Article 7.4., 8.1. and 8.5
Conflict of Interest and Declarations

Declarations

One of the main mechanisms for preventing corruption is the submission of property declarations by officials. There are four types of declarations in Ukraine:

• Of a candidate for a position — submitted for election to the position;
• Annual — submitted by all declarants annually;
• Before dismissal — submitted by the declarant before dismissal, covers the period for which no declarations were submitted;
• After dismissal — submitted one year after dismissal.

The Law On Prevention of Corruption envisages a detailed list of persons who are required to submit declarations. It is quite extensive and covers almost all officials from different branches of government. Everything that is owned by the declarant and what they use or actually own is subject to declaration. Declarations also include information about members of families and their assets. The data in the declarations is publicly available, but without some personal data of the declarant, such as passport number, bank account numbers, location of objects, places of residence of individuals, etc., which are hidden. The National Agency on Corruption Prevention (NACP) checks declarations. For this purpose, several mechanisms are provided: control over the timeliness of submission; control over the correctness and completeness of filling out the declaration; logical and arithmetic control; full verification of declarations; monitoring of the declarant's lifestyle. Violations of the declaration rules are subject to criminal and administrative liability.

Preventing conflict of interest
The rules for eliminating and preventing conflict of interest apply to all civil servants, including judges, prosecutors, and senior state officials. The specialized laws may establish certain features regarding the settlement of conflict of interest with certain categories of persons. The Law On Prevention of Corruption imposes certain responsibilities on civil servants to resolve or prevent conflict of interest and regulates the application of measures to eliminate it. The measures range from restricting access to information to dismissal. The NACP is the main body that monitors and controls compliance with the rules of conflict of interest at the national level. It is also worth mentioning that in the courts and prosecutor's office, part of the functions of the NACP in this area are performed by judicial/prosecutor's self-government bodies (for more information, see Article 11.1 and Article 11.2). Violations of the conflict of interest requirements are subject to administrative and disciplinary liability. Sanctions for violations range from fines to confiscation of income or gifts. Together with the main sanction, the court may impose a ban on taking certain positions or engaging in certain activities. The court's decision is made with taking into account the circumstances of the offence.

Submission of declarations, their accessibility, and functioning of the declaration register
The submission of declarations is a complex process, especially for those who are submitting it for the first time. Difficulties may arise both regarding the correct display of information and the submission process itself. To avoid such difficulties, the NACP provides support on filling out declarations, which deserves merit. In particular, NACP:

• Provides technical support (online and by phone) in case of difficulties and publishes recommendations on the work with the register;
• Provides clarifications on the correct filling out of declarations, which are received well by many users and are regularly updated;
• Provides individual clarifications – according to the NACP, it provided more than 40,000 clarifications during the declaration campaign in 2021;
• Conducts training on correct declaration. In particular, a separate website dedicated exclusively to declarations has been created, a series of training videos on declarations has been created, and a training project “Declare correctly” has been developed for declarants and all comers, for which it may be required in the future.

In addition to the NACP, the public provides tangible assistance to declarants. For example, after the introduction of declarations, members of the public created a chatbot that allows declarants to fill out the declaration correctly. Individual government agencies and the NACP recommended using this tool on their official resources page.

The availability and openness of declarations can be positively assessed. All declarations, except for those of individuals performing functions related to the national security are published in the Register. Access to declarations is open, free of charge, and round-the-clock. For convenience, the Register has a simple and intuitive search system. Declarations can be searched by the person's name, and the options found can be sorted by eight criteria. The system stores declarations from 2015 to the present day, during this time more than 6 million documents have been collected in the Register.

Despite the good work of the NACP in providing assistance on declarations, the issue of simplifying the process of filling out declarations remains quite relevant. For example, the automatic filling out of those sections of the declaration that contain information that can be obtained from other state registers (real estate, vehicles, etc.) has not yet been implemented. According to interviewed experts, the introduction of this mechanism would significantly facilitate the process of filling out declarations and reduce the number of unintentional errors.

