Ukraine’s Battle with Corruption Requires an Allied Approach

Kyiv has implemented many institutional changes to fight corruption, but to defeat if requires help from the West

11 August 2023

Tetyana Oleksiyuk

Future of Ukraine Fellow

Ukraine is making significant strides to fight corruption on the domestic front, but it requires support from Western allies to make the necessary systemic changes which could have a massive impact on the country.

Unfortunately, the word corruption is now very often used in the context of discussing processes in Ukraine.

The 2005 and 2014 Revolution of Dignity events strongly emphasised the Ukrainian people’s determination to break free from Russia’s influence and combat corruption. But is it possible for Ukraine to overcome this problem at the national level?

Scope of corruption

Amidst the Russian invasion and the ongoing struggle against corruption, the Ukrainian people seek allies to provide much-needed assistance and expertise in implementing effective anti-corruption measures. The situation is influenced not solely or predominantly by the weakness of Ukrainian institutions but also by various objective factors.

Corrupt officials and oligarchs, including Ukrainian ones and those from other post-Soviet states, have chosen Europe as a safe haven for their money and families. By despoiling their own countries and transferring the funds abroad, they leverage this influence to manipulate political processes in ways that serve their own interests within their countries, beyond the control of their society and anti-corruption bodies.

This is a mechanism of avoiding responsibility, which is why corrupt officials feel impunity and can be even more brazen. Ukraine must have the ability and legal tools to get them out.

Indeed, numerous corruption scandals in Ukraine make it seem like things are not becoming better, but we should not be so categorical.

Ukrainians are doing their homework, as the country has adopted modern and progressive legislation on anti-corruption, access to official information, and whistleblower protection. The rebuilding of Ukraine should be free from oligarch influence, as Bloomberg highlighted.

Progress with limitations – Ukrainian efforts

Anti-corruption agencies have been established and are now operating, bringing cases and conducting investigations against high-level officials.

The fight against corruption in Ukraine is the highest priority for all stakeholders because it is about the country’s survival in wartime. On 23 June 2023, at a meeting of the National Security and Defense Council of Ukraine, the issue of how to overcome manifestations of corruption in the justice system was discussed, and the relevant President’s Decree was adopted.

Ukrainian non-governmental organisations and journalists play a crucial role in the fight against corruption by actively engaging in efforts to uncover corrupt practices and sparking public discussions on the issue. Through investigative reporting and advocacy, they shine a light on corruption’s detrimental effects on society, encouraging transparency, accountability and public pressure for meaningful reforms.

Schemes: Investigating Ukraine (media project by Radio Free Europe and Radio Liberty),  Transparency International Ukraine and Ukrayinska Pravda regularly provide anticorruption investigations.

In the last six months alone, the Supreme Court Chief Justice and the ex-head of the State Property Fund have been indicted. Yet, is Ukrainian justice capable of reaching corrupt officials and holding them accountable for their illicit gains? They hide outside Ukraine, avoiding interrogation and using their money and connections to obstruct investigations.

As reported by the popular Ukrainian online publication “Ukrainian Pravda”, Dmytro Sennychenko, the former head of the State Property Fund and also a fugitive and a defendant in the National Anti-Corruption Bureau of Ukraine (NABU) case on misappropriation of 500 million hryvnias of state funds (approximately $13.5 million), registered a company in Valencia, Spain in December 2022.

From a national perspective, numerous efforts have been undertaken. The Specialized Anti-Corruption Prosecutor and the National Anti-Corruption Bureau of Ukraine (state bodies created based on initiative and supported by the EU and USA) report that in 90 per cent of anti-corruption criminal proceedings one or more suspects are located abroad, and in numerous cases, anti-corruption bodies encounter refusals for extradition.

The aforementioned evidence indicates that Ukrainian anti-corruption bodies are making positive strides, demonstrating progress in the country.

Need for international coordination efforts

Similar to the military events in Ukraine, combating corruption necessitates collective efforts from the entire European community; addressing this issue solely within Ukraine would not yield significant results. Just as on the front line, where Ukrainians realise that it is impossible to confront the empire without the comprehensive support of our European allies, the fight against corruption must become a common European goal. And this understanding has to find its way into the minds of Europeans.

This is not an infantile expectation of Ukrainians that Europe and Europeans will take on the responsibility and work to fight corruption. It is virtually only possible to defeat corruption by creating alliances and allies, and it is a mistake to assume that in today’s globalised world, corruption can be defeated by the efforts of one country alone.

An example is the area of financial monitoring, which is designed to prevent corruption by controlling questionable financial transactions. Ukraine has adopted comprehensive and massive legislation that meets high international standards, but the financial monitoring measures have yet to yield the expected great results.

