14:48 12.02.2019

Entrepreneurs consider Rada to be leader in corruption - UNIC report

3 min read

Ukraine's Verkhovna Rada is regarded as the most corrupt state institution, according to entrepreneurs, which also said courts, customs, the Cabinet of Ministers, as well as big business are corrupt, according to the findings of a report conducted by UNIC (Ukrainian Network of Integrity and Compliance), titled "Corruption in Ukraine – a business view."
"Entrepreneurs consider small and medium-sized businesses the least corrupt, while big businesses are approaching the middle of the rating. The top position, according to business, is taken by the Verkhovna Rada," Head of the secretariat of Ukrainian Network of Integrity and Compliance (UNIC) Hanna Herasymchuk said, presenting the results of the study at Kyiv's Interfax-Ukraine news agency on Tuesday.
Research conducted by a survey of 305 heads of enterprises and their deputies show that 54% of respondents noted that corruption and dishonest behavior of deputies are "very characteristic," "somewhat characteristic" – 13%, and "sometimes characteristic" – 7%.
The top five most corrupt state bodies and spheres include the courts - 43%, customs – 39%, Cabinet of Ministers – 31% and large businesses – 31%.
"This means that big business somehow merges with pubic authorities, the so-called influential people," a member of the UNIC executive committee, partner of the law firm Arzinger, Lana Sinichkina, said at the press conference.
Moreover, one of the most unfair practices on the part of business is bribing employees of their counterparties or competitors, she said.
"But now business, especially large one, is beginning to understand the cost of internal corruption. It starts calculating how much money its employees take out of business. They order an internal investigation that identifies gaps in business processes that allow money to flow through kickbacks, abuse by their own employees As a rule, we are talking about unfair contracts with counterparties, overpricing for products or services that the company buys or the lack of a necessary tender and the choice of contractors through unfair agreements," Sinichkina said, commenting on the results of the study.
In addition to bribing counterparties or competitors, business representatives called keeping two ledgers and paying backdoor salaries the most common forms of corruption. At the same time, in the opinion of respondents, the most effective are the media, nongovernmental organizations and the National Anti-Corruption Bureau of Ukraine (NABU) in the fight against corruption, the authors of the study said.
Along with this, the survey showed that business does not perceive corruption as a primary obstacle to doing business, UNIC said. Respondents most often called low purchasing power and high taxes as the biggest obstacles: they were mentioned by about 70% of respondents.
"One of the most frequent factors in addressing so-called influential individuals is obtaining licenses. That is, businesses often have to resort to such practices in order to be able to do business. Perhaps our regulatory procedures are not so easy and understandable... They also address influential individuals to resolve conflicts with the same competitors or counterparties," Sinichkina said.
At the same time, 48% of respondents could not clearly answer the question of who most often acts as an influential person, while 21% called them a lawyer, 11% – an employee of an executive body, 10% – a deputy, 9% each – local government employee and tax, administrative or police officer.
"Not all lawyers in the market work in the law area. Often they are "couriers." Of course, this has nothing to do with the legal profession," Sinichkina said.
The study was conducted in November-December 2018 with the support of the United Nations Development Programme in Ukraine and Denmark's Foreign Affairs Ministry.