A trap for detectives: how government sabotage and ‘underpaid’ salaries turned the ESBU into an understaffed outsider

Relations between the state and business in Ukraine have never been simple. A particular source of discomfort is law enforcement agencies that conducted “raids” on enterprises, blocking their operations for corrupt gains.

For many years, the authorities tried to combat this shameful phenomenon. It became so widespread that it got the name “mask shows”. However, the government and parliament’s attempts to fix the situation were unsuccessful.

In 2021, the problem was addressed radically: the Verkhovna Rada passed a law that stripped all law enforcement agencies of the function of investigating economic crimes and created a new body – the Bureau of Economic Security (ESB). It was supposed to replace the tax police, which businessmen complained about the most.

However, after five years of operation, the ESB has not lived up to the expectations of the authorities, business, and civil society. The new law enforcement agency, initially headed by the head of the old tax police, turned into its weakened reincarnation.

Moreover, during this time, the government failed to complete the creation of the BEB, leaving numerous legislative inconsistencies and chronically underfunding its activities.

In 2024, the authorities decided to start from scratch. Then the Verkhovna Rada passed a law on rebooting the ESBU, which provided for the election of a new head of the institution through a transparent and open competition. The winner was former detective of the National Anti-Corruption Bureau of Ukraine Oleksandr Tsyvinskyi, whom the government agreed to appoint only under pressure from the “cardboard Maidan” in August 2025.

However, the new head inherited old problems: unresolved legislative inconsistencies, lack of territorial offices, and staff who are massively suing the ESBU. As a result, funding provided for the bureau in the budget may run out in September.

How has the government ignored the ESB’s problems and why will the money run out there soon?

An unloved agency

The liquidation of the tax police and the creation of a fundamentally new law enforcement agency in its place was the most anticipated reform for business. Since the 1990s, the tax police has earned a reputation as a repressive body and has been consistently criticized.

Attempts to reform the tax authorities that the authorities made after the Revolution of Dignity did not yield real results for business and ended with a change of signs. The Ministry of Revenues and Duties was first renamed the State Fiscal Service (SFS), and then it was split into tax and customs services, leaving the tax police under the SFS.

After 2019, work began on a reform to eliminate the tax police. The law on creating the ESBU was drafted with business participation, so the final version of the reform addressed the biggest concerns of entrepreneurs. For example, limiting the number of ESBU employees to 4,000 (the tax police employed up to 15,000 in some periods) or emphasizing the agency’s analytical functions.

The final version of the law on the ESBU satisfied entrepreneurs and received support from international partners. The latter made its passage a condition for Ukraine to receive external funding.

However, as often happens in Ukraine, even the best law can be spoiled at the stage of its (non)implementation. Problems with implementation began from the first days of the ESB’s creation.

First, Vadym Melnyk, the head of the tax police it was supposed to replace, was appointed director of the bureau. He not only brought the old approaches of tax policemen to the ESBU but also many representatives of the disbanded agency, who simply transferred to work at the bureau.

Second, the government systematically failed to pay attention to the ESBU work and did not adopt the necessary decisions for its effective operation.

An example is the purchase of special technical means for wiretapping. The resolution, which allowed the ESBU to purchase these devices for operational activities, was adopted by the government only in March 2026. All this time, the State Tax Administration had permission to purchase such means, although that agency has not existed since 2012.

The systematic sabotage of solving the ESBU problems by the government is also indicated by the Accounting Chamber, which in 2025 conducted an audit of the bureau’s work. “The problems deepened because the Cabinet of Ministers did not create a holistic and regulated system to counter offenses in the economic sphere and did not pay due attention to coordinating the activities of this critically important agency,” the auditors noted.

In five years, the ESBU has failed to form as an agency. Of the 24 territorial offices provided for by law, only nine are operational. In 15 regions, ESBU representatives are absent, so the agency cannot respond promptly to economic crimes.

After Melnyk’s dismissal in 2023, the government did not appoint a new ESBU head for over two years, entrusting the bureau’s management to acting heads. Meanwhile, according to the law, an acting head can manage the bureau for no more than a year until the government holds a new competition.

Eventually, the Verkhovna Rada realized that the ESBU reform had failed. “We passed the law on the ESBU two years ago. According to international experts, it is of high quality. At the same time, at the implementation level, everything turned into a change of signage. 80% of the tax police staff were transferred to the new agency, so now we are talking about an anti-reform rather than a reform,” said in 2023 the head of the parliamentary tax committee, Danylo Hetmantsev.

In 2024, the Verkhovna Rada passed a law on rebooting the ESBU, which provided for a new open competition with international observers in the selection committee. Its winner was Tsyvinskyi, whom the government was also in no hurry to appoint.

The Cabinet of Ministers referred to a secret SSU letter allegedly stating Tsyvinskyi’s ties to Russia. This coincided with the authorities’ attempt to destroy the independence of anti-corruption agencies. So, under pressure from the street and international partners, when the government and parliament restored the independence of NABU and SAPO, they had to agree to appoint Tsyvinskyi as head of the ESBU.

However, the new bureau director inherited old problems: unformed territorial offices, numerous legislative inconsistencies that the government did not resolve, and staff who were massively resigning.

