On the Agency’s insistence on using the term “automated verification,” which is absent from the law

The concept of “automated verification” was added by the NACP to the current Procedure for Conducting a Full Verification of the Declaration of a Person Authorized to Perform the Functions of the State or Local Self-Government back in December 2023 (the Procedure). This Procedure is the document that “sets forth the procedure by which the National Agency on Corruption Prevention conducts a full verification of the declaration of a person authorized to perform the functions of the state or local self-government.”

Under Section V, Part 1, clause 1 of the Procedure, a full verification is conducted in order of priority based on risk assessment, including where “the declaration is filed by an official holding a responsible or especially responsible position, by a declarant holding a position associated with a high level of corruption risks, the list of which is approved by the National Agency, except for a declaration for which there is a report on the results of an automated verification of the declaration.”

Yes, Herman Halushchenko, who held the positions of Minister of Justice and Minister of Energy, was an official in a “responsible or especially responsible position.”

Halushchenko’s declarations for 2021 and 2024 were precisely the ones that underwent the automated verifications referred to in the provision above from the Procedure for Conducting a Full Verification. We include a screenshot from the NACP website below.

That is exactly why, under the Procedure, they were not selected for a manual full verification that is envisaged by the Law of Ukraine on Corruption Prevention. At the same time, the law does not provide any definition of “automated verification of declarations,” because such a verification should not have existed at all. By insisting that “automated” and “full” verification are two entirely different instruments, the NACP raises even more questions about its free interpretation of the law. The result is that the Agency does not act “within the limits of authority and in the manner” prescribed by the Constitution of Ukraine. Instead, it exercises financial control over declarants under a procedure that does not exist in legislation, while publicly rejecting any connection to the legal norms established by the legislator.

The NACP introduced the artificial concept of automated verification into the Procedure for Conducting a Full Verification, providing that if it is successfully completed, a declaration, under certain conditions, may never be subject to a full verification by an Agency employee.

Moreover, the Procedure also provides that declarations marked as high-risk based on the results of logical and arithmetic control (LAC) will also not be selected for a full manual verification if such declarations have passed an automated full verification. This further weakens the LAC mechanism as well, the rules of which, it should be recalled, remain closed to external observers—just like the rules of automated full verification.

It is precisely this approach to selecting declarations for manual full verification that TI Ukraine criticizes in the article on Herman Halushchenko’s declarations, as well as in earlier publications. In particular, we suggest reviewing the analysis TI Ukraine published immediately after amendments were introduced to the Procedure regarding automated verifications—here.

The term “automated full verification” is used in the article to highlight the problem of the NACP’s increasing move away from conducting full verifications manually. In addition, a similar term is also used in reports by international organizations, for example, in the latest OECD report.

On the article’s references to NABU materials concerning the activities of certain legal entities located outside Ukraine

The article clearly describes the tools the NACP could have used to verify Halushchenko’s assets and those of his family members more thoroughly in the course of a manual full verification, including by submitting additional inquiries both to the declarant and to national and international bodies.

The need to strengthen cooperation with foreign states to exchange information as part of the Agency’s financial control is objective. This is also stated in the Independent External Assessment Report on the NACP’s Activity for 2020–2021: “The NACP’s cooperation with the competent bodies of other countries should be intensified, in particular in the area of exchange of data for the purposes of administrative verifications within the NACP’s mandate, for example, on the basis of Art. 43 of the UN Convention against Corruption or on the basis of other provisions of existing international treaties). The NACP should increase its interaction with international organisations and non-governmental organizations from foreign countries.”

Verification of declarations is an administrative procedure that precedes criminal proceedings. It is precisely within administrative and civil procedures that the NACP is not limited in international cooperation. This is also provided for by law, which states that the Agency’s powers include cooperation with state bodies, civil society organizations of foreign states, and international organizations within its competence, as well as exchange of information with competent authorities of foreign states and international organizations. To date, the NACP has also not fully leveraged the potential of regional instruments such as the Regional Data Exchange on Asset Disclosure and Conflict of Interest, which our neighbor Moldova recently joined.

In addition, the NACP should deepen cooperation with national authorities as well. In this context, it is also worth considering whether the Agency could cooperate with NABU on obtaining information in response to requests for international legal assistance in criminal jurisdiction while carrying out financial control.

TI Ukraine does not compare the NACP to law enforcement bodies. Rather, we propose that it use and develop the instruments at the Agency’s disposal to ensure effective manual full verifications of declarations. The fact that the NACP previously obtained access to Europol’s SIENA platform can be assessed positively, as it opened new opportunities for information exchange with law enforcement bodies of EU member states, even though the NACP is not a law enforcement body.

On the NACP’s assessment of TI Ukraine’s expertise 

Finally, I would like to comment on the Agency’s claim that TI Ukraine “misinterprets” financial control measures, which “creates a distorted perception of the NACP’s work and undermines trust in the anti-corruption system as a whole.” It should be noted that, in addition to TI Ukraine analysts, the NACP’s activities are assessed by a number of international organizations, including the IMF, the European Commission, and the OECD, among others. In their most recent reports, these organizations are fairly aligned in criticizing the Agency’s approaches to financial control, particularly with respect to full verifications.

For example, the latest European Commission Enlargement Report on Ukraine points to the need to strengthen the e-declaration system so that it can truly prevent and detect unjustified assets effectively. The Commission stated that the system has practical and legal shortcomings, primarily relating to the automated verification process.

And here is what the OECD wrote in its 2025 report regarding the NACP’s automated full verifications: “Statistics from the Register suggest that as of December 2024, there are ca. half a million high risk declarations, of which only 13 600 passed the automatic control, which is an approach to full verification of the declarations that fall within the lower risk range. Even if the NACP increases the proportion of the automated full verifications to 75%, as initially planned, this will not cover the entire range of high-risk declarations. This significant gap between legislation and practice indicates the need to reassess the appropriateness and potentially undesirable consequences of maintaining such a broad list of persons required to file declarations.”

It is also worth mentioning the most recent  Independent External Assessment Report of the NACP’s Activity for 2020–2021, in which the commission members stated directly: “The NACP informed the Commission that the issue of the possibility of conducting full verification in an automated mode using the software tools of the Register is being studied. The Commission would like to express doubts that the full verification of the AD could be automated, as under the current mandate of the NACP the procedure was designed for manual checking by authorized persons of the National Agency.”

Therefore, it appears that it is not only TI Ukraine that underscores the need to reconsider the Agency’s approach to automated full verifications and make them more effective. 

P.S. From this entire situation, I am glad that Herman Halushchenko’s declarations will, at last, be subject to a full manual verification by the NACP, as they should have been from the very beginning. 

The offshore scheme

NABU detectives established that between 2021 and 2025, a total of USD 12 million was laundered for the benefit of “Sigismund” and his family—funds that were largely held in foreign accounts.

