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Five reasons why business does not support the proposed concept of the Bureau of Economic Security

12/ 11/ 2020
  It has recently become known that the Verkhovna Rada Committee on Finance, Tax, and Customs Policy has finalized and recommended the draft law №3087-d on the Bureau of Economic Security of Ukraine (BES) for adoption by the Verkhovna Rada. As in previous appeals, the European Business Association strongly opposes the adoption of this draft law in its current form and urges the authors to withdraw it and instead begin to develop a new document, taking into account the opinions, proposals, and comments of the EBA experts. Although the draft law №3087-d proposes to establish the Bureau of Economic Security as a body whose purpose will be to detect and investigate criminal offenses of an economic nature, according to the EBA experts, this goal has nothing to do with the content of the provisions of this document. Instead, setting up a body in the proposed format may increase distrust of law enforcement among the business representatives and investors, given the following: 1.The tasks and powers of the BES do not fully correspond to the current problems of economic crime in Ukraine, and the human resources that will be allocated to perform the tasks of the BES are not properly justified. First, the draft law does not clearly define which categories of economic crimes the BES should investigate. Instead, it contains rather broad formulations that can be interpreted differently, and their implementation is difficult to control. The draft law defines the status of the BES as a “state law enforcement agency”, although, for example, in the EU, the vast majority of specialized bodies, that are involved in the fight against economic crime, operate in the executive branch. Besides, according to the EBA experts, the maximum number of BES employees, which is currently estimated at 4 thousand people, is quite high and unreasonable. Besides, it is important to establish criteria for the effectiveness of the BES to ensure that the newly created body focuses its work on violations that pose a high level of public danger. According to the consolidated statistics of the Prosecutor General of Ukraine, in 2019, there were 1,359 criminal offenses in the field of economic activity registered in Ukraine under the articles of the Criminal Code of Ukraine, which belong to the jurisdiction of the BES according to the draft law №3087-d. Given this indicator of offenses, the projected workload per BES employee will be only 0.34 cases per year. 2. Methods for selecting the head of the BES and for determining the organizational structure will not contribute to the formation of an independent, professional institution free from political influence. The draft law contains inconsistent provisions regarding the procedure for appointing the head of BES, which creates the risk of selecting a candidate who is not professional or honest enough for this position, as well as narrows the possibility for the public, including business, to control such appointment. It would be appropriate to adapt the selection procedure to European best practices, where the selection process should include at least one anonymous test, verification of the candidates previous experience, and a clear mechanism for appealing the candidates results. The requirements for the director of BES provided by the draft law do not meet the requirements for A category positions, following the Law of Ukraine On Civil Service. Besides, some provisions of the draft law raise doubts among the EBA experts regarding the political independence of the BES. Thus, the document provides that some important aspects of the bodys functioning are dependent on the discretionary decisions of the President of Ukraine, although the performance of such functions is beyond the Presidents authority and may create preconditions for improper interference in BESs operations. 3. The level of salary of BES employees. The draft law provides that the BES employees with special shall have a minimum level of salary of at least 20 living wage. However, other specialists, who would be the basis of the analytical function of BES, do not fall under such conditions of remuneration amount. This can create problems in finding and hiring a key category of staff for the newly created body. 4. Possible reputational risks for BES. There is a risk that the BEB will be perceived as a renewed tax police rather than a qualitatively new analytical body, as the draft law proposes changes to certain laws by simply replacing the phrase tax police with Bureau of Economic Security of Ukraine. This nuance is exacerbated by the possibility of employment of current tax police officers in the newly created body through office transfers. Instead, a transparent competitive selection procedure based on professional qualities, knowledge, and skills should be envisaged. 5. Mechanisms for monitoring the activities of BEB cannot be considered sufficiently effective. The European Business Association considers it necessary to ensure the appointment of all BES employees under the open competition procedure with the participation of representatives of the Public Control Council in competition commissions. And thus, create a safeguard against the transfer of discredited old staff from the tax police, SBU, the Ministry of Internal Affairs. It is necessary to unite the investigation of all economic crimes against the financial interests of the state in the work of one body. We also propose to ban the assignment of military ranks to BES employees, presenting firearms to the employees as state awards, and the use of firearms by law enforcement officers. To ensure the physical protection of employees in the performance of their duties to involve special forces of other law enforcement agencies. We believe that these rudimentary norms create a favorable environment for abuse of office and abuse of power. Svitlana Mykhailovska. EBA Deputy Director for Advocacy. The European Business Association is ready to join the discussion and development of a new document that could consolidate the best provisions of the draft law №3087-d and previous draft laws, which provided for the establishment of a separate body to investigate crimes in the field of economic activity. The business believes that the work of the new body should be based on such principles as political and operational independence, focus on analytical functions, demilitarization, transparent selection of management and staff, control by the public and supervisory bodies, increased responsibility for abuses of power.   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

It has recently become known that the Verkhovna Rada Committee on Finance, Tax, and Customs Policy has finalized and recommended the draft law №3087-d on the Bureau of Economic Security of Ukraine (BES) for adoption by the Verkhovna Rada.

