UKRAINE/MOLDOVA: TRANSNISTRIA AND BILATERAL

C O N F I D E N T I A L SECTION 01 OF 03 KYIV 000665

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/22/2017
TAGS: PREL PBTS OSCE PINR RO MD UP
SUBJECT: UKRAINE/MOLDOVA: TRANSNISTRIA AND BILATERAL
IRRITANTS

REF: A. CHISINAU 278

B. BUCHAREST 314

Classified By: Ambassador for reasons 1.4 (b,d).


1. (C) Summary: Deputy Foreign Minister Veselovsky told EUR
DAS Kramer, NSC Director Sterling, and Ambassador March 19
that he would continue to hold the concurrent duty as
Ukrainian special negotiator for Transnistria, despite rumors
to the contrary. National Security and Defense Council
(NSDC) Secretary Haiduk earlier March 19 said the U.S.,
Ukraine, and Russia needed to develop a common approach to
Transnistria, but consensus would be difficult, since Russia
was not only a 5-plus-2 mediator, but also had interests in
Transnistria. NSDC Deputy Secretary Pyrozhkov (also
Ukrainian ambassador-designate to Moldova) assured visiting
Embassy Chisinau POL/ECON Chief that the political decision
to extend the EU Border Assistance Mission had been taken;
only the technical details remained to be worked out.
Veselovsky and, separately in a March 21 meeting with
Ambassador, Moldovan Ambassador to Ukraine Stati, expressed
concerned that Romanian actions vis-a-vis Moldova were
destabilizing and unfriendly. Veselovsky and Moldovan
Embassy counselor Caras described four bilateral issues that
Ukraine and Moldova are attempting to resolve. End summary.

The Wrong Policy?
--------------


2. (C) During a March 19 meeting, NSDC Secretary Vitaliy
Haiduk touched on the Transnistria issue. He told EUR DAS
David Kramer, NSC Director Adam Sterling, and Ambassador that
Ukraine would continue to support continuation of the EU
Border Assistance Mission (EU BAM) and the Ukraine-Moldova
customs agreement. However, Haiduk said that this policy was
"a mistake." In Haiduk's view, Voronin and Smirnov had
common economic and business interests and these could be
exploited. He did not expand further on his comment. Later
at lunch, Deputy Foreign Minister Andriy Veselovsky said he
could not explain Haiduk's opinion, although he speculated
that NSDC was feeling pressure from government agencies such
as the State Border Guards Service and Customs Service to do
away with both EU BAM and the customs agreement.


3. (C) On March 20, NSDC Deputy Secretary (and Ukrainian
ambassador-designate to Moldova) Serhiy Pyrozhkov told
visiting Embassy Chisinau POL/ECON Chief Martin McDowell that
the Ukrainian government had taken the political decision to
request an additional 24-month extension of the EU BAM
mandate; only the "technical arrangements" to implement the
decision remained. The details included requirements for the
EU to provide training and equipment to the Ukrainian Border
Guards Service and Customs Service. Pyrozhkov noted that the
measures were necessary to ensure wider agreement within the
Ukrainian government for the EU BAM extension.

The Russia Angle
--------------


4. (C) Haiduk opined that Moldovan President Voronin's
personal relationship with Transnistrian leader Smirnov was a
potential obstacle to a Transnistrian settlement, especially
regarding their common business interests. Voronin was
manipulating the process even as Ukraine and other mediators
attempted to work with Russia on the basis of the Yushchenko
plan to formalize a document. He was talking to the U.S. on
the basis of the Yushchenko plan, while using the Kozak plan
with Russia and elements of each with the international
community. In Haiduk's view, the situation would progress
only when the U.S. and Ukraine sat down with the Russian side
and proposed a common format. Now that Russia was playing a
dual role, as a mediator in the 5-plus-2 talks while being
involved in Transnistria, such an approach was difficult.
Kramer agreed that the Russians were playing an unhelpful
role in their support for Transnistria and the status quo.
Voronin had presented a package plan to Russia that included
the best elements of the Yushchenko and OSCE plans, which the
U.S. viewed favorably. However, Russia was not taking it
seriously.


5. (C) During a lively and frank conversation, Pyrozhkov said
he would report for his new posting in Chisinau within two
weeks. He recalled that he had visited Transnistria together
with Russian Security Council Deputy Secretary Yuri Zubakov
in February 2006 as well as meeting with EU BAM Head General
Ferenc Banfi a number of times. Pyrozhkov said he had
recently discussed the possibility of transforming the
peace-keeping force in Transnistria with Zubakov. Zubakov
had said Russia was willing to restructure the peacekeeping
force so that it would operate under some international
mandate, probably OSCE, with Russia, Ukraine, Moldova, and

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Transnistria each contributing a quarter of the personnel for
the force.


6. (C) Pyrozhkov regretted that Moldovan President Voronin
had retracted his agreement to implement the "Kozak
memorandum," since his decision meant the rejection of a
federalist structure to reintegrate Transnistria into
Moldova. McDowell noted that there were other elements of
the Kozak memorandum that the U.S. had found troublesome.

Changing Assignments
--------------


7. (C) When Kramer asked, Veselovsky assured his lunch
partners that he would continue in the capacity of Ukrainian
special negotiator for Transnistria. In a March 21 meeting
with Ambassador, however, Moldovan Ambassador to Ukraine
Sergiu Stati said he had heard similar assurances from
Veselovsky and other Ukrainian officials, but he had also
heard "unofficially," on the level of rumors, that Pyrozhkov
would assume the position of special negotiator
simultaneously with his duties as ambassador to Moldova.
Stati surmised that the proposal had been floated to test
Moldovan reaction, which, he noted, was negative. Chisinau
held the view that, although Pyrozhkov was a competent and
experienced official, a special negotiator based in Chisinau
would not be as effective as one located in Ukraine's capital.


