Anti-Corruption Section in the Shadow Report for the European Commission

Transparency International Ukraine experts analyzed the condition and challenges of the anti-corruption sphere in Ukraine and covered them in the corresponding section of the Shadow Report regarding Chapter 23 Justice and Fundamental Rights of the European Commission’s Report on Ukraine in 2023.

A coalition of civil society organizations—the Agency for Legislative Initiatives, Transparency International Ukraine, the Human Rights Centre ZMINA, the Tomorrow’s Lawyer program, and the Ukrainian Bar Association—have compiled a Shadow Report to Chapter 23 Justice and Fundamental Rights of the European Commission’s Report on Ukraine in 2023.

This is the first report that the Ukrainian public sector provides to the European Commission after being granted the status of a candidate for membership in the European Union. The period under study is June 2023–August 2024.

In general, the Shadow Report includes the following sections:

• Judicial reform (Agency for Legislative Initiatives);
• Anti-corruption (Transparency International Ukraine);
• Protection of fundamental rights and freedoms (ZMINA);
• Reform of the Prosecutor’s Office (Tomorrow’s Lawyer);
• Reform of the Bar (Tomorrow’s Lawyer);
• Reform of legal education (Ukrainian Bar Association).

Why is the Shadow Report necessary?

The Shadow Report is a tool through which civil society organizations, experts, and other stakeholders provide their independent assessment of the performance of the government and other official bodies.

As a rule, such a document supplements and presents alternative information to the reports submitted by the government. That is, an alternative analysis helps to identify shortcomings or problems in the implementation of state policy, as well as to draw attention to critical problems that the government could downplay or fail to highlight. The report is called “shadow” because it is not an official document.

For the public, the shadow report can become an effective tool in the interaction with the Delegation of the European Union and the Commission in the Negotiation Process, providing strong arguments to support or demand additional changes.

Key points and conclusions regarding the fight against corruption based on the analysis by Transparency International Ukraine

The Anti-Corruption section consisted of 8 parts, in which we identified 94 problems and, accordingly, provided 94 recommendations. Next, we will consider the main proposals that we have provided.

National Anti-Corruption Strategy and State Anti-Corruption Program

These two comprehensive documents are fundamental in the field of countering corruption and should provide the state and various stakeholders with a clear direction of movement and the goals we would like to achieve. The anti-corruption strategy for 2021–2025 was adopted by the parliament in June 2022; on March 4, 2023, with a delay of two months after the deadline set by the law, the Cabinet of Ministers of Ukraine adopted the State Anti-Corruption Program (SAP).

Various experts, including European ones, insisted on the idea that the anti-corruption strategy does not need to be approved by the parliament; instead, this can be done by the government. However, given the importance and the scale of the strategy and the repeated declarations of the president and the Verkhovna Rada regarding the priority of corruption fighting, we at Transparency International Ukraine consider it necessary to preserve the current approach to voting for the Anti-Corruption Strategy by the parliament.

As for the effectiveness of the SAP and the process of its implementation, there are indeed a number of important points that, in our opinion, should be improved.

The SAP is a comprehensive document that covers key corruption field-specific problems, and the program implementers are 109 government bodies, enterprises, institutions, and organizations. Unfortunately, the clarity of the wording of some problems and measures, as well as the deadlines prescribed in the document, already lead to delays and make it difficult to monitor the implementation of the program in general. Considering the number of participants involved, the issue of the on-paper implementation of SAP measures remains relevant. However, the question of both the resources of the NACP to monitor the implementation of the program and the capabilities of the bodies that must carry out specific measures of the SAP is not fully resolved as of today.

Thus, it is necessary to review and reformulate SAP measures, the deadlines for their implementation, and the responsibility of the implementers. In addition, it is necessary to analyze and revise the essence of certain SAP measures considering new circumstances and changes. Changes to the legislation need to be introduced at the higher level to provide for the possibility of including representatives of donors and civil society in the Coordination Working Group on Anti-Corruption Policy, as well as to optimize the format of its operation.

