KEY POINTS:

IN THE NEW GOVERNMENT HAS BEEN FORMED. THE CRIMEA IS FULL OF ARMORED VEHICLES, PROBABLY, OF RUSSIAN ARMY.

After running away of the President of , the new Government, headed by Arsenii Yatseniuk, whose candidate was agreed with the Council of Maidan, was formed. But people do not leave Maidan – they demand full lustration for the , law enforcement bodies and judges. More and more corruption schemes, with the help of which the regime of the previous President Viktor Yanukovych had laundered the state money, become known. The Federation of Employers of Ukraine, controlled by a famous oligarch Dmytro Firtash, informs, that for the last years the business spent about 50% circulating assets for bribes in Ukraine.

1 In Kharkiv (the East of Ukraine) and the Crimea (the South of Ukraine) the riots are lasting. More than 10,000 came to the meeting and gave a rebuff to the pro-Russian separatists, chanting “The Crimea is Ukraine”. But in the morning on February 27 the building of the Council of Ministers and Verkhovna Rada of the Autonomous Republic of Crimea were invaded by unknown armed. The armored vehiclesstand near Simferopol. These vehicles roughly belong to the Russian Army.

The Revolution has gained a victory, but can we now fight the corruption?

After the victory of the Revolution, the Verkhovna Rada has adopted a number of enactments. Thus, it rehabilitated 28 political prisoners, dismissed the judges of the Constitutional Court for violation of the vow, elected Oleksandr Turchynov as a speaker of the Verkhovna Rada and Acting President, appointed a new head of the National Bank of Ukraine and dismissed previous Ministers.

immediately after dispensation from imprisonment Yuliia Tymoshenko told, that she would run for the presidency. But the performance of the former opposition leader was perceived rather skeptically by Maidan, first of all because of the people’s wish to see new authorities, not involved into corrupt scandals. The , ruled by Viktor Yanukovych, publicly condemned his actions. The General Prosecutor’s Officeofficially declared Viktor Yanukovych wanted on suspicion in committing mass murders of the citizens of Ukraine. The former minister of the Ministry of Internal Affairs Vitalii Zakharchenko, the Prosecutor General Viktor Pshonka, and the head of the Presidential Administration Andrii Kliuiev are wanted together with Yanukovych.

The activists of Maidan demolished metal fence at the Verkhovna Rada, which had become the symbol of the close former authorities. The activists of Maidan begin the series of entering the houses of high-ranking officials of the regime of Viktor Yanukovych. Ukrainians were mostly impressed by the estate of the former Prosecutor General Viktor Pshonka (photos). About 30 “Berkut” officers escaped in unknown direction, and took the weapon. According to the order of the head of the police the Special Forces “Berkut” were disbanded, because the fighters were accused in excessive aggression towards the protestors.

On February 25 the presidential electoral campaign started. Ukraine shall elect a new president on May 25 this year.

On February 27 the Parliament of Ukraine approved the new composition of the Government , headed by the Prime Minister Arsenii Yatseniuk, who is one of the party leaders of the protests. The representatives of Maidan previously developed and proposed to the parliament the criteria of the members’ selection to the Cabinet of Ministers. The first criterion is professionalism; work experience in the sphere not less than seven years (excluding the Ministry of Foreign Affairs, Security Service of Ukraine and the Ministry of Defense of Ukraine), including leadership positions – not less than five years. The second criterion is non-participation in the public authorities from the beginning of 2010 on the positions of the heads of the ministries, head of the regional administrations or any other position in the Presidential Administration. The third criterion is the absence in the list of the richest people of Ukraine according to the rating of different publications. The fourth criterion is noninvolvement into violation of human rights and absence of the information on corrupt activities.

2 The approved composition of the Governmentpredominantly does not meet these criteria. The basic problems are insufficient professional experience or trail of corruption, following a few members of the Government.

At the same time Euromaidan SOS informs on disappearance of 312 people. UAH continues to fall dropping from UAH 8.6 to 11.6 for USD 1 for a week.

