Draft bill #9419 of June 26, 2023 

Sponsor: the Cabinet of Ministers of Ukraine 

Status: submitted to the Verkhovna Rada 

Who is affected: political parties, Ukrainian citizens, persons with disabilities, individuals and legal entities financing political parties 

Summary of the bill: 

  • the right to state funding will be granted to political parties that have received not 5% but 2% of votes in the last parliamentary election 
  • the annual amount of funding will be calculated based on the cost of the living wage (₴2,684 in 2023), not the minimum wage (₴6,700 in 2023) 
  • donations to political parties by individuals acting on their own behalf but in the interest of others, as well as by legal entities managing the assets of other individuals, will not be allowed 
  • the total amount of donations that are allowed per year will be changed: 
    • for Ukrainian citizens — should not exceed 20% of a person’s total income over the last five years — instead of 400 minimum wages (₴2,680,000 in 2023) — and should not exceed 600 living wages (₴1,610,400 in 2023) 
    • for legal entities — should not exceed 20% of a legal entity’s total income over the last five years — instead of 800 minimum wages (₴5,360,000 in 2023) — and should not exceed 1200 living wages (₴3,220,800 in 2023) 
    • if a person or legal entity has significant influence over one or more legal entities, the total amount of donations should not exceed 20% of total income over the last five years, and should not exceed 1200 living wages (₴3,220,800 in 2023) 
  • changes will be made to how state funding can be used: 
    • the following option is added: to use the state funding to engage persons with disabilities as a part of statutory activities 
    • the following activities will be prioritized when it comes to state funding: training of party members, the establishment of analytical centers, voter engagement, engagement of women and youth in party activities, and party organizational capacity-building 
    • it will be prohibited to spend state funding on: unlawful party activities, political advertising, purchase of real estate and securities, repayment of debts, and campaigning 
  • the distribution of state funding will be changed: 5% of the funds allocated for financing the statutory activities of political parties will be distributed by the NACP equally among the parties which are represented by at least one MP with a disability. 

What is right: 

  • financial incentives will encourage parties to involve people with disabilities and enlist them 
  • the number of parties that are entitled to state funding will increase. This will strengthen the sustainability of political parties not represented in the Parliament 
  • the bill defines the priorities of how state funding should be used more clearly. 

What is wrong: 

  • the actual annual volume of funds allocated for state funding of political parties will decrease. In 2024, the size of the funding will decrease by over ₴600 million 
  • the volume of donations from individual and legal entities will be decreased. 

Background information: state funding of political parties was introduced in 2016. It was granted to parties that got two or more percent of the votes in the last parliamentary election. The decision to provide funding was up to the NACP. On October 2, 2019, the Verkhovna Rada decided stop giving state funding to parties that failed to get at least 5% of votes in the last election.