Update in Approaches to plea bargains in Corruption Cases: Draft Law 12039 Analysis

Given the considerable public stir, the legislators continue their attempts to improve the Ukrainian institution of plea agreements in corruption cases.

In July 2024, we already analyzed the government draft law No. 11340, which aimed to improve the institution of agreements in criminal corruption cases. However, it was precisely that draft law that caused real indignation on the part of some members of the public. So, as a reaction to public pressure, a group of MPs registered another draft law No. 12039, which slightly changed the proposed regulation.

Transparency International Ukraine experts analyzed this document and discovered how the proposed provisions could change the situation.

In general, this draft law contains positive provisions but needs significant revision. It considerably narrows the grounds for concluding agreements, which is unlikely to have a positive effect on the dynamics of applying this tool in cases of high-profile corruption. On the positive side, this draft law allows approving large fines and imposing a punishment less severe than that specified in the sanction of the article. However, it is likely to fail to fulfill the main task—confiscation of criminal assets and deprivation of the right to hold positions.

Brief conclusions:

• the draft law solves certain problems of agreements in corruption cases. For example, the authors increase the amount of fines as an additional penalty and introduce the option of mitigating the punishment, which the person who concluded an agreement will actually serve. This is a positive innovation;
• persons who have committed a corruption crime individually will not be able to apply for a more lenient punishment in the form of imprisonment. This issue needs revision;
• the new draft law does not provide for a quality regulation of the matter of confiscation, neither is there a clarification of the category “public interest,” which judges must assess when approving the agreement. 

Our priority suggestions:

• additionally determine the mandatory application of special forfeiture when concluding agreements in corruption cases if there are relevant grounds, as well as improve the provisions on confiscation of property;
• specify that agreements can be concluded within those criminal proceedings where damages were not caused;
• provide for the possibility of exemption from serving a sentence in cases of corruption and corruption-related criminal offenses;
• grant the court with powers to request the collected materials of the pre-trial investigation or oblige the prosecutor to send such materials to the court together with the indictment and the agreement.

How are these issues settled as of now?

The conclusion of an agreement is always a complex process that requires considering the balance of the interests of society and the suspect (accused). In this process, the exclusive feature of the agreements is the possibility for the latter to avoid serious punishment, and for the state to save time and resources while the case is being considered.

Currently, the Criminal Code of Ukraine and the Criminal Procedural Code of Ukraine establish the following procedure and conditions for concluding an agreement.

• The conclusion of an agreement without any reservations is possible within proceedings concerning minor crimes, minor offenses, grave offenses.
• An agreement in cases involving particularly grave crimes is possible in the event that a person exposes another suspect or exposes the criminal actions of accomplices.
• The term of imprisonment, from which exemption is possible based on an agreement, should not exceed 5 years.
• The imposition of a fine as a punishment is possible only if it is clearly mentioned in the sanction of the article for which the person is being tried.

According to the legislation, large fines cannot be imposed on corrupt officials based on the agreement; confiscation of property is not allowed to be applied in the case of exemption from serving the punishment under the agreement; compensation for damage or losses is not a mandatory condition for approval of the agreement.

In addition, the procedure for concluding and approving the agreement itself remains undeveloped. The law currently does not provide for the possibility of introducing changes to the already concluded agreement, nor does it allow a repeated request to conclude an agreement within the same criminal proceedings. That is, if the court has already refused to approve the agreement for some formal reasons, it is impossible to appeal to it again with a new one.

What does the new draft law propose?

In this new initiative, MPs propose to provide persons accused of corruption and corruption-related criminal offenses with the following options when concluding a plea agreement:

• imposition of a more lenient term of imprisonment compared to that specified in the sanction of the article, provided that another person is exposed, as well as full or partial compensation for damages;
• additional punishment in the form of a fine with an increased amount, regardless of its mention in the sanction of the article—from UAH 340,000 for a minor offense and up to UAH 102 million in the case of a particularly grave offense;
• additional punishment in the form of confiscation of property, in case of exemption from serving a probationary sentence if the parties to the agreement have agreed on an additional punishment.

The new draft law significantly narrows the grounds for concluding agreements in corruption cases, which are defined in Art. 469 of the Criminal Procedural Code of Ukraine. The draft law proposes three such grounds.

