Does Businesses Need an Anti-corruption Court in Ukraine?

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Human progress is neither automatic nor inevitable... Every step toward the goal of justice requires sacrifice, suffering, and struggle; the tireless exertions and passionate concern of dedicated individuals. Martin Luther King, Jr.

Corruption is a major problem in many of the worlds developing economies today. Ukraine is not exception. In such nations, corruption represents a regressive taxation that bears hard on the poor. It has a dampening effect on business development and it could result in the production of inferior goods as companies find ways to accommodate under-the-table payments. Finally, corruption is a dangerous threat to the legitimacy of governments.

Last 15 years Ukraine has had the biggest issues with corruption in the court system. That is why after Revolution of Dignity civil society, business and citizens started to demand to restart judicial system. In my view this reform is really the top priority. We understand, that we would not have foreign investments until investors know that if they face a problem they can come and get justice.

After 26 years of independence, Ukraine remains starved for foreign investment – attracting only $50 billion, far less than many others neighboring nations. All investors demand the rule of law to dominate in each sphere, especially in judicial. Unfortunately, many of them left Ukrainian market after they had a bad experience with Ukrainian courts and now they are waiting for the better times to come. This is why I strongly believe, when we have an independent Anti-corruption Court, Ukraine will get new financial boost through legal and transparent businesses growing both international and national ones. Business will know that in case of wrongdoing  there is an open, modern and professional court to handle a case based on facts and laws.  

The reform of court system is officially launched on September 30, 2016, the date when constitutional amendments and new law on courts and judges (voted in June 2016) became effective.

Among other constitutional changes, deputies voted for establishing a specialized anti-corruption court which has been  one of the main Organization for Economic Cooperation and Development (OECD) recommendations to combat corruption in Ukraine. Such court should have an exclusive jurisdiction over the cases investigated by the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-corruption Prosecutor’s Office (SAPO). Creating such judicial element has been called the final step to setting specialized anti-corruption agencies in Ukraine.

As on today there is a public debate if this court is at all needed. One sound argument suggests that all general courts should be anti-corruption courts not to create monopoly. The supportive one is that other developed countries do not have such a specialized court. In my view Ukraine has now a unique situation. As the case with NABU it is much easier and faster to build something new as opposed to change the entire old system. And since I consider NABU a rather successful example I believe that Anti-corruption Court can have the same if not higher success. This will set the right focus for anti-corruption judges. And due to transparency of court proceedings and court decision register we and entire international community will be able to witness the formation of Ukrainian precedents in this field. Since corruption is the number one disease for Ukraine it is worth trying in parallel to the overall court reform undergoing.

At the same time today blocking of establishing Anti-corruption Сourt is taking place. For example, Parliament cannot find votes for special law about these courts. Without such law government cannot to start the actual creation of Anti-corruption Court. The IMF has already included the adoption of the Law “On the Anti-corruption Court” in its requirements and without this Ukraine has a risk not to receive a new financial support for Ukrainian reform. It means that Ukraine needs to establish the Anti-corruption Court in Ukraine due to the inability of the courts to ensure convictions of corrupt officials and in order to overcome corruption in Ukraine.

Moreover, last month a big conflict occurred between political elites, the President Poroshenko and the experts regarding the model of anti-corruption courts. The President wanted to create an anti-corruption panel within the Supreme Court. As you may expect such approach would not provide sufficient comfort that the situation will actually change.  Experts and stakeholders persuaded  that the Anti-corruption Court shall be created via a transparent procedure with the help of foreigners to guarantee their independence and professionalism.  Adversely they viewed anti-corruption panels within Ukraine’s unreformed and politicized judiciary system as unlikely to be independent.

Now Ukrainians, international and local businesses await for the decision from the Parliament on the topic. Being an optimist I believe this to come out a success story for Ukraine enhancing the rule of law and granting each investor a strong protection of their business in Ukraine.