The anti-corruption laws passed by parliament on Oct. 14 are being hailed as landmark legislation for at least six main reasons:
· Corruption is defined in the
criminal code in a way that could lead to a criminal conviction if evidence
shows a person’s expenses or standard of living is significantly higher than explainable legal
income;
· Criminal suspects can now be tried
in absentia, which is necessary to recover stolen
assets of former officials who fled the country;
· Banks must notify regulatory
authorities if politically exposed
persons –those entrusted with a prominent public function and their
relatives — are bringing in money or moving it around;
· The end – or real beneficiary –
owners of Ukrainian companies must be disclosed and publicized in an online registry;
· A public registry of valuable,
immovable property will be created; and, to see that all of this gets done;
· An anti-corruption bureau is
created.
Together, the package is hoped to give law enforcers the tools they need
to attack the deeply embedded corruption that President Petro Poroshenko says
poses a grave threat to Ukrainian statehood.
What could possibly go wrong?
In Ukraine, if history is any guide, plenty. Four presidents have come
and gone, each cynically promising to combat corruption with no progress to
show as people around them or insiders grew spectacularly wealthy.
In reality, in fact, corruption intensified and flourished to such an
extent that – by the time President Viktor Yanukovych fled into the night with
his cronies and allegedly stolen billions of dollars – the Ukrainian state was
de facto bankrupt.
Not only does Ukraine rank close to the bottom of the corruption
cesspool — 144th out of 177 nations measured by Transparency
International – Ukraine’s institutions and finances were so weakened that
Russia found it easy pickings to seize Crimea and ignite a separatist war in
eastern Ukraine.
To climb out of the mess that it is in, Ukraine is borrowing billions of
dollars from Western lenders – money that comes with strings attached. Cleaning
up corruption is one of those strings, demanded by the International Monetary
Fund, World Bank, the United States and the European Union, Ukraine’s key
benefactors.
While the landmark new laws
are considered
Ukraine’s biggest legislative advance in fighting corruption, its shortcomings
could hobble the effort.
For example, Ukraine’s judicial system – from police to prosecutors to
judges – remains unchanged. This means that action by the new Anti-Corruption
Bureau against corrupt officials can get blocked at any stage in the process,
especially by the corrupt and politically subservient judges who remain in
place.
But the push from within – by Ukrainians who fought and won the
EuroMaidan Revolution – and from the outside – by
the West, may actually lead to changes.
At least that is the hope of the
group of anti-corruption crusaders from Transparency International, the Anti-Corruption
Action Center, the Ministry of Justice, parliament and the Reanimation Reform
Package who guided the legislation through parliament.
Eventually, most of their ideas were included in the new laws.
“I am 80 percent happy; no, actually 85 percent,” says Ivan Presniakov,
who together with his long-time boss,Victor Chumak, the head of the Verkhovna
Rada’s efforts to control organized crime, was part of the anti-corruption
team.
Part of Presniakov’s dissatisfaction lies with last-minute amendments
made by members of parliament to make the anti-corruption laws less potent. For
example, deputies gave themselves more control
over the Anti-Corruption Bureau, making it something less than politically
independent than originally envisioned. Parliament can now take a no-confidence
vote against the bureau’s chief.
“No wonder MPs tried to protect themselves from future bureau
investigations since they are potentially its first ‘clients,’ said Tata Peklun
of the Anti-Corruption Center.
The main features of the new
anti-corruption legislation address pressing problems today.
So many members of the Yanukovych administration are on the lam as
fugitives from justice that pressure built to allow the trials of people in
absentia. The law change allows for criminal proceedings to take place and, if
found guilty, makes it easier for courts to order the seizure of assets and
potentially apprehend the convicted person.
Vitaliy Shabunin of the Anti-Corruption Action Center says he’s amazed
by the continuing arrogance of the Yanukovych “family,” including suspected
bagman Sergiy Kurchenko, who bragged about how the circle’s wealth has grown in
the months after the president abandoned power. The laws are expected to help
courts stop the enrichment of the former regime.
Another feature defines corruption as a crime in Ukraine’s criminal
code. One of the definitions allows prosecutors to compare a state official’s income and expenses. If the
person is living beyond his or her means, and cannot give a legal explanation,
they could face prosecution and up to seven years in prison if convicted.
Defining domestic
politically exposed persons and tracking and reporting their financial transfers should also help. Dmytro Kotliar of the Reanimation
Package of Reforms is positive about the measure. “You can’t catch everything
with preventive measures, but it makes moving illegal money much more
difficult,” Kotliar said.
The law on public disclosure of the true beneficiary owners of Ukrainian
companies is potentially not only groundbreaking for Ukraine, but Europe as
well. Not a single country in Europe has yet created a public registry of the end beneficiaries of
the companies, despite being recommended to do so by the European Union Money
Laundering Directive.
The section of the law to create a national public registry of immovable
property is long-awaited as a mechanism to make the hiding of million-dollar
mansions and other valuables more difficult for corrupt officials. But for
these registries to work, they need to be comprehensive and accurate.
In the end, the fight will come down to not only the political will to
wage it – but the will of the political elite to change. Anti-corruption activists are
skeptical, but do not give up hope. “I am waiting until March to see
where the president is going with the anti-corruption reform,” Shabunin said.
Editor’s Note:This article is part of the Kyiv Post’s Reform Watch project, sponsored by the International Renaissance Foundation. Content is independent of the financial donors. The newspaper is grateful to the sponsors for supporting Ukraine’s free press and making specialized coverage of reforms possible through this project.
