#50|Dec10|2010

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The Richest Ukrainians Hot issue on Dec.

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vol. 15, issue 50

Vote for the Best of Kyiv!

Log on to www.kyivpost.com and cast your ballots for the best businesses and services in Kyiv. The 10th annual Kyiv Post Best of Kyiv awards will be announced on Jan. 27. See pages 24 and 29 for details and stories.

December 10, 2010

Who Else?

“The pre-trial investigation established that on the night from Sept. 16 to Sept.

17, 2000, Oleksiy Pukach, under the instructions of Interior Minister Yuriy Kravchenko and other officials, [and] in preliminary agreement with a group of persons, committed the premeditated murder of journalist Georgiy Gongadze, because the victim was fulfilling public and journalistic duties.”

– Dec. 7 report from office of Ukraine General Prosecutor Viktor Pshonka

Despite evidence that ex- President Leonid Kuchma and current Verkhovna Rada speaker Volodymyr Lytvyn may have ordered Georgiy Gongadze’s murder, authorities appear content to pin the blame on lower-ranking officials. See story, page 14.

People light candles in memory of Georgiy Gongadze, whose image is silhouetted above, during a memorial rally on Independence Square on Sept. 16, the 10th anniversary of the murder of the Ukrainian journalist. Gongadze’s unsolved murder symbolized the high-level crime and corruption that flourished during ex-President Leonid Kuchma’s rule from 1994-2005. (Yaroslav Debelyi)

Nalyvaichenko, former SBU chief, talks about corruption, shady gas trade, Gongadze murder K Y I V P O S T S TA F F

Valentyn Nalyvaichenko, the former head of the Security Service of Ukraine, is now the leader of Our Ukraine, the political party of his close ally, former President Viktor Yushchenko.

The Kyiv Post sat down with the 44-year old politician on Dec. 7 to get his reaction to leaked U.S. State Department cables and allegations of links among organized crime,

Inside: 234-6500: Kyiv Post main number

gas traders and top government officials.

In confidential or secret U.S. Embassy cables released by WikiLeaks this month, U.S. officials repeatedly discussed the alleged ties between Moscow-based Semyon Mogilevich, who is wanted by the U.S. Federal Bureau of Investigation, and Ukrainian billionaire Dmytro Firtash, a co-owner of RosUkrEnergo gas trader.

Firtash is close to the inner cir-

cle of President Viktor Yanukovych.

According to a report by former U.S. Ambassador to Ukraine William Taylor, during a Dec. 8, 2008 conversation he had with Firtash, the gas tycoon also claimed to be close to Yushchenko as well.

Firtash has been a big player in the supply of gas to Ukraine and Europe via Swiss-registered RosUkrEnergo, which he co-owns with Russia’s Gazprom.

Taylor wrote that Firtash acknowledged

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Lifestyle Æ 19 – 29, 32

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needing Mogilevich’s permission to open businesses.

In response to the leak, Firtash denied ties with Mogilevich in a strongly worded statement on Dec. 2.

The WikiLeaks-released documents also show heightened concern about organized crime in Eastern Europe, including Ukraine. A Spanish prosecutor was, for example, quoted in the WikiLeaks documents as describing Ukraine as in danger of becom- Æ10

INSIDE: • Tymoshenko accuses administration, RosUkrEnergo of massive ‘financial crime.’

Page 5.

• Tax protests fizzle out as Yanukovych signs compromise measure into law.

Page 7.

• U.S. official confronts Ukraine over 2008 arm sales to Sudan. Page 15.

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DECEMBER 10, 2010

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December 10, 2010

Vol. 15, Issue 50 Copyright © 2010

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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Tomorrow’s News Tuesday, Dec. 14 – Wednesday Dec. 15

Ukraine appears to bow to pressure from China on Nobel Peace Prize

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 Замовлення № 10-6921 Аудиторське обслуговування ТОВ АФ “ОЛГА Аудит” Mailing address: 01034, Kyiv, 22B Prorizna Street Kyiv Post main number: 234-6500 Advertising: 234-6503

Ukraine used an unscheduled meeting of its diplomats on Dec. 14-15 in Kyiv as an excuse for not having its ambassador to Norway attend the Dec. 10 Nobel Peace Prize award ceremony of Chinese political prisoner Liu Xiaobo.

Critics complained the decision to not have Ukrainian Ambassador to Norway Oleksandr Tsvetkov attend is a sign that Ukraine is willing to overlook China’s horrible human rights record in exchange for better ties with Beijing.

In September, President Viktor Yanukovych visited China and signed bilateral agreements for up to $4 billion of Chinese investments in Ukraine, including a fast rail line connecting Boryspil International Airport and Kyiv.

Tsvetkov confirmed to Kommersant daily newspaper on Dec. 6 that he received a written “recommendation” from the Chinese not to attend the award ceremony.

On Dec. 6, the Oslo-based Nobel Prize committee said that Ukraine was among 19 countries to decline the invitations.

Norwegian Nobel committee secre-

tary Torill Johansen told Kommersant that Tsvetkov informed the committee that attending a conference in Kyiv would prevent his appearance. Cuba, Russia, Venezuela, Kazakhstan and Saudi-Arabia – all run by autocrats or dictators – were among the other 19 countries that declined the award ceremony invitations.

Tsvetkov told Kommersant he will be in Kyiv on Dec. 10 to prepare for the meeting of diplomats to talk about Ukraine’s new non-aligned foreign policy stance and reaffirm the country’s commitment to European integration.

But many think Ukraine is simply dodging the issue, since this biennial gathering usually takes place in August. The last one took place in 2009.

In November, Thorbjorn Jagland, chairman of the Nobel Peace Prize Committee, announced that China had been pressuring diplomatic missions in Norway to boycott the award ceremony.

China hasn’t released Xiaobo from prison and isn’t allowing his relatives to leave China to visit Norway.

A pro-democracy protester wearing a mask of jailed Chinese dissident Liu Xiaobo protests outside the Chinese government liaison office in Hong Kong on Dec. 5. Protesters rallied in Hong Kong on Sunday for the release of the jailed Nobel Peace Prize winner. (AP)

The lack of solidarity is surprising to some, since Ukrainians made up the largest proportion of political dissidents in the Soviet Union.

However, since statehood, Ukraine has had a troubling human rights climate itself. According to a 2009 U.S. State Department report, Ukraine’s problems “included reports of serious police abuse, beatings and torture of detainees and prisoners; harsh conditions in

prisons and detention facilities; arbitrary and lengthy pretrial detention; an inefficient and corrupt judicial system; and incidents of anti-Semitism.”

In 2007-2009, the European Court of Human Rights issued 19 decisions against Ukraine for violations of the European Convention of Human Rights Late on Dec. 9, Ukraine's foreign ministry announced that it was sending a replacement for Tsvertkov. .

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Parliament to vote on broadening public information Parliament reconvenes Dec. 14-17 and may adopt laws giving the public greater access to official information.

One is a bill on public access to information championed by Bloc of Yulia Tymoshenko parliamentarian Andriy Shevchenko. The draft law has received high marks from international experts. Civil society organizations and journalists participated.

The bill introduces a clearly defined

concept of public ownership of information, and has provisions granting the public to access government and municipal plans and budgets. It also gives greater weight to the public’s right to know vs. the privacy of government officials.

President Viktor Yanukovych has repeatedly promised to pass such laws, in response to demands from the European Union and others. But his

commitment is questionable, since the pro-presidential Party of Regions lawmakers who control parliament have constantly stifled the legislation.

The second bill is a new law on information favored by Party of Regions parliamentarian Olena Bondarenko.

Lawmaker Shevchenko said he’s optimistic both laws will get passed.

“The Party of Regions realizes they have no choice but to pass this law,” Shevchenko said. “There’s been a lot of pressure at home and from abroad on the importance of passing these bills.

There’s been a lot of goodwill on both sides of the aisle, we’ve finally came to an understanding, this is crucial for our country to move forward.”

Compiled by Mark Rachkevych

Experts: Partial ban on indoor smoking in public places is ineffective remedy

BY I R I N A S A N D U L SANDUL@KYIVPOST.COM

The haze of smoke that greets visitors to many Kyiv restaurants could soon clear a bit as authorities plan next year to introduce a new recommendation to encourage restaurants, cafes and bars to restrict smoking to closed-off rooms.

The move to clean up Kyiv’s restaurants – most of which currently allow smoking – has been championed by public health advocates and nonsmokers.

But experts say that the measure falls short. Health officials say that only a complete ban on indoor smoking in public places can prevent the damage caused by inhaling second-hand smoke, a major cause of disease and premature death for non-smokers. The medical consensus is that there is no safe level of exposure to second-hand tobacco smoke.

Moreover, many nations that have adopted stiff indoor smoking bans have found them to be successful and popular, while not harming businesses such as restaurants and pubs. Smokers, in short, adjust to the restrictions and even smoke less – which polls show most of them want to do anyway.

Fresh air The new recommendation for separate smoking rooms is entirely optional, said Oleksandr Brihinets, head of the permanent commission of the Kyiv City Council on cultural and tourist issues and one of the initiators of the project.

He suggested that no-smoking establishments use signs to advertise their policy, and said that they will be placed on an official list of tourist points. The owners of non-smoking places could also receive some benefits from the city authorities. For example, large neon signs would not be considered advertising, as they will be for other establishments starting next year, saving them thousands of hryvnias in payments to the authorities, Brihinets said. Other incentive are being considered.

Moreover, an indoor smoking ban might benefit business by drawing clients who are turned off by damaging their health by going to restaurants and bars.

Viktoria Shipka, 20, who was sitting at Murakami restaurant near the Golden Gates this week, said she’d prefer smoke-free eating. She was in the restaurant’s non-smoking room,

Andriy Polischuk, a 34-year-old photographer, smokes in Cupidon pub in Kyiv. (Vitaly Pavlenko)

where smoke drifts in from smoking rooms which are not sealed off by doors. “They can [smoke] on the street, no problem, but even there – only at specially allocated places,” she added.

Fabienne Labe, a 44-year-old French researcher who was also in the restaurant, agreed that most people want smokers to puff away outside.

“In France smoking is totally banned in public places and this is excellent,” she said. “French people are relaxed about this, even if they are smokers themselves. It is unpleasant when somebody is smoking next to you, not to mention that you might come with kids.”

Kostantyn Krasovsky, head of the tobacco control section of the Health Ministry’s Ukrainian Institute of Strategic Research, called the new recommendation a “half measure.”

“But, of course, this is definitely better than nothing,” he added. “There is a big need for clean spaces.”

Healthier country

Freedom of choice

Most European Union citizens think the same way as Labe. According to research conducted by representatives of the European Commission, 70 percent of EU citizens support the ban on smoking in public places.

The Republic of Ireland and the United Kingdom are among a number of countries to have banned smoking entirely in public places. The European Commission, is pushing for an EU-wide ban.

Restrictions on smoking in Kyiv could also help Ukrainians live long.

Currently, they are literally smoking themselves into early graves. An estimated one-third of adults smoke, and perhaps a majority of men.

Smoking-related diseases contribute to the country’s lamentable life expectancy, currently 61 for men and 73 for women.

The regulation has not gone down well with restaurant and bar owners, however.

Andriy Zadorozhny, the owner of Kozyrna Karta, the largest restaurant chain in Ukraine, said that some 60 percent of those that visit restaurants smoke. Vadim Vysochin, head of the Shokoladnitsa cafe chain in Kyiv, is worried about losing clients and not enticed by any potential benefits.

“Fifty percent of visitors come [to cafes] to have a cigarette with a cup of coffee,” he said. “This is additional comfort.”

Some clients agreed. Andriy Polischuk, a 34-year-old photographer sitting smoking in Cupidon pub, said he would go outside if the owners made it a rule, but it wouldn’t make him quit or light up less often.

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3

December 10, 2010 Advertisement

European Business Association News

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,EADERS 4ALK Leaders Talk: Meet the New EBA Board Members!

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ERE WE CONTINUE INTRODUC ING THE RECENTLY ELECTED %"!

"OARD -EMBERS AND ASKING THEM ABOUT THE PROSPECTIVE PLANS AND PRIORITIES IN THEIR NEW ROLE

) WILL DEDICATE MY SECOND TERM IN THE %"! "OARD TO PROMOTING FAIR AND TRANSPARENT BUSINESS PRACTICES AND FIGHTING CORRUPTION "Y THAT ) HOPE TO CONTRIBUTE TO THE %"!

HELPING THE %"! MEMBERS PROSPER THROUGH OUR GOOD STANDING OUR GOOD CORPORATE ETHICS PRACTICES AND COLLECTIVE ACTION

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"!3& 3%

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0HILIPS 5KRAINE ,,#

4HERE ARE STILL MANY AREAS WHICH NEED TO BE IMPROVED TO ESTABLISH A GOOD BASIS FOR DOING BUSINESS IN 5KRAINE ) WILL MENTION ) HAVE ALREADY BEEN A "OARD -EMBER SO THREE AREAS WHICH ARE CRUCIAL IN MY POINT SOME OF THE THINGS ) WILL CONTINUE DOING OF VIEW AND WHICH WILL HAVE MY SPECIFIC 4OPICS WHICH ) FIND PARTICULARLY IMPORTANT ATTENTION AS THE %"! "OARD -EMBER ARE THE FOLLOWING SUSTAINABILITY ENERGY EFFI &IRST THERE NEEDS TO BE TRANSPARENT LEG CIENCY ACCESS TO QUALITY HEALTH CARE FIGHTING ISLATION TO ENSURE A FREE MARKET MECHA CORRUPTION CUSTOMS CLEARANCE mGREYn IMPORT

NISM 4HIS LEGISLATION SHOULD APPLY FOR ALL HARMONIZATION OF CERTIFICATION AND TECHNICAL COMPANIES REGARDLESS IF THEY ARE LARGE REGULATIONS WITH THE %5 NORMS SMALL 5KRAINIAN OR FOREIGN 4HE SECOND "EING ALSO THE #HAIRMAN OF THE #ONSUMER AREA IS THE PROTECTION OF INTELLECTUAL PROP %LECTRONICS 3UBCOMMITTEE ) HAVE A LOT OF ERTY RIGHTS /NLY WHEN THIS IS SECURED THE TOPICS COMING UP THAT ARE VERY IMPORTANT NOT 5KRAINIAN MARKET WILL BE ATTRACTIVE FOR ONLY FOR CONSUMER ELECTRONICS MANUFACTURERS

INVESTMENTS BY 2 $ BASED COMPANIES BUT ALSO FOR THE WHOLE %"! MEMBERSHIP AND 4HE AVAILABILITY OF INNOVATIVE PRODUCTS WILL ) WILL BRING THOSE TO THE "OARD INCREASE THE COMPETITIVENESS OF 5KRAINE IN THE GLOBAL MARKET 4HIRD AREA FOR IMPROVE MENT IS THE BUREAUCRACY WHICH IS LIMITING THE EFFICIENCY OF BUSINESS PROCESSES AND VASYL Bovdilov, HAVING AN ADVERSE EFFECT ON THE RESULTS 'ENERAL -ANAGER

5NILEVER 5KRAINE MAX Egger, #%/

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PROSPERITY OF OUR COMPANIES OUR CUSTOMERS AND THE NATION WE DO BUSINESS IN 4HEIR VALUES TRUTH HONESTY TOLERANCE 4HEIR OBJECTIVE PROFITABLE GROWTH FOR THE %"! MEMBER COMPANIES AND WELFARE FOR THEIR EMPLOYEES ) FEEL TRULY PRIVILEGED BEING A MEMBER OF THIS 'ROUP AND HOPE MY CON TRIBUTION SERVES THE PURPOSE !S ) SAID IN MY SPEECH AT THE !'-- ON .OVEMBER

www.eba.com.ua

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"OARD MY FIRST PRIORITY WILL BE TO MOVE FURTHER WITH THE %"! INITIATIVES DESIGNED TO CREATE BETTER MORE PREDICTABLE BUSINESS AND INVESTMENT CLIMATE IN 5KRAINE 4HE COMPANY ) REPRESENT p 5NILEVER p HAS BEEN OPERATING IN 5KRAINE FOR THE SECOND DECADE YEARS AND REGARDING 5KRAINE AS A LONG TERM KEY PRIORITY MARKET 4HAT IS WHY WE INTEND TO PLAY AN ACTIVE ROLE IN SHAPING FAIR REGULATORY FIELD INTEGRATED WITH THE %5 LEGISLATION !S AN INTERNATIONAL COMPANY WE CAN INTRODUCE THE WORLDlS BEST KNOWLEDGE EXPERIENCE AND PRACTICES AND WITHIN THE %"! WE CAN SHARE THEM WITH THE 5KRAINIAN AUTHORITIES TO BEN EFIT BOTH 5KRAINIAN BUSINESS AND SOCIAL COM MUNITY )TlS ESSENTIAL FOR 5NILEVER AND FOR ME PERSONALLY TO MAKE POSITIVE CHANGES IN OUR COMMUNITY AND IMPROVE THE SITUATION IN OUR COUNTRY

4HINGS TO KNOW The European Business Association has been included into the European Commission's Register of Interest Representatives.

The register was created by the European Commission in compliance with the European Transparency Initiative, introduced on November 09, 2005, in order to increase transparency, openness and accountability of the EU governance processes, enhance consultations with civil society and increase citizens’ awareness of the specific interests influencing the decision-making process by the European Institutions.

Now the EBA will have an additional possibility to voice the important for the EBA Membership issues within public consultations launched by the Commission.

Custom Clearance Procedures Questioned

T

he Delegation of the European Union to Ukraine is going to significantly enhance its support to the Ukrainian Government in improving border management, including customs procedures and infrastructure. The EU and Ukraine are currently finalising an agreement, which is to be signed in 2011.

The EBA is ready to cooperate with the Delegation and to provide an input into the development of transparent regulations and procedures on customs clearance to make it easier to conduct export and import activity in Ukraine. The EBA is initiating a customs clearance poll among its members to determine the issues businesses have faced when crossing the border of Ukraine in 2010.

The general objective of this initiative is to monitor situation with customs clearance based on a day-by-day experience of the EBA members and to share the outcomes with the Ukrainian Government, the EU Delegation, and other interested parties. The subject of the assessment is customs clearance procedures, including the estimated administrative burden business experiences in foreign economic activities.

Representing more than 770 international companies in Ukraine that account for a significant volume of import and export operations, the EBA plans to include more than 300 companies, involved in the EBA Customs Committee, as the potential participants of the customs poll.

The EBA hopes that the situational assessment resulting from this study will constitute the helpful guidelines for both the Ukrainian Government and the international companies in the customs procedures’ revision and further enhancement.

5IF QSPTQFDUJWF TVSWFZ XJMM JODMVEF UIF RVFTUJPOT PO • The number of days for customs clearance, which companies have spent for one shipment; • The rate of goods physical inspections to the total number of shipments; • The rate of rejection from the customs authorities to apply transaction value method (when appropriate) against the total number of customs declarations;

• The number of documents requested to submit to customs per one shipment; • The number of customs audit/inspections, which companies have experienced during the researched period and their duration.

$IBJSNBO PG UIF &#" $VTUPNT $PNNJUUFF 1BSUOFS .BHJTUFST Poll results will help to monitor progress in customs regulations and provide the EU decision makers with practical feedback on VLADIMIR Didenko the issues that EBA member companies face dealing with custom clearance procedures in Ukraine. I invite the EBA members to use the opportunity to contribute in Ukrainian customs reform and take active part in the poll. Eventually improving customs clearance procedures and getting rid of administrative burdens may create a more favourable environment for international business in Ukraine.

&#" &YFDVUJWF %JSFDUPS We list the issues of customs procedures simplification among the seven key priorities the EBA has set to improve in order to make the Ukrainian market more welcoming for the foreign investment. The cur- ANNA Derevyanko rent system of customs clearance and control in Ukraine is over-bureaucratic and impedes the development of the foreign economic activity.

There are a number of improvements to be introduced in order to adjust the Ukrainian customs standards to the internationally recognised ones. We are happy that we have established a good rapport with the Ukrainian customs authorities, and we hope that the prospective poll results will be used for the benefit of the image of Ukraine.

2%')/.!,.EWS Fitch rated the Donetsk region as “Stable�

On December 03, 2010, Fitch Ratings Agency assigned the following ratings to the Donetsk region: long-term ratings in international and national currency “B�, short-term rating in international currency “B� and national long-term rating “AA (ukr)�.

The forecast according to long-term ratings is “Stable�.

Ratings of the Donetsk region represent its strong economy, acceptable budget rates, absence of direct risk and contingent liabilities. Ratings also take into account regional budget’s dependence on the governmental decisions and the general level of institutional environment’s development in the country.

Fitch considers that the stabilization of political situation in the country after the presidential elections at the beginning of 2010 will further reinforce predictability of the Ukrainian institutional environment. The Regional Administration works in order to increase the effectiveness of budget management and to develop investment potential of the Donetsk region.

Dnipropetrovsk Hosts the EBA Business Morning on the EU-Ukraine Deep and Comprehensive Free Trade Agreement The event was a joint initiative of the EBA, the Embassy of the United Kingdom of Great Britain and Northern Ireland in Ukraine and Dnipropetrovsk Regional State Administration and Dnipropetrovsk City Council. By positioning the region as an attractive one for investment and business partnership, Dnipropetrovsk administration in cooperation with the European Business Association also make their contribution into economic integration of Ukraine to the EU. In 2008 about 600 million Euros were allocated towards the previously adopted program of adaptation to the rules and terms of trade with Europe. Head of Policy Delivery Team of the British Embassy to Ukraine, Mr. Allan Duncan noted that the EU and Ukraine have been negotiating a Deep and Comprehensive Free Trade Agreement (DCFTA) for over two years. Despite the fact that the most of the issues have already been agreed upon, active participation of business representatives in the discussion of the agreement is very welcome.

The benefits of Deep and Comprehensive Free Trade Agreement for Ukraine, highlighted by the directors of CTA Economic & Export Analysts LTD, Mr. Mark Hellyer and Mr. Chris Cosgrove, will include tariffs cut on the EU-Ukraine trade and Ukraine's legal and administrative codes alignment with the EU standards, which in effect, means integrating Ukraine to a great extent into the EU internal market.

7E LOOK FORWARD TO YOUR FEEDBACK AT

PGGJDF!FCB DPN VB

4 Opinion

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December 10, 2010

Editorials

Yanukland Ukraine is heading into times more precarious than even we imagined when the nation elected Viktor Yanukovych as president. Ukraine has entered an era in which what is wrong will become legal and what is right will be made illegal.

Ten months into the president’s first term of office, the nation’s courts and parliament have ceased functioning as independent checks on executive power.

Moreover, as ex-President Leonid Kuchma so aptly put it in a Feb. 7 conversation with U.S. Ambassador John F. Tefft, divulged this month by WikiLeaks: “The parties represented in the [Verkhovna] Rada compete to see who has the most MPs [members of parliament] with a criminal record.” It’s odd to hear such alarm bells from Kuchma, but sad, nonetheless, because lawmakers continue to enjoy undeserved legal immunity from prosecution.

As the Oct. 31 local elections showed, the nation is in danger of never having transparent and honest democratic contests again unless citizens fight for them.

And how to fight? Even peaceful demonstrations are endangered, as the nation found out on Dec. 3 when police broke up the tent city protests on Independence Square in opposition to the original, draconian tax code floated by Yanukovych’s government.

We have a neutered news media, such as Inter, the national TV station controlled by Security Service of Ukraine chief Valeriy Khoroshkovsky, who arrogantly fails to acknowledge the huge conflicts in his official and private roles.

But the ultimate prize for cynicism this week went to Dmytro Firtash, the shady billionaire gas trader and industrial baron who wouldn’t even disclose his co-ownership in RosUkrEnergo until 2006 – two years into its existence. Firtash tried to portray Ukraine’s court-ordered return of 11 billion cubic meters of gas to RosUkrEnergo as a positive step for the nation. Widely seen as non-transparent, RosUkrEnergo operated as the exclusive gas intermediary between Ukraine and Russia from 2006-2008, until ex-Prime Minister Yulia Tymoshenko wisely squeezed it out of the trade. The intermediary appeared to serve no other purpose other than to enrich the company’s owners by billions of dollars each year – and those who stood behind them – at the expense of the Ukrainian people and Russia’s Gazprom.

