On 18 October 2019, Ukrainian Law No. 140-IX, amending certain legislative instruments of Ukraine to improve the institutional anti-corruption mechanism (“Law No. 140”), came into force. The Law has significantly stepped up anti-corruption controls provided by the Ukrainian Law on Corruption Prevention (“Corruption Prevention Law”).
Most importantly, the legislature has slightly adjusted the list of persons covered by the Corruption Prevention Law. From now on, the list will include certain officers of the National Bank of Ukraine, officers of any executive support service (except for those unsalaried), and officers of business companies, in which the government holds at least a 50 percent equity stake.
Please note that the Law has substantially broadened the concept of “close relatives” and changed the definition of “family members” so that it includes minor children of a filer (declarant), regardless of whether they share the same household with the latter. All this is likely to make things hard for filers, at they will be required to obtain, check and enter into their declarations a large quantity of data.
The disclosure requirements and the list of reportable assets have also been revised. Apparently, the amendments intend to address deficiencies and issues discovered over the past years of disclosure practice under the Corruption Prevention Law. It is worth mentioning that the amendments are scheduled to apply from 1 January 2020, in accordance with the Final and Transitional Provisions of Law No. 140.
It is noteworthy that the reportable assets include, among other things, trusts and other similar entities, which are ultimately beneficially owned (controlled) by the filer or their family members, and cryptocurrencies in the possession of them or their family members. However, it appears that this will bring about doubts and controversies, given that the Corruption Prevention Law does not define the concept of “cryptocurrency,” as neither do other Ukrainian laws.
We are of the opinion that Law No. 140 will make the anti-corruption disclosure framework more complicated and, therefore, recommend that filers should — in good time — read and understand the new provisions of the Corruption Prevention Law to avoid any problems when filing their declarations.