​Law enforcement bodies shall not take over functions which are not in their area of responsibility and have no right to intervene into business activity, Oleksandr Danyliuk says

4/2/18

Presently, law enforcement bodies take over functions which do not belong to their area of responsibility and intervene into the activities of other state bodies and in private business processes. Minister of Finance Oleksandr Danyliuk made this statement on March 29 during the panel discussion “Building a Free Economy. Does It Have Space for Law Enforcement Bodies?” which took place as part of the Ministry of Finance’s project “Policy Talks”.

The event was attended by Minister of Finance Oleksandr Danyliuk, Director of the NABU Artem Sytnyk, Business-Ombudsman Algirdas Shemeta, co-founder of “Nova Poshta” Vyacheslav Klymov, executive director of the Corruption Prevention Centre Dariya Kalenyuk, general director of YouControl company Sergiy Milman and Deputy Head of the National Police Igor Kupranets.

The panel discussion was used by government officials, experts, business representatives, members of NGOs and the media to discuss measures needed to establish a favorable investment climate in Ukraine and to fight financial crimes effectively. Another point of the event’s agenda was the role of the law enforcement bodies in a liberal economy and a democratic country.

“The reform of the law enforcement bodies is crucial for the creation of a democratic Ukrainian state and for its economic prosperity”, Oleksandr Danyliuk said during the discussion. He added that 36 billion hryvnas were provided to fund the law enforcement bodies in 2017. Taking into account the critical remarks of business and society regarding the way these bodies execute their direct functions and their negative impact on the investment climate in Ukraine, these expenses are questionable.

Artem Sytnyk, Director of the NABU, said that “the law enforcement system shall have no role in the economy. The law enforcement bodies have two tasks: they must protect business against state encroachments and ensure compliance with transparent game rules by state and business”. Also, according to Artem Sytnyk, practical experience makes it clear that it’s not always possible to reform the law enforcement bodies efficiently. For instance, these bodies are now not able to investigate economic crimes against the state properly. He stressed that the critical task now is to establish the independent and professional Financial Investigation Service as soon as possible.

“Each case when the law enforcement bodies violate the right of foreign investors is a major hit against investments in Ukraine”, said Algirdas Shemeta, Business-Ombudsman and former Minister of Finance of Lithuania. He added that over the last 10 years Lithuania had achieved a remarkable success in tackling corruption. A major contribution to that success was the establishment of a modern internal control system in the law enforcement bodies.

Co-founder of Nova Poshta Vyacheslav Klymov stressed that the law enforcement bodies demonstrate an irrational attitude to businessmen treating them like criminals. “If the law enforcement bodies have questions to business, they shall not clarify them in a violent way”, Vyacheslav Klymov said. He also said that Ukraine must develop an appropriate legislation meeting the interests of diligent business.

“There is a connection between the law enforcement system, the local business climate and our ability to attract foreign investments. To do this, however, we must establish a controlling body with independent management”, said Dariya Kalenyuk, executive director of the Corruption Prevention Centre. This body, in her opinion, shall be the Financial Investigation Service. According to Dariya Kalenyuk, the basis for the proper operation of the Financial Investigation Service shall be the independent status of its head and a transparent contest for the selection of its employees.

Founder of YouControl Sergiy Milman said that the actions of the law enforcement bodies demotivate everyone who is willing to create innovate companies in Ukraine. He also mentioned that the State Security Servicy often tends to refer to old legislation which contradicts the current decrees of the Cabinets of Ministers and current laws, including the Law of Ukraine “On Access to Public Information”. “Formulating their accusations against my company, they referred to the legislation dating back to the 90s – this was a real KGB-like experience. They really see me as a criminal and do not make much of a secret of this attitude, even though they have to prove yet that I am really guilty”, Sergiy Milman said.

Igor Kupranets, Deputy Head of the National Police, admitted that “the law enforcement system, unfortunately, is not aware of its responsibility. Obviously, this is the reason why it must be reformed. But this must be a joint decision, we must start with the mentality of law enforcement personnel”.

The participants of the panel discussion agreed that Ukraine must take the following steps to solve the above problems:

Ukraine has to discard the Soviet-like law enforcement system and conduct a comprehensive reform of the law enforcement bodies;
Ukraine must ensure favorable conditions for foreign investments;

Ukraine must establish a single body entitled to prosecute economic and financial crimes against the state. This body must be independent and created on the basis of new regulations.

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