Why Are Laws Vital to Ukraine’s EU Integration Stuck in Parliament as the Country Loses Money?

President Volodymyr Zelensky recently signed laws abolishing the VAT exemption for foreign parcels worth up to €150 ($168) and introduced taxation of income earned by users of digital platforms. All three documents returned to parliament with the president’s signature on Oct. 22 and all laws were adopted as part of the EU’s requirements. Their passage took substantial time due to being highly unpopular. One such requirement was the taxation of parcels arriving from abroad. The problem is that such “parcels” often serve as a convenient way to ship large quantities of various goods from third countries, primarily China. Everything from drone components to cosmetics, clothing, children’s toys and auto parts was imported under the guise of parcels.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. The law proved extremely unpopular, despite Ukrainians’ desire to join the EU. During wartime, as Ukrainians face enormous expenses on fuel, generators and any equipment that could help them cope with the war and Russian attacks, nobody wants to spend extra money. This is especially true in the case of taxes which, in the wake of recent corruption scandals, many people believe do not always go where they should. This is only the beginning of a long and politically unpopular road for a government that is already struggling to secure public support and approval for its initiatives. By the end of the year, the Verkhovna Rada must adopt around 32 more laws, while the government must meet more than 30 benchmarks. Key reforms being monitored by Ukraine’s partners are as follows: Other Topics of Interest Russia Launched 1,600 Bombs and 2,300 Drones Over Past Week Volodymyr Zelensky said on Sunday, Oct. 25, that Russia fired 1,600 bombs, 2,300 drones, and 48 missiles in the past week, damaging sites in nine regions, as he urged Patriot deliveries. 1. Reform of the State Bureau of Investigation (DBR) and the Security Service of Ukraine SBU) – two key state agencies involved in law enforcement and anti-corruption efforts and subject to the influence of the central authorities. Draft Law No. 13602 concerns changes to the DBR’s head, the introduction of a transparent competition to select its director, the vetting of DBR employees, and the removal of several provisions that allow the President’s Office to influence the appointment of the agency’s head. As for the SBU, the European Commission demands that it be stripped of functions that do not properly belong to a security service, particularly investigative powers, and that its activities focus on counterintelligence, counterterrorism, cybersecurity and the protection of critical infrastructure. 2. Adoption of an anti-corruption strategy and reform of the High Anti-Corruption Court. Draft Law No. 15230 is intended to close many loopholes that allow corruption suspects to manipulate proceedings before the High Anti-Corruption Court, including methods of deliberately delaying cases. The anti-corruption strategy, for example, envisages selecting the Prosecutor General through an open competition. At present, the president appoints the Prosecutor General. 3. Joining the Single Euro Payments Area (SEPA) – the EU’s integrated system for euro payments. Draft Law No. 14327 explicitly provides for Ukraine’s accession to the single European payments area, which already includes 27 countries, including some that are not currently members of the Schengen Area. Limited progress so far The draft laws remain in parliamentary committees, and in some cases, one or two alternative versions have already been drafted alongside the original proposals. European officials are losing patience. For example, Ukraine reportedly risks losing a substantial amount of $29.5 billion in planned international aid financing if parliament misses deadlines for required legislation, according to Ukraine’s Prime Minister Serhii Koretskyi. The EU has moved to a new approach: no more advances. The law comes first, and the money follows. This applies to every required piece of legislation. So, what is the problem if these reforms are intended to make Ukrainian state institutions more effective? The reality is complicated so let’s examine the main reasons. The draft laws are unfinished and poorly prepared One reason is that some draft laws are still in a rough form and have not been adequately prepared. For example, the anti-corruption strategy was drafted by the National Agency on Corruption Prevention (NACP), and some members of parliament have openly said it needs further work. Some draft laws have been prepared by the government and still need to be brought into compliance with legislative requirements. The three bills mentioned above are among the main priorities. And even the approximately 35 laws required by the end of the year are merely a warm-up. According to estimates by lawyers and members of parliament, between 9,000 and 11,000 provisions must ultimately be brought into line with EU legislation. That is a huge amount of work