Regular financial reporting of political parties in Ukraine came to a sudden halt in March 2020, following the decision of parliament to allow parties not to disclose their income and expenditure until the end of the COVID-19 related restrictions. Immediately after the start of the full-scale Russian invasion in February 2022, the party reporting was made impossible due to the introduction of another reporting deferral and the closing of POLITDATA, an electronic register for submitting and publishing party reports. In addition, the National Agency on Corruption Prevention (NACP) was stripped of its mandate to verify party reports during the period of martial law.

The lack of party reporting and NACP’s oversight dealt a significant blow to the transparency of political finance and accountability of Ukrainian political parties. Since 2020, IFES together with its domestic and international partners have put much effort into reinstating these important pillars of political finance reform, including by producing public statements, developing legal changes, building a coalition of support among MPs, and advocating for increased support from the international community. These steps finally paid off in the adoption of draft law 9419-1 in late August. President Zelenskyi signed the law, which put it into action, in September.

According to the law, parties will have up to seven months to submit all overdue reports, and the NACP will restart its verifications of received reports thereafter. Importantly, the POLITDATA register will become fully open to the public starting from January 2024.

Oleksandr Novikov, NACP Chair, hailed the restoration of party reporting as a crucial milestone in combatting oligarchic influence on Ukrainian politics. “Finally, NACP will be able to verify how parties spent millions of public funds, who financed parties, and whether parties got their money from pro-Russian donors. In addition, the increased transparency of political finance is an important pre-requisite for Ukraine’s EU integration and fulfilment of its international obligations. The implementation of the newly adopted law will become an integral element of the complex political finance reform and mitigate the damaging oligarchic influence on political parties. It will help restore the trust of voters in political parties, which traditionally has been very low,” said Novikov.

The resumption of party reporting was met with enthusiasm among investigative journalists as well. “We have been waiting for political party reporting to be restored for over three years. We hope to finally see who funded the local elections in 2020. Funding of political parties and election campaigns is important because, through reports, we can trace how politicians ‘compensate’ for their expenditures when they assume offices,” says Yurii Horbach, the head of the Volyn’ regional media outlet “Power of Truth.”

Journalists also emphasized the importance of their scrutinizing party financial data for the voters. “For us as investigative journalists, party financial reports are a very valuable source of information. For example, these reports show us how parties are spending state funding. They also help journalists and voters determine if parties are being sincere when they claim that they don’t use oligarchic money. The use of straw donors, which we often uncover during investigations based on financial reports, is another common type of deception, and these reports allow us to expose and convey it to the voters,” says Maxym Opanasenko, an investigative journalist at Bigus.info.

This development marks a profound milestone in Ukraine’s path towards transparent and accountable political parties and is a genuine triumph for IFES and its national partners. IFES will work with NACP and civil society to make the process of restoring party reporting smooth for political parties, as well as to ensure sufficient capacity of the NACP to verify the reports.