Ukraine Adopts New Law to Fight Corruption
Kegler Brown Global Business News August 25, 2014
Ukraine adopted a new amendment to its anti-corruption legislation (Law No. 1261-VII) on June 4, 2014, in order to comply with the European standards aiming at defeating corruption in the private and public sector. Several provisions of the amendment may be relevant for companies doing business in the Ukraine:
- Whistleblowers, who have (sometimes anonymously) assisted in identifying and disclosing corrupt practices, can now be protected from attacks by the government through personal protection, visual observation or other effective mechanisms. In addition, it is now illegal to terminate a whistleblower's employment or change the working conditions through transfer or other negative implications.
- Jurisdiction has been expanded to include "foreigners," meaning people who do not permanently live in the Ukraine. Those individuals are punishable under this new amendment if they commit an offense sanctionable under the Ukrainian anti-corruption laws in complicity with Ukrainian officials.
- The expansion of the law to individuals working in the private sector, which in the past could not be prosecuted in the same way as public employees, has been changed. Sanctions for corruption offenses can be severe, with fines up to twice the amount of illegal benefits obtained. In case no illegal benefit has been obtained, the penalty can be up to UAH 1.275 million (approximately $108,000.00). Individuals may face imprisonment if found guilty of corruption.
- The amendment also introduced another cause of action for companies: a duty to take measures to prevent corruption which is assigned to the authorized representative of the company. This requires companies to develop and implement necessary and reasonable steps to prevent corruption by encouraging employees to act in compliance with the rules of the new amendment.