The dissolution of the Soviet Union in December 1991 brought an end to the Cold War and created an opportunity to build bilateral relations with the New Independent States (NIS) as they began a political and economic transformation. On December 25, 1991, the United States officially recognized the independence of Ukraine. It upgraded its consulate in the capital, Kiev, to embassy status on January 21, 1992. The U.S. ambassador to Ukraine is John E. Herbst, the fifth U.S. ambassador since Ukrainian independence.

The United States attaches great importance to the success of Ukraine's transition to a democratic state with a flourishing market economy. Following a period of economic decline characterized by high inflation and a continued reliance on state controls, the Ukrainian government began taking steps in the fall of 1999 to reinvigorate economic reform that had been stalled for years due to a lack of a reform majority in the Ukrainian parliament. The Ukrainian government's stated determination to implement comprehensive economic reform is a welcome development, and the U.S. is committed to strengthening its support for Ukraine as it continues on this difficult path. Bilateral relations suffered a setback in September 2002 when the U.S. Government announced it had authenticated a recording of President Kuchma's July 2000 decision to transfer a Kolchuga early warning system to Iraq. The GOU denied that the transfer had occurred. U.S. policy remains centered on realizing and strengthening a democratic, prosperous, and secure Ukraine more closely integrated into European and Euro-Atlantic structures.

U.S. Assistance to Ukraine
A cornerstone for the continuing U.S. partnership with Ukraine and the other NIS has been the Freedom for Russia and Emerging Eurasian Democracies and Open Markets (FREEDOM) Support Act (FSA), enacted in October 1992. Ukraine has been a primary recipient of FSA assistance. Total U.S. assistance since independence has been more than $3 billion. U.S. assistance to Ukraine is targeted to promote political and economic reform and to address urgent humanitarian needs. The U.S. has consistently encouraged Ukraine's transition to a democratic society with a prosperous market-based economy. For more detailed information on these programs, please see the "Annual Report to Congress on U.S. Government Assistance to and Cooperative Activities with the New Independent States of the Former Soviet Union.

Assistance To Support Ukraine's Transition to a Market Economy. U.S. technical assistance in this area has focused primarily on economic restructuring, tax and budget reforms, development of the private sector, and energy-sector reform. U.S. assistance priorities for Ukraine have included enterprise development, deregulation, macroeconomic reform, privatization of the electricity sub-sector, and nuclear safety. U.S. advisers have provided technical assistance in financial sector reform and capital markets development, tax policy and administration, bank training, accounting reform, accession to the World Trade Organization, land ownership, corporate governance, small and medium-scale enterprise development, municipal services reform, agricultural development and agribusiness, privatization of the electric power sector, energy pricing and efficiency, and public education about market reforms.

Assistance to Support Ukraine's Agricultural Economy and Entrepreneurship.
Entrepreneurship and the small and medium-enterprise sector are closely tied to the future of the agricultural economy in Ukraine. Considerable support has been provided to the Ukrainian SME and agricultural sectors under past U.S. assistance programs, and programs continue in three primary areas: 1) building business and farmer associations, deregulation and policy reform; 2) increasing access to credit; and 3) developing business and management skills through "one-stop shops." The U.S. Government has been instrumental in assisting the privatization of agricultural land and the issuance of land titles. The collective farm system has been eliminated and 6.75 million former collective farm members received the right to hold land titles. More industry is also being privately managed, particularly in agribusiness, where privatization of medium-sized companies is now virtually complete. U.S. Government assistance in agriculture will focus on issuing legal titles to landowners, improving access to credit, strengthening business and farmer associations and improving agricultural markets.

