Is it Time to Negotiate? Trends in HACC Regarding the Conclusion of Plea Agreements in Corruption Cases

Authors: Pavlo Demchuk, Legal Advisor at Transparency International Ukraine

Andrii Tkachuk, HACC Case Monitoring Lawyer at Transparency International Ukraine

During its existence, the High Anti-Corruption Court has issued more than a hundred verdicts, with more than 30 based on plea agreements. The practice of applying such deals has proven effective in cases of high-level corruption. However, society often perceives them as a form of “buying their way out of prison.”

Let’s review the latest practices of the HACC regarding plea bargains and formulate distinct conclusions.

When is it possible to enter into plea bargains in criminal proceedings?

Overall, this review will focus on the key elements that courts typically assess before approving a plea.

Let’s begin with the fact that the conclusion and approval of a plea agreement are possible only if certain conditions are met.

The first condition is that plea bargains can be negotiated and approved for misdemeanors, minor offenses, and serious crimes.

Plea agreements regarding particularly serious corruption crimes are only possible if the individual assists in exposing other accomplices involved in corruption or in uncovering additional criminal activities. However, the Criminal Procedure Code prohibits entering into a plea agreement with an organizer of a crime (Article 469, Part 4, Paragraph 3 of the Criminal Procedure Code of Ukraine).

The HACC strictly adheres to these requirements and refuses to approve agreements, particularly when the accused served as the organizer. For example, the court refused to approve the agreement with the organizer of the scheme to supply goods of unknown origin to Ukroboronprom. This scheme involved tax evasion and the laundering of property obtained through criminal means.

The second condition is that an agreement can only be concluded with the consent of the victims (if any).

All HACC decisions we analyzed regarding plea bargains in criminal proceedings involving victims also include the victims’ consent to enter into such agreements.

How plea agreements affect resource savings

The facilitation of court proceedings, which can include the conclusion of plea bargains, aligns with international recommendations to eliminate delays in the administration of criminal justice. The practice of the European Court of Human Rights also supports the conclusion of agreements, as it serves as a tool for conserving public and private resources.

In the HACC’s practice, most plea bargains were approved during preparatory court hearings.

For example, the HACC issued a verdict against a lawyer who attempted to bribe the judge of the Kolomyia City District Court of the Ivano-Frankivsk Region during the first session of the preparatory proceedings. In that case, it involved an attempted bribe to prevent the prosecution of a person for driving a vehicle while intoxicated. The approval of the plea bargain meant that the court did not need to conduct lengthy procedures such as collecting evidence and questioning witnesses.

However, in some cases, accused individuals initiate the conclusion of an agreement after a lengthy trial in criminal proceedings. This was the case with the director of Yurai LLC, who misappropriatedhttps://reyestr.court.gov.ua/Review/106730058 funds from a bank loan and subsequently laundered them through other companies. The court had been considering this case for over a year and a half, so at that point, it was primarily about saving time and resources for appellate and cassation reviews of the court’s decision. 

Such cases are not uncommon, and the Criminal Procedure Code does not prohibit entering into plea bargains until the court convenes for deliberations on sentencing. However, under such circumstances, a plea agreement does not fully serve its primary function of saving resources.

It’s also important to emphasize that prosecutors assess the appropriateness of concluding an agreement based on the circumstances outlined in Article 470 of the Criminal Procedure Code of Ukraine. However, the law does not require the prosecutor to explain to the defense the reasons for refusing to enter into a plea bargain. We believe that this point can be improved in the current legislation.

Public interest in concluding plea bargains

Speeding up the consideration of cases is not, in itself, a sufficient reason for approving a plea agreement with the investigation. The court must also assess several other factors, including whether the terms of such an agreement serve the public interest.

When assessing the public interest, it is necessary to balance the accused’s interest in receiving a lighter sentence with society’s expectation of obtaining something from the accused in exchange for this leniency.

HACC judges interpret the meaning of “public interest” in different ways, as it is a subjective concept. This is where their practices diverge: some judges are guided by society’s expectations, considering whether their decision will meet the demands of citizens. Other judges are motivated by the quickest resolution of the case with minimal expenditure of state resources, the need to disclose other criminal offenses, and similar considerations.

This heterogeneity of approaches is a destructive factor in the approval of plea bargains. Therefore, it is necessary to unify judicial practice in this area, as the failure to ensure public interest in most HACC decisions is a key reason for refusing to approve plea agreements with the investigation.

If we sum up the latest practice in cases of top corruption, when deciding whether there is a public interest, the court often takes into account the following circumstances:

• the nature and severity of an incriminated offense;
• the accused’s willingness to cooperate during the pre-trial investigation;
• the accused’s exposure of a greater number of criminal offenses and criminals;
• the role and hierarchical position of the accused in case of complicity;
• stimulating the conclusion of such plea agreements by other persons;
• full or partial compensation of damages by the accused.

Since February 24, 2022, we have observed cases where judges consider volunteering and assistance to the army as circumstances directly related to the well-being, stability, and security of Ukrainian society — thus, aligning with the public interest during wartime conditions.

