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SINGLE ECONOMIC SPACE PRESIDENTS INK TAX AGREEMENT... The presidents of the Single Economic Space (SES) member states (Belarus, Kazakhstan, Russia, and Ukraine) met in Astana on 15 September, agencies reported. Belarusian President Alyaksandr Lukashenka, Kazakh President Nursultan Nazarbaev, Russian President Vladimir Putin, and Ukrainian President Leonid Kuchma signed an agreement to levy the value-added tax (VAT) on a destination-country principle starting on 1 January 2005, Kazinform reported. The presidents also charged the SES High-Level Group with developing documents by the end of 2004 to ease border-crossings for citizens of member states, ITAR-TASS reported. They affirmed a list of 29 basic documents for the SES legal structure to be readied for signing by 1 July 2005. President Putin said that the VAT agreement was a difficult decision, as it will cost the Russian budget $800 million, RBC reported. But he said that it will increase trade volume and benefit all four countries. DK

...AND CIS FOREIGN MINISTERS ADDRESS APPEAL TO OSCE. The Council of CIS foreign ministers met in Astana on 15 September, addressing an appeal to the OSCE that was published on the website of Russia's Foreign Ministry. The appeal calls on the OSCE to strengthen its antiterrorism efforts, exploit its full potential in the military-political sphere, strive for greater balance in its humanitarian work, develop cooperation with other organizations, and achieve increased budgetary transparency. Ukrainian Foreign Minister Kostyantyn Hryshchenko stressed that "this is not about the CIS member states in any way criticizing the organization as a whole.... The suggestions are intended to highlight issues that are extremely important for all of us today," RIA-Novosti reported. Russian Foreign Minister Sergei Lavrov told reporters, "Eight [CIS] countries are in favor of reforming the CIS," ITAR-TASS reported. It was not immediately clear which four remaining countries declined to sign the appeal, although Bilik Dunyasi reported that Azerbaijan did not sign. In July, Russia led nine CIS countries in a statement criticizing the OSCE for an excessive focus on human rights. DK

END NOTE: UKRAINIAN PARLIAMENT MANEUVERS AHEAD OF PRESIDENTIAL BALLOT xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

BELARUSIAN NGO APPEALS TO SUPREME COURT OVER PRESIDENTIAL REFERENDUM. The Belarusian Helsinki Committee (BKhK) has filed a suit with the Supreme Court of Belarus, maintaining that the constitutional amendment proposed by President Alyaksandr Lukashenka for a referendum on 17 October is illegal, Belapan reported on 15 September. Last week, Lukashenka announced a referendum on whether the constitutionally imposed two-term limit should be lifted to allow him to seek the presidency again (see "RFE/RL Belarus and Ukraine Report," 9 and 15 September 2004). The BKhK argues that Article 78 of the constitution stipulates that issues that are not open a referendum must be specified by law, and that questions concerning the presidency are subject to the country's Electoral Code. The code's Article 11, the BKhK notes, explicitly bans "questions concerning the election and removal of the President of the Republic of Belarus" from being submitted to a referendum. Thus, the BKhK concludes, Lukashenka's decree to hold a nationwide plebiscite on lifting the two-term presidential limit violates the Belarusian Constitution and Election Code. JM

MEDIA WATCHDOG CALLS FOR PUBLIC TRIAL IN GONGADZE CASE. The Paris-based media freedom watchdog Reporters Without Borders (RSF) in a 15 September press release called on the Ukrainian authorities to hold a public trial on the case of Heorhiy Gongadze. The journalist disappeared four years ago, on 16 September 2000, and his headless corpse was discovered on 2 November 2000. "Now, with the Gongadze case a major political issue in the run-up to the presidential election, new facts have been revealed by both the press and the prosecutor's office," RSF wrote in a letter to Ukrainian Prosecutor-General Hennadiy Vasilyev. "This new information is of capital importance, and if you think it is credible, it is time for the judicial process to move on to the next stage -- a public and fair trial." RSF was referring to new information published in "The Independent" in June based on documents that said Gongadze was being shadowed by police officers at the time of his disappearance, and to the Prosecutor-General's Office's announcement the same month that the Ukrainian investigators were holding in custody a "Mr. K" who reportedly confessed to murdering Gongadze and described the circumstances of his death in detail. JM

UKRAINIAN PROSECUTORS SEEKING TO SUMMON OPPOSITION LEADER FOR RUSSIAN PROBE. The Ukrainian Prosecutor-General's Office has so far not succeeded in delivering a notice from the Russian Military Prosecutor's Office to Ukrainian opposition leader Yuliya Tymoshenko requesting that she appear in Moscow by 16 September for a criminal investigation, Interfax reported on 15 September, quoting Ukrainian Prosecutor-General's Office spokesman Serhiy Rudenko. Russian prosecutors reportedly suspect Tymoshenko of bribing Russian Defense Ministry officials when she headed Ukraine's Unified Energy Systems in 1995-97. Tymoshenko's Fatherland Party said in a statement on 16 September that the Russian prosecutors' move is "yet another provocation," organized with encouragement from Ukrainian President Leonid Kuchma and Russian President Vladimir Putin, against Tymoshenko for her support to the presidential bid of opposition candidate Viktor Yushchenko instead of that of Prime Minister Viktor Yanukovych. JM

