Grand corruption and state capture are still widespread in Ukraine despite EU action, according to a special report published by the European Court of Auditors (ECA). The EU has been trying to address corruption in Ukraine as a cross-cutting priority; it has channelled funds and efforts through a variety of sectors, from the competition environment to the judiciary and civil society. But the support and measures put in place have not delivered the expected results, the auditors say.
For more than 20 years, the EU has been supporting Ukraine in its reform agenda. Tackling corruption, which is a major obstacle to a country’s development and runs counter to EU values, is an integral part of that. Grand corruption and state capture are endemic in Ukraine; as well as hindering competition and growth, they also harm the democratic process. Tens of billions of euros are lost annually as a result of corruption. The European Commission, the European External Action Service (EEAS) and the EU advisory mission have attempted to address this issue, and have backed several reforms to reinforce the rule of law and to fight corruption in Ukraine.
The EU has long been aware of the connections between oligarchs, high-level officials, politicians, the judiciary and state-owned enterprises. However, it has not developed a real strategy for targeting grand corruption, the auditors note. For instance, illicit financial flows, including money-laundering, are addressed only at the margins. Nevertheless, the EU has supported many anti-corruption reforms and activities in Ukraine. In most cases, the degree of support depends on a number of conditions being met. But the Commission has often interpreted such requirements too loosely, leading to over-positive assessments. The auditors cite the visa-free system as an example. The operation of this system has not been reconsidered, even though two of the three conditions for EU support have not been achieved.
“Despite varied support the EU has offered to Ukraine, oligarchs and vested interests continue to undermine the rule of law in Ukraine and to threaten the country’s development”, said Juhan Parts, the member of the European Courts of Auditors responsible for the report. “Ukraine needs a focused and efficient strategy to tackle the power of oligarchs and diminish state capture. The EU can play a much more significant role than it has done so far.”