Some of this laundered money was spent on the family’s needs, including:

• paying for the children’s expensive education at elite institutions in Switzerland,
• medical services at a clinic owned by one of the scheme’s participants (“Sugarman”),
• buying designer clothing at Kyiv boutiques, and more. 

To launder the funds, Halushchenko built a multi-tiered structure. In particular, three companies were registered via offshore jurisdictions in the Marshall Islands. They became part of a trust registered in Saint Kitts and Nevis and also acted as investors in a fund on the island of Anguilla, which was used to attract and launder money. In this way, the funds were carefully concealed.

Still, the NACP could have noticed certain manipulations from Halushchenko’s declarations. 

Halushchenko listed his former wife and four children as the official beneficial owners of the offshore companies. This is a common concealment scheme: assets are registered in the names of relatives or close associates who do not live with the declarant, allowing their assets to be omitted from the declaration. “Divorces” are also often fictitious for precisely these reasons.

But under the law, minor children must be declared by public officials regardless of whether they live together. Accordingly, in his 2024 declaration, Halushchenko listed his four children as family members. Yet he did not disclose any of his children’s assets—neither in the section on corporate rights nor in the section on beneficial ownership of family members’ assets.

In the 2021 declaration, when Halushchenko was still married and declared his wife’s assets, her corporate rights and beneficial ownership in the architectural bureau Prostir 86 are reported. But there is still no mention whatsoever of beneficial ownership in offshore companies.

If Halushchenko’s declarations had been selected for a manual review not limited to registry cross-checking, Agency staff could at minimum have sent follow-up requests both to the declarant and to national and international authorities.

It is also worth noting that, unlike NABU, the NACP still has weak international cooperation with foreign authorities when it comes to obtaining information on officials’ or family members’ foreign assets. This is an area the NACP clearly needs to strengthen.

Education in Switzerland 

According to an investigation by Schemes, Halushchenko’s son Maksym has been studying for the fourth consecutive year at one of Europe’s most expensive private colleges—College Alpin Beau Soleil in Switzerland—where tuition and boarding can cost up to USD 200,000 per year. Over four years, the total cost could reach roughly USD 700,000, or UAH 26 million—many times more than Herman Halushchenko’s family’s official income and declared savings. Journalists were able to establish this using open-source data.

In court, Halushchenko explained that different people paid for the education—his son’s godparents and family friends. This information requires additional scrutiny by NABU and, ideally, the NACP as well, since the Agency should have examined it much earlier.

NACP guidance indicates that education payments fall under expenses that must be declared. At the same time, only the declarant is required to report such expenses—so if third parties truly paid for the education, this information would not appear in the “expenses” section.

However, the declaration also contains a section on gifts—and that is where information about paying for Halushchenko’s son’s education should have appeared. The NACP has explained that when a third party covers the declarant’s or a family member’s costs for travel (flights, accommodation), treatment, education, and so on, it is considered a non-cash gift. As a general rule, such a gift must be reflected in the declaration with its value indicated.

So if Halushchenko’s son’s education was paid for by godparents and family friends, this should have been shown in Halushchenko’s declaration, unless each of them paid less than the reporting threshold, which is highly unlikely given the tuition figures cited above.

***

Once again, we are looking at a situation where the NACP has remained on the sidelines of a high-profile scandal. Once again, most of the facts were uncovered by journalists or by NABU detectives during criminal proceedings. 

We understand that the NACP’s functions and capabilities differ significantly from NABU’s, and we are not comparing them. Still, it appears the NACP had sufficient tools to verify information about Halushchenko’s assets long before he was notified of suspicion.

Two automated “full” reviews of the declarations of the person whom participants in the scheme allegedly called “Sigismund” produced no results at all. Most likely, the former minister’s declarations will now be selected for a repeat, manual full review—just as happened after the Tetiana Krupa scandal. But the effect of such an after-the-fact review is disproportionate to the mandate of a body that is supposed to prevent corruption. 

The facts we cite should be yet another wake-up call for the NACP: it unquestionably and urgently needs to revise its approach to financial control. But will the Agency listen?

What does the new law change?

Not every discrepancy automatically triggers severe criminal liability. For this purpose, the law establishes thresholds — minimum amounts from which liability arises. These thresholds are intended to rationalize the use of the legal framework and the capacity of anti-corruption institutions, ensuring that nobody is imprisoned over a discrepancy of 100 hryvnias.

Parliament defines these thresholds in the Criminal Code, and Draft Law No. 13271-1 modifies them. However, it disregards several key recommendations from international partners within the EU integration process. The 2024 EU Enlargement Package explicitly calls for broadening penalties for unexplained wealth and considerably reducing the applicable thresholds to ensure a real deterrent effect.

In practice, however, Ukraine is raising the criminal liability thresholds for false declarations — from UAH 1.5 million and 6 million to UAH 2.27 million and 7.5 million. Formally, these amounts have only slightly changed, since when adjusted for inflation they remain nearly the same as in 2020, when they were first introduced, with corresponding increases in fines. The threshold for civil confiscation rises from UAH 1.5 million to UAH 2.27 million, which is also nearly unchanged in inflationary terms since 2019. The threshold for illegal enrichment is lowered by almost UAH 1 million but still remains high — UAH 9.04 million.

By comparison, Moldova, ranked higher than Ukraine in the latest Corruption Perceptions Index (43 points vs. Ukraine’s 35), with a government-projected average monthly wage of UAH 38,000 in 2025 and also an EU candidate state, imposes 7–12 years of imprisonment for illegal enrichment amounting to just UAH 2.2 million. Moreover, Moldova has a “light” version of liability — 3–7 years of imprisonment for UAH 1.5 million, which is more than six times lower than the Ukrainian threshold. In Ukraine, UAH 1.5 million merely triggers civil confiscation of unjustified assets, even though the circle of subjects has been expanded, with the possibility of returning to office after serving the penalty.

Another example: Lithuania, an EU member state. There, the illegal enrichment threshold is about UAH 2.9 million — already sufficient to open a criminal case and impose up to four years in prison. Compared to this, Ukraine’s thresholds appear noticeably more lenient toward corruption.

Petro Petrenko and a few million

Let me illustrate with an example. Suppose Petro Petrovych Petrenko heads a state-owned enterprise in a large Ukrainian city and is required to submit a declaration. His official salary is modest, yet he owns a downtown apartment and a new car, sends his children to study abroad, and holds several million in savings. This is where the problem arises.

For corruption control to be effective, not only is a public e-register of declarations necessary, but so are realistic criteria. In fact, the new law, ostensibly designed to catch corrupt officials, provides them with even more room to maneuver by adjusting the thresholds. Civil confiscation or liability for illegal enrichment arises only when the assets amount to tens or hundreds of thousands of dollars. Otherwise, one can “get away” with a minor administrative fine of UAH 17,000 for false declarations — a sanction most frequently applied by Ukrainian courts in corruption cases, as confirmed by Opendatabot analytics.

