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Action Ukraine Report

"THE ACTION UKRAINE REPORT - AUR"
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"

NATIONAL BANK OF UKRAINE RESOLUTION 482 CANCELLED
Good News from Ukraine for Foreign Investors
[article eleven]

"THE ACTION UKRAINE REPORT - AUR" - Number 486
E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, WEDNESDAY, May 18, 2005

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

1. PRIME MINISTER YULIYA TYMOSHENKO UNVEILS PLAN TO SET UP
CHAIN OF GOVERNMENT OWNED GAS STATIONS TO COUNTER
RUSSIAN OIL COMPANIES' MONOPOLY
Uliana Kozhukh, Oleksandr Khorolsky, Ukrinform
Kyiv, Ukraine, Monday, May 16, 2005

2. PRIME MINISTER YULIYA TYMOSHENKO UNVEILS INTENTION TO
INITIATE NSDC SESSION TO SPECIFICALLY ADDRESS SITUATION
ON SHORTAGES IN MEAT MARKET
To shortly sign an errand to construct new packing houses
Oleksandr Khorolsky, Ukrinform, Kyiv, Ukraine, Mon, May 16, 2005

3. PM TYMOSHENKO ORDERS GOVERNORS TO DRAFT PROJECTS
TO SUPPLY REGIONS WITH MEAT BY DECEMBER
Ukrainian News Agency, Kyiv, Ukraine, Monday, May 16, 2005

4. SIX-MONTH INFLATION "RESERVE" EXHAUSTED
Government's attempts to curb inflation have produced only modest results
Prices may shoot up by 15.3% by the end of the year
By Vitaliy Kniazhansky, The Day
The Day Weekly Digest in English, #16
Kyiv, Ukraine, Tuesday, 17 May 2005

5. UKRAINE'S TIMOSHENKO DENIES GOVT ONLY PLANS TO
REVIEW 29 PRIVATISATIONS
She Contradicts statements by Vice Prime Minister Anatoly
Kinakh and President Viktor Yushchenko
AFX Europe (Focus), Kyiv, Ukraine, Monday, May 16, 2005

6. TWO RUSSIAN OIL COMPANIES RESTRICT RETAIL
FUEL SALES IN UKRAINE
Era, Kiev, in Ukrainian 1300 gmt 16 May 05
BBC Monitoring Service, UK, in English, Monday, May 16, 2005

7. UKRAINE SEEKS ALTERNATIVES TO RUSSIAN OIL TO EASE
PETRO SHORTAGES
UT1 State TV, Kiev, in Ukrainian 1800 gmt 16 May 05
BBC Monitoring Service, UK, in English, Mon, May 16, 2005

8. UKRAINE SEEKS RUSSIAN TALKS ON DEEPENING FUEL CRISIS
By Tom Warner in Kiev, Financial Times
London, UK, Tuesday, May 17 2005

9. UKRAINE PRESIDENT CRITICIZES CABINET OVER OIL CRISIS
Interfax-Ukraine, Kiev, Ukraine, Monday, May 16, 2005
BBC Monitoring Service,UK, in English, Monday, May 16, 2005

10. UKRAINE PARLIAMENT LIFTS IMPORT DUTY ON HIGH-OCTANE
PETRO AND DIESEL FUEL
Interfax-Ukraine news agency, Kiev, in Russian, 17 May 05
BBC Monitoring Service, UK, in English, Tue, May 17, 2005

11. NATIONAL BANK OF UKRAINE RESOLUTION 482 CANCELLED
Good News from Ukraine for Foreign Investors
Dr, Irina Paliashvili, President
Russian-Ukrainian Legal Group
Kyiv, Ukraine, Tuesday, May 17, 2005

12. FINANCE MINISTER VIKTOR PYNZENYK STATES 2005 NATIONAL
BUDGET'S PERFORMANCE OVER 2005'S FIRST FOUR
MONTHS AS DEFICIT-FREE
Ukrinform, Kyiv, Ukraine, Monday, May 16, 2005

13. UKRAINIAN FIRM DONBAS INDUSTRIAL UNION (DIU) WINS RIGHT
TO NEGOTIATE PRIVATIZATION OF POLISH STEELMILL
PAP news agency, Warsaw, Poland, Mon, 16 May 05

14. YEVHEN CHERVONENKO CALLS STATEMENTS BY RUSSIAN
POLITICIANS ON HIS ACCEPTING BRIBE TO TUNE OF
THREE MILLION USD AS PROVOCATIVE
Ukrinform, Kyiv, Ukraine, Tuesday, May 17, 2005

15. PRESIDENT YUSHCHENKO SAYS UKRAINE MUST JOIN
EUROPEAN DEMOCRATIC FAMILY
PAP news agency, Warsaw, Poland, Monday, 16 May 2005

16. THE BIENNIAL WORLD MONUMENTS WATCH LIST OF 100 MOST
ENDANGERED SITES
List includes ancient city of Panticapaeum and the
Tyras-Belgorod Fortress, both in Ukraine
Irish Times, Dublin, Ireland, Tue, May 17, 2005

17. PRESIDENT SIGNS DIRECTION TO ERECT MONUMENT TO
RUKH FOUNDER VIACHESLAV CHORNOVIL IN DOWNTOWN KYIV
Ukrinform, Kyiv, Ukraine, Saturday, May 14, 2005

18. EVENTS TIMED TO 61ST ANNIVERSARY OF DEPORTATION OF
ARMENIANS, BULGARIANS, GREEKS, GERMANS AND CRIMEAN
TATARS FROM CRIMEA START IN SIMFEROPOL
Gulnara Kurtaliyeva, Ukrinform, Kyiv, Ukraine, Tue, May 17, 2005

19. PRESIDENT VIKTOR YUSHCHENKO PARTICIPATES IN RALLY
TO COMMEMORATE VICTIMS OF POLITICAL REPRISALS
Says Oktiabrsky (October) Palace in Kyiv must be converted into a museum
Ukrinform, Kyiv, Ukraine, Monday, May 16, 2005

20. "FIGHTING FOR THE RIGHT TO BE"
Ukraine's Patriotic War: A Historian's Perspective
By Prof. Volodymyr Shevchenko, History
Meritorious worker of public education of Ukraine, Kyiv
The Day Weekly Digest in English, # 17
Kyiv, Ukraine, Tuesday, May 17, 2005

21. KATERYNA YUSHCHENKO, CHAIRWOMAN OF UKRAINE 3000
FOUNDATION'S SUPERVISORY PANEL, TO ANNOUNCE
NEW CHARITABLE PROJECT 'FROM HOSPITAL TO HOSPITAL'
Ukrinform, Kyiv, Ukraine, Saturday, May 14, 2005

22. PRESIDENT VIKTOR YUSHCHENKO SENDS MESSAGE OF THANKS
TO AMERICAN DOCTORS WHO SAVED UKRAINIAN GIRL NASTIA OVCHAR
Ukrinform, Kyiv, Ukraine, Friday, May 13, 2005
===============================================================
1. PRIME MINISTER YULIYA TYMOSHENKO UNVEILS PLAN TO SET UP
CHAIN OF GOVERNMENT OWNED GAS STATIONS TO COUNTER
RUSSIAN OIL COMPANIES' MONOPOLY

Uliana Kozhukh, Oleksandr Khorolsky, Ukrinform
Kyiv, Ukraine, Monday, May 16, 2005

KYIV - Speaking at a news briefing in Kyiv on Monday, Prime Minister Yuliya
Tymoshenko unveiled the Government's scheme to create a chain of
[government owned] gas stations, which will sell petroleum products of the
UkrNafta company and the Kremenchuk Oil Refinery.

