Monday, May 31, 2010

Gazprom, Naftogaz Ukrainy May Seek Joint Venture

MOSCOW, Russia -- Gazprom and its second-largest foreign customer, state-run energy company Naftogaz Ukrainy, agreed Friday that they could move toward a complete merger after they create a joint venture, Gazprom said in a statement.


A merger of the companies, proposed by Prime Minister Vladimir Putin last month, has raised questions because Naftogaz was just 6 percent the size of Gazprom in terms of sales last year.

Ukrainian President Viktor Yanukovych later said a merger would have to be on parity terms.

After talks Friday, Gazprom chief Alexei Miller and Ukraine's fuel and energy minister, Yuri Boiko, suggested that a 50-50 venture could be a “first step” in the eventual unification of the companies, the Gazprom statement said.

“The parties agreed that the process could be gradual,” Gazprom said.

At this point, the companies need to determine what assets they want to contribute to the joint venture, Miller said in the statement.

Separately on Friday, Energy Minister Sergei Shmatko told reporters that Russia hoped the companies would do their best to complete the talks on possible scenarios for the merger “as soon as possible.”

Naftogaz obviously could offer its sprawling pipelines, or a portion of them, said Alexander Nazarov, a gas industry analyst at investment company Metropol.

Gazprom could give the joint venture partial ownership of the gas fields that it is developing, Nazarov said, adding that a full unification was out of the question.

“Most likely, a joint venture is all that the proponents of a merger can count on,” he said in a note to investors.

Gazprom has a market capitalization of more than $120 billion, and with sales of $98.5 billion in 2009, it is also the world's largest gas producer.

Naftogaz, which is not publicly traded, reported sales of $5.75 billion for last year.

The proposal to merge the companies appeared after Putin said Russia cooled off to the idea of leasing Ukraine's pipelines in a consortium with Naftogaz and European Union energy companies to run and maintain the network.

Yanukovych resurrected the plan, which his predecessor, Viktor Yushchenko, ditched in the early 2000s.

Gazprom initially wanted a say in running the Ukrainian pipelines to ensure the immunity of its Europe-bound transit to politically tinged pricing disputes.

It said it would pay to upgrade the worsening lines.

The Russian gas export monopoly is interested in the merger now more for the sales on Ukraine's giant market than because of transit, energy industry expert Bohdan Sokolovsky, who advised Yushchenko, said earlier this month.

Gazprom sold 27 billion cubic meters of gas to Ukraine last year, an amount second only to the deliveries to Germany, which — according to Gazprom data released last month — were 33.5 bcm.

The European Union is prepared to consider a consortium to run the Ukrainian pipelines, Fernando Valenzuela, head of the bloc's office in Russia, said Friday.

If the issue makes it to the negotiating table, “the European Union will study all the proposals and state its position,” he said, Interfax reported.

European Energy Commissioner Guenther Oettinger said earlier this month that a decision "has to be made between Kiev and Moscow, and not in Brussels."

Source: The Moscow Times

Sunday, May 30, 2010

$100 Million 'Scareware' CEO Was Already A Fugitive

SAN FRANCISCO, USA -- The CEO of a company accused of making more than US$100 million selling harmful "scareware" antivirus products was already a fugitive from U.S. authorities, following his arrest in 2008 on criminal counterfeiting charges.

A window from a fake virus cleaning program designed to extract money from unsuspecting computer users.

Shaileshkumar "Sam" Jain is one of three men who were charged by the U.S. Department of Justice on Wednesday for allegedly operating a massive scareware distribution ring.

He's now thought to reside in Ukraine, but arrived there only after giving authorities the slip after being arrested by federal agents in 2008 on charges that his company sold counterfeit versions of Symantec antivirus products.

Jain has been considered a fugitive by U.S. authorities since early 2009, when he skipped out on a $250,000 bond and failed to show up for a Jan. 12 California court appearance.

Jain ran a Ukrainian company called Innovative Marketing, which prosecutors say sold an astounding 1 million copies of fake antivirus products such as WinFixer, Antivirus 2008 and VirusRemover 2008.

According to court filings, Innovative Marketing was one of several companies that Jain operated, first selling counterfeit Symantec products and later moving into the scareware business with products such as WinFixer.

Symantec had already gone after Jain in the courts, winning a $3.1 million judgment against him in 2005.

Three years later, the U.S. Federal Trade Commission filed suit against Jain and the two other men charged Wednesday: Innovative Marketing Chief Technology Officer Bjorn Daniel Sundin and the man whose call center provided technical support for the products, James Reno of Amelia, Ohio.

The FTC won its court case, effectively putting Innovative Marketing and Reno's company, Byte Hosting Internet Services, out of business.

The scareware products that the three men are accused of selling are perhaps the most annoying problems on the Internet, and a constant source of complaints to security companies and federal regulators.

They not only fail to protect computers, they often also bog down systems with spyware and malware.

Innovative Marketing allegedly pioneered the trade.

The company would set up fake advertising agencies with names such as BurnAds and NetMediaGroup, and then buy online advertising, pretending that it was for legitimate buyers, prosecutors say. These ads would be programmed to deliver scary-looking pop-up windows straight to users' desktops.

The windows would typically look like Windows error messages or security alerts. To dismiss them, the victim would have to pull out a credit card and pay between $30 and $70 to buy Innovative Marketing's dubious products, prosecutors say.

Before the scareware came the fake Symantec software. Prosecutors allege that in 2003 and 2004, Jain operated a handful of Web sites -- Discountbob.com, shopenter.com, winantivirus.com and others -- that all sold fake Symantec products.

Jain allegedly drummed up new business by spamming victims or using pop-up ads to flog the fake software, which was then mailed out by someone identified in court documents as "J.R." of Amelia, Ohio -- presumably James Reno.

In a September 2009 e-mail to the IDG News Service, Reno said he was a young and naïve businessmen who was taken advantage of by Innovative Marketing. "I made some mistakes, of course," he said, "however they kept us in the dark on a lot of their operation."

Profits from the businesses -- which took in more than $100 million from victims in 60 countries -- were funneled offshore, prosecutors say.

That estimate is probably on the low side, said Joseph Bochner, an attorney who brought a class-action suit against Jain and his business partners in 2006.

Bochner says he tried for years to get federal authorities interested in his case, but without success. If they responded at all to his offers to share information, they told him the case was not a criminal matter, he said. "I'm extremely pleased to see the DoJ finally taking action in this case," Bochner said.

The harm these products cause consumers is immeasurable, he said. "What they're doing is charging you money for a program that doesn't work, on false pretenses, and then destroying your computer in the bargain."

Still, the U.S. authorities have none of the accused in custody. While Jain is believed to be in Ukraine, Sundin is in Sweden, the DoJ says, and Reno is expected to turn himself in "at a later date."

In a move that might help U.S. authorities prosecute their case overseas, the Department of Justice quietly filed international money laundering charges against Jain in federal court in New York last week. The charges allege that Jain moved millions of dollars overseas in an effort to conceal the source of the money he made from his counterfeit Symantec software sales.

Source: PC World

Saturday, May 29, 2010

Vitali Klitschko KOs Sosnowski, Keeps Title

GELSENKIRCHEN, Germany - Vitali Klitschko of Ukraine defended his WBC heavyweight championship belt Saturday night with a 10th-round knockout of Albert Sosnowski of Poland.

WBC world champion Vitali Klitschko of the Ukraine, right, punches challenger Albert Sosnowski of Poland during their WBC heavyweight world title boxing fight at the Veltins-Arena soccer stadium in Gelsenkirchen, western Germany, on Saturday, May 29, 2010.

Klitschko improved his record to 42-2 (38 KOs) after the ring referee called the 12-round bout following a left-right combination to Sosnowski's head at the 2 minute, 30 second mark of the 10th round.

The Warsaw native, looking to become the first Polish heavyweight world champion, was gradually worn down by the taller and heavier Klitschko and dropped to 45-2-2 (27 KOs).

"I am very happy to have defended my title. I had really good preparation and was in top form," said the 38-year-old Klitschko, who had his brother, IBF and WBO world heavyweight champion Wladimir, in his corner.

"I saw that he is still young and made some mistakes and I took advantage of them."

The 31-year-old Sosnowski called Klitschko "a great fighter."

"I gave everything I had today," he said. "But he kept pressuring me and I was tired. I could have kept boxing but in the next round I would have lost probably."

Klitschko said afterward that he would like to fight either WBA title holder David Haye or Nikolai Valuev.

The location of the fight had special meaning for Klitschko as it took place at the Veltins Arena in Gelsenkirchen, home of the German Bundesliga football club Schalke, of which Klitschko has been a member since 2001.

The former European champion Sosnowski worked hard the first two rounds to keep Klitschko from attempting his right and relying on his left.

The Pole could not land many shots to the body of the champion, who had about 5 inches and 20 pounds on Sosnowski.

The challenger had a strong third round with three decent connections with the left to Klitschko's head.

Klitschko began beating down Sosnowski in the fifth round with three strong lefts to the head. And the Pole had his first bloody nose after five rounds.

Sosnowski stumbled for the first time in the sixth after a left hook by Klitschko, though the challenger was able to land a powerful left a round later.

The champion took over in the ninth with a combination and a big right to the head before finally landing the finishing left-right flurry.

