Ukraine's Anti-Corruption Tsar: "Almost 50% of public officials submitted declarations, only 7% of MPs did"

The National Agency for Corruption Prevention is one of Ukraine's four anti-corruption bodies that has been operating for six years. During this time, the agency verified numerous declarations of public officials and political parties receiving state funding, and monitored the lifestyles of many country’s officials.

With russia's full-scale invasion of Ukraine, the specifics of the NACP work has become somewhat broader, with its focus shifting to military realities. In particular, corruption in border crossing and humanitarian aid, as well as the detection of russian assets in Ukraine and international companies that continue to work for the russian economy. However, one of the main activities of the agency remains the verification of e-declarations of high-ranking officials (although this mandatory process was suspended with the outbreak of war) and monitoring their lifestyles.

Mind talked to Oleksandr Novikov, Head of the NACP, about the uncertainty with the resumption of e-declarations for top officials and verification of declarations, the mysterious case of the odious Kyrylo Tymoshenko, mayor’s of Ternopil bonuses, the russian trace in the Latvian company VS Energy, as well as the country’s most corrupt areas, and the State Anti-Corruption Programme.

On monitoring the lives of top officials and possible problems with declarations 

– The NACP put the verification of the declarations of top officials on hold with the outbreak of hostilities, and you said at the time that criminal cases of non-declaration should be closed. What is happening now with the cases of false declarations that have been initiated before the outbreak of the war? And how have you managed to reorganise your work to monitor the lifestyles of officials despite the absence of e-declaration of assets for civil servants?

– To date, almost 400,000 declarations have been voluntarily submitted out of a total of almost 800,000 civil servants. It means that the habit of being accountable to the public has become part of the culture of Ukrainian civil servants. For my part, I would like to point out that both the availability of declarations and their absence do not prevent the NACP from monitoring the lifestyle of officials, which helps us to identify unjustified assets or illicit enrichment.

If we find amounts of up to UAH 6 million, these are unjustified assets. In this case, we pass the materials to the SAP (Specialized Anti-Corruption Prosecutor's Office), and prosecutors file claims for the seizure of assets not confirmed by income in civil proceedings in favour of Ukrainian citizens. If the amount exceeds UAH 6 million, it is a criminal proceeding and the property is also seized in favour of the state. In other words, the mere fact that the obligation to declare until 1 April 2022/2023 was suspended did not prevent virtuous Ukrainian officials from filing their declarations and did not hinder our work.

Regarding cases of false declarations that occurred before the war: in all full audits initiated by the NACP, we have submitted materials on the existence of a criminal/administrative offence to the court or law enforcement agencies. After the appointment of the Special Anti-Corruption Prosecutor to the HACC (High Anti-Corruption Court of Ukraine), most of the cases investigated by the NABU (National Anti-Corruption Bureau) were sent to the HACC (especially those involving high-ranking officials).

I would like to note that a dangerous decision of the HACC has now been made that could destroy the declaration procedure. I hope that the HACC Appeals Chamber will cancel it.

– What are the pitfalls?

– If an MP said that he or she did not fill in the declaration personally (although it should be done independently), but his or her assistant did, it would mean that the false information was unintentional. Thus, any of the almost 800,000 declarants will be able to appeal that they have not filled in the declaration themselves, but their relative or crony etc. Then the declaration procedure will lose its meaning.

The SAP has not received the full text of the decision yet. Once it is received, it will be supplemented by the SAP's appeal (the case of one of the MPs of the Servant of the People faction, Maksym Pashkovsky, who was acquitted by the HACC on charges of submitting false information in the declaration because it was allegedly filled out by his assistant). It's strange that even judges are convicted, but for some reason, the MP is acquitted…

– To continue the topic of monitoring the lifestyle of officials: The NACP recently published information that Ternopil Mayor Sergiy Nadal received bonuses of up to 250% of his official salary in 2021-2022. The mayor's office claims that the information is untrue, and the NACP is thus putting pressure on the local government…

– Our Conflict of Interest Department monitored the implementation of the conflict of interest legislation. We found out that the Ternopil City Council had set up a commission of the mayor's subordinates, which set a bonus for him in the specified amount. The subordinates are dependent on their manager, so the law prohibits them from making decisions regarding the manager. So, all the statements made by the Ternopil Mayor's office do not correspond with the actual facts of the case. (The court acquitted Sergiy Nadal at a hearing on 18 April – Mind).

