Criminal Law White-Collar Crimes

Accounts' dating

Legislators have always played first fiddle in criminal practice. Over the past year, they have initiated several campaigns aimed both at minimizing "coercive" pressure exerted on business (so-called Stop Masks-Show Laws No. 1. and No. 2) and on establishing protective measures against the protraction of pre-trial investigation and abuse at its initial stage — the so-called "criminal bloc" of procedural reform. But the "date" of these two campaigns in 2018 has not become a victory that lawmakers can bravely chalk up, since they failed to show the true colors of the law-enforcement system in Ukraine


Demand and continuation

High hopes were put on the legislative changes aimed at minimizing abuses during a search, one of the most popular procedural actions. The law adopted last November and popularly known as the Stop Masks-Show Law, became a kind of a compromise solution in terms of the ongoing dialog between government and business. But the first year of its practical application showed that quite often law-enforcement officers adapted the new rules to their old habits. For example, such an innovation as the compulsory admission of an attorney at any stage of a search is a positive change, but, according to Denis Ovcharov, partner, head of business protection practice at Lavrynovych & Partners Law Firm, the practice shows that nothing prevents the investigator from starting a search without waiting for an attorney:­ he/she takes all necessary actions and allows the presence of an attorney only on the homestretch, i.e., at the stage of drawing up a search record. As for the legislative ban on the seizure of computer equipment, it is also relative. For example, computer equipment can be seized if there is a need for forensic studies of the information contained in it or this equipment was used as means to commit a crime. "Needless to say, the investigative judge is not interested in the reality and reasons for such seizing. And, as practice shows, it is even more difficult to ensure the return of property seized during a search than before", Denis Ovcharov states. Compulsory recording of a search with the help of audio and video equipment was supposed to be another deterrent in this investigative action. "That's all well and good, but the investigator will not allow access to this video recording, citing confidentiality of the pre-trial investigation. Therefore, even if any violations are recorded, they are unlikely to be proved at the stage of pre-trial investigation", our interlocutor says.

Likewise, experts make no mistake about the legislative innovations of autumn 2018. That is, the "sequel" to last year’s law, the so-called Stop Masks-Show Law No. 2, which came into force on November 4, 2018. "The so-called Stop Masks-Show Law No. 2 was the logical continuation of the law with the same name adopted in autumn 2017. At the same time, it was expected that the volume of positive innovations would definitely be wider", Iaroslav Gregirchak, deputy business ombudsman in Ukraine, said. On the one hand, he is positive about a number of legislative innovations. For example, vesting in persons whose rights are limited or violated by the pre-trial investigation, the ability to initiate termination of criminal proceedings if the time limits of a pre-trial investigation provided for in Article 219 of the Criminal Procedure Code were not met, or to apply to the prosecutor or the head of the pre-trial investigation authority with a request to close criminal proceedings opened in connection with circumstances in respect of which there is an unreversed ruling on termination. On the other hand, Iaroslav Gregirchak draws attention to the fact that the published final text of this law lacks some important provisions contained in the text of the draft bill, which was presented in the debating chamber of the Ukrainian Parliament. "Initially, it was suggested that if, among other things, actions or inaction of a particular law-enforcement officer are recognized as being unlawful by the operative part of an investigative judge’s ruling, such ruling shall be transferred to the head of the relevant pre-trial investigation authority within 24 hours for him/her to automatically initiate an official investigation. In addition, it was assumed that if an official investigation ends with the person, whose rights were violated during the pre-trial investigation being brought to disciplinary responsibility, he/she shall have the right to seek compensation from the state for damages caused by the actions or inaction of the law-enforcement officer. At the same time, the provision was retained in the law which stipulates that in the event that the state pays such compensation, it shall have the right to be reimbursed by way of recourse by such law-enforcement officer", Iaroslav Gregirchak explains.



Implementation of the procedural stage of judicial reform was an equally important legislative milestone for criminal law, which, as is well known, threw many rule-making curves in connection with the "criminal bloc". It, in contrast to the main body of innovations of procedural law, which was put into operation on December 15, 2018, came into force on March 15, 2019. This bloc contains many key innovations long expected by lawyers. For example, introduction of a new concept for calculating the time limits of a pre-trial investigation, which shall be linked to the time at which information was entered into the Unified Register of Pre-Trial Investigations (ERPI), rather than to the time of dispatch of the notice of suspicion to a person. This change is aimed at preventing abuses by law-enforcement officers with regard to so-called fact criminal proceedings. And a new option for the defense: ability to appeal against the notice of suspicion after a two-month period from the date of such notice. "Changes made to the Criminal Procedure Code within the framework of procedural reform were aimed at encouraging law-enforcement officers to conduct investigations faster and more efficiently, limiting their ability to unreasonably protract criminal proceedings and balancing the rights of parties at the pre-trial investigation stage", Denis Ovcharov notes and draws attention to certain "BUTs". The main problem is that the listed changes, while solving many problematic issues of the criminal process, do not apply to all criminal proceedings, but only to those that were started after March 15, 2019. "Such a legal clause has resulted in even greater abuse. Now, the new criminal proceedings are intentionally and unreasonably united with old ones so that the aforementioned new rules of the CPC do not apply to them", Denis Ovcharov says.

