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UKRAINE IN TRADE WAR WITH WASHINGTON? Agricultural Minister Ivan Kyrylenko said that last week's ban on U.S. poultry exports to Ukraine was introduced following a demand from sanitary services and has nothing to do with the U.S. sanctions imposed on Ukraine over CD piracy. "The problem consists in the difference between Ukrainian and U.S. veterinary legislation," Kyrylenko told Ukrainian Television on 27 January. Kyrylenko added that Kyiv needs full information from U.S. producers on preservatives they add to poultry products exported to Ukraine. The same day, Premier Anatoliy Kinakh vowed to defend national interests in trade with the U.S. "We shall be doing our utmost to ensure that our partners, including the U.S., clearly understand that we are ready for compromise. We are ready to seek optimal solutions but there is a boundary that neither the Ukrainian president nor the Cabinet of Ministers will ever overstep -- its name is the national interest of the state," Ukrainian Television quoted him as saying. JM
UKRAINIAN MINISTER PESSIMISTIC OVER U.S. TRADE SANCTIONS. Economy Minister Oleksandr Shlapak told ICTV Television on 24 January that the U.S. sanctions over CD piracy will cost Ukraine $51 million and "thousands of jobs." Shlapak added that U.S. trade sanctions from the Soviet era, which are still in force, suggest that there will be no swift end to the sanctions even if Ukraine fully complies with the demands of the international music industry. "The [Jackson-Vanik] amendment was passed by the [U.S.] Senate in 1974. It was aimed against the Soviet Union for violating the right of its Jewish citizens to emigrate. But this problem has long been solved in Ukraine, while the amendment is still in place. This shows how conservative the Americans are on economic issues," Shlapak noted. JM
UKRAINIAN OPPOSITION NEWSPAPER CONSTRAINED TO CHANGE PRINT SHOP. "Ukrayina Moloda" reported on 26 January that the Kyiv-based newspaper "Vecherniye vesti," which is linked to opposition leader Yuliya Tymoshenko, has been forced to look for a printing house in Lviv since the editorial staff could not find a printer in the capital. "Print shop directors spoke to us in a normal manner by phone until we named ourselves. The name of our newspaper automatically meant an end to the conversation. Some promised to call us back, but it was obvious that they would not," "Vecherniye vesti" Editor in Chief Oleksandr Lyapin commented. JM
UKRAINE'S ELECTION COMMISSION REFUSES TO REGISTER TAPESCANDAL MAN. The Central Electoral Commission has refused to register former presidential bodyguard Mykola Melnychenko as a candidate on the Socialist Party's election list, Ukrainian media reported on 26 January. The commission said Melnychenko, who is currently residing in the U.S., cannot be viewed as a permanent resident of Ukraine, which is a requirement of the election law for parliamentary candidates. Yosyp Vinskyy from the Socialist Party disagreed with the ruling, saying that the election law allows anybody staying abroad under Ukraine's international agreements to become a parliamentary candidate. He recalled that in 1998 the Central Election Commission registered businessman Yukhym Zvyahilskyy, who had lived in Israel for more than two years. "The Central Election Commission interprets this provision differently for different people. I see this as an element of political persecution against our candidate who is running for parliament on the list of the Socialist Party," Vinskyy told Inter Television on 26 January. JM
POLISH PARLIAMENT STRIPS SELF-DEFENSE LEADER OF DEPUTY IMMUNITY... The Sejm on 25 January voted by 281 to 87, with seven abstentions, to lift the parliamentary immunity of Self-Defense leader Andrzej Lepper, Polish media reported. Lepper is now expected to face criminal charges for slander and unfounded accusations of corruption leveled against ministers and parliamentary deputies (see "RFE/RL Poland, Belarus, and Ukraine Report," 4 and 11 December 2001). Before the vote, Lepper addressed the parliament with a two-hour speech in which he repeated his former allegations and accused all previous postcommunist governments of "plundering national assets." Lepper also accused National Bank Government Leszek Balcerowicz of implementing an "economic genocide" in Poland. The overwhelming majority of deputies left the session hall during Lepper's tirade. JM
IS PUTIN WEAKER THAN HE APPEARS? While the bulk of Russia's
political institutions, such as the State Duma and the new Federation
Council, appear to follow in lock-step to the Russian presidential
administration's every signal, a few experts on Russia gathered at
the Center for Strategic and International Studies in Washington,
D.C. on 25 January concluded that Vladimir Putin's control may not be
as solid as it appears. "Politics in Moscow have become
subterranean," Regina Smyth, an assistant professor of political
science at Pennsylvania State University, argued. "You can no longer
watch the Duma to figure out what is happening." According to Smyth,
there are a number of political actors who oppose either Putin or his
policies, but they operate behind the scenes. Vladimir Orlov,
director of the Moscow-based Center for Policy Studies, agreed,
noting that there is "an emerging silent opposition to Putin's proU.
