IMF, Ukraine identify benchmarks under new Stand-By Arrangement

The benchmarks include the adoption of a number of laws in the financial and banking sectors, the continuation of anti-corruption efforts, the promotion of reforms in the field of privatization, Ukrinform reports.

 “We will move forward with legislation that is critical to create a sound operating environment for the development of our financial markets,” reads the analytical report of the IMF regarding a new Stand-By Arrangement for Ukraine and cancellation of arrangement under the Extended Fund Facility.

To this end, the IMF expects the Parliament of Ukraine by end-March 2019 to adopt the law #2413a, which will deprive the National Commission for State Regulation of Financial Services Markets of supervisory responsibilities and distribute them between the National Bank of Ukraine and the National Securities and Stock Market Commission.

Moreover, the IMF and the World Bank promise to agree by end-March 2019 on the amendments to the law on banks and banking in Ukraine for addressing the “legislative gaps”. The Fund expects the Parliament of Ukraine to adopt by mid-2019 a number of financial sector laws, notably laws on derivatives and financial markets, consumer protection and money transfers.

The IMF pays particular attention to the efforts to tackle corruption in Ukraine. “It is critical that the new anticorruption institutions— the National Anticorruption Bureau of Ukraine (NABU), the Special Anticorruption Prosecutor’s Office (SAPO), and the High Anti-Corruption Court (HACC) — maintain their independence and integrity,” the Fund underscores.

The IMF expects that least thirty-five anti-corruption judges “with impeccable reputation and relevant professional skills” will be appointed to the HACC in line with law 2018/2447, and with rules of procedures guaranteeing the objectivity and transparency of the process by end-April 2019. In addition, the IMF expects the HACC to begin its operations by end June 2019.

As for NABU, the IMF expects an external audit of the NABU by a panel of respected experts with international experience to be finalized. The Fund experts also hope that the Parliament of Ukraine will adopt legislation to strengthen the powers of NABU by end-June 2019.

Moreover, the IMF identified the following benchmarks in further cooperation with Ukraine: the need for significant progress in the process of privatization and reform of state-owned enterprises; further strengthening of management in the banking sector.

As reported, on December 18, 2019, the Executive Board of the International Monetary Fund approved a 14-month Stand-By Arrangement (SBA) for Ukraine worth a total of $3.9 billion.  The SBA provides for the disbursement of three tranches. Two tranches to the tune of $2.6 billion are to be provided by the end of 2019.