MPs Search For Ways to Pass "Anti-Kolomoisky Law" Amidst Internal Disagreement

13 April 2020 13:27

16,335 amendments have been proposed to a banking reform bill dubbed the ‘Anti—Kolomoisky law’ – a record in Ukraine’s parliamentary history – after it passed on the first reading. The bill, a requirement of the International Monetary Fund to continue cooperation with Ukraine, seems to have been very effectively stalled.

16,335 amendments have been proposed to a banking reform bill dubbed the ‘Anti-Kolomoisky law’ – a record in Ukraine’s parliamentary history – after it passed on the first reading. The bill, a requirement of the International Monetary Fund to continue cooperation with Ukraine, seems to have been very effectively stalled.

The ruling Servant of the People party, facing dissent in its own ranks, is now considering ways to move the bill forward. One idea, relayed by SotP MP Yevheniya Kravchuk, is to consider the amendments in groups to avoid “12 months” of discussion on the bill. Despite this, Kravchuk says that parliament is set to adopt the bill, though as of April 13, the relevant committee has yet to consider the bill itself.

We spoke to Servant of the People MP Vadym Halaychuk to gauge the mood inside the party for the bill, how prepared they were to face this opposition, and the Servant of the People’s legislative priorities going forward.

I wanted to ask about the open letter that you, with some of your colleagues, and even ex-Prime Minister Honcharuk posted on your Facebook pages, calling for Ukraine to pass the – as we call it – the "anti-Kolomoisky law." That was on March 25. Now the bill did pass on its first reading. And then we saw over 16,000 amendments, which I believe is actually a parliamentary record in Ukraine to this bill. Did you guys kind of expect this sort of resistance, some of which is actually coming from within your own party?

Well, yes, the problem of legislative spamming as we call them, or amendment spamming, is not new to this parliament. I mean, it happened. It happened before, it happened in this convocation. For unfortunately, we did not address the issue when we still had the time. In the beginning of our convocation, though, there were several drafts as to how to amend the rules of procedure so that we don't face this problem, at least not to the extent like it is now. However, many parliamentarians had seen that as a sort of infringement on their right to submit amendments and propose legislation in general. So but yes, we did expect resistance. Yes, we sort of knew where it was expected from. It doesn't matter much in terms of the number of the amendments, whether they're 16,000 or 6,000. It will take if you go through all the amendments, it just takes too much time for anything but yeah, the absolute record of 16,000 amendments – as a matter of fact, some people went into the trouble to count the words in the law itself that there are fewer words than there are amendments to the documents. So that tells you something. So yes, we did expect it, quite frankly I don't know whether there are any serious negotiations going with the people who have submitted the amendments. I hope they will move forward, and we'll take a more constructive position because the law does require serious consideration. I mean, there are legitimate reasons to ask for amendments, however, certainly not in the number that we have received. Now that that just makes the whole thing pretty much impossible to complete in any foreseeable future.

That's actually something I also wanted to ask. I mean this looks like it sets a very bad precedent for filibustering. I mean, you mentioned that we have legislative spam before but of course, nothing on this level. And if this does prove to be a successful tactic, it seems like anyone who wants to stymie any kind of reform efforts will be able to simply go well, ‘Okay, here's more amendments than the actual bill itself and have fun with that.’ Are there any kind of parliamentary tools or strategies that you and your colleagues are developing, to kind of push back against this, and maybe show that this kind of spam will not be effective in delaying reform in Ukraine?

Well, like I said, the rules and procedures have to be changed first, and that is difficult to reach consensus on because many parliamentarians would see any sort of prohibition for amendments as infringement on their right as a parliamentarian to propose legislation. Of course in cases like this, the best case scenario is negotiating with the author of the amendments. For him to withdraw the amendments and not demand the voting on those amendments. That's the best strategy. And my understanding is that that's what's going on. And by the way, quite frankly, the law had been dubbed the anti-Kolomoisky law, which, just in my humble opinion, it's not the issue that the draft is trying to resolve. It is much greater. We had a lot of banks that have been knocked out and the National Bank had to take them out of the market. It's not only a Ukrainian problem. It's obviously a very common problem. You don't just put a bank back on the market after the bank went bankrupt, it's not possible. I mean, just imagine that all the procedures that the regulator has to go through, the monies that have been paid out to, to people who have deposits in the bank, the bank that lost its reputation, money clients, you don't just put them back on the market with the decision of a regulator and expect them to just restart. It doesn't happen that way. So the issue is much greater. I'll tell you more, given the fact that Kolomoisky had been in courts for some time now.

