Describe the individual elements of the law prohibiting bribery of a domestic public official.
Bribery of domestic public officials is regulated by the Criminal Code of Ukraine (Chapter XVII) and the Law of Ukraine On Prevention of Corruption (often referred to as the Anti-Corruption Law). In 2014, by amending the Criminal Code of Ukraine, the criminal liability of private legal entities for corruption actions had been introduced in Ukraine.
The definition of public officials stipulated in the Criminal Code of Ukraine is quite broad and not sufficiently detailed. It encompasses any individual who exercises public managerial functions on behalf of the state. However, the Anti-Corruption Law provides a list of specific types of public officials, which consists not only of the state-level civil servant, but also local government officers, managers of state-owned companies, notaries, auditors, experts, receivers, arbiters of arbitration tribunals or other persons who perform similar public functions.
Failure by the company’s officers, who are responsible for the prevention of corruption, to implement respective measures which led to the commission of corrupt actions may result in the company becoming subject to criminal sanctions.
Under the Code of Administrative Offences of Ukraine, a failure by the responsible officers or employees of the company to take action on combating corruption in the case of discovery of corrupt actions entails the imposition of a fine of up to 250 statutory non-taxable minimum incomes or if the same offence has been committed again within the year following the first offence – up to 400 statutory non-taxable minimum incomes (article 172-9).
Scope of prohibitions
Does the law prohibit both the paying and receiving of a bribe?
Ukrainian legislation prohibits both the paying and receiving of a bribe. According to Ukrainian law, it is more correct to use the term ‘unlawful benefit’ rather than ‘bribe’. The term ‘unlawful benefit’ implies both active and passive bribery, which include promising, proposing, providing or receiving funds or other assets, benefits, privileges, services or non-material valuables with no legal grounds. This criminal offence (proposition, promise or granting of unlawful benefit to a public official) can be committed both by public officials (without distinction on domestic or foreign) and by private individuals who try to bribe or have bribed a public official. The unlawful benefit to employees of private legal entities is also punishable by law.
Definition of a domestic public official
How does your law define a domestic public official, and does that definition include employees of state-owned or state-controlled companies?
For the purposes of prosecution for bribery domestic public officials are defined as persons:
- for whom a special authority to perform such functions was provided by a respective state or local authority, central state executive body with a special authority, authorised body or official of an enterprise, institution or organisation, court of law; or
- those who permanently, temporarily or under special authority perform functions of representing state or local authorities or permanently or temporarily occupy positions in state or local bodies, state or municipal enterprises, institutions or organisations, related to managerial or business-administrative functions.
Gifts, travel and entertainment
Describe any restrictions on providing domestic officials with gifts, travel expenses, meals or entertainment. Do the restrictions apply to both the providing and the receiving of such benefits?
Ukrainian legislation provides for certain restrictions on receiving gifts by domestic officials, but not on providing them with gifts. For violation of such restrictions, the person who received such a gift may be brought to administrative liability. Ukrainian anti-corruption law does not provide for specific regulation for hospitality expenses (gifts, travel expenses, meals or entertainment) that may be lawfully offered or given both to domestic and foreign officials. Thus, the definition of the term ‘gift’ is broad and includes any kind of financial or other unlawful benefit provided in terms of corporate hospitality. Receiving any of the mentioned above gifts will be considered a violation of anticorruption law. However, there is no liability for providing gifts according to the current law of Ukraine; liability is provided only for officials who have received a gift. The Anti-Corruption Law defines limitations on the value of the allowed gifts that may be presented to public officials. It is prohibited for public officials to get any gifts except those corresponding with commonly accepted ideas of hospitality and within allowed limits. In particular, the Ukrainian law prohibits:
- receiving a gift, the value of which exceeds one subsistence minimum set on the day of acceptance of the gift; or
- receiving from one person (group of persons) during the year, the total value of which exceeds two subsistence minimums, established for a working person on 1 January of the year in which the gifts are accepted.
