Archive for November, 2016

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And the next Odessa Governor is………

November 30, 2016

When former Governor Saakashvilli resigned on 7th November, whilst many a post mortem regarding his achievements and legacy in Odessa, not to mention his future plans filled the media space, the first question the blog raised was who would replace him?

An especially poignant question as the new legislation allows President Poroshenko to either move an existing appointed governor from another region, or instigate a “transparent” selection “competition”.

As that entry made clear, “The new legislation has witnessed this process occur several times since in came into effect.  Would any reader be surprised to discover that the winners in both Kharkiv and Mykolaevskaya Oblasts came from the presidential BPP faction?  (The successful candidate for Mykolaevskaya Oblast is definitely not the sharpest tool in the tool box, so a reader may ponder just how testing the examinations actually are.)

If it is a coincidence that both Kharkiv and Mykolaevskaya Oblasts saw BPP winners, then perhaps that coincidence will continue?

It therefore matters which BPP affiliated candidates throw their hats in the ring.”

On 30th November, Presidential Decree №280 / 2016-rp announced the “competition” for the post of Odessa Governor.  Ergo President Poroshenko having pondered matters for 3 weeks has decided against moving an existing governor from a different oblast to Odessa.

Odessa Oblast Administration

Odessa Oblast Administration

However, despite all the local Poroshenko/BPP loyalist names mentioned in the above-linked entry it is quite clear that not a single one among them is particularly interested in the post.  Should their names appear in the competition it is therefore fair to assume they are “pressed men” to one degree or another – and not volunteers.

Of the one individual that has expressed an interest,  Yevhen Chervonenko is a “colourful character” and perhaps not perceived as loyal as required by President Poroshenko to become the “anointed winner” of the forthcoming “competition”.

A reader may now decide to concentrate upon who enters the competition – and who is specifically the BPP candidate and/or who is historically loyal (enough) to President Poroshenko to be allowed to govern a nationally strategic oblast (and an oblast that is also the font of many, many millions in nefariously accrued US$) – for “coincidence” would appear to dictate that their chances may be somewhat higher than other candidates.

With no willingly obvious and sufficiently loyal local candidate, the runners and riders will be rather interesting to behold – albeit once known picking the winner may not be particularly difficult even before the selection process begins.

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Chernobyl reactor entombed at last

November 29, 2016

A very short entry to firstly acknowledge a major piece of engineering, and secondly the symbolic entombment of a toxic Soviet legacy within a western funded and built sarcophagus – (Sarcastic readers are now pondering whether the Verkhovna Rada should be next perhaps?)

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The full facts and figures can be found at the EBRD website, together with a video showing the final settling of the sarcophagus in place, outlining what a major feat of engineering the project has been.

Bravo to all concerned.  A truly significant achievement.

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A tangled web – The Ukrainian MIC

November 28, 2016

There are many (in)famous Ukrainian politicians, “businessmen” and recognised organised criminals historically associated with gun running and the defence industry/MIC of Ukraine.

In entries past, the names of Semyon Mogilevich, Leonid Minin, Sergei Mikhailov, Leonid Wulf, Alexander Zhukov, Vadim Rabinovych, Leonid Lebedev, Mark Garber, Kuzma Medanich, Andrey Vazhnik, and Anatoliy Fedorenko, are to name but a few “headliners”.

Since those gun running 1990s/2000 decades have passed, in recent years the Ukrainian military and MIC have been forced to undergo radical changes and retooling – nothing spurs such action as a confined yet nevertheless hot war with Russia in the eastern regions.  Also, no longer do trains loaded with armaments sat on rail sidings at Odessa Port go without more than a few photographs and a questions by both public and media alike.

That is not to say that whilst the hollowed out military is by no means hollow anymore, that the endemic corruption that enabled the gun running of the 1990s/00s has been systemically and comprehensively addressed.  Indeed now large lumps of GDP are heading to the military and MIC, and will continue to do so for years to come,  the eyes of the “rent seekers” so attuned to guzzling from the teat of State subsidies and embezzlement of State funds will naturally seek opportunities therein.