Transparency InternationaI Ukraine urged the new Government not to repeat the old mistakes

The experience of the Orange Revolution in 2004 showed the failure of anticorruption efforts of the new authorities, despite the prevailing euphoria and widespread public support of its actions. And Transparency InternationaI Ukraine strongly warns – the story must not be repeated. The only hope to avoid this ruining cycle is brave, decisive and undeniable fight against corruption.

The new Government shall be formed according to the criteria of transparency, avoiding the conflict of interests. For this purpose the candidates for the positions shall publish theirdeclarations on property, incomes, expenses and obligations of financial nature.

The organization declares: “We offer not to invent a new unique way of anticorruption fight, but use the existing international experience and best practices of the national experts. Instead of providing the position of the deputy minister for combating corruption, it is important to concen- trate on the immediate establishment of the anticorruption body”.

The full text of the official position of Transparency InternationaI Ukraine is available at:http:// ti-ukraine.org/en/news/4419.html

Confrontations in Kharkiv and Crimea

Euromaidan spreads to the Eastern and Southern regions of Ukraine. People are protesting against separatism, somebody is protesting for annexation. On February 24 in Kharkiv mass meetings took place; people demanded the resignation of the city mayor Hennadii Kernes and the head of Kharkiv region Mykhailo Dobkin. They were accused by the citizens in the attempt to split the territorial integrity of Ukraine. On February 24 Dobkin declared that he would Photo - facebook.com/lilya.alr run for the presidency at the elections, and on February wrote a letter on resignation.

In the Crimea the events broke out harder. After a group of the fraction members of the Liberal Democratic Party of Russia, headed by Volodymyr Zhyrynovskyi, came in the Crimea and told that Russia has begun to issue Russian passports under the simplified procedure, mass riots started there (video).

On February 26 in Simferopol about 10 thousand Crimean Tatars took all approaches to the Verkhovna Rada of the Crimea, demanding to keep the Republic within Ukraine (video). At the same time on the same square the meeting consisting of a few hundred Russian nationalists took place. The Crimean Tatars chanted “The Crimea is Ukraine” and made local deputies to refuse from

3 separatism. Then the speaker of the Parliament of the Crimea Volodymyr Kostiantynov declared that the Crimean deputies do not raise the question of withdrawal of the autonomy from Ukraine. During the confrontations 2 people died.

The former Presidents of Ukraine publicly declared, that Russia had interfered in the policy of the Crimea. On February 26 it became known, that the troops of the Western military district, situated on the boundaries with Ukraine, were alerted suddenly. The officially declared aim was inspection of the forces in being.

As of February 27 the Council of Ministers and Verkhovna Rada of the Autonomous Republic of Crimea were invaded by unknown armed , who refused to negotiate. The Head of the Council of Ministers of the Autonomous Republic of Crimea applied to the people of the Crimea in connection with the extreme situation in the Crimean and called on everybody to show restraint, the negotiations were continuing. Journalists informed that Russian armoured vehicles stood near Simferopol. You will recall that Russia officially rents a range of military objects in the area of Sevastopol, located on the very South of the Crimean peninsula. Among other, Russian Black Sea Fleet is situated in Sevastopol. “Any movement of Russian troops outside the territory of the base of Russian Black Sea Fleet will be regarded as military aggression”, - told the speaker of the Verkhovna Rada Oleksandr Turchynov. The Ministry of Foreign Affairs of Russia declared that they are ready to react on the facts of violation of their fellow citizens’ rights. About 200 persons with Russian flags, chanting “Russia!” came to the Crimean Parliament. They cried that their President was Viktor Yanukovych.

Corruption of Yanukovych’s Family

At the residence of Viktor Yanukovych, people found valuable old-time books , which must be kept in the museum archives, among them, they found the first printed Ukrainian book “Apostol”. The journalists are working on the founded in Mezhyhiria documents, which were caught in Dnipro. For this purpose the journalists created the special website www. yanukovychleaks.org, where they had already published the first 500 documents. The European Parliament informed, that it could freeze the assets of Yanukovych, if the evidence would be found. Transparency International UK called on the British Government to create the corresponding interdepartmental group concerning Ukrainian assets.

