Sunday, March 31, 2013

Ukraine's Demographic Improvements: A Case Of Too Little Too Late

WASHINGTON, DC -- One of the points I often try to make is that Russia‘s demographics have not only been improving, they’ve actually been improving faster than those of many of its close neighbors.

Click on the above image, for a larger view.

Yesterday a commenter very kindly noted that Ukraine‘s final 2012 demographics numbers are in, so I thought I would do a quick Russia-Ukraine comparison.

As you can probably tell just from looking at the above graph, Russia and Ukraine’s populations tend to move in the same direction at the same time.

The correlation between the two lines is an eye popping 0.893, which is about as solid a match as you’re likely to get in the real world.

Clearly, there are some very strong similarities.

But what does this actually mean and what, if any, significance does it hold?

Well, it strongly suggests to me that most of the movement we see in both Russian and Ukrainian demographics is the result of structural population factors, particularly the fact that the (relatively) large generation born during the 1980′s is now in prime child-bearing years.

It also strongly suggests to me that the improvements in demographics indicators are not primarily the result of changes in health policy or the efficacy of medical institutions.

I suppose it’s possible that Russia and Ukraine could achieve significant improvements in their medical sectors at the exact same time, but the odds are that there would be some sort of significant lag between the two.

In order to get such a nearly perfect correlation, it seems clear that most of the action is on a structural level.

But while the similarities are strong, there are also some pretty clear differences.

For one thing, the magnitude of improvement in Russia is much greater than in Ukraine.

Russia has succeeded in clawing its way all the way back to the point of natural population stability, something that will take Ukraine at least another several years if it occurs at all.

That Russia has achieved natural population stability is not just important from a psychological level, it means that it has actually been able to eke out some overall population growth when migration is taken into account.

This simply hasn’t happened in Ukraine, and even with 2012′s improved figures it suffered a natural population loss of 142,000 and an actual population loss that was even greater.

Over the past several years Ukraine has routinely had natural populations than Russia’s in absolute terms despite the fact that Ukraine’s population is about 45.5 million and Russia’s is 143.

So while there is a lot of room for debate about what’s going to happen to Russia’s population in the future, and while I understand that I’m somewhat more optimistic than most, it seems clear to me that Ukraine is headed for a future of population decline that is essentially without end.

Ukraine doesn’t experience any substantial in-migration, in fact it exports a fairly large number of people, and even with relatively positive structural factors (e.g. the larger 1980′s generation in child-bearing years) it hasn’t been able to achieve natural population stability.

Yes there are regional differences, Eastern Ukraine’s demographics are much more dire than the Western part of the country’s.

But, if anything, these regional differences are going to become even more problematic in the future: the East-West disagreements are already exceedingly nasty, imagine how much worse they’ll get if it’s about a (relatively) young and (relatively) dynamic West subsidizing a graying and stagnant East.

Considering all of this, it’s hard for me to see how Ukraine doesn’t continue to slowly empty out and wither away, or split even more clearly along linguistic and ethnic lines.

One can overdo the imagery, of course, but it’s not hard to imagine there being trouble with an economically and demographically weakened country that lies at the crossroads of Russia and the European Union.

(The contributor of this article, Mark Adomanis, specializes in Russian economics and demographics.)

Source: Forbes

PACE Ready To Help Ukraine Advance Toward EU Association

KIEV, Ukraine -- Parliamentary Assembly of the Council of Europe is ready to provide Ukraine with necessary help in the signing of the Association Agreement with the EU, stated PACE President Jean-Claude Mignon during his meeting with the head of Ukraine parliament Volodymyr Rybak, informs the press service of the Ukrainian parliament.

Jean-Claude Mignon

Namely, PACE would assist in the implementation of the constitutional reform in Ukraine, advancement of anti-corruption legislation, reforms of public prosecution and law enforcement, as well as justice and election systems.

"I am absolutely convinced that Ukraine is willing to fulfill its commitments. Within the framework of these obligations, it would be expedient that the Association Agreement is signed in November this year. We are looking forward for this, since this document is beneficial both to Ukraine and the EU," stated Mignon.

He approved of the recently released statement of the Ukrainian parliament regarding Association Agreement (AA).

The document includes commitment of the Ukrainian parliament to assure compliance with the recommendations of the EU regarding the signing of the AA.

Head of Ukrainian parliament Volodymyr Rybak reassured the PACE official that Ukraine would do everything in its power to join the European family.

Rybak admitted that Ukrainian legislation had its flaws and in April and May 2013 the parliament intended to adopt laws corresponding with Ukraine's commitments to the Council of Europe.

On March 20, 2013, the EU released a set of recommendations for Ukraine in terms of the reforms to adopt European standards.

The recommendations were part of the annual neighborhood package published by the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy.

The report mentions the main accomplishments, including initialing of the AA text, adoption of a law on asylum and refugee status, combating money laundering, organized crime, drugs, and human trafficking in Ukraine.

At the same time, the authors of the report note poor implementation of the new legislation, cases of selective justice, deterioration of the previously achieved standards during the October 2012 parliamentary elections.

Public procurement and budget transparency have been backsliding throughout 2012, pointed out the report.

Additionally, recommendations of the EU included stepping up efforts towards implementing the Action Plan on Visa Liberalization.

Source: Yahoo Finance

Saturday, March 30, 2013

Ukraine: Cyprus Ripples Not Negligible

KIEV, Ukraine -- News headlines about a Cyprus-crisis contagion have so far focused largely on Slovenia, Malta, Italy and Spain.

But Ukraine could also take a hit.

While Ukrainian businesses are said to have possibly just $1-3bn in Cyprus – much less than the $30bn that has been estimated for Russia – if this money gets confiscated by the bailout levy or tied up by financial transaction limitations, it could be enough to tip the country’s troubled economy deeper into crisis.

As London-based Capital Economics points out in a report this week, the Cyprus bailout deal “may pose much bigger risks for Ukraine, which is already on the brink of a balance of payments crisis.”

Russian and Ukrainian businesses, it said, “appear to be using Cyprus for their financial transactions to pay for imports and to receive payments for exports for tax optimisation reasons.

When the money comes back to Russia/Ukraine, it shows up as FDI inflows on the capital account, rather than as export earnings on the current account.”

This would explain why “tiny Cyprus” is Ukraine’s main source of investment, accounting for some 30 per cent of FDI.

From Capital Economics: The introduction of capital controls in Cyprus risks disrupting these flows, which may ultimately affect business activity and hit vital capital inflows.

In marked contrast to Russia, Ukraine’s economy is already on the brink of a balance of payments crisis.

The current account deficit is currently at a record high of 8% of GDP, and on top of this Ukraine is facing an onerous external debt repayment schedule, with a total of over $55bn due to be repaid this year.

We estimate that Ukraine’s total external financing requirement over the next 12 months stands at close to 40% of GDP.

At the same time, Ukraine’s FX reserves have dropped below three months of import cover, which is the minimum recommended reserve coverage by the IMF.

To make matters worse, the economy slipped back into recession towards the end of last year.

And despite all this, there has been little progress in negotiations with the IMF over a new financing package.

Summing up, Capital Economics said: The upshot of all this is that although the direct impact from the levy on deposits in Cyprus on the Ukrainian economy is likely to be limited, wider vulnerabilities mean that the Cypriot crisis may still be enough to tip Ukraine into a financial crisis of its own.

Without an IMF deal in place, Ukraine is extremely exposed if the Cypriot bailout triggers a fresh spike in financial market tensions.

On the ground in Kiev, the Cyprus crisis ripples are not sparking panic just yet, but they are being felt.

Auditing and accounting giants such as PwC have held seminars advising businesses how to adjust.

Adam Mycyk, partner at the Kiev law offices of Chadbourne & Parke LLP, said that Ukrainian business using “Cyprus as a ‘cash collection’ centre for transactions with their related Ukrainian entities may indeed face an issue, whether because of a shortage of available cash and/or any capital controls that Cyprus puts into place.”

Tomas Fiala, CEO of Kiev-based investment bank Dragon Capital, said “the impact is not too big, but not negligible.”

He added: “A lot of investment, loans and trade flows are structured through Cyprus.

It takes time to set up accounts at other banks in other jurisdictions.

Several billion US dollars got frozen there but should be available within a couple weeks.

Several hundred million will be lost at Laiki and the Bank of Cyprus.”

In talks with an IMF mission that arrived this week for discussions on a potential $15bn bailout, government officials have talked down the effects of the Cyprus situation.

Meanwhile, locals say the Cyprus contagion could increase the cost of borrowing on the Eurobond market for Ukraine’s cash-strapped government.

This in turn could force it to accept the tough IMF bailout conditions.

Fiala said: “There is a bit of contagion, which together with large Eurobond supply from Ukraine caused prices to move down over the last two weeks.

For instance, the long sovereign went down 4 points.

If it should drop further, Ukraine would have a harder time accessing the market.

And this could push Ukraine towards an IMF deal.”

Source: ft
KIEV, Ukraine -- President Viktor Yanukovich of Ukraine does not seem to think that a formal association with the European Union is worth the release from jail of the leading opposition leader Yulia Tymoshenko.

Yulia Tymoshenko's supporters protested outside the courthouse in Kiev during her appeal in Dec. 2011.

What should be the appropriate E.U. response?

The E.U.-Ukraine Association Agreement offers Ukraine substantial advantages.

As negotiated, it includes a Deep and Comprehensive Free Trade Agreement, which by opening the E.U. market for most Ukrainian goods and services would give a substantial boost to the country’s exports.