S. stance by certain circles in Russia's mid-level bureaucracy,
notably in the General Staff [of the Armed Forces] and in
counterintelligence." Both Smyth and Orlov are part of the Program on
New Approaches to Russian Security (PONARS), a network of 55 scholars
from the U.S., Russia, and Ukraine
Smyth said she started to question the new conventional wisdom about Putin's unassailable control when she noted how quickly the West's perception of Putin had changed. At first, he was seen completely as a "puppet," and now less than two years later, he is pulling all of the strings. At the same time, his political future appears "secure." Smyth acknowledges that Putin's public opinion rating remains extremely high since he revived the central state, neutralized his rivals, and announced plans for far-reaching reforms, but she argues that his greatest challenges lie ahead of him. Putin has not yet tackled the most painful reforms. "Land privatization has not been extended to the battleground of agriculture," she writes in a PONARS policy memo. "The criminal justice system is up in arms over changes in procedures. Military reform is stalled and faces serious opposition within the armed forces. Regional governors remain in the trenches, fighting for their holdover levers of patronage. The Communist Party maintains significant popular support." In addition, pension reform promises to be controversial and could impose real pain on the population.
The real test for the Putin regime will likely lie with implementation of the reforms that it has pushed through the legislature. As Smyth argues, "implementation will provide important indications of whether or not Putin is building consensus versus moving toward increasingly coercive modes of governance."
Speaking at the same conference, Nikolai Petrov, head of the Moscow-based Center for Political Geographic Research, suggested that Putin is well prepared to opt for coercion rather than consensusbuilding. According to Petrov, Putin's federal reforms have created the institutional framework in the regions to impose his will. According to Petrov, under Putin, legal institutions, such as the Federation Council, have been weakened in favor of "new, opaque institutions with poorly defined powers," such as the State Council. Petrov also notes that the new presidential envoys to the seven federal districts and federal inspectors have replaced the former presidential envoys to the regions, while the Audit Chamber "functions as a kind of new powerful law enforcement agency." Petrov concluded in his PONARS memo that the emergence of "less legally legitimate" structures that parallel existing state bodies represents the construction of an entirely new political machine. This machine will work for a while in parallel with former President Boris Yeltsin's old one, but it will soon supplant it entirely, "suggesting a growing authoritarianism." According to Petrov, Putin's federal reforms have been "directed primarily at strengthening control by the police over society."
At first glance, Petrov and Smyth appear to be offering contradictory views of today's Russia, but the difference may be mostly one of emphasis. Petrov thinks of Putin's "glass" of power as half full, while Smyth sees it as half empty. Both believe that the Putin regime will face a series of critical tests in the near term. And the outcome of these may make it easier to answer the question of whether Russia is on its way to becoming a "managed democracy" or an authoritarian state. Both of their reports also suggest that it might be appropriate to focus future research efforts on the regions and away from Moscow. While those Defense and Foreign ministry officials suffer Putin's policies in silence, paralyzed by fear of doing something non-career-enhancing, thousands of kilometers away from the Kremlin, regional-level bureaucrats may feel that they have more leeway to challenge the Kremlin and to create obstacles to centrally issued diktats. But whether such opposition -- if and when it emerges -- is even registered back in Moscow will remain to be seen. (Julie A. Corwin)
OPPOSITION LEADER VOWS TO BREAK 'INFORMATION BLOCKADE...' Yuliya Tymoshenko, the leader of the antipresidential Forum of National Salvation and the election bloc bearing her name, told journalists on 21 January that she is going "to break the information blockade around the opposition" by meeting voters in regions, Interfax reported. "The authorities do everything to prevent our bloc from electioneering, the only [way out is to hold] meetings with voters," she said. She added that printing houses in Kyiv have recently refused to print the "Vechirni Visti" and "Slovo Batkivshchyny" newspapers, which are backed by the National Salvation Forum. Tymoshenko made a written pledge last year not to leave Kyiv in connection with a corruption case conducted against her. In December, Tymoshenko filed a lawsuit questioning the legality of the procedure that stripped her of her parliamentary immunity. A Kyiv court has accepted her lawsuit and ruled that law enforcement bodies may not take any actions against her that would violate a deputy's immunity. According to Tymoshenko, the ruling also means that the Prosecutor-General's Office had no right to demand from her a written pledge to stay in Kyiv. ("RFE/RL Newsline," 22 January)
