aaus-list @ ukrainianstudies.org -- [aaus-list] Ukraine Today -- 10.06.2002
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[from "Yaroslav Davydovsky {20122}" <sda@ukrainet.lviv.ua>]
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UKRAINE TODAY
Main weekly events from Infobank News Agency
10 June 2002
* PRESIDENT KUCHMA'S EDICT ON JOINING INTERNATIONAL CONVENTION ON HARMONIZED
SYSTEM FOR DESCRIBING AND CODING OF GOODS
* GOVERNMENT SENDS BUDGET 2003 RESOLUTION TO VERKHOVNA RADA
* CONSTITUTIONAL COURT CLARIFIES THE NOTION OF FREE MEDICAL AID
* ANATOLIY ZAYETS APPOINTED JUSTICE MINISTRY'S STATE SECRETARY
* UKRAINIAN-RUSSIAN CONTRACT ON LONG-TERM GAS TRANSIT INITIALED
* FINANCE AND CREDIT BANK TO SERVICE SOCIAL INVESTMENT FUND'S MONEY
* PRESIDENT KUCHMA INSTRUCTS GOVERNMENT TO REDUCE TAX BURDEN ON
UKRAINIANS
* UKRAINIAN GOVERNMENT SETS PRIVATIZATION TARGETS FOR 2002
* VERKHOVNA RADA ELECTS COMMITTEE HEADS
* OBOLON BREWERY OWNERS CONTROL 75 PERCENT OF STOCK
PRESIDENT KUCHMA'S EDICT ON JOINING INTERNATIONAL CONVENTION ON HARMONIZED
SYSTEM FOR DESCRIBING AND CODING OF GOODS
KYIV. President Kuchma signed an edict whereby Ukraine will sign on with
the international convention on Harmonized System for Describing and
Coding of Goods of June 14, 1983 together with changed envisaged by the
protocol of June 24, 1986.
GOVERNMENT SENDS BUDGET 2003 RESOLUTION TO VERKHOVNA RADA
KYIV. On June 1, the Ukrainian government submitted to Verkhovna Rada its
budget 2003 resolution, President Kuchma's permanent representative in VR
Oleksandr Zadorozhny told journalists.
According to him, the resolution approved by the government on May 15
contains that the government will form the 2003 budget using a new tax
base involving a reform of the income tax, improved mechanism for
collecting VAT, and cancellation of tax breaks for industry sectors.
To increase the revenue in 2003, the government plans to rebate VAT to
exporters without tax arrears, thus finally settling the issue in 2003.
As additional sources of budget revenue, the government wants parliament
to enact laws on repayment of corporate tax arrears on loans received
against government guarantees.
In the area of expenditure, the government proposes a transition from
funding budget-supported organizations to implementing through tenders a
state order for their services.
In addition, in the area of social protection the government will give up
its policy of awarding benefits and switch instead to giving targeted
assistance to low-income group of Ukrainians.
CONSTITUTIONAL COURT CLARIFIES THE NOTION OF FREE MEDICAL AID
KYIV. On June 4, the Constitutional Court of Ukraine made public its May
29 decision on the case initiated by 53 people's deputies regarding the
official interpretation of the clause of part 3 of Article 49 of the
Constitution of Ukraine, under which medical assistance in the country is
free. Consequently, medical assistance in state-run and communal
establishments should be provided free of charge.
In its decision, the Constitutional Court differentiates between the
notions of "medical assistance" and "medical services". Medical assistance
should be provided to citizens free of charge in state-run and communal
establishments and medical services can be provided to citizens on a
paying basis in medical establishments of various forms of ownership.
However, the Constitutional Court failed to provide a clear-cut definition
of the notions of "medical assistance" and "medical services" and
reporting judge Oleksandr Myronenko opined that a list of medical services
should be foreseen in a law drafted to this end.
The Constitutional Court has also rejected suggestions by certain state
bodies that limitations should be imposed on the free medical assistance
and that free medical services should be provided exclusively to
underprivileged citizens, or in keeping with a law passed to this end.
Mandatory health insurance, the Constitutional Court maintains, would not
run counter to the Constitution only in case the mandatory health insurance
payments are made not by natural persons, but by organizations,
establishments and enterprises employing them and from state funds set up
for this purpose.
Oleksandr Myronenko underscored that the decision of the Constitutional
Court on free medical assistance does not rule out joint participation of
the population in additional funding of the medical sector by way of
setting up unions and funds which will be regulated by a law drafted to
this end, as well as funding using proceeds from services provided,
proceeds from charity programs and funding provided by donors, charity
organizations and international humanitarian programs.
ANATOLIY ZAYETS APPOINTED JUSTICE MINISTRY'S STATE SECRETARY
KYIV. The President of Ukraine has appointed Anatoliy Zayets state
secretary of the Justice Ministry, Olena Hromnytska, Mr. Kuchma's press
secretary, told journalists. Until now Mr. Zayets has served as first
deputy state secretary of this ministry.
