aaus-list @ ukrainianstudies.org -- [aaus-list] Fwd: Ukraine Today -- 25.03.2002

[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


   25 March 2002



   * 37% WRITE-OFF OF TAX DEBT IN UKRAINE
   * GOVERNMENT PROPOSES MORATORIUM ON NEW TAX BREAKS TILL 2005
   * ANTI-MONOPOLY COMMITTEE SET TO CHECK IF "OIL MEMORANDUM" COMPLIES WITH
     ANTI-MONOPOLY LEGISLATION
   * NEW PARLIAMENT MUST URGENTLY PASS LAW ON REPRIVATIZATION, SAYS UKRAINIAN
     PRESIDENT
   * NATIONAL BANK ALLOWS AGENT EXCHANGE BANKS TO PERFORM OPERATIONS
     WITH EUROS
   * COURT TEMPORARILY REINSTATES LEONID HRACH AS CANDIDATE FOR CRIMEAN
     PARLIAMENT
   * YEVHEN CHERVONENKO FORCEFULLY ESCORTED TO PROSECUTOR'S OFFICE BY
     POLICE
   * SUPREME COURT OF UKRAINE REINSTATES MYKHAILO BRODSKY AS CANDIDATE IN THE
     GENERAL ELECTIONS
   * FOREIGN SHAREHOLDERS OF GOLDEN TELECOM DISMISSED COMPANY'S PRESIDENT YURIY
     BEZBORODOV
   * GENERAL ELECTIONS IS UKRAINE'S INTERNAL ISSUE, FOREIGN MINISTRY STATEMENT
     SAYS






   37% WRITE-OFF OF TAX DEBT IN UKRAINE

   KYIV. In 2001, the tax debt in Ukraine shrank by UAH 3.7 billion, or down
   by 37%, to reach UAH 6.3 billion due to tax debt write-offs envisaged by
   the law "On Procedure for Repaying Debts to Budget and State Funds by Tax
   Payers", deputy head of the State Tax Administration Volodymyr Rosolovsky
   told journalists on March 18.

   According to the official, there was a UAH 800 million shortfall due to
   corporate income tax breaks for companies investing in housing
   construction for servicemen, as well as UAH million shortfall in excise
   tax due to tax breaks for give-and-take contracts. Simultaneously, the
   government still owes about UAH 6 billion in VAT rebates to commercial
   entities.


   GOVERNMENT PROPOSES MORATORIUM ON NEW TAX BREAKS TILL 2005

   KYIV. The Ukrainian government has proposed to Verkhovna Rada to impose a
   moratorium until December 31, 2004 on any new tax breaks for importers,
   except import contracts related to international agreements on rendering
   technical, financial, and humanitarian assistance to Ukraine.


   ANTI-MONOPOLY COMMITTEE SET TO CHECK IF "OIL MEMORANDUM" COMPLIES WITH
   ANTI-MONOPOLY LEGISLATION

   KYIV. Ukraine's anti-monopoly committee is going to analyze the
   memorandum on coordinated actions in regulating the oil/petroleum products
   market in 2002, which was signed last February by the Cabinet of Ministers
   and representatives of oil companies, and check if it complies with the
   country's anti-monopoly legislation, Oleksiy Kostusiev, the committee
   chairman, told a press conference on March 18.

   According to Mr. Kostusiev, questions like this must be dealt with with
   the anti-monopoly committee's participation. However, the government did
   not ask the committee to take part in drafting the memorandum.

   As Infobank has reported earlier, on February 20 Prime Minister
   Anatoly Kinakh and representatives of major Ukrainian oil companies
   signed a memorandum on cooperated actions on the regulation of the oil
   and oil products market in 2002.

   The memorandum was signed by the following oil companies: Ukrtatnafta,
   Ukrtatnafta-Tsentr (Kremenchuk Oil Refinery), TNK-Ukrayina JVC (Lysychansk
   Oil Refinery), Lukoil-Ukrayina JVC (Odesa Oil Refinery),
   KazakhOil-Ukrayina (Kherson Oil Refinery), and NPK-Halychyna.

