New finance minister fails to declare links to offshore firms

Finance Minister Oleksandr Danylyuk on April 21 admitted that he had failed to include his links to offshore companies in his property declaration, saying he had made a mistake.

Natalie Sedletska, a Ukrainian journalist with Radio Free Europe/Radio Liberty, discovered that Danylyuk was still a director of two Cypriot companies, Rurik Real Estate Investment Limited and Hogsmill Investment Limited, which were founded by a firm registered in the Cayman Islands. She posted screenshots of Cypriot registers with information on Danylyuk on April 21.

Danylyuk said he was also a director at the Cayman Islands company.
Under Ukrainian law, Danylyuk should have declared any income from his jobs at the Cypriot companies, Inna Rydnyk, a lawyer at the Lavrynovych and Partners law firm, told the Kyiv Post.

Another possible violation is that, under the law on preventing and fighting corruption, ministers are banned from having jobs in business, she said.
Punishment for these violations could be a fine, reprimand or dismissal, Rydnyk added. Criminal liability is unlikely unless large amounts of money are involved.
Danylyuk said that he worked with the companies as a hired manager before 2010, when he moved back to Ukraine from the U.K. He said that he wasn’t aware that he was still legally involved with the companies.

“I didn’t declare the companies because I was sure that my partners removed me from (the documents) in 2010,” Danylyuk said in an explanation he published on Facebook on April 21.
He said he would correct his declaration and wanted to “apologize to society,” saying that he “should have correctly declared this information.”

He added that his partners and lawyers were now completing the procedure of dismissing him from his positions in the companies.

“I agreed to head the Finance Ministry to carry out a deep reform of public finances,” Danylyuk wrote. “That’s why I intentionally continue to correct my mistakes and publicly account for them in order not to give my opponents a single tool of pressure on me, and thus create obstacles to important reforms, as well as to serve as an example of openness for others.”

Danylyuk, a co-founder of the Kakha Bendukidze Free Market Center think tank, has advocated reforms aimed at introducing free markets, stabilizing the financial system, and carrying out transparent privatization of state-owned enterprises.

However, he has also been criticized for working for the disgraced ex-President Viktor Yanukovych. He was an advisor on economic reforms to Yanukovych in 2010-2014. He was also a deputy head of President Petro Poroshenko’s administration in 2015-2016.

The reports follow the scandal around Poroshenko’s offshore company in the British Virgin Islands. The Organized Crime and Corruption Reporting Project, a Kyiv Post partner, on April 3 reported the existence of Poroshenko’s offshore company in the wake of a massive leak of documents from Panama’s Mossack Fonseca consulting firm.

So far, Poroshenko’s lawyers have been unable to provide evidence that Poroshenko was not required to declare the fir