IN THE SPOTLIGHT - Gorshenin Institute
INTHESPOTLIGHT ©GorsheninInstituteApril2015Allrightsreserved ISSUE55(218) 04/13/2015 INTHESPOTLIGHT ISSUE55(218) 04/13/2015 CONTENT 1.Topnews…page5 2.ArmedconflictinUkraine`seast…page5 SeparatistskeepshellingUkrainianpositions Pro-Russianmilitantsreportedlyamass110airdefencesystems,700tanks Russiaamasses53,000soldiersalongborderwithUkraine Pro-RussianseparatistsopenfireonOSCEmission AmnestyInternationalaccusespro-Russianseparatistsoftorture,summary executionofUkrainiansoldiers Pro-Russianmilitantsstoptheexchangeofprisoners 3.Internationalpolitical…page7 Ukraine-Russia UkrainianrepresentativestoskipwarvictoryparadeinMoscow RussiancourtextendsarrestofUkrainianfilmmakeruntil11May Ukraine'slocalcouncilsdeclareRussiaaggressor UkrainetograntpoliticalasylumtoRussians–Poroshenko Crimeanissue Russiansecurityservicescontinuetointerrogatejournalists Ukraine-EU UKratifiesEU-Ukraineassociationagreement Ukrainemaybegrantedvisa-freetraveltoEUinMay,saysPolishpresident 4.Domesticpolitical…page8 Ukrainianconstitutionalcommissionholdsfirstsession Ukrainianpresidentexpressesreadinesstoannouncefederalizationreferendum SeveralterroristattackscommittedinKharkiv Ukraine'sparliamentbansCommunistandNazipropaganda Ukrainiansecurityservicesquestioncommunistpartyleader Ukrainianparliamentrecognizesvolunteersoldiersasparticipantsincombat actions 2 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 Mobilizedstudents,postgraduatestudentsfreedfrommilitaryserviceinUkraine UkrainianMPssuggestcriminalresponsibilityforabuseofdisciplinarypowerby militaryofficials Ukrainianpresidentsignslawtoadvanceintelligence Ukrainianpresidentagreestodisbandspecializedpolicedepartments Ukrainianparliamentchangesnumberofborderguards,securityserviceofficers Ukraine'sdefencecouncilpresentsnationalsecuritystrategy Tymoshenko'scasefilesvanishfromProsecutor-General'sOffice UkrainejoinsEUsanctionsagainstoustedpresident Ukraine'ssecurityserviceopenscaseagainstex-presidentoverusurpationof power Ukraine'ssecurityservicepresseschargesagainstformerchief Ukraine'ssecurityserviceaccusesex-premieroffinancingdisturbancesin Ukraine Parliamentsetsupworkinggroupstoprobecorruptionincabinet,checktariffs FormerheadofStateFinancialInspectoratefacescriminalcase AnticorruptionBureautobecomeoperationalbyyear-end–presidential administration CourtissuesarrestwarrantforformerUkrainianMP Ukraine'sKramatorskprosecutordetained ProsecutorsprobingInter'spurchasefromRussianChannelOneforfinancingof terrorism Prosecutorsrenew10-year-oldcaseagainstDnipropetrovsktycoon Ukrainianparliamentauthorizesdisclosureofinformationfromstateregisters Constructioncontrolfunctionspassedtolocalauthorities Officialsdeclareincomes 5.Media…page15 PublictelevisionlaunchedinUkraine 6.Economy…page15 GovernmentnamesEurobondstoberestructured S&PlowersUkraine'sforeigncurrencyrating 3 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 AnnualinflationinUkraineacceleratesto45.8percent GovernmentexpectsGDPtogrowby2percentin2016 Foreignexchangereservesgrowto9.97bndollars Treasuryaccountbalancereaches1.4bndollars Governmentplanstosell342enterprisesin2015 Cabinettoallocate870mdollarstoDepositGuaranteeFund CourttoconsidervalidityofDniproenerhoprivatization Akhmetov'sMetinvestsaysinpaymentdefault CabinettransferssharesinTitanium&MagnesiumCombinetostate-owned company ParliamentexpandspowersofAuditingChamber MPsobligebudgetadministratorstodisclosebudget-relatedinformation Banksallowedtopartiallywriteoffforeigncurrencydebts Governmenttoeliminateinvestmentagency ParliamentabolishesaccreditationofpharmaciesandVATonimportdrugs Governmentappointstradecommissioner WizzAirtoretainitssubsidiaryinUkraine 7.Energy…page19 Naftohaztodraw1.5bndollarsforfillingundergroundstorages Russiawants130mdollarsfromUkraineforgasdeliveriestoDonbas MilitantscontinuetoexportcoalfromDonbastoRussia–OSCE UkrainesuspendsgasimportsfromHungaryandPoland Ukrainecutsgastransitby31.4percent Parliamentpassesgasmarketlaw Naftohazexpects4.3bndollarsdeficitin2015 UkrnaftatooffsetdividendsagainstNaftohaz'sdebts NewUkrtransnaftaheadappointed ChernobylNPPpassestodecommissioningphase 4 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 1.TOPNEWS DonbasterroristshavemoremilitarypowerthansomeNATOmember statesinEurope Donbasmilitantshave110Russianairdefencesystems,700tanks. YoucanreadmoredetailsinthesectionARMEDCONFLICTINUKRAINE'SEAST ParliamentbansCommunistandNazisymbols MPsrecognizeOUNandUPAasfightersforUkraine'sindependence. YoucanreadmoredetailsinthesectionDOMESTICPOLITICAL. S&PcutsUkraine'srating AnalystspredictGDPgrowthinUkrainealreadyin2016 YoucanreadmoredetailsinthesectionECONOMY. 