Important Draft Laws. Issue 34: Competitive Selection for ARMA and KPIs for Customs and Tax Authorities

During this period, 29 draft laws were registered: 8 by the government and 21 by MPs. Among the legislative initiatives are simplifying procedures for writing off military property, rotation of military-medical personnel, and permission for students under 24 to travel abroad. Additionally, people’s deputies propose changes to the competitive selection process for ARMA with the involvement of experts from international organizations and the establishment of performance indicators for customs and tax services. Read more about this and other topics below.

Law on “rebooting” ARMA

Bill No. 12374 proposes updating the management approaches of the National Agency for the Detection, Tracing, and Management of Assets Derived from Corruption and Other Crimes (abbr. Asset Recovery and Management Agency or ARMA) by legislatively establishing guarantees for ARMA’s independence, changing the processes for selecting leadership and staff, enhancing public oversight, and creating an internal security department. 

Currently, the composition of the selection commission for the ARMA head includes three representatives from the Verkhovna Rada and one each from the Prosecutor General, NABU, the Ministry of Finance, the Ministry of Justice, and the State Financial Monitoring Service. The bill proposes a six-member commission, with three representatives from the Cabinet of Ministers and three appointed by the government based on recommendations from international partners providing technical assistance to Ukraine in combating corruption. 

The bill establishes new requirements for candidates for the position of ARMA head. In addition to meeting integrity and professional competency criteria, each candidate must submit a motivation letter outlining their vision for ARMA’s development. The selection commission would evaluate the documents submitted by the candidates and assess their knowledge of legislation, professional competencies, and integrity based on available data, including financial declarations and lifestyle analysis. After an open vote, the commission would shortlist two candidates, from which the Cabinet of Ministers would select the final appointee (currently, the commission nominates a single candidate). 

Members of the selection commission and their assistants would have extensive tools to verify candidates during the competition, including special access to state registries, restricted-access information, and the ability to request clarifications from candidates. At the same time, they would be obligated not to disclose non-public information, including the personal data of the candidates. 

The bill adds new grounds for dismissing the ARMA director, including the presence of a conflict of interest that cannot be resolved in any other way and failure to comply with the law on preventing corruption (e.g., failure to submit a declaration or a court ruling confirming the possession of unjustifiable assets). 

The current law mandates an annual independent evaluation of ARMA’s activities by an external oversight commission of three members appointed by the President, the Verkhovna Rada, and the Cabinet of Ministers. Commission members must have at least ten years of experience in law enforcement or international organizations and an impeccable professional reputation. They are granted access to ARMA documents, the authority to conduct confidential interviews, and the ability to issue recommendations based on the evaluation results. 

Bill 12374 proposes that ARMA’s activities be evaluated one year and three years after the appointment of a new head. Instead of the existing external oversight commission, an independent external evaluation commission of three members would be established, with its composition determined by the Cabinet of Ministers based on recommendations from international partners (members of the commission would be required to have experience in law enforcement or anti-corruption efforts, possess an impeccable reputation, and meet integrity criteria). The commission would evaluate the agency’s and its head’s effectiveness. A negative conclusion would allow the government to terminate the head’s powers. The commission would need to be established, and work would commence within a month after the bill’s adoption.

According to the bill, the newly appointed ARMA head would have the authority to appoint their deputies, while other staff would be selected through competitive procedures. To facilitate this, the head of the agency would create selection commissions, approve evaluation methodologies, and define the commissions’ operational procedures. Each selection commission would consist of five members, with at least two nominated by assemblies of representatives from public organizations experienced in anti-corruption, law enforcement reform, or human rights protection, and another two nominated by the agency’s Public Council.

The head of the National Agency would organize the assemblies of representatives from public organizations. Announcements about the assemblies must be published on the agency’s website 10 days in advance, specifying the time, place, and number of vacant positions in the selection commissions. Public organizations eligible to participate must submit an application and documentation (copies of their charter, project implementation reports, recommendation letters from international partner organizations, etc.) proving their activities in the specified areas over the past five years. The head of the agency would decide on participation eligibility within 10 days, and the list of approved organizations would be published on the agency’s website.

The assemblies would be considered valid with the participation of at least five public organizations, each delegating one representative. During the assemblies, candidates for commission membership and reserve members would be selected in case of early termination of the main members’ powers. The assembly’s protocol would be submitted to the head of the agency for approval of the commission’s composition. 

Although the total number of commission members is five, the commission would be considered valid if it included at least four members. This ensures the commission’s functionality in cases where one member is temporarily unable to participate in meetings or their powers are terminated prematurely. In such instances, a reserve member from the approved list may be included in the commission. 

To secure employment at ARMA, candidates would need to pass a test on legislative knowledge and an interview to assess their professional competence. 

The bill proposes that the Public Oversight Council, appointed by the Cabinet of Ministers following online voting and consisting of nine members, be considered valid if it includes at least seven members. The bill also seeks to restrict eligibility for council membership, prohibiting, for example, former ARMA employees, relatives of ARMA staff, civil servants, and others from running for the Council. At the same time, the Council’s powers would be significantly expanded. Its representatives would be allowed to participate in selecting asset managers, serving on commissions for recruiting ARMA staff, monitoring the effectiveness of asset management, and more. 

The bill also envisions the creation of internal security units within ARMA at both central and regional levels. Employees of these units would investigate conflicts of interest, conduct internal investigations, protect whistleblowers, and report any discovered information on potential misconduct by ARMA staff to anti-corruption agencies. These units would also have the authority to use polygraphs during investigations. 

Assessment of tax and customs efficiency

Bills Nos. 12359 and 12360 would introduce a system for assessing the efficiency of tax and customs authorities. They would amend Ukraine’s Tax and Customs Codes by adding articles that define key performance indicators (KPIs) and mechanisms for achieving them.