Exceptions for receiving gifts are the following cases:
- when a gift is given by сlose persons. These persons are: husband, wife, father, mother, stepfather, stepmother, son, daughter, stepson, stepdaughter, siblings, siblings, wife’s brother and sister (husband), nephew, niece, uncle, aunt, grandfather, grandmother, great-grandfather, great-grandmother, grandson, granddaughter, a great-grandson, great-granddaughter, son-in-law, daughter-in-law, father-in-law, mother-in-law, mother-in-law, guardian or trustee, a person who is under the guardianship or custody of the said official. However, if the value of a gift from a сlose person is more than five subsistence minimums, then such a gift must be reflected in the annual anti-corruption declaration. If the value of the gift exceeds 50 subsistence minimums, then the official must indicate its receipt by submission the notice of significant changes in property status to the National Agency on Prevention of Corruption; and
- when gifts are received as public discounts on goods, services, winnings, prizes, bonuses.
Have the domestic bribery laws been enforced with respect to facilitating or ‘grease’ payments?
Ukrainian anti-corruption laws do not envisage any difference between unlawful benefits and facilitating or ‘grease’ payments. Consequently, any unofficial payment made to derive unlawful advantage from Ukrainian officials will be considered as an unlawful benefit.
Public official participation in commercial activities
What are the restrictions on a domestic public official participating in commercial activities while in office?
Domestic public officials are prohibited from:
- engage in other paid activities (except for teaching, scientific and creative activities, medical practice, instructional and judicial practice in sports) or business activities, unless otherwise provided by the Constitution or laws of Ukraine; and
- be a member of the board, other executive or control bodies of the company, the supervisory board of the company or organisation aimed at getting profit (except when such officials perform the functions of the management of shares (shares, units) owned by the state or territorial (local) community, and represent the interests of state or territorial community in the board (supervisory board), the audit commission of the economic organisation).
However, the restrictions do not apply to deputies of the local councils (except for those who exercise their powers in the relevant council on a permanent basis), members of the High Council of Justice (except for those who work in the High Council of Justice on a permanent basis), as well as jurors.
Payments through intermediaries or third parties
In what circumstances do the laws prohibit payments through intermediaries or third parties to domestic public officials?
Bribery through intermediaries is equal to direct bribery and is also a violation. For instance, the Criminal Code provides that an undue advantage received by a third party related to a public official or company officer constitutes a criminal offence equal to the one where the undue advantage is given directly to a public official or company officer. The same principle applies to cases where an undue advantage is promised, offered or given to a public official or company officer, so that a third party could benefit from such officer or official acting or refraining from acting in the exercise of his or her official duties.
Individual and corporate liability
Can both individuals and companies be held liable for violating the domestic bribery rules?
Yes, individuals and companies can be held for violating the domestic bribery rules. Legal entities may be liable for corruption offences under the following conditions: (1) the company’s authorised representative commits a corruption offence on behalf or in the interests of such a company; or (2) the authorised person failed to take anti-corruption measures that led to the commission of a corruption offence. Importantly, application of the ‘measures of a criminal law nature’ to the company is not autonomous in the sense that such corporate liability is linked to that of the ‘authorised person’ who committed the offence. Put differently, such measures are secondary to individual liability and require ‘commission of the crime’, inter alia, by the authorised person on behalf of and in the interests of the legal entity.
Private commercial bribery
To what extent does your country’s domestic anti-bribery law also prohibit private commercial bribery?
Private commercial bribery is prohibited under the Criminal Code. These includes such offences:
- bribery of an official of a private legal entity; and
- abuse of official authority by an officer of a private law legal entity, irrespective of organisational legal form.
For private bribery, Ukrainian legislation also operates with the term ‘unlawful benefit’ rather than ‘bribery’. Thus, according to applicable rules, an unlawful benefit may include funds or other assets, benefits, privileges, services and non-material assets that are promised, proposed, provided or received with no legal grounds.
This crime (ie, proposition, promise, acceptance or provision of the unlawful benefit) can be committed both by public officials and by private individuals who try to corrupt or have corrupted an official, employee or contractor of a private company.
The Criminal Code of Ukraine establishes a penalty and confiscation of the unlawful benefit for this crime.
The Criminal Code of Ukraine (as amended) has provided for the criminal liability of private legal entities. For corrupt practices, the penalty is a fine. As a rule, the fine should be twice the benefit received by the entity. If no benefit has been received, or if its amount cannot be determined, then the fine should be determined by the judge.
