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E-declaration: Who, What, When


Galyna Melnyk, lawyer at Ilyashev & Partners Law Firm
Source: Ekonomichna Pravda

The day before the National Agency for the Prevention of Corruption decided to launch the system of electronic declaration.

The new system presupposes replacement of the old paper-based declarations by the new electronic ones that which are filled in on the agency’s website.

What has changed in connection with the launch of the electronic declaration?

The circle of persons who file declarations remained the same. They are the persons who perform the functions of the state or local government.

They include the president, people’s deputies, deputies of local councils, ministers, judges, prosecutors, police officers, officials of state-owned enterprises and other persons listed in the law “On Prevention of Corruption”.

However, some persons from this list will have to file in 2016 the repeat declaration for 2015, but now in a new electronic form.

Such persons include those servants who on the first day of operation of the electronic declaration system occupy the positions listed in Article 50 of the said Law as responsible or especially responsible.

In particular, these are the president, the prime minister, people’s deputies, chairman of the NBU, civil servants of category “A” and “B”. These individuals are obliged to submit an electronic declaration by filling in the information on the agency’s website within 60 days after the launch of the system, i.e. until October 12, 2016.

The persons who do not hold responsible or especially responsible positions, such as directors of state-owned enterprises, deputies of local councils, will submit e-declarations for 2016 already in 2017, by April 1.

What is the difference between electronic and paper declaration? The difference lies in extended circle of items of declaration and detail of the declared information.

The new items of declaration should include the unfinished construction, the movable property which value exceeds 100 minimum wages (in 2016 – UAH 137.8 thousand), the legal entities in which the declarant or his family members are the ultimate beneficiaries.

They also include intangible assets, including intellectual property items, cash amounting to more than 50 minimum wages (in 2016 – UAH 68.9 thousand), granted and received loans in excess of UAH 68.9 thousand (previously only repayment of loans was declared).

In addition, the objects of declaration include expenditure for all transactions under which the ownership right or financial obligations of the declarant or his family members arise or terminate.

Finally, it is also taken into account whether the declaring entity is included in managerial, audit or supervisory bodies of public associations, charitable organizations, professional associations, membership in such organizations and associations.

An important innovation of e-declaration is indication of the date of acquisition of the property and its value, which, along with monitoring of lifestyle of declaring entities (Article 51 of the Law “On Prevention of Corruption”), will allow to track the expenses of the officials and compare them with their income.

The lawmaker also envisaged more strict responsibility for declaring of deliberately false information and deliberate failure to submit the declaration.

Now, it entails criminal liability of fine of UAH 42.5 thousand to UAH 51 thousand, or community service for a term of 150 to 240 hours, or imprisonment for up to two years, with disqualification to hold certain positions up to three years (Article 3661 of the Criminal Code).

Responsibility for filing of deliberately false information in respect of the objects of declaration that have monetary value occurs only if false information differs from reliable information in excess of 250 minimum wages (for UAH 344.5 thousand in 2016).

If such information differs from the reliable information for the amount of 100 to 250 minimum wages (UAH 137.8 thousand – UAH 344.5 thousand in 2016), administrative liability occurs in the form of fine of UAH 17 thousand – UAH 42.5 thousand. If the differences do not exceed UAH 137.8 thousand, liability does not occur.

Breaches connected with the old paper-based declaration entailed only administrative responsibility in the form of a fine, and only for the late filing of the declaration. Responsibility for indication in the old declaration of false or incomplete information was not envisaged.

After introduction of electronic declaration control of revenue of public servants will increase greatly. The information declared will be available on the agency’s website except for a limited range of confidential information.

It will be possible to conceal from declaration without the threat of criminal liability only items of insignificant value. Taking into account Article 3661 of the Criminal Code and monitoring of lifestyle of public servants it will be risky to conceal the expensive items, even if the information about them is not included in the public registers.

Although, taking into account our realities, understatement of cost of the items that will be indicated in the declaration and re-registration of expensive items to the persons who are not formally considered the family members of the declarant may be expected.

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