Electoral Campaign Finances Reform: What Recommendations of International Observation Missions Were Taken Into Account?

Elections of the President of Ukraine

OSCE/ODIHR recommendations

Have they been implemented in the current legislation?

Are they included in the draft law No 11462 of August 05, 2024?

The issues of duplication of supervisory authorities of the Central Election Commission (CEC) and the National Agency for Corruption Prevention (NACP), insufficient independence, efficiency, and resources of these agencies raise serious concerns. The NACP can be appointed as the only supervisory agency.

Not implemented. According to part 1 of article 94 of the Election Code of Ukraine, the control over election funds is exercised by the CEC, NACP, and the bank where the election fund account is opened.

Included. The draft law suggests that the authorities of control should be transferred to the NACP.

Candidates and parties nominating them can deposit their own money into election funds without limitation. This clause is discriminatory towards independent candidates.

Not implemented. Unlike voluntary contributions coming from individuals and legal entities (part 2, article 69 of the EC of Ukraine), contributions of party's and candidate's own money to the election fund are still unlimited. They are limited only by the election fund size.

Not included. A reduction in the amount of financing with the parties' and candidates' own money can only happen as a side effect of a reduction in the size of the election fund.

To ensure a more competitive environment and limit the influence of cash on campaigns, consideration should be given to taking measures to prevent excessive spending on campaigns, including through the establishment of spending limits. This is also one of the key preliminary recommendations by the ODIHR and Venice Commission to the Government of Ukraine of 2015.

Partially implemented. In accordance with paragraph 3, part 1 of article 86 of the EC of Ukraine, the size of the election fund of a candidate for the post of President of Ukraine is 90 thousand minimum wages (UAH 639 million in 2024). However, this amount lacks proper methodological justification and may be perceived as excessive.

Included. The draft law suggests a formula that allows to determine the maximum size of the election fund based on the amount of expenditures per voter (UAH 20 for presidential elections) and takes inflation into account.

All funds and expenses for campaign finance should be transferred through special accounts of the election fund, which are opened after a candidate is registered. However, no deadline for opening such accounts has been determined. As a result, some candidates were opening them with a significant delay.

Implemented. In accordance with paragraph 2, part 1 of article 93, EC of Ukraine, a candidate for the position of President of Ukraine is obliged to open their election fund accounts no later than on the tenth day after their registration with the CEC. No sanctions are envisaged for failure to comply with this requirement, but its violation will mean that the entire election campaign funding is illegal.

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Some candidates actually started their campaigns before registration, spending significant amounts on television and outdoor advertising. The Election Law stipulates that promotional materials within a campaign must contain information on the customers and publishers of the materials and their circulation. However, political advertising distributed outside the official campaign period is not regulated by this law and does not require any information to be included.

Not implemented. The problem of the so-called “early” campaigning has become a systemic issue in Ukraine, which was regularly highlighted by the Civil Network OPORA, including in the Final observation report on the 2019 regular elections of the President of Ukraine. The discussion is still underway regarding possible ways of addressing the problem.

Not included. This issue requires in-depth discussions and systemic changes in the course of further legislative reform.

The CEC and NACP are obliged to publish results of verification of interim reports within the deadline for final submission of interim reports for the first round and within two days after the deadline for submission of reports for the second round. This significantly limits their ability to exercise effective oversight and provide valuable information to voters.

Not implemented.

Included. It is suggested to introduce a special information and communication system (similar to the POLITDATA register used for political parties reporting) that would promptly publish the data received from banks. The system is intended to significantly streamline the reporting process, as well as ensure state control and public oversight over it.

The analysis of financial reports is, to a large extent. “technical”. No supervisory agency is responsible for, or has investigative authorities to determine cases of circumvention of the transparency provisions of the law, including third-party and in-kind financing or misuse of public resources.

The legal framework for campaign finance could be further strengthened to ensure that third-party campaign funding and in-kind contributions do not violate provisions of the law and reporting requirements. Preventive and proportionate sanctions should be established.

