aaus-list @ ukrainianstudies.org -- [aaus-list] Fwd: Ukraine Today -- 11.02.2002

[Robert De Lossa <radelo@earthlink.net>]

[from "Yaroslav Davydovsky  {20122}" <sda@ukrainet.lviv.ua>]

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   UKRAINE TODAY
   Main weekly events from Infobank News Agency


   11 February 2002



   * YURIY BOIKO APPOINTED BOARD CHAIRMAN OF NAFTOHAZ UKRAYINY
   * KYIV ECONOMIC COURT ANNULS 1+1 TV CHANNEL'S LICENSE
   * UKRAINE'S FOREIGN TRADE TURNOVER LAST YEAR 10% HIGHER, ACCORDING TO
     ECONOMY MINISTER SHLAPAK
   * CONSTITUTIONAL COURT UPHOLDS CANCELLATION OF TAX BREAKS FOR COMPANIES WITH
     FOREIGN INVESTMENTS
   * STATE COMMITTEE ON SECURITIES REFUSES TO REGISTER NAFTOHAZ UKRAYINY'S
     EUROBONDS
   * THIRTY-FIVE POLITICAL PARTIES AND BLOCS GET REGISTERED FOR PARLIAMENTARY
     ELECTION
   * PRESIDENT KUCHMA APPROVES ACTION PLAN TO COMPLETE UKRAINE'S ENTRY IN WORLD
     TRADE ORGANIZATION
   * VERKHOVNA RADA ADOPTS LAW ON JUDICIAL SYSTEM
   * KUCHMA SIGNS LAW ON LICENSING PRODUCTION OF CDs
   * FOREIGNERS INVESTED US$ 4 BILLION IN UKRAINE, SAYS ZHALYLO
   * L. KUCHMA SIGNS DECREE APPOINTING IVAN CHYZH HEAD OF STATE COMMITTEE FOR
     INFORMATION POLICY






   YURIY BOIKO APPOINTED BOARD CHAIRMAN OF NAFTOHAZ UKRAYINY

   KYIV. On January 31 the Ukrainian President dismissed Vadym Kopylov from
   his post as Board Chairman of NaftoHaz Ukrayiny company, replacing him
   with Yuriy Boiko. Before this appointment, Mr. Boiko headed the
   Kremenchuk-based oil refinery UkrTatnafta and earlier the Lysychansk-based
   oil refinery Lynos.


   KYIV ECONOMIC COURT ANNULS 1+1 TV CHANNEL'S LICENSE

   KYIV. Kyiv's economic court has satisfied a claim filed by AITI TV
   company against the National Council for TV and Radio Broadcasting,
   declaring Studio 1+1 Ltd's TV broadcasting license invalid, the TV channel
   Inter quotes Viktor Leshyk, a Council member, as saying at a press
   conference on February 4.

   According to Mr. Leshyk, although the National Council has not received
   any official information on the court ruling, it [Council] is going to
   appeal against it.

   Viktor Leshyk also said that the TV company AITI had filed a claim against
   the National Council for TV and Radio Broadcasting with the economic court
   of Kyiv, demanding that the Council render invalid the documents on 1+1
   Studio's additional broadcasting time on UT-2 channel. The 1+1 Studio
   itself was a third party in the claim.

   Having considered the claim, the economic court of Kyiv rendered invalid
   not only the documents on 1+1 Studio's additional time on UT-2 channel,
   but also a license for main time broadcasting on UT-2 by this studio. The
   court obligated the National Council to announce a tender for broadcasting
   on UT-2 and prohibited 1+1 Studio from broadcasting on this channel.


   UKRAINE'S FOREIGN TRADE TURNOVER LAST YEAR 10% HIGHER, ACCORDING TO
   ECONOMY MINISTER SHLAPAK

   KYIV. The preliminary figures for the year 2001 show that Ukraine's
   foreign trade turnover last year was 10 percent higher than in 2000,
   Oleksandr Shlapak, the country's Minister of Economy and European
   Integration, told reporters.

   According to for-ua.com, Mr. Shlapak said that Ukrainian foreign trade
   turnover's favorable balance last year is estimated at nearly UAH 2
   billion. This figure, said the Minister, is higher than the government's
   forecast, according to which the increase in turnover would be 7 percent.

   Over the first 9 months of the previous year, Ukraine's foreign trade
   balance in commodities and services was higher than that in
   January-September 2000 by 12.2 percent, amounting to US$ 26,839,600,000.


