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

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

SERIOUSLY BURNED GIRL FLOWN TO THE UNITED STATES
Young girl was rescuing her two-year-old sister

KYIV - A charter plane with five-year-old Nastia Ovchar on board
departed on Thursday evening heading for Boston, the USA.

Nastia Ovchar, 5, a resident of Kharkiv region, who was seriously
injured in a fire, rescuing her two-year-old sister, and is staying in
a very grave condition is being accompanied by her mother and
doctors, said Ukrainian Ombudswoman Nina Karpachova, who was
instructed by President Viktor Yushchenko to control the case, told
Ukrinform.

President Viktor Yushchenko and his spouse [Kateryna] have
been taking care of the girl since the first day, when the accident
happened. [article six]

"THE ACTION UKRAINE REPORT" - Number 449
E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, FRIDAY, March 25, 2005

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

1. U.S. CONGRESSIONAL DELEGATION TO VISIT UKRAINE
United States Embassy in Kyiv, Kyiv, Ukraine, Thu, March 24, 2005

2. PRESIDENT YUSHCHENKO DISCUSSES ACCELERATION OF
UKRAINIAN-AMERICAN RELATIONS AND POSSIBLE BILATERAL
PROJECTS WITH US CONGRESSMEN
The National News Agency of Ukraine
Ukrinform, Kyiv, Ukraine, Thursday, March 24, 2005

3. PRESIDENT OF UKRAINE INVITED TO DELIVER
SPEECH TO US CONGRESS
The National News Agency of Ukraine
Ukrinform, Kyiv, Ukraine, Thursday, March 24, 2005

4. WESTERN UNION TO CUT TRANSFER RATES TO UKRAINE
TV 5 Kanal, Kiev, in Ukrainian, 24 Mar 05
BBC Monitoring Service, March 24, 2005

5. PRESIDENT YUSHCHENKO'S WELCOME COMMITTEE PLANS
TWO MAJOR PUBLIC EVENTS FOR HIS VISIT TO THE U.S.
Rally at Shevchenko Monument, Banquet Honoring Yushchenko
E. Morgan Williams, Publisher and Editor
THE ACTION UKRAINE REPORT
Washington, D.C., Friday, March 25, 2005

6. SERIOUSLY BURNED GIRL FLOWN TO THE UNITED STATES
Young girl was rescuing her two-year-old sister
Ukrinform, Kyiv, Ukraine, Thu, March 24, 2005

7. PLAN TO END PRICE DEADLOCK IN RUSSIA
By Tom Warner in Kiev, The Financial Times
London, UK, Wednesday, March 23, 2005

8. AN INTERVIEW WITH FINANCE MINISTER VIKTOR PINZENYK
By Nataliya Yatsenko, Zerklalo Nedeli, Mirror-Weekly
International Social Political Weekly
Kyiv, Ukraine, Week of March 19-25, 2005

9 UKRAINE'S PROLIFERATION SKELETONS
By David Isenberg, Asia Times, Hong Kong, Fri, Mar 25, 2005

10. AN 'ENRICHED" PARTNERSHIP
U.S. is pressing for Kyiv's agreement for removal of nuclear fuel
containing highly enriched uranium-wet from Ukraine to Russia
ANALYSIS: By Vladimir Kravchenko
Zerkalo Nedeli, Mirror-Weekly, No. 10 (538)
International Social Political Weekly
Kyiv, Ukraine, Week of March 19-25, 2005

11 LVIV REGIONAL COUNCIL ASKING YUSHCHENKO AND
TYMOSHENKO TO INITIATE RECOGNITION OF
UPA AS WII PARTICIPANT
Ukrainian News Agency, Kyiv, Ukraine, Thu, March 24, 2005

12 UNESCO HAS WATCHFUL EYE ON LVIV CULTURAL HERITAGE
Kyiv Weekly, Kyiv, Ukraine, Thu, March 24, 2005

13 EASTER EGG DESIGNS ARE A FOLK-ART 'PRAYER'
By Lisa Rauschart, Special to the Washington Times
The Washington Times, Washington, D.C., Thu, Mar 24, 2005

14. BONBONS PRESENT A PASTEL RENDITION OF THE
UKRAINIAN EASTER EGG TRADITION
Petits Bonbons, Pursuit of Happiness
CHOCOLAT MODERNE
Joan Coukos, Chocolatier & CEO
New York, New York, Friday, March 25, 2005

15. THE UKRAINIAN TORBAN
Torban was popular from about 1690 to 1920
Roman Turovsky: The Torban Website
March, 2005, http://polyhymnion.org/torban
==============================================================
1. U.S. CONGRESSIONAL DELEGATION TO VISIT UKRAINE

United States Embassy in Kyiv, Kyiv, Ukraine, Thu, March 24, 2005

United States Senate Democratic Leader Harry Reid (Democrat-Nevada)
will lead a bi-partisan congressional delegation on a visit to Ukraine on
Thursday, March 24. Senator Reid is the senior Democratic member of
the United States Senate. Other members of the delegation are Senators
Richard Durbin (Democrat-Illinois), Barbara Boxer (Democrat-California),
Patty Murray (Democrat-Washington), Robert Bennett (Republican-Utah),
Lamar Alexander (Republican-Tennessee), and Ken Salazar (Democrat-
Colorado).

The delegation plans to meet with senior Ukrainian officials, including
President Viktor Yushchenko, to discuss ways to strengthen U.S.–
Ukrainian relations and to continue to support democracy in Ukraine.
The delegation will also meet with Ukrainian civil society leaders.
Ukraine is the delegation’s final stop in a trip that has included visits
to Israel, Iraq, and Georgia. -30- [Action Ukraine Report Monitoring]
--------------------------------------------------------------------------------------------------------
http://usembassy.kiev.ua/infocentral_eng.html
Public Affairs Section, United States Embassy Kyiv
============================================================
2. PRESIDENT YUSHCHENKO DISCUSSES ACCELERATION OF
UKRAINIAN-AMERICAN RELATIONS AND POSSIBLE BILATERAL
PROJECTS WITH US CONGRESSMEN

The National News Agency of Ukraine
Ukrinform, Kyiv, Ukraine, Thursday, March 24, 2005

KYIV - President Viktor Yushchenko met with a delegation from the
United States Congress on Thursday. Mr. Yuschenko and members
of the delegation discussed ways of accelerating Ukrainian-American
bilateral relations as well as the possibility of realizing bilateral
projects.

Mr. Yuschenko raised the issue of abolishing the provisions of the
Jackson-Vanik amendment in relation to Ukraine.

The delegation expressed interest in the political situation in Ukraine and
the new Ukrainian government's position in relation to the role of Ukraine
in Europe and the world. They also discussed Mr. Yuschenko's forthcoming
visit to the United States, which is scheduled for April 4.

Mr. Yushchenko has been invited to address a joint session of the United
States' Congress and Senate during the visit. Such an honor was once
granted to Lech Walensa, Vaclav Havel, Nelson Mandela, and Boris Yeltsin.

Mr. Yuschenko is expected to discuss the implementation of reforms in
Ukraine, Ukraine's integration into the world economy, and the fight against
corruption during a meeting with United States President George Bush.

Moreover, Messrs. Yuschenko and Bush plan to discuss intensification of
cooperation between Ukraine and the United States in various spheres within
the framework of their strategic partnership. They will also discuss the
presence of Ukrainian peacekeeping troops in Iraq.

A bilateral document outlining the prospects for Ukrainian-American
bilateral relations is expected to be signed at the end of the visit. -
=============================================================
3. PRESIDENT OF UKRAINE YUSHCHENKO INVITED TO DELIVER
SPEECH TO US CONGRESS

The National News Agency of Ukraine
Ukrinform, Kyiv, Ukraine, Thursday, March 24, 2005

KYIV - President Viktor Yushchenko has been invited to deliver a
speech at a joint session of the Senate and the House of
Representatives of the US Congress during his visit to the USA in
early April, Ukrinform reports with reference to the Ukrainian service
of the Voice of America.

Among other leaders who had an honor to make a speech at the
Congress were Lech Walesa, Vaclav Havel, Nelson Mandela and
Boris Yeltsin.

The first official visit by the Ukrainian President will start on April 4.
According to the White House press service, George Bush expects to
hear from the Ukrainian President about his efforts to conduct reforms
in Ukraine, Ukraine's integration to the world economy and combating
corruption. The two Presidents are supposed to discuss the nations'
strategic cooperation in different domains.

The highest meeting will also touch on the Ukrainian peacekeeping
contingent's presence in Iraq. The visit is expected to result in a
bipartite document, which would outline prospects for bilateral relations.
===============================================================
4. WESTERN UNION AGREES TO CUT TRANSFER RATES TO UKRAINE

TV 5 Kanal, Kiev, in Ukrainian, 24 Mar 05
BBC Monitoring Service, Thu, March 24, 2005

KYIV - [Presenter] Ukrainian workers abroad will be able to transfer money
to Ukraine at lower rates from 1 April. In response to an investigation by
the Ukrainian Anti-Monopoly Committee [AMC], Western Union has pledged
to reduce its money transfer rates. Rates for transfers from Spain, Portugal
and Italy will be reduced by 40 per cent on average.

