"THE ACTION UKRAINE REPORT - AUR"
An International Newsletter
The Latest, Up-To-Date
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"
PRIME MINISTER & AG MINISTER WORK TO CONTROL FOOD PRICES
and other consumer prices at the expense of private businesses
Plan is disrupting many private markets in Ukraine
Sending wrong signals to investors
PM Tymoshenko wants state food outlets set up across the country
Government owned regional retail network to be established nationwide
Special state trading 'Komora' company created to sell food
Cabinet of Ministers to regulate bread prices
Government ordered to make major grain purchase
Tymoshenko tells farmers not to sell grain
Ag minister wants state to sell sugar to lower prices
Government buying meat, wants to lower prices
"THE ACTION UKRAINE REPORT - AUR" - Number 535
Mr. E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, WEDNESDAY, August 3, 2005
------INDEX OF ARTICLES------
"Major International News Headlines and Articles"
1. UKRAINE'S CABINET ORDERS STATE RESERVE, KHLIB UKRAINY,
AGRARIAN FUND AND REGIONS TO BUY 5.5 MILLIONS TONS OF GRAIN
15% higher than market to stabilize prices, guarantee farmer profitability
Special subsidies given to state companies who export grain
Prime Minister tells farmers not to sell grain
Ukrainian News Agency, Kyiv, Ukraine, Tue, August 2, 2005
2. CABINET NAMES BANKS AUTHORIZED FOR CREDITING KHLIB
UKRAINY'S GRAIN PURCHASES FROM FARMERS
Aval and Prominvestbank approved for crediting
Ukrainian News Agency, Kyiv, Ukraine, Mon, August 1, 2005
3. KYIV TO OUTFIT 10 OUTLETS IN EVERY MARKET BY SEPTEMBER
TO SELL FOOD FROM STATE RESERVE
Opening such outlets was the desire of Prime Minister Yulia Tymoshenko
State trading company Komora created to sell food
Inna Sokolovska, Ukrainian News Agency, Kyiv, Ukraine, Sun, July 31, 2005
4. PRIME MINISTER ORDERS GOVERNORS TO CREATE GOVERNMENT
OWNED REGIONAL RETAIL NETWORK FOR POSSIBLE
INTERVENTIONS FROM STATE RESERVE, FIRST FOR FOOD
Viktor Riasnyi, Ukrainian News Agency, Kyiv, Ukraine, July 22, 2005
5. UKRAINE'S STATE RESERVE FAILS TO HOLD TENDERS TO BUY MEAT
Wants to intervene in local meat markets to lower price
Hanna Diakonova, Ukrainian News Agency, Kyiv, Ukraine, July 31, 2005
6. UKRAINE GOVERNMENT CALLS ON REGIONAL GOVERNORS
TO INCREASE CATTLE PRODUCTION
"Do you understand the task? asked Prime Minister Tymoshenko
[This is just like it was during Soviet Ukraine times]
Anton Vodianyi, Ukrainian News Agency, Kyiv, Ukraine, July 22, 2005
7. UKRAINIAN AG MINISTER WANTS SUGAR PRICES LOWERED
State reserve did not intervene and sell enough sugar in July
High prices are result of disputes among politicians
By Svitlana Kondratiuk, Ukrainian News Agency
Kyiv, Ukraine, Sunday, July 31, 2005
8. UKRAINE'S CABINET OF MINISTERS TO REGULATE BREAD PRICES
Agricultural Ministry Forces Bakers To Buy Annual Grain Needs Now
Government to provide cheap loans to farmers
Hanna Diakonova, Ukrainian News Agency, Kyiv, Ukraine, July 28, 2005
9. LIBYA COOPERATES WITH UKRAINE GOVN'T TO GROW WHEAT
Company to be set up to farm 250,000 hectares of wheat
Two governments to build jointly owned flour mill
Strategic Business Information, Sunday, July 31, 2005
10. BEEFING UP UKRAINIAN'S APPETITES
By Heorhiy Bohdanov, Kyiv Weekly, Issue 29 (169)
Kyiv, Ukraine, Friday, July 29 - Aug 12, 2005
11. TYMOSHENKO SAYS NEW OIL REFINERY MAY BE BUILT IN CRIMEA
Ukrainian News Agency, Kyiv, Ukraine, Sun, July 31, 2005
12. UKRAINIAN PM URGES CREATION OF STATE-OWNED TITANIUM CO
Ukrainian-German JV worries its investment is in danger
Interfax-Ukraine news agency, Kiev, in Russian 1630 gmt 30 Jul 05
BBC Monitoring Service, UK, in English, Sat, Jul 30, 2005
13. PRIME MINISTER INITIATING CHECK ON THE LEGITIMACY
OF CREATING STATE OWNED KRYMSKYI TYTAN (TITANIUM) PLANT
Ukrainian News Service, Kyiv, Ukraine, Mon, August 1, 2005
14. CABINET OBLIGATES INSURANCE COMPANIES TO CHANNEL NO
LESS THAN 15% OF INSURANCE RESERVES FOR PURCHASE
OF SECURITIES OF STATE MORTGAGE AGENCY
Viktor Riasnyi, Ukrainian News Agency, Kyiv, Ukraine, July 21, 2005
15. TYMOSHENKO TAKES AS GOOD NEWS HER RECOGNITION AS
ONE OF THE MOST INFLUENTIAL WOMAN BY FORBES MAGAZINE
Ukrainian News Agency, Kyiv, Ukraine, Mon, August 1, 2005
16. STATE OWNED SHIPYARD BUILT HULL FOR NORWEGIAN ICEBREAKER
Norway's Havyard Leirvik AS orders second hull built in Ukraine
Ukrainian News Agency, Kyiv, Ukraine, Sun, July 31, 2005
17. IFC OFFERS LVIV'S GALNAFTOGAS USD 25 MILLION CREDIT
One of Ukraine's largest filling station operators
New Europe, Athens, Greece, Mon, August 1, 2005
18. LARGE RUSSIAN MALT COMPANY TO BUILD MALT FACTORY IN
VINNYTSIA REGION IN 2008
Russian Malt plans to invest around USD 40 million
Ukrainian News Agency, Kyiv, Ukraine, Mon, August 1, 2005
19. EBRD TO ACQUIRE EQUITY STOCKS IN RUSSIAN AND UKRAINIAN
SUBSIDIARIES OF FRENCH YEAST & MALT PRODUCING COMPANY
Ukrainian yeast-making company CJSC Nadia
Ukrainian News Agency, Kyiv, Ukraine, Sun, July 31, 2005
20. PROMOTING UKRAINIAN BUSINESS' PLACE AT THE HEART OF
EUROPE IS GOAL OF SYSTEM CAPITAL MANAGEMENT CAMPAIGN
CNW, Friday, July 29, 2005
21. STRESSES IMPORTANCE OF SME'S IN UKRAINIAN ECONOMY
Amb to Greece and former First Deputy Economy Minister Viktor Kalnyk
By Kostis Geropoulos, Senior Reporter
New Europe, Athens, Greece, Mon, August 1, 2005
22. UKRAINE TRADE UNION LEADER VOLYNETS PRAISES REVOLUTION
BUT CONTINUES FIGHT FOR CHANGE
Economic and political reforms must deepen across the society
Radio Free Europe/Radio Liberty (RFE/RL)
Washington, D.C., Friday, July 29, 2005
23. YUSHCHENKO BATTLES CORRUPTION BY A
BARRAGE OF PROSECUTIONS
By Patrick Greenberg, Freelance Writer, UK
New Europe, Athens, Greece, Mon, August 1, 2005
24. BOHDAN CORP TO INVEST EUR 200 MILLION IN MODERNIZATION
OF UKRAINE'S CHERKASY BUS PLANT BY YEAR 2007
Ukrainian News Agency, Kyiv, Ukraine, Fri, July 29, 2005
25. FEW REAL SIGNS OF CRISIS FOR YUSHCHENKO
AND ORANGE REVOLUTION
ANALYSIS AND COMMENTARY: By Taras Kuzio
Eurasia Daily Monitor, Vol. 29, Issue 47
The Jamestown Foundation
Washington, D.C., Friday, July 29, 2005
26. ZVARYCH'S LETTER TO YUSHCHENKO ON KRYVORIZHSTAL
ANALYSIS: Article by Viktor Chyokunya
Ukrayinska Pravda web site, Kiev, in Ukrainian 21 Jul 05
BBC Monitoring Service, UK in English, Friday, July 29, 2005
=============================================================
1. UKRAINE'S CABINET ORDERS STATE RESERVE, KHLIB UKRAINY,
AGRARIAN FUND AND REGIONS TO BUY 5.5 MILLIONS TONS OF GRAIN
15% higher than market to stabilize prices, guarantee farmer profitability
Special subsidies given to state companies who export grain
Prime Minister tells farmers not to sell grain
Ukrainian News Agency, Kyiv, Ukraine, Tue, August 2, 2005
KYIV - The Cabinet of Ministers has ordered the State Committee for Material
Reserves, state-run company Khlib Ukrainy, the Agrarian Fund and regional
state administrations to purchase a total of 5.5 million tons of grain of
the 2005 harvest for stabilization of grain market prices.
This was announced in the Cabinet's resolution of July 29 on the measures to
stabilize prices in grain market and guarantee its profitable production.
Particularly, the Cabinet ordered the State Reserve to buy one million tons
of grain, Khlib Ukrainy two million tons, and Agrarian Fund one million
tons. Apart from this, the government ordered regional state administrations
to buy 1.5 million tons of grain.
The Cabinet of Ministers also ordered the Transport and Communications
Ministry to cut by maximum the rates of port charges and payments for
merchant port services in the export of grain by the companies of the State
Reserve and Khlib Ukrainy systems.
