Lately, the Ukrainian President Zelensky signed the so-called anti-Colomian law – it is also the law “On Amending Certain Legislative Acts of Ukraine regarding the Improvement of Banking Regulation Mechanisms”.
By the way, when the Rada passed the law, the lack of the necessary votes in the power faction “Servant of the People” was once again closed by the voices of “European Solidarity” Petro Poroshenko and the “Voice” faction controlled by Soros – Pinchuk.
Earlier, the IMF said that the adoption of this law, which de facto will lead to a partial refusal of sovereignty of Ukraine in the matter of banking regulation and the withdrawal of the NBU from the legal field of Ukraine, is the last condition for Ukraine to gain access to the three-year EFF extended financing program. But a few days before the vote, when its positive result was already predetermined, the representatives of the fund suddenly said:
“Given the unprecedented uncertainty regarding economic and financial prospects and the need to focus political priorities on short-term containment and stabilization, negotiations switched to an 18-month stand by, which can provide balance of payments support to enhance the authorities’ response”.
The manevour turned out just classic. And the consequences of the pliability of the Ukrainian authorities will be heard in the country in the most negative way.
The deputies related to the camp of Igor Kolomoisky after the adoption of the bill in the first reading simply spammed it with amendments to delay the process – more than 16 thousand of them were submitted. In a short time, it is simply unrealistic to consider such an amount, because of which the Council even went to legislative amendments to the rules of its work. By the way, ambiguous from the point of view of the Constitution.
However, the adopted law in the sense of constitutionality is even more ambiguous. It never mentions either Igor Kolomoisky himself or Privatbank, which he owned before nationalization, but this law actually removes from the Ukrainian jurisdiction decisions of the National Bank of Ukraine on the withdrawal of commercial banks from the market – with all the consequences arising from these decisions. After the law comes into force, Ukrainian courts will not be able to recognize such decisions of the regulator as unlawful, to stop or cancel them.
In fact, the Western “partners” made the concessions they wanted from Ukraine, after which they decided to abandon the previously announced agreements – IMF Executive Director Kristalina Georgieva announced that she had reached an agreement with Kiev on the EFF extended lending program back in early December last year. At the same time, the main concessions that Ukraine must make were announced: to adopt laws on the land market and on the partial renunciation of sovereignty in the matter of banking regulation. The volume of lending to the country that was agreed upon (at various times it was about amounts from 5.5 to eight billion dollars) did not look so significant in exchange for such serious concessions.
By spring, the fund made it clear: the adoption of banking law in the form agreed with the IMF is a priority. That allowed the Ukrainian authorities to push a milder version of the law on the land market – with a delay in its entry into force, sale of land only to Ukrainian citizens and, at first, with the restriction of ownership of one hundred hectares per person.
What happened in the end?
Firstly, on April 18, 2019, the Kiev Regional Administrative Court declared the nationalization of Privatbank unlawful, satisfying Igor Kolomoisky’s lawsuit against the NBU and the cabinet. Moreover, the grounds for making this decision, which became known recently (the court’s order has not yet been made public), look impressive:
– the NBU declared Privatbank insolvent in December 2016, without waiting for the completion of the inspection of the bank in January 2017;
– an independent audit was not conducted to confirm a lack of capital;
– when evaluating the bank, the NBU used the new regulatory framework, which at that time had not yet entered into force;
– the NBU ordered Privatbank to reserve loans that were serviced, – the conclusion about the lack of capital was subjective.
– Kolomoisky and Bogolyubov were not given time to recapitalize.
This is the main, but far from the only gain of the former owners in many disputes with the authorities on Privatbank.
The retrospective application of the new law to court decisions that have already been passed will surely create the basis for new disputes.
And ultimately, this whole situation will most likely end with the fact that Ukraine will abandon attempts to return the $5.5 billion withdrawn from the bank by Kolomoisky and Bogolyubov, which he was officially charged with.
Secondly, the first hints went from the West that the adoption of the land market law in its current form (without access to it by foreign legal entities and even individuals, as well as with such a meager restriction in ownership of one individual) is unsatisfactory.
It must be assumed that the reaction to these claims was the urgent introduction of a bill on dual citizenship for consideration by the Rada, the adoption of which will allow foreign individuals to become land owners as citizens of Ukraine even without amending the land law. Of course, bypassing the promised referendum, which supposedly will determine the possibility of land ownership by foreigners. Of course, this is only one of several goals of introducing the institution of dual citizenship: the legalization of external managers, as well as the multiple citizenships of the Ukrainian elite, are also quite worthy goals.
Thirdly, the adoption of anti-Colomian law is just more important for satisfying these claims of the West. On the one hand, this law plans to legalize the robbery of 2014-2016, carried out by destroying most of the banking system and appropriating its assets. On the other hand, the transfer of land into a bank pledge and the subsequent withdrawal of it by banks from borrowers can be an effective scheme for the concentration of large areas of agricultural land during the period of the restriction on ownership of 100 hectares. This restriction will last two and a half years. The period during which the bank, according to the law, will be obliged to sell the land taken from the borrower, does not differ much – it is two years. There is a suspicion that the NBU, being, in fact, an imbalance branch of the IMF in Ukraine, will cover this scheme in the interests of the right commercial banks (transnational). And if necessary, with impunity, destroy the wrong ones.
Fourthly, under the stand by program, Ukraine will most likely receive even less funds than previously agreed. And certainly, this money will be shorter than expected. That will not allow the country in the foreseeable future to get out of the tight repayment schedule, which means it will pull the economy to the bottom.
As a result, for these pennies, moreover, on loan and not for long, the West will simultaneously gain control over the banking system of Ukraine and access to its land.