The advantages of this agreement for the E.U. are also considerable.

By insisting on political and economic reform, it would strengthen the proponents of an open society in Ukraine and promote stability on the Union’s eastern border.

The text of the Association Agreement was initialed by the two sides in March 2012, and last July the free trade component of the accord was also initialed.

The agreement has not been signed since because of ongoing E.U. concerns about the anti-democratic policies of the Yanukovich administration.

These include the arrests of Yuri Lutsenko, another opposition figure, in December 2010, and of Tymoshenko in August 2011, and the irregularities in last autumn’s parliamentary elections.

At a E.U.-Ukraine summit in February, Herman Van Rompuy, president of the European Council, said the E.U. would like to sign and ratify an Association Agreement with Ukraine by the time of the Eastern Partnership Summit in Vilnius in November.

For this to happen, the E.U. is looking for progress in Ukraine’s handling of three issues: prevention of selective justice, elections with international standards, and other reforms as defined in a jointly agreed Association Agenda.

To ensure that the agreement would be ready by November, the E.U. would like to see clear signs of progress by May.

The most persuasive steps that the Yanukovich administration could take would be to free Tymoshenko and Lutsenko.

Since returning to Kiev after the summit with the Union, Yanukovich has expressed a willingness to consider pardoning Lutsenko, who in February 2012 was convicted of embezzlement and abuse of office.

But he has still shown a reluctance to release Tymoshenko, who in October 2011 was convicted of abuse of office.

This is no surprise.

She is the most able opposition leader in the country: Her release could pose an obstacle to Yanukovich winning the 2015 presidential election.

All of this creates a dilemma for the E.U. An Association Agreement with Ukraine serves fundamental E.U. interests.

It would also serve the interests of the people of Ukraine and increase the chances that Ukraine undertakes necessary political and economic reforms.

But how can the E.U. proceed with Tymoshenko in jail?

The answer is to recognize the kinds of incentives that work with the robber barons of Ukraine.

The current E.U. position of denying Ukraine an Association Agreement would effectively sanction the entire country for the sins of the Yanukovich administration. 

It might also strengthen the hand of the truly backward-looking minority in the country that would prefer the customs union with Russia to the prosperity of a free trade agreement with the E.U.

But it does not impose a high cost on the Yanukovich administration and its supporters for their misbehavior.

The threat of sanctions against those responsible for the incarceration of Tymoshenko and the electoral irregularities last autumn are much more likely to achieve the desired results.

Officials in Ukraine who complain about “the imposition of Western values” like the rule of law are certainly fond of their Western bank accounts and European residences.

They love sending their children to Oxford and the Sorbonne.

The possibility that they might be denied such things will have two immediate consequences.

The first is that well-placed officials will not want to be involved in actions such as the jailing of Tymoshenko that could bar their access to the West.

The second is that some influential people in the Yanukovich camp who never bought in to the repression against the opposition would have strong reason either to demand an end to these policies or to distance themselves from an odious administration.

Late last year, the U.S. Congress passed and President Obama signed the Magnitsky Act, which prohibited entry to the United States and use of the American banking system to Russian officials involved in the jailing and death of the Russian lawyer Sergei Magnitsky.

Similar legislation directed against Ukrainian officials involved in the incarceration of Tymoshenko and other political prisoners would be highly effective.

The E.U. could proceed to develop such legislation and to seek its passage in tandem with signing the Association Agreement.

Using these two tools, the Association Agreement and Magnitsky-like legislation, would enable the E.U. to cover all of its interests in Ukraine: developing the closer economic and political with its eastern neighbor and promoting reform.

The Ukrainian people would welcome both the economic opportunity represented by the accord and comeuppance for corrupt leaders.

Source: The New York Times

Friday, March 29, 2013

Dmytro Firtash Launches New Opaque Gas Intermediary

KIEV, Ukraine -- For 20 out of the 22 years of Ukraine’s independence (with the exception of the period 2009–2010), the country’s domestic energy market has been dominated by opaque gas intermediaries.

Dmytro Firtash

Gazprom’s Itera and Yulia Tymoshenko’s United Energy Systems of Ukraine operated during the first decade of Ukrainian independence and were replaced by Dmytro Firtash’s Eural-Trans Gas (ETG) and RosUkrEnergo (RUE) in the second decade.

These have now been replaced in the third decade by Firtash’s OstChem, which Ukrainian journalist Alla Yeremenko described as “RosUkrEnergo—Take Two”. 

RUE provided Gazprom with indirect access to Ukraine’s domestic gas market through UkrGasEnergo, a joint venture created by Ukraine’s state gas company Naftohaz Ukrayiny and RUE.

In March 2008, then – Prime Minister Tymoshenko re-established Naftohaz’s monopoly over domestic sales by removing UkrGazEnergo.

The January 2009 gas contract, which settled the Russian-Ukrainian natural gas dispute, established for the first time a direct gas sale relationship between Gazprom and Naftohaz by removing RUE’s intermediary role.

OstChem Gas Trading AG, part of Firtash’s DF Group business empire, was established in 2011 as his third gas intermediary and was registered in Switzerland in December 2012.

RUE and Centragas were also registered in Switzerland and European Union member country Austria.

OstChem is currently holding negotiations with Turkmenistan and Kazakhstan to supply Ukraine with gas at a lower price than that paid by Naftohaz under the 2009 contract.

OstChem will import 8.124 billion cubic meters (bcm) of gas this year, up from 6 bcm last year when it paid $280 per thousand cubic meters — far less than the $430 paid by Naftohaz.

In 2013, OstChem will supply nearly a third of the gas used by industrial users and is planning to increase its gas imports to 12 billion bcm.

Firtash’s investment in Yanukovych’s 2010 election campaign paid dividends and his business empire doubled in size in 2010–2012 while his capital assets “grew at a fantastic rate” by 540 percent.

Within a year of Yanukovych’s election, Firtash’s fortune soared from $354 million to $2.25 billion.

Firtash was permitted to purchase additional large chemical plants and increased his control over mineral fertilizer plants — from owning one in 2010 (RivneAzot) to acquiring most of them by 2011.

OstChem combines four Ukrainian gas guzzling nitrogen fertilizer producers — Nitrogen, Stirol concern, Severodonetsk Nitrogen and Rovnoazot. 

In August–September 2012, the Nikolai Azarov government permitted Firtash’s DF Group to purchase at reduced prices state shares in 12 regional gas companies that market natural gas to the public.

In October 2012, the government cancelled the 2008 Tymoshenko government resolution, which had re-established Naftohaz’s monopoly on domestic sales, instead opening the door to the domestic market for Firtash.

In December 2012, the same month OstChem was registered in Switzerland, Naftohaz head Yevhen Bakulin proposed permitting middlemen into Ukraine’s gas market to sell gas profitably to industries, while Naftohaz would continue to supply unprofitable (highly subsidized) residential customers.

There are two reasons why Firtash has been more successful than Naftohaz at receiving a lower gas price.

Firstly, Firtash’s gas intermediaries have all by-passed Naftohaz and profits went to the “gas lobby” instead of to the Ukrainian state.

While the Russian state gained from RUE through Gazprom which had a 50-percent share, the Ukrainian state received nothing from RUE as the Ukrainian 50-percent ownership stake actually belonged to the Swiss registered company Centragas, which is owned by Firtash (90 percent) and Ivan Fursin (10 percent) — consequently, the two men owned 45 and 5 percent of shares in RUE, respectively.

Fursin’s five-percent share was a front for other beneficiaries, including former President Leonid Kuchma (who together with President Vladimir Putin established RUE in July 2004) and former senior advisor Serhiy Levochkin who has been Viktor Yanukovych’s chief of staff since 2010.

Fursin and Levochkin were school friends and worked together at Bankivskyy Dim (Banking House) in the 1990s.

Fursin is the owner of the Odessa-based Misto Bank (City Bank) where Yulia Levochkin was deputy head of investment banking in 2003–2007.

Yulia Levochlin and Fursin are Party of Regions deputies.

Secondly, this was a policy of deception as Firtash and Yuriy Boyko are members of Ukraine’s pro-Russian “gas lobby” and both have excellent contacts in Moscow.

Boyko was minister for fuel and coal industry in the first Azarov government (2010–2012), and Naftohaz head Bakulin is Boyko’s ally (Boyko was head of Naftohaz in 2002–2004 and was intricately involved in the launching of RUE).

Energy Minister Boyko undertook virtual negotiations for a discount on the 2009 contract gas price while Firtash concluded negotiations for discounted gas through OstChem.

In return for discounted gas prices beneficial to OstChem, Gazprom was re-allowed to enter Ukraine’s domestic gas market.

Some of the local gas companies purchased by Firtash have been re-sold to Gazprom.

OstChem is the latest example of high-level gas corruption in Ukraine that is again assisted by poor due diligence in the EU and Switzerland, which have never — unlike the United States — pressured Ukraine to clean up its opaque energy sector.

Poor EU due diligence fails to sanction energy corruption in Ukraine and undermines the EU’s “enlargement-lite” policy of integration through an Association Agreement and Deep and Comprehensive Free Trade Agreement.

The EU’s disinterest in energy due diligence in Ukraine also strengthens Firtash — whom journalists Dmitry Kuzmin and Evgeny Magda have labeled a “Russian agent of influence” — and the pro-Russian “gas lobby” within the Yanukovych administration and Party of Regions who seek, such as through the imprisonment of Tymoshenko, to undermine Ukraine’s European integration.

It is little wonder that the Yanukovych administration and Ukraine’s oligarchs are cynically disposed toward the EU, which fails to uphold the principles of good governance it espouses when dealing with non-members.