Nevertheless, we are grateful to the Mayor of Ternopil for his initiative to look deeper into the issues of bonuses for city mayors. The NACP will provide additional explanations and check other city councils and mayors in Ukraine to avoid similar situations and bring to justice those city leaders who have violated the law.

On the vague chances of restoring e-declaration

– Returning to the issue of asset declarations, I note that Western partners require the authorities to restore the e-declaration of assets for civil servants in order to continue to allocate funds to Ukraine. At the end of September 2022, the Head of the Servant of the People parliamentary group, David Arakhamia, submitted to the Verkhovna Rada draft law No. 8071 on the resumption of e-declarations and verification of declarations suspended at the beginning of the war. To date, the bill has been included in the agenda of the parliament’s ninth session and a working group has been set up. However, there is an opinion that the Bankova (i.e. government) is imitating the intention to fulfil this requirement, and the issue is currently frozen. What is the actual situation (as of 17 April, only 34 MPs have filed their income declarations for 2021, and 17 for 2022) and will e-declarations be returned soon?

– I would like to emphasise that e-declarations are still working, but they are voluntary, and there is no clear date by which the 2021 and 2022 declarations must be submitted.

– Why has it not been adopted yet?

– The Conciliation Board of party faction leaders, which is to set the agenda in the office of the Chairman of the Verkhovna Rada, according to the rules, cannot make a decision and bring the draft law (which actually does not require any revisions) to the sessions hall.

I am sure that MPs will delay its adoption as much as possible. After all, almost 50% of all public officials submitted their declarations, while only 7% of MPs did so. It means that the level of legal culture in our parliament is, unfortunately, lower than that of civil servants in general.

– And what is significant is that neither the leadership of the Verkhovna Rada, nor the leaders of the parliamentary majority, nor the heads of factions/groups have submitted declarations to the NACP… 

– The Speaker of the Verkhovna Rada, Ruslan Stefanchuk, submitted his declaration for 2021 in the second half of March (Kira Rudyk has also recently submitted her declaration for 2021 and 2022, as has Roksolana Pidlasa, and Galyna Tretiakova for 2021).

– Isn't this an imitation of the process?

– Yes, it is. MPs imitate the process because there is a huge public demand for justice.

– So, are we going to see the resumption of e-declarations and declaration verification soon?

– The memorandum with the IMF requires Ukraine (in order to receive $17 billion without which the state budget will not be fulfilled) to adopt the law by the end of July. However, I hope that MPs will be guided not by the IMF's will, but by the will of the people of Ukraine and will pass the law before July. According to the Constitution, the people are the source of power, not the IMF. So let's check who is more important for the Verkhovna Rada….

– And if they don't pass it at all, they will say that the kremlin prevented it. This version is the most universal for Ukrainian authorities on any issue. 

– The kremlin does not interfere with the NACP. However, we do. On 22 February 2022, when putin made an appeal to recognize the DPR and LPR, he said that the NACP, NABU, HACC and SAP were a threat to russia.

On the State Anti-Corruption Program and obstacles to its implementation

– In February, at a meeting with the ambassadors of the G7 countries, you made it clear that the scale of corruption in Ukraine was very high and that it would be difficult to implement the State Anti-Corruption Programme (SACP) in 2023-2025 due to resistance "from the agencies that belong to the most corrupt areas". What areas were meant?

– These corrupt areas and entities do not influence the NACP, but the government and the Verkhovna Rada, which slows down their work. The President has set a goal for the government and parliament – to start negotiations on Ukraine's accession to the EU in December at the latest. Another part of the goal is Ukraine's accession to NATO. And without the implementation of the Anti-Corruption Strategy and the State Programme for its implementation, in particular in 2023, the goal will not be achieved.

Recently, the NACP held a presentation of the SAP, which was attended by the Speaker of the Verkhovna Rada, Deputy Prime Minister Mykhailo Fedorov, Minister of Defence Oleksiy Reznikov, Minister of Agrarian Policy Mykola Solsky, Minister of Education Oksen Lisovy, Head of the AMCU (Anti-Monopoly Committee of Ukraine) Olga Pishchanska and other top officials. These are almost all of the main bodies responsible for implementing specific measures to implement the SACP.

