The International Monetary Fund (IMF) would add a requirement for Ukraine to amend its customs code, Bloomberg informed.
Ukraine will need to bring its customs code operations in line with European Union legislation. Kyiv should also reinforce personnel integrity and introduce a merit-based and transparent hiring process, according to the Washington-based lender.
The requirements include a management selection process with integrity checks and meaningful participation of experts with international experience. The process should begin by the end of October.
Kyiv must demonstrate progress in combating the corruption that has ravaged its economy since the country gained independence in 1991. The move will keep billions of dollars in international financial aid flowing while the country is in its third year of war against Russia.
Moreover, efforts to combat large-scale bribery are necessary for Ukraine’s potential accession to the European Union and NATO. The IMF memorandum also foresees the first-ever external audit of the National Anti-Corruption Bureau of Ukraine (NABU) by independent auditors selected by international partners by the end of September.
The external audit of NABU should be completed promptly, and its results leveraged to enhance the bureau’s accountability and operational effectiveness.
Requirements for other measures
Other measures requested by the IMF include strengthening the Criminal Procedure Code and establishing a new high administrative court. The Fund also requires the introduction of short-term fiscal policy measures. These are aimed at increasing revenues from excise duties, further alignment with EU legislation, and optimisation of tax exemptions, as the country needs to increase budget revenues.
The 2025 budget will require implementing measures to mobilize domestic revenue to help meet still-high expenditure needs, strengthen tax administration, including on customs and compliance, and advance reforms on medium-term budgeting and public investment management.
Careful liberalisation of exchange controls should continue to allow Ukraine’s exchange rate to adjust and absorb external and domestic turmoil. The IMF sees room for further monetary easing, given “still high real interest rates.”
The lender also raised the requirement for Ukraine’s central bank to maintain net reserves to $28.8 billion from $27.9 billion by the end of September. That suggests the central bank may have less room to manoeuvre in intervening to support the hryvnia, Ukraine’s national currency.
The IMF Executive Board approved $2.2 billion of Ukraine’s $15.6 billion aid package on Friday after its mission had assessed Kyiv’s policies. The next review of Ukrainian policy will take place in September.
