German Council on Foreign Relations
No. 4 May 2020 ANALYSIS
Rule of Law Reform after Zelenskyi’s First Year A Return to Business as Usual in Ukraine
In 2019, Volodymyr Zelenskyi won a strong mandate to fundamen- tally change Ukraine and make it less corrupt. One year into his presidency, however, there have been no significant breakthroughs. Powerful vested interests and a lack of strategic vision have frag- Dr. Cristina Gherasimov mented Zelenskyi’s leadership. Progress in rule of law reform has Research Fellow, Robert Bosch Center for Central again been held up by Ukraine’s old system heavily invested in and Eastern Europe, Russia, preserving the status quo. Western pressure and financial condi- and Central Asia tionality are now the key remaining incentives for reform.
– To bolster progress on rule of law reform, international assistance needs to be conditional on performance in this area. Because such reform is complex and takes time, the EU and other devel- opment partners should also include reform implementation in their support schemes. Dr. Iryna Solonenko Associate Fellow, Robert – The EU needs to conduct a transparent and objective assessment Bosch Center for Central and Eastern Europe, Russia, of its assistance approach to Ukraine to encourage more effec- and Central Asia tive rule of law reform. Such an evaluation could help Brussels and other EU capitals streamline funding for programs that work and make cuts to ones that have little or no impact.
– To improve the effectiveness of EU assistance and provide Ukraine’s civil society with more tools to influence the course of reforms, the EU should employ the same assessment tools to measure progress on rule of law reform in Ukraine that it uses for its member states. 2 No. 4 | May 2020
Rule of Law Reform after Zelenskyi’s First Year ANALYSIS
Acknowledgements: The authors would like to thank Kataryna Wolczuk (University of Birmingham), Roman Romanov and Dmytro Shulga (Open Society Founda- tions Ukraine), Milan Nic (DGAP), Jana Kobzova (Office of the President of the Slovak Republic), and Iryna Shyba (DEJURE Ukraine) for their valuable comments and reviews of this paper. No. 4 | May 2020 3
ANALYSIS Rule of Law Reform after Zelenskyi’s First Year
Contents
Executive Summary 4
Introduction 5
Domestic and International Context for Rule of Law Reform 6 Increased Domestic Demand for Reform 6 The International Context: An Opportunity and a Hindrance for Reform 7 Ukraine’s Institutional Setting for Rule of Law 8
Rule of Law Reform During Zelenskyi’s Presidency So Far 9 Petro Poroshenko’s Legacy: Rule of Law Reforms from 2014 to 2018 9 The Judiciary: Resilient to Reform 10 Rule of Law Reforms from 2015 to 2017 11 The Kyiv District Administrative Court: A Symbol of Judicial Corruption 13 Anti-corruption Institutions: Under Growing Attacks 14 The Office of the Prosecutor General: Reform Interrupted 16 State Bureau of Investigations: In Limbo 18 National Security Service: Reform Still to Come 19 The National Police: No Reform So Far 20
Signposts on Where Ukraine Is Heading 20
How International Partners Can Further Support Rule of Law Reform 22 Western Assistance So Far 22 Recommendations 24 4 No. 4 | May 2020
Rule of Law Reform after Zelenskyi’s First Year ANALYSIS
• Rule of law reform, fundamental to the consolida- tion of any country’s democratic future, is missing in Ukraine. Building independent rule of law institutions is a process that takes both years and coordinated ef- forts across multiple governments to mature. While one political cycle or the mandate of one president is not sufficient for this endeavor to succeed, it can set a promising course.
• Ukrainians have entrusted Volodymyr Zelenskyi and his party, the Servant of the People, with un- EXECUTIVE SUMMARY EXECUTIVE precedented legitimacy to deliver justice and free public institutions from corruption.
• At the beginning of their mandate in Ukraine’s pre- mier-presidential system, President Zelenskyi and his parliamentary supermajority had a historic opportu- nity to initiate sweeping reforms that would have been impossible to push through under the usual conditions of a competitive democratic system.
• A lack of strategy and long-term commitment to pursuing profound and sustainable rule of law re- form resulted in half-step initiatives by President Zelenskyi and his team.
• While Zelenskyi’s legislative initiatives and ap- pointments from early in his tenure set the right course for reforming some rule of law institutions, his weakness for immediate results and high ap- proval ratings put pressure on the reformers to deliver or leave office – providing power groups interested in stifling change with opportunities for leveraging the political system.
• Appointing Ruslan Ryboshapka as prosecutor general was a major achievement for prosecution reform in Ukraine. But his subsequent dismissal by the Rada after only seven months in office, as well as the president’s decision to take no action to protect him, is one of the biggest failures for the course of this institution’s reform.
• One year into his presidency, Zelenskyi’s lead- ership is weakened and fragmented by powerful financial groups interested in maintaining the sta- tus quo. Strong vested interests have consolidated to put yet more brakes on reforming the rule of law.
• Western pressure and, most importantly, the fi- nancial conditionality of international institutions are the strongest safeguard of both the reform pro- cess and progress in Ukraine. No. 4 | May 2020 5
ANALYSIS Rule of Law Reform after Zelenskyi’s First Year
INTRODUCTION ACRONYMS Widespread disappointment with previous pat- terns of governance and traditional politics marred BFI Bureau of Financial Investigations by corruption helped Volodymyr Zelenskyi, a polit- CIE Commission on Integrity and Ethics ical novice, win Ukraine’s presidential elections by CC Constitutional Court of Ukraine an unprecedented landslide of 73 percent of the vote HACC High Anti-Corruption Court in April 2019. In July 2019, his party, the Servant of HCJ High Council of Justice the People (Sluha Narodu) – a motley collection of HQCJ High Qualification Commission political interest groups – won parliamentary elec- of Judges of Ukraine tions with the first single-party majority in mod- KDAC Kyiv District Administrative Court ern Ukrainian history. Together, these results gave NABU National Anti-Corruption Bureau Zelenskyi and the country’s young prime minister, NAPC National Agency for the Prevention Oleksiy Honcharuk, almost unrestrained executive of Corruption and parliamentary power to change Ukraine. OPG Office of the Prosecutor General PGO Prosecutor General’s Office For any political force freshly installed into office, the SAPO Specialized Anti-Corruption first few months are key for launching difficult and Prosecutor’s Office usually unpopular reforms. These then set the course SBI State Bureau of Investigations for a new political cycle. Zelenskyi and the Honcharuk SC Supreme Court of Ukraine government took many skeptics and critics by surprise SBU National Security Service of Ukraine with the accelerated course of reform they initiated SGUA EU’s Support Group for Ukraine in a so-called turbo regime. Indeed, the reforms un- VLAP Visa Liberalization Action Plan dertaken before the March 2020 government reshuf- fle, which replaced the government of Honcharuk with that of Denys Shmyhal, inspired cautious hope.
