Grigol Katamadze | The issue of establishing a Financial Investigation Service is the most urgent


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I am firmly convinced that, among a large number of legislative “anti-crisis” initiatives, there is one that needs to be addressed in the nearest future – the creation of a new single body that will investigate financial and economic crimes – the Financial Investigation Services,  and the authorities should not postpone this matter any longer.

I continue to publicly and consistently propose for almost 5 years the Concept of the Taxpayers Association of Ukraine, regarding the merging into the Financial Investigation Service of the Tax Police departments within the State Tax Service of Ukraine, of the Department of the State Service for Combating Economic Crime (DSSCEC) within the Ministry of Internal Affairs of Ukraine (MIU), of the Department of Counter-intelligence Defense of the Economy of the State (DCIDES) within the structure of the Security Service of Ukraine (SSU), between which the problems of attribution of competence arise, the duplication of powers occur, there is no personal liability for the “shadow” economy, for the abuse and causing damage, and also there is a lack of coordination of the interaction of financial control bodies.

It is my conviction by using of the financial monitoring capabilities of the Financial Investigation Service, moving from punitive to analytic and investigative functions with a clear definition of the main tasks and competencies of the newly created body, the government will be able to restore public trust in the state bodies which we have after twenty years of existence, in the tax police, dissatisfaction with the work of which is shown by the whole business environment.

Undoubtedly, the objective of the new sole body which will investigate financial and economic crimes, should be to ensure the financial security of the state by protecting public finances, both when filling the budget and when distributing the budget funds, carefully and laborious work with the systemic offences such as theft of budget funds, large-scale tax evasion, working to counter the money laundering of criminal funds, detecting and search for assets obtained from the economic crimes, which will eventually allow for the elimination of corruption in many areas, which is extremely relevant now.

The coronavirus pandemic is a very serious challenge for the whole world. It is no secret that the State Budget of Ukraine for 2020 does not have the financial resources to prevent the spread of coronavirus disease and overcome its consequences. In addition, all of us are already aware that due to quarantine the financial resources of the state are being depleted, the standard of living of the population is decreasing, and as opposed to it the level of “shadowing” and criminalization of the economy is increasing even more.

International experience has shown that the reduction of the number of the state bodies of the financial control and of the financial investigation bodies only increases their productivity and efficiency.

I want to emphasize that the authorities need to do everything right in order for the “epidemic” of pressure on business to finally come to an end, business must be protected from unjustified interference into its economic activities and from the criminal prosecution.

Under the present conditions, when in Ukraine due to the quarantine, 29% of companies have temporarily suspended their operations, whilst 6% have already completely closed their business, part of the business areas is left completely without an income, a third of business owners (mainly micro-), claim income drop by 90-100% since the beginning of the quarantine and have already fired up to 50% of staff, etc., according to Opendatabot, and we have only spent three weeks under the quarantine and it is unknown how much longer we will have to spend, as much, or maybe longer. Therefore, I am convinced that the state should now more significantly and decisively influence the financial processes, creating conditions for the development of economy and business, strictly control and inevitably “punish” participants of criminal financial schemes, etc.

For me and I’m sure for many Ukrainians, the situation with the “attempt” of the authorities to create a new single body that will investigate financial and economic crimes – the Financial Investigation Service – is a complete mystery. So, in the fall of 2019, a large group of MPs, think tanks and the Ukrainian business community, lawyers, economists, financiers, actively worked in working groups for 2.5 months, and there was very little left to pass the law on the creation of the FIS (Financial Investigation Service) – to vote for it in the Parliament, and for the President to sign the law and put it into force and start the process. Instead, the labour, time, energy of a huge number of people who worked on the bill and believed that we were really moving towards the creation of the modern State of rule of law, was sent to the “recycle” bin by a 17-page text of remarks from the main legal department of the Verkhovna Rada …

I draw the attention of the Government and of the people’s deputies to the inadmissibility of the reduction of the expenditures for the establishment of the Financial Investigation Service in the amount of 1.3 billion UAH, by seeking sources of formation of the Reserve Fund. The promises and efforts of both the previous and the present authorities to create a single body have not been fulfilled.

I am sure that the state of lawlessness could become our reality, if not worse.

Lastly, I would like to point out that the Taxpayers Association of Ukraine plans to further elaborate in its articles on the prospects of work of the future body to combat offences in the sphere of finances and economic crimes.

President of the UNGO TAU

Vice-President of the Taxpayers Association of Europe

Ambassador Extraordinary and Plenipotentiary Grigol Katamadze

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