Espreso. Global

US Embassy confirms sending list of reforms to Kyiv with clear deadlines for ongoing support

26 September, 2023 Tuesday

During a meeting in Brussels, the United States presented Kyiv with a list of key reforms for discussion and feedback at the Multi-Agency Donor Coordination Platform for Ukraine

This information was shared on the US Embassy in Ukraine's website.

The statement on the proposed list of reforms mentioned, "As part of an ongoing dialogue with Ukraine and stakeholders in Ukraine’s future success, the United States provided a proposed list of priority reforms for discussion and feedback at the Multi-Donor Coordination Platform in Brussels."

The embassy explained that “this list was provided as a basis for consultation with the Government of Ukraine and key partners as part of our enduring support to Ukraine and its efforts to integrate into Europe, a goal the United States strongly supports.”

The list in question is meant to identify priority areas and outline steps for reform in collaboration with Ukraine and key stakeholders. During a meeting at the White House, President Joe Biden stressed, “Just as we are committed to helping the Ukrainian people defend themselves now, we’re also committed to helping them recover and rebuild for the future, including supporting reforms that are going to combat corruption, creating an environment where businesses can thrive and where American and European businesses want to invest.”

Earlier, Ukrainian Pravda reported that Mike Pyle, the White House Deputy National Security Advisor for International Economics, sent a letter to the Donor Coordination Platform, Prime Minister Denys Shmyhal, and the Office of the President of Ukraine. The letter contained a list of reforms necessary for Ukraine to continue receiving military aid.

The reforms in the document are categorized by their priority and timeline for implementation: 0-3 months, 3-6 months, one year, and 18 months.

They cover various areas, including the supervision of state-owned enterprises, anti-corruption agencies – Specialized Anti-Corruption Prosecutor's Office (SAPO),  National Anti-Corruption Bureau of Ukraine (NABU), National Agency on Corruption Prevention (NACP), The Supreme Council of Justice, the judiciary as a whole, the Ministry of Defense, and all law enforcement agencies.

REMIT implementation 

Additionally, the National Commission responsible for regulating energy and public services must approve the procedure, scope, and frequency of submitting information on wholesale energy product trading in line with the REMIT regulation, no later than April 1, 2024. This aligns with the legislation aimed at ensuring transparency and integrity in the wholesale electricity market.

To receive financial assistance from the EU, state-owned enterprises need to follow these steps

  • Add a seventh member to the supervisory boards of Ukrenergo and Naftogaz.
  • Finish the legal process of turning Energoatom into a corporation and select an independent supervisory board.
  • Transfer ownership of the Gas Transmission System Operator of Ukraine to the Ministry of Energy. Create a new company charter and choose a new independent supervisory board.
  • Pass a law on the corporate management of state-owned enterprises (draft law 5593-d) by fall 2023. This law should align with the recommendations of the Organization for Economic Co-operation and Development (OECD) It should ensure a transparent and merit-based selection process for qualified independent professionals on the supervisory boards of state-owned enterprises. Also, introduce a procedure for yearly assessments of supervisory boards to prevent arbitrary removal of board members.
  • Elect and put into action a new supervisory board for the newly formed state concern "Ukrainian Defense Industry" (formerly known as "Ukroboronprom") following OECD standards.

Immediate priorities (0-3 months)

Strengthen the Specialized Anti-Corruption Prosecutor's Office (SAPO):

  • Pass a law to reform SAPO according to IMF criteria. This law should:

    • Improve the selection process for SAPO leaders and key officials, involving independent experts in the competition.

    • Empower SAPO to better manage its operations.

    • Establish mechanisms to hold SAPO leadership accountable, including performance evaluations and external audits by international experts.

  • Amend legislation to clarify the relationship between the SAPO Head and the Attorney General to enhance SAPO's independence in cases. Also, grant SAPO separate authority for extradition and mutual legal assistance (MLAT).

