Yuri Bauman, Managing Partner of Attorneys Association “Bauman Kondratyuk”, commented on the adopted law № 5599, the so-called “law on oligarchs” to the Mind.ua publication.
In particular, in the article entitled: “On the waiting list: how the law will defeat the oligarchs”, Yuri Bauman dwelled on the main provisions of the “anti-oligarchic law”.
On September 23, 2021 – the day when the Verkhovna Rada passed a law against the oligarchs. Unfortunately, it has not become the best example of parliamentarism, unity with the people and an indicator of respect for the rights and freedoms of citizens.
To start with, the deputies hastily adopted three amendments that contradict each other. Either they were in a hurry to pass an important for the president’s rating law, or they turned a blind eye to these shortcomings so they would have questions to ask him later. It took more than a month to eliminate the shortcomings. And on November 5, Volodymyr Zelensky finally signed an “anti-oligarchic” law.
A detailed examination of the document makes it clear which branch of government is now becoming more important, how many people can suddenly “become” oligarchs, and how many will suffer from it. And most importantly – what constitutional rights of citizens are violated.
What is wrong with the definition?
Firstly, there is the question of defining the concept of “oligarch”. Thus, according to the Law, it is a person who has significant economic and political weight in public life and meets at least three of these criteria:
- Participates in political life.
- Has a significant influence on the media.
- Is the ultimate beneficial owner of an economic entity, which after the date of entry into force of this Law is a subject of natural monopolies or holds a monopoly (dominant) position in the market in accordance with the Law of Ukraine “On Protection of Economic Competition” and maintains or strengthens such a position for one year.
- The confirmed value of a person’s assets (and the business entities of which he is a beneficiary) exceeds the 1 million subsistence minimum established for able-bodied persons on January 1 of the respective year.
The first criteria are applicable to the entire high echelon of our State, including the Attorney General and the heads of central government bodies. This feature also includes persons who hold positions in the governing bodies of political parties or have financed their activities or political agitation, holding rallies or demonstrations with political demands. That is a wide range of people.
About the weaknesses of media owners
Regarding the second criteria, there are interesting innovations. A person is considered to meet a sign of significant influence on the media if he: was the owner (founder) of the media or beneficiary or controller of such owner on the date of entry into force of this Law, but lost this status before its enactment day due to where the owner (founder), beneficiary or controller of the owner (founder) of the media became a related person or a person who does not have an impeccable business reputation within the meaning of Article 10 of this Law. Related parties are people who have a joint business.
With regard to an impeccable business reputation, this term means the absence of an outstanding criminal record, inclusion in the sanctions list (during the period of validity of sanctions and for three years after their abolition or expiration) or terrorist activity. And also – no restriction on the right to hold certain positions or engage in certain activities in accordance with a sentence or other court decision.
There should also be no arrears of taxes, fees, alimony or other mandatory payments if the total amount of non-payment is equal to or exceeds the minimum monthly wage established by law for the period in which the violation and acquisition (or intention to purchase) of media is proceed for 100 times at a price that is significantly lower than the market price, or at the expense of funds, the source of which is not documented.
Besides, the Law does not specify how the “marketability” of the price will be determined, which already creates certain risks.
Imperfect business reputation in the Law includes significant and/or systematic violations of the requirements of the legislation on media, banking, financial, currency, tax legislation, legislation on financial monitoring, legislation on securities, joint stock companies and the stock market by a person.
Such an expansion of the list of people at risk of being included in the register of oligarchs may contribute to the fact that they will still hide their wealth and quickly rearrange their property and assets. The same can be done with media ownership.
However, the head of the Ministry of Justice Denis Malyuska stressed that in order to implement the law on oligarchs, the National Council of Ukraine on Television and Radio Broadcasting will soon approve the Procedure of verification of the business reputation of the buyer (potential buyer) of media.
Who and how will be “accepted” into the register of oligarchs?
Since this requires filling out an annual electronic income tax return, the law essentially equates future registered oligarchs with civil servants. We will have to show everything in order not to fall under the article of the Criminal Code on declaring unreliable information.
On the one hand, it is a correct strategy. But we already know how many lawsuits in this regard have been filed and are currently being prepared among officials, and all of them are not in favor of the state.
