Reforms in Ukraine.

17 ноября 2014, 22:52

The collapse of the state system may result in the loss of statehood as such. What we are now observing in several regions.

It is not only and not just the consequence of Russian presence as in fact these regions had already been in the process of disintegration. Despite the existence of several oligarh clans in conflict-affected Eastern regions, in general, this part of Ukraine remained depressive. Hence the distrust for central Government, supported by the same oligarchs that build themselves "fiefdom." From this came initial greeting of Russian support. And then it was too late.

Therefore it is very important not to forget that important reforms must take place. It is necessary to regain the trust of the population to new political elite. In fact, Ukrainian population must now unite around the new Government. And for that the members of Government it is crucial to prove that they take care not about themself, but about citizens of Ukraine. 

And reforms do not even have to be that associated with military situation to prove that changes are imminent. In Georgia, for example, when there was an open military conflict in South Ossetia, roads were being built nearby.

However Ukraine today needs not only reforms, but Reformers, and they, unfortunately, are virtually non-existant. The so-called «Reanimatory package of reforms» which was advertised in the past six months is nothing more than a profanation. Where is the actual lustration, despite the adoption of the relevant law? And why this law was needed in the first place when ther are law enforcement agencies operating in the State? Where is fighting corruption? Surprisingly, in corrupt countries even the process of tackling corruption is effected by corruption. The main ainm of those participating is to create the appearance of activity, satisfy donors demands, while not breaking the system, earning gratitude of "not disturbed" officials. And those who are drafting reforms often do not even have professional education, let alone required practical experience.

In previous publications I already mentioned that in order to break obsolete, non-European system, Ukraine requires professionals who have relevant experience in European and other developed jurisdictions.  And who, in fact, accustomed for the European system. Of course we have enough foreign advisors in Ukraine. For example there is a European project of support for reforms: its advisors (European judges, prosecutors) cooperate with our public authorities. There are also many professionally suitable experts in our own State, who understand how transfer advices of foreign consultants onto our legislative realities. But the paradox is that when their work comes to the "top" in the form of the Presidential Administration and Cabinet of Ministers it is where it ends.

 Because none of these professionals have access to the «right cabinets».  And those who enter there - come as a "friends" and "business partners". And these people do not require any reforms. This is the downside of corrupt system. They do not even understand them. And so it turns out that only those who have corrupt connections succeed. And instead of adopting so much required new legislation, our law drafting becomes a source of income for receivers of donors aid, which they share with their «contacts» in the Government. This is exactly what I saw in practice, while working in the Presidential Administration.

But reforms are needed and needed urgently. Leading specialist of the European project I referred to, former German judge Klaus Honer, keeps reminding that it is crucial to develp reforms which will become immediately noticeable to the population: the police and traffic police reforms. Ukraie does not need separate traffic police. Officers can simultaneously serve as patrol and ensure order on the streets and roads. That will reduce staff and budgetary costs by half.  There is also no need to centrally distribute funds and establish how many people should patroll the streets. This has to be decided locally, by local authorities, depending on the situation on the streets. 

Also there is no need to spend time in person in the Traffic police offices for registration and re-registration of vehicles in case of sale and purchase. In most countries buying a car, insuring it, and selling can be done via Internet.This saves paper, employees, expenses, and, finally, time.

And this is elementary. The ABC, which is known throughout the world. On the other hand in Ukraine father of the Deputy Minister of the Cabinet of Ministers Parakuda earns, as I know, millions, only by issuing unnecessary certificates for imported cars. Such certificates are needed only once - during the import clearance. But in principle, they are not necessary at all. Imported cars are always imported with relevant documentation. So, what Mr Parakuda's company is doing, issuing «certificate on the certificate», is in fact, his «allowance», granted to him by the Government.

