Weekly analytics for 9 — 15 August

Strengthening the administrative responsibility for untimely submission of declarations by public servants

Event

There are two draft laws on strengthening the administrative responsibility for certain corruption-related offenses under Parliament’s consideration. First – is  the governmental draft law № 9587 “On Amendments to the Code on Administrative Offenses regarding improving the procedure for bringing to responsibility the persons authorized to perform state or local self-government functions” of August 7, 2023. It aims to introduce administrative liability for violations of the procedure for submitting a declaration with reliable information, as provided for part 4 article 45 of the Law of Ukraine “On Corruption Prevention”. It also proposes to transfer the authority on administrative prosecution for corruption-related offenses from the courts to the National Agency on Corruption Prevention (NACP) and the National Police units. 

The second – is developed by a group of MPs draft law № 9587-д “On Amendments to the Code of Ukraine on Administrative Offenses and other laws of Ukraine regarding improving the procedure for bringing to responsibility the persons authorized to perform state or local self-government functions” of August 9, 2023. It provides for the introduction of automatic recording of untimely submission of declarations and consideration of cases related to this category of offenses without the participation of the person being prosecuted and without drawing up a protocol for an administrative offense. It is envisioned that the nature of the offense committed, the offender’s identity, the level of guilt, financial status, and mitigating or aggravating circumstances will not be taken into account when imposing penalties.

CPLR’s expert assessment

The proposal of the draft № law 9587 regarding the introduction of responsibility for “violations of the procedure for submitting a declaration by a person authorized to perform state or local self-government functions, with reliable information, as provided for in part 4 of Article 45 of the Law of Ukraine “On Corruption Prevention” is dubious. 

The content of this provision is unclear, and the consequences of its interpretation raise questions about the specific actions it refers to. Considering the content of the rules set out in part 4 of Article 45 of the Law of Ukraine “On Corruption Prevention” several options of unlawful actions are possible in this situation: 

1) declarant’s failure to exercise the right to amend information in the declaration within seven days after its submission;

2) exceeding the established limit for submitting clarifying declarations by a person authorized to perform state or local self-government functions (no more than three);

3) declarant’s violation of the obligation to submit a declaration with reliable information after being accountable for non-submission, untimely submission of declaration, or in case of identifying false information in it.

The proposal to establish a procedure for considering cases of untimely submission without valid reasons of a declaration by a person authorized to perform state or local self-government functions in a closed mode, without the presence of participants in the case, is contradictory. Such an approach carries the risk of violating the right to fair trial, since a person who is brought to responsibility will not have an opportunity to provide explanations regarding the essence of the accusation, present evidence to prove the absence of guilt, seek legal assistance during the consideration of the case, file motions, seek recusals, etc.

Furthermore, liability for untimely submission of a declaration arises only in the absence of valid reasons. Therefore, establishing this circumstance requires providing a person the  opportunity to explain why the declaration was submitted later than the legally defined deadline. The lack of such an opportunity will inevitably lead to challenges against decisions in these cases through legal proceedings.

A concern is also raised by the proposal to grant authority to the National Police to consider violations of financial control requirements (administrative offenses under parts 2, 4, 5 of Article 172-6 of the Code of Administrative Offenses). These offenses include failure to report or timely report  on the opening of a foreign bank account or significant changes in financial status; deliberately providing false information in the declaration by a person authorized to perform state or local self-government functions; and violation of the procedure for submitting a declaration by a person authorized to perform state or local self-government functions with accurate information, as provided in part 4 of Article 45 of the Law of Ukraine “On Corruption Prevention”.

Proper consideration of such cases requires the previous verifications in order to establish all their circumstances. The law “On Corruption Prevention” provides for such measures as declaration verification (Articles 51-1 to 51-3), lifestyle monitoring (Article 51-4), and additional financial control (Article 52). While the National Police despite being a specialized authority in the area of combating corruption, does not engage in supervisory functions and does not check the declarants’ compliance with financial control requirements. Therefore, it is not advisable to empower the National Police with the authority to consider cases of financial control requirements violations, without providing the ability to independently collect evidence.

