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’Let’s go!‘ Russian cosmonaut Yuri Gagarin’s famous words before liftoff on April 12, 1961 – ехали! – in Russian – are remembered on Поехали! the 50th anniversary of the historic space ht. Gagarin flight. came the became firstt man in ace during space his 108-minute orbit of the earth. See style Lifestyle ge 25. page
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vol. 16, issue 14
April 8, 2011
Staying Put B Y Y U R I Y ON YS HKIV ONYSHIV@KYIVPOST.COM
LISBON, Portugal – Despite the economic and debt crisis hitting Portugal, thousands of Ukrainians living in this southwestern European nation of 10 million people are in no hurry to return home. Many came a decade ago, fleeing the rampant poverty, corruption and joblessness of Ukraine under President Leonid Kuchma. They arrived in Portugal, where many found better lives. Even today, many of them are reluctant to Æ14
Grape pickers at a vineyard in Portugal. Farm work is popular for many of the 53,000 Ukrainians living in the southwestern European nation. (Reuters)
Prosecutors: Kuchma, others caught on tape K Y IV P OS T S TA F F
For the first time in the nearly 11-year investigation into the murder of journalist Georgiy Gongadze, Ukraine’s general prosecutor confirmed what many have long suspected – that voices on tapes apparently secretly recorded in the president’s office belong to senior officials. Deputy Prosecutor General Renat Kuzmin said this week that voices on recordings allegedly made by for-
Inside:
mer presidential bodyguard Mykola Melnychenko are those of former President Leonid Kuchma, former presidential chief of staff Volodymyr Lytvyn and former Security Service head Leonid Derkach. In the conversations, the officials are heard discussing how to silence Gongadze, among other crimes. The groundbreaking confirmation was made by Kuzmin in an interview published on April 6 by Focus Æ17
News Æ 2, 14 – 17 Opinion Æ 4, 5, 18
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INSIDE: • A special Business Focus on legal services in Ukraine. Pages 8-13. • Israel says Palestinian tied to Hamas fighting. Page 16. • American Jed Sunden sells KP Media to millionaire Ukrainian Petro Poroshenko. Page 15.
Russia tries to trump EU-Ukraine trade talks STAFF A N D W I R E R E PO R TS
In a bid to scuttle free-trade talks between Ukraine and the European Union, Russia on April 7 offered Kyiv an $8 billion annual discount on natural gas if it opts instead to join a Russialed customs union. But despite ongoing tough negotiations with Brussels over trade, Ukraine appeared ready to side with the EU and spurn the Russian offer. Ukraine can’t
Business Æ 6 – 14
Employment/Real Estate/ Lifestyle Æ 19 – 28, 32 Classifieds Æ 30, 31
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do both, and how it resolves the issue will be seen as a key test of its intentions to integrate the nation’s economy more deeply with the West. Ukrainian President Viktor Yanukovych made clear on April 7, during his annual state-of-the-nation address, that his administration would pursue less-protectionist trade with both Europe and former Soviet republics. Moscow has long urged Kyiv to also join the customs union whose Æ11
2 News
APRIL 8, 2011
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April 8, 2011
Vol. 16, Issue 14 Copyright © 2011
Tomorrow’s News
by Kyiv Post The material published in the Kyiv Post may not be reproduced without the written consent of the publisher. All material in the Kyiv Post is protected by Ukrainian and international laws. The views expressed in the Kyiv Post are not necessarily the views of the publisher nor does the publisher carry any responsibility for those views. Газета “Kyiv Post” видається ТОВ “ПаблікМедіа”.
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прим. Ціна за домовленістю. Матерiали, надрукованi в газетi “Kyiv Post” є власнiстю видавництва, захищенi мiжнародним та українським законодавством i не можуть бути вiдтворенi у будь(якiй формi без письмового дозволу Видавця. Думки, висловленi у дописах не завжди збiгаються з поглядами видавця, який не бере на себе вiдповiдальнiсть за наслiдки публiкацiй. Засновник ТОВ “Паблік-Медіа” Головний редактор Брайан Боннер Адреса видавця та засновника співпадають: Україна, м. Київ, 01034, вул. Прорізна, 22Б Реєстрацiйне свiдоцтво Кв № 15261(3833ПР від 19.06.09. Передплатний індекс ДП Преса 40528 Надруковано ТОВ «Новий друк», 02660, Київ, вулиця Магнітогорська, 1, тел.: 559-9147
www.kyivpost.ua: дайджест статей БИЗНЕС: Как получается бодяга, или что мы заливаем в бензобаки Мария Шамота Когда у Сергея Потапова, владельца новенького Nissan Almera, вдруг прямо на дороге «запала» педаль газа, а потом и вовсе заглохла машина, он удивился: совсем недавно он заправился. «На хорошей заправке был, там нормальный бензин», - попытался оправдаться он. На СТО, Качество топлива на АЗС не контролируют однако, оказалось, что жидкость в его бензобаке — просто «бодяга». «Ребята при мне слили бензин в посудинку и начали поджигать. Оно даже не горело! Так, пара вспышек», - вспоминает Потапов, которому, к тому же, пришлось заплатить за ремонт машины. Его ситуация — не редкость. Около 30% бензина в Украине не соответствует стандартам качества. Одна из причин в том, что государство вот уже несколько лет вообще не проверяет качество топлива — на это нет денег...
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МНЕНИЕ: Спасет ли гривну МВФ? Виктор Виктор Лисицкий Лисицкий Наши СМИ снова разворачиваются к теме получения кредита МВФ. Нельзя не разделять их озабоченность – ведь за два кризисных года (2009 и 2010) сводный платежный баланс Украины составляет минус $8,7 млрд. Дырка! И заткнули ее, в основном, деньгами МВФ (если верить НБУ, который всегда честен). Устойчивое превышение импорта товаром над экспортом совершенно естественно формирует устойчивое превышение спроса на иностранную валюту над ее предложением. И, как результат, нужно быть готовым к уверенной и немаленькой девальвации нашей любимицы – гривны. Это произойдет не завтра, и не послезавтра. Но! Произойдет - если радикально не разовьем экспорт... УКРАИНА: Україна хоче в Європу, але на Митний союз все ще облизується Юрій Онишків Незважаючи на застереження Євросоюзу щодо несумісності Зони вільної торгівлі (ЗВТ) з ЄС та Митного союзу з Росією, Казахстаном та Білоруссю, представники офіційного Києва продовжують загравати з цією ідеєю, підставляючи власних колег та дивуючи європейців. Уповноважений уряду зі співробітництва з РФ і Євразійським економічним співтовариством Валерій Мунтіян сказав Kyiv Post, що, хоча Україна і не веде офіційні переговори щодо приєднання до Митного союзу, на його думку, такий союз був би вигідніший для Києва, аніж підписання ЗВТ з Євросоюзом. “Якщо буде ухвалено відповідне політичне рішення, то інтеграція України до Митного союзу має суттєві економічні ефекти для нашої держави. Це я говорю на базі тих розрахунків, за якими розраховується базовий сценарій переговорів”, - сказав він і додав, що “не виключає приєднання України до Митного союзу”... Полный текст статей и блогов можно прочитать на www.kyivpost.uа
Russian Prime Minister Vladimir Putin (L) and his Ukrainian counterpart, Mykola Azarov, in Kyiv last year. Putin will be in Kyiv again on April 12 to discuss energy and trade issues. Kremlin leaders are pushing Ukraine to join a Russian-led Customs Union and offer natural gas price discounts worth $8 billion a year as an incentive. However, Ukrainian President Viktor Yanukovych is cautiuosly moving the other direction. Ukraine is already a member of the World Trade Organization, but Russia is not. Ukraine is also seeking a free-trade agreement with the European Union. (AFP)
Putin visit to Kyiv on April 12 to highlight trade, energy Russian Prime Minister Vladimir Putin is planning a working visit to Ukraine for April 12, the Russian government said. Putin and Ukraine’s leadership will hold talks “on key issues of bilateral cooperation, including cooperation in such important sectors as energy, trade and economic relations, transportation, and the implementation of joint programs in the aviation industry,” the government said in a report. Putin and Ukrainian Prime Minister Mykola Azarov, as co-chairmen of
the economic committee of the Russian-Ukrainian Intergovernmental Commission, will discuss work done in implementing committee decisions and preparations for the committee’s next meeting. The Russian premier and Ukrainian leaders will also discuss prospects for interaction between the two countries in space exploration in connection with the 50th anniversary on April 12 of the world’s first manned space flight, Soviet cosmonaut Yury Gagarin’s mission, Interfax reported.
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April 8, 2011 Advertisement
European Business Association News
,EADERS 4ALK Leaders Talk: Dirk Battermann, General Director, HPC-Ukraina
/
VER THE PAST YEARS (0# HAS ESTABLISHED ITS REPUTATION AS LEADING CONSULTANCY FOR TAILOR MADE SOLUTIONS IN SUPPLY CHAIN LOGIS TICS ESPECIALLY PORTS WITH A SPECIFIC DETERMINATION TOWARDS MODERN CON TAINER TERMINALS WORLDWIDE 4ODAY WE INTERVIEW $IRK "ATTERMANN 'ENERAL $IRECTOR (0# 5KRAINA -ASTER -ARINER AND 3HIPPING %CONOMIST WITH MORE THAN YEARS OF PRACTICAL INTER NATIONAL EXPERIENCE
$)2+ "ATTERMANN
'ENERAL $IRECTOR (0# 5KRAINA
7HAT IS YOUR MAIN SPHERE OF ACTIVITY IN 5KRAINE AND WHAT SERVICES DO YOU RENDER TO YOUR CLIENTS
(OWEVER (0# 5KRAINAlS TERMINAL IS STILL WORKING BELOW CAPACITY LIMITS AND COULD EAS ILY AFFORD MORE BUSINESS #AN YOU POSSIBLY SHARE WITH US YOUR DEVELOPMENT PROSPECTS IN 5KRAINE FOR THE NEAREST FUTURE /F COURSE WE WOULD LIKE TO EVEN ACCELERATE THE SPEED OF RECOVERY )N FACT THE PROSPECTS FOR SPEEDY RECOVERY ARE PROMISING AND THERE FORE (0# 5KRAINA EXTENDED THE MANAGEMENT AGREEMENT WITH THE 0ORT OF /DESSA AND INITI ATED PROJECTS INVESTING IN THE EXTENSION OF THE EXISTING TERMINAL FACILITIES -OST INVESTORS TEND TO BE RATHER CAUTIOUS ABOUT INVESTING IN 5KRAINE IN PART BECAUSE OF IRREGULARITIES IN THE LEGAL SYSTEM 7HAT ADVICE WOULD YOU GIVE TO COMPANIES WHO ARE THINKING OF ENTERING THE 5KRAINIAN MARKET )N FACT THIS IS AN IMPORTANT ASPECT NOT TO BE UNDERESTIMATED BY NEWCOMERS 4HE FAMIL IARITY WITH THE 5KRAINIAN LEGISLATION POLITICS AND ITS PECULIARITIES IS OF UTMOST IMPORTANCE 4HEREFORE POTENTIAL INVESTORS SHOULD EARLY IN ADVANCE I E BEFORE MAKING THE INVEST MENT SEEK FOR PROPER LEGAL ADVICE )N GENERAL MAINTAINING A GOOD RELATION WITH A COMPETENT AND INFLUENTIAL LAW FIRM IS A GOOD ADVICE $EFINITELY LEGAL ADVICE IS A COST FACTOR p BUT IT MIGHT BE WORTH IT
(0# 5KRAINA IS OPERATING THE /DESSA #ONTAINER 4ERMINAL THE BIGGEST CONTAINER TERMINAL IN 5KRAINE #LIENTS OF (0# 5KRAINA ARE SHIPPING LINES AND FORWARDERS AND THE SERVICES RENDERED BY (0# 5KRAINA MAINLY FOCUS ON VESSEL OPERATION I E LOADING AND 7HICH BUSINESS SECTOR COULD BE THE DRIVER DISCHARGING AND STORAGE OF CONTAINERS OF ECONOMIC DEVELOPMENT OF THE REGION 7HY DID YOU START BUSINESS IN THE 4HIS IS A DIFFICULT QUESTION &OR OUR PAR 3OUTHERN REGION )S IT AN ATTRACTIVE PLACE TICULAR SPHERE OF BUSINESS I E THE CONTAINER TO DO BUSINESS TERMINAL ) AM COUNTING IN THE MEDIUM TERM 4HE 0ORT OF /DESSA THE MAIN PORT IN THE ON A GENERAL IMPROVEMENT OF CO OPERATION 3OUTHERN 2EGION OF 5KRAINE CONCENTRATES WITH AUTHORITIES LIKE E G CUSTOMS SERVICE OR ALL KINDS OF SERVICES FOR THE MARINE SHIPPING RAILWAYS AND ALSO ON FUTURE FACILITATION AND SECTOR /DESSA HAS ALWAYS BEEN AN IMPOR EASE OF IMPORT AND EXPORT PROCEDURES p THIS TANT GATEWAY TO A HINTERLAND WITH A RICH ALSO INCLUDES MEASURES ENABLING TO FINALLY INDUSTRIAL PRODUCTION AND A CONSIDERABLE ATTRACT MORE TRANSSHIPMENT CARGO MARKET FOR CONSUMER GOODS 7E BELIEVE (OW DO YOU SEE THE YEAR AHEAD IN THAT THE LOCATION k/DESSAl WILL SUSTAIN THIS 5KRAINE !RE YOU OPTIMISTIC OR PESSIMISTIC STRONG POSITION IN THE FUTURE AS WELL AND WHY ,OOKING BACK AT CAN YOU SAY %XCLUDING UNFORESEEABLE DISASTERS p ADMIT THAT IT WAS A SUCCESSFUL YEAR FOR (0# TEDLY NOWADAYS A QUESTIONABLE PARADIGM 5KRAINA p MY OWN OPTIMISM GOES BEYOND FORECASTS 4HE YEAR SHOWED A MODERATE BUT OF MARKET RESEARCH INSTITUTIONS PREDICTING STEADY RECOVERY FROM THE AFTERMATHS OF THE THAT 5KRAINElS ECONOMY IS SET TO ENTER A LONG GLOBAL ECONOMIC CRISIS 4HE OPERATIONAL RESULTS PERIOD OF ONLY STAGNANT GROWTH /F COURSE ) DUE TO OUR CONTINUOUS ENDEAVOURS TO IMPROVE DO NOT EXPECT MIRACLES BUT ) BELIEVE IN THE THE QUALITY OF OUR SERVICE FINALLY EXCEEDED POTENTIAL OF THIS COUNTRY p A POTENTIAL WHICH JUST NEEDS TO BE BETTER UTILIZED INITIAL EXPECTATIONS FOR THE YEAR
2%')/.!,.EWS EBA Theatre in Odessa: First night of “Turandot�
E
BA Southern Branch members had a remarkable opportunity to enjoy theatre atmosphere during the “Turandot� first night, performed at Odessa National Opera and Ballet Theatre. This uncompleted masterpiece of Giacomo Puccini has always been popular with the audience, while its spectacular productions evoke colour and savagery of the ancient China.
Donetsk Region partners with the Czech Republic
M
id spring, business delegation representing 13 companies from the metallurgical, engineering, tourism, energy, and air transportation spheres from Moravian-Silesian Region of the Czech Republic paid a three-day visit to Donetsk. Donetsk State Administration and the Consul General of the Czech Republic in Donetsk signed a cooperation agreement and laid basis for further bridging Ukrainian and Czech business communities.
www.eba.com.ua
*O 'PDVT Pension reform at stake (JWFO UIF OFHBUJWF SFBDUJPO UIF 7FSIPWOB 3BEB PG 6LSBJOF IBT QPTUQPOFE UIF BQQSPWBM PG UIF %SBGU -BX SFHBSEJOH QFOTJPO TZTUFN SFGPSN VOUJM .BZ†+VOF 5IF VOQPQVMBS CVU NVDI EFCBUFE QFOTJPO SFGPSN XJMM GPSDF UIF 7JDF†1SJNF†.JOJTUFS PG 6LSBJOF UP GVSUIFS BEWPDBUF GPS JUT JOUSPEVDUJPO BNPOH 6LSBJOJBO QFPQMF 5IF QSPQPTFE QSPWJTJPOT IBWF SFNBJOFE QSFUUZ TJNJMBS UP UIF %SBGU -BX PO .FBTVSFT UP &OTVSF UIF -FHJTMBUJWF 3FGPSN PG UIF 1FOTJPO 4ZTUFN /P SFHJTUFSFE BU UIF 7FSIPWOB 3BEB BU UIF FOE PG UIF MBTU ZFBS Pension reform in terms of the pension age increase is still one of the most discussed topics in Ukraine. However, details of the second level of pension reform, which envisages compulsory savings, remain in shadow. The EBA Life Insurance Committee members have stressed the necessity of such a reform, with a number of reservations laid out in the position paper submitted to the government to amend the concept of the future pension system. The proposals mainly concern: • The possibility to participate in the II level of pension system rendered to all working population but not only to the proposed 35 years limit to enable all working population to benefit from the possibility to accumulate funds and receive them as single payment in case of gaining pension age so that such savings could be subject to heritage; • The necessity to continue increasing the maximum percentage of contributions for personal account in the framework of the II level up to 15% (instead of the proposed 7%), which could be an effective tool in raising employees’ interest in salary legalization and minimization of backdoor salaries; • Involvement of life insurance companies with appropriate expertise into administration of the non-state pension fund via respective licenses. At the same time, it is necessary to set up the rigid criteria for such companies regarding the capital amount, activity experience and services infrastructure on the territory of Ukraine. It is crucial that the state should foster the development of the third level of pension system that means security of the voluntary savings of the population. Such an additional source of income will ensure the decent life of Ukrainian pensioners and reduce social tension existing nowadays. While any further alterations can be introduced only before second reading, the Committee members urge the government to exercise the reform as soon as possible paying due attention to the second level of personal saving operations.
Head of the Board PJSĐĄ “GRAWE UKRAINE Life insuranceâ€?
T
here’s a huge debate now about the country not being ready to the pension system reform, which is heated by the arguments that it is likely to be imperfect. However, in my opinion, mistakes are inevitable, and the sooner the pension system reform takes effect, the quicker all discrepancies are revealed, and consequently cured. The second level is a cause for concern to working population, in that certain interest will be deducted from the salary during all years of service on a compulsory basis, which would allow to accumulate certain amounts in the fund. Obviously, the employed are very much concerned about the deduction amount, since this is what they receive upon retirement. At this point, high level of deductions to the solidary fund does not allow to introNATALIA Bazilevskaya duce such interest deductions which would accumulate enough funds on personal pension accounts. Therefore, I would like to advice working population of the country to pay attention to the third voluntary level that enables a person to provide for one’s future even now and deduct certain amounts to the pension fund, if possible.
Director of the Commercial Department, a member of the Executive Board of SEB Life Ukraine
T
he pension systems in many European countries have already been transformed and Ukraine won’t be an exception. The new generation of Ukrainians should realize that in order to secure financially stable retirement they need to start thinking about their future right now, not relying on the State. For instance, in Latvia insurance premium per capita in 2008 was 33.75 EUR, while in Ukraine – 3.20 EUR. In order to reach the appropriate level of understanding the need of long term savings, the active support of the State is required. The New Tax Code implies certain “tax incentives� and it is essential to provide common explanation from the financial institutions and the State about the pension reform, its necessity and advantages. JANIS Lasis Life insurance companies play the key role in providing long term savings, as they already have market knowledge, wide range of tailored-made life and pension insurance solutions and decent distribution networks.
Board Member, Fidem Life
W
e all notice how rapidly the world is changing. Nowadays, we should quickly react to vital factors: ecological, financial, economic, as well as social and demographic ones. Therefore, the solidarity system of pension provision that we inherited from the Soviet economy and which remained the same over the past 40-50 years, needs urgent “surgery�. Generation of people, who are at the pick of their working capacity, starts to search for instruments which will help them keep good lifestyle upon retirement. Now, it is the best time to think about what a person can do to save enough resources for the old age. Economic data tells us that today 10 working people provide for 9 pensioners, and SVETLANA Kandyba this is very sad statistics. Besides, there is a psychological factor. Everybody carries responsibility not only for him or herself, but also for future generations who bear responsibility on external debts and will take over the financial burden for filling the pension fund for many pensioners. Therefore, increase of pension age will help us redistribute responsibility which lies on us and future generations. I’m convinced that these changes are inevitable and society should realize it, accept and adapt to rapidly changing conditions of modern world.
4HINGS TO KNOW EBA Business Morning with Polish Embassy: Visa focus We are happy to invite all EBA members to the meeting with the representatives of the Embassy of the Republic of Poland during which you will be updated on the changes in visa policies and procedures. t Date: April 13, 2011 t Time: 09:30 (The registration begins at 09:00) t Venue: EBA Office (1st floor, 1A Andriyivsky Uzviz) The representatives of our western partner-country, Head of the Consular Section, 1st Counsellor Rafał Wolski, and Visa Affairs Coordinator, Counsellor Grzegorz Stykowski, will explain current visa processing procedures and present the results of the Polish Embassy's activities in 2010 and the 1st quarter of 2011. To register for the event please confirm your participation via events@eba.com. ua by April 11, 17:00.
