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Separatists Seize Ukraine Billionaire's Operations As Tensions Rise Over Blockade


A blockade by nationalist Ukrainian lawmakers and veterans of the ongoing war in the east has caused almost all rail traffic in the Donetsk and Luhansk regions to cease. (file photo)
A blockade by nationalist Ukrainian lawmakers and veterans of the ongoing war in the east has caused almost all rail traffic in the Donetsk and Luhansk regions to cease. (file photo)

KYIV -- Russia-backed separatists paralyzed a telecom firm and a charity controlled by Ukraine’s richest man, escalating tensions over a trade blockade between separatist-controlled territory and the rest of the country.

The March 1 seizures in eastern Ukraine, which the separatists said targeted dozens of factories and coal mines as well, were denounced by President Petro Poroshenko as "another brutal and dreadful violation of international law."

"Russia de facto confiscated Ukrainian state and private assets located in the occupied territory. This is yet more evidence of Russian occupation of eastern Ukraine," Poroshenko said in a meeting in Kyiv with Boris Johnson and Witold Waszczykowski, the respective foreign ministers of Britain and Poland, according to a statement released by his office.

The seizures followed an announcement by the separatists that they would take control of enterprises located on territory they hold as of March 1 in response to the road and rail blockade, which was imposed more than a month ago by nationalist Ukrainian lawmakers and veterans of the ongoing war in the east.

The blockade, whose backers have denounced what they call the "trade in blood" with the separatists, has caused almost all rail traffic in the Donetsk and Luhansk regions to cease. It is opposed by the Ukrainian government.

The embargo has also hindered vital coal shipments to power stations and industrial plants in government-held areas, adding strains to a Ukrainian economy already struggling with the effects of the war that has killed more than 9,750 people since the Russia-backed separatists seized territory in April 2014.

A flare-up in fighting killed more than 40 people in January and February and led to renewed international calls for implementation of much-violated cease-fire agreements known as the Minsk accords.

Separatist leaders Aleksandr Zakharchenko and Ihor Plotnitskiy raised the stakes on February 27 by announcing plans to "nationalize" Ukrainian companies in the areas they control, saying the blockade went against the Minsk agreement and was hurting businesses. They also said they would stop selling coal to Ukraine and instead send coal supplies to Russia or elsewhere.

Zakharchenko, the leader of the separatists based in Donetsk, told local media outlets on March 1 that separatists have seized 40 factories and coal mines located in areas they control.

Among the targets in the operation were entities controlled by billionaire Rinat Akhmetov, Ukraine’s richest man.

A spokesman for Akhmetov said on March 1 that armed separatists had taken control of an arena in the eastern city of Donetsk that had served as a staging ground for a charity that has distributed humanitarian aid since the war erupted in the region nearly three years ago.

"At the moment, we're unable to deliver any humanitarian aid inside nongovernment-controlled territory," spokesman Jock Mendoza-Wilson told RFE/RL.

Meanwhile, the director of Ukrtelecom, a leading telecom owned by Akhmetov, wrote in a March 1 Facebook post that the company had its office and equipment seized in Donetsk and was forced to halt phone and Internet service in separatist-controlled areas of the region.

"Around 200,000 of our citizens have lost the ability to interact," Mikhail Shuranov wrote.

Ukrainian Justice Minister Pavlo Petrenko warned that Kyiv would add references to the seizures to its international lawsuits against Russia, saying that "Moscow rules the authorities" in the separatist-held areas and adding: "Russia will bear liability for this."

Poroshenko's government has long resisted striking a deal with the people enforcing the blockade, while warning that it could lead to power cuts but saying it has enough coal reserves to last through March. But the Interfax news agency reported on March 1 that the Ukrainian government approved regulations for transporting goods to the conflict zone in eastern Ukraine, a possible step toward an attempt to end the blockade.

WATCH: Ukrainian PM Says Blockade Forces Firms To Buy From Russia

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Prime Minister Volodymyr Hroysman said the regulations came along with a plan to set up checkpoints to "track transportation and compliance with the decisions that we make."

He added: "The main thing is that everything approved will be allowed, and any other things will be prohibited, absolutely everything."

Efforts to end the blockade came after a shortage of anthracite coal prompted Kyiv to introduce emergency measures in the energy sector on February 15, and several steel plants in the east have already been forced to suspend production. Among them are some belonging to Ukraine’s largest steel producer, Metinvest, which employs thousands of workers on both sides of the front line.

Metinvest told Reuters it would be "unacceptable" for separatist officials to take control of its businesses, saying this would force it to halt the affected operations and possibly cost the jobs of some 20,000 people.

The trade regulations approved on March 1 had been promised on February 28 by Hroysman, whose previous attempt to compromise with the blockade participants was unsuccessful.

In a February 28 interview with Current Time TV, the Russian-language network run by RFE/RL in cooperation with VOA, Hroysman warned that the blockade could have "catastrophic consequences for the Ukrainian economy."

"The political goals of the blockade are absolutely clear -- it's the destruction of Ukraine," Hroysman said. "This plays into the hands of the Russian Federation, of course, and Ukrainians are the ones who suffer. If the blockade continues, the economy will start to fall."

Other officials have called for a more confrontational approach to the blockade participants, who have vowed to maintain the blockade and threatened to step it up by blocking crucial shipments of humanitarian aid to the separatist-held areas.

Interior Minister Arsen Avakov has called on the government to find a way to forcibly end the blockade, and several blockade participants at two locations were attacked on March 1. The identify of the assailants was unclear.

Russian President Vladimir Putin's spokesman defended the separatist move to seize companies, saying that "regions that have been rejected by their state are in an increasingly difficult the conditions of a total blockade by extremist elements."

"So, of course, to some degree one can understand the actions of the leaders of those regions," he said.

Russia denies involvement in the conflict in eastern Ukraine, despite what Kyiv and Western countries say is incontrovertible evidence that Moscow whipped up separatism there in 2014 and has sent troops and weapons acrioss the border to support the separatists. The United States often refers to the fighters opposing government units as "combined Russian-separatist forces."

Timothy Ash, an economist covering Eastern Europe, commented on Twitter that Kyiv will probably have to "cut a deal" with the separatists to end the blockade, which he said is likely to persist while Ukraine’s parliament is in recess.

“So likely to get worse before better,” Ash said of the situation.

With reporting by Reuters and Interfax

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