"THE ACTION UKRAINE REPORT - AUR"
An International Newsletter
The Latest, Up-To-Date
In-Depth Ukrainian News, Analysis, and Commentary
"Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World"
"THE ACTION UKRAINE REPORT - AUR" - Number 552
Mr. E. Morgan Williams, Publisher and Editor
Published in Kyiv, Ukraine, WEDNESDAY, September 7, 2005
--------INDEX OF ARTICLES--------
"Major International News Headlines and Articles"
1. UKRAINE PRESIDENT YUSHCHENKO HOLDS CRISIS TALKS IN
EFFORT TO HEAL RIFT IN POLITICAL TEAM
By Tom Warner in Kiev, Financial Times
London, UK, Tue, September 7 2005
2. OUR UKRAINE PEOPLE'S UNION CONSIDERS ACCUSATIONS
BY ZINCHENKO AIMED AT PURPOSEFUL PROVOCATION
"We warn all political powers that any cooperation with Oleksandr Zinchenko
will make their relations with the party impossible," the statement reads.
Ukrainian News Agency, Kyiv, Ukraine, Tue, September 6, 2005
3. PRESIDENT YUSHCHENKO APPOINTS IVAN VASIUNYK
AS ACTING STATE SECRETARY
Ukrainian News Agency, Kyiv, Ukraine, September 6, 2005
4. UKRAINIAN PRESIDENTIAL SPOKESWOMAN SAYS TALKS HAVE
LED TO NO HIGH-PROFILE DISMISSALS
Inter TV, Kiev, in Ukrainian 1700 gmt 6 Sep 05
BBC Monitoring Service, UK, Tue, September 6, 2005
5. HOPE THAT YUSHCHENKO WILL SHAKE FREE OF POROSHENKO
COMMENTARY AND ANALYSIS: Inside Ukraine Private Newsletter
Kyiv, Ukraine, Wednesday, September 7, 2005
6. PARLIAMENT SPEAKER LYTVYN SAYS UKRAINE "SIGNIFICANTLY
WEAKER" SINCE PRESIDENT YUSHCHENKO TOOK POWER
TV 5 Kanal, Kiev, in Ukrainian 0705 gmt 6 Sep 05
BBC Monitoring Service, UK, in English, Tue, September 6, 2005
7. UKRAINIAN SPEAKER PREDICTS FURTHER DISCORD ON WTO BILLS
Associated Press (AP), Kiev, Ukraine, Tue, September 6, 2005
8. COMMUNISTS BLOCKING PARLIAMENT'S ROSTRUM TO DEMAND
FULL CONSIDERATION OF PROPOSAL TO INTRODUCE ZERO EXPORT
DUTY ON LIVE CATTLE AND 15% ON HIDE IN 2006 - WTO BILL
Ukrainian News Agency, Kyiv, Ukraine, September 6, 2005
9. RADA HARMONIZES SANITARY, VETERINARY AND PHYTOSANITARY
REGULATION OF FOOD MARKET WITH WTO STANDARDS
Ukrainian News Agency, Kyiv, Ukraine, Tue, September 6, 2005
10. RE-PRIVATIZATION OF NFP, AZOT SPLITS GOVERNMENT, SOCIETY
ANALYSIS: Roman Bryl, Ukraine Analyst
IntelliNews - Ukraine This Week
Kyiv, Ukraine, Monday, September 5, 2005
11. WORLDWIDE CHEMICAL LLC VICE PRESIDENT CALLS ON
UKRAINIAN AUTHORITIES TO SAFEGUARD INVESTORS RIGHTS
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 5, 2005
12. US INVESTOR OF AZOT TO APPEAL TO US CONGRESS
IntelliNews - Ukraine Today, Kyiv, Ukraine, Tue, September 6, 2005
13. GOVERNMENT OFFICIALS BROKERS TRUCE AT DISPUTED
UKRAINIAN CHEMICAL PLANT LUHANSK AZOT
Ukrayina TV, Donetsk, in Russian 1800 gmt 6 Sep 05
BBC Monitoring Service, UK, in English, September 6, 2005
14. POLISH MAGAZINE NAMES UKRAINE'S RICHEST BUSINESSMEN
UT1, Kiev, in Ukrainian 1800 gmt 6 Sep 05
BBC Monitoring Service, UK, in English, Tue, Sep 6, 2005
15. NEST HANNER TO INVEST USD 95 MILLION IN CONSTRUCTION
OF SHOPPING CENTER IN KYIV BY 2007
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 5, 2005
16. MAKITA CORP UNIT IN UKRAINE BEGINS OPERATIONS
Dow Jones Newswires, Washington, D.C., Tue, Sep 6, 2005
17. CARGILL BUYS TWO GRAIN ELEVATORS, TERMINAL IN SOUTH RUSSIA
Operates 75 grain elevators in Romania, Ukraine, Kazakhstan, Hungary, Russia
Dow Jones Newswires, London, UK, Tue, September 6, 2005
18. KRYVORIZHSTL METAL PLANT MOVES TO SECURE ABOLITION OF
ANTIDUMPING MEASURES AGAINST STEEL RODS WITH THE
UNITED STATES DEPT OF COMMERCE
Company hires US Washington law firm Aitken, Irvin, Berlin & Vrooman
Ukrainian News Agency, Kyiv, Ukraine, September 6, 2005
19. YUSHCHENKO TO ATTEND UN'S 60TH ANNIVERSARY IN U.S.
Ukrainian News Agency, Kyiv, Ukraine, Tue, September 6, 2005
20. UKRAINIAN FOREIGN MINISTER TO VISIT USA FOR TALKS WITH RICE
Interfax-Ukraine news agency, Kiev, in Russian 0947 gmt 6 Sep 05
BBC Monitoring Service, UK, in English, Tue, Sep 06, 2005
21. U.S. MEDIA INVESTOR RONALD LAUDER WANTS LARGER
STAKE IN UKRAINIAN TV CHANNEL ONE PLUS ONE
By Viktoriya Syumar, "One Plus One TV"
Zerkalo Nedeli, Kiev, in Russian 3 Sep 05; p 3
BBC Monitoring Service,UK, in English, Mon, Sep 05, 2005
22. U.S. SENATOR RICHARD LUGAR HOPES FOR JACKSON-VANIK
AMENDMENT FOR UKRAINE
New Europe, Athens, Greece, Mon, September 5, 2005
23. NEW PROGRAM TO STIMULATE PRODUCTION OF
UKRAINIAN AGRICULTURAL EQUIPMENT
By Ihor Yatsenko, FirsTnews, Kyiv, Ukraine, Tue, September 6, 2005
=============================================================
1. UKRAINE PRESIDENT YUSHCHENKO HOLDS CRISIS TALKS IN
EFFORT TO HEAL RIFT IN POLITICAL TEAM
By Tom Warner in Kiev, Financial Times
London, UK, Tue, September 7 2005
Ukraine President Viktor Yushchenko held crisis talks yesterday with his
prime minister and other top officials to try to avoid a damaging split of
his political team.
The talks with Yulia Tymoshenko, prime minister, Petro Poroshenko,
National Security Council secretary, and other top officials followed the
surprise resignation of Olexander Zinchenko, the president's chief of staff,
who on Monday accused Mr Poroshenko of corruption and interference in
the media and justice system.
But after almost 10 hours of meetings, it remained unclear whether the
participants had made progress in solving the long-simmering conflict
between Ms Tymoshenko and Mr Poroshenko, which was brought to a
head by Mr Zinchenko's accusations, or if the sides had merely broken
up to give themselves more time.
Mr Poroshenko said after the meeting that he had "very constructive" talks
with Ms Tymoshenko about how they could work together more effectively
and "consolidate" Mr Yushchenko's governing team.
Mr Yushchenko's spokeswoman said after the talks there was "no political
crisis" but only "particular crises within the team, which need to be
precisely diagnosed and treated".
Ms Tymoshenko made no immediate comments.
Mr Yushchenko has pressed the two rivals to run a joint bloc in
parliamentary elections next March, believing a split would only help the
opposition, but Mr Poroshenko and Ms Tymoshenko are believed to be
preparing to form separate blocs and run against each other.
The rift was also fuelled by a dispute that erupted last week over Ms
Tymoshenko's handling of the renationalisation of a majority stake in a
strategic metallurgy plant, Nikopol Ferroalloy.
The seriousness of the crisis was underlined when Mr Yushchenko announced
yesterday morning he was cancelling a planned trip to Poland, where he was
to take part in an economic forum this week.
Expectations either Ms Tymoshenko or Mr Poroshenko would resign were
fuelled when Vladislav Kaskiv, an adviser to Mr Yushchenko, told journalists
outside the presidential administration building where the meeting was being
held he expected an announcement of a top official's resignation. But Mr
Poroshenko left the talks looking confident, saying he had asked for an
inquiry into Mr Zinchenko's claims. -30-
=============================================================
2. OUR UKRAINE PEOPLE'S UNION CONSIDERS ACCUSATIONS
BY ZINCHENKO AIMED AT PURPOSEFUL PROVOCATION
"We warn all political powers that any cooperation with Oleksandr Zinchenko
will make their relations with the party impossible," the statement reads.
