Ukraine - Monitoring report

Date of the monitoring visit: from 20 to 23 May 2012 and from 22 to 23 April 2013
Report adopted on: 31 October 2013

This is the second report on the state of local and regional democracy in Ukraine since 2001. The report highlights the initiatives taken by the government in view of a substantial territorial reform that are considered positive and the fact that local authorities have been represented in this process by their associations through the consultation procedure. It notes, however, that the law limits local authorities’ autonomy of decision and management, that several cities, including the capital, have remained without a mayor for long periods of time, and that the financial autonomy of local authorities remains limited. The report also highlights the lack of a clear division of competences and administrative action between government departments and those of local authorities and, despite strong statements of intent made ​​at the highest level of State for its implementation, the reform does not advance at the desired pace.


It is recommended that the Ukrainian authorities review their legislation in order to remove the restrictions on the powers of local authorities and enable them to fully exercise their competences. The authorities are encouraged to organise, in the shortest possible time, elections in the cities where the post of mayor is vacant. The recommendation underlines the need to strengthen the financial autonomy of local communities and to improve the equalisation system for the purposes of fairness and transparency. It invites the authorities to implement the reform in a timely manner. Finally, the recommendation calls on the Ukrainian authorities to ratify the Additional Protocol to the European Charter of Local Self-Government on the right to participate in the affairs of a local authority (CETS No. 207).

Article ratified Ratified with reservation Non ratified
Compliance Partial compliance Non compliance To be determined
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Article 2
Constitutional and legal foundation for local self government - Article ratified

The principle of local self government shall be recognised in domestic legislation, and where practicable in the constitution.

The principle of local self-government is set out in article 7 of the Constitution: "In Ukraine, local self-government is recognised and guaranteed". This guarantee fosters local self-government. Article 92 paragraph 15 of the Constitution lays down the principle that the "principles of local self-government" shall be determined exclusively by law.


As far as regional self-government is concerned, article 134 of the Constitution stipulates that the Autonomous Republic of Crimea is an "inseparable part" of Ukraine. This article grants the Autonomous Republic a right to exercise the powers listed in its article 137, but within the limits defined by the Constitution. As for regional self-government in general, the Constitution only indirectly recognises it, by listing the territorial units holding the status of an oblast, which include the cities of Kyiv and Sevastopol.


The details of local governance are set out in the Law on local self-government of 21 May 1997, and also in other special laws (see paragraph 42 above). Ukrainian legislation (both constitutional and ordinary) therefore complies with article 2 of the Charter.

Article 3.1
Concept of local self government - Article ratified

Local self-government denotes the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population.

According to article 140 of the Constitution and article 2 of the Law on local self-government of 1997, local self-government is "the genuine capability and right, guaranteed by the State, of a territorial community – ie residents of a village or a voluntary association of residents of several villages, residents of a settlement or of a town/city - to independently resolve issues of a local nature within the limits of the Constitution and the laws of Ukraine".


So self-government must be exercised by territorial authorities, and therefore by citizens, directly or through the intermediary of councils of towns/cities, settlements and villages and their executive bodies, as well as through the councils of rayons or oblasts, representing the common interests of territorial communities of villages, settlements or towns/cities. This results in a fairly complex legal and administrative context, as regards both the content and scope of self-government and the bodies executing the decisions, with the latter being differentiated by the position of the authority concerned within the country's vertical administrative structure.


Regarding content, Ukrainian legislation is, at first sight, more restrictive than article 3 paragraph 1 of the Charter, as it limits autonomous decision-making and management to "matters of local importance", whereas the Charter refers to "a substantial share of public affairs". Furthermore, the basic principles defined in article 4 of the Law on local self-government include the "principle of combining local and national interests" in the exercise of self-government. Here we can see a certain entanglement between the levels of competence and the steering of local action towards the national interest.


It should further be noted that article 24 of the Law on local self-government stipulates that "the legal status of local self-government in Ukraine shall be determined by the Constitution, the present law and other laws, whose provisions must not run contrary to those of the present law". The associations are calling for closer compliance of Ukrainian legislation with the Charter in order to implement the principle of consistent local authority involvement where local affairs are concerned. The rapporteurs note that the legislation partly complies with the Charter on this point and invite the Government to reinforce subsidiarity, for example by granting a power of general competence to local authorities.


The Ukrainian authorities are committed to promoting the development of civil society in Ukraine in order to adapt Ukrainian legislation to European standards. The Decree 342/2013 contains a series of obligations and recommendations to local authorities. The rapporteurs consider that reinforcing civil society activity creates a favourable environment for the rights of citizens within the meaning of Article 3 of the Charter and can improve the democratic process within local communities.

Article 3.2
Concept of local self government - Article ratified

This right shall be exercised by councils or assemblies composed of members freely elected by secret ballot on the basis of direct, equal, universal suffrage, and which may possess executive organs responsible to them. This provision shall in no way affect recourse to assemblies of citizens, referendums or any other form of direct citizen participation where it is permitted by statute.

Consult reply indicated at article 3.1

Article 4.1
Scope of local self government - Article ratified

The basic powers and responsibilities of local authorities shall be prescribed by the constitution or by statute. However, this provision shall not prevent the attribution to local authorities of powers and responsibilities for specific purposes in accordance with the law.

Under Ukrainian legislation, the fundamental powers and responsibilities of the local tier of government are set out in Part II of the 1997 Law on local self-government in Ukraine (Organisation and legal basis). The system for allocating powers is fairly complex. It makes a distinction between the different organs of an authority (council, executive body, mayor) and between its own and delegated powers. Article 26 lists 50 different “powers of councils”. Article 27 thereof (chapter 2) gives cities’ executive bodies eight powers relating to economic and cultural development and to planning and accounts. Article 42 lists at least 20 different powers of mayors.


Although the law assigns an impressive list of powers to local authorities, the rapporteurs were told that a number of national laws assign to State entities (central government departments at local and regional levels or new national agencies) powers which were hitherto wholly or partly the responsibility of local authorities. Some powers have thus been transferred relating to real estate issues, planning and construction, economic development and highways, as well as welfare, health and education. Where buildings in rural areas are concerned (planning permission), central government seems to have a negative influence on local self-government, through technical requirements which do not always allow for the local situation. Central government imposes on local entities in rural areas (for the benefit of private-sector investments) an “accelerated” administrative procedure which allows for neither these entities’ administrative or financial capacity (very often weak and not very effective) nor the demands of urban planning adapted to rural needs. Thus small communities are politically responsible for the “slowing down” of local economic development, without having effective instruments to remedy this. In other sectors concerning, for instance, underground resources and the division of powers relating to water resources, the associations have called for a greater concentration of powers at local/regional level.


