 Washington Street — Hartford, CT 06106
Tickets and more information: Theater of the Performing Arts
Box Office 860.757.6388

Friday, October 26 – 7:00pm: MONTREAL
Dim Molodi; 3260, rue Beaubien Est – Montreal, Quebec
Tickets and more information:
Caisse populaire Desjardins Ukrainienne de Montreal

Saturday, October 27 – 7:30pm ; OTTAWA
Centre Bronson Centre; 211 Bronson Avenue , Ottawa,

ON K1R 6H5; Tickets and more information: Borys SIRSKYJ
613.726.1468; Lydia REPLANSKY, 613.738.0849

Sunday, October 28 – 2:00pm: TORONTO
Ryerson Theatre, 43 Gerrard Street East — Toronto, ON

Tickets Available at Branches of Ukrainian Credit Union
For more information about the concert, post concert VIP Reception,
and Group Sales rate, please call: 905.467.8238 or;
The Ukrainian Bandurist Chorus, Enchanting the world since 1918

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

PinchukArtCentre, Kyiv, Ukraine, Thursday, September 20, 2007

KYIV – Now entering its second year as Ukraine’s leading art institution,
PinchukArtCentre is pleased to announce the opening of its new

‘REFLECTION’ exhibition that will display the PinchukArtCentre’s recent

From October 6 to December 30, visitors to PinchukArtCentre will be able to
see paintings, sculptures, photographs and videos created by the leading
artists of the 21st century including Antony Gormley, Andreas Gursky, Damien
Hirst, Christian Marclay, Sarah Morris, Marc Quinn, Sam Taylor-Wood, Piotr
Uklanski, Gabriel Orozco, Jeff Koons, Takashi Murakami, Peter Doig, Richard
Phillips, Vasyl Tsagolov, Serhiy Bratkov, Arsen Savadov, Oleg Tistol, lllya
Chichkan & “Blue Noses”.

The title of the exhibition plays on the human contemplation of art as an
infinite and inexhaustible source of intellectual inspiration and sensory
exploration. ‘Reflection’ can be seen as an introspective and reflective
journey through contemporary art.

The common theme of the various art works displayed at the exhibition is

to explore the fundamental issues facing human existence – life, death,
science, religion, love, immortality and art itself.

REFLECTION exhibition in PinchukArtCentre will be open for visitors from
October 6 to December 30, 2007.  The opening times are from Tuesday to
Sunday from noon to 9:00 pm. Admission is free.

PinchukArtCentre (Kyiv, Ukraine) is one of the largest centers for
contemporary art in Eastern Europe. Its key activities include arranging
exhibitions, seminars, work-shops, providing support to cultural projects,
etc. More than 145,000 thousand people have visited PinchukArtCentre

since it was opened in September 2006.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
When its last commander died this week, Ukraine’s shadowy insurgent
army received something rare: public recognition. Lubomyr Luciuk
explains how national heroes became strangers in their own land

By Lubomyr Luciuk, The Glove and Mail,
Toronto, Ontario, Canada, September 15, 2007

Clearing rubble in her farmyard, high in the Carpathian Mountains of
western Ukraine, Hanna Kishchuk hit something hard with her hoe. She had
snagged two glass jars. The contents of one were decayed, but the other
held 216 photo negatives.

Peering at the images, which showed men and some women in uniform,
Hanna’s son, Petro, caught sight of a familiar insignia, the Ukrainian
tryzub or trident, which he knew from stories he had heard as a child
was the insignia of the Ukrainska Povstanska Armiia (UPA), the fabled
Ukrainian insurgent army.

The Kishchuks knew their farm once belonged to a man who disappeared
after the Soviets discovered he was a Ukrainian nationalist and whose
wife was later deported never to return. Could these be long-lost photos
of the shadowy guerrilla force that fought for national independence
until it was wiped out more than 50 years ago?

This week, thousands of mourners paid their final respects to the UPA’s
last commander, Vasyl Kuk, who died Sunday at the age of 94. Mr. Kuk,
who was captured in 1954, sentenced to death and jailed for years before
being released, was described by President Viktor Yushchenko on Tuesday
as the “personification of the Ukrainian idea.”

Such official praise is a relatively recent development, considering
that not so long ago the mere mention of the rebellious UPA was a major
faux pas in a land emerging from decades behind the Iron Curtain.

To many Ukrainians, the guerrillas were just what their communist rulers
once called them: fascist collaborators, bandits and war criminals. To
the rest of the world, they were all but unknown.

But Petro Kishchuk had grown up hearing the other side of the story –
how the UPA had fought the Nazi invaders and then the Soviets; how, at
its height, it may have had 100,000 people bearing arms.

Honeycombing the countryside with bunkers, many of them still in place,
the partisans became so adept at guerilla warfare that Soviet military
instructors reportedly taught their North Vietnamese allies both UPA’s
techniques and the methods they had used to liquidate them. Many of
those anti-insurgent tactics are still used in Iraq and Chechnya.