Ukrainian News Agency, Kyiv, Ukraine, Tue, September 6, 2005
KYIV - The Our Ukraine People's Union party believes that accusations
brought by former State Secretary Oleksandr Zinchenko are system-like
purposeful provocation. The party's press service reported this to Ukrainian
News, with reference to a joint meeting of the party and the party group at
the Cabinet of Ministers.
The Our Ukraine People's Union believes that the purpose behind
Zinchenko's accusations was to create a system crisis of authority in
Ukraine.
"We warn all political powers that any cooperation with Oleksandr
Zinchenko will make their relations with the party impossible," the
statement reads.
According to the party, Zinchenko has become an instrument in hands of
destructive powers, whose efforts are aimed at the split of the President's
team; and he put his own ambitions over the state interests. "Do not fall
for cheap tricks and orient at the people's President's and his party Our
Ukraine People's Union," the party calls on its electorate.
As Ukrainian News reported earlier, on Monday, September 5, Zinchenko
levied corruption charges against Secretary of the National Security and
Defense Council Petro Poroshenko and First Assistant to the President
Oleksandr Tretiakov and called on the president to dismiss them.
He also accused MP, deputy chairman of the Our Ukraine People's Union
council Mykola Martynenko of corruption. Besides, Zinchenko believes that
Our Ukraine People's Union party was created as a cover for using
administrative pressure.
Yuschenko accepted Zinchenko's resignation from the post of state
secretary on Saturday, September 3. -30-
=============================================================
3. PRESIDENT YUSHCHENKO APPOINTS IVAN VASIUNYK
AS ACTING STATE SECRETARY
Ukrainian News Agency, Kyiv, Ukraine, September 6, 2005
KYIV - President Viktor Yuschenko has appointed First Deputy State
Secretary Ivan Vasiunyk as acting State Secretary. The President issued
relevant order 1228/2005 on September 5 on appointment of Vasiunyk
acting State Secretary, a copy of which is available to Ukrainian News.
With his other order 1227/2005 of September 5 the President dismissed
Oleksandr Zinchenko from the post of state secretary.
As Ukrainian News reported earlier, Zinchenko tendered resignation from the
post of state secretary on September 3 and Yuschenko accepted it. Later on,
Zinchenko levied corruption charges against Secretary of the National
Security and Defense Council Petro Poroshenko and First Assistant to the
President Oleksandr Tretiakov and called on the president to dismiss them.
He also accused MP, deputy chairman of the Our Ukraine People's Union
council Mykola Martynenko of corruption. Besides, Zinchenko believes that
Our Ukraine People's Union party was created as a cover for using
administrative pressure. This March, Yuschenko appointed Vasiunyk first
deputy state secretary.
Vasiunyk, was elected as a parliamentary deputy in May 2002 from the list of
the Our Ukraine coalition (his number was 43). In March 2005, he was elected
as a member of the presidium of the Our Ukraine People's Union party's
council. -30- [The Action Ukraine Report Monitoring Service]
-----------------------------------------------------------------------------------------------------------
FOOTNOTE: We met with Ivan Vasiunyk last week in Kyiv. He is a long
time supporter and friend of the President. Vasiunyk worked in
Yushchenko's office when he was prime minister. EDITOR
=============================================================
4. UKRAINIAN PRESIDENTIAL SPOKESWOMAN SAYS TALKS HAVE
LED TO NO HIGH-PROFILE DISMISSALS
Inter TV, Kiev, in Ukrainian 1700 gmt 6 Sep 05
BBC Monitoring Service, UK, Tue, September 6, 2005
KYIV - Two consecutive meetings of top Ukrainian leaders today have led to
no high-profile dismissals, Ukrainian President Viktor Yushchenko's press
secretary Iryna Herashchenko has told Ukrainian television.
Speaking in a live TV appearance after the meeting of the National Security
and Defence Council, she insisted that it was a scheduled meeting and that
it was preceded by an "important, frank and tough conversation" in the
president's office. She acknowledged "friction" within the president's team
in the wake of State Secretary Oleksandr Zinchenko's resignation and the
corruption accusations he made, but ruled out political crisis.
She added that the council's meeting adopted a blueprint for reform of
law-enforcement agencies. The following is the text of a report by Ukrainian
Inter TV on 6 September:
[Correspondent] Iryna Herashchenko is here with us now. Iryna, could you
give us a more detailed account of how the president assesses the events
that are unfolding? What conclusions have been drawn?
[Herashchenko] First, I would like to note that there is no need to heat up
passions and that a planned meeting of the National Security and Defence
Council was held today, about which we had told the press before and the
agenda of which contained issues of reform of uniformed structures and
law-enforcement agencies. That was precisely what the meeting of the
National Security and Defence Council discussed today.
Indeed, this morning a meeting was held at the president's office with the
participation of this country's leaders, which was attended by the prime
minister of Ukraine [Yuliya Tymoshenko], the speaker of the Supreme
Council [Volodymyr Lytvyn], the secretary of the National Security and
Defence Council [Petro Poroshenko], as well as some high-ranking
government members and representatives of parliament.
The important, frank and tough conversation centred on the need to
optimize the work of all branches of power and also the need to
consolidate the action of the team in power.
The Ukrainian president demands that members of his team work for
the benefit of their country, and I stress the position that there is no
political crisis in Ukraine.
But some friction occurred within the team and certain situations have
surfaced. These situations should be resolved, undoubtedly, primarily
within the team and ultimately should put paid to.
During the meeting in the president's office, no personnel issues were
discussed, except the subject of the head of the Ukrainian presidential
secretariat. The person who will be appointed to the post will be named
shortly. It is a matter of hours or days.
[Correspondent] Iryna, what issues were raised at the meeting of the
National Security and Defence Council and what conclusions were made?
[Herashchenko] I would like to note that the main issue discussed at the
meeting of the National Security and Defence Council was the situation in
this country and also reform of law-enforcement bodies. A reform blueprint
was adopted. It is based on the defence of the citizen's constitutional
rights, not the defence of the state against the citizen.
Also, a very important decision was adopted on the setting up of a national
investigation service, which is to be given investigative functions and
certain units of the Prosecutor-General's Office.
But undoubtedly, such an important decision has to be taken after a law to
this effect has passed the Supreme Council of Ukraine, that is, parliament
is to get a bill, which members of parliament will discuss and debate. They
can support it or make their own proposals as to amendments. -30-
=============================================================
5. HOPE THAT YUSHCHENKO WILL SHAKE FREE OF POROSHENKO
COMMENTARY AND ANALYSIS
Inside Ukraine Private Newsletter
Kyiv, Ukraine, Wed, September 7, 2005
The Zinchenko resignation is being well received among the foreign
community in Ukraine...with the hope that it will shake Yuschenko free
of the Poroshenko, Martynenko, Tretiakov (financiers of the campaign
last year) control of Yuschenko.
Tretiakov controlled access to Viktor much like Medvechuk, and Petro
and Martynenko, as vice-chairmen of Nashe Ukraine, propped up
Bezmertny and controlled that 'Party' as their own private club...top
down control all the way...no grass roots building, no consensus
reaching, nothing but obeisance to them.
The best thing to happen everyone here is saying this week is for
Yushchenko to require Poroshenko and Tretiakovs resignation...and
let them go back to being businessmen and 'creating jobs'.
The President's chief of staff or office manager/scheduler should be
a man without business ties and obligations that could compromise
him. Ditto with NSDC Secretary, who should be a professional
coordinator, not a CEO of the Power Ministries.
Unfortunately for Petro, he moved too fast to grab control of the reins
of government, including arranging for sale of #1 TV station, Inter, to
Russian financiers Abramov and team (with token Ukrainian ownership
to be announced next month as Poroshenko's wife...with now Russia
based Khoroshovsky as token Chairman of Board. (he's the son-in-law
of Pustionvenko, Kuchma's ally and former government premier and
transportation minister, who forced owners of Ukrsotsbank some years
back to transfer their shares to his son-in-law (now handmaiden for
Abramov and Russians).
So, let's look at this resignation by Zinchenko as a heroic act, blowing
the whistle on Viktors overlooking or tolerating the corruption acts and
backstabbing against the Premier that these men have been doing.
=============================================================
6. PARLIAMENT SPEAKER LYTVYN SAYS UKRAINE "SIGNIFICANTLY
WEAKER" SINCE PRESIDENT YUSHCHENKO TOOK POWER
TV 5 Kanal, Kiev, in Ukrainian 0705 gmt 6 Sep 05
BBC Monitoring Service, UK, in English, Tue, September 6, 2005
KYIV - Parliament speaker Volodymyr Lytvyn has said that Ukraine has
become "significantly weaker" since President Viktor Yushchenko took
power after last year's Orange Revolution.
In a speech to MPs, government members and official guests at the opening
of parliament after the summer recess, which was carried live on Ukrainian
TV, Lytvyn said that the country is suffering from political instability and
economic stagnation, and has made little progress in foreign policy.
