On Hold for War

Olha Chernovol

Chercheure postdoctorale | Postdoctoral Fellow Faculté de droit, Section de droit civil | Faculty of Law, Civil Law Section, Université d’Ottawa | University of Ottawa Courriel: ochenov@uottawa.ca

Preface by Owen Lippert (PhD), Director

International IDEA in Stockholm this week welcomed the Chair of Ukraine’s Central Election Commission, Ole Didenko. He appears to be on a tour to gather support for the next election to be held when the war with Russia ends.

The importance of a clean future election rests in the West’s support for Ukraine having been touted as a war for democracy. A failed Ukrainian election would cast a pall on any future vigorous aid for countries facing foreign anti-democratic aggression.

A key element to a successful future election is the effective implementation of the 2015 campaign finance law and follow-on. Ukraine elections since 1991 had two major problems. 1) Voters did not know from where the parties were getting funding. 2) A lot of money was spent on elections in what seemed a “battle of the purses,” which marginalized reform-minded parties.

The campaign finance act is not well understood and a long way from being effectively implemented. For example, the state-derived benefits by incumbent political parties has yet to receive rigorous monitoring abd enforcement. The act did to level the field for opposition parties allowed for state subsidies to complement the rigorous source reporting and accounting regulations. Those reporting requirements are on hold for the duration of the war. However, the parties still continue to receive state support funds.

How the parties are using the funds is not yet subject to being reported. For this purpose, it may be necessary to create special mechanisms that would provide exclusive verification of political party’s funding by third parties and companies.

In any event, the parties really need to better understand and incorporate the existing requirements of the 2015 law. To help all is understand the new campaign finance laws, we are pleased to announce that Ms Olha Chernovol has submitted the blog that follows. She is a electoral lawyer from the Ukraine currently a Fellow at the law school of the University of Ottawa.

Welcome Olha and we hope to publish more from you!


Dr. Olha Chernovol

Ukrainian licensed attorney who works as a postdoctoral fellow at the University of Ottawa with Jennifer Quaid on her SSHRC-CRSH funded project exploring non-trial resolutions in anti-corruption matters.


Ukraine’s party system has undergone numerous changes in the more than 30-year period since its independence. The transparent mechanism of political party’s funding is a significant issue that has received continual attention as one of the attributes of ensuring democratic processes. Another reason for enhanced attention to this area is high corruption risks existence. For this purpose, the government established a mechanism for such funding with the participation of the National Agency on Corruption Prevention at all its stages.

Proverbially, Ukraine has a multi-party system with numerous political parties, in which not a single party often has a chance of gaining power alone, and parties must work with each other to form a coalition government. Since 2019, this system has undergone changes due to the majority in the parliament of the “Servant of the People” political party. Currently, according to official data from the Ministry of Justice in Ukraine, there are 377 political parties.

Provisions regulating the political party’sactivity in Ukraine, including methods and features of their funding, are reflected in the Election Code of Ukraine dated December 19, 2019 No. 396-IX, in the Law on Political Parties in Ukraine dated April 04, 2001 No. 2365-III , in the Law on Amendments to Certain Legislative Acts on Prevention and Combating Political Corruption dated October 8, 2015 No. 731-VIII and other legislative acts.

Having analyzed the relevant legislation, which defines the peculiarities of political party’sactivity in Ukraine, it should be noted that among their main characteristics are (Article 2 of the relevant Law on Political Parties):

– operate in the form of non-profit organizations;

– the party includes supporters of a certain nationwide program of social development, which aims to promote the formation and expression of the political will of citizens;

– participates in elections and other political events.

In addition to the main features of the political party’s registration and functioning, relevant legislation establishes a clear mechanism for their funding and reporting. Thus, two sections of the Law on Political Parties devoted to this issue are titled “Funds and other property of political parties” and “State financing of political parties”.

In particular, the Section “Funds and other property of political parties” establishes the following features of political party’s funding:


1) Political party’s funding is carried out in two forms – contributions to support parties and state funding of their statutory activity.

2) A clear list of ways in which the contribution can be made is determined – cash or other property, benefits, services, loans, intangible assets, any other benefits of an intangible or non-monetary nature, sponsorship by third parties.

3) A political party must have a bank account exclusively in the national currency of Ukraine;

4) If the monetary contribution is made by an individual, the method of banking transaction chosen by the person must ensure the identity of the individual.