As a result, even if Petro Petrovych’s lifestyle is entirely disproportionate to his income, the state appears reluctant to act. An extra million or two of unexplained assets? The state simply shrugs, refrains from confiscation, and certainly does not imprison him for illegal enrichment — because he has not reached the threshold. This reveals a preference for compromise rather than genuine financial control.

Half-measures will not suffice

Draft Law No. 13271-1 undoubtedly contains positive elements. Yet in essence, it is more of a cosmetic adjustment than a substantive reform. It preserves a major flaw: the sanction system’s insufficient sensitivity to the scale of the problem.

The EU expects from Ukraine not simulations of reform but concrete changes capable of reducing corruption levels. Encouragingly, Ukraine’s recently adopted Rule of Law Road Map provides for a review of sanctions for corruption-related offenses in Q2 2027. It also envisions revising liability thresholds for illegal enrichment and false declarations to improve financial control, including better coordination between criminal and civil proceedings.

But the key question remains: will this review actually reduce the thresholds?

Ukraine has an opportunity not merely to patch superficial flaws but to reform the accountability system in line with existing European approaches. This would mean lowering the thresholds for criminal liability for false declarations and illegal enrichment from UAH 7.5 million and 9 million to UAH 2.4 million (800 subsistence minimums for able-bodied persons), which would place Ukraine at an intermediate level between Lithuania and Moldova. It would also mean reducing the threshold for civil confiscation and criminal false declarations from UAH 2.27 million to UAH 1.2 million (400 subsistence minimums), which corresponds to Moldova’s standards.

If Ukraine truly seeks EU accession, it must focus not on narrowing the scope of sanctions but on strengthening liability.

Otherwise, the only thing Ukraine confidently “declares” is its willingness to remain stuck with the very problems it faces today. Meanwhile, Petro Petrovych will continue enjoying life in the big city — and he will not be the only one.

How these issues are handled now 

The issues addressed by the draft law are currently regulated by the Code of Ukraine on Administrative Offenses, the Criminal Code of Ukraine, the Criminal Procedure Code of Ukraine, the Civil Procedure Code of Ukraine, as well as the Laws of Ukraine on Corruption Prevention and on Military Duty and Military Service. These legal regulations provide for the following types of liability for false asset declaration:

• Administrative liability for false asset declaration under Article 172-6 of the Administrative Code applies where false information is submitted in an amount ranging from 100 to 500 subsistence minimums for able-bodied persons (UAH 302,800 – 1,514,000 or USD 7,300 – 36,500 at the National Bank of Ukraine (NBU) exchange rate as of June 5, 2025).
• Criminal liability for false asset declaration under Article 366-2(1) of the Criminal Code applies where false information is submitted in an amount from 500 to 2,000 subsistence minimums (UAH 1,514,000 – 6,056,000 or USD 36,500 – 146,000), in the form of a fine ranging from 3,000 to 4,000 tax-free minimum incomes (UAH 51,000 – 68,000 or USD 1,230 – 1,640).
• Criminal liability for false asset declaration under Article 366-2(2) of the Criminal Code applies where false information is submitted in an amount exceeding 2,000 subsistence minimums (UAH 6.056 million or USD 146,000), in the form of a fine ranging from 4,000 to 5,000 tax-free minimum incomes (UAH 68,000 – 85,000 or USD 1,640 – 2,050).
• Claims for the forfeiture and recovery to the state of unjustified assets under civil forfeiture pursuant to Article 290 of the Civil Procedure Code are filed when the discrepancy between asset value and lawful income exceeds 500 subsistence minimums (UAH 1,514,000 or USD 36,500).
• Illicit enrichment under Article 368-5 of the Criminal Code is defined as acquiring assets in excess of lawful income worth more than 6,500 tax-free minimum incomes (UAH 9,841,000 or USD 237,250).
• NABU detectives may investigate cases under Article 216 of the Criminal Procedure Code if the value of the subject matter of the offense is: 500 or more subsistence minimums for Articles 354, 368, 369, and 369-2 of the Criminal Code (UAH 1,514,000 or USD 36,500); over 2,000 subsistence minimums for Articles 191, 206-2, 209, 210, 211, 364, and 410 of the Criminal Code (UAH 6,056,000 or USD 146,000), provided the offense is committed by an official from a state body, law enforcement agency, the military, local government, or a state/municipal enterprise. 
• No term is currently established for the duration of an individual’s inclusion in the Unified State Register of Persons Who Have Committed Corruption or Corruption-Related Offenses (“Offender Register,” formerly the “Corruption Register”) under Article 59 of the Law of Ukraine on Corruption Prevention. 

What is proposed in the Committee’s version of the draft law

The new provisions aim to revise the criteria for criminal and administrative liability in the area of asset declaration and illicit enrichment, the range of persons and thresholds for applying civil forfeiture, NABU’s investigative jurisdiction, and to establish maximum time limits for inclusion in the Offender Register, among other things.

Below is a detailed overview of the changes introduced in the draft law following its review by the Committee:

1. Administrative liability for false asset declaration will apply where false information is submitted in an amount ranging from 150 to 750 subsistence minimums (UAH 454,200 – 2,271,000 or USD 10,950 – 54,750).

2. Criminal liability for false asset declaration will apply where false information is submitted in an amount from 750 to 2,500 subsistence minimums (UAH 2,271,000 – 7,570,000 or USD 54,750 – 182,500), including a fine ranging from 4,000 to 6,000 tax-free minimum incomes (UAH 68,000 – 102,000 or USD 1,640 – 2,460). 

3. Criminal liability for false asset declaration will apply where false information is submitted in an amount exceeding 2,500 subsistence minimums (UAH 7.57 million or USD 182,500), including a fine ranging from 6,000 to 8,000 tax-free minimum incomes (UAH 102,000 – 136,000 or USD 2,460 – 3,280).

The 50% increase in the threshold for administrative liability and the 25–50% increase for criminal liability for false asset declaration does not raise critical concerns on our part. Once the proposed provisions are adopted, these thresholds in U.S. dollar equivalent will better align with the limits that were in place during the reinstatement of the declaration system following the destructive decision of the Constitutional Court of Ukraine at the end of 2020. At the time the new law is adopted, the U.S. dollar will cost approximately 50% more than on the day the current thresholds were approved by Parliament on December 4, 2020 — UAH 28.30 versus UAH 41.48 per USD as of June 5, 2025. Moreover, the increase in the maximum threshold for criminal liability under Article 366-2(2) of the Criminal Code is not even 50%, but only 25% — 2,500 subsistence minimums versus 2,000. 

