Scandalous court ruling immediately disrupts Ukraine anti-corruption infrastructure

The scandalous Oct. 27 ruling overturning Ukraine’s system
of electronic declarations of assets and income – widely recognized as the
foundation for Ukraine’s fight against corruption – was published by the
Constitutional Court on Oct. 28. The text confirmed that the court indeed ruled
as excessive the established punishment for filing knowingly fraudulent
declaration, thereby requiring its immediate cancelation. And those affected
state authorities confirmed that the ruling affects related legislation that
(1) requires the online publishing of annual e-declarations of assets and
income (though maintains the requirement of their annual filing), (2) defines
the conditions of illegal enrichment and the confiscation of assets gained by
such corruption and (3) establishes the authority of the National Agency of Corruption
Prevention.

 

In particular, the Oct. 27 ruling means it’s
unconstitutional for citizens to have access to information on revenue,
expenses and property on all those who are employed by state bodies, said Oleksandr
Novikov, the head of the national agency. It prompted the National Agency on
Corruption Prevention to shut down immediately its online register of
electronic declarations, which had been a key source for lawyers, analysts and
journalists in their anti-corruption investigations. The register won’t work
until parliament approves a new bill granting the agency the authority to
access the information again, he said. The Oct. 27 ruling “returns Ukraine not
to 2013, but 1991, when no anti-corruption legislation existed even in theory,”
Novikov told the pravda.com.ua news site. “It completely cancels all mechanisms
for preventing corruption, which were built during the years of independence.”

 

Another consequence of the Oct. 27 court ruling was it
blocked the national agency’s appointment of leading officials of state bodies,
including the victors of the local elections held on Oct. 25. The agency no
longer has access to state registers necessary for conducting special reviews
of declarations of candidates for leading positions in state bodies, including
elected officials. “With its decision, the Constitutional Court not only
destroys the anti-corruption system in Ukraine, as well as paralyzes the work
of bodies of local governance and the entire state apparatus,” Novikov said,
according to the agency’s website.

 

The Oct. 27 ruling is politically motivated, not only
legitimizing the intent of politicians and state officials to hide from the
public their illegally gained assets, but also protecting the interests of
certain judges of the Constitutional Court, whose fraudulent declarations are
under criminal investigation, according to an Oct. 28 statement by the National
Anti-Corruption Bureau of Ukraine. “The introduction of electronic declarations
is one of the key gains of the state after the Revolution of Dignity. It is the
cornerstone for anti-corruption reforms that began in 2014,” the statement
said. Yet the court decided “that all judicial servants should remain beyond
this process, and the monitoring of their lifestyles are an alleged form of
pressure, as well as submitting reports in the event of discrepancies between
declared and actual assets. As a result, thanks to this ruling, no one in
Ukraine monitors and has the right to ask about the assets of judges and their
sources, nor prosecute them for the existence of discrepancies. Such a ruling
can’t withstand any criticism, neither from an ethical nor legal point of
view.”

 

The morning of Oct. 29, President Zelensky called a
meeting of the National Security and Defense Council “to identify immediate
response measures to the emerged threats and challenges to national security,”
the president’s website reported. “The destructive blows inflicted on the
country’s achievements in the struggle and effective combating of corruption in
Ukraine cannot be ignored,” Zelensky stated. “There is an urgent need for
rigorous assessment of the decisions of some individuals, whose actions are
becoming increasingly dangerous societally.”

 

Zenon Zawada: Now that it
has been confirmed, it can be stated that this ruling plays out a disastrous
scenario for Ukraine’s Euro-Atlantic future, as we described in our Oct. 9
report on Ukraine’s debt. Recall, such a scenario assumes Ukraine won’t be able
to reach agreement with the IMF on external financing of the budget gap this
year. In which case, it will have to rely solely on internal financing sources,
which is money printed by the central bank. Though this scenario is still not
our base-case option, as the government still has time to repair all the
consequences of the Oct. 27 ruling, it has become all the more probable.

 

If the situation with rule of law and corruption in
Ukraine was chaotic enough beforehand (it grew more chaotic under the Zelensky
presidency), this ruling throws open the floodgates entirely. Besides its legal
implications, it sets a dangerous signal to all influential players in
business, politics and justice to do as they please. It also sends the signal
that any pro-Western structural reforms achieved since the EuroMaidan can be
overturned at the drop of a hat.

 

Although President Zelensky is not directly
responsible for this ruling, his hands-off approach to key political issues
such as corruption – as well as rapprochement with Russia – set the tone for such
complaints to be filed, and for judges to have the audacity to reach such
rulings, which ultimately threaten Ukrainian independence.

 

Without urgent political action from actors
committed to Ukraine’s Euro-Atlantic integration, especially in the EU and the
U.S. governments, this ruling could mark a complete freeze in Ukraine’s
Euro-Atlantic aims. It sets the tone for plans that are underway to compromise the independence of the
crucial National Anti-Corruption Bureau and Specialized Anti-Corruption
Prosecutor’s Office. At
minimum, it stalls such integration for at least until Zelensky’s presidency
ends (in 2024), but probably even further. Because much time will be needed in
reversing these reversals. Zelensky seems to understand what a mess has been
made and is trying to exert damage control, but there is the risk that it is
too little, too late in the big picture.