European institutions require Ukraine, Moldova and Georgia to eliminate oligarchic influence on national decision-making processes. Such an approach is part of the political conditions, the fulfillment of which depends on the transformation of the European perspective into a feasible accession process. The European Commission’s findings on candidate status recommended that the three countries begin a process of “deoligarization” in order to move forward. The problem of oligarchs is not accidental at all. The phenomenon of oligarchization of decision-making has had a destructive effect on democratic institutions in each of the three countries (IPN, May 2021). Georgia is an example of the negative effects that the oligarchic factor still continues to have. Because of this, the European Union was forced to give Georgia only the qualifications of a potential candidate. As a result, the Georgian state was singled out from the “associated troika” and included in the category of countries with respect to which the EU has reservations and sets preliminary conditions, overcoming which is unlikely without a change in the ruling party.

Unlike the difficult situation in Georgia, where the authorities are accused of revolving around the oligarch Bidzina Ivanishvili, Ukraine is trying to subordinate local oligarchs, and Moldova wants to hold them accountable for crimes committed in the past. The anti-oligarch law, approved by Volodymyr Zelensky at the end of 2021, is currently in effect and is designed to identify oligarchs and limit their ability to interfere in the activities of the government. In Moldova, the leadership suspects that the fugitive oligarchs and their intermediaries (Volodymyr Plahotniuk, Ilan Shor and others) are not only sabotaging structural reforms through the old system, but also planning subversive anti-government actions, using public discontent and numerous crises. So, the political motivations in Ukraine and Moldova regarding de-oligarchization are different. In the first case, it is about creating a balance in the process of political management and, accordingly, eliminating spheres of influence of oligarchs on the Ukrainian economy and politics. The second seems to be dominated by a sense of political survival and security. However, Moldovan oligarchs strive for legal impunity and protection of economic resources, and not for integration, even forced, into the legal economic framework, as is observed in the case of Ukraine.

Targeting Eastern European oligarchs has an innovative nature that has not previously been applied to other candidate countries or countries with a European perspective. European institutions take this step because local circumstances allow it. In Ukraine, Russian aggression makes the government accountable and raises international risks of trust in the government and the quality of the reforms it carries out, including in terms of countering oligarchic influence. The Moldovan government is believed to be immune to interference by oligarchic actors, as it is seen as a stakeholder in purging public institutions of the remnants of informal governance from the last decade. Considering the fact that all political forces in Georgia that have political potential also have a pro-European orientation, the EU abandoned a restrained tone regarding Ivanishvili, whose influence can be compared to that of a “captured state”.

Sanctions of oligarchs

Ukraine has taken the most steps in the direction of de-oligarization. Initially, the anti-oligarchic law was viewed as a tool aimed at pro-Russian oligarchs led by former opposition leader Viktor Medvedchuk. He is currently in custody and is being investigated for treason. In April, the Court of Appeal of Lviv seized 154 items considered to be Medvedchuk’s property. Although it has been under evaluation by the Venice Commission since the fall of 2021, the anti-oligarch law still applies, and some oligarchs, such as Rinat Akhmetov, have given up their media monopoly to avoid being blacklisted by Ukrainian oligarchs .

Moldova is still dealing with the political and economic consequences of the activities of fugitive oligarchs and their intermediaries (Volodymyr Plahotniuk, Ilan Shor). Their economic resources, connections remaining in the country, as well as available political tools, keep the risk of their return in the event of a far-reaching political crisis. Actions of political destabilization of the country committed by fugitive oligarchs correspond to the geopolitical interests of Russia. In July, representatives of the US Congress referred to the Magnitsky Act in their appeal to President Joe Biden regarding the introduction of individual sanctions against Volodymyr Plahotniuk, Ilan Shor and Vyacheslav Platon. This will involve not only an entry ban (applied in the Plahotniuk case since 2020), but also the freezing of assets. The decision will be made by the end of 2022.

In the Georgian public space, the sanctions of the Georgian oligarch Bidzina Ivanishvili were often mentioned, but the first official step was taken by the European Parliament. In the resolution adopted on the eve of the publication of the EU’s verdict on the status of a candidate country, the European legislator emphasized that sanctions should be applied to Ivanishvili. Its influence is destructive both politically and economically, which negatively affects the independence of the judicial system and the viability of democratic institutions (persecution of journalists, members of the opposition, etc.).

Obligations of Ukraine, Moldova and Georgia regarding deoligarization

Moldova declared the most actions with the aim of de-oligarization. In accordance with the Action Plan adopted in August within the framework of the NCRECP, it is envisaged to develop a mechanism to exclude the oligarchic factor from the political, economic and public spheres. Foreign experience and recommendations of the Venice Commission will be taken into account. The Central Election Commission and the Broadcasting Council will be involved in the de-oligarization process aimed at financing political parties and influencing the mass media, respectively. Moreover, the expected assessment of state-owned enterprises regarding oligarchic influence. Some events are scheduled for November-December 2022, others for June 2023.

In Ukraine, an anti-oligarchy law is being implemented, which will be effective from September 2021. At the August meeting of the Commission on European Integration of the Verkhovna Rada, it was discussed the fulfillment of EU requirements, including in the field of de-oligarization. Thus, in order to implement the law, the NSDC and the Government must create a “register of oligarchs”. At the same time, the Ukrainian authorities are waiting for the recommendations of the Venice Commission, which will most likely be accepted by Kyiv in order not to harm the dialogue with the EU regarding the status of a candidate country.

Everything is tense in Georgia. The assessment of the fulfillment of the EU conditions was postponed to 2023 instead of the deadline of December 2022, which was originally set, including for Ukraine and Moldova. The Georgian authorities do not rule out the creation of a deoligarization law, but there is a lack of clear political will and a feasible plan of action. European politicians equate this process with the “debusinessization and de-Ivanization” of Georgia, and representatives of civil society believe that the creation of independent institutions in the field of the rule of law will in itself contribute to the de-oligarchization of the country. Read the entire article and comment on it at contributors.ro