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