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The Means Of Destruction
28 November 2023
Ukraine has adopted a number of laws that should open the way to its accession talks with the EU in December, although its poor track record in fighting corruption remains an obstacle.
Ukraine has raced to pass anti-corruption legislation to raise its chances of opening accession negotiations with the European Union (EU) by the end of the year, with a crucial assessment of its progress by the Executive Commission expected in early November.
Endemic corruption, murky ties between business and political elites, and oligarchic patronage networks impervious to law enforcement have for years been the weakest spot in Ukraine’s democracy. It is still seen as the biggest obstacle to its bid to join the EU – a point raised by both supporters and opponents of Kyiv’s accession.
Politically Exposed Persons will finally face financial scrutiny
Ukraine’s parliament, the Verkhovna Rada, has adopted several laws to boost anti-corruption measures, increase judicial independence and limit the influence of oligarchs on politics.
On 17 October, it finally gave the green light to a law bolstering financial monitoring and wealth disclosure of “politically exposed persons” (PEPs), a key requirement of the EU and other Western institutions helping Ukraine in its war against Russia. Monitoring PEPs is a standard anti-corruption and anti-money laundering procedure across the EU.
For obvious reasons, the law was controversial for many Ukrainian parliamentarians, politicians and bureaucrats – its retroactive character and the fact that the PEP status will be lifelong for individuals concerned and their families had sparked heated debates. Just a few months ago, there wasn’t sufficient backing for such measures in the parliament.
Its passage was hailed as a crucial milestone on the road to open the EU accession talks. The EU will make an assessment of that and other anti-corruption reforms on 8 November, paving the way to a formal decision on the accession talks for Ukraine and possibly also Moldova at the EU summit on 14 December, Reuters quoted sources as saying.
“There are no obstacles to negotiations with the EU now, the ball is in their court,” Yaroslav Yurchyshyn, first deputy head of the anti-corruption committee in the Verkhovna Rada, commented on the passage of the PEP law.
At the December summit, the EU leaders are also going to decide on the 50 billion euro aid package for Ukraine, consisting of both military and financial assistance.
Seven areas of reform
The EU has defined seven milestones Ukraine must meet to qualify for accession talks: appointing judges of the Constitutional Court, pressing on with judicial reforms to ensure independence, adopting anti-corruption and money laundering measures, implementing anti-oligarchic legislation and passing laws protecting media freedom and minority rights.
Ukraine has made substantial progress in meeting the majority of these requirements, with particular emphasis on the challenging task of implementing comprehensive measures against corruption and money laundering. Judicial appointments are progressing at a pace.
In September 2021, the Verkhovna Rada adopted a “de-oligarchisation” law. It establishes criteria for identifying oligarchs and imposes transparency requirements for interactions between them and politicians.
Under the law, a person will be considered an oligarch if they participate in political life, wield significant influence on the media, own a business with a monopoly position in the market, or possess assets more significant than a one million multiple of the lowest income, or approximately $800 million at current levels.
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The National Security and Defense Council will be responsible for maintaining a register of the oligarchs. Even though there is a grace period in the implementation of the law until after the war, it has already prompted several people who could qualify to be branded as oligarchs to adjust their assets or withdraw from political life.
Addressing the EU summit last week, President Volodymyr Zelenskyy urged EU leaders to recognise Ukraine’s progress.
“Even despite the full-scale war, we are not asking for exceptions to the general rules,” he told EU leaders via a video link.
“Ukraine has practically implemented the seven recommendations of the European Commission – both the solutions that were simpler and those that were difficult for politicians. And we are counting on your unity in response to the decision to start negotiations on Ukraine’s accession to the European Union,” he said.
Ukrainians are also demanding an end to corruption
According to a survey titled ” National Corruption Perceptions and Experience Poll 2023,” corruption remains the most pressing issue for Ukrainians, second only to the war. The survey, conducted in the winter of 2023, encompassed three diverse representative samples of respondents. The findings revealed that 89 percent of citizens still viewed corruption as a significant problem, despite the implementation of anti-corruption reforms.
Of particular concern is political corruption, which 81 percent of respondents flagged as the most crucial and severe form of corruption. Although there has been a noticeable improvement in public perception regarding the prevalence of corruption, 94 percent believe it remained pervasive throughout the country.
While old habits die hard, the institutional framework to tackle corruption is in place. The establishment of the National Anti-Corruption Bureau and the Anti-Corruption Prosecutor’s Office has resulted in a growing number of investigations and prosecutions.
