Maru­shevska in stand­off with bosses in Kyiv

Yu­lia Maru­shevska is one of Ukraine's rising stars, but some­times it seems that she is fight­ing cor­rup­tion in Odesa's lu­cra­tive ports all alone. She says bosses in Kyiv are her big­gest ob­sta­cles to progress.

Kyiv Post Legal Quarterly - - News - By Iso­bel Koshiw koshiw@kyiv­post.com

ODESA, Ukraine – When Yu­lia Maru­shevska was ap­pointed head of the no­to­ri­ously cor­rupt Odesa cus­toms a year ago, there were high hopes in Ukraine and abroad that she’d soon clamp down on shady schemes at the coun­try’s big­gest ports.

Maru­shevska, a for­mer mem­ber of the team of Odesa Gover­nor Mikheil Saakashvili, rose to promi­nence as an ac­tivist in the Euro­maidan Rev­o­lu­tion. Her face was fa­mil­iar as the star of the "I am a Ukraine" video, viewed 8.7 mil­lion times. She also had a squeaky-clean rep­u­ta­tion which, a year later, re­mains in­tact.

But hopes that she’d pro­duce rapid re­sults are fad­ing.

That’s not to say she hasn’t made some progress: 37 coun­tries with ad­vanced cus­toms pro­ce­dures (mostly ones from the Euro­pean

Union) have been in­cluded on a “Golden List” for ex­pe­dited cus­toms pro­cess­ing.

Com­pa­nies im­port­ing to Ukraine from one of the Golden List coun­tries can spend as few as 15 min­utes, and no more than one hour, un­der­go­ing cus­toms regis­tra­tion of their goods. Be­fore, they'd spend up to five hours.

A new mod­ern cus­toms ter­mi­nal, which will house one of eight depart­ments at Odesa Port and that will be staffed en­tirely by new, bet­ter-paid staff, is near­ing com­ple­tion. And many of the crim­i­nal schemes in­volv­ing pri­vate ware­houses and lo­gis­tics ter­mi­nals sur­round­ing the Odesa port have been sharply cur­tailed through car­ry­ing out full cus­toms regis­tra­tion on the spot, in­side the port.

How­ever, it's far from cer­tain if the changes that Maru­shevska has pushed through, and her pilot project, which will de­but in the new ter­mi­nal, will sur­vive over the long term. If any­thing, her team's pres­ence and attempts to shake up cus­toms con­trols have high­lighted the en­dur­ing strength and ex­tent of cor­rup­tion in the Ukrainian state.

The schemes that prey off busi­nesses who lack con­nec­tions or refuse to pay bribes, as well as dozens of bu­reau­cratic at­tacks against Maru­shevska, lead back to the high­est lev­els in Kyiv.

Ro­man Nasirov, Maru­shevska’s boss and head of the State Fis­cal Ser­vice, has been her main bane, although many more high-rank­ing of­fi­cials from a range of bod­ies have been in­volved in attempts to block her re­forms, she says.

Nasirov has ten­ta­tively agreed to an in­ter­view with the Kyiv Post, but it was not yet sched­uled by the time this Le­gal Quar­terly went to print.

The sheer num­ber of in­ter­ests work­ing against her means she will prob­a­bly have an even tougher year ahead, es­pe­cially if the me­dia spot­light on her work dims.

Pilot Project It's been one year since the pilot project be­gan – and five months since it was due to launch.

Known as the Open Cus­toms Space, its goal is to en­tirely trans­form one depart­ment out of eight at Odesa Port, the big­gest of the five ports in Odesa Oblast.

A new, al­most com­pleted, mod­ern ter­mi­nal build­ing will house 130 new staff who have un­der­gone special train­ing pro­grams, in­clud­ing with U.S. cus­toms spe­cial­ists. They will use the “one win­dow” prin­ci­ple, by which if a com­pany has all the nec­es­sary and cor­rect doc­u­men­ta­tion, it should have its clear­ance car­ried out by a sin­gle cus­toms of­fi­cial in one place.

If the Cab­i­net of Min­is­ters signs the de­cree re­quired to open the new ter­mi­nal, the new cus­toms of­fi­cials will be paid Hr 10,000 a month – about $400, or around four times the amount a cur­rent cus­toms in­spec­tor earns.

The de­cree will also ap­prove the in­tro­duc­tion of a new in­for­ma­tion tech­nol­ogy sys­tem in the ter­mi­nal, and au­to­mat­i­cally ap­prove its use else­where in Ukraine.

The sys­tem’s soft­ware, named ASYCUDA, was pro­vided free to

Hos­til­ity from Nasirov Nasirov, de­spite ini­tially vow­ing to sup­port Maru­shevska’s ini­tia­tives, has since been hos­tile to all of the pro­posed changes at Odesa Port, ac­cord­ing to Se­mon Kryvonos, the deputy head of Odesa cus­toms.

Nasirov's dis­rup­tion of their work has in­cluded a slew of of­fice searches by of­fi­cials from Kyiv due to al­leged le­gal vi­o­la­tions, Kryvonos told the Kyiv Post, say­ing these were attempts to have mem­bers of the new team dis­missed. He de­scribed how one week, seven sep­a­rate groups of in­ves­ti­ga­tors from the State Fis­cal Ser­vice turned up to search Odesa cus­toms’ of­fices.

