Following the signing of Draft Law No. 13271-1, officials will have more leeway to live beyond their means. What changes does this law introduce to the system of financial control? And why might officials come out ahead — even with millions in assets of questionable origin?

To begin with, let us recall: corruption is a hidden phenomenon. It is not always possible to catch a bribe-taker “red-handed” with a suitcase of cash. Bribes may take the form of apartments, land plots, and other assets.

That is why, after the Revolution of Dignity, Ukraine finally moved from ineffective paper declarations to public electronic asset declarations, requiring officials, who are paid with taxpayers’ money, to disclose their wealth. The state established a special agency (NACP) to verify these declarations and to identify discrepancies between an official’s income and lifestyle. In parallel, the Criminal Code was amended with a provision on “illegal enrichment,” punishable by imprisonment in cases of major discrepancies.

Over time, the system expanded further, introducing a simplified civil confiscation mechanism for smaller unlawful assets. Moreover, following the controversial Constitutional Court decision, sanctions for false asset declarations were reinstated, including possible imprisonment.

Draft Law No. 13271-1, adopted by Parliament, was presented as a step toward strengthening liability for corruption-related offenses. The results of its implementation will be seen later, as investigations under the new provisions are still ongoing. Yet even now, the question arises: does this law bring Ukraine closer to genuine accountability, or does it merely simulate progress?

What questions would we like the participants to answer during the final interviews? 

On February 20, the Commission for the Selection of a new NACP Head decided on the list of candidates admitted to the final interviews. This will be the last stage of the competition before the selection of the winner. Subsequently, the commission must present the winner to the government, and the Cabinet will appoint them to the post.  

This selection has been largely ignored by the media community, perhaps due to a considerable amount of other news, but first of all because, so far, this competition is not as scandalous as the SAPO Head competition and is conducted much faster than, for example, the competition for the selection of the NABU Director. 

But, of course, this in no way diminishes the importance of selecting the future Head of the NACP because, in the next four years, this person will be responsible for the formation of Ukraine’s anti-corruption policy, the verification of electronic declarations of officials and financial statements of parties, and many other important things.  

So, what is going on in this competition? Who might win it? Find out below.

This year, in the 2023 Corruption Perceptions Index, Ukraine scored 36 out of 100. Read the explanation of Transparency International Ukraine experts to find out what this result means.

The growth of Ukraine by 3 points in the study is one of the best results in the world over the past year. Now we are ranked 104^th out of 180 together with Brazil, Serbia, and Algeria. The average score in the world is 43, and in the EU countries — 64 points.

36 points is the best indicator of our country in the history of the Index. Another 16 countries, such as Estonia, Latvia, and Moldova, also showed the highest indicators this year. During the Yanukovych regime, in 2013, Ukraine was closer to the bottom of the Index with 25 points and was ranked 144^th. Now we are almost in the middle of the list. 23 countries, including Russia, Iran, and Oman, achieved their record-low scores in the Index.

Find out the details about the impact of the 2023 CPI, how Ukraine managed to achieve such a result, how to improve it in the future, and the issues prevailing in this field nowadays.

Ukraine’s anti-corruption system has become stronger over the past 3 years, says a new study by Transparency International Ukraine. These results would have been unattainable without the help from international partners. Here’s why.

 

“Ukraine is the second most corrupt country in Europe!”

“Things with bribery do not change at all for a long time now!”

“The anti-corruption reform doesn’t work in Ukraine!”

In recent weeks, and even before that, these statements were repeated on some international platforms, on the media and from foreign officials. But how much truth is there to these statements, and how much of them is just the enemy trying to distort the perception of our country? 

To be brief, these ideas are manipulative and inaccurate. But looking into it, we have a very specific response to prove why that’s just not the real situation.

On October 12, Transparency International Ukraine, an accredited chapter of the global movement Transparency International, published the second study of capacity, governance, and interaction of Ukraine’s anti-corruption agencies. It actually shows that the situation with anti-corruption is not as urgent as our enemies like pointing out.

This is especially evident when comparing this data with the first such study, which came out in the summer 2020, covering the period starting from 2015.