Russian President Dmitry Medvedev himself has said there is no need for intermediaries between the two nations, while Russian Prime Minister Vladimir Putin famously cited the intermediary arrangement as providing slush funds that enriched private individuals and favored politicians. Putin also talked in 2009 about corruption reaching the highest levels of the Ukrainian government.

But now RosUkrEnergo is back in business. All the while, the state-run Naftogaz monopoly’ which should be profitable – teeters at the edge of insolvency as the government jacks up utility gas prices for households.

Meanwhile, the Yanukovych team seems destined to privatize the nation’s remaining state assets in the same old way – untransparently and uncompetitively – in sham sales that amount to legalized theft by insiders, who are busy also writing tax breaks and import preferences into legislation.

This is going to be a long winter.

Slouching ahead The nation’s politicians and law enforcers continue to bathe in shame as they lurch toward their version of progress in the Sept. 16, 2000, murder of journalist Georgiy Gongadze.

Authorities continue to politicize the evidence in the case that should, from any reasonable point of view, require criminal charges to be filed against ex-President Leonid Kuchma and current Verkhovna Rada speaker Volodymyr Lytvyn for possible involvement in the murder and the subsequent, decade-long cover-up.

Prosecutors are trying to pin the blame for ordering the murder on ex-Interior Minister Yuriy Kravchenko, killed by two gunshot wounds to the head on March 4, 2005, in what officials suspiciously ruled a suicide back then. It is all very convenient. But part of the reason that prosecutors cited in drawing their conclusion that Kravchenko ordered Gongadze’s murder comes from testimony by alleged killer and former Interior Ministry general Oleksiy Pukach.

Prosecutors have had Pukach in custody for more than a year and a half, and he reportedly started cooperating from the outset. His testimony and confession also reportedly implicate Kuchma and Lytvyn. So if his words were good enough to draw conclusions about Kravchenko, why aren’t they good enough to take action against Kuchma and Lytvyn – especially when audiotapes and other circumstantial evidence support such charges?

It clearly seems that prosecutors want to make just enough progress to mollify critics, while protecting Kuchma and Lytvyn. It won’t work. Down to the last person with a conscience, the question will always be asked: Who ordered the murder of Georgiy Gongadze?

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“Mr. Ambassador, journalists are asking if you will email them your latest report, or should they wait until it shows up on WikiLeaks?”

JOHN F. TEFFT

NEWS ITEM: WikiLeaks, the whistleblower website, has obtained more than 250,000 confidential U.S. State Department communications and has begun distributing them publicly. The information is continuing to cause sensations and scandals around the globe for the revealing conversations exposed by them. Recent reports show that Ukraine lied about selling weapons to southern Sudan, which is embroiled in a protracted and bloody civil war. However, diplomats also reveal that the U.S. government was in the know on the deal, but stayed quiet about it until Somali pirates took hostage the crew of the Faina, a Ukrainian freighter, in September 2008 before releasing the Ukrainians and others on board for a reported $3.2 million ransom. The Faina was carrying 32 T-72 Soviet-era tanks, 150 grenade launchers, 6 antiaircraft guns and ammunition. The arms were unloaded in Kenya. Many other interesting conversations between U.S. Ambassador to Ukraine John F. Tefft (depicted above) and influential Ukrainians have also been among the documents released by WikiLeaks. (Drawing by Anatoly Petrovich Vasilenko).

VOX populi WITH SVITLANA KOLESNYKOVA

What do you find striking about the WikiLeaks revelations?

Yuriy Barabash, designer “I heard about it, of course, but frankly speaking nothing struck me so much.

Also, I read diametrically opposite opinions on the issue. I cannot say that what happened is bad because if something is hidden, that means it may be interesting, people should know it.’’

Vladyslav Shevchenko, artist “I heard yesterday that the WikiLeaks creator was caught and he was awaiting trial. They published secret correspondence, my friends told me. I think it’s good. Freedom of speech must be observed, that’s why it’s excellent.

Nothing should be hidden.”

Oleksiy Morshyn, journalist “I heard with half an ear some secret documents were brought to light and the website’s founder is caught in Great Britain. I guess if publicizing secret correspondence push change in the existing state system, or cause the change of leadership in our country, then we can consider it positive for Ukraine.”

Kostyantyn Smirnov, businessman I read all the materials revealed by WikiLeaks – mainly about Russia and America. I am from Moscow myself. I am sure all this is truth, which must be published. It’s a positive phenomenon. We need to be open. Such people as [WikiLeaks founder Julian] Assange must exist.

Iryna Uliyanenko, lawyer The topic has been actively discussed recently.

However, with all the modern technologies, what happened is not surprising. Also, people perceive the revealed information differently, and make diverse conclusions – both positive and negative. Our people nowadays are so much disappointed in our government and statehood that I guess the publicized materials will just increase these feelings.”

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 news@kyivpost.com

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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News 5

December 10, 2010

Tymoshenko wants IMF to probe Naftogaz, RosUkrEnergo spending

BY P E T E R B Y R N E BYRNE@KYIVPOST.COM

Yulia Tymoshenko, the former prime minister who came within four percentage points of being elected president in February, called on the International Monetary Fund to investigate the nation’s notoriously murky gas trade before transferring a $1.5 billion second tranche from a $15 billion loan.

In a Dec. 8 open letter addressed to IMF board members, Tymoshenko said Ukraine needs the money, but urged the creditor to investigate recent transactions involving Swiss-based gas trader RosUkrEnergo before approving further assistance.

“The Ukrainian and international communities are well-informed about the activity of RosUkrEnergo and its founders, among which are some odious figures sought by the U.S. Federal Bureau of Investigation,” she wrote in the letter.

Tymoshenko was referring to the alleged ties between the company’s co-owner, Ukrainian tycoon Dmytro Firtash, and reputed Russian crime boss Semyon Mogilevich, who is on the FBI’s Most Wanted List of fugitives and is charged with financial crimes.

Firtash issued a strong denial of links on Dec. 2 after WikiLeaks published a cable in which then-U.S. Ambassador to Ukraine William Taylor in 2008 quoted Firtash as admitting business ties with Mogilevich.

Moreover, in an April 2008 memo addressed to FBI director Robert Mueller, the U.S. deputy chief of mission in Moscow, Eric Rubin, more tightly connected Mogilevich with RosUkrEnergo.

“Independent analysis suggests that some members of the security services are allied with various organized crime structures or turn a blind eye to the activities of known criminals… For example, crime boss Sergei Shnaider (better known as Semyon Mogilevich) not only enjoyed freedom of movement in Russian and official protection, but he was brought in by Gazprom to managed gas sales to Ukraine through the shady RosUkrEnergo venture. Only when he lost his political cover, for reasons that are unclear… he was arrested in January 2008,” Rubin wrote.

Ukrainian state energy firm Naftogaz, Russian gas giant Gazprom and RosUkrEnergo reached a deal over disputed gas earlier this month in which Naftogaz returned 12.1 billion cubic meters of gas worth billions of dollars to RosUkrEnergo, and the trader settled debts to Naftogaz and Gazprom. The gas had been appropriated in January 2009 in lieu of a $1.7 billion debt by RosUkrEnergo to Russian state energy giant Gazprom, an obligation purchased by Naftogaz.

Speaking at a press conference at her headquarters in Kyiv, Tymoshenko said the Cabinet of Ministers on Nov. 15 went against national interests by transferring $5.4 billion worth of natural gas from Naftogaz to RosUkrEnergo, following a court decision by the Arbitration Institute of the Stockholm Chamber of Commerce.

Tymoshenko said the award, which in her words amounts to 15 percent of the 2011 state budget, will increase the budget deficit to 9 percent, and will force Naftogaz Ukraine, Ukraine’s state-run oil and gas monopoly, into bankruptcy. She said it will burden ordinary Ukrainians, who will be forced to pay higher prices for gas and utilities, and will make it easier for Ukraine’s strategic natural gas pipeline system to

A civic activist puts letters from Ukrainian citizens in a box addressed to the International Monetary Fund in Kyiv on Sept. 24, 2010. Over 100,000 Ukrainians signed petitions asking the IMF to control the use of its loans to Ukraine and send a group of experts to look into how the loans benefit RosUkrEnergo, a Swiss-registered company that imports billions of dollars worth of natural gas from Central Asia to Ukraine. (UNIAN)

Æ Firtash, co-owner of gas trader, has not responded to latest charges against him fall under Russian control.

Serhiy Taran, director of the Kyivbased International Democracy Institute, said that Tymoshenko’s appeal to the IMF could score her political points, but it is unlikely to launch an investigation.

“The IMF knows Ukraine very well and does business with Ukraine based on agreements and their own analysis of state finances,” Taran said. “The IMF does not interfere with [allegations of] government corruption.”

By the time the Kyiv Post went to press on Dec. 9, the Kyiv Post had not received a response to Tymoshenko’s allegations from Firtash, his Group DF holding company or his business partner Robert Shetler-Jonese.

Andrey Knutov, a spokesman for RosUkrEnergo, declined to comment on Tymoshenko’s allegations.

“It has been our policy not to comment about what Tymoshenko says about our company,” Knutov said. “If we have a problem with what someone says about RosUkrEnergo, we go to court.”

Kyiv Post staff writer Peter Byrne can be reached at byrne@kyivpost.com

Tymoshenko alleges ‘corruption conspiracy’ involving administration, RosUkrEnergo sold out nation Editor’ Note: The following is a letter written to the International Monetary Fund by ex-Prime Minister Yulia Tymoshenko and released at a Dec. 8 news conference. She is asking for the IMF to withhold further installments of a $15 billion loan, alleging it will be effectively used to further “an international corruption fraud’’ involving RosUkrEnergo, the gas intermediary co-owned by Dmytro Firtash. She is essentially repeating similar allegations she made as prime minister. RosUkrEnergo recently won a Stockholm arbitration court ruling declaring that Ukraine must return 12 billion cubic meters in natural gas to RosUkrEnergo. Attempts to reach Firtash or his assistants were not successful.

First of all, I would like to express my gratitude to the International Monetary Fund for its longstanding cooperation with Ukraine that was especially important during the global financial crisis in 2008-2009. I am sure that the cooperation between Ukraine and the IMF will continue for the sake of real reforms and public finances recovery.

In the joint IMF-Ukraine programs, considerable attention has been paid to the balancing of the budget and obtaining its optimal deficit, a significant part of which is curtailment of unreasonable public expenses. The most important condition of the successful cooperation program realization is transparency and accountability of the public finances.

An integral part of Ukraine’s state budget is the balance of the state-owned joint stock company Naftogaz. Unfortunately, I must state that today the company is entangled into an international corruption fraud.

The basis of the corruption scandal is the illegal transfer of public funds in the amount of $5.4 billion to shadow company RosUkrEnergo. The amount, which constitutes 10 percent of Ukraine’s national debt, will completely unbalance the public finances and lead to the bankruptcy of Ukraine’s gas transportation system. As a result, this will pose a threat to the energy stability of Europe.

The order of this shadowy international transaction has been already approved by the Resolution of the Government

Yulia Tymoshenko No. 1061, dated Nov. 15, which will go down in Ukraine’s history as the largest financial crime.

As you understand, the financial resources that are being provided to Ukraine by the IMF will in general balance subsidize and finance this crime.

Instead of the desirable curtailment of the Naftogaz deficit and relief of its dependence on the state financial support, they will be significantly increased.

Ukrainian authorities will justify their actions by the decision of the Arbitration Institute of the Stockholm Chamber of Commerce. Without questioning the court’s international authority, one must understand that it was not a legal proceeding in which Ukraine conscientiously defended its positions. There was a corruption conspiracy between the new

Ukrainian government and the shadow company, RosUkrEnergo, against Ukraine – framed behind the back of Ukraine’s people.

I would like to address to you with a proposition to send a monitoring group to Ukraine that will examine the situation before the disbursement of the next tranche to Ukraine, and to foresee in the memorandum on cooperation with Ukraine on the voluntary abandonment of the Ukrainian authorities of the financing of the corruption transaction connected with RosUkrEnergo.

During the difficult post-crisis period, it is very hard for Ukraine’s people to live, work and repay credits to IMF, which will later be transferred to mafia structures.

I know that other IMF donor countries also have difficult times after the crisis.

It would be unfair if taxpayers of the IMF donor countries finance corruption schemes on the post-Soviet space.

The fraud with public funds that is taking place simultaneously with disbursement of the IMF credit to Ukraine directly contradicts the values and essence of fund’s mission in the world.

The Ukrainian and international communities are well-informed about the activity of RosUkrEnergo and its founders, among which are some odious figures sought by the FBI. A special investigation of its activity was carried out by an international NGO Global Witness. The detailed information about its founders was also set forth in the materials published both by the Ukrainian and international media.

The Ukrainian society counts on your objective response, as well as fair, and professional actions by the IMF Board of Directors.

Sincerely yours, Yulia Tymoshenko Former Prime Minister of Ukraine

6 Business

www.kyivpost.com

December 10, 2010

Moody’s: Ukraine banks still suffer from bad loans made before crisis K Y I V P OS T S TA F F

Non-performing loans in Ukraine’s banks are set to hit 40 percent of total loans by the end of 2010, according to a major report released this week by Moody’s Investors Service.

Moody’s said the outlook for Ukrainian banks is negative because of this very high level of problem loans and banks low profitability. “Asset quality has continued to deteriorate in 2010‌ We expect problem loans (overdue loans plus restructured loans) to be a very high 40 percent of total loans at the end of 2010. This is then likely to gradually decrease in 2011,â€? said Katrin Robeck, an analyst at Moody’s and co-author of the report.

The report blamed excessive growth in loans before the crisis and Ukraine’s double-digit drop in gross domestic product in 2009 for the high level of non-performing loans. The depreciation of the hrynvia from around Hr 5

to the U.S. dollar to around Hr 8 also hit foreign-currency borrowers, which make up around 50 percent of all loans. “Another key driver of Moody’s negative outlook is that the banks’ profitability will remain weak over the coming 12-18 months. Net results have suffered severely because of high loanloss provisioning charges and declining revenues,� adds Yaroslav Sovgyra, a Moody’s vice president and senior credit officer.

If the present looks grim, Moody’s said we shouldn’t expect big improvements any time soon. Gross domestic product will recover from last year’s deep trough, but this will take time to translate into banks’ financial fundamentals “as it takes time for problem loans to be worked out and for borrowers’ creditworthiness to be improved.�

The report noted that the real estate and construction sectors – where banks have leant heavily – are lagging

ÆOn the move KATERYNA BASSOVA has

Problem loans and loan loss reserves of Moody‘s-rated banks 45%

Loal loss reserves % Gross loans

40% 35% 30% 25% 20% 15% 10% 5% 0% 2006

2007

2008

2009E

2010E

Note: Problem lons are overdue + restructured loans, 2009E and 2010E are our estimates Source: Moody’s Investors Service, banks’ IFRS reports

behind the rest of the economy, which will extend the period needed for banks to recover.

However, Moody’s analysts conclud-

ed that Ukrainian banks have enough capital to cope even with worse-thanexpected credit losses.

Deposits have once again flowed

into banks as confidence in the system improved, but Moody’s warned that confidence can quickly turn the other way, as shown by the 2008-9 crisis.

Send On the Move news to gnativ@kyivpost.com, or contact Olga Gnativ at 234-6500.

Send business photos and press releases to: news@kyivpost.com, or contact the newsroom at 234-6310.

ALEXANDER BARINOV was

become the director of Belgian-Ukrainian Business Club.

Before joining the Belgian-Ukrainian Business Club, Bassova was one of the founders and director at Logical Platform, a consulting and informational agency in the field of transport and logistics.

Bassova also worked as director of the agriculture company Granex Cherkassy, an affiliate of Belgian private group Granhold.

Her total experience includes 14 years in the transport and logistics business within Ukrainian and Belgian companies.

Bassova holds a master’s degree in transport economy from Antwerp University in Belgium and a bachelor’s degree in political science from the Institute of International Relations and Linguistics, part of the Interregional Academy of Personnel Management in Kyiv.

Problem loans % Gross loans

ROMAN BUGAIOV was

appointed chief executive officer of life:), a leading Ukrainian mobile operator.

Prior to life:), Barinov worked as vice president of the supervisory board at StarLightMedia, a television production company and sales house.

He also worked as vice president for sales at Vimpelcom Group in Russia and as general director of Ukrainian Radio Systems in Ukraine, both branches of Beeline mobile operator. Barinov broad experience includes top management positions at IBS Group, a Russian software company, Aegis Media/OKS, the Russian Association of Communication Agencies, and at DEPO Computers, a Russian computer and IT business. Barinov has a doctor of philosophy degree from Moscow State Academy of Chemical Engineering and he also holds a master’s degree from Dortmund University in Germany.

appointed a new member of the supervisory board at DTEK, Ukraine’s leading fuel and energy company.

During the last three years Bugaiov has served as a director of corporate rights and foreign asset management at System Capital Management.

Bugaiov started as an economist at System Capital Management, parent company of DTEK, and later was promoted to the position of head of the corporate rights department.

For a short period he worked at investment company Keramet Invest. Bugaiov has also worked for the Donetsk regional office of the Antimonopoly Committee of Ukraine.

Bugaiov has a master’s degree in economics and law from Donetsk Institute of Entrepreneurship.

OLGA SHUMYLOTAPIOLA has joined Carnegie Europe, the European centre of the Carnegie Endowment for International Peace, as a visiting scholar.

In her new post Shumylo-Tapiola will focus of the European Union and Russian policy toward Ukraine, Belarus, and Moldova. Prior to Carnegie Europe, Shumylo-Tapiola was director of the International Centre for Policy Studies (ICPS), a leading Ukrainian think-tank.

Shumylo-Tapiola also served in the Ukrainian government as an adviser to former deputy prime minister Hryhoriy Nemyria and to the Ministries of Economy and Foreign Affairs. Shumylo-Tapiola currently serves as deputy head of the board of the Policy Association for Open Society (PASOS). She holds a master’s degree from the Kyiv Institute of International Relations, part of National Taras Shevchenko University, and a master’s degree from the London School of Economics.

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Nation will start 2011 with two tax codes; transition expected to cause confusion

BY O L G A G N AT I V GNATIV@KYIVPOST.COM

Ukrainians will wake up on Jan. 1 next year with double vision – not necessarily as a result of New Year parties, but because there’ll be two tax systems operating.

The new tax code, adopted by parliament and signed into law by President Viktor Yanukovych this month, will come partially into force at the beginning of next year.

Businesses will have three months to adjust to rules that take effect immediately, while several more months will be granted before other changes envisioned in the recently adopted tax code take effect.

This all means that two tax systems will be working side-by-side for a while.

This transitional period, experts say, could lead to confusion, which state tax administration officials could use to their advantage.

“This will be a nightmare for accountants because during one calendar year, two laws will work, giving room for tax officials to abuse their powers,” said Oleksandr Minin from KM Partners, a law firm.

To stay safe in this situation, businesses should follow the new legislation that is clearly defined, for instance related to value-added tax. They should follow old rules in instances in which the new rules are not clear or require more explanation, such as for social payments – akin to a payroll tax – that are yet to be defined by a separate law.

The code itself has been widely criticized for benefitting larger businesses and not smaller firms.

“The tax code will benefit large businesses but effectively limit business-tobusiness activity between them and small entrepreneurs,” said Olena Bilan, chief economist at Dragon Capital.

“Amendments to the tax legislation introduced by the document are likely to produce a minor affect on budget revenues.”

Small business The privileged tax breaks for small business have been left untouched As a result, a variety of business activities performed by individuals will continue

Business 7

December 10, 2010

to be registered as individual business entities paying a small privileged tax rate. Their single tax will remain low – between Hr 20 to Hr 200.

But there was one blow for small businesses. Big businesses will no longer be able to include the costs of goods and services purchased from these private entrepreneurs and deduct the cost from their tax bills.

The old tax system allowed medium and large enterprises not only to hire entrepreneurs to perform certain work or services, but also to take advantage of this system to reduce tax payments.

Many companies employed a large number of full-time staff this way. The schemes allowed many businesses to avoid paying high payroll taxes, leaving the pension fund short of badly needed revenue. Meanwhile, the employees also got away by paying much less taxes than had they registered as full time employees.

“Now when payments to individuals registered under this system will not be tax deductible for corporate tax purposes, this will increase the cost of doing business with such entrepreneurs for companies,” said Ron Barden, partner for tax and legal services at PricewaterhouseCoopers.

Meanwhile, earnings of small business that indeed worked with big companies will significantly fall, because they will share the income tax, explained Minin from KM Partners.

Big business The tax code introduces new tax rates on profits that will be reduced from the current 25 percent to 23 percent in 2011 and further to 16 percent in 2014. However, experts said the nominal tax rate does not reflect the so-called effective tax rate, which is considerably higher.

The effective rate depends on how a company defined its gross business expenses and what amount of income is left for taxable profit. The list of expenses that can be credited to the total gross costs was never identified clearly, allowing lots of room for maneuver for entrepreneurs, as well as tax administration.

“Regulatory authorities and businesses had different ways to determine the list and amount of expenses that

may be tax deductible,” said Volodymyr Kotenko, partner and head of tax and legal practice at Ernst & Young in Ukraine.

While firms could artificially increase their gross costs, so as to declare a smaller profit to be taxed, tax authorities could at any time and for any reason disagree with the declared data.

The tax code now provides for limited deductibility for a range of service payments to non-residents – up to 4 percent of prior year net revenues and a 4 percent limit on royalty payments to non-residents.

“These two issues were of major concern for investors and the limits may still impact the overall cost of doing business, but not excessively, especially with the reduction in the corporate tax rate from 25 percent to 23 percent,” Barden said.

Social payments Social payments on salaries, the socalled payroll payments made by employers, which largely go to the state pension fund, remain high. It is expected to be addressed in upcoming pension reform efforts, but officials have not said if they plan on reducing the current rates charged, which can reach 40 percent. As a result, many employers will in the near term continue to prevent employees from revealing their true salaries, keeping them in the shadows.

“Currently every wage (up to an established cap) the employer pays triggers roughly at least 40 percent (or more, depending on the industry) of social contributions to the revenue. Add 15 percent personal income tax that the employer is liable to withhold from the salary and you will see how expensive it is to pay ‘white’ wages”, said Kotenko.

“Also consider that starting January 1 2011 17 percent will apply to the salary exceeding 10 minimum wages,” he added.

This all makes it very expensive to pay wages legally, concluded Kotenko.

Handling taxes The relationship and powers of tax administration and taxpayers remains unchanged by the new tax bible.

That’s hardly good news, given

Key changes in new tax law Tax Corporate profit tax

Current status 25 percent

Adopted changes 23 percent from 2011 21 percent from 2012 19 percent from 2013 16 percent from 2014 10-year tax holidays for the light industry, hotels, aircraft makers, shipbuilders and producers of agricultural machinery; 5-year tax holidays for small businesses and startups

VAT

20 percent

17 percent from 2014; automatic VAT refunding for eligible companies; the government faces fines in case of delaying refunds; ; zero rate for agro producers and exporters (excluding trading companies)

Personal income tax 15 percent

15 percent for monthly incomes below 10x minimum wage (Hr 9,220 as of Dec. 1); 17 percent for monthly incomes above 10x minimum wage

Excise taxes on oil products

No changes in Tax Code but parliament earlier approved 38-40 percent hikes effective 2011

Excise taxes on alcohol and tobacco

No changes in Tax Code but parliament earlier approved a 7 percent increase effective 2011 (not applied to beer producers)

Oil royalties

40 percent hike from 2011

Gas royalties

18.5 percent hike from 2011

Simplified Taxation Regime (STR) for small businesses

No changes in rates and thresholds; costs of goods and services purchased from entrepreneurs using STR (except IT services) by companies subject to general taxation regime are no longer tax deductible

Fixed agricultural tax, special VAT regime for agro producers*

No changes

Tax on interest earned on bank deposits

5 percent from 2015

Property tax

Progressive rate ranging from 0 percent to 2.7 percent of the minimum wage per square meter applied depending on taxable property area from 2012

Note: *agro producers retain VAT in their bank account to use for CAPEX and production needs.

Source: Dragon Capital

that the World Bank’s annual Doing Business report confirms that Ukraine’s tax environment is far from friendly.

In 2001 Ukraine ranked 181 out of 183 countries for ease of its tax system.

The World Bank counted 135 tax payments per year in Ukraine, which take up 657 hours per year, almost 56 days. The total amount of taxes paid reach 55.5 percent of a business’s profit.

