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Replacing Tax Police: What Should the Financial Investigation Service Be Like?

Date of publication: 29 December 2017

Dmytro Lazebnyi, Attorney at Law

Source: Business Censor

It is quite difficult to predict what exactly a new law enforcement agency called Financial Investigation Service will be like. However, it appears that our country needs this body as soon as possible.

The dynamics of the investigation agencies’ appearance on the ‘law-enforcement map’ of Ukraine is impressive.

Since 2012 (from the time of adoption of the effective Criminal Procedure Code of Ukraine), in addition to the ‘classical’ investigation agencies that have existed for many years, namely, the prosecutor’s office, the police (including tax police) and the Security Service of Ukraine, the society got a number of new investigation bodies.

Thus, recently a number of bodies have started or get ready to start their work, namely, the State Bureau of Investigation (under development), the National Anti-Corruption Bureau of Ukraine and the Department of the State Criminal Execution Service of Ukraine of the Ministry of Justice of Ukraine.

Almost all of the above-mentioned law-enforcement bodies are authorized to investigate certain economic crimes and, thus, they are able to influence or even harm the business by their investigative measures.

At the same time, in recent years there are quite a few questions as regards the quality of their work that, unfortunately, remain unanswered.

The European practical experience of such law-enforcement institutions demonstrates that the most effective way is to create one transparent investigation structure with clearly defined powers for investigation of certain crimes.

For example, on October 5, 2017 the European Parliament approved a decision to establish the European Public Prosecutor’s Office.

The work of two or more structures having the same investigation functions can greatly complicate the fight against economic crimes, as well as nullify all positive initiatives aimed to resolve this issue.

Being aware of the relevant all-European trends as well as domestic needs, the Government of Ukraine has accelerated its work on the establishment of a new law-enforcement agency – the Financial Investigation Service (hereinafter referred to as the Service).

It should be noted that the need for establishment of the aforementioned Service arose due – in no small way – to the mistaken or deliberate repeal of the provisions of the Tax Code, which regulated the activities of the tax police, at the end of last year.

Currently, there are several draft laws regulating the procedure for establishment, operation and activities of the Service.

At the same time, the high officials’ declamations concerning subordination and vision of the Service are disturbing and give grounds for concluding that there is no consolidated position on this issue.

It seems that the issue of Service’s subordination is not a key one; the only thing that matters is a well-balanced system of control over the activities of the said Service.

Undoubtedly, the Service should mainly consist of new personnel having no relation to the old system of the tax police, while still preserving the balance between the number of new employees, their professionalism and their wages.

The personnel selection should be as transparent as possible. In this case, it will be appropriate, where necessary, to invite the employees of the old tax school to hold the advisory positions.

It seems that for a high quality and rapid investigation of economic crimes the Service should have operational and investigative units within its structure, which would take over the functions of the State Audit Service, as well as the State Financial Monitoring Service (with the subsequent liquidation of such bodies).

At the same time, it is difficult to predict what exactly the new law-enforcement agency called the Financial Investigation Service will be like.

It can be said without prejudice that our country needs such body as soon as possible.

However, the greatest risk of establishing a new investigative body remains the creation of an ineffective service, which will not be able to fully address the issues falling within its competence.