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Anti-Corruption Courts – Ukraine

February 18, 2017

About a week ago an entry appeared relating to the latest public report by the National Anti-Corruption Bureau of Ukraine (NABU).

Within the issues raised of that poorly written prose was the glaring issue of a very large number of NABU cases subject to a bottleneck within the still corrupted judicial system –  “Clearly the bottleneck, or more accurately point of due process constipation, can be attributed to the courts and judicial system.

The requirement for a specialised anti-corruption court is made not only by reason of appointing only the most unsullied of unsullied judges to such a court for reasons of integrity, but also to avoid/reduce (the probably deliberate) due process backlog.

However the functioning of the courts are not the remit of NABU – other the than busting corrupt judiciary which certainly is within its remit.”

So what is being done regarding these issues?  A dedicated anti-corruption court is an obvious requirement that has been on the political agenda (both foreign and domestic) for more than 2 years.

During those 2 years (and more) the subject has been raised during numerous private conversations with diplomats.  (Several ideas have been muted, including the placement of foreign judiciary within the ranks of any Ukrainian anti-corruption court – an idea it has to be said that the blog somewhat pooh-poohed for constitutional reasons and the undoubted appeals regarding the finding of guilt in a Ukrainian court by a judge that is not a Ukrainian citizen – at least as far as a court of first instance is concerned.)

So where is Ukraine at insofar as getting anywhere near the creation of a dedicated anti-corruption court (and appeals) system, and how and who will appoint Ukrainian judges unsullied by corruption to such a critical institution?

Who decides which judges are unsullied (or unsullied enough) to sit on the bench of an anti-corruption court (and necessarily independent appeals court chamber).  As always, who decides who decides?

It would appear that Egor Sobolev, Chairman of the Verkhovna Rada Committee on Corruption prevention and Counteraction (and one of the few MPs who seems to be morally upright when it comes to a genuine stance against corruption) together with the rather scholarly and fairly effective NGO Reanimation Package of Reforms (RPR) have arrived at a solution not dissimilar to that of Croatia and Slovakia – with the necessary Ukrainian twist regarding who decides who decides upon the judges appointed.

Draft Law 6011 is the result (though whether it will pass without significant tinkering, or remain without significant amendment once passed – if it passes at all – remains to be seen).

When it comes to who decides upon the judges selected for an independent and purely anti-corruption orientated court, and a specialised and a independent chamber within the Supreme Court to deal with anti-corruption appeals, it is expected that 33% of the assessment/selection panel will be foreigners.  (Which foreigners and from where is unclear but that is a matter that will be swiftly dealt with by longstanding foreign funders of judicial reform no doubt.)

The remaining Ukrainian members of the selection committee cannot have been part of any other judicial selection committee (or presumably by extension involved any half-arsed attempts at judicial lustration).

Only candidates selected by the committee charged with selecting anti-corruption judges can be considered for the role.  No other committees nor candidates will be allowed influence, interference or participation.

As already stated, successful judges will form an insulated anti-corruption court and also within the Supreme Court a dedicated appeals chamber will be created.  Pay and perks for successful candidates equal to the highest paid judiciary in the land.

The staffing of this new institution that will insure its administrative functioning, once the judges are selected, will not be the responsibility of those judges alone.  That staffing will also involve  the committee that selected the judges.

Importantly, indeed critically, the anti-corruption judicial entities will have its own independent and dedicated budget proscribed into law, will be situated in a separate and dedicated building, and employing a separate insulated documentation system.  In effect the anti-corruption judiciary work place will be quarantined as far as is practicable to do so, both physically and electronically, from the rest of the Ukrainian due process system.

If it all seems too good to be true, for if adopted unchanged it would mark an enormous stride forward in the anti-corruption fight, it probably is.

Nevertheless, the attempt at quarantining the selection committee free from members of other judicial selection committees (and loading it with 33% of foreigners) is a valiant attempt at keeping the undoubted political interference in committee selection to a minimum.

The physical and electronic workplace quarantining of those eventually selected is simply necessary in an environment where even if the processes and institutions become more  independent and transparent, a majority of those within the legislature and executive remain for the most part morally and ethically bankrupt.

We will now see how long it takes Draft Bill 6011 to be considered by the Verkhovna Rada.

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Something like a win for Romania (and the Black Sea region)

February 16, 2017

For several years President Iohannis and Gov RO have been pushing for a greater NATO presence in the Black Sea region and on (and perhaps under) the Black Sea itself – subject to the restrictions of the Montreux Convention.

