Ukraine Quarterly Digest: October – December 2017

The end of 2017 saw some important and long-awaited changes in Ukraine, including the passage of legislation to reform the judiciary, the pension system, and the health care system—all steps greeted positively by the IMF and World Bank. Agreements with the United States to assist with Ukraine’s cybersecurity efforts and defensive needs were also welcome. At the same time, the country was shaken by new tensions with neighboring countries, especially Belarus, over charges of spying, and Poland, as a result of how memory policies in the two countries are structured. Turbulence on the domestic front also manifested in large rallies and protests of various origins. Disagreements within the anticorruption agencies resulted in lack of progress on an independent anticorruption court, which international bodies see as critical. As the 2019 elections draw near, 2018 is unlikely to be less turbulent domestically.

1. FOREIGN POLICY ISSUES

Relations with the United States

Cybersecurity. On September 29, the United States and Ukraine held the first Bilateral Cybersecurity Dialogue in Kyiv. The United States recognized cyberthreats as one of the most crucial challenges for Ukraine and confirmed its desire to support the strengthening of Ukraine’s national cybersecurity, especially that pertaining to critical infrastructure and the military. Later, the U.S. embassy said that the country would provide $5 billion in assistance to Ukraine to strengthen cybersecurity. On November 7, Ukrainian president Petro Poroshenko signed the law “On Key Principles of Ensuring Ukraine’s Cyber Security” (which had been approved by parliament on October 5).

Defensive Aid. The U.S. National Defense Authorization Act for Fiscal Year 2018 went into force on December 12. According to Section 1234 of the act, the United States has approved $350 million in aid to Ukraine to enhance the country’s security during the 2018 fiscal year. That figure includes funds for lethal defensive aid. According to the act, the support is to include air defense and coastal defense radars, naval mine and countermine capabilities, and littoral-zone and coastal defense vessels. The act also stipulates the treatment of wounded Ukrainian soldiers in the United States (including transportation, lodging, meals, and other appropriate nonmedical support in connection with such treatment) and education and training of Ukrainian health care specialists.

Turkey

Erdoğan’s Visit to Kyiv. Turkey’s president Recep Tayyip Erdoğan and a presidential delegation visited Kyiv on October 9. The Ukrainian and Turkish presidents held a one-on-one meeting that lasted three hours instead of the planned forty-five minutes. Later, President Erdoğan stated that Turkey did not recognize the legitimacy of Russia’s annexation of Ukrainian Crimea and would continue to support Ukrainian sovereignty and territorial integrity. That announcement was especially important in light of the huge Crimean Tatar diaspora population living in Turkey.

Release of Political Prisoners. President Erdoğan subsequently acted as a mediator in the release of two Ukrainian citizens, the Crimean Tatars Akhtem Chiygoz (deputy chairman of the Mejlis of the Crimean Tatar People) and Ilmi Umerov (a Crimean politician), both of whom had been imprisoned in Russia on political grounds: they opposed and did not publicly recognize the Russian occupation of the Crimean Peninsula. Chiygoz had been charged with organizing an illegal demonstration and sentenced to eight years of imprisonment. Umerov had been charged with fomenting separatism and sentenced to two years of imprisonment. Both trials had been condemned by international rights organizations and Western countries.

As a result of the negotiations between President Erdoğan and Russia, on October 25 the prisoners were released and flown to Ankara, where they met with Turkey’s president. Two days later they landed in Kyiv. The former chairman of the Mejlis, Mustafa Dzhemilev, announced later that the prisoners had been exchanged for criminals, the murderers of the editor of the Kavkaz Center website.

Diplomatic Tensions with Belarus

On November 17, the National Public Broadcasting Company of Ukraine disclosed that one of its journalists, Pavlo Sharoiko, had been arrested in Minsk. The Belarusian security services accused him of espionage (on behalf of Ukraine) and said he had confessed his involvement in intelligence activity. The KGB, the Belarussian state security agency, also stated that Sharoiko had established his own network of agents and was investigating the Russian military in Belarus. The Intelligence Department of Ukraine’s Ministry of Defense stated that Sharoiko, who had been the department’s spokesman, had left the service in 2009 for health reasons.