These reforms are increasingly restricting the scope of local self-government, curbing local authorities’ territorial responsibility (restriction of local powers over residential areas), budgetary capacity (fines imposed for parking offences on the local authority’s roads go to central government), revenue (concentration of customs revenue at a new national agency) and powers (registration of enterprises, which is currently a matter for local services, is to be transferred to the Ministry of Justice with effect from 1 July 2013). Similarly, there is a decline in local authority offices’ capacity to conduct a comprehensive policy including monitoring the application of spatial planning, urban planning and building policies. On this last point, the responsible committee of the Verhovna Rada seems to want to respect the current division of powers. These different developments might well result in a failure to comply with the provisions of Article 4 (3) of the Charter, which states that public responsibilities shall preferably be exercised by those authorities closest to the citizen. The associations are calling for greater co-operation between central government and local entities in the spheres of education and public health, so as better to meet public needs. The rapporteurs feel sure that a better division of powers to the benefit of local authorities may contribute to greater conformity with the provisions of Article 4 (3) of the Charter.


Following their discussions with various parties during the visit, the rapporteurs note a discrepancy between the legal situation of local self-government in Ukraine and the reality. A number of factors restrict the substance and scope of self-government: a tendency by national institutions to centralise powers; the absence of a stable economic basis at local level; the weakness of local and regional authorities’ financial architecture (see section 4.7: Financial resources of local authorities); the absence of a clear division of powers and administrative activities between central government departments and local and regional authorities, which may give rise to overlapping or duplication in the exercise of powers.


The rapporteurs consider that, in addition to the aforementioned aspects, there are several other factors restricting the full and complete exercise of local self-government by local authorities. 22 years after achieving independence, Ukraine has still not managed to carry out a thorough and consistent reform of local and regional self-government.


For want of sufficient powers and economic and financial resources, most local authorities no longer have the “ability” to which Article 3 of the Charter refers. Furthermore, the stepping up of activity by the responsible ministries has, as the years have gone by, encouraged specialisation and an increase in the administrative role of central government departments at local and regional levels. This has brought about a high level of interference by central government in local authorities’ sphere of action.


In addition, there is an inherent tendency for this effect to increase: as central government’s administrative role and staff numbers increase, so does the number of obstacles impeding reform of local and regional government structures (a reform which could culminate in a transfer of powers to local entities, accompanied by transfers of the corresponding staff and funding). These tendencies are contrary to Articles 20 and 71 (2) of the Law on local self-government in Ukraine, according to which “control by the State should not interfere with the exercise of the exclusive powers of local authorities”. The idea underlying this restriction, although it relates to the question of specific supervision, may be applied more generally in order to curb central government’s attempts to influence the division and exercise of powers to the detriment of local authorities and of their right to self-government.


Where the funding of delegated powers is concerned, the associations have condemned several violations of the principle of concomitant financing, asserting that central government does not cover the full costs of delegated powers. The Association of Ukrainian Cities cited the example of the electrified urban public transport system. It said that there is no requirement in the contract for central government to transfer to local budgets in due time the funds needed to meet the expenditure associated with the provision of transport services at a reduced rate and adequate compensation to cover the difference between the fares (approved by the Ministry of Infrastructure and Ministry of Economic Affairs) and the actual cost of transport services. So if compensation is not paid by the national budget, financial support for electrified urban transport companies will have to be paid solely by municipal councils.


As a result, local self-government is undermined and its scope for action restricted. The trust of the local population is, according to Article 2 (1) of the Law on local self-government in Ukraine, fundamental to any local or regional authority, and therefore to the right to self-government. The population’s trust in the ability of local and regional institutions effectively to manage a significant portion of public affairs has been weakened in Ukraine. The rapporteurs therefore feel certain that local self-government in Ukraine needs, both in the legislative sphere and in terms of political practice, a comprehensive reform in order to achieve a sufficient level of compliance with the provisions of the Charter.


The rapporteurs did not hear any general criticism of the adaptation of the exercise of delegated powers to local conditions, within the meaning of Article 4 (5) of the Charter. Communities with a population of under 5,000, because of their low level of budgetary capacity, apparently find it difficult to fund delegated powers.


With reference to the consultation for which Article 4 (6) of the Charter provides, Article 146 of the Constitution states that “Other issues of the organisation of local self-government, the formation, operation and responsibility of the bodies of local self-government, are determined by law”. Ukraine therefore adopted, on 16 April 2009, Law No. 1275-VI on the associations of local self-government entities, which came into force on 2 June 2009. According to the law, interaction mainly takes the form of “participation in consultations” (Section IV: Principles of the interaction of the associations with public authorities, Article 17, paragraph 2.a and b). The national associations are entitled to be consulted by the President, Supreme Court, Parliament and Cabinet.


The representatives of the national associations note that, in formal terms, consultation functions properly. They also noted an improvement in the procedures for consultation with the new Asarov government. In Resolution No. 1065 of 21 November 2012, the Cabinet amended the government’s rules of procedure. The associations’ representatives are now admitted to Cabinet meetings on an advisory basis, “if the Cabinet is dealing with subjects affecting local authorities’ powers and interests and regional development issues”. The responsible ministries have to involve the associations in the preparation of draft legislation (relevant to their interests). The ministries are required to indicate the extent to which the association’s opinion was taken into account in the draft.


The associations are regularly invited to the meetings of parliamentary committees, but it is very often the case that MPs (including those from opposition parties) do not take their proposals into account. Where the associations’ participation in national coordination structures is concerned, the three associations (Association of District and Regional Authorities, Association of Ukrainian Cities and Association of Village and Settlement Councils) are represented in the “constitutional assembly” set up in 2012 to prepare the constitutional amendments needed with a view to territorial reform. Furthermore, the central executive bodies are required, before setting up advisory or consultation bodies or working groups, to ensure that representatives of the associations will be able to participate.


Where the procedures for preparing fiscal estimates for the purposes of budgetary planning are concerned, the associations are consulted but not included in the administrative process. There are nevertheless some examples, over and above consultation in the strict sense of the term, of co-operation and consultation between the associations and the government. For instance, the Association of Village and Settlement Councils has signed a memorandum with the Ministry of Agriculture concerning the “Village birthplace” project, which is intended to enhance the image of small villages and settlements.


