UKRAINE - GOI TELLS KUCHMA TO SHAPE UP; WANTS TO

C O N F I D E N T I A L SECTION 01 OF 02 ROME 005849

SIPDIS

E.O. 12958: DECL: 12/04/2012
TAGS: MARR PREL UP MASS PREL UP MASS IT ITMARR
SUBJECT: UKRAINE - GOI TELLS KUCHMA TO SHAPE UP; WANTS TO
KEEP LINES OF COMMUNICATION OPEN

REF: ROME 4912

CLASSIFIED BY: POLITICAL MINISTER-COUNSELOR TOM COUNTRYMAN


1. (C) SUMMARY: ON DECEMBER 2, RUSSIA/FSU OFFICE DIRECTOR
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PAGE 02 ROME 05849 01 OF 02 041727Z
ROSA ANNA CONIGLIO TOLD POLOFF THAT THE NOVEMBER 26/27 VISIT
OF UKRAINIAN PRESIDENT KUCHMA TO ITALY WAS CONSIDERED BY THE
GOI TO HAVE BEEN A "GREAT SUCCESS." KUCHMA HEARD A STRONG
MESSAGE FROM ALL HIS ITALIAN INTERLOCUTORS ON THE KOLCHUGA
RADAR ISSUE AND THE GENERAL NEGATIVE UKRAINIAN PERFORMANCE ON
HUMAN RIGHTS. AT THE SAME TIME, LINES OF COMMUNICATION TO
THE GOU WERE KEPT OPEN, AND ITALY MADE PROGRESS WITH UKRAINE
ON A NUMBER OF IMPORTANT BILATERAL ISSUES, SUCH AS ADOPTIONS
AND BUSINESS TAXATION ISSUES. THE GOI HAS OFFERED ITS
SERVICES TO THE U.S. AS A MEDIATOR AND MESSAGE CARRIER TO THE
GOU SHOULD WE DEEM IT USEFUL. END SUMMARY.


2. (C) CONIGLIO STARTED OFF WITH AN ACKNOWLEDGMENT THAT THE
TIMING OF THE VISIT COULD NOT HAVE BEEN WORSE, GIVEN THE
KOLCHUGA RADAR ISSUE AND NATO/OSCE/EU ATTEMPTS TO ISOLATE
KUCHMA. HOWEVER, SHE CONTINUED, WHILE KUCHMA'S TRIP WAS
DOWNGRADED TO AN "OFFICIAL VISIT," IT WAS ORIGINALLY PLANNED
AS A STATE VISIT IN THE BEGINNING OF 2001. PRESIDENT
CIAMPI'S AGENDA IS GENERALLY PLANNED TWO YEARS IN ADVANCE,
PARTICULARLY FOR STATE VISITS. THE GOI DECIDED TO GO AHEAD
WITH THE VISIT BECAUSE IT HEARD NO OBJECTIONS FROM ALLIES AND
THOUGHT THAT SOME GOOD COULD COME FROM DIALOGUE WITH KUCHMA.
THERE HAD ALSO BEEN TWO STATE VISITS TO UKRAINE BY ITALIAN
PRESIDENTS SINCE UKRAINIAN INDEPENDENCE FROM THE SOVIET UNION


3. (C) POLOFF ASSURED CONIGLIO THAT THE PRESS REPORTS
(PARTICULARLY ITALIAN MEDIA) JUST PRIOR TO THE VISIT IMPLYING
THAT THE GOI WAS THUMBING ITS NOSE AT THE ALLIES, ESPECIALLY
THE U.S., BY HOSTING KUCHMA HAD NO USG SOURCE. CONIGLIO WAS
ALREADY AWARE THAT EMBASSY ROME HAD ASKED WASHINGTON SOME
WEEKS PRIOR TO THE TRIP (REFTEL) WHETHER THE USG WANTED THE
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PAGE 03 ROME 05849 01 OF 02 041727Z
TRIP CANCELED. THE SPECIFIC POINTS WE HAD RECEIVED IN THE
RESPONSE TO THE REQUEST HAD BEEN PASSED TO THE PRESIDENT'S
OFFICE, AND HAD BEEN MADE PART OF CIAMPI'S AND PM
BERLUSCONI'S TALKING POINTS. CONIGLIO WAS RELIEVED TO HEAR
THAT OUR OFFICIAL PUBLIC LINE, IF ASKED, WAS THAT THE USG
KNEW ABOUT THE VISIT AND RAISED NO OBJECTIONS.


