21/10/2014 Ukraine: Daily Highlights - Another round of gas talks between Russia, Ukraine and the EU failed to deliver any results in Brussels

21/10/2014 Daily Highlights from “Digests & Analytics Ukraine” News Agency

Another round of gas talks between Russia, Ukraine and the EU failed to deliver any results in Brussels. Ukraine is preparing to step up production of weapons and to military equipment modernization. The law on criminal proceedings in absentia is approved.

Ukraine

• The law on criminal proceedings in absentia has been signed, allowing to bring to justice former leaders of the state, who were engaged in corruption and crimes against the state and national security.
• Ukraine is getting ready to expand arms production and for military equipment modernization. A contract for modernization of helicopters has been recently signed with French company SAGEM. Negotiations on construction of the ammunition factory, as those in Luhansk and Donetsk have been lost, are ongoing.
• Export revenues of Ukroboronprom sharply declined due to the combat operations and supplies for the army.
• President Poroshenko plans to create a state agency for insuring the risks of Ukrainian exporters.
• Donetsk governor Kihtenko decided to spread key government services between three cities of the region - Kramators'k, Slovyans'k and Mariupil.
• Deputy head of the presidential administration Chaly said that peace in Donbass can be established only through diplomacy on the basis of the Minsk Agreement, which is supported by the international community.
• Official exchange rate remained stable on the eve of the elections: 12.95 UAH/USD, 16.54 UAH/EUR (-6 cop) and 3.17 UAH/10 RUB (+1 cop).

Kyiv

• Decision on renaming Institutska street into the Street of the Heavens Hundred Heroes will be adopted during the nearest session of the Kyiv Council on the basis of the poll of kyivans.

War in Ukraine

• During the day, militants continuously shelled and attacked Donetsk Airport and Debaltseve. Ukrainian army positions north of Luhansk and in Dokuсhaivs'k district were attacked as well. Situation in Donetsk remains tense.
• As informed by the NSDC press service, the explosion at the chemical factory in Donetsk took place due to the violation of the technological process of manufacturing explosives by militants.
• First drones for OSCE monitoring mission arrived to Ukraine. Several countries suggested their drones but OSCE has already refused to use German equipment.
• Ukrainian Foreign Affairs Ministry denied accusations from Human Rights Watch on cluster bombs use. Those accusations are not substantiated with clear evidence and based on several private witnesses and staging the scene.

International

• Press Service of the President of Ukraine reported that during the telephone conversation between Putin and Poroshenko sides stressed the need for a ceasefire and for ensuring a complete "silence of artillery."
• Negotiations on natural gas issues in Brussels between the EU, Russia and Ukraine failed to deliver results. According to the Minister of Energy of Ukraine Prodan, Russia refuses to guarantee gas supplies and fix the already agreed price for the next 5 months. According to the Prime Minister Yatsenyuk's opinion, Putin is not going to sign the gas deal, and wants to freeze Ukraine. EU Energy Commissioner Oettinger hopes that all issues will be agreed upon, and the interim agreement signed at the next meeting on October 29.
• Russian Energy Minister Novak believes that the reverse gas supplies to Ukraine are illegal and wants to legally ban them. Hungary has already stopped the reverse supplies under the Russian pressure. Through Slovakia, transit capacity of which was purchased by Ukraine, other than the Russian reverse gas, the gas from Norway is being shipped.
• Lithuania is ready to completely abandon Russian gas, as well as to satisfy most of the needs of Latvia and Estonia after the commissioning of the liquefied natural gas (LNG) terminal.
• Latvian Criminal Police closed the criminal case on money laundering with the "Boyko towers" because of the lack of response from Ukrainian law enforcement agencies.
• Japanese authorities have canceled an official visit of Russian President Putin, planned for this fall, due to the situation in Ukraine.
• The US Ministry of Trade warned Russia about the termination of the trade agreement, that included the tax exemptions for Russian steel.
• Ukraine appealed to the International Telecommunication Union to ban the use of Russian codes for calls to the occupied Crimea.
• Russia imposed ban on Ukrainian plant exports due to suspicions of re-export from EU member states.
• Sweden Navy continues the search operation for an unidentified submarine within its territorial waters and is ready to use weapons for its capture.

Trends

• As the volumes of gas supplies to Ukraine looks to me marginal for Russia, it could try to refuse to sign the contract in order to put political pressure, and try to freeze Ukraine, which could lead to growing discontent of the population with authorities policies.