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Ukraine scored 32 points out of 100 possible in the Corruption Perceptions Index (CPI) for 2021. Our scorehas decreased by one point, and now Ukraine ranks 122nd out of 180 countries in CPI. The African state of Eswatini (Swaziland) is next to Ukraine, also having scored 32 points. Zambia, Nepal, Egypt, the Philippines, and Algeria are one point ahead — all with 33 points each.

As far as neighbors are concerned, Ukraine continues to be ahead only of Russia — the aggressor neighbor has also lost 1 point and now ranks 136th on the list with 29 points. In addition, Hungary’s scores have decreased to 43 points (-1 points, ranking 73rd). Belarus has lost as much as 6 points this year and ranks 82nd with 41 points. 

Poland has not changed its score and remains the leader among our neighbors, ranking 42nd with 56 points, whereas Slovakia managed to improve its score over the year – 52 points (+3, 56th place), Romania — 45 points (+1, 66th place), and Moldova – 36 points (+2, 105th place).

Ukraine’s one lost point in the Corruption Perceptions Index 2021 is a decrease within the margin of error. However, in a 10-year retrospective, this indicator already flags stagnation and “deadlock” in the fight against corruption. And this is despite a number of really positive changes that have enhanced the anti-corruption ecosystem. 

The main reason for the decline in Ukraine’s points is that too many urgent anti-corruption tasks are delayed, frozen, or postponed indefinitely. Last year, there were repeated attempts to bring back negative practices of the past, and some of them have already affected Ukraine’s position in the Corruption Perceptions Index and outbalanced the effect of anti-corruption achievements. Similar processes could potentially continue in 2022.

In its study, Transparency International Ukraine reviews what influenced our country’s current CPI performance and proposed specific steps to improve the situation by the end of 2022. After all, the welfare and opportunities of each Ukrainian literally depend on the level of corruption.

In a 10-year retrospective, this indicator already flags stagnation and “deadlock” in the fight against corruption.

What influenced Ukraine current score

Ukraine’s score is based on 9 studies. Only two sources showed an increase in points. 

The largest decline by 4 points is observed in the Bertelsmann Transformation Index, the annual World Competitiveness Ranking, and in the World Economic Forum Executive Opinion Survey. Ukraine also lost one point in the Rule of Law Index.

Nevertheless, Ukraine gained 2 points according to the PRS Group International Country Risk Guide. The Varieties of Democracy Project, created on the basis of, among other things, the indicator of corruption in the judiciary, added 4 points in its study.

Ukraine’s score remained steady in the report of Freedom House Nations in Transit, Country Risk Rating (the Economist), and Global Insight Country Risk Rating.

According to Transparency International Ukraine, the following events affected the decrease in points in some studies. 

  • The decision of the Constitutional Court of October 27, 2020, whichdischarged high-ranking officials, civil servants, and judges from liability for false declaration. According to the NABU, detectives at that time investigated 110 criminal proceedings regarding the deliberate entering of false information into e-declarations. 7 persons, including three former MPs, were even served with charges, but due to the decision of the Constitutional Court, all these investigations were subject to closure. The HACC was forced to close 17 criminal proceedings and even overturn sentences.
  • The amendments to the anti-monopoly legislation,which could prevent businesses from protecting their rights when contesting public procurement. Back then, TI Ukraine criticized these innovations as such that will negatively affect the procurement sector.
  • The aggravation of interference in the work of the High Anti-Corruption Court (HACC). In particular, this refers to the proceeding in the CCUregarding the constitutionality of the HACC as a specialized court. 
  • The overall growing pressure on the anti-corruption ecosystem,including because of the long absence of permanent managers in institutions. Thus, the competition for the selection of the SAPO head continues for more than a year, and the competition for the selection of the ARMA head was launched only in the autumn of 2021 — almost two years after the dismissal of the previous head of the Agency. In both cases, there are doubts about the competitions.
  • The delay in the implementation of the judicial reform,despite the adoption of the legislative framework for its start. 
  • The postponement of the adoption of the Anti-Corruption Strategy in the second reading, which would help to comprehensively solve several problems with corruption in Ukraine.