One year into Zelenskyi’s presidency, however, and institutions of the rule of law, which are at the Ukrainians have not seen sufficient progress on the heart of Ukraine’s process to consolidate its demo- bold changes that were promised during 2019’s elec- cratic transformation. tion campaigns: delivering justice, standing up to oligarchs, strengthening the economy, and bring- Moreover, reforming the rule of law is a complex ing peace to Donbas (Figure 1). While Zelenskyi has endeavor that needs to be backed by bold political pushed forward legislative initiatives and appoint- leadership and strong administrative capacity. In ments that have set an initial course for rule of law order for such reforms to consolidate, it takes de- reform, his lack of clear strategy and commitment – cades, multiple governments, coordinated effort, coupled with his weakness for pursuing immediate and a widespread pro-reform consensus among ma- results – were exploited by strong vested interests jor stakeholders. The reshuffle of the Ukrainian gov- that again quashed headway. ernment on March 4, 2020 – just as the country was plunging into the COVID-19 pandemic – was a turn- Although some positive achievements were made, ing point for President Zelenskyi and national poli- judicial reform is currently stalled and undermined tics, marking the beginning of a deep crisis both in from within. The clean-up of the country’s prosecu- the president’s team and his political party. The de- tion was interrupted. Anti-corruption agencies are velopments around the fragmentation of Zelenskyi’s under attack where they work. Reform of the Na- political leadership, together with the government’s tional Security Service of Ukraine (SBU) has not even weakened capacity to protect institutions and re- begun while other law enforcement agencies need forms, create unfavorable ground for further prog- further work. High-level convictions have yet to take ress on genuine and sustainable reforms. place. The old guard’s power to stifle change accord- ing to its interests is again increasing at the expense In order to understand what the international com- of the government’s capacity to defend the values munity can expect from the remainder of President 6 No. 4 | May 2020
Rule of Law Reform after Zelenskyi’s First Year ANALYSIS
FIGURE 1 – EVALUATION OF THE SUCCESS OF VOLODYMYR ZELENSKYI‘S FIRST YEAR IN OFFICE, IN %
9 12 16 26
Prosecution of Reducing the representatives level of corruption of the previous among officials government for corruption
66 SUCCESSFUL 73 NOT SUCCESSFUL HARD TO SAY/ DON‘T KNOW 10 15 21 21
Ending the war, Countering the settlement of the economic crisis conflict in Donbas
69 64
Source: “One Year of President Zelensky, Fighting the Coronavirus Pandemic, May Holidays and Political Ratings,” Kyiv International Institute of Sociology, May 19, 2020:
Zelenskyi’s political mandate in the rule of law area, ical and economic order. Since that time, the coun- this paper analyzes the major initiatives undertaken try has embarked on a strenuous path of reforms within the first year of his tenure in regard to the ju- supported by its international partners, most im- diciary, prosecution, anti-corruption institutions, and portantly the European Union and the International key law enforcement agencies. It also provides a list of Monetary Fund. Consequently, Ukraine has achieved recommendations for the EU and its member states on important results over the last five years, which how to help Ukraine consolidate its rule of law.1 were only possible due to the strong pressure ap- plied domestically by reform-minded actors and in- ternationally by the conditionality mechanisms of its DOMESTIC AND INTERNATIONAL partners – the so-called “sandwich effect.” CONTEXT FOR RULE OF LAW REFORM Increased Domestic Demand for Reform
The Revolution of Dignity in 2014 raised Ukraini- Progress on rule of law in Ukraine, however, has ans’ hopes and expectations for the consolidation of not been systematic. Indeed, important system- their country’s European future within a new polit- ic problems remain that affect the country’s dem-
1 This paper borrows from the European Commission’s definition of the rule of law. It states that all members of a society, including those in government and parliament, are equally subject to the law and the control of independent courts – irrespective of the political majorities in office. Consequently, states require independent and accountable institutions of justice, prosecution, anti-corruption, and law enforcement. No. 4 | May 2020 7
ANALYSIS Rule of Law Reform after Zelenskyi’s First Year
ocratic transformation. In particular, strong vested Ukraine was close to losing the attention of the in- interests, weak rule of law institutions, and endemic ternational community. The unexpected and over- corruption (Figure 2) still seriously affect Ukraine’s whelming electoral support that President Zelenskyi economy, governance, and society. These challenges and his party received in 2019, however, gave the EU, directly impact the volume of foreign direct invest- its member states, and other international partners ment entering the country. Investors are unwilling to cautious hope for renewed momentum. While de- invest when poor institutions encourage corruption, velopment partners had previously paid particular nepotism, and red tape that all increase the costs of attention to supporting Ukraine’s fight against cor- doing business.2 Moreover, weak rule of law erodes ruption, there is now a window of opportunity to democratic governance. It also impacts the level of broaden their interest into wider progress on the trust that citizens have in political institutions. rule of law.
These poorly addressed grievances propelled During a two-day visit to Ukraine this February, Volodymyr Zelenskyi to the fore of Ukrainian politics Oliver Varhelyi, the EU’s Commissioner for Neigh- in 2019’s national elections. Yet, if in early autumn borhood and Enlargement, stated that he wants to 2019, his unprecedented societal support coupled bring relations between Ukraine and the EU to a with a united political force in parliament helped new level. He said that the EU will continue its sup- the president easily push reformist legislative acts port for good governance and rule of law reforms in through the Verkhovna Rada, this momentum is now Ukraine, as well as prioritize boosting the Ukrainian over. In November 2019, against the background of economy.4 Moreover, in her statement on Ukraine in lack of progress on either Donbas or domestic re- December 2019, IMF managing director Kristalina forms, Zelenskyi’s high popular support started fad- Georgieva said that, following a telephone conversa- ing away, hitting a new low this April (Figures 3A and tion with Zelenskyi, they both agreed that “Ukraine’s 3B) despite the March government reshuffle meant economic success depends crucially on strengthen- to stop its decline. Currently, however, the president ing the rule of law, enhancing the integrity of the ju- is still the political figure whom Ukrainians most diciary, and reducing the role of vested interests in trust. Only 32 percent of respondents to a recent poll the economy,” among other important reforms.5 do not trust Zelenskyi; all other political actors have higher levels of distrust (Figure 4). As of May 2020, Because of strong societal support for Ukraine’s Eu- the president’s party, Servant of the People (SoP), al- ropean future, the EU and other international part- so remains the dominant political force (Figure 5). ners, such as the IMF, have always been influential It is, however, deeply fragmented and heavily influ- for Ukraine’s course of reforms. Moreover, their con- enced by strong political and economic groups with ditionality mechanisms came in handy for help- high stakes in the course of reforms. In 70 percent of ing to pass difficult reforms when domestic political the voting in the Rada in March, SoP lacked the nec- will was insufficient. Given the uncertainty resulting essary amount of votes within the party to pass laws. from the COVID-19 pandemic and its economic af- In fact, out of 25 laws adopted, only 7 of them were termath – alongside shifting priorities resulting from passed with sufficient votes from the SoP alone.3 multiple crises that the EU is managing both inter- With his party in crisis, President Zelenskyi’s ca- nally and at its external borders – it will be a chal- pacity to push forward his reform agenda is further lenge for Ukraine to remain a priority on the agendas undermined. of its development partners. This also means that the pressure for difficult reforms may remain mostly The International Context: on the shoulders of the country’s own pro-reformist An Opportunity and a Hindrance for Reform constituencies.
Against the background of stalled progress on both conflict settlement in Donbas and domestic reforms,
2 Bonnie G. Buchanan et al., “Foreign Direct Investment and Institutional Quality: Some Empirical Evidence,” International Review of Financial Analysis 21 (2012), pp. 81–89. 3 Committee of Voters of Ukraine, “Mono-majority failed supporting the voting in 70% of legal acts passed by the Rada,” KVU News, March 31, 2020:
Rule of Law Reform after Zelenskyi’s First Year ANALYSIS
UKRAINE’S INSTITUTIONAL SETTING FOR RULE OF LAW
CONSTITUTIONAL COURT: 18 MEMBERS It asesses whether the legislative acts of the parliament, president, cabinet, and Crimean Parliament are in line SELF-GOVERNING with Ukraine’s constitution. JUDICIAL BODIES
• Assembly of Judges: 300+ delegates • Council of Judges: 33 members • High Council of Justice: 21 members SUPREME COURT: 4 COURTS WITH A TOTAL OF 193 MEMBERS • High Qualification Committee of (administrative, commercial, Judges: 12 seats, 0 of which are criminal, and civic) currently filled
APPELATE APPELATE APPELATE HIGH ANTI- ECONOMIC ADMINISTRA- GENERAL CORRUPTION COURT
COURTS: TIVE COURTS: COURTS: (HACC): 39 MEMBERS 7 COURTS 8 COURTS 26 COURTS Cases concerning corrup- THE JUDICIAL HIGH COURT ON tion in Ukraine that caused SYSTEM OF INTELLECTUAL PROPERTY: damages equivalent to at 30 MEMBERS least $31 thousand are to COURTS be brought directly to this court. Appeals are consid- DISTRICT DISTRICT DISTRICT ered by the HACC’s ECONOMIC ADMINISTRA- GENERAL separate Appeal COURTS: TIVE COURTS: COURTS: 280 Chamber. 27 COURTS 27 COURTS COURTS
Special Prosecution Special OFFICE OF THE on Military Anti-Corruption PUBLIC PROSECUTION PROSECUTOR Crimes and Prosecutor’s This criminal justice GENERAL: 1,500 Crimes in the Office (SAPO) authority ensures that Military employees Industry laws are observed in two areas: REGIONAL • By authorities carrying PROSECUTION OFFICES: out detective operations, • 24 regional offices inquiries, and pre-trial • Prosecutor’s Office AR Crimea and investigation; the City of Sevastopol • In the enforcement of • Prosecutor’s Office of the City of Kyiv court judgments delivered in criminal cases. It also supports the pros- DISTRICT ecution in court on behalf PROSECUTION OFFICES of the state.
NATIONAL ANTI- NATIONAL AGENCY CORRUPTION BUREAU FOR PREVENTION OF OF UKRAINE (NABU) AUTHORITIES TO CORRUPTION (NAPC) Charged with investigating It shapes and implements corruption in Ukraine and PREVENT AND anti-corruption policy while preparing cases for prose- FIGHT HIGH-LEVEL creating an environment cution, it has investigatory CORRUPTION conducive to the prevention powers but cannot indict of corruption that includes suspects. For its findings to the electronic declaration become part of a criminal of assets. case, they must be passed to SAPO.