According to ESBU data, in March 2026, 1,182 people worked at the bureau – 29% of the staff number. They announced competitions to fill vacant positions, but attracting employees is hindered by uncompetitive salaries.

“The low level of remuneration for ESBU employees compared to other law enforcement agencies limits the ESB’s ability to conduct quality recruitment of qualified and motivated personnel capable of ensuring the fulfillment of the state’s international obligations in countering criminal offenses that affect the functioning of the economy. In particular, it limits the recruitment of qualified personnel from the private sector of the economy for a radical change in the agency’s philosophy,” states the ESB’s response to a media inquiry.

Unreturned taxes

One of the elements that makes ESBU employees’ salaries less competitive than in other law enforcement agencies is that they are not compensated for personal income tax (PIT).

The Tax Code states that PIT paid from the monetary support of military personnel and employees of a number of law enforcement agencies must be reimbursed to them. This is done.

According to the Ministry of Finance, in 2025, the state returned nearly 182 billion UAH of paid tax to military personnel and law enforcers – ten times more than before the full-scale war.

However, the ESBU is not on the list of law enforcement agencies to which the state must return the tax. The ESBU is also not in the government resolution on the procedure for PIT compensation. Instead, the now-defunct tax police is listed there.

Over five years since the ESB’s creation, the government has not made the relevant changes to its resolution or initiated changes to the Tax Code. As a result, the already low salary of bureau employees is further reduced by 18%.

“This creates unequal financial conditions for service. As a result, the ESB’s ability to compete for qualified personnel and ensure staff stability decreases,” the bureau complains.

The government says it knows about this problem but cannot do anything about it. “Article 168 of the Tax Code does not provide for the payment of compensation for personal income tax amounts withheld from monetary support, monetary rewards, and other payments received by persons holding special ranks of the ESBU. Therefore, the issue can only be resolved after amendments to the code,” the Ministry of Finance responded.

They noted that ESBU representatives approached them with relevant proposals in September 2025.

Courts and money

Uncompensated taxes are only part of the problems with ESBU employees’ pay. The key reason for lower salaries at the bureau is that the government systematically understates the subsistence minimum, which is the basis for calculating salaries.

The ESBU law states that salaries of employees holding special ranks cannot be lower than 20 subsistence minima for able-bodied persons. In 2026, its amount is 3,328 UAH, so the minimum salary for a ESBU employee should be 66.56 thousand UAH.

Instead, since 2021, the government has set a special subsistence minimum for calculating salaries of employees of a number of agencies – 2,102 UAH. In addition to the ESBU, this reduced rate is used for calculating salaries of judges, prosecutors, tax, customs, and some other agencies.

Thus, according to ESBU data, the salary of a bureau detective calculated using the understated subsistence minimum is 46,244 UAH. “Taking into account all possible surcharges (40% seniority bonus, surcharges for special rank, access to state secrets, and academic degree), the actual remuneration will be 59,985 UAH after taxation. This is almost twice less than, for example, in the State Bureau of Investigations,” they complain there.

The use of a separate subsistence minimum to determine salaries at the ESBU violates the law. Some bureau employees are taking advantage of this: after dismissal, they sue the ESBU demanding compensation for underpaid salaries.

In 2022-2026, former ESBU employees won 3.26 million UAH from the bureau. In total, they filed 77 lawsuits for recalculation of monetary support, and in ten of them, courts ruled in favor of the former employees.

“The number of lawsuits by former ESBU employees for recalculation of monetary support, taking into account the subsistence minimum for able-bodied persons, increased by 18 cases since October 2025, which is more than 50% of their previous number. This dynamics indicates increased financial risks of underfunding the ESBU throughout 2026,” the bureau notes.

The ESBU pays court-awarded amounts from its own budget, which in 2026 is 2.19 billion UAH. However, the bureau fears that these court costs will only grow considering potential lawsuits from former employees.

“The dynamics indicates increased financial risks of underfunding the ESBU throughout 2026. This could lead to a collapse in the ESB’s functioning in September-October this year,” they note there.

The ESBU leadership wrote about this problem in a letter to the Ministry of Finance, but they are not rushing to propose a review of the subsistence minimum used to calculate bureau salaries. The reason is that this would lead to increased spending on salaries in other agencies, and there is no money for that in the budget.

After Tsyvinskyi’s appointment as ESBU head, great hopes were placed on this agency again. However, after eight months, the bureau has hardly been remembered for loud operations or impressive results in detinizing the economy.

During meetings with journalists, the ESBU leadership reports on the growth of legal fuel sales in October-December 2025 (coincided with the start of blackouts) or household appliances (coincided with “Black Friday” and Christmas-New Year holidays).

At the same time, the ESBU is pressured not only by high expectations from “white” business or international partners but also by the state of public finances. In the 2026 budget, the government provided a special “reserve for the security and defense sector” of 199 billion UAH, the funds for which are to come from the detinization of the economy.

But can such a result be ensured by an agency staffed at less than a third? An agency forced to solve legislative inconsistencies embedded by the government instead of performing its direct functions.

Author: Yaroslav Vinokurov

Source: Economic Truth