One of the problems that 2024 inherited from 2023 is that we need billions of dollars and euros every month from the IMF, the US and the EU. As a consequence, we need to comply with their conditions. One of them is a reboot of the Bureau of Economic Security (BES).
Ukraine has committed to adopt the corresponding bill by the end of June 2024. It has long been developed and is awaiting consideration in the Verkhovna Rada from October 2023.
However, on December 29, the Cabinet of Ministers approved a new bill to reboot the BEB. If the Office of the President pushes it through parliament, it will be more than just a violation of obligations. In fact, this will be an admission that for Bankova, maintaining control over the BEB is more important than good relations with the West.
Why did you need to reboot the BEB?
The history of legislative initiatives on the BEB can serve as a clear illustration of how the policies of Vladimir Zelensky and his office changed in relation to the wishes of Western partners.
Initially, it boiled down to the formula “we can do without you.” The bill on the BEB was introduced by the head of the financial committee of the Verkhovna Rada, Daniil Getmantsev, in July 2020 and adopted in January 2021. It was Bankovaya, together with Getmantsev, who rejected the G7, the European Union and the IMF, who wanted to see a competition for the position of BEB director with the casting vote of international experts. A competition commission was formed of three members appointed by the National Security and Defense Council (that is, Zelensky), and three members appointed by parliament (that is, “servants of the people,” read Zelensky). It is not surprising that the head of the State Fiscal Service, Vadim Melnik, was one of the three finalists of the competition. It was he who was appointed director of the BEB in August 2021 by the Cabinet of Ministers. Of course, it would be naive to expect that such a BEB would be beyond the control of Bankova.
But six months later a big war began. Ukraine's dependence on Western partners and their money has increased sharply. And by the end of 2022, Bankova began to demonstrate its readiness to reboot the BEB, taking into account the wishes of the West.
On December 13, 2022, the Verkhovna Rada created a temporary investigative commission (IIC) to investigate possible violations of Ukrainian legislation by BEB officials. The VSK was headed by Getmantsev's first deputy as head of the parliamentary committee, Yaroslav Zheleznyak (Golos party faction). On February 20, 2023, Getmantsev’s committee recognized the work of the BEB management as unsatisfactory. And on March 3, Getmantsev and Zheleznyak and their co-authors introduced bill No. 9080 to the Rada on rebooting the BEB .
First of all, this project gave control over the competition to Ukraine’s Western partners. The competition commission was to include nine people: two each from the National Security and Defense Council and the Cabinet of Ministers, plus five international experts. The commission's decision would be considered adopted if at least five commission members, including at least three international experts, voted for it.
Not only the director, but the entire electronic battery was subject to reboot. In the explanatory note, Getmantsev admitted that most of the employees of the central office of the State Fiscal Service, who worked under the leadership of Melnik, were appointed to the central office of the BEB. “That is, there was a massive, virtually non-competitive transfer of former tax police employees to the newly created body,” Getmantsev stated. And he emphasized that this “discredits the main idea and goal of eliminating the tax police, which was a radical revision of approaches to methods of working with business.”
According to bill No. 9080, all BEB employees were required to undergo certification within a year. Anyone who refused to undergo certification or passed it unsuccessfully was subject to dismissal.
On March 24, the reboot of the BEB was included in the memorandum on economic and financial policy , which lists Ukraine's obligations to the IMF. True, no specific dates were indicated there. But Getmantsev, in an interview with Interfax-Ukraine, which was published on April 10, promised about the BEB that “ by the end of the year we should completely restore order there ,” including “changes to legislation, and with them carry out certification and appoint a new head with participation of international experts.” On April 11, the director of BEB Melnik was fired, and the need for a new competition under the new law increased.
Reboot reboot
But a quick reboot did not work. It took a lot of time to agree on the BEB reform with Western partners. On June 19, in an updated memorandum, Ukraine announced the creation of a working group to review the legal framework for the activities of the BEB . On September 21, bill No. 9080 was withdrawn, and instead, on September 25, Zheleznyak and Getmantsev and co-authors introduced draft No. 10080. Then, on October 10, Getmantsev introduced a revised draft No. 10080-1, which on October 13 was recommended by the committee for adoption in the first reading.
Compared to project No. 9080, for example, the composition of the competition commission has changed. It should include seven people: three from the Cabinet of Ministers plus four international experts. The decision of the commission is considered adopted if at least four members of the commission, including at least three international experts, vote for it. That is, this project also gives control over the competition to Western partners. And he also talks about a complete reboot of the BEB: all employees of the bureau must undergo certification within a year, and those who refuse to pass or pass unsuccessfully will be fired. The project also describes in detail the recertification procedure.
And then a strange delay occurred. For two and a half months, bill No. 10080-1, already recommended by the committee for adoption in the first reading, lies in the Rada without movement - it is not even included in the agenda of the session. At the same time, the government continues to promise the West a reboot of the BEB.
