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Thank you, Herman [Pirchner] for your opening remarks,
and Ambassador [Oleksandr] Motsyk for that kind introduction. I am delighted to
join you this evening to help launch what I’m sure will be a productive two
days of discussions that address the full range of issues with Ukraine — from
the state of its democracy and economy to questions of energy security and
national identity. It is good to see so many friends here tonight from
government, think tanks, embassies and the diaspora community.

In the 21 years since the collapse of the Soviet
Union, the United States has worked with its European partners to build a
Europe that is whole, free, democratic, and at peace. Today, this aspiration
has been achieved across much of the continent as Central European countries
have become valued members of NATO and the European Union while significant
progress has been made in furthering Euro-Atlantic aspirations in the Western
Balkans.

Indeed, the United States looks to Europe as our
partner of first resort in confronting global challenges because of what these
countries bring to the table: shared values of democracy and human rights,
strong market economies, and valuable military capabilities.

Despite these successes, we recognize that this
historic project is far from complete. Included in this category of ‘unfinished
business’ in Europe is the goal of the Ukrainian people to develop a more
democratic and prosperous state, which the United States strongly supports.
Ukraine is a country of massive untapped potential — with an educated
population, a vibrant civil society, rich agricultural land, energy resources,
and a large consumer market.

It remains deeply in America’s interest to see an
independent, prosperous and irreversibly democratic Ukraine; a Ukraine that is
modernizing as a European state; a Ukraine where all citizens enjoy the full
protection of the rule of law; and an inclusive Ukraine where all citizens can
contribute to public life.

Over the last two decades, the U.S. has sought to
strengthen and deepen our partnership with Ukraine. The U.S.-Ukraine Charter on
our Strategic Partnership, which was signed in 2008, outlines the breadth of
our relationship and clearly enumerates our shared interests and common goals.
These include protecting Ukraine’s security and territorial integrity,
supporting innovation and technology, and strengthening rule of law, economic
freedom and democratic institutions.

This partnership was launched in July 2009 by Vice
President [Joseph] Biden in Kyiv, with follow-on meetings led by Secretary [of
State Hillary] Clinton in Kyiv and Washington. I was in Ukraine most recently
in February and continued our strategic dialogue through discussions with
officials, opposition leaders, and civil society on non-proliferation, energy
security, economic reform, and advancement of democracy and human rights.

The United States has long put its money where its
mouth is in terms of support for Ukraine, as we have been the largest bilateral
contributor of assistance over the last twenty years. To support Ukraine’s goal
of Euro-Atlantic integration, our assistance programs promote the development
of sustainable institutions that advance democracy and human rights, increase
the interoperability of the Ukrainian military, diversify options for energy
independence, encourage nonproliferation, and improve conditions for economic
investment.

We believe that enhanced engagement with the European
Union offers Ukraine the best guarantee of prosperity and stability, as it has
for so many of its neighbors. The U.S. supports the EU’s Eastern Partnership
program that promotes security, stability and prosperity in six partner
countries including Ukraine. We work to ensure that our bilateral assistance
complements the EU’s political and economic reform efforts.

After five years of negotiations, we welcomed the
initialing on March 30 of the text of the Association Agreement between the EU
and Ukraine as well as the initialing on July 19 of a Deep and Comprehensive
Free Trade Area agreement. While initialing these agreements was an important
milestone, the EU has said that it will not sign or ratify them until political
circumstances are appropriate. We support that approach and remain in close
contact with our European colleagues regarding developments in Ukraine.

Let me be clear: we have not and will not ask Ukraine
to choose between East and West, between the United States and Russia. That is
a false choice that ignores Ukraine’s history and geography. Rather, we want a
strong and stable Ukraine that achieves its own goal of European integration
and enjoys close relations with all of its neighbors. The U.S. has been
striving under the Obama Administration to improve its own relationship with
Russia. We do not expect the government of Ukraine to do otherwise.

Together, the United States and Ukraine have made
significant achievements. Earlier this year, Ukraine completed the removal of
highly enriched uranium from its territory, supporting our joint efforts to
secure the world’s vulnerable nuclear material and make the world safer. We
also appreciate Ukraine’s important contributions to peacekeeping and security
operations, including in Iraq, Afghanistan, and Kosovo.

On the economic front, we welcomed the recent
selection of Chevron and Royal Dutch Shell in tenders to develop shale gas
resources as well as the selection of a consortium led by Exxon Mobil to
explore for hydrocarbons off-shore in the Black Sea. And the U.S. remains
committed to on-time completion of the Neutron Source Facility at Ukraine’s
Kharkiv Institute for Physics and Technology, which will enable Ukraine to
apply new industrial and medical techniques for the benefit of its citizens.

However, more must be done in order to fulfill
Ukraine’s potential as a hub for foreign investment. When I was in Kyiv, I met
with American business people who described the challenges of working in
Ukraine. Their anecdotal frustrations are confirmed by Ukraine’s continued low
rankings in international surveys on its business and investment climate.

