Draft bill #10439 of January 29, 2024 

Sponsor: the Cabinet of Ministers of Ukraine 

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

Who is affected: businesses, the Bureau of Economic Security, 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 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 two members nominated by international organizations, will have to vote in its favor 
  • grants members of the selection committee access to restricted access information (except for state secrets) and state databases 
  • it will be allowed to dismiss the BES director if a negative conclusion is issued by the commission conducting an external independent evaluation (currently it is enough for the Cabinet to decide that the work of the BES director is unsatisfactory after receiving the Director’s report) 
  • the commission conducting an external independent evaluation will include three members appointed by the Cabinet from candidates proposed by international and foreign organizations 
  • candidates for positions in the BEB who refuse to be tested with a lie detector will not be appointed 
  • the procedure of creating the committee for the selection of the BES director will start after the law comes into effect 
  • upon the law’s entry into force, the formation of the commission for the appointment of the BES director begins 
  • re-certification: 
    • Deputy Directors will undergo a re-attestation after the law comes into effect 
    • employees appointed to positions before the law came into effect will have to undergo a re-attestation a year after martial law ends. 

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 
  • 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. This decree ordered the Cabinet of Ministers to submit to the Verkhovna Rada draft bills on strengthening the mechanisms for the functioning of the Bureau of Economic Security of Ukraine, additional guarantees for the protection of the legitimate interests of entrepreneurship in the course of criminal proceedings.