Review of bills registered and considered from September 18 to October 2.
Over the past two weeks, the website of the Verkhovna Rada registered 58 new bills and 24 draft resolutions. The Cabinet of Ministers initiated only seven bills, while people’s deputies created the rest. We have selected the most important ones for you.
Ukraine has been enduring wide-scale military aggression from Russia for over a year and a half, and it is clear that the sphere of security and defense is the country’s top priority. At the end of September, lawmakers registered and even passed in principle bills amending the state budget for 2023 (bill No. 10038) and the Budget Code of Ukraine (bill No.10037) to increase funding for the defense sector.
The first bill entails an increase in state budget expenditures by UAH 328.5 billion or +10% compared to the current amount (this is above the August inflation rate, which stands at 8.6% year-on-year and close to the projected inflation rate for 2023, namely 10.6%). Of these expenditures:
- Additional expenditures for national security and defense will amount to UAH 302.6 billion.
- The Ministry of Social Policy will receive UAH 16.5 billion for assistance payments to internally displaced persons.
- The Ministry for Foreign Affairs will be allocated UAH 1.3 billion for expanding the diplomatic presence in 10 countries in Africa and the Arabian Peninsula.
The government plans to cover these expenditures through loans and grants from the European Union and international financial organizations.
The second bill proposes to redirect funds (approximately UAH 190 billion) that are currently allocated to the Regional Development Fund, the Road Fund, as well as the Special Fund (excise taxes, fees for the passage of trucks weighing over 12 tons, various fines) to the general state budget fund and use them for financing the security and defense sector. As a result, road repairs are currently being postponed, and the increased funding for strengthening the country’s defense capability and the development of Ukraine’s defense industry complex is expected to bring the country closer to victory.
In martial law conditions, the efficiency of using the state budget funds requires special attention and enhanced control. Furthermore, when grants and loans from international partners cover the majority of non-military expenses of the state, it is crucial to ensure compliance with the transparency requirements of the United States and the European Union and to strengthen the fight against corruption. In particular, the United States emphasizes the need to enhance the work of the Accounting Chamber (AC), establish the functioning of the Bureau of Economic Security (BES), the Asset Recovery and Management Agency (ARMA), the Special Anti-Corruption Prosecutor’s Office (SAPO), etc. Over the past two weeks, several bills related to the operation of these agencies have been registered.
Reforming the Accounting Chamber (bills 10044 and 10045 and their alternatives). The Accounting Chamber (AC) performs several crucial tasks. Firstly, it audits the efficiency of budget funds usage by central executive authorities and extrabudgetary funds and controls the funds transferred from the state to local budgets. Secondly, it analyzes operations related to internal and external borrowing, state guarantees, and settlements for state debt; it tracks the use of loans obtained by the state from foreign states, banks, and international financial organizations; it oversees compliance with international agreements that may have financial implications for the state budget. Bills 10044 and 10045 propose expanding the scope of AC audits to include local budgets and international aid and granting the AC greater political and financial independence (the selection of the AC Chairman and members should take place through open and transparent competitions, and its funding should not be dependent on the government).
Reforming of the Bureau of Economic Security (BES). The authors of project No. 10088 note that BES has not become an effective agency in combating economic crimes. In the span of one and a half years of operation, only 17% of the BES staff has been formed. Out of 2,000 criminal cases initiated by BES, only 54 have reached the courts, with 36 resulting in verdicts and the imprisonment of 1 person. Since its creation, the leadership of BES has not announced any competitive selection for leadership positions, and all unit heads were appointed in violation of the law as temporary acting officials. Accordingly, the bill envisions the re-election of BES leadership with the involvement of international experts. If the draft proposal is adopted, the Cabinet of Ministers must appoint, within five working days from the date it takes effect, an acting Director of BES for no more than six months and create a competition commission within two months to select a new director. In addition, the powers of the First Deputy Director and Deputy Directors of BES will be terminated prematurely, and all BES employees must undergo an evaluation process within a year.
Reforming the Special Anti-Corruption Prosecutor’s Office (SAPO). The proposals (bills 10060-1 and 10060-2) concern competition rules for the positions of the SAPO head, deputies, and prosecutors, specifically increasing the role of civil society and international organizations in selecting SAPO leadership. It is proposed to include in the composition of the competition commission individuals designated by the Verkhovna Rada (3 individuals), the Prosecutors’ Council (2 individuals), and the Prosecutor General based on recommendations from international and foreign organizations in the field of corruption prevention and counteraction (5 individuals). Currently, the commission comprises four individuals designated by the Prosecutors’ Council and seven individuals appointed by the Verkhovna Rada. In addition, the bill proposes the formation of the Commission for External Independent Evaluation (audit) of the effectiveness of SAPO’s activities, along with other changes.
Combatting corruption. Bill No. 10100 allows for removing the statute of limitations for particularly serious corruption offenses and does not limit the investigation period for corruption cases. It also restricts the number of defenders for a suspect during pre-trial investigations to five individuals. Currently, there can be an unlimited number of defenders, often leading to abuses and delays in case proceedings. These changes were developed based on the Organization for Economic Cooperation and Development (OECD) recommendations. The adoption of this bill will contribute to ensuring the certainty of punishment for corruption crimes.
Another government proposal is to ratify the Agreement with the OECD on joining the Working Group on Bribery in International Business Transactions. This is a necessary prerequisite for becoming a member of this organization. After the first two years as a participant, the Working Group assesses the compliance of Ukrainian legislation, policies, and practices with OECD standards. Based on the results of this assessment, a decision is made on granting full membership in the Working Group. Cooperation with the OECD in preventing and combating corruption is crucial for the activities of national anti-corruption agencies, the development of their institutional capacity, and the enhancement of the professional skills of their personnel.
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