   CONSTITUTIONAL COURT UPHOLDS CANCELLATION OF TAX BREAKS FOR COMPANIES WITH
   FOREIGN INVESTMENTS

   KYIV. On February 5 the Constitutional Court of Ukraine ruled that the
   refusal to grant privileges and cancellation of the privileges granted to
   companies with foreign investments earlier, regardless of the time the
   investments were made and registered, is lawful. The Court ruling was
   announced by Judge Volodymyr Ivashchenko.

   The Constitutional Court ruled, following the government's request, that
   provisions of the law "On the elimination of tax discrimination against
   business entities founded using the assets and resources of Ukrainian
   origin", which was passed in February 2000, serve as a basis for a refusal
   to grant privileges, and cancel the priviliges given earlier, to companies
   with foreign investments in the sphere of currency and customs regulation,
   regardless of the time the foreign investments were made and registered,
   including settling disputes in court.

   According to Mr. Ivashchenko, Constitutional Court judges also arrived at
   a conclusion that neither Ukraine's special legislation on foreign
   investments nor state guarantees for foreign investments regulate the
   issues of currency, taxation and customs legislation effective in Ukraine,
   unless otherwise specified by the international agreements signed by
   Ukraine and ratified by its parliament.

   As Infobank has reported earlier, on February 24, 2000 President
   Kuchma signed the law, passed by parliament Feb.17, which aimed
   to stop the discrimination in the taxation of domestic and joint
   venture companies. The law cancels tax breaks for JVCs, their
   subsidiaries, separate structures, and offices of non-residents,
   and imposes for them the same taxes which are paid by domestic
   entities.

   The law, however, retains the original import tax exemptions for those
   companies which have received credits from international finance
   organisations against the state guarantees - until the full repayment of
   their debts for foreign credits or until the emergence of an insured
   accident.

   On January 8, 2002, the Ukrainian President has signed the
   government-proposed changes to some Ukrainian laws. Under the
   changes, which were passed by parliament on December 20, all
   companies with foreign investments must pay all taxes and make
   other obligatory payments in line with the existing legislation -
   regardless of the type and time of the investment made.

   For instance, the law envisages that changes be made in the law on
   investment activities which would rule out the possibility of having
   a differentiated taxation system for companies with foreign
   investments and subsidizing them. It also proposes to cancel the norm
   which leaves unchanged provisions of investment agreements and upholds
   state guarantees for investments if new customs, taxation, license and
   currency legislation, passed later, makes the terms of investing worse
   as well as the norm giving a foreign investor the right to demand
   compensation through court if the state worsens investment terms.

   The law also makes changes in the law on value-added tax. The changes
   would mean that the companies with foreign investments and business
   entities exempted from VAT that switched to a simplified system
   of taxation, which cancels VAT, lose the right to a tax credit and VAT
   refund from the day they switch to the new form of taxation.


   STATE COMMITTEE ON SECURITIES REFUSES TO REGISTER NAFTOHAZ UKRAYINY'S
   EUROBONDS

   KYIV. Ukraine's state committee on securities and stock market has
   refused to register the issue of eurobonds worth US$ 1,401,000,000 by the
   state-run company Naftohaz Ukrayiny. The company was going to issue the
   bonds with a view to restructuring its gas debt to Russia's Gazprom,
   for-ua.com quotes a source in the committee as saying.

   According to the source, the committee believes that the terms of issuing
   eurobonds by Naftohaz Ukrayiny do not comply with Ukrainian legislation.
   He added that the decision about approving the eurobond issue will be
   considered by a special commission created within the committee on
   securities and stock market.

   As Infobank has reported earlier, on October 4, the prime ministers
   of Ukraine and Russia signed an agreement to restructure Ukraine's
   debt for gas, as of June 1, 2000, for twelve years with a 3-year grace
   period.

   The debt is to be repaid in eurobonds issued by Ukraine's Naftohaz
   Ukrayiny, with LIBOR+1% interest. The amount of the restructured debt
   is US$ 1,401,400,000.

   Under the same agreement, Ukraine will not be able to export
   Russian gas, unless the domestic demand has been first met. Ukraine
   will be allowed to export only domestically-extracted gas. The size
   of export duty on gas, according to Mikhail Kasianov, will be set
   every year before the start of the subsequent year. The mode
   of Ukrainian gas export will be discussed by representatives of the
   authorized work groups.