...AND RFE/RL HOSTS DEBATE BETWEEN TYMOSHENKO, MEDVEDCHUK... Former Premier Yuliya Tymoshenko, the leader of the election bloc bearing her name, and former parliamentary deputy speaker Viktor Medvedchuk, the leader of the Social Democratic Party (United) election bloc, sparred in a discussion broadcast live by RFE/RL's Ukrainian Service on the evening of 23 January. The politicians touched upon their personal achievements in politics, the Land Code adopted last year, gas accords with Russia, and the record of Premier Viktor Yushchenko's cabinet, among other issues. Asked about her contribution to the well-being of the Ukrainian people, Tymoshenko said she managed to replenish the state budget with 10 billion hryvni ($1.88 billion according to the current exchange rate) when she served as a deputy prime minister responsible for fuel and energy issues in Yushchenko's cabinet. In his turn, Medvedchuk said he has served as a lawmaker for the past eight years and created legislation "that is changing Ukraine." ("RFE/RL Newsline," 24 January)
KYIV MAYOR BLAMES MEDIA OVER BUGGED TELEPHONE CALLS. Kyiv Mayor Oleksandr Omelchenko has filed charges against all those who made public the recording of his telephone conversation with Our Ukraine bloc leader Viktor Yushchenko, New Channel Television reported on 17 January. In Omelchenko's opinion, electronic and print media are among those who must go on trial together with Dmytro Ponomarchuk from the Ukrainian Popular Movement for Unity, who was the first to make the recording public. ("RFE/RL Newsline," 18 January 2002)
U.S. TRADE SANCTIONS IMPOSED OVER CD PIRACY IN UKRAINE
Washington on 23 January imposed trade sanctions that will restrict U.S. imports of steel and 23 other items from Ukraine. The move is aimed at pressuring Kyiv into passing stricter legislation against widespread industrial compact-disc piracy. While Washington estimates that the sanctions will cost Ukraine about $75 million in lost trade, authorities in Kyiv say they expect to lose as much as $470 million. The dispute over the theft of intellectual property by Ukrainian firms is long-running. Washington has suggested strict legislation against the production of counterfeit CDs, but Ukraine's parliament, the Rada, has repeatedly rejected U.S. suggestions. The Rada did pass an antipiracy bill in mid-January, and President Leonid Kuchma has said he probably will sign it into law.
But Maria Jovanovich, a spokeswoman for the U.S. ambassador to Ukraine, said in Kyiv yesterday that the U.S. believes the bill is not adequate. "We have requested a copy of the law that was passed last week, although we have not seen a copy. But based on preliminary readouts, we do not think that this is the kind of law that we have been discussing with Ukraine over the past number of months," Jovanovich said.
Jovanovich noted that the 100 percent import tariffs imposed by the United States on Ukrainian products will mean much more than lost revenue in Kyiv. "This is, of course, a very important issue to the United States. This question also goes to the heart of Ukraine's integration into Europe and into the global community -- for example, into the World Trade Organization and a closer association with the European Union," Jovanovich said. But she said officials in Washington will be more lenient toward Kyiv about lifting the sanctions than in previous cases against other countries: "Normally, sanctions are lifted only when a country stops the pirates that are violating intellectual property rights. In Ukraine's case, the U.S. trade representative has said that they are willing to make an exception and will lift sanctions when Ukraine passes a strong law. In other words, before it is actually implemented."
Kuchma responded sharply to the U.S. announcement. He said the demands of Washington and the recording industry's anti-piracy group, the International Federation of the Phonographic Industry (IFPI), are too strict. Kuchma also said the antipiracy legislation that Washington wants would be stricter than that of any other country. Kuchma's spokesman said Washington is now pressuring Ukraine, rather than cooperating with Kyiv on reforms. The U.S. sanctions come after the influential IFPI criticized last week's legislation in the Rada. In a statement issued from its London office, the IFPI called the bill "ineffective" and "highly flawed."
