Weekly analysis for 26 August — 01 September

Indulgence for Criminal Offences “Based On Clarifications” of State Financial Oversight Authorities

Event

On August 28, the Verkhovna Rada’s Committee on Law Enforcement recommended the Parliament to adopt at second reading and as a whole the Draft Law “On Amendments to the Criminal Procedure Code of Ukraine to Improve Safeguards for Business Entities During Criminal Proceedings and to Enhance the Efficiency of Justice in Criminal Proceedings through Written Proceedings” (reg. № 12439) in the version proposed by the Committee. The Draft Law, in particular, proposes to amend the Criminal Code of Ukraine (CC) by introducing a new Article 41-1, stipulating that “an act committed by a person on the basis of clarifications provided by authorized central executive bodies regarding the application of tax, customs, and public procurement legislation shall not constitute a criminal offense”.

CPLR’s assessment

1. The Draft Law was adopted as a basis on February 25, 2025. Proposals to amend the CC appeared only during preparation for the second reading, while the title of the Draft Law refers exclusively to amendments to the Criminal Procedure Code of Ukraine. This directly contradicts the requirements of Article 116 of the Rules of Procedure of the Verkhovna Rada and repeats the situation with the Draft Law on the deprivation of independence of the Specialized Anti-Corruption Prosecutor’s Office that occurred in July.

2. According to the CC, circumstances that exclude the criminal unlawfulness of an act are those that, while outwardly similar to criminal offenses, involve actions or omissions that cause harm, and are deemed lawful due to their social utility or acceptability. Such acts are considered legitimate because they are committed in the exercise of a genuine subjective right or in the performance of a legal duty.

3. The Draft Law undermines established approaches to determining the lawfulness of circumstances that exclude the criminal unlawfulness of an act. Its provisions allow individuals to avoid criminal responsibility for offenses such as tax evasion, smuggling, and abuse of office if clarification has been provided by a state financial oversight authority. (Ministry of Finance of Ukraine, the Accounting Chamber, the State Audit Service of Ukraine, the State Tax Service of Ukraine, the State Customs Service of Ukraine, the Antimonopoly Committee of Ukraine, or other central and local executive bodies exercising oversight within their competence). Such clarifications may contradict not only existing tax, customs, or public procurement legislation, but also clarifications provided by another public authority.

These acts are unlikely to be socially useful or acceptable; rather, they risk facilitating collusion between financial oversight authority officials and taxpayers concerning facilitating their business and financial activities.

However, Article 68 of the Constitution of Ukraine explicitly states that ignorance of the law does not exempt a person from legal responsibility.

Therefore, if a legal clarification provided by a state authority contradicts the law, this cannot prevent the unlawfulness of a specific act. Determining whether a person has complied with tax, customs, or other legislation is the exclusive up to the courts and must be resolved through the procedures established by law. Article 124 of the Constitution of Ukraine provides that “Justice in Ukraine is administered exclusively by the courts”. Accordingly, legal clarifications provided by executive authorities cannot have binding force for courts or limit their judicial function. According to the Law of Ukraine “On the Judiciary and the Status of Judges” (Part 5 of Article 13), the interpretation of laws is carried out by the courts in the course of resolving specific cases. Conclusions on the application of legal provisions set out in rulings of the Supreme Court are binding on all entities with public authorities that apply the relevant legal act containing such a legal provision.

No other authority or official may assume the function of administering justice. 

Officials of executive bodies who provide incorrect legal clarifications must, where there are grounds, be held accountable through disciplinary proceedings or other forms of legal liability.

The Draft Law does not exclude possible abuses, e.g. situations in which “clarifications” could be provided in a corrupt manner, potentially becoming part of schemes to circumvent the law.

Finally, in its proposed version, the Draft Law increases the risk of selective justice: some individuals whose actions contain elements of criminal offenses in the areas of economic activity, property, or official duties could be shielded from prosecution through timely clarifications provided by a state financial oversight authority, while others would face full legal responsibility.

