Fighting coronavirus may become a cause for large-scale embezzlement of state budget funds

The Ministry of Health (MoH) has prepared a draft law to improve the effectiveness of the fight against COVID-19. The Ministry has already praised the project.

At the same time, an analysis of the text which is at the disposal of the Anti-Corruption Center indicates that a pandemic can be used for abuses of procurement.

The MoH, for example, proposes to procure from procurement procedures and Prozorro procurement “goods, works or services necessary to take measures to prevent the emergence and spread of coronavirus disease (COVID-19), and to locate and eliminate its outbreaks and epidemics”. It is proposed that the list of such goods, works and services be approved by the Cabinet of Ministers.

“In practice, this means that any governmental entity will be able to buy the list determined by the Cabinet of Ministers without following any specific procurement procedures. And most importantly, even the publication of information about what to buy, from whom and at what price is foreseen, ” says Olena Shcherban, a board member of the AntAC.

In particular, AntAC experts will emphasize that the legally available options can be used to make effective, rapid purchases of coronavirus protection. The current law allows the use of negotiation procedures in urgent cases, including during epidemics, and the situation in Ukraine and in the world with the coronavirus absolutely meets these criteria, AntAC experts say. At the same time, they point out that the authorities obviously do not want to use the procedures already provided, since they require the publication of information on prices and sellers in Prozorro.

In addition, the proposed rules are formulated in a way that will actually allow the government to include in the list any goods, works and services: all that is needed to do this is justify their need to fight the disease. For example, if the government decides to build a new hospital, then it will be able to choose a constructing company secretly without any tenders – even if the hospital can only be built after the epidemic is over.

To make such purchases, the draft also proposes to allow 100% prepayment for such goods and services or works.

“Unfortunately, in practice, there are examples where such a one hundred percent prepayment was used to pay shell companies, and the state never received any deliveries. For example, in 2014, the MoH lost over 50 mln UAH for antiretroviral drugs. The company received a prepayment and disappeared, ” says Olena Shcherban.

The AntAC reminds that, in 2009, the government also bought medicines to combat the so-called “swine flu” – A (H1/N1). Then, under the guise of an epidemic, Yuliya Tymoshenko’s government bought the drug from an intermediary for price 5 times more expensive than it could buy from the manufacturer.

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