He said a crisis in state management could lead to a new redistribution of
property among "clans and oligarchs" and warned that Ukraine would not
benefit from a chill in relations with Russia. Lytvyn also criticized
Yushchenko's personnel policy and accused the authorities of seeking to
impose external control over parliament. The following is an excerpt from
Lytvyn's speech which was broadcast live by 5 Kanal TV on 6 September:
Esteemed MPs, members of the government, guests of parliament.
With the opening of the 8th session of parliament, a new political season is
in effect starting in Ukraine, which will end with the parliament elections
in March 2006. This will be the most responsible stage in our contemporary
history and the activity of the Supreme Council.
In its turn, the Supreme Council should, in the first place, complete as
quickly as possible its ascent to the position appropriate to the highest
representative body of the people, demonstrate every day its ability to
maintain a constructive dialogue with the president and Cabinet of Ministers
for resolving the problems of society, uphold without compromise the
interests of the Ukrainian people.
The Supreme Council should, in the FIRST place, responsibly represent the
people and society, and only then the authorities.
SECOND, it should ensure the implementation of state scenarios for the
development of events, and if necessary work them out itself, preventing any
other plans being imposed on the country - either from abroad, or by
parties, groups or clans, which, in some cases, may amount to the same
thing.
Ukraine has become weaker
Ukraine needs predictability and positive results and not pursuit of
doctrines, populism and convulsions. A necessary precondition for this is an
objective assessment of what is happening here. Yes, there are some positive
shoots that are growing, albeit slowly. People have retained their belief in
the possibility and the ability of the authorities to realize what was
promised.
However, we have to stop telling lies - at least to ourselves, refrain from
substituting mass propaganda for real policy, stop manipulating statistics
and misinforming society - from whatever side.
What is happening in Ukraine can be encapsulated in a formula. If you take
the ugly past of yesterday, about which so much is said, and add to it the
bright future, about which we talk so unanimously, you get the present. In
other words, everything may seem to be done in a new way, but mostly it
turns out the way it was under [former President Leonid] Kuchma.
The reality is this - due to various subjective and objective factors,
Ukraine has become significantly weaker, even in comparison with the
difficult year 2004.
The characteristic features of this are: political instability, mainly due
to the generation of splits, centrifugal processes, confrontations and
conflicts; economic stagnation, which threatens to grow into an economic
crisis; lack of a major breakthrough in foreign policy, despite the good
prospects; the obscure moral and psychological climate in society.
Of course, parliament bears its share of responsibility for all this. It is
also responsible for ensuring the country gets over this weakness as fast as
possible and with minimum losses, achieves large-scale transformations with
tangible positive results, reinforces social standards with a well thought
out economic policy.
New oligarchic "families" may appear
For this, it is necessary to concentrate on resolving the following key
tasks.
FIRST, to work out a national development strategy, decisively rejecting a
policy based on schemes, jumping from topic to topic, making Khrushchev-like
promises - especially ahead of elections. Society requires and is ready for
a serious discussion - in the first place, about people's standard of living
and security.
It is especially important to keep to this line in work on the 2006 state
budget, and also in a timely and appropriately firm reaction to the
situation in the energy, agricultural-food, money-credit, export-import and
other sectors, which have today become urgent problems for national
security.
SECOND, to overcome the crisis of management and regain full control of
the situation; to concentrate on the internal arrangement of the country; to
realize in policy what corresponds to the social mood; to concentrate on the
politics of possibilities; to decisively prevent attempts to redistribute
property in the interest of clans and oligarchs.
It is necessary to speak separately and with emphasis about attempts to
remonopolize the media. It is a fact that the task of cleansing the country
of oligarchs, which we spoke a lot about, may end with the appearance of new
families at the expense of the old, and in the end at the expense of people.
It is necessary to give people the chance to take the destiny of the country
in their hands. Ukraine should become a country of honest people.
Foreign policy driven by desire for approval
THIRD, to refrain from attempts to direct our actions mainly towards an
external format in order to win approval and to declare how democratic we
are, instead of creating the necessary civilizational foundation within the
country. The enthusiasm for showing off friendly relations towards Ukraine
should match our national interests.
It is necessary to maintain pragmatic, friendly relations with the centres
of strength and influence. These are primarily the USA and EU, and our
neighbouring countries.
It is necessary to be aware that the formalization and cooling of relations
with Russia does not strengthen Ukraine - nor does the confirmation by our
behaviour of the thesis that being neighbours does not always mean being
close, or the desire to join the exporters of democracy.
There is one more conclusion. It is necessary to make interparliamentary
ties closer. When politicians temporarily have difficulty finding a common
language, parliamentarians should speak more.
FOURTH, to build a policy on the basis of reconciliation, understanding and
compromise. [Passage omitted: more on this]
FIFTH, to enhance parliament's attention to personnel policy and personnel
work, taking account of the president's position on the need for a serious
personnel review. It seems that we have not proceeded far from the middle
ages on this issue.
Earlier, the winners won as a prize a territory and its population, now it
is the right to run territories and their economy and people. The ability to
shout a slogan at the right time should not serve as grounds for being
appointed to some position.
One more thing, in the past it wasn't possible to occupy a post without
[Communist] party membership. Now officials are saying with increasing
frequency that if they don't join a party [presumably, referring to
pro-presidential Our Ukraine People's Union] they don't have a future.
[Passage omitted: more on this]
Authorities seek to control parliament
Esteemed MPs, like their predecessors, the current authorities are seeking
to help the Supreme Council to organize its work better. This could be, and
should be, welcomed - if there was not visible behind it - then and now - an
irrepressible desire to maintain external control over the highest
representative body of the people. That sort of care is impermissible.
I recall that throughout the civilized world, to which we wish to belong, it
is the parliamentary majority that forms the government and not the other
way round. In principle, if the demands continue, it will be possible to put
to the vote the question of whether the Supreme Council supports the
proposal to form a majority - to put the principle to the vote. But this
will be viewed as a kind of vote of confidence.
I will say further that the issue of forming a majority and raising the
threshold for entering parliament - it seems to me, and this is the result
of expert assessments by scholars and politicians, that these are two
mutually exclusive problems, and what's more they do not interest people
at all.
So it will be better for us to work, consulting and coordinating positions
beforehand, and not look for grounds for disputes - including through the
exchange of statements, and only go to the parliament or public when the
positions are agreed. Otherwise, the proposed innovations should be
postponed until better times. There has been enough manipulation. They do
not produce anything except for reducing the authority of the authorities as
a whole and the authority of Ukraine. [Passage omitted: more on this]
Calls for constructive legislative activity
I think that the Supreme Council should do its utmost to guarantee that
the election campaign and the 2006 election are fair and transparent.
It is no less important to ensure the constructive legislative activity of
parliament, which will return to it the high level of trust that it
deservedly attained in November-December 2004.
To balance legislative and political functions, and raise them to the
necessary level, to demonstrate in practice civilized relations with the
president and Cabinet of Ministers, a mutually-responsible policy that is
understandable to people - this looks like the main direction for the
conduct of the Supreme Council today and tomorrow. I do not see an
alternative.
Thank you for your attention. -30-
=============================================================
7. UKRAINIAN SPEAKER PREDICTS FURTHER DISCORD ON WTO BILLS
Associated Press (AP), Kiev, Ukraine, Tue, September 6, 2005
KIEV - Lawmakers returned to parliament Tuesday for the opening of the
autumn session, saying that the discord that erupted into fistfights earlier
this year had not dissipated. Legislators opened the session with a moment
of silence in memory of the victims of Hurricane Katrina.
Parliament Speaker Volodymyr Lytvyn has promised to bring up for a vote
the remaining legislation this ex-Soviet republic needs to adopt to join the
World Trade Organization.
President Viktor Yushchenko has made WTO membership a priority and is
determined to usher his nation of 48 million into the organization before
year's end - and, more crucially, before neighboring Russia. If Russia joins
first, Moscow could impose a whole new set of difficult accession
requirements on Ukraine.
The reform legislation, however, is deeply unpopular with the Communists,
who repeatedly seized parliament's tribunal in July to block voting on the
issue. The 450-member parliament adopted a number of key laws last
session, including one on copyright protection, but 10 others were held
over for this session.
Communist leader Petro Symonenko said in televised remarks that his
party would continue to fight the other WTO bills, which he said would hurt
Ukrainian businesses.
Lytvyn said that he wouldn't be surprised if members of the Communist Party
again tried to seize the tribunal this week. "This session will be very
strained," Lytvyn said on Ukraine's Channel 5, also noting that it came on
the eve of next spring's parliamentary elections. Those elections will take
on added importance because of constitutional reforms due to take effect by
the end of the year.
The reforms will hand many presidential powers to parliament, which will be
given the right to approve candidates for the prime minister's job as well
as other key positions, such as defense and foreign ministers. -30-
=============================================================
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=============================================================
8. COMMUNISTS BLOCKING PARLIAMENT'S ROSTRUM TO DEMAND
FULL CONSIDERATION OF PROPOSAL TO INTRODUCE ZERO EXPORT
DUTY ON LIVE CATTLE AND 15% ON HIDE IN 2006 - WTO BILL
Ukrainian News Agency, Kyiv, Ukraine, September 6, 2005
KYIV - Communists are blocking the parliament's rostrum to press their
demand for consideration of a draft law on introduction of a zero rate of
export duty on live cattle and a 15% export duty on hide in 2006 via the
full procedure for considering draft laws rather than the short procedure.
