Myroslav Prodan, who was acting head of the State Fiscal Service of Ukraine for two years, resigned from his post on Sept. 5, announcing he was quitting in a Facebook post.
The cabinet has already satisfied his request.
Prodan said he had resigned to avoid a conflict of interest, as he had decided to take part in the selection competition for the job of head of the State Fiscal Service, which the government also announced on Sept. 5. Prodan described the cabinet’s decision as long-expected and reasonable.
But Prodan decision to quit his post also came in the midst of a conflict between him and Ukrainian Prosecutor General Yuriy Lutsenko.
As the Kyiv Post reported in August, the Ukrainian government’s declared war on smuggling has turned into the war for control over customs service, an organ subordinated to the State Fiscal Service of Ukraine.
Ukrainian Prime Minister Volodymyr Groysman and Interior Minister Arsen Avakov declared a war on smuggling in June. Soon after, prosecutors along with officers from Ukraine’s SBU security service conducted several searches of State Fiscal Service offices across Ukraine, and even accused the top-management of Prodan’s and Groysman’s native Vinnytsya Oblast Fiscal Service of setting up criminal gangs and embezzlement.
Lutsenko said in an interview with the Ukrainska Pravda news website on Aug. 21 that his office was looking into a case involving Prodan, and gathering evidence against him.
In response, Prodan on Aug. 22 asked Lutsenko to stop blackmailing him and present the evidence against him.
Different approach
Lutsenko said that Groysman blamed the smuggling epidemic in Ukraine on the law enforcement agencies, while the problem lay with the customs service.
“Law enforcers can’t replace customs officers — it won’t work,” Lutsenko said, adding that the whole customs service had to be reformed, and the customs office heads in the regions had to be held to account and replaced through an open competition.
Lost containers
In one of the latest manifestations of the tensions between the State Fiscal Service and Lutsenko’s office, Prodan and Lutsenko argued over who was behind the recent arrest of a customs officer.
On Aug. 8, Prodan announced that the special department of the State Fiscal Service had arrested Odesa Oblast customs officer Denis Aminev on suspicion of embezzling 37 containers of goods worth Hr 154 million.
A Kyiv court later placed Aminev in custody for two months in a pre-trial detention center, and set his bail at Hr 30 million.
But Lutsenko tried to steal Prodan’s thunder, saying that his office participated in the arrest, and it wasn’t done by Prodan’s people alone.
Furthermore, during a press briefing on Aug. 21, Lutsenko said that the containers, which were arrested back in May, had somehow vanished under the eyes of the fiscal service officials.
Prosecutors have tracked their contents – mostly textiles, which ended up being sold at several major markets in Kharkiv and Odesa.
He said that prosecutors discovered that even more than 37 containers had been stolen by Aminev and his gang.
Overall 100,000 tons of smuggled textiles were found during the tracking operation, Lutsenko said.
Top fiscal service officials at the oblast level should be held to account for the wrongdoing, he added.
Hitting back at a press briefing on Aug. 22, Prodan accused Lutsenko of manipulating the numbers, adding that all the clothing factories in Ukraine couldn’t process 100,000 tons of textiles.
However, Prodan said the State Fiscal Service has started its own investigation into how the contents of the arrested containers ended up being sold at the markets.
He said fiscal service officers suspected a prosecutor, Sergiy Serdyuk, had covered up for the container-smuggling scheme.
Lutsenko also confirmed that, but said prosecutors have been waiting for Serdyuk to come back from sick leave for more than a year in order to serve him a warrant of suspicion.
Hard post
Oleksandr Vlasov, the head of Odesa Oblast Customs Service, who was also present during the briefing, said on Aug. 22 he was ready to take the responsibility for the actions of his office, and even asked Prodan to suspend him from his post for the time of the investigation.
Prodan said he would satisfy Vlasov’s claim.
However, on Sep. 5 Vlasov was appointed to a new post, becoming the acting head of the State Fiscal Service of Ukraine in place of Prodan. He will probably stay in the job until the new head is appointed.
The job of head of the State Fiscal Service in Ukraine has long been surrounded by scandal.
The State Fiscal Service of Ukraine until early this year was de jure headed by Roman Nasirov, a former member of the 138-seat Bloc of Petro Poroshenko faction in parliament. In 2017, Nasirov was accused of corruption in several tax cases and taken into custody, but was released on bail of $3.7 million in March 2017.
But the cabinet only on Jan. 31 officially dismissed Nasirov, whose case is still being heard in court.
Soon after Nasirov was arrested, Prime Minister Groysman appointed Prodan as the acting head of the State Fiscal Service.
Prodan is the former head of a regional fiscal service office in Vinnytsya, Groysman’s hometown and political powerbase.
Radio Liberty’s investigative show Schemes has reported that in 2016, Prodan was investigated for allegedly carrying out tax avoidance schemes on walnut exports, which he denies.
The case against Prodan was closed after his appointment as acting head of the State Fiscal Service.
