A new system for asset identification and admission

The reform introduces a fundamentally new approach to asset handling. The ARMA will now conduct a comprehensive identification of each asset — a set of measures to determine its characteristics and specifics in order to assess the possibility of effective management and preservation of economic value. This process is initiated at the prosecutor’s request in accordance with Article 18-1 of the ARMA Law.

Based on the results of the identification, the Agency must prepare an opinion on the possibility of effective asset management within 10 working days, extendable to 20 days in complex cases. Identification also determines whether an asset is “simple” or “complex” — a classification that will later affect the procedure for selecting a manager.

The introduction of the identification process is crucial, as it ensures that ARMA will no longer be assigned assets such as a “box of women’s dresses” or “three rolls of toilet paper (new),” as happened in the past.

In addition, during identification, asset pools may be formed — meaning a set of two or more interrelated assets transferred to ARMA within the same criminal proceeding and intended to function together. Pools may include: a single property complex (e.g., a hotel with its equipment); a complex object (a car with spare parts); a principal item and its accessory (a house with a garage); or functionally related assets (a restaurant with kitchen equipment, furniture, and a delivery vehicle). This means property that is meant to operate as a single complex will not have to be separated, ensuring more efficient management.

Moreover, forming asset pools in ARMA’s reporting will prevent manipulations like those seen with movable property from Mezhyhiria. At that time, the number of assets under management was artificially inflated because individual wine bottles, furniture, and documents without standalone economic value were counted separately.

Assets will be accepted for management on the basis of a ruling by an investigating judge or with the owner’s consent, with mandatory signing of transfer and acceptance certificates within 10 working days. After further amendments to the Criminal Procedure Code of Ukraine, this will help resolve delays in transferring property under ARMA’s responsibility.

If property has not been appraised, or if more than six months have passed since the last appraisal, the ARMA must initiate a new appraisal within three working days after the signing of the transfer and acceptance certificate. The costs of appraisal and review of appraisal reports are covered by the state budget, with subsequent reimbursement by the asset manager.

Assigning ARMA responsibility for safeguarding assets is indeed significant, as until now the legislation did not clearly define who was in charge of seized property already transferred to the Agency but not yet assigned to a manager. These gaps were highlighted, in particular, during parliamentary temporary investigative committee hearings on the sale of 42,000 tons of Russian ammonia from Togliattiazot and Mindobryva, as well as 2,200 tons of potash from Belaruskali.

At the same time, ARMA may now:

• Hire professional storage companies – conclude contracts with firms that have the necessary equipment, qualified staff, and experience handling specific types of property.
• Organize security – procure services from security companies to protect assets from theft, damage, or other threats.
• Inspect asset condition – conduct regular inventories to ensure that assets are properly stored and not deteriorating.
• Engage experts – consult with specialists regarding unique or complex asset types.
• Take additional measures – perform any other actions required to ensure the proper preservation of specific assets.

Importantly, the ARMA will select storage companies through the public procurement system, meaning transparent competitions where all interested providers may submit proposals.

In addition, for assets that will be transferred to managers, the ARMA will prepare a management plan — a detailed document drafted for each asset before transfer.

The plan must include a full description of the property (what it is, where it is located, its value, whether it has debts); a financial forecast with projected expenses and revenues; a risk analysis; recommendations on the most effective management approach. This will provide potential managers with far more information about the property, which will no longer be hidden under a “restricted use only” label.

The main goal of this stage is to ensure thoughtful, rather than chaotic, management with clear objectives and calculations. The plan may be adjusted if new circumstances arise that affect management effectiveness. This allows for continuous monitoring of results and ensures the maximum preservation and increase of the value of seized assets until a final court decision is rendered.

A differentiated approach to selecting managers

Before the adoption of the ARMA Law, managers were selected under public procurement procedures regulated by the Agency itself. These procedures were complex and not fully suited to the task, since when selecting a manager the state does not spend money, it earns it. In addition, the processes were excessively lengthy: in some cases, ARMA took more than 1.5 years to prepare even to announce a competition.

The reform, therefore, introduces a division of assets into simple and complex categories, with corresponding procedures for selecting managers:

• Simple assets include cash, single movable or immovable items that can be transferred for use without complex arrangements.
• Complex assets include single property complexes, assets requiring business operations, corporate shares, and assets valued at more than 20,000 subsistence minimums.

For simple assets, the selection of a manager will now take place through the electronic procurement system in two stages:

1.  preliminary qualification of participants;
2.  selection of the manager for a simple asset(s) through an auction among pre-qualified participants.

The requirements for managers of simple assets include: at least three years of proven experience providing property rental or brokerage services; no ties to the owner of the seized asset or to suspects in the case; no connections to the aggressor state; no sanctions imposed by Ukraine or international organizations; no involvement in terrorist activities; clean reputation of management without corruption or economic crime convictions.

Applications for qualification are accepted on an ongoing basis, and the list of qualified participants must be published by the ARMA.

To determine the manager for a specific asset, the ARMA must conduct an auction among the participants who have successfully passed qualification by the date of the second-stage announcement. The winning criterion will be the lowest management fee.

Importantly, the ARMA is obliged to reject a proposal if the participant is linked to the owner of the seized asset, a suspect or accused in the related criminal case, or a defendant in asset recovery proceedings seeking confiscation of unjustified assets to the state (i.e., a related person).

For complex assets, the procedure includes the following stages:

1. announcement of the selection procedure for participants;
2. submission of documents for participation in the selection of a complex asset manager through the electronic procurement system;
3. disclosure of participants’ offers and their assessment for compliance with qualification requirements;
4. determination of the manager of a complex asset through an auction among participants who meet the qualification requirements.

Only business entities registered in accordance with the law may participate in the selection procedure. Additional restrictions apply: entities that are competitors or dependent on the entity whose assets are being transferred for management may not participate. The Agency may also set further requirements regarding experience, material and technical capacity, permits, or licenses.

Managers of complex assets will be selected by a special commission consisting of eight members — four from ARMA and one each from the Business Ombudsman, the National Securities and Stock Market Commission, the Ministry of Economy, and the Ministry of Justice. The Cabinet of Ministers will approve its composition and rules of procedure.

The reform also introduces the option of procuring the services of a “manager of last resort.” If, after repeated attempts, no candidates are found to manage simple or complex assets, the ARMA may procure management services through standard public procurement procedures under the Law on Public Procurement. Companies that previously refused to conclude a management contract as a result of earlier procedures may not participate in such tenders.

Announcements for the selection of asset managers must include a full description of the property (name, type, value, technical condition, location, encumbrances, special storage conditions, photos, and videos), a draft management plan, transfer conditions with a draft contract and procedure for determining the manager’s remuneration, qualification requirements with a list of required documents, evaluation criteria and mathematical formula for calculating price, the minimum bid step in the auction, submission procedure and deadlines (at least 10 working days for simple assets and 20 working days for complex assets), and other details specified by the relevant selection rules.

A critical breakthrough at the legislative level concerns the management of corporate rights of companies linked to the aggressor state. From now on, a manager of corporate rights (such as shares or stakes in authorized capital) is not required to coordinate actions with the owner if the court has established that the asset belongs to the Russian Federation, the Republic of Belarus, their citizens, or legal entities associated with the aggressor. This significantly changes the framework for managing corporate rights and allows such assets to be effectively used without obstruction from their owners.

Expanded grounds for exceptional asset management

The reform significantly broadens the grounds for transferring seized assets into the management of state-owned enterprises without the standard manager selection procedures.

In addition to existing grounds, such as risks to energy supply or defense industry operations, new ones have been added. Exceptional management now applies if there is a risk of disruption to maritime or inland water transport enterprises necessary to ensure agricultural exports.

Exceptional management may also be applied at the request of military command authorities. Assets may be transferred to state institutions for the temporary accommodation of servicemembers and internally displaced persons, as well as for the rehabilitation of servicemembers and individuals affected by Russian armed aggression.

The law also regulates the management of cultural property. Such assets are subject to exceptional management, with transfer to state-owned museums, galleries, reserves, libraries, or archives.

New possibilities for asset disposal

The law expands the grounds for disposal of seized movable property. Assets may now be disposed of without the owner’s consent by court decision if they are perishable, lose 50% of their value within one year, or if storage costs exceed 30% of their value over 12 months.

The ARMA is now authorized, during control measures, to assess whether sufficient grounds exist for disposing of assets previously transferred to its management. If circumstances arise that prevent the preservation of an asset’s economic value, the ARMA must commission a valuation and notify the prosecutor of the need for sale.

Disposal is carried out through electronic auctions in the Prozorro.Sale system; securities are sold on organized capital markets, while commodities subject to organized market trading are sold on such markets. This is a significant step, as the mechanism is now enshrined in law.

An important safeguard is the prohibition on selling sanctioned assets subject to lawsuits for confiscation until a final court ruling has entered into force, except for perishable assets. Furthermore, immovable property may not be sold without the owner’s consent until a final court decision is reached — whether a conviction, a special confiscation order, or a judgment on recovery of unjustified assets for the benefit of the state.

Strengthened oversight of management effectiveness

The revised law enhances mechanisms for monitoring the effectiveness of seized asset management. A clear two-tier system is established: documentary checks at least once a month; on-site inspections at least once every three months. This ensures continuous monitoring of asset value preservation, compliance with management contracts, and prevention of conflicts of interest.