OPPOSITION TV CHANNEL SWITCHED OFF IN KHARKIV DUE TO 'TECHNICAL REASONS.' The Alpha-Communications operator of cable television network in Kharkiv has suspended the transmission of the Channel 5 television, Ukrainian news agencies reported on 15 September. Channel 5, which is owned by lawmaker and businessman Petro Poroshenko, supports the presidential bid of opposition Our Ukraine leader Yushchenko. An Alpha-Communications official told Interfax on 15 September that Channel 5 was excluded from the network "temporarily" and due to "technical reasons," but did not elaborate. Channel 5 was repeatedly removed from cable-television networks in different Ukrainian cities over the past two months (see "RFE/RL Newsline," 16 August 2004). JM

PACE CALLS ON KYIV TO AMEND PRESIDENTIAL ELECTION LAW. The Monitoring Committee of the Parliamentary Assembly of the Council of Europe (PACE) said in a press release on 15 September that the ongoing presidential campaign in Ukraine fails to meet democratic election standards and is a "cause of great concern" for PACE. This assessment was based on a recent fact-finding mission by PACE rapporteurs Hanne Severinsen and Renate Wohlwend in Dnipropetrovsk and Donetsk. The PACE Monitoring Committee called on the Ukrainian authorities to urgently amend the presidential election law in order to grant domestic nonpartisan organizations whose statutory aim is election observation the right to observe the elections with status equal to that of international observers. The committee appealed to Kyiv to stop the practice of employing civil servants in the campaign and using public resources for the purpose of campaigning. The committee also said it is concerned by the small number of international observers to be sent by various international organizations and foreign states for the 31 October elections in Ukraine (some 800 for the country's 33,000 polling stations). JM

ROMANIAN PRESIDENT REJECTS UKRAINIAN CANAL CLAIMS. President Ion Iliescu on 14 September dismissed claims by the Ukrainian Foreign Ministry that Romania has built three canals that have harmed the Danube Delta's ecosystem, characterizing the accusations as "aberrations" and "fiction," Mediafax reported on 15 September. Iliescu said on Romania 1 public television that the country has only built one shipping canal, the Danube-Black Sea canal, and that has nothing to do with the delta. Earlier the same day, Natalia Zarudna, a high-ranking official in the Ukrainian Foreign Ministry, had accused Romania of seriously harming the delta, warning that Romanian actions could cause by 2010 "an Aral Sea in Central Europe." Zarudna said Romania built a network of three canals in the delta and is working on a fourth, adding that the canals affect the Ukrainian part of the delta. ZsM

RUSSIA RECOGNIZES EXPORT CERTIFICATES FOR TRANSDNIESTER GOODS. The deputy chairman of Russia's Chamber of Commerce and Industry, Boris Pastuhov, announced in Moscow following his recent visit to Transdniester that Russia will recognize and accept certificates of origin for Transdniester goods, the BBC reported on 15 September. Moldova recently banned the traffic of commodities via all border checkpoints along the Transdniester border with Ukraine (see "RFE/RL Newsline," 18 August 2004). Pastuhov added that Russia is ready to participate in the privatization process in Transdniester and plans to invest in companies in the region. Pastuhov warned that the Moldovan economic blockade against Transdniester will only harm people from both Moldova and Transdniester. In response, Moldovan Reintegration Deputy Minister Victor Postolachi said Chisinau will "insist through all international structures" that all illegal trade be halted in the region. ZsM


Last week, nearly 50 lawmakers from three groups in the Verkhovna Rada -- Center, Democratic Initiatives-People's Power, and the Popular Agrarian Party -- announced that they were quitting the pro-government coalition in the Ukrainian legislature.

The move appears to have dealt an unexpected blow to the position of Prime Minister Viktor Yanukovych, who is also a leading presidential candidate. Yanukovych and Our Ukraine leader Viktor Yushchenko are generally tipped to fare best in the 31 October presidential ballot and fight for the presidency in a runoff three weeks later. "It is not pleasant for me to speak about, but I must say that the parliament is becoming an unreliable partner," Yanukovych commented on the parliamentary desertions on 11 September.

The parliamentary desertions from the pro-government camp also seem to have cast further doubt on the successful outcome of the constitutional reform devised by the presidential administration in cooperation with the Communist Party and the Socialist Party in order to shift the center of political power from the president toward the government and the parliament. The opposition Our Ukraine and Yuliya Tymoshenko Bloc believe that the constitutional reform is a ploy by incumbent President Leonid Kuchma intended to secure the current regime's control over the country in the event that Yushchenko wins the presidential elections. The Verkhovna Rada approved preliminarily a constitutional-reform bill in June. Now, during the current parliamentary session, 300 lawmakers must back the bill for it to become law. The desertions make such a vote problematic, if not impossible.

