On August 23, the Verkhovna Rada of Ukraine adopted the Draft Law (DL) 9419-1, which was registered in July by MPs from all factions, in the second and final reading by 309 votes in favor. The law resumes regular financial reporting of political parties and restores the mandate of the National Agency on Corruption Prevention (NACP) to verify these reports.

The adoption of this law is a crucial milestone in restoring political finance transparency and integrity and an essential prerequisite for the continued democratic progress in Ukraine. It is a step in the right direction in light of Ukraine’s aspirations to join the European Union (EU), as political finance reform was one of the main conditions for visa liberalization between Ukraine and the EU under the EU Association Agreement.

Between March 2020 and August2023, political parties were exempted from their legal obligation to submit quarterly financial reports to the NACP due to COVID-19 quarantine restrictions. After the full-scale invasion, regular party reporting was postponed again, this time for the duration of martial law.

Throughout the period when reporting was halted, IFES Ukraine continuously urged the Verkhovna Rada to resume political party reporting, echoing similar previous calls by civil society. Others, including the G7 Ambassadors, actively engaged in advocating for restoring political party reporting. In June 2023, ambassadors stressed that Ukraine should prioritize efforts to reinstate political party financing, among other areas. Its adoption today is a crucial step for advancing political finance reform in Ukraine and an essential anti-corruption measure to ensure transparency with money in politics and increased public accountability of political parties.

The law will enter into force 90 days after it is signed by the President – which is expected to happen soon, given the law’s importance for Ukraine’s European aspirations. Parliamentary parties will have further 90 days to submit all overdue reports (non-parliamentary parties will have 120 days). The NACP should then verify all received reports within a 90-day period.

Another important and positive change brought on by the law is that it lowers the threshold for public funding of political parties from five to three percent of the vote. From the next electoral cycle, political parties that receive at least three percent of voter support in parliamentary elections will be eligible for public funding to cover their statutory activities. Thus, also political parties that do not clear the five percent for parliamentary representation will hereafter qualify for public funding. This should improve a level playing field by providing more equal access to resources for smaller parties as well.

IFES Ukraine welcomes the Rada’s decision and stands ready to assist the NACP and political parties in resuming the process of party reporting in a smooth manner.