Officials and representatives of authorities must declare their assets. However, sometimes we see a discrepancy between the official income and the assets in their electronic declarations.
For example, when an MP buys a luxury car and an apartment in the center of Kyiv, a logical question arises: where does the money come from if the official salary of the MP varies in the range of UAH 35,000-40,000.
According to the law, the situation when an official acquires housing, land plots, and other assets that exceed their legal income by 6,500 non-taxable minimum incomes is considered illicit enrichment. As of January 1, 2022, 6,500 non-taxable minimum incomes are UAH 8,063,250. If an official acquires assets of unjustified origin below this amount, they will be subject to civil forfeiture.
Civil forfeiture is a legal mechanism that allows the court to collect illegally acquired assets to the national budget. Assets are cash, cryptocurrency, any real estate, property rights, etc. In general, the point of civil forfeiture is not to punish the person, but to collect an asset, the legality of which the person could not prove, to the property of the country.
Cases of civil forfeiture are considered by the HACC, and a claim to declare the assets unjustified is filed by SAPO prosecutors. If the case concerns NABU or SAPO employees, such a claim must be filed by the Prosecutor General’s Office. If the defendant is a judge or an employee of the HACC staff, the Solomianskyi District Court will consider the claim.
A claim for civil forfeiture can be filed under two conditions:
- if the official received potentially illegal assets after November 28, 2019;
- if the difference between the value of assets and the legal income of an official exceeds UAH 1,003,500 but does not exceed UAH 8,063,250
Civil forfeiture is an independent procedure that follows the rules of civil proceedings, not criminal. Unlike the latter, a different standard of proof is used in a civil process, and therefore a lower burden of proof. That is, if the prosecutor provides sufficient evidence and the defendant is unable to explain the legality of the origin of the assets, they are likely to be found unjustified.
Moreover, the HACC may seize assets within three days of the prosecutor’s appeal to the court in the course of civil forfeiture. With the consent of the owner or a court decision, they must be transferred to the Asset Recovery and Management Agency. The ARMA may take over assets with a value equal to or greater than 200 minimum wages set for January 1 of the relevant year. As of January 1, 2022, it amounts to UAH 1,300,000. The court determines how the ARMA will manage the assets — sale or temporary management.
The first example of civil forfeiture in Ukraine was MP Illia Kyva. In August 2021, the HACC satisfied the claims of the SAPO prosecutor and collected UAH 1.2 mln from the MP in favor of the national budget. This decision was confirmed by the Appeals Chamber. Thus, the HACC proved that Kyva received this money illegally from leasing a pulp pit. Kyva is now appealing this decision in the Supreme Court.
MP Mykhailo Volynets was also at the epicenter of the civil forfeiture process. However, in this case, the court sided with him and found that Volynets had bought an apartment with legally acquired funds. On February 18, 2022, the Appeals Chamber did not satisfy the SAPO’s complaint and upheld the first-instance verdict.
Recently, it has become known about the third case. It concerns the assets of Maksym Kovbel, head of the Vasylkiv City District Court of the Kyiv Oblast. A preparatory court hearing will take place on February 28, 2022.
The point of civil forfeiture is not to punish the person, but to collect an asset, the legality of which the person could not prove, to the property of the country.
