New IMF tranche for Ukraine is now in question - Source
Photo: IMF may not allocate credit tranche to Ukraine (Getty Images)
The absence of a law establishing the Higher Administrative Court (HAC), which is a structural benchmark of the IMF's funding program, may delay the allocation of the next credit tranche to Ukraine.
If the decision on the establishment of the HAC is not made in the coming days, it is likely to become a prior action for the continuation of funding.
The cancellation of the Lozovoy amendments is the second benchmark of the IMF program that has not been fulfilled by Ukraine. According to a source familiar with the negotiation process, discussions on this matter with the IMF are ongoing, and the deadline for fulfilling this condition may be postponed again. If the discussion on the Lozovoy amendments continues, the benchmark regarding the court would most likely become a prior action.
Structural benchmarks
The structural benchmarks include the Lozovoy amendments, which refer to changes made to several codes adopted by the Ukrainian Parliament back in 2017. These amendments, among other things, limit the duration of pre-trial investigations into crimes. It was stipulated that if a case is not solved within the set timeframe, the criminal proceedings must be closed. Such limitations create conditions under which corrupt individuals might escape punishment.
The condition to cancel the Lozovoy amendments appeared in the IMF memorandum in the summer of last year, and the deadline for fulfilling this benchmark has been postponed twice. According to the latest version of the memorandum, this condition should have been met by the end of December 2024. However, Parliament has not yet made a decision. The latest attempt to amend the legislation was in mid-January, but the bill was not included in the agenda.
Business groups are opposed to the cancellation of these amendments, fearing that criminal investigations could become endless.
High Administrative Court (HAC) creation
This condition appeared in the IMF memorandum at the end of 2023. The administrative court is meant to replace the dissolved District Administrative Court.
The new court will handle cases against national state bodies. The deadline for meeting this milestone has also been postponed several times. However, according to the publication, the IMF mission is now taking a stricter stance on this issue and is not inclined to extend the deadlines any further.