   Under the memorandum, the government is to render assistance in increasing
   the supplies of oil to Ukraine and make the oil refining sector attractive
   to foreign investors, cooperate with oil companies in expanding exports,
   develop an action plan for emergencies on the oil market, including
   additional customs duties on imported fuel and similar steps.

   On their part, the oil companies pledged all taxes due on transactions
   with oil and oil products, produce enough oil products to meet domestic
   demand, or up to 15 million tons, ensure high quality of oil products, and
   keep up stable prices for their goods.


   NEW PARLIAMENT MUST URGENTLY PASS LAW ON REPRIVATIZATION, SAYS UKRAINIAN
   PRESIDENT

   ZAPORIZHIA. The main task of the new Supreme Rada of Ukraine is to pass a
   law on reprivatization as "a lot of mistakes have been made" in the course
   of privatization in the country, for-ua.com quotes Ukrainian President
   Leonid Kuchma as saying during his visit to Zaporizhia on March 19.

   According to the President, in the first place it is necessary to
   reprivatize companies from those owners who "finish off" the plants they
   have bought and then leave them to the mercy of fate. The head of state
   also said that he is against the privatization of oblast
   energy-distributing companies, which must be fully state owned. He would
   like to see first how private oblast energy companies operate in
   comparison with state-owned ones before making the decision. Mr. Kuchma
   added that it is not necessary to carry out privatization hastily - given
   the slowdown in the world economy.


   NATIONAL BANK ALLOWS AGENT EXCHANGE BANKS TO PERFORM OPERATIONS
   WITH EUROS

   KYIV. The National Bank of Ukraine board of governors has allowed
   currency exchange banks working under agent agreements with commercial
   banks to carry out exchange operations with euros, the Inter TV channel
   reports, citing an NBU press release.

   As Infobank has reported earlier, the National Bank of Ukraine has
   approved a provisional regulation on the exchange of the national
   currencies of members of the European Currency Union (ECU) for the euro.
   Under the regulation, such transactions must be conducted only through
   authorized banks' cash departments and currency exchange counters; if the
   sum exceeds the equivalent of EURO 2,500, it must be exchanged only in
   cash departments.

   According to Serhiy Yaremenko, head of the NBU currency regulation
   department, a ban on conducting cash transactions with the euro by
   currency exchange counters operating under agency agreements with banks
   was imposed in order to give time for agent exchange counter operators to
   study euro bank notes.

   The regulation runs that the national currencies of members of the
   European Currency Union will be exchanged for the euro until the national
   currencies have been fully put out of circulation in their respective
   country. The money will be exchanged at the rate of the national
   currencies against the euro set by the European Central Bank as of January
   1, 1999. The exchange transaction may involve a commission charge worth
   up to 2% of the sum of the transaction. No sum will be paid into the
   pension insurance fund as the money is exchanged.

   Under the regulation, from January 1, 2002 until the national currencies
   of ECU members have been put out of circulation, authorized banks may buy
   them from natural entities for the hryvnia at a rate that cannot deviate
   from the rate set by the NBU by more than 5%. From 1 to 31 January 2002,
   banks will be allowed to sell currencies of ECU members for the hryvnia
   and give cash in the euro from accounts to natural and legal entities only
   if they must leave for EU countries.


   COURT TEMPORARILY REINSTATES LEONID HRACH AS CANDIDATE FOR CRIMEAN
   PARLIAMENT

   SYMFEROPOL. Crimean Appelate Court considered the appeal by Leonid Hrach,
   one of the candidates for a seat in the peninsular legislature, protesting
   a court decision which cancels his registration. The CAC ruled to suspend
   earlier court decision pending consideration of Hrach's appeal scheduled
   for March 27, a For-ua.com report says.

   As Infobank has reported earlier, on February 25 Symferopol's Tsentralny
   Rayon Court annulled the registration of Crimean parliament Speaker Leonid
   Hrach as candidate for a seat in the local legislature.

   The court ruling came in the wake of a complaint by an aide of another
   candidate, Ina Halkina. According to I. Halkina, some of the registration
   forms were not filled in by Mr. Hrach himself, as the law requires.
   Besides, Mr. Hrach did not declare some of his property in his income
   declaration.