So too, it has to be said, will the Kremlin seek to infiltrate further such MIC structures.

Putting the military to one side, the Ukrainian MIC which is still predominantly State rather than private in its composition, will at some point surely be subjected to some form of scrutiny when it comes to the abilities and loyalties of those working within.  With more than 100 State MIC subsidiaries operating under the State Ukrboronprom umbrella there are a lot of managers with access to information that “others” may find “useful” and some skill sets that are clearly not optimal for their roles.

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Ukrboronprom is currently headed by Roman Romanov (a former car dealer who led the presidential election campaign for Petro Poroshenko in Kharkiv).  Beneath him spreads a large organagram of managers across the one hundred plus SOE subsidiaries.  Whether Mr Romanov has been either tasked or is even able to assess the professional competency and patriotic leanings of the management of those companies which collectively form the Ukrainian MIC is unknown.  A “single sweep” would be far from effective if that is all that results anyway.

Among the management of such subsidiaries certain names catch the eye being from Odessa – for example, Alexander Volkov.

Mr Volkov is currently acting head of Promoboroneksport – a subsidiary that has been busy with BMPs in Jordan and MiG 24V helicopters to Uganda throughout 2016.  All appears to have contractually gone well, and thus it seems very likely that Mr Volkov will become the substantive head of Promoborneksport.

Mr Volkov is best known is Odessa as being the long standing regional party chairman of the Social Democratic Party of Ukraine (united) – or SDPU(u) – and his work at the ports and roads industry.

The SDPU(u) is a party long and closely associated with the nationally loathed Viktor Medvedchuk (Godfather to one of President Putin’s children).

Promoboroneksport is a subsidiary of Ukrspetsexport, which is in turn a subsidiary of Ukrboronprom.

Ukrspetsexport is also headed by a native of Odessa, Pavel Barbul.

Mr Barbul is better understood by his father’s associations.

Alexie Barbul has long been associated with roadworks.  He once headed the roads department at Odessa City Hall, thus not only making him a close acquaintance of Mayor Turkhanov (who is well acquainted with several names listed at the beginning of this entry) but he is also with the company “Growth” (winner of many Odessa tenders) associated with Mayor Trukhanov, the aforementioned Alexander Zhukov, and Odessa’s most (in)famous mafia Don, Alexander (Angel) Angert.  The involvement in road infrastructure also meant that Alexie Barbul was well acquainted with Mr Volkov, who now heads a subsidiary subservient to that Pavel Barbul now controls.

Thus looking at recent, current and future appointments within a clearly tangles web, a reader may come to one of two conclusions – though neither are in fact mutually exclusive.

The first, with names such as Medvedchuk, Trukhanov, Zhukov, Angert nestling behind Messrs Volkov and Barbul, is that the Ukrainian MIC is subtly (or not so subtly) “zoned” – with the Odessa controlled “zone” being that of export, whether or not that export actually leaves from Odessa is irrelevant – this is to do with regional structures of power/influence, and probable sources of hierarchy in rent seeking and embezzlement arrangements.  (A look at the “Kharkiv names” would suggest that the “Kharkiv zone” will be far more production orientated – the same rules applying).

The second conclusion a reader may reach, considering the curriculum vitaes of many of the old names and their associations with organised crime, gun running historically, and with many a very questionable definition of “patriotism”, is that more of the same old schemes may well blight the international headlines in the years hence to the detriment of Ukraine.

A reader may also decide to keep a watchful eye upon the centres of R&D that fall within current university specialised departments.  Would any be surprised to see such centers, boffin brains and facilities included, somehow removed from the university and entirely (yet quietly) privatised, or subjected to a PPP arrangement where the private, rather than the public, in any partnership would seize control and almost all profit – with the Ukrainian taxpayer assuming all investment costs and/or loses?

How clear the horizon for such State-Private initiatives such as UaRpa at the forefront of military tech R&D?  Whose “zone” will it fall into, and when?

