Wealthy and independent antimonopoly authorities are a key tool for protecting economic competition and fighting oligarchs in particular. Today, there are several bills in parliament that define the procedures for appointing and dismissing the leadership of the AMCU. Will they be able to ensure the Committee's political independence?
Why reform is needed
Antitrust law reform is among Ukraine's commitments to the European community on the way integration into the EU, as well as before the International Monetary Fund.
But above all, Ukraine needs this reform. After all, competition ensures overall economic efficiency and better goods and services for consumers. The key to reforming the work of the Antimonopoly Committee of Ukraine (AMCU) is draft law No. 5431, which introduces the first stage of the reform of legislation on the protection of economic competition.
At the second stage of the reform, the key changes are:
- conceptual apparatus (concerted actions, dominant position and abuse of it);
- obligations on concentrations;
- procedure for the appointment of state commissioners;
- creation a separate antitrust court;
- ensuring the institutional independence of the AMCU
One of the first steps in reforming the work of the AMCU should be to ensure the political independence of the work of the Committee. In the Memorandums with the IMF for 2020 and 2021, one of the main obligations of Ukraine is to ensure “transparency, competitiveness and protection from political interference in the processes of appointment and removal from office of the head of the AMCU and state commissioners.”
In turn, EU Council Directive 2019/1 of 11 December 2018 determines that Member States ensure that the selection, engagement or appointment of the leadership of national competition authorities takes place in accordance with clear and transparent procedures predetermined in national law .
Today, there are four draft laws in the Verkhovna Rada regarding the procedures for appointing the chairman, his deputies and state commissioners of the AMCU:
- draft law No. 2370 of January 14, 2020;
- bill #2151 of September 17, 2019;
- bill #3779 of July 2, 2020;
- bill #4122 of September 18, 2020
What changes in the appointment and dismissal procedures are proposed by the draft laws that are in Parliament, read on.
What is the independence of the AMCU
Independence is such an institutional structure that minimizes the influence of politicians on the decision of a certain body. The AMCU (similar to the National Bank) should be a technocratic body and, above all, take care of the public interest, and not implement “party policy”.
An important part of independence is the procedure for appointing and dismissing the leadership of the AMCU. Yes, the appointment should be based on a transparent competition. At the same time, there must be an exhaustive list of grounds for dismissal. In addition, it is desirable that the appointment and dismissal does not depend on one person – for example, that the law provides for the consent of Parliament to such steps. This is the first, external, level of independence.
The “second level” of independence of the AMCU is its internal organization on the principle of collegiality. It limits the influence of the head of the Antimonopoly Committee of Ukraine on state commissioners so that they can freely express and defend their professional opinion.
In practice, this is implemented in such a way that the head of the AMCU and his deputies are only “first among equals” – they are at the same time state commissioners, but they perform some additional organizational functions (today the AMCU has a first deputy, a deputy and 5 state commissioners). The head cannot dismiss the commissioners – the president does it. At the same time, the prime minister appoints them to the post on the proposal of the head of the Antimonopoly Committee of Ukraine.
Inconsistency with the Constitution
According to Article 85 of the Constitution, the head of the Antimonopoly Committee of Ukraine is appointed by the Verkhovna Rada on the proposal of the Prime Minister. However, Article 9 of the law on the Antimonopoly Committee determines that the Head of the Antimonopoly Committee is appointed and dismissed by the President with the consent of the Parliament. Therefore, the Law on the AMCU should be consistent with the Constitution.
In addition, an open competition should be introduced for the positions of state commissioners and the head of the AMCU. What do the bills propose?
- Draft Law 2151 harmonizes the AMCU appointment procedure with the Constitution and proposes an open competition. However, it does not contain a procedure for forming a tender commission and holding a tender (this should be determined by the Cabinet of Ministers). Therefore, it is not clear how “involving” businesses and the public in the competition will look like in practice (at the same time, the very idea of their participation is positive).
- Bill 2730 describes the competitive selection procedure in much more detail, but does not eliminate the inconsistency of the procedure appointment of the Constitution.
- Bill 3779-1 introduces a constitutional appointment procedure, but does not provide for competition.
Regarding the dismissal of the head of the Antimonopoly Committee of Ukraine, there are big disagreements between the bills. In particular, bills 2730 and 2730-2 reduce the independence of the AMCU, since they provide for the dismissal of its chairman “on a general basis”.
The grounds for dismissal are written out in most detail in draft law 2151. However, in any case, a clause on violation of the “anti-oligarchic” law on declaring contacts with oligarchs or their representatives will need to be added to the grounds. It is not yet clear how exactly this provision will work, but it is provided for in all laws that determine the activities of state bodies, which, in theory, can be influenced by oligarchs. This provision will do more harm than good, but a topic for a separate discussion.The procedures for the appointment and dismissal of state commissioners (one of which is the head of the AMCU) are similar to those proposed for the chairman. However, bills 2730 and 2730-2 introduce additional and unnecessary restrictions on state commissioners.
Yes, it is not clear why it is necessary to determine the number of commissioners with an economic or legal education by law, and why it is impossible to choose commissioners with other education, but relevant work experience. And draft law 2151 generally proposes to select authorized persons only from those who already have experience in the AMCU.
This significantly narrows down the set of possible candidates and actually makes the AMCU a closed system. And in closed systems it is very difficult to carry out reforms, even if they are necessary.
However, a positive feature of the bill 2151 is the transfer of powers to release state commissioners from the president to the Verkhovna Rada. This will increase the Committee's independence.
There is no ideal bill yet
None of the bills is perfect – they contain both positive and controversial proposals. I hope that while working on this reform, the parliament will be able to turn out a bill:
- bring the appointment procedure in line with the Constitution;
- complicate the dismissal by introducing parliamentary consent to it;
- will introduce an open competition for the position of state commissioner and chairman with public participation;
- will not contain formal education, but relevant work experience in the criteria for evaluating candidates.