   YEVHEN CHERVONENKO FORCEFULLY ESCORTED TO PROSECUTOR'S OFFICE BY
   POLICE

   KYIV. On March 20, police entered the press conference by Yevhen
   Chervonenko who is running for parliament on the Our Ukraine ticket and
   escorted his forcefully to the prosecutor's office. The police escort was
   headed by head of Shevchenko Rayon police precinct who had a warrant. Mr.
   Chervonenko obeyed the warrant and left under escort.

   As Infobank has reported earlier, Yuriy Haysynskyi, Kyiv prosecutor, said
   at a press conference on March 19 that Yevhen Chervonenko, a former
   chairman of the State Reserve and current candidate for a seat in
   parliament on the slate of the "Our Ukraine" bloc, is wanted by the
   prosecutor's office of Kyiv to explain why the state reserve did not
   execute in 2001 the ruling by the Kyiv economic court on the State Reserve
   dispute with the state company KyivMlyn.

   On March 20, Yevhen Chervonenko has dismissed the accusations made by
   Kyiv's Prosecutor's Office and told that he was shocked finding himself on
   the list of persons wanted by the police, because he had not received any
   writs to give evidence. He called the incident a provocation.


   SUPREME COURT OF UKRAINE REINSTATES MYKHAILO BRODSKY AS CANDIDATE IN THE
   GENERAL ELECTIONS

   KYIV. On March 21 the Supreme Court of Ukraine has invalidated the
   decision by the Central Election Commission suspending the registration of
   the Yabluko party leader and entrepreneur Mykhailo Brodsky as candidate in
   the general elections to Verkhovna Rada. The SCU ordered CEC to cancel
   its decision, an hq.org.ua report says.

   As Infobank has reported earlier, at its March 15 session, the Central
   Election Commission, CEC, has cancelled the registration of eight
   candidates from the Yabluko party ticket, allegedly for untrue information
   they entered in their income declarations. Among the group are Yabluko
   leaders Mykhailo Brodsky and Viktor Chaika.

   Mykhailo Brodsky, No. 1 on the party slate, failed to declare UAH 186,949
   in payments to various entities' statutory funds, while No. 2 on the
   Yabluko slate, Viktor Chaika, also did not enter in his declaration the
   UAH 188,126 he paid into statutory funds of some entities. Viktor Chaika's
   protest is being considered by the Supreme Court.


   FOREIGN SHAREHOLDERS OF GOLDEN TELECOM DISMISSED COMPANY'S PRESIDENT YURIY
   BEZBORODOV

   KYIV. General director of Golden Telecom fixed and mobile communications
   company Yuriy Bezborodov will be dismissed from office as of April 1, such
   was the decision of Golden Telecom foreign shareholders, Korrespondent.net
   reports, citing a reliable source. Meanwhile, Golden Telecom's press
   secretary Vyacheslav Fedchenko refused any comments on the issue, saying
   he does not have such information.

   As Infobank has reported earlier, Kyiv's prosecutors filed criminal
   charges against Golden Telecom management accusing it of grand theft of
   state property. On March 1 the office of the Golden Telecom company on
   Khreshchatyk in Kyiv was sealed by members of the Kyiv department for
   combating organized crime, Golden Telecom's press service report said.
   Simultaneously, the company's store on Sofievska St., switchboard on
   Lebedev-Kumach St, and call center were closed.

   According to Kyiv's acting chief prosecutor Ivan Derevianko, Golden
   Telecom, a trunk telephone communications operator, used Ukrtelecom's
   networks to service international trunk calls, paying to Ukrtelecom by
   local calls tariffs for such international calls. As a result, Golden
   Telecom was paying Ukrtelecom UAH 0.02 instead of US$ 0.1 per minute of
   telephone communications.

   On March 1 the office of the Golden Telecom company on Khreshchatyk in
   Kyiv was sealed by members of the Kyiv department for combating organized
   crime. Simultaneously, the company's store on Sofievska St., switchboard
   on Lebedev-Kumach St, and call center were closed.

   At the urgently called press conference, GT general director Yury
   Bezborodov said that the surprise check of the office by police on March
   can be explained by a 1.5 year-long conflict between GT and the Ukrtelecom
   open JSC that holds a monopoly for telephone communications in Ukraine.

