Ukraine Country Profile

Judicial System

Individual Corruption

The Ukrainian judicial system is identified to be among the most corrupt institutions by public opinion surveys. For instance, according to Transparency International's Global Corruption Barometer 2009, the judiciary is perceived as the most corrupt institution in Ukraine, with more than half of the surveyed households assessing it as 'extremely corrupt'. Similarly, according to the Kyiv International Institute of Sociology 2007 surveys - 'Cost of Corruption for Ukrainian Households' and 'Public Trust of the Judicial System' - the judiciary is found to be the most corrupt government branch, as reported in a 2008 article by Kyiv Post. Furthermore, according to the Freedom House Nations in Transit 2009, no progress was made in 2008 to correct the main shortcomings of the Ukrainian judiciary, which include a lack of public trust in court decisions and the judicial system as a whole, insufficient financing of the court system, and an inefficient and nontransparent process for appointing judges. In contrast, the Freedom House Freedom in the World 2009 emphasises that prior to the Orange Revolution, the judiciary was even more inefficient and subject to corruption. According to the source, corruption problems remain, but to a marginally lesser degree than in the past.

Business Corruption

Reportedly, it has become more common for companies operating in Ukraine to pay bribes in their dealings with the courts. Relatively few companies use court proceedings in order to settle disputes and the courts have a long record of striking down or ignoring contractual provisions that assign legal responsibility for foreign dispute to a foreign court or arbitrator. Companies in general, both foreign and domestic, do not trust the Ukrainian judiciary to be an effective and fair broker in business matters. The courts are notoriously non-transparent. Aggressive minority shareholders have reportedly been able to obtain questionable court decisions allowing them to take control away from majority shareholders.

Enforcement of judicial decisions is managed by the Ministry of Justice's State Enforcement Department, which, according to USAID & MSI 2006, is not effective and allegedly subject to corrupt practices. Corruption is the main reason for many investment disputes. Investment dispute resolution mechanisms are neither fair nor impartial and frequently favour domestic companies and their government allies.

Political Corruption

According to the Freedom House Freedom in the World 2009, there is little respect for the division of power in Ukraine, and all political factions have attempted to manipulate courts, judges, and legal procedures. In a similar vein, the Freedom House Nations in Transit 2009 reports that obvious misuse of the judicial system in political interests was a given in 2008. The source concludes that misuse of the judiciary for political purposes reached a scope of unprecedented proportions in 2008, which in turn may lead to a degradation of state power, the economy, and public administration in Ukraine. GRECO Compliance Report 2009 recommends that Ukraine reforms the judicial system in order to enhance its independence in the long run.

President Yushchenko in 2007 sacked 3 Constitutional Court judges for procedural and ethics violations while the court was determining the legality of his decree to disband parliament before its term ended. Yushchenko has described the fight against corruption in the judiciary as inefficient in 2008. 

Frequency

The World Bank & IFC: Doing Business 2010:
- It takes 30 procedures and 345 days at a cost of 41.5% of the claim to enforce a contract. Both the number of procedures and the time it takes to enforce a claim are lower than regional averages, as opposed to the associated cost which is nearly twice the regional average.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the judiciary a score of 2.3 on a 7-point scale (1 'heavily influenced' and 7 'entirely independent').

Transparency International: Global Corruption Barometer 2009:
- 63% of households surveyed consider the judiciary to be 'extremely corrupt'.

- 25% of households who had contact with the judiciary in 2008 report to have paid a bribe.

- Citizens give the judiciary a score of 5.0 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

The World Bank & IFC: Enterprise Surveys 2008:
- 19% of companies believe the court system is fair, impartial and uncorrupted.

MSI & KIIS: Corruption in Ukraine 2007:
- 72% of the citizens surveyed think that corruption is a problem in the courts.

EBRD & World Bank: BEEPS Ukraine 2005:
- 12% of companies surveyed stated that bribes are frequent in dealing with courts.

- 35% of the companies surveyed reported that the functioning of the judiciary poses a problem for conducting business.

- 51% of companies stated that they were confident that the legal system would uphold property and contract rights.