Not implemented. Sanctions for violation of campaign finance rules and relevant reporting are disproportionately soft (Articles 212-15, 212-21 of the Code of Ukraine on Administrative Offenses, Article 159-1 of the Criminal Code of Ukraine), as well as the capacity to investigate such criminal offenses. In addition, there is no effective control over third-party contributions and actual campaign expenditures outside of election funds, as was emphasized by the OPORA Civil Network.

Not included. However, OPORA, together with other stakeholders, is working on amendments to the legislation to address these issues. In addition, given the requirements of the legislation on criminal and administrative liability, such changes should be introduced as a separate draft law.

Elections of People's Deputies of Ukraine

OSCE/ODIHR recommendations

Have they been implemented in the current legislation?

Are they included in the draft law No 11462 of August 05, 2024?

To increase transparency and accountability in campaign finance, the NACP can be designated as a single supervisory agency to monitor compliance with campaign finance rules.

Not implemented. According to part 14 of article 150 of the EC of Ukraine, control over election funds is exercised by the CEC, NACP, and the banks where the parties’ election funds open their accounts.

Included. The draft law suggests that the authorities of control should be transferred to the NACP.

Candidates can use their own money within the established limits of election funds, which allows them to circumvent the law and does not ensure transparency. It is worth considering restrictions for parties and candidates on using their own funds.

Partially implemented. The Election Code of Ukraine sets a cap on the total amount of candidate's own funds, which cannot exceed the maximum amount of individual's contribution (paragraph 4, part 1 of article 152). However, political parties’ own means are limited only by the size of the election fund (para. 5, part 1, article 152), which is 90 thousand minimum wages (UAH 639 million in 2024, according to para. 2, part 1, article 151).

Partially included.

Compared to the current Election Code of Ukraine, the draft law envisages the double amount of candidate's own money (para. 5, part 2, article 152) that they can transfer to the election fund. No additional restrictions are imposed on the party's own money. However, a reduction in the amount of financing with their own money can only happen as a side effect of a reduction in the size of the election fund.

According to interim financial reports, almost all of the candidates' proceeds came from the budgets of political parties without identifying donors. Although this is allowed by the law, it does not ensure transparency of funding before the election day.

Partially implemented. Although the requirement to indicate the donors of party's own money is not stipulated in the election law for reports on the receipt and use of election funds’ money, with the launch of the POLITDATA political party reporting registry, information on donors has become publicly available. Therefore, it will be possible to trace the path of money from a party donor to its election fund.

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Candidates reported delays in receiving registration documents from the CEC, as well as delays from banks due to the cumbersome procedure and lack of awareness thereof among bank staff.

Not implemented. During the in-depth interviews on political party financing, receipt and use of election funds’ money conducted by the OPORA Civil Network in 2021, some respondents noted difficulties with opening and closing accounts.

Not included. This problem has not only legislative but also institutional roots, so amendments to the legislation may not be enough to resolve it.

Several candidates started their campaigns before registration.

Not implemented. The problem of the so-called “early” campaigning has become a systemic issue in Ukraine, which was regularly pointed out by the Civil Network OPORA, including in the Final observation report on the early elections of people's deputies of Ukraine of July 21, 2019. The discussion is still underway regarding possible ways of addressing the problem.

Not included. This issue requires in-depth discussions and systemic changes in the course of further legislative reform.

It is necessary to take effective steps to ensure cooperation of financial institutions and tracing of financial transactions.

Not implemented.

Included. It is suggested to introduce a special information and communication system (similar to the POLITDATA register used for reporting by political parties) that would promptly publish the data received from banks.

It is important that campaign finance regulations do not apply to third parties; their proceeds and expenditures remain unregulated and are not included in the reporting. To increase transparency, the legislation should be amended to stipulate that all campaign-related proceeds and expenses, including those incurred by public associations related to participants in the race, should be paid from election funds during the election.