7E LOOK FORWARD TO YOUR FEEDBACK AT
PGGJDF!FCB DPN VB
4 Opinion
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April 8, 2011
Editorial
Crunch time
Major, nice watch! But it doesn’t tell time!
If we have the right analysis of President Viktor Yanukovych’s position on the tug of war that Ukraine faces between Europe and Russia, then he deserves praise for cautiously steering the nation in the right direction. Yanukovych appears to be staying the course toward deeper European integration with a commitment to conclude a free-trade deal with the European Union by year’s end. Such an agreement would further pry open Ukraine’s economy to the beneficial aspects of trade competition, begun when Ukraine joined the World Trade Organization in 2008. Moving the nation to democracy and free trade is no easy task. Russia is combining pressure and temptation in trying to keep Kyiv within its sphere of influence. The latest salvo is the Kremlin promise of an $8 billion natural gas price discount. More carrot-and-stick inducements are likely to follow, intensifying as Kyiv gets closer to a free trade deal with Brussels. Ukraine still trades more with former Soviet republics, led by Russia, than with the EU. So staying on friendly terms with Moscow without joining the Customs Union will test Yanukovych’s political skills. Joining the Customs Union would hurt Ukraine’s sovereignty and almost certainly foreclose deeper EU trade ties at tremendous long-term cost to the nation’s economy. The EU, not Moscow, offers Ukraine the best alternative now for the nation’s citizens to gain a measure of prosperity and loosen their bonds to the corrupt political elite that runs Ukraine now. Russia and most former Soviet states offer nothing more than state-run crony capitalism and political authoritarianism. But to make this large leap, Yanukovych’s words must finally be backed up by actions, requiring him to close the administration’s large gap between words and deeds. Murky monopolies that benefit from official patronage need to be broken up, and the new ones emerging in the agricultural and energy sectors must be stopped if Ukraine is to be anything more than an oligarch playground. It’s now time for Ukraine to finalize negotiations with the EU on a deep and lasting free trade pact.
I don’t mind as long as it records well.
A good sale The Kyiv Post breathed a sigh of relief when it heard that Ukrainian millionaire Petro Poroshenko had purchased KP Media, which publishes Korrespondent, the nation’s popular weekly newsmagazine and Internet news portal. Its previous owner, American Jed Sunden, is the founder and former publisher of the Kyiv Post, which he sold to Mohammad Zahoor in 2009. The greatest contribution that Sunden has made to the Ukrainian media landscape is his strong and unflinching support for press freedoms, including editorial independence, still a rarity in Ukraine today. This is why we are heartened that Sunden, in selling off his media assets, is concerned not only with sales price but also with whether the new owner will be a good steward. He made the right call in selling the Kyiv Post to someone like Zahoor, who has kept his pledge to support press freedoms and who has invested substantially in the newspaper through the launch of www.kyivpost.ua and other overdue improvements. If Sunden had sold KP Media to tycoons Rinat Akhmetov, Viktor Pinchuk, Igor Kolomoisky or the tandem of Valeriy Khoroshkovsky/Dmytro Firtash, he would have only exacerbated the concentration of media ownership. This political oligopoly has not served the nation well in the information sphere. Major stories go unreported because of self-censorship. Critical coverage is in short supply. Some publishers have wielded their financial clubs to squeeze independent journalists into submission. That’s why the news that Poroshenko bought KP Media is welcome. The former foreign minister owns Channel 5, a rare television station that practices a semblance of independent journalism. No one has to look further than last month’s shutdown of daily newspaper Gazeta Po-Kievski to see the complicated mess in journalism today. The newspaper was losing money, but so do many others that operate more like vanity projects for their owners than real businesses. So, while owner Igor Kolomoisky claims he shut down the paper because of its financial losses, the billionaire also has a reputation of interfering in the editorial policy of journalists to the point of censorship. Critics claim Kolomoisky is strong-arming journalists to take a soft line on President Viktor Yanukovych. If so, he would be like many Soviet-era fossils who believe that whoever is in power should be unquestioningly supported. This is pandering, not journalism. Ukraine desperately needs a more vibrant marketplace of ideas. News outlets that depend on their owner’s bank account for survival are in trouble. We look forward to Poreshenko maintaining Korrespondent’s brand of independent news reporting. We believe, as Sunden does, that editorial independence is not only a sacred principle but also the surest path to financial success.
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NEWS ITEM: Former President Leonid Kuchma’s lawyer said on April 4 that Mykola Melnychenko attempted to record a face-off with Kuchma on his watch and later, possibly, with another device. Kuchma said after the meeting in the General Prosecutor’s office that he does not know Melnychenko and that the former major was never his bodyguard. “He was sent to me by the State Security Department, which deals with the protection of the president from secret taping,” Kuchma said. In 2000, Melnychenko released recordings of Kuchma that shed light on the murder and beheading of journalist Georgiy Gongadze on Sept. 16, 2000. The recordings are now evidence against Kuchma, but their authenticity is still in dispute. Kuchma is accused of abusing his authority in giving orders that led to Gongadze’s murder.
Who’s calling the shots in the Gongadze case? MY KOL A RIA BCH UK
On Feb. 25, the first anniversary of his presidency, Viktor Yanukovych invited his three predecessors to his office “to discuss current issues and the future development of the Ukrainian state.” This brief item on the president’s official website was illustrated with a photo of smiling participants Viktor Yushchenko, Leonid Kravchuk and Leonid Kuchma with the incumbent. None of them, with the exception probably of the host, realized that behind its cheerful facade, the meeting resembled one of those Byzantine banquets that would end with the poisoning, slaughtering or impaling of the distinguished guests. A month later, Kuchma may understand that metaphor. On March 24, he was summoned for interrogation to the prosecutor’s office, charged with abuse of power and implicated in the killing of investigative journalist Georgiy Gongadze on Sept. 16, 2000. In Yanukovych’s Ukraine, where the judiciary is just a part of the executive subordinated to the president, and where the prosecutor general is his bosom buddy (“a member of president’s team,” as Viktor Pshonka characterized himself proudly in public), hardly anyone believes that the trial against Kuchma was launched without the blessing of Yanukovych. Speculation revolves around the question of why Yanukovych has made this dubious step. The alleged reasons include Yanukovych’s desire to divert public attention from his failures, to disprove accusations against his government
about selective justice and to impress opponents by proving that the president is tough but just. Journalist Yulia Mostova highlights another reason why Yanukovych might want to persecute Kuchma: revenge for the perceived humiliation during the 2004 Orange Revolution, when the incumbent refused to use force against protesters and let Yanukovych take office, opting instead for negotiation and compromise that ended up with the election of Yushchenko over Yanukovych in the repeat presidential election on Dec. 26, 2004. Launching a trial against Kuchma might be in the interests of people around Yanukovych, but not the president himself, for the following reasons: No one considers it an act of justice and proof of the equality of all Ukrainian citizens before the law. All the policies of Ukrainian authorities suggest the opposite. And the recordings presumably made by Kuchma’s bodyguard, Mykola Melnychenko, even if accepted as evidence, do not contain any direct order to carry out murder. Also, by initiating the trial, Yanukovych very unwisely draws public attention to his own conversations with Kuchma recorded by Melnychenko, which definitely merit a criminal investigation (intimidation of judges, blackmail, bribery, large-scale corruption, etc). Deputy Prosecutor General Renat Kuzmin, who mentioned Melnychenko’s recording among the possible evidence against Kuchma, has inadvertently opened a Pandora’s box. This evidence could be used against dozens of Ukrainian officials who discussed a variety of criminal plans with Kuchma. There is little surprise that opposition member of parliament Yuri Hrymchak has submitted an official request demanding an investigation of many more episodes recorded by Melnychenko that testify to criminal conspiracy of other members of Kuchma’s team, including Prime Æ18
Feel strongly about an issue? Agree or disagree with editorial positions in this newspaper? The Kyiv Post welcomes letters to the editors and opinion pieces, usually 800 to 1,000 words in length. Please e-mail all correspondence to Brian Bonner, chief editor, at bonner@kyivpost.com or letters@kyivpost.com. All correspondence must include an e-mail address and contact phone number for verification.
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April 8, 2011
Russia battles with Europe over Ukraine Editor’s Note: Stratfor, a geopolitical risk analysis company based in Austin, Texas, is a Kyiv Post partner. Stratfor can be found at www.stratfor.com,
Ukraine this week continued its weeklong negotiations with the European Union over associate membership in, and the formation of a free trade agreement with, the bloc. The week of April 10, Kyiv will begin intergovernmental negotiations with Moscow over economic and energy issues, which will be capped off by Russian Prime Minister Vladimir Putin’s April 12 visit to Kyiv. Both rounds of talks show that the economic competition over Ukraine is heating up between Russia and the European Union. Ukraine is important to the Europeans, but it is crucial to Russia, for reasons transcending economic and trade ties. In the battle for influence over Ukraine, the Russians have an advantage, but Kyiv will continue entertaining both sides to extract as many concessions as it can. Ukraine is an important country in terms of economy and size. It has the second largest population (45 million people) and economy ($136 billion) of all former Soviet states, trailing only Russia in both categories. These factors, along with its relatively high per-capita gross domestic product, make Ukraine an attractive market — and asset — to outside powers. For Europe, Ukraine is most important for its location, particularly as a transit state for energy — roughly 25 percent of the European Union’s natural gas comes from Russia, and 80 percent of that gas transits Ukraine. Ukraine’s transit role is likewise important to Russia, but Russia also values Ukraine because of other economic industries, like steel and agriculture, that have served as vital inputs for Russia’s economy from the Soviet era to the present. But Russia’s interests in Ukraine go beyond the economic sphere. Ukraine is also important for military reasons; the Ukrainian city of Sevastopol is the headquarters for Russia’s Black Sea Fleet. Ukraine’s strategic location as a borderland between Russia and Europe and its proximity to Russia’s own breadbasket and economic heartland in the Volga region make the country key to Russia’s geopolitical strength and, ultimately, its survival. A strong Russia allied with Ukraine gives Moscow confidence and strength, particularly in dealing with Europe, while a Russia without Ukraine is weak to its core. The importance of Ukraine to Russia is not lost on
Background The European Union is divided on its approach towards Ukraine, a country seen as deeply European in its culture and history but also as having gravitated towards Russia since the 2010 election of President Viktor Yanukovych, the leader of the Party of the Regions. The mixed message of a recent European parliament resolution is that lawmakers back Ukraine’s EU membership aspirations but warn of “worrying signs of the erosion of democracy and pluralism.” Plutocracy is rule by the wealthy. Oligarchy, which is present in Russia and in some Eastern countries, refers to the control of the state by a few prominent wealthy families. The combination of plutocracy and oligarchy is also known as plutarchy. The Ukrainian government appears to be the richest in the world, according to details disclosed
VOX populili WITH NATALIYA SOLOVONYUK
Do you think it would be better for Ukraine to enter the Russia-led customs union or the free-trade area with the European Union? Why? Bogdan Poderzhetsky, unemployed “I believe that Ukraine will benefit from either. Of course, Russia is pulling Ukraine onto its side, but there are a lot of advantages to being in the EU free-trade zone.”
Russia supporters wave that nation’s flag as they welcome the missile cruiser Moskva, flagship of the Russian Black Sea Fleet as it enters Sevastopol Bay in Crimea in 2008. Russia is trying to entice Ukraine into joining its Customs Union with other Soviet republics, but Ukraine’s leaders say they still prefer a free-trade agreement with the 27-nation European Union.(AFP)
the Europeans and the Americans, who have been trying to lure Ukraine into the Western camp since the fall of the Soviet Union. Ukraine did turn proWestern under the Orangist government of Viktor Yushchenko from 2005-2010, but Russia’s resurgence reversed this trend when the pro-Russian Viktor Yanukovych became president in February 2010. However, Ukraine remains politically and socially divided between pro-Russian and pro-Western elements, and also remains an important tool of influence for both sides.
Trade talks with Europeans This dynamic is on full display as Ukraine wraps up its latest round of talks with the Europeans just before talks with Russia. The main issue between Kyiv and Brussels is the establishment of a free trade agreement. The two parties have held discussions about such an agreement since 2008, and some Ukrainian officials have said the talks could conclude by the end of 2011. However, there are still many obstacles to a free trade agreement. Also,
Æ Europe is losing battle for influence over Ukraine against determined Kremlin leaders while the EU market is a larger and much richer potential trade zone than that which Ukraine is accustomed, many of Ukraine’s main exports — particularly in heavy industry such as steel and chemicals — would suffer as a result of the more competitive and higher quality EU goods. Ukraine’s Æ18
A government of plutocrats GE O R G I GOT E V
Opinion 5
Æ Ukraine has some of richest officials and poorest citizens in Europe during a public event held in Brussels, organized by the European Union-Ukraine Business Council and attended by Ukrainian diplomats.
Richest officials? Speaking on behalf of a leading Ukrainian online news portal which enjoys a fast-growing readership, the site’s editor Sonia Koshkina, considered one of Ukraine’s top journalists, pointed to the wealth of individual cabinet members, but also to the tricks used by other cabinet members to avoid publicly disclosing their millions. Koshkina’s www.lb.ua website is part of the Gorshenin Group, which consists
of an analytical centre, a consultancy and a media network. She said that at least five of the 16 cabinet members are multi-millionaires, and one is a billionaire. According to Ukrainian magazine Focus, First Deputy Prime Minister Andriy Klyuyev possesses – together with his brother Serhiy, who is an member of parliament from the ruling Party of the Regions – $900.8 million, through one of the largest industrial-investment corporations in Ukraine, Ukrpidshypnyk. Deputy Prime Minister and Infrastructure Minister Borys Kolesnikov’s fortune is estimated at $254 million in 2010 and at $292.5 million in 2011, after he became minister. His business interests range from confectionery to football, and he is in charge of preparations for the 2012 European Football Championships. Deputy Prime Minister and Social Minister Sergiy Tigipko has an estimated fortune of $795.5 million in 2011, increasing from $223.6 million the previous year. His business is mainly steel and rail-car building. Emergencies Minister Viktor Baloha’s fortune is estimated by some at $550 million. But his major assets – some 14 companies involved in trade – are declared to belong to his wife, Oksana. Æ18
Oleksandr Pshenychniy, entrepreneur “I think that Ukraine should be with the EU. The economic climate is better there. All that is imported from Europe – cars, for example – will be much cheaper than now.” Bogdan Hmel, student “I think it will be better for Ukraine to be in the EU free trade zone. There are more opportunities for our economy. We will sell more of our goods to Europe, maybe. But Ukraine is not ready yet to meet the conditions of a free trade zone in the EU. Ksenya Bylous, stylist “It is not necessary to go back to where we were 20 years ago. Europe, after all, offers a better perspective than such countries as Russia, Belarus and Kazakhstan. Clearly there are more advantages in the EU with their democratic values, economic experience and potential. Yaroslav Bents, lawyer “Ukraine is not ready yet. In the case of a union between Ukraine and the EU, Russia will lose us on many economic issues that are beneficial to them. But ultimately, it all depends on our president, on his position.” Vox Populi is not only in print, but also online at kyivpost.com with different questions. If you have a question that you want answered, e-mail the idea to kyivpost@kyivpost.com.
6 Business
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April 8, 2011
Agricultural tycoon explains why he is suing government BY O K S A N A G RY T SEN KO GRYTSENKO@KYIVPOST.COM
Just last year, Oleksiy Vadatursky was the agrarian king, flying high as one of Ukraine’s 10 richest people, worth more than $1 billion and looking to invest to help keep his company, Nibulon, as one of Ukraine’s top grain traders. But the government’s decision to ignore Nibulon when handing out quotas to export grain this year has caused huge losses to the company. Meanwhile, authorities granted a huge export quota to a previously unknown company that is partly owned by the state and partly by unknown private investors. Now Vadatursky, a 67-year-old former Soviet collective farm worker, is fighting back, taking the state to court for what he and others say are opaque
Æ Mystery company gets OK to export much of grain crop decisions about who is allowed to make huge profits through grain exports. Through groups such as the American Chamber of Commerce and Ukrainian Grain Association, domestic and top international grain companies operating in Ukraine have threatened
ÆOn the move SERGIY VORONIN was
numerous times in the past months to sue the government for damages caused by protectionist and non-transparent policies. But so far, Vadatursky’s company is the only one of Ukraine’s large grain market players to act on such a threat. “We have sued in order to draw the attention of the country’s authorities to non-transparent allocation of quotas,” Vadatursky said in a telephone interview from the southern city of Mykolayiv, where Nibulon is based. Nibulon woes are a cautionary tale about a company that had invested large sums in infrastructure, and planned to put up further capital, only to be cut out of the market by the government’s increasingly heavy-handed intervention. The government decided to restrict grain exports last year, citing a worse-
than-expected harvest and the need to keep domestic food prices in check. But grain traders, agricultural experts and business groups say the export
restrictions are unjustified and claim the process of handing out quotas was done unfairly and opaquely. Vadatursky wouldn’t put a fig-Æ14
Send On the Move news to otm@kyivpost.com or contact Kateryna Panova and Oksana Faryna at 234-6500. It should include a photograph of the individual who has recently been appointed to a new position, a description of their duties and responsibilities, prior experience as well as education. Note: The Kyiv Post does not charge for publishing these notices or any news material.
ZHANNA KOBYLINSKA
appointed director of the industrial department in Ukraine for Colliers International, a global real estate consultancy firm. Prior to the appointment, Voronin worked as head of the sales department at CSC Telesystems of Ukraine and headed the account sales group at Golden Telecom LLC. Voronin graduated from National Technological University of Ukraine and holds a master of science degree in physics.
Oleksiy Vadatursky says his Nibulon firm, one of the nation’s top grain traders, was shut out of grain exports by the government. (Ukrinform)
ROMAN BONDAR was
was appointed public relations manager for the www.ukrainecityguide.com Internet portal, which was created to support the development of tourism in Ukraine and is owned by a non-governmental organization called Trust Development Ukraine. Prior to the appointment, Kobylinska worked for 10 years at the SBU state security service of Ukraine and for two years as press secretary for the Kyiv-based Embassy of God Church. Kobylinska, who will continue working as a spokesperson for the church, is a graduate of the National Academy of State Security Service.
MAX PANFILOV
appointed partner at Talent Advisors, a domestic recruitment agency specializing in helping clients find top executives. In his new position, Bondar will pursue top administrative talent with a focus on the industrial, mining, metallurgy and agribusiness sectors. Before joining Talent Advisors, Bondar worked at as a talent equity consultant at Ward Howell, an international human resource consulting firm. He also headed the talent acquisition team at XXI Century Investments, a Ukrainian real estate development and property management company. Bondar holds a master’s degree in finance from the National Academy of Management.
was appointed business development director in Ukraine for Baker Tilly, an international auditing and advisory firm. Prior to the appointment, Panfilov worked for different large-scale companies in the United States of America and Ukraine with a total of 20 years of experience in technology and financial sectors. His responsibilities will range from project management to managing partner. Panfilov studied engineering and then received a candidate of science degree at the Telecommunications Academy in Ukraine. He also has a master’s degree in management from Syracuse University in the U.S.
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Business 7
April 8, 2011 Advertisement
Business Sense
Editor’s Note: Business Sense is a feature in which experts explain Ukraine’s place in the world economy and provide insight into doing business in the country. To contribute, contact chief editor Brian Bonner at bonner@kyivpost.com
WITH DMYTRO BIRYUK
New law may help construction industry get back on its feet It came unnoticed by many. But it was an important step towards revitalizing Ukraine’s promising construction industry, which fell into a deep freeze during the 2009 global recession. Long-awaited by the construction businesses, Ukraine’s parliament on Feb. 17 adopted new legislation signed into law by President Viktor Yanukovych. The new law is a positive step for developers, investors, construction companies, banks and other key players involved in construction and affected by city planners. The law simplifies construction procedures, makes the process more transparent, reduces construction time frames and costs. What more could investors – domestic and foreign – have asked for?
Permit simplification Firstly, the number of required construction permits has been reduced by about four times, from 93 to 23. Second, legislation envisions that the timeframe for obtaining all necessary construction documents is to decrease by nearly seven times, from the previous 415 days to just 60. Thirdly, the law introduces tacit consent and declarative principles in construction permitting. These improvements alone will make construction projects more predictable, less corrupt and more efficient. Some experts are already saying that the legislation, if implemented properly, could cut construction costs of residential real estate development projects by 10-20 percent. This should, in turn, make residential property more affordable for buyers, possibly cutting final costs by a third. The implications are huge. If residential real estate becomes more affordable, citizens could start buying again. This, in turn, could help revive the nation’s ailing construction business. And if new projects hit the market, that would increase demand on a large range of construction materials produced domestically, starting with steel and concrete. The benefits for the Ukrainian economy still struggling to crawl out of recession are obvious
Æ Permit simplification, zoning laws, city plans and ability to transfer approvals should curb corruption in building and huge. But there’s more positive news in this story
Transferring assets The new legislation will allow developers to transfer frozen, unfinished construction projects, along with their permit documentation. Construction permits will no longer be tied to a specific developer and general contractor. So, if one firm can’t get things going, another contractor and developer will be able to pick up the project with ease. Troubled developers will now be able to more easily sell, pass along or dispose of unfinished construction that they can’t get off the ground.
