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UKRAINIAN PRESIDENT SIGNS 2002 BUDGET INTO LAW. Leonid Kuchma signed the 2002 budget for Ukraine into law on 3 January, Infobank reported. Andry Chyrva, the deputy head of Kuchma's information department, said the president also sent a letter to parliament speaker Ivan Plyushch that urges the deputies to consider the government's proposals to strengthen macroeconomic stability and broaden the tax base. Kuchma also called on the parliament to ensure that the budget is a "realistic" one. PB

IMF POSTPONES MEETING ON RELEASE OF LOAN TO UKRAINE. Lorenzo Filiuoli, the IMF's senior permanent representative in Ukraine, said on 4 January that a meeting scheduled for next week to determine whether a $370 million tranche should be disbursed to Ukraine has been postponed, Infobank reported. Filiuoli said the 9 January meeting of the IMF's board of governors was postponed to allow the IMF to clarify whether Ukraine is meeting its commitments, which include: enacting the government-submitted budget; completing an audit of Naftohaz Ukrayiny; raising electricity tariffs; strengthening oversight of the banking industry; and refunding VAT arrears. PB


PARLIAMENT FAILS TO PASS BILL ON COMBATING CD PIRACY... On 20 December the parliament voted twice but failed to approve a bill aimed at combating the piracy of compact discs in Ukraine, Interfax reported. In the first voting the bill was supported by 220 deputies (six votes short of the required majority), while in the second attempt only 204 deputies backed it. ("RFE/RL Newsline," 21 December)

... LEADING U.S. TO IMPOSE SANCTIONS. On 20 December, the U.S. imposed sanctions on $75 million worth of Ukraine's imports to the U.S. in an immediate response to the Ukrainian parliament's failure to pass an antipiracy bill, Reuters reported. The action, which takes effect on 23 January, follows repeated U.S. warnings over the past two years that Ukraine could face sanctions unless it cracked down on unlicensed copying of compact discs, which is a thriving industry in that country. "We hope Ukraine will now redouble its efforts to deal with intellectual property rights and pass the legislation needed to allow us to lift sanctions," U.S. Trade Representative Robert Zoellick commented. Zoellick added that the sanctions will come in the form of "prohibitive tariffs" on metals, footwear, and other imports from Ukraine. Zoellick also warned that Ukraine will find it difficult to become a member of the World Trade Organization unless it addresses the issue of protecting intellectual property rights. ("RFE/RL Newsline," 21 December)


The rapid growth of the Internet in Ukraine had largely escaped the authorities' attention until the 6 December presidential decree which finally sought to rein in one of the country's last remaining independent media outlets. The Internet had become "the most mobile medium and the least vulnerable to censorship," according to the prestigious weekly, "Zerkalo Nedeli/Tserkalo Tyzhnia."

Internet use in Ukraine has increased fivefold since 1999. From 2000 to 2001, it jumped by 30 to 40 percent. In recent years, computer prices have dropped, since 85 percent of all computers sold in Ukraine are now assembled domestically. In 2001, 400,000 personal computers were sold (an annual increase of 22-25 percent) plus 10,000 computer notebooks (an annual increase of 60 percent). Due to increased competition among Ukraine's 260 Internet service providers -- which also increased their revenues through higher volume of Internet advertisements -- the cost of Internet connection has dropped dramatically. Add to that, cheap pirated software and cheaper computers. All in all, the Internet is more affordable and accessible in Ukraine.

Not surprisingly, Internet usage is most frequent in large cities, particularly Kyiv, which accounts for half of the Internet use, and eastern Ukraine. Lviv represents the only relatively large Internet use in the western part of the country. Rural areas and small towns suffer from more frequent electricity cuts, fewer computer terminals, and worse telecommunications infrastructure. Of the 18,301 websites registered in Ukraine as of April 2001, 5,772 were in Kyiv, followed by Odesa (1,309), Dnipropetrovsk (901), Kharkiv (722), and Donetsk (550).

Ukrainian press reports that the Ukrainian Security Services (SBU) has recently hired 3,000 computer experts attest to official concern about the expansion of a media they do not control. The authorities not only feared a new technology they did not fully understand, but also were concerned at Internet use to promote opposition political parties and to expose official misdeeds. Students and young people -- among whom English is the most popular foreign language -- are increasing relying on the Internet to conduct research as well as to read the Western media.

