NEWSBRIEFS

Kuchma urges peaceful settlement

KYIV - President Leonid Kuchma said at a meeting with foreign diplomats in Kyiv on February 6 that he hopes the U.N. Security Council finds adequate measures to settle the Iraqi crisis, Interfax reported. "We are still speaking for the settlement of the [Iraqi] situation by political-diplomatic means," Mr. Kuchma said. At the same time, he said, "Ukraine fully shares the concern of the world community about the possibility of the spread of weapons of mass destruction." President Kuchma also said Ukraine will remain devoted to the ideals of strategic partnership with the United States despite the current bilateral problems. "I would like to emphasize with full responsibility that we have never intended and are not going to revise our policy regarding the U.S.," the Ukrainian president said. (RFE/RL Newsline)

Kyiv evacuates diplomats from Baghdad

KYIV - All diplomats of the Ukrainian Embassy in Baghdad, except Charge d'Affaires Valentyn Novikov, have been evacuated, Interfax reported on February 11, quoting Foreign Affairs Ministry spokesman Serhii Borodenkov. Mr. Borodenkov added that Mr. Novikov is currently in Kyiv for consultations, after which he will fly back to Iraq. "The temporary charge d'affaires himself will decide when he has to leave that country," Mr. Borodenkov added with regard to when the Ukrainian mission might be closed entirely. He disclosed that there are currently 231 Ukrainian citizens in Iraq. The spokesman noted that the Foreign Affairs Ministry has not yet released a statement recommending that Ukrainian citizens leave Iraq. (RFE/RL Newsline)

President in favor of a tax amnesty

KYIV - President Leonid Kuchma is in favor of applying a tax amnesty to legalize hidden revenues that were "not [obtained] in a criminal way," Interfax reported on February 12, quoting presidential administration deputy head Pavlo Haidutskyi. Mr. Haidutskyi said such revenues in Ukraine are estimated at 35 billion hrv ($6.5 billion). He said a tax amnesty does not contradict the "basic principles" of combating money laundering and would not be opposed by the FATF. He added that President Kuchma ordered the government and the National Bank of Ukraine to work out by March 1 a plan for implementing such an amnesty. (RFE/RL Newsline)

U.S. cites conditions for lifting sanctions

KYIV - The absolute political independence of Ukraine's State Financial Monitoring Department is a key condition for the removal of anti-money-laundering sanctions imposed on Ukraine by some Western countries following recommendations by the Financial Action Task Force on Money Laundering (FATF), Interfax reported on January 30, quoting Ukraine's Ministry of the Economy. This condition was reportedly communicated by the U.S. side to its Ukrainian partners at ongoing deliberations of the Ukraine-U.S. Economic Cooperation Committee in Washington. The other conditions mentioned by the U.S. side include amendments to Ukraine's Criminal Code and the law on banking, as well as a reduction of the maximum transaction sum that is not subject to monitoring. (RFE/RL Newsline)

Rada amends laws on money laundering

KYIV - The Verkhovna Rada on February 6 passed a bill introducing amendments to a number of laws intended to curb money laundering, the UNIAN news agency reported. In particular, the legislature reduced the minimum sum subject to financial monitoring to 80,000 hrv ($15,000). Another major legislative change prohibits banks from opening anonymous bank accounts and obliges them to identify customers who perform banking operations exceeding 50,000 hrv and not involving bank accounts. (RFE/RL Newsline)

NBU seeks to curb money laundering

KYIV - Newly installed National Bank of Ukraine Chairman Serhii Tyhypko told journalists on February 10 that his institution will pass a resolution this week to combat money laundering and stem illegal flows of capital from Ukraine, UNIAN reported. Last week, the central bank resolved that Ukrainian companies will have to obtain NBU licenses before buying shares in other domestic companies from non-residents. Mr. Tyhypko said the purchase of domestic shares by local companies from offshore entities leads to capital outflows. According to NBU figures, capital outflows amounted to $385 million in 2000, $898 million in 2001 and $2.2 billion in 2002. (RFE/RL Newsline)

NBU: sanctions' impact 'insignificant'