Barden from PricewaterhouseCoopers said the consolidation of financial and tax accounting should reduce the administrative burden.

This change, along with the consolidation of pension payments and filings, should significantly improve Ukraine’s ranking.

“All things being equal, Ukraine could be one of the most improved

countries in 2011,” he added.

Other experts are less optimistic.

In particular, requirement to provide documentary support for accounting remains in force. This means that you will need to provide proof of payment of all taxes and charges, documents and agreements on reporting.

Also the tax code leaves unclear in what cases tax officials can refuse to accept declarations and reports and doesn’t set the responsibility for abusing this.

“The requirement of documentary proof for accounting, like payments, charges, reports and agreements, makes the bureaucracy of reporting taxes more complicated,” said Minin from KM Partners.

Kyiv Post staff writer Olga Gnativ can be reached at gnativ@kyivpost.com.

Tax protests fizzle out, but organizers plan to launch new ones on Jan. 22

BY K AT YA G R U S H E N KO and PETER BYRNE GRUSHENKO@KYIVPOST.COM and BYRNE@KYIVPOST.COM

Rallies against adoption of the new tax code fizzled out by Dec. 6, days after parliament passed an amended version of the bill which left the single flat tax in place that benefits millions of small entrepreneurs.

The compromises represented a victory for small-and medium-sized entrepreneurs who rallied nationwide to demand that President Viktor Yanukovych veto the bill.

Yanukovych didn’t completely scrap the bill, as many protestors hoped. But after meeting with them, he sent the bill back to lawmakers on Nov. 30, urging parliament to adopt changes that preserve tax breaks for small businesses.

The changes, including a reduction in the powers of tax authorities, were adopted on Dec. 2. One day later, police cordoned off Kyiv’s Independence Square and dismantled a half-dozen protest tents erected by demonstrators.

Some protest organizers said saw the developments as a victory. Others insisted protestors had been duped by the president, who sought to swiftly defuse their protests by temporarily preserving tax privileges for small businesses.

Protesters who wanted to carry on with rallies warned that the revised tax code still had many clauses that were bad for small businesses. Moreover, they said that Yanukovych’s administration made no promises to keep tax privileges for small businesses in place over the long term.

But only several hundred protesters

turned out on European Square on Dec. 6 to press their demands, which include a complete overhaul of the tax system, the dismissal of government and parliamentary elections in 2011 rather than 2012.

At their height, crowds of up to 20,000 people gathered across the country in prior weeks. The rallies were the largest demonstration of dissent since Yanukovych since he narrowly won a presidential contest in February.

At the Dec. 6 rally, a small group of protesters was flanked by members of ex-Prime Minister Yulia Tymoshenko’s minority opposition faction in parliament. Oleksandr Danylyuk, head of the All-Ukrainian Center for Business Support, promised to organize fresh protests starting Jan. 22, Ukraine Collegiality Day, which marks the

founding of the Ukrainian National Republic in 1918.

But other tax code protesters said enough was enough.

Vasyl Popik, head of the taxi drivers trade union with 50,000 members across Ukraine, said his group was satisfied with changes made to the tax code to ease the burden on small business.

“The tax code protest has turned political,” Popik said. “The tens of thousands who demanded President Yanukovych veto the bill initially were interested in economic freedom more than political colors. I think that the government has heard us. I’m not completely satisfied with the changes that the government adopted, but some important concessions were made. We can still initiate changes in the tax code, so I would rather now work on a draft law to improve the situation

rather than continue on with protests.”

A recent poll by a Kyiv-based pollster, Social Monitoring Center, shows that more than 90 percent of entrepreneurs nationwide supported the demands of the month-long protests. Almost 70 percent of those surveyed said they wanted Yanukovych to veto the bill.

Both Danylyuk and Popik, along with the other protest organizers, were called in for questioning by Kyiv police about alleged violations for erecting a protest camp on Independence Square on Nov. 22. The Kyiv State City Administration’s utilities service said it will cost about $25,000 (Hr 200,000) to replace granite slabs damaged when protesters pitched their tents on the square.

Kyiv Post Staff Writers Katya Grushenko and Peter Byrne can be reached at grushenko@kyivpost.com and byrne@kyivpost.com.

8 Business

December 10, 2010

Ukraine, Russia set gas volumes High-speed trains will start running in 2012

(Reuters) – Russian gas exports to Europe via Ukraine will be no less than 112 billion cubic meters a year for the next five years, according to newly signed amendments to gas contracts, Ukraine’s fuel minister said on Dec. 2.

Energy Minister Yuriy Boiko told a Russian-Ukrainian energy conference that the amendments had been signed this month by Ukrainian staterun energy firm Naftogaz and Russian gas giant Gazprom.

“We have … signed a new deal that 112 billion cubic meters of gas will be transported via our country annually during the next five years,” Boiko said. “It is a great compromise. For the first time since January 2009, we have reached some certainty about the volumes of gas transit for the next five years.”

Russia plans to pump 110-116 billion cubic meters (bcm) of gas through Ukraine this year, up from 96 bcm in 2009.

In January 2009, a price row between Moscow and Kyiv halted Russian gas flows to Europe for about two weeks, tarnishing Russia’s image as a reliable exporter and spurring a European quest for new suppliers.

After the row Russia has looked forward to new pipelines, which might sharply reduce the role of Kyiv as the major supplier of Russian gas to Europe.

Russian Prime Minister Vladimir Putin arrives aboard the Solitaire ship in the Finnish Gulf, some 200 kilometers west of St. Petersburg, on Sept. 20.

Putin said work on construction of the Nord Stream gas pipeline is making scheduled progress. The Nord Stream pipeline is a new route for Russian gas exports to Europe, linking Russia to Germany and bypassing Ukraine. (AFP)

The 55 bcm/year Nord Stream pipeline under the Baltic Sea is expected to bring more Russian gas to Western Europe, bypassing Ukraine by the end of next year.

Russia is pushing on with its South Stream project to bring up to another 63 bcm under the Black Sea via the Balkans. It could cost 10 billion euros.

The European Union is also champi-

oning the 31 bcm alternative Nabucco plan that would bring Caspian and Middle East gas via Turkey, excluding Russia.

Ukraine, which wants to protect its transit revenue of about $1 billion a year, is trying to persuade Russia to scrap plans to build the new South Stream gas pipeline as part of negotiations with Gazprom.

Ukraine extends $2 billion loan (Reuters, Kyiv Post Staff) – Ukraine is extending by six months the term of a $2 billion loan from Russia’s VTB, a Ukrainian deputy finance minister said on Dec. 8.

“We have extended the VTB loan under the same conditions,” Andriy Kravet told Reuters.

Ukraine took the six-month bridge loan from the Russian state bank in June to help the government plug holes in the budget.

The funds were originally supposed to support the country’s finances until it reached an agreement with the International Monetary Fund. The Washington-based lender signed-off

on a $15 billion standby facility, but experts said delays in the second tranche have led to the decision to extend the VTB loan.

“I think that as soon as we get the IMF money, we’ll start to pay off the loan,” said Oleg Ustenko, executive director of the Bleyzer Foundation.

Government extends grain export quotas (Kyiv Post Staff) – The government on Dec. 8 extended restrictions on the export of grain until the end of March and increased export quotas, the agriculture minister said Wednesday.

Minister Mykola Prysyazhnyuk said after a government meeting that quotas on wheat would be increased by 500,000 metric tons and on corn by 1

million tons.

The limits on exports, brought in after a poor harvest, had previously been set to expire at the end of December and covered 2.7 million tons of grain.

Experts said the quotas would hit Ukrainian producers hard, but keep food prices lower.

“Prices on the domestic market remain very low. The market is almost dead,” said Maria Kolesnyk, an analyst at Consulting Agency AAA. “The procedure for distributing the previous quotas was not at all transparent, and traders only lost because of that, but the people who lost most are the producers.”

(Kyiv Post Staff) – The government has approved plans to purchase up to 10 high-speed trains, which will provide rapid travel between Kyiv, Donetsk, Kharkiv and Lviv, to come into service in 2012.

The trains, manufactured by South Korean company Hyundai, will cut travel times ahead of matches in the European soccer championship in 2012, which will be hosted in those cities.

Deputy Prime Minister Borys Kolesnikov said journeys from Kyiv to Donetsk will be cut to five hours and 30 minutes, Donetsk to Kharkiv to one hour and 50 minutes, Kyiv to Kharkiv to three hours and 30 minutes, and Kyiv and Lviv four hours and 30 minutes. The cost of the 10 trains could reach 240 million euros.

Borys Kolesnikov

Scottish vodka will fill Ukrainian glasses soon (Kyiv Post Staff) – Local connoisseurs will soon get a taste of a single malt vodka from Scotland, famed for its whisky, after Valt Vodka won a contract to distribute in Ukraine.

The vodka is produced from Scottish barley and water from the River Spey in northeast Scotland.

The company claims the vodka is the only single-malt version of the drink available because of the

expense involved in the production process. Single malt means it is made from one type of malted grain and distilled at one particular distillery.

Oliver Storrie, Valt Vodka’s operations and sales manager said Ukrainians were skeptical at first about the vodka. “It’s like telling a Scotsman about whisky,” he said.

RosUkrEnergo pays for disputed gas (Kyiv Post Staff) – Gas tycoon Dmytro Firtash said that RosUkrEnergo, which he co-owns with Russian state energy giant Gazprom, had settled a $1.7 billion debt to Ukrainian state energy firm Naftogaz.

The settlement was part of a deal struck between Swiss-registered gas trader RUE, Naftogaz and Gazprom earlier in December. An international arbitration court earlier ruled that Ukraine must return 11 billion cubic meters of gas, appropri-

ated as part of a complex deal with Gazprom in January 2009, plus penalties.

RUE paid Naftogaz a further $450 million for transit and storage of the gas since January 2009, Firtash said in an interview with Focus magazine.

The trader also settled a $810 million debt to Gazprom.

The 12.1 billion cubic meters that RUE will receive will be sold to Gaprom and then exported to Europe, Firtash added.

ISTIL Group joins U.S.-Ukraine Business Council K Y I V P O S T S TA F F

The ISTIL Group, the Kyiv-based company that publishes the Kyiv Post, has become the 150th member of the U.S.Ukraine Business Council, an organization in Washington, D.C. that lobbies for businesses in Ukraine.

The U.S.-Ukraine Business Council was founded in 1995 and, in the early years, had fewer than 20 members.

The current roster of 150 members is an organization record, part of the significant growth that has taken place since 2005.

The organization is the largest nonUkraine based business trade association and calls itself the “most effective” as well. More information about the U.S.-Ukraine Business Council can be found at www.usubc.org.

The ISTIL Group is a private equity investment company that actively invests in media and entertainment, real estate, production of television content, production and distribution of films, energy

and environment, banking, hotels, consumer goods and other assets. ISTIL’s investment in Ukraine will exceed $150 million by the end of 2010.

In addition to the Kyiv Post, which the ISTIL Group purchased last year, other acquisitions include the Leipzig Hotel building in Kyiv, business centers in Kyiv, Odessa and Donetsk, and the ISTIL Studios production house.

Mohammad Zahoor is the founder and main owner of the ISTIL Group.

Born in Pakistan, Zahoor would go on to create one of the most modern and efficient steel plants in the former Soviet Union, which he would sell at the peak of its development in 2008. He first arrived in Ukraine in 1974, eventually to study metallurgy at Donetsk Technical University. He completed his doctorate from Donetsk Technical University in 2007.

The Kyiv Post, Ukraine’s leading English-language newspaper, was founded on Oct. 15, 1995. During its 15-year existence, the newspaper has

E. Morgan Williams

Mohammad Zahoor

served as the top source of independent news for for the foreign community in Ukraine and those interested in the nation living abroad. Last summer, a year after the ISTIL Group bought the Kyiv Post, the newspaper launched a Ukrainian and Russian version of its English website at www.kyivpost. ua. The news site is in addition to

the newspaper’s print edition and its English-language website.

“I met recently in Ukraine with Jim Phillipoff, media and telecom director of ISTIL, and Brian Bonner, chief editor for the Kyiv Post. I have been very impressed with what Jim and Brian have accomplished since the ISTIL Group took over the Kyiv Post

in late July 2009,” said E. Morgan Williams, the president and chief executive officer of the U.S.-Ukraine Business Council. He also serves as the director of government affairs in the Washington office of SigmaBleyzer Private Equity Investment Group.

“We discussed a variety of ways the Kyiv Post and the U.S.-Ukraine Business Council could work together to promote Ukraine as a place to do business with the international business community, to tell the story of business opportunities in Ukraine and to provide information on what needs to be done to improve the business environment,” Williams said. “USUBC is very pleased to have the ISTIL Group/Kyiv Post as the 150th member and look forward to working with them.”

For more information about the Kyiv Post go to www.kyivpost.com. The ISTIL Group website is www.istilgroup. com. The ISTIL Studios site is at www. istilstudios.tv.

www.kyivpost.com

Business 9

December 10, 2010

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 MARCIN SWIECICKI

Lifting ban on farmland sales will bring economic benefits President Viktor Yanukovych’s economic program for 2010-2014 names the absence of a market for buying and selling agricultural land as one reason why the nation is unattractive for investment.

Many agriculture and investment experts agree.

The prospect of giving more rights to 6.9 million owners of land plots spurred defenders of the status quo, such as Michael Lee in his column “Nation should not be in rush to lift moratorium on sale of farmland” (Kyiv Post, Nov. 12, 2010).

In this article I will try to address the arguments Lee gave in defending the existing moratorium on agricultural land sale.

He argues that “in many cases” landlords will not spend lump-sum cash payments wisely; therefore it is better for them to receive “a regular annual payment made every year.”

A further argument presents foreign companies renting land like charitable organizations spending their dividends “on tractors and fertilizers,” whereas companies that would own the land would apparently behave as greedy capitalists transferring profits abroad.

He argues also that landowners can “kick out” a foreign investor who uses fertilizers and chemicals in inappropri-

ate way. If the land is sold, “who can predict what farming practices will take place in the future?”

Lee frightens landlords. According to him, the current system increases “the total amount of investment coming to the country” since small investors do not need to buy land. He ends by providing the example of the United Kingdom having harvest yields several times higher than in Ukraine, despite the fact that in U.K. most “farm businesses ... do not own the land.”

I disagree with the analysis and believe that the termination of the moratorium, together with the adoption of proper regulatory laws, will produce many positive results for owners as well as for the national economy.

The moratorium infringes on the ownership rights of some 7 million small landowners. Let them decide what option is better: to sell the land or to continue the renting it out to somebody else. Otherwise, Ukrainians will remain in communist reality, where they possess but do not dispose of the property.

There are a lot of old people who would prefer to sell their land and move closer to their children living in cities or buy medicines or to do other things with their proceeds. The state should provide a legal framework and

help the citizens by assisting auctions for land, providing public information about all land transactions and ensuring an efficient land register so that the new owner will feel secure and will be willing to pay more.

Keeping the ban under the pretext that this is in the best interest of the owner is morally dubious. It harms millions of rural inhabitants, since most of them do not have the professional knowledge and physical means to farm.

A number of the land plots either remain idle or are rented by big companies almost free of charge. Unable to sell their land, millions of citizens feel abused.

Lifting the moratorium will provide owners with an additional option to renting their property. Lifting the moratorium will boost rents. Present rents are low, estimated at 260 hryvnias ($33) per year per hectare, which is very beneficial for large companies.

Furthermore, ownership of a land plot is usually the only valuable asset that landowners could use as collateral to get loans from banks. But the moratorium prevents this as banks cannot accept non-tradable assets as security for loans. Therefore, millions of landowners cannot get loans to launch their agricultural business or

obtain start-up capital for other nonagricultural ventures.

The Ukrainian Institute of Agrarian Economics estimates the total value of Ukraine’s agricultural land at $59.2 billion.

The absence of an agricultural land market makes it impossible to verify this amount, but it is many times more than all the investments into primary farming in the last decade.

From 2001 to 2006, this figure was estimated at only $3 billion. Agriculture is therefore heavily underinvested. In addition, the introduction of agricultural land mortgages will work to reduce interest rates and make lending more accessible for small- and medium-sized farms.

The lack of a land market makes Ukrainian agriculture even less attractive for investors. If the moratorium had played a favorable role in attracting investors, why are other countries not introducing it? I do not think that Lee believes that United Kingdom agriculture would become more prosperous by introducing a moratorium on trade in land. It is prosperous due to many reasons including, first of all, the honoring of ownership rights.

Keeping land in good condition requires long-term interest and engagement through investments such

as in irrigation, storage and machinery.

When owned, the soil is treated much better than when rented. The state and quality of agricultural soils in Ukraine have dramatically deteriorated in recent years. Lifting the moratorium and hence owning the agricultural land should increase the interest of the owner in keeping the soil fertile and environmentally sound.

The orchestrated delay in launching the agricultural land market precludes the optimal re-allocation to more efficient users. Only a viable market mechanism can ensure the best results for the national economy in terms of productivity. In the meantime, restrictions are provoking the development of a shadow land market, to the detriment of general welfare.

Marcin Swiecicki is a former minister for foreign economic relations of Poland and co-author of the Polish stabilization plan and sweeping economic reforms from 1989 to 1991. Since 2007, he has been director of the Blue Ribbon Analytical and Advisory Centre (BRAAC), a project funded by the European Union as well as co-funded and implemented by United Nations Development Program.

The opinion presented in this article is that of the author and does not necessarily reflect the views of the EU, UNDP or any other UN agency.

In case you missed them, read the last five Business Sense columns by experts online at kyivpost.com Dec. 3 with Sergey Kuun, oil and fuel market expert at A-95 Consulting Group: “Import schemes in energy market cost state dearly”

Nov. 12 with Michael Lee, independent agricultural specialist: “Nation should not be in rush to lift moratorium on sale of farmland”

Oct. 22 with Dario Marchetti, chief executive officer of Danone Ukraine: “Helping milk-producing ‘babushkas’ organize”

Oct. 8 with Michael Willard, chairman of Willard, a public relations and advertising company: “Paying for news only feeds corruption”

Oct. 15 with Nataliya Mykolska, senior associate at Kyiv-based law firm Vasil Kisil and Partners: “Businesses should be more proactive to benefit from WTO”

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December 10, 2010

Nalyvaichenko: No ‘mafia state’ here

Æ1 ing one of the “mafia states” arising on Europe’s eastern border.

But the former head of the Security Service of Ukraine, known as the SBU, repeatedly disputed the assertion that Ukraine had degenerated into a “mafia state.” Nalyvaichenko also stressed that during his years at the helm of Ukraine’s security agency, he found no ties linking Mogilevich with Firtash, or RosUkrEnergo.

Kyiv Post: How much have the WikiLeaks leaks shaken up Ukraine?

Nalyvaichenko: As someone who worked as a diplomat for more than a decade, three years in the security service, then as the head of a non-government organization and now leading a political party, my response to this question may not be typical.

Put simply, in this day and age, it is almost impossible for politicians, bureaucrats to keep secrets. Moreover, most of the information I was privy to as head of the SBU [from May 2006 – January 2010] is today accessible globally to anyone. The Internet has changed everything. People these days have access to any document posted to the Internet and the ability to hold its authors to account. And this is a good thing.

I recall [former presidential guard Mykola] Melnychenko and his recordings. Former President Leonid Kuchma (1994-2005) threatened to dismiss me for failing to arrest him when he showed up [in 2003] at the Ukrainian Embassy in Washington. Kuchma and [then former Presidential Administration chief Viktor] Medvedchuk wanted him arrested. Then, as consul, I welcomed him, as I would any other citizen of Ukraine. That experience, the recordings scandal and today’s WikiLeaks revelations, have only deepened my conviction that individuals who make information available publicly are not the criminals. The criminals are those, including politicians who conspire to commit illegal acts, behind closed doors and lie to the public.

Ukrainians today should sleep soundly. They have access to the same information the head of the State Security Service was privy to during my tenure.

The activities of former governments have been exposed forever, along with the people who headed them.

KP: Are you worried that conversations you may have had with U.S. officials could be the subject of subsequent leaks?

VN: Quite the opposite. I have already spoken out publicly about the issue because some have misconstrued deliberately information contained in the cables already posted to the Internet. Even if my conversations with U.S. officials are published in their entirety, they won’t differ from what we are talking about now. The SBU worked with its American partners.

The last two U.S. ambassadors to Ukraine were fully aware of the extent of our cooperation. I am not worried.

KP: In the WikiLeaks documents, Ukraine and other countries on Europe’s eastern borders have been described by a Spanish foreign diplomat who was talking with U.S. officials as “mafia states.” Do you see it this way?

VN: I do not think Ukraine is a mafia

Valentyn Nalyvaichenko, the former head of the Security Service of Ukraine, during a briefing in Kyiv on April 14, 2009. (PHL)

KP: You must have had information as head of the SBU that such a meeting took place, no?

VN: Not necessarily. We carried out Yushchenko’s order to report any involvement by Mogilevich in the gas sector. The president also directed us to find out who, namely, was behind RosUkrEnergo and we complied. We received and reported information at the end of 2008 that a new gas intermediary company was being incorporated in Zug, Switzerland, to replace RosUkrEnergo. Top government officials at the end of 2008 with ties to ex-President Leonid Kuchma administration were involved.

KP: Who? VN: Let’s see. Maybe the information will come out on WikiLeaks.

state. Endemic corruption among state officials and bureaucrats today is the biggest threat to Ukraine, just as when I headed the SBU. The Soviet-style type of graft afflicts the entire bureaucracy and prevents implementing the changes required for Ukraine to integrate with Europe. I think it’s going too far to call Ukraine a mafia state because criminals are not in charge of running the county.

KP: But we see in the WikiLeaks cables that U.S. officials were very curious about the relationship between organized crime groups and Ukrainian officials in the super lucrative natural gas business, where geopolitical interests among Kyiv, Moscow

al and technical information about Mogilevich were destroyed unfortunately before I came to the SBU. Yushchenko instructed me to reconstruct the dossier when I took charge of the SBU in December 2006. And we did so, presuming upon ourselves and with the help of foreign intelligence agencies, especially the U.S. Federal Bureau of Investigation. We established that no one in Yushchenko’s inner circle had any connection with Mogilevich.

KP: But according to WikiLeaks, former U.S. Ambassador to Ukraine William Taylor wrote [on Dec. 8, 2008] in his cable to Washington that upon meeting with billionaire Dmytro Firtash,

Æ “Endemic corruption among state officials and bureaucrats today is the biggest threat to Ukraine, just as when I headed the SBU.” and Europe are also at play. In your talks with U.S. officials, did you experience a strong interest in this specific issue?

VN: This was one of our priorities my priorities as acting head of the SBU for three years. [Former President Viktor] Yushchenko instructed me from the start to ensure [reputed organized crime boss Semen] Mogilevich was in no way involved in Ukraine’s natural gas business. U.S. officials, as well as other governments, were very interested in Mogilevich and his possible involvement in the gas business.

This was an issue that we, first and foremost, were interested in.

KP: Did you find any evidence that Mogilevich was involved?

VN: Records containing operation-

head of RosUkrEnergo, Firtash admitted to seeking permission from Mogilevich to do business.

Moreover, Firtash described himself as a “close friend” of Yushchenko. Firtash is also reported to have said that he was working to form a political alliance between the president’s [Our Ukraine] party and [Viktor] Yanukovych’s Party of Regions.

VN: I am talking about what I did from 2007 to 2010. During this period, none of the individuals you mentioned was in contact with Mogilevich, including Firtash. And Yushchenko knew this. I can’t speak about what transpired before 2007. I think the order to destroy the Mogilevich dossier was a mistake, if not a criminal offense. But this is not the end of the story. The

SBU’s foreign partners, including U.S law enforcement, went as far as to ask that individuals involved in Ukraine’s gas trade, intermediaries, including representatives of [ex-prime minister] Yulia Tymoshenko’s [gas trading company from the 1990s] United Energy Systems of Ukraine. There was summoning and questioning.

I think the reason why the Mogilevich dossier was destroyed in 2005 [when Tymoshenko’s right hand man Oleksandr Turchynov was head of the SBU] is because the files contained information about intermediaries, namely United Energy Systems of Ukraine and Ukrainian government officials and their role in the gas trade.

KP: Such as Ihor Fisherman, who the FBI considers to be Mogilevich’s close associate and who worked as an adviser to Prime Minister Pavlo Lazarenko in the late 1990s when Tymoshenko was a political ally of Lazarenko and head of a very lucrative gas trading business called United Energy Systems of Ukraine?