Source: AP

Wolf-Dog Hybrid To Fight Crime In Ukraine

LUHANSK, Ukraine -- The Luhansk canine police section is using wolves along with dogs to fight crime.

A police officer with the breeding pair.

Steppe gray wolf Akella has been living in the police canine section for over a year, after local police took him in as month-old cub.

Akella lives side by side with a female German shepherd, and Luhansk police hope this pair will produce a new breed of talented sniffer dog.

Canine section director Andriy Pohorily says that such cross breeding has already been done in Russia and the results are very promising.

"These crossed breeds have a better sense of smell, they track much better. They are very strong" Pohorily says.

The Luhansk police department relies on their canine unit, with about 2,000 crimes solved with the help of police dogs last year.

Currently the department is preparing crime-fighting dogs for the EURO 2012 soccer championship that Ukraine is hosting together with Poland.

The dogs are used to search for explosives, drugs, and tracking.

"These dogs are real crime fighters" Pohorily says.

Source: Radio Free Europe

Ukraine Ends Counterintelligence Work On Russian FSB Officials - Newspaper

KIEV, Ukraine -- Ukrainian counterintelligence services have stopped monitoring Russian Security Service (FSB) officials stationed in Ukraine, a Ukrainian weekly paper said on Saturday.


Relations between Russia and Ukraine have dramatically improved since President Viktor Yanukovych was elected in February on a platform to roll back the pro-Western policies of his predecessor, Viktor Yushchenko, and heal damaged ties with Moscow.

"As a gesture of goodwill and to demonstrate new policies, the counterintelligence department ended all work on Russian security services in Ukraine," Zerkalo Nedeli said.

The Ukrainian security services have so far not made an official comment on this report.

A cooperation agreement was signed by the heads of the Ukrainian and Russian Security Services on May 19.

The agreement includes a decision to return Russian security service officials to Crimea, where Russia has a naval base. The Russian security services were ordered to leave the territory at the end of 2009.

Source: RIA Novosti

Friday, May 28, 2010

Russian Giant Eyes Ukraine Joint Venture

MOSCOW, Russia -- Russian energy giant Gazprom yesterday proposed creating a 50-50 joint venture with Ukraine's state gas firm Naftogaz, calling it a possible first step towards a merger of the companies.

Gazprom's Alexei Miller

This came a month after Russian Prime Minister Vladimir Putin floated the merger idea, angering critics in Ukraine who said it would amount to a takeover of Naftogaz by the much larger Gazprom.

Gazprom chief executive Alexei Miller suggested the idea after meeting Ukrainian Energy and Fuel Minister Yury Boiko in Moscow, the company said.

They "agreed this process should come in stages," Gazprom said.

"The first step could be the creation of a joint venture on an equal, 50-50 basis," Miller said in a statement.

"Now it is necessary to determine the list of assets which could be given to the joint venture from both sides," Miller added.

Moscow and Kiev have moved forward with deals since Ukraine's new, Kremlin-friendly President Viktor Yanukovych was inaugurated in February, replacing the staunchly pro-Western Viktor Yushchenko.

Ukraine's pro-Western opposition has expressed fear that Yanukovych will hand over the country's prize assets to its giant neighbour and Soviet-era master Russia as he seeks to pull Ukraine out of a deep recession.

Source: Gulf Daily News

UEFA Calls For Ukraine To Step Up Preparations For Euro 2012

KIEV, Ukraine -- UEFA has expressed its concern over Ukraine's sluggish preparations for the 2012 European Football Championship, the head of the UEFA organizing committee in Ukraine said on Thursday.


"UEFA believes the new [Ukrainian] government is working hard, but the implementation of preparing for the championship is continuing amid complicated and critical circumstances because much time had been lost," Markiyan Lubkivskyi was quoted as saying by the committee's press service.

It is "critically important" that the Ukrainian government demonstrates "significant progress" in preparations for the tournament in the near future, he said.

Ukraine's readiness to hold the 2012 tournament, which it is to share with Poland, has been a constant source of concern for UEFA.

Earlier, UEFA President Michel Platini warned that Ukraine could lose its right to host the championship due to the slow pace of stadium construction in the capital, Kiev, where part of the Euro 2012 matches are to take place.

Kiev is one of the four Ukrainian cities to host half of the championship's matches. Kharkov, Lvov and Donetsk are the other three. The other half of the matches will take place in the Polish capital, Warsaw, and in the cities of Poznan, Wroclaw, and Gdansk.

Besides the more rapid construction of sports facilities, UEFA has required Ukraine to improve its roads, assure sufficient accommodations for tournament guests and the proper operation of airports.

The former Soviet state's economy was badly hit by the global recession, which was aggravated in Ukraine by continuous political infighting under former President Viktor Yushchenko. Ukraine's gross domestic product fell 15%, year-on-year, in 2009, according to the country's top statistics body.

Bickering between Yushchenko and the then-prime minister, Yulia Tymoshenko, also took its toll on the Euro 2012 preparations, as the president refused to pay for infrastructure construction out of national reserves.

Viktor Yanukovych, who took over as Ukrainian president in February, has pledged to prove the country's right to host the tournament. He called for foreign investors to help Ukraine meet UEFA's demands, condemning the former government's plans to hold the tournament without attracting funds from abroad.

Yanukovych has headed a special advisory committee to brace the country up for Euro 2012. The committee consists of senior government officials, including Prime Minister Mykola Azarov, Foreign Minister Kostyantyn Hryshchenko and Interior Minister Anatoliy Mohilev.

Source: RIA Novosti

Indian-Origin Man Charged With Internet Fraud In US

CHICAGO, USA -- An Indian-origin man, along with two others, has been indicted in Chicago on charges that they duped Internet users in more than 60 countries into buying fake software products of more than 100 million dollars.


According to the 26 count indictment returned by a Federal Grand Jury, Shaileshkumar P Jain, Bjorn Daniel Sundin and James Reno deceived Internet users into falsely believing that their computers were infected with "malware" or had other critical errors to induce them to purchase "scareware" software products that had limited or no ability to remedy the purported, but nonexistent, defects.

The trio placed fake advertisements about their products on various legitimate companies' websites in a scheme "regarded as one of the fastest-growing and most prevalent types of internet fraud".

The international cybercrime scheme caused Internet users in more than 60 countries to purchase more than one million bogus software products, causing victims to lose more than US $100 million, the federal indictment said.

Sundin and Jain owned and operated Innovative Marketing Inc (IM), a company registered in Belize that purported to sell anti-virus and computer performance/repair software through the internet and that operated a subsidiary called Innovative Marketing Ukraine, located in Kiev.

The company had closed down last year after the US Federal Trade Commission filed a lawsuit in Maryland seeking to end the allegedly fraudulent practices.

Jain, 40, who was IM's chief executive officer, is a US citizen and is believed to be living in Ukraine. Sundin, 31, IM's chief technology officer and chief operating officer is a Swedish citizen believed to be in Sweden.

Reno 26, of Ohio owned and operated the former Byte Hosting Internet Services, which operated call centres that provided technical and billing support to victim consumers on behalf of IM.

Reno is expected to present himself for arraignment at a later date in US District Court in Chicago.

Sundin and Jain were each charged with 24 counts of wire fraud, and Reno with 12 counts of wire fraud, and all three were charged with one count each of conspiracy to commit computer fraud in the 26-count indictment.

Each count of wire fraud carries a maximum penalty of 20 years in prison and a US $250,000 fine.

The indictment also seeks forfeiture of approximately US $100 million and any funds held in a bank account in Kiev.

"These defendants allegedly preyed on innocent computer users, exploiting their fraudulently induced fears for personal gain. We will continue our efforts to identify and aggressively investigate similar schemes with the assistance of our law enforcement partners both at home and internationally," Robert Grant, Special Agent-in-Charge of the Chicago FBI Office said.

According to the indictment, after causing a series of false error messages, Sudin and Jain made Internet users worldwide, including throughout the US, Sweden and Ukraine, purchase software products like 'DriveCleaner' and 'ErrorSafe', ranging in price from approximately US $30 to US $70, which they falsely represented would rid the victims' computers of defects, but actually did little or nothing to improve or repair computer performance, resulting in financial losses exceeding US $100 million.

The duo allegedly created at least seven fictitious advertising agencies that contacted multiple victim companies pretending to act as advertising brokers on behalf of known legitimate entities that wanted to place internet ads on the unnamed victim companies' websites, when in fact the ads were unauthorised.

The victim companies allegedly were defrauded of at least US $85,000 in unpaid fees promised by the fictitious ad agencies.

Unknown to the victim companies, the internet ads that were placed on their websites by these fictitious agencies contained hidden computer code that "hijacked" the Internet browsers of individual victims, redirecting their computers without their consent to websites controlled by Sudin and Jain.

The victims were then prompted with a series of error messages claiming that the user's computer was experiencing a critical error and the victim needed to purchase an IM-distributed software product to remedy the problem.

Reno allegedly aided Sudin and Jain in creating and operating the fictitious ad agencies by providing support as a technical adviser for the computer servers and networks used to facilitate their operation.

The fictitious ad agencies included "BurnAds," "UniqAds," "Infyte," "NetMediaGroup," and "ForceUp," according to the indictment.