About 15 representatives of the Communist Party faction blocked the
parliamentary rostrum and switched on a siren via a megaphone, thus
prevent the conduct of the parliament's session.
Before this, Deputy Parliament Speaker Adam Martyniuk, who is presiding
over the parliamentary session, called a vote on a proposal that the draft
law on changing the export duty on live cattle and hide be considered via
the full procedure instead of the short procedure, as stipulated on the
agenda of parliament.
This proposal failed to secure the required number of votes; as a result,
the draft law was to be considered via the short procedure (which involves
consideration of a draft law within a period of 15 minutes) instead of the
full procedure (which involves debating a draft law for 45 minutes).
The Cabinet of Ministers believes that introduction of such export duties
will facilitate export of goods that have undergone high degrees of
processing and facilitate generation of revenues into the state budget while
simultaneously preventing businesses from avoiding payment of duties.
Implementation of the draft law does not require additional material and
other expenditures.
Moreover, its implementation will have no negative effect on the state
budget because 95.8% of hide exports go to Moldova without payment of
export duty under the terms of a free trade agreement.
Adoption of the draft law will also facilitate acceleration of the
negotiations on admission of Ukraine into the World Trade Organization.
As Ukrainian News earlier reported, the Cabinet of Ministers proposed in
June that the parliament introduce a zero rate of export duty for live
cattle and a 15% rate for hide from 2006.
The Cabinet of Ministers proposed in late May that the parliament adopt a
package of 22 draft laws necessary for Ukraine's admission into the World
Trade Organization. They included a draft law that provided for changing the
rate of the export duty on live cattle and hide. -30-
=============================================================
9. RADA HARMONIZES SANITARY, VETERINARY AND PHYTOSANITARY
REGULATION OF FOOD MARKET WITH WTO STANDARDS
Ukrainian News Agency, Kyiv, Ukraine, Tue, September 6, 2005
KYIV - The Verkhovna Rada has harmonized the sanitary, veterinary and
phytosanitary regulation of the food market in accordance with the standards
of the World Trade Organization (WTO).
The bill "On Amending the Law of Ukraine "On the Quality and Safety of Food
Products and Food Raw Material" was supported by 250 deputies, given the
minimum of 226 votes required for passage.
An explanatory note says that the proposed bill regulates relations between
government executive agencies, sellers (suppliers) and consumers of food
products and it outlines the legal procedure aimed at ensuring safety and
quality of food products, which are produced, in circulation, imported and
exported.
Its enactment will make it possible to ensure a high level of protection,
safety of public health, and also protection of consumers, and would ensure
transparent and rational legislative regulation; give producers and the
suppliers the main responsibility for quality and safety of food products;
will ensure competitiveness of the industry and will expand export; will
ensure free movement of goods within the framework of a joint market.
As Ukrainian News earlier reported, the bill was authored by the Cabinet of
Ministers. President Viktor Yuschenko had earlier criticized the Cabinet for
moving too slowly in preparing Ukraine for WTO membership. Ukraine wants
to join WTO by the end of 2005. -30-
==============================================================
10. RE-PRIVATIZATION OF NFP, AZOT SPLITS GOVERNMENT, SOCIETY
ANALYSIS: Roman Bryl, Ukraine Analyst
IntelliNews - Ukraine This Week
Kyiv, Ukraine, Monday, September 5, 2005
Government suddenly takes rough action to return NFP and Azot into state
ownership
Government's attempts to return two large industrial enterprises Nikopol
Ferroalloy Plant (NFP) and Azot (Severodenetsk) into state ownership
resulted last week in a rigid face-off between the current owners of the
companies and representatives of the state.
Thousands of workers of both enterprises gathered in front of their plants
protesting against changing the top-management. In their turn, state
authorities are sure about legality of their actions and support attempts of
armed seizure of enterprises by the new managers.
The points of view of society and government officials are split regarding
the legality of management replacement. Some think government is right about
trying to return to the state strategic enterprises that were sold to
private investors through corrupt schemes. Others are sure that the standoff
is nothing but savage partition of property with the support of government.
Supreme commercial court makes final decision declaring sale of
NFP's 50%+1 stake illegal
On Aug 26, 2005 supreme commercial court made a final decision declaring
that the sale of NFP's 50%+1 stake to finance&industrial consortium
Prydniprovya is illegal.
To remind you, in May 2003 state property fund (SPF) sold 25% of NFP to
Prydniprovya for UAH 205mn (about USD 38mn) and in Aug 2004 another 25%+1
for UAH 205.5mn (about USD 38.1mn). Interpipe Corp. founded by ex-president
Leonid Kuchma's son-in-law billionaire Victor Pinchuk controls Prydniprovya
consortium.
Until the court made its decision, Interpipe had 73% in NFP, and another 23%
was under control of Privat Group. You can find more detailed information
about the conflict over the plant at the link below.
http://www.securities.com/doc.html?pc=RU&doc_id=76934519 - IntelliNews CIS
Sector Updates, May 16, 2005; "Interpipe, Privat Clash for 11% of World
Ferroalloy Market".
Shareholder meeting (that some consider to be illegal) appoints new
management of NFP
Starting from Aug 30, 2005 a group of NFP employees held strikes. They
protested against the shareholder meeting that was initiated by Privat group
and took place the same day in Ordzhonikidze (Dnipropetrovsk region). Taking
part in the meeting was deputy industrial policy minister Sergey Grischenko,
who was registered as a representative of SPF, possessing 50+1% stake in
NFP. Meeting participants assigned Grischenko as head of the supervisory
board of NFP.
Also, Mykola Nadtochenko was appointed the company's president. In his turn,
Victor Pinchuk declared that the shareholder meeting was illegal. He claimed
Grischenko had no right to represent state authorities because at the moment
the 50%+1 stake was in possession of Prydniprovya. Ukrsotsbank, holder of
50%+1 stake in NFP confirmed that at the time of the shareholder meeting,
shares of the plant were still on the Prydniprovya account.
SPF head confirms illegality of recent decisions on NFP
Suddenly, SPF head Valentyna Semenyuk in a TV interview also questioned
the legality of the Ordzhonikidze shareholder meeting, adding she is under
pressure from PM Yulia Timoshenko. Semenyuk declared she was not able
as a head of SPF to decide who the new management of NFP should be.
Also, Semenyuk confirmed the SPF representative had no right to partake in
the meeting, having no documents confirming the state's 50%+1 ownership of
NFP. On the day of the meeting, Grischenko had no such documents, Semenyuk
underlined. The same day, Nikopol city court claimed illegal all decisions
made during the meeting. Earlier, Feodosia city court (Crimea) imposed a ban
on holding an NFP shareholder meeting on Aug 30 and Sep 9,15,22, and 29 in
Ordzhonikidze.
New managers try to enter NFP premises using armed people
Nevertheless, starting from Aug 31 Sergey Grischenko with support of private
security firms and militia undertook several attempts to enter the plant's
territory. However, he was blocked by 5,000 angry employees. Prior to the
assault, the entrance was blocked by heavy lorries loaded by stones and
barbed wire. Still, he did not manage to reach NFP office.
The conflict caused president Victor Yuschenko to interfere in the
situation. On Aug 2, the Ukrainian president ordered general prosecutor's
office and ministry of justice to return the NFP stake into state ownership
in a legal way within the next 3 days. Before that, he had telephone
conversations with PM, minister of industrial policy, general prosecutor,
justice minister, and SPF chairman, accusing them of inability to guarantee
execution of supreme commercial court's decision.
Privat Group takes active part in NFP re-privatization We suppose the NFP
stake will be returned in state property shortly. It can happen even on
Monday, Sep 5. But we cannot predict in what way the new management will
reach the office of the company, blocked by workers. We do not exclude the
possibility militia might use force to disperse the demonstrators. The
plant's employees declared recently they would go on strike, if a management
change takes place.
In this hostile face-off, we should draw your attention to the fact of
active participation of Dnipropetrivsk Privat Group, one of the Interpipe's
main rivals. It makes some experts consider the NFP case is nothing but
property redistribution, lobbied through by Privat. The latter is one of the
major bidders for NFP if the repeated tender for selling a 50%+1 stake takes
place.
At the moment, SPF chairman stands against repeating the possible tender,
declaring the controlling stake should stay in state property. In her turn,
PM Timoshenko informed on Sep 2 that selling NFP would bring to the state
budget an extra USD 1bn. To note, NFP is the world's second largest producer
of manganese ferroalloys.
Chemical major Azot changes management with support of armed men
Meanwhile, on Sep 2, armed men seized the office of another major industrial
enterprise, chemical producer Azot (Severodonetsk). The men were headed by
Azot's ex-CEO Volodymyr Lyakhov, who declared the enterprise had been
returned into state ownership and he assumed management over the company.