Although Ukrainian legislation places at the disposal of local authorities a set of impressive local powers, the complexity of the legislation, the absence of a clear and traceable vision of the division of powers between the different tiers and the interference that occurs between activities at different levels of governance (particularly through the local and regional activities of central government departments) limit both the scope of Article 4 (2) of the Charter and the full discretion of local authorities to “exercise their initiative”. In the rapporteurs’ view, Ukraine is only partly complying with this provision of the Charter.


Where the right of consultation for which Article 4 (6) of the Charter provides is concerned, the rapporteurs feel that the law does provide for formal procedures in conformity with the Charter, and that, in practice, the mechanisms in place seem to function effectively. The rapporteurs nevertheless noted complaints from local authorities that their viewpoint was frequently not taken into account.

Article 4.2
Scope of local self government - Article ratified

Local authorities shall, within the limits of the law, have full discretion to exercise their initiative with regard to any matter which is not excluded from their competence nor assigned to any other authority.

Consult reply indicated at article 4.1

Article 4.3
Scope of local self government - Article ratified

Public responsibilities shall generally be exercised, in preference, by those authorities which are closest to the citizen. Allocation of responsibility to another authority should weigh up the extent and nature of the task and requirements of efficiency and economy.

Consult reply indicated at article 4.1

Article 4.4
Scope of local self government - Article ratified

Powers given to local authorities shall normally be full and exclusive. They may not be undermined or limited by another, central or regional, authority except as provided for by the law.

Consult reply indicated at article 4.1

Article 4.5
Scope of local self government - Article ratified

Where powers are delegated to them by a central or regional authority, local authorities shall, insofar as possible, be allowed discretion in adapting their exercise to local conditions.


Consult reply indicated at article 4.1

Article 4.6
Scope of local self government - Article ratified

Local authorities shall be consulted, insofar as possible, in due time and in an appropriate way in the planning and decision-making processes for all matters which concern them directly.


Consult reply indicated at article 4.1

Article 5
Protection of local authority boundaries - Article ratified

Changes in local authority boundaries shall not be made without prior consultation of the local communities concerned, possibly by means of a referendum where this is permitted by statute.


Article 85 (29) of the Constitution includes among the powers of the Verhovna Rada “establishing and abolishing districts, establishing and altering the boundaries of districts and cities, assigning inhabited settlements to the category of cities, naming and renaming inhabited localities and districts”. According to Article 93 (13), only the laws of the country, a presidential decree or another administrative act can alter the territorial structure of Ukraine. 


Article 26 (41) of the Law on local self-government in Ukraine gives city councils power to decide on administrative and territorial division. Article 15 (1) of the Law on local self-government in Ukraine allows amalgamations “or other forms of optional unification”. Whether or not to amalgamate administrative territorial units with a common administrative centre is an issue which may be decided solely through a local referendum (Article 6 of the Law on national and local referendums). In this context, it is important for a clear and comprehensible explanation of the need to alter boundaries to be given to the public. Although the laws provide for prior consultation, the need for a reform of territorial structure is obvious. In this respect, the Association of Village and Settlement Councils is in favour of a flexible policy directed to making decisions on amalgamations of communities on a voluntary and not compulsory basis. Whatever the case may be, Article 5 of the Charter requires consultation of the authorities concerned, irrespective of the instrument of amalgamation adopted.


Ukrainian legislation therefore complies with the Article 5 of the Charter.

Article 6.1
Appropriate administrative structures and resources for the tasks of local authorities - Article ratified

Without prejudice to more general statutory provisions, local authorities shall be able to determine their own internal administrative structures in order to adapt them to local needs and ensure effective management.

Cities, villages and settlements have the power to organise the structures of their administrative departments. Furthermore, in pursuance of Article 140 (5) of the Constitution, city councils have power to organise “the administration of city districts”, whereas Article 140 (6) allows village, settlement and city councils to create “popular self-organisation bodies” (Article 14 of the Law on local self-government in Ukraine). Article 26 (5 and 6) of the Law on local self-government in Ukraine does conform to Article 6 of the Charter in that it gives powers to city, village and settlement councils.


More generally, because of serious budgetary problems, the questions of both the structures of local and central government departments and administrative staff at local or regional level remain current. In pursuance of its stand-by arrangement with the IMF, Ukraine has undertaken, where its administrative departments and their staff are concerned, to effect a public administration reform in order to reduce the number of units and make them more efficient, and to adopt restrictions relating to pay rises for central and local government civil servants.


In this context, it should be noted that Ukraine has experienced a fairly large rise in the number of central government civil servants. The chart below shows the increase in staff numbers and their distribution between the different administrative tiers. The increase seems to be due to an expansion of central government’s sector of administration, resulting in particular pressure being brought to bear on the State to rationalise its own administration in one of the following ways: reform to increase the effectiveness and efficiency of administration; a systematic examination and redistribution of powers, based on the devolution and rationalisation experience of civil services in other European countries; reform of the administrative structure of central government at local and regional level; privatisation of the tasks hitherto reserved for central government or, where applicable, local authorities.


Changes in the numbers of civil servants working for central government (upper curve) and local authorities (lower curve): 


While it is planned to delegate powers to local authorities, reforms are needed at the same time to make local administrative offices more efficient, with particular emphasis being placed on staff skills, so that large-scale transfers of staff from one tier to the other do not fail to bring about any improvement in the performance of the administrative machinery. Self-evidently, most local authorities, which are of relatively modest size, are unwilling to embark on such reform, or lack the capacity to do so, without a huge amount of assistance from central government.


The Ukrainian national agency for the civil service is currently working to update civil service staffing levels and working hours. The associations are participating in this work with a view to communication of the figures relating to the local and regional civil service. Where staff status is concerned, the government has withdrawn a draft law concerning “local civil service status”, which had been strongly opposed by the associations. A new draft is to be prepared, bringing the reform of the national civil service more closely into line with that of the local civil service.


On the subject of national and local civil servants’ pay, the chart below gives a few significant indications.


The steep rise in local civil service pay between 2005 and 2008 has slowed down in recent years. Average local civil service pay, which declined in 2009, remains stable. Average pay of civil servants working for central government (on the right) and local authorities (on the left) 109. In formal terms, Ukrainian legislation is in conformity with the provisions of Article 6. In practice, however, given the pressure for rationalisation at local level and the low administrative capacity of small entities (particularly rural ones), authorities’ freedom to determine their own structures within the meaning of Article 6 of the Charter is hardly respected.

Article 6.2
Appropriate administrative structures and resources for the tasks of local authorities - Article ratified

The conditions of service of local government employees shall be such as to permit the recruitment of high-quality staff on the basis of merit and competence; to this end adequate training opportunities, remuneration and career prospects shall be provided.

