Russia will denounce "Kharkov agreements" and will demand $16 billion from Ukraine

Russia will denounce "Kharkov agreements" and will demand $16 billion from Ukraine

The Prime Minister of the Russian Federation Dmitry Medvedev at the session of the Security Council of the Russian Federation on March 21 informed that the Kremlin believes that after the annexation of the Crimea to Russia the so-called "Kharkov agreements" on basing the Black Sea Fleet of Russia and on granting Ukraine discounts for Russian gas are no longer valid. In this regard the question of offsetting Ukraine's debts to Russia in the amount of $16 billion is raised.

According to Dmitry Medvedev, "Kharkov agreements" signed in 2010, according to which Ukraine received a discount for Russian gas in the amount of $100 per one thousand cubic meters, are subject to denunciation.

The Russian Prime Minister explained that under the terms of agreements the term of dislocation of the naval base of Russia in the Crimea was prolonged for 25 years. Simultaneously, this treaty presupposed that Russia would provide property benefit to the Ukrainian state in the form of the renunciation of levy of mandatory payments to the budget of the Russian Federation. And Russia began to fulfill it immediately, in spite of the fact that its fleet could be deployed in the Crimea for a long time according to the previously concluded agreement. "Thus, the Ukrainian state saved approximately $11 billion, and, respectively, the budget of the Russian Federation has loss of profit in the amount of the same $11 billion," Dmitry Medvedev noted.

The Russian Prime Minister believes that this amount should be added to $3 billion, which were recently provided to Ukraine in the form of the purchase of the bonded loan, as well as the accumulated debt to Gazprom in the amount of approximately $2 billion. "Thus, the total volume of commitments grows up to a very considerable amount," Dmitry Medvedev stressed.

The head of the Russian government believes that it is absolutely legitimate to raise the question of compensation of this sum from the budget of Ukraine that could be done juridically. Dmitry Medvedev called these measures strict, however, in the current situation, he considered them inevitable.

In 1997 Russia and Ukraine concluded a basic agreement on the terms of dislocation of the Black Sea Fleet of the Russian Federation in the Crimea. This agreement specified conditions of dislocation of the Russian Black Sea Fleet on the territory of Ukraine for the period up to  May 28, 2017, including, the rent in the amount of $98 million.

However, in April 2010 Presidents of Russia and Ukraine - Dmitriy Medvedev and Viktor Yanukoych signed "Kharkov agreements", according to which the term of dislocation of the Russian base in the Crimea was prolonged for 25 years starting with 2017, and Ukraine in return would receive a discount for gas.

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