In the office of the Party of Region in the Transcarpathian, people found the seal of electoral districts after the presidential election in 2010; it confirmed the fact that falsification of the election, when Viktor Yanukovych had won, took place.

Civic anticorruption movement

Citizens of Ukraine and businessmen began mass protesting meetings against corruption and refused to pay bribes. All over the country the examples of businessmen’s initiatives became known,

4 when they refused as an ultimatum to pay already usual bribes to the customs officers and other state authorities, threatening them to write the statement to the law enforcement bodies. Interestingly, corrupt state authorities do not only protest, but call on the citizens to assist these bodies voluntarily, because the state financing, as they explained, was not sufficient. The students of Ukrainian institutes and universities also refuse to pay bribes.

And do not forget: Civic activists unite in social networks and declare that they will we do not give bribes from now!) severely control the future authorities.

Across the country the civic lustration commissions are establishing which at their own discretion conduct the policy of purifying the local authorities from corrupts.

Transparency InternationaI Ukraine called on the new authorities to tune in to the GRECO recommendations.

On February 2014 Ministry of Justice of Ukraine published the report on implementing by Ukraine the recommendations of the Council of Europe Group of States against Corruption (GRECO) under the results of the third rounds of assessment (approved on December 06, 2013). The report concerns two parts – corruption criminalization and corruption counteraction in the sphere of financing political parties and electoral campaigns. And if in the part of corruption criminalization GRECO acknowledged the situation in Ukraine satisfactory, in the sphere of political corruption counteraction the situation caused an acute concern of the international experts.

The Government of for more than year and a half has failed to implement any of the nine recommendations of GRECO concerning transparency in political financing. Only three recommendations of Europeans have been implemented partially. The following recommendations are unfulfilled:

to harmonize the provisions on financing electoral campaigns, determined by the laws of Ukraine “On Elections of People’s Deputies of Ukraine”, “On Elections of the ”, “On Elections of Deputies of the Supreme Council of Autonomous Republic of Crimea , Local Councils and Village, Settlement and City Heads”;

to adopt clear and consistent laws on the current financing parties, which would correspond to the transparency standards, determined by the electoral legislation, especially those which demand using banking system for the purpose to give the possibility to trace party incomes;

to determine and regulate donations and ensure that membership dues cannot be used as a means to circumvent the rules, determined for donations;

to determine clearly the content and form of annual reports of political parties; to ensure proper and comprehensive accounting of incomes, debts and assets; to require the party to provide annual reports for the inspection by independent monitoring bodies and provide easy access to them by the

5 society in the terms, determined by the law; “Ukraine during the latest to establish an independent audit of the current and pre- four years has suffered the un- election reporting of the parties by the certified auditors; precedented robbery by its own leaders: assessments show that to establish the efficient mechanism of the monitoring of Yanukovych family’s assets total compliance with the legislation on financing political parties 12 billion dollars. In case the new and electoral campaigns, investigation of violations and government wants to return at bringing perpetrators to justice; least a part of the loot, they would need an international help in this to determine strict penalties for violation of the legislation issue.” on transparency in political financing.

Anders Åslund, Transparency InternationaI Ukraine calls on the new

authorities, which declare the strong commitment to fight senior fellow at Peterson Institute for International corruption, immediately to develop the legislation on Economics, former economic advisor to Ukrainian gov- transparency in financing political parties and electoral ernment. campaigns. It is very important to approve it in the shortest terms and conduct the elections of the Parliament and local councils in accordance with it. Without it any elections will be take place in the depths of political corruption.

