The adoption of the 2015 Political Finance Reform Law has proven to be a significant step towards effective regulation of the role of money in Ukrainian politics. The Law was the result of concerted efforts by members of Ukraine’s parliament, civil society organizations, international organizations and experts.

1. STATEMENT
of the participants of the Forum “Our money in politics: Version 3.0”
The adoption of the 2015 Political Finance Reform Law has proven to be a significant step towards
effective regulation of the role of money in Ukrainian politics. The Law was the result of concerted efforts
by members of Ukraine’s parliament, civil society organizations, international organizations and experts.
The Law introduced public funding of political parties, imposed restrictions on private donations to
political parties and candidates in elections, required parties to file detailed quarterly financial reports to
the National Agency for Prevention of Corruption (NAPC), and harmonized campaign finance rules in
nationwide elections with political party finance rules. Criminal and administrative liability was instituted
for violating the new rules governing political finance.
The 2015 Political Finance Reform Law largely received positive feedback from international institutions,
including the Group of States against Corruption (GRECO), the Venice Commission and the OSCE Office
for Democratic Institutions and Human Rights (ODIHR).
While Ukraine’s current political finance legislation is now one of the most progressive in Europe, a range
of provisions need further improvement, including:
1) The rules governing campaign finance in local elections are not harmonized with those governing
national elections or the funding of political parties;
2) The mandates of oversight bodies (including the NAPC, the Accounting Chamber and election
management bodies) are not clearly delineated;
3) Sanctions for political finance violations are not proportionate, effective and dissuasive;
4) Annual external financial audits (as required by the law) are too expensive for new and smaller
parties;
5) The lack of instruments to limit campaign spending by parties and candidates may lead to
increased spending and dependence on wealthy donors;
6) The legislation does not clarify the expenses that political parties can cover with annual public
funding; Ongoing attempts to define parties as “budget recipients” in the light of Budget Code
may result in active state interference in the use of public funds by political parties, as well as in
the parties’ statutory activities in general. This would not be in line with international standards
and best practices in this area;

2. 7) The short period allotted for the NAPC review/verify political party financial reports, combined
with the limited mandate and resources of the NAPC, makes it very difficult for the institution to
fulfill its mandate;
8) The short deadlines for imposing administrative sanctions according to the legislation (fines can
be imposed at most three months after offences are detected), and the lack of NAPC power to
access personal data of offenders, leads to delays in documenting violations by the NAPC, and
dismissal of cases by courts;
9) The electronic platform being developed by the NAPC will, if well developed and tested, can
facilitate timely and effective reporting, review and publication of political finance data, but it will
not in itself solve all challenges.
The participants of the Forum have reached a consensus on the steps to be taken for further
implementation of political finance reform in Ukraine:
The Verkhovna Rada of Ukraine should:
1) Consider amendments to the Local Election Law aimed at harmonizing the rules governing
campaign finance in local elections with the rules governing party finance and campaign finance
in the presidential and parliamentary elections;
2) Clearly delineate powers of the state bodies in charge of supervising political finance (mainly, the
powers of the NAPC, respective election commissions, and the Accounting Chamber);
3) Define political party statutory activities, and specify which activities can or cannot be funded by
the state budget funds; consider amendments to the Budget Code which would make it clear that
parties cannot be considered “budget recipients” in light of that Code and are therefore exempt
from requirements that apply to budget recipients (including having their annual budgets
approved by the NAPC and payment orders reviewed by the State Treasury Service);
4) Consider the possibility of setting up mechanisms aimed to reduce the costs of election
campaigns; for instance, by restricting political advertising during elections;
5) Revise legal provisions for political finance reporting to be compatible with the electronic platform
currently being developed by the NAPC;
6) Establish effective, proportionate and dissuasive sanctions for political finance violations, expand
the deadlines for imposing sanctions for those violations, and provide the NAPC with additional
powers needed to document the detected violations, including the right to access personal data
of potential offenders in state registers if needed;
7) Address recommendations for improvement of the Political Finance Reform Law from
international institutions such as GRECO, OSCE/ODIHR, and the Venice Commission.
The National Agency for the Prevention of Corruption should:
1) Ensure that dealing with minor political finance violations (such as technical errors in the reports)
does not distract the NAPC from focusing on essential activities such as positive interaction with
parties and candidates to encourage compliance with political finance regulations, and
identification of serious violations (illegal donations, hidden funding of parties and candidates);
2) Consider changes in its internal structure, internal communication and interactions between units
involved in political finance oversight to increase effectiveness in identifying violations, analyzing

3. reports, and providing up-to-date information on key political finance issues to parties, civil
society organizations, and other stakeholders;
3) Continue ongoing efforts aimed at strengthening capacity of employees of the political finance
oversight body, including their ability to effectively identify and document violations of political
finance rules;
4) Introduce a new and consolidated template for party quarterly financial report, that would allow
effective systemizing of information in the reports, and facilitate its analysis by the NAPC as well
as relevant civil society organizations and journalists;
5) Following consultations with stakeholders, adopt a methodology for evaluating donations in-kind,
given to political parties, taking into account best practices in the relevant field.
6) Initiate early preparations for campaign finance oversight for the next parliamentary and
presidential elections, in partnership with other institutions, including the Central Election
Commission;
7) Ensure that the electronic platform for financial reporting, review and publication is consulted on,
finalized and tested well ahead of the next parliamentary and presidential elections;
Courts should:
1) Establish a unified approach to administrative cases of political finance violations, and to imposing
sanctions for those violations;
2) Following the results of court practice review (related to consideration of cases on political finance
violations), specify the criteria for imposing fines in similar cases of violations, as well as other
sanctions, such as warnings, which should not be issued in cases of serious violations.
Civil society organizations should:
1) Reach a consensus on the key areas of and direction for further political finance reform in Ukraine,
as well as continue advocacy efforts in this regard;
2) Continue efforts aimed to increase citizen awareness of benefits and significance of political
finance reform and implementation as a means of counteracting political corruption;
3) Continue to monitor political finance by scrutinizing party and candidate financial reports and
potential violations, as well as the work of the Verkhovna Rada, oversight institutions and the
judiciary.
This statement was prepared as the result of the national forum, “Our Money in Politics: Version 3.0”, held on October 19, 2017
and organized jointly by the International Foundation for Electoral Systems (IFES), the National Democratic Institute for
International Affairs (NDI), the USAID RADA (Responsible Accountable Democratic Assembly) Program, and the National Agency
for the Prevention of Corruption (NAPC), through the support of the United States Agency for International Development (USAID),
Global Affairs Canada, and UK aid. The opinions expressed herein are those of the forum participants and do not necessarily reflect
the views of USAID, the United States Government, Global Affairs Canada, the Government of Canada, or the UK government.