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June 16, 2006

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Reference ID Created Released Classification Origin
06KIEV2358 2006-06-16 15:04 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv
DE RUEHKV #2358/01 1671504
P 161504Z JUN 06


C O N F I D E N T I A L SECTION 01 OF 04 KIEV 002358 




E.O. 12958: DECL: 06/09/2016 

     B. KIEV 1785 
     C. BUCHAREST 730 
     D. BUCHAREST 287 

Classified By: Acting Political Counselor Michael Uyehara for reasons 1 

1. (SBU) Summary:  Ukraine and Romania have enjoyed markedly 
warmer relations post-Orange Revolution, according to 
Romanian Embassy counselor Stanciu, with Romanian President 
Basescu visiting Kiev three times.  MFA Romania desk officer 
Popyk told us three areas continued to be irritants in the 
bilateral relationship: demarcation of the continental shelf 
and the associated issue of Zmeiny Island's status, Ukraine's 
construction of a Danube-Black Sea Canal, and the status of 
each countries' ethnic minorities in the other country.  Both 
officials, however, downplayed the seriousness of the three 
issues.  While Romania takes an active interest in 
negotiations to settle the separatist Transnistria region of 
Moldova, according to Stanciu, Romania was not pushing to 
have a seat at the negotiating table.  Popyk considered 
Ukraine's participation in the June 5 Black Sea Forum to be 
an unqualified success.  End summary. 

2. (U) We met with Romanian Embassy Counselor Romeo Stanciu 
June 2 and MFA Romania desk officer Serhiy Popyk June 9 to 
obtain an overview of Ukraine-Romania relations. 

Neighbors and Friends 

3. (U) Although Ukraine shares a relatively short 375-mile 
border with Romania, the changing tides and shifting boundary 
lines of 19th and 20th century European history have created 
a definite historic link between the two countries.  About 
150,000 ethnic Romanians are estimated to live in Ukraine, 
with 114,000 located in Chernivtsi region (oblast), 32,000 
resident in Zakarpattiya oblast (both statistics according to 
the 2001 Ukrainian census) and another significant community 
located in the southwestern part of Odesa oblast near the 
Romanian border.  Chernivtsi oblast is the northern part of 
the historic area of Bukovina, which during the period 
between World Wars One and Two was part of Romania.  The 
Ukrainian Embassy in Bucharest website states that, according 
to the 2002 national census, 61,400 ethnic Ukrainians live in 
Romania, although alternative sources claim the Ukrainian 
community in Romania numbers as much as 200,000.  The 
majority of Ukrainians and Romanian also share the Orthodox 
Christian faith. 

4. (U) In 2005, total trade volume between Ukraine and 
Romania was U.S. $702 million (representing 3.5 percent of 
Ukraine's total trade), which was down 97 percent form the 
$1.38 billion of 2004 (or 3.8 percent of Ukraine's total 
trade).  This strong decline was on the export side.  At the 
same time, Ukraine's imports from Romania increased from a 
very small base.  Ukraine had a $280 million trade surplus 
with Romania in 2005, down from a $648 million surplus in 
2004.  In the first three months of 2006, Ukraine's exports 
to Romania showed a further decline (down 20 percent from the 
same period a year earlier), while Ukraine's imports from 
Romania continued to increase steadily.  Ukraine's main 
exports to Romania were principally metal ores and metallic 
products, such as ferrous alloys, rolled steel, unalloyed 
steel products, etc., as well as chemical products, coal, 
coke and semi-coke, and wood.  Romania's exports to Ukraine 
included more manufactured products -- cars, furniture, 
synthetic threads, machinery and spare parts, paper and 
cardboard, and chemicals and drugs.  According to Romanian 
statistics, Ukrainians invested almost U.S. $1.5 million into 
the Romanian economy, placing Ukraine 74th among foreign 
investors into Romania. 

