The law creating Bureau of Economic Security entered into force

Ukraine

On 22 March 2021, the President of Ukraine signed Law No. 1150-ІХ “On the Bureau of Economic Security” (the “Law”) following its passage through parliament in January.

The Law establishes the Bureau of Economic Security (the “Bureau”) as the central body of executive power authorised to fight economic crime. The main tasks of the Bureau, which will be established within six months, are the prevention, detection, termination, investigation, and dissemination of criminal offences that interfere with the functioning of the state economy.

The Cabinet of Ministers will direct and coordinate the Bureau’s activities. In adopting this Law, the Ukrainian government intends to:

  • introduce new analytical approaches to counteract financial crimes and conduct effective investigations into complex criminal schemes;
  • minimise budget losses by preventing financial crimes and minimise unfair competition;
  • optimise the structure of law enforcement agencies as well as their material and technical basis.

The Law provides a detailed list of tasks for the Bureau, which include:

  • identifying risk areas in the economy, assessing these risks, and developing ways to minimise and eliminate them;
  • ensuring state economic security by preventing, detecting, suspending, and investigating criminal offences that affect the functioning of the economy;
  • detecting and investigating offences related to the receipt and use of international technical assistance;
  • collecting and analysing information about offences that hinder the proper functioning of the state economy and making proposals for amending state regulations.

In accordance with the tasks assigned to it, the Bureau may collect, process, and analyse information about criminal offences; carry out operational and investigative activities; search for persons hiding from state authorities or evading a criminal sentence for committing economic crimes; conduct administrative proceedings; and 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 as well as request the information necessary to perform its functions. The Bureau will also have other powers provided by Ukrainian law.

In a nutshell, the Bureau will exercise the authority previously exercised by the tax police and the State Security Service and become the only state body to deal with economic crimes.

The Bureau is to be led by a director, appointed by the Cabinet of Ministers after an open competition. The selection commission will consist of three members, one each from the National Security and Defence Council, parliament, and the Cabinet of Ministers. The open competition will choose three winners. The Prime Minister will select the director from these three and submit his 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 the position for more than two consecutive terms.

The Law entered into force on 25 March. The Bureau must commence operations no later than six months after this date.

For more information on the Bureau, contact your CMS client partner or local CMS experts: Anna Pogrebna, Oleksandr Protsiuk, Olga Shenk, Roman Hryshyn-Hryshchuk.

Legislation:

Law “On the Bureau of Economic Security” No. 1150-ІХ (in Ukrainian).