On November 20, Belarus declared a Ukrainian diplomat in the Minsk embassy persona non grata for directing Sharoiko’s activity. In response, the Ukrainian Foreign Affairs Ministry (MFA) declared one of the diplomats in the Belarusian embassy in Kyiv persona non grata.

Diplomatic Tensions with Serbia

In late October the Ukrainian ambassador to Serbia said in an interview with local media that Russia was using Serbia to destabilize the Western Balkans and destroy united Europe. As might be expected, this statement prompted criticism from official Belgrade, which responded with a statement that the Ukrainian embassy was seeking to degrade Russian-Serbian relations.

Polish-Ukrainian Tensions over Historical Memory Policies

Poland and Ukraine have enjoyed very warm relations over the past two decades, during which time Poland was probably Ukraine’s most loyal advocate in the West. However, historical memory is an extremely sensitive issue in Polish-Ukrainian relations. During all the years of independence, tensions have occasionally flared on this ground. In some cases, variant readings of history were promulgated by provocateurs. But until recently all those incidents were handled at the top levels, and such engagement sometimes resulted in even closer and warmer relations between both states and their citizens.

In the latest episode, tensions that had been simmering over the past two years reached a boiling point in the fourth quarter of 2017. Former Polish president Aleksander Kwaśniewski (who had earlier participated in negotiations with Ukraine and whose role in improving relations between the two states is significant) during his speech in Kyiv at the 14th YES (Yalta European Strategy) Conference noted a growing risk of worsening relations. Among the reasons Kwaśniewski mentioned was rising nationalism in Poland (though that did not appear exceptional because of similar processes occurring across all of Europe).

In 2016, the Kyiv city administration renamed a couple of streets after some leaders of the Ukrainian liberation movement, which caused concern in Poland. Later, in July 2016, the Polish parliament voted to recognize the Wolyn massacre of 1943–1944 as a genocide carried out by a branch of the Ukrainian Insurgent Army (UPA). Some observers consider that renaming the streets had pushed Poland into its decision, even though streets in some other big cities in Ukraine had already been named after members of the liberation movement. The Ukrainian parliament expressed concern over acts of vandalism at Ukrainian monuments in Poland. From 2014 up to mid-2017 at least fifteen such cases of vandalism of Ukrainian monuments in Poland occurred (compared to four cases of vandalism of Polish memorials in Ukraine).

Tensions started heating up beginning on April 26, when in the Polish village of Hrushowice a group of activists, all members of nationalist organizations, demolished the memorial to soldiers of the UPA (erected in 1994). The vandalism occurred two days before the seventieth anniversary of the Wolyn tragedy and in the presence of local officials and police, who did not try to stop it. Local officials said that the memorial had been erected illegally. However, it had stood for more than twenty-three years, and in Ukraine some monuments to Polish memory were supposedly illegally erected too. So a sort of public consensus on leaving those monuments alone had been observed before the period of high tension and the acts of vandalism.

In response to the destruction of the monument, the government-run Ukrainian Institute of National Memory announced its decision to suspend Polish applications for building a new memorial in Ukraine or registering and restoring existing memorials. The Ukrainian MFA called the act a provocation. In any event, it contributed to aggravating the situation, with official recriminations flying on both sides and various diplomatic maneuvers launched to cool tensions while defending the home nation’s stance.

On November 2, Poland announced a ban on entry into the country of anyone who subscribed to an anti-Polish ideology and those who stood in the way of Poland renewing its memorial sites—an indication of the pain caused by each country’s historical memory policies. Also denied entry was the executive secretary of the State Interdepartmental Commission to Perpetuate the Memory of Participants in Antiterrorist Operations, Victims of War and Political Repression, part of Ukraine’s Cabinet of Ministries (this news leaked out on November 18 when the official tried to enter Poland). The Ukrainian MFA responded with a statement asserting that Ukraine did not hold an anti-Polish attitude. Perhaps the sharpest rebuttal came a few days later from the head of the Polish MFA, who said that Kyiv was misusing Warsaw. Polish president Andrzej Duda appealed to the Ukrainian president to remove people who harbored anti-Polish attitudes from the state decision-making system.