Meanwhile, the Yanukovych administration fears the US, which alone has been more demanding of Ukraine in calling for greater transparency in that country’s energy sector.

Source: The Jamestown Foundation

Ukraine: Replacing Russian Gas With Cheaper European Imports

KIEV, Ukraine -- Long the main transit route for Russian natural gas exports to Europe – and a big consumer of Gazprom fuel itself – Ukraine is now starting to use its vast gas transit pipeline network in reverse mode.

It is importing less expensive gas from Europe to the West, and at prices lower than its “brotherly” Slavic neighbour charges.

Visiting Budapest on Thursday, Ukrainian Prime Minister Mykola Azarov declared that Ukraine had achieved a “breakthrough towards energy independence” that day by commencing imports of less expensive supplies from Europe via pipeline interconnections with Hungary.

He described the game-changing shift in gas flow as a big step towards breaking heavy dependency on Russian gas which Kiev claims to be paying discriminatory prices for: more than $400 per 1,000 cubic metres.

Interfax-Ukraine news agency quoted Mykola Azarov, Kiev’s premier, as saying: “It is a big pleasure for me to inform you that today … and this is great news … the first molecules of Hungarian gas crossed the Ukrainian-Hungarian border into Ukraine through a reverse flow system.”

Elaborating on the development, Azarov and Ukraine’s Energy Minister, Eduard Stavytsky, said imports from Europe were conducted through a contract inked months earlier with Germany’s RWE, and potentially other suppliers.

Prices are said to be just below $400 per 1,000 cubic metres.

Total imports could reach more than 10 billion cubic meters this year, local officials said.

This could allow Ukraine to cut Russian imports this year by about a third, adding to sharp reductions from last year, which saw Ukraine imports of Russian gas drop to 33 billion cubic metres – down a quarter from 2011.

Ukrainian officials say the so-called reverse flow scheme has become possible due to technological upgrades along a web of pipelines that interconnect with EU countries.

The reverse flow technology allows Ukraine to continue pumping Russian European bound gas flow westwards, while in parallel accepting European imports for domestic use – some possibly of Russian origin but less expensive.

It all started late last year, with Ukraine importing from Poland through a pipeline with limited, 2bcm annual capacity.

Thursday’s news is big, because Ukraine’s pipelines with larger capacity interconnect with Hungary and Slovakia.

Ukrainian last year launched talks with both, seeking approval of the reverse flow schemes.

With Hungary’s approval, an additional 5bcm annually can now flow from the European liberalized market eastward into Ukraine.

Approval from Slovakia, expected later this year, could bring Ukraine’s total capacity for European imports to more than 10bcm.

If this happens, Gazprom will feel it.

Source: ft

Thursday, March 28, 2013

Washington Consultants And Opaque Ukrainian Government Tenders

WASHINGTON, DC -- Foreign Agent Registration Act (Department of Justice) reporting shows that authoritarian Ukrainian Presidents Leonid Kuchma and Viktor Yanukovych have poured far more millions of U.S. dollars into Washington political consultants, lobbyists and lawyers than pro-Western opposition and ruling "orange" forces.

Leonid Kuchma (L) and Viktor Yanukovych

In addition to the on-going contract with Davis Manafort International since 2005, the Yanukovych administration and Party of Regions, Arnall Golden Gregory LLP and Tauzin Consultants LLC provide consultancy services to Party of Regions parliamentary deputy Petro Shpenov for the sum of $40,000 per month.

In 2010, the government of Ukrainian Prime Minister Nikolai Azarov paid $3 million for an international audit of the 2007-10 Tymoshenko government.

The contract was given to Trout Cacheris, a law and lobbying firm, Akim Gump Strauss Hauer and Feld, an international law firm whose client list includes Ukrainian oligarch Rinat Akhmetov, and Kroll investigative agency.

None of the three companies is professional auditors.

Vin Weber was awarded the endowment's Democracy Service Medal in recognition of his service as National Endowment for Democracy chairman (2001-09).

Weber, one of U.S. presidential candidate Mitt Romney's top foreign-policy advisers, is a registered lobbyist for the European Centre for a Modern Ukraine.

This represents a clear contradiction, Weber, after promoting democracy for the first decade of this century, became a lobbyist for a government that is dismantling the democratic achievements of the Orange Revolution.

Weber is a partner at Mercury/Clark and Weinstock, a company formed through a merger of the New York law firm Clark and Weinstock with Mercury Communications.

The ECFMU has additionally hired the Podesta Group to lobby in Washington.

Tony Podesta, like Weber, is among the top lobbyists in the United States and is close to the Democratic Party and his brother, John Podesta, is a former member of President Bill Clinton's administration, is an advisor to President Barack Obama.

The ECFMU's U.S. Allies Project "seeks to inform the American government, opinion leaders, political decision makers and civil society, focusing on reforms being undertaken by Ukraine as part of its commitment to becoming a fully Western-facing democracy."

In 2012, U.S. law firm Skadden, Arps, Slate, Meagher and Flom LLP prepared a lengthy legal investigation of the Tymoshenko trial for $1.25 million in a contract given without a tender.

Skadden have been awarded a second contract by the Ukrainian government to report on expected European Court of Human Rights rulings on imprisoned Yulia Tymoshenko.

The Skadden office in Washington, including head of the office Clifford (Mike) M. Naeve, was asked for comments on their Ukrainian contracts but they never returned the requests.

U.S. State Department spokeswoman Victoria Nuland responded to journalists' questions about the Skadden report by saying, "our concern is that Skadden Arps lawyers were obviously not going to find political motivation if they weren't looking for it."

The report also fails to consider the selective nature of the trials, those who were chosen for trials against Tymoshenko and her -- and former members of her government.

Nuland added, "Whomever -- whoever commissioned this study, whatever the mandate for the study was, it was incomplete and doesn't give an accurate picture." 

Former U.S. Ambassador Steven Pifer also criticized the Ukrainian government for commissioning the report.

In February and July 2012, changes to tender legislation in Ukraine increased the possibilities of corruption by making government contracts opaque and not subject to tenders.

Yanukovych and Azarov supported the changes despite widespread criticism from the opposition and anti-corruption non-governmental organizations, the World Bank and the European Union.

Human rights watchdog Freedom House reported that "The largest embezzlements in the country are associated with state procurement contracts" and "By the end of the year, the Accounts Chamber of Ukraine declared that state procurement had withdrawn into the shadows."

In 2012 the tender process was investigated by Forbes Ukraine magazine, which said it was be a morass of corruption.

Three Donetsk loyalists -- Akhmetov, Yuriy Ivanyushchenko and Oleksandr Yanukovych (president's son) -- received the vast majority of last year's tenders. 

Oleksii Khmara, president of the anti-corruption watchdog Transparency International Ukraine, wrote that:

"For instance, in 2012 alone the Parliament of Ukraine approved eight bills that considerably changed public procurement regulations in Ukraine.

There are a number of gradual exclusions from the tender law that governs over the whole system of state procurements.

One of the primary changes was the exclusion of procurements at the expense of state or community-level enterprises, as well as business companies with the state share over 50 percent."

Baylor University Professor Serhiy Kudelia, a leading expert on Ukrainian politics said, "The entire tender process has for years been probably only second to the energy sector in the scale of rampant corruption that exists in this sector of the Ukrainian economy."

Kudelia added that "Changes in legislation has institutionalized this corrupt process by not requiring the need for tenders and contracts are awarded, as in the case of contracts given to Skadden law firm, at the whim of the government and without any transparent process."

The corrupt nature of Ukrainian government tenders raises concerns that a U.S. company is agreeing to contracts awarded in an opaque manner and therefore this could possibly come under the scrutiny of the Foreign Corrupt Practices Act.

In addition, Kudelia points out that "When in power the opposition will have enough grounds to investigate opaque contracts given without tenders for signs of abuse of power."

Pro-regime political forces in Ukraine have always spent a lot more on political consultants and lobbyists in Washington than the democratic opposition.

U.S. political consultants and lobbyists don't come cheap and the dividends are unclear.

A Washington policymaker with long-time experience working on Ukraine explained that "far more significant for developments in U.S.-Ukraine relations than the role of PR firms has been the political and human rights situation in Ukraine and the role of Congress, including the U.S. Helsinki Commission."

Why are authoritarian Ukrainian presidents and governments spending millions of dollars in Washington but not in Brussels?

Ukraine's leaders fear the United States while looking at the European Union in a cynical manner not believing Brussels is serious about the values it claims to profess.

Source: UPI

IMF Arrives In Kiev For Loan Conference

KIEV, Ukraine -- A team of the International Monetary Fund arrived in Ukraine on Wednesday to check if the government has implemented reforms to qualify for a $15 billion stand-by loan amid a worsening economic environment.

The government needs either the IMF lending resumed or a deal signed with Russia this year to lower natural gas prices to prevent a looming debt crisis and an economic contraction.

“If Ukraine gets the stand-by loan, President Viktor Yanukovych will be able to postpone the issue of a gas pipeline joint venture with Russia,” Yuriy Korolchuk, the head of the Institute for Energy Studies, a Kiev-based think tank, said.

The talks on the gas pipeline joint venture are part of broader 3-year negotiations on lowering of Russian gas prices for Ukraine.

Ukraine overpays Russia about $6 billion in natural gas prices every year after signing a controversial 10-year natural gas agreement in January 2009, according to Prime Minister Mykola Azarov.

Ukraine also needs to repay this year $5.8 billion in earlier loans from the IMF, and the government hopes that the IMF can resume the lending at least to help with these payments.

