A demonstrator with a placard, “Corruption Applauds”, amid a protest about Government legislation curbing anti-corruption agencies, Kyiv, Ukraine, July 22, 2025 (Alex Babenko/AP)
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In July, Ukrainians resumed their anti-corruption campaigns after a three-year hiatus because of Russia’s full-scale invasion.
Personal irritations had come to a head over concerns that their Government was going to shut down transparency, accountability, and justice. Now they were mobilizing to challenge their leaders over legislation that threatened to muzzle their anti-corruption agencies.
They rallied outside the Presidential Office in Kyiv and in other cities against the measures putting the Prosecutor General in charge of the National Anti-Corruption Bureau (NABU) and the Special Anti-Prosecutor’s Office (SAPO). They chanted for the freedom of their institutions. Their placards chided President Volodymyr Zelensky, “Have you lost your mind?”,
They rallied when Zelensky signed the amended bills. And they celebrated when he reversed days later, restoring the independence of NABU and SAPO.
But now those Ukrainians face another threat to erode accountability, transparency, and the fight against corruption. Law No. 12439 hinders the work of the Bureau of Economic Security.
On Tuesday, the bill has its second reading in Parliament. If it ultimately passes, the BES will lose the right to initiate
proceedings for the embezzlement of state funds and property. That restriction would not only hinder Ukraine’s economic integrity. It could also jeopardize Kyiv’s campaign to join the European Union and financial assistance for its resistance against Russian aggression.
What’s At Stake
Foreign financial aid covers around 60% of Ukraine’s Government budget. With Ukraine’s domestic revenues devoted solely towards defense, the foreign assistance pays for all non-military expenditures such as pensions, social assistance, and healthcare.
From 2023 the International Monetary Fund has committed to a four-year package of $15.5 billion. The European Union is delivering €50 billion ($58.8 billion) from 2024 till 2027. But Ukraine still has a budget deficit of $38.8 billion, equivalent to 19.4% of its GDP.
The IMF and EU loans and programs are contractually tied to democratic reforms. Any failure to meet benchmarks could results in suspended payments of billions of euros.
The reform of the Bureau of Economic Security is one of the key requirements. This includes the selection of an independent director through a transparent competition overseen by a commission of Ukrainian and international experts.
The Zelensky Government initially resisted formal appointment of the competition’s winner, Oleksandr Tsyvinskyi. Ukrainian civil society, business associations, and international partners, including the European Commission and G7 ambassadors, criticized the stalling. The government gave way on August 6 and confirmed Tsyvinskyi.
But amendments to Law No. 12439 restrict the BES’s ability to investigate economic crime by changing Ukraine’s Code of Criminal Conduct. They deprive the BES of the right to independently initiate proceedings for embezzlement of state funds and property. They amend the Criminal Code to broaden the range of circumstances excluding criminal liability.
A new article introduces the concept of “compliance with the official positions of state authorities”. This provision is a significant change in establishing liability for economic crimes: explanations from authorized bodies are not just proof of good faith in court, but an alibi that blocks the opening of criminal proceedings. This effectively exempts corrupt but pro-governmentofficials from prosecution.
The legislation also creates a loophole for law enforcement agencies to avoid the launching of investigations. Conditions which currently mandate initiation of criminal proceedings are no longer obligatory. Investigative strategies may be disclosed. Urgent searches would no longer be possible in most corruption cases.
The BES summarized on September 2:
This essentially concerns our entire jurisdiction…. If the law is adopted, detectives from the Bureau will no longer be able to independently enter information about criminal offenses into the Unified Register of Pre-trial Investigations and initiate pre-trial investigations.
The Fight Over Anti-Corruption
In January 2025, two bills were registered. Neither focused on BES, NABU, or SAPO. Law No. 12414 was about “pre-trial investigation of missing persons during martial law”. Law No. 12439 sought “the improvement of guarantees for the protection of business entities during criminal proceedings”.
In both cases, last-minute amendments were introduced during the second reading by relevant Parliamentary committees. This secrecy is possible because the Parliament’s agenda and the work of its committees are not disclosed to the public, for security purposes during wartime.
The amendments were proposed by members of President Zelensky’s Servant of the People party, Serhiy Ionushas and Maksym Buzhansky.
Serhiy Ionushas is Head of the Law Enforcement Committee. Before entering politics, he was a lawyer for Kvartal 95, Zelensky’s motion picture company. He also registered the trademark for “Servant of the People”.
Maksym Buzhansky was a supporter of Viktor Yanukovych, ousted as President by the Maidan Revolution of 2014, and his Party of Regions. He also wrote the amendments that eroded the independence of the NABU and SAP.