On 16th February NATO Secretary General Jens Stoltenberg announced that NATO will indeed increase its presence in the Black Sea – “We will increase the presence in the Black Sea, but it will be a defensive presence, and in any case will not be sent to cause conflict, provocation or an increase in tension – this is one element in the increase of NATO defense forces.”

Quite right too.  There is no reason to cede or be seen to cede any influence in the Black Sea due to The Kremlin’s illegal annexation and subsequent militarisation of Crimea.

Perhaps Odessa will see far more frequent NATO vessels calling in.  At the very least an increase from a few a year to several.

However, it is also said that agreement was apparently reached by 13 NATO members for the multinational brigade in Romania to receive additional funding, or officers, or troops or aircraft from their respective nations.

Not before time it appears President Iohannis and Gov RO have achieved something of a win after several years of maneuvering.  After numerous years of banging the drum that Ukraine needs to continue to improve its far below optimum relations with Romania, it would be foolish not to take this opportunity to the drum once more.

Consider it banged!

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Glencore strategy

February 15, 2017

Readers will undoubtedly recall the recent involvement of Glencore, via financial smoke and mirrors, with Russia’s Rosneft and part of a 19.5% stake therein.

Quite how that will now work out regarding continuing sanctions, a White House currently (albeit perhaps temporarily) seemingly nothing short of dysfunctional and already losing senior appointees due to Russian “issues” remains to be seen.

However, Glencore also operates in Ukraine – on an increasingly diminishing scale.

Whether the tumult of 2014 within Ukraine was the cause of a decision to, if not quite exit, then certainly scale back operations in the country is perhaps something to ponder vis a vis a clear decision to globally consolidate rather than expand via “big deals” for corporate financial reasons.  (Less than a year before the Rosneft deal, Glencore went to its shareholders to raise funds.)

Where once it owned close to 30 agri businesses, and whatever the reason for the Glencore decision, ever since 2014 it has been gradually but significantly reducing its operations in Ukraine.  Until very recently almost untouched are the assets in the sea port cities of Odessa and Mykolaiv.  Other regions have seen a complete withdrawal.  Mykolaiv is now witnessing a Glencore withdrawal too.

The latest and last beneficiary  of Glencore owned grain elevators being sold off is Prometheous (owned by Rafaello Goroyan) which now hold 18 grain elevators having taken the last 6 owned by Glencore (or a Glencore subsidiary to be precise).

(Previous purchasers of Glenccore agri assets were companies within the Privat empire and Novaagro in Kharkiv (owned by Sergey Polumysny)

Although Glencore still has some assets in Ukraine and continues to act as a commodities trader in the country, a reader may ponder just what the Glencore “grand plan” is.  Agriculture will definitely overtake the metals industry in the Ukrainian economic mix (perhaps it already has) becoming the largest single industry (and perhaps employer).  The only way is “Up” for the foreseeable future for Ukrainian agriculture.

Yet despite Glencore’s obvious interests in mining in Russia, the decision to expand its investment in Russian oil at a time when sanctions were and remain in place is also interesting.  It was presumably based on an expectation of sanctions ending fairly swiftly with a Trump White House.

However following the Flynn affair it will be politically difficult to cancel any Russian sanctions any time soon for President Trump (and it would seem the Flynn affair makes things easier for Senators like McCain to codify those sanctions making it almost impossible if that happens).

As the Flynn affair is without doubt not the only self-inflicted Russian issue that will again bite the current Trump White House Administration over the next 6 months (sooner or later somebody will look at Rybolovlev far more closely) it may yet prove that President Trump will actually harden the US position against The Kremlin through having no other political room to maneuver.

Nevertheless, somebody at Glencore knows what they’re doing and must see a slightly different picture to most of us – which is perhaps why it makes $ billions and we don’t!

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10% interest mortgages – Ukrgazbank (not the answer)

February 14, 2017

Ukrgazbank and Ukrbud, a large construction company have teamed up with the bank offering 10% interest mortgages for those buying Ukrbud property.

10% interest is incredibly low for any form of (legitimate) lending Ukraine.  Historically interest rates on any form of loan has been double and even treble that figure.  Needless to say it seems likely that Ukrbud will fairly swiftly shed any unsold units rather swiftly, and quite possibly will sell much of what they plan to build before it is built.

Good for Ukrgazbank, good for Ukrbud and good for the home purchaser.  A little stimulus for the property market too.  Perhaps more banks and builders will follow suit with similar agreements.  It’s all welcome of course, but it’s not really the answer (although it could be part of it).

So why is it not the answer?