VN: Exactly. [Petro] Kirichenko, Lazarenko, etcetera.

KP: So, then is there evidence to show that Mogilevich has been deeply involved in natural gas sales to Ukraine and other countries in the region?

VN: I can only say that Mogilevich was not involved when I headed the SBU from 2007-2010. No one with ties to Mogilevich was involved in Ukraine’s gas sector during this time.

KP: But according to US Embassy cables leaked by WikiLeaks, former U.S. Ambassador to Ukraine William Taylor says that, in late 2008, when he met with Firtash, that Firtash admitted that he met Mogilevich in Kyiv in prior years, and feared that he would not walk out of the meeting alive.

VN: That’s a question you should ask him. I was not in charge of the SBU at the time and don’t have reliable information.

KP: But isn’t this one of the biggest problems with the country, that politicians are repeatedly making empty accusations without revealing the full details. And no one gets prosecuted in court.

So, at the end of the day, accusations are flying in all directions, but no one reveals all their cards.

Maybe they are all involved, all have something to hide?

VN: Perhaps. But if the Mogilevich dossier had not been destroyed, and if the SBU had continued its cooperation with the FBI and intelligence agencies, the investigation would have resulted in subpoenas and a court trial. Believe me. The case would have been under the purview of the General Prosecutor’s Office, headed by Sviatoslav Pyskun. I was present at meetings when he said people should be called in for questioning because the Mogilevich dossier was destroyed.

KP: Why do you think your predecessor, Oleksandr Turchynov, Yulia Tymoshenko’s right-hand man, destroyed those documents?

VN: Isn't it obvious? I was a diplomat at the time. What we found most disturbing was that documents relating to United Energy Systems of Ukraine and government officials were destroyed before I took the helm at the SBU in 2007. The documents showed how funds for gas purchases were sucked out of the budget and transferred abroad. We call it money laundering.

KP: Why do you think Tymoshenko wanted these documents destroyed?

VN: This is a question you should ask her.

KP: Was the destruction of the Mogilevich dossier a crime?

VN: Oleksandr Turchynov and [his deputy] Andriy Kozhemyakin did not personally destroy the documents. They gave the order for them to be destroyed. Prosecutor General Oleksandr Medvedko at the time opened a criminal investigation, but nothing ever came of it. The files destroyed contained operational information [relating to Mogilevich’s and United Energy Systems, as well as top government officials’ role in the gas trade].

KP: Were the files compiled during former Leonid Æ11

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News 11

December 10, 2010

Former SBU chief: RosUkrEnergo ‘not as transparent as it should have been’ Æ10 Derkach’s time as SBU chief [1998-2001]?

VN: No. I think most information came from when Ihor Smeshko headed the agency [2003-2005].

KP: Could it be that former SBU chiefs were gathering information on the gas sector when Kuchma was president to show that Tymoshenko was engaged in criminal activities?

VN: You would have to ask them.

When I headed the agency, the focus was on money laundering and Mogilevich. These were the priorities in our oversight of the gas sector. We also were instructed to make sure that officials from government were not connected with shady gas trade.

KP: Were U.S. authorities inquiring more about Tymoshenko’s involvement in the gas trade, or about Firtash’s role?

VN: They were most interested in money laundering allegations and Mogilevich. We were prepared to arrest him if he set foot on Ukrainian territory.

KP: Was Yushchenko a close friend of Firtash?

VN: I don’t know.

KP: Did you ever ask Yushchenko?

VN: I never saw Firtash during my tenure at any government meeting or private meeting with Yushchenko, whom we briefed fully on all participants in Ukraine’s gas sector.

KP: U.S. officials who authored the cables published by WikiLeaks noted that Mogilevich reportedly controlled Russian gas exports to Ukraine and the region. If true, and if Mogilevich was acting in this capacity with Moscow’s permission, wouldn’t this be a threat to Ukraine’s national security?

VN: Of course.

KP: Wouldn’t it also be a threat if the proceeds from the gas trade were being funneled to pro-Moscow parties in Ukraine, those friendly with the Kremlin?

VN: This is something we were very

Æ “The case would have never come to trial if Ukraine was a mafia state.”

Æ “I don’t see evidence that the country’s top leaders have left the gas trade.” concerned about. There were such organizations, one in the Crimea with only a dozen members, which received hundreds of thousands of dollars in financing.

KP: As head of the SBU, or now as a politician and a Ukrainian citizen, don’t you find it suspicious that Firtash, who made big profits in the gas business, had ties to Mogilevich and reportedly backed Yanukovych’s Moscowfriendly Party of Regions?

VN: I don’t know that Firtash has funded the Party of Regions. As for what Putin said, I refer to what I said earlier: that the SBU learned in late 2008 of an attempt by former top government officials in Kuchma’s administration to incorporate a successor to RosUkrEnergo. And we did our best not to let it happen.

KP: What would have been corrupt about that intermediary?

VN: The same thing as before: the lack of transparency.

KP: Are you saying that the arrangement involving RosUkrEnergo is not transparent?

VN: Russia and Ukraine should strive to come up with a more transparent arrangement for purchasing natural gas and do everything to limit the involvement of intermediary companies in the gas trade. The arrangement with RosUkrEnergo was not as transparent as it should have been, both from the Ukrainian and Russian sides.

KP: What’s the difference between being not transparent and corrupt?

VN: It’s important who the founders of any intermediary company are, where the money comes to found the enterprise, how it is structured, the gas Reputed Russian organized crime boss Semyon Mogilevich in a 2002 file photo.

(UNIAN)

price, and the formula for deriving it.

Businessman Dmytro Firtash (L) in Kyiv on Dec. 1, 2007. (UNIAN)

KP: And who in Ukraine decides which gas intermediary to use?

VN: In Ukraine, the decision is taken by the prime minister.

Æ “Individuals who make information available publicly are not the criminals. The criminals are those, including politicians who conspire to commit illegal acts, behind closed doors and lie to the public.”

KP: How much does the Russian side have in who the intermediary is?

VN: As far as RosUkrEnergo goes, Vladimir Putin and Kuchma in July of 2004 agreed on using this intermediary.

KP: Many top officials in the Yanukovych’s inner circle have close ties with RosUkrEnergo, including Presidential Administration chief Serhiy Lyovochkin, who admits to being close friends with Firtash and Igor Fursin, another co-owner of RosUkrEnergo, and Energy Minister Yuriy Boyko, who was on the coordination committee of RosUkrEnergo. Do you see any conflicts of interest here?

VN: That’s a question you should address to Ukraine’s currently lawenforcement authorities. I can only tell you what I knew as SBU chief from 2007-2010, working without the Mogilevich dossier. Our efforts were directed at preventing money laundering and reconstructing the dossier. I didn’t know who was partnering with whom.

KP: You didn’t know about Firtash and his connections?

VN: From 2007-2010, Firtash and Mogilevich were not in contact with one another and were not business partners. We would have found out if they were.

KP: Did you know that Firtash and Mogilevich were de facto business partners through asso-

ciates before 2007. Did you know that they were joint shareholders – through wives and associates – in firms such as Rinvey and HighRock properties? These connections were reported in detail by the Financial Times some years ago.

VN: No comment.

KP: If it’s the case that Firtash was indeed a business partner of Mogilevich, it couldn’t have been by chance, could it?

VN: Maybe. I can only talk about subjects where I can be helpful, that is, about my role as SBU chief from 20072010 … about money laundering and reconstructing the Mogilevich dossier. I can’t comment on everything.

KP: Wasn’t it a concern that an individual who was linked via companies with Mogilevich controlled so much of the supply of gas to Ukraine?

VN: I don’t think that Firtash controlled so much. I think this might be an exaggeration. I don’t know how the gas trade worked under Kuchma. I would have to consult people who do.

I can just answer for what it was like under my watch.

KP: But you believe the dossier destroyed by Turchynov showed links between United Energy Systems of Ukraine and Mogilevich.

VN: Yes. KP: Let’s go back to the beginning of the interview when I

asked whether you think Ukraine is a mafia state. Someone seems to not be telling the truth here. Was Mogilevich close to Tymoshenko’s gas trading company from the late 1990s, or RosUkrEnergo, or with both? You say that Mogilevich was linked to Tymoshenko’s firm. If true, then this alone suggests that organized crime has played a leading role in the past with connections to the highest of officials and most import sectors of the economy, such as energy and gas.

VN: Yes. It points to corruption at the highest levels of government.

This is why I say that trade in gas and energy should be completely separated from politics. Political parties and politicians should not be engaged in the trade of natural gas. This is one of the reasons I joined Our Ukraine, a political party that has nothing to do with gas. The temptation is so great, the profits are so huge, and the gas schemes are so complicated that no one from the European Union wants to get involved. The gas trade must be completely removed from politics.

KP: Do you think the country’s current top leadership, President Viktor Yanukovych’s team, shares this view? Are they separating the gas trade from politics?

VN: I don’t know. You should ask them. I don’t see evidence that the country’s top leaders have left the gas trade.

KP:

So, I’m asking you Æ12

12 News

www.kyivpost.com

December 10, 2010

Former SBU chief: Make trials public Æ11 again: do you think Ukraine is a mafia state?

VN: No. Various political forces compete against one another. There is an opposition, non-governmental organizations, and several independent media. That’s why my answer – no.

KP: As a citizen or as a politician, do you think there is enough evidence to charge former Ukrainian President Leonid Kuchma and current Parliament Speaker Volodymyr Lytvyn (presidential chief of staff under Kuchma) in the murder and/or cover-up of the murder of journalist Georgiy Gongadze?

VN: As head of the SBU, I spent a lot of time and effort to locate and arrest [former police general] Oleksiy Pukach for carrying out the murder. We found Pukach, incarcerated him, and I am very happy the case is finally coming to trial.

As a citizen, I demand that he has his day in court in a public trial. When we captured Pukach, one of the first things he said was, “I am ready to name the people who ordered me to carry out the killing.”

I want an open trial and for Ukrainians to hear from the militia general who, namely, ordered him to carry out the killing. The people he says gave him the orders to commit the crime should be questioned by state prosecutors.

KP: The lawyer for Gongadze widow, Valentyna Telychenko, says Pukach implicated Lytvyn and Kuchma in the murder and cover-up. Secret recordings made in Kuchma’s office, the so-called Melnychenko tapes, appear to support the allegation. And there was obviously a cover-up, no?

So, I’m asking you again, do you think there is enough evidence to charge Kuchma and Lytvyn?

VN: It depends what Pukach says during the trial and whether the judge presiding over the case agrees to admit the recordings as evidence. What prevented [former presidential security guard Mykola] Melnychenko from turning over his recordings as evidence and properly demonstrating their authenticity? Why didn’t he turn them over to the U.S. Justice Department as agreed in 2003? These are big questions that require answers. Also, it’s important to keep in mind that the trial will be influenced by politics.

Valentyn Nalyvaichenko sews a Ukrainian flag symbolizing the unity of the nation during flag day in Kyiv on Aug. 23, (Ukrainian photo)

KP: Why aren’t Pukach’s allegations and other existing evidence that Kuchma and Lytvyn were involved enough to bring charges upon them?

VN: I don’t know what Pukach has told prosecutors investigating the case.

If he testifies during the trial that Kuchma and Lytvyn were involved, both men should be brought in for questioning. What’s important is that the trial is public and Ukrainians see it as fair.

KP: Is not the fact that this case has come to trial 10 years after the murder – and the truth still seems far away – more evidence that Ukraine is a mafia state?

VN: No. The case would have never come to trial if Ukraine was a mafia state.

Verkovna Rada speaker Volodymyr Lytvyn shakes hand with ex-President Leonid Kuchma in this June 11, 2009, file photo. (UNIAN)

KP: When you headed the SBU, you said several times that authorities were very close to solving the case of the 2004 poisoning of presidential candidate Viktor Yushchenko. Why is it still not solved?

VN: That’s a question you have to ask the General Prosecutor’s Office.

I said and still maintain that there is enough evidence to charge the individuals involved in the crime and seek their extradition to Ukraine. State prosecutors should formally ask their colleagues abroad to assist by bringing in the suspects for questioning.

My position is that prosecutors should send cases to court, even if they are unable to gather all the evidence they want. A court of law should establish the fact that Yushchenko was poisoned in order to quash speculation to the contrary, identify the primary suspects and their whereabouts.

KP: Many Ukrainian citizens probably look at all these unsolved crimes involving top officials and the widespread corruption and make a conclusion: that Ukraine is a mafia state.

They see how top officials are all connected to one another and part of a fight of power and wealth, but despite all the allegations of corruption, they all have de facto impunity from prosecution. None of them end up in jail. Don’t you see why many Ukrainians could see the country as being a mafia state?

VN: I think holding speedy public trials would help rectify the situation. High profile cases, such as the one involving the Lviv appellate court judge Ihor Zvarych [who is accused of taking bribes], are often bogged down for years with the accused eventually

Æ “I agree that our system of justice leaves much to be desired.” set free. This is blow against the country. I agree that our system of justice leaves much to be desired.

KP: You are now the new de facto head of the Our Ukraine party, replacing Yushchenko. The party is not very popular. How do you plan to rebuild trust in the party?

VN: I’ve already touched on how in the interview. It is necessary to separate business from the affairs of the party and to recruit young Ukrainians as party members. Many former members, especially businessmen, have left the party. Good riddance! We propose reducing corruption in our country by reducing the authority of government officials.

KP: Yushchenko said the same things before he became president in 2005. But he failed to deliver. How can you convince Ukrainians that you are different?

VN: We will focus on young people and put them in positions of authority. I did this when I was the head of the SBU, putting young people from

NGOs in charge of a project to unclassify information about crimes committed against Ukrainians during Soviet times.

KP: If less than 5 percent of all Ukrainians are members of any political party, how can political parties operate without the backing of big business? Average citizens will not donate their money to parties. Who is paying for this office?

VN: We collect dues from party members. Yes, we are short of money for conducting political campaigns.

There 256,000 members of Our Ukraine, with less than 1 percent representing big business. Members of the Our Ukraine council pay Hr 200 per month, while ordinary party members contribute Hr 10 per month.

KP: But Yushchenko is still active in the party, as the symbolic head if you will, while you head the politburo of the party.

Do you think the party can still succeed with him, and his low popularity, dragging down on the party’s rating?

VN: I think his role and place in this party is very important because he was the leader of the Orange Revolution.

He recently launched a new project, a new non-government organization, which will operate as sort of a think tank. It will be involved in national and international projects.

KP: So you don’t think he is damaging the popularity of the party, as indicated by sociological surveys.

VN: Professionally speaking, polls gauge the attitude of the people, which changes from day to day. Our popularity exclusively depends on us.

www.kyivpost.com

News 13

December 10, 2010

New and conflicting details emerge over Mogilevich’s alleged involvement in nation

BY P E T E R B Y R N E BYRNE@KYIVPOST.COM

Two former heads of the Security Service of Ukraine offered vastly different accounts this week of the alleged role of Semyon Mogilevich in the lucrative gas trade between Ukraine, Russia and other former Soviet states, as well as the contents and fate of secret agency files about the alleged mobster.

Valentyn Nalyvaichenko, who headed the spy agency from 2006 to 2010, told the Kyiv Post in an interview that documents connecting Mogilevich with the nation’s gas trade had been destroyed by one of his predecessors, Oleksandr Turchynov, in 2005.

Turchynov, who was security service (SBU) chief in 2005, called such claims an “elaborate ruse” to discredit his close ally, former Prime Minister Yulia Tymoshenko, who made a fortune in the gas trade in the 1990s.

The controversy over the so-called Mogilevich SBU dossier dates back to the split in a coalition between Tymoshenko and former President Viktor Yushchenko in 2005, largely provoked by arguments over whether to retain gas trader RosUkrEnergo as an intermediary in the lucrative business of importing Russian and Central Asian gas to Ukraine.

Ukrainian politicians have accused each other of connections with alleged mafia boss Mogilevich, who for years has been on the U.S. Federal Bureau of Investigation’s Most Wanted List of fugitives for alleged fraud. Mogilevich’s lawyers have consistently denied that he is involved in organized crime or the region’s gas trade. But longstanding claims about Mogilevich’s alleged role in Ukraine returned to the stoplight, thanks to U.S. State Department cables published in recent weeks by the whistleblower WikiLeaks.

Igor Fisherman

Mogilevich files U.S. Embassy cables revealed details about the controversy surrounding a secret dossier on Mogilevich compiled by the SBU. The dossier was allegedly destroyed by Turchynov and his deputy Andriy Kozhemyakin, both staunch Tymoshenko allies, about the time she was fired as prime minister during her first stint on Sept. 8, 2005.

In a U.S. diplomatic cable published on the WikiLeaks website on Dec. 5, former U.S. Ambassador to Ukraine John Herbst reported that former Interior Minister Yuriy Lutsenko said he had been “ordered” in 2006 by state prosecutors to arrest Turchynov for allegedly destroying hard copies of the Mogilevich dossier. Lutsenko on Nov. 29 confirmed the authenticity of his conversation with Herbst, described in the cable dated April 14, 2006.

State prosecutors on Feb. 22, 2006, opened a criminal case against Turchynov and Kozhemyakin for allegedly destroying the Mogilevich files, but Kyiv’s Pechersk District court threw out the case four months later. Prosecutors

appealed, before later withdrawing their charges.

Nalyvaichenko, the SBU chief from 2006 to 2010, told the Kyiv Post on Dec. 7 that SBU records about Mogilevich dating back to the early 1990s indeed went missing. He said the documents detailed the alleged mobster’s role in the gas trade in the mid-1990s, including ties with top officials close to Tymoshenko, who then headed a lucrative gas trading business called United Energy Systems of Ukraine (UESU).

“I think the reason why the Mogilevich dossier was destroyed in 2005 is because the files contained information about intermediaries and their role in the gas trade,” Nalyvaichenko said.

Nalyvaichenko identified one alleged link between Mogilevich and top officials then as Igor Fisherman, who is also wanted by the FBI as an associate of Mogilevich.

Fisherman, who along with Mogilevich is believed to reside in Russia, worked as an advisor to former Prime Minister Pavlo Lazarenko in the 1990s when Tymoshenko headed UESU. Tymoshenko and Lazarenko were political allies during the 1998 parliamentary election, when their Hromada Party won 24 seats in parliament.

Tymoshenko’s opponents have frequently accused her of making illicit proceeds during the mid-1990s in tandem with Lazarenko, when UESU controlled a large share of domestic supplies. Tymoshenko has repeatedly denied wrongdoing and has distanced herself from Lazarenko, a convicted U.S. felon who is still serving an eightyear prison sentence in the U.S. for laundering money.

Speaking to the Kyiv Post by telephone on Dec. 8, Turchynov said there was no specific dossier on Mogilevich

Oleksandr Turchynov near the Security Service of Ukraine on Sept. 22.

that could have been destroyed. But he and Kozhemyakin were evasive in answering specific Kyiv Post questions.

Turchynov did say, however, that it was routine procedure to destroy hard copies of old criminal investigation files. In any case, it would have been impossible to erase backup records from the agency’s computer system, he added.

“At the time, the General Prosecutor’s Office [loyal to Tymoshenko’s opponents], not the SBU, was in charge of investigating of alleged ties between UESU and organized crime groups during the 1990s,” he added, referring to accusations that point to an alleged link between Tymoshenko and Mogilevich associates.

Both Turchynov and Kozhemyakin refused to answer in detail what role Fisherman could have played as an advisor to Lazarenko on energy issues.

Both denied knowing Fisherman, but could not explain clearly if an investigation is warranted to look into what role this alleged Mogilevich associate had as an advisor to Lazarenko at a time when Tymoshenko profited greatly as a business women in the country's murky gas trading business.

“I don’t know what Fisherman was doing there. This is a question for Lazarenko,” Kozhemyakin said, adding that he never investigated the issue. Kozhemyakin said that if political opponents have any qualms, they should show the evidence and prosecutors should pursue the case.

Fisherman and Lazarenko were not immediately available for comment.

Turchynov’s successor at the SBU, Ihor Drizhchany, declined to comment when contacted by telephone on Dec. 6.

Turchynov said accusations about him destroying the dossier were an attempt to divert attention from the accusers’ own links with RosUkrEnergo.

“The controversy over the so-called Mogilevich files was an elaborate ruse engineered by Yushchenko and his inner circle to deflect attention from their plans to [preserve] RosUkrEnergo as an intermediary [in 2005],” Turchynov said.

RosUkrEnergo ties?

The majority of WikiLeaks documents released thus far appear to focus more on a suspected Mogilevich connection to RosUkrEnergo, not Tymoshenko.

One WikiLeaks cable, released on Nov. 29 by Russian Reporter magazine, linked Mogilevich to RosUkrEnergo, co-owned by Ukrainian gas tycoon Dmytro Firtash and Russian state energy firm Gazprom.

Another cable authored by former U.S. Ambassador to Ukraine William Taylor, dated Dec. 10, 2008, reports links between Firtash – who has ties to President Viktor Yanukovych’s inner circle – and Mogilevich. The brief quotes Firtash as saying that he “needed and received permission from Mogilevich when he established various businesses.”

Firtash in a press release on Dec. 2 denied he has ever stated that he needed or received permission from Mogilevich to establish any of his businesses. But Firtash has not responded to requests by the Kyiv Post’s for more detailed comment on his reported ties to Mogilevich and alleged corruption in Ukraine’s energy sector.

RosUkrEnergo and its shareholders have repeatedly denied links to Mogilevich, but top Ukrainian officials in government, including Tymoshenko as prime minister, and lawmakers speaking in parliament, have over the years suggested that he and close associates were involved.

Kyiv Post staff writer Peter Byrne can be reached at byrne@kyivpost.com

14 News

www.kyivpost.com

December 10, 2010

Did Kuchma, Lytvyn order murder of Gongadze?

BY J O H N M A R ON E , Y U R I Y O N YS H K I V an d O L E S I A OL E S H KO MARONE@KYIVPOST.COM, ONYSHKIV@KYIVPOST.COM and OLESHKO@KYIVPOST.COM

Ukrainian prosecutors say they have finished preparing their case against a high-ranking police officer accused of organizing and executing the nation’s arguably most infamous murder – that of investigative journalist Georgiy Gongadze.

But many have long believed that the ultimate blame for the Sept. 16, 2000, assassination of Gongadze goes straight to the top of the nation’s power structure then – to former President Leonid Kuchma and his then chief of staff Volodymyr Lytvyn, the current speaker of parliament.

Both men have repeatedly denied involvement in the murder and could not be reached for comment for this story. However, evidence has repeatedly surfaced over the decade tying Kuchma and Lytvyn not only to the murder, but to the subsequent coverup as well.

After more than 10 years, the topranking suspect – former Interior Ministry General Oleksiy Pukach – has been imprisoned since July 2009 and is now awaiting trial. Also publicly accused is Pukach’s long-dead former boss, Interior Minister Yuriy Kravchenko, who allegedly gave the order to kill Gongadze. Kravchenko was a close confidant of Kuchma.

Three lower-ranking police officers – all subordinates of Pukach – have been convicted of participating in the murder and are serving prison sentences.

Æ Trial of suspect Pukach may take place as early as January A lawyer for the victim’s widow and a man who survived a similar attack by Pukach responded to the latest developments by accusing prosecutors and President Viktor Yanukovych of protecting those who ordered Gongadze’s murder.

Questions are also being raised anew about Kravchenko’s mysterious death from two gunshot wounds to the head on March 4, 2005, officially ruled as suicide but widely suspected to have been an execution of a key witness to the crime.

Ukrainian General Prosecutor Viktor Pshonka released the following statement to the public on Dec. 7: “The pre-trial investigation has established that, on the night of Sept. 16, 2000, Oleksiy Pukach under instructions from Interior Minister Yuriy Kravchenko and other officials, and in preliminary agreement with a group of persons, committed the premeditated murder of journalist Georgiy Gongadze, because the victim was fulfilling public and journalistic duties.”