in an environment where parliament is characterized by dysfunction. Fear of the elites? Strengthening anti-corruption efforts, eliminating procedural delays at the High Anti-Corruption Court, and joining the European payments system, are concerns for many members of parliament, influential financial and industrial groups, and their lobbyists. Ukraine is a country with a transitional economy, moving from the Soviet command-and-administrative system to a market economy based on private ownership. Amid the chaos of this transition – accompanied by the deterioration of Soviet institutions and the weakness of the newly established state apparatus – large areas of economic activity were left without proper legal regulation, while others were subjected to excessive regulation. This has led to blatant abuses and chaos in the former case, and to the search for corrupt “loopholes” to resolve issues quickly in the latter. Now, many people fear that past “sins,” income and payments could become a source of legal trouble. The same problem arises in connection with the work of anti-corruption agencies. Ten years ago, converting commercial premises into an office or residential property without changing the designated use of the land or building was not a problem. Now it could be. Examples can be found everywhere, from villages to parliament itself. Take lawmakers’ salaries, for example. Since Soviet times, these have been very low. In the USSR, members of parliament were largely nominal figures. The situation has remained much the same in independent Ukraine. No one has been eager to raise lawmakers’ salaries because doing so would be deeply unpopular, especially when pay does not increase significantly during wartime. Yet lawmakers do not want to take responsibility for drafting laws worth billions for next to nothing. Alternatively, they may take on that responsibility but also expect “bonuses” for drafting such laws. These payments began to be made through political parties, in cash-filled envelopes. Such practice constitutes a criminal offense, and the National Anti-Corruption Bureau of Ukraine (NABU) has drawn up dozens of cases against members of parliament involving precisely this practice. Yet the problem remains unresolved. Raising lawmakers’ salaries is politically unprofitable because it is unpopular, while they are unwilling to vote for government-backed bills for $1,000 – especially when those bills could potentially make their own lives more difficult. A question of power and stability Reforming the DBR, the SBU and the Prosecutor General’s Office runs up against rivalry among various law enforcement agencies. Through 35 years of independence, an informal division of responsibilities and a system of “checks and balances” have developed among them. Any changes are interpreted by each agency as an attempt to increase or expand the powers of its “competitors.” Adding fuel to the fire is the fact that both the DBR and the SBU fall under the president’s sphere of influence and strengthen his power. The president personally appoints the heads of these agencies. Critics argue that the DBR is sometimes used as an instrument of political pressure against the authorities’ opponents, since its jurisdiction includes top officials, members of parliament and judges. Would President Zelensky want to relinquish his influence over law enforcement agencies? That seems unlikely, as this is not merely about maintaining control over the situation – from surveillance of journalists, as happened with the SBU in 2023, to carrying out the president’s instructions, particularly those of his inner circle. It is also a question of state stability. With NABU and the Specialized Anti-Corruption Prosecutor’s Office (SAPO) outside the president’s direct sphere of influence, many people both on Bankova Street and in the Cabinet of Ministers fear that any redistribution of powers among the agencies could trigger another political crisis. ‘Europe does not want us, so why should we want Europe?’ One argument against these initiatives is Euroscepticism. Ukraine has long been “fed” promises of EU membership, with the prospect of accession repeatedly pushed further into the future. Meanwhile, some countries admitted to the EU between the late 1990s and the mid-2000s were in no better condition than Ukraine is today in terms of legislation and the effectiveness of their state institutions. This fuels a sense among many Ukrainians that the EU is simply stringing Ukraine along with empty promises. Kyiv Post once asked a member of the European Parliament, “When will Ukraine become an EU member?” “Immediately after Turkey,” the lawmaker replied optimistically. “And when will Turkey join?” “Never!” That was 20 years ago, and the situation has still not changed. As a result, many people from different social backgrounds believe that reshaping the country to satisfy the EU – which, in their view, Ukraine will not join anytime soon, if ever – may not be worth the effort. Ukraine’s parliament will continue its work, yet – for now at least – not on the EU-needed Bills.