On 13 September, President Kuchma met with leaders of caucuses of the pro-government coalition to discuss the situation in the legislature. The meeting was not attended by Verkhovna Rada speaker Volodymyr Lytvyn, the leader of the Popular Agrarian Party, whose lawmakers left the pro-government coalition. "[Kuchma] regrets when people do not understand that the [parliamentary] majority and the [constitutional] reform are necessary not for the president, but for Ukraine," Social Democratic Party-united parliamentary caucus head Leonid Kravchuk commented after the meeting. Kravchuk also expressed regret that the Ukrainian president has no constitutional power to dissolve the legislature in the event that it is incapable of forming a viable coalition to support the government.

Meanwhile, lawmaker Stepan Havrysh told journalists after the meeting with Kuchma that the pro-government coalition in the parliament "formally" consists of 230 lawmakers; that is, it still has a majority in the 450-seat Verkhovna Rada. "Lowering your trousers does not mean taking them off completely," Havrysh added in an apparent reference to the fact that 11 lawmakers from the Center group left the pro-government coalition for good, while 36 legislators from the Democratic Initiatives-People's Power caucus and the Popular Agrarian Party announced their "suspension" of participation in the alliance. It seems that only a parliamentary vote on some government-proposed bill might eventually clarify the situation in the Verkhovna Rada and show whether or not the notions of "withdrawal and "suspension" are essentially different for Ukrainian lawmakers.

The breakup of the pro-government parliamentary majority plays directly into the hands of Our Ukraine and the Yuliya Tymoshenko Bloc, the opposition alliance that sees Yushchenko as a likely winner of presidential elections in 2004 and is currently uninterested in any political reform curbing presidential prerogatives. But it is not unlikely that Prime Minister Yanukovych also opposes pursuing the constitutional reform in the hope that he, not Yushchenko, will grab the highest political post in Ukraine. It is noteworthy that television channels controlled by the presidential administration -- UT-1, 1+1, and Inter -- kept silent last week about the split in the parliamentary majority, while the Donetsk-based Ukrayina television station controlled by oligarch Rynat Akhmetov, Yanukovych's closest ally, reported extensively on the event. Thus it appears that a likely failure of political reform in Ukraine in 2004 is the most unwelcome prospect primarily for Kuchma and his chief of staff, Viktor Medvedchuk, who might find it hard to secure significant political roles under a new president.

Some Ukrainian commentators have argued that the main reason for the coalition split was economic rather than political. Lawmakers from the Democratic Initiatives-People's Power caucus suspended their participation in the pro-Kuchma majority citing a lack of coordination and communication between the government and people's deputies regarding privatization processes in Ukraine. Last week, Yanukovych's cabinet decided to pool state stakes in the Halychyna and Ukrtatnafta oil refineries with the basic capital of state-controlled oil company Ukrnafta. The move reportedly benefited the Pryvat business group -- whose interests are lobbied by the Labor Ukraine caucus in the Verkhovna Rada -- to the detriment of the so-called Kharkiv Group of deputies united in Democratic Initiatives-People's Power. Thus, in this context, the pullout of Democratic Initiatives-People's Power from the pro-Yanukovych parliamentary coalition might have been intended as a sort of blackmail applied to Yanukovych in particular and his cabinet in general.

On the other hand, the withdrawal of Lytvyn's agrarians from the pro-government coalition can be seen as an attempt by the Ukrainian parliamentary speaker -- who was previously head of the presidential administration -- to find a more distinct political role for himself in a post-Kuchma era. Opening the fall parliamentary session on 8 September, Lytvyn suggested that irrespective of who wins the presidential election, the winner will treat the Verkhovna Rada like his predecessors did -- that is, like a body expected to follow the political will of the head of state. Lytvyn expressed his indignation over "provocative disregard for constitutional norms" in the election campaign and said Ukraine suffers from "criminal" privatization and "total corruption." He also proposed creating a special parliamentary commission to monitor how election laws are observed in the presidential campaign. The commission was set up with votes from the opposition and lawmakers of the three factions that deserted the pro-government coalition.

It is hard to say whether the seeming disintegration of the pro-government coalition in the Verkhovna Rada might seriously impair Yanukovych's presidential bid. The executive machine in Ukraine and the government-controlled electronic media seem to work uninterruptedly to promote him as Kuchma's only possible successor. But last week's manifestation of defiance by some 50 lawmakers with regard to Kuchma and Yanukovych suggest that -- at a minimum -- Ukraine's political class perceives Kuchma's political legacy and Yanukovych's possible succession as neither unquestionable nor secure.