According to Mrs Tymoshenko, the UkrNafta was to announce a tender for
construction of a thousand new gas stations on Monday, May 16.
The gas stations will be owned by the UkrNafta company, the Prime Minister
noted. As she remarked, this move will allow Ukraine to normalize the
petroleum market's behavior and prices for petroleum products.

As the bulk of existent gas stations belong to the Russian companies TNK
and LUKOil, she said, the Government's objective is to create an alternative
chain of filling stations, which will rely on steady supplies of petroleum
products by the UkrNafta and the Kremenchuk Oil Refinery. -30-
===============================================================
2. PRIME MINISTER YULIYA TYMOSHENKO UNVEILS INTENTION TO
INITIATE NSDC SESSION TO SPECIFICALLY ADDRESS SITUATION
ON SHORTAGES IN MEAT MARKET
To shortly sign an errand to construct new packing houses

The scheme, she noted, provides for producing 100 tons of pork on
30 ha of lands, and construction of such facilities will take
three to six months.

Oleksandr Khorolsky, Ukrinform, Kyiv, Ukraine, Mon, May 16, 2005

KYIV - As Prime Minister Yuliya Tymoshenko told participants in a Monday
conference call, which involved regional administrations' heads, she means
to initiate a special session of the National Security and Defense Council
(NSDC), with a view of analysing the situation on the market of meat and
meat products.

According to the Prime Minister, the situation on the meat market was
uncontrollable in Zhytomyr, Vinnytsia, Dnipropetrovsk regions and in Kyiv
City. She stated Lugansk and Donetsk regions as having coped with the
task. As she said, prices for beef keep growing in Sevastopol, in Ternopil,
Zaporizhia, Kharkiv regions, and for pork in Kharkiv, Zaporizhia and Lviv
regions.

As Mrs Tymoshenko told the governors, she means to shortly sign an
errand to construct new packing houses in regions to offset shortages of
meat products.

In a week's time, she said, type projects of facilities for processing meat
and poultry meat will be available to regional administrations. In the Prime
Minister's opinion, such facilities will be profitable businesses.

The scheme, she noted, provides for producing 100 tons of pork on 30 ha
of lands, and construction of such facilities will take three to six months.

Mrs Tymoshenko also said that she was pleased with the way vernal crop
sowing proceeded, through some regions are lagging. In this connection
she stated her intention to summon governors of Vinnytsia, Kherson,
Khmelnytsky and some other regions to Kyiv. -30-
===============================================================
3. PM TYMOSHENKO ORDERS GOVERNORS TO DRAFT PROJECTS
TO SUPPLY REGIONS WITH MEAT BY DECEMBER

Ukrainian News Agency, Kyiv, Ukraine, Monday, May 16, 2005

KYIV - Prime Minister Yulia Tymoshenko has commissioned heads of regions
to draw up before December projects on provision of their regions with meat.
Tymoshenko said this during a phone conference.

"This is an imperative directive. You have half a year to draft projects on
meat production, engage enterprises and draw investments," Tymoshenko
said. She addressed governors with a demand to search for investors for
construction of pork, beef, and poultry meat making facilities.

Tymoshenko also ordered the Economy Ministry and the Agrarian Policy
Ministry to calculate the necessary number of such enterprises in all
regions and their capacities. Tymoshenko added she together with President
Viktor Yuschenko is going to initiate a separate conference of the National
Security and Defense Council on meat.

The prime minister noted unsatisfactory work of governors in reduction of
meat prices. "We and you failed to do the main thing - we have not overcome
a speculative monopoly in the markets," Tymoshenko said.

She noted, however, that Ternopil, Donetsk, Ivano-Frankivsk regions worked
well for reduction of meat prices. She added that good situation is observed
in Odesa, Luhansk, Kirovohrad, Zakarpattia, Mykolaiv, Volyn, and Chernivtsi
regions. At the same time, according to Tymoshenko, absolutely
uncontrollable situation is observed in Zhytomyr, Vinnytsia, Dnipropetrovsk
regions, and the city of Kyiv.

As Ukrainian News reported earlier, Tymoshenko believes that the failures
of the government in its first 100 days in office are the crises on markets
of petroleum products and meat and the government's insufficient work with
small and medium businesses. Tymoshenko forecast that prices of meat
and meat products would stabilize by May 1. -30-
===============================================================
4. SIX-MONTH INFLATION "RESERVE" EXHAUSTED
Government's attempts to curb inflation have produced only modest results
Prices may shoot up by 15.3% by the end of the year

By Vitaliy Kniazhansky, The Day
The Day Weekly Digest in English, #16
Kyiv, Ukraine, Tuesday, 17 May 2005

So far the government's attempts to curb inflation have produced only
modest results: in the past four months it has reached 5.1%, an appalling
figure if you take into account the official forecast of an annual 9.8%.

Should the current rate persist, prices may shoot up by 15.3% by the end
of the year, something we haven't seen for a long time.

If we look at the April index alone (0.7%), it does not seem to be a big
one, but even if this not-so-high rate continues until year's end, we will
reach 10.3%. This is also too much. Most households in this country, with
a per capita budget of 100 dollars at most, will have to tighten their
belts, although the government talks about wage and pension hikes
almost on a daily basis. In practice this means that one hand is giving
the ordinary Ukrainian something that the other hand is immediately
taking away.

Optimists close to the Cabinet and the National Bank have their own scenario
of further developments. They foresee zero inflation or even deflation in
the summer and early autumn, following a seasonal price drop in prices for
eggs and vegetables. In their view, this forecast will hold good for late
fall if there is a good harvest.

Unfortunately, the price situation will depend not only and not so much on
the government's words (although this is also an important factor) as on its
deeds. Here things are not quite so rosy.

It should be recalled that we were recently reassured that Ukraine would not
turn into a country of vegetarians. But let's look at the prices in the
grocery store nearest the editorial office, which is mostly patronized by
ordinary people who live a long way from supermarkets. Frankfurters cost
UAH 20.20/kg and cooked sausage from UAH 26.90/kg to 29.90/kg,
depending on the variety.

These prices cater to the so-called children's and pensioners' sector. And
here is the middle-class sector: cold beef is UAH 36.50/kg, cold boiled pork
from UAH 42 to UAH 56/kg. What is more, the rather surprised salesclerk told
The Day's correspondent that the price of sausages had even dropped (by
about one hryvnia) over the past few days.

Is this the result of the government's anti-inflationary measures? Yes, to
some extent. A farmer friend of mine said he was fed up with the local
authorities' demands to sell meat at a low, by no means market-oriented,
price. "If they continue doing this, I will, of course, sell meat - to
neighboring farmers, not the administration," he says, "and let them either
sell it at a market price or eat it up!"

