Governance and integrity risks remain significant for businesses operating in Ukraine. Compliance should be treated as an operational requirement, particularly in public procurement, donor funded projects, or regulated sectors. Learn more about Canadian sanctions.
Explore the table to understand risk types and mitigation tools.
| Risk type | Description | Mitigation tool |
|---|---|---|
| Systemic corruption / governance risk | Persistent governance challenges and a wartime environment can increase exposure to bribery, bid-rigging, and improper influence. | Treating compliance as a core operational requirement; implementing an anti-corruption program aligned with the Corruption of Foreign Public Officials Act (CFPOA) and your internal code of conduct. |
| Wartime procurement pressure | Accelerated reconstruction spending and urgent procurement can create opportunities for illicit facilitation demands and irregular tendering. | Strict procurement procedures; enhanced documentation; recurring testing of tender files; use of procurement transparency tools (Prozorro open data, BI dashboards, Dozorro monitoring) to benchmark and flag anomalies. |
| Third-party intermediary misconduct | Agents, customs brokers, distributors, subcontractors, and JV partners present the highest bribery and fraud risk. | Risk-based third-party due diligence; written contracts with audit/termination rights; strict rules on commissions, facilitation payments, and cash; recurrent monitoring. |
| “Willful blindness” / extraterritorial liability under Canada's Corruption of Foreign Public Officials Act (CFPOA) | Canadian firms and individuals can face Canadian criminal liability for corrupt conduct occurring in Ukraine, including via intermediaries. | A default “high-risk” classification of local intermediaries; audit, termination, and record-keeping controls embedded in contracts; documented approvals for high-risk relationships. |
| Weak internal control structure | Without clear ownership, screening, and escalation paths, red flags can be missed or overridden. | Three Lines of Defence Model:
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| Human-rights / responsible business conduct (RBC) non-compliance | Labour, human-rights, and environmental issues can arise in supply chains and subcontracting; complaints mechanisms may apply to Canadian firms abroad. | RBC and human-rights due diligence across supply chains; alignment with Canada-Ukraine Free Trade Agreement (CUFTA) commitments; understanding complaint exposure via the Office of the Canadian Ombudsperson for Responsible Enterprise (CORE). |
| Sanctions exposure (counterparties/UBOs) | Risk of dealing with designated Russian/Belarusian entities through direct counterparties, beneficial owners (UBOs), or subcontractors. | Continuous, documented screening against the Consolidated Canadian Autonomous Sanctions List under the Special Economic Measures Act; use of Ukrainian corporate intelligence tools (YouControl, Opendatabot) to map ownership and ultimate beneficial owner (UBO) structures, politically exposed person (PEP) exposure, litigation history, and tax debt risks; and retention of results in the compliance file. |
| Export controls / dual-use diversion | Transfers of advanced tech (telecoms, cybersecurity, energy grid, drones, etc.) may be controlled and scrutinized; diversion risk is elevated. | Determining classification under the Canadian Export Control List (e.g., Group 5 / dual-use categories); obtaining individual export permits where required; operation of end-use/end-user certificates; conducting strong supply-chain audits to prevent diversion. |
| Improper payments (commissions, facilitation, cash) | Commission structures and cash handling can conceal bribery or kickbacks, especially around logistics and customs. | Clear policies prohibiting facilitation payments; approval controls for commissions and agents; payment controls (traceable methods only); enhanced review of intermediary invoices and commission payments. |
| Extortion / administrative overreach | Illegal bureaucratic pressure, extortion, or systemic blockage can occur; capitulation increases legal and reputational risk. | Use of institutional reporting and dispute pathways: NABU/SAPO whistleblower portals for high-level corruption; NAZK Unified Whistleblower Portal; Business Ombudsman Council (BOC) for regulatory disputes; engage collective-action bodies (CUCC, European Business Association, AmCham Ukraine); maintain a strong written record. |
