A Big Win for Reform in Kyiv

The Ukrainian parliament just passed Ukraine’s most consequential reform so far this year. It overhauls a law enforcement agency reportedly staffed with crooked tax police officers infamous for shaking down businesses on behalf of oligarchs and politicians. The final version of the legislation featured tight provisions to prevent loopholes, and came after a two-year reform drive of the bureau ended with two days of intense jockeying. Surprisingly, there is not a single story in the mainstream international press covering this important reboot of the Economic Security Bureau of Ukraine (ESBU).

The new law stipulates that a commission, half of which will be comprised of reputable international experts, will decide which ESBU employees to retain and who, after a competitive selection process, should become the bureau’s head. This reform should block the country’s most powerful political appointees—such as the head of the presidential office, Andrii Yermak, and his deputy, Oleh Tatarov—from retaining at the ESBU their own loyalists whom they can task with pressuring rivals.

Yermak tried to weaken the legislation by replacing the international experts with representatives of domestic “civil society”. This sounds good, but it could have meant capturing the commission through government-organized nongovernmental organizations (GONGOs). G7 ambassadors objected to this, but the government still plowed ahead with plans to vote on the watered-down bill. That ended when one of the strongest reform champions in the Ukrainian parliament, Yaroslav Zhelezniak, paused the legislative process and fired off signal flares to reform allies in civil society and diplomatic circles. US Ambassador Bridget Brink was the partner who insisted most firmly on getting ESBU reform done properly. Her hand was strengthened because the US State Department and USAID are making Kyiv deliver critical governance reforms on a quarterly basis—starting with ESBU reform in the second quarter of this year—before receiving budget support appropriated in the recently enacted US supplemental.

ESBU reform would not have been accomplished without the strong domestic ownership of the issue by Ukraine’s parliament, civil society, and business community. But it also needed tough conditionality and diplomatic pressure from the International Monetary Fund, the EU, and the United States. Remarkably, neither the brutal war nor domestic power concentration are stopping this coalition from pressing ahead with landmark governance reforms that will continue in the months ahead. In Washington, Congress should be proud that its supplemental aid appropriation is already producing dividends, and the Biden administration should continue empowering Ambassador Brink as a stalwart ally of reform in Kyiv.

The opinions expressed herein are those of the author and not necessarily those of GMF.