Weekly analytics for 7 — 13 June

The Venice Commission issued an opinion on the draft law № 9322

Event

On June 10, the European Commission “For Democracy through Law” (Venice Commission) issued an opinion (CDL-AD(2023)022) on the draft Law “On Amendments to Certain Legislative Acts of Ukraine on Clarification of Provisions on Competitive Selection of Candidates for the Position of Judge of the Constitutional Court of Ukraine” dated 25.05.2023 (reg. № 9322). The opinion was provided in response to a request of the Chairman of the Verkhovna Rada of Ukraine (letter dated 25.05.2023). The text of the published opinion was endorsed at the 135th Plenary Session of the Venice Commission (Venice, June 9-10, 2023).

Legal assessment

Overall, the Venice Commission welcomes Ukraine’s constructive intentions to improve the competitive selection of candidates for CCU judges and noted that draft law № 9322 takes into account the key recommendations made in its opinion of December 2022 (CDL-AD(2022)054) and in the follow-up to this opinion (CDL-PI(2023)002). It stated that after the relevant amendments are adopted, the Commission will submit candidates for the position of a member of the Advisory Group of Experts (hereinafter referred to as the AGE) and its deputy (paragraph 42).

The Opinion is devoted to the direct analysis of the provisions of Draft Law № 9322 (paragraphs 17-37). Despite not taking into account two recommendations (differentiating the assessment of moral and professional qualities from ” not suitable”, “suitable” and “very suitable” and including the 7th  AGE member), the Venice Commission has responded positively to most of the novelties aimed at improving the competitive selection procedure. Previously, the CPLR experts have already analyzed the draft law № 9322, which can be found here.

The Commission noted that although the recommendation for a seventh member under the international quota was not taken into account, the model of decision-making on the moral qualities and professional competence of candidates provided by the draft law gives the international quota members a decisive vote, and that these decisions will lead to the exclusion of a candidate who has received a “not suitable” rating. Under this option, the participation of international members is meaningful, which in turn is in compliance with the Commission’s recommendations (paragraph 24).

It refers to a model that stipulates that during the transitional period of selection, the AGE makes decisions by at least four votes of its members, two of which are proposed by international organizations or the European Commission for Democracy through Law. Their votes are decisive in case of a tie in the second round of voting.

Equally important is the possibility of electing deputy members in case of early termination of the AGE member’s powers, which will ensure the continuity of the Advisory Group (paragraph 29).

However, the Commission notes that the ranking of candidates for the position of CCU judge based on the voting of the AGE members is an additional step that is unnecessary, as it does not concern the assessment of moral or professional qualities. Rating voting for candidates should not have binding consequences for the selection of candidates by the appointing authority. Therefore, Article 10¹¹ of the draft law should be removed due to the impact of the candidates’ ranking list on the voting procedure at the Congress of Judges of Ukraine (paragraphs 25-26).

The CPLR experts agree with the position of the Commission and expressed similar comments in their previous expert opinion on the draft law № 9322. However, we are strongly concerned, that that the procedure of ranking election of the candidates is unacceptable not only for the candidates selection by the Congress of Judges of Ukraine, but the Verkhovna Rada of Ukraine. We urge to take into account the relevant recommendations before the second reading and adopt the draft law, which will introduce an effective and qualified competitive selection of candidates for the position of a judge of the Constitutional Court of Ukraine.

The Venice Commission once again postpones the consideration of the Law against oligarchs: cui bono?

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On June 9, the European Commission for Democracy through Law (Venice Commission) recommended Ukraine to postpone the implementation of the Law of Ukraine “On prevention of threats to national security associated with the excessive influence of individuals who yield significant economic and political weight in public life (Oligarchs)” (Law against oligarchs) in view of the war, because the war significantly reduces the influence of oligarchs on economic and political life in Ukraine, which in turn prevents proper assessment of the impact of the Law on the political and legal system. Therefore, the Venice Commission considers it appropriate to decide on the fate of the Law against oligarchs after our Victory.

CPLR’s experts’ assessment

Ukraine became the first country in the world adopting a special law aimed at reducing the influence of oligarchs on political, economic, and social life. This Law was adopted on September 23, 2021 and entered into force on May 7, 2022. It is temporary in nature and will expire on May 7, 2032.

