Ukraine: From the USSR to the EU (International Bar Association)

As the world reflects on Mikhail Gorbachev’s role in dissolving the Soviet Union, and Ukraine continues its fight for independence, Global Insight assesses the challenges the country and its leaders are facing to meet the requirements for EU accession.
Ukraine’s come a long way since claiming independence, as the Union of Soviet Satellite Republics abruptly fragmented in 1991. Mass protests, known as Euromaidan, were sparked in 2013 when the government suddenly decided not to sign the EU–Ukraine Association Agreement and instead pursue closer ties to Russia. The protests led to the ousting of President Viktor Yanukovych, kickstarting a national movement to tackle corruption head on.
Transparency International’s 2021 Corruption Perceptions Index ranked Ukraine 122nd out of 180 countries, making it the second most corrupt country in Europe – behind Russia of all countries at 136.
Ukraine filed its application for membership of the European Union only days after the Russian invasion. Less than four months later, on 23 June, the EU awarded Ukraine candidate status and urged the country to continue its roadmap to reform.
The people of Ukraine deserve that all the international community assist them as much as possible, not only in war against Russia, but also in the war against corruption’
Drago Kos
Chair, Organisation for Economic Co-operation and Development Working Group on Bribery
The enormity of the challenge ahead was thrown into sharp relief on 17 July by President Volodymyr Zelensky’s decision to fire the head of Ukraine’s security services (SBU), Ivan Bakanov, and the country’s prosecutor general, Iryna Venediktova, after it came to light that some members of their agencies had been collaborating with Russia.
The dismissals caused an international stir, particularly as Venediktova had garnered widespread praise for her role as a key driving force behind securing war crime prosecutions against Russian soldiers less than two months into the conflict.
However, Lana Sinichkina, a partner at Arzinger in Kyiv, believes the dismissals are primarily politically motivated. ‘Despite these statements about their responsibility, as far as I know there is no official investigation or prosecution at least into Ms Venediktova’, she says. By early August, Venediktova had already been put forward as Ukraine’s next ambassador to Switzerland – a move which Sinichkina suggests the former prosecutor general was far from being punished for any alleged activity. ‘She has already been proposed to this post in Switzerland, so I think it’s a lot of internal politics as regards to her dismissal’, she says.
Kostiantyn Likarchuk, a senior partner and Head of Avellum’s International Arbitration practice, says it’s unclear how the changes will affect the progress of the prosecutor general’s office in holding Russia to account. ‘From my perspective, it’s a political reshuffle and whether it makes a difference, I’m not certain’, says Likarchuk. ‘In any event, most of the important decisions are taken at the President’s office rather than at the general prosecutor’s office. This is how Ukrainian law enforcement operates. From my standpoint, it’s not going to change much.’
The day after the dismissals, President Zelensky appointed SBU deputy Vasyl Maliuk as Bakanov’s temporary replacement and Oleksiy Symonenko, the deputy prosecutor general under Venediktova, was promoted to acting prosecutor general. On 27 July, Andriy Kostin was appointed as Venediktova’s permanent successor.
The following day Kostin announced that Oleksandr Klymenko would be the new head of Ukraine’s Specialised Anti-Corruption Prosecutor’s Office (SAPO), which had been relying on an acting chief anti-corruption prosecutor since the previous incumbent resigned unexpectedly in August 2020, four months before the end of his five-year term.
SAPO was one of the three main anti-corruption pillars established in Ukraine in the wake of the Euromaidan revolution following pressure from international partners, including the EU and the International Monetary Fund.
While the National Anti-Corruption Bureau of Ukraine (NABU) carries out anti-corruption investigations, SAPO oversees all of its cases and carries out prosecutions in parallel with the General Prosecutor’s Office. The High Anti-Corruption Court (HACC) was established in 2018 to adjudicate both NABU and SAPO cases.
It’s been widely acknowledged that the lack of a permanent SAPO head has significantly hampered Ukraine’s capacity to fight corruption. In this sense, these latest appointments could reflect favourably on the country’s drive to tackle corruption during wartime, according to Vadim Medvedev, a partner in Avellum’s tax and litigation practices.