The largest numbers of Ukrainian workers are in precisely these countries.
At present it is necessary to pay around 16 per cent of the amount for
transfers from these countries. The company also promises to find ways to
reduce rates for transfers from the USA and a number of other countries.

This decision was the result of negotiations between Western Union
representatives and the AMC. Last May, the AMC opened a case over the
company's abuse of its monopoly position.

[AMC head Oleksiy Kostusev, in Russian] This primarily affects the people we
are most concerned about - those who are transferring 100-200 euros, that
category. These are the people we want to protect, who have earned a couple
of hundred [euros] and want to transfer it.

[Interfax-Ukraine reported at 1710 that the agreement was reached during
negotiations between AMC representatives and Western Union's Regional
Vice-President Kurt Marx, chief consultant Chantal Jauvin and a group of
lawyers "who travelled to Ukraine on short notice". The AMC warned earlier
this week that it would fine Western Union unless it agreed to reduce its
rates by 24 March - see TV 5 Kanal, Kiev, in Ukrainian 1600 gmt 22 Mar 05.]
============================================================
5. PRESIDENT YUSHCHENKO'S WELCOME COMMITTEE PLANS
TWO MAJOR PUBLIC EVENTS FOR HIS VISIT TO THE U.S.
Rally at Shevchenko Monument, Banquet Honoring Yushchenko

E. Morgan Williams, Publisher and Editor
THE ACTION UKRAINE REPORT
Washington, D.C., Friday, March 25, 2005

WASHINGTON, D.C. - President Yushchenko's Welcome
Committee in Washington, D.C. is in the process of finalizing
their plans for two major public events the Committee will
sponsor in honor of the new Ukrainian President, Viktor
Yushchenko, while he is in the United States for his first
official visit as President.

EVENT ONE -- Wreath Laying and Orange Revolution Rally,
Shevchenko Monument

Event: Wreath Laying and Speech By Viktor Yushchenko
President of Ukraine
Where: Shevchenko Monument, Washington, D.C.
Located near DuPont Circle, P & 22nd Street
When: Wednesday, April 6, 2005, 12 Noon - 2 p.m.
Attendance: The event is open to the public.

EVENT TWO -- Banquet in Honor of President Yushchenko

Event: Banquet in Honor of Viktor Yushchenko
President of Ukraine
Where: Omni Shoreham Hotel, Washington, D.C.
2500 Calvert Street, N.W. (at Connecticut Ave)
When: Wednesday, April 6, 2005
Reception: 6:30 p.m.
Dinner: 7:30 p.m.
Dress: Black Tie Optional

Attendance: Tickets for the banquet are now on sale to the
public for $200.00 each. One can purchase a ticket by check.
Seating is limited and the space available will be sold on
the basis of when a check arrives. The banquet is
expected to be sold out in a very short period of time.

Checks should be made out to the 'Yushchenko Banquet
Committee' and mailed [with complete contact information]
immediately to the:
Ukrainian Washington Credit Union
P.O. Box 19228
Alexandria, Virginia 22320-1228.

Financial sponsors are needed for the two events. Special
sponsor tables (seating ten people) are available for the
Yushchenko banquet for $2,500.00 each. Please contact
the Committee for complete sponsor information.

Co-chairs of President Yushchenko's Welcome Committee are:

(1) Nadia Komarnyckyj McConnell, President
U.S.-Ukraine Foundation (USUF)
(2) Ihor Gawdiak, President
Ukrainian American Coordinating Council (UACC)
(3) Ihor Kotlarchuk, President
The Washington Group (TWG)
(4) Michael Sawkiw, President
Ukrainian Congress Committee of America (UCCA)
(5) Iryna Kurowyckyj, President
Ukrainian National Women's League of America

Other organizations represented on President Yushchenko's
Welcome Committee include the Action Ukraine Coalition;
Holy Trinity Particular Catholic Church; Saint Andrews
Orthodox Cathedral; Taras Shevchenko School of Ukrainian
Studies; The Bleyzer Foundation; The Ukrainian Association
of Washington; Ukrainian American Veterans, Inc.; Ukrainian
Catholic Shrine of the Holy Family; Ukrainian Federation of
America; Ukrainian Human Rights Committee Ukrainian
Institute of America; Ukrainian National Association; Ukrainian
National Information Service, Ukrainian Scouting Organization
(Plast); and the United Ukrainian American Relief Committee.

For additional information call:
1. U.S.-Ukraine Foundation, 202 347 4264
2. Ukrainian Congress Committee of America, 202 547 0018
3. Ukrainian American Coordinating Council,
Ihor Gawdiak, President, 410 884 9025
4. The Washington Group,
Ihor Kotlarchuk, President, 703 548 8534
5. Ukrainian National Women's League of America
Motria Slonewska, 703 536 7795

As further information becomes available about these two major
events they will be published in The Action Ukraine Report. -30-
----------------------------------------------------------------------------------------------------
NOTE: Your editor is a member of the finance committee of
President Yushchenko's Welcome Committee. If you need
further information please send an e-mail at morganw@patriot.net
or call me at 202 437 4707.
===========================================================
6. SERIOUSLY BURNED GIRL FLOWN TO THE UNITED STATES
Young girl was rescuing her two-year-old sister

Ukrinform, Kyiv, Ukraine, Thu, March 24, 2005

KYIV - A charter plane with five-year-old Nastia Ovchar on board
departed on Thursday evening heading for Boston, the USA.

Nastia Ovchar, 5, a resident of Kharkiv region, who was seriously
injured in a fire, rescuing her two-year-old sister, and is staying in
a very grave condition is being accompanied by her mother and
doctors, said Ukrainian Ombudswoman Nina Karpachova, who was
instructed by President Viktor Yushchenko to control the case, told
Ukrinform.

The girl will be transported by a plane of the company "AeroStar",
which fulfills special flights. Earlier, Nastia was supposed to be
transported to Germany, but because of certain difficulties, it was
decided not to lose time and to transport her to the USA.

President Viktor Yushchenko and his spouse [Kateryna Chumachenko
Yushchenko] have been taking care of the girl since the first day,
when the accident happened.

Kateryna Yushchenko managed to hasten the process of visas and
travel documents' execution at the US Embassy. Verkhovna Rada
members and some other patrons sponsored Nastia's transportation
to the USA. -30- [The Action Ukraine Report Monitoring Service]
============================================================
7. PLAN TO END PRICE DEADLOCK IN RUSSIA

By Tom Warner in Kiev, The Financial Times
London, UK, Wednesday, March 23, 2005

The presidents of Ukraine and Turkmenistan on Wednesday unveiled a
plan to bring Turkmen gas to the European Union as part of an effort to
break a deadlock over prices between Turkmenistan and Russia.

Viktor Yushchenko, president of Ukraine, and his Turkmen counterpart,
Saparmurat Niyazov, said they would launch talks with Kazakhstan and
Russia aimed at forming a consortium to invest in pipelines. The network
would boost Turkmen gas exports via Kazakhstan and Russiato Ukraine
and the EU.

The consortium's main investment would be a new pipeline snaking around
the eastern side of the Caspian Sea through Turkmenistan, Kazakhstan
and Russia, the two presidents told a press conference in Ashgabat.

Turkmenistan's existing export pipeline runs further east, crossing
Uzbekistan and Kazakhstan to join the Russian pipeline network.

The proposal comes amid prolonged deadlock over prices between
Turkmenistan and Russia, which stopped buying Turkmen gas on January
1 in response to a decision by Mr Niyazov to raise prices to $58 per
billion cubic meters (bcm) from the $44 per bcm that Russia and Ukraine
paid last year. Ukraine agreed to the higher price.

The deadlock threatens the EU's plans to increase imports of gas from the
former Soviet Union region, which depend ultimately on boosting central
Asia's westward exports.

Gazprom, Russia's state-controlled gas company, had planned to buy most
of Turkmenistan's gas output from 2006. It would then sell the gas to the
EU.

Alexander Ryazanov, a Gazprom vice-president, told a press conference in
Moscow yesterday that the company still hoped to carry through with the
agreement signed with Turkmenistan in 2003, according to which Gazprom
would take over the marketing of Turkmen gas in Ukraine and the EU in 2007.

Gazprom plans to buy 70 bcm a year of Turkmen gas from 2007 and 80 bcm a
year from 2009, and Mr Niyazov said the new consortium could export 60-70
bcm a year to Ukraine and the EU. But analysts said those were far-fetched
goals.

Stephen O'Sullivan, an analyst at United Financial Group, a Russian
brokerage, said Mr Niyazov often floated pipeline plans to boost production
but had not attracted investment capital. Turkmenistan's gas production
slipped slightly last year to 58.5 bcm, of which about 42 bcm was shipped
westward to Russia, Ukraine and the EU.