As Ukrainian News reported, on July 28, Prime Minister Yulia Tymoshenko
said the State Committee for Material Reserve and Khlib Ukrainy planed to
buy grain in stock markets at prices higher by 10-15% than those proposed
by grain traders.
Tymoshenko called on farmers to abstain from selling grain products at
reduced prices. Agricultural Policy Ministry set the minimum prices of grain
at the beginning of June. For instance, the prices of soft winter and spring
wheat were set at the following levels: UAH 930 per ton of the 1st grade.
--------------------------------------------------------------------------------------------------------
FOOTNOTE: One major player in the private Ukrainian agricultural
grain business wrote us after hearing the news about major grain
purchases by the government and said:
"Is someone going to ask the braided one, why a free market
economy would use a state entity that typically defaults on contracts,
as a competing exporter of grain.
"One international grain company, for example last year, lost $1.0 mil
and then $600,000 on prepaying warehouse receipts from Khlib
Ukraina, but can not sue this state entity or place them in bankruptcy.
Khlib Ukraina also defaulted on a contract to supply 30,000 tons of
grain to an international grain company in Crimea last year.
I think the orange revolution was a media hype." EDITOR
=============================================================
2. CABINET NAMES BANKS AUTHORIZED FOR CREDITING KHILB
UKRAINY'S GRAIN PURCHASES FROM FARMERS
Aval and Prominvestbank approved for crediting
Ukrainian News Agency, Kyiv, Ukraine, Mon, August 1, 2005
KYIV - The Cabinet of Ministers has agreed with the proposal of SJSC Khlib
Ukrainy and has named the Aval and Prominvestbank as the authorized banks
for crediting Khlib Ukrainy's grain purchases from farmers.
This was announced in the Cabinet of Ministers' resolution #662 on issues
involved in the purchase from farmers of the 2005 harvest grain and its
export, dated July 29.
'To approve the proposal of SJSC Khlib Ukrainy on naming OJSC Aval and
CJSC Prominvestbank with their consent the banks authorized for crediting
grain purchases by the company at the prices coordinated by farmers,' the
Cabinet resolution says.
Under the Government's decision, such credits must be issued in the volume
of at least 80% of the cost of the grain purchased. The Cabinet also allowed
Khlib Ukrainy to grant on lease to banks the grain and property kept at
elevators and belonging to Khlib Ukrainy (except for the property that
cannot be pledged according to laws).
The Government also ordered Khlib Ukrainy not to permit grain alienation in
favor of pawnbroker, securing credit payments in a full volume.
As Ukrainian News reported, on July 28, Prime Minister Yulia Tymoshenko
said the State Committee for Material Reserve and Khlib Ukrainy planed to
buy grain in stock markets at prices higher by 10-15% than those proposed
by grain traders.
Tymoshenko called on farmers to abstain from selling grain products at
reduced prices. Agricultural Policy Ministry set the minimum prices of grain
and sunflower at the beginning of June. For instance, the prices of soft
winter and spring wheat were set at the following levels: UAH 930 per ton of
the first grade. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
3. KYIV TO OUTFIT 10 OUTLETS IN EVERY MARKET BY SEPTEMBER
TO SELL FOOD FROM STATE RESERVE
Opening such outlets was the desire of Prime Minister Yulia Tymoshenko
State trading company Komora created to sell food
Inna Sokolovska, Ukrainian News Agency, Kyiv, Ukraine, Sun, July 31, 2005
KYIV - The Kyiv City Administration plans to outfit 10 outlets in every city
market by September in order to sell foodstuffs from the state reserve. Head
of the Kyiv City Administration's main department on food market and trade
Oleksandr Shkylevych informed the press about a July 26 Cabinet meeting
during which the plan was announced.
He said the Cabinet will create a special trading company Komora to sell
food with a minimum trade markup.Shkylevych stressed that opening such
outlets was the desire of Prime Minister Yulia Tymoshenko. Additionally, the
government plans to open special stores to sell foodstuffs at low prices.
Shkylevych could not say when this project would be realized in Kyiv because
the implementation mechanism is yet to be developed. Kyiv has 109 markets,
of which 86 are food markets.
As Ukrainian News earlier reported, Kyiv City Administration has recently
bought 5,000 tons of sugar from the State Committee for Material Reserve for
intervention on the market via retail networks, and limited the trade markup
on meat sold from the state reserve to 10%.
=============================================================
4. PRIME MINISTER ORDERS GOVERNORS TO CREATE GOVERNMENT
OWNED REGIONAL RETAIL NETWORK FOR POSSIBLE
INTERVENTIONS FROM STATE RESERVE, FIRST FOR FOOD
Viktor Riasnyi, Ukrainian News Agency, Kyiv, Ukraine, July 22, 2005
KYIV - Prime Minister Yulia Tymoshenko has instructed heads of regional
state administrations to create in regions a network of retail trading sites
for possible interventions, first of all food interventions, from the State
Committee on Material Reserve. Tymoshenko gave this instruction at a
Thursday meeting with governors.
"It is necessary to create a retail intervention network for a possibility
of preventing market deficit," she said. The prime minister stressed that
the government undertakes to give positive pricing signals on food
markets, also by making interventions from the state reserve, by September
1.
As Ukrainian News earlier reported, the Cabinet of Ministers proposed in
early July that parliament consider a bill regulating government
interventions on food markets. The Antimonopoly Committee of Ukraine
initiated introduction of a mechanism for purchasing sugar and mandatory
licensing of sugar wholesale trade in May. \
In March, the Cabinet of Ministers proposed that parliament create special
reserves of meat and fish on the basis of the State Committee on Material
Reserve to enable the government to intervene on the Ukrainian market in
order to stabilize the prices of these products. -30-
==============================================================
5. UKRAINE'S STATE RESERVE FAILS TO HOLD TENDERS TO BUY MEAT
Wants to intervene in local meat markets to lower price
Hanna Diakonova, Ukrainian News Agency, Kyiv, Ukraine, July 31, 2005
KYIV - The State Committee for Material Reserve failed to hold tender on
the purchase of meet which was planned for July 25. State Reserve disclosed
this to Ukrainian News.The "Tender didn't take place, because the price
which three of its participants offered was too high," the representative
said. According to his words, the next tender will be hold on August 1.
As Ukrainian News earlier reported, The State Committee for Material
Reserve plans to hold four tenders on purchase of meet on July 18, August
1, 8 and 15. State Reserve plans to buy 10,000 tons of beef and pork at the
each of tenders.
in April-June, the State Reserve hold tenders for purchasing meet several
times, but the volumes of purchase were much lower then it is planned now
due to the low offer. The Cabinet of Ministers allocated a loan of UAH 500
million to the State Material Reserve in April to buy food products, mostly
meat in order to carry out subsequent interventions on the local market so
as to normalize prices for this product. -30-
=============================================================
6. UKRAINE GOVERNMENT CALLS ON REGIONAL GOVERNORS
TO INCREASE CATTLE PRODUCTION
"Do you understand the task? asked Prime Minister Tymoshenko
[This is just like it was during Soviet Ukraine times]
Anton Vodianyi, Ukrainian News Agency, Kyiv, Ukraine, July 22, 2005
KYIV - Agricultural Policy Minister Oleksandr Baranivskyi calls on governors
of the regions to help increase cattle population. He voiced his call at an
enlarged meeting of the Cabinet of Ministers.
"I request you, every pig we have should not be slaughtered, it must be
brimmed," the minister said and the governors brightened up.
"Do you understand the task?" was the reaction of Prime Minister Yulia
Tymoshenko. Baranivskyi said that cattle breeding is more profitable today
than meat production.
He added that a meat shortage on the market is of seasonal character
because the population breeds more cattle at home. The minister forecast
that meat production will increase by 15% year-on-year.
He further urged to not sell fodder grain, as its price is not high, but to
use it at cattle breeding farms. "A ton of grain that goes through a cow
yields a 250% profit," he said.
As Ukrainian News earlier reported, production of meat in live weight rose
by 7.5% or 10,700 tons compared with May to 153,900 tons in June. In May,
production of meat in live weight was 143,200 tons, 34.4% or 75,200 tons
down from April. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
7. UKRAINIAN AG MINISTER WANTS SUGAR PRICES LOWERED
State reserve did not intervene and sell enough sugar in July
High prices are result of disputes among politicians
By Svitlana Kondratiuk, Ukrainian News Agency
Kyiv, Ukraine, Sunday, July 31, 2005
KYIV - Agricultural Policy Minister Oleksandr Baranivskyi forecasts that
sugar prices will go down to the 2004 level in September.
He made this statement to the press during his visit to Vinnytsia region. He
explained an anticipated slide by the start of the sugar refining process at
Ukrainian sugar refineries.
The minister added that high prices in July should be attributed to disputes
among politicians connected with this business. "Instead of the planned
25,000 tons of sugar, only 10,000 were sold from the State Reserve in July.
It means that some powerful politician was lobbying his business interests,"
Baranivskyi said.
He added that aimed at stabilization of the sugar market and a price
decline, State Reserve sugar interventions will continue in August. As
Ukrainian News earlier reported, the Agrarian Policy Ministry reported a
monopoly collusion on the sugar market.
According to the ministry, sugar reserves are estimated at 400,000-700,000
tons, which will suffice to meet the demand in sugar.
Prime Minister Yulia Tymoshenko said it is appropriate for parliament to set
a quota for raw sugar imports as parliamentary deputy Ihor Yeremeev
proposed in the relevant bill.