The new report covers the activities of five agencies: the National Anti-Corruption Bureau of Ukraine (NABU), the Specialized Anti-Corruption Prosecutor’s Office (SAPO), the High Anti-Corruption Court (HACC), the National Agency on Corruption Prevention (NACP), and the Asset Recovery and Management Agency (ARMA). We assessed their independence, transparency, accountability, integrity, resources, and interaction with each other and other stakeholders. Our analysis shows that every agency of the anti-corruption ecosystem has improved over the past three years. Their overall average score increased from 3.4 to 3.9 points on a scale from 1 to 5 over this period, which is quite telling. While the ARMA is trailing behind with 3.4 points, the HACC remains the leader of the rating with 4.6 points. And the NABU’s score increased the most — from 3.6 to 4.3 points. The improvement of the NACP and the SAPO is slower, with 3.7 and 3.5 points, respectively.

Today, with 341 votes, the Verkhovna Rada of Ukraine has adopted draft law 9534 with the President’s proposals after vetoing it. Earlier, MPs decided to restore e-declaration and resume the checks but sought to close the register of declarations for a year. This caused a huge public outrage.  

Can we assume that there is a happy ending? 

Unfortunately, the ending is only partially happy. Before that, parliamentarians adopted a number of quite dubious amendments, to which the President did not react and did not propose to correct them.  

Some of the changes introduced by the MPs do not simplify the declaration system, as provided for by the memorandum with the IMF, but on the contrary, complicate it, adding many rules and exceptions. Other amendments unbalance and weaken the rules of declaration. In the future, this will require the resolution and adoption of a new version of the Law On Prevention of Corruption to correct this problem.  

So, which negative aspects of this law require our attention?

Corrupt officials cannot but talk about electronic declaration. Why would it be granted so much attention? However, we at Transparency International Ukraine are not the only ones talking about the need to restore this rather simple, but very effective procedure.

In a recent interview, an MP said that electronic declarations would not be a “panacea.” Yes, these are not the pills that will cure all corruption in the state. 

Declarations of officials are not a cure for all diseases. But they form immunity so that the tumor of corruption does not spread further. Declarations of officials deter and prevent corruption; this is no less, but even more important than guilty verdicts.

It is worth considering the current state of things. The petition for the restoration of the declaration received the necessary votes. The president reacted to it.  

A memorandum with the IMF was signed with a commitment to resume declarations by the end of July. International partners are increasingly emphasizing this need. 

There was an oral assessment of the EU regarding the implementation of 7 recommendations to move towards the opening of membership negotiations. By the way, the “anti-corruption” recommendation to conduct effective investigations of high-profile corruption was not considered as fulfilled because it was not fully implemented. Indeed, how can there be a full-fledged investigation of corruption at a high level, when declarations are submitted by only several ministers and dozens, and not even hundreds, of MPs.  

After all, the chair of the Servant of the People faction and the author of the existing draft law on the resumption of e-declaration, David Arakhamia, promised back in May that the relevant changes would be adopted by the Rada in the first reading by the end of June, and in general, it would be adopted by the end of September. 

But June has passed, and nothing has changed. 

The question arises: how much longer to wait for the resumption of declaration? 

The previous experience of the lengthy implementation of anti-corruption reforms is not so positive as to hope for the activity of parliamentarians in this matter. 

The competition for the SAPO head lasted more than a year and a half. For more than 2 years, we fought for the creation of the HACC. Political parties have not submitted their financial reports for more than 3 years, and it is unknown when the parliament will resume reporting and verifications. The ARMA has been without a permanent leader for more than 3.5 years, although even today, this issue can hardly be considered as resolved.  

The country has lived for five and a half years without a new anti-corruption strategy. The NABU has not been allowed autonomous wiretapping for more than 6.5 years; Ukraine promised the IMF to fulfill such a commitment before December 2016. Although the relevant legislation was adopted in autumn 2019, it still does not function.  

This list is never-ending. Isn’t it time to finally fix what has been broken? 

The first calls for the resumption of mandatory filing of declarations, their publication in the register, and the resumption of verification were made a year ago, last summer. In the second year of the delay, the question arises: will Ukraine be able to get out of the vicious circle of lack of political will? We know it could last 3, 5, and even 7 years.  

The answer should be given by MPs — draft law 8071 is awaiting its adoption in the second reading. We have not yet seen the alternative draft law that David Arakhamia mentioned. Time is running out.