Gazprom last year formed Rosukrenergo, a 50-50 partnership with a group
of Russian and Ukrainian businessmen, to handle the transit of gas from
Turkmenistan to Ukraine and to draw investments into the dilapidated Uzbek
===============================================================
8. AN INTERVIEW WITH FINANCE MINISTER VIKTOR PINZENYK

By Nataliya Yatsenko, Zerklalo Nedeli, Mirror-Weekly
International Social Political Weekly
Kyiv, Ukraine, Week of March 19-25, 2005

Obviously the Verkhovna Rada will have a heated discussion of the new
2005 draft budget. But before this process begins, we decided to interview
Finance Minister Viktor Pinzenyk. Our aim was to gain initial understanding
of urgent problems in the areas of budget and taxation, as well as of the
rationale behind the government's actions.

ZN: To begin with, we would like to get more specific information on hidden
state budget deficits for this year. Most recently, the government has
published two different figures. Initially it was 32 billion hryvnias, but
then a few days later, it was 36 billion. Is this not the final data?
VP: . (nods his head in agreement)
ZN: Well, during a public report of the Finance Ministry on meeting the 2004
targets, it was rather amazing to hear the minister saying: "Are you
interested in the analyses of the situation or in figures? Are the figures
so wrong that they do not completely correspond the reality?
PV: They don't
ZN: What's next? How will the Finance Ministry work? Will it rely on your
experience and intuition?
VP: Intuition will be of use, since we are constantly facing various
paradoxes. I have not verified the data yet, but I am absolutely positive
that if we compare the volumes of imported goods in February 2005 and
February 2004, we will see decline in import. But we have statistics in
dollars that testify to a 20 percent growth.
In the article about VAT, your author Viktor Pinzenyk compared German and
Ukrainian statistics [on Ukrainian import]. There was a 1.5 billion gap
between the export declared by Germany and import declared by Ukraine.
Certainly there are some differences in methods of calculations, but they
cannot account for such a huge gap.
So, the problem lies not in statistics but in the absence of a government
willing to bring everything in order. Now we've started establishing order.
Due to this, it is very difficult to prognosticate any budget properties.
Even though we understand the rationale behind decisions and the database
of first optimistic results, we will base our budget draft on a pessimistic
forecast. It is very difficult to calculate the total of all possible
after-effects. Who can take a responsibility by giving the exact scope of
legalization that will be actually achieved? We are aware of its extremely
large scope, but this does not mean that we can write down any baseless
number in the budget.
ZN: But still, what will be the deficit of the state budget?
VP: Now we come up with 5.4 billion, whereas the December draft had
an 8.6 billion deficit. But this is not important. What is important is that
this
deficit is made up with privatization. We received 130-million hryvnia
revenues from privatization in the first two months. This is the problem.
But I hope that we will manage to settle the issue with after-payments for
20 to 30 enterprises in the near future. That is why the amount of 5.4
billion hryvnias does not look excessive. But I would like to emphasize that
nothing will basically change, even if there is an 8.6 billion deficit,
since this is two percent of GDP.
ZN: You said that budget deficit is associated with privatization revenues,
but I can't understand this. After all, the government has borrowed more
than 2 billion hryvnias in the internal market since the beginning of the
year---5.4 plus 2.2 .
VP: You cite the amount of borrowings but overlook the fact that we have
also paid the debts. In the first quarter, the total amount of out debt was
reduced. Moreover, in March we will not received 173 million dollars - which
is almost a billion hryvnias - in World Bank loan. This figure, however, is
included in the balance of budget revenues.
ZN: Does it have to do with some political decision?
VP: On behalf of the World Bank? No. The government has not yet made a
decision to do without this amount, but we have proposed that the prime
minister make such a move. We had two options: either to take this money as
a part of the system loan program and begin the third loan, or to start
preparing a new program and take this money as part of its tranche. The
majority in the government is inclined to the second option, since in March
we are able to settle all budget issues without the World Bank's loan.
ZN: As far as I know the situation with budget revenues is not critical now.
Why?
VP: First of all, we met our revenue targets for two months. I see that our
March targets will be surpassed. But since the Finance Minister must be
pessimistic, I will not give it out. Nevertheless, we will exceed our March
plan.
ZN: The main reason for current revision of the budget is believed to be the
rise of minimal pensions up to the minimal cost of living---up to 332
hryvnias---which was to be paid since January. Thus it is the matter of
paying additional money.
VP: This is not the only reason. If I were an accountant, I would proceed
from this. However, the Finance Ministry cannot allow itself to behave like
an accounts department. OK, if we bridge the gap this year, what is going to
happen to the Pension Fund in 2006? Catastrophe.
ZN: It is not surprising since none of the countries made their minimal
pension higher than the minimal wages.
VP: You have absolutely correctly stated the problem. On the surface, it
affects only the balance of the 2005 budget. However life does not stop on
December 31. That is why we had to solve the problem of financial provision
of the Pension Fund in a longer perspective. This year's budget includes the
issues, which might not be directly related to the Pension Fund's revenues,
but we are making a major breakthrough to restore the Pension Fund.
Up until now minimal wages, especially state minimal wages, were growing at
a lower rate than the average wages. We provide for its annual growth from
237 up to 300 hryvnias, or by 25 percent, whereas state minimal wages will
grow by 57 percent. This means we are solving two problems at once -
Pension Fund's revenues and salaries to doctors, teachers; and pensions
to pensioners.
We could have forgotten one more problem, but we did not. This is the
introduction of a tariff scale. In principle, we are unable to restore it
completely, since it would cost 43 billion hryvnias. But if we do not take
major steps now, we will never get this thing moving. The Finance Ministry
initiated the first move - broadening the range of salary scales and raising
the prestige of qualified labor. Initially, differentiation of the state
salary scale was 3.1. We are making it 3.35, but the target is 4.5. That is
why we will raise the salary of a qualified teacher or doctor higher than
the minimal wages.
ZN: Will the salary scale ever be restored in full?
VP: Certainly. We will possibly make more than one step. It depends on
the reaction to the current decision and on further development of the
situation.
ZN: Since you started analyzing the spending section of the budget, what
is the overall concept of its change?
VP: Sharp increase in spending related to the nature of budget. I mean
broadening of social services. This is not only about salaries, but also
about the increase in monetary provisions to military men. As we begin to
fight against smuggling, we must take care not only of the administration
and of cutting customs duties. In a new budget draft, we allocated money for
a twofold increase in salaries to customs officers. We will also increase
salaries to officials.
ZN: Through reduction of the staff and redistribution of resources?
VP: Not only. Reduction of the staff is only an additional resource.
ZN: Is staff of the Finance Ministry being reduced?
VP: Not yet. But we will suggest that every ministry reduces its staff by 10
percent, and it will be able to raise salaries even more than it is
allocated in the budget. The only thing that is left is the problem of
different pension types, but the issue is very involved and we are not able
even to touch it, to say nothing about solving it. In principle, it is
necessary to adopt one single pension system for all people. It is a bad
practice when pensions for different people are calculated according to
different systems. Some are eligible for 90 percent of their salaries,
others for 40 percent or 30 percent.
ZN: Do you want to abolish all 20-something special pension laws?
VP: We are not talking about the abolishment. We are talking about smooth
transition to a single system of pension provision. For example, officials
should be paid an appropriate salary so that their pensions will be higher
within one general system.
ZN: But such an approach may take 20 years.
VP: Less than that. We did not make the exact calculations since we are not
prepared for this solution. However, the government has already discussed
this philosophy.
ZN: Now let's analyze the revenue part of the budget just the same way. From
here will you get the revenues to cover up for the hidden deficit? You don't
want to give figures, and I can understand.
VP: It is not that I don't want to. As a matter of fact, there is not any
linear dependence. More money will be deducted from higher salaries for
pension purposes; consequently state subsidies to the Pension Fund will
decrease. A 13 percent income tax will be paid from these salaries that will
go to the local budgets. In addition, more money will be paid in VAT during
purchases of consumer goods that will go to the state budget, and so on.
That is why you should not be surprised when you hear different numbers - it
depends on the method of calculation. I would like that everybody to
understated the Finance Ministry. That is why I deliberately simplify
certain things. Hence are the different assessments that you have heard and
will hear.
And now about the sources of additional revenues. The first is a classic
one: The additional 6.3 billion hryvnias have been received as a result of
adjustment of macroeconomic indices. During December review of the budget,
the forecasted GDP was 409 billion hryvnias, whereas now it is 430 billion.