Consult reply indicated at article 6.1

Article 7.1
Conditions under which responsibilities at local level are exercised - Article ratified

The conditions of office of local elected representatives shall provide for free exercise of their functions.

According to Article 141 (3) of the Constitution, “The status of heads, deputies and executive bodies of a council and their authority, the procedure for their establishment, reorganisation and liquidation, are determined by law”. The details are governed by the Law on the status of members of local councils and the Law on local self-government in Ukraine. A draft law also exists on “mechanisms for the dismissal of councillors”. Where the fight against corruption is concerned, Law No. 320-VI of 7 April 2011 also applies to members of local and regional councils.


Elected members of a council or one of its executive bodies are remunerated as civil servants working on a full-time basis. That remuneration is subject to taxation.


Where the fight against corruption at national level is concerned, the rapporteurs took note of a communication of the Interior Minister dating from 2012 and of the legislative measures taken to remedy this problem. The rapporteurs were told that the dismissal of the mayors of several cities of Ukraine, in the regions of Sumy, Yuzhne, Chernivtsi and Ternopil, had given rise to a discussion in the associations of whether the strengthening of the anti-corruption legislation had not served as a pretext for starting disproportionate legal proceedings against these mayors.


Women’s participation in local political life is more marked in villages and settlements, where 50% of mayors and 70% of councillors are female. The figure in oblasts is around 15 to 20%. In the city of Dnipropetrovsk, for example, 20 of the 120 councillors and 72% of the administrative staff are women.


Overall, Ukrainian legislation complies with the principles laid down in Article 7 of the Charter. That said, where the application of paragraph 1 is concerned, the rapporteurs are concerned about the allegations made to them relating to cases in which mayors had been dismissed, cases considered to be arbitrary, based on application of the Law against corruption. Whether or not such allegations are justified, since such dismissals have not been followed by elections, the office of mayor of the authorities concerned has remained vacant for a very long time (and sometimes for years), and this clearly raises a problem in terms of local democracy, particularly from the viewpoint of Article 7 (1) of the Charter.

Article 7.2
Conditions under which responsibilities at local level are exercised - Article ratified

They shall allow for appropriate financial compensation for expenses incurred in the exercise of the office in question as well as, where appropriate, compensation for loss of earnings or remuneration for work done and corresponding social welfare protection.

Consult reply indicated at article 7.1

Article 7.3
Conditions under which responsibilities at local level are exercised - Article ratified

Any functions and activities which are deemed incompatible with the holding of local elective office shall be determined by statute or fundamental legal principles.

Consult reply indicated at article 7.1

Article 8.1
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of local authorities may only be exercised according to such procedures and in such cases as are provided for by the constitution or by statute.

Article 20 of the Law on local self-government in Ukraine states that “central government supervision of the activities of the bodies and staff of self-governing authorities may be exercised only on the basis, and within the limits, of the powers and procedures for which the Constitution and the laws of Ukraine provide, and may not extend to interference by the bodies or staff of central government authorities in the exercise by self-governing authorities’ bodies of the exclusive powers delegated to those bodies”. Furthermore, Article 35 of the Law on state administration at local level lists several principles of co-operation between central government units and local authorities, which are also relevant to the execution of administrative supervision: interaction; assistance to local officials by central government staff; statutory limitation of the supervision exercised; the taking into consideration of the proposals of the bodies and officials of local units; the giving of advance notice to local authorities in the event that issues important to the local level are to be dealt with by central authorities; the power to participate in discussions on such issues; the power to participate in, and to speak at, meetings of local authorities’ bodies; prohibition of interference in local authorities’ affairs.


The rapporteurs believe that the law, in substance, safeguards compliance with the principles laid down in Article 8 of the Charter in respect of administrative supervision of local authorities. Where practice is concerned, the rapporteurs were informed of allegations related to over-control of local authorities, such as indirect pressure put on elected on local elected representatives by the local state administrations, resulting in the removal of Mayors (for example in Cherkassy). These allegations, if true, are serious cause for concern for the rapporteurs as to the extent of this supervision, which would in these cases not be considered to be proportionate as required by the Charter. .

Article 8.2
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of the activities of the local authorities shall normally aim only at ensuring compliance with the law and with constitutional principles. Administrative supervision may however be exercised with regard to expediency by higher-level authorities in respect of tasks the execution of which is delegated to local authorities.

Consult reply indicated at article 8.1

Article 8.3
Administrative supervision of local authorities' activities - Article ratified

Administrative supervision of local authorities shall be exercised in such a way as to ensure that the intervention of the controlling authority is kept in proportion to the importance of the interests which it is intended to protect.

Consult reply indicated at article 8.1

Article 9.2
Financial resources of local authorities - Article ratified

Local authorities' financial resources shall be commensurate with the responsibilities provided for by the constitution and the law.

Consult reply indicated at article 9.1

Article 9.8
Financial resources of local authorities - Article ratified

For the purpose of borrowing for capital investment, local authorities shall have access to the national capital market within the limits of the law.

Consult reply indicated at article 9.1

Article 9.7
Financial resources of local authorities - Article ratified

As far as possible, grants to local authorities shall not be earmarked for the financing of specific projects. The provision of grants shall not remove the basic freedom of local authorities to exercise policy discretion within their own jurisdiction.

Consult reply indicated at article 9.1

Article 9.6
Financial resources of local authorities - Article ratified

Local authorities shall be consulted, in an appropriate manner, on the way in which redistributed resources are to be allocated to them.

Consult reply indicated at article 9.1

Article 9.5
Financial resources of local authorities - Article ratified

The protection of financially weaker local authorities calls for the institution of financial equalisation procedures or equivalent measures which are designed to correct the effects of the unequal distribution of potential sources of finance and of the financial burden they must support. Such procedures or measures shall not diminish the discretion local authorities may exercise within their own sphere of responsibility.

Consult reply indicated at article 9.1

Article 9.3
Financial resources of local authorities - Article ratified

Part at least of the financial resources of local authorities shall derive from local taxes and charges of which, within the limits of statute, they have the power to determine the rate.

Consult reply indicated at article 9.1

Article 9.1
Financial resources of local authorities - Article ratified

Local authorities shall be entitled, within national economic policy, to adequate financial resources of their own, of which they may dispose freely within the framework of their powers.