Warm Bilateral Relations 

5. (SBU) Stanciu told us that Ukraine-Romania relations had 
warmed considerably after the 2004 Orange Revolution events 
brought President Yushchenko to power.  Yushchenko wanted to 
follow a path toward EU and NATO membership already trod 
successfully by Romania, so Ukraine looked to Romania for 
advice and support for its European and Euro-Atlantic 
aspirations.  As evidence of the close relationship, Stanciu 
noted Romanian President Traian Basescu had visited Kiev 
three times, first to attend Yushchenko's inauguration, a 
second time to attend the December 1-2, 2005, Community of 
Democratic Choice Summit, and the last and most recent on an 

KIEV 00002358  002 OF 004 

official visit February 2-3.  President Yushchenko also 
visited Bucharest April 21-22, 2005 and most recently to 
attend the June 5-6 Black Sea Forum.  During Basescu's 
official visit, the two presidents signed a protocol formally 
establishing an interstate commission (the Yushchenko-Basescu 
commission) to discuss matters of mutua
l interest.  The 
commission has three committee 
s: one for regional, European, and Euro-Atlantic security, a 
second for cooperation in the fields of culture, education, 
and minorities, and a third for environmental protection and 
sustainable economic development. 

6. (U) Popyk agreed the two countries enjoyed good relations 
overall, but noted problems still remained over three issues: 
delimitation of the continental shelf, status of ethnic 
minorities, and the Danube Delta canal. 

Boundary Issues 

7. (U) After then-Ukrainian President Leonid Kuchma and 
then-Romanian President Ilion Iliescu signed a treaty June 
17, 2003, confirming the land boundaries set by a 1961 treaty 
between the Soviet Union and Romania, Ukraine and Romania 
only had demarcation of their respective exclusive economic 
zones (EEZ) to be settled.  The remaining disagreement in 
calculating the EEZs centers around the status of Zmeiny 
("snake" or "serpent" in Russian) Island, with an area of 
just under a square mile, which Romania however agrees is 
Ukrainian territory.  Romanians argue that Zmeiny Island is 
not a true island, which would allow it to act as a reference 
point to set the EEZ, while Ukraine argues the reverse since 
Zmeiny Island is capable of supporting a population and 
economic infrastructure.  Zmeiny Island, which lies 30 miles 
offshore from Ukraine and 80 miles from Odesa, reportedly has 
unproven reserves of 10 million tons of oil and ten billion 
cubic meters of natural gas offshore. 

8. (U) In September 2004, Romania referred the dispute to the 
International Court of Justice (ICJ) at the Hague for 
resolution, in accordance with a 1998 agreement with Ukraine 
that stipulated either country could refer the case to the 
ICJ if a mutually acceptable solution was not reached in two 
years.  Ukraine lodged a counter-claim against Romania with 
the ICJ in May 2006.  An oral hearing on the case is likely 
to take place in 2008, with a final judgment sometime in 
2009.  In the meantime, the two countries resumed bilateral 
negotiations on the maritime border demarcation in April 2005 
that paralleled the court case.  Both Stanciu and Popyk took 
the view that the issue was a technical one to be resolved by 
experts and one that did not impact on the overall 
relationship.  Both sides appeared willing to accept the 
results of whichever process ended first.  In the meantime, 
however, Popyk complained Ukraine was prevented from 
developing Zmeiny Island until the case was settled. 

Danube Canal 

9. (U) On May 16, 2004, a Ukrainian government contractor 
began the dredging and related work of the pre-existing 
Bystroe canal to allow ocean-going vessels access to the 
Danube river.  The shipping through the new Danube-Black Sea 
shipping canal was intended to allow the Ukrainian government 
to collect millions of dollars of annual fees currently paid 
by shipping companies for the use of the Sulina canal located 
in Romania and to resuscitate Ukrainian Black Sea ports that 
were closed due to lack of traffic.  The canal was 
ceremonially opened August 26, 2004, after the first stage of 
work was completed, and traffic began to flow through it. 

10. (U) The Ukrainian government started Phase two in October 
2004, but then suspended activity within a few weeks. 
Failure to conduct proper maintenance, winter storms, and 
spring floods undid much of the earlier dredging by April 
2005.  The Minister of Transportation state enterprise, Delta 
Pilot, which is responsible for canal development and 
maintenance, resumed work on the canal in April-May 2005, 
then again suspended the work in mid-May.  Additional 
flooding in July and August brought more sediment and 
returned the Bystroe canal's depth to its measurement before 
the start of construction, 10.4 feet. 