2.ARMEDCONFLICTINUKRAINE'SEAST SeparatistskeepshellingUkrainianpositions Militantsoftheself-proclaimedDonetskandLuhanskpeople'srepublics continuetoviolatetheMinskagreementsbyattackingpositionsofthe Ukrainianmilitaryandpopulatedareaswithartillery,tanks,mortars,automatic grenadelaunchersandsmallarms. Shyrokyne(nearMariupol),PiskyandAvdiyivka(DonetskRegion)remainthe hottestzones. TheOSCEmonitoringmissionsaidthathumanitariancrisisisobservedinsome areasofDonbas,wherepeoplehavenoaccesstofood,andtheirhomesare destroyed. TheantiterroristoperationinDonbasbeganayearago,on7April2014. Pro-Russianmilitantsreportedlyamass110airdefencesystems,700 tanks Asof8April,theseparatistforcesoftheself-proclaimedDonetskandLuhansk people'srepublicshadattheirdisposal700tanks,110airdefencesystems, 1,100combatarmouredvehicles,600artillerysystems,and380multiplelaunchrocketsystems,thestaffoftheUkrainianantiterroristoperation(ATO) hasreported.AllthemilitaryequipmenthasbeensuppliedtothembyRussia, thestaffstressed. Additionally,some9,000soldiersoftheRussianArmedForcesarefightingin theeastofUkraine,accordingtoinformationatthedisposaloftheATOstaff. 5 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 TheUkrainianintelligenceserviceshaveestimatedthat31,000rebelfightersare takingpartintheconflictinDonbas. WewouldliketopointoutthattheDonetskandLuhanskpeople'srepublicshave moremilitaryequipmentthansomeNATO'sEuropeanmemberstates.More specifically,pro-Russianrebelfightershavethesamenumberoftanksasthe armiesofGermany,France,andtheCzechRepubliccombined,theUkrainian websiteInforesisthasquotedtheannualreport The Military Balance 2014, whichdiscussesthetypesandnumberofsoldiersinthearmedforcesofcountries intheworldin2013,assaying.Accordingtothereport,Ukrainehassufficient resourcestosuppressseparatistfirepower. Russiaamasses53,000soldiersalongborderwithUkraine Russiahasamassed53,000servicemen,420tanks,1,920armouredcombat vehicles,500artillerysystems,200multiplerocketlaunchers,380combat aircraft,and130helicoptersalongtheUkrainianborder,thestaffoftheUkrainian antiterroristoperation(ATO)hasreported. AUkrainianorganizationcalledInformationResistancehaspublishedareport specifyingunitsoftheRussianArmedForceswhicharepositionedinregions borderingUkraine.ItsexpertsbelievethatRussiansoldiersareprimarily concentratednearthecityofMillerovoinRostovRegion,wherebattaliontactical groupsfromthemilitaryunitsoftheRussianWesternandCentralmilitary districts,aswellasmarineunitsfromtheNorthernandBalticfleetsaredeployed. BattaliontacticalgroupsoftheSouthernMilitaryDistrict'smilitaryunitsare mainlybasedinneartheKadamovskiytraininggroundinRostovRegion,the InformationResistancehasreported.SpecialunitsoftheMainIntelligence DirectorateoftheArmedForcesandtheRussianInteriorMinistryarealso deployedthere. Pro-RussianseparatistsopenfireonOSCEmission On7April,pro-Russianseparatistsoftheself-proclaimedDonetskpeople's republicopenedfireontheobservermissiontoUkraineoftheOrganizationfor CooperationandSecurityinEurope(OSCE)whenitwascrossingthecheckpoint inShyrokyne.Noonewasinjured. AmnestyInternationalaccusespro-Russianseparatistsoftorture,summary executionofUkrainiansoldiers TheinternationalhumanrightsorganizationAmnestyInternationalhasreported thatpro-Russianseparatistsoftheself-proclaimedDonetskandLuhanskpeople's republicshadtorturedandcarriedoutsummaryexecutionsofprisoners.Such actsareconsideredwarcrimes. Wewouldliketopointoutthaton6April,theUkrainiannewspaperKyivPost postedpartofarecordingofitsphoneconversationwiththecommanderofthe separatistbattalionSparta,ArseniyPavlov,alsoknownasMotorola,inwhichhe hadadmittedthekillingof15Ukrainianprisoners. ThenewspaperreportedthatMotorolahadkilledcapturedUkrainianofficerIhor Branovytskyy,whohadparticipatedinafighttofreeDonetskairport.The discoveredbodyofthesoldierhadsignsoftorture. 6 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 Pro-Russianmilitantsstoptheexchangeofprisoners On6April,pro-Russianmilitantsreleased13Ukrainianprisonersandthree volunteers.AnotherUkrainiansoldierwasfreedon9April. Aleaderoftheself-proclaimedDonetskpeople'srepublic,DenysPushylin,has saidthataprisonerexchangewouldbesuspendeduntilitisdecidedwhowill comprisethefourgroupstaskedwiththeimplementationoftheMinsk agreements.Afewdayslater,hesaidthatseparatistshadreleasedallthe prisoners. TheUkrainianauthoritieshaveestimatedthat200-400Ukrainiansremainin captivity. 