UKRAINE: MAIN NEWS OCTOBER-DECEMBER 2017

14:56 29/12/2017
Mikheil Saakashvili vs Ukrainian law enforcement system. Education reform debates. National Minorities Forum in Kyiv under attack. S&P predicts next IMF tranche for Ukraine not earlier than first quarter of 2018. IMF about gas prices in Ukraine. Blocking of NewsOne TV channel and prosecution for public denigration of Euromaidan. Prisoner exchange between official Kyiv and self-proclaimed Donbass ‘republics’. UK court arrests 2,5 bn USD of assets belonging to Ukrainian oligarchs. Ukraine and Lithuania agreed on cooperation in the field of energy and migration. EU announces new conditions to keep the visa-free regime. War between Ukrainian Prosecutor’s General and National Anti-corruption Bureau.

Ukraine: main news October-December 2017

Mikheil Saakashvili vs Ukrainian law enforcement system

Ukrainian Security Service (SBU) and Prosecutor’s General Office (GPU) workers attempted to arrest Mikheil Saakashvili during a search in his apartment at the center of Kyiv. At first, Saakashvili fled to the roof promising to throw himself down (which provoked jokes about him being a ‘Karlsson-on-the-roof’), but was finally apprehended by SBU workers who took him downstairs and put him in a car. A crowd of his supporters waiting in the street already started blocking the road and building a barricade to prevent Saakashvili’s transportation. After a brief hustle, he was eventually removed from the vehicle and escorted to the square near Ukrainian Parliament, where a camp town under his lead had been protesting since October. After being rescued, Saakashvili’s demands (consisting mostly of anti-corruption theses) quickly changed to a single ultimatum of Poroshenko’s impeachment. However, it was not long before the second attempt at his arrest (based on an arrest warrant according to Ukrainian Prosecutor General Yuriy Lutsenko) on December 8 - this time successful. Brought to an SBU facility, Saakashvili announced a hunger strike. Consecutive court trial was centered around the ‘Kurchenko case’ and the prosecution tried to connect Saakashvili to the runaway Ukrainian oligarch Serhiy Kurchenko accused of being involved in organized crime and laundering of illegal incomes. Lutsenko previously showed a recording allegedly containing Saakashvili and Kurchenko making a verbal agreement about prospective collaboration. The court granted Saakashvili freedom, although an appeal against this decision has already been filed.

Mikheil Saakashvili in the court

However, even after court procedures were over, Saakashvili continued his street rallies, although the sting of his rhetoric quickly switched from Poroshenko to Putin and Russian FSB, in both of which he now sees the his main rivals striving to convict and destroy him both politically and physically. The ‘after-court’ period is notable for a significant reduction of hate-speaking against Ukrainian President. Saakashvili now sees Ukrainian oligarchs Rinat Akhmetov and Viktor Medvedchuk (Putin’s associate and leader of Ukrainian Choice organization condemning the country’s movement towards EU) as main threats to Ukraine’s sovereignty and integrity. Despite his declared readiness to discuss only Poroshenko’s resignation, Saakashvili claimed he is not an enemy to the President, but his position became notably moderate with Russia becoming the center of his criticism (e. g. he called Russian FSB the main instigator of his arrest). At the same time, the degree of political struggle raised once during the ‘march in support of Poroshenko’s impeachment’ on December 17, when Saakashvili lead his supporters to the International Center of Culture and Arts (formerly known as October Palace) planning to set up a staff in the building. But as the crowd approached the entrance, they were confronted by police and National Guard workers. Protesters were sprayed with gas and started breaking windows, which made Saakashvili announce retreat and later call the incident a thoroughly planned provocation and claimed he was misinformed about the possibility to enter the building peacefully. He also said he was not aware there was a jazz concert at the moment (although the police came earlier). After the confrontation ended, protesters moved to the square in front of Ukrainian Parliament.

Saakashvili was later called in for interrogation by Ukrainian Security Service based on accusations of assisting criminal organizations, attempted offence and commission of an offence by a group of persons. On December 22, Dutch Minister of Foreign Affairs Halbe Zijlstra said the Netherlands are ready to accept Saakashvili (being a stateless person) if he decides to leave Ukraine, as his wife is the country’s citizen.

