Kyiv, Ukraine, April 9, 2003 (UMRG)

Kyiv, Ukraine, April 9, 2003, (UMRG).......The Agrarian Committee of the American Chamber of Commerce (AMCHAM) in Ukraine yesterday sent a letter to Ukraine's First Vice Prime Minister Mykola Azarov concerning recent statements about the necessity to introduce in Ukraine a mechanism of centralized regulation of the agrarian market.

Jorge Zukoski, president of the American Chamber stated in the letter on behalf of the Agrarian Committee, "We strongly believe that actions aimed at establishing artificial limits for grain movement on the territory of Ukraine, would in fact contradict current legislation and world trade mechanisms, would in fact restrict the further positive development of the agrarian market by reducing infrastructure investment and the availability to the Ukrainian agricultural goods producers."

"We believe, that in order to continue the process of reforming the agrarian sector of Ukraine, it is necessary to accelerate efforts for: the introduction of a warehouse certificates system, improvement of procedures of the operations of the Ukrainian exchange market, introduction of new standards for grain and many other actions, which will have a positive impact on the further development of the agrarian sector in Ukraine," the AMCHAM letter to VPM Azarov said.

The Agrarian Committee of the American Chamber of Commerce said in the letter they believe that reestablishing Ukrainian State control of the agrarian sector will have a negative influence on the export potential and an even more damaging effect on the international image of Ukraine."

The entire text of the AMCHAM letter follows:

Mykola Yanovych Azarov
First Vice Prime Minister of Ukraine
Minister of Finance of Ukraine

April 8th, 2003

Dear Mr. Azarov:

The American Chamber of Commerce on behalf of our Agrarian Committee expresses our deep respect and applies to you regarding the following.

During the last several weeks, the Ukrainian and international community has heard a number of statements from top Ukrainian officials concerning the critical situation regarding feed grain stock within the country. There have been clear statements concerning the necessity to introduce in Ukraine a mechanism of centralized regulation of the agrarian market. The office of Public Prosecutor, SBU (security service of Ukraine) and the Antimonopoly Committee have been carrying out examinations of grain exporters, commercial companies and elevators within the last few weeks.

Obviously, the situation with current grain stocks is troublesome and requires attentive studying and taking balanced action to truly benefit Ukraine in the short and long term. The American Chamber of Commerce and our Members are concerned that many statements from influential Ukrainian officials are advocating for the reinstitution of centralized regulation of the agrarian market, which has already clearly proven to be ineffective, and which Ukraine rightly has moved away from over the years allowing for an expansion of the much needed investment into this vitally important sector of the Ukrainian economy.

From our perspective, the efforts of the Ukrainian government should be aimed first of all at introducing modern, transparent and effective instruments of grain stock-taking/registration, introduction of new warehouse receipt law, deregulation of the trading process, creating conditions for reducing the prices of infrastructure services such as: ports, railway, fumigation, quarantine, customs and veterinary certificates.

We strongly believe that actions aimed at establishing artificial limits for grain movement on the territory of Ukraine, which would in fact contradict current legislation and world trade mechanisms, would in fact restrict the further positive development of the agrarian market by reducing infrastructure investment and the availability of credit to the Ukrainian agricultural goods producers.

We believe, that in order to continue the process of reforming the agrarian sector of Ukraine, it is necessary to accelerate efforts for: the introduction of a warehouse certificates system, improvement of procedures of the operations of the Ukrainian exchange market, introduction of new standards for grain and many other actions, which will have a positive impact on the further development of the agrarian sector of Ukraine.

The American Chamber of Commerce would like to call upon the Ukrainian authorities to approach the "grain problem" by taking into account the long term needs for the Ukrainian agrarian sector's success by structuring all potential legislation and normative acts within the framework of the European agrarian model. Reestablishing Ukrainian State control of the agrarian sector will have a negative influence on the export potential and an even more damaging effect on the international image of Ukraine.

We are at your disposal to provide additional recommendations or input into this very important issue.

Sincerely,

Jorge Zukoski, President
American Chamber of Commerce in Ukraine
42-44 Shovkovychna vul., LL1 Floor
Kyiv 01004 Ukraine
Tel: 380 44 490 5800, Fax 380 44 490 5801
acc@amcham.kiev.ua,  www.AmCham.kiev.ua