Obviously there are limitations upon just how much and how swiftly Ukrbud can build, and regardless of the extremely attractive (for Ukraine) 10% interest rates on borrowed money, the problem is that construction costs and property prices in Ukraine are simply too high.

The answer for Ukraine is to find a way to reduce the construction costs of housing (by a significant amount) and produce something close to affordable housing.

Thus perhaps Ukraine should arrive at a definition of what it deems to be affordable housing and then task the Oblasts with providing the social and income data to create an index?

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Cyborgs – The Movie

February 12, 2017

Most readers will remember the classic propaganda films such as Triumph of Will (1935), and Casablanca (1942)  and perhaps even Confessions of a Nazi Spy (1939) – films (among many) that were meant to mold the public consciousness at a time of war.

The Cold War too, saw a continued cinematic line of propaganda that sought to unite the constituency pysche around an awareness of threat and national unity in defiance of competing propaganda (among other reasons).

Just under a year ago the blog listened to, and latterly chatted at considerable length with, an Ambassador from an EU nation regarding Russian propaganda.

The Ambassador being an erudite and insightful individual raised the point that despite numerous signals and an awareness of heightening propaganda emanating from The Kremlin for several years prior to events in Ukraine and the subsequent gushing forth of such nonsense immediately prior to the illegal annexation of Crimea (and ever since) questioned why there had been no  interest (or perhaps encouragement and/or collaboration) with the film industry to tackle the issue when it had worked so effectively before.

Indeed at the time much to the ire of said Ambassador, the only related movie due to be released was Snowden which hardly depicted him as the treacherous individual he is.  Perhaps an Assange movie will depict him as some form of Messiah?  (Maybe it is little wonder some such as Daniel Domscheit-Berg left the organisation long ago.)

Perhaps there will now be a growing interest from the cinematic community with Kremlin shenanigans now being overtly recognised across Europe (France, Germany, Italy and The Netherlands will feature on the Kremlin (and Wikileaks) agenda this year) and, of course, most recently the USA.

How effective such propaganda was and/or will be undoubtedly will become a field of numerous academic studies yet to be published.  It is therefore not for the blog to draw conclusions based upon very little.

At present, for the purposes of this entry, it is necessary only to accept that there was an intention to utilize propaganda (notwithstanding active measures and reflexive control) and that such propaganda was demonstrably delivered effectively to the point whereby dedicated myth-busting organisations (both voluntary and State run) emerged to counter Russian efforts – rightly (and too often belatedly) so.

And so to Ukraine, now in its third year of war with Russia and marking another anniversary of the Minsk document failing to deliver even a ceasefire in the years since it came into existence.

Arguably the only film from Ukraine relating to the recent tumult (and that portrays events that led to the ouster of Yanukovych) that has been produced (and seen any recognition outside the nation) has been Winter on Fire.

Now however “Cyborgs” is to hit the big (Ukrainian) screen soon (and probably streamed to the diaspora) on 6th December – a date no doubt deliberately chosen to mark the eventual fall of Donetsk Airport.

Needless to say Cyborgs relates to the dedication of those who defended Donetsk Airport valiantly for so long and against such odds.  Hopefully, considering there are many Cyborgs still alive and well, whatever is released will meet with their approval and not go too far into the realms of fantasy and unnecessary myth-making.

The place of the Cyborgs is already cemented within contemporary Ukrainian history without the need for unnecessary embellishment.  Their criticism would undermine the obvious propaganda that will come with this film.

However, accuracy aside (albeit anybody who takes the film The Battle of Britain (1969) as accurate is misled), the target audience is clearly Ukrainians and the propaganda will be aimed, as all films released during war, at consolidating the national constituency around the Ukrainian identity and the (genuine) heroics of those that are prepared to give (and gave) all.

Yon aforementioned Ambassador may still be dismayed that a continuing war in Europe now in its third year has not galvanised western cinema into action, but eventually the Ukrainian film makers have made a start.  It now remains to be seen how effective at identity consolidation and perception framing this film will be when most have long since chosen their  patriotic stance.  It may however, re-energise some wearying souls.

Thus how it would be received outside of Ukraine would be interesting when it comes to shifting perceptions nevertheless.

(It’s probably just as well there is no House of Cards or Yes Minister known to be in the Ukrainian pipeline.)

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The NABU Six Month Report

February 10, 2017

The National Anti-Corruption Bureau of Ukraine (NABU) has released its 6 month report to the public.  Unfortunately for most readers the 68 page report is only publicly available in Ukrainian – or at least at the time of writing no English version has been found hidden within the dark and murky corners of the Internet.

Nevertheless, the report can be found here.