Anti-corruption institutions

Within the framework of this section, experts analyzed the institutional capacity, independence, and evaluation of the activities carried out by the anti-corruption ecosystem institutions—the NABU, the SAPO, the HACC, the ARMA, and the NACP—as well as the practice and effectiveness of the application of criminal legislation and confiscation of assets.

All anti-corruption bodies have already had the opportunity to select their senior management several times.Today, one of these models, namely the rules for selecting the head of the NACP, can be considered the best standard.

Therefore, at the very least, amending the legislation and providing that, according to the results of the competitive selection for the positions of the NABU and the SAPO heads, selection commissions will choose only one candidate, remains relevant. In the future, they will submit a proposal for their appointment to the Prime Minister or the Prosecutor General.

The matter of selection and working with personnel in anti-corruption bodies is also essential. The number of NACP employees has not changed since the institution’s reboot, when the number of the body’s functions increased. The tasks it faces definitely require it.

Therefore, it is necessary to improve the criteria for evaluating NABU detectives, focusing not only on quantitative, but also on qualitative characteristics. As for prosecutors, in particular SAPO prosecutors, a system needs to be introduced to assess their performance according to predetermined criteria.

However, the issue of personnel in the HACC is probably of the highest priority. It is crucial to legislatively extend the term of office of the Public Council of International Experts. Thus, its work will cover the period of competitions, which are necessary to ensure the full staffing of HACC judges.

In addition to institutional capacity, an important aspect in the operation of anti-corruption bodies is their independence. Nevertheless, the need to enhance the procedural weight of the SAPO head has still not been resolved. After all, among other things, the SAPO head still cannot initiate criminal proceedings and approve the conduct of investigative actions against MPs.

Of course, institutions must develop and have all the necessary resources to perform their functions effectively. However, prosecution for corruption offenses does not depend solely on this.

Therefore, in addition to the above, it is also necessary to improve the institution of countering the abuse of procedural rights in criminal proceedings and the institution of agreements, to summarize case law, etc. Measures should be taken to expand the grounds for stopping the expiration of the statute of limitations.

The issue of tracing, finding, and confiscating corruption-tainted assets remains no less acute. At the very least, it is necessary to improve measures for the confiscation of corruption-tainted assets and to bring the property confiscation procedure in line with generally accepted international standards. Improvements are also needed in terms of the means to trace and manage seized assets due to the enhanced institutional capacity of the ARMA.

Restoration of mandatory submission and checks of e-declarations of officials

In 2023, the parliament passed legislation to restore mandatory electronic declaration by officials after a suspension at the start of the full-scale war. However, the Law of Ukraine on Prevention of Corruption still contains provisions that are weakly substantiated and need to be corrected.

For example, the possibility for MPs not to indicate in their declarations the information about compensated rented real estate up to 75 square meters should be excluded; information about the same asset to be indicated in only one section of the declaration should not be allowed; and the range of declarants—officials of a legal entity under public law, etc.—should be expanded.

When e-declaration was suspended, the NACP could only monitor the lifestyle of officials. In autumn 2023, the National Agency approved the relevant procedure, but it still does not clearly define the terms and powers of the NACP employees. Accordingly, the NACP should review its approaches to regulating the lifestyle-monitoring mechanism to avoid excessive interference in the private lives of declarants prohibited by law.

After the resumption of e-declaration, the NACP introduced the automation of full checks of hundreds of thousands of declarations, which was also perceived by members of the public extremely critically. In practice, it remains unclear how a number of declarations, in which significant amounts of cash, cryptocurrency, foreign assets, etc. are indicated, in the absence of relevant registers or automatic access to them, can successfully pass an automatic check.

Therefore, the NACP must return to the previous concept of manual full checks of declarations.

Corruption risks management, conflict of interests, and the institution of whistleblowers

Although the Law on Prevention of Corruption was last updated in 2021 with fairly progressive separate whistleblowing provisions, it still provides protection only for corruption whistleblowers and not for other abuses. This, in particular, contradicts the legal framework of the European Union.

Therefore, a separate legislative document should be adopted, which would provide for a “broad definition” of a whistleblower of socially necessary information, so that Ukrainian legislation fully meets the requirements of Directive 2019/1937 of the European Parliament and the Council of the EU.