3.INTERNATIONALPOLITICAL UKRAINE-RUSSIA UkrainianrepresentativestoskipwarvictoryparadeinMoscow Ukrainianofficialswillnotparticipateineventsontheoccasionofthe70th anniversaryoftheSovietvictoryoverNaziGermanyintheGreatPatrioticWar, whichwilltakeplaceinMoscowon9May,theUkrainianForeignMinistryhas said. TheministryalsosaidthatUkrainewouldconsidervisitsofworldleadersto Moscowonthisdayasademonstrationofsolidaritywiththeaggressor. ManyWesternleadersrefusedtoattendtheeventsontheoccasionofthevictory anniversaryinRussia. RussiancourtextendsarrestofUkrainianfilmmakeruntil11May On8April,Moscow'sLefortovskiycourtextendedthearrestofUkrainian filmmakerOlehSentsovuntil11May.HehasbeenillegallydetainedinaRussian facilityonchargesofpreparingterroristactsinCrimea. Ukraine'slocalcouncilsdeclareRussiaaggressor On9April,membersoftheZaporizhzhyaandKharkivregionalcouncilsdeclared Russiaacountryaggressor. UkrainetograntpoliticalasylumtoRussians–Poroshenko UkrainewillgrantasylumtoRussiancitizenswhoarepersecutedathomefor politicalreasons,PresidentPetroPoroshenkohassaid.Thepresidenthas promisedtointroducenecessarychangesintotheUkrainianlegislation. CRIMEANISSUE Russiansecurityservicescontinuetointerrogatejournalists 7 OfficersoftheRussianSecurityService(FSB)on8Aprilconductedan interrogationofAnnaShaydurova,ajournalistoftheCrimeannewsandanalysis websiteCentreofJournalistInvestigations,inSimferopol. ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 On9April,FSBofficers,afternearlya10-hoursearch,detainedandquestioned TatyanaHuchakova,whopreviouslyworkedasdeputychiefeditorofanother Crimeannewsandanalysiswebsite,BlackSeaNews. On11April,securityofficerssearchedthehomeofformercameramanofATRTV ChannelAmetUmerov,whocriticizedRussia'sleadership. Accordingtoonlineproject“Krym.Realii”,afterCrimeawasannexedbyRussia, theRussiansecurityservicesstartedtoconductregularsearchesand interrogationsofjournalists,activists,andpublicfiguresinthepeninsula.Human rightsactivistsdescribesuchactionsas“fightagainstdissent”andfearthatsuch actionsbytheRussianlawenforcerswillleavetheinternationalcommunity withoutobjectiveinformationfromCrimea. UKRAINE-EU UKratifiesEU-Ukraineassociationagreement On8April,theUKratifiedtheassociationagreementbetweenUkraineandthe EU. On7April,thedocumentwasalsoratifiedbythelowerchamberoftheDutch parliament. ItisexpectedthatalltheEUmemberstateswouldratifytheagreementbyMay 2015. Ukrainemaybegrantedvisa-freetraveltoEUinMay,saysPolishpresident Ukrainemightbegrantedvisa-freetraveltotheEUduringasummitofEastern PartnershipinRiga,whichwilltakeplacein21-22May,PolishPresident BronislawKomorowskisaidinKievon9April. WeshallremindyouthattheEUambassadortoUkraine,JanTombinski,ruled outthepossibilitythatUkrainewouldreceivevisa-freetraveltotheEUinMay 2015. ExpertsbelievethatUkrainemightalsobegivenanintermediatepositivesignal aboutvisa-freetravelinRiga,followingwhichthecountrywouldhaveto completeanadditional,finalcycleofassessmentbyEUexpertsbytheendofthe year. 4.DOMESTICPOLITICAL Ukrainianconstitutionalcommissionholdsfirstsession On6April,theUkrainianConstitutionalCommissionhelditsfirstsession. Thefurtherworkofthecommissionwillbefocusedonthefollowingthree aspects:decentralization,humanrights,andjudicialreform. Thecommissionwillconveneagainon15April. 8 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 Ukrainianpresidentexpressesreadinesstoannouncefederalization referendum UkrainianPresidentPetroPoroshenkohassaidthatheisreadytoannouncea referendumonchangingtheUkrainianstatesystemtoafederationifthe ConstitutionalCommissiondecidesontheneedforit.Headdedthat90percent ofthepopulationsupportedtheunitarymodelofthestatesystem. TheUkrainianleaderalsopointedoutthatUkrainianwouldremaintheonly statelanguage. TheresultsofapollconductedbytheKievInternationalSociologyInstitute suggestthatifareferendumongrantingRussianthestatusofasecondstate languageisheld,48percentofUkrainianswouldvoteagainstitandonly33 wouldvoteinitsfavour. AsurveycarriedoutbytheGorsheninInstitutesuggeststhattheissueofastate languageinUkrainiansocietydoesnottoptheagenda.Whenaskedaboutthe mostimportantproblemswhichthegovernmentshouldsolvefirst,thosepolled saidtheconflictintheeastofUkraine(89.5percent),theeconomiccrisis(33 percent),corruption(13.2percent),thedropofthehryvnyavalue(9.8percent) andothers.Only2.4percentoftheUkrainianslistedthelanguageissue. SeveralterroristattackscommittedinKharkiv On6April,unidentifiedpersonsblewuprailwaytracksinKharkivRegion. On7April,terroristsattemptedtodemolishastelewiththeUkrainianflagin thecentreofKharkiv. Novictimshavebeenreported. TheUkrainianSecurityService(SBU)hasdetainedaRussiancitizennicknamed Teresa,whoworkedfortheself-proclaimedDonetskpeople'srepublicand coordinatedworkofsabotagegroupsinKharkivRegion. Also,lastweekabout100peopleweredetainedinOdessaonsuspicionof terrorism. AccordingtoPresidentPetroPoroshenko,terroristsplannedtocarryoutacts ofprovocationinOdessaon1-2May.Inaddition,thepresidentsaidthatthe saboteurspreparedtomurderOleksiyHoncharenko,deputyheadofthe PoroshenkoBlockparliamentaryfaction. Ukraine'sparliamentbansCommunistandNazipropaganda