The “other officials” mentioned by the prosecutor’s statement refers to “a wide range of people who worked with Pukach

Oleksiy Pukach on July 21, 2009, when he was arrested. (Courtesy)

Three former police officers were convicted in the Sept. 16, 2000, murder of Kyiv journalist Georgiy Gongadze, whose work had reportedly angered ex-President Leonid Kuchma. Mykola Protasov (L) and Olexander Popovich were sentenced on March 15, 2008; Valeriy Kostenko is the third officer convicted. All are serving sentences of 12-13 years. They allegedly acted on orders of ex-police general Oleksiy Pukach who, in turn, was carrying out commands from ex-Interior Minister Yuriy Kravchenko. Many suspect, however, the ultimate order came from Kuchma, a charge he denies. (UNIAN)

in the Interior Ministry’s Surveillance Department as well as those who helped him hide from investigators when he was on the run,” prosecutors spokesman Yuriy Boychenko said.

Boychenko wouldn’t specify whether Kuchma or Lytvyn are accomplices in the grisly murder. Pukach, arrested in July 2009 after years as a fugitive, allegedly confessed and implicated Kuchma and Lytvyn in the crime.

But Boychenko said Kuchma and Lytvyn are considered as witnesses in the case.

When asked whether there is enough evidence to charge Kuchma or Lytvyn, Boychenko said: “It is for the investigator to decide whether the testimony of one person is enough to accuse another person.”

Pukach is, however, far from the only person accusing Kuchma and Lytvyn.

Oleksiy Podolsky, a human rights activist and former journalist, almost met the same fate as Gongadze – who was kidnapped, taken to the woods outside Kyiv, beaten and strangled, then beheaded and buried.

Podolsky was also taken in 2000 to woods outside Kyiv, allegedly by Pukach and police officers, but released after being beaten.

He thinks Kuchma and Lytvyn are accomplices and that Yanukovych is covering up for them. His views are based largely on conversations allegedly taped in Kuchma’s office by presidential guard Mykola Melnychenko before Gongadze's murder. Those recordings, disputed by Kuchma and Lytvyn, show that the two men viewed the journalist’s hard-hitting style as a threat and decided to eliminate him.

Gongadze founded Ukrainska Pravda, the muckraking Internet news site that remains one of the nation’s most popular sources of news.

“I trust former Kuchma security guard Mykola Melnychenko’s tapes, which confirm that Lytvyn and Kuchma ordered the killing of Gongadze. Regarding their motive, Lytvyn and Kuchma did not like Gonzadze’s criticism of the Russiastyle power grab they were doing,” Podolsky told the Kyiv Post.

Moreover, according to Podolsky, Kuchma’s successors – first ex-President Viktor Yushchenko and now Yanukovych -- are continuing to cover for him.

“Clearly, Kuchma was not interested in investigating this case because he was involved in it. But Yushchenko and Yanukovych are not interested in this investigation for a different reason – they do not want to make a precedent of holding a president accountable for his crimes, because any next president may hold them accountable for their crimes,” Podolsky said.

Podolsky also charged that “investigators do not want to see the direct evidence of the murder of a main witness in this case, former Interior Minister Yuriy Kravchenko, which is contained in the materials on the socalled suicide. Thus, they are doing everything so that neither the killers, nor those investigators and prosecutors who deliberately and intentionally falsified the conclusion on the suicide, nor those who ordered this murder and these falsifications, ever stand trial.”

Lawyer Valentyna Telychenko, who is representing Gongadze’s widow, Myroslava, in the case, also believes that prosecutors are part of the coverup. As an example, she cites being denied access to some case materials because she received a late notice by mail to collect the materials.

In addition, in October, prosecutors announced that they had replaced the head of the investigative group in charge of the Pukach case.

The new investigative group then changed the indictment against Pukach from “murder in fulfillment of an order” to “premeditated murder by a group of people in collusion,” Telychenko told the Kyiv Post.

According to Telychenko, the change in wording demonstrates that investigators are ruling out that Kravchenko could have gotten his orders from higher up, as confessed murderer Pukach indicated to police.

“If the investigators believed Pukach when he said Kravchenko gave him the order to kill Gongadze, why wouldn’t they believe him when he says that he heard the conversation with [Leonid] Kuchma, or that he had met with [Volodymyr] Lytvyn,” she said.

Telychenko has repeatedly pointed out that Kravchenko didn’t have any personal motivation to kill the journalist, so he must have acted upon somebody else’s orders, and the chain of command was pretty straightforward.

Lastly, the lawyer for the widow of the victim is even suspicious of the court trying the case. “[Kyiv’s] Pechersk District Court is expected to hear the case, but taking into account the court’s dependence on the High Council of Justice [on which Security Service of Ukraine chief Valery Khoroshkovsky sits], I understand that the court might find all of my arguments unreasonable,” she said.

Pshonka, the top prosecutor appointed this autumn, has said that the murder trial will be in January. He is a close ally of Yanukovych, dating back to 1997, when Pshonka served as prosecutor in Donetsk when Yanukovych was the region's governor.

The unindicted suspects – Kuchma and Lytvyn – have been peddling a story for years that foreigners may be responsible for Gongadze’s murder.

In a Sept. 16 interview with the

Kyiv Post, Lytvyn said the Gongadze murder might have been organized from outside of Ukraine by someone seeking to damage the country’s independence.

“I have to say only one thing - the investigation has confirmed that I had nothing to do with it,” he added.

Kuchma has intimated that the United States was somehow behind the crime. “It’s an international scandal designed to compromise Ukraine,” the former Ukrainian president was quoted as saying on Sept. 15. “This was paid for. Money makes everything possible.”

U.S. Ambassador John F. Tefft has categorically refuted the accusations, as did his predecessor at the time of the scandal, Carlos Pascual.

“Such allegations are clearly absurd.”

Tefft told the Kyiv Post on Sept. 22.

“As the Gongadze case enters the trial phase, we will continue to speak out in our efforts to ensure that those actually responsible for ordering his abduction and murder will be brought to justice and to support journalists everywhere who work to inform the public and expose corruption and injustice.”

Members of Yuriy Kravchenko’s family were unavailable or declined to comment for this article.

However, an official resolution dated April 3, 2007 and signed by the case's then-lead investigator Oleksandr Karchenko vindicated Kravchenko; Karchenko reversed his position in September.

John Marone can be reached at marone@kyivpost.com, Yuriy Onyshkiv at onyshkiv@kyivpost.com and Olesia Oleshkoat oleshko@kyivpost.com

Pukach beating victim Podolsky: Massive cover-up still under way Editor’s Note: The following is a Dec. 7 statement from human rights activist and former journalist Oleksiy Podolsky to General Prosecutor Viktor Pshonka. Podolsky was kidnapped, assaulted, choked and ordered to dig his own grave by former Interior Ministry General Oleksiy Pukach on June 9, 2000, just three months before the murder of another journalist, Georgiy Gongadze. Podolsky believes he was singled out for attack because of his human rights activities critical of the regime of ex-President Leonid Kuchma, whose authoritarian rule last from 1994-2005. During the assault, Pukach and other officers told him to stop writing critical articles about Kuchma. The so-called “Melnychenko tapes ”include alleged recordings of Interior Minister Yuriy Kravchenko reporting to ex-President Leonid Kuchma about the Podolsky beating.

I am found to be a victim in the case that has been supposedly investigated by the General Prosecutor of Ukraine regarding crimes of [Interior Ministry] Lieutenant General Oleksiy Pukach and other officials of Ukraine, which were committed in 2000 against Georgiy Gongadze and against me personally.

Today, December 7, 2010, your subordinate investigator V.A. Gryshchenko in fact told me without any explanation that the General Prosecutor’s Office refuses to let me review the files of the case in which I am recognized as a victim. Therefore, I formally appeal to you … about the blatant violation of my constitutional rights by your employees.

Also ask you to note that the investigation in this case actually turned into protection of those who ordered Georgiy Gongadze’s murder and the crime against me.

This keeps your subordinates acting on behalf of the general prosecutor not only as the exclusive law firm for those who ordered political assassinations, but also, in fact, themselves resort to violations of law where an intentional criminal act is clearly seen.

In particular, the investigation stubbornly refuses to see direct evidence of murder of a witness in this case – [Interior] Minister [Yuriy] Kravchenko [who died of two gunshot wounds to the head on March 4, 2005], which is included in the materials on this so-called suicide. Thus, they do their utmost for the murderers, the investigators and prosecutors who knowingly and intentionally falsified conclusions on the suicide, or those who ordered the murder and these falsifications ... so that they don't face trial.

Similarly, the investigation deliberately and consistently avoids the investigation of fraud that was done in the Gongadze case and, in my case, the General Prosecutor’s Office under the direction of [Mykhailo] Potebenko, [Gennadiy] Vasylyev, [Svyatoslav] Piskun, and [Oleksandr] Medvedko, because such an investigation will lead to those who are true criminals. They are those who ordered the murder of political-ideological opponents, and then gave orders to prosecutors to conceal it.

Whether your name stands by your predecessors now depends on you.

www.kyivpost.com

News 15

December 10, 2010

U.S. official accuses Ukraine of lying about 2008 arms shipments to Sudan K Y I V P OS T S TA F F

The U.S. had satellite imagery that proved Ukraine lied about shipping arms to southern Sudan, according to a U.S. State Department cable published Dec. 8 by WikiLeaks.

Arms exports to war-torn Sudan are carefully watched, and under UN embargo to the Darfur region, the scene of alleged genocide. Sudan is on the U.S. list of state sponsors of terrorism, which bans arms sales to the country. Southern Sudan is largely autonomous from the north since a 2005 peace agreement ended a 50-year war.

Two Ukrainian arms shipments were made in 2008 to Kenya, but the final destination of the weapons, which included Soviet-era tanks and other weapons, was the government in southern Sudan, according to the cable.

The account of meetings between Vann H. Van Diepen, a U.S. deputy assistant secretary of state, and senior Ukrainian officials in November 2009 also detail how American diplomats raised concerns that Ukraine: • intended to sell missile systems to Saudi Arabia capable of delivering weapons of mass destruction; • continued to exports parts, albeit in reduced quantities and not completed weapons, to the military dictatorship in Myanmar; • was not intervening in the sale by Ukrainian entities of specialty metals for Iran’s ballistic missiles.

Kyiv’s export of arms hit the headlines when M/V Faina, a boat carrying

A Soviet made T-72 tank is offloaded from the MV Faina ship at the port of Mombasa, Kenya on Feb. 14, 2009. The crew of a Ukrainian ship MV Faina, captured by Somali pirates, were welcomed home as heroes the day before after being held hostage for 19 weeks. The ship’s cargo of 33 Soviet-era T-72 tanks and 14,000 rounds of ammunition was offloaded in Kenya. While Ukraine and Kenya said the shipment was for Kenyan armed forces, U.S. diplomatic cables released by WikiLeaks show that that final destination was the government of South Sudan, in possible violation of international sanctions imposed because of a genocidal civil war there. (AFP)

a shipment of 33 Ukrainian T-72 tanks, as well as grenade launchers, armored vehicles and small arms, was captured by Somali pirates in September 2008 en route to Kenya. According to the account of the meeting in the cable, Ukraine claimed the weapons on board this and an earlier shipment were destined for Kenya, but Van Diepen produced a copy of a contract that showed the arms were destined for southern Sudan.

The Ukrainian side “held to this line, questioned the authenticity of the contract, and asked if the U.S. had any better evidence,” whereupon Van Diepen “showed the Ukrainians satellite imagery of T-72 tanks unloaded in Kenya, transferred to rail yards for onward shipment, and finally in South Sudan.”

“This led to a commotion on the Ukrainian side,” the author of the cable noted laconically. Ukrainian officials

claimed they couldn’t be held responsible for the actions of Kenya.

Van Diepen reminded the Ukrainians that Sudan was on the U.S. list of state sponsors of terror and rebuked the Ukrainian side for lying. He added that the U.S. “would have to consider whether to impose sanctions for the tank transfer, and that a factor in U.S. deliberations would be whether the [government of Ukraine] was being truthful.”

Speaking to Kommersant daily newspaper, Serhiy Bondarchuk, the former head of Ukrspetsexport, a state-owned company specializing in weaponstrade, who was present at the meeting, confirmed that the conversation did take place. Bondarchuk noted, however, that Ukrainian officials requested that their counterparts provide them with the satellite images to confirm their authenticity, which the U.S. side refused to do.

16 News GLOBAL CORRUPTION BAROMETER 2010 INSTITUTIONS PERCEIVED TO BE THE MOST AFFECTED

BY CORRUPTION POLITICAL PARTIES

POLICE

ASIA PACIFIC

Argentina, Australia, Bosnia & Herzegovina, Brazil, Canada, Chile, Colombia, Czech Republic, Denmark, El Salvador, Fiji, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Iraq, Ireland, Israel, Italy, Japan, Korea (South), Kosovo, Latvia, Lebanon, Lithuania, Mexico, Mongolia, New Zealand, Palestine, Papua New Guinea, Philippines, Poland, Portugal, Romania, Serbia, Slovenia, Solomons Islands, Spain, United Kingdom, United States, Vanuatu Azerbaijan, Bangladesh, Cameroon, Ghana, Kenya, Liberia, Malaysia, Mexico, Moldova, Nigeria, Pakistan, Philippines, Russia, Senegal, Sierra Leone, South Africa, Taiwan, Uganda, Venezuela, Vietnam, Zambia

BUSINESS/PRIVATE SECTOR

Austria, China, Denmark, Hong Kong, Luxembourg, Netherlands, Norway, Switzerland, Turkey

JUDICIARY

Afghanistan, Bolivia, Bulgaria, Cambodia, Croatia, FYR Macedonia, Peru, Ukraine

PARLIAMENT/LEGISLATURE

Brazil, Colombia, Indonesia, Korea (South), Lithuania, Romania, Solomon Islands

PUBLIC OFFICIALS/CIVIL SERVANTS EDUCATION SYSTEM MEDIA RELIGIOUS BODIES

www.kyivpost.com

December 10, 2010

MIDDLE EAST & NORTH AFRICA

Singapore Norway

11% EU+

5%

UKRAINE

23%

NEWLY INDEPENDENT STATES+

36% SUBSAHARAN AFRICA

34% NORTH AMERICA

WESTERN BALKANS + TURKEY

Belarus, Morocco, Russia, Thailand, Turkey Armenia, Turkey

LATIN AMERICA

PERCENTAGE OF USERS WHO REPORT PAYING A BRIBE TO AT LEAST ONE OF NINE SERVICE PROVIDERS IN THE PAST YEAR (regional average)

32% 5% 56% 19%

Brazil, Colombia, Denmark, Korea (South), Lithuania, Mexico, Norway, Phillippines, Romania, Russia, Solomon Islands and Turkey are listed more than once because respondents rated more than one institution the same.

Source:

Corruption still rampant in Ukraine

Judicial corruption exceedingly high

The Global Corruption Barometer 2010, published by Transparency International, shows that corruption is on the rise worldwide. To no one’s surprise, Ukraine scores among the worst in the former Soviet Union, according to the Berlin-based corruption-fighting organization. In the report, almost 92,000 respondents in 86 countries were asked to evaluate the state of corruption in their home countries. The results were far from optimistic. Overall, more than 85 percent of the respondents reported that corruption levels increased, or stayed the same. In Ukraine, this result reached 93 percent. People were also asked the question of whether they personally gave a bribe “to receive attention” from customs, education, the judiciary, police and other public institutions. Worldwide, a quarter of all respondents reported giving a bribe at least once, while in Ukraine this percentage reached 34 percent, with only Azerbaijan and Moldova scoring higher. It’s worth mentioning that the result of Georgia, where only 3 percent of respondents reported giving bribes. This was not only the lowest in the former Soviet Union, but also one of the lowest worldwide on par with Iceland and better than Canada and the United States.

The results of this particular survey question should ring as bad news for all the politicians around the world. Nearly 80 percent of all the respondents consider political parties to be “corrupt or extremely corrupt.” The interviewees showed just a little bit more trust towards public officials and civil servants, who are considered corrupt by 62 percent of people. The situation in Ukraine is a bit different. While most of the respondents consider local politicians corrupt, they especially singled out the judiciary system, making it the most corrupt in the world, with Mexico and Bolivia following right after. Arguably, the most amusing results were shown by Norway, where only 1 percent of the population reported giving bribes. The local champions of corruption turned out to be religious institutions. On the contrary, the local police and the judiciary are among the least corrupt in the world.

Despite spending lots of money, government fails to solve serious problem of stray, dangerous dogs

BY S V I T L A N A T U C H YN S KA TUCHYNSKA@KYIVPOST.COM

After spending millions of dollars of city money trying to tackle Kyiv’s chronic abundance of stray animals, authorities admitted in November that they have failed to make headway.

Their new solution?

Throw millions more of budget funds at a plan to put strays into shelters that experts are calling an ineffective method of dealing with the problem, and more like a way to suck money from the city coffers.

That may not even cure anything, considering how badly money gets spent in this area.

“Not a single European country spends so much budget money on stray animals,” said John Ruane, director of British non-profit animal welfare organization Naturewatch, who met with Kyiv authorities and activists in November. The amount spent annually on three communal companies to carry out the new policy is around Hr 8 million ($1 million).

The old plan – to sterilize street animals before releasing them – has been abandoned amid signs that it wasn’t working. More than 3,000 people were bitten by stray animals in Kyiv in 2009.

In a July 22 story, the Kyiv Post reported that a massive sterilization program – part of a four-year, Hr 76 million effort – failed to sterilize more than 3,000 animals. No officials answered questions about why the program failed or where the money went.

In November, city authorities announced a new plan to tackle the problem – picking up stray animals and accommodating them at private and government shelters while looking for owners or sponsors to pay for the animals’ upkeep.

As well as three government shelters, Deputy Mayor Anatoly Holubchenko, who is in charge of the plan, said the city is negotiating with private shelters,

Æ Canine control is weak as questions are raised about how well public shelters do their jobs which will be paid for their services.

In short, critics say, it is an expensive strategy that will do more to maintain a bloated bureaucracy than solve the problem at hand.

The three government agencies dealing with stray animals in Kyiv devour approximately Hr 8 million annually from the city budget. More than 150 people are employed by these companies – Animal Shelter, Center of Identification of Animals and Kyiv City Veterinarian Clinic – with more than 15 offices all over Kyiv and Kyiv Oblast.

Animal Shelter houses 720 stray animals. Its 68 employees are paid salaries totaling around Hr 3 million per year.

The company has generated Hr 459,000 in revenues in 2010 by offering services such as accommodating animals whose owners are on holiday. The head of the shelter, Olha Drozhdova, said it needs more staff to cope with its task of collecting stray and dead animals, as well as housing and caring for them. “We want to create a collecting team in each city district, which is 10 more teams,” she said.

Natalia Mochneva, head of the SOS shelter on the outskirts of Kyiv, feeds dogs in the shelter on Nov. 8. Kyiv’s problem with stray and dangerous dogs continues to grow amid allegations of misspent public money. (Oleksiy Boyko)

The Center of Identification of Animals, which registers domestic animals and people who care for stray animals, received Hr 2 million per year.

The center is run by Svitlana Berzina, who left her post as director of Kyiv zoo earlier this year after allegations of financial irregularities and a surge of animal deaths.

The company – which Berzina said was created “not for commercial purposes but for social ones” – employs 37 people, including a lawyer, two accountants and a secretary. It occupies ten offices across Kyiv. Experts said this is a huge operation given that it is unclear what benefits registering brings for owners and carers.

By comparison, a private animal shelter in Hostomel, a town

near Kyiv, run by pensioner Asya Serpinska accommodates 650 dogs and 150 cats at a cost of Hr 600,000 per year. The shelter is funded by charitable donations and employs five workers along with a number of volunteers to feed and clean up after the animals.

SOS, another famous animal shelter situated on the outskirts of the city, houses around 2,000 stray dogs and cats. It employs 11 people – eight keepers, a driver, a veterinarian and a director – and costs around Hr 600,000 annually, which comes from the International Animal Protection Society SOS and donations.

Tamara Tarnavska, president of SOS, said the Hr 8 million spent on the three communal companies is enough to build two new shelters and sterilize

several thousand animals. She accused Drozhdova, who estimated 45,000 stray animals in Kyiv, up by 15,000 since 2009, of overstating the figures in order to get more money from the budget. Tarnavska puts the number of strays at “no more than 15,000.”

Recently city authorities announced plans to merge the three companies into one with a minor cut of employees.

However, the heads of the companies have come out strongly against the plan, arguing it will cause the effectiveness of management suffer.

In most Eastern European countries, including Poland and the Baltic states, communal companies only collect animals from the streets. They are then delivered to private shelters where they get medical treatment and the process of finding a sponsor or new owner begins. Shelters benefit greatly from donations and volunteers and get very little money, if any, from the budget.

British animal welfare expert Ruane said money needed for managing stray animals the European way is significantly less than the amount spent on maintaining huge bureaucratic structures.

However, city authorities argue that most Kyiv citizens support communal companies. “According to recent public consultation on the matter, 70 percent of people prefer communal companies taking care of animals rather to private ones,” reads a statement on the Kyiv city administration website.

Ukrainian animal rights activists also claim people`s attitude towards shelters in developed countries is much better than in Ukraine. “For some reasons, Ukrainians are very cruel to animals.

They easily throw animals onto the street, or pass by a dying animal. In the West, many people come to shelters to look for a pet. It happens very rarely here,” said Natalia Mochneva, head of the SOS shelter.

Kyiv Post staff writer Svitlana Tuchynska can be reached at tuchynska@kyivpost.com

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December 10, 2010

News 17

Apartment owners band together to look after homes

BY I R I N A S A N D U L SANDUL@KYIVPOST.COM

Irina Myakota, a 47-year-old broker, lives in an old four-story building with columns on Gonchara Street in Kyiv.

It has been seven years since dwellers of her house have lived without the dreaded “ZHEK,” and they are so much the better for it.

ZHEK in Ukraine is the local residential utilities office, highly inefficient, which manages utilities and building upkeep in neighborhoods.

Myakota and her neighbors rescued themselves from the clutches of ZHEK by becoming owners of their own house. In other words, they created a condominium and an association of the co-owners of the apartment building.

Now they are responsible for everything that happens with the house, be it the changing of broken windows, painting of walls or the picking up of garbage. Myakota was not sure, however, that they did the right thing when they started.

But it is turning out beautifully, in comparison to neighbors still held hostage by ZHEK. Fungi are not covering the walls of her house’s entrance, as they do in nearby houses, which are still ZHEK’s responsibility. Syringes and banana peels are not tossed around her staircase either, a common sight in many Ukrainian landings. There is a functioning lock on the entrance door. This is why homeless tramps do not spend nights inside her house and passersby do not urinate in her elevator during the daytime.

Æ Owners: Government not living up to its end of bargain Myakota, one of the activists of her condominium, is not completely satisified. She would like to see support from the city for improvements such as the fixing of elevators or the cleaning of courtyards. “We are hardly surviving,” Myakota said. “But it wasn’t better with the ZHEK. When we had a ZHEK, we had nothing at all.”

But ZHEKS are on their way out within the next three years. According to the communal reform that will come into force by the end of 2014, Ukrainian citizens will have to create ownership associations – known by the Russian acronym OSMD -- in about 70 percent of apartment buildings.

“The purpose of the reform in Ukraine is to involve apartment owners into managing their houses and to take private houses off the state burden,” said Ilya Zuyev, deputy head of the private company ZhilKom Ukraine.

As of the beginning of 2011, Zuev’s company will start managing three ZHEKs and 88 apartment buildings on the outskirts of Kyiv, in Vinogradar area.

Privatization of apartments started in Ukraine right before the collapse of the

Ilya Zuyev says his private ZhilKom company will work much better than ZHEKs do.

Soviet Union. Most people then bought their apartments from the state for peanuts. In Soviet times, housing was stateowned and apartments could not be sold. Landings, staircase, roofs, cellars and courtyards remained state-owned.

And all of this will soon change.

Powerless OSMD From information supplied by the Ministry of Housing and Communal sector, so far Ukrainians have created OSMDs – or ownership associations -- only in 15 percent of apartment buildings that are at least five-story high. The largest numbers of OSMDs are in the Donetsk Oblast (2140), Lviv Oblast (779), Dnipropetrovsk Oblast (682), Mykolayiv Oblast (655) and Odessa Oblast (625). In Kyiv Oblast, only 135 exist.

But the responsibility of condo associations means having to survive without any state help – and that can mean costly bills for them if something goes wrong. In Kyiv’s old buildings, something is bound to go wrong, sooner or later.

Natalia Oleinik, head of the department of the strategic reform of the housing and communal sector, said in 2007- 2008, the government did not allocate money for major repairs of houses with condo associations. This appears to run counter to a law that requires the state to conduct major repairs before authorities transfer the responsibilities to the condo owners.