4. (C) CONIGLIO SAID THAT IN ADDITION TO DOWNGRADING THE
VISIT STATUS, THE GOI MADE CLEAR TO KUCHMA ITS DISPLEASURE
WITH HIS REGIME'S ACTIVITIES BY POSTPONING A SIGNING CEREMONY
FOR A NUMBER OF BILATERAL AGREEMENTS. THE GOVERNMENTS HAD
REACHED CLOSURE ON LANGUAGE FOR THE AGREEMENTS DURING THE
VISIT, AND ITALY WILL EVENTUALLY SIGN BECAUSE THEY ARE
IMPORTANT TO ITALIAN NATIONAL INTERESTS. HOWEVER, THERE WILL
BE NO CEREMONY - THE ITALIAN AMBASSADOR IN KIEV WILL SIGN THE
AGREEMENTS. THE AGREEMENTS INCLUDE REGULATIONS ON ADOPTIONS
OF UKRAINIAN CHILDREN BY ITALIAN PARENTS, AND REFORM OF
DOUBLE-TAXATION LAWS PENALIZING SMALL/MEDIUM ITALIAN
ENTERPRISES DOING BUSINESS IN UKRAINE.


5. (C) KUCHMA MET WITH PRESIDENT CIAMPI, PM BERLUSCONI,
SENATE PRESIDENT PERA AND CENTRAL BANK GOVERNOR FAZIO. FM
FRATTINI MET SEPARATELY WITH FM ZLENKO. ACCORDING TO
CONIGLIO, KUCHMA HEARD FROM ALL OF HIS INTERLOCUTORS THE
FOLLOWING: YOU MUST DISCLOSE, NOW, ALL OF THE FACTS
REGARDING SALES/SHIPMENTS OF KOLCHUGA RADAR SYSTEMS, AND; YOU
SAY YOU WANT CLOSER INTEGRATION OF UKRAINE WITH THE REST OF
EUROPE, SO BACK UP YOUR WORDS WITH DEEDS. PM BERLUSCONI
EMPHASIZED TO KUCHMA THAT WHILE THERE HAD BEEN SOME PROGRESS,
OVERALL KIEV'S RECORD ON IMPLEMENTATION OF COMMITMENTS TO
INTERNATIONAL ORGANIZATIONS, MEDIA FREEDOM, AND TREATMENT OF
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PAGE 04 ROME 05849 01 OF 02 041727Z
OPPOSITION POLITICAL PARTIES WAS ABYSMAL, AND NOT
CHARACTERISTIC OF A REPRESENTATIONAL DEMOCRACY.


6. (C) CONIGLIO SAID THAT THROUGHOUT HIS VISIT AND WITH ALL
HIS INTERLOCUTORS, KUCHMA DENIED KNOWING ANYTHING ABOUT
KOLCHUGA SALES TO IRAQ, AND SAID THAT THE RECORDINGS WERE A
FABRICATION COMPOSED OF OTHER SPLICED TAPES. FURTHER,
CONTINUED KUCHMA, THESE SUSPECT TAPES WERE THE ONLY EVIDENCE
AGAINST HIM. KUCHMA SAID THAT UKRAINE HAD SOLD SOME SYSTEMS
TO RUSSIA PRIOR TO 2000 AND TO CHINA IN 2002, BUT HE COULDN'T
SAY WHERE THE SYSTEMS ARE NOW. "YOU'LL HAVE TO ASK THE
BUYERS, WE CAN'T TELL YOU" KUCHMA TOLD BERLUSCONI AND CIAMPI.


7. (C) KUCHMA TOLD BERLUSCONI THAT "RICH, PRIVATE
BUSINESSMEN OWNED 90 PERCENT OF THE MEDIA" AND THAT THEREFORE
THERE COULD BE NO GOVERNMENT INFLUENCE. HE ALSO COMPLAINED
THAT HE WAS NOT SATISFIED WITH UKRAINE'S POLITICAL SYSTEM,
SINCE THE PARLIAMENT BLOCKED MANY OF HIS ADMINISTRATION'S
INITIATIVES, AND THEREFORE LITTLE WAS ACCOMPLISHED. KUCHMA
TOLD PERA THAT HE WANTED TO RESTRUCTURE THE GOU INTO A
PARLIAMENTARY SYSTEM SIMILAR TO ITALY'S. PERA AND KUCHMA
AGREED TO AN "EXCHANGE OF EXPERTS" ON PARLIAMENTARY SYSTEMS
TO STUDY POSSIBLE REFORMS IN KIEV.