The Cabinet in May approved the procedure for distribution of the 2004 quota
on import of raw cane sugar in Ukraine and directed the Ministry of Economy
to facilitate issuance of licenses valid until September 15, 2004, for
importation of 125,000 tons of sugar to winners of the competition provided
they pay for the lots offered at the auction.
In June, retail prices of sugar rose in all regions of Ukraine by 10.8-40.6%
to UAH 3.55-4.77 per kilogram compared with May.
Between September and December 2004, retail prices of sugar stood at
UAH 2.9-3.2 in all regions of Ukraine. Experts estimate the annual size of
the Ukrainian sugar market at 2 million tons. -30- [Action Ukraine Report]
=============================================================
8. UKRAINE'S CABINET OF MINISTERS TO REGULATE BREAD PRICES
Agricultural Ministry Forces Bakers To Buy Annual Grain Needs Now
Government to provide cheap loans to farmers
Hanna Diakonova, Ukrainian News Agency, Kyiv, Ukraine, July 28, 2005
KYIV - The Ukrainian Bakers' Association (UBA) suggests the Agricultural
Policy Ministry to sign an adjusted memorandum on purchase of annual grain
volumes by bakers. Ukrainian News learned this from the press service of
UBA.
According to the report, the government is supposed to abolish regulation of
bread prices by local administrations and retain regulation by the Cabinet
of Ministers, make amendments to the purchasing mechanism and the
mechanism providing for cheap loans to farmers, add the task to establish
national bread standards to the 2005 Subject Seclude on Standardization,
and reduce grain transportation charges.
On their part, AAB members undertake to ensure purchase of food-grade
grain harvested in 2005 in the required volumes. "Of the planned 500,000
tons of grain that the thee structures [AAB, Khlibprom and Ukoopsoyuz] are
to buy, UBA enterprises undertook to buy two-thirds, which is why the
leadership of UBA hopes that the Agricultural Policy Ministry will not delay
signing memorandum," the report reads.
As Ukrainian News earlier reported, UBA opposes Agricultural Policy Minister
Oleksandr Baranivskyi's proposal on signing a memorandum between the
ministry and bakeries, under which bakeries are to purchase one year's
volumes of grain. Its reason is that the document is declarative in nature
and does not take into account the pressing requirements of the sector for
successful purchase of newly harvested grain.
The association rather favored the program proposed by the Cabinet of
Ministers on July 1. The Cabinet of Ministers has decided to provide
privileged crediting to bread bakeries and distilleries for procurement of
grain volumes they require for one year. After that, the Agricultural Policy
Ministry proposed that bakers sign a memorandum stipulating the relevant
obligations.
ABB is a professional association of bakeries created on November 7,
2003. The association unites 77 organizations in the bakery industry from
17 regions of Ukraine and the Crimea. The annual demand for food-grade
grain on the Ukrainian market is estimated at about 7 million tons. -30-
=============================================================
9. LIBYA COOPERATES WITH UKRAINE GOVN'T TO GROW WHEAT
Company to be set up to farm 250,000 hectares of wheat
Two governments to build jointly owned flour mill
Srategic Business Information, Sun, July 31, 2005
LIBYA - Al-Khaleej newspaper reported on the cooperation between Libya
and Ukraine in a wheat growing project. The paper quoted a notice published
in early May 2005 on the Trade Arabia Internet site announcing that a high
level delegation from Ukraine visited Tripoli, Libya, to negotiate the
export of 300,000 metric tons annually of wheat to Libya and the building of
a jointly owned flour mill.
The paper noted that the Ukrainian Foreign Minister met with Libyan ruler
Muammar al-Qaddafi to discuss with him setting up a Company to be
responsible for the 250,000 hectares of agricultural land where wheat will
be grown. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
10. BEEFING UP UKRAINIAN'S APPETITES
By Heorhiy Bohdanov, Kyiv Weekly, Issue 29 (169)
Kyiv, Ukraine, Friday, July 29 - Aug 12, 2005
According to the results of monitoring by the Ministry of Economy, in the
middle of July, the average prices of poultry in Ukraine grew by 3.7%,
beef - 3.4%, for pork - 1.7% and pig fat - 0.5%
Particularly depressing is a drastic rise in the prices of poultry products
in Ukraine, which is the most prosperous sector of the country's animal
husbandry industry. But that is not the worst of it. Poultry farmers have
decided to go a step further. One of the largest producers of poultry in
Europe, the Myronivskiy Khliboproduct joint-stock company, which owns
the trademark Nasha Ryaba chicken products, announced its intention of
gradually raising the prices of poultry to the level of pork and beef.
Not only is this a violation of the pricing agreement in the memorandum
between the Cabinet of Ministers and the producers of poultry products. It
is also another test for consumers.
Meanwhile, the members of the government are still trying to stabilize the
prices of poultry, are totally uncoordinated, and even contradict one
another. Naturally, this means that the efficiency of teamwork is close to
zero.
For example, the Minister of Agricultural Policy Oleksandr Baranivskiy
proposed buying 3 mn tonnes of fodder grain for the animal husbandry
industry, but the initiative was turned down at a meeting of the Cabinet.
The minister also asked the oblast heads to foster an increase in cattle
stock and appeal to farmers to breed pigs instead of taking them to
slaughter. In the opinion of the minister, this would allow for 15% more
meat by the end of the year than in 2004.
The idea is clear, but it does not correspond with the plans of the State
Reserve Committee, which announced four bids for the purchase of 10,000
tonnes of pork and beef in either July or August. In the event the starting
prices are satisfactory for farmers and the tender is successful, it is
still unclear who will supply pork to the state reserve.
The lack of coordination in the acts of the governing bodies could postpone
stabilization in this sector for an uncertain period of time. There are
still hopes for the supply of meat from abroad, especially if to take into
account that the parliament lowered the import tax on meat products.
Certainly, compensating the shortage of these products currently estimated
at 400,000 tonnes with imported products can fill the market for a certain
period and curb price growth. But many experts believe that a prolonged
stabilization of the situation in the meat market and a drop in retail
prices are possible only in the event that quotas are introduced on imported
meat products and directing the proceeds from sales based on these quotas
to developing the domestic livestock breeding industry.
So far, the only demonstration that the projects for "beefing up the
country" (KW No. 20) are actually being implemented is the signing of the
memorandum on cooperation between the Ministry of Agricultural Policy and
Graakjaer International A/S. This memorandum foresees the construction of
25 pig-breeding complexes in Ukraine using Danish technologies.
All phases of the project will be realized in accordance with the signed
contracts. Around 45 companies expressed their interest in investing funds
in the project. But a mere wish is not enough, since they need to obtain the
right to participate in the tender. Moreover, when exactly this tender will
take place remains a mystery. -30- [Action Ukraine Report Monitoring]
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LINK: http://www.kyivweekly.com/english/article/?1012
---------------------------------------------------------------------------------------------------------
FOOTNOTE: Agricultural leaders we have communicated with about the
Ministry of Agricultural Policy's program to build 25 pig-breeding
complexes in Ukraine hope there will never be a tender regarding this
project and then when it will take place will always remain a mystery. This
project is right out of the Soviet ag-handbook of the 1950's. It has zero
chance of being successful, will cost the government a lot of money and is
terrible agricultural policy in a private economic system. EDITOR
=============================================================
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=============================================================
11. TYMOSHENKO SAYS NEW OIL REFINERY MAY BE BUILT IN CRIMEA
Ukrainian News Agency, Kyiv, Ukraine, Sun, July 31, 2005
KYIV - Prime Minister Yulia Tymoshenko says that an oil refinery may be
built on the basis of the oil terminal in Feodosiia (Crimea). She made this
statement, addressing a field meeting of the Cabinet of Ministers in
Simferopol.
According to Tymoshenko, preliminary talks were held with potential
investors into the project. "We already have the investor and the vision
when the effort will be completed," she said.
The Premier added that the project must be environmentally friendly, taking
into account the specific features of the region. She gave no other details
of the project.
As Ukrainian News earlier reported, Tymoshenko announced on May 16
that the Cabinet of Ministers intended to build an oil refinery in Odesa
with annual output of up to 10 million tons within 1.5 years.
Six petroleum refineries are presently operating in Ukraine: the Lysychansk
oil refinery, Ukrtatnafta (Kremenchuk, Poltava region), the Kherson oil
refinery, the Odesa oil refinery, Halychyna (Drohobych, Lviv region) and
Naftokhimik Prykarpattia (Nadvirna, Ivano-Frankivsk region). The annual
capacity of the existing refinery in Odesa is about 3.6 million tons of
crude oil. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
12. UKRAINIAN PM URGES CREATION OF STATE-OWNED TITANIUM CO
Ukrainian-German JV worries its investment is in danger
Interfax-Ukraine news agency, Kiev, in Russian 1630 gmt 30 Jul 05
BBC Monitoring Service, UK, in English, Sat, Jul 30, 2005
SIMFEROPOL - The Cabinet of Ministers of Ukraine is going to take all the
necessary steps to set up the state corporation Ukrayinskyy Tytan [Ukrainian
Titanium], Prime Minister Yuliya Tymoshenko has said. Tymoshenko was
speaking at a news conference in Simferopol today.
Tymoshenko said the cabinet discussed at its meetings plans to create
such a corporation, which would comprise all enterprises that in one way
or another are linked to "this big strategic theme".
"We are going to take all the necessary steps to create the state
corporation Ukrayinskyy Tytan," Tymoshenko said. She added that
Ukraine holds "a leading position in titanium production in the world".