But not everyone can stand up to the bosses. Experts note, however, that
administrative pressure can only succeed in the short term, i.e., today,
tomorrow, for a month. Then come shortages and skyrocketing prices.

As for price-reducing market instruments, they have admittedly failed.
Cabinet failed to negotiate cutting the meat import duty with parliament.
Meat auctions were also deflated. Bidders for the meat tender held by the
State Committee for Material Reserves on May 11 withdrew their bids
because the starting price of meat was too low and, hence, unacceptable.
Things did not improve even when the committee raised the starting price
to a thousand hryvnias per ton.

Neither does the Standard & Poor's agency share the government's optimism.
It predicts that consumer prices will rise by an average of 13% in 2005.

Meanwhile, Ukraine's first vice-premier Anatoly Kinakh says that the current
inflation rate is dangerous for the country, and it is necessary to adopt a
series of measures to curb this process. "We are really worried about rising
inflation: consumer price inflation ran at 5.1% in four months, which means
that the six-month inflation reserve specified in our basic financial
documents for 2005, including the state budget, has been exhausted," Mr.
Kinakh said.

Last Friday changes were reported to the Ministry of Economics' instruction
"On Setting Wholesale and Transfer Price Limits for Diesel Fuel and
Gasoline." According to this document, retail prices should be UAH
2.99/liter for diesel fuel, UAH 3.20 for the A-95 gasoline, UAH 2.99 for the
A-92 gasoline, and UAH 2.85 for the A-76 brand.

Optimists maintain, however, that oil products account for a mere 0.6% of
the inflation basket. In their opinion, it is crucial not to allow
oil-related inflation to affect meat. That would be really bad (in which
case optimists agree with their opponents). -30-
-------------------------------------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/137143
===============================================================
5. UKRAINE'S TIMOSHENKO DENIES GOVT ONLY PLANS TO
REVIEW 29 PRIVATISATIONS
She Contradicts statements by Vice Prime Minister Anatoly
Kinakh and President Viktor Yushchenko

AFX Europe (Focus), Kyiv, Ukraine, Monday, May 16, 2005

KIEV - Prime Minister Yulia Timoshenko denied that the government has a
list of 29 companies whose privatisations are to be reviewed, indirectly
denying the statement of a senior government official which was confirmed
by President Viktor Yushchenko last week.

"It's not true, it (the list) does not exist. I stress that there is no list
... as that is not part of the government's duties, it is the job of the law
courts, of the prosecutor's office, to see what has been done correctly and
what has not been", Timoshenko said, cited by Interfax-Ukraine.

Timoshenko said the government has prepared a draft law which will enable
the difference in prices to be calculated between the actual price and the
sale price of the companies sold off cheaply under the former government.
She added that she will give details of this procedure this week. The method
of calculation will be fair for the companies involved as well as for their
current owners, Timoshenko said. She has told the companies that they
should repay the difference.

Referring to the new bidding rounds which were supposed to be organised
for dubious privatisations, the current owners will be given first option to
buy back their stakes, she said.

Vice Prime Minister Anatoly Kinakh said last week that the government had
drawn up a list of 29 companies whose privatisations would be reviewed. On
Friday, Yushchenko said new bidding rounds would be organised for the 29
companies, and added that the list would be published once it had been
cleared with the prosecutor's office, the interior ministry and the security
services.

Yushchenko reiterated that the authorities are not planning any
nationalisations this year, but simply wanted to review the deals suspected
of having contravened the law.

The privatisations, which were carried out under the regime of former
president Leonid Kuchma and out of which various oligarchs made huge
profits, were one of the items in Yushchenko's election manifesto. He was
elected president in January after being swept to power in the so-called
"orange revolution". ant/via/ilp/cmr/bam -30-
===============================================================
6. TWO RUSSIAN OIL COMPANIES RESTRICT RETAIL
FUEL SALES IN UKRAINE

Era, Kiev, in Ukrainian 1300 gmt 16 May 05
BBC Monitoring Service, UK, in English, Monday, May 16, 2005

KYIV - TNK-BP Ukraine, which owns 51 filling stations in our country, has
restricted the sale of fuel to 10 litres per vehicle, the company's
spokesman said today. He added that this is a temporary measure due to
panic buying of fuel and speculation, and that this measure is also aimed
at protecting the interests of Ukrainian motorists.

I recall that LUKoil Ukraine, which owns 174 filling stations in various
Ukrainian regions, also introduced the same restrictions at all of its
filling stations from this very moment.

Ukrainian Prime Minister Yuliya Tymoshenko said today that the government
would be able to get the situation on the fuel market back to normal within
two weeks. Tymoshenko blamed Russia, in particular, the TNK and LUKoil
companies, for fuel shortages, as they failed to deliver on their promises
to the Ukrainian government on the amount and prices of oil. -30-
===============================================================
7. UKRAINE SEEKS ALTERNATIVES TO RUSSIAN OIL TO EASE
PETRO SHORTAGES

UT1 State TV, Kiev, in Ukrainian 1800 gmt 16 May 05
BBC Monitoring Service, UK, in English, Mon, May 16, 2005

KIEV - Ukraine has purchased a large batch of petrol from Belarus and the
Baltic states in an attempt to ease petrol shortages which the government
blames on Russian oil traders. Ukrainian Prime Minister Yuliya Tymoshenko
has said that Ukraine will buy oil in countries other than Russia and that a
new oil refinery will be built in Odessa as most of the refineries in
Ukraine are currently owned by Russian companies.

Tymoshenko said that price rises by Russian companies cannot be explained
by high world prices alone and added that Russia still has not accepted the
result of the Ukrainian presidential election in which the Russian-backed
candidate lost.

The following is an excerpt from a report by the Ukrainian state-owned
television UT1 on 16 May:

[Presenter] The main topic today is the petrol crisis. Due to lack of fuel,
Russian filling stations TNK and LUKoil sell only 10 litres of petrol to
each car. These restrictions have been introduced because of unprecedented
demand and speculative trade, the companies' press service said.

The government promised to stabilize the situation in two weeks. In two days
Ukrainian petrol stations will receive 70 tonnes [as received, presumably
70,000 tonnes]of fuel from Belarus and the Baltics. This is just over a
third of what Ukraine needs. In order to prevent petrol shortages in the
future, Prime Minister Yuliya Tymoshenko promised that the state will build
1,000 new petrol stations in three months, and a new oil refinery in Odessa
in 18 months.

[Correspondent] Russian oil traders TNK-BP and LUKoil have not kept their
promises to supply enough petrol to Ukraine and to keep prices at the level
set by the government until 1 June. Tymoshenko called such actions sabotage.
She said it was the companies who are responsible for the petrol crisis.

[Tymoshenko] This monopoly, this cartel has raised the prices in Ukraine
much higher than what could be explained by high oil prices. I want to tell
you that no-one [presumably in Russia] has accepted that Viktor Yushchenko
won the presidential election.

