Time for the annual tax tinkering – Ukraine

October 26, 2016

Certain things are traditional in Ukraine when it comes to the New Year.  Among those perennials are changes to the tax system.  Indeed “с новым годом” could be a secret code for inevitable tax system tinkering.

(For example 1st January 2015 brought about changes to the Tax Code as required by the IMF when Ukraine was desperate for money.  As it no longer is IMF dependent, clearly it can be expected that the political will to further meet IMF requirements will evaporate within the Verkhovna Rada – though not necessarily within the Cabinet or Presidential Administration.  The February 2017 tranche may never arrive.)


This year Draft Laws 4117 and 3357 submitted by Chairwoman of the Verkhovna Rada Tax and Customs Committee Nina Uzjanina look set to try and (radically) change the tax system once again.

Naturally there is nothing wrong with policy (and any associated legislative) change as long as that policy is will be effective rather than ineffective – and certainly not counterproductive.  In this particular case, to be blunt, if these drafts laws are passed then for them to be effective there would ideally be a period of education as to what the system is, how it works, and the responsibilities of taxpayer and State within it.

Hence 1st January may traditionally be an ideal time to adopt a new Tax Code or amendments to it, but attempts at changing that Tax Code in November with so little time for “education” is probably not such a wise move.  This is perhaps particularly the case when part of the draft legislation effects a move from a “paper” tax administration to “e-tax” administration for commerce across the entire nation.

There is no need to go into any of the proposals within the draft legislation in detail when there are some fundamental questions to ask first.

A reader will perhaps be reminded of the still on-going debacle that is the e-declaration for the higher echelons of those holding public office.  (Although it is a good bet that almost all those required to make such e-declarations will do so, it is what follows thereafter regarding system functionability, legality, security, and those repercussions upon criminal liability that are far less certain.)

The most obvious question regarding a national e-commerce tax system is whether the entirety of its commercial entities have access to “e”, or rather the Internet.  Not only with regard to Internet coverage but also access to the hardware to actually comply with any e-commerce tax declaration.

(Who pays for the hardware will become a very prickly social/business issue too – especially for the very small business outlets.)

The next question, on the presumption the entire nation is “on-line” and possesses the relevant hardware, is whether they will actually understand the e-commerce system, and if they do, will their customers who may require (or simply) want “paper” as a result of their transaction?

Also, no differently from the e-declaration system, there will be big questions relating to data security, system integrity and reliability, and in this case actual tax payment confirmation – or not.

If the system is compromised due to poor security, how to insure the data only not missued but also is not wiped by those that nefariously enter?  How much tax would be lost between the time of the last system back-up and eventually getting it back on line?  Is Ms Uzjanina proposing a “high side” system used by literally millions of “low side” users in such a system?  Not an impossibility of course, but it would require a filter that prevented “high side” being sucked out through “low side” as the IoT is becoming quite a hazardous place when it comes to defending system integrity.

How much would all this cost?  Undoubtedly Ukraine will adopt such a system sooner or later – as it should – but is it a priority?

Arguably it could be said it will assist in bringing the black/grey economy into the white – if the system infrastructure (both hard and soft), policing, and the business will is there to facilitate it.  If that were the case the argument is that it would therefore swiftly pay for itself.  It would also remove a lot of person to person interaction with the tax authorities thus theoretically reducing opportunities for corruption.

Nevertheless, societal perceptions count, and many will ask if there are more pressing priorities for the limited budgetary funds that have to be met in the immediate term?

Needless to say if these draft laws are adopted (despite some questionable detail deliberately omitted here)  it would certainly be wise to allow for the parallel running of both paper and e-systems for a (fairly lengthy) transitional period  – not only for technical reasons, nor the fact that not all commercial enterprises will have the ability to comply with an e-system, but also for business and societal familiarity to occur.  In fact is there a reason that both systems could not or should not run?  Would it be prudent to run both?

As usual New Year approaches and Ukrainians have come to see tax legislation as inevitable as socks, aftershave and style-less jumpers/cardigans as part of the festive season.  This year is clearly no different.


The CyberJunta hack – How will the populists respond?

