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Action Ukraine Report

"THE ACTION UKRAINE REPORT"
An International Newsletter
In-Depth Ukrainian News, Analysis, and Commentary

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

"RUSSIAN CLUB" OPENS IN KYIV AT FIVE STAR HOTEL

Ukrainian Prime Minister Viktor Yanukovych says the new Russian
Club in Kyiv, "is a step that will help us unite our efforts." Yanukovych
said at the opening of the Russian Club that it was a specific step in
developing Ukrainian-Russian relations. News reports indicate the
Ukrainian Prime Minister and Russian President Putin's administration
chief Dmitriy Medvedev believe that achievements in integration between
Ukraine and Russia from now on will be multiplied by the newly-
opened Russian Club in Kiev. [articles one, two and three]

"THE ACTION UKRAINE REPORT" Year 04, Number 153
The Action Ukraine Coalition (AUC), Washington, D.C.
Ukrainian Federation of America (UFA), Huntingdon Valley, PA
morganw@patriot.net, ArtUkraine.com@starpower.net (ARTUIS)
Washington, D.C.; Kyiv, Ukraine, WEDNESDAY, September 1, 2004

-----INDEX OF ARTICLES-----
"Major International News Headlines and Articles"

1. TOP RUSSIAN OFFICIAL AND UKRAINIAN PRIME MINISTER
VIKTOR YANUKOVYCH OPEN "RUSSIAN CLUB" IN KIEV
UNIAN news agency, Kiev, Ukraine, in Ukrainian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tue, Aug 31, 2004

2. INTEGRATION BETWEEN UKRAINE AND RUSSIA WILL BE
MULTIPLIED BY THE NEWLY OPENED "RUSSIAN CLUB" IN KYIV
There can be no losers in such integration, top Russian government official.
ICTV television, Kiev, Ukraine, in Ukrainian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tue, Aug 31, 2004

3. UKRAINIAN STATE TV GIVES TOP RUSSIAN POLITICAL PR
CONSULTANT 30 MINUTES OF FREE TV TIME TO PRAISE
YANUKOVYCH FOR PRESIDENT AND CRITICIZE YUSHCHENKO
Political consultant says Russia would benefit from a Yanukovych victory
UT1 State TV, Kiev, Ukraine, in Ukrainian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tue, Aug 31, 2004

4.UKRAINIAN PRESIDENT WARNS AGAINST "REVOLUTIONARY
CHANGE" SAYS UKRAINE IS ON THE RIGHT TRACK
UT1 State TV, Kiev, Ukraine, in Ukrainian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tue, Aug 31, 2004

5.UKRAINIAN INDEPENDENT ASSOCIATION OF TELEVISION
AND RADIO BROADCASTERS IS ASKING PROSECUTOR-
GENERAL HENNADII VASYLIEV TO EXPLAIN INSPECTIONS
OF REGIONAL TELEVISION AND RADIO COMPANIES
Ukrainian News Agency, Kyiv, Ukraine, Tue, August 31, 2004

6. US SENATOR RICHARD LUGAR IN UKRAINE FOR TALKS
REGARDING REDUCING WEAPONS OF MASS DESTRUCTION
VOA News, Washington, D.C., Tuesday, 31 Aug 2004

7. EBRD GRANTS UKRAINIAN RAILWAYS 120M-DOLLAR LOAN
Interfax-Ukraine news agency, Kiev, Ukraine, in Russian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tue, Aug 31, 2004

8. UKRAINE: THE PROCESS OF BREAD PRICE DESCENTATION
BEGAN. HERE WITH NO ADMINISTRATIVE PRESSURE
ACCORDING TO AGRARIAN MINISTER V. SLAUTA
AgriMarket.Info, Dnipropetrovsk, Ukraine, Tue, August 31, 2004

9.WORLD-CLASS CHAMBER CHOIR FROM KYIV, UKRAINE TO
PERFORM IN CANADA FOR THE FIRST TIME THIS NOVEMBER
THE ACTION UKRAINE REPORT, Year 04, Number 153
Washington, D.C., Wednesday, September 1, 2004

10. NEW UKRAINIAN INTERNET JOURNAL PUBLISHED
Volume 1 of Ukrainian Literature has appeared on the World Wide Web
Maxim Tarnawsky, Editor, Ukrainian Literature: A Journal of Translations
University of Toronto, Ontario, Canada, Tuesday, August 31, 2004

11. PRESIDENT KUCHMA INSTRUCTS CABINET TO CREATE
UKRAINIAN CULTURAL MUSEUM CENTER NAMED
"MASTERPIECES OF ART OF UKRAINE"
Ukrainian News Agency, Kyiv, Ukraine, Tue, August 31, 2004

12. UKRAINE CELEBRATES ITS LAST INDEPENDENCE DAY
UNDER PRESIDENT LEONID KUCHMA
COMMENTARY: By Taras Kuzio, The Eurasia Daily Monitor
Vol. 1, Issue 74, The Jamestown Foundation
Washington, D.C., Monday, August 30, 2004

13. UKRAINE: POTENTIAL FOR GERMAN INVESTORS:
ENTERING THE UKRAINIAN MARKET
Article by Arthur Nitsevych, Veritas Legal Advisors, Odesa, Ukraine
Originally published in German Law Journal No. 6 (1 June 2004)
MONDAG, Legal, Regulatory and Financial Commentary
London, New York, Friday, August 27, 2004
=======================================================
ACTION UKRAINE REPORT-04, No.153 ARTICLE NUMBER ONE
=======================================================
1. TOP RUSSIAN OFFICIAL AND UKRAINIAN PRIME MINISTER
VIKTOR YANUKOVYCH OPEN "RUSSIAN CLUB" IN KIEV

UNIAN news agency, Kiev, Ukraine, in Ukrainian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tue, Aug 31, 2004

KIEV - Russian presidential administration chief Dmitriy Medvedev and
Ukrainian Prime Minister Viktor Yanukovych have opened a Russian club
in Kiev.