The law defines the criteria under which a person can be recognized as an oligarch, the procedure for such recognition, its legal consequences, as well as certain legal consequences for public officials in the event of contact with a person recognized as an oligarch or his/her representative.

Following Ukraine’s example of anti-oligarchic law, Moldova and Georgia both developed their own draft laws. The Georgian act is almost identical to the Ukrainian law, up to the limitation of its effective period; whereas Moldova used the Law against oligarchs as a foundation and adapted its provisions, taking into account its own context and expanding, in particular, the criteria under which a person can be recognized as an oligarch.

The Ukrainian Law against oligarchs has already been internally criticized by the Ukrainian experts and the public, because it does not create a coherent system for reducing the oligarchs’ influence on economic, political, and social life.

Representatives of civil society and, in particular, experts of the Center of Policy and Legal Reform have repeatedly emphasized problematic provisions of this Law, which contain grounds for political bargaining around the status of an oligarch, while court appeals against decisions to recognize a person as an oligarch can be used to eliminate political or economic rivals, with decisions regarding a person’s recognition or non-recognition as an oligarch de facto dependent on the President of Ukraine. Furthermore, provisions of this Law contradict the principle of legal certainty and conflict with a number of other laws (see, for example, our analyses for November 2-8, 2021 and for December 27, 2022-January 3, 2023).

In analyzing the Georgian draft law, the Venice Commission’s relevant opinion noted similar flaws and pointed out on the risk of arbitrary application of its provisions, which may lead to human rights violations and illegal attacks on political opposition, and will not contribute to the achievement of its goals. In particular, the criteria under which a person can be recognized as an oligarch, as well as the procedure for such recognition need to be improved. Thus, it can be assumed that the Ukrainian Law against oligarchs will receive similar opinion and comments, given the identical content of both documents.

On March 10, 2023, the Venice Commission was supposed to consider the Ukrainian Law against oligarchs but, as reported in the media, it postponed this item until June at the request of the Ukrainian authorities. At the same time, information appeared in the media regarding the content of the draft opinion of the Venice Commission on the Law against oligarchs. This means that, at that time, the members of the Commission had a vision of flaws contained in the Law and the modifications needed for its effective implementation. In this light, the argument that the war supposedly prevents proper assessment of the Anti-Oligarchs Law and its implementation seems somewhat far-fetched.

It should also be kept in mind that in June 2022, the European Commission provided its recommendations regarding Ukraine’s accession to the EU (including a recommendation to implement the anti-oligarchic law) – i.e., this occurred during the period when the military situation was worse than it is now (in particular, Kherson and part of the Kharkiv region were occupied, there was an active offensive by russian troops on the territory of Luhansk region, and Kyiv city and Kyiv region were only starting to recover after the liberation).

According to the Forbes magazine, as of the beginning of March 2023 (when this year’s ranking of the world’s richest people was published), the assets of Akhmetov, Pinchuk, and Novinskyi compared to last year’s ranking increased by $1.5 billion, $0.2 billion, and $0.1 billion, respectively. That is, persons who are considered oligarchs in Ukraine demonstrate a desire to restore assets lost due to the war.

This also creates preconditions for oligarchs to restore or at least try to restore their status quo in politics after the end of the war. In addition, the closed public data currently does not allow to assess how the war will affect politicians and whether new oligarchs will emerge among them.

Anti-oligarchic measures are among the strategic goals; as such, martial law is not an obstacle for their development. On the contrary, having the Venice Commission’s opinions on the Georgian and the Moldovan draft laws, as well as – presumably – a draft opinion on the Ukrainian law, the authorities should work now to improve the Law against oligarchs and lay the foundation for its subsequent implementation after Ukraine’s Victory in the war with Russia.

Draft law № 8250 on improving the efficiency of the State Property Fund of Ukraine and changing its structure was adopted

Event

On May 30, the Verkhovna Rada adopted the law “On Amendments to the Law of Ukraine “On the State Property Fund of Ukraine” to optimize the structure of the State Property Fund of Ukraine” (draft law № 8250 of 30.11.2022).  On June 5, the law was sent to the President of Ukraine for signature.