October 24, 2016

CyberJunta, one of the Ukrainian hacking groups has apparently (and unsurprisingly) targeted Vladislav Surkov and an email address v14691@yandex.ru purported to be used by him under the pseudonym Nikolay Pavlov.

Also compromised was an email address of a Surkov associate/underling pabnik@yandex.ru used by Pavel Karpov.

Within the documents thus far released in two pdf files file-1 and file-2 – 17.4 MB in total (with more to come undoubtedly) it has to be said there are absolutely no surprises when it comes to the tactics and instruments to be used in undermining Ukraine beyond the occupied Donbas.

Neither would the suggested time frame between November 2016 to March 2017 for implementation of destabilisation within Ukraine come as a surprise to many.  Events both external and internal of Ukraine would dictate this period as being optimal.

Clearly fermenting social unrest during the heating season when tariffs have risen so sharply requires little tactical thinking within the Kremlin when Ms Tymoshenko long-since grasped that opportunity – and she has been banging the social unrest drum for several months over the issue.

Forcing/encouraging new Verkhovna Rada elections in Spring 2017, something long anticipated, is another goal that would fit the Opposition Block, Batkivshchyna/Tymoshenko, and possibly Radical Party design.  As all are populist, if they cannot force early elections following the hardship many will face during a heating season of high tariffs then they will probably never manage to force early elections.

Plans attempting to bring about calls for a “federal Transcarpathia” are an obvious alternative to the failed Novorossiya project.  (Although not specifically mentioned, how great a role Viktor Orban would/could play in agitating the Hungarian diaspora is unknown.)

What is perhaps most informative about the documents is that Mr Surkov aka Pavlov (if the email address is genuinely one of Surkov’s pseudo-email addresses) is that it is not the most Kremlin friendly Opposition Block that is identified as the critical political machinery to push the Kremlin active measures within the Ukrainian constituency.  Neither is it the Radicals.


The main focus was/is to concentrate upon the Batshchivyna (Ms Tymoshenko’s) Party.  This because it has the best outreach/network throughout Ukraine of the 3 political parties identified that would/could dance to the Kremlin tune – wittingly or unwittingly.  It is indeed true that of the Oppo Block, Radicals and Batkivshchyna, the latter has by far the widest regional networks.

The obvious question is whether Ms Tymoshenko would willingly allow her (and it is hers and nobody else’s) party to be used to further Kremlin active measures?

If so, wittingly or unwittingly?  (And would it matter either way when it comes to issues of implementation?)

A reader is left to ponder the morality (or not) of Ms Tymoshenko and the integrity (or not) of Batkivshchyna in pursuit of its vision for Ukraine even if it meant becoming a covertly willing accomplice of Mr Surkov/The Kremlin.

To be blunt, that Batkivshchyna vision probably goes no further than Ms Tymoshenko ruling Ukraine, for there is nothing whatsoever offered by way of detailed policy (as a reader would expect from a populist) and to be frank during her nearly 20 years in Ukrainian politics, meaningful and credible policy is not something that Ms Tymoshenko has ever actually offered (let alone delivered).  Her political judgement is also somewhat suspect, for despite many years involved in grubby deals with The Kremlin/Gazprom whilst in control of UESU and Somoli Ent, she still managed to hand Ukraine the most punitive gas deal in its history in 2009.

Whatever the case, how does Ms Tymoshenko and Batkivshchyna, (notwithstanding the Radicals and to a lesser extent the Opposition Block of whom such cooperation would be expected) mitigate the revelations within the apparently hacked emails detailing Kremlin plans as authored by Mr Surkov/Pavlov?

If denying (perhaps rightly) any political activity coordinated, or even useful to The Kremlin, the fact of having been identified as the political parties most likely to further Kremlin active measures to undermine Ukraine is a rather damning frame to be placed within.

Ms Tymoshenko/Bakivshchyna (and the others) may try to label CyberJunta a presidential provocation, but that carries risks – particularly if it is not, for hacker retribution is unlikely to be kind.  Batkivshchyna (or other named parties) emails becoming public is probably not a something that would be appreciated (unless you are employed within the Presidential Administration or are a Deputy of the People’s Front), nor is it likely to contain nothing but wholesome morally upstanding text and thoughtful policy alternatives.  Scams and scheming may well dominate any correspondence, be it party or personal in nature.