Situation around Saakashvili aroused different opinions inside Ukrainian political establishment. For example, Minister of Interior Arsen Avakov said Saakashvili should obey the court’s decision without indulging in violence and commented on the recordings claiming that ‘it is too much even for the cynical Ukrainian politics’ (pointing at the content of the dialogues). Advisor to Avakov Zorian Shkiryak calls Saakashvili a fraud, while another Avakov’s ex-advisor Anton Herashchenko often gives highly critical and mocking comments about his political efforts (including heavy accusations of violent conduct in the light of events around the arts center). Meanwhile, Delegation of the European Commission in Ukraine called for a lawful and unprejudiced trial without violating the defendant’s rights.

Education reform debates

Ukrainian education reform (voted on September 5) aroused hot discussions in EU becoming a stumbling block in country’s relations with Eastern European neighbors. Speaker for the European External Action Service Maja Kocijancic said on December 11 that Ukraine has to follow the requirement of the Venice Commission to revise the law’s 7th article treating on language policies heavily criticized for suppressing minority languages. In his reaction, Ukrainian Minister of International Affairs Pavlo Klimkin argues that it would be unjust to deem the revival of Ukrainian a discrimination of other languages and insists on a positive understanding of EU’s criticism (as if the Commission recommended to aid the dialogue between Ukrainian Ministry of Education and country’s minorities). Klimkin also calls Russian language a ‘colonization and assimilation tool’ and a ‘hybrid weapon’ used against Ukraine both in the past and today. This must be the reason for which the new law grants Russian even weaker positions compared to minority languages possessing an official status in EU. However, the Commission says the dubious character of the mentioned paragraph does not allow any certain interpretation when it comes to the amount of guarantees and rights specified in it. To resolve the situation, the Venetian Commission offers Ukrainian government a set of steps to help preserve equal rights in education (points misinterpreted by Mr. Klimkin): 1) to fully use, when adopting implementing legislation, the possibilities provided by paragraph 4 of Article 7 to ensure a sufficient level of teaching in official languages of the European Union for the respective minorities; 2) to continue ensuring a sufficient proportion of education in minority languages at the primary and secondary levels, in addition to the teaching of the state language; 3) to improve the quality of teaching of the state language; 4) to amend the relevant transitional provisions of the Education Law to provide more time for a gradual reform; 5) to exempt private schools from the new language requirements in accordance with Article 13 of the Framework Convention; 6) to enter, within the framework of the implementation of the new Education Law, into a new dialogue with representatives of national minorities and all interested parties on the language of education; 7) to ensure that the implementation of the Law does not endanger the preservation of the minorities’ cultural heritage and the continuity of minority language education in traditional schools.

Thus, acknowledging the commitment of Ukrainian government to reinforce the national language, EU officials at the same time stress the necessity to provide equal rights and freedoms to all nationalities engaged in Ukraine’s educational process.

National Minorities Forum in Kyiv under attack

National Minorities Forum arranged by ‘Rozumna Syla’ (‘Reasonable Force’) political party was interrupted by a group of unknown people wearing camouflage on November 20. The forum devoted to the new education reform was reportedly attended by delegates of Ukrainian national minorities and several European MPs. Sudden intruders claiming to be patriots said they wanted to assess the speeches and make sure the venue was not ‘separatist’. Police officers called by organizers reported they did not detect any violations.

“Aggressive young men from ‘Svoboda’ (‘Freedom’) party are trying to derail the National Minorities of Ukraine Forum. Their attempts to earn political credits with aggressive nationalism do not honor them. Instead, they demonstrate their party’s complete indifference towards real and not fanciful demands of Ukrainian society”, says the Facebook page of ‘Rozumna Syla’.