The amendments were spurred by anti-corruption investigations that threatened senior members of the Government. On June 23, Deputy Prime Minister Oleksii Chernyshov was formally named as a suspect in a high-profile case of illegal seizure of land. The highest-ranking Ukrainian official to face charges while in office, Chernyshov
is also a close friend of Zelensky.
On July 15, NABU searched properties in Germany of Rostyslaw Schurma, Zelensky’s former advisor and the former deputy of Presidential Chief of Staff Andrii Yermak. NABU also investigated Timur Mindich, Zelensky’s close friend, former business partner, and the co-owner of Zelensky’s production company Kvartal 95.
Ukraine’s State security service SBU countered on July 21 with the searches of 70 apartments of NABU employees on a single day. The SBU never disclosed what it was seeking, but it detained the lead detective, Ruslan Magamedrasulov, who oversaw the Mindich case.
On the same day, Zelensky issued a decree imposing a moratorium on inspections and other forms of interference in business activities by regulatory authorities such as the State Tax Service and BES.
On August 2, after the Parliamentary attempt to curb its autonomy, NABU uncovered a bribery scheme involving several local officials of Zelensky’s Servant of the People party. The group rigged state contracts to purchase drones and electronic warfare equipment from supplier companies at higher prices.
And in late August, the Kyiv Independent revealed that NABU is investigating the defense firm FirePoint, producer of deep-strike drones and the long-range missile Flamingo. Established in 2022 and snaring 30% of Ukraine’s military procurement deals by 2024, the company is suspected of inflating the prices of the drones. In a separate inquiry, the Independent’s journalists are examining whether Zelensky’s long-time associate Timur Mindich is the beneficiary of the deals.
The director of FirePoint responded with a letter to the Kyiv Independent’s editor-in-chief Olga Rudenko. He said he would file a complaint with the SBU about the editorial staff committing a crime under articles of high treason and aiding an aggressor state.
A Corrupt Legacy to Overcome
After gaining independence in 1991, Ukraine experienced a period of high institutional insecurity and competition for economic resources. In the power struggle of post-communist elites for influence and the contest between Parliament and the President, anti-corruption policies were not designed to eliminate corruption but to maintain power. Socially and politically, informal networks and patron-client relationships were the norm.
The problems were compounded under President Leonid Kuchma in the early 2000s and President Yanukovych in 2010. The outcome was a kaleidoscope of institutional flaws with four aspects of corruption, defined by academic Oksana Huss:
Firstly, politicians and oligarchs were intertwined in informal patronal networks that operate on favoritism. Political parties often functioned as “business platforms” for oligarchs to gain political access.
Secondly, even democratically-elected politicians were influenced by oligarchs, whose financial support and media presence were critical for their success. This led to severe clientelism in decision-making.
Thirdly, appointments in government, including the legislative, executive, and judicial branches, were based on loyalty to a patronal network rather than professional qualifications. Corruption was used as a tool to enforce loyalty.
Lastly, “free-market corruption”, with “kickback” money, became a popular method of rewarding state officials for procurement deals. Many of whom participated in real estate deals, gas schemes, infrastructure bribes and military procurement scandals.
Corruption in the free market is damaging defense efforts and public morale. Almost 62% of the population and 49% of enterprises consider this a serious problem.
Since the Revolution of Dignity in 2014, there has been a significant increase in the institutionalization of anti-corruption policies and a steady decline of corruption. Despite this progress, these efforts have not only stagnated since 2023 but are being actively sabotaged, with the attempts to crush the rule of law and muddy investigative transparency.
The Threat to Ukraine’s Future
The BES bills, like those trying to curb NABU and SAPO, could be a hasty insurance policy for corrupt officials. The strategy is to destroy institutions that can enforce laws or to abolish laws that can be enforced by institutions.
Beyond Ukrainians’ frustration with corruption, this political behavior damages the trust and goodwill of Ukraine’s European allies, jeopardizes the country’s economic stability, and threatens the nation’s much-desired integration into the EU. It could halt further payments by the IMF and EU to sustain Ukraine’s government budget, and jeopardize Ukraine’s efforts to apply for new interest-free loans without any conditions before the end of 2025.
With these harmful changes being proposed by members of the Servant of the People party, President Zelensky is either complicit or he is unable to set the priorities in his political team.
Anyone who has heard a Zelensky speech will be looking for consistency here. Where is the commitment to democratic values that he promotes? How does this legislation aid Ukraine’s defense? How does it respect those fighting and shedding their blood for Ukraine’s sovereignty?
Ukraine is on thin ice legally, politically, and militarily. In dangerous circumstances, the nation stands to lose what it is fighting for – a democratic future.
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