The SFS fight – Round 1 to the PM

June 26, 2017

A few weeks ago an entry appeared relating to the perceived political weight gain of Prime Minister Groisman – and the potential political weight loss looming for him.  It included a few paragraphs regarding the Ministry of Finance, Finance Minister Danilyuk, and attempts to force the State Fiscal Service from its control where it had only been (rightly) placed a few years prior.

“Mr Danilyuk has a terrible relationship with the Verkhovna Rada Finance Committee and a particularly prickly and egocentric Committee leader.  Nevertheless that has been manageable thus far.

However, in what appears to be a deliberate attempt to force his resignation, there are now moves (to which Minister Danilyuk is very much opposed) to take the SFS (also without permanent leader whilst Roman Nasirov is suspended and under NABU investigation) from the competency of the Finance Ministry – where it was placed only a few years ago.”

What the entry did not expand upon, for it was not relevant to it, was who and/or what vested interests would wish to eek the SFS from the control of the Finance Ministry (particularly in the absence of the nefarious Roman Nasirov as the institutional head, and for whom it can be expected that every domestic effort will be made to insure he is found “not guilty” – or is handed a particularly light sentence that will clearly not be proportionate to the gravity of his notorious methods).

Why would Prime Minister Groisman and Finance Minister Danilyuk choose to rub against those individuals and/or vested interests that sought to insert Mr Nasirov into the position in the first place?

There may be ideological reasons, such as a genuine desire to reform the SFS from an oppressive and punitive institution into an otherwise unpopular but nonetheless lawful entity.

It may also be that neither Prime Minister Groisman, nor Finance Minister Danilyuk have inherited nor particularly enjoy any illicit (or complimentary/enabling) revenue or favour from it.  Neither are heavily involved in import or export to enjoy favourable VAT and/or tax decisions, or require a blind eye at Customs (controlled by the SFS) for example.

The cynical will rightly state “follow the money” when it comes to the business interests and personal enrichment of the Ukrainian elite – and by extension any associated unwillingness for reform in areas that will significantly affect them.

Lo, a combination of reform ideology and a lack of direct personal vested interest may be a partial driver – notwithstanding considerable external pressure to address the SFS problem by the “friends and supporters of Ukraine”.

There are however, many within the presidential orbit, and the Presidential Administration (not the same thing) that have benefited from an understanding and compassionate (read corrupt)  SFS during the leadership of the nefarious Mr Nasirov.

The absence of Mr Nasirov has thus led to increasingly obvious and blunt attempts to remove the control of the SFS from the Finance Ministry and place it within a more compliant/manageable/understanding ministry and minister.

It seems however that Prime Minister Groisman (and Finance Minister Danilyuk for as long as he can hold on in post) have won the internal battle to keep the SFS within the empire of the Ministry of Finance.

No doubt the Prime Minister will have had some noteable external support via the “supporters and friends of Ukraine” diplomatically suggesting the SFS remain within the Finance Ministry, sufficiently weighted so as to cause the vested interests seeking to eek the SFS (and thereby customs) out from under MinFin to decide this was not a battle worth pursuing by way of current tactics.

There is after all, more than one way to skin a cat (to quote Seba Smith).

Prime Minister Groisman wants to completely restructure the SFS and Customs, and also insure the entirely cancerous Tax Police are an entity that will not see the operational light of day again in Ukraine.

Thus there will be many a tactical opportunity for vested interests to try and insure their continued nefarious gains via such restructuring.  It will be a matter of the PM and MinFin plugging concept and policy holes, legislative or regulatory, as well as fighting the insertion of corrupted souls owned or rented by vested interests within any new structure.

As for process, the more the PM and MinFin can automate the system thus removing nefarious human interference, the more success there will be.  The more vested interests can frustrate any such automation and insert nefarious human interference, the longer their schemes and scams can continue without having to seriously adapt, being forced to find new ways to undermine the system (and thereby the nation).

Thus, Round 1 to the PM, Finance Minister Danilyuk and MinFin – but it is far from a knockout.

Seconds out – Round 2 – will commence shortly.  We will then see just how clever they can box.

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