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State Fiscal Service – A much tighter leash required?

August 24, 2016

Last week the blog had a chat with an old friend not seen in several years – The Chatham House Rule applies.

This friends also happens to be an acquaintance of Roman Nasirov the Head of the State Fiscal Service – and the man responsible for 4 (and counting) reprimands issued to Yulia Marushevska, Head of Odessa Customs – and thorn in the side of long-standing nefarious and criminal schemes therein.

There is open warfare between Ms Marushevska (representing something approaching transparency and progress) and Mr Nasirov (representing the retarded, cancerous and corrupt old system).  Their Facebook diplomacy is bitter and barbed – as their timelines unambiguously document.

Ad hoc commentary regarding this on-going battle can be found sprinkled throughout historical entries of the blog – just use the “Search” option on the “Home Page” if interested.

Anyway, the chat revealed a Roman Nasirov that is incredibly bright, was a very good  and high earning professional in the private sector, and generally a reasonable and reliable individual – that is until he was offered and accepted the role as head of the State Fiscal Service where upon the blog’s acquaintance says of Mr Nasirov that he has become an entirely different and thoroughly odious person.  The conclusion being that he has sold his soul (for a lot of money) and continues to do so.

It happens.

Mr Nasirov is not the problem, but is the current face of the problem.  Those to whom his soul was sold are the problem.  That is not to excuse Mr Nasirov of his crimes (literally) whilst doing the bidding of others.  He is entirely responsible for the choices he has made, and continues to make.

There are of course many “interests” that would like to see Ms Marushevska sacked, yet thus far Mr Nasirov has not had the courage to do so.  To be fair, in doing so the ire of the very active activists, (not to mention militants) within the civil society of Odessa would certainly result.  The US, which is very supportive of the anti-corruption efforts made by the team led by Ms Marushevska, would also be far from impressed to see those reformist gains rolled back following any sacking.  The EU would also raise a concerned eyebrow should progress be reversed.

However the SFS under Mr Nasirov’s control is naturally not entirely focused on ousting Ms Marushevska – especially as for the time being it can, and is, circumventing her.  The ports of Odessa are also not the only area in which the SFS has a particularly cancerous touch and from where fortunes can be solicited.

The issuance – or not – of VAT is a major problem for those that have to deal with the SFS seeking legitimate refund, and also a major source of corruption for those that abuse the VAT system.

A simple example of such abuse regularly occurs within agriculture.  A “farmer” harvests 5000 tonnes of grain – although nobody ever checks – so he claims to have harvested 25,000 tonnes of grain.  This grain is placed in a number of silos and exported as part of a much larger quantity.  VAT is claimed for the 25,000 tonnes of grain that was not harvested and duly refunded to the “farmer” – with the corrupt farmer and accomplice SFS officials making millions from the fraudulent VAT returns.  A very simple method from among many far more complex schemes.

For those much larger entities, particularly reliant e-VAT systems, failure to insure the SFS gets “its share” results in being targeted by the SFS as occurred in Odessa on 23rd August – prima facie running against the current agreement between Government UA and the major taxpayers in the nation.

When the declared policy of the government is to redirect the Ukrainian economy toward the drivers of IT, and agriculture, the SFS pressuring IT and agriculture would seem to be entirely counterproductive to government policy – yet that is clearly beginning to occur.

nasirov

A reader may ponder why Mr Nasirov is not sacked considering his orchestrated efforts to frustrate any form of transparency or adhere to the governmental policy line  – as sacked he most definitely should be.

Indeed he has been “called out” numerous times by business, diplomats and civil society for his lies and nefariousness both publicly and privately, so why is he still running the SFS?  The answer naturally lies behind the grubby political curtain in Kyiv.  Not only do the corrupt in Kyiv do very, very well from the continuing corrupt money channels of Odessa, but the retaining of Mr Nasirov as head of the SFS was apparently a requirement of the Will of the People Party (an Ihor Kolomoisky production) to vote in line with the slim majority of the current coalition when it matters.

A reader may wait in excited anticipation for Mr Nasirov’s e-declaration submission of assets on 1st September (when the e-system is supposedly back “on-line” having stupidly been activated before it was fit for purpose).  Most will anticipate a work of science fiction – perhaps rightly – equal only in its plausibility to the limp excuses Mr Nasirov offers when caught actively obstructing both transparency and actual government policy.

Whatever the case it seems unlikely that Mr Nasirov can yet be removed from office despite the fact that the SFS remains an entirely unreformed and a thoroughly cancerous State institution which is seemingly out of control under the leadership of Mr Nasirov.  It remains to be seen how Prime Minister Groisman will manage to “manage” a man clearly tasked with undermining reform and prolonging the old scams.

As the very disillusioned friend stated, it was that in the private sector when shaking hands with Mr Nasirov, a deal was done – now however it seems that when shaking hands with him in the public sector, it is necessary to check to see whether you still have your watch.   Power corrupts etc.

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