Yes, there is corruption in Ukraine. In 1991, Ukraine gained its independence. The country however was not built from scratch, but formed a new state policy and put all spheres on the rails, while trying to cope with the problems inherited from the period of Soviet occupation.
One of such serious problems that Ukrainian society is still solving is corruption. Since the 1990s, Ukraine was always included in the list of countries with a high level of corruption, but the situation changed significantly in 2014, after the Revolution of Dignity. In fact, people’s frustration with the corruption in the governmental structures was actually one of the reasons for the revolution. Вuring Viktor Yanukovych's presidency, corruption flourished, and his government played, unfortunately, a large and sad role in this process. A large part of the society demonstrated its absolute intolerance to corruption in the state - and active anti-corruption activities began. But how successful are they? What are the said success indicators? What about fresh corruption scandals? And is Ukraine safe for investment? Let's understand in the article.
Authors: Olena Pozniakova, Iryna Hadetska
Photо: A protester near the Constitutional Court in Kyiv due to the decision to abolish criminal liability for false declarations for officials and people's deputies, 2020 / UNIAN, Viacheslav Ratynsky
What is the general situation with corruption in Ukraine?
Corruption in Ukraine is still at a high level compared to other developed countries. But the active involvement of Ukrainian society and foreign partners in solving the problem is increasing every year and is not abating even now, during full-scale Russian aggression.
How do we know that the problem of corruption in Ukraine is being solved?
Above all, from independent data. One of the main indicators that helps to assess the level and effectiveness of anti-corruption measures in the country is the Corruption Perceptions Index (CPI), compiled by the global anti-corruption organization Transparency International. Simply put, the CPI collects survey data and expert judgments from entrepreneurs, academics and analysts to assess the risks of how corrupt the public (government) sector is in a country.
Phоtо: The 2022 Corruption Perceptions Index map/ Transparency International
Over the past 9 years, Ukraine has steadily improved its position in the CPI rating. So, in 2013 Ukraine was in the 144th place with 25 points out of a possible 100, and in 2022 it was placed at the 116th place with 33 points.
"In the CPI rating, Ukraine has added 8 points over the past 9 years, and that's a lot. According to the methodology, if the country gained more than 4 points, this is a significant change. And currently, Ukraine is among the top 15 countries in which there are strong positive drivers of the fight against corruption," commented Andrii Borovyk, executive director of Transparency International Ukraine.
Where does corruption come from in Ukraine?
It’s safe to say that corruption is a result of the Soviet occupation. After the collapse of the USSR, in Ukraine, as in most countries of the ex-unions, political power was taken over mainly by former high-ranking officials and communists. In the Soviet Union, corruption and nepotism were the norm, and therefore officials who were used to such a model of existence and management worked in the same way: including political forces competing with oligarchs, bureaucracy, important issues being solved “off the record”, raiding, prestigious positions being given to "the right people” or payed off with bribes. Both during the Soviet regime and in the 1990s, corruption formed the basis of relations between society and the government.
Thus, problems and tension accumulated in the state. In particular, the young increasingly expressed their opposition to corruption, formed actions, movements and organizations in order for Ukraine to change and develop on the basis of law and democratic values. Ukrainians sought to improve the standard of living, realizing that corruption is one of the factors that makes positive changes impossible. Thus, in 2013, Ukrainian society supported the course towards Europe announced by the authorities, and the EU, in turn, supported the fight against corruption in Ukraine. But just one step before signing the agreement on European integration, then pro-Russian government of Viktor Yanukovych suddenly canceled the decision which let the Revolution of Dignity.
Photo: Participants of the Revolution of Dignity on Independence Square in Kyiv / Vyacheslav Ratynskyi
When did Ukrainian society start fighting corruption?
The most active and visible fight against corruption began with the overthrow of the Yanukovych regime in the early 2014. Then, quite quickly, the newly re-elected Ukrainian parliament adopted a comprehensive anti-corruption package of laws. These laws, in particular, created a new system of anti-corruption bodies, a register of corrupt officials, and, in addition, introduced mechanisms for social control of state managers and lustration of compromised officials, which contributed to the Yanukovych regime. Information on public procurement, the Soviet archives of the KGB became open to the public, and officials also undertook to publish data on income and property.
