Automatic Fines for Late Submission of Declarations: Shortcomings of New Draft Law

On August 10, 2023, the Verkhovna Rada voted in the first reading and adopted the draft law No. 9587-d as a basis. It proposes to introduce automated imposition of fines on declarants who did not submit the declaration on time. 

Interestingly, this draft law was registered in the Parliament on August 9, literally the day before its consideration. At the time of voting in the first reading, the full text of the document was not even available on the website of the Verkhovna Rada, so the public had not had the opportunity to get acquainted with it before the consideration by parliamentarians. This is despite the fact that the issue of electronic declaration has been among the key ones for discussion by the anti-corruption community for a year. The text of the draft law was published a few days after it was adopted in the first reading. 

What MPs want to change and what such innovations can lead to — find out in the analysis below.

How it used to be 

Today, cases of late submission of the declaration are considered by administrative courts on the basis of protocols drawn up by the NACP and with the obligatory participation of the declarant and the prosecutor. 

 Drawing up a protocol, consideration of the case by the court is often lengthy, and therefore the terms for imposing fines for offenses often expire before a court decision is made. This was one of the motives for this legislative initiative.

What is proposed in draft law No. 9587-d? 

The document proposes to amend the Code of Ukraine on Administrative Offenses and other laws of Ukraine in terms of introducing automatic consideration of cases and imposing fines for violation of the deadline for submitting declarations without drawing up a protocol. The system based on the Unified State Register of Declarations will work according to a similar principle as automatic recording and imposition of a fine for violation of traffic rules.   

In short, the following steps of the new procedure are suggested.                                                       

1. The system automatically records the untimely submission of the declaration.
2. The authorized person of the NACP issues a resolution imposing an administrative penalty for late submission of the declaration.
3. The resolution is sent to the offender.
4. The offender pays a fine or appeals the resolution in court.
5. Information about the offender is not entered into the Unified Register of Corrupt Officials.

The new initiative of MPs has both positive and negative aspects. 

On the positive side, it is finally proposed to amend the Law “On Prevention of Corruption” in terms of storing information about declarants in the Unified State Register of Persons Who Committed Corruption Offenses. In particular, it is suggested not to include in the register those officials who did not submit the declaration on time and were brought to administrative liability for this. This deserves support because at the moment, the register is overloaded with data on such persons. 

In addition, it is proposed to establish the following periods for storing information about offenders:                                  

1) on bringing an individual to disciplinary or civil and legal liability for committing corruption or corruption-related offenses — 1 year;

2) on imposing an administrative penalty (fine) on an individual for committing a corruption or corruption-related offense — 1 year;

3) on bringing an individual to criminal liability for committing corruption or corruption-related offenses — until cancellation or removal of a criminal record, but not less than 5 years;

4) on legal entities against which measures of a criminal law nature have been applied in connection with the commission of a corruption offense — 5 years.

After the expiration of these terms, information about the person in the Unified State Register of Persons Who Committed Corruption or Corruption-Related Offenses should be deleted. This corresponds to the legal principle, according to which, with the expiration of a certain period, all negative legal consequences of liability should be terminated regarding a person who was brought to such legal liability. For example, for this purpose, there is an institution of criminal record cancellation.  

Therefore, we believe that these changes are justified and need to be adopted by the Parliament. 

On the negative side, the draft law does not provide for clarifying the reasons for the late submission of the declaration with the declarant. That is, even if there is a valid reason, a penalty will still be imposed on the declarant.  

In addition, the fact that under this procedure, the NACP will independently decide whether to impose a fine instead of a court raises concerns. The declarant, of course, may appeal to the court against the resolution, but only after its adoption by the NACP. Such an appropriation of the powers of the court by the Agency is questionable from the perspective of law and practice since the consideration of such cases is not included in the legally defined mandate of the NACP. In addition, in accordance with Article 124 of the Constitution of Ukraine, “Justice in Ukraine is administered exclusively by the courts. The delegation of the functions of the courts, and also the appropriation of these functions by other bodies or officials, shall not be permitted. The jurisdiction of the courts extends to all legal relations that arise in the State.” 

Moreover, in practice, a similar mechanism is applied only in cases of automatic recording of traffic violations. We see a big difference in this category of cases and cases of late submission of an official’s declaration. 

The developers of the draft law also motivate the new approach to the imposition of penalties for late submission of the declaration by the fact that the automatic recording and issuance of a resolution without drawing up a protocol will significantly relieve the courts. However, since the consideration of the case does not require the declarant to provide explanations, it is logical to assume that the majority of declarants will appeal against the decision to impose a penalty in the courts in order to prove their position.  

Of course, purely statistically, part of the cases will not go to court due to a number of reasons, which are not necessarily related to the fact that the declarant agrees with the imposed penalty. For example, they may miss the deadline for appeal, which is only 10 days from the date of receipt of the resolution in the account of the Unified State Register of Declarations. 

In general, this draft law shifts the responsibility for ensuring the full and proper consideration of such cases from the NACP to the declarants.  

Thus, the new procedure unduly burdens declarants and does not provide them with the right to an effective remedy. 

Conclusions 

Transparency International Ukraine certainly does not support such amendments to the Code of Ukraine on Administrative Offenses. After all, draft law No. 9587-d is unjustified in terms of bringing officials to administrative liability for late submission of the declaration and will violate the rights of declarants. 

Instead, we urge MPs to focus on the second part of the draft law, which concerns the maintenance of the Unified State Register of Corrupt Officials. Such changes are long overdue and will be useful for the corruption prevention system.