“We are interested in refinancing of those credits that have been received earlier, for example, from the IMF,” Ihor Prasolov, the economy and foreign trade minister, said at a press conference.

“We have all reasons to believe that this assistance will be provided to Ukraine.” 

Ukraine’s economy was likely to contract in the first quarter after reporting a dismal 0.2% on-year expansion in 2012, analysts said.

High debts and high gas prices are cited by the government as main issues hampering economic growth.

The IMF team will stay in Ukraine until April 10 holding talks with government officials and the National Bank of Ukraine before returning back to Washington. 

First Deputy Prime Minister Serhiy Arbuzov, who has been pushing for the resumption of lending from the IMF and repeatedly traveled to Washington for talks, said earlier Ukraine hopes to get $15 billion stand-by loan.

The IMF suspended its $15.5 billion loan to Ukraine in early 2011 after the government had failed to hike by 30% natural gas prices for households.

The IMF wants the gas prices to increase to stop losses faced by Naftogaz Ukrayiny, the national energy company.

Naftogaz imports expensive Russian gas and resells it at a major discount to the households, leaving a major gap in its finances.

Ukraine received $3.4 billion from the IMF in 2010 after the Washington-based lender had approved its original $15.5 billion loan.

The loan expired in 2012, prompting the parties to start talks on the next stand-by loan.

Source: Ukrainian Journal

Wednesday, March 27, 2013

Death Toll Zero After 100-Year Snowstorm

KIEV, Ukraine -- Ukraine survived the worst snowstorm to hit the country in more than 100 years without loss of life and with transportation infrastructure now gradually returning back to normal, Prime Minister Mykola Azarov said Monday.

An elderly man walks near snow-covered cars during a heavy storm in Kiev at the weekend.

“Thank God that no one died, no one froze. In conditions as extreme as these ones we’re simply lucky,” Azarov said.

Kiev, the country’s largest city, was the worst affected by the snowstorm, which had paralyzed the city infrastructure, forcing the authorities to declare a state of emergency.

“Today we can say that the cyclone has left the territory of Ukraine and no more precipitation is expected,” Oleksandr Vilkul, a deputy prime minister, said.

With snow removing machinery and even armored personnel vehicles deployed in Kiev for the past 48 hours, officials said that most of public transportation routes were to be reopened on Tuesday.

“I want to thank everybody for his or her work to provide livelihoods of Kiev,” Azarov said.

“But overall I estimate the work has been done at the C-grade level.”

President Viktor Yanukovych in a decree signed on Saturday allowed local authorities to deploy army units and heavy machinery to help clearing the streets and highways from snow and rescue people stuck on the road.

In Kiev thousands of drivers were trapped in their cars overnight and had to walk home braving a blizzard at the weekend.

Some people have taken to skiing along streets blanketed in snow.

There has been some disruption to food supplies, with some people complaining about bread shortages in supermarkets.

The authorities say the normal monthly level of snow fell in just 24 hours, while the blizzard conditions caused power cuts in about 600 towns and villages across Ukraine at the weekend.

Hundreds of soldiers have been helping Kiev's citizens to dig out cars buried in snow and the city is struggling to get public transport moving again.

Meanwhile, reports in media on Monday blamed Oleksandr Popov, the head of the Kiev city administration appointed by Yanukovych, for poor reaction of the authorities in early hours of the snowstorm.

Popov, along with Yanukovych and other officials, on Friday traveled to Poland to see soccer match as Poland was hosting Ukraine, despite weather service warning that the snowstorm is going to hit the city on Friday afternoon.

That explained the city’s poor reaction to the storm, which led to serious traffic jams and complicated further snow removal efforts, the report said.

Oleksandr Mazurchak, the first deputy head of the Kiev administration, on Monday denied the reports, and said that Popov had spent time on Kiev streets Friday night and Saturday morning.

“I don’t know who was watching the soccer. I can show you a phone call that I received at 4:00 am in morning on Saturday,” Mazurchak said.

“The head [of the administration] was calling and asking why there is a situation like that.”

Source: Ukrainian Journal

Resolving Case Of Ukraine's Ex-Premier Would Bolster U.S. Ties

WASHINGTON, DC -- Second only to Russia itself, Ukraine is the most important country of the former Soviet Union for U.S. policy in Eastern Europe and Eurasia.

Yulia Tymoshenko during trial in Kiev.

Despite Kiev's decision not to join NATO following President Viktor Yanukovych's election in 2010, Ukraine remains a key U.S. partner.

For example, one of Yanukovych's first acts after taking office was to transfer to the United States Ukraine's stock of highly enriched uranium, something Washington had unsuccessfully pursued since the collapse of the U.S.S.R.

Ukraine has contributed troops to the NATO-led mission in Afghanistan and Ukrainians served in the Iraq coalition as one of the largest contingents.

Though no longer a NATO candidate, Ukraine actively cooperates with the alliance through the NATO-Ukraine Commission and the Partnership for Peace.

But Ukraine's reliability as an international partner remains uncertain in light of the country's internal divisions.

While Ukraine retains one of the most functional democratic political systems in the former Soviet Union, with only perhaps Georgia comparable, foreign observers of recent parliamentary elections pointed to significant flaws.

Corruption and oligarchic pressures remain problems, as well as economic, energy, demographic and fiscal issues.

Most of all, Ukraine remains a deeply divided country.

Reflecting differences between the Russian-speaking east and south, and the Ukrainian-speaking west -- with a middle zone, including the capital, Kiev, up for grabs -- Ukraine's chronic divisions make the United States' red and blue state divide seem insignificant.

Nowhere is this more evident than in the contention surrounding jailed opposition leader and former prime minister, Yulia Tymoshenko. 

One of the leaders of the pro-Western Orange Revolution of 2004, Tymoshenko -- universally recognized by the trademark Ukrainian folk-style braid circling her head -- was convicted in 2011 for "abuse of power" and sentenced to 7 years' imprisonment in connection with a natural gas deal she negotiated with Russia while in office.

She also faces murder charges for the 1996 shooting death of parliamentarian Yevhen Shcherban and two other people.

Tymoshenko's supporters, in Ukraine and abroad, claim that the charges against her are unfounded and that the prosecutions are purely a political vendetta against her by Yanukovych and his unscrupulous supporters.

Particularly in Europe, her imprisonment has been a litmus test of Ukraine's adherence to democracy and the rule of law.

Conversely, Ukrainian prosecutors deny base political motives and insist that they have solid evidence against Tymoshenko for both the Shcherban killings and the bad gas deal with the Russians.

Critics of Tymoshenko allege a long history of corruption, going back to her days as an energy oligarch in her own right (earning her the nickname "the gas princess"), illustrated by the 6-year stint in a U.S. federal prison of one of her close confederates, Pavlo Lazarenko, for extortion, money-laundering and fraud.

As with much else in Ukraine, where the truth lies is anyone's guess.

But there's no avoiding the fact that the divisions over Tymoshenko tap into the profound fault lines that have threatened Ukraine's stability ever since it became an independent country in 1991.

Those divisions, and the poisonous political atmosphere that has characterized independent Ukraine, constitute a threat to Ukraine's domestic peace and international standing far more significant than Tymoshenko's personal guilt or innocence.

At this point, Ukraine can take two paths with respect to Tymoshenko.

First, as things stand now, the relentless zero-sum-game continues, in which eventually either she or her critics (take your pick) stand forth as entirely innocent or entirely corrupt.

Either way, the result is likely to pour gasoline on Ukraine's already smoldering embers, with negative consequences for the whole country.

Alternatively, both Tymoshenko's and the government's supporters can start to look for a way out of the corner they have painted themselves into.

This would require something that has been almost entirely lacking in Ukraine's politics to date: a willingness to compromise and to admit that "we" are not entirely right, and "you" aren't entirely wrong.

As we see in the United States, such comprise isn't easy even in what is considered a mature democracy.

It is even more difficult in a democracy as young as Ukraine's and where the relevant actors have invested so much political capital in demonizing their opponents. 

However difficult it might be for Ukrainians to achieve such a compromise and produce a "win-win" solution based on mutual respect, doing so can only be of benefit to Ukraine's stability and international standing.

By the same token, U.S. and other foreign observers would do well to look beyond today's contentious politicians to Ukraine's enduring potential as a valued and reliable partner.

Source: UPI

Tuesday, March 26, 2013

Parker To lead Texas Tour For Ukraine Delegates

AUSTIN, Texas -- State Rep. Tan Parker (R-Flower Mound) saw the economic opportunities Ukraine has to offer when he traveled to the region last year.

State Rep. Tan Parker

So this week, he is going to guide key Ukraine delegates across the state to show what Texas can provide as well.

Beginning Monday, the governor and lieutenant governor of Kharkiv, along with members of the Ukraine parliament, will travel with Parker to meet with Gov. Rick Perry and key business leaders to tour various sites in Texas where they will learn more about opportunities in the state.

"The sole purpose of this is to promote investment in Texas," said Parker, whose coverage area includes parts of Southlake.

"We want to expand economic opportunities for Texas and Ukraine. We do work out there, and they do work out here. Continued investment will only help our economies."

Parker said upon his trip last spring, he learned that Texas and Ukraine share similar economic efforts.

He invited delegates from Ukraine to come to Texas to explore ideas for a mutual economic benefit.

Parker said the group will spend the week visiting the Houston Livestock Show and Rodeo, the Houston Medical Center, the Johnson Space Center and the Barnett Shale in Denton or Tarrant County.

