Welcome to the U.S.-Ukraine Business Council


Ukraine has been losing jobs, income, taxes and investment for 10 years.

U.S.-Ukraine Business Council (USUBC)
Wash, D.C., Monday, July 20, 2009

The Associated Press, Kiev, Ukraine, Sunday, July 19th 2009 

UNIAN news agency, Kiev, in Ukrainian 1102 gmt 16 Jul 09
BBC Monitoring Service, UK, in English, Thursday, July 16, 2009  

Agence France Presse (AFP), Washington, D.C., Sunday, July 19, 2009 

Salans law firm, Kyiv, Ukraine, Monday, July 20, 2009


Ukraine has been losing jobs, income, taxes and investment for 10 years.


U.S.-Ukraine Business Council (USUBC), Wash, D.C., Monday, July 20, 2009 

WASHINGTON, D.C. - The Cabinet of Ministers of the government of Ukraine late Friday afternoon, July 17th,passed the last Cabinet resolution needed for settlement of the long-standing political risk insurance claim by the U.S. Government's Overseas Private Investment Corporation (OPIC) which has caused OPIC's business development and investments programs to be closed for Ukraine for several years.

The U.S.-Ukraine Business Council (USUBC) was informed about the passage of the resolution by Dr. Hryhoriy Nemyria, Vice-Prime Minister of Ukraine for European and International Integration, who has been leading the Ukraine government's efforts to resolve the long standing OPIC issue on behalf of the Tymoshenko government.  VPM Nemyria was able to get the Ministries of Defense, Finance, and Economy to come to an agreement about a settlement.

"The members of USUBC who need to utilize OPIC's programs in order to invest in Ukraine or expand their investments in Ukraine are very pleased by the action by the Cabinet of Ministers of Friday and most appreciative of the support from PM Yulia Tymoshenko and VPM Dr. Hryhoriy Nemyria," said Morgan Williams, SigmaBleyzer, who serves as President of USUBC."

"Hopefully the action Friday by the Cabinet of Ministers will pave the way so the last details and agreements can be worked out and signed very soon.  Maybe some announcement about the progress to get OPIC open for business in Ukraine can be made during U.S. Vice President Joe Biden's historic trip to Ukraine this week.  U.S. VP Joe Biden arrives in Ukraine on today and leaves early afternoon on July 22nd to go on to Georgia," Williams said.  It has been reported there are over $500 million in proposed current projects on file at OPIC for Ukraine. 

The government of Ukraine made real progress in April, 2009 on resolving the long-standing claim (which has been going on for ten years) of the U.S. Government's Overseas Private Investment Corporation (OPIC).  

This major problem continues to cause Ukraine to lose thousands of much needed jobs, tens of millions in income and taxes, during these most difficult economic times.  Hundreds of millions in potential U.S. investments are being held up because OPIC is still closed for Ukraine.

VPM Hryhoriy Nemyria has been working closely with PM Yulia Tymoshenko, U.S. Ambassador William Taylor (before his tour of duty as Ambassador was completed in late May) and with William Klein, Deputy Counselor for Economics at the U.S. Embassy (before his tour of duty was completed in early July) since January of 2008 to resolve the OPIC issue. 

U.S. Ambassador William Taylor and Deputy Counselor for Economics, William Klein, had several key meetings with PM Yulia Tymoshenko and VPM Hryhoriy Nemyria in April and May about the OPIC issue. These meetings produced very positive results and the OPIC issue was moved forward. VPM Nemyria also met personally with USUBC president Williams and William Klein in Kyiv on April 13th about the OPIC matter. 

The U.S-Ukraine Business Council (USUBC) had a working luncheon meeting with VPM Hryhoriy Nemyria in Washington on April 24th, 2009.  The VPM reported to members of USUBC about a resolution passed by the Cabinet of Ministers on Wednesday, April 15, 2009, that would move the OPIC issue closer to resolution.  Nemyria said that a private business entity in Ukraine was appointed on Friday, April 17thto implement the Cabinet of Ministers resolution. 

VPM Hryhoriy Nemyria personally led the effort which resulted in aresolution by Ukraine's Cabinet of Ministers dated Wednesday, April 15, 2009.  The Defense Ministry and the Economy Ministry were instructed to appoint an institution to provide for the implementation of a memorandum of mutual understanding laying the grounds for the return of Overseas Private Investment Corporation (OPIC) to Ukraine. The memorandum was signed by the governments of Ukraine and the United States on November 10, 2008. 