[Correspondent] The TNK-BP oil company did not comment on Tymoshenko's
statement and said that the people authorized to issue public statements
were not available. At the same time, Viktor Yushchenko said that the
government is in part responsible for the petrol crisis, but if it fixes the
mistakes in price formations, Russia will be open to negotiation.

Parliament speaker [Volodymyr Lytvyn] also said that the crisis cannot be
solved by administrative measures alone.

[Lytvyn] We need to learn our lesson that administrative methods, even
though I am often criticized for using this term, cannot solve the problem.
I think that 3.20 hryvnyas [63 cents per litre] of 95-grade petrol is not
the end of it. Experts are saying that we will see the price at 3.70
hryvnyas.

[Tymoshenko] This is absolutely not related to the [Ukrainian government's]
caps on petrol prices, which ensure normal profitability. If we did not do
it, we would have had another crisis, when petrol prices would have
increased two-fold.

[Correspondent] The government will not let the Russian traders monopolize
the Ukrainian market and set their own terms, Tymoshenko said. She said that
Ukraine would buy oil in other countries. The bill on cutting oil import
duties has already been submitted to parliament.

[Passage omitted: MP Ihor Yeremyeyev is sceptical about the bill, drivers
are outraged by petrol shortages.] -30-
===============================================================
8. UKRAINE SEEKS RUSSIAN TALKS ON DEEPENING FUEL CRISIS

By Tom Warner in Kiev, Financial Times
London, UK, Tuesday, May 17 2005

Ukraine's president, Viktor Yushchenko, yesterday called for negotiations
with Russian oil companies to end a deepening fuel crisis. Mr Yushchenko,
who discussed the fuel shortage with Vladimir Putin, Russia's president,
last week, said foreign companies had adopted "a very cautious attitude" to
Ukraine after Yulia Tymoshenko, the prime minister, imposed petrol price
controls last month.

Ms Tymoshenko had lashed out at Russian oil companies earlier in the day,
blaming them for running a cartel. Ms Tymoshenko denied that price controls
were to blame and accused Russian oil companies of trying to undermine the
new Ukrainian leadership, which defeated a Moscow-backed candidate in
presidential elections held in December.

"It's simply a plot, it's simply sabotage. They simply want to show Ukraine
her place," Ms Tymoshenko said. "Nobody [in Russia] can accept that Viktor
Yushchenko won the presidential elections. Nobody can accept that a new
government has come to power, and nobody can accept that we have started
to clean up after the old authorities," she added.

The accusations, which came as Russia's Lukoil announced it was introducing
rationing at its Ukrainian petrol stations, increased the temperature in a
bitter dispute between Ms Tymoshenko's government and the Russian oil
companies that own the bulk of Ukraine's refining industry and supply more
than 80 per cent of the country's crude oil. Lukoil has imposed a limit of
10 litres of oil products per vehicle.

Ms Tymoshenko capped prices last month as part of an effort to control
inflation, but is now facing a cooling economy. Gross domestic product
figures released yesterday showed annual growth slowing to 3.9 per cent in
April, down from 13.3 per cent in April last year. Ms Tymoshenko said the
previous government might have been "cheating" when it reported rapid
expansion in 2004.

She is calling on parliament to rush through a bill lifting duties on
imported oil products to allow emergency fuel supplies from Belarus and
Lithuania. The prime minister also announced plans to build a large, modern
refinery near Odessa that would use Caspian oil, increasing the government's
influence over the fuel market and reducing the importance of Russian
refineries. -30- [The Action Ukraine Report Monitoring Service]
===============================================================
9. UKRAINE PRESIDENT CRITICIZES CABINET OVER OIL CRISIS

Interfax-Ukraine, Kiev, Ukraine, Monday, May 16, 2005
BBC Monitoring Service,UK, in English, Monday, May 16, 2005

KIEV - President Viktor Yushchenko has criticized his cabinet's handling
of the fuel crisis, including the policy of imposing petrol price caps, a
Ukrainian news agency has said. Yushchenko's statement comes amid a
growing row over petrol shortages and sharp price rises between the
government and predominantly Russian-owned oil traders, which dominate
Ukraine's market.

Prime Minister Yuliya Tymoshenko accused the Russian companies earlier
today of "sabotage" and said the government was trying to secure oil
supplies from other countries. She also suggested that the crisis was
Russia's attempt to punish Ukraine for the election of Viktor Yushchenko
as president.

The following is the text of report by Interfax-Ukraine news agency:

KIEV - Ukrainian President Viktor Yushchenko believes it is possible to
reach an agreement with Russia on settling the oil crisis in return for a
"clearer" position by Ukraine regarding price formation. He said a meeting
with all those involved in the situation would be held on Thursday [19 May].

"I am confident that there is a possibility today to reach an agreement with
the Russian side on settling this conflict in return for changing the
position of Ukraine to make it more predictable and clear in a delicate
issue such as the formation of prices," Yushchenko told journalists upon
his return from Warsaw.

Yushchenko noted that in the issue of price formation, "the Ukrainian team
did not act in the best way". The president said he was going to hold a
meeting on Thursday with all the parties involved. "I would like to invite
Russian businessmen who supply crude oil and petrol products, to invite the
heads of oil refineries, including the privately owned ones, and we should
start the conversation from a clean slate," Yushchenko said.

He added that "over this period, both sides have made certain steps that
damaged each other's reputation and the organization of a healthy market".
"But today we already see the history of this problem, and I would like to
devote this meeting to resolving the situation." He also said that prior to
leaving for Poland he had met Russian oil suppliers. "I received an
agreement that I would get the position of the Russian situation that would
help settle the conflict," he said. -30-
===============================================================
10. UKRAINE PARLIAMENT LIFTS IMPORT DUTY ON HIGH-OCTANE
PETRO AND DIESEL FUEL

Interfax-Ukraine news agency, Kiev, in Russian, 17 May 05
BBC Monitoring Service, UK, in English, Tue, May 17, 2005

KIEV - The Ukrainian parliament has abolished the import duty on high-octane
petrol and diesel fuel. A total of 310 of the 410 deputies registered in the
assembly hall voted for the bill.

The bill makes changes to the law "On excise and import duties on some types
of goods (products)", introducing zero excise rates until the end of the
budget year, and changes to the law "On customs tariffs", introducing a zero
import duty on high-octane petrol and diesel fuel.

The explanatory note says that such changes will make it possible to quickly
fill the market with these oil products and stabilize the situation.
The explanatory note also points out that there is an imbalance between
demand and supply on the Ukrainian market at the moment, especially of the
A-95 and A-92 petrol, as well as diesel fuel, which is related to the
groundless price hike in late March and early April 2005 and the closure of
the Lysychansk oil refinery for repair work (the Lysychansk oil refinery's
share in the general volume of oil products manufactured in Ukraine exceeds
33 per cent).

