KYIV – The Verkhovna Rada passed another bill to complete the architecture of establishing a separate court to prosecute corrupt public officials on June 21, but failed to revise clauses that make it possible for graft cases to skirt the judiciary body.
Choosing to vote for creating the High Anti-Corruption Court (HACC) in its entirety, instead of the optional two readings, 256 lawmakers voted in favor of President Petro Poroshenko’s bill.
Yet, revisions to last week’s principal bill for how the court functions never made it to the agenda for this week’s plenary sessions in Parliament although they were registered on June 14. Amendments were supposed to send existing graft cases, including appeals, to the newly formed court, not to existing courts that currently hear them.
The renewal of a $17.5 billion loan deal for Ukraine’s feeble economy from the International Monetary Fund (IMF) has partially been tied to finally creating a court that hears corruption cases. It’s supposed to legally adjoin the two previously created institutions: National Agency Anti-Corruption Bureau (NABU) and Specialized Anti-Corruption Prosecutor’s Office (SAP).
A bottleneck for prosecuting crooked officials exists in the courts, Verkhovna Rada Chairman Andriy Parubiy implied on Ukrainian television on June 7. Fifty of the 138 corruption cases that NABU and SAP have submitted since their inception in 2015 to Ukrainian courts aren’t being considered – some haven’t been examined for six months.
At stake is an additional $2 billion IMF disbursement in the bailout program that ends in March 2019. Kyiv has received only $8.4 billion so far and is behind schedule in meeting other benchmarks.
Chief among those criteria is raising household natural gas prices to market prices, which hasn’t happened in almost two years, so that they meet cost recovery levels and do not drain the state budget via subsidies. That leads to maintaining a budget deficit of revenues and expenditures that don’t exceed 2.5 percent of gross domestic product.
Certain unpopular changes will be more difficult to make the closer Ukraine comes to next year’s dual nationwide elections. In 2019 presidential elections are scheduled in March with parliamentary elections in October.
“We agreed that it is now important for parliament to quickly approve the supplementary law submitted… to formally establish the court, as well as the necessary amendments to restore the requirement that the HACC will adjudicate all cases under its jurisdiction, including all appeals of relevant first instance court decisions,” said IMF head Christine Lagarde in a June 19 statement, following a phone conversation with Mr. Poroshenko.
She continued: “We also agreed to work closely together, including with the government, toward the timely implementation of this and other actions, notably related to gas prices and the budget that are critical to allow the completion of the pending review under Ukraine’s IMF-supported program.”
Ukraine’s gross external debt exceeds $116 billion as of April 1, according to data provided by the country’s central bank. External government debt equals more than $10 billion for this and next year, of which two-thirds is owed to international lenders like the IMF, the World Bank and the U.S.
“Overall, the latest IMF statement suggests that the fund is going to maintain a tough stance on Ukraine, though we continue to think that the budget issue mentioned by Lagarde could be resolved without having parliament amend the 2018 budget law,” Kyiv-based Dragon Capital said in a note to investors. “As we said before, if all outstanding issues are settled by the end of June, Ukraine could realistically host an IMF mission in July and have the next loan tranche approved by the IMF Board in August or September.”
Also passed on June 21 was a technical bill related to the anti-graft laws that brings legislation into line with the current Law on the Judiciary and the Status of Judges.