Ukraine: Daily Briefing – July 11, 2018, 4 PM Kyiv time

Ukraine: Daily Briefing
July 11, 2018, 4 PM Kyiv time
1. Russian Invasion of Ukraine
Ukraine’s Ministry of Defense reported at 12:30 PM Kyiv time that in the last 24 hours, no Ukrainian soldiers were killed or wounded in action. In the last 24 hours, Russian-terrorist forces opened fire on Ukrainian positions on the Luhansk and Donetsk sectors of the front 20 times in total. Russian-terrorist forces opened fire on residential areas of Krasnohorivka. One civilian was injured.
2. In advance of NATO and Trump-Putin Summits, Bipartisan group of US Senators reiterate importance of continuing sanctions on Russia for invading Crimea

The US Senate Foreign Relations Committee stated on July 10, “U.S. Senators Bob Menendez (D-N.J.), Ranking Member of the Senate Foreign Relations Committee, and Rob Portman (R-Ohio.), co-Chair of the Senate Ukraine Caucus, today led a group of eight of their Senate colleagues in introducing a Senate Resolution condemning the Russian Federation’s ongoing illegal occupation of Crimea. The bipartisan resolution comes ahead of President Trump’s scheduled trip to Europe, where he will attend a NATO Summit in Brussels as well as meet with Russian President Vladimir Putin in Helsinki.

           Affirming the Senate’s full support for the sanctions the United States and the European Union have imposed against Russia for its illegal occupation of Ukrainian territory, the Senators’ resolution calls on the Trump Administration to formalize a policy of non-recognition of Russia’s illegal annexation of Crimea. The United States adopted a firm non-recognition policy during the Cold War with the Welles Declaration, which condemned the forced annexation of the Baltic States by the Soviet Union. […]
          ‘The United States continues to stand with Ukraine against Russian aggression,’ said Portman. ‘Crimea was illegally seized from Ukraine by Russia, and the United States must never recognize this illegitimate occupation. This violates not just the rights of the Ukrainian people, but also the fundamental principles of the international order that America has proudly led for more than 70 years. Crimea is part of Ukraine. Until Russia recognizes that fact and returns Crimea to Ukrainian control, the United States must maintain sanctions on Russia.’
          The Menendez-Portman resolution was co-sponsored by Senators Dick Durbin (D-Ill.); Pat Toomey (R-Pa.); Chris Coons (D-Del.); Marco Rubio (R-Fla.); Ed Markey (D-Mass.); Johnny Isakson, (R-Ga.); Ben Cardin (D-Md.) and Sherrod Brown (D-Ohio.).
The full text of the resolution is available here
3. FSB in Russian-occupied Crimea torture Crimean Tatar
Radio Free Europe/Radio Liberty (RFE/RL) reported, “A driver for the wife of veteran Crimean Tatar leader Mustafa Dzhemilev says he was tortured by officers of the Russian Federal Security Service (FSB) in Crimea.
          Akhtem Mustafayev told journalists in Kyiv on July 10 that FSB officers detained him near Dzhemilev’s house in the Crimean city of Bakhchysaray on June 28 and held him in custody for more than four hours. ‘They handcuffed me, threw me into a Mercedes-Sprinter car and put a sack over my head,’Mustafayev said.
          He said the officers took him to an unknown location where they beat him, striking him on the chest and head, forced him to stand on his knees with his hands cuffed behind his back, and tightly covered the top of his head with tape. ‘They threatened me, saying that they can make sure that nobody will find me,’ Mustafayev said.
          Mustafayev also said the officers asked him questions about his regular trips from Crimea to Kyiv, his ties with Mustafa Dzhemilev and his associates, and other issues related to Crimean Tatars in general. He said the officers used a polygraph during the questioning and forced him to sign a document saying that no physical force was used during the questioning.
         ‘They then brought me to the FSB office in Simferopol and later released me,’ Mustafayev said.
         Mustafayev works as a driver for Dzhemilev’s wife, Safinar. Dzhemilev, 73, is a member of the Ukrainian parliament. […] Dzhemilev was a leading human rights activist during the Soviet era and was jailed several times. He has been banned from Crimea since Russia occupied and seized control of the peninsula in 2014.
Rights groups and Western governments have denounced what they call a campaign of oppression targeting members of the Turkic-speaking Crimean Tatar minority and others who opposed Moscow’s rule.”
4. Moody’s raises Ukraine banking system outlook from stable to positive
On July 9, Moody’s Investors Service “raised its outlook for Ukraine’s banking system to positive from stable, reflecting the rating agency’s expectation that the creditworthiness of the country’s banks will improve over the next 12 to 18 months, driven by improving asset quality and a return to profitability. […]
           ‘Ukraine’s economy will continue to recover gradually, stimulating credit demand and improving borrowers’ capacity to repay their loans,’ said Lev Dorf, an AVP and analyst at Moody’s Investors Service. ‘Now that banks have recognized most of their non-performing loans, provisioning charges should also decline, bolstering profits.’
          Moody’s expects Ukraine’s economy to grow by about 3.5% annually this year and next after expanding by 2.5% last year, as the ongoing recovery in investments continues, bolstering the operating environment for banks. Stronger economic growth should then lead to a prolonged period of credit growth. Moody’s forecasts that loan growth will strengthen to a nominal 10% over the next two years, from around 7% in 2017.
         Asset quality will improve and problem loans will fall from very high levels over the next two years, mainly driven by a combination of loan restructuring and write-offs. At the same time, the quality of new loans will be supported by the improving economic conditions.

Moody’s forecasts that the banking system will return to overall profitability in 2018 after four years of losses. Although almost three quarters of Ukrainian banks were profitable last year, the sector as a whole made a net loss last year. This was driven by the high provisioning charges at Privatbank, which accounted for 90% of the bank system’s losses at the end of 2017,” Moody’s Investors Service stated.

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