Ukraine aspires to the EU, and the electronic declaration was a step towards it. However, after February 24, MPs made the submission of declarations voluntary. How did the EU react to this, and would it be possible to restore such an obligation? Let’s try to figure it out.

 In June 2022, the European Union granted Ukraine the status of an EU candidate. We have received 7 recommendations from the European Commission, which must be implemented so as not to lose the candidate status. Moreover, their successful implementation will allow us to move on to the next step on the path of European integration — the actual negotiations on accession to the EU.

 One of the 7 recommendations concerns the effective investigation of high-profile corruption. The Commission recommends further strengthening of the fight against corruption, in particular at a high level. And this should be done precisely by ensuring a proactive and effective investigation. Electronic declarations of officials would be very helpful here.

In the February independent monitoring of the implementation of the EU recommendations by a consortium of specialized analytical centers and civil society organizations, including Transparency International Ukraine, the implementation of the above recommendation received 7 points out of 10 possible. And the resumption of electronic declaration seems to be one of the priority actions that Ukraine has yet to take in this area. 

The fact is that the functioning of the electronic declaration regime can not only contribute to the prevention of corruption, but also help with the punishment for it. And this is not only about the current article of the Criminal Code, with a prison sentence for a serious lie in the declaration or its failure to submit it. Declarations submitted by officials can also reveal signs of illicit enrichment, for which a separate criminal punishment is provided — even with a longer term of imprisonment. During the verification, it is also possible to expose alleged unjustified assets or conflicts of interest.

 However, all this can remain in the dark. 

This year, Ukraine scored 33 points out of 100 in the Corruption Perceptions Index 2022. Transparency International Ukraine experts explain what these indicators mean.

Every year, the global movement Transparency International presents the Corruption Perceptions Index (CPI) study —the largest study that gives a comprehensive vision of the fight against corruption in the world. And every year, Ukraine awaits the update of our data in the CPI because the topic of corruption over the past decade has remained an acute one.

Over the past year, our country has added 1 point to its indicator and now ranks 116th, together with Algeria, Angola, Zambia, Mongolia, El Salvador, and the Philippines with 33 points. Bosnia and Herzegovina, the Gambia, Indonesia, Malawi, Nepal, Sierra Leone are one point ahead of us, and the Dominican Republic, Kenya, and Niger have one point less than Ukraine.

Our scores can be viewed from several perspectives.

First of all, 33 points are the highest indicator of our country over the past 10 years. 

At the same time, we already had such a score two years ago — according to the results of the CPI-2020. The data of that year indicated the anti-corruption results of the “turbo mode” of the newly elected (at that time) Verkhovna Rada, the launch of the High Anti-Corruption Court, and the reboot of the NACP.

However, a year later, Ukraine “rolled back” by one point — the result, in particular, of the attempts to delay the competition for the election of the SAPO head, interference in anti-corruption investigations (for example, against the deputy head of the Presidential Office Oleh Tatarov) and, of course, the scandalous decision of the Constitutional Court, which then practically eliminated the electronic declaration and generally blocked most of the anti-corruption reform.

But 33 points today is a completely different 33 points than in 2020. After all, this increase in one point is following the most difficult year in the history of our country. How much the war has affected the perception of corruption in Ukraine, and what more the study considers — let’s find out below.

Seven steps to the EU: how is Ukraine moving towards the EU? The legal advisor of TI Ukraine has analyzed how our pace in implementing reforms has slowed.

Oleksandr says that the progress in 2.5 months is minimal. Ukraine got 4.7 points (we had 4.4 points).

“As far as anti-corruption is concerned, there are still obstacles, for example, “Lozovyi amendments” have not been canceled, interfering with high-profile investigations. Neither is the autonomous tapping for the NABU implemented. At the same time, the obligation to declare is suspended, and the declaration register is still closed. This should be changed,” Oleksandr Kalitenko noted.

The lawyer also spoke about the intensification of investigations after the appointment of Oleksandr Klymenko, new SAPO head, and the resumption of the competition for the NABU director.

You can find out more about the problems and victories on the European integration path by listening to the discussion on Channel 5.