Moreover, the document points out that the Kherson oil refinery is not
working either and oil supplies to the Kremenchuk oil refinery dropped in
May. May has also seen a fall in the supplies of oil products to the market,
which caused a shortage of high-octane petrol and diesel fuel.
==============================================================
11. NATIONAL BANK OF UKRAINE RESOLUTION 482 CANCELLED
Good News from Ukraine for Foreign Investors

Dr, Irina Paliashvili, President
Russian-Ukrainian Legal Group
Kyiv, Ukraine, Tuesday, May 17, 2005

Dear Morgan,

Good news from Ukraine for foreign investors.

The infamous anti-investment Resolution No.482 of the Board of the
National Bank of Ukraine "On Approval of the Regulations on the
Procedure for Making Cash Investments into Ukraine and Returning
Investments to Foreign Investors, as well as Repatriation of Profit,
Income, and Other Funds Received from the Investment Activities in
Ukraine" dated 14 October 2004 loses its effect as of 21 May 2005.

It was canceled by Resolution No.154 of the Board of the National
Bank of Ukraine dated 29 April 2005, registered with the Ministry of
Justice of Ukraine on 11 May 2005 (reg. No. 490/10770), effective
on 21 May 2005.

Best regards, Irina
--------------------------------------------------------------------------------------------
Dr. Irina Paliashvili, Russian-Ukrainian Legal Group, P.A.
irinap@rulg.com, www.rulg.com
--------------------------------------------------------------------------------------------------------
FOOTNOTE: Dr. Irina Paliashvili called for the immediate
cancellation of NBU Resolution 482 in an article she wrote for The
Action Ukraine Report entitled "URGENT AND RADICAL
IMPROVEMENTS NEEDED IN UKRAINE'S LEGAL REGIME FOR
BUSINESS AND INVESTMENT." The article was published in the
AUR #438, on March 10, 2005, article one. [EDITOR]
===============================================================
12. FINANCE MINISTER VIKTOR PYNZENYK STATES 2005 NATIONAL
BUDGET'S PERFORMANCE OVER 2005'S FIRST FOUR
MONTHS AS DEFICIT-FREE

Ukrinform, Kyiv, Ukraine, Monday, May 16, 2005

KYIV - As Finance Minister Viktor Pynzenyk told attendants of a round table
in Kyiv on Monday, which addressed improvements in Ukraine's investment
environments, the 2005 national budget's performance over 2005's first
four months was deficit-free, but in mid-May there appeared a certain
"operational deficit" because of the troublesome abundance of holidays.

According to Viktor Pynzenyk, the budgetary deficit has lowered from 10
percent to 1.7 percent. The new Government, he noted, got a hard legacy
from its predecessor when the Pension Fund was unable to pay persons
and no money to this end was provided for by the budget.

Touching on deductions to the Wage Fund, Minister Pynzenyk said these
were rather too big to facilitate the economy's deshadowization, which is
why this problem must be promptly, dealt with.

As Viktor Pynzenyk maintained, large social payments in April did not
cause any increase in the inflation rate, rather, these decelerated
inflation. This shows, he said, that the NBU and the Government are
capable of controlling inflation. -30- [Action Ukraine Monitoring Service]
===============================================================
13. UKRAINIAN FIRM DONBAS INDUSTRIAL UNION (DIU) WINS RIGHT
TO NEGOTIATE PRIVATIZATION OF POLISH STEELMILL

PAP news agency, Warsaw, Poland, Mon, 16 May 05

WARSAW - The Donbas Industrial Union of Ukraine has won exclusive
rights to negotiate the privatization of Huta Czestochowa steelworks
[Poland's largest steelworks]. The talks will start in Warsaw on 16 May,
DIU said Monday [16 May].

The state treasury minister, Jacek Socha, told newsmen that DIU "has
until 19 May to correct its offer and until mid-June to negotiate the social
package and appropriate guarantees concerning financial security of
investments in Huta Czestochowa."

Asked what will happen if DIU's offer proves unsatisfactory, Minister
Jacek Socha said that "a return to Mittal Steel is possible." He added that
"if we wind up without any strategic investor for the steelmill it may prove
necessary to look for another privatization method." -30-
===============================================================
14. YEVHEN CHERVONENKO CALLS STATEMENTS BY RUSSIAN
POLITICIANS ON HIS ACCEPTING BRIBE TO TUNE OF
THREE MILLION USD AS PROVOCATIVE

Ukrinform, Kyiv, Ukraine, Tuesday, May 17, 2005

KYIV - Ukrainian Minister for Transport and Communications Yevhen
Chervonenko called statements by Russian politicians and mass media on
he has been caught on accepting a bribe as provocative, as he stressed "I
want to emphasize that I haven't accepted and won't ever take bribes for any
appointment. I'm sure that it's a provocation on the eve of my visit to
Moscow to a large summit of transport ministers, and I will appeal to court
against provocateurs to protect my honor and dignity", the Transport and
Communications Minister's press service told Ukrinform.

As the press service reminded, Yevhen Chervonenko reported earlier about
he has been proposed a bribe to the tune of three million US dollars for the
position of the chief of the Odesa port and about a joint operation with the
Security Service of Ukraine on detention of criminals.

Later, a deputy of the LDPR (the Liberal-Democratic Party of Russia) faction
A.Mitrofanov said at a session of the Russian Duma on April 1, 2005 that
"several days ago Ukrainian Minister for Transport and Communications
Chervonenko was detained in his cabinet attempting to take the 3 M. USD
bribe, but due to the direct order of Yushchenko he was released and First
Deputy Director of the Security Service of Ukraine Skibinetsky was
dismissed.

I have the relevant tape, which a conveyed to the NTN channel, I hope they
will show it. That is, now we see the essence of the orange revolution:
where one million dollars were taken under Kuchma, now three million are
taken, apparently with consideration of expenses for Maidan. In this
connection I ask to give a protocol instruction to our CIS committee for
requesting the respective information, as this story, undoubtedly is
concerned Russia as well ".

On May 16 in the program of the Russian channel TVTs "The Moment of
Truth" Mitrofanov repeated his statement. As the Ukrainian Transports and
Communications Ministry's press service reported, the NTN channel denied
its implication to the scandal and invited Yevhen Chervonenko to speak in
live air on Tuesday 10 pm Kyiv time. -30-
===============================================================
15. PRESIDENT YUSHCHENKO SAYS UKRAINE MUST JOIN
EUROPEAN DEMOCRATIC FAMILY

PAP news agency, Warsaw, Poland, Monday, 16 May 2005

WARSAW - Ukrainian President Viktor Yushchenko stressed while addressing
the 3rd summit of the Council of Europe in Warsaw on Monday [16 May] that
his country must join the democratic European family. Yushchenko appealed
to all participants in the summit to make it easier for all Europeans to
travel on the entire continent.

"The Council of Europe will have its share in creating a common European
area," Yushchenko stressed and recalled that Ukraine has already had
introduced visa-free traffic for EU citizens and expressed the hope that
Ukraine could expect similar moves.

Speaking about the new challenges facing Europe Yushchenko stressed
the need to avoid a "two speeds Europe" and new divisions.

Yushchenko assured the gathered that Ukraine was trying to introduce a
model of European democracy and declared amendments to the Ukrainian
Constitution suggested by the Council of Europe.