Previously, on-site inspections were critically low in number, and ARMA staff assessed management effectiveness almost exclusively on the basis of documents, raising doubts about the quality of oversight.

The reform also introduces the possibility of conducting additional checks based on asset owners’ complaints and grants the ARMA the right to involve representatives of other state bodies in issues requiring specialized knowledge.

A major innovation is the introduction of clear grounds for immediate termination of a management contract: non-compliance with essential terms for more than two months, conflicts of interest, links with the owner of the seized asset or suspects in the case, or attempts to alienate assets.

In case of termination, the ARMA must announce a new manager selection within 20 working days, ensuring continuity of asset management.

***

The new provisions on manager selection will be introduced gradually — six months after the law enters into force. Until then, asset transfers will be carried out under the current legislation. Ongoing competitions and unsigned contracts will be canceled, and the ARMA will be required to announce new selections under the updated rules.

Within six months, the Agency must identify all assets transferred to its management before the law’s entry into force that still lack managers. Meanwhile, the Cabinet of Ministers must ensure the development of necessary implementing regulations.

We expect this reform to bring about a fundamental change in the system of managing seized assets, making it more transparent, efficient, and adapted to current realities.

The next steps lie with amendments to the Criminal Procedure Code of Ukraine and the adoption of bylaws, which will enable the full launch of the updated asset management mechanism along with its effective implementation.

All trial circles in the case of Solvar

The case of former MP Ruslan Solvar is one of those that has passed all court instances, some even twice, over the five years of the HACC’s operation. Although the recent decision in the case was pronounced in August 2024, it may be not the end. 

Former deputy of the People’s Republic Ruslan Solvar, photo from his Facebook

All because there was no agreement within the High Anti-Corruption Court on how to qualify the crime Solvar was charged with–the abuse of MPs to receive compensation for apartment rental. This is not a classic example of abuse of office, but it was about MP guarantees, which are an integral part of his status.  

MPs can receive compensation for renting a hotel room. Such a guarantee is provided if the MP has no housing in Kyiv but is “registered” in a settlement at a distance of more than 30 kilometers from Kyiv. Discussions were the most heated in regard to actions that should be taken if an MP receives compensation but has no right to do so. 

In June 2021, Ruslan Solvar was acquitted by the first instance because it established that the MP could not set mandatory requirements for the Office of the Verkhovna Rada to compensate for the costs of renting a hotel room. That’s because officials of the Office of the Verkhovna Rada are not subordinate to MPs but have other managers. That is, MPs do not use their power when submitting such applications. 

However, in September 2022, the former MP was convicted by the HACC Appeals Chamber. Judges found that the accused did not abuse authority, but deliberately used the guarantees of housing provision contrary to the interests of the service and did not report that he had inherited an apartment in Kyiv, thus having lost grounds for compensation.  

That is, he committed a criminal offense under Article 364, part 2 of the Criminal Code of Ukraine, abusing his office, namely the opportunities provided to him by the status of a member of parliament. The judges of the appellate instance decided that they had the right to change the qualification in terms of what exactly the MP abused–authority or power, and ruled in view of the abuse of power. 

However, this was not the end of Solvar’s adventures and his guarantees as an MP. In December 2023, the Supreme Court overturned the decision of the HACC AC and sent the case for a new trial. According to the judges of the Supreme Court, the appellate court, although it is entitled to provide a different legal assessment of the factual circumstances established during the criminal proceedings, cannot aggravate the legal situation of the accused by such a change.  

Solvar defended himself against the abuse of authority, which he had been charged with, and was convicted of abuse of power. Thus, the Supreme Court found a significant violation of the requirements of the criminal procedural law and improper application of the law of Ukraine on criminal liability. As a result, the contested verdict was overturned, and a new trial was appointed in the appellate instance. 

Finally, after another trial, Solvar was sentenced to 3 years in prison. Interestingly, the final decision was delayed; first, Solvar failed to appear in court for a long time due to illness, and then he signed a contract with the Armed Forces of Ukraine. This turned to be a new challenge for the HACC as in the course of the following two months, the court could not hold a hearing because of the former MP serving in the AFU. Finally, the judges did pass a verdict, and since Solvar was convicted, his contract should be terminated. 

Thus, unwittingly, Ruslan Solvar contributed to the solution of an important problem in criminal law–the definition of the concept of “abuse of authority.” There are still many such cases in the High Anti-Corruption Court, and we are sure that not all accused are happy with this development of case law.

Mahuta and Shulezhko case: acquittals through legislative gaps  

Since the very launch of the HACC, we have emphasized that justice is not solely about the conviction of a person, but about quality legal proceedings. It is unlikely that all law enforcement agencies, even the NABU, make no errors in their work. If the court finds mistakes, there should be an acquittal. The decision in the case of Roman Mahuta, chairman of the Accounting Chamber, and Maria Shulezhko, member of the Accounting Chamber, is one such example.

Roman Maguta, ex-head of the Accounting Chamber of Ukraine, photo: Larysa Sargan’s Facebook 

The prosecution believed that Roman Mahuta, former chairman of the Accounting Chamber, and Maria Shulezhko, ex-member of this body, illegally seized an apartment provided in the course of office through privatization in 2014. The investigation argued that Shulezhko did not need official housing, but she received it after her nephew had privatized the apartment and given it to her as a gift. However, the SAPO prosecutor did not provide any formal violations of the current legislation. 

The court, for its part, pointed to this gap in the activities of the prosecution. It paid special attention to the quality of the legislation on the exclusion of housing from the list of that provided in the course of service.   

Thus, the judges pointed out the lack of clear criteria in the laws, according to which it can be established that the head of the institution, in this case–Roman Mahuta, unreasonably applied for the exclusion of housing from the list of that provided in the course of service. This made it difficult to assess his actions in the context of abuse of office. Overall, the shortcomings in the legal regulation of the treatment of official housing to improve the living conditions of employees of enterprises, institutions, and organizations, have long been known. 

It was due to these shortcomings that the court recognized that in this case, there were no grounds for a dynamic interpretation of the Article 191 provisions of the Criminal Code of Ukraine, in particular, the concept of “abuse of office.” Notably, the pre-trial investigation and trial of this case lasted from June 23, 2016, to April 6, 2023. In November 2023, the HACC AC confirmed the legality of the acquittal. 

This case shows us that lacunae in legal regulation can lead to an incorrect assessment of the circumstances by the prosecution. Thus, in this case, after a long trial, an acquittal was pronounced.

Indictment, despite the opposition to justice: 7 years of imprisonment for PGO ex-official Sus

The convicted Dmytro Sus is known for the fact that he used to work in the so-called “Kononenko-Hranovskyi Department” in the Prosecutor General’s Office, a unit that investigated particularly important cases in the economic sphere and earned its title by the names of MPs from the Petro Poroshenko Bloc, close to President Poroshenko. 

Dmytro Sus, PGO ex-official, photo: UNIAN 

According to the investigation and the court of the first instance, Sus abused the powers of the investigator and the head of the investigation when looking into cases of illegal gambling. According to law enforcement officers, and the same position was supported by the judges of the HACC, the HACC AC, and the Supreme Court, Sus misappropriated UAH 423,000 and also sold 11 gambling tables, 32 chairs, 10 slot machines, an electronic roulette, 12 displays, and a metal statue of a woman. 

The HACC began hearing the case of Sus back in September 2019 and delivered a verdict in January 2023. Importantly, while considering the case, the Anti-Corruption Court confirmed most of the charges presented by the SAPO prosecutor; however, it found the charges of misappropriation of a DVR from Sus’s office unjustified because the defendant, according to the evidence, was not present at this search. 

As a result, Sus was found guilty of misappropriation and embezzlement of property obtained during searches and sentenced to 9 years in prison with deprivation of the right to hold certain positions for 3 years and confiscation of property. But in the future, the HACC AC reduced the sentence to 7 years, and the Supreme Court confirmed the legality of such a conviction. 

This case is important because even though the accused was hiding in various hospitals and despite other obstructions to justice, the court still considered the case on the merits, and Dmytro Sus was brought to real criminal liability. 

Statute of limitation expiration: ex-judge Yushchuk exempted from punishment 

We often talk about the statute of limitations in corruption cases, and for a good reason. The case of ex-judge Yushchuk is a vivid example of the need to cover such a topic and introduce real solutions to the problem. 

Ex-judge Oleg Yushchuk. Photo: Judiciary of Ukraine 

Oleh Yushchuk, former judge of the Lutsk City and District Court of Volyn Oblast, was charged with offering a bribe of USD 500 to influence a judge who was trying a person for DIU. That is, Yushchuk was accused of abuse of influence, which is criminalized under Art. 369-2, part 2 of the Criminal Code of Ukraine. Yushchuk’s alleged offer took place in December 2017, and in March of the following year, the ex-judge informed the accused that the money was to be transferred through the attorney. Yushchuk was detained while receiving the marked bills. 

Initially, the case was heard by the Mlynivskyi District Court of Rivne Oblast, but later, it was transferred to the HACC–after its establishment. The trial in the court of the first instance lasted almost 3 years, and the first appellate review lasted almost a year.  