4. Article 19 of the Constitution of Ukraine provides that “Public authorities and bodies of local self-government and their officials shall be obliged to act only on the grounds, within the powers, and in the way determined by the Constitution and the laws of Ukraine”.

The Law of Ukraine “On Public Procurement” permits clarifications regarding tender documentation (Article 24), but does not allow it concerning the content of the Law itself.

Similarly, the Tax Code of Ukraine provides exclusively for individual tax consultations – clarifications provided by the oversight authority solely for the practical application of specific legal provisions (cl. 14.1.172, Article 14), which do not have a normative force.

According to the Customs Code of Ukraine, only two provisions of the Code may be subject to clarification, and these provisions are of a practical nature: those relating to denial of customs clearance (Article 256) and suspension of customs clearance (Article 401-1).

At the same time, the aforementioned laws do not explicitly empower central executive authorities to provide clarifications on the procedure for application of legal norms.

By introducing Article 41-1 to the Criminal Code, the Draft Law undermines the established, coherent, and consistent system of norms governing authorized bodies charged with the lawful interpretation of laws and the universal nature of circumstances that exclude criminal unlawfulness. It also creates the risk of an unconstitutional substitution of the judicial function by financial oversight authorities.

Lobbying by Law

Event

On September 1, the Law “On Lobbying” entered into force, accompanied by amendments to the Code of Ukraine on Administrative Offenses establishing responsibility for violations of lobbying legislation and the official launching of the Transparency Register. On the same day the National Agency on Corruption Prevention (NACP) also held a briefing and released an Information Guide regarding the application of lobbying legislation.

CPLR’s assessment

The Law “On Lobbying” (the Law), adopted on February 23, 2024, as part of Ukraine’s EU integration requirements, is intended to enhance the transparency of interactions between businesses and public officials. At the time of preparing this review, the Transparency Register includes information on 11 lobbying entities: 9 legal entities and 2 individuals. However, this does not necessarily mean that decision-making processes within state authorities will become more transparent and clear for the public.

As we have previously noted, the Law contains shortcomings that may hinder its effective implementation, particularly concerning definitions (Article 1) and the list of exclusions from its scope (Article 3). The Law primarily sets rules and restrictions on a new area of professional activity in Ukraine, resulting in overregulation rather than encouraging transparency.

The NACP’s information guide, although advisory in nature, should have ensured consistent application of the Law’s provisions, established a unified approach to its implementation, and provided guidance to individuals, legal entities, and other stakeholders involved in lobbying activities. Yet, it only partially fulfills these objectives. The guide is not cover those who may be mistakenly considered lobbyists, nor does it specify which types of activities should be considered outside the scope of lobbying – whether because they are not aimed at influence, lack a connection to commercial interests, or leave unclear whose commercial interests must be involved for the activity to qualify as lobbying.

Anti-corruption officers within state authorities and local self-government bodies also require additional training and clarifications, as they are responsible for identifying violations of lobbying legislation and reporting them to the NACP. Without their additional preparation, the application of the Law risks becoming distorted: lobbyists may evade liability, while active civil society representatives could, conversely, be unjustifiably held accountable for alleged violations of lobbying legislation.

The Transparency Register also raises concerns. According to paragraph 2 of part 20, Article 5 of the Law, its software must allow searches for lobbying entities by type of registry data. This means the Register should support searches by multiple parameters, such as the name of the entity (or individual), the area of lobbying, the object or subject of lobbying, and the nature of interactions between lobbyists and state or local authorities. However, currently it is not even possible to view a list of registered entities (the Register displays only the total number and their status) and searches are limited to an entity’s name, which must already be known in advance. Expanding the Register’s search functionality and increasing its openness would significantly improve monitoring of compliance with lobbying legislation and foster greater involvement of civil society and investigative journalists.

Thus, the Law in its current version, together with its implementation measures, remains more of a formality than an effective tool for enhancing the transparency of policymaking and legislative drafting.