To be effectively labeled The Kremlin’s best ally/option in destabilising Ukraine, wittingly or unwittingly, within allegedly Kremlin designed active measures takes some explaining even if the entire incident is a fake – for unfortunately for Ms Tymoshenko and Batkivshchyna (and more or less the entirety of the political class more broadly), anonymous pro-Ukrainian hackers probably have as much, if not more credibility with the constituency than she does.

How to respond with the minimum of political damage sustained?

If it is a fake (or parts therein are fake), then who is responsible?  The Bankova or People’s Front?  It is doubtful it was a joint project.  If not either of those two, who else benefits?


Saakashvili’s Khvylya Party begins to take shape?

October 21, 2016

On 18th July an entry appeared regarding the creation of the Khvylya (Wave) Party which had Odessa Governor Saakashvili’s finger prints all over it (even if he is not formally a member thereof).

Not much has been written about it since.  In part due to the fact that Governor Saakashvili has had one eye on recent electoral events in Georgia little has happened overtly.

Those Georgian electoral events now (almost) over and clearly Governor Saakashvili will remain in Ukraine as a result.

Therefore perhaps time presents itself to formulate the party structure both nationally and regionally to prepare Khvylya for any forthcoming elections.  Although it will still to be work in progress, something resembling leadership for the Odessa branch of the party seems to be forming.


Perhaps most surprisingly is the apparent defection from Samopomich of Anna Pozdnyakov (currently Secretary for the parliamentary faction).

Among the names floating in the wind, the most obviously leader of the Odessa branch would be the extremely competent and talented Salome Bobrovskaya.

Of the usual suspects, Teimuraz Nishianidze (head of fund/charity “For Odessa”) and Ivan Liptuga (current head of the Department of Tourism) seem likely to be part of the Khvylya regional party set-up.

From civil society/activist roots come Vadim Labas (Oberig), Harvard Grad Vladimir Shemaev, Grigory Kozma, and Alexie Prokopenko (New Generation).

Historical local governance experience arrives via Andrei Karpenko, and of local SME’s, CEO of TIS Alexander Stavinster’s name is rumoured.

Certainly a team capable of building a reasonable regional political party administration – particularly if Ms Bobrovskaya does lead it.  However, as the entry of 18th July makes clear “With Misha Saakashvili named atop the Khvylya party list, nationally 10% or more of the constituency may well have voted for it.  Without his name atop, what percentage?  3%?  5%?  Will the party cross the political threshold to enter the Verkhovna Rada via the proportional representation vote at all?”

There will be a lot of hard work for these people to do even to gain a solid foundation from which to build in the oblast where the unofficial party leader is Governor.  That said, none of the alternative political parties are especially appealing either (for one reason or another) and work in progress may yet produce something surprising (albeit not earth moving).  Time will tell.


Old feuds – Odessa Airport

October 20, 2016

In 2011 when “The Family” Yanukovych was taking a tribute from anything and everything it didn’t actually steal, raid or otherwise take control of, Odessa Airport a hitherto publicly owned asset was “privatised”.


The City entered into an agreement with “Odessa Airport development”, taking a 25% stake in the special purpose vehicle “International Airport Odessa”.

This SPV was used to attract investment of $90 million – of which the City put up 25%.  The remaining 75% supposedly to come from the other investors.

Those other investors were Viktor Levchenko, Alexander Kirichenko, Mikhail Chernetsky, Sergei Borodin, Sergei Korotkov, Alexander Shabalin, Oleg Gonchar, and Igor Posuhovskogo – notwithstanding two of Odessa’s most notorious businessmen Boris Koufman and Alexander Granovsky (whose political star is currently very much on the rise in Kyiv).

In 2001, the current Mayor of Odessa was merely the regional leader of Party of Regions (among his other activities as nefarious “businessman”).  For whatever reason Gennady Trukhanov was very much against the privatisation of Odessa Airport.  It may be that it was simply due to the fact he was not invited/asked to be a private partner, or it may be that the privatisation of the airport somehow interfered with his business activities and/or increased the cost of doing business.  He is, after all, very capable of a good scam as yesterday’s entry makes very clear.