A reader may ponder given the direct involvement of several sovereign nations, notwithstanding NATO, in the development of the Ukrainian military and MIC whether they too are viewing managerial appointments within the MIC with the same cynicism as displayed within this entry – or not.  And if not, why not?  They have been active in Ukraine now long enough to spot a bad seed germinating, and currently still have the leverage to nip such dubious, yet increasingly obvious internal structuring in the bud.

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The Firtash star falls yet further – Ukraine

November 27, 2016

Whilst all eyes will be upon Mikhail Saakashvili and the inaugural gathering of his newly minted “Rukh New Forces” in Kyiv on 27th November, and its possible political rise – not to be confused with the old “Rukh” political party which may well see a revival simply and deliberately to insure confusion on any ballot paper – the political/influential decline of Dmitry Firtash continues apace.

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As previously mentioned in historical entries, Mr Firtash once powerful within the Party of Regions machinery has seen his influence significantly reduced since its collapse.  More so than any of the other oligarchs associated with PoR, such as Rinat Akhmetov or Sergei Liovochkin etc.

He finds himself marooned in Austria following a thus far unsuccessful US attempt to extradite him over corruption accusations.

Though extradition from Austria may have failed, he remains wanted by the US.  Indeed in June, inquiries were made following a request by one close to him, via back channels, regarding any possibility of a change of US policy toward him.  The answer a definitive – No.  Those close to him again last week requested that inquiries be made via the same back channels regarding the possibility of an out-going Obama Presidential Pardon, resulting in another definitive – No.  (A reader would infer that any “pardon” must also relate to an admission of guilt – for how otherwise to pardon somebody who claims to have done no wrong?)

Matters will not improve for Mr Firtash – they will actually deteriorate further.

Mr Firtash has come to light in a German bribery case.

There is a matter of €500,000 cash being provided to ex-Stasi officer Nina Vilkening to facilitate desired outcomes via the Chief Commissioner of the Criminal Police Mecklenburg-Vorpommern, who received €300,000.

No doubt inquiries will continue and as none of the defendants are particularly youthful, it is not beyond the realms of probability that a deal can and/or will be cut with defendants in order to bring to light the full extent of Mr Firtash’s active involvement in bribery among the German institutions.

Thus it may yet prove only to be a matter of time before Mr Firtash is wanted by Germany – an extradition request that will not be denied by Austria.

Whilst this may now be appearing upon the horizon, the Spanish are far ahead of the Germans.

Spain has admirably been pursuing “Slavic” organsied crime for several years.  Russia has publicly decried Spanish investigations, reports and arrest requests for several years.  Ukraine is not exempt.  Only recently a number of Ukrainians, including the son (Stepan Chernovetsky), of the former Mayor of Kyiv, have been arrested for organised criminality and money laundering in Spain.

Bravo Spain – an example for Austrian and UK (in particular) banking and organsied crime investigative bodies to follow.

Mr Firtash, and two other as yet unidentified Ukrainian businessmen, have now fallen foul of Spanish investigations.  Judge Ignacio Sánchez García-Porrero leading the Spanish inquiry seeks Mr Firtash and the two as yet unidentified Ukrainian businessmen’s delivery to a courtroom in Spain.  The are suspected of leading a major money laundering racket in and via Spain (centered in Barcelona and Marbella).

(With the allegations specifically relating to money laundering presumably it is either the UCO within the Guard Civil and/or the UDEF doing investigative the leg-work rather than the broader Spanish organised crime institutions.)

Whether all the dirty money belongs to Mr Firtash, or whether some is from associates will perhaps become apparent as and when he is brought before a Spanish court.

With known associates ranging from Semyon Mogilevych the Russian “Don of Dons”, through the entire former Cabinet of Viktor Yanukovych’s ousted government, a debt and thus beholding to Russia’s Gazprombank of between $4 and $5 billion, and by extension a beholding to Yuri Kovalchuk (who is very close to President Putin) who personally arranged such loans, just whose dirty money Mr Firtash is suspected of laundering is unclear at this stage.