Ukraine in a 10-year retrospective: ups and downs

Since 2012, Ukraine’s performance has improved significantly. It is among the 26 countries that have recorded statistically significant growth over the 10-year perspective. The list also includes Armenia, Angola, Greece, and Italy. 

This improvement is due to the changes that occurred immediately after the Revolution of Dignity. Since 2018, Ukraine’s steady growth has stopped. Despite the positive changes, there were some negative events that outweighed anti-corruption achievements. This trend can also be clearly seen in the results of 2021.

Of course, we cannot state there were no positive anti-corruption developments over the past year. Last year, all NACP’s powers were restoredthe institution of whistleblowers was saved, the  laws on the work of the ARMA and the NABU were updated, dozens of HACC sentences were passed, the civil forfeiture instrument began functioning. However, as we can see, all these anti-corruption positives were not enough for a growth in the Corruption Perceptions Index.

The Index data was also positively influenced by the launch of an electronic register of political party reporting Politdata by the National Agency on Corruption Prevention (NACP). The register started functioning in the spring of 2021, but the long-awaited electronic reporting for political parties has not yet been fully operational, and this crucial process was suspended by law back in the spring of 2020 due to the COVID-19 pandemic. 

In 2020-2021, parliamentary parties received almost UAH 1.5 bln of taxpayer funds, but how they were spent remained a mystery. In November 2021, the President vetoed the law on pseudo-renewal of political party reporting and returned it to the Verkhovna Rada, which TI Ukraine and more than 60 other civil society organizations called for.

All the listed changes are the completion of the processes planned before 2021. However, the negative manifestations over the past year have sometimes become systemic, and only the active resistance of MPs, officials, media representatives, the public, and the international community really interested in Ukraine’s progress made it possible to minimize the downfall of Ukraine’s indicator in the CPI.

+6 points in 10 years is not a good enough result for a country whose leaders have set the fight against corruption as one of the priority goals of their activities.

+6 points in 10 years is not a good enough result for a country whose leaders have set the fight against corruption as one of the priority goals of their activities.

Transparency International Ukraine’s recommendations for 2021: what was implemented?

According to the results of the last year’s CPI study, TI Ukraine provided the authorities with 3 blocks of recommendations, which could improve our performance. None of these recommendations have been fully implemented, only two are fulfilled partially.

Partially fulfilled (2)

To introduce transparent and accountable management of public assets and guarantee further development of the procurement sector;

–                To unblock and prepare objects for privatization.

This step was fulfilled. In spring, the Verkhovna Rada unblocked large-scale privatization by adopting the Law Of Ukraine No. 1365-IX. In 2021, the State Property Fund of Ukraine referred two large-scale privatization objects for sale: state-owned blocks of shares in AT The First Kyiv Machine-Building Plant (Plant “Bilshovyk”) and AT United Mining and Chemical Company.

The privatization of the “Bilshovyk,” although not exemplary, did take place and replenish the national budget with UAH 1.429 bln. However, in January 2022, the SBI imposed an arrest on 100% of the authorized capital of the plant, so the future of the enterprise remains in question. The auction for the sale of the UMCC was canceled three times due to insufficient number of bids. Most companies refused to participate due to investment risks in Ukraine.

 –                To disclose information about state-owned objects. To develop a new Register of State-Owned Objects as an affordable and convenient tool for visualizing and recovering objects. To change the legislative framework in the field of state-owned objects management.

According to the SPFU, as of July 1, 2021, more than 1 million objects of public property are registered in Ukraine. However, only access to information on assets, subject to privatization or lease, is facilitated. Therefore, public property accounting and access to it need to be improved. Changes to legislation and a new register were in development as of the end of 2021.

–                To improve the field of procurement in accordance with international commitments. To minimize the risks of adopting draft laws that contradict the Law of Ukraine “On Public Procurement” and/or expand the list of exceptions from the scope of the indicated law. To ensure effective control and monitoring of procurement by the State Audit Service.

