Rada approves bill on oligarchs

Ukraine’s parliament voted on a bill #5599 “On the
prevention of threats to national security related to the excessive influence of
oligarchs.” The bill defines the notion of an oligarch (a person who has
significant economic and political weight in society) and imposes some limits
on their activity, as well as forces top officials to declare any contracts
with oligarchs.

As with the first draft of the bill,
the final draft defines an oligarch as a person who meets at least three of
four criteria: 1) participates in political life; 2) has sufficient influence on
media; 3) controls a company which is a natural monopoly or has a dominant
position on any Ukrainian market; 4) owns assets for a total value that exceeds
1 mln of ‘subsistence minimums’ (about USD 82 mln as of now). A person is
included in the list of oligarchs by the decision of the National Security and
Defense Council. Also, the second draft introduces a definition of a
representative of an oligarch.

A person recognized as an oligarch: 1) must not
finance political parties, 2) cannot participate in large privatizations, and
3) should file annual electronic declarations as public officials do. Also, a
wide list of top officials will be obliged to declare any contact with an
oligarch no later than the next day (except broadcasted events, meetings in courts
and official meetings with a pre-determined agenda and participation list).

The law also foresees the failure to declare a contact
with an oligarch (or his/her representative) as a reason for the firing of: the
human rights ombudsman, head and deputies of the State Security Service, the
Antimonopoly Committee, the National Bank, the Central Election Commission, the
State Property Fund, the National Anticorruption Bureau, the General
Prosecutor’s Office, the High Council of Justice and the State Investigation
Bureau.

Alexander Paraschiy: The bill’s
final draft (which might have been slightly amended in the session hall before
its ultimate approval) did not change since its first draft in terms of
“sanctions” against oligarchs, so it is unlikely to be efficient for fighting
the key evil of the oligarchs, which is the monopolization of some industries
and their influence on public opinion via related media.

However, the bill intensified sanctions of state
officials for not declaring meetings. In particular, a wide range of state
officials can be fired now for not declaring a contact not only with an
oligarch (from a clear list of oligarchs), but also with their representatives
(for whom there is no list). In this way, a state official can be dismissed
after any undeclared contact with any person – if such person is recognized as
a “representative of an oligarch.”  This will become another tool for the
government to dismiss uncomfortable officials, especially those who enjoyed a
very limited set of reasons for dismissal, including top officials of the
National Anticorruption Bureau and the National Bank.

The good news is that the bill (if signed into law)
will make oligarchs more toxic for state officials, which theoretically would
diminish oligarchs’ possibilities to contact and influence the government. At
the same time, it will make state officials more dependent on the president’s
will, thus undermining independence of certain state bodies.