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HOT ANTICORRUPTION NEWS / Issue #145
June 28, 2020
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Today's issue:
 
- Kolomoisky uses Constitutional Court as new frontline to attack Privatbank nationalization;
- New Zelenskyi's draft law on judicial reform breaks the promise of reform; 
- 100 days of corruption on COVID-19 related procurements;
- Rebuttal of SBU's arguments on the need to preserve investigative functions in corruption cases;
- New IMF Memorandum secures Anti-Monopoly Committee reform for the first time in Ukrainian history;

- recommended reading
Kolomoisky uses Constitutional Court as new frontline to attack Privatbank nationalization

On June 15, Privatbank won one of the major сases in the Supreme Court that was threatening the stability of Privatbank's nationalisation. However, this only means that Kolomisky intensified his pressure on the Constitutional Court to review nationalisation procedures.

There are three CCU's proceedings that will potentially play in favour of Kolomoisky, namely recognizing unconstitutional Law on Deposit Guarantee  Fund, appealing "anti-Kolomoisky" law, appealing the prohibition to sue NBU by banks' minority shareholders.

On June 25, the Constitutional Court declared unconstitutional a separate provision of the Law on banks and banking, which establishes an exhaustive list of persons entitled to appeal against the decision of the NBU. This decision allows minority shareholders of liquidated banks to appeal the decisions of the National Bank in courts.

Also, after a 4-year break, the Constitutional Court  abruptly renewed its constitutional review of the law on the Deposit Guarantee Fund. On June 30, the CCU will continue consideration of the case. In particular, CCU's decision may threaten the legitimacy of the Fund's decisions on Privatbank. Retrospective recognition of the law on the Deposit Guarantee System as unconstitutional may lead to the recognition of the activities of the Fund illegal, the consequences of which will be devastating for the financial system as a whole. NBU assesses the possible damage at UAH 100 bln.
New Zelenskyi's draft law on judicial reform breaks the promise of reform

On June 22, the President registered draft law No. 3711 on amendments to the Law of Ukraine “On the Judiciary and the Status of Judges” and some laws of Ukraine on the activities of the Supreme Court and judicial governance. According to our analysis, the draft law completely contradicts the commitments to the International Monetary Fund.

The presidential draft law completely gives the formation of the High Qualification Commission of Judges into the hands of the unreformed High Council of Justice. It is the HCJ that will determine the rules of the competition. The draft law also contains provisions concerning the Supreme Court and the Supreme Court of Ukraine. The scandalous provision on the number of judges of the Supreme Court is being removed from the law, now the HCJ will determine such a number by its decision. Judges of the Supreme Court of Ukraine must be enrolled in the staff of the Supreme Court and must pass a qualification assessment within a year.
100 days of corruption on COVID-19 related procurements

On March 11,  a quarantine was enforced in Ukraine due to coronavirus spread. Within 100 days, the epidemiological situation in the country has changed significantly, and the number of sick persons is growing daily. Verkhovna Rada decided to simplify procurement procedure for the purposes of COVID-19 combating, customers were allowed not to hold a standard tender, but to enter into direct contracts with suppliers. 

However, our recent research showed that special procurement procedures during the quarantine period, unfortunately, did not work out and led to the misappropriation of millions in budget funds. Carrying on with this procedure in practice will only contribute to the fact that funds for these purposes will be uncontrollably overspent. 
Rebuttal of SBU's arguments on the need to preserve investigative functions in corruption cases

Today, the Parliament is actively working on the draft law that should reform the Security Service of Ukraine. However, the presidential version, which was prepared by the SBU, fails to deliver real reform. The Service wants to keep broad powers to fight against corruption, organized crime and seeks to remain functions of the law enforcement agency. Although, powers to take cases from other agencies were made up by the SBU for political reasons in order to influence the entire law enforcement system.

New IMF Memorandum secures Anti-Monopoly Committee reform for the first time in Ukrainian history

Ukrainian authorities have made commitments to IMF to strengthen the Anti-Monopoly Committee of Ukraine (AMCU) in line with international best practices. This is the first time AMCU reform is included in the IMF memorandum. The legislation must be adopted to ensure the independence of AMCU. The legislation must ensure the financial and operational independence of the Committee. For more on this please read column by Antitrust League (English translation).

Recommended Reading 
Copyright © *2020* Anti-corruption Action Centre*, All rights reserved.

Should you have any questions or comments please contact Tetiana Shevchuk at tshevchuk@antac.org.ua

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