Assistance To Support Ukraine's Transition to Democracy. The U.S. is promoting Ukraine's democratic transition by supporting programs on participatory political systems, independent media, rule of law, local governance, and civil society, as well as a wide range of exchanges and training. USAID has provided Ukraine with technical assistance related to elections, the development of political parties and grassroots civic organizations, the development of independent media and municipal services reform. USAID has been working with Ukrainian officials and nonprofit organizations to create a legal system supportive of a democratic government and a market-based economy. The State Department's Bureau of International Narcotics and Law Enforcement Affairs (INL) is promoting cooperation between U.S. law enforcement agencies and their Ukrainian counterparts to reform Ukraine's criminal justice system. In 1997, the U.S. Government launched a special initiative to combat trafficking in women and children from Ukraine, including efforts to promote economic alternatives for vulnerable populations, increase public awareness, and provide support for victims. See the Department of State's website at http://secretary.state.gov/www/picw/trafficking/index.html.

At the 1999 meeting of the U.S.-Ukraine Binational Commission in Washington, the U.S. announced the Next Generation Initiative, with a target of doubling the number of participants in key exchange programs and refocusing U.S. assistance on Ukraine's youth. Such programs as the Future Leaders Exchange (secondary school students), FSA Graduate-Muskie Fellowships, and the FSA Undergraduate program, as well as programs aimed at teachers, have maintained expanded participant levels during the most recent fiscal years. In addition, professional exchanges (International Visitors, Community Connections) continue to bring hundreds of Ukrainians to the U.S. each year. Between 1993 and 2003, the U.S. Government brought nearly 20,000 Ukrainians to the U.S. for long-term study or short-term professional training.

Exchange programs have enabled Ukrainian entrepreneurs, journalists, academics, local government officials, and other professionals to participate in a broad range of programs that focus on U.S. experience in fields of importance to Ukraine's democratic and market transition. In addition, the Embassy's Democracy Small Grants Program and Media Development Fund offer direct grant support to non-governmental organizations and non-state media outlets to carry out projects that contribute to democratic and market reforms and improved access to information.

Since 1992 the U.S. Commerce Department's Special American Business Internship (SABIT) Program together with the U.S. Department of Agriculture's Cochran Fellowship Program and Faculty Exchange Program have brought 956 Ukrainian business executives, scientists, agriculturalists and agricultural educators to the U.S. for internships and training programs. USAID's participant training program provides opportunities for over 1,500 Ukrainians working with NGOs, promoting economic reform and democracy to visit the U.S. and other countries each year. A $5 million joint U.S.-EU civil society project is supporting civic education, NGO development, good governance and parliamentary exchanges, expanding Ukraine's contacts with Americans and Europeans. This project is now largely completed, but its goals continue to be met through many of the programs described above.

Peace Corps Volunteers are working in Ukraine with a focus on small-business development and English teaching, and the Embassy is actively engaged with Ukrainian educators at all levels to support new approaches to teaching and learning.

Assistance to Strengthen Ukraine's Civil Society. Ukraine has turned a crucial corner in terms of the strength and influence of civil society, but these gains still need to be consolidated and strengthened. U.S. assistance provides technical assistance and training to a wide variety of civic organizations to help them become better advocates for their constituencies, to reduce reliance on donor funding by creating closer links to their own communities, to create greater reliance on the local community for funds and volunteers, and to improve transparency by training civic organizations about conflict of interest, board management and financial management. In addition, the FREEDOM Support Act program supports research and public opinion polls undertaken by think tanks and seeks to improve the legal and regulatory framework related to freedom of association and speech. Grant programs also support the development of civil society and independent media and facilitate access to information through the Internet. In the media sector, U.S. assistance supports TV, radio and print media outlets, with an emphasis on strengthening regional news outlets by training journalists, news editors, and station managers, as well as NGOs that support the media.

Support for the Social Sector. The U.S. is assisting Ukraine's efforts to ameliorate some of the social consequences of the transition to a market economy in order to sustain social welfare and stability. To this end, USAID is providing assistance to local governments in redefining the roles of the public and private sectors in providing social services to allow government to focus limited resources on key social sectors. Training and technical assistance are being provided to Ukrainian institutions and government agencies on reforms of health care financing and delivery of medical services. A number of medical partnerships between U.S. and Ukrainian health care institutions have been established to improve both patient care and institutional management. Also, USAID is providing training and technical assistance on ways to improve reproductive health, focusing on providing family planning services and reducing the use of abortion. Finally, USAID has been instrumental in targeting GOU assistance to the most vulnerable groups. Its work in overhauling the public pension system was instrumental in helping the GOU ensure prompt pension payments to eligible retirees.