Balance of interests The law also balances the interests of developers and communities in public hearings that pertain to city planning. This should allow developers to avoid unfair practices of sham hearings and unwarranted objections to construction projects. The law reserves the rights of communities to participate in discussions of the general plans, zonings and detailed territory plans. The number of community representatives in the conciliation commissions, which consider controversial issues arising in the course of public hearings, must account for 50 to 70 percent of the commission's membership.
Introducing zoning The law introduces zoning and requires local authorities to approve this previously unheard of but crucial practice for Ukraine throughout the
nation. This major reform should put an end to years of chaotic development that has triggered the anger of citizens who saw their neighborhood playgrounds and trees torn down and replaced by new buildings that also blocked the sunshine from their windows. There will now be more control over what is developed where, with the overall interests of citizens and the city taken properly into account. Although city planning documentation is, for now, largely absent in Ukraine, the legislation calls upon local authorities to produce proper city planning plans by Jan. 1. If local authorities fail to do so, the law prohibits them from transferring state or municipal property into ownership or lease of individuals or legal entities. Since local governments significantly depend on land and construction-related payments to fill their budget coffers, compliance is expected to be high.
Combating corruption The above improvements should sharply help reduce bureaucracy and corruption in the construction industry. In addition, the law reduces authorities’ influence on construction procedures. Some experts predict that corruption in the sector could be reduced by a whopping 90 percent. If this happens, it would be a major step forward for builders, their suppliers, homebuyers and the nation. Dmytro Biryuk is an attorney and senior association the Kyiv offices of law firm Schoenherr. He can be reached at office.ukraine@schoenherr.eu.
In case you missed them, read the last six Business Sense columns by experts online at kyivpost.com April 1 with Danylo Spolsky, sales associate at Kyiv-based investment bank BG Capital: “In every way, Poland ahead of Ukraine in capital markets”
March 25 with Viktor Luhovyk, research production director at Dragon Capital: “Markets hopeful about Ukraine”
March 25 with Richard Ferguson, global head of agriculture for Renaissance Capital: “Nation has lessons to learn from faraway Argentina” March 18 with Daniil Shash, sales and marketing director for Ukraine and Kazakhstan at Intercomp Global Services: “Outsourcing payroll gains popularity as way to cut costs in tough economy”
March 25 with Timothy Ash, global head of emerging markets research at the Royal Bank of Scotland in London: “Political risks down, same economic challenges remain” March 11 with Valeriia Gudiy, lawyer with Ilyashev & Partners: “Employees have too little power in draft labor code”
#64*/&44"%7*4&3 Legal services in the context of the new taxation administration The new Tax Code of Ukraine was developed and adopted by the government in a short period KATHERINE of time. Our business was not ready for most of YEGOROVA its new provisions, one of the most incredible senior lawyer requirements is the order of getting the VAT taxpayer certificate. It led to the impossibility of starting a new business for someone. In the interview, Katherine Yegorova, the senior lawyer in Amparo Consulting Group, highlights the influence of the newly adopted legislation, namely the system of tax control and administration of taxation. Whether it expands the Ukrainian market of legal services or not.
In what way will all the latest reforms and the new legislation affect the Ukrainian business? And will it raise the relevance of legal services? Today all Ukrainian business just keeps watching how the new powerful tools of the taxation administration will be used by authorities and tries to adjust to the new conditions of running their business. In my opinion, the process of adaptation should be maximally fast, because the new sanctions of breaking laws according to the new legislation are more impressive than the legal requirements that should be fulfilled. In these risky conditions all entrepreneurs are trying to minimize risks by involving legal and accounting experts who adjust business processes in accordance to novelties and protect the clients’ interests in case of possible violations. Business is trying to survive and develop in absolutely other way. Of course, only qualified experts create all these means and possibilities for profitable and successful business. Can you explain the link between the new tax legislation and expanding of legal market in details? A good example can be the requirements and the order of getting the VAT taxpayer certificate regulated by the articles 181 - 183 of The Tax Code of Ukraine. According to one of them, any enterprise can get the VAT taxpayer certificate only in case of taxpayer’s sales amount to the sum of 300,000 UAH (without VAT). All these transactions should be affirmed by contracts, acts of acceptance of delivery and the bank information on cash flows etc. Everything would be clear if the tax authorities will be ruled just by the laws, not some unclear causes. In order to avoid the process of requiring the VAT taxpayer certificate for a new company, entrepreneurs started to buy the enterprises that already got the VAT taxpayer certificate. Besides, it created the new direction of legal services. Firstly, some creative and predictive companies have new enterprises that were registered before the new Tax Code of Ukraine was adopted and now they just sale them at high prices. Secondly, some law companies provide legal audit of existing companies for a sale before purchase and sales transactions in order to protect the clients’ interests. In case companies have the possibility to fulfill the requirements of the Tax Code of Ukraine, law companies try to provide different legal services to newly registered companies in order to get the VAT taxpayer certificate. In such a way we can say that the new system of tax legislation, namely the new requirements and demands, made legal services more relevant. You said that the reasons of a refusal of the Tax Administration of Ukraine to give the certificate were causeless. What kind of legal services can help to business in such situation? Some companies represent the interests of their clients in tax inspections providing the legal services, namely proving that contracts, acts and information from a bank account are conformed to law requirements and there are no other reasons for refusal. Other law companies try to appeal the decisions of the Tax Administration of Ukraine that contain refusal for giving the VAT taxpayer certificate for an enterprise to the Administrative Court. By the way, there is some positive court practice for new companies, by which the tax authorities are obliged to provide the enterprises with the VAT taxpayer certificate. There is a chance to get the VAT taxpayer certificate under the court judgment that cancels illegal and baseless decisions of the Tax Administration of Ukraine. The court practice will improve the situation with receiving the VAT taxpayer certificate. Do you think that the market of legal services will become sustainable in a short period of time?
The market of legal services in Ukraine will be stable anyway, and it does not depend on this particular problem. The reason is the whole system of Ukrainian legislation and political strategy of country development, namely the planned chain of reforms. Any new legal act will be accompanied by difficulties that will raise the relevance of legal services.
AMPARO CONSULTING GROUP 15 Saksahanskoho str., #10, Kyiv 01033, Ukraine tel./fax +380 44 289 42 42, 289 38 88 amparo@amparo.ua www.amparo.ua
8 Business Focus
April 8, 2011
www.kyivpost.com
Special news coverage ahead on the following topics in Business Focus: April 22 Real Estate
May 13 Mergers & Acquisitions
June 10 Agribusiness & Food
July 1 Law firms/Top lawyers
July 22 Ukraine’s Energy Challenges
Mission possible? How to get justice without rule of law BY K AT E RY N A PA N OVA PANOVA@KYIVPOST.COM
A key factor businesses ponder before pumping money into a country is whether they can protect their investment through a fair justice system. Investors say they ask: will they find fair and quick resolutions to disputes? Is there equal and predictable application of the law? Are courts independent, accountable and competent? Unfortunately, despite Ukraine’s many upsides, the answers to these questions about justice are all disappointing “nos.” Investors who enter Ukraine tend to have a big appetite for risk, the muscle to overcome obstacles or the vision to capitalize on opportunities -- or a combination of all. One key to success in Ukraine’s muddy waters, however, often is the expertise of brilliant lawyers. Having the best lawyers can make the difference between success and failure and help companies determine whether the risks are acceptable. With Ukraine’s complicated and erratic legal environment, lawyers are in demand. “The quality of legislation remains poor even in very basic aspects,” said Serhiy Chorny, co-managing partner at Baker & McKenzie’s Ukraine practice. Chorny suspects that Ukrainian powerbrokers sometimes make rules purposefully unclear and difficult to
comply with. The goal, he said, may be to keep competition out and demand high for fixers. By just reading the laws, “it is often difficult, if not impossible, to provide a qualified answer even to simple questions posed by our clients, especially in the famous tax and currency regulation area,” he admitted. Ukraine’s legal framework falls short of international and European standards, agrees David Vaughn, chief of the Ukraine Rule of Law Project, which is funded by the U.S. Agency for International Development. According to those standards, Ukraine’s High Council of Justice is not independent, for it does not have more than half of its judges appointed by peers. Moreover, how can anyone expect judges to be independent when they serve at the will and pleasure of the president? “Judicial immunity is far too expansive ... Also, the president should not have the authority to ‘liquidate’ courts, as set out in current legislation,” Vaughn added. Another big issue is that no law firm can guarantee confidentiality to their clients. Courts and prosecutors have, in recent cases, demonstrated that they are not ready to respect the right of a lawyer to keep secrets about clients. After prosecutors raided the Kyiv office of Magisters law firm and seized documents involving a high-profile cli-
Myron Rabij of Salans
ent – state-owned energy monopoly Naftogaz – it became clear that if authorities want proprietary information, they can get it. “We consider it to be a step backwards for democracy. If that continues, any law firm may be at risk,” said Andy Hunder, international business development director at Magisters law firm. After numerous raids on Magisters, the International Bar Association’s Human Rights Institute complained to Ukraine’s general prosecutors. But the appeal appears to have fallen on deaf ears. But these are not the only troubling issues. To provide legal services, surpris-
ingly – even shockingly -- no license is required in Ukraine. “Technically you are not obliged even to be a law school graduate,” said Myron Rabij, partner at the Kyiv office of the international law firm Salans. Another shock for a foreigner is the lack of insurance protection to compensate for bad legal advice. “In the United States, United Kingdom and Commonwealth, it is not uncommon that lawyers get sued for bad advice. So they need to have insurance. It is mandatory,” Rabij explains. In Ukraine, only several foreign law firms provide such protection. While sorting out such a lawless environment may actually be a boon to lawyers, the state seems to take the most advantage of the situation. “The laws are selectively enforced and implemented,” said Alex Frishberg, head of Frishberg & Partners law firm.
Avoiding court Many foreign law firms working in Ukraine avoid going to court. “Once your case may affect certain state or oligarchal interests, your chances for success are slim,” Rabij explained. “Realistically you will have a problem. It is difficult to predict whether the court will be objective.” Many Ukrainian judges are both overloaded with cases and unqualified. A judge may try as many as 20 cases
per day, from intellectual property to taxes. Those who track court decisions often find no consistency in rulings. But these are minor problems compared to the overarching ones – corruption and lack of independence, putting premiums on bribes and connections. It can be hard to prove. “A case delivered to a court was lost. The judge fell ill and went on vacation for half a year. Sometimes judges were deliberately making mistakes in court decisions and other documents that made legal enforcement impossible. The list of such tricks could be very long,” said Vyacheslav Korchev, managing partner at Integrites law firm. Even if demands for bribes are met to achieve a favorable ruling, there are no guarantees. “Personal contacts are the only thing you can rely on. Personal connections in Ukraine – like in the old days in Sicily – work very well, and even beat bribes,” Frishberg said. That is why Svitlana Romanova, partner and head of litigation practice at Baker & McKenzie, believes in justice in Ukraine only in cases in which no powerful players are involved. Romanova has seen lots of example of how judges disrespect the law. “When my foreign colleagues hear that a court can make a decision in 20 minutes, or that I may be given as little as five minutes to explain my position, they don’t Æ11 believe it,” Romanova said.
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Business Focus 9
April 8, 2011
When in trouble, Ukrainians turn to top foreign law firms BY V L A D L AV R OV LAVROV@KYIVPOST.COM
In Ukraine’s extremely tough and nontransparent legal environment, more high-profile clients in the nation are hiring foreign lawyers with star power. The hope is that these high-priced advocates will be able to generate favorable international publicity that somehow helps to win the case in Ukraine. At least this is how most experts explain the recent decision of former President Leonid Kuchma to hire celebrity U.S. lawyer Alan Dershowitz to work on his defense team. Kuchma, the authoritarian ruler from 1994 to 2005, is facing charges of abuse of office related to the Sept. 16, 2000 kidnapping and murder of journalist Georgiy Gongadze. According to informed sources, former Prime Minister Yulia Tymoshenko is taking the same route. She is said to have hired Covington & Burling, a Washingtonbased law firm, to represent her in the upcoming court trial on charges of abuse of power during her second term as prime minister from 2007 to 2010. Covington & Burling is considered to be one of the most respectable and high-powered U.S. legal firms. One former partner is U.S. Attorney General Eric Holder. Dozens of the company’s employees held various jobs in the U.S. Government. The firm itself has recently been named one of the Top 30 international arbitration practices in the world by London-based Global Arbitration Review) publication. The value of pend-
ing counsel work at Covington & Burling is valued at $17.5 billion. And some of these U.S. lawyers are, ironically enough, defending against allegations dug up by other American companies. For instance, Tymoshenko allegedly misused nearly $300 million, which Ukraine received from selling emission quotas under the Kyoto protocol. The charges are based on an investigation by a U.S. legal team, including Washington-based Trout Cacheris and Akin Gump Strauss Hauer & Feld. They partnered with investigative agency Kroll for the probe that cost Ukraine’s taxpayers an estimated $3 million. While it’s not clear how much Kuchma is paying Dershowitz, the former president has high expectations. As Ihor Fomin, also working on Kuchma’s defense team said, Dershowitz’s job is “to prove that Ukraine’s ex-president is innocent not only for Ukraine, but for the entire world community.” And before he even arrived in Ukraine, the Harvard Law School professor has shown that Kuchma is likely to be getting a bang for his buck. Dershowitz called on Prosecutor General Viktor Pshonka to drop the case against his client. Otherwise, he said, the impression that the case is “politically motivated” will only be reinforced. Dershowitz, who won 13 out of 15 murder or attempted murder cases that he worked on, also categorically said the authenticity of the Melnychenko tapes being used as evidence can never be established. He
Alan Dershowitz
Eric Holder
was referring to alleged recordings by former Kuchma bodyguard Mykola Melnychenko, in which Kuchma and top officials are heard discussing ways to silence Gongadze. Such heightened activity of foreign legal gurus in Ukraine has drawn a divided response in Ukraine’s legal industry. Some experts and market players note that the growing popularity of hiring foreign attorneys is a natural response to the rampant corruption and unprofessionalism that plague Ukraine’s judiciary, recently named by Transparency International as the most corrupt in the world. For some, the foreigners’ presence in the courtroom make the case an international one and reminds judges and prosecutors that appeals of unfa-
vorable verdicts may get lodged in European legal bodies. “Having a foreign lawyer means having someone who has new clues and ideas about the case,” said Julian Ries, head of Beiten Burkhardt law firm in Kyiv. “Sometimes, you might get solutions that are new to the local law.” Extra publicity can also help to ensure that judges and prosecutors rule with reason. “We would bring along Ukrainian lawyers and also would invite foreign embassy representatives. From our experience, the judge would be more careful in reasoning his decisions in the end,” Ries explained. “This does help to prevent any biased decisions.” However, others say the hiring of expensive foreign lawyers is nothing but a PR stunt of questionable
value, as Ukraine’s judges are unlikely to treat foreigners with reverence or respect. “Unlike foreign courts, there is no respect towards lawyers in Ukrainian courts. You really have to have processes in the same court for decades to earn some respect from the judges,” said Oleksandra Pavlenko, partner at Pavlenko & Poberezhnyuk Law Group. Pavlenko recalled one of the first instances when foreign lawyers were hired by Ukrainian clients. Early in 2005 a group of Swiss lawyers was hired as part of Viktor Yanukovych’s legal team to appeal the results of final round of presidential elections won by his opponent. In the wake of the Orange Revolution, the court overturned a rigged election in favor of Yanukovych and ordered a new vote, won by Viktor Yushchenko on Dec. 26, 2004. “As a person who was present in the Supreme Court back then, I can say that they weren’t of much use. At some point, it became really sad to watch. The judges almost looked at foreign lawyers with pity, as his arguments were really far from Ukraine’s reality,” Pavlenko said. The benefit of a foreign lawyer with an impressive CV, Pavlenko said, may be only psychological. But the foreign lawyers might also be more honest than some Ukrainian ones. “There are less chances that the lawyer will be paid by counterparts to leak information to them,” Pavlenko said. Kyiv Post staff writer Vlad Lavrov can be reached at lavrov@kyivpost.com
10 Business Focus
www.kyivpost.com
April 8, 2011
Mission Ten events that shaped nation’s legal possible: fair justice environment in the last 12 months in a country with no rule of law BY KAT ERYNA PA NOVA
PANOVA@KYIVPOST.COM
Æ8
Once, when Romanova was defending her client, steel giant ArcelorMittal, against billionaire Igor Kolomoisky, she was shocked by a judge in Dnipropetrovsk who issued a ruling even without holding a court trial to hear evidence in the case. “His hands were shaking, his mobile was constantly ringing, and in front of everybody he picked it up and reported to someone that everything is done,” Romanova recalled. Some lawyers hope that things will get better, if only because “it could not get any worse,” as Frishberg put it. “It always has been bad and is still bad,” Rabij from Salans said. “If such a trend continues, the legal profession will be seen in Ukraine as a type of philosophy rather than anything of practical value,” predicted Chorny from Baker & McKenzie. However, there are ways to adapt. Romanova asks for recordings of all trials, and invites journalists and embassy workers to hearings in an attempt to help keep judges honest. Lawyers could do more to improve their situation. The lack of a unified bar association and professional standards for lawyers is a problem, said Vaughn of the U.S. AID Rule of Law Project. “The legal community should lead by example,” he said. Legal education also needs to be improved. While there are more than 280 law schools in Ukraine, only approximately 200 law schools exist in the United States – a nation with more than six times the population of Ukraine. Lawyers could support a credible process for law school accreditation, and require all students to study ethics. Vaughn believes these changes would help substantially, since law students represent future generations of judges, prosecutors and attorneys. Kyiv Post staff writer Kateryna Panova can be reached at panova@kyivpost.com
The Ukrainian legal environment is certainly a tough one. It’s notoriously cumbersome and overly complicated with many contradictory laws, regulations and court decisions that fuel suspicions of rampant corruption. These drawbacks are reflected in the Global Corruption Barometer 2010, a recent publication by Transparency International, a corruption watchdog. According to its findings, Ukraine’s judiciary is on par with Peru’s and is considered the most corrupt in the world. In the absence of transparency and predictability, players in the legal industry are left looking for clues in order to predict which way the Ukrainian judiciary is moving in the near future. So the Kyiv Post has decided to name the deals, court rulings and key events of the last year that either influenced the country’s business climate, revealed the unpredictability of the legal environment or played an important role in the way the legal practice is conducted.
1996 constitution returns In September, the country reverted to a presidential republic when changes in the constitution, made in 2004, were declared unlawful. The main concern is not only the political motivation of the decision, but its dubious consequences for the political acts and legislation of 2005-2010, experts believe.
President Viktor Yanukovych’s visit to France, prosecutors suddenly changed their mind and withdrew the case, further underscoring how politicized the nation’s criminal justice system is. Kyivstar, Ukraine’s largest mobile provider
Ukraine to pay $9.5 million in damages to American businessman Joseph Lemire, owner of Gala Radio station who has been prevented from expanding his radio station’s frequencies since 1996. The court found that Gala Radio had been hindered by Ukraine from developing into a full national FM network. This is a rare case when a foreign investor has the nerve to claim against Ukraine.
RosUkEnegro wins in Stockholm The Arbitration Institute of the Stockholm Chamber of Commerce ordered state gas company Naftogaz Ukrainy to return 12.1 billion cubic meters of natural gas to Swiss-registered gas trader RosUkrEnergo, part-owned by Ukrainian billionaire Dmytro Firtash. Former Prime Minister Yulia Tymoshenko said Naftogaz didn’t seem to put any effort into defending its position because of Firtash’s connections with President Viktor Yanukovych’s inner circle, a charge that the government denies.
Telenor, Altimo in big merger
Prosecutors raid Magisters
The deal ended five years of corporate conflicts between Norwegian Telenor and Russian Alfa Group, which finally combined their joint assets in VimpelCom company, the biggest telecommunications operator in the former Soviet Union and Southeast Asia. The portfolio includes Kyivstar, Ukraine’s largest mobile provider. This case is a prime example of how to resolve a long-running corporate conflict out of court.
About 30 armed men and investigators from the General Prosecutor’s Office conducted a 14-hour search in the Kyiv office of Magisters law firm, detaining the firm’s staff and taking away documents relating to the Naftogaz case, as well as computers and servers. The legal community was shocked, and other reports surfaced of similar raids on law firms. Even the International Bar Association came out with a statement against the heavy-handed state harassment and interference in client confidentiality.
No protection for Raffaello Ferrero sought to prevent Landrin from invading the Ukrainian market with its Waferatto chocolate, which it said copied the famous Raffaello brand. Having succeeded in similar cases in Russia and Georgia, Ferrero nevertheless lost in Ukraine. The local court canceled protection of the Raffaello trademark. Experts believe that the results may affect intellectual property cases.
Kryvorizhstal, the nation's largest steel plant, is owned by ArcelorMittal.
