On April 18, Kyiv District Administrative Court (KDAC) passed a ruling which recognized unlawful the nationalization of PrivatBank. This triggered an immediate critical reaction of Ukraine’s international partners, as earlier forensics company Kroll has identified that PrivatBank was subjected to a large scale and coordinated fraud over at least a ten-year period ending December 2016, which resulted in bank’s loss of at least $5.5 billion. At that time Privatbank belonged to its former owners Igor Kolomoisky and Gennadiy Bogolyubov. Moreover, after President Poroshenko criticized KDAC’s decision on PrivatBank and asked for qualification assessment of KDAC judges, they appealed to different state bodies claiming interference in their activities.
This is not the first and obviously not the last time that the court hits the headlines in Ukrainian and international media. In 2013, this same court allowed notorious militia Berkut to break up Maidan protest. Much recently, this winter, it tried to suspend from office acting healthcare minister Dr Ulana Suprun and reinstated dubious tax administration chief Roman Nasirov, indicted by NABU of corruption. In addition, without a single legal request sent abroad and going far beyond its competence and territorial jurisdiction, in December 2018 KDAC ruled that Ukrainians intervened in the U.S. 2016 elections. This decision was later used by discredited Prosecutor General Yuriy Lutsenko to justify his ridiculous accusations in the interview for the Hill media.
Together with the Constitutional Court’s (CCU) recent ruling to decriminalize illicit enrichment, the trend is obvious: non-reformed courts might dangerously quickly backslide the reforms’ achievements. A number of time bombs against NABU, anticorruption court, e-declarations system and other reforms are currently lying on courts’ shelves and might soon explode.
Appeals against NABU
The appellate administrative court is considering an appeal regarding Artem Sytnyk’s appointment as NABU director allegedly in violation of a procedure. A claimant, which is a law firm of the attorney of deputy head of the State Security Service (SBU) Pavlo Demchyna, who is a subject in NABU case, raised concerns regarding the illegality of examination of Sytnyk’s declaration by the fiscal service. According to the claimant, the fiscal service sent the results of such an examination directly to the President’s Administration, circumventing the Civil Service Agency. Despite this issue did not violate claimant’s rights, on Nov. 2, 2018 KDAC upheld the claim, it is currently being appealed. If enacted, this ruling might become a prerequisite for abolition of the presidential decree on Sytnyk’s appointment.
Certain legal powers of NABU are challenged. Kolomoisky’s plant appealed to the CCU to abolish NABU authority to file lawsuits in order to invalidate civil agreements which contain violations detected during the investigation. If upheld, could deprive NABU of effective tool and may lead to the return to unfair companies of around Hr 7 billion, which NABU seized.
In addition, there is also an ongoing consideration at the CCU of an appeal against NABU’s right to detain corrupt officials prior to court warrant being issued if an official may otherwise flee. Thus, this tool helped NABU to prevent escape from justice of ex-State Fiscal Service director Roman Nasirov, who had British citizenship and a few passports for international travels. Timely detention helped the prosecution to get him arrested with an alternative of Hr 100 million bail as a preventive measure. This tool does not mean NABU can detain whoever they want upon their discretion without any judicial oversight – they are obliged to get the court warrant within 60 hours after the detention. If the appeal is upheld, would give the grounds for recognition of past arrests as illegal, which as a result may lead to the review of sentences.
Another threat is a retroactive application of the so-called Lozovyi’s amendment. The appeal is also being considered by the CCU. Lozovyi’s amendment was passed in October 2017 and introduced a forensics examination only upon the court’s sanction, as well as unrealistic deadlines for criminal investigations. In their appeal, 54 MPs asked the court to allow to apply the clause retroactively. If upheld, would give the subjects of criminal proceedings extra pretext to appeal cases in courts as well as to close down a huge number of proceedings, like the ones into Rotterdam plus formula or PrivatBank fraud.
