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08KYIV782, UKRAINE: NATO/PFP TRUST FUND DESTRUCTION PROJECT

April 18, 2008

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Reference ID Created Released Classification Origin
08KYIV782 2008-04-18 12:32 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

VZCZCXYZ0000
PP RUEHWEB

DE RUEHKV #0782/01 1091232
ZNY CCCCC ZZH
P 181232Z APR 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 5409
INFO RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHINGTON DC
RHMFISS/HQ USEUCOM VAIHINGEN GE

C O N F I D E N T I A L KYIV 000782 
 
SIPDIS 
 
SIPDIS 
 
DEPT ALSO FOR EUR/UMB AND EUR/PRA 
 
E.O. 12958: DECL: 04/17/2018 
TAGS: MARR MOPS PREL PARM NATO PINR US UP
SUBJECT: UKRAINE: NATO/PFP TRUST FUND DESTRUCTION PROJECT 
AND MANPADS UPDATES 
 
REF: A. STATE 37937 
     B. STATE 30482 
 
Classified By: Political Counselor Kent Logsdon for reasons 1.4(b,d) 
 
1. (SBU) Summary:  PolCouns, Polmiloff, and DATT met April 16 
with Deputy Defense Minister Valeriy Ivashchenko to discuss 
the status of the NATO PfP Trust Fund destruction project and 
deliver the corresponding non-paper (ref A), and  raise the 
possible mid-May visit of the Special Envoy for MANPADS 
Threat Reduction (ref B).  Ivashchenko said he had spoken 
with a Deputy Minister of Economy, who agreed to work with 
him to find a solution that would allow destruction of 
"Category Four" weapons, which currently under Ukrainian 
legislation cannot be eliminated until they have been offered 
for sale for five years.  He emphasized the importance to 
Ukraine of proceeding to the destruction of excess and 
obsolete large-caliber munitions, but acknowledged the point 
that it would be hard to move ahead with this phase of the 
project until the issue regarding the provision of excess 
small arms and light weapons for destruction was resolved. 
Ivashchenko responded with the same points but had no further 
update when Ambassador raised the subject during an April 18 
meeting with EUR DAS David Merkel.  In a separate April 16 
meeting, MFA Arms Control Director Volodymyr Belashov said 
some Ukrainian government officials advocated withdrawing 
from the NATO PfP Trust Fund in order to allow all available 
funding to be used immediately for destruction of 
large-caliber munitions.  He also reiterated that the current 
stock of MANPADS were required for Ukraine's defense 
requirements and therefore could not be made available for 
destruction. 
 
2. (C) Comment: Ivashchenko promises to be a good 
interlocutor and action officer on both the destruction 
project and MANPADS threat reduction.  While new to the 
topic, he seemed to have made a careful study of his staff's 
briefing papers, citing numbers and figures for us.  We were 
also impressed by the fact that he had contacted the Ministry 
of the Economy prior to our meeting on the issue.  As a good 
civil servant bureaucrat who has climbed the Ministry of 
Defense ranks, Ivashchenko is likely to be a quick study and 
be attentive to an issue that is important to us.  He had 
everyone from MOD who might play a role in resolving this 
issue on his side of the table.  End summary/comment. 
 
MOD - Small Arms and Light Weapons 
---------------------------------- 
 
3. (U) Drawing from ref A and a telephonic consultation with 
NATO Maintenance and Supply Agency (NAMSA) Project Manager 
Steve Brown before the meeting, PolCouns highlighted U.S. 
concern that nearly 300,000 of small arms and light weapons 
(out of a total of 400,000 scheduled for destruction) had 
been placed in a category that made them unavailable for 
destruction.  This problem with the supply of small arms and 
light weapons (SA/LW) threatened the timely completion of the 
project, but the U.S., as lead nation, was reluctant to 
approve a project extension (also necessary to complete 
munitions destruction) until it had assurances that the SA/LW 
had been made available for destruction. 
 
