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MP Yaroslav Zhelezniak: Ukraine’s parliament & economy, Issue No. 44

by Yaroslav Zhelezniak February 27, 2024 8:33 PM 7 min read
The Verkhovna Rada (Ukraine's parliament) building in Kyiv. (Prisma/Universal Images Group via Getty Images)
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Editor’s note: This is issue 44 of Ukrainian lawmaker Yaroslav Zhelezniak’s weekly “Ukrainian Economy in Brief” newsletter, covering events from Feb. 19-25, 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.

IMF benchmarks in focus

Despite pressure from the Presidential Office the Verkhovna Rada rejected the Cabinet of Minister's draft law on restarting the Bureau of Economic Security (BES).

On Feb. 23, the Verkhovna Rada of Ukraine rejected the Cabinet of Ministers’ draft law #10439 on the fake restart of the BES. Despite huge pressure from the Office of the President and persuasion from the Justice and Economy ministries, the law only got 222 out of the 226 votes needed for it to pass.

We appreciate all the efforts which helped to block the draft law #10439 that isn’t supported and was vastly criticized by key business associations, expert NGOs, and moreover doesn’t meet Ukraine’s obligations within agreements with the IMF, the EU, G7 and other international partners.

Unfortunately, the alternative draft laws, including #10439-2, which we developed with all stakeholders, were also automatically rejected.

Ukrainian government to create business support council amid claims of law enforcement pressure
The move follows the recent detention of influential investment banker Ihor Mazepa, perceived by some as an escalation of law enforcement pressure on businesses. Mazepa is suspected of illegally seizing land in Kyiv Oblast in 2020-2021, which he has denied.

Below you can find our next steps and procedure regarding further consideration of the draft law on the ESBU restart:

1. Our Committee on Finance, Tax and Customs Policy must prepare a draft law for a repeated first reading within 15 days – by March 11. Everyone can submit their comments and proposals.

2. At the same time, all previous alternative projects (including #10439-2) are already rejected and cannot be considered. That’s why tomorrow we will submit the text of #10439-2 as an alternative draft law for a repeated first reading.

3. The Committee agrees on the text of the draft law and votes for it at its meeting. This text agreed by the Committee then will be submitted to the VRU and will be reconsidered during the plenary meeting along with the new alternatives.

In the next ten days the committee expects to receive the Cabinet of Minister's suggestions on what to change in their initial text.

Tomorrow our team will submit all crucial suggestions to the Committee’s version as well as our alternative draft law which will be the same as our previous draft law #10439-2.

We expect further pressure from the Office of the President and the Cabinet of Ministers in attempting to adopt the draft law as it was designed in line with the Office of the President Deputy Head Oleh Tatarov.

MPs who rejected to vote for the CMU’s draft law #10439, both from coalition and opposition, have already received warning from the the Office of the President and some leaders of the presidential faction that they won’t receive approval for their foreign official journeys.

Regarding these, we’ll highly appreciate your close attention and support in the process of the draft law’s further consideration.

World Bank priorities

The Parliament adopted three draft laws from the World Bank Development Policy Loan (DPL)

On Feb. 22, the Verkhovna Rada of Ukraine finally adopted three draft laws from the World Bank DPL.

The Parliament fully adopted the draft law (DL) #5865 on financial markets and strengthening the independence and institutional capacity of the National Securities and Stock Market Commission (NSSMC) in accordance with the IOSCO Principles. The adopted text includes provisions on the competitive selection of the NSSMC’s members which the Office of the President tried to block all previous months.

The Verkhovna Rada also adopted the DL #5593-d on SOE corporate governance reform and the draft law #9266 electronic crop receipts as a new financial instrument for farmers.

Obligations to the EU

The Verkhovna Rada adopted the governmental draft law on ethical lobbying.

On Feb. 23, the Parliament adopted the draft law #10337 on ethical lobbying submitted by the Cabinet of Ministers. It’s one of Ukraine’s obligations within the EU integration process. The law will come into effect only two months after the National Agency on Corruption Prevention (NACP) launches a public register, but no later than Jan. 1, 2025.

Moreover, the Verkhovna Rada adopted in the first reading the draft law #10373 on administrative responsibility for violations under the lobbying law.

The election commission chose the winner of the competition for the NACP Head.