What defences and exemptions are available to those accused of domestic bribery violations?
Ukrainian law does not provide for any statutory defences for bribery (such as an exemption for facilitation payments or the availability of a compliance programme as protection from the imposition of criminal punishment in cases of bribery of various officials or undue influence by its officials), or other corruption-related offences.
In criminal proceedings, the general defence would be to challenge the prosecution (which bears the burden of proof) to prove the constitutive elements of the relevant corruption-related offence.
Further, the Criminal Procedure Code of Ukraine provides for the possibility of:
- challenging a notice of suspicion issued by the prosecution before an investigative judge (if such a notice is served, an individual becomes a suspect and might be subject to relevant restrictive measures in a criminal proceeding);
- requesting that the court recognises evidence provided by the prosecution as improper or inadmissible; and
- filing an appeal and cassation appeal against the judgment rendered.
The Criminal Procedure Code also enables participants in the criminal proceeding to request its closure on a procedural basis (eg, as based on a reasonable term of pretrial investigation principle).
The fine imposed on legal entities could be less (within the range established) if a company proves that measures were taken by its ‘authorised person’ (eg, director, shareholder) to prevent a criminal offence from occurring.
What government agencies enforce the domestic bribery laws and regulations?
The National Agency on Corruption Prevention (NACP) is a central executive authority with a special status. Its main objective is to develop and implement the anti-corruption policy. The main functions of NACP include, inter alia, implementation of the Ukrainian anti-corruption strategy and evaluation of its performance, monitoring the effectiveness of corruption prevention measures, and corruption counteraction.
The National Anti-Corruption Bureau of Ukraine (NABU) is a central executive body with a special status that prevents, terminates, investigates and reveals corruption offences falling under its competence. Detectives of the NABU directly conduct pretrial investigations of allegations regarding corruption offences.
The Specialized Anti-Corruption Prosecutor’s Office (SAP) is an independent structural unit of the Prosecutor General’s Office of Ukraine that is primarily responsible for the supervision of NABU in the course of pretrial investigation, and representation of the state prosecution in respective court proceedings.
The State Bureau of Investigations (SBI) is a central executive authority aimed at preventing, terminating, revealing and investigating corruption offences placed under its jurisdiction, including crimes committed by officials of NABU and SAP.
The Asset Recovery and Management Agency (ARMA) is a special governmental body aimed at identification and tracing of property that may be seized in criminal proceedings, inter alia, for corruption offences.
The Higher Anti-Corruption Court (HACC) is a permanent higher specialist court acting as a court of first and appeal instance. The jurisdiction of the HACC extends to corruption offences only.
The Bureau of Economic Security (BES) is an investigative body authorised to initiate and carry out a pre-trial investigation, conduct investigative and covert actions, and carry out criminal intelligence operations. That is a full-fledged investigation with the detention of persons, searches, interrogations, reporting of suspicion, and the like. BES in order to organise its activities ensures, within the powers provided by the law, the implementation of measures to prevent corruption, violations of the law, official discipline and control over their implementation in the central office and territorial offices of the BES.
Patterns in enforcement
Describe any recent shifts in the patterns of enforcement of the domestic bribery rules.
In 2021, the National Agency on Corruption Prevention (NACP) has approved the Procedure for informing about significant changes in the property status of the officials and politicians (declaration subjects in Ukraine), which has entered into force on 1 December 2021.
Notifications of significant changes in property status must be submitted within 10 days of receipt of income, purchase of property or expenditure in excess of 50 subsistence lines for able-bodied person per month (US$4,553 as of 1 December 2021).
In addition, the NACP must be notified of significant changes in property not only if the one-time expenditure exceeds 50 subsistence lines for an able-bodied person per month, but also if the value of the property is worth more than 50 subsistence lines for an able-bodied person per month, will be paid in instalments, the amount of which does not exceed a certain threshold. In this case, the notice should be submitted after the transfer of ownership of such property.
Also, since 1 December 2021, the declaration form of a person authorised to perform the functions of the state or local self-government (hereinafter, the declaration form), as well as the procedure for filling in and submitting the declaration of the person authorised to perform state or local self-government functions (hereinafter, the procedure) have been renewed.