"There wasn't enough space to seat them all," said Kryvonos. "They even du­pli­cated what they were do­ing. In the end, two groups filed ex­actly the same com­plaint, word for word, copy and paste."

Nasirov has so far rep­ri­manted Maru­shevska four times. Prime Min­is­ter Volodymyr Groys­man dis­missed three dur­ing his visit to the port in May. Three rep­ri­mands are usu­ally enough for of­fi­cials to lose their job. Asked why Nasirov hadn't fired her, Maru­shevska told the Kyiv Post that he is afraid to do so, be­cause she was ap­pointed by Saakashvili and Pres­i­dent Petro Poroshenko.

The lat­est clash be­tween the of­fi­cials in Odesa and Kyiv has led Maru­shevska to take Nasirov to court: Nasirov re­fused to ap­prove Maru­shevska’s can­di­date to head the pilot project, Ro­man Bakhovskyy, who pre­vi­ously headed po­lice re­form in Lviv.

In­stead, Nasirov has at­tempted to ap­point his own peo­ple through non-trans­par­ent com­pe­ti­tions, ac­cord­ing to Maru­shevska.

Bakhovskyy is, mean­while, work­ing as the deputy head of the project, the high­est po­si­tion to which Maru­shevska can ap­point him with­out Kyiv’s ap­proval. Maru­shevska is also claim­ing in court that Nasirov is block­ing dis­ci­plinary pro­ceed­ings against cus­toms of­fi­cials sus­pected of cor­rup­tion. The court hear­ing is set for Sept. 28.

The main prob­lem is, ac­cord­ing to Bakhovskyy, that ev­ery­thing is still cen­tral­ized and must be ap­proved by Kyiv. "If you’re in the mid­dle of the ver­ti­cal of power, which is where we are, it's re­ally hard to make moves," added Maru­shevska.

Saakashvili has staged two high-pro­file raids of de­pots hold­ing con­fis­cated nuts in Odesa Oblast in the last six months.

In both cases, the nuts were con­fis­cated in Odesa on the or­ders of a Kyiv pros­e­cu­tor by the SBU, Ukraine’s se­cu­rity ser­vice. The deputy head of the SBU, Pavlo Dem­chyna, has been ac­cused by Saakashvili of run­ning the nut ex­port­ing scheme.

In the lat­est case in April, as a con­tainer was sur­rounded by heav­ily armed and masked special ser­vices men, Saakashvili told the men in front of a crowd of jour­nal­ists that this was out­right rob­bery, and suc­cess­fully re­turned the ship­ments to the own­ers.

Groys­man an­nounced in May that he would rid the coun­try of the nut mafia and their "tax squir­rel­ing" ways.

Dur­ing his May visit, Groys­man be­haved like a man who could make any­thing hap­pen, and showed off by em­bar­rass­ing Nasirov in front of a crowd of jour­nal­ists. Groys­man has since made sev­eral big shows about get­ting rid of cor­rup­tion in cus­toms, but they've yet to amount any­thing con­crete.

The de­cree on open­ing the new ter­mi­nal has still not been signed, the nut mafia is still op­er­at­ing and Maru­shevska’s con­flict with Nasirov has only got­ten worse. in Kyiv or else­where, while ac­tu­ally tran­sit­ing them through Odesa.

Maru­shevska has in­tro­duced cus­toms du­ties by con­tract for large tax pay­ers, and this has been re­ceived pos­i­tively by those af­fected. She re­ported on Sept. 1 that there was an in­crease in rev­enues of Hr 242 mil­lion ($9.68 mil­lion) in Au­gust 2016 (to a to­tal $50 mil­lion) com­pared to Au­gust 2015, and that 650 new com­pa­nies had started to use Odesa cus­toms since the be­gin­ning of the year.

She also in­tro­duced a helpline for those do­ing business at the port, which they can also use to re­port cor­rup­tion. But Bakshi says that re­port­ing cor­rup­tion only leads to be­ing black­listed by lo­cal cus­toms of­fi­cials, so most won’t bother. He also said that many larger busi­nesses are able to ne­go­ti­ate their cus­toms du­ties at the top lev­els, which means they are able to out-com­pete smaller im­porters.

Mean­while, the low wages paid to cus­toms of­fi­cials are still en­gen­der­ing cor­rup­tion.

"Yes there are fewer checks," said Vadym Se­dov, a se­nior cus­toms of­fi­cial who led the Kyiv Post on a tour of Odesa port. “But you can’t talk about (tack­ling) cor­rup­tion. Would you work for $100 a month? Un­til you sort out the salaries you won't solve a thing."

The 200 cus­toms staff who cur­rently work shifts at the port, along with oth­ers in the re­gion, are likely to lose their jobs if mo­men­tum for change at the port builds, mean­ing they’ll miss out on any pay in­creases. How­ever, the best of them will be re­tained, says Maru­shevska. For now, Maru­shevska says she is do­ing what she can. “Of course we’re just at the start of a long road to a com­plete change in the Odesa cus­toms sys­tem, be­cause we’re work­ing with ex­ist­ing pro­ce­dures and leg­is­la­tion,” said Maru­shevska. “We’re just us­ing a force of will to change the mid­dle man­age­ment.”

Yu­lia Maru­shevska is the head of the Odesa Oblast cus­toms ser­vice, reg­u­lat­ing the traf­fic of goods in one of the na­tion's busiest and most cor­rupt Black Sea port cities. (Volodymyr Petrov)

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