BUREAU OF NATIONAL POLICE NATIONAL SECURITY STATE BUREAU OF FINANCIAL INVESTI- LAW ENFORCEMENT This police force ensures SERVICE OF UKRAINE (SBU) INVESTIGATIONS (SBI) GATIONS (BFI) Among their other public safety and order and Although it now focuses It deals with crimes Legislation to create this is responsible for protect- on counterintelligence and (excluding corruption) special forensic bureau for functions, all mentioned ing human rights and the combating terrorism, it still by high-level officials, financial crimes has not yet institutions have pre-trial interests of society and the includes a department for employees of law enforce- been enacted. The president is currently developing a investigative functions. state. It also investigates the investigation of ment authorities, the police, and prevents crime. economic crimes and the prosecution. new bill that he will then (Department K). submit to the Rada.
Source: Authors’ compilation of data as of May 1, 2020 from the legislation on all respective institutions and their institutional websites. No. 4 | May 2020 9
ANALYSIS Rule of Law Reform after Zelenskyi’s First Year
FIGURE 2 – RULE OF LAW AND CONTROL OF CORRUPTION IN UKRAINE, 2004–2018 Control of Corruption Rule of Law
1.50
1.00 The Orange Revolution Revolution of Dignity 0.50
0.00
-0.50
-1.00
-1.50 2004 2006 2008 2010 2012 2014 2016 2018
Source: World Bank, World Governance Indicators, 2019 Note: Estimate gives the country’s score on the aggregate indicator, ranging from -2.5 (low) to 2.5 (high).
RULE OF LAW REFORM DURING tributed to the country’s presidents. The change ZELENSKYI’S PRESIDENCY SO FAR restored the premier-presidential system of 2004, which helps prevent the concentration of political Zelenskyi’s campaign promise to get rid of corrup- power in the sole hands of the president and makes tion could not be fulfilled without addressing rule the prime minister’s powers nearly as strong. Hence, of law issues. When he became president, he prom- the institution of the presidency is not currently as ised to initiate long-awaited reforms in the judiciary, powerful as it used to be during the eras of Leonid prosecution, security sector, and other law enforce- Kuchma and Viktor Yanukovych, who served as the ment agencies that would strengthen the fundamen- country’s presidents from 1994 to 2004 and 2010 to tals of Ukraine’s democratic transformation. With 2014, respectively. Still, in the current system of gov- very few exceptions,6 however, the rule of law re- ernance, the president is the commander in chief of forms initiated so far have hardly produced any tan- the armed forces, has sole authority over the SBU, gible results. The following sections analyze the main and retains sufficient control over the office of the changes that have been undertaken in these areas to prosecutor general (OPG), the judiciary, and law- gauge expectations for further reform progress in enforcement bodies. In addition, many informal tools the remaining years of Zelenskyi’s tenure. are left in the president’s hands, which also create important power imbalances in his favor. Petro Poroshenko’s Legacy: Rule of Law Reforms from 2014 to 2018 Although during Poroshenko’s presidency author- ities undertook the boldest rule of law reforms to We cannot assess the impact of Zelenskyi’s proposed increase transparency and limit opportunities for solutions in this field unless we first understand the corrupt practices since Ukraine’s independence, institutional challenges and problems he inherited these were patchy and suffered from many deficien- from his direct predecessor, Petro Poroshenko who cies (see page 11). Thus, Zelenskyi inherited most- served as Ukraine’s president from 2014 to 2019. ly weak rule of law institutions and key unsolved problems from the country’s old system were passed Upon his election one year ago, Zelenskyi took over on, among them corruption, nepotism, and politi- both new and old rule of law institutions, most of cal influence over judges, prosecutors, and law en- which were weak. Before we explore them, howev- forcement authorities. Moreover, the power of the er, we must mention the change of the constitutional country’s entrenched vested interests was mere- balance of powers in Ukraine after 2014’s Revolution ly reshuffled and continued unabated. Most impor- of Dignity that helps explain how much of the suc- tantly, reforms failed to bring policy-makers and cesses and failures in rule of law reform can be at- officials who abused their public offices to justice –
6 In October 2019, Ukrainian lawmakers reinstated criminal liability for illegal enrichment of government officials after the Constitutional Court of Ukraine overturned the previous law on illicit enrichment in February 2019 just before Petro Poroshenko left office. 10 No. 4 | May 2020
Rule of Law Reform after Zelenskyi’s First Year ANALYSIS
FIGURE 3A – COMPARATIVE APPROVAL RATINGS OF DECIDED VOTERS, IN %
42.6 Volodymyr Zelenskyi 44.2 30.2
Yuriy Boyko
Petro Poroshenko
Yulia Tymoshenko
Igor Smeshko
Oleg Lyashko Approval rating April 2020 Approval rating February 2020 Anatoly Gritsenko Official results of first round of 2019 elections Alexander Vilkul
Other candidates
0 10 20 30 40 50 60
Source: Authors’ compilation of data from Kyiv International Institute of Sociology for Feb 2019, Feb 2020, and Apr 2020 (accessed May 5, 2020).
a fact that has angered many Ukrainians for whom Indeed, according to an assessment by the Ukrainian high-level convictions are a key performance indi- DEJURE Foundation in 2019, “the courts have failed cator. This has led to the persistence of the public’s to gain meaningful independence – independent perception that rule of law institutions are amongst judges continue to be pressured, while others con- the most corrupt in Ukraine. The very low levels of tinue to be used for political purposes. Despite the trust are reflective of this situation (Figure 6).7 introduction of a constitutional amendment re- quiring a competitive selection process to the Con- The Judiciary: Resilient to Reform stitutional Court, the process remains politically motivated…”9 Because Ukrainians perceived the judicial system and law enforcement agencies to be the main pillars of Following constitutional amendments in 2016, the former President Yanukovych’s authoritarian regime, authority to appoint judges was transferred from seeking justice has been one of their key priorities. parliament to the High Council of Justice (HCJ), a During the Revolution of Dignity, both institutions key body conceived to be self-governing and auton- played a key role in legalizing the old regime’s crimes omous from the rest of the judiciary, as well as the such as the prosecution and jailing of protesters. But legislative and executive branches. Together with when citizens demanded that the system be purged the High Qualification Commission of Judges (HQCJ), of the judges who were dependent on politicians and the HCJ was given the responsibility to reform the oligarchs,8 the Ukrainian judiciary has again proven system from within. As the culmination of this pro- resistant to change. As a result, President Zelenskyi cess – after a qualification assessment of 2,038 judg- inherited an unreformed judiciary, which was most- es in 2019 that was intended to be rigorous – the HCJ ly dominated by the interests of the old system. Ma- dismissed only 15 judges from the system. Five years ny of Ukraine’s judges also were part of this system, after the revolution, 227 of the 337 judges who pros- hence reinforcing it. ecuted activists maintained their seats.10 Moreover, 44 of the 193 judges appointed to the new Supreme
7 “2019 Results and 2020 Forecasts: Public Opinion,” Democratic Initiatives Foundation and the Razumkov Centre, December 26, 2019:
ANALYSIS Rule of Law Reform after Zelenskyi’s First Year
RULE OF LAW REFORMS to comply with this policy made more than 2,000 FROM 2015 TO 2017 judges voluntarily leave their positions, and thus brought fresh cadres to the system, this was not Between 2015 and 2017, Ukraine’s reformers enough to significantly remedy the judiciary. The worked intently to establish new formal recruitment process for the new Supreme Court, structures and processes to expose, investigate, which ended in late 2017, was only partially and prosecute high-level corruption. Among the transparent. With nearly 80 percent of the most important institutions to result from this newly appointed judges having been part of the work were the National Agency for Prevention of previous system, there is little evidence to show Corruption (NAPC), the Special Anti-Corruption that the new Supreme Court has now started to Prosecutor’s Office (SAPO), the State Bureau of be fully independent or started to avoid exerting Investigation (SBI), the National Anti-Corruption any undue political influence. The clean up of Bureau of Ukraine (NABU), and the High Anti- Ukraine’s lower courts also appears to have been Corruption Court (HACC). superficial.