‘They’re a positive signal towards further improvement of the anti-corruption authorities and improvements in the system in general’, says Medvedev. ‘After a long time and a complicated process, Mr Klymenko was appointed as head of SAPO. He’s a former detective from NABU, so he has quite a strong experience of working on those cases on the investigation side and I understand he received quite positive feedback from foreign partners who were involved in the selection process. This was a strong message that anti-corruption prosecution will continue operating properly.’
Despite frustrations that emerged during the process, Kateryna Gupalo, Head of White-Collar Crime and Tax and Customs Litigation practices at Arzinger in Kyiv and Vice-Chair of the IBA Business Crime Committee, agrees these appointments bode well for the country’s capacity to fight corruption. ‘We had this long process and civil society, along with international partners, was pushing hard in respect of appointing the head of the SAPO’, she says. ‘Finally, we have a new SAPO head and this very important body for anti-corruption infrastructure is finally working properly. [Klymenko] is from our national anti-corruption bureau. Both NABU and SAPO used to have troubles with the government because it was trying to push on them, but they showed resilience and they showed themselves as independent players.’
Kostin and Klymenko’s appointments have attracted some controversy through. Kostin, a private practice lawyer turned lawmaker from Zelensky’s party and former head of the Legal Policy Committee of the Ukrainian Parliament – the Verkhovna Rada – was originally seen as one of the government’s preferred candidates for the top job at SAPO.
However, Kostin’s candidacy was vetoed by international members of the selection commission over concerns he lacked political independence. Klymenko, an experienced NABU detective who has led several high-profile probes, was favoured by Western experts for the role from December 2021, but his appointment was blocked by members of the panel who demanded he underwent a second background check.
Drago Kos, Chair of the Organisation for Economic Co-operation and Development Working Group on Bribery, was a member of the commission tasked with appointing the new SAPO head. ‘It was the worst experience in my life, not only in the sense of recruiting people for positions, but the worst ever project I’ve worked on with foreign countries’, he says. ‘First of all, it was so blatant that they were pushing for their candidate. When that candidate did not qualify, they were trying to not appoint the clear winner of the competition.’
By the time Russia had invaded Ukraine on 24 February, the prospect of a new SAPO head being appointed any time soon seemed increasingly remote. However, this didn’t stop the European Commission in June outlining anti-corruption efforts as one of the key conditions to securing Ukraine’s EU candidacy, including specific references to appointing a new SAPO head and NABU director. On 1 July, President Ursula von der Leyen called on the Rada to fill both vacancies ‘as soon as possible’. Just days later, ambassadors to the G7 Ambassadors’ Support Group, currently led by Germany, said appointing a new SAPO director was ‘critically important for strengthening Ukraine’s anti-corruption institutions’.
Kos says the whole mood surrounding the SAPO appointment process altered overnight. ‘This changed quickly after Ukraine got the chance to become the candidate for the European Union’, he says. ‘It was obvious that somebody told the representatives from Rada that they should stop obstructing the process and that we should appoint a winner. We did it very easily afterwards. But of course, something else happened before that, which didn’t make us very happy. Before the head of SAPO was appointed, the prosecutor general was fired for some strange excuse. Then the candidate who was kicked out of the [SAPO selection] process based on the integrity criteria is now the prosecutor general of Ukraine.’
The independence of SAPO, NABU and the HACC has been a specific requirement of international partners since their inception. The delays to the SAPO selection process have been deeply criticised by Ukrainian civil society, including Transparency International Ukraine and the Anti-Corruption Action Centre. SAPO told Global Insight that commenting on the selection process fell outside of its area of competence.
Kos is concerned about what the level of political interference in SAPO’s selection process could mean for Ukraine’s future. ‘The whole process was devastating for the image of Ukraine in the era of anti-corruption’, he says. ‘Loyalty to the country is not loyalty to individual politicians from the country – there’s a huge difference. If only the politicians would leave those institutions to do their job. They just have to remove their hands from most institutions and those institutions will start to perform. Some of them are performing already, but only in the cases which have no interest for politics.’
Wartime mode
As Ukraine’s military continues to fight war on the frontline, public institutions and businesses have had to adapt to the demands of wartime.
