This Tuesday, the Verkhovna Rada plans to consider in the first reading the revised draft law on changes in the regulation of the Deposit Guarantee Fund's activities. The Main Scientific and Expert Department of the Verkhovna Rada of Ukraine criticized the draft law, noting that it poses a threat to both legal certainty and the protection of the rights of depositors, creditors, and shareholders of banks, writes UNN.
In the explanatory note to the draft law, its initiators, including the head of the VR Committee on Finance, Tax and Customs Policy Danylo Hetmantsev and other people's deputies, indicate that the document was developed to fulfill paragraph 58 of the Memorandum on Economic and Financial Policy dated 04.10.2024, which was signed between the Government of Ukraine and the International Monetary Fund.
According to them, the Fund, together with the National Bank of Ukraine, analyzed the current mechanisms for withdrawing banks from the market and identified a number of key legal and operational gaps that require urgent legislative regulation.
However, in its conclusion, the Scientific and Expert Department of the parliament noted that the explanatory note to the draft law does not contain proper justification of the expected socio-economic consequences of changes to the legislation. Also, it has not been assessed whether the provisions of the document comply with Ukraine's obligations to the IMF, which are mentioned by the authors of the draft law in the explanatory note.
It should be noted that the accompanying documents to the project, as provided by the requirements of paragraphs 2, 3 of part 1 of Article 91 of the Rules of Procedure of the Verkhovna Rada of Ukraine, do not provide proper justification of the expected socio-economic, legal and other consequences of the application of the law after its adoption, other information necessary for the consideration of the draft law, which would allow assessing the impact of the proposed innovations for withdrawing an insolvent bank from the market, in particular, on the protection of depositors' rights from the consequences of bank insolvency, the effectiveness of the procedure for withdrawing insolvent banks from the market, and in the context of their compliance with the Memorandum on Economic and Financial Policy dated 04.10.2024, which was signed between the Government of Ukraine and the International Monetary Fund, as mentioned in the explanatory note to the project
According to experts, the draft law does not contain a complete system of legal regulation for withdrawing banks from the market. According to them, a significant part of the powers is transferred to the Fund itself without clear legislative limits, which creates a risk of abuse and legal uncertainty. There are also problems with the definition of terms, such as "interested person," which are formulated superficially and contradict other articles of the draft law.
The Scientific and Expert Department paid special attention to the risks associated with the new rules regarding arrested deposits. Experts indicate that the list of deposits that are not returned to depositors needs to be harmonized with the provisions of Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes.
The EU Directive clearly distinguishes between deposits that are subject to protection and those that are excluded from the guarantee system. In particular, according to European rules, funds obtained as a result of money laundering are not subject to guarantee. In this regard, it is unclear to experts whether the new version of the law proposed by Hetmantsev completely excludes such deposits from protection, or whether it only concerns limiting compensation for deposits whose term expired before the bank was withdrawn from the market.
The norm regarding the compensation of deposits that were arrested by a court decision also raises concerns. The Scientific and Expert Department emphasized that the current version of the draft law provides that the depositor will receive compensation only after providing documents on the lifting of the arrest from the deposit. But if the arrest is canceled after the liquidation of the bank, the person loses the right to compensation, even if the arrest was illegal. This puts the depositor in an extremely vulnerable position, as the terms for canceling the arrest do not depend on them.
In addition, the draft law proposed by Hetmantsev does not specify which documents will be considered confirmation of the lifting of the arrest, who should submit them to the DGF, and within what timeframe this should be done. Experts emphasize that the fact of arrest itself cannot be a reason for automatic refusal of payment, as it is only a temporary restriction, not an admission of guilt.
Thus, the proposed draft law also violates the basic principle of the Constitution of Ukraine – the presumption of innocence.
The revised draft law also provides for the transfer of employees from an insolvent financial institution to a transitional bank in case of liquidation without sufficient legal justification and without guarantees for all employees. This may violate the labor rights of employees, narrow the scope of existing guarantees, and contradict the Constitution of Ukraine.
Another violation of depositors' rights, according to experts, is the innovations that allow the assignment of rights without the debtor's consent. This contradicts the Civil Code of Ukraine. The revised draft law does not take into account situations where contracts explicitly prohibit such a change of creditor.
The norm regarding the establishment of a 30-day limitation period for judicial appeal of decisions of the Deposit Guarantee Fund for individuals also seems controversial. Such a norm contradicts the principle of equality in access to justice.
The Scientific and Expert Department indicates that the proposed draft law also creates legal uncertainty regarding the rights of bank shareholders against whom sanctions have been applied, and the mechanisms for transferring residual property to them.
In addition, the authors of the draft law propose to abolish the norm that prohibits transferring part of a corporate investment fund to another legal entity, but do not explain or in any way justify such a necessity. The authors of the draft law also did not indicate what the consequences of abolishing this norm might be. Experts warn that without this prohibition, there is a risk that the fund's assets may be "diluted" or withdrawn, which will make the fund less attractive to investors and less protected.
Thus, as evidenced by the conclusion of the Scientific and Expert Department of the Verkhovna Rada, the proposed draft law has systemic gaps, violates a number of Ukrainian laws, and also contradicts the Constitution of Ukraine and European legislation. The adoption of the draft law on the new regulation of the activities of the Deposit Guarantee Fund for individuals without deep and systemic revision can lead to a narrowing of the rights of depositors, creditors, and shareholders, as well as to violations of the principles of justice.