Yuri Kush­nir, Part­ner at Kush­nir, Yakymyak and Part­ners law firm,

Kyiv Post Legal Quarterly - - Contents -

fo­cuses on in­vest­ments, bank­ing & fi­nance, tax con­sult­ing, and cross-bor­der com­mer­cial trans­ac­tions. He has con­sid­er­able ex­pe­ri­ence in im­ple­ment­ing an­ti­cor­rupt mea­sures (as re­quired un­der US FCPA) by Ukrainian sub­sidiaries of multi­na­tional cor­po­ra­tions

Anti-cor­rup­tion mea­sures for legal en­ti­ties

The cor­rup­tion is per­ceived to be prob­a­bly the big­gest bur­den on the way of coun­try’s re­form im­ple­men­ta­tion and sus­tain­able devel­op­ment. Re­cently up­graded leg­is­la­tion on cor­rup­tion pre­ven­tion aims, among other, to as­sist com­pa­nies in Ukraine to con­duct busi­ness with in­tegrity and min­i­mize risks to be in­volved in cor­rupt prac­tices. What cor­po­rate world op­er­at­ing in Ukraine should know about new an­ti­cor­rup­tion leg­isla­tive re­quire­ments? The law pre­scribes the fol­low­ing two proac­tive mea­sures for legal en­ti­ties es­tab­lished in Ukraine:

• adop­tion of anti-cor­rup­tion pro­gram, and

• ap­point­ment of Com­mis­sioner for anti-cor­rup­tion pro­gram

(Com­mis­sioner). Start­ing from 26. 04. 2015 the above re­quire­ments shall be­come com­pul­sory for com­pa­nies will­ing to par­tic­i­pate in public pro­cure­ment, as well as com­pa­nies with over 50% of state or mu­nic­i­pal shareholding, which em­ploy over 50 em­ploy­ees and have yearly turnover of over UAH 70 Mio. In par­tic­u­lar, fail­ing to adopt anti-cor­rup­tion pro­gram and/or ap­point the Com­mis­sioner will re­sult in dis­qual­i­fi­ca­tion of a com­pany bid­ding in public pro­cure­ment pro­cesses. Com­pany CEO and share­hold­ers shall be pri­mar­ily re­spon­si­ble for eval­u­a­tion of cor­rup­tion risks and im­ple­men­ta­tion of counter-cor­rup­tive mea­sures. The law also en­cour­ages us­ing in­de­pen­dent ex­perts for iden­ti­fy­ing and elim­i­nat­ing cor­rup­tive risks in the com­pany’s ac­tiv­i­ties, in­clud­ing con­duct­ing re­spec­tive au­dits.

Com­pany’s Anti-cor­rup­tion Pro­gram

The anti-cor­rup­tion pro­gram shall be adopted by com­pany CEO fol­low­ing dis­cus­sion with the em­ploy­ees, and shall be read­ily avail­able for them. The pro­vi­sions of such anti-cor­rup­tion pro­gram shall be in­cluded into labour agree­ments, as well as may be re­ferred to in the con­tracts con­cluded by the com­pany. The law sets forth the list of re­quire­ments, which an­ti­cor­rup­tion pro­gram shall sat­isfy. In par­tic­u­lar, the pro­gram shall con­tain:

• the pro­vi­sions reg­u­lat­ing its scope and cir­cle of ap­pli­ca­tion;

• ex­clu­sive list and de­scrip­tion of anti-cor­rupt mea­sures, stan­dards, pro­ce­dures and the way of their im­ple­men­ta­tion, pe­ri­odic eval­u­a­tion of the cor­rup­tion risks;

• pro­fes­sional code of con­duct for com­pany em­ploy­ees;

• pro­ce­dure for ap­point­ment, pow­ers and re­spon­si­bil­i­ties of the Com­mis­sioner; pro­ce­dures for his/her pe­ri­odic re­port to share­hold­ers;

• con­fi­den­tial­ity in com­mu­ni­ca­tion with the Com­mis­sioner, pro­tec­tion

for whistle­blow­ers etc.

Com­pany Com­mis­sioner for anti-cor­rup­tion pro­gram

To qual­ify for the po­si­tion of the Com­mis­sioner a can­di­date shall be over 30 years old, with com­pleted higher legal or busi­ness ed­u­ca­tion, high pro­fes­sional and moral stan­dards. While the Com­mis­sioner shall be ap­pointed by the com­pany CEO or share­hold­ers as set forth in anti-cor­rup­tion pro­gram, his/her dis­missal shall be ap­proved by the Na­tional Agency for Cor­rup­tion Pre­ven­tion (Agency) in case the com­pany is par­tic­i­pat­ing in public pro­cure­ment or has over 50% public shareholding as de­scribed above. In all other in­stances the com­pany shall in­form the Agency about the Com­mis­sioner’s dis­missal within 2 days, and promptly ap­point the new can­di­date. While fur­ther leg­isla­tive ini­tia­tives are ex­pected to sup­ple­ment the pack­age of anti-cor­rup­tion laws in the near­est fu­ture, the busi­ness com­mu­nity is ad­vised to take note of the above leg­isla­tive re­quire­ments and be ready for their im­ple­men­ta­tion.

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