Ukraine’s chances to receive a new tranche of the International Monetary Fund is under risk due to slow progress in implementing anti-corruption measures, experts warn.
One of the key stumbling stones at the moment is a law that would allow to create an independent corruption investigation body. Two competing drafts of it are scheduled to be discussed at the Aug. 20 Cabinet meeting.
The IMF board is due to take a decision on whether to disperse the next $1.4 billion to Ukraine on Aug. 29. This would be the second tranche of a $17 billion, two-year stand-by package that was approved by the Fund in April. The country’s finance minister Oleksandr Shlapak said this money would be used to boost the ailing national currency, which has entered its second stage of sharp devaluation in just over half a year.
One of the preconditions for receiving new cash, however, is the creation of an “independent anti-corruption agency with broad investigative powers” and “adoption of legislation to support anti-corruption effort,” according to the July 18 statement by Nikolay Gueorguiev, IMF mission chief for Ukraine. There has been little progress on these issues, however.
Andrei Marusov, chairman of Transparency International in Ukraine, said that previously political parties of both the ousted President Viktor Yanukovych and his arch-rival Yulia Tymoshenko were resistant in parliament to forming a new anti-corruption body.
But the new government’s effort to draft an important bill that would establish a new anti-corruption body with broad powers erupted into a scandal on Aug. 18. Tetiana Chornovol, a government representative for anticorruption policy, threatened to leave her post and accused her colleagues in the Cabinet of lack of good will to fight with corruption by adopting her draft legislation on anti-corruption body.
“It is better to be a private individual that a government representative, when there are no political will,” she wrote in her emotional blog on Aug. 18.
But representatives of anti-corruption watchdogs say Chornovol’s draft is low quality and will cause more harm than good. For example, the IMF insists that the head of the anti-corruption bureau should be appointed through transparent competition, but her draft fails to provide for such a mechanism. It has many other shortfalls, experts say.
Vitaliy Shabunin, head of the Anti-Corruption Action Center, said both proposed bills need to be analyzed by international bodies. The second one was drafted by a working group headed by Viktor Chumak, a parliament member from Ukrainian Democratic Alliance for Reform.
“The price for a mistake is too high, both in terms of creation the highest body for fight against corruption and in terms of receiving money from IMF,” the expert said.
The idea behind the anti-corruption bureau is that it has to be able to detect, stop and investigate cases of corruption committed by government officials.
Shabumin said that IMF expects that the new law will state that anti-corruption investigations have to cover officials of all levels, and the new term “illegal enrichment” should be introduced to the Criminal Code.
“For example, if now you work as a judge with a salary of Hr 20,000 yet drive a Bentley and live in mansion, and you can’t be imprisoned for it at the moment because it’s not a crime. The prosecutor has to prove a criminal origin of all this money, which is almost impossible,” Shabunin said.
But that would change once the term “illegal enrichment” makes it to the Criminal Code. If a prosecutor proves that legal income of a particular official could not allow them to buy his property, it would be a basis for opening a criminal case against that official.
Ukraine ranks 144th out of the 177 countries surveyed by Transparency International’s 2013 Corruption Perceptions Index.
Few steps have been taken by the government to improve the corruption score. Ukraine’s parliament amended the public procurement law, which made the procedure for government procurement more transparent. But it was passed by a slim margin and only at the second attempt, indicating that there is little desire to fight with corruption in the current parliament, Shabunin said.
Moreover, when the government suggested amendments to the Criminal Code to allow courts to order confiscation of assets of government officials on the run, the parliament spent a week squabbling before finally passing the amendments at the second attempt on Aug. 15. The law facilitates the government’s next moves against the assets of fugitive former President Yanukovych and his cronies.
Shabunin said that the parliament has so far refused to open registers of land and real estate owners – another essential step in tracking and fighting corruption.
“With current composition of Verkhovna Rada it’s impossible to pass serious anti-corruption reforms,” he says.
Kyiv Post staff writer Oksana Grytsenko can be reached at [email protected]
