Ukraine Quarterly Digest: July–September 2018

BY ANDRIAN PROKIP

This summer, traditionally a quiet time in Ukraine, was punctuated by developments in both the domestic political scene and in relations with neighboring states. The political season kicked off in earnest in the last week of August in anticipation of presidential and parliamentary elections in 2019. Activity on this front coincided with fast-moving developments in separatist Donbas, a new round of disagreements with Hungary, the suspension of the Ukraine-Russia “friendship treaty,” and increasing strain with Russia over the detention of Ukrainian vessels bound for ports in the Sea of Azov.

1. FOREIGN POLICY ISSUES

Another Round of Tensions with Hungary

Ukrainian-Hungarian relations continued to be difficult in the third quarter of 2018.

In July, Hungarian prime minister Viktor Orbán expressed doubt that Ukraine’s efforts at European integration would be successful, predicting that Ukraine would instead become a nation permanently in debt to Western institutions. His comments on “debt slavery” prompted a sharp reaction from the Ukrainian Ministry of Foreign Affairs, which issued a statement characterizing Orbán’s remarks as inconsistent with EU policies (Hungary is an EU member) and resembling “the approaches of the aggressor country”—that is, Russia. Hungarian officials followed up by declaring that Hungary would continue to block Ukraine’s efforts at integration with the EU and NATO.

This dispute was followed by a new source of tensions. In August the Hungarian government established the new position of ministerial commissioner in charge of Transcarpathia developments. The incumbent, who had previously held a Hungarian government position overseeing cross-border relations, was tasked with (among other things) responsibility for contacts with the ethnic Hungarian minority in the Ukrainian region of Transcarpathia. Ukraine’s Foreign Ministry demanded an explanation for why Hungarian officials were concerning themselves with affairs in Ukraine, and sent the Hungarian diplomat an official note on the matter. Kyiv also announced its readiness to bar the new commissioner from entering the country.

The situation was exacerbated in September 2018, when a video purporting to show Ukrainian citizens accepting Hungarian citizenship in a Hungarian consulate located in the Ukrainian town of Beregove, Transcarpathia, went viral. The video captured Hungarian officials instructing new citizens to conceal the fact of their Hungarian citizenship from Ukrainian authorities. The video has become a public scandal in Ukraine, for dual citizenship is forbidden by the Ukrainian constitution. Moreover, Kyiv sees dual citizenship as a threat to national security. This fear has a solid grounding: dual citizenship became widespread in Crimea before the region’s annexation by Russia. About 100,000 Ukrainian Zakarpattia residents also currently hold Hungarian passports.

Pavlo Klimkin, Ukraine’s foreign minister, has officially warned Hungary that the consulate shown in the video would lose its accreditation in Ukraine, characterizing Hungary’s actions as a clear violation of the Vienna Convention on Consular Relations. He pointed out that relations between the two countries could either move onto a path of constructive cooperation or continue on their recent trajectory of destructive behavior, which could only lead to a dead end. Péter Szijjártó, Hungary’s foreign minister, responded by characterizing Kyiv’s rejection of dual citizenship for Transcarpathian Hungarians as an act of intimidation and intimated that Hungary might take additional steps to slow Ukraine’s integration into the EU should Ukraine expel the Hungarian diplomat.

Tensions between Kyiv and Budapest have now dragged on into their second year, with no resolution in sight.

Relations with Russia
Ukraine-Russia relations continued to worsen in many ways.

Russia’s Blockade of the Sea of Azov
Beginning in late spring 2018, Russia commenced an undeclared “blockade” of the Sea of Azov, which is bordered by Ukraine on the north and west and by Russia on the eastern littoral; to the south it connects to the Black Sea through the Kerch Strait. In a departure from the earlier practice of quick searches of selected ships, Russian military vessels started conducting lengthy official searches of Ukrainian and foreign ships transiting to Ukrainian seaports through the Kerch Strait. These cargo checks last from several days to a week and may be repeated at multiple points along the route, which undermines trade in Ukrainian ports on the Sea of Azov and results in economic losses for the ship owners and those conveying cargos.

The legal basis for the Russian Border Patrol’s cargo checks is a 2003 cooperation agreement between Russia and Ukraine with respect to vessels transiting the Sea of Azov and the Kerch Strait. However, this right to examine ships does not entail the right to block all vessels transiting to and from Ukrainian ports. The way the checks are conducted signals that Moscow has seized on them as another way of putting pressure on Ukraine.