Nevertheless, former President Yanukovych was insistent and thus Mr Trukhanov as Party of Regions leader was forced to lobby for something that he was actually against.  A reader should note that “investors” Messrs Koufman and Granovsky were very close to Alexander Yanukovych at that time.  (Indeed Mr Granovssky’s FINBANK was allegedly used to launder money for “The Family” frequently.)

A reader should also note that none of the “private investors” have ever ranked highly on Mayor Trukhanov’s Christmas Card list.  None are in his orbit.  To be blunt, he doesn’t particularly like any of them.

Since Gennady Trukhanov became Mayor he has sought to remove City Hall from the airport special purpose vehicle and re-nationalise it.  Several attempts have failed.  October 2015 witnessed a formal settlement between partners and City Hall to settle the feud.  It appears now to have been no more than an armistice.

Within that armistice/settlement there was a booby trap set by Mayor Trukhanov.

  • International airport” Odessa “pledged to July 1, 2016 to complete the construction of a new passenger terminal area of 29 thousand square meters with a capacity of 3-3.5 million passengers per year., And put it into operation no later than September 30, 2016 year.

Clearly 30th September has long since passed and the new terminal is not in operation.  In fact it is nowhere near being ready for use with no internal fit out whatsoever.  It is not ready, in part because City Hall “put a (covert) squeeze” on the construction work.

NABU has also opened a criminal investigation into the “privatisation” during the Yanukovych term.  Criminal Case 52016000000000214 was opened in late June of this year.

Without going into too much detail, on 19th October Mayor Turkhanov managed to steer City Hall through a vote to remove the City from “International Airport Odessa” SPV.  The City’s capital investment will now requiring returning – except, unsurprisingly, the other “partners” have not actually “invested” (yet) other than in a commitment to do so.

Perhaps then, in the absence of any capital return, a 25% stake in the new terminal on the terms of City Hall (rather than old Yanukovych diktats) will be the outcome.  Time will tell whether Messrs Kaufman and Granovsky will be accommodating (one way or another).  Mayor Trukhanov would consider the return of the airport to public ownership and a City Hall stake of 25% in the new private terminal something of a good outcome.

There will probably be numerous court cases regarding the re-nationalisation – or prevention thereof -despite the “investors” having never fulfilled their commitments to the existing and operating Odessa Airport.  It seems probable that City Hall will win and the current Odessa Airport will return to public ownership.  It will be a political and possibly very personal win for Mayor Trukhanov whose motivation for this, at least in part, is principled revenge over an issue he has always been against.

If Mayor Trukhanov is successful, and it appears he will be, then he too will have to be wary of revenge from the likes of Messrs Kaufman and Granovsky.  Another little local war behind the curtain may just have begun.


An impressive fraud even by the standards of City Hall Odessa

October 19, 2016

Unusually before a reader sallies forth into this entry, your author would recommend reading yesterday’s entry which by pure coincidence is very relevant to this one.

Particular attention is drawn to Mr Dubov, his control over Lithuanian company UAB Naster, and the patrons and puppets surrounding him – “It must therefore be clear to a reader why Invest Group have decided to circumvent the local system and appeal directly and publicly to the Prosecutor General when faced with yet another corporate raid by Mr Dubov (via a shell company called UAB Naster registered in Lithuania if Mr Lutsenko needs a place to start and work back from).”


“As any occultist will say “As above, so below”.  If Ms Tymoshenko, Alexander Yanukovych and Mr Turchynov (among others) have all been (and perhaps still are) the “above” – then who and what constitutes the “below”?  Corporate raiding is a “dark art” in Ukraine after all.

If persistent and informed whispers are in any way accurate, then the exact construction of that local protection is divided between the political and the legal.  It would perhaps, if whispers be true, compromise politically of Messrs Krotyk, Kmyrenko, Shyvalov, Shamilov, Deide, Lutsenko (I), and Ms Syslova and Kuzel, whilst influencing the legal would be Mr Babenko, Mr Mazark with the SBU, the police and prosecutors by Mr Podolev, and Mrs Podoleva the courts.”

