Ukraine will be a high priority for the administration and there’s no doubt that a call between President Biden and President Zelenskyy will happen - CDA Kristina Kvien
On the occasion women’s history month, Interfax-Ukraine asked the U.S. Embassy Kyiv, which has a number of women serving in high profile positions, to respond to our questions on U.S.-Ukraine relations.
An exclusive interview with CDA Kristina Kvien, Economic Counselor Megan Bouldin, Director of International Narcotics and Law Enforcement Sarah Langenkamp, USAID Deputy Mission Director Susan Kutor, Deputy Political Counselor Lynette Behnke for the Interfax-Ukraine News Agency
Text: Natalya Pushkaruk
- What is your assessment of economic reforms in Ukraine during the presidency of Volodymyr Zelensky: What are the achievements, and what are the U.S. expectations for further reforms?
- Kristina Kvien: Let’s talk about successes first: One success is land reform, which is expected to be implemented this summer, for the first time creating a land market that will help unleash Ukraine’s vast agricultural potential. Parliament is also looking at a draft law right now that will ensure transparency in the future land market and provide financial assistance to Ukrainian farmers. That would be a important achievement on top of what has already been done in land reform.
Decentralization is another key reform — because for the first time local governments have the power to allocate budgets in line with local priorities. And a success that is on the way, it seems, is passage of a package of privatization bills. If it passes, it will lead to a more transparent and fair privatization process for state-owned firms, which could create a wave of foreign investment, help modernize these firms, and employ thousands of Ukrainians. These are all important achievements on the economic front.
Regarding our “expectations,” I’d say that is not really the right word to use, because we work in partnership with Ukraine to help it build an economy for its own sake, so that the economy works for the Ukrainian people and so Ukraine can make real its own aspirations. This is a win-win situation. Because a prosperous, secure, peaceful and democratic Ukraine will strengthen Europe and be a strong U. S. partner.
To help Ukraine move towards membership in European and Euro-Atlantic institutions, Ukraine needs more transparency, less corruption, and a better business environment. Ukraine’s commitments under IMF, World Bank and EU financial assistance programs provide valuable roadmaps to follow. Changes in these areas will help Ukraine become the modern, Western country the Ukrainian people aspire to.
- U.S. Secretary of State Anthony Blinken said in Congress that the United States intends to increase support for Ukraine, including in the economy. What exactly is it about?
- Kristina Kvien: Secretary Blinken said we intend to strengthen support, whether it's related to security, the economy, or Ukraine’s efforts to strengthen its own democracy. These are all necessary because Ukraine is facing aggression from Russia, and retrograde forces internally who, for selfish reasons, don’t want to see Ukraine reduce corruption.
As the Biden administration develops its foreign policy approaches, we will have more details on new areas of collaboration.
- Will President Biden call President Zelenskyy? When?
- Kristina Kvien: Secretary Blinken’s remarks confirm that Ukraine will be a high priority for the administration and there’s no doubt that a call between President Biden and President Zelenskyy will happen. But I’ll let Lynette answer this question.
- Lynette Behnke: We’re very much looking forward to the two presidents having a chance to speak directly. Let’s not overlook, though, how much we are accomplishing below the leader level. In early February, very early in this administration, Secretary Blinken spoke to his counterpart, Foreign Minister Kuleba. Defense Minister Taran has spoken with Defense Secretary Austin. Head of the Presidential Office Yermak spoke to National Security Advisor Sullivan. Other senior officials will connect in the near future.. And every day at Embassy Kyiv we are working together with our Ukrainian counterparts on our common priorities.
Both the White House and Secretary Blinken have repeatedly reinforced our commitment to Ukraine’s sovereignty and territorial integrity.
The Secretary made a very strong statement supporting Ukraine on the 7th anniversary of the purported annexation of Crimea. He made a special video to underline his personal commitment. The Biden administration has wholeheartedly welcomed Ukraine’s Crimean Platform initiative. Meanwhile, our security and development assistance continues unabated. To give a concrete example, we announced another tranche of $125 million in security assistance on March 5.
- What is your assessment of the fight against corruption in Ukraine: How sufficient are the efforts of the Ukrainian authorities to fight corruption, what steps should be taken immediately in this area?
- Kristina Kvien: This is a really critical area of collaboration, something that Secretary Blinken has made a point of highlighting. We need to start by acknowledging how challenging the fight against corruption is, because vested interests are working hard not only to undermine reforms, but also discredit the reform agenda with a never-ending stream of disinformation and false narratives.
Ultimately, it’s not the United States that will judge whether reforms are “sufficient”, but the Ukrainian people. President Zelenskyy campaigned on this idea when he ran for President. It is he – and the people that voted for him – who believe more must be done, and we are happy to support him in that effort. These reforms are what will secure a strong, prosperous democracy for Ukraine, and lead to full integration with NATO and the European Union.