11. (U) The canal project, located in the middle of the 
Ukrainian part of the ecologically sensitive Danube Delta, 
which it shares with Romania, ignited stiff opposition from 
environmental groups.  The European Commission and the 
Romanian, U.S., and other governments joined the protests. 
The World Wildlife Fund (WWF) notes that the Danube Delta, a 

KIEV 00002358  003 OF 004 

UNESCO World Heritage Site since 1991, is home to 70 percent 
of the world's white pelicans and half of its pygmy 
cormorants.  Supported by other expert opinion, WWF argues 
the deepened canal will adversely affect water flow through 
the Danube Delta, construction activity that disturbs the 
water will kill fish fry, and removal of sand banks will 
destroy sensitive habitats. 

12. (SBU) Ukraine, however, accuses Romania of mounting its 
protest for economic reasons and not out of genuine concern 
for the ecological health of the Danube Delta.  The Ukrainian 
government has resisted considering various alternative 
approaches raised by the environmental and international 
communities.  In a positive development, the Ministry of 
Transportation reported in April 2006 that it had begun 
considering options other than the Bystroe canal to meet 
Ukrainian transportation needs in the Danube Delta.  Since 
the project is in abeyance, neither Stanciu nor Popyk had 
much to say on the topic, although Stanciu offered that the 
Romanian government had the court of world opinion on its 

Ethnic Communities 

13. (U) Although friction over the status of ethnic 
communities in each country is regularly cited as a constant 
bilateral irritant, Stanciu and Popyk also did not have much 
to say on this topic.  Popyk argued that, when the Romanian 
government raised the topic, it was merely trying to protect 
its flanks against the revanchist claims of the Party of 
Greater Romania.  Stanciu complained mildly about the 
Romanian government and Romanian ethnic organizations' 
difficulties in providing Romanian language texts for use in 
Ukrainian state schools.  He said, by law, the Ministry of 
Education had to review and approve all texts, and sometimes 
disapproved texts for flimsy reasons.  Stanciu noted the 
requirement was a general one and not on directed only at the 
ethnic Romanian community.  On the other hand, the Romanian 
government did not impose such a procedure for Ukrainian 
language texts donated to Romanian schools. 

14. (U) Stanciu noted the EU's designation of special 
cultural zones that straddled both Ukraine and Romania had 
promoted a wide range of official contacts at the local 
government level as well as non-governmental interaction. 
The three regions were the Lower Danube, the Upper Prut, and 


15. (SBU) Although provided an opportunity, Stanciu did not 
 for a greater Romanian role in negotiations over 
Moldova's separatist Transnistria region.  He noted, however, 
that the Romanian government continued to take a keen 
interest in Moldova/Transnistria developments and appeared to 
appreciate our update on the situation.  Popyk said Romania 
had been a negotiating party in the early 1990s in talks to 
settle the Transnistria issue, but did not figure in the 
"Yushchenko plan" on Transnistria settlement.  He had seen in 
the media Romania intended to propose its own initiative and 
would be interested in learning the details, once it was 

Black Sea Forum 

16. (U) Popyk said his reading of the Romanian press 
suggested the Romanian public was divided over whether the 
Black Sea Forum, held June 5 in Bucharest (ref A), had been a 
success, with some questioning the U.S. $700,000 cost of the 
meeting.  From Ukraine's perspective, he noted complacently, 
the Black Sea Forum had been a complete success.  President 
Yushchenko had attended and bolstered Ukraine's status as a 
regional leader by proposing to initiate "the energy dialogue 
of three seas" (i.e., Baltic, Black, and Caspian), a new 
consultative mechanism within the framework of the Community 
of Democratic Choice.  The proposal envisioned bringing 
together supplier, transporter, and consumer countries in the 
development of a coordinated regional energy policy, 
including consideration of energy projects and other aspects 
of such cooperation.  Yushchenko had also made suggestions 
toward resolution of the so-called "frozen conflicts." 

17. (C) Popyk said, in the end, the Black Sea Forum 
declaration failed to make any reference to the Ukrainian and 
Georgian Community of Democratic Choice (CDC) initiative, 
although, at Romanian government insistence, the CDC 

KIEV 00002358  004 OF 004 

declaration had been modified to refer to the Black Sea 
Forum.  He said the Romanian government had decided not to 
include the CDC reference in order not to ruffle Russian 
feathers with the hope that Russian president Putin might be 
induced to attend.  In the end, however, Putin had not 
attended and, instead of participating, Russia had sent the 
Russian ambassador to Romania as an observer.  (Note: 
Popyk's description contradicts MFA's earlier claim to us, 
ref B, that Greek government objections had kept out the CDC 

18. (U) Visit Embassy Kiev's classified website: 




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