On9April,theVerkhovnaRadaofUkraineadoptedapackageoflawsintended toreducetheimpactofcommunismonthecountry. Inparticular,parliamentpassedalawwhichcondemnstheactivityofthe communistandnational-socialist(Nazi)totalitarianregimesandintroducesa banonthepublicuseandpropagandaoftheirsymbols. Localauthoritiesarenowobligedtorenametheregions,districts,cities, 9 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 villages,andstreetswhichbearSovietnamesaswellastoremoveall monumentstoSovietleaders. Thesameday,lawmakerspassedalawonthedeclassificationofarchivesofthe SovietKGB. Additionally,parliamentpassedalawondeclaringUkrainianPeople'sRepublic (UNR),theWestUkrainianPeople'sRepublic(ZUNR),theUkrainianInsurgent Army(UPA),theOrganizationoftheUkrainianNationalists(OUN),andother similarorganizationsasfightersforindependenceofUkraine. TheVerkhovnaRadaalsorenamedvictoryDay(overNaziGermanyintheGreat PatrioticWar),whichisannuallymarkedon9May,intoVictoryDayover NazisminWWII. Ukrainiansecurityservicesquestioncommunistpartyleader On6April,theSecurityServiceofUkraine(SBU)questionedtheleaderofthe CommunistPartyofUkraine,PetroSymonenko. TheSBUsaidthatSymonenkohadbeenquestionedaspartofaninvestigation intocrimesagainstthefundamentalsofnationalsecurity.Inhisturn,the politiciansaidthathehadbeenquestionedasawitness. Ukrainianparliamentrecognizesvolunteersoldiersasparticipantsin combatactions On7April2015,theUkrainianparliamentpassedalawentitlingvolunteer battalionfighterstoapplyforthestatusofparticipantsincombatactions. Thedocumentalsoidentifiesaswarparticipantsthestaffofcompaniesand organizationswhoweredirectlyinvolvedinprovidingfortheantiterrorist operation. On11April,DefenceMinisterStepanPoltoraksaidthatallvolunteerunits wouldbecomepartoftheArmedForcesorregularunitsoftheNationalGuard. Mobilizedstudents,postgraduatestudentsfreedfrommilitaryservicein Ukraine On7April,theUkrainianparliamentexemptedstudentsandpostgraduate students,whoweremobilizedintothearmy,frommilitaryserviceduringa specialperiod. UkrainianMPssuggestcriminalresponsibilityforabuseofdisciplinary powerbymilitaryofficials On7December2015,parliamentadoptedalawsuggestingcriminal responsibilityforabuseofdisciplinarypowerbymilitaryofficialsagainst subordinates. Ukrainianpresidentsignslawtoadvanceintelligence PresidentPetroPoroshenkohassignedthelawwhichallowsforadvanced 10 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 activitiesofintelligenceagenciesinUkraine.Inparticular,itregulatestheir operationsonoccupiedterritories. Ukrainianpresidentagreestodisbandspecializedpolicedepartments PresidentPetroPoroshenkohassignedalawwhichdisbandsthemain departmentforfightingorganizedcrime,theveterinarypolice,thejuvenile criminalpoliceandthetransportpolicewithintheInteriorMinistry'sstructure. TheSecurityServiceofUkrainewilloverseeeffortsagainstorganizedcrime, whilethecentralexecutivewilltakecareofveterinarymedicine. Ukrainianparliamentchangesnumberofborderguards,securityservice officers On9April2015,theUkrainianparliamentpassedalawwhichincreasesthe contingentoftheStateBorderServiceby3,000upto53,000. MPsalsoagreedtocutthenumberofSecurityServiceofUkraine(SBU)officers by4,000to27,000inthetimeofpeace. Ukraine'sdefencecouncilpresentsnationalsecuritystrategy On9April2015,thesecretaryoftheNationalSecurityandDefenceCouncil, OleksandrTurchynov,presentedadraftofthenationalsecuritystrategy. Accordingtoit,thekeychallengesincludeRussia'saggressivepolicy,corruption andineffectivestategovernance,theeconomiccrisis,limitedfinancialresources ofthestateanddeterioratingwell-beingofthepopulation. UkraineconsidersEuropeanandEuro-Atlanticintegrationasapriority directioninitsforeignanddomesticpolicy,thedraftreads. Tymoshenko'scasefilesvanishfromProsecutor-General'sOffice Preparingtoescape,formerProsecutor-GeneralViktorPshonkaandhis accompliceshavedestroyedsomecriminalcasesandclassifiedfiles, Prosecutor-GeneralViktorShokinhassaidinaninterviewwiththenewsand analysiswebsiteLB.ua. Amongthemissingfiles,hesaid,areYuliyaTymoshenko'scasesontheKyoto protocolandthepurchaseofambulancesandapartofYevhenShcherban's case. ShokinsaidthatcriminalcaseswereopenedagainstPshonkaandhisdeputy RenatKuzminoverabuseofpowerandtamperingwithcases. ThepressserviceoftheRightSectorpartysaidthataftertheEuro-Maydan protests,somefilesfromTymoshenko'scriminalcasesweremadeavailableto theparty,howevertheywerelaterconfiscatedbythemaindirectorateofthe InteriorMinistryinKiev. UkrainejoinsEUsanctionsagainstoustedpresident UkraineandanumberofEuropeancountrieswhicharenotpartoftheEUbut whichadoptasimilarstrategyofrelationswiththeEU(Norway,Montenegro, 11 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 Iceland,Albania,Lichtenstein,andMoldova)havejoinedthesanctionswhich