The proceeds of sales, typically by credit card, were allegedly deposited into bank accounts controlled by the defendants and others throughout the world, and then were transferred to additional bank accounts located in Europe.

Source: NDTV

Thursday, May 27, 2010

Ukraine Drops NATO Membership Aim

KIEV, Ukraine -- Ukraine Thursday formally buried pursuit of NATO membership as an aim, its foreign minister declaring the issue had been taken off the policy agenda.


It was the most clear-cut statement by the new leadership of President Viktor Yanukovich that the issue was a dead letter in Ukraine for the conceivable future.

"Ukraine will continue developing its relations with the alliance, but the question of membership is now being removed from the agenda," the foreign minister, Kostyantyn Gryshchenko, was quoted by Interfax news agency as saying.

"This corresponds to the way things are today," he added in comments to a foreign policy coordination meeting.

Yanukovich himself was separately quoted as saying by Interfax in the Western city of Lviv: "Entry into NATO is not realistic for our country today. NATO conditions would require us to have the support of the majority of the population."

Membership of the U.S.-led military alliance was ardently pursued by the pro-Western ex-president Viktor Yushchenko, despite widespread indifference in the country and lack of encouragement from the alliance itself.

But Yanukovich, who came to power in February and has tilted the ex-Soviet republic back toward Moscow in several areas of policy, has made clear NATO membership was being pushed on to the back burner as an objective.

He has equally told Moscow that Ukraine will stick by its policy of staying out of military blocs. He has not responded to an invitation by Russian President Dmitry Medvedev to join the Russia-led CSTO security grouping.

Interfax quoted Gryshchenko as saying that NATO membership did not have the support of the majority of the population and had a "destructive effect" on state policy.

But his words indicated that Ukraine, whose Crimean peninsula is home to Russia's Black Sea fleet on an extended lease until 2042, would continue to take part in military and civil emergency programs with NATO countries.

Source: Telegraph UK

Klitschko Wary Of Poland's Sosnowski

ESSEN, Germany -- World heavyweight champion Vitali Klitschko has said he expects challenger Albert Sosnowski to make full use of his opportunity to take his WBC title when the pair clash this weekend.

Ukrainian Vitali Klitschko

This will be the fourth defence for the 38-year-old Klitschko of the title he won in October 2008 and the giant Ukrainian says he is in the form of his life.

"I feel in top shape," he said with the fight set to take place at the Veltins Arena in Gelsenkirchen on Saturday night.

"For Sosnowski, this will be the fight of his life, he will give it everything he has so I will not underestimate him."

At the beginning of this week, 35,000 of the available 50,000 tickets had been sold and Klitschko has spent eight weeks in the United States, where he has a home, preparing for the fight.

Sosnowski, 31, and 13 centimetres shorter than Klitschko, is the European heavyweight champion and was confident of his chances.

"I am one hundred percent convinced that on Sunday I will be the new world champion and I will be writing history," said the Polish fighter.

"As always, my chances are 50-50, Vitali is a good fighter and I have to fight aggresively in any case."

Sosnowski has won 45 of his 48 professional fights, 27 of them by knock-out and the last of his two defeats came in August 2008 to Zuri Lawrence of the United States.

In contrast, Klitschko has 39 victories from 41 fights with an impressive 37 knockouts.

"My knock-out rate is 97 percent, so the probability of an early victory is 97 percent," said Klitschko with a grin.

Source: Times Live

Wednesday, May 26, 2010

Springtime For Stalin

NEW YORK, USA -- Three and a half months after a Ukrainian court convicted Stalin of genocide against the Ukrainian nation during the famine of 1932-1933, a new monument in honor of the Soviet dictator has been erected in the southeastern Ukrainian city of Zaporizhia.

Joseph Stalin

Separating the two events was this year’s Ukrainian presidential election, in which Viktor Yushchenko, who had pursued a radically anti-Stalinist memory policy, was defeated and replaced by Viktor Yanukovych, who promised to avoid extremes and unite the nation.

Though Yanukovych would prefer to steer clear of such ostentatious nostalgia for Stalin, he is responsible for a remarkable change in mood.

In his final months in office, Yuschchenko favored an ill-considered “trial” against Stalin and other long-dead defendants as a way to define the history of Ukraine’s past within the Soviet Union; Yanukovych, by contrast, has overseen the formation of a new coalition government that includes the Communist Party of Ukraine.

Rather than simply letting his predecessor’s strident anti-communism fade into the past, the new president has pronounced on Ukrainian history in a contrary spirit.

Thus, Yanokovych told the Council of Europe in late April that the deliberate starvation of the three million inhabitants of Soviet Ukraine by the Stalinist regime was not genocide, but rather a “common tragedy for all people who lived in the former Soviet Union.”

His bland formulation blurs important truths.

While it is true that Stalin’s policy of collectivization—the state seizure of farmland and the coercive employment of peasants—brought enormous suffering throughout the USSR in the early 1930s, it is also true that Stalin made deliberate decisions about grain requisitions and livestock seizures that brought death to three million people in Ukraine who did not have to die.

Some of the very worst of the killing took place in southeastern Ukraine, where Stalin is now being celebrated and where Yanukovych has his political base.

The famine destroyed that region’s rural society by killing many, cowing more, and permitting the immigration of people from beyond Ukraine—chiefly Russians, some of whom inherited the homes of the starved.

The cult of Stalin is thus no empty symbol in Ukraine; it is a mark of active identification with a person who owed his mastery of Ukraine to a campaign of death.

Source: History News Network

Media Censorship Resurfaces In Ukraine

KIEV, Ukraine -- Initiative youngsters held major protests in the main Ukrainian cities against media censorship.

Protestors washed newspapers and TV sets by detergent.

Protestors washed newspapers and TV sets by detergent. They put up posters with slogans such as: “Censorship – path to totalitarianism”, “Let’s wash off mass media from censorship” and so on.

Journalists of two biggest Ukrainian TV channels wrote open letters about censorship returning in Ukraine.

Recently members of “Party of Regions” registered in parliament a bill that accepts criminal prosecution of journalists for publishing “irresponsible political statement”.

In addition, on the birthday of Ukrainian journalist Georgiy Gongadze who was killed by ex-president Leonid Kuchma regime, ukrainian journalists set up public movement “Stop censorship”.

Reporters Without Borders, an international media watchdog, has written to Yanukovych twice, first to express dismay at “an alarming deterioration in the press freedom situation in Ukraine” since his Feb. 25 inauguration

Natalia Petrova, a lawyer and a media expert, said that Ukrainian politicians and courts still don’t understand that a basic tenet of a democratic society is the freedom to assemble peacefully – even in protest.

“Ukraine should learn from the Western countries how to balance people’s rights for assembly and public order. Just take a look at the anti-globalists protests during the G8 and other summits: nobody bans them and if the police notice a violent action, they just locate and isolate the instigators, while other people keep protesting”. - a lawyer and a media expert Natalia Petrova said.

Source: AllVoices

Ukraine Unwilling To Reduce Cooperation With NATO

KIEV, Ukraine -- Ukraine has no intention of reducing cooperation with NATO, the country's deputy foreign minister said on Wednesday.


"We are interested in the maintenance of political dialogue with NATO," Kostantyn Yeliseyev told a joint Ukraine-NATO working group on the country's defense program and national security in Kiev.

"Ukraine will continue to fulfill obligations in its relations with NATO... We intend to continue wholesale inner reforms and appreciate NATO's help in this direction," he added.

Yeliseyev said bilateral ties would continue to develop along the principles outlined in the Charter on Ukrainian-NATO partnership.

NATO's assistant secretary general for defense policy and planning said in an interview with a Ukrainian newspaper that the experience of the alliance's partnership with Kiev was "unprecedented," as the country maintains close ties with NATO yet expresses an unwillingness to join it.

"NATO will continue to provide help to Ukraine," Jiri Sedivy said, adding that NATO respects Ukraine's policy.

New Ukrainian President Viktor Yanukovych has indicated that Ukraine will drop his predecessor's plans to attempt to seek NATO membership, a proposal that infuriated Russia, but has also indicated that he will try to maintain good ties with both Moscow and the West.

Source: RIA Novosti

Tuesday, May 25, 2010

Biden Holds Telephone Talks With Ukrainian President

KIEV, Ukraine -- U.S. Vice-President Joe Biden held telephonic talks Monday with Ukrainian President Viktor Yanukovych to discuss the steps being taken by Ukraine to put its economy on a stable path to recovery.

US Vice President Joe Biden

"They discussed the steps Ukraine is taking to put its economy on a stable path to recovery," the White House said in a statement following the conversation between the two leaders.

They also discussed issues of bilateral and regional importance, including Ukraine's progress in forging closer ties with the United States and Europe, it said.

The talks came as Russia continues to make its presence felt in the former Soviet republic with Ukraine readying to open its border to Russian business and establish a free trade zone with its eastern neighbor.

Yanukovych's taking over the presidency from Viktor Yushchenko has renewed prospects of Ukraine forging closer ties with Russia, and a 25-year extension of the Russian Black Sea Fleet's presence at Sevastopol.

The Black Sea Fleet was expected to be relocated from Sevastopol to Russia's Novorossiysk, which was originally looking at possible expansion to accommodate the fleet.

