Perception of corruption

Despite the high level of perceptions of corruption as a problem among Ukrainians, only 30% of citizens reported that they or members of their families personally encountered corrupt practices over the past year. Of these, only 23% agreed to engage in the proposed corrupt exchange, while 68% refused.

The survey underscored the relevance of the corruption issue, as the vast majority of Ukrainians perceive corruption as a widespread phenomenon — 87% of respondents. Although this perception is shared across all age cohorts, older individuals (65+) expressed the most critical assessments, with 90% identifying corruption as widespread. By contrast, among youth under 24, the share was somewhat lower — 81%.

How Ukrainians perceive the problem of corruption

As in 2023, the main challenges for Ukrainians today remain Russia’s armed aggression against Ukraine, corruption, and the destruction of infrastructure. Compared to data from two years ago, however, the salience of corruption as a problem has slightly declined — 81% now versus 88% in November 2023.

Assessments of corruption dynamics are divided: 44% of respondents believe that its level has increased, 42% consider it unchanged, and only 7% are convinced that it has decreased compared to the previous year. Reports of rising corruption were more common among rural residents (50%), while in medium-sized and large cities this proportion was lower.

A total of 89% of respondents consider political corruption to be a particularly serious problem, 81% identify business corruption as serious, and only 63% perceive petty or everyday corruption as very or somewhat serious.

At the same time, more than half of Ukrainians (51%) consider the authorities inactive in addressing corruption, and nearly three-quarters (73%) believe that it can only be overcome through systemic reforms. Notably, only 29% positively evaluate the work of anti-corruption institutions, while 38% disagree with such an assessment. Almost half of respondents (48%) regard Prozorro as an effective instrument for reducing corruption, while 27% do not share this view.

A pervasive belief in the inevitability of bribes persists: 55% agree that “nothing can be achieved without them,” and overall, respondents are more likely to reject the notion that issues in public institutions can be resolved without resorting to bribery.

Personal experience and attitudes toward corruption

Despite high levels of perceived corruption overall, only 30% of Ukrainians reported that they or their family members personally encountered corrupt practices during the past year. Among these, about a quarter complied with a corrupt demand, while 7% reported experiencing an attempted bribe solicitation.

Attitudes toward corrupt practices remain ambivalent: nearly half of Ukrainians are convinced that bribery can never be justified, while 23% report that they would always or in most cases ju

Media coverage of corruption

Two-thirds (67%) of respondents believe that the media significantly downplay the scale of corruption in Ukraine. Twenty percent consider media coverage accurate, and only 7% think the extent of corruption is exaggerated in the Ukrainian press.

tify corruption. Those who tolerate “petty corruption” most frequently justify bribes in exchange for better services in state-run medical institutions (53%) or educational institutions (35%). Remarkably, only 15% of those who tolerate corruption admitted the possibility of offering a bribe to avoid mobilization.

Most often, citizens report encountering media coverage of searches, suspicions, and detentions. Forty-one percent mentioned reports of criminal proceedings being opened, while only one in five recalled coverage of court verdicts or legislative changes. Just 13% reported seeing media materials on reforms, which are considered the key to overcoming corruption.

Overall, 72% of Ukrainians are skeptical of news about apprehended officials accused of corruption. Most respondents assume such reports reflect mere PR efforts by law enforcement agencies or that suspects will ultimately “buy their way out.” Only 15% of respondents expressed satisfaction with the delivery of justice upon reading such news.

Importantly, more than half of respondents (60%) consider the most significant indicator of effective anti-corruption efforts to be the number of officials actually punished, including imprisonment or asset confiscation. However, only 30% of Ukrainians reported hearing about cases of punished officials over the past year, and these respondents were more likely to believe in progress in combating corruption and in institutional effectiveness.

Perception of European integration

The highest levels of support for European integration are demonstrated by residents of Kyiv, as well as western and northern regions. At the same time, most citizens are generally aware of both the advantages and the disadvantages of Ukraine’s accession process. 

A clear majority of Ukrainians (86%) consider themselves informed about the EU accession process. Of these, 25% report being well or very well informed, while another 61% indicate a certain level of knowledge of the issue.

As a result, 74% of citizens support Ukraine’s accession to the European Union. The strongest support is observed among residents of Kyiv (82%), the western (80%), northern (78%), and central (76%) regions. By contrast, support levels are somewhat lower in the south (69%) and east (64%). Currently, 6% of Ukrainians oppose EU accession, while 18% remain undecided.

The most frequently cited expectations from EU membership are a better future for children (65%), peace (60%), economic growth (60%), improved living standards and quality of life (59%), and greater employment opportunities (58%). Also, 55% of respondents believe that integration with the EU will help combat corruption in Ukraine, while 54% are convinced that EU membership will foster adherence to the rule of law. Only 2% of Ukrainians see no benefits at all from European integration.