He said the group will also meet with professors at Texas A&M about agriculture and energy.

"We're going to discuss agricultural-best practices," Parker said.

"Agriculture and energy are the pillars of our economy. We have an abundance of natural resources and farming. We're going to be discussing technology and energy, such as how we drill for oil and natural gas. Ukraine recognizes Texas' leadership in energy and agriculture, so it's important that Texas and the United States embrace Ukraine for our country's best interest. And we're going to talk about cooperation in science and medical technology."

Parker said he hopes Ukraine energy companies can use Texas companies to help with their resources, thus creating opportunities in the state.

On the final day of the trip, the U.S./Ukraine Business Council will host a business roundtable discussion with representatives from some of the biggest businesses that do work in Ukraine.

"I want to set forth the framework to find multiple opportunities for economic development to expand," Parker said.

"I'm constantly looking for a way to grow the Texas economy by attracting new opportunities."

Parker's efforts on economic development are on top of a new role he has assumed.

Parker was recently appointed the chairman of the House Committee on Corrections, which oversees the incarceration and rehabilitation of convicted felons, the operation and management of state correctional facilities, juvenile offenders, procedures of the Texas Department of Criminal Justice and other policy areas.

Source: Star Local News

Russia’s Gazprom Dismisses Ukraine’s Threat To Buy More Gas From Europe

MOSCOW, Russia -- Ukraine’s plan to buy more gas from Europe and reduce imports from Russia will not work because European prices are rising, Russia’s OAO Gazprom said, signalling it will not budge in a price dispute with Kiev.

Gauges at the Gazprom Neft oil refinery in Moscow. Ukraine wants to pay less for gas from Russia because it says a 2009 deal with Moscow set an exorbitant price. 

Ukraine, a transit route for more than half of Russian gas shipped to the European Union, wants to pay less for gas from Russia because it says a 2009 deal with Moscow set an exorbitant price, and aims to buy more from Europe.

But Alexei Miller, head of Russian state gas monopoly Gazprom, said on Monday that spot gas prices, which have spiked recently in Europe, would be unaffordable for Ukraine.

“The price for Russian gas, which is being supplied to Ukraine, is significantly lower than the spot price, which has settled in continental Europe,” Mr. Miller told reporters.

“Ukraine will not be able to bear the spot prices,” he said.

Gazprom sells gas to Ukraine at a fixed price of $430 (U.S.) per 1,000 cubic metres, higher than the recent average European spot price, but European prices are rising. 

“(They are) almost twice as much as Gazprom sells to Ukraine under the long-term agreement,” Mr. Miller said.

The European market is volatile though.

On Friday the spot price of gas in the London market jumped to above 150 pence per therm, or around $630 per 1,000 cubic metres, due to unseasonably cold weather.

By Monday, however, it had fallen to 100 pence per therm, only around 5 pence per therm above the Russian oil-linked gas price.

The March average U.K. spot gas price is around 85.6 pence a therm, so still some 10 pence below the Russian price.

Ukraine began importing a small volume of gas from Europe last year and wants to import up to 8 billion cubic metres of gas a year from central Europe to replace expensive Russian supplies.

Russian President Vladimir Putin and Ukrainian leader Viktor Yanukovich discussed the price dispute earlier this month but there was no breakthrough to end the standoff.

Moscow has demanded concessions as a condition for reviewing the price agreement, such as Ukraine joining a Russia-led trade bloc or giving up control of its pipeline network.

Ukraine agreed its gas contract with Russia under former prime minister Yulia Tymoshenko.

She was sentenced to seven years in prison in October 2011 on abuse-of-office charges, including for her part in signing the gas deal with Russia.

Source: The Globe and Mail

Ukraine: So Near And Yet So Far

KIEV, Ukraine -- Olga will not be able to go and see her husband who lives in France. Both of them are Ukrainian.

Borispol Airport

She used to go and visit him regularly, but since they got married last December she has had more trouble obtaining a visa from French authorities.

“It is not that I feel humiliated,” says Olga, “but I feel helpless. I feel that we don’t have the same rights as young people from European countries, and that is the problem.”

The main preoccupation for young Ukrainians who want to see the world is visas.

European embassies do not hand them out that easily.

Simply submitting a request is a real obstacle course for the inhabitants of Donetsk who live some 700 kilometres (435 miles) from the capital Kiev, home to most of the embassies.

Many young Ukrainians dream of emigrating to Europe.

In Donetsk, an industrial mining town in eastern Ukraine, the average monthly salary is less than 300 euros ($388).

Ukraine is the largest country on the European continent after Russia.

It lies at the cross-roads of Europe: to the West, the European Union and the dream of a better life, and to the east, Moscow, and its historic influence over Ukraine. 

Professor Ihor Todorov, a Europe specialist at Donetsk University, told euronews:

“Some young people have really lost hope and all they think about is how to leave the country. But there are others who are hoping to stay and want to work hard to create better standards of life for themselves, to bring European standards of living to Ukraine.”

Kristina is one of those young Ukrainians who dream of a better life in Europe.

She works as a tourism officer and believes that, soon, Ukraine will be in her past. 

“I’m ready to migrate, to live in a country with higher standards,” Kristina tells us.

“I hope better times will come to Ukraine because we have so much to offer but I don’t know when this time will come and I have only 60 or 70 years to live, I’m not immortal.”

More than 20 years after independence, surveys show nearly half of Ukrainians want to develop closer ties with Europe, while one third feel closer to their historical ally, Russia.

Most do not envisage EU accession for at least another 30 years.

“Our economic and political system, our values don’t answer EU requirements,” Kristina tells us.

“If you look at countries like Bulgaria or Romania which joined the EU not long ago, you can see that it’s not working for them and I’m afraid my country would run the same risk.”

Kristina also works as a mentor for young foreigners who come to work in Ukraine as part of European exchange programmes.

Fabien is one of them.

He has settled in well, and has even swapped the traditional French croissant for the traditional borsch soup for breakfast.

As part of his European Voluntary Service, Fabien teaches Human Rights and Democracy at a Donetsk high school.

International observers from the OSCE denounced last year’s election as a backward step for democracy in Ukraine, marred by “the abuse of power and the excessive role of money”.

“These values (human rights, democracy) already exist here but they’re under-developed,” says Fabien.

“The problem is there’s a lack of civic education here. There’s not enough talk of the place of people in society. There’s not much thought, no real debate. When it comes to politics, people are disillusioned, understandably, and they don’t want to get involved.”

Back to Olga, in another classroom.

She is taking French lessons at the Alliance Francaise in Donetsk, with the hope of going to university in Toulouse.

Whatever it takes, she is determined to find a way of joining her husband in France. 

Source: euronews

Monday, March 25, 2013

GRECO Approves Ukraine's Anti-Corruption Progress

KIEV, Ukraine -- The Council of Europe's anti-corruption monitoring body GRECO acknowledged the implementation of a number of anti-corruption recommendations by the eastern European country.

The feedback was provided at the 59th GRECO plenary meeting, where Ukraine presented its anti-corruption progress report.

Ukraine reported on the adoption of the new Criminal Procedure Code and a law on ethical conduct.

The meeting took place in Strasburg, France, on March 18-22, 2013.

During the session, the Group of States against Corruption ruled that Ukraine had fulfilled recommendations on the development and implementation of anti-corruption strategy and the action plan.

Ukraine implemented recommendations to adopt public servants' code of conduct and provide training on professional ethics and prevention and combating corruption for public servants, reported Minister of Justice Oleksandr Lavrynovych.

The group also welcomed public participation in the evaluation of the state anti-corruption efforts.

At the GRECO meeting, the Ukrainian government presented anti-corruption measures scheduled for the future - adoption of draft laws regulating confiscation procedure, criminal procedure against legal entities, and better financial control.

The drafts were produced following earlier recommendations by GRECO.

Ukraine is expected to present its next anti-corruption progress report to GRECO on December 31, 2013.

Recent anti-corruption efforts of the Ukrainian authorities targeted legislative changes and increased efficiency of state apparatus.

Namely, in February 2013, the Ukrainian customs service reported 33 percent corruption decrease over the last two years due to implementation of the internal risks monitoring system.

Additionally, in 2014, Ukraine plans to make any public services in Ukraine available online, informed the State Agency for Science, Innovation and Information.

Online public services will reduce time spent by clients to obtain a service and help prevent corruption.

Another international anti-corruption initiative - NGO Global Integrity - rated Ukrainian anti-corruption law 100 on the 0-100 scorecard, as reported in November 2012.

The international organization highlighted the improvements in Ukrainian legislation in its annual report summarizing 2011 anti-corruption efforts.

Ukraine joined GRECO in 2006, after ratifying the Criminal Law Convention on Corruption.

Founded in 1999, the multinational anti-corruption group currently features 47 European states, as well as six observers, including the U.S., Japan, and Canada.

In 2007, GRECO produced the first report on Ukraine featuring 25 recommendations.

Source: Yahoo Finance

Ukraine Relatively Unworried By Cyprus Crisis

KIEV, Ukraine -- In the Cyprus banking crisis, almost all the focus has been on Russian money in account there, but Ukraine also has strong business and financial ties with the island.

Ukraine’s Prime Minister Mykola Azarov.

Many companies with Ukrainian links are incorporated in Cyprus .. but experts say that they don’t keep very large sums of money parked there, as it tends to quickly move on to tax havens.

Ukraine’s Prime Minister Mykola Azarov said his countrymen are far less exposed than the Russians:

“We can say that the losses for Ukraine will be way lower than for Russia. This is why Russia has reacted the way it has. For us this won’t have such a serious impact as for Moscow.”

