Supporting transparency or fighting it? New law on assets declarations for NGOs raises scandal in Ukraine

When the Euromaidan revolution in Ukraine won and the tyrant President Viktor Yanukovych fled the country in 2014, society hard work ahead – fighting the old corrupt oligarchic system and building a new Ukraine. Now this anti-corruption activity might endanger its initiators. Some promising steps were made in the country to eliminate corruption and promote new transparent rules. Among them were introducing the ProZorro e-procurement system exposing state purchases and e-declarations for the state officials, and creating new anti-corruption institutions. Ukraine’s old political establishment fought against new anti-corruption measures to the last breath. The launch of the e-declaration system was jeopardized and undermined countless times. The adoption of new rules became possible because of the persistence of society – particularly, civic activists and NGOs. Now, these drivers of progress might face trouble themselves. The reason for that is a bill requiring anti-corruption NGOs to submit e-declarations aside government officials.

Read also: Behind the scenes of civic society's battle with corruption in Ukraine

The key points of the bill

On March 27, President Petro Poroshenko signed the bill on Amendments to the Law of Ukraine on Prevention of Corruption. According to it, anti-corruption NGOs and their contractors, candidates for the positions of deputies of the Parliament of local councils, or the president, and civil activists who fight corruption should submit e-declarations on their property and income. The e-declarations are similar to those which the state officials submit, and those failing to submit them would face criminal responsibility. All the above-mentioned persons will be obliged to declare their property in 2018.

Introduced under a shield

The bill initiated from an initiative to exempt soldiers fighting in Eastern Ukraine from the declaration process, releasing the soldiers and sergeants of the Armed Forces of Ukraine and cadets of the military schools from the obligation. Junior officers were allowed to do it when they come back to the bases or finished their service. Senior officers and military personnel who are at the front positions are still required to submit e-declarations. The bill had to be passed urgently before the first stage of the e-declarations ended on 31 March, so that soldiers on the front line would not end up violating the law.

The dubious provisions

However, instead of being reduced, the list of people who should submit declarations was broadened. The main initiator of the relevant amendments is Tetiana Chornovol, an MP from the Narodnyi Front party, who claimed that the activities of anti-corruption NGOs carry corruption risks. However, the activists consider the step as a threat for the anti-corruption measures themselves. One of the most ambiguous provisions of the law is one which obliges the individuals who take part or are involved in measures related to the prevention or countermeasures against corruption to submit e-declarations. The formulation leaves a lot of space for interpretations. Should a person who just attended an anti-corruption protest declare his property? Should those who support anti-corruption NGOs in other ways? The law does not define what constitutes an anti-corruption measure. Another dubious provision requires not only NGOs themselves to submit the e-declarations, but the entrepreneurs providing services to them.

“For example, from the money from grants we pay rent for our office, the Internet, translations, and other basic services. Now our contractors will have to also submit declarations and they will be responsible for not providing them or for telling lies,” says Dariya Kaleniuk the CEO of the Anti Corruption Action Center.

Thus, the number of people who will be required to declare their assets expands, which gives additional opportunities to badger and pressure anti-corruption NGOs.

"I think this will lead to a situation when these civil activists will be under thorough investigation of the National Agency for Prevention of Corruption. Criminal proceedings will be opened against them. The measures which have to be applied against President, MPs and ministers who can not explain their assets or hide part of them will be applied to them [to the activists]," said Yehor Sobolev, an MP from the Samopomich party.

Independent media under threat

The ambiguous law will also affect the activities of a number of independent media in Ukraine. The situation with media in the country is complicated, as an overwhelming majority of big Ukrainian media belong to oligarchs.

Read also: Ukraine makes progress in media freedom, but oligarchs still run the show

To be truly independent one should have money. The attempts to establish independent journalism in Ukraine are often supported by international donors, and many Ukrainian medias have the status of an NGO and function mostly thanks to donations and international grants. The medias include outlets which you probably have heard of. First of all, Euromaidan Press is a media registered as an NGO. In 2013, the journalists of the English-language newspaper Kyiv Post launched an affiliated nonprofit organization, the Media Development Foundation, to promote investigative journalism, student exchanges, and training programs. Last year the NGO initiated a project about Ukrainian oligarchs. One of the first people in the list was the most powerful oligarch in Ukraine, the President Petro Poroshenko. Another Ukrainian media which you probably know, Hromadske, also functions thanks to grants from western organizations and donations of its readers. Last year, the media published an investigation conducted together with the OCCR specialists stating that Ukraine's president has an offshore company. The quality of the investigation can be, and was, disputed. But the that begs being asked is: if similar investigations are considered an anti-corruption measure and its participants are required to submit e-declarations, would the president, his surrounding, or any other person targeted by an investigation try to pressure the journalists using this new legislation? Among other NGOs working as medias there is Internews Ukraine, Ukrainian Crisis Media Center, Detektor Media, texty.org.ua, Hromadske Radio, the Center for Investigative Journalism and many others. Will these media be de facto punished for their anti-corruption investigations or even interviews and articles?

