Media reveal the details of Zelenskyi's draft law on oligarchs

Photo Reuters

Ksenia Omelchenko

The ZN.UA editorial office got acquainted with the text of the draft law "On Oligarchs" and concluded that it wasn't all right.

ZN.UA informed about this, Rubryka reports.

After reading the draft law, the editorial office realized that its purpose wasn't to "overcome the conflict of interest caused by the merger of politicians, media and big business."

According to the definition formulated by the Ministry of Justice, an oligarch is a person who:

1. participates in political life;
2. has a significant influence on the media;
3. exercises control over a significant amount of economic activity.

That is, we have three criteria: politics, media, big business. At the same time, lawmakers clarify that participation in political life, for instance, means: holding a high position in the state apparatus (from the president to the head of any central executive body), affiliation with a senior official, funding or direct leadership of the party or simply control over the media, which "disseminates political information."

So, according to the draft's logic, the article's author explains, even if you're just a media owner who creates political news, you're "already on the hook", because you immediately meet two criteria, "politics" and "media" of the three required. The "business" remains, and the combination is going to fall directly under this law.

The "business" criterion will be met by: final beneficiaries of natural monopolies, monopolists (50% for a year in a row) of commodity markets, or simply owners or beneficiaries of assets worth more than one million subsistence minimums (currently UAH 2.27 billion, or USD 84 million).

"Not so much, given that most of the major Ukrainian media belong to people in the Top 100 Forbes (see infographic). And given that the value will be determined by the total size of all assets to which the potential oligarch is connected, not shares, belonging to him; the 'oligarchic lists' will easily expand to the top 200 and the top 300," the publication explains.

An example is a new owner of "Ukrainska Pravda" Tomasz Fiala. According to the author, Fiala, whose company owns a bunch of assets and two influential media outlets which are actually "disseminating political information" are also well-targeted.

By the way, the draft says nothing about the citizenship of the oligarchs.

According to the draft, the decision to recognize a person as an oligarch is made by the National Security and Defense Council based on a proposal from the Cabinet, a member of the National Security, National Bank of Ukraine, Security Service, or the Antimonopoly Committee, and becomes valid after the official release of the President's decree and obligatory for implementation.

After that, the officially recognized oligarch will first be included in the Register of persons who have significant economic and political weight in public life (oligarchs).

Persons included in this Register are prohibited from:

1. making contributions (directly or indirectly through other persons) to support political parties under the Law of Ukraine "On Political Parties in Ukraine";
2. being a beneficiary (including the owning one) or a media controller who distributes political information;
3. being a purchaser (beneficiary of the beneficiary) in privatizing large-scale privatization objects.

The oligarchs from the Register are also obliged to submit a declaration of a person authorized to perform the functions of the state or local self-government under the procedure established by the law on the prevention of corruption.

"That is, the next step after adopting this draft law should be a big sale of Ukrainian media. Interestingly, the oligarchs can keep other assets, which actually bring the main cash flow. Let them continue to get rich. The key thing is to sell the media and almost for nothing. Or let them force their media to refuse to distribute political information, and according to the draft, it is about 'coverage, analysis or discussion of the activities of public authorities, state bodies, local governments, political parties, people's deputies and other members of collegial public authorities.' So the choice is small: either to turn it into a solid mix of secular and criminal chronicles with humor for dessert or to sell," the article reads.

In this case, selling media will immediately allow the oligarch to withdraw from the Register, however, with the condition: "A sign of significant influence on the media is not considered absent if the beneficiary status (controller) of the media has passed from the person included in the Register to a person associated with him/her or a person who does not have an impeccable business reputation."

But a trustworthy purchaser, according to the draft, will no longer be recognized as an oligarch, even if after acquiring the media, he'll meet the same 'oligarchic' criteria, the main thing is to prove his impeccable reputation.

Under the rules, a person's business reputation will not be considered impeccable under the following conditions:

1. the person has a criminal record that has not been expunged or removed in the manner prescribed by law;
2. sanctions by Ukraine, foreign states (except for states carrying out armed aggression against Ukraine), intergovernmental associations, or international organizations (applied during the term of sanctions and within three years after their abolishing or term expiration for which they were imposed) are applied against a person;
3. a person is included in the list of persons connected with terrorist activities or in respect of whom international sanctions have been applied (applied during the period of a person's stay in the list and within 10 years after his exclusion from it);
4.  a person is deprived of the right to hold certain positions or engage in certain activities under a sentence or other court decision (applied during the term of punishment);
5. a person improperly performed obligations to pay taxes, fees, or other obligatory payments, if the total amount of non-payment is equal to or exceeds 100 times the minimum monthly wage established by Ukraine's legislation for the period in which the violation was committed, or the equivalent in foreign currency (applied during the term of this violation and within three years after its elimination);
6. a person purchased (had an intention to purchase) a mass medium at a price that is significantly lower than the market price, or at the expense of funds, the source of which is not documented;
7. a person significantly and/or systematically violated the requirements of the legislation on mass media, banking, financing, currency, tax legislation, legislation on financial monitoring, legislation on securities, joint-stock companies, and the stock market.

"Actually, that's all. There's another strange article about officials reporting on meetings with oligarchs under threat of dismissal for the NABU leadership and administrative responsibility, for prosecutors. And the creators failed to do anything more. Here are your expectations against reality," the author writes.

At the same time, the article says, there are no "expected changes" in the draft law that would strengthen the institutional capacity of the Antimonopoly Committee, allow the security forces to grab the heads of parliamentary groups and factions when receiving another "oligarchic envelope," that would "crack down the state companies bedangled with oligarchs like Sirko with ticks, or stop their enrichment at the expense of state losses.

"They expected a lot… Instead, they received a law on media raiding… They don't show the super-secret draft law to people, but some oligarchs have already read it and are anxious. Not about their future, of course, but about the future of their media," the author summarizes.