System for Entities Performing Government Functions (UA0059)

Event: Introduction of the system for filing and publication of declarations of entities authorised to perform the functions of national or local government, in accordance with the Law of Ukraine “On the prevention of corruption.”; Implementation timeframe: 2016-2018; Entities responsible: National Agency for the Prevention of Corruption, State Special Communication Service.; Partners: Draft of the UN Development Programme in Ukraine “Enhanced Public Sector Transparency and Integrity”, Transparency International Ukraine non-governmental organisation, other civil society institutions and international organisations (by consent).; Expected results: Filing of declarations of the subjects to be declared as specified in article 3 of the Law of Ukraine “On the prevention of corruption.”

3. Ensure the filing and publication of e-declarations

Commitment Text:

Introduction of the system for filing and publication of declarations of entities authorized to perform the functions of national or local government, in accordance with the Law of Ukraine “On the prevention of corruption.”

Expected results: Filing of declarations of the subjects to be declared as specified in article 3 of the Law of Ukraine “On the prevention of corruption.”

Responsible Institutions: National Agency for the Prevention of Corruption, State Special Communication Service.

Supporting Institutions: UN Development Program in Ukraine “Enhanced Public Sector Transparency and Integrity”, Transparency International Ukraine non-governmental organization, other civil society institutions and international organizations (by consent).

Start date: December 2016..                                     End date: August 2018

Commitment Aim:

This commitment aims to implement the system for filing and publicizing declarations of individuals authorized to perform the functions of national or local government. Such implementation would be according to the law On the Prevention of Corruption. [43] During the previous action plan, the government created an open access unified web portal of civil servants’ declarations of income, property, and expenditures. [44] In this action plan, the government committed to ensure training of civil servants on filing e-declarations, timely filing of declarations via a properly functioning online system, and the online publication of declarations.

Status

Midterm: Complete

By the midterm, the government had completed implementation of this commitment. The National Agency on Corruption Prevention (NACP) launched two statutory waves of online filing of e-declarations for public officials. The first wave of e-declaration filings (covering over 105,000 top officials [45]) occurred from 1 September to 30 October 2016. The second wave of filings (covering over 700,000 officials at other offices) occurred from 1 January to 1 May 2017. According to NACP, by 1 July 2017, as many as 1,127,588 original e-declarations were filed. [46] In addition, NACP published the unified e-declarations registry online in an open data format. [47] For more information, please see the 2016­–2018 IRM midterm report. [48]

After the midterm assessment, the National Agency on Corruption Prevention (NACP) conducted one more statutory wave of filing e-declarations (for all public officials), occurring 1 January – 1 April 2018. Civil society experts noted that during the last wave, the online portal performed in a more stable manner. It suffered from fewer crashes. The reduced number of crashes may have resulted from improved processes: the declarants may have saved previous templates and submitted in advance. [49] As of 16 August 2018 the registry contained over 2,750,000 digital documents, including over 2,370,000 e-declarations, over 300,000 corrected documents, and over 80,000 notices of a substantial change in property status. [50] NACP also launched an online training for officials (primarily video lectures) on filing e-declarations and provided guidance by email and hotline on the correct submission of e-declarations. The agency conducted a registry audit, ensured access to other state registries, [51] and drafted law #7276, which would extend NACP’s access to public information. [52] These actions mark the full completion of this commitment, as written.

NACP also partially implemented past IRM recommendations concerning the introduction of an automated verification software. On 24 October 2017, NACP approved procedures for evaluating each e-declaration, laying the legal foundation for future audits. [53] The procedures established criteria for ranking each declaration by risk indicators. On 20 August 2018, the United Nations Development Programme in Ukraine granted NACP the software for an automated audit of e-declarations. The software can compare data from declarations with the data from other registries (land register, customs register, and other fiscal registries) by 137 risk indicators. [54] This will enable the agency to identify the declarations incongruent with other state registries and therefore bearing high corruption risks. Thus, NACP can analyze them further and, if necessary, pass them over to the National Anti-Corruption Bureau of Ukraine for investigation. However, civil society experts warn of potential barriers, which may hinder the upcoming launch of the automated system of e-declarations audit. These barriers include obtaining cybersecurity certificates from the State Special Communication Service, political considerations stalling the identification of corrupt officials, and uncoordinated decision making within NACP. [55] From its side, NACP listed many technical and testing activities required to launch the automated system and promised to complete them by September 2018. [56] Although NACP introduced the technical system of verification by the end of September 2018, it has not started the actual verification of e-declarations. [57]

