Bill 13007, initiated by Danil Getmantsev, could significantly change the work of the Deposit Guarantee Fund for Individuals, increasing its dependence on the NBU, limiting access to information and reducing the time frame for filing claims. Experts warn that such changes create risks for creditors, depositors and shareholders of banks, contradict Ukraine's commitments to the IMF and could undermine confidence in the banking system, writes UNN.
The head of the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, Danilo Hetmantsev, registered in the Verkhovna Rada bill 13007 "On Amendments to Certain Legislative Acts of Ukraine Regarding the Regulation of Certain Issues of the Activity of the Deposit Guarantee Fund for Individuals, the National Bank of Ukraine, and Investment Institutions", which significantly changes the rules of operation of the Deposit Guarantee Fund for Individuals.
Hetmantsev proposes a number of controversial innovations that could limit the rights of creditors, depositors, and bank shareholders. In particular, it concerns the increased dependence of the Deposit Guarantee Fund on the National Bank of Ukraine, closing access to key information about the Fund's activities, as well as significantly shortening the deadlines for filing claims. According to experts, this legislative initiative creates significant corruption risks and could lead to "manual management" of the Fund.
The Deposit Guarantee Fund will no longer protect creditors and bank shareholders.
Lawyer Yulian Khorunzhyi, during a discussion on the YouTube channel Ukraine Economic Outlook regarding bill 13007, emphasizes that it hardly provides for the rights of creditors.
After reading the text of the bill, it seems that creditors have been forgotten altogether. The procedure for withdrawing a bank from the market is created solely for the Deposit Guarantee Fund to meet its demands and needs
Member of the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy Nina Yuzhanina also expressed doubts about the transparency of the Deposit Guarantee Fund's operations.
Considering all the information I received while working on an alternative draft law, I do not trust this institution. And we need to correct this
Does the IMF require the independence of the Deposit Guarantee Fund
Yulian Khorunzhyi drew attention to the decision of the Supreme Court of Ukraine in the case "Bank Slovianskyi vs. Ukraine", which confirmed the complete dependence of the Deposit Guarantee Fund on the National Bank of Ukraine. The governing body of the Deposit Guarantee Fund – the Administrative Council – consists of five members, three of whom are representatives of the National Bank. This effectively deprives the Fund of independence in decision-making.
Financier Serhiy Kruhlyk adds that the Deposit Guarantee Fund has always been within the interests of international financial organizations.
The Deposit Guarantee Fund has always been at the center of Ukraine's negotiations with the IMF. The current composition of the governing bodies does not ensure ideal control over the activities of the management (Deposit Guarantee Fund – ed.)", - he noted. The expert supported the idea of expanding the composition of the Administrative Council of the Deposit Guarantee Fund: "Why not make it 8 or 12 council members?
According to UNN, Hetmantsev's initiative contradicts the obligations undertaken by Ukraine before the International Monetary Fund (IMF) within the framework of the current funding program. In particular, Ukraine has committed not to change the distribution of roles and responsibilities of participants in the financial security system during martial law.
According to the agreements, the review of the management mechanisms of the Deposit Guarantee Fund should cover the composition of the Administrative Council, as well as the accountability of the Deposit Guarantee Fund, legal protection, the functioning of decision-making structures, internal control, and the procedures for appointing the managing director. The latter must be appointed through an open competition.
Instead, Hetmantsev's bill proposes a significant expansion of the Fund's powers, including in regulatory activities and determining the criteria for the liquidation of banks, which creates a risk of abuse and directly violates the Memorandum with the IMF.
Hetmantsev's legislative initiative does not contain mechanisms for controlling the activities of the Fund and does not provide for the independent appointment of management. Instead, it grants the NBU and the Deposit Guarantee Fund virtually unlimited powers in matters of withdrawing banks from the market.
That is, it is proposed to create a model under which the National Bank and the Deposit Guarantee Fund can introduce their own rules and use their own criteria for withdrawing any bank from the market without any external control. This directly contradicts the obligations undertaken by Ukraine before international financial organizations.
The opacity of information about the activities of the Deposit Guarantee Fund
Hetmantsev's bill also provides for limiting access to key information about the activities of the Deposit Guarantee Fund for Individuals.
"Creditors, depositors, and other participants in the procedure for withdrawing a bank from the market are denied access to information that is currently publicly available," - noted lawyer Yulian Khorunzhyi. This includes, in particular, the Fund's reporting, asset valuations of banks, and information about asset sale prices.
In fact, we will not be able to track how the assets of banks are realized. For example, is a plane not being sold for the price of a "Zaporozhets" car?
Thus, Hetmantsev's bill violates the law "On Access to Public Information". It guarantees that everyone has the right to access public information held by entities of public authority. State bodies are obliged to ensure openness, transparency, and accessibility of information about their activities. And restrictions on access to information are allowed only on legal grounds and cannot be used to conceal information about human rights violations.
Shortening the deadline for filing claims for bank depositors from 3 years to 30 days
In addition, Khorunzhyi warned of another threat posed by Hetmantsev's bill. "If after some event a depositor or creditor does not file a lawsuit within 30 days, they lose this right," - he explained. Such a change significantly limits the possibilities for challenging the actions of the Deposit Guarantee Fund, especially considering the new restrictions on access to information.
The bill also provides that the Deposit Guarantee Fund will independently develop its own rules of operation without agreement with the Ministry of Justice, which will take effect from the moment of publication on the Fund's website. MP Nina Yuzhanina emphasizes: "Such a decision allows the Fund to adopt regulations without legal control, which contradicts the principles of the rule of law."
Earlier, the founder of the law firm "Kasyanenko and Partners" Dmitry Kasyanenko also criticized Hetmantsev's bill regarding the limitation of deadlines for challenging the decisions of the Deposit Guarantee Fund in courts to 1 month. According to him, this contradicts the general principles of civil legislation and creates preconditions for abuses by responsible officials. The lawyer emphasized that this does not comply with Article 55 of the Constitution of Ukraine, which guarantees everyone the right to judicial protection, and also contradicts the practice of the European Court of Human Rights, which requires ensuring reasonable time limits for appealing to the court.
The head of the NGO "Independent Anti-Corruption Bureau of Ukraine" Arsen Marinuskin believes that Hetmantsev's bill is lobbyist and is an attempt to create a convenient legal reality for the Deposit Guarantee Fund.
I have already observed a disturbing trend in legislation, where in special laws authors try to establish "statutes of limitations" where there cannot be any by definition. In my opinion, on the one hand, this is a legal manipulation to justify the Deposit Guarantee Fund for possible mistakes, and on the other, a fundamental misunderstanding of legal foundations
Thus, the proposed changes contradict the Constitution of Ukraine regarding the citizens' right to freely own property, as well as the right to judicial appeal and a fair trial.
Another important point is that the Deposit Guarantee Fund may gain the right not to return money to certain categories of persons until the end of martial law, and simply take it for itself. This also violates the Constitution regarding property rights.
Thus, Hetmantsev's bill regarding the regulation of the activities of the Deposit Guarantee Fund for Individuals contains a number of provisions that could significantly limit the rights of creditors, depositors, and shareholders of Ukrainian banks that are in the process of liquidation. If the document is adopted in its current form, it could undermine trust in the banking system of Ukraine and reduce the level of investor protection.