Against anticorruption court
KDAC is considering two claims, filed by a banned contestant to the High Anticorruption Court Taras Zayets. The complainant challenges the results of the competition and foreign experts panel’s rules of procedure. If upheld, might threaten the whole competition with a domino effect as will give the grounds for all other banned candidates to appeal against their disqualification in court.
Another threat to the Anticorruption Court is recognition of the mandates of a few members of judicial self-governance body the High Qualification Commission of Judges as expired. Based on some changes of legislation on the judiciary in 2014-2016, the three lawsuits were filed to KDAC to recognize that these three HQCJ members had no right to perform their role since end 2018 and therefore all subsequent Commission’s decisions, including the one on the appointment of the Anticorruption Court judges are invalid. It is worth stressing separately that one of the three lawsuits was already considered by KDAC and rejected, is currently being appealed. The rest are pending in KDAC.
Against e-declarations system
Following decriminalization of illicit enrichment, the Constitutional Court might also find unconstitutional e-declaration system itself and/or criminal liability for false statements in the e-declarations. The respective appeal was submitted by 48 Members of Parliament. If upheld, would completely destroy the e-declarations system.
In 2017 AntAC started strategic litigation against the Security Service of Ukraine’s officials regarding illegal classification of asset declarations of their management. KDAC and the Appellate administrative court have once considered our appeal and denied it, but the Supreme Court in October 2018 transferred the case for the new round of consideration, back in KDAC. There is a risk that using new evidence both courts will once again reconfirm their previous decisions, thus, entrenching parallel secret system for declarations of SBU officials.
Others
Four appeals regarding lutstration were submitted to the CCU. All of them are aimed at cancelling the ban for different groups of former officials who held top positions during Yanukovych times so they could again work in public administration. If upheld, would water down modest results of cleansing the civil service of untrustworthy people.
In addition, the Constitutional Court considers the appeal which endangers the establishment of the new Supreme Court. As a consequence, creation of the new Supreme Court and liquidation of old Supreme Court and other cassation courts might be ruled illegal. This would cause the return to the previous judicial infrastructure, which would have negative consequences for the judicial practice during the last one and a half years.
59 MPs, led by the Opposition Bloc MPs are contesting in the Constitutional Court the healthcare reform, specifically the law which defines how the healthcare system is financed. If upheld, might destroy the “money follow a patient” principle of financing and the ability of a patient to select a doctor, which is considered to be the biggest achievement of the reform so far as around 27 million Ukrainians already engaged.
The Appellate administrative court also considers a number of appeals against scandalous KDAC decisions. Thus, for example, MP Leschenko is appealing the decision on their alleged interference in the 2016 U.S. elections, while the Government is challenging Nasirov’s comeback. The National Bank of Ukraine also promised to appeal the decision on illegality Privatbank nationalization.
Ukraine tried to fake a judicial reform but this did not work out. Attorney Roman Maselko writes that none of the judges of KDAC was dismissed in the course of the judicial reform. Moreover, Poroshenko planned to liquidate KDAC in 2017. He asked the permission of the High Council for Justice to do this, received it, but then changed his mind at the last moment. Now, this decision is backfiring on him.
It is important to reintroduce a comprehensive judicial reform. Such a reform shall start with relaunch of the judicial self-governance bodies. This includes the formation of a new High Qualification Commission of Judges with the active role of international experts in the selection of its members. Also, independent disciplinary commissions with CSOs representatives under the High Council of Judges should be created. Next step shall be qualification assessment of judges, including auditing of previous decisions on the assessment of dubious judges, which must finally deliver on the purification of the judicial system from judges with questionable assets or dubious decisions.
CSOs offered a plan in the judicial reform agenda. We hope President Volodymyr Zelenskiy will have a political will to become a driver of this highly demanded and long-awaited reform.
Olena Halushka is head of international relations for the Anti-Corruption Action Center and Vitaliy Tsokur is deputy head of the Antac legal department.