According to for-ua.com, the professional career of the 48-year-old Ph.D
(law) also includes work with the Institute of State and Law of Ukraine's
Academy of Sciences and at the Supreme Council secretariat, where he
served as first deputy chairman of the expert department. His previous
appointment as first deputy state secretary came in October 2001.
The previous state secretary of the Justice Ministry, Oleksandr
Lavrynovych, who occupied this post from July 2001 until May 7 this year,
is now Justice Minister.
UKRAINIAN-RUSSIAN CONTRACT ON LONG-TERM GAS TRANSIT INITIALED
KYIV. On May 31 representatives of Ukraine and Russia initialed in Kyiv
an inter-government contract on the volumes and terms of transiting
Russian gas via Ukrainian territory in 2003-2013. The contract is
expected to be signed on June 21 in Kharkiv during the meeting of the
Prime Ministers of the two countries, the press service of Naftohaz
Ukrayiny reported on June 5.
The contract guarantees the transit of at least 110 billion cubic meters
of Russian gas via Ukrainian territory to Western Europe annually. The
rate of payment for the transit will be set for each given year
separately. The deal also obligates Russia to transit via its territory
Middle Asian gas bought by Ukraine.
FINANCE AND CREDIT BANK TO SERVICE SOCIAL INVESTMENT FUND'S MONEY
KYIV. Ukraine's Finance Ministry has declared the Ukrainian bank Finance
and Credit and German Drezdner Bank winners of the competition for the
right to service the World Bank's loan within the Social Investment Fund
Project, reports the Delovaya Nedelia newspaper.
As Infobank has reported earlier, on February 5, President Kuchma
signed the law which parliament enacted on January 16 to ratify
a US$ 50.21 million loan extended to Ukraine by the World Bank
to implement the Social Investment Fund Project (SIF) in Ukraine.
The project is designed to support the Government's efforts to improve the
system of social services delivery, with a specific focus on disadvantaged
and poor population communities and disadvantaged groups of the population
who have suffered the most from the economic and social transition and ten
years of economic decline. The project also aims to promote community
participation in social services delivery.
The main objectives of this project are to improve the living conditions
of poorer and vulnerable groups of the population in targeted communities;
empower communities and vulnerable groups to address local social needs
and assist the reform of social protection by creating models of targeting
and service provision.
The total cost of the Social Investment Fund Project is US$ 70.09 million,
including the Bank loan of US$ 50.21 million and Government and local
community contributions of US$ 19.88 million. The loan will be at the
Bank's standard interest rate for LIBOR-based, single currency dollar
loans which is repayable in 20 years, including a 5-year grace period.
Since Ukraine joined the World Bank in 1992, commitments to the country
total more than US $3 billion for 23 operations.
PRESIDENT KUCHMA INSTRUCTS GOVERNMENT TO REDUCE TAX BURDEN ON
UKRAINIANS
KYIV. President Kuchma instructed the government to draw up draft
legislation aimed to reduce VAT, excises and taxes on natural persons.
In his address at the conference on the tax reform Leonid Kuchma stressed
that every fourth hryvnia in budget revenue represents some tax on the
incomes of Ukrainians, with 60 percent of working Ukrainians earning less
than UAH 170 (US$ 31) a month. According to the incumbent, tax burden
continues to grow and taxes already account for 50% of GDP, with tax
arrears reaching UAH 8.4 billion. In the president's opinion, the reason
for this is the existing 400 benefits to Ukrainians that almost equal the
budget revenue.
UKRAINIAN GOVERNMENT SETS PRIVATIZATION TARGETS FOR 2002
KYIV. The Ukrainian government has strongly criticized the work of the
State Property Fund in 2001 for the slow pace of privatization. The
government also set major targets for sales of state property in 2002.
The government's top priorities for 2002 include improving financial and
economic condition and investment attractiveness of enterprises to be
sold; bettering the ;procedure for selling controlling stakes to
industrial investors; and selling stakes in Ukrtelecom and electricity
utility companies.
The government ordered the SPF to step up preparations for the sale of
state property in 2002, notably, stakes in Rivneazot, the Crimean Soda
Plant, the Dnipropetrovsk Dzerzhynsky Steel Plant, the Oriana Company
(Kalush), and the Luhanskteplovoz Engine Locomotive Plant, simplify
procedure for selling stakes below 25% + 1 share in strategically
important companies, as well as lower the starting price of such stakes
which had been offered for sale two times.
The document also stresses the need to assess the propriety of selling
less than 25% stakes that have been transferred by the state to statutory
funds of state JSCs and holdings, if the latter fail to ensure adequate
management of these stakes. The document also obliges to restructure
debts of electricity companies and prepare the mechanism for selling these
companies prior to July 1, as well to prepare the privatization of
Ukrtelecom due late Q2 this year.
A mere 37.4% of receipts from privatization targeted for 2001 was
collected.
VERKHOVNA RADA ELECTS COMMITTEE HEADS
KYIV. On June 7, Verkhovna rada has elected heads and deputy head of its
committees, created an ad hoc oversight commission on privatization,
electing its head and first deputy head. This package motion was
supported by 235 lawmakers.
