Weekly analysis for 24 February — 02 March

Anti-Corruption Aspects of the New IMF Memorandum

Event

On 26 February, the Executive Board of the International Monetary Fund approved a new USD 8.1 billion financing program for Ukraine.

The new IMF Memorandum traditionally includes a number of commitments undertaken by our state in the area of anti-corruption policy, which must be fulfilled within the year. The key commitments include:

– ensuring the protection and independence of anti-corruption institutions — the National Anti-Corruption Bureau of Ukraine (NABU), the Specialized Anti-Corruption Prosecutor’s Office (SAPO), and the High Anti-Corruption Court (HACC);

– updating (adopting) the regulations of the National Agency on Corruption Prevention (NACP) concerning the prioritization and strengthening of the verification of asset declarations submitted by high-ranking officials;

– introducing a procedure for publishing, twice a year, NAC’s reports on the effectiveness of asset-declaration verifications and lifestyle monitoring of public officials;

– conducting an independent external audit of the National Agency on Corruption Prevention (NACP);

– reforming the forensic examination system to ensure its independence, adequate quality, and effectiveness in criminal proceedings conducted by the National Anti-Corruption Bureau of Ukraine (NABU);

– introducing legislative amendments to remove obstacles in pre-trial investigations and court proceedings;

– introducing statutory financial sanctions for business entities that violate anti-money-laundering and counter-terrorist-financing rules;

– strengthening the liability of ultimate beneficial owners for violations of anti-money-laundering and counter-terrorist-financing legislation;

– preparing a review of the activities and effectiveness of the State Financial Monitoring Service along with an action plan to address the identified shortcomings;

– ensuring effective cooperation between the State Financial Monitoring Service of Ukraine, the tax authorities, and law enforcement agencies.

CPLR’s assessment

The importance of the new IMF program for Ukraine stems primarily from the fact of its approval rather than from amount of financing provided to the country. Its adoption serves as a key signal for European Union to adopt a decision on granting Ukraine a loan of EUR 90 billion, as well as for other international partners and foreign governments to allocate critically important financial support to the country.

At the same time, compared with previous IMF programs, the current one appears less ambitious in terms of anti-corruption measures. In particular, it currently provides for only one structural benchmark in this area — the updating (or adoption) of regulatory acts by the National Agency on Corruption Prevention concerning the prioritization and strengthening of the verification of asset declarations submitted by high-ranking public officials (scheduled for June 2026).

It should be noted that only the failure to meet, or the delayed fulfilment of, a structural benchmark under the Program can trigger a suspension or postponement of state financing. While other commitments must also be implemented, non-compliance with them does not carry such severe consequences.

For instance, addressing the issue of time limits for pre-trial investigations and the closure of criminal proceedings upon their completion was a permanent structural benchmark under the previous IMF program. In contrast, the current program sets only a general requirement to remove obstacles in criminal proceedings.

Moreover, the current program does not introduce any new commitments regarding judicial reform, even though the most complex changes in the justice system (including the establishment of the HCJ, the HQCJ, and specialized courts) were achieved through the implementation of previous IMF program.