Ukraine Strengthens Anticorruption Legislation
In April - May 2013 the Ukrainian Parliament adopted three anticorruption laws, namely the Law of Ukraine On Bringing the National Legislation into Compliance with Standards of the Criminal Law Convention on Corruption No. 221-VII, dated 18 April 2013 ("Law on Compliance with the Criminal Law Convention"), the Law of Ukraine On Implementation of the Anticorruption Policy No. 197-VII, dated 18 April 2013 ("Law on Anticorruption Policy"), and the Law of Ukraine On Amendment of Certain Legislative Acts Regarding Liability of Legal Entities No. 314-VII, dated 23 May 2013 ("Law on Liability of Companies"). These laws were adopted to bring the Ukrainian anticorruption legislation into compliance with the recommendations of the Council of Europe's Group of States against Corruption (GRECO). The Law on Compliance with the Criminal Law Convention has been signed by the President and has already become effective. The President's approval of the other two laws is still pending.
Below we summarize the key provisions of these laws.
Law on Compliance with the Criminal Law Convention:
- amends the definition of "improper advantage", which now covers money or other assets, advantages, privileges, services, non-material assets, which are promised, offered, given or accepted without proper legal reasons;
- replaced the notion of "bribe" with "improper advantage". Acceptance of any kind of improper advantage is subject to criminal liability;
- foresees criminal liability for accepting an offer or promise of improper advantage; and criminal liability for commitment of corruption related offences in favor of third parties;
- provides for more severe criminal sanctions for corruption related offences; and
- extends the list of persons, who are subject to liability for corruption related offences, to any employee of a legal entity.
Law on Anticorruption Policy:
- extends the definition of "connected persons" among others to great-grandparents, great-grandchildren, fathers-in-law and mothers-in-law, guardians or trustees;
- amends the definition of "conflict of interest", which now is not limited only to the conflict between personal and professional interests, but also includes the conflict with the interests of connected persons;
- extends the list of persons, who are subject to liability for corruption related offences, to any official of a non-privately owned legal entity;
- limits the obligation to notify anticorruption authorities about facts of corruption by officials of legal entities only to officials of non-privately owned legal entities;
- provides for stricter rules on financial control, i.e., the obligation for officials of non-privately owned legal entities to submit financial declarations for one consecutive year after termination of employment; extension of the list of officials whose financial declarations are subject to disclosure in media;
- introduces stricter rules on avoidance of conflicts of interests, i.e., officials of non-privately owned legal entities within 10 days after taking the position shall transfer management over its companies or corporate rights in such companies to third persons;
- envisages that information on persons included to the State Register of Persons that Committed Corrupt Offences is public; and
- reduces the amount of a declarable single purchase by an official from UAH 150,000 to UAH 80,000.
Law on Liability of Companies:
- introduces criminal liability for institutions, companies or organizations, except for government agencies, local government authorities and organizations thereof, which are fully maintained at the costs of the state or local budget, Obligatory State Social Insurance Funds or Individual Deposit Insurance Fund as well as for international organizations; for a specific list of criminal offences, which among others include such corruption related offences as commercial bribery, bribery of persons rendering public services, offering and giving improper advantage to officials, and abuse of powers;
- sets limitation periods for criminal liability of legal entities;
- provides that legal entities may be subject to the following criminal sanctions: fine, confiscation of property, liquidation of the legal entity;
- introduces relevant amendments to the Criminal Procedure Code.
For further information please contact partner Vadym Samoilenko,
senior associate Oles Kvyat or associate Yaroslav Petrov