But we have our Office Director of International Narcotics and Law Enforcement here, and I’ll let her comment on process underway to combat corruption.
- Sarah Langenkamp: Speaking specifically, there are a few really important anti-corruption reforms that will make a big difference: Comprehensive judicial reform is the most important, because without independent and fair courts, you can’t guarantee the rule of law, protect citizens from corruption and crime, or attract foreign investment. But you also have a series of critical draft laws in the Rada now that Ukraine needs to get right to create a strong anti-corruption architecture.
There are, first, draft laws related to judicial reform – specifically reform of the High Council of Justice and the re-establishment of the High Qualification Commission of Judges, and we have urged the authorities to ensure these reforms establish an accountable, independent, and credible judiciary that enjoys public trust, including through the meaningful participation of independent experts in selecting and vetting candidates.
Constitutional Court Reform is another top priority for protecting Ukraine’s reform agenda. As we saw when the CCU invalidated the National Asset Declaration Registry in October, there is a persistent threat that the CCU will be used by vested interests to invalidate reforms important for Ukraine’s Euro-Atlantic aspirations.
Speaking of the asset declaration registry, we are encouraged by the priority President Zelenskyy has placed on reinstating proportionate and dissuasive sanctions for submission of false asset declarations. That’s another bill that is waiting in the Rada. Passage of this law will be an important demonstration of the commitment to address some of these more challenging and strategic reforms.
Lastly, I’d say other important reforms are related to preserving the independence and effectiveness of the anti-corruption infrastructure. Re-establishing NABU’s constitutionality while ensuring its continued independence following the CCU decision last October is critically important to strengthening the fight against corruption. The appointment of a highly-qualified and independent Specialized Anticorruption Prosecutor is another important ongoing effort that demonstrates Ukraine’s commitment to institutionalizing independent anti-corruption efforts.
- Kristina Kvien: In all of this, we have to acknowledge the many positive steps that Ukraine has taken against oligarchs and agents of malign foreign influence in Ukraine. We supported the moves to sanction Victor Medvedchuk, Taras Kozak. They have been using their media assets for years to undermine Ukraine’s sovereignty and territorial integrity.. We were encouraged by the move to sanction a Chinese company for attempting to improperly acquire control of Motor Sich’s sensitive technology. The recent charges against former PrivatBank executives are an important first step toward holding accountable the oligarchs accused of stealing billions from the Ukrainian people. We were also encouraged also by moves to hold accountable those responsible for meddling in U.S. elections.
- You mentioned comprehensive judicial reform. What assistance can Washington provide along the way, and what is needed for this long-awaited reform to succeed?
- Susan Kutor: Ukraine is at a pivotal point for advancing judicial reform, which is really the key for unlocking progress on the anti-corruption agenda and for boosting not only investor and public confidence in the system, but also economic growth overall. It is striking how the Ukrainian public views the judicial system: According to recent polling by the National Democratic Institute, roughly just one-in-ten Ukrainians trust the judicial system and courts! Part of the problem is that judicial reforms of recent years have been piecemeal and have not fully addressed the increasing challenges undermining the rule of law and fair application of justice. I think what Ukrainians want isjudicial reform that is holistic and comprehensive.
There have been some positive steps. Ukraine’s Legal Reform Commission is now finalizing its forthcoming “Strategy for the Sustainable Development of the Judiciary,” which can serve as an important roadmap for comprehensive judicial reform. Ukrainian authorities are considering important draft laws to reform the High Council of Justice and reestablish the High Qualifications Commission of Judges. These judicial governance bodies are at the center of the judiciary and their reform is a prerequisite for credible reform elsewhere in the justice system. Moreover, authorities are planning important reforms to the Constitutional Court and its decision-making process. With this strategy and other reforms that are coming to central judicial bodies, Ukraine does have an enormous opportunity to advance meaningful judicial reform.
However, there is something important to remember: to capitalize on this opportunity and for these reforms to succeed, they need to be implemented in accordance with Venice Commission recommendations and international standards. This means Ukraine needs to commitment itself to a transparent, impartial, and independent selection process for new judicial body members, based on criteria for integrity and professional competence, including the participation of independent experts. And this is something we are helping with. The U.S. government, including USAID, will continue to support Ukrainian partners in all three branches of government, as well as with civil society, to advance meaningful judicial reforms and enhance access to justice for all Ukrainians.
- Is the United States ready to resume the issuance of guarantees for Ukrainian Eurobonds, in particular, this year, so that Ukraine can refinance $ 1 billion in September?
- Megan Bouldin: Ukraine continues to have access to substantial amounts inexpensive financing through its agreements with the IMF, the World Bank and the EU. To access this financing, Ukraine will need to continue with the types of reforms we have been discussing in relation to anti-corruption institutions, the judiciary, the energy sector, land reform, the budget and the central bank.