The move was taken under decision of Kyiv Pechersk district court declaring
illegal the creation "closed corporation Azot" (CC Azot). The charter
documents were deemed illegal in Mar 2005. In Dec 2004, SPF and US
Worldwide Chemical LLC created on the basis of state enterprise 'Association
Azot" (SEA Azot) a new structure CC "Severodonetsk association Azot" with
USD 192mn authorized capital.
Worldwide Chemical owned 60% of CC Azot and SPF owned another 40%
stake.US businessman of Ukrainian origin Alex Rovt, the founder and
president of chemical company IBE Trade, controls 85% of Worldwide
Chemical.
Preliminary price of 50% stake in Azot set at USD 2bn
Before the deal, Volodymyr Lyakhov headed SEA Azot. On Aug 29 industrial
policy ministry by its order restored Lyakhov as head of SEA Azot due to
Pechersk court's decision. The first attempts to return Azot into state
ownership were made in May 2005. But Severodonetsk city court forbade any
change of management due to the restructuring procedure the company was
going through.
Only on Aug 25 Lugansk commercial court announced the end of restructuring,
which caused minister of justice Roman Zvarych to initiate management
change. He also ruled that the company should be returned to the state. Azot
Employees blocked the new managers in their office, not letting them out.
Mayor of Severodonetsk, and exiled president of the enterprise Alexey
Kunchenko supported employees, accusing the government of tyranny.
The private owner of Azot Alex Rovt should come to Ukraine on Sep 5 to
appeal to government. Rovt even declared he would use all his influence in
the US to discredit the new Ukrainian authorities. The preliminary price of
the 50% stake of Azot makes up USD 2bn, a ministry of industrial policy
official declared recently.
Authorities rushe to fill depleted state budget by controversial
re-privatization
Controversial actions on re-privatization of NFP and Azot can be explained
by government hasting to attract extra money into the state budget.
According to a high-ranking state official we spoke to, there is evident
shortage of funds in the budget that makes it difficult for the government
to continue funding expensive social obligations.
Because international donors do not provide the Ukrainian government with
sufficient financial assistance, government needs to find funds on its own.
Indeed, we can confirm there are problems with state budget execution. All
in all, the latest events do nothing to improve the country's investment
attractiveness. They only do a lot to ruin it. -30-
=============================================================
11. WORLDWIDE CHEMICAL LLC VICE PRESIDENT CALLS ON
UKRAINIAN AUTHORITIES TO SAFEGUARD INVESTORS RIGHTS
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 5, 2005
KYIV - James William Grant, vice president of Worldwide Chemical LLC, a
company that created closed JSC Siverskodonetsk Azot Association together
with the State Property Fund of Ukraine, calls on the Ukrainian authorities
to provide guarantees for the rights of investors. He voiced his call during
a press conference in Kyiv.
"I hope Ukraine will find the way out of this situation," he said. Grant
further said that embassies in the United States and Ukraine will also seek
solution for the conflict.
"We are sending a statement to members of the Congress, President Bush,
Vice President Cheney, and to the Congress leaders, of course, with respect
to the current situation," he said. Grant added that it is a crucial test in
relations with Ukraine.
The vice president went on saying that President Viktor Yuschenko will be
asked many questions about the Siverskodonetsk Azot Association during
his visit to the U.S.
As Ukrainian News earlier reported, a group of armed men seized the
administrative building of the Siverskodonetsk Azot Association on September
2, after which about 300 employees of the company started protesting near
the administrative building against a court decision that cancelled the
creation of CJSC.
The Cabinet of Ministers ordered the Ministry of Justice and the Ministry of
Industrial Policy in August to ensure implementation of the ruling of
Pecherskyi District Court of Kyiv on cancellation of the creation of CJSC
Siverskodonetsk Azot Association.
The Cabinet also instructed the State Property Fund to decide on
privatization of the state industrial enterprise Association Azot through an
open competition within three days of the execution of the ruling of
Pecherskyi District Court.
On June 10, Kyiv Court of Appeals rejected the Siverskodonetsk Azot
Association CJSC's appeal against the district court ruling of March 17 that
declared the company's founding documents and registration invalid.
The SPF and Worldwide Chemical LLC created CJSC Siverskodonetsk Azot
Association with a statutory capital of UAH 1,056.7 million on December 24,
2004. The shares of Azot were divided into 60% and 40% for Worldwide
Chemical LLC and SPF, respectively. American businessman of Ukrainian
origin Alex Rovt, who is the founder and president of the IBE Trade chemical
company, controls 85% of Worldwide Chemical LLC. -30-
=============================================================
12. US INVESTOR OF AZOT TO APPEAL TO US CONGRESS
IntelliNews - Ukraine Today, Kyiv, Ukraine, Tue, September 6, 2005
KYIV - American investor of re-privatized last week chemical enterprise Azot
(Severodonetsk) Alex Rovt intends to appeal to US congress so that measures
against Ukrainian government are taken. Rovt prepared a special petition
that would be distributed among congressmen soon.
The situation around Azot will negatively influence the dynamics of US
investment in Ukraine , Rovt declared during a press conference in Kyiv on
Sep 5.
Rovt together with 25 US congressmen signed an open letter to Ukrainian
president Victor Yuschenko demanding his interference in Azot case. To
remind you On Aug 2 armed men seized the office of another big industrial
enterprise Azot (Severodonestk). Ex-director of Azot Volodymyr Lyakhov
headed the men.
This happened after a decision of Kyiv Pechersk district court that declared
illegal the creation "closed corporation Azot" (CC Azot). In March 2005 Kyiv
Pechersk district court decided to see whether the creation of CC Azot was
illegal.
In December 2004 SPF and US Worldwide Chemical LLC created on the basis
of the state enterprise 'Association Azot" (SEA Azot) a new structure CC
Severodonetsk association Azot with USD 192mn of authorized capital.
Worldwide Chemical owned 60% of CC Azot and SPF owned another 40%
stake.
US businessman of Ukrainian origin Alex Rovt who is the founder and the
president of chemical company IBE Trade controls 85% of Worldwide
Chemical. -30-
=============================================================
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=============================================================
13. GOVERNMENT OFFICIALS BROKERS TRUCE AT DISPUTED
UKRAINIAN CHEMICAL PLANT LUHANSK AZOT
Ukrayina TV, Donetsk, in Russian 1800 gmt 6 Sep 05
BBC Monitoring Service, UK, in English, September 6, 2005
DONETSK - [Presenter] The Ukrainian president [Viktor Yushchenko] has
intervened in the conflict at the Luhansk Azot plant [in Severodonetsk].
Today State Property Fund head Valentyna Semenyuk and Industrial Policy
Minister Volodymyr Shandra arrived in Donetsk at the president's request.
An agreement has been reached: the previous position that had existed at the
plant before it was blocked by new management will be retained. This will
continue until a final ruling has been issued by Ukraine's Supreme Economic
Court.
Earlier, representatives of the US company that has invested in the company
[Worldwide Chemical LLC] said that if they lost in the Supreme Economic
Court, they intended to file suits in European and American courts.
[Semenyuk, addressing plant's workers] Politicians, owners and
shareholders - only a dictatorship of the law can reconcile the different
sides. If everyone sticks to the law, there won't be any actions of this
kind. I think that the Supreme Court's ruling will put an end to the present
situation.
[Presenter] In the evening the plant's employees were able to return to
work. Private security guards had abandoned the plant's management and
its own security guards had returned. -30-
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14. POLISH MAGAZINE NAMES UKRAINE'S RICHEST BUSINESSMEN
UT1, Kiev, in Ukrainian 1800 gmt 6 Sep 05
BBC Monitoring Service, UK, in English, Tue, Sep 6, 2005
Seven Ukrainian businessmen have been mentioned in a list of the 100
richest people of Central and Eastern Europe for 2005 published by the
Polish magazine Wprost.
Among the Ukrainians, the highest 12th position belongs to a shareholder
of Pryvatbank, Ihor Kolomoyskyy, who is worth 2.8bn dollars.
A shareholder of the Industrial Union of Donbass, Serhiy Taruta, holds the
13th position with his 2.4bn dollars.
[Donetsk-based businessman] Rinat Akhmetov, who is worth 2.1bn dollars,
took the 15th position.
[Former President Kuchma's son-in-law] Viktor Pinchuk holds the 27th
position with his 1.5bn dollars.
The owner of the Aval bank, Fedir Shpyh, worth 800m dollars, took the 51st
position on the list.
The owner of Ukrsibbank and 650m dollars, Oleksandr Yaroslavskyy, got
the 62nd position.
Finally, the 95th position belongs to National Security and Defence Council
Secretary Petro Poroshenko, whose capital is worth 350m dollars.
The first position in the list was given to Russian businessman Roman
Abramovich, who is worth 15bn dollars. -30-
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15. NEST HANNER TO INVEST USD 95 MILLION IN CONSTRUCTION
OF SHOPPING CENTER IN KYIV BY 2007
Ukrainian News Agency, Kyiv, Ukraine, Mon, September 5, 2005
KYIV - The Nest Hanner company intends to invest USD 95 million in
construction of a shopping center on Sports Square (in front of the
Olympiiskyi national sports complex) in Kyiv by the year 2007.