And we know that a lot of – I don't even know it's dozens, the number of proceedings in different courts – both in Ukraine and abroad actually. My issue with this name for this draft of anti-Kolomoisky, is that it's not going to effect or it will not have the necessary effect, if you want, on the cases that Kolomoisky is pursuing in the courts now because the law doesn't doesn't go back in time. And a lot of issues that will come up just procedurally. The courts who are considering Kolomoisky’s claims cannot just switch to the new law, they have to finish certain proceedings under the old laws, and there's a huge question mark on the issue of whether they can just use the new law to finish the cases that Kolomoisky brought in earlier. So it's another big question whether that particular issue of Kolomoisky and Privatbank could be resolved with this piece of legislation.

Yeah, there's a lot of big questions raised by this law. Especially in terms of passing it – I mean, the land reform bill had a quarter of the amendments this one gathered, 4,000. And it took Parliament to two months to go from the first to second reading. So my question here is, when you posted this letter, you used this hashtag, no default. Right? And it seems like we're on the precipice. A lot of economists around the world are saying we're on the precipice of this kind of economic crisis. And it seems like this, this law, which Ukraine needs to unlock IMF support is really kind of on a limited timeframe. Do you think that despite all of this, it's still going to take months and months and months for Parliament to work through this or maybe your faction or your colleagues are thinking of some ways to make sure that this process doesn't take 2-3-5 months, however long?

I know the rules and procedure committee is working on some proposals and some techniques – let's call them that – to go around this issue. But again, my understanding is that the author or authors of the amendments, those that were the most productive ones, they sort of demonstrated openness to negotiations, which is a totally different issue. I mean, the ethical questions that it raises is a different issue. However, it would not be the right way to do it, to go into the same process that we went with the land reform. There, although most of them amendments, the great majority did not make any sense. There were quite a few that made sense ,that did need to be considered and voted on. Whereas here, we also have quite a few of those, and it’s too bad that the attention of parliamentarians is distracted now from the amendments that are really necessary and those that make no sense. So for now, I'd say the strategy should be discussing it and negotiating it, finding out what sort of strategy the authors of the amendments have and whether they are going to reach the desired effect at all. So it's a political negotiation now, that I can see as the most effective tool – in the absence of the amendments to the rules and procedures, which we cannot vote for now.

Now, I know you mentioned you don't really like this term, the "anti-Kolomoisky bill," though it is very widely used in the media, and in general discussion about this bill. But a lot of that has to do with the fact that the majority of the amendments filed I think, like something like 13,000 out of the 16,000 total, were filed by just seven MPs. So it's seven MPs holding up this entire reform process. One of them is an expelled Servant of the People MP, but there's, I believe, four or five that are still from your party. Is this seen as kind of like a friendly disagreement between colleagues? Or are the bill's opponents going to face some, you know, harsher consequences for these actions?

Well, it's not a secret that, within the party, within the faction – we do have differences, serious differences of opinion on many serious issues. And, quite frankly, some of the amendments do make a lot of sense and I myself – I didn't propose any amendments given the situation that is developing – but I certainly asked my colleagues in the line committee to look at certain issues. For me, there are some especially troubling issues where we are not changing the procedure with which the courts are supposed to consider such cases and make certain decisions. There are some really not very high quality [proposals in the bill], let's put it that way, proposals that will just make the procedure impossible. But yes, we do have people within the faction who hold different views on this particular problem. They have made their views very clear. They are trying to gain support. You know, people have been going around and trying – these particular members of the faction – and trying to get more support, explaining this ideological difference in in their view of how Ukraine's banking system and economy in general should be developing and whether IMF should have as much say, as, as it does in terms of what sort of legislative proposals we make and adopt.

Now, we've seen that per the land market bill, for example, the Servant of the People, this turbo regime, the mono-coalition, whatever you want to call it, it looks like it's fracturing at least from the outside. And for the land market bill, the President had to rely on MPs from opposition parties like Golos and European Solidarity to pass this, not from inside the party. Does this feel like a crisis for the party because from the outside It certainly looks like the party itself is kind of splitting up.

