Dr. Olha Chernovol has written before for Opposition International on the laws in the Ukraine that apply to political parties. Here is a new instalment dealing with financial contributions. When elections can resume in Ukraine they will have an effect given the intense international interests in the governance of the country.
Dr. Chernovol will be travelling to the Ukraine and will provide updates for her Canadian colleagues.
She is a Postdoctoral Fellow in the Droit civil and a section, Faculty of Law, University of Ottawa. Fellow at the uOttawa Human Rights Research and Education Centre
RESTRICTIONS ON POLITICAL PARTY CONTRIBUTIONS IN UKRAINE
An effective instrument of the state over political activities is its control over the funding of political parties. Ukrainian experts have examined in detail the process by which contributions are made in support of their political parties. They have focussed on issues of individual contributions and sponsorships, as well as the political parties’ financial reporting. Concerned lawmakers established a mechanism that allows the National Agency on Corruption Prevention to examine all stages of political party funding. Additionally, lawmakers introduced various prophylactic restrictions.
The Law on Political Parties dated April 5, 2001 No. 2365-III[1], contains provisions on the political party activitiesincluding a list of restrictions on contributions. Thus, according to Article 15 of the aforementioned law, the following entities are prohibited from making contributions to political parties:
– state authorities and local self-government bodies;
– state and communal enterprises, institutions, and organizations;
– legal entities which have at least 10 percent of the authorized capital or voting rights directly or indirectly belong to the state, local self-government bodies;
– legal entities whose ultimate beneficial owners are authorized and equal to perform the state or local self-government functions, civil servants, officials of local self-government, members of state collegial bodies, including those authorized to consider complaints about violations of legislation in the field of public procurement (Article 3 of the Law On Prevention of Corruption dated October 14, 2014 No. 1700-VII)[2].
– foreign states, foreign legal entities, legal entities which have at least 10 percent of the authorized capital or voting rights are directly or indirectly owned by non-residents, as well as legal entities whose ultimate beneficial owners are foreigners or stateless persons;
– unregistered public associations, charitable or religious organizations, as well as other political parties;
– natural persons who are not citizens of Ukraine (foreigners and stateless persons), as well as anonymous or pseudonymous persons;
– citizens of Ukraine who have not reached the age of eighteen or who have been recognized as incompetent in accordance with the procedure established by law;
– natural persons with whom a contract for the purchase of works, goods, or services to meet the needs of the state or territorial community has been concluded for a total amount exceeding fifty times the amount of the subsistence minimum for able-bodied persons, established on January 1st of the year in which the contribution is made;
– legal entities with whom a contract for the purchase of works, goods or services to meet the needs of the state or territorial community has been concluded for a total amount of more than one hundred times the amount of the subsistence minimum for able-bodied persons, established on January 1st of the year in which the contribution is made, – during the term of such an agreement and within one year after its termination;
– persons recognized as having significant economic and political weight in public life (oligarchs), in accordance with the Law On Prevention of Threats to National Security Related to Excessive Influence of Persons Who Have Significant Economic and Political Weight in Public Life (Oligarchs)”[3].
In addition to defining a clear list of restrictions, the lawmakers determined the procedural specifics for confirming the fact that a person does not fall under the restrictions. It means a person must confirm he/she is not subject to restrictions before making a contribution to support pollical party activity. The responsibility for non-compliance with such restrictions lies with the person contributing. Parties and their authorized persons are not legally responsible for violation of requirements if a person violated restrictions.
There are also restrictions on the total amount of contributions:
1) For individuals – it cannot exceed four hundred amounts of the minimum wage established on January 1st of the year in which contributions were made. Such restrictions apply cumulatively to all contributions throughout the year.
2) For legal entities – it cannot exceed eight hundred amounts of the minimum wage established on January 1st of the year in which contributions were made. Such restrictions apply cumulatively to all contributions throughout the year.
3) The amount of the contribution in the form of works, goods or services is determined based on the market value of identical or similar works, goods, and services in the relevant market according to the methodology developed and approved by the National Agency on Corruption Prevention in agreement with the central executive body.
4) If a natural or legal person exerts or can exert a decisive influence on the activities of one or more legal entities (in particular, is the ultimate beneficiary of a legal entity), the contributions of such a natural or legal entity and the legal entities controlled by it are considered the contribution of one person and are limited to the total amount of the contribution.
5) Furthermore, the political parties have a duty to refuse the corresponding contribution if the amount exceeds the limit established by law within fifteen working days from the day when the authorized person of the political party or its local organization became aware of it. Fulfillment of this duty is carried out based on a refusal contribution statement, signed by the head of the political party (local organization of the political party) within the bank payment statements. If it is impossible to return the contribution to the person’s bank account, the political party is obliged to transfer such contribution or its corresponding part to the state budget.
The National Agency on Corruption Prevention is mainly responsible for monitoring compliance of making contributions to support political party activity. It also checks compliance with the restrictions on the amounts of contributions provided during the year with a one-time check of whether such a person belongs to the list of prohibited donors.
[1] https://zakon.rada.gov.ua/laws/show/2365-14#Text