Illegal foreign currency loans
State tussles with ArcelorMittal First the State Property Fund granted Ukraine’s biggest foreign investor ArcelorMittal the right to extend the time needed to fulfill investment pledges made when the company bought Kryvorizhstal steel plant in 2005. The auction stands today as one of the few competitive and transparent privatizations of formerly Soviet assets, fetching a whopping $4.8 billion. But last year, the general prosecutor’s office came to the conclusion that such an extension was unlawful and went to court seeking to cancel it, an action that many saw as a prelude to government renationalization of the plant. After French President Nicholas Sarkozy raised the issues during
An OTP Bank borrower sought to escape repayments and raised the argument that the bank was not authorized to provide foreign currency loans. The courts supported him, putting a gigantic amount of loans during the economic boom of 2004-2008 in danger of non-repayment. However, the case is now being reconsidered, which still gives some hope to the banks.
Luganskteplovoz Briansk Machine Buiding Factory had been struggling for years to buy locomotive factory Luganskteplovoz, one of the best remaining gems yet to be privatized in Ukraine. The deal was challenged in court, but the investor eventually won, putting an end to at least one of the many privatization controversies in Ukraine.
American investor wins $9.5 million claim In March, a World Bank arbitration tribunal ordered
Dmytro Firtash on March 24 receives a scroll of gratitude that confirms his admission to the Guild of Benefactors of the University of Cambridge.
Judge dismisses Firtash lawsuit In February, a London judge dismissed a libel lawsuit filed by Ukrainian billionaire Dmytro Firtash against the Kyiv Post, saying that the link to English jurisdiction was “tenuous in the extreme” and calling the lawsuit “almost an abuse of process.” The ruling was hailed as a victory for free speech internationally and a blow to so-called “libel tourism,” in which wealthy foreigners use the United Kingdom’s weak libel laws to file lawsuits despite having no substantial connection to England. Kyiv Post staff writer Kateryna Panova can be reached at panova@kyivpost.com
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April 8, 2011
Who are best lawyers in Ukraine? Everyone, if you believe some of these legal rankings BY K AT E RY N A PA N OVA PANOVA@KYIVPOST.COM
Reading the websites of Ukrainian law firms, it seems that every one of them is the “best.” Each is the “best” in a particular practice, has the most professional lawyer or is just No. 1 in the country. Dozens of rankings and professional awards are mentioned to back up a firm’s excellence -- from Ukrainian Yuridychna Gazeta to the British Legal Awards. Even market leaders are involved in this vanity fair, which seems more important to the law firms themselves rather than a useful guide for their clients. The problem is that it is often quite hard to understand which awards truly signify professional achievement and which ones simply are paid for. For Alex Frishberg, head of Frishberg & Partners law firm, “to be ranked, you have to pay every year and quite a lot. The firms who have been paying for advertisements for years are guaranteed to participate in one or another nomination.” His firm hasn’t participated in the game for a while and, therefore, is no longer rated, Frishberg said. He believes all of the ratings to be just advertisements, which might cost tens of thousands of dollars per year. “You can take that logo, put it on the website and say that you are rated No. 1 – the best in the world,” he said, chiding colleagues. It appears that British ratings are somehow better perceived than all the others, probably because many international deals are governed by United Kingdom law and most of the offshore jurisdictions use it as well. A whole industry exists to nurture this desire to be number one, if not because of real achievements, then just for the willingness to spend money. The Kyiv Post looked through several offers to participate in the ratings
to get an idea of the current prices. The first email to the Kyiv Post came from one ratings agency, claiming “to represent the leading professional firms, within the various areas of specialization, across the various geographical regions.” Winning the rating costs roughly $2,500, and another $150 will get a trophy. Another email with suspicious proposals came from a second ratings firm, considered reputable by some lawyers. It contained a proposal for a law firm to become an “exclusive expert” for a guide about raising capital – all for a discount price of up to $7,500. “We believe that good companies do not need advertisement. We are even very selective in submitting the information about our firm to directories and ratings,” said Oksana Buchatska, marketing and PR coordinator for Baker & McKenzie, a firm that has a policy against paying for these advertisements to secure ratings. According to her, the only trustworthy ratings are Chambers Global, Legal 500, IFLR and PLC Which Lawyer. Andy Hunder, international business development director at Magisters, said that participating in reputable contests is “usually transparent and always free” and buying advertisements would not influence a firm’s position in the ranking. “Number one is Chambers & Partners, having an approximately 61 percent market share. Then there is Legal 500 with about 21 percent and you have the others, like Who Is Who legal, PLC Which Lawyer, MartindaleHubbell, which have under 10 percent,” Hunder said. Rankings done by Ukrainian media are generally believed to be either corrupt or done without interviewing clients for references. “We have lots of questions about how some firms we even do not know get to the first places there,” Buchatska said skeptically.
Business Focus 11
Ukraine says $8 billion offer not enough to halt EU integration bid Æ1 other members include Belarus and Kazakhstan. Both of those nations agreed last year to bring their foreign trade policy in line with Russia and open up their markets. But for Ukraine, such a deal would preclude signing a free trade agreement with the EU. Yanukovych’s annual address to parliament comes ahead of Russian Prime Minister Vladimir Putin’s April 12 visit to Ukraine-, one that is sure to revive trade talks. “I think the further development of our ties with the customs union will be based on new agreements – a free trade agreement and a possible agreement on cooperation under a ‘3+1’ scheme” involving Russia, Belarus, Kazakhstan and Ukraine, Yanukovych said. Just as Yanukovych was delivering his speech, the deputy head of Russia’s gas giant Gazprom, Valery Golubev, said Russia could cut Ukraine’s annual gas bill by $8 billion if it joins the customs union. The geopolitical tussle comes as Kyiv officials completed a week of critical negotiations in Brussels over free trade and associate membership agreements. Both sides hope to finalize the agreements this year. The Kremlin offer illustrates Russia’s desire to keep Kyiv within its sphere of influence. It could prove tempting for Ukraine, whose economy relies heavily on Russian fuel imports and is crawling out of a deep recession. Sharp natural gas price hikes imposed by Russian since 2006 have hurt profits in Ukrainian factories and have kept annual inflation rates at double-digit levels. “This is a serious offer from the Russians, who seem desperate to lock Ukraine in and make sure it does not sign the free trade agreement with the EU,” said Timothy Ash, global head of emerging markets research at the Royal Bank of Scotland in London. “Ukraine is, as ever, swinging both ways, trying to milk both cows.” Asked about the Russian offer for a massive gas price discount, a senior Ukrainian official said: “We’ve come so far in free trade talks with the EU
Ukrainian President Viktor Yanukovych greets deputies after his annual address to parliament in Kyiv on April 7. (AP)
that we can’t turn back. The Russians finally realized we are really close to completing a free-trade agreement with the European Union. They didn’t believe we could get so close.” However, the official stressed that Ukraine seeks to preserve its large volume of trade with Russia and other former Soviet republics, on par with trade to Europe. Thus, the official said, Ukraine will “seek a free trade agreement with Russia and other neighbors, but only if it is based on [World Trade Organization] rules.” Meanwhile, EU officials have expressed concern in recent weeks about Ukraine’s demands to keep protectionist policies in place for a range of products, including grain. The Russian proposal could offer short-term breathing space for Ukraine’s ailing economy, while the
EU free-trade deal could bring shortterm pain to Ukraine’s economy as it adjusts to the new competition. According to Ash of the Royal Bank of Scotland, the Russian offer “represents a $200 per billion cubic meter cut in Ukraine’s gas price. It could push Ukraine’s current account into surplus.” But in the long-term, Ukraine and Europe will benefit from more trade. Ukraine’s 45 million people offer a vast and largely untapped market for EU products, while Ukraine already ranks as a top global exporter of grain, metals and chemicals. Other domestic sectors, however, are in dire need of becoming more competitive. A free trade deal with the EU could also stimulate lagging foreign investment in corruption-tainted Ukraine.
12 Business Focus
April 8, 2011
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WND
Corporate, M&A, banking and finance, real estate, litigation
Bank “Standart”, Standart NV, Tehnoplaza Ukraine, Med Lab Technology, Ukrtechnofoods, Blue Ribbon Center UNDP, Streamline Shipping,
English, German, Polish, Russian
EBS (Emergex Business Solutions), (in Ukraine since 1998), www.ebskiev.com, info@ebskiev.com, 13A Universytetska, Str., Kyiv 03110, Ukraine (44) 249-79-05 (44) 249-79-06
Helen Volska, Managing Partner and Director
0/100
Kyiv
85
WND
Accounting, payroll outsourcing, preparation of tax, financial, managerial reports, IFRS and GAAP reports preparation, tax issues
WND
English, German, French, Spanish, Italian
EnGarde Attorneys at Law, (in Ukraine since 2009), www.engarde-attorneys.com, office@engarde-attorneys.com, 4 Vorovskogo Str., Kyiv 04053, Ukraine (44) 498-73-83 (44) 498-73-85
Irina Nazarova
100/0
Kyiv, Ukraine
22
WND
Dispute resolution, international arbitration, corporate law, M&A, competition & antitrust, restructuring & insolvency, intellectual property
WND
English, German, French, Spanish
WND
English
Ernst & Young, (in Ukraine since 1991), www.ey.com/ua, kyiv@ua.ey.com, 19A Khreschatyk Str., Kyiv 01001, Ukraine Kyiv: (44) 490-30-00 (44) 490-30-30 Donetsk: (62) 340-47-70
Alexei Kredisov, Country Managing Partner Vladimir Kotenko, Tax & Legal Partner
WND
London, UK
517
WND
Assurance, tax and legal, advisory, transactions
Gide Loyrette Nouel, (in Ukraine since 2006), www.gide.com, gln.kyiv@gide.com, 56A Bohdana Khmelnytskoho Str., Kyiv 01030, Ukraine (44) 206-09-80 (44) 206-09-81
Karl Hepp de Sevelinges
0/100
Paris, France
40
WND
Legal services in all areas of business law
WND
English, French, German
Goerlitz & Partners, (in Ukraine since 2000), www.goerlitz-partner.com, info@goerlitz-partner.com, 13 M. Pymonenko Str., building 6A, off.#13, Kyiv 04050, Ukraine (44) 494-49-33 (44) 494-49-44
Yuriy Rylach
60/40
Moscow, Russia
9
90-220 Euro
General legal consulting, corporate restructuring & governance, tax planning, contracts, real estate, employment
WND
English, German, French
Golovan and Partners Law Firm, (in Ukraine since 1996), www.golovan.com.ua, Office.Donetsk@golovan.com.ua, 21A Illicha Str., Donetsk 83003, Ukraine In Donetsk: (62) 335-96-32 (62) 335-97-70 (62) 335-98-30 In Kiyv: (44) 230-47-71 (44) 230-47-81
Dr.Igor V.Golovan, Managing Partner
100/0
Donetsk, Ukraine
28
1000-2500 UAH
M&A, energy companies legal support, telecommunications, litigation, arbitration
WND
English
Gvozdiy & Oberkovych Law Firm, (in Ukraine since 2004), www.golaw.ua, info@golaw.ua,19B Instytutska Str., off.#29, Kyiv 01021, Ukraine (44) 581-12-21 (44) 581-12-22
Valentyn Gvozdiy, Sergiy Oberkovych
100/0
Kyiv, Ukraine
17
WND
Agriculture & land, corporate & M&A, green energy, litigation, real estate & construction, tax, banking & finance, IP
Marks & Spencer, Československá obchodní bank, Donegal FRS Group, PSG Group, AGORA, South Airlines, Mars Capital
English
Leading Ukrainian and international companies in Ukraine and abroad
English
Ilyashev & Partners, (in Ukraine since 1997), www.attorneys.ua, office@attorneys.ua, 11 Kudryavska Str., Kyiv 04053, Ukraine Kyiv: (44) 494-19-19 (44) 494-19-99 Kharkiv: (57) 717-54-97 (57) 717-59-64
Mikhail Ilyashev
100/0
Kyiv, Ukraine
45
90-430
Corporate law, M&A, dispute resolution, tax, labour law, banking & finance, intellectual property, real estate etc.
Integrites international law firm, (in Ukraine since 2005), www.integrites.com, info@integrites.com, 15B Borisoglebska Str., Kyiv 04070, Ukraine (44) 391-38-53 (44) 391-38-54
Vyacheslav Korchev
100/0
Kyiv, Ukraine
76
100-350 Euro
Trade finance, banking & finance, M&A, dispute resolution, corporate finance, real estate & construction
EBRD, OTP Bank, MHP SA, Bank of Cyprus, ATB-market, Rabobank Int., Hochland, Euler Hermes, NEFCO
English, Russian, Kazakh
Konnov & Sozanovsky Attorneys at law, (in Ukraine since 1992), www.konnov.com, info@konnov.com, 23 Shota Rustaveli Str., off.#3, Kyiv 01019, Ukraine (44) 490-54-00 (44) 490-54-90
Aleksey Ivanov, Managing Partner
100/0
Kyiv, Ukraine
35
30-300 Euro
Commercial law, competition, copyright and media, corporate & M&A, IP, real estate, construction and land, litigation, tax law
Oriflame, ZARA, Microsoft, Caterpillar Financial, Logoplaste, Ferrero, Agro-Soyuz, Mitsubishi Corporation, Film.UA
English, German, French
WND
Finish, German, English, Swedish
KONSU KYIV LLC, (in Ukraine since 2008), www.konsu.com, kiev@konsu.com, 9/2 Chervonoarmiyska, off.#31, Kyiv 01004, Ukraine (44) 499-13-55 (44) 499-13-54
CEO of Konsu Group Manfred Janoschka, Deputy Director Oksana Kochmarska
0/100
Finland, Russia, Germany Konsu is member of Accountor Group www.accountorgroup.com
11
WND
Registration of legal entities, contract law, compliance review, Due diligence and financial management service
Lavrynovych & Partners law firm, (in Ukraine since 2004), www.Lp.ua, office@Lp.ua, 14/24 Klovsky uzviz, off.#101, Kyiv 01021, Ukraine (44) 494-27-27 (44) 492-99-97
Maksym Lavrynovych, Managing partner
100/0
Kyiv, Ukraine
53
WND
Corporate law/M&A, financial law, international law, real estate, litigation, competition law, PPP
UKRENERGO, Louis Dreyfus, Azovmash, Kyivstar, Puma, Bank of Cyprus, Aeroc, Maspex, Universal Bank, McDonald’s, JTI
English, Italian
www.kyivpost.com
Business Focus 13
April 8, 2011
LEGAL SERVICES IN UKRAINE
Advertisement
Listing is arranged in alphabetical order TEL./FAX
TOP EXECUTIVE
OWNERSHIP, UKRAINIAN/ FOREIGN (%)
HEADQUARTERS
# OF FULL-TIME EMPLOYEES IN UKRAINE (TOTAL)
PRICE RATE ($ PER HOUR)
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MAJOR CLIENTS
FOREIGN LANGUAGES
Altimo, Erste Bank, Goldman Sachs, Imerys Group, Intesa Sanpaolo S.p.A., JP Morgan, PZU, Saint-Gobain, Shell, SSL
English, German, French, Spanish, Polish
Magisters, ( in Ukraine since 1997), www.magisters.com, kyiv@magisters.com, 38 Volodymyrska Str., Kyiv 01034, Ukraine (44) 492-82-82 (44) 492-82-72
Andrew Mac
WND
Kyiv, Ukraine
130
WND
B&F, competition, IP, international arbitration, litigation, M&A and corporate, real estate & construction, tax
Misechko & Partners, Law Firm, (in Ukraine since 2009), www.misechko.com.ua, office@misechko.com.ua, 76B Volodymyrska Str., off.#7, Kyiv 01033, Ukraine (44) 279-39-43 (44) 287-54-80
Volodymyr Misechko
WND
Kyiv, Ukraine
8
80-250
Tax, custom and legal advisory, corporate finance, antitrust & competition, litigation
WND
English, French
WND
English, German
WND
English
Noerr TOV, (in Ukraine since 2007), www.noerr.com, info@noerr.com, 7/11 Khreschatyk Str., Kyiv 01001, Ukraine (44) 495-30-80
Dr. Mansur Pour Rafsendjani
0/100
Munich, Germany
30
WND
Legal and tax advisory, M&A
OL&RUST, (in Ukraine since 2000), www.barrister.com.ua, office@barrister.com.ua, 39-41 Khoriva Str., Kyiv 04071, Ukraine (44) 545-67-77 (44) 545-65-75
Roman Khrustenko
100/0
Kyiv, Ukraine
14
100-400
JSC, M&A, due diligence, judical practice, licensing, antimonopoly, intellectual property, bankruptcy, tax
Pakharenko & Partners, (in Ukraine since 1992), www.pakharenko.com, pakharenko@pakharenko@kiev.ua, Business Centre Olimpiyskiy, 72 Chervonoarmiyska Str., Kyiv 03150, Ukraine (44) 593-96-93 (44) 451-40-48
Antonina PakharenkoAnderson
100/0
Kyiv, Ukraine
50
WND
Intellectual property, media, competition, corporate, contract, customs, labour law
WND
English, French, German, Spanish, Portuguese, Chinese, Czech, Polish
Pavlenko & Poberezhnyuk Law Group, (in Ukraine since 2008), www.p-p.org.ua, office@p-p.org.ua, 23A Zolotoustivska Str. , Kyiv 01135, Ukraine (44) 281-06-00 (44) 281-06-01
Oleksandra Pavlenko, Larysa Poberezhnyuk
100/0
Kyiv, Ukraine
15+
WND
Litigation and ADR, resolution of corporate disputes, securities and funds litigation, corporate, land, RE, political advocacy
VTB bank, Promsvyazbank, Sibir Airlines (S7), Astelit (Life:), Investment-financial group TAS, Pharmaceutical firm Darnitsa
English, German, Polish
PETERKA & PARTNERS, (in Ukraine since 2006), www.peterkapartners.com, office@peterkapartners.com, 17/52 Bohdana Khmelnytskoho Str., Kyiv 01030, Ukraine (44) 581-11-20 (44) 581-11-21
Alexander Poels, LL.M.
0/100
Prague, Czech Republic
15
WND
Foreign investment, commercial, M&A, competition, real estate, labor, financial, banking, tax, litigation, etc.
Peugeot Citroen, Veolia Voda, Bel Shostka, ECE, Manship, Skoda, KBC, Vinci, ADB, Novo Nordisk, Konica Minolta, KRKA
English, French, German, Czech, Slovak, Dutch
Popko Brothers & Partners, (in Ukraine since 2009), www.popkoandpartners.com, office@popkoandpartners.com, 72 Chervonoarmiyska Str., off.#18, Kyiv 03150,Ukraine (44) 492-16-00 (44) 492-16-01 (44) 492-16-02
Vadym Popko
100/0
Kyiv, Ukraine
12
100-350
Litigation, corporate law, M&A, banking & finance, mediation, antitrust, family law, real estate, bankruptcy
Altis-Holding, KyivPidzemShlyakhBud, Eurogasbank, Bogner, Prime Yalta Rally, Baramist Limited, Praktika, BRP
English, French, German
WND
English, German, Russian
ROEDL & PARTNER, (in Ukraine since 2003), www.roedl.pro, info_ua@roedl.pro, 40 Hlybochytska Str., Kyiv 04050, Ukraine (44) 586-23-03 (44) 586-23-04
Klaus Kessler
0/100
Nuremberg, Germany
WND
WND
Accounting outsourcing, audit, tax, legal advice, litigation, M&A structuring, tax planning, AMC-procedures
Salans, international law firm, (in Ukraine since 1992), www.salans.com, kyiv@salans.com, 49A Volodymyrska Str., Kyiv 01034, Ukraine (44) 494-47-74 (44) 494-19-91
Oleg Batyuk, Managing Partner, Kyiv
0/100
International law firm, 22 offices worldwide/1 office in Ukraine
70
WND
Corporate/M&A, banking and finance, real estate, tax, employment, competition, energy/natural resources, dispute resolution, IP
WND
English, French, German
WND
English
UBS, Credit Suisse, CME, Porsche, Coca-Cola, Evraz, HSBC Standard Bank, Japan Tobacco, Philip Morris, TUI Travel, Societe Generale, TNK-BP
English, French, German
Salkom Law Firm, (in Ukraine since 1990), www.salkom.ua, salkom@salkom.kiev.ua, 12 Khreschatyk Str., Kyiv 01001, Ukraine (44) 537-39-40 (44) 537-39-55
Evgen Kubko
100/0
Kyiv, Ukraine
57
90-350 Euro
Antitrust and competition, banking & finance, corporate/M&A, energy, IP, labour & employment, litigation, real estate, securities, tax
Sayenko Kharenko, (in Ukraine since 2004), www.sk.ua, info@sk.ua, 10 Muzeyny Lane, 7th floor, Kyiv 01001, Ukraine (44) 490-60-00 (44) 490-62-50
Michael Kharenko
100/0
Kyiv, Ukraine
80
WND
Antitrust, business crime, capital markets, corporate , litigation, finance, IP, labour, real estate, restructuring, tax
Squire Sanders Ukraine, LLC, (in Ukraine since 1992), www.ssd.com, Peter.Teluk@ssd.com, Leonardo Business Center, 19-21 Bohdana Khmelnytskoho Str., Kyiv 01030, Ukraine (44) 220-14-00 (44) 220-14-11
Peter Teluk
0/100
Cleveland, USA
20
130-580
Corporate, project finance, private equity, real estate, communications, transportation, energy, agribusiness
3M, ArcelorMittal, BP, Bunge, Columbia Capital, Czech Export Bank a.s., DuPont, Eaton Corp., The Boeing Company
English, Russian
Syutkin and Partners Firm of attorneys, (in Ukraine since 2006 ), www. lawyer.ua, www.syutkin-partners.com, office@syutkin-partners.com, 26/17 Lyuteranskaya Str., off.#30, Kyiv 01024, Ukraine (44) 253-32-21 (44 )353-00-19
Mykola Syutkin
WND
Kyiv, Ukraine
7
50-20 Euro
Corporate law, due diligence, commercial law, legal disputes, bankruptcy, tax, real estate, land law, M&A, audit
WND
Russian, English
VASIL KISIL & PARTNERS Law Firm, (in Ukraine since 1992), www.kisilandpartners.com, vkp@vkp.kiev.ua, Leonardo Business Centre, 17/52A Bohdana Khmelnitskogo Str., Kyiv 01030, Ukraine (44) 581-77-77 (44 )581-77-70
Oleg Makarov, Managing Partner
100/0
Kyiv, Ukraine
110
WND
Antitrust/competition, banking & finance, corporate/M&A, energy, IP, dispute resolution, international trade, labour & employment infrastructure, real estate, tax
Astellas Pharma, Bayer, BNP Paribas, CME, Du Pont, Eurosport, Gucci, LG, Nissan, Opel, Philips, Siemens, Shell, Volkswagen
English, German, French, Polish, Swedish, Spanish
Business Focus is the Kyiv Post’s spotlight on companies, industries and services in Ukraine. The stories on the news pages of Business Focus are written by Kyiv Post editorial staff members, but the lists of companies are paid advertisements. Listing is arranged in alphabetical order. For more information about publishing your company's information in our list, please contact the advertising department at advertising@kyivpost.com. Key to abbreviations: WND – would not disclose.
