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Ukraine threatens international arbitration over Russia oil dispute

Ukranian President Viktor Yanukovych [BBC profile] on Tuesday threatened to take Russia to international arbitration over gas disputes. Ukraine relies heavily on Russian oil imports [Reuters report], and its territory provides transit for 80 percent of Russia's oil supplies to Europe. Yanukovych would like to get out of a 10-year deal signed with Russia in 2009, but Russian President Dmitry Medvedev stated that this would only be possible if Ukraine joined the Russian-led customs union. Kiev has repeatedly denied this offer, instead threatening to take this issue to Stockholm arbitration court. Yanukovych has contented that the price for gas is unfair and states that the 2001 accords [AFP report] signed by former Ukrainian prime minister Yulia Tymoshenko [personal website; JURIST news archive] should serve as the basis of gas relations between Ukraine and Russia. Yanukovych said that it is currently overpaying for oil by about $5 to $6 million annually. The EU has criticized Yanukovych over how he handled the trial of Tymoshenko.

In July, a Ukrainian court dismissed [JURIST report] Serhiy Vlasenko, a lawyer representing Tymoshenko, from judicial proceedings. Vlasenko had been defending Tymoshenko in a criminal case related to United Energy Systems of Ukraine (UESU), an energy company at one time headed by the former prime minister. The Pechersky District Court of Kiev dismissed Vlasenko saying he was responsible for systematic violation of order in the court, in contempt of court and responsible for obstruction of justice with disregard for the rule of law. Also in July, the Security Service of Ukraine (SBU) [official website, in Ukrainian] announced that they are launching a criminal investigation [JURIST report] into UESU, an energy company at one time headed by former Tymoshenko. The SBU is investigating UESU's potential embezzlement of USD $405 million from the government.

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