Irina Paliashvili, founder of the Washington-based RULG-Ukrainian Legal Group, says it is encouraging that all levels of Ukraine’s government have continued to function efficiently. ‘All institutions and civil servants are present in Ukraine and working full-time – the Verkhovna Rada, the President and Presidential Office, the Cabinet of Ministers, the local authorities, courts, law enforcement, the healthcare system and even in the occupied territories the Ukrainian authorities continue to function remotely’, she says. ‘The public’s needs are addressed, households have water, electricity, public transportation functioning and pensions are paid.’
Serhiy Derkach, Head of the Corruption Prevention and Detection Department at the National Agency on Corruption Prevention of Ukraine (NACP), says it’s been vital that public institutions continue to operate. ‘We see the military is doing its job, but the state administration should be running as well because without a strong state, everything can collapse’, he says.
Although Derkach estimates that less than ten per cent of his team have been mobilised in the war effort, he says it has had a profound impact on his team’s work. ‘We have a very huge analytical team which, before the war, began [concentrating] its work on asset declarations’, he says. ‘Yet since the war we had to put the verification of declarations on hold for a while. As of now, we use the capacity of this team to identify individuals in Russia and some internationally who are supporting the war in Ukraine, so they could be imposed with economic sanctions in Ukraine and G7 countries.’
Since the start of the war, the NACP has worked alongside the National Anti-Corruption Bureau and the Asset Recovery and Management Agency to identify and confiscate assets of those supporting Russian aggression in Ukraine. The agency has established a database of international sanctions lists. By July, it had identified more than 18,000 individuals and more than 4,000 companies that could potentially be sanctioned.
Tetyana Korotka, Ukraine’s Deputy Business Ombudsman, says war caused the Business Ombudsman Council (BOC) to pause its regular case management system in favour of a more flexible approach to cope with the hundreds of urgent requests flooding in from businesses across the country. ‘It was clear first of all that many businesses wanted to transfer to safer territories’, she says. ‘We helped with the local administrations in the western part of Ukraine to find new places and new staff there and sometimes to find new partners for the businesses because many commercial connections and logistics were destroyed because of the war.’
More than 50 per cent of the BOC’s staff continue to work in Kyiv, but many are still working remotely. The Buisiness Ombudsman Roman Waschuk coordinated establishment of the temporary office in Krakow, Poland, which opened on 7 April to help support Ukrainian businesses working in the EU. At the same time, Ms Korotka was in charge of another BOC representative office in Ivano-Frankisvk, Ukraine, helping businesses address war-related issues.  ‘We were working like an Olympics team helping businesses’, she says. ‘Step by step businesses continue their recovery, not on the highest scale that they did before, but many Ukrainians – mostly women with children – have not come back. The situation is very difficult, but fortunately it also opened up many opportunities for businesses and they’ve found a balance.’
However, Sinichkina says Ukraine’s anti-corruption efforts have come a long way. ‘Today, society itself in Ukraine is not tolerating corruption’, she says. ‘This is the main prerequisite for fighting corruption in any country, because if society is tolerant, then you can’t do anything. In Ukraine, it’s vice versa and it’s become shameful to be somehow connected to corruption. Now, of course, there are concerns about the level of anti-corruption enforcement. We have done a lot in comparison to ten years ago and the anti-corruption strategy is treated quite seriously in Ukraine.’
Kos, who is now working on helping NABU select its new director, says the issues he experienced during the SAPO selection process have only made him more determined to help Ukraine in its fight against corruption. ‘We need a good head of NABU too’, he says. ‘The worse things look like the more I’m willing to fight, so let’s get a good head of NABU. The people of Ukraine deserve that all the international community assist them as much as possible, not only in the war against Russia, but also in the war against corruption. I will continue to do that, frustrated or not, bitter or not. Retreat is not an option.’
A NABU spokesperson told Global Insight that the new director would be appointed by the Cabinet of Ministers following the outcome of a competitive selection process. ‘The Bureau expects such competition to be transparent and take place as soon as possible. Meanwhile, NABU continues to fight corruption.’