One of the top issues for the U.S.-Ukraine BusinessCouncil (USUBC) for the past several years has been that all the outstanding economic and business development programs of the U.S. government's Overseas Private  Investment Corporation (OPIC) have been closed for Ukraine (http://www.opic.gov). 
The claim came as the result of OPIC paying a political risk insurance claim to a U.S. business that invested in Ukraine in the early 1990's. 

Such settlements of claims between government are rather normal in the international community of nations when government backed political risk insurance programs pay out claims. Governments usually settled such claims rather quickly, but this has not happened in the case of Ukraine.  

Settling the OPIC program is a win-win for Ukraine and the U.S. USUBC urges both governments to keep working together to move this issue to final completion now.  
Independent U.S. Government Agency Helps US Businesses Invest in Emerging Markets

By Gerald Stoltz, Esq., Partner, Thompson Coburn LLP, Wash, D.C. July 2009

WASHINGTON, D.C. - In the second part of our series, we discuss the Overseas Private Investment Corporation ("OPIC"), an independent U.S. Government agency established in 1971.

OPIC mobilizes and facilitates the participation of U.S. private capital and skills in the economic and social development of less developed countries, and countries transitioning from nonmarket to market economies. OPIC helps U.S. businesses invest in these emerging markets by providing financing, investment funds and political risk insurance, thereby assisting the private sector in managing risks associated with foreign direct investment.

When assessing a proposed financing, OPIC generally takes into consideration a project's contribution to the host country's development, the project's financial requirements, and the extent to which the financial risks and benefits are shared among investors and lenders.

I. Financing Products: OPIC provides medium and long-term funding through direct loans and loan guarantees to eligible investment projects involving significant equity or management participation by U.S. businesses. For businesses with annual revenues less than $250 million, medium-term funding is generally available through direct loans from OPIC. For businesses with annual revenues of more than $250 million, medium- and long-term funding is available through direct loans from OPIC as well as loan guarantees from OPIC to qualified lenders.

Such long-term funding supports projects requiring large amounts of capital in such diverse areas as telecommunications, power, water, housing, airports, hotels, high-tech, financial services and mining. OPIC accommodates a variety of loan structures, including project finance loans, corporate finance loans, housing and mortgage financing, franchise loans, and commercial bank on-lending arrangements.

Borrower Qualification: In order to qualify for OPIC financing, a project must (i) be commercially and financially sound; (ii) be within the demonstrated competence of the proposed management, which must have a proven record of success in the same or a closely related business, as well as a significant continuing financial risk in the enterprise; (iii) have investors who are willing to establish sound debt-to-equity relationships that will not jeopardize the success of the project through excessive leverage (the normal debt-to-equity ratio is in the range of 60/40); and (iv) at least 25 percent of the project must be owned by U.S. companies.

Exceptions to ownership requirements may be made where U.S. brand name franchisers, operators or contractors are significantly involved in the project on a long-term basis.

Government-owned Borrowers: OPIC generally provides financing to the private sector; however, financing may be offered to an entity in which government owns a majority of the voting shares, if it is contractually agreed that management will remain in private hands and there is a strong showing of direct U.S. involvement in other respects.

Loan Amounts and Rates: OPIC provides financing at fixed and, in certain instances, at floating rates with commercially-feasible collateral arrangements. Loans offered may be as small as $100,000 and as large as the project may require. In the past, OPIC has guaranteed up to $350 million for a project, although the standard cap for OPIC financing is $250 million.

Interest rates for direct loans are generally based on OPIC's underlying cost of capital (U.S. Treasury securities of comparable maturity) plus a premium of between two and six percent, based on OPIC's assessment of the specific risks associated with the project. OPIC guaranteed loans typically bear interest at the rate of U.S. Treasury securities of comparable maturity plus an "agency" spread.

Term: The loan terms typically provide for a final maturity of three to 15 years, including suitable disbursement periods during which only interest is payable.

Repayment: The repayment schedules of direct or guaranteed loans take into consideration the purpose of the loan and the projected level of cash flows to be generated in the transaction. The cash flows must be sufficient to meet interest and principal payments, and also provide for an adequate return to equity investors.