Representatives of the company disclosed this to Ukrainian News.
According to the plan of the company, which acquired the construction
project from another investor company, construction of the center will start
in September. The company plans to ready the center for operation in January
2007 and open it during the February-March period of 2007. The shopping
center will have an area of 106,000 square meters.
The ground (underground) level of the shopping center, which will be
connected with exit from the Respublykanska Stadion subway station, will be
occupied by a food supermarket. Clothes, shoe, and souvenir shops will
occupy the first and second floors; the third and fourth floors will be
entertainment zones, including a film theater. Over 150 shops, cafes, and
restaurants are expected to be located in the complex.
The food supermarket will have an area of 4,050 square meters, commercial
space will have an area of 17,500 square meters, anchor space (the main
areas for attracting buyers) for lessees will have an area of 5,300 square
meters, cafes and restaurants will have an area of 3,660 meters, the film
theater will have an area of 2,750 square meters, the entertainment zones
will have an area of 4,500 square meters, while office space will occupy an
area of 4,000 square meters.
Moreover, the company will build a multilevel parking lot with an area of
40,500 square meters and a capacity of 1,250 automobiles.
Specialists from the companies Hest and Lithuania's Hanner, whose
enterprises own the project, are participating in the developing the concept
for the shopping center.
The Benoy architectural bureau (Great Britain) and Jerde (united States)
also participated in the development of the concept. Experts with the French
company, ATN, who provide consultations to the UEFA, have also evaluated
the design and concluded that construction of the center will not have a
negative effect on passenger flows in the area of the national stadium
before and after soccer matches.
The company has 12 possible names for the shopping center. The expenditures
on construction of the shopping center are expected to be recouped in 7-10
years.
The company believes that construction of the shopping center will conclude
the transformation of the Chervonoarmiiska Street (Velyka Vasylkivska
Street) into a commercial street.
The Nest Hanner company plans to implement two more projects in Kyiv,
bringing its investments to USD 500 million. The Nest company implements
projects in the area of commercial real estate. Hanner is implementing a
real-estate project in Ukraine for the first time. -30-
=============================================================
16. MAKITA CORP UNIT IN UKRAINE BEGINS OPERATIONS
Dow Jones Newswires, Washington, D.C., Tue, Sep 6, 2005
-
WASHINGTON - Makita Corp. (MKTAY) said Tuesday its recently established
sales unit in Ukraine, Makita Ukraine LLC, will begin operations this month,
according to a document filed with the Securities and Exchange Commission.
In January 2004, the Makita Group began selling power tools and providing
after-sales service in Ukraine through the Ukrainian branch of its Austrian
unit, Makita Werkzeug Gesellschaft m.b.H.
However, in view of the expansion of the electric power tool producer's
sales in Ukraine, the group has decided to strengthen its sales and
after-service capabilities through the commencement of operations of the
new unit based in Ukraine.
Following the establishment of its Ukrainian unit, Makita now has 41 units
outside Japan, with 23 of these located in the European region.
(By Chad Clinton, Dow Jones Newswires; 202-862-1349;
chad.clinton@dowjones.com) -30-
==============================================================
17. CARGILL BUYS TWO GRAIN ELEVATORS, TERMINAL IN SOUTH RUSSIA
Operates 75 grain elevators in Romania, Ukraine, Kazakhstan, Hungary, Russia
Dow Jones Newswires, London, UK, Tue, September 6, 2005
LONDON -- Cargill Inc. (CRG.XX) has purchased two grain elevators and a
river import/export terminal in southern Russia from the Russian firm
Rusagro, Cargill announced Tuesday. The two grain elevators are currently
operating in the Krasnodar region, while the terminal is in Rostov, a brand
new facility on the River Don, the firm said.
The deal involves the transfer of approximately 340 workers in the elevators
and 70 employees at the Rostov terminal to Cargill. "We have decided to
concentrate on our food processing activities", says Vadim Moshkovich,
general director of Rusagro.
Cargill has over $300 million invested in the Russian agricultural and food
processing sectors. Cargill Russia currently employs 954 people, who are
nearly all Russian nationals, Cargill reports.
For the region, Cargill along with its joint venture partners now own and
operate 75 grain elevators in Romania, Ukraine, Kazakhstan, Hungary and
Russia, representing some 2 million metric tons of storage capacity, said
the firm. (By Lisa Kallal; Dow Jones Newswires; (4420) 7842 9415;
lisa.kallal@dowjones.com) -30-
=============================================================
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=============================================================
18. KRYVORIZHSTL METAL PLANT MOVES TO SECURE ABOLITION OF
ANTIDUMPING MEASURES AGAINST STEEL RODS WITH THE
UNITED STATES DEPT OF COMMERCE
Company hires US Washington law firm Aitken, Irvin, Berlin & Vrooman
Ukrainian News Agency, Kyiv, Ukraine, September 6, 2005
KYIV - The Kryvorizhstal ore mining and metallurgical plant (Dnipropetrovsk
region) intends to secure abolition of the antidumping measures against
steel rods in the United States. Kryvorizhstal announced this in a
statement, a text of which Ukrainian News obtained.
Among other things, the plant intends to file with the United States
Department of Commerce an application for an administrative review of
the existing sanctions in order to facilitate resumption of deliveries of
steel rods.
To achieve this goal, Kryvorizhstal has hired the Aitken, Irvin, Berlin &
Vrooman law firm, which represents the interests of Ukrainian
exporter-enterprises in antidumping investigations in the United States,
to participate in the process of review of the sanctions. Kryvorizhstal is
presently preparing for conduct of a preliminary antidumping audit.
In October 2002, the United States completed an antidumping investigation
into importation of steel rods from Ukraine and imposed an additional import
duty of 116.3%. Kryvorizhstal presently does not export its products to the
United States.
As Ukrainian News earlier reported, Kryvorizhstal asked the Cabinet of
Ministers in May to facilitate resumption of export of Ukrainian iron rod
and steel reinforcement bars to the United States and Canada.
Kryvorizhstal is the largest producer of rolled steel in Ukraine, and it
specializes in the production of elongated rolled products, including steel
reinforcement bars and iron rods. -30-
============================================================
19. YUSHCHENKO TO ATTEND UN'S 60TH ANNIVERSARY IN U.S.
Ukrainian News Agency, Kyiv, Ukraine, Tue, September 6, 2005
KYIV - President Viktor Yuschenko is going to pay a visit to the United
States during September 13-18 to attend festivities marking the 60th
anniversary of the United Nations Organization. Ukrainian News learned this
from the presidential press service.
Foreign Minister Borys Tarasiuk said there is going to be a tight schedule
for Yuschenko's stay in New York as it will include meetings with the heads
of state and government of the countries whose delegations will attend the
festivities.
During the summit Yuschenko is to speak out at a plenary meeting of the UN
General Assembly, Foreign Ministry's spokesman Vasyl Filipchuk reported at a
briefing. The president is scheduled to meet with UN Secretary General Kofi
Annan, as well as with politicians, businessmen and the public.
When asked by Ukrainian News whether the President will meet with U.S.
President George Bush, Filipchuk said that Yuschenko will take part in joint
events, but a separate meeting is not planned. "We have not yet scheduled a
separate bilateral meeting," Filipchuk said.
According to him, during this visit Tarasiuk will meet with heads of foreign
ministries of other countries and will take part in general political
discussion during the session.
Filipchuk noted a scheduled meeting with U.S. Secretary of State Condoleezza
Rice and planned meeting of Ukraine-EU Troika in the foreign ministers'
session.
According to Filipchuk, the Ukrainian side is taking active part in drawing
up a declaration to be signed summarizing the UN summit.
He said that the declaration will be comprehensive and called it the UN road
map in the 21st century.
Filipchuk said that Ukraine submitted two additional initiatives, which it
wants to be put up on agenda of the UN General Assembly's session.
These are a joint with GUAM draft resolution on long-lasting armed conflicts
in the Black-Sea and South-Caucasian region and their consequences for
the world peace, security and development, and an initiative of events
commemorating 20 years since the Chornobyl NPP accident.
Filipchuk said that special attention for Ukraine plays the reformation of
the UN Security Council, in which it strives for establishment of an
additional place for the representative of East-European region countries.
"For us it is especially important for any variant of UN Security Council
reform to envisage additional temporary place for the East-European
regional group," Filipchuk said.
As Ukrainian News earlier reported, Yuschenko was on an official visit to
the US April 3 through 7, during which he addressed the US Congress with the
request to support Ukraine's entry to the World Trade Organization in 2005,
grant Ukraine a market economy status by September, repeal the Jackson-Vanik
Amendment, and assist in European integration. -30-
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20. UKRAINIAN FOREIGN MINISTER TO VISIT USA FOR TALKS WITH RICE
Interfax-Ukraine news agency, Kiev, in Russian 0947 gmt 6 Sep 05
BBC Monitoring Service, UK, in English, Tue, Sep 06, 2005
KIEV - Ukrainian Foreign Minister Borys Tarasyuk is to make a working visit
on 19-20 September to Washington and New York where, amongst other
things, he will hold talks with US Secretary of State Condoleezza Rice. The
visit was announced at a briefing on Tuesday [6 September] by Ukrainian
Foreign Ministry press secretary Vasyl Filipchuk.