Representatives of local and regional authorities presented a number of structural problems which, they believe, characterise the financial architecture of local and regional authorities in Ukraine:


lack of progress in the consolidation of the local financial system since 2001;

complicated budgetary programming at central government level, showing no respect for local and regional authorities’ interests;

structural weakness in local and regional authorities’ financial powers;

lack of proportion between own resources and the powers assigned;

central government levies adversely affecting total revenue from local taxation;

under-financing of the powers delegated by central government;

absence of clear and comprehensible criteria on inter-budgetary relations;

absence of appropriate equalisation at the level of regions (oblasts);

need for stronger interaction/co-operation with the Ministry of Finance.


General situation


Ukrainian local authorities’ budgetary situation very much depends on the general economic and financial situation of the country. In economic terms, local authorities’ budgets are very large: approximately 7.2% of the country’s GDP is generated at local level (excluding inter-budgetary transfers). The Ministry of Finance estimates the total amount of local authorities’ budgets for 2013 to be UAH 220 billion. Total expenditure in the 2013 national budget is UAH 410.66 billion, with a maximum deficit of UAH 50 billion (including Naftogas with UAH 82 billion). In the first six months of 2013, expenditure totalled UAH 112.1 billion, i.e. 13.2% higher than in the same period of 2012.


Nevertheless, two preliminary factors are important: the level of per capita GDP, compared to that of emerging countries (as an indicator of the success or failure of an economic development policy and, therefore, of the need for reforms at every tier of government).


The chances of maintaining or striking a national budgetary balance in the medium term (as an indicator of the need to conduct a policy of budgetary discipline for the years to come in accordance with IMF declarations).


An analysis of the situation in Ukraine in 2011 (in terms of purchasing power), as compared to other countries of eastern Europe on the basis of IMF data, is explicit enough: with a per capita GDP below EUR 10,000, Ukraine ranks below Serbia (approx. EUR 15,000), Croatia (approx. EUR 25,000) and Slovenia (approx. EUR 38,000), and lags far behind the countries of the Eurozone (approx. EUR 45,000). The country’s backwardness in terms of competitiveness and potential growth in productivity, and in terms of the modernisation of administrative structures, is fairly clear to see. We need to know whether there are any signs of a positive development in GDP growth.


The general prospects of economic growth for Ukraine are not very promising, although the government is placing a particular emphasis on reviving industry in the sectors with high technical and scientific potential, and hopes that this policy will have positive effects on the labour market. International observers expect growth to decline in 2013, whereas the national budget for this year is based on GDP growth estimated at 3.4%.


Furthermore, another revealing statistic is the growth in total public debt between 2003 and 2013. Although the cumulative public debt fell slightly in 2011-2012 (around 40% of GDP), the situation is still tense, because the projections in the “stand-by arrangement” with the IMF are not being achieved, making it likely that the government will persist with its current policy, either by increasing revenue or by cutting expenditure, or by doing both. The leeway for a less tight budgetary policy vis-à-vis local and regional authorities is very limited.


The table which appears in Appendix III, based on data from the national statistics office, shows considerable discrepancies between Ukrainian regions in terms of annual income. The figures also show how important equalisation policy will be, if Ukraine decides to take action for regional development and to introduce vertical and horizontal financial equalisation. In this context, the Law on the stimulation of regional development, which was amended in 2011, should be mentioned: according to the Ministry for Regional Development, the purpose of this law is to support the economic, social and ecological development of the regions, drawing on the EU’s regional policy. It is based on a “regions in crisis” concept and lists a number of assistance measures from which these regions may benefit for a period of seven years (with a possible extension for a maximum of another five years). According to the Ministry, no such measures are being implemented in the regions which are in crisis. The figures in this table will therefore need to be checked to gauge the success or failure of the measures intended to balance the country’s economic development.


A draft law on “the foundations of regional policy” is currently being prepared, with the associations’ participation, with a view to implementing the decision taken by the Council of Regions in March 2013. This draft law is to define the main legal, economic, social, ecological, humanitarian and organisational aspects of Ukraine’s regional policy.


Legal foundations


Article 142 of the Constitution defines the material and financial foundations of local self-government. Article 142 (3) states that “The State participates in the formation of revenues of the budget of local self-government and financially supports local self-government. Expenditures of bodies of local self-government, that arise from the decisions of bodies of state power, are compensated by the state.” The arrangements are detailed in Section III of the 1997 Law on local self-government in Ukraine. Article 62 of that law, in particular, contains provisions on the State’s obligation to support local authorities financially, on the system of financial supervision, guarantees of a basic income and the criteria to be met, and on the conditions for State levies and the criteria applicable to local authorities’ “minimum” budgets. In 2011, several amendments came into force. According to Article 66 (1), “local budgets must be sufficient to enable local authorities’ bodies to exercise their statutory powers and to supply services to the public which guarantee a minimum level of social services”. Article 7 (3) of the Budget Code sets down “the principle of the independence of the state budget and local budgets”, while other fundamental provisions are in Section IV, “Inter-budgetary relations”. The Fiscal Code and various other specific laws also contain some relevant provisions.




As to revenue, under the 2011 Tax Code, taxes and other national revenue (Article 9) include corporate taxes, income tax, value added tax (VAT), taxes on public enterprises and the initial registration of vehicles, environmental tax, taxes on the transport of petroleum products and the transit of natural gas and ammonia through Ukraine, petroleum taxes, customs duties and taxes for the exceptional use of water and forestry and agricultural resources.


Under Article 10 of the Code, local taxes and other local revenue include property tax (other than land tax) and unified taxes. Local charges include administrative fees for special commercial activities, parking fees and tourist taxes. A new property tax was due to be introduced on 1 July 2012, which should have improved municipalities’ tax situations. But it is doubtful whether the positive effects expected by the government will materialise. This tax affects only 1% of the buildings and will bring only 100 million UAH into the local budgets, which is not very significant. Moreover, local authorities cannot influence neither the administration nor the rates of the tax. Charges for administrative services are another important source of income. A draft law on the “list of administrative services and the related payments (administrative fees) for their provision” is currently being discussed by the associations and the relevant ministry.


Local budgets are made up therefore of own resources, quotas of related national taxes and state transfers. Own resources also include taxes on the profits of local enterprises, payments by enterprises to local land-owners and income generated by the privatisation of local enterprises or by property management. The most important tax is the income tax (the advertising tax has been abolished recently). With the reforms of 2011, Ukraine is working towards increased tax competition between municipalities, a simplification of the tax system and, in principle, an increase in the size of local authority budgets. Apparently, these measures have not (yet) brought about an increase in local authorities’ own resources although there has been a major change in Kyiv, where the city’s revenues rose by 15.4% between 2011 and 2012. The Ministry of Finance states that local government revenue was stabilised in 2012 through a series of government measures including an expansion in the sources of revenue, which produced a total of UAH 11.3 billion in tax revenues.