The same with courts. There are many world known practices we can adopt. Former judge of the Supreme Court of Ukraine, who won European litigation against Ukraine, Alexander Volkov said that if given the opportunity, he will have judicial reform done in two months. Again what prevents us to simply adopt some Western practices? Each day, hundreds of thousands of people suffer in Ukrainian courts from unjust judgments and sometimes simple rudeness of judges assistants. At the same countries judges of the local courts, adjudicating small claim litigations, are being elected by local community. And are obliged to live within this community. The logic is simple: the same judge then must go to the market, local stores and meet those whose cases he (she) adjucticated. And if his decision was unjust, then it will at least uncomfortable, right? In addition if his (hers) reputation is effected, such judge  simply will not be reelected.

Another minor but important thing: in Ukraine, when hidden agreement  with the judge to issue certain judgement is reached, the electronic version of required document is being quietly transferred to him. However in most jurisdictions it is a normal practice. Each side has to submit to the court electronic version of the Order or Judgment required. This again saves time for judge and his assistant as well as public ( taxpayers) money.

At the level of medium and large businesses - other balancing factors such as commercial arbitration, are in place. When ineacj party has to appoint the arbitrator from a big number of relevant legal professionals, or sometime specialists of the certain market (sugar, oil etc.).  And to predict in advance who will select which arbitrator is unrealistic. And arbitrators are interested in their further appointments as they work on the commercial basis so they are likely to adjuticate the case properly.  

This could partially solve the problem of unfair judgements and hostile takeovers with the help of Ukrainian commercial courts which became synonimus of corruption. That will also  give the opportunity to reduce the number of judges and to divide the allocated budget between the ones remained, thus increasing their salaries and making them afraid of loosing their positions.  

There were numerous attempts in Ukraine to set up arbitration and mediation institutions. But one important point was always missing. Decisions of such arbitration were not supposed to be executed in the same manner as of the state courts, thus making businesses to avoid non state adjudication. 

With regard to the execution of judgments, in Ukraine the important principle of certainty of justice is far from being observed. Just the way round, the mechanism of creating a vicious circle, when the same judgment is being revised again and again thus delaying the execution, is usual. In developed countries there is a ban for so-called "capricious" appeals without sufficient grounds. And for the failure to comply with judgment serious responsibility in the form of contempt of court is established. In England it could be a substantial fine and imprisonment for up to two years.

In Ukraine, due to lack of ability to quickly obtain a final judgment and execute it, for example, to collect the debt, debt collection firms are thriving, which in fact is illegal. Because enforcement to fulfill civil liabilities is a criminal offence under the Ukrainian law. 

Of course it is unwise to blindly follow the advice of foreign experts, which is also mistake of our reformers. Because foreign experts are often not prepared to fully perceive Ukrainian reality and legal system. For example one of the European Bank for Reconstruction and Development experts, tried to convince me that establishing the Registry of property and income of State officials, will resolve the problem of conflict of interest. The question "why?" was answered close to this: for example if the Minister of Transport in Ukraine owns shares of the International Airlines of Ukraine, when he makes a decision concerning the interests of this company it is clear that there is a conflict of interest. It is logical of course. But not true when it comes to Ukraine.  

Because in our reality it happens this way: for example there was Minister of Ecology Zlochevskiy. His company was constantly winning tenders for the elimination of chemical waste. Only companies were registered in Cyprus and his beneficial entitlement was hidden from Ukrainian authorities.  So just establishment of a Registry without an effective mechanism of disclosure of the beneficial ownership will not give anything. And even when the law on beneficial ownership was adopted in Ukraine, it did not provide any obligation and/or mechanism for the  State to check whether information supplied is true. And no serious responsibility for non disclosure was established. 

Therefore,  while taking advice from foreign experts, we still have to consider our own realities.

Examples of necessary reforms can endless. Most importantly, that all of these changes would have as a consequence something Ukraine needs so much: reducing corruption and ensuring budget savings. Because tackling corruption does not mean to create another state agency to fight corruption. In corrupt state it does not matter how many state bodies are functioning. None of them function properly. In fight against corruption, the main thing is to change the system and rules. That will bring trust for the new government which is crucial in current situation in Ukraine.

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