Historical memory is an especially sensitive and delicate matter, and all steps taken in that arena must be carefully deliberated. Even seemingly insignificant issues can, singly or cumulatively, spark serious problems. A step toward resolving the conflict was taken by Ukrainian president Petro Poroshenko, who on November 8 initiated a meeting of the Consultative Committee of the Presidents of Ukraine and Poland, which was accepted by the Polish side.

Against the background of tensions and President Poroshenko’s obvious desire to move forward in solving them, President Duda visited Kharkiv on December 13. After the meeting with his Polish colleague, President Poroshenko stated that both agreed to shorten the list of Ukrainians banned from entering Poland and that the two countries would jointly look for historical truth on matters involving their countries in the past. It looked as though the two presidents had managed to find a consensus, and by the end of the year much of the tension between the two countries seemed to have dissipated. However, in the first quarter of 2018 new misunderstandings on the ground of historical memory sprang up. More general issues concerning the tensions caused by the two states’ historical memory policies are discussed in another article on Focus Ukraine.

It is important to understand that not all Poles share a belief that conflicts have escalated between the two countries. Donald Tusk, for example—president of the European Commission, former Polish prime minister, and former vice chair of the Polish Senate—said that Poland could not be safe so long as it was in conflict with Ukraine. In speaking about the Polish dispute with Ukraine and Poland’s internal and foreign policy in general, he a question about the reasons and drivers: was it a strategy of the Polish ruling party Law and Justice or was it the Kremlin’s plan?

The Law on Education: Tension Reaches a Peak

In the fourth quarter of 2017 the saga surrounding the new Law on Education, which has sparked tensions with neighboring countries by disallowing the former practice of permitting instruction in minority languages at higher levels of schooling, continued unabated. On October 6, Thorbjørn Jagland, Secretary General of the Council of Europe, commenting on the situation with the law, said that ethnic minorities had to have full rights to and the possibility of studying in their native language (and Ukraine should facilitate same), but should also be fluent in the official language. In general, he underscored that determining minority language rights was a delicate matter.

On October 11–12, the law was discussed by the Parliamentary Assembly of the Council of Europe (PACE). President Poroshenko visited the session, outlined the reasons for the law, and answered questions. In its decision on October 12, PACE expressed concern with articles related to education in minority languages and asked Ukraine to implement further the recommendations and conclusions of the Venice Commission, a body that provides assistance in interpreting constitutional law.

Hungary was dissatisfied with the language principles of the law and started pressuring Kyiv. On September 26 the Hungarian government stated it would block the EU’s decision to establish closer relations with Ukraine. On October 10, while visiting Uzhhorod (a city in the West of Ukraine), the head of the Hungarian MFA said that the new law violated the principles of the EU-Ukraine Association Agreement and that he would initiate revising the agreement at the meeting of EU foreign ministers in Luxemburg. However, he stressed that Ukraine remained a strategic partner for Hungary. In response, the Ukrainian foreign affairs minister said that Ukraine did not have any intention of forcing the assimilation of ethnic minorities and would not leave them bereft of their native languages. At the same time he stressed Kyiv’s intention to support knowledge of the official language by all citizens.

On October 13 a rally was held near the Ukrainian embassy in Budapest under the name “Self-Determination for Zakarpattia” (Zakarpattia is the region of Ukraine bordering Romania, Hungary, Slovenia, and Poland where ethnic Hungarians live). The rally’s organizers said they were demanding self-determination for the region and freedom for all ethnic minorities in the region.

Though Hungary protested the Ukrainian law more strongly than did other of Ukraine’s neighbors, Hungary has problems with its own law on education. The European Commission even decided to bring an action before the European Court of Justice against Hungary on the grounds that amendments to the law were restricting the rights of some universities.

In the end, on October 19, Ukraine and Hungary agreed to collaborate in implementing Ukraine’s law. At the same time, Poland announced it would oppose revising the EU-Ukraine Association Agreement—an idea that had been floated because of Ukraine’s new Law on Education—and would encourage Ukraine and Hungary to cooperate in finding a solution. Finally, on October 23, the Polish vice-prime minister said he had been able to find consensus with Ukraine on the language issues of the education law. The next day Polish and Ukrainian officials signed a declaration guaranteeing the right of minorities to study in their native language. The Bulgarian minority in Ukraine had supported the new law during a round-table discussion in the Bulgarian embassy on October 12.

