Der Stand der De-Oligar­chi­sierung und der Antikor­rup­ti­ons­re­formen in der Ukraine

Russia’s full-scale war of aggression in Ukraine passed the one-year mark a few months ago. In the face of massive losses of human lives and damage done to critical infra­structure, Ukrai­nians remain dedicated to the path of Euroin­te­gration and conse- quent democratic trans­for­mation of the country. Since the Revolution of Dignity in 2014, Ukraine has made meaningful progress in its fight against corruption and towards greater trans­pa­rency. The achie- vements in those eight years have signifi- cantly improved the government’s ability to prosecute corruption. Now, the prospect of EU membership presents an oppor­tunity to sustain, reinforce, and strengthen Ukraine’s democratic infra­structure, as it has – thanks to Ukrai­nians’ unflagging commitment to joining the EU – provided new impetus for democra­tization and further conso­li­dation of the rule of law.

On the basis of an opinion on Ukraine’s appli­cation for membership in the European Union issued by the European Commission (“EC”),[1] the European Council decided to grant the status of candidate country to Ukraine[2] in June 2022. This was on the under­standing that Ukraine would fulfil two condi­tions, which are clearly linked to anti-oligarch and anti-corruption policies:

1) “implement the Anti-Oligarch law to limit the excessive influence of oligarchs in economic, political, and public life; this should be done in a legally sound manner, taking into account the forth­coming opinion of the Venice Commission on the relevant legis­lation”, and

2) “further strengthen the fight against corruption, in parti­cular at high level, through proactive and efficient inves­ti­ga­tions, and a credible track record of prose­cu­tions and convic­tions; complete the appointment of a new head of the Specia­lised Anti-Corruption Prosecutor’s Office through certi­fying the identified winner of the compe­tition and launch and complete the selection process and appointment for a new Director of the National Anti-Corruption Bureau of Ukraine.”

Imple­men­tation of the “anti-oligarch law” 

The Parliament of Ukraine adopted the statute called the “Law on prevention of threats to national security associated with excessive influence of persons who have signi­ficant economic and political weight in public life (oligarchs)”, now known as the “anti-oligarch law”, on 23 September 2021. Essen­tially, this statute grants the National Security and Defence Council, which is headed by the President, the authority to determine which natural persons meet the definition of an oligarch and to examine all contact that any public official has with such persons or repre­sen­ta­tives thereof (this kind of contact is subject to mandatory reporting by public officials).

The Venice Commission was very critical of the law in its opinion on it,[3] concluding that the law could not be seen as a proper democratic response to the problem of oligarchy. The Commission recom­mended that the Ukrainian government take action to “legally deter the imple­men­tation of the law”; in practical terms, this would mean either suspending the law or postponing its imple­men­tation until the situation in the country had stabi­lized. The Commission recom­mended a shift of focus to the adoption and imple­men­tation of the struc­tural insti­tu­tional reforms, first and foremost in the sphere of anti-corruption and anti-trust.

The anti-oligarch law was adopted as a political or even rather populist tool in the completely different reality that was pre-war Ukraine. The political, media, and econo­mical landscapes of Ukraine changed enorm­ously after the launch of the full-scale invasion. The role and influence of oligarchs has decreased signi­fi­cantly since then.

Nonetheless, in the absence of adequate oversight and suffi­ci­ently capable insti­tu­tions, a future influx of billions of euros in inter­na­tional aid and invest­ments could create an environment conducive to the capture of wealth and democratic insti­tu­tions on the part of aspiring and returning oligarchs or other malign economic actors, which would signi­fi­cantly undermine the European future of Ukraine.

Therefore, the fight against oligarchy should not rely on a a non-syste­matic approach, based on individual decisions by a commission,  that involves “naming and shaming” persons whom the executive government has deter­mined to meet the definition of an oligarch, but should instead be advanced through a compre­hensive trans­for­mation of democratic insti­tu­tions, geared towards severely reducing the vested interests This trans­for­mation should include law enforcement, judicial, political party financing, media, and anti-monopoly reforms.