[Passage omitted: the Ukrainian-German joint venture Krymskyy Tytan
(Crimean Titanium) worries that its investment is in danger because of the
Ukrainian government's decision to form a state-owned corporation; see
ICTV television, Kiev, in Ukrainian, 1545 gmt, 23 Jul 05.] -30-
-----------------------------------------------------------------------------------------------------------
FOOTNOTE: One top observer of business in Ukraine wrote us and
said, "This may never happen. But for sure these type of statements are
scaring foreign investors. They show that the government does not have
a clear vision of the government's role in a market economy."
=============================================================
13. PRIME MINISTER INITIATING CHECK ON THE LEGITIMACY
OF CREATING STATE OWNED KRYMSKYI TYTAN (TITANIUM) PLANT
Ukrainian News Agency, Kyiv, Ukraine, Mon, August 1, 2005
KYIV - Prime Minister Yulia Tymoshenko is initiating a check on the
legitimacy of creating the Krymskyi Tytan plant. She disclosed this at a
press conference in Simferopol (Crimea). "The best part of the Tytan
enterprise was separated and given over to a joint venture. We will initiate
a check on the legitimacy (of such decisions)," she said.
As Ukrainian News earlier reported, Germany hopes that its investments
in Krymskyi Tytan (Armiansk, Crimea) and the Crimean soda plant
(Krasnoperekopsk, Crimea), in which German-British company RSJ Erste
Beteiligungs holds 89.48% and 50%-1 respectively, will be protected.
Verkhovna Rada's Special Regulatory Commission on Privatization
recommended on March 15 that President Viktor Yuschenko cancel ex-
president Leonid Kuchma's decree on the creation of joint Ukrainian-
German venture Krymskyi Tytan on the basis of a major producer of
titanium dioxide, state joint stock company Tytan.
In August 2004, the Antimonopoly Committee of Ukraine authorized the
state-owned Tytan joint-stock company and RSJ Erste Beteiligungs of
Germany to create Krymskyi Tytan, and the registration of the joint venture
took place in September 2004. Tytan's stake in Krymskyi Tytan is 50%+1
while RSJ Erste's stake is 50%-1 share. -30-
=============================================================
14. CABINET OBLIGATES INSURANCE COMPANIES TO CHANNEL NO
LESS THAN 15% OF INSURANCE RESERVES FOR PURCHASE
OF SECURITIES OF STATE MORTGAGE AGENCY
Viktor Riasnyi, Ukrainian News Agency, Kyiv, Ukraine, July 21, 2005
KYIV - The Cabinet of Ministers obligated insurance companies to channel
no less than 15% from the amount of insurance reserves for purchase of
securities of the State Mortgage Agency. Prime Minister Yulia Tymoshenko
informed Ukrainian News about this.
She said that this decision is connected with the Verkhovna Rada's refusal
to approve drawing USD 2 billion of foreign loans under state guarantees
for financing of the State Mortgage Agency.
Thereby, Tymoshenko emphasized that drawing part of insurance reserves
will permit to start funding of the agency and result in implementation of
long-term mortgage crediting programs for population.
As Ukrainian News earlier reported, the Verkhovna Rada refused on June
to send 50% of funds gained from sales of non-farm land plots for financing
of the State Mortgage Agency.
The institution was set up by the government in October 2004 with the
statutory fund of UAH 50 million to refinance mortgage loans at the expense
of funds raised from sale of securities. The Cabinet reduced the statutory
fund of the State Mortgage Agency by UAH 30 million to UAH 20 million.
The main aim of the State Mortgage Agency is to use proceeds from the
floatation of securities for refinancing mortgage loans. -30-
---------------------------------------------------------------------------------------------------------------
FOOTNOTE: One top economic analyst in Kyiv wrote us and said, "This
article shows that the Government has learned nothing about the dangers
of state intervention. This new requirement confirms that Ukraine has still
a long way to go to become a market economy. It is hard to be positive
about the country when every week a similar action is taken by the
government." EDITOR
=============================================================
15. TYMOSHENKO TAKES AS GOOD NEWS HER RECOGNITION AS
ONE OF THE MOST INFLUENTIAL WOMAN BY FORBES MAGAZINE
Ukrainian News Agency, Kyiv, Ukraine, Mon, August 1, 2005
KYIV - Prime Minister Yulia Tymoshenko described as a good news her
recognition by the US Forbes magazine as one of the most influential women.
She said this as a press conference in Simferopol (Crimea). "This is a good
news, but it is not going to influence my work. We still have to do a lot,"
she said.
Commenting on journalists' questions about her incomes and possible bank
accounts, Tymoshenko said she is a rather well-to-do person, lives in a
rented house outside Kyiv and pays minimum time to household. "Household
activity is a minor part of my life. I spend at home only 8-9 hours at
nighttime," she said. Tymoshenko invited some journalists to visit her
house.
As Ukrainian News reported, Tymoshenko took the 3rd place in the rating of
the most influential women of the world made by the US Forbes magazine. In
2004 Tymoshenko received UAH 60,665 as a Verkhovna Rada (Parliament)
Deputy. Tymoshenko's wage in the Prime Minister's post in June reached
UAH 16,898. -30- [The Action Ukraine Report Moitoring Service]
=============================================================
Send in a letter-to-the-editor today. Let us hear from you.
===============================================================
16. STATE OWNED SHIPYARD BUILT HULL FOR NORWEGIAN ICEBREAKER
Norway's Havyard Leirvik AS company orders second hull built in Ukraine
Ukrainian News Agency, Kyiv, Ukraine, Sun, July 31, 2005
KYIV - The 61 Communards shipyard (Mykolaiv) has made a hull for support
icebreaker vessel of shipbuilding company Havyard Leirvik AS (Norway).
Ukrainian News learned this from the shipyard director general Valerii
Ahafonov. In his words, on July 24 the hull was launched, and on July 29 it
was given over to the Norwegian company.
The length of the iceboat is 99 meters, its width is 19 meters and
deadweight 2,800 tons. The vessel was designed for work in extreme low
temperature conditions, down to -60 degrees centigrade. That is why its
production took metal with special qualities that was made on a special
order at Mariupol's Illich metallurgical mill.
An equipped vessel was ordered by the Russian Sevmorneftegaz company
that intends to use the icebreaker in the development of Prirazlomnoe oil
and Shtokmanovskoe gas condensate deposits in Pechora Sea (Russia's
continental shelf).
The Sevmorneftegaz company specializes in the prospecting, development
and extraction of crude oil, gas condensate and natural gas. It was set up
in 2002 by Rosneft's subsidiary Rosneft-Purneftegaz and a subsidiary of
Gazprom, Rosshelf (all Russia-based).
Apart from this, on July 24 the production of one more iceboat hull,
identical to the already made one, started for the same customer. As
Ukrainian News reported, the 61 Communards shipyard started building the
first hull of a support icebreaker for Norway's Havyard Leirvik AS on
October 8, and a contract on the production of one more hull was signed on
October 9, 2004.
The shipyard specializes in building all types of ships weighing up to
28,000 tons, as well as in repairing ships. The state-owned 61 Communards
shipyard specializes in the construction of all types of vessels with hulls
weighting up to 28,000 tons. It also repairs vessels, and exports more than
80% of its products. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
17. IFC OFFERS LVIV'S GALNAFTOGAS USD 25 MILLION CREDIT
One of Ukraine's largest filling station operators
New Europe, Athens, Greece, Mon, August 1, 2005
The International Finance Corporation (IFC) will offer Ukraine's Galnaftogas
in Lviv a loan worth USD 25 million, the IFC office in Ukraine said in a
recent statement, cited by Interfax news agency. Galnaftogas will use the
money to expand its filling station chain and to improve product quality and
service, the statement read.
IFC has provided the concern with consultations on introducing one of
Ukraine's first corporate governance codes, enabling Galnaftogas to become
a leader in transparent and responsible business management, the document
said.
Cooperation with the IFC over corporate governance, social and environmental
issues, and the company's success in raising foreign investment can serve as
an example for other Ukrainian companies, the statement cited IFC Central
and Eastern Europe Department Director Edward Nassim as saying.
The IFC hope that expansion will help Galnaftogas improve operating
activities, raise quality standards and increase competitiveness on the
retail fuel market, Rashad Kaldany, the IFC oil, gas, mining and chemicals
department chief, said. The IFC plans to provide the necessary long-term
funding to support the company, which has good development potential, he
added.
Galnaftogas is one of Ukraine's largest filling station operators. It owns
164 filling stations around Ukraine. -30- [The Action Ukraine Report]
=============================================================
18. LARGE RUSSIAN MALT COMPANY TO BUILD MALT FACTORY IN
VINNYTSIA REGION IN 2008
Russian Malt plans to invest around USD 40 million
Ukrainian News Agency, Kyiv, Ukraine, Mon, August 1, 2005
KYIV - Russian Malt company, ranking among the 20 largest producers of
brewer's malt in the world, plans to build a malt factory in Vinnytsia
region by 2008. Vinnytsia governor Oleksandr Dombrovskyi informed
Ukrainian News about the current talks with the Russian company. He said
the factory will be capable of making 100,000 tons of malt per year.
Russian Malt plans to invest around USD 40 million into the new facility.
Dombrovskyi added that at the first stage of the project the company will
buy an elevator in the area where brewer's barley grows (the northern and
western part of Vinnytsia region) and a controlling stake in the Kordelivka
regional mixed fodder factory (Kordelivka village, Kalynivka district of
Vinnytsia region) in order to raise a malt factory on its grounds.
A 60.38% share in the Kordelivka factory belongs to Vinnytsia-based
Podilska Stock Company Ltd. Open joint-stock company Russian Malt
belongs to the Moscow-based Avangard Bank and incorporates three malt
factories in Moscow, Voronezh and Orel regions of Russia with a combined
annual capacity of 300,000 tons, plus a mixed fodder plant and a trading
company.