On December 11 the Venice Commission announced its final decision on Ukraine’s Law on Education. The decision did not share the opinion of the law’s chief critics, including Hungary. The commission agreed that the law provided only a framework and that other, subsequent legislation remained to be developed, so that the principles of the law as it currently stood did not violate the rights of minorities. It encouraged Ukraine to be more specific when developing this legislation so as to decrease the space for interpretation. Among other things, the commission recommended the following steps:

  • Ukraine should continue ensuring a sufficient proportion of education in minority languages at the primary and secondary levels, in addition to teaching the state language.
  • The quality of teaching of the state language should be improved.
  • The relevant transitional provisions of the Law on Education should be amended to provide more time for a gradual implementation of reforms.
  • Within the framework of the implementation of the new Law on Education, Ukraine should enter into a new dialogue with representatives of national minorities and all interested parties concerning the language of education.

The decision by the Venice Commission that the new education law provided only a framework, to be elaborated later, and its subsequent recommendations are likely to bring an end to the acrimonious discussions and ease tensions both inside Ukraine and with Ukraine’s neighbors.

UN Resolution on Crimea

On December 19, the UN General Assembly adopted a resolution on Crimea, with seventy countries voting for it, twenty-six against, and seventy-six abstaining. The resolution, which was introduced by Ukraine and thirty other states, recognized the existence of an international armed conflict between Russia and Ukraine, condemned human rights violations in annexed Crimea, and urged Russia to restore human rights in Crimea in accordance with the order of the International Court of Justice.

Eastern Partnership Summit

On November 24, the fifth summit of the Eastern Partnership took place in Brussels. The summit defined twenty new tasks and aims for the six Eastern partners in the economic, governance, and civil society realms, to be achieved by 2020. Regarding Ukraine’s, Georgia’s and Moldova’s EU membership prospects, the summit acknowledged the European aspirations and European choice of those partners. The summit’s final joint declaration also mentioned the prospects of the partners gaining access to EU’s energy and digital markets. The declaration did not mention Russia’s aggressive actions in Ukraine or a UN peacekeeping mission in the Donbas; however, those issues were brought up indirectly by the EU representatives during the summit.

2. INTERNAL AFFAIRS

Conflicts between the Anticorruption Agencies

The last quarter of 2018 was marked by strong tensions between old and new law enforcement agencies and strong reactions from the West and international organizations. The latest episode started with the conflict between National Anti-Corruption Bureau of Ukraine (NABU) and the National Agency on Corruption Prevention (NACP), which was followed by serious tensions between NABU and the Prosecutor General’s Office of Ukraine (PGOU). This was followed by an attempt to turn NABU in a direction less dependent on certain officials, which effort has failed.

All these events provoked sharp criticism from Western countries and international organizations, which had supported starting anticorruption reform and the establishment of new agencies in Ukraine to battle corruption. Without going deeper into the reasons for those conflicts, it suffices to say that deliberately heavy-handed actions could cause serious losses for Ukraine.

Scandal in the NACP. The agency formed in March 2015 to fight corruption continues to be beset with scandal. On November 14, an employee of the NACP publicly accused the organization’s chief, Nataliia Korchak, of involvement in falsifying verifications of electronic declarations. The employee said that the process was supervised by someone in the presidential administration. The person she named was a prominent contender for a post with the recently established State Bureau of Investigation. After that revelation, it became clear that the NACP was not an elected body but a public commission heavily connected to the presidential administration.

NABU started investigating the case, but this effort was stymied when on November 8 the NACP requested that NABU’s chief, Artem Sytnyk, provide some documents, a request he refused. A few days earlier the NAPC had reprimanded one of NABU’s officers for unethical behavior and conflicts of interest with an MP. The head of the Office of the Special Anti-Corruption Prosecutor (SAPO), Nazar Kholodnytskyi, described the situation as a case of getting even between the two agencies. Later, Chief Prosecutor Yuriy Lutsenko, on the petition of SAPO’s Nazar Kholodnytskii, removed NABU from the investigation into possible corruption in the NACP. The Security Service of Ukraine opened an investigation in this case.