S&P predicts next IMF tranche for Ukraine not earlier than first quarter of 2018. IMF about gas prices in Ukraine

Standard&Poor’s agency forecasts the disbursement of next IMF loan tranche for Ukraine (3,5 bn USD and other 2 bn from different sources) not sooner than the first quarter of 2018 if country’s government complies with requirements imposed by the fund, such as implementation of pension reform, establishment of anti-corruption courts, new energetic policies and adoption of the State Budget for 2018. S&P also links Ukraine’s average progress to the current political regime that requires further reforming, but the upcoming presidential and parliamentary elections (due in 2019) leave few time for changes

Earlier this year, S&P affirmed Ukraine’s rating at ‘B-/B’; outlook stable. This is based on a positive 12-month forecast for the national currency rates and makes the country eligible for receiving loans (acknowledging its financial solvency). Meanwhile, IMF Resident Representative in Ukraine Gosta Ljungman says country’s GDP annually loses 2% due to corruption. He stresses that creation of anti-corruption courts is a necessary step granting access to a new loan. Ljungman also believes that higher gas prices will aid Ukraine’s economy and help develop the gas infrastructure along with putting an end to price segmentation (allowing different prices depending on the customer, which opens doors for corruption). “We welcome the program that can set market prices on gas prices and utilities. We are aware of the criticism aroused by unaffordability of these tariffs for families with low income. But there are subsidies and 50% of families receive them. This means that raised gas prices will not have a significant impact on poorer segments of the society. Providing gas for utility services at prices below market value is a mistake”, added Ljungman.

Earlier assessments by UN summarized that Ukraine should double its GDP and raise employment of able-bodied citizens to 70% to attain stable economy growth.

Blocking of NewsOne TV channel and prosecution for public denigration of Euromaidan

A large TV scandal occurred on November 29 as five politicians blatantly left the studio during a political talk-show on NewsOne channel after its owner and Ukrainian opposition MP Yevheniy Murayev called Euromaidan a revolt. His statement caused an outburst of resentment among several other MPs belonging to pro-Maidan parties who expressed their utter disagreement upon departing from the studio. They explained their decision saying there are certain red lines that cannot be violated publically. Shortly after the incident Ukrainian media space became overwhelmed with outrageous reactions which resulted in a statement by ‘Narodniy Front’ (‘People’s Front’) party suggesting to introduce a special penalty for ‘public denigration of Revolution of Dignity (Euromaidan), memory of the ‘Heavenly Hundred’ (people killed during Euromaidan) and all heroes who died in the battle for country’s independence and freedom’. One of ‘Narodniy Front’ members thinks the penalty should be similar to the one provided for humiliation of Ukrainian language (ranging between a fine and a 3-year sentence). Advisor to Ukrainian Minister of Interior Zorian Shkiryak commented on the situation in the same manner, saying that certain TV channels and their owners are engaged in totally anti-state activities. In his opinion, there should be careful legal mechanisms to fight the propaganda, which at times can become ‘latent’ and rather inventive. Murayev himself believes the scandal is a clear evidence of true purposes pursued by his critics: unable to otherwise justify the deaths sacrificed to the revolution and its results, they are trying to sacralize it and therefore avoid responsibility for their actions. Ukrainian law already contains a paragraph imposing responsibility (not clarified) for humiliation of people who fought for Ukraine’s independence in XX century (including members of OUN and UPA among others).

NewsOne office entrance blocked

Apart from a largely negative reception, Myrayev’s speech also resulted in blocking of his channel by unknown radical activists on December 3. Often accused in ‘pro-Russian’ and ‘pro-separatist’ agenda by certain patriotic public figures (for providing publicity to people with an alternative opinion), NewsOne was among the few media broadcasting Saakashvili’s anti-government street protest, which may be another reason for channel’s ‘siege’. People responsible for blocking the office built barricades at entrances restricting access to premises. One of channel’s anchors tried to interview the activists, but was met with rough and unfriendly reception. An ambulance was not allowed to the building, but police officers present claimed there were no violations. Explaining their conditions for ending the rally, the activists demanded to fire certain ‘anti-Ukrainian’ employees and change the channel’s media policy. However, as early as December 4 almost all barricades were removed and most of people camping at channel’s entrances left (although they had plans to set up a checkpoint and inspect all visitors). Murayev said the radicals were connected to Dmytro Korchinsky (major Ukrainian nationalist figure) and the whole act was commissioned by Petro Poroshenko. No radicals were arrested and no criminal cases were opened.