In return for extending the lease, Russia agreed to significant discounts on exports of natural gas to Ukraine, where high gas prices exacerbate its economic troubles.

Ukraine is a member of the Commonwealth of Independent States (CIS), a regional organization whose participating countries are former Soviet republics, and formed during the break-up of the Soviet Union.

It is the second largest country in Eastern Europe, and most of it was a constituent republic of the USSR from 1923 to 1991.

Source: RTT News

Monday, May 24, 2010

Media Freedom Watchdog To Screen Ukraine

KIEV, Ukraine -- According to Elsa Vidal, head of EU’s bureau of the Reporters Without Borders, a RWB delegation is to visit Ukraine to examine the freedom of the press situation, UNIAN reports, citing Radio France.


“We would like to meet with various journalists representing state-owned and commercial outlets as well as members of the Union of Journalists and politicians,” Ms Vidal said.

As soon as we garner sufficient information, we will publish our report on how the freedom of expression is observed in Ukraine, the RWB official stressed.

After Viktor Yanukovych’s election as president, Vidal continued, RWB observed that the situation in Ukraine had deteriorated regarding the freedom of expression.

This was manifested in attacks on journalists and their arrests.

We have received several complaints from Ukrainian journalists of editing by the secret service.

“Journalists in Ukraine fear to speak or write about certain topics and criticize Pres Yanukovych,” Elsa Vidal stressed.

Source: ZIK

Beijing Leads Ukrainian Officials To Cancel Cultural Performance

KIEV, Ukraine -- By putting pressure on Ukrainian authorities, Chinese diplomats caused the cancellation of a performance by Shen Yun Performing Arts, which was scheduled for May 28 at a theater in Odessa, in southern Ukraine. Shen Yun is a New York based company that is currently on tour around the world.

Shen Yun performance

Some of the show’s performers were denied visas to enter Ukraine, and were given no explanation.

Meanwhile an organization run by Odessa regional Council "Oblconcerteservice," has informed the Shen Yun show organizer in Ukraine, charity organization “For Children of the New Century,” that the agreement to rent the venue in Odessa Academic and Ballet Theatre has been suspended.

The letter says that Chinese officials have requested Odessa regional council cancel the Shen Yun performance in Odessa.

"It is categorical for the show not to take place. In such situation the juridical details—whether the contract had been broken or suspended—mean the same," Dmitry Polunin, the head of Oblconcerteservice, told The Epoch Times.

Based in New York, Shen Yun Performing Arts is a nonprofit organization that is independent of China’s communist regime. Through classical Chinese dance, the performing arts group seeks to revive the five-millennia-old artistic tradition of China that was largely destroyed by the Chinese Communist Party (CCP) during the Cultural Revolution.

Since 2006, the company has performed more than 500 shows around the world to millions of audience members.

OperaOnline said the show "gave a glimpse of a culture and its history that was at times hypnotic in its presentation, sensual in its fluid movements, and inspirational in its theme … and flawless musical performances … simply astounding to watch and a pleasure to the ear."

The CCP regularly puts pressure on authorities in most of the countries where the show performs. Pressure usually comes through the use of its consulates, embassies, and community organizations, and aims to cancel the show.

Shen Yun takes as its mission to revive China's artistic tradition that thrived before decades of suppression by the CCP. The show also includes dance programs set in contemporary China that portray the persecution of Falun Gong—a peaceful meditation practice persecuted by the regime since 1999. These portrayals are an irritant for CCP diplomats.

Polunin said that there was a letter from Ukraine’s foreign ministry requesting his organization not assist the Shen Yun show in Odessa. He said it was because of “political” issues.

Odessa officials told The Epoch Times in a private conversation that they also received letters from the Ukrainian prime minister, the minister of culture, and the head of the national security service not to let the show perform.

An Epoch Times reporter met with Vice Prime Minister of Ukraine Vladimir Seminozhenko, whose negative letter was among those from the top officials, to ask him about the situation. He denied any government involvement in the interference with the performance.

Ukrainian officials say that the pressure is connected to the official visit of China’s foreign minister, Yang Jieqi to Kyiv last week.

International Support

Vice President of European Parliament Edward McMillan-Scott has sent a letter to ask Ukraine’s president to let the Shen Yun perform in Ukraine.

Some members of Ukrainian Parliament, and members of the U.S. Congress also sent letters to Ukrainian officials to assist Shen Yun Performing Arts.

Human rights advocates have also condemned the Chinese diplomats’ interference with domestic affairs in Ukrainian. “This is brutal intervention and we can’t agree with it," said Evgeniy Zakharov, the head of Kharkov human rights group in Ukraine.

Zakharov commented that the Chinese officials behave the same way as Soviet authorities who physically destroyed art and elements of culture. "Ukraine should respond if it considers itself to be a European civilized country," he said.

Two performances of Shen Yun were canceled in Kiev in April, last year, under the same scenario. Ukraine's Ministry of Foreign Affairs did not grant visas to the show’s performers and the president's office made the dates which Shen Yun was scheduled to perform unavailable at the country's renowned theater, the National Palace Ukraine. Ukraine's top officials declined to speak with The Epoch Times or the show’s organizers.

Source: The Epoch Times

Russia And The New Ukrainian Foreign Policy

KIEV, Ukraine -- Dmitri Medvedev managed to get half-way through his presidency without ever visiting Kiev. That was before Viktor Yanukovich replaced the Kremlin’s bête noire, Viktor Yushchenko, as Ukraine president in February.

Ukraine's President Yanukovich listens to his Russian counterpart Medvedev during VII Ukrainian-Russian Economic Forum in Kiev.

Since then, high-level meetings have taken place almost weekly, culminating in Mr. Medvedev’s state visit to Kiev this week.

Mr. Medvedev has even taken to advertising his part-Ukrainian grandmother from Belgorod.

Mr. Yanukovich has now signed a huge number of agreements with Russia, most notably the deal to swap an extra 25 years for the Russian Black Sea Fleet in Crimea for a 30 percent reduction in the price of gas.

Ukraine has also agreed to big deals on cooperation in the nuclear industry and in aviation, a 10-year economic cooperation plan, and common positions on Transnistria and security in the Black Sea region that have disturbed neighbors like Moldova and Georgia.

And Mr. Yanukovich has backed Mr. Medvedev’s pet European Security Initiative and its goal to “eliminate the dangerous dividing lines that have appeared in the European region over the past decade.”

A recently leaked strategy paper written by Russia’s foreign minister, Sergei Lavrov, defines Russia’s overall aim as nothing less than “to actively draw Ukraine into an orbit of economic cooperation with Russia.”

This new Ukrainian foreign policy is something of a mystery. Even some old hands are wondering why Ukraine is huddling so close to Russia, and why it has conceded so much so quickly.

Four possible explanations suggest themselves:

One is that Ukraine is still in economic trouble and the rapprochement with Russia is all about cheap gas.

The gas discount obviated the need for harsh spending cuts, and Kiev thinks a budget deficit under 6 percent of gross domestic product will bring the International Monetary Fund back to the table. Standard & Poor’s has upgraded Ukraine’s credit rating from B- to B.

In the short term, the gas deal is also the one thing that pleases both competing wings of Mr. Yanukovich’s Party of the Regions. The Dmitry Firtash group runs several chemical plants; Rinat Akhmetov’s main business is steel. Together, they consume almost half of all Ukraine’s gas imports.

However, the I.M.F. is well-aware that hard choices and fiscal retrenchment have been postponed, possibly only for a matter of months. Moreover, Ukraine is still paying $230 per 1,000 cubic meters for gas – the price may have fallen, but only to levels common elsewhere in Europe.

So if economic trouble is the explanation, Russia cannot bail out the whole economy. Ukraine will come back to the Western table soon enough.

The European Union in particular should reiterate that the deal that Ukraine signed but never implemented in 2009, promising substantial Western investment if Ukraine reformed its gas sector, can still be revived.

The second possibility is that Mr. Yanukovich’s priority is to strengthen himself internally.

Playing closer to Russia makes this easier, as Russia is not likely to object to recent moves to chip away at media freedom and pack the judiciary. But a stronger Yanukovich might be a more prickly partner in the long run – not just for the West but for Russia as well.

If this is the case, the West should avoid giving the impression that it is so fed up with the years of chaotic “Orange” government that it will allow Mr. Yanukovich to undercut freedoms won by the Orange Revolution in 2004 in the name of restoring “stability.”

The third possible explanation is corruption.

Local elites are quick learners. The main current scam involves Ukraine’s internal gas distributors buying cheaper “gas for households” and selling it to higher-paying industrial customers.

The cut in the overall Russian gas supply price reduces the pressure from the European Union for market pricing across the board, which would close these gaps.

But the world is paying more attention since the gas crisis in January 2009. And some of Ukraine’s oligarchs may split from Mr. Yanukovich soon enough if the “gas lobby” gains too much power in the new government.

The Ukrainian oligarchs are also interested in concessions from the Russian side, such as opening up access to Central Asian gas.

The fourth possibility is that Ukraine shares some of Russia’s analysis of rapidly changing world events.

Mr. Yanukovich’s team may also think that the United States is preoccupied with other things, and that the E.U. is in long-term decline and is too busy with the euro crisis in the short-term to pay much attention to Eastern Europe.