Municipalities encounter some difficulties where it comes to managing taxes, as the Ukrainian tax system as a whole is overly complicated. Experts from the World Bank reported that there were 135 different types of tax in Ukraine. During the visit, government representatives repeatedly emphasised the importance of the local authorities’ economic commitment and the rapporteurs are convinced therefore that the state, which has powers in the tax sphere, also has a particular responsibility for establishing a simple, transparent and efficient financial system.


Simplifying the organisation of local taxes and fees would also form part of this new system. Existing structures are so complex that tax collection is scarcely profitable. In response to this problem, in 2011, the state amended the Tax Code. It replaced 12 low-revenue taxes with only five (taxes in the transport, tourism and business sectors and a value added tax on business purchases). However, some local authorities complain that the situation has deteriorated: ten local taxes have been abolished or transferred to the state, including taxes in the transport and procurement sector. According to officials from the city of Ivano-Frankivsk, the new Tax Code, which came into force on 1 January 2011, has caused a loss of revenue of UAH 20 million out of a total of UAH 670 million in budgetary revenue. In addition, subsidies for the education and public health sectors have been reduced by UAH 20 million. At the same time, the single tax was not part of the taxes included in the calculation of transfers (i.e. from the so-called “basket of profits”) and transferred to the development budget. Moreover, payment for land currently goes into the budgets of towns, villages and rural settlements. (Previously 60% went to the towns of local importance, villages and rural settlements and 75% to the towns of regional importance.) Consequently, the loss from market change has been almost compensated, although, for a number of towns, for example for Khmelnytsky, the market change was very significant.


The example of property tax illustrates some of the typical features and problems of local taxation:


The tax base was restricted by a wide range of exceptions and exemptions (according to the Ministry of Finance, in 2003, these exemptions amounted to 66.7% of fiscal capacity).

There is no competition between local authorities owing to the upper limits that are placed on charges.

The administrative costs of tax collection are very high.

The entry into force of the new property tax was put back from 1 January to 1 July 2012. The calculation processes are complex and the entry into force could be deferred still further. Several amendments enhancing local authorities’ tax capacity were introduced through the reform of the Budget Code in 2011.


The association therefore asks for the tax base to be broadened and for there to be fewer exceptions and exemptions so that local authority revenues can be increased.


As to the profits of local enterprises, because the state has consistently limited charges for housing or public services at local level, most local enterprises are in debt and cannot make the profits that would enable them to make the necessary investments.


The local authorities receive revenue from personal income tax. The rate of this tax is, however, limited to 15% and has not changed, so that the revenue it creates for authorities depends on economic activity and, in particular, on wage increases and the employment situation, in other words the number of people liable for tax. Furthermore, a vast network of exemptions limits the base of this tax. Lastly, this tax causes inequality between local authorities because it is collected according to the person’s workplace. It favours “rich” cities, reduces the scope of the tax in rural zones and makes a system of financial equalisation necessary. Rural authorities depend largely on state subsidies because their revenues from this tax are low.


To strengthen the economic base of local communities in the medium term, the rapporteurs propose to increase the production of clean, renewable energy but this possibility has largely been overlooked in Ukraine until now. Geothermal, solar and wind energies, together with biofuels and waste burning, accounted for 0.71% of primary energy production in 2008 whereas nuclear power (28.8%), coal (41.4%), natural gas (22.1%) and oil (5.3%) provided a large share of the country's energy. However, the potential for the incomes of municipalities to be increased by an increase in the production of renewable energies is considerable. It would result among other things in a growth in the direct profits of local energy production companies (which are not subject to financial equalisation), an increase in the incomes of the employees of production plants, the management of resources at local level instead of buying energy from abroad and stabilised incomes for renewable energy producers.


The “underground economy" reflects an undeniable reality in Ukraine and implies a considerable reduction of tax revenues, the government is currently considering the possibility of lowering personal income tax (from 15 to 10%). Such a measure would also have an impact on local authorities, but without a reform of the legislation on pensions, it will have no impact on wages in terms of bringing them closer to those of the "shadow economy”.


The budgetary system


The Ukrainian budgetary system is divided into two levels: the state budget and the local authority budgets (12 086 in total). A vertical inter-budgetary transfer is made between the two levels and the state has inter-budgetary links with 692 budgetary systems at local and regional level.


The main aim of inter-budgetary transfers is to balance local and regional authority budgets. They are calculated according to general criteria on the basis of Cabinet Decree No. 1149 of 8 December 2010. For the calculation, the key indicator is the balancing coefficient which is used to calculate the amount of tax revenue left over for use by regions and communes with surpluses. The previous system did not include any incentive measures, whether aimed at regions in debt, to encourage them to increase their own tax resources (as debts were covered more or less by state transfers) or at regions with surpluses, to encourage them to increase their tax revenues, as surpluses were capped by the state. Despite a few amendments made to the method to calculate tax capacity (Articles 64 and 66 of the 2011 Budget Code), there has been no change in the coefficient system or the high degree of centralisation of inter-budgetary relations.


The total value of inter-budgetary transfers comes to 44% of the state budget, 42% of which goes into the general fund. Special transfers are made with the specific goal of guaranteeing comparable levels of social protection and fostering local and regional economic and social development (particularly in the building and construction sector). Amounts of equalisation are calculated on the basis of individual inhabitants (and consumers of local services) and while attempting to strike a balance between the revenue and expenditure of local and regional authorities. The Budget Code establishes which local revenues are to be included in the inter-budgetary transfer system (Articles 64 and 66 (AR of Crimea)) and which must not be included (Article 69). Through this mechanism the state can increase or reduce the fiscal importance of these revenues for the local authorities which impacts their autonomy within the meaning of Article 9, paragraph 1 of the Charter, by including particular types of local authority revenue in the inter-budgetary relations system or excluding them from it. As a result the system lacks transparency and is relatively complex and unstable, making the local tax system somewhat unpredictable. Furthermore, there is little interest for an authority in setting up a "financially advantageous" tax in the medium term if it must fear that this source of revenue will ultimately be incorporated into the state’s inter-budgetary system.