At the same time, society also took a big step: targeted public organizations were created, whole groups of journalists investigated cases of corruption, any known cases of corruption became media-known and resonant.
Who and how fights corruption in Ukraine?
The fight against corruption works only with an integrated approach - for the result to be noticeable, society, businesses, state bodies, journalists, activists, experts and international organizations must cooperate.
"The fight against corruption consists of several issues: in particular, prevention and punishment. The most effective warning is when the system is built in such a way that no one, has the opportunity to commit corruption offenses”, says Andrii Borovyk, executive director of the NGO "Transparency International Ukraine".
What does the Ukrainian government do with corruption?
After all, the system of anti-corruption bodies in Ukraine was built after 2014 according to the following principle: first of all, we prevent corruption.
So, for example, one of the central anti-corruption bodies, the National Agency for the Prevention of Corruption, checks the declarations of officials, financing of political parties, keeps registers of corrupt persons, etc. In 2022, the agency carried out more than 130 checks of declarations and as a result, discovered data on hidden assets with a total value of UAH 658.4 million.
When the National Agency for the Prevention of Corruption detects a violation, the case is transferred to another supporting anti-corruption body - the National Anti-Corruption Bureau of Ukraine. It investigates the most socially dangerous and high-profile corruption crimes. So, for example, in June of this year detectives and prosecutors of the specialized anti-corruption prosecutor's office managed to compensate the state for damages in the amount of UAH 32 million in the case of embezzlement by the Ministry of Ecology and Natural Resources back in 2012.
In total, in 2022 National Agency for the Prevention of Corruption launched more than 450 investigations, as a result of which 54 indictments were issued (including against people's deputies, civil servants, employees of the prosecutor's office, courts, tax and fiscal services).
There’s also Specialized Anti-Corruption Prosecutor's Office which controls compliance with laws during the operational investigative activities of the National Agency for the Prevention of Corruption pre-trial investigation.
Among the anti-corruption bodies is the State Bureau of Investigation, a law enforcement agency that investigates criminal proceedings involving law enforcement officers, judges, and top officials. In 2022, the buerau launched investigations into more than 15,000 criminal proceedings and detained more than 650 corrupt officials - law enforcement officers, tax officials, and customs officials. More than half of them have already been brought to justice.
Also, thanks to the anti-corruption reform, a specialized High Anti-Corruption Court was established in Ukraine, which became operational in 2019. In 2022, the court considered 49 cases, in 37 it issued guilty verdicts.
It should be emphasized that before 2014 and the anti-corruption reforms, there were almost no cases of prosecution of corrupt officials among the political elite and high-ranking officials in Ukraine.
What do Ukrainian citizens do with corruption?
Society in Ukraine is strong and active. And since 2014, after the Revolution of Dignity and as a result of Russia's aggression, the population has realized the importance of an active position, actions and unification for the sake of countering problems and the aggressor.
An effective fight against corruption consists of prevention, punishment (the state is responsible for these two components), as well as the activity of the society, which is historically powerful in Ukraine. Thus, under constant public pressure, the state apparatus is forced to react and becomes more and more interested in solving the problem of corruption, because at least it wants to satisfy the interests of its voters", summarizes Andrii Borovyk, executive director of the NGO "Transparency International Ukraine".
According to the National Agency for the Prevention of Corruption report, in Ukraine, the share of the population that has a negative attitude towards corruption is steadily increasing every year - in 2021 it was 49.4%, in 2022 it was 57.4%. Currently, 2/3 of Ukrainians (64.2%) consider corruption to be a very serious problem, second only to Russia's aggression.
Citizens' awareness has increased significantly due to the efforts of the state and international partners, as well as actions of the most engaged part of the population - activists and journalists. In 2014, several projects and television programs were launched that exposed the facts of corruption: such as "Slidstvo.Info", "Schemy", “Bihus.Info” and others. Currently, there are dozens of such initiatives and hundreds of revealing journalistic investigations.
NGO “Center for Combating Corruption”, created in 2012, became one of the main lobbyists for anti-corruption legislation and the creation of anti-corruption bodies in 2014. For 11 years, the Centre has been exposing corruption schemes of Ukrainian officials and ensuring that corrupt officials are brought to justice. For example, thanks to the their timely reaction and publicity, in July of 2023, the Verkhovna Rada withdrew amendments to the Criminal Code, which could potentially lead to the release of corrupt officials from liability and the cancellation of some of the existing sentences in corruption cases.