4. (SBU) Ivashchenko interrupted PolCouns's presentation, 
indicating that he was aware that the supply of SA/LW for 
destruction was the key issue, and stressed that the 
Ukrainian government "Utilization Commission" had not made a 
decision but only a recommendation regarding Ukraine's 
commitments to NAMSA.  He understood the project 
implementation had slowed, since the project had nearly 
exhausted the supply of "Category Five" weapons available for 
immediate destruction.  Unfortunately, according to Ukrainian 
law, weapons in other categories, Category Four and higher, 
could not be easily eliminated.  (Note: NAMSA's Brown advises 
that the weapons must normally be offered for sale for five 
years without any offers to purchase before the Cabinet of 
Ministers can authorize their destruction.)  Ivashchenko said 
he was working with other ministries and relevant authorities 
to authorize the additional 280,000 weapons needed for the 
destruction project.  In this regard, he had met with Deputy 
Minister of Economy (Valery) Muntiyan to emphasize that, 
despite the legal and economic obstacles, Ukraine needed to 
honor its international commitments.  Muntiyan had agreed 
with Ivashchenko's position and committed to cooperate in the 
search for a solution. 
 
5. (SBU) Note: Muntiyan's support is a promising development. 
 
 Former Minister of Economy Volodymyr Makukha appointed 
Muntiyan and four other deputy ministers on March 14, 2007, 
and Muntiyan has remained as Deputy Minister of Economy under 
current Minister Bohdan Danylyshyn.  Makukha announced that 
Mun
tiyan would be working on financial policy, economic 
strategy, and cooperation with international financial 
institutions.  Prior to his appointment, however, Muntiyan 
had been a long-serving Ministry of Defense bureaucrat.  He 
rose to the position of Deputy Defense Minister on December 
17, 2003, with responsibility for budget and economic matters 
until then-President Kuchma dismissed Muntiyan on October 5, 
2004, in what might have been a general house-cleaning 
accompanying Yevhen Marchuk's September 22 departure as 
Defense Minister.  As Deputy Defense Minister, Muntiyan 
appears to have been relatively outspoken about the need to 
increase the defense budget.  Earlier in his career, Muntiyan 
was appointed head of MOD's Economic Department in 2007, and 
then became the Defense Minister's adviser on budget 
formation and financial and economic activity.  End note. 
 
MOD - Project Extension/Burden-sharing 
-------------------------------------- 
 
6. (U) When PolCouns said that the U.S. would not agree to 
extend the current project until the SA/LW problem had been 
resolved, Ivashchenko noted that he had personally requested 
the one-year extension during a meeting in Brussels.  Even if 
the SA/LW issue were to be resolved the next day and 
destruction resumed in two, there would still not be enough 
time remaining in 2008 to meet the project's original goals. 
Additional time was needed to resolve the SA/LW problem on a 
political level. 
 
7. (U) Ivashchenko said that he had also met with the NATO 
Liaison Office and NAMSA to propose a change in the financial 
burden-sharing for munitions destruction.  Disposal of 
surplus large-caliber munitions, including artillery shells, 
aerial bombs, land- and sea-mines, etc., was Ukraine's top 
priority.  The current project, however, targeted destruction 
of smaller-caliber munitions.  Storage of munitions up to 
100mm was not a problem from a security or financial 
perspective and posed no threat of reaching terrorist 
organizations.  While he was not requesting an immediate 
change, Ivashchenko said Ukraine hoped to change current 
financial arrangement, in which Ukraine bore 2/3 of the cost 
of munitions destruction, to one in which the Trust Fund 
funded 2/3 of the cost.  (Note: NAMSA's Brown advised that 
the additional cost to Ukraine originated when the munitions 
destruction site was moved from the central Ukrainian town of 
Kalinivka to five sites, mostly located in eastern Ukraine. 
The change had increased the costs for Ukraine to transport 
the munitions to the destruction facilities.  Brown had 
suggested that Ukraine modify the schedule of munitions to be 
destroyed to include munitions located more conveniently to 
the new destruction facilities.)  PolCouns promised to convey 
this information to Washington, but suggested that it would 
be hard to discuss any changes in the plan to destroy 
large-caliber munitions until the SA/LW problem was resolved. 
 
8. (U) Ivashchenko then cited some specific problems related 
to storage of large-caliber munitions.  In the town of 
Brukhovychy (just outside of Lviv city), for example, a 
storage site has 3,500 tons that need to be eliminated.  In 
Khmelnytsyky region, in the town of Slavuta, an ammunition 
storage site with 4,000 tons of munitions is located near the 
Khmelnytsky nuclear power plant (which, despite its name, is 
located in the north of Khmelnytsky region, not in the city 
of the same name and by the town of Netishyn).  While the 
Ukrainian government was providing funds to the NATO PfP 
Trust Fund for destruction of small-caliber ammunition for 
rifles and machine guns, the danger remained that 200mm 
rounds could explode near a nuclear power plant or in a city, 
killing or injuring people.  (Comment: The intensity with 
which Ivashchenko made this point suggested that he was not 
just parroting talking points, but was personally concerned 
about the danger, and perhaps also the potential political 
fall-out from an accidental explosion.) 
 
