Criminal Law White-Collar Crimes

Haste and trouble

This year, the focus on tightening anti-corruption policy became the determining one for the field of criminal law. Applying the principle "the noble end justifies unpopular means", lawmakers sinned by adopting hasty and sometimes rash and populist decisions, creating the background for abuse on the part of law-enforcement agencies and new criminal risks for business


Effect of a novelty

Criminal law has never been known for its constancy despite the conceptual review of it that was undertaken four years ago, when the Criminal Procedure Code (CPC) of Ukraine came into effect. Moreover, sometimes a regulation-setting adjustment was carried out so spontaneously and in an ad hoc way, that the new rules almost immediately required amending. For example, the same was so when on November 10, 2015, Parliament adopted two Laws on amendment of the CPC and the Criminal Code (CC) of Ukraine, significantly widening the options for seizing of property and special confiscation. Both lawyers and business representatives say that these legislative "products", dressed up under the garb of European integration, have left a bitter aftertaste. They express fear that expanding the tools of these two procedures will lead to abrogation of the institution of the right to private property, as the principles of a bona fide transaction and guarantees of impossibility of illegal deprivation of property are leveled and, in the light of national features of the work of pre-trial investigation authorities, to a significant increase in the squeeze on business.

The negative response to the adopted amendments has served as a catalyst for further regulation-setting searches on this issue. As far back as in February of this year, the Law of Ukraine No. 1019-VIII was adopted. The Law provides for certain safeguards against possible abuse when using the mechanisms of property seizure and special confiscation. For example, the new amendment to the CPC of Ukraine was adopted (Article 642), which gives the definition of "the third party with regard to the property of which the issue of seizure is considered", governs rights and responsibilities of this party when considering the issue of the property seizure owned by such a party. At the same time, the risks, connected, in particular, with introduction of the important amendment to Article 170 of CPC of Ukraine, persist: the property cannot be seized if it is held by a bona fide buyer, except for the seizure of property for the purpose of ensuring the protection of material evidence. This exception from the general  rule of inviolability of the bona fide buyer's property, stipulated by regulations of the Civil Code of Ukraine, created conditions for manipulations with the lifting of such "immunity" when  property was seized.

The so-called "Savchenko law" adopted at the end of November of the previous year, stipulating the procedure for considering pre-trial detention as a detention sentence on the basis of one day of pretrial detention for two days of a detention sentence, became a striking example of the road to hell paved with good legislative intentions supported by notorious political expediency. In just under a year of the operation of the new formula of such detention calculation, approximately 8,500 convicts were released from prison and about a thousand of them became repeat offenders. Such disappointing statistics made legislators reconsider such an approach: in October this year, several draft laws on amendments to Article 72 of the Criminal Code of Ukraine were registered.

One of few innovations of the CPC of Ukraine which, according to the experts, was implemented in practice and demonstrated its effectiveness is the so-called institution of plea bargaining. In the four years of its operation it has become a rather popular option. On average, every year Ukrainian courts receive approximately 20,000 settlement and admission of guilt agreements, most of which (around 70%-80% of cases) they approve.

However, the increase in the number of pre-trial investigations on economic crimes within the issue of funding terrorism is an area of risk for business people. Cases when a special pre-trial investigation (in absentia) is used are becoming more frequent. The peculiarity of the so-called in absentia procedure lies in attracting wide public attention, although, as a result, a lot of criminal proceedings were never transferred from the public spotlight to the judicial one.

Organ concept

New trends emerged this year in the activities of the pre-trial investigation authorities, in the ranks of which the newcomer – the National Anti-Corruption Bureau of Ukraine (NABU) – has made its appearance. Its working debut took place in December of the previous year. In just under a year of its operation, the new agency has demonstrated positive dynamics in carrying out investigations in so-called corruption criminal proceedings. But the hopes that the NABU's activities will destroy existing schemes of abuse were, to a large extent, overshadowed due to the conflict between the new agency and the Prosecutor General's Office of Ukraine (PGOU). The love-hate relationship between the NABU and PGOU were visualized not only in the public spotlight (the top management of these two agencies traded mutual attacks in the media), but also in the practical one: the notorious "case" on investigation into the allegedly illegal tapping of the defendant in one of the criminal proceedings in the NABU building at the beginning of August this year. The fact that some exceptions can be made relatively soon in the rule providing the NABU with carte blanche in the investigation of corruption cases, and thereby guaranteeing it independence from the procedural "influence" of the Prosecutor-General of Ukraine, is of particular concern for lawyers. The corresponding legislative intention has already been officially registered.

2016 gave birth to another agency – the National Bureau of Investigation (NBI), which shall isolate the detection, prevention, solving and investigation of crimes committed by "specific" subjects (principal officers, judges, prosecutors, employees of law-enforcement agencies, etc.). However, the debut of this agency was overshadowed by practical complications arising due to the legislative casuistry. The problems arose when, in the early days of spring this year, in pursuance of the provisions of the Law of Ukraine "On the State Bureau of Investigation", the Government adopted a regulation on the establishment of a corresponding agency and when the courts started to accept and consider petitions from the prosecutor's office investigators in proceedings under the investigation carried out by the SBI in accordance with the new law: the courts refused to accept corresponding procedural documents because these documents were submitted by unauthorized persons. This problem was solved only after the High Specialized Court of Ukraine for Civil and Criminal Cases provided the corresponding explanation.

At the moment, the process to establish the CBI has stopped in its tracks at the recruitment stage. It is clear that when this agency starts to work in full, according to the philosophy of constitutional developments, which come into force on September 30 of this year, the Prosecutor's Office will be deprived of its powers with respect to carrying out pre-trial investigation. The National Agency of Ukraine for Detection and Management of Assets Obtained through Corruption and Other Crimes also finds itself at the recruitment stage. However, the new large-scale project in the judicial system under the name of the "Supreme Anti-Corruption Court" exists at the moment only on  paper: the new judicial law does not contain specific time limits for its establishment or an algorithm for its activities.

Faith in prevention

Probably most of the negative feedback was gathered by the idea to introduce the institution of civil forfeiture, which has been hovered in legislative minds for about a year. Since then, it managed to materialize in five legislative initiatives. The last one (draft No. 5142) was initiated by the Government and has high chances of being implemented. Another issue, as to whether politicians, pursuing the noble goal of returning to Ukraine the "corruption" funds of odious representatives of the previous regime, will be able to turn a blind eye to the possible risks. And the probability of their occurrence is very high, as in practice, the idea of recovery to the state of illegitimate assets before the completion of criminal proceedings can be easily misrepresented and turned into a tool for the divvying up of business, attempts at corporate raiding and political repressions.

At the same time, the adoption of the so-called anti-raiding law aimed at protecting  property rights in the course of registration acts and stepping up administrative and criminal responsibility of the subjects of registration acts, is good news for business. This document entered into force on November 2 of this year. However, the expected widening of tools for countering illegal takeover within criminal legislation did not happen. Legislators confined themselves only to increasing existing financial safeguards, having strengthened liability for the forging of documents, seals, stamps and forms, sale or use of falsified documents, seals and stamps by raising tenfold the maximum level of the fine, which can be applied in the case of the committing of the aforementioned offences commitment: from 100 tax exempt minimum incomes of citizens to 1,000 of them.

Time and practice will show the extent of the effectiveness of these and other new legislative tools.


Criminal Law / White-Collar Crime



Yaroslav ZEYKAN

( Zeykan, Popovych, Holub & Partners)




Volodymyr BOGATYR







( Egorov Puginsky Afanasiev & Partners Ukraine)











Angelika SITSKO




( Solodko & Partners)



(Fomin & Partners)