Filipchuk said that during the visit Tarasyuk has meetings planned with
Assistant to the US President for National Security Affairs Stephen Hadley,
the leadership of the US State Department, representatives of the Ukrainian
community and the US Senate. He will also attend events at US scientific
research institutions.
Filipchuk stressed that Tarasyuk's talks with Rice would be the most
important aspect of the visit. -30-
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21. U.S. MEDIA INVESTOR RONALD LAUDER WANTS LARGER
STAKE IN UKRAINIAN TV CHANNEL ONE PLUS ONE
By Viktoriya Syumar, "One Plus One TV"
Zerkalo Nedeli, Kiev, in Russian 3 Sep 05; p 3
BBC Monitoring Service,UK, in English, Mon, Sep 05, 2005
One of Ukraine's largest foreign investors in the television market intends
to increase its stake in a Ukrainian channel, a major weekly writes. Central
European Media Enterprises (CME) owner Ronald Lauder says his company
plans to increase its stake in One Plus One TV. He denies any deal has been
agreed on the Pryvat group buying shares in the channel.
He also says that even though CME is the controlling shareholder in One Plus
One, he could not influence the editorial policies of the channel during the
Orange Revolution. "We offer our apologies to the Ukrainian television
viewer," he says, for the coverage the channel presented then. He says
management changes will make the channel stronger and increase its ratings.
The following is the text of the article by Viktoriya Syumar, entitled "One
Plus One TV - There is a deal, there is no deal...", published in Zerkalo
Nedeli on 3 September; subheadings have been inserted editorially:
After numerous rumours and information of various takes on the purchase of a
40 per cent stake in the popular One Plus One television station by the
Pryvat group, Central European Media Enterprises, which owns a controlling
stake of shares, is trying to put a full stop to the question.
The channel's press service disseminated a statement in which it read the
following: "Central European Media Enterprises confirms that negotiations
were indeed held with Ihor Kolomoyskyy concerning his offer to acquire 40
per cent of the capital in One Plus One TV, which belongs to the partners of
CME.
However, CME clearly and directly confirms that this agreement has not been
confirmed. Moreover, on 16 August 2005, CME told Kolomoyskyy in written form
about this fact and about CME finally and irrevocably withdrawing its offer
to review the stated agreement". In this statement, no reason was given for
CME's decision.
But as further events showed, it was still a bit early to put a full stop to
the issue. In an exclusively interview with Zerkalo Nedeli, the participants
in the process, CME Director Ronald Lauder and Pryvat leader Ihor
Kolomoyskyy - presented differing views on the situation. Both CME and
Pryvat have determined their interests and are determined to defend them
strongly.
This apparently commercial fight is actually a factor in the country's
domestic policy ; after all, a media resource covering 95 per cent of the
country and with a 20 per cent audience share could seriously strengthen any
political force. On the threshold of the parliamentary elections, the main
task of any politician is to increase his own presence in the country's
information space.
And it is no secret that from the point of view of the majority of these
politicians, the guarantee of such presence is not a well-thought out
electoral campaign intended to arouse natural interest on the part of
journalists, but personal control over print and electronic media.
But the main hostage in the complicated situation surrounding the channel is
its staff. Everyone understands that instability gives rise to indecision,
which does nothing to aid journalists in their work. Nevertheless, current
work at the channel shows that the journalists of one of the nation's
leading electronic media are beginning to understand that not only the
owners decide editorial policies.
In fact, much depends on the position of the employees, who personally
provide quality, effective and objective work at the channel with the
interests of the viewer foremost in mind.
This is even more so, as in the case of One Plus One TV we have seen that a
channel with most of its capital coming from the west, has worked according
to the most peculiar - eastern - principles. So far, the fight for the right
to call oneself the owner of One Plus One TV has not been seen by the
viewer - and that is a serious accomplishment on the part of the employees.
Nevertheless, it appears that this fight is entering a new phase, which
could turn out to be even more severe...[ellipsis as published]
No final decision on any sale
Ronald Lauder: "We offer our apologies to the Ukrainian television viewer"
[Syumar] Mr Lauder, Oleksandr Rodnyanskyy and Borys Fuksman have stated
that they are considering several offers to buy their shares. Is a change in
the
make-up of the channel's shareholders possible in the near future and do you
know with whom negotiations are being held?
[Lauder] Our partners told us that they are getting offers to buy their
shares. So far, they have not made a final decision on selling their shares
or not. Our partners are not tied by time and at any time they could make a
decision to sell their shares or to remain.
CME is not interested in selling its shares. We have made big investments in
One Plus One TV. We will strengthen our position and invest; that is why we
are setting up the Ukrainian structure UMS, which will guide manage this
process. CME is one of the biggest investors in Ukraine and we intend to
continue investing funds into the Ukrainian television business.
We will build a television centre for One Plus One; a base has been set up
to make Ukrainian television products. The estimated cost of the project is
15-20m dollars. This project will open new prospects and opportunities for
Ukrainian talent.
[Syumar] Do you intend to buy 40 per cent of shares from Fuksman and
Rodnyanskyy?
[Lauder] We intend to increase our shareholding, if that opportunity arises
for us. That is part of CME's general strategy, and not only in Ukraine.
[Syumar] One Plus One TV's license to broadcast on the second national
frequency has often been challenged in court. In the future, could this be a
form of pressure on the channel?
[Lauder] Our license has never been doubted by the government. Court
proceedings which have come up were private initiatives. Our company is
fulfilling all the conditions of its license and is working within the
framework of legislation not only in Ukraine, but everywhere that our
television companies are located. We believe that there will not be such
pressure. It is not logical.
CME is the biggest television investor in Central and Eastern Europe and,
moreover, CME is a public company which is traded on the New York Stock
Exchange and interacts with a number of large financial companies.
Pressure on CME will frighten other investors away from Ukraine.
No approval to buy shares
[Syumar] What is the reason that CME did not agree to let Kolomoyskyy buy 40
per cent of One Plus One? Is it true that you and your representatives spoke
with representatives of the Ukrainian authorities on the possible
acquisition of shares by the Pryvat group?
[Lauder] At the present time, we have not given anyone approval to buy these
shares, since increasing CME's stake in One Plus One is part of our plans.
Yes, we did have a meeting with President [Viktor] Yushchenko. You know that
other big media businessmen, for example, Rupert Murdoch, have also met
Yushchenko. There is nothing special in that.
We meet the presidents of many countries in which CME makes significant
investment. Like I said earlier, we plan additional investments in Ukraine,
and it was important for us to hear that the new government approves of our
plans.
We believe that CME's initiatives will serve as an example for foreign
investors in other spheres of the Ukrainian economy.
Yes, they really asked if there was going to be a deal with the Pryvat
group. That is natural, since its offer has been discussed in the press. I
want to stress that no pressure was put on us with regard to our choice of a
partner in the market. During the meeting we also stated our intentions to
increase our stake in One Plus One.
The Revolution
[Syumar] It is no secret that before the Orange Revolution One Plus One was
absolutely loyal to the authorities and its editorial policy was to a great
extent determined by bureaucrats and not by the journalists or shareholders.
Why didn't you, as a citizen of a democratic country with a long tradition
of press freedom, and as the biggest (de facto) shareholder in One Plus One,
find it necessary to correct the line of the channel towards objective
presentation of information?
[Lauder] In that political situation when the journalists were under daily
pressure from the authorities, CME could not protect them, though it tried,
since it was impossible to influence that situation by means accepted in
democratic countries. However, we apologized to Yushchenko and apologize to
Ukrainian television viewers and will draw certain conclusions.
We are already implementing a number of measures to make sure that such a
situation is not repeated. Besides, we are certain that the new political
climate in the country will aid democratic principles of work in the media.
The president stressed this during our meeting.
[Syumar] Could such a situation be repeated now? How do you see the
positioning of the channel, in which you own a controlling stake, towards
the new Ukrainians authorities?
[Lauder] We are making structural changes in the company, which will make it
possible to bring to life principles of a neutral and objective information
policy. We want to improve the level of professionalism among the
journalists and the quality of their work. News programmes are only part of
One Plus One.
One must not forget that One Plus One is foremost a commercial channel, and
so entertainment and other programmes have no less meaning for us. We
believe a correct programming policy built on a combination of various
genres will lead to increased ratings for the channel.
A new, strong team
[Syumar] The management at the channel changed recently. What was the reason
for the personnel changes and what are the main tasks set before the new
management?
[Lauder] The general producer of One Plus One TV asked to be released from
his position for health reasons. This was not unexpected for us, we had been
preparing for a change for several months. We believe that the success of
our channel depends on more than one person, it depends on the strong team
which manages the business. We decided to give key figures opportunities to
realize themselves.
