It is suggested to make amendments to the presidential draft law 8068 On the National Security of Ukraine in order to deprive the Security Service of Ukraine (SBU) of uncharacteristic functions of fighting against economic and corruption-related crimes. The changes were introduced by Ukrainian MP, head of the Verkhovna Rada Committee on Foreign Affairs Hanna Hopko. If they are passed, the SBU will lose the powers to engage in counterintelligence in the economic sector and the right to carry out investigative activity in economic and anti-corruption sectors.The changes were presented on April 26 at the joint briefing of MPs, business representatives and anti-corruption CSOs.

Earlier, SBU was already deprived of the right to investigate economic and corruption-related crimes. However, they retained the powers to “ensure economic security” and “fight against corruption.” These powers will allow the special services officials to carry out investigative and counterintelligence activity. In practice, it means the right of wiretapping, use of agent assets, searches with the use of force, delegating representatives to work in public bodies. SBU officers can identify crimes and, according to instructions, they have to notify the respective public body. However, SBU official often start “negotiating” with the potentially guilty individuals instead.

“Numerous journalist investigations show that the anti-corruption sector in the SBU is headed by people who have no explanation for their huge mansions and luxurious cars,” said Chair of the Board of the Anti-Corruption Action Center Vitalii Shabunin“Instead of corruption counteraction, we observe illegal enrichment of SBU officials, extortion of bribes and pressure on business if it refuses to play by their rules or pay the ‘fee.’ Instead of fighting against separatism, SBU officials “allow” to use fake documents for $3000 to live on the Ukrainian territory. And it happens in a time of war in the country.”

According to the suggested changes, grand corruption belongs to the remit of the National Anti-Corruption Bureau exclusively, which has the investigative rights. Investigation of petty corruption and economic crimes is within the scope of powers of the National Police of Ukraine. State Investigation Bureau and, in future, State Service of Financial Investigations will soon start investigating certain economic crimes. Leaving these powers with the SBU would mean doubling these functions and creating conditions for undue pressure on business. SBU needs to retain exclusively the functions characteristic of a special service – protection of the sovereignty and counter-terrorism.

“Now Ukraine has a historic chance to take the possibility of undue pressure on business away from SBU – the fact that is one of the significant obstacles of engaging investments to Ukraine,” said MP Hanna Hopko. “SBU needs to fulfill its functions – fight against terrorism and diversions. SBU reform required from Ukraine by our western partners and the NATO is long overdue.”

International experts and business have accused SBU of pressuring companies multiple times, claiming it was one of the key obstacles on the way of getting investments to Ukraine.

“The pressure of law enforcement agencies on business is a red flag for any investor into Ukraine and sends a clear signal of lack of any rule of law in the country,” explained president of EBA Tomas Fiala. “I speak with investors and business owners a lot. Their stance is clear: as long as business in Ukraine remains defenseless against illegal actions of law enforcement agencies, the investments will be much lower than those into our western neighbors, therefore the economic gap will be growing.”

Yaroslav Yurchyshyn, Executive Director of Transparency International Ukraine, pointed out that this situation with a special service is dragging Ukraine down in the international corruption ranking. “We have analyzed why Ukraine ranks so low in the “Corruption Perception Index 2017”. As a reminder, based on last year’s score, our country ranks 130th, a place uncharacteristically low for a European country. We have come to the conclusion that one of the reasons is interference of special services with business. Under the pretext of fighting against economic crime, SBU effectively blocks the work of certain economic entities, or sometimes even entire industries. The cancerous tumors of corruption which are the root of these uncharacteristic powers of a special service cover the entire law enforcement system. Now, we have a window of opportunities to reform the SBU. The next step has to be the formation of the Service of Financial Investigations,” added the head of the Ukrainian chapter of the global anti-corruption network. 

According to the official report of the Security Service of Ukraine concerning the number of cases referred to court, 1 in 4 criminal proceedings investigated by the SBU is beyond the scope of their jurisdiction. Out of 889 cases referred to court almost 200 should have been investigated by a different agency. When MP Serhii Leshchenko made a request for statistical information on the work in the area of economic security, SBU responded that “statistical data of counter-intelligence activity of SBU agencies and departments constitute state secret and must be protected.”

It is noteworthy that sometimes, SBU paralyzes the activity not only of individual companies, but of entire industries. A remarkable example is the recent scandal around the liquefied gas market, when the SBU blocked the work of several suppliers, establishing the monopoly of one single company. 

Economic counter-intelligence of the SBU has once interfered with the procurement of medicine for lethally dead Ukrainians. The Security Service of Ukraine started writing letters to the government about the need to “review the procurement mechanism” and summon MoH working group members for interrogations. 

As a reminder, at the beginning of April, the Parliament passed draft law 8068 “On the National Security of Ukraine” in the first reading and will soon vote for it in the second reading.