Ukraine president rejects compromise with IMF over anti-corruption court bill before first reading

Ukraine president rejects compromise with IMF over anti-corruption court bill before first reading
Petro Poroshenko: Anti-corruption court “will become the last and decisive element of a new anti-corruption architecture in Ukraine”.
By bne IntelliNews January 18, 2018

Ukrainian President Petro Poroshenko is not ready to discuss any amendments to a bill on the nation’s anti-corruption court submitted by him to the country’s parliament in December, despite bitter criticism from the nation’s main donor, the International Monetary Fund (IMF).

“I know that your focus is on the anti-corruption court. This year we will launch the establishment of the court, and my bill is under consideration in the [Verkhovna] Rada,”  Poroshenko said in an address on January 16 to heads of diplomatic representations of foreign states and international organisations accredited in Ukraine.

According to the president, ”for the sake of its successful adoption”, he invited ”all to work constructively within democratic parliamentary procedures”. 

“Right after the first reading, there will be time to improve the draft in order to make this institution work as effectively as possible and in compliance with the Ukrainian constitution, Ukrainian sovereignty and Ukrainian legislation,” Poroshenko said, according to a transcript of his speech published by his media office the same day.

The statement followed the IMF’s letter in which the lender expressed “serious concerns” about the bill, as several provisions are not consistent with the authorities’ commitments under a $17.5bn support programme agreed with Kyiv in 2015, and the recommendations of the Venice Commission of the Council of Europe.

The IMF said that the bill opens up opportunities for additional delays in establishing the court. According to the multinational lender, the establishment and operation of the court is a key pillar of Ukraine’s anti-corruption agenda; however in its current form the IMF ”would not be able to support the bill.

Specifically, the bill lacks the transparent appointment of competent and trustworthy anti-corruption judges. International organisations and donors should be able to recommend members for a public council of international experts, whose roles should be “crucial”, not “just advisory” in judges’ selection, the letter read.

The requirement for court candidates to have considerable anti-corruption experience in foreign jurisdiction bodies or international court institutions severely limits the pool of candidates, while a ban on officials who served in law enforcement or as prosecutors in the last 10 years should be removed, the IMF argued.

Poroshenko added in his speech on January 16 that the anti-corruption court “will become the last and decisive element of a new anti-corruption architecture in Ukraine”.

Meanwhile, the World Bank has joined to the IMF’s pressure on the Kyiv leadership over the controversial bill. The Ukrainian parliment must amend the president’s submitted bill to meet the standards of the Venice Commission of the Council of Europe in order for Ukraine to qualify for $800mn in lending. Most of the World Bank’s demands were the same as those mentioned by the IMF, but they most differ in what procedures must be applied to amend the legislation, according to the Yevropeiska Pravda online publication.

“The Western establishment has found the Achilles’ heel of not only the Poroshenko administration in its campaign of resisting reforms, but the entire Ukrainian oligarchy,” Zenon Zawada at Kyiv-based brokerage Concorde Capital wrote in a research note on January 17. “And Poroshenko is resisting this Western pressure not only in his own self-interest, but in the interests of Ukraine’s ruling elite. The president’s comments confirm this, indicating that he won’t allow Western officials to fully determine the conditions of the anti-corruption court.”

The expert believes that Poroshenko will lead the efforts to approve the legislation in line with a likely compromise with the IMF, which will enable him to avoid politically risky hikes in natural gas prices that are being demanded.

“At this point, it’s hard to say whether Poroshenko will be willing to concede more in the anti-corruption court, or in the gas price hike, in his ultimate deal with the IMF to secure the next loan tranche. And it’s hard to predict what compromises the IMF itself will accept,” Zawada added.