E-Declaration for public servants’ assets: public scrutiny to curb corruption?Sep 9, 2016
After supporting the development of the e-Declaration system for officials’ assets to support institutional reform and fight against corruption in Ukraine, UNDP has handed over the software package to the National Agency on Corruption Prevention, upon the successful tests results, clarification of all legal safeguards and validation by all State agencies involved in its development.
For years in Ukraine, business and politics have been fused, the rule of law has been weak, and almost all transactions, from visiting the doctor to managing a business to running a political campaign, have incurred informal taxes or rents.
After the 2013–2014 Euromaidan revolution, the new government has made a major breakthrough in anti-corruption policy, legal and institutional reforms by adopting an anti-corruption strategy and legislative package bringing the country into compliance with international anti-corruption standards, notably “On amending certain laws of Ukraine determining the final beneficiaries of legal entities and politically exposed persons”, including via the creation of the National Agency on Corruption Prevention and the National Anti-Corruption Bureau.
A ground-breaking anti-corruption instrument in Ukraine
In this context, and as part of its ongoing programme and broader initiatives aimed at enhancing transparency and integrity within the public sector in Ukraine, UNDP upon the request of the Ministry of Justice in September 2015, accepted to take on the development of a software for an e-declaration system allowing to monitor government officials' assets, income, and expenses.
Declaring assetsThis key anti-corruption instrument is intended to contribute to establishing a strong and comprehensive corruption prevention ecosystem in Ukraine, as is already the case in many countries worldwide. What is not so common in other countries though, is that Ukrainian law requires that this Ukrainian electronic declaration system is open to public scrutiny, enabling every Ukrainian citizen to access officials’ assets online for fact checking against their lifestyles. Ukrainian law has also opted to require a very large number of officials and civil servants to comply with this system.
The scope of this electronic system, as set by the legislation, allows the declaration to cover assets such as real estate, construction in progress, valuable movable and immovable property, securities, corporate rights, intangible assets, and legal entities, owned by the public servant themselves as well as family or household members.
This is a major step towards international standards from the earlier asset declaration system already in place in Ukraine, which allowed officials to leave assets owned by close associates undeclared, making the system largely ineffective in the eyes of anti-corruption experts in Ukraine and abroad.
Assisting the newly-established National Agency on Corruption Prevention (NACP), the e-declaration system is designed to act as a strong deterrent and a real opportunity to identify those public servants responsible for illegal enrichment under the current anti-corruption legislation, leaving them with very few options: coming clean by declaring their property or facing up to 8 years in prison.
As apparently intended by the legislators, the effectiveness of the new declaration system seriously challenges the status quo, given the long-standing and widely-accepted practice of “topping-up” very low civil servant salaries with other income, and the likelihood that a large number of civil servants and elected officials have assets that were not accumulated through public service.
Maintaining and monitoring the asset declarations of public officials is at the core of the NACP’s mandate and is a central element of Ukraine's Anti-Corruption Strategy and Action Plan. It has also been the subject of a number of commitments made by Ukraine to its international partners and can be considered a key element of the reform process.
Software security and quality insurance
In its neutral support capacity and with the financial support of the Government of Denmark, UNDP was tasked to identify, contract and monitor the progress of the company that would develop the software, whose terms of reference were developed by World Bank’s experts as part of its technical assistance package rendered to Ukraine, and endorsed by the Ukrainian Government on 28 August by publication of Order № 863-р “Issue of Creating the Electronic Instrument for Financial Control Regarding Persons Authorized to Fulfil State and Local Government Functions”.
A Ukrainian software development company with experience in providing systems for the Government, Miranda LCC, was selected and contracted in December 2015 through UNDP’s normal open, transparent and competitive procurement procedures.
The NACP has been involved in the software development process, along with other national stakeholders, immediately after its effective creation in March 2016, as the project beneficiary and ultimate owner of the e-declaration system.
In order to ensure the highest quality and smooth functioning of the software, as well as its full compliance with Ukrainian legislative requirements, a Quality Assurance Group was established, composed of expert representatives from the Ministry of Justice of Ukraine, the NACP, the World Bank and UNDP, and tasked to meet and review each contractual deliverable submitted by the software developer Miranda LCC.
Steady progress and client satisfaction
In June, the NACP officially approved the format for electronic asset declaration system, the algorithm that underlies its operations including data intake, processing and publication, and set 15 August 2016 as the deadline for its full-fledged launch. All regulatory documents were sent to the Ministry of Justice for registration.
Running from 13 June to 10 August, the Early Bird E-Declaration awareness raising campaign allowed some 15 top ranking officials to make the bold move of publicly testing the system by filling-in their asset electronic declarations.
In the meantime, the quality and suitability of the system’s software, including on digital submission, storage, publication and personal data protection standards, was officially vouched on two occasions:
- On 10 May 2016, by the Quality Assurance Group, and
- On 21 July 2016, by an inter-agency working group composed of experts from the NACP, the Ministry of Justice, the State Agency on e-Governance, the State Service of Special Communication and Information Protection of Ukraine (SSSCIP), the World Bank and UNDP.
Both entities signed a protocol confirming the software’s operational suitability and legal compliance. This paved the way for Miranda LLC to start developing additional modules, such as declaration verification and cross-referencing with other state bodies’ registries.
At this stage, the SSSCIP was to process the paperwork relating to the certification of the system solutions for data protection, and to issue the certificate no later than 12 August, in time for the intended launch date.
Software completion and transfer
On 27 July 2016, driven by the successful test results and clarification of all legal safeguards, NACP requested the official hand over of the software, and accepted full ownership rights, as the electronic asset declaration system was considered technically ready for launch by all parties at this stage.
On this occasion, Head of the National Agency on Corruption Prevention, Natalia Korchak, reconfirmed 15 August as the expected launch date of the system, stating that all necessary regulatory documents to allow the launch of the e-Declaration system had been officially registered by the Ministry of Justice and published, and that the software for filing the declarations was fully delivered and awaiting certification by the SSCIP.
“Corruption must be eradicated, but it is even better to prevent it. Prevention is the best cure. For this, we need an effective control over income and expenditures of all officials, judges, prosecutors, and law enforcement officers. People have long been waiting for the estate, cars and money owned by public servants to come to light. The tool for such control exists. It is the electronic declaration of assets, which will enter into force on 15 August. I do not want to even consider postponing the date. Please do not believe rumors and speculation.” President Poroshenko, 11 August 2016.
Eventually, the e-Declaration system to be launched on 15 August was not granted with the required data protection certificates, based on a technical assessment performed by the SSSCIP - a prerequisite for the e-declarations to have legally-binding consequences according to Ukrainian law. Passwords for the software were requested by and transferred to NACP on 23 August.
e-Declarations: moving forward
On 1 September, the NACP launched officially the e-Declaration system after reportedly “re-working the software and correcting the deficiencies that had prevented the SSSCIP from issuing the certificate earlier”.
It was reported that the State Service for Government Communications was still modifying the software of the e-declaration system by mid-September.
The system and passwords have been fully transferred to NACP and are now under national ownership and control. UNDP remains keen on supporting national capacities in anti-corruption efforts and will keep consulting with all relevant partners to identify the most effective ways if future assistance in this area.