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Second Round of Monitoring Ukraine Monitoring Report ACN Anti-Corruption Network for Eastern Europe and Central Asia Anti-Corruption Division Directorate for Financial and Enterprise Affairs Organisation for Economic Co-operation and Development (OECD) 2, rue André-Pascal, 75775 Paris Cedex 16, France Phone: +33(0)1 45249964, Fax: +33(0)1 44306307 E-mail: [email protected] Website: www.oecd.org/corruption/acn OECD Anti-Corruption Network for Eastern Europe and Central Asia Istanbul Anti-Corruption Action Plan Second Round of Monitoring Ukraine Monitoring Report Adopted at the 9th Monitoring Meeting of the Anti-Corruption Network for Eastern Europe and Central Asia Istanbul Anti-Corruption Action Plan on 8 December 2010 at the OECD Headquarters in Paris. Contents Executive Summary ......................................................................................................................................... 3 Second Round of Monitoring .......................................................................................................................... 6 Country Background Information ................................................................................................................... 8 1. Anti-Corruption Policy .............................................................................................................................. 10 1.1–1.2–1.3 Political will to fight corruption, anti-corruption policy documents and corruption surveys 10 1.4-1.5 Public participation in anti-corruption policy work, raising awareness and public education ...... 14 1.6 Specialised anti-corruption policy and coordination institution .......................................................... 16 1.7 International anti-corruption conventions............................................................................................ 19 2. Criminalisation of Corruption ................................................................................................................... 21 2.1-2.2 Offences and Elements of Offence ................................................................................................ 21 2.3 Definition of Public Official ................................................................................................................ 29 2.4-2.5–2.6 Sanctions, Confiscation, Immunities and Statute of Limitations ........................................... 33 2.7 International cooperation and mutual legal assistance ........................................................................ 38 2.8 Application, Interpretation and Procedure ........................................................................................... 39 2.9 Specialised Anti-Corruption Law-Enforcement Bodies ...................................................................... 43 3. Prevention of corruption ............................................................................................................................ 46 3.1 Corruption Prevention Institutions ...................................................................................................... 46 3.2 Integrity of Public Service ................................................................................................................... 46 3.3 Promoting transparency and reducing discretion in public administration ......................................... 54 3.4 Public Financial Control and Audit ..................................................................................................... 56 3.5 Public Procurement ............................................................................................................................. 59 3.6 Access to Information .......................................................................................................................... 61 3.7 Political corruption .............................................................................................................................. 63 3.8 Integrity in Judiciary ............................................................................................................................ 65 3.9 Integrity in the private sector ............................................................................................................... 69 Summary Table ............................................................................................................................................. 71 2 Executive Summary This report analyzes progress made in Ukraine in developing anti-corruption reforms and implementing recommendations received under the Istanbul Anti-Corruption Action Plan since the first monitoring round in 2006. The report also provides new recommendations in three areas: anti-corruption policies; criminalisation of corruption; and prevention of corruption. Anti-Corruption Policy The debate about corruption has occupied a prominent position in public and political life of Ukraine for several years. Key political figures repeatedly declare their resolve to fight corruption. These political declarations have not yet translated into real results. The adoption of the so called "anti-corruption package", which consists of several anti-corruption laws, is a vivid example. The package was proposed for adoption of Parliament in 2006; it was finally adopted in June 2009, but its entry into force was postponed twice and is currently expected in January 2011. When many other countries in transition have reformed their legal frameworks several years ago, and came to face enforcement challenges, Ukraine has yet to make the first step and to adopt relevant laws. The Concept of Overcoming Corruption "Towards Integrity", adopted in 2006 by the previous government, continues to provide anti-corruption strategy of the country. However, it does not provide a monitoring mechanism and little effort was made to assess its implementation. In any case, the new government does not have a strong ownership of this policy document. The Ukrainian authorities indicated that a new strategy is being developed. While many corruption surveys were conducted in Ukraine, the government has played little role in commissioning and designing such studies, and their findings are yet to be used for the development and monitoring of the new strategy. In February 2010, the newly elected President established the National Anti-Corruption Committee, which is an advisory high level body. To date the Committee did not provide important contribution to the anti- corruption activities in practice. In June 2008, the Cabinet of Ministers of Ukraine established the office of the Government Agent on Anti-Corruption Policy; it became operational in April 2009. The work of the Agent is supported by a Bureau on Anti-Corruption Policy, which was established in June 2010 and has 15 staff members. While the Agent has a broad corruption prevention mandate, it is not a member of the National Anti-Corruption Committee. The establishment of the Agency and the Bureau are important steps in the right direction, but their capacity need to be strengthened, and proper coordination with other bodies responsible for the prevention of corruption in the Government, in the Parliament and in the Presidential Administration need to be ensured. Criminalisation of Corruption Despite significant efforts, to date Ukraine has not made substantive progress in reforming anti- corruption criminal legislation. The anti-corruption package noted above would address some of the recommendations when it enters into force; however a number of shortcomings remain in the package. Further legal reforms are needed to ensure that offering, promising and requesting a bribe are criminalised according to international standards; trading in influence, bribery through and for the benefit 3 of third person should be criminalised as well. Clear definition of bribe should be provided in criminal law and explicitly include non-pecuniary undue advantages. Attempt to criminalise illicit enrichment is welcome but the definition of this crime should be brought in line with the UNCAC. Corruption offences involving foreign and international public officials should be criminalised. The draft Law "On Amendments to the Criminal and Criminal-Procedure Codes on Improving the Procedure for Carrying out of Confiscation" aims to bring Ukrainian legislation in compliance with international standards in the area of confiscation; however, it is not clear when this law may be adopted and enter into force. To date, no measures were taken to limit the immunity of some categories of high level public officials from investigation and prosecution for corruption offences; effective and transparent procedures for lifting such immunities should also be ensured. The Law of Ukraine on the Liability of Legal Persons for Corruption Offences, which is a part of the anti- corruption package, makes an effort to bring Ukrainian legislation in compliance with international requirements. However, it contains several shortcomings. In particular, it does not include all corruption related offences, it does not specify what constitutes a legal entity within the scope of the law, and it allows starting proceedings against a legal person only after the proceedings against the natural person were completed. The debate on creation of separate anti-corruption law enforcement agency has been going for a very long time in Ukraine. In the 2008, the Concept of the Criminal Justice System Reform stipulated establishment of a specialised investigative anti-corruption body along with specialised
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