The register of oligarchs is formed and maintained by the National Security and Defense Council (NSDC). As you read the Law, you realize that we will have a new branch of government in the hands of the President.
Let me explain. The oligarchs are entered into the register no later than three days from the date of the relevant decision of the NSDC (based on the submission of the Cabinet of Ministers, a member of the NSDC, the National Bank, the Security Service or the Antimonopoly Committee). Furthermore, ten working days before consideration of the issue at the meeting of the NSDC on the recognition of a person as an oligarch, the staff of the NSDC sends a notice of such a meeting to the place of their registration.
A person who is planned to be recognized as an oligarch, no later than five working days before the relevant meeting of the NSDC, has the right to provide personal explanations and other documents in writing.
However, the Law does not regulate the procedure for reviewing such explanations, does not define a procedural decision that can be adopted by the NSDC as a result of reviewing explanations, which gives the NSDC excessive powers and makes a single mechanism for protecting individual rights a formality.
It is also interesting that the procedure for considering the issue of conferring the honorary title of “oligarch” is not regulated by Law.
Therefore, at the stage of studying the relevant issue, submitting a proposal to the NSDC, considering this proposal and making a decision, the person is not informed about the issue (although the issue of imposing special restrictions on it and assigning a “unique legal status”).
There is no obligation of the NSDC to make a decision on a personal hearing of explanations at a meeting at the request of a person, which indicates the authority`s discretion – to hear such explanations in person or not.
This contributes to the emergence of corruption risks and possible different attitudes of the NSDC to persons in the same conditions, the definition of a certain range of “theirs” and “ours”.
On the role of the President in this Law
In addition, the analysis of the provisions of the Constitution of Ukraine shows that neither Art. 106, nor its other provisions do not authorize the President to take, approve or “enforce” decrees by which certain citizens of Ukraine will belong to the category of those for whom special legal restrictions and additional (compared to other citizens of Ukraine) responsibilities.
As for the NSDC, in accordance with Part 8 of Art. 107 of the Constitution of Ukraine “the competence and functions of the NSDC are determined by law”. These provisions should be applied subject to Part 2 of Art. 107, according to which “The NSDC coordinates and monitors the activities of executive bodies in the field of national security and defense”.
Therefore, the relevant powers granted to the NSDC by law should relate to the coordination and control of the activities of executive bodies and relate only to the sphere of national security and defense.
In addition, in accordance with Part 1 of Art. 107 of the Constitution, the NSDC is the coordinating body “under the President of Ukraine”, and its decision, in accordance with Part 7 of Art. 107 of the Constitution, are put into effect by the relevant decrees of the President of Ukraine, which implies that this body can not be endowed with powers that the President himself is not endowed with.
About the oligarch’s protected contacts
The register of the NSDC also includes information on declarations of contacts of persons who communicated with the oligarchs or their representatives. How exactly is this done and how can it be controlled? Jokes have already begun that an officer of the Security Service of Ukraine will be assigned to each deputy and their assistant to track him down. Of course, they will do it with those who are not in the circle of “ours”.
Jokes aside, according to Part 6 of Art. 8 of the draft law № 5599, violation of the obligation to file a declaration of contacts of a public servant with a person included in the Register of Oligarchs, or his representative, is the basis for bringing a person to political and/or) disciplinary responsibility.
You have to admit, this is an effective mechanism for influencing top government officials, isn`t it?
So, when will the system of deoligarchization work?
Regarding the global prospects of the draft law № 5599, it is worth mentioning the decision of the European Court of Human Rights in the case “Polyakh and others v. Ukraine” (application No. 58812/15). In its judgment, the court noted that the lustration law applied to a wide range of persons and dismissed the applicants only on the ground that they had held civil service positions for more than a year during Viktor Yanukovych’s presidency.
It was also pointed out that “lustration” is applied to individuals when their guilt is proven in each case, and not as a tool for formal dismissal.
Thus, the only question is when the Law of Ukraine “On the prevention of Threats to National Security Related to the Excessive Influence of Persons who have Significant Economic or Political Weight in Public Life (Oligarchs)” will be “multiplied by zero” by the European Court of Human Rights.
But the “legal death” of the Law against the oligarchs will happen later. For now, the beginning of the campaign for the next presidential election in Ukraine has been announced.
Yuri Bauman, Managing Partner of the Attorneys Association “Bauman Kondratyuk”.