The NAPC has not gained credibility; rather, The establishment of an independent NABU it has been a source of controversy since its through a legal setup that ensures its institu- establishment. Confronted by allegations that tional independence and a rigorous recruitment its leadership is not politically independent and process was one of the main successes that that it sabotaged the process for verifying the was achieved during this same period. While its asset declarations of state and local government independence and subsequent achievements officials, the NAPC was in dire need of a complete have attracted numerous attacks, NABU’s great- organizational re-boot and new top leadership. est challenge during Poroshenko’s presidency The reputation of the SAPO was damaged by was the lack of a properly functioning judiciary the revelation that its head, Nazar Kholodnitsky, able to independently try its cases. used undue influence to sway the outcome of an investigation. The SBI, which was created to Alongside preserving an independently deal with the crimes committed by top officials, functioning SAPO, saving institutions such as law enforcers, military officers, and judges, NABU from power groups interested in retaining failed to bring new blood into the system with a their monopoly on law enforcement and justice compromised recruitment process for its senior also required the creation of an independent leadership. The reform of the OPG has also been anti-corruption court (HACC). While HACC was thin; because having a loyal individual in the established during Poroshenko’s presidency country’s top investigative position has always under heavy pressure from international partners been important for Ukraine’s heads of state, and its rigorous recruitment process of judges genuine reform was never a priority. ended in April 2019, this new court only started working in September 2019. In 2016, judicial reform advanced with the cre- ation of a new Supreme Court and the reduction With the exception of the patrol police, there has of the number and levels of courts from four to been no significant reform of law enforcement three. Also, a new electronic asset declaration agencies. The proposal to limit the powers of the system was introduced, which obliged officials to National Security Service of Ukraine (SBU), has declare all assets they possess inside and outside failed, as have efforts to have it overseen by a Ukraine, as well as all assets officially registered specialized parliamentary committee. in the name of their relatives. Although the need 12 No. 4 | May 2020
Rule of Law Reform after Zelenskyi’s First Year ANALYSIS
FIGURE 3B – ATTITUDES TOWARD VOLODYMYR ZELENSKYI‘S POLICIES, IN %
Sep Oct Nov Nov Dec Feb Mar Apr 2019 4-7 22-25 2020 100 NEGATIVE 80 NEUTRAL 60
40 POSITIVE
20
0
Source: “Assessment of Government Success and Public Response to the Coronavirus Epidemic and Political Developments in the Country,” Kyiv International Institute of Sociology, April 14, 2020
Court also have integrity issues.11 There is further ev- sion on Integrity and Ethics would have resulted in idence that the HCJ exercises pressure over inde- ensuring the high institutional integrity of the HQCJ pendent judges via disciplinary investigations.12 and HCJ as two self-governing bodies of the judicia- ry. In reality, however, the law gave too much pow- Zelenskyi raised a lot of hopes for the reform of er over the process to the HCJ, which itself was in Ukraine’s limping judicial system when, in Novem- bad need of renewal.14 The law’s implementation re- ber 2019, he put forward a law meant to improve the vealed exactly this problem as the HCJ subsequently system’s weakest points.13 Among the major changes blocked its progress. In December 2019, for exam- the law proposed was the overhaul of the HQCJ, in- ple, when the HCJ adopted the rules for selecting cluding setting up competitive selection procedures new HQCJ members, it watered down the role that for its members. The HQCJ is in charge of select- international experts were to play in the process of ing judges and conducting their assessment as well ensuring their integrity. While the participation of as recommending judges to the HCJ for their subse- international experts had been considered to have quent appointment or transfer. The law also estab- been a move in the right direction, the current form lished a separate Commission on Integrity and Ethics of the regulations still allows for the appointment of with the power to cleanse both the HQCJ and HCJ. HQCJ members who lack integrity. Moreover, the Further, it reduced the number of Supreme Court February 2020 deadline for completing the setup of judges from 200 to 100. the new HQCJ and ethics commission was missed. Ukrainian anti-corruption activists accused the HCJ The law, however, contained significant flaws and of intentionally sabotaging and delaying judicial re- was only partially supported by civil society. Ideally, form15 while the latter blamed international organi- the reform of the HQCJ and creation of the Commis- zations instead.16
11 Olena Makarenko, “Judicial reform 2.0: Zelenskyy comes with initiatives only partly supported by society,” Euromaidan Press, September 4, 2019: ANALYSIS Rule of Law Reform after Zelenskyi’s First Year THE KYIV DISTRICT pressed criminal charges against KDAC chairman ADMINISTRATIVE COURT: Pavlo Vovk and two other judges. In connection A SYMBOL OF JUDICIAL to this, Vovk temporarily stepped down from the CORRUPTION post, which he had occupied since 2010. The Kyiv District Administrative Court (KDAC) Soon afterwards, the HCJ rejected the prosecutor is infamous for its controversial rulings and general’s motion to suspend Vovk from office obstruction of the judicial reform process. Among during the ongoing criminal proceedings against the numerous decisions in its portfolio that have him. Later, in November 2019, the court rejected sparked public anger are the legitimization of the the case that the PGO had prepared for trial, dispersal of peaceful protesters during the Rev- stalling the case indefinitely. olution of Dignity, the suspension of the duties of pro-reformist Acting Health Minister Uliana In January 2020, KDAC judges reelected Vovk as Suprun, the ruling that the nationalization of chairman. Vovk was reinstated to the KDAC just PrivatBank was illegal despite charges against it, days after Ukraine’s parliament rejected important and the blocking of investigations of high-profile amendments that would have transferred several corruption. key competences of the ill-reputed institution to the Supreme Court – including the adjudication KDAC judges became the target of a corruption of disputes on the composition of the HQCJ, an probe by NABU in July 2019. The investigation important body for judicial reform. Ukrainian civil revealed that they used their connections to society lamented that Vovk’s comeback under such appoint politically loyal members to the HQCJ circumstances was a clear sign that the country’s in order to bypass its mandatory qualification corrupt judiciary is escaping reform. assessment. In early August 2019, the PGO In addition, the law’s stipulation to halve the number through the dismissal of judges who are disloyal to of Supreme Court judges was controversial from the the government or keeping those who have integri- outset. Although Ukraine’s Supreme Court is unable ty issues.18 to process all of the cases it receives – as of January 2020, there was backlog of 50,000 – some consid- In March 2020, old guard judges made it clear that er the 193 judges currently serving on that court to the system will not only not change from within, be an unjustified luxury, given that local-level courts but it will also resist politicians’ attempts to change are understaffed and fail to rule on basic but import- the status quo. On March 11, in response to a sub- ant cases for ordinary citizens. Independent legal mission by the Supreme Court, the Constitution- experts from the DEJURE Foundation, on the other al Court of Ukraine (CC) ruled that most provisions hand, calculated that 198 judges would be an appro- of Zelenskyi’s law are unconstitutional.19 In February priate number to have on the Supreme Court for the 2020, the CC had already annulled parts of the judi- next three years with possible revision after that.17 cial reform of 2016 when it declared the liquidation The Venice Commission also criticized the law’s pro- of the former Supreme Court to be unconstitution- visions for failing to specify procedures for selecting al and restored the rights of the old guard judges. a new Supreme Court. According to its issued opin- Some argue that, since 9 out of the 15 members of ion, the lack of such procedures might lead to the the CC were entrenched in the old legal establish- politicization of the selection process, for example, ment, “the CC has a tendency to rule in favor of the blames-int-partners-for-blocking-judicial-reform> (accessed May 1, 2020). 17 “200 vs 100: how many judges are needed in the Supreme Court” [in Ukrainian], DEJURE Foundation, January 30, 2020: Rule of Law Reform after Zelenskyi’s First Year ANALYSIS incumbent judges and the ‘judicial corporation.’”20 In up under heavy pressure from the West – especially other words, the CC will almost always rule against due to IMF conditionality – rather than on the ini- any judicial reform that endangers its members’ in- tiative of incumbent Ukrainian elites. Moreover, terests and positions. Moreover, the selection pro- NABU’s future independence looks uncertain. It will cess for CC judges also remains largely politicized. also take more time for the HACC to hand down its first high-level convictions. In this regard, 2020 will It is not clear whether the CC coordinated its deci- be a test of the efficiency of the country’s newly es- sions with the office of the president, but it has ef- tablished anti-corruption system. fectively put an end to Zelenskyi’s attempt to reform the judiciary. Moreover, judicial developments on the As during Poroshenko’s presidency, NABU contin- ground midway through the first year of Zelenskyi’s ues to experience pressure and attacks from politi- tenure illustrate just how much the “old guard” is ca- cal and financial power groups with strong interests pable of preventing reform. Please see the info box in preserving the old system. These include oligarch on page 13 for a telling example provided by the Kyiv Ihor Kolomoisky who was not only under investiga- District Administrative Court. tion by the SBI at that start of Zelenskyi’s presidency, but who is also backing a group of MPs in Zelenskyi’s Rebooting the reform process would require bold- own political party.21 Kolomoisky’s attempts to