A united front
The SAPO selection process may have dented Ukraine’s reputation for fighting corruption, but there are strong indications that the country is putting on a united front to tackle these issues. ‘The appointment of the SAPO head was an important issue and it was disastrous that their selection lasted for several years’, says Serhiy Derkach, Head of the Corruption Prevention and Detection Department at the National Agency on Corruption Prevention of Ukraine (NACP), which was established in 2015 to address anti-corruption policy in Ukraine and provide oversight of public officials.
‘Fortunately, now we have the anti-corruption prosecutor’, says Derkach. ‘A large number of SAPO prosecutors are not prosecuting cases – they went to the frontline and are fighting in the military forces right now. We believe that now, as some of the hardest periods of war have passed, we can [take] some steps for returning them to their usual work, as there are no other people that can replace them in ensuring the proper justice for those who try to steal public funds despite the war.’
The appointment of the SAPO head was an important issue and it was disastrous that their selection lasted for several years’
Serhiy Derkach
Head, Corruption Prevention and Detection, National Agency on Corruption Prevention of Ukraine
The NACP plays a vital role in assessing corruption risks, proposing mitigation actions and pushing public institutions to enact them. As well as scrutinising laws passing through the Rada, the agency has been tasked with preparing the National Anti-Corruption Programme, which sets out specific activities and key performance indicators for each government body to implement as part of the government’s National Anti-Corruption Strategy until 2025.
Holding public officials to account, analysing political party reporting and identifying potential conflicts of interests is another key part of the NACP’s mandate. Since 2020, the agency has identified violations in the reporting of three out of five political parties represented in the Rada – a significant finding given that all parties receive money from the state budget.
Prior to the war, Derkach and his team were responsible for managing the country’s online, publicly accessible asset declarations register, which was widely considered one of the cornerstones of Ukraine’s recent anti-corruption reforms. Providing false declarations was punishable by penalties and even imprisonment in the most serious of cases.
Reporting has continued since the invasion but is no longer mandatory. For security reasons, any reporting that is submitted is no longer published on government websites or made accessible to the public.
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European lawmakers and Ukrainian representatives unfurl a 30-metre-long Ukrainian flag outside the EU Parliament, on the day leaders met to discuss giving Ukraine candidate status to join the European Union, Brussels, Belgium, 23 June 2022. REUTERS/Yves Herman
These changes have raised some concerns among civil society groups, says Medvedev. ‘Ukrainian and international NGOs proved an important role in reviewing different appointments and activities for the different public servants’, he says. ‘They have less ability to do that now without being able to access up-to-date information regarding the financial position of these people. But on the balance of the need to protect the country during the massive invasion and public interest in ensuring the integrity and proper conduct of public servants, I would say that it is reasonable to restrict this information for now.’
Despite the war, many, including Derkach, believe the announcement of Ukraine’s EU candidacy has served to highlight the need for greater scrutiny of Ukrainian public officials. ‘We believe that now it is time to restore the verification of public officials’ declarations, as it is the right thing to do on Ukraine’s path to full EU membership’, he says.
Medvedev says the war has emphasised the significant challenges of public data management and the use of personal data facing Ukraine. ‘It will be interesting [to see] what decision Ukraine will have to take after the war, because many of the information systems in Ukraine rely on administration of various domestic aspects proved to be a huge source of intelligence for Russia’, he says. ‘Probably Ukraine will have to rethink the way it collects information regarding individuals and businesses because the Russian threat is not likely to go away completely.’
Rebuilding Ukraine
As Ukraine expects to receive billions of pounds in international aid to help its post-war recovery, there are widespread concerns as to how the country will navigate the corruption risks associated with the reconstruction process. ‘Clearly research shows that countries where there is a high level of corruption and where there is a lack of political will to fight corruption, if you pour the money into such countries, corruption will simply explode’, says Kos. ‘This will not just be an explosion of a small bomb, this will be a nuclear explosion, because so much money will get into the country. We need to be careful in designing the reconstruction process in a way that fighting corruption and fraud and waste and abuse is equally as important as effectively and efficiently rebuilding the country.’
There’s the Russian Federation and a Russian world on the one side and the European Union with a high wall for us [to climb] from the other side’.
