Draft bill #1146 of August 5, 2024 

Cosponsors: 7 MPs from the Servant of the People faction and independent MPs with Alina Zahoruiko as the first signatory 

Status: send for review to the Committee of the Verkhovna Rada on State Administration, Local Governance, Regional Development, and Urban Planning 

Who is affected: political parties, the National Agency for Corruption Prevention (NACP), citizens of Ukraine, and individuals and legal entities financing political parties 

Summary: 

A special system to monitor election funds will be launched: 

  • information communication system (hereinafter — the System) will allow filling in and submitting political parties’ financial reports 
  • the holder of the System will be the NACP. The agency will also authorize users and maintain free 24/7 access to the System 
  • the System will publicly display data on the circulation of funds in the account of the election fund, as well as reports on the parties’ incomes and expenditures 
  • by December 31, 2025, the NACP will have to ensure the launch and operations of the System, as well as develop the procedure for its work. 

The functioning of the presidential candidates’ election funds will be defined as follows: 

  • a presidential candidate’s election fund will have one UAH account. The candidate will be required to open it in a Ukrainian bank no later than on the 10th day after registration with the CEC 
  • funds for the candidate’s election campaign and campaigning will flow into the account 
  • transactions will be exclusively cashless 
  • the bank will inform the NACP about the candidate opening the account no later than the next business day. The bank will also provide the details and data required to authorize the account managers of the election funds and grant them access to the System 
  • information about the opening of the account and its details will be displayed in the System for public access 
  • it will be prohibited to spend money from the accounts of election funds from 6:00 PM on the first Wednesday after the election day or the day of the second round of elections 
  • if a second round of elections is appointed, candidates participating in it will be able to use money from their election funds again. This will be allowed after a decision is made regarding the candidates’ inclusion in new ballots 
  • the bank will close the corresponding accounts on the 15th day after the official announcement of the election results. For candidates not included in the second-round ballot — after the publication of the decision to appoint a repeat vote 
  • freezing funds in the account during the electoral process will not be permitted 
  • for a presidential candidate’s account, no more than two persons will be allowed to become its managers. They could be authorized representatives of the candidate, for example 
  • all financial transactions will have to be registered in the System within three business days after their completion 
  • the legitimate sources for a presidential candidate’s election fund will be their own funds, funds from the party that nominated them, and voluntary contributions from individuals and legal entities 
  • the account manager will have the right to refuse a contribution to the election fund. To do this, they will have to submit a relevant statement and payment document to the bank where the current account is opened. The contribution will be either returned to the donor or credited to the government budget 
  • if a party-nominated presidential candidate has not spent all the funds from their election fund, they will be able to submit a written request to transfer them to the party’s account. If they do not submit the request within 10 days after the announcement of election results, the bank will automatically transfer the unused funds to the government budget 
  • if an independent candidate has not spent all the funds from the election fund, they will be able to ask the bank to transfer the remaining amount to themselves. If they do not do so within 10 days after the announcement of election results, the money will go to the government budget 
  • if the candidate’s registration is canceled, the funds will be returned using the same procedure — as unused 
  • the manager will report on the income and use of funds in the account within 10 days after the elections. They will fill in and submit the corresponding report to the System 
  • the reports will have to contain data on all funds received in the account, expenditures, and the remaining balance. In particular, the reports will have to include information about the receipt date of each contribution to the election fund, its amount, information about the contributor, the name of the party, the purpose, the date and amount of each payment, as well as details about the recipient of these funds 
  • the NACP will analyze the reports and issue a conclusion describing the results: indicating identified violations, referring to violated legal requirements, and specifying the measures taken to respond to these violations. 

