RUSSIA NOT TO BUILD GAS PIPELINE BYPASSING UKRAINE? Ukrainian presidential spokesman Oleksandr Martynenko said on 16 October that Russia's participation in the modernization of Ukraine's gas pipelines will eliminate the need for Russia to build a gas pipeline bypassing Ukraine and increase gas transit via Ukrainian territory by 30 percent. Martynenko was commenting on the meeting of Ukrainian President Leonid Kuchma with his Russian counterpart, Vladimir Putin, in Sochi the same day, where Putin expressed interest in Gazprom's participation in privatization of Ukraine's gas transport system (see also item in Part 1). Meanwhile, ITAR-TASS quoted unidentified Russian experts as saying that Ukraine's gas transportation system needs up to $1 billion for modernization and its suggested sale or transfer for gas debts to Gazprom is not an attractive bid. JM

UKRAINIAN LAWMAKER TO BE TRIED IN GERMANY FOR EMBEZZLEMENT. Lower Saxony State Prosecutor Thomas Klingle on 16 October said Viktor Zherdytskyy, the Ukrainian lawmaker arrested in Hanover last week, will be tried in Germany on charges of embezzling 86 million marks ($38 million) from a German compensation fund for Nazi victims in Ukraine (see "RFE/RL Newsline," 16 October 2000), AP reported. Klingle said the money was allegedly embezzled from an account in Kyiv's Gradobank while Zherdytskyy was in charge of that facility before he was elected to the parliament. Klingle noted that the German authorities previously failed to persuade the Ukrainian parliament to lift Zherdytskyy's immunity and arrested him while he was attempting to withdraw $50,000 from an account at a Hanover bank. JM

RUSSIA TO ACCEPT MORE IOUs FROM UKRAINE FOR GAS. Following his meeting in Sochi with Ukrainian President Leonid Kuchma on 16 October, President Putin told reporters that the two leaders had reached agreement on "virtually all issues," Russian agencies reported. Putin said that Russia accepts the fact that Ukraine "cannot pay for its needed gas supplies only in cash;" therefore the difference [between what it can pay and what it owes] will be included in Ukraine's state debt to Russia." He added that both sides agreed that the "unsanctioned export of Russian gas will be stopped." According to ITAR-TASS, Putin said that Russia thinks that Ukraine's suggestion that Gazprom participate in privatization of Ukraine's gas transportation system "is a good idea," and "we will announce a date for the forming of a government commission which will examine [possible] forms of cooperation" in this area. According to Interfax, the two presidents also discussed cooperation in the fields of space and law enforcement. JAC