Rule of Law? 

People's Deputy Serhiy Holovaty notes in a letter to The Day's editors that the President's statement can be "qualified, in keeping with the Criminal Code of Ukraine, as 'intrusion into judicial proceedings' (Article 176-1), 'threatening a judge' (Article 176-2), 'contempt of court' (Article 176-3), all entailing punishment, including 'a term of imprisonment of up to three years.'" Mr. Holovaty also maintains that the head of state "publicly refuted Article 6 whereby state power in Ukraine is exercised by being divided into the legislative, executive, and judiciary; Article 8 establishing supremacy of the law in Ukraine; and Article 126 forbidding any form of influence on the judges."

"Leonid Kuchma thus confirmed the objectivity and correctness of the CE Parliamentary Assembly's resolution adopted January 27, 1999," Mr. Holovaty continues. "which reads in part that Ukraine has not achieved a clear delimitation of the legislative and executive branches. The executive is actually in control, trying to retain political power, at times acting unlawfully. In other words, President Kuchma bears full responsibility for his words."

Perhaps for the first time over the years of independence, Supreme Court Chairman Vitaly Boiko responded to the President's outburst by insisting on his stand and said that the President's statement was too sharply-worded. "My own status forbids me to legally assess any statements made by the President; this is the prerogative of the Supreme Court of Ukraine," Mr. Boiko told journalists.

Remarkably, the conflict now causing political reverberations dates from Leonid Kuchma's tenure as Premier. In 1993, he signed the Cabinet decree On Foreign Investment Procedures, curtailing benefits due enterprises with foreign investment. The law On Foreign Investment in Ukraine, enacted a year earlier, provided for tax rate discounts up to 70%, and most importantly, state guarantees of preferential taxation terms due joint ventures for a period of up to ten years from the date of enactment. In 1996, however, Parliament passed a foreign investment bill canceling all such privileges except guarantees of property title. The joint ventures entitled to a ten year tax break began turning to the courts, asking for confirmation. After studying the situation, the Supreme Court upheld a ruling passed by a district court in Kharkiv in the case of the Burtex (the ill-famed Bison being its affiliate) joint stock company. In Mr. Boiko's own words, the main reason for sustaining the district court ruling was that investment had been made in the joint stock company before the curtailing decree was signed. There are a dozen other such cases waiting their turn at the Supreme Court. In four cases protest has been entered because the this circumstance was apparently overlooked.

According to Yuri Karmazin, who as chairman of Parliament's anticorruption committee was very much involved in this case, the said court ruling denies the state budget a billion hryvnias annually. At present the issue of foreign investment state guarantees is being considered by the Constitutional Court. And the Supreme Court took its stand in the matter relying on expert legal findings, particularly those provided by the Verkhovna Rada's research and expert examination department.
By Oksana PANCHENKO, The Day