Among the main concerns regarding EU accession, respondents cited outflow of young people (48%), exploitation of natural resources (35%), immigration (31%), and increased bureaucracy (30%). Notably, 30% of respondents still identify potential deterioration of relations with Russia as a negative consequence of Ukraine’s integration into the EU, while 11% believe that the EU itself has no future. Overall, however, respondents associate EU membership with more advantages than disadvantages — 8% report seeing no disadvantages at all.

Forty-two percent of respondents remain optimistic about Ukraine’s accession prospects, believing the process will take up to five years. Nearly one-quarter (22%) estimate the timeline at between 6 and 10 years, while 12% are convinced that Ukraine will never obtain EU membership.

The survey was conducted by the research agency Info Sapiens on behalf of Transparency International Ukraine in June–July 2025. The sample included 1,015 respondents, representative by gender, age, locality type and size, and macro-region across government-controlled territories of Ukraine. Data collection method: telephone interviews (CATI).

This is already the third wave of the survey: Transparency International Ukraine previously presented results in June and December 2023.

This publication was prepared by Transparency International Ukraine with the financial support of Sweden.

Context

On July 22, 2025, Parliament adopted Law No. 4555-IX, which effectively dismantled the independence of the NABU and the SAPO. Under this law, the Prosecutor General was granted the authority to notify top state officials of suspicion, request any materials from the NABU, transfer its cases to other investigative bodies, and unilaterally close proceedings against high-level corruption suspects. At the same time, the Head of the SAPO lost procedural independence and the ability to determine NABU’s exclusive jurisdiction over certain cases.

Although just over a week later, Law No. 4560-IX reinstated the previous provisions ensuring NABU and SAPO’s independence, the government still retains levers of influence over anti-corruption bodies. Moreover, these legislative changes unfolded against a backdrop of systematic information attacks on such institutions. 

As noted by the HACC Chair, such campaigns bear the hallmarks of orchestrated disinformation intended to discredit institutions and undermine public trust. During the monitoring period, the HACC also faced direct manifestations of pressure – from the discovery of wiretapping equipment in employees’ homes to unacceptable public statements by law enforcement agencies directed at judges.

In this context, our report has a dual purpose. First, to objectively assess HACC’s performance and identify areas for improvement. Second, to clearly outline spheres of responsibility for existing challenges — distinguishing problems requiring legislative framework from those that can be resolved through improvements in the court’s internal procedures.

This report not only documents the current state of affairs but also highlights progress made since the previous monitoring stage. It also provides specific recommendations whose implementation would strengthen HACC’s institutional capacity in the face of emerging challenges.

Features of the sixth monitoring period

During the reporting period, our experts attended 969 court hearings, analyzed hundreds of judicial decisions, and examined key trends in the court’s work. We focused on assessing procedural effectiveness, compliance with criminal procedure standards, and the implementation of recommendations from previous monitoring stages.

The findings indicate that, despite external pressure, the HACC continues to adhere to high professional standards. At the same time, systemic problems remain unresolved. Some can only be addressed through legislative amendments, while others require refinement of judicial practice.

One of the most pressing challenges for HACC proceedings remains the ineffective regulation of statutes of limitations. Because of this, the actions of certain corruption suspects are left without proper judicial assessment. Once the limitation period expires, cases are closed and defendants are released from criminal liability, leaving unresolved the key question of whether they in fact committed a criminal offense. Combined with procedural difficulties during investigation and trial, such case closures are particularly damaging for the prosecution of corruption.

At a time when the independence of anti-corruption justice is under systematic attack, it is crucial to preserve objective analysis of the Court’s work and continue supporting HACC’s institutional development to ensure justice and strengthen the fight against corruption in Ukraine.

Summary

The sixth report on monitoring the work of the HACC covers the period from July 1, 2024 to June 30, 2025 — a time of unprecedented challenges for the independence of anti-corruption justice. On July 22, 2025, Parliament adopted a law that effectively dismantled the independence of the NABU and the SAPO, although its provisions were later repealed. 

Amid systematic information attacks and direct pressure on judges, the HACC continued to demonstrate high professional standards, while also encountering systemic problems.

Key achievements

Growing number of cases adjudicated. The HACC shows a stable upward trajectory: the number of cases resolved increased from 55–60 in 2019–2020 to 84–88 in 2023–2024. Notably, the number of convicted individuals rose from 49 in 2022 to 112 in 2024, reflecting the conclusion of proceedings involving a larger number of defendants.

Improvement of the plea bargain mechanism. Since November 2024, new rules on plea agreements have shown a positive effect: 66% of convictions were based on such agreements, UAH 87 million in damages was reimbursed, an additional UAH 97 million and six vehicles were transferred to defense needs. In total, more than UAH 250 million was returned to the state.

Resolving the issue of mobilized corruption defendants. The adoption of Law No. 4496-IX addressed the problem of delays caused by the mobilization of defendants in corruption cases by establishing clear criteria for suspending trials.