Ukraine might also believe that the global economic crisis will replace flat “globalization” with lumpy “regionalization,” and Ukraine should throw in its lot with Russia as it seeks to consolidate “its” region.

If that is the case, encouraging the Ukrainian pendulum to swing Westward again will be much harder this time.

Source: European Council on Foreign Relations

Sunday, May 23, 2010

Ukraine Demands Local TV For Local People

KIEV, Ukraine -- Ukraine’s Anna Herman, presidential administration, wants to see more Ukrainians on the country’s TV screens – in order to end her compatriot’s “imperial complex”.

Savik Shuster

She has called for Ukraine’s top shows to be hosted by Ukrainians, and singled out Savik Shuster’s popular political talk show.

Shuster, who has dual Canadian-Italian citizenship, was a star of Russian TV before moving to Kiev and upsetting Herman, Ukrainskaya Pravda reported.

“We have a hundred Saviks in Ukraine,” she complained. “I would like it if such popular shows were presented by Ukrainian journalists. There are a lot of interesting journalists in Ukraine who know how to do it.”

Ukrainians have not grown out of the “imperial complex”, which Herman characterised as “Everything coming out of Moscow is good, and everything of ours is bad.” She said that this was not acceptable.

As well as Shuster, Yevgeny Kisselev, another famous journalist from Russian TV, presents a similar show “Big politics”. These two programmes are among the most popular on Ukrainian TV.

Source: The Moscow Times

Ukraine’s Parliament To Adopt A Legislation Package For Closer Cooperation With EU

KIEV, Ukraine -- In June parliament is to pass a legislation package necessary for launching a free trade zone with the European Union and start visas liberalization process, President Yanukovych told Ukraine’s leading TV channels.

In June parliament is to pass a legislation package necessary for launching a free trade zone with the European Union and start visas liberalization process, President Yanukovych told Ukraine’s leading TV channels.

“We have a cooperation plan with the European Union for 2010 and we are fulfilling it. First of all we are working towards liberalization of visa procedures which would result in visa-free zone between Ukraine and Europe."

"Secondly, we are aimed at free trade zone with Europe. In June the parliament is going to pass a legislation package that would give us a green light for more substantial negotiations with the European Union” – Yanukovych said.

Source: Kyiv Post

U.S. Firms Hired For Probe

KIEV, Ukraine -- Ukrainian President Viktor Yanukovych's administration has hired a “dream team” of U.S. lawyers and private investigators with a track record of defending the country’s oligarchs and even ex-President Leonid Kuchma.

Criminal defense lawyer Plato Cacheris.

Their current mission: To uncover proof of massive abuse by the government’s No. 1 foe, former premier and opposition leader Yulia Tymoshenko, whom top administration officials have already accused of misspending billions of dollars in state funds.

The government hired high-profile U.S. law firm Trout Cacheris on May 5 to audit Ukraine’s spending under Tymoshenko’s management between 2008 and 2010. Trout Cacheris’s star is criminal defense lawyer Plato Cacheris. In addition to defending Monica Lewinsky in ex-U.S. President Bill Clinton’s sex scandal, Cacheris has also represented Aldrich Ames, the CIA agent who was caught passing on secrets to the Soviet KGB spy agency.

For its part, Trout has brought in two other U.S. firms to help produce results for Prime Minister Mykola Azarov. Leading global detective company Kroll has been contracted to assist, as has top-notch international law firm, Akin Gump Strauss Hauer & Feld, LLP.

None of the firms would talk to the Kyiv Post about their contract with the Ukrainian government or what instructions they were given about how to conduct the investigation.

Back on the payroll

Kroll has previously tracked down hidden assets of former Haitian President Jean-Claude Duvalier and disclosed Saddam Hussein’s siphoning of Iraqi money.

Their work in Ukraine has involved the highest ranks of power as well.

In 2001, the U.S. detective agency was hired by the Labor Ukraine party, then backed by billionaire Viktor Pinchuk, the son-in-law of then President Kuchma. The investigation was supposed to focus on who killed journalist Georgy Gongadze on Sept. 16, 2000. Its results were widely dismissed as an attempt to whitewash the case and absolve Kuchma from suspicion.

According to a report by the Jamestown Foundation, an American think tank, on Oct. 2, 2001, Kroll “failed” to conduct a fair and full investigation.

Kroll summed up its investigation then by saying that it was impossible to state whether secret recordings made by Kuchma presidential bodyguard Mykola Melnychenko were authentic, and that it had found no other circumstances that might show Kuchma’s complicity in the Gongadze murder.

The tapes allegedly recorded hundreds of hours of conversations between Kuchma and associates in which they plotted various crimes – accusations they have denied steadfastly and for which Ukraine’s corrupt law enforcers have found no corroborating evidence.

Akin Gump has 14 offices around the world and employs a team of multilingual lawyers and political insiders. Its co-founder, Robert S. Strauss, has advised and represented three American presidents: Jimmy Carter, Ronald Reagan and George H.W. Bush. Under the elder Bush, Strauss served as an ambassador to the Soviet Union and then Russia.

In Ukraine, Akin Gump lawyers had for years represented the interests of two of Ukraine’s richest oligarchs and strongest backers of Yanukovych: Party of Regions deputy, Rinat Akhmetov, and gas tycoon Dmytro Firtash.

The law firm has defended the reputations of these men, who got rich in the years of crony capitalism that followed Ukrainian independence. Sometimes the firms pressured or threatened lawsuits against journalists who wrote critical reports.

Tailor-made results?

The hiring represents yet another of many instances in which Ukraine’s government has turned to outsiders to solve problems it could not do alone. It has happened in criminal cases, in budget matters and in the acceptance of billions of dollars in foreign aid.

This time, the outside help is supposed “to identify any areas that may have hindered the country’s ability to realize its economic potential,” according to a statement by Trout on May 12.

The results of the investigation are expected by Sept. 1.

Even before the investigation is done, however, Azarov has already alleged that his predecessors misspent $12.4 billion in state money. Administration officials allege mismanagement at state monopolies, in government purchases of goods and services and in how value-added taxes were refunded to companies during the last two years.

Hryhoriy Nemyria, one of Tymoshenko’s top aides, dismissed the hiring as “a tailor-made audit” and “an instrument to scare and persecute political opponents.”

The scope of the probe suggests political motivations. Investigators, evidently, will not probe any government actions when Yanukovych was prime minister, from 2002-2004 and 2006-2007.

Trout is responsible for investigating how Tymoshenko’s team spent foreign loans from the International Monetary Fund, according to Serhiy Lyovochkin, head of the presidential administration.

The use of proceeds from the sale ofUkraine’s emission quotas under the Kyoto protocol -- $375 million -- will also be scrutinized.

None of the companies contracted have auditing services among their specialization, and it is not clear what local firms they will hire to assist.

Serhiy Vlasenko, a lawyer and a lawmaker in Tymoshenko’s party, also finds fault with the arrangement.

“Lawyers don’t do audits,” Vlasenko said. “It’s the same as hiring builders to do an audit.”

But Lyovochkin defended the government’s actions. “The audit will be conducted not just by this firm [Trout Cacheris,] but also by someone from the Big Four [international audit moguls] and relevant international organizations,” Lyovochkin said. He also suggested that “their style of audit is more investigative, unlike the financial audit conducted by the Big Four.”

Many experts contacted by the Kyiv Post agreed with Vlasenko’s assessment that the findings of the foreign firms won’t, by themselves, have legal standing in Ukraine.

“It will bear a psychological and moral aspect,” said Vasyl Yurchyshyn, head of the economy section at Kyiv’s Razumkov think tank. “Because it has this politicized undertone, it’s unlikely to have legal consequences for anyone. But the current government should be prepared that when the next one comes in power, they will do the same against them.”

No senior politician, apart from convicted ex-Ukrainian Prime Minister Pavlo Lazarenko, has ever been prosecuted and convicted in a nation that reeks of corruption at all levels of government and business. While political rivals routinely accuse each other of wrongdoing, they appear to adhere to an informal rule of mutual protection from criminal prosecution.

And Lyovochkin even suggested that no criminal prosecution would result from the probe.

“Their [Trout Cacheris] task is not to catch someone red-handed, but to assess where we are at and make recommendations to avoid the same mistakes in the future and devise the most effective anti-crisis program.”

Another source close to Yanukovych, who asked for anonymity because of views that run counter to official administration policy, said that investigators already have enough information against Tymoshenko’s government.

“We need Trout so Yulia [Tymoshenko] doesn’t run away,” the source said. “They will provide enough information to issue Interpol’s ‘red cards,’ [calling for immediate arrest] so that she could be detained anywhere apart from Russia and China.”

Source: Kyiv Post

Village Sliced By Ukraine-Russia Border Calls For Reunification

MOSCOW, Russia -- The community of a village located on the Ukrainian-Russian border has been divided into two parts for almost 20 years. With no gas or water supplies on the Ukrainian side, they are desperately trying to reunify.




When Ukrainian Aleksey Bogdanov opens a door to his backyard, he finds himself in a different country. His house stands on the Russian-Ukrainian border in eastern Ukraine – a fact which Aleksey says causes him a slight headache.