Prisoner exchange between official Kyiv and self-proclaimed Donbass ‘republics’

Ukrainian officials and delegates of LNR/DNR self-proclaimed republics exchanged prisoners near Horlivka (Donetsk region) on December 27. According to Iryna Herashchenko (First Deputy Chairman of Verkhovna Rada), Ukraine handed over 306 people, receiving 74 captives in exchange. People returned to Ukraine included mainly soldiers and activists, while those sent to LNR/DNR consisted of people accused of pro-Russian views and political prisoners among others (full list of persons selected for exchange was classified). However, it was later reported that in reality Ukraine provided 233 people, receiving back only 73, because the situation changed since prisoner exchange lists had been drafted. Certain people decided to refuse exchange due to their wish to stay in Ukraine. Prior to the operation, Ukrainian President Petro Poroshenko had a meeting with relatives of Ukrainians hostages which were later brought to Kyiv by plane. Hundreds of people currently remain behind bars on both sides, which gives grounds for further interchanges.

Hostage exchange in Horlivka

UK court arrests 2,5 bn USD of assets belonging to Ukrainian oligarchs

On December 19, the High Court of London arrested ‘worldwide’ assets possessed by Ukrainian oligarchs Ihor Kolomoisky and Hennadiy Boholyubov in favor of PrivatBank, Ukraine’s largest bank previously owned by Kolomoisky and nationalized last year (on request of bank’s owners). The decision addresses six companies owned by the oligarchs that used certain illegitimate transactions to acquire around 2 bn USD of PrivatBank money. Ukrainian government already invested 140 bn UAH (5 bn USD, about 5% of Ukraine’s GDP) in the bank to prevent its financial collapse and save the country’s bank system. About 90% of lenders were allegedly associated with Kolomoisky and Boholyubov and received loans backed up by money from the population. Nevertheless, now both oligarchs insist that PrivatBank was illegally appropriated by the National Bank of Ukraine, whose officials started a media campaign aimed at destabilizing ‘Privat’, Kolomoisky and Boholyubov even suing the National Bank and the government (over 360 lawsuits total). On November 6, Hennadiy Boholyubov filed a request to Ukrainian government seeking a compensation of his losses related to nationalization of PrivatBank.

Ihor Kolomoysky (left) and Hennadiy Boholiubov (right)

In June 2016, three Cyprus-based companies already sued Ukraine claiming 4,674 bn USD allegedly lost due to government’s crooked schemes affecting ‘Ukrnafta’, Ukrainian gas and oil company owned by Kolomoisky and Boholyubov with government holding 50%+1 shares. This helped reveal the companies’ ties with oligarchs, who have plenty of property in Ukraine including media and ferroalloys.

Ukraine and Lithuania agreed on cooperation in the field of energy and migration. EU announces new conditions to keep the visa-free regime

On December 8, both countries’ Ministers of Energy signed a memorandum on cooperation in the field of energy in the presence of Presidents Petro Poroshenko and Dalia Grybauskaite. Partnership will include experience exchange in gas market development, decommissioning and dismantling of nuclear power plants, as well as renewable energy and biomasses. Another purpose of the document is development of energetic independence.

Migration services of both countries will work together on questions related to migration and granting asylum. During the meeting held in Vilnius both sides signed a protocol condemning Russian aggression against Ukraine and supporting country’s integrity. The protocol also endorses the EU-Ukraine Association agreement along with introduction of visa-free regime and positive effect of temporary free trade zones. It further stresses the importance of cooperation in the areas of security, transportation and logistics, education, culture and youth exchange.

Presidents of Ukraine and Lithuania in Vilnius

Meanwhile, Ukrainian Border Service reports that 335 000 Ukrainians traveling to Europe were allowed entry since the implementation of visa-free regime (about 80 000 per month during first few months after cancellation of visas), which is about 10% more than during 2016. 128 000 people traveled by air, 227 000 – by land and only a few by sea. About 155 000 travelers entered EU through Poland and Romania. Access to Interpol databases granted by the agreement allowed Ukrainian border guards to detect about 2000 wanted persons, 657 passports and 198 stolen vehicles. However, only 3% of travelers took full benefit of the visa-free regime entering EU without visas (14% of biometric passport holders). Moreover, 28% of total refused entries (about 9000 cases) in 2017 belong to Ukrainians: 4334 refusals based on unconfirmed travel purpose or duration and another 2260 due to absence of valid visa or residence permit. About 8000 illegally residing Ukrainians (out of total 30 000) were recorded during the second quarter of 2017 (20% more compared to 2016). During the same period 252 Ukrainians used a fake ID for entry.

