Ukrainians have two major grievances against the United Kingdom.
One is that the British, as a signatory to the 1994 Budapest Memorandum committing to Ukraine’s sovereignty and territorial integrity, should take a tougher stance against Russia’s theft of the Crimean peninsula and the Kremlin’s ongoing war in the eastern Donbas.
Another is that London, as the world’s financial capital, has looked the other way for too long as poor Ukraine’s rich oligarchs – Rinat Akhmetov, Dmytro Firtash and Victor Pinchuk among them – bought up some of the most expensive U.K. real estate available.
British Labor Party leader Jeremy Corbyn may have said it best on April 11 in the House of Commons: “The Panama-based law firm Mossack Fonseca registered more than 100,000 secret firms in the British Virgin Islands. It’s a scandal that the U.K. overseas territories registered over half the shell companies set up by Mossack Fonseca. The truth is that the U.K. is at the heart of the global tax avoidance industry. It’s a national scandal and it’s got to end.”
Not surprisingly, in a May 24 interview with the Kyiv Post, Her Majesty The Queen’s representative in Ukraine, U.K. Ambassador Judith Gough, said she believes such criticism of British foreign policy is unjustified.
To the contrary, she said that the U.K. has been a steadfast supporter of Ukraine and the February 2015 Minsk peace agreements that are designed to bring an end to Russia’s war, now in its third year, and which has cost of 10,000 lives.
“We have been quite clear that we will remain a close partner of Ukraine and we want to stand by her side,” Gough said. “We have put an awful lot into this country. What we want to see is a country that prospers and is safe and secure.”
Gough also countered criticism of London as a haven for ill-gotten assets by noting that British Prime Minister David Cameron is not only organizing a global crackdown on secretive tax shelters, but will also – along with the United States – hold a conference next year to find ways to help Ukraine and three other nations recover stolen assets abroad.
Budapest Memorandum
As for the Budapest Memorandum, in which the U.S., U.K. and Russia persuaded Ukraine to give up its Soviet-era nuclear weapons in exchange for security guarantees, Gough said: “It’s a memorandum. If it obliges anybody to anything, it obliges people to hold consultations… We stand by our commitments, such as they are.” But without Russia’s participation, she said that little can be done.
The U.K. supports the Minsk peace process “because it keeps Russia engaged” in diplomacy over a conflict that the Kremlin blames on Ukraine’s domestic disputes. But Gough said the U.K. understands that the conflict “wouldn’t exist had Russia not intervened in Ukraine.”
British Prime Minister David Cameron speaks during the final session at the Anti-Corruption Summit London 2016 on May 12. (AFP)
If Russia does its part under the Minsk agreements – cease-fire, withdrawal weapons, return border control to Ukraine and let international monitors work effectively – then Ukraine can uphold its end of the bargain – to hold local elections in the separatist-controlled areas of the Donbas, she said.
Property registry
As for combatting corruption, Gough said that only a global approach can help in an era of speedy electronic transfers of money. Cameron launched “a coalition of the committed” when he convened an international anti-corruption conference in London on May 12, attended by 40 countries.
“If you look at what the prime minister has said, he does not want London to become a haven for ill-gotten assets,” Gough said. “We understand this is a global problem and the solution will take a global approach.”
The biggest achievement of the May 12 conference is the decision to establish an online international public registry that would force all companies to declare their beneficial, or real, owners.
The U.K. will take it a step further by requiring buyers of real estate to declare their identities, rather than hide behind complex corporate structures.
Additionally, the U.K. is considering whether to change the law to shift the burden of proof on unexplained assets, so that the person in question has to prove the assets were legitimately acquired rather than a government being forced to prove they were illegally acquired.
The property registry, the success of which depends on how many countries participate, is “a good initiative and a good start to what we hope will expose corruption, allow countries to pursue and punish those who are guilty of corruption and finally to eradicate corruption,” Gough said.
Asset recovery
The U.S. and the U.K. are also organizing a conference next year in America to specifically help four nations – Ukraine, Nigeria, Tunisia and Sri Lanka – recover stolen assets abroad. Estimates of Ukraine’s wealth spirited abroad run into the tens of billions of dollars, but the nation has recovered next to nothing.
“It does require somebody to step forward with the evidence or some very good grounds or reasons for suspicion,” Gough said.
Here’s where a catch-22 situation arises.
Nations like the U.K. won’t freeze or seize assets in their jurisdiction without evidence that the money or property has been illegally obtained. In nations like Ukraine, where those running law enforcement agencies have a history of obstructing justice to protect high-level theft, the evidence will most likely not be forthcoming.
Zlochevsky case
A classic illustration of global asset recovery working poorly involves ex-Ukraine Ecology Minister Mykola Zlochevsky, owner of Burisma Holdings energy company.
