Members of the Ukrainian Council of Business coalition, which includes 113 business associations from various sectors of the economy, analyzed draft laws on the Bureau of Economic Security No. 10439 (KMU) and No. 10439-2 (People’s Deputies) and note the following:

 

More than two years have passed since the creation of the BES, and the Bureau still has not started to work effectively.

The key problems of the Bureau’s work, which indicate that currently the BES does not meet the concept and business needs laid down when the body was created, are tender selections with violations; unpredictability of the body due to high turnover and lack of responsible persons; the predominance of the law enforcement function over the analytical one; pressure on the business of other law enforcement agencies due to the inefficiency of the BES.

According to a recent study by economists assessing the largest tax evasion schemes, the largest schemes are associated with weak institutions. Due to the ineffective work of only three bodies – the State Customs Service, the State Tax Service, the Bureau of Economic Security – the state loses, according to experts, 200-240 billion hryvnias every year.

The budget loses UAH 100-150 billion from violation of customs rules and gray imports, UAH 40-45 billion from counterfeiting and illegal trade, and UAH 20-30 billion from VAT schemes. That is, about 100 billion of budget losses are due to the low-quality work of the BES every year.

Taking into account the relevance and importance of the issue of restarting the BES, URB specialists worked out a number of draft laws, in particular for #10439 (initiator – KMU), #10088-1, #10439-2 (initiators – People’s Deputies of Ukraine).

According to the results of processing the comparative table and the texts of the bills, it can be seen that the bill No. 10439 contradicts the obligations taken by Ukraine, and also does not meet the G7 priorities published recently. Whereas draft laws No. 10088-1, No. 10439-2 fully meet the requirements of international partners.

Specialists of the Ukrainian Business Council compared two current projects (No. 10439 and No. 10439-2) according to their key provisions, the results are presented in the form of a table:

Key norms of projects	№ 10439	№ 10439-2
Rebooting the department	no	yes
The competitive commission for the election of the head of the Bureau of Economic Security has the majority vote of international experts	no	yes
The competition commission submits the best candidate for the position to the Government	no (submits three)	yes
Re-certification of employees of the Bureau of Economic Security	a year after the end of martial law	immediately after the election of the director
Mechanism for dismissal of unscrupulous employees	no	yes
The personnel commission for re-certification of employees consists of international experts	no	yes
Strengthening the analytical direction of the BES – granting the right for the Bureau to obtain free access to existing state information systems that contain data on the financial activities of economic entities, state registers of authorities	no	no
Establishing qualitative criteria for the effectiveness of the work of the BES	no	no

From the comparative table, it is clear that project #10439-2 gives hope for a reboot and the creation of a quality Bureau of Economic Security, while project #10439 leaves no chance for the creation of a quality BES.

In addition, in order to establish certain regulatory safeguards against pressure on business from the side of law enforcement agencies, it is important to implement the changes to the Code of Civil Procedure contained in projects No. 10440-3 and 10440-2, namely:

– The prosecutor is authorized to instruct the pre-trial investigation body to conduct a pre-trial investigation exclusively within the scope of the investigation;

– Prohibition of entrusting investigative (research) actions to operative divisions of security agencies during pre-trial investigation of criminal offenses that are assigned by law to the jurisdiction of the Bureau of Economic Security of Ukraine;

– The duty of the investigating judge to determine the term during consideration of the issue of seizure of property, the term of such seizure;

– The prosecutor must immediately, but not later than 24 hours from the day of the announcement of the court decision on the refusal to satisfy or the partial satisfaction of the request for the seizure of temporarily seized property, the court decision on the full or partial cancellation of the seizure of temporarily seized property, such a decision by the court, must give an instruction to the investigator regarding the immediate and unconditional return to the owner of temporarily seized property.

– Establishment of the procedure according to which the destruction of material evidence is necessarily recorded with the help of audio and video recording;

– Granting the right to unimpeded recording of the search by means of a video recording to the person who uses the premises in which the search is being conducted, to the owner or other owner of such premises, as well as to the lawyers of the specified persons;

– Refusal to grant a request for the application of measures to ensure criminal proceedings, if such a request is made by an investigator or prosecutor in criminal proceedings regarding criminal offenses that do not belong to the jurisdiction of the body;

– The investigator, the prosecutor has no right to repeatedly appeal to the investigating judge with a request for the seizure of the same property, if the request does not indicate new circumstances that were not considered by the investigating judge and others.

Based on the above, the Ukrainian Business Council calls on people’s deputies to adopt project No. 10439-2 in the first reading as soon as possible and to finalize it to the 2nd reading, taking into account the proposals of businesses, providing a basis for the high-quality work of the body for combating economic crimes. Project #10439 does not solve any of the existing problems, so it should be returned to the authors without consideration.

It is also important to implement all the useful norms of projects 10440-2, which are mentioned in the application.

The important project No. 10440-3, which concentrates all economic crimes in BES, can be adopted only after restarting BES, after re-certification of personnel, additional recruitment of employees to the level stipulated by the Law on BES and full funding of the Bureau.

 

Best regards

Business associations

Members of the Ukrainian Business Council