In addition, the increase in criminal liability thresholds will be accompanied by a corresponding increase in fines, which makes this legislative initiative generally acceptable. However, since the proposed changes will have retroactive effect, a portion of currently pending investigations will have to be closed.

4. Claims for the forfeiture and recovery to the state budget of unjustified assets under civil forfeiture pursuant to Article 290 of the Civil Procedure Code will be filed when the discrepancy between the asset value and lawful income exceeds 750 subsistence minimums (UAH 2.271 million or USD 54,750).

The depreciation of the hryvnia also justifies the 50% increase in the threshold for civil forfeiture — from 500 to 750 subsistence minimums. The U.S. dollar is currently worth 67% more than on October 31, 2019, the date the current thresholds were adopted, when the rate was UAH 24.99 per USD. Therefore, this change also raises no objections. 

Similar arguments regarding the depreciation of the hryvnia are also expressed by SAPO in its position submitted to the lead Committee. We have previously noted that this threshold is directly linked to the effectiveness of the civil forfeiture mechanism, as the overall state expenditure for organizing the civil forfeiture process — gathering evidence by the prosecutor and proving the unjustified nature of the asset in court — must correspond to the outcome of the proceedings.

5. Illicit enrichment will involve the acquisition of assets exceeding lawful income in value by more than 3,000 subsistence minimums (UAH 9.084 million or USD 219,000) and, along with civil forfeiture, will be extended to include the category of persons listed in Article 3(2)(e) of the Law of Ukraine on Corruption Prevention.

The expansion of the list of persons against whom claims for recovery of unjustified assets can be filed, and to whom the Criminal Code article on illicit enrichment will apply, was recommended by SAPO. As a result, the version of the draft law after the Committee’s review includes a proposal to broaden the scope of individuals subject to illicit enrichment and civil forfeiture provisions. 

Thus, following the adoption of the new provisions, these mechanisms will also apply to the heads and members of expert teams assessing a person’s day-to-day functioning, as well as to the heads, deputy heads, members, and secretaries of non-staff permanent military medical and aviation medical commissions. In our view, this innovation deserves support.

6. NABU detectives may investigate cases under Article 216 of the Criminal Procedure Code if the value of the subject matter of the offense exceeds 5,000 subsistence minimums (UAH 15.14 million or USD 365,000), provided the offense was committed by an official of a state body, law enforcement agency, the military, local government, or a state/municipal enterprise under Articles 191, 206-2, 209, 210, 211, 364, or 410 of the Criminal Code. 

This proposal aligns with the findings of the external independent assessment, which positively assessed NABU’s policy of prioritizing criminal proceedings.

7. The retention period for data before removal from the Offender Register for corruption or corruption-related offenses will be as follows:

• in the case of civil or administrative liability – 1 year;
• in the case of criminal liability – until the conviction is expunged or annulled;
• in the case of criminal law measures applied to legal entities – 5 years.

Back in 2023, the Commission conducting the independent assessment of the NACP’s effectiveness emphasized the need to resolve this issue, noting that it could be perceived as a disproportionate interference with individual rights. At the time, TI Ukraine supported this recommendation from international auditors.

8. The transitional and final provisions are supplemented with rules regarding the mobilization of individuals accused of serious and especially serious corruption crimes. 

A court may suspend criminal proceedings against a person accused of a serious or especially serious corruption offense who has been called up for military service during mobilization or under contract, if it determines that the individual’s direct participation in defense-related activities makes it impossible for them to take part in court proceedings, including remote hearings via videoconference.

However, Draft Law No. 13271-1 does not propose suspending the statute of limitations during the mobilization of defendants, as provided in Draft Law No. 13284, which is currently under consideration by Parliament.

How the positive provisions of the draft law can be further strengthened

In the future, when improving Draft Law No. 13271-1, legislators should consider lowering the thresholds for criminal liability for making false statements in asset declarations, as well as extending the relevant statute of limitations. For example, false asset declaration is currently classified as a non-serious offense with a limitation period of three years, which in practice may be insufficient for conducting investigations and completing judicial proceedings.

Moreover, MPs should take into account that the current sanction for illicit enrichment — imprisonment for a term of 5 to 10 years — has a stronger deterrent effect in terms of future conduct and risk assessment by the person concerned than civil forfeiture. Accordingly, further lowering the threshold for illicit enrichment could have a corrective effect on the potential level of corruption, which can generally be regarded as a positive step in the fight against corruption. 

As for specific recommendations regarding the draft law, we at Transparency International Ukraine are convinced that Article 290 of the Civil Procedure Code could be further amended to explicitly grant the NACP the authority to collect evidence without special procedures. Under the current version of Article 290(5) of the Civil Procedure Code, the NABU and SAPO, and, in legally defined cases, the SBI and the Prosecutor General’s Office, are empowered to detect unjustified assets and gather evidence of their unjustified nature, while the NACP is not included in this list. 

Likewise, the final version of the draft law should continue to expand the list of persons who may be subject to civil forfeiture and improve this mechanism overall. Previously, we at Transparency International Ukraine dedicated a separate study to the challenges of civil forfeiture, which included corresponding recommendations for enhancing the implementation of this concept. 

The draft law also fails to address the problem of enforcing the consequence of civil forfeiture that provides for the automatic dismissal of public officials. In the context of civil forfeiture, in addition to the recovery of unjustified assets, the individual must be dismissed from office after the court decision enters into force, with the exception of MPs. At the same time, there is already case law contradicting this provision. 

For example, one decision of the HACC Appeals Chamber on forfeiture entered into legal force on December 3, 2024, and in accordance with the requirements of the Law on Corruption Prevention, the Director of the SBI dismissed the relevant employee from their position. However, on February 12, 2025, the head of the State Bureau of Investigation reappointed that employee to the same position effective February 18, relying on the fact that the Law on the State Bureau of Investigation does not prohibit reappointment. 

Such practice undermines the civil forfeiture mechanism and may encourage public officials to make a psychological decision to acquire unjustified assets. After all, the only consequence they might face is forfeiture of the asset following court proceedings, while they may avoid dismissal and remain in a position that allows further accumulation of such unjustified property. 

Another nuance of the proposed provisions is that the reduction of the illicit enrichment threshold — and, accordingly, the upper limit for civil forfeiture — by UAH 0.75 million has an ambiguous nature, meaning that the change has both advantages and disadvantages.

This adjustment is not aligned with the threshold for aggravated criminal liability for false asset declaration — 3,000 subsistence minimums versus 2,500. Therefore, it would be optimal to harmonize the thresholds for aggravated liability for false declarations and for illicit enrichment, since the latter does not activate at the starting point of the aggravated false declaration threshold. This creates a gap of UAH 1.5 million between the two thresholds, allowing a declarant to avoid liability for illicit enrichment by exploiting this legal loophole. 

