European Commission’s Conclusions on Effectiveness of Anti-Corruption in Ukraine

On November 8, the main conclusions of the 2023 EU Enlargement Report on Ukraine as a candidate country were published on the website of the European Commission. The full Report consists of 152 pages.   

The European Commission recommended opening accession negotiations with Ukraine. This, in turn, should be approved by the 27 countries of the European Union at the summit on December 14.  

Two anti-corruption recommendations of the EC — regarding the removal of unreasonable legal restrictions on the powers of the NACP in the field of verifications of officials’ declarations and the adoption of a law on increasing the staffing cap of the NABU — are priorities. The progress on the implementation of these measures (in the event of the approval by the EU countries at the December summit) will be monitored by the Commission to report to the European Council in March 2024. The Commission recommends that the European Council approve the negotiating framework after Ukraine takes key measures. 

In the introduction to the document, the European Commission notes that, despite the full-scale invasion of Russia in February 2022 and the brutal, aggressive war, Ukraine continues to make progress in democratic and rule of law reforms. Granting Ukraine EU candidate status in June 2022 further accelerated reform efforts. 

The Commission also refers to the growth in 2013–2022 of Ukraine’s indicators in the Corruption Perceptions Index (CPI) from 25 to 33 points and the fact that the result of 2022 is the highest since the launch of the updated CPI methodology. 

Let’s break down the anti-corruption achievements noted by the European Commission and find out what we have to do next.

Restoration of e-declaration and the work of the NACP  

One of the achievements noted by the European Commission is the restoration of the electronic declaration system, suspended after the introduction of martial law. However, there are some potential shortcomings related to the powers of the NACP and the data to be verified. The Parliament also adopted a law weakening administrative liability associated with e-declaration, but the President has not signed the document.  

What are the next steps?  

The Commission believes that Ukraine should remove from the law on corruption prevention the provisions restricting the NACP’s powers: 1) to continue verification of assets that have already undergone the verification process; 2) to verify property acquired by declarants before joining the public service, without prejudice to the rules applying to national security during wartime. 

TI Ukraine supports the steps proposed by the EC to ensure the effectiveness of the e-declaration system. We also called for vetoing the law that weakened administrative liability for false declaration, but the President did not veto it. We emphasized that there were problems with the restored e-declaration, which the EU also paid attention to. After all, some amendments added to the legislation, together with opening the register of declarations to the public, unbalance and weaken the rules of declaration.  

Thus, we noted that most of the new loopholes relate to the renewed mandate of the NACP to verify declarations. For example, the fact that now the real estate and cars of declarants acquired before these persons officially became declarants will not be checked. Or the fact that now the NACP is prohibited from verifying information from declarations that has already been verified previously without detecting violations. Given that the quality and completeness of earlier checks in some cases were very ambiguous and the NACP could not use the full range of verification means, this will become, in fact, an indulgence for declarants. 

For example, if the NACP did not use to have access to a foreign register of one of the foreign states and now the Agency received it and found undeclared corporate rights, this may result in no consequences for the declarant. After all, the information in the section on corporate rights was once verified by the NACP, and no violations were found. Another example concerns the recently obtained right of the NACP to receive banking information without a court decision, which hardly managed to become a systematic practice during the checks. We also had questions about the examination data used by the NACP during previous verifications.  

Given that the term of office of the current head of the agency expires in January 2024, the proper and transparent selection of a new head by an international selection commission, as required by law, will be a priority for Ukraine. TI Ukraine, for its part, called for the start of an open, competitive selection of the new head of the National Agency more than a month ago. 

What did the European Commission fail to mention? 

Among the flaws in the e-declaration system that the EC does not mention is that it is now possible to hide all information about the same asset by specifying it only in one section of the declaration or that heads and deputy heads of separate units and branches of legal entities drop out of the circle of declarants. We hope that MPs will pay attention to this too because, in our opinion, it is necessary to correct all the shortcomings as soon as possible by adopting the relevant draft law, without waiting for the register of declarations to open on December 10.  

There are also inaccuracies in the European Commission’s statement that the NACP Independent Performance Assessment Commission recognized the agency as generally effective, while international auditors did not draw conclusions about either the effectiveness or ineffectiveness of the body. The EC emphasizes that the NACP and stakeholders should quickly implement the recommendations of the independent audit.

