Ukraine 2019

elections were conducted under a mixed electoral system with one half of the members of parliament chosen through proportional representation and the other half via single-candidate constituencies. Many observers have reported that the single-candidate contests were subject to much more irregularities and malpractices than the nationwide one, among them vote-buying, self-nominated candidates pretending to run under the brand of a party they did not represent[iii]. Still, the parliamentary elections of 2019 have shown a significant change in the traditional voting patterns in Ukraine, with many incumbents and locally well-known SMD candidates with a history of election victories losing to the largely unknown representatives of the “Servant of the People” party. The parliamentary election has thus resulted in a first single-party majority in the history of Ukraine, with the presidential “Servant of the People” party securing 254 of the total 450 seats. The traditional mixed electoral system has been criticized many times for its perceived susceptibility to manipulation and vote-buying. In July 2019 the parliament has adopted a new electoral code providing for open-list proportional representation at the future parliamentary elections. However in September 2019 the adopted legislation has been vetoed by the president which leaves the expected electoral reform in uncertainty.

of oligarch Ihor Kolomoisky due to the allegations of close ties between him and Zelensky. The validity of these claims, albeit supported by the overwhelmingly positive coverage of Volodymyr Zelensky and his “Servant of the People” party, remains to be tested. Despite the fact that the executive authority is shared between the President and the Prime Minister, President Zelensky and his administration enjoy significant influence over the executive and legislative branches. It was namely reported that many MPs of the ruling majority did not know the names of the government members they were going to appoint until shortly before the vote itself. The President has also not shied from openly setting the Cabinet’s agenda at it first session, seen giving assignments to the Prime Minister and the Cabinet members on camera. This makes the country’s political system akin to that of a presidential republic, even though it is stated otherwise in the Constitution. Corruption among public officials is widespread and remains one of the most serious problems in the Ukrainian society.

limited to the benevolent or neutral portrayal of some far-right or even neo-Nazi groups, that are often not referred to as such in the media. In August 2019 a Kyiv court has ordered a Ukrainian online media outlet Hromadske.TV to pay a fine to a far-right organization C14 and retract its earlier statement referring to C14 as a “neo-Nazi” group. This decision has sparked further concerns about the freedom of expression and the ability of the Ukrainian media to report on far-right violence.[i] Due to the conflict with Russia, most Russian TV channels are banned from broadcasting in Ukraine. Several Russian social media outlets and search engines have also been banned. After the transition of power in 2019 concerns have arisen about the relationship between the new presidential administration and the press, which has been often described as disrespectful and manipulative. Since the election of Volodymyr Zelensky to the presidency there has been a number of alarming signals which has led many to question the new administration’s openness to the media. Such incidents include, among other things, the claim of Andriy Bohdan, the influential chief of staff to the President, that the Head of State’s team “does not need journalists to talk to the people” and the behavior of the President’s press secretary Yuliia Mendel in regard to certain journalists which has been described as “rude” and “unethical”. However, President Volodymyr Zelensky’s 14-hour press conference in October 2019 that allowed the representatives of diverse media outlets to ask questions and get answers might be a sign of the President’s wish to mend his relationship with the media. Press freedom in the occupied parts of Donbas ranks low, with journalists facing severe violations of freedom of expression including censorship by the de-facto authorities.

the Supreme Court, as well as the quality of the qualification assessment procedure which was supposed to evaluate professionalism and integrity of sitting judges. The reform has, however, led to a successful creation of the new High Anti-Corruption Court which has officially started its work in September 2019. In October 2019 the Ukrainian Parliament has adopted the law aimed at fixing the flaws of the original reform of the judiciary of 2016. Nevertheless, it has become a subject of controversy, with some of its measures praised, others heavily criticized. Experts have mostly approved of the reboot of the High Qualification Commission of Judges with new members selected on a competitive basis and the creation of an Integrity and Ethics Commission under the High Council of Justice. The legal measure to decrease the number of the Supreme Court judges from 200 to 100 without a definitely outlined procedure and the subordination of the yet to be rebooted High Qualification Commission of Judges to the High Council of Justice have, however, come under criticism from the NGOs and the expert community. The ambassadors of Canada, the UK, Germany and the EU, have authored a joint appeal to the Chairman of the Ukrainian Parliament, urging the ruling majority to review the questionable articles of the law and inviting its members to discuss alternative solutions.  In September 2019, the Parliament has passed a law aimed at reforming the prosecution bodies in Ukraine. The Prosecutor General’s Office has since launched a large scale re-attestation campaign for the prosecutors who wished to continue their work in the future reformed prosecution system. The positions that would be left vacant after the completion of the attestation process are supposed to be filled by new employees through a selection procedure on a competitive basis. The law also provides for a substantial expansion of powers of the Prosecutor General, a position currently held by Ruslan Riaboshapka, for the interim period, which gives him personal responsibility for the outcome of the reform. 