A report on the visa-free regime issued by the European Commission contains six demands Ukraine has to consider:

  1. Enhance cooperation with EU relevant agencies to prevent risks stemming from irregular migration;
  2. Step up targeted information campaigns clarifying the rights and obligations entailed in visa-free travel;
  3. Ensure the independence, effectiveness and sustainability of the anti-corruption institutional framework, in particular by setting up an independent and specialized high anti-corruption court in accordance with Venice Commission opinion and Ukrainian legislation. In parallel, the independence and capacity of NABU and SAP must be ensured and reinforced, revising current trends undermining their work;
  4. Restore as a matter of urgency the credibility of the NAPC and establish an effective verification system of asset declarations, including through the automatic verification software with direct and automatic access to state databases and registers;
  5. Repeal the amendments extending the scope of asset declaration obligations to civil society declarants and ensure that civil society can play its role without undue obstacles and interference;
  6. Step up efforts to combat organized crime, including by dedicating sufficient resources and expertise in the National Police, introducing a clear delineation of competencies and improving cooperation between law enforcement agencies.

War between Ukrainian Prosecutor’s General and National Anti-corruption Bureau

During his speech in Verkhovna Rada (Ukrainian Parliament) on December 6, head of Ukrainian Prosecutor’s General Office (GPU) Yuriy Lutsenko accused the head of National Anti-corruption Bureau (NABU) Artem Sytnyk of claiming Lutsenko ‘threw a stone’ at FBI and launching a media campaign against him and the whole Ukrainian law enforcement system. Sytnyk’s claim (made during his working visit to US) was a reaction to Lutsenko’s statement that undercover NABU agents investigating corruption in State Migration Service of Ukraine together with FBI are ‘outside the law’. This gave Lutsenko the idea to address Ukrainian Parliament with offers to further elaborate on the laws regulating NABU legitimate authority and ensure better control over the bureau. The corresponding law project was registered in Verkhovna Rada by the chairman of BPP (Blok Petra Poroshenka, parliamentary political force behind Ukrainian President) Artur Herasymov, who explained this step as an attempt to ‘preserve the rule of law’. Once approved, the law would allow suspension of NABU head without auditing. The situation met a negative comment from US former Deputy Minister of Defense Michael Carpenter tweeting that “if the Rada votes to dismiss the head of the Anticorruption Committee and the Head of the NABU, I will recommend cutting all US government assistance to Ukraine, including security assistance”. On the voting day (December 7), however, the legislative proposal was not included in the parliamentary agenda.

Artem Sytnyk, head of NABU

Yuriy Lutsenko, Prosecutor General of Ukraine

Although Lutenko earlier said there no ‘war’ between Prosecutor’s General and NABU and both authorities are working together on numerous cases, the conflict seems to have provoked a power struggle in Ukrainian law enforcement. Created in 2015 with financial aid from EU and US, NABU has become an agency at times meeting harsh criticism from Ukrainian pro-presidential political circles and from Poroshenko himself (e. g. for lack of results in fighting corruption).

The ‘war’ between GPU and NABU started with a bribing scandal. On November 29, Ukrainian State Migration Service (DMS) accused one of NABU agents of attempting to bribe the head of DMS Dina Pakhomova offering her some 15 000 USD. The arrested agent was said to be following illegitimate orders by certain NABU authorities demanding legal status for non-existing citizens of Iran and Vietnam. On the same day, the bureau was searched by Ukrainian Security Service (SBU) allegedly on the basis of illegal bugging conducted by NABU detectives. NABU says in return that all claims are false and calls the conflict a diversion initiated by GPU and SBU.

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