The list of major repairs includes repair of roofs and elevators and, generally, the most costly aspects of building maintenance.

“There is no other way for the state rather than to create a society of housing’s owners of the apartment buildings that can help maintain a house,” Oleinik said.

But the government is helping. Next year, she said authorites will allocate 13 times more money (some two billion hryvnias) in the budget for major repairs of houses belonging to their owners. This year, the government has spent only Hr 150 million hryvnias.

It can’t be worse.

Galina Peresunko, a 58-year-old pensioner is happy to be part of a condo association and rid of ZHEK. Building tenants have hired a concierge, put a new lock on the entrance door, the landings and staircases are clean, the light bulbs are fixed and the elevator is always working.

But, she says, “there is enough money only for little things.” The house facade needs to be redone to keep the

heat in, the roof needs repair and there are cracks in the walls.

“This is why people who live in apartment blocks in sleeping areas are afraid to create [an association] – one needs to have money to maintain the house,” she said.

This is where property management firms come in. Zuyev from ZhilKom said anything that eliminates ZHEKS will be an improvement. “Tenants will become customers of the managing company,” Zuyev said. “They have the right to control the works and to change the managing company.”

But there are only 18 apartments in the old house with columns on Gonchara Street where Taisiya Zaretska, a 57-year-old historian lives.

And many property management firms are interested only in highrises with lots of apartment units. Still, Zaretska who heads the building’s association, said residents will try to get everything done by themselves.

“I find comfort in the thought that everything belongs upon us,” she said.

“Windows in the cellar are very bad.

Now we have collected money and we will replace them with new plastic ones. How long would we have to wait until ZHEK had replaced them? Our lives won’t be long enough to wait for that.”

Kyiv Post staff writer Irina Sandul can be reached at sandul@kyivpost.com

Taisiya Zaretska is happy that her house is no longer served by a ZHEK.

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Discover Ukraine's pagan traditions and learn fortunetelling Æ25

December 10, 2010

Jews mark festival of lights, Hanukkah

Jewish Hanukkah is commemorated by lighting candles on a special candlestick with nine branches called a hanukkiyah. Each day of the eight-day festival, a candle is lit and a prayer is recited, as seen in this photo taken during the Yudkevych's family celebration in Kyiv on Dec.3. Head of the family, Dmytro (M) teaches his children Jewish history and traditions, the knowledge of which he lacked growing up amid repressions in the Soviet Union. (Joseph Sywenkyj)

BY N ATA L I YA H OR B AN HORBAN@KYIVPOST.COM

A popular joke during Hanukkah is that if you screw up on a gift once, you have seven more tries.

The eight-day Hebrew holiday is often confused with Jewish New Year, as it usually occurs in winter. In practice though, Hanukkah has nothing to do with the new calendar and doesn’t require presents.

Often called the Festival of Lights, it comes from the battle for the Jewish temple between the Syrian-Greek soldiers and the Jewish army in the second century BC. The Jews won the fight, but their precious synagogue was looted and trashed. There was nothing

left inside except for one jar of oil. It was enough to burn just for one day, but the jar amazingly lasted for eight days – the time needed to prepare new oil. The miracle of the jar and the military victory set the start for the Hanukkah tradition.

For Dmytro Yudkevych, a 47-yearold Ukrainian Jew, Hanukkah means family time and wisdom to pass on to his three children. The Friday night of Dec. 3 was especially important given that Shabbat – the Jewish rest day, and the third day of Hanukkah coincided.

When he was growing up, Yudkevych said his family never observed Jewish holidays. “Up to this day, my mother doesn’t really want to admit her origins,” Yudkevych said. No longer fearful

of Soviet persecution, it is still difficult for her to identify herself as a Jew. Subject to oppression and discrimination throughout history, Jewish persecution sank to its ugliest depths during the era of Nazi Germany. Millions of Jews perished in death camps and in pogroms on Ukrainian territory during World War II. Post-war Soviet Union discrimination included bans on Jewish participation in government, good universities and public hospitals.

Many Jews hid their identity by changing their names.

When Yudkevych learned about these sad chapters, he started practicing Judaism. “Very often we are reminded of who we are. After a while, we really want to know more to be

able to pass it on to our children,” he said as he set the table for the festive Hanukkah dinner.

The two Shabbat candles are placed together with a hanukkiyah, a candleholder with eight branches and the ninth in the center set slightly above the others. This candle tree is different from a menorah, which is another traditional candelabrum with seven branches. For each of the Hanukkah days, one candle is lit with the help of the middle one.

As the family gathers around the table Olha, Dmytro’s wife, lights the candles. She is Orthodox Christian, but follows the Jewish tradition of wearing a headscarf while saying a prayer in Hebrew first and then in Æ22

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Food Critic WITH NATALIA A. FEDUSCHAK SCHAK SCHA K OM O M FEDUSCHAK@KYIVPOST.COM

Chinatown missing in Kyiv, but Jiu Long is here The Chinese have a few maxims about food that provide plenty to think about, but really have nothing to do with eating.

“If you are planning for a year, sow rice; if you are planning for a decade, plant trees; if you are planning for a lifetime, educate people” is one. Another, more ancient, proverb rings especially true for an economically depressed and politically challenged Ukraine: “To the ruler, the people are heaven; to the people, food is heaven.”

I offer these truisms because they seem an appropriate way to begin a critique of Kyiv’s Jiu Long Chinese restaurant. To write “I liked the atmosphere and the food” appeared pedestrian, although true. So I opted for an approach that would provide some intellectual fare to go along with the physical for those who decide on a meal at the truly Chinese Jiu Long.

It offers a generous menu of Chinese foods to suit different tastes. Traditional chicken, beef, fish, vegetables and rice are all on the menu, which is written in English, Ukrainian and Chinese.

The restaurant even has several dishes geared toward vegetarians, which include tofu in a clay pot (Hr 50 for 400 grams), spicy tofu (Hr 33 for 250 grams) and potatoes with ginger (Hr 18.20 for 150 grams). Special homemade Chinese dishes include frog paws with mushrooms and bamboo in a clay pot (Hr 128 for 400 grams).

It took a while to read through the menu and decide what to order. My father-in-law, who accompanied me, is a light eater and picked as his meal an appetizer of cooked beef with spices (Hr 40 for 150 grams) and a juice.

My menu consisted of a spring roll (Hr 10 for one), a dumpling soup (Hr 21 for 150 grams), curried chicken (Hr 62 for 150 grams) and a portion of rice, which we shared.

We also split a dessert of banana in glazed caramel (Hr 34). It had to be ordered at the beginning of the meal to ensure enough preparation time. I had 200 grams of Georgian wine for Hr 22.20.

The spicy beef and curried chicken arrived first. A huge curry fan, I had been intrigued when I saw it, but wasn’t sure what to expect since it was the first time I had seen that particular item on a Chinese menu. The dish was delicious. The bits of chicken were fantastically tender and I could have ended the meal then and walked away happy. The rice was stickier than I prefer, but it did not take away from the overall dish. I had a bite of the beef and Æ23

20 Seven Days

www.kyivpost.com

(skyscrapercity.com)

Sunday, Dec. 12

Ukraine’s history in ballet

(bid.ru)

December 10, 2010

Wednesday, Dec. 15

If you fancy an image make-over, head to the shopping mall Alta Center. No, not for shopping this time. Some 60 stylists will offer their tips in hair styling, make up and clothing. Sadly, they won’t doll you up unless you are a model on their list. But the show should still be fun with competitions among image artists and master classes.

Russian glam artist Sergey Zverev, Ukrainian designer Andre Tan, TV host Svitlana Volnova and hairdresser Ihor Didenko will provide some star dust for the gathering.

Saturday, Dec. 11, 2 p.m., shopping mall Alta Center, 11 A Moskovsky Prospekt, metro Petrivka.

Free admission.

Saturday, Dec. 11

Drink tea like Koreans and Japanese Join Koreans and Japanese, among other tea makers and drinkers, in celebration of the International Tea Day. One Asian restaurant in Kyiv with a name hard to spell or even pronounce – Khangukkuan, will unravel the mystery of tea ceremonies in Korea and Japan.

If you care for all the intricate details, there will be two demonstrations held to explain the difference between Korean and Japanese brewing and serving.

Buddhist monks in Japan seem to have been first to invent a peculiar art of making tea.

They used it as a form of meditation in Japan around the 13th century. Racing through life in this day and age, it’s hard to imagine how anyone can make such a big deal out of tea.

But Japanese and Koreans believe that the most important thing is not in the drink itself, as in the enlightenment and peace that the ceremony brings.

Wednesday, Dec. 15, 6 p.m., restaurant Khangukkuan, 10A Zhelyabova, metro Shulyavska. To book tickets (Hr 50): tel. 332-3038, to book tables: tel. 458-4514

Wednesday, Dec. 15

(informadanza.com)

Stylists compete

(courtesy)

Ukrainian composer Yevhen Stankovych picked a thrilling theme for his new ballet. “Lord of the Borysfen” goes back to the time of the Kyivan Rus and founding of Kyiv by legendary Prince Kyi, his two brothers and a sister. The Borysfen is the name given to the Dnipro River by the ancient historian Herodotus. In Greek, it stands for a northern river.

Throughout centuries Kyivan Rus was home to many different tribes. The people of Huns came over from Asia in the fifth century A.D. Together with Slavs, they tried taking over the Roman Empire. This underreported history will be reenacted on stage in a colorful ballet performance.

Sunday, Dec. 12, 7 p.m., National Opera, 50 Volodymyrska, metro Zoloti Vorota. Tickets: Hr 20-200

Ukrainian folk dances Virsky Folk Dance Ensemble is a veteran dancing company. With more than 70 years on stage, it built a reputation of mastery and excellence in Ukrainian dance. The ensemble was founded in 1937 by choreographer Pavlo Virsky. They toured the world giving concerts from China to Argentina. During the World War II, when many song and dance bands ceased to exist, Virsky’s dancers kept the show on for soldiers. A fabulous cast of 50 professional dancers promise to give you the best of Ukrainian choreography on Wednesday, Dec. 15, 7 p.m., Palats Ukraina, 103 Velyka Vasylkivska St., metro Palats Ukraina. Tickets: Hr 80-500

Compiled by Nataliya Horban

www.kyivpost.com

Movies

Live Music Colin Firth (L) and Julianne Moore star in ‘A Single Man’ drama. (api. ning.com)

A SINGLE MAN Language: English with Ukrainian subtitles Drama. USA (2009) Directed by Tom Ford Starring Colin Firth, Julianne Moore, Matthew Goode In 1962, it was hard to admit you were gay.

Teaching English literature in L.A., British native George struggles to come to terms with his partner’s death. His relationship with Jim lasted for 16 years but Jim’s family didn’t even allow him to attend their son’s funeral.

As he tries to get over his loss, he reminisces about his life with Jim. In the course of one day in November, he meets all kinds of people who just may help him to get the answer he needs. Based on the novel of the same name by Christopher Isherwood, the film was directed and financed by clothing designer Tom Ford. The film is rich on 1960s' memorabilia: from clothes to furniture.

SHORTS FROM THE STOCKHOLM FILM FESTIVAL “SWEDISH LOVE” Stockholm Film Festival has been around for 20 years. A platform for modern filmmakers, it screens more than 150 films each year.

A collection of shorts has made it to Kyiv with a choice of six best Swedish films from 2008 – 2009. Selected works are made by debuting directors. They don’t stray from regular subjects of love, friendship, and difficult relationships common in mainstream Hollywood works, giving you a quick ride through Sweden onscreen. All films will be shown in Swedish with Ukrainian subtitles.

IT’S A WONDERFUL LIFE Language: English with English subtitles Drama/Fantasy/Romance. USA (1946) Directed by Frank Capra Starring James Stewart, Donna Reed, Lionel Barrymore “It’s a Wonderful Life” is an all-time American classic movie. Right before Christmas, businessman George is falsely accused of

Have a lifestyle tip for us?

Lifestyle 21

December 10, 2010

embezzlement. The man who dedicated all his life to helping others cannot believe the grim reality and decides to commit suicide.

In this stressful time, angel Clarence pops up on the scene to show George what life in his town would be like if he never existed.

The film was nominated for five Oscars, but didn't win any. Box office sales and soaring television ratings since then, however, jumped the film into the Top 100 Best American Films of all times.

SANTA CLAUSE IS A BASTARD Language: French with Ukrainian subtitles Comedy. France (1982) Directed by Jean-Marie Poiré Starring Anémone, Josiane Balasko, MarieAnne Chazel Brace yourself for a mad French comedy taking place at the Lifesavers, the suicide-prevention hotline. Felix, disguised as Santa Claus, decides to throw a huge sexy Christmas party.

His place, however, is taken by someone from Africa also dressed as Santa. As he returns home, his girlfriend is about to leave him. As he’s chasing after her, she seeks shelter at the trust hotline center. A series of odd and eccentric events ensues, but with it being Christmas, expect a happy ending.

TO THE SOUTH Language: French with Ukrainian subtitles Drama. France (2005) Directed by Laurent Cantet Starring Charlotte Rampling, Karen Young, Louise Portal Haiti, late 1970s'. Three women arrive in Haiti in search of sea, sun and sex. Ellen is a French literature professor from Boston; Brenda is a housewife from Savannah, Georgia; and Sue is a Canadian factory worker. Neglected by men in their own countries, they seek comfort with handsome local young men, who they pay a few bucks for their services. They don’t care much about appalling poverty outside

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ZHOVTEN 26 Konstyantynivska St., 205-5951 www.zhovten-kino.kiev.ua Exit Through the Gift Shop Dec. 10-12 at 3:10 p.m., 6:20 p.m.

Dec. 11-12 at 12 p.m.

Dec. 13-14 at 3:25 p.m., 6:35 p.m., 9:45 p.m.

Dec. 15 at 1:50 p.m., 5 p.m., 8:10 p.m.

A Single Man Dec. 10-11 at 3:15 p.m., 9:30 p.m.

Dec. 12 at 2:10 p.m., 9:30 p.m.

Dec. 13-15 at 2 p.m., 5:45 p.m., 9:30 p.m.

Swedish Love Dec. 10 at 7 p.m.

Dec. 11-12 at 5:55 p.m., 7:55 p.m.

MASTER CLASS CINEMA CLUB 34 Mazepy St., 594-1063, www.masterklass.org/eng Santa Clause is a Bastard Dec. 14 at 7 p.m.

It’s a Wonderful Life Dec. 16 at 7 p.m.

BUDYNOK KINO 6 Saksaganskogo St., 287-7557 To the South Dec. 13 at 7 p.m.

KINOPANORAMA 19 Shota Rustaveli, 287-3041, www.kinopanorama.com.ua Exit Through the Gift Shop Dec. 10-15 at 11:30 a.m., 2:40 p.m., 5:50 p.m., 8:50 p.m. their hotel window or the dictatorship of Jean-Claude “Baby Doc” Duvalier. Their only problem is that two of them have sights on the same man.

EXIT THROUGH THE GIFT SHOP Language: English with Ukrainian subtitles Documentary/Comedy. UK (2010) Directed by Banksy Starring Banksy, Thierry Guetta, Space Invader An eccentric French shopkeeper becomes a documentary filmmaker in Los Angeles.

He wants to find a notorious British graffiti artist, Banksy, and befriend him. Banksy, however, is a tough cookie. His street art mocks politics, religion and social structures through witty visual images sprayed on the houses and pavements. He keeps his identity secret and doesn’t let camera capture his face. His real name is believed to be Robert or Robin Banks. Dubbed as the world’s first street art disaster movie, the film contains exclusive footage of Banksy, Shephard Fairey, and Invader, among many other famous graffiti artists at work.

Singer Sergei Chigrakov of Chizh & Co is a rock veteran. (Courtesy)

ART CLUB 44 44B Khreshchatyk St., 279-4137, www.club44.com.ua Concerts traditionally start at 8 – 10 p.m.

Dec. 10 Crazy Friday: Red rocks, Hr 50 Dec. 11 E Drug Moi Gruzovik, Hr 70 Dec. 12 Soiuz 44 Jam Session, free admission Dec. 13 Point (funk), free admission Dec. 14 Winter Jazz Nights: Aaron Huggerty, drums (USA), Hr 50 Dec. 15 Pollock, Hr 30 Dec. 16 Mandarinovyi Rai, Balkan Party, Hr 20

BOCHKA PYVNA ON KHMELNYTSKOHO 4B-1 Khmelnytskoho St, metro Teatralna, 390-6106, www.bochka.com.ua Concerts traditionally start at 9-10 p.m.

Dec. 10 Carte Blanche, Lucky Band Dec. 11 G-Sound, Lucky Band Dec. 14 Bochka Jack Pot ¼: Bereg Bonanzy vs. Elektroklew, Hr 30 Dec. 15 New Year Rehearsal Party: Chill Out Dec. 16 Inmontibus, Martians Do It Better, Hot Guys, Hr 40

DOCKER’S ABC 15 Khreshchatyk St., 278-1717, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m.

Dec. 10 Mad Heads XL, Tex-Mex Company, Hr 70 Dec. 11 Ot Vinta, Red Rocks, Hr 70 Dec. 12 Foxtrot Music Band, free admission Dec. 13 Animals Session, free admission Dec. 14 Tres Deseos Latino Party, Hr 20 Dec. 15 Rockin’ Wolves, Hr 30 Dec. 16 Tex-Mex Company, Hr 30

PORTER PUB 3 Mazepy St., 280-1996, www.porter.com.ua Concerts traditionally start at 7:30 p.m.

Dec. 10 Midnight Blues Dec. 11 Brown Sugar Dec. 15 Ivan Bliuz Dec. 16 Abbey Road

DOCKER PUB 25 Bohatyrska St., metro Heroyiv Dnipra, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m.

Dec. 10 Motor’ Rolla, Angie Nears, Hr 70 Dec. 11 UkrayinSKA, More Huana, Hr 70 Dec. 12 Chizh & Co (Russia) Dec. 13 Second Breath, free admission Dec. 14 Vostochny Express, free admission Dec. 15 The Magma, free admission

Other live music clubs: PIVNA NO.1 ON BASEYNA, 15 Baseyna St., 287-44-34, www.pivna1.com.ua JAZZ DO IT 76A Velyka Vasylkivska St., 599-7617, http://jazz-doit.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., 562-6262.

Compiled by Alexandra Romanovskaya and Svitlana Kolesnykova

22 Lifestyle

www.kyivpost.com

December 10, 2010

After Soviet repression, Jews revel in traditional celebrations Æ19 Russian. She sings Shabbat and Hanukkah songs with her family in both languages. The Yudkevychs celebrate both Jewish and Christian holidays.

After serving grape juice and bread as part of the Shabbat tradition, Dmytro picks up a soup ladle. The custom requires Hanukkah dishes be fried in oil. But the Yudkevych family strays from some of the traditions. “I stress the wisdom of the holiday instead. I always remind my kids that one of the Hanukkah lessons is that we shouldn’t run away from problems or look for easy solutions. It is the better to deal with problems before they become more complex,” he said.

But Hanukkah isn’t just about a prayer. Children get money from their parents and enjoy themselves. Playing a dreidel, a four-sided spinning top with Hebrew letters on each side, is a favorite pastime. Each letter represents a word in a Hebrew phrase for “a great miracle happened there,” which refers to the miraculous jar of oil. “Last year we played it long after Hanukkah, up to the New Year,” said Olha.

Synagogues around Kyiv hold special services with plenty of candles and prayers. According to David Milman, rabbi's aide in the Choral synagogue at Shota Rustaveli St., the holiday is back on the Ukrainian Jewish calendar. “In the Soviet Union, people had to stay home for Hanukkah,” Milman said.

Despite the oppression, the tradition was still observed. “Some Jews managed to celebrate Hanukkah even in the concentration camps. They were making candles out of potatoes by cutting them in pieces and carving an opening to put some oil in it. If there is a will, there is a way,” Milman added.

The Yudkevych family thought of emigrating to Israel. But after staying there for one month, they returned home to Kyiv. Dmytro said he's intent on helping other Jews in Ukraine discover their roots. As a man who's successfully found his own identity, Dmytro has plenty of experience to share with others.

Kyiv Post staff writer Nataliya Horban can be reached at horban@kyivpost.com

2

Cooking Hanukkah doughnuts is easy The Jewish holiday of Hanukkah was celebrated for eight days and nights from Dec. 1 this year. Tradition requires lots of deep fried food on a festive menu to mark the miracle of oil and lights, which this holiday is all about. One of the most popular treats is sufganiyot, a ball-shaped doughnut sprinkled with sugar powder. The Jewish restaurant “Cimes” (2) in Podil shared this recipe with the Kyiv Post.

To serve 20 doughnuts, you’ll need 600 grams of flour, 500 grams of milk, 200 grams of sugar, 70 grams of butter, and a small pack (some 11 grams) of dry yeast. To fry them up, get a liter of sunflower oil.

First, warm up the milk, stirring in yeast, sugar and a quarter (150 grams) of the flour. Let the dough sit on the side for 20 minutes until it rises. Melt the butter separately and then add it to the mixture along with remaining flour (3). Mix the dough well and form balls by rolling 5 them in between your palms (1). Heat up the oil, preferably in the deep-fryer, and dip the doughnuts into it. As they turn golden brown (4), take them out and sprinkle with some sugar powder (5).

Happy Hanukkah!

Story by Nataliya Horban Photos by Roman Hrytsenko, Rustem Adagamov/ drugoi.livejournal.com

1

3

4

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Lifestyle 23

December 10, 2010

Switch on your imagination in Bottega’s latest art exhibit

BY A N A S TA S I A F O R IN A FORINA@KYIVPOST.COM

Modernity has given us no shortage of teachers telling us what to see and how to look at it. Television, billboards, magazines and websites - all package the world and our own lives neatly and clearly without us having to use our own imagination.

The exhibition “What Fantasy May Come” at the Bottega Gallery, which opened on Dec. 3, is an attempt to encourage us not to lose the ability to dream and imagine.

The collection brings together work by 12 Ukrainian artists, which, according to curator Maryna Shcherbenko, not only allows the viewer “to reflect on the ideas presented” through the artists’ eyes, but also “challenge [him] to imagine.”

There’s a variety of media and art approaches on show, from computer technology in Oleksiy Sai’s colorful and intricate composition of Excel diagrams and graphs, to vintage-style ceramic tiles painted with stereotypical images of England by Olena Blank.

A glass sculpture of a woman struggling to break free by Kateryna Hanchak (L) and oil painting ‘Strawberry Hilled Bridge’ by Valeria Trubina.

Excel intricate diagrams and graphs by artist Oleksiy Sai excite office workers at the exhibition opening on Dec.3 (Courtesy)

Hlib Vysheslavsky provides an unusual view of Paris in his series of black-and-white photographs “Through the eyes of the artist.” Two tiled rooftops cut across and obscure the top of a typical French house, barely poking its head into view in the background. The focus of the picture seems to fall on the second roof, with the house distant and the first roof too close and blurred.

Vysheslavsky said he was using random landscape shots to capture parts of the city, inspired by the 20th-century American artist Edward Hopper.

Hopper painted urban architecture and cityscapes, especially the roofs of old buildings, using sharp lines and large shapes to capture the loneliness of a megalopolis.

Lviv artist Kateryna Hanchak uses “hutne sklo,” a free-blowing glass technique, to create expressive works without ornamentation. Her “Open you cage!” is a woman bent backward and straining upward trying to break free from her stand, from her own form. Hanchak says she wants people to reflect on imposed values and realize and appreciate their own will and aims.

Other works try to create a space for the viewer to think. Valeria Trubina’s oil painting “Strawberry Hilled Bridge” from her “Mysterious gardens” series depicts an unreal, fairy-tale landscape with an unusual color scheme – a reddish lake and whitish, almost transparent bridge – which give it a dream-like feel.

“I try to create places where everybody is able to come and stay for a while to have a rest or just to observe their minds,” said Trubina.

What makes this exhibition interesting is the dialog between the viewer and the work, and between the viewer and the artist. Nothing is packaged for consumption – instead you are invited, challenged to engage parts of the brain that much of modern life encourages you to shut down.

Kyiv Post staff writer Anastasia Forina can be reached at forina@kyivpost.com The exhibition runs till Dec. 16. Bottega Gallery, 22b Mykhaylivska St., metro Maidan Nezalezhnosti. 11 a.m. – 8 p.m.

