Ukraine pressed to restore anti-corruption disclosure requirement lifted for war

[June 30, 2023]  By Dan Peleschuk

KYIV (Reuters) - Ukraine is under pressure from international lenders and watchdogs at home to re-impose a requirement that officials publicly declare their assets, a pillar of its anti-corruption policies that was suspended after Russia's invasion last year.

Fighting graft is a top requirement for Ukraine to join the European Union, which offered Kyiv candidate status last year, and President Volodymyr Zelenskiy's government says it is a priority alongside the war effort.

Since 2016, hundreds of thousands of Ukrainian officials had been required to publicly disclose their assets under the measure, viewed as a powerful tool for Ukrainians to monitor their officials.

But the disclosures were made optional and restricted from public view after Russia's full-scale invasion last year, with authorities citing security risks from releasing information that might give away the location of public figures.

The International Monetary Fund (IMF) has singled out the return of the requirement for "high-risk and senior level public officials" as one of several benchmarks for paying out part of a $15.6 billion assistance package. It has urged Kyiv to begin bringing the measure back by the end of July.

Anastasia Radina, head of the Ukrainian parliament's anti-corruption committee, said legislation was under consideration that would allow exemptions, such as for service members and officials in Russian-occupied territory.

But she said watering down the disclosure requirements too much could blunt their impact.

"If the system has loopholes, then it cannot be fully functional in terms of its deterrence component," Radina told Reuters. "And that would be a problem."

The IMF on Thursday unlocked an $890 million tranche of its package based on Ukraine's "strong progress" in meeting reform commitments, but said other transparency and anti-corruption measures "need to proceed without delay".

A draft law restoring declarations had been introduced last September. Critics have accused some lawmakers of dragging their feet in a bid to avoid scrutiny.

The disclosures were a showcase of Ukraine's anti-corruption drive after the 2014 Maidan revolution, which toppled a pro-Russian president who fled leaving behind a lavish palace he had built for himself outside Kyiv.

Public servants, from municipal deputies to the president, were required to submit detailed annual declarations including information on personal finances, cars and property.

Ukraine's national flag waves in central Kharkiv during a long curfew, as Russia's attack on Ukraine continues, Ukraine August 23, 2022. REUTERS/Vitalii Hnidyi/File photo

The National Agency for Corruption Prevention, a state watchdog, reviewed the declarations and could launch legal action if it suspected ill-gotten wealth.

'SYSTEMIC INSTRUMENT'

The watchdog's head Oleksandr Novikov said restoring the measure was critical as Kyiv's Western partners consider flooding Ukraine with cash for reconstruction. He said he had weighed in on proposed adjustments and was also wary of too many loopholes.

"There will be no other systemic instrument with which to build integrity," he told Reuters.

Prime Minister Denys Shmyhal said on Friday Ukraine will receive $1.5 billion from the World Bank to support reconstruction and recovery.

Ukraine, which ranks 116th out of 180 countries in Transparency International's latest Corruption Perceptions Index, has dialled up its fight against graft in recent months.

Last month, anti-corruption authorities arrested the former head of the Supreme Court in a high-profile sting.

Andrii Borovyk, of Transparency's Ukraine office, said it was "extremely important" to restore public access to declarations, which he said could reveal whether officials are benefiting from building contracts, though certain exemptions were likely to be unavoidable.

"I think some compromise can be found, at least while the war is ongoing," said Borovyk.

A January poll by the New Europe Center think-tank in Kyiv found that 73% of Ukrainians believe Brussels is justified in seeking reforms from Kyiv as it pursues EU membership, even amid conflict.

Only one quarter of those believe the EU should be more lenient with its requirements.

(Reporting by Dan Peleschuk; Editing by Mike Collett-White and Peter Graff)

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