ex- er political vision accompanied by legislative actions ert undue influence grew in 2019 and 2020. One ex- as well as behavioral change on behalf of the judges planation for this increase is the greater threat that themselves – in equal measure. Considering how re- NABU poses now that it can work together with the silient the judicial corporation is to reforming itself HACC and cases are more likely to be reviewed and from within, the latter is currently highly unlikely. put on trial more quickly. At this point, more than 400 cases have been submitted to the HACC and im- Anti-corruption Institutions: portant high-level convictions and imprisonments Under Growing Attacks could take place as early as 2020. Provided that cas- es of selective justice will not occur, initial high-lev- The reform and activity of anti-corruption institu- el imprisonments will be the most vivid indicators tions during the first year of Zelenskyi’s presidency for society and the international community at large show positive, though not irreversible, results. The that the Ukrainian judiciary and law enforcement establishment of NABU in 2015 and the HACC in 2019 system is finally working. Financial interest groups, were perhaps the most successful achievements of however, are not expected to simply observe this 2014 to 2019. Both institutions, however, were set happening but rather use all of the informal tools of FIGURE 4 – NEGATIVE APPROVAL RATINGS, JANUARY 2020, IN % Petro Poroshenko (European Solidarity) 78 Yulia Tymoshenko (Bat‘kivshchyna) 73 Svyatoslav Vakarchuk (Voice) 62 Yuriy Boyko (Opposition Platform – For Life) 56 Oleksiy Honcharuk (former Prime Minister of Ukraine) 53 Dmytro Razumkov (Chairman Verhovna Rada) 44 Andriy Yermak* (Head of Office of the President) 42 Volodymyr Zelenskyi (President of Ukraine) 32 Arsen Avakov* (Minister of Internal Affairs) 32 Source: “Socio-political Moods of Population (January 22–26, 2020),” Sociological Group Rating, February 4, 2020 * Data from April 2020 published by Kyiv International Institute of Sociology on May 4, 2020 since not included in previous survey. 20 Mykhailo Zhernakov, “Judicial Reform in Ukraine: Stalled, Damaged, and Abandoned,” DEJURE Foundation, March 16, 2019: ANALYSIS Rule of Law Reform after Zelenskyi’s First Year 3.9 Shariy Party 3.6 Voice Servant of 3.5 Power and Honor the People 3.1 The Radical Party 3.0 Freedom 31.2 2.8 Civic Position FIGURE 5 – Opposition 2.7 Opposition bloc POLITICAL PARTIES’ Platform – 2.6 Ukrainian Strategy 17.4 0.7 Samopomich APPROVAL RATINGS For Life 0.2 National Corps IF ELECTIONS TO 1.5 Other parties THE VERKHOVNA European RADA WERE HELD 14.8 Solidarity IN MAY 2020, IN % Bat’- 8.9 kivshchyna Source: “One Year of President Zelensky, Fighting the Coronavirus Pandemic, May Holidays and Political Ratings,” Kyiv International Institute of Sociology, May 19, 2020: 22 “Draft resolution to dismiss NABU chief registered in Ukraine’s parliament,” UNIAN, February 8, 2020: Rule of Law Reform after Zelenskyi’s First Year ANALYSIS attempts to unlawfully remove its head.27 Later, a NABU and SAPO managed to improve their inter- similar warning came from the IMF. A letter from the institutional cooperation. In the second half of 2019 head of IMF’s mission to Ukraine, Ron van Roden, alone, these institutions announced more corrup- to the office of the president stated that dismissing tion investigations than they had during all of 2018 Sytnyk or diluting NABU’s powers would jeopar- (84 versus 79).31 dize the approval of a $5 billion lending program to Ukraine.28 President Zelenskyi’s ability to secure Because anti-corruption institutions have been a key NABU’s institutional independence will be a key focus of reforms after the Revolution of Dignity, they test of his political will and capacity to withstand have finally started picking up the pace of their activ- domestic pressure in the fight against high-level ity. Of the three institutions showing most progress corruption. at the moment, NABU is increasingly under strong attack. Whether these young anti-corruption insti- One achievement has been the reshuffling of NAPC, tutions can continue to act independently and keep the National Agency for the Prevention of Corrup- up the their new pace will be a key indicator of the tion. Under then President Poroshenko, the insti- government’s success in supporting the fight against tution, which he helped establish in 2016, failed to corruption. Considering, however, that internation- perform well in checking the electronic asset decla- al partners such as the IMF are strongly backing rations of public officials. This resulted in the resig- NABU with stern warnings against the Rada’s bills nation of some of its members, among them Ruslan aimed at dismissing Sytnyk, it might be impossible Ryaboshapka in 2017. Ryaboshapka later served as to determine whose success it would be to preserve Ukraine’s prosecutor general from August 2019 to NABU’s independence: President Zelenskyi’s, the March 2020. In December 2019, new leadership was IMF’s, or a combination of the two. selected for NAPC through a rigorous and transpar- ent recruitment process. As a result of this achieve- The Office of the Prosecutor General: ment, USAID resumed its direct support of NAPC at Reform Interrupted the end of January 2020 – assistance that had previ- ously been dropped due to NAPC’s poor institution- For years, Ukraine’s Prosecutor General’s Office al performance.29 (PGO) was a tool for repressing the regime’s oppo- nents and an instrument of political games. The Although it acted professionally in many instances, country’s least trusted institution, it hadn’t been re- SAPO, the Specialized Anti-Corruption Prosecutor’s formed since Ukraine’s independence.32 Zelenskyi Office that is another of Ukraine’s institutional pil- broke this vicious circle by appointing Ruslan lars in fighting corruption, had become infamous for Ryaboshapka, a prominent anti-corruption activ- blocking investigations submitted by NABU, among ist and professional, to be prosecutor general (PG) other things. In March 2019, civil society activists, in August 2019. The Rada’s decision, in March 2020, as well as then-US Ambassador to Ukraine Marie to dismiss Ryaboshapka after a tenure of only seven Yovanovitch, demanded the dismissal of SAPO’s head, months illustrates three main things: how resistant Nazar Kholodnytsky. At that time, Hugues Mingarelli, the old system is to change, how Zelenskyi favors who was serving as EU’s ambassador to Ukraine, also loyalty over merit, and how the president’s power criticized Kholodnytsky for not cooperating proper- over his own parliamentary majority has faded away. ly with NABU, thus undermining its efforts to inves- tigate corruption.30 Under the leadership of former On September 25, 2019, Zelenskyi’s Law “On Urgent prosecutor general Ruslan Ryaboshapka, however, Measures to Reform the Country’s Prosecution Au- 27 Post on the Twitter account of the US Presidency of the G7 Ambassadors’ Support Group in Kyiv, February 10, 2020: ANALYSIS Rule of Law Reform after Zelenskyi’s First Year thorities” came into force.33 This law paved the way Although the law brought about the most sweep- for replacing the PGO with the Office of the Pros- ing reform of Ukraine’s prosecution system in the ecutor General (OPG), a new institution. It also al- country’s history,36 it has been criticized for being lowed for prosecutors to be asked for reassessment fully concentrated in the hands of the new prosecu- through a merit-based and transparent process of tor general. Zelenskyi trusted Ryaboshapka and gave computer testing and interview. Thus, a complete re- him carte blanche to carry out the reforms. While shuffling of the prosecution system became possible. the integrity and professional record of Ryaboshapka and his deputies have never been questioned, the By the end of 2019, the assessment process at the decision to remove the Qualification Disciplinary central level was completed and deemed successful. Commission from the process of selecting public Of the 1,083 prosecutors who wished to go through prosecutors was considered problematic. The com- the reassessment process (80 percent of all prosecu- mission had been established in 2014 and started its tors), only 610 (56 percent) passed. Thus, on January work in 2017. The law adopted in September 2019 en- 2, 2020, the new OPG started working with approx- gaged external actors in the selection process in- imately 1,500 employees, down from the 2,400 who stead. Legal experts feared that many prosecutors had worked previously for the old PGO. Their sala- who were removed through their reassessment by ry also increased four fold – from UAH 7 thousand to external actors would later be able to restore their 29 thousand34 – making the job of prosecutor more positions in court, as had happened in the case of the attractive and financially sustainable. In 2020, re- national police (see below). Indeed, since the start of gional and local prosecutors are scheduled to un- 2020, 124 prosecutors who did not pass the last stage dergo the same reassessment process. It is expected of selection – based on an interview and thus prone that the overall number of prosecutors in the system to subjectivity – brought their cases to court.37 will go down from 15,000 to 10,000, a number envis- aged by the new law and considered more reason- Reforms initiated by Ryaboshapka were inter- able. According to Ryaboshapka, Ukraine has one of rupted by his dismissal on March 5 by a cross- the highest number of prosecutors per 100,000 peo- party vote in parliament. His dismissal took place de- ple in the world.35 spite recognition by the G7 Ambassadors to Ukraine of his substantial progress in reforming the OPG38; The law introduced additional structural changes according to Ryaboshapka, it came without expla- as well. For instance, military prosecution was dis- nation. President Zelenskyi, however, criticized mantled and two separate specialized departments him for the lack of progress on high-level cases.39 were planned: one to deal with armed conflict, which With his removal of Ryaboshapka, Zelenskyi has already been established, and the other to ad- not only demonstrated that he prioritizes loyal- dress torture and other gross human rights viola- ty of appointees over genuine independent institu- tions, which is yet to come. Also, in November 2019, tion-building, but that, by defying the pressure of the the prosecution lost the rights to open and conduct G7 Ambassadors, he is also better able to withstand criminal investigations, having transferred them to international than domestic pressure. the relevant pre-trial investigation authorities: SBI, NABU, SBU, and the National