Draft bill #9419-1 of July 12, 2023 

Cosponsors: a group of 36 MPs from Servant of the People, Holos, European Solidarity, and Batkivshchyna factions, and group Trust 

Status: submitted to the Verkhovna Rada 

Who is affected: political parties, the National Agency on Corruption Prevention, citizens of Ukraine, individuals and legal entities that finance political parties 

Summary of the bill: 

  • the right to state funding will be granted to political parties that have received over 3% of votes in the last parliamentary election. Currently, only parties that have received over 5% of votes are getting state funding 
  • parties will be allowed to put their funds, including those provided by the state, into a bank account to receive passive income — interest. The accumulated interest will not be subject to regulations on how state funding is to be spent 
  • a political party will have the right to refuse a contribution at its discretion at any time before the date of submission of the report on the property, income, expenses, and financial obligations for the period during which such a contribution was received 
  • a political party is exempted from reporting its financial liabilities if the debts were incurred and paid for within the same reporting period 
  • reports that parties failed to submit for reporting periods during the lockdown and while martial law was in effect, are to be submitted to the National Agency on Corruption Prevention within 120 days from the date of this law coming into force. Parties eligible for state funding will have to submit such reports within 90 days 
  • political parties that failed to submit their reports within 119 days from the date of this law coming into force (parties eligible for state funding — within 89 days) will not be held accountable 
  • a political party will not be held accountable for submitting incomplete information for the reporting periods during the lockdown and while martial law was in effect if it was impossible to provide full information 
  • the following grounds will be recognized as legitimate not to provide full information in the report: 1) loss of primary documentation, computer, or other equipment due to military hostilities, terrorist acts, or sabotage caused by the military aggression of the Russian Federation, or unavailable because they were located in territories where military (combat) operations were being (are being) conducted or which are surrounded (blocked) or temporarily occupied by Russia; 2) inability to use primary documentation, computer, or other equipment due to military hostilities, terrorist acts, or sabotage caused by the military aggression of Russia; 3) other force majeure circumstances 
  • the NACP will have to finish checking the reports submitted by political parties within 60 days from the date of their receipt. 

What is right: political parties will resume reporting on their property, income, expenses, and financial obligations. 

What is wrong: 

  • it will be possible for political parties to avoid accountability by providing incomplete data in their reports 
  • political parties will be able not to report financial contributions from individuals and legal entities by refusing these contributions before submitting a report. 

Why this is important: the submitted draft bill is an alternative to the one already submitted by the Cabinet. This will affect the procedure of how it will be considered in the Verkhovna Rada. For example, if one of the alternative draft bills is adopted in the first reading, other bills are taken off the agenda without a separate vote. There is a great risk that the bill sponsored by the Cabinet and which contains many important provisions on state funding will be withdrawn from consideration. 

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

Alternative solution: to pass the bill sponsored by the Cabinet and add the provisions restoring financial reporting for political parties to it.