You can also read the full analytics, “Candidate Check-2: Where Ukraine is in the Implementation of the Seven EU Recommendations regarding Candidacy.”

 

More than 110 billion dollars — this is how much, according to the most recent estimates of the “Russia Will Pay” project experts, the infrastructural losses from the war amount to. To restore the destroyed assets, at least 188 billion dollars is needed. 

The large amounts of money coming into the country may become a window of opportunity for corruption. 

To prevent abuse during recovery, we have to develop and adopt balanced decisions that will allow the full application of anti-corruption legislation. 

Anti-corruption reform has been underway in Ukraine since 2014. Before the full-scale war, Ukraine managed to create a full-fledged ecosystem of bodies and a legal framework for fighting corruption. 

However, many problems remain unsolved. For instance:

• The Asset Recovery and Management Agency (ARMA) remains without a leader; 
• the same situation is with the National Anti-Corruption Bureau; 
• the judicial reform is incomplete; 
• whistleblowers do not have full protection;
• attacks on the Prozorro electronic public procurement system and the Prozorro.Sale online auction system for the sale and lease of property continue; 
• datasets remain closed, which increases corruption risks.

But both the government and civil society are working on it. For example, in June, the Parliament adopted the Anti-Corruption Strategy for 2021–2025. Another strategic document was presented by the National Council for the Recovery of Ukraine from the Consequences of the War at the International Conference in Lugano. This is a draft Recovery Plan. It envisages, in particular, further steps of the government in the anti-corruption sphere. Here is more information. 

Goals 

The National Recovery Council identified 6 goals that will help to avoid corruption:

1. Adherence to international anti-corruption obligations.
2. Implementation of a comprehensive anti-corruption policy and elimination of corruption-causing factors in legislation.
3. Ensuring the independence and efficiency of anti-corruption bodies.
4. Creation of an effective system for combating money laundering and tracing and recovery of assets.
5. Promoting a culture of integrity in the public and private sectors.
6. Elimination of corruption risks arising during recovery measures.

The fight against oligarchs is yet another issue. The government proposes to strengthen the capacity of the Anti-Monopoly Committee, as well as to carry out de-oligarchization measures in accordance with the requirements of the Venice Commission.

The implementation of each of these goals is divided into separate detailed tasks, as well as into three stages: 

• urgent (to be implemented during 2022); 
• medium-term (2023-2024);
• long-term (2025-2032). 

At the same time, the Plan does not always have clear indicators and deadlines. 

Problems and solutions

A number of challenges must be overcome to achieve these six goals.

Absence of the heads of the ARMA and the NABU. The competitive selection of the head of the ARMA has been in the works for 2.5 years. The final interviews have recently ended, but none of the seven candidates showed a high level of integrity and managerial skills, in TI Ukraine’s opinion. 

In this situation, a reset of the competition would seem like a sound decision. We hope that the commission will reach a similar conclusion at the next meeting.  

The NABU competition is only at the initial stage. Before the full-scale war, the commission was gradually forming, but since February 24, all processes have been suspended. 

Recently, the Cabinet of Ministers has unblocked the selection by making amendments which enable all commission members to participate. Previously, the government considered the participation of international expert Drago Kos in both the SAPO and the NABU commissions problematic.

According to the Recovery Plan, the competitive selection in the ARMA and the NABU should be completed by the end of 2022. The winners should also be appointed without delay. A similar promise was made regarding the SAPO competition, and it has already been fulfilled. In July, the chief anti-corruption prosecutor was finally appointed. However, the SAPO is yet to reach full independence. 

During the year, it is necessary to develop and adopt laws which would extend the SAPO’s institutional autonomy, improve the selection procedure for administrative and prosecutorial positions, and introduce external audit of the prosecutor’s office.

Martial law also affects the work of the anti-corruption sector. For the sake of security, full checks of officials’ declarations are not carried out, certain information in the registers is closed. However, the Plan envisages that this leeway should be abolished as soon as this year. 

In particular, the obligation of political parties to submit reports on property, income, and expenses should be restored, the procedure for monitoring the lifestyle of officials should be regulated, and the Unified whistleblower reporting portal should be put into operation.

This decision makes sense, because open data helps to reduce the space for corruption. For example, without an open register of declarations, civil society will not be able to closely monitor the actions of officials.  

