Material by the Agency for Legislative Initiatives for ‘Dzerkalo Tyzhnia’
In 2025, one of Ukraine’s law enforcement bodies — the Bureau of Economic Security (BES) — drew significant attention due to the controversy surrounding the competition for the position of its new Director. Ultimately, in August, the Government appointed Oleksandr Tsyvinskyi, a former detective of the National Anti-Corruption Bureau of Ukraine (NABU), who had won an open competition with the participation of international experts. In an interview with ZN.UA, he outlined the key challenges facing the institution and emphasised that if issues were to arise in communication with the authorities (the ESBU is procedurally subordinated to the Prosecutor General), these would be communicated publicly.
Six months on, no high-profile statements have been made. Instead, tensions have emerged in the media, alongside growing questions: what has changed following the ‘reboot’? Public and media attention has been drawn to a controversy surrounding the declared pension of 44-year-old Tsyvinskyi — approximately UAH 300,000. The Head of the ESBU explained that these payments relate to years of service (26 years) and his status as a combat veteran, accrued over several months following formalisation.
At the same time, the appointment of a new Director signalled an intention to relaunch the ESBU — both for business and for the state. However, over these six months, expectations of rapid results have collided with reality: the institution is undergoing a profound internal transformation.
In effect, Tsyvinskyi is acting as a crisis manager. His appointment coincided with another key ‘reboot’ requirement — the full certification (attestation) of ESBU staff, as provided for by a law adopted in June 2024 at the request of the IMF. In addition, the ESBU is currently operating with only around one-third of its authorised staff capacity. Some employees are undergoing verification, while new personnel must be recruited through open competitions. All of this significantly limits the Bureau’s ability to demonstrate quick results — at least in the short term.
So, what, in fact, determines the effectiveness of the ESBU today? Does it have sufficient resources and powers to fulfil its mandate? And is it even appropriate to assess its performance at this stage solely based on quantitative indicators?
From concept to launch: how the ESBU was established
The primary task of the ESBU is to counter offences that undermine the functioning of the state’s economy. This includes crimes in the economic sphere and efforts to bring the ‘shadow’ segment of business into the formal economy. In other words, to ensure that businesses operate, grow and pay taxes, thereby contributing to both the state and local budgets.
The emphasis on ‘prosperity’ is not accidental. It is not only about taxation, but also about the rules of the game: the absence of pressure from law enforcement bodies (‘masks-show’ raids, demands for ‘protection payments’), as well as predictability and investment attractiveness — for both domestic and foreign businesses. However, there is a key caveat: since its establishment in 2021, the ESBU has not functioned fully in practice. This largely explains the situation we observe today.
This concerns the incomplete reform of the tax police. Formally, it was abolished as early as 2016, but in practice it continued to operate until 2021. During this period, the state made several attempts to establish a new body — the Financial Police, the Financial Investigations Service and the National Bureau of Financial Security. It was only in 2020 that this effort was finally realised, and in 2021 the law on the ESBU entered into force. The Bureau was designed in line with the model of specialised bodies — such as the National Anti-Corruption Bureau of Ukraine (NABU) or the State Bureau of Investigations (SBI): with distinct investigative jurisdiction, competitive selection procedures and safeguards of independence. However, as practice has shown, simply replicating a sector-specific law is not sufficient.
Problems with leadership and selection procedures emerged almost immediately. These challenges were compounded by the introduction of martial law and ultimately, Ukraine undertook a commitment to ‘reboot’ the ESBU. This followed a critical report by the Temporary Investigative Commission of the Verkhovna Rada (2023), as well as open dissatisfaction from business associations, which pointed to the same practices seen during the era of the tax police: pressure, extortion and unjustified searches.
As of early 2024, the ESBU’s reputation could be summarised succinctly: ‘tax police officers were simply transferred from one body to another’.
Recruitment is under way, but staff shortages persist
In June 2024, the Law ‘On Amendments to Certain Legislative Acts of Ukraine on Improving the Functioning of the Economic Security Bureau of Ukraine’ launched a new competition for the position of Director and provided for the attestation of all ESBU staff. Oleksandr Tsyvinskyi was appointed at a time when ‘rebooting’ had become the key requirement for the institution. In parallel, the new leadership was expected to begin recruitment to fill vacant positions.