"The club is a new stage" for those who want to develop relations between
Ukraine and Russia, Medvedev said. They can meet there and exchange
views "regarding all the key issues in Russian-Ukrainian relations". "The
Russian club will possibly aspire to carry out civil examination of the
fundamental intergovernmental agreements," Medvedev said.

Yanukovych said that the opening of the Russian club was a specific step
in developing Ukrainian-Russian relations. The Russian club will "have a
whole set of functions, primarily humanitarian and - of course - economic",
he said. The setting up of the club "is a step that will help us unite our
efforts," Yanukovych said.

Yanukovych said that initiatives that will come out of this club will be
supported at the level of the Russian and Ukrainian governments, and
that he already has an agreement on this with the Russian government.

The Russian club was opened in the Premyer Palats hotel in Kiev [the only
5-star hotel in Ukraine], where a reception was held on this occasion.
=======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER TWO
The Action Ukraine Coalition, "Working to Secure Ukraine's Future"
=======================================================
2. INTEGRATION BETWEEN UKRAINE AND RUSSIA WILL BE
MULTIPLIED BY THE NEWLY-OPEN RUSSIAN CLUB IN KYIV
There can be no losers in such integration: top Russian government official.

ICTV television, Kiev, Ukraine, in Ukrainian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tues, Aug 31, 2004

KIEV - [Presenter] Achievements in integration between Ukraine and
Russia from now on will be multiplied by the newly-opened Russian club
in Kiev. It is an NGO which will strive to foster dialogue between business,
political and civic circles in the two countries. Putin's chief of staff,
Dmitriy Medvedev, has flown in from Moscow specifically to present the
new Ukrainian-Russian organization. The participants in today's ceremony
hope that a Ukrainian club will be opened in Russia soon.

[Correspondent] Explaining Russia's stance on various issues to the
Ukrainian public is the main aim of the Russian club. The organization is
meant to make up for the lack of dialogue between the two countries in
cases where the level of public or political contact lags behind economic
cooperation.

[Yanukovych, in Russian] We hope that the club will become an effective
mechanism to translate words into action - swiftly and without delay. The
initiative that the club will generate will surely be supported - we agreed
with the Russian government on that - at the level of the Ukrainian and
Russian governments.

[Correspondent] Heads of the two countries' regions today also agreed to
unite efforts in solving joint problems. The Ukrainian prime minister
praised the cancellation of VAT on oil exports by Russia. In Yanukovych's
opinion, this will help the creation of the Single Economic Space [of
Russia, Ukraine, Belarus and Kazakhstan, SES]. The Russian presidential
administration head, Dmitriy Medvedev, deems the formation of the SES
to be the most topical issue in Ukrainian-Russian relations.

[Medvedev, in Russian] There can be no losers in such integration. Both
states benefit from such integration. Progress on the path of setting up the
SES will also be beneficial in terms of relations with the European Union.

[Correspondent] Economic integration, security and the development of
society are the subjects of future meetings of the Russian club in Ukraine.
======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER THREE
======================================================
3. UKRAINIAN STATE TV GIVES TOP RUSSIAN POLITICAL PR
CONSULTANT 30 MINUTES OF FREE TV TIME TO PRAISE
YANUKOVYCH FOR PRESIDENT AND CRITICIZE YUSHCHENKO
Political consultant says Russia would benefit from a Yanukovych victory

UT1 State TV, Kiev, Ukraine, in Ukrainian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tues, Aug 31, 2004

KIEV - Russian political PR supremo Gleb Pavlovskiy, who heads the
Effective Policy Foundation in Moscow, has appeared on Ukrainian state
TV praising presidential candidate Viktor Yanukovych's achievements as
Ukrainian prime minister.

Interviewed in the "In Person" programme on 31 August, after the official
opening of the Russian Club in Kiev by Yanukovych and the Russian
president's chief of staff, Dmitriy Medvedev, Pavlovskiy made it clear that
Russia would benefit from Yanukovych's victory in the 31 October election.

"This government has created a new atmosphere in relations between Russia
and Ukraine, and it inspires our business people and our public figures. "We
are seeing a new style, a new tempo [in Ukrainian-Russian relations] this
year, to our own amazement, and in my view, it is owed to the government
of Yanukovych and their desire not just to raise issues, but to solve them.
This is something new, and we would like to see this style maintained."

He remarked that the Ukrainian election campaign was rather slow com-
pared to Russia's, and that this was because the government led by
Yanukovych had reasons to be confident.

"In Europe, a government that has a good economic record is confident. Its
election campaign is slow and confident because it knows that the economy
is doing its work for it. I think there is a similar situation in today's
Ukraine. And that is good. Let us leave drama to personal lives, to theatre,
but not to politics and not to the streets. Let us not have any drama in the
streets."

He accused the front-running opposition leader, Viktor Yushchenko, of
resisting democratic change by opposing government proposals to reduce
the powers of the president before the election. The proposals, tabled in
parliament as constitutional amendments, have drawn criticism from
Yushchenko's Our Ukraine bloc which believes the government wants to
minimize the president's influence in the event Yushchenko wins.

"This is a litmus test that shows who in Ukraine is indeed a proponent of
plurality and democracy and who, regardless of their declarations, wants
totalitarian power," Pavlovskiy said. "It is strange, but the liberal
opposition in Ukraine is against a political reform that increases democracy
and plurality and demonopolizes power in the country."

Without mentioning any names, Pavlovskiy spoke favourably of the two
other opposition candidates, Communist leader Petro Symonenko and
Socialist Oleksandr Moroz, and reserved his harshest criticism for Our
Ukraine.