On December 1, in another memorandum, Ukraine confirmed to the IMF its intention to adopt a new law on the BEB , which “will be aimed at creating a legal framework for the functioning of the BEB with the aim of (I) developing an open, transparent and competitive selection process for management and staff; (II) tightening the requirements for the selection committee; (III) introducing a contract system for employees; and (IV) development of a personnel certification mechanism.” And this is no longer just a promise, but a structural beacon, with a completion date of the end of June 2024.
Let us remind you that a memorandum is not just a piece of paper, but an appendix to a letter of intent. This letter, addressed to IMF Managing Director Kristalina Georgieva, was signed by President Vladimir Zelensky, Prime Minister Denis Shmygal, Finance Minister Sergei Marchenko and Head of the National Bank Andrei Pyshny.
However, on December 29, it turned out that the Ukrainian authorities had prepared a surprise for Western partners and creditors. At its meeting, the Cabinet of Ministers approved its own bill to reboot the BEB .
The first deputy head of the parliament's financial committee, Yaroslav Zheleznyak, claims that the deputy heads of the OP Oleg Tatarov and Rostislav Shurma are behind this bill. “ Another most impudent scam by international partners who directly demand a real reboot of the BEB, and not its imitation. The reaction of international officials and the consequences of such a decision are easy to imagine,” Zheleznyak is indignant. And he predicts: “Well, well, considering that the reboot of the BEB is required by the IMF, the US and the EU... it will be a beautiful suicide .”
The EU Ukraine Facility plan, under which we hope to receive 50 billion euros over four years, also includes a reboot of the BEB, with exactly the same wording and four demands (I), (II), (III), (IV), which the Ukrainian authorities promised to the IMF in a memorandum. And also with a deadline of mid-2024. By the way, the European Council summit to approve the Ukraine Facility is scheduled for February 1, 2024.
“ list of priority reforms ” for Zelensky from Joe Biden, which was transferred to Bankovaya from the White House on September 25, is also known. There is also a clause about BEB: “Conduct an open, competitive and based on professional achievements selection of new management and mandatory re-certification of BEB personnel. Establish a credible disciplinary committee and replace employees who do not meet ethical and professional standards.”
What is the “kidding of international partners” that Zheleznyak is talking about? The people's deputy himself shows this with one specific example - the recertification of BEB employees. “Let me remind you that the reboot of the BES with mandatory real re-certification of workers is a requirement of international experts and a structural beacon of the IMF. We won’t complete it before the end of June and adequately - minus the tranche, problems with the program and finances from other donors.
And here’s what an imitation of recertification looks like in the Cabinet of Ministers version - OP: recertification takes place after martial law is lifted; the procedure is chosen by the Cabinet of Ministers, that is, it can be done “behind closed doors”; All employees who were appointed after the adoption of the law are exempt from recertification. That is, before the end of martial law, they will have time to appoint all the necessary people and keep them in positions. So to speak, feel the difference,” Zheleznyak explained and added: “We are already describing the problem to our partners.”
There is no doubt that not only Zheleznyak is involved in this. There are public organizations that are in close contact with Western embassies. For example, the Anti-Corruption Center also says that “the BEB reform will be blocked, and Oleg Tatarov will retain his control over the body, primarily due to the lack of a procedure for clearing the body of dishonest employees.”
The CPC also emphasizes another danger: “According to the government, international partners are given the opportunity to join the procedure for the competitive selection of the head of the BEB and the right to a preferential vote in this process. But the government provides for such an opportunity for only two years, and the draft does not contain guarantees against the manual dismissal of a leader elected through a transparent competition. This means that after two years the newly elected leader can be fired quite easily .”
While Ukraine's Western partners study the new project, it could quickly become law. The title of the project is “On amendments to the Criminal Procedure Code and other legislative acts to improve the work of the Bureau of Economic Security of Ukraine.” Why is the Code of Criminal Procedure mentioned here? And then, so that the relevant parliamentary committee for this project is not the finance committee, but the law enforcement committee headed by Sergei Jonusas. In this case, there will be no need to create a comedy when Getmantsev’s committee will have to vote for the approval of the Cabinet’s draft, and withdraw its own, already approved, under some pretext.
The Jonusas Committee can quickly make a positive recommendation, after which all that remains is to quickly carry out the first and second readings. Will Western partners be able to prevent this? Not really. Just two weeks ago, on December 21, the Verkhovna Rada quietly elected four new members of the Accounts Chamber, ignoring the G7 ambassadors and Biden's list of reforms , which required an independent and transparent competition on new legislation.
It seems that all these unfriendly gestures towards Western partners indicate that the policy of Zelensky and his office is beginning to return to the original formula “we will manage without you.” Shall we get by?