It turned out that the photos in the jars unearthed by Petro’s mother
were of UPA Company No. 67, which operated along the border of Ukraine
and Romania. Finding them 50 years later was remarkable, but perhaps
even more surprising was the fact the pictures were taken in the first
place. UPA regulations generally prohibited photography – clearly the
soldiers and their civilian supporters faced grave risk should their
likenesses be captured.

Why were the rules broken? No one knows, but it seems certain that those
who buried the jars knew their struggle was drawing to an end and wanted
to preserve evidence of who they were and what they were fighting for.

Most of the people in these photographs died in combat or were missing
in action. Anyone captured was interrogated and then either executed or
exiled to the Soviet gulag. Those fortunate enough to survive internment
were prohibited from returning home or speaking about their insurgent
experiences, at least until the Soviet Union’s collapse.

Their story begins in September, 1939, with the violent dismemberment of
Poland by Nazi Germany, assisted by the Soviet Union. Western Ukraine
had been in Polish hands, but was incorporated into the Ukrainian Soviet
Socialist Republic through a staged plebiscite, even as a relentless
persecution of anyone – Ukrainian, Pole or Jew – considered an enemy of
the Stalinist regime was launched. Deportations and mass murder
continued until Adolf Hitler turned against his Soviet ally on June 22,

To the Nazis, most Ukrainians were Untermenschen (subhumans) and their
country a future Lebensraum (living space) for an Aryan master race.
They herded Ukrainian patriots into concentration camps, despoiled the
country’s resources and press-ganged millions into slave labour in the
Third Reich. Ukraine suffered greater civilian losses than any other
nation in Nazi-occupied Europe, a fact obfuscated by those who still
refer to “20 million Soviet war dead,” or even more disingenuously, to
“20 million Russians” lost in a “Great Patriotic War.”

By October, 1942, the UPA had emerged as a national liberation army.
After the war, its armed struggle would be reduced, finally, but only
after the Soviet secret police and collaborators had brutally
depopulated western Ukraine, destroying the insurgents’ civilian support
networks, and hunted down the last fighters, a campaign that lasted more
than a decade.

A study by Jeffrey Burds, a professor of Soviet history at Northeastern
University, underscores the intensity of the battle for Ukraine after
the Germans had been defeated. From February, 1944, to May, 1946, Soviet
troops killed 110,825 UPA “bandits” and captured 250,676 more. As late
as February, 1947, UPA “remnants” were still holding off nearly 70,000
crack troops.

The fighting took place in an area slightly larger than New Brunswick
and the nationalists suffered a heavy blow on March 5, 1950, when Mr.
Kuk’s mentor and predecessor as commander, General Roman Shukhevych,
was killed.

Whether the UPA stood any chance of success is debatable. Certainly, its
soldiers believed they would prevail – their oath was “Attain a
Ukrainian state or die in battle for it.” And Soviet imperialism, they
hoped, would be contained, even rolled back, by the West. But they got
no significant outside help. Indeed, they were betrayed by British
traitors like Kim Philby, who alerted his Soviet masters to what few
American and British efforts were made to aid the Ukrainian insurgency.

Eventually those who survived the years of armed struggle were ordered
to demobilize, go back to civilian life and remain in deep cover. There
they suffered a further indignity – hearing others speak well of their
struggle for Ukraine’s independence, but only out of earshot of the
regime’s men

Today, 16 years after Ukraine re-emerged from the Soviet Union, the
image of the UPA remains contested. People who served in the state by
ferreting out nationalists receive pensions, but no such benefits are
accorded their prey. Just as UPA veterans such as Mr. Kuk strived to
overcome the lingering propaganda, there are still those who continue to
recite it, because it masks their own complicity.

This situation will not last. For more than a decade, ordinary
Ukrainians have taken it upon themselves to honour their partisans.

Those best placed to know what the UPA represented – family members,
neighbours and descendents – have erected dozens of memorials across the
country to those who resisted foreign occupation.

And stories continue to be told about UPA heroes like one of the men in
these pictures.

Khmara (Cloud) was the nom de guerre of Company 67’s leader, Dmytro
Bilinchuk, who took up arms in 1941 after the Soviets deported his
family to Siberia. He stayed underground when the Germans invaded and
was captured by the Gestapo the following year. However, he was soon
rescued while being transported to a prison in Kolomyia and returned to
the forests for 10 more years on the run.

Finally, in 1952, he was betrayed and again taken prisoner. After being
interrogated in the infamous Lukianivka prison, he was shot on June 24,
1953. It was 46 years to the day later that Hanna Kishchuk hit something
with her hoe.

Khmara’s executioners probably thought they could erase the memory of
the Ukrainian liberation movement from the annals of history. By
consigning their images to the soil they were fighting for, the members
of Company No. 67 proved them wrong.
Lubomyr Luciuk is a professor of geography at the Royal Military College
of Canada. This article is adapted from Their Just War: Images of the
Ukrainian Insurgent Army (Kashtan Press, 2007), co-written with Vasyl
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


Victoria Ruan, Dow Jones Newswires, Beijing, China, Sep 19, 2007

BEIJING – China Aviation Industry Corp. II, or AVIC II, and Antonov
Aeronautical Scientific/Technical Complex of the Ukraine Wednesday

signed a framework agreement to jointly build an aircraft engineering
center in China.