Escalating Conflict between NABU and PGOU. On November 16, the Prosecutor General’s Office of Ukraine said it was starting an investigation into the NABU’s chief’s alleged divulging of information regarding a case the NABU was investigating. On November 22, Lutsenko said that NABU had refused to accept investigations from the Prosecutor General’s Office. In response, NABU’s chief said that they did not refuse such assignments but were shorthanded. But the hottest stage in the escalating conflict between NABU and PGOU started in late November when Chief Prosecutor Lutsenko stated that NABU agents were often acting without the necessary legal permissions.

On November 29, a NABU special agent was detained by the Security Service of Ukraine (SBU) for trying to bribe a clerk of the State Migration Service of Ukraine. The SBU also charged that NABU personnel had tried offering bribes earlier too. Later the SBU conducted a search of NABU’s facilities. The following day, November 30, NABU issued a statement accusing the Prosecutor General’s Office and SBU of hampering its operation on disclosing corruption in the State Migration Service of Ukraine. NABU does not have the right to conduct certain kinds of surveillance activities, such as phone-tapping, and uses the SBU’s services. So NABU charged the SBU with recruiting the person suspected by NABU of trying to discredit NABU later.

On December 5, Lutsenko said there was no battle between the Prosecutor General’s Office and NABU. It is clear that in some cases the chiefs of all the agencies mentioned were speaking emotionally, but the real scope of and reasons for the tensions between NABU and the Prosecutor General’s Office in that period are not clear.

At the same time, official representatives of the United States and the EU stated they would continue supporting NABU and SAPO. On December 5, the EU warned that public disclosure of a corruption investigation by the Prosecutor General’s Office weakened the capacity of Ukraine and hindered NABU’s efforts to battle corruption. The U.S. Department of State condemned the conflict between NABU and the Prosecutor General’s Office, which was regarded as an attempt to undermine the anticorruption institutions supported by the United States. In turn, Chief Prosecutor Lutsenko said that NABU’s chief, Artem Sytnyk, could not cope with his tasks. So Sytnyk recruited the West as an advocate and started a campaign against Lutsenko in the United States.

Attempt to Disarm NABU. In the middle of December, the head of Poroshenko’s and Arseniy Yatseniuk’s parties’ parliamentary faction submitted to parliament the draft of a law that would have allowed the firing of NABU’s chief without an investigation. Successful passage of the law could easily have made the new anticorruption agencies dependent on top officials and would have undermined the efficacy of the anticorruption reforms. Thus the proposed law ignited a barrage of criticism from international organizations and Western countries.

On November 7 Christine Lagarde, managing director of the International Monetary Fund (IMF), stressed that anticorruption reform was among the preconditions of collaboration with Ukraine. She appealed to lawmakers not to support the draft, to stop the attacks on NABU, and to support establishing an anticorruption court in Ukraine. Opinion leaders and officials in the EU and United States issued strong statements on the matter (see, for example, here, here, and here). Adopting the law could have threatened further financial assistance for Ukraine and possibly even cancellation of the visa-free regime. Ultimately parliament decided not to hold a vote on the draft bill.

Saakashvili in Kyiv

Rising Protests. After Mikheil Saakashvili returned to Ukraine, violating border-crossing procedures, Kyiv was rocked by protests led by Saakashvili, some MPs, and civil activists. On October 17 several thousand political and civil society activists and Saakashvili supporters convened on the square in front of the Verkhovna Rada in a planned rally labeled the “All-Ukrainian Gathering” to demand that parliament undertake what the rally’s organizers called “great political reform.” The main demands of the protesters were (1) establishing an anticorruption court, (2) abolishing immunity of the deputies, and (3) adopting new legislation regarding elections. A tent camp was established for the duration of the protest, about a week. There were occasional clashes between the protesters and police and National Guard soldiers. Saakashvili promised he could change the country in seventy days, which is patently impossible because of the need to follow legal procedures. These require a much longer time to effect change. December 3 saw another large rally calling for the impeachment of Poroshenko.

