New appointment procedure of heads of NABU and SBI, revision of NABU status, and reshuffle in a national regulator

This week the Parliament, the Government, and the President made several important decisions. MPs and the Cabinet submitted draft bills that can change the balance of power in Ukraine, the Cabinet reorganized the National Academy for Public Administration, and the President once more defied the Constitution — this time by replacing the Head of the National Securities and Stock Market Commission.

Cosponsors: 237 MPs total, 234 — from Servant of the People faction (Fedir Venislavskyi as the first signatory), 2 — from group Trust, and Deputy Chairperson of the Verkhovna Rada Ruslan Stefanchuk.

Who is affected: the President, MPs, the Cabinet, NABU employees, SBI employees, top officials, servicemen, and civil servants.

What does the bill propose: to change the Constitution, in particular:

• to give the President the authority to appoint and dismiss heads of NABU and SBI with the consent of the Verkhovna Rada and via a procedure defined by a law
• to select heads of NABU and SBI via a competition.

What is wrong:

• the Constitution should include provisions not only about the procedure of appointing the heads of NABU and SBI but also define the goals of these bodies. Otherwise, their powers, functions, and objectives can be narrowed by a regular law
• although the cosponsors of the bill do propose to include in the Constitution the requirement to select the heads of NABU and SBI via a competition, they do not define what constitutes a competition and how it should be conducted. In practice, such competition can easily be faked
• NABU and SBI are a part of the executive branch. Since the bill excludes the Cabinet from the process of selecting their heads, the work of these bodies could be less effective.

What’s next: if the bill is passed, it will be considered by the Constitutional Court. If the Court rules it compliant with the Constitution, MPs will have to consider the bill once more and it will become a law if supported by at least 300 votes.

Sponsor: the Cabinet.

Who is affected: the President, MPs, the Cabinet, NABU employees, top officials, and civil servants.

What does the bill propose:

• to transfer the authority to appoint and dismiss the NABU Director to the Cabinet (now it belongs to the President, in special cases the Director can also be dismissed by the Parliament)
• to define the NABU as a central executive body with special status (now it is a law enforcement agency)
• to prohibit giving any written or verbal orders, or commands to NABU on how it should work or exercise its authority
• contest committee for selection of the NABU Director will include 9 persons: three representatives appointed by the National Security and Defense Council, three — appointed by the Cabinet at its discretion, and three — appointed by the Cabinet on the proposal of donors that during the preceding two years provided international technical assistance to prevent and fight the corruption
• annual audit of NABU’s work will be conducted by an external control commission of three members appointed by the Cabinet on the proposal of donors that during the preceding two years provided international technical assistance to prevent and fight the corruption

What is right:

• the Constitutional Court has ruled unconstitutional several provisions of the Law on NABU adopted in 2014, in particular, the provisions that gave the President influence over the Bureau. The bill will make the law compliant with the Constitution and the Constitutional Court’s decision
• although the NABU is defined as a part of the executive branch, it gets additional guarantees of its independence. Thus, the Cabinet will not have an excessive influence over NABU detectives or the Director.

What is wrong: the President will keep some of his influence on the NABU since the bill includes representatives from the National Security and Defense Council in the contest committee for selection of the NABU Director (decisions of the Council are enacted only if approved by presidential decrees).

Decision-maker: the President.

Who is affected: businesses, investors, and Ukrainian citizens.

What has changed: Tymur Hromaiev was dismissed as the Head of the National Securities and Stock Market Commission and Ruslan Mahomedov was appointed in his stead.

Why this is important: the National Securities and Stock Market Commission is a national regulator that controls the work of capital markets, oversees market players, protects investors, and ensures a transparent, effective, and non-discriminatory environment on capital markets in Ukraine.

What is wrong:

• the Constitutional Court has ruled that national regulators are executive bodies considering their functions, scope of activity, and competencies. Therefore, heads of national regulators should be appointed not by the President but by the Cabinet
• presidential powers are defined by the Constitution and cannot be extended by a regular law. Thus, the decrees are unconstitutional.

Decision–maker: the Cabinet.

Who is affected: civil servants and candidates for civil service positions.

What does it change: five higher education establishments of the National Academy for Public Administration were incorporated into local universities:

• the National Academy For Public Administration (NAPA) — Taras Shevchenko National University of Kyiv
• Dnipro Regional Institute of NAPA — Dnipro Polytechnic National Technical University
• Lviv Regional Institute of NAPA — Lviv Polytechnic National University
• Odesa Regional Institute of NAPA — Odesa National Polytechnic University
• Kharkiv Regional Institute of NAPA — Karazin Kharkiv National University.

What is right: the universities will start to compete for students — future candidates for civil service positions. As a result, they will have to update their curricula, invite better lecturers, enhance the quality of education, and Ukraine will get better civil servants and candidates for civil service.

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