U.S. Department of the Treasury

(Archived Content)

FROM THE OFFICE OF PUBLIC AFFAIRS

We are deeply concerned about the information in yesterday's IMF statement, which describes the past mismanagement and misreporting of Ukraine's reserves. All IMF members are obligated to provide the IMF with comprehensive and accurate information on their finances and economic and financial policies.

The IMF and Ukraine must complete a thorough investigation and audit of Ukraine's reserve reporting and management from end-1996 to September 1998, and publish the results. We welcome Ukraine's commitment to a policy of maximum transparency and openness in cooperation with international financial institutions. We also welcome its recent progress and resolve to strengthen economic reforms.

In addressing the issue of additional IMF financing for Ukraine, we will review the results of this investigation in order to determine what additional controls are needed to prevent future inappropriate reserve management practices and to ensure that future IMF resources made available to Ukraine are used for their intended purpose. Ukraine must also satisfy the economic and financial policy conditions for a resumption of IMF lending.

IMF management has acknowledged that the handling of this matter raises issues that it needs to address, including the handling of reports of Ukrainian reserve mismanagement emanating from the Ukrainian parliamentary commission.