Among the novelties of the law are changes in the subjects of appointment of the Head of the State Property Fund, his first deputy and deputies, as well as the classification of their positions as political.

Legal assessment

1. The CPLR experts positively assess the attempts of parliamentarians to bring the Law of Ukraine № 4107-VI “On the State Property Fund of Ukraine” in compliance with the Constitution of Ukraine regarding the subject of appointment of the Head of the Fund. He will be appointed by the Verkhovna Rada of Ukraine upon the proposal of the Prime Minister of Ukraine and dismissed by the Verkhovna Rada of Ukraine. Prior to the amendments, it was determined that the Head of the State Property Fund was appointed and dismissed by the President of Ukraine with the consent of the Parliament.

Also, the unconstitutional provision is removed, according to which, if necessary, the position of the deputy Head of the Fund could be introduced by the decision of the President of Ukraine to ensure the implementation of certain tasks by the Fund.

The coordinated work of the Fund will be facilitated by the fact that the deputy Heads of the Fund, including the first one, will be appointed and dismissed by the Head of the State Property Fund of Ukraine.

However, the Law “On Amendments to the Law of Ukraine “On the State Property Fund of Ukraine” on optimization of the structure of the State Property Fund of Ukraine” did not fully resolve the unconstitutionality of a number of provisions of the Law of Ukraine № 4107-VI “On the State Property Fund of Ukraine”. Thus, the State Property Fund of Ukraine remains responsible to the President of Ukraine. Although, having changed the subject of appointment of the Head of the Fund, it was necessary to change the subject to whom the Fund is responsible – from the President of Ukraine to the Verkhovna Rada of Ukraine.

The unconstitutional provision that the specifics of the Fund’s special status are determined by acts of the President of Ukraine also remains in place. However, the President powers do not provide for such a power according to the Constitution. The same applies to the provision on vesting the Fund with powers related to the fulfillment of the tasks assigned to it by the President of Ukraine.

2. Regarding the classification of the positions of the Head of the Fund, his first deputy and deputies as political, if we analyze the amendments to the Law of Ukraine № 4107-VI “On the State Property Fund of Ukraine” in their entirety, this novelty will not de facto change the existing status of these officials.

This legislative novelty can be explained by the fact that, firstly, these officials should not be subject to labor and civil service legislation. It is worth noting that starting from October 18, 2019, the Head of the State Property Fund of Ukraine and his deputies were not subject to the Law of Ukraine № 889-VIII “On Civil Service”. And this was a reasonable decision, which is explained by the role of this central executive body in the system of executive authorities.

Secondly, the Law of Ukraine “On Amendments to the Law of Ukraine “On the State Property Fund of Ukraine” on optimization of the structure of the State Property Fund of Ukraine” does not vest either the State Property Fund as a central executive body or its Head, first deputy and deputy Heads with the function of formulating state policy. Therefore, the classification of their positions as political in practice will not contain any threats that would negatively affect the organization and activities of this CEB and the system of executive authorities as a whole.

However, in our opinion, it is worth emphasizing that the positions of the Cabinet of Ministers of Ukraine members, first deputies and deputy ministers are political in the executive branch. According to the established theoretical approach, the status of a politician for such persons means not only the political nature of their appointment and dismissal, the possibility of bringing them to political responsibility, the exemption from labor legislation and civil service legislation, but also the exercise of the function of state policy-making,

In view of the above, the positions of the Head of the State Property Fund, his first deputy and deputy will be quasi-political positions.

3. It is also worth noting that the draft law provides for the Fund to exercise its powers through its regional offices (representative offices), which act as separate subdivisions without the status of a legal entity. The current version of the Law of Ukraine № 4107-VI “On the State Property Fund of Ukraine” distinguishes between “regional offices” and “representative offices,” but the adopted amendments make it impossible to understand the difference and correlation between these two entities. This contradicts the principle of legal certainty as a component of the rule of law, which requires clarity and comprehensibility of legal norms (CCU Decision of December 20, 2017, № 2-р/2017).