BY
The end of October sees the deadline for tens of
thousands of Ukrainian politicians, civil servants and other assorted holders
of high public office to submit their e-declaration returns relating to their wealth (and as previously
inferred,
perhaps in far too much detail available to all and sundry – transparency is
not necessarily the same thing as unrestricted public accessibility).
On the whole it is
nevertheless a law behind which there is the right spirit of transparency and
accountability despite its shortcomings (as expected with any Ukrainian law, it
is not perfect), and of vital importance is the criminal liability carried with
regard to deliberately misleading and/or recklessly erroneous statements.
(No reader would expect any serious attempt at diligently completing such
an e-declaration without criminal responsibility when considering those
required to complete it.)
To be fair, with little
over 24 hours to go (at the time of writing) before the mandatory submission
date expires, there are no major surprises forthcoming from the declarations
submitted. There are some very rich people running and managing the
country. It would be needlessly shallow to pretend to be shocked by the
accumulated wealth of either politicians or leading civil servants, or heads of
State Owned Enterprises.
Indeed some would appear
poorer than “collective wisdom” rated their wealth to be – albeit there are
certainly areas within the declarations that can be massaged upward or downward
as those completing such declarations see fit.
Whatever the case, and
regardless of the system’s legislative short-comings, the as yet unproven
ability to provide evidence for prosecutions, or alternatively to allow for the
legalisation of questionable assets, there is notably a lot of physical cash
(in numerous currencies) outside of the banking system held by almost every
individual required to make e-declarations.
It has to be acknowledged that the vast majority of
Ukrainians, be they billionaires, millionaires, the average Joe, or paupers,
historically have very little faith in the domestic banking system. It
also has to be acknowledged Ukraine remains very much a cash economy – much of
it grey/black in nature. The net result is a very large percentage of the
population, what ever the scale of their fiscal wealth, physically hold, and
physically hide, their cash rather than use the banks or have it officially
recognised somewhere in the system.
It is somewhat pointless
in trying to guess where some very large sums of cash have come from, whether a
reader chooses to believe it has accumulated over time or is the result of a
big “under the radar” transaction. To be blunt, it is perhaps Utopian to
think that NABU will have the time, energy, or finances to investigate all but
the most questionable.
For most, the
legalisation of these large cash sums, whatever its provenance, will be the result.
If so, perhaps having legalised it, these large sums may then enter the
banking system for there is no longer a requirement to hide it.
Indeed, a reader may consider that a soldier fighting
the war in the east, expected to defend the nation and perhaps die doing so for
about $300 per month, notwithstanding the organised crime groups, may seek to
relieve some of those making public declarations of such large cash holdings
outside the banking system. Personal security firms may now see a further
uplift in business not only around dwellings of the affluent public office
holders, but also around family members – for kidnapping and ransom would
appear to become an increased possibility.
As previously
inferred, if
the bodged introduction of the e-declaration system does prove to prevent
prosecutions then the entire event may prove to be the biggest, albeit one-off,
government sponsored (and internationally backed) money laundering operation in
memory. Something akin to an unspoken “drawing a line in the sand”, ergo forgiving and legalising many past misdeeds but
clearly laying down that henceforth there will be far less room for
accommodation of such nefarious and criminal shenanigans.
Such an outcome is
certainly not ideal, but is arguably better that continuing with the existing
status quo where internally and externally of Ukraine it is expected that some
major figures will be jailed for corruption – and yet thus far none have been.
Many readers are used to the wheels of justice turning slowly – yet the
anti-corruption wheels of justice in Ukraine are clearly approaching glacial.
All of that said, just
because a lot of cash is held by an individual far beyond their official salary
(and other declared incomes), it does not mean it was (all) acquired through
the dirty deeds – those dirty deeds have to be proven to have occurred.
For example, when the
buying and selling of land, businesses or houses (in $ six figures
frequently) and cars historically has occurred in cash – and that can
still occur despite legislation that now seeks to makes such high value asset
purchases electronic transactions – it is still necessary to prove not only
that the cash isn’t the result of a land/house/asset sale in 2003 and the
proceeds were retained in cash because the recipient didn’t trust the banking
system then, and doesn’t trust the banking system now, but also to prove they
are the proceeds of a criminal act.
It is a matter of what
can be proven – and not a matter of what is perceived or asserted.
Looking forward, if
Mr/Mrs X declares $500,000 in cash for this e-declaration period, and $750,000
in cash at a subsequently required declaration what is to be done – if
anything?
As money in the bank and
other hard assets will become increasingly less difficult (albeit still not
easy) to trace, it follows therefore that one significant question going
forward is how to account for the large amounts cash in hand (quite literally)
when it comes to those individuals holding public office if the giving and/or
receiving of bribes, or the otherwise facilitation of corruption via cash, is
to be managed far more effectively?
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