The first ground for concluding an agreement is available regardless of the gravity of the incriminated criminal offense, and includes two points:

• exposure by the suspect or the accused of another person (persons) in the commission of any corruption or corruption-related criminal offense if the information about it is confirmed by evidence;
• full or partial (considering the nature and degree of the person’s participation in the commission of the offense) compensation for the losses or the damage caused (if such losses or damage were caused) by the suspect or the accused.

The second ground applies to all crimes committed individually, with the exception of particularly grave ones, includes full compensation for the losses or the damage caused (if such losses or damage were caused) by the suspect or the accused.

The third ground concerns the conclusion of an agreement with the organizers and includes the following conditions in aggregate:

• exposure by the suspect or the accused of another person (persons) in the commission of any corruption or corruption-related criminal offense if the information about it is confirmed by evidence;
• full or partial (considering the nature and degree of the person’s participation in the commission of the offense) compensation for the losses or the damage caused (if such losses or damage were caused);
• exposure by the suspect or the accused of another organizer of a corruption or corruption-related criminal offense.

Amendments to Article 470 of the Criminal Procedural Code of Ukraine propose to establish an additional mechanism for approving a plea agreement by the head of the relevant prosecutor’s office. Amendments are also introduced to Article 474 of the Criminal Procedural Code of Ukraine regarding the improvement of the trial and the approval of the plea agreement, as well as the provision of an opportunity to introduce changes to the concluded agreement before the court goes to the deliberation room.

Risks of the proposed legislative regulation

1. Asset confiscation mechanisms are not improved

We consistently stand for the fact that confiscation of unlawfully acquired assets has the greatest deterrent effect in regard to criminal prosecution of corruption. After all, corruption aims to enrich a person.

Therefore, in the provisions of Art. 474 of the Criminal Procedural Code of Ukraine, additional attention should be paid to whether actions were taken to trace and seize unlawfully acquired assets, as well as whether the agreement provides for special forfeiture of such assets. This mechanism is legitimate in the context of compliance with human rights and international standards.

However, neither the previous draft law 11340 nor the draft law submitted now contain such provisions. Instead, the new draft law makes it more difficult to use confiscation of property as a punishment.

The authors seem to add confiscation of property as an additional punishment in case of exemption of a person from serving a probationary sentence. But they indicate that such punishment may not always be imposed:

“In the case of exemption from serving a probationary sentence as a result of a conviction based on a plea agreement for a corruption criminal offense or a corruption-related criminal offense, and subject to the approval by the parties to the agreement of an additional punishment, an additional punishment in the form of confiscation of property may also be imposed.”

This wording of the provision allows us to conclude that confiscation of property is possible only when the parties have previously agreed on the imposition of a fine or a ban on holding certain positions, which in fact are also additional punishments.

Most likely, this point can be explained simply by a technical mistake of the authors, but it can negatively affect law enforcement, so it needs to be rectified. There should be a possibility of property confiscation without referring to other additional punishments.

Thus, it is necessary to additionally determine the mandatory use of special forfeiture when concluding agreements in corruption cases if there are relevant grounds. In addition, the application of property confiscation upon exemption from serving a sentence should be simplified.

2. Mitigation of the punishment due to the agreement is unavailable to persons who committed a corruption offense individually, and not in complicity. It is unclear whether persons whose actions did not cause any damage can conclude an agreement.

MPs offer different grounds for concluding a plea agreement to persons who have committed criminal offenses with or without complicity.

As a general rule, criminal offenses committed with complicity are considered more socially dangerous. Unlawful behavior involves not one person, but two or more. It is for these persons that the authors of the draft law establish favorable conditions, but not for those who committed the offense individually. After all, according to the new draft law, even when concluding an agreement, the latter cannot be sentenced to a more lenient punishment than that specified in the sanction of the article.

That is, if a person individually received an unlawful advantage, then they cannot claim a reduction in the term of an actual punishment. At the same time, persons who, for example, took part in a scheme to withdraw millions from the national budget for road construction, can apply for such a reduction, although the losses to the state and the offense itself may be greater.

Thus, in the new article 69-2 of the Criminal Code of Ukraine proposed by the draft law, it is necessary to expand the range of grounds for the application of a more lenient punishment than that provided for in the sanction, supplementing it with a reference to Article 469, part 4, clause 2-1 of the Criminal Procedural Code of Ukraine. That is, to enshrine the possibility of concluding agreements with a shorter, but real term of imprisonment for the accused who committed the offense individually.