Police. Since then, On March 16, Iryna Venediktova, a former adviser prosecution authorities can only provide procedur- to Zelenskyi and lawmaker from his party, was ap- al guidance in criminal proceedings. pointed the new PG. Her background and profile 33 The Law of Ukraine “On Amending Certain Laws of Ukraine as to Urgent Measures to Reform the Prosecution Authorities,” Document 113-IX, adopted on September 19, 2019 (came into force on September 25, 2019): Rule of Law Reform after Zelenskyi’s First Year ANALYSIS FIGURE 6 – TRUST IN PUBLIC INSTITUTIONS Armed Forces of Ukraine 48.3 IN UKRAINE, DECEMBER 2019, IN % Church 39.8 Volunteer Organizations 38.6 State Emergency Service 33.4 President of Ukraine 31.7 -50.1 The Prosecutor’s Office -50.5 State Apparatus (Officials) -54.0 Political Parties -62.2 Judicial System Source: Public opinion poll of December 2019 by the Democratic Initiatives Foundation and -74.5 Russian Media the Razumkov Center are considered “unsuitable” for the position.40 She for successfully reforming such a corrupt institution? is expected to be fully loyal to and dependent on Did he have to sacrifice him as part of a larger pow- Zelenskyi, posing a real risk of politically motivat- er struggle with the Ukrainian oligarchs and region- ed prosecutions. When Venediktova served as acting al political forces? What is certain is that Zelenskyi head of the SBI between December 2019 and March interrupted what was considered the most sweep- 2020, she took some highly controversial steps (de- ing reform in prosecution that Ukraine has experi- tailed in the next section). In 2015, she failed to be enced to date, damaging his reputation as reformer appointed as judge of the Supreme Court when both domestically and among international partners. she scored less than the minimum required points. Soon after becoming PG, she removed Viktor Trepak State Bureau of Investigations: In Limbo who was heading the investigation of the Novem- ber 2018 murder of anti-corruption activist Kateryna President Zelenskyi also aimed to reboot the SBI, but Handziuk and making progress.41 One month later, his choice for its head did not inspire much hope. Venediktova’s deputy declared the investigation The SBI was created in 2017 to investigate the crimes complete and redirected the case to the court. of high-level officials, law enforcement authorities, Ukraine’s human rights community stated that this police, and prosecutors (excluding corruption, which decision was premature and aimed at acquitting is the responsibility of NABU). However, its former the high-level official who allegedly ordered the leadership proved to be ineffective and there were murder.42 complaints that the institution was “drowning in scandals.”43 Reforming an institution that had not been ad- dressed since independence is certainly complex, On December 3, 2019, the Rada adopted the Law “On especially given the strong vested interests in pre- the Optimization of the Work of the SBI,” which was serving the status quo. Still, President Zelenskyi’s ex- proposed by President Zelenskyi to improve the ac- pectation of immediate verdicts in high-profile cases tivity of the institution.44 It provided a change in its le- and quest to maintain high approval ratings hint at gal status, gave the SBI director broader powers, and his short-sightedness when it comes to deep struc- strengthened its parliamentary oversight. After the tural change. Moreover, Zelenskyi’s motives con- law came into force, its director, Roman Truba, was cerning Ryaboshapka are unclear. Did he appoint dismissed. Iryna Venediktova was then appointed SBI’s him believing more in his loyalty than his prospects acting director by President Zelenskyi until a perma- 40 Robyn Dixon and David L. Stern, “How Ukraine’s Zelensky lost the anticorruption movement,” Washington Post, March 17, 2020: ANALYSIS Rule of Law Reform after Zelenskyi’s First Year nent one could be selected through a competitive tance and the campaign promises of both Zelenskyi merit-based process. During her short tenure at SBI, and his party, no reform has taken place to date. Venediktova officially announced that she favors abol- ishing the law that grants amnesty to the 2014 Maidan In August 2019, Zelenskyi appointed Ivan Bakanov, his protesters. She also launched an investigation of for- childhood friend and former head of his production mer President Poroshenko that Ryaboshapka had re- studio, as the new head of SBU. Bakanov immedi- fused because he considered it politically motivated ately made bold statements about imminent change and argued that evidence for such a case was miss- and, in mid-October, presented a new draft law in- ing. In addition, Venediktova filled two deputy posts tended to reset the SBU according to international through an opaque competition process.45 standards. This draft law redefines the functions of SBU so that they do not overlap with other intelli- Importantly, the renewed SBI is in charge of inves- gence agencies. It takes away SBU’s economic secu- tigating crimes committed during the Revolution of rity functions, optimizes its organizational structure, Dignity. It is worth noting that the employees who and foresees its demilitarization and depoliticization. were working on cases related to the revolution at Despite sounding encouraging, these provisions are the old PGO when it was abolished were then moved not predicted to lead to systemic changes but rath- to the SBI to work on them there. This was done so er to “preserve the Soviet inheritance.” Instead of re- that institutional memory, as well as the work car- forming SBU to European standards, which was the ried out on those investigations so far, would be law’s declared intention, it tries to save the institu- preserved – an important step as the risk of the in- tion’s investigative powers and competences regard- vestigations falling apart in the transfer process to ing the fight against organized crime. Furthermore, other institutions was high. But one of the deputies some of the law’s proposed norms undermine the recruited by Venediktova is a former lawyer of for- procedural independence of other law enforcement mer President Yanukovych who was removed from agencies and allow SBU to interfere in any criminal office by 2014’s protests. proceedings at its discretion.47 While Venediktova was directly responsible for all In addition to reforming SBU, the government also top appointments at SBI during her tenure as act- plans to create a separate institution, the Bureau of ing director, it was President Zelenskyi who appoint- Financial Investigations (BFI). The establishment of ed her. At best, his choice signaled an increased risk such an institution is one of the priorities of IMF’s of ineffectiveness. And now, with Zelenskyi having cooperation with Ukraine.48 If created, it will inves- moved Venediktova to the post of prosecutor general tigate all commercial economic crimes against the in March, the SBI has been left in limbo until he ap- state. Until now, several institutions shared these points a new head. competences: the ministry of internal affairs, which had dismissed its own department in charge of fi- National Security Service: Reform Still to Come nancial crimes in September 2019; SBU; and the tax- ation police. Experts argue that BFI will reduce tax Reforming the SBU is among the most urgent and pressure on entrepreneurs and improve Ukraine’s challenging tasks that President Zelenskyi needs to business climate.49 Equally important for BFI to be a undertake. With more than 32,000 employees and truly independent institution, other bodies – fore- broad powers, including the investigation of financial most SBU – must simultaneously be deprived of their violations, it currently poses a real threat to Ukraine’s competence to investigate economic crimes. While business climate. In fact, 50 percent of foreign inves- the bill on BFI was approved by the Rada in its first tors consider the repressive actions of SBU to be an reading in October 2019, it failed in its second read- obstacle to investment.46 Yet despite SBU’s impor- ing in January 2020. Although the president is ex- 45 Natlia Lebed, “Why State Bureau of Investigations didn’t become Ukraine’s FBI but swamped with scandals?”, 112 International, January 31, 2020: Rule of Law Reform after Zelenskyi’s First Year ANALYSIS pected to submit a new bill on BFI, he has not yet after the Revolution of Dignity on February 22, 2014, done so. and has remained in this position ever since, having survived four governments and two presidents – the The National Police: No Reform So Far ministry has become a very powerful institution, a “state within the state.”54 Avakov seems to have been Despite high societal demand for reform of Ukraine’s responsible for sustaining the deficiencies of the na- law enforcement authorities and several attempts tional police in an attempt to maintain and increase by the government, there has been only one re- his influence. Since 2014, none of the high-profile al achievement so far: the introduction of the road crimes committed against journalists and civil ac- patrol police in 2015. This newly created institu- tivists have been properly investigated; nor have the tion, although formally a unit of the Ukraine’s nation- crimes in which police officers were allegedly in- al police, recruited and trained new personnel with volved.55 Despite the continuous demand by civ- the help of Western donors. Ninety-three percent of il society activists for Avakov’s removal, President those hired came from outside the system.50 Zelenskyi not only appointed him to serve in the gov- ernment of Prime Minister Honcharuk, but also kept The national police was itself established in 2015. Al- him in his second government under Prime Min- though the institution differs from its post-Soviet ister Shmyhal. Zelenskyi’s decision could mean at predecessor, it has hardly been reformed. The re- least three things: he has no intention to genuinely newal of its personnel, by and large, failed. By 2018, reform Ukraine’s law enforcement system, he un- 92.3 percent of old staff had gone through a reas- derestimates the danger that the powerful minister sessment process and was then taken over by the poses to his authority and approval ratings, or he has new police body. As for those who made up the struck a deal with Avakov in exchange for the securi- 7.7 percent that was fired, they were not only rein- ty services that he can provide. stated in their previous positions by the courts, but they also received more than €1.6 million in compen- sation for their forced absence, draining the public SIGNPOSTS ON WHERE budget.51 UKRAINE IS HEADING Effectively, all progressive initiatives within the