And he added maybe Ukrainians might think twice now about keeping their money abroad as it seems it’s safer at home.

Ukrainian businesses are incorporated in Cyprus for the tax advantages that brings when they move their money there and then bring it back.

Expert Dmytro Boyarchuk with the CASE economic research think tank told euronews that events in Cyprus will disrupt that:

“Probably the oligarchs, the businessmen will take some time to relocate their money in some other banks and other countries and this may affect the amount of investments coming into Ukraine.”

Banking secrecy laws make it difficult to know how much Ukrainian money is in Cyprus.

Estimates range from less than four billion euros ($5.2 billion) to more than 15 billion ($19.5 billion), but certainly much less than the totals of Russian cash. 

Source: euronews

Sunday, March 24, 2013

APC's Deployed On Kiev Streets, Emergency As Record Snowfall Turns Ukraine Into Chaos

KIEV, Ukraine -- A state of emergency has been declared in Ukrainian capital, Kiev, on Saturday as the city is paralyzed by heavy snowfall and blizzard totally abnormal for March.

An armored personnel carrier tows a vehicle on a road covered with snow in Kiev on March 23, 2013.

"Due to the deterioration of weather conditions [heavy snowfall, blizzards, snow-banks] a state of emergency is declared in the capital," the statement by the Kiev State Administration said.

The situation in the city is so dire that Ukrainian President Viktor Yanukovich has signed a special decree urging all government agencies to provide maximum assistance to victims of the snowstorm.

The military is also involved in rescuing the city from its snowbound condition as 550 servicemen are deployed to the capital to aid the community services.

Besides 253 snow-cleaning vehicles, 13 armored fighting vehicles are being used to tow stranded cars, with 270 trucks, 540 cars, 83 buses and 15 trolleybuses already removed from snow banks.

The government has created a crisis center to tackle the snowfalls, which is being personally overseen by Ukrainian Prime Minister Nikolay Azarov.

“In these difficult conditions, the government calls on everybody to show orderliness, self-restraint, cooperativeness, humanity and, if possible, to join the clean-up efforts in the aftermath of the bad weather, to help each other in tough situations," the government’s statement said.

In just one day Kiev saw over 50 centimeters (20 inches) of snowfall - while the entire monthly norm is 47 centimeters.

Community services are ordered to work around the clock, with priority given to cleaning the approaches to the Metro stations and subway stairs, as well entrances to hospitals and grocery stores.

Dozens of flights in Kiev’s biggest airport, Boryspil, are delayed or cancelled, with the city’s second aerial port, Zhuliany, halting operations altogether.

The harsh weather conditions forced the authorities to make Monday, March 25, a day off for all those employed in the government sector in Kiev and the Kiev Region, except medical facilities and entities involved in tackling the aftermath of the snowfall.

Owners of private businesses are also recommended to provide a one-day holiday for their staff.

Meanwhile, bloggers report that some of the city’s residents managed to find joy in the tempest as some daredevils was seen snowboarding in the streets.

The weather conditions remain difficult in other parts of Ukraine as well, which led to electricity shortages in over 600 settlements in ten regions of the country.

The highway services are fighting with snow 24/7 in the north of the country, while the southern regions are suffering from heavy rains.

The snow front is moving eastward and is expected to hit Moscow on Saturday evening or Sunday, lasting until almost the end of March.

A gale warning is announced in Russia's capital and the Moscow Region.

The synoptic service say that the current March may become the coldest in Moscow in the last 33 years as they forecast temperatures of around minus 9 or 10 degrees Celsius (48 or 50 F), which is around nine degrees below average.

Heavy snowfalls are already in full swing in Russia’s Tula and Lipetsk Regions, with snow-clearing vehicles taking to the streets, while the city of Kursk, the administrative center of Kursk Region, which borders Ukraine, was forced to declare the state of emergency, like Kiev.

Subzero temperatures and snow mixed with rain are causing problems to residents of continental Europe and the British Isles as well, where the current March became the coldest in 50 years.

Russia’s national football team was to play a 2014 World Cup qualifier against Northern Ireland in Belfast on Friday.

The match was initially rescheduled to Saturday, but subsequently canceled, with stadium employees failing to remove the ice crust from the pitch.

Source: RT

Saturday, March 23, 2013

Ukrainian Capital Paralyzed By Snowstorm

KIEV, Ukraine -- The city of Kiev has declared a state of emergency after the Ukrainian capital was paralyzed by an unprecedented snowstorm that has stalled car, railway and air traffic.

A driver shovels snow off his vehicle in Kiev, Ukraine, Saturday, March 23, 2013. Heavy snow storms from the Balkan region have been stricken Ukraine since last afternoon, in the last winter attack at the end of the first spring month.

The city was hit by about 50 centimeters (20 inches) of snow in the past day, more than it usually receives per month during this season.

Tractors, armored vehicles and other heavy equipment were dispatched Saturday to clear roads blocked by kilometers-long traffic jams.

Desperate to get home, some Kiev drivers simply abandoned their stalled cars on the roads and set out on foot.

Kiev's main airport, Boryspil, was working with delays, the smaller Zhulyany airport was closed and Ukraine's International Airlines grounded all its planes until Sunday morning.

Source: AP

The Art Of Obtaining Schengen Visa For The European Union

KIEV, Ukraine -- Did you ever wonder what is like to obtain a Schengen visa for a citizen of country that is not a member of European Union? I will show you by example, as a citizen of Ukraine.

The Schengen visa covers travel between its 25 member countries (22 European Union states and 3 non-EU members).

Traveling on a Schengen visa means that the visa holder can travel to any (or all) member countries using one single visa, thus avoiding the hassle and expense of obtaining individual visas for each country.

This is particularly beneficial for persons who wish to visit several European countries on the same trip.

The Schengen visa is a “visitor visa” and is issued to citizens of countries who are required to obtain a visa before entering Europe.

I am an Ukrainian citizen.

First of all I need to mention that I received an invitation from Poland to attend the TTG Travel Outbound Travel Exhibition and accordingly, I needed to apply for a visa via the Consulate of Poland.

In my case, and to reduce the processing, I applied only for the Polish Visa in Donetsk, Ukraine at the Polish visa application center.

What is a visa application center?

It is just a local firm that officially provides the service of processing applications of visas and redirecting it to the closest consulates depending on the location.

If you choose to apply through a visa application center, then you only contact this firm, and you collect your passport again also from this center without having to visit the consulates or embassies.

Before I began collecting necessary documents, I made a few calls to a call center to the Donetsk visa application center for Poland.

After hours of conversations with consultants of this center, they convinced me that for my business visa, I needed not only the invitation to the event in Poland, but the bookings confirmation and prepayment receipts for hotels in poland would be important in the decision of the consulate to grant my visa.

I was told to bring documents to prove the trip was prepaid.

After all these preparations, I scheduled my visit to the visa center and arrived in Donetsk at about 5:30 AM.

It's a 2 hour bus ride from my hometown to Donetsk.

By 9:40 AM I was at the visa center located in a big office plaza in the heart of the city.

The visa application center is not big room where you can find seats for visitors.

There is a desk with application forms, and 3 windows, like in banks.

One window is for obtaining documents and two are to actually apply for the visa. 

When my turn came and I took a seat at one of the windows, the representative who accepts documents asked me the first question.

Do you have insurance? I responded, not yet.

She proposed that I obtain the insurance immediately, which could be done in the same room at the different desk where you can find a manager of an insurance company.

It took me less than 5 minutes to get the insurance, and I went back to the application window where the worker looked up my documents and told me they are fine.

She didn’t like the hotel document, because it indicated it was prepaid only for the first night and not 30% of the entire stay period.

Also, the document did not show the price of one day and how much was charged, despite the fact that the transaction was done with a scanned check.

So the outcome was that she didn’t accept this hotel document.

She then told me that I only needed to apply for a business visa, and for that I only needed the invitation.

I told her I knew that and I had the invitation, but I wanted to know why the call center consultants gave me different information about the list of documents required.

She didn’t say anything, just started to look through the other documents.

She stared at my invitation and then proclaimed, “Its a copy! You printed it from a computer! It’s not possible to accept for processing.”

I agreed with her that it was not an original with a wet stamps and signature, but with the event only one week away, there was no time for those inviting me to deliver original documents to me.

This was an invitation from a big firm that never sent original invitations and believed it was fine to email invitations.

The worker, however, remained adamant and also said that I should ask for a visa for 8 days even though the event in invitation was only for 2 days.

In trying to help, she advised me that the only thing possible to do now in this situation was to have the firm inviting me send a fax.

She told me to ask my host to change the dates of the invitation to match the dates in my application.

She told me I could ask someone in the shopping plaza to let me use a fax machine.

I was in shock. Where would I find a fax? Who would let me use their fax?

Would the firm fax the invitation in time, and would they even fax it?

I visited few offices in the building and found an insurance company that said that I could use their fax but only if I bought insurance for my trip from them.

I had to agree, and after calling my host in Poland, I did successfully receive the fax.

With a happy smile I returned to the room with the three windows.

The worker took 2-3 minutes to read the fax, and then she asked, “Will your host confirm that they invited you if someone from the Consulate decides to call there?”

I answered, “Yes.”

Next she gave me invoices and a little map showing the way to a bank.

I was instructed that I had to do my transaction at this bank only.

The bank was located about 30 minutes away by foot from the visa center, which I only found out after having walked half hour to get there.

At the bank I paid the 35 euro ($45) visa fee, a 35 euro payment for expedited consideration of the application, 20 euro ($26) for insurance, plus a 20 euro payment for the visa center.