President Leonid Kuchma was alarmed that during 1999-2001, the Internet became a key forum for opposition to the executive branch of government. As independent print outlets were increasingly stifled, the Internet was "performing the role that samizdat did in the 1960s in the USSR," the newspaper "Ukrainska moloda" wrote last year. Until the "Kuchmagate" scandal of November 2000, authorities were unperturbed by the Internet because its audience was limited -- compared to the broadcast and print media controlled by them and their oligarch allies. Only in 2001 did the executive branch of the Ukrainian government establish its own website (

The main Internet site to seize on the "Kuchmagate" scandal was "Ukrainska pravda" -- launched on 17 April 2000 by Hryhoriy Gongadze and its current editor, Olena Prytula -- five months before Gongadze's still-unsolved murder. The "Kuchmagate" scandal led to public demands for prompt and unbiased information. This is reflected in visits to the "Ukraina pravda" site, which increased from 3,000 per day to 80,000 during the December 2000 parliamentary deliberations over the scandal, exceeding the circulation figures for the pro-presidential hard-copy newspapers, such as "Kievskiye vedomosti."

The authorities were also concerned that the Internet allegedly provided a negative image of Ukraine to the outside world. During the "Kuchmagate" scandal, Ukraine's international image indeed drastically worsened. But the authorities, by blaming the Internet for highlighting their misdeeds, show they do not understand the media's role as the "fourth estate" in a democratic society. For example, President Kuchma recently complained that the Internet was a "killer" because it was always pouring out "dirt" through "anonymous information."

Reflecting such official concerns, in 2001 a special Internet Administration was set up in the State Committee for Information Policy, Television, and Radio. The SBU is also attempting to take over control of the ".ua" (the Ukraine Internet country code since 1992) domain-name registration. This ".ua" system is controlled by a San Francisco-based networks administrator, Dmytro Kohmaniuk, through the Internet Corporation for Assigned Names and Numbers (ICANN). On 31 October, the National Security and Defense Council (NSDC) passed a resolution "On Methods to Improve State Information Policy and Ensure Ukraine's Information Security." This was followed by a 12 November meeting with Internet journalists where Yevhun Marchuk, NSDC secretary and former Ukrainian KGB and SBU chairman, complained that the Internet constituted a threat to Ukrainian national security due to its large volume of compromising material. Marchuk said "the state cannot ignore a new developing phenomenon, to just stand by and have no influence on it." A presidential decree dated 6 December (1193/2001) implemented the 31 October resolution, which in turn followed an earlier Internet decree dated 31 July 2000 and five previous "information policy" decrees in July 1997; April, July, and December 2000, and April 2001.

The 6 December 2001 decree ordered the Cabinet of Ministers to undertake a range of detailed measures within one-, two-, three-, six- , and eight-month deadlines. Within one month, the cabinet is to draw up a draft law on a "National Information Policy Concept and Ukraine's Information Security." A more detailed licensing procedure for Internet service providers is to be introduced, requiring that they retain copies of Internet traffic for six months. It is disturbing to note the SBU role in the licensing of Internet providers and potential SBU access to Internet traffic in the "interests of national security." The SBU is also instructed to come up with proposals to improve its work against "information aggression and specialist information-propagandistic operations" undertaken by foreign intelligence services.

A recent example of how the SBU may deploy the notion that the Internet constitutes a national security "threat" was its 26 November house search of Oleh Yeltsov, editor of the "Ukraina Kriminalnaya" ( website. The court order which sanctioned the SBU action alleged that it was being undertaken in order to "prevent the release of confidential information." After the search, Yeltsov's computer was disabled. The reason the SBU undertook this action is probably because Yeltsov's website had recently begun to include translations from the "RFE/RL Crime, Corruption, and Terrorism Watch." The SBU seems to be oblivious to the fact that the Internet does not respect state frontiers. If the "Kriminalnaya Ukraina" website is shut down, Ukrainian surfers can simply go to to obtain the information.

Various Western organizations, such as Freedom House and Reporters without Borders, have chronicled the deteriorating media situation in Ukraine since the late 1990s. In 1999 and 2001, the Committee to Protect Journalists placed President Kuchma among the world's top 10 "Enemies of the Press." As the authorities attempt to exert control over the Internet, Ukraine's reputation as a country with a poor record on media freedom is now likely to worsen even further.