Reforms in the judiciary have been implemented to enhance efficiency and independence, exemplified by the creation of the High Anti-Corruption Court. This court has handled a substantial number of high-profile corruption cases, with over 130 verdicts delivered since 2019. In comparison, during the four years prior to the establishment of the High Anti-Corruption Court, the general courts had issued just over 30 verdicts in top corruption cases.
Ukraine’s progress has won praise from European Commission President Ursula von der Leyen. “I’m impressed to see Ukraine undertaking very difficult reforms during a time of war,” she said in a September interview. “If they keep up the momentum – and I see that they are absolutely motivated – this is a crucial moment.”
More needs to be done as Ukraine depends on Western goodwill
Despite these positive strides, anti-corruption reforms have faced significant resistance from the entrenched interests of many politicians. One example is the reintroduction of electronic wealth declarations for officials, which were initially cancelled during the war and reinstated recently at the insistence of Zelenskyy.
Yaroslav Zheleznyak, a lawmaker in the opposition Holos faction, pointed to delays in the implementation of some reforms and still existing gaps in Ukraine’s commitments to the International Monetary Fund, whose monitoring of the reforms is a factor for the EU and Washington.
As an example, he mentioned the officials’ wealth declarations, which were supposed to be made public a couple of months ago but were only voted on for the second time after the presidential veto and other delayed reforms.
Zheleznyak listed bolstering the institutional autonomy of the Specialized Anti-Corruption Prosecutor’s Office (SAPO) as a possible next challenge in the future.
By the end of the year, Ukraine is expected to adopt legislation that enhances the institutional autonomy of the SAPO, focusing on selection procedures, regulatory capacity and mechanisms for discipline and accountability.
IMF benchmarks for Ukraine call for simplifying the asset declaration system by linking it with other databases and registers to ensure public officials’ transparency and obligations to provide truthful and timely submissions.
The IMF also wants Ukraine to review the current Public Investment Management procedures, including procurement and public tenders, as well as rules on Public Private Partnerships.
A major issue blocking Ukraine’s judicial overhaul is an acute shortage of qualified, vetted judges. This reinforces the widespread public criticism of how justice is administered in the country. As many as 2,000 judges are sought to fill vacancies.
Western donors, primarily the EU and the US, contribute nearly half of Ukraine’s budget. Since the war began, the EU, its Member States and European financial institutions have provided assistance to Ukraine totalling over 82 billion euros. This includes humanitarian aid, economic assistance, military aid and support for the well-being of Ukrainian refugees.
The EU plans to provide a total of 19.4 billion euros in assistance to Ukraine until the end of 2023, with 18 billion euros granted through the EU’s Macro-Financial Assistance Package Plus. This funding is crucial for sustaining salaries, pensions and essential public services, as well as reconstructing critical infrastructure damaged by Russia’s aggression.
The EU leaders said at the October summit that the union would continue to provide aid, but the fate of new U.S. funding remains unclear, given the opposition of Republican lawmakers in the House of Representatives. The house must decide the fate of a $106 billion package of aid for Ukraine, Israel and southern border security, submitted by President Joe Biden a week ago.
Ukraine’s poor track record on corruption has been a factor some Republican lawmakers use to justify their resistance to helping Ukraine.
Similar rhetoric is voiced by EU member states who are openly least eager to open the EU accession talks with Kyiv – Hungary and now also Slovakia, under its firebrand new Prime Minister Robert Fico.
Fico has called Ukraine the “most corrupt country in the world” as he headed for the EU summit, and there are some fears he and Hungarian PM Orbán could team up to block the opening of negotiations.
But most EU leaders seem convinced that Ukraine’s accession talks should start before the end of the year, seeing its eventual membership as a strategic objective. Many are aware that rooting out corruption takes more than passing legislation and requires support from allies, time and top-down leadership across the political class.
Other candidate countries from Central and Eastern Europe have struggled with those issues in the past, and some of them have experienced considerable backsliding, which affects their ability to fully capitalise on EU membership.
For Ukraine, reversing its image as a corrupt country is crucial not just from the point of view of its international standing but also for securing vital financial and military aid as it continues to fight Russia’s aggression.
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Published as part of our Future of Ukraine Fellowship programme. Learn more about it here and consider contributing.
The featured image comes from The Presidential Office of Ukraine. All materials featured on this site are licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International and can be found here.
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