Tetyana Korotka
Deputy Business Ombudsman, Ukraine
The huge array of corruption risks – from the transportation of humanitarian aid to taxation and distribution – is staggering. As Ukraine continues to fight war on the frontline, the country is grappling with how to manage both international donations and money from the state budget in a transparent and methodical way. ‘Especially for the huge amount of money, which is coming from international donors, there might be reconstruction funds created under the EU and the US and other countries,’ says Derkach. ‘So there’s also significant corruption risk there because there are no specific policies in Ukraine to ensure all the procedures will be transparent and accountable. Our role is look at all these procedures and to make sure that everything is set in the right direction and then do monitoring in the area.’
In April, the government established a National Council for Recovery of Ukraine to put together a comprehensive reconstruction plan for different parts of the economy and to support and compensate those who have lost homes, businesses and livelihoods. The plan, which the government estimates could cost up to $750bn, was discussed in July with international partners during the Ukraine Recovery Conference (URC2022) held in Lugano, Switzerland.
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Tetyana Korotka, Ukraine’s Deputy Business Ombudsman, attended the URC2022 and says the plan was a major talking point, but warns there are still many areas that require clarification. What was apparent, she stresses, was the solidarity shown by the international community to help get Ukraine back on the road to recovery. ‘In Lugano, after all those awful months it was absolutely clear how much international society supports Ukraine.’
As with many countries, corruption has eroded public trust in state institutions in Ukraine. However, Korotka says there’s also an important role for businesses to play in mitigating potential opportunities for corruption as the country embarks upon its recovery plan. ‘The presentation of the Ukraine Recovery Plan is of great interest to different stakeholders’, she says. ‘However, some questions about the details of further activities and stakeholders’ coordination remain to be answered in the future. It is very important to provide proper stakeholders coordination and prevent abuse during the plan’s implementation phase. The Business Ombudsman Council is one of the bodies that can contribute to the architecture of recovery.’
Derkach says it’s vital the recovery process is managed properly. ‘It’s not only to reconstruct, it’s to build better’, he says. ‘It is going to encompass not only plans for the recovery and what we lost, but for reforms as well.’
He says further work does need to be done though, particularly in the areas of damage and loss assessment of assets, where currently there is no established methodology. ‘Even if a building wasn’t damaged fully, if it’s reported that it’s fully damaged the municipality receives the money for the reconstruction and uses it in its own way and that can lead to corruption risks with the public procurement’, he says. ‘Or take the example of a factory that has never been working before the war – now it is suddenly claimed to be damaged because of the war and, thus, to be reconstructed.’
Reputation and reform
Beyond the war, Derkach says now is a key time for the country to assess anti-corruption efforts and secure its future. ‘Now, what we are trying to do is stocktaking and to look at the system that was set in 2015: how it works, what doesn’t work and how we can enhance it so that far a greater number of entities follow the path of transparency and accountability and their officials set good tone at the top’, he says.
Prior to working at the NACP, Derkach worked as a project manager at the EU Anti-Corruption Initiative, the EU’s largest programme to support the fight against corruption in Ukraine. He says Ukraine’s recent reforms are a strong sign of what is to come. ‘I’ve visited lots of anti-corruption institutions and […] can say that the agencies in Ukraine provide really good examples of very comprehensive legislation in some sectors and very good IT tools, such as the asset declaration register’, he says. ‘We are also creating [a] unique whistleblowing portal where every citizen in Ukraine will be able to report corruption in a fast and efficient way.’
As Ukraine’s EU candidacy hinges on anti-corruption reforms, Gupalo says the country will have to work even harder to shake off the negative reputation. ‘Unfortunately, one of the messages that has been very widespread is about Ukraine being a failed state and very corrupt state’, she says. ‘To break through this image, we need to invest a lot of time and efforts in anti-corruption issues to show that we are willing to deal with it and we are willing to fight corruption.’
We need to improve the quality of judges and of the judiciary and need to replace around 80 per cent of judges. That’s a huge challenge, especially during wartime’
Kostiantyn Likarchuk
Senior partner and Head, Avellum’s International Arbitration Practice
Irina Paliashvili, founder of the Washington-based RULG-Ukrainian Legal Group, sits on the IBA’s Section on Public and Professional Interest Council and Senior Lawyers’ Committee Advisory Boards. She says Ukraine has already made great strides. ‘The falsehood of this narrative and the strength of Ukraine’s democratic institutions and anti-corruption efforts became more than evident since the beginning of the full-scale war Russia waged against Ukraine more than six months ago.’