Some interesting numbers include the fact that currently NABU is thus far investigating 264 corruption cases that amount to UAH 82.9 billion in nefariously acquired assets.

Put in context, that figure exceeds the forecast for the budget deficit of the Ukrainian nation in 2017.

Currently NABU has arrested funds in the amounts of UAH 601.94 million, $80.16 million, €7.41 million and £3170, notwithstanding a lot of immovable and movable property – all of which has yet to find its way back to the State coffers due to a distinct lack of court verdicts.

Interestingly, and perhaps surprisingly, it appears only 23% of current investigations involve the heads of State or municipal owned companies.

Clearly the bottleneck, or more accurately point of due process constipation, can be attributed to the courts and judicial system.

The requirement for a specialised anti-corruption court is made not only by reason of appointing only the most unsullied of unsullied judges to such a court for reasons of integrity, but also to avoid/reduce (the probably deliberate) due process backlog.

However the functioning of the courts are not the remit of NABU – other the than busting corrupt judiciary which certainly is within its remit.

Looking at the current state of play, the most obvious tool still deliberately being withheld from NABU is the ability to conduct its own SIGINT by way of wiretapping, (so perhaps COMINT would be more precise).  NABU is still reliant upon the SBU, which clearly has implications regarding the integrity and confidentiality of NABU operations.

Will the Verkhovna Rada find the political will to pass the pending legislation that will allow NABU (with due cause) the ability to wiretap those very parliamentarians and others within the political, and institutional elite?

It seems very unlikely, and thus corruption among the elites, which is a rather diplomatic way of putting a veneer upon what is in effect organised crime more often than not, is unlikely to be tackled anywhere near as effectively as it could and should be.  Organised crime is often (rightly) cited as a threat to national security by many nations – ne’er more so can it be so when a nation is at war, which Ukraine is.

Nevertheless the NABU report has to be welcomed – not only for reasons of transparency but also because it clearly identifies (what everybody already knows) the points of constipation within the process that prevent justice being seen to be done – and the continuing lack of political and institutional will to correct matters.

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Minic returns to business with numerous Bills pending

February 9, 2017

Within the Ministry of the Economic Development and Trade sits the Department of Innovation and Intellectual Property, which it appears will now need a new director.

Helena Minic has stated that she intends to leave and return to the (presumably telecoms) business world from whence she came.

To be entirely fair her time in post cannot be seen as a failure with several hard lobbied Cabinet of Ministers Decrees getting an approving nod (1026/2016 for example).  However the timing of her departure does not exactly occur replete with successes either – for there is much done that has yet to be consolidated via the far more hazardous route of the Verkhovna Rada.

When announcing her departure, Ms Minic stated “We have also developed a strategy for the development of high-tech industries for Ukraine, intensified cooperation with the World Bank, Israel and other countries in terms of innovation, and launched a project to create a network of technology incubators in Ukraine.”

Jolly good.

But there is an entire raft of draft legislation in which she participated and/or oversaw under consideration within Verkhovna Rada committees (Bills 4579, 4571, 4629, 5694, 5699, 6023 and more) that have yet to get past committees and survive not only a first reading (and subsequent attempts to tweak the text) but jump the second reading hurdle to become statute.

Thus a reader (perhaps unfairly) may consider the wins little more than pushing against open doors, whereas all that is pending far more difficult to defend, achieve and consolidate within national statute.

Of course Ms Minic has every right to return to the private sector having left it to come to the aid of Ukraine.  A laudable act, and an act that has a professional tenure to it if private sector executives are to remain relevant within the private sector.

The private sector, after all, is not like government or civil service work in Ukraine where even getting fired in reality means only a six month vacation before being reappointed.  Time out in the private sector for more than 2 years means somebody has overtaken you in ability and/or knowledge and/or replaced you because you were “out of the game/loop” for too long.

It may very well be that Ms Minic is acutely aware of this and feels she has to return to the private sector immediately.

It may also be that she has been offered a position that is incredibly hard to refuse – so she didn’t.

However even if she feels she can do no more than she has done pending the Verkhovna Rada circus, the feeling that her remaining in post until all the draft Bills had seen at least their first Verkhovna Rada reading would perhaps have been perceived as being both appropriate and more than helpful cannot be escaped,

That said, she may also be aware of how the Bills will progress – or not (for most voting outcomes within the Verkhovna Rada are telegraphed before they occur) and sees no requirement to remain – whatever the result.

In the meantime, whilst immediately following the events of 2014 Ukraine witnessed something of a brain gain at this level, many will have or will soon return to the private sector – so the leadership may be wise to look to a brain circulation policy,

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