What will Paradise Papers mean for Ukraine?
I have great doubts that the information published in Paradise Papers leak will have any consequences in Ukraine. After all, let us recall the previous case with Panama Papers - none of the facts that the previous leak exposed led to any serious investigations on Poroshenko’s offshore efforts, and there were no moves by law enforcers and anti-graft watchdogs.
As it turned out, the case of Ukrtransgaz, the company that featured in Paradise Papers, had already been investigated by Ukraine’s law enforcement, starting 2016. But apparently, the prosecutor's office or other structures made no conclusions from the journalists’ investigative reports.
It is important to note that in relation to Roshen and Poroshenko, we have clearly heard the phrase from the documents sent by Roshen lawyers to the intermediaries on the Island of Maine, about "tax purposes", not a "blind trust".
Therefore, here comes the big question. Will law enforcers take Paradise Papers into consideration? Will there be an actual investigation? Or will there be another claim of the lack of evidence and that “offshore deals are not a crime”? That is, the question is, will the focus be shifted toward the idea that this is only about political responsibility of individual politicians rather than an actual criminal liability for tax evasion.
It is important to note that in relation to Roshen and Poroshenko, we have clearly heard the phrase from the documents sent by Roshen lawyers to the intermediaries on the Island of Maine, about "tax purposes", not a "blind trust". Thus, the emphasis has been put. Hence, the questions toward President Poroshenko. Therefore, the prospects of his second presidential term may become questionable, since such allegations undermine his legitimacy and authority.
However, on the other hand, the Ukrainian case in the general bulk of Paradise Papers takes up only a tiny share. A much larger array of information relates to the world’s top politicians, including the royal families, the Trump administration, and such. And if the West points at the Ukrainian authorities claiming that Ukraine’s officials have evaded taxes, Kyiv can in the same manner claim to the Trump administration that half of the U.S. cabinet, or even more, evade taxation, starting with Rex Tillerson.
Poroshenko’s sympathizers will point out that the opposition is trying to politicize Paradise Papers, and that the documents are ambiguous, that the question of "tax purposes" does not mean tax evasion.
Therefore, one cannot unequivocally predict the consequences for the Ukrainian authorities, whether the crime is established, or there facts present that could lead to a major investigation or impeachment. This is just one of the elements of the general picture related to the fight against corruption.
Poroshenko’s sympathizers will point out that the opposition is trying to politicize Paradise Papers, and that the documents are ambiguous, that the question of "tax purposes" does not mean tax evasion, that the phrasing has been translated incorrectly, that Süddeutsche Zeitung’s journalists misunderstood the essence of the situation with Ukrainian officials, and so on.
Although, in fact, the very fact that Ukrainian officials came into a spotlight of Paradise Papers, and certain businesses and motivations have been clearly indicated, means that these cases should be investigated, and brought to a completion. A question should be clearly answered, what motivation Roshen’s management had in its correspondence with the company from the Isle of Man, what motivation the officials had, who were formally or informally involved with the creation of offshore companies and the withdrawal of funds to these companies’ accounts, and whether these facts constitute the crime committed by certain officials.
If this is not done, the credibility of the anti-corruption campaign by the Ukrainian authorities will be undermined, while the population will be less inclined to believe in the slogans on combating corruption.
Vitaliy Kulyk is a director at the Research Center for Civil Society Problems