“I buy water on the Russian side. I pay my electricity bills in Russia. I buy groceries in stores on the other side of the border. That’s why for me it would’ve been far more convenient if my village was a part of Russia,” Aleksey says.

The village where Aleksey lives was once a normal residential area. But with the collapse of the USSR, Vyselki was split in two parts by the border of the new sovereign states – Russia and Ukraine.

Most of Vyselki now stands on the Russian side, while only 14 houses are in Ukraine. A few dozen residents living here have to cross the border several times a day.

Anatoly Sergienko, a pensioner living on the Russian side, often does just that to visit his friend, and complains that he has to walk several kilometers to get there.

“When I pass the border on foot there are no problems. I show my passport and pass through. But if I need to get there by car, I have to pay every time. And I can’t afford it. My father is buried on the other side and I can’t visit the cemetery because of that,” Anatoly Sergienko says.

Grocery stores, schools and hospitals all stand in the Russian part of the village. Those few families living on the Ukrainian side feel hard done by.

“The Russian side of the village has recently had gas and water supplies installed. Here we haven’t got that. Its only 14 houses here on the Ukrainian side and no one bothers to do anything for us. We have complained many times, but the situation remains the same,” says village resident Svetlana Sturova.

Desperately trying to resolve the issue, locals wrote an open letter to the governments of both states, asking for parts of their village to be reunified under the Russian flag. They are aware that this would mean re-shaping the border, but local officials say that nothing is impossible.

“It is up to foreign ministries in Moscow and Kiev to resolve it. It is possible to find a compromise which would not violate the constitutions of the two states. It is only a matter of the politicians’ good will,” believes Boris Repukhov, head of the regional council.

The plea made by the residents of the village has caused heated debate in both Kiev and Moscow.

Residents of the Vyselki village have been accused of separatism and betrayal of the state by some in Kiev, but they say their request has no political motivation whatsoever.

And while for some this is a matter of territorial integrity, for the people living there it is a matter of living a comfortable life, politics aside.

Source: Russia Today

Saturday, May 22, 2010

Ukraine Ranks 57 Out Of 58 In World Competitiveness Yearbook 2010

LAUSANNE, Switzerland -- Ukraine ranked 57 in the World Competitiveness Yearbook 2010 by the IMD business school of Lausanne, Switzerland, based on a study of 58 national economies.

Ukraine ranks second bottom position in the World Competitiveness Yearbook 2010 by the IMD business school of Lausanne, Switzerland.

For the first time in decades, Singapore (1) and Hong Kong (2) have topped the USA (3) in IMD’s World Competitiveness Yearbook rankings. They are so close, however, that it would be better to define them as the leading “trio”. In the first 10 places: Australia (5), Taiwan (8) and Malaysia (10) also benefit from strong demand in Asia.

Switzerland (4) maintains an excellent position characterized by strong economic fundamentals (very low deficit, debt, inflation and unemployment) and a well-defended position on export markets. Sweden (6) and Norway (9) shine for the Nordic model, although Denmark (13) surprisingly loses ground, in particular due to the pessimistic mood expressed in the survey.

Not surprisingly Germany (16) leads the larger “traditional” economies such as the UK (22), France (24), Japan (27) and Italy (40). Despite a significant budget deficit and growing debt, Germany’s performance is driven by strong trade (second largest exporter of manufactured goods), excellent infrastructure, and a sound financial reputation.

It was also to be expected that China (18) would lead the other BRIC nations, followed by India (31), Brazil (38) and Russia (51). And of course the credit-worthiness storm that affects Southern Europe acts as a drag on the performance of Spain (36), Portugal (37) and Greece (46).

Source: Kyiv Post

Tigipko ‘Hopes’ To Persuade IMF To Make Delayed Ukraine Visit

KIEV, Ukraine -- Ukraine’s Deputy Prime Minister Serhiy Tigipko said the International Monetary Fund has delayed a visit to Ukraine because the government has yet to show it can meet the fund’s budgetary conditions.

Ukraine’s Deputy Prime Minister Serhiy Tigipko.

Tigipko, who on April 29 said the mission would arrive at the beginning of this week, told reporters in Kiev today the government “still has to prove its budgetary sources.

The international organizations do not believe that the government can raise enough revenue. But the dynamics we have now show that we will be able to get the revenue.” He said he hopes to persuade the IMF team to come.

Ukraine has agreed a loan with the Washington-based fund to replace its two-year $16.4 billion credit approved in late 2008, Tigipko said last month. The IMF may lend Ukraine $19 billion in a 2 1/2-year program, according to Tigipko.

The fund says the government has yet to fulfill budgetary and financial terms of its existing program and hasn’t confirmed the new loan.

The former Soviet state has received $10.6 billion of the IMF’s current arrangement.

Ukraine wants a tranche in June and is working to obtain as much as $4 billion, Iryna Akimova, the first deputy of President Viktor Yanukovych’s staff, said on May 15.

Source: Bloomberg

Friday, May 21, 2010

Authorities, Courts Curbing Right To Peaceful Protests

KIEV, Ukraine -- Another constitutional right appears to be under assault in President Viktor Yanukovych’s Ukraine: The constitutional right to assemble peacefully.

A gathering called “Keep Silent, Ukraine!” was held at Maidan Nezalezhnosti on May 17. Less than 100 people gathered with the slogan: “We are silent, but we think very loudly!”in response to Russian President Dmitry Medvedev's official visit to Kyiv on May 17-18.

In the run-up to Russian President Dmitry Medvedev’s visit to Kyiv on May 17-18, a judge in Kyiv Oblast’s administrative court banned any pickets in front of the presidential administration and in most central areas of Kyiv.

The court justified the ban as essential “in order to avoid possible clashes between people who share different political views, taking into account previous experience ensuring public order during such actions, and also conflicts with police units, which may lead to a sharp escalation of the situation and mass unrest.”

Natalia Petrova, a lawyer and a media expert, said that Ukrainian politicians and courts still don’t understand that a basic tenet of a democratic society is the freedom to assemble peacefully – even in protest.

“I can’t say whether the situation is getting much worse now,” Petrova said. “Banning meetings and demonstrations has been a common practice in Ukrainian courts.”

During the Ukraine without Kuchma protests in 2000-2001, when mass protests against ex-President Leonid Kuchma gathered steam, courts banned marches in downtown Kyiv.

Instead, judges assigned demonstrators to the distant location of Chaika stadium, just outside of Kyiv.

The most recent ruling – to not run the risk of protests against Medvedev, no matter how peaceful – shows that Ukrainian courts lag far behind democratic standards.

“Ukraine should learn from the Western countries how to balance people’s rights for assembly and public order,” Petrova said. “Just take a look at the anti-globalists’ protests during the G8 and other summits: nobody bans them and if the police notice a violent action, they just locate and isolate the instigators, while other people keep protesting.”

Article 39 of the Constitution of Ukraine clearly states:

“Citizens have the right to assemble peacefully without arms and to hold meetings, rallies, processions and demonstrations upon notifying in advance the executive authorities or local self governments.”

However, the second part of the Article 39 stipulates some restrictions on exercising the right for assembly. And those curbs “can be established by a court in accordance with the law and only in the interests of national security and public order, with the purpose of preventing disturbances and crimes, protecting the health of the population or protecting the rights and freedoms of other persons.”

And, hence, courts liberally seize on those limitations to ban demonstrations – and hence, a valuable form of free speech.

Among the victims of the court ruling were activists from the ultra-nationalist Svoboda Party led by Oleh Tyahnibok. They planned to picket the presidential adminsitration.

“To do so we filed a corresponding request to Kyiv city administration but instead of the expected permission we got a Kyiv oblast administrative court ruling that banned us to hold the picket in front of the president’s office and in most places in Kyiv downtown area,” complains Yuriy Syrotyuk.

Syrotyuk was outraged by the court’s rationale that the demonstrators threatened public safety. “We were not going to scuffle with the police or with our opponents,” Syrotyuk said.

“We just wanted to exercise our right for public gatherings and protest against treacherous anti-Ukrainian policy that the incumbent president, Yanukovych, promotes by signing bilateral agreements that limit Ukraine’s sovereignty, independence and territorial integrity.”

Yevhen Radchenko, a legal expert and director on development at Internews-Ukraine, said peaceful protests do not represent a threat to public safety.

“If the law enforcement structures were afraid of clashes between the demonstrators and their opponents, they should have ensured public safety at the gathering point but not ban the picket,” Radchenko said.

“So it’s obvious that the court ruling was politically charged and the judges were trying to use any pretext to justify it. I think it’s a very alarming signal.”

“The current bans on peaceful demonstrations are nothing but a wide-front offensive on human rights,” said Yevhen Zakharov, a leading Ukraine’s human rights expert.

According to Zakharov, the official crusade against public demonstrations also extends to non-political issues – such as a student demonstration in Kharkiv recently demanding better city maintenance. Police detained three protesters for “violating the procedure for gathering.”

Most troubling, Zakharov said, is that “now city authorities can ban people’s gatherings” on their own, without any court order.

Zakharov is concerned that parliament will adopt even more restrictions on freedom of assembly soon.

Source: Kyiv Post

Kiev Says Russian Rival To GPS Good For Ukraine's Security

KIEV, Ukraine -- Ukraine's participation in Russia's global satellite navigation project is in the country's national interest, Ukrainian Deputy Prime Minister Volodymyr Semynozhenko said on Wednesday.