The amendment to part 3 of Article 286 of the Code of Administrative Justice, specifically provides local general courts as administrative courts the right to decide regarding including information about a person into the Unified State Register of Individuals who have committed corruption or corruption-related offenses while considering the case on administrative responsibility for such offenses, is contradictory.

Article 59 of the Law “On Corruption Prevention” assigns the responsibility for creating and maintaining the Register of Corrupt Individuals to the NACP. Information from this register is provided by the NACP upon requests for the purpose of conducting special checks, requests from law enforcement agencies, etc. The mentioned data is not classified as confidential information concerning an individual and therefore cannot be restricted. Moreover, information about whether a person has faced administrative penalties for corruption-related offenses is crucial in making decision on appointment to public service. If information about a legal entity involved in a procurement process is included in the Register of Corrupt Individuals, it serves as one of the grounds for disqualification from participating in procurement procedure. Therefore, in case the mentioned authority will be granted to local general courts, there will be a risk that the court might not issue the appropriate decision, and information regarding the person will not be included in the Register of Corrupt Individuals.

The authors of draft law № 9587-д proposal to exclude the requirement of considering reasons for the failure to meet deadlines for submitting declarations by individuals authorized to perform state or local self-government functions, potentially carries the risk of violating the individual’s right to a fair trial. In such a case, a person may be brought to responsibility  regardless of whether he/she had an objective opportunity to submit the declaration. The only way to prove the absence of a guilt in such a situation remains referring to the exceptional circumstances defined by the law – extreme necessity, necessary defense, or being unfit to stand trial (Article 17 of the Code of Administrative Offenses).

Furthermore, the second paragraph of part 5 of Article 45 of the Law “On Corruption Prevention” stipulated cases when a person authorized to perform the state or local self-government functions has the right to submit a declaration after April 1st. This primarily concerns the military personnel and other individuals performing tasks in the area of military operations. According to draft law № 9534 amending certain laws of Ukraine on defining the procedure for submitting declarations by persons authorized to perform the state or local self-government functions during a martial law, which the CPLR’s experts have already analyzed, this list will be expand. The introduction of an automatic recording of untimely declaration submission will potentially assumed a significant number of those defending Ukraine as violators of anti-corruption legislation.

Concerns are also raised regarding the provisions on a closed mode proceedings for consideration of this category of cases, which excludes the possibility of personal presence of a person who is being prosecuted during the proceeding. While the proposed draft law includes the possibility of “electronic” participation by allowing to provide objections, motions, and evidence through a personal electronic cabinet, this significantly narrows the right to defense. A person might not receive timely notification of an investigation initiated against him/her or might lack technical means to provide evidence or file a motion. 

As already noted, it is envisaged that the NACP will be enpowered to independently determine the procedure for considering cases of administrative offenses related to the untimely submission of declarations by individuals authorized to perform functions of the state or local self-government, which are automatically recorded. This means that the NACP in order to fulfill these powers will develop and independently approve a specific regulation on the procedure for bringing persons to administrative responsibility. Currently, the draft law provides that in this regulation, the NACP will outline the specific aspects for consideration of such cases as well as identify circumstances that must be established during the consideration of such cases (Articles 279-280 in the version of draft Law № 9587-д).

The above-mentioned aspects contains certain risks in light of the provision of Paragraph 22, Part 1 of Article 92 of the Constitution of Ukraine, which states that the principles of liability and responsibility for administrative offenses are exclusively defined by the laws of Ukraine. It is perceived that compliance with the requirement of legal certainty envisages that the procedure for bringing individuals to responsibility should also be defined at the level of law.