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There will be layer upon layer of shell companies, nominal directors, fictitious entities and front men to wade through to find and identify the eventual beneficiaries (ultimately based in the usual offshore havens undoubtedly).

Nevertheless, the Spanish have been diligently working upon the misuse of their territory and legislation for several years when it comes to Slavic organised naughtiness.  Clearly Judge Ignacio Sánchez García-Porrero believes all is now sufficiently clear to officially go after Dmitry Firtash (and the two other as yet unidentified Ukrainian businessmen).

Extradition to Spain, no differently than the possibly forthcoming extradition request to Germany, when received by Austria will be a far smoother, almost seamlessly slick affair compared to the request from the US – as all such matters within the EU Member States are.  That is the entire point of the EU Arrest Warrant and the EU Convention on Mutual Assistance in Criminal Matters.

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Therefore, whilst a reader may be caught up with the hype surrounding a possibly rising political party headed by Mikhail Saakashvili, the continued fall of the Firtash star may well become a very messy, public and revealing fall indeed.

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Once within Spanish jurisdiction, even if the Spanish case ultimately fails, by that time there will be the existing US request and a probable German case that the Spanish can extradite him to.

The outlook for Mr Firtash currently looks rather bleak – a lesson for Ukrainian kings and pawns alike.

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Holodomor remembrance – The path to a museum

November 26, 2016

Of the numerous, and seemingly never ending man made tragedies Ukraine has endured, and continues to endure, Holodomor undoubtedly ranks as among the worst and most inhuman.

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In 2007, the Holodomor memorial was supposed to be joined in somber company with a museum.  To the shame of every variation of government since, that museum has still to even see the foundation laid.

Having only last week rightly acknowledged the need to build a monument and museum to the events of 2014, indeed President Poroshenko stated he would become a sponsor thereof and take personal responsibility for its manifestation, the President has declared that the Holodomor Museum has to be built.

He is absolutely right a museum there undoubtedly should be – and one that when visited burns hot and deeply into the consciousness of any and all that visit it.

Exactly a year ago today, the blog humbly suggested a way of permanent, public and unmissable commemoration.  The full entry as follows – “The problem with history, certainly when it comes to numbers, is often visualising the horrific loss of human life certain events cause – particularly those events that are “man-made”.

Most people can visualise a dead person, perhaps several.  Some can, and have seen, dozens at a time, occasionally hundreds.  Very few may have witnessed thousands of dead bodies in one place, but beyond that?

Be it any large war, the Holocaust, or the Holodomor, visualising millions and millions of dead is simply beyond comprehension.  The monuments we erect to commemorate such hideous outcomes are often simple and understated, and deliberately so out of somberness, respect and humility – but are therefore mostly forgotten until specific State appointed days of remembrance fall upon the societal calendar.

For how can there be a a monument of suitable scale that is commensurate to the sacrifices, or sacrificed?  How also to bring about remembrance in a more continuous subconsciousness within today’s society outside of the allotted day or hour?

There are museums of course, and libraries and the Internet – all accessible to many, but generally they too fail to adequately impress the sheer number of deaths involved in a manner that makes it digestible and comprehensible with any sense of lasting mental impression.

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As these events travel further back in time with each and every passing hour, clearly justice becomes more and more symbolic – as perpetrators and survivors alike reach the natural ending of their days without their day in court.  Justice it seems, is that those who died and/or survived be not forgotten – at least for one day in the year.

It is of course possible to begin belated investigations and perhaps even reach judicial outcomes to cover the events of the past to some degree, and thus to provide some sense of finding of guilt.  If with regard to the Holodomor, Ukraine was to follow the lead of Germany in its ruling against Demjanjuk, a guard at Sobibor, who was found guilty not of any specific act himself, but being part of the “extermination machinery“, then it follows perhaps that there be room to find guilt of Joseph Stalin, the leadership of the Ukrainian Soviet Socialist Republic of the time etc. The question that arises is how far throughout that murderous and repressive apparatus does one go, and/or what parts of the institutions are targeted (apart from the obvious like the political leadership and the NKVD)?