On July 20, 2022, the HACC found Oleh Yushchuk guilty of demanding money to influence his colleague’s decision. He was imprisoned for 3 years. The appellate instance did not agree with some evidence used by the first instance, but it did not change the sentence. 

For its part, the Supreme Court, in October 2023, found that the HACC AC did not fully assess all the arguments of the defense thus allowing contradictory conclusions, so the verdict was overturned. The case was sent for a new trial in the appellate instance. 

In April 2024, the HACC AC once again changed the verdict in terms of the evidence base. The judges stated that some covert investigative actions were carried out without the permission of the investigating judge, but the punishment remained the same. However, this did not affect Yushchuk in any way; the case was heard for so long that he was eventually exempted from serving his sentence due to the expiration of the statute of limitations. 

But for the mistakes of the pre-trial investigation body and different approaches to assessing the legality of evidence, Yushchuk could have been serving a real sentence; this did not happen. This case also shows the development of the practice of applying the law in different factual circumstances. 

Criminal law misinterpretation in the case of the State Aviation Service ex-head Antoniuk

The events in the case began in 2014, and we witnessed the outcome in July 2024. 

During 2014, passenger flights on the Kyiv-Tehran-Kyiv route were operated by two airlines–UIA and Ukrainian-Mediterranean Airlines (UM Airlines). According to international agreements, the number of flights on this route should not have exceeded four per week–and with only one airline. However, this limit was exceeded, which is why Iran repeatedly appealed to the State Audit Service of Ukraine. 

Ex-head of the State Aviation Service Denys Antonyuk. Photo: Facebook 

In the end, in November 2014, Iran did not allow the UIA plane to Tehran, so the then head of the State Aviation Service Denys Antoniuk instructed the head of one of the departments to reject the application of Ukrainian Mediterranean Airlines for an additional flight, thereby giving preference to the UIA. As a result, UM Airlines flight was canceled, the airline suffered UAH 250,000 of losses. The former head of the State Aviation Service was accused of using his official position contrary to the interests of the service, acting in the interests of the UIA. 

From September 2016 and in the following three years, the case was heard in the Shevchenkivskyi District Court of Kyiv and then transferred to the HACC. In January 2023, the HACC issued a guilty verdict, which was confirmed by the Appeals Chamber in less than a year.   

But the case was referred to the Supreme Court, and its decision caused a heated debate. The cassation court found that there was no violation of the law that Denys Antoniuk would have allowed, and therefore he should be acquitted. 

This case is interesting because the Supreme Court narrowly interpreted one of the signs of abuse of office. This caused a discussion in the legal community. The point is that in the Criminal Code of Ukraine, one of the signs of abuse of office is the commission of an act contrary to the interests of the service. The Supreme Court moved away from the established practice of its interpretation and elaborated on its content, narrowing it to a violation of the law.  

Antoniuk was accused of failing to comply with the order of the Ministry of Infrastructure on the procedure for granting and revoking the rights to operate air lines. However, the issuance of this order fell within the competence of the State Aviation Service, and not the Ministry, therefore, in the opinion of the Supreme Court, Antoniuk, as the head of this service, was not obliged to comply with it. Although before that, the HACC and the HACC AC had ruled otherwise. Since this order was further overturned by the administrative court, the Supreme Court, for its part, decided that non-compliance with this order could not be considered abuse of office. 

***

Over the five years of its operation, the HACC has passed truly different sentences and faced truly different problems both before and after the rulings. However, all these decisions eventually formed new, special case law, which lays the foundations for further truly effective hearing of corruption cases.  

That is why it is so important for civil society to effectively monitor and evaluate the prosecution of senior corrupt officials and share the results of this monitoring with the Anti-Corruption Court. Thus, through joint efforts, we will achieve the desired results.

1. A corrupt official dares to commit a crime for real profit. Therefore, it is necessary to deprive them of criminally acquired assets and the opportunity to get them in the future.

Enrichment is the purpose for which officials commit crimes. They want to get illegal extra profits through the use of opportunities in the public service. And even a sentence of 5 or 10 years in prison can leave illegally acquired property in the possession of their relatives or friends.

Therefore, undoubtedly, it is necessary to recover the stolen assets because unless this is done, inequality due to corruption will only exacerbate.

How to ensure it once the corrupt official decides to conclude a plea agreement? Especially keeping it in mind that when a person concludes a deal, they expect a mitigation of punishment. Government officials propose to do this through the imposition of large fines (probably, this is what the public referred to as “buying freedom”). However, if the investigation finds only a part of the criminally acquired assets or the corrupt official is a participant in a large scheme with many persons involved, a fine alone is very likely to be insufficient.

To this end, using the tool of special forfeiture will prove effective. Thus, even without imprisonment, the accused will suffer the consequences, but not as much as if they had been imprisoned. And there will be no such thing as “the official stole 3 billion, was caught on receiving 300,000, bought himself out, and is free and happy.” After all, according to the law, it is possible to confiscate all the income of a person unless they confirmed the legality of their acquisition. This is more than just a fine.

Unfortunately, the government law mentions only fines, but does not focus on special forfeiture. It is through such a tool that the prosecution may, if necessary, deprive a person of a real financial incentive to corruption, but this is not articulated in the draft law as a condition for mitigation of punishment. Therefore, we are convinced that such a provision should be included in the draft law because, in addition to the real economic effect, it would have a deterrent effect on others.

Moreover, the punishment should be proportional to the crime committed. It is difficult to assess such proportionality in corruption cases, it is difficult to subject it to some clear rules. But one thing is sure: when a person concludes a deal, they want a mitigation of punishment. That’s how agreements work.

Therefore, the very fact of depriving a person of criminal assets or compensation for losses is not a punishment. This only restores the original state of affairs before the crime was committed. Whereas a fine and deprivation of the opportunity to hold office, the fact of convicting a person, that is, recognizing them as a criminal, and entering them in the register of corrupt officials are precisely those legal restrictions that may be sufficient for punishment. The corrupt official will still pay for the committed severely, but avoiding imprisonment will be a silver lining.

2. An agreement is when both parties benefit from the deal. At the moment, it is unclear what benefits the investigation will have under the new law from concluding an agreement featuring a suspended sentence

It is necessary to clearly distinguish between the current state of affairs and what the government offers, as well as to pay attention to the gravity of the crimes charged.

Let’s look at examples. Now, for example, Vsevolod Kniaziev, the ex-chairman of the Supreme Court, who is accused of a particularly grave crime, can conclude a plea agreement. According to it, he will make a deal with the prosecutor and provide evidence to expose, for instance, an oligarch who committed corruption crimes. But he is unlikely to get any benefits for himself.

So, now the sanction of the article does not allow Kniaziev to get a suspended sentence or pay a fine, and the incriminated crime did not cause any damage. But according to the draft law:

1. he could be released on parole with a probationary period of up to 6 years, or
2. he will get a sentence, for example, 1 or 2 years of imprisonment, as well as
3. he could pay a fine from UAH 102.017 million to UAH 204 million.

However, the possibilities for concluding agreements are different for different persons involved because the conditions depend on the articles under which they are charged. Thus, Tetiana Ilieva, the judge of the Pechersk court, who is accused of a grave crime, even today is not restricted in terms of concluding an agreement. The content of the agreements in a potential deal with Ilieva will mainly be determined by her lawyers and the prosecutor independently.

This demonstrates some dissonance because for grave crimes, a person can be exempted from real punishment without exposing accomplices or compensating for losses even now. But in agreements on especially grave crimes, the accused must necessarily expose other persons participating in the scheme. 

The draft law proposes only compensation for damages for especially grave crimes. These damages, as the case of Kniaziev shows, are not always caused. It should also be borne in mind that some especially grave crimes can be committed without accomplices. For how do you expose an accomplice when there is none? That is why it is necessary to establish alternative conditions under which a corrupt official may not really serve a sentence, to give the prosecutor leverage that will also prevent abuse (for example, a fine).

In addition, suspended sentence under agreements on corruption crimes will be available to corrupt officials who are prosecuted by other bodies, and not only by the NABU. This means that these cases will no longer be heard by the HACC, but also by local courts. If the agreements approved by the HACC are often the subject of public discussion, which might contribute to the quality of proceedings in such cases, then there are too many local general courts, there is still too little trust in them, and it will be extremely difficult to track such court decisions. Here we run the risk that a person will really benefit from the situation with minimal advantages for the state.

In addition, the new draft law proposes to link the expungement of conviction only to the fact that the person did not commit other criminal offenses. This is wrong because a conviction imposes certain restrictions on a person, including that he/she cannot commit other crimes. If the person fulfilled all the obligations imposed on them by the court—checking in with the probation service, etc.—then the conviction can be expunged. But the new draft law proposes to expunge the conviction given the absence of other crimes alone. This will greatly simplify the convict’s life, which does not quite correspond to the logic of such an institution as a criminal record.  

Therefore, the law should be very specific about all the points mentioned above. Then the benefit the person gets from exemption from real punishment will correlate with the needs of the investigation, the court, and the demand of Ukrainians.

3. The ultimate responsibility for approving the agreement still rests with the judge.

The conclusion of an agreement is always a search for acceptable options for both the prosecution and the defense counsel. Therefore, ample opportunities for the prosecutor in this regard can really allow more effective prosecution of corruption.

