Dirty Money: Export and Import
Last week the President issued a decree aimed at economic transparency in 2002-2004. This means the shadow sector still holds a major position on the Ukrainian market. It is for this reason that the Cabinet of Ministers was instructed to press Verkhovna Rada to pass the laws the President identifies as urgent and to promote the fulfillment of already approved measures. Among other things, the government should draft laws on the procedure of inspections and on the responsibility of enterprises for untrue information about their performance.
On the other hand, Ukraine can claim international recognition even today for the measures it is taking to reduce the shadow sector, which first of all includes combating money laundering. For instance, the international forum on criminal money laundering, held in London February 26 to March 2, decided to ask the Financial Action Task Force (FATF) to take Ukraine off the blacklist of countries that do not support international efforts to this end. What made it possible to pass this resolution was fulfillment by the Ukrainian government of the so-called 40 FATF recommendations aimed at curbing money laundering. Yet, according to Lieutenant General Sviatoslav Piskun, chief of Ukraine’s tax police investigative bureau, the main reason why Ukraine was struck off the list was the adoption by Verkhovna Rada of the law in conformity with European standards On Countering the Legalization of Criminal Incomes. Lt. Gen. Piskun says Ukrainian tax police prosecutors are now investigating 277 cases of legalizing 120 million illegally received hryvnias, with 53 cases having been sent to court. Gen. Piskun believes Ukraine has already done 60-70% of what is required to get off the blacklist.
It is difficult for us to judge the extent to which Mr. Piskun’s information is true. Yet, we think that now is the time when not only the government but also every citizen can make his own contribution to raising the image of Ukraine on the international arena and excluding it from all kinds of blacklists by way of voting for those who deserve it. Central Electoral Commission (CEC) Chairman Mykhailo Riabets revealed recently that the Tax Administration had detected untrue information in the incomes declarations of 647 candidates registered on party nationwide proportional representation lists. The gap between what is real and what was declared is from a few hundred to several hundred thousand hryvnias. Mr. Riabets recently reiterated that the CEC would consider the further destiny of the candidates who declared untrue information “taking into account all the circumstances.” In other words, there is no firm guarantee today that the CEC will be a reliable filter for shadow money on its way to the parliament, the more so that a still more bitter war of moneybags is going on in the territorial districts. Experts believe a victory in this kind of a district will cost, depending on where, from $100,000 to $500,000, while the expenditures of legal election funds should not exceed UAH 170,000 under the law. It thus becomes very easy to suggest that any future government will find it difficult to deal with a parliament composed, to a large extent, of people who were at variance with the law from the very start.