On the other hand, the current opportunities for effective use of civil forfeiture remain more limited than would be desirable. It is worth recalling that civil forfeiture operates under a lower standard of proof, making it a more accessible tool. It is based on the “balance of probabilities” principle, under which the burden lies with the state to prove that the assets are more likely unjustified than acquired from lawful sources. In contrast, illicit enrichment requires a significantly stronger evidentiary basis for an indictment, as guilt must be proven “beyond a reasonable doubt” — with all doubts in criminal proceedings interpreted in favor of the defendant. 

Currently, after a court acquittal in an illicit enrichment case, SAPO has no legal option to apply civil forfeiture measures to such individuals. Therefore, lowering the illicit enrichment threshold, which would result in more cases falling under this article, should not preclude the possibility of pursuing civil forfeiture in court if the suspect is acquitted. SAPO also raises this issue in its position, noting the need to preserve this option following the closure of a criminal case. 

To address this issue, it would be preferable for SAPO to be granted the authority to exercise procedural supervision in all illicit enrichment cases — a power not currently provided by law. In such a scenario, SAPO prosecutors could assess, on a case-by-case basis, the judicial prospects of pursuing a case either through criminal or civil proceedings. However, this should not overburden the institution, especially considering that its capacity is expanding and that illicit enrichment cases may only relate to assets acquired since 2019. In addition, the filing of an indictment should interrupt the statute of limitations for filing a civil forfeiture claim. However, the draft law contains no such provision, and it should therefore be improved in this respect.

Furthermore, the possibility for the NABU to investigate other cases that do not fall within the revised thresholds for criminal offenses or damage caused should not be ruled out. Prosecutors are authorized to assign cases to NABU detectives if the offense has caused or could have caused serious consequences for society or the state, and NABU detectives are empowered to investigate cases initially handled by other bodies upon the decision of the NABU Director and with the consent of the SAPO prosecutor. To ensure this, the procedure for requesting such cases and coordinating interactions between the NABU, the SAPO, and other investigative bodies should be improved.

No less important in resolving the issue of the absence of a maximum retention period in the so-called “Corruption Offender Register” is to take into account that the periods of criminal record validity under Article 89 of the Criminal Code are rather short, for example, in the case of a plea agreement that provides for exemption from actual punishment, the maximum period is 3 years. Therefore, it is necessary to increase the duration of the probationary period established under such agreements to at least 6 years, as was proposed in the government draft law on plea agreements. 

We have no objections to the retention periods proposed in Draft Law No. 13271-1 for inclusion in the Offender Register, provided that future amendments to the Criminal Code extend the periods of criminal record validity (to at least 6 years, as proposed in the government’s draft law on plea agreements), and also introduce a retention period for disciplinary offenses. The NACP’s proposal to remove individuals only from the public section of the Register also, in our view, deserves consideration by the legislature.

Which provisions of the original draft law were amended or removed by the Committee’s version?

In the vast majority of cases, the Committee succeeded in removing the most critical provisions from the original version of the draft law.

One particularly dangerous provision in the original draft was the narrowing of NABU’s investigative jurisdiction, which is already imperfect as it does not cover certain high-ranking officials. Such a narrowing could have occurred as a result of raising the thresholds for false asset declarations. If the MPs’ amendments had been adopted, new cases would have fallen outside the NABU-SAPO-HACC framework and instead been handled by the SBI – National Police – Prosecutor General’s Office – courts of general jurisdiction. This would have significantly undermined the effectiveness of pre-trial investigations and court proceedings in terms of ensuring the inevitability of punishment. 

Since the NABU, the SAPO, and the HACC have been granted legal authority to expand their staff, such legislative limitations on their jurisdiction and competence would have been inconsistent. On the contrary, the NABU should be empowered to investigate illicit enrichment and false asset declarations regardless of the declarant’s position, provided that the value meets the offense threshold.

The Committee rejected the proposal to raise the minimum bribe amount for NABU investigations, which could have allowed serious corrupt actors to escape accountability by transferring their cases to less specialized bodies — such as the SBI or National Police. For example, Kyiv City Council member Vladyslav Trubitsyn and five other individuals are currently being tried in absentia for receiving UAH 1.39 million in bribes in exchange for retail outlets in the capital. If such changes had been adopted, this case and others like it would no longer fall within NABU’s purview. 

The original draft also proposed that the NACP’s lifestyle monitoring period not exceed four months from the date of the relevant decision, and that monitoring would be limited exclusively to assets, income, expenditures, services, and other elements of lifestyle acquired or received while holding office, with no authority to monitor candidates for office. These provisions were excluded from the Committee’s version.

In general, the timeframe for lifestyle monitoring should not be regulated at the legislative level under optimal circumstances, as it is too minor an issue from a legal drafting perspective to warrant legislative attention. Nevertheless, the inclusion of such norms in Draft Law No. 13271-1 appeared to be a forced step, as the NACP has never imposed any time limits on lifestyle monitoring in its own subordinate regulations or methodological guidelines. 

According to our research on the lifestyle monitoring mechanism, such lack of time limits can result in excessive interference with the private lives of declarants, which is prohibited by law and may also constitute a violation of Article 8 of the European Convention on Human Rights (ECHR) — the right to respect for private and family life — potentially giving rise to cases before the European Court of Human Rights against Ukraine. 

The NACP also reported at a meeting of the Verkhovna Rada Committee on Anti-Corruption Policy that in 2023, the minimum duration of lifestyle monitoring was 3.5 months, the average duration was 10 months, and the maximum reached 18 months. In 2024, the minimum dropped to 2 months, the average stood at 9 months, and the maximum was 15.5 months. In a context where the state has only four years (from the date the disputed assets were acquired) under the statute of limitations for filing civil claims to recognize assets as unjustified, spending up to 1.5 years on lifestyle monitoring alone is excessive. Therefore, calling this procedure an effective tool seems somewhat inaccurate. It is also important to note that, unlike limitation periods for liability, the statute of limitations in these cases is calculated up to the moment the claim is filed with the court. 

Thus, introducing a four-month limit for lifestyle monitoring could be supported if it also included a provision for a justified extension of up to two additional months. The NACP’s proposal to the lead Committee to establish a 180-day monitoring period with the possibility of extending it by another 180 days is not relevant, as a full year of potential lifestyle monitoring does not resolve the issue of its excessive duration. For the same reason, SAPO’s proposal to leave lifestyle monitoring without any time limits should also not be taken into account. Therefore, in the future, the monitoring period should be regulated at the level of the NACP’s internal procedure.

More dangerous provisions in the original version of the draft law included proposals to limit the subject of lifestyle monitoring exclusively to assets acquired while holding office, and to exclude the verification of assets belonging to the declarant’s family members or third parties, which is currently allowed. From the perspective of the goals of the electronic declaration system, such changes would not only create a major legal loophole and the potential for legalizing unjustified assets — for instance, by resigning and later returning to office, or falsely claiming that assets were acquired before taking office — but would also set a dangerous precedent for further narrowing the scope of full declaration verifications. Although Draft Law No. 13271-1, unlike the problematic primary draft No. 13271 by Serhii Vlasenko, does not affect full verifications, the legislator could, in the future, use such a narrowing of lifestyle monitoring as a precedent for restricting the scope of full checks as well. 