Fees and Costs: OPIC's lending practices are consistent with those of commercial lenders. As such, OPIC charges retainer fees (typically covering the cost of reviewing and processing the loan application, as well as the related due diligence), facility fees (one time fee generally ranging from one to two percent), commitment fees (approximately 0.5 percent of the undisbursed principal), maintenance fees and cancellation fees. Reimbursement is generally required for related out-of-pocket expenses, including fees for outside counsel and the services of experts or consultants.

In the case of guaranteed loans, OPIC also charges a loan guarantee fee of two to six percent, depending on OPIC's assessment of the commercial and political risks involved.

Lender Qualification: A lender may be a recipient of an OPIC guarantee if it is a legal entity created under the laws of the U.S., the District of Columbia, or any state or territory that is more than 50 percent beneficially owned by U.S. citizens. Foreign corporations that are more than 95 percent U.S. owned are also eligible.

Collateral: OPIC generally participates on a senior lender basis, pari passu with the holders of other senior debt, sharing first lien status on fixed assets and any other appropriate collateral. OPIC does not normally require a host government guarantee, although a sovereign guarantee may be considered on a case-by-case basis.

II. Investment Funds: OPIC also provides support for the creation of privately-owned and managed investment funds ("Investment Funds") that assist emerging market economies in obtaining long-term growth capital, accessing management skills and securing financial expertise. The Investment Funds are typically organized and structured like other private equity investment vehicles.

OPIC provides guarantees of long-term debt (typically with a 10- to 12-year maturity) to these Investment Funds. The debt is generally structured such that most of the interest expense is capitalized until the fund liquidates its investments, with the tenor often parallel to the fund's life and repayment occurring in the later stages of a fund's life.

Eligible investors generally include: U.S. citizens; U.S. corporations, partnerships and other organizations that are more than 50 percent beneficially owned by U.S. citizens; and foreign entities wholly owned by U.S. citizens. Investment Fund managers or general partners must be eligible investors. A significant percentage of the limited partner capital of the Investment Fund (typically an amount equal to at least 25 percent of the OPIC financing) must be provided by eligible investors.

OPIC-supported Investment Funds cover a variety of markets, including sub-Saharan Africa, Russia, Central and Eastern Europe, Latin America, the Middle East and Asia. Sector-specific Investment Funds are used worldwide and include investments in environmentally-friendly companies, water-related enterprises, maritime projects and independent power projects.

III. Political Risk Insurance: OPIC also offers political risk insurance to U.S. investors, contractors, exporters and financial institutions involved in international transactions. OPIC insurance generally covers currency inconvertibility, expropriation and political violence, and is available for investments in new ventures, expansions of existing enterprises, privatizations and acquisitions with positive developmental benefits.

OPIC typically insures up to 90 percent of eligible investments. However, loans and capital leases from financial institutions to unrelated third parties may be insured for 100 percent of principal and interest. OPIC also offers co-insurance and re-insurance with private market carriers, in order to increase capacity for large projects.

OPIC's "Quick Cover" program provides expedited coverage for projects that are worth less than $50 million in eligible countries. Certain projects in the financial services, wireless telecommunications services, electricity distribution and hotel sectors, as well as bid bonds, may receive political risk insurance coverage within two weeks of receipt by OPIC of a completed qualifying application.

OPIC insurance rates are generally based on the risk profile of the project and are fixed for the life of the contract. Premiums are usually paid annually and in advance.

OPIC insurance is available to citizens of the United States; corporations, partnerships or other associations created under the laws of the United States, its states or territories that are beneficially owned by U.S. citizens; foreign corporations at least 95 percent owned by investors eligible under the foregoing criteria; and other foreign entities that are 100 percent U.S. owned.

For more information, please contact: Gerald Stoltz, Esq., Partner, Washington, D.C. Office, Thompson Coburn LLP, 202-585-6919. gstoltz@thompsoncoburn.com.

Interfax Ukraine, Kyiv, Ukraine, Thursday, April 23, 2009

KYIV - Ukraine's government has instructed the Defense Ministry and the Economy Ministry to settle the situation with the U.S. Overseas Private Investment Corporation's activities in Ukraine.

According to the resolution by the Cabinet of Ministers dated April 15, the Defense Ministry and the Economy Ministry should appoint an institution to provide for the implementation of a memorandum of mutual understanding laying the grounds for the return of Overseas Private Investment Corporation (OPIC) to Ukraine. The memorandum was signed by the governments of Ukraine and the United States on November 10, 2008.

