EXPERTISE

Ukraine’s National Agency on Corruption Prevention advances protection of rights of compliance officers

February 2017 – Under the Law of Ukraine No. 1700-VII "On Prevention of Corruption", dated 14 October 2014 (the “Law”), legal entities that meet the below-stated criteria must put into effect an anti-corruption programme and appoint a person in charge of its implementation (the "Compliance Officer"):

  • any public/municipal company or business and companies with a state/municipal share of over 50 percent, with an average number of recorded employees in the referred financial year exceeding 50 and gross revenues derived from sales for such period exceeding UAH 70 million (approximately EUR 2.4 million); and
  • all legal entities (irrespective of the form of their ownership) engaged in public procurement, if the cost of procurement exceeds UAH 20 million (approximately EUR 700,000).

The Law and anti-corruption programme establish the legal position of the Compliance Officer as well as the method of his/her appointment and dismissal. To ensure the protection of the Compliance Officer’s rights, the Law provides that he/she can be dismissed only at the request of the CEO of the company or its founders (or participants/shareholders), subject to the consent of the National Agency on Corruption Prevention (the "Agency").

In accordance with the above provisions of the Law, the Agency by its Decision No. 74, dated 7 October 2016 approved the "Procedure for Granting Consent for Dismissal of the Person in Charge of Anti-corruption Programme Implementation by the National Agency for the Prevention of Corruption” (the “Procedure”), which came into effect on 16 December 2016.

The Procedure clarifies the order of granting consent by the Agency required by the Law. In particular, an employer that wishes to terminate an employment agreement with the Compliance Officer on its own initiative must submit a written application to the Agency. The application must include, among other things, substantiation of the circumstances that cause the necessity of the Compliance Officer’s dismissal, together with a set documents described by the Procedure. In cases of non-compliance of the application and documents with the requirements of the Procedure, the Agency may leave it without consideration and return it to the applicant with comments within three working days.

The Agency within ten business days is obliged to verify the legitimacy of the grounds for the dismissal of the Compliance Officer and the lack of grounds for the refusal of his/her dismissal by virtue of application of the whistle-blower protection provisions envisaged by the Law. Consent under the Procedure shall not be applicable in cases of termination of employment initiated by the Compliance Officer himself, or by the mutual consent of the parties.

Of interest, the Procedure provides the right of the employer (CEO or founders (participants/shareholders) to be present at the Agency’s meeting to consider the application to dismiss a Compliance Officer, but a similar right is not provided by the Procedure to the Compliance Officer (employee). Nonetheless, we believe that the adoption of the Procedure is an important step forward in protecting the rights of Compliance Officers in Ukraine.

For further information please contact Iryna Nikolayevska, Counsel, at

e-mail

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