“Oligarchs Bill" to translate into sale of media outlets - ZN.UA insight

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“Dzerkalo Tyzhdnya” (zn.ua) edition got acquainted with the text of the bill "On Oligarchs" (elaborated by a working group in the Ministry of Justice) and looked insight its main provisions, as “Dzerkalo Tyzhdnya” reported.

According to the worded concept, an oligarch is a person who at the same time:

“1) is involved in political life;

2) has a significant impact on mass media;

3) exercises control over a significant amount of economic activity ”.

Being involved in political life means: holding a high position in the government apparatus (from the president to the head of any central executive body), relations to a high-ranking official, funding or direct leadership of the party or simply control over mass media, which "disseminates political news" . 

"That’s it, "or". That is, according to the logic of the bill, even if you are just a media owner who produces political news, you are already on the hook, because you immediately meet two criteria - "politics" and "media" - of the three required. "It is left only business and they are to set up a combination to get it directly affected by this law," the newspaper writes.

The "business" criterion will be met by: final beneficiaries of natural monopolies, monopolists (50% for a year in a row) of commodity markets or simply owners or beneficiaries of assets worth more than a million minimum wage (at present, UAH 2.27 billion, or USD 84 million). 

Not so much, given that most of the major Ukrainian mass media belong to people in the top 100 by Forbes. And if we take into account that the value will be determined by the total size of all assets to which the potential oligarch is related, and not the shares he has in possession, the "oligarchs lists" will easily be expanded to the top 200 and top 300. That is, the conditional Tomas Fiala, whose company owns a bunch of assets and two influential media outlets, which are, in fact, engaged in "disseminating information of a political nature", is completely at the end of a gun. By the way, the bill says not a word about the citizenship of the oligarchs,” the edition noted

According to the bill, the decision to recognize a person as an oligarch is made by the National Security and Defense Council of Ukraine on the basis of a proposal from the Cabinet of Ministers, a member of the National Security and Defense Council, the National Bank, the Security Service or the Antimonopoly Committee of Ukraine. 

An officially recognized oligarch will be included in the Register of persons who have significant economic and political weight in public life (oligarchs).

Legal consequences of entering the register:

“1. Persons included in the register are prohibited from:

-making contributions (directly or indirectly through other persons) in support of political parties in accordance with the Law of Ukraine “On Political Parties in Ukraine”;

-being a beneficiary (including owned) or a supervisor of a mass media spreading political information;

-being a buyer (beneficiary of the buyer) in the process of privatization of large privatization entities.

2. Persons included in the Register shall submit a declaration of a person authorized to perform the functions of the state or local self-government in accordance with the procedure established by the Law of Ukraine “On Prevention of Corruption”.

“Thus, the next step after the adoption of this bill should be a big sale of Ukrainian mass media. This is curious to note, other assets, which, in fact, bring the main cash flow, the oligarchs can keep them intact. Let them continue to get rich, the main thing is they sold one’s mass media, and almost for nothing. Or let them force their media to refuse to disseminate political news, and according to the bill this is about "covering, analyzing or discussing the activities of public authorities, state bodies, local governments, political parties, MPs and other members of collegial public authorities." So there is no much choice: either to turn it into a great mix of gossip columns and criminal chronicles with funny papers to finish with, or to sell it out, ” the edition said.

At the same time, the sale of the mass media outlet will immediately allow the oligarch to quit the register, albeit with the condition:

"An attribute of significant influence on mass media is not considered to be non-existent, if the status of the beneficiary (person who exercises the control over mass media edition) of the relevant media has passed from the person included in the Register to a related person or a person who does not have an impeccable business reputation."

But a trustworthy buyer, according to the project, will no longer be recognized as an oligarch, even if after the acquisition of the media he will meet the same "oligarchic" criteria, the main thing is to prove his impeccable reputation.

According to the norms, a person's business reputation will not be considered as impeccable under the following conditions:

1) the person has a criminal record that has not been expunged or removed in the manner prescribed by law;

2) application by Ukraine, foreign states (except for states carrying out armed aggression against Ukraine), intergovernmental associations or international organizations of sanctions against a person (applied during the term of sanctions and within three years after their abolition or expiration of the term for which they were imposed) introduced);

3) inclusion of a person in the list of persons connected with terrorist activities or in respect of whom international sanctions have been applied (applied during the period when the person is cited in the list and within 10 years after his exclusion from it);

4) deprivation of a person of the right to hold certain positions or conduct certain activities in accordance with a sentence or other court decision (applied during the term of such punishment);

5) improper performance by a person of obligations to pay taxes, fees or other obligatory payments, if the total amount of non-payment is equal to or exceeds 100 times the minimum monthly wage established by the legislation of Ukraine for the period in which the violation was committed, or equivalent foreign currency (applied during the term of this violation and for three years after its elimination);

6) acquisition (intention to purchase) a mass medium at a price that is significantly inferior to its market price, or for funds whose source of origin is not documented;

7) significant and / or systematic violations by a person of the requirements of the legislation on mass media, banking, financial, currency, tax legislation, legislation on financial monitoring, legislation on securities, joint-stock companies and the stock market.

As IMI reported, at a press conference on May 20, Ukrainian President Volodymyr Zelensky said that the deoligarchisation bill which is to be issued next week, in particular, would weaken the oligarchs' influence on mass media. The head of state said it at a press conference on May 20.

A special register of oligarchs will be launched in Ukraine, the head of state said.

"I think this bill will appear next week. There will be no influence on mass media, politics, officials. But if there is, then these people will appear in a special register. Then this business will lose part of its assets abroad, the price of these assets will be reduced not due to sanctions of Ukraine, but due to the appearance in the law of the concept of "oligarch", - said Zelensky.