completion of Ukraine’s new infrastructure aimed at battling high corruption. Shortly after, the Verkhovna Rada has passed amendments to the Law of Ukraine “On the High Anti-Corruption Court”, which narrows the specter of cases falling under the new Court’s jurisdiction, saving it from being overloaded and allowing it to start its operation smoothly.  Shortly after the newly elected Parliament started its work a few other anti-corruption initiatives have been adopted. One of them is a law which allows the National Anti-Corruption Bureau (NABU) to conduct wiretapping on its own without involvement of the Security Service Ukraine (SBU). The former reliance of the NABU on the SBU to intercept telecom networks has long been recognized as an impediment to the Bureau’s independence.  Another one is a “reboot” of the National Agency for Corruption Prevention (NACP), an agency the independence and effectiveness of which was questionable from the very beginning, with all of its members being dismissed and a temporary acting Head appointed by the government. The amendments the Parliament has passed in regard to the NACP pose both risks and opportunities, whereby much will depend on how the selection of new members is conducted.  

speech is being constantly violated in the Russian-controlled Crimea and the occupied parts of the Donbas. The Ukrainians are free to practice their religious beliefs. Tensions between members of the different Orthodox Churches of Ukraine that have increased since the beginning of the conflict in the Donbas have carried on after the Kyiv Patriarchy and the Autocephalous Church as well as some parishes of the Moscow Patriarchy have been unified in the new Orthodox Church of Ukraine. The unified Orthodox Church of Ukraine and the Ukrainian Orthodox Church of Moscow Patriarchy do not recognize the legitimacy of each other on the official level. Religious freedom is constantly violated in Crimea and the occupied parts of the Donbas. The Russian authorities that currently control Crimea and the de-facto authorities in the occupied parts of the Donbas continue to put pressure on the Orthodox Church of Ukraine and the Greek Catholic Church. There are reports that the de-facto authorities in the occupied parts of Donbas have also been persecuting members of the protestant church. The right to assembly is generally upheld in Ukraine and the government does not restrict it. Still, some public manifestations and rallies, such as pro-LGBT demonstrations, are subject to violence from non-state actors, often from the extreme right. The annual Kyiv Pride is well-protected by the police and usually goes without interruptions, although threats and attempts of physical violence remain. Independent journalists and civic activists, especially those who investigate and expose corruption remain vulnerable to physical violence. 

Minister Oleksiy Honcharuk has proposed to start a dialogue with the stakeholders to determine the modalities and details of how the new open agricultural land market would function. Up until now the privatization process has not been transparent and fair, and it remains to be seen whether or not the new privatization wave announced by President Volodymyr Zelensky and Minister of Economic Development Tymofiy Mylovanov will be carried out differently. Russian companies are banned from participating in the privatization process because of concerns over Russian influence in the country. In the occupied parts of the Donbas private enterprises have been “nationalized” by the de-facto authorities. The Index of Economic Freedom gives Ukraine a grade of 52.3 out of 100 in 2018, thereby falling under the category “mostly unfree”.

According to the Minister of Economic Development Tymofiy Mylovanov, government has already approved privatization of 800 state-owned companies. The privatization process has been slow and largely unfair, and it remains to be seen whether or not it would change under the new government. The top individual income tax rate is 20% while the top corporate tax rate is 18%. The overall tax burden is 33,1% of the total domestic income.

registry was established in the National Bank, which helped improve access to credit information. Apart from that, the time to import has been reduced due to the simplification of conformity certification requirements for auto parts. In April 2019 then-President Petro Poroshenko signed the new bankruptcy code into law, which is believed to ease resolving insolvency. The new government has also expressed its intention to continue its work to ease doing business in the country. One of the new regulations announced by the Cabinet of Ministers is the legalization of gambling. The draft law has already been prepared by the Cabinet and is yet to be voted on in the Parliament. The new Verkhovna Rada has already passed a number of measures which are thought to boost Ukraine’s next-year ranking in “Doing Business”, among them the introduction of a single account for paying taxes, the simplification of customs procedures and a law on increased protection of property rights. However, there have been setbacks too, as the Parliament adopted laws which strengthened the oversight of the tax office over private entrepreneurs, obliging most of them to either use a cash register or an app designed for the same purpose. Still, after these initiatives led some entrepreneurs to protest, President Volodymyr Zelensky initiated a two-year moratorium on the fiscal inspection of most individual entrepreneurs with the exception of the listed “high-risk” sectors.

of the investor countries belong to the European Union: the Netherlands, Germany, France, Austria, Luxembourg, the United Kingdom. Among the main factors that limit foreign investment in Ukraine are the ongoing military actions in Donbas, lack of trust towards the judicial system, lack of free circulation of land and inhibition of large privatization. The new Ukrainian government has so far publicly pledged to resolve some of these issues, namely to open the agricultural land market, conduct a large scale privatization and implement a new reform of the judiciary. Over the past five years the importance of the EU market for Ukraine’s trade has risen significantly. In 2018 the EU’s share in the structure of both exports and imports of goods in Ukraine amounted to 43%. The PrivatBank litigation remains one of the biggest threats to the Ukrainian economy. The stalling of talks on the new loan program between the International Monetary Fund and the Ukrainian government has been attributed to the IMF’s concerns over government’s commitment to transparency and independence of the banking sector. If Ukraine’s dispute with the PrivatBank’s former owners ends in the victory of the latter, it could seriously harm the country’s economy and would likely spell the end to the cooperation with the IMF.