Arrest. On December 5, the SBU conducted an operation jointly with the Prosecutor General’s Office to arrest Saakashvili at his apartment in downtown Kyiv. Attempting to avoid arrest, Saakashvili climbed out onto the roof of the building and threatened to jump off.  However, the drama did not help, and Saakashvili was captured by officers. He was charged with cooperating with the Ukrainian oligarch Vitalii Kurchenko (close to the absconded Viktor Yanukovych), who had likewise fled to Russia, and with receiving funds from Kurchenko and others to start a coup in Ukraine. Chief Prosecutor Lutsenko went to parliament to address the members and inform them of the charges and some of the evidence. He played sound recordings of people (some of the voices sounded like Saakashvili’s) discussing collaborating on those issues.

During the arrest, a wildcat rally of Saakashvili supporters took place outside the building. Saakashvili was not arrested for some time: his supporters, who had gathered near his apartment, forcefully freed him from the SBU van and the crowd moved toward the parliament building to start a protest rally. The law enforcement officers refrained from opening fire (though they would have been within their rights to do so) to prevent escalating the situation. Saakashvili denounced the charges as trumped up, then turned to demanding the resignation of Lutsenko and the head of the SBU, laying blame for the events at Poroshenko’s feet and demanding he be impeached.

After Saakashvili managed to escape from custody, protests at the parliament building became more organized, with more people participating and a tent camp established. Saakashvili even promised to remain in the camp with the protestors. The next morning the police tried to take the camp by storm but failed; some protesters were injured in the attempt. Saakashvili himself was not in the camp, however, but ensconced in a hotel five minutes’ walk from the camp.

Three days after the first attempt to arrest Saakashvili the police seized him in a friend’s apartment and detained him in jail. Another spontaneous protest occurred outside the facility. On December 11, the court decided not to place Saakashvili under arrest for the period of the investigation, which meant he was subject neither to house arrest nor to detention. The drama will assuredly have more acts.

New Supervisory Board for Naftogaz

On November 22, 2017, the Ukrainian government approved new members of Naftogaz’s supervisory board, following the earlier resignation of many members of the previous board. The new members are four foreigners and two from Ukraine. The new board’s composition is even more illustrious than the old board’s. Among the members are Amos Hochstein from the United States (former U.S. Special Envoy and Coordinator for International Energy Affairs) and Clare Spottiswoode from the UK (former head of Ofgem, the British energy regulator), who subsequently became board chair.

3. PROGRESS IN REFORMS AND SUCCESS STORIES

On November 15, 2017, the European Commission published a report on the EU-Ukraine Association Implementation with an assessment of Ukraine’s progress toward reforms. The Commission believed that though Ukraine had demonstrated considerable progress in reforms, the pace of implementation had to be accelerated. The report stressed the need to continue battling corruption, including through the establishment of an independent anticorruption court.

Starting a State Bureau of Investigation

On November 22, President Poroshenko appointed Roman Truba director of the recently established State Bureau of Investigation (SBI). Truba and two deputies had been chosen by a special public commission after a long selection process lasting more than a year. Establishing the SBI is part of reforming the entire system of law enforcement authorities. Before the SBI was established, the Prosecutor General’s Office in Ukraine was responsible not only for judicial supervision but also for investigating crimes committed by persons serving in the legal system. The idea behind establishing the SBI is to turn the Prosecutor General’s Office into an agency responsible only for judicial supervision. The SBI will also be responsible for investigating crimes committed by high-level officials (corruption will be investigated by NABU). The main reason for such a division of authorities was the need for an independent agency to investigate crimes committed by persons capable of putting pressure on the investigator. In light of the professional ties existing between the Prosecutor General’s Office and other enforcement authorities, that risk was real.

Prosecutor General Lutsenko announced that the SBI will start its work toward the end of 2018.

