Ukrainian authorities mess with international partners risking further financing

Next week Ukraine expects to receive the positive descision of the IMF Board to give the country the next agreed financial tranche of nearly 900 million hryvnas. It's true that Ukraine and the IMF reached a Staff Level Agreement on the recent progress under the Memorandum till the start of the second review in October. However, Ukraine authorities continue to make steps which put further cooperation with international partners under risk.

For example, it took seven days for the President to sign the draft law to meet Ukrainian obligations within the financial program with the IMF. Furthermore, it's the same draft law which at first was changed behind our partners' back and deadline of which has been missed back in July. This week the Parliament will consider the draft law on strengthening the institutional independence of Specialized Anti-Corruption Prosecutor's Office (SAPO).

However, the week before we witnessed the scandalous attempt to substitute the agreed version of the draft law with the other one which didn't meet the purpose and requirements of our international partners.

Such cases do nothing more than undermine international partners' trust in Ukraine and put at risk our chances to receive continuous financial support. This issue covers more details of the progress in agreements between Ukraine and the IMF and other international partners made between 27 November and 03 December 2023. The President signed the DL to fulfill an expired structural benchmark with a week delay.

A week ago, the Verkhovna Rada held over the DL #10016-d which is needed to meet the structural benchmark #6 to the Presidential Office for signing. The DL was supposed to come into force and restore an agreed part of tax inspections from the 1st December. However, the President signed it only at 05 December.

Let us remind that the deadline for this benchmark ran out in July. Ukraine failed to meet the deadline of this structural benchmark because of intervention of Rostyslav Shurma, Deputy Head of the Office of the President of Ukraine. He forced to eliminate all provisions on restoring tax inspections, which were agreed with the IMF, before voting for the first version of the DL.

Same forces in the OP are blocking the further steps of adopting the DL now. This week the Parliament will consider the reform of SAPO, which was nearly sabotaged in the Law-Enforcement Committee. The DL #10060 on strengthening the institutional independence of the Specialized Anti-Corruption Prosecutor's Office (SAPO) is one of the responsibilities under the Memorandum with the IMF (structural benchmark #21), financial support program with the EU and most likely the agreements with the World Bank.

The Verkhovna Rada will consider the DL #10060 this week during the plenary meetings. Fortunately, the Parliament will consider the version which was agreed with international partners. However, there was a huge risk to ignore our responsibilities as a country once more.

On Friday, 17 November, Law Enforcement Committee under the leadership of Serhiy Ionushas (Sluga Narodu faction) didn't support the CMU's DL on the SAPO institutional independence, which was agreed with all international stakeholders. Instead, the Committee recommended its revised version which kept opportunities for external control of the state body. Anastasiia Radina, Head of the Anti-Corruption Policy Committee and experts of the AntAC pointed out that the provisions of the revised DL establish the mechanism of political control over SAPO by MPs from the Law-Enforcement Committee.

Moreover, the DL saves the current state of affairs when the Prosecutor General's Office remains responsible to evaluate and react on complaints against SAPO prosecutors. The Committee under the leadership of Serhiy Ionushas made this step under the influence of Oleg Tatarov, Deputy Head of the Presidential Office responsible for the law-enforcement sector. Particularly, in his recent interview to Radio NV Andrii Osadchuk, First Deputy Head of the Law-Enforcement Committee (Holos faction), told that Mr.

Tatarov participated in the Committee's meeting and haven't spoken and strengthened the importance of the CMU's DL. So, the Committee (except three members) voted for the Committee's revised version. Just because of the quick reaction from our international partners, the Law Enforcement Committee gathered in several hours that day to revote and finally recommend the CMU's DL #10060 which was agreed with the international partners.

This scandalous case is not the only one when the Law Enforcement Committee is forced to follow the instructions from the particular Deputy in the Presidential Office. On17 November the Cabinet of Ministers was going to support and submit to the Parliament a draft law which aims to sabotage the restart of the Economic Security Bureau of Ukraine proposed in the draft law #10088-1 and supported by the international community. Moreover, it violates crucial powers of NABU to investigate corruption cases in Ukraine. This process is driven by Deputy Heads of the Presidential Office Oleg Tatarov and Rostislav Shurma. The document is designed to go to the already mentioned Law Enforcement Committee (headed by MP Serhiy Ionushas, Sluga Narodu faction), where (unlike in the Tax Committee) abovementioned Deputies from the OP can control the entire consideration process.

Thanks to the quick feedback from the international partners, the CMU postponed the consideration of the DL. However, it seems that they haven't abandoned to consider it later. In one of his recent interviews Rostislav Shurma confirmed that they are going to submit the governmental DL with the amendments to the Criminal Procedure Code and anti-corruption legislature.

The Tax Committee recommended the DL which postpones the provisions of the Law on administrative procedure for the NBU. The Committee on Finance, Tax and Customs Policy recommended to adopt the DL #10023 in the first reading. According to the Committee's decision, based on the NBU and IMF propositions, the provisions of the Law on administrative procedure are postponed for the NBU till 01 January 2025.

Apart from this amendment, the document also allows the NBU to transfer the property acquired as debt repayment to the Ministry of Defense free of charge. The Parliament will consider the DL this week during its meetings planned for 8-10 December. The working group finalized the DL on SOE corporate governance reform. According to the members of the working group, the DL #5593-d on SOE corporate governance reform was finally agreed with experts and international partners.

It is expected to be considered by the Parliamentarian Economic Committee already this week. Ukraine stated an intention to adopt the DL #5593-d and strengthen corporate governance in SOEs in the Memorandum with the IMF and agreements with the World Bank.

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