po- A government’s commitment to conducting pain- lice that were started in 2015 came to an end in 2016. ful but necessary reforms is often measured by how Since then, there has been no political will to gen- much elites are willing to build strong institutions uinely reform the institution.52 Arguably, the main and curb entrenched vested interests. A litmus test challenge that the national police must still address for governments in democratizing societies such is the excessive influence of the minister of internal as Ukraine is whether they use their political pow- affairs. Due to reforms, the ministry of internal af- er to help consolidate rule of law institutions. In the fairs has formally become a body which no longer post-Soviet space, where nearly thirty years of tran- controls the work of five different institutions – the sition have cemented the strength of vested inter- national police, state border guard service, migration ests, consolidation of rule of law is critical – not only service, national guard, and state service on emer- for the democratic paths of the societies themselves, gency situations – but merely coordinates and allo- but also for the international community who can cates resources for them.53 In reality, however, things help support them and foreign investors who con- stand differently. sider investing in these countries. Under the leadership of the current minister of in- Volodymyr Zelenskyi’s unprecedentedly high legit- ternal affairs, Arsen Avakov – who was appointed just imacy and initial overwhelming majority in parlia- 50 Yevhen Zakharov, “Police Reform and Human Rights,” Kharkiv Human Rights Protection Group, July 3, 2017: ANALYSIS Rule of Law Reform after Zelenskyi’s First Year ment raised hopes, particularly among those who where they work. One test of Zelenskyi’s position on believe that a new Ukraine needs a radical rupture anti-corruption will be whether the current head of with its past and traditional politics. His election al- NABU will be sacked, a major concern for civil so- so raised serious concerns among those segments ciety actors and the international community. Even who believe that a political novice with unclear ties if he is not, considering the inaction of the presi- to the old system is unable to change the country or dent on the matter so far, this will most likely not be is even dangerous for Ukraine’s statehood. One year to Zelenskyi’s credit, but rather – yet again – due to into Zelenskyi’s presidency – with control lost over pressure from international partners. his SoP party in the Rada and reforms initiated that have disturbed the old system but not sufficient- Regarding the reform of law enforcement agencies, ly to change the status quo – Ukraine’s future is less no major changes have been adopted or implement- bright even for those who trusted his capacity and ed to date. Impartial investigations and convictions political will to act. on cases of violence against civil society activists and journalists, as well as on those where police them- During the past year, civil society and the interna- selves are involved, have yet to take place. The pow- tional community witnessed several attempts to er of the old guard is strengthening at the expense of reboot parts of Ukraine’s system of rule of law in- the president’s capacity to defend the values and in- stitutions. While Zelenskyi’s decision to give a free stitutions of the rule of law, which are at the heart of hand to his newly appointed prosecutor general in consolidating Ukraine’s democratic transformation. August 2019 has transformed into one of the boldest As after the Revolution of Dignity, the old system has reforms that the prosecution system has witnessed again proven actively resistant to change. so far, his decision to let the judiciary reform itself from within with minor reform intervention brought Consolidating rule of law is a complex process that less positive results. Considering the complexity of takes a prolonged period of time, coordinated and judicial reform amid the numerous challenges that consistent effort on behalf of multiple governments, Ukraine faces at the moment, it seems that it fell off and widespread pro-reform consensus among major the list of priorities. Judicial reform is, hence, cur- stakeholders. The government reshuffle on March 4 rently stalled for an indefinite time. was a turning point for Zelenskyi’s presidency which wound up demonstrating that his capacity to de- Prosecution clean-up got interrupted. Zelenskyi has fend institutions and reforms when they need pro- been unable or unwilling to protect Ryaboshapka’s tection from the power groups opposing them is course of reform of the prosecution system, and pre- showing deep cracks. But according to his former pro- ferred replacing him with someone more loyal. With reform prosecutor general, Ruslan Ryaboshapka, who this decision, Ukraine has missed the opportunity of was ousted after the reshuffle, without presidential a lifetime to bring order to one of the most difficult support “it’s not possible to establish rule of law” in sectors to reform. The newly appointed prosecutor Ukraine.56 general may not stand up to the magnitude of the challenge that the prosecution system is posing but Despite pushing forward many constructive provi- this remains to be seen. sions in various laws (most of which can be credit- ed to the established and readily available expertise The effect of Zelenskyi’s tenure on Ukraine’s of civil society), Zelenskyi failed to demonstrate the anti-corruption system is yet uncertain. The anti- capacity or political will to enforce his and his team’s corruption institutions that were established during decisions and get them through the Rada. Also, his Poroshenko’s presidency under strong pressure replacement of the government of Oleksyi Honcharuk from domestic reform-minded constituencies and after just six months in the office, showed that the international community are just starting their Zelenskyi has a highly populist approach that is guid- full-fledged activity. If these institutions are able ed by his approval ratings and lacks the vision and to perform the duties well that they have been as- power to protect reforms from being hijacked by signed, the years 2020 and beyond will bring major oligarchic interests. Moreover, with the reshuffle convictions. Their initial achievements have already and particularly the dismissal of PG Ryaboshapka, put vested interests under severe stress. As a result, Zelenskyi demonstrated that he prioritizes the anti-corruption agencies are under strong attack 56 Brian Bonner, “Riaboshapka: Zelensky Has Lost his Way,” UkraineToday.org, May 1, 2020: < https://ukrainetoday.org/2020/05/01/riaboshapka-zelensky- has-lost-his-way/> (accessed May 5, 2020). 22 No. 4 | May 2020 Rule of Law Reform after Zelenskyi’s First Year ANALYSIS loyalty of appointees over genuine independent The EU is divided on how to protect the rule of law institution-building. inside its own member states, as the cases of Hun- gary and Poland have shown.59 Moreover, it has no Zelenskyi’s current political crisis becomes even bluebook for what constitutes “a right path for re- more serious against the unfolding background of form” to establish and consolidate the rule of law the effects of COVID-19. The president’s capacity to – although it has frequently expected its eastern hold his party together and continue with govern- partners, including Ukraine, to produce one domes- mental reforms will be further undermined by the tically. At other times, the EU has been criticized pandemic’s projected economic aftermath for 2020: for being over prescriptive to others when it lacks a GDP decline of 5 percent and an unemployment a blueprint itself and faces serious rule of law chal- rate of 9.4 percent of the labor force (1.5 million to lenges of its own domestically. The EU has, however, 2 million people).57 Addressing such dramatic hard- learned from its experience with past enlargement ship will detract attention from other essential re- waves in Central and Eastern Europe and, today, it forms. Consequently, there is a high risk that rule applies some of those lessons farther east. Yet, after of law reform will be dropped as a priority during Ukraine’s Revolution of Dignity, it mostly relied on Zelenskyi’s presidency. conditionality measures related to anti-corruption and more abstract criteria applied to rule of law re- form without specific benchmarks or performance HOW INTERNATIONAL PARTNERS indicators. Having no benchmarks for rule of law re- CAN FURTHER SUPPORT form makes it almost impossible to objectively as- RULE OF LAW REFORM sess progress and leaves space for interpretation and politicization of the process both in Ukraine and the While there is no official impact assessment of the EU’s capitals. overall external assistance provided to Ukraine since 2014, this section is a modest attempt to provide an On the other hand, there are instruments that work overview of which mechanisms worked and which and need to be continued and further improved. did not over the past five years. It aims to help West- Here, we look at the positive role of conditionality, ern development partners understand how they can assistance, and political engagement and diplomat- further their support most effectively, particularly to ic pressure. promote rule of law reform in Ukraine. It concludes with a list of policy recommendations. First, the financial and political conditionality tools of the IMF and EU have played key roles in encour- Western Assistance So Far aging difficult and, sometimes, what seemed to be unacceptable reforms for certain powerful domes- Since the 1990s, Ukraine has been part of various in- tic actors. The approval and disbursement of loans ternational assistance programs and projects that have been the IMF’s major instruments, while the target rule of law reform. When the launch of the Eu- EU’s, so far, has been the Visa Liberalisation Action ropean Neighborhood Policy in 2004 and the signing Plan (VLAP). In both cases, corruption-related con- of the EU-Ukraine Action Plan in 2005 mandated an- ditionality measures have been the most common in nual progress reports, rule of law became an integral the past, while issues such as judicial reform received part of the EU-Ukraine bilateral agenda. The EU’s much less attention. broader assistance between 1992 and 2013 helped to raise awareness of European rules and standards in With its approval of visa-free travel for Ukraini- Ukraine, but it had a minor impact on the function- ans in 2017, the EU is considered to have exhausted ing of state institutions.58 The EU had little leverage one of its most important instruments for push- to