Pension Reforms

On October 8, President Poroshenko signed legislation (passed by parliament on October 3) introducing changes to the pension system in Ukraine, including a provision for mandatory accumulation of pension assets. Pension reform was among the IMF’s requirements to continue its collaboration with Ukraine. Under the previous model, working citizens paid taxes into the State Pension Fund, which was responsible for paying pensioners. However, the fund was running a deficit, in part because 10 million employed individuals were supporting 12 million retirees. The reform roadmap gradually increases the qualifying period (thus effectively raising the existing retirement age) and stipulates the transition to a stock-based pension system. The new system was widely discussed between Kyiv, on one side, and the IMF and World Bank on the other. When all was said and done, the World Bank praised the reform, saying it would ensure stability of the pension system and help the most vulnerable among Ukraine’s population.

Health Care System Reforms

On December 28, President Poroshenko signed crucial and long-awaited legislation (passed by parliament on October 19) to reform the health care system. Prior to that, all medical services were supposed to have been available free of charge to citizens—a remnant of the old Soviet health care system. However, the reality was another matter. Polyclinics and hospitals did not have enough funds to provide free treatment, so patients had to spend their own money. The reform stipulates a division into free and paid medical services, with funding granted by the state medicine service to hospitals and clinics according to the number and quality of services provided by those institutions.

As part of the ongoing health care reforms, President Poroshenko also signed legislation to improve the availability and quality of medical care in rural areas. This piece of legislation is intended to solve the problem of lack of doctors in rural areas, mostly by connecting rural facilities to special medical centers through modern communication systems and improving the equipment available at rural clinics.

Judiciary Reforms

On November 22 the president signed legislation (passed by parliament on October 3) amending economic, civil, criminal, and administrative codes and other legislative acts. In aggregate, those changes, comprising some 4,383 amendments to existing legislation, fall under the rubric of judiciary reform. They continue earlier efforts at reform, which got under way in 2015.

On December 15, the new Supreme Court and the Supreme Specialized Court started working. The latter is now the principal court of review. The Supreme Specialized Court unites in its functions those of the previous supreme administrative and commercial courts, while the Supreme Court is dedicated to civil and criminal cases.

“Lozovyi’s Amendment”

On October 3, when voting for the judiciary reforms, parliament also adopted amendments to the criminal code that had been proposed by MP Andriy Lozovyi. In addition to some positive changes, “Lozovyi’s Amendment” also included some questionable ones. For instance, specific regional courts can now appoint experts (earlier only a case investigator or an ordinary court could call for an expert). Legal experts and practicing lawyers claim that this provision has the potential to lead to a collapse of the investigating system. Such criminal forensic examinations can also be conducted by state agencies. The main idea was to improve the quality of the evaluations, but if only government agencies are able to conduct expert analyses, private agencies used to doing the work are likely to go out of business. The amendment also limits the term for conducting pretrial investigations to six months—another provision roundly condemned by legal practitioners and law enforcement, especially in light of the current caseload burden and deficit of judges, both of which have resulted in lengthy pretrial periods.

Major Step toward Energy Independence

On December 7, parliament agreed to decrease significantly the rent rates for oil and gas extraction and prohibited increasing those rates until 2023. This step is expected to drive domestic production and contribute to Ukraine’s energy self-sufficiency. Although Ukraine’s gas reserves are estimated to be the third largest among European countries’ reserves, more than a third of the gas consumed in Ukraine today is imported. An increase in domestic gas and oil production should decrease spending on imported fuels and create new jobs, which should have a positive effect on Ukraine’s economy.

Preferences for e-Vehicles

On December 7, parliament canceled the VAT and excise duties for e-vehicles. These vehicles will now be 17 percent cheaper, which means they will be more competitive with traditional vehicles.

Extended Moratorium on Agricultural Land Sales

On December 7, the Verkhovna Rada narrowly approved extending the moratorium on agricultural land sales for one year more. This means that in 2018, there will be no legal land market in Ukraine. The moratorium was first established in 2002. The IMF requested the launch of a land market as one of the conditions for further collaboration with Ukraine. Currently large tracts of agricultural land are divided into smaller subplots and leased, which results in low economic productivity and disinterest on the part of foreign investors.