Sunday-Monday closed.

Jiu Long Chinese restaurant offers a rare treat in Kyiv, where ethnic Asian food is hard to find. (Oleksiy Boyko)

Two red lamps lead way to great Chinese dining Æ19 was pleasantly surprised to find it wasn’t too fatty or salty. The taste of beef was complemented by juicy bits of cucumber.

The egg roll was huge and a bit greasy, although that did not stop me from eating it. I didn’t finish the soup because it had a fish base to it, which I don’t care for, although the dumplings themselves were tasty. The dessert was a real surprise and a treat. Very sweet, we each had a bite and then my fatherin-law took the rest to be enjoyed by family at home. For those who worry about monosodium glutamate, the food additive that is known as MSG and so prevalent in the U.S., I was not left with its aftertaste.

The restaurant caters to smaller and larger groups. Consequently, many of its dishes are offered in small and large sizes. Soups, for instance, come in 150 gram and 1,000 gram portions for one person or several. Groups of 10 people can enjoy a Chinese feast by picking from three of the restaurant’s complex menus that range in price from Hr 1,046 to Hr 1,722. The restaurant has minimum person counts for several of its tables.

A particular mention about service and atmosphere is warranted. The presentation of the meal was a bit odd, until I learned it was our hard-working waitress’ second day on the job. My overall impression, however, was highly positive. It began with the woman who pleasantly answered the phone when I called to make a reservation, immediately switched to Ukrainian when she

heard my diaspora accent, and then, without prompting, asked if I preferred the smoking or non-smoking section.

Both may seem trivial, but they are not. Recognizing that not everyone fancies being addressed in Russian is a sign of respect. Providing a smokefree environment is more obvious.

Smokers may enjoy being enveloped by noxious fumes as they dine, but non-smokers do not. Jiu Long’s nonsmoking section is one floor above the one for smokers, thus, unlike too many other establishments in Ukraine that tout smoke-free rooms, cigarette smoke is virtually undetectable, allowing for a truly enjoyable meal.

After finishing the meal, I remembered another Chinese wisdom by Confucius: “To be truly happy and contented, you must let go of what it means to be happy or content.” On this note, I felt like I could let go of my preconceptions about a Chinese meal in the city, which doesn’t even have its own Chinatown.

The restaurant, by the way, is easy to find. Just look for the two big red lamps on the street, duck into a courtyard and there it is – right in front of you.

Kyiv Post staff writer Natalia A. Feduschak can be reached at feduschak@ kyivpost.com Jiu Long Chinese restaurant 46V, Shevchenko Blvd Hours: 11a.m. – 11p.m.

Reservations: 331-0710

24 Lifestyle

December 10, 2010

www.kyivpost.com

L’Oreal chief, 2009 Business Person of Year, offers plenty of insights

BY O L G A G N AT I V GNATIV@KYIVPOST.COM

Philippe D’Have does not describe himself as a particularly sociable businessman. The Belgian native who is general director of L’Oreal, a global cosmetics giant in Ukraine, prefers staying in the office to networking.

That is why a victory in the first-ever Kyiv Post award for Business Person of the Year in 2009 was unexpected news for him.

“It is always nice to get such award,” said D’Have.

He was especially honored to be in the company of such nominees as Bruno Le Cicle, the French-born managing director at Nestle Ukraine, and Jorge Intriago, a native of Ecuador who is a partner at Ernst & Young.

This year’s Business Person of the Year will be announced on Jan. 27 in the InterContinental Hotel along with the rest of the winners at the newspaper’s 10th annual Best of Kyiv awards.

The open and straightforward D’Have said he received a lot of feedback after winning the award. Many people congratulated him and potential employees mentioned the acknowledgement, saying they are honored to be interviewed by the Business Person of the Year.

The attention came from the surprisingly good results L’Oreal showed,

despite the 2009 economic crisis, in which the nation’s gross domestic product plunged 15 percent.

“There was an incredible growth of 50 percent in sales when most of other companies showed negative results,” D’Have said.

The L’Oreal chief seems

to be very proud that his company has maximized the opportunities and solved the challenges of over-performing in an underperforming market.

“We worked as if there was no crisis in front of the consumer: invested, developed, expanded, and hired the best talents in marketing, sales and logistics,” said D’Have.

Part of the success is attributable to the global presence of L’Oreal. D’Have says the company has the opportunity to move financial assets where they are needed.

Another key to success was a more diversified approach to consumers. In the downturn, L’Oreal has launched more affordable products to people whose pocketbooks slimmed.

D’Have said many of the company’s budget cuts came in less essential expenses, such as trips to Paris for meetings.

The L’Oreal leader in Ukraine may know more about the tastes of Ukrainian women than any other foreigner. He says their preferences are close to other Europeans, and so is skin and hair type, which makes it easy for

Philippe D’Have knows a lot about tastes of Ukrainian women heading the office of a global cosmetics giant, L’Oreal, in Ukraine.

(Dmytro Nikonorov)

marketing and development.

Still it is too early to relax, the 2009 Kyiv Post Business Person of the Year said. D’Have moved to Ukraine in 2006 and, since that time, he has adjusted to volatility and tried not to make strict forecasts.

“Just like the weather, everything changes very fast: Two weeks ago in Kyiv it was 20 C and now it is -10C. The

same goes for the market,” he adds.

Despite tremendous growth and great potential, D’Have says future growth rates will slow down, compared to the 50 percent jump in 2009.

“This year we expect 10 percent growth because people ran out of savings and didn’t have time to make new moves,” he said.

D’Have is still optimistic about

Ukraine’s future and his business in particular.

“This country is very underdeveloped. Distribution and retail networks grow, so do the incomes of consumers.” He thinks there is no reason why Ukraine can’t reach the level of Poland in 10 to 15 years.

Kyiv Post staff writer Olga Gnativ can be reached at gnativ@kyivpost.com

www.kyivpost.com

Lifestyle 25

December 10, 2010

Fortunetelling on St Andrew’s Day revives pagan past despite Christian tradition

BY T E T YA N A B OY C H EN KO BOYCHENKO@KYIVPOST.COM

The weather forecast for Dec.12 is sunshine and snow with the temperature dropping below 10C at night. If that’s all you wanted to know in advance, then you may as well stop reading because this story is about fortunetelling.

According to the old tradition, the afterhours of Dec.12 – 13 are the best time to mess with Mother Nature and get some valuable information out of it. Called Saint Andrew’s Day, it’s celebrated in many European countries.

In Scotland, Greece, and Romania, one of Christ’s 12 disciples – Andrew, is honored in church prayers, pubs and even a bank holiday, depending on where you go.

In Ukraine and some other countries of continental Europe, however, the holiday is associated more with magic than religion. The reason is quite simple: With the advent of Christianity, churches adopted some elements of cult and folk tradition to coerce pagans into the new religion. This didn’t work much with St. Andrew’s Day, previously known as the Kalyta holiday, celebrating the sun fading away at the end of autumn.

In some parts of western Ukraine, some old traditions are still alive and kicking. Methods are many: from throwing a boot over a rooftop to whispering chants in candlelight. The goal is simple though: to find out who’ll be

your husband. Here are some fortunetelling rituals for single women easy to perform in the city setting: – On separate pieces of paper, write 12 wishes and put them under your pillow. In the morning, pull out any three and they are the ones supposed to come true.

– If you want a spookier ceremony, place one big and one small mirror in front of one another with candles in between. Keep looking into the big mirror, without taking your eyes off it.

At midnight, say: “My betrothed come to me!” You are then supposed to see a long corridor lit by the candles on both sides. Try to remember some items in this image as they can give you a clue to your future and your fiancee.

– Or you may want to take a piece of paper and partially burn it on a plate. It may get a bit tricky, but what you need next is to place ashes between a lamp and the wall. The shape of its shadow may give you a clue what to expect in the future.

Most likely modern men wouldn’t bother betting on ash shadows or mirrors to know what’s coming for them next. Neither did their ancestors. They resorted to more manly and fun things such as stealing neighbors’ carts and horses. In 2010, men are more likely to blow off steam in night clubs and pubs.

Speaking about parties, it was traditional to attend a Ukrainian-style home gathering on St. Andrew’s called

vechornytsi. Back then, the venue was the house of a well-respected woman in the village, who was trusted by other elders to chaperon the youth.

Prior to the party, each girl had to cook varenyky (stuffed dumplings) and decorate them with intricate patterns.

Placed on a traditional embroidered towel, they were first offered to a dog.

The girl whose varenyk was eaten first was considered the one to get married first.

Another archaic attribute of the holiday was a big round honey cake with a whole in the middle called kalyta. It symbolized the earth and the sun. Young men brought ribbons and sweets to offer in exchange for the cake. After some bargaining, the women would suspend kalyta on the red ribbon attached to a long stick. Lads were expected to answer quiz questions and then compete in biting the bread. The man who managed to answer the trickiest questions and bite off the biggest chunk off kalyta was believed to be ready to get married.

Christian Orthodox churches largely disapprove of these pagan celebrations. Holding festive masses on Dec. 12, they remember disciple Andrew in prayer who’s believed to have brought Christianity to Ukraine, the Kyivan Rus at that time.

Kyiv Post staff writer Tetyana Boychenko can be reached at Boychenko@ kyivpost.com

Young girls wearing traditional Ukrainian clothes try to predict their future with the use of candles and special chants on St. Andrew's Day in Lviv on Dec. 12, 2009. (UNIAN)

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26 Community Bulletin Board

December 10, 2010

Publication of items in Kyiv Post Community Bulletin Board is free of charge. The newspaper will print as many submissions as space permits, but notices must be no more than 30 words, except for the people in need section.

Advertising of paid services or commercial ventures is prohibited in this space. Permanent items must be resubmitted every three months. Deadline for submissions is 3 p.m. Friday for the next issue. New listings are boldfaced.

Please e-mail news@kyivpost.com or contact lifestyle editor Yuliya Popova at 234-6500.

Business clubs – 4 listings Î The Business-English Center meets on Sundays at 3 p.m. for a series of business English skills workshops.

For more information, call Alex at 234-0871 or email: e-club@i.com.ua or visit www.etcentre.com.ua. Î A new gentlemen’s club is always open for well-educated, successful members (free admission) to combine establishing business relationships with unconstrained socializing. Please contact us: vadym_n@ukr.net, kobserg@yahoo.com, (067) 7406820 Sergio.

Î Kyiv International Bible Church, an English-language evangelical nondenominational church meeting at 10:30 a.m. on Sundays at 34A Popudrenka, between Darnytsya and Chernihivska metro stops. Contacts: 501-8082, or kievIBC@gmail.com. Î International Christian Assembly meets at 57 Holosiyivska St. Services are held every Sunday: 9 a.m. till 11:30 a.m. For further information contact: Paul, +050382-2782, www.icakiev.com

Support groups – 5 listings

Î The British Business Club in Ukraine meets every Saturday for business discussion and once every month for networking. Membership is by invitation only and is open to individuals and companies. Please email: administrator@bbcu.com.ua.

Î Divorce mediation, commercial mediation, consulting on diagnostics of conflict resolution in organization.

Ukrainian Mediation Center, www.ukrmedation.com. ua Please contact Oksana Kondratyuk: 066-758-66-44, delo2@i.ua.

Î Free English discussions about Internet marketing.

Bold Endeavours, a British marketing and web development company, welcomes senior marketing managers/ directors to an English language discussion group about search engines and Internet marketing at noon on the first Saturday of each month. Call 221-9595, or register online at www.bold.com.ua.

Î Individual consultations, psychological support in divorce, family relations, stress management, health issues, relaxation, self-esteem, personal development.

Call Elena: 097-294-6781.

Public speaking – 6 listings Î Dnipro Hills Toastmasters Club would like to invite success-oriented people to learn and develop public speaking, presentation and leadership skills. Join us Sundays from 10 to 11 a.m. at Kyiv Business School, 34 Lesya Ukrainky Street, metro station Pecherska. For detailed information, please, check our website www. dniprohills.org.ua Î European Business Association Toastmasters Club invites enthusiastic, goal-oriented people to learn and improve their communication and leadership skills in friendly learning and supportive environment. We meet every Monday at 7.30 p.m. at American Councils at Melnykova, 63. For more information, contact Svetlana Nesterenko at lana_svk@ukr.net or call 067 220 77 55.

More information can also be found at: www.ebatmc. blogspot.com. Î Top Talkers Toastmasters Club is happy to invite ambitious and enthusiastic people to learn by doing. Together we will discover inner potential in public speaking and leadership in each of us. We meet every Tuesday at Kraft Foods, 23 Yaroslaviv Val St. at 7 p.m. Please check our website www.toptalkers.org Î American Chamber of Commerce Toastmasters Club invites English speaking business professionals to advance their presentation and communication skills in a friendly and supportive atmosphere. We meet each Wednesday at 7.30 p.m., at the Microsoft Ukraine office, 75 Zhylyanska St., Floor 4, Business Center Eurasia. To receive further details on the club and its membership, please contact our club vice president for membership, Anton Stetsenko at 093-609-5161. Î Kyiv Toastcrackers Club, a part of Toastmasters International, is a worldwide organization that helps men and women learn the arts of speaking, listening and thinking through effective oral communication. We invite new people to benefit from the meetings on Wednesdays, at 7 p.m. at the House of Scientists, 45a Volodymyrska St. For more information see www.toastcrackers.kiev.ua. Î Talkers Toastmasters Club invites those interested in improving their public speaking, communication skills, English and creative abilities to join its meetings on Saturday mornings at 11 a.m. Please, check club’s website at arttalkers.wordpress.com, call 096-565-6229 or e-mail: arttalkers@gmail.com

Religion – 8 listings Î Christ Church, Kyiv. We are the Anglican/Episcopal Church, serving the English-speaking community in Kyiv.

We meet Sundays at 3 p.m. at St Catherine’s German Lutheran Church, 22 Luteranska Street, a five-minute walk from Khreshchatyk. Bible study on Tuesdays at 7.30 p.m.

Please call Graham at 098-779-4457 for more information, www.acny.org.uk/8592. Î You are invited to the St. Paul’s Evangelical Church.

Roger McMurrin is its founding pastor. Music for worship is provided by the Kyiv Symphony Orchestra and Chorus.

Worship services are held every Sunday at 2:30 pm at the House of Artistic Collectives (Veriovka Choir Hall, 4th floor) at 50/52 Shevchenko Blvd. Call 235-4503 or 235-6980. Î International Church, Kyiv. English and Spanish Bible study classes. We invite you to weekly services at 10.30 a.m. Saturdays at 13A Miropolskaya St. (metro Chernigovskaya, second stop by a tram Boichenka.

Central entrance of two-story building). Telephone: 38-093-757-6848, 542-3194. Î Word of God Church offers Bible study every Sunday and Wednesday at 7 p.m. Sunday school, nursery for children. For more information call: 517-5193. Î International Baptist Church invites you to our English language worship services (Sundays at 10 a.m.). We are located near Vyrlytsya metro in the downstairs hall of Transfiguration Church, 30B Verbytskoho. http://livingvinechurch.googlepages.com. Î The Evangelic Presbyterian Church of the Holy Trinity invites you to our worship service, held in Ukrainian and Russian with simultaneous English translation. We meet each Sunday at 50-52 Shevchenka Blvd., #402 (4th floor).

Worship begins at 11 a.m. Sunday school for adults begins at 9:45 a.m. Pastor Ivan Bespalov: tel. (044) 287-0815; (097) 317-9598; e-mail: ivanbespalov@gmail.com.

Î Alcoholics Anonymous English-speaking group meets Saturday/Sunday at 12.30 p.m. and Tuesday/Thursday at 7 p.m. at various locations. Contacts: aakyiv@ukr.net, 096460-0137 (friend of Bill) for details of meeting location. Î Counseling/advising in relationships, personal growth, body/ mind/spirit matters. Well-known Ukrainian psychologist counsels expats in English and French in the center of Kyiv (Lyuteranska). See www.hohel.kiev.ua or call 050595-3686 between 3 p.m. and 5 p.m. Î Individual psychological counseling for Russian and English speakers. Family issues, mood disorders, anxiety, depression. Psychological Rehabilitation & Resocialization Center. Call Elena Korneyeva, 050-573-5810, between 10 a.m. and 6 p.m., or e-mail: kornyeyeva@rambler.ru.

Social, sport and health clubs – 2 listings Î Volleyball group, expats and locals, seeks new players, male or female. Skill levels, advanced beginner to intermediate. We meet on Sundays, 11 a.m., near Livoberezhna metro. For more info, send email to vbkiev@gmail.com Î Kiev Hash House Harriers club meets every second Sunday at 1 p.m. at the Lucky Pub, 13 Chervonoarmiyska St. (near Lva Tolstoho metro station). For more details, visit the website at http://hashhouseharriers.kiev.ua/

International clubs – 8 listings Î Welcome to the friendly atmosphere of a Frenchspeaking club. We meet once weekly on Saturdays or Sundays for conversation practice and movie sessions.

Please contact Svetlana: 067-907-1456 or email: consonance-s@ukr.net. Î Student Embassy Project invites students to join intercultural events in Kyiv, Lviv and Ternopil. The initiative is aimed at international students’ integration into Ukrainian society, youth leadership development, intercultural dialogue. To learn more please e-mail us at studentembassy@gmail.com or visit: http://studentembassy.org.ua. Î The Kyiv Rotary Club meets on Tuesdays at 7 p.m. at Andreyevsky Prichal restaurant, 6 Bratskaya Str. For more information, please contact Nataliya Rodovanskaya at 067-296-5672 or n_radov@yahoo.com. Î The International Women’s Club of Kyiv (IWCK) welcomes women from around the world to join our support network and participate in our extensive social and charitable programs. For more information, see our website www.iwck.org, call or e-mail the IWCK Program Coordinator Galina Timoshenko at 234-3180, office@iwck. org. Address: 39 Pushkinska, #51, entrance 5, door code 250. Î The Rotaract Club Kyiv meets on Thursdays at 7 p.m. at the Ukrainian Educational Center, Prospect Peremohy,#30, apt. 82. For more information, please email: president@rotaract-kyiv.org.ua or visit our website www.rotaract-kyiv.org.ua. Î Democrats Abroad Ukraine is the official organization of the Democratic Party in Ukraine; connecting Americans with U.S. politics and the Democratic Party; registering, informing, and motivating voters; supporting U.S. candidates, holding events, and fundraising. To join, email info@democratsabroad.org.ua. Î The Kyiv Multinational Rotary Club welcomes all Rotarians who are in Kyiv and new potential Rotarians.

Our meetings are conducted in English and are held every Wednesday evening at 7 p.m. at the Radisson Hotel, Yaroslaviv Val St. 22. For a map and further information please consult our website at: http://kmrclub.org. Î The Kyiv Lions Club is one of 45,000 Lions Clubs around the world. We raise funds and provide services to help those most in need in our community by supporting charities in our chosen sectors of giving: children, the disabled, and the elderly. We meet on the second Monday of every month in the downstairs bar of the Golden Gate Irish Pub at 7 p.m. For more information contact Paul Niland at 044-531-9193 or paul.niland@primerosfunds.com.

English clubs – 11 listings Î English-Russian Conversation Club for adults. People of different ages are invited for international meetings.

Mini-groups, individual approach. Making new friends.

Conversational trainings. Email: engrusglobe@i.ua Î Sprout Christian International School is looking for native English-speaking volunteers who are enthusiastic

and love working with children to help in pre-school and English club starting coming September. For more details please call ASAP: Natalie Istomina: +067 501-0406, +093 798-9840. Î Wave Language School offers free English speaking clubs to the public. Join us on weekends from 4 p.m. to 6 p.m. or 7 p.m. to 9 p.m. on Saturdays and 1 p.m.– 3 p.m. or 4 p.m. to 6 p.m. on Sundays. Please contact us by email if you are interested: info@wavelanguageschool.com. We hope to see you soon – everybody is welcome. Î Free English practice at conversation club, regular meetings on Fridays at 7 p.m. near Akademgorodok metro. English native speakers. Interesting topics for discussion. Everyone is invited. Join us at 76 Irpenskaya str., off.31. http://english.in.ua/, 229-2838. Î Free book & DVD exchange. Hundreds of English books and movies. Bring one, take one at the Phoenix Center. Address: metro Pecherska, 2 NemyrovychaDanchenko, University of Technology and Design, blue 14-storied building, 3rd floor. Hours: Mon-Fri 6 p.m. to 7:30 p.m., Sat noon until 1:30 p.m. Î Native English speakers. Meet the best and the brightest in Kyiv, well-educated, ambitious, and talented young people 20-30 years old. Share your English skills and make new friends. Everyone is welcome to visit for free. We also organize picnics, balls and excursions. Five days a week at different locations. Please contact Mark Taylor at jmt260@hotmail.com for more information. Î Free speaking English club in Irpen on Saturdays at Lan School. Call 093-623-3071. Î Improve your English-speaking skills and have fun. Be prepared to speak English most of the time with native speakers. Conversational club, thematic discussions on Saturdays and Sundays. For more information please contact Vadym. email: vadik_s@ukr.net or call 066-767-4407. Î Free international conversation club on Fridays at 7 p.m. at English Language Center. Interesting topics for discussion, studying the Bible sometimes. Join us at 4B Kutuzova lane office No. 106 (m. Pecherska) and 76 Irpenska, office No. 31 (m. Akademgorodok. The ELC LTD. Tel. 5811989, 229-28-38. http://english.in.ua Î Are you a native English speaker? We are glad to invite you to join our English-speaking club. Call 067-6203120 (Olga) or e-mail Olga.Bondar@atlantm.com.ua Î Free English/German conversation club on Sundays.

Druzhbi Narodiv 18/7, office No. 3. Everyone is welcome.

Tel: 529-75-77.

People in need - 7 listings Î Nastya Kotova, 15, has been diagnosed with acute leukemia. Doctors conducted a bone marrow transplant in Israel two months ago. Nastya is in a relatively stable condition now for the first time in many months. A step away from recovery, she still has to go through a rehabilitation period.

The Kotov family urgently needs $12,000 to continue the treatment. Please help Nastya recover completely.

More information: http://www.donor.org.ua/index.php?module=help &act=show&c=1&id=1170 http://fonddarina.com/ru/child/nastyakotova?news#72 Contact Nastya’s volunteer, Iryna: 096-373-89-71.

Bank details: Beneficiary: Kotova Olena Vasylivna (Nastya’s mother) Deposit money on a banking account: # 4405885014676768 PrivatBank Account #: 29244825509100 MFO: 305299 Code: 14360570 Î Nastya Dytiyatkova is only one year old. Her diagnosis is double sensorineural hearing loss, which means that she can’t hear the sounds that will enable her grow as a normal child. Currently there is only one solution: Cochlear implant. It will allow the baby hear voices of her parents and learn how to speak. This kind of implant could be obtained free of charge, but the state can afford only 20 such operations per year. We are at the end of a 500-patients queue, but doctors say we must operate immediately. The surgery costs 23,000 euro, but it’s more than we can afford. Please, help our family and baby Nastenka hear the world like we all do.

Contacts: Nastya’s Parents: Roman Dityatkov Tel. +38066-265-7713, Galina Dityatkova Tel. +380-66-112-9171 Website: www.help.mama.biz.ua Bank details: Bank of beneficiary: PrivatBank Code 299781850 MFO 305299 Account: 26200603467917 Beneficiary: Dytyiatkova Halyna Payment Details: non-repayable financial help for Dytiatkova Halyna Onyx Card Bank of beneficiary: Raiffeisen Bank Aval Code 22761811 MFO 352093 Account: 26251898 Card # : 9890 0900 1431 2073 Beneficiary: Dytiatkiva Halyna Payment Details: non-repayable financial help for Dytiatkova Halyna Î Maksym Nalivkin, 12 years old, needs your help. The boy had suffered from cerebral haemorrhage and further subarachnoid hemorrhage, which led to 3 brain surger-

www.kyivpost.com ies and constant artificial pulmonary ventilation. Since March 2010 the boy has been held at the resuscitation department, for 2 months he’s been out of coma, there are slight positive changes that give hope. He still needs a long-term rehabilitation; however his family already spent their savings on treatment. In case you have any possibility to support them, Maksym’s family would much appreciate it.