It worth mentioning that international standards envisage a single procedure for verifying asset declarations, not a variety of them. This is why Transparency International Ukraine has proposed abolishing lifestyle monitoring altogether, as a procedure that duplicates full verifications. However, if monitoring is retained in legislation, it should be viewed as a preliminary check of specific potential abuses proactively identified by NACP staff through information and analytical work, similar to NABU’s model, which the NACP currently does not conduct. Where the declarant fails such monitoring, the Agency should initiate a full verification, covering all sections of the declaration. Such provisions could also be added as part of improvements to the draft law.

The original version of the draft law did not provide a comprehensive framework for the duration of inclusion in the Unified State Register of Persons Who Have Committed Corruption or Corruption-Related Offenses (the “Offender Register,” formerly the “Corruption Register”). It proposed that this period should not exceed the relevant limitation established by Article 39 of the Code of Administrative Offenses — one year for those subjected to administrative sanctions — and the limitation periods set out in Article 89 of the Criminal Code, for those convicted of criminal offenses (with criminal record terms ranging from one to eight years). However, the original draft law made no mention of time limits for inclusion in the Register based on civil, disciplinary measures, or liability of legal entities. The version adopted by the Committee is therefore more comprehensive and coherent.

Conclusions

Transparency International Ukraine believes that Draft Law No. 13271-1 should be adopted as a basis, with further refinement in line with our recommendations. This improvement process should involve international partners, as well as representatives of civil society and anti-corruption institutions. We support the Committee’s decision to reject the alternative draft laws No. 13271 and No. 13271-2. 

To improve the draft law, we recommend the following:

• Reduce the administrative threshold from UAH 0.3 million to, for example, UAH 0.15 million and the criminal thresholds from UAH 1.5 million and UAH 6 million to, for example, UAH 1.2 million and UAH 2.4 million for false asset declaration liability, and reduce the threshold for civil forfeiture from UAH 1.5 million to, for example, UAH 1.2 million.
• Grant the NACP the authority to identify unjustified assets and collect evidence of their unjustified nature under Article 290 of the Civil Procedure Code without being restricted by special procedures, and improve the civil forfeiture mechanism in line with the recommendations of our separate study. 
• Introduce a flexible option to transition from criminal proceedings on illicit enrichment to civil forfeiture, based on the SAPO prosecutors’ assessment of the evidentiary basis in specific cases. To implement this, all illicit enrichment and civil forfeiture proceedings (excluding those involving NABU, SAPO, and HACC officials) should be handled through the SAPO.
• Improve case referral procedures when granting the NABU the authority to investigate illicit enrichment and false asset declarations regardless of the declarant’s position, provided the offense meets the applicable liability threshold.
• The subject of monitoring lifestyle, if this mechanism remains in the legislation, should be adjusted in the opposite direction — to provide the NACP with the ability to conduct proactive information and analytical work, similar to NABU’s approach, for identifying and preliminarily reviewing specific potential abuses.
• Harmonize the thresholds for aggravated criminal liability for false asset declaration and illicit enrichment, for example, by reducing both to UAH 2.4 million.
• Consider the NACP’s proposal to remove individuals only from the public section of the Offender Register and introduce a specific retention period for inclusion based on disciplinary violations.
• Extend the criminal record duration to at least six years, including for individuals conditionally released from punishment.

At present, Draft Law No. 13271-1 revises key elements of criminal liability and NABU jurisdiction and includes several positive innovations. However, with further improvement of the draft’s provisions, there remains significant potential for a more positive impact on the effectiveness of Ukraine’s anti-corruption policy.

What are Krupa, other heads of the commissions, and Khmelnytskyi prosecutors in for?

Despite all the “spin-offs” in the case involving heads of the medical and social expert commissions, let’s recall the main figures of the scandal.

It all started with the SBI searches at the premises of Tetiana Krupa, head of the Khmelnytskyi Regional Center of the MSEC, and her son Oleksandr, who is also the head of the Pension Fund of the Khmelnytskyi region. After law enforcement officers found USD 6.5 million of undeclared cash at Krupa’s residence and evidence that she had issued disability certificates, she was served with a suspicion notice of unlawful enrichment.

Subsequently, the case was transferred to the NABU from the SBI since Krupa is a member of the Khmelnytskyi Regional Council, and by law, the Bureau has jurisdiction over investigations into officials of this category. An interim measure has already been selected for Tetiana Krupa in the form of detention, this decision is now being appealed. Let’s talk about why this case is special.

The detention of Krupa is just the beginning of the story. Journalists then conducted their own investigation and found that fifty prosecutors of the Khmelnytskyi region, including the regional prosecutor Oleksii Oliinyk, have an issued disability certificate. Under this status, they received pensions for years.

Such a turn eventually led to a series of decisions by the authorities. In particular, the Prosecutor General’s Office initiated official investigations concerning all bodies of the prosecutor’s office. According to preliminary data from the PGO, similar cases with dozens of prosecutors with disability certificates in other oblasts were reported. This was also the reason for the resignation of the Prosecutor General. The Verkhovna Rada has already voted for his dismissal.

President Volodymyr Zelenskyy reacted to this scandal, announcing large-scale inspections of the entire structure and its elimination. This is where the public part of the scandal ended.

Let’s focus on the case of Krupa. Why is it so special, and how is it different from other MSEC episodes?

As we have already indicated, the case of Krupa is being investigated by the NABU. Later, it will be heard by the HACC because she is a member of the regional council. As for other MSEC representatives, their actions shall be investigated by the SBI. However, not without exception: the investigation into potential corruption schemes by Vira Bieliakova, head of the Mykolaiv regional MSEC, is conducted by the SSU. During the searches at Bieliakova’s premises, more than USD 450,000 dollars was found in cash, as well as a collection of jewelry, which she hid at different addresses. Her son has a Russian passport issued by the Russian consulate in Odesa before the full-scale invasion.

But the main question is: What liability will the defendants bear under the law if the court finds them guilty? The Law on Corruption Prevention establishes an exhaustive list of officials who can be punished for unlawful enrichment, and there are no heads of regional MSECs or any other members of these commissions among them.

This means that the commission heads can be punished only for false declaration. The maximum penalty for such an offense is a 2-year imprisonment without the opportunity to hold certain positions or engage in certain activities for 3 years. At the same time, illegal assets cannot be confiscated, no matter how significant they may be, since this article does not provide for an additional punishment in the form of confiscation.