Critical challenges

Ineffective regulation of statutes of limitations remains the biggest systemic problem. During the reporting period, 13 individuals were released from criminal liability due to the expiration of limitation periods (five by the HACC and eight by the HACC Appeals Chamber). Our estimates indicate that at least 26 cases could be closed on this basis over the next three years.

Abuse of procedural rights is taking new forms and expanding. In one case, during September 2024 alone, a defense attorney filed 1,426 complaints against alleged inaction by the NABU and the SAPO to the investigating judge, and later, within four days of October, submitted 2,852 appeals against the investigating judge’s ruling in a consolidated proceeding. Overall, during the reporting period the HACC issued 24 rulings on disciplinary liability of attorneys, yet the Qualifications and Disciplinary Bar Commissions (QDBCs) responded insufficiently effectively.

The problem of corruption suspects absconding has intensified — in 13.7% of cases, special proceedings are conducted in absentia. A critical challenge is the shortage of electronic bracelets (only 145 for the whole of Ukraine), along with probable misconduct by public officials facilitating unlawful border crossings.

Recommendations

To Parliament:

• Comprehensively improve legislation on statutes of limitations: establish additional grounds for suspension, extend their duration, and change the endpoint of calculation.
• Introduce mechanisms to counter abuses of procedural rights, including financial penalties.
• Abolish automatic closure of cases due to the expiration of the pre-trial investigation period.
• Determine that the consent of parties is not required to continue proceedings when a judge is replaced.
• Review the provisions on single-judge trials and extend them to civil confiscation cases.
• Provide for mandatory special confiscation when approving plea agreements.

To HACC:

• Ensure thorough and well-grounded verification of damage compensation amounts in plea agreements, and avoid approving them without due assessment of public interest.
• Consistently and systematically exercise presiding judges’ powers to manage proceedings and stop abuses of procedural rights.

To the Government: ensure a sufficient supply of electronic bracelets and take measures to prevent corruption defendants from absconding.

Implementation of these recommendations would strengthen the institutional capacity of the court and increase the effectiveness of anti-corruption efforts.

This report was prepared by Transparency International Ukraine with the financial support of Sweden.

How the tone of ARMA’s communication changed on the issue of reform and legislative changes 

In recent months, ARMA’s reform has become one of the central themes in their communication. Between February 1 and April 16, 2024, ARMA published 176 posts on its Facebook page. Of these, 44 posts—25% of the total—referred in some way to the planned reform and related legislative changes.

At the same time, the intensity of ARMA’s communication on the reform issue fluctuated, with certain periods—such as February 26 to March 14 and April 2 to April 11—showing a complete absence of references to the reform in the Agency’s messaging.

ARMA’s main messages on the reform and Draft Law No. 12374-d from February 1 to April 16, 2025 (with approximate mention counts, as many messages were repeated within a single post):

• Since June 2023, ARMA has been successfully undergoing transformation and reform without donor funding or external assistance (mentioned at least 21 times)
• ARMA was not involved in the development of Draft Law No. 12374-d — “Nothing about ARMA without ARMA” (mentioned at least 12 times)
• Draft Law No. 12374-d contradicts European standards and jeopardizes European integration (mentioned at least 8 times)
• Draft Law No. 12374-d threatens anti-corruption bodies and the entire anti-corruption system (first mentioned on April 15, then repeated at least 5 times)
• Draft Law No. 12374-d is described as corrupt (first mentioned on April 15, then repeated at least 5 times)
• Draft Law No. 12374-d is said to violate 14 articles of the Constitution of Ukraine (first mentioned on April 15, then repeated at least 4 times)
• Draft Law No. 12374-d is said to promote functions that fall outside ARMA’s typical mandate (first mentioned on April 11, then repeated at least 4 times)
• Draft Law No. 12374-d is said to have taken on a political connotation (first mentioned on April 11, then repeated at least 4 times).

Overall, ARMA’s communication on the reform issue, reflecting shifts in tone, can be divided into four distinct periods:

1. February 1 to February 12 — the period before the adoption of Draft Law No. 12374-d, an alternative to the government’s version, as the basis
2. February 13 to March 26 — leading up to the release of the second comparative table for Draft Law No. 12374-d, as approved by the Committee
3. March 27 to April 16 — the period covering ARMA’s communication on the final version of the draft law, which the Committee submitted to Parliament for the second reading and adoption as a whole.

We reviewed all ARMA posts published during these periods and will further examine their key features.

ARMA’s reform-related posts from February 1 to 12

During this period, ARMA published three posts on its Facebook page that addressed the issue of the Agency’s reform. Each post focused on advocating for parliamentary adoption of the government’s Draft Law No. 12374. Alternative proposals were not analyzed in the Agency’s public communications and were mentioned only briefly and selectively.