The U.S. government has supported Ukraine in this matter. The U.S. Department of State appealed to Russia to stop “harassment of international shipping” in the Sea of Azov and the Kerch Strait. Kurt Volker, Special Representative for Ukraine, expressed concern on the expansion of Russian naval operations in the Sea of Azov and said that the United States was ready to boost arm supplies to Ukraine to strengthen its naval and air force and help it resist Russia’s aggression.

The Ukrainian government has tried to secure its ports in the Sea of Azov. Kyiv has announced plans to build a defense facility and to strengthen its fleet to provide greater security of shipping in the Sea of Azov. Anti-mine measures are a priority for the new base. In an interview with the Washington Post, Ukrainian president Petro Poroshenko said that Russia’s actions with respect to shipping are viewed as tantamount to taking control of the Sea of Azov, much as happened in some parts of the Black Sea.

Suspending the Treaty on Friendship with Russia
In September 2018, President Poroshenko and the Ukrainian National Security and Defense Council announced that the Treaty on Friendship, Cooperation and Partnership between Ukraine and the Russian Federation would not be extended for another ten-year term.

The treaty became effective on April 1, 1999, and envisioned a framework of mutual recognition and cooperation between the two countries. Under Article 2 of the treaty, Russia recognizes and agrees to respect Ukraine’s borders. In light of Russia’s policy of aggression toward Ukraine, and since the treaty’s term was set to expire in 2019 anyway, the president and Security Council decided to not to extend it, sending an official note to Moscow with this decision on September 21.

MH17 and Russia’s Accusations
On September 17, Russian officials once again accused Ukraine of downing the MH17 aircraft in July 2014. To buttress their claims, Russian representatives produced a recording, supposedly of Ukrainian servicemen, talking about shooting down passenger aircraft two years after the crash. Russian officials have also said that the rocket launcher Buk-M1, identified as involved in the attack, came from western Ukraine rather than from Russia’s anti-aircraft brigade in Kursk. Officials from the Russian Defense Ministry have argued that Russia’s role in shooting down the aircraft was fabricated.

Russia’s claims that the “new information” it provides should exonerate Russia are received by the Joint Investigation Team in the Netherlands without adjudication as to their merits. Ukrainian officials have denied the charges of liability as false. The British defense secretary Gavin Williamson called Russia’s arguments another example of disinformation. In May and again in June of this year, EU representatives called on Russia to admit its responsibility for shooting down the MH17 aircraft. The governments of Australia and the Netherlands similarly accuse Russia of complicity in downing the MH17 aircraft.

Council of Europe
In September, Ukraine made a voluntary contribution to the budget of the Council of Europe in the amount of U.S. $400,000 over and above its mandatory membership payment. This step was to support the Council of Europe, which was in a difficult financial situation after Russia refused to make its required contribution.

2. INTERNAL AFFAIRS

Labor Migration
Migration out of Ukraine is steadily scaling up, which has increasingly drawn the attention of politicians and society to this problem. As Ukraine’s foreign policy minister explained, about 1 million Ukrainians leave their country for permanent residence abroad every year.

Although Russia is still the country where most Ukrainian expatriates live, Poland currently receives the largest number of migrants. According to official data, about 1 million Ukrainians permanently reside in Poland. Some have obtained Polish citizenship, while others have obtained permanent residence. An additional number travel to Poland to work on a seasonal basis. During 2015–2017, among all other nationalities living in Poland, Ukrainians were at the top in buying real estate. In general, last year Ukrainians bought almost a quarter of all real estate sold to foreigners in Poland.

In its current state of economic development, Poland needs new workers, which is the major reason why Polish officials look favorably on Ukrainian labor migrants. Some officials have said that the rapid growth in Poland’s DGP (4.6 percent per annum) would not have been possible without foreign workers.

However, this large outmigration also poses a threat to Ukraine’s economy. The National Bank of Ukraine identified migration as a serious risk to Ukraine’s own economic development.

Political Prisoners
Dozens of Ukrainian citizens are incarcerated in Russian jails. A global campaign demanding the release of Ukrainian political prisoners ramped up activities in the third quarter of 2018. The U.S. embassy in Ukraine issued a statement requesting that the Russian government stop using the tactics of enforced disappearances and torture to stifle political dissent and persecute Ukrainians from Crimea.

A major thrust of the campaign is to free the Ukrainian filmmaker Oleg Sentsov, who has been on a hunger strike for more than 140 days (according to his lawyer, he has agreed to take an oral nutritional supplement, under threat of being force-fed). The number of Sentsov’s supporters worldwide has increased markedly. As an expression of solidarity with Sentsov, Czech filmmakers announced they would go on a rotating hunger strike, and on August 28, Lech Walesa, former president of Poland (1990–1995), proposed Sentsov be awarded the Nobel Peace Prize. A group of European Parliament MPs nominated Sentsov for the Sakharov prize.

