LAW FIRM DIRECTORY

Criminal Law White-Collar Crimes

EKATERINA GUPALO,

She was born in Kharkiv. She graduated from Kyiv-Mohyla Academy National University in 2009 and obtained her Master of Laws Degree at the University of Salamanca (Spain). She  worked at KM Partners before joining Arzinger in 2015.

She is a partner of Arzinger JSC, lawyer, and heads the practice of protection in criminal proceedings on crimes in entrepreneurship and office activities. Her practical experience includes providing protection and other forms of legal assistance to public figures and their relatives, and to companies with foreign investments.

 

Contact formation

"All contacts with law-enforcement agencies should take place through a lawyer; it is more difficult to correct mistakes made, than to build a defence strategy at the initial stage"
— Kateryna Gupalo, partner at Arzinger, recommends

—  What trends have been outlined in criminal law for the last year, and how does the legal services market react to them?

—  Trends in criminal law have been changed significantly: previously popular criminal proceedings on facts of tax evasion have taken a back seat, and cases on so-called corruption offenses have come to the fore. This trend has become a logical extension of the declared state course to step up counteraction against corruption and depends on the creation of new specialized bodies — the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office, as well as revitalization of the Prosecutor- General's Office of Ukraine in this respect.

There is a conventional wisdom that corruption cases relate only to officials, but it's not the case: private companies also come into the view of law-enforcement officers. We often have to represent clients during the conducting of searches, appeal against decisions on arrest of property, funds on accounts and so on. Oftentimes this process turns into "a game of tag" with the investigator: in case of a positive decision in the appeal, you don't succeed in unlocking a frozen bank account of a client as a new arrest is already imposed. And you should go to  court again.

In this case, with the activities of international companies, applications from  Ukrainian law-enforcement agencies regarding the participation of officials of the foreign companies in corrupt practices may be the catalyst for making internal investigations in terms of the anti-corruption legislation of the USA or Great Britain.

Furthermore, the number of criminal proceedings on instances of fraud has increased significantly in a down economy: beginning petty withfraud at a simple level and finishing with cases for tens of million dollars. Cybercrimes are also a good prospect for the practice.

 

—  Returning to tax offences, please tell us, what is the cause of the reduction of their share in the context of criminal law?

—  The reduction in the number of such criminal proceedings is, in many respects, connected with the Order of the State Fiscal Service of Ukraine No. 633 dated July 18, 2016 according to which hour "H" has been changed for transfer of tax audit materials to law-enforcement agencies to solve the issue of introduction of corresponding data to the Unified Register of Pre-Trial Investigations (URPTI). While earlier it was attached to the end of the administrative appeal procedure, then now — by the time that the data of these tax assessment notices is reconciled, that is at the taxpayer's active position — only in case of a negative decision by a court of appeal and not earlier.

One cannot say that registration of criminal proceedings based on the results of tax audits in URPTI have completely ceased. But even in case of additional tax charges of tens and even hundreds of millions of hryvnias, law-enforcement officers, in general, don't disturb taxpayers until the relevant legally effective court decision. Even investigators confirm in informal conversations that they have come to the conclusion about the inefficiency of registration of criminal proceedings on the basis of the results of each inspection with large additional tax charges: such cases are accumulated, and in any event many of them are eventually closed.

—  What schemes of attacks or squeezes on business are used most commonly today, and is there a universal legal recipe of protection against them?

—  Law-enforcement agencies use a set of tools provided in the Criminal Procedure Code of Ukraine in different selections and with varying intensity. There is no panacea for all occasions, but there are several basic "hygienic minimums" that should be observed. "Forewarned is forearmed" is a phrase that we often say to our clients. For this purpose, we have developed a series of training programs aimed at training the personnel g of the client’s company on how to make contact with law-enforcement agencies and how to behave in this or that situation. Usually, we customize such training for each client individually, previously identifying the risk areas depending on the scope of the client's activities, as well as providing recommendations on improving the security system.

Another recommendation that sounds very simple, but in fact is very important, is that all contacts with law-enforcement agencies should take place through a lawyer; it is more difficult to correct mistakes made, than to build a defence strategy at the initial stage. Based on personal experience, I can say that the majority of the most difficult criminal proceedings began with the fact that the client either made a number of mistakes when managing the process independently, or used unqualified legal assistance. In the context of the general trend of stepping up work on counteracting corruption and increasing in number of criminal proceedings on corruption crimes, we insistently recommend our clients to pay attention to developing an efficient system of an anti-corruption compliance. It is important for such a system to be a really effective mechanism, not just a program on paper. In this regard, our company's protection practices on criminal proceedings and on anti-corruption compliance interact very closely with each other.

—  And is it necessary to create the Supreme Anti-Corruption Court in Ukraine?

—  Creation of the Supreme Anti-Corruption Court is the logical extension of decisions already made in terms of constructing a new system of anti-corruption agencies. The Supreme Anti-Corruption Court is provided in the new Law of Ukraine "On the Judicial System and the Status of Judges". However, a separate law shall be adopted for its functioning. It is expected that the Supreme Anti-Corruption Court will administer justice as a court of first instance and consider the cases under the investigation of the NABU.

 

—  Last year we used to witness major detentions and searches of lawyers. What does this trend show us?

—  Today, a lawyer is often identified with his client. The problem is that the law-enforcement agencies perceive legal assistance by the lawyer to the client as criminal complicity. This approach is totally wrong, since even the most notorious offender has the right to defence! At the same time, making the decision on providing legal assistance to a certain category of clients, usually currently called "toxic", the lawyer should be ready both for negative publications in the press, and to risks of being investigated and/or proceedings being brought against him or her.

But, as they say, every cloud has a silver lining, and this situation has rallied the legal profession. Thus, committees are created to protect the rights of lawyers and guarantees of lawyer activities that are aimed not only at responding to specific cases of illegal intervention in the work of lawyers, but also at establishing effective communication with law-enforcement agencies, and active participation in the development and discussion of the relevant draft laws.

At the same time, the situation may arise that  lawyers using the status not to provide legal assistance, but to cover up illegal activities, will hide themselves under the guise of inadmissibility of violation of the rights and guarantees of lawyer activities. But the lawyer’s "license" should not be identified with impunity and permissiveness! Otherwise, business and society will not respect the institution of the legal profession. Based on personal observations, I can say that one of the reasons that in-house lawyers reacted negative to the introduction of the so-called lawyer monopoly in courts, is the perception of the lawyer as a mediator between the client and the court. At the same time, even if the lawyer has committed a criminal offense, all investigations and proceedings against him should be carried out with strict observance of legal requirements.