"It is very good that the majority of candidates, including those from the
opposition, are united in their views on the attitude to Russia, political
plurality and democracy. Those outside the consensus obviously want
something else. They want some totalitarian victory. One has to ask them
what they really want."

Pavlovskiy denied that the opening of the Russian Club had anything to do
with the Ukrainian election campaign, describing it as a purely business
project to further bilateral trade. He added, however, that the club would
conduct its own exit poll on 31 October.

The programme was 30 minutes long. Although viewers were invited to
phone in, no calls were broadcast. No further processing is planned. (END)
=======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER FOUR
A leading news source for thousands around the world
=======================================================
4. UKRAINIAN PRESIDENT WARNS AGAINST "REVOLUTIONARY
CHANGE" SAYS UKRAINE IS ON THE RIGHT TRACK

UT1 State TV, Kiev, Ukraine, in Ukrainian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tue, Aug 31, 2004

KIEV - [Presenter] Stability is what Ukraine needs the most at the moment,
President Leonid Kuchma believes. Visiting Crimea's leading companies, the
head of state noted that Ukraine is on the right track, as are the factories
he visited. Maksym Drabok is on the line to tell us more details about the
president's visit to Crimea.

[Correspondent] The president paid a visit to three industrial companies -
[word indistinct], the Tytan [chemical factory] and the Crimean sodium
plant. The president visited the latter two seven years ago. This time he
came to see what had changed since. [Passage omitted: Correspondent talks
about the companies' successes.]

[Kuchma] The country is on the right track just as these companies are. The
main and most important thing we need is stability. We need no revolutionary
change because revolutions always lead to unpredictable circumstances. We
have too many people who want drastic change but don't know what exactly.

They say - just give us power, give us the steering wheel and then we will
tell you what we will do. So, it should be demanded that such politicians
should first say aloud what they are going to do.

[Passage omitted: Government allocates funds for Crimea to deal with the
consequences of hurricanes and showers.] (END) (ARTUIS)
=======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER FIVE
A leading news source for thousands around the world
=======================================================
5.UKRAINIAN INDEPENDENT ASSOCIATION OF TELEVISION AND
RADIO BROADCASTERS IS ASKING PROSECUTOR-GENERAL
HENNADII VASYLIEV TO EXPLAIN INSPECTIONS OF
REGIONAL TELEVISION AND RADIO COMPANIES

Ukrainian News Agency, Kyiv, Ukraine, Tue, August 31, 2004

KYIV - The Independent Association of Television and Radio Broadcasters
is asking Prosecutor-General Hennadii Vasyliev to explain the inspections of
regional television and radio companies by prosecutor's offices. The
association announced this in a statement, a text of which Ukrainian News
obtained.

"The Independent Association of Television and Radio Broadcasters sent
a letter to the prosecutor-general on August 30, asking him to look into the
situation involving inspections of television and radio companies and
explain the extent to which such inspections are lawful," the statement
said.

The Independent Association said that it has set up a telephone hotline for
provision of legal assistance to television and radio companies during the
presidential election campaign. The association says that it received
information from television and radio companies in the Ternopil, Lviv,
Kirovohrad, Donetsk, Sumy, Volyn, and Kherson regions as well as the
Crimea about inspection of their operations by the prosecutor's office.

According to the association, the prosecutor's office is inspecting mass
media organizations to determine whether they abide by the law "On
Protection of Public Morals." "In connection with this, we do not
understand how the actions of local prosecutorial organs reconciles with
the position of the Prosecutor-General's Office," the association said,
citing its Executive Director Kateryna Miasnykova.

As Ukrainian News earlier reported, the Prosecutor-General's Office
suspended inspection of mass media organizations in April until the end of
this year's presidential election campaign.

In March, President Leonid Kuchma ordered the Prosecutor-General's
Office, the State Tax Administration, and the Emergency Situations Ministry
to impose a moratorium on inspection of mass media organizations during the
presidential election campaign. The parliament imposed a moratorium on
inspection of mass media organizations in March until the end of the
presidential election campaign.

The Independent Association of Television and Radio Broadcasters was
founded in 2000 to protect the interests of television and radio companies
as well as to provide them with consultations and legal assistance. The
Independent Association of Television and Radio Broadcasters says 101
television and radio companies are its members. (END) (ARTUIS)
=======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER SIX
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=======================================================
6. US SENATOR RICHARD LUGAR IN UKRAINE FOR TALKS
REGARDING REDUCING WEAPONS OF MASS DESTRUCTION

VOA News, Washington, D.C., Tuesday, 31 Aug 2004

Washington - A top U.S. lawmaker is in Ukraine for talks on an initiative
to help former Soviet republics reduce or destroy their weapons of mass
destruction. Republican Senator Richard Lugar met with Ukraine's foreign
minister, Kostyantyn Gryshchenko, Tuesday in Kiev.

The Interfax news agency says Mr. Gryshchenko briefed Senator Lugar
on Ukraine's foreign policy and the political situation in the country.
Interfax says the Ukrainian official stressed the importance of increased
cooperation in the Comprehensive Threat Reduction Program.

The program is a U.S. initiative aimed at helping former Soviet republics
reduce or destroy weapons of mass destruction. (END) (ARTUIS)
========================================================
ACTION UKRAINE REPORT-04, No. 153: ARTICLE NUMBER SEVEN
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========================================================
7. EBRD GRANTS UKRAINIAN RAILWAYS 120M-DOLLAR LOAN

Interfax-Ukraine news agency, Kiev, in Russian, 31 Aug 04
BBC Monitoring Service, UK, in English, Tue, Aug 31, 2004

KIEV - The European Bank for Reconstruction and Development has
allocated a 120m-dollar loan for the Ukrzaliznytsya state railway transport
administration.