The cashier was quick, I got my stamped invoices, and I headed back to the office plaza.

I was back at the window again and the worker checked my documents and invoices.

The most interesting thing I noted is that she made a photocopy of the fax to attach to my application and gave the original back to me, yet she could not accept the printed copy of the invitation from a computer.

I am told that the good news is that my passport will be back at the visa application center after 4 days at 10:00 AM.

This was he day my flight left for Poland.

The bad news is that I won’t know if the visa was approved until I arrived at the visa application center to get my passport back.

I guess it was meant to be a surprise, kind of like a lottery.

Will there be a visa or won’t there be a visa? That is the question.

The workers at the visa application center know that I had a flight the same day.

In addition they warned me that all passports may not arrive in time if there is a snowstorm.

This winter there has been a lot of scandals at visa application centers, because people arrived to get their passports with little or no time to catch a flight.

On the day of my departure, I arrived at the visa application center at 3:00 PM.

Fortunately, everything was successful, and I received my visa.

I have shown you only one example – mine – of applying for a Schengen visa to Poland.

Perhaps the consulates and visa centers of other countries under the Schengen agreement have a better situation with the terms and rules, but Poland is commonly known as one of the most loyal countries of requirements of documents for Ukrainians.

Definitely the system invented for getting this small visa sticker on your passport requires significant improvement.

Source: eTN

Friday, March 22, 2013

Local Grandfather Being Held As Political Prisoner In Ukraine

LOS ANGELES, USA -- It’s a local story that reads more like a political thriller.

The family of a former minister of Tajikistan says their beloved dad departed on a business trip to Ukraine and never came home.

That, was over six weeks ago.

“It will destroy me and my family, it will destroy us,” says daughter Nigina Abdulladjanova.

A desperate plea from a devastated daughter.

“I see fear in his eyes,” Abdulladjanova says.

The family of 64 year Abdumalik Abdullajanov says these images of a defeated and tired man are a far cry from the father who departed Los Angeles, February 4th, on his way to Ukraine for what was to be a simple business trip.

“He thought maybe they had forgotten him it had been 16 years, but they were waiting for him,” Abdulladjanova says.

16 years ago, the former prime minister fled his country of Tajikistan, a region north of Afghanistan, known for drug smuggling and corruption, after he was put on the international most wanted list for war crimes.

“The things they accuse him of — they are looking for someone new to blame", Abdulladjanova says.

According to court documents, Abdullajanov is accused of attempting to assassinate his former political opponent, Emomalii Rahmon, the current president of Tajikistan.

“That’s where I come from, I’m happy I’m not there.”

The grandfather was granted political asylum here in the US where the family insist they have been living peacefully for over a decade until this fateful business trip over six weeks ago.

“He says they will not keep me alive, they will kill me,” Abdulladjanova says. 

According to the UN’s refugee agency, he is being held in Ukraine while Tajikistan has requested extradition … a move the family believes will be his last.

“If Ukraine extradites him they will kill him,” Abdulladjanova fears.

But it’s not just her father’s life that could be in danger … frightened, Niginia translates a vulgar and threatening voice mail from a mysterious man.

“Basically a threat to my dad’s partner his wife and kids will be killed, Abdulladjanova says.

KTLA contacted the State Department, who refused to comment due to privacy issues … but Nigina insist on speaking out about Abdullajanov’s innocence.

“If he goes back I can’t even imagine what they will do to him,” Abdulladjanova says.

Because — if they stay silent, they fear they will never see their father or grandfather again.

In a hearing today – the judge ruled that Ukraine will hold Abdullajanov for another 12-months while they investigate Tajikistan’s extradition request.

Another twist – he is not a Tajik or Ukranian citizen so neither country has a right to hold him.

But despite numerous requests from the US, Ukraine is standing its ground.

Source: KTLA5

Ukraine Parliament Approves Kiev Mayoral Election Plan

KIEV, Ukraine -- Parliament on Thursday gave preliminary approval to a resolution opening the way for a Kiev mayoral election, but developments may escalate into political crisis when the Constitutional Court announces its verdict on the matter.

Arseniy Yatseniuk

The resolution is a compromise that allowed unblocking Parliament earlier this week, but the key issue – the date of the vote – remains unresolved.

Opposition groups traditionally have strong support in Kiev, but for the past three years the Kiev government has been essentially run by an appointee of President Viktor Yanukovych.

Scheduling the vote for this year and winning the post would provide a major boost to morale of opposition parties ahead of crucial presidential election in March 2015. 

The post would also allow control over the capital city – and its law enforcement - that may play strategic role if the presidential election ignites street protests or turns violent.

The opposition groups, including Batkivshchyna, Udar and Svoboda, seek to schedule the vote on June 2, but Yanukovych’s Regions Party has been seeking to delay the vote indefinitely.

The resolution, approved in the first reading, was supported by the Regions Party only after the date of the vote had been taken off the draft.

Regions lawmakers said the upcoming verdict by the Constitutional Court – on the date of the vote – would clarify the matter before Parliament votes on the resolution in the final reading.

The resolution gives lawmakers two weeks to prepare the draft for the second reading.

This time may be too short for the Constitutional Court, which usually makes its verdicts within a month.

The opposition groups do not believe the ruling will be fair and insist that the verdict has been already “written” in the Yanukovych administration.

“Perhaps it is not correct to comment on the ruling by judges, but the Constitutional Court has already showed that it interprets not the constitution, but the position of the Bankova Street [the presidential administration],” OLeh Tiahnybok, the leader of the nationalist Svoboda party, said.

The court “in fact is its spokesperson.”

The opposition groups lost confidence in the Constitutional Court since October 2010 after it had ruled to change Ukraine’s constitution overnight by significantly boosting powers of Yanukovych.

The opposition does not believe the verdict will be fair, which suggests it may trigger another wave of political crisis soon.

“The verdict is ready,” Arseniy Yatseniuk, the leader of Batkivshchyna, said.

“It was written by [Serhiy] Liovochkin [Yanukovych’s chief of staff]. What remains to be done is to transfer this verdict to the court.”

Yatseniuk said among potential scenarios that may be considered by the presidential administration is postponing the Kiev mayor vote until after the presidential election in 2015.

Another scenario is apparently holding the mayor election this year, but restricting the mayor’s term in office to two years from five, he said.

This would weaken the mayor right for the time of the crucial presidential election in March 2015.

The opposition groups will keep pressure growing in order to approve the resolution in the final reading before April 2, because at least two months are needed to organize the vote on June 2.

Oleksandr Yefremov, the leader of the Regions Party in Parliament, said lawmakers will make up their minds about the date of the vote only after the Constitutional Court issues the verdict.

“We, as a group, we’ll be approving decision after the Constitutional Court verdict,” he said.

“If the court has enough time to issue the verdict [within two weeks] we will be voting in line with the verdict. If not, we will be waiting for the verdict.”

“And, please, we don’t want any insinuations that Regions Party is cheating,” he said.

Source: Ukrainian Journal

Thursday, March 21, 2013

Ukraine's Largest Cable TV Operator Volia Launches A Video CDN Powered By Anevia

PARIS, France -- Anevia, a leader in video streaming and infrastructure solutions for OTT, live TV and video-on-demand (VoD), today announced that Ukraine''s largest cable television provider, Volia, has selected ViaMotion to support their advanced video Content Delivery Network (CDN).

The best part about Ted's (L) appearance is that it was computer generated ViaMotion capture technology, so if you were inside the Dolby Theatre, for the Oscars, all you saw was Mark Wahlberg talking to an empty stool.

Anevias upcoming Over-The-Top (OTT) services will also be available on Volia''s CDN.

The ViaMotion suite is a software-based multiscreen and OTT video streaming solution that optimizes infrastructure resources, accelerates content delivery and takes the on-any-device video experience to the next level.

Volia has deployed the ViaMotion together with Minerva iTVFusion to deliver more than 130 live channels with enriched Catchup and VOD services to any type of device.

Such advanced TV services have cemented Volia''s rapid emergence as a key player in the region and helped to bring the best product values to its customers.

"With Anevia technology, we have been able to support the growing number of viewing devices in use. The fast implementation time combined with the latest feature-set has validated our decision in choosing a joint solution from Anevia and Minerva." said Gyorgy Zsembery, CEO of Volia.

"March is the start of the journey with a launching of the first step of the "VOLIA Smart HD" product.

But a whole roadmap was created to continuously bring the best values to our customers in cooperation with our partners."

"Volia''s recent decision bears further testament to the way we accelerate innovation for our customers, allowing them to optimize and monetize video delivery with reduced decision to service delivery time", said Tristan Leteurtre, CEO at Anevia.

"We are extremely proud of this new partnership."

About Anevia 

Anevia provides innovative video streaming and infrastructure solutions for multi-screen OTT, live TV and video-on-demand (VoD).

With over 1,000 deployments in 70 countries, representing many millions of users and over 25,000 live channels, Anevia is a leader in delivering video solutions to telecom operators, broadcast service providers and the hospitality market.

About Volia 

VOLIA is a leading Ukrainian nationwide provider that offers a set of modern telecommunication services: analog, digital & HD TV, interactive TV "VOLIA Smart-HD", high-speed Internet and services of the biggest Ukrainian data-centre.

VOLIA''s shareholders are: Providence Equity Fund, Goldman Sachs, Eton Park, a family of funds managed by SigmaBleyzer: UGF III and SBF IV, whose investors include the European Bank for Reconstruction and Development (EBRD).

