The Verkhovna Rada of Ukraine has adopted in the second reading and in general the bill #5599 on de-oligarchization. 279 MPs supported the decision.
You can watch the broadcasting of the plenary meeting HERE.
It is noted that " this law is aimed at overcoming the conflict of interest caused by the merger of politicians, media and big business, ensuring Ukraine's national security in economic, political and information spheres, protecting democracy, ensuring state sovereignty and avoiding manipulation of citizens with intentionally distorted information in order to gain access to resources owned by the Ukrainian people."
Who and how will define oligarch?
According to the document, the decision to recognize a person as an oligarch will be made by the National Security and Defense Council based on a proposal of the Cabinet of Ministers, a member of the Defense Council, National Bank (NBU), Security Service (SBU) or the Antimonopoly Committee.
However, in the second reading, the responsibility is added to summon potential oligarchs to the NSDC meeting, and NSDC members to argue why they consider a person to be the oligarch and consider the objections of the oligarchs.
The NSDC Apparatus, in 10 working days before the meeting, at which it is planned to consider the submission on the recognition of a particular person as an oligarch, sends at his registration place, the message about such meeting, in which the signs are explained, according to which, the mentioned is being solved toward him/her and publishes it on its official website.
A person, who received such a message or is familiarized with it on the official website of the NSDC, has a right to personally file written explanations and other documents on this case not later than five days before the meeting. On the appeal of a person and on the basis of the proper NSDC decision, his/her explanation can be listened to at the meeting.
If a person did not receive the notification, non-provision by him/her of personal written explanations or other documents, refusal of hearing of his personal explanations at the meeting or nonappearance for such meeting, including viable reason, is not the ground for postponing or no consideration by the NSDC of the submission on the recognition him/her as an oligarch.
Who can be an oligarch in Ukraine?
A person is recognized as an oligarch and put on the register of people who have significant economic or political capital in the social life (oligarchs).
To be recognized as an oligarch, a person should meet three out of four criteria:
- participate in the political life;
- have a significant influence on mass media;
- be an ultimate beneficial owner of the monopoly;
- have confirmed the price of assets that exceeds a million of the minimum wage (2 billion 270 million hryvnias or $83.29 million).
The influence on mass media means being a beneficial owner and/or controller of mass media. Or if a person sells such media to a person who does not have “an impeccable business reputation” after the adoption of the law and it's coming into force.
The calculation of the value of assets is held accumulatively on the number of assets of a person or economic entities, where the person is the beneficial owner. During the calculation of the value of such assets, the assets owned by a person in mass media are not included.
And "participation in political life" means being in the office of the president of Ukraine, Chairman of the Verkhovna Rada, First Deputy and Deputy Chairman of the Verkhovna Rada, parliamentarian, Prime Minister, First Vice-Prime Minister, Vice-Prime Minister, Minister, his/her First Deputy and Deputy, etc.; having a position in the leading bodies of a political party; or financing a political party, political agitation or holding rallies or demonstrations with political demands.
Moreover, for the second reading, the point is added that one of the signs of “participation in the political life” is the payment of money, performance of activities, provision of goods or services in favor of partakers of political agitation, protests, or rallies with political demands or members of their families. In fact, almost every citizen can fall under such criteria.
You are recognized as an oligarch. What will be next?
After this, the official website of the National Security and Defense Council of Ukraine provides open 24/7 access to the register with the possibility of view, copy, and printing of the information, as well as in the form of the set of data (electronic document) organized in the form that allows automatic procession by electronic means for repeated use.
People who are put in the register of oligarchs are forbidden:
- to pay contributions (directly or indirectly through other people) to support political parties in accordance with the Law of Ukraine On political parties in Ukraine;
- to be a purchaser (beneficiary of a purchaser) in the process of privatization of objects of big privatization;
- as well as to finance any political agitation, holding of protests or rallies with political demands or slogans (change for the second reading).
The oligarchs will be obliged to file a declaration of a person authorized for performing functions of state or local self-government (in the order established by the law on prevention of corruption).
