President Volodymyr Zelensky has been vocal about going after Ukrainian oligarchs. Yet, months after the start of “deoligarchization,” we still don’t know if the president is genuine on his promise.
On July 1, Zelensky’s Servant of the People party passed the draft bill dubbed “the oligarch law,” in the first reading. It is set to introduce a legal definition for an oligarch and impose limitations on them.
However, with all the promotion of the idea, the lack of transparency raises serious concern on whether the proclaimed war on oligarchic influence is real — and whether it will target all oligarchs equally.
In mid-February, pro-Kremlin politician Viktor Medvedchuk was stripped of his media business and media and is now charged with treason. Medvedchuk’s Opposition Platform — For Life party has been rising in electoral ratings prior to the sanctions.
The National Security and Defense Council proceeded, issuing more sanctions almost every week. One Friday it imposed sanctions on “crime bosses,” another week it went after corrupt Customs Office officials.
The weekly show started to grow stale when, on June 18, the council went after the big fish. It passed sanctions against oligarch Dmytro Firtash, who’s been fighting off a U.S. extradition warrant in Vienna for seven years — and yet hold a destructive sway over Ukraine’s life.
But there’s a catch. Two weeks after sanctions were imposed on Firtash, society still doesn’t know what sanctions did to him or his businesses.
Firtash’s company, Group DF, said they continue to operate. Firtash’s gas distribution companies are obviously not frozen, too. So did sanctions even do anything to the oligarch?
This goes in parallel with persistent rumors and reports about another oligarch, Rinat Akhmetov, blocking attempts to limit his influence and harmful rent-seeking “business practices.”
Parliament passed on July 1 in the first reading a bill that seeks to raise a number of taxes and fees, most importantly the iron ore extraction fee. Akhmetov’s companies extract over 50% of iron ore. Experts say that the fees are being raised far less than originally expected.
Another battle is taking place over Ukrzaliznytsya, a state-owned railway monopolist transporting iron ore for Akhmetov at a very low price. In 2020, Ukrzaliznytsia suffered $426 million in losses, while Akhmetov was able to increase his wealth by $5 billion.
According to a Kyiv Post source who wasn’t authorized to speak to the press, the government is looking to increase the tariffs on the transportation of iron ore by less than 10 percent. It will save Akhmetov’s companies billions of hryvnia a year.
Promises of deoligarchization and the Defense Council’s actions prompted Zelensky’s electoral rating to show a slight increase after months of sharp decline.
Now it’s time to show us the actual results behind the sanctions. The critical lack of transparency is undermining our trust in Zelensky’s anti-oligarch drive.