– So maybe you could list the most corrupt areas that hinder anti-corruption processes and our progress towards the EU and NATO? 

– In early April, we presented the results of a social survey on the level of corruption in Ukraine. For business, customs is the most corrupt, and for the public, law enforcement is the most corrupt. Corruption in the allocation of land plots, obtaining construction permits, and connecting to utility networks is a problem for both businesses and the public. The issue has been solved at the central level (for facilities of the third category of complexity), but corruption still remains at the local level. By the way, recently Danylo Hetmantsev announced changes to the legislation that would introduce a competitive selection of the head of the Customs Service based on the model used for the competitive selection of the head of the NACP.

Returning to the issue of the NACP's bills, I emphasise that they are approved by the heads of all ministries and the Secretariat of the Cabinet of Ministers. Then they go to a meeting of the Cabinet of Ministers.  And then the acts are returned to the NACP. And it is a constant circle that we are wandering around with the government. However, I am sure that after the presentation of the SAP and after the Chairman of the Verkhovna Rada and ministers have committed themselves to moving Ukraine in the direction of virtue, the situation will change.

– Speaking about the SAP, how exactly does it empower anti-corruption agencies, in particular the NACP?

– I know there is an opinion that the SACP strengthens the powers of anti-corruption agencies. It is probably because, according to the law, the NACP has to coordinate the implementation of all measures. The NACP has the right to initiate the issue of responsibility of heads of central executive bodies for their failing to implement the measures of the State Anti-Corruption Programme, including the responsibility of the head of government.

The second point is that corruption is a product of a broken system. And the points of the SAP should adjust various sectors of the Ukrainian state apparatus so as not to generate corruption (judiciary, security and defence, land and construction, infrastructure, education, and healthcare). The SACP contains a sectoral component. For example, a geoinformation system should be created that allows all land documents (this sector is among the three most corrupt) to be issued automatically.

And third, ensuring the inevitability of punishment for corruption. It includes amendments to the Criminal Procedure Code, ensuring the institutional independence of the SAP and reducing formal procedures that do not affect the results of the investigation but make it many times longer (including the introduction of a single review of simple proceedings in the HACC, in particular, declaration proceedings).

On eliminating corruption at border crossings

– After the full-scale invasion, the NACP's focus shifted to the war. In particular, it is focused on identifying corruption risks in border crossing, restrictions on the circulation of medicines in wartime, provision of housing for military personnel and humanitarian aid. Which of these areas is the most corrupt and why?

– Unlike the NABU, SAP and HACC, we do not work with specific cases, but with all areas of public policy. In particular, the NACP analysed corruption risks in the area of humanitarian aid and sent recommendations to all involved agencies. It analysed corruption risks in border crossings and, at the request of the Prime Minister, took on the task of drafting government orders to eliminate corruption risks in border crossings (they are enormous – hundreds of criminal proceedings). On 3 April, a government committee approved our draft. We hope it will be approved by the government soon.

The draft contains a list of measures, and its first point is for the Ministry of Defence to prepare amendments to the Presidential Decree "On the Introduction of Martial Law", which will bring legal relations in line with the requirements of the Constitution of Ukraine. Clause 2 is to develop new border crossing rules that will comply with the updated presidential decree approved by the Verkhovna Rada and the requirements of Ukrainian legislation on border crossing. Point No. 3 is to develop new regulations for the Shlyakh system (which for some reason border guards do not currently have access to), which will make the issuance and use of permits as transparent and non-corrupt as possible.

About Kyrylo Tymoshenko and the mysterious car

– In February, the NABU sent a request to the NACP regarding Kyrylo Tymoshenko for using a humanitarian Chevrolet Tahoe for personal purposes. The NACP is conducting an investigation. What are the results? And what about the 49 cars of this brand (which are freely travelling around Kyiv) that were donated for humanitarian purposes?

– The inspection is still ongoing. Because none of the state bodies that received these vehicles can provide us with information about who owns the car that Tymoshenko drove. It is very strange. Various government agencies deny it.

– And Tymoshenko did not drive it at all…

– To his credit, he gave us all the explanations. Obviously, Tymoshenko had nothing to do with the documentation of these procedures. He was dealing with the restoration of infrastructure and humanitarian issues in the occupied or near-occupied territories.

