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MP Yaroslav Zhelezniak: Developments in Ukraine’s parliament on economic reforms, international obligations — Issue 48

by Yaroslav Zhelezniak March 26, 2024 9:53 PM 5 min read
People's Deputies of Ukraine vote during session of the Verkhovna Rada on March 14, 2024 in Kyiv, Ukraine. (Andrii Nesterenko/Global Images Ukraine via Getty Images)
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Editor’s note: This is issue 48 of Ukrainian lawmaker Yaroslav Zhelezniak’s weekly “Ukrainian Economy in Brief” newsletter, covering events from March 18- 24, 2024. The digest highlights steps taken in the Ukrainian parliament related to business, economics, and international financial programs.

The Kyiv Independent is republishing with permission.

Benchmarks and obligations in the IMF Memorandum

Ukraine's parliament reinstated the post-clearance customs audit.

Last week the Verkhovna Rada, Ukraine's parliament, adopted in the second reading draft law #9456 with updates to the Customs Code of Ukraine. One of the approved amendments reinstates post-clearance customs audits. Ukraine stated the intention to adopt such a piece of legislation in the memorandum with the International Monetary Fund (IMF). This step has to complement the reinstatement of tax audits and close potential loopholes in managing compliance processes.

World Bank priorities

President Zelensky signed the draft law on financial markets, after a conflict of interest of the NSSMC’s head was removed.

On March 22, President Volodymyr Zelensky signed draft law #5865 on strengthening the independence and institutional capacity of the National Securities and Stock Market Commission (NSSMC). The draft law was waiting in the Presidential Office for almost four weeks despite the fact that the draft law #5865 was one of the conditionalities for Ukraine to receive $1.5 billion from the World Bank guaranteed by Japan.

We covered the reason for the delay in Issue 46. The Head of the NSSMC Ruslan Mahomedov signed a letter in which he asked to veto the draft law #5865 as it doesn’t include the provisions of increasing salaries and creates a conflict of interest for Mahomedov himself by banning a person to work in the NSSMC if they have a relative related to the professional market players.

Shmyhal: Ukraine receives $880 million from IMF
The disbursal was the third such tranche of the Extended Fund Facility (EFF), bringing the total distributed so far to $5.4 billion.

Draft law #5865 was unblocked last week as the Verkhovna Rada adopted draft law #9667-1 which isn’t related to the financial markets, but includes an amendment which removes the conflict of interest of the NSSMC’s head. The relevant amendments in other draft laws as well as the amendments on raising salaries for the NSSMC’s members haven’t passed.

Obligations to the EU

The Verkhovna Rada adopted the draft law regarding violations in lobbying.

On March 21, the Verkhovna Rada adopted in the second reading the draft law #10373 on administrative responsibility for violations under the lobbying law which was adopted earlier.

Other key economic issues

The Defense Committee is still working on amendments to the draft law on mobilization.

The Committee on National Security, Defense and Intelligence continues to work on the table of amendments to draft law #10449 on mobilization. Last week, the committee considered the amendments under the numbers from 1845 to 2104 out of 4269.

The Accounting Chamber will provide compliance audits.

The parliament adopted an amendment which gives the Accounting Chamber the power to conduct compliance audits in line with the International Standards of Supreme Audit Institutions.

According to Roksolana Pidlasa, chair of the Budget Committee and the author of the above-mentioned amendment, this year, the Accounting Chamber should check several state bodies to identify how their activity corresponds with their powers.

In particular, the Accounting Chamber should provide compliance audits regarding the asset management in the Agency for Investigation and Management of Assets, defense purchases of drones for military purposes by the State Service of Special Communications and Information Protection, the process of distribution of funds within the Fund for liquidation of the consequences of armed aggression.

Case against investment banker points to increasing pressure by state on business in Ukraine
Ukrainian investment banker and head of Kyiv-based Concorde Capital, Ihor Mazepa, was detained on Jan. 18 concerning a 2014 case against the businessman in which he allegedly illegally acquired land for a cookie-cutter housing development back in 2013. Mazepa was detained by the State Bureau of Inv…

In two months, the National Security and Defense Council's decision to protect business has still not worked.

On Jan. 23, following the scandalous arrest of Ihor Mazepa, the head of the Ukrainian investment company Concord Capital, and several other cases of pressure on business, the National Security and Defense Council approved a decision which was aimed to protect business and limit the law enforcement state bodies. Two months have passed but there are still no results.

The moratorium on investigative actions against businesses lasted 10 days instead of 3 months. Not a single case against the business was closed, even though an audit of the opened proceedings was promised. The law enforcement representatives responsible for pressure on business were never punished.

The Cabinet of Ministers approved the draft law on increasing fuel excise duty.

The Cabinet of Ministers has approved a draft law that will gradually increase fuel excise rates to the minimum level for the EU countries till the year 2028. For example, the excise on gasoline for cars will be increased from 213,5 euros per 1,000 liters to 359 euros per 1,000 liters. The draft law will be submitted to the parliament soon.  

Russia aims to knock out Ukraine’s power grid in new wave of attacks
Russia launched a fresh wave of missile and drone attacks against Ukraine between March 21-25, hitting the country’s critical infrastructure heavier than ever before. Some 190 missiles, 140 Shahed-type drones, and 700 aerial bombs pounded the country over the past week, President Volodymyr Zelensky…
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