With dramatic flourish, Ukrainian President Petro Poroshenko on Dec. 1 signed into law protections for businesses against unreasonable or illegal searches and inspections of businesses. It took effect on Dec. 7. The politicians hailed the law as a victory, a sign that Ukraine is truly business-friendly and open for investment.
But if Ukraine needed a new law to stop unreasonable or illegal searches, isn’t this an admission of guilt over what’s happened before?
This Kyiv Post Legal Quarterly, our 16th edition since we launched the publication in 2014, highlights several cases of unreasonable or illegal government interference in private commerce. Sometimes, the government — through courts, prosecutors, police or regulators — interferes to enrich favored people or agencies. Other times, the intervention is designed to unfairly favor one market player over another. And still other times, businesses or raiders simply act brazenly in seizing other businesses or refusing to pay bank loans. They are emboldened by Ukraine’s lack of rule of law and inability to enforce court judgments.
Some are simply confident they will enjoy impunity after paying off the right judge or prosecutor, or skilled at tying up the dispute in court endlessly in the hopes that the victims go away. None of these abuses escape the attention of investors, who are still largely bypassing Ukraine despite a global economic boom. Fortunately, Ukraine has more tools to fight against unfair attacks on business: The European Bank for Reconstruction and Development, among other international organizations; the Business Ombudsman’s Council; the National Anti-Corruption Bureau of Ukraine and a newly constituted Supreme Court.
But businesses in Ukraine need more protection. They need elected officials and government to ensure rule of law, minimal yet effective regulation, and competitive markets.