The IRM progress report noted the concern that authorities might abuse the new obligation for civil society leaders to submit asset declarations. The report also noted that noncompliance with this law could result in fiscal authority pressure on civil society organizations. On 29 March 2018 NACP issued a decree clarifying that anti-corruption activists are obliged to file e-declarations only if they satisfy all of three criteria. The first is that they receive funds or property within the frame of corruption prevention programs. The second notes they must systematically implement corruption prevention policies using those funds. Thirdly, these activists must be principals of civil society organizations conducting corruption prevention activities. [58] This obligation to report thus requires principals of internationally funded anti-corruption projects to declare their personal assets. However, the government exempts other employees from the obligation to disclose. An expert from the PACT ENGAGE project viewed this decree as a political action by NACP to stay on good terms with international programs. The decree does not require the majority of employees for these programs to submit e-declarations. [59] However, the law, which has a higher authority than the agency’s decree, does not specify these criteria. Therefore, the requirement for asset disclosure remains broad and could potentially be used to put pressure on anti-corruption activists. The executive director of Transparency International Ukraine called it “the sword of Damocles” for civic activists. [60]

Did It Open Government?

Access to Information: Major

This commitment represents a significant step forward in opening a massive amount of information to the public. Prior to this action plan, officials submitted only paper declarations, which had a limited amount of information, were hard to obtain and process, and could be easily lost. The law On the Prevention of Corruption, adopted on 14 October 2014, mandated that officials disclose their assets online. The government developed a portal for filing e-asset declarations. Nevertheless, there was always a risk that the actual filing of e-declarations would never occur. Therefore, the government committed to enact the system for filing and publication of declarations. It supported that commitment with trainings for civil servants, enactment of related bylaws, launch of the public registry with all submitted data for most categories of officials and the very process of filing e-declarations.

Implementation of this commitment created an unprecedented amount of publicly available information on officials’ assets. In contrast to paper declarations, the digital records can be easily copied and analyzed, thereby preventing data loss. Civil society and the media actively utilize this new source of information. Based on the monitoring of media investigations, it is estimated that about half of journalists’ investigations about corruption and all of journalists’ investigations about the lifestyles of officials are based on e-declarations data. [61] The data from the National Agency on Corruption Prevention (NACP) web portal allowed civil society activists to implement an independent project titled Declarations, [62] which contains both electronic declarations and digitized paper declarations. Declarations has a more user-friendly design, analytical modules, and subscription availability for news. [63]

Yet, the system has shortcomings that create potential barriers, limiting the scope of disclosed information. An activist from the civil society organization Anti-Corruption Action Center criticized the closed nature of certain categories of e-declarations. For example, the officials of the Secret Service of Ukraine file e-declarations into a separately classified system, while e-declarations of military prosecutors have disappeared from the registry. [64] Moreover, NACP updated the criteria to state that one-time income should be declared only if a person is able to use the funds to satisfy personal needs. [65] A civil society expert from the PACT ENGAGE project opined that authorities try to interpret the law in such a way that it loses its intent of full transparency. [66] For example, the nuance of this NACP update regarding change in property status is that until it is proven that a person is using one-time income for personal needs, the decree does not require them to declare that property.

That said, it is unclear how the e-declarations system and information disclosed through the portal affect government policy on recruitment or the dismissal of officials. NACP did not share the full e-declarations database with the National Anti-Corruption Bureau. In particular, NACP did not share the unique indentifier, which would allow a clear identification of persons. The lack of shared data complicates the investigation of felonies. [67] Civic activists note the absence of substantial criminal prosecution of high officials or even of many lower-ranking officials. That there exist no such prosecutions casts doubt on the effectiveness of the system. [68]

Carried Forward?

As the next action plan has not been released yet, it is unknown whether the government carried the commitment forward. The National Agency on Corruption Prevention (NACP) and the National Anti-Corruption Bureau (NABU) should be able to obtain access to all state registries and use available software of an automated verification of e-declarations. In particular, NACP could provide NABU the unique indentifier, which would allow a clear identification of persons in the registries.

Following the requests from Ukrainian civil society and the international community, the IRM researcher recommends that Parliament abolish legislative amendments that require civil society activists to submit e-declarations. Such legislation makes activists potential subjects of administrative and criminal prosecution.

[43] “The Law of Ukraine ‘On the Prevention of Corruption,’” #1700-VII, the Verkhovna Rada of Ukraine: The Official Web-Portal, http://zakon2.rada.gov.ua/laws/show/1700-18.

[44] “Report on Implementation of the Action Plan for Introduction of the Open Government Partnership Initiative in 2014–2015,” Open Government Partnership, https://www.opengovpartnership.org/wp-content/uploads/2001/01/Ukraine_End-Term_Self-Assessment-Report_2014-16_EN.pdf.