The loan was granted under state guarantees for 15 years with Libor plus
1 per cent interest, the deputy director-general of Ukrzaliznytsya, Serhiy
Horiley, said during the ceremony of signing the guarantee agreement on
the this project today.

The funds will be spent to launch high-speed passenger railway services
nationwide, in particular, to purchase carriages (about 49m dollars), to buy
equipment for railway track repairs (approximately 29m dollars) and to
renovate the Bezkydskyy railway tunnel (approximately 40m dollars).
The overall cost of the project is estimated at 289m dollars. [Passage
omitted: background to Ukraine-EBRD cooperation] (END)
=======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER EIGHT
Ukrainian Information Website: http://www.ArtUkraine.com
=======================================================
8. UKRAINE: THE PROCESS OF BREAD PRICE DESCENTATION
BEGAN. HERE WITH NO ADMINISTRATIVE PRESSURE
ACCORDING TO AGRARIAN MINISTER V. SLAUTA

AgriMarket.Info, Dnipropetrovsk, Ukraine, Tue, August 31, 2004

KIEV - The prices of bread have been already reduced in seven regions
of Ukraine, as Victor Slauta, Minister of Agrarian Policy, said. He
precised that the prices were reduced for 10-12%.

As the minister affirms, the process of prices of bread reduction began
without administration pressure. They just gave recommendations to
regions, but "there were no decrees of Cabinet of Ministers", -
emphasized V.Slauta.

He told that breadmaking firms find the possibility to reduce prices of
bakery because of the significant reduction of prices of flour [there was
a good harvest in Ukraine this year]. V.Slauta says, that recently it was
2000 UAH/tonne and now one may buy it at a price of 1100
UAH/tonne. Besides minister supposes that bakery become cheaper
owing to competition on the bread market.

As "AIC-Inform" informed earlier, Ukrainian bakers set expectant
position on the bread market because of administrative regulation of
prices in a set of regions. The administration of Ukrainian Bakers
Association considers that today our bakery firms have a possibility
to reduce prices for 0.1-0.15 UAH for a bakery product but at a
condition that there will be no further grain prices growth. But the
problem is that no one can guarantee stability of prices of grain.
That is the reason why baker are not in a hurry to reduce prices of
their products.

Recently Cabinet of Ministers and Public Bakers Organization signed
memorandum according to which Ukrainian Bakers Association is
engaged to pay off 1 million tonnes of provision grain at the price
of state regional purchases till the end of October. Government
representatives assured bakers that there will be no administrative
price regulations. (www.agrimarket.info) (END) (ARTUIS)
------------------------------------------------------------------------
FOOTNOTE: The bread and baking industry in Ukraine is, for the
most part, a complicated, political, bankrupt, government owned,
controlled and regulated Soviet-type marketplace. Many bakeries
and distribution systems are owned and highly subsidized by local,
regional, and city governments. Mayors, regional governors and many
other government officials make a wide variety of decisions regarding
grain purchases and prices, production volumes, retail bread prices, etc.

This system is run and controlled by politicians dedicated to keeping
the price of bread very low, below the cost of production. Private
investors, as one can imagine, are few and far between in this business.
Thirteen years after independence from the Soviet economic system it
is high time for the politicians and the various levels of governments in
Ukraine to get out of the bread and baking business. (Editor)
=======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER NINE
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=======================================================
9. WORLD-CLASS CHAMBER CHOIR FROM KYIV, UKRAINE TO
PERFORM IN CANADA FOR THE FIRST TIME THIS NOVEMBER

THE ACTION UKRAINE REPORT, Year 04, Number 153
Washington, D.C., Wednesday, September 1, 2004

Washington, D.C. - Platium Concerts International (PCI), Toronto, has
announced the first-ever Canadian Concert Tour by one of the world's
finest choirs - The Kyiv Chamber Choir - a choir that always attracts
sold-out audiences to its concerts in Britain and elsewhere around Europe.

The tour includes concerts in 14 cities in 5 provinces across Canada from
November 3 to 28, 2004. Concerts will be performed in Toronto, Ottawa,
Montreal, Winnipeg, Edmonton, Calgary Regina, Saskatoon, Yorkton,
Thunder Bay, Sudbury, Windson London and Hamilton, according to
the PCI statement.

The concerts will feature the best Ukrainian music composed over the
centuries - arranged and presented with the unique style and outstanding
presentation skills of the award-winning Kyiv Chamber Choir.

The choir was organized in 1990 and has twenty-one singers. Mykola
Hobdich is the conductor. The choir has won three grand prix awards
in competitions with other European choirs and has recorded 20 CD's
since it was founded.

PCI will organize workshops with well known local choirs and provide
their conductors with a most essential element - scores of Ukrainian choral
works - in a unique program that will benefit both countries and cultures
in this important and meaningful way.

The Kyiv Chamber Concert Tour is sponsored by the Ukrainian Canadian
Foundation of Taras Shevchenko, and the Buduchnist Credit Union. The
concerts are also supported by provincial choral music federations and
local Ukrainian community organizations according to PCI.

PCI stated that individual concert tickets will go on sale in mid-September
and will be available through Ticketmaster, in the branches of the
Duduchnist Credit Union and from the host organization of each local
concert.

