Ukraine: Weekly Bulletin – May 27-June 2, 2017

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Ukraine: Weekly Bulletin
May 27-June 2, 2017
 
Canadian soldier teaches a class to Ukrainian non-commissioned officers during Junior Leader Advanced Training. Photo – US Army Europe
1. Russian Invasion of Ukraine
The General Staff of Ukraine’s Armed Forces reported that during the week of May 26-June 1, one Ukrainian soldier was killed and 27 Ukrainian soldiers were wounded in action on the eastern front. Throughout the week, Russian-terrorist forces opened fire 313 times on Ukrainian positions on the Luhansk, Donetsk and Mariupol sectors of the front, including at least 84 times with heavy weapons.
 
2. CUFTA Granted Royal Assent
On June 1, Governor General of Canada David Johnston signed the Canada-Ukraine Free Trade Agreement Implementation Act (C-31). The Canada-Ukraine Free Trade Agreement will enter into force 30 days after the exchange of ratification documents.
3. Ukraine wins important ruling over Russia in gas dispute
Anders Aslund, Senior Fellow at the Atlantic Council, stated, “On May 31, Ukraine’s Naftogaz won an extraordinary victory over Russia’s Gazprom in the international arbitration court in Stockholm. This was the possibly biggest international arbitration verdict ever. Gazprom had claimed $47.1 billion from Naftogaz, half of Ukraine’s GDP, and Naftogaz $30.3 billion from Gazprom.
Naftogaz won on all three counts the court considered. First, Ukraine does not have to pay for gas that it has not purchased, revoking the ‘take or pay’ requirement. Second, the court revised the price formula, tying it to market prices at European gas hubs. Finally, the court decided to completely abolish the ban on gas re-export. Whether Gazprom will have to pay damages will be decided later, and Ukraine’s claims to receive more pay for Gazprom’s transit through Ukraine also will be decided at a later date.
The case was based on the ten-year gas supply and transit agreement the two countries concluded on January 19, 2009. This was a shotgun agreement forged between then Prime Ministers Vladimir Putin and Yulia Tymoshenko after the Kremlin had cut all gas supplies for two weeks to Ukraine and sixteen European countries in the midst of a cold winter.
This agreement was flawed from the outset, demanding more from Ukraine than Russia. Naftogaz committed itself to buy far more gas than it needed. The unpublished price formula obliged Ukraine to pay higher gas prices than any other country. […]
Russia’s gas trade with Ukraine is no ordinary trade. It is an important part of Russia’s hybrid warfare against Ukraine and the European Energy Union. One of Yanukovych’s main supporters was the gas trader Dmytro Firtash, wanted by the US Department of Justice for gross corruption. […]
Since November 2015, Ukraine has not bought any gas from Gazprom. Last year, its total imports were 13 bcm, mostly imported from Slovakia, while the 2009 agreement obliged Naftogaz to purchase 41.6 bcm per year from Gazprom. […]
This case needs to be seen in a broader European context. Since February 2011, Ukraine has a member of the European Energy Community, which incorporates the principles of the EU Third Energy Package of 2009 and the European Energy Union of free trade in energy. European energy law applies. The principles of the European energy market and security are at play in Stockholm, and the arbitration tribunal appears to have recognized that.
The victors are Naftogaz’s young CEO Andriy Kobolyev and his first deputy Yuriy Vitrenko. They deserve a round of applause and then some.” The full report from the Atlantic Council is available at http://www.atlanticcouncil.org/blogs/ukrainealert/ukraine-beats-russia-in-epic-gas-battle 
 