theEUhadimposedonoustedUkrainianPresidentViktorYanukovychandhis 17allieson6March. WewouldliketopointoutthatUkrainianProsecutor-GeneralViktorShokin saidinaninterviewwiththeLB.uanewsandanalysiswebsitethatYanukovych hadpersonallyorderedtoopenfireonactiviststakingpartintheprodemocracyandpro-EUprotestsinKiev'scentralsquare. Shokinaddedthatthemoney-launderingschemesdevisedbytheteamofthe oustedpresidentwerestillworking. Ukraine'ssecurityserviceopenscaseagainstex-presidentover usurpationofpower On9April2015,theSecurityServiceofUkraine(SBU)openedacriminalcase againstex-PresidentViktorYanukovych,ConstitutionalCourtjudgesanda numberofotherformerofficialsoverusurpationofpowerin2010. On8December2004,theUkrainianparliamentamendedtheconstitutionto moveUkrainefromthepresidential-parliamentarytoparliamentarypresidentialformofgovernance.Intheautumn2010,theConstitutionalCourt ruledthislawillegalandrestoredthe1996Constitution. On21February2015,theUkrainianparliamentapprovedthereturntothe 2004Constitution. Ukraine'ssecurityservicepresseschargesagainstformerchief TheSecurityServiceofUkraine(SBU)suspectsitsformerchiefOleksandr Yakymenkooffinancingterrorismandarmstrafficking. TheEUliftedsanctionsfromYakymenkoon6March2015. HewasputonwantedlistinApril2014onsuspicionofabuseofpoweror office. Ukraine'ssecurityserviceaccusesex-premieroffinancingdisturbancesin Ukraine ActivitiesaimedatdestabilizingthesituationinUkrainehavebeenfinancedby theofficesofformerUkrainianpoliticiansMykolaAzarov,OlehTsaryovand VolodymyrOliynyk,whoareallstayinginMoscownow,theSecurityServiceof Ukraine(SBU)hassaid. Parliamentsetsupworkinggroupstoprobecorruptionincabinet,check tariffs On10April2015,theUkrainianparliamentsetupaworkinggroupto investigatecorruptioninthecabinetofArseniyYatsenyuk,allegationsof whichweremadebyMykolaHordiyenko,aformerheadoftheStateFinancial Inspectorate. 12 AfterthecabinetdismissedHordiyenko,hesaidthathisofficerevealed corruptionschemesthroughwhichthegovernmenthadinflictedlossesworth 7.6bnhryvnyas(330mdollars)onthestate.However,thecabinetsaidthat ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 mostoftheallegationsconcernedthegovernmentsofYuliyaTymoshenkoand MykolaAzarov. Parliamenthasalsosetupaworkinggrouptocheckiftheincreaseinutilitybills wasjustified. FormerheadofStateFinancialInspectoratefacescriminalcase AcriminalcaseonbriberyhasbeenopenedagainstaformerheadoftheState FinancialInspectorate,MykolaHordiyenko,theInteriorMinistry'spressservice hassaid. ThecasewasopenedafterUkrzaliznytsya's(UkrainianRailway)ex-director BorysOstapyukandUkrposhta's(UkrainianPost)ex-directorVasylVeselyy madestatementsthatHordiyenkodemandedabribewhenhewasinspecting theircompanies. AccordingtotheJusticeMinistry'sdata,theformerofficialdidnotcarryoutover 70percentofgovernmentinstructionsoninspectionsatstatecompanies. AnticorruptionBureautobecomeoperationalbyyear-end–presidential administration On7April2015,theselectionpanelfortheNationalAnticorruptionBureau shortlistedtwocandidatesforbureauchief–lawyersArtemSytnykandMykola Siryy–andsubmittedtheirprofilesforconsiderationbyPresidentPetro Poroshenko. Theheadofstatehasaweektoappointthechiefofthebureau. Thepresidentialadministrationexpectsthepresidentialadministrationtotake toworknotuntiltheendoftheyear. CourtissuesarrestwarrantforformerUkrainianMP TheProsecutor-General'sOfficehasservedanoticeofsuspicionagainstPartyof Regionsex-MPAndriyPinchukwho,asamemberoftheparliamentary tabulationcommission,signedtheprotocolduringthe16January2014voteon theso-called"dictatorshiplaws". ThePGOsaidthatthePecherskyydistrictcourtissuedanarrestwarrantfor Pinchuk. Ukraine'sKramatorskprosecutordetained On6April2015,employeesoftheSecurityServiceofUkraineandthemilitary prosecutor'sofficedetainedtheprosecutorofKramatorskinDonetskRegion, AndriySukhynin,hisdeputyandtheheadofthedepartmentforfighting economiccrimesintheKramatorskpoliceforbribery. Aftersearchingtheirhomesandoffices,lawenforcersconfiscated225,000 dollarsincash,documentsandrecordsshowingthattheyhadreceivedbribes frombusinessmenonamonthlybasis. 