It is also to be hoped that among the readers of this entry, those from the World Bank and EBRD are among them and have pause for thought by the end of the entry.  If not, perhaps the usual diplomatic IPs will bring this entry to their notice.

At the beginning of the year, Lithuanian company UAB Naster (Mr Dubov) acquired via a City Hall auction (a reader will note the deliberate absence of the word “won”) a parcel of land known locally as “The Edge” and the large building thereon for UAH 11.5 million.

On 19th October, City Hall agreed to buy “The Edge” (back) from UAB Naster (Mr Dubov) for UAH 185 million – more than 16 times what Naster (Mr Dubov) paid for it just over 7 months ago.


Clearly neither land nor building thereon, despite some refurbishment, has appreciated 16 times during that extremely short time frame.

City Hall has bought “The Edge” or “Development of the Elites” as UAB Naster has reframed/renamed it as the location to now centralise all City Hall departments.  City Hall considered no other options for relocation.  A long standing (and necessary) plan to centralise will be achieved – via what is in all likelihood an equally long standing prima facie criminal conspiracy.

The concept of placing all City Hall departments and services under on (fraudulently expensive) roof is of course not in question.  It is a good and necessary development for both City Hall and the local constituency when it comes to functionality and usability.

Indeed a proud (and in all probability now richer) Mayor Trukhanov stated “to concentrate all structural units of the city council in one building – it is a normal European practice.”   Quite – except that normal European practice doesn’t involve a Mayor renowned for organised criminality and mafia connections having his City Hall buy a property from a renowned corporate raider and criminal associate who bought the very same asset only a few months ago from City Hall at 1/16th of the price.

City Hall would have a reader to understand that the World Bank and EBRD will now finance equipping this asset acquired via criminal conspiracy and fraud.  After all by the time kick backs, and tributes are all divided horizontally and vertically from the grotesque spread on this nefarious deal, there probably isn’t the money left in the City budget to equip its newly acquired premises.

Further, whilst the centralising of all City Hall departments within “European City Hall”, along with the creation of an integral one-stop-administrative shop probably saves a small fortune in heating and maintenance costs across a sizable number of soon to be vacated city owned properties in the centre, a reader will question what will actually happen to those City owned premises?

This perversely impressive brazen fraud and criminal conspiracy simply cannot stop now when further and obvious opportunity still presents itself.  Cynically whilst the least attractive vacated City Hall real estate may be leased/rented, the reader will probably, and no doubt rightly with the passage of time, arrive at the conclusion that those involved in this blatant fraud will sell the prime centrally vacated property on the cheap to each other and then trumpet “gains to the City budget”.

Undoubtedly there will be no repercussions.  President Poroshenko has no real alternatives to Mayor Trukhanov (who will remain reasonably loyal as long as he can run amok criminally) so the Presidential Administration in no hurry to remove him, and clearly as yesterday’s entry makes plain, Mr Dubov has patronage (and puppets) too.

Irrespective of the $ figures actually involved, the sheer brazenness of this fraud and criminal conspiracy is impressive – even for Odessa which is well accustomed to such shenanigans.


Trickle down culpability – An Odessa case to watch

October 18, 2016

A reader may ponder quite rightly just how many letters Prosecutor General Yuri Lutsenko receives directly requesting him to do his part in upholding the law.

However many he receives, he can now add one more to the list – a letter from Invest Group in Odessa, part of which reads “In view of the above employees of the company Invest Group refer to you as the head of the Prosecutor General’s Office, which seeks to protect human rights, the interests of society and the state, with a request to protect our employees against threats and attacks on the part of Mr. Dubov AF.”  

In short a public and direct appeal to Yuri Lutsenko not to continue to turn a blind eye to raider attacks by Mr Dubov (and associates) – please do your job!

The problems for Yuri Lutsenko continue to mount, for his undoubted return to politics (and at a minimum with a Cabinet position) rest heavily upon actually being perceived as a Prosecutor General that actively went after the elite and put more than a few in jail.  That necessity will eventually bring him into conflict with President Poroshenko who thus far has presided by way of managing elite interests, striking grubby deals, and insuring that none of the elite actually go to jail – at worst to be found guilty in absentia.