Thus far, with regard to the Holodomor about 800,000 victims have been positively identified amongst figures that range from 3 to 7 million.  No doubt yet more will eventually be identified, and eventually there will be a far more accurate, although never precise, figure reached regarding the actual death toll.

If the names of these known Holodomor victims were individually placed on the average sized cobble stone that makes up Deribasovskaya, the main pedestrian street in central Odessa, it would more than re-cobble the entire street – which thus returns the reader back to the issue of visualising the horrendous and horrific loss of life.

Initially in Germany, and then latterly across Europe, there is something called the Stolpersteine.  It is a project where commemorative stones are laid outside the last known addresses of Jewish victims prior to their deportation (and in most cases extermination).  There are tens of thousands of such stones laid across Europe, outside tens of thousands of addresses throughout Europe.  They are a daily reminder to those now living at the address and/or walking along that street of the dark past it once witnessed – rather than a statue in a pleasantly manicured public space seldom visited.

Imagine, however, all those Stolpersteine laid together along a single public street.

If it is not the graphic images of WWI and WWII in museums or on TV that seem to leave the greatest impact, but when visiting, it is the sight of miles upon miles of headstones in cemeteries across Flanders, Artois and beyond that do, what societal impact would a major Ukrainian street cobbled/paved with individual names of those victims of the Holodomor have on an every day, rather than annual, basis?

Perhaps one day Ukraine will embark upon its own Stolpersteine project and place individual stones outside the addresses of all those known victims of the Holodomor as a daily reminder for those that walk there – or perhaps it will make a bold statement of remembrance where the name of each victim literally stretches from one end of the street to the other.  With 800,000 identified victims from millions, it will have to be a very long street, and rather than being a street with no name, it would be a street of a million names (and more).  Perhaps the boldest act is more appropriate for the victims who will never see justice?  A matter for the authorities (if they ever think of it).”

As a variation upon this Stolpersteine theme, perhaps the pathways within grounds of any new museum could be formed of a paving block with the name of each identified victim?  Or even perhaps the floor within the museum itself?

Something for the architects to consider?

It would be unique and provide a human sense of the scale of this crime for any that walk thereon or therein.

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Zombie political parties – Ukraine

November 25, 2016

Much prose has been devoted to the so labeled “zombie banks” in Ukraine – of which the National Bank has closed 84 so far.  No doubt there will be a few more before those remaining are deemed to meet all NBU standards regarding transparent ownership, capitalisation etc.

Despite the closure of 84 banks thus far, there remains well over 100 still operating.  A reader perhaps may ponder whether that remains far too many, however if those still operating meet the NBU criteria, why not?

Rarely is much prose dedicated to “zombie (political) parties” in Ukraine.

It is of course a welcome state of affairs when the nation has more than 2 national political parties and that electoral outcomes are not a foregone conclusion when elections take place.  That coalitions are usually the result to form a parliamentary majority is perhaps on balance a good outcome.  Even if it can make driving required policy through slightly more onerous, it also makes driving truly awful policy through just as difficult.

How many registered political parties are required to insure both democratic representation and also a functioning, manageable, pluralistic democratic system?

How many are too many?

Currently in Ukraine there are 349 political parties – which sounds, and is, a ludicrous number (and some with some ludicrous and/or amusing names).

Of those 349 political parties in existence, perhaps a dozen have recently been in, or are currently in, the Verkhovna Rada.

Many of the political parties are regional and not national – Sergei Kivalov’s Maritime Party in Odessa for example.  It has 6 Deputies in Odessa City Hall (to insure the interests of Mr Kivalov).  There will be dozens of similar political parties throughout the provinces all of which are active and which will never rise above their local and/or regional status.

Current Ukrainian legislation makes it very easy to open a political party.  (In fact it is now very easy to open a business, NGO, charity as well.)

Ukrainian legislation also requires that a political party files reports upon its property, income and liabilities quarterly (which is perhaps a little excessive).  During the first three quarter of 2016, Q1 saw 195 political parties comply.  Q2 witnessed 200 do so.  Q3 only 125.