Also, in order to ensure the transparency of the country's reconstruction processes and the targeted use of infections, Ukrainian and international public organizations formed the RISE Ukraine coalition in July 2022. Its main task is to make public access to reconstruction budgets and financial reporting on the used reconstruction funds. The coalition initiated the creation of the DREAM state digital system which collects, organizes and publishes open data across all stages of reconstruction projects in real time to minimize the possibility of embezzlement and corruption schemes.
Is it safe to invest in business in Ukraine now?
Currently, according to a study by the European Business Association, the Investment Attractiveness Index of Ukraine in the second half of 2022 is 2.48 points out of 5 possible. For comparison, in the first half of 2022, the Index was 2.17 points.
According to representatives of foreign and Ukrainian business, the list of negative factors for the investment climate in Ukraine was headed by Russia's full-scale military aggression against Ukraine, in second place by Russian attacks on the Ukrainian energy system, and in third place by corruption. Despite the war, 99% of surveyed companies plan to continue working on the Ukrainian market in 2023, and 63% are going to invest in Ukraine even in wartime.
In general, Ukraine as a country for investment is an attractive desination because here investors can earn faster. But the risks for investors are also higher, due to corruption, bureaucracy, and above all due to Russia's military aggression. It’s assumed that the period of post-war reconstruction in Ukraine will be promising for investors.
What do investors who decide to invest/do business in Ukraine need to know?
"First, potential investors should know that anti-corruption bodies are quite independent - you can and should contact them, they work and are effective. Secondly, business and investors should clearly express their position - communicate that they do not agree to participate in corruption schemes and pay bribes. Thirdly, remember that as investors, they also have the right to vote, influence and can speak about the shortcomings of the system - the state will listen”, says the executive director of NGO "Transparency International Ukraine," Andrii Borovyk.
Potential investors should know that for the sake of transparency and investment attractiveness most registers are open in Ukraine, and for convenience, they are all collected on this Open Data Portal. Here you can find registers that highlight information related to corruption. This is, in particular, the register of persons who have committed corruption offenses; register of declarations of employees of state bodies and local self-government bodies; register of reports of political parties, etc. In total, more than 72,000 datasets are available on the Open Data Portal. You can also find the necessary court decisions, information on public procurement or budgets.
In Ukraine, there is also a Prozorro website, where you can find information about every product and service that is purchased with public funds - that is, with citizens' taxes. If a suspicious purchase is detected, you can file a complaint on the Dozorro monitoring portal.
In addition, Ukranian digital governmental platfmorm DIIA, widely known abroad, allow you to register a business or receive documents and certificates simply online, which makes corruption schemes impossible. In general, digitalization is a powerful factor in overcoming corruption. It ensures transparency and accountability, minimizes the human factor.
What are Ukraine's prospects when it comes to corruption?
The stability and success of the fight against corruption in Ukraine depends on the joint work of society, business and the state, and currently each of the components is actively working in the direction of fighting corruption.
The most noticeable is the progress of the Ukrainian public in the fight against corruption, even despite Russia's aggressive war. Ukraine was marked by a really noticeable increase, and the system of anti-corruption bodies showed its effectiveness. In its report, GRECO indicated that in a year of full-scale war, Ukraine completed more reforms than in several previous years. Of course, Ukraine still has a lot of work ahead of it and the path to integration with the EU, which is possible only with an effective fight against corruption.
Is it possible to overcome corruption in Ukraine? It is impossible to completely eradicate corruption in any country, but it is realistic to reduce its level to the level that does not systematically affect state, social and partnership processes. Currently, Ukraine has a clearly defined strategy for the coming years, fairly independent anti-corruption bodies and a conscious society.
The next steps are the improvement of anti-corruption legislation and state control, reforms, increased transparency in relations between the state and the public, implementation of 16 more GRECO recommendations on fighting corruption. A few years may be enough for Ukraine to reach the level of European countries in the fight against corruption. Here, success depends entirely on the efforts of society and the state.