13 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 On9April,acourtputSukhyninandhisdeputyincustodyandgrantedthem bailof3.45mhryvnyas(150,000dollars).Thepoliceofficerwasgrantedbailof 360,000hryvnyas(15,700dollars). LastweekpolicecaughtthedirectoroftheKiev-basedUkrspetszemred-handed whenhewasacceptingabribeof200,000dollars,thedeputyheadofthe Chernivtsiregionalcourtofappealonabribeof15,000dollarsandanemployee oftheKharkivregionaldirectorateoftheAntimonopolyCommitteeofUkraine onabribeof15,000hryvnyas(650dollars). ProsecutorsprobingInter'spurchasefromRussianChannelOnefor financingofterrorism TheProsecutor-General'sOffice(PGO)hasopenedacriminalcaseonfinancing ofterrorismduringthepurchaseof29percentofsharesofInterTVbyGDF MediafromRussia'sChannelOnefor100mdollarson3February2015,thePGO hassaidinreplytoMPIhorAlekseyev'sinquiry. GDFMediaLimitedisownedbytycoonDmytroFirtashandaformerheadof ex-PresidentViktorYanukovych'sadministrationandOppositionBlocMP, SerhiyLyovochkin.AsaresultoftheFebruarydeal,theircompanygainedfull controlofInterTV. ThePGOisalsocheckingwhetherIhorPluzhnykov'ssignatureonthepowerof attorneywasfakedduringthealienationofInterTVsharesin2005. Prosecutorsrenew10-year-oldcaseagainstDnipropetrovsktycoon TheProsecutor-General'sOfficehasrenewedacriminalinvestigationagainst tycoonIhorKolomoyskyysuspectinghimoforganizinganattemptonthelife oflawyerSerhiyKarpenkoduetotheconflictaroundtheZaporizhzhya-based Dniprospetsstalplantin2005,Prosecutor-GeneralViktorShokinhassaidinan interviewwiththenewsandanalysiswebsiteLB.ua. Ukrainianparliamentauthorizesdisclosureofinformationfromstate registers On9April2015,theUkrainianparliamentpassedabillamendingcertainlaws whichregulateaccesstopublicinformationmakingitanopensource. Thedocumentsaysthatopen-sourceinformationfromstateregisters,NGOsand informationfromtheSingleStateRegisterofLegalEntitiesandIndividuals shouldbepublishedonasinglestateportal. Constructioncontrolfunctionspassedtolocalauthorities TheUkrainianparliamenton9Aprilapprovedalawthattransfersthe government'sfunctionsofarchitectureandconstructioncontroltolocal governmentsandlocalexecutivebodies.Thedocumentalsoimprovestheurban planninglegislation. 14 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 Officialsdeclareincomes TheincomeofUkrainianPresidentPetroPoroshenkoin2014was368.9m hryvnyas(16mdollars),accordingtotherespectivedeclaration. PrimeMinisterArseniyYatsenyukandparliamentspeakerVolodymyr Hroysmanhavedeclared1.15mhryvnyas(50,000dollars)and1.45mhryvnyas (63,000dollars),respectively. 5.MEDIA PublictelevisionlaunchedinUkraine On7March2015,PresidentPetroPoroshenkosignedthelawonpublic televisionandradiobroadcastinginUkraine.Publictelevisionwaslaunchedthe sameday. PublictelevisionisestablishedonthebasisofnationwideandregionalstateTV radiocompanies. 6.ECONOMY GovernmentnamesEurobondstoberestructured TheUkrainiancabinethaspublishedalistofEurobondswhicharetobe restructured.ThelistincludesEurobondsissuedin2005-13andmaturingin 2015-23,specifically,thesecuritiesofstate-runOshchadbank(SavingsBank), Ukreximbank,aswellasUkrzaliznytsya(UkrainianRailways),Ukravtodorand debtsoflocalcouncils. Atthesametime,thecreditors'committee(holdinggovernmentbondsfor10bn dollars)chairedbyFranklinTempletonhasapprovedthesecurities restructuringbutwithoutsignificantwrite-downs. S&PlowersUkraine'sforeigncurrencyrating Standard&Poor's,aglobalratingagency,hascutcreditratingofUkrainein foreigncurrencyfrom'CCC-'to'CC'(currentlyhighlyvulnerable)duetothe government'splanstorestructureitsexternaldebt.Theratingoutlookis negative. Itshouldalsobenotedthatanotherglobalratingagency,RatingandInvestment Information,Inc.(Japan)hasloweredtheratingofUkraine'sobligationsfrom 'CCC'to'CC'(apre-defaultlevel)andplacedtheratingunderreviewforpossible furtherdowngrade. AnnualinflationinUkraineacceleratesto45.8percent AccordingtotheStateStatisticsService,inflationinUkraine(excludingCrimea andtheoccupiedpartofDonbas)inMarch2015reached45.8percentagainst 15 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 March2014.Atthesametime,consumerpricesinMarch2015increasedby 10.8percentascomparedtoa3percentriserecordedinFebruary2015. DuringJanuary-March2015,inflationacceleratedto20.3percentcomparedto thesameperiodofthepreviousyear. TheNationalBankexpectsannualinflationinthesecondquartertoexceed50 percent. GovernmentexpectsGDPtogrowby2percentin2016 TheUkrainiancabinethassubmittedtoparliamentabudgetresolutiondraft (fiscalpolicyguidelines)for2016,whichisbasedontheGDPgrowthforecastof 2percent,theinflationrateof9percentandtheaverageannualexchangerate ofUAH/USD22.5. ItshouldbenotedthatratingagencyS&PforecaststhatUkraine'seconomywill contractby7.5percentin2015andshouldreboundby2percentalreadyin 2016. Foreignexchangereservesgrowto9.97bndollars ForeignexchangereservesofUkraine'sNationalBankinMarch2015increased by4.35bndollarstoreach9.97bndollarsason1April. SuchgrowthofthereserveswasprimarilyduetoborrowingsfromtheIMF. Itshouldbenotedthatthehryvnyaratestrengthenedlastweek.On13April, theNationalBanksettheofficialhryvnyarateatUAH/USD22.88. Treasuryaccountbalancereaches1.4bndollars Accordingtothecabinet,thebalanceofthetreasuryaccountasof5Aprilwas 32bnhryvnyas(1.39bndollars). InMarch2014,thetreasuryaccountbalanceamountedto108,000hryvnyas (4,700dollars). Governmentplanstosell342enterprisesin2015 Thegovernmenton6Aprilapprovedthelistofstate-ownedenterpriseswhich