ARMA’s main messages during this period:

• Since June 2023, ARMA has been successfully undergoing transformation and reform without donor funding or external assistance
• ARMA has already been transformed
• ARMA calls on MPs to support the government draft law within the framework of the Ukraine Facility Plan.

ARMA’s reform-related posts from February 13 to March 26

During this period, the Committee, in collaboration with representatives of state institutions and the expert community, worked on revising and amending Draft Law No. 12374-d, which had been adopted in the first reading.

At the same time, ARMA’s stance on the draft law was still taking shape throughout this period—and gradually shifted toward a categorically negative position.

ARMA’s main messages during this period:

• Since June 2023, ARMA has been successfully undergoing transformation and reform without donor funding or external assistance
• ARMA has already been transformed
• ARMA was not involved in the development of Draft Law No. 12374-d — “Nothing about ARMA without ARMA”
• Draft Law No. 12374-d contradicts European standards and jeopardizes European integration.

ARMA’s reform-related posts from February 27 to April 16 

Over the course of this period, ARMA’s attitude toward Draft Law No. 12374-d shifted into a categorically negative position. The Agency does not support the draft recommended by the Committee in any way and begins to assemble a team of its opponents.

The list of key messages presented in earlier sections was expanded during this period with new, louder, and more provocative statements. ARMA’s stance on the draft law shifted to a categorically negative one, often lacking strong or well-substantiated arguments. Most of these messages were first introduced on April 11 in a post announcing a public event organized by ARMA to discuss the draft law. Subsequently, during and after the event held on April 14, 2025, the Agency repeatedly reiterated these points.

ARMA’s main messages during this period:

• Since June 2023, ARMA has been successfully undergoing transformation and reform without donor funding or external assistance
• ARMA has already been transformed
• ARMA was not involved in the development of Draft Law No. 12374-d — “Nothing about ARMA without ARMA”
• Draft Law No. 12374-d contradicts European standards and jeopardizes European integration
• Draft Law No. 12374-d violates 14 articles of the Constitution of Ukraine
• Draft Law No. 12374-d threatens anti-corruption bodies and the entire anti-corruption system
• –       Draft Law No. 12374-d promotes functions that fall outside ARMA’s typical mandate
• –       Draft Law No. 12374-d has taken on a political connotation
• –       Draft Law No. 12374-d is corrupt.

Below is a list of all relevant posts, including quotes that highlight the key features of ARMA’s communication (original spelling and grammar preserved).

Conclusions 

As a result of the content analysis of ARMA’s Facebook page, we found that the Agency’s attitude toward the overall reform, and particularly toward Draft Law No. 12374-d, currently under parliamentary consideration, evolved over time, becoming increasingly manipulative in tone.

In this analysis, we identified the following key features of ARMA’s communication on the reform topic:

• Throughout the entire period under review, the main message in ARMA’s communication was not advocating systemic reform, but rather the claim that such changes have already been underway for nearly two years—this was the most frequently repeated thesis in the Agency’s posts
• The Agency’s public communication for the said period made no mention of ARMA’s failures or missteps since June 2023, nor of any efforts made to address or learn from them
• Throughout the study period, ARMA continued to support only the government’s version of Draft Law No. 12374, which was rejected by Parliament back in February 2025, and consistently insisted on its further consideration. In its public communication about Draft Law No. 12374-d, which was adopted in the first reading, the Agency focused exclusively on the draft’s shortcomings—without acknowledging any of its positive aspects
• The analysis revealed that ARMA frequently shifted the focus of its communication, at times contradicting its own previously stated positions. The only message that remained consistent was ARMA’s claim that the Agency has already been reformed since 2023. Such an approach to communication by a state institution can hardly be considered constructive.
• Since February 2025, ARMA’s attitude toward Draft Law No. 12374-d has gradually shifted from cautious to categorically negative. Moreover, a significant portion of the Agency’s arguments is based on an outdated version of the draft, as evidenced by the finalized communication theses presented following the public discussion organized by ARMA on April 14.
• As the tone of ARMA’s publications on Draft Law No. 12374-d became increasingly negative, the volume of such communication also grew. By the end of the study period, the number and frequency of posts related to the draft law significantly exceeded those about ARMA’s core activities. This suggests a lack of balance in the Agency’s communication, both in terms of providing comprehensive information about its activities and maintaining objectivity in its messaging. Such an approach falls short of public expectations regarding general approaches to responsible communication by public authorities.
• Today, ARMA firmly opposes the adoption of the current version of the draft law. Throughout its public communication, the Agency consistently advocates for the adoption of the government’s version, while its stance on the version approved by the relevant committee has shifted—from initial calls for revision to claims that the draft violates the Constitution of Ukraine, threatens European integration and anti-corruption institutions, and would enable the return of corruption schemes.