Humanitarian Assistance. Since 1992, the U.S. State Department's Operation Provide Hope has provided more than $416 million in humanitarian assistance to Ukraine. In 1999, the Office of the Coordinator of U.S. Assistance to the NIS expended $3.8 million in transportation and grant funds to deliver $77 million in humanitarian assistance to targeted groups in Ukraine. In 1999, Operation Provide Hope funded a total of six humanitarian airlifts and 544 deliveries via surface transportation. A total of $18.5 million in U.S. Defense Department excess medical equipment, supplies, and pharmaceuticals was delivered and distributed during the 1999 August-October period to 18 hospitals and clinics in Ukraine's Kharkiv Oblast (Region). The U.S. has repeatedly responded to major disasters; since 1994 USAID's disaster assistance has helped victims of fifteen major natural and man-made disasters, including floods, mudslides and mine explosions. In August 2002, the U.S. Government provided medical equipment worth $50,000 to the city of Lviv after the worst air show disaster on record. In addition, USAID has provided over $128 million in humanitarian assistance since 1994, reaching over three million of Ukraine's most vulnerable people.

Bilateral Trade Issues. The U.S.-Ukraine Trade Agreement, effective June 22, 1992, provides reciprocal most-favored-nation tariff treatment to the products of each country. Since January 1994, the Overseas Private Investment Corporation (OPIC) has approved investment insurance totaling more than $23 million for three projects in Ukraine. OPIC also has sponsored conferences and exchanges to encourage joint ventures between U.S. and Ukrainian companies. Unfortunately, OPIC operations in Ukraine are currently suspended pending the resolution of a dispute involving the expropriation of an OPIC-insured investment. U.S. Export-Import Bank signed a project incentive agreement with the Ukrainian Government in 1999 but has yet to approve any projects in Ukraine.

Security Issues. In Lisbon on May 23, 1992, the United States signed a protocol to the Strategic Arms Reduction Treaty (START) with Ukraine, Russia, Belarus, and Kazakhstan (those states on whose territory strategic nuclear weapons of the former Soviet Union were located). The protocol makes each state a party to the START Treaty and commits all signatories to reductions in strategic nuclear weapons within the seven-year period provided for in the treaty. Ukraine, Belarus, and Kazakhstan also agreed to join the nuclear Non-Proliferation Treaty (NPT) as non-nuclear weapons states. The treaty entered into force on December 5, 1994, the same day Ukraine acceded to the NPT.

Security-Related Assistance. Through FY 2003, the U.S. Department of Defense provided more than $675 million under its Cooperative Threat Reduction (CTR or "Nunn-Lugar") Program to eliminate strategic nuclear delivery systems in Ukraine. CTR activities facilitated START I implementation and have eliminated, removed, or rendered inoperable all strategic nuclear weapons systems in Ukraine, including the SS-19 and SS-24 ballistic missiles and associated silos and launch control centers, heavy bombers, and air-launched cruise missiles of the Soviet 43rd Rocket Army. Another $6 million has been set aside for anticipated projects associated with biotechnology proliferation prevention. The U.S. has provided nearly $11 million to assist Ukraine in establishing and improving its export control and related border security system. With the March 2003 passage of an export control law, the legal structure is in place in Ukraine, but serious holes remain in the country's export control system and the system can still be circumvented. There is no independent oversight body, and enforcement and prosecution of export control violations remains problematic. In addition, the U.S. has provided Ukraine more than $40 million in International Military Education and Training (IMET) and Foreign Military Financing (FMF) to promote military reform and advance Ukraine's ability to participate in NATO Partnership for Peace activities, including peacekeeping in Kosovo, and in the stabilization of Iraq.

The U.S. Embassy in Kiev is at 10 Yuriya Kotsyubinskoho Street, 01901 (tel. [380] (44) 490-4000). The Embassy's website is: http://usinfo.usemb.kiev.ua.