On the other hand, the state still has the opportunity to bring MSEC heads to criminal liability for money laundering (Art. 209 of the Criminal Code of Ukraine) if a MSEC official, for example, purchased property for the received bribe or put these funds into bank accounts. This article has a more severe punishment—up to 6 years in prison, or up to 8 years if it concerns property worth more than UAH 9 million. Under this article, such illegal property can be confiscated. However, in Ukraine, this approached is rarely applied, although it could be a solution in the MSEC cases.

It is precisely because of the complexity of punishment provided for such violators that the parliament should include this category of people in the list of authorized persons to perform the functions of the state or local self-government. This will allow for prosecuting dishonest MSEC heads for unlawful enrichment and confiscate their assets either in criminal proceedings or within civil forfeiture.

As for the prosecutors from the Khmelnytskyi region, as well as other regions, only official investigations against them were reported. However, such investigations do not provide for prosecution for corruption, and following the results of official investigations, prosecutors can only issue reprimands or dismiss them. However, these results can also become the basis for other criminal investigations if the Prosecutor General’s Office transfers them to the SBI or the NABU.

Meanwhile, while the internal investigation is ongoing, all prosecutors whose disability is dubious may continue to exercise their powers if they are not suspended or dismissed before the end of the investigation.

However, if it turns out that prosecutors got a disability certificate illegally a through a corruption scheme, a criminal case may be initiated against them. In particular, under Art. 369—providing improper advantage, under Art. 358—forgery of documents, or Art. 190–fraud. However, there is currently no information that such cases have been initiated or that suspicion notices have been served.

Could the NACP have detected violations in the declarations of MSEC heads?

Heads of regional MSECs are obliged to submit declarations (despite recent statements by the Head of the NACP), and all of them are in the public domain, except that of Natalia Salnykova, head of the Kherson MSEC. We studied the financial condition of 23 heads of regional MSECs and found that not only Tetiana Krupa could be suspected of potential violations.

We are most concerned about the fact that 18 out of 23 MSEC heads receive a pension, or their husband or wife do. In 8 cases, both receive a pension.

Due to the peculiar way of entering data in the declarations, we cannot establish whether these pensions are retirement benefits for years of service, a disability pension, or it was assigned under some other reason. But such an analysis can and obviously should be carried out by the NACP. After all, the receipt of a pension by MSEC heads and their family members, if it was assigned specifically for a disability, may indicate a potential conflict of interest, which is precisely within the NACP mandate.

In addition, in more than half of the cases, a significant increase in assets of the heads of regional MSECs during their tenure can be traced. Of course, most of them are nowhere near the level of Tetiana Krupa and her husband, who, by the way, is also a civil servant, as he heads the Department of the State Audit Service of the Khmelnytskyi region. However, some cases attract attention. For example, the fact that Vasyl Tymoshchuk, head of the Volyn MSEC, declared 50 real estate objects. The level of Tymoshchuk’s income of UAH 492,000 for 2023 (including pension) and information about his previous earnings, which were almost half lower, raises serious doubts about the possibility of buying so many assets.

An alarming trend is the acquisition of a number of large land plots by MSEC heads and their husbands or wives, sometimes for ridiculous amounts of money. Thus, the wife of Mykhailo Kulayets, head of the Ivano-Frankivsk regional MSEC, acquired 4 land plots of more than 1000 sq. m. during his tenure. Kulayets himself in 2023 alone acquired 5 more plots of several thousand square meters. According to the declaration, 4 of them cost less than UAH 10,000.

This raises the question: did the NACP check the above-mentioned declarations of regional MSEC heads, and what conclusions did the Agency reach following the results of such checks?

Overall, the declarations of 6 MSEC heads successfully passed the automated full check by the NACP, which consisted in verifying if the data of the declaration corresponded to those from the registers. However, many questions remain about the success of automated checks. During a full manual check, the authorized person can ask the declarant for an explanation of the origin of the declared savings, while an automated check does not provide for such a possibility. Similarly, an automated full check will not be able to identify a likely conflict of interest when MSEC heads unreasonably provide disability conclusions about themselves or their family members. The NACP cannot check the amount of cash savings of declarants by mandate; only law enforcement agencies can do this during searches.

Interestingly, among all the declarations we studied, only one was manually checked by NACP authorized persons, and this was precisely the declaration of the Khmelnytskyi MSEC head. The results of the check revealed only signs of an administrative offense, not a criminal one.

The certificate on the results of the full check of Tetiana Krupa indicates that the NACP specialists found discrepancies only regarding the undeclared value of the property, checking them with the state register. But the authorized persons did not order an examination of whether the value of land plots or houses acquired by Krupa in 2022 in the Khmelnytskyi region corresponded to the market value, and the declaration indicated roughly UAH 2,000 or UAH 10,000. We have seen many similar cases with land plots purchased for peanuts. In other declarations of regional MSEC heads, we have seen many interesting things.

When resuming declaration, MPs laid down a new rule in the law on Prevention of Corruption on the presumption of reliability of state register data, with the only exception—the information from them is unreliable if it is established legally. Therefore, the NACP should not only be guided by data from state registers and title documents, but also check them in regard to the market value.

Now the declarations of Krupa and her husband are being re-checked. However, the overall picture with the checks of the MSEC head declarations gives reason to doubt the effectiveness of the current NACP financial control measures when checking declarations. We have already criticized the Agency’s new approach to automating full checks, and this analysis of ours confirms the previous position.

We cannot comment on the reasons why, in addition to the declaration of Tetiana Krupa, the declarations of other MSEC heads were not selected for a full manual check by the NACP. All because the rules of logical and arithmetic control, according to which the risk of declarations is determined, still have not been disclosed. We have long called on the NACP to make these rules public so that potential problems could be identified and the selection of declarations could be improved.

It is important to understand that it is a quality check of officials’ assets by the National Agency that may eventually become the basis for the opening of proceedings by law enforcement agencies regarding potential violations.

How do we change all that?

Unfortunately, personnel decisions within the MSEC scandal, as well as the liquidation of the very institution, do not solve the systemic problem—insufficient control over the operation of these commissions and the impossibility of bringing their representatives to justice. Currently, there are practically no mechanisms that would ensure proper detection, investigation, and punishment for this category of civil servants.

The system needs comprehensive fundamental changes that will become reliable safeguards against similar scandals in the future. In the future, similar neglected issues may emerge in other fields despite all attempts to control this process.

What should be done so that there are no more such large-scale scandals?

1. The NACP should review the existing approach to conducting full checks, in particular abandon their automation and focus on conducting these audits manually by authorized persons.
2. The parliament should synchronize the circle of persons who can be punished for unlawful enrichment or whose assets can be considered unjustified with the entities obliged to submit declarations in accordance with the Law on Prevention of Corruption.

However, such changes will not impact the story that has unfolded. After all, criminal law does not have a retroactive effect, and therefore it is necessary to develop a mechanism for bringing to criminal liability for the legalization of property.