Based on the findings above, it can be concluded that ARMA’s communication over the study period has become increasingly manipulative. The shift in tone—from cautious to overtly negative—suggests that the Agency is promoting a firmly categorical and ungrounded position in its public messaging. Moreover, the Agency’s response to comments from representatives of other state bodies and the public suggests that ARMA’s leadership is not open to criticism directed at the institution.

ARMA’s manipulative and selective communication regarding Draft Law No. 12374-d suggests that the Agency has focused its entire communication strategy on discrediting this particular version of the draft. Despite the positive changes it contains, ARMA’s messaging implies that the draft offers no benefits for the management or sale of seized assets, or for the Agency itself. This position contradicts the assessments and feedback provided by various state bodies and members of the expert community.

You can view the full analysis of all ARMA posts related to Draft Law No. 12374-d in the Ukrainian version of this research.

This analysis was prepared by:

Head of the department:

Kateryna Ryzhenko, Deputy Executive Director of Transparency International Ukraine for Legal Affairs

Authors of the research:

Viktoriia Karpinska, Editor of Transparency International Ukraine

Pavlo Demchuk, Senior Legal Advisor at Transparency International Ukraine

Brief conclusions:

• during the reporting period, the parliament adopted several regulations that improved the legal basis for the court’s work, particularly regarding the single-judge trial of criminal proceedings and the cancellation of time limits for pre-trial investigations in criminal cases without suspects;
• the HACC enhanced the practical application of the “Lozovyi amendments” in joint criminal proceedings, with judges increasingly considering the substantive similarities between “old” and “new” criminal proceedings. The situation regarding the analysis of the elements of criminal offenses has also improved during the assessment by investigating judges of previous criminal-law qualifications concerning interim measures;
• However, there are other urgent problems concerning the HACC’s activities, including the inability to impose fines on lawyers for failing to appear at court sessions, the lack of effective regulation for combating the abuse of procedural rights, the mandatory obligation for the court to close criminal proceedings due to the expiration of the pre-trial investigation period, and the inadequacies in the legal regulation of the institute for exemption from criminal liability and punishment due to the statute of limitations.

What we suggest

For the Parliament:

• the law should stipulate that the consent of the participants in criminal proceedings is not required for the continuation of the trial in the event of a judge’s replacement;
• qualitatively finalize the draft law on the approval of plea agreements;
• eliminate the list of unjustified exceptions to the legislation regarding single-judge trials;
• balance further restrictions on access to court decisions with the principle of transparency in the judicial process;
• expand the grounds for suspending the statute of limitations and proportionally increase criminal liability for certain criminal offenses. And also change the point at which the calculation of the limitation period ends.

For the HACC:

• pay more attention to ensuring the observance of procedure in court sessions and preventing procedural abuses;
• unify the practice in the matter of suspending proceedings, preventing abuses by the defense side;
• unify approaches to assessing public interest when approving plea agreements;
• standardize the practices of the first and appellate instances of the HACC when assessing the validity of a suspicion.

For SE Information Court Systems:

• implement the technical capability to restrict public access to certain parts of court decisions when the trial has occurred in an open court session.

Rules to recognize assets as unjustified

The updated model of recognizing assets (income from them) as unjustified has become a tool for depriving a person of assets that do not correspond to their legitimate income. Under this approach, the state assumes the illicit acquisition of such assets, but does not prove their specific methods of obtaining, and such confiscation applies only to property associated with officials.

A key feature of civil forfeiture is the absence of the need to establish the guilt of a person in committing an offense, as a result of which they obtained certain assets. In such cases, the use of criminal law mechanisms to counter corruption is not always justified and is complicated by the high latency (concealment) of corruption. Because if an official nevertheless received some “kickbacks” or unlawful advantage, and this was ignored by law enforcement agencies, or it happened with their assistance, it is not always easy to prove in court the fact of committing such a criminal offense.

The application of civil forfeiture in accordance with Art. 290, part 2 of the Civil Procedural Code of Ukraine (CPC of Ukraine) is possible if the value of assets varies from 500 subsistence minimums as of the date of entry into force of the law, which is UAH 1,003,500, to 6,500 non-taxable minimum incomes of citizens (as of January 1, 2024, this is UAH 9,841,000). 

Going beyond this higher threshold already leads to criminal liability under Art. 368-5 of the Criminal Code of Ukraine (unlawful enrichment).

In its content, civil and criminal cases on unjustified assets concern the solution of identical situations: the acquisition by an official of assets or income derived from them, which obviously do not correspond to their legitimate income. However, the resolution procedure is radically different.

For example, the head of the AMCU is accused of illicit enrichment. As the head of the Donetsk Regional State Administration, he allegedly acquired 21 real estate objects and a luxury car, registering the property to his wife’s relatives. This entails illicit enrichment because the difference between the value of the specified property and the funds of the official and his wife amounted to UAH 56.2 million. In regard to the assets of the head of Vinnytsia United City Territorial Center for Recruitment and Social Support, the civil forfeiture procedure was applied as he had illegally acquired an apartment worth UAH 1.2 million. 

