European Commission Warns Ukrainian Government on Reducing Politically Exposed Persons (PEP) Status to Three Years

The European Commission has sent an official warning to the Ukrainian government, highlighting that the proposal to shorten the status of politically exposed persons (PEP) to three years is controversial and does not comply with European integration requirements. In a letter from one of the Commission's departments, the necessity for further consultations before adopting the relevant regulations was emphasized.

According to information published on the 'European Truth' website, the draft law No. 15112−1, which pertains to the taxation of international parcels, includes a provision that limits the PEP status to three years after the end of an individual's term in a significant state position. This also involves the cancellation of exemptions for international parcels valued up to 150 euros.

The European Commission underscored that these changes represent a deviation from the so-called '7 steps,' which are key requirements for Ukraine's integration into the European Union. They warned that such actions could negatively impact Ukraine's EU accession process. It is important to note that the provisions regarding PEP are not linked to the conditions set by the International Monetary Fund (IMF), particularly concerning the cancellation of VAT for international parcels.

Additionally, the draft law proposes to recognize employees of state banks engaged in financial monitoring as PEP and require them to declare their assets. The European Commission characterized this step as unfounded, raising further questions about the appropriateness of such changes.

In light of these circumstances, the European Union recommends that Ukraine consider all remarks and conduct additional consultations. 'To ensure that all EU remarks are taken into account, I recommend holding further consultations with us regarding this draft law before its adoption,' the letter stated.

Ukrainian Deputy Prime Minister Taras Kachka confirmed that discussions on this issue are ongoing and that changes regarding the three-year status have already been proposed in parliament. 'On Tuesday morning, the parliamentary committee already modified the three-year provision. We are currently in discussions on how to resolve this legislative task, and I am confident that as a result of these consultations, we will find an acceptable solution,' the Deputy Prime Minister commented.

Thus, the situation surrounding the PEP status in Ukraine remains tense, and the subsequent actions of the Ukrainian government could significantly impact the country's Euro-integration process. It is crucial for the Ukrainian side to consider all recommendations from the European Commission to avoid negative consequences for its European prospects.