Whilst “trickle down economics” may be a commonly known phrase to many, “trickle down culpability” is how anti-corruption is currently to be perceived in Ukraine.  Those at the bottom of the “trickle down culpability” pyramid however, are hardly set to benefit in either theory or practice.

This particular Invest Group case however, is somewhat interesting for it involves a man with no legitimate immunity, who is unambiguously connected to the very top of the Ukrainian elite yet politically toxic, and is nothing short of a professional “raider” of businesses.

Thus there are local complainants, a local structure that simply fails to control his well known nefarious deeds, a local infrastructure that acts on his behalf/defends his actions, and an elite connection that is undeniable yet intangible – whilst he is without any of the immunity complications associated with actually arresting him.

Before going any further, a few lines about Mr Alexander Dubov are perhaps in order – for most readers will have never heard of him (even if they live in Ukraine).

Mr Dubov hails from Odessa Oblast.  He finished medical school and also holds qualifications in law from Odessa National Academy.  Upon completion his mysteriously managed to land some highly placed positions in the southwest of the Oblast immediately.  For example he promptly became Deputy Director of Dombudkonstruktsiya near Ismail.  Time spent on the borders of Transnistria was not wasted and it is claimed/known that he became a major player in cigarette smuggling during the mid to late 1990’s.  He also became the Deputy Director (of General Affairs) for the Christian Charitable Foundation Trust until 2002/3.

“Foundations”, “trusts” and “charities” were/are a prerequisite for those with sullied reputations but who have political ambition – and political ambition Mr Dubov had (and still has).

He became a Deputy Director of an entity called the Ukrainian Investment Group which sometime around 2005/6 came into contact with an entity called International Investment Group.  International Investment Group was then led by Alexander Yanukovych, the eldest (and wanted) son of former-President Yanukovych.

A reader will therefore be able to predict the increased profitability and infamy of Mr Dubov within certain circles once a relationship with Alexander Yanukovych developed.

Indeed in 2007, when then President Yushenko was juggling Prime Ministers and minions of both Yanukovych and Tymoshenko sallied forth across the land offering MP mandates for $5 million for those interested and deemed appropriate/came with recommendation (with an expected return of quadrupling that investment during a parliamentary mandate – or such was the return offered to this blog when asked in 2007 if for $5 million a seat in the Verkhovna Rada would be of interest), Mr Dubov entered the Verkhovna Rada under the Batkivshchyna (Tymoshenko) Party label.

Whether or not he got a discount on the $5 million joining/mandate fee who knows – but assuredly it will have cost several $ millions for that mandate if offered the same deal that this blog was offered at that time.

Naturally, having now reached the Verkhovna Rada Mr Dubov also set up his own charity, “Foundation for Goodness and Love”.  It was the done thing and nothing unusual.  Such entities are particularly useful when it comes to voter bribery/coercion.

Once in the Verkhovna Rada Mr Dubov set about work in the font of all fonts of corruption and nefariousness – energy and nuclear power.  He became closely associated with Alexander Turchynov, the current Secretary of the National Security & Defence Council of Ukraine.  Mr Turchynov was at the time one of the staunchest of Tymoshenko loyalists.  Mr Turchynov appears to have ably assisted Mr Dubov’s parliamentary career – and with it access to numerous machinations and nefarious schemes.  Without listing them all, scams are alleged to have included the food budget for prisoners (presumably resulting in hungry prisoners), drug procurement, and (an on-going per the opening paragraphs) count of close to 100 corporate raids – mostly in Odessa, but not exclusively.

In 2012 his second term in the Verhovna Rada began (District 64, Odessa) in what must have been an extremely expensive voter bribery and/or coercion campaign.  At the time of “peak Yanukovych”, a Batkivshchyna MP from Odessa with a reputation as thoroughly sullied as his won fairly?  Clearly the previous Verhovna Rada “returns” during his first mandate, plus almost 100 corporate raids upon profitable companies provided for such expensive electoral funding.

What is perhaps somewhat unique about the corporate raiding conducted by Mr Dubov is that no entity seems to have survived once his eye (or the eyes of others for which he would ply his expertise) has been taken with them.  There is also a level of consistent brutality and brazenness about these corporate raids that set them apart from others.