In general, I had hoped that the Tymoshenko case would be completed in February. But since there are such additional complications, I cannot predict anything now.

On successes in finding russian assets and procedures with sanctioned entities

– Since the beginning of the war, the NACP has been searching for assets of russians and foreigners in russian companies. Are there any results in this area? And will the monitoring of belarusian assets affect them?

– At the request of the Ministry of Foreign Affairs and the Office of the President, in February 2022, we joined the process of identifying legal entities and individuals involved in the war. The NACP has developed the War and Sanctions database, which is currently used by our Ministry of Foreign Affairs, the NBU and the foreign ministries of other countries to identify individuals to impose sanctions on. We have also initiated a law that allows us to confiscate assets of sanctioned persons (only two countries – Canada and Ukraine – have adopted such a law since the beginning of the large-scale aggression).

Therefore, step 1 is to impose sanctions on russia, and we are participating in the process together with the SSU, the NSDC and the Interagency Working Group on Sanction Policy (headed by Deputy Prime Minister Yuliya Svyrydenko). After sanctions are imposed, the Ministry of Justice requests the NACP and other agencies to provide materials that may serve as a basis for the confiscation of the assets of the sanctioned persons. The NACP has provided materials on all assets in respect of which the HACC has so far made a decision to confiscate.

As for the figures on the assets of russians and the number of foreigners in russian companies, the Ministry of Justice has the information, it is its jurisdiction.

– Speaking of sanctioned facilities, it is unclear what should happen to the property that is nationalised – where is it transferred to, and who will then dispose of it? There are also questions about the procedure for selling such property and where the money will go.

– There is the Law of Ukraine on the Management of State-Owned Property, according to which the Cabinet of Ministers must make a decision on the objects that become state property. In addition, the confiscation procedure has been in place in Ukraine for 30 years: it can be applied to the property confiscated from the russians.

Since, indeed, many objects have been confiscated, it is necessary to develop directions for their use. On 31 March 2023, an expert group was set up under the Interagency Working Group on Sanction Policy to recommend to the government how to use the confiscated property. For example, the shares of the russian First Investment Bank will hopefully be transferred to the charter capital of Ukrposhta (Ukrainian Post) – the expert group discussed this issue at its first meeting last week.

About the notorious case of Latvian VS Energy and the nuances of the list of 'international sponsors of war'

– Recently, in an interview with the Ambassador of the Republic of Latvia, we talked about VS Energy, a company that has problems in Ukraine due to the 'russian trace' that was discoveed in its assets. However, the ambassador claims that the company is owned by Latvian citizens…  Could you comment on this confusing case?

– Pursuant to the order of the Interagency Working Group, the NACP, together with partners from the EU and the UK, investigated the entire chain of connections of the so-called luzhniki group – babakov, giner, voyevodin – with VS Energy. And it has obtained evidence that shows that Latvian citizens are in fact the facade of a russian organised group to control a significant part of our energy sector.

A few weeks ago, the NACP passed the data to the Ministry of Justice to initiate the issue of confiscation. According to the NACP, there is enough evidence to confiscate this property of the russians, who are using Latvian citizens as a shield, in favour of Ukrainian citizens. And this is tens of billions of dollars.

– Among the companies included in the NACP's list of international sponsors of the war are the American Procter & Gamble, the French supermarket chain Auchan and Metro Cash & Carry, Raiffeisen Bank, etc. (due to the decision of its management to continue operations in russia). However, there is an impression that this list is selective. For example, it does not include the Philip Morris tobacco corporation, perhaps because it is one of the main donors to the Ukrainian budget in terms of excise tax?

– Sooner or later, all companies that continue to operate in russia will be on the international register of war sponsors. Every week we add someone to this register. The order of priority depends on the number of appeals the NACP receives regarding the activities of a particular company and the potential 'blow' we can inflict on international companies.

The bigger and more recognizable a brand is, the higher the likelihood of it being included in the list.

Last week, the register included SLB (Schlumberger), an American oil company that works closely with gazprom, rosneft, lukoil and has expanded its business in russia. As for Philip Morris, it is somewhat small compared to the other companies we work with. Moreover, at the time of the interview, no one had contacted the NACP about its activities.

Finally, I will lift one more veil. The NACP is now dealing with domestic companies that have not stopped operating in russia yet. I cannot name them yet, we are still thinking about what to do with them.