9. (U) As the meeting drew to a close, we raised our interest 
in obtaining additional MANPADS from the Ukrainian side for 
destruction and reiterated that our offer of $5 million in 
additional funding for large-scale munition destruction 
remained on the table.  Polcouns also handed over the full 
text of the non-paper (Ref A) and the announcement of the 
appointment of Ambassador Lincoln Bloomfield as the Special 
Envoy for MANPADS Threat Reduction, which Ivashchenko 
 
promised to review.  Expressing surprise that the USG would 
be concerned about the security of Ukraine's MANPADS 
stockpile, he invited U.S. officials to visit a MANPADS 
storage site, so they could be satisfied that the conditions 
of storage precluded theft or unauthorized diversion of the 
weapons.  In addition to Ivashchenko, MOD participants 
included Rocket and Ammunition Elimination Department 
Director Petro Pyatybrat, Deputy Director Col. Yuriy 
Brovchenko, International Cooperation Directorate Lt. Col. 
Sergey Verbytsky, Deputy Minister Special Assistant Viktor 
Miroshnychenko, and Military-Technical Cooperation Deputy 
Director Yuriy Kharshenko. 
 
MFA - Interagency battles 
-------------------------- 
 
10. (U) During a separate meeting April 16, we briefed MFA 
Arms Control Director Volodymyr Belashov and informed him 
about Ambassador Bloomfield's interest in visiting Ukraine in 
mid-May.  Belashov was interested to hear that the Deputy 
Minister of the Economy had supported the MOD view that 
Ukraine should meet its commitment to destroy SA/LW despite 
the legal obstacles in scheduling Category Four weapon for 
elimination.  He said destruction of munitions remained a 
Ukrainian government priority and he had recently become a 
member of a new interagency working group dedicated to three 
topics: the NATO PfP Trust Fund project; elimination of 
munitions, especially at the Novobohdanivka munitions storage 
site; and elimination of melange rocket fuel.  Although 
Ukraine had an international commitment to NATO and to NAMSA, 
some members of the interagency working group, such as the 
Ministry of Economy, were arguing that Ukraine's support to 
the Trust Fund project was siphoning funds needed for higher 
priority munitions elimination.  They were advocating 
Ukraine's withdrawal from the Trust Fund project. 
 
11. (U) Note: We were separately provided with the Ministry 
of Economy (MOE) arguments.  Noting that the Ukrainian state 
budget normally allocates about 140 million hryvnia (U.S. $28 
million) for weapons and munitions elimination, MOE argues 
that the 40 million hryvnia, or almost a third of the state 
budget for this task, required to support the NATO PfP Trust 
Fund represents a diversion from Ukraine's highest 
priorities.  The funds to the Trust Fund results in the 
destruction of munitions, 80% of which is small-caliber and 
do not pose a danger at ammunition storage sites. 
 
12. (C) Belashov also reiterated earlier points suggesting
 
that the Ukrainian government would be unlikely to part with 
MANPADS.  He said Ukrainian enterprises have stopped 
manufacturing MANPADS, so the Ukrainian military needed to 
rely on its current stock for its defense needs.  Admitting 
that he did not know the total number that Ukraine holds, 
Belashov said Ukrainian experts believed that the operational 
life of the MANPADS could be extended by additional 
"decades."  In addition, after Foreign Minister Ohryzko's 
return from Moscow, Belashov said he had been given a number 
of tasks, including the Ukrainian response to a Russian draft 
agreement on mutual notification regarding transfer of 
MANPADS to third parties.  Belashov said the agreement would 
eventually be concluded, since Ukraine wanted to know where 
Russia was sending its MANPADS and, in the event MANPADS were 
involved in a terrorist attack, to prove to Russia that the 
missile in question had not originated in Ukraine.  Implied 
in Belashov's comments was the notion that, once the 
agreement was in place, Ukrainian officials would be 
reluctant to report to the Russians that they had transferred 
MANPADS to the U.S. for political, vice commercial, reasons. 
 
13. (U) Visit Embassy Kyiv's classified website: 
www.state.sgov.gov/p/eur/kiev. 
Taylor

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