Speaking on behalf of Ukraine, Yushchenko obliged himself to fulfil all the
conditions of the Council of Europe membership, to conduct fight against
anti-Semitism and xenophobia, to secure rights of national minorities and to
combat organized crime and human trafficking.

According to Yushchenko, it is symbolic that the summit is taking place east
of the already non-existing Berlin Wall. He also thanked all the people who
supported Ukraine on its way to democracy. -30-
===============================================================
16. THE BIENNIAL WORLD MONUMENTS WATCH LIST OF 100 MOST
ENDANGERED SITES
List includes ancient city of Panticapaeum and the
Tyras-Belgorod Fortress, both in Ukraine

Irish Times, Dublin, Ireland, Tue, May 17, 2005

DUBLIN - Founded in 1965, the New York-based international World
Monuments Fund (WMF) is dedicated to preserving endangered
monuments of cultural importance. To date, it has assisted more than
400 monuments and sites in some 80 countries. Central to its work is
the WMF's biennial World Monuments Watch listing of 100 Most
Endangered Sites.

First issued in 1996, the list has allocated 315 grants totalling $26
million to 157 watch sites in 62 countries, generating in the process an
additional $59 million from other sources. Inclusion on the list is decided
by an independent selection committee of experts which assesses each
application. Criteria for selection is based on a site's archaeological,
architectural and historic significance; the degree of urgency and the
viability.

Two Irish sites, Headfort House in Kells, Co Meath, and Athassel Abbey
in Co Tipperary, feature on the current list, along with two major Greek
archaeological sites, the long lost classical city of Helike, and
Palaikastro, the only surviving Minoan city.

Also included in a strong European contingent dominated by church sites,
is Ephesus at Selcuk, Turkey, one of five Turkish applicants, the Roman
port of Trajan on the Tiber, as well as the ruins of the ancient city of
Panticapaeum and dating from the 6th century BC, the Tyras-Belgorod
Fortress both in the Ukraine.

There are five Chinese sites including sections of the Great Wall of China
and the Puning Temple Statues at Chengde in Hebei Province. Peru's famous
Tucume Archaeological site is listed, as is Bolivia's vulnerable Vallegrande
Rock Art sites, Frank Lloyd Wright's Ennis Brown House in Los Angeles,
California and the North Family Shaker site at Mount Lebanon, New York in
the US.

Australia features for the first time through the claims of the world's
largest rock art complex, that of the Dampier Archipelago. Irish explorer
Sir Ernest Shackleton's Expedition Hut on Cape Royds, Ross Island, is
the first site in Antarctica to be listed. -30-
===============================================================
17. PRESIDENT SIGNS DIRECTION TO ERECT MONUMENT TO
RUKH FOUNDER VIACHESLAV CHORNOVIL IN DOWNTOWN KYIV

Ukrinform, Kyiv, Ukraine, Sat, May 14, 2005

KYIV - President Viktor Yushchenko has signed a direction to erect a
monument to the late Rukh founder and leader Viacheslav Chornovil in
downtown Kyiv, the presidential press service told Ukrinform.

The direction instructs the Cabinet to erect the monument by December
24, 2005, the 68th anniversary of Viacheslav Chornovil's birth. Viacheslav
Chornovil died in a road accident near Kyiv on March 25, 1999, when his
automobile collided with a KamAZ truck. -30-
-------------------------------------------------------------------------------------------------------
FOOTNOTE: There are many in Ukraine who believe Rukh founder
Viacheslav Chornovil was murdered. [EDITOR]
===============================================================
18. EVENTS TIMED TO 61ST ANNIVERSARY OF DEPORTATION OF
ARMENIANS, BULGARIANS, GREEKS, GERMANS AND CRIMEAN
TATARS FROM CRIMEA START IN SIMFEROPOL

Gulnara Kurtaliyeva, Ukrinform, Kyiv, Ukraine, Tue, May 17, 2005

CRIMEA - On Tuesday a ceremony of laying wreaths at memorable stones,
set at the Railway Station and in the Salgirka Park in Simferopol was
staged. It was timed to the 61st anniversary of deportation of Armenians,
Bulgarians, Greeks, Germans and Crimean Tatars from Crimea.

Attending the ceremony were Crimean Verkhovna Rada Chairperson Borys
Deich, Crimean Council of Ministers Chairman Anatoli Matvienko, Simferopol
Mayor Valeri Yermak and Crimean Verkhovna Rada deputies.

On Tuesday at 15:00 local time a mourning meeting was held, dedicated to
the 61st anniversary of deportation. On Wednesday at 14:00 local time an
all-Crimean mourning meeting will staged in the Crimean capital on Lenin
Square. Similar meetings are supposed to be held in a number of cities and
districts of the Autonomous Republic of Crimea. -30-
===============================================================
19. PRESIDENT VIKTOR YUSHCHENKO PARTICIPATES IN RALLY
TO COMMEMORATE VICTIMS OF POLITICAL REPRISALS
Says Oktiabrsky (October) Palace in Kyiv must be converted into a museum

Ukrinform, Kyiv, Ukraine, Monday, May 16, 2005

KYIV - President Viktor Yushchenko participated in a rally-requiem near
Bykovnia in Kyiv's vicinity, which was meant for commemorating victims
of massive political reprisals under the totalitarian regime.

As President Yushchenko told the audience, in the early 1990s nobody knew
how many people had been buried in the Bykovnia Forest, though they were
presumed to have been massacred by the Nazi invaders. We learned the
horrible truth much later that those buried there had been the Soviet
totalitarian regime's victims.

President Yushchenko stated this opinion about the Oktiabrsky ("October")
Palace in Kyiv, saying it must be converted into a museum to commemorate
the reprisals' victims, as using it as a recreation center, as is the case
now, is absolutely inadmissible. Any initiatives to this end, he said, will
be hailed and supported by the authority.

(It should be noted that under the Stalin totalitarian rule the building's
basement was the place where NKVD agents executed people. The
NKVD was the Cheka's successor and the KGB's predecessor). -30-
===============================================================
20. . "FIGHTING FOR THE RIGHT TO BE"
Ukraine's Patriotic War: A Historian's Perspective

By Prof. Volodymyr Shevchenko, History
Meritorious worker of public education of Ukraine, Kyiv
The Day Weekly Digest in English, # 17
Kyiv, Ukraine, Tuesday, May 17, 2005

In researching and presenting the Ukrainian nation's struggle against the
German occupiers, it is essential to focus on the tried-and-true principles
of objectivity, truthfulness, impartiality, and neutrality.

Clearly, our knowledge of historical processes is far from absolute or
established for all time. Yet this knowledge should evolve independently
of individual scholars' preferences or the current political situation, and
must be expanded with previously unknown facts. This is especially true
when dealing with such a complex, multifaceted, and contradictory
phenomenon as war.

We must bear in mind the fact that numerous documents relating to the
events of 1939-1945 were (and many still are) part of closely guarded
military and government secrets. As they are declassified and introduced
into scholarly discourse, we can supplement or modify our understanding
of the course of certain events. But this should be done only by researching
new information from reliable sources and not by distorting, hiding, or
tampering with historical facts.