Therefore, civil forfeiture allows, without convicting a person “beyond reasonable doubt,” to quickly and effectively deprive an official of the property that he/she acquired for illegal income. The standard of proof “beyond reasonable doubt” means that the totality of the circumstances of the case established during the trial excludes any other reasonable explanation of the event that is the subject of the trial, besides the fact that the charged crime was committed, and the accused is guilty of committing it. In civil forfeiture, another standard is used—“preponderance of evidence,” which we will cover in more detail further.

To initiate a lawsuit, the prosecutor of the SAPO or the PGO (in the case of acquisition of unjustified assets by an employee of the SAPO or the NABU) collects the evidence base and forms a civil lawsuit against the official who allegedly acquired unjustified assets. The HACC hears these cases within civil proceedings.

Interestingly, the case is heard not against the person (in personam), but against their property (in rem). That is, it is not the actions of the person that are assessed in regard to forfeiture, but the insufficiency of legal income to obtain the assets. The owner plays a secondary role here.

When resolving such a case, the court must find out the answers to a number of questions. 

1. Does the value of the asset meet the thresholds? 
2. Was the asset acquired after the law came into force?
3. Is the defendant a person authorized to perform the functions of the state or local self-government?
4. Is there a connection between the official and the asset?
5. Is it possible to establish from the evidence that the official had sufficient legal income to acquire these assets?

At the same time, according to civil law, there is a presumption of legitimacy of the acquisition of property rights. But in this category of cases, the HACC formulated a position on the “presumption of the unjustified nature of assets.” The court applies it as follows: if the origin of the funds for the acquisition of the asset remains unknown, the court cannot conclude on the legality of the sources of these funds. That is, from the very beginning, there is a greater probability that the asset is unjustified, until the defendant refutes this, proving the legality of this property.

Difficulties in adopting a law on civil forfeiture

The development and adoption of the draft law on civil forfeiture was very controversial, as the original version offered some “know-how” in which many institutions saw serious risks.

Thus, the first version proposed to extend its effect to assets acquired within four years before the adoption of the draft law. Before the second reading, there was a proposal to change these four years to three, but this did not improve the situation. Effectively, it referred to the application of the retroactive effect of the law in time, which, according to the Constitution of Ukraine, cannot be used in such cases. Therefore, MPs removed this provision; currently, it is possible to recover only assets acquired after November 28, 2019,—the date of entry into force of the law.

By the way, in one of the cases on civil forfeiture of the property of a customs officer, the SAPO prosecutor noted that some assets had signs of being unjustified, but since they were acquired before the law entered into force, a lawsuit cannot be filed.

The Main Legal Department of the Verkhovna Rada also drew attention to the unfounded competition of civil forfeiture and criminal liability for illicit enrichment. There is still an opportunity to avoid criminal liability by artificially “dividing” assets and initiating their recovery within a civil procedure, instead of criminal proceedings.

The competition of processes is not exclusively a theoretical problem. It already has a real practical manifestation in one of the civil forfeiture cases, which concerned the former deputy director of the preventive activity department of the National Police of Ukraine. In this proceeding, funds are considered both as unjustified assets in civil proceedings and as material evidence in criminal proceedings.

However, we have not found any serious fraud with the avoidance of criminal liability through civil forfeiture mechanisms. 

The excessive workload on judges also threatened real implementation of the new legislative provisions since civil forfeiture cases shall be heard by the High Anti-Corruption Court. After the adoption of the law, it was predicted that the HACC would receive such a number of civil lawsuits that it would not be able to cope with, but in fact this did not happen. 

There were many questions about the already mentioned standard of proof. MPs proposed to use a new standard of evidence—“preponderance of evidence,” which was not inherent in the Ukrainian legal system, and its content was not disclosed anywhere. 

This could create a threat of arbitrariness on the part of law enforcement officers and judges since the issue of proving is closely related to the collection of evidence. The law did not detail these processes, which cast doubt on the legality of the civil forfeiture procedure in general because potential defendants did not have any rights during the collection of evidence. This problem, although less acute, is still relevant. The development of judicial practice, which we will cover in more detail further, is used to eliminate it.

MPs did not take all these risks into account, their overcoming turned into a task for judicial case law. Nowadays, we can state that it was successful, for the most part.

HACC case law on civil forfeiture

The first civil lawsuits were referred to the HACC only in 2021. As of September 2024, the court had issued 15 decisions in civil forfeiture cases. The HACC judges refused to grant the lawsuit of SAPO prosecutors twice, partially granted lawsuits 6 times, and fully granted them 7 times. Another 6 cases are pending in the first instance.

Statistics indicate that there are few lawsuits for civil forfeiture. On average, the HACC considers 3-4 such cases per year; this is despite the fact that in total, the Anti-Corruption Court hears about 50 criminal cases per year.