Among 60 corporate clients of Russian Malt are Efes, Heineken, Baltika,
Vena, PIT, and Bochkariov. Analysts are saying that Russian Malt is the
largest producer in Russia and the 14th largest producer of raw materials
for the brewing industry in the world. -30- [The Action Ukraine Report]
=============================================================
Send in names and e-mail addresses for the AUR distribution list.
=============================================================
19. EBRD TO ACQUIRE EQUITY STOCKS IN RUSSIAN AND UKRAINIAN
SUBSIDIARIES OF FRENCH YEAST & MALT PRODUCING COMPANY
Ukrainian yeast-making company CJSC Nadia
Ukrainian News Agency, Kyiv, Ukraine, Sun, July 31, 2005
KYIV - The European Bank for Reconstruction and Development [EBRD] has
signed a share purchase agreement to acquire equity stakes in certain
Russian and Ukrainian subsidiaries of France's Lesaffre & Cie SA, including
the Ukrainian yeast-making company CJSC Nadia (Kryvyi Rih, Dnipropetrovsk
region). Ukrainian News learned this from the EBRD press service.
In keeping with the agreement, the total volume of the bank's investments
into this group of companies will run into USD 30 million. Thus, the EBRD
will participate in modernizing, restructuring and upgrading those
enterprises, as they are between 40 and 100 years old.
The bank's press service does not specify an exact mechanism of buying
the shares. According to the EBRD press service, Lesaffre & Cie SA is the
world's leading producer of yeast and the fifth largest producer of malt.
As Ukrainian News reported, in 2004 the EBRD invested in Ukraine around
USD 350 million. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
20. PROMOTING UKRAINIAN BUSINESS' PLACE AT THE HEART OF
EUROPE IS GOAL OF SYSTEM CAPITAL MANAGEMENT CAMPAIGN
CNW, Friday, July 29, 2005
DONETSK, Ukraine - System Capital Management (SCM) unveiled an
international corporate communications campaign that will highlight the
breadth and depth of the company's assets as well as its commitment to
Ukraine as it moves toward fuller integration with the global economy.
Speaking at the press conference on July 27th, SCM General Director, Igor
Prasolov said: "SCM is at the forefront of Ukraine's effort to integrate our
country into the European and international community.
Today, we began a campaign that will put Ukraine and SCM's story of rapid
progress on to the world stage. We are letting people know that SCM is a
substantial Ukrainian company with world-class management standards and
global ambitions.
"This campaign is one of the means we will use to ensure that everybody in
Ukraine, Europe and the United States has a better understanding of what
we do and the importance of SCM and our region to the Ukraine economy."
The campaign, launched on 27th July during a press reception in Kiev, will
begin with advertisements in publications including The Wall Street Journal,
the Economist, the Financial Times, the Washington Post and Newsweek
(beginning today - 29th July 2005). The ads will also run in Ukraine media
from 1st August 2005.
"We are excited about our role in promoting Ukraine's business success. Our
advertising and the company's new web site - they capture the spirit and the
drive that has made SCM one of Ukraine's leading companies," Natalia
Izosimova, SCM Director of Company Restructuring, said. "Importantly, the
campaign is focused on the future, the future of our country and the future
of the company."
The advertising was designed and produced by Marsteller in London working
with the SCM executive team, while media space was planned and bought by
BJK&E.
The campaign also includes a television commercial that will run in Ukraine
and European television from 22nd August.
The new web site (www.scm.com.ua), designed by Netshaker in Budapest,
includes information on the company's businesses, management team,
investment and community programmes.
The campaign's tagline, "SCM: HEAVY INDUSTRIES, RAW MATERIALS,
ENERGY, BANKING, INSURANCE and much more...," illustrates the wide
range of SCM's assets. SCM owns and operates steel plants, iron ore mines,
coal mines, energy assets, banking and insurance companies, as well as a
hotel, a brewery, and Ukraine's most successful football team, FC Shakhtar
Donetsk.
The advertising and web site feature photographs of real SCM employees at
various businesses - steel plants, coal mines, the Donbass Palace Hotel - as
well as supporters of Champions League team FC Shakhtar Donetsk, 2005
champions of the Ukrainian PREMIER League football title. -30-
------------------------------------------------------------------------------------------------------------
For further information: Mark Rollinson, Managing-Director, Marsteller,
+44-(0)20-7300-6301, mark.rollinson@uk.bm.com
=============================================================
21 STRESSES IMPORTANCE OF SME'S IN UKRAINIAN ECONOMY
Amb to Greece and former First Deputy Economy Minister Viktor Kalnyk
By Kostis Geropoulos, Senior Reporter
New Europe, Athens, Greece, Mon, August 1, 2005
ATHENS - Seven months after Ukraine's Orange Revolution - and with fresh
parliamentary elections scheduled for next March - it is important to
analyse the reaction of foreign investors and how they perceive the
situation in Ukraine in order to further improve the investment climate,
said Ukrainian Ambassador to Greece and former First Deputy Economy
Minister Viktor Kalnyk.
Kalnyk noted that European investors are more interested now in the
Ukrainian economy. "Frankly speaking, within this year we had more
proposals from the Greek side to invest in Ukraine than we had over the
last three years before the Orange Revolution.
That proves that there have been considerable changes in the rules for
foreign investors in Ukraine, especially in economic freedom and the fight
against corruption," Kalnyk told New Europe in an interview, adding that
these changes have improved Ukraine's image abroad.
The ambassador is wrapping up his term in Greece and will be replaced by
Valery Tsybukh, former head of the National Tourism Administration of
Ukraine, in September. Kalnyk, strategising a return to the economic
ministry, noted that there were still problems in Ukraine, namely in the
banking and agricultural sectors.
Ukraine needs to make the banking system flexible and transparent. "We still
have some weak points in the banking sector. When our own sources are not
enough we have to think about involving foreign banks in the economy of
Ukraine. We have a lot to do in adapting banking legislation to EU
standards. And after those changes are implemented our declarations
regarding future integration with EU will be more practical," he remarked.
The ambassador also said that Ukraine has "a poor policy regarding the
export of agriculture products. One of the main reasons is that we do not
have a developed market of agricultural products inside Ukraine and
sometimes it is not transparent. Nobody knows exactly what figures we have
in Ukraine and how to work in order to sell our products."
The Ukrainian economy lies with small and medium enterprises (SMEs),
Kalnyk said. He reminded that the new government has shortened the period
for registration of SMEs and President Viktor Yushchenko promised to cut
taxes for them at least by 50 percent at the beginning of next year. "At the
moment we are in the process of preparing new legislation which will
regulate the taxation for small and medium businesses.
There are also some measures in order to make more transparent the
privatisation in Ukraine," Kalnyk said, adding that these steps have bared
fruit with Greek investors.
According to him, EU member state Greece has several planned projects
with Ukraine including the construction of an electric power station in the
western part of Ukraine, a USD 700 million sports centre in Kharkiv, several
USD 300 million ship-building ventures and a construction project with
Mixaniki SA.
He also said that he is in personal talks with three groups of prominent
Greek businessmen although he refused to name them. He said there are
more than 20 businesses who would like to transfer their production
facilities from Greece to Ukraine.
However, the government's struggle with disputes over the privatisation and
renationalisation of enterprises appears to scare off some investors, but
Kalnyk said there was no cause for concern. "Of course there are some
problems in this sphere but the government is determined to solve them in
the near future. I'm talking about the so-called reprivatisation of several
factories which were privatised against the law and are treated as corrupt
actions of the previous government," Kalnyk said.
A more serious concern for the current coalition government is the upcoming
parliamentary election. "Of course it's very difficult for the government to
implement its policies due to the upcoming election. Parliamentary elections
could mean changes again in the government.
But I think the government has enough time to at least solve the main
problems in Ukraine - to implement its ideas. Some of them are already done.
I mean we have a balanced budget and the macroeconomic policy has been
improved considerably so we have a good basis to be successful this year,"
he said.
"The government doesn't wait for the parliamentary elections and is trying
to do as much as possible right now," he said, referring to the passage of
several laws through the parliament so that Ukraine can enter the World
Trade Organisation before the end of the year.
The envoy noted that the government is also thinking how to change the
structure of Ukrainian exports from raw materials to finished products.
"Previously GDP growth was mostly supported by the export of Ukrainian
raw materials like steel and chemical fertilisers but we have great
potential in high technologies like machine-building," Kalnyk said.
The switch is one of the reasons that Ukraine is expected to turn in a
growth rate of 6.5 percent in 2005 compared to 12 percent in 2004 but, he
explained, foreign investment in the nation is expected to double this year,
which is a sign that Ukraine should enjoy a much improved situation in the
long run. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
22. UKRAINE TRADE UNION LEADER VOLYNETS PRAISES REVOLUTION
BUT CONTINUES FIGHT FOR CHANGE
Economic and political reforms must deepen across the society
Radio Free Europe/Radio Liberty (RFE/RL)
Washington, D.C., Friday, July 29, 2005
WASHINGTON - On November 22, 2004 Mikhail Volynets led a large group
of miners into Kiev's main square to support Viktor Yushchenko and helped
achieve democracy for his country in what is referred to as Ukraine's Orange
Revolution.
According to Volynets, the President of the Confederation for Free Trade
Unions of Ukraine, "the revolution took place at the top level only" with
the election of a democratic President and Prime Minister, "but on the local
level nothing has changed."
Speaking to a RFE/RL audience last week, Volynets said that is why he is
concerned that economic reforms continue and political reforms deepen
across the society.