As a result of post-Maidan reforms, in recent years Ukraine also has been able to effectively access world capital markets to meet its borrowing needs. A successful program of reforms will only improve Ukraine’s market standing and lower borrowing costs. The new administration is examining many ways it can expand support for Ukraine, but the United States has not provided this type of guarantee for several years.
- What caused the pause in projects for Ukraine by DFC (former OPIC) and USAID recently? What financial assistance and in what areas could Ukraine count on?
- Susan Kutor: USAID has provided steady assistance - without pause - in many areas, including agriculture, decentralization, digitalization of services, energy security, civil society, and of course healthcare. Over the past year, the U.S. Government has provided almost $50 Million in assistance specifically to help Ukraine address the many challenges arising from the COVID-19 pandemic – through USAID, the Centers for Disease Control, and many other U.S. Government agencies. to name but a few. In just the business arena, we are helping the government and private sector develop policies that will foster a better climate for economic growth and investment, especially for small- and medium-sized enterprises (SMEs). To increase Ukraine’s energy security, we’re helping strengthen the electricity, district heating, and natural gas markets by making them more transparent and connecting them to Europe’s markets and grid. We’re also working with the NBU to strengthen the financial sector overall, particularly in helping to create laws and regulations for non-banking financial institutions, such as leasing companies and credit unions. We’re also helping increase access to banking services for more Ukrainians. For example, we are partnering with financial service providers, such as credit unions, to increase critically-needed access to credit for smallholder farms. In particular, there are two ongoing loan portfolio guarantees with commercial banks that will provide nearly $18 million to small and medium farmers.
- How do you assess protection of intellectual property rights in Ukraine. How big are the chances that Ukraine may fall under sanctions again?
- Megan Bouldin: Over the past couple of years, Ukraine has made important strides in its protection of intellectual property rights but there is still much work that needs to get done. The finalization of the collective management organization (CMO) accreditation selection process in December was a notable milestone for Ukraine in fulfilling the 2018 legislation to establish a fair and transparent system of CMOs. Now the government needs to execute on this work.
Ukraine also needs legislative reforms to strengthen online IP enforcement. The Cyber Police continue to combat on-line piracy - a problem that robs Ukraine’s innovators of their deserved income - yet the laws and mechanisms do not exist to fully enforce their work. Investigations are unnecessarily cumbersome and violators often get away with minimal punishment.
- It is expected that from July 1, 2021, citizens of Ukraine can acquire ownership of agricultural land up to 100 hectares. What are your expectations for the implementation of land reform in Ukraine and do you see any opposition to its implementation?
- Susan Kutor: As Charge Kvien mentioned at the beginning, land reform is expected to be implemented this summer, for the first time creating a land market that will help unleash Ukraine’s vast agricultural potential. This is a historic moment for the country, an opportunity to improve the economic well-being of people, especially those living in rural areas. For land reform to succeed, it has to provide equal opportunities for every Ukrainian by ensuring access to finance, protecting property rights, empowering communities to effectively manage their land, and incorporating anti-corruption safeguards. To achieve this, a comprehensive set of legislation has to be adopted and implemented by July 1, 2021. Much remains to be done within this extremely short time frame. Now is a critical moment for policy makers to find the will to complete land reform in a way that will benefit all Ukrainians.
- What reforms are needed to increase US investment in Ukraine? Are there preconditions for this, especially when there's a pandemic?
- Megan Bouldin: I think we’ve spoken a bit about this already, but when you talk to U.S. investors, what you hear loud and clear is that justice sector reform is their highest priority. There is huge potential to attract significantly more investment, but many investors are deterred by the perception that Ukrainian courts do not ensure a level playing field, that they don’t effectively enforce contracts, that they don’t protect personal, corporate, and intellectual property rights.
There are few other key areas that would help attract foreign investment: Central bank independence is key to provide predictable exchange rate policy and attract investment in the banking sector, and passage of a package of privatization bills that makes privatization transparent and fair would really attract a lot of investors.
- American experts from the Atlantic Council prepared a strategy for President Biden for Ukraine and recommended that the US administration firmly pursue a policy aimed at ending the Nord Stream-2 project. What is the chance that the United States will impose economic sanctions that will make it impossible to complete the construction of Nord Stream-2?
- Kristina Kvien: As the President has said, Nord Stream 2 is a bad deal — for Germany, for Ukraine, and for our Central and Eastern European allies and partners. It’s a project that aims to divide Europe. It exposes Ukraine and Central Europe to Russian manipulation and it goes against Europe’s stated energy security goal.
On sanctions, our Congress passed sanctions on Nord Stream 2 in 2019 and 2020 with significant bipartisan support and the Biden Administration is committed to complying with that legislation. As we have said, any entity involved in the Nord Stream 2 pipeline should immediately abandon work on the pipeline or risk U.S. sanctions.
Sanctions are only one of among many important tools here, and we will work closely with everyone to reinforce European energy security and safeguard against predatory behavior like this.