Naturally not all spoils were (or are) retained by Mr Dubov.  He had (and has) patrons within the Verkhovna Rada to which tribute is necessarily paid.  Indeed rumour has it that he earned sufficient trust that during the immediate aftermath of the Yanukovych regime flight and the subsequent high positions of his patrons, that he became one of the “purses” for certain temporary highly placed political figures to re-route State funds through.

Dubrov, Yatseniuk, Tymoshenko Y, Tymoshenko E

Dubrov, Yatseniuk, Tymoshenko Y, Tymoshenko E

The “Revolution of Dignity” was not altogether rewarding for Mr Dubov however – even if you do get to stand next to Ms Tymoshenko upon her release before a less than enthusiastic crowd.

The subsequent Verkhovna Rada elections of October 2015 saw him lose his single mandate parliamentary seat and he was deemed simply to odious a figure to feature highly on any Batkivshchyna Party list in the post-revolutionary atmosphere.  Those with a public persona for thuggery, corporate raiding and extortion were swiftly distanced whilst new unsullied civil society and journalism people were actively sought – notwithstanding persistent and ugly inferences to his involvement in the preparations (and aftermath) resulting in the 2nd May tragedy in Odessa.

Mr Dubov is not man without political creativity, even if he is a brutal one.  Because political doors were/are closed due to the political climate (they may reopen), he toyed with the idea of heading the Chamber of Commerce instead.  After all, a degree of power is there to be had, and so are the invitations for drinkies and a canapes with ambassadors, economic and trade attaches, as well as foreign business leaders.  Unfortunately the Ukrainian leadership managed to grasp the prickly politics of placing a professional and notorious corporate raider as head of the Ukrainian Chamber of Commerce (although a reader will doubt they would otherwise have understood the irony).

Nevertheless, the core business of (professional) corporate raiding continues as Invest Group’s very recent letter to the Prosecutor General makes abundantly clear.  This despite Mr Dubov having been nudged into the shadows of political expediency and therefore can no longer hide behind parliamentary immunity.

With immunity gone, why then does he continue to act so brazenly and implied impunity?

As any occultist will say “As above, so below”.  If Ms Tymoshenko, Alexander Yanukovych and Mr Turchynov (among others) have all been (and perhaps still are) the “above” – then who and what constitutes the “below”?  Corporate raiding is a “dark art” in Ukraine after all.

If persistent and informed whispers are in any way accurate, then the exact construction of that local protection is divided between the political and the legal.  It would perhaps, if whispers be true, compromise politically of Messrs Krotyk, Kmyrenko, Shyvalov, Shamilov, Deide, Lutsenko (I), and Ms Syslova and Kuzel, whilst influencing the legal would be Mr Babenko, Mr Mazark with the SBU, the police and prosecutors by Mr Podolev, and Mrs Podoleva the courts.

It must therefore be clear to a reader why Invest Group have decided to circumvent the local system and appeal directly and publicly to the Prosecutor General when faced with yet another corporate raid by Mr Dubov (via a shell company called Naster registered in Lithuania if Mr Lutsenko needs a place to start and work back from).

A reader may question whether the Invest Group corporate raid is an act of Mr Dubov alone, or whether it done on behalf of others?  If so which others?  Alexander Yanukovych?  NSDC Secretary Turchynov?  Ms Tymoshenko?  Others from his Batkivshchyna history?   Perhaps the acts occur on behalf of yet others?  He is certainly skilled at what he does.  His reputation is earned.

The sensitive issue of how well acquainted Mr Dubov is with the Attorney General who was also a Batkivshchyna loyalist renowned for grubby deals behind the curtain during Mr Dubov’s two terms as a Deputy from the same party also arises.

How does Attorney General Lutsenko now act upon receipt of this letter?  It is not a case that will get any diplomatic attention (unless the diplomats that read this blog now take it under observation).  It is a case that can be easily ignored should he chose to do so – or at least act so slowly as to be too late to prevent the successful conclusion of the Invest Group corporate raid.

If he has any conflicting interests, who does he pass this off to?