Describing in general the trends that emerged in 2018 in criminal protection of business, Denis Ovcharov singles out the increasingly frequent facts of law-enforcement complaints made against large taxpayers in connection with the use of outstaffing and outsourcing services. "It is about the outsourcing of personnel, which was allegedly searched for and employed by many customer companies and the fee for such services was transferred to outstaffing companies. This was the basis for an investigation to qualify such legal relations as imaginary. Law-enforcement agencies provide opinions of 'their' experts who 'draw' their findings they need as the main evidence of such allegations", Denis Ovcharov explains, stating that it is almost impossible to challenge such findings in future and to hold the expert accountable.

In 2018, the fight against corruption was among the priorities of the work of representatives of the law-enforcement system. But unlike the previous year, this year has not seen such vigorous activity on the "anti-corruption" field. In my opinion, the trend towards reducing high-profile "corruption" cases can be considered a temporary phenomenon, something like the calm before the storm that will erupt in 2019 when the new Supreme Anti-Corruption Court becomes fully operational.


Through the year

As of the beginning of November 2018, the Business Ombudsman Council received a little more than 750 complaints against the actions of law-enforcement officers, which is 16% of the total number of complaints that we have received since May 2015. If we talk about systemic problems in the relationship of business with law-enforcement agencies, then, based on the practice of our institution, this year we can distinguish the following trends. First, starting from the second quarter, there has been a slight decrease in the number of complaints regarding the unjustified conduct of a pre-trial investigation in criminal proceedings: first and foremost, the issue here is the practice of entering information into the Unified Register of Pre-Trial Investigations on so-called bodies of crimes (corpus delicti), which the lion's share has always belonged to tax evasion cases (Article 212 of the Criminal Code). Secondly, in the third quarter, the number of complaints against inaction by law-enforcement officers fell sharply, which mainly manifested itself in unjustified refusal to open criminal proceedings and ineffectiveness/protraction of the pre-trial investigation. Third, for the fourth quarter in a row, there has been an increase in the number of complaints of abuse during searches and whilst obtaining temporary access to objects and documents. But since such a seizure is, as a rule, authorized by the rulings of investigating judges, we cannot support such complaints. At the same time the Business Ombudsman’s Council has not, since December 2017, received a single complaint against such procedural violations during a search as admission of an attorney, absence of video recording during a search, unlawful seizure of digital data or computer equipment. Here we can see a clear positive effect from the implementation of the so-called "Stop Masks-Show" Law No. 1.




Yaroslav Zeikan (EQUITY)









Solodko & Partners








VB Partners




Vasil Kisil & Partners




Vitaliy Serdyuk (AVER LEX)




Evgeniy Solodko (Solodko & Partners)




Olha Prosyanyuk (AVER LEX)




Denys Bugay (VB Partners)




Vitaliy Kasko (Vasil Kisil & Partners)


ARIO Law Firm








Ilyashev & Partners


S.T. Partners


Sayenko Kharenko


Shkrebets & Partners


Artem Drozdov (AVER LEX)


Igor Glushko (GOLAW)


Kateryna Gupalo (Arzinger)


Igor Fedorenko (AVER LEX)


Kostiantyn Hloba (Barristers)


Yevhen Hrushovets (Ario Law Firm)


Opanas Karlin (ESQUIRES)


Vyacheslav Kohlyakov (Dynasty Law Firm)


Iryna Kuzina (Ilyashev & Partners)


Olexandr Lysak (EQUITY)


Tetiana Lysovets (Sokolovskyi & Partners)


Alexey Meniv (Shkrebets & Partners)


Angelika Moisieieva (Sitsko) (GOLAW)


Taras Poshivanyuk (EQUITY)


Volodymyr Rudnychenko (INTEGRITES)


Sergiy Smirnov (Sayenko Kharenko)


Andriy Sydorenko (Sklіarenko, Sydorenko & Partners)


Oleg Vdovychen (Vdovychen & Partners)