During a visit to Brussels on February 9, Ukrainian President Volodymyr Zelenskyy said he expected negotiations about Ukraine joining the EU to begin in earnest this year. The bloc has said that membership will depend on certain reforms, including tackling corruption and reducing the influence of oligarchs on politics.

In 2021, Ukraine adopted an "anti-oligarch law," which is currently being reviewed by the Venice Commission, the Council of Europe's advisory body on constitutional matters; findings are expected to be published in March.

What is Ukraine's 'anti-oligarch law?'

According to the 2021 law, people can be considered oligarchs if they fulfil any three of the following four criteria:

• They have a fortune of $80 million (€75 million) or more;
• They exert political influence
• own media outlets
• or have beneficial ownership of a monopoly

Anyone listed on the register of oligarchs is banned from financing political parties, cannot participate in the privatization of major companies and must submit a special declaration of their income.

For decades, Ukrainian politics was mired in a vicious circle of corruption. Oligarchs would finance political parties, mostly in secret, to influence laws and policies via politicians of their liking. It was often more lucrative to ensure that state taxes and levies on the extraction of resources remained low than to invest in the modernization of industry.

The "anti-oligarch law" has already proven to be effective. Last summer, Ukraine's richest man, billionaire Rinat Akhmetov, handed over all licenses pertaining to his media group. The head of the European Solidarity political party, former Ukrainian President Petro Poroshenko, also lost official control of his television stations and billionaire Vadym Novynskyi has also withdrawn his mandate as a member of parliament. 

War damages dent profits

Russia's ongoing attacks have done major damage to Ukraine's industry and have thus contributed to the erosion of the oligarchs' wealth. In a study published late last year, the independent Kyiv-based Centre for Economic Strategy (CES) calculated Ukraine's oligarchs had lost $4.5 billion in industrial assets. Akhmetov had suffered the greatest damages because his Metinvest Group lost the important Azovstal iron and steel works after Russian troops conquered Mariupol.

The CES estimated these industrial sites were worth over $3.5 billion. Furthermore, Akhmetov's coke and chemical plant in Avdiivka, near Donetsk — worth $150 million — also ceased operating after damage caused by Russian attacks. Targeted missile strikes also destroyed many more of Akhmetov's energy companies, and particularly thermal power stations.

The Ukrainian edition of Forbes magazine estimates Akhmetov has lost over $9 billion as a result of the war. However, with over $4 billion left in his coffers, he remains the richest person in Ukraine.

Citizenship revoked

The wealth of Ihor Kolomoyskyi, another very influential oligarch until recently, has also shrunk drastically. His most important company, an oil refinery near Ukraine's central city of Kremenchuk, was destroyed by Russian attacks last year, with the CES estimating damages at over $400 million. Kolomoyskyi and his partner Gennadiy Bogolyubov used to control a significant portion of Ukraine's fuel market and owned the largest petrol station network in the country.

For many years, Kolomoyskyi had been able to use his political influence to control the management of Ukrnafta, a state company and the largest producer of oil and gas in Ukraine, in which he only held a minority interest, but accumulated massive profits. 

Now, however, his shares in Ukrnafta and the oil refinery Ukrtatnafta have been seized for the duration of martial law in Ukraine. He has also had his Ukrainian citizenship revoked, as he has Israeli and Cypriot citizenship, too, and Ukraine does not allow dual nationality. Furthermore, there are several pending legal cases against him as he is accused of fraud in connection with Ukrnafta.

Dmytro Firtash, another oligarch who wielded considerable influence for years, though he lives in Austria, and is now under investigation, has also lost a large part of his fortune in the past year. The Azot chemical plant in Russian-occupied Severodonetsk, owned by his group, has been significantly damaged in the war, with the CES estimating the losses at $69 million.

Is it over for the oligarchs?

Dmytro Horyunov from the CES says that with their current loss of resources, Ukrainian oligarchs have fewer means of influencing politics and their previous investment in this regard has become somewhat "less relevant." He hopes that the "anti-oligarch law" will further prevent businesspeople and media tycoons from playing such a major role in politics in future, but he is also realistic. He says not enough has been done for this to happen: "As long as they have assets, they will do anything to protect or increase them."

According to the CES, oligarchs have tended to defend their interests through the Ukrainian judicial system. It also says that though Ukraine's anti-monopoly authority has imposed fines of more than $200 million on Akhmetov's companies and tens of millions of dollars on companies owned by Kolomoyskyi and Firtash for abuse of monopoly power, all of them have been challenged in court and none have been paid as yet.

Despite the fact that some oligarchs have decided to give up control of their own media outlets, Ihor Feshchenko from the Chestno (honestly) movement also doubts that big business will stay out of politics after the war ends.

"I think the first thing we will see on the part of the oligarchs is that they will create new TV channels, and, at the same time, political parties associated with them," he said, adding that it was imperative that legislation on political parties be implemented to block the flow of non-transparent funds for election campaigns.

The CES hopes that if Ukraine becomes a member of the EU, major investments will come from other member states rather than oligarchs. It has appealed to international finance institutes, on whose aid Ukraine is dependent, to link this help with demands for de-oligarchizing and to support firms that can compete with the oligarchs.

This article was originally published in Ukrainian.