Ukrainian parliament has supported in general a draft law on transparency in media ownership during its morning session on June 16. The new bill will shed a light on who stands behind Ukrainian media such as television and radio.
Now the draft law is awaited for its second reading.
Amid Russia’s war against Ukraine the issue of media ownership transparency is a question of national security. Strong independent media is also essential tool for Ukraine to conduct its badly needed reforms successfully and explain them to citizens.
“This law will allow and oblige all television and radio organizations to indicate all their owners till the last one during applying for a license in the national council,” said Mykola Kniazhytskiy, a lawmaker from Arseniy Yatsenyuk People’s Front party before the voting. “I ask you to support this law and to show that we now are able to build a new Ukraine.”
The draft law number 1831 submitted by Kniazhytskiy and Vadym Denysenko, a lawmaker from President Petro Poroshenko’s Bloc, was supported in general by 240 votes. It includes amendments to current legislation regarding transparency of media ownership and principles of state policy in the sphere of television and radio.
In Ukraine there is already a law adopted last fall that obliges all companies, not only media organizations, to submit information on their end beneficiary owners to the state registry of legal entities and individual entrepreneurs. This law, which just took an effect recently, did not answer the question of who owns Ukrainian media and most likely won’t give it in future too.
This bill has several shortcomings, such as a relatively small fine for companies for not disclosing their real owners. It has no mechanism to verify the submitted information and no responsibility for giving false information. It leaves room for companies to hide their real owners in offshore countries.
The new draft law obliges all television and radio organizations to submit information about their ownership structure, including their real owners, or end beneficiary owners, to the state regulatory body and to publish it on their web sites.
It sets more significant fine of 25 percent of license fees paid by media organizations if they don’t disclose their real owners in time. While applying for a license, a media organization will also have to submit a tax declaration of its end owners which proofs his or her ownership.
National Council of Television and Radio will become an independent regulatory body that will conduct administrative investigations and verify submitted information. And if a media organization does not comply with the new law, it may be not granted a license or may be deprived of the one it already holds.
This draft law also bans off-shore companies in the corporate structure of TV channels and radio stations. The last move is considered revolutionary, as most Ukrainian media is registered through off-shore jurisdictions, which makes impossible to get official information who owns and controls them and, as a result, influence their coverage.
A research conducted by Olena Loginova and Natalie Sedletska, journalists of the Radio Free/Radio Liberty, under support of the Organized Crime and Corruption Reporting Project, revealed that 43 out of 60 media that they surveyed had offshores in their structures.
To provide more transparency in media ownership is one of Ukraine’s obligation under the Council of Europe.
“This question of transparency in media ownership is one of a key elements towards maturity of democracy,” said Jan Tombinski, head of the European Union delegation to Ukraine during an international conference on media ownership transparency hold at the Radisson Blue Hotel in Kyiv on June 11. “People have a right for access to information and they have to know who is behind it. What is more important in Ukraine is the question concerning mostly TV media. Because a big share of population in Ukraine draws their first information from TV.”
Mathias Huter, an expert of Council of Europe from Austria, said that the European Union leaves it to the member states to regulate their media market, if not to count common standards on transfrontier television. Most European countries don’t have strict demands on disclosure of media owners. But Ukraine, a country which tries to comply with European legislation but has less transparent media environment, may go much beyond obligatory European norms, he said.
A country that does have strict demands on media ownership transparency and financial transparency of media is Georgia. After Russian military aggression in 2008, Georgians realized that to know who owns and finances their media is a part of national security. Moreover, media, which does have trust of the citizens, is an essential instrument to implement reforms.
“We understood that we would not succeed if not to reform our media,” said Lasha Tugushi, a Georgian expert of the Council of Europe. “Media is a main instrument to make reforms, to modernize ourselves and to change our life somehow.”
Georgians started its media reform with a disclosure of real owners, or end beneficiaries, of media organizations and ban of off-shores in their corporate structures. Several years later they added demands to media to disclose their sources of funding.
Ukrainians, caught in war with Russia, only start reforming its media sphere now.
“This is a progressive draft law,” Tugushi said.
Together with other speakers Georgian expert underlined, however, that it will be difficult to identify real owners of media without their financial transparency. The last mean that media have to disclose not only its owners but also its sources of funding.
Viktoria Siumar, head of the parliamentary committee on freedom of speech and informational policy, which worked on the final version of the draft law and recommended the parliament to support it, also agreed that financial transparency is important. The new draft law has almost no requirements on financial transparency as there is a threat that the deputies won’t support it.
Siumar said it will be difficult to adopt this law even in the current version.
“I will be honest, the resistance will be fierce, because nobody wants to bring this information to the surface,” Siumar said. “Nobody wants to re-registry their property. Nobody wants to get rid of offshore companies. This is very convenient and comfortable to pay small taxes, to be completely in a shadow and not to report to anyone. But this situation should be apparently changed.”
Olga Chervakova, Siumar’s deputy, said that till the second reading of this draft law the committee will try to extend some requirements of the ownership transparency to print media and informational agencies as well.
Oksana Lyachynska is a Kyiv Post freelancer and a former staff writer. She can be reached at [email protected].
