{"id":5063,"date":"2024-06-25T12:23:41","date_gmt":"2024-06-25T09:23:41","guid":{"rendered":"https:\/\/pravo.org.ua\/analytical-materials\/weekly-analysis-for-19-26-june\/"},"modified":"2025-06-17T13:31:37","modified_gmt":"2025-06-17T10:31:37","slug":"weekly-analysis-for-19-26-june","status":"publish","type":"analytical-materials","link":"https:\/\/pravo.org.ua\/en\/analytical-materials\/weekly-analysis-for-19-26-june\/","title":{"rendered":"Weekly analysis for 19 \u2013 25 June"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69_1 counter-flat ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Sections<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/pravo.org.ua\/en\/analytical-materials\/weekly-analysis-for-19-26-june\/#Verkhovna_Rada_adopted_the_Law_on_improving_operations_of_the_Bureau_of_Economic_Security\" title=\"Verkhovna Rada adopted the Law on improving operations of the Bureau of Economic Security\">Verkhovna Rada adopted the Law on improving operations of the Bureau of Economic Security<\/a><\/li><\/ul><\/nav><\/div>\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Verkhovna_Rada_adopted_the_Law_on_improving_operations_of_the_Bureau_of_Economic_Security\"><\/span>Verkhovna Rada adopted the Law on improving operations of the Bureau of Economic Security<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Event<\/strong><\/p>\n\n\n\n<p>On June 20, the Verkhovna Rada adopted the draft Law \u201cOn amending the Law of Ukraine \u201cOn the Bureau of Economic Security of Ukraine\u201d to improve the Bureau\u2019s operations\u201d (<a href=\"https:\/\/itd.rada.gov.ua\/billInfo\/Bills\/Card\/43595\" target=\"_blank\" rel=\"noreferrer noopener\">reg. \u2116 10439 of 29.01.2024<\/a>).<\/p>\n\n\n\n<p>Currently, the draft law is awaiting signature of the Chairman of the Verkhovna Rada of Ukraine and the final text is not available; thus, a brief analysis of the key provisions is outlined below based on the comparative table for the second reading (608 pages), as well as on the <a href=\"https:\/\/forbes.ua\/money\/reforma-dovzhinoyu-u-dva-roki-deputati-ukhvalili-zakon-pro-perezavantazhennya-beb-forbes-vidiliv-pyat-vazhlivikh-zmin-u-roboti-organu-shcho-rozslidue-spravi-biznesu-21062024-21887\" target=\"_blank\" rel=\"noreferrer noopener\">information<\/a> from MPs concerning the proposals supported during the voting.<\/p>\n\n\n\n<p>Draft Law \u2116 10439 provides for the following amendments to the Law of Ukraine \u201cOn the Bureau of Economic Security\u201d:<\/p>\n\n\n\n<p>&#8211; the new BES director will be selected by a competition commission consisting of 6 members (3 from the Cabinet of Ministers, 3 based on proposals from international and foreign organizations providing international technical assistance in the area of preventing and combating corruption and\/or in the area of law enforcement reform). At the same time, <strong>international experts have the right to cast a decisive vote<\/strong> &#8211; a decision is considered adopted if at least 4 members of the commission (2 of whom are international) vote for it, and in case of a tie in the second vote, by 3 members\u2019 votes (2 of whom are international) (amendments to parts 3-5 of Article 15 of the Law);<\/p>\n\n\n\n<p>&#8211; The Competition Commission <strong>submits to the Prime Minister of Ukraine no more than two candidates selected from among the participants of the competition<\/strong>. The Cabinet of Ministers of Ukraine shall appoint the Director of the Bureau within 10 days from the date of receipt of the submission of the Competition Commission with information on the candidates selected as a result of the competition;<\/p>\n\n\n\n<p>&#8211; \u201cintegrity and competence\u201d is introduced among requirements for the Bureau\u2019s Director;<\/p>\n\n\n\n<p>&#8211; the <strong>formation of the competition commission for the competitive selection to the position of the BES Director begins<\/strong> from the date of entry into force of this Law, as does the competitive selection for this position;<\/p>\n\n\n\n<p>&#8211; a <strong>single certification<\/strong> (re-certification) of current employees of the BES, except for the BES Director, his\/her First Deputy and Deputies, is carried out. The certification <strong>starts based on the order of the BES Director and will be completed within 18 months. <\/strong>First of all, the heads of the central office departments and their deputies, heads of territorial departments, and their deputies are subject to certification, followed by other employees of the BES;<\/p>\n\n\n\n<p>&#8211; the competition for positions in the BES and the re-certification of current BES employees will be conducted by a commission, in which <strong>6 representatives will be from the newly elected BES Director and 6 from international and foreign organizations<\/strong>, upon the proposal of the Ukrainian business community;<\/p>\n\n\n\n<p>&#8211; during the next three years, the following personnel commissions will operate: six from the BES, and six from partners upon proposal of Ukrainian business;<\/p>\n\n\n\n<p>&#8211; the powers of the Public Oversight Council are terminated early;<\/p>\n\n\n\n<p>&#8211; other amendments on clarifying the grounds for dismissal from the Bureau, external independent assessment (audit), etc.