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.
The National Recovery Council identified 6 goals that will help to avoid corruption:
- Adherence to international anti-corruption obligations.
- Implementation of a comprehensive anti-corruption policy and elimination of corruption-causing factors in legislation.
- Ensuring the independence and efficiency of anti-corruption bodies.
- Creation of an effective system for combating money laundering and tracing and recovery of assets.
- Promoting a culture of integrity in the public and private sectors.
- 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.
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.