The draft law proposes to approve the conclusion of such an agreement by the head of the prosecutor’s office. Although this is one of the safeguards, it may not work. It is worth remembering that the final decision on the approval of the agreement is still made by the judges. It is they who assess the existence of factual grounds for admitting guilt, the compliance of such an agreement with the interests of society, etc. The last category is the most difficult to assess.

Judges now do not have the opportunity to examine all the materials of the pre-trial investigation to assess how correctly the agreement was concluded. In our opinion, giving them the authority to request these materials will improve the quality of evaluating the possibility of approving the agreement. Then the judges will be able to check whether the prosecutor really assessed the actions of the person in view of the collected evidence. This will also create conditions for the lawful prosecution of the judge in case they approve an inappropriate agreement.

But how will Ukrainian society benefit from such agreements? 

Criminal process is a complex and expensive procedure. Therefore, most civilized states have a mechanism for speeding up the consideration and conviction of a person—an agreement with the accused.

In Ukraine, the institution of deals in corruption cases was significantly curtailed in 2014. Then, together with the adoption of the law on the NABU, safeguards were established so that the defendants in corruption cases would not be released by local courts without proper punishment.

Ten years have passed, the practice of bringing judges, MPs, or heads of public authorities to criminal liability is developing with the expansion of the HACC practice. But the criminal process remains lengthy and expensive. Cases can take a long time to be heard, and although interest in them decreases over time, the state’s resources are still spent on determining the guilt of potential corrupt officials.

Therefore, the practice of agreements is applied; this is much faster and more effective. In this way, losses can be compensated, and a person can be convicted, thus removing the possibility for enrichment and freeing up the resources of investigators, prosecutors, and judges to other, much more complex and dangerous corruption cases for the country.

Can this be called “buying freedom”? It is unlikely, otherwise the punishment for any crimes in the form of a fine can be considered as buying freedom. Moreover, as a result of a full-scale consideration, which will last for years, a person may be declared innocent, or the statute of limitations will expire. Alternatively, they might confess to the crime and will come across real obstacles to further corruption-related actions.

Therefore, this high-profile draft law on agreements should be finalized. Then the criminal process will really speed up, and the mechanism of agreements will function without abuse. All interested parties—the accused, the investigation, and Ukrainians who also closely follow the consideration of these cases—will clearly understand the potential benefits of such agreements.

1. Throughout its existence, ARMA has never established itself as a reliable partner for bodies within the criminal justice system

Let me remind you that according to its mandate, ARMA is tasked with effectively locating assets owned by individuals involved in criminal cases as requested by law enforcement officers and managing seized assets. However, in practice, this institution struggles to manage the volume of assets it receives and fails to effectively carry out its functions.

This is especially evident in the performance results of the Agency in 2023. For instance, the number of assets transferred to ARMA’s management sharply declined compared to both 2021 and 2022. This indicator is influenced by both the frequency of cases warranting asset transfer to ARMA and the level of trust in the Agency.

Despite the exceptionally large number of seized assets transferred to ARMA in 2022, the situation regarding the number of concluded management contracts has barely changed.

Several factors have contributed to these lackluster outcomes, including the ambiguity surrounding governance rules and procedures, the absence of high-quality asset tracing tools, the prevalence of numerous corruption loopholes, and the significant temptation to illegally amass wealth from property “taken” from its rightful owners.

Due to the Agency’s reputation, implementing changes to enhance its role and functions proves exceedingly challenging. However, tools exist to enable an objective assessment of its work, such as the implementation of external independent evaluations (audits) to gauge its effectiveness.

2. ARMA’s performance in critical domains, notably asset search and management, is on the decline

Today, Olena Duma, the head of ARMA, reports on what she describes as a “watershed” year in the Agency’s history. She presents graphs that exclusively depict growth. However, as indicated by statistical data, the number of sought-after assets is progressively decreasing, while the number of assets transferred to management and signed contracts with managers has remained almost unchanged.

That is, the key areas of the Agency’s work, which can be used to assess its effectiveness, are in stagnation. And despite all the praise of the leadership, ARMA cannot be evaluated by budget revenues, because it is not a fiscal body.

The Agency is designed to prevent potential losses of the state budget at the expense of private managers, and this should always be remembered. And the problems in this area can be highlighted by an external audit.

3. The existing model of independent external assessment of ARMA’s activities is very imperfect

According to current auditing standards, political actors participate in the formation of the commission, including the President of Ukraine, the Verkhovna Rada, and the Cabinet of Ministers. Therefore:

• There is a risk of the relevant provisions of the Law on ARMA being deemed unconstitutional due to the absence of the president’s authority to appoint a member of the Agency’s external evaluation commission. A similar collision arose with the relevant provisions of the Law on NABU in 2021.
• This model contributes to excessive politicization of the assessment process. This was evident during the competitions for the head of ARMA and for the head of SAPO, where due to political intrigues, such selections dragged on excessively.

Not only that, the Agency now undergoes an external audit every year by a reputable auditing company. But, as the history of the last audit shows, this is also not a very effective measure, because of:

• possible manipulations with the procurement of auditing company services. Last year, the CROW UKRAINE audit company managed to secure an audit contract only through appeals, as ARMA had established very specific requirements. Probably to achieve victory of the “related” auditing company;
• auditors depend on what information the Agency provides them. For instance, the new management of ARMA did not furnish certain materials, presumably due to restricted access to them. And this, despite the likelihood that they were interested in a negative outcome for the 2022 audit.

Draft law No. 9515, aimed at establishing an effective mechanism for the external evaluation of ARMA’s performance, has already been registered in Parliament. However, it needs to be refined. 

In particular, it is worth paying attention to the following significant shortcomings:

• the number of members of the assessment commission should be reduced to three, who are appointed by the Cabinet of Ministers on the basis of proposals from international partners;
• expand the circle of persons who can apply for the position of a member of the assessment commission.

External evaluation of the performance of state bodies is crucial for gauging the effectiveness of their operations. However, for institutions like ARMA to function optimally, it’s imperative to carefully select the teams responsible for conducting such assessments and to grant them access to the maximum amount of data possible.

***

Ukrainian society is calling for action to combat corruption. International partners are keen on the efficient functioning of the anti-corruption system, which, notably, will facilitate Ukraine’s effective European integration.

The Ukraine Facility Plan explicitly highlights the necessity of implementing an independent external system to evaluate the effectiveness of ARMA’s activities. To fulfill these requirements, it is imperative to enact amendments to the law and conduct comprehensive evaluations of ARMA’s activities, including regular and high-quality audits.

Is corruption about abstract or specific damage?

Damage always entails certain losses, omissions, or deficiencies caused to people or an enterprise. Their size is determined depending on the type of damage. 

Corruption and related illicit financial flows divert state revenues and cause damage to the national budget, which is to provide health care, housing, education, and other basic services. In addition, corruption undermines the ability of states to ensure respect for human rights. 

This is reflected in the work of international institutions. For example, the UN Human Rights Committee in 2018, in its opinion on Bulgaria, mentioned the problem of impunity, which is associated with corruption of high-ranking officials. 

In addition, corruption undermines the credibility of relevant bodies and contributes significantly to instability—this was emphasized by the United Nations Special Rapporteur on Minority Issues.  

However, when committing corruption offenses, one can also talk about specific damage — moral, material, and physical.  

For example, moral damage may entail worries, strong emotional reactions, and even mental disorders. It is quite difficult to prove the infliction of this damage, and even more so to measure it. Mostly, this takes into account the nature and amount of suffering (physical, psychological, mental, etc.) suffered by the plaintiff, as well as the nature of non-property losses (their duration, recovery opportunities, etc.). 

For example, in one case, a former head of a village council in Kyiv Oblast and an ex-MP were accused of extorting EUR 300,000 and receiving a bribe of USD 10,000 from local entrepreneurs for a long-term land lease. The victims justified the damage caused to them as psychological suffering and humiliation of the honor, and dignity and business reputation of their enterprise, but the court found this damage unconfirmed and paid only material damage.  

But there are also opposite examples when the court confirmed the fact of causing moral damage. An ex-MP of the Khmelnytskyi Regional Council was convicted for inciting the acting director of the Kamianets-Podilskyi boarding school Slavutynka to transfer a bribe of USD 50,000 to preserve his position. Then the victim explained that moral damage was manifested in “daily thoughts and memories of those events, feelings of fear, negative experiences, alertness, anxiety, emotional and bodily reactions, sleep disturbances, nervousness, experiencing psychological discomfort, fears about the future… her life plans were undermined, the possibility of building and implementing new prospects and work-related achievements, productive self-realization worsened, her health and therefore the quality of life as a whole deteriorated.” 

The court found these arguments substantiated and ordered to compensate her with UAH 50,000 in moral damages. 

Material damage entails monetary or property damage suffered by a person. In this case, it is quite easy to prove the damage and determine its monetary equivalent. For example, it may be money embezzled or misappropriated by a convicted person.  

For instance, Andrii Rachkov, the former deputy general director of the Titanium Institute, was accused of embezzling UAH 10 million. He transferred it to the accounts of an offshore company for services that had not been actually provided and performed. PJSC Titanium Institute filed a civil lawsuit in court and obtained full compensation for the damage caused based on the guilty verdict against Rachkov. 

It was similar to the case in which the ex-director of the Chornobyl Special Combine was accused of concluding contracts and purchasing diesel fuel and A-92 gasoline at inflated prices. The enterprise suffered UAH 1 million in losses, which were fully compensated under the civil lawsuit.  