Both Gupalo and Paliashvili are members of a new task force established by the IBA Anti-Corruption Committee which will focus on anti-corruption efforts in Ukraine. Paliashvili says international support will be crucial for Ukraine’s reform. ‘Ukraine has much more work to do on the anti-corruption front, and Ukrainian civil society, legal and business communities and media do not refrain from sharp criticism and demands to do more’, she says. ‘To this end the advice of the international legal community, such as the Ukraine Task Force of the International Bar Association’s Anti-Corruption Committee, donors, international finance institutions and non-governmental organisations, continue to play a most valuable role.’
Likarchuk says many of the much-needed reforms – such as eradicating judicial corruption – will not happen overnight and require both time and investment. ‘On the one hand, we have thousands, maybe millions of people fighting Russia on the frontline and millions trying to do something to help support the Ukrainian economy, but we also have judges who are dragging us behind’, he says. ‘Unfortunately, it will take a lot of time and effort to have this system cleaned up. We need to improve the quality of judges and of the judiciary and need to replace around 80 per cent of judges. That’s a huge challenge, especially during wartime.’
At the time of the invasion, Ukraine was on the cusp of finalising plans for widespread judicial reforms. As the war continues, it’s unclear how or when such reforms can and will be implemented. However, two recent appointments of Roman Maselko – a well-known anti-corruption crusader – and lawyer and academic Mykola Moroz to the High Council of Justice (HCJ) – which appoints, dismisses and disciplines judges – provides considerable grounds for optimism, says Medvedev. ‘We do hope that they will also influence the process and influence the workings of the HCJ in terms of how they look into cases’, he says.
As Ukraine faces an uncertain future, Korotka says the country’s approval as an EU candidate will motivate the country to keep pushing for even more reforms. ‘We are not naive people, that tomorrow we will be a member of the European Union and we should stop doing reforms or developing our society – of course not’, she says. ‘But this is a clear signal that international society accepts us as part of their family. You can’t imagine how difficult it is to live and to continue the reforms while being between two worlds. You see there is the Russian Federation and a Russian world on the one side and the European Union with a high wall for us [to climb] from the other side. We have definitely demonstrated that we would like to change society. We would like to be respected members of international society and we are able to be good neighbours.’
IBA task force to help Ukraine build back better
As Ukraine’s military continues to fight war on the frontline, public institutions and businesses have had to adapt to the demands of wartime.
As thoughts start to turn to rebuilding Ukraine’s economy and society after the conflict, the IBA Anti-Corruption Committee has established a new task force to support the country in its efforts. The concept emerged during discussions about the anti-corruption challenges facing Ukraine’s post-war reconstruction during the Committee’s conference in Paris in June.
Leopoldo Pagotto, Chair of the IBA Anti-Corruption Committee, hopes the initiative will help Ukraine as it takes on this unenviable challenge. ‘Every assistance is more than welcome as the preliminary assessment showed that there is a great deal of work to be done’, he says. ‘We are looking forward to partnering with other organisations focused on developing projects in anti-corruption in Ukraine to help the nation to build back better.’
The task force will provide support and online training on areas including anti-corruption, whistleblowing, responsible business conduct, conflicts of interest, risk assessments, compliance programmes and capacity building. Serhiy Derkach, Head of Corruption Prevention and Detection Department at the National Agency on Corruption Prevention of Ukraine, says such support will be vital at this critical time. ‘We highly appreciate the IBA initiative to create the task force to support Ukraine in its endeavours to dispel corruption’, he says.
The initiative quickly secured the support of the IBA leadership, says Peter Bartlett, Chair of the IBA Legal Practice Division. ‘I am very pleased to have the strong support of the IBA leadership for the task force and for pressing on with laying the groundwork for the plan sooner rather than later.’
By Ruth Green, IBA Multimedia Journalist
Read the original publication at the link.