   On February 4, the Russian concern Gazprom did not accept the
   eurobonds issued by Naftohaz Ukrayiny with a view to repaying its
   gas debt, for-ua.com quotes a source close to Naftohaz Ukrayiny
   as saying. According to the source, the Russian party has not
   yet given the Ukrainian company the number of the account to
   which the bonds must be transmitted.

   The source went on to say that Gazprom is not satisfied with the
   level of bond liquidity as the Ukrainian-Russian October 4, 2001
   agreement on gas debt restructuring does not contain clear
   requirements as to bond liquidity. Under the agreements reached
   by the two governments, on February 4 Naftohaz Ukrayiny shares
   were supposed to be listed on the Luxembourg stock exchange.


   THIRTY-FIVE POLITICAL PARTIES AND BLOCS GET REGISTERED FOR PARLIAMENTARY
   ELECTION

   KYIV. As of 24.00 of February 5, the Central Election Commission
   registered party lists of thirty-five political parties and blocs which
   will take part in the March 2002 parliamentary elections.

   In particular, running for seats in the legislature on party tickets will
   be candidates of the Our Ukraine bloc led by Viktor Yushchenko, the
   Democratic Party - the Democratic Union bloc, the For A United Ukraine
   bloc, the For Ukraine, Belarus, and Russia bloc, the Team of the Winter
   Generation bloc, the People's Movement of Ukraine bloc, the Nataliya
   Vitrenko bloc, the Yednist (Unity) bloc, the Raduha (Rainbow) bloc, the
   Russian Bloc, the Against All bloc, the Yulia Tymoshenko bloc, the
   Ukrainian Party and All Ukrainian Party of International Understanding
   (New World) bloc, as well as separate political parties including the New
   Force All-Ukrainian party, the All-Ukrainian Party of Workers, the
   All-Ukrainian Association of Christians, the All-Ukrainian Women For
   Future Association, the Communist Party of Workers and Peasants, the
   Communist Party of Ukraine, the Communist Party of Ukraine (new),the
   Liberal Party of Ukraine (new), the People's Party of Depositors and
   Social Protection, the All-Ukrainian Leftist Association Justice, the
   Party of Ukrainian Women, The Green Party of Ukraine, the New Generation
   Party, the Party for the Rehabilitation of Gravely Ill, the Yabluko Party,
   the Farmers' Party of Ukraine, the Socialist Democratic Party, the
   Socialist Democratic Party of Ukraine (united), the Ukrainian National
   Assembly, the Ukrainian Christian Movement Political Party.

   The Central Election Commission has refused to register only one bloc, the
   For Yushchenko bloc led by Olexandr Rzhavsky on the grounds that the bloc
   was joined by three party members after the election process got under
   way. Besides, the Kyiv Shevchenko Rayon Court has rendered the bloc's
   name, For Yushchenko, illegal on February 5.


   PRESIDENT KUCHMA APPROVES ACTION PLAN TO COMPLETE UKRAINE'S ENTRY IN WORLD
   TRADE ORGANIZATION

   KYIV. President Kuchma approved an action plan to complete Ukraine's
   accession to the World Trade Organization and instructed the government to
   oversee its implementation.

   The key items on this action plan include signing protocols on the access
   to the markets of goods and services with member states of the Work group
   on Ukraine's admission to the WTO; undertaking by Ukraine a commitment to
   transform its policy of state subsidies for agricultural producers in line
   with WTO standards; and harmonizing national legislation with WTO
   guidelines and requirements.

   The action plan also provides for the enactment of a new Tax Code of
   Ukraine; of a provision making it possible to increase the share of
   foreign investment in statutory funds of television, radio, and
   information agencies of Ukraine; of a permission to foreign banks to open
   their branches in Ukraine; lifting ceilings for exporting cattle and
   cattle products; lifting the requirement for a six-month break following
   the four-year activities in Ukraine of foreigners before resuming again
   their professional activities, and changing some other laws.


   VERKHOVNA RADA ADOPTS LAW ON JUDICIAL SYSTEM

   KYIV. On February 7, Verkhovna Rada adopted a new version of the law on
   judicial system, which envisages the cancellation of the division of
   general jurisdiction courts into criminal and civil ones, leaves unchanged
   the current composition and functions of the Supreme Court and provides
   the possibility to create additional judicial institutions - the appellate
   and cassation courts. The law was supported by 313 lawmakers.

