Verkhovna Rada Passed the Law on State Financing of Political Parties

October 13, 2015

8 October 2015 the Verkhovna Rada of Ukraine passed the legislation on Amendments to Several Legislations of Ukraine on Preventing and Countering of Political Corruption (No2123a) (MPs: Yuriy  Lutsenko, Serhiy  Leshchenko, Andriy Parubiy, Viktoria Siumar, Yehor Soboliev, Viktoria Voytsitska, Pavlo Rizanenko, Ihor Hryniv, Ostap Semerak, Svitlana Zalishchuk, Mustafa Nayyem, Hanna Hopko, Viktor Chumak, Yuriy Derevyanko, Dmytro Dobrodomov, Oleh Osuhovskiy, Ivan Melnychuk).

The draft law introduces a row of positive innovations in the sphere of financing of political parties.

Firstly, state financing of political parties is introduced on the model of a number of the European countries. The annual scope of state funding of statutory activity of political parties, which are in accordance with this law eligible for such financing, constitutes two hundredths of a minimal wage – set on 1 January of the year preceding the year of allocation of the State Budget of Ukraine – multiplied by the total number of voters participated in voting in the multi-mandate constituency at the last ordinary or extraordinary parliamentary elections Ukraine. 10 percent of state funding will be equally distributed among all parties proportionally to a number of votes, gained at the last elections.

Secondly, the control mechanism over financing of political parties is been significantly improving. Restrictions on a possibility of contributions of natural and legal persons are introduced. A total amount of contribution to support a political party from citizens of Ukraine during one year shall not exceed 100 minimum wage, set on 1 January of the year in which the contribution were made, and from legal persons the amount shall not exceed 250 times. National Agency for Prevention of Corruption is authorized to control state funding of political parties and is in particular eligible to stop it. Moreover, administrative and criminal penalties for non-compliance of financing of political parties are increased.

Finally, the reporting system of political parties for the money spent is refined. The legislation anticipates an annual mandatory financial audit of political parties, which received state funding or were subjects of electoral process during the last general national elections. Political parties, local organizations of political parties are required to provide audit firm that conducts an independent external financial audit, with the information (documents) necessary for such audits. The report of such a party audit of property, incomes, expenses and financial obligations is published on the official website of the National Agency for Prevention of Corruption. In particular, the report is published in the form of open data and not later than the tenth day after being received, and is posted with open access for at least five years.  

The full text of the law in Ukrainian can be found here.