The NACP has streamlined the monitoring of declarants’ lifestyles. Is this a happy ending or merely a form of deception?

At the end of 2023, the National Agency on Corruption Prevention approved the Lifestyle Monitoring Procedure for declaration subjects.

Brief conclusions:

• the regulation of lifestyle monitoring has changed minimally, and the substantive shortcomings of the previous procedure persist,
• the primary change is that there are now mandatory norms for NACP employees, established in accordance with the prescribed procedure, rather than in internal methodological recommendations,
• this procedure, with specifics outlined by the relevant law, is applicable to judges, including those of the Constitutional Court of Ukraine, in the absence of separate procedures for them.

Key recommendations to the NACP:

• coordinate certain procedures with the High Council of Justice and the Meeting of Judges of the Constitutional Court,
• clarify the terminology of the procedure,
• narrow monitoring mandates of authorized persons,
• enhance the distinction between lifestyle monitoring and full declaration verification,
• introduce priority and automatic distribution of monitoring among Agency staff,
• limit monitoring to a clear time frame.

Will the new procedure effectively address the longstanding issues in the financial control process for declarants? Let’s figure it out.

What happened?

The Agency adopted the lifestyle monitoring procedure only after amending the Law “On Corruption Prevention” during the opening of the declaration register. That is when MPs have explicitly mandated that the procedure for lifestyle monitoring be determined by the NACP in accordance with the provisions outlined in Article 12, Part 9 of this Law.

However, the NACP ignored the respective recommendation of TI Ukraine which we gave almost three years ago in our research. They also disregarded the opinion of international auditors who pointed out that the Agency was not in compliance with legal requirements.

What has become evident, and conversely, what remains unclear?

The NACP conducts lifestyle monitoring to verify whether the standard of living of declarants (officials, members of parliament, judges, etc.) aligns with the property and income owned by the declarants and their families. Simultaneously, various other types and measures of financial control exist, including monitoring the timeliness of declaration submissions, ensuring the accuracy and completeness of data, and conducting thorough verifications of declarations, among others.

Let us remind you that since 2020, the NACP has regulated lifestyle monitoring through optional methodological recommendations that are not officially registered with the Ministry of Justice. The new procedure has passed this registration, and its norms are included in the Unified Register of NLAs. This deserves appreciation and recognition.

However, even now, questions persist regarding the adopted document, as it leaves certain “grey areas” in the NACP’s operations, potentially hindering effective lifestyle monitoring of declarants.

It remains unclear how the two types of financial control – lifestyle monitoring and full declaration verification – differ. As the legal grounds for initiating both are quite similar, confusion may arise in practice regarding which procedure should be initiated in different cases.

Beyond the primary group of declarants, individuals subject to the new procedure will also encompass judges, including those on the Constitutional Court. This is due to the fact that certain lifestyle monitoring procedures permitted by law for this group have not received approval from the High Council of Justice and the Meeting of Judges of the Constitutional Court of Ukraine. We would like to remind you that judges were placed in a distinct category following the scandalous decision of the Constitutional Court in 2020, which deemed the previous e-declaration model unconstitutional.

The absence of distinct judicial procedures for lifestyle monitoring will need correction under the guidance of the new leader of the Agency. In the meantime, it is essential to incorporate specific provisions for judges, including those of the Constitutional Court, within the overall procedure for conducting lifestyle monitoring, like the provisions long established in Article 52-2 of the relevant Law.

Among such features, the Agency shall promptly notify the High Council of Justice or the Chairman of the Constitutional Court when initiating lifestyle monitoring for a judge or a judge of the Constitutional Court. Additionally, the certificate, based on the results of lifestyle monitoring for a judge or a judge of the Constitutional Court, is to be approved by the Chairperson or Deputy Chairperson of the National Agency.

The procedure lacks a defined timeframe for conducting lifestyle monitoring, which, conversely, should be subject to a specific time limit. In essence, lifestyle monitoring is an audit, not similar to indefinite financial monitoring in banks. Without a specified time frame, the work carried out by the NACP may once again result in excessive interference in privacy. While the procedure for full verification of the declaration has a deadline of up to 120 days (or up to 180 in certain cases).

The new procedure, which should streamline the lifestyle monitoring procedure, sets insufficiently defined deadlines.

For instance, the definition of “non-compliance with the standard of living of the declarant” does not clarify how the NACP determines these discrepancies. And the term “lifestyle of the declarant” fails to explain the behaviors or actions of the declarant that reflect their standard of living.

What actions can the authorized person from the NACP take during lifestyle monitoring? The new procedure does not provide a clear answer to this question, but we have common rights of authorized officials, which are sometimes excessive in the implementation of the lifestyle monitoring. For example, the authority to freely access premises of state bodies, local self-government bodies, legal entities, etc., using an official ID card. This is too much, because the lifestyle monitoring is the “offsite audit” for which the authorized official does not need to leave their workplace. Therefore, if the NACP uses this right in practice, the court may consider it an excessive interference in private life.

After all, during the lifestyle monitoring, the Agency does not have the right to too much interfere in the personal life of declarants. Meanwhile, the definition of “excessive interference with the right to the inviolability of a person’s personal and family life” pertains to actions that exceed the extensive powers and rights granted to the NACP under Articles 11 and 12 of the relevant law. Therefore, they should be narrowed down to those that are really needed for the implementation of the lifestyle monitoring. Otherwise, the results of such a procedure can theoretically be appealed to the ECHR as going beyond the limits of proportionality and violating Article 8 of the ECHR. For this type of work, the Agency clearly does not require the authority to issue instructions on violations of the relevant law.

Additionally, the new procedure lacks specified priorities for various types of lifestyle monitoring, unlike the approach taken in full checks, where priorities are established, for example, for top categories of declarants’ positions. This might result in the NACP being unable to adequately address the significance of the official position of a lifestyle monitoring subject with specific corruption risks unless priorities are established.

One notable omission is the lack of mention in the new order about the automatic distribution of monitoring tasks among NACP employees. This raises the concern that certain categories of declarants, or even individual cases, may be examined by specifically assigned NACP employees.

What’s the result?

The lifestyle monitoring procedure has undergone minimal changes in comparison to the revision of the previous regulation, and the primary challenges remain inadequately addressed by the Agency. The mentioned shortcomings are only a part of those we discussed 2.5 years ago.

Unfortunately, the NACP persists in disregarding recommendations from the public. We reiterated our proposals on the lifestyle monitoring procedure less than a week before its adoption, but the Agency did not incorporate them.

International auditors also pointed out that the NACP does not understand the differences between lifestyle monitoring procedures and full verification of declarations. This makes it difficult to properly regulate the lifestyle monitoring.

Some questions also arise regarding the Ministry of Justice, which did not identify the aforementioned and other risks in the procedure’s text and registered it in this revision.

We are hopeful that the new leader of the NACP, Viktor Pavlushchyk, will consider the suggestions from various stakeholders and endeavor to rectify the approach to conducting lifestyle monitoring.