Unless this is done, then at best, the NACP will select the declarations of MSEC heads for full checks; based on the results, it might establish the following signs:

• of false declaration, which we mentioned above or
• of a real conflict of interest if it is proved that MSEC heads received a pension based on their own expert opinions. Liability for such a violation is a fine of UAH 1,700 to UAH 13,600 with a deprivation of the right to hold certain positions or engage in certain activities for a period of 1 year (Articles 172-7 of the Code of Ukraine on Administrative Offenses).

In addition, based on the violations established above, MSEC heads may be brought to disciplinary liability, that is, in the best-case scenario, those who have not yet been dismissed will be dismissed. Can this be precisely the kind of punishment that Ukrainians expect for such crimes? Hardly.

Firstly, it is now possible to conceal all information about the same asset, which can be specified only in one section of the declaration. For example, the money received as a gift can be specified in the section on cash, where one needs to indicate the amounts and currencies. At the same time, there will be no need to indicate this money in the income section, which requires disclosing the source of receipt of such a gift. This will be enough to fill out the declaration, while the public and investigative journalists will lose the opportunity to see part of the information on the origin of funds in the open register. 

Secondly, MPs are allowed not to indicate rented real estate up to 75 m2 in their declarations if the costs for it are compensated to them. This is another blow to the completeness of declarations in the open register. Earlier, TI Ukraine opposed changing the rules for declaring rented assets. 

Thirdly, heads and deputy heads of separate units and branches of legal entities are excluded from the circle of declarants. While corruption at state-owned enterprises, in particular at tenders, has repeatedly become the object of public coverage and investigation by law enforcement agencies, the public will no longer see the declarations of the leadership of these autonomous “almost legal entities” in the open register (for example, of Ukrzaliznytsia or Energoatom). This happened because of the new wording of the term “official of a legal entity of public law,” which, moreover, does not establish a clear permission for non-residents not to declare, which may become an obstacle to corporate governance reform.

Most of the newly created loopholes also relate to the renewed mandate of the NACP to check declarations. Thus, currently, the NACP is prohibited from checking the information from declarations that was already checked earlier without detected violations. Given that the quality and completeness of previous checks in some cases was very ambiguous, and the NACP could not use the full range of verification means, this will become in fact an indulgence for declarants. The conclusion of the Agency’s external audit by international experts also revealed numerous deficiencies in the implementation of financial control mechanisms by the NACP. 

Roughly speaking, if the NACP did not use to have access to the foreign register of one of the foreign states, and now it has obtained it and revealed undeclared corporate rights, this may result in no consequences for the declarant. The information in the section on corporate rights was once checked by the NACP, and no violations were found. Another example concerns the recently obtained right of the NACP to be granted banking information without a court decision, which hardly managed to become a systematic practice during the checks. We also had questions about the data received as a result of expert examinations, which were used by the NACP in previous checks. 

Another loophole that may be used is that now the real estate and cars of declarants that they acquired before they officially became declarants will not be checked. In addition, there may be difficulties with the information taken from the state registers when filling out the declaration — due to their incompleteness and errors, as well as the novelty of the relevant legislation.  

One should not forget about another draft law — 9587-d, which is signed by the President and needs vetoing as well. TI Ukraine told more about the problems in it here. 

Unfortunately, because of such a long-awaited law that has been adopted today, to some extent, the declaration system in Ukraine has become complex and unbalanced. This is unfortunate because in the past, its development was positively assessed by international organizations such as the OECD or GRECO. Therefore, we are convinced that it is necessary to correct all the shortcomings as soon as possible by adopting the relevant draft law, without waiting 2 months from the date of promulgation of the law, when the register will open.

What needs to be refined

Unfortunately, our main concern about this bill came true. MPs sustained the amendment that after paying UAH 17-42.5 thousand fine for lies in declarations up to UAH 1 million 342 thousand, a violating official will not even be regarded as someone who has faced administrative penalties. 

This critical moment was emphasized earlier by Transparency International Ukraine urging the President to veto this bill. Almost one and a half million hryvnias is a rather large amount enough to  buy a car or an apartment. Therefore, it is simply unacceptable to allow declarants to “forget” to mention property of such value in their declarations and just pay off a ridiculous fine without entering it in the Register of Corrupt Officials.

Moreover, the new law preserves the NACP’s quasi-judicial role, which will discreetly decide whether to hold the declarant accountable for late submission of the declaration. According to Article 124 of the Constitution of Ukraine, justice in Ukraine is administered exclusively by the courts, and the appropriation of these functions by other bodies or officials, shall not be permitted. The NACP is not an exception here, just like any other state institution. The jurisdiction of the courts extends to any legal dispute, and, of course, any fine for failure to submit a declaration on time, which is imposed by the NACP, is simply meaningless in essence. 

Therefore, taking over the judicial function of the NACP, in our opinion, at least contradicts the Basic Law of the state.

What should be left in the new law

As we noted earlier, TI Ukraine positively assesses the introduction of time limits for staying in the Register of Corrupt Officials. This problem is long overdue because such a restriction corresponds to the legal principle that after a certain time for a person brought to legal responsibility, all negative legal consequences associated with it should be stopped.

In addition, during the second reading, the MPs adopted an amendment that proposes to provide in the draft law a list of valid reasons why the declarant could not submit the declaration on time. They are: 

• arrest, detention, or serving a sentence; 
• restriction of freedom of movement due to a law or court ruling;
• force majeure, i.e. epidemics, military events, natural disasters, or other similar circumstances; 
• serious illness or stay in a health care facility for treatment or in case of pregnancy, provided that it is impossible to temporarily leave such facility; 
• technical failures in the official NACP website; 
• requesting information for inclusion in the declaration. 

These exceptions represent a generally favorable development, affording the declarant at least some chance to offer their explanations and prevent the automatic imposition of fines without appealing in court. Since the list of justifiable reasons for such delays is quite exhaustive, this will help minimize the potential for exploiting this provision to avoid accountability. 

However, on the other hand, such exhaustion will also not allow to cover all possible situations that prevented the official from submitting a declaration. Therefore, it is probably worth adding some other variable point that will add flexibility — recent years have shown that it is hardly possible to provide for all the obstacles to the timely submission of declarations by officials.

Thus, this law must also be vetoed by the President

We are convinced that the President should veto this bill and also return it for revision. Especially in terms of harmful recent amendments that allow avoiding responsibility for lying in the declaration up to UAH 1 million 342 thousand, and to give powers to the NACP that were previously assigned to the court. 

The triumph of civil society, which collaboratively achieved the veto on draft law 9534 and the opening of the declaration register, must not overshadow the need to veto 9587-d. After all, it can also lead to a significant weakening of the anti-corruption reform, which we definitely do not want to happen.

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.