Only a few years ago, compliance in Ukraine was associated with a Code of Business Conduct adapted from international practice and with mandatory regular employee training required by the head offices of international companies. Today we see compliance as part of the corporate culture and an effective risk management system.
This shift was driven by international businesses that introduced compliance as part of the corporate culture in their Ukrainian subsidiaries, as well as by the development and transformation of the business environment in Ukraine. Ukrainian companies began working actively with partners from other jurisdictions, where stricter requirements for business reputation and transparency had long been in place.
At the same time, compliance in Ukraine is also supported at the institutional level. In particular, the National Agency on Corruption Prevention (the NACP) has been consistently developing integrity in the private sector. A telling example is the first edition of the «Handbook on Building an Organisation of Integrity» published in 2024, and its updated version 2.0 (the Handbook 2.0), published by the NACP in September 2026.
While the first edition laid the practical foundation and set the direction for developing integrity in Ukraine, the updated edition offers private business a number of practical tools, in particular for managing corruption risks. Among them are tools for counterparty checks, handling gifts and business hospitality, and preventing and resolving conflicts of interest. Let us look at the approaches the NACP proposes in each of these areas.
Counterparty checks: assessing risks before cooperation starts
Dealing with counterparties is one of the areas where a company may face legal, reputational, sanctions and corruption risks. These risks may relate not only to the counterparty itself, but also to its beneficial owners, managers and/or related persons. That is why it is important that this process is not just a formal collection of information before cooperation starts and the contract is signed. A question that often comes up in practice is: «What exactly should be checked?» Here the general principles of compliance help, which in Ukraine underlie the Handbook 2.0, recommending that the following areas and documents be checked:
Legal status
- Constituent documents
- Extract from the Unified State Register (EDRPOU)
- Documents on the appointment of the director
- Information on bankruptcy status
This makes it possible to confirm the counterparty's legal status and check the authority of its representatives.
Financial condition
- Financial statements for the last reporting year or quarter
- Certificate of no tax arrears,
- Pending court disputes and enforcement proceedings
We check this area to understand whether the counterparty is financially able to perform its contractual obligations.
Ownership structure
- Information on the ultimate beneficial owners
- A letter confirming no affiliation with other bidders, a partnership declaration (an example is given in the Handbook 2.0).
This helps identify hidden links and potential conflicts of interest.
Corruption and sanctions risks
- Information from the Register of Persons Who Committed Corruption Offences
- Information from the State Sanctions Register
- Information on criminal records of the person responsible for procurement
- An anti-corruption programme for contracts over UAH 500,000 for bidders
- Links with the Russian Federation and the Republic of Belarus
Such a check makes it possible to identify corruption and sanctions risks, possible breaches of anti-corruption law, lack of integrity of the counterparty's responsible persons, and direct or indirect links of the counterparty with the Russian Federation and the Republic of Belarus.
Business reputation and track record
- Information on participation in tenders, disqualifications from tenders and their reasons
- How often contracts were terminated, and liability for anticompetitive concerted actions distorting tender results over the last 3 (three) years
- Possible links with shell companies
- The business reputation of the counterparty's owner (misconduct, involvement in corruption schemes, available information on links with companies showing signs of being fictitious, etc.)
Following the check, we recommend that companies record the sources used, the date of the check, the circumstances identified, the risk assessment and the decision on whether to cooperate with the counterparty.
Receiving gifts and business hospitality rules
Gifts are a pleasant way to express gratitude and respect and to show attention, but in business relations gifts often carry a completely different meaning: they may lead to a conflict of interest, create a sense of obligation, or be intended to influence a decision or obtain undue advantages or benefits. Attention should also be paid to business hospitality, which includes business lunches and dinners, invitations to events, conferences and entertainment, payment of travel and accommodation expenses, and other forms of hospitality in dealings with business partners, clients and other third parties.
That is why it is important to set detailed rules for giving and receiving gifts and business hospitality, the cases and procedure for declining them, and the procedures for declaring them properly.
We recommend introducing an internal gifts and business hospitality policy that provides a clear procedure for employees. For example, when receiving a gift or an offer of business hospitality (in particular an invitation to a business lunch, event or conference, or payment of travel or accommodation), an employee should assess its value, nature, purpose and the circumstances in which it is offered, check that it complies with the company's internal policy and, if necessary, obtain prior approval from their manager or the compliance function.
If a gift or business hospitality is prohibited, exceeds the set limits or may be perceived as an attempt to influence a business decision or create certain obligations, the employee should politely decline it or, if it has already been received, return the gift and report the situation to the responsible person. In this case, what was received must be declared in writing, the circumstances documented, and the employee should follow the recommendations of the manager or the compliance function.
