MPs Want to Deprive the Security Service of Ukraine of Means to Put Pressure on Businesses

There are proposals to make amendments to the President’s draft law No. 8068 “On National Security of Ukraine”, which would deprive the Security Service of Ukraine (SBU) of all its functions concerning economy and fight against corruption.

The said changes to the law draft were submitted by Member of Parliament, head of the Verkhovna Rada Committee on Foreign Affairs Hanna Hopko.

“Now Ukraine has the unique chance to take away the possibility of putting unlawful pressure on businesses from the SBU, which is one of significant obstacles to getting more investments to Ukraine, — says Hanna Hopko. — The SBU must stick to their functions — fight against terrorism and subversives. The SBU reform is long overdue, it is the requirement from our western partners and the NATO”.

In case the proposed changes are approved, the SBU is no longer to conduct counter-intelligence and investigative activities in economy domain and fight against corruption.

The SBU’s right to investigate economic as well as corruption crimes was taken away a long time ago.

However, while taking away the function of investigation in such cases, lawmakers left the SBU with such functions as “ensuring economic security” and “combatting corruption”.

This kind of authority enables the SBU officers to take investigative and counter-intelligence actions in that sphere. It means they can do tapping, employ agents, be involved in special operations such as SWAT assault-style searches, delegate their people for work at state bodies – formally to prevent violations, but de facto to have their “overseers” in places they need to.

This should work the following way: operational staff discover the crime without the prior opened criminal proceeding and, under the instructions, must report this fact to the state body, which is authorized to investigate the said crime. Then the state body itself, for instance, the National Anti-Corruption Bureau, must continue with the investigation.

In practice, however, the SBU staff having discovered such violations open negotiations with the potential defendants about withholding the facts from the investigation and covering it up. Prime example is the recent arrest of the SBU official who demanded a bribe of three thousand USD from every person who had forged documents for residing in Ukraine.

MPs who propose the changes to the law draft believe that the National Anti-Corruption Bureau of Ukraine should be responsible for fighting against TOP-corruption, since it has the authority to investigate the corruption as well as to take operational action.

The National Police, in its turn, is tasked with investigating smaller-scale corruption and economic crimes along with investigative work. The State Bureau of Investigation will soon start working on separate economic crimes, as well as future substitute for the “tax police”. Therefore, leaving these functions to the SBU is nothing but doing the same job twice and additional burden for the state economy and budget. The SBU will still be keeping their other functions such as combatting terrorism and defence of sovereignty.

According to the official report from the Security Service of Ukraine on the number of cases that went to court, the quarter of the criminal proceedings investigated by the SBU were not in their jurisdiction. 200 out of 889 cases transferred to court should have been investigated by a different law enforcement body. Instead, in 2016 – the third year of war – the number of espionage cases (Article 114 of the Criminal Code of Ukraine) sent to court was zero.

Keep in mind that Ukrainian Security Service is the biggest one in Europe.

For instance, according to the law, the number of the SBU employees is 31 thousand people, while the total number of employees of all secret service of the UK (MI5 — domestic intelligence, MI6 — foreign intelligence and NCA — National Crime Agency for organized crime intelligence) is just about 11 thousand.

When Member of Parliament Serhii Leshchenko requested information for statistical information on economic security work, the SBU replied that “statistical indicators of counter-intelligence activities of the SBU bodies and departments constitute a state secret and as such must be protected”. The SBU classified declarations of their employees as well.

“Numerous journalist investigations reveal that the anticorruption agenda of the SBU is led by individuals unable to explain where their enormous mansions and luxurious automobiles come from,  — said Vitaliy Shabunin, the Anti-corruption Action Centre Head of the Board. Instead of fight against corruption, we see illicit enrichment of the SBU officers, demanding bribes and pressuring businesses should the latter refuse to play by their rules or pay “tribute”. Instead of fighting separatism, the SBU officers sell “permissions” to use forged papers allowing residence in Ukraine for $3000. All of it in the time of the ongoing war in the country”.

Characteristically, international experts and businesses have repeatedly accused the SBU of pressuring the companies and said that it is one of key obstacles to involving investments to Ukraine.

“Law enforcement bodies pressuring business is an ultimate red light for any investor in Ukraine, it is a clear signal that there is no rule of law in the country. — said president of the European Business Association (EBA) Tomas Fiala. — I often speak with investors and business owners. Their stance is clear: as long as business in Ukraine is not protected against the unlawful actions of the law enforcement people, there will be exponentially less investment in the country than in the western neighbours, thus increasing economic backwardness”.

It is worth noting that there have been cases when the SBU effectively paralyzed not just activities of separate companies, but whole branches. The prime example of it is the recent scandal with the liquefied gas market. The SBU then blocked operation of several companies-providers thus establishing monopoly of just one company, which was linked, according to the journalists, with Viktor Medvedchuk.

The SBU economic counter-intelligence interfered with medicine procurement for the terminally ill Ukrainian citizens. As soon as the state started saving up to 40% on medicine procurement through international organizations, the SBU started writing letters to the top governmental officials about the necessity to “review the mechanisms” of procurements and summoning members of the Ministry of Healthcare working groups for interrogations.

Yaroslav Yurchyshyn, executive director of Transparency International Ukraine, drew attention to the fact that the current situation with the Ukrainian Security Service drags Ukraine to the bottom of the world corruption rating.

“We analyzed why Ukraine has such low position in the “Corruption Perceptions Index”. For reference, according to the Transparency International research of the previous year, our country ended up on the very unusual for a European country 130th place. We came to the conclusion that one of the reasons is special services interfering with businesses. Under the guise of combatting economic crimes the SBU de facto blocks operation of separate companies or even whole branches of industry. Metastasized cancer of corruption, caused by these uncharacteristic for special services functions, spread to the whole law enforcement system. We now have a window of possibility to reform the SBU. The next step should be creating an adequate Service of Financial Investigations”, — says head of Ukrainian office of the international anti-corruption network.

For reference, in early April the Parliament passed the law draft No. 8068 “On National Security of Ukraine” in the first reading and will shortly vote for it in the second reading.

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