Verkhovna Rada elected such heads of its committees:
Vasyl Onopenko, BYuT (Yulia Tymoshenko Bloc) to head the committee for
legal policy;
Anatoly Matvienko (BYuT) to head the committee state building and local
government;
Viktor Khara, CPU(Communist party of Ukraine), to head the committee on
social policy and labor;
Mykola Polishchuk (Our Ukraine) to head the committee for the issues of
health care, motherhood, and childhood;
Yekateryna Samoilyk (CPU) to head the committee the issues of youth
policy, physical culture, sports, and tourism;
Stanislav Nykolaienko, SPU (Socialist Party of Ukraine), to head the
committee for science and education;
Les Taniuk, Our Ukraine, to head the committee for culture and
spirituality;
Stanislav Hurenko, (CPU), to head the committee for economic policy,
management of national economy, property, and investments;
Petro Poroshenko, Our Ukraine, to head the budget committee;
Serhy Buriak, United Ukraine, to head the committee for finance and
banking;
Yury Yekhanurov, Our Ukraine, to head the committee for industrial policy
and enrepreneurship;
Andry Kliuyev, United Ukraine, to head the committee for fuel and energy
complex, nuclear policy, and nuclear security;
Valery Pustovoitenko, United Ukraine, to head the committee for transport
and construction;
Ivan Tomych, Our Ukraine, to head the committee for agrarian policy and
land relationships;
Dmytro Tabachnyk, United Ukraine, to head the committee for foreign
relations;
Ivan Rezak, SDPU(o), to head the committee for environmental policy, land
use, and Chornobyl relief programs;
Volodymyr Moisyk, Our Ukraine, to head the committee for legislative
support of law enforcement;
Volodymyr Stretovych, Our Ukraine, to head the committee to combat
organized crime and corruption;
Georgy Kriuchkov, CPU, to head the committee for national security and
defense;
Valentyna Matveyeva, CPU, to head the committee for VR standing
procedures, ethics, and VR logistics;
Mykola Tomenko, Our Ukraine, to head the committee for the freedom of
expression and information;
Hennady Udovenko, Our Ukraine, to head the committee for human rights,
ethnic minorities, and interethnic relations;
Petro Tsybenko, CPU, to head the committee for pensioners, veterans, and
invalids;
Borys Tarasiuk, Our Ukraine, to head the committee for integration into
Europe;
Valentyna Semeniuk, SPU, to head VR ad hoc commission on privatization;
Verkhovna Rada is slated to sit again on June 11.
OBOLON BREWERY OWNERS CONTROL 75 PERCENT OF STOCK
KYIV. Managers of the Obolon beer brewery (Kyiv), one of the largest in
Ukraine, said they now have control over 75% of shares, Korrespondent.net
reports, citing Obolon top executives.
According to an Obolon representative, following a bid by Obolon's rival,
the Donetsk-based Sarmat brewery, to buy up Obolon stock in April by
offering 100 dollars for a UAH 100 share, Obolon leaders offered their
1.180 petty shareholders to sell their shares at 200 dollars, and won the
day. Despite this success, Obolon continues to press charges in court
against the Keramit-Invest company which was acting on behalf of Sarmat,
as well as with those Obolon shareholders who sold their shares to Sarmat.
As Infobank has reported earlier, in April the CJSC Sarmat, which is a
member of the so-called Donetsk Beer Group, has started to secretly buy
Obolon shares, Oleksandr Slobodian, Director General of the Kyiv-based
Obolon brewery, told a press conference on April 2.
On April 3 Stanislav Melnyk, Director General of the Donetsk-based Sarmat
brewery, said that his company, which is among 5 biggest beer producers in
the country, is set to buy a controlling stake in Obolon, thus
strengthening its control over the Ukrainian beer market.
On April 10 Ukraine's anti-monopoly committee sent a letter to Sarmat
brewery, warning the latter that it might violate the country's law
protecting economic competition and that it would then have to take
responsibility for an attempt to monopolize the Ukrainian beer market.
The letter runs that if the Donetsk-based brewery buys a 41.5% stake in
Obolon, which is provided by a commission agreement with the Kermet-Invest
company, through which Sarmat has already bought 11% in Obolon, the share
of Sarmat and other breweries in managing which it takes part will then
exceed 40% of Ukraine's beer market. The anti-monopoly committee experts
believe that the concentration of so much in the hands of one company will
lead to the monopolization of the beer market in the country, which is
forbidden by law.
In May in line with the rulings by the Kyiv Economic Court, Desniansky
Rayon and Shevchenko Rayon Courts, registration or any other operations
with Obolon Brewery shares bought by Sarmat Brewery are banned pending
consideration by courts of Obolon protests. Obolon accuses the
Donetsk-based brewery of violating Ukrainian anti-monopoly legislation
through buying its shares.
Obolon's share in Ukraine's beer production comes up to 26 percent.
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