Streng­thening the fight against corruption

The compe­titive selection procedure for the appointment of a new head of the Specia­lized Anti-corruption Prosecutor’s Office (“SAPO”) had not yet been complete when the EC issued its opinion on Ukraine’s membership appli­cation, although it had reached the final stage, in which the winner would be announced and formally appointed . On 19 July 2022, the selection commission confirmed and announced the name of the successful candidate, Oleksandr Klymenko. Ten days later, Klymenko was appointed as a deputy prose­cutor general – and the head of the SAPO. Since then, Klymenko has recon­firmed his indepen­dence and estab­lished a good track record of inves­ti­ga­tions, signalling an end to the collective sense of impunity within the Ukrainian establishment.

When the EC opinion was released, the term in office of the first director of the National Anti-corruption Bureau of Ukraine (NABU) had already expired, but the procedure to select a new director had not yet begun. The delay was due to the fact that, in February 2022, when  the Cabinet of Ministers approved the selection commission, it had condi­tioned the parti­ci­pation of one of the members on his withdrawal from selection commission on SAPO that he was serving on. There was no legal basis for setting such a condition, and by doing so, the Cabinet of Ministers may have under­mined the entire selection process.[4] Ultim­ately, the Cabinet amended its initial decree and withdrew this illegal condition, but not until 29 July 2022. The selection commission held its first meeting on 22 August 2022, and the compe­titive selection procedure was officially announced on 16 November 2022. There were a number of problems associated with the process that ultim­ately had an impact on the selection of the candi­dates; however, it should be noted that the compe­tition itself was held in a fair and a trans­parent manner. In accordance with its legal mandate, the selection commission produced a short-list of three candi­dates: Semen Kryvonos, Serhii Gupiak, Roman Osypchuk. The selection commission did not provide a clear and grounded opinion as to why these three candi­dates were best suited to the direc­torship of NABU, nor did it outline the qualities and compe­tences it viewed as relevant for this post. On 6 March 2023, the Cabinet of Ministers appointed Semen Kryvonos to the post for the next 7 years. The prime minister and the Government did not set out the reasons for their choice either. Still, a new director of NABU was appointed in a compe­titive selection procedure, so one might conclude that this part of recom­men­dation has also been formally implemented.

The wording of the other part of the EC anti-corruption recom­men­dation, to “further strengthen the fight against corruption, in parti­cular at high level, through proactive and efficient inves­ti­ga­tions, and a credible track record of prose­cu­tions and convic­tions” is quite vague. This permits a certain flexi­bility in under­standing the scope of measures being called for, as well as with respect to how the imple­men­tation of the recom­men­dation should be assessed. It is believed that compliance with this part of recom­men­dation should be evaluated along two dimensions:

(1) whether the statistics on criminal procee­dings on corruption and corruption-related offences (and speci­fi­cally concerning high-level corruption) show positive trends;

(2) whether Ukrainian autho­rities have under­taken the legis­lative and practical measures necessary to ensure that the fight against corruption is streng­thened through proactive and efficient inves­ti­ga­tions and establish a credible track record of prose­cu­tions and convictions.

Other than refraining from inter­fering in the inves­ti­gative process, there is little that  Ukraine’s political leadership can do to proac­tively improve the results on this first point, as the statistics in question are deter­mined by the day-to-day work of independent law enforcement and judicial insti­tu­tions. Ukrainian autho­rities should introduce a credible and reliable system for the collection of data on criminal procee­dings and adjudi­cation of criminal cases on corruption and corruption-related offences to ensure the availa­bility of accurate statistics with which to assess progress along this dimension.

As to second dimension – concrete legis­lative and practical measures aimed at streng­thening the fight against corruption through inves­ti­ga­tions and estab­li­shing a credible track record – a number of the measures necessary in this regard have yet to be imple­mented. Imple­menting these will require signi­ficant political will.

