WHAT CERTIFICATION MEANS FOR UNITED STATES AID TO UKRAINE

This year, however, Congress mandated that, by February 18, 1999, Secretary of State Madeleine Albright report to the U.S. Congress on Ukraine's efforts in the area of economic reform, in addition to those made in previous fiscal years, including effective enforcement of reformed commercial and tax codes and continued progress on resolution of complaints by U.S. investors.  The 1999 Appropriations Act provided $195 million in technical assistance for Ukraine, but specified that 50 percent of those funds, except for nuclear safety and law enforcement reform, be withheld pending receipt of the Secretary's affirmative findings on the above conditions.

Technical assistance includes advisers and assistance in such areas as private sector business development, economic restructuring, democratization, and professional training. The full amount will be disbursed only if the Secretary reports, in a process called "certification," that progress has indeed been made on economic reform and on resolving business disputes. If the Secretary is unable to certify, we expect that $70-80 million in funding would be lost to Ukraine.

This certification requirement was not sought by the Clinton Administration, but was imposed by Congress, reflecting Congressional concerns that we share that economic reform in Ukraine is proceeding too slowly and that American investors are unfairly treated. Congress imposed a similar certification requirement last year. In April 1998, Secretary Albright certified that progress was being made in resolving U.S. investor disputes. At the time, the Secretary stated that the United States would continue to monitor progress in Ukraine on reform and in the investment climate, including treatment of U.S. investors in Ukraine, with the goal of ensuring that all U.S. assistance is used effectively to encourage and promote the reforms needed to stimulate sustainable economic growth.

The Secretary would like to be able to certify this month but must observe the requirement of the law passed by Congress. This means there must be positive evidence on which to base the decision; real reforms and real progress on resolving investor disputes.

The American Embassy, with the support of high-level visitors such as Ambassador-at-Large Sestanovich and Department of Commerce Counselor Kalicki, has been working closely with the Ukrainian government to identify areas for progress. Progress on economic reforms and in solving the investor dispute cases will not only facilitate a certification decision, but will also help with the International Monetary Fund and in shaping a more positive investment climate in Ukraine, one that will attract new investment to create new jobs, generate additional tax revenues and spur economic growth.

The Secretary's decision will be announced this week. In any case, the technical aid affected by the certification decision is only one part of a large, multi-faceted relationship partnership, which has developed in very positive directions over the last five years. The U.S. Binational (Gore-Kuchma) Commission provides a mechanism for systematic review of the relationship at the highest levels, to ensure that we are moving in the right direction. This covers political and security, as well as economic issues.

The United States and Ukraine share a wide range of important interests. Regardless of whether or not the Secretary is able to certify, the United States intends to continue developing a robust and broad relationship with Ukraine, one that helps Ukraine's transformation into a democratic market economy that is fully a part of Europe.