KYIV CHAMBER CHOIR: KYIV, UKRAINE
First Canadian Concert Tour - 2004

Wednesday Nov. 3 * Ottawa Christ Church Cathedral
Thursday Nov. 4 Montreal Notre Dame Basilica
Friday Nov. 5 * Toronto Weston Recital Hall
Saturday Nov. 6 Sudbury Church of Christ the King
Tuesday Nov. 9 Thunder Bay St. Patrick's Cathedral
Thursday Nov. 11 Winnipeg Knox United Church
Saturday Nov. 13 Edmonton Robertson Wesley United Church
Sunday Nov. 14 Calgary Knox United Church
Wednesday Nov. 17 Regina Knox-Metro United Church
Thursday Nov. 18 Saskatoon Knox United Church
Friday Nov. 19 Yorkton St. Mary's Ukrainian Catholic Ch
Saturday Nov. 20 Winnipeg Knox United Church
Thursday Nov. 25 Windsor (TBA)
Friday Nov. 26 London St. Paul's Cathedral
Saturday Nov. 27 Hamilton Melrose United Church
Sunday Nov. 28 Toronto Timothy Eaton Memorial Church
* Performing with Canada's Elmer Iseler Singers
----------------------------------------------------------------------------
For further information: Ernie McCullough, Andrew Witer
Platinum Concerts International Inc., 3044 Bloor Street West,
# 115, Toronto, Ontario, Canada M8X 2Y8
Phone (416) 292-3407, Fax (416) 292-0206
----------------------------------------------------------------------------
FOOTNOTE: The Action Ukraine Report will provide additional
information and updates about the Canadian Tour of the Kyiv
Chamber Choir as they become available between now and November.
=======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER TEN
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=======================================================
10. NEW UKRAINIAN INTERNET JOURNAL PUBLISHED
Volume 1 of Ukrainian Literature has appeared on the World Wide Web.

Maxim Tarnawsky, Editor, Ukrainian Literature: A Journal of Translations
University of Toronto, Ontario, Canada, Tuesday, August 31, 2004

TORONTO- A new Ukrainian internet journal has been publishes.
Ukrainian Literature is a journal of literary translations. It publishes
English translations of the finest works of Ukrainian literature. The
journal is published by the Shevchenko Scientific Society, Inc. New
York.

Volume 1 of Ukrainian Literature contains translations of works by
Valerii Shevchuk, Emma Andijewska, Ievheniia Kononeko, Yuri
Pokalchuk, Oleksander Irvanets, Volodymyr Dibrova, and other writers.
Readers are invited to view the translations on-screen or as printable
pdf files. Point your browsers to http://www.UkrainianLiterature.org.
--------------------------------------------------------------------
Ukrainian Literature: A Journal of Translations
Maxim Tarnawsky, editor, tarn@chass.utoronto.ca
http://www.UkrainianLiterature.org
=======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER ELEVEN
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=======================================================
11. PRESIDENT KUCHMA INSTRUCTS CABINET TO CREATE
UKRAINIAN CULTURAL MUSEUM CENTER NAMED
"MASTERPIECES OF ART OF UKRAINE"

Ukrainian News Agency, Kyiv, Ukraine, Tue, August 31, 2004

KYIV - President Leonid Kuchma has instructed the Cabinet of Ministers
to create a cultural museum center under the name of "Masterpieces of Art
of Ukraine." Presidential press service informed Ukrainian News about this
instruction.

Kuchma directed the Cabinet to create the center within a month on the
basis of the architect Vladyslav Horodetskyi's house, which is an
architectural monument. The center is being created to advertise the
national artistic heritage. Kuchma ordered to earmark the financing for
the center in the 2005 state budget and budgets of next years.

The President gave three months to the Ministry of Culture and Art for
developing a concept of its activities and to ensure that the public has a
wide access to the center's exhibits. Kuchma directed the State Committee
on Television and Radio Broadcasting to ensure coverage of the preparation
of exhibits and the opening of the center.

As Ukrainian News earlier reported, the Cabinet of Ministers has selected
the State Affairs Department as customer for completion of the
reconstruction and renovation of the House with Chimeras at 10 Bankova
Street in Kyiv. The Cabinet in December voiced its intention to allocate
UAH 58.5 million from the national budget for reconstruction of the House
with Chimeras.

Pursuant to the project endorsed by the Cabinet, the total cost of the
reconstruction and restoration of the building was estimated at UAH 165.6
million. The reconstruction and restoration project was calculated for the
period of 2000-2004 and was drafted by the Ukrainian State Scientific
Research and Design Institute UkrNDIproektrestavratsia.

By January 1, 2004, UAH 102.7 million was invested in reconstruction and
restoration of the building, including UAH 2 million extended from the
national budget, UAH 73.2 million drawn as a budget credit, and UAH 27.5
million taken from other financing sources.

The House with Chimeras was built in 1903 under the design of famous
architect Vladyslav Horodetskyi. Now it is considered a monument of
architecture and monumental art of national importance. (END) (ARTUIS)
=======================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER TWELVE
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=======================================================
12. UKRAINE CELEBRATES ITS LAST INDEPENDENCE DAY
UNDER PRESIDENT LEONID KUCHMA
Mixed emotions about Ukrainian independence

COMMENTARY: By Taras Kuzio, The Eurasia Daily Monitor
Vol. 1, Issue 74, The Jamestown Foundation
Washington, D.C., Monday, August 30, 2004

Ukraine celebrated the 13th anniversary of its independence from the USSR
on August 24. The occasion is now regularly marked by a Soviet-style
military parade and lengthy speeches elaborating national "accomplishments."
Kyiv was draped with Soviet-style posters and billboards quoting President
Leonid Kuchma and famous writers. New this year were color posters of
smiling children with the caption, "I was born in independent Ukraine." The
celebrations ended with a rock concert on Independence Square ("October
Square" in Soviet days) in front of tens of thousands of young people.

Another independence day tradition is observed by Ukrainian newspapers,
which publish opinion polls about how Ukrainians view independence. The
Den (August 21) newspaper, edited by the wife of Defense Minister Yevhen
Marchuk, asked Ukrainians if they agreed with the pointed question: "Even
though on the path of statehood there are a lot of obstacles, I nevertheless
still believe Ukraine should be independent." The paper reported that 66%
replied positively and only 11% said "No."