Business during the latest several years was forced to give up to 50 % of the turnovers for bribes

Deputy Head of Federation of Employers of Ukraine (FEU) Dmytro Oliinyk has informed that business during the latest several years was forced to give up to 50 % of the turnovers for bribes. According to the key corruption directions, officials received over USD 20 billion of national riches from the legal turnover each year. Thus, Ukrainian business decided to introduce their anti-corruption initiative. According to this initiative, FEU is going to conduct their anti-corruption investigations themselves.

Some examples of corruption in different spheres in 2013

Public procurement – EUR 5 to 13 billion

According to the official data of the State Statistics Service, the sum of the public procurement performed for the money of state and communal enterprises, and enterprises with over 50 % of state ownership, was UAH 274 183,4 million (around EUR 26 billion). According to the data of enterprises, the cuts at the average total 15 to 50%.

Tax office – EUR 4 billion

In the period of 2013 in the conditions of real GDP slump and 10% reduction of export amount, VAT payers received a record sum of reimbursement – UAH 53.4 billion (around EUR 5 billion). At the same time, the remainder of the non-reimbursed sums was not practically decreased. These facts prove that a big piece of reimbursement was conducted for fake applications. At the same time, virtuous tax payers were proposed to pay around 30 – 35% of cuts in cash for the reimbursement.

According to business evaluations, the general amount of the corruption market when paying

6 VAT in 2013 was at least EUR 1.5 – 2 billion. Besides, FEU experts say that the previous year the country lost at least 100 million of Euro-excise due to the shadow turnover of spirit.

Customs – EUR 4 billion

When transporting most of the goods in containers in trucks, the importers were suggested to pay for customs clearance in the amount of 50% - in the state budget, and 50% cash for the operators who provided their “assistance”. There were almost no chances to refuse from the “assistance”, as far as otherwise the prize of the customs service grew up significantly, so customs clearance would cost much more. The other corruption sphere is smuggling for some firms without paying any customs duty. Finally, direct competition started between the companies that dumped and suggested more favourable conditions of customs clearance at the expense of decreasing payments in the state budget.

Grains – EUR 0.5 billion per year

Today we have the following situation on the grains market: on registration of permits on carriage of grains on the territory of Ukraine by grain traders they shall additionally pay unofficial payments in the amount of UAH 152 (EUR 15) per ton (it is 9% official export FOB price). Taking into consideration that the Ministry of Agriculture of the USA forecasts Ukrainian export more 31 million ton of grains in 2013-2014 marketing years; we speak about corruption on a scale of about EUR 0.5 per year. Thus, according to the traders’ data, vast majority of the mentioned sum (it is about EUR 0.3 billion) of these payments are paid to the services, established by the Ministry of Agriculture, the rest are paid to the State Sanitary and Epidemiologic Service of Ukraine, State Administration of Railway Transportation, Regional State Administrations, State Ecological Inspection of Ukraine.

Registration of land lots renting – EUR 100 billion

For the state registration of only one rent agreement of a land lot (material right) the bribe is unofficially paid in the amount from EUR 30 to EUR 130. For 2013 about 4.7 million rent agreements of land lots were concluded.

Subsurface use – EUR 50 million

820 special permits for using subsurface resources were issued only in 2013. In each case the special permit provides the necessity to conduct monitoring and scientific support, which is actually a paper corrupt scheme. If, according to calculations, about 2,000 permits were issued for previous 3 years, only for the monitoring services enterprises paid about EUR 20 million annually. Thus, for many enterprises the sums of the agreements for one field amount from EUR 15,000 to 300,000. Therefore, total sum of such payments is in many times bigger. Further using these funds after receiving on the accounts of the special state enterprises is unknown.

Ukraine Revolution Against Corruption Bulletin is published by the Ukrainian National Chapter staff of Trans- parency International. The Bulletin is aimed at foreign reporters, international and diplomatic missions.

The aim of the Bulletinis to briefly and promptly inform the world on the actual events of the Ukrainian pro- test against the lawlessness of the corrupt Ukrainian regime.

Editors contacts: Ukraine, , tel. +38 (044) 360-52-42; [email protected] 7