What about the physical damage caused by corruption? In the four years of the HACC’s operation, there have been no such cases in the court’s decisions, but corruption can cause physical harm indirectly:

• corruption in the health care sector can lead to death, in particular due to the difference in the quality of services;
• corruption in the construction sector can lead to injuries because there was no proper scaffolding, or the work was of poor quality. 

Who are the victims, and what are their rights?

If you have been caused damage by a crime, you can “get” the status of a victim in criminal proceedings by filing a report for a criminal offense. However, not always the victim is the complainant and not every complainant is the victim because anyone can report a crime. Therefore, such a status can be acquired later in the process by submitting an appropriate application for recognition as a victim. 

The rights and interests of the victim are protected by law, so they have the right to a representative, can review case materials, submit evidence and testimony, participate in court hearings, express their opinion on the imposition of punishment, conclude reconciliation agreements, appeal court decisions, etc.  

Most importantly, the victim has the right to compensation. 

How can I get compensation for a corruption crime?

There are three options: to obtain compensation voluntarily, to obtain it following a civil lawsuit, or to get compensation from the national budget. 

The first option is possible mainly when approving agreements. Often, in such cases, a civil lawsuit is not even filed. For example, in one of the cases, Ukrzaliznytsia suffered UAH 200 million in losses. The parties reached an agreement on the voluntary reimbursement of UAH 2 million to the company. Such a significant difference in the amounts is due to the property status of the accused, who was supposed to pay the money.  

A similar situation occurred when the State Enterprise Derzhinformyust was compensated only UAH 500,000 out of UAH 6.7 million of damage. Defendants who agree to a voluntary payment of compensation may use such leniency to mitigate their punishment. 

The most common way to get reimbursed is to file a civil lawsuit. This is a statement in which the victim justifies the amount of damage, the fact of its infliction by the accused and asks to reimburse it. The lawsuit can be filed before the start of the trial. The civil plaintiff can be both the victim and the state—either represented by the SAPO prosecutor (in cases specified by law), or by a separate institution.  

As of February 8, the HACC completed the consideration of 34 lawsuits in criminal proceedings. Of these, 18 civil lawsuits were granted (including in part), and only one was dismissed due to unproven damages. There were four cases when the court closed the consideration of civil lawsuits because the plaintiffs renounced them. Another 11 civil lawsuits were left without consideration (quite often because of the acquittal of the accused).  

The fate of a civil lawsuit depends on whether the court will convict the accused or acquit them. There were also cases when the civil lawsuit was left without consideration since the statute of limitations had expired in the case against the accused. For example, in the case of causing UAH 13 million of damage to the Department of Health Care of the Zaporizhzhia Regional State Administration, the HACC indicated that it was impossible to establish the circumstances of the offense because the accused was exempted from criminal liability, which is why the civil lawsuit was not subject to resolution, and it was left without consideration. 

If the court left the civil lawsuit without consideration, or a person did not file it before the beginning of the consideration, this can be done separately, in civil proceedings. However, we did not find such cases in the practice of the HACC. 

Sometimes the plaintiffs renounce their civil lawsuit for some reason. For example, in the case of the criminal organization of Yanukovych-Kurchenko and the seizure of the stabilization loan of the NBU, the victim—National Bank—subsequently renounced the lawsuit, although it had suffered losses of more than UAH 700 million. Therefore, the HACC was forced to leave this claim without consideration. 

There is also a hypothetical possibility of receiving compensation from the national budget. After all, the state is obliged to compensate for damage caused by injury, other damage to health, or death (Article 1207 of the Civil Code of Ukraine). Such compensation is awarded when it is unknown who committed the crime or if this person is insolvent. 

Unfortunately, a special law that would establish the procedure for such reimbursements has not yet been adopted. As there is no law that would determine the procedure for implementing the state’s obligation to compensate for damage to individuals, which is mentioned in Art. 1177 of the Civil Code of Ukraine. Therefore, there have been no such cases within the NABU jurisdiction. 

How to improve the situation of corruption victims? 

The practice of compensation for corruption crimes is not as large-scale as we would like. Therefore, it is necessary to solve the main problems that exist at the level of legislation and practice of its application.  

We have analyzed the reports and publications of the UNCAC Coalition’s Victims of Corruption aimed at improving the legal situation of victims of corruption and found such opportunities. 

First of all, the rules on compensation should be simple, transparent, and clear in application. Victims should be fully informed about the right to claim compensation. Law enforcement agencies and the anti-corruption court should make every effort to ensure and facilitate the participation of victims at all stages of the proceedings, taking into account their position in the consideration of the case.  

Certain responsibilities may be entrusted to the state. Proceedings should not cause a financial burden on victims that would prevent or demotivate them from claiming compensation. Therefore, the state should provide assistance and support should victims require them.  

It is also proposed to consider the possibility of creating special funds and mechanisms from which victims can receive compensation in advance, without waiting for the completion of lengthy civil or criminal proceedings.  

This is not always possible, given the requirements of national legislation. Therefore, if compensation can be obtained only after a trial, and there are no proceedings or its consideration is delayed, then the state does not fulfill its obligations.  

Non-governmental organizations can play an important role in protecting the rights of victims of corruption.  

Fabiano Angelico, a representative of Transparency International Brazil, during a speech at the 10th resumed session of the Implementation Review Group for the UN Convention against Corruption (UNCAC), spoke about a case where a company pledged to pay USD 700 million in compensation over 25 years. Prosecutors then agreed that TI Brazil would offer a management system for the fund formed from that company’s payments. The fund would be managed by both the company itself and members of the public, and its goal would be to prevent corruption. 

In the EU countries, the draft Anti-Corruption Directive is now widely discussed. Our colleagues from Transparency International have provided their opinion on this draft and offer sound recommendations regarding the status of victims of corruption:

• promptly identify and engage victims (state and non-state) in criminal proceedings;
• provide an opportunity to non-governmental organizations to represent the interests of victims;
• organize the activities of coordinators of work with victims;
• ensure in cases against corruption the recognition by victims and the application of the provisions of the EU Directive, which sets minimum standards for the rights, support, and protection of crime victims.

The European Commission in its report on Ukraine also mentioned the need to bring the legislation of Ukraine on the rights of victims in line with Directive 2012/29/EU and Directive 2004/80/EU on compensation to crime victims.

***

As we can see, respecting the rights of victims and providing them with opportunities to protect these rights can reduce the level of corruption in the country. After all, victims, having a private interest, can protect their rights more actively than public authorities and enterprises.  

To make this happen, it is necessary to raise people’s awareness about obtaining compensation for corruption crimes, to form a clear judicial practice on how to determine the amount of moral damage. Equally important is the quality of legal assistance to victims—in the case of damage caused to enterprises, it is about the effective work of their legal services. 

This, as well as quality interaction of pre-trial investigation bodies with victims (or potential victims) of corruption criminal offenses, will allow for the establishment of a consistent judicial practice on compensation for damage to victims.  

Of course, new practices to protect the interests of victims of corruption should be constantly explored, for example, establishing special compensation funds. However, eventually, Ukraine will need to adopt special legislation on state compensation for losses to victims in cases where an offender has not been identified.

The material was prepared jointly with Yulia Poltorak, a lawyer for monitoring HACC cases at Transparency International Ukraine

Reasonable terms: how does their observance affect the operation of the court? 

As we mentioned above, many factors influence the trial. Thus, the speed of consideration of cases is influenced, in particular, by the complexity of these proceedings, the number of the accused, their behavior.  

For example, if there are many documents, videos, and audio recordings in the case that need to be considered by judges, as well as several dozen witnesses who need to be questioned, it is difficult to expect that the court will pass a verdict in less than a year. And if judges have several dozen such cases, a quick and high-quality trial is a really difficult task. 

Quite often, consideration is delayed due to the postponement of meetings by judges. As part of the monitoring in 2023, our lawyers attended 390 hearings. Of these, 244 (63%) took place and 146 (37%) were postponed. Common reasons for postponement include:

• non-appearance of the suspect/accused (in 54 cases out of 146);
• without providing a reason (in 22 cases out of 146).

Thus, the non-appearance of suspects may be for valid reasons and not. The law determines that valid reasons include, for example, the death of a family member, a natural disaster, and other circumstances that objectively make it impossible for a person to appear at the hearing. Since it is objectively impossible to provide an exhaustive list of valid reasons, this is frequently and quite deliberately abused by the parties to the cases to delay consideration and, ultimately, wait for the expiration of the statute of limitations.  

For example, last year, MP Shol asked to postpone the consideration of the case due to her participation in a meeting of the parliament, and MP Anna Kolisnyk, due to the fact that her lights were turned off. This contributed to the delay in the consideration of cases against them and, eventually, these proceedings were closed because the statute of limitations had expired. 

According to the legislation, it is the court that must ensure compliance with reasonable terms of consideration. It has appropriate tools to do this: the compulsory bringing of the defendant to the court, the imposition of a monetary penalty, the change of an interim measure.  

However, unfortunately, the HACC does not always use these tools, and if it does, the amount of a fine for failure to appear in court is extremely low: in 2023, they ranged from UAH 1,342 to UAH 5,368. In addition, the court cannot apply such penalties to lawyers, who can also ignore the court hearing without valid reasons. 

