The Board of Directors of the Millennium Challenge Corporation (MCC) today approved financing for an anti-corruption initiative in Ukraine. Ukraine is presently ineligible for broader MCC Compact assistance because of persistent problems with public corruption, one of 16 factors used to select countries to participate in the Compact program, according to the Action Ukraine Report.

      Compact eligibility is reserved for countries that score above the median on independently measured indices such as political and economic freedom, investment in education, control of corruption, respect for civil liberties, health care spending, fiscal and trade policies and judicial fairness.

      "Ukraine is undertaking bold reform programs to tackle corruption and attract more international investment, including possible future MCC Compact assistance that is designed to reduce poverty through economic growth," said Ambassador John Danilovich, Chief Executive Officer, MCC.

      Ukraine`s poor performance on the corruption index is primarily attributable to weak conflict of interest laws, a lack of independence, efficiency, and integrity in the judiciary, inadequate whistleblower and witness protection programs, and endemic corruption in the police force, educational and medical institutions, as well as customs and tax administration. The Ukraine initiative targets many of these obstacles as the country seeks to qualify for Compact eligibility.

      The two-year $45 million initiative in Ukraine will be administered by the United States Agency for International Development and aims to reduce corruption in the public sector through strengthening civil society`s monitoring and exposure of public corruption, reforming the judiciary, increasing government monitoring and enforcement of ethical and administrative standards, streamlining and enforcing regulations and combating corruption in higher education.

      The initiative is part of MCC`s Threshold Program which assists countries that are on the "threshold" of eligibility for Millennium Challenge Account Compacts. Threshold Program assistance is used to help countries address the specific policy weaknesses indicated by the country`s scores on the 16 policy indicators.

       Ukraine`s Threshold Program aims to reduce corruption in the public sector through strengthening civil society`s monitoring and exposure of corruption, judicial reform, increased government monitoring and enforcement of ethical and administrative standards, streamlining and enforcing regulations and combating corruption in higher education.

      President Yushchenko was elected on an anti-corruption platform and has made some reforms since his election in such areas as the police force, customs service, and tax administration. However, much remains to be done.

      International organizations and experts have repeatedly highlighted the targeted areas as significantly contributing to corruption in Ukraine, constraining economic investment and growth and limiting access to fair and equal opportunity and justice for the Ukrainian people.

      Initial steps for introducing reform in these four areas have already been taken - including passage of the Concept of Judicial Reform, deregulation at the national and oblast levels, and passage and initial implementation of the Permit System Law. The Ukraine Threshold Program is an aggressive, multifaceted program that will build upon lessons learned and initiate necessary steps to invigorate ongoing efforts to attack public sector corruption.

      Program components

      [1] Strengthen Civil Society`s Monitoring and Exposure of Corruption: Thousands of Ukrainian nongovernmental organizations (NGOs) actively represent the interests of their constituencies, promote public policies, monitor government performance, and successfully advocate for reforms. Furthermore, the mass media enjoy fundamental press freedoms and offer the public a range of sources of professional news and information.

      Despite the substantial progress of recent years, Ukrainian civil society and media are not meeting their full potential as effective monitors of government and advocates for reform. This component aims to reduce opportunities for corruption by enabling civil society to be more effective monitors of government and advocates for reform.

      [2] Judicial Reform: Critical to efforts to fight corruption is increasing the level of transparency in the delivery of justice by introducing permanent improvements in key legislative, procedural and institutional arrangements.

      The proposed activities will also contribute to fostering a more professional cadre of administrative judges, court personnel, and notaries. The goal of this component is to increase transparency in the judicial sector.

      [3] Government Monitoring and Enforcement of Ethical and Administrative Standards: Currently Ukraine has no general conflict of interest legislation for government officials except for certain provisions that limit business opportunities for family members of officials.

      Additionally, although there are requirements that candidates for public office and civil servants declare their assets, the methodology has flaws and omissions, and submitted declarations are rarely checked and even more rarely are sanctions imposed for falsification.

      This component will create systems to strengthen accountability among government officials and enable the Government of Ukraine to better monitor and enforce ethical and administrative standards.

      [4] Streamlining and Enforcing Regulations: Complicated, confusing and overlapping systems providing construction permits, delivery of municipal services, land and property ownership and usage are sources of significant corruption. Both private individuals and legal entities must complete an enormous number of steps to start any construction activity.

      The processes are neither transparent, nor defined in time, and there is clear evidence of corruption at all steps. This component will change the legislative and regulatory framework for property transactions, reform the permit system, and streamline lines of responsibilities and procedures in order to reduce corruption in these areas.

      [5] Combating Corruption in Higher Education: Recognizing the importance of reducing corruption within the educational system, a national testing center, the Ukrainian Center of Evaluation of Education (UCEE), has been established.

Assistance is required, however, to fully implement the xternal testing system as well as to ensure its integrity.

      The goal of this component is to reduce corruption in higher education by establishing a legal framework requiring a minimum test score for admission to universities; developing a functioning security system for test results; and ensuring that 100 percent of students are tested and the test centers are fully operational.

      Highlights of expected results

      [1] Reduce the perceived level of corruption in all areas by 10 percent.

      [2] Reduce experiential corruption in all areas by 20 percent.

      [3] 30 percent of NGO advocacy campaigns result in government reforms.

      [4] Reduce the number of cases brought to the European Court of Justice by 30 percent.

      [5] Increase the number of notary violation findings that result in sanctions or prosecutions by 30 percent.

      [6] Increase compliance with procedures in ministries with an Internal Investigative Unit (target to be determined upon establishment of the Internal Investigative Unit).

      [7] Reduce the number of users who indicate that they made unofficial payments in areas of customs, transportation, construction, land ownership, land usage, and municipal services by 20 percent.

      [8]Increase to 100 percent the percentage of students tested for university admission.

      The Government of Ukraine will also use additional indicators on corruption drawn from MCC`s "Control of Corruption" indicator to measure program effectiveness.

       Implementing partners

      The United States Agency for International Development, the Department of Justice, the Department of State and the United States Embassy in Kiev will play key roles in implementation of the program.

      Millennium Challenge Corporation (MCC), a U.S. government corporation designed to work with some of the poorest countries in the world, is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty.

      The news was monitored by The Action Ukraine Report (AUR) Monitoring Service, Morgan Williams, Editor.