Ukrainian Ambassador to the United Kingdom Natalia Galibarenko meets Britain’s Queen Elizabeth II during a private audience at Buckingham Palace in London on March 2. (AFP)
At Ukraine’s request, the U.K. froze $23 million that Zlochevsky had in U.K. bank accounts and other assets. But a U.K. court released its hold last year after ex-Prosecutor General Viktor Shokin said he had no evidence of financial fraud in a case started by his predecessor, Vitaly Yarema. Shokin and Yarema were both fired. Zlochevsky has denied any wrongdoing.
But the case led to a blistering attack on corruption in the General Prosecutor’s Office by U.S. Ambassador to Ukraine Geoffrey R. Pyatt, who said on Sept. 24 in Odesa that prosecutors who informed the U.K. court that there was no criminal case against Zlochevsky “should be investigated, and those responsible for subverting the case by authorizing those letters should – at a minimum – be summarily terminated.”
Better institutions
While refusing to discuss the Zlochevsky case, Gough acknowledged that Ukraine needs to build trustworthy institutions, which is part of the aim of the U.K’s 15 million pounds in bilateral assistance to Ukraine each year.
“That’s why we are spending time working in Ukraine and investing our resources to develop those institutions,” Gough said. “One of the biggest challenges, and there are many challenges, is corruption. It not only affects Ukraine’s reputation overseas, but it thwarts progress and hinders inward investment and also undermines confidence in Ukraine’s institutions.”
The U.K. also offers humanitarian assistance to displaced people from the war zone, military training to Ukraine’s armed forces and technical assistance in several ministries, as well as help to establish the National Anti-Corruption Bureau of Ukraine. Moreover, the U.K. works with the British Council in promoting the English language and also supports initiatives such as #NextGenUA to improve Ukraine’s image abroad. In those film clips, young people talk about the positive activities they are involved in.
‘Total mismanagement’
After nearly 25 years of “total mismanagement,” Gough said, Ukraine will need more time to overhaul its governance – “which basically caused inequality and robbed from the state for the few” – and to overhaul its institutions, particularly the discredited Prosecutor General’s Office, which needs “root and branch” changes.
But Gough, who arrived in September to replace Simon Smith, sees hope.
“This administration has actually achieved more than any previous government in the 23 years that went before it,” Gough said. “It needs to do a lot more. It’s a long-term commitment.”
Hope is why she is willing to give new Prosecutor General Yuriy Lutsenko the benefit of the doubt, even though critics believe he started out on the wrong foot by retaining Shokin’s subordinates and refusing to rehire the reform-minded ex-prosecutors, David Sakvarelidze and Vitaly Kasko, who were forced out by Shokin.
“We need to give him a chance. We need to support him and encourage him in the right direction,” Gough said of Lutsenko, the fourth prosecutor general since the EuroMaidan Revolution that drove President Viktor Yanukovych from power on Feb. 22, 2014.
Creating an effective and trusted General Prosecutor’s Office is “one of the key indicators by which this government will be judged,” Gough said. “We need to see greater progress.”
Equal rights
Part of Gough’s diplomacy includes support of equal rights for Ukraine’s lesbian, gay, bisexual and transgender community. Gough, 43, is openly lesbian and has two children with her partner Julia Kleiousi.
Ukraine’s progress towards acceptance of homosexuality has a long way to go, in comparison to the U.K. and many Western nations. Many equality marches have been marred by violence or threats of violence and people encounter discrimination because of their sexuality.
On May 14, the day that Ukrainian singer Jamala won the Eurovision contest in Sweden, Gough participated in a diversity conference in Kyiv that took place “amid huge security, some intimidation outside” and that was ultimately “dispersed by a bomb threat.”
Obviously, “the situation with LGBT rights in Ukraine remains difficult,” she said. “Whether the majority is hostile or just remains silent, I am not so sure. What I see is a small and vocal minority that is prepared to use violence and prepared to damage this country’s reputation by pursuing an aggressive agenda against some very brave activists who are merely asking for equality.”
Ukraine will have an excellent chance to improve its international image by hosting next year’s Eurovision song contest.
“European values are about diversity and tolerance and respect,” she said. “Eurovision has a massive gay following of people who will want to come to Ukraine and who will support a fantastic event. I hope they will be welcomed to Ukraine. That would the best demonstration that it is a European country, that it is a welcoming country and it is not an intolerant country.”
Happy with choice
Gough, who served the U.K. as its ambassador to Georgia and who has been with the Foreign & Commonwealth Office since 2001, said she’s happy that she chose the Kyiv assignment. Some of her personal priorities include improving her knowledge of the Ukrainian language and traveling around the country more.
“My priorities are quite big and bold,” Gough said in helping Ukraine transform into a “prosperous, stable and secure” nation.
“We have settled in very well. Kyiv is a great city to live in,” she said. “If you have young children, it’s a fantastically welcoming city.”
