24 October 2016

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OpinionUnsecured e-declaration

On August 15, 2016, a system of e-declaration of assets owned by public officials was to be launched. It was to be launched properly, including with a certificate of compliance with the enhanced information security system.

In general, e-declarations, a system for the officials to report on their lifestyle to taxpayers, provides for the public servants to be able to fill the forms at any moment. They then have seven days to enter corrections. And then the data automatically become available to anyone who logs into the system (it’s about the information that, under the Ukrainian law, does not contain private data, as the system will automatically cover it up). Thus, any investigative journalist, activist or any other citizen will be able to look at the record of their mayor or deputy, or governor, to check out their reports on assets and then compare data with the actual information that they have. They will be able to see whether a VIP car the official drives to work every morning is included in the declaration, or an uptown villa, where the official resides. Upon revealing any discrepancy, the citizens will be able to report it to the National Agency for Prevention of Corruption, which, in turn, will check the official in question more thoroughly. And if the inconsistencies are confirmed, the case will be forwarded to the National Anti-Corruption Bureau of Ukraine (regarding top officials) or National Police (lower level public servants).

In 2015, the courts punished only a fifth of those accused of corruption. Besides, the higher the rank of the corrupt official, the higher the chances for an acquittal

The recorded discrepancy in e-declarations will lead to various levels of punishment, ranging from disciplinary measures to criminal liability. Of course, the decisions on the level of penalties will be taken by courts.

Unfortunately, there is a great risk that the Ukrainian Themis will remain too forgiving of corrupt officials (according to Transparency International Ukraine, in 2015, the courts punished only a fifth of those accused of corruption. Besides, the higher the rank of the corrupt official, the higher the chances for an acquittal). It is therefore important to make use of an opportunity, provided by the Ukrainian legislation, to create in 2016 the Special Anti-Corruption Court.

At the moment, the biggest problem is the lack of a certificate of the e-declarations system’s compliance with an enhanced information security system (EISS). The thing is, no court will accept cases, based on data from the unsecured system. Without digging into details, I would say that the decision of the State Service of Special Communication and Information Protection (SSSCIP) not to grant such a certificate to the e-declaration system is manipulative and politically motivated. More than a month ago, the SSSCIP together with the National Agency for Prevention of Corruption (NAPC) approved a plan, according to which the system was to be launched on August 15. The problems miraculously started to emerge with the SSSCIP just two weeks before the launch. Until that moment, no problems were reported whatsoever. In the final version of the assessment report, the SSSCIP officials stressed that the system was only 60% complete, claiming that it’s only the system of submitting declarations was ready – but not the system of their verification. This is also a manipulation, because, according to the specification papers, the part that allows officials to submit declarations and save data had to be completed by September, while verification modules, required by NAPC, had to be completed exactly in September. And it was the NAPC that appealed to the developers and the SSSCIP with a request to postpone the implementation of the verification module until September, and the SSSCIP agreed with this request. Now, as it turned out, this became a problem and the reason not to grant a certificate of compliance with the EISS.

SSSCIP systemically hinders the introduction of various modern electronic systems by failing to grant the required certificates

Do we, civic activists, have doubts about the system developers Miranda Ltd? They are significantly lower than those about the SSSCIP. That’s because the developer was selected by representatives of UNDP, the World Bank (which also provided funds for the creation of the system. At the same time, the SSSCIP systemically hinders the introduction of various modern electronic systems by failing to grant the required certificates. So when the position of UNDP and the World Bank is that the system meets international security standards, the position of SSSCIP looks strange.

Another problematic point is the debate on whether the planned level of system openness is reasoned. Some officials are afraid that the robbers will be able to track them down, especially considering they declare large sums in cash.

Indeed, in other countries, there is no such level of openness of information in the system of e-declaration as it is planned in Ukraine. But neither have they such a level of distrust in law enforcement agencies, when they have just a little more than 3% of public trust, along with the judiciary. Therefore, external control over declarations is critically needed. And the openness of the system provides such mechanisms for society. Another question is to explain to the Ukrainians that the crime lies not in the fact that the officials own expensive assets, but that they were purchased as a result of corruption. It should also be noted that when the persons first enter their data, they may not remember the exact price of the purchased property. So, for example, they can declare jewelry with no clear indication of its price (remember that declaration base has expanded significantly, and now the officials must report anything that exceeds 50 times the minimum wage (UAH 72,500), even cash, jewelry, expensive clothing, paintings, antiques, any expenditures above this price threshold, etc.) And, of course, manipulation is possible against this background. Lawyers and accountants of Ukraine’s officials are already recommending that they enter in their declarations the data on jewelry not yet purchased, to be able to seamlessly buy new items in the coming years... We are working to prevent such manipulation. After all, no country in the world has come up with a system of electronic declaration, 100% secure from evasion.

Yaroslav Yurchyshyn is an Executive Director at Transparency International Ukraine

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