Ruslan Pakhomov: The Bureau of Economic Security should serve as a business ambassador rather than a punitive authority.

The Bureau of Economic Security (BEB) in Ukraine is undergoing a reboot. This organization, which began its operations in 2021, has not met expectations: despite changes in leadership and team, there are no tangible results. The Verkhovna Rada has passed a law to restart the BEB, which includes a new selection process for leadership, re-certification, and personnel updates.

Is it really possible to reform the BEB, and what is needed for that? We discuss this with Ruslan Pakhomov, managing partner of Forsego Ukraine, a specialist in state transformations, former head of the cybercrime unit of the Ministry of Internal Affairs of Ukraine, and a candidate for the director position of the BEB.

— Why did you decide to submit your candidacy for the position of director of the BEB?

— The economy of Ukraine is in a catastrophic state. With the onset of full-scale war, we immediately lost 30% of GDP. If we look at the national revenue strategy, it anticipates an annual GDP growth of 5-7%. In reality, we are seeing about 3%. Recovery is progressing very slowly, and the business sector, which should be its driver, is under immense stress.

Since 2022, over $100 billion in international aid has flowed into the country. We already understand that such sums will not continue, and the window of opportunity is closing rapidly. Therefore, the recovery of the state will be driven by business. But for this, we need to create favorable conditions rather than "suffocating" it with inspections and corrupt schemes.

The BEB is the key that can radically change the situation. That’s why I submitted my candidacy.

— Why do you believe that you can change the situation for the better in this position?

— I have the necessary experience for this.

First, law enforcement activities. At one time, I established the cybercrime unit, studied in the USA, interned at the FBI, and observed how their system operates, how they interact with other agencies - immigration services, customs, and drug control.

Secondly, I have management experience in business. I worked as a crisis top manager, engaged in consulting, and founded technology companies. I understand how the market works, what problems businesses face, and what holds them back.

Thirdly, I have experience with international state transformation projects. Over the past three years, we have implemented many such projects, including WarCrimes.gov.ua (documenting Russian war crimes), the electronic court system, and an electronic criminal proceedings system for uniting law enforcement agencies.

I know how to reform complex state structures. That is my main advantage.

— So, you believe that foreign experience can help implement similar programs in Ukraine?

— Absolutely, foreign experience should be implemented, but Ukrainian reality also matters. It needs to be the right symbiosis.

— Can you provide examples of what could be implemented in Ukraine based on what you observed abroad?

— This includes management methods, personnel management approaches, internal metrics, business process structuring, automation projects, and, most importantly, leadership at every management level.

— Last year, you were involved in auditing the BEB. What did you discover?

— Yes, the EU advisory mission asked our company to investigate how the divisions within the Bureau of Economic Security work together and what could be proposed to make them more effective and better interact.

As a result of the research, we found that there are actually two separate entities: analysts who should identify financial crimes and detectives who should respond to them. However, they do not interact effectively. Analysts do not understand how they can be useful. Detectives, conversely, avoid analysts. They operate as if on different planets.

We proposed to automate processes and create an information system for effective collaboration between analysts and detectives. With a certain approach, it could be arranged so that detectives wouldn’t even know which analyst is working with them on a case, significantly reducing corruption risks.

The Bureau’s task is to ensure that analytics drive law enforcement activities. The information identified by analysts should flow through information systems to the detectives, who would then decide whether there is a criminal offense.

— What exactly needs to change in the bureau's operations?

— The Bureau of Economic Security should be an entity that does not pressure businesses but instead works delicately with them and the economy.

Even if someone has violated something, the goal should be for them to compensate the state for damages, but if it is a real business in the real economy, it should continue to operate. It should continue to generate income and pay taxes on that income.

Currently, both the BEB and other law enforcement agencies are more focused on creating artificial barriers, seizing computer equipment, blocking accounts, or even shutting down businesses.

There should also be a system of mutual control in place. This would serve as a safeguard against internal corruption.

— In fact, the BEB has absolutely not met the expectations placed upon it. In your opinion, why did this happen?

— The main problem is a misguided personnel policy.

Initially, the competition for the leadership position was a formality - a former tax officer won, turning the BEB into a tax police. It was a sort of reincarnation of the tax service, now as the Bureau of Economic Security.

— What do you believe should be changed first?

— Attract new specialists. Conduct an open competition for all positions. It shouldn’t be just security personnel. The BEB should employ financial analysts, auditors, economists, and IT specialists. Only in this way can we change the organizational culture.

— What would you do as director of the BEB to prevent corruption within the structure itself?

— First, it is necessary to re-certify all employees. As a result, all those who prove incompetent or do not meet standards of integrity will be dismissed.

Secondly, detectives and analysts must operate independently in their professional or procedural activities, but their actions should be transparent and subject to control through digital systems.

Thirdly, automation. The use of digital algorithms will help prevent corruption schemes where a "familiar" detective covers or fabricates cases.

— What about political pressure? Is there really a risk that powerful circles will be tempted to influence the Bureau of Economic Security, and what should be done about it?

— It’s simple. If detectives and analysts are completely independent in their activities, no one can dictate to them, not even the director of the bureau. Therefore, there would be no point in pressuring the director, as they would not have the authority to influence.

— Is this really feasible?

— I talk a lot about culture because it needs to be fundamentally changed, and that is the most challenging part. When independent, self-sufficient specialists come into the organization, it will be their request for self-realization. They will want to exercise the powers granted to them by the state. Any encroachment on this independence will meet resistance within the organization.

This is the kind of structure I want to build.

— How should the BEB cooperate with the business community and civil society?

— Civil society and business are key allies in reforming the BEB. They can assist in the reform process with their expertise and the information they possess.

They have information about pressure on businesses, "rollbacks," smuggling, counterfeiting, and so on. After all, it is the unscrupulous businesses in the "shadow" economy that make honest businesses uncompetitive.

I believe there should be a Public Dialogue Council created, in which the BEB, in particular, will demonstrate its reform efforts and showcase its vision for changes. This can be immediately discussed with the business community.

Honest businesses need to be protected and defended. Therefore, in my opinion, the Bureau of Economic Security should become a business ambassador within the state and protect its interests.

Unfortunately, our state agencies are quite archaic. They are outdated in terms of management and approaches. It is civil society and business that should help change this structure with their advice.

After rebooting, the Bureau of Economic Security can become a leader in change and an example for other law enforcement and state bodies.

— In your opinion, in what areas has the BEB been most ineffective?

— We cannot demand that businesses pay more and more taxes when they do not understand where those taxes go. They are not sure that these taxes even reach the state. We need to ensure this fairness. For this, we must restore order in taxation and customs, and halt schemes there.

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