For example, Poltava Mayor Mamai pledged to transfer UAH 2 million for the needs of the Armed Forces, People’s Deputy Trukhin pledged UAH 6 million, and Samiliak, a representative of the developer Perfect Group who attempted to bribe the then head of the State Inspectorate for Architecture and Urban Planning, Semen Kryvonos, promised to transfer USD 100 thousand to the Army of Drones project.

In our opinion, these circumstances should only be considered as personal characteristics of accused individuals when determining the punishment, as they are not directly related to the information investigated in criminal proceedings.

Observance of human rights in criminal proceedings

This aspect involves two elements: verifying the factual basis for guilt and assessing the voluntariness of the plea bargain.

Some scholars suggest that in the American criminal process, the likelihood of reaching a plea agreement increases when the prosecution’s evidence is weak. In European procedures, plea bargains are often approved when the prosecution’s position is strong. The court, after verifying the prosecution’s evidence, may reduce the punishment of the accused not solely because they admitted guilt, but because their guilt is fully confirmed and they have complied with the terms of the agreement.

The Criminal Procedure Code of Ukraine does not specify whether the court is obligated to thoroughly review all materials of criminal proceedings when approving plea bargains. It also does not require prosecutors to submit pre-trial investigation materials for court review. Thus, based on the practice of the HACC, we observe that a thorough examination of all materials in criminal proceedings does not always occur, and the qualification of a person’s actions is often determined based solely on essential circumstances. 

Under such conditions, when justifying the guilt of persons and the correctness of the qualification of their actions, courts usually refer to the testimony of the accused, the indictment and the plea agreement ( verdict dated 13.10.2022, verdict dated 09.02.2023, verdict dated 02.03.2023, verdict dated 03.03.2023, verdict dated 07.04.2023, verdict dated 13.10.2023 ). And it is much less common to find court references to specific case materials submitted by the parties to confirm the circumstances set forth in their plea bargains ( verdict dated 02.03.2023, ruling dated 02.04.2020).

The problem is exacerbated when a plea agreement is approved at a preliminary hearing, during which the parties cannot present any evidence. The resolution of this issue was proposed by the plenum of the Higher Specialized Court of Ukraine for Civil and Criminal Cases, which advised courts in such cases to require evidence from the parties.

From this perspective, the decision regarding the head of Building Management Company No. 1 of the Yavoriv Apartment and Maintenance Office is significant. In that case, the individual signed a plea agreement with the prosecutor, but the HACC did not approve it because the actual circumstances did not indicate the commission of the crime specified in Article 191, Part 5 of the Criminal Code. Later, the court acquitted that person, a decision which was upheld by the appellate and cassation instances.

Additionally, Article 474 of the Criminal Procedure Code of Ukraine mandates the court to verify whether the conclusion of a plea agreement was entirely voluntary. For this, the court has the right to demand the necessary evidence and even interview people.

The HACC determines the voluntariness of concluding an agreement during the meeting, focusing on the following circumstances:

• verbal confirmation of such voluntariness and provision of truthful incriminating statements about oneself (verdict dated 13.10.2022, verdict dated 02.03.2023);
• lack of complaints about actions, inaction and decisions of the prosecution ( verdict dated 13.10.2022, verdict dated 02.03.2023, verdict dated 02.03.2023, verdict dated 22.02.2023, verdict dated 09.02.2023 );
• understanding of the nature of the accusation, the consent of the accused to the type and extent of punishment, etc.

Unconditional acknowledgment of guilt by the accused also indicates the voluntary nature of a plea agreement. From the practice of the HACC, we observe that the accused in all cases indicated an unconditional admission of guilt, although this was not confirmed in all instances. This was evident in the case of the ex-chair of the State Finance Institution for Innovation, whose version of events in court differed from that stated in the indictment and the plea bargain (ruling dated 11.03.2020).

Additionally, for the HACC, an additional confirmation of voluntariness is the fact that the defense party initiated the conclusion of such an agreement, which is a frequent phenomenon (verdict dated 13.10.2022, verdict dated 02.03.2023, verdict dated 09.02.2023).

It is interesting to note that in almost all recent cases of plea agreements considered by the HACC, none of the accused were in custody at the time of their conclusion. However, there were cases when a plea agreement was concluded with the accused two weeks after their four-day stay in the pre-trial detention center (verdict dated 02.03.2023). The court did not check whether the stay in the pre-trial detention center was not a way to put pressure on the suspect.

Punishment

The parties to a plea bargain must agree on the type and degree of punishment. At the same time, it is necessary to adhere to the general principles of sentencing defined in Article 65 of the Criminal Code of Ukraine. The magic number is 5 years of imprisonment – this is the length of the punishment agreed upon by the parties in most verdicts. However, later the accused were released from serving a probationary sentence under the provisions of Article 75, Part 2 of the Criminal Code of Ukraine.

It should be noted that the possibility of such release in proceedings related to corruption criminal offenses remains debatable. There are varying judicial interpretations regarding whether conditional sentencing and other preferential punishment measures can be applied in such cases. Therefore, one of the cases was referred to the Grand Chamber of the Supreme Court. However, the Grand Chamber of the Supreme Court did not investigate those issues, as it closed the cassation proceedings on formal grounds.