For example, Ukraine was listed 152nd out of 183
economies in the 2012 World Bank “Ease of Doing Business” rankings. While U.S.
companies are interested in further investment in Ukraine, they are confronted
by tax and customs problems as well as corruption. And they rightly worry about
fair treatment in court. In order to alleviate these concerns, Ukraine must
provide companies – both foreign and domestic – with a level playing field that
includes better legal protections and transparent, predictable rules.

The Yanukovych administration has adopted some
important legislation, including measures related to the tax and customs
administrations, a new criminal procedure code, and laws guaranteeing public
access to official documents and enhanced due process protections.

On the governance front, the parliament established a
sound basis for NGOs to operate, while the parliamentary election law did, in
the end, pass with the support of most opposition MPs. These are all helpful
steps that will have positive effects — if the laws are fully and properly
implemented.

Ukraine is now in the midst of another key event in
the development of its democracy — the campaign leading up to parliamentary
elections on Oct. 28. When Ukrainian citizens last went to the polls in 2010 to
choose a new president, the election reflected the peaceful expression of their
political will. That election provided a clear choice among candidates in a
calm atmosphere that was followed openly by the media and engaged citizens who
turned out in high numbers. And that presidential election was judged by
international observers to be free and fair.

I was proud to be part of the US delegation that
attended President [Viktor] Yanukovych’s inauguration. President [Viktor] Yanukovych
and other senior officials have pledged that the Oct. 28 parliamentary elections
will similarly meet international democratic standards, including full access
for international and domestic election monitors. We urge Ukraine to follow
through on these commitments.

The United States is providing approximately five
million dollars in funding for activities to promote free and fair
parliamentary elections. We are supporting long-term observation by over 260
Ukrainian and international monitors and short-term monitoring by 3500 domestic
observers, as well as a Parallel Vote Tabulation and exit poll.

We are strengthening the capacity of Ukraine’s Central
Election Commission to train election management bodies, training lawyers and
administrative court judges to ensure the protection of voters’ and candidates’
rights, and encouraging the promotion of public debate and engagement in the
electoral process through voter education campaigns.

It is worth stressing that free and fair elections
extend beyond activities on Election Day to the three month campaign that
precedes voting. Media freedom is a key component of this process. We are
therefore concerned by reports of harassment of independent and opposition
outlets by local authorities, tax inspectors, and prosecutors’ offices.

The disappearance of independent television station
TVi from cable operators in multiple cities has the appearance of a deliberate
effort to silence one side in the pre-election debate. We urge the government
of Ukraine to address these problems.

We deeply regret that two imprisoned opposition
leaders – former Prime Minister Tymoshenko and former Interior Minister
Lutsenko – have been disqualified from participating in the election. As
Secretary Clinton stated on May 1 of this year, we “call for Ms. Tymoshenko’s
release, the release of other members of her former government and the
restoration of their full civil and political rights.”

We also urge the government of Ukraine to cease
further prosecutions against them and other political opposition leaders. While
two former members of Ms. Tymoshenko’s former Cabinet were released earlier
this year, we are disturbed to see the Prosecutor General’s Office continuing
to pursue additional investigations against Ms. Tymoshenko and Mr. Lutsenko.

When I was in Ukraine earlier this year, I reiterated
our concerns about politically motivated prosecutions of opposition leaders.
Such trials undermine democracy and democratic values, risk ingraining
self-censorship in the media, and discourage civic participation given fear of
prosecution.

They also create a stumbling block in our bilateral
relations as well as in Ukraine’s quest to become a truly democratic society.
Leaders of the EU and its member states have specified that they will not move
ahead on signing and ratifying their agreements with Ukraine until this problem
of selective prosecutions has been addressed.

Ukraine’s parliamentary elections come at a time when
Ukraine is preparing to assume the Chairmanship-in-Office of the Organization
for Security and Co-operation in Europe (OSCE) in 2013. In order for Ukraine to
lead by example and demonstrate its commitment to the Helsinki principles on
democracy and good governance, it will be important to demonstrate that its
elections met the highest international standards. We look forward to working
with Ukraine to ensure that the OSCE remains a potent force for democracy,
human rights, and rule of law across Europe and Central Asia.

In conclusion, Ukraine has made tremendous progress in
the last 20 years. The country can be proud of its achievements, as a young
generation of Ukrainians is growing up with new freedoms and opportunities as
well as a new mentality. But there is still much work to be done. History shows
that in industrialized societies, economic modernization and political
modernization go hand-in-hand as both are rooted in transparency, competition,
rule of law, and strong democratic institutions.

Indeed, America’s best partnerships are with
like-minded countries who share our values: commitment to democracy and rule of
law, free speech, open markets, and protection of human rights. We will
continue to offer our active support, but Ukraine’s success will ultimately
depend on the choices and actions of the Ukrainian people.

Free and fair elections are at the heart of the
democratic process. We encourage Ukraine to seize the opportunity of the
October parliamentary elections and to use them as a springboard toward
becoming a modern, prosperous, democratic, European country.

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