Ukraine Restores Prison Terms for Officials Hiding Assets

(Bloomberg) -- Ukraine approved a law to make officials who fail to fully declare their assets subject to prison terms -- a move that may help restart a $5 billion loan from the International Monetary Fund.

Custodial sentences for incomplete and false asset declarations were originally introduced in 2014 as an anti-corruption measure. But the Constitutional Court called the legislation “excessive” and struck it down in October, sparking public outrage and rattling Western donors.

Parliament on Thursday finalized a bill reinstating the threat of as long as two years in prison. To take force, it now requires President Volodymyr Zelenskiy’s signature.

It’s not Ukraine’s first stab at bringing back the legislation. Lawmakers in December restored only limited criminal liability for public employees, prompting Group of Seven countries to say it’s important “to ensure that penalties for false and unfiled asset declarations won’t be weakened and effectively deter corruption.”

With the coronavirus pandemic draining government resources, Ukraine is struggling to get its IMF aid package back on track. Other concerns include wider anti-graft efforts, including appointing the head of anti-corruption bureau, and central bank independence.

While the Washington-based lender has to confirm the law meets its requirements, one local NGO immediately criticized the legislation.

“Lawmakers backed a bill that makes it impossible to punish officials for lying about their family members’ assets,” said Vitaliy Shabunin, who heads the Ukrainian Anti-Corruption Action Center. “The bill makes things worse than they were. I hope Zelenskiy vetoes it.”

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