Actions in support of Sentsov have taken place in Russia as well. On July 21, a banner demanding his release appeared close to the Russian White House. A similar banner was displayed on September 7 near the Kyiv railway station in Moscow. A number of people have held individual demonstrations near the Kremlin. However, the Russian commissioner for human rights, Tatyana Moskalkova, called on protestors not to dramatize the situation.

Another prisoner, twenty-year-old Pavlo Gryb, appealed to Ukrainians to support Ukrainian political prisoners on July 23. A person with special needs, Gryb was kidnapped in Belarus and is now in Russia, accused of terrorism.

Amending the Constitution
On September 3, President Poroshenko sent to parliament a bill that would amend the constitution to stipulate Ukraine’s intentions to join the EU and NATO and to ban foreign military bases on Ukraine’s territory. The bill is currently under review by parliament.

Disputes among the Anticorruption Agencies
The two main Ukrainian anticorruption agencies are engaged in internal struggles with each other. The head of the Special Anticorruption Prosecutor’s Office (SAPO), Nazar Kholodnytskyi, came under scrutiny for possibly revealing a secret investigation to journalists in an anticorruption case and for having personal contact with one of the suspects in another case. During its investigation, the National Anti-Corruption Bureau of Ukraine (NABU) installed eavesdropping devices in Kholodnytskyi’s office. The overheard conversations established facts of concern. Kholodnytskyi has denied all accusations. On July 26, the Qualification-Disciplinary Commission for Prosecutors issued an official reprimand to SAPO but did not dismiss Kholodnytskyi.

At the same time, the General Prosecutor’s Office launched an investigation into Artem Sytnyk, head of NABU, for possibly revealing secrets to another group of journalists.

These proceedings went on amid growing tensions between key anti-corruption officials in Ukraine, especially Kholodnytskyi and Sytnyk. This conflict escalated into open clashes between the SAPO and NABU teams on September 19, 2018.

General Prosecutor’s Office and Journalists
Because of its case against Sytnyk, the GPO sought from the courts permission to access the cell phone data of Natalya Sedletska, a well-known Ukrainian investigative journalist working for Radio Free Europe, to try to get information on her sources. On August 27 one of the Kyiv regional courts agreed to the request. The data the GPO sought concerned the geolocation history of journalists in an attempt to find out whether and when they had met with Sytnyk.

The case raised concerns both in Ukraine and abroad. The U.S. embassy in Ukraine pointed out that such intrusive oversight could have a chilling effect on press freedom and anticorruption efforts in Ukraine. The EU’s spokesperson for foreign affairs and security policy expressed the European Commission’s concerns on this issue as well, saying that no court’s decision should violate the media’s freedom of speech.

Later, on September 18, the appeals court of Kyiv city modified its decision and limited access to Sedletska’s phone data to her geolocation only. On the same day the European Court of Human Rights obligated the GPO not to access phone data for a month to give Sedletska time to defend herself in this court. With that, the GPO suspended accessing Sedletska’s cell phone.

Church’s Autocephaly: A Work in Progress
The process of achieving autocephaly for the Ukrainian Orthodox Church from the Constantinople Patriarchy reached a decisive moment in September 2018. Ecumenical Patriarch Bartholomew I, in the continuing process of granting autonomy to the Orthodox church of Ukraine (earlier stages in the story were described in a previous issue of the Digest), appointed two of his representatives, or exarchs, to travel to Ukraine and prepare the grounds for further steps toward autocephaly One exarch is a clergy member from the United States, the other is from Canada, and both are of Ukrainian origin. The exarchs have met with representatives of the Ukrainian Orthodox Church of the Kyiv Patriarchate and the Ukrainian Autonomous Orthodox Church, which are interested in being part of a single independent canonical Orthodox Church. The Ukrainian Orthodox Church (Moscow Patriarchate), however, protested and threatened to break off the eucharist dialogue with Constantinople.

The current Church dispute may yet devolve into a serious split among the Orthodox churches. The Russian Orthodox Church opposes Constantinople’s decision and tries to maintain its control over the Ukrainian Orthodox Church.

The U.S. Department of States issued a statement saying that the United States strongly supports religious freedom, including the freedom of members of groups to govern their own religion according to their beliefs and to practice their faiths freely without government interference.