Source: Yahoo Finance

Ukraine To Continue Nuclear Cooperation With US – Yanukovych

KIEV, Ukraine -- The president of Ukraine said Wednesday that his country wants to continue cooperating on nuclear nonproliferation with the United States and build on its past achievements.

US Undersecretary of State Wendy Sherman

Viktor Yanukovych said at a meeting with US Undersecretary of State Wendy Sherman in Kiev that combined efforts in preventing the spread of nuclear weapons underscored the two nations’ reliable relationship.

“We are ready to continue fruitful cooperation in nuclear security and nonproliferation issues,” Yanukovych said.

The United States has been actively engaged in seeking to mitigate the potential threat of poorly secured nuclear facilities and weapons stockpiles across the former Soviet Union since the early 1990s.

Yanukovych pledged at a nuclear summit in 2010 to ensure that Ukraine transferred all its enriched uranium to Russian depositories by March 2012.

The United States offered to finance the process.

Kiev’s success in meeting the deadline was reciprocated by a US grant of $67 million to Ukraine for the construction of a nuclear research installation.

“We are now introducing state-of-the-art technology to replace high-enriched uranium with low-enriched [uranium],” Yanukovych said.

Source: RIA Novosti

Wednesday, March 20, 2013

Ukraine Opposition Surprises Supporters By Denouncing Gay Marriage

KIEV, Ukraine -- Leading Ukraine Opposition figure, Arseniy Yatsenyuk, risks disappointing liberal supporters of his All-Ukrainian Union "Fatherland" party, having publicly rejected gay marriage at a recent rally.

Arseniy Yatsenyuk

Yatsenyuk was confronted by a representative of the Western-Ukrainian Lesbian Gay Bisexual and Transgender community who said to him:

"Many people live in love, but not in law. Promise me that if you become president, you will legalize same-sex relationships, and I promise that all gays and lesbians will vote for you."

But Yatsenyuk, who leads "Fatherland" in the absence of jailed leader Yulia Tymoshenko, revealed that he rejects gay marriage because his personal beliefs stand in the way of any political position.

"I can tell you about this separately as a Christian and a Greek Catholic," he said.

"I do not support gay marriage."

His reply has disappointed the LGBT community in Ukraine, which has looked to the Opposition for accommodation on social issues.

Yatsenyuk's stance will also surprise western European gay rights groups, which had warned gay football fans last year that they could experience hostility while travelling to Poland and Ukraine for the Euro 2012 championship.

By the end of the tournament there were few reported problems.

Last month Ukraine's foreign minister Leonid Kozhara announced that Ukraine will introduce a law prohibiting discrimination against gays, which will afford them protection in line with European Union nations.

"The issue of homosexuals is now generating strong controversy in Ukraine, but our government has already prepared a draft law and will soon submit it to the parliament," he said.

Source: Yahoo Finance

MPs Throw Punches In Ukraine Parliament Brawl

KIEV, Ukraine -- Ukraine's parliament was suspended for a short period after fighting erupted between MPs from the president's party and a far-right opposition faction, over a speech made in Russian.

Clashes broke out when the parliamentary leader of President Viktor Yanukovich's Party of the Regions, accused deputies from Svoboda of being neo-fascists after they booed a speech he made in Russian.

The Party of the Regions is favoured by Russian-speaking Ukrainians in the east and south of the country while Svoboda has its power base in western Ukraine, where Ukrainian dominates.

Speaker Volodymyr Rybak could be heard shouting "Stop it. What are you doing" and "Calm yourselves".

Source: BBC News

Tuesday, March 19, 2013

Ukraine Plans New Drilling Rig Tender After $1.2 Bln Deal Fails

KIEV, Ukraine -- Ukraine, whose deal to buy offshore drilling rigs worth $1.2 billion from Singapore's Keppel fell through this month, will hold a new tender for the rigs, Energy Minister Eduard Stavytsky said on Monday.

Keppel, the world's largest builder of offshore oil rigs, said this month its contract with Ukrainian state energy firm Naftogaz would not be taking effect.

Under the deal, Keppel was to build two semi-submersible drilling rigs for use in the Azov and Black seas.

Stavytsky said the deal had failed because Naftogaz could not secure the needed funds in time under a leasing agreement.

"We need drilling rigs and we will soon hold a new tender," Stavytsky said.

He did not say when exactly the tender would take place.

Last October, when Naftogaz announced the tender for rigs that was later won by Keppel, it said they would be used first at the Palas field in the Black Sea, which may hold up to 86 billion cubic metres of gas and 45 million tonnes of oil.

The tender was carried out under previous energy minister Yuri Boiko who lost his job to Stavytsky in a reshuffle last December.

Developing offshore gas fields, as well as onshore shale gas deposits, is part of Ukraine's strategy to ease its dependence on Russian energy supplies.

Kiev has already signed a production sharing agreement (PSA) with Shell to develop the Yuzivska shale gas field and is negotiating similar deals with Chevron on the Olesska shale field and ExxonMobil on the Skifska offshore field in the Black Sea. 

Source: Yahoo News

Why Cyprus Ripples Are Hitting Russia Harder Than Ukraine

KIEV, Ukraine -- Like Russian ones, many Ukrainian companies do business through offshore special purpose vehicles or holding companies registered in Cyprus.

People try to withdraw money from a cashpoint machine in the Cypriot capital, Nicosia. The levy on Cypriot bank savers as part of the country's rescue package has been met with shock and fury.

By some estimates, billions of dollars with Ukrainian roots flow through Cyprus into offshore tax havens each year.

And large portions of this – some $17bn since independence in 1991 – have made their way back into Ukraine through the Cyprus conduit, which is, in fact, the largest contributor of foreign direct investment in the Ukrainian economy.

But this does not mean that most Ukrainian companies exploiting the Cyprus tax loophole actually stash their cash there.

And if they don’t, exposure will be limited, analysts say.

“Even though many ‘Ukrainian’ companies are incorporated in Cyprus, that does not necessarily mean they keep all their funds in Cypriot banks,” said a senior lawyer active in the CIS region.

With events in Cyprus unfolding over the weekend, it’s been a nervous period for many businesses and wealthy individuals in Russia and Ukraine, who have long exploited a double taxation treaty with Cyprus to funnel profits and income offshore.

But, at least in Ukraine, much of the panic had dissipated by Monday on the realization that there may not be enough Ukrainian cash parked for long enough in Cyprus to be vulnerable to the one-off levy on deposits that the island’s leaders are mulling in return for an EU bailout.

Eric Nayman, a bank sector expert and managing partner of Times, a Kiev investment company, told the Interfax news agency Ukrainian individuals and companies could pay from $100m to $200m under the levy, implying that $1bn to $2bn in Ukrainian money is parked in Cyprus.

“I really doubt that Ukrainian funds are being caught up by the one-off Cypriot levy on deposits,” said Jorge Intriago, partner at Ernst & Young in Ukraine.

“In my view Cyprus is not an investment destination in which Ukrainian investors keep large amounts of funds. For Ukrainian business the whole purpose is to use Cyprus as a conduit to repatriate funds out of Ukraine and into other jurisdictions in a tax-efficient manner.”

When the panic erupted this weekend, many Ukraine watchers rushed into assuming that since many Ukrainian businesses are owned or operate through Cyprus companies, they must stash much of their cash in Cyprus itself.

But, as they say, the devil is in the details.

As Intriago explains: “If you have shares in Ukrainian businesses, you want to place your holding in Cyprus, because under the double tax treaty, dividends distributed from Ukraine to Cyprus are not subject to withholding tax in Ukraine and they are also not subject to tax in Cyprus."

"And when you distribute dividends out of Cyprus to non-resident investors, there is also no withholding tax. In summary, you took the dividends out of Ukraine to Cyprus and out of Cyprus to the final destination with no tax leakage."

“The other key element for Ukrainians… is that if they exit a company, then the capital gain from the disposal of the Ukrainian shares by the Cypriot holding is not subject to capital gains tax in Cyprus. Since the dividends are also not subject to withholding tax in Cyprus, the capital gain generated by the sale of the Ukrainian shares can be repatriated out of Cyprus in a very tax-efficient manner.”

As if to underscore the point, System Capital Management, a diversified holding company controlled by Rinat Akhmetov, the richest of Ukraine’s multi-billionaires, issued this statement on Monday:

News organisations are turning to SCM asking to explain whether a potential decision of Cyprus parliament on a one-time levy on bank deposits would affect the Company.

SCM states that such decision of Cyprus parliament would not affect the financial standing of the SCM Group in any way.

Through various companies, including Cyprus registered ones, Akhmetov’s SCM controls a large share of Ukraine’s mining, steel and electricity production, with other interests in media, real estate and agriculture.

It seems unlikely the levy will deter Ukrainians from using Cyprus in future.

Intriago again: “I don’t believe much will change and this definitely does not rule out the attractiveness of Cyprus going forward. Cyprus has the respectability and rule of law of being an EU country, English law to govern transactions and investments and a very friendly tax regime, especially for Ukrainians.”

So, why is Russia’s leadership crying foul, and loudly so, over the Cyprus developments?

It appears there is much more Russian money actually parked there, perhaps simply by virtue of Russia’s bigger size.

Moody’s reckons this includes $19bn in deposits by Russian companies and $12bn in deposits by Russian banks – rather more than the estimated Ukrainian exposure.

But then, as Roman Shpek, a member of Ukraine’s central bank supervisory board, said:

“The Russian bank sector, by virtue of being larger and more developed in scale, has more exposure abroad, including in Cyprus.”

Source: ft