Another Specialized Prosecutor's Office — This Time Economic. Analyzing the Draft Law

Another Specialized Prosecutor’s Office — This Time Economic. Analyzing the Draft Law

Photo: unsplash.com / Scott Graham
18 April 2024
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On March 15, people’s deputies registered Bill No. 11087 in the Verkhovna Rada to establish a Special Economic Prosecutor’s Office (SEPO) as a separate and independent subdivision of the prosecutor’s office. Why was there a need for the creation of the SEPO, and will it improve the situation with investigations and punishments for economic crimes?

Why is a specialized economic prosecutor’s office needed?

The draft law proposes creating a separate autonomous subdivision of the prosecutor’s office (similar to the Specialized Anti-Corruption Prosecutor’s Office) to oversee criminal proceedings related to the Economic Security Bureau, thereby addressing economic crimes. The head of SEPO would be the deputy prosecutor general.

The draft law complements the reform of the Economic Security Bureau (ESB), which we discussed earlier. Just as the effective operation of the National Anti-Corruption Bureau (NABU) requires an efficient and independent Specialized Anti-Corruption Prosecutor’s Office (SAPO), the quality operation of the ESB requires an independent economic prosecutor’s office. It would handle cases investigated by the ESB in court (hopefully, the ESB reform, which will make it an independent investigative body rather than a “whip” in the hands of the President’s Office, will eventually be adopted).

The bill’s authors point out that a tiny percentage of individuals (5% in 2023) under investigation for economic crimes actually receive a notice of suspicion, and only a handful of cases make it to court. Of course, until the ESB operates properly, it is difficult to say whether it is the fault of the ESB or the prosecutors who close cases opened by the Bureau. However, if ESB-investigated cases are overseen by an independent prosecutor’s office with the appropriate expertise (and the ability to overturn unlawful and unjustified decisions made by ESB detectives), we can expect greater effectiveness in investigating economic crimes. This means honest entrepreneurs can sleep peacefully, while dishonest ones cannot.

What does the draft law entail?

The majority of changes proposed by the bill are to be made to the “Law on the Prosecutor’s Office,” namely by adding Article 8-2, which essentially mirrors Article 8-1, introduced in this law in 2015 to establish the Specialized Anti-Corruption Prosecutor’s Office. Specifically:

  • Like the SAPO prosecutor and their deputies, the SEPO prosecutor and deputies would be selected by a commission of three individuals designated by the Council of Prosecutors of Ukraine and three by international organizations. The Prosecutor General must appoint one of the two candidates identified by the commission within ten days.
  • The head of the SEPO would be a deputy prosecutor general, just like the head of the SAPO. However, the Specialized Economic Prosecutor’s Office would have a significant degree of autonomy, similar to the SAPO. The SEPO head would approve the staffing and budget, appoint and dismiss SEPO prosecutors, and allocate cases among them.
  • A commission conducting an audit of the SAPO’s activities would also audit the SEPO every two years, but not more than twice within the SEPO head’s five-year term of office. Based on the audit results, the SEPO head may be dismissed.

The total number of SEPO employees would amount to 15% of the maximum number of employees in the ESB, which is 600 individuals. For the NABU, the proportion is similar, but since the NABU’s staff is four times smaller than that of ESB, the number of SAPO employees should be up to 150 individuals. However, after establishing both the SAPO and SEPO, the maximum number of prosecutors and other staff of the prosecutor’s office would remain unchanged — 10,000 and 5,000, respectively. The maximum number of SEPO employees would only constitute 4% of the maximum number of prosecutor’s office employees, so setting up SEPO as a separate unit is unlikely to significantly affect the work of the prosecutor’s office.

The differences between the provisions regarding the SAPO and the proposal for the SEPO are as follows:

  • Article 8-1 describes the mechanism for considering disciplinary complaints against SAPO prosecutors and the specifics of investigating corruption crimes committed by SAPO prosecutors. There is no corresponding provision for SEPO—apparently, complaints against its prosecutors would be handled according to general procedures.
  • Additionally, the proposed Article 8-2 does not include a description of the SEPO audit commission. However, since this is the same commission auditing the SAPO, its operation’s principles would evidently be the same.
  • There are slight differences in the proposed salary payment scheme. In the SAP case, employee salaries are tied to those at the NABU which, in turn, are tied to the subsistence minimum (SM). Since the law on the ESB does not include a link between salaries and the subsistence minimum (it only establishes that the salary of ESB employees cannot be less than three times the salary of civil servants at comparable positions in the central executive bodies), the draft law proposes such a link for the SEPO. Specifically:
  SAPO SEPO
SM UAH*** SM UAH***
Head 60 181,680 75 227,100
First Deputy Head and Deputy Head of the Prosecutor’s Office 42 127,176 60 181,680
Department Head 39 118,092 45** 136,260
Deputy Department Head 39 118,092 42** 127,176
Division Head 37.5 113,550
Deputy Division Head 35.1 106,283
Central Office Prosecutor 33 99,924
Prosecutor 30* 90,840 40 121,120
Civil servants Four times the official salary of employees occupying respective positions in the central executive bodies

* The salary of a SAPO prosecutor cannot be lower than the official salary of the head of a structural unit of the central office of the NABU responsible for pre-trial investigations. According to the law of the NABU, the salary of the head of the detectives’ unit should be 30 times the subsistence minimum.

** The draft law only specifies the division head’s and deputy head’s salaries without specifying the units.

*** Considering the subsistence minimum (SM) for non-disabled individuals as of January 1, 2024, which is UAH 3,028 UAH.

Additionally, SEPO employees would receive corresponding allowances and bonuses.

Will creating the SEPO solve the existing problems?

In theory, the Economic Security Bureau and the Specialized Economic Prosecutor’s Office should work effectively together in a way that the ESB investigates economic crimes, and the SEPO represents the prosecution in court and works to ensure that criminals are punished. If both the ESB and SEPO accumulate the necessary expertise, it will increase the effectiveness of investigating and punishing economic crimes. The draft law on the SEPO considers the shortcomings the SAPO experienced during its establishment (dependence on the Prosecutor General, particularly in determining the number of staff and budget, the possibility of sabotaging leadership appointments, etc.) These shortcomings were resolved at the end of 2023 with the assistance of Ukraine’s international partners.

However, despite the objections of both G7 ambassadors and civil society, the government is attempting to retain a convenient ESB. Therefore, delays in adopting this draft law can be expected. Even if passed, close attention will need to be paid to the selection process and those recruited to the Specialized Economic Prosecutor’s Office because even the best legislation could be sabotaged if there is a desire to do so.

Authors

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The authors do not work for, consult to, own shares in or receive funding from any company or organization that would benefit from this article, and have no relevant affiliations