And again, we are unable to take account for everything, since we are
preparing documents on the state budget, while certain parts of the funds
have been received by local budgets, Pension Funds, Social Insurance Fund
for the temporary disabled, which pays allowances to children. When
macroeconomic indices change, a fund's own revenues increase and it needs
fewer subsidies from the state budget.
The second half of additional revenues will come from the state sector. At
last the state started treating the sate enterprises as its true owner. It
will receive income from this property. Fifty percent of the net income of
the state enterprises will go to the state budget, and the cabinet's
resolution is enough for that.
ZN: What percentage of the income went to the budget earlier?
VP: Fifteen percent on paper and zero in fact. Due to one single reason: The
state sector did not state any income. However, when we started analyzing
their financial plans even without any checks on site, we saw cash flows
from these enterprises to some private firms. When we dug in deeper into the
spending, we were shocked - downright embezzlement!
ZN: They paid for resources three times as much..
VP: You are absolutely right. Thus we are getting a huge resource. Now the
prime minister personally checks the financial plans of all state monopolies
(Naftogaz Ukraine, Ukrtelecom, Ukrzaliznytsia, etc.). I would like to
emphasize another important rule, laid down in the cabinet's resolution but
not yet enforced. It is the new principles of payment to the heads of state
enterprises. Directors of the state enterprises will receive salaries in the
form of a percentage of the net income. Thus the state is trying to prevent
them from using illegal schemes.
ZN: This percentage will obviously be differentiated?
VP: I can't give you a precise answer, but probably yes. This will be stated
in a director's contract. This is an essential step for the development of
the state sector. It is bad when the prime minister has to control all
financial plans. This is not her job and not the job of the Finance
Ministry. We need inner incentives to make directors interested in making
profit for the state. And finally, the third source of the revenues are
shadow operations, those where no taxes are paid.
ZN: In Ukraine, it is easier to say where taxes are paid, although the 13
percent income tax has been paid over recently.
VP: Not exactly. But we will work with the incomes of individuals in a
different way. We have already tried it out. We have made a simple request
to the heads of some Ukrainian companies: Raise salaries to you people.
Make a step toward the government and pay salaries legally. After all,
we know how much is paid illegally and how much is paid through bank.
ZN: But can we rely on the government's requests? You've just said it
yourself: Economic incentives must work.
VP: I was surprised at the fact that no matter whom we asked, everyone was
willing to cooperate. We just have no time, but we will also talk to the
heads of importing organizations. I see that they are ready to cooperate
with the government.These are the issues that do not need amendments to law.
We need law to eliminate the loopholes allowing people to avoid taxes.
ZN: But could this be done through amendments to the budget law? According
to the budget code, any tax amendments should be adopted no later than
August 15 of the year preceding the budget year. Once again, government
violates law.
VP: What does it violate? It was not us who left pensioners without pension.
ZN: One can find an explanation to everything, but wasn't it better to
propose amendments to the Budget Code?
VP: You must have been inattentive yesterday [during the public report of
the Finance Minister on meeting the 2004 budget targets - N.Ya.]. The bill
is called On Amendments to the Law On the 2005 State Budget of Ukraine and
some other legislative acts.
ZN: I mean that, according to the law, any amendments adopted in March 2005
will come into force only since January 1, 2006.
VP: Then let them pay pensions and other social allowances from their own
pockets! Not a single conscientious person can watch quietly as companies
with 4 billion hryvnias do not pay as single kopek in taxes! I have a
conscience and morals! I will never pass by it! The government will not wait
until 2006. Everything that has been done toward legalization of imports is
purely administrative. But we need economic levels to start working. Unless
the duties are cut down, they will always bribe customs officers.
ZN: The first step has already been taken.
VP: Why only the first? We have already the second package - a governmental
bill on goods of the 1st to 24th group. Custom duties are being reduced and
equalized. I find such a package approach logical. That is why I proposed
that the prime minister give up a major law on changes of custom duties
(otherwise it would take too long to get it adopted). We have picked out
"hot spots" and are now reducing tension in them.
ZN: What are the other gaps to be bridged by the government's amendments
to the budget and other laws?
VP: All that currently exist.
ZN: What will happen to the free trade zones? Will the appropriate laws be
abolished?
VP: Did they pay taxes in these zones?
ZN: No they did not.
VP: Now they will.
ZN: But still, will we have free trade zones?
VP: Everybody must pay taxes.
ZN: What is the formula of the amendments to the law on free trade zones?
VP: Can I cite a few figures for you? Privileges were granted to 8.4 billion
hryvnias, while only 4.5 billion were paid in taxes. Terrible statistics!
ZN: Does this apply to existing tax privileges?
VP: Only to the part of them, but they are provided by law. What does this
testify to? A hole has been made in the state financial sector. 8.4 billion
has been raised at the cost of doctors, teachers and pensioners and twice
only half of this amount has been returned. So, what is the purpose of the
cabinet's activities: to provide business with conditions suitable for
stealing or to protect the interests of the society? The governmental bill
provides for equal taxation conditions. Everyone should pay tax on income
and value added tax according to the current rates.
ZN: Can we say that the main source of budget revenues lies with equal tax
conditions and liquidation of privileges?
VP: It is hard to say whether it is the main source as we have already
mentioned a part of income of the state-owned enterprises and monopolies.
We also introduced changes to payment for the use of natural resources.
As for the other budget resources, we plan to set up an open and transparent
tender procedure. The prime minister personally supervises this bill, which
will provide for creation of an accurate information base, competition and
selection of the winner open in public. In most of the cases, better price
will be the main selection criteria.
The Finance Ministry has revised all its programs. None of the social
programs has been cut down, however we stopped funding the construction of
new Finance Academy, which was allocated 65 million hryvnias in the previous
budget. We cut this program by 100 percent since we do not lack educational
institutions. We also terminated three or four other programs .
ZN: Do you plan for any changes in the relation between the budgets of a
different level?
VP: The financial resource of local governments will obviously increase. But
we do not plan for any drastic changes due to the following reason. The
scale of changes is so large that cash starts flowing in different
directions. The point of payment of VAT has been changed (it is now
collected by the customs office at the border instead of the tax
inspection). This is one serious change and there will be others. Until we
see that these changes work, any corrections to the philosophy of relation
between the budgets of a different level are out of the question.
ZN: Will the article on mutual setoff for 6 billion hryvnias aimed at
compensation of devaluated savings remain in the budget?
VP: It will. But I have not signed the draft resolution yet, because not all
of the payments correlate. But we have former bankers on our staff, and
they say that it is possible to settle this issue. If this is correct, we
will launch it.
ZN: What will happen to a single tax and other simplified taxation forms?
VP: We were revising this issue, but I do not know the final decision at the
moment [this talk took place on March 15 - N.Ya]. We might re-establish
status quo and in a month will introduce a new bill. Or we might find the
solution at the stage of making corrections to the budget. Anyway, the rule,
which exists in the December edition, will be abolished.
ZN: What is your position on social subsides, which are generally believed
too high?
VP: We have not dealt with this problem.
ZN: If the budget is adopted as is proposed, will you make additional
payments to pensions to raise them to the level of 332 hryvnias for the
period of January - March, plus interest for every year worked "above the
plan"?
VP: This issue is being currently discussed.
ZN: How will these payments affect the state of the monetary system?
Will the reaction of prices be the same as in September?
VP: First, we do not plan to make "volley" payments. We will raise minimal
salaries stepwise. We also co-coordinated with the National Bank measures
aimed to curb inflation.
ZN: In conclusion, will it be correct to say that the 2005 budget will be
increased not due to new principles of GDP distribution, but rather due to
bringing part of it out of the shadow? For how long will we be able to go on
like this?
VP: Naturally, next year the dynamics will not be the same as they are this
year. Currently, the situation is very much like during Yushchenko's
premiership, when barter was liquidated and this resource was soon
exhausted. So, today the resource must be based on the encouragement
of economic activity and investment.
ZN: What will happen if the Verkhovna Rada "emasculates" the budget law?
VP: It will not work then, since it will lose its balance. Now I can see
this balance. -30- [The Action Ukraine Report Monitoring Service]
------------------------------------------------------------------------------------------------------
LINK: http://www.mirror-weekly.com/ie/show/538/49526/
===============================================================
9. UKRAINE'S PROLIFERATION SKELETONS