There were significantly more attempts to exclude procurement from the scope of competitive tenders in 2021. The authorities want to distribute billions of hryvnias of taxpayers manually, as it already happened before the launch of the Prozorro system. 

In 2021, the Parliament allowed to purchase everything necessary for the Constitution Day and Independence Day of Ukraine, including infrastructure projects for the anniversary, under to the negotiation procedure. Moreover, MPs excluded the construction of Kyiv Ring Road from the scope of the Law of Ukraine “On Public Procurement.” Draft law 6273 was voted in the first reading, which would allow the construction of the Dniester PSPS and repairs of compressor stations of gas pipelines to be conducted without competition, under the negotiation procedure, and so on. The procurement monitoring by the State Audit Service, despite quantitative indicators, also raises many questions.

  1. To ensure the independence and capacity of the anti-corruption infrastructure;

–                To conduct transparent and politically impartial competitive selections of heads of anti-corruption institutions. 

Despite the repeated promises of the authorities and even international obligations of Ukraine, the competition for the selection of the SAPO head was discredited as much as possible, and as of January 2022, it has not been completed. 

As part of the competition to select the head of the ARMA, candidates passed tests for knowledge of general and special legislation. At the same time, TI Ukraine experts found numerous problems — in particular, this refers to the lack of a procedure for holding a competition and the rules of work of the selection commission when accepting documents, blurring the criteria of integrity, and so on. Only 12 candidates applied for the selection itself. And although all of them are allowed to participate in the competition, it is difficult to expect optimal results and the election of a truly worthy head of the ARMA.

–                To ensure an effective system of checks and balances for independence of the anti-corruption infrastructure from administrative and political pressure.

On the one hand, after the decisions of the Constitutional Court, changes were made that balanced the branches of government — for example, in part of the NABU’s activities. Therefore, there is little progress in this direction. However, at the same time, anti-corruption institutions were subjected to serious pressure and attempts to weaken their independence. We emphasize the need to change the legislation and ensure the real independence of the ecosystem, in particular of the Specialized Anti-Corruption Prosecutor’s Office from the Prosecutor General’s Office. It is also important to change the procedures for competitive selection of the SAPO and ARMA heads, which will facilitate the appointment of professional and honest managers.

–                To provide anti-corruption bodies with the necessary tools in legislation for the full implementation of their functions.

Positive changes: last year, MPs did vote for the first changes to legislation on the ARMA, this was another step towards improving the management of seized assets. And with the newly adopted Law, the NABU is getting closer to being able to independently conduct wiretapping of potential corrupt officials.

However, there are also the so-called growth zones.  This is, for example, draft Law that should provide the HACC with tools to counteract the violation of the judicial process; such changes should significantly increase the efficiency of the court. MPs never got around to the consideration of this document in the session hall. Moreover, the infamous decision of the CCU deprived the NACP of the opportunity to fully perform a significant part of its functions.

–                To introduce balanced criminal liability for “lying in declarations” and deliberate failure to submit a declaration, which would provide for a sanction in the form of imprisonment. 

Although MPs did improve the liability for false declaration, they did it too late: the adopted document did not apply to annual declarations for 2020. 

2021 was the first year when declarations were submitted in the absence of effective deterrent sanctions for lying in declarations or failure to submit them. The absence of the threat of imprisonment prompted a less responsible attitude of officials to the declaration. At the same time, even after the restoration of more severe consequences, the maximum penalty was 1 year in prison, and not 2, as, for example, TI Ukraine recommended.

 

Unfulfilled ones (1)

  1. To form a professional and independent judiciary.

–                To choose a virtuous composition of the High Council of Justice, involving the international community and public experts. 

In the summer of 2021, President Volodymyr Zelenskyy signed two laws that launched judicial reform: No. 5068 on amendments to the procedure for electing (appointing) members of the High Council of Justice (HCJ) and the activities of disciplinary inspectors of the HCJ, as well as No. 3711-d that amends the law “On the Judiciary and Status of Judges” and certain laws on the resumption of work of the High Qualification Commission of Judges of Ukraine (HQCJ).”

