Parliament & Economy of Ukraine, Issue no. 42

Editor's Note: This is the 42nd issue of Ukrainian lawmaker Yaroslav Zelesnyak's weekly “Ukrainian Economy in Brief” newsletter covering events from February 5-11, 2024. The Digest highlights measures taken in the Ukrainian Parliament on business, economics and international finance. projects.

This is the first time it has appeared in the Kyiv Independent. Kyiv Independent reprints with permission.

IMF benchmarks in focus

The Committee on Fiscal, Taxation and Customs Policy will submit revised drafts of the Bureau of Economic Security Reforms.

The Committee on Fiscal, Tax and Customs Policy on February 12 submitted a draft law to relaunch the Bureau of Economic Security as an alternative to Cabinet of Ministers Draft Law #10439.

The committee's draft law #10088-1 is based on the text of the draft law, which was supported by prominent Ukrainian business associations, experts and anti-corruption NGOs.

The new draft law was revised in cooperation with experts from the Anti-Corruption Action Center, the International Development Law Organization, business associations and Ukraine's international partners.

Also, the committee will submit the alternative draft law with amendments to the Criminal Procedure Code to the Cabinet of Ministers.

The alternative draft law aims to ensure additional protection of business interests during searches, seizure of assets and other procedural actions, as well as to reduce the illegal pressure of pre-trial investigative bodies and prosecutor's offices on business.

An investigator from the Economic Security Bureau on January 4, 2024. (Bureau of Economic Security of Ukraine / X)

The Council of Business Ombudsmen of Ukraine criticized the government's draft law on BES reform.

Roman Vasuk, the Business Ombudsman of Ukraine, spoke against the draft law #10439 on the Bureau of Economic Security (PES) submitted by the Cabinet of Ministers.

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During a podcast hosted by the Center for Economic Strategy, Mr. Waschuk criticized the rule requiring representatives of Ukraine's commercial ombudsman to participate in all BES searches.

He said the presence of business ombudsmen deputized the council's right to consider the legality of the search process. Moreover, the Commercial Ombudsman Council does not even have sufficient staff to implement such an arrangement.

Mr. According to Vasuk, the Commercial Ombudsman Council sent a negative assessment of the draft law to the Prime Minister, the Justice Minister and the Ministry of Economy. However, the Cabinet submitted its draft law #10439 with this provision anyway.

World Bank priorities

The Office of the President withdrew the draft law on financial markets from the agenda of Parliament.

Last week, Ukraine's parliament, the Verkhovna Rada, had only two full days instead of the planned three. As a result, lawmakers did not have time to consider two draft laws from the World Bank's Development Policy Loan (DPL).

The two draft laws are Draft Law #5593-d on State-Owned Enterprise Management Reform and Draft Law #9266 on Electronic Crop Receipts.

Parliament also had to consider Draft Law #5865 to strengthen the independence and institutional capacity of the National Securities and Stock Market Commission (NSSMC) in line with the principles of the International Securities Commissions (IOSCO).

However, the draft law was withdrawn from Parliament as per the request of the Deputy Chairman of the Office of the President. The President's Office opposes the rule of appointing NSSMC members based on competitive examination results.

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Ukraine's Defense Minister Rustem Umerov attends the Verkhovna Rada as lawmakers vote on the first reading of a government bill in Kyiv, Ukraine, February 7, 2024. 243 people's representatives supported the draft law on mobilization. (Andrii Nesterenko/Global Images Ukraine via Getty Images)

Other key economic issues

President signs draft laws to extend martial law and general mobilization in Ukraine. Martial law was extended for another 90 days from February 14 to May 13.

The Verkhovna Rada adopted the new Cabinet of Ministers' draft law on mobilization in the first reading.

Draft Law #10449 received 243 votes (minimum of 226 required). The draft law was adopted on first reading without proposals from the Committee on Safety and Security.

Lawmakers have until February 21 to submit their amendments. Most likely the draft law will be considered and adopted in the second reading in the last week of February (Feb. 22-24).

That means it was signed in early March and will come into effect in a month, April.

The temporary investigative commission on economic security of the Verkhovna Rada of Ukraine will resume its work.

On February 9, at the Parliamentary Committee on Finance, Tax and Customs Policy, the first deputy chairman of the committee, Yaroslav Zelesnyak, held a meeting on „Where to find more money for the Ukrainian state budget.”

More than 50 participants from major business associations in Ukraine, professional NGOs and foreign embassies (especially G7 members) took part in the meeting.

The problems of illicit markets and ways of solving them are discussed using concrete examples, particularly in illicit tobacco, alcohol and fuel markets.

The primary focus of the conversation was the unsatisfactory performance of the Bureau of Economic Security (BES) and other law enforcement agencies.

Business associations and experts reiterated the importance of fighting the shadow economy sector, which in some markets, unfortunately, continues to grow.

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In addition, the community emphasized the importance of restarting the BES and improving the work of law enforcement agencies, as well as restarting the State Customs Service.

Yaroslav Zelesnyak and his colleagues have already submitted to parliament a resolution to launch a new ad hoc investigative commission on economic security to address all issues.

Last year's work will be continued to address the above issues. Additional topics will be addressed, including the implementation of Ukraine's obligations within international financial programs and increasing the efficiency of managing state assets.

The case against the investment banker points to increasing state pressure on business in Ukraine

Ukrainian investment banker and chairman of Kyiv-based Concord Capital, Ihor Mazeba, was arrested on January 18 in connection with a 2014 case against the businessman for allegedly illegally acquiring land for a cookie-cutter housing development in 2013. State Bureau of Inv…

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