By David Isenberg, Asia Times, Hong Kong, Friday, Mar 25, 2005

WASHINGTON - Recent stories about the alleged sale of 12 former Soviet
nuclear-capable unarmed air-launched cruise missiles (ALCM) to Iran and
China - six to each nation - by Ukraine advance a long unfolding slow-motion
scandal, but still leave many questions unanswered.

Allegations of Ukrainian arms sales to Iran and other countries have been
around for years. For example, in November 2002 lawmaker Hryhoriy
Omelchenko, a former reserve colonel in the Ukranian intelligence service,
promised to lay out "proven facts" of Ukraine's arms sales "not only to
Iraq, North Korea, China and Iran", but even other states, according to his
office. Omelchenko is the same legislator who went public last month in
letters to President Victor Yuschenko and the prosecutor general,
Svyatoslav Piskun, with allegations of the smuggling operation.

The 2002 charge came at the same time that Ukraine was in the news for a
scandal over the alleged sale of Kolchuga air-defense radars to Iraq. It was
then feared that the radars could be used to track Western aircraft in
Iraq's no-fly zones.

Former president Leonid D Kuchma himself was implicated several years ago in
the sale of a highly advanced radar system to Iraq during Saddam Hussein's
regime. On secret recordings made by a former bodyguard in the president's
office, likely in the summer of 2000, a voice resembling Kuchma's approved
of the sale of the Kolchuga radar system through a Jordanian intermediary.

The United States, as well as outside experts, authenticated the
controversial tapes, which also suggested Kuchma's complicity in the murder
of an opposition journalist. Kuchma has repeatedly denied any role in those
crimes.

While there is no definitive smoking gun that Iraq received the Kolchuga
systems, the presumption is that it must be considered likely, according to
a report by a joint US-United Kingdom team.

Interestingly, this was at the same time that US Special Operations Forces
had been ordered to launch operations against arms supply lines to
terrorists and the three rogue nations referred to by President George W
Bush as the "axis of evil" - Iraq, Iran and North Korea.

But apparently they did not know about the missile sale to Iran or were not
authorized to conduct an operation against it. The larger point, however, is
that Ukraine, under Kuchma, was widely known as a willing supplier of
weaponry.

Since taking office in January after the "Orange Revolution", Yushchenko
has promised to investigate illicit weapons-dealings, including the
allegation that election rival Kuchma approved the Kolchuga radar sale
to Iraq.

Ukraine's intelligence agency, the State Security Service (Sluzhba Bespeky
Ukrayiny - SBU), launched its investigation of the case involving Iran and
China on February 14, 2004, during Kuchma's presidency. It announced
last year that it had "exposed and curtailed the activities of an
international criminal group of arms traders who intended to export
from Ukraine 20 air-launched cruise missiles".

But the probe was not publicized until this February, when lawmaker
Omelchenko wrote Yushchenko asking him to pursue a full investigation.

According to Omelchenko, in 2000 Russian national Oleg Orlov and a Ukrainian
partner identified as E V Shilenko, also a Russian national, exported 20
Kh-55 cruise missiles through a fake contract and end-user certificate with
Russia's state-run arms dealer and with a firm called Progress, which is a
daughter company of Ukrspetseksport, Ukraine's weapons-exporting agency.

Orlov and Shilenko used the Ukrspetseksport state company to convey to
Progress a forged contract on behalf of the Russian federal state arms
company Rosvooruzheniye and an end-user certificate purporting to be from
the Defense Ministry of the Russian Federation for the delivery of 20 Kh-55
cruise missiles to that country.

Omelchenko's letter says the cruise missiles were concealed in the arsenals
of the Ukrainian Defense Ministry, although in documents signed by senior
ministry officials they were listed as having been destroyed.

Ukrainian weapons dealers ferried missiles to China through a Ukraine-based
cargo company run by a former secret service agent, according to Omelchenko.
He also said that in 2001, weapons dealers sent ground targeting systems,
maintenance equipment and missile technicians to Iran. Profits from the
sales were estimated at US$2.1 million or more.

Reportedly, Sarfraz Haider, an Australian businessman of Afghan-Iranian
origin, said to be part of the arms trafficking gang, was killed, according
to his family and a Ukrainian police report. He lived in Canberra and Sydney
before moving to London and then Cyprus in 2000.

His family originally believed his death in Cyprus last year was the result
of a motorbike accident. But after an autopsy on Haider's body, the family
now believes he was murdered. His neck had been broken and his aorta split,
and there were signs of a struggle. The family claims Iranian agents paid
Cypriot police to eliminate Haider because he knew too much.

It still is not clear exactly what kind of missiles were sold to Iran and
China. Press reports say it was the Kh-55 Granat. But according to
GlobalSecurity.org there are actually three versions; the Kh-55, Kh-55-OK
and the Kh-55SM.

Production of the stretched-range version, the Kh-55SM, began in 1986. This
was fielded in the 1990s. The modification provided for increased range,
giving it an estimated reach of 3,000 kilometers. The Kh-55 has been in
Russian service since 1984 as a nuclear-armed air-launched cruise missile
and can carry a 200-kiloton nuclear warhead. It is the Soviet counterpart to
the US AGM-86 ALCM. It was originally deployed with strategic bombers
Tu-95 MS and Tu-160.

Yet according to the SBU, some of the ALCMs were of the Kh-55 as well
as the Kh-55SM types. Who the Kh-55 missiles went to is unclear.

Iran does not operate long-range bombers, but it is believed Tehran could
adapt its Soviet-built Su-24 strike aircraft to launch the missile. The
missile's range would put Israel and a number of other US allies within
reach.

After the collapse of the USSR some of the missiles and their carrier
aircraft remained beyond the limits of Russia, in particular, in Ukraine and
in Kazakhstan.

Yet according to Bohdan Ferents, the lawyer for Volodymyr Yevdokimov -
director of a cargo company, Ukraviazakaz, and one of at least six arms
dealers secretly indicted in January for the missiles sale - the missiles
were a far cry from being operational.

In an article in the March 5 issue of the Ukrainian newspaper Zerkalo
Nedeli, he says:
In the first place, they were items made in 1987. Their service life is
eight years. According to the technical specifications and instructions,
their service life can be extended only if the factory designers are
directly brought in - in other words, if there is a technical inspection,
involving either a visit to the place where the missiles are stored or an
inspection at the factory itself. Since 1992, the storage of these missiles
has not, unfortunately, matched the requirements. The technical and process
documentation for the missiles was removed from Ukraine to Russia - which
makes it impossible to sell them for their original purpose. All the
warheads - let's regard them as the weapon's main component - were sent
off to Russia. Not a single warhead remains on Ukrainian territory.

This raises the intriguing possibility that what actually transpired was not
a sale but a con.

Ferents said: "We call them 'items'. The evidence presented in the case
material and tested in court enables one to talk about a typical swindle
with regard to the intentions of Iran and China, which are trying to obtain
weapons. In other words, the negotiations were about cruise missiles, but
what was exported was mere junk." -30-
--------------------------------------------------------------------------------------------------------------
David Isenberg, a senior analyst with the Washington-based British American
Security Information Council (BASIC), has a wide background in arms control
and national security issues. The views expressed are his own.
--------------------------------------------------------------------------------------------------------------
WEBSITE: http://atimes.com/atimes/Central_Asia/GC25Ag02.html
===============================================================
10. AN 'ENRICHED" PARTNERSHIP
U.S. is pressing for Kyiv's agreement for removal of nuclear fuel
containing highly enriched uranium-wet from Ukraine to Russia

ANALYSIS: By Vladimir Kravchenko
Zerkalo Nedeli, Mirror-Weekly, No. 10 (538)
International Social Political Weekly
Kyiv, Ukraine, Week of March 19 -25, 2005

Ukraine-U.S. relations have always been very sensitive, moreover when it
concerns Kyiv's control over weapons export and proliferation of nuclear
technologies and materials. Now the U.S. is pressing for Kyiv's agreement
for removal of nuclear fuel containing highly enriched uranium-235 from
Ukraine to Russia. In Ukraine, this fuel is used in research reactors at
Kyiv Nuclear Research Institute and Sevastopol National Institute of Nuclear
Energy and Industry. In addition, there is a storage of highly enriched
uranium at the National Research Center Kharkiv Physics and Technical
Institute.

Washington is moved by noble impulse. The White House, which is wagging
a hard fight against terror, believes that nuclear fuel containing highly
enriched uranium or plutonium can arouse the interest of Islamic extremists,
who are trying to create a nuclear bomb. The administration of George Bush
believes that the presence of highly enriched fuel at research institutes in
different countries poses a significant threat to the whole of humanity.
That is why, for the sake of universal peace, Americans suggest that the
institutes back away from this fuel and start using lowly enriched fuel.

Back in spring 2004, Washington came forward with a Global Threat Reduction
Initiative, proposing to return the exhaust fuel of American production to
the U.S.A. and that of Russian production to Russia. The U.S. also suggested
that the states possessing highly enriched fuel for scientific purposes
return it to Russia. In place of it, the White House was ready to supply
lowly enriched fuel and even to finance the re-equipment of research
reactors. The U.S. government intended to allocate 450 million dollars to
the effort.

Russians supported the U.S. initiative. On May 27, 2004, the representatives
of Russia and America singed an agreement of cooperation in which the
Russian Federation would reel in the nuclear fuel used in research reactors
that was produced in Russia. And this is not the only example of
U.S.-Russian cooperation in this area. Earlier Washington and Russia, with
IAEA support, worked out a program to return to Russia highly enriched fuel
from research reactors locate outside Russia.

Within the framework of this program, highly enriched fuel was removed from
Yugoslavia in 2002 and from Romania and Bulgaria in 2003. At that time,
Washington repeatedly appealed to Kyiv to remove highly enriched fuel from
the Kharkiv institute. However, the then-Ukrainian leadership decided to
keep it within the state.