On Feb. 25, the election commission announced the winner for the position of the Head of the National Agency on Corruption Prevention.

Who is Viktor Pavlushchyk, newly-elected head of key Ukrainian anti-corruption agency?
Viktor Pavlushchyk was chosen on Feb. 25 as the head of the National Agency for Corruption Prevention (NACP) - one of Ukraine’s main corruption fighting bodies. The Cabinet of Ministers has yet to formally appoint him as the head of the NACP. Pavlushchyk is a detective at the National Anti-Corrupt…

Viktor Pavluschyk, head of the NABU detective unit, was chosen as the winner by all six members of the election commission, both international and the government representatives.

On the next step the Cabinet of Ministers has to approve Mr. Pavluschyk as the head of the NACP.

It’s noteworthy for further design of election procedures in other state bodies (for example, the Bureau of Economic Security, etc.) that the candidate from the State Bureau of Investigation received votes only from all three members of the election commission delegated by the Cabinet of Ministers.

Other key economic issues

The NACP alleged Deputy Head of the Presidential Office Rostyslav Shurma in violations regarding conflict of interests.

The National Agency on Corruption Prevention (NACP) drew up a protocol on administrative offenses against Rostyslav Shurma, deputy head of the Office of the President of Ukraine (OPU), regarding his violation of the requirements for the conflict of interest prevention. The NACP began the investigation as a response for the claim submitted by lawmaker Yaroslav Zhelezniak after the relevant journalist investigation made by Bihus.Info.

Recent campaigns against journalists raise concerns about press freedom in Ukraine
Investigative journalists in Ukraine came under two attacks in just the past week, one involving a threatening home visit and another using covert surveillance. The two incidents are the latest in a series of discrediting campaigns against independent Ukrainian media, often supported by anonymous p…

According to the NACP’s official statement, in 2022 Rostyslav Shurma organized and led the Electric Power Committee at the Office of the President. Key institutions related to the energy sector participated in the meetings of the Committee. Among those were the Energy Ministry, the National Commission for State Regulation of Energy and Public Utilities, NPC Ukrenergo and state-owned enterprises Market Operator and Guaranteed Buyer.

The NACP claims that the Committee made decisions in favor of the electricity business owned by Rostyslav Shurma’s brother. The following decisions of the state bodies and companies, members of the above-mentioned Committee, created favorable market conditions for the success of Oleg Shurma’s business.

Lawmakers submitted more than 4,000 amendments to the Cabinet of Ministers draft law on mobilization.

According to the Committee on National Security, Defense and Intelligence, lawmakers submitted 4,195 amendments to the second reading of the draft law #10449 on mobilization.

The Committee is going to start considering the amendments on Feb. 27. In the best-case scenario, the parliament can start to consider the draft law in the second reading on March 6. Regarding the number of amendments, it can take several days (most likely two).

Concorde Capital, the biggest Ukrainian investment company, reports the pressure from law enforcement.

According to Forbes Ukraine, the investment company Concorde Capital reports that the investigative team of the State Security Bureau and the Prosecutor General's Office blocks the activities of several Concorde Capital enterprises that are not related to the case of investigation.

Let us remind, that on Jan. 18 Ihor Mazepa, head of Concorde Capital, was detained concerning a 2014 case in which he allegedly illegally acquired land in 2013.

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 response, the biggest Ukrainian business association pointed out the increasing pressure on business from the state using law enforcement offices and accused the State Bureau of Investigation of illegal actions regarding the fact that according to the law it should investigate wrongdoings by public officials only.

In response, on Jan. 23 the National Security and Defense Council of Ukraine signed a decision on business protection.

However, according to our analysis and observations nothing was done from NSDC’s promises. The moratorium on investigative actions against businesses lasted for 10 days instead of promised three months and any of the cases were closed despite the promised review and audit of legal grounds for opened ones.

Moreover, the Office of the President and the Cabinet of Ministers are trying to adopt the draft laws on the restart of the Bureau of Economic Security and amendments to the Criminal Procedure Code which are highly criticized and opposed by business associations.

Synevo medical laboratory chain says State Bureau of Investigation seized its main Ukrainian office
The Synevo chain of medical laboratories reported on Feb. 27 that Ukraine’s State Bureau of Investigation seized the building of the company’s main office and central laboratory in Kyiv, calling the seizure “groundless and illegal.”
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