Within 18 months, the ESBU is required to complete the full attestation and meet its staffing needs. This process officially began on 6 August 2025. At the same time, throughout its entire existence, the Bureau has managed to recruit only around one-third of the required personnel — approximately 1,200 out of a maximum authorised staff of 4,000.
To carry out the attestation, personnel and attestation commissions have been established, involving international experts and representatives of civil society. As in the police and prosecution service, the process consists of three stages: tests of legal knowledge, assessment of general competencies and an interview stage, during which integrity is evaluated.
At the same time, the experience of previous law enforcement reforms shows that this model is complex and not always effective. The risks of reinstatement through court decisions remain high. An alternative approach could involve strengthening internal oversight and disciplinary accountability; however, the new leadership of the ESBU is constrained by the requirements of the 2024 law and must operate within its framework.
There is also another issue: the attestation process itself effectively shifts the institution’s core work into the background. Staff are preparing for tests, collecting documents and taking leave. As a result, some of the Bureau’s functions are effectively ‘on hold’ — instead of investigations and analytical work, resources are being diverted to the internal process of rebooting.
Recruitment of new staff through open competition is another major challenge. This concerns more than 2,700 vacant positions, in addition to dismissals resulting from attestation. Moreover, around 100 employees have already refused to undergo the process.
However, the problem is not only about numbers, but also about conditions. Employment at the ESBU is less attractive than at the NABU or the SBI. This is not due to the nature of the work — for investigators or detectives, the distinction between economic, corruption, or official crimes is not fundamental. The key factor is remuneration. Formally, salaries at the ESBU, NABU and the SBI are the same — 22 subsistence minimums. However, while NABU and the SBI apply the full rate (UAH 3,028), the ESBU uses a reduced rate (UAH 2,102). As a result, ESBU staff earn approximately one-third less. Until this disparity is addressed at the budgetary level, it will be difficult to ensure competitive recruitment.
As a result, the ESBU remains critically understaffed. While attestation and recruitment processes are ongoing, its capacity to deliver qualitatively new results is objectively limited. It is therefore important to assess its performance today with these factors in mind.
The ESBU in practice: powers and institutional specifics
The bulk of ESBU proceedings relates to areas where the economy loses revenue due to the non-payment of taxes and duties. This includes both classic economic crimes — such as misappropriation of property or large-scale tax evasion — and violations of excise rules, as well as the smuggling of goods. The latter covers a broad range of activities — from importing goods without customs clearance to the illegal circulation of excisable products, including alcohol and tobacco. It also includes so-called ‘grey’ petrol stations operating without the required permits and effectively outside the tax system.
In this sense, the primary beneficiary of the ESBU’s work is the state, as it directly concerns budget revenues. At the same time, businesses also have a strong interest in the Bureau’s performance. In a market saturated with smuggled and counterfeit goods, success often depends not on efficiency, but on the ability to ‘optimise’ business models — frequently through tax evasion. This distorts competition and undermines trust in the rules of the game. This is precisely why there is a shared demand — from both the state and legitimate business — for an institution that not only enforces the law but also helps establish clear and predictable rules.
In addition to its procedural work, the ESBU is seeking to establish a different model of engagement — through dialogue with business associations. During the first six months, it has managed to establish basic communication and outline its approach: not pressure or ‘rent-seeking’, but the creation of conditions in which operating in the formal economy becomes more advantageous than operating in the shadow economy. This is directly linked both to budget revenues and to the country’s investment attractiveness. In the longer term, the ESBU’s work should lead to the displacement of shadow practices and the development of a more predictable market environment.
According to the ALI, the ESBU is expected to publish an updated Institutional Development Strategy in March–April 2026. The current document, adopted in early 2024, does not reflect the vision of the new leadership and requires revision.
It is also worth noting efforts to strengthen the institutional capacity of the Bureau. During a recent visit to the United States, the ESBU leadership discussed issues related to ensuring the institution’s independence. Given the professional background of the current team (including individuals with experience at the NABU), it is possible that the Bureau will seek to partially adopt this model in the future — particularly in terms of institutional safeguards.
Growth potential vs results: what should the ESBU focus on?
Nearly eight months have passed since Tsyvinskyi’s appointment. This is sufficient to assess not so much final outcomes as the dynamics of change and the direction in which the Bureau is moving.
Among the more visible steps is increased activity in areas related to violations of excise regulations and shadow markets. This includes fuel, counterfeit tobacco and coffee, as well as electronics imported on a large scale without proper customs clearance. However, to achieve a lasting impact, the ESBU must act proactively: businesses adapt quickly, modify schemes and find new ways to evade taxes.