8. (C) Stati said Ukraine's continuing support for EU BAM and
the Ukraine-Moldova customs agreement was the most important
factor that could lead to a Transnistria settlement,
outweighing Russian approaches to Transnistria. Ukraine also
supported Chisinau's efforts to come to agreement with Moscow
on a common approach to a Transnistria settlement. Ukrainian
officials, including Prime Minister Yanukovych, understood
that Transnistria was not just a Moldovan problem but a
potential threat to regional security. Unfortunately, Stati
commented that Yanukovych had told him during their meeting
that the Ukrainian government would coordinate all of its
approaches on Transnistria with Moscow.

Romanian Influences
--------------


9. (C) At the lunch, Veselovsky also aired his concerns about
Moldova-Romania relations, a concern that he noted was also
shared by Presidential Secretariat Deputy Chief of Staff
Oleksandr Chaliy (then a leading candidate to become foreign
minister),who had been Ukrainian Ambassador to Romania. The
Ukrainians saw that Moldovan politicians, in promoting
pro-European policy, were quietly advocating Moldova's entry
into the EU through Romania, with the possibility that
Moldova on the right bank of the Dniester could potentially
unite with Romania and the left bank (Transnistria) revert to
Ukraine. Instead of becoming absorbed into Romania,
right-bank Moldova could unite with Romania in a
supra-national structure, "Romanova."


10. (C) In his meeting with Ambassador, Moldovan Ambassador
Stati charged that Romania was pushing Moldovans to apply for
Romanian citizenship by slowing down and complicating the
visa-issuance procedure for Moldovans to travel to Romania.
Stati claimed that, when Romania and Russia concluded a
framework agreement, the agreement had included a protocol
critical of the World War II Molotov-Ribbentrop Pact, which
put Moldovan independence into doubt. Stati said he saw his
role as Moldovan ambassador to Ukraine as promoting a close
and cooperative Moldova-Ukraine relationship that could
balance Romanian pressure on Moldova. (Note: The
Molotov-Ribbentrop Pact assigned the Bessarabia region of
pre-war Romania to the Soviet Union and led to the Soviet
Union's subsequent annexation of Bessarabia. The Bessarabia
region, with the addition of Transnistria, formed the basis
of the Moldavian Soviet Socialist Republic, which then became
independent Moldova.)

Bilateral Irritants
--------------


11. (SBU) Veselovsky told poloff before lunch that, in
addition to Transnistria, Ukraine was working to resolve
three bilateral issues. The first had to do with ownership
of the Dniester hydroelectric power station located on the
Dniester river near the Ukrainian town of Novodniestrovsk
(Chernivtsi region) at the Ukraine-Moldova border. (Note:
The Dniester Hydropower Complex was developed in the 1970s,
with the main dam completed in 1983. The reservoir and one
side of one of the complex's two dams lies in Moldovan
territory, but the Moldavian Soviet Socialist Repulic
provided the area free of charge to the hydropower complex in
1981 for development of a pump storage plant that Ukraine was

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to construct. In 2000, the Moldovan government advised
Ukraine by memorandum that it was revoking the transfer. In
July 2003, Moldovan border guards entered the hydropower
complex without warning, ejecting workers and setting up a
guard post. The Moldovans are demanding 20 percent of the
hydropower complex's revenues as their "share" based on
demarcation of the bilateral border along the midline of the
Dniester river.)


12. (SBU) Veselovsky said the second bilateral
Ukraine-Moldova issue was related to property rights to the
Palanca road. (Note: This is a 7.77 kilometer stretch of
the Ukrainian Odesa-Reni highway that enters Moldovan
territory near the Moldovan village of Palanca where Moldova
nearly cuts off Ukraine from the areas of Odesa region that
previously formed part of historic Bessarabia. A
supplementary protocol to the Ukraine-Moldova border treaty,
signed August 18, 1999, transfers property rights to the
Odesa-Reni highway and the land under it to Ukraine.)
Veselovsky explained the Moldovans had transferred rights to
the road, but had yet to transfer rights to the land under
it, leading to the odd situation that the Ukrainians were
unable to conduct routine maintenance on the road. The third
involved what Ukraine claimed were its environmental concerns
regarding construction of the port at Dzhurdzhulets, Moldova,
on the Prut.


13. (C) In a March 20 meeting with Embassy Chisinau POL/ECON
Chief McDowell, Moldovan Embassy Counselor Eugen Caras
provided the Moldovan view of the bilateral issues and a
fourth one regarding Ukrainian Aerosvit airlines request for
landing rights at Chisinau airport. He acknowledged that
Ukrainian operation of the Dniester hydropower complex
weakened Moldovan co-ownership claims arising from the
argument that the original construction of the plant had been
undertaken not by Ukraine but by the Soviet Union. Caras
claimed delay in the transfer of land under the Palanca road
resulted from the absence of the legal and regulatory
authority to carry out such a transfer, but that it would be
resolved in time. He noted that Ukrainian concerns regarding
the construction of the Dzhurdzhulets port were not
environmental but based on a fear of the competition that it
would create for existing Ukrainian port facilities such as
Reni. Finally, Caras agreed that Moldova would have to grant
landing rights to Aerosvit, but he argued that the Ukrainian
threat to revoke Moldovan overflight privileges (including
for the lucrative Chisinau-Moscow flight) had been excessive.


14. (U) Visit Embassy Kyiv's classified website:
www.state.sgov.gov/p/eur/kiev.
Taylor