   According to him, searched the office and technical premises of GT and
   seized the documents. As stressed by Mr. Bezborodov, the police had a
   search warrant and referred to some criminal case investigation which
   necessitated the search of GT office.

   The general director of GT reiterated that on February 28 he sent letters
   to Verkhovna Rada, government, presidential administration, and the
   National Defense and Security Council requesting their assistance in
   solving the artificially orchestrated conflict with Ukrtelecom. He also
   stressed that in 2001 Golden Telecom was the target of 53 official checks
   by various law enforcement agencies, with the number of unofficial checks
   much larger.

   GT chief administrator Jeff Howley said, addressing the press conference,
   that Yury Bezborodov cannot represent the company and can speak only for
   himself. He added that the GT board of directors does not share the views
   expressed by Yury Bezborodov to journalists. Following his brief
   appearance at the press conference, Jeff Howley left it refusing to take
   questions from journalists. Taking the floor again, Yu. Bezborodov said
   that there was an agreement with GT foreign partners not to make public
   comments on the situation until January 1, 2002, but the incident that
   happened on March 1 made him ignore the recommendations of his foreign
   partners who still believe in the peaceful solution of the conflict.

   In April 2001 the Kyiv Court of Arbitration has ruled that the open joint
   stock company UkrTeleCom must pay Golden Telecom nearly UAH 18 million and
   give it full access to Kyiv city telephone set for its 100,000
   subscribers. UkrTeleCom has also been obliged to meet the terms of
   HiproZvyazok Institute's design and provide Golden Telecom with 495
   trunks.

   On July 19, the board of the Supreme Arbitration Court of Ukraine has
   abrogated the ruling by the Kyiv Arbitration Court binding Ukrtelecom to
   provide free access to Kyiv's city telephone networks to Golden Telecom's
   100,000 subscribers, korrespondent.net report says. According to the
   Supreme Arbitration Court decision, Kyiv Arbitration Court's ruling runs
   counter to the laws of Ukraine and to the materials of the case. SAC
   obliged Golden Telecom to repay to Ukrtelecom UAH 17.8 million received
   earlier as sanctions.

   Few days later, President Kuchma dismissed Oleh Shevchuk from the post of
   head of the State Committee for Communications and Information, replacing
   him with Stanislav Dovhy, Ukrtelecom's board chairman.

   Golden Telecom, Ukrayina Ltd. is one of Ukrainian providers of integrated
   telecommunications services for corporate clients and communications
   operators. GT is part of the Golden Telecom Inc. holding company. GT
   provides services of stationery and mobile telephone(GSM-1800 standard)
   services in Kyiv and Odesa, as well as international telephone and
   Internet services in Ukraine's large cities.

   69% of Golden Telecom stock is owned by investors from Russia and United
   States and 31% by Ukrainian companies Agat-telecom and Brig-telecom. In
   1996 GT opened its communications network in Ukraine by investing US$ 42
   million under no government guarantees of repayment. In 2001, GT received
   US$ 37 million in profits, with after-tax profits of US$ 10.5 million. The
   company employs 400 Ukrainian residents.


   GENERAL ELECTIONS IS UKRAINE'S INTERNAL ISSUE, FOREIGN MINISTRY STATEMENT
   SAYS

   KYIV. On March 22, Ukraine's Foreign Ministry has made public its
   statement in the run-up of the election campaign, calling to show respect
   to the people of Ukraine, balanced and cautious approach, and be guided by
   such provisions of the international law as non-interference in internal
   affairs, respect of other countries' sovereignty and territorial
   integrity.

   The Foreign Ministry is carefully monitoring the reaction of other
   countries and their representatives to the upcoming parliamentary
   elections in Ukraine and attaches maximum importance to supporting
   political stability inside the country and maintaining Ukraine's image in
   the world, the statement stresses. The statement emphasizes that electing
   representatives to local councils and Verkhovna Rada is an exclusive
   sovereign right of the people of Ukraine. On its part, Ukraine is
   demonstrating absolute transparency, and the number of foreign observers
   is a convincing proof of this.




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