Business Ombudsman Algirdas Semeta reported on complaints from foreign and local companies in Ukraine during the second quarter of the year.
Some trends are positive, Semeta said during a roundtable with journalists on July 31.
“Complaints about wrongdoing by law enforcement bodies were significantly reduced. The SBU (Security Service of Ukraine) generally dropped out of the list of the top 10 institutions that are most often complained about,” he said.
According to Semeta, the number of complaints against the national police decreased by 16 percent, against customs by 34 percent, and against state-controlled enterprises by 38 percent.
Out of 398 complaints, 72 percent were successfully resolved after an investigation during this period.
Overall, more than 3,800 investigations have resolved and closed — with a total financial effect of nearly Hr 17 billion ($680 million) — since May 2015, when Ukraine’s Business Ombudsman Council was established.
But not everything is as optimistic as Semeta would like to see.
The number of complaints about tax issues increased by six percent, about regulatory authorities’ actions by 13 percent, and about local government authorities by 24 percent. And although the number of complaints against law enforcement bodies decreased, this year’s number is much higher than it was in 2015-2017.
“We cannot say that the problem is solved. The business still feels pressure from law enforcement bodies,” Semeta said.
That is why Semeta insists that continuing to reform law enforcement and establishing a financial investigation service should be among the first priorities for the newly elected parliament.
Another hot issue, taxes, and customs questions received 65 percent of all complaints.
However, after the Cabinet of Ministers decided on March 6 to split the State Fiscal Service into two separate bodies — a State Tax Service and a State Customs Service — most complaints will be against the State Tax Service, Semeta predicts.
“This is the service with which business comes into contact the most. There are a lot of controversial moments, and it is necessary to dig deeply to understand who is right and who is wrong,” he said.
Decentralization issues
The Business Ombudsman Council has observed that the number of complaints against local government authorities has increased significantly, which is directly connected to Ukraine’s reform on decentralization.
“We support the decentralization reform, but we also see problems associated with its implementation,” said Semeta.
To his regret, the Ukrainian government has not yet approved a mechanism to monitor the legality of local authorities’ actions.
“It is very important to achieve a balance between the increased rights of local authorities with their responsibility and violations,” said Semeta.
“Reform needs to have a logical end, so the local authorities will act as effectively as other authorities in relation to business,” he added.
Among the oblasts with the highest number of complaints are Kyiv, Dnipropetrovsk, Kharkiv, and Odesa. But the highest growth of complaints in the second quarter was registered in Zaporizhia Oblast.
“In those oblasts where we see a lot of complaints, local authorities have a strong influence on the final result of (business’) activities. It can indirectly point to the fact that local authorities do not work effectively enough there,” said Semeta.
The Business Ombudsman Council is funded through a multi-donor account set up at the European Bank for Reconstruction and Development.
In October, Semeta will leave his position as a business ombudsman and be replaced by Polish lawmaker Marcin Swiecicki