From the very beginning, this issue was a very difficult one to come to a common decision. We have agreed from the very beginning of this convocation that we realized that we will have difficulties in agreeing on certain issues. And the land law was a very good example. There are people who just flat out against accepting any sort of land market regulations right now. And they made their position very clear from the very beginning. Quite frankly, it was, in my opinion, an unfortunate practice to go in the way of the so-called turbo-regime, because that distracted a lot of attention. And that made the whole process of building the faction, building the trust within the faction, and bringing people together on important issues, very difficult. Because when you have 60 plus laws that you plan to consider within, you know, a few months period, it's difficult to do the work of gathering the necessary support to explain the strategic issues, and the land law is certainly one of those. So, yes, I wouldn't call it a crisis. But we see that as a very serious test on how the faction could function. Those issues that are less controversial – we don't have a problem with the faction getting together and giving the votes – but those that are controversial, are proving to be a difficult test for the mono-coalition, which we still are, to survive. That brought up issues of how we should be coordinating further work on basically everything.

Now we have a better understanding of what our colleagues are standing for. We have better ways of working out the deals. You have to do it, and yes, we realized within our faction too. The best tool, that has been very effective in all sorts of circumstances, is of course a nice talk with the President, where we all get together and the President comes in and the Prime Minister, and key ministers. Where we have a very frank discussion question of what the differences are, what we’re trying to achieve. And basically getting that allowed to have the land law passed, where we had a very frank discussion, where we had very open, open for everyone and move forward and made certain concessions to each other that allowed us to work. So that that is the tool. We are very open for discussion. We still know how effective the President could be when we are sitting down in the same room and everyone has the opportunity to ask openly any questions that they might have. And that allowed for more than once to change the position there, which some of our colleagues have taken. So that's our hope for this particular issue.

So let's say that the bill passes in a version that's acceptable to the IMF. What are the next kind of reform programs or issues that you're going to be gearing up to fight for? That you expect this kind of maybe not as much resistance as to this particular bill, but you know, that you're going to be expecting pushback to.

Fighting COVID-19 is the number one issue and the current time – the fact that the Rada cannot work in the regular regime, has brought the necessity to work out different sorts of tools to continue work. For example, the committees, pretty much all the committees now had their first meetings online, which is pretty effective. So we use this time and then this opportunity to do more work in the committees, to consider the legislation that was that we didn't have time to and make it a better quality. So right now, the passing of the law on budget, the changes to the law on budget that will allow us to fight, to go through the quarantine, to fight the COVID-19 problem. Hopefully we will succeed, and we expecting another extraordinary meeting in the parliament early next week, probably Monday, most likely. But then the major issues, of course, the ones that have been discussed, for some time the issue of territorial reform, the administrative reform, as we call it, that requires changes to the constitution, that requires a lot of discussions. That requires understanding in the society what it is that we're trying to reach, and building up consensus in the society, first of all, and then within the parliament on how we proceed, though we have done a lot. And you might recall that the President had to withdraw his proposals because of, let's put it that way, poor communications and lack of, of this mutual agreement. However, we believe we have moved forward a lot in terms of building up that consensus in the society.

So that of course, is a very important issue in terms of how we go about the main promise that we have made when we ran the campaign. The peace process That now is issue number one after we go through the COVID-19 problem and the budgetary changes, all the attention will be towards administrative territorial reform, and building up consensus in society on how we approach the peace process. What are we willing to accept? And what the strategy would be, so that we move forward, and from the time the local elections happen, this fall, we have a more or less agreed strategy on how we approach the whole process of territorial reform and reintegration of the occupied territories.

And finally, I did want to ask one more thing about the banking reform bill, let's call it. How big is the financial risk to Ukraine here? I mean, you guys used that no default hashtag – what's the real risk? Let's say that the law passes, but maybe it's not in a form that the IMF finds acceptable and we don't unlock those funds. What is Ukraine looking at in that case?

We certainly hope that the law will get passed, the funds will get unlocked. It's extremely important in – not as much in terms of the amount of money that will be available, but the general effect that it will have on our financial system, for Ukraine. We certainly cannot allow Ukraine to not to perform on its financial obligations. And there are funds available, there are different programs that could do a lot. In terms of how the financial system in general is doing, I'm not a financial [expert] myself, not a banker, but my colleagues who do know the banking system very well, they insist that the banking system, after the years 2014 and 2015, when a lot was happening, have built up a strength and it's very capable now. There's enough liquidity. The National Bank of Ukraine has developed sufficient expertise and has enough tools and authority to oversee the banking system and not to allow the financial crisis to hit unexpectedly. So we are pretty calm on that issue. The financial system can handle the problems that are coming in and we know that with how the economy is doing, we'll have some problems there. But certainly the main issue with negotiations with IMF and other financial institutions, is the sort of building up the strength in the system and the capabilities in the system, to restart the economy quickly after the COVID-19 ends.

/By Romeo Kokriatski