UKRAINE/MOLDOVA/TRANSNISTRIA: TKACH ON CUSTOMS

C O N F I D E N T I A L SECTION 01 OF 02 KIEV 000483

SIPDIS

E.O. 12958: DECL: 02/03/2016
TAGS: PREL OSCI OSCE
SUBJECT: UKRAINE/MOLDOVA/TRANSNISTRIA: TKACH ON CUSTOMS
PROTOCOL DISCUSSIONS

REF: A. STATE 17796


B. KIEV 365

Classified By: Political Counselor Aubrey A. Carlson for reasons 1.4(b,
d)


1. (C) Summary: In a February 3 briefing, Ukrainian Special
Envoy Tkach said the February 1 Ukraine-Moldova meeting had
failed to make progress, but a second round would occur at
the level of Ministers of Economy in the hope of resolving
Ukraine's objections to Moldovan government registration
procedures for Transnistrian business enterprises. If the
February 6-7 meeting of Economy Ministers failed to make
progress, the Ukraine-Moldova "Joint Trade Commission" would
meet February 9 to discuss the issue further. Tkach, who
defended himself against charges of corruption, is on his way
to a second stint as ambassador to Hungary. End summary.

No Meeting of Minds
--------------


2. (C) Ukrainian Special Envoy for Transnistria Dmytro Tkach
briefed U.S and EU diplomats February 3 on bilateral
Ukraine-Moldova discussions on Ukrainian enforcement of the
agreed 2003 customs protocol with Moldova. He said the
Ukrainian government had reached a decision not to begin
enforcement of the customs protocol after First Deputy Prime
Minister Stanislav Stashevsky, to whom President Yushchenko
had given overall responsibility for Transnistria, convened a
meeting on the evening of January 24. The heads of the State
Border Guards (SBGS),Customs, and Tax Services and "7-8
ministers" attended. During the meeting, the Minister of
Transportation and Communications, SBGS chief, and the head
of the Customs service jointly declared that the Moldovan
government had failed to meet its obligations as required in
the December 30 joint statement of the Ukrainian and Moldovan
prime ministers. They said Ukraine would be unable to handle
problems that would ensue if the GOU enforced the protocol.


3. (C) Tkach highlighted the same issues as DFM Veselovsky
had (ref B) with respect to Moldovan implementation of its
Resolution 815 -- requirement for Transnistrian business
entities to be current on taxes for permanent registration
with resulting double taxation, temporary registrants'
inability to receive certain certificates of origin with
associated re-exporting privileges, and shorter validity
period for temporary registrations. Tkach added to the list
of problems the lack of a mechanism for restitution of
Moldovan government-collected taxes to the Transnistrian
authority. He also noted the Moldovan Economy Minister's
declaration that privatized Moldovan enterprises would be
ineligible for either permanent or temporary registration,
since Moldova does not recognize the process of privatization
conducted by the Transnistrian authorities.


4. (C) Tkach said the February 1 discussions in Odesa between
Ukrainian and Moldovan representatives had not resolved
Ukrainian issues with Moldovan procedures for registering
Transnistrian businesses. Since discussions at a technical
level had been unfruitful, Tkach said a meeting at the
"government level" would take place in Kiev February 6-7.
Tkach specified that he thought the Moldovan Minister of
Economy, Minister for Reintegration Sova, and perhaps the
head of the Customs Service would attend the meeting for the
Moldovan side. If the next round could not resolve the
impasse, the Ukraine-Moldova joint "trade commission" would
meet on February 9. In the February 9 meeting, Ukrainian
First DFM Stashevksy would have the opportunity to exchange
views with Moldovan President Voronin and Prime Minister
Tarlev, which Tkach hoped would lead to a resolution of the
problem. Responding to a question, Tkach said discussions on
the issue were purely bilateral, because the Moldovan side
did not want to include Transnistrian representatives.
(Note: A Tiraspol-based website reported that Transnistrian
authority representatives were present at the February 1
meeting, but the Moldovans refused to acknowledge them.
Other press reporting described the meeting as a trilateral
one among Ukraine, Moldova, and the Transnistria region.)

Scurrilous Lies
--------------


5. (C) When he opened the meeting, Tkach spent an unusual
amount of time defending himself against charges that he had
caused the Ukrainian government to delay enforcement of the
customs protocol due to his financial interest in
Transnistria. Dismissing the possibility that he had the
power to bring about such a decision, Tkach said the rumors
about his ownership of Transnistrian property had been a
"provocation" originating from the Moldovan Azi website that
he owned shares in a Transnistria-based telephone company.
The Moldovan customs chief had repeated the allegations. As
a result, the Ukrainian government had sent a diplomatic note
of protest asking the Moldovan government to provide evidence
to substantiate the claims. To date, the Moldovan government
had not replied.


6. (C) Tkach said the Ukrainians had obtained documents on
the company from Transnistria, which established that the
company had only two owners. The company's financial
documents had established no links with Tkach. Tkach said
copies of the documents were sent to five-plus-two
negotiators; he was prepared to send the same documents to
the Austrian government as EU president or to any other
interested party. (Note: At the same time, Tkach never made
a statement categorically denying that he had no financial
interest in Transnistria.)

A Border Incident
--------------

7. (C) Tkach recounted an incident as evidence of a positive
outcome from Ukraine's cooperation with the EC Border
Assistance Mission (BAM). He said the head of the EU BAM
team at a border checkpoint noted the slipshod and cursory
examination of Transnistrian leader Igor Smirnov's entourage
when he crossed the border. (EC official Sabine Stoehr told
us this happened January 21.) Tkach said the customs agents,
familiar with Smirnov because of his frequent crossings, had
quickly leafed through the ten passports they were handed and
failed to conduct any customs inspection of his vehicles.
After EU BAM protested the behavior to the Ukrainian customs
service chief, Ukrainian customs scrupulously carried out
their duties when Smirnov re-crossed the border into
Moldova/Transnistria. Tkach said the customs agents'
behavior had been reported to President Yushchenko, who had
then issued orders that Smirnov was to be carefully inspected
each time he crossed the Ukrainian border.

Moving On
--------------


8. (C) On the way out, Hungarian DCM Laszlo Horvath confirmed
reports that Tkach was on his way as ambassador to Hungary,
unusually, for a second time. Horvath confirmed Tkach's
statement that he had been ambassador to Hungary once before
in the early 1990s after Ukrainian independence. The
Hungarian government felt Tkach was acceptable, since he
spoke a little Hungarian and seemed to have reasonably good
ties with Tarasyuk and leading officials of the "Orange Team."


9. (U) Visit Embassy Kiev's classified website:
www.state.sgov.gov/p/eur/kiev.
HERBST