aretobeprivatizedin2015,expandingthelistwithseveralports,“Ukrainian DanubeShippingCompany”andanumberofotherstate-ownedenterprises. Thelistofstate-ownedassetstobeprivatizedconsistsof342facilities, includingmines,regionalpowerdistributioncompanies,andmunicipalgas distributioncompanies. ItshouldbenotedthattheAgrarianPolicyMinistryon9Aprilsigneda memorandumofunderstandingandcooperationwiththeInnovationand 16 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 DevelopmentFundofGeorgia.Thedocumentenvisagescooperationin privatizationofUkrainianstate-runenterprises. Cabinettoallocate870mdollarstoDepositGuaranteeFund Thegovernmenton6ApriladoptedaresolutionthatorderstheFinance Ministrytoissuedomesticgovernmentloanbondstothetuneof20bnhryvnyas (870mdollars)forthepurposeofreplenishingassetsoftheDepositGuarantee Fund. Itshouldbementionedthatcurrentlytherearemorethan50banksunderthe fund'scontrol. CourttoconsidervalidityofDniproenerhoprivatization TheProsecutorGeneral'sOfficehasappealedtothecourtregardingthevalidity oftheprivatizationofDniproenerho,Ukraine'smajorpowergenerating company,byenergyholding“DTEK”ownedbyRinatAkhmetov. Similarlawsuitshavebeenfiledregardingthelawfulnessoftheacquisitionof sharesinDonbasenerhoandZakarpattyaoblenerho. Akhmetov'sMetinvestsaysinpaymentdefault Metinvest,aminingandsteelholdingcompany,ownedbybusinessmanRinat Akhmetov,hasannouncedthatitiscurrentlyinapaymentdefault. Lastyearthegroup'snetprofitdroppedby59percentcomparedwith2013to 159mdollars. MetinvestownssteelandminingassetsinUkraine,EuropeandtheUnited States.MetinvestwasthelargestcompanyinUkrainebyrevenueoverthelast severalyears. CabinettransferssharesinTitanium&MagnesiumCombinetostateownedcompany TheUkrainiangovernmenton6Aprilhandedovercontrolofthestate shareholdingin“ZaporizhzhyaTitanium&MagnesiumCombine”(51percent) tostate-runenterprise“UnitedMiningandChemicalCompany”. ThecombineistheonlyproduceroftitaniumspongeinUkraineandEurope. Theremaining49-percentstakebelongstothecompaniesofGroupDFof DmytroFirtash. FoundedbytheIndustrialPolicyMinistryin2009,“UnitedMiningandChemical Company”includestheVilnohirskminingandsteelplantandtheIrshansk miningandprocessingmill. 17 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 ParliamentexpandspowersofAuditingChamber TheUkrainianparliamenton7AprilbroadenedthepowersoftheAuditing ChamberpertainingtocontrolofrevenuestothenationalbudgetofUkraine. Previously,theAuditingChambercontrolledonlyoutlaysfromthestatebudget. MPsobligebudgetadministratorstodisclosebudget-relatedinformation TheUkrainianparliamenton9Apriladoptedabillaccordingtowhich administratorsofbudgetfundsmustpublishreportsonfulfilmentofthestate budget(asopendata). Banksallowedtopartiallywriteoffforeigncurrencydebts TheUkrainianparliamenton9Aprilpassedabillontaxregulationsfor restructuringofforeigncurrencydebts.Thenewlawallowsbankstopartially writeoffdebtsonforeigncurrencyloanswithouttaxconsequences.Previously, similarrestructuringresultedinincreasedtaxliabilitiesforthebanks. Governmenttoeliminateinvestmentagency ThecabinethassetupaspecialcommissionforeliminationoftheStateAgency forInvestmentandManagementofNationalProjects. Itshouldbealsonotedthatparliamenton7Aprilpassedabillthatwillimprove managementofpublicinvestments. On9April,parliamentadoptedseveralbillsrequiredtoobtain500mdollars fromtheWorldBankundertheDPLprogrammeand300mdollarsfromthe Japanesegovernment. ParliamentabolishesaccreditationofpharmaciesandVATonimport drugs TheUkrainianparliamenton9Apriladoptedabillthatcancelsmandatory accreditationofpharmacies.Atthesametime,pharmaciesmustholdlicenses forretailsalesofmedicines. Onthesameday,parliamentpassedabillthatexemptsfromVATimportsto Ukraineofdrugsandmedicalproductsperformedundergovernment programmes. Inaddition,theNationalBankliftedrestrictionsonpaymentsforimportsof essentialgoods. Governmentappointstradecommissioner TheUkrainiancabineton8AprilappointedNatalyaMykolskaasdeputy ministerofeconomicdevelopmentandtradeandUkraine'stradecommissioner. 18 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 MykolskawillrepresentUkraine'sinterestsintheWTO. WizzAirtoretainitssubsidiaryinUkraine HungarianairlineWizzAirhasdecidedtokeepitssubsidiaryinUkraine(Wizz AirUkraine),asreportedbytheUkrainianInfrastructureMinistry. TheministryalsosaidthatIrishairlineRyanair,Europe'slargestlow-cost carrier,isconsideringenteringtheUkrainianmarket. 