Thursday, April 3, 2014

Putin Signs Law Terminating Black Sea Fleet Agreements with Ukraine

Russian President Vladimir Putin signed a law invalidating four bilateral agreements with Ukraine providing for the basing of the Black Sea Fleet, the Kremlin said Wednesday. The measures to be scrapped include a 1997 agreement on the conditions of the fleet's stay in Crimea, which was extended by 25 years in a 2010 deal by Ukrainian President Viktor Yanukovych, who was ousted as a result of a coup in February. The Russian Black Sea Fleet is headquartered in Sevastopol, a city with a special status within Crimea. As part of the agreements on its basing rights, Russia paid the Ukrainian government $530 million annually for the base, and wrote off nearly $100 million of Kiev's debt for the right to use Ukrainian waters. The law also invalidates the fourth agreement between Moscow and Kiev, under which Russia granted Ukraine a $100 discount for Russian gas by lifting taxes levied for the Russian state budget. The price for Ukraine is expected to rise to $485.50 per 1,000 cubic meters of gas after the Russian government issues an official resolution. The Kremlin said last month that there were no legal grounds for the continuation of the discount premised on the continuation of a basing agreement for Russia's Black Sea Fleet in Sevastopol, which is no longer part of Ukraine.

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