To mitigate the punishment, the parties often cite sincere remorse and admission of guilt, as these mitigating circumstances automatically arise when a plea agreement is signed. As a mitigating factor in most sentences with plea agreements, there is also an active contribution to the detection of a criminal case. 

Among other mitigating circumstances and factors characterizing the person, the court takes into account:

• presence of dependent minor children (verdict dated 07.04.2023) and elderly parents (verdict dated 13.10.2022);
• disability, positive characteristics in their place of residence and work, or the status of combatant (verdict dated 03.03.2023);
• committing a criminal offense due to official dependence (verdict dated 07.04.2023);
• active volunteering (verdict dated 02.03.2023), etc.

It is interesting that in some verdicts, the HACC took into account the absence of aggravating circumstances (verdict dated 13.10.2022), as a mitigating circumstance, although this approach is quite controversial.

There are cases where the parties to a plea bargain attempt to use these mitigating circumstances as a basis for a punishment ‘below the lower limit’. The presence of more than two mitigating circumstances under Article 69 of the Criminal Code of Ukraine serves as the basis for imposing a lighter punishment than that provided in the article’s sanction.

In such cases, the HACC refuses to approve a plea agreement for several reasons.

The first reason is that mitigating circumstances:

• either not supported by evidence, as was the case with the chairman of the board of Creative Group PJSC, who claimed to have a minor child but did not provide any confirmation;
• or they do not reduce the severity of the criminal offense committed by the person, as seen in the case of the organizer of the scheme to supply goods of unknown origin to Ukroboronprom.

The second reason, in some cases, is the ban on reducing the sentence provided for by the Criminal Code of Ukraine. In the mentioned case of the organizer of the scheme to supply goods of unknown origin to Ukroboronprom, a situation arose where he agreed with the prosecutor to be released from the additional penalty of property confiscation, which is not provided for in the Criminal Code of Ukraine.

Compensation for damages

Among corruption crimes, it is quite common to involve offenses such as taking possession of property by abuse of official position (Article 191 of the Criminal Code of Ukraine) and abuse of power or official position (Article 364 of the Criminal Code of Ukraine). In such crimes, damage is always caused, which determines the need for the guilty persons to compensate it.

However, when approving plea agreements, the HACC does not always take a comprehensive approach to the question of compensation. After all, judges do not always assess whether it is legitimate for the accused to compensate for damage in a smaller amount than that which was caused, as proposed by SAPO prosecutors in the relevant agreements.

For example, in the case involving Ukrzaliznytsia, where VAT was overstated by more than UAH 200 million, the SAPO prosecutor agreed that, if the agreement with the accused was approved, a compensation of UAH 2 million would be paid. This amount is a hundred times less than the established amount of damage. Even considering that the crime involved other individuals, this compensation amount cannot even partially restore the damage caused to the state by the crime.

A similar situation arose in the case of the deputy general director of Derzhinformjust, who was involved as an accomplice in the fictitious purchase of TrueConf video conferencing equipment. Such actions caused property damage to the state amounting to nearly UAH 7 million. However, the SAPO prosecutor agreed, and the HACC approved compensation of only UAH 500,000 by the defendant.

In our opinion, when judges approve plea agreements in their verdicts, they should carefully analyze the amount of compensation declared by SAPO prosecutors to assess the possibility of adequately restoring the state of affairs that existed before the crime was committed.

Conclusions

The review of the HACC’s practice regarding the approval of plea agreements enables us to formulate the following separate conclusions.

Plea bargains are an effective tool for convicting individuals involved in corruption cases and for compensating for the damage caused. However, a number of circumstances must be taken into account for a valid conviction.

Such simplification of court proceedings is appropriate:

• when the essential circumstances of the case were confirmed by the proper and admissible evidence base;
• if the parties conducted a thorough assessment of the presence of public interest in the conclusion of a plea agreement;
• provided there are available means to counteract potential abuses by law enforcement agencies regarding pressure on the suspect (accused) to conclude an agreement, as well as the court’s examination of evidence confirming the facts established in the agreement;
• subject to a proper assessment of whether the punishment agreed upon by the parties complies with current legislation.
• For the active and effective use of this tool in the criminal process of Ukraine, it is advisable to:
• oblige prosecutors to provide a reasoned refusal to the request of the defense party to initiate the process of concluding a plea agreement;
• give courts the opportunity to demand the collected materials of pre-trial investigations or to oblige prosecutors to send the materials of the pre-trial investigation to the court together with an indictment and a plea bargain;
• address issues with different court practice regarding the interpretation of Article 75, Part 2 of the Criminal Code of Ukraine by providing clarifications by the plenary session of the Supreme Court;
• the HACC to form a standardization of judicial practice regarding the approval or refusal to approve plea agreements and make it public.

We hope that the trend of using plea bargains in criminal proceedings will continue to grow, saving valuable resources of anti-corruption bodies and enhancing the effectiveness of the fight against corruption. After all, with the effective work of the criminal justice system, we can be confident that instances of corruption will not go unanswered by the state.

This publication was prepared with the financial support of the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.