National Anti-Corruption Bureau of Ukraine (NABU):

  • Increase the number of investigators by at least 300.
  • Enhance NABU's forensic capabilities to meet international standards.
  • Establish a public oversight board and grant NABU the authority to wiretap.
  • Safeguard NABU's independence and its exclusive jurisdiction over high-profile corruption cases.

Reinstate asset and financial disclosure requirements:

  • Pass a bill mandating asset declarations for all public officials and judges, including declarations for 2021 and 2022 to ensure accountability.
  • Resume disclosing financial activities of political parties.
  • Simplify the asset declaration system by integrating it with other databases and registries in line with public servants' obligations to provide accurate and timely declarations.

National Agency for the Prevention of Corruption (NACP):

  • Select a new NACP chairman independently, transparently, and competitively, ensuring compliance with OECP standards regarding independence, competence, and integrity.

Complete the Supreme Council of Justice's overhaul:

  • Establish a Service of Disciplinary Inspectors with the involvement of independent experts to select highly qualified, honest, and well-compensated inspectors.
  • Restore the Supreme Council of Justice's disciplinary role.

Short-term goals (next 3-6 months)

High Anti-Corruption Court of Ukraine (HACC):

  • Change the law to have more judges and allow some cases to be heard by a single judge instead of a panel of three judges. This will make it easier to handle the increasing number of corruption cases fairly and efficiently.

Anti-Monopoly Committee of Ukraine (AMK):

  • By January 1, 2024, the Anti-Monopoly Committee of Ukraine should update its procedures for dealing with applications related to business mergers and investigating actions that harm competition and break anti-monopoly laws.

Establish the Supreme Administrative Court of Ukraine:

  • Pass a law to create a new court that specializes in handling cases against national government agencies. This court should have judges who have been carefully reviewed. This should happen after closing the District Administrative Court of Kyiv.

Reform the Supreme Court of Ukraine:

  • Check the behavior and honesty of current judges in the Supreme Court, especially in cases of corruption involving the former Chief Justice and the Grand Chamber of the Supreme Court. Select new judges for vacant positions through a transparent process that involves independent experts and members of civil society.

Goals for the coming year

Strengthen the Asset Recovery and Management Agency (ARMA):

  • Change the ARMA Act to make sure leaders are chosen openly, fairly, and based on qualifications with mandatory background checks.
  • Hold a new competition to select a manager within one year.
  • Improve how we manage and sell assets that have been taken by the government, whether in ARMA or another government agency, to make it more efficient and transparent.

Restart the process of selecting and assessing judges through the new High Qualification Commission of Judges of Ukraine with the help of the Public Integrity Council:

  • Change the laws to make the judge selection process better by adjusting the competition rules, the time judges need to be trained, and publishing clear evaluation criteria and how they're scored.
  • Support the process of selecting judges for around 2,000 open judge positions and assessing about 1,500 current judges with the help of the Public Integrity Council.

Reform the Constitutional Court of Ukraine:

  • Put into action the recently passed Law No. 3277-IX with guidance from an Advisory Group of experts, including those from the Venice Commission, the EU, and the USA. Also, help vet candidates for the positions of Constitutional Court judges. Law No. 3277 was one of the seven requirements for Ukraine to start the EU accession process.

Implement a program to make natural gas and electricity prices more market-oriented:

  • Put a plan in place to make gas and electricity prices more market-driven, which helps save energy and keeps energy companies and providers financially stable. This should also include targeted support for people who struggle to pay their energy bills while we reform the system of energy subsidies.
  • Take steps to further free up gas and electricity prices and prepare for developing "green" energy and connecting Ukraine's energy system with the EU's.
  • Make sure the process of making energy prices more market-oriented includes measures to help people with lower incomes.