KYIV - National Bank of Ukraine Chairman Serhii Tyhypko told journalists on February 11 that recent sanctions recommended by the Financial Action Task Force (FATF) on money laundering have had an "insignificant" effect on Ukraine's banking system, the UNIAN news service reported. Mr. Tyhypko added that the sanctions affected "only" 40 of the country's 153 banks. He did not elaborate. Referring to an FATF conference expected to begin on February 12 in Paris, the NBU chairman said a decision not to expand FATF sanctions against Ukraine would be perceived by Kyiv as "positive." (RFE/RL Newsline)

Pascual: sanctions should be lifted

KYIV - U.S. Ambassador to Ukraine Carlos Pascual said on February 10 that Ukraine has made all the necessary legislative amendments to justify removing sanctions recommended by the Financial Action Task Force (FATF) on Money Laundering, Interfax reported. "It was clear as early as at the start of 2001 which steps needed to be taken by the Ukrainian side [to combat money laundering]. I am pleased to note that all of these major steps have been taken in the past few weeks. Amendments were made to anti-money-laundering legislation, the Criminal Code, and laws on banking," Mr. Pascual said. At the same time, the ambassador said the international community needs "solid guarantees" from the Ukrainian government that the newly created body for fighting money laundering, the State Financial Monitoring Department, will act within the limits of its jurisdiction and will not be used for political purposes. The FATF will hold a conference on February 12-14 to consider Ukraine's new anti-money-laundering legislation in light of international standards. (RFE/RL Newsline)

Pascual explains aid reduction to Ukraine

KYIV - U.S. Ambassador to Ukraine Carlos Pascual told journalists in Kyiv on February 6 that the planned reduction of U.S. assistance to Ukraine under the Freedom Support Act to $94 million in 2004 is due to the fact that Ukraine has reached a "certain level of financial independence," Interfax reported. The diplomat said the U.S. government now needs to focus on financing priority projects in Ukraine, including support for civil society, the independent media, and small and medium-sized private businesses. (RFE/RL Newsline)

Solana urges Kyiv to adopt EU standards

KYIV - Javier Solana, secretary-general of the European Union Council and high representative for the common foreign and security policy, urged Ukraine to enact judicial reform, guarantee the freedom of independent media, and improve relations between the government and the opposition on the country's path toward the EU, Interfax reported on February 7. Mr. Solana was briefing journalists following a Ukraine-EU meeting in Kyiv the same day. (RFE/RL Newsline)

Yushchenko: support independent media

KYIV - The West should support independent Ukrainian media because protecting freedom of expression is among that country's most serious issues, Interfax quoted Our Ukraine leader Viktor Yushchenko as saying to journalists in Washington on February 8. According to Mr. Yushchenko, Ukrainian authorities "keep the electronic media on a short leash" by their approach to distributing licenses. "This is why the electronic media are most dependent among the Ukrainian media on the authorities," said Mr. Yushchenko, a former prime minister of Ukraine. (RFE/RL Newsline)

Ukraine to launch satellite radio

KYIV - Satellite-radio channel Ukraina-Svit (World Ukraine) will be inaugurated in March, UNIAN reported on February 10, quoting State Committee for Broadcasting Chairman Ivan Chyzh. The channel is to broadcast five hours a day - primarily to Eurasia and, in the future, to North America. "[The channel will make it possible] for Ukraine to speak in its own language to the world, while bypassing interpretations by competitors," Mr. Chyzh said, adding that the government has allocated 8 million hrv ($1.5 million) to develop the channel. (RFE/RL Newsline)

Kuchma seeks end to free economic zones

KYIV - President Leonid Kuchma said at a meeting with the State Customs Service leadership on February 5 that "it is necessary to put an end to the [free economic] zones [and] liquidate them completely," UNIAN reported. "[These zones] have become semi-criminal zones, and this refers not only to the Donetsk zone," Mr. Kuchma noted in a reference to the eastern coal-mining center that is home to some of the country's mightiest oligarchs. "You pull the meat that Europe doesn't want to eat into these zones and sell it there without [paying] taxes," the president said, singling out customs officers, law enforcement officers and the Security Service of Ukraine. Ukraine's 11 free economic zones, which offer tax and customs benefits, have failed to attract foreign investors or boost economic development, the president said. The closure of free economic zones in Ukraine is among the demands voiced by the International Monetary Fund. (RFE/RL Newsline)

