Court overturns bill punishing fraudulent e-declarations

The Constitutional Court of Ukraine adopted a ruling
on Oct. 27 that is likely to have overturned legislation establishing criminal
punishment for public officials filing fraudulent electronic declarations on
their assets and income, Interfax-Ukraine reported that day, citing its sources
in the court. The ruling may have also affected numerous items of
anti-corruption legislation approved in recent years to meet IMF and EU requirements,
the pravda.com.ua news site reported that day. Among them are legislation (1)
requiring annual electronic declarations of assets and income, (2) defining the
conditions of illegal enrichment and the confiscation of assets gained by such
corruption, and (3) establishing the authority of the National Agency on
Corruption Prevention to review and monitor lifestyles, among other items.

The court itself only reported that it has adopted a
ruling on the case, which will be published later. Its judges received the
draft of the complaint only on the morning of the ruling, “which didn’t even
happen under Yanukovych,” reported journalist and blogger Serhiy Leshchenko. It
was initiated in August by 47 MPs, representing the Opposition Platform For Life
party, loyal to Russian President Putin, and the For the Future group of MPs,
loyal to billionaire Ihor Kolomoisky.

In response to the ruling, President Zelensky said he
will use his right to submit legislation to parliament to renew the “stable and
maximally effective” work of the system of e-declarations and the
“irreversibility of responsibility” for the deliberate violation of these
rules. “Ukrainian officials and MPs will continue to declare their assets and
revenues, while anti-corruption bodies will have the necessary authority for
their review and prosecuting violators,” he said, according to his press
service. The president’s representative to the court, Fedir Venyslavskiy, said
the ruling was adopted with procedural violations, stressing that the judges
should have received the draft of the complaint three days in advance. He also
said there may have been conflicts of interest.

Indeed, the National Agency on Corruption Prevention
questioned the objectivity of the ruling, as at least two judges of the court –
Serhiy Holovatiy and Iryna Zavhorodnia – were found to have filed inaccurate
electronic declarations and therefore would have a conflict of interest in
deciding on the law’s validity. At the same time, it’s not yet confirmed
whether they participated in the ruling, though Leshchenko reported that
Zavhorodnia did, while Holovatiy didn’t. “The review of the case by these
judges would cast doubt on the objectivity of the Constitutional Court’s
decision. And that’s at a time when the issue is a case, upon which depends
Ukraine’s future, its perception on the international level and the access of
Ukrainians to the truth about the lives of officials,” said Oleksandr Novikov,
the head of the agency, as reported by its press service.

Zenon Zawada: Although it is
hard to blame the current government for the ruling (the majority of
Constitutional Court judges were appointed under the presidencies of Yanukovych
and Poroshenko), we view it as further damaging Ukraine and its standing with
its Western partners. The legislation under speculation was essential in
establishing IMF cooperation with Ukraine under the Poroshenko administration.
Moreover, the legislation was likely reviewed by lawyers at the time for their
constitutionality, and likely to have passed the test.

The fact that such important legislation can be so
quickly overturned – after the IMF released expensive tranches in exchange for
their approval – will make IFIs hesitate even further to lend Ukraine any
money. To add insult to injury, the court’s chief judge met the same morning
with EU Ambassador to Ukraine Matti Maasikas, who reported on a “fruitful
meeting” afterwards in which they discussed “the importance of transparency and
preserving the accomplishments achieved” from the EuroMaidan revolt of 2014.

We view the avalanche of events overturning Ukraine’s
anti-corruption gains – including the Constitutional Court ruling evicting
Artem Sytnyk from NABU, the appointment of
questionable personas to select the new anti-corruption prosecutor, and preparations to
dismiss the two remaining independent NBU board members – as indicative
of a Kremlin-backed soft coup in Ukraine. Zelensky is creating the appearance
that he will act to stop this, but concrete actions aren’t yet apparent. The
president’s approach – repeatedly assuring the public that he will clean up the
constant messes of governing bodies – feeds instability and chaos.

We expect Zelensky and Andriy Yermak will try to
counteract these actions that ruin Ukraine’s cooperation with the IMF. But it
could be too little, too late, especially when it comes to another IMF tranche
this year. This chaos indicates these two have lost control of the political
processes in the country that are becoming destructive. They can’t rein in the
pro-Russian forces, and they’ve burned their bridges with the pro-Western
forces. This ruling could be the latest embarrassing chapter in the book about
the Zelensky administration’s demise.