The company decides in its internal policy whether gifts may be given and received and sets the acceptable value limits for gifts and business hospitality, taking into account the parties and the requirements of the Law of Ukraine «On Prevention of Corruption» and current Ukrainian tax law. The nature of the company's business, business practice and the level of corruption risks of the parties should also be considered. Gifts or hospitality whose value exceeds the internal limits must be approved in advance by management or the compliance function. It is advisable to review these limits periodically when the law or the company's internal requirements change. For proper control and documentation, companies may introduce mechanisms for declaring gifts and business hospitality, in particular special electronic registers recording information on gifts and the decisions of authorised persons approving their receipt or giving, or refusing them.
If there are no electronic tools for declaring gifts, the NACP suggests using a special paper declaration in which the employee states their full name and position, the details of the giver or recipient and their relationship with the company, a description of the gift, its approximate market value, and the date and place where the gift or hospitality was received or given. At the same time, the effectiveness of such procedures largely depends on the Tone from the Top principle: the personal example of management and its consistent position on following rules and procedures. We therefore recommend not only formally approving the relevant policy, but also regularly reminding employees of the requirements, especially before holidays, when business gifts and hospitality become more common. Management should show compliance with these rules through its own behaviour and support a culture in which reporting gifts and declining unacceptable offers are normal business practice.
Resolving and preventing conflicts of interest
In the Handbook 2.0, the NACP defines a conflict of interest as a contradiction between an employee's private interests and their official powers that may affect the objectivity or impartiality of their decisions, actions or inaction in performing their duties. A conflict of interest does not necessarily mean that the employee has acted unlawfully. However, even a situation in which an employee's personal or financial interests may affect their objectivity in performing professional duties creates a risk for the company. Such a risk may arise, for example, when an employee takes part in choosing a supplier owned by a relative, makes decisions about a company with which they have financial ties, or uses their position to give advantages to people close to them.
A conflict of interest may stem not only from family relations, but also from friendships or business ties, secondary employment, involvement in another business, a financial interest in the outcome of a transaction, or a personal interest in a particular decision. To prevent such situations, the general principles of compliance supported by the NACP recommend setting out in the company's internal documents a clear procedure for identifying, reporting and resolving conflicts of interest. The following aspects should be regulated:
Circumstances that may indicate a conflict of interest
The company should describe typical situations that require employees' attention, for example: taking part in decisions concerning related persons, a personal interest in choosing a counterparty, secondary employment or other activities that may affect the employee's independence.
Procedure for reporting a conflict of interest
It must be determined to whom an employee should report a potential or actual conflict of interest, in what form and within what time. This obligation should be set out in the Code of Business Conduct or a separate conflict of interest policy.
Persons responsible for assessing the situation
The company should designate a person or function authorised to consider reports, assess risks and propose appropriate measures. Depending on the organisation's structure, this may be a compliance officer, a head of department or another designated responsible person.
Resolution measures
Depending on the nature and level of risk, these may include removing the employee from a particular decision, transferring the relevant powers to another person, restricting access to certain information, introducing additional controls or changing job duties.
Documentation and follow-up
It is important to record not only the fact of the report, but also the results of the assessment, the decision taken, the measures set and their actual implementation.
In practice, the procedure may involve several consecutive stages. First, the employee identifies circumstances that may create a conflict of interest and reports them to the responsible person designated by the company. Next, the compliance function or the manager assesses the nature of the conflict of interest, the employee's powers and the possible impact of this interest on their decisions. Based on the assessment, response measures are determined and communicated to the employee and, if necessary, their direct manager. Until the assessment is complete, the employee should refrain from taking part in the relevant company process. To manage such risks systematically, a company may introduce conflict of interest declarations. For example, employees may fill in a declaration when they are hired, before taking part in a procurement or choosing counterparties, and update the information periodically if circumstances change. Such a declaration may include information on outside employment, business interests, family or other ties with counterparties, and other circumstances that could potentially affect the employee's impartiality.
Particular attention should be paid to keeping a conflict of interest register recording the date the report was received, the substance of the situation, the results of its assessment, the decision taken, the measures set and the persons responsible for implementing them. This allows the company to track recurring risks, monitor the implementation of decisions and confirm that identified conflicts are properly addressed.
At the same time, the effectiveness of such a system depends not only on internal policies and registers, but also on employees' awareness. The company should hold regular training with practical examples, explain how to report a conflict of interest and create an environment in which employees are not afraid to report potential risks. It is important that management also follows the rules and shows that personal ties or interests cannot be grounds for unjustified advantages.
Thus, the company's task is to identify in good time situations that may affect business decisions and to ensure that such situations are resolved properly and with documentary evidence.
To sum up, an effective compliance system and integrity are not just a formality but a shared value that defines the company's culture, its approach to doing business and its relations with partners, and an important part of its business reputation.
Systematic counterparty checks, clear rules on gifts and business hospitality, and proper resolution of conflicts of interest help not only prevent violations, but also build trust between employees, partners and clients. Most importantly, compliance must work not on paper but in everyday business processes, helping the company make sound decisions and protect its business reputation.
