U.S.-UKRAINE PARTNERSHIP FOR PROSPERITY

U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Friday, June 6, 2008

KYIV - Many members of the U.S.-Ukraine Business Council (USUBC)
and President Morgan Williams participated in a series of events organized
for the visit to Kyiv by the U.S. Secretary of Commerce Carlos M.
Gutierrez.  This was the first visit ever by a U.S. Secretary of Commerce
to Ukraine.

During his time in Kyiv Secretary Gutierrez visited the new research and
production facilities of USUBC member MAXWELL and opened the new
CISCO Entrepreneur Institute at the Kyiv Polytechnic Institute.

The following op-ed by Secretary Gutierrez lays out the message delivered
by the Secretary during his visit to Ukraine:

PARTNERSHIP FOR PROSPERITY
U.S. Secretary of Commerce Carlos M. Gutierrez
writes on the eve of this week's visit to Ukraine

OP-ED: By Carlos M. Gutierrez, U.S. Secretary of Commerce
Business Ukraine magazine, Kyiv, Ukraine, Monday, June 2, 2008

"Our nations have built our friendship on the love of liberty. Our
people believe that freedom is the gift of an Almighty to every
man, woman and child." These words, spoken by President Bush,
represent the deep bond between the United States and Ukraine.

Though we speak in different tongues, and are separated by an ocean
and thousands of miles, our nations share democratic values and an
enduring commitment to freedom and free markets.

This week, I have come to Kyiv to strengthen our economic relationship
as outlined by Presidents Bush and Yushchenko earlier this year, and to
explore ways to increase economic cooperation between our countries
as Ukraine continues its progress toward building a market economy.

GROWTH SECTORS: AGRICULTURE AND ENERGY

Ukraine is the United States' second largest trading partner in the
region and in 2007 our two-way trade exceeded USD 2.5 billion. U.S.
firms have pumped more than USD 1 billion in Ukraine, making significant
investments in sectors from electricity generation to agricultural
processing. It is these two areas-agriculture and energy-which are
of strategic importance for Ukraine's economy and hold the potential
to create and sustain prosperity.

Ukraine's rich agricultural sector can be a strong engine for economic
growth. The rapid rise in global demand for agricultural products, along
with rising prices, presents Ukraine with a unique opportunity to regain
its place as one of the world's great breadbaskets.

With 30 million hectares of fertile land, Ukraine is rich in a natural
resource that has for too long been taken for granted. While resources
such as oil, minerals and timber have been more visibly tied to the
economic fortunes of many countries, fertile land has quietly become a
much-needed resource.

By investing in new farms, new technologies to improve yield and
working to modernize systems from agricultural processing to food
distribution, as well as avoiding export restrictions and price controls,
Ukraine can realise its potential as a major agricultural power and play
a leading role in meeting world food demand.

Ukraine's energy sector also offers great potential for creating growth
and opportunity. An efficient and transparent energy sector is important
to build a dynamic market economy. Foreign direct investment
can bring in modern technology to increase energy efficiency and help
Ukraine develop its own resources, including oil and gas.

There are many opportunities for potential commercial cooperation in
renewable energy, coal-bed methane technology, and energy conservation
technologies.

The United States is helping lead global innovations in clean energy and
our entrepreneurs are helping introduce new ideas to the marketplace to
help meet global energy demand.

OPPORTUNITIES FOR PROGRESS

When Ukraine accessed to the World Trade Organisation, it was
ushered into a global community of economies committed to
developing a stable and predictable pro-growth environment. WTO
membership signifies Ukraine's commitment to trade based on market
forces, transparency, and rule of law. Ukraine's regional position and
competitiveness with its neighbours will only be enhanced by being a
magnet for investment and a catalyst for openness.

While Ukraine has made important steps, there is much to be done.
Collaboration between the public and private sectors is needed to
identify and resolve key business issues that have an impact on the
economic climate.

The Council of Investors established by Prime Minister Tymoshenko,
should be an important vehicle for such action, working to address issues
from intellectual property protection to a transparent and reliable tax
system.

To continue progress toward an open market economy, Ukraine needs
to move decisively to complete important reforms such as resolving
inconsistencies in commercial laws to passing the Joint Stock Company
Law to improve corporate governance. Potential investors need to know
that the process for tenders is open, transparent and fair and that once
agreement is reached all parties will abide by their commitments.

OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC)

Addressing the outstanding issue with the Overseas Private Investment
Corporation (OPIC), which is currently not active in Ukraine, would bring
OPIC back to the country and open the door to potentially hundreds of
millions of dollars of U.S. investment. These are among the issues I will
discuss this week with my counterparts in Kyiv.

Ukraine has made significant progress toward developing a market
economy and global economic integration, but much remains to be done
if Ukraine is to realise its full economic potential. U.S. companies are
eager to work with and become partners with Ukraine as it continues on
the path to a market economy and implements the pro-growth policies
that welcome trade and investment.

That “love of liberty” which joins our two nations is a fundamental
value that drives our political and economic engagement. Ukraine’s future
holds tremendous potential, and the United States is an eager partner
and friend in helping ensure that the benefits of democracy reach every
man, woman and child in this great country.
==============================================

2. U.S. COMMERCE SECRETARY WARNS UKRAINE AMID
GROWING DISPUTE OVER US COMPANY'S OIL CONTRACT

Associated Press, Kiev, Ukraine, Thursday, June 5, 2008

KIEV, Ukraine - U.S. Commerce Secretary Carlos Gutierrez suggested
Thursday that a growing dispute over the cancellation of a U.S. company's
oil exploration contracts could damage Ukraine's reputation with foreign
investors.

Gutierrez spoke to business leaders in Kiev a day after President Viktor
Yushchenko ordered his top security advisory council to sort out the dispute
involving the Texas-based Vanco Energy Co.

He said the Vanco dispute could frighten away investors and that Ukraine
needed a clear set of rules for investment. "Every time there is a contract,
that is an opportunity to demonstrate to the world that contracts are
respected," he said.

"Not all businesspeople may like the rules," Gutierrez said, "but they
should know what the rules are and that the rules are predictable."

The government of Prime Minister Yulia Tymoshenko last month said it had
canceled a contract with a Vanco subsidiary to explore for oil and gas on a
deep-water shelf off the Black Sea Crimean peninsula. The government said
the 2006 production-sharing agreement amounted to "plundering Ukraine's
mineral reserves."

Tymoshenko also accused Yushchenko of lobbying for the U.S. firm, whose
contract was estimated to be worth some $13 million.

Yushchenko met with Gutierrez on Wednesday. His press office later issued
a statement saying that Yushchenko had ordered the head of his National
Security and Defense Council, Raisa Bogatyryova, to work toward restoring
the contract to Vanco in the next few weeks.

According to the company, the offshore shelf region known as Prykerchenska covers around 5,000 square miles, southeast of the Crimea peninsula.

Development of the entire Prykerchenska project would require more than $20 billion in investments, the company says.

Yushchenko and Tymoshenko were allies during the 2004 Orange Revolution
against voter fraud, but they have repeatedly clashed over various policy
matters, mainly concerning oil and gas. Tymoshenko used to head one of
Ukraine's main energy companies.