Since the beginning of the full-scale invasion of Ukraine by the Russian Federation, access to the public part of the Register has been restricted. This is due to the need to protect the personal data of declarants. As of December 2022, it is possible to log in exclusively to your personal account using an electronic key. The first attempt to restore e-declaration was made by Members of Parliament in September 2022, but it was never supported by the Parliament due to the lack of interest in it. However, in September 2023, the VRU voted in favour of a new law on the restoration of electronic declaration of officials. It specified that officials had to submit declarations not only for 2023 but also for the two previous years, but that their data should be kept secret from the public due to "security issues". The latter condition was heavily criticised by anti-corruption activists, and a petition was immediately posted on the President's website demanding that he veto the law and eventually open the register of officials' property declarations. The President responded by vetoing the law, which essentially means cancelling the last voting results and opening the procedure for its reconsideration in the VRU. On 20 September 2023, the Parliament adopted this law, taking into account the President's proposals. The registry should be made publicly available immediately, and the NACP should ensure that all bylaws, guidelines, etc. are aligned with the new declaration procedure.

Declaration verification
There are several mechanisms for verification of declarations:

1. Verification of the timeliness of declaration submission, logical and arithmetic control and verification of accuracy and completeness of filling in the declaration,
2. Full verification of declarations,
3. Verification of declarations of certain categories of persons.

In this section, we will discuss the full verification of declarations as the main and comprehensive verification mechanism. It is aimed at finding out the accuracy of the declared information, the accuracy of the assessment of declared assets, the presence of conflict of interest and signs of illegal enrichment or unreasonableness of assets. A full verification is conducted in accordance with the Procedure approved by the NACP. In general, the experts interviewed for this report and the public have no significant comments on this document and it is of high quality. At the same time, the expert community expresses some criticism regarding the mechanism of automated distribution of declarations subject to verification among NACP employees, since it does not provide sufficient guarantees against undue influence on the distribution process.

The effectiveness of full verification can be evaluated by quantitative and qualitative indicators. The first indicator is that the number of verified declarations (about 1,000 annually) is extremely low compared to the total number of declarations (about 950,000) submitted during the year. Despite the fact that it is only 0.1% of the total number of declarations, this is quite high considering the resources available to the NACP. Taking into account the number of submitted declarations, priority in full verification is given to the declarations of persons holding responsible positions or positions with high corruption risks. This approach is justified because it allows addressing top corruption, but it has several disadvantages. In particular, declarations of lower-level civil servants are practically not checked. This significantly reduces the effectiveness of declarations in the regions and allows lower-level civil servants to avoid liability for submitting false information in declarations. It is possible to increase the effectiveness of full verification by increasing the resources of the NACP, because, according to experts, the body does not have enough resources to carry out effective control of declarations. In turn, the quality of verifications has significantly improved lately. In particular, according to experts, a more thorough verification is conducted upon signs of illegal enrichment or unjustified assets.

The decision of the Constitutional Court in case No. 13-p/2020, which declared certain provisions of the Law On Corruption Prevention on declaration unconstitutional, significantly affected the effectiveness of conducting full verifications of declarations. This decision resulted in the suspension of 530 full verifications and the closure by law enforcement agencies of 4,712 criminal proceedings on declaring false information. In addition, one of the most significant consequences of this decision was the inability to hold liable the persons who lied in the declarations for 2020.

Conflict of interest
The main body that monitors and controls the implementation of legislation on conflict of interest is the NACP. However, a number of other bodies have similar powers. For example, the Council of Judges of Ukraine monitors the implementation of legislation on conflict of interest in the activity of judges, and the Council of Prosecutors of Ukraine monitors the same in the activity of prosecutors. However, the National Police (“NP”) has greater powers to monitor compliance with the legislation on conflict of interest issues. The only difference between the NACP and the NP is the subjects, in respect of which these bodies have the right to draw up protocols. Since 2020, the NACP has been drawing up protocols for violating the legislation on conflict of interest exclusively in relation to high-ranking officials (persons holding responsible positions or positions with a high risk of corruption), and the NP deals with other subjects.

