Draft bill #10439-2 of February 12, 2024 

Cosponsors: a group of 14 MPs from the factions Holos, Batkivshchyna, and Servant of the People with Yaroslav Zhelezniak as the first signatory 

Status: sent for review to the Committee on Finance, Taxation, and Customs Policy 

Who is affected: businesses, the Bureau of Economic Security, the Cabinet of Ministers, prosecutors, other law enforcement agencies, and the Business Ombudsman Council 

Summary: 

  • a new procedure will be used for selecting the director of the Bureau: there will be a selection committee of 3 members delegated by the Cabinet of Ministers and 4 members delegated by dedicated international organizations 
  • the selection committee will be operational only when its full composition is approved 
  • to make a decision, at least four members of the committee, including at least three members nominated by international organizations, will have to vote in its favor 
  • meetings of the selection committee will be open to the media. Meetings will be broadcast live and recorded (both in video and audio formats) 
  • the Cabinet will have less influence on the appointment of the BES director: instead of three candidates, it will nominate only one 
  • members of the selection committee will be granted access to restricted access information (except for state secrets) and state databases 
  • requirements for the candidates for the position of the BES director to be over 35 years old and have management experience will be removed 
  • an external independent evaluation (audit) of the efficiency of the Bureau of Economic Security will be conducted one year after the appointment of the BES director and then again three years after the appointment 
  • the commission conducting an external independent evaluation will include three members appointed by the Cabinet from candidates proposed by international and foreign organizations 
  • it will be allowed to dismiss the BES director if a negative conclusion is issued by the commission conducting an external independent evaluation (previously it was enough for the Cabinet to decide that the work of the BES director is unsatisfactory after receiving the Director’s report) 
  • within two months after the law comes into effect, the Cabinet will have to form a committee for the selection of the BES director 
  • the BES director will have to form selection committees responsible for competitions for other positions in the BES and issue an order for re-attestation of employees no later than three months after his or her appointment 
  • refusal by a BES employee to undergo re-attestation will be a sufficient ground for their dismissal 
  • attestation will be conducted by a committee of five members (three of them will be representatives of dedicated international organizations) appointed by the BES director. 

What is right: the Verkhovna Rada and the NSDC will no longer have an unconstitutional power to appoint members of the selection committee responsible for selecting the BEB Director. 

What is wrong:  

  • the requirement to have at least three representatives of international and foreign organizations in the selection committee and the audit body makes the BES dependent on representatives of international and foreign organizations. This requirement violates the state sovereignty of Ukraine and is unconstitutional since it gives representatives of foreign bodies actual powers to appoint the head of the government body and deprives the people of Ukraine of the exclusive right to exercise power in Ukraine 
  • since the selection committee nominates only one candidate to be appointed by the Cabinet, the Cabinet’s role in the matter will be a ceremonial one. This goes against the Constitution, which grants the Cabinet of Ministers the independent power to appoint heads of central executive bodies 
  • by appointing the heads of executive bodies via decisions made by collegial selection committees, the parliamentary majority and the Cabinet dodge the political responsibility for their work. This responsibility is the essence of democracy and elections. 

Alternative solution: 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. 

Background information:  

  • in January 2021, the Verkhovna Rada passed the Law on the Bureau of Economic Security of Ukraine. The newly created Bureau was granted powers to fight economic crime. Previously, such crimes were handled by the tax police and the SSU department of counterintelligence economic security. These two agencies were often accused of systematic abuse of power, pressure on businesses, and corruption 
  • in March 2023, a similar draft bill was submitted to reboot the BES. However, it still contained provisions granting the National Security and Defense Council powers to have some influence on the appointment of the BES director 
  • during 2023, management problems in the Bureau only escalated and business associations supported the call to reboot the agency 
  • on January 23, 2024, the presidential decree On Urgent Measures to Ensure Economic Security During Martial Law came into force. Guided by this decree, the Cabinet of Ministers submitted to the Verkhovna Rada draft bills on the enhancement of the functioning of the Bureau of Economic Security of Ukraine and additional guarantees for the protection of the legitimate interests of entrepreneurship in the course of criminal proceedings. Later, a group of MPs submitted alternative draft bills on these issues. 

Additional information: Ok, So What? podcast, ep. 142: Reboot of the BES: what will (not) change for Ukrainian entrepreneurs?