German Officials Pressure Ukraine Over Dubious 1991 Debt: NBU Response and Details of Claims

It remains unclear why the German side is pressuring Ukraine directly rather than going to court.

German high-ranking officials are pressuring Ukrainian authorities over a dubious 1991 debt, journalists report in a joint investigation with Der Spiegel and Radio Svoboda.

According to the German side, Ukraine allegedly owes €40 million to the company Varex for Siemens CT scanners it purchased. The company, with a dubious past, is hiding behind a 1991 “guarantee” from the NBU, yet is not going to court.

More on how the National Bank of Ukraine responded and other details of the investigation.

Details of the investigation

Der Spiegel journalists reported that German officials demanded that Ukraine pay the company Varex more than €40 million, allegedly for the supply of Siemens computed tomography devices under a contract signed back in 1991. 

Among these officials are the German federal minister of economics and energy, two parliamentary state secretaries in his ministry, and two Bundestag deputies from the Christian Democratic Union (one former).

German company Varex claims that the debt of the Ukrainian government, which by the company's own calculations has already reached €1 billion with interest, is allegedly “secured” by a letter of guarantee issued by the National Bank of Ukraine in 1991.

NBU response

The National Bank of Ukraine sees no grounds for paying millions of euros to the Munich-based firm Varex.

Varex approached the NBU in 2017, and then-head of the agency Valeriya Hontareva sent the company a reply stating that the 1991 “guarantee” was not acceptable. 

According to her, the document lacks amounts, a validity period, any mention of Varex itself and, consequently, any obligations of the National Bank toward it.

The current leadership of the National Bank of Ukraine confirmed this view: “the provided copy of the document titled ‘guarantee’ is not a bank guarantee under Ukrainian law and cannot serve as grounds for payment of funds by the National Bank of Ukraine.”

Other details

Varex, however, left unanswered the question about the discrepancies in the document. Lawyer Michael Filippi told Der Spiegel that copies of all relevant documents had been provided to the Ministry of Economy. The originals, including the state guarantee, are kept “in a safe place.”

The German Ministry of Economy also did not answer a question about the contents of the above-mentioned document. A ministry representative only said the case had been “monitored since the 1990s” and that “there have been repeated appeals to Ukrainian officials since then.”

The investigation states: “Since 2018, a number of officials from the CDU have been pressuring the Ukrainian government to repay a debt to a dubious Munich company. It dates back to the collapse of the Soviet Union. Siemens medical technology was delivered, but Varex says the Ukrainians owe part of the agreed sum.”

It is also noted that Federal Minister of Economics Peter Altmaier wrote urgent letters to Kyiv regarding Varex, and his ministry sent an official “delegation” to Ukraine led by a CDU Bundestag deputy. 

Parliamentary State Secretary Thomas Bareiß, also from the CDU, pressured Ukrainian President Volodymyr Zelensky during the Munich Security Conference

The publication also writes that Varex “was active in the corruption-prone medical technology business.” 

The company, the investigation says, indeed has a dubious past: in the 1990s it became embroiled in a high-profile corruption scandal involving the buyout of a stake in the joint Ukrainian-German enterprise “Donkavamet.” Varex has long been suspected of paying Ukrainian politicians, although the firm denies all allegations.

Journalists asked the Office of the President to confirm whether such pressure had taken place, but received no response.