The legislation on conflict of interest, according to experts, is complete, but its application is not always consistent. An interesting opinion on this issue was expressed by one of the experts we interviewed. He pointed out that “for quite a long time of existence of these norms (regarding conflict of interest), even judges do not fully understand how to apply them correctly.” Due to the complexity of the legislation, the NACP has the function of providing individual and general clarifications (recommendations) on the application of the legislation. The performance of the NACP in this direction can be assessed quite positively. The Head of the NACP separately pointed out that the development of these clarifications was realized to implement the UN Convention against Corruption. Interviewed experts positively assess the publication of the draft methodological recommendations for commenting, as well as the availability of more practical examples. However, they note that their quality should be improved, in particular, in their opinion, complex issues of law enforcement were ignored. They also suggest that the NACP create online simulators of potential conflict of interest situations so that civil servants can train and gain a better understanding of what a conflict of interest could look like.

The public also plays an important role in the prevention of conflicts of interest. Representatives of the public sector created the online tool “Hidden Interests”, which allows to automatically identify conflicts of interest in the activity of civil servants. The specified tool can also automatically analyze official documents for conflict of interest when they are accepted. The ”Hidden Interests” tool has already demonstrated its efficiency at the NACP. During the first 3 months of using the portal, 2000 risks were analyzed using four filters. Based on the results of this work, 47 investigations have been launched. The project is currently being updated. Soon, users will be able to research conflicts of interest again.

Administrative liability
Administrative liability is the main type of liability for violation of the Law on Corruption Prevention. It is designed to deter people from violating the requirements of the law and ensuring the inevitable punishment of offenders. In Ukraine, administrative liability differs significantly from criminal liability. In particular, it is characterized by simplified standards for protecting the rights and interests of the person being held liable, as well as a distinctive procedure for considering cases by courts.

Despite the rather high importance of administrative liability for the effective fight against corruption in Ukraine, it has some disadvantages that greatly reduce its effectiveness. For the purposes of this paragraph, we will highlight three main groups of administrative cases. Based on information obtained during interviews with experts, the following shortcomings of the procedure for bringing to administrative liability can be identified:

1) Return of cases for revision
After detecting an offense, authorized persons draw up an administrative report. Then the report and other case materials are referred to the court. Based on the materials received, the courts decide whether there are grounds for opening an administrative case. If there are any, then consideration of the case begins, and if there are no grounds, the court must refuse to open the case. However, judicial practice has developed in such a way that if the courts identify certain shortcomings in the case materials, they return them for revision to the relevant body. However, such a procedure is not envisaged by law at all. The main consequence of the return of cases by the courts is the impossibility of bringing persons to justice, since while the reports on offenses are being corrected, the time limit for bringing to administrative responsibility expires. However, it is worth noting that the number of returned cases has decreased over the years. For instance, 13% of corruption cases were returned in 2018, 10% the following year, and only 6% in 2020.

2) Low sanctions
If the court decides that the person is guilty, it imposes a penalty. The main penalty is generally in the form of a fine. However, in addition, the court may apply an additional penalty in the form of deprivation of the right to hold certain positions or engage in certain activity, or apply confiscation of items or money. Statistics show that judges are extremely loyal to those who have committed corruption-related offenses. The number of fines imposed is mostly minimal or slightly higher than the minimum. For example, for violating the requirements for receiving a gift, the law sets a fine from EUR 53 to 425 (in case of repeated commission). At the same time, the average fine imposed by the courts for this offense in 2020 is EUR 53 – that is, the minimum threshold at that time (statistics are compiled on the basis of 5 decisions).

3) Heterogeneous judicial practice and inequality of parties
Scientists and experts interviewed in the context of this section point out that one of the main problems of administrative liability is heterogeneous judicial practice. Quite often, courts have different views on the consideration of the described categories of cases. Each court interprets the provisions of the law at its discretion, which significantly reduces the effectiveness of the institution of administrative liability as a whole. The presence of the person who drew up the report on an administrative offence (an employee of the NACP or the NP) at the court hearing is not required. As a result, the motives and explanations of the person who drew up the protocol and who is much more familiar with the case are not considered by the courts. The decision of the court of first instance can only be contested by the person in respect of whom the protocol on an administrative offence was drawn up. Prosecutors do not have such an opportunity in this category of cases. As a result, if the decision of the court of first instance was made in favor of the person in respect of whom the protocol was drawn up, it remains in force and is not contested.

Implementation in practice after State evaluation.