A more representative poll conducted by the Razumkov Center think tank
asked how respondents would vote if a referendum on independence would
be held today. The results indicated that 53% would vote positively, while
28% answered that they would oppose independence. These figures are an
improvement over 2002-2003 when only 47% responded positively and
34% were negative (Zerkalo Nedeli, August 21-27).

Two factors are behind this growing support for independence. First, the
socio-economic situation has improved since 2000, and Ukraine now has the
fastest growing GDP in Europe. Second, the main party opposed to Ukrainian
statehood, the Communists (KPU), is in terminal decline. The size of the KPU
parliamentary faction has declined from 120 (1994-1998), to 80 (1998-2002)
to now only 55. Opinion polls conducted by the Kyiv International Institute
of Sociology show that the KPU presidential candidate, Petro Symonenko,
has dwindling support, polling an average of 8%.

The Razumkov poll also brought out the paradoxes that lie behind their
results. Although only 53% would vote "Yes" in a referendum on independence,
at the same time 77% believe that Ukraine's independence should be
strengthened.

Ukrainian citizens seemingly respect independence, but they also feel
estranged from the Ukrainian government. The gulf between the average
citizen and the ruling elites has grown even wider since the Soviet era.
Some 82% of Ukrainians do not believe they have any influence on society,
while only 6% believe that state officials defend the rights of citizens.

Trust in state institutions is at an all time low. This is seen in public
views of this year's elections, where most Ukrainians believe challenger
Viktor Yushchenko will win, but Prime Minister Viktor Yanukovych will be
declared president (a switch successfully accomplished in the April mayoral
elections in Mukachiv). Ukrainians are again quoting Josef Stalin's comment,
"It's not who wins that's important, but who counts the votes."

Despite the widely proclaimed economic growth, Ukrainians are primarily
troubled by low wages and pensions, inflation, unemployment, high levels
of corruption, and scarce medical care. About 77% of Ukrainians believe
there is a need for a radical change of Ukraine's course.

Although attempts at constitutional changes have dominated Ukrainian
politics for the last year, only 3% of Ukrainians care about this issue.
Some 29% of Ukrainians agree with Yushchenko's view that a dictatorship
is being built in Ukraine.

The gulf dividing the ruling elites and citizens is not the only noticeable
one in Ukraine. Another more explosive chasm, as reflected in the intensity
of the presidential election campaign, is that separating Kuchma and his
oligarchic allies from the opposition. Although both reside in Ukraine,
Kuchma and the opposition live in different worlds.

In an August 24 Wall Street Journal editorial, Yushchenko lambasted the
authorities for the millions of Ukrainians who live in poverty, corruption
institutions "from education to medicine to government," the persecution of
independent media outlets, and the lack of protection from law enforcement
or the courts. Yushchenko described the Interior Ministry's surveillance of
him and his family during the election campaign as a "feature of
totalitarianism."

President Kuchma, however, maintains a completely different view of
Ukraine. In his traditionally lengthy independence day speech, given to
invited dignitaries on August 23, Kuchma lauded a decade of "accomplish-
ments" under his leadership (www.president.gov.ua). Kuchma blamed
Ukraine's Soviet legacy and the opposition for Ukraine's current problems.
"The majority of those at the bottom did not believe, while the majority of
those at the top did not know how to run [independent] Ukraine," Kuchma
admitted.

The president was visibly irritated by the opposition's rallying cry of
"Ukraine without Kuchma!" retorting that, "Ukraine would never be without
Kuchma." He is even more irritated that what he views as his many
"accomplishments" are not recognized because, "Some pygmies in [Ukrainian]
politics are attempting to attain power under the slogan "Ukraine without
Kuchma" (www.president.gov.ua Ukrayinska pravda, August 24).

The most contentious parts of his speech lay in Kuchma's criticism of
Western calls for free elections and Western criticism over the lack of
democratization. Like both Russian presidents Yeltsin and Putin, Kuchma
complained that the West was forcing its own political system on Ukraine.
Paradoxically, however, Kuchma has declared that he wants Ukraine to join
the EU and NATO, without accepting the concurrent need for Ukraine to
adopt a Western political-economic system.

Russia precisely does not seek to join the EU or NATO because Moscow
believes that Russia should forge its own unique path of development. It is
difficult to believe, as Kuchma said in his address, "Europeanization has
become for us our national idea" (www.president.gov.ua).

Kuchma also interfered in the election campaign by stating confidently that
his political course would continue over the next decade. As Yushchenko is
calling for a change in Ukraine's direction, Kuchma's program could only be
continued if Prime Minister Yanukovych succeeds him as Ukraine's next
president. Kuchma, nevertheless, remains convinced that the election out-
come will be decided by the "will of the Ukrainian people." (END)
---------------------------------------------------------------------------
Taras Kuzio is Visiting Professor at the Elliott School of International
Affairs, George Washington University, Washington, D.C. His most
recent books are jointly edited Dilemmas of State-Led Nation Building
and Ukrainian Foreign and Security Policy (both by Praeger, 2002).
========================================================
ACTION UKRAINE REPORT-04, No.153: ARTICLE NUMBER THIRTEEN
Forward The Action Ukraine Report to all your associates in Ukraine
========================================================
13. UKRAINE: POTENTIAL FOR GERMAN INVESTORS:
ENTERING THE UKRAINIAN MARKET

Article by Arthur Nitsevych, Veritas Legal Advisors, Odesa, Ukraine
Originally published in German Law Journal No. 6 (1 June 2004)
MONDAG, Legal, Regulatory and Financial Commentary
London, New York, Friday, August 27, 2004

(1) Following the break-up of the USSR, the Ukrainian economy went
into a lingering depression. In the last few years, however, its potential
has been recovering: Ukraine is now one of the most successful of the
former Soviet republics in attracting foreign investment. The main issue
for a foreign investor is thus not whether to invest, but how best to enter
the Ukrainian market.