To implement this idea, the authors of the draft law propose to introduce contradictory amendments to the definition of the concept of legislation on administrative offenses (Article 2 of the Code on Administrative Offenses), adding regulatory acts of the NACP to its list. In this regard, the question arises as to why only the regulatory acts of one executive authority are mentioned. Also, according to the decision of the Constitutional Court of Ukraine of July 9, 1998, № 12-рп/98 (case on the interpretation of the term “legislation”), the term “legislation” does not include regulatory acts of central executive authorities.

Verkhovna Rada adopted as the basis a draft law regarding amendments to the procedure for calculating time limits in cases of war crimes

Event

On August 10, the Verkhovna Rada of Ukraine adopted a draft law on amendments to the Criminal Procedure Code of Ukraine concerning the peculiarities of calculating time limits for pre-trial investigations under conditions of martial law (registration № 9314-d of August 4, 2023) as the basis. This draft law excludes the calculation of time limits for pre-trial investigations in criminal proceedings related to war crimes and genocide for which a person has not been notified of suspicion. Furthermore, it improves the procedure for calculating time limits for pre-trial investigations registered under martial law.

The draft law propose to amend part 2 of Article 219 of the Criminal Procedure Code of Ukraine, according to which the time limit for pre-trial investigation, from the moment information on a criminal offense is entered into the Unified State Register of Pre-Trial Investigations or a decision is made to initiate a pre-trial investigation in accordance with the procedure established by Article 615 of the Criminal Procedure Code of Ukraine, until the day a person is notified of suspicion will not be calculated in criminal proceedings concerning crimes specified in Articles 437-439 (aggression, war crimes, use of weapons of mass destruction) or Section 1 of Article 442 (genocide).

The draft law is also clarifying the provisions of part 8 of Article 615 of the Criminal Procedure Code of Ukraine regarding criminal proceedings in which a person has been notified of suspicion on the date of the introduction of martial law. The period from the specified date to the date of termination or cancellation of martial law will not be included in the overall time limits for pre-trial investigations. The application of this provision has been ambiguous in practice, and the Supreme Court has not established any legal position on this matter.

CPLR’s expert assessment 

Since 2018, a system for calculating investigation time limits in the criminal process establishes a maximum time limit for investigating criminal cases in which no one has been notified on suspicion, with the possibility of extension by appealing to an investigative judge. This system was introduced through amendments to the Criminal Procedure Code of Ukraine known as the “Lozovyi amendments”. These amendments remain only partially invalid, despite their negative impact.

Conceptual principles of the Criminal Procedure Code of Ukraine of 2012 clearly differentiated cases involving interference with human rights and freedoms after being notified of suspicion (requiring the establishment of investigation time limits) and cases where such interference does not occur (“fact-finding investigations” in which no one has been notified of suspicion). This system was unbalanced by the “Lozovyi amendments”, the arguments in favor of which were the fact that “pressure on business” or law enforcement officers arbitrariness replace the issues related to inadequate judicial control, lack of an effective system of disciplinary investigations, and other negative factors that previously allowed to create informal interference in “fact-finding investigations” concerning citizens’ rights and freedoms and do not relate to the conceptual principles of criminal procedural legislation.

One of the consequence of this system of calculating time limits is the constant need to extend pre-trial investigation time limits, especially in criminal cases involving life and health of individuals. This poses the risk of denial of extension by investigative judges due to lack of progress in the investigation. This could negatively impact the state’s obligation to “effectively investigate” such crimes, undertaken with the ratification of the Convention for the Protection of Human Rights and Fundamental Freedoms.

Currently, a “deadlock situation” has emerged where international crimes stipulated in Chapter XX of the Criminal Code of Ukraine do not have a statute of limitations for prosecution. Yet, they continue to be extended from a procedural perspective, creating a conflict between substantive and procedural law. The average investigation duration for international crimes extends over decades, while suspects are often absent. Instead of focusing on investigations after the end of martial law (during which section 8 of Article 615, Part 8 of the Criminal Procedure Code of Ukraine applies, as discussed below), prosecutors and investigators are compelled to repeatedly seek extensions for these investigation timelines, which have already exceeded 100,000 cases.