Volynets and the Confederation of Independent Trade Unions of Ukraine have
been staunch advocates for workers' rights and human rights in Ukraine. He
reviewed the growth of the independent labor union in Ukraine, which began
in 1989 with a miners' strike. "Our protest movement grew into a workers'
movement" said Volynets. "The Solidarity Center [of the AFL-CIO] visited
us," and soon the leaders of "the strike committees became leaders of trade
unions."
Over the last decade, "we made lots of mistakes," but when finally "we
understood there was no democracy in our country, Volynets said,
"journalists were [being] killed and this was connected to [the] top
leaders. There was no plan to integrate with the West, so we moved to the
opposition movement."
The independent labor unions have had lots of political experience because
the political parties remain weak in Ukraine. Volynets said he brought
miners to Kiev to support Ukraine's independence in 1991, and the miners
supported the failed protests to oust President Leonid Kuchma in 2002. They
actively supported Viktor Yushchenko in the presidential election of 2004.
Yushchenko's opponent, Viktor Yanukovych, had much support in the
industrialized eastern and southern regions of Ukraine. According to
Volynets, all information flows from Ukraine's democratic opposition to this
area of the country was blocked, but 100 percent of Ukraine has information
flowing from Russia. Because of this it was very difficult to gain
supporters for Yushchenko in this part of the country.
After the run-off election in which the democratic opposition documented
massive voter fraud and other election violations, Volynets argued for the
protest tactics to remain peaceful. "Because I knew how to direct large
groups of people," Volynets said, Yushchenko encouraged him to apply his
organizational talents to the growing crowd of supporters. "I thought we
should block the entrance to the Presidential Administration building and
the Cabinet of Ministers to give the people the feeling that we were getting
stronger," Volynets said.
They took over the government controlled trade unions building on the city
square and made it the control center for the protestors. "When people came
from the provinces with food, clothing and blankets, we were able to tell
them where the protestors from their town were located on the city square,"
he said.
Volynets confirms that President Kuchma and his police officials debated
using deadly force against the protestors, particularly on 24 November.
Volynets gives credit to Lech Walesa, the former Polish President who won
the Nobel Peace Prize in 1983 for his leadership of Poland’s Solidarity
movement, for helping to convince Kuchma not to use weapons against the
protestors.
Polish free trade unions delivered food to the protestors camped on Kiev's
main city square, but most of protestors were fed daily by donations of
local stores, restaurants and factories. "The whole population of the
capital city supported us," Volynets said, "I've never felt such a feeling
of unity and brotherhood."
Volynets, a member of Ukraine's parliament, believes that at least 57
percent of Ukraine's economy is still "a shadow economy," and that the old
government's representatives and the Communist Party continue to
undermine the parliament's efforts to reform the country.
"We suppose the communists got their money from Russia," he said, "We
don't know any other way to describe their aggressive position." He is very
concerned that the democratic opposition wins the next parliamentary
elections scheduled for spring 2006 in "a free and fair way." -30-
--------------------------------------------------------------------------------------------------------------
Radio Free Europe/Radio Liberty is a private, international communications
service to Central, Eastern and Southeastern Europe; the Caucasus; and
Central and Southwestern Asia funded by the U.S. Congress through the
Broadcasting Board of Governors, Radio Free Europe / Radio Liberty
1201 Connecticut Ave NW, Washington, DC 20036
tel: 202-457-6900; fax: 202-457-6992, http://www.rferl.org
CONTACT: Martins Zvaners (202) 457-6948; Melody Jones (202) 457-6949
=============================================================
23. YUSHCHENKO BATTLES CORRUPTION BY A
BARRAGE OF PROSECUTIONS
By Patrick Greenberg, Freelance Writer, UK
New Europe, Athens, Greece, Mon, August 1, 2005
On May 16, 2005, during the plenary seating of the third meeting of the
leaders of the Council of Europe member states, Ukrainian President Viktor
Yushchenko announced that Ukraine is ready to join the group of states
fighting corruption. According to him, the new Ukrainian power has declared
the war against corruption and wishes to make use of all instruments to
overcome it, including legislative regulations created by the Council of
Europe.
During his election campaign Yushchenko constantly said that "bribes,
which became the system of power, don't allow Ukraine to move forward."
Yushchenko opined that fighting corruption can be fostered only by
"transparency of economic relations, sincerity and responsibility of the
power."
After the victory at the presidential elections, the new president appointed
his team-mate Yury Lutsenko to head the ministry of interior. He became the
first civilian minister of interior in Ukraine and first of all he changed
all the militia chiefs in Kiev and country regions. Similar changes took
place in security service, prosecutor's office, tax administration and
customs office of Ukraine. As a result, the detentions of the bribe takers
began in the regions of Ukraine.
Recently, the ministry of interior and prosecutor's office have questioned
several dozens of the highest level officials, several criminal cases were
brought in action, and some suspects have been arrested. In general during
the last six months 18,000 state officials were fired in Ukraine. It's worth
mentioning that the opposition has condemned these prosecutions as a
"witch hunt," saying that such large-scaled cleaning has a political
character.
At the same time Lutsenko claims that all criminal cases that were brought
in action against former state officials, deal only with theft, misuse and
other crimes. Thus, a criminal case has been already brought in action
against the former mayor of Odessa Ruslan Bodelan, the former head of state
administration of Sumy oblast Vladimir Shcherban, the former head of the
executive office of the president administration Igor Bakay - all of them
were close to President Kuchma.
All of them are searched now and according to the latest data, Bodelan and
Bakay are hiding in Russia. "One hundred and twelve officials of the
previous power are the subjects of criminal cases, brought in action by the
prosecutor's office according to the initiative of the ministry of
interior," Lutsenko said. "This is not all, the quantity rises. When a
person has stolen a billion it is not an economic crime. If a person being a
high-rank official organised the robbery of the country he cannot buy it off
by any sum of money and he will face a trial," he added.
Kuchma was interrogated twice about the case of George Gongadze, which
disappeared autumn 2000. The first son-in-law of the President Igor Franchuk
(now is a chairman of state-owned enterprise Chernomorneftegaz in Crimea)
was summoned to the ministry of interior for interrogation.
Ministry of interior discovered 330 oil driven wells in Crimea, though only
40 of them are licensed. According to Lutsenko, if the explanations of
Franchuk turn to be not sufficient, he becomes an accused, not a witness.
The most popular case is still a case of Boris Kolesnikov, which was brought
in action March 25, 2005 for "extortion of property right with the help of
abuse of power and a threat of death." On March 28 this case was transmitted
to the chief investigation office of the ministry of interior of Ukraine for
further investigation. On April 5, Kolesnikov was detained by the militia at
the exit from the prosecutor's office, after the interrogation about
separatist announcements and Severodonetsk congress.
In general, it appears that the majority of Ukrainian citizens like the
irreconcilable attitude of the new power. According to the polling conducted
by the social service of Razumkov Centre, the question of "does the new
state power take any measures fighting corruption and abuse of power?"
was answered "yes, a lot of measures" by 23.1 percent of respondents,
"something is done but it is not enough" by 53.8 percent of respondents and
"nothing or almost nothing" by 15 percent of respondents. -30-
------------------------------------------------------------------------------------------------------------
Patrick Greenberg, is a freelance writer, United Kingdom
=============================================================
24. BOHDAN CORP TO INVEST EUR 200 MILLION IN MODERNIZATION
OF UKRAINE'S CHERKASY BUS PLANT BY YEAR 2007
Ukrainian News Agency, Kyiv, Ukraine, Fri, July 29, 2005
KYIV - Bohdan corporation (Kyiv) plans to invest EUR 200 million in
modernization of production facilities of Cherkasy Bus Plant by 2007.
Bohdan president Oleh Svynarchuk announced the plan at a press
conference at the Cherkasy Regional Administration.
"In 24 months there will be a plant in Cherkasy that has no analogues either
in the near abroad or East Europe," he said. According to Svynarchuk, the
tentative capacity after an upgrade will be 120,000 VAZ, Hundai and truck
cars per year. The corporation is also going to transfer production of
Bohdan buses from Cherkasy to Lutsk.
As Ukrainian News earlier reported, Bohdan announced in June it plans to
invest UAH 15 million in modernization of industrial facilities of Cherkasy
Bus Plant by 2006.
It had earlier stated the decision to stop assembling passenger cars at the
Lutsk car assembly plant (Volyn region) and launch production of buses at
this plant by 2008, and the plan to create plants producing cars and trucks
in Cherkasy by 2008.
Bohdan corporation was founded in February by 20 enterprises making and
selling cars and buses, including Cherkasy bus plant and Lutsk automobile
plant.
Cherkasy Bus Plant, which is an open joint-stock company, specializes in
the production of Bohdan A092, Bohdan A144, and Bohdan A145 buses.
Cherkasy Bus Plant ended the year 2004 with a loss of UAH 4.241 million,
and its net revenues increased by UAH 7.093 million or 13.4% to UAH
60.090 million in 2004, compared with 2003.
According to the plant, its shareholders as of January 1, 2005 were the
Kyiv-based Bohdan Automobile Group (24.97% of the shares in the plant),
the Kyiv-based Business Airlines Harant (24.41%), the Kyiv-based Hyundai
Motors Ukraine (9.59%), Mega-Motors (9.94%), the Kyiv-based Ukrainian
automobile holding (9.22%), and the Kyiv-based Ukrpromavtoshynoremont
company (7.81%). -30- [The Action Ukraine Report Monitoring Service]
=============================================================
25. FEW REAL SIGNS OF CRISIS FOR YUSHCHENKO
AND ORANGE REVOLUTION
ANALYSIS AND COMMENTARY: By Taras Kuzio
Eurasia Daily Monitor, Vol. 29, Issue 47
The Jamestown Foundation
Washington, D.C., Friday, July 29, 2005
Western media reports are increasingly claiming that the Orange Revolution
is floundering in Ukraine. The Independent (July 25) asserted, "There is a
growing consensus in Ukraine that Mr. Yushchenko and Ms. Tymoshenko
have frittered away much of their political capital." The International
Herald and Tribune (July 26) focused on the policy divides in President
Viktor Yushchenko's coalition and their alleged fear of undertaking tougher
reforms.
