At the request of the IMF, draft laws on BES have been developed

The Draft Law was developed within the framework of the implementation of fiscal structural reforms envisaged by the Memorandum on Economic and Financial Policy dated March 24, 2023 and June 19, 2023, in order to improve the legal framework for the activities of the Bureau of Economic Security of Ukraine, in particular, in the part related to the execution of decisions of the investigating judge, court on temporary access to things and documents and on the search of other property, as well as the jurisdiction of certain criminal offenses.

The Draft Law proposes:

► to introduce the following amendments to the Criminal Procedure Code of Ukraine:

♦ to supplement Article 41 with part four, which would provide for the provision of written orders in criminal proceedings to detective units or operational and technical units to conduct investigative (search) actions, except for covert investigative (search) actions, by a detective of the Bureau of Economic Security of Ukraine or a prosecutor who provides procedural guidance in the relevant criminal proceedings;

♦ supplement Article 165 with part five, which will improve the procedure for executing an investigating judge's or court's ruling on temporary access to the business entity's belongings and documents, providing that the said ruling is executed in the presence of a representative of the Business Ombudsman Council. The proposed amendments provide for the procedure for notifying the Business Ombudsman Council of temporary access to things and documents, as well as the rights and obligations of the Business Ombudsman Council representative and the consequences of his/her failure to appear;

♦ similar amendments are proposed to be made to part one of Article 236 of the CPC, the provisions of which relate to the execution of the decision of the investigating judge or court to authorize a search of other property of a business entity, which is carried out in the presence of a representative of the Business Ombudsman Council;

♦ to amend Article 216 of the CPC to transfer pre-trial investigation of criminal offenses under Articles 201 and 305 of the Criminal Code, which are under the jurisdiction of security investigative bodies, to the jurisdiction of the Bureau of Economic Security;

♦ to amend Article 214 of the CPCU to clarify certain powers of officials authorized to accept and register applications and reports of criminal offenses in the pre-trial investigation body;

► to amend the following:

♦ the Law of Ukraine "On Operational and Investigative Activities" in terms of granting the exclusive right to the bodies of the Bureau of Economic Security of Ukraine and the National Anti-Corruption Bureau of Ukraine, within their competence, to raise, in accordance with the procedure established by law, the issue of conducting inspections of financial and economic activities of enterprises, institutions, organizations, regardless of ownership, and persons engaged in entrepreneurial activity or other types of economic activity individually, and to participate in their conduct;

♦ the Law of Ukraine "On the Basic Principles of State Financial Control in Ukraine" in terms of excluding the National Police of Ukraine and the Security Service of Ukraine from the list of state financial control bodies;

♦ the Law of Ukraine "On Organizational and Legal Framework for Combating Organized Crime" regarding the right of special bodies for combating organized crime to provide written instructions to controlling and/or customs authorities on the grounds provided for in paragraph 2 of Article 18 of this Law, solely taking into account the rules of jurisdiction over criminal offenses provided for in the Criminal Procedure Code of Ukraine.

At the same time, the Verkhovna Rada expressed its opinion on the effectiveness of Draft Law No. 10439. MP Yaroslav Zheleznyak believes that this draft law is about how NOT to reboot the BES and preserve the influence of the Presidential Office (PO).

The MP reminded: "this is exactly the version that was developed by two well-known deputies of the Presidential Office and tried to push through at the end of December."

What is wrong with their version:

1. The draft law does NOT provide for a reboot of the BES. On the contrary, it cements the system and the people from the Prosecutor General's Office who are currently appointed to the BES. The reboot has been postponed to... a year after the war.

2. Even the selection of the head is written in such a way that it will be easy to postpone or manipulate.

3. The draft law directly violates obligations to the IMF, the EU, and the G7. That is, adoption in this form will immediately lead to a stop in funding.

The slides compare what needs to be done vs. what the President's Office wants.

What will happen next?

The Tax Committee of the Verkhovna Rada will prepare an alternative version that will allow for a real reboot of the BES, rather than another profanation to preserve political influence over this body. Based on the best practices and recommendations of foreign partners, the public and business associations.

Regarding the draft law No. 10440, MP Yaroslav Zheleznyak believes the following:

" 1. The main point is that it is proposed that the Business Ombudsman Council will be involved in searches and seizures in BES proceedings. The norm seems to sound okay, but the staff of the Business Ombudsman is a little more than 30 and there is only one office in Kyiv. And they themselves have publicly opposed this idea. That is pure profanation.

2. The possibility of instructing only BES employees to conduct investigative actions seems to be okay, but the second paragraph of the text levels it out and continues to involve the SBU/DBR. Again, profanation.

3. It is stated that the prosecutor must immediately redirect criminal proceedings under the jurisdiction of the prosecutor's office - it seems to sound okay. But such a rule already exists, and the draft law does not impose any consequences for failure to comply with this rule. In short, it is a profanation."