Do national defence and security institutions have beneficial ownership of commercial businesses? If so, how transparent are details of the operations and finances of such businesses?
31a. Extent of commercial ventures
Ukraine score: 0/100
Defence institutions have ownership (or are believed to have ownership) of commercial businesses that are major enterprises, or constitute more than 10% of the defence budget.
Defence and security institutions have some ownership of commercial businesses, but totaling less than 10% of the defence budget.
Defence and security institutions do not own commercial businesses of any significant scale. (Equivalent to 1% of the defence budget or less.)
Defence institutions and the MoD, in particular , own enterprises. According to the publicly available list , as of April 2018, of the enterprises owned by the state, the MoD runs 118 enterprises (including those in the temporarily occupied Crimea). However, there is no publicly available data on the revenues, operations and expenditures of those enterprises, and thus it is not possible to evaluate their equivalent to the defence budget.
Another big problem in Ukraine is the engagement of the top-officials in defence and security sector in private business. One of the brightest scandals in this sphere is the private enterprises of the first deputy of the Secretary of National Security and Defence, Oleh Gladkovskiy, and the Head of the Parliament’s Committee of National Security and Defence, Sergiy Pashynskiy .
1. “CMU Resolution No. 671, Section 4, subsection 104, On the Regulation on the Ministry of Defence of Ukraine,” Verkhovna Rada of Ukraine, November 26, 2014, accessed April 16, 2018, http://zakon2.rada.gov.ua/laws/show/671-2014-%D0%BF.
2. “Business entities,” State Property Fund of Ukraine, accessed April 16, 2018, https://bit.ly/2Qtckue.
3. “Annual Report: On the state of respect for human and citizen’s rights and freedoms in the Ukraine,” Ombudsman of Ukraine, 2017, www.ombudsman.gov.ua/files/Dopovidi/Dopovid_2017.pdf.
Ukraine score: 50/100
These businesses are not publicly declared and are wholly non-transparent.
Only some businesses are publicly declared. Details of their operations and finances are not fully transparent.
These businesses are publicly declared, though details of their operations and finances are not transparent.
All or most ownership of commercial businesses is publicly declared. Either operations and finances are transparent, but not both.
Any ownership of commercial businesses is publicly declared, with details of their operations and finances being transparent, fully disclosed, and with standards of governance equivalent to publicly owned commercial enterprises.
The ownership of commercial businesses is publicly declared and the MoD runs 118 enterprises (including those on the temporarily occupied Crimea) as of April 2018 . However, there is no publicly available data on the operations and finances of the enterprises. There is also no evidence of the MoD state-owned enterprises being run according to the governance standards like the OECD Guidelines on Corporate Governance of State-Owned Enterprises. It is worth noting that in 2016 the government made significant progress and liquidated nearly 500 enterprises and developed a new list of enterprises to be corporatized . Later, the Ministry of Economy and UkrOboronProm said they were going to corporatize also some of the defence enterprises . However, there is no evidence that this will happen with MoD enterprises.
1. “Business entities,” State Property Fund of Ukraine, accessed April 16, 2018, https://bit.ly/2Qtckue.
2. “The Government approved a draft law ‘On the List of Objects of State Owned Property not Subject for Privatization’,” CMU, accessed April 16, 2018, https://www.kmu.gov.ua/ua/news/248944357.
3. “Key state owned military enterprises will turn into corporations this year,” Radio Svoboda, accessed April 16, 2018, https://www.radiosvoboda.org/a/28273827.html.
Compare scores by country
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|Country||31a. Extent of commercial ventures||31b. Transparency|
|Albania||50 / 100||50 / 100|
|Algeria||0 / 100||25 / 100|
|Angola||0 / 100||25 / 100|
|Argentina||50 / 100||50 / 100|
|Armenia||75 / 100||50 / 100|
|Australia||100 / 100||NA|
|Azerbaijan||100 / 100||NA|
|Bahrain||100 / 100||NA|
|Bangladesh||NEI||25 / 100|
|Belgium||100 / 100||NA|
|Bosnia and Herzegovina||100 / 100||NA|
|Botswana||100 / 100||NA|
|Brazil||100 / 100||75 / 100|
|Burkina Faso||0 / 100||0 / 100|
|Cameroon||0 / 100||0 / 100|
|Canada||75 / 100||50 / 100|
|Chile||50 / 100||50 / 100|
|China||NEI||25 / 100|
|Colombia||50 / 100||100 / 100|
|Cote d'Ivoire||75 / 100||0 / 100|
|Denmark||100 / 100||NA|
|Egypt||0 / 100||25 / 100|
|Estonia||100 / 100||NA|
|Finland||100 / 100||NA|
|France||100 / 100||NA|
|Germany||100 / 100||75 / 100|
|Ghana||0 / 100||0 / 100|
|Greece||100 / 100||NA|
|Hungary||50 / 100||50 / 100|
|India||25 / 100||75 / 100|
|Indonesia||100 / 100||25 / 100|
|Iran||0 / 100||50 / 100|
|Iraq||25 / 100||0 / 100|
|Israel||100 / 100||NA|
|Italy||100 / 100||75 / 100|
|Japan||100 / 100||NA|
|Jordan||0 / 100||50 / 100|
|Kenya||50 / 100||50 / 100|
|Kosovo||100 / 100||NA|
|Kuwait||100 / 100||0 / 100|
|Latvia||100 / 100||100 / 100|
|Lebanon||50 / 100||50 / 100|
|Lithuania||100 / 100||100 / 100|
|Malaysia||0 / 100||75 / 100|
|Mali||50 / 100||50 / 100|
|Mexico||50 / 100||50 / 100|
|Montenegro||50 / 100||50 / 100|
|Morocco||100 / 100||NA|
|Myanmar||0 / 100||0 / 100|
|Netherlands||100 / 100||NA|
|New Zealand||100 / 100||100 / 100|
|Niger||100 / 100||NA|
|Nigeria||50 / 100||50 / 100|
|North Macedonia||100 / 100||100 / 100|
|Norway||100 / 100||100 / 100|
|Oman||0 / 100||0 / 100|
|Palestine||100 / 100||NA|
|Philippines||100 / 100||NA|
|Poland||100 / 100||NA|
|Portugal||50 / 100||50 / 100|
|Qatar||0 / 100||25 / 100|
|Russia||NEI||50 / 100|
|Saudi Arabia||50 / 100||50 / 100|
|Serbia||50 / 100||50 / 100|
|Singapore||100 / 100||NA|
|South Africa||100 / 100||NA|
|South Korea||100 / 100||NA|
|South Sudan||25 / 100||0 / 100|
|Spain||100 / 100||NA|
|Sudan||0 / 100||25 / 100|
|Sweden||100 / 100||100 / 100|
|Switzerland||0 / 100||100 / 100|
|Taiwan||100 / 100||NA|
|Tanzania||0 / 100||25 / 100|
|Thailand||50 / 100||0 / 100|
|Tunisia||100 / 100||NA|
|Turkey||50 / 100||50 / 100|
|Uganda||50 / 100||75 / 100|
|Ukraine||0 / 100||50 / 100|
|United Arab Emirates||100 / 100||0 / 100|
|United Kingdom||75 / 100||100 / 100|
|United States||100 / 100||NA|
|Venezuela||0 / 100||50 / 100|
|Zimbabwe||0 / 100||0 / 100|