Not implemented. The election legislation has long stipulated that election campaigning should be financed from the election fund. However, compliance with this provision is alleviated by the fact that there is no effective control over third-party contributions and actual campaign expenditures outside the election funds, as was emphasized by the Civil Network OPORA.

Not included.

It is necessary to amend the law to prescribe effective, justified and deterrent sanctions for violations of campaign finance rules.

Not implemented. The sanctions for violation of campaign finance rules and relevant reporting are disproportionately soft (Articles 212-15, 212-21 of the Code of Ukraine on Administrative Offenses, Article 159-1 of the Criminal Code of Ukraine), as well as the capacity to investigate such criminal offenses. However, OPORA, together with other stakeholders, is working on amendments to the legislation to address these issues.

Not included. However, OPORA, together with other stakeholders, is working on amendments to the legislation to address these issues. In addition, given the requirements of the legislation on criminal and administrative liability, such changes should be introduced as a separate draft law.

Local Elections

OSCE/ODIHR recommendations

Are they included in the draft law No 11462 of August 05, 2024?

In order to increase transparency, strengthen oversight and increase accountability for campaign finance, an independent supervisory agency with regional offices should be authorized to monitor compliance with campaign finance legislation and have sufficient resources to perform this task.

Included. It is suggested to transfer the controlling authorities to the NACP. Although it does not have regional offices, it will be able to exercise more effective control over reports on the receipt and use of election funds’ money by means of introduction of a special information and communication system. In addition, provisions are envisaged allowing the NACP to engage qualified professionals and experts on a voluntary basis, including contracted ones, whose services are to be paid for from the budget funds allocated for preparation and conduct of elections.

There are no restrictions on the use of party's or candidate's own money; various key informants of the ODIHR Limited Election Observation Mission emphasized that this allows for the use of schemes to contribute to election funds and circumvent prohibitions and restrictions on the size of voluntary contributions. As this is not explicitly prohibited by law, it does not promote transparency.

Included. It is suggested that the funds owned by party and candidate's organization should be limited to the amount of two maximum contributions to support a political party (para. 3, 4 part 2, article 215).

The absence of a cap on campaign spending does not provide any safeguards against excessive spending and is contrary to good international practice. The ODIHR and the Council of Europe's Venice Commission have previously recommended to consider establishing spending limits during elections in Ukraine.

Included. A formula has been proposed that allows to determine the maximum size of the election fund for all types of local elections based on the amount of expenditures per voter (except for elections in territorial communities with up to 10,000 voters, where a fixed amount of UAH 75,000 is used) and take inflation into account.

Political parties and candidates noted procedural obstacles arising from banks' delays in opening accounts, which resulted in contributions and expenditures made earlier not being included in the reports or in their inability to immediately launch their campaigns.

Not included. During the in-depth interviews on political party financing, receipt and use of election funds’ money conducted by the OPORA Civil Network in 2021, some respondents noted difficulties with opening and closing accounts. At the same time, this problem has not only legislative but also institutional roots.

The campaign period preceding registration of candidates is not properly regulated. The legislation should be amended to ensure that all types of proceeds and expenses related to the election campaign, including those incurred by organizations related to the participants in the election race, are included in financial statements of election funds, even if they were made before the official start of the election campaign.

Not included. The problem of the so-called “early” campaigning has become a systemic issue in Ukraine, which was regularly pointed out by the Civil Network OPORA, in particular, in the final observation report on the local elections of 2020. This issue requires in-depth discussions and systemic changes in the course of further legislative reform.

Campaign finance legislation does not apply to third parties, leaving such expenditures unregulated and unaccountable. In addition, territorial election commissions were not only unable to but also not required to identify undeclared proceeds and expenditures.

Not included. There is no effective control over third-party contributions and actual campaigning expenditures outside of election funds, which was emphasized by the OPORA Civil Network.