{"id":55429,"date":"2023-07-31T14:23:05","date_gmt":"2023-07-31T12:23:05","guid":{"rendered":"https:\/\/libmod.de\/orepublik-moldau-eu-kandidatenstauts-und-stand-der-reformen-copy\/"},"modified":"2023-08-01T14:22:58","modified_gmt":"2023-08-01T12:22:58","slug":"the-state-of-de-oligarchization-and-anti-corruption-reforms-in-ukraine","status":"publish","type":"post","link":"https:\/\/libmod.de\/en\/the-state-of-de-oligarchization-and-anti-corruption-reforms-in-ukraine\/","title":{"rendered":"The State of De-Oligarchization and Anti-Corruption Reforms in Ukraine"},"content":{"rendered":"

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Foto: Imago<\/figcaption><\/figure>\n

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After the EU granted Ukraine candidate status in June 2022, the country is making progress in the areas of anti-corruption and deoli\u00adgarchization despite the war. In her policy brief, Tetiana Sevchuk analyzes the current state of reforms in Ukraine and what concrete steps are still needed in imple\u00admenting these EU prior\u00adities so that accession negoti\u00ada\u00adtions can begin.<\/h2>\n

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[\/vc_column_text][vc_tta_accordion active_section=\u201c999\u201d collapsible_all=\u201ctrue\u201d][vc_tta_section title=\u201cRead further\u201d tab_id=\u201c1690806714890\u201338fb395c-844a\u201d][vc_column_text]<\/p>\n

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Russia\u2019s 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 infra\u00adstructure, Ukrainians remain dedicated to the path of Euroin\u00adte\u00adgration and conse- quent democ\u00adratic trans\u00adfor\u00admation of the country. Since the Revolution of Dignity in 2014, Ukraine has made meaningful progress in its fight against corruption and towards greater trans\u00adparency. The achie- vements in those eight years have signifi- cantly improved the government\u2019s ability to prosecute corruption. Now, the prospect of EU membership presents an oppor\u00adtunity to sustain, reinforce, and strengthen Ukraine\u2019s democ\u00adratic infra\u00adstructure, as it has \u2013 thanks to Ukrainians\u2019 unflagging commitment to joining the EU \u2013 provided new impetus for democ\u00adra\u00adti\u00adzation and further consol\u00adi\u00addation of the rule of law.<\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n

On the basis of an opinion on Ukraine\u2019s appli\u00adcation for membership in the European Union issued by the European Commission (\u201cEC\u201d),[1]<\/a> the European Council decided to grant the status of candidate country to Ukraine[2]<\/a> in June 2022. This was on the under\u00adstanding that Ukraine would fulfil two condi\u00adtions, which are clearly linked to anti-oligarch and anti-corruption policies:<\/p>\n

1) \u201cimplement 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 forth\u00adcoming opinion of the Venice Commission on the relevant legis\u00adlation\u201d, and<\/p>\n

2) \u201cfurther strengthen the fight against corruption, in particular at high level, through proactive and efficient inves\u00adti\u00adga\u00adtions, and a credible track record of prose\u00adcu\u00adtions and convic\u00adtions; complete the appointment of a new head of the Specialised Anti-Corruption Prosecutor\u2019s Office through certi\u00adfying the identified winner of the compe\u00adtition and launch and complete the selection process and appointment for a new Director of the National Anti-Corruption Bureau of Ukraine.\u201d<\/p>\n

Imple\u00admen\u00adtation of the \u201canti-oligarch law\u201d <\/strong><\/h3>\n

The Parliament of Ukraine adopted the statute called the \u201cLaw on prevention of threats to national security associated with excessive influence of persons who have signif\u00adicant economic and political weight in public life (oligarchs)\u201d, now known as the \u201canti-oligarch law\u201d, on 23 September 2021. Essen\u00adtially, this statute grants the National Security and Defence Council, which is headed by the President, the authority to determine which natural persons meet the defin\u00adition of an oligarch and to examine all contact that any public official has with such persons or repre\u00adsen\u00adta\u00adtives thereof (this kind of contact is subject to mandatory reporting by public officials).<\/p>\n

The Venice Commission was very critical of the law in its opinion on it,[3]<\/a> concluding that the law could not be seen as a proper democ\u00adratic response to the problem of oligarchy. The Commission recom\u00admended that the Ukrainian government take action to \u201clegally deter the imple\u00admen\u00adtation of the law\u201d; in practical terms, this would mean either suspending the law or postponing its imple\u00admen\u00adtation until the situation in the country had stabi\u00adlized. The Commission recom\u00admended a shift of focus to the adoption and imple\u00admen\u00adtation of the struc\u00adtural insti\u00adtu\u00adtional reforms, first and foremost in the sphere of anti-corruption and anti-trust.<\/p>\n