As reported, OPIC suspended its activity in Ukraine in September 1998 in connection with the payment of insurance coverage to Alliant Techsystems (the United States).

As the issue has remained unsettled for over 10 years, the governments of Ukraine and the United States have decided to accompany the settlement of the dispute between the two economic entities - OPIC and CJSC Alliant Kyiv.

The Government of Ukraine and the Government of the United States signed a memorandum of understanding in November 2008 enabling OPIC to resume activity in the country, with a stipulation that the parties help settle an insurance claim on an OPIC-supported project in Ukraine.

Ukrainian News-on-line, Ukrainian News Agency, Kyiv, Ukraine, April 23, 2009 

KYIV - The Cabinet of Ministers ordered the Defence Ministry and the Economy Ministry to ensure fulfillment of agreements with the United States of America to settle problems with the Overseas Private Investment Corporation (OPIC), reads the Cabinet directive No. 425 issued on April 15.

In particular, the government instructed the Defence Ministry jointly with the Economy Ministry to determine a company which will ensure the fulfillment of the memorandum of understanding signed by the Ukrainian and US government on November 10, 2008.

The Defence Ministry was also instructed to submit proposals to the Cabinet, in case of necessity, on making amendments to the legislation for the fulfillment of the memorandum provision.

As Ukrainian News earlier reported, Economics Minister Bohdan Danylyshyn and United States Ambassador to Ukraine William Taylor on November 10, 2008 signed a memorandum of understanding between Ukraine and the United States, which lays the foundation for re-start of OPIC's operations in Ukraine.

Taylor forecast that investments totaling USD 500 million will flow into Ukraine during the period of 2009-2010 following the resumption of the OPIC operations in Ukraine.

In 2007, the Overseas Private Investment Corporation offered that the Ukrainian government pays USD 34 million as reimbursement for losses of Alliant Techsystems which with Alliant Kyiv serving as intermediary was engaged in recycling of Ukrainian ammunition from 1993 to 1999 when it left the Ukrainian market following business disagreements with the Ukrainian side.

The money invested by Alliant Techsystems into the project had an insurance cover from OPIC.  OPIC has for a long time requested the Ukrainian government to compensate for these losses.

OPIC is an independent agency of the federal government of the United States that provides commercial services, including insurance of American companies operating abroad against political and economic risks.
U.S. Overseas Private Investment Corporation (OPIC)

By Jim Davis, Business Ukraine magazine, Kyiv, Ukraine, Monday, February 11, 2008

Amid all the fanfare that has accompanied the signing of a protocol which will bring Ukraine WTO membership, it is worth noting that a disagreement over a relatively small amount of money has made it impossible for Ukraine to enjoy the benefits of an obscure but extremely important agency of the United States government, the Overseas Private Investment Corporation (OPIC).

Estimates made by well-informed persons involved in the process relating to OPIC would suggest that had the problem could have been resolved when it
first arose in 1999, Ukraine could have gained an absolute minimum of an additional USD 5 - 10 billion in foreign direct investment - and probably a lot more than that.

The issue could have been solved years ago, but it was as is so often the case it is a problem for which no one had primary responsibility on the Ukrainian side.

All those, i.e. the various ministers, who had parts of the responsibility within their jurisdictions failed to understand the overall importance of the issue and therefore guarded their own turf rather than that of the state as a whole.

The end result has been to deny the Ukrainian economy one of the tools that could have been attracting investment into the country ever since, with a potential opportunity cost running into the billions of dollars.

The matter involves the non-payment of a state debt incurred by the Ministry of Defence about ten years ago at a time when the needs of various ministries were seriously under-funded and ministers were prone to making deals first and worrying about payment later.

The debt in question was covered by OPIC political risk insurance. OPIC paid the claim to the insured U.S. supplier and looked to Ukraine to ultimately
make good on the original agreement, as was called for in the Ukraine-OPIC agreement.

The amount of the claim, approximately USD 17 million, is quite small when viewed in the light of the overall budget of Ukraine. For the uninitiated, USD 17 million might appear to be a sum that could be dealt with in a simple meeting among ministers of any government.

However, there is no single ministry nor any single minister who has ever been tasked with dealing with the problem in a priority manner, so time and time again the issue has been discussed at seemingly high-level meetings between U.S. ambassadors and embassy staff on one side and various ministers and prime ministers on the other.