The functioning of the parties’ and their candidates’ election funds will be defined as follows: 

  • the party’s election fund will consist of one account in a single nationwide multimember constituency. It will be used for both the receipt of funds and funding campaign expenses (including campaigning) in all electoral regions 
  • the party will have to open a UAH account in a Ukrainian bank no later than on the 10th day after the CEC registers the candidates included in the party’s electoral list 
  • a parliamentary candidate will have to establish their own election fund only if they are donating to their own campaign 
  • transactions in both cases will have to be exclusively cashless 
  • no later than the next business day, the bank will inform the NACP about the account opening and its details, providing information necessary for authorizing the managers of the election funds accounts and granting them access to the System 
  • information about the opening of an account and its details will be displayed in the System for public access 
  • spending money from accounts will be prohibited at 6:00 PM on the first Wednesday after the election day 
  • the bank will close accounts on the 15th day after the official announcement of the election results 
  • freezing of funds in the account during the election process will not be permitted  
  • control over the receipt and use of funds will be conducted by the NACP and a bank where the election fund account is opened. The NACP will consider applications and complaints regarding the establishment of the parties’ and parliamentary candidates’ election funds, as well as the use of these funds 
  • at most two people will be allowed to be appointed the managers of the party’s account. They will be designated by the governing body of the political party 
  • data on the circulation of funds in the account will be recorded in the System and become visible only after the authorized person confirms each financial transaction 
  • the account manager or recipients of the election fund’s money will have to provide all necessary explanations, documents, or information to the NACP within three business days after receiving a corresponding request so that the NACP can analyze reports on the receipt and use of funds 
  • the party’s and candidate’s election funds will be accumulated from the party’s own funds and voluntary contributions from individuals and legal entities 
  • third-party contributions and contributions from the candidate or party will have to be provided and received in monetary form only (for example, it will not be allowed to donate a vehicle for the election campaign). All provided money will have to be transferred to the account of the election fund 
  • if there are remaining funds in the election fund, they will be transferred either to the party (by decision of its governing body) or to the parliamentary candidate (upon their request). If there is no decision by the party or a request from the candidate within 10 days, the bank will transfer the money to the government budget 
  • if the registration of a party or candidate is canceled, the funds will be returned using the same procedure — as unused 
  • no later than 10 days after the elections, the manager will have to fill in and submit a report on the income and use of funds of the election fund to the System 
  • the NACP will check all the timelines of submission of reports on election funds and conduct selective checks to minimize risks of abuse and corruption 
  • for the selective analysis of reports, the NACP will be allowed to engage qualified specialists and experts on a voluntary basis (for example, under a contract). Their services will be paid for from the government budget — from the funds allocated for the preparation and conduct of elections 
  • the NACP will analyze the reports and issue a conclusion describing the results: indicating identified violations, referring to violated legal requirements, and specifying the measures taken to respond to these violations. 

The election fund of local self-governments will operate as follows: 

  • a party organization that nominated its candidates for the Verkhovna Rada of the Autonomous Republic of Crimea, oblast, raion, city, village, and settlement councils, as well as a candidate for the position of a city mayor will have to establish its own election fund 
  • the fund will consist of a UAH account opened in a Ukrainian bank no later than no later than on the 10th day after the territorial election commission registers its candidate(s) 
  • funds for the candidate’s election campaign and campaigning will flow into this account 
  • transactions will be exclusively cashless 
  • operation principles of the election fund and the reporting procedure will be similar to those for political parties and candidates nominated by parties. 

What is right: 

  • voters will receive comprehensive information about the candidates’ sources of funding, the campaign funds circulation, and reports about their use 
  • the National Agency for Corruption Prevention will get the right to monitor and analyze financial reports on the income and use of election fund money, which will reduce corruption risks 
  • selective monitoring of candidates’ election funds during parliamentary and local elections will be introduced, and it will take into account the risks of financial, economic, and other activities. 

Additional information: 

  • article by Oksana Zabolotna: Elections during the war. 7 arguments against 
  • article by Oksana Zabolotna: Why the adopted law on the restoration of reporting of political parties does not solve the problem? 
  • stream with Oleh Rybachuk: Year of elections in the world: how will it affect Ukraine?