Anticorruption Court

Difficult discussions over the anticorruption court took place in Ukraine during the third quarter of 2017. Some officials, including President Poroshenko, were opposed to the idea of establishing such a court. Poroshenko said that he did not see much sense in establishing a separate anticorruption court and would prefer special anticorruption chambers within the existing courts, noting that a specific anticorruption court could be created later if it appeared needed. At the same time, social activists pointed out the risk of those chambers not being independent within the existing court system. Later, the Venice Commission rejected the idea of anticorruption chambers and strongly recommended establishing an independent anticorruption court. On the sidelines, the EU and the United States were waiting for Ukraine to adopt a law that would meet all requirements and expectations of the Venice Commission. However, by the end of the year not much progress had been made.

The idea of an anticorruption court in Ukraine should not be sacralized: it will be efficacious only if other anticorruption authorities manage to adduce enough evidence of corruption in any given case. But that remains problematic in Ukraine. The absence of sufficient evidence and inability to prove corruption in the end can only result in a verdict of not guilty. This means that the whole judicial system’s approach to battling corruption still needs to be improved. The absence of an anticorruption court is not the only stumbling block in solving the problem in Ukraine.

4. THE SITUATION IN THE DONBAS

Legislation and Regulation on Donbas

On October 6, the Ukrainian parliament voted for a one-year extension of a law already in effect (passed by parliament in 2014) that introduced the special status of, and specific conditions for local governance within, the noncontrolled parts of Donbas and Luhansk regions. The U.S. Special Representative for Ukraine Kurt Volker considered that to be taking tough steps for peace and ending the conflict in the Donbas. This initiative was supported by the German government as well.

With the original 2014 act, Ukraine (1) guaranteed that  participants in the conflict in the Donbas would not be criminally prosecuted, (2) established specific procedures for appointing judges and prosecutors in the noncontrolled regions (the local government must participate in the process), and (3) established people’s militias to maintain control and provide law and order. However, the one-year extension stipulated that the full implementation of the 2014 law would start after the complete exit of illegal military forces and troops from the region.

UN-OSCE Peacekeeping Mission in the Donbas

In August, President Poroshenko announced the idea of starting a peacekeeping mission in the Donbas with the participation of UN and OSCE personnel. Later, on September 5, Russian president Vladimir Putin agreed that a peacekeeping mission would contribute to good results. However, he stated that this had to be discussed with the separatists in Luhansk and Donetsk and that the main task of the mission should be to protect OSCE personnel serving on the border between the controlled and noncontrolled parts of Ukraine. That same day, Ukrainian foreign affairs minister Pavlo Klimkin said that Ukraine did not want Russians to participate in the peacekeeping mission in Ukraine. Russian foreign affairs minister Sergei Lavrov said on December 7 that Russia’s interests were not being observed by the peacekeeping mission in the Donbas and that an expanded mandate would be equivalent to establishing an occupational administration. Klimkin retorted that an occupational administration had already been established in the region. Special Representative Volker said he did not imagine any way for Russia to participate in the mission. There were expectations that the issue could be resolved by the end of 2017. However, little progress was achieved.

Fake Republic: Power Shift

At the end of 2018 conflict arose among the leaders of the Luhansk separatists. The separatist leader Ihor Plotnyckyi and the head of the so-called “people’s police,” Ihor Kornet, were at loggerheads. Plotnyckyi relieved Kornet of his duties because of suspected criminal activities. Kornet demanded the arrest of other “officials” close to Plotnyckyi whom he suspected of spying for Kyiv. Kornet and the militants surrounded and occupied some buildings while waiting for the arrival of support in the form of militants from Donetsk.

Plotnyckyi initially tried to persuade citizens that the situation was under control and would be resolved soon. But the coup was successful, and on November 24, Plotnyckyi announced he was resigning for health reasons and left Luhansk for Russia. Kornet became the new leader of the Luhansk separatists. But because Plotnyckyi was among those who had signed the Minsk agreements, the new self-proclaimed leadership announced he was still responsible for the Minsk process.

Exchange of Hostages

December 23 saw the largest prisoner exchange since conflict broke out in the east of the country. The separatist forces released seventy-four people who had been captured in the noncontrolled Donbas. In exchange, Ukraine released 306 prisoners, not all of whom chose to return to the pro-Russia breakaway regions.