The anti-oligarch law in Ukraine: a necessary measure, or a step towards an authoritarian regime?

The anti-oligarch law in Ukraine: a necessary measure, or a step towards an authoritarian regime?
© EPA-EFE/SERGEY DOLZHENKO   |   Ukrainian President Volodymyr Zelensky answers questions of journalists during his press conference in Kyiv, Ukraine, 23 April 2022, amid Russian invasion.

In recent years, Ukraine has taken a series of measures to secure its information space, affected both by Russian manipulation and disinformation campaigns, and by the influence of some oligarchs pursuing their own interests. The measures include a law aimed at taking the media away from the control of oligarchs. The effect has been more state control over the media, and the question arises whether it is a temporary situation, justified by the war, or a regression of Ukrainian democracy.

The law that eliminates the oligarchs’ control over the media

On September 23, 2021, the Ukrainian Rada adopted the Law “on the Prevention of Threats to National Security Related to the Excessive Influence of Persons who have Significant Economic or Political Weight in Public Life (Oligarchs)” (No. 5599). The document was voted by 279 Ukrainian deputies, after being amended several times. According to an analysis published by the Center for Eastern Studies in Warsaw  (February 2019), approximately 60% of the media market in Ukraine was serving political interests. According to the initiators of the anti-oligarch law, the purpose of the new bill was to limit the influence of a small group of businessmen on political life or on some economic decisions, thus minimizing internal threats to national security. Basically, the law deprived the oligarchs of the possibility, through the media resources they had at their disposal, to launch narratives and influence public opinion as their interest dictated.

Persons in key public positions were also targeted by the law, being obliged to declare whether they had connections with large circles of economic interests. The new legislative framework also regulated their relationship with the oligarchs. Having connections with a certain oligarch became a reason for resignation. The adoption of this law was one of the promises made by Volodymyr Zelensky in the election campaign.

Later, other documents were adopted, necessary for the proper implementation of the law and the creation of a special register of oligarchs. Thus, in the middle of the war, on June 29, Volodymyr Zelensky signed the decision of the National Security and Defense Council of Ukraine  to create a register of oligarchs. The new legislative framework, intensively debated in the previous year, was accompanied by necessary explanations and clarifications regarding the criteria for inclusion in the register. They boiled down to two main theses: oligarchs are not allowed to participate in the privatization of large companies and cannot finance political parties. The “ultimate beneficiaries” of the law remained to be identified. In wartime this has become more difficult to manage. The authorities insist, however, that they cannot ignore the fact that the law has been in force for several months and its provisions must be respected. Moreover, according to the Minister of Justice of Ukraine, Denys Maliuska, the implementation of the anti-oligarchic normative framework is one of the conditions imposed by the European Union for the start of accession negotiations.

The fears of the Ukrainian oligarchs became a reality with the creation of the register and the final clarifications on the criteria for inclusion in it. The Secretary of the National Security and Defense Council of Ukraine ,Oleksiy Danilov, said on July 12 that the creation of the register was based on four criteria: accumulated wealth, currently the lower limit is 80 million dollars, political influence, media assets owned, monopoly – natural or artificially created. If three out of four criteria are met by a person, then they can be included in the register.

The Ukrainian state is about to become a media mogul

On July 20, 2022, Oleksiy Danilov wrote on social media that 86 people were falling under the scope of the oligarch law, adopted in the second half of 2021. Danilov did not elaborate on the names of those individuals, but media speculation referred to both Ihor Kolomoiski and other businessmen, such as Rinat Akhmetov, who built “empires” in certain sectors of the economy, including media. The latter is considered to be the richest man in Ukraine, even though his business has been greatly affected by the Russian war against Ukraine, with a large part of the assets he controls being geographically located in the east of the country. Akhmetov's position was extremely relevant at certain times before, but also after the annexation of Crimea in 2014 (some experts associated the presence of Akhmetov or Kolomoiski in the Eastern regions of the country with the Russians’ inability to expand the perimeter of the two separatist regions). Rinat Akhmetov, like other Ukrainian billionaires, refuses to be associated with the concept of “oligarch”.

Under the current legislation, oligarchs have six months to sell their media assets, which is difficult to achieve in the context of the Russian war against Ukraine. Investors are not in a hurry to take risks, and this is not only true for Ukraine, but also for its neighboring countries. And because a sale is impossible under the above conditions, Rinat Akhmetov has announced that one of his companies, Media Group Ukraine, will hand over the licenses for television and print media channels to the Ukrainian state. Thus, approximately 4000 people, employed within the press trust controlled by his companies, have lost their jobs. Some of the journalists from this trust were previously collaborators of the ZIK channel, which was acquired by the group owned by Medvedciuk - a pro-Russian oligarch who is currently in the custody of the Ukrainian authorities after being detained while trying to leave Ukraine illegally. With the change of ownership, the editorial policy of ZIK also changed, and journalists who did not want to be associated with pro-Russian propaganda resigned. Now these journalists have lost their jobs for the second time.

Thus, under the pressure of the war and the legislation that has come into force, the state is turning into a media mogul, that is, it’s becoming a kind of oligarch. Obviously, the situation is unusual, which would not have happened in peacetime. At least that's what most Ukrainians think. But the question arises whether this state will be able to give up, immediately after the war, that part of the normative framework that limits fundamental freedoms? And if the answer is no, then another question arises: what behavior will Ukrainian civil society adopt to keep its political representatives under the microscope? Ultimately, Ukraine remains a strange country not only for the Russians who cannot understand why they could not conquer its people, but also for others, who cannot help but notice that just one politician managed to win two presidential terms in Kyiv – Leonid Kuchima.

These observations are relevant in the current political context of Ukraine. Volodymyr Zelensky not only regained his previously lost popularity, but, amid the war, he managed to increase it. That means two things: He has a strong chance of becoming the second president to win a second term, and he's the candidate most eyes are on. Any decision made now may matter in the next election. However, the laws, even those adopted during wartime, are made for future generations, not for the current ones. So, responsibility is even greater.

Necessary measures in time of war, or a regression of democracy?

In the first months of the war, the authorities in Kyiv adopted several extremely important decisions for the future of the country. Many of those regarding national security and defense have also limited many fundamental freedoms and rights.

In peacetime, such decisions are sanctioned by citizens and civil society. In times of war, the voter is no longer so attentive to the quality of the legislative act, opting for quick, immediate decisions, without public debates announced in good time. The main problem, however, returns after the war: how do we bring freedom of expression back to the attention of the authorities, for example? And this in the conditions in which the state is gradually turning into the main monopolist over the means of mass information? Will it be easy for it to cede positions and control over the information space? We all know that Volodymyr Zelensky's relationship with the press has been quite complex, if not complicated. If we also add here the misunderstanding of the role of civil society, which is not only a watchdog, but one that should come up with alternative solutions and recommendations for public policies and reforms and to prevent hasty decisions regarding the country's national interests, then we can already anticipate difficult moments of reflection for a popular president like Zelensky.

Volodymyr Zelensky's current support and popularity is due to his behavior as a wartime leader. Zelensky was able to be firm when few expected it. But in addition to the pledges to bring the victory day closer, President Zelensky has taken it upon himself to bring Ukraine closer to the European Union. This means an exemplary democratic course and the fulfillment of the conditionalities proposed by the European Union. Brussels also understands the need to secure the information space - basically, in recent years it has been obvious that Russia has been trying to exploit vulnerabilities including in the West, which has more than once been the target of fake news, disinformation and manipulation campaigns. However, the fundamental values ​​of the European Union are not negotiable, so efforts to secure the information space must not affect freedom of expression or freedom of the press.

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