Likewise, the Unified Whistleblower Reporting Portal, launched by the NACP in September 2023, still has significant functional flaws, as it remains inconvenient in use. The portal must meet international standards and best practices in terms of guaranteeing the anonymity and confidentiality of whistleblowers.

In addition to the above, the Anti-Corruption section contains the following issues:

• resumption of political party reporting;
• results of an independent external assessment of the NACP’s performance;
• legislative regulation of excessive influence of oligarchs and lobbying;
• investigation of anti-corruption cases by the National Police of Ukraine, the State Bureau of Investigation, and the Security Service of Ukraine.

Compiling the Shadow Report 

To compile this report, the coalition of civil society organizations developed a methodology. Its purpose was to carry out an alternative independent assessment of the condition of Ukraine’s state policy in the areas defined in Chapter 23 Justice and Fundamental Rights of the European Commission Report, form conclusions about the effectiveness of the selected mechanisms for achieving goals, and provide recommendations with their vision for solving the identified problems.

Considering the methodology, the experts of the coalition of civil society organizations for each area outlined in the report conducted an analysis of national and international legislation, draft regulations, the case-law of the judicial authorities of Ukraine and the European Court of Human Rights, research and reports of state and civic institutions, materials in the media, as well as data obtained through requests for access to public information.

When preparing our Anti-Corruption part of the report, Transparency International Ukraine applied not only its expertise, but also included the widest possible survey of the opinions of other civil society representatives. This, in our opinion, made it possible to develop comprehensive recommendations and assessments of the current state of affairs. For this purpose, more than a dozen semi-structured interviews were conducted with various experts. We are grateful to the respondents for their time.

The conclusions presented in the report are based on official and statistical data with relevant references. Institutions were assessed primarily for their capacity, independence, sustainability, and accountability, including under martial law and related restrictions.

For reference

The Agency for Legislative Initiatives (ALI) is a leading independent Ukrainian think tank whose activities are aimed at strengthening the institutional capacity of the Parliament and Government, continuing European and Euro-Atlantic integration, supporting the stabilisation and reconstruction of Ukraine to overcome the aftermaths of the Russian Federation’s aggression, monitoring and backing reforms in justice and security, political and civic awareness-raising.

Transparency International Ukraine (TI Ukraine) is an accredited chapter of the global movement Transparency International. The organisation takes a comprehensive approach to implementing changes to reduce corruption in certain areas: it helped to create and subsequently transferred to the state the Prozorro, Prozorro.Sale, eHealth and ProZvit systems. TI Ukraine has also implemented the City Transparency and Accountability Rankings, built the DOZORRO community to monitor public procurement, and co-founded the RISE Ukraine coalition to promote the principles of integrity and efficiency in reconstruction.

ZMINA Human Rights Centre – The Centre is engaged in information, educational, monitoring, analytical, and advocacy activities in the field of human rights. It protects human rights defenders and civil society activists in Ukraine, including those in occupied Crimea. Following the onset of large-scale Russian aggression, ZMINA, together with 38 other CSOs, created the “Ukraine 5 AM” Coalition, which documents war crimes and aims to protect the victims of Russia’s armed aggression in Ukraine and bring to justice the top leadership of the Russian Federation as well as the direct perpetrators of these war crimes.

Tomorrow’s Lawyer is a non-governmental organization that promotes the institutional development of justice to strengthen the rule of law and protect human rights. Since 2016, the NGO has been conducting research on state policy and the state of affairs in the justice sector while also developing recommendations for their improvement and advancement. A key priority of the organization is the professional development of the legal community.

The Ukrainian Bar Association (UBA) is an all-Ukrainian non-governmental organisation founded in 2002 and currently uniting more than 8000 lawyers. The Association’s activities include promoting the development of the legal profession, improving legislation, implementing ethical standards, and protecting the professional rights of its members and human rights in general.

This report was prepared with the financial assistance of the European Union within the framework of the EU Pravo-Justice Project. Its contents are the sole responsibility of the Transparency International Ukraine and other civil society organisations and do not necessarily reflect the views of the European Union.