Failure to comply with reasonable trial time limits may also result in an expiration of statute of limitations for criminal prosecution. After all, reasonable terms of trial are also based on the statute of limitations. If the court does come to a conclusion about the guilt of the accused, as a general rule, some punitive measures should be applied to this person. If the statute of limitations has expired, then the court can only state the guilt of the person and release them. And this is provided that the defense will not apply for exemption from criminal liability due to the expiration of the statute of limitations. In this case, there can be no mention of a statement of guilt. 

As of October 2023, when we completed this stage of monitoring, the judges of the first instance of the HACC released 21% of all the defendants from criminal liability or punishment due to the expiration of the statute of limitations. And this number is growing. 

For example, this might have been the case with Iryna Koval, the ex-director of the state-owned enterprise Ukrmedproektbud, and Ihor Kuchma, her associate and ex-director of LLC Ukrprofmed, who were convicted by the HACC at the end of December 2022. But the HACC Appeals Chamber did not have an opportunity to consider this case until December 9, 2023, and it was then that the statute of limitations expired. However, the HACC AC acquitted these persons by overturning the conviction of the first instance. 

The ethics of the participants in the trial are also an issue, in particular, abuses that can be committed by both the prosecution and the defense.  

There are many options for such abuses. Unreasonable disqualifications and motions, lengthy process of familiarization with the materials of criminal cases, and other tricks of lawyers can often affect the rights of the accused and the suspect in the first place. The court cannot proceed to the consideration of the case on the merits for a long time and decide whether the person committed a crime or not. Because if no crime was committed, all restrictions on the rights must be suspended.  

Such abuses can also be aimed at “stalling” the trial, and the CPC of Ukraine provides a limited range of means by which to respond to such actions. Thus, HACC judges apply the principle of inadmissibility of abuse of procedural rights, which, although not defined in law, is common law. In favor of this argument, the relevant position of the Supreme Court is provided.  

For example, the CPC of Ukraine does not contain provisions that would prohibit the use of obscene language in procedural documents. But that doesn’t mean it can be used. In the practice of the HACC AC, there are decisions in which judges recognized the use of obscene language as an abuse of procedural rights. 

In addition, HACC judges have the opportunity to bring to administrative liability for contempt of court. Since February 11, 2022, HACC judges have been empowered to fine participants in the proceedings for contempt of court. The necessary changes were introduced to the Code of Administrative Offenses, TI Ukraine emphasized their expediency many times.  

Contempt of court is expressed in a malicious evasion of the appearance of a witness, victim, plaintiff, defendant in court, in disobedience of citizens to the order of the presiding judge, in violation of the procedure during the hearing. That is, we are talking about actions that indicate a clear contempt of court or the rules established by it. The penalty for such offenses is a fine of UAH 850 to UAH 2,550. 

Unfortunately, in the practice of the HACC, we have established only one case when a judge brought a lawyer to such liability. But there are many more situations when lawyers argue with the presiding judges, violate the procedure of the court hearing, and otherwise express their contempt of court. Therefore, the court should undoubtedly respond more often to such violations. 

Plea agreements in high-profile corruption cases: why are citizens sometimes dissatisfied with them?

In 2023, the HACC approved several plea agreements in corruption cases, and the public had questions about some of them. 

In general, a plea agreement is a legal “compromise” between the prosecution and the suspect. To avoid abuse, these agreements should be checked by the court.  

Thus, the terms of the agreement should correspond to the interests of society; it depends on the gravity of the crime and the actual ratio of public and private interests. Of course, the agreement should not violate the rights, freedoms, or interests of the parties, and must necessarily be voluntary. 

By concluding an agreement, the parties can agree on the punishment, the amount of damages to be compensated and the conditions under which the punishment will not be imposed, for example, when it comes to the so-called suspended sentence. It was this, as well as generous donations of the defendants in high-profile cases, that caused public outrage. 

For example, in early August, the HACC approved Mykola Zlochevskyi’s agreement with a SAPO prosecutor. As a result, the ex-minister of ecology pleaded guilty and paid a fine of UAH 68,000 for a “super bribe” of USD 6 mln, as well as more than UAH 660 million in assistance to the Armed Forces of Ukraine. Similarly, under the agreements, ex-MP Oleksandr Trukhin transferred UAH 6 mln for the needs of the army, and the suspended mayor of Poltava Oleksandr Mamai pledged to pay UAH 2 mln.  

The expediency of the agreement in the Zlochevskyi’s case was questioned due to an incomprehensible change in the article the ex-minister was charged under. Back in February 2023, Zlochevskyi was accused of organizing bribery of a particularly responsible official. For this, he could be imprisoned for 5 to 10 years, with or without confiscation of property. 

But the SAPO prosecutor decided to mitigate the article of accusation for “abuse of influence”; that is, bribery of a person who, due to their connections with the official, can resolve some issue. For this, the law establishes a fine of UAH 17,000 to UAH 68,000, a restriction of liberty from 2 to 5 years, or imprisonment for up to 2 years.  

An important question arose: which is better: supporting the army now or a fair conviction (if the guilt is proved) later? The opinions of the participants in the discussion were divided.  

In our opinion, compliance with the law is important in the process of approving plea agreements. If the national law does not grant the discretion to impose penalties below the sanction of the article, then it is not possible to change the charges only to approve the agreement. Moreover, all these agreements must be properly communicated so that there is no room for manipulation and speculation. 

The fact that the court does not have high-quality tools to verify the correctness of the article the accused is charged under when the agreement is submitted for approval also causes problems. The SAPO head states that no donation affects and can affect the legal qualification of the person’s actions. 

Another problem associated with sentences under agreements is their classification. Such court practice does not comply with the current legislation, the principles of publicity and openness of court decisions, established by the Criminal Procedural Code of Ukraine and the Law of Ukraine On Access to Court Decisions. 

For example, the sentences on the charges of Valerii Patskan, the ex-chair of the Accounting Chamber, as well as Mykola Zlochevskyi, are closed, and the grounds for their closure are unclear. It seems that judges do not have the technical ability to restrict access to only a part of the sentence, so the state enterprise Information Judicial Systems and related public authorities need to address this problem, namely, to develop and introduce a technical possibility to conceal from public access certain parts of court decisions, the disclosure of which may harm criminal proceedings. 

The unification of the practice of assessing public interest when approving plea agreements by the HACC judges will solve the problems raised in this part. It is also worth using judges as speakers to communicate the content of classified sentences, in particular, regarding the conditions of the agreement that may be disclosed. The parliament, for its part, should give judges the authority to evaluate the entire array of evidence by which the prosecutor substantiates the guilt of a person when assessing the content of the plea agreement.

And, of course, the problem of “Lozovyi’s Amendments”

Over the past year, we have witnessed many cases of closing criminal proceedings due to the expiration of the terms of the pre-trial investigation. 

Among them is the case of PrivatBank, where the decision to close it has not yet been adopted, but the problem with the deadlines is stated at the level of the HACC AC. These also include cases of Ukrzaliznytsia, the Dubnevych brothers, Oschadbank, as well as Rotterdam +, in which the first instance closed the proceedings, but the HACC Appeals Chamber overturned these decisions.  

The law that introduced the “Lozovyi’s Amendments” states: “The changes do not have a retroactive effect in time and apply to cases in which information about a criminal offense is entered into the Unified Register of Pre-Trial Investigations after the introduction of these changes.” That is, MPs seemed to indicate exactly how to extend the terms of the pre-trial investigation in the old and new criminal proceedings, but they did it extremely unsuccessfully.  

In their explanation, parliamentarians used words and terms that do not have an unambiguous understanding in the vocabulary of criminal procedural law. Since law enforcement officers can combine and separate criminal proceedings, the procedure for extending the period of pre-trial investigation in joint criminal proceedings remains unclear, when the first of the joint cases could have begun long before the adoption of the “Lozovyi’s Amendments.” 

The situation was further aggravated by the inconsistent and unpredictable practice of applying these changes by the Supreme Court. Some judges believed that the new procedure for extending the terms of pre-trial investigation did not apply to “old” criminal proceedings, while others were convinced that it did. The Joint Chamber of the Criminal Cassation Court within the Supreme Court formulated the position that in joint criminal proceedings, where information was entered both before and after the entry into force of the “Lozovyi’s Amendments,” the period of pre-trial investigation had to be extended in a new way. And this is contrary to a special instruction in the law. 

As a result, various judges interpreted these changes in the CPC in different ways, the established practice of applying the “amendments” was never developed, and high-profile corruption cases were closed.  

However, not all “Lozovyi’s Amendments” should be considered negative. For example, the extension of the period of pre-trial investigation by the investigating judge, and not by the prosecutor, after serving the person with a suspicion notice, increases the guarantees for an independent assessment of the need for an extension of the period. After all, the head of the prosecutor’s office, unlike the court, remains a representative of the prosecution; that is, they are an interested party. 

In December, MPs made an attempt to improve the provisions on the terms of pre-trial investigation. They removed the time limit for pre-trial investigation without suspects from the CPC. 

But the serious disadvantage of these amendments remains. It is about the unconditional obligation of the court to close the criminal proceedings if the terms of the pre-trial investigation have expired.  