Environmental Disaster in Crimea
In late August, toxic emissions from a titanium plant in Armyansk, a town in the northern part of Russia-occupied Crimea, began sickening people and destroying crops. Evacuations were carried out on both sides of the Russia-Ukraine border. Kyiv points to recent factory operations as the source of the pollution, while Russian authorities say it is an effluent pond whose mitigating stream had been cut off by Ukraine, leaving a dried-up pond bed laden with sulfur compounds. Other explanations have also been offered. Though Russian authorities in Crimea have since closed the plant, it is unclear how the issue can be addressed other than through strained diplomatic channels.

Attacks on Civil Activists
Attacks on civil activists in Ukraine became more frequent over the summer. For example, on July 31, an unidentified person threw acid on civil activist and member of the Kherson City Council Kateryna Handziuk, who sustained serious injuries. In late September another unidentified person shot Oleh Myhailyk, an activist in Odessa who was well known for his protests against illegal construction. Though the police arrested suspects in both cases, civil society organizations protested and demanded that President Poroshenko ensure the safety of civil activists in Ukraine.

3. PROGRESS IN REFORMS AND SUCCESS STORIES

In 2018, Ukraine improved its ranking in the Fraser Institute’s Economic Freedom of the World index, moving up to 134th place from 162nd place in 2017.

The summer saw some new signs of an improving economy. For instance, 2018 was the best year in the volume of peas exported, and Ukraine was among Europe’s leading producers of honey, holding fifth place in global exports of this commodity. Also, Ukraine was among the top countries exporting beer to the EU. The United States was the top importer of small arms produced in Ukraine.

The IMF mission visited Ukraine and held intense talks with government officials on September 6–19, 2018. According to Ukrainian officials, an agreement was reached on raising gas prices in Ukraine, a complicated and contentious issue (described in more detail here), but few details were released on the agreement. The National Bank of Ukraine expects to receive U.S. $1.9 billion in loans by the beginning of 2019. The IMF mission left Ukraine without issuing an official statement.

4. THE SITUATION IN THE DONBAS

On July 1 and again on August 23, Kyiv and the Russia-backed separatists in the Donbas agreed on an armistice, to little effect: after each agreement was signed, clashes resumed on the front line. According to the Organization for Security and Cooperation in Europe’s Special Monitoring Mission–Ukraine, tensions along the front are high.

September 5 marked the fourth anniversary of the signing of the Minsk agreements. Unfortunately, not much progress has been made since the original signing, and the fighting has never stopped. Kurt Volker called on Russia to keep its commitments and end the fighting.

Power Changes Hands in Donetsk
Aleksandr Zakharchenko, leader of the so-called Donetsk People’s Republic (DNR, recognized by Ukraine’s Prosecutor General’s Office as a terrorist group), was killed in a bomb explosion in Donetsk on August 31. Russia’s Foreign Ministry spokesperson called Zakharchenko’s death “a tragedy for Ukraine,” describing it as a terrorist act and refusing to exclude the possibility that official Kyiv was directly involved. Russian president Vladimir Putin expressed condolences at Zakharchenko’s death and said that Russia would “always be with Donbas inhabitants.” The Investigative Committee of the Russian Federation opened an investigation of the assassination as an international terrorist act. The Russian foreign minister, Sergey Lavrov, said that the assassination made peace talks in the Normandy format “inappropriate,” pointing out that neither Berlin nor Paris had condemned the deed and describing it as flouting the Minsk accords.

The Ukrainian Foreign Ministry and security services denied Kyiv’s involvement in Zakharchenko’s murder. Ukraine’s intelligence agencies said they had information supporting a Russian role in the murder of Zakharchenko.

After the death of the DNR leader, different separatist factions in the DNR competed with each other for power. The competition ended in the appointment of Denis Pushylin as acting DNR leader. After the appointment, Pushylin charged the Western and Ukrainian secret services with conspiring to kill Zakharchenko. In rebuttal, the Ukrainian security services made public an audio recording of Pushylin talking about different ways to “dispose of” Zakharchenko.

Faux Elections in the Occupied Territories
Currently, both separatist statelets are preparing for elections of the self-styled republics’ heads and local parliaments on November 11. Leonid Kuchma, Ukrainian ex-president and a participant in the Minsk Group, said that this decision endangered the Minsk process. A similar opinion was expressed by Ambassador Volker.

The ongoing difficulties in Russia-occupied territories, along with the unwanted infighting between the anticorruption agencies, somewhat obscured Ukraine's real economic gains over the summer and the president's firmer commitment to joining Western institutions.