(2) A large number of business ventures have proved that exposure in
the Ukrainian market can be a profitable affair, gaining a firm foothold
and succeeding. Germany's Knauf Group, for example, have announced
plans to renovate the Knauf Gips Donbas factory in Soledar, Donetsk
oblast, which they purchased in 2003, greatly increasing production
capacity.[1] Moreover, a number of experts have declared Ukraine to
be a country with enormous potential: it has an educated population,
rich natural resources and is well placed geographically. [2]

Ukraine's 48 million strong population is one of the biggest markets in
Central and Eastern Europe, yet remains seriously under-explored by
foreign investors. The active economic reforms of recent years directed
at macroeconomic stabilization, privatization, and development of private
property and liberalization of the Ukrainian market are public knowledge,
and the increasing tempo of international cooperation is also suggested
by agreements with international organizations such as International
Monetary Fund, the World Bank, as well as by the fact that the inter-
national representative missions of the USA, Great Britain, Canada,
Germany, and others are already at work in Ukraine.

(3) There are a number of specific reasons to encourage foreign
direct investments in Ukraine. Firstly, attracting foreign investment has
been a priority for the Ukrainian government since independence and
continues now in the government's efforts to promote Ukraine as a
destination for foreign capital. During these years, Ukraine has suffered
from a lack of domestic savings and investments and struggled to shift
investment decision- making to the individual company level following
so many years of Soviet investment centralization. Foreign investment
would thus ensure accurate placement of capital whilst stimulating an
inflow of technology know-how.

(4) Ukraine's foreign investment needs are obvious in everything from
agriculture to telecommunications. According to the Ukrainian govern-
ment, the country is in need of around 40 billion US dollars for economic
restructuring, according the EBRD annual convention in 1998. In 2002,
Ukraine received only US$ 531 million in total foreign direct investment
(FDI), and a mere US$ 5.6 billion since independence, a modest sum
when compared to Poland which received $50 billion in FDI during the
same period. [3]

(5) Despite the positive changes of the last few years, there remain a
number of vital economic problems to be solved; for instance, low
living standards (the average salary is approximately USD 100 per
month); technical and technological manufacturing is badly under-
developed. Business is complicated by over-regulation, a heavy tax
burden, inconsistent application of laws and a lack of respect for the
sanctity of the law. Nevertheless, recent economic growth is slowly
strengthening Ukrainian purchasing power. Assuming that economic
growth and domestic investment continues, Ukrainian based companies
are beginning to import higher-quality Western (and German) capital
goods in order to modernize and expand their production capacity.

(6) Almost all sectors in Ukraine can be considered good for invest-
ment. Agro business, food processing and packaging sectors have
been among the most rapidly growing sectors of the economy.
They remain the areas of potential growth in the future. The sector's
potential depends upon transparent privatization and land-reform
policies in agriculture, particularly the passage of The Land Code of
25 October 2001 (effective since 2002). The major provisions of the
Land Code address the right of individuals to own, buy and sell land
and also provides for foreign ownership of non-agricultural land and
clarifies the rights of foreign investors.

(7) The energy sector is another major area for potential investment.
The successful privatization of some electricity distribution companies
was the first step towards improving Ukraine's energy industry,
increasing transparency and reducing corruption in the sector. This
action was also the first truly large-scale privatization performed in
Ukraine to international standards of transparency and fairness.
Telecommunications and information technology, and the aviation
industry are important growth sectors as well.

(8) In order to do business in Ukraine, German investors need to have
a general understanding of the Law on the framework of creation and
functioning of special economic zones (SEZ) of October 13, 1992,
followed by the series of specific laws for certain SEZ. [4] There are
three types of special economic zones in Ukraine:
- Special (free) economic zones;
- Territories with the special investment regime;
- Territories of priority development.

(9) The main purpose of the adoption of these zones is the creation
of new jobs, the enhancement of foreign trade, attracting foreign
investment, the active exchange of knowledge and technologies, the
broadening of export base or import substitution, and so on. The
territories of special investment regimes and of priority development
do not have independent customs borders like free economic zones.
Each zone is managed by an administration that approves and registers
all investment projects to be carried out in the zone. Normally, free
economic zones are created for a period of 10 to 30 years. The
Cabinet of Ministers of Ukraine approved a standard contract for
implementation of investment projects in free economic zones.

(10) About 20 special economic zones and territories of priority
development are currently operating in Ukraine. If foreign investors
wish to create a new company in one of the above areas they usually
need to invest a designated sum (from US$ 200 000 to US$ 1 million).

(11) Corruption is a phenomenon that pervades some levels of society
and government and some spheres of economic activity in Ukraine.
Corruption stems from a lack of institutional traditions of transparent
decision-making and societal understanding of the importance of
corporate governance and transparency. Corruption ranges from
misuse of government resources to non-transparent privatization and
procurement procedures. In short, corruption impacts important
decisions taken at the state level. But fundamental changes have taken
place in the Government's attitude towards corruption.

The President of Ukraine, Leonid Kuchma, has declared the fight
against organized crime to be one of the top priorities of his adminis-
tration. Moreover, there is a broad understanding of these problems
within Ukrainian official circles and a general consensus among reformers
on the need to ensure that foreign investors are greeted with a more
favorable legal and regulatory climate. The hard work of transforming
that consensus into law is one of the most important challenges facing
the Ukrainian political system today. Ensuring that these laws are
effectively executed represents a comparable challenge.