This provision, on the one hand, can be useful. For example, if the prosecution delays and does not submit the indictment to the court for a long time, this definitely violates the rights of the defense, so there should be an appropriate reaction. 

On the other hand, what impact on the rights of the suspect or the accused will a 3-day delay in filing an indictment have? This was the reason to overturn the sentence of Judge Ponomarenko, who was sentenced to imprisonment for 2 years for influencing the decision of another judge. 

Therefore, the discussion about the terms of the pre-trial investigation should be conducted in terms of the admissibility of evidence, as well as the reasonableness of the terms of proceedings against the person. Currently, we are reaping what was sown by different interpretations of the CPC of Ukraine by prosecutors, lawyers, and judges.

What is the point of the presumption of innocence? 

Until there is a guilty verdict, it is unknown whether the person is guilty or not. This does not prevent the bodies of pre-trial investigation or the prosecutor’s office from proving the guilt of a person before the court, but they cannot publicly declare a person guilty or form such an attitude towards them.

This requirement exists in order for the punishment and appropriate condemnation of society to occur after the verdict of the court, and not before or before the case goes to court. 

Therefore, law enforcement officers do not mention the first and last names of alleged criminals in public communication about their detention or exposure, and the photos blur their faces. Even if a person is quite easy to identify, and a video from journalists appeared on the Internet, it is forbidden to state they are guilty.

Funny enough, the SSU once blurred not only the detainees, but also the cat that got photographed by law enforcement officers.

Source: SSU

On October 13, 2023, in one of the episodes of the Radio NV podcast NABU’s Secrets, Detective Braverman, in the context of discussing the possible provision of a EUR 22 million bribe by Mykytas to the mayor of Dnipro Filatov, said the following:

“As witnesses explained, with this entrepreneur (Mykytas — ed.), the cooperation had been established several years before these events, they poorly performed their tasks, so nobody wanted to continue, but they began to try hard to meet with the mayor (mayor of Dnipro — ed.) and provided their proposals, which were provocative in nature. Therefore, this crime was recorded.

Regarding the amount of EUR 22 million (bribe to Filatov — ed.), the detective noted the following: “In the course of the conversations that we recorded, it was voiced that this amount would grow. He boasted that there were 500 million for other facilities, and he increased the sum to 2.5 billion. That is, he said that he had a lot of experience, and this amount may not be final, 220 million was the minimum that they had agreed upon, which was already recorded at that time in documents and contracts. Therefore, we incriminate these 22 million, but he planned that the amount would be higher.”

The court found that the NABU detective although did not mention specific names, but the context of the conversation and the categorical statements of the detective undoubtedly formed the impression among the viewers and listeners of this interview that Mykytas was guilty of committing a crime. 

Mykytas said that such statements of the NABU detective had a negative impact both on him and on the authority of the judiciary; the HACC agreed with him. The court instructed the NABU director not to allow such cases in the future.

Why should the presumption of innocence be respected?

First of all, it is a sign of the civilized nature of the state, as well as the fact that the guilt of a person is decided by the court, and not by the crowd. Of course, this does not deprive the public of the right to disseminate information about the activities of law enforcement officers, but determines the rules for submitting information. 

These rules are defined both in Art. 17 of the CPC of Ukraine and in other legislative documents. This is also mentioned in Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms. 

The European Court of Human Rights emphasizes that the presumption of innocence is part of a person’s right to a fair trial, since a court cannot be biased in regard to a person’s guilt without examining the relevant evidence and opinions of the parties.

Unfortunately, the ECHR has repeatedly pointed to the violation of Ukraine’s obligations to respect the presumption of innocence. The fact that the HACC recognized the statements of the NABU detective regarding Mykytas as a violation is a significant shift that demonstrates the ability of the national legal system to correct mistakes without resorting to international courts.

The presumption of innocence was violated. What will it result in? 

First of all, a person has the right to compensation for the damage caused. And if there is a relevant court decision (national or international), the funds will be paid at the expense of the national budget. That is, instead of allocating funding for reconstruction projects or the needs of the Defense Forces, Ukrainians will sponsor someone’s reckless statements.

Other consequences are reputational. The international community will distrust the Ukrainian judicial system, will doubt its fairness. 

For example, one of the arguments for the refusal of the Serbian court to extradite former SSU General Andrii Naumov, convicted of money laundering, was the words of Zelenskyy: “Andrii Naumov is a traitor.”

***

When Russian invaders or other national security saboteurs are tried, emotions can sometimes take over. But despite all the circumstances and the fierce war, we need to remain a state governed by the rule of law. It is this civilized nature that shows the striking difference between us and Russia, which shows no respect for human rights and the rule of law. 

In addition, international partners support us also because we share common values, and therefore Ukraine must continue to affirm them, including through effective anti-corruption measures. 

Other problems related to the Agency’s activities were also mentioned in the report of the European Commission. Thus, our partners mentioned public concerns about the selection and appointment process, as well as the integrity of the new ARMA head.

The work of Olena Duma has already become the subject of journalistic publications, and they mentioned in particular the strange personnel policy of the new Head. As of now, some of her advisors have taken key positions in the Agency and even become deputies. We have not been able to establish whether these officials have experience in the field of criminal justice or other relevant areas from public information, and in general, we have very little information about the updated management of the ARMA. 

The European Commission also noted that the tools for confiscation and return of assets in Ukraine are not used enough, and the experience of seizures and confiscations still needs to be gained.  

In this part, the question arises of how one can get such experience in general because, after a successful search for some asset, the ARMA is happy to report on it on its website and social networks.  

The Agency is looking for assets at the request of law enforcement agencies in order for law enforcement officers to subsequently appeal with a motion to seize to the court. This process takes some time, sufficient for the owner of the mentioned assets to recognize themselves in the ARMA publication, re-register this property, or sell it. So, we can assume that this will potentially complicate the work of law enforcement agencies. 

For example, when TI Ukraine asked the ARMA about the criminal cases in which the Agency was looking for assets with already-existing sentences, we were informed that this information was extremely secret and not subject to disclosure. Looks like double standards. 

The transparency declared by the ARMA is activated only when the Agency needs it, for example, when creating the Anti-Corruption Council under the ARMA. Such a process is not provided for by any regulatory act, and the powers of such a council were generally determined by an internal order of the ARMA Head; apparently, she is going to control anti-corruption processes in the Agency. The deputy chair of the Anti-Corruption Council is a man who was an advisor to the ARMA Head back in August 2023.  

Therefore, we are cautiously optimistic that the European Commission has noted the need for a comprehensive reform of the ARMA. This reform should cover:

• the system of transparent selection of the ARMA head,
• full planning before seizure,
• determining the priority of the seizure of assets by criminal courts,
• transparent procedures for management, sale, and valuation of assets,
• unblocking the possibility to manage corporate rights. 

Most of these problems are mentioned in our study of the capacity, management, and interaction of anti-corruption infrastructure bodies, as well as in other materials that we published based on the results of monitoring the work of the ARMA. 

Although the ARMA has enough work to do to eliminate these shortcomings, the body also wants to manage sanctioned assets. MPs, whose assistants (or former assistants) now work in the Agency, have even registered the relevant draft law. We are convinced that, given the problems in the work of the ARMA, these changes are premature. Having witnessed so many of the Agency’s issues, it is difficult to imagine how it will also manage sanctioned assets. 

In any case, the attention of the European Commission to the activities of the ARMA is a very positive sign. However, the approach to reforming this body should be balanced, without drastic ideas or half-measures. After all, hasty and unjustified steps now might result in appeals to the European Court of Human Rights and considerable reparations to the owners of the seized assets.

In this context, one cannot but mention that the State Judicial Administration did not update the register of court decisions in the format of an open data set, despite the fact that it should do so daily. This makes it difficult to work with such information and automate its use.  

Moreover, a lot of attention in different countries is paid to the strategy of justice development. For example, the representative of the Supreme Court of the Republic of the Philippines mentioned the Strategic Plan for Judicial Innovation many times, which aims to create a new framework and introduce new approaches, but at the same time develop and reorient the existing ones. This, in her opinion, will help achieve the implementation of justice that responds to requests and operates in real time. 

It is interesting that we in Ukraine have also done a lot in these processes, but this progress is very difficult, and the experience of other countries and other expert organizations can help us, while our experience will help them. Of course, foreign experience should be processed in a meaningful way and best practices should be used rationally. 

We are in for a lot of work; this is no secret either for us or for other countries whose representatives I happened to talk to at the summit in Tallinn. But we know where we want to go, and we know WHAT to do. It is the matter of implementation that remains. Even if we rely on intermediate achievements in such processes, the end point becomes much more attainable.

Milder charges for a plea?

The full-scale invasion compelled the criminal justice authorities to seek methods to support our military. This is how the following practices became popular:

• changes in measures of restraint and transfer of bail by suspects and accused to the spacial account of the National Bank;
• cancellation of arrests and transfer of property to military units in accordance with the law on forced alienation of property under martial law;
• approval of plea agreements providing for donations to the army.

In fact, as the practice of approving agreements involving suspended sentences and substantial donations became more common, the notion began to take hold that this approach served as a way of payoff to avoid actual imprisonment as part of the punishment.