5) Recognized list of clear funding types that are not considered monetary contributions to support a political party (for example, funds received at the expense of state funding, etc.).

6) Established restrictions on funding political parties (for example, state and local self-government bodies cannot fund the political party activity, as well as legal entities in which at least 10 percent of the authorized capital or voting rights directly or indirectly belong to the state or local self-government bodies). The example is only one instance of the possible listed restrictions. 

7) The total amount of contribution(s) for the political party’s support from Ukrainian citizen during one year may not exceed four hundred times of the minimum wage established on January 1.

8) The amount of the contribution in the form of works, goods or services is determined on the basis of market value of identical or similar works, goods and services according to the methodology developed and approved by the National Agency for the Prevention of Corruption in agreement with the central executive body.

9) Established procedure and features of political party’s financial reporting.

The political party’s funding by makingcontributions from individuals and sponsorshipis a debatable issue, carries high corruption risks and can be used as a way of influencing the policies promoted by different political parties.


In order to regulate this issue more carefully, the National Agency on Corruption Preventionissued the Order No. 225/20 dated May 28, 2020, which defined the terms used in the Law on Political Parties in Ukraine. Thus, according to the specified Order, sponsorship should be understood as a voluntary provision of material, financial, organizational and other support by an individual or legal entity in holding events or carrying out other activities in support of a political party. Third parties within the meaning of this Order are natural or legal persons who, on their own behalf, at their own expense, and regardless of the presence or absence of the political party’s consent, provide voluntary material, financial, organizational or other support to the political party.


The following section of the relevant Law on Political Parties establishes the specifics of statepolitical party’s funding, namely:


1) The types of activities that can be fundedwith state funds are established – the political party’s statutory activity (does not include activities not related to participation in elections and wages) and the political party’s expenses related to the funding of their pre-election campaigning.

2) The annual amount of state political party’sstatutory activity funding is one hundredth of the minimum wage established on January 1 multiplied by the total number of voters.

3) Established grounds and procedures for a political party to obtain the right for theirstate statutory activities funding (one of suchgrounds is the existence of a separate bank account for funds allocated from the state budget).

4) A political party has the right to reimburse the expenses related to the funding of its pre-election campaign (an important condition is the political party’s participationin regular or special parliamentary elections). At the same time the amount of reimbursement should not exceed the maximum size of the political party’selection fund.

5) The grounds for refusing to reimburse funds spent on its pre-election campaign are established by the Central Election Commission, the National Agency on Corruption Prevention, or a court.

6) The order of distribution of funds between political parties is determined.

7) The funds allocated from the state budget for funding the political party’s statutory activity are distributed by the National Agency for the Prevention of Corruption between political parties.

8) An amount of 10 percent of the annual amount of state political party’s statutory activity funding is distributed equally among political parties that have received the right to such financing.

9) An amount equal to 100 percent of the annual amount of state political party’sstatutory activity funding is distributed among political parties that have the right to receive such funding, in proportion to the number of valid voters and candidates from such political parties.

10) The right for the state political party’sstatutory activity funding shall be terminated at the first meeting of the Verkhovna Rada of Ukraine of new convocation unless such political parties have received this right as a result of the parliamentary election.

11) The National Agency on Corruption Prevention ensures the transfer of the quarterly funds allocated from the state budget to fund the political party’s statutory activity.

12) Political party, which has a right for state funding, receives 25 percent of the total amount of annual state funding at the beginning of each quarter.

13) If upon the end of the calendar year thefunds received from government were not used, the political party is obliged to transfer the remaining unused funds to the state budget.

14) State political party’s statutory activityfunding can be stopped based on the decision of the National Agency on Corruption Prevention.

15) The established grounds for termination of the state political party’s statutory activityfunding (one of them is the application of criminal law measures to a political party).

16) State control of funds appliance by political party is carried out by the Accounting Chamber and the National Agency on Corruption Prevention.

As we can see, the field of political party’s funding has a systemic nature, however with the detectable shortcomings, as many experts point to the imperfection of the state-established mechanism for providing such funding. Many problems exist at the stage of funding political parties through individual contributions and sponsorships, including financial reporting of political parties. Currently, one of the main factors affecting this sphere is the ongoing war due to the Russian Federation aggression against Ukraine, when a significant amount of the state budget is directed to ensuring the state’s defense capability.