Changed their minds at the last moment: there is no common position in the Verkhovna Rada tax committee regarding the draft law on the activities of the Deposit Guarantee Fund

The Verkhovna Rada Committee on Finance, Taxation and Customs Policy still does not have a coordinated position on the draft law on the activities of the Deposit Guarantee Fund for Individuals (DGF). Committee member Nina Yuzhanina noted in a comment to UNN that the situation remains uncertain, despite the fact that earlier agreements were reached between deputies and representatives of the Fund on jointly developing a compromise text based on an alternative document.

This refers to draft law No. 13007, submitted by the chairman of the Rada Tax Committee, Danylo Hetmantsev, as well as an alternative to it - No. 13007-1, registered by members of the profile committee Nina Yuzhanina and Anatoliy Nikolayenko. Both projects aim to change the legislation governing the activities of the Deposit Guarantee Fund, but offer fundamentally different approaches. In particular, the main project, the text of which was prepared with the participation of the DGF, contains a number of provisions that, according to the deputy, allow the Fund to avoid responsibility in the process of working with banks that are being withdrawn from the market.

At the previous meeting, the working group confirmed, even the chairman of the committee admitted: there are many things in the alternative project that should be taken into account. We analyzed the norms regarding transparency, openness, valuation of bank assets - and everyone agreed that in the wording proposed by the Fund (in the draft law registered by Hetmantsev - ed.), they raise doubts. Because, it seems that the Deposit Guarantee Fund wants to avoid responsibility in the event of starting work in any of the banks that are declared insolvent. A lot of articles in the proposed changes are specifically about avoiding responsibility for decisions made by temporary administrators. For example, regarding the valuation of property, at what stage it is carried out and by whom. But then, when we reached an agreed version, the Fund suddenly announced that it would not make changes because it "consulted with someone".

According to her, the biggest discussion revolves around the norms related to the valuation of bank assets, temporary management, limitation of liability of DGF officials, as well as discretionary powers, which the draft law initiated by Hetmantsev proposes to significantly expand. During the discussion of the draft law at the last meeting of the working group, according to Nina Yuzhanina, people's deputies proposed compromise formulations, and they were agreed upon both in the Fund and partially in the National Bank of Ukraine. However, now the position has changed dramatically.

During the last meeting, the Fund agreed with our arguments that the norms cannot be left in this form, but when it came to signing the alternative draft law, the Fund said that they want to insist on their wording. What happened during this month of work is not clear to me, because in the vast majority of cases they agreed with the position of the alternative document, somewhere they convinced us, but they were already reaching some kind of revised version. And after all these meetings, when they asked for a table, let's come up with some kind of revised version, they said that they would not change their norms, they consulted with someone there and want to ask to leave them as they are.

She added that a separate concern is the haste with which they are trying to push the draft law for consideration in the session hall. Committee Chairman Danylo Hetmantsev insists that the document should be adopted as early as next plenary week.

According to Yuzhanina, such haste resembles an attempt to fulfill obligations not in essence, but in form. But leaving such a controversial wording for revision between readings is very risky. 

According to Yuzhanina, the alternative draft No. 13007-1 takes into account the interests of depositors, creditors and shareholders of banks much better. It provides for limiting the excessive discretion of the Deposit Guarantee Fund, clear guarantees of transparency of procedures, as well as mechanisms of real responsibility for management decisions of officials. Instead, the draft law initiated by Hetmantsev, which was allegedly agreed with the IMF, leaves a wide field for abuse and negates the balance between state institutions and financial market participants.

Let's add

It is worth noting that in the conclusion of the Main Scientific and Expert Department of the Rada regarding Hetmantsev's draft law, it is said that experts did not see a correlation between this document and the Memorandum between the Government of Ukraine and the IMF.

It should be noted that the accompanying documents to the project... do not provide proper justification for 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 on the withdrawal of an insolvent bank from the market, in particular, on the protection of the rights of depositors from the consequences of the bank's insolvency, the effectiveness of the procedure for withdrawing insolvent banks from the market, as well as in the context of their compliance with the Memorandum on Economic and Financial Policy of 04.10.2024, which was signed between the Government of Ukraine and the International Monetary Fund, which is mentioned in the explanatory note to the project.

Experts emphasize that the draft law does not contain a complete mechanism of legal regulation, and most of the key norms proposed by Hetmantsev, in particular regarding the withdrawal of banks from the market, are transferred to the discretion of the Fund itself. This, according to experts, makes it impossible to objectively assess the consequences of the law, in particular the impact on the value of bank assets, the procedure for compensation and the protection of the rights of depositors.

In addition, experts point out that Hetmantsev's draft law actually endows the Deposit Guarantee Fund with powers that belong to the exclusive competence of the National Bank, which contradicts current legislation.

In their opinion, the point that allows Fund employees to simultaneously work in transitional banks looks particularly risky. This creates a potential conflict of interest and expands opportunities for corruption. And the provision on the possibility of non-disclosure of the Fund's financial statements - directly undermines the principles of transparency and accountability.

The proposal of the updated part 5 of Article 18 of the Law regarding the exclusion of the requirement regarding the Fund's publication of annual/quarterly financial statements in accordance with the requirements of the legislation; the results of the valuation of the bank's assets with the distribution by types of assets and indication of the independent subject of valuation activity, the method of valuation and the date on which the valuation was carried out, looks debatable, since this may negatively affect the publicity and transparency of information regarding the insolvent bank and, as a result, affect the ability of depositors and creditors of the bank to protect their rights and interests.

Let's remind

Earlier, UNN wrote that after a detailed study of the document, it became clear that the changes to the legislation in the part of the DGF's activities proposed by Hetmantsev contradict the Constitution of Ukraine in the part of the citizens' right to freely own property, as well as the right to judicial appeal and a fair trial. In addition, Hetmantsev's legislative initiative violates a number of existing laws and creates great corruption risks. In addition, Hetmantsev's draft law contradicts the obligations undertaken by Ukraine to the International Monetary Fund (IMF) within the framework of the current financing program.