The matter is further complicated by the nature of Ukraine's budget process. No government has wanted to debate the debt in parliament so it has never
been made a part of any annual state budget.

With no line item listing of the debt, some other mechanism would need to be found in order to keep a payment from being illegal under the existing
legislation of the state budget act. So far, no creative payment mechanism has been found that would meet the needs of both sides of the disagreement.

The most recent top-level discussions came during a visit to the United States by then-Prime Minister Viktor Yanukovych in late 2006. At the time Yanukovych promised U.S. officials during discussions that the matter would have his personal attention and would be settled in a very short time. However, the Yanukovych government neither paid the amount owed nor requested or agreed to negotiations to adjust the amount owed.

OPIC is an independent U.S. government agency whose mission is to mobilise and facilitate the participation of U. S. private capital and skills in the
economic and social development of less developed countries and areas, and countries in transition from non-market to market economies.

OPIC assists U.S. companies by providing financing (from large structured finance to small business loans), political risk insurance, and investment funds. OPIC complements the private sector in managing risks associated with foreign direct investment and supports U.S. foreign policy.

Since its establishment in 1971, OPIC programmes have grown and expanded to encompass the support of development in over 150 countries. In 2007, OPIC assisted 70 projects in 38 countries and regions involving a wide range of industries. Of all the projects underway around the world in 2006, 87% or 61 projects involved U.S. small businesses in 35 U.S. states.

Many OPIC projects involve U.S. procurements, but it is also small and medium-sized enterprise (SME) projects in recipient cooperating countries that receive the greatest benefits. For example, in Kazakhstan, OPIC provided debt financing for a USD 1.89 million investment in the Asian Credit Fund (ACF), a non-banking microfinance institution established by
the Mercy Corps.

In Azerbaijan, OPIC provided financing to SOAKredit LLC (SOA), an independent limited liability non-credit organisation. SOA's purpose is to implement an innovative finance programme primarily designed to stimulate local business growth and facilitate Azerbaijan's transition from a demand to a market economy.

In Russia, OPIC is providing financing to ZAO Europlan (Europlan), the leading leaser of equipment and vehicles to SMEs throughout the Russian Federation, to support a planned USD 450 million expansion.

Nadir Shaikh, Chairman of the Board of Citibank Ukraine, explained that SME firms and medium-sized projects are the ones that would benefit most if
Ukraine settles its dispute with OPIC.

Shaikh has been one of the persons most active in promoting a settlement with OPIC and as recently as two weeks ago participated in a meeting with
senior government officials where this matter was discussed.

"We know from experience that the largest foreign firms come here fully prepared to finance their own way into the Ukrainian market. Their investments are based on advice from the most sophisticated sources in their own companies or from professional advisors such as investment banks. It is the smaller foreign investors who need the type of help and risk coverage that OPIC is able to give.

"Making OPIC political risk insurance available would, for example, would give many smaller foreign investors the kind of backing that would first help convince their own boards of the viability of investments in Ukraine, and would also assist them in finding financing for projects here or in their home country.

"In addition, it would help Ukrainian companies to get access to financing that could be provided by such banks as Citibank, based on OPIC risk coverage programmes. Settling the current dispute requires a firm decision and political will on the part of government to find a financing mechanism to pay the current claim. I am optimistic that the efforts of the current government are more likely to find a solution to this problem," Shaikh concluded.

One of the most interesting elements in the OPIC-Ukraine issue is the flexibility exhibited by OPIC in attempting to settle the claim. On several occasions various Ukrainian governments have been told that while USD 17 million is the amount actually owed, OPIC is willing to engage in negotiations that could lead to a solution that would mean a substantially reduced settlement.

Even with the clearest signals possible from OPIC, no Ukrainian government over the last ten years has been willing or able to find the will to effect a settlement.

The issue has not been filed away in a long forgotten filing cabinet, either. Morgan Williams, president of the U.S.-Ukraine Business Council (USUBC) said that the OPIC issue has been a matter of discussion between the two governments in every meeting that he has attended in Washington or Kyiv in recent years.

"On January 31, while addressing a meeting of the USUBC that included representatives of the American Chamber of Commerce and U.S. embassy officials, Vice-Prime Minister Nemyrya made a point of telling the audience that he was fully aware of the problem and that he expects a solution to be found soon. We sincerely hope that is correct.