Appointments in the NABU and the SAPO and the work of the anti-corruption ecosystem  

The new heads of the SAPO and the NABU were appointed in July 2022 and March 2023 after transparent and meritocratic selection procedures involving independent experts. After the appointment of the heads, these institutions strengthened their cooperation and intensified the investigation of corruption cases at the highest level.  

During the reporting period, Ukraine has made some progress, in particular in establishing and consolidating a comprehensive anti-corruption institutional framework and gradually building a track record in investigating, prosecuting, and adjudicating high-level corruption cases.  

What are the next steps?  

TI Ukraine, together with its partners, has already noted the high activity of the investigation of high-level corruption cases of the NABU and the SAPO. To ensure the impact and sustainability of anti-corruption efforts, Ukraine should continue building a credible track record of investigations, prosecutions, and final court decisions in high-level corruption cases, including the seizure and confiscation of criminal assets. 

To cope with increasing workloads, the number of NABU staff, SAPO prosecutors, and High Anti-Corruption Court judges should be increased. 

As far as the priority requirement of the EC is concerned regarding the increase in the number of NABU employees, we support this approach. Currently, according to Art. 5 of the Law of Ukraine On the National Anti-Corruption Bureau of Ukraine, the total number of employees of the central and territorial departments of the NABU should not exceed 700 people; in particular, the senior staff should not exceed 500 people. A draft law on increasing the number of NABU employees from 700 to 1,000 people was registered in the Parliament. However, this draft law proposes to increase the maximum size of the body only from January 1, 2025, and such a step should be taken earlier because the procedure for selecting new employees of the Bureau alone can take a long time. The EC, in turn, also notes that the NABU urgently needs additional staff to work on investigations (detectives, analysts, technicians), and personnel issues are particularly acute in three regional offices.  

Another priority of the reform should be the reform of the forensic service to provide the NABU with timely and unwavering access to forensic expertise during high-level investigations of corruption crimes. In our opinion, although such a reform is definitely a must in our country, the need to create an independent expert institution under the NABU is a priority right now, while the reform of the system as a whole will be taking place. Similarly, the NABU should be able to wiretap telephone conversations without having to rely on the SSU for its practical implementation.  

A new study by TI Ukraine, in addition to the above requirements, included amendments to the law on the NABU to increase the number of detectives and operatives. We also suggested that the Verkhovna Rada establish the interdependence of the minimum number of SAPO prosecutors, NABU detectives, and HACC judges, considering the analysis of the volume of criminal proceedings with which they deal.

Increasing the maximum number of NABU employees will strengthen the function of pre-trial investigation. Given Ukraine’s integration into the EU, post-war reconstruction, as well as the increased requirements of Western partners to the effectiveness of countering high-level corruption, in our opinion, it is important that this increase in staff take place precisely to fill positions directly related to the function of pre-trial investigation. We recommend that the NABU Director take measures to optimize the number of NABU departments not involved directly or indirectly in the pre-trial investigation, and so get an additional reserve for detectives and operatives. 

Substantive and procedural criminal legislation also needs to be streamlined and improved. Because we can already see the problems of its quality and application in general in the decisions to close criminal proceedings due to, according to the judges, the wrong entity that is to extend the pre-trial investigation. 

In addition, the EC points out that the SAPO needs additional protection against possible unlawful interference, and this should be done by improving the selection procedures of the SAPO head and its key officials, increasing the organizational and procedural autonomy of the SAPO, as well as improving the accountability system. We also mentioned the long-awaited need to strengthen the independence of the SAPO and improve the procedure for competitive selection for administrative positions in the body and positions of prosecutors. 

Currently, the Specialized Anti-Corruption Prosecutor’s Office depends on the Prosecutor General’s Office in many aspects of organizing its work. For example, the SAPO does not have a document management department, so all its correspondence passes through the records’ management department of the Prosecutor General’s Office. The same applies to procedural issues: when the powers of the previous head of the SAPO expired, NABU detectives had to coordinate all requests for searches regarding special entities (for example, judges) with the Prosecutor General. Therefore, the SAPO needs to be established as a separate legal entity in the prosecutor’s office system, as proposed by the EC; this is one of the foundations to ensure the independence of the institution. 

