Ukraine's suspended tax chief released from jail on €3.5mn bail

Ukraine's suspended tax chief released from jail on €3.5mn bail
Suspended State Fisacal Service head Roman Nasirov addresses the Ukrainian parliament in 2015.
By bne IntelliNews March 17, 2017

Roman Nasirov, the suspended head of Ukraine's State Fiscal Service (SFS), was released from custody in Kyiv late on March 16 after his wife posted the UAH100mn (€3.5mn) bail.

Earlier, the Specialised Anti-Corruption Prosecutor’s Office of Ukraine (SAPO) challenged the ruling of a lower court, asking instead to appoint bail of UAH2bn (€70mn) for Nasirov, who is under investigation for corruption activities related to illegal natural gas sales schemes.

The proceedings against the official are an unusual turn of activity for the country’s  anti-corruption authorities, which have tended not to investigate officials close to the national leadership.

With Nasirov regarded as having close ties to President Petro Poroshenko, ensuring that he is properly investigated and adequately punished if found guilty of any crimes at trial has become a test case for Ukrainian activists and foreign observers.

On March 3, Poroshenko said law enforcement agencies would conduct a thorough  investigation of Nasirov. “I think that everyone is equal before the law and that independent law enforcement agencies are able to do their work by the book,” Interfax news agency quoted Poroshenko as saying. “I am confident that the creation of an independent anti-corruption infrastructure, in which the president took part, only proves that it is truly independent and has the ability to do their job. The only thing is that it should be brought to completion and the case should be solid.”

According to Ukrainian anti-corruption authorities, Nasirov allegedly provided restructuring of rent payments for gas production companies associated with fugitive Ukrainian lawmaker Oleksandr Onyshchenko. Nasirov is accused of giving an order that cost the state budget UAH2bn (70mn). On March 3, the government suspended the official from his duties pending the results of the probe.

In July, Ukraine’s parliament sanctioned the criminal prosecution, detention and arrest of Onyshchenko, a member of the Volia Narodu (People's Will) parliamentary group, in connection with alleged fraud schemes with gas sold together with the Ukrgazvydobuvannia gas company.

Onyshchenko, who denies any wrongdoing, fled Ukraine and announced his intention to seek political asylum in the UK. On December 1, 2016, the SBU security service said it had put Onyshchenko on the national wanted list for treason.

Meanwhile, anti-corruption activists, including some reformist lawmakers, slammed the national leadership for trying to restrict the activities of the country’s other large anti-graft authority, the National Anti-Corruption Bureau of Ukraine (NABU) by seeking the appointment of British detective Nigel Brown as the body’s auditor.

On March 16, Ukraine’s Verkhovna Rada parliament failed to approve Brown's appointment after the move was supported only by 205 MPs instead of the necessary minimum of 250.

Most lawmakers from the ruling coalition, which is comprised by the President Petro Poroshenko Bloc faction and the People’s Front faction controlled by former prime minister Arseniy Yatsenyuk, supported Brown’s candidature. This triggered suspicions that he is loyal to Poroshenko and his associates and could therefore be used by the authorities to restrict NABU.

Before the Rada voted on Brown’s candidature, a group of lawmakers and anti-corruption activists accused the ruling coalition of violating parliamentary  regulations for such cases.

“He [Brown] came from nowhere. He refused to disclose who invited him to the parliament. His appointment is pushed through violation of parliamentary procedures. According to his CV he never audited any law enforcement agency or hold any senior official position,” the Anti-Corruption Action Centre (ANTAC), a Kyiv-based watchdog, tweeted on March 16.

According to Brown’s official biography, he is a well-known professional investigator/security consultant who founded International Security Consultancy (ISC) in 1993, operating in 26 international jurisdictions. In 1997, he sold the business, but was retained as a partner. The business was renamed ISC Global and went on to become one of the leading businesses in the industry.

Later, Brown established GSS Global, which was sold along with Kroll Security Group, with him being appointed as senior managing director for EMEA and Asia on contract. In 2009, he was headhunted to establish the Risk and Investigation division at Begbies Traynor PLC, a listed corporation in the UK.

Brown is a specialist investigator in the field of the Foreign Corrupt Practices Act (FCPA) and UK Bribery Act and has advised several major Fortune 500 and Footsie 100 companies in this field.

Earlier, Ukrainian anti-corruption activists offered their own candidature for the post of the auditor, Robert Storch, a US Justice Department deputy inspector general. His candidature was officially approved by the parliament’s Committee on Corruption Prevention and Counteraction in late 2016. However, his supporters could only muster around 70 votes in the Rada.

“It is vitally important that Ukraine appoints a credible, suitably qualified and independent auditor of the NABU in a transparent, fair and rules-based process,” British Ambassador Judith Gough said in a statement posted on the embassy’s Facebook page. “This is a vital role, which must be free from any form of political pressure. The UK has not proposed and does not support any particular candidate. This is a decision for the relevant Ukrainian decision making bodies, taking into account the requirements of the role.”

The success of the NABU is “fundamental to the credibility of Ukraine’s programme of reforms and fight against corruption”, Gough stressed.