Gift or bribe: where is the borderline?
A gift means any item (e.g., money, consumer electronics) or intangible assets (e.g., services, discounts) the one provides free of charge or below market value. In our politics, there were cases when a discount for buying an apartment was considered a gift.
Public officials are not allowed to accept gifts in connection with their work. For example, gift from a patient to the head physician for successful treatment is prohibited, and even may be considered as a bribe (unlawful benefit) if there was a prior agreement. Public officials are also prohibited from receiving gifts from their subordinates.
Ukrainian anti-corruption law prohibits public officials accepting a gift (excluding gifts from close relatives) which costs more than 1921 UAH. If several gifts are provided during a year, their total value should not exceed 4,014 UAH. These amounts vary as the minimum wage changes. It is important to note that receiving a more expensive gift by a public official does not mean that it will be automatically considered a bribe; accepting such prohibited gift, though, entails sanctions for the public official. More on such sanctions below.
The gift must also meet generally accepted notions of hospitality. For example, modest bouquet of flowers is considered an acceptable gift, which is not the case with the strong alcohol.
Who will be punished?
Violation of the rules for receiving gifts entails responsibility only for public officials. For example, if an official flies at someone’s expense in a business class, he or she risks paying a fine of 3,500 UAH and dismissal.
If within a year after the first violation the public official again breaches the rules for accepting gifts (for example, accept a bottle of expensive cognac), then the official risks being dismissed and pay a fine of 7,000 UAH. Furthermore, the cognac will be confiscated and public official will be forbidden to hold managerial positions all year round. Information about the official will be entered into the open register of corruption offenders.
At the same time, there is no responsibility entailed for the person providing the prohibited gift. However, if a gift is given for some public official’s action in return, it is likely that both will be prosecuted for bribery. Sanctions may be tough – up to imprisonment.
Judicial practice indicates a decrease in the number of violations regarding gifts: in 2016, there were 78 decisions regarding the unlawful receipt of gifts, in 2017 - 49, in 2018 - 45.
Why people provide prohibited gifts?
Any gift that is provided for "resolving the issue" is a masked bribe. There may be different reasons for bribing. The results of the survey of the Ukrainian Network of Integrity and Compliance (UNIC) “How businesses percept corruption” points to interesting details. Most respondents believe that entities operating in Ukraine use their government ties to gain business advantages.
In addition, respondents believe that entrepreneurs give bribes to resolve their issues or at the request from public official. Respondents also believe that businessmen often use intermediaries to resolve their problems.
At the same time, the vast majority of respondents answered that they did not give bribes, mainly because of their principles. According to the respondents, the most corrupt authorities are the parliament (54% of respondents), courts and prosecutors (43%), and customs (39%).
What to do if a public official requests a gift or bribe?
If a public official or an intermediary proposes you to "resolve the issue" for a reward, you should contact the authorities responsible for the investigation of these offences. In Ukraine, these are the National Anti-Corruption Bureau of Ukraine (NABU) and the National Police of Ukraine.
You should contact NABU if certain categories of officials (e.g., ministers, deputies, judges, prosecutors), or representatives of other states are being involved, or if the case involves a large amount (one million UAH or more). Prior to contacting NABU, the Bureau recommends to make sure that the data on a possible corruption offence can be verified.
Everyone can file a report personally at the Bureau’s reception, call the hotline (0-800-503-200) on weekdays during working hours, submit information via mail or fill in the e-form on the website.
By the way, the new anti-corruption law allows anonymous reports of corruption. Offence reported anonymously will be considered, though, only if the report refers the specific person and the data can be verified.
Individuals reporting corruption offenses are protected, in different cases, by the Security Service of Ukraine, National Police or a special branch of the NABU. Security measures include security protection, surveillance, and even changing appearance and documents.
How to prove the extortion?
Although voice recording will help convincing enforcement authorities that the case is serious, it will not be accepted by the court as evidence of the violation. Therefore, it is necessary to cooperate with authorities who will collect evidence in accordance with established procedure.
If you are an entrepreneur and the official investigation stalled, you can address the matter to the Business Ombudsman Council.
How does the world eradicate unlawful gifts and bribes?
The best way to fight unlawful gifts and bribes are effective law enforcement and judicial systems. The results of different researches indicate three main reasons for corruption and bribery: low salaries, bureaucracy and an imperfect legislation.
Different countries have different approaches to deal with these issues. Holland authorities, for example, incentivize public officials’ ethical behaviour with monetary rewards. In Singapore, the salaries of high-ranking officials are almost the same as top managers’ in private companies. Meanwhile, in South Korea, bureaucratic procedures are constantly being simplified so that citizens have minimal contact with officials responsible for licensing or other regulatory approvals. Moreover, the tracking system “OPEN” has been operating in the country for almost two decades, allowing people to file a statement about corruption on the Internet and track the progress.
The role of business is also growing. Following world trends, companies promote ethical behaviour and intolerance to corruption among employees. In the long run, unethical business practices are inefficient and pose risks to the business’ future, so more and more companies unite to effectively counter unfair practices.
First version of this port appeared here.
Igor is an associate at the global law firm. His practice focuses on anti-corruption compliance in the Life Sciences and other areas. Igor assists major international companies with development and implementation of anti-corruption policies and advises on various compliance matters.
He also chairs Anti-Corruption Working Group at the American Chamber of Commerce in Ukraine. As part of his activities there Igor participates in the development of Ukrainian anti-corruption legislation and assessment of its impact on all types of businesses.
Ganna Gerasymchuk has more than 10 years of experience in advising international businesses on legal matters in Ukraine. From 2011 until 2015, Ganna worked as a Corporate lawyer and a Compliance officer at a global construction company. She was responsible for implementing Corporate Code of Conduct and for educating employees on anticorruption policy behavior.
Before joining UNIC in February 2017 as a Head of Secretariat, Ganna held a position of Head of Legal at international tyre manufacturer and already actively promoted the idea of business integrity and ethics in Ukraine. Ganna holds a Master degree in law from the Kyiv National Economic University, named after Vadym Hetman.