January 27, 2016 / 10:45 AM / 2 years ago

Ukraine needs big scalps to fight 'brutal' corruption: ombudsman

European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud Algirdas Semeta arrives for official talks with Swiss Finance Minister Eveline Widmer-Schlumpf (not pictured) in Bern June 17, 2013.Ruben Sprich

LONDON (Reuters) - Ukraine must show resolve in tackling "brutal" corruption by prosecuting high-level officials or face widespread disappointment at home and among foreign institutions, the head of its internationally-funded anti-graft ombudsman said.

Former Lithuanian finance minister, Algirdas Semeta, whose role was created last year to give Ukraine's firms a way to report bribery or other government wrongdoing, warned distrust about officials' behavior was growing again in the country.

The Business Ombudsman Council has been set up for a two-year trial period at a cost of $3.5 million as part of the West's efforts to root out graft pervading the economy.

But like most ombudsman it has no formal powers and relies on government departments like the economy ministry and new anti-corruption bureau to enforce any punishments, something Semeta said had proved insufficient so far.

"I have to say, most of the issues we deal with are very brutal violations of law and regulations," Semeta told Reuters.

"So far progress (with convictions) is rather limited. I think 2016 will be a crucial year, it will demonstrate whether those institutions, which have been created with the assistance of the entire world, can really demonstrate practical results."

Fighting corruption is a key requirement for $40 billion support from the International Monetary Fund.

Power struggles in Kiev last year, however, delayed the appointment of a new head corruption prosecutor and there has been little to suggest it is getting to grips with the biggest problem, oligarchs who exploit state-controlled firms.

"The oligarchs remain very powerful in the country, I think too powerful," Semeta said.

Tackling oligarchs, who made vast fortunes with the collapse of the Soviet Union in the 1990s and exert some political influence, is still the job of government. The anti-corruption bureau has been tasked specifically with convicting government officials who have taken kick-backs to buy big houses and expensive cars.

"Of course people see what is going on and they want action now," Semeta said.

Unless the anti-corruption bureau and state prosecute high-level officials, ministry department heads or above, "that will lead to a disappointment of the people," he added. "And also the international community which has contributed a lot to the establishment of these institutions."

Reporting by Marc Jones; editing by Ralph Boulton

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