"OPIC programmes are being used all over the world to spur development and USUBC thinks that the inability of Ukraine to solve its OPIC problem has
cost the country at least one billion and perhaps several billions of dollars in lost investment opportunities. In effect, a failure to solve the OPIC issue has a negative effect on Ukraine's ability to create jobs and wealth for all of Ukraine's citizens.

"For example, in the autumn of 2005 OPIC conceived and was ready to implement a USD 100 million private equity fund programme for Ukraine. I have been told on the back channel by top U.S. government officials in Washington that the total value of OPIC programmes that could be implemented here within a relatively short time might have a total value of as much as USD 500 million."

"However, it is the government of Ukraine that must turn the key to open what is literally a treasure trove of new investment and risk guarantee opportunities. I hope it will make the effort necessary to find the solution needed," Williams concluded.

LINK: http://www.businessukraine.com.ua/ukraine-s-outstanding-opic-debt

The Associated Press, Kiev, Ukraine, Sunday, July 19th 2009 

KIEV, Ukraine - U.S. Vice President Joe Biden is visiting Georgia and Ukraine starting Monday, meeting leaders eager for further reassurance that Washington still supports their joining NATO and that its effort to warm relations with Russia won't come at their expense.

The Kremlin, having seen several former communist countries of eastern Europe enter the Western alliance, strongly opposes more of its own former republics joining. And although the Obama administration has insisted nothing has changed regarding the Georgian and Ukrainian candidacies, there's a widespread perception in the former Soviet bloc that the U.S. has opted to move more slowly.

On Thursday, an open letter whose signatories included such icons of the battle against Soviet domination as Poland's Lech Walesa and the Czech Republic's Vaclav Havel urged the Obama administration not to sacrifice Russia's smaller neighbors for better relations with Moscow.

Ukraine and Georgia have drawn some comfort from Obama's explicit warning to Russia, during this month's Moscow summit, to respect its neighbors' borders. Biden's visit comes 11 months after Russia and Georgia fought a five-day war over two breakaway Georgian regions.

Georgian President Mikhail Saakashvili may be looking for stronger support because of speculation, rife in both Georgia and Russia, that the war could erupt anew this summer.

"This visit will be aimed at cooling the hotheads in Moscow and starting more active work on de-occupying Georgian territory," said Temuri Yakobashvili, the Georgian government minister in charge of efforts to recover South Ossetia and Abkhazia, which Russia has recognized as independent despite international protest.

Biden's national security adviser Tony Blinken reiterated Washington's stance on Georgia's breakaway regions Friday. "First of all, the United States is not - will not - recognize them as independent states, and we stand firmly for the territorial integrity and sovereignty of Georgia," Blinken said.

Georgian officials are likely to look to Biden for a strong statement about Russia's posture and expanded military presence in both regions. Georgia's national security adviser, Eka Tkeshelashvili, said during a Washington visit that President Barack Obama's Moscow speech reduced the chance of further conflict. "The signal has been given very directly and very firmly in the way it usually needs to be given to Russia," she said.

Analysts say Saakashvili also needs U.S. support for his political survival after his rule was threatened this spring by mass protests. "It's very important for Saakashvili to show that his government is supported by the U.S. and the West, to prove that he is a respectable leader of the country and to show his political opposition that he should not be blamed for losing the war," said Nikolai Petrov of the Carnegie Moscow Center, a Moscow-based think tank.
Experts here say Biden has close relations with the Georgian leadership. He visited Georgia last year as chairman of the Senate Foreign Relations Committee.

Ukraine also hopes Obama proves as sympathetic an ally as President George Bush, who actively supported Ukraine's NATO bid despite fierce opposition from Moscow. "There are no concerns whatsoever that Washington's effort to jump-start relations with Russia will be done at Ukraine's expense," Andriy Honcharuk, an aide to President Viktor Yushchenko, told reporters last week.

Blinken, Biden's national security adviser, was more cautious Friday, confirming Washington's commitment to "the broad principle that NATO's door is open to both countries, to Georgia and Ukraine." He added however, that Georgia and Ukraine must work hard to meet the membership criteria.
"The door is open, and we want to help you and work with you to get you to the point where you can meet the requirements of membership," he told reporters.
Some analysts are skeptical. "Compared with President Bush, the Obama administration is less willing to lobby NATO allies" to admit Ukraine, said Alex Brideau, a Ukraine analyst at Eurasia Group, a U.S.-based firm that advises on geopolitical risks.