By developing legislation and knowing how to make it ineffective, corrupted top officials benefit from the failing system. One of the ways to make legislation ineffective is to complicate it, confuse it and provide for many exceptions, which can only be navigated by those with powerful legal departments and funds.

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This also includes transferring public functions to private players, and ignoring conflicts of interest, for example, when banks, lawyers and notaries are obliged to perform the state’s function of monitoring transactions that carry corruption risks. These mechanisms do not lead to tangible, practical results in the fight against corruption, but they distort economic processes and slow economic growth. At the same time, it will be challenging to find an example when a top corrupt official has any problems with financial monitoring while keeping their assets in European countries.

As for the Western countries’ contribution, extradition is merely the tip of the iceberg. The more significant concern lies in the ease with which corrupt officials can relocate their centre of interest abroad.

Despite the implementation of financial monitoring regulations and anti-money laundering measures, they manage to invest in real estate, transfer their families and funds, and ultimately find a safe haven for themselves and their ill-gotten assets obtained through corruption. Obtaining citizenship abroad becomes one of their most effective means to evade accountability.

A crucial example is France’s refusal to fulfil the Ukrainian request for the extradition of Kostyantyn Zhevago, one of the most influential Ukrainian oligarchs. He was arrested at the request of Ukraine, which wants him over the disappearance of $113 million from the now-bankrupt lender Finance & Credit Bank. France stated that the reason for the refusal was based on the court’s determination that the case against Kostyantyn Zhevago was politically motivated.

However, it is inevitable that cases involving top officials or oligarchs could easily be perceived as politically motivated, considering their significant political influence. A crucial indicator of progress could be the increase in investigations, media reports exposing corruption and the extradition of officials involved in corruption cases.

Still, higher-level changes are also needed. It is crucial to initiate a dialogue among European states concerning the establishment of relevant policies and regulations, fostering an environment of intolerance towards money of questionable origin and its beneficiaries. These developments signify that anti-corruption efforts are effectively making an impact.

Avoiding pitfalls of misconception

Another important point should be emphasised: it is a mistake to believe that corrupt money brought to Europe by corrupt officials from the former Soviet Union positively impacts the European economy.

On a European scale, this is not a robust investment that could affect GDP growth, but instead, it provokes price increases because the owners of such corrupt money enter the same real estate and service markets as ordinary European citizens.

Corrupt officials rarely invest in innovative and systemic businesses, choosing businesses that generate passive income, so corrupt money distorts economic processes rather than promotes sustainable economic growth.

And what’s worse, these newcomers bring their corrupt practices to European society. For example, this has already been realised in the UK, where they have begun to fight against the influx of corrupt money into their countries by introducing restrictive measures on permanent residence and the purchase of real estate by corrupt officials and their families.

A straightforward and effective approach would be to unconditionally extradite corrupt officials and their assets to Ukrainian law enforcement agencies. Ukraine has the necessary safeguards against human rights violations – it is a member of the Council of Europe and has ratified all the necessary conventions guaranteeing suspects the right to a fair trial.

There should also be simple procedures for seizing foreign assets of corrupt officials, for which a declaration by Ukraine should be sufficient. Europeans should not have to protect corruptly acquired property, as this is neither beneficial for them nor for Ukrainians if the fight against corruption in Ukraine is to be achieved.

Europeans have already realised that, for example, fighting for human rights or promoting sustainable development is not a task for one country but for the entire European community. It is time to apply this standard to fighting corruption.

In summary, it is crucial to introduce effective mechanisms that prevent top officials from obtaining immunity abroad to evade accountability for corruption. Public office should entail inherent responsibility, and those unwilling to bear it should not assume such roles. Relocating assets, families or obtaining foreign citizenship must not serve as a means to avoid responsibility. International cooperation is essential to ensure other countries do not become safe havens for corrupt officials and their illicit funds, and to discourage such practices. Establishing robust mechanisms that hinder attempts to escape accountability is vital in the fight against corruption.

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Published as part of our Future of Ukraine Fellowship programme. Learn more about it here and consider contributing.

Tetyana Oleksiyuk

Future of Ukraine Fellow

Tetyana Oleksiyuk is a Future of Ukraine Fellow as well as a researcher, lecturer and advisor on national legislation and international standards related to access in the information sphere. Her work has significantly contributed to improving access to information legislation and administrative practices in Ukraine by collecting information from various sources. She is an active advisor to key stakeholders, including the Ombudsperson, Council of Europe, UNDP, representatives of official authorities, the Supreme Court of Ukraine, and civil society organisations.

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