Ukraine: new anticorruption legislative developments

CMS Cameron McKenna, 
Kyiv, Ukraine, Mon, Nov 17, 2014

On 14 October 2014 theUkrainian Parliament, following demands from international financialorganisations and society, passed several laws aimed at preventing and fightingagainst corruption. In particular, the main laws that were passed are:

·        Law on NationalAnti-Corruption Bureau

The main and most-awaitedlaw is a Law on National Anti-Corruption Bureau (the “Bureau”). TheBureau is a newly established specialised law enforcement body targeting corruptionoffences, which will benefit from combined elements of police and prosecutorialpowers and authorities. The Bureau will conduct investigations with respect tocorruption offences committed by high-level state officials or if the amount ofdamage caused exceeds 500 [hours of] minimum wages (currently approximately EUR35 000).

Parliament appoints thehead of the Bureau on a proposal of the President. Both the head and otherofficials of the Bureau are appointed on a competitive basis as a result of anopen and transparent competition process. To combat corruption offences, theBureau accepts applications (including anonymous applications) through theofficial Bureau web site, e-mail and special hotline and, subsequently,commences an investigation of the alleged corruption offences. The Bureau haswide authority to cooperate with international and foreign law-enforcementorganisations and bodies, in particular on matters of asset recovery andprosecution of individuals accused of corruption offences outside the Ukraine.

To prevent corruptionwithin the Bureau, the Law provides special internal control instruments, suchas internal control departments and councils of public control. The Law alsoprovides for enhancement of liability for corruption offences committed byofficials of the Bureau.

The Law on NationalAnti-Corruption Bureau will enter into force on 25 January 2015.

·        Law on Prevention ofCorruption

The Law on Prevention ofCorruption was introduced to substitute existing anticorruption laws. Inparticular, the newly introduced Law provides for the establishment of anotherstate body, the National Anti-Corruption Agency (the “Agency”). Unlikethe Bureau, the Agency does not have any investigation powers, instead it isdesigned as a preventive authority aimed to monitor the current corruptionsituation in Ukraine and develop a state anticorruption policy.

The Law also provides newrules on receiving gifts and improper advantages by state officials and publicservice providers (such as auditors, advocates, notaries, insolvency officers,arbitrators etc.). It also introduces a mandatory requirement of implementing acompliance program and establishing the position of a compliance officer inlarge state entities, as well as private entities involved in publicprocurement. Additionally the Law introduces the concept of whistle-blowers andprovides for their protection.

The provisions of the Lawon Prevention of Corruption will become effective on 26 April 2015.

Authors:

Olga Vorozhbyt, Partner, Olga.Vorozhbyt@cms-cmck.com

Mykola Heletiy, Lawyer, Mykola.Heletiy@cms-cmck.com