Removal of the highly enriched fuel to Russia once again became the topic
for U.S.-Ukraine negotiations last May. Then at the IAEA session in Vienna,
the U.S. delegation asked Ukrainians to remove highly enriched fuel from its
Kyiv and Sevastopol institutes and deliver it to Russia. Washington went as
far as to promise that it would exchange the highly enriched fuel for the
lowly enriched one for free.

In addition, the U.S. government representatives said they were ready to
allocate 1 million dollars to upgrade the reactor at the Nuclear Research
Institute. They even worked out draft agreement between the U.S. Department
of Energy Department and the Fuel and Energy Ministry of Ukraine and sent it
to Kyiv. This document, however, does not have a word about allocation of 1
million dollars for the upgrading of the Kyiv reactor.

Recently the U.S. has been rather persistently trying to achieve Kyiv's
agreement to its proposals. This issue was raised during Boris Tarasyuk's
visit to Washington, and it also will be discussed during Viktor
Yushchenko's visit to the United States. The Ukrainian government is
yet to make its final decision. Nevertheless, we dare say that despite
the tempting conditions, Kyiv will decline the American proposition.

As far as we could find, the reasons for this are as follows. Kyiv's refusal
of highly enriched uranium and transfer of Ukrainian research reactors to
the lowly enriched fuel would certainly make Washington happy. However,
what is the probability that terrorists would get the uranium from Ukrainian
institutes? According to expert assessments (and not only Ukrainian ones),
this probability is very small. According to them, the fuel stored in
Ukrainian research institutes is safely protected. The security system was
created with the assistance of American specialists, in fact.

In addition, highly enriched fuel is stored in research institutes in
compliance with all safety rules and has been controlled by IAEA within the
framework of the guarantee system since 1995. This organization has
repeatedly inspected Ukraine's fulfillment of its obligations concerning
nuclear fuel storage. There have been no violations.

Then why should Ukraine pass highly enriched fuel to Russia, thus testifying
to its incapability to provide reliable physical protection of nuclear fuel
and control over nuclear materials? In the long run, this could negatively
affect the image of this state. Besides, let us remind America that numerous
terrorist groups are located in Russia and the ability of Moscow to ensure
safety of its nuclear materials gives rise to many questions.

On the other hand, what will Ukraine gain in the long run if it refuses to
return its highly enriched fuel to Russia? We are not talking about the U.S.
readiness to finance the upgrading of the Kyiv reactor and its promise to
provide lowly enriched nuclear fuel. Some experts believe that highly
enriched fuel would enable Ukrainian research institutes to carry out
unique nuclear research.

This means that Ukrainian schools of nuclear physics would have a serious
advantage over those countries, which transferred their rectors to lowly
enriched fuel. Moreover, Ukraine will possess special technologies, which
would raise its position.

It is significant that the U.S.-Russian agreement was signed behind
Ukraine's back, which gives rise to several questions. It is not clear
whether the world would become safer as a result of implementation
of this agreement, but it is obvious that Moscow would gain maximal
political dividends from it.

First of all, having concentrated highly enriched fuel on its territory,
Moscow would be able to carry on the dialogue with Washington on a
higher level, since non-proliferation of mass destruction weapons is
a key component of the U.S. fight against terror.

In this case, the states that have ridded themselves of highly enriched
uranium would become less interested for the U.S. and turn into the
second-or even third-rate players in global politics. Is Kyiv, who is
claiming the role of a regional leader, satisfied with this prospect?
Certainly not.

These confederations have probably won over the U.S. argument. The
White House will obviously not be happy about such a decision by the
Ukrainian leadership, but we will dare to insist that it will not have a
serious effect on the relations between Kyiv and Washington. After all,
Ukraine is not to blame. It is not a member of any bilateral or multilateral
agreement, which would oblige it to give up highly enriched uranium or
highly enriched nuclear fuel. Thus if Ukraine decides against sending
its material to Russia, this will not entail any international sanctions.

On the other hand, Kyiv is ready to cooperate with Washington in everything
that concerns removal of exhausted nuclear fuel. In terms of nuclear and
radiological safety, this sphere poses much more interest for Ukraine.
Obviously the U.S.-Ukraine dialogue in this sphere will be more effective.
--------------------------------------------------------------------------------------------------------
LINK: http://www.mirror-weekly.com/ie/show/538/49548/
===============================================================
11. LVIV REGIONAL COUNCIL ASKING YUSHCHENKO AND
TYMOSHENKO TO INITIATE RECOGNITION OF UPA AS WII PARTICIPANT

Ukrainian News Agency, Kyiv, Ukraine, Thu, March 24, 2005

KYIV - The Lviv regional council is asking President Viktor Yuschenko and
Prime Minister Yulia Tymoshenko to initiate recognition of the Ukrainian
Insurgent Army (UPA) as a World War II warring party. Ukrainian News
learned this from the appeal of the council to Yuschenko and Tymoshenko.

"UPA is the only army in the world that fought during the WWII with two
occupation forces simultaneously, with fascists and Bolsheviks," the appeal
reads. Besides, the council adopted an appeal to Parliament Speaker
Volodymyr Lytvyn to request faster consideration in the Verkhovna Rada
of the revised bill "On Rehabilitation of Victims of Political Repressions
in
Ukraine" that provides for privileges to displaced Ukrainians that have been
rehabilitated. As Ukrainian News earlier reported, the Lviv city council
sent a similar appeal to the authorities.

Some 150 supporters of the Ukrainian People's Party (UPP) picketed the
Lviv municipal council building this morning to demand that the council ask
Yuschenko to initiate recognition of the UPA as one of the participants in
combat during WWII. Yuschenko is currently initiating reconciliation talks
between fighters of the Organization of Ukrainian Nationalists, the UPA, and
those who fought for the Soviet Army.

The President expressed hope that not only success would be attained by
May 9, but also the conflict would completely be resolved. The Ukrainian
People's Party had earlier urged Yuschenko and Tymoshenko to support
recognition of the Organization of Ukrainian Nationalists and the UPA as war
participants.

UPP's leadership board is proposing to put to the consideration of
parliament in a plenary regime during the period running up to the start of
the Verkhovna Rada's work the corresponding governmental draft law.

In the opinion of the UPP, since the 60th anniversary of the victory over
Fascism would be marked in 2005, this year should become the year for
national reconciliation and restoration of historical justice relating to
all Ukrainians who fought at the fronts during the Second World War.

In July 2003, the Council of Veterans of the Great Patriotic War in the
Luhansk region demanded of then President Leonid Kuchma, ex-Prime
Minister Viktor Yanukovych and Verkhovna Rada Chairman Volodymyr
Lytvyn to condemn the actions of fighters of the Organization of Ukrainian
Nationalists and the UPA as terrorist actions and therefore they are not
subject to rehabilitation.

Parliamentary deputies Borys Bespalyi and Valerii Alioshyn had earlier
called on parliament to recognize fighters of UPA as participants in
combat actions against the German Fascist invaders. -30-
=============================================================
12. UNESCO HAS WATCHFUL EYE ON LVIV CULTURAL HERITAGE

Kyiv Weekly, Kyiv, Ukraine, Thu, March 24, 2005

LVIV - UNESCO plans to investigate the critical situation regarding the
preservation of the historic architectural look of the downtown area of this
western Ukrainian capital at its next session. The reason for such a
decision was the rather uncomforting conclusions drawn by experts of this
international organization after their recent visit to Lviv. According to
their conclusions, local authorities are taking an irresponsible stance
towards Ukraine's international obligations concerning the preservation of
architectural monuments.

Specifically, while issuing permits to private companies for the
construction of different buildings in the city's downtown area, officials
are demonstrating a complete lack of care in the practical realization of
projects submitted by businessmen and fail to take into account the city's
historic and architectural integrity and the environment. Specifically, they
seem to not be too concerned about the construction of buildings, the
external appearance of which would violate the city's existing architectural
congruity.

Two years ago at a session of UNESCO, this disturbing situation regarding
the destruction of the historical look of Lviv was already discussed. Then
the construction of a modern office of the oblast branch of UkrSotsBank
right in the city's downtown, specifically on Mickiewicz Square, became the
subject of criticism and the reason for talks being held concerning the
exclusion of Lviv from the UNESCO World Cultural Heritage List.

Despite this and the fact that the architectural design had not been
approved in Kyiv and that the Scientific Methodology Council of the State
Construction of Ukraine banned its realization, the city authorities ignored
the remarks of international experts and gave their permission for the
construction.

Silent sabotage The reason for the current visit of representatives of
UNESCO was a similar situation regarding the construction of a seven-storied
residential and office complex on Valova Street. After examining the design
of the building, they came to the conclusion that construction is being
carried out without tying in the look of the future complex with the
location and design of buildings located in the vicinity. The experts
recommended that the local authorities hold a new tender and select
the best architectural design for the building that would conform to
international and domestic requirements for the preservation of the
historic and architectural look of downtown Lviv.