(12) Foreign investment activity is regulated by the Law of Ukraine On
the Regime of Foreign Investments adopted on 19 March 1996. [5]
According to this law, foreign investment includes all kinds of assets
invested by foreigners in the form of:
- hard currency; - Ukrainian currency, in case of re-investment into
the objects of primary investment, - any movable and real estate;
- stocks (shares) and securities in hard currency; - monetary claims
in hard currency which are guaranteed by the first rate banks [6];
- rights of intellectual property, including copyright, useful models,
industrial patterns, trade marks, know-how, etc.; - rights to do
business, including the rights to explore natural resources, etc.
- entering into various contractual agreements (including import-
export contracts, cooperation agreements, or joint production
agreements).

(13) The current foreign investment law of 1996 envisages the regis-
tration of foreign investment with local authorities. Foreign investments
include: creating joint ventures; acquiring stocks (shares) in existing
enterprises; creating 100%-owned foreign subsidiaries; acquiring real
estate (apartments, houses, land use rights); acquiring property rights
by purchasing securities and stocks (shares) of enterprises with such
property rights.

(14) Foreign investors are guaranteed under these rules the un-
hindered and immediate rights to repatriate their profits abroad, but
only following the payment of a 15% withholding tax in addition to
other mandatory payments in Ukraine, Such as profit tax, VAT,
payroll taxes, etc. Any in-kind foreign contributions imported for a
company's capital fund are exempt from customs duties. All import
duties must be paid if an enterprise sells, transfers or otherwise
alienates the contributed property for any reason, including the
termination of activities. Foreign investors are also granted the
general protection of Ukrainian intellectual property rights, and
the right to decide whether to seek patent registrations in Ukraine
or abroad.

(15) According to the Resolution of the Cabinet of Ministers of
Ukraine No.112 of 30 January 1997 On Approval of the Regulations
on the Procedures for State Registration of Contracts on Joint
Investment Activity with the Participation of Foreign Investors
agreements (contracts) on production cooperation, joint production
without setting up a new legal entity signed by Ukrainian companies
with foreign investors in keeping with the Ukrainian legislation are
also subject to state registration.

(16) Opportunities for German investors in Ukraine are based upon
international agreements between Germany and Ukraine, namely, On
avoidance of double taxation of 03 July 1995, On assistance to
realization and mutual defense of investments of 15 February 1993,
On merchant shipping of 10 June 1993, and On International motor
traffic of 10 June 1993, On Air traffic of 10 June 1993.

(17) International Investment Bank JP Morgan named Ukraine the
most investment attractive country in 2001 returning 57.1% of profit
to foreign investors that year, the highest result for any country.
Currently, foreign investment in Ukraine comes from 112 countries,
with the main investors being from the US, Cyprus, the UK, Germany,
and Russia. The biggest investors among EU countries are Great
Britain (about USD 686 million), The Netherlands (about USD 464
million), Germany (about USD 441 million). [7]

(18) There have, admittedly, been many assertions as to the difficulty
of doing business in Ukraine. While this may be true for a newcomer,
such difficulties should not be exaggerated. The main risks are the
same as those everywhere: reliability of business partners. In order to
obtain a due diligence report on a potential Ukrainian partner, a
German company would be advised to contact a law firm or similar
professional agent. Macroeconomic risk is a characteristic of all
emerging markets. Other risks include the purchasing power of the
population, which needs to increase to develop production. Yet the
current situation represents the most stable Ukraine has been since
independence, from both a political and economic standpoint.

(19) Probably no other country in the former Soviet Union has
experienced such a large gap between economic performance and
potential as Ukraine. Endowed with good natural resources, superb
agricultural land, a well-educated population, ethnic peace, and a
strategic location in Europe, Ukraine was positioned to be one of the
most successful of the former Soviet states in attracting foreign invest-
ment. Ukraine's business environment is complex and challenging, but it
presents unprecedented opportunities to investors who can align the
needs of the Ukrainian market with their own needs, combine local
expertise with the best international practices, and use a practical, hands-
on approach in developing the market. The country does offer long-
term investment potential for those who understand the region and
follow a careful risk-tolerant program of development.
--------------------------------------------------------------------
FOOTNOTES:
1. Knauf also unveiled a five-year investment plan envisaging
pumping almost 31 million euros into the plant's modernization.
Similarly, a subsidiary of Germany's Siemens AG agreed a 120 million
euro contract in April this year to supply electrical equipment to a
subcontractor for the Ukrainian state railway monopoly
Ukrzaliznytsya, Siemen's largest order in Ukraine to date. Further,
Dnipropetrovsk' Ukraine-Canada Construction (founded in 2003) and
the Canadian architectural and construction consortium, Corecan, has
started a USD 140 million residential real estate development
project in a suburb of Dnipropetrovsk.
2. E.g. Flemings/SARS Consortium, Report "The Legal and Economic
Environment for Foreign Direct Investments in Ukraine". On February
20, 2004, Ukrainian news reported the Ukrainian Finance Ministry as
stating that "Financial analysts are predicting the phenomenal success
of investments into Ukraine", with the ministry basing its statement on
recent research reports on Ukraine by Britain's Euroinvest business
magazine, Germany's Commerzbank and U.S.-based investment firm
Morgan Stanley.
3. Ukraine Country Commercial Guide FY 2004:
http://buyusainfo.net/www.usatrade.gov.
4. See www.welcometo.kiev.ua
5. See www.murs.com.ua/indexe.html
6. The Law does not make clear what it understands by `first rate banks'.
7. The State Statistics Committee of Ukraine:
http://www.ukrstate.gov.ua/
The content of this article is intended to provide a general guide to the
subject matter. Specialist advice should be sought about your specific
circumstances.
(LINK: http://www.mondaq.com/i_article.asp_Q_articleid_E_28031)
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