Representatives of the Committee on Taxation and Customs Policy are the main “lobbyists” of tobacco companies in the Verkhovna Rada. These are the research findings of TI Ukraine, the anti-corruption organization, devoted to uncovering potential conflicts of interest by state officials.
Committee on Taxation and Customs Policy, including its chair, Nina Yuzhanina, as well as Maksym Kuriachyi, Mykhailo Kobtsev and Taras Kozak have close ties with tobacco companies. The Chair of the Committee, Sergii Sholomytskyi, supports these committee members. The activities of these officials suggest that they are protecting the interests of cigarettes manufacturers. The People’s Deputies promote initiatives and regulations in the interests of profitable tobacco companies and actively criticize and disregard bills which are unfavorable to the tobacco corporations. For instance, some of these companies, acting through the Committee, tried to introduce lower tobacco taxes. For more information about tobacco corporations lobbyists and connections between them and government officials see our online infographic at ti-ukraine.org.
The member of the Parliamentary Committee on the Industrial Policy and Entrepreneurship, Hennadii Kryvosheia, is also a member of the “Support Group” of tobacco manufacturers. He is the author of a number of doubtful bills that have a negative impact on tobacco control laws or contradict to the Association Agreement with the EU and the Framework Convention of the World Health Organization (WHO) Tobacco Control, ratified in 2006. In addition, Kryvosheia appealed to WHO and criticized the draft law #2820 which complies with the Convention.
The interests of the tobacco business advances the National Organization of Retail Sales, and the president Yurii Bondarev who has worked for 16 years in top management at “Philip Morris Ukraine”, as well as a millionaire Borys Kaufman.
The International Centre of Policy Studies is one of the organizations that protect the interests of corporations and which received up to 350 000 US dollars from tobacco companies in the form of grants in 2014-2016, respectively.
The conflict of interest is apparent in the taxation and tobacco sphere from the time when the management committee for taxation and customs policy and the State Fiscal Service was headed by Roman Nasirov, whose nickname was an “Official Under the Blanket.”
Because of his direct involvement in the work of the Committee on Taxation, the important draft law was submitted by a group led by the chair of the Committee on Health, Olha Bohomolets. In order to avoid direct intrusion into the healthcare legislation by the “Nasirov Group” the draft law was rescheduled.
In May 2015, a very important draft law #2820, developed by a group of authors working with Olha Bohomolets, was submitted.
Ukraine adopted this law under the Convention. The draft law would introduce a number of tobacco control initiatives, including an increase in graphic warnings against smoking on cigarette packages. This draft law was not passed through the Committee on Taxation, as it deals with issues protecting people from the harmful health effects of tobacco, rather than taxation norms. Regardless, the draft law #2820 was blocked. Nina Yuzhanina, who obtained this post after Roman Nasirov as the chair of the Committee on Taxation, did not propose an alternative draft law for 2 years, and personally opposed inclusion of #2820 into the agenda of the Verkhovna Rada.
Then, the groups took the initiative and established a working group to develop a compromise draft law. Some people’s deputies who were authors of the draft law #2820 were included in this working group. However, the core of the group consisted of the people’s deputies with close ties in the tobacco corporations.
The Article 5.3 of the Convention requires protection of public health policies from commercial and other interests of the tobacco industry. Current legislation, directly speaks about the policy priorities in the health sector of financial, tax and corporate interests of persons connected with the tobacco industry.
As a result of the the intrusion of tobacco corporations through the deputies of the Committee on Taxation the “revised” draft law is being actively promoted by the committee. This draft law does not propose effective rules on combating smoking. The “revised” draft law has no provision for increasing the area of health warnings on cigarette packs, or the banning of misleading information printed on packets about tar and nicotine. The draft law also introduces inefficient mechanisms to address illegal trafficking, allowing cigarette manufacturers themselves to monitor the system. This provision contradicts the WHO protocol on illegal trade, which has been ratified by the Cabinet of Ministers.
“We need to reduce the impact of the tobacco corporations in decision-making in the public health sector. All agreements between the government and businesses should not contain conflicts of interest. It should not be opaque contracts signed secretly, but contracts based on open dialogue with the public”, – said the executive director of TI Ukraine Yaroslav Yurchyshyn.
The chair of the NGO “Life”, an expert of the Ukrainian Center for Tobacco Control. Andrii Skipalskyi, agrees that deputies should not protect the commercial interests of the tobacco multinationals working at the expense of taxpayers. “This practice develops a significant risk for corruption and conflicts of interest that contradict Ukraine’s international obligations and the public interest. Because of efforts to advocate for tobacco companies, there is parliamentary chaos and an economic crisis, and Ukraine has done nothing for the last three years to implement Chapter 22 of the Public Health, association Agreement with EU.
Ukraine has set priorities that may protect citizens, especially children, from the harmful effects of tobacco. Will the Verkhovna Rada dance to the tune of the Tobacco lobby? Following their demands to pass into law their public health rules, as they have for the last two years? TI Ukraine supports the initiative against covert corporate lobbying that has had such a negative impact on the public interest and continues to advocate for transparency between the government and big business.
This research was conducted with support from Campaign for Tobacco-Free Kids.
Contact for media: Olha Tymchenko, Communication Department Head, Transparency International Ukraine Phone: 050-352-96-18, Email: [email protected]
Transparency International Ukraine is a chapter of global anti-corruption network Transparency International represented in more than 100 countries. TI Ukraine’s mission is to fight against corruption in Ukraine promoting transparency, accountability and integrity of public authorities and civil society. Learn more www.ti-ukraine.org