As in previous appeals, the European Business Association strongly opposes the adoption of this draft law in its current form and urges the authors to withdraw it and instead begin to develop a new document, taking into account the opinions, proposals, and comments of the EBA experts.

Although the draft law №3087-d proposes to establish the Bureau of Economic Security as a body whose purpose will be to detect and investigate criminal offenses of an economic nature, according to the EBA experts, this goal has nothing to do with the content of the provisions of this document. Instead, setting up a body in the proposed format may increase distrust of law enforcement among the business representatives and investors, given the following:

1.The tasks and powers of the BES do not fully correspond to the current problems of economic crime in Ukraine, and the human resources that will be allocated to perform the tasks of the BES are not properly justified.

First, the draft law does not clearly define which categories of economic crimes the BES should investigate. Instead, it contains rather broad formulations that can be interpreted differently, and their implementation is difficult to control. The draft law defines the status of the BES as a “state law enforcement agency”, although, for example, in the EU, the vast majority of specialized bodies, that are involved in the fight against economic crime, operate in the executive branch.

Besides, according to the EBA experts, the maximum number of BES employees, which is currently estimated at 4 thousand people, is quite high and unreasonable. Besides, it is important to establish criteria for the effectiveness of the BES to ensure that the newly created body focuses its work on violations that pose a high level of public danger. According to the consolidated statistics of the Prosecutor General of Ukraine, in 2019, there were 1,359 criminal offenses in the field of economic activity registered in Ukraine under the articles of the Criminal Code of Ukraine, which belong to the jurisdiction of the BES according to the draft law №3087-d. Given this indicator of offenses, the projected workload per BES employee will be only 0.34 cases per year.

2. Methods for selecting the head of the BES and for determining the organizational structure will not contribute to the formation of an independent, professional institution free from political influence.

The draft law contains inconsistent provisions regarding the procedure for appointing the head of BES, which creates the risk of selecting a candidate who is not professional or honest enough for this position, as well as narrows the possibility for the public, including business, to control such appointment. It would be appropriate to adapt the selection procedure to European best practices, where the selection process should include at least one anonymous test, verification of the candidate’s previous experience, and a clear mechanism for appealing the candidate’s results.

The requirements for the director of BES provided by the draft law do not meet the requirements for “A” category positions, following the Law of Ukraine “On Civil Service”. Besides, some provisions of the draft law raise doubts among the EBA experts regarding the political independence of the BES. Thus, the document provides that some important aspects of the body’s functioning are dependent on the discretionary decisions of the President of Ukraine, although the performance of such functions is beyond the President’s authority and may create preconditions for improper interference in BES’s operations.

3. The level of salary of BES employees.

The draft law provides that the BES employees with special shall have a minimum level of salary of at least 20 living wage. However, other specialists, who would be the basis of the analytical function of BES, do not fall under such conditions of remuneration amount. This can create problems in finding and hiring a key category of staff for the newly created body.

4. Possible reputational risks for BES.

There is a risk that the BEB will be perceived as a renewed tax police rather than a qualitatively new analytical body, as the draft law proposes changes to certain laws by simply replacing the phrase “tax police” with “Bureau of Economic Security of Ukraine”. This nuance is exacerbated by the possibility of employment of current tax police officers in the newly created body through office transfers. Instead, a transparent competitive selection procedure based on professional qualities, knowledge, and skills should be envisaged.

5. Mechanisms for monitoring the activities of BEB cannot be considered sufficiently effective.

The European Business Association considers it necessary to ensure the appointment of all BES employees under the open competition procedure with the participation of representatives of the Public Control Council in competition commissions. And thus, create a safeguard against the transfer of discredited old staff from the tax police, SBU, the Ministry of Internal Affairs. It is necessary to unite the investigation of all economic crimes against the financial interests of the state in the work of one body.

We also propose to ban the assignment of military ranks to BES employees, presenting firearms to the employees as state awards, and the use of firearms by law enforcement officers. To ensure the physical protection of employees in the performance of their duties to involve special forces of other law enforcement agencies. We believe that these rudimentary norms create a favorable environment for abuse of office and abuse of power.

Svitlana Mykhailovska EBA Deputy Director for Advocacy
The European Business Association is ready to join the discussion and development of a new document that could consolidate the best provisions of the draft law №3087-d and previous draft laws, which provided for the establishment of a separate body to investigate crimes in the field of economic activity. The business believes that the work of the new body should be based on such principles as political and operational independence, focus on analytical functions, demilitarization, transparent selection of management and staff, control by the public and supervisory bodies, increased responsibility for abuses of power.

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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