Truthfulness is essential when relating the multitude of facts that
constitute the history of the Ukrainian nation's struggle against the
fascist aggressors in 1939-1945. There is a fair amount of validity to the
statement about the need to deromanticize all wars as a phenomenon that
involves violence, tremendous casualties, destruction, and physical and
moral suffering.

Mankind strives for peace, calm, and the resolution of conflicts without
bloodshed. However, the phenomenon of deromanticizing war should not be
accompanied by deflating the heroic status of the life and deeds of those
who were forced under certain historical conditions to fight aggressors and
defend themselves and their nation from humiliation and extermination.

The Second World War, which engulfed Ukraine from the very outset, was
imposed on the planet by German Nazis, Italian fascists, and Japanese
militarists. Its root cause was a strategy aimed at expanding the living
space for the so-called European and Asian Aryans. "We are overpopulated
and our country does not yield the food we need...The final solution lies in
an extension of our living space and the sources of raw materials and food
supplies of our nation," reads Hitler's August 1936 memorandum on
preparations for the war. Hitler wrote openly: "We will stop the endless
German movement to the south and west, and turn our gaze toward the
land in the east."

Despite all the shortcomings of the policies pursued by the USSR (the
August 1939 Molotov-Ribbentrop Pact), the Western nations (the 1938
Munich Agreement, etc.), Poland (its complicity with Hitler in carving up
Czechoslovakia and the invasion of its Cieszyn district in the fall of
1938), it is an undeniable and established historical fact that World War II
was unleashed by the German Nazis and Italian fascists, who were the
chief masterminds.

To achieve their goal, the Germans considered it necessary, among other
things, to invade and plunder the Ukrainian lands, destroy most Ukrainians,
and turn the survivors into docile slaves. The very existence of the
Ukrainian ethnos was threatened. Under these conditions Ukrainians were
left with no other choice but to defend themselves and repel the attack with
force to save their families and the whole nation from extermination.

We owe eternal remembrance and profound respect to those who heroically
shielded our motherland from the aggressors and paid the ultimate price. We
owe respect to each one of the millions of Ukrainian soldiers, officers,
generals, marshals, partisans, and underground resistance fighters, who
confronted the German, Romanian, and Hungarian occupiers.

The prominent Ukrainian poet Vasyl Symonenko painted the horrors of war in
his poem about a real person, an old woman by the name of Baba Onysia
from his native village of Biyivtsi in Poltava oblast, who had lost her
husband and three sons to the war:

Baba Onysia raised three sons,
Only to lose them one at a time.
Winter has descended on her hair,
Frosted with gray.
I have seen much misery in this world,
But there's no greater misery
Than that of a mother facing old age
Alone in her home.

The poet appeals to us always to remember and respect those who
sacrificed their lives for their fatherland and those who raised such
heroes.

Determining specific dates of historical events is crucial. A scholarly
periodization of Ukraine's involvement in the global military confrontation
of 1939-1945 is also fundamentally important. Many publications that focus
on this period traditionally acknowledge that the Great Patriotic War began
on June 22, 1941, and was part of World War II.

At the same time, the Ukrainians' involvement in hostilities between 1939
and June 22, 1941, is studied outside the context of the patriotic war.
Others bend over backwards to prove that Ukrainians did not fight a
patriotic war of their own, discussing the Ukrainians' involvement only
within the context of World War II, or the Soviet-German war.

The facts suggest that the term "patriotic war" has been used to describe a
just armed struggle that was undertaken by nations to defend themselves and
their lands from foreign aggressors. In such a war both the regular army and
civilians confront the aggressors: this means that the war becomes a
nationwide cause, with the entire population fighting the enemy by all means
possible. The army is no longer closed in nature, and regular forces fight
alongside various formations: the militia, partisans, underground resistance
fighters, etc.

Thus, a patriotic war is waged not only by individual governments and their
structures, but by entire nations that use various forms of resistance. In a
patriotic war, hostilities take place both at the frontline and in the
enemy's rear, and the targets of such warfare are the enemy's forces and
weapons, as well as infrastructure, production facilities, warehouses, etc.
A patriotic war is prolonged, persistent, and bloody in nature, with troops
fighting long and hard for every inch of their native land.

This was the nature of warfare involving the nations that became the targets
of fascist aggression during World War II (1939-1945). For the victims of
the aggressors, World War II was also a patriotic war from the start. This
fact is recorded in documents and speeches of government leaders of the
time.

Prime Minister Winston Churchill of Great Britain immediately discerned the
popular, just, and patriotic nature of the war against fascism. In his radio
speech in connection with Germany's attack on the USSR, he said: "No one
has been a more consistent opponent of Communism than I have for the
last 25 years. I will unsay not a word that I have spoken about it. But all
this fades away before the spectacle which is now unfolding...

"The past, with its crimes, even follies, and its tragedies, flashes
away...I see the Russian soldiers standing on the threshold of their native
land guarding the fields their fathers have tilled from time immemorial. I
see them guarding their homes, where mothers and wives pray - ah yes, for
there are times when all pray - for the safety of their loved ones, for the
return of their breadwinner, of their champion and their protector...

"I see 10,000 villages of Russia where the means of existence was wrung so
hard from the soil, but where there are still primordial human joys, where
maidens love and children play...I see advancing upon all these in hideous
onslaught the Nazi war machine, with its clanking, heel clicking, dandified
Prussian officers, its crafty expert agents, fresh from the cowing and tying
down of a dozen countries...I see also the deadly, drilled, docile brutish
masses of the Hun soldiery plodding on like a swarm of crawling locusts...

"I see the German bombers and fighters in the sky, still smarting from many
a British whipping, delighted to find what they believe is an easier and
safer prey. And behind all this glare, behind all this storm, I see that
small group of villainous men who planned, organized and launched that
cataract of horrors upon mankind...We have but one aim and one single
irrevocable purpose. We are resolved to destroy Hitler and every vestige
of the Nazi regime...

"This is no class war. This is a war in which the whole British Empire and
Commonwealth of Nations is engaged without distinction of race, creed or
party...[It] is the cause of free men and free peoples in every quarter of
the globe."

Much like the other leaders of the anti-Hitler coalition, on many subsequent
occasions he emphasized his readiness to wage a liberation war with full
strength and energy until Hitlerism was completely eradicated.

The fact that the Soviet leadership used the term "patriotic war" is no
reason to deny that the war waged against fascism by Ukrainians and other
nations was also patriotic in nature.

Ukrainians began a just and genuinely patriotic liberation war in defense of
their land back in 1939, when on March 14 Hungarian fascists invaded
Carpathian Ukraine with Hitler's backing. During this war our countrymen
were not defending a certain dictator or regime, but their own land and the
right to exist and live freely.

The fiercest fighting took place on March 15 in Krasne Pole, a valley on the
Tisza River's right bank outside Khust. Here the Hungarian aggressors
encountered resistance from nearly 2,000 Sich national fighters and as many
Czech soldiers. Among the defenders were many high school students brought
there by a teacher named Holota. The Hungarians had an advantage over the
Ukrainians, as they were attacking from the mountains and were better armed
and trained.