Some local authorities complain about the criteria for the distribution of transfers, which give the state wide-ranging discretionary powers, or object to the total lack of equalisation criteria. As to the regional development fund (Article 24(1) of the Budget Code), it comprises funds equivalent to 1% of the national budget, which amounted to about UAH 400 billion in 2013. Of this amount, 1% (UAH 4 billion) is earmarked for the fund. Seventy per cent of the fund is allocated according to the number of inhabitants in each region while the other 30% takes account of criteria linked to their economic strength. UAH three billion is allocated for economic and social development. Added to this are various grants (such as UAH 3 billion for national roads). UAH 1.4 billion is reserved to finance projects of national importance. These funds were allocated by the Verhovna Rada’s Budget Committee as follows: 50% was assigned to the regions but eight regions received nothing, three regions received 70% of the allocation and the others shared the remainder. Despite the criteria that were set for the allocation of the funds (Cabinet Decision No. 6565 of 4 July 2012) decisions were taken for political motives. When the funds were allocated to the regional development fund, the allocation criteria were modified in parliament.


The example of the regional development fund illustrates another structural problem with Ukraine’s budget programming. Although the introduction of budget planning based on specific programmes theoretically allows for more accurate allocation of funding, it is necessary to frame the goals to be achieved as precisely as possible. Yet, firstly, there is a very large number of specific programmes – the City of Kyiv alone is supposed to be implementing around thirty – and, secondly, goals are often set according to quantitative not qualitative indicators. There is therefore a risk both that programmes will overlap (for example, in rural areas, forty different programmes, whose timeframes have sometimes partly overlapped, have been adopted since 1991) and that the programmes are not suited to the aims that have been set or, worse still, that there was no justification for the funds to be allocated in the first place.


It is also problematic that the majority of oblasts do not have Strategic Development plans, and therefore cannot define priorities for using the financing from the Fund. As a result, the projects which are submitted for government approval are not the projects designed for resolution of the issues of local development, but for construction of facilities intended for social needs (schools, hospitals).


Another problem has to do with the application of budgetary rules to small local entities. They are also subject to the Budget Code but their situation is very different as they have small populations, a high number of retired inhabitants and, generally, a low tax capacity. Consequently, the authorities in these villages or settlements, particularly those in rural areas, ask for the regulations to be adjusted to their special circumstances. It is to be hoped that the 2011-2015 Programme for the Development of Small Villages (Cabinet Decision No. 1090 of 29 November 2011) will provide a means of strengthening the economic and budgetary situation of this type of authority, knowing that 75% of village councils cannot carry out their responsibilities provided by this law.


Local and regional authority budgets are divided into two components (Article 13 of the Budget Code). The first is a “general” fund, which is used to finance general compulsory spending (basket 1, Articles 88 to 90 and 64 to 66 of the Budget Code) and the second a “special” fund, used to finance specific projects (basket 2, Articles 91, 69 and 71 of the Budget Code).


According to the Ministry of Finance, taken as a whole, 40% of local and regional authority budgets come from state transfers and 60% from own resources (local personal income taxes). Local and regional authorities’ own resources are not included in the equalisation system. On the other hand, according to the information provided by the Association of Ukrainian Cities, local budgets are increasingly dependent on state transfers (43.3% in 2007, 46.7% in 2009, 52.3% in 2011 and 53.6% in 2012).


During its visit, the delegation was told that 98% of first-component expenditure was destined to cover mandatory expenses resulting from the execution of delegated powers and staff wages. The local and regional authorities regret the fact that the state only pays about 80% on average of the necessary transfers to cover mandatory expenses. In their view, the situation could deteriorate still further in 2013, as the state is missing about UAH 30 billion to cover these expenses. The result is a structural deficit of 20% of the first component, which contains the major local revenue of personal income tax (at a maximum rate of 15%).


Local authorities therefore finance both delegated state powers and this 20% deficit through their own resources. About 10% of the first and second components combined are covered by local authority’s own resources. Half (5%) is used to fund delegated powers in the first component of the budget. The second component is financed by local company tax. Authorities have the right to negotiate short- and medium-term loans with the Treasury under conditions set by Article 73 of the Budget Code.


It should be noted that changes to the Budget code were introduced in 2012 in terms of the transfer of some taxes to the second basket of revenues in the oblast budgets and the budget of Autonomous Republic of Crimea. Their amount is estimated to be UAH 1 billion. They will allow to improve the condition of the oblast budgets significantly, primarily in terms of financing the preparation of technical documentation for projects which are financed from the Regional Development Fund and also for co-financing these projects


According to the national audit office, local and regional authorities do not always manage state funds "properly". Sometimes funds are misappropriated in various ways such as the use of funds for different purposes than those outlined in the relevant documents, failure to invest funds properly for want of a precise timetable and the reallocation of unused resources.


With regard to the issue of misappropriation of national funds by local authorities, the national audit office investigated some examples in 2012 which were linked to development funds connected with investments for the 2012 European football championships. The City of Ternopil failed to comply with the funding conditions, and used funds which should have been reserved for investment in infrastructure to finance wages for doctors, teachers and others. In such cases, the legislation provides for penalties against the officials concerned and the possibility of asking for the funds allocated by the state to be reimbursed. The associations emphasise that the inability of local authorities to comply with their budgetary obligations very often stems from the shortcomings of the inter-budgetary system that has been set up.


According to the national audit office it is important for local authorities to use state funds more efficiently. The audit office would be prepared to co-operate with the authorities to improve the application of the rules but to date, no towns have contacted it to ask it for help in improving internal auditing procedures at local level. The audit office has, however, received such requests from ministries. The legislation will have to be amended for there to be any increase in the influence of the audit office on the local and regional authorities.


Opinions differ as to the efficiency of the Treasury. The Deputy Minister of Finance’s views are based on the fact that the Ukrainian Treasury’s system is characterised by daily payments. In his opinion, the system functions and ensures that financial operations take place in real time. For the authorities, the fact that all financial operations pass through the Treasury has a negative effect as the Treasury can delay or prevent payments in order to “manage its cash flow” and hence control the whole procedure. The associations therefore demand that an amendment be made to the legislation to increase the liability of the offices of the Treasury when there are irregularities in financial operations.


There has also been some criticism about a certain lack of efficiency in collecting taxes on the part of the various state authorities, which are accused of being incapable of guaranteeing fair and regular taxation. The city of Ivano-Frankivsk has set up a special committee to deal with tax problems in co-operation with the tax authorities, the employment office and social services. Most of Ukraine’s districts and regions have set up a consultative committee of this type.