Among other things, there is no transparent mechanism for receiving and using funds for reconstruction and humanitarian aid in Ukraine. 

Finally, some norms of anti-corruption legislation do not meet the international standards of the EU. If we want to become a full-fledged member of the European Union in the future, we must integrate a number of requirements to increase control over the activities of political parties and the conduct of election campaigns, the effectiveness of preventing corruption and conflict of interests.

Shortcomings

Some proposals of the Recovery Plan are quite controversial. For example, it is proposed that the High Anti-Corruption Court should have the authority to consider administrative cases regarding violations of rules, prohibitions and restrictions in the field of financing political parties and submitting financial statements. However, this may lead to the HACC being ruled unconstitutional. 

There are also questions regarding privatization. The Plan provides for the sale of non-performing assets after martial law is lifted. However, many properties and premises not used by the government can be sold now, within the framework of privatization through transparent electronic auctions. 

State property should bring profit into the budget instead of burdening it.

The anti-corruption reform should support the process of Ukraine’s recovery. TI Ukraine has repeatedly called on representatives of the authorities to implement relevant anti-corruption changes provided in the recommendations of the Corruption Perceptions Index or in a joint document with the Basel Institute of Management. At the same time, combating corruption must comply with all international obligations. Otherwise, we will allow kleptocrats to profit off of millions of Ukrainians and we will lose the chance to join the European family. 

In 2021, Ukraine lost 1 point in the Corruption Perceptions Index (CPI) and now ranks 122nd out of 180 countries in the CPI list. What is behind this score, is it worth worrying about, and what does the general trend of Ukraine indicate? Let’s figure it out.

First of all, let’s start with the fact that the indicators of such a long-term study should be considered in dynamics. After all, the CPI indicator is not a point on the map, but a path. Today, the score of Ukraine is better than it was 10 years ago, but this improvement is due to the changes that occurred immediately after the Revolution of Dignity. Since 2018, Ukraine’s steady growth has stopped. 

In general, over the past 10 years, the gradual improvement of our country’s performance has been noticed and noted by the compilers of the Transparency International Corruption Perceptions Index — Ukraine has confidently entered the list of countries that have made a significant increase in points over this decade.

Can we call the current situation “stagnation”? Not really. Our speed recorder indicates few changes, but we are moving. Over the past year, as before, many positive events have taken place on the Anti-Corruption Front — the powers of the NACP were restored, the institution of whistleblowers was preserved and developed, HACC sentences were passed, and the civil forfeiture instrument was launched. However, too often the positive in one sector was invalidated by the negative in the other. 

 

What hinders us on this journey, and what drives us?

Evaluating a country is more difficult than visiting an auto repair shop because it is not an easy task to study the results of actions and interactions of various government institutions at the same time. Our indicator was formed based on 9 different studies of independent sources that show the state of individual systems of the anti-corruption car in Ukraine. According to the data, 2 sources increased our scores, 3 left them unchanged, and 4 lowered them. 

We received the greatest reduction in such studies:

•  the Bertelsmann Stiftung’s Transformation Index, which was conducted in the first half of 2021 through a qualitative survey of experts.

The indicator of Ukraine, obviously, reflected the situation when the Constitutional Court with its decision of October 27, 2020, discharged many officials from liability for false declarations. According to the NABU, at that time, about 180 facts of deliberate entering of false information by officials in e-declarations were investigated. 7 persons were served with charges, but due to the decision of the Constitutional Court, all these investigations were subject to closure. The HACC closed 17 criminal proceedings and overturned sentences. Consequently, officials charged of abuse avoided any liability.

•  In the annual World Competitiveness Ranking and in the data of the World Economic Forum Executive Opinion Survey, where surveys were conducted among business leaders. There were also events that could cause pessimism among the Ukrainian and foreign business community.

At the same time, Ukraine has gained 2 points according to the PRS Group International Country Risk Guide, which assesses corruption within the political system. Most likely, this growth concerned the launch of the electronic register of political party reporting Politdata by the NACP — the register started working in the spring of 2021. However, the long-awaited electronic reporting for political parties has not yet been fully operational, and the very process was suspended by law back in the spring of 2020 due to the COVID-19 pandemic. 