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 signif\u00adi\u00adcantly since then.<\/p>\n

Nonetheless, in the absence of adequate oversight and suffi\u00adciently capable insti\u00adtu\u00adtions, a future influx of billions of euros in inter\u00adna\u00adtional aid and invest\u00adments could create an environment conducive to the capture of wealth and democ\u00adratic insti\u00adtu\u00adtions on the part of aspiring and returning oligarchs or other malign economic actors, which would signif\u00adi\u00adcantly undermine the European future of Ukraine.<\/p>\n

Therefore, the fight against oligarchy should not rely on a a non-systematic approach, based on individual decisions by a commission,  that involves \u201cnaming and shaming\u201d persons whom the executive government has deter\u00admined to meet the defin\u00adition of an oligarch, but should instead be advanced through a compre\u00adhensive trans\u00adfor\u00admation of democ\u00adratic insti\u00adtu\u00adtions, geared towards severely reducing the vested interests This trans\u00adfor\u00admation should include law enforcement, judicial, political party financing, media, and anti-monopoly reforms.<\/p>\n

Strength\u00adening the fight against corruption<\/h3>\n

The compet\u00aditive selection procedure for the appointment of a new head of the Specialized Anti-corruption Prosecutor\u2019s Office (\u201cSAPO\u201d) had not yet been complete when the EC issued its opinion on Ukraine\u2019s membership appli\u00adcation, 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 prose\u00adcutor general \u2013 and the head of the SAPO. Since then, Klymenko has recon\u00adfirmed his indepen\u00addence and estab\u00adlished a good track record of inves\u00adti\u00adga\u00adtions, signalling an end to the collective sense of impunity within the Ukrainian establishment.<\/p>\n

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 condi\u00adtioned the partic\u00adi\u00adpation 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 under\u00admined the entire selection process.[4]<\/a> 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 compet\u00aditive 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 candi\u00addates; however, it should be noted that the compe\u00adtition itself was held in a fair and a trans\u00adparent manner. In accor\u00addance with its legal mandate, the selection commission produced a short-list of three candi\u00addates: Semen Kryvonos, Serhii Gupiak, Roman Osypchuk. The selection commission did not provide a clear and grounded opinion as to why these three candi\u00addates were best suited to the direc\u00adtorship of NABU, nor did it outline the qualities and compe\u00adtences 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 compet\u00aditive selection procedure, so one might conclude that this part of recom\u00admen\u00addation has also been formally implemented.<\/p>\n

The wording of the other part of the EC anti-corruption recom\u00admen\u00addation, to \u201cfurther strengthen the fight against corruption, in particular at high level, through proactive and efficient inves\u00adti\u00adga\u00adtions, and a credible track record of prose\u00adcu\u00adtions and convic\u00adtions\u201d<\/em> is quite vague. This permits a certain flexi\u00adbility in under\u00adstanding the scope of measures being called for, as well as with respect to how the imple\u00admen\u00adtation of the recom\u00admen\u00addation should be assessed. It is believed that compliance with this part of recom\u00admen\u00addation should be evaluated along two dimensions:<\/p>\n

(1) whether the statistics on criminal proceedings on corruption and corruption-related offences (and specif\u00adi\u00adcally concerning high-level corruption) show positive trends;<\/p>\n

(2) whether Ukrainian author\u00adities have under\u00adtaken the legislative and practical measures necessary to ensure that the fight against corruption is strengthened through proactive and efficient inves\u00adti\u00adga\u00adtions and establish a credible track record of prose\u00adcu\u00adtions and convictions.<\/p>\n

Other than refraining from inter\u00adfering in the inves\u00adtigative process, there is little that  Ukraine\u2019s political leadership can do to proac\u00adtively improve the results on this first point, as the statistics in question are deter\u00admined by the day-to-day work of independent law enforcement and judicial insti\u00adtu\u00adtions. Ukrainian author\u00adities should introduce a credible and reliable system for the collection of data on criminal proceedings and adjudi\u00adcation of criminal cases on corruption and corruption-related offences to ensure the avail\u00adability of accurate statistics with which to assess progress along this dimension.<\/p>\n