make a real difference to the effectiveness of the ing rule of law reforms in the country. The EU’s fi- governance process. While the IMF was also an im- nancial conditionality has also played a role since, portant actor, no conditionality was attached to rule most prominently, its three programs of Macro-Fi- of law reforms before 2014. nancial Assistance (MFA) that have been in effect 57 Jack Laurenson, “Business Update – March 30: GDP to shrink, unemployment increases, banks vulnerable,” KyivPost, March 30, 2020: ANALYSIS Rule of Law Reform after Zelenskyi’s First Year since 2014 included legislative and institutional anti- of EU assistance to Ukraine – the “delegated agree- corruption benchmarks. In late 2017, Ukraine lost ments,” which are resource programs implemented an MFA tranche of €600 million because it failed to by development agencies of EU member states. Thus, meet several anti-corruption conditions. in 2017, a €16 million anti-corruption program was launched that was implemented by Denmark’s devel- Both the IMF and the EU’s VLAP conditionality con- opment agency.62 Several other programs have been tributed to important achievements. These include launched as well, including the Support Rule of Law the establishment of NABU and its independent and Reforms in Ukraine (PRAVO) for judiciary and law en- effective operation, the establishment of SAPO and forcement. Altogether, the EU and its member states the transparent selection process of its director, the have allotted €17 billion in assistance to Ukraine establishment of HACC and its competitive selection since 2014.63 process of judges, the establishment of NACP and the introduction of the electronic declaration of assets Finally, political engagement and diplomatic pres- (although there have been problems with verifica- sure on the ground have also shown positive re- tion), the adoption of legislation on asset-recovery, sults. This is where the EU has significantly improved greater transparency in public procurement, and its performance over the years. EU Ambassadors to transparency of funding for political parties.60 It is Ukraine Jan Tombinski and Hugues Mingarellli, who equally true that the EU’s conditionality mechanisms served from 2012 to 2019, did not shy away from have sometimes encouraged box ticking during the commenting on bills, appointments, and processes adoption process of anti-corruption laws and have during the period when most anti-corruption insti- had a less consistent impact on their implementa- tutions were created. The EU has also directly par- tion. Conditionality was only possible once Ukraine’s ticipated in anti-corruption reform implementation: major Western development partners, along with its delegates worked in commissions that selected strong civil society constituencies, understood the the heads of NABU and HACC, having contributed importance of rule of law reform. to the independence and higher professional quality of the selection results.64 It is also worth mentioning Second, a number of successful innovations to the the positive role of the Ukraine Support Group with- partners’ assistance approach have been intro- in the Group of Seven (G7), which has come up with a duced since 2014. These include the creation of a spe- number of political statements on reforms in Ukraine cial Support Group for Ukraine (SGUA) and of the and, less publicly, has met with various key actors in EU Advisory Mission for Civilian Security Sector Re- the reform process. With these, it has proved to be form under the CSDP track. The SGUA’s coordination an important promoter of reforms in Ukraine. and planning of assistance have focused on devel- oping an approach that embraces whole sectors. In contrast, assistance before 2014 consisted of a large number of individual projects.61 The SGUA has also helped the EU better coordinate its efforts with that of other international donors. In addition, a donor co- ordination platform led by the EU Delegation on the ground works toward avoiding overlaps and chan- neling broader development assistance efforts more effectively. Another innovation is the strategic focus on the re- form-oriented dimension of EU policies. Rule of law has received important attention in the new form 60 Anti-Corruption Action Center, “Map of Anticorruption Conditionality by AntAC”: Rule of Law Reform after Zelenskyi’s First Year ANALYSIS Recommendations dent judiciary for the disbursement of its loan pack- age referred to above. This seems to be the first time The remainder of President Zelenskyi’s term will be that the IMF has named the independence of the ju- primarily defined by how Ukraine responds to the diciary as one of the objectives that need to be ful- humanitarian and economic effects of the COVID-19 filled in relation to a financial support program.65 pandemic. Depending on the magnitude of conse- quences, there may be space for maintaining the Develop tools for objective performance course of reforms that Ukraine embarked on after 3. assessment the Revolution of Dignity, but this will likely be fur- While there are no predefined benchmarks for per- ther undermined by the fragmentation of Zelenskyi’s formance assessment in the rule of law area, the EU power and capacity to push legislation in the Rada. did develop several tools to assess its member states’ This space will also be defined by Russia’s goals to- performance in this field. The EU currently uses the wards its neighbor, the strength of the fight that fi- EU Justice Scoreboard for the regular assessment of nancial power groups within Ukraine are ready to the state of the judiciary in its member states, and it engage in to maintain their influence, the demand is currently working to develop the EU’s future Rule for reform that is building up inside the country it- of Law Mechanism. This mechanism is expected to self, and, last but not least, the pressure that the in- replace the EU Justice Scoreboard and the EU An- ternational community is ready to apply. ti-Corruption Report, which assesses the state of the fight against corruption. The question is wheth- International partners and donors are key players in er the EU could also apply the tools it uses for inter- terms of their ability to influence the course of re- nal assessment to countries like Ukraine. In 2018, the forms in Ukraine. The EU, in particular, has a unique Ukrainian government officially proposed that the ability to externally influence the domestic transfor- EU develop a new Agenda in the area of Freedom, mation of Ukraine that is based on its positive image Justice, and Security (issues covered in Title III of the and wide societal support for European integration. EU-Ukraine Association Agreement). Negotiations on To keep political elites engaged in rule of law re- the content of the draft proposal that Ukraine sub- form, as well as to discourage reversing the reforms mitted are still ongoing. Considering the interest of already undertaken, the international community Ukrainian authorities and in order to improve the ef- needs to take the following actions: fectiveness of EU assistance to reforms, as well as to identify priorities and benchmarks for providing fur- Prioritize rule of law reform ther assistance, the EU should use the same assess- 1. The EU has managed to actively drive anti-cor- ment tools to measure progress reform in Ukraine. ruption reform in Ukraine since 2014, but it has rath- er modestly supported the prioritization of reforms Tie assistance to implementation of the judiciary, prosecution, and law enforcement. 4. Implementation is where even the most ad- As a result, there was no substantial progress in re- vanced institutional reforms currently lag behind. In forming law enforcement agencies, particularly the addition, this is the phase where many reforms stall SBU, the landmark component of security sector re- altogether and no tangible results reach citizens. In- form. These institutions are equally important for a ternational partners should also tie their assistance successful fight against corruption and, consequent- to the implementation phase by granting longer pe- ly, require a complete overhaul. Together with other riods and more active guidance for implementa- international partners such as the IMF, the EU needs tion. This should include more detailed elaboration to prioritize reform of the judiciary and other rule of and specification of implementation benchmarks to law sectors mentioned in this analysis. help embed the adopted reforms and avoid simple box ticking. Moreover, it could define new directions Condition funding on rule of law performance for subsequent assistance based on the deficiencies 2. Rule of law reform priorities need to become identified during the reform assessment process. part of EU conditionality, for instance in future MFA programs that the EU negotiates with Ukraine, as Continue supporting successful reform tools well as part of conditionality for IMF funds. One step 5. So far, the “sandwich model” of reform, in in the right direction is the comment by the IMF’s which international partners work closely with civ- managing director on the importance of an indepen- il society experts and other reform-minded constit- 65 Mykhailo Zhernakov, “Judicial Reform in Ukraine: stalled, damaged, and abandoned,” DEJURE Foundation, March 16, 2019: ANALYSIS Rule of Law Reform after Zelenskyi’s First Year uencies in Ukraine to push for reform, has proven successful along with other innovative initiatives such as the Brussels-based SGUA. Moreover, political engagement and diplomatic pressure (through the EU Delegation in Kyiv) to promote coordinated mes- saging with reform minded-constituencies on the ground in Ukraine, as well as the further coordina- tion of assistance provided by Ukraine’s development partners, should be preserved and strengthened. The EU also needs to conduct a transparent and objective assessment of its assistance approach and the tools it already employs to encourage reform in a more ef- fective manner by redirecting funds to programs that work and making cuts to the programs and institu- tions that have little or no impact. Rauchstraße 17/18 10787 Berlin Tel. +49 30 2542311-0 [email protected] www.dgap.org @dgapev The German Council on Foreign Relations (DGAP) is committed to fostering impactful foreign and security policy on a German and European level that promotes democracy, peace, and the rule of law. It is nonpartisan and nonprofit. The opinions expressed in this publication are those of the author(s) and do not necessarily reflect the views of the German Council on Foreign Relations (DGAP). Publisher Deutsche Gesellschaft für Auswärtige Politik e.V. 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