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March 22, 2007

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Reference ID Created Released Classification Origin
07KYIV665 2007-03-22 15:45 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #0665/01 0811545
P 221545Z MAR 07

C O N F I D E N T I A L SECTION 01 OF 03 KYIV 000665 
E.O. 12958: DECL: 03/22/2017 
     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 
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 
KYIV 00000665  002 OF 003 
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 &#x00
0A;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 
KYIV 00000665  003 OF 003 
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: 




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