Christine Lagarde, the head of the International Monetary Fund, welcomed on Tuesday the adoption by Ukraine’s parliament of a law to create an anti-corruption court, but said lawmakers needed to amend it to guarantee the court’s effectiveness.

Creating an independent and trustworthy court dedicated to handling corruption cases is one of the key conditions for Ukraine to receive further funding under its $17.5 billion aid-for-reforms program from the IMF.

Earlier in June, parliament passed the law after months of delay, but the draft contained an amendment that activists said would undermine the reform by allowing appeals on existing cases to be handled by the current courts system.

In the Fund’s first direct comments on the law, Lagarde said she had spoken with President Petro Poroshenko and said she was encouraged by the adoption of the legislation.

“We agreed that it is now important for parliament to quickly approve … the necessary amendments to restore the requirement that the HACC (anti-corruption court) will adjudicate all cases under its jurisdiction,” she said in a statement.

The law is meant to ring-fence court decisions from political pressure or bribery in Ukraine, where entrenched corruption remains a deterrent to foreign investors and knocks two percentage points off Ukraine’s economic growth each year, according to the IMF.

Establishing the court, adjusting gas prices and honouring budget commitments are key conditions to unlock the next loan tranche under the IMF program, which expires next year.

Lagarde said she and Poroshenko had “also agreed to work closely together, including with the government, toward the timely implementation of this and other actions, notably related to gas prices and the budget.”
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