If we go back to a “super bribe” case, big concerns about the “payoff” there arise because back in February 2023 Zlochevskyi was accused of organizing the bribery of a particularly important public official. For that, he could be imprisoned for 5 to 10 years with or without confiscation of property. A later the SAPO prosecutor softened the charges to “abuse of power”. This crime means bribing a person who can solve an issue by their connections with a public officials. For that crime, the punishment may be UAH 17 to 68 thousand fine, restraint of liberty from 2 to 5 years or imprisonment up to 2 years. In other words, the punishment is significantly less severe than it could have been initially.

Prosecutor’s explanation that the judicial perspective of this case was questionable seems weird. In his opinion, Zlochevskyi realized that no one involved known to him had the authority to make decisions on criminal proceedings. And here is the question: why was that established only during the trial and not during the pre-trial investigation?

Besides the initial qualification of Zlochevsky’s actions still allowed him to conclude a plea agreement and not serve his sentence. The fact is that the ex-minister was charged with committing a serious crime. This implies that, in order to negotiate with the prosecutor, he is not forced to reveal someone else in the commission of another crime, as mandated by law in the case of charges involving a particularly serious offense. And his property would not have been confiscated in that case for reasons that we will discuss later. That is, we did not find any logical explanations for why it was necessary to change the qualification of the crime in the Zlochevskyi’s case.

In addition to Zlochevskyi, in our opinion, requalification was questionable in the case of Serhiy Shevchenko, an accomplice of the former head of the Kirovohrad Oblast State Administration Andrii Balon.

He pleaded guilty of assisting Balon in requesting and receiving bribes from the head of the Main Department of the State Food and Consumer Service in the Kirovohrad Oblast Ihor Boichuk for not firing the latter.

The illegal benefits should have been about UAH 1.8 million (as the accomplices themselves rounded up). And this is a particularly large illegal benefit, which is punishable under Part 4 of Article 368 of the Criminal Code of Ukraine.

However, it seems that Shevchenko’s actions received milder qualification in the agreement. The initial penalty did not provide for Shevchenko’s release from serving his sentence; the only question was the duration of imprisonment, ranging from 8 to 12 years.

This is the approach of SAPO prosecutors does not comply with the national model of simplification of criminal proceedings based on plea agreements. After all, the prosecutor must qualify the actions of the accused in accordance with the established evidence, with very limited discretion when it comes to selecting the appropriate legal article.

This is confirmed by the practice of bringing prosecutors to disciplinary responsibility for incorrect legal qualifications in specific criminal proceedings. As, for example, in resolution regarding prosecutor Serhiy Ivanenko, who was brought to disciplinary responsibility for incorrectly qualifying the theft of things from cars.

For the sake of fairness, it is essential to recognize that the opportunity to enter into plea agreements is not limited solely to individuals engaged in high-profile cases. For example, the HACC approved pleas in the bribery of police case with a fine of UAH 13 thousand.

The above Zlochevskyi’s and Shevchenko’s cases demonstrate the existing shortcomings of the current legislation.

1. Lack of rules of criminal legal qualification.

The Prosecutor modified the qualifications for both Zlochevskyi and Shevchenko in a manner that appears questionable when considering the analysis of open-source information. There are doubts that the court that approved the agreement checked the correctness of this qualification. However, the court may not have all materials of the case to check whether the parties to the agreement correctly determined the article under which the accused pleads guilty.

The majority of criteria by which a person’s actions are evaluated as an offense are formulated by the criminal law doctrine and are not explicitly outlined in legislation. However, the new draft Criminal Code, widely discussed in professional circles, proposed to regulate these processes in sufficient detail. This can only contribute positively to the clarity in the application of criminal law. The absence of such regulations in the existing criminal law creates the potential for abuse when offering a legal evaluation of the accused individuals’ actions.

2. Limited discretion when selecting penalties through plea agreements.

Discrepancies between the imposed punishment and the gravity of the crime committed suppresses confidence in justice and reduces sense of justice in people. Defendants are also restricted in their choice of sentences they are willing to accept under plea agreements. Quite often, they are most interested in the term of imprisonment, and therefore such agreements have magic figure of a 5-year imprisonment and, as a result, release from serving a sentence. Indeed, according to the law, an individual sentenced to a term of up to 5 years is eligible to request such release.

On the one hand, limited alternatives are not particularly encouraging, but on the other hand, they raise valid concerns that accused never serve real punishments. It is worth recalling that, in addition to imprisonment and a fine, the criminal legislation has a wide arsenal of sanctions – arrest, restriction of liberty, correctional and community service. Also, the amount of the fine can be made corresponding to the amount of illegal benefits or proportional to them.

Therefore, in order to satisfy a public request for an actual serving of a sentence under agreements, the parties should be allowed to determine a more lenient sentence than established by the relevant article of the Criminal Code of Ukraine. Along with that, the court should be given direct authority to assess the proportionality of the agreed sentence.

There is a good opinion of academic lawyer Rasim Babanly, that in criminal proceedings based on agreements, the principles of punitive policy should not be completely ignored. Therefore, it is advisable to limit the lower punishment.

This idea is implemented in the already mentioned draft Criminal Code. Its authors propose that parties to the agreement could negotiate the punishment which shall be:

1) equal to the lower limit of the penalty for the incriminated crime,

2) imposed within the framework of a sanction for a crime that is less serious for the committed crime, or

3) conditioned release from imprisonment for a certain period of time.

Those rules could be implemented in the current Criminal Code of Ukraine through permission, for example, to coordinate the punishment specified in the sanction of a “simple” criminal offense, in which an accused admits their guilt (usually we are talking about the first part of the relevant article).

Another approach is to develop evidence-based recommendations for sentencing. Those recommendations would provide guidance to the parties as well as the court that will evaluate their plea agreement.

3. The practice of confiscation of illegal income is not widespread

 Merely punishing wrongdoers is insufficient to create an effective deterrent against criminal prosecution. Their proceeds from crime must be confiscated.

The HACC has examples of confiscated proceeds but it does not inevitably happen. In the case of the former mayor of Poltava, Mamai, for some unexplained reason, no special confiscation was applied to the amount of UAH 571.7 thousand, which was unlawfully paid as a salary to Mamai’s housekeeper and his inner circle.

There hasn’t been a single instance where the parties have mutually agreed to a penalty in the form of property confiscation. This can be explained, in particular, by the fact that Article 77 of the Criminal Code of Ukraine does not allow imposing an additional penalty in the form of confiscation of property in case of release from serving the main sentence with probation.

What is the solution?

In our opinion, the conclusion of agreements in criminal cases, including corruption ones, should pursue both the goals of speeding up the trial, possibility of confiscation of criminal proceeds and the imposition of proportional punishment.

Hence, it is worth to consider broadening the range of criminal cases in which the option to reach an agreement is permissible. Furthermore, it is essential to deliberate whether participants in such agreements should have the liberty to negotiate the specific sentence that the accused will ultimately serve. For example, increase the amount of fines.

The practice of changing charges by SAPO prosecutors to reach an agreement with the accused is wrong. After all, according to national legislation, criminal qualification must correspond to the evidence collected during the pre-trial investigation.

Defendants engaging in negotiations with the investigation seek to derive personal benefits by either revealing instances of corruption or pleading guilty, thereby making the process more straightforward for the criminal justice authorities. And few of them would agree to 5-12 years in prison. Therefore, it is crucial to establish a genuine mechanism for assessing the fairness of the imposed sentence and to strip offenders of the illicit gains they have acquired.

Due to the volume of the Register, it is difficult to review all assets, as well as the completeness of information about them. But, for example, we could not find the seized assets of Krupchak and shares of PJSC Donetskoblgaz in the Register, although they should have been there.  

According to the specialized law, the Register cannot contain information that makes it possible to identify the location of assets, their owner or user, the identity of the suspect or accused, and data that are not subject to disclosure in accordance with the conditions of international cooperation. 

The validity of such restrictions is questionable because:

1. information about the owners of real estate can be obtained in the public domain through the relevant registers, as well as information about the encumbrance of movable property;
2. location of assets is important for an interested business that has a desire to manage it (considering restrictions on critical infrastructure facilities).

It would also be convenient for potential managers to immediately switch from the Register to the ARMA’s announcement of competitions for asset managers or auctions for the sale of assets. 

Actually, the Register of Seized Assets was created to provide a strategic national approach to asset recovery.  

From a single Register, various institutions will obtain data that will allow forming reliable, consistent, and coordinated national statistics on the real situation with the recovery and management of assets in Ukraine. 

In addition, the Register is aimed at:

1. systematization of information on the application of asset seizure;
2. providing the prosecutor’s office, pre-trial investigation bodies, and the ARMA with up-to-date information on seized assets;
3. transparency of the ARMA’s asset management activities.

In the context of the full-scale invasion, the number of assets that began to be managed by the ARMA has increased significantly. After all, the practice of law enforcement agencies of seizing assets with a Russian or Belarusian trace within the framework of criminal proceedings and transferring property to the ARMA has become widespread so that the owner of the property does not obtain income from the management of these assets until the court decides their fate. 

Of course, this has also increased the requirements for high-quality public monitoring of the Agency’s activities in the field of asset sale and management. 

Therefore, legislative initiatives aimed at opening the Register of Seized Assets remain relevant. They need to be finalized, considering the experience of using this Register in monitoring the activities of the ARMA. We are also waiting for a public report on the operation of this service to find out what the response to the comments mentioned here will be.