If he (or President Poroshenko) want a big scalp in Odessa, and one which is also well known within the national elite circles, does the currently politically toxic and immunity-less Mr Dubov provide for something approaching a significant anti-corruption/business friendly conviction whereby the current “trickle down culpability policy” does not necessarily have to trickle down very far?

Although this case will probably get little by way of attention, it is perhaps one that should be watched as something of a bellwether simply because it presents overt political opportunities unhindered by issues of immunity that can provide publicity regarding successful anti-corruption, criminal action and bettering the business environment- or not.

Attorney General Lutsenko’s response is awaited.


Populist political guns aim at Gontareva (and the NBU)

October 17, 2016

With Ukraine no longer being dependent upon the IMF, and with international debts to be serviced more than manageable in 2017, it is perhaps no surprise that the current head of the National Bank of Ukraine (NBU) is now a legitimate political target when it comes to taking a scalp from the President.


Thus, during the week 6 – 10 October at a meeting of the IMF and World Bank in Washington DC, a brochure was circulated with the clear intention of undermining Ms Gontareva as head of the National Bank of Ukraine.

Behind the brochure sits Sergei Taruta – Verkhovna Rada parliamentarian, businessman and oligarch.

To be entirely blunt, having only recently met with senior people within these institutions in Ukraine, if the intention was to undermine Ms Gontareva (and/or the NBU policies) then it was sure to find little if any traction at the meeting of these international institutional lenders.

Whilst neither institution support specific politicians or institutional appointees (like Ms Gontareva), instead supporting State institutions and internal processes, quite clearly both fully recognise what they consider to be very positive change within the NBU under her leadership.  It seems unlikely that there would be any private conversation that would encourage her removal from office until the changes she has brought are far more consolidated and (perhaps) irreversible.


It is therefore difficult to believe that Sergei Taruta could seriously expect that a brochure clearly designed to undermine the head of the NBU would find traction among the IMF and WB elite in Washington DC.

If he did then he has a truly woeful understanding of the relationship between the current NBU management and that of the IMF and WB in Ukraine.

Needless to say, the brochure brought with it no result at the IMF and WB gathering in DC that was in any way helpful for Mr Taruta – perhaps the opposite.

Nevertheless on 14th October Mr Taruta decided to pursue to resignation of Ms Gontareva through the machinery of the Verkhovna Rada, declaring on his intentions on his Facebook page together with accusations of incompetence and corruption.

That same day the NBU website questioned the allegations, the framing of his claims, and the motivations of Mr Taruta.  Indeed the NBU requested that such machinations be scrutinised by the Ukrainian law enforcement entities.

A reader will now rightly note the true audience – that of the Ukrainian constituency.

Not to be left on the periphery, on 17th October, the ever populist Yulia Tymoshenko pushed Batkivshchyna to the fore as a rallying point for Verkhovna Rada Deputies to coalesce around to force the removal of Ms Gontareva.  Ms Tymoshenko’s main charge being that Ms Gontareva is in charge of the destruction of the State at the behest of President Poroshenko.

Her secondary charge, and clearly she has noted the real reason for Sergei Taruta’s attack on the NBU, was that the free-floating (more or less) of the Ukrainian currency has caused all those with foreign currency loans to struggle and/or default as the currency weakened significantly when finding its true market value.

Thus Mr Taruta’s attempt to attract struggling SME’s and entrepreneurs to the Taruta political sphere is now duly challenged by Ms Tymoshenko’s act – whilst both simultaneously attempt to remove a presidential appointed (Verkhovna Rada approved) scalp who is now fair play having completed many of the most unpopular IMF reforms.

Perhaps Ms Gontaerva is incompetent and/or corrupt as Mr Taruta claims.  Perhaps she is President Poroshenko’s tool for the destruction of the State as Ms Tymoshenko orates.  If so however, neither Ms Tymoshenko nor Mr Taruta have the moral high ground nor are particularly concerned about it considering the company they keep and the activities of those within their orbit – both business and political.

It is far more likely that they both simply see the IMF as now expendable and thus Ms Gontareva as no longer essential/untouchable – and therefore she is nothing more than a possible scalp for a populist “win”.

If they managed to remove her, would State policy change?  Probably not.


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