Dear Mr. President! Dear Mr. Minister of Justice! Dear Guests!
In Ukraine there are two major challenges on the agenda today. The first challenge is a fight against external aggression, the Russian terrorism.
The second challenge is a fight against the internal corruption.
A global challenge on the agenda of the world is a fight against terrorism. Here in this room now, I know there are our friends from France as well. And so I would like to ask that we start this meeting by commemorating those who died from terrorism in France, and those who died from terrorism in Ukraine.
Thank you sincerely.
Only joint efforts can help us win. And exactly these joint efforts are needed now from all Ukrainian authorities. The joint efforts and hard political will that has just been mentioned by the president of Ukraine.
I would like to report on what has been done in Ukraine in the last 20 months on the issue of fighting corruption. Only specific facts.
Oil and gas sector
First,the largest corruption in Ukraine was in the oil and gas sector. Gas oligarchs and billions of dollars that were pumped out of Naftogaz National Joint Stock Company, were destroying the state budget and created billionaires at the expense of the state and taxpayers budgets. In the last 20 months we no longer have intermediaries in the gas sector. We no longer have shady deals and we have no more setbacks in the energy sector. We have only direct agreements between member states of the European Union and European companies and Ukraine. And we have only direct agreements between Ukraine and the European Union and the notorious company Gazprom.
Second, Ukraine did not control the company in which it owns a 51 percent stake. It is Ukrnafta. The government of Ukraine submitted a law to the parliament. The law was voted and then signed by the president. And the company Ukrnafta got a new manager, incidentally, a British citizen, who was selected solely on a transparent and open competition. And the company is now beginning to completely change the whole composition of the board and the supervisory board, and most importantly, the system and management structure of the company.
Privatization
Third, in the last 20 years Ukraine’s oligarchs were formed primarily by shadow privatization, which was directly covered by the government, was formed under specific buyer and was not attracting foreign investors, but were creating exclusively the conditions for the shadow privatization to create Ukrainian oligarchs and tycoons.
Over the past 20 months there were not conducted any shadow privatization in Ukraine.
Moreover, due to the imperfection of the law on privatization and the lack of a new evaluation form of the objects of privatization, the government stopped the privatization of one of the largest objects – the Odessa Port Plant. We knew that the current legislation makes it possible to purchase by the so-called investor a 5 percent stake, and we knew who were willing to buy these 5 percent, to not really give a foreign investor to buy the other 95 percent at public auction.
So now we submitted laws to the parliament aimed to change the conditions of privatization and the list of privatization objects designed by the Ukrainian government. But for some reason the Ukrainian parliament hasn’t approved them for six times.
Civil service reform
Separately I would also like to mention achievements in the framework of civil service reform. More than 700 civil servants, higher officials in Ukraine passed the so-called lustration, but rather have been released from the highest positions of Ukrainian state power. It includes the first deputy ministers, deputy ministers, 42 percent of the higher officials of the State Fiscal Service that were closer to the status of millionaires than to the status of real civil servants, and 15 percent of the leadership of the State Fiscal Service in the regions. So, the replacement and execution of the law of Ukraine on lustration is another step to really overcome and fight against corruption.
Further, government established National Anti-Corruption Agency. It is not a law enforcement agency. This is a preventive body, which must verify the declaration of civil servants, their income, assets and wealth and verify what they have spent and what they showed in the declaration.
The National Anti-Corruption Agency will be formed. The government went to meet the nongovernmental organizations and our Western partners and reversed the order of forming the tender committee. The tender committee is independent and it will nominate very soon the head of National Anti-Corruption Agency and the respective deputies.
Public registries
Ukraine is practically one of the countries in Europe that fully opened their registers of ownership. The point is that now any person in this room, through the website of the Ministry of Justice of Ukraine, could receive the information about the Ukrainian prime minister’s property, as well as the information of any ministries’ property, who’s the owner of any movable property, real estate, shareholders and enterprises. And this is another part of our anti-corruption strategy – transparency and full access to all databases. And we will continue to move further in this direction.
Deregulation
Additionally I’d like to note on deregulation. We have reduced by half the regulatory authorities.
We have reduced by half of all kind of licenses, permits and other things that formed nothing else like the bribe and bureaucracy in the country.
Unfortunately, not all legislative initiatives were adopted by parliament yet. But I hope that parliament is interested in a real fight against corruption, in reducing the government influence on economic processes, and thus in implementing economic freedom for the Ukrainian economy and Ukrainian business.
‘None of the oligarchs has any influence on’ the government of Ukraine
Separately, I note the political corruption. The first good news is – none of the oligarchs has any influence on the government of Ukraine. But there is other news not very good. Unfortunately, there are some representatives of the big industries in the Ukrainian parliament, who have no state interests, but who have a narrow interest of their business group. That is why the law on political parties had been introduced in parliament. And this law was adopted. Starting next year, the political parties in Ukraine will be exclusively funding from the state budget of Ukraine. And those political parties that will get money from any shadow system, and their leaders will be brought to justice for political corruption. Because the basis of corruption, primarily growing from politics.
Also were made achievements in the formation of the National Anti-Corruption Bureau that just said the president. And the president strictly monitors the appointment of special prosecutor, national anti-corruption prosecutor. We expect that in the near future anti-corruption prosecutor will be appointed and the real investigation of the criminal proceedings against corruption will start.
State Bureau of Investigation
I’d like to mention one more achievement that was made by the Ukrainian government, the parliament and the president – is the State Bureau of Investigation. Parliament finally voted to establish a new independent State Bureau of Investigation, which deprives the Ukrainian prosecutors and first of all the Prosecutor General of Ukraine, to conduct investigations. And it transfers the bulk of criminal proceedings to the newly independent investigative body.