<\/p>\n\n\n\n<p><strong>CPLR\u2019s assessment<\/strong><\/p>\n\n\n\n<p>The CPLR experts have previously repeatedly highlighted the problems with the adoption of proposals to improve the activities of the Bureau of Economic Security \u2013 notably, in analytical points in <a href=\"https:\/\/pravo.org.ua\/analytical-materials\/shhotyzhnevyj-analiz-03-09-sichnya-2023-roku\/\" target=\"_blank\" rel=\"noreferrer noopener\">January<\/a> and <a href=\"https:\/\/pravo.org.ua\/analytical-materials\/shhotyzhnevyj-analiz-21-27-lyutogo-2024-roku\/\" target=\"_blank\" rel=\"noreferrer noopener\">February<\/a> of this year.<\/p>\n\n\n\n<p>As repeatedly noted, the BES reform is necessary to implement the fiscal structural reforms envisioned by the Memoranda on Economic and Financial Policies of March 24, 2023 and June 19, 2023, in order to improve the legal framework for the BES. According to the updated $17.5 billion Extended Fund Facility (EFF) program, the <em>relevant legislative initiative called the \u201cthe BES reset\u201d was to be adopted by the end of June 2024<\/em>. Furthermore, the Plan for the Ukraine Facility prepared by Ukraine for the EU envisioned the adoption of the Law on the BES Reset in the second quarter of 2024.<\/p>\n\n\n\n<p>At the same time, the issue of the BES reform has been on the agenda for the past year, and the problem of protecting entrepreneurs from unlawful pressure from law enforcement agencies has become so acute that the NSDC Decision of January 23, 2024 \u201cOn urgent measures to ensure economic security for the period of martial law\u201d (<a href=\"https:\/\/www.president.gov.ua\/documents\/212024-49521\" target=\"_blank\" rel=\"noreferrer noopener\">Decree<\/a> of the President of Ukraine of January 23, 2024 \u2116 21\/2024) was enacted.<\/p>\n\n\n\n<p>The European Commission&#8217;s EU Enlargement <a href=\"https:\/\/neighbourhood-enlargement.ec.europa.eu\/ukraine-report-2023_en?fbclid=IwAR0Ol3uN5FctlWhr_O4hXC_zRhqC_CWvW53v-Z6YTV5gek-WeDEiEwibrms\" target=\"_blank\" rel=\"noreferrer noopener\">Report<\/a> of November 8, 2023 states that Ukraine should amend the legislation to enable the selection of the new head and other staff of the Bureau of Economic Security in a competitive, transparent, merit-based manner, including a credible integrity check.<\/p>\n\n\n\n<p>Since then, the reform of the BES has increasingly appeared in public policy documents and has been the subject of discussions with Ukraine\u2019s international partners on structural reforms. Examples of this include the <a href=\"https:\/\/www.mof.gov.ua\/uk\/news\/the_ministry_of_finance_publishes_the_presentation_of_the_reforms_matrix_prepared_by_the_government_of_ukraine_in_cooperation_with_the_world_bank-4452?fbclid=IwAR3mIMgo82kt2siOAnHqoI8VxiG0irHqf5I-msW4kvIIV5zV50YM0B_TCEk\" target=\"_blank\" rel=\"noreferrer noopener\">Reform Matrix<\/a> prepared by the Government of Ukraine in cooperation with the World Bank which, in the section regarding the core law enforcement reform, focuses on reform of the BES and the SSU. The \u201cBES reset\u201d is also envisioned in the Ukraine Facility Plan prepared by Ukraine for the European Union to track progress in reforming the country.<\/p>\n\n\n\n<p>The Bureau of Economic Security is a relatively new pre-trial investigation body that started operating in 2021 and has gained a negative reputation among parliamentarians, experts, and civil society. Despite the intents to reform the tax police, to increase the effectiveness of combating financial and economic criminal offenses, and to move from \u201cforceful\u201d to \u201canalytical\u201d methods of investigation, in particular to reduce pressure on business, the goals of this reform have not been achieved.<\/p>\n\n\n\n<p>In <a href=\"https:\/\/t.me\/yzheleznyak\/3519\" target=\"_blank\" rel=\"noreferrer noopener\">February<\/a> 2023, the Verkhovna Rada\u2019s Committee on Finance, Taxation, and Customs Policy recognized the work of the Bureau of Economic Security\u2019s management as unsatisfactory and recommended that the Government \u201creboot\u201d the Bureau\u2019s management, clarify the procedure for holding competitions for positions in this body, and certify the staff of this body.<\/p>\n\n\n\n<p>On January 29, 2024, the Cabinet of Ministers of Ukraine registered the mentioned draft Law <a href=\"https:\/\/itd.rada.gov.ua\/billInfo\/Bills\/Card\/43595\" target=\"_blank\" rel=\"noreferrer noopener\">\u211610439<\/a>, which was adopted on June 20. After extensive consultations with international partners, civil society, and business associations, a compromise was found that meets the expectations of \u201crebooting the BES\u201d \u2013 i.e., improving its efficiency by updating the staffing of this law enforcement agency.