This affects the reverse problem – provisions of section 8 of Article 615 of the Criminal Procedure Code of Ukraine, which was intended to “freeze” all timelines until the notification of suspicion during a state of war for the purpose of procedural efficiency, does not fully operate in practice. There are differing interpretations regarding what constitutes these investigations, when they should have been registered, and what to do in cases of amalgamation or separation of pre-trial investigation materials, etc.

All the aforementioned issues are direct conseqtuences of the “Lozovyi amendments” implementation, which had unpredictable nature and currently complicate the investigation of international crimes. At a minimum, in order to address the issue of investigation time limits for international crimes and all crimes investigated under conditions of martial law, it is necessary to adopt the draft law №9314-d. At a maximum, return to the system of time limits for investigation of crimes that existed  prior to March 15, 2018.

The Verkhovna Rada plans to restore political parties’ financial reporting and strengthen their independence from oligarchs

Event

On August 9, the Verkhovna Rada of Ukraine considered the draft Law № 9419-1 on amendments to certain legislative acts of Ukraine aimed at minimizing potential oligarchic influence on political parties, improving mechanisms for state financing, and enhancing state control over the activities of political parties (draft law №9419-1) in the first reading. It proposed to restore the political parties’ reporting on their property and finances, the adjustment of the electoral threshold for party’s budgetary support, and the authorization for political parties to deposit funds in deposit accounts.

An alternative government’s draft law №9419 was rejected.

CPLR’s expert assessment

At the beginning of 2020 political parties’ financial reporting was put on hold due to the implementation of quarantine measures in response to the spread of COVID-19. Later, the situation was further impacted by the introduction of martial law in Ukraine due to Russia’s military aggression.

However, currently, the majority of political parties’ governing bodies are capable to resume reporting process, Therefore, the existing restrictions have no grounds. The CPLR’s experts have drawn attention to these circumstances. Thus, amending the legislation to restore the process of political parties’ financial reporting is a logical, justified, and long-awaited step.

Draft Law № 9419-1 proposes amendments to the Law “On Political Parties”, under which parties will be allowed to place their own funds into deposit accounts and earn passive income. Additionally, political parties that gained 3% of the votes in the latest nationwide elections (did not pass the electoral threshold and did not enter the Verkhovna Rada) will have the right to state financing.

Previously, a similar draft law № 5253-1 was registered in the Parliament, and the CPLR’s experts analyzed its provisions. The President of Ukraine exercised his veto right over this draft law.

In general, these amendments represent a positive step towards enhancing the financial independence of political parties and reducing the excessive influence of oligarchs on the political arena. Nevertheless, we agree with the opinion of the Main Scientific and Expert Department of the Verkhovna Rada of Ukraine, finding provision allowing political parties to place received budget funds on deposit accounts controversial.

According to the Law “On Political Parties”, the statutory activities of political parties are financed from the state budget, as well as it covered expenses related to pre-election campaigns. To receive such funds, a separate bank account must be opened exclusively designated for these funds, and precluding deposits of other sources. Failure to use budget funds received by a political party within a year is a ground for discontinuing state funding of its statutory activities.

Adoption of draft law № 9419-1 in its current version will lead to conflicts within the Law itself, since placing the funds of state funding of a political party’s statutory activity into a current or deposit bank account to recieve passive income in form of interest:

• will contradict the provisions of Article 17-3, which state these funds must be exclusively credited to a separate account opened for their receipt;
• will mean that such funds are not spent, therefore, providing grounds for discontinuing the state financing of political party’s statutory activities. 

In our view, the right to allocate funds to deposits and obtain passive income from them should be limited only to funds obtained from legitimate sources other than state financing.

The provision of the draft law № 9419-1, according to which political parties may not report on financial obligations that arosed and were settled within the reporting period is also problematic. This would create the possibility to settle financial obligations using third-party funds and not report them, which means reducing financial and property control over political parties.