8. (C) CONIGLIO SAID THAT DURING HIS MEETING WITH FAZIO,

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CONFIDENTIAL PTQ6116

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ACTION EUR-00

INFO LOG-00 NP-00 AID-00 ACQ-00 CIAE-00 INL-00 DODE-00
DOEE-00 SRPP-00 DS-00 EAP-00 EB-00 FBIE-00 VC-00
H-01 TEDE-00 INR-00 LAB-01 L-00 VCE-00 M-00
AC-01 NSAE-00 OMB-01 PA-00 PM-00 PRS-00 ACE-00
P-00 SCT-00 SP-00 SSO-00 SS-00 TRSE-00 T-00
USIE-00 SA-00 DTC-00 PMB-00 DSCC-00 PRM-00 DRL-02
G-00 NFAT-00 SAS-00 /006W
-------------- 12A83B 041728Z /38
O 041554Z DEC 02
FM AMEMBASSY ROME
TO AMEMBASSY KIEV IMMEDIATE
SECSTATE WASHDC IMMEDIATE 7205
INFO EUROPEAN POLITICAL COLLECTIVE PRIORITY
NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 02 OF 02 ROME 005849

SIPDIS

E.O. 12958: DECL: 12/04/2012
TAGS: MARR PREL UP MASS PREL UP MASS IT ITMARR
SUBJECT: UKRAINE - GOI TELLS KUCHMA TO SHAPE UP; WANTS TO
KEEP LINES OF COMMUNICATION OPEN

KUCHMA COMPLAINED THAT THE UKRAINE CENTRAL BANK WAS CREATED
DURING THE SOVIET ERA AND STILL OPERATED ON THAT DESIGN.
KUCHMA ASKED FOR, AND FAZIO AGREED TO PROVIDE, ASSISTANCE TO
REFORM THE BANKING SYSTEM, TO INCLUDE FRAUD DETECTION AND
PROTECTIONS AGAINST MONEY LAUNDERING. CONIGLIO SPECULATED
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PAGE 02 ROME 05849 02 OF 02 041727Z
THAT KUCHMA, WELL AWARE OF SIMILAR REFORMS UNDERWAY IN
RUSSIA, DID NOT WANT KIEV TO FALL TOO FAR BEHIND MOSCOW IN
THE EYES OF THE WTO, IMF, ETC.


9. (C) CONIGLIO SAID THAT THE GOI'S VIEW WAS THAT THERE
WERE SUFFICIENT SIGNS OF REFORM IN UKRAINE TO WARRANT
CONTINUING COMMUNICATIONS BETWEEN ROME AND KIEV. IN ADDITION
TO THE INITIATIVES DESCRIBED ABOVE, CONIGLIO OFFERED THE
GOI'S SERVICES AS MEDIATOR AND MESSAGE COURIER BETWEEN THE
U.S. AND UKRAINE SHOULD WE THINK IT APPROPRIATE.


10. (C) COMMENT: THE GOI HAS ASSUMED THE ROLE OF
INTERMEDIARY BEFORE, MOST RECENTLY CARRYING OUR MESSAGES TO
PUTIN THROUGH BERLUSCONI ON IRAN DUAL-USE TECHNOLOGY
TRANSFER. IT SEEMS TO BE A ROLE BERLUSCONI ENJOYS AND ONE
THAT POST RECOMMENDS WE HOLD IN RESERVE SHOULD WE WANT OUR
OWN MESSAGES REINFORCED WITH THE GOU, OR THE POLITICAL
SITUATION IN KIEV DETERIORATES TO THE POINT WHERE WE WOULD
FIND IT MORE PRODUCTIVE TO TAKE BERLUSCONI UP ON HIS OFFER.

SEMBLER

CONFIDENTIAL

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2002ROME05849 - Classification: CONFIDENTIAL