The main tasks of the channel are to improve the image, the programming and
also its financial indicators. Yuriy Morozov is an experienced programming
specialist, and Olha Herasymchuk is a talented journalist and producer, and
so it was logical to promote them to the positions of general director and
general producer.
CME also attracted the competent financial specialist Karen Harrison to
work; she will head the financial department starting this month. We believe
that this team can bring One Plus One into better position and offer the
channel's viewers new quality programming. -30-
=============================================================
22. U.S. SENATOR RICHARD LUGAR HOPES FOR JACKSON-VANIK
AMENDMENT FOR UKRAINE
New Europe, Athens, Greece, Mon, September 5, 2005
KYIV - US Senator and Foreign Relations Committee Chairman Richard Lugar,
Republican, said he had drafted a bill to annul the Jackson-Vanik
Amendment's
validity for Ukraine. Lugar hopes Congress will consider and support the
bill in September, it was reported last week.
Lugar and Senator Barack Obama, Democrat, met with Ukrainian parliament
speaker Volodymyr Litvin in Kiev last Monday. Ihor Storozhuk, Litvin's press
secretary, said that the sides discussed the disposal of outdated armaments
in Ukraine. The Ukrainian government will draft the programme and the
related bill, and the United States will provide the funding.
Lugar also discussed the possible annulment of the Jackson-Vanik Amendment
with Ukrainian President Viktor Yushchenko. They also addressed Ukraine's
accession to the World Trade Organisation (WTO), market economy status and
Euro-Atlantic integration.
Obama, US Ambassador to Ukraine John Herbst and Ukrainian First Deputy State
Secretary Alexander Motsyk took part in the meeting, the presidential press
service said last Monday.
"Ukraine is losing about USD 8 billion a year" because it is not a WTO
member and does not yet have market economy status, Yushchenko said,
referring to experts. He hopes for US support in the signing of a
Ukraine-WTO protocol.
Lugar said that the United States supports Ukrainian European and
Euro-Atlantic integration. In a press conference in Kiev last Monday, Lugar
spoke in favour of a broad discussion in Ukraine of Ukrainian admission to
NATO, so that the final decision would be widely backed by its citizens.
Lugar said the presentation of this issue to Ukrainian citizens and the
result to be attained are extremely important. Lugar also said US senators
are optimistic about Ukraine's membership in NATO.
In issues of bilateral security, Ukraine and the United States signed an
intergovernmental agreement on bacteriological threat reduction, Lugar told
the news conference.
The agreement will help enhance safeguards at the two countries'
laboratories where virus samples are stored and reduce the time needed to
determine whether virus outbreaks have been caused by natural factors or by
terrorist activity, he said.
The US senator said his country highly appreciates any opportunity to
cooperate with Ukraine this area. The size of US investments in programmes
outlined in the document, which came into force as soon as it was signed,
will be determined later and will depend, among other factors, "on the
situation and conditions in Ukraine," Lugar said.
Lugar said he and senior Ukrainian officials also discussed the possibility
of exempting all funds that will be allocated for such programmes from taxes
and customs duties.
Commenting on prospects for cooperation in a programme aimed at the
disposing of solid rocket fuel at enterprises in Pavlograd in the
Dnepropetrovsk region, the US senator said that Ukrainian and US experts
are working on a disposal method that will be acceptable to both nations.
=============================================================
23. NEW PROGRAM TO STIMULATE PRODUCTION OF
UKRAINIAN AGRICULTURAL EQUIPMENT
By Ihor Yatsenko, FirsTnews, Kyiv, Ukraine, Tue, September 6, 2005
The history of independent Ukraine is dotted with attempts to stimulate
domestic agricultural equipment production, so far with only moderate
success. Foreign agricultural equipment has usually been more readily
available, primarily because the marketers of foreign equipment often
carried the major advantage of ready-made financing packages in
connection with foreign banks.
A new Ukrainian government program may solve at least a part of the
financing problems that farmers have faced.
KYIV - In order to stimulate both the production and purchase of Ukrainian
agricultural equipment, the government has adopted a multi-faceted program
for farmers that pays for 30 percent of the purchase and subsidizes a
portion of the bank interest on the remaining loan. In addition, the program
offers the option of leasing through Ukragroleasing.
The program has been in limbo since the government announced the initiative
in March. During March-June, when the demand for agricultural equipment
usually grows, the major Ukrainian manufacturers of agricultural equipment
such as the Ukrautozapchastyna tractor plant, the Kherson Combine factory,
the Ordzhonikidze Tractor Plant in Kharkiv and others reported a significant
production decrease while waiting for the government to finalize the
program.
"Although the amendments to the 2005 state budget, signed by President
Viktor Yushchenko on March 31, envisaged about UAH 270 million to cover the
30 percent compensation program, the funds were not provided until mid June.
The situation, in its turn, resulted in delay of 2005 spring planting," said
Anton Dyukarev, a spokesman of Ukrautozapchastyna.
The program is aimed specifically at Ukrainian produced equipment. In order
to qualify as a domestic manufacturer, at least 50 percent of the parts must
be made in Ukraine.
In the case of Ukrautozapchastyna assembled tractors, the diesel engines,
fuel pumps, transmissions, axels, gear boxes are imported from Belarus while
the company installs Ukrainian wheels (rims and tires), radiators,
batteries, electric equipment, plastic hoods and fenders.
The program is good news for farmers and for Ukrautozapchastyna, which
manufactures about 30 percent of tractors in Ukraine. The company is capable
of manufacturing 3,800 tractors per year with an additional assembly line
able to produce about 3,700 tractors more, according to Dyukarev.
According to Oleksandr Dmytrovskyi, deputy director of the agricultural
equipment and tractors department, Ukrautozapchastyna assembles seven
basic models of tractors and 16 items of special equipment that could be
installed in order to expand tractors' capabilities for agriculture, road
reconstruction, municipal needs, forestry, drilling and construction. The
company could also equip its tractors with optional amenities such as an air
conditioner (UAH 12,000), radio, additional seating, tinted windows, dual
wheels and other choices.
The company also developed its own design for hoods and fenders made of
plastic for the 82.1 model. "Although plastic parts add about UAH 3,000 to
tractor's cost, now a tractor looks better and is able to resist to
corrosion. We have been exporting the plastic parts to our Belarusian
partners," Dmytrovskyi said.
Using parts from Belarus, Ukrautozapchastyna first started assembling Minsk
Tractor Plant (MTZ) 80/82 tractors in remodeled workshops equipped with
Belarusian assembly lines at the Kyiv Leninska Kuznya shipyard in 2002. In
2004, they launched assembly of the Vladimir Tractor Plant model VTZ 2032A.
The manufacture of a new model of KYI, the 14920 all-wheel-drive tractor
begins this year.
The company currently has no plans to assemble foreign brands like Massey
Fergusson or Case International, according to Dyukarev. Company officials
plan to assemble 3,000 tractors this year compared to about 1,700 tractors
sold in 2004.
The company, which currently has 32 affiliate sales and service centers
throughout Ukraine, specializes in manufacturing tractors of 1.4 tractive
force class. Tractive power is a measure of the power that a tractor is able
to develop.
"An average private farmer in Ukraine cultivates about a hundred hectares of
arable land; such a plot, in accordance with economic viability, could best
be served by a tractor of 1.4 tractive force class," Dmytrovskyi said.
"In 2005 the company manufactured a tractor powered by 98 horse power Deutz
diesel which cost about UAH 140,000 ($28,000); the price of a basic model is
about UAH 84,100 ($16,800)."
He said the company is testing a tractor equipped with a Russian device that
burns a combination of diesel fuel and methane gas. While the device would
add about $5,000 to the cost of a tractor, it burns a mixture that is just
20 percent diesel fuel (UAH 3.80 per liter) and the rest methane (UAH 1.20
per cubic meter), plus its emissions are substantially cleaner, Dmytrovskyi
said.
According to Dmytrovskyi, the assembly line, which consists of 14 assembly
posts, still requires a lot of manual labor. However, the entire production
process is arranged to meet requirements of the MTZ, thus there is no
difference in quality between tractor made in Belarus and its analogue made
in Ukraine, according to Dyukarev.
"Our tractor plant has been visited several times per year by MTZ experts to
check the quality, [and they are] occasionally accompanied by the
representatives of the Cabinet of Ministers of Belarus, " Dyukarev said.
"Even though our tractors have been certified and won several European
awards, in accordance with the agreement, Ukrautozapchastyna is restricted
from exporting its tractors from Ukraine," Dmytrovskyi added.
Under the program, Dyukarev pointed out the financial incentive for buying a
Ukrainian model even if Belarusian tractors are perceived to be of higher
quality.
"A customer pays only 70 percent of the total cost of the tractor and the
difference of 30 percent we receive from the government, while an original
Belarusian tractor imported to Ukraine would cost the customer the full 100
percent." -30- [The Action Ukraine Report Monitoring Service]
--------------------------------------------------------------------------------------------------------
LINK: http://www.firstnews.com.ua/en/article.html?id=94177
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