4. Dutch Senate Approves EU-Ukraine Association Agreement
Radio Free Europe/Radio Liberty (RFE/RL) reported, “The Dutch Senate has approved the European Union’s Association Agreement with Ukraine, paving the way for ratification of the pact strengthening ties between the EU and Kyiv. The 50-to-25 vote in the upper house of parliament in the Netherlands on May 30 marks one of the final stages in a long path to the landmark deal […] The Dutch lower house of parliament backed the agreement in a vote weeks before March 15 parliamentary elections, and King Willem-Alexander is expected to sign it into law in the coming days. European diplomats speaking on condition of anonymity have told RFE/RL it could be ratified during an EU-Ukraine summit in July and would enter into force in early autumn. The Netherlands is the only EU country that has yet to approve the agreement with Ukraine.”
5. Ukraine’s Acting Minister of Health: 45 days that will change Ukraine’s health care system
Writing in the Kyiv Post on May 30, Ukraine’s Acting Minister of Health Ulana Suprun stated, “Ukraine is on the cusp of fundamental change to its Soviet era healthcare system. The decisions made by the Parliament and Government of Ukraine over the next 45 days will determine if 43 million Ukrainians will finally receive a quality of healthcare that meets international standards, or if they will be locked-in a post-Soviet catatonia into the next decade. […]
Ukraine’s current healthcare system is a failure – a relic of Soviet state planning. This system proclaims ‘free medical assistance’ but in reality creates a “pay to play” system that encourages corruption and kickbacks. […]
The new healthcare system is based on three fundamental principles. First, state budget money will now “follow the patient,” and pay for medical services instead of being disbursed based on an antiquated formula that only supports system infrastructure. Second, a unified set of medical services that are financially covered, will be defined and established for all citizens. Third, international best practices for treatment and diagnostics will be introduced to ensure that citizens have control over the quality of services provided.
In practice, these principles will be realized through several key reforms. We are instituting state funded medical insurance for all Ukrainians, with financial guarantees of coverage for a wide range of services. […]
Last year, we canceled a decree that allocated state funding based on the number of hospital beds rather than the number of patients. In the new system, doctors who provide higher quality services will be rewarded with more patients and paid accordingly through state insurance as the money will ‘follow the patient.’ The country’s healthcare budget will be transformed into a fund for treating patients, rather than a bloated government subsidy for inefficient medical facilities and a cesspool of corruption. […]
Finally, we are instituting reference pricing for pharmaceuticals to further protect patients from corruption and price gouging. […]
However, all of these fundamental changes depend on the Parliament of Ukraine having the courage to pass the package of reforms during this session. If Parliament delays and fails to pass these changes in the next 45 days, Ukraine will lose its chance at fixing its broken healthcare system for at least five years, prolonging decreases in life expectancy due to procedural, legal, and political reasons. […]
The hope of a European standard of life drove the Euromaidan protests and stopped a band of tyrants. Passage of healthcare reforms that meet international standards will create conditions that give Ukrainians the European quality of life they deserve.” The full article is available at https://www.kyivpost.com/article/opinion/op-ed/ulana-suprun-45-days-will-change-ukraines-healthcare-system.html
6. US Senators propose stronger sanctions against Russia
Bloomberg reported on May 31, “Bipartisan leaders of the Senate Banking Committee announced a plan Wednesday to strengthen sanctions against Russia over its actions in Ukraine and Syria, as well as internet intrusions in the U.S. The proposal is a signal that some in Congress intend to push back on the Trump administration’s moves to explore an improvement in relations with Moscow.
Panel Chairman Mike Crapo of Idaho and top Democrat Sherrod Brown of Ohio said their bill would authorize ‘broad’ new sanctions targeting sectors of Russia’s economy including mining, metals and railways.
It would codify and strengthen existing sanctions included in executive orders affecting Russian energy projects and debt financing in key economic sectors, the senators said in a press release.
‘Despite existing sanctions, Russia remains a hostile, recalcitrant power, deploying its military, cyber-enabled information espionage activities, and economic tactics to harm the United States and drive a wedge between it and its allies,’ the committee statement said. ‘There is significant congressional interest in ensuring sanctions on Russia are effective and proportionally enhanced, particularly in light of continuing Russian intransigence in these areas.’ […]
The question of Russian sanctions has been raised by a number of senators in both parties after the intelligence community announced in January its conclusion that Russia interfered in the 2016 election on behalf of President Donald Trump.
Among those seeking more sanctions is Republican Senator Lindsey Graham of South Carolina, who has said he would try to attach such a measure to bipartisan Iran sanctions legislation expected to be sent to the Senate floor.”

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