Now, on the basis of the adopted laws, attempts are being made to resurrect and reset the HCJ, but the current High Council of Justice blocks these attempts in every possible way. Although the beginning of the reform of the judicial selection system is a positive signal, delaying the process creates risks of invalidating all efforts to transform the judicial system. 

–                To abolish Kyiv Administrative Court, which still issues shameful rulings. 

The recommendation was not fulfilled, despite all the statements of the authorities and the relevant draft law already submitted to the Parliament. The judges of the Kyiv Administrative Court continue to administer justice and issue questionable rulings, which directly affect the course of reforms and the fight against corruption in Ukraine. 

–                To initiate a new comprehensive draft law, taking into account all recommendations from the Venice Commission on the reform of the Constitutional Court, and consider it in the near future.

The Verkhovna Rada adopted draft law No. 4533 “On the Constitutional Procedure” in the first reading. Despite certain positive changes provided for in this draft law, it has a significant drawback – the lack of provisions on a new system of competitive selection of judges with the participation of international partners. However, the President makes a decision on the appointment of new judges of the Constitutional Court in violation of even the current legislation.

Recommendations for 2022 that will help reduce the level of corruption

Transparency International Ukraine offers 5 specific steps that will help reduce the level of corruption in Ukraine and increase the confidence of citizens and businesses in the government in 2022.

  • To complete competitions and select professional, independent and high integrity heads  of the anti-corruption bodies: the Specialized Anti-Corruption Prosecutor’s Office, the Asset Recovery and Management Agency, and the National Anti-Corruption Bureau.
  • To adopt the national Anti-Corruption Strategy and the program for its implementation.
  • To reform constitutional justice, considering the opinions provided by the Venice Commission.
  • To ensure transparent accounting of public property and continue the course of privatization.
  • To minimize the risks of adopting draft laws which exclude certain types of procurement from the scope of the Law of Ukraine “On Public Procurement.”

Global trends in corruption perception in 2021

The CPI 2021 reveals that last year, there was again no significant change in the counteraction and the fight against corruption at the level of all 180 countries considered in the study. Over the past decade, slow dynamics have been typical for most of the world — yes, two-thirds of all countries have not yet passed the threshold of 50 points out of 100. The scale of the problem is enormous: the average CPI remains unchanged at a score of 43 out of 100 for the tenth year running. 27 countries, such as Cyprus, Lebanon (24 points), and Honduras (23 points) are at historic lows in their score.

This year, Finland has joined the permanent leaders of the CPI Denmark and New Zealand, having improved its indicator by 3 points in a year and now having 88 points out of 100 possible.

The bottom countries are those with an unstable political situation, military conflicts, and where governments only partially control the territory of the state — Somalia (13), Syria (13), and South Sudan (11).

Malawi has shown the largest increase in points (+5) — 35 points, 110th place in the ranking. In recent years, local law enforcement agencies have effectively investigated several cases of high-profile corruption. This led to verdicts in several high-profile cases related to the “Cashgate” scandal. The same year, Malawi’s Anti-Corruption Bureau arrested the energy minister and two other officials on suspicion of corruption related to a government oil contract.

Since 2012, 25 countries improved their CPI scores, including Italy, Seychelles, and Armenia, but over the same period the scores of 23 countries dropped (for example, Saint Lucia, Cyprus, and Syria). The indicators of other countries did not change significantly from 2012 to 2021.

In 2021, as part of the CPI study, Transparency International identified a pattern between the level of corruption and the state’s provision of human rights and freedoms. Since 2012, civil liberties in 90% of countries have stagnated or declined. While some authoritarian governments are good at controlling specific types of corruption at lower levels, this is usually accompanied by an expanding kleptocracy at the highest levels of government and anti-corruption laws being used to target their political enemies.

Corruption and impunity also contribute to a dangerous climate for human rights activities. Of the hundreds of human rights defenders murdered in 2020, 98% occurred in the 23 countries with high levels of public sector corruption (with a CPI score below 45). 