Needless to say, the recommendations of international experts were
completely ignored by the city authorities. Meanwhile, representatives of
the Lviv Admirers' Society say that a certain regularity is being observed
in the actions of the local authorities. First architectural monuments are
left without care until they deteriorate beyond salvation or restoration,
then they are demolished and stricken from the cultural heritage
preservation list and new buildings are put up in their place.

For example, such was the case with an architectural moment of the 18th-19th
centuries - the former Hotel Dnipro - and a number of residential buildings
on Mickiewicz Square. The demolition of these buildings is being explained
by their emergency condition. But as experts stress, these arguments often
turn out to be groundless.

Specifically, inside a late 18th century building on Valova Street, where
the residential-office complex is currently being built, only a small
fragment of the wall was in an emergency condition. Despite the fact that
this did not have any serious impact on the safety of the construction of
the entire building, it was demolished.

Any caprice for your money The official reason for the position of the city
authorities has been announced as their attempts to do everything possible
to attract investments into the city's economy, including into local real
estate. They claim that the city treasury does not have funds for renovating
existing historical buildings.

For this reason, they are placing all hopes on potential investors. But as
there are no declared priorities are given for construction works even on
free land plots in the city. It is money that determines everything.
Clearly, such a principle is suitable for many potential contractors,
including both architects and builders.

There was a time when the city authorities managed to avoid similar
problems due to the existence of the State Historical-Architectural
Reserve on its territory founded back in 1975. But in 1991, the Lviv
City Executive Committee decided to reorganize the managerial board
of the reserve into a department for the preservation of historical
environment within the committee.

In this way, the state guardian of the architectural riches in the ancient
city of Lviv as part of the spiritual heritage of Ukraine was turned into a
totally controllable and easily ruled subdivision of city authorities. Since
then there have been no barriers to illegal construction in the downtown
area of Lviv. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
13. EASTER EGG DESIGNS ARE A FOLK-ART 'PRAYER'

By Lisa Rauschart, Special to the Washington Times
The Washington Times, Washington, D.C., Thu, Mar 24, 2005

Thinking about decorating eggs this year but bored by those same old
supermarket dye kits? Rest assured: This Easter, you don't have to put all
your eggs in one basket. There's as much variety in egg decoration as there
are Christians in Christendom.

You can try your hand at pysanka, the Ukrainian art of egg decorating, which
is practiced in similar forms throughout Eastern Europe. Like to work with
scissors? Try snipping your way into an egg with the Northern Virginia
Studio Eggers, who produce decorated eggs throughout the year.

You can gaze on Faberge creations at the Hillwood Museum; roll eggs on the
White House lawn; and generally dye, glue and wax your way into a genuinely
one-of-a-kind creation. Whatever you do, though, it helps if you have the
right state of mind.

Patience, concentration and stillness are the three principles essential to
the art of egg dyeing. According to Jurij Dobczansky, an expert in pysanka
who has been running the annual pysanka workshop at the Ukrainian Catholic
National Shrine in the District for more than 20 years, those three
principles are in fact far more needed than either a firm hand or a
perfectly executed product.

Pysanka eggs are complex and often highly symbolic in color and design;
a carefully crafted egg can take more than three hours to produce. Yet the
results, practitioners say, are well worth the time, for both the egg and
the individual. "People look at it as a wonderful hobby," says Mr.
Dobczansky, who also serves as the shrine's librarian. "And it's also a
wonderful activity for Christians, especially at Easter."

Pysanka - which derives from the Ukrainian "pysaty," meaning "to write" - is
just one of the many methods of egg decorating that can be found this time
of year. All around the Washington area and beyond, skilled and fledgling
egg artisans are carefully dyeing, scratching and painting everything from
tiny quail eggs to massive ostrich eggs.

Despite the variety, the different genres show some uncanny similarities.
Would-be egg dyers thumbing through books on pysanka, for instance, are
struck by the marked resemblance between age-old Ukrainian designs and
those found in works of Navajo and other Southwest American Indian art.

Many of the projects of the Northern Virginia Studio Eggers, a chapter of
the International Egg Crafters Guild, capture something of the spirit of
Carl Faberge's masterpieces, albeit without the jewels. Most egg crafters
will tell you that working with eggs helps them get centered, even if
they're not expert like Mr. Dobczansky.
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Why eggs? Many cultures use eggs to symbolize birth and fertility.

Ishtar, the Assyrian and Babylonian goddess of love and fertility, may have
been the inspiration for Ostara, the Anglo-Saxon deity associated with
spring and fertility. The Old English word for Easter, "Eastre," is thought
to refer to Ostara.

An early legend has Ostara turning her pet bird into a rabbit that laid
brightly colored eggs, which Ostara then distributed to children. That may
well be the reason we have an Easter Bunny, not an Easter chicken or some
other bird. As Christianity spread, many traditional signs and symbols were
incorporated into its practice.

Although no two eggs are exactly alike, eggs themselves are masterpieces
of design, a perfect package of protection for the life inside. The history
of egg decoration reaches far into the ancient past, well before
Christianity and its Easter celebration took hold.

In the 8th century B.C., a ruler of the Zhou dynasty in China gave out
painted eggs as edible gifts. Zoroastrians in Persia marked the beginning
of their new year with gifts of dyed or gilded eggs, while Jews placed a
roasted egg on the Seder plate as part of their celebration of Passover.
Jesus' last supper, which was a Seder dinner, may be the reason Christians
associate eggs with Easter. Yet throughout the Christian community, egg
traditions vary.

In Poland, different colored eggs represent the variety of eggs the Virgin
Mary boiled to amuse the Christ child. In Austria, many eggs are green, to
represent spring, while in Bavaria, eggs are painted with watercolors and
hung outside on specially constructed arches. The English like to imprint
their eggs with various plant leaves, while in Mexico, empty eggs are filled
with confetti.
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Perhaps none is so striking as those decorated in the pysanka tradition, in
which wax designs are traced on the egg before it is placed into a series of
colored aniline dyes. After each dye cycle, the pysanka artist covers more
of the design with wax until, finally, the wax is melted over a flame and
the design colors literally come to light. Finally, the whole egg is coated
with varnish and its contents carefully blown out.

At Mr. Dobczansky's recent workshop on the art of pysanka at the Ukrainian
National Catholic Shrine, some 80 folk of varying ages and skill levels
assembled for the annual event, now in its 22nd year.

Fully a third were children, fresh from soccer practice or other
Sunday-morning activities, filled with energy and hardly seeming ready for
a three-hour session on the art of Ukrainian egg decorating. Another third
were newbies, folks such as Sigrid Ebert of Bethesda and her friend Sonya
Sanchez, who had always been fascinated by the art of pysanka and now
wanted to do it on their own.

"They're gorgeous," Miss Ebert said. "I collect them, and I always wanted to
try it." The rest were regulars such as Brian Trently of Triangle, Va., who
each year tackles increasingly sophisticated designs.

Another regular was 10-year-old Zenon Smith from Snow Hill, Md. He began
crafting eggs when he was 5. His mother, who is Ukrainian, keeps a display
case at home to chart his progress. He's at one of the all-children tables,
but he's intent on his work. "Sometimes, my hand starts to shake," Zenon
said. "I get so nervous that I'm going to make a mistake."

Despite the hubbub, Zenon's lines were pretty straight. It's amazing how
much you can shut out when you've got a kistka in your hand - that's the
stylus-like implement pysanka artisans used to trace their designs. Kistkas
come in different sizes and widths, and some are even electric nowadays.

Kistkas can be tricky, but dogged practice generally produces measurable
results, as Christine Robinson, 15, of Temple Hills, saw when she fashioned
an egg featuring her own flower and heart designs. "It's beautiful," she
said with a smile, turning her egg to allow a better view. "I really like
it."

That's the beauty of pysanka. You don't have to be an expert to make an egg,
and the results are far more satisfying than simply dyeing a bunch of eggs.
You may not make as many, but those you do finish are far more meaningful.
-----------------------------------------------------------------------------------------------------------
Pysanka's symmetry of symbol and design must have captivated Faberge,
the jeweler to the imperial Russian court who meticulously crafted an Easter
egg for Czar Alexander III in 1885 as a present for Czarina Maria Fedorovna.

Faberge and his workshop went on to craft more eggs, 50 in all, for
Alexander III and Nicholas II, each with its own special surprise concealed
inside. Two of these - the Twelve Monogram Easter Egg of 1895 and the
Catherine the Great Easter Egg of 1914, both designed for Nicholas II - can
be found at Hillwood Museum and Gardens in Northwest, which houses the
most comprehensive collection of 18th- and 19th-century Russian imperial
art outside Russia, including about 80 pieces by Faberge.