The hearing of civil forfeiture cases takes much less time than the hearing of other corruption proceedings. The average time for their consideration is 70 days, while criminal cases on the merits are heard much longer—more than 508 days per case. 

Notably, despite the rapid process of hearing such cases, the tendencies of their frequent initiation are observed only now. This may be primarily due to the relatively recent launch of the mechanism, since the first lawsuit was referred to the court only in 2021, after the Verkhovna Rada restored the powers of the NACP, which had been recognized as unconstitutional by a well-known decision of the Constitutional Court.

It is the procedures for declaring assets and monitoring the lifestyle of officials conducted by the NACP that should be the primary sources of information about the probable facts of acquiring unjustified assets. Based on the analysis of court decisions in these cases, we see that the declarations and other materials of the NACP form the basis of the evidence base of SAPO prosecutors to prove the unjustified nature of the asset. 

In addition, the number of lawsuits for civil forfeiture was clearly affected by the suspension of the declaration by officials. Therefore, restoring this obligation and the intensified verification of declarations may further increase the number of lawsuits.

In 2024, SAPO prosecutors referred several lawsuits, with record high value of assets. In particular, on May 10, the prosecutor filed a lawsuit for almost UAH 7 million regarding the recognition of the assets of the head of a territorial service center of the Ministry of Internal Affairs in the Dnipropetrovsk region as unjustified. Earlier, in March, prosecutors filed a lawsuit against the head of one of the sectors of the Kyiv customs for confiscation of more than UAH 8.6 million. The HACC has already considered and granted both of these lawsuits.

A striking indicator of the performance of the HACC in such cases is the value of confiscated assets. In more than 3 years, through the mechanism of civil forfeiture, the Anti-Corruption Court has recovered more than UAH 44.5 million in 13 positive cases for the SAPO in favor of the state.

As of September 2024, the HACC is hearing 6 cases on civil forfeiture, and the total amount of the stated lawsuits reaches UAH 23.6 million.

Most often, the SAPO requests to confiscate funds that make up the value of unreasonably acquired real estate. As of September 2024, 40 objects (land plots, apartments, houses, parking spaces) were requested to be recovered. Twice did such motions refer to the collection funds per se; 8 vehicles were requested to be recovered. 

The entities from whom such property is confiscated have also been diverse. As of September 2023, the defendants in civil forfeiture cases were 8 law enforcement officers, 5 customs and tax officers, 2 MPs, 2 local council members, 2 migration service officials, 3 officials of the territorial recruitment center, 1 judge, 1 official of the service center of the Ministry of Internal Affairs, and 12 private individuals.

We can state that the number of lawsuits for civil forfeiture is increasing, and this tool gets applied to various entities. Moreover, the pace of hearing such cases is indeed quicker than that of criminal cases.

Peculiar features of hearing civil forfeiture cases

As of September 2024, 11 of the 15 decisions were appealed to the HACC Appeals Chamber: 1 decision was changed, 8 were upheld, and 2 are still pending in the appellate instance. 

Although there are not so many decisions on civil forfeiture, we can already single out certain problems of this procedure.

Level of regulation of the evidence collection process is lower than in the criminal process

As a general rule, the NABU and the SAPO are engaged in the collection of evidence for civil forfeiture cases. In some cases, these functions can also be performed by the SBI and the Prosecutor General’s Office, in particular when the lawsuits relate to NABU or SAPO employees.

In addition, the NACP plays an important role as well, which, in cases of detecting unjustified assets, initiates the issue of their recovery before the above-mentioned authorities.

The procedure for collecting evidence is not clearly regulated, and this problem was known when the draft law on civil forfeiture was being developed. The legislation provides for the right of the above-mentioned bodies to collect evidence through submitting requests, obtaining information from registers and other databases, as well as an opportunity to review certain information provided by various public authorities. But this does not prevent the defendants from questioning the procedure for collecting evidence by SAPO prosecutors.

Therefore, in some cases, the court did not consider the collected information due to violation of the rules for collecting evidence. In the case against Viktor Tkachenko, the deputy head of one of the departments of Odesa Customs, the court did not consider the explanations of certain individuals who had been interviewed by NABU employees. The law does not directly allow such an interview, and therefore the court cannot accept the explanations received.

This approach of the HACC brings certainty to the processes of collecting evidence, and this is, undoubtedly, a positive thing given the blurred nature of some provisions of the law.

Thus, the problem of uncertainty in the rules for collecting evidence to confirm that officials have acquired unjustified assets is solved by case law. However, to prevent different approaches to assessing the sources of evidence, it is necessary to structure the case law on these issues or to regulate them within legislation.

Assessing the value of assets, the amount of legitimate income and expenses

The key issue when hearing cases is the assessment of the value of assets compared to the legitimate incomes of officials.