Transparency International calls on the public to demand that governments act on their own anti-corruption and human rights commitments. Many of the anti-corruption successes in recent history have been due to the tireless, coordinated efforts of ordinary people, who have taken great personal risks to make change happen.

Transparency International has developed global and universal recommendations for all governments. These tips will help put an end to the vicious cycle of corruption, human rights violations, and democratic decline. All of them will be useful for Ukraine as well.

  • To uphold the rights needed to hold power to account. Governments should roll back any disproportionate restrictions on freedoms of expression, association, and assembly introduced since the onset of the pandemic. Ensuring justice for crimes against human rights defenders must also be an urgent priority.
  • To restore and strengthen institutional checks on power. Public oversight bodies such as anti-corruption agencies and supreme audit institutions need to be independent, well-resourced, and empowered to detect and sanction wrongdoing. Parliaments and the courts should also be vigilant in preventing executive overreach.
  • To combat transnational forms of corruption.Governments in advanced economies need to fix the systemic weaknesses that allow cross-border corruption to go undetected or unsanctioned. They must close legal loopholes and ensure that the corrupt and their accomplices cannot escape justice.
  • To uphold the right to information in government spending. As part of their COVID-19 recovery efforts, governments must make good on their pledge contained in the June 2021 UNGASS political declaration to include anti-corruption safeguards in public procurement. Maximum transparency in public spending protects lives and livelihoods.

The average CPI remains unchanged at a score of 43 out of 100 for the tenth year running.

The CPI study: how it works

The Corruption Perceptions Index (CPI) is an indicator calculated by the global organization Transparency International since 1995. The organization itself does not conduct its own surveys. The Index is calculated based on 13 studies of reputable international institutions and think tanks.

The key indicator of the Index is not the rank, but the score. The minimum score (0 points) means that corruption actually replaces the government, while the maximum (100 points) indicates that corruption is almost absent in society. The index assesses corruption only in the public sector.

The CPI includes the point of view of business representatives, investors, market researchers, etc. It reflects the opinion of the private sector and its perception of corruption in the public sector.

It is important to remember that it is the perception of corruption that the CPI measures, and not the actual level of corruption. Comparing a country with a higher score to the one with lesser does not mean that the former is less corrupt than the latter. This means that the former is perceived as less corrupt.

The CPI methodology has received a stamp of approval from the European Commission for its reliable statistical approach.

The CPI covers the perception of corruption in the public sector by experts, in particular: bribery; embezzlement of public funds; nepotism in the civil service; seizure of state power; the government’s ability to implement integrity mechanisms; effective prosecution of corrupt officials; excessive bureaucracy; availability of appropriate laws on financial disclosure, prevention of conflicts of interest and access to information; ensuring the protection of whistleblowers, journalists, and investigators.

 Why the CPI?

 – The CPI covers more countries than any single source.

 – The CPI compensates for the error in different sources using the average of the results of at least three different sources.

 – The CPI scale from 0 to 100 is more accurate than other sources, as some have a scale of 1 to 5 or 1 to 7, so many countries get the same results.

 The CPI balances different perspectives on corruption in the public sector and has a neutral approach to different political regimes.

 

 For reference:

 Transparency International is an anti-corruption organization that was founded by former World Bank director Peter Eigen in 1993 in Berlin. The current chair of the TI Board is Delia Ferreira Rubio. Transparency International is present in more than 110 countries around the world. The organization is best known for the Corruption Perceptions Index and the Global Corruption Barometer. According to the Global Go To Think Index Tank Report for 2020, Transparency International ranked 3rd out of 143 independent think tanks in the world. It was ranked second among 71 global analytical institutions dealing with the topic of Open and Good Governance.

Transparency International Ukraine is an accredited chapter of the global movement Transparency International, with a comprehensive approach to development and implementation of changes for reduction of the corruption level.

TI Ukraine administered and transferred the “Prozorro,” “Prozorro.Sale,” “eHealth,” and “ProZvit” systems to the state. As an innovation and expert center, we also introduced the City Transparency and Accountability Rankings, and built the DOZORRO and the DOZORRO.Sale communities to monitor public resources.