Reform Index 150: Re-establishment of the Authority of NACP and Liability for False Declarations

In the previous round, the index was +0.5 points.

The law restoring the full powers of the NACP, +1.5 points

The law 1079-IX of 15.12.2020 eliminates gaps that arose after the decision of the Constitutional Court of Ukraine (CCU), which declared the provisions of the law on a number of powers of the National Agency on Corruption Prevention (NACP) to be unconstitutional.

In particular, the CCU declared unconstitutional the NAPC’s powers to monitor and control the implementation of legislation on ethical conduct of government officials, prevent and resolve their conflicts of interest, control and verify declarations of their income and property, store and publish such declarations, monitor their lifestyles, etc. It also concluded that the NACP’s powers to monitor the implementation of anti-corruption legislation by judges were contrary to the principle of separation of powers enshrined in the Constitution. The court ruled that special institutions should be established to monitor judges’ compliance with anti-corruption laws and provide separate declaration rules for them.

The law 1079-IX re-establishes the powers of the NACP and sets out special procedures for monitoring and supervising the implementation of anti-corruption legislation by judges and judges of the CCU. In particular, if the NACP finds a violation of the law on the prevention of corruption in the activities of judges of the CCU judge, it must inform the High Council of Justice  or CCU of the detection of such violations, and these bodies will decide on disciplinary action against the violator.

Law on Re-establishment of Liability for False Statements in Asset Declarations, +1.0 points

By the decision of the CCU, the liability of persons authorized to perform the functions of the state or local self-government (civil servants, deputies, judges, etc.) for false declaration was acknowledged unconstitutional. To return it, it was necessary to adopt new rules, which will be in line with the Constitution.

Law 1074-IX of 04.12.2020 returns liability, but changes the upper threshold of the amount of false declaration, after which comes liability. That is, now deputies will be punished only for unreliable data in declarations in the amount of more than UAH 1,135,000.

Violations in the amount of UAH 1,135,000 — 9,080,000 (500 – 4,000 subsistence wages for employable persons) include a fine of UAH 42.5 to UAH 51 thousand, community service up to 150 to 240 hours, deprivation of the right to hold certain positions up to 3 years, more than UAH  9,080,000 — a fine of UAH 51 to UAH 85 thousand and restraint of liberty for up to 2 years. There is no criminal liability for these violations.

Opinions of iMoRe experts on this law have divided. Although the median of the ratings are positive, several experts have rated the law negatively.

The National Bank will evaluate non-bank financial institutions according to the level of risk and public importance, +1.0 points

According to the so-called “split” law, the NBU must regulate the activities of non-bank financial institutions (insurance, leasing, financial companies, credit unions, pawnshops and credit bureaus). 

The NBU Resolution №157 of 11.12.2020 introduces a risk-oriented approach to inspections of these institutions. It sets criteria for determining socially important or risky institutions. These institutions will be inspected more often by the NBU than those that are less risky.