Stefan Krawczyk, the IFPI's regional director for Eastern Europe, told RFE/RL that a conservative estimate of the damages caused to the international recording industry by Ukrainian counterfeit CDs is between $180 million and $250 million per year. Krawczyk said those damages are not the result of pirate CDs being sold in Ukraine. Rather, he said, there are millions -- and possibly dozens of millions -- of Ukrainian counterfeit CDs exported to markets across Eastern and Central Europe, the former Soviet republics, the European Union, North America, and Latin America. Krawczyk noted that while the CD factories in Ukraine are all private firms, the companies are operating in facilities rented from the Ukrainian military. Thus, he says, the Ukrainian government is at least indirectly earning money from CD piracy.
Krawczyk also said Ukraine is not the only country in which large factories are illegally copying CDs: "The real production bases remain Ukraine, Russia, Bulgaria, Belarus, and possibly Poland and the Czech Republic." Krawczyk said the former Yugoslav republics also are a center for pirate CD production -- albeit not in large factories. "If you look at pure pirate production, I would also include the former Yugoslav [republics] -- Yugoslavia as such, Bosnia, Montenegro, [Macedonia]," Krawczyk said. "But there, it is a bit less industrial piracy and much more very large-scale piracy on blank CDs in small -- what we call garage or cottage -- operations. But they are having a very big impact on the market there, which is almost 100 percent pirate."
Krawczyk said CD piracy in Russia has been a growth industry in recent years, and that Russian firms have been increasingly exporting counterfeit CDs since the beginning of 2001. "After Ukraine, I would say the spotlight in terms of industrial CD piracy would go to Russia. There's an increasing number of CD plants there, and we now see a lot of Russian pirate products turning up in countries and markets around the region," Krawczyk said. "Up to a year or so ago, there was already large-scale piracy in Russia, but it mostly remained inside the Russian market. And they now have clearly taken over the role that Ukraine used to play."
Still, he said, Ukrainian authorities have not been clamping down enough on known pirates: "Ukraine has continued over the last year to be a major source of pirate CDs -- both local production as well as trans-shipments. So there is still a big Ukrainian involvement in many respects in trade of pirate products. But it is indeed clear that with all this attention -- from the United States, the European Union, from the international media -- on what has been going on in Ukraine, that they have taken a slightly lower profile. And, indeed, Russian entrepreneurs have jumped in immediately to fill that emerging gap." Krawczyk said one Ukrainian firm that came under international scrutiny for widespread distribution of pirate CDs has simply moved its illegal counterfeiting operations into Belarus. He said that factory is now operating under the name "RIT" but was formerly known as "Bolidisk." "Belarus is starting to become a problem. One of the main reasons is that one of the Ukrainian pirate plants moved a substantial part of its operations to Belarus," Krawczyk said.
Krawczyk said the Bulgarian government in the late 1990s cracked down on pirate CD factories that were owned and operated by the state -- a practice that had given Bulgaria the dubious distinction of being Eastern Europe's biggest music pirate before Ukraine. "In Bulgaria, in 1997 or 1998, we were very, very close to trade sanctions as well. Only the Bulgarian government at that time knew what was at stake for their economy, which was not in very good shape anyway," Krawczyk said. "And they took the right measures. And they took it very decisively, I would say." But Krawczyk also warned that private Bulgarian firms have started to re-emerge as major CD pirates: "Bulgaria, or Bulgarian entrepreneurs I should say, have been taking advantage of all this attention on Ukraine to start building up CD capacity again. And they are certainly also again involved in pirate production."
Krawczyk said it has become more difficult to determine the level of piracy in Poland and the Czech Republic. But he said the IFPI suspects the counterfeit CD industry is large in both countries. "Entrepreneurs both in Poland and the Czech Republic to a certain extent cooperate with IFPI, which is very good, in having their plants controlled," Krawczyk said. "And the other ones might be involved in pirate production, but if they are, they are doing it in such a way that it is very difficult to actually detect." Krawczyk said Lithuania is known as a key distribution hub for illegally copied CDs coming from other Eastern and Central European countries -- even though there are no large counterfeit factories in the Baltic state.