KYIV – Ukraine’s chief tax and customs official, Roman Nasirov, was placed under arrest for two months on March 7, following a Kyiv district court ruling on embezzlement charges.
Authorities accuse him of defrauding the state of $74 million for the benefit of fugitive ex-lawmaker Oleksandr Onyshchenko in a scheme involving state-owned natural gas producer Ukrgazvydobuvannya.
Both have denied the accusations.
Through his lawyers, Mr. Nasirov, 38, said he will appeal the ruling and not post the bail of $3.7 million, which would require him to wear an electronic monitoring bracelet.
His arrest is “turning out to be the most important development in Ukraine since the 2014 [Maidan] revolution,” wrote Maxim Eristavi, a non-resident research fellow with the Washington-based Atlantic Council and co-founder of Hromadske International, an independent news outlet based in Kyiv.
“First, Nasirov is the highest-ranking government official to face the real prospect of jail time over corruption charges in a country that is notorious for pervasive yet unpunished graft,” Mr. Eristavi wrote in The Washington Post. “For millions of Ukrainians, seeing such a powerful official as a defendant in court is something of a catharsis: It has never happened before. Third, this is a do-or-die moment for the newly created National Anti-Corruption Bureau, which put the case together.”
The former investment banker who once worked for Kyiv-based Concorde Capital, was suspended from his post as head of the State Fiscal Service on March 3, pending the embezzlement investigation.
An MBA degree holder from the University of East London, Mr. Nasirov declared an income of over $135,000 for 2015. He also has U.K. and Hungarian citizenship, according to prosecutors, in contrivance of Ukrainian law. He also didn’t initially declare owning a £120,000 London residence in his 2014 income declaration, according to public procurement and finances watchdog Nashi Hroshi.
A day after he was detained, the International Monetary Fund indicated on March 4 that it would loan Ukraine an additional $1 billion as part of a $17.5 billion bailout package, bringing total disbursements to $8.3 billion.
The Washington-based IMF has urged Kyiv to root out entrenched graft for future disbursements. Additional measures to unlock future installments, according to the most recent IMF memorandum, include the creation of an agricultural land market and re-calibration of the nation’s pension system whereby retirees receive money generally based on the amount of work they put in during their careers.
“However, we expect fierce opposition from Ukraine’s populist parties in Parliament, possibly enough to derail any measure. Ukraine’s business community supports the launch of the [agricultural land] market, which will offer a much-needed boost to the economy. Ukraine is among the few countries in the world without a freely operating agri-land market,” said Alexander Paraschiy of Concorde Capital in a note to investors on March 9.
The IMF’s board is expected to approve the next installment in the second half of this month.
Meanwhile Mr. Onyshenko, the former lawmaker, fled Ukraine in July before he was stripped of his parliamentary immunity from prosecution.