The Sich fighters were no match for them in strength and weapons, but put
up a defense on level ground. Fierce battles lasted throughout the day, with
the Ukrainians putting up a desperate fight to win time for the parliament
to meet in session.

On the night of March 18 the aggressors occupied all of Zakarpattia and
reached the Polish border, where they were warmly received by Polish
forces, which were ready to assist the occupants if necessary. With Hitler's
blessing the Silver Land (a poetic name for Zakarpattia) was trampled by the
bloody boot of Horthy's fascist regime backed by Poland and Romania. The
latter handed the Sich fighters detained on its border over to the
Hungarians, who immediately executed them and dumped their bodies into
the Tisza.

During the March 1939 battles in Zakarpattia, over 5,000 Ukrainians were
killed defending their homeland. Subsequently, the Ukrainians of
Zakarpattia, flying both red and blue-and-yellow banners, waged insurgent
and partisan struggles against the occupiers until 1944. We celebrate
Ukraine's Liberation Day when Zakarpattia was liberated in October 1944.

It would also be logical to start reckoning the beginning of the Ukrainian
people's Patriotic War from the time that our Zakarpattia countrymen began
their struggle against the aggressors. This is a heroic page in our history.
Here Ukrainians clashed in mortal combat with the fascist warmongers of
World War II, against the oppressors of our homeland.

When the Polish-German war broke out, many Ukrainians rose to the defense
of their lands and the government under which they lived. Ukrainian
political parties represented in the Polish Sejm officially declared the
need to fight the German aggressors.

According to various estimates, between 150,000 and 200,000 Ukrainians
fought in the Polish ranks against the German Wehrmacht in September
1939.

Regardless of their status and military rank, Ukrainians fought heroically
against the Nazis outside Warsaw, Westerplatte, Modlin, near the River
Bzura, in the vicinity of Zamoscie, Tomaszow, Krasnostaw, Kocko, and
other places.

In bloody battles against the Germans, Ukrainians who were fighting as part
of the Polish army defended their native Lviv, which came under attack by
the Wehrmacht on September 12, 1939. Violent battles and the siege of the
city lasted until September 21. The brave defenders lost nearly 400,000
troops (killed and wounded). Nazi bombardment and shelling took a heavy toll
on civilians.

On September 14 the city's water and natural gas supply were cut off. Power
was cut on September 20. But the Nazis failed to break the Ukrainians,
Poles, and fighters of other nationalities who defended the Ukrainian city
of Leo, and they inflicted on the German Wehrmacht its first defeat in World
War II.

It is now time for the leaders of independent Ukraine and friendly Poland to
commemorate the heroic deed of the people of Lviv. Although the system
of state awards in Ukraine no longer includes a hero title for cities,
Ukrainian and Polish military decorations awarded to Lviv would be a
somewhat belated, albeit well- deserved, homage to those valiant soldiers.

Overall, 7,800 Ukrainians died a hero's death during the September battles,
and twice as many were wounded. Selected survey data suggests that some
1,500-2,000 natives of Lviv oblast who fought in the Polish army were killed
in action. Nearly 60,000 Ukrainian soldiers (100,000 according to other
estimates) were taken prisoner. The mortality count was increased by those
killed by German bombs dropped in September 1939 on the territories of
Lviv, Volyn, and Ternopil oblasts.

That the Ukrainian nation was among the first to suffer from Nazi aggression
and launch a patriotic war against the invaders in 1939 was discussed at the
1945 Yalta Conference of the Big Three. Explaining the need for Ukraine's
participation, along with Belarus and Lithuania, in founding the United
Nations Organization, Molotov said in Stalin's presence: "These republics
suffered the heaviest losses during the war and were the first territories
to be invaded by the Germans."

This wording met with no objections from US President Roosevelt and British
Prime Minister Churchill and could refer only to the year 1939, when the
fascists invaded Ukrainian Zakarpattia and Lithuanian Klaipeda in March
1939, and western Ukraine and western Belarus in September 1939. Mean-
while, on June 22, 1941, which is generally believed to be the beginning of
the Great Patriotic War, aside from the lands mentioned above, the Germans
had already invaded the territories of Russia, Moldavia, Karelia, etc.

Thus, it follows from the facts and historical documents cited above that
the Ukrainian nation's patriotic war against Germany began in 1939. It would
therefore be appropriate to name this period in Ukraine's history the
1939-1945 Patriotic War of the Ukrainian People against the Fascist
Aggressors. -30- [The Action Ukraine Report Monitoring Service]
---------------------------------------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/137159
===============================================================
21. KATERYNA YUSHCHENKO, CHAIRWOMAN OF UKRAINE 3000
FOUNDATION'S SUPERVISORY PANEL, TO ANNOUNCE
NEW CHARITABLE PROJECT 'FROM HOSPITAL TO HOSPITAL'

Ukrinform, Kyiv, Ukraine, Saturday, May 14, 2005

KYIV - On May 19 the Bohdan & Varvara Khanenko Museum of Arts will
be the venue of a ceremony, in which Kateryna Yushchenko, Chairperson
of the Ukraine 3000 Foundation's Supervisory Panel, will present
a new charitable project, named From Hospital to Hospital and meant for
finding steady partners for Ukrainian hospitals in West European countries,
in the USA and elsewhere.

The project's implementation will last five years and will involve 25
Ukrainian hospitals. Ambassadors of European nations, the USA, Canada,
Japan, His Royal Highness Prince Michael of Kent, Foreign Minister Borys
Tarasiuk, Health Minister Mykola Polishchuk have been invited to attend.
===============================================================
22. PRESIDENT VIKTOR YUSHCHENKO SENDS MESSAGE OF THANKS
TO AMERICAN DOCTORS WHO SAVED UKRAINIAN GIRL NASTIA OVCHAR

Ukrinform, Kyiv, Ukraine, Friday, May 13, 2005

KYIV - President Viktor Yushchenko has sent a message of gratitude to
Ralph C. Pino, Chairman, Board of Governors of the Boston Shriners
Hospital for Children, to thank the Hospital's medics for having saved
the life of little Ukrainian girl Nastia Ovchar.

As the message says, having visited the clinic, Mr Yushchenko and his
spouse got convinced that the girl is being treated by highly skilled
professionals, who are doing their best for her speedy recovery. -30-
===============================================================
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8. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO, Washington,
D.C.; Markian Bilynskyj, VP/Director of Field Operations; Kyiv,
Ukraine. Web: http://www.USUkraine.org
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C., Van
Yeutter, Cargill Inc., Interim President; Jack Reed, ADM, Interim
Vice President; Morgan Williams, SigmaBleyzer, Interim Secretary-
Treasurer
10. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX 77024; bill.hunter@volia-software.com.
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PUBLISHER AND EDITOR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
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Director, Ukrainian Federation of America (UFA)
Coordinator, Action Ukraine Coalition (AUC)
Senior Advisor, U.S.-Ukraine Foundation (USUF)
Interim Secretary-Treasurer, Ukraine-U.S. Business Council
Publisher, Ukraine Information Website, www.ArtUkraine.com
& www.ArtUkraine Information Service (ARTUIS)
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