A Reboot of the Bureau of Economic Security

07 March 2023
A Reboot of the Bureau of Economic Security
Home > Monitoring > A Reboot of the Bureau of Economic Security

Draft bill #9080 of March 3, 2023 

Cosponsors: a group of 7 MPs from Servant of the People and Holos factions with Danylo Hetmantsev as the first signatory 

Status: preparations before the bill is considered in the Parliament 

Who is affected: residents of Ukraine, employees of the Bureau of Economic Security, the President, the National Security and Defense Council, the Cabinet of Ministers, persons with experience in prosecution and law enforcement agencies, and businesses 

Background: in January 2021, the Verkhovna Rada adopted the Law On the Bureau of Economic Security of Ukraine. The newly-created Bureau got powers to fight economic crime. Before, these powers were distributed between the tax police and the SSU Department of Counterintelligence for the Protection of the Economy. Their work was criticized for systematic power abuse, pressure on business, and corruption. The law also granted the BEB the authority to analyze and predict risks and threats to the national economy. Legislators granted the newly-created body powers to do analytical work, conduct investigations and pre-trial investigations, and guarantee the security of the national economy. As a result, the BEB performs many functions that gave it a de facto monopoly to control the entire national economy: from small entrepreneurs to entire sectors of the economy. As a result, the adopted law created even more risks of power abuse than before. 

Summary of the bill: 

  • principles of how the members of the selection committee responsible for the appointment of the BEB Director are nominated will be changed: 
    • the NSDC and the Cabinet of Ministers will have not three but two representatives each in the selection committee 
    • the Verkhovna Rada will no longer have the right to delegate three of its representatives to the selection committee 
    • five more members will be included in the selection committee. These members will be chosen by the Cabinet from a list proposed by international and foreign organizations, which during the past three years provided Ukraine with international financial support and assistance in reforms 
  • the list of international organizations eligible for nominating candidates to the selection committee will be provided by the Ministry of Foreign Affairs 
  • selection committee members will no longer be required to have citizenship of Ukraine, instead, they will have to have at least five years of work experience in jurisprudence or corruption prevention/anticorruption 
  • for the selection committee to pass a decision, at least five votes will be required given that three of these votes come from representatives of international and foreign organizations 
  • instead of three nominees for the BEB Director position, the selection committee will propose to the Cabinet only one recommended candidate 
  • the requirement for candidates for the BEB Director position to have at least five years of experience in management positions in state authorities, enterprises, institutions, or organizations will be removed 
  • the work of the BEB Director will undergo an external audit annually. The negative conclusion of the audit will be a sufficient reason for the dismissal of the BEB Director 
  • the audit will be carried out by three persons appointed by the Cabinet of Ministers based on the proposals from international and foreign organizations 
  • it will be prohibited to hire into the BEB persons who before January 1, 2023, served at least a full year (total) as investigators or operators in tax police, prosecution, the SSU, the SBI, the National Police or Militsiya, and those who refused the lie detector examination 
  • all BEB employees will be required to undergo a re-certification within a year starting from the date when a new BEB Director is appointed 
  • when the draft bill comes into force, the Director of the BEB, the first deputy, and the deputies will be dismissed. The Cabinet of Ministers will appoint a temporary acting Director for a period of no more than six months. 

What is right: 

  • the Verkhovna Rada will no longer have an unconstitutional power to appoint members of the selection committee responsible for selecting the BEB Director. 

What is wrong: 

  • the NSDC will still have the unconstitutional authority to appoint members of the selection committee. The NSDC is an advisory body under the President and cannot have independent powers 
  • the decisive role of representatives of international and foreign organizations in the selection of the BEB Director and the audit of his or her work makes the BEB dependent on representatives of international and foreign organizations. This situation violates the Constitution and state sovereignty of Ukraine because it gives representatives of foreign organizations actual powers to appoint the head of a state body of Ukraine and deprives the people of Ukraine of the exclusive right to exercise their power 
  • by appointing the heads of executive bodies via decisions made by collegial selection committees the parliamentary majority and the Cabinet dodge their political responsibility for their work. This responsibility is the essence of democracy and elections 
  • since the selection committee will submit only one candidate to the Cabinet of Ministers, the Cabinet will have no real say in the appointment of the BEB Director. This contradicts the Constitution that gives the Cabinet of Ministers the authority to appoint heads of central executive bodies 
  • the prohibition to appoint to BEB positions persons with experience in the prosecution or law enforcement agencies violates the right of these persons to work in public service and discredits the work of prosecution and law enforcement agencies by equating it with committing a crime or other acts preventing a person from applying for positions in public service 
  • mandatory re-certification of employees only one year after the Bureau was created and stuffing of the Bureau is not even finished violates the principle of legal certainty. As a result, the re-certification and its results will be challenged in court. Also, this requirement undermines confidence in public service and hinders the formation of high-quality public service in Ukraine. 

Alternative solution: 

  • to reject the draft law since it grossly violates the Constitution of Ukraine 
  • to reorganize the BEB into the Bureau of Financial Security, which will deal exclusively with issues of financial threats and abuses and not the entire economy of the state.