The head of the BES has no information about the fight against smuggling and is unable to make any managerial decisions about it
The large number of agencies and sometimes overlapping powers caused justified business complaints. That is why presidential candidate Volodymyr Zelenskyy’s election program identified ending economic pressure on business as one of his priorities. To fulfill this task, on March 22, 2021, the President signed a law establishing the Bureau of Economic Security.
On November 4, the Cabinet of Ministers of Ukraine issued Order No. 1493-r “On the Start of the Bureau of Economic Security,” which launched the official start of the BES’s activities to perform functions to counter offenses that infringe on the functioning of the state economy.
It was expected that creating a single public authority responsible for combating economic crimes would not only significantly improve the business climate but also protect the state’s financial interests. However, the results could have been better.
For example, in 2019, 1287 criminal proceedings for tax evasion were registered. At the same time, 262 criminal proceedings were closed at the pre-trial investigation stage, 259 of which were closed due to the absence of a criminal offense. Only ten guilty verdicts resulted from the court proceedings in the respective cases during the reporting period.
Effective protection of the state’s economic interests and counteracting tax and customs offenses are even more critical in a full-scale war. Therefore, in the framework of cooperation with the EU, Ukraine has committed to implementing relevant legislation aimed at criminalizing large-scale smuggling of all goods, providing for effective penalties for imprisonment for any damage caused to the state budget above a certain threshold.
On December 9, 2023, Ukraine’s Criminal and Criminal Procedure Codes were amended to criminalize the smuggling of goods. This introduced criminal liability for smuggling excisable goods starting from January 1, 2024, and other types of goods starting from July 1, 2024.
The legislator assigned the Bureau of Economic Security of Ukraine (BES) to investigate such crimes.
MP Yaroslav Yurchyshyn appealed to the BES to provide impersonal information on the criminal proceedings initiated to assess the effectiveness of the measures taken to combat smuggling.
👉 In response, a letter signed by Acting Director Serhii Perkhun informed the following: “The departmental and other regulatory documents governing the law enforcement activities of the BES do not provide for the compilation and maintenance of records on registered criminal proceedings separately by type of offense, including smuggling, as well as reporting on other information specified in the annex to your appeal.”
😱The document makes it clear that the head of the BES does not have information about how his subordinates are fighting smuggling and, therefore, cannot make any management decisions regarding this.
On February 28, the EU Council approved the launch of the €50 billion Ukraine Facility for 2024-2027.
The plan implements reforms to lay the foundation for further economic recovery and development and Ukraine’s integration into the EU. The document provides for the relaunch and revitalization of the BES, including through adequate and competent staffing.
We hope that after the new BES leadership is appointed, our country will be able to demonstrate tangible results in the fight against smuggling.
And our team continues to monitor the effectiveness of criminal penalties for smuggling goods by other available means. We will continue to inform the public about the effectiveness of the fight against smuggling.