On 22 March 2021, the President of Ukraine signed Law No. 1150-ІХ “On Bureau of Economic Security” following its passage in parliament in January.
This Law establishes the Bureau of Economic Security as the central body of executive power authorised to fight economic crimes. The main tasks of the Bureau, which will be created over the six months, are prevention, detection, termination, investigation and disclosure of criminal offenses against functioning of the state economy under its jurisdiction.
The Cabinet of Ministers shall direct and coordinate the Bureau’s activities.
By adopting this law, the Ukrainian government intends to achieve the following:
- introduce new analytical approaches to counteract financial crimes and conduct effective investigations of complex criminal schemes;
- minimise budget losses by preventing financial crimes and minimising unfair competition;
- optimise the structure of law enforcement agencies as well as their material and technical base.
The Law provides a detailed list of tasks for the Bureau, which includes:
- identification of risk areas in the economy, assessment of risks and development of ways to minimise and eliminate them;
- ensuring the economic security of the state by preventing, detecting, suspending and investigating criminal offenses against functioning of the economy;
- detection and investigation of offences related to the receipt and use of international technical assistance;
- collecting and analysing information on offences against the proper functioning of the state economy and making proposals for amending state regulations.
In accordance to the tasks assigned to it, the Bureau will be entitled to collect, process and analyse information on criminal offences; to carry out operational and investigative activities; to search for persons who are hiding from state authorities or evading a criminal sentence for committing economic crimes; to conduct administrative proceedings; and to decide on the application of administrative penalties in instances specified by law.
The Bureau can interact with state authorities, local self-governmental bodies, enterprises, institutions and organisations and request information necessary to perform the its functions. The Bureau will also have other powers provided by the laws of Ukraine.
In a nutshell, the Bureau will exercise authority that was previously enjoyed by the tax police and the State Security Service and will be the only state body to deal with economic crimes.
The Bureau is to be led by a director, appointed by the Cabinet of Ministers and based on the results of an open competition. The selection commission will consist of three members from the National Security and Defence Council, parliament and the Cabinet of Ministers. As a result of the open competition, there will be three winners. The Prime Minister will select the director and submit this candidate's name to the Cabinet of Ministers for final approval.
The Director of the Bureau will serve a five-year term. The same person may not hold this position for more than two consecutive terms.
The Law was published on 24 March 2021 and entered into force the next day. The Bureau must commence operations no later than six months after the Law entered into force.
For more information on this Bureau, contact your CMS client partner or local CMS experts: Anna Pogrebna, Oleksandr Protsiuk, Olga Shenk, Roman Hryshyn-Hryshchuk.
Legislation:
Law “On Bureau of Economic Security” No. 1150-ІХ (in Ukrainian).
