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US SENATOR LUGAR PRAISES UKRAINE'S DEMOCRATIC PROGRESS Comments on VAT tax refunds and OPIC Being Closed for Ukraine
News and commentary from the Ukrainian Observer The Willard Group, Kyiv, Ukraine, Wed
January 16, 2008

KYIV - Sen. Richard Lugar, a long-time supporter of Ukraine's interests in the United States Senate, said Wednesday at a news conference in Kyiv that on his current trip to Ukraine he has seen very positive democratic developments ".now more than ever."

His visit has included meetings with President Viktor Yushchenko, government and legislative leaders, opposition leaders and leaders of the United States business community in Ukraine.

Most of the questions at the news conference related to international issues of interest including NATO membership, WTO accession, and Ukraine's role in developing its own energy resources and providing a reliable transport corridor for the energy exports of Russia and Central Asian countries.

Responding to a press question in regard to the continuing problems experienced by U.S. businesses in regard to getting the VAT tax refunds to which they are entitled, Lugar said that he had discussed the problems in his meeting with U.S. business leaders and would provide all leadership possible on the issue.

He said that business leaders had described for him the immense difficulties they face in the arduous recovery procedures and court actions that take inordinate amounts of time and expense.

A leading group of United States and Ukrainian business leaders, the U.S.-Ukraine Business Council, has conducted research that indicates that over $250 million is owed in VAT tax refunds to agribusiness interests in Ukraine, with a substantial portion of that amount owed to USUBC members. There are unconfirmed reports that the total amount of VAT refunds the government owes could be as high at $1 billion.

In regard to a question regarding Ukraine's blocked access to guarantees that may be provided by the Overseas Private Investment Corporation (OPIC), Lugar said that he had been told by U.S. Ambassador William Taylor that the matter was now closer to resolution.

Lugar had been made aware that the restart of OPIC guarantees could provide as much as one-half billion U.S. dollars in guarantees, investment funds and a wide variety of other development assistance. The senator said he would attempt to make a positive impact on the problem when he returned to Washington.

To the large number of questions from reporters, Lugar said that based on his discussions with President Yushchenko, Ukraine will soon enter into a Membership Action Plan (MAP) agreement with NATO. That in turn would trigger an intensive period of popular debate that is likely to result in a national referendum on the issue.

Lugar said that a favorable vote on such a referendum would be a first step that could eventually lead to NATO membership for Ukraine. Lugar emphasized that NATO membership should depend upon the will and desire of the Ukrainian people.

During Lugar's meeting with Yushchenko, the president reassured him that Ukraine is interested in the fastest possible adoption of a draft roadmap of Ukrainian-American cooperation.

Lugar and Yushchenko discussed other key questions of bilateral relations, strengthening Ukraine's energy independence, and Ukraine's possible membership in the World Trade Organization and Euro-Atlantic structures.

Although Lugar made no mention of the possibility during his news conference, the presidential website said the ". Ukrainian side expects that President George Bush [will] visit Ukraine in April 2008." The president also expressed Ukraine's readiness to welcome United States Secretary of State Condoleezza Rice.

Lugar, who was chair of the U.S. Senate Foreign Relations Committee for several years during the period the Republican Party controlled the Senate, now serves as the committee's highest ranking Republican member. Although he no longer serves as chair, Lugar continues to have great respect and influence for his championing of legislation to reduce the threat of nuclear, chemical and biological weapons.

Along with then-Senate Armed Forces Committee Chairman, Sam Nunn of Georgia, Lugar conceived the Nunn-Lugar program that to date has deactivated more than 7,200 nuclear warheads that were once aimed at the United States.

LINK: http://ukraine-observer.com/index.php?c=973