   Under the law, the judicial system includes local courts or courts of
   general jurisdiction. Above them are the appellate courts that have been
   created already on the basis of oblast courts, as well as cassation courts
   and courts of appeal. The draft also envisages the creation of a system of
   specialized courts within general jurisdiction courts and empower the
   country's Supreme Court to perform the function of repeated cassation.

   The law also proposes to create a system of specialized administrative
   courts that correspond to the existing system of economic (arbitration)
   courts, maintain the system of martial courts, create qualification
   judicial commissions in the country's regions and specialized courts as
   well as the Supreme Qualification Commission. It also provides for the
   creation of the state judicial administration as a separate body of state
   power.


   KUCHMA SIGNS LAW ON LICENSING PRODUCTION OF CDs

   KYIV. President Kuchma sined the law on licensing production, export, and
   import of optical media products, which was initiated by Mykhailo
   Pavlovsky (Batkivshchyna Party) and Volodymyr Chekalin (Communist Party).

   The approved law differs from the bill submitted by the government in that
   it licensing will apply only to CDs with recordings, i.e. involving
   copyrights and related rights. The bill also does not apply to CDs
   transited via Ukraine, or imported and exported by individuals for their
   own use, or those sent by international mail.

   Unlike the government version, random checks of enterprises producing CDs
   can be carried out only following authors' written appeals about
   infringements on their copyrights. The bill also imposes liabilities for
   false claims by authors about infringements on their copyrights.

   On December 21, 2001, the United States Government announced that it was
   placing prohibitive tariffs on $75 million worth of metals, footwear, and
   other imports from Ukraine because of its failure to enact legislation to
   crack down on sound recording and optical media piracy. The sanctions will
   offset United States government estimates of the amount of annual damages
   that this piracy of optical media (CDs, CD-ROMs, DVDs, etc.), which
   includes unauthorized licensing and production, has caused to Americans.
   These sanctions came into force on January 23.

   According to USA, Ukraine's exports of unauthorized compact discs (CDs)
   are disrupting markets. For over two years, the United States has been
   urging Ukraine to take measures to stop this piracy and prevent its
   recurrence. Despite the commitments Ukraine made as part of the June 2000
   U.S.-Ukraine Joint Action Plan to Combat Optical Media Piracy in Ukraine,
   the Ukrainian Government has failed to curtail the piracy. Credible
   reports indicate that large volumes of optical media products continue to
   be pirated in Ukraine.


   FOREIGNERS INVESTED US$ 4 BILLION IN UKRAINE, SAYS ZHALYLO

   KYIV. Direct registered investments mad by Ukrainian residents in foreign
   countries have reached US$ 79 million for the last six years. In the same
   period direct foreign investments in Ukraine's economy have reached US$ 4
   billion, MigNews quotes head of the National Institute for strategic
   Studies department for social-economic strategy and economic security
   Yaroslav Zhalylo as saying, addressing the round table Export of Capital
   From Ukraine: a Rule or a Crime?

   According to Mr. Zhalylo, in independent experts' evaluations, up to US$ 3
   billion have been illegally funneled out of Ukraine annually since
   mid-90s. The capital outflow was caused by fears of investors that
   Ukraine's economy might stagnate. Mr. Zhalylo also noted that the assets
   of Ukrainian residents abroad, as of Oct. 1, 2001, have increased to US$
   11.5 billion since 1994, growing by US$ 1 billion in the first nine months
   of 2001.


   L. KUCHMA SIGNS DECREE APPOINTING IVAN CHYZH HEAD OF STATE COMMITTEE FOR
   INFORMATION POLICY

   KYIV. President Kuchma signed a decree appointing Ivan Chyzh head of the
   State Committee for Information Policy, Television, and Radio Broadcasting
   of Ukraine and dismissing its present head, Ivan Drach, from office,
   MigNews quotes Leonid Kuchma as saying on February 8 during a meeting on
   Ukraine's European integration policies.

   As Infobank has reported earlier, on February 7, Verkhovna Rada gave the
   all-clear to President Kuchma's suggestion to appoint Ivan Chyzh head of
   the State Committee for Information Policy. The motion was supported by
   282 deputies.

   In another resolution, Verkhovna Rada agreed for dismission the present
   head of this committee, Ivan Drach. This motion was supported by 253
   deputies.

   Ivan Chyzh is a member of the Ukrainian parliament, serving on the Supreme
   Council committee on the freedom of speech. He is also the leader of an
   all-Ukrainian left-wing union called "Justice".




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