Whatever is decided, neither Ukraine nor Georgia seems likely to join NATO soon. Last year's war caused some Western governments to question the wisdom of expanding NATO eastward because, had Georgia been a member then, NATO would have had to respond militarily.
Each of the 28 NATO member countries has veto power over new applicants, and France and Germany have signaled their opposition to accepting Georgia and Ukraine soon.

UNIAN news agency, Kiev, in Ukrainian 1102 gmt 16 Jul 09
BBC Monitoring Service, UK, in English, Thursday, July 16, 2009 
KIEV - Ukraine will raise the issue of institutionalizing Ukrainian-US relations when US Vice President Joseph Biden comes to visit.  A UNIAN correspondent quoted the deputy head of the presidential secretariat, Andriy Honcharuk, as saying this at a news briefing.

He said that the issue is timely today. However, he does not know whether a format or form of such cooperation is to be announced in the wake of negotiations. This might be a strategic council or an international commission at the level of presidents which once existed in the time of Bill Clinton's presidency, he said.

He said that Biden would visit Ukraine on 20-22 July. Within the framework of his visit, he is planning to meet Ukraine's senior leadership. In particular, the
US side requested a meeting with Prime Minister Yuliya Tymoshenko. Honcharuk said that Biden might meet Ukrainian MPs.
As for talks with Ukrainian President Viktor Yushchenko, Honcharuk said that they would discuss bilateral cooperation, security issues and further top-level contacts between the two states.

Honcharuk could not say when and where the presidents of Ukraine and the USA can meet: either during the visit by US President Barack Obama to Ukraine or during the UN General Assembly meeting in New York scheduled for late September.
He said Ukraine would also seek clarifications concerning a number of statements made by the Russian leadership following Obama's visit to Moscow.

Agence France Presse (AFP), Washington, D.C., Sunday, July 19, 2009
WASHINGTON -  US Vice President Joe Biden will leave for Ukraine and Georgia Sunday amid concern in both nations that their relations with the United States could suffer as US-Russian relations improve.

Biden will seek to underline US support for the sovereignty of the two former Soviet republics, which have increasingly turned away from Russia and now hope to become NATO alliance members.

Both countries have difficult relations with Russia, which is unhappy about the increasingly strong US and NATO relations with its former satellites.
The tensions culminated last year in an August war between Russia and Georgia over South Ossetia, a territory that proclaimed its independence from Georgia in the 1990s but is not internationally recognized as a nation state.

When Georgia's pro-American president Mikhail Saakashvili sent soldiers into the territory in an attempt to retake control, Russian President Dmitri Medvedev responded in kind.

The Russian military defeated Georgia's forces and Russia quickly declared South Ossetia independent. The war served to exacerbate discord between Russia and the United States in the final months of former president George W. Bush's administration.
Since taking office in January, Obama has tried to restart US-Russian relations, but during a visit to Moscow last week he "reiterated my firm belief that Georgia's sovereignty and territorial integrity must be respected."

Georgia responded positively to Obama's statements, with Saakashvili saying in remarks after the US president's trip to Russia: "There was no trade-off; Georgia has not been sold." However, in an apparent snub to Obama, Medvedev is scheduled to make his first visit to South Ossetia on Monday.
Georgian Deputy Foreign Affairs Minister Giga Bokeria told AFP he understands US attempts to improve its relations with Russia.  "We cannot be against such cooperation. But the US-Russian cooperation must not... be developed at the expense of fundamental values. Otherwise it could have catastrophic consequences for international security," he said.

"Our efforts to reset relations with Russia will not come at the expense of any other country," said Tony Blinken, national security advisor to the vice president.

"We will continue to reject the notion of spheres of influence, and we will continue to stand by the principle that sovereign democracies have the right to make their own decisions and choose their own partnerships and alliances."  Blinken added that, despite opposition from Moscow, the door to NATO remains open for Georgia and the Ukraine.

According to a source close the Ukranian presidency, Kiev is hoping to secure a bilateral deal with the United States containing national security guarantees.
The United States is close to announcing a deal to begin negotiations on the subject, the source said.

In addition to international relations, the United States is focused on democratic efforts inside both countries, according to Blinken, who said both nations face "the challenge of fulfilling the promise" of their revolutions.