While these claims hold some truth, overall they misread the Yushchenko
administration. Some economic policies in Yushchenko's first 100 days
were undoubtedly misplaced, bordering more on socialist than free market
economics.
Nevertheless, Russian opposition politician Boris Nemtsov's description of
Prime Minister Yulia Tymoshenko as "very left-wing, hugely populist,
paternalistic, and also very charismatic" is a gross exaggeration
(International Herald and Tribune, July 26).
Tymoshenko's penchant for state intervention in some areas is tempered by
her support for free market economics in others. Tymoshenko is not an
ideologically driven socialist, unlike the Socialist Party (SPU), which is
allied to Yushchenko. Yet during the parliamentary debates over adopting
WTO legislation, Tymoshenko backed the government while the SPU voted
against them.
The government has not been given sufficient credit in three areas.
FIRST, despite talk about re-privatization, Ukraine has not followed Russia
in trumping up false charges against oligarchs to put them behind bars. No
oligarch in Ukraine is set to go to prison just because he is an oligarch
who supports the opposition.
SECOND, the Yushchenko government is sincerely committed to combating
corruption, which must be curbed in order to attract foreign investment and
to facilitate Ukrainian business.
THIRD,the government is more favorably disposed towards small- and
medium-sized businesses, as many of those owners backed the Orange
Revolution.
Critics of the Yushchenko government often make assumptions that are
not relevant for Ukraine.
FIRST, the average Ukrainian citizen does not take notice of reductions in
GDP and vote accordingly. If this were the case, former prime minister
Viktor Yanukovych would have won a landslide in the 2004 presidential
election when Ukraine's economy was growing at record levels.
But Ukrainian voters did not see high economic growth creating a higher
standard of living. They instead feared unemployment (73%), rising prices
(71%), unpaid wages (65%), and even famine (51%) (Suchasnist, April
2004).
SECOND, the average Ukrainian citizen does not understand or take an
interest in many issues that are strategically important for the country,
such as WTO membership. Parliamentary Speaker Volodymyr Lytvyn
complained that few parliamentary deputies fully understand the
ramifications of the legislation required for WTO membership.
Instead, the real threat to the Orange Revolution rests in an area ignored
in Western commentaries. The Orange Revolution and Yushchenko's
election took place when a sizeable proportion of Ukrainian voters began to
believe that Yushchenko was different from other politicians. As in many
post-communist states, after a decade of "transition" Ukrainian voters
believed that all politicians were corrupt and only wanted public office for
personal gain.
The fate of the Orange Revolution and Yushchenko himself hinges upon
whether or not Ukrainians continue to believe the new president is
different, rather than lumping him with former presidents Leonid Kravchuk
and Kuchma.
So far, despite a number of crucial mistakes made by the Yushchenko
administration, ratings for Yushchenko and Tymoshenko remain high.
The only exception is among eastern Ukrainians, who primarily voted for
Yanukovych in 2004. The commonly heard view among them is: "At best...the
Orange Revolution replaced one criminal clan, Mr. Yanukovych's, with a new
one -- Mr. Yushchenko's" (Wall Street Journal, July 15).
Eastern Ukrainians, particularly in Yanukovych's home base of Donetsk,
continue to remain cynical towards all politicians. Following this logic,
better then the "lesser of two evils" and the election of "our own boys"
into power rather than western Ukrainians.
A more complicated factor to deal with fairly is the question of double
standards within the government. As the Wall Street Journal (July 15) wrote,
"Worst is the presence in the new government of Ms. Tymoshenko -- a former
head of United Energy Systems of Ukraine who was prosecuted by the
Kuchma government..." This is seen in eastern Ukrraine as "evidence of a
double standard in fighting corruption."
The questions of whether to review corrupt privatizations dominated much of
the government's time and Prime Minister Tymoshenko's rhetoric during the
first 100 days. Reviewing all privatizations would be impossible and
undesirable. After all, the Yushchenko team includes many businessmen.
Ukraine scholar Anders Aslund described the Orange Revolution as a "revolt
by millionaires against billionaires."
Populist anti-oligarch feeling remains high, helping to change Tymoshenko's
ratings from -50% under Kuchma to +50% under Yushchenko. Most Ukrainian
citizens see privatization conducted in the 1990s in negative terms.
Some 67% of Ukrainians believe that privatization was undertaken in an
unjust manner, with only 9% believing the opposite (Ukrayinska pravda, July
5). Consequently, some 71.3% of Ukrainians would support the
re-privatization of large enterprises (Ukrayinska pravda, May 14).
The highest support for re-privatization of large enterprises exists in
western and central Ukraine (79.5 and 81.2% respectively), two regions where
Yushchenko obtained his greatest support in the 2004 election (Ukrayinska
pravda, May 14). This high level could be explained by anti-oligarch feeling
and by the fact that most large enterprises are based in eastern Ukraine. In
eastern Ukraine support for re-privatization is lower at 53%.
The glow of the Orange Revolution is unlikely to fade before the 2006
parliamentary election. More radical policies this autumn will, if anything,
increase its brightness. -30- [Action Ukraine Report Monitoring Service]
=============================================================
26. ZVARYCH'S LETTER TO YUSHCHENKO ON KRYVORIZHSTAL
ANALYSIS: Article by Viktor Chyokunya
Ukrayinska Pravda web site, Kiev, in Ukrainian 21 Jul 05
BBC Monitoring Service, UK in English, Friday, July 29, 2005
KYIV - Ukrainian Justice Minister Roman Zvarych was reluctant to
acknowledge the warnings he made in his letter addressed to President
Viktor Yushchenko and Prime Minister Yuliya Tymoshenko in which he
allegedly said that the former owners of the Kryvorizhstal steelworks had a
chance of winning their case on its reprivatization brought in the European
Court of Human Rights, a Ukrainian web site has said.
Meanwhile, his later comments on this issue actually contradicted the
content of the letter, it said. Requested by a journalist Viktor Chyvokunya,
also the author of this article, to provide an information note on the real
state of affairs, he failed to keep his promise, the site said.
The following is the text of the article by Viktor Chyvokunya entitled
"Zvarych's letter to Yushchenko on Kryvorizhstal. The one he forgot about",
posted on the Ukrayinska Pravda web site on 21 July; subheadings have
been inserted editorially:
Tycoons bringing case in European Court of Human Rights ----------
Roman Zvarych is an original person. He has two different points of view on
a single very serious issue. It concerns Kryvorizhstal - the main trophy of
[MP and former President Leonid Kuchma's son-in-law Viktor] Pinchuk and
[Donetsk-based magnate Rinat] Akhmetov received from Kuchma for many
years of work on the oligarchic front.
The problem lies in the following: the old authorities sold the enterprise
unfairly, while the new ones took it back inexpertly. It can now lead to
negative consequences at the European Court of Human Rights to which
Kuchma's former favourites are appealing.
In this situation Roman Zvarych showed himself, to put it mildly...
[ellipsis as published] as a "politician" - one who is allowed to publicly
depict things in rose colours, while the president is allowed to describe
the situation only in dark colours. He is greatly misinforming someone in
this situation: maybe, Yushchenko and Tymoshenko; maybe, all the other
people.
Roman Zvarych makes very optimistic statements to journalists with regard
to consideration of the Kryvorizhstal case at the European Court. Meanwhile,
Ukrayinska Pravda obtained Zvarych's personal letter to the president and
the prime minister which revealed that he was not greatly convinced of it.
If Pinchuk and Akhmetov have a chance in Strasbourg, Yushchenko and
Tymoshenko themselves will be to blame. Zvarych actually recognizes that,
having made public statements, both the president and the prime minister
gave a trump card to the former owners of the enterprise.
In addition, Tymoshenko made further unequivocal statements even when
this letter was sent. They are likely to be collected in a special file by
Pinchuk's and Akhmetov's defence lawyers.
The letter published below is dated April 2005: it contains his assessment
of the first appeal of Pinchuk's and Akhmetov's defence lawyers to the
European Court. It was submitted as soon as the Pecherskyy District Court
[in Kiev] recognized privatization as unlawful for the first time. This
decision was later confirmed by the Kiev Economic Court and the Kiev
Economic Court of Appeals. Then Pinchuk's and Akhmetov's defence lawyers
submitted an updated version of the appeal to the Strasbourg Court.
The essence of their claims is as follows: the former oligarchs claim they
are victims in accordance with several articles of the European Convention
on Human Rights, and in particular, their rights to fair trial, to
protection of property and to a ban on discrimination against them for their
political views had been violated.
On the one hand, it is ridiculous to hear complaints of this kind from these
people, as if both Pinchuk's and Akhmetov's energetic activity from
mid-1990s till the end of 2004 had not been discrimination of all others. On
the other hand, being physical persons of the "human being" species, they
have the right to appeal against their violated rights in Strasbourg.
However, you can assess yourselves what Zvarych has written with regard to
this case. You can read the most interesting thing - his comment on his own
letter to Ukrayinska Pravda - after this document.