This means that the Bureau must not only respond but also anticipate such developments. Doing so requires resources — human, financial and analytical. Without strengthening staffing levels and enhancing institutional capacity, it will be difficult to scale up this work effectively.
If one turns to formal indicators, the ESBU’s 2025 report records certain positive developments: an increase in tax revenues of approximately UAH 100 million as a result of dismantling ‘business fragmentation’ schemes; the seizure of excisable goods and assets worth around UAH 3 billion; as well as growth in declared turnover — from UAH 380.4 billion in 2024 to UAH 403.4 billion in 2025. The Bureau attributes these trends to the gradual de-shadowing of the market.
However, assessing the ESBU’s effectiveness solely based on these figures is insufficient. Economic crimes are inherently more difficult to evaluate in terms of positive impact than corruption or general criminal offences. The most common penalty in such cases is a fine, and the objective is not to dismantle businesses, but to ensure their compliance with the rules. An overly punitive approach may have the opposite effect — reducing economic activity and, consequently, tax revenues. As a result, in cases related to tax compliance, the logic of enforcement is gradually shifting from a purely punitive approach towards a more incentive-based one.
It is in this context that the ESBU has begun to explore alternative approaches to resolving criminal law disputes. A mechanism has been proposed that would allow proceedings to be closed at the stage of notification of suspicion — without a court decision. This resembles a form of ‘tax compromise’, whereby the damage to the state is not only compensated but also accompanied by an additional fine of 150–200%.
Such instruments are intended not only to punish but also to create incentives for businesses to move out of the shadow economy. At the same time, their implementation requires caution, as it involves recalibrating the balance between the interests of the state and the principle of the inevitability of liability.
Long-term reform instead of six-month expectations?
It is still too early to speak of a paradigm shift in countering economic crime. At the same time, the initial steps taken by the ESBU can be seen as both a marker and a potential foundation for long-term change. This includes the gradual normalisation of relations with business, the search for more balanced approaches to regulating the shadow economy and the creation of conditions in which compliance becomes more advantageous than circumvention.
The real impact of these changes can only be assessed once the Bureau is operating at full capacity — in particular, after the completion of attestation and recruitment processes and the full staffing of positions. Until then, any assessment will inevitably remain provisional.
Maintaining this course while simultaneously addressing staffing, budgetary and organisational challenges is a complex task. However, it is precisely the ESBU’s ability to stay on this path that will determine whether the ‘reboot’ results in genuine institutional transformation, rather than another instance of reform in name only.
At the same time, a key challenge lies not only in the internal transformation of the Bureau itself, but also in the environment in which it operates. At the outset, the new leadership declared its readiness to speak openly about possible influence from informal centres of decision-making. However, over the past six months, no such public discussion has taken place. Are there attempts to exert pressure on the ESBU from the Office of the President or other ‘informal’ sources of influence? The question remains open. (At the same time, our sources confirm that Mr Hahach’s ‘back office’ continues to exist, and that the authorities are still attempting to influence the ESBU through it. In an interview, Oleksandr Tsyvinskyi told us that he would seek assistance from the NABU and the SAPO if necessary. It appears that such a need has already arisen. — ZN.UA.)
Equally important is the question of institutional safeguards for the ESBU’s independence. The experience of Ukraine’s anti-corruption infrastructure demonstrates that without a well-designed system of checks and balances — from procedures for appointing leadership to guarantees of procedural autonomy — any reform efforts remain vulnerable to political influence. In this respect, the ESBU is still at an early stage. The Bureau does not have a dedicated specialised prosecution service or court, which means that much depends on how its relationship with the prosecution authorities exercising procedural supervision will be structured. Draft Law No. 12439, which is likely to be adopted in the coming days, may further complicate the situation for the ESBU. And how many similar initiatives may exist among those opposed to the Bureau can only be a matter of speculation.
For these reasons, it is premature to speak of the ESBU as a fully established new institution. At present, it is better understood as an institution in the process of formation — moving in the right direction, but without a guaranteed outcome.
Changes within the system must be both visible and openly communicated. Without an honest and transparent dialogue between the ESBU leadership and society — which has a direct interest in the emergence of an effective law enforcement institution — it will be difficult to secure external support in the face of pressure or to build a body that genuinely safeguards economic security.
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