Limiting powers of prosecutors
I believe that we must keep moving towards the reforming of prosecutor’s office and to deprive prosecutors of excessive functions, process control functions over specific investigation and specific investigators. The main function of the prosecutor’s office is a public prosecution process in the court, but not the control over the whole law enforcement system.
What we have to do?
And first of all I want to support the president’s position on the needs to start the entire law enforcement system in the fight against corruption. But fighting against corruption – is not only to put in a jail. It was already mentioned separately. The fighting against corruption involves several elements. The first element is a further continuation of deregulation and reducing the impact of state and government on economic, political and social life. Less government – less corruption. We therefore call upon parliament to continue to adopt laws on deregulation and simplification of life in Ukraine in order to the bases and foundations of corruption, which is now in Ukraine, just disappear.
‘Computer does not take a bribe’
A good example is the Office of Administrative Services that are created by the government and local authorities. The computer does not take a bribe. It just does not take it. And when you apply to the Office of Administrative Services to register any property, or an enterprise, or receive any certificate, then you do not need to stand in a queue, you do not need any friends, you have to come, get a receipt, to fill up the application and get the permission or appropriate solution even through the internet.
The second issue is the salary of government or public officers. If the average salary in the public service will be $ 100, whether it is the prosecutor, or a tax collector, or customs official, or any employee of the State Fiscal Service, we will never overcome corruption. And all this populism that was started including by my political opponents 12 years ago that we must deny all public officers’ salaries generally leads to only to further corruption.
‘Fund for public officers’
That is why we appeal to our European partners on this high rostrum. We need help in in order to root corruption out. We need two years to introduce a fund for public officers. The prosecutors, judges, public officers, customs officers who will actually carry out reforms and will not be involved in corruption schemes will get additional benefits from such fund.
Judicial reform
Third – it is certainly judicial and legal system. As the government we come forward with the toughest and the most radical judicial reforming. This means that Ukraine has a possibility to recruit new 9,000 judges. Currently functioning judges may also take part in this competition. Present judges may also prove they are incorruptible, and the houses in their ownership for a few million dollars are not because of granny has earned ones 20 years ago, but they do have confirmation for their estates and property wealth.
And now we must clearly support the position of the President on amendments to the Constitution of Ukraine. And to implement a comprehensive, complete and radical reforms of the juridical branch.We cannot have the honest anti-corruption detectives who submit materials to the appropriate court and at the same time a corrupt court, which will not make decisions in the name of Ukraine, but in the name of U.S. dollar.
That is why the adoption of radical judicial reform is the main issue on the agenda.
Furthermore, I would also note on where we still have a corruption. It is referred to everyday corruption, which concerns every citizen. It is in education, it is in health care. And the recent polls show that over 60 percent of citizens face this everyday corruption. And it is also connected both with the level of wages and lack of reforms in the health care system and in the system of education especially in secondary education.
State enterprises
The state enterprises. Due to the fact that parliament has not made a decision both on the privatization of the state companies and the engagement of independent managers in these companies, the state enterprises remain a foster-nurse and remain the basis of corruption in country.
I gave an order to check the 20 largest state enterprises. Starting with the Naftogaz and the Energoatom, finishing with the Elektrotyazhmash and the Odessa Port Plant. However, to execute thisorder effectively we need a real and capable state audit service.
The government of Ukraine has taken a decision on reforming the State Financial Inspection and establishment of the State Audit Office on the basis of State Financial Inspection. We believe that those state companies that have strategic importance for the country must remain in the state ownership, but the rules and management system there must be completely changed. And particularly the independent managers who represent not the interests of the state, but the interests of the state company and are responsible for it, – are the basis for the formation of a new system of governance of the state enterprises.
As a pilot project, we reforming the Naftogaz and the Naftogaz subsidiaries, and exactly the same system will be implemented in other companies.
International anti-corruption mission
And finally. In order to fight corruption effectively, I believe that this conference should discuss, and I ask for your support, the need of establishment of the permanent international anti-corruption mission in Ukraine for the next two years.
The point is that we need our partners from the European Union and the United States on a regular basis to delegate the investigation officers from the Federal Bureau of Investigation and law-enforcement services of a number of the EU member-states to Ukraine.
It is expected that these officers, firstly – provide assistance to all Ukrainian law enforcement authorities in organization of the fight against corruption, secondly – investigation, precisely –assistance in investigation of those corruption facts that appear in the media, those that appear in the form of statements from different law enforcement agencies.
And in case when such a corruption taking place in Ukraine, this international anti-corruption mission, which would be submitted to law enforcement officials in other countries,would have the opportunity to institute appropriate criminal proceedings outside of Ukraine. As you know the corruption has no boundaries.
That is why the proposal is to make a request to the EU member-states and the United States to establish on a constant basis the international anti-corruption mission. To provide this international anti-corruption mission on the basis of joint memoranda and, if necessary, amend the legislation, with the access to databases of the Security Service of Ukraine and the National Anti-Corruption Agency, the National Anti-Corruption Bureau, the State Bureau of Investigation, Prosecutor General. And in case of the corruption transactions carried out by the Ukrainian government officials outside of Ukraine, where the foreign companies are, where foreign ownership is, and where the foreign accounts are, to enable this international anti-corruption mission to initiate criminal proceedings on charges of corruption outside of Ukraine.
This will enable us inter alia to avoid the problems of a many EU member-states they had in the first stage of formation of anti-corruption bureau. By the way the first anti-corruption bureau directors of some countries went to jail.
In order to pass this stage effectively, we need international support.
International support on anti-corruption mission as well as international support to increase social standards and wages for those who fight corruption in Ukraine and for those who are able to carry out the reforms in Ukraine.
Thank you!