Leaked letter: Zvarych warns of government's low chances ----------
"Ministry of Justice of Ukraine
15.05.2005 # 33-23-325"
"President of Ukraine V.A.Yushchenko
Copy: Prime Minister of Ukraine Y.V.Tymoshenko"
"Esteemed Mr Yushchenko,
The Ministry of Justice received the letter from the industrial financial
consortium Investment-Metallurgical Union [owned by Pinchuk and Akhmetov]
with contains the appeal of the Investment-Metallurgical Union submitted to
the European Court of Human rights on 22 March 2005 for the purpose of
information."
The appeal says that the decision of the Pecherskyy District Court, city of
Kiev, violates the applicant's rights guaranteed by Articles 6 (right to
fair trial) and 18 (limitation on use of restrictions on rights) of the
Convention for the Protection of Human Rights and Fundamental Freedoms.
The Ministry of Justice of Ukraine is empowered to represent the interests
of the state at the European Court of Human Rights. According to the
procedure of consideration of cases at the European Court of Human Rights,
analysis of applications usually begins as soon as the government of Ukraine
receives an application for communication from the European Court of Human
Rights.
However, as the said application had been sent to the Ministry of Justice of
Ukraine for the purposes of information, its preliminary analysis has been
carried out. The conclusions can be generalized the following way:
1. The European Court of Human Rights in its decision on the
Sovtransavto-Holding versus Ukraine case ascertained violation of Article 6
of the Convention in Ukraine, in particular, in relation to the fact that it
was possible in Ukraine to cancel a judicial decision which had acquired the
status of a final one according to a prosecuting procedure.
The decision of the Pecherskyy District Court, city of Kiev, on reviewing
the decision due to newly emerged circumstances cancelled the decisions
which acquired the status of final ones and were not subject to revision or
appeals.
Though the Investment-Metallurgical Union case does not concern cancellation
of the decision according to a prosecuting procedure, nevertheless, the
situation is similar, and in this case the European Court of Human Rights
can apply a precedent-based decision on the Sovtransavto-Holding versus
Ukraine case and ascertain violation of the legal determination principle,
being an element of the right to a fair trial.
2. In addition, the applicant states in his appeal that the trial was not
fair as such, because the court was subjected to pressure from officials,
including publications in news media. The usual position of the European
Court lies in being impartial until the contrary is proved.
However, the European Court admitted in some of its decisions that, despite
the fact that the case did not contain concrete instructions in the way that
was the case with the Sovtransavto-Holding versus Ukraine case, the
applicant might have had grounded doubts with regard to the judge's
impartiality. Taking into account the statements made by Ukrainian officials
with regard to this case, it can be predicted that the European Court can
take the same position in the Investment-Metallurgical Union versus Ukraine
case.
3. The European Court also noted in its decision on the aforementioned
Sovtransavto-Holding versus Ukraine case that the inability of the state to
create effective judicial authorities results in violation of the right to
peaceful enjoyment of one's possessions guaranteed by Article 1 of the
First Protocol to the Convention.
Despite the fact that the copy of the appeal sent to the Ministry of Justice
does not mention statements on violation of the right to peaceful enjoyment
of the applicant's possessions, he has the right to supplement his appeal
with new complaints in the course of consideration of the case by the
European Court of Human Rights, and in addition to political and legal ones,
they will also have serious financial consequences for Ukraine.
However, in this case everything will depend on further decisions of
Ukrainian courts, in particular, if the applicant gets restitution in
integrum, i.e. reimbursement of the sum invested in the company's shares
in the course of a new trial, he is most likely to lose the status of a
victim in the sense of his appeals against violation of his right to
peaceful enjoyment of his possessions.
4. The applicant's appeal against violation of Article 18 of the Convention
is of special concern. The essence of this part of the appeal lies in the
fact that the applicant's rights were interfered due to the change of the
country's political course.
Article 18 of the Convention was most recently applied by the European Court
of Human Rights in the case [Russian emigre tycoon Vladimir] Gusinskiy
versus the Russian Federation in relation to the applicant's arrests aimed
at taking possession of his shares.
If the applicant in the Investment-Metallurgical Union versus Ukraine case
manages to prove that the indicated violations of his rights took place in
relation to the change of the country's policies, it will have a negative
political aspect with regard to the new Ukrainian leadership.
It should also be noted that any ruling by the European Court of Human
Rights which ascertains violations of the rights guaranteed by the
Convention shall also indicate the sum of fair satisfaction for violations
which have taken place. The government of Ukraine reimbursed financial and
non- financial damages incurred on the applicant in the Sovtransavto-Holding
versus Ukraine case in the amount of 625,000 euros.
It can be predicted after the preliminary analysis that, if the European
Court ascertains a violation of constitutional rights in this case, the sum
of satisfaction will depend on the conclusion drawn by Ukrainian courts.
If property is returned to the applicant, it can be forecast that the sum of
fair satisfaction will be relatively small: from 2,000 to 5,000 euros. If
the property invested in the shares is not returned in accordance with the
rulings of national courts, then the state will be forced to compensate
direct financial damages (608,571,428.00 euros, as indicated in the appeal),
along with non-financial damages and court expenses.
In addition, the state will have to make provisions for restoring the
applicant's violated rights under supervision of the Committee of Ministers
of the Council of Europe, and it will depend on the rights which will be
recognized as violated.
Thus, if violation of article 6 of the Convention is ascertained, according
to Ukrainian legislation, the applicant will have the right to renewal of
proceedings in the case, and it will drag on consideration of the issue of
further privatization of OJSC [open joint-stock company] Kryvorizhstal.
In view of what has been stated above, it is proposed:
1. To stop any news media statements with regard to lawfulness of OJSC
Kryvorizhstal privatization, leaving this issue for consideration by
Ukrainian judicial authorities;"
2. To make any interference into consideration of the case by Ukrainian
courts impossible, including written instructions from the side of officials
at all levels."
Respectfully, Minister R.M.Zvarych
Zvarych's interview: "We feel quite comfortable" ----------
It is clear that these estimations having nothing in common with a stream of
optimism can only arouse interest, taking into account the fact that the
same person makes slightly different public statements. This is why we
addressed the question on Ukraine's chances in the Kryvorizhstal case
directly to Roman Zvarych. His answers differed slightly from what had been
written in the letter.
[Chyvokunya] What is your assessment of Ukraine's chances at the European
Court of Human Rights with regard to the Kryvorizhstal case?
[Zvarych] I cannot make assessments, and I have no moral right to comment
on chances of any of the parties. As to the appeal of the former
Kryvorizhstal
investor, we analyzed all decisions which had been adopted in the same
categories of issues. I can tell you that we shall feel quite conformable at
the European Court while representing the country's interests as the
Ministry of Justice.
As none of the issues accepted by the European Court for consideration
was supported, it actually means that the European Court is sticking to the
position that the issue of returning property of social interest is an issue
of national legislation.
[Chyvokunya] There is information that you
[Zvarych] It does not correspond to reality... [ellipsis as published]
[Chyvokunya] That is, the existence of a letter with warnings... [ellipsis
as published]
[Zvarych] I deny this... [ellipsis as published]
[Chyvokunya] ... [ellipsis as published] a letter with parallels concerning
Sovtransavto, recommending to the president and the prime minister that they
avoid comments on the Kryvorizhstal case and not to give arguments to the
other side?
[Zvarych] Concerning comments, you expressed your feeling of anxiety with
some officials who might say unnecessary things. When a case has been
submitted to a court, either if it concerns Kryvorizhstal or if it is a
certain individual's appeal against the state, state officials should keep
silence. It is a general juridical, or to be more precise, judicial
principle.
Zvarych pretending not to remember letter ----------
Zvarych's rejection of the fact of existence of such letter does not mean
that it did not exist. The document available at the disposal of the
editorial office has even has a registration stamp from one agency of the
authorities. But we shall not make it public in order not to reveal the
source of the information leak.
A Ukrayinska Pravda correspondent met Zvarych in the building of the
Cabinet of Ministers some days later and showed the minister his letter,
the existence of which was denied by him.
Zvarych looked at it and said: "It is clear that this letter was...
[ellipsis as published] I do not remember it." Instead, Zvarych said that
the Ministry of Justice had prepared another information note on Ukraine's
chances at the European Court of Human Rights. We requested him to
publish it in the media, and he agreed. In order not to drag out the issue,
we agreed that the minister would pass it the next day, and it would be
enough just to contact his reception room or press secretary for this.
This has been done on many occasions. Eight days has passed since this
conversation. A spokesperson of the Ministry of Justice, Olena
Iskorostenska, told us that this information note was likely to be passed to
Ukrayinska Pravda on Thursday [21 July] evening. We promise from our side
that as soon as we receive the documents we will inform our readers of its
content.
Zvarych recognizes violations of privatization procedure ----------
During discussion with journalists, Zvarych drew our attention to a detail
which, in the minister's opinion, leaves little chance for Pinchuk and
Akhmetov in Europe:
"The applicant will have to prove at the court that the procedure of
depriving him of ownership rights was violated. I want to remind you that
the decision of the Kiev Higher Economic Court (this is what is said in the
original - Ukrayinska Pravda) with regard to which the executive proceeding
on withdrawing the shares, i.e. return of shares to state ownership, was
opened, actually concerned the procedure."
"What does it mean? The adopted decision ascertained that the deadlines
during which the contest itself (on Kryvorizhstal privatization) might be
conducted, was violated. According to legislation, such contests for
enterprises of "group G" category (strategic facilities) may take place
after a period of 75 days from the date of publication of the information
announcement", Zvarych added.
"The auction on Kryvorizhstal took place 30 days after publication of the
information announcement. It is a violation of the procedure. Taking this
into account, it will be difficult for the applicant to prove his case at
the Strasbourg Court", Zvarych said. -30- [Action Ukraine Report]
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