This procedure determines the process for filling in and submitting to the Unified State Register of declarations of persons authorised to perform state or local self-government functions, declarations of persons authorised to perform state or local self-government functions provided for in article 45 of the Law of Ukraine On Prevention of Corruption.
The number of sections of the declaration remained unchanged, namely: 18. Additional questions were included in the separate sections that detail certain information about the subject of the declaration and members of his or her family, objects of the declaration.
Prosecution of foreign companies
In what circumstances can foreign companies be prosecuted for domestic bribery?
Foreign legal entities are not expressly listed in the Criminal Code of Ukraine as subjects of corruption-related crimes and there is no example in practice of their being held criminally liable for such crimes in Ukraine.
What are the sanctions for individuals and companies that violate the domestic bribery rules?
The Anti-Corruption Law stipulates that for committing corruption offences or corruption-related offences a person shall be subject to criminal, administrative, civil and disciplinary liability.
In terms of the type of liability and penalties that may be implied, the difference between the term ‘corruption offence’ and ‘corruption-related offence’ is that the Criminal Code of Ukraine stipulates criminal liability for corruption offences. The Code of Administrative Offences of Ukraine establishes administrative liability for corruption-related offences.
Criminal and administrative liability of individuals includes enforcement of one or several sanctions, such as a fine, confiscation, community service, public works, corrective works, arrest, restraint of liberty, or imprisonment. As additional punishment, forfeiture of property, derivation of the right to occupy certain positions or engage in certain activities also apply (optionally or mandatory) as well as a fine. All fines are set in relation to the minimum subsistence level for working adult individuals, a figure that is subject to regular review.
The following criminal sanctions may be applied to the individuals bribing the officials:
- restriction of liberty; and
- confiscation of property.
As to criminal penalties appliable to the officials accepting illegal benefits, they are more severe and include:
- derivation of the right to occupy certain positions or engage in certain activities;
- imprisonment; and
- confiscation of property.
As of 2014, private companies also became a subject of criminal liability after amendments to the Criminal Code of Ukraine came into force. For corruption offences, the penalty is a fine. Private companies might be punished for certain offences (including bribery of various officials or undue influence) committed by their officials or representatives, or for their failure to take measures to prevent the corruption that resulted in the commitment of the same offences by its employees (not officials). In the above instances, the penalty is a fine. As a rule, the fine should be twice the undue advantage unlawfully received by such an entity. If no benefit has been received or if its amount cannot be determined, the fine should be determined by the judge.
Generally, penalties depend on the nature of the criminal offence (eg, receipt of bribe, unjust enrichment, improper influence or abuse of office), the type of official who committed the offence or to whom the improper advantage was offered (eg, private or public; rank of public official), the amount to which the criminal offence relates (eg, significant, especially large scale) and other circumstances (eg, if the offence was committed repeatedly, or as part of a conspiracy).
However, Ukrainian legislation does not establish disciplinary liability for corruption-related offence. At the same time, certain legislative acts stipulate the obligations for complying with the Anti-Corruption Law. Also, special legislation defines certain categories of officials to whom disciplinary action for corruption practices cannot be applied at all. Disciplinary measures cannot be applied to, inter alia: the president; chairman of the parliament and his or her deputies; members of the government and deputy ministers of the government; members of the parliament; members of local councils; village or city mayors. For some officials, Ukrainian law provides for special procedures for the application of disciplinary measures, among which: judges; military; prosecutors; government officials; other categories of officials whose responsibilities are established by special laws.
Recent decisions and investigations
Identify and summarise recent landmark decisions and investigations involving domestic bribery laws, including any investigations or decisions involving foreign companies.
The number of active anti-corruption investigations currently being carried out is tremendous – hundreds of new investigations have made a resonance over the last years since the launch of the Higher Anti-Corruption Court in 2018. But there have been only a few convictions in high-level corruption cases so far.
As Ukrainian anti-corruption legislation has no extraterritorial application, as well as the absence of cases related to the violation of Ukrainian anti-corruption laws by foreign companies, this question is not applicable.