Neither is it clear from the text of the draft law whether an agreement can be concluded with persons whose actions did not cause any damage. The proposed amendments to Article 469 of the Criminal Procedural Code of Ukraine specify that all the grounds for concluding an agreement are tied to compensation for damages. The use of the phrase “if such losses or damage were caused” in parentheses does not allow answering the question whether such an agreement can be concluded at all.

Thus, a situation might arise when, within criminal proceedings, an agreement with the suspects and the accused is impossible without losses or damage.

The new draft law should clearly define that agreements can be concluded within those criminal proceedings where an offense did not cause losses or damages.

As far as the “suspended sentence” is concerned, which is currently the most common option available to those who conclude a deal with the investigators and the SAPO, even now, there is no single stance in the criminal justice system whether this is possible. Agreements with such conditions are widely approved by the HACC, but prosecutors of local prosecutor’s offices are even brought to disciplinary liability for similar cases.

This results in a different approach as to whether a suspended sentence is possible in such cases and other preferential tools of punishment can be applied. One of the cases was even referred to the Grand Chamber of the Supreme Court. However, it did not cover these issues, having closed the cassation proceedings on formal grounds.

By the way, the previous draft law on improving the institution of agreements contained such provisions.

The law should clearly define that, within the framework of the agreement, it is generally possible to exempt the accused from serving a sentence in cases of corruption and corruption-related criminal offenses.

3. The court is not empowered to request the collected materials of the pre-trial investigation when reviewing the agreement

Currently, the Criminal Procedural Code of Ukraine does not regulate in detail whether the court is obliged to examine all the materials of the criminal proceedings when approving the agreement. Neither does the Code oblige the prosecutor to send the materials of the pre-trial investigation for their assessment by the court.

Since the agreement can be approved at different stages of the case consideration, when the prosecution has not yet presented the entire array of collected evidence, the court cannot verify the qualification of the person’s actions due to the small array of available information. This can lead to an incorrect, at first glance, criminal and legal assessment of a person’s actions.

In addition, without studying the materials of the pre-trial investigation, the court cannot assess whether the prosecutor has taken all measures to recover assets obtained by criminal means to apply special forfeiture to them. Similarly, the court is unable to verify whether there were other accomplices in the offense. This is crucial in view of the proposed special conditions for concluding agreements with persons who committed corruption individually in that they have no obligation to expose other persons.

The court should be granted an opportunity to request the collected materials of the pre-trial investigation, or the prosecutor should be obliged to send all the materials of the pre-trial investigation to the court together with the indictment and the agreement.

Conclusions

TI Ukraine believes that amending the institution of agreements should be approached comprehensively and lacunae should not be allowed. Given that this draft law, already the second one, does not consider a number of important aspects, we recommend that it be finalized.

To do this, it is necessary to:

• additionally determine the mandatory application of special forfeiture when concluding agreements in corruption cases if there are relevant grounds, as well as improve the provisions on confiscation of property;
• expand the range of grounds for the application of a more lenient punishment than provided for in the sanction of the article, by supplementing it with persons who committed offenses individually;
• specify whether agreements can be concluded within those criminal proceedings where no losses or damage were caused;
• clearly define that exemption from serving a sentence within cases of corruption and corruption-related criminal offenses is possible;
• grant the court an opportunity to request the collected materials of the pre-trial investigation or oblige the prosecutor to send the materials of the pre-trial investigation to the court together with the indictment and the agreement.

We are sure that the application of plea agreements can have a positive effect on the prosecution of corruption. However, it is important that such capabilities be clear and predictable in their application. Unfortunately, none of the registered legislative initiatives ensure such a legal need.

Draft law No. 12039 solves some essential problems in the application of plea agreements. However, if it is adopted in this form, then inaccuracies and lacunae will remain, which will cause issues with the interpretation of new provisions and their understanding by different parties to the process and result in the ambiguity of the general attitude to agreements in corruption cases. This will not lead to a clear, effective, and widespread application of agreements in practice.

Possibilities to conclude agreements for corruption and corruption-related criminal offenses must be balanced with the gravity of the criminal offense charged. Both the defense and the prosecution parties must have an adequate understanding of how they will benefit from concluding a plea agreement.