The proscribed fine by statute for failure to do so is UAH 6,800 – if it is actually applied.  Repeated non-compliance legislatively does not provide for the cancellation/de-registration of a political party.

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Ergo, dozens, if not more than one hundred political parties exit – but only by way of paper registration.

There may be several reasons for that.

Firstly the legislative formalities for creating a political party may be easy (no differently from the ease of opening a business in Ukraine).  But try shutting one voluntarily (rather than by court order)!  No differently from voluntarily closing a business in Ukraine, it is a long, arduous and almost impossible task.

It may also be, as many are long-standing by way of registration if otherwise forever dormant, that a large number were created when it was not so easy to register a political party and thus they were created to “sell on” to those wanting to enter politics – a little like “off the shelf” limited liability companies with all the documents for immediate employment of the legal vehicle ready to go.

There is then also the issue of using such “zombie parties” to try and insure positions within district and regional electoral commissions – for nefarious purposes – both either to further local or national “interests”.

It would appear there is a case for a clear out of “zombie parties” no differently than there was a case for a clear out of “zombie banks” – but how to avoid the inevitable, and oft hollow, claims of political repression?

To avoid claims of “political persecution and/or repression” it is perhaps worth considering a format whereby after 18 months of failed reporting compliance and numerous formal notifications, a registered political party is suspended from all electoral processes.  After 24 months it is removed from the political register.

Reasonable?

And why not end with a Ukrainian version of “Zombie” – she is rather good!

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The NBU, the SBU, wiretapping and shenanigans all round

November 24, 2016

Wiretapped telephone conversations of a former Deputy Head of the NBU, now Director for Banking Supervision at the NBU Ekaterina Rozhkova have appeared on the Internet.

The internal workings of the National Bank of Ukraine, or any national bank, are far beyond the competencies of this blog.  It may be that what these telephone recordings prove is really rather standard fare within central banks other than that of the NBU – unfortunate if true.

Prima facie however, the wiretapped conversations would seem to display something bordering upon criminality in the collapsing of St Michael’s Bank and also in the support of Platinum Bank.

A cynical reader may perhaps ponder whether some bank owners simply orbit the wrong political planets when it comes to the “independent a-political” support of the NBU.  With the banks mentioned in the recordings clearly some bank owners are close to currently powerful figures, such as Granovsky, Lozhkin etc., – and some aren’t.

Cynicism redirected however, there is another side to the tale of these apparent NBU shenanigans and the wiretapping that disclosed them.

The only State agency permitted to conduct wiretapping is the SBU.

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SBU Chief Hrytsak however states that the SBU received no requests to carry out the wiretapping by any authority relating to Ms Rozhkova, and it would appear the wiretapping is also not the product of an on-going SBU investigation – for Mr Hrytsak claims the SBU does not even have the wiretap recordings (other than what can be gleaned from the Internet).

The recording however are clearly the result of good tradecraft.

If the SBU received no authority and sought none regarding these wiretaps that they claim not to even posses, then who carried them out?

If not officially the SBU, perhaps then unofficially the SBU?

If so who within the SBU, to what end, for whom, for what reward etc?

There are counterintelligence questions to be asked within the SBU if its officers are “for hire” – and if “for hire” for hire to whom considering the varying levels of external infiltration that will still exist within all State structures of Ukraine.

If it wasn’t the SBU, whether or not it was carried out by another foreign or domestic institution equally demands the SBU set about discovering who that was – and why.

Clearly NABU would be wise to use this incident to reassert its need for its own “in-house” wiretapping abilities – the case for not relying upon the SBU made clear by such a poor public (and quite possibly internal) display in the handling of these illicit wiretaps.

Meanwhile, as media and SBU encourage a reader to look at these events within the NBU, there is an equally disturbing story relating to the SBU and the wiretapping itself otherwise ignored.

Will anything come of any NBU nefariousness when evidence is based upon the foundation of an illegal wiretap?  A question to be answered later perhaps.

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