Russia's GLONASS Global Navigation Satellite System.

The GLONASS - the Global Navigation Satellite System - is the Russian equivalent of the U.S. Global Positioning System, or GPS, and is designed for both military and civilian use. Both systems allow users to determine their positions to within a few meters.

"Ukraine needs an alternative - apart from GPS, the GLONASS system is needed. This fits with the national interests of Ukraine - we cannot depend on only one system," Semynozhenko said at a news briefing.

Russia has proposed setting up a joint venture with Ukraine for the development and implementation of the GLONASS system, Akexander Gurko, the head of Russian company Information and Navigation Systems that is part of the GLONASS project, told a Russian-Ukraine economic forum on Tuesday.

According to Semynozhenko, Russian and Ukrainian partners are in talks about the joint production of GLONASS satellites and cooperation between national space agencies in satellite launches.

He added that an earlier proposal to create a Russian-Ukrainian investment fund to finance large scale projects difficult for a single country, such as the development of 4G networks and the manufacturing of innovative medical equipment, is now being discussed at government level.

Source: GPS Daily

Thursday, May 20, 2010

Tilting Toward Russia?

MOSCOW, Russia -- Dmitri Medvedev managed to get half-way through his presidency without ever visiting Kiev. That was before Viktor Yanukovich replaced the Kremlin’s bête noire, Viktor Yushchenko, as Ukrainian president in February. Since then, high-level meetings have taken place almost weekly, culminating in Mr. Medvedev’s state visit to Kiev this week. Mr. Medvedev has even taken to advertising his part-Ukrainian grandmother from Belgorod.

Ukraine's President Yanukovich shakes hands with his Russian counterpart Medvedev during VII Ukrainian-Russian Economic Forum in Kiev.

Mr. Yanukovich has now signed a huge number of agreements with Russia, most notably the deal to swap an extra 25 years for the Russian Black Sea Fleet in Crimea for a 30 percent reduction in the price of gas. Ukraine has also agreed to big deals on cooperation in the nuclear industry and in aviation, a 10-year economic cooperation plan, and common positions on Transnistria and security in the Black Sea region that have disturbed neighbors like Moldova and Georgia.

And Mr. Yanukovich has backed Mr. Medvedev’s pet European Security Initiative and its goal to “eliminate the dangerous dividing lines that have appeared in the European region over the past decade.”

A recently leaked strategy paper written by Russia’s foreign minister, Sergei Lavrov, defines Russia’s overall aim as nothing less than “to actively draw Ukraine into an orbit of economic cooperation with Russia.”

This new Ukrainian foreign policy is something of a mystery. Even some old hands are wondering why Ukraine is huddling so close to Russia, and why it has conceded so much so quickly.

Four possible explanations suggest themselves.

One is that Ukraine is still in economic trouble and the rapprochement with Russia is all about cheap gas. The gas discount obviated the need for harsh spending cuts, and Kiev thinks a budget deficit under 6 percent of gross domestic product will bring the International Monetary Fund back to the table. Standard & Poor’s has upgraded Ukraine’s credit rating from B- to B.

In the short term, the gas deal is also the one thing that pleases both competing wings of Mr. Yanukovich’s Party of the Regions. The Dmitry Firtash group runs several chemical plants; Rinat Akhmetov’s main business is steel. Together, they consume almost half of all Ukraine’s gas imports.

However, the I.M.F. is well-aware that hard choices and fiscal retrenchment have been postponed, possibly only for a matter of months. Moreover, Ukraine is still paying $230 per 1,000 cubic meters for gas — the price may have fallen, but only to levels common elsewhere in Europe.

So if economic trouble is the explanation, Russia cannot bail out the whole economy. Ukraine will come back to the Western table soon enough. The European Union in particular should reiterate that the deal that Ukraine signed but never implemented in 2009, promising substantial Western investment if Ukraine reformed its gas sector, can still be revived.

The second possibility is that Mr. Yanukovich’s priority is to strengthen himself internally. Playing closer to Russia makes this easier, as Russia is not likely to object to recent moves to chip away at media freedom and pack the judiciary.

But a stronger Yanukovich might be a more prickly partner in the long run — not just for the West but for Russia as well. If this is the case, the West should avoid giving the impression that it is so fed up with the years of chaotic “Orange” government that it will allow Mr. Yanukovich to undercut freedoms won by the Orange Revolution in 2004 in the name of restoring “stability.”

The third possible explanation is corruption. Local elites are quick learners. The main current scam involves Ukraine’s internal gas distributors buying cheaper “gas for households” and selling it to higher-paying industrial customers. The cut in the overall Russian gas supply price reduces the pressure from the European Union for market pricing across the board, which would close these gaps.

But the world is paying more attention since the gas crisis in January 2009. And some of Ukraine’s oligarchs may split from Mr. Yanukovich soon enough if the “gas lobby” gains too much power in the new government. The Ukrainian oligarchs are also interested in concessions from the Russian side, such as opening up access to Central Asian gas.

The fourth possibility is that Ukraine shares some of Russia’s analysis of rapidly changing world events. Mr. Yanukovich’s team may also think that the United States is preoccupied with other things, and that the E.U. is in long-term decline and is too busy with the euro crisis in the short-term to pay much attention to Eastern Europe.

Ukraine might also believe that the global economic crisis will replace flat “globalization” with lumpy “regionalization,” and Ukraine should throw in its lot with Russia as it seeks to consolidate “its” region.

If that is the case, encouraging the Ukrainian pendulum to swing Westward again will be much harder this time.

Source: The New York Times

Ukraine Is Not Yet 'Lost'

KIEV, Ukraine -- Doomsayers have been lamenting the West’s imminent “loss” of Ukraine for years, and the trend has only picked up since Viktor Yanukovich was elected president in February.


In the recent signing of an agreement prolonging the lease of a Russian naval base in Crimea, they see proof of the new president’s desire to cement his country’s status as a Russian satellite.

They’re wrong. Sort of.

True, it’s a bad deal. In exchange for rebates on natural gas until 2019, President Yanukovich has allowed Moscow to station its Black Sea Fleet in the port of Sevastopol until 2042.

In doing so, he has allowed Russia to maintain a foothold in a particularly unstable part of Ukraine — Crimea — and to continue to project its military power in the volatile Black Sea region — not a minor development, especially after Russia and neighbor Georgia came to blows in August 2008.

Just as worrying, the rebates will allow the president to postpone reform of Ukraine’s famously corrupt and inefficient energy sector. They are life support for a fossilized system that should long have gone the way of the dinosaurs.

Putting off reform is politically profitable for Mr. Yanukovich, who depends on the support of industrial and energy barons who made their fortunes thanks to corruption and artificially cheap gas. But it comes at a high political cost to Ukraine, which now essentially depends on Russian subsidies to pay for the energy it consumes.

In other words, the deal bolsters Russia’s influence in Ukraine and its claim to a sphere of influence in the region.

But those who see it as evidence of Mr. Yanukovich’s determination to steer his country back into Russia’s orbit are not looking at the right things.

The agreement is less evidence of Mr. Yanukovich’s geopolitical inclinations than proof of his country’s weakness. Ukraine’s economy shrank by one seventh in 2009, and with it the government’s ability to pay its energy bills.

Even Yulia Tymoshenko, a leader of the Orange Revolution who as recently as 2008 had called for Ukraine to join NATO, as prime minister found herself compelled in 2009 to make important concessions to Moscow — including a gas accord so one-sided it had to be revised only a few months after its signing.

Nor, for all its repercussions, does the deal spell the end of European integration in the broader sense. While NATO membership is clearly off the table in the short and probably medium terms, that was evident already before Mr. Yanukovich came to power.

The new president has resisted attempts by Moscow to get Ukraine to join a Russia-led customs union, preferring instead to continue negotiations on a deep and comprehensive free trade agreement with the European Union.

He has described European integration as his “key priority,” symbolically making his first visit as president to Brussels — much to Moscow’s ire. Mr. Yanukovich is less Western-oriented than his predecessor Viktor Yushchenko, but he is not a Kremlin stooge.

Despite his reputation for incompetence, Yanukovich can be a smooth operator. The gas agreement may undermine Ukraine’s position vis-à-vis Russia, but it is popular with industry and many households, whom it saves from higher gas bills (for this year at least).

It also paves the way for a national budget acceptable to the I.M.F., whose deficit-reduction demands have been a major stumbling block in negotiations on the release of further tranches of its emergency loan. Even U.S. Secretary of State Hillary Clinton has called it evidence of Ukraine’s new “balanced approach” to foreign policy.

More worrying than the agreement’s content is the deeply flawed way in which it was concluded — and what this says about Mr. Yanukovich’s attitude toward the rule of law in Ukraine.

The Constitution prohibits the basing of foreign military installations on Ukrainian territory, albeit in unclear terms. What’s more, the deal was never submitted to Ukraine’s National Security and Defense Council, as it should have been, and the normal parliamentary ratification procedure was not respected.

This, combined with the constitutionally dubious way in which Mr. Yanukovich recently pieced together his parliamentary majority, raises serious questions about his willingness to play by the rules.