7.ENERGY Naftohaztodraw1.5bndollarsforfillingundergroundstorages Thestate-runenergycompanyNaftohazUkrayinyattheupcomingtrilateralgas talks(Ukraine-Russia-EuropeanUnion)isplanningtobringuptheissueof raising1.5bndollarsfromEuropeforpumping6bncu.m.ofnaturalgasinto Ukrainianundergroundgasstoragesduringthesummerperiod. Inaddition,UkraineexpectstoagreethetermsofRussiangassuppliesfora12monthperiod(currentlyUkrainehasagreedthegassupplytermsforonlyAprilJune). Thegastalksweretobeheldon13AprilinBerlin.However,asreportedbythe media,thetalkshavebeenpostponedontherequestoftheRussianside. Russiawants130mdollarsfromUkraineforgasdeliveriestoDonbas RussianEnergyMinisterAlexanderNovakhassaidthatfrommid-Februaryto 4AprilGazpromsuppliedtoDonbas400mcu.m.ofRussiannaturalgasworth 130mdollars. Gazpromconsidersthatthesedeliveriesarecarriedoutunderthecontractwith NaftohazUkrayiny,astate-runenergycompany.However,theUkrainianside considerssuchsuppliesillegal. AccordingtoUkrainianEnergyMinisterVolodymyrDemchyshyn,Ukraine continuestosupplygasandelectricitytoDonbas,althoughinsmallvolumes. Meanwhile,thegasdebtofconsumersintheantiterroristoperationzonehas reached9bnhryvnyas(390mdollars). MilitantscontinuetoexportcoalfromDonbastoRussia–OSCE Thepro-RussianmilitantscontinuetoexportcoalfromLuhanskRegiontothe RussianFederationthroughtheGukovoborder-crossingpoint,accordingtothe 9AprilreportbytheOSCEobservationmission. 19 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 UkrainesuspendsgasimportsfromHungaryandPoland Ukrainefrom8AprilsuspendedimportsofnaturalgasfromPolandand Hungary,thenewsagencyUkrainianNewshasreported,citingasourceinthe market. DeliveriesfromtheterritoryofSlovakiaremainatthesamestablelevel-upto 40mcu.m.perday. Ukrainecutsgastransitby31.4percent Accordingtothestate-runcompanyUkrtranshaz,UkraineinJanuary-March 2015reducedtransitofnaturalgastoEuropeandMoldovaby31.4percent comparedtothesameperiodin2014-to12.76bncu.m. InMarch2015,thetransitofgastoEuropeandMoldovafellby14.8percent comparedtoMarch2014-to4.85bncu.m. Parliamentpassesgasmarketlaw On9April,theUkrainianparliamentvotedthenaturalgasmarketbillwiththe amendmentthatprohibitsfreeuseofpublicgaspipelinesbyprivateoperators. Itshouldbenotedthatthemajorityofregionalgasdistributioncompaniesare controlledbybusinessmen,particularlyDmytroFirtash. Accordingtoexperts,theadoptionofthisbillmayleadtoevenhigherpricesof naturalgasforhouseholds,budget-fundedorganizationsandindustry,as reportedbytheZerkaloNedeliweekly. Naftohazexpects4.3bndollarsdeficitin2015 Accordingtoestimatesmadebythestate-runenergycompanyNaftohaz Ukrayiny,itsfiscaldeficitin2015mayreach93.31bnhryvnyas(4.3bndollars). Lastyear,thecompany'sfinancialdeficitamountedto96.92bnhryvnyas (8.05bndollarsattheaverageratein2014ofUAH/USD12.04). Atthesametime,Naftohazhascurrentexternalloansamountingto1.7bn dollars.Thecompanyalsoborrowed1.4bndollarsfromUkrainianbanks. UkrnaftatooffsetdividendsagainstNaftohaz'sdebts Ukrnaftaon10AprilforwardedastatementtoNaftohazUkrayinysayingthatit willnotpay2011-13dividendsof1.78bnhryvnyas(77mdollars)andwillcount themaspartialrepaymentofthedebtfornaturalgassuppliedinJanuaryFebruary2008. Previously,Naftohazadmittedthatithada3.75bnhryvnyas(163mdollars) debttoUkrnafta. 20 ©GorsheninInstituteApril2015Allrightsreserved INTHESPOTLIGHT ISSUE55(218) 04/13/2015 Since2003,Ukrnafta,inwhichthegovernment(representedbyNaftohazUkrayiny) owns50percent+oneshare,hasbeenrunbythemanagersaffiliatedwithPrivat GroupofIhorKolomoyskyy.ItwillbecomepossibletoreplaceUkrnafta's managementafter26May,whenthelawonshareholdersmeetingsquorumwill enterintoforce. NewUkrtransnaftaheadappointed On8April,thesupervisoryboardofUkrtransnafta,theUkrainianoilpipelines operator,appointedSerhiySukaloasactingboardchairmanforaperiodoffour months. Earlier,thesupervisoryboarddismissedthecompany'sboardchairman,Oleksandr Lazorko,whoisaffiliatedwithPrivatGroupofIhorKolomoyskyy. ChernobylNPPpassestodecommissioningphase TheChernobylnuclearpowerplant(NPP)hasofficiallypassedtothe decommissioningstage. Thefinalclosureandconservationoftheplantwilltake10years. FoundedinJuly2010,GorsheninWeeklyisaweeklydigestofexpertanalysiscovering themostimportantpolitical,socialandeconomiceventsinUkraine.Itisthekey sourceofinformationaboutopinionpollscarriedoutbytheGorsheninInstituteas wellasthebestprofessionalcommentariesonrecentdevelopments. GorsheninWeeklyisavailableinRussianandEnglish. GorsheninWeeklyhasover700subscribersintheEU,theUSA,Russia,Ukraineand othercountries.Itsregularcustomersarerepresentativesoftheembassies,the EuropeanCommission,theEuropeanParliament,theUSDepartmentofState,leading internationalanalyticalcentres,Ukrainianandinternationalmassmedia. IfyouwishtosubscribetoGorsheninWeeklypleasesendyourrequesttothefollowing e-mailaddress:weekly@gorshenin.eu. Ourcontactinformation: 18bMalaZhytomyrskast., Kiev01001,Ukraine +380442304962 +380442304966f kipu@kipu.com.ua Formoreinformationpleasevisitourwebsite http://gorshenin.eu/ 21 ©GorsheninInstituteApril2015Allrightsreserved
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