For the second reading, the paragraph was added that the register of the oligarch will also contain information about the legal persons, whose beneficiary owner is the oligarch, as well as people and parties financed by the oligarchs.
Exclusions from the register of oligarchs
The decision to exclude from the register is made in case of the establishment of the fact of absence of at least two criteria provided by the law. The person must submit to the National Security and Defense Council an application and documents confirming the absence of such criteria.
The sign of the significant influence on mass media is not considered absent in case if the status of the beneficial owner (controller) of a proper mass media was handed from a person included in the register to the person tied with him/her or a person who does not have “an impeccable business reputation”.
An impeccable business reputation means the presence of criminal history on record; sanctions introduced by Ukraine and other states (except Russia) or interstate unions, or organizations; inclusion of a person to the list of people tied with the execution of terrorist activity; deprivation of a person of the right to occupy particular positions according to the indictment; improper holding of duties on payment of tax, fees and other obligatory payments, if the total sum equals or exceeds 100 minimal month wages; purchase of mass media on significantly lower marker price for money, which source is not confirmed documental; significant and/or systematic violations of the demand of legislation on mass media, banking, financial, currency, taxation legislation, legislation on financial monitoring, legislation on securities, stock companies, and share market.
Declaration on contacts
In case of contact of an official with a person, included in the register, or his/her representative, such official is obliged to file a declaration on contact. Contact means meeting and talk (including online) of any content.
Bill also contains a list of officials, who will be obliged to file declarations on contacts in case of contact with an oligarch or his/her representative. Such duty will be provided to:
- president, chair of parliament, first vice speaker and vice speaker; MPs, PM, all members of government and their deputies, SBU Head and his deputies, prosecutor general and his deputies, the National Bank head and his deputies;
- judges of the Constitutional court, judges;
- heads of permanently working subsidiary bodies created by the president and their deputies;
- chair and members of the National Council on TV and Radio Broadcasting, Anti-Monopoly Committee, Accounts Chamber, Central Election Commission, other state collegiate bodies, chair and members of the Highest Council of Justice;
- NSDC Secretary and his deputies;
- chair and deputies of the State Committee of TV and Radio Broadcasting of Ukraine, State Property Fund, National Agency on Corruption Prevention, National Anti-Corruption Bureau of Ukraine, State Bureau of Investigations, Financial Investigations Service;
- commissioner of the Ukrainian parliament on human rights;
- officials who occupy positions of category A (category B was added for the second reading);
- heads of local state administrations, their first deputies and deputies;
- military men of the Armed Forces of Ukraine and other military formations with top of grade;
- persons from the senior officers of the law enforcement bodies and employees of other bodies who have top of grade;
- foster servants of the President’s Office, the Verkhovna Rada of Ukraine (including assistants of MPs) (second reading);
- heads of the state enterprises and heads of enterprises where the state is the majority stakeholder (second reading).
The declaration of contacts will have to be submitted through the Security and Defense Council website no later than the next day after the meeting, indicating the date and place of the meeting and a summary of the conversation. Failure to submit a declaration will entail political and/or disciplinary liability.
The declaration of contacts is not to be submitted if the conversation took place during a broadcasted official event, court hearing, an official event initiated by public authorities, information about which is published on the official website of the relevant government body.
If the Chairman of the Anti-Monopoly Committee (AMCU), state representatives of the AMCU, Chairman and Deputy Chairmen of the State Property Fund of Ukraine, the Prosecutor General and his deputies fail to submit or do not submit a declaration of contact with the oligarch on time, they may be dismissed (amendments in the second reading).
What are other amendments in the second reading?
A new party is added - a representative of the oligarch. It is a person who holds meetings (conversations) with public officials on behalf of and/or in the interests of the oligarch. But, apart from the definition, there are no other references to it in the law.
This law comes into force from the day following the day of its publication, and takes effect six months from the date of its entry into force. However, it expires after 10 years after it took effect.
Declarations of contacts with oligarchs will be submitted from the date the law comes into force, but within 14 days after it takes effect.