It is too early to say that President Yanukovich is intentionally helping Russia “steal” Ukraine from the West. He is more positively inclined toward Moscow than his predecessor, but the truth is that he has been pushed into a corner by a combination of geopolitical ineptness, special interests and pre-existing problems.

The real question is whether he takes his obligations (constitutional and otherwise) seriously. If he doesn’t, both the West and Russia are in for unpleasant surprises.

Source: The New York Times

Wednesday, May 19, 2010

Ukrainian President Pursues Controversial Russia Policies

KIEV, Ukraine -- With less than three months in office, Ukrainian President Viktor Yanukovych has moved quickly to improve ties with Russia that deteriorated under his predecessor, Viktor Yushchenko. Mr. Yanukovych's diplomacy has sparked fears among critics that he may be not only be harming the national interests of Ukraine, but also leading the country toward a break-up.

Russian President Dmitry Medvedev (L) and Ukraine's President Viktor Yanukovych attend an economic forum in Kiev, 18 May 2010.

President Viktor Yanukovych hosted his Russian counterpart this week in Kyiv, where both leaders were joined by some of the wealthiest businesspeople from both countries at a forum Tuesday.

Ship and airplane builders voiced support for tighter cooperation between Russia and Ukraine. Russian President Dimitri Medvedev suggested both countries coordinate their tax, customs, banking and insurance laws and create a single economic space.

At Kyiv State University, the Kremlin leader invited Ukraine to join Russia in the Collective Security Treaty Organization. This followed an earlier suggestion by Russian Prime Minister Vladimir Putin that both countries combine their state gas companies.

It is not clear that Mr. Yanukovych supports every Russian proposal, but he clearly raised serious opposition with a controversial agreement last month to extend through 2042 the lease Russia's Black Sea Fleet has in the Ukrainian port of Sevastopol. In exchange, Russia offered Ukraine a 30 percent discount on the price of gas imports for 10 years.

President Yanukovych told the business forum his initiatives with Mr. Medvedev promote security in the Black Sea and the volatile Transdniester region of Moldova.

Mr. Yanukovych said both leaders base their decisions on the principle of collective and coordinated actions of all interested parties.

But many critics oppose the Black Sea Fleet agreement as a violation of Ukrainian sovereignty. Parliament adopted Mr. Yanukovych's Black Sea Fleet agreement without debate, which sparked an egg-throwing brawl among lawmakers last month.

At Kyiv State University, President Medvedev responded to a student's skepticism about the fleet's presence in Ukraine.

Mr. Medvedev says, 'Let us be direct,' and asks rhetorically if Russia will use its Black Sea Fleet to attack neighboring countries. The answer, he says, is "No", adding that Russia is a peaceful country.

Former Ukrainian Prime Minister Yulia Tymoshenko is not so sure. She told the Times of London newspaper the Black Sea Fleet agreement poses a substantial threat to stability in Crimea, and warns the flurry of Yanukovych deals with Moscow could lead to Ukraine's break up.

Moscow Carnegie Center political analyst Nikolai Petrov says the new Ukrainian president inherited a troubled economy at a time when the European Union has its own share of problems. Petrov says Mr. Yanukovych could only turn to Russia, noting that Ukrainian businesspeople support closer ties with Russian counterparts, at least for now.

The analyst says questions will eventually emerge about competition, Russian companies on the Ukrainian market, and legislation to improve cooperation with Russian firms. Petrov says at that point, various objective differences and challenges [between Ukraine and Russia] will become clear.

A survey conducted by the Razumkov Center in Kyiv indicates most Ukrainians favor integration with the European Union. The Center's international program director, Mykhailo Pashkov, told VOA that E.U. membership remains the country's primary strategic goal.

Pashkov says Ukraine must diversify its foreign political activity and pay close attention to places where it has a national interest, including Brazil, India, China, Pacific Rim countries and the United States.

Viktor Yanukovych is only three months into a five-year term. Analysts Petrov and Pashkov agree the new Ukrainian leader will likely slow down the current pace of relations with Russia and turn his attention elsewhere.

While Russian leaders have showered Ukraine with proposals, Kyiv maintains some distance from Moscow. Mr. Yanukovych has said Ukraine will remain neutral, which means it will probably join neither NATO nor the Collective Security Treaty Organization.

Ukrainian officials have also been cool to Mr. Putin's suggestion about consolidating the Russian and Ukrainian gas companies. Ukrainian Energy Minister Yuri Boyko expressed concern at the business forum about the future of his country's gas pipeline system if Russia circumvents Ukraine with the Nord and South Stream projects for gas delivery to western Europe.

On Tuesday, Ukrainian lawmakers voted in favor of the so-called Sea Breeze multi-national military exercise led by the U.S. Navy in the Black Sea. Sea Breeze was canceled last year because of opposition in Ukraine's Parliament, which is now controlled by Mr. Yanukovych's Regions Party. Russia has protested foreign navy vessels sailing in the Black Sea.

Source: Voice of America

Tuesday, May 18, 2010

Medvedev Says Rain 'Washed Away' Tensions With Kiev

KIEV, Ukraine -- A thunderstorm made a wet start for the first trip by a Kremlin leader to Ukraine in five years, but President Dmitry Medvedev joked that the rain had "washed away" bad blood between the countries.

President Dmitry Medvedev and Ukrainian President Viktor Yanukovych, right, being drenched in Monday's rainstorm in Kiev during a wreath-laying ceremony at a World War II memorial.

Medvedev signed a raft of agreements with President Viktor Yanukovych at the start of a two-day visit to Ukraine, including on border demarcation, aerospace, interbank cooperation and cooperation between intelligence services.

But difficulties were expected in talks on natural gas after Kiev's cool reception of a proposal by Prime Minister Vladimir Putin to merge Gazprom and Naftogaz, the countries' main state energy holdings.

Medvedev and Yanukovych, however, were all smiles Monday as they moved to deepen a thaw in relations between their countries that started with Yanukovych's election in February.

Medvedev said at the start of talks that trade between both countries had doubled since the start of the year because of the leadership change in Kiev.

“It’s easier for us to talk,” he said in televised remarks.

The last official visit by a Russian president was in early 2005, shortly after the pro-Western Viktor Yushchenko rode to the presidency in a rerun of a flawed election won by Yanukovych.

Speaking to reporters after Monday's talks, Medvedev said mutual trade should be worth $35 billion this year and that the figure should rise to $100 billion in a year.

Medvedev and Yanukovych lit oil lamps at a memorial to the Holodomor famine of the 1930s — an unusual gesture because Yushchenko had angered Moscow by demanding that the famine be recognized as genocide by Soviet leader Josef Stalin.

The ceremony was marred by a thunderstorm, but both leaders brushed off the bad weather with jokes.

Whether the two leaders would discuss a merger between Gazprom and Naftogaz was unclear. Yanukovych has said Kiev would participate in a merger only on fully equal terms and that no energy deals would be reached during Medvedev's visit.

But Gazprom CEO Alexei Miller told reporters in Kiev that talks on unifying the companies would continue.

Ukrainian pipelines deliver about 80 percent of Russia's gas exports to Europe, but Gazprom has twice in the past four years cut supplies to Ukraine because of pricing disputes.

Putin's merger proposal came only days after Medvedev and Yanukovych signed a landmark deal on April 21 that awarded Ukraine as much as $45 billion in gas subsidies in return for an extended lease on the Russian Black Sea Fleet’s base in Crimea.

The agreement appeared to tilt Kiev's policy firmly toward Moscow and caused an outcry among Yanukovych's opponents.

On Monday, about 100 activists from the Svoboda nationalist group held a protest in Kiev against the government's policies toward Moscow, which they described as selling out Ukraine's national interests.

The border agreement signed Monday refers to the Kerch Strait between Ukraine's Crimean and Russia's Taman peninsulas, where the exact delineation has been unclear.

Former Prime Minister Yulia Tymoshenko warned over the weekend that the agreement could mean that Ukraine would lose Tuzla, a tiny island located in the strait.

Details of the agreement were unclear Monday, but Yevgeny Kiselyov, a political analyst and Ukrainian talk show host, said it still sent an important message: that Crimea belongs to Ukraine.

"Recognizing the existing border means recognizing that Crimea is an inseparable part of Ukraine and that any further territorial claims will be impossible," he told The Moscow Times.

Some Russian politicians have called on Russia to seize Crimea and asserted that Sevastopol, where the Black Sea Fleet is based, still belongs to Russia.

Kiselyov said the border deal would also dampen criticism from the Ukrainian opposition that Yanukovych had "sold Crimea" to Moscow with the Black Sea Fleet deal.

State Duma Deputy Sergei Markov conceded that bilateral relations have improved vastly but said some old problems remain. He cited as examples Yanukovych's failure to make good on a pre-election promise to raise Russian to the status of a state language and the fact that Ukrainian schools still use history textbooks written under Yushchenko that describe Russia in "hostile" terms.

Kiselyov said Yanukovych's ascent to power did not necessarily mean an easy ride for Moscow.

"Yanukovych is also a Ukrainian patriot — probably as much as Tymoshenko. Some in Moscow will have to face unpleasant surprises in one or two years because there just aren't any pro-Russian leaders in Ukraine," he said.

Source: The Moscow Times