International Secretariat

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LYTVYN Volodymyr Head of the Verkhovna Rada of Ukraine Lytvyn.Volodymyr @ rada.gov.ua 5 Hrushevsky, Str. Kyiv-8, Ukraine 01008

Berlin, 21 March 2011 Your Excellency, On March 15, 2011 the Parliament of Ukraine adopted at the first reading Bill №7532 on public procurement. We are concerned because this bill lacks the strong safeguards required to prevent corruption. This is of particular concern given that Ukraine loses an estimated 3 billion Euros annually as a result of inefficient tenders. The bill in its present form violates the main principles for sound public procurement: transparency, integrity, accountability and competition. The new law has been amended so that the majority of tender documentation will not be available to the public. This means business, journalists, NGOs as well as state oversight agencies will not be able to monitor tenders. This lack of transparency means that it will be hard to assess the integrity of the tendering process. It could limit competition and make it difficult to spot issues of conflicts of interest among various bidders. In addition Bill №7532 makes it possible to exclude up to 70 per cent of all contracts – the equivalent of 7 billion Euros annually – from tender legislation in instances where the state owns 50 per cent of commercial or communal enterprise. This has been done ostensibly to simplify the process. Such so-called simplification of procurement procedures weakens public control over the costs and demonstrates unwillingness to reform the process in the interests of society as a whole. Given that Bill №7532 violates the principles of openness, transparency, and competitiveness of public procurement, I urge the Parliament of Ukraine and the Cabinet of Ministers of Ukraine to make every effort to modify the bill before it becomes law. I urge you to work with civil society and international organizations to help develop more transparent legislation that allows citizens to hold their elected officials to account.

Highest regards,

Miklos Marschall Deputy Managing Director

ccs: Viktor Yanukovich, President of Ukraine Mykola Azarov, Prime Minister of Ukraine Jose Manuel Pinto Teixeira, Head of the European Commission to Ukraine Martin Raiser, Director of the World Bank in Ukraine Ake Peterson, Secretary General’s Representative of the Council of Europe in Ukraine n, Drago Kos, Head of the group of Member States of the European Council on fight against Corruption