Local council deputies are declarants and have the right to engage in activities as sole proprietors, for example, farming. This type of entrepreneurship involves the ownership or use of a significant number of assets. These include land plots, equipment, premises for storing crops, trading, etc. In addition, such activities are often associated with financial obligations (leasing, loans, etc.) and one-time expenses in large amounts.
The results of financial control measures carried out by the National Agency on Corruption Prevention (NACP) show that common mistakes are:
- failure to declare leased land plots and non-residential premises, agricultural machinery, other vehicles, rights to which were acquired by the declarant or a family member as a sole proprietor;
- failure to declare valuable movable property – attachments and other equipment for agricultural machinery, GPS systems, drones (non-military), etc.;
- failure to declare or incorrect declaration of income, including indicating net profit instead of gross income;
- failure to declare financial obligations or one-time expenses exceeding 50 subsistence minimums for able-bodied persons as of January 1 of the reporting year.
Details – with specific examples.
The Khotyn District Court of Chernivtsi Oblast, including based on NACP materials, found a deputy of the Dnistrovskyi District Council of Chernivtsi Oblast guilty of declaring false information (Article 366-2 of the Criminal Code of Ukraine) in the amount of over UAH 24.2 million. Being the head of a farm, the declarant failed to declare more than 280 real estate objects, including land plots and non-residential premises owned or leased by him.
The court imposed a fine of UAH 85,000 with disqualification from holding positions related to exercising representative authority in state or local self-government bodies for three years. The verdict has not yet entered into legal force.
Another example is the results of a full check of the declarations of a deputy of the Novopokrovska settlement council for 2022–2023. NACP established the declaration of false information regarding his assets as a sole proprietor.
The official "forgot" to declare 28 land plots he leased, an agricultural building – a covered threshing floor, a warehouse (hangar), a 40-ton weighbridge, and a Belarus-892 wheeled tractor. In total, he declared false information amounting to over UAH 13.5 million. The National Police of Ukraine (NPU) initiated a pre-trial investigation based on the facts established by the NACP.
In addition, similar violations were established during a full audit of the 2023 declaration of another deputy of the Novopokrovska settlement council of Dnipro district, Dnipropetrovsk oblast.
The official "forgot" to declare a complex of buildings with a total area of 507.6 m², partially owned by him, and two leased land plots. He also failed to declare a DAF FT CF 85.410 truck, a CLAAS LEXION 550 combine harvester, an EO-2629 excavator, and a 2PTS-4 trailer, all owned by him. Moreover, the official declared only UAH 1.5 million in income from entrepreneurial activity instead of UAH 5 million. In total, he declared false information amounting to over UAH 8.6 million. The NPU launched a pre-trial investigation based on the facts established by the NACP.
It should be recalled that, according to the general rules, the declaration must include information about:
- real estate objects, unfinished construction, vehicles, other valuable movable property acquired by the declarant and/or family member for entrepreneurial activity, i.e., agreements concluded on behalf of the declarant or their family member as a sole proprietor;
- valuable movable property worth more than 100 subsistence minimums;
- the amount of gross income, not net profit, received by the declarant/family member as a sole proprietor;
- banks/financial institutions where the declarant/family member as a sole proprietor has accounts;
- financial obligations of the declarant/family member taken to ensure entrepreneurial activity, if they exceed 50 subsistence minimums;
- one-time expenses as a sole proprietor exceeding 50 subsistence minimums for acquiring objects subject to declaration, which must always be reflected in sections 3 "Real estate", 4 "Unfinished construction", 5 "Valuable movable property (excluding vehicles)", 6 "Vehicles", 7 "Securities", 8 "Corporate rights", 10 "Intangible assets" of the declaration, regardless of the purpose of acquiring such objects (for business or personal/family needs). If there are data on the total amount of expenses incurred during the reporting period by the declarant as a sole proprietor (especially if on the general taxation system), it is recommended to reflect them in the declaration (as one sum). More details – in NACP’s Clarifications.
We draw attention to the fact that if the declarant or family member is a member of a farm enterprise (FE) registered as a legal entity, information about such FE must be reflected in section 8 "Corporate rights", and if the person is also a beneficiary (controller) of this company – additionally in section 9 of the declaration. At the same time, these sections do not indicate that the declarant or family member is a sole proprietor.
Note. According to Article 62 of the Constitution of Ukraine, a person is considered innocent of committing a crime until proven guilty in court and established by a conviction.