Energy concerns will also be a topic of discussion in Ukraine, where continuing conflicts with Russia over the price of gas have interrupted Europe's gas supply.

Biden leaves Washington on Sunday night and is expected to arrive in the Ukraine on Monday night. He will arrive in Georgia on Wednesday evening and return to the United States the following night.
Salans law firm, Kyiv, Ukraine, Monday, July 20, 2009

KYIV - On July 9, 2009 a professional seminar entitled “Effective Use of International Arbitration and Litigation during the Economic Downturn” took place in Kyiv. The event was organized by Salans Kyiv with the support of the U.S.-Ukraine Business Council (USUBC) and SigmaBleyzer in Ukraine.  The seminar attracted in-house lawyers and top managers from leading Ukrainian and international companies, investment funds and banking institutions.
In the opening remarks to the seminar, Dr. Edilberto Segura (Partner and Chief Economist of SigmaBleyzer/The Bleyzer Foundation) welcomed the audience and provided an assessment of the current state of the Ukrainian economy and investment climate in the country.  Lyudmyla Dudnyk, Programme Director, U.S.-Ukraine Business Council (USUBC), welcomed the seminar’s organizers and participants, including about 30 members of USUBC.
Salans’ speakers included: Brenda Horrigan (Partner, Co-Head of Salans’ International Arbitration Group, Salans Paris), Barton Legum (Partner, Head of Salans’ Investment Treaty Arbitration Practice, Salans Paris) and Myron Rabij (Partner, Head of Salans’ Real Estate Group in Ukraine, Salans Kyiv).
In their presentations, the speakers covered the following topics: “A Dispute Resolution Toolkit for the Time of Crisis”, “Investment Treaty Arbitration: an Option not to be Overlooked” and “Enforcing Arbitral Awards in Ukraine”. 
The current global financial crisis has changed the business environment in all sectors of the Ukrainian economy.  The commercial setting and context of a contract can alter swiftly and significantly, making legal disputes increasingly relevant.  Any actual or potential agreement to which a foreign entity is party needs to be considered with dispute resolution in mind:
Those considering signing an agreement with a foreign party will need to consider whether to choose arbitration, which rules to adopt and which venue to select, as well as how to draft  to ensure fairness, efficiency and cost effectiveness, should a dispute arise.
Those who have already put pen to paper will benefit from a greater understanding of how the dispute resolution clause works on a practical level and how to approach discussions from the outset, to ensure optimum protection should matters escalate to a dispute.
Those for whom issues have already arisen will require guidance on the steps to take from the commencement of a legal dispute to the provision of the judgment or award.  Appropriate and informed action is vital to the successful enforcement of an arbitration decision in Ukraine and this was one of the focal points of the seminar.
Salans examined dispute resolution from a variety of practical aspects, relevant to all stages of the contractual process.  Discussions centered on the importance and effectiveness of including properly tailored dispute resolution clauses in any international contract: “Dispute resolution provisions are used rarely, but ultimately, a contract is only as good as its dispute resolution provision”.

Salans is an international commercial law firm built on a pioneering spirit with 21 offices worldwide. Salans LLP has offices, or is associated with Salans offices in:  Almaty, Baku, Barcelona, Beijing, Berlin, Bratislava, Bucharest, Budapest, Frankfurt, Hong Kong, Istanbul, Kyiv, London, Madrid, Moscow, New York, Paris Prague, Shanghai, St. Petersburg, and Warsaw. 

Salans has been active in Ukraine since 1988.  Salans is ranked as a top tier law firm in Ukraine and globally by the leading international legal directory Chambers Global.  For more information please visit www.salans.com.  Salans is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C.. 

The U.S.-Ukraine Business Council (USUBC) is a private, non-profit trade association, headquartered in Washington, D.C., representing the interests of over 100 businesses active in Ukraine.  For more information please visit www.usubc.org.

SigmaBleyzer is one of the largest and most experienced private equity funds in Eastern Europe.  SigmaBleyzer is focused on investing in regions that are making the transition to free market economies – especially countries of the Former Soviet Union and Eastern Europe. For more information please visit

CONTACT: Irina Batmanova, Business Development and Marketing Manager, Salans, 49-A, Volodymyrska Street, 2nd floor, 01034 Kyiv, Ukraine,
Phone: +380 (44) 494 4774, Fax: + 380 (44) 494 1991, e-mail: ibatmanova@salans.com., www.salans.com