As to Ukraine’s budgetary procedure, the local and regional authorities assert that more co-ordination is needed with the relevant government departments. Under Article 75 of the 2011 Budget Code information must be disseminated about the method of calculation, at national level, of funding destined for local budget projects. The authorities have introduced a new method of budgetary programming at local level, which, according to the Ministry of Finance, should make medium-term programming easier and optimise the use of financial resources. This method will be used in 2013 by some 700 Ukrainian municipalities.


With regard to the forms of interaction between the local and central tiers of government in the sphere of public finance, in 2004 the IMF proposed that an intermediate institution should be established to analyse and prepare decisions on the country’s budgetary policy. The rapporteurs take the view that a rule should be introduced into the national budgetary procedure that local authorities should always be consulted first so that they can be more closely involved in estimating tax revenues and so that it is easier to prepare local budgets in the course of the year. This would ease the process of passing on the effects of national tax reform to local budgets. Similarly, the publication of tax data at regional level should be stepped up. The Rapporteurs believe that this kind of co-ordination between the association of local and regional authorities on the one hand and the relevant ministries on the other, under the responsibility of the Ministry of Finance, could significantly improve the co-ordination of the budgetary policies of the two tiers of government. In order to avoid a constant planning of deficit for the cost of implementing the “delegated” competences, it is reasonable to define and formalise the overall size of expenditures for the implementation of such competences in the legislation.


The rapporteurs consider that in practice, in view of the restrictions on the system of inter-budgetary relations, the situation of Ukraine’s local finances does not fully meet the requirements of Article 9 of the Charter as regards the need to have a stable and independent financial basis and sufficient own resources. The rapporteurs believe that strengthening the local authorities’ financial autonomy should form part of Ukraine’s local government reform agenda in order to bring the situation into line with Article 9. The situation in this respect, as the rapporteurs see it, does not make it possible to find that all the paragraphs of this article are being complied with.

Article 9.4
Financial resources of local authorities - Article ratified

The financial systems on which resources available to local authorities are based shall be of a sufficiently diversified and buoyant nature to enable them to keep pace as far as practically possible with the real evolution of the cost of carrying out their tasks.

Consult reply indicated at article 9.1

Article 10.1
Local authorities' right to associate - Article ratified

Local authorities shall be entitled, in exercising their powers, to co-operate and, within the framework of the law, to form consortia with other local authorities in order to carry out tasks of common interest.

One particular demand from the associations relates to the issue of strengthening co-operation between local authorities. Article 142(2) of the Constitution makes provision for local authorities to co-operate within the meaning of Article 10 of the Charter. A draft law on co-operation between local authorities was supposed to strengthen co-operation between municipalities still further (Cabinet Decision No. 169 of 29 February 2012).


The rapporteurs have noted with satisfaction the establishment, in 2002, of the Congress of Local and Regional Authorities of Ukraine by the three national associations that have signed an agreement and adopted a charter with the aim of coordinating the decisions between the associations, the presentation of proposals to the government to strengthen local democracy and the development of contacts with international organisations. The conference consists of three Chambers (villages, towns and regions). Each Chamber is composed of 100 delegates. The plenary session requires a quorum of at least 50% of the delegates from each Chamber. Decisions are taken by a majority of the delegates present. The Congress has a Council made ​​up of 12 representatives of the associations, which manages the daily operations, adopts the agenda of the plenary session, approves the composition of the Chambers and manages the budget. 


The explanations given above in section 4.2 show that there is a well-established official consultation procedure. In addition, the associations regularly send memorandums to the government describing problems they have encountered or commenting on relations between institutions. The rapporteurs have not been able to ascertain whether the government replies to the associations’ comments – and if so, within what timeframe. It should also be noted that the associations have negotiated “co-operation agreements” with a number of relevant ministries for the preparation of draft administrative legislation and regulations.


As to transfrontier co-operation, by way of an example, the city of Ivano-Frankivsk has said that it is a member of twenty municipal twinning schemes. With financial assistance from the EU (EUR 800,000), the city takes part in a transfrontier co-operation project with Romania. Other projects are implemented with the support of the European Bank for Reconstruction and Development (EBRD), with the authorisation of the state, and the Nordic Environment Finance Corporation (NEFCO).


Ukraine therefore complies with Article 10 of the Charter in law and in practice. However, it does still need to be ascertained whether the draft law mentioned above will provide for genuine local self-government in terms of co-operation and the right to associate or if state pressure to increase co-operation between municipalities will undermine or may undermine local authorities’ freedom in their work.

Article 10.2
Local authorities' right to associate - Article ratified

The entitlement of local authorities to belong to an association for the protection and promotion of their common interests and to belong to an international association of local authorities shall be recognised in each State.

Consult reply indicated at article 10.1

Article 10.3
Local authorities' right to associate - Article ratified

Local authorities shall be entitled, under such conditions as may be provided for by the law, to co-operate with their counterparts in other States.

Consult reply indicated at article 10.1

Article 11
Legal protection of local selfgovernment - Article ratified

Local authorities shall have the right of recourse to a judicial remedy in order to secure free exercise of their powers and respect for such principles of local self-government as are enshrined in the constitution or domestic legislation.

Article 71(4) of the Law on Local Self-Government of 1997 provides as follows: “The bodies and staff of self-governing authorities shall be entitled to appeal to the courts to establish the unlawful nature of acts of local bodies with executive powers, other local self-governing authorities, enterprises, institutions and organisations, which infringe the rights of local and regional authorities and undermine the powers of self-governing authorities.”


In 2006 Ukraine set up a system of administrative courts. These courts may declare the acts of the bodies and institutions referred to in Article 71 “which infringe the rights of local and regional authorities and undermine the powers of self-governing authorities and their representatives” unlawful.


The rapporteurs take the view that Ukrainian legislation complies with Article 11 of the Charter, which stipulates that there must be a right of recourse to a judicial remedy. However, the delegation was unable to obtain any information to assess whether and in what specific subject areas the local authorities have successfully appealed to the administrative courts. Nor is it clear whether the Charter has been used as a reference text in this type of judicial proceedings.


For all that, the rapporteurs encourage the government to consider adding a provision to the Constitution, which would give the local and regional authorities the right to appeal to the Constitutional Court against an act “addressed to” or of direct and individual concern to a legal person, in order to improve the legal protection of authorities.


to the Council of Europe


of the European Charter of Local Self-Government


The principle of local self-government is set out in article 7 of the Constitution: "In Ukraine, local self-government is recognised and guaranteed".

30Ratified provision(s)
0Provision(s) with reservation(s)
0 Unratified Provision(s)
9Compliant Provision(s)
13Partially Compliant Articles
2Non-compliant Provision(s)