Zelensky files draft bill on limiting the power of oligarchs

Ukraine’s parliament registered on June 2 a draft bill
#5599, filed by President Zelensky, called “On the prevention of threats to
national security related to the excessive influence of oligarchs.” The bill
defines the notion of an oligarch and imposes some limits on their activity, as
well as forces top officials to declare any contracts with oligarchs.

An oligarch is defined as a person who meets at least
three of four criteria: 1) participates in political life (has a top official
position, a top position in a political party, or finances a political party or
political gatherings); 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 to the list of
oligarchs by the decision of the National Security and Defense Council.

According to the draft bill, a person recognized as
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, the president and top officials of the presidential office,
judges, MPs and top officials of government bodies (heads and deputy heads of
the Cabinet, the ministries, the central bank, and antimonopoly, security,
prosecution and anticorruption bodies) will be obliged to declare any contact
with an oligarch (except broadcasted events or meetings in courts). The failure
to declare such meetings/contacts would become a precondition to dismiss a
person from a government body.

Alexander Paraschiy: The
“sanctions” that would be applied to “oligarchs” by the offered bill do not
look painful at all. As we earlier expected, such law
won’t be efficient to fight with the key evil of the oligarchs, which is the
monopolization of some industries and their influence on public opinion via
related media. Interestingly, an early version of this bill, as reported by
zn.ua media last month, contained a stricter measure: banning the oligarchs
from owning media.

Meanwhile, there is a risk that such bill (if
approved) will become as another tool for the government to dismiss
uncomfortable officials (e.g. top officials of the National Anticorruption
Bureau or insurgent deputy heads of the central bank).

All in all, we see the bill as populistic. Instead of
making such legal initiatives, the government should strengthen its
anti-monopoly and anti-corruption efforts.