UNIC appeals for improvements to draft laws on criminal liability of legal entities

The All-Ukrainian Network of Integrity and Compliance (UNIC) has appealed to authorities to revise draft laws No. 11443 and No. 11443-1, addressing criminal liability of legal entities for corruption offenses. UNIC provided detailed recommendations to enhance alignment with OECD anti-corruption standards in Ukraine.

Developing legal frameworks on the liability of legal entities for corruption offenses is critical to Ukraine's efforts to join the OECD and its Working Group on Bribery. This initiative seeks to amend the Criminal Code and other legislative acts to meet international anti-corruption standards.

According to the appeal, the Verkhovna Rada of Ukraine recently registered draft laws No. 11443 (main) and No. 11443-1 (alternative) titled "On Amendments to the Criminal Code of Ukraine, the Criminal Procedure Code of Ukraine, and other legislative acts of Ukraine on aligning them with international standards of corporate liability for corruption-related criminal offenses."

UNIC experts closely analyzed the provisions of these draft laws, expressing gratitude for incorporating some of their previous recommendations during the concept’s development. However, UNIC emphasizes several areas requiring further refinement to ensure full compliance with OECD standards.

Proposals for improving legislative initiatives:

1. Coverage of Internal Corruption. The main bill does not address internal corruption. UNIC advocates for an equal approach to prosecuting legal entities for both domestic and foreign corruption offenses. The current draft law addresses only foreign corruption, which creates an imbalance and may limit anti-corruption effectiveness.
2. Institution of Agreements with Investigation. The main draft law lacks provisions for agreements with investigators—a critical mechanism for expediting criminal proceedings. Such agreements help save state resources and encourage companies to adopt anti-corruption programs. UNIC urges that this institution be included in the legislation.
3. Inclusion of Commercial Corruption. The main and alternative draft laws do not address commercial corruption. UNIC highlights the need for a unified approach to addressing corruption in both public and private sectors. Current drafts omit commercial corruption, potentially creating enforcement disparities.
4. Non-Financial Sanctions. UNIC points out excessiveness in some proposed sanctions, such as license restrictions or bans on renting state property, which could negatively impact business and the Ukrainian economy. Experts recommend clarifying these measures to avoid undue pressure on companies.
5. Compliance Obligations. The draft laws do not allow legal entities to undertake compliance obligations that could prevent future offenses. UNIC suggests including measures, such as anti-corruption systems or structural changes, as part of agreements with investigators.
6. Prosecutor’s Discretion. UNIC raises concerns over the broad discretion granted to prosecutors in applying an autonomous model of criminal prosecution to legal entities, recommending clearer criteria to prevent potential misuse.
7. Measures to Ensure Proceedings. The draft laws propose extensive restrictions on significant economic transactions and asset disposal before guilt is proven. UNIC considers these measures excessive, as they could paralyze businesses and harm the economy. The organization recommends limiting such measures to those directly linked to the offense to avoid abuse.
8. Mitigation of Sanctions. The draft laws do not provide for sanction mitigation if legal entities implement corrective measures post-violation, such as compliance systems. UNIC advocates for adding mechanisms to incentivize companies to uphold standards.

UNIC believes that these legislative improvements are essential for achieving positive outcomes. The Network’s experts remain committed to cooperation and stand ready to offer further recommendations, supporting Ukraine’s anti-corruption policy and its European integration ambitions.