One of the most relevant and urgent steps needed is the resto­ration of the obligation to submit asset decla­ra­tions. These decla­ra­tions serve as a key source of infor­mation for use in detecting of illicit enrichment and unexplained assets, e‑declarations being parti­cu­larly useful for financial inves­ti­ga­tions. Relevant legis­lation, draft law no. 8071, is still pending in Parliament; it was not adopted at the end of the first reading.[5]Several provi­sions of the draft would need to be revised in order for it to be adopted after the second reading. It is worth noting that Ukraine recently committed to action on this point within the framework of a new IMF program, pledging to “enact the law to restore asset decla­ration of public officials not directly involved in the mobilization and war efforts and [… reinstate] the NACP’s function to examine and verify them” by end July 2023. [6]

Another priority is streng­thening the capacity of Specia­lized Anti-corruption Prosecutor’s Office (“SAPO”).This will require several changes, including action to: (1) improve the selection procedure for the SAPO leadership to ensure its depoli­ti­cization and trans­pa­rency, as well as the merit-based selection of candi­dates; (2) strengthen the opera­tional, proce­dural and organi­sa­tional autonomy of the SAPO, in parti­cular, by trans­forming the SAPO into a separate prose­cu­torial body within the public prose­cution system of Ukraine, including the creation of a separate legal entity similar to regional prosecutor’s offices; establish the auxiliary depart­ments necessary for this within the SAPO structure, with autonomous selection of employees; establish guarantees against arbitrary dismissals of SAPO leadership and prose­cutors and against the exertion of pressure on them and other improper inter­fe­rence in their activities; Introduce a regulation that provides SAPO with the right to determine the remune­ration scale for prose­cutors; (3) introduce a procedure for the external independent assessment (audit) of the SAPO’s effec­ti­veness. Draft Law No. 8402 in combi­nation with the additional Draft Laws No. 8403 and 8404, which would introduce amend­ments to other laws that would be necessary to bring them in line with No. 8402, could be a good starting point for discussion, i.e. they could serve as a basis for further work. However, the Parlia­mentary Committee on Law Enforcement has recom­mended that the core piece of legis­lation involved, Draft Law no. 8402, be rejected. Parliament could overrule this decision. Here, again, it is worth noting that Ukraine recently committed to action in this area within the framework of new IMF program, pledging that “Legis­lation will be adopted to enhance the insti­tu­tional autonomy of the SAPO, speci­fi­cally, on the selection proce­dures, capacity to regulate organiza­tional activities, and mecha­nisms for disci­pline and accoun­ta­bility”.[7]

To sum up, although some progress has been made on imple­menting this part of the anti-corruption recom­men­dation through the work of SAPO and NABU, Ukraine’s imple­men­tation of anti-corruption reforms cannot be said to have been completed. The resto­ration of asset decla­ra­tions for public officials and streng­thening SAPO appear to be the most important measures, and imple­men­tation of these by the autumn of 2023 appears feasible. However, there is no exhaustive list of the changes necessary to strengthen prose­cution for corruption. Other necessary legis­lative and practical measures should be defined in the run up to negotia­tions on Chapter 23. 

[1] https://bit.ly/3bpxfeA

[2] https://bit.ly/3OB1E7R

[3] https://www.venice.coe.int/webforms/documents/?pdf=CDL-AD(2023)018‑e

[4] https://antac.org.ua/en/news/government-disrupts-nabu-director-competition/.

[5] https://itd.rada.gov.ua/billInfo/Bills/Card/40543.

[6] Memorandum of Economic and Financial Policies, March, 2023, p. 130: https://www.imf.org/en/Publications/CR/Issues/2023/03/31/Ukraine-Request-for-an-Extended-Arrangement-Under-the-Extended-Fund-Facility-and-Review-of-531687.

[7] Ibid, para. 56.

Tetiana Shevchuk is working at the Anti-corruption Action Centre, Ukraine