The Law of Ukraine “On Political Parties in Ukraine” imposes an obligation on political parties to submit quarterly reports on property, income, expenses and liabilities of a financial nature (hereinafter – financial reports) to the National Agency for the Prevention of Corruption (NAPC). The reports are submitted no later than the 40-th day after the end of the reporting quarter and are subject to publication, which ensures a high level of transparency in the financing of political parties and, consequently, public confidence in both the parties themselves and the government as a whole. The obligation of regular reporting was introduced in 2015 to comply with international standards in the field of financing political parties and Ukraine’s external obligations.
However, on March 30, 2020, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Aimed at Providing Additional Social and Economic Guarantees in Connection with the Spread of Coronavirus (COVID-19)”, which exempted parties from to submit financial reports to the NAPC before the end of measures to prevent the occurrence and spread of coronavirus disease, provided by the quarantine established by the Cabinet of Ministers of Ukraine (CMU).
At the time of the adoption of this law, there were objective reasons for such an exception, which made it difficult for political parties to submit financial reports on time, but since then they have lost their relevance. First, political parties have the opportunity to submit financial reports for the respective quarters of 2020 both by visiting the NAPC in person and by mail. Second, in May 2021, the NAPC launched the Unified State Register of Political Parties’ Reporting on Property, Income, Expenditures and Financial Obligations POLITDATA. Therefore, the financial statements for 2021 parties can submit only in electronic form, which eliminates any risks associated with the spread of coronavirus disease.
The provision on deferral of financial statements is still in force, making Ukraine the only country in Europe to suspend requirements parties to file financial statements due to the spread of COVID-19.
Many parties exercised their right not to submit financial reports: for example, in the second quarter of 2021, only 28 out of 380 political parties (7.4%) submitted financial reports. At the same time, none of the parties represented in parliament submitted reports for 2021 or even for the fourth quarter of 2020, which coincided with the holding of regular local elections. The latter fact is particularly worrying, as parliamentary parties receive funds from the state budget to finance their statutory activities, but do not report on their use. Under such conditions, neither the NAPC as a controlling body nor the public can find out how parliamentary parties use the state funds provided to them. The ability of parties not to report runs counter to the public interest in accessing truthful information about party funding and expenditures, which cannot be ignored even in the face of protracted quarantine restrictions.
This practice is contrary to international standards, according to which regular reporting by parties is a key condition for them to receive public funding. In particular, the Venice Commission of the Council of Europe and the Office for Democratic Institutions and Human Rights of the Organization for Security and Cooperation in Europe emphasize this in their documents. In addition, regular party reporting is an integral part of political finance reform, which has been one of the main preconditions for visa liberalization between Ukraine and the European Union (EU).
In view of the above, we call on:
The Verkhovna Rada of Ukraine – delete Article 5 of Section VI “Final Provisions” of the Law of Ukraine “On Political Parties in Ukraine” on the postponement of quarterly reports for political parties for the quarantine period, thus restoring the obligation of political parties to report on property, income, expenses and financial liabilities on a quarterly basis. Given the number of party reports not submitted in recent quarters and the corresponding burden on the NAPC after the resumption of the previous version of Article 17 of the Law, it is advisable to provide a one-time rational increase in the deadline for submission of expected reports and the NAPC.
Political parties – submit reports for the respective quarters of 2020 and 2021 in accordance with the requirements of the Law of Ukraine “On Political Parties in Ukraine”.