Minimum-wage hike will require $2 B

KYIV - Parliamentary Budget Committee Chairman Petro Poroshenko told journalists on February 5 that the country needs to find an additional 10.6 billion hrv ($2 billion) if it wants to comply with an increase in the minimum wage that was passed by the Verkhovna Rada in December 2002, UNIAN reported. According to that law, the minimum monthly wage should equal 185 hrv in January-June and 237 hrv in the second half of 2003. Mr. Poroshenko said the 2003 budget assumed a minimum wage of 165 hrv throughout the year. He added that the Budget Committee will have to draft a "new budget" for 2003 if parliament fails to find a legislative solution. (RFE/RL Newsline)

Rules for prisoners are eased

KYIV - The Ukrainian Parliament on February 6 passed a bill amending a number of laws to ease rules for prisons and their inmates, UNIAN and Interfax reported. In particular, the bill revokes the right of the Security Service of Ukraine to run its own detention facilities (isolation wards) independent of the Internal Affairs Ministry. Another measure removes a rule limiting the size of packages that may be received by prisoners from family or friends to 8 kilograms once a month. Prisoners will now be allowed two packages of unlimited weight twice a month. The bill also extends the monthly maximum visiting time for prisoners to four hours from the current two hours. (RFE/RL Newsline)

Azerbaijan denies buying Kolchuha

BAKU - Azerbaijan's Defense Ministry issued a statement on February 5 denying that Baku purchased one or more Kolchuha air-defense systems from Ukraine and sold them to Iraq, Turan reported on February 6, quoting the independent Russian-language daily Ekho. Speaking at a press conference in Kyiv on February 4, Ukrainian President Leonid Kuchma said that prior to the collapse of the USSR, Ukraine produced 76 Kolchuhas, some of which were provided to Germany, Azerbaijan, Georgia, Belarus and the Russian Federation, the Ukrainska Pravda website reported. (RFE/RL Newsline)

Kyiv sees no change in foreign policy

KYIV - The Ukrainian Foreign Affairs Ministry on January 30 issued a statement saying the recent election of President Leonid Kuchma as head of the CIS Council of Heads of State will not change Ukraine's strategic priorities in foreign policy, UNIAN reported. The expansion of Ukrainian ties with the CIS in general and the Russian Federation in particular guarantees the country's successful integration into Europe and NATO, the statement asserts. The ministry also said President Kuchma's CIS appointment testifies to the fact that the post-Soviet commonwealth has given priority to developing its "economic vector." Mr. Kuchma is the first non-Russian leader to head the council. (RFE/RL Newsline)

Council to promote European integration

KYIV - President Leonid Kuchma has set up a State Council for Issues of European and Euro-Atlantic Integration, UNIAN reported on January 30. According to the presidential decree, the council is to coordinate efforts toward implementing the country's strategic political goals. Those goals include "ensuring Ukraine's entry into the European political, economic, security and legal area [and] creating preconditions for Ukraine's admission to the EU and NATO." The council is to be headed by the president and will include the prime minister, the head of the presidential administration, the secretary of the National Defense and Security Council, the foreign affairs minister, the chairman of the Verkhovna Rada (whose participation is optional), and several other government officials. (RFE/RL Newsline)

Ukraine's defense minister visits Georgia

TBILISI - Ukraine's Defense Minister Volodymyr Shkidchenko held talks in Tbilisi on January 31 with his Georgian counterpart David Tevzadze, Minister of State Avtandil Djorbenadze and President Eduard Shevardnadze, Caucasus Press reported. Mr. Shkidchenko said he and Mr. Tevzadze discussed mutual cooperation, including continued help in the training of Georgian military personnel, but added that they did not discuss either the possible replacement of the Russian peacekeepers in Abkhazia by a Ukrainian contingent or the purchase by Georgia of Ukrainian air-defense missiles. Mr. Shkidchenko also denied Azerbaijani press reports that Ukraine has offered to make forces available to guard the Baku-Tbilisi-Ceyhan oil-export pipeline. On February 1, Caucasus Press quoted Georgian National Security Council Secretary Tedo Djaparidze as saying that Tbilisi is negotiating with Ukraine and the Czech Republic the possible purchase of air-defense missiles, but that the issue was not raised during Mr. Shkidchenko's visit. (RFE/RL Newsline)

Copyright © The Ukrainian Weekly, February 16, 2003, No. 7, Vol. LXXI

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