AVIC II’s unit Shaanxi Aircraft Industry (Group) Co., or Shanfei, and
Antonov will jointly invest in the center, the two companies said in a
statement, without disclosing the financial terms of the agreement. The
construction of the center will be completed by the end of December, said
the statement.

The engineering center will design new transport aircraft, update aircraft
models, and improve the technologies used by the existing aircraft in China,
the statement said.

Shanfei started its technological cooperation with Antonov in 2004. The two
companies cooperated in designing and manufacturing AVIC II’s new

commercial freighter, the Y8-F600, the statement said.

AVIC II is a state-run commercial and military aircraft maker, which owns
several units listed in mainland China and Hong Kong.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Rebecca Bream, Financial Times, London, UK, Sat, Sep 15 2007

Regal Petroleum, the Aim-listed oil and gas group founded by Frank Timis,
yesterday unveiled a long-awaited deal to develop its Ukrainian gas fields.

Regal said it had signed a memorandum of understanding with MND
Exploration and Production, a private Czech oil company, that would
involve MND receiving a 50 per cent stake of Regal’s Ukrainian gas assets
in return for a commitment to spend $330m (£163m) on their development.

Regal’s shares rose to 250p over the summer as market speculation suggested
that Royal Dutch Shell or JKX Oil & Gas were keen to take on the
Mekhediviska-Golotvschinska and Svyrydivskegas fields, Regal’s main assets.
But following news of the agreement with MND yesterday the stock closed
down 14p at 217p.

Frank Scolaro, Regal’s chairman, said the market had not fully appreciated
the merits of the agreement with MND. “The development of these assets is
now fully funded, Regal not only doesn’t have to put a penny into the
assets, but it can take money out.”

He said MND had agreed to pay Regal about $25m cash on top of the pledge
to spend $330m on developing the two gas fields, which would boost Regal’s
cash balance to $35m.

Mr Scolaro said there had been five companies interested in developing the
fields, including Shell, but that talks with Shell had broken down because
it wanted a much bigger equity stake in the projects.

Regal hopes to produce 40,000 barrels of oil equivalent per day (boepd) from
the two Ukrainian gas fields by early next decade, up from the current 1,200

Last year, Regal’s Ukrainian assets were at the centre of a court battle
with its former joint venture partner CNGG, a Ukrainian government agency.

CNGG challenged the legality of Regal’s gas production licences and last
year Mr Scolaro hired Dmytro Gelfendbeyn, a Ukrainian consultant, to help
win the case. Mr Scolaro agreed to convert an investment of $100,000 from
Alberry Limited, a BVI-registered company run by Mr Gelfendbeyn, into
$50.9m of Regal shares if the case was settled in Regal’s favour.

In December the Ukrainian Supreme Court dismissed CNGG’s claims. Earlier it
had emerged that Alberry Limited was in fact largely owned by CNGG, along
with NAK Nadra, a Ukrainian state oil company. Mr Scolaro said yesterday
that Alberry Limited was “happy” with the MND deal.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


Ukrainian News Agency, Kyiv, Ukraine, Wednesday, September 19, 2007

KYIV – The Secretary of the National Security and Defense Council Ivan
Pliusch has requested Prosecutor General Oleksandr Medvedko to investigate
the area of VAT administering and refunding and take measures if violations
are found. NSDC Deputy Secretary Andrii Pyshnyi made this statement to the

Despite the December 2006 decision of the council on the need to improve

VAT administering and refunding, enacted by a presidential decree of
December 28, 2006, the situation in this area is no better, Pyshnyi reported.

‘The ministries and agencies that were supposed to deal with this task did
not cope with it. The NSDC secretary is asking the Prosecutor General’s
Office to apply measures of prosecutor’s influence,’ he said.

Pyshnyi added that back VAT refunds amounted to UAH 7.2 billion as of
December 2006 and increased to UAH 8.07 billion by August 1, 2007. ‘To
their record high in the past four years,’ he said.

Pyshnyi is perplexed by the government denial to send data about debts on
VAT refunds to the President’s Secretariat and the NSDC.

‘Information on unrefunded VAT is not available to NSDC experts at the
moment, it is not provided to the Secretariat and the NSDC,’ he said.
Pyshnyi would like the government to publish this information on a regular

As Ukrainian News earlier reported, according to the Accounting Chamber
report, the amount of value-added tax that the government failed to refund
to taxpayers increased by 15.5% to UAH 7.803 billion in the January-June
period of this year.

FOOTNOTE:  U.S. companies are owed hundreds of millions of dollars
in VAT tax refunds by the Ukrainian government.  This is a very serious
problem and the present government of Ukraine just does not do anything
about it except to continue this corrupt practice.  This is a real impediment
to additional international investment coming into Ukraine.  AUR Editor.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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return to index [Action Ukraine Report (AUR) Monitoring Service]

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