Contacts: Mother Elena Nalivkina - mob.tel.: +380 99 625-2475 Father Arkadiy Nalivkin - mob.tel: +380 50318-5499; tel: +380 552 22-2806; email: nag.box@gmail.com; skype: arkady_g.nalivkin; ICQ: 8423832 Webpage: http://nag.pp.net.ua/ Bank details for hryvnia transfer: Bank: Черноморское отделение Херсонского филиала «Приватбанк» МФО Code: 305299 ОКПО Code: 14360570 Account: 29244825509100 Purpose of payment: 4627085825848787, Nalivkina Elena Nikolaevna, ИНН: 2596602804 Maksym’s family also appeals for advice - any useful contacts of rehabilitation professionals, recovery programs, as well as charity organizations or grant programs for such cases. Î Two-year-old Vanya Chornozub from Kherson Oblast has brain cancer. Since no clinic in Ukraine was able to cure him, he has been transferred to Germany for further treatment. Due to the efforts of many people, two years of therapy brought very good results. Vanya is getting better. But his parents are very short of money to pay for further treatment. His parents appeal to anyone who can help support Vanya’s treatment.

Contact person: volunteer Olga Kopylova : +380-67-2341225 Webpage Details for money transfers: PrivatBank Account: 29244825509100 Bank branch location code: 305299 Code: 14360570 Details of payment: card replenishment: 4405885012914724, Chornozub À.À., support for son’s treatment Î Sofia Sydorchuk, 3,5 years old, needs your help urgently. The girl has recently been diagnosed with myeloblastic leukemia, she is in hospital, the intensive chemotherapy department. Sofia needs to undergo a course of medical treatment that consists of 4 blocks of chemotherapy (one block has already been done). It is difficult to determine the exact cost of the treatment at this stage; our best estimate is around Euro 200,000. After chemotherapy Sofia needs to move to a specialised rehabilitation clinic in Israel or Germany. Sofia’s family hopes for your support, each day they do treatment and tests.

You can make a donation via one of the following options: (1) Donations made through a bank transfer Banking details for transfers in Hr: Beneficiary: ÀÒ “Ukreksimbank” Account: 2924902234 Bank of the beneficiary: ÀÒ “Ukreksimbank” MFO code: 322313 EDRPOU code: 00032112 Payment purpose: receipt of funds to the account of Sydorchuk D.V. 0001025541 (2) Donations via web-money Z351457992891 R639870369876 E252216931289 U585571766822 (For instructions on transferring the money via web-money please refer to: http://webmoney.ua/withdrawfunds/) Î Please help Nastya Kotova, 15 years old, who suffers from acute myeloid leukemia. Nastya already had 3 blocks of chemotherapy in Okhmatdet clinic. She desperately needs bone marrow transplantation from a nonrelative. The Israel clinic sent invoices for USD 156,000.

Nastya also constantly needs ongoing therapy in Ukraine.

Help please.

Hryvnya account: Privatbank, account number 29244825509100 MFO:305299, OKPO:14360570 Card account: 4405885014676768, Kotova Olena Vasilievna (id 2608400766).

USD account: Beneficiary**: Acc.#0144 KOTOVA OLENA VASYLIVNA/262032029308 (name of the client) Bank of Beneficiary: open Joint Stock Company RAIFFEISEN BANK AVAL; Kyiv,Ukraine.

S.W.I.F.T. code: AVALUAUKDNI Correspondent bank: Corr.acc. #2000193004429 Wachovia Bank,New york,NY S.W.I.F.T. code: PNBPUS3NNYC Yandex koshelek: 41001136440702 Î The Down Syndrome Ukrainian Organisation gathers parents who have trisomic children, in order to help them raise their kids, and aims at changing the public perception of the disease. The Organisation is now opening a Center for Early Development of the Children with Down Syndrome in Kyiv. The association has recently launched the operation “Serebrenaya Monetka” (Silver Coin) in order to raise funds for the center. Transparent boxes have been displayed in the 100 branches of UkrSibBank (the subsidiary of the French BNP Paribas group) in Kyiv, in order to collect the small coins that everybody has in their pockets. All donations are welcome.

Details can be found at http://www.downsyndrome.com. ua/; http://www.ukrsibbank.com. The operation will end on March 19th. All the proceeds of the operation will be used to buy equipments and furniture for this Center.”

Hryvnya account: BENEFICIARY: Vseukrainskaia Bkagodiyna Organizatsia Down Syndrome ACCOUNT: 26007265663400 MFO 351005 UKRSIBBANK

www.kyivpost.com

Paparazzi 27

December 10, 2010

Fairyland for the rich and their children

TV host Tetiana Ramus with her daughter Anna

Ukrainian-style Disneyland in Mystetsky Arsenal kicks off the holidays.

Old-fashioned Father Frost listens to children’s wishes.

Singer Galina with her daughter Sofia-Maria

Æ Ex-Finance Minister Viktor Pynzenyk (L), with his wife Maria (C) watch their son (L, front).

The holiday season started with a large-scale carnival on Dec. 30 in the armoryturned-museum Mystetsky Arsenal. Celebrity designer Kateryna Shakhovska turned 1,500 square meters of space into a stunning ballroom decorated with props from popular fairy tales. Politicians and celebrities with their children mingled in the magic woods and Snowqueen’s castle enjoying Ani Lorak and Iryna Bilyk’s singing. Shakhovska designed 85 children’s costumes of popular fairy tale characters. The offspring of rich and famous strolled on the catwalk dressed as snowflakes, princes, and pinguins, among others. Organizers said that money raised during the event would be donated to a charitable cause. The Fairyland festival grounds stayed open for two more days for average citizens and their children to visit. (Ukrainian photo, UNAIN, jetsetter.ua, Maxim Nesterenko)

Wife of Deputy Prime Minister Sergiy Tigipko, Viktoria, with their son, Leontiy

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28 Paparazzi

www.kyivpost.com

December 10, 2010

Indonesian rice and noodles are a rare treat in Kyiv

Handmade quilts and clothing from Peru

The Indian community call for more color in Ukraine’s winter fashion of black and grey.

Holiday bazaar celebrates Kyiv's many cultures

Key chains and lamps from South Korea prove popular souvenirs

Artist Valentyna Stepanenko shows her handmade cats

Guests in Christmas frenzy try to buy presents

International Women’s Club Kyiv organized its 18th holiday bazaar on Dec. 4. at the Ukrainian Chamber of Commerce. In anticipation of Christmas, thousands of people visited the fair in search of unusual presents and clothing from more than 30 embassies in Ukraine. A traditional grand raffle was held to add some gambling spirit to the event and collect money for charity. (Roman Hrytsenko)

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

Baker & McKenzie introduces new leadership

Cooks slice Spanish delicacy jamon in the presence of fine art.

James T. Hitch (L), his wax copy (C), and James Richards

Jazz quartet Jazz Standard.

Æ

Representatives from five Baker & McKenzie CIS offices attend the reception.

Serhiy Piontkovsky, newlyappointed co-managing partner of the Kyiv office.

One of Ukraine’s top law firms, Baker & McKenzie, rolled out a fancy reception on Dec. 3 in the classy Khanenkiv Museum of Western European Art. More than 100 guests, including clients and employees of the firm, attended the party on the occasion of the retirement of managing partner James Hitch. During the evening of fine music and networking, the appointment of co-managing partners of Serhiy Chorny and Serhiy Piontkovsky was announced, as well as the arrival of corporate and M&A partner James Richards.

One of Ukraine’s top lawyers, Hitch started his career in 1975 after graduating from Harvard Law School. He dedicated nearly 20 years to Baker & McKenzie operations in Eastern Europe and another 15 in the United States. The community will no doubt miss one of Kyiv’s best-known public figures, as he goes back to the U.S. at the end of the year. (Roman Hrytsenko)

www.kyivpost.com

29

December 10, 2010

Vote early but only once for Kyiv’s best providers of services and goods 2EADERS OF THE +YIV 0OST ARE INTEL LECTUAL NETWORKERS LAUNCHING NEW IDEAS DEVELOPING BUSINESS AND SHAP ING PUBLIC OPINION 4HEY ARE ALSO mCULTURE PRENEURSnp THE PEOPLE WHO ACTIVELY DEFINE THE CULTURAL SCENE /NCE A YEAR THEY PICK THE BEST IN THEIR FIELD OF EXPERTISE HONORING ACCOMPLISHMENT AND INSPIRING OTHERS TO FOLLOW SUIT 4HE +YIV 0OST ANNOUNCES THE START OF ITS TH ANNUAL m"EST OF +YIVn SURVEY WHICH AIMS TO IDENTIFY AND HUNT DOWN THE BEST VIXEN AND FOXES ON +YIVlS BUSINESS AND SOCIAL TRAILS )N ITS CELEBRATORY TH POLL READERS AND EXPERTS ARE ENCOURAGED TO VOTE FOR LEADING COMPANIES IN SECTORS 0ICK YOUR FAVORITE BANK AND YOUR

G e n e ra l p a r t n e r

PREFERRED WATERING HOLE ONLINE AT WWW KYIVPOST COM UNTIL *AN 4O OUR TRADITIONAL CATEGORIES WE ADDED FOUR NEWCOMERS -"! PROGRAM

PUB CLOTHING CHAIN AND A NON PROFIT

NON GOVERNMENTAL ORGANIZATION (ERElS HOW IT ALL WORKS )NITIAL NOMINEES ARE HAND PICKED BY THE +YIV 0OST EDITORIAL STAFF 4HEN AN EXPERT PANEL REPRESENTED BY LAST YEARlS NOMINEES SCREENS THE LIST 4HEY VOTE IN EACH CATEGORY TO NARROW THE SELECTION DOWN TO FIVE CANDIDATES 4HEN READERS HAVE A CHANCE TO HONOR THEIR FAVORITES ONLINE CASTING HALF OF ALL RANKING POINTS TOWARDS THE FINAL SELECTION 2ESULTS ARE DETERMINED BY PAIRING UP YOUR VOTES WITH THOSE OF EXPERTS

7HAT HAPPENS NEXT IS THE MOST DELICIOUS PART OF THE m"EST OF +YIVn EVENT 7E HONOR WINNERS DURING AN EVENING OF FINE DINING AND PARTYING

Æ The award ceremony will be held on Jan. 27.

H o s t o f t h e awa rd s ce re m o ny

List of TOP 5 nominees for Best of Kyiv 2010 1.

BEST INVESTMENT COMPANY

a.

Concorde Capital

b.

Dragon Capital

c. d.

e.

Pedersen & Partners

b.

InterContinental Kyiv

b.

Lavinia

7.

BEST TELECOMMUNICATIONS/ INTERNET SERVICE PROVIDER

c.

Opera

c.

Polyana

d.

Premier Palace Hotel

d.

Premium Wine

Horizon Capital

a.

IP.net

e.

Radisson BLU

e.

Wineport

Renaissance Capital

b.

Kyivstar mobile

BEST RESTAURANT

Troika Dialog Ukraine

c.

MTS connect

BEST ENGLISH LANGUAGE SCHOOL

18.

e.

13.

a.

Belvedere

2.

BEST BANK SERVICES

d.

Ukrtelekom

a.

British Council Ukraine

b.

Concord

a.

Alfa-Bank

e.

Volia

b.

British International School

c.

Fellini

b.

Citibank

8.

BEST MOBILE OPERATOR

Goodman

OTP Bank

a.

Golden Telecom

Kyiv Mohyla Business School (KMBS)

d.

c.

c.

e.

Le Grand CafĂŠ

d.

Raiffeisen Bank Aval

b.

Kyivstar

d.

London School of English

f.

Lipskiy Osobnyak

e.

UkrSibbank BNP Paribas

c.

Life

e.

Speak Up

g.

Nobu

3.

BEST TAX/AUDIT SERVICES

d.

MTS

14.

BEST MBA

h.

Oliva

a.

Baker Tilly Ukraine

e.

Utel

a.

Edinburgh Business School

i.

Pantagruel

9.

BEST FREIGHT & FORWARDING COMPANY

b.

International Institute of Business

j.

Santori

Kyiv Mohyla Business School (KMBS)

19.

BEST PUB

a.

Arena Beer House

MIM-Kyiv (International Management Institute)

b.

Belle-Vue

c.

Docker Pub

Wisconsin International University in Ukraine

d.

Golden Gate

e.

O’Briens BEST CLOTHING CHAIN

b.

Deloitte & Touche

c.

Ernst & Young

d.

KPMG

a.

DHL

e.

PricewaterhouseCoopers

b.

Kuehne + Nagel

c.

4.

BEST LEGAL SERVICES

c.

Maersk Logistics/Damco

a.

Baker & McKenzie

d.

Raben Ukraine

b.

Clifford Chance

e.

TNT Express

c.

CMS Cameron McKenna

d.

DLA Piper Ukraine

e.

d.

f.

10.

BEST CAR SALES DEALER (BY HOLDING GROUP)

15.

BEST PRIVATE HEALTH SERVICE

20. a.

Laura Ashley

Magisters

a.

AWT BAVARIA

a.

American Medical Centers

b.

Mango

f.

Vasil Kisil & Partners

b.

Honda Ukraine

b.

Boris

c.

Marks & Spencer

5.

BEST REAL ESTATE SERVICE

c.

Nissan Motor

c.

Eurolab

d.

United Colors of Benetton

a.

Blagovest

d.

Toyota Ukraine

d.

ISIDA

e.

Zara

b.

Colliers International

e.

Winner

e.

Medikom

c.

DTZ

11.

BEST PASSENGER AIRLINES

16.

BEST INSURANCE COMPANY

21.

BEST IMPACT, BY NON-PROFIT ORGANIZATION

d.

NAI Pickard

a.

Air France-KLM

a.

Allianz Ukraine

e.

Park Lane

b.

Austrian Airlines

b.

AXA Insurance

a.

Children of Chornobyl Relief & Development Fund (CCRDF)

b.

International HIV/AIDS Alliance

c.

International Women's Club of Kyiv (IWCK)

6.

BEST HR AGENCY

c.

British Airways

c.

INGO Ukraine

a.

Ancor SW

d.

Lufthansa German Airlines

d.

Providna

b.

Brain Source International

e.

Ukraine International Airlines

e.

PZU Ukraine

c.

Golden Staff

12.

BEST HOTEL

17.

BEST WINE BOUTIQUE

d.

Kyiv Lion’s Club

d.

Hudson Global Resources Ukraine

a.

Hyatt Regency Kyiv

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Good Wine

e.

Victor Pinchuk Foundation

Vote on www.kyivpost.com and get a chance to win the following prizes BOARD OF EXPERTS Nick Cotton (DTZ) Alex Sokol (American Medical Centers) Serhiy Boyko (Volia) GĂśkhan Ă–ztekin (Tike) Jorge Intriago (Ernst & Young) Ihor Predko (Deloitte & Touche) Andriy Krivokoritov (Brain Source International)

SPECIAL AWARDS The Spirit of Kyiv award will go to the person who best exemplifies generosity in community involvement to make Kyiv a better place to live.

Nominees: Leigh Turner Anna Derevyanko Jorge Intriago Maria Kresa Mykhaylo Wynnytskyi Bate C. Toms Sergiy Oberkovych Brian Mefford Business Person of the Year award will go to the person who had exceptional success.

Nominees: Nick Piazza Jorge Intriago George Logush Bjorn Stendel 10-Year Anniversary Award will go to the person who has made the most outstanding contributions to life in Ukraine for the past decade.

Nominees: Tomas Fiala Natalie Jaresko Jorge Zukoski Richard Creagh Eric Aigner David & Daniel Sweere Michael Bleyzer

a ce r t i f i c ate fo r a l u x u r y we e ke n d for 2 persons in one of two certificates for a dinner (up to Hr 400 w/t alcohol) at

Yana Khoziainova (Hertz) Adam Mycyk (CMS Cameron McKenna) Oleksandr Nosachenko (Colliers International) Robert S. Kossmann (Raiffeisen Bank Aval) Ron Barden (PricewaterhouseCoopers) Karen McPhee (InterContinental Kyiv) Olena Berestetska (Aquarium) Alexa J. Milanytch (CCRDF)

Anna Derevyanko (EBA) Mykhaylo Radutskyi (Boris) Michael Kharenko (Saenko Kharenko) Tetyana Kalyada (TNT Express) Alla Savchenko (BDO) Myron Wasylyk (The PBN Company) Tetyana Zamorska (KPMG) Martyn Wickens (Pedersen & Partners)

Olga Karpova (International Institute of Business) Peter I. Metelsky (KUEHNE + NAGEL) Nick Piazza (BG Capital) Yuri Lutsenko (Leo Burnett Ukraine) Olga Karasevych (Ancor SW) Svitlana Shynkarenko (Adwenta Lowe) Jared Grubb (Clifford Chance) Oleksiy Didkovsky (Asters)

Stuart McKenzie (Pulse) Maryna Bodenchuk (Providna) James T. Hitch, III (Baker & McKenzie) Tomas Fiala (Dragon Capital) Oleksiy Aleksandrov (UkrSibbank) Harald Hahn (Lufthansa German Airlines) Philippe Wautelet (AXA Ukraine) Kateryna Skybska (DOPOMOGA Staffing Company)

For more information, please contact Iuliia Panchuk at panchuk@kyivpost.com or by phone at +380 44 234-30-40

30 Employment How to place an Employment Ad in the

Kyiv Post Tel. 044 234 6503 Fax. 044 234 6330

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For our trading company in Ukraine we are currently looking for

Chief Accountant to provide efficient tax accounting, regular reporting to official authorities, and representing business interests during external audits.

Key requirements: • University degree in Accounting, Finance • Relevant work-experience (Chief/ Deputy Chief Accountant position) • Hands-on experience of participation in tax litigations, external audits • Proficiency in TAX accounting • Commitment to continuous professional development • Composure under stress, result oriented, team player We offer job in a professional and international organization with a competitive remuneration package.

If you are interested in this position, please send your CV via e-mail hr.ukraine@adm.com.

For more information please call +38 048 7965722 Every day, the 29,000 people of Archer Daniels Midland Company (NYSE: ADM) turn crops into renewable products that meet the demands of a growing world. At more than 240 processing plants, we convert corn, oilseeds, wheat and cocoa into products for food, animal feed, chemical and energy uses. We operate the world's premier crop origination and transportation network, connecting crops and markets in more than 60 countries. Our global headquarters is in Decatur, Illinois, and our net sales for the fiscal year ended June 30, 2010, were $ 62 billion.

In Ukraine ADM operates an oilseeds crushing plant in Illichivsk, Odessa region as well as originates oilseed, trades vegetable oil and meal.

For more information about our Company and our products, visit

www.adm.com

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IS LOOKING FOR TOP-NOTCH

multilingual journalists The successful candidate must be able to report and write in English, as well as Ukrainian or Russian.

Please send CV, three writing samples, three story ideas and a description of why you want to work for the Kyiv Post, one of Ukraine’s top news sources, to: Brian Bonner, chief editor, at

bonner@kyivpost.com

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RESUME

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UNDP SUB OFFICE IN CRIMEA is seeking for qualified candidates for the following positions in Simferopol:

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Professional CEO

RESUME

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Finance/Management MINI

Employment/Classifieds 31

December 10, 2010

NATIONAL PROJECT MANAGER, SC (CRIMEA INTEGRATION AND DEVELOPMENT PROGRAMME) http://jobs.undp.org/cj_view_job.cfm?job_id=20548 NATIONAL EXPERT TO THE PROJECT MANAGEMENT UNIT OF THE REGIONAL DEVELOPMENT AGENCY OF CRIMEA, SC (extended, EU/UNDP SUPPORT TO THE REGIONAL DEVELOPMENT AGENCY OF THE ARC) http://jobs.undp.org/cj_view_job.cfm?job_id=19279

PROJECT ASSISTANT/RECEPTIONIST, SC (EU/UNDP SUPPORT TO THE REGIONAL DEVELOPMENT AGENCY OF THE ARC) http://jobs.undp.org/cj_view_job.cfm?job_id=20550 All interested candidates should complete the UN PERSONAL HISTORY FORM* (P-11) and attach it to the on-line application on http://www.undp.org.ua/en/jobs (instead of CV). Failure to disclose prior employment or making false representations on this form will be grounds for withdrawal of further consideration of his/her application or termination, where the appointment or contract has been issued.

Personal History Form can be downloaded from http://www.undp.org.ua/en/jobs

DEADLINE FOR APPLICATIONS IS 18/12/2010

TRANSLATORS

THE

(English)

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Ukraine

JOB SKILLS: 1. Specialist/Master Degree in Philosophy, Linguistics or Translation Studies.

2. Work experience as a translator not less than 2 years.

3. PC proficient user.

4. References providing is required.

SALES/ACCOUNT MANAGER (media, advertising)

Salary depends on interview results.

For additional information: +38 (04579)-263-75 E-mail resume to sokolova@sip-pmu.slavutich.kiev.ua

DESCRIPTION OF THE VACANCY Salary: 3000 UAH + % from selling the advertisement Time: full-time job Location: city center, Prorizna Street 22B We offer: stable on-time salary + %, health insurance.

Probation: 3 months

9OUR FUTURE STUDENTS MIGHT SEE YOUR AD

Work in a friendly young team, possibility to build a career in advertising.

FUNCTIONS: Sales: contacts with potential and perspective clients (advertising in the newspaper), business contacts establishment;

HERE

Research: investigation of customer needs and possibilities, market analysis; Workflow: precontractual documentation management, cooperation with accounting, reporting.

REQUIREMENTS: Good communications skills Understanding how to sell in print and web media Strong presentation skills Work experience in FMCG is preferable.

Good English level Experienced internet user, good office skills (Word, Excel, Outlook, etc.)

Positive, successful attitude

For more information about the Kyiv Post, visit http://www.kyivpost.com/newspaper/ Please send your CV and cover letter to hr@kyivpost.com with “Sales manager� in the subject line.

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Classifieds 3&"- &45"5&

4&37*$& English speaking driver in Kiev. Transfers, sightseeing - 20 euro per hour.

"D" class car, air cond., DVD. Evgeniy. mobile: +38 063 672-07-07 e-mail fo@ukr.net Skype: gorbulinskiy.

Native Frenchman, 40 years, in Kiev, not speaking Russian, good educational experience, gives French course, for students and adults, all levels. www.asgard-frenchlessons.com Email : asgardcours@yahoo.fr

Ironing service in Kiev - Free delivery (certain areas) - Overnight turnaround - Hangers, covers included - Staff known by EU diplomats - 8 USD per 1kg - min.order 5kg (067)9337808

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Linguistic Center "EnjoyClub" offers you fun time spending at our club through sightseeing, discussion clubs and various activities with our members.

Part time jobs are possible. k.berkovskiy@enjoyclub.com.ua, tel. 0504690995

English speaking driver with own car. Rent on hourly or daily basis.

Long driving experience.

Good knowledge of the city.

067 501 22 95 Igor

Work Permits for Non-Residents Residency Permits, Tax IDs Company Registration, Nominal Directors Legal Support, Tax Reporting & Accounting info@megaprime.com.ua +380-50-070-2126, Perfect English

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Guide. Assistant. Help in any business. Accommodation. Transfer. www.kievcenterapartments.com +38 093 185 80 94 Irina

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Immigration & work in Canada Visit www.saskimmigration.com Contact Warren Green greenw@telusplanet.net (044) 278 61 24 Member of Canadian Society of Immigration Consultants

TAXI-MERCEDES Limousine, Bus translator-enterprete-Ubersetzer for rent. Autovermietung loyer tel. 067-305-0055 +38 096-298-5525

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32 Photo Story

December 10, 2010

1

www.kyivpost.com

Boxing and politics

2

3

(1) Ukraine’s world heavyweight boxing champion Vitaly Klitschko (L) and Chechen leader Ramzan Kadyrov share a joke at a bout between Russia’s Zaurbek Baysangurov and Colombia’s Richard Gutierrez for the IBO junior middleweight title in Kyiv on Dec. 4. The fight was organized by Klitschko’s K2 Promotions, which he co-founded with brother Vitaly. (2) Baysangurov (R), who is based in Kyiv, won the fight by technical knockout in the final round, when the referee stepped in after Gutierrez (L) took a number of heavy blows. Baysangurov had to pick himself off

the canvas in the fourth round after the Columbian connected and scored a flash knockdown, but the Russian fought back with an aggressive display of hard punching. Kadyrov jumped into the ring shortly after the fight was stopped and raised Chechen native Baysangurov onto his shoulders (3). The new world champion moved to 25 victories with 19 knockouts, against only one defeat.

Story by James Marson Photos by Anastasia Iskritskaya, UNIAN, AP.