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14 Business/News Grain traders rack up losses as mysterious Khlib Investbud gets privileges Æ6 ure on Nibulon’s losses from not receiving export licenses in a second round of allocations (it received quotas the first time round), but said they were “very big.” Volodymyr Lapa, an agribusiness expert at the Ukrainian Agribusiness Club, said it looked “at least strange” that the No. 1 exporter didn’t get quotas, as it was obvious the company had sufficient grain to export. Vadatursky, whose company is regarded as a showcase of transparency, goes further, calling the government decisions illegal. To prove his case, he is taking the Economy Ministry and Agriculture Ministry to court. Vadatursky said he can’t understand why the government gave his company nothing, as a little-known partly-stateowned firm, Khlib Investbud, got the lion’s share of the quotas. “We have serious suspicions that this company didn’t even have the requisite stock of grain that was needed to receive the quotas,” Vadatursky said, He suggested the company had received political favors because of insider connections, saying it was “close to the highest authorities.” The agriculture minister has said he doesn’t know who the firm’s private owners are. Khlib Investbud has not responded to requests for comment, but has earlier said quotas were received fairly. The Agriculture Ministry has also said allocations were decided fairly. Lapa, the agribusiness expert, said Nibulon is a unique company in Ukraine thanks to its investment activity. “Nobody else launched such a large scope of investment in agrarian infrastructure,” he said. Vadatursky said Nibulon is now struggling to pay back loans taken to buy grain and to invest in the construction of grain silos and elevators. “We also have to pay for storage of the grain we planned to export,” he said, adding that this grain is now rotting in silos. As a result, Vadatursky said, the company has halted investment activity. But that’s not the end of the bad news for Nibulon. Vadatursky said the government is effectively “ignoring market players” by promoting two draft laws, both of which appear to be aimed at monopolizing the market into the hands of Khlib Investbud, while squeezing traders that have invested heavily into Ukraine’s agribusiness sector out of the market. The second bill, which is seen as having the best chance of being passed, proposes creating a privileged “state agent,” a company with a state share of minimum 25 percent. Nibulon’s owner hopes that criticism from international organizations or intervention by President Viktor Yanukovych could stop those bills and other pressure on the grain traders. “The president has to know about that,” Vadatursky said. “If we manage to reach him, then everything will be fine,” he added. Vadatursky warned that the problems with allocating grain quotas did not bode well for the sale of agricultural land, planned for two years’ time. “If we can’t achieve protection of the rights in this seemingly simple issue of grain export and distribution of quotas, it leads to serious doubts that such an important question as theopening of the farmland market will be decided in Ukraine in a civilized way,” he said. Kyiv Post staff writer Oksana Grytsenko can be reached at grytsenko@kyivpost.co
www.kyivpost.com
April 8, 2011
Despite hard times, Ukrainians want to stay put in Portugal Æ1 return to Ukraine, saying the situation hasn’t improved enough. Not even Portugal’s recent fiscal crisis appears to have changed many minds. Portugal was among the hardest hit in the European Union since the 2008 global economic crisis. Portugal’s budget deficit last year was 8.6 percent of gross domestic product. Unemployment is 11.1 percent, the highest in years. And on April 7, the nation asked for a $114 billion bailout from the EU -- equal to about half its annual gross domestic product. “The crisis is largely provoked by the lack of control over public expenditures that led to much of the overspending,” said Miguel St. Aubyn, a professor of economics at the Technical University of Lisbon. Fears that the situation will worsen escalated after the recent resignation of Prime Minister Jose Socrates. He failed to secure a key vote on austerity measures in parliament. As a result, snap parliamentary elections are scheduled for June. The EU hopes that elections will install a government that introduces austerity measures to help the nation out of its crisis, said Margarita Marques, head of the EU Commission’s representative office in Portugal. The odds are that the opposition Social Democrats will come to power after the elections. According Aubyn, even if the Social Democrats win the elections, the victory will not be overwhelming. “In such a case, the Socialist Party may bring people to street using its strong ties with unions,” Aubyn said. The crisis – and resulting attempts to cut government spending – are causing disruption. The subway in
Lisbon was closed several times over the last month by striking workers protesting cuts. Businesses complain about shrinking demand due to tax hikes and pay cuts introduced by the outgoing government. Portugal’s youth are particularly vulnerable, especially graduating students entering a bleak job market. Despite the hardships, social unrest is not visible on the streets, nor do many expect big street protests.
Ukraine’s iron curtain For many in the 53,000-member Ukrainian community in Portugal, the second-largest national minority in the country after Brazilians, the economic boom is largely over. Many are weighing whether to leave and where to go. However, many said they are reluctant to leave immigrant-friendly Portugal, even for the familiarity of Ukraine. Workers say wages are still higher on the tough Portuguese job market than back home in Ukraine. The Ukrainians also say Portuguese corruption is lower than in Ukraine, while respect for rule of law is much higher. Instead of being underpaid and treated as slave labor as often happens to blue-collar workers back at home, the Ukrainian community has won praise in Portugal. “Ukrainian workers learn the language fast. They are very disciplined and hardworking,” said Eduardo de Sousa Ferreira, a Portuguese immigration expert. Such ethics would make them among the last to lose their jobs, Ferreira added. But some are already out of work. Yaroslav Biletskyy, a Ukrainian who came to Portugal 11 years ago, said his contract ended and now he is again
Ihor Dudnyk from Vinnytsia came to Portugal with his family eight years ago and now enjoys working at a private farm there. (Yuriy Onyshkiv)
Ihor Hodovanets, a Ukrainian who works at one of Portugal's many wineries, would love to return to his homeland but says rampant corruption in Ukraine keeps him away. (Iryna Solomko)
job as a looking for a job locksmith. urrently In spite of ccurrently m ployed, being unemployed, or Biletskyy says that fo for eells the time being he fe feels on secure. He is now on usssocial security, and jjusyin ng ng tifiably so afterr pay paying gal o ver er taxes in Portugal over the last decade. ress ssees es Yet, he stresses im mes that the hard ttimes are being felt. aare re re “There bs. now fewer jobs. av ve Salaries have id. d. dropped,” he said. Ukrainians in Portugal who still have a job feell more or less socially secure, something their relatives ne can’t back in Ukraine boast of. obyk, a Halyna Bobyk, or sschool choo ch ooll oo Ukrainian junior teacher, moved to Portugal nine years ago with her husband. Now she works in Lisbon in a kindergarten and has a part-time job as a radio anchor doing a Ukrainianlanguage news program. She and her husband, a construction worker, are not willing to return to their homeland. “Our life is settled here,” she said. “If we move back to Ukraine, we’ll have to start from scratch.” Teachers in Ukraine earn so little, that they need to make ends meet by asking the parents of their students to make extra donations to support basic essentials for the school, as well as supplements to their tiny salaries. The average salary in Portugal is 600 euros in the countryside, and about 900 euros in the capital, Lisbon. Many Ukrainians living outside of bustling metropolitan Kyiv can only dream of earning such salaries in Ukraine. And the few that do earn this much do not have the comfort of earning the salaries legally, so they are constantly worried about the squeeze of tax inspectors. Moreover, they can’t count on a healthcare, pension and justice system that works. Ihor and Anna Dudnyk, a couple from Vinnytsia, came to Portugal eight years ago and are now happy on their corn farm. They also brought their two sons with them.
“My husband and I are getting around 700 and 500 euros respectively [per month],” said Anna Dudnyk. “This isn’t much, but considering the fact that we do not pay the rent aand the utilities, itt saves us a lot of m money.” ““We would return to Ukraine if we had a go o job there,” Anna good Du u Dudnyk said. F Ferreira said Uk k Ukrainians feel comfo o fortable on the Po o Portuguese job ma market and face no discr r discrimination. Thee Ukrainian populaTh tion on iin n Portugal includes ab bou o t 10 0 physicians. In about 100 comparison to the paltry salaries in Ukraine, said Dr. Olha Bayeva of Dnipropetrovsk, a doctor in Portugal starts with a monthly salary of 1,500 euros. “Doctors in Portugal can make even much more than that,” Bayeva added. However, other Ukrainians in Portugal say that the problem is not so much in Ukraine’s job market as in other inequalities back home. Ihor Hodovanets from Vinnytsia, who makes about 600 euros per month at one of Portugal’s many wineries, said – all things being equal – he’d prefer to go home. But conditions are not equal, he said. “We’d like to cultivate our own land, not someone else’s. But we fear corruption back at home,” Hodovanets said. Pavlo Sadokha, president of the Association of Ukrainians in Portugal, said that the economic situation has improved in Ukraine in the last decade, but not enough to return home. “Total lawlessness is the major reason that keeps Ukrainian immigrants from returning to Ukraine,” Sadokha said. “For every miserable certificate in Ukraine, you are forced to give a bribe.” Kyiv Post staff writer Yuriy Onyshkiv can be reached at onyshkiv@kyivpost. com. (Editor’s Note: The trip of the Kyiv Post journalist to Portugal was funded by the European Commission.)
www.kyivpost.com
News 15
April 8, 2011
Sources: American publisher sells leading Ukrainian media group to Poroshenko K Y I V P O S T S TA F F
Sources say that Ukrainian millionaire and former Foreign Minister Petro Poroshenko has purchased KP Media, a leading media group that publishes Korrespondent magazine and korrespondent.net. American Jed Sunden reached the deal to sell his majority stake in KP Media to Poroshenko, who owns a large share of Ukraine’s confectionary business and Channel 5 television station. Sunden was reportedly seeking a purchase price from $15 million to $18 million. Poroshenko’s emergence as KP Media’s new owner would be greeted as a positive sign for independent journalism, since Channel 5 has been seen as one of the last television stations to offer viewers relatively independent journalism in the nation. Increasingly, pressure is put on journalists to uncritically cover President Viktor Yanukovych’s administration. Sunden started in Ukrainian publishing with the founding of the Kyiv Post in 1995. He sold the newspaper, Ukraine’s first English-language newspaper, in 2009 to Mohammad Zahoor. Since then, the Kyiv Post has become one of Ukraine’s top news sources with the July launch of www.kyivpost.ua, a Ukrainian and Russian language version put out by the same editorial staff. The Kyiv Post broke the story on April 1 of KP Media’s sale. Poroshenko has thus far not confirmed or denied whether he bought KP Media. Sunden, who has been seek-
KP Media, publisher of Korrespondent magazine, is being purchased by Ukrainian Petro Poroshenko from American Jed Sunden. (Dima Burdiga)
Petro Poroshenko
ing to sell his company for awhile, has had little to say about the transaction. Sources told both the Kyiv Post and Ukrainska Pravda, another leading news source, that media magnate Boris Lozhkin – the majority owner of Ukrainian Media Holding -- could play a role in managing KP Media’s assets and could end up with an ownership stake as well. According to Ukrainska Pravda, Ukraine’s richest businessman Rinat Akhmetov had been in the bidding for KP Media. But Poroshenko emerged, according to Ukrainska Pravda, and convinced Sunden to sell to him instead in of to another owner who would only accelerate the concentration of media ownership in the nation. Akhmetov, a longtime backer of President Viktor Yanukovych, owns leading television
channels, newspapers and Internet portals. He and other Yanukovych backers have a dominant position on Ukraine’s media market, foremost the influential television market. Other top media owners are Viktor Pinchuk, the billionaire son-in-law of former President Leonid Kuchma; billionaire Igor Kolomoisky; and Security Service of Ukraine chief Valeriy Koroshkovsky. According to Ukrainska Pravda, Poroshenko told Sunden: “Jed, if you are selling, then sell to me, because we cannot allow concentration of media in the hands of one political team.� Ahead of the 2004 Orange Revolution, the revolt to overturn a presidential election rigged for Yanukovych, Poroshenko invested heavily into Channel 5 television chan-
Jed Sunden
nel. The journalists there stood out as among the few on television who reported about the revolution fairly. In a statement issued on April 5, Sunden did not clearly confirm or deny that a sale was in the works, but stressed that he will retain a top management role at KP Media and will continue preserving the editorial independence of the group’s publications. “The Ukrainian media market is difficult. In this context, I do not rule out nor have I ever the appearance of new partners in any of my businesses, including KP Media,� Sunden said. “But in any situation that may arise, my key condition will be to preserve the basic editorial principles and my continued role in the company as a top manager. Even if a new partner arrives, I will personally remain the guarantor of free
and independent journalism.� Using profits from the Kyiv Post, Sunden went heavily into the Internet news business in the early 2000s, starting BigMir.net and korrespondent.net. He later launched Korrespondent magazine in and free publications, such as the subway handout 15 Minutes. But Sunden and other media owners got hit hard by the 2008 global economic crisis, which saw advertising plummet. Consequently, Sunden in 2009 sold the Kyiv Post to Zahoor, a British national who was born in Pakistan. Zahoor owns the ISTIL Group. Sunden also was forced by the advertising downturn to sell or close other publications, including 15 Minutes, Pink magazine, Pani and Novynar. A minority stake in KP Media is owned by portfolio investors.
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16 News
www.kyivpost.com
April 8, 2011
Israel: Husband of Ukrainian woman masterminded Hamas rocket program STA F F A N D W I R E R EP ORT S
Israel raised the stakes in its battle with Hamas on April 4 by indicting a Palestinian engineer for allegedly masterminding the group’s rocket program and training fighters. Dirar Abu Sisi vanished from a sleeper train in Ukraine in February and mysteriously resurfaced days later in an Israeli prison, recalling the dramatic covert operations Israeli was once famous for. His abduction comes during an escalation in tensions between Israel and Hamas that many fear may rekindle full-scale fighting. The case of Abu Sisi has been veiled in secrecy since his family came forward last month saying he was snatched by Israeli operatives in Ukraine. Israeli authorities placed a gag order on the case, until the release of Monday’s indictment, though it still refuses to say how the 42-year-old Gazan was caught. The indictment accused Abu Sisi of masterminding the Islamic militant group’s missile program and charged him with hundreds of counts of attempted murder, conspiracy to commit murder and production of weapons. Abu Sisi denied all the charges. His Israeli lawyer, Tal Linoy, said the indictment is simply an attempt by Israeli government to disguise their embarrassment, as Abu Sisi’s kidnapping and subsequent detention turned out to be done by mistake. Linoy explained that originally Israeli secret services hoped that Abu Sisi had some information about Gilad Shalit,
an Israeli soldier captured by Hamas back in 2006, but the Palestinian engineer knew nothing about the case. “They needed to save their honor, as they simply messed up,” Linoy said. According to the indictment, around 1995 “Abu Sisi received his doctorate at the Kharkov Military Engineering Academy in Kharkiv, Ukraine, and studied under Prof. Konstantin Petrovich, an expert in Scud missile control systems. During his studies, Abu Sisi acquired extensive knowledge in missile development, control systems, propulsion and stabilization.” Valeriy Afanasenko, deputy rector at Kharkiv’s Air Force University, denies having Palestinian students at his university. Afanasenko also doubted that Scud missiles were ever taught at any of the Kharkiv-based military schools or academies. Contacted by the Kyiv Post, former officials of both Kharkiv-based academies teaching missiles specialists -- which in the early 90s existed in Kharkiv -- also denied having Scudrelated curriculum and students from Palestine. The indictment also described alleged meetings and conversations he held with Hamas operatives as far back as 2002. “Abu Sisi’s ongoing and significant activities in Hamas’ service over the past decade, with an emphasis on strengthening and improving the capabilities of Qassam rockets, allowed Hamas to create a growing threat to the Israeli home front, resulting in the death and wounding of many Israeli civilians,” it said.
Hamas has fired thousands of rockets into Israel over the years, steadily increasing the range of the weapons from just a few to almost two dozen miles. After the hearing, Smadar Ben-Natan, who also represented Abu Sisi, accused Israel of torturing her client and forcing him to sign Hebrew documents he did not understand. “We are going to ask to dismiss this indictment because of the abusive process that has been done to this person and the illegality of his detention,” she said. Israel launched a broad offensive in Gaza more than two years ago to halt persistent rocket fire, inflicting heavy losses on Hamas. While an informal ceasefire has been generally observed since then, violence has resumed in recent weeks with a cycle of rocket fire and Israeli reprisals. The Israeli military says Hamas has fully recovered from the 2009 offensive and upgraded its capabilities with longer-range rockets as well as antitank and anti-aircraft missiles. The April 4 indictment indicated that Israel believes Abu Sisi played a role in this recovery. Abu Sisi’s family says he has no connections to Hamas and that he was in Ukraine, his wife’s homeland, applying for residency. The indictment said he had received training on rocket technology at a military engineering academy in the former Soviet republic. Abu Sisi joined Hamas in 2002 and then after Israel’s three-week offensive against Hamas, was given the job of establishing a military academy to train Hamas’ officer corps, the indictment said. Using his skills as an engineer, the document claimed, he also developed propulsion and stabilization systems for rockets, developing a homegrown rocket that could fly up to 15 miles (22 kilometers) in 2007. During a brief courtroom appearance, Abu Sisi, a senior engineer at Gaza’s sole power plant, professed his innocence and accused Israel of trumping up charges against him in a futile attempt to gather information about Gilad Schalit. “I don’t have any connection with Schalit and the investigation proved
Palestinian relatives of Dirar Abu Sisi protest his jailing in Gaza city on March 22. (AP)
that,” he said. “When they found out I don’t have any connection to Schalit, they fabricated these charges.” Ukrainian law enforcement agencies have said they were not involved in the arrest and that foreign security agents are prohibited from operating on the Ukrainian territory. The Ukrainian Foreign Ministry has said it would demand an explanation from Israel. His family denied he belonged to Hamas or was a militant, calling the charges against Abu Sisi “groundless”. “They simply don’t know how to justify their lawless actions, their blatant capture of a person legally staying in Ukraine,” Abu Sisi’s Ukrainian wife, Veronika, told the Kyiv Post. “My husband never had any military training, or education… If he is a Palestinian you shouldn’t accuse him of all the sins
of mankind.” She explained that first Abu Sisi studied in Zaporizhia at local machine building institute, then went to study in the academy of utilities in Kharkiv, and finally got his degree in Kyiv Polytechnic Institute. In Gaza, Hamas spokesman Sami Abu Zuhri denied the engineer is a member. “He is a Palestinian citizen kidnapped in a criminal gang-style operation while he was visiting his family in Ukraine, and all the Israeli accusations are only to justify his abduction,” he said. Robbie Sabel, a former legal adviser to Israel’s Foreign Ministry, said that under international law, it is irrelevant how Abu Sisi was brought to Israel. “Once somebody is in the country, he is within jurisdiction,” he said.