As to second dimension \u2013 concrete legislative and practical measures aimed at strength\u00adening the fight against corruption through inves\u00adti\u00adga\u00adtions and estab\u00adlishing a credible track record \u2013 a number of the measures necessary in this regard have yet to be imple\u00admented. Imple\u00admenting these will require signif\u00adicant political will.<\/p>\n

One of the most relevant and urgent steps needed is the restoration of the oblig\u00adation to submit asset decla\u00adra\u00adtions.<\/em> These decla\u00adra\u00adtions serve as a key source of infor\u00admation for use in detecting of illicit enrichment and unexplained assets, e\u2011declarations being partic\u00adu\u00adlarly useful for financial inves\u00adti\u00adga\u00adtions. Relevant legis\u00adlation, draft law no. 8071, is still pending in Parliament; it was not adopted at the end of the first reading.[5]<\/a>Several provi\u00adsions 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 \u201cenact the law to restore asset decla\u00adration of public officials not directly involved in the mobilization and war efforts and [\u2026 reinstate] the NACP\u2019s function to examine and verify them\u201d by end July 2023. [6]<\/a><\/p>\n

Another priority is strength\u00adening the capacity of Specialized Anti-corruption Prosecutor\u2019s Office (\u201cSAPO\u201d).<\/em>This will require several changes, including action to: (1) improve the selection procedure for the SAPO leadership to ensure its depoliti\u00adcization and trans\u00adparency, as well as the merit-based selection of candi\u00addates; (2) strengthen the opera\u00adtional, proce\u00addural and organ\u00adi\u00adsa\u00adtional autonomy of the SAPO, in particular, by trans\u00adforming the SAPO into a separate prose\u00adcu\u00adtorial body within the public prose\u00adcution system of Ukraine, including the creation of a separate legal entity similar to regional prosecutor\u2019s offices; establish the auxiliary depart\u00adments necessary for this within the SAPO structure, with autonomous selection of employees; establish guarantees against arbitrary dismissals of SAPO leadership and prose\u00adcutors and against the exertion of pressure on them and other improper inter\u00adference in their activ\u00adities; Introduce a regulation that provides SAPO with the right to determine the remuner\u00adation scale for prose\u00adcutors; (3) introduce a procedure for the external independent assessment (audit) of the SAPO\u2019s effec\u00adtiveness. Draft Law No. 8402 in combi\u00adnation with the additional Draft Laws No. 8403 and 8404, which would introduce amend\u00adments 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 Parlia\u00admentary Committee on Law Enforcement has recom\u00admended that the core piece of legis\u00adlation 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 \u201cLegis\u00adlation will be adopted to enhance the insti\u00adtu\u00adtional autonomy of the SAPO, specif\u00adi\u00adcally, on the selection proce\u00addures, capacity to regulate organi\u00adza\u00adtional activ\u00adities, and mecha\u00adnisms for disci\u00adpline and account\u00adability\u201d.[7]<\/a><\/p>\n

To sum up, although some progress has been made on imple\u00admenting this part of the anti-corruption recom\u00admen\u00addation through the work of SAPO and NABU, Ukraine\u2019s imple\u00admen\u00adtation of anti-corruption reforms cannot be said to have been completed. The restoration of asset decla\u00adra\u00adtions for public officials and strength\u00adening SAPO appear to be the most important measures, and imple\u00admen\u00adtation of these by the autumn of 2023 appears feasible. However, there is no exhaustive list of the changes necessary to strengthen prose\u00adcution for corruption. Other necessary legislative and practical measures should be defined in the run up to negoti\u00ada\u00adtions on Chapter 23. <\/em><\/p>\n

[1]<\/a> https:\/\/bit.ly\/3bpxfeA<\/a><\/p>\n

[2]<\/a> https:\/\/bit.ly\/3OB1E7R<\/a><\/p>\n

[3]<\/a> https:\/\/www.venice.coe.int\/webforms\/documents\/?pdf=CDL-AD(2023)018\u2011e<\/a><\/p>\n

[4]<\/a> https:\/\/antac.org.ua\/en\/news\/government-disrupts-nabu-director-competition\/<\/a>.<\/p>\n

[5]<\/a> https:\/\/itd.rada.gov.ua\/billInfo\/Bills\/Card\/40543<\/a>.<\/p>\n

[6]<\/a> 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<\/a>.<\/p>\n

[7]<\/a> Ibid, para. 56.<\/p>\n

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Tetiana<\/span> Shevchuk is working at the <\/span> <\/span>Anti-corruption Action Centre, <\/span>Ukraine<\/span><\/em>[\/vc_column_text][\/vc_tta_section][\/vc_tta_accordion]<\/p>

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