On June 19, in London, the conference on Securing the Integrity and Resilience of Ukraine’s Financial System took place, co-organised by the Centre for Financial Crime and Security Studies (CFCS) at RUSI, RUSI Europe, the Better Regulation Delivery Office (BRDO).
The event took place on the eve of the Ukraine Recovery Conference in June 2023 co-hosted by the UK and Ukrainian governments.
The conference gathered over 170 leading voices, in person and online. It included participants from the finance sector as well as representatives from civil society and high-profile Ukrainian, UK and EU policymakers. There were two main panel events, seven one-on-one discussions and two presentations.
Based on the discussions, RUSI prepared a report which summarises the main findings of the discussions related to the integrity and resilience of Ukraine’s financial system.
Oleksii Dorogan, CEO of the BRDO, participated in the conference and presented the Digital Restoration Ecosystem for Accountable Management (DREAM).
“Restoration is a very complex and multi-component process, which is difficult to manage and monitor what happens at each individual stage. And the risks, in particular corruption, are huge. In order to minimise them, the DREAM system is created. It is built on the principle of “everyone sees everything” and is a digital basis, a skeleton for the process of rebuilding Ukraine,” said Oleksii.
DREAM is the state electronic ecosystem of Ukraine, which will provide a single digital route for all reconstruction projects. And will also collect all project data online, display them in the form of convenient tables, graphs and charts and ensure the publication of open data in accordance with the global Open Contracting Data Standard.
“For several years now, Ukraine has been a leader in digital transformation and digital technologies that ensure transparency, in particular in the public sector. We have such services as Diia, Prozorro, Prozorro.Sales, eHealth, Single State Register, etc. They, together with the Register of Damaged and Destroyed Property, the Geo-Information System (GIS), the Branch Management System for Infrastructure Reconstruction, the Unified State Electronic System in the Field of Construction (EDESSB) are the foundation, the first level, on which the DREAM system is built,” added Oleksii Dorogan.
The second level is an “umbrella” system that provides data collection from all first-level systems at each stage of the project, provides open access to them and management and control tools.
In addition, according to Oleksii Dorogan, a very important element in the DREAM system is digital record keeping – that is, every document, every report on spent funds will be available in the system, which will prevent the risks of international money laundering. This is the transparency and accountability that creates the conditions for attracting large amounts of international funding, which will be needed for the large-scale and unprecedented in the peaceful history of Ukraine reconstruction process.
Thanks to DREAM, international investors (both public and private) will be able to choose which project to finance, and will also be able to control the use of their funds. Local authorities, communities that will need financing for restoration projects will be able to find international donors and attract such financing by placing their projects in the system.
Attracting private funds to Ukraine is a process in which international partners need to participate already, in addition to providing military support, believes Bob Seeley, a member of the British Parliament, with whom Oleksii Dorogan spoke during the conference. After all, despite the sanctions, the economy of the Russian Federation does not feel bad in isolation, on the other hand, Ukraine is critically dependent on the financial assistance of Western countries. Some “military insurance” is needed from the US, EU and UK governments to enable private investment, according to Mr Seeley. This requires the trust of Ukraine’s international partners, which is achieved, in particular, thanks to transparency.
Within the framework of the same event, the head of the BRDO IT&Telecom sector, Ihor Samohodskyi, together with the head of the Open Data Association, Nataliia Chornohub, discussed the importance of open data in the context of the future reconstruction of Ukraine and resistance to Russian aggression, particularly in the economic space.
“Open data is not just information available on the Internet. This is a broad concept that involves the availability of data in a machine-readable format, proactive publication of data, as well as the principle of openness by default”, notes Ihor Samohodskyii. “Many services work on the basis of open data. In Ukraine, there is a whole ecosystem of players who use open data, including journalists, entrepreneurs, and ordinary users. We at BRDO in 2021 researched that 5 to 7 million Ukrainians used open data every month.”
Since the beginning of the full-scale invasion of the Russian Federation into Ukraine, all sets have been closed for security reasons, because they can be used by the enemy. Access is now gradually being restored. According to Nataliia Chornohub, open data should be available now, because it will help, first of all, Ukrainian businesses to check their counterparts at the time of their potential connections with the Russian Federation and whether they are under sanctions as companies sponsoring terrorism. And citizens should be able to see the beneficial owners of the businesses whose services they use to protect themselves from the funding of the aggressor country.
“Open data is, first of all, about trust. Citizens’ trust in the state, and our international partners – in us as an ally and recipient of international aid. Accordingly, all future reconstruction systems must be transparent, all state and local authorities must function transparently, and this can be ensured with the help of open data,” added Ihor Samohodskyii.
The event is part of the Supervising and Monitoring Ukraine’s Reconstruction Funds (SMURF) Project, a CFCS-led initiative in partnership with BRDO in Ukraine. SMURF aims to empower Ukraine’s ‘second line of defence’, civil society, to gather the expertise and tools that will enable it to monitor the proper allocation of funds and discourage kleptocracy and corruption. The project was launched in November 2022 and is supported by the NED. Video recording of the conference is available here.