There are also questions to the procedure for holding a competition for administrative positions, that is, the head of the SAPO, their deputies, and heads of departments. This is important because the recent competition for the head of this institution turned out to be high-profile and by no means smooth. It lasted almost a year, and when the results of the comprehensive assessment determined Oleksandr Klymenko as the winner, the commission refused to publish the results for another six months and formally declare him the winner. Therefore, it is necessary to improve the procedure for the formation and functioning of the commission to select persons for administrative positions in the SAPO (SAPO head and their deputies) in a similar way to other competitions, such as competitions for the position of the NABU or NACP head. 

To date, the Law of Ukraine On the Prosecutor’s Office lacks provisions that would regulate the procedure for conducting an external independent assessment of the activities of the Specialized Anti-Corruption Prosecutor’s Office (such an audit must be introduced), and disciplinary proceedings against SAPO prosecutors are carried out in a general manner. 

Adoption of the State Anti-Corruption Strategy and Program 

New legislative, strategic, and institutional improvements were adopted, including the national Anti-Corruption Strategy, accompanied by a comprehensive State Program for its implementation. 

The Commission emphasizes that Ukraine has launched an IT system to monitor the implementation of the State Anti-Corruption Program (TI Ukraine covered the topic of this informative portal here), as well as the Unified Whistleblower Reporting Portal.  

What are the next steps?  

Timely and steady implementation of the State Anti-Corruption Program for 2023–2025 should be continued. The EC emphasizes that the legislative framework for the protection of whistleblowers should be completed and fully aligned with the EU acquis, which includes a “broad definition” of a whistleblower, which has long been advocated by TI Ukraine, and is included in the State Anti-Corruption Program and the Anti-Corruption Strategy. 

What did the European Commission fail to mention? 

TI Ukraine welcomed the adoption of the Anti-Corruption Strategy and the State Anti-Corruption Program (SAP), but, in addition to their support, we pointed out the shortcomings of the adopted documents (not specified by the EC); if eliminated, these documents could be much improved.  

Thus, for example, the section of the SAP devoted to the prevention and resolution of conflicts of interest does not cover the problems that international experts, in particular GRECO, recommended solving according to the results of the 4th round of evaluation. It referred to the lack of a definition of the term “generally accepted notions of hospitality,” which is used when evaluating gifts allowed to officials. The NACP, as the developer of the SAP, did not pay attention to measures limiting the effectiveness of financial control, for example, the issue of lack of uniformity in the practice of conducting full verifications of declarations, etc. The EC emphasizes that the shortcomings in the rules for automated verification of e-declarations exist, and the NACP should consider them in the medium term. 

Before the vote in the Parliament, the main committee removed an open, transparent, and objective competitive selection for the position of Prosecutor General from the Anti-Corruption Strategy, which is to be conducted by an independent commission with due attention to the professionalism and integrity of the candidates. The document did not mention the competition for the leadership of the National Police to minimize political influence. 

However, even with such results, we continue emphasizing that it is the Parliament that should adopt such a document and thereby demonstrate, in particular, the political will to fight corruption. One of the debatable statements of the EC, which we do not support, is the need to revise the adoption of the state anti-corruption strategy by law because the delay in the adoption of this document at the parliamentary level significantly blocked the effective formation of policy and monitoring of the implementation of anti-corruption reforms.

Conclusions

The vast majority of the European Commission’s anti-corruption recommendations are consistent with what we have repeatedly stated in our materials and studies.  

Among other things, the EC mentioned in its full Report measures relating to anti-oligarchic legislation, lobbying, anti-money laundering, politically exposed persons (PEP), judicial and CCU reform, privatization, corporate governance, etc. 

TI Ukraine, in its studies and legal analyses, proposed additional steps not mentioned by the European Commission, but which can strengthen the capacity and efficiency of the anti-corruption ecosystem. In our study of the capacity, management, and interaction of anti-corruption infrastructure bodies alone, there are 85 recommendations, 25 of which are priorities. Separately, we provided 16 recommendations to enhance anti-corruption measures to ensure transparent reconstruction.  

Our recommendations, whose implementation could further improve our indicators in the Corruption Perceptions Index (CPI), include four comprehensive steps that will help to improve the level of the fight against corruption and contribute to the effective recovery of Ukraine (some of them have already been implemented this year, while others are still pending). Although the authorities implemented previous recommendations partially or did not implement them at all, we hope that after the report of the European Commission and the opening of negotiations on Ukraine’s accession to the EU, progress on anti-corruption reforms will be sure to accelerate.