Ukraine plays footsie with EU, Russia on key trade agreements Reuters – Top Ukrainian trade officials set out on April 5 competing visions for Ukraine, indicating the Kyiv leadership may be considering joining a customs union with Russia rather than a free trade zone with the European Union. The former Soviet republic and the EU are in talks on a free trade agreement which diplomats have said could be signed this year. But the sides have yet to agree on the most sensitive issues such as trade in agricultural goods. Russia, on the other hand, has repeatedly pressed Ukraine to join its customs union with Belarus and Kazakhstan which are also ex-Soviet states. “Ukraine’s membership in the customs union would rule out a free trade deal with any third party,” Deputy Economy Minister Valery Pyatnytsky, Ukraine’s top negotiator on the EU deal, told the official newspaper Uryadoviy
Kurier in an interview. “The customs union can make deals with third parties (as a whole) but its individual members cannot. So if we are joining the customs union we must stop the talks with the EU.” Ukraine’s main negotiator with the Russia-led bloc, government envoy Valery Muntyan, argued against promoting trade ties with the EU over those with Russia. In an interview with Kommersant Ukraina, a business daily, he said: “In 2010, EU member countries accounted for 29.6 percent of Ukraine’s foreign trade,” he said. “But trade with CIS nations accounted for an even larger portion, 40.2 percent.” “In my opinion, we must make a decision on joining the customs union in the first half of this year and this decision will be made by the country’s political leadership.” President Viktor Yanukovych, elected
just over a year ago, shifted Ukraine back towards Russia in several key areas of foreign policy while at the same time setting European integration as a priority. Muntyan said Kyiv had put forward several conditions for joining the Russian bloc which included a 50 percent cut in the price of Russian natural gas, a move that would cost Russia $4.5 billion a year. Ukraine, which depends heavily on Russian energy supplies, also wants Russia to drop export duties on oil and oil products worth $3.5 billion a year, he said. Asked if Russia had agreed to those terms, Muntyan said: “There is agreement in principle." The EU has offered Ukraine no oneoff bonus for signing a free trade deal. Senior Ukrainian officials including Yanukovych have expressed unhappiness with Brussels’ tough stance and the fact that the EU is not offering Ukraine the status of potential member.
www.kyivpost.com
News 17
April 8, 2011
Prosecutors: Voices of Kuchma, Greenpeace: Food tainted by radiation Lytvyn, Derkach are on tapes Æ1 magazine. Explaining why prosecutors decided to use the so-called Melnychenko recordings as evidence, Kuzmin said a series of expert studies confirmed that the voices on the recordings were that of the former top officials. “Higher quality studies were conducted in the fall of 2010. The conclusion of the additional studies was that the voices of individuals involved in the murder of Gongadze were fixed on the Melnychenko tapes, and they belong to Kuchma, [and former Interior Minister Yuriy] Kravchenko. We confirmed the absence of doctoring. For this reason, the tapes were added to the case against Kuchma,” he said. Kuchma, president from 1994 through 2005, has in recent weeks appeared routinely for interrogation at the prosecutor’s offices. Kravchenko died on March 4, 2005 from two gunshot wounds to the head, a death formally declared by authorities to be a suicide. In the interview, Kuzmin also confirmed that voices in discussions about Gongadze also belonged to current parliament speaker Lytvyn and retired SBU chief Derkach. Along with other officials, Derkach has been called in for questioning. But Lytvyn so far does not appear to have been questioned lately. Kuchma, Lytvyn and Derkach have long denied wrongdoing and involvement in the murder of Gongadze. Kuchma has even claimed that he was set up and his high-profile lawyer, Alan Dershowitz, claims that authorities will struggle to prove the authenticity of the recordings. In charging Kuchma, prosecutors appear to have used the recordings to
Volodymyr Lytvyn
corroborate testimony from a former senior police official who is currently awaiting trial. According to sources close to the investigation, former police general Oleksiy Pukach claims to have carried out the murder of Gongadze upon orders from superiors. In the Melnychenko recordings, Kuchma purportedly orders subordinates to “take care of” Gongadze in the context of a discussion about how to silence the journalist whose articles and comments had irritated high-ranking members of the Kuchma administration. This week’s announcement by Kuzmin corroborates Melnychenko’s claims. In a Kyiv Post interview last week, Melnychenko insisted that studies conducted as part of the prosecutorial investigation had upheld authenticity of a small portion, less than an hour, of his recordings, only excerpts pertaining to the Gongadze case. Now that a part of the recordings first made public weeks after
Gongadze’s disappearance have been authenticated, authorities should investigate other alleged crimes documented in “thousands of hours” of recordings allegedly made from 1998 through 2000, Melnychenko added. On April 6, opposition leader Yulia Tymoshenko added her voice to calls for a wider investigation into the tapes. Last week, Melnychenko said prosecutors had for the first time questioned him about other parts of his recordings in which other crimes are allegedly documented. “This will help cleanse Ukraine much the way lustration did in Poland and the Baltics after communism,” Melnychenko said. In the Focus interview, Kuzmin said that prosecutors are for now only using the tapes in the Gongadze case. But he did not rule out in the future investigating other crimes allegedly documented in the tapes. Melnychenko said even Viktor Yanukovych, Ukraine’s current president and a regional governor under Kuchma, is on the tapes. “The list goes on. There are criminal activities discussed,” Melnychenko said. Yanukovych has denied wrongdoing and claims to be fighting for justice. American Jaroslav Koshiw, author of a book about the Gongadze case, has studied the tapes for 10 years. “The voices of Kuchma and other top officials on the Melnychenko recordings are recognizable. Many discussions were about corrupt business dealings. What's needed now is proper testing and a grand jury-style investigation,” said Koshiw, who plans to publish a new book soon about the Gongadze case and Melnychenko tapes.
eaten by Ukrainians S TA FF A N D WI R E R E P OR TS
Greenpeace said on April 4 that hundreds of thousands of Ukrainians are still eating food contaminated by radiation from the Chornobyl nuclear power plant explosion 25 years after the blast. In a report, the environmental group said samples of milk, berries, potatoes and root vegetables in two Ukrainian regions show unacceptably high levels of the radioactive isotope cesium-137 from the 1986 blast. The regions are in northwestern Ukraine, outside the so-called “exclusion zone” around the plant, where residency is generally prohibited. Greenpeace researcher Iryna Labunska criticized the government for halting counter-radiation measures in the regions two years ago. Those measures included supplying uncontaminated hay for dairy cattle. According to the Health Ministry of Ukraine, the food is regularly checked for radioactive contaminations and the exceeding amounts are found in less than one percent of the cases. “Over a hundred of laboratories check food for radioactive isotopes, including cesium-137 and strontium-90. During 2010, Pubic Health and Safety Inspection conducted around 130,000 radiological sampling tests, of which 1,738 samples contained an exceeding amount of radioactive contamination. Most of the products were wild berries, mushrooms, medical herbs grown in areas contaminated by Chornobyl.” The Health Ministry also said
Æ Disaster at plant 25 years ago still affects food supply products are sampled randomly, and that "the most radiation-contaminated food is usually found in Volyn, Zhytomyr, Kyiv and Chernihiv regions.” A reactor at the plant exploded on April 26, 1986, spewing a cloud of radiation over much of the Northern Hemisphere. A zone of about 30-kilometer (19-mile) radius around the plant was declared uninhabitable. The samples cited by Greenpeace were taken in Rivne and Zhitomir oblasts, which were in the direct path of the radiation cloud. In one village in the Rivne region, milk samples showed radioactive contamination up to 16 times higher than the accepted norms, Greenpeace said. Mushroom and berry samples showed radiation levels four times as high as acceptable. The report said that although most of the milk is consumed in the region where it’s produced, the berries and mushrooms presented a wider danger because they could be sold at poorly supervised markets throughout the country.
18 Opinion
www.kyivpost.com
April 8, 2011
Riabchuk: What is aim of Kuchma charges? Æ4 Minister Mykola Azarov and Yanukovych. And, finally, Yanukovych apparently has created the precedent of prosecuting ex-presidents that may eventually be applied against him. So, if the trial does not serve Yanukovych’s interests, who is most likely to benefit? Andrij Zhalko-Tytarenko, former head of the Ukrainian Space, considers the entire “Melnychenko affair” a provocation of the Russian secret services to control Kuchma. Many experts have argued that Kuchma had no reason to kill Gongadze and that he was framed by powerful and influential enemies seeking to compromise him. The weak element in this theory is the involvement of leading police officers, including the late Interior Minister Yury Kravchenko, in Gongadze’s abduction and killing. Zhalko-Tytarenko hypothesizes that the current re-launch of the Gongadze case is part of the Russian domestic power game. According to his theory,
Russian President Dmitry Medvedev may be planning to run for a second term and needs to convince the twotime former president, Vladimir Putin, not to run. “If Kuchma will face murder charges, he will have no choice but to provide all the names that he certainly knows from Ukrainian secret service reports.” This may hold a grain of truth, provided that Melnychenko’s records contain unpleasant information about Putin known to the Security Service of Ukraine (SBU) about his connections with the notorious Semion Mogilevich. The Russian element in the story, however, is simpler and more traditional: The Kremlin people in Yanukovych’s team persuaded him to make one more self-defeating step. Taras Chornovil, Yanukovych’s former insider, defines these people as the “Moscow Quartet”: chief of staff Serhy Lyovochkin, SBU head Valery Khoroshkovsky, gas billionaire Dmytro Firtash, and Energy Minister Yuriy Boyko. Some are reportedly involved
in murky Russian gas deals controlled by Gazprom’s shadow owners, Putin and Mogilevich. The Kuchma trial will not end soon, but will probably be used to blackmail the entire elite, including Yanukovych himself. This might be part of the strategy of “directed chaos” that includes also the creation of fake “nationalist” and “extremist” groups, planting bombs and so forth. Back in 2004, Moscow “political technologists” tried to implement such a strategy in Ukraine to promote the candidacy of Kuchma for a third presidential term. The “directed chaos,” however, veered out of control and resulted in an authentic mass uprising, the Orange Revolution. Remarkably, one of the leading Moscow “technologists” of that time, Igor Shuvalov, serves as an adviser to Lyovochkin and to the leading TV channel Inter, owned by Khoroshkovsky. Besides the political goal of strengthening the authoritarian power of a rogue president dependent on
Moscow, the team may pursue a more practical goal: to eliminate as many players as possible from the forthcoming privatization of Ukraine’s last asset, its arable land. In a recent interview, Kravchuk, the nation’s first president, suggested: “the system has already gnawed away Yanukovych’s legs and is approaching his belly” so he must “either destroy the system or concentrate all power in his hands and become a totalitarian leader.” Totalitarianism, Kravchuk believes, is unlikely because Ukrainians would not accept it. He may be right, but the problem is that Yanukovych is listening not to Kravchuk, but rather to the Moscow Orchestra. Mykola Riabchuk is a Ukrainian author and journalist. This article is reprinted with the author’s permission. It originally appeared in Current Politics in Ukraine at http://ukraineanalysis.wordpress.com, Stasiuk Program for the Study of Contemporary Ukraine, Canadian Institute of Ukrainian Studies.
Gotev: Brussels takes note of officials’ spectacular wealth Æ5
Ecology Minister Mykola Zlochevsky appears to be an interesting case. He declared only 30,780 dollars of income in 2009. However, he also acknowledges ownership of a 1,000 square-meter house, a RollsRoyce and a Bentley. But this did not prevent him from taking $4,271 of financial assistance from the state. Several ministers, including Prime Minister Mykola Azarov, reportedly have considerable wealth registered with their sons or closer relatives. Often ministers have business interests in the same field as their official activities. Mykhailo Tabachnyk, brother of Education Minister Dmytro Tabachnyk, is reportedly one of the owners of the Intersport company, which owns the land earmarked for the construction of a sport complex needed for the 2012 football championships. According to sources, Intersport leases the land to the ministry, although the value of the lease has not been disclosed. Sonia Koshkina (which is her pen name; her real name is Ksenia Vasilenko) said that despite the complexity of their spheres of influence, the ministers seemingly manage to coexist and avoid conflicting with one another. Should arbitration be required then the arbiter is President Viktor Yanukovych, and not the prime minister, who has much less power, she explained. There are also important power players outside the government, Koshkina said, citing as an example the head of the country’s secret services, Valeriy Khoroshkovsky. He does not hide the fact that he is a millionaire and that he controls the TV channel with the nation’s biggest audience, she explained. Despite media revelations, conflicts of interest in Ukraine do not appear to bother anyone, Koshkina said. The Western audience present at the event seemed surprised both
Tax protesters hold placards showing Ukraine’s Prime Minister Mykola Azarov and other ministers shout slogans during a rally in front of Ukraine’s parliament in Kyiv on Nov. 18. (AFP)
by the revelations and the fact that Ukrainian diplomats present in no way attempted to counter or challenge the facts presented.
Leaders' response After the event, EurActiv asked a Kyiv official to comment on alleged plutocracy in Ukraine. At his insistence that his name should not be made public, the official said: “The [ministers’] wealth is common knowledge, especially for readers in Ukraine. Another question is whether this fact somehow influences the reforms the government has launched.
It is true that there is general public discontent with high prices and inflation, which many associate with the new government, but it is also true that these can be direct consequences of the deep crisis Ukraine faced in 2009, and it would be strange to expect an economic boom. The reforms were needed, and the biggest part of Ukraine’s population agrees with this. Another question is how deep and comprehensive will they be. This is an open question for the moment. Per se, and especially in the postcrisis situation, I don’t think that the oligarchs ruling is something bad for Ukraine. The real problem is that we don’t have a strong and united opposi-
tion which would propose programs, ideas etc. Everyone, [former Prime Minister Yulia] Tymoshenko, [former presidential candidate Arseniy] Yatseniuk, etc. claim themselves to be opposition leaders, but so far [they have made] no proposals, just struggles for future election dividends. Somehow it resembles the Italian situation.” Georgi Gotev is senior editor at EurActiv, a Belgian foundation and publication which aims to identify sources of information and intelligence on European Union policies and their impact. This article was originally published by the group’s website, www. Euractiv.com.
Stratfor: Russia has edge over EU in tug of war Æ5 goods are simply much more competitive (and necessary) in the Russian market than they are in the EU market. But perhaps the biggest obstacle to an EU-Ukraine free trade agreement is Russia. Putin has said that if Ukraine were to sign such an agreement with the bloc, Russia would be forced to enact higher duties for Russian goods imported by Ukraine. Because trade with members of the Commonwealth of Independent States (of which Russia is Ukraine’s dominant trade partner) accounts for more than 40 percent of Ukraine’s trade — as opposed to trade with EU states, which accounts for less than 30 percent — this would affect the Ukrainian economy considerably. Certain Ukrainian officials have acknowledged that such an outcome could slow Ukraine’s GDP growth.
Russians state their case This sets the stage for Ukraine’s upcoming talks with Russia. While there are a number of items on the agenda, there are reports that Putin will attempt to persuade Ukraine to join the Customs Union with Russia and Kazakhstan rather than establish a free trade deal with the European Union. Despite its rhetoric, Russia is not as interested in Ukraine’s accession to the Customs Union as it is in deterring further Ukrainian integration into Europe. According to STRATFOR sources, Putin will, to this end, offer Ukraine a compensation package — a package that will include more than just financial incentives — and remind Ukraine of the consequences involved in going with the Europeans. It remains unclear what exactly Putin’s incentives will entail, but one key area that has served as a source of friction between Russia and the European Union is Ukraine’s natural gas sector. Contention over the sector has increased as Ukraine began looking to modernize its natural gas transit system — it is considering selling a stake in its indebted state energy firm Naftogaz. While Russia has proposed a merger between Gazprom and Naftogaz, Ukraine has resisted, knowing that it would essentially be a Russian takeover. Instead, Kyiv has advocated a natural gas consortium comprising Russia, Ukraine and the European Union. Ukraine continues to push for such an arrangement, with Ukrainian Prime Minister Mykola Azarov stating April 6 that the European Union should pay for half of Ukraine’s natural gas modernization efforts. However, Russia holds a dominant position in any such talks, as it is the natural gas provider and is able to halt supplies any time it sees fit — something Moscow has not hesitated to do in the past. Since Ukraine will always be caught between the two sides, Kyiv will continue its “multi-vector” diplomacy by playing the West and Russia against each other to gain as many concessions as it can. However, Russia is currently in a strong geopolitical position, while the Europeans are distracted and divided over the Libyan crisis and their own financial problems. Russia has the advantage, and this could enable Moscow to make headway on building economic and energy ties with Kyiv while trying to make sure to exclude the European Union.
Lifestyle
Why billionaires love to buy soccer teams. See Andrei Liakhov's column on page 26.
April 8, 2011
Play | Food | Entertainment | Sports | Culture | Music | Movies | Art | Community Events
Æ26 www.kyivpost.com
Book w Review A WITH ELENA ZAGREBINA M ZAGREBINA@KYIVPOST.COM
Politicians who want to be your friend Clockwise, from above left, politicians Yulia Tymoshenko, Borys Kolesnikov, Arseniy Yatsenyuk and Viktor Yushchenko discover the joys of Facebook. (Yaroslav Debelyi)
BY I R I N A S A N D U L
With Ukraine experiencing a boom in social networks, local politicians are racing with one another in opening accounts on fashionable Facebook and Twitter. The list of those who already have profiles or fan pages, run by them or by their press spokespeople, is long. Among them are President Victor Yanukovych (his profile is run by his press service), former Verkhovna Rada speaker Arseniy Yatsenyuk (posts himself), former Prime Minister Yulia Tymoshenko (her Facebook account is run by her press people, but she tweets herself) and Deputy Prime Minister Boris Kolesnykov (also run by his press-service). Some politicians are skillful in using Internet to instantly spread their message – and even make news. Parliamentarian Vladimir Aryev, in
ÆPensioners are most likely to vote but least likely to use Facebook and Twitter, cutting politicians’ interest in Internet particular, managed to fuel a national scandal through his Facebook page. In February, while on a business trip to America, someone cast a vote instead of him in parliament. On his Facebook profile, he displayed a picture showing that the voting card was in his possession. Many politicians, however, still don’t know what to do with social media. Their messages posted or sent are dry, or their profiles contain little personal data. In one of his March posts on Facebook Oleksander Turchynov, Tymoshenko’s
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former first vice prime minister, was annoyed with cabbage costing more than bananas. “What else do we need to prove that Ukraine is quickly turning into a banana republic?” he asks. According to Ukraine’s political advisers, the most successful politicians on the Internet are Yatsenyuk and Tymoshenko. They maintain their profiles themselves. They are exceptions. Most often it’s not the politicians themselves, but rather their spokespeople, who take the time to post messages and update the sites.
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Yatsenyuk attracts Facebook users by getting personal sometimes. He has recently complained that one of his daughters is suffering a lot from the absence of buckwheat in shops. Prices on buckwheat, one of the nation’s most popular staples, have skyrocketed. Tymoshenko, too, told her fans what she gave to her friend Sasha as a birthday present. Sasha appeared to be Turchynov and the present --“an action plan in extreme situations.” Opposition politicians explain why they have started using social networks actively. “This is a chance to explain one’s views at the times when opposition’s statements are totally blocked by the media,” said Turchynov, who maintains personally accounts on Facebook and Twitter. However, despite the progress that some politicians are making on social networks, “technically none of Ukraine’s politicians has mas- Æ22
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Sara Gruen’s ue historical novel gives readers inside peak at circus If someone would have asked people in 1930s America to describe the traveling circus, they would tell you about tents, magical music and laughing children whose hands are sticky with cotton candy. Author Sara Gruen, in her historical novel “Water For Elephants,” takes the reader to the circus backstage to reveal the unbelievable secrets of the traveling circus. You only need to look attentively to see that dirt and poverty hide behind all these happy faces and bright costumes. Anger and betrayal also lurk. It follow that all the shocking and breathtaking tricks and stunts contain elements of illusion – lies to extract gold coins from your pockets. “Water For Elephants” was published in 2006, landing on The New York Times bestseller for 12 weeks. The screen version of the story will be released worldwide in late April, with Twilight movie star Robert Pattinson and Oscarwinning Reese Witherspoon. Ukrainian moviegoers can expect to see it in May, giving people enough time to read the book. The plot involves Jacob Jankowski, a young Polish man, who dreams of becoming a veterinarian like his father. When Jankowski was told that his parents died in an accident, he runs away right after graduating from a prestigious university. Left with nothing after paying all his father’s debts, he takes off with no particular destination in mind. Sleeping in a train, he knows nothing about the traveling circus that is traveling with him. Thanks to kind-hearted circus worker Camel, Jankowski stays with the circus and becomes a veterinarian for circus animals. He becomes a part of the huge and massive machine – the Benzini Brothers’ Most Spectacular Show On Earth. He meets August, the head trainer, who seems nice, generous and charming at first; Marlena, his wife – tiny and soft, though strong enough to tame even the wildest horse; Kinko the clown and his dog Quinnie. And, of course, he meets huge but beautiful elephant Rosie. Regardless of the book’s name, it is the story of only one elephant, but one who makes the reader laugh or cry throughout the pages. “Water For Elephants” is full of funny and tragic situations. It bursts with juicy details so real that you can almost touch, smell and see them. The book is so alive that you start living it. Just a second ago you were sitting in the cozy chair and now you are standing right in the middle of the dusty square, hearing Uncle Al, the circus owner, who Æ26
20 Entertainment Guide
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April 8, 2011
Until Thursday, April 28
(fanpop.com)
(Courtesy)
Wednesday, April 13
If you couldn’t get that song “Apologize” out of your head in 2007, the guys from the rock band OneRepublic are to blame. Back then the single was one of the biggest radio airplay hits in history and was downloaded about 10 million times. This is how the band started getting more and more attention, to later play on such major events as the opening of the Olympics in Vancouver in 2010. The front man of the band Ryan Tedder, 31, seems to know the secret for writing record-breaking songs. He has received eight Grammy nominations as well as writing for and working with such artists as Beyonce, Leona Lewis and Rihanna. Wednesday, Apr. 13, 9 p.m., Crystall Hall, 1 Dniprovsky Uzviz, 288-5069. Tickets: Hr 550-3200.
