Weekly analytics for 5 — 11 July

Amendments to the Anti-Corruption Law: improvement creates another uncertainty

Event

On July 4, the Verkhovna Rada of Ukraine registered draft Law № 9457 on amendments to the Law of Ukraine “On Corruption Prevention” regarding the improvement of certain anti-corruption mechanisms. The draft law developed by the Cabinet of Ministers of Ukraine (CMU) contains provisions that should:

– ensure a clear understanding of anti-corruption provisions;

– clarify the list of persons who hold responsible and particularly responsible position;

– clarify the information specified in the declaration of the person authorized to perform the state or local self-government’s functions, and in the notification of significant changes in their property status;

– increase the effectiveness of preventive mechanisms regarding the limitations on combined and adjunct positions for public servants and on conflict of interests;

– clarify certain provisions regarding anti-corruption evaluation of regulatory legal acts.

CPLR’s expert assessment 

Some of the proposed amendments to the anti-corruption law are purely technical and intended to bring this law into line with other acts. In particular, these include the need to indicate documents for a person’s identification abroad (for example, passport of a citizen of Ukraine for traveling abroad) in the declaration, or assigning the function of conducting anti-corruption evaluation of acts of the CMU to the National Agency for the Corruption Prevention (NACP), which seems quite logical. because the Ministry of Justice conducted such evaluations before the establishment of the NACP.

A positive aspect of draft law № 9457 is the proposal to narrow the range of entities who are required to submit a declaration. However, this provision is selective in nature.

Thus, it is proposed to exclude from the list of those who are required to submit a declaration persons authorized to perform the functions of the state or local self-government, as well as persons of rank and junior management tiers (e.g., sergeants, warrant officers) of the state penitentiary service (SPS) and the civil protection service (CPS).

The explanatory note to the draft Law mentions that the activities of the rank-and-file members of the SPS and the CPS are not associated with corruption risks: “such positions are ordinary-ranked staff positions, <…> holding them requires only the presence of a secondary general education”, “almost all employees of the State Emergency Service of Ukraine are required to submit declarations (in practice, these are ordinary rescue workers, drivers, engineers, electricians, divers, sappers, dosimeters, and other positions”).

Such amendments are fully justified and understandable, because a significant number of persons who are required to submit a declaration, including certain categories of civil service and local self-government positions, police officers, and military personnel, are honest, while their work does not contain any real corruption risks, is not related to decision-making, and has only an execution or technical nature. Thus, they should be excluded from the list of declarants.

At the same time, some categories of persons whose professional activities are, by contrast, related to corruption risks are not included in the list of declarants. Thus, the Law “On Corruption Prevention” does not mention employees of the Court Security Service at all, although in accordance with Art. 163 of the Law “On the Judiciary and the Status of Judges”, they are subject to the requirements of anti-corruption legislation. Members of the Antimonopoly Committee of Ukraine are classified as persons who hold a responsible and particularly responsible position, but are not included in the list of persons authorized to perform state or local self-government’s functions, even though ensuring economic competition and combating economic monopolies is one of the functions of the state.

Another issue of the process of application of the law is the legal uncertainty of the term “official of a legal entity of public law”, which is used in the list of persons subject to anti-corruption legislation (subparagraph “a” of clause 2, part 1 of Article 3 of the Law “On Corruption Prevention”). For the purposes of the Law “On Corruption Prevention”, the proper definition of this concept depends on whether a certain person will be subject to certain anti-corruption restrictions and obligations, in particular in terms of submitting a declaration, receiving gifts, and preventing conflicts of interest.

In practice, interpretations of this concept refer to the footnote to Art. 364 of the Criminal Code of Ukraine, according to which officials are defined as persons performing the functions of representatives of the state or local self-government, as well as those holding positions in state authorities, local self-government bodies, or state or municipal enterprises, institutions, or organizations related to the performance of organizational and managerial or administrative and economic functions. The Resolution of the Plenum of the Supreme Court of Ukraine № 5 of April 26, 2002 “On judicial practice in bribery cases” contains the definition of administrative and regulatory or administrative-economic functions.

However, the Criminal Code uses the term “officer”, and the Law “On Corruption Prevention” uses both “officer” and “official”. This leads to even more confusion and debate on how interchangeable these concepts are.

Furthermore, there is no clear definition of a legal entity of public law in the legislation, as the CPLR’s experts have already mentioned.

Draft Law № 9457 proposes to replace the concept of “official” in sub-item “a”, clause 2, part 1 of Article 3 of the Law “On Corruption Prevention” with the list of groups of positions: managers, their deputies, managers and deputy managers of structural and standalone subdivisions of legal entities of public law, as well as persons who perform the functions of an executive body (collectively or individually) of the state or municipal economic company.

However, such amendments only partially address the legal uncertainty. Furthermore, the provisions of Art. 65 of the Economic Code are not taken into account; according to these, officials of an enterprise include its manager, chief accountant, and members of the supervisory board, executive body, and other governing bodies.

Certainly, the Law “On Corruption Prevention” needs to be updated, and the list of persons to whom it applies should be adjusted using a risk-oriented approach. The targeted amendments as proposed by draft law № 9457 do not contribute to the corruption prevention system’s improvement, and in the long term may lead to a stacking of provisions and create new conflicts and gaps.