Ukraine gained another 4 points in the study Varieties of Democracy, created on the basis of, among other things, the indicator of corruption in the judiciary. Obviously, the judicial reform that was launched last year by the law, but not yet implemented is not enough for a more powerful leap in this study.

Ukraine’s score remained steady in the 2021 report of Freedom House Nations in Transit. It expresses concern about the growing interference in the work of the HACC, in particular, it refers to the proceeding in the CCU regarding the constitutionality of the HACC as a specialized court. The researchers also noted an overall growing pressure on anti-corruption bodies in Ukraine. The Anti-Corruption Strategy adopted by the Parliament only in the first reading, which has been waiting for final adoption for more than a year, is also mentioned.

In other words, we see that researchers around the world notice the unpatched holes in our anti-corruption ecosystem. This has a significant impact on the perception of not only corruption in the country, but also the country itself in the world. And if we aim to get into the anti-corruption zone, we should better solve the existing breakdowns.

 

Where we tried to get but couldn’t

For high-quality progress without “rollbacks,” we should regularly work on errors. It’s great if we learn to give up what doesn’t work and look for more effective ways to achieve our goals.

According to the results of the last year’s CPI study, TI Ukraine provided the authorities with 3 blocks of recommendations, which could improve our performance. As of the end of 2021, none of the recommendations were fully implemented: two were partially fulfilled and one wasn’t fulfilled at all.

We partially managed to “resolve” the situation in the field of public property management. In a year, we managed to unblock and prepare objects for privatization. However, the accounting of public assets and access to it still need to be improved. The issue of attempts to exclude certain procurement transactions from the scope of the Law of Ukraine “On Public Procurement” is still quite acute.

The situation is worse in the direction of the independence and capacity of the anti-corruption infrastructure. Not only are the SAPO and ARMA competitions not completed, but they are also conducted with a lot of outrageous “faux pas.” Do not forget that the current CPI already considers the history with the CCU, which in the fall of 2020 paralyzed the NACP’s activities. Although the issue of counteraction of violations in the HACC’s judicial process seems smaller-scale, it is no less important — the relevant draft law was not even considered by MPs.

However, we still see some positive aspects in this sector. For example, last year, MPs did vote for the necessary changes to legislation on the ARMA, this was another step towards improving the management of seized assets. And with the newly adopted Law, the NABU is getting closer to being able to independently conduct wiretapping of potential corrupt officials. 

What was unfulfilled: again, the formation of a professional and independent judiciary. Now, attempts are being made to resurrect the HQCJ and restart the HCJ; however, the current HCJ blocks the reforms in every possible way. Delaying the process creates risks of invalidating all efforts to transform the judicial system. Another problem: the KAC continues to work and issue shameful rulings, although the law on its abolition is still waiting in the wings in the Parliament. And the last nail in this construction is the story with the (under)reformation of the Constitutional Court, considering all recommendations from the Venice Commission. 

 

What should we do? Let’s not reinvent the wheel

In order to keep going, we need to constantly pedal and move forward. Here are the recommendations for 2022 that, we believe, will help reduce the level of corruption:

1. To complete the competitions and select professional, independent, and honest heads of anti-corruption ecosystem bodies: the SAPO, the ARMA, and the NABU.
2. To adopt the national Anti-Corruption Strategy and the program for its implementation.
   
3. To reform constitutional justice, considering the conclusions provided by the Venice Commission.
   
4. To ensure transparent accounting of public property and continue the course of privatization.
   
5. To minimize the risks of adopting draft laws which exclude procurement from the scope of the Law of Ukraine “On Public Procurement.”

 

As we can see, this is a fairly specific distance of 5 steps, after which we will be able to significantly advance along the planned anti-corruption route. Of course, it’s not so simple, and another obstacle can always appear on our way, which can completely throw us off course, preventing our wheel from rolling. 

But if the actions of all leaders are coordinated and confident and correspond to the declared direction of overcoming corruption, we will keep the balance and be able to get to the desired destination.

We must understand that it is important to demand changes because stopping the decline and returning to at least slow growth in the Index will depend not on the next government after the elections, but on the current one. Because +6 points in 10 years is not a good enough result for a country whose leaders have set the fight against corruption as one of the priority goals of their activities. And with such speeds, you can’t get very far.