Strengthen the Accounting Chamber of Ukraine (ACU) and the State Audit Service of Ukraine (SAS):

  • Change the laws to make these two institutions more transparent and accountable during Ukraine's post-war rebuilding period. This means making them more independent and professional.
  • Make sure the ACU board members are selected independently, transparently, and competitively, with checks to ensure they're independent, qualified, and honest.
  • Give the ACU more authority to audit local government bodies, state-run companies, and activities related to public procurement.

Ministry of Defense of Ukraine:

  • Revamp the processes for buying weapons and other defense equipment to meet NATO standards for openness, accountability, efficiency, and competitiveness without compromising Ukraine's military strength.
  • Pass a comprehensive amendment (4210) to the national security law to increase democratic civilian oversight of the armed forces, update the command and control system following NATO principles, and modernize defense planning for better cooperation with NATO.
  • Restructure defense planning and resource management to make them more transparent, fight corruption, and enhance compatibility with NATO.
  • Revise how we buy military equipment and government contracts in line with NATO standards for transparency, accountability, efficiency, and competitiveness.
  • Modernize how we manage personnel and educate military personnel according to NATO principles, standards, and strategies.
  • Invest in programs related to "Women, Peace, Security."

Priorities for the next 18 months

Begin reorganizing the Economic Security Bureau of Ukraine:

  • Choose new leadership through an open and fair selection process.
  • Review and recertify the qualifications of Bureau personnel.
  • Establish a disciplinary committee to address ethical and professional issues, and replace employees who do not meet standards.

Reform and restructure the Security Service of Ukraine (SBU) by passing new laws:

  • Limit the SBU's law enforcement powers to counterintelligence, anti-espionage, cyber security, and counterterrorism.
  • Certify the qualifications of SBU personnel and re-certify current employees.
  • Create a disciplinary committee and replace staff who do not meet ethical and professional standards.
  • Enhance oversight of SBU activities by Parliament and civilians.
  • Change the process for legal data interception (wiretapping) and involve other institutions in judicial data interception.
  • Ensure transparent international involvement in management recruitment.

Improve the Ministry of Strategic Industries ("Ukrainian Defense Industry"):

  • Establish a supervisory board for the Ukrainian Defense Industry in line with OECD standards, including the participation of foreign defense experts.
  • Strengthen cooperation with the Ministry of Defense and the General Staff to align with national defense needs.
  • Implement NATO standards for transparency, accountability, efficiency, and competition.
  • Introduce transparent procedures, even while maintaining wartime secrecy requirements.

Enhance the National Police of Ukraine (NPU):

  • Implement a transparent system for personnel selection and career advancement based on performance.
  • Strengthen internal investigation units and make them independent from regional leadership.
  • Extend the jurisdiction of patrol police.
  • Modernize police officer training with practical modules.

Complete the reform of the Prosecutor General's Office:

  • Conduct ethical and professional certification for job applicants.
  • Establish a disciplinary committee and replace employees not meeting ethical and professional standards.
  • Introduce a case prioritization system for better case distribution.

Reform the State Customs Service of Ukraine:

  • Develop and implement a comprehensive reform strategy, aligning with EU legislation.
  • Simplify and digitize customs rules and introduce anti-corruption measures.
  • Certify the qualifications of customs service employees and re-certify current staff.
  • Revise the leadership selection process for transparency and merit-based decisions.
  • Create a disciplinary committee and replace staff not meeting ethical and professional standards.
  • Reorganize and staff the internal investigations unit.

State Border Guard Service of Ukraine (SBGS):

  • Enhance information exchange with EU border services.
  • Improve incident reporting and streamline border crossings for people and trade.
  • Strengthen mechanisms for reporting corruption and protect whistleblowers.

General inspectors for reconstruction:

  • Establish Inspector General positions in key ministries involved in reconstruction.
  • Empower them to refer criminal cases related to corruption to investigative agencies, detect and prevent waste, fraud, and abuse in ministries.

In July, the White House emphasized that Ukraine must implement reforms before NATO countries can consider its membership. However, the Ministry of Foreign Affairs of Ukraine suggested that the West should “reform” its approach toward Russia.

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