[45] The following are the top officials:

1. The president of Ukraine, members of the Parliament of Ukraine, the prime minister of Ukraine, the members of the Cabinet of Ministers of Ukraine, and heads of government agencies and their deputies;
2. Judges, prosecutors, investigators, and category A civil servants (according to the Law “On State Service”—civil servants of 1-3 categories); and
3. In local self-governance bodies: heads of oblast councils of oblast centers and their deputies, secretaries of city councils of oblast centers and their deputies, secretaries of city councils, mayors of cities of oblast significance, heads of rayon councils, heads of city district councils, and other officials of local self-governance of 1-3 categories.

[46] “The Interim Report on the Realization of the Action Plan for the Implementation of the Open Government Partnership Initiative in 2016–2018,” Civil Society and Authorities: Governmental Website, accessed 13 September 2017 (link no longer accessible as of 25 April 2018) http://civic.kmu.gov.ua/consult_mvc_kmu/uploads/attach-3467-910681586.doc.

[47] “The Unified E-declarations Registry,” National Agency for the Prevention of Corruption, https://portal.nazk.gov.ua/login.

[48] “Ukraine Mid-Term Report 2016–2018,” Open Government Partnership, https://www.opengovpartnership.org/documents/ukraine-mid-term-report-2016-2018-year-1/.

[49] Vitalii Shabunin (Anti-Corruption Action Center), interview with IRM researcher, 28 August 2018.

[50] Oleksandr Pysarenko (National Agency for the Prevention of Corruption), email exchange with IRM researcher, 5 September 2018.

[51] The Unified State Registry of the Ministry of Internal Affairs; the Registry of Tax Payers Owning over 10% of Stock in Companies; the State Registry of Property Rights on Real Estate; the Unified State Register of Legal Entities, Individual Entrepreneurs and Community Groups; the State Registry of Movable Property; the State Land Cadastre; the Unified State Registry of State Property; the State Naval Registry of Ukraine and Naval Book of Ukraine; the State Registry of Civil Aircrafts of Ukraine; the State Registry of Tax Payers; and the Integrated Information-Telecommunication System for Control of Persons, Vehicles, and Goods Crossing the State Border (the “Arkan” system).

[52] Oleksandr Pysarenko (National Agency for the Prevention of Corruption), email exchange with IRM researcher, 5 September 2018.

[53] “Decision #1019,” National Agency on Corruption Prevention, https://nazk.gov.ua/sites/default/files/docs/2017/%D0%B7%D0%B0%D1%81%D1%96%D0%B4%D0%B0%D0%BD%D0%BD%D1%8F/24.10/24.10%20(1019).tif.

[54] “UNDP Transferred the Software for an Automated Audit of E-declarations to NACP,” Reanimation Package of Reforms, https://rpr.org.ua/news/proon-peredala-nazk-prohramne-zabezpechennya-dlya-avtomatychnoji-perevirky-elektronnyh-deklaratsij/.

[55] Ibid.

[56] “The National Agency Makes the Next Step to Introduce the System of Logical and Arithmetic Control of Declarations,” National Agency on Corruption Prevention, https://nazk.gov.ua/news/nacionalne-agentstvo-zdiysnyuye-chergovyy-krok-iz-vprovadzhennya-systemy-provedennya-logichnogo.

[57] The System of Logical and Arithmetic Control of Declarations has been Launched, National Agency on Corruption Prevention, https://nazk.gov.ua/news/systema-logichnogo-ta-aryfmetychnogo-kontrolyu-deklaraciy-vvedena-v-ekspluataciyu

[58] “The Clarification on the Application of Particular Regulations of the Law of Ukraine ‘On the Prevention of Corruption,’” National Agency on Corruption Prevention, https://nazk.gov.ua/sites/default/files/docs/2018/news/29.03.2018%20%28%B9549%29.tif.

[59] Ivan Presniakov (PACT ENGAGE Project), interview with IRM researcher, 21 August 2018.

[60] Yaroslav Yurchyshyn (Transparency International Ukraine), interview with IRM researcher, 27 August 2018.

[61] Vitalii Shabunin (Anti-Corruption Action Center), interview with IRM researcher, 28 August 2018.

[62] Declarations, https://declarations.com.ua/.

[63] Ivan Presniakov (PACT ENGAGE Project), interview with IRM researcher, 21 August 2018.

[64] Vitalii Shabunin (Anti-Corruption Action Center), interview with IRM researcher, 28 August 2018.

[65] “The Notification about Considerable Change in Property Status,” National Agency on Corruption Prevention, https://nazk.gov.ua/sites/default/files/docs/2018/povidomlennya_pro_suttyevi_zminy_v_maynovomu_stani.pdf.

[66] Ivan Presniakov (PACT ENGAGE Project), interview with IRM researcher, 21 August 2018.

[67] Vitalii Shabunin (Anti-Corruption Action Center), interview with IRM researcher, 28 August 2018.

[68] Yaroslav Yurchyshyn (Transparency International Ukraine), interview with IRM researcher, 27 August 2018.