(ga-photos.com)
New York jazz funk
Monday, April 11
The concept of space, seemingly a prerogative of scientists, has occupied the minds of artists as well. The exhibition Kosmichna Odisseya, or Cosmic Odyssey, is an examination by more than 130 Ukrainian and foreign artists of the notion of space through human creativity. The exhibition blends science and art both conceptually and physically – expect to see real rocket parts and equipment alongside paintings, sculptures and video installations. Artists, including Pole Pawel Althamer, British duo Semiconductor and others, also show the ugly side of the space exploration – one of the exhibits is a video of litter from spaceships floating around the earth. Until Thursday, Apr. 28, Mystetsky Arsenal, 12 Lavrska St. Opening hours: 11 a.m.- 8 p.m. Tickets: Hr 20-40.
Sunday, April 10
(Courtesy)
OneRepublic
Cosmic modern art arrives
Drifting between hip hop and traditional music, American guitarist Will Bernard has now fallen in love with jazz. But it isn’t just any old jazz – the Grammy-nominated artist has pulled together a drummer and an organist to create a funk jazz trio. His fellow member Wil Blades, an organist, is also worth paying attention to, as some specialized jazz publications refer to him as one of the most promising young organists around. The band usually roams around New York, playing in the local clubs, but every now and then they go and throw gigs around the world. So if you are up for an unexpected sort of jazz, with New York flavor and a touch soul of the 60s, all performed with an unusual set of instruments by professionals who get the beats right, this concert is for you. Monday, April 11, 8 p.m,, Budynok Khudozhnyka, 1-5 Artema St., Lvivska Square, (095) 111-5577. Tickets: Hr 80-220.
(tangoformacion.ru)
Best classical picks
Saturday, Apr. 9 – guitar player Yevhen Sedko will play classical and flamenco music pieces at 7 p.m., Budynok Aktora, 7 Yaroslaviv Val St., 235-2081, www.actorhall.com.ua. Tickets: Hr 30-50. Saturday, Apr. 9 – concert of flamenco dance and music at 7 p.m., Les Kurbas center, 23A Volodymyrska St., 279-5069. Tickets: Hr 50. Sunday, Apr. 10 – concert of music by French composer Youli Galperine as part of the French Spring festival at 7 p.m., National Philharmonic, 2 Volodymyrsky uzviz, 278-1697, www.filarmonia.com.ua. Tickets: Hr 30-80. Wednesday, Apr. 13 – concert of Argentinean tango dancers Sebastian Arce and Mariana Montes at 7 p.m., Budynok Ofitseriv, 30/1 Hrushevskoho, (097) 746-7613. Tickets: Hr 100-500. Thurday, Apr. 14 – Austrian cellist Florian Kitt and pianist Aima Maria Labra Makk will play pieces by Schuman, Koglmann, Liszt and others at 7 p.m., National Philharmonic, 2 Volodymyrsky uzviz, 278-1697, www.filarmonia.com.ua. Tickets: Hr 15-65. Thursday, Apr. 14 – Night of Sergei Rakhmaninov music at 7:30 p.m., the House of Organ Music, 77 Velyka Vasylkivska St., 5283186, www.organhall.kiev.ua. Tickets: Hr 20-50.
Compiled by Nataliya Horban
Balalaika hero The Balailaika is a traditional Russian instrument with a triangular body and only three strings, with the two lowest ones tuned to the same pitch. The common belief is that it works only for playing easy tunes, but 43-year-old Aleksei Arkhipovsky is living proof that this isn’t the case. Arguably one of the best balalaika players in the world, he performed during the opening ceremony of the Eurovision 2009 song contest in Moscow and cruised around the world with his concerts. He doesn’t limit his style to only folk music and actively plays jazz or even pop music – for example, the Mission Impossible theme tune. Sunday, Apr. 10, 6 p.m., Kyiv Operetta Theater, 53/3 Velyka Vasylkivska St. Tickets: Hr 100450.
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April 8, 2011
Movies
Entertainment Guide 21 Live Music ART CLUB 44 44B Khreshchatyk St., 279-4137, www.club44.com.ua Concerts traditionally start at 8 – 10 p.m. April 8 Carte Blanche, Hr 50 April 9 Bangladesh Orchestra, Hr 50 April 10 Soiuz 44 Jam Session, free admission April 11 JT Fresh, free admission April 12 Spring Jazz Night: Open Mic, Hr 40 April 13 Indi.a, Hr 60 April 14 Sunsay, Hr 100
Paper Castles is showing in Kyiv cinema until April 14.
IN FOCUS: BEST OF ROSCHDY ZEM A French actor of Moroccan descent, Roschdy Zem discovered theatre at the age of 20. In 1987, he made a d?but in cinema in “Lady Cops� directed by Josiane Balasko. He plays both in art house and mainstream cinema. He appeared in Days of Glory (2006), nominated in the Academy Awards as the Best Foreign Language Film. The same year, he started working as a director on his first feature movie “Bad Faith.� Last year, he started work on “Omar Will Kill Me.� “Days of Glory� depicts World War II through the eyes of four French soldiers placed in England in 1943. Samuel must find the woman he loves, after she is being kidnapped right from their home in the middle of the night in “Point Blank.� Marek, a crime squad officer, wants to get revenge after the death of his partner and best friend, who was killed by drug traffickers. He goes undercover to infiltrate a drug gang that imports hashish from Morocco to Spain in “Go Fast.� All films are screened in French with Ukrainian subtitles. PAPER CASTLES Language: Spanish with Ukrainian subtitles Drama. Spain (2009) Directed by Salvador Garc?a Ruiz Starring Adriana Ugarte, Biel Dur?n and Nilo Mur Maria Jose, a student at the Academy of Fine Arts, notices that her classmate Marcos enthusiastically paints a portrait of her. Left alone, Maria Jose and Marcos feel attracted to each other, but suddenly Jaime, best friend of Marcus, enters the
room. Thus begins the love story of three young artists. This romantic relationship leads to a surprising interweaving of emotions, passions and desires. THE EXECUTIONER Drama/Comedy. Spain (1963) Directed by Luis Garc?a Berlanga Starring Nino Manfredi, Emma Penella and Jos? Isbert The coffin maker Jose Luis marries the executioner’s daughter and should inherit his father-in-law’s job, as the latter is retiring. There’s got to be an executioner in the family for them to get an apartment they’ve been waiting for a long time. Jose Luis agrees to take the position, but “technically� - as soon as he gets the task to execute someone, he immediately resigns. But his family pressures him and he can’t quit because of the red tape – so, protesting and wobbly with fear he is literally dragged to “work.� SHADOWS IN THE SUN Language: English with English subtitles Drama. UK (2009) Directed by David Rocksavage A family story set at the end of 1960s on Norfolk coast. Hannah, played by Jen Simmons, lives alone on the Norfolk coast. She befriends a young lover Joe, who supplies her with cannabis to ease her pain. Though, when her son Robert comes with his family to visit Hannah, he strictly disapproves. After series of squabble and misunderstandings they finally manage to rediscover their roots and deep affection for one another.
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SHORTS ATTACK FESTIVAL If you think that love is pain, welcome to the club. Festival “Love is a Catastrophe� presents a selection of short films from all over the world. In surreal and sometimes odd onscreen stories an alien comes to Earth and finds love, while a scuba diver falls for a fish. A grandmother fights for her beloved car. Two people in love survive the end of the world. An Italian aristocrat loses her dear cat in the airport. A woman struggles with jealousy. And someone gets lost in the fields. All shorts are shown in original languages with Ukrainian subtitles.
KYIV CINEMA 19 Velyka Vasylkivska St., 234-7301. Paper Castles: Apr. 8-14 at 7:40 p.m. and 9:30 p.m. MASTERCLASS CINEMA CLUB 34 Mazepy St., 594-1063. TheExecutioner: Apr. 12 at 7 p.m. The Shadows in The Sun: Apr. 14 at 7 p.m. ZHOVTEN 26 Kostyantynivska St., 205-5951. Shorts Attack! Apr. 8 at 8:10 p.m. Apr. 9, 10 at 11:50 a.m., 4:25 p.m. and 8:10 p.m. Apr. 11 at 1:20 p.m. and 8:10 p.m. In Focus: Best Of Roschdy Zem Days of Glory: Apr. 8 at 7:10 p.m. Point Blanc: Apr. 9 at 5:50 p.m. Go Fast: Apr. 10 at 5:45 p.m.
DOCKER’S ABC 15 Khreshchatyk St., 278-1717, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m. April 8 Motor’ Rolla, Bangladesh Orchestra, Hr 70 April 9 Mad Heads XL, Partizanskie Vytivky, Hr 70 April 10 Foxtrot Music Band, free admission April 11 Gera and Second Breath, free admission April 12 More Huana, Hr 20 April 13 The Magma, Hr 30 April 14 Tex-Mex Company, Hr 30 DOCKER PUB 25 Bohatyrska St., metro Heroyiv Dnipra, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m. April 8 Mandry, Red Rocks, Hr 70 April 9 Ot Vinta, More Huana, Hr 70 April 10 Yevgeniy Margulis (Russia), Vostochny Express April 11 Lemmons, free admission April 12 Tres Deseos Latino party, free admission April 13 Rockin’ Wolves, free admission April 14 Partizanskie Vytivky, free admission BOCHKA PYVNA ON KHMELNYTSKOHO 4B-1 Khmelnytskoho St, metro Teatralna, 390-6106, www.bochka.com.ua Concerts traditionally start at 9-10 p.m. April 8 Hot Guys, Tres Deseos April 9 Lucky Band, Foxtrot Music Band April 10 Techenie, Hr 30 PORTER PUB 3 Sichnevogo Povstannya St., 280-1996, www.porter.com.ua Concerts traditionally start at 7:30 p.m. April 8 Riders
Sunsay. (Yaroslav Debelyi)
April 9 Pozitiv Band April 10 Dandy April 13 Ivan Bliuz April 14 Horoshiy, Plohoy, Zloy JAZZ DO IT 76A Velyka Vasylkivska St., 289-56-06, http://jazz-doit.com.ua Concerts traditionally start at 8:30 p.m. April 8 Jazz Inside April 9 Majestic Duo April 10 Elena Nikolskaya April 13 Dmitriy Garkavenko Other live music clubs: GOLDEN GATE IRISH PUB, 15, Zolotovoritska St., 235-5188, http:// goldengatepubkiev.com/ TO DUBLIN IRISH PUB, 4 Raisy Okipnoi St., 569-5531, http://www.to-dublin.com. ua/ PIVNA NO.1 ON BASEYNA, 15 Baseyna St., 287-44-34, www.pivna1.com.ua DRAFT 1/2 Khoryva St., metro Kontraktova Ploshcha, 463-7330 KHLIB CLUB 12 Frunze St., www.myspace. com/xlibclub CHESHIRE CAT 9 Sklyarenko St., 428-2717 O’BRIEN’S 17A Mykhaylivska St., 279-1584 DAKOTA 14G Heroyiv Stalinhrada St., 468-7410 U KRUZHKI 12/37 Dekabrystiv St., 5626262.
Compiled by Alexandra Romanovskaya and Svitlana Kolesnykova
22 Lifestyle
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April 8, 2011
Facebook, Twitter gaining favor among politicians Æ19 tered social media's potential for political purposes,” said political consultant Taras Berezovets. Tymoshenko’s profile on Facebook, as opposed to the one on Twitter, mainly promotes her videos and lists her favorite patriotic songs and singers. Kolesnikov’s account includes a list of his favorite movies, including “Moscow Doesn’t Believe In Tears,” “The Godfather” and “The Omen.” It also does not contain any fresh posts made by him. “Any politician in Ukraine gets a smack in the mouth from his opponents as soon as he says a word,” said media manager Vladimir Petrov, who used to work for Yatsenyuk’s press ser-
ÆAs Facebook and Twitter gain in popularity among Ukrainians, politicians are launching fan pages, profiles vice, explaining why Ukraine’s politicians are still reluctant to open up and take part personally in online political debates. The hesitation is why Petrov continues being a ghostwriter for many politicians. However, Yatsenyuk and Tymoshenko now say they do their own posts and
Facebook use is growing in Ukraine, with more than 1.4 million regular users 1 500 000 1 400 000 1 300 000 1 200 000 1 100 000
Top five countries using Facebook social network
1 000 000 900 000 800 000 700 000 600 000 500 000 Dec. 2010 Source: www.socialbakers.com
blogs after their press services made some well-publicized mistakes. In the first message of one of her blogs, Tymoshenko congratulated Ukrainians on the post office holiday. “This day I would like all of us to remember how excited we used to be when we found a colorful card in our mail box,” Tymoshenko supposedly wrote in one blog. “How, when children, we used to fight with brothers and sisters over who opens an envelope first.” However, as Ukrainska Pravda journalist Serhiy Leschenko noted: “Tymoshenko doesn’t have any brothers or sisters. One goof by a Yatsenyuk PR specialist was much worse. One of his employ-
Feb. 2011
Rank
Country
Users
1
United States
155,177,200
2
Indonesia
34,897,200
3
United Kingdom
30,297,480
4
Turkey
27,519,220
5
India
23,073,400
User age distribution on Facebook in Ukraine 3 15 13-15 4%
16-17 5%
18-24 45%
65+ 1% 55-64 1% 45-54 3% 35-44 8%
Source: www.socialbakers.com .socialbakers.com
ees forgot to log off after he had posted a message ghostwritten for Yatsenyuk and sent the following message under the politician’s name to one user: “All in all, I come up to your mother and take a leak into her mouth.” Yatsenyuk told the Kyiv Post that the incident taught him that “it’s important to blog yourself so accidents don’t happen.” Political analyst Denis Bogush said that Ukraine’s politicians are not going to be able to find most of their poten-
25-34 33% tial voters online – yet. According to a survey conducted by TNS Ukraine last year, only 18 percent of people from 12 to 65 in bigger cities (more than 50,000 people) use the Internet daily. “During election campaigns politicians target pensioners,” Bogush said, noting that older people are more reliable voters but also less likely to use Facebook or Twitter. Kyiv Post staff writer Irina Sandul can be reached at sandul@kyivpost.com
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Lifestyle 23
April 8, 2011
Lee Roberts (R) with his colleagues taking part in the walk. (Yaroslav Debelyi)
A Chornobyl walk for charity on April 22 BY N ATA L I YA H OR B AN HORBAN@KYIVPOST.COM
The Chornobyl power plant, site of the world’s worst nuclear disaster, is just a day’s walk from Kyiv. Soon workers from the British and French embassies will cover the 110 kilometers from Kyiv to Chornobyl by foot to raise awareness and money to support those who suffered from the April 26, 1986 disaster. “By walking it in one day you show how close Chornobyl is to a major city of Kyiv, which I don’t think many people realize,” said Lee Roberts, a British Embassy worker. Roberts came up with the idea for a charity walk last winter while visiting Chornobyl and Prypyat, the ghost town in the 30 kilometer exclusion zone that surrounds the plant. “Imagine if the wind was blowing south on that fateful day. [Kyiv] could potentially have been Prypyat, but on a larger scale,” Roberts said. During the first days after the reactor’s explosion, the wind headed north and west, which many believe helped Kyiv escape a much-worse fate. The anniversary of the tragedy brings up the story of the Chornobyl catastrophe every year in late April. But this March, the world was once again vividly reminded of the nuclear power danger when a Japanese plant
was damaged by an earthquake and tsunami. Eight charity volunteers will depart from Mykhailivska Square late afternoon on April 22, aiming to arrive at Chornobyl the following day at approximately the same time. Covering 110 kilometers in 24 hours is possible at a pace of five kilometers per hour. To prepare the body for the physical challenge, the participants have been training on their own since January but recently the group went through their first fitness test on a 21-kilometer training walk, “to give us an idea of what our shoes and gear are like,” Roberts said. Some of the volunteers have military experience and still remember walking up to 60 kilometers during training. “We also had times when we haven’t slept for a long period of time,” said Kirsty Baxter, assistant military attache at the British Embassy. “So we are hoping our bodies remember that, even though we’re much older than we were.” They hope their efforts will pay off. “When you are trying to attract sponsorship, it has to be something spectacular,” Roberts said. An ex-military worker, he chose two charities dear to his heart. One of them is the Children of Chornobyl Relief and Development Fund, which was founded in 1989 after the nuclear disaster. It aims to help children by pro-
viding medical equipment to hospitals in Ukraine. All the proceeds from the Charity Walk will be split equally with another organization, Blesma, a charity in the U.K. that supports British military veterans who lost limbs during service. Each walker will pack their own snacks, such as chocolate, sandwiches and pasta, which they will try to consume without stopping walking. “By the end of the training walk it became very clear to us that once we stopped, we could already feel our legs turning to lead – it became harder to keep going,” Roberts said. A good physical shape is not all it takes, though. The mental challenge of keeping up despite the lack of sleep and sore muscles is more of an obstacle. The volunteers have come up with ideas to trick their minds. “Personally my way is breaking [the distance] down. It is only two kilometers from my apartment to work, so I just have to do 55 of those,” says Roberts. For safety, the volunteers will be escorted by a British Embassy vehicle as well as a traffic police car that will be provided by the Interior Ministry throughout the whole journey. To learn more about the project or to donate money, visit the link http:// w w w.firstgiving.com/fundraiser/ chornobylcharitywalk/ccrdf Kyiv Post staff writer Nataliya Horban can be reached at horban@kyivpost.com
Kyivans ‘bury’ rule of Chernovetsky A protest took place on April 6 against Kyiv Mayor Leonid Chernovetsky, implicated recently in a major corruption scandal even by Ukrainian standards. A group installed two voting boxes (top) next to the General Prosecutor’s Office and asked Kyivans to vote for criminal prosecution of the mayor. Activists also held a mock burial ceremony, serving alcohol and snacks on a coffin (bottom) to symbolize the end of Chernovetsky’s rule in the capital. In an address to the Kyiv city council on March 31, Kyiv city administration chief Oleksandr Popov said that fraud and embezzlement under Chernovetsky’s reign cost the city almost $9 billion in losses. Popov said the alleged crimes mostly involved sales of land and property at knock-down prices to insiders in non-transparent deals. With backing from President Viktor Yanukovych, Popov ousted Chernovetsky as head of the city administration last year. (Photo Andriy Kravchenko).
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Some 4,000 people came for the celebration.
The church cates heavily to
Embassy of God celebrates 17 years in Kyiv religious life BY K AT E RY N A PA N OVA PANOVA@KYIVPOST.COM
The Embassy of God church celebrated its 17th anniversary from March 31 to April 3 in a huge white tent that served as a temple on the outskirts of Kyiv. Although the event was attended by 4,000 people, the church’s top celebrity member, Kyiv Mayor Leonid Chernovetsky, was not there. However, his mother-in-law and other relatives were at the event. Church members were charged an Hr 25 daily entrance fee. The event included singing, dancing, services and praying. The church claims to teach 32,000 kids in Ukraine, and had special programs devoted to the young ones. “Before, I was a threat to children. I was manufacturing and selling drugs and
all of them were my potential clients,” one preacher said. “I am so happy that I am healed and am now serving God.” The church is widely known for its success in helping drug addicts and alcoholics. Members are against alcohol, smoking and premarital sex. People are also expected to tithe – to give 10 percent of their income for church needs – the collection boxes were frequently passed around. The Embassy of God is also active in local communities. Several speakers mentioned that the church is succeeding in getting into every community council possible to influence social policies. The church is not without controversies. Pastor Sunday Adelaja, the charismatic leader, is facing accusations of financial impropriety involving the fraudulent
King’s Capital Trust, an investment company under investigation for defrauding clients of $180 million. He has never been charged and says he also was a victim of the scheme. Adelaja was, nevertheless, vocal in his speeches about the need to love your enemies and bring light to people. He also provided fluent translation into Russian for Apostle Ulysses Tuff, one of the Church’s founders, who came from the United States. Although such a title may be surprising for Orthodox Christians, the Embassy of God embraces the designation. Kyiv Post staff writer Kateryna Panova can be reached at panova@kyivpost.com. Photos by Kyiv Post photographer Joseph Sywenkyj.
Many souls proclaimed “hallelujah” and prayed.
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Kids bring Dickens to Kyiv in English show
More than 30 people take part in show.
The main actor Smike (Andrew Spencer) during the show.