Reports on the achievement of performance indicators would be published on customs and tax authorities’ websites.

Establishing a system of war risk insurance in Ukraine

Currently, war risk insurance in Ukraine is provided by the Export Credit Agency (ECA), the Multilateral Investment Guarantee Agency (MIGA) under the World Bank, the U.S. International Development Finance Corporation (DFC), and export credit agencies from other countries for companies that are residents of those respective countries. Some insurance companies also provide coverage for private property. 

However, the range of available insurance products and the scope of coverage are very limited. To address this, Bill No. 12372 proposes creating an additional three-tier system for war risk insurance. The first tier would consist of insurers authorized by the State Agency for War Risk Insurance, which meet the National Bank of Ukraine’s requirements for insurance companies. The second tier would be the above-mentioned state agency, with the government owning at least 50% + 1 share, while international organizations would own the remainder. The agency’s statutory capital would amount to just UAH 48 million, but it could attract funding from international organizations and private sources. The agency could reinsure contracts of authorized insurers, sell standardized insurance products through intermediaries, and receive state guarantees to cover losses. The agency would reinsure its risks on the international market.

War risk insurance would be mandatory for objects pledged as collateral or mortgaged to banks and for construction or major renovation projects, except those located in frontline areas or already insured under other programs. Additionally, other objects could be insured voluntarily. This means that if an individual could not insure a specific object through a private company, they would still have the option to purchase one of the standardized insurance products from the State Agency. The State Agency would be expected to commence operations in September 2025.

Rotation of medical personnel: new rules for those eligible for military service

Bill No. 12362 proposes introducing a rotation mechanism for medical workers as an alternative to their general mobilization. Medical institutions would be required to form a reserve of medical personnel from among those eligible for military service, with specific guidelines to be developed by the Ministry of Health. Individuals from this reserve could be deployed for 3–6 months to serve as military doctors near the frontline. During this period, their jobs, rights, and benefits would be preserved, and they could not be mobilized under general provisions. Moreover, after completing a six-month service, a medical worker could be exempted from further military service and would not be eligible for another rotation for at least a year. Female medical workers would have the option to participate in the rotation voluntarily. 

This bill addresses the shortage of medical personnel in the armed forces. 

Changes in military property management

Bill No. 12373 introduces changes to the rules for writing off military property, which is especially significant under martial law. Currently, writing off property lost during combat requires an act approved by the commander of the relevant military branch. Property valued at less than UAH 1.7 million can be written off by order of a unit commander, who is then required to investigate the causes and circumstances of the loss. The bill proposes removing the requirement for mandatory investigations if the property is lost or damaged due to enemy actions or during combat missions. It also eliminates compulsory investigations when officials’ actions result in the loss or damage of military property, leaving unclear how responsibility for such losses would be determined.  

Additionally, the bill allows the Security Service of Ukraine (SBU) to write off its military property according to procedures developed by the agency itself rather than under government regulations, as is currently the case. 

Clarification of evacuation rules from combat zones and penalties for violations

Bill No. 12353 clarifies the procedure for designating areas where population evacuation must occur. These are settlements located in regions of active or potential hostilities. In peacetime, the General Staff of the Armed Forces of Ukraine would predefine areas of possible military operations from which people, material assets, and cultural valuables would need to be evacuated. During martial law, evacuation in designated areas would be mandatory (with fines introduced for entering or staying in these areas) for the population of such territories. Evacuations could be general or partial, targeting specific groups such as children, older people, and persons with disabilities. Military administrations would make decisions on evacuations based on proposals from military command. For children, forced evacuation could be implemented by the police and child welfare authorities. 

After the end of hostilities and the establishment of safe conditions, military administrations issued permits for the population to return. Evacuated individuals were entitled to temporary housing and the protection of their rights in accordance with the law on internally displaced persons. 

Bill No. 12354 establishes fines (UAH 510-850, and for repeat offenses–UAH 1700-3400) for entering or staying in settlements where a mandatory evacuation occurs without special passes or permits. 

The bill also stipulates penalties for violating curfew–staying on the streets or in other public places during restricted hours without permission. The fine would range from UAH 850 to UAH 1,700. A repeat violation within a year could go up to UAH 3,400. These fines would not apply to individuals heading to shelters, providing medical assistance, escorting the wounded, or involved in evacuation efforts. 

Permission for students to travel abroad during martial law

Bill No. 12361 proposes allowing Ukrainians under the age of 24 studying abroad full-time to leave Ukraine during martial law. They must present their educational documents and military registration papers at the border.

Recognition of education obtained abroad

Bill No. 12375 allows for recognizing education obtained by Ukrainians abroad (excluding aggressor countries). This would apply to formal education (schools, universities) and informal education (courses, training). The government would determine the specific procedures for this process.

New rules for displaying prices on goods

Bill No. 12358 indicates the price per unit of product on price tags. This means sellers must demonstrate the final price (including VAT and excise) per kilogram, liter, meter, or square meter. In other words, the price per unit of the product would also be listed alongside the package price. This would make it easier for consumers to compare product prices in different package sizes. The font size for the unit price would have to be at least half the size of the font used for the product price. The requirements would not apply to services, auctions, artwork, and antiques. The document aligns with European standards (Directive 98/6/EC).

Opening access to restrooms in stores and other service establishments

Bill No. 12371 proposes amending the consumer protection law to include a provision guaranteeing the right to use restrooms for free in stores, restaurants, cafes, hair salons, fitness centers, and other service establishments. This would apply only to places where regulations require restrooms and where they actually exist. Entrepreneurs would be prohibited from denying access to restrooms if a person has not used their services. However, free access could be restricted if the entrance to the establishment is fee-based.