Hillwood is open for tours by reservation and for special events - such as
Sunday's Family Day, when youngsters and others gathered for a workshop in
making Faberge-style eggs. They saw a costumed interpreter as Czar Nicholas
II, who told them how he and his family celebrated Easter with Faberge eggs.
And they took part in a Russian egg-rolling game in the garden behind the
mansion.
---------------------------------------------------------------------------------------------------------
Something of the whimsy of Faberge's creations can be found in the works of
the Northern Virginia Studio Eggers, who meet every month in Falls Church to
share ideas, learn new techniques, and, of course, work on eggs.

There is no dyeing here. Instead, the ladies and gentlemen of the Northern
Virginia Studio Eggers snip, feather and bead their eggs into some
unexpected and surprisingly intricate creations. "Eggs are not just for
Easter anymore," says club member Terry Garvis of Leesburg, the group's
program chairman, who taught all of her grandchildren to "do" eggs. "I used
to do sewing and crafts; now I just do these."

Crafted eggs such as Mrs. Garvis' can have doors, windows or even a music
box tucked inside. They can be draped with tulle, carved into filigree or
covered with decoupage. One egg on display at a recent meeting was
fashioned as a china cabinet. Open up the hinged doors and voila: A
tiny mechanism concealed in the base activates an interior light strip.

Egg crafters haunt the miniature markets, looking for just the right dog or
bird or whatever to be given pride of place inside their egg. Chicken eggs
are frowned on, however; most of the Northern Virginia Eggers use goose
eggs, which are larger. A few use ostrich eggs, which are larger ill.
"Goose eggs have a thicker shell," explains Carol Lewandowski of Herndon,
the eggers' corresponding secretary. "They're not as likely to break while
you're working on them."

Although artisans have been working with eggs for centuries, egg crafting
really began to pick up momentum about 25 years ago, Mrs. Lewandowski
says. Tools of the trade include toothpicks, rulers, scissors, glue and
various cutting implements. "There are some real horror stories about
eggers getting stuck with Krazy Glue," says Mary Sprague, who sheepishly
admits gluing an eggshell to her hand a few years back. (She was able to
disengage herself thanks to repeated applications of peanut butter and
cooking oil.)

Within the art, certain crafters have developed their own styles. Christine
Zwennes of Reston, a past treasurer of the group, is known for her bead-
work, Ed Sims of Arlington for his intricate carving. In fact, Mr. Sims is
considered one of the best eggers in the country. Yet even novice eggers
are unafraid to try new techniques.

No two crafted eggs will ever be exactly the same. "People are unique, so
what they do to an egg is going to be unique," Mrs. Zwennes says.
Crafters tend to pick up techniques at the shows and conventions that are
held throughout the country. If you are interested in learning pysanka,
however, you may want to take a class, such as the one Baltimore's Anna
Kueberth gives. She'll design it meet your needs and adapt it to your skill
level.

Mrs. Kueberth, a Baltimore native, has been teaching pysanka for more than
20 years, ever since she learned the art from an elderly Ukrainian woman who
lived a few doors down in her old Baltimore neighborhood, Canton. "People
used to have decorations in their windows, and she had one with all these
pysanky eggs," Mrs. Kueberth says, using the plural of the word "pysanka."
"I stopped one day to admire it on the way back from the market, and she
came out and asked me if I'd like to learn."

Until a few years ago, the art of pysanka was virtually unknown in the
Ukraine, after having been discouraged under Soviet rule because of its
connection with Christianity, Mrs. Kueberth says. Now, groups of American
artisans make trips back to teach the art to a new generation of Ukrainians.

"A lot of the old ways had been lost because of communism," Mrs. Kueberth
says, "but here in the United States, immigrant communities have kept the
old ways going." Every year, she makes up a batch of pysanka eggs and takes
them to the Ukrainian church in Baltimore's Highlandtown area, where the
elderly ladies still remember when the art was done in the old country.

Unlike Mr. Dobczansky, Mrs. Kueberth doesn't eschew all modern innovations.
For one thing, she encourages the use of electric kistkas and even electric
hair dryers to melt the wax because they can be safer than candles. And Mrs.
Kueberth says alcohol lamps burn with a cleaner flame than candles.

So when Mrs. Kueberth's student Louise Gay of Lutherville, Md., hunkers
down over her egg at the home of Mrs. Kueberth's sister, Catherine Waters,
in Baltimore's Hamilton neighborhood, she's drawing extremely fine lines in
melted wax with the help of an electric kistka and an alcohol lamp.

Holding her egg literally "like an egg," Mrs. Gay carefully traces the wax
lines she wants with a kistka, with one eye fixed on her teacher. Husband
Bob is far more venturesome, scrawling in lines and figures as quickly as
he can. Either way is fine with the boss. "This is a folk art," Mrs.
Kueberth says. "It's not supposed to be perfect."

The basics, of course, are the same, whether you are working with electric
instruments or candles. "You should put your best into it," Mrs. Kueberth
says. "It's like a prayer. You don't give God your last 10 percent; you give
it off the top."

EXHIBITS, TUTORS HELP CARRY ON EGG CRAFTING
Looking for a glimpse of Faberge brilliance, or want to try your hand at
some decorated eggs of your own? Here are a few resources:
. Hillwood Museum and Gardens: 4155 Linnean Ave. NW. 10 a.m.-5 p.m.
Tuesday-Saturday. Open on select Saturdays and Sundays for Family Day
and other special events. The most comprehensive collection of 18th- and
19th-century Russian imperial art outside Russia includes about 80 pieces
by Carl Faberge, jeweler to the imperial court. On display are two of the 50
rare Easter eggs Faberge made for Russia's imperial family. reservations
required. Reservation deposit $5 to $12. Call 202/686-5807 or 877/
HILLWOOD, or visit www.hillwoodmuseum.org.

. Lessons with Anna Kueberth: This Baltimore pysanka artist teaches the
craft to individuals or groups and will travel to students' homes. Fee:
Groups of two or three or more, $15 per person; Scout troops and other youth
groups, $5 to $6 per person; church groups, about $10 per person. Contact
her at 410/477-0351 or akueberth @comcast.net.

. The Northern Virginia Studio Eggers: Group meets at 10 a.m. the second
Wednesday of the month at Holy Trinity Lutheran Church, 3022 Woodlawn Ave.,
Falls Church. Contact Margaret Plunkett, president, at 703/777-4819. The
NVSE is a chapter of the International Egg Art Guild, which has its own Web
site at www.eggartguild.org.

. The Ukrainian National Catholic Shrine of the Holy Family: 4250 Harewood
Road NE. Gift shop open Sundays after Masses, usually 10:30-11:15 a.m.
and 12:30-1:30 p.m. Offers do-it-yourself pysanka kits for a variety of
skill levels. Also available: completed eggs imported from the Ukraine, a
project of Hennie Deboeck(hdeboeck@dokus.com), who imports handicrafts
made by women in developing countries and markets them at fairs and gift
shops in the Washington area. Call the gift shop at 202/526-3737, or see
www.ucns-holyfamily .org. -30- [Action Ukraine Report Monitoring Service]
-----------------------------------------------------------------------------------------------------------
LINK: http://washingtontimes.com/weekend/20050323-091932-1423r.htm
===============================================================
14. BONBONS PRESENT A PASTEL RENDITION OF THE
UKRAINIAN EASTER EGG TRADITION
Petites Bonbons, Pursuit of Happiness

CHOCOLAT MODERNE
Joan Cooks, Chocolatier & CEO
New York, New York, Friday, March 25, 2005

NEW YORK - First, eat with thine eyes!!!! The colorful patterns on
these bonbons present a pastel rendition of the Ukrainian Easter
egg tradition, and are a beautiful addition to any setting.

Inside these artful dark chocolate shells you will find our latest
flavors, created with ingredients chosen to ring in the Spring and
welcome the Summer in an elated state of mind! -30-
----------------------------------------------------------------------------------------------------
CHOCOLAT MODERNE: Joan Coukos, Chocolatier & CEO
27 West 20th Street, Suite 904 (9th floor)
New York, NY 10011; Phone (212) 229-4797, Fax (212) 229-4798
http://www.chocolatmoderne.com/PBA.html
==============================================================
15. THE UKRAINIAN TORBAN
Torban was popular from about 1690 to 1920

Roman Turovsky: The Torban Website
March, 2005, http://polyhymnion.org/torban

This is a website is devoted to the TORBAN, an unusual instrument
from that family of Lutes that was common in Ukraine and whose
popularity spanned two and a half centuries from about 1690 to 1920.

The real origin of the TORBAN is shrouded in mystery, and any attempts
at elucidation would inevitably cause some animosity among Ukrainians,
Russians, Poles, Jews and Czechs, all of whom are vying for the credit.

Currently, there is little or no reliable information on the TORBAN on the
Internet as well as in print. Most available material is scarce, and usually
tendentious, superficial, or simply erroneous, either for some nationalistic
reason or out of ignorance of the history of the LUTE family of instruments.

To see a fantastic website and learn all about the TORBAN click on
the following link: http://polyhymnion.org/torban, -30-
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