Economic Security Bureau: “Reboot or Stationary Run?”
Economic Security Bureau: “Reboot or Stationary Run?”
Within the years of its work, the Economic Security Bureau of Ukraine (ESB, the Bureau) has been engulfed in several loud scandals and got a negative reputation with the society. The Bureau was established in 2021 [1] and should fulfil the functions of an analytical body preventing and combating economic crimes against the state. Actually, however, the ESB had received a wide range of authorities that made this body the monopolist in controlling the national economy.
People of business are constantly emphasizing that the Bureau’s work has created even more preconditions for malversations than there were with the Tax Police, which the ESB intended to replace. There were several attempts to reboot the Bureau, however unsuccessful.
Now, we can see the next attempt to reanimate this body. Moreover, it is one of the utmost demands of the IMF. In the text of the IMF’s memo, the ESB appears in a separate paragraph as a structural milestone to be met by the end of June 2024 [2].
Considering this fact, on 11.04.2024, the Parliament, at the first reading, supported the governmental Project of Law on alterations to the Law of Ukraine “On Economic Security Bureau of Ukraine” on the enhancement of the Bureau’s work №10439. [3] Let’s go through the utmost changes proposed by the Draft Law №10439 and warnings expressed by the business about the current edition.
The government’s draft of the Law mostly offers changes in personnel policy, authorities, and assessment of the Bureau’s efficiency.
Personnel policy. The document clarifies the procedure for appointing managers of the ESB. The competition commission includes six members appointed by the Government. Three members will be provided by the Government, and the other three – recommended by international and foreign institutions, which provided Ukraine with international technical aid in three recent years under international agreements. The Draft Law extends the list of persons who can’t become the commission members, clarifies their rights and obligations, identifies the grounds for early termination of their authorities, and changes the procedure of approving resolutions by the commission. It also proposes to establish compulsory psycho-physiological interviewing with the use of a polygraph before appointing a person to a position at the ESR. Deputy directors of the Bureau shall pass a compulsory attestation according to a procedure, stipulated by the Government. Besides, in a year after the end or cancellation of the martial law, the ESR employees appointed before this Law comes into force shall pass an attestation. The Government believes the respective changes shall ensure transparent and objective selection of qualified candidates for the key positions.
Authorities. The Draft Law proposes to restrict the authorities of some law enforcement bodies in investigating economic crimes. Namely, this relates to the National Police and the Security Service of Ukraine. This will result in even more extension of the Bureau’s authorities to include proceedings on contraband of cultural values, weapons, narcotics, and forgery medicines. The Cabinet of Ministers of Ukraine thinks this shall promote more efficient investigations in the sphere of economic safety.
Assessment of the efficiency. An independent assessment (audit) of the ESR’s activities takes place upon the resolution of the Government. The Audit is made every two years by the Commission on the effectiveness of the activities of the Bureau (the Commission), comprised of three persons appointed by the Government from candidates proposed by foreign organizations, which provided Ukraine with technical aid in the sphere of preventing and combating corruption, reformation of law enforcement bodies within three years before the audit on the grounds of international agreements. During the audit, the Commission will be entitled to access to the materials of a criminal proceeding, in which the Bureau carried out a pre-court investigation and which has been finished. The Commission will be able to interview confidentially the ESR employees, people from other governmental and law enforcement bodies, as well as with other persons having information required for the audit. Besides, the Commission will apply to state government authorities, any individuals or legal entities for clarifications, documents, or information required for the assessment.
What does the business say? Business society, namely the European Business Association (the EBA), is, mildly speaking, dissatisfied with the edition of the document, passed after the first reading. [4] The EBA notes that the Draft Law №10439 lacks any clear procedure for re-attesting all staff of the Bureau. The procedure must have key fuses, namely to make it impossible for courts to renew the employees, who failed the re-attesting. The governmental project also lacks criteria for the effectiveness of the rebooted EST’s work and any tools to control meeting them. The EBA thinks that the commission on re-attesting all current ESR employees and the commission on selecting new ESR staff must include international experts.
Conclusions. In my humble opinion, the Draft Law №10439 requires significant extensions and corrections. The proposed imperfect mechanism of re-attesting will result in preserving titles by the current ESR staff, not meeting the principles of good practices. The Draft Law offers no fundamental changes for the organization of the Bureau’s activities. The text lacks a clear list of its tasks and authorities. Actually, nothing changes. Now we are witnesses to a next unsuccessful attempt to reboot the Bureau.
The Draft Law, actually intended to improve the work of the ESR shall consider the main demand of the IMF: to transform the Bureau into a single law enforcement authority, specialized in economic crimes, with its work based on analytics. Moreover, the ESR must restrict access to the positions therein for persons with doubtful background history.
I believe that the Bureau may be reanimated. Political will is the most important component thereof. The Government and the Parliament shall listen to business and the IMF and fulfil a fundamental rework over it, considering previous unsuccessful attempts to reboot. The ESR must protect the economic interests of the state, not be a nightmare and press for the business!
- Law of Ukraine 1150-IX “On Economic Security Bureau of Ukraine” (Digital resource)//web-page of the Verkhovna Rada of Ukraine. – access https://zakon.rada.gov.ua/laws/show/1150-20#Text
- The Letter on Intentions and Memo on Economic and Financial Police of December 01, 2023 (Digital resource)//web-page of the Ministry of Finances of Ukraine. – access https://mof.gov.ua/uk/memorandum_of_economic__financial_policies-677
- The Draft Law on Amendments to the Law of Ukraine “On Economic Security Bureau of Ukraine” on the improvement of the Bureau’s work №10439 (Digital resource)//web-page of the Verkhovna Rada of Ukraine. – access https://itd.rada.gov.ua/billInfo/Bills/Card/43595
The EBA joined the Common Application from the business to the national deputies on the reboot of the ESR (Digital resource)//web page of the European Business Association. – access https://eba.com.ua/eva-pryyednalas-do-spilnogo-zvernennya-biznesu-do-nardepiv-shhodo-perezavantazhennya-beb/