<\/p>\n\n\n\n<p>The G7 ambassadors <a href=\"https:\/\/x.com\/G7AmbReformUA\/status\/1803868245738262968\" target=\"_blank\" rel=\"noreferrer noopener\">welcomed<\/a> the adoption of draft law \u2116 10439, noting that it \u201c<em>will allow full restructuring and reset of the Bureau &amp; its leadership, with meaningful involvement of international partners. This significant development will help boost trust and confidence in Ukraine\u2019s business environment\u201d.<\/em><\/p>\n\n\n\n<p>On the other hand, <a href=\"https:\/\/urb.org.ua\/spilne-zvernennya-ukra%d1%97nskogo-biznesu-shhodo-perezavantazhennya-beb\/\" target=\"_blank\" rel=\"noreferrer noopener\">16 business associations issued a joint statement<\/a> criticizing the version of the adopted draft law, noting that the government\u2019s draft law lacks the following:<\/p>\n\n\n\n<p>&#8211; clear procedure for re-certification of all personnel, which would contain key safeguards, in particular, to prevent courts from reinstating employees who have not passed such re-certification;<\/p>\n\n\n\n<p>&#8211; inclusion of international experts in the personnel commission for re-certification of all current BES employees and the commission for selection of new BES employees;<\/p>\n\n\n\n<p>&#8211; strengthening the analytical function of the Bureau by providing the BES with free access to existing state information systems;<\/p>\n\n\n\n<p>&#8211; establishing performance criteria for the renewed Bureau of Economic Security and their constant monitoring;<\/p>\n\n\n\n<p>&#8211; granting the personnel commission the right to be guided by reasonable doubt based on facts, documents, etc. when checking the integrity of a candidate during re-certification of personnel.<\/p>\n\n\n\n<p>In our opinion, the <strong>adopted amendments to legislation only partially address the issue of the BES&#8217;\u2019s effective operations<\/strong>. After all, the personnel reform is only one among other factors that affect the effectiveness of this body. Even if the best possible BES Director is selected and all employees are successfully certified without further reinstatement in courts (which seems unrealistic given the previous experience of certification, especially in conditions where commissions independently determine the evaluation criteria), this is not sufficient to enable quality changes in the approach to the investigation of criminal offenses in the economic area.<\/p>\n\n\n\n<p><strong>The next components of the BES reform, at a minimum, should be the followings:<\/strong><\/p>\n\n\n\n<p>&#8211; eliminating competition between economic and financial elements of criminal offenses under the jurisdiction of the BES, the National Police, and the NABU;<\/p>\n\n\n\n<p>&#8211; procedural control over the BES activities in the prosecutor\u2019s office \u2013 primarily, through establishment of the Specialized Economic Prosecutor\u2019s Office similar to the SAPO, the Specialized Environmental Prosecutor\u2019s Office, and the Specialized Defense Prosecutor\u2019s Office;<\/p>\n\n\n\n<p>&#8211; developing analytical approaches in the BES activities, in particular, through introduction of profiles of detective analysts, use of criminal analysis tools, and integration with databases (banks) of European and other foreign countries;<\/p>\n\n\n\n<p>&#8211; developing alternative measures for criminal conflicts resolution (e.g., international experience of transactions) to be applied at the pre-trial stage of criminal proceedings in the investigation of certain types of criminal offenses, primarily those of a financial nature;<\/p>\n\n\n\n<p>&#8211; introducing an external and internal evaluation system for the BES and its employees, including common KPIs with other law enforcement agencies, taking into account the specialization of this body;<\/p>\n\n\n\n<p>&#8211; establishing principles of ethical behavior and integrity criteria in common with other law enforcement agencies, and developing internal control units of the BES.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Verkhovna Rada adopted the Law on improving operations of the Bureau of Economic Security Event On June 20, the Verkhovna Rada adopted the draft Law \u201cOn amending the Law of [&hellip;]<\/p>\n","protected":false},"featured_media":15151,"template":"","categories":[188,341],"authors":[],"source":[],"analytics":[400],"class_list":["post-5063","analytical-materials","type-analytical-materials","status-publish","has-post-thumbnail","hentry","category-prevention-of-corruption","category-practice-preventing-and-combating-corruption","analytics-weekly-analytics"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.8.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Weekly analysis for 19 \u2013 25 June - Pravo<\/title>\n<meta name=\"description\" content=\"Verkhovna Rada adopted the Law on improving operations of the Bureau of Economic Security. 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