Editor’s note: This is issue 49 of Ukrainian lawmaker Yaroslav Zhelezniak’s weekly “Ukrainian Economy in Brief” newsletter, covering events from March 25- 31, 2024. The digest highlights steps taken in the Ukrainian parliament related to business, economics, and international financial programs.
The Kyiv Independent is republishing with permission.
IMF benchmarks in focus
Business associations appealed to the president and other authorities to ensure crucial reforms in Ukraine.
Twenty-one Ukrainian business associations, including IT-Ukraine Association, CEO Club, Ukrainian Business Council, Chamber of Commerce and others, made a public appeal to the president, the Cabinet of Ministers and the Verkhovna Rada with a demand to ensure crucial steps for business are taken.
Read also: Government submits draft law on restructuring economic crimes investigative body
The list of requirements from business includes three institutional reforms, in particular the restart of the Bureau of Economic Security (with a competitive selection of a new director that includes a decisive vote of the international representatives and recertification of staff) and the restart of the State Customs Service.
Obligations to the EU
ARMA started to sell seized assets via Prozorro.Sale.
The first online auction took place on March 6. The first seized asset put up for electronic auction was 1.2 thousand tons of wheat grain. As we reported in Issue 31, the Cabinet of Ministers adopted a resolution that obliged the Asset Recovery and Management Agency (ARMA) to sell seized assets under its management via online auctions in the Prozorro.Sale system.
The resolution is aimed at non-transparent sales, like when seized Russian ammonia (42 thousand tons) and Belarusian potassium (1,200 tons), which were sold below market value using non-transparent platforms. The state budget then lost about Hr 50 million ($1.3 million) as a result of those sales, according to the Parliamentary Temporary Investigative Commission’s evaluation.
Other key economic issues
The Defense Committee finished considering all amendments to the draft law on mobilization.
The Committee on National Security, Defense and Intelligence finished considering all 4,269 amendments to draft law #10449 on mobilization. Next steps are to consider the additional Committee’s amendments and to vote for the final table of amendments.
Read also: Zelensky signs several laws on mobilization, making younger men eligible for draft
It seems that the text of the draft law for the second reading will be submitted early the second week of April and the Verkhovna Rada may start to consider the draft law on mobilization in two weeks.
The draft law may be signed by the end-April – early May and may come into effect by the end of May – early June. However, there are still several factors that could prolong this schedule.
The Ukrainian tobacco market continues to show a decrease in legal sales.
According to the State Tax Service statistics, the volume of retail sales of cigarettes in 11 regions has fallen Hr 8.11 million ($206,000) in February 2024. It indicates that the illegal tobacco market in Ukraine is growing, although it has already hit a record high of 23% according to the recent Kantar Group research.
As we reported in Issue 39, from April to August 2023 the volume of legal retail sales of cigarettes increased monthly, with the aggregate demand remaining unchanged. However, since September 2023 there has been a sharp reduction in legal retail sales of cigarettes.
Experts link such a trend with the inaction of law enforcement, particularly the Bureau of Economic Security, which doesn't investigate and shut down illegal tobacco producers although the Parliamentary Temporary Investigative Commission on Economic Security reported all found evidence.
A judge related to Tatarov closed the case of the NACP against Presidential Office Deputy Rostyslav Shurma.
Last week, the judge of the Pechersk district court Svitlana Shaputko closed a court case against Deputy Head of the Office of the President Rostyslav Shurma connected to allegations from the National Agency on Corruption Prevention (NACP) regarding his conflict of interests.
According to an investigation by Hromadske, which we covered in Issue 44, Svitlana Shaputko, the judge which made this decision, is a member of the network of Ukrainian officials related to Deputy Head of the Office of the President Oleh Tatarov.
Read also: Ukraine’s anti-corruption bureau makes progress yet doesn’t take on top presidential allies
As we reported in Issue 44, at the end of February the National Agency on Corruption Prevention (NACP) alleged Rostyslav Shurma, deputy head of the Office of the President of Ukraine (OPU), was in violation of the requirements for the conflict of interest prevention.
According to the NACP’s official statement, in 2022 Rostyslav Shurma organized and led the Electric Power Committee at the Presidential Office, consisting of top specialized state bodies, which made decisions in favor of the electricity business owned by Rostyslav Shurma’s brother. The NACP claimed that following decisions of the Committee created favorable market conditions for the success of Oleg Shurma’s business.
The scandalous draft law on the right to represent Ukraine abroad is withdrawn from parliament.
Last week lawmakers from the "Servant of the People" presidential faction Halina Tretyakova and Maryana Bezuhla submitted to the Verkhovna Rada a draft law on life imprisonment for misappropriation of state functions, in particular, representing Ukraine at international events without authorization and consent.
As of now the relevant draft law #11104 was withdrawn from the parliament following vast criticism from colleagues in the Verkhovna Rada, including ones of their faction, public figures, and human rights organizations. The draft law was publicly criticized even by representatives of Ukraine’s international partners, particularly from the European Parliament.
Zelensky made several staff changes.
On Friday, President Volodymyr Zelensky fired two deputy heads of the Office of the President. Andriy Smirnov (de jure was responsible for the courts, de facto Tatarov oversees related issues) and Oleksiy Dniprov (was responsible for culture and sports issues) were dismissed from their positions.
Iryna Mudra, deputy to Justice Minister Denys Maliuska, was appointed to replace Andriy Smirnov. Olena Kovalska, who previously worked as the head of the Main Department of Strategic Communications of the Information Policy Directorate, was appointed instead of Oleksiy Dniprov.
Moreover, Zelensky dismissed Oleksiy Danilov from the post of Secretary of the National Security and Defense Council (NSDC). Danilov was appointed as the ambassador of Ukraine in Moldova and was replaced in the NSDC by Oleksandr Lytvynenko, ex-head of the Foreign Intelligence Service.
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