Transparency International Ukraine urges MPs not to pass amendments to the law “On the Lease of National and Municipal Property” which annihilate fair play and may provoke corrupt decisions of public officials.

On Wednesday, May 13, the Parliament is planning to consider draft law 3377, under which the Law “On the Lease of National and Municipal Property” will no longer apply to cultural establishments. This initiative is “hidden” among other changes related to public support of the cultural sector, creative industries, tourism and SME during the COVID-19 pandemic.

Such decisions will lead to inefficient management of property owned by the public and amalgamated communities, while the absence of competition will lead to losing revenues from lease. For instance, officials will be able to lease out the philharmonic or the circus without a competitive selection of the lessee, through a closed procedure at a reduced price.

However, the proposed changes will not just increase the deficiency in budgets of various levels. Lease of cultural establishments will end up beyond legal regulation completely, which provokes high corruption risks. There will be no alternative mechanism for regulation of lease of cultural establishments.

At the end of last year, MPs supported new rules of property lease in an open online system through the electronic auction procedure. This meant maximum transparency of all processes: from publication of the list of available property and selection of the lessee at an auction to publication of lease agreements.

Draft law 3377 will cause a shortage of budget revenue, high corruption risks and lack of transparency in the use of national and municipal property. Transparency International Ukraine urges the Parliament not to support this initiative and to send the document to a committee review for further improvement.