On 7 April 2011, the Ukrainian Parliament adopted a draft new law on Prevention and Combating Corruption in Ukraine (the "Anti-Corruption Law"). The Anti-Corruption Law is yet to be signed in to law by the Ukrainian President and officially promulgated but is scheduled to become effective on 1 July 2011 (with minor exceptions).
The Anti-Corruption Law establishes a new, comprehensive and progressive framework for the prevention and prosecution of corruption offences, including various restrictions and safeguards such as:
- declaring both profits and expenses by civil servants;
- a ban on engaging in commercial activities;
- pre-appointment verification of candidates' statements in
job applications; and
- the examination of draft pieces of legislation by the Ministry of Justice.
In particular, the Anti-Corruption Law determines what constitutes corruption, the persons who may be held liable for committing corruption offences. The Anti-Corruption Law also enunciates the state agencies and officials who are vested with the powers to implement measures to prevent and prosecute the corruption.
The Anti-Corruption Law defines a corruption offence as 'the use of office with the aim of obtaining or accepting illegal benefit, or the offering of illegal benefit by a person liable for a corrupt offence, or by another person at the former's request'.
The following categories of employees may be held liable for corruption offences:
- Individuals performing functions of the state or local
government, including the president, members of the Cabinet of
Ministers, parliament and local councils, civil servants, military
staff and judges;
- Officers of state-funded entities, heads of NGOs in receipt of
public funds and individuals that provide public services (e.g.
auditors, notaries, insolvency officers, appraisers and
arbitrators);
- Officials of foreign states and international
organisations;
- Foreign arbitrators and international court judges; and
- Officers of private business entities, regardless of the structure of the business entity (company, partnership etc).
The Anti-Corruption Law also provides detailed provisions on accepting gifts by incumbents. For instance, any hospitality received by a person in accordance with the commonly accepted standard is not treated as corruption, unless the value of the hospitality is in excess of 50% of the statutory minimum monthly salary, or the total value of the hospitality received from one person within a year is in excess of one month's statutory minimum monthly salary.
However, the Anti-Corruption Law also has a number of drawbacks, for example:
- the law does not prescribe any corruption offence liability for
business entities;
- there is no mandatory obligation on state officials'
relatives to declare their profits and expenses;
- the distinction between the corruption offence and the crime of bribery is somewhat unclear.
Notwithstanding these drawbacks, provided that it is rigorously enforced by Ukrainian authorities, the new Anti-Corruption Law is likely to improve the investment climate in Ukraine.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 18/04/2011.