International community condemns

President Poroshenko has already been criticized by the international community for signing the dubious law. Even before the legislation was passed, the initiative on introducing the amendments was not approved by the EU. “Ukraine has achieved success with e-declarations! However, the bill #5318 contradicts this achievement, anti-corruption NGOs state ≠ officials,” tweeted the EU delegation to UA.

#Україна досягла успіху з e-деклараціями! Але законопроект №5318 суперечить цьому досягненню, антикорупційні НГО ≠ чиновники.

— EU in Ukraine (@EUDelegationUA) November 3, 2016

The recommendations of the council of Europe on the legal status of non-governmental organizations in Europe states that:

• All reporting should be subject to a duty to respect the rights of donors, beneficiaries, and staff, as well as the right to protect legitimate business confidentiality.
• No external intervention in the running of NGOs should take place unless a serious breach of the legal requirements applicable to NGOs has been established or is reasonably believed to be imminent.
• The officers, directors, and staff of an NGO with legal personality should not be personally liable for its debts, liabilities and obligations.

The new legislation has also been criticized by Transparency International:

“These new provisions must be abolished immediately. Lawmakers are trying to intimidate civil society and in particular anti-corruption activists. If these amendments come into force, it will be clear that Ukrainian top officials are not serious about fighting corruption. It will show that they have chosen to side with those who want to quash the anti-corruption movement,” stated José Ugaz, Chair of Transparency International.

And by the Freedom House:

“Ukraine’s passage of intrusive reporting requirements targeting anti-corruption activists and NGOs undermines their work, which is essential for restoring public trust in the government," said Marc Behrendt, director of Eurasia programs at Freedom House. “The new requirements protect politicians unhappy with public scrutiny and allow them to retaliate against those involved in anti-corruption investigations. Moreover, the law appears to violate standards established by the Council of Europe, which prohibit arbitrary and discriminatory intrusion into independent civil society activity.”

However, the bill has been supported in Ukraine not only by the politicians who initiated it.

Public opinion and some arguments in favor

In Ukraine, the new legislation is served under the sauce of high standards which fighters against corruption should meet to be allowed to fight it. The impoverished society was irritated and angered by the staggering wealth of state officials that the first round of e-declarations revealed. Now any potentially rich person may fall victim to public anger and suspicion.

Read more: Ukraine’s elite-exposing e-declarations, explained | #UAreforms

Moreover, often there is no distinction between the declaration of assets and any other kinds of reports in the minds of ordinary Ukrainians. Many responded angrily: “Let them report on their wealth like all the state officials do,” despite there being an important difference between the two - state officials are funded by the money of taxpayers, and fall to corruption, while NGOs do not, and cannot be corrupt by definition. Mykhailo Zhernakov, the leading expert on judiciary of the Reanimation Package of Reforms didn’t mince words - according to him, this law would “basically renew authoritarianism in Ukraine and turn Ukraine into a police state once again.” Zhernakov notes that most of the members of anti-corruption NGOs already provide declarations as members of public councils at government organs, according to the requirements they themselves prescribed. However, now the activists may face criminal liability for the same declarations, which the “law enforcements” and courts dependent on politicians will be happy to apply to activists and investigative journalists. He also admits that the new legislation probably will not tell anything new to society:

“Grant projects have very high standards of accountability, and most reports are available on the websites of NGOs and international donors. The law does not impose any additional obligations on disclosure of origin nor the means, neither their use.”

The supporters of the legislation stick to the line that today’s fighters against corruption are future politicians so that they should be transparent from the very beginning of this path. However, these arguments befit the ideal world. In reality, the legislation will likely result in attacks on those who fight corruption in Ukraine. The bill has already been compared to Russia’s recently passed legislation on “foreign agents” which placed restrictions on organizations which work in Russia with the support of international donors. Some experts fear that the bill is a symbol of the end of the Euromaidan era when the revolution from the streets entered Parliament in 2014, where so far it is losing.