Mr. Squeers and his daughter Fanny (C) are tied up. The Children’s Theater Company, part of the British International School in Kyiv, staged the musical “Smike,” based on Charles Dickens’ novel “Nicholas Nickelby,” on April 5. More than 30 children from the school performed in the musical, directed by Canadian Adam Ferguson. The theater company is the only English-language theater in Kyiv. The performance of “Smike” followed on from last year‘s success with the musical “Oliver!” based on another Dickens classic – “Oliver Twist.” The story of “Smike” follows schoolchildren transported back into 19th century England where school life is very tough. (Alex Furman)
All actors in the musical were from The British International School
Sunday Adelaja, founder and senior pastor of the Embassy of God
www.kyivpost.com
Lifestyle 25
April 8, 2011
As world celebrates Gagarin, Korolyov’s role is remembered O LG A P YS A N A
Fifty years ago on April 12, Yuriy Gagarin became the first astronaut to orbit the earth, an achievement that the world still celebrates. But the historic flight may have never happened without such lesser-known heroes as Sergey Korolyov. Korolyov, a Ukrainian aerospace engineer, designed the Vostok 1 space rocket that took Gagarin into the heavens. The Ukrainian’s role was a Soviet secret. Only after his death in 1966 did Korolyov star getting public recognition as the chief genius behind Soviet successes in space. Korolyov was buried in the Kremlin Wall, the ultimate place of honor in the Soviet era. Korolyov was born in the Ukrainian city of Zhytomyr in 1907. He was educated in Odessa Building Trades School, Kiev Polytechnic University and later Moscow Higher Technical School. Persecuted during Stalin’s ruthlessness in 1930s, Korolyov was accused of anti-Soviet activities and proclaimed an “enemy of the people” in 1938. He spent six years in prison and several months in one of the most feared Soviet correctional institutions, the gulag in the Siberian region of Kolyma. Overall, Korolyov was responsible for
many successful Soviet space exploration projects. He was behind the design of the rocket for Sputnik 1, the first artificial satellite to orbit our planet. It then became the most widely used rocket in the world. Luna 3 is also associated with Korolyov’s engineering leadership. It took pictures of the moon and then sent them back to earth. He was also in charge of the Venera 3 mission that marked a new step in mankind with the first unmanned landing on Venus or any other planet for that matter. Although it never came back, it allowed for some valuable scientific conclusions to be made about interplanetary space. It was with the help of people like Korolyov that the Soviet Union was able to catch up with advanced Western nations in a short period of time. Furthermore, Gagarin’s space flight in 1961 put the Soviets ahead in the space race, at least until Neil Armstrong landed on the moon in 1969. One could only guess that, if Korolyov did not die in 1966, the Soviet Union could have continued its successful space exploration programs. Through the passage of time, Korolyov’s achievements are seen as not just for the benefit of the Soviets, but for helping all mankind in conquering the unknown with “giant leaps.”
The world’s first cosmonaut Yuri Gagarin talks to Soviet rocket designer Sergei Korolyov in 1961. (Ukrinform)
A municipal worker hangs a poster depicting Yuri Gagarin, the first cosmonaut, in Russian-leased Baikonur Cosmodrome in Kazakhstan on March 29. Celebrations of the 50th anniversary of Gagarin’s April 12, 1961 space flight, the world's first manned mission in space, start next week. (AP)
Gagarin’s triumph came 50 years ago LONDON (AP) — A statue of Soviet cosmonaut Yuri Gagarin will stand guard along one of London’s most important thoroughfares for the next 12 months, the British Council said on April 5 — a gesture intended to mark the 50th anniversary of the first manned flight into space. The aluminium-and-zinc likeness of the pioneering space hero will go up on April 7 in honor of Gagarin’s successful flight around the earth from Baikonur, in modernday Kazakhstan, the council said in a statement. It will stand opposite a statue of 18th century British naval explorer Capt. James Cook on London’s Mall — the ceremonial route between Buckingham Palace and Trafalgar Square. In a statement, British Council Chair Vernon Ellis said the statue was meant to pay tribute to the “sheer bravery and adventure” of Gagarin’s space flight. “Through this statue we celebrate both that breakthrough for mankind and the U.K.-Russian relationship,” Ellis said. The statue is a replica of one
commissioned in the Moscow suburb of Lyubertsy, where Gagarin once worked, and is a gift from Russian space agency Roscosmos, the council said. It added that the work would be taken down after a year and moved elsewhere in Britain. A U.S. astronaut and two Russian cosmonauts blasted off on April 5 in pre-dawn darkness, riding into orbit on a Soyuz craft emblazoned with Gagarin’s portrait. The launch from Russia’s cosmodrome in Kazakhstan was the first for Alexander Samokutyayev and Andrei Borisenko. The NASA astronaut traveling with them, Ron Garan, had made one previous trip into space, on a U.S. space shuttle mission in 2008. The April 5 launch was seven days shy of anniversaries of two space milestones: Gagarin’s flight into orbit in 1961 from the same launch pad and the first flight of the U.S. space shuttle 20 years later. Speaking to reporters the day before the launch, Garan noted how much space flight has changed since
Gagarin was launched during the space race between the two Cold War superpowers. “Fifty years ago, one nation launched one man, basically as a competition,” Garan said. “Today, the three of us represent the many nations of the international partnership that makes up the International Space Station.” In line with a now 50-year tradition, the crew earlier this week visited the cabin where Gagarin spent his last night before his flight. The American astronaut admitted getting “a little bit of chills” when he visited the cabin, where all the furniture and even Gagarin’s personal belongings have been kept intact. Russian spacecraft are normally austere in their design, carrying only an identifying number. The decision to name the current mission’s spacecraft after Gagarin and decorate it with his portrait shows the reverence with which he is held in the Russian space industry. The Soyuz also was painted with Gagarin’s now famous line as he headed for the launch pad: “Let’s go!”
26 Lifestyle
www.kyivpost.com
April 8, 2011
For love of sport, money AN D R E I LI A K H OV
When football became a copyrighted event, it became exploitable. What is exploitable can be bought and sold. In the last 30 years, football mergers & acquisitions became one of the most fashionable deals. The regularity at which football clubs are bought and sold seems to defy any logic. A fan sees very little monetary value in 22 grown seemingly sane male adults kicking a ball on a lawn. However, more than a billion people pay to watch this ancient pastime. A prime space on the side of this lawn costs advertising companies millions of dollars and the aggregate price of beer and other warm-up liquids consumed during a match could easily buy a decent house in central London. Then there are t-shirts, scarves, mugs, posters and other memorabilia, the price of which is directly related to the place of the relevant club in the championship table. All of this together -- with the market value of stadiums, training grounds, hotels and parking lots -- adds up to potentially a very attractive cash cow which, if properly fed, could generate a profit margin of an oil company or in times of crisis could provide the meat to feed other businesses of its owners. Russian billionaire Roman Abramovich was widely believed to be committing a gross folly when he outbid the consortium which agreed to acquire Chelsea football club
from its previous owners about two hours before the deal closed. Rinat Akhmetov bought Shakhtar, Leonid Fedun bought Spartak Moscow, Hryhoriy Surkis bought Dynamo Kyiv and other oligarchs bought several other, famous and not so, clubs. Are they all football crazy? Far from it. While it is true that only a handful of European football clubs are capable of paying cash dividends to their owners, there are other benefits of having a football club. To be successful, a football club requires expensive and highly skilled professionals, which cost a lot of money. A capable accountant could save millions of dollars in taxes on provisions for loss of player value and playerreplacement amortization costs. This is one of many tricks which make acquisition of a football club a very attractive investment for any shrewd tycoon. And this is not just a Slavic fashion trend. Although it is true that every Ukrainian oligarch owns a football team, the same is true of a lot of Italian, English, American and even Arab businessmen. It is also a perfect way of combining business with pleasure. And what a feast for lawyers! Due diligence on such deals is unique and often the success of the deal hangs on the availability of a fiveyear-old medical report of a particular goalie. It’s a glamour M&A and, as any glamour, it has a dark side to it. The principal asset of a football club, unlike any other target business, is human and unpredictable. Players could be drinking before the game, a manager may be caught on camera with a lover in the office. The value of the real estate owned
Shakhtar’s players cheer club owner, Ukrainian billionaire Rinat Akhmetov, after the Shakhtar Donetsk vs. Dynamo Kyiv game in Donetsk on May 5. Owning a soccer team is becoming an essential accessory for many Ukrainian and Russian billionaires. (UNIAN)
Zagrebina: Book puts readers in 1930s America Æ19 is presenting Fat Lucinda to the
by a club depends on the property market, which crashes regularly. If the target falls out of the highest league, it may lose its share of broadcasting and advertising revenues. All of that could cause the value of the club to fall through the roof. Then
why buy it? Some buy for fun, some buy for profit. The majority combine both. It seems that buying into the game you are buying into a gamble of your life. Andrei Liakhov is managing partner with Integrites law firm in Kyiv.
impressed crowd. This trustworthiness isn’t a surprise. Gruen, while working on another story in 2003, accidentally came across photos of the traveling circuses. She immediately dropped the other project and dove into the history of American circuses. She visited shows, museums and exhibitions and spent her last money on rare books and photo albums. An elephant trainer from Kansas taught her to how understand elephant body language. According to Gruen, all the stories in the book are either based on real ones or taken from circus jokes, which are never far from the truth. However, nothing is perfect. The plot takes a banal turn and a few of the twists don’t succeed in surprising. Nevertheless, it’s a pretty good read. Kyiv Post staff writer Elena Zagrebina can be reached at zagrebina@kyivpost. com
www.kyivpost.com
Lifestyle 27
April 8, 2011
Sculpture battle stirs up sleepy, picturesque Peyzazhna alley BY O K S A N A FA RY N A
ÆKitsch or real art? New sculptures stir controversy in popular place for tourists and families
FARYNA@KYIVPOST.COM
Peyzazhna alley, a popular getaway for Kyivans and tourists in the heart of Kyiv, is in the spotlight again. This time, the attention is on the picturesque walking promenade because of new sculptures and fancy benches to be installed by May 27. Kiev Fashion Park, a project initiated by Oleksander Sokolovskiy, a businessman and a co-founder of Ukrainian Fashion Week, will showcase six sculptures by Ukrainian artists and 10 benches sketched by local designers on a strip of land next to Peyzazhna and nearby Andriyivskiy Uzviz, where tourists often pick up souvenirs. Many local residents and visitors to Peyzazhna do not mind new art objects being erected alongside children playgrounds. But others, including members of the local art community, do not want the quiet Peyzazhna alley turned into a “Disneyland.” The loosely organized group is demanding Sokolovskiy’s project be moved to a different location. Workers have already started installing objects for the new park. The first was a glasses-shaped bench designed by Serhiy Danchynov. “Look at those glasses. It is horrible! This is kitsch, not art,” said sculptor Artur Bilozerov, one of the authors of a public manifest against the project. “[Kiev Fashion Park] is 100 percent non-transparent, organized with severe violations. There is no project, nothing, a man just PRing himself and his friends.”
“I like similar projects in many cities of the world very much, and I wanted the same one to appear in Kyiv,” said Sokolovskiy. “We have certain organizational opportunities, a desire to fulfill this project, and a lot of connections with people who are not indifferent to what is happening in the city... who are eager to share their own money in order not only them could admire those works on their dachas, but all Kyivans.” Kyiv’s city council approved the project. But while the warring parties blame each other in public and on Internet pages, some have turned to acts of vandalism to halt the project. When workers arrived early on April 1 to finish a bench designed by Olga Gromova, they found it in the bushes down a nearby hill. One week earlier, unidentified vandals damaged a figure of Small Prince and broke the sculpture’s head. Sculptures and benches for the project were created by Ukrainian artists and designers, including Kostyantyn Skrytutskiy, Zhanna Kadyrova, Nazar
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At the moment, Peyzazhnna alley is decorated with bright sculptures of cats and other creatures by Kostyan Skrytutskiy. By May 27, the popular getaway in the city center will get more art objects. (Yaroslav Debelyi, fashionpark.kiev.ua)
Bilyk, Liliya Pustovit, Andre Tan and Liliya Litkovska. However, artists who have long worked on Peyzazhna alley or often spend time there are upset. In a joint letter manifesting their complaints, they said: “Stop turning Peyzazhna into a loud Disneyland.” On March 26, artists and residents gathered for a protest in which they declared that “Peyzazhna alley is not a private gallery.”Artist Zhanna Kadyrova held a poster with the demands from to hold open contests to select art works for the park. Meanwhile, many people who regularly walk and rest on Peyzazhna alley
say there are more important issues to solve. “One thing we really need is several public toilets to be installed here. If you go down the hills in the summer, you’ll see that they are de facto functioning as toilets,” said 61-year old
Anna Batkovska with her granddaughter along her side in a carriage. Despite the obvious problem, Kiev Fashion Park is scheduled to officially open on May 27 at 4 p.m. Kyiv Post staff writer Oksana Faryna can be reached at faryna@kyivpost.com.
28 Paparazzi
www.kyivpost.com
April 8, 2011
Ukrainians in vyshyvanka paint eggs at Ivan Honchar Museum.
Ukrainian women dressed in traditional costumes during the opening ceremony.
Æ
The Smithsonian Institution opened its international exhibition “Culture Of, By and For the People” in Kyiv on March 31. The world renowned institution has brought a series of multimedia exhibits to the Ivan Honchar Museum depicting scenes from the famous Folklife Festival, held annually by the Smithsonian in Washington. Ukraine has been invited to take part in the festival in 2014, but the institution has yet to receive a response from top officials in Kyiv. The exhibition is supported by the Smithsonian Center for Folklife and Cultural Museum, the Ivan Honchar Museum, the U.S. Embassy in Ukraine, the Fulbright Program, the Ukrainian Center for Museum Development (Foundation 3000) and the U.S.Ukraine Business Council. (Joseph Sywenkyj)
Folklore and culture
James Deutsch, program curator at the Smithsonian Institution
U.S. Ambassador to Ukraine John F. Tefft
If you want Kyiv Post Paparazzi to cover your event, please send details or invitations to news@kyivpost.com or contact photo editor Yaroslav Debelyi at 234-6500
Rugby ball decorated with Ukrainian national symbols
Embassies link up to support rugby Ambassador of France to Ukraine Jacques Faure (C)
From left: Leonid Dayneko of the Fund for Development of Child and Youth Rugby in Ukraine, Ambassador of South Africa Andries Venter and Alexandr Svertoka
The Fund for Development of Child and Youth Rugby in Ukraine met on March 31 in Cafe de Paris to discuss ways to develop the sport in a country better known for its love of soccer. Rugby is a contact sport that resembles football, but with passing only backwards, and continuous play. The fund has in recent years organized a series of international rugby tournaments, which have attracted an increasing number of young players from Ukraine, Russia, Moldova and Transnistria. The organization has also arranged for the best teams of youngsters to play abroad in prestigious competitions in the Netherlands, England and Austria. The fund is supported by the French and South African embassies in Kyiv, two nations famed for their prowess on the rugby field. The meeting on March 31 discussed how to get more youngsters involved in the game in Ukraine. (Andriy Kravchenko)
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Medical Technologies www.btl.ua Are you sick of the stupidity everywhere around you? Would you like to be part of the “Isle of positive deviancy�? To work in sales team in Kiev branch of the international producer of medical equipment?
If you are‌ s M/W up to 30 y.o.; s able to work hard; s able to negotiate on various levels; s communicative, active, persistent, self-organized, responsible; s ready for business trips
‌ then please, send your resume to ivanets@btl.ua. In the subject line state:
"Sales Manager" Young graduates are especially welcome!
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Requirements: - 3+ years banking experience with large corporate clients; - knowledge of deal structuring and documentation; - perfect command of English; - pro-active; - communication skills. CVs should be sent to financial_employer@bigmir.net Contact telephone: (050)445-42-01
Project Management&Research MINI
RESUME
This job description is not limited to the responsibilities listed and the incumbent may be requested to perform other relevant duties as required by business needs. If interested, please send cover letter and CV to Stela Melnic MELNICS@EBRD.COM by 6 May 2011.
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Relationship Manager
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Personal Teacher/Translator MINI
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Key Responsibilities and Deliverables The EU funded TAM Programme is looking for a Local Manager to perform the following functions: ‹ / ( ƒ ‹ / ( + 2 + / ( ƒ ‹ / ( / ( ƒ ‹ ( / ( ƒ ‹ ' / (¢ ƒ 0 - ƒ ‹ ' / ( ƒ ‹ * / ( ( § ƒ ‹ 0 . ( ƒ 0ƒ ‹ - $ ƒ ‹ ' ¢ ‚ Essential Skills, Experience and Qualifications ‹ .  ƒ ƒ ÂĄÂƒ ‹ ( z ¢ ƒ ƒ ƒ ‹ ! ƒ ‹ ! ƒ ‹ + ƒ
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The Turnaround Management (TAM) Programme is a donor funded capacity building programme run by the European Bank for Reconstruction and Development (EBRD), focusing on local private enterprises and their management. (www.ebrd.com/tambas). TAM helps small and medium to large sized enterprises transform themselves. TAM advisors enable enterprises to make structural changes and develop new business skills at senior management level, helping them to thrive and compete in market economies. TAM’s advisory services are provided by experienced directors and industry experts. Advisors transfer management and technical know-how to enterprises, conveying principles of responsible corporate governance and sharing commercial experience directly with senior managers. A TAM Programme has recently received funding by the European Union Eastern Partnership Programme in Ukraine and activities are about to commence.
RESUME
LOCAL MANAGER Contracting basis: Consultancy contract, located in Kiev, but travelling frequently in Ukraine, for a 1-year term (with a 3 month probationary period), with the potential to extend.
A branch office of an English company opens a vacancy for the position of the
RESUME
The EBRD TAM Programme in Ukraine funded by the EU, is looking for a:
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WWW KYIVPOST COM
#LASSIFIEDS 31
April 8, 2011
4&37*$&
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3 & / 5
• Various targets in a range of sectors • More than 10 years of legal work experience in Ukraine and the EU • Fluent English, Russian and Ukrainian • Competitive prices
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due_diligence@mail.ru + 38 095 78 5555 9
+380 44 578-27-10
QUALIFIED GUIDE AND INTERPRETATION SERVICE. EXCURSIONS. Tel. (044) 278-89-61
ЗакаС ĐźĐľŃ€Ń ĐľĐ´ĐľŃ ĐžĐ˛ Ń Đ˛ĐžĐ´Đ¸Ń‚ĐľĐťĐľĐź и поровОдчикОП Cars for rent: Mercedes E, Bus-Sprinter with driver, translator. Autovermietung, loyer. Tel.: +38 067 305 0055 +38 093 558 5050
Driver and Kyiv guide Fluent English, nice car Knowledge of day and night Kyiv +38 050 357 87 91 Valentin (Val) You’ll enjoy your stay! http://welcometokiev.com.ua
Thai Traditional Massage by your private professional massage therapist. 050 263 02 19 (Yulia Rybina) www.thai-massage.kiev.ua
English, French speaking Driver for VIP Airport Transfer • Odessa City Guide • Business Assistance Facebook: Andrey Manilo Tel.: +380 67 440-01-91, ceo@catchyourmatch.net andrey.manilo@facebook.com
English speaking driver with own car! Long driving experience. I can work for any company. Good knowledge of city. Can be a translator. Call 096 995-79-21 Victor
Interpreter, translator for business meetings, delegations, etc. German, English, Russian, Ukrainian Dolmetschen, FremdenfĂźhrung +38 097 820 42 20 morgentaller.oleg@gmail.com
Consulting new business/start-ups in Ukraine.
WWW.YESBUSINESS.COM.UA
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Appeal of the Ukrainian Red Cross Society Dear citizens! The most powerful earthquake and tsunami of the last years took place on 11th of March 2011 in Japan have resulted in death of thousands of people and more than 400 thousand evacuated. We appeal to you and everyone, who is not indifferent to humans’ distresses and suffering, to give a hand to the victims of the disaster. Your donations will be received by the Red Cross Society of Japan and used for providing the suffered people with support and assistance. You can transfer money to the following settlement account: Code 00016797 Recipient: National Committee of the Ukrainian Red Cross Society Settlement account #26005000041577 (in hryvna) Settlement account #26004000041578 (in USD) Settlement account #26003000041579 (in euro) in PAT “Ukrsotsbank� MFO 300023 Details of the payment: “Assistance for the earthquake victims in Japan�
Happy Birthday Askold!
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Even the smallest donation can save a life. Let’s don’t leave the victims of the disaster alone with their misfortune. Join our charity efforts! President Usichenko I. G.
*UNE 4HE 5KRAINIAN #HAMBER OF #OMMERCE AND )NDUSTRY 6ELYKA :HYTOMYRSKA 3TREET
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32 Photo Story
April 8, 2011
Atop the South Bridge in Kyiv.
Young photographer climbs high and goes low to show Kyiv Moscow photographer Vitaly Raskalov, 18, climbs as high as he can to take a bird’s eye view, despite the danger of heights and of arrest. Originally from Kyiv, Raskalov started photographing only two years ago and refers to himself as Vitaly Raskalov a “roofer” – someone who shoots pictures from building tops to capture breathtaking views. His altitude record so far is climbing to the top of the 302-meter “City of Capitals” skyscraper in Moscow. But Raskalov doesn’t limit himself to just heights and also goes to extreme depths -- places like subway tunnels. He used to study journalism, but was kicked out of university when he decided to go to Siberia instead of taking his final exams. Now all he knows about his future is that he doesn’t want to join the army. For the time being, Raskalov uploads his work, along with a description of the location and a back story, to his Live Journal blog (http:// raskalov-vit.livejournal.com), which has about 8,000 followers. Story by Nataliya Horban Photos by Vitaly Raskalov
The night view near Lukyanivska metro station in Kyiv.
The view from the Motherland monument in the memorial complex dedicated to the triumph in World War II.
www.kyivpost.com
See more photos www.raskalov-vit.livejournal.com
The highest building in Kyiv, Parus II Business Center, near Klovska subway station.
A new subway line is under construction in Kyiv.