White House sends Ukraine a detailed winter reform wishlist

By bne IntelliNews September 26, 2023

The US has sent a letter outlining its wishlist of reforms from the Ukrainian government that it would like to see implemented this winter, Ukrainska Pravda revealed on September 25.

The letter was sent by the White House Deputy National Security Advisor for International Economics to the Donor Co-ordination Platform, a leaked copy of which was seen by Ukrainska Pravda.

The conditions laid out in the list are aimed at strengthening Ukraine's resilience and enhancing its capacity for EU integration. However, some experts argue that the list contains an array of demands that may prove challenging to implement.

Energy markets: the first demand on the list calls for Ukraine to adopt procedures to enhance trading transparency in wholesale energy markets by April 1, 2024 to improve transparency and fairness in the energy markets.

State firms' supervisory boards: greater transparency and better corporate governance including entities such as Ukrenergo, Naftogaz, Energoatom and the Gas Transmission System Operator of Ukraine (GTSOU). The request is to align these boards with OECD corporate governance standards, a move seen as pivotal to improving corporate governance in these state-owned companies.

SAPO: strengthening the Special Anti-Corruption Prosecutor's Office (SAPO) with changes in the selection process, accountability mechanisms and greater independence in handling cases are all part of the proposed reforms. Additionally, providing SAPO with a separate extradition authority.

NABU: reinforcing the National Anti-Corruption Bureau of Ukraine (NABU) by adding detectives, forensics capabilities and improving oversight. Simultaneously, restoring asset declaration requirements for officials and judges, along with reviving political party financial disclosures, is sought to simplify the system and enhance transparency.

Judicial reforms: restarting the judicial selection process through the reformed High Qualification Commission of Judges is proposed, with a transparent process to fill approximately 2,000 vacancies. Reforming the notoriously corrupt Supreme Court, reviewing its integrity after several corruption scandals, and involving independent experts in selecting new justices are all listed and long overdue.

ARMA: strengthening the Asset Recovery and Management Agency (ARMA) by opening leadership positions to competition, improving transparency and enhancing its effectiveness.

Supreme Court: reform of the Supreme Court and expanding the nominally independent High Anti-Corruption Court by allowing some cases to be heard by a single judge, rather than panels of three, is seen as a pragmatic response to a growing caseload.

Anti-trust: the twelfth demand calls for updated merger review and anticompetitive inspection procedures for the Antimonopoly Committee by 2024.

Gas and power liberalisation:  energy sector reform includes the implementation of a gas and electricity price liberalisation roadmap. This should include developing social protections to mitigate price increases and preparing the energy grid for EU integration.

Audits: strengthening the independence and professionalism of the Accounting Chamber and State Audit Service for oversight during reconstruction.

Military reform: more transparency in the military is needed to combat widespread corruption. The adoption of law #4210 is requested to bolster civilian control and oversight of the military and align military procurement and planning with NATO standards. Additionally, investment in women's participation in security, particularly through the Women, Peace, and Security initiative, is encouraged.

“All of these reforms are needed, but they take years if not decades even in the most advanced economies with great state capacity,” Tymofiy Mylovanov, rector of the Kyiv School of Economics (KSE) and former economics minister, said in a tweet. “Demanding these reforms to be implemented over the winter is setting up everyone for failure.”

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