Within the civil forfeiture procedure, unjustified assets, the value of which varies from UAH 1,003,500 to UAH 9,841,000 (in 2024), are recovered. Going beyond these thresholds is grounds for dismissal of the lawsuit. 

The prosecutor filed a lawsuit for confiscation of part of the cost of the UAH 1.46 million apartment against the spouses, who were officials of the Novomoskovsk District Department of the National Police. In the process of hearing the case, the court recognized only UAH 922,500 as unjustified assets, that is, less than the amount established by law, and therefore dismissed the prosecutor’s lawsuit to recover these funds.

By filing an appeal, the prosecutor argued that such a court refusal is unlawful because the value of unjustified assets, in her opinion, is a filter only at the stage of accepting the lawsuit for consideration. And if the court recognizes the lawsuit as justified only in part, it must still grant it and recover assets that are determined by law to be less than the established amount. However, the HACC Appeals Chamber did not agree with this position of the prosecutor.

The minimum amount of unjustified assets established by law does not apply only if it is not the assets that are confiscated, but the income from them. An example is the case of the assets belonging to the deputy director of the Department of Preventive Activities of the National Police. After the funds on his deposit accounts were recognized as unjustified, namely UAH 2,300,800 and USD 35,481, the SAPO prosecutor filed a lawsuit to recover UAH 399,070.06 and USD 314 of payments on the deposit from these funds, and the court granted it.

When assessing the amount under unjustified assets, the court calculates the difference between the maximum possible legal income and reasonable expenses. For example, in the case concerning the apartment of the head of the customs clearance department at the Horodok customs office (the Lviv Customs of the State Customs Service), the court calculated the difference between legitimate income and expenses for the purchase of real estate and vehicles. The court also considered the materials of the State Statistics Service on average total expenses per month per household (family) in different years. 

Article 290 of the Civil Procedural Code of Ukraine includes wages, fees, dividends, interest, royalties, charitable assistance payments, pensions, income from the sale of property, savings, savings in foreign currency, precious metals, and other non-prohibited income.

The primary source from which calculations of legitimate income are made is the official’s declarations for the periods in which the asset was acquired. To calculate them, the court adds the incomes specified in the declarations for the year of acquisition of the asset and the one before it. Monetary assets are measured considering the reporting period when the asset was acquired.

When calculating, the court does not consider those funds of the person that have not changed after the acquisition of the asset; otherwise this should be reflected in the relevant declaration. When explaining where additional funds come from, officials usually provide the court with evidence of loans, financial assistance, etc. However, the court does not always accept it, assessing the reality of such liabilities. 

This was true for the case of a city council member in the Dnipropetrovsk region, who acquired a house and a land plot for UAH 2.4 million, received on loan. The court questioned the reality of the loan of UAH 2.4 million, since it took place immediately after the defendant and the lender got acquainted due to their allegedly friendly relations and without any guarantees of return of funds (surety bonds, pledge, etc.). The same was true for the case of the Odesa customs officer.

Sometimes such documents are still considered by the court and become the basis for partial granting of lawsuits. Sometimes the HACC dismisses the SAPO prosecutor’s lawsuit altogether if the latter could not prove that the value of the unjustified assets of the official exceeded the threshold of UAH 1,003,500.

Thus, reasonable expenses also play an important role in the proving process. First, the court calculates the person’s lawful income, from which reasonable expenses are then deducted. The result is the value of the unjustified asset.

The court shall form the amount of expenses considering the documented expenses of the person. In addition, to explain them, the HACC also assesses expenses from the perspective of common sense, when it is impossible to calculate the total household expenses. Therefore, the amount of expenses established while hearing the case does not include the undocumented expenses for food, clothing, utilities, housing, transport, healthcare, etc.

Such difficulties could be avoided if the prosecutor interviewed the potential defendant. However, there are a few caveats to this. 

Firstly, the prosecutor can receive an explanation from a person by law only with their consent and only to clarify the grounds for representation in this case. That is, the prosecutor has no powers to gather testimony as evidence in a civil forfeiture case. 

Secondly, such an interview may lead to the fact that potential defendants will sell or re-register a potentially unjustified asset before the lawsuit, that is, it will complicate the case. However, if the prosecutor files a lawsuit based on the results of the lifestyle monitoring, then when establishing the discrepancy between the standard of living and the income of this person, the NACP notifies them of such a fact and gives them an opportunity to provide a written explanation within ten working days. 

While in public service, individuals should pay special attention to documenting both income (through the submission of e-declarations) and expenses. To improve the quality of the lawsuits filed, it is necessary to consider information about the expenses of the person, including by clarifying the position of the potential defendant. To this end, prosecutors should be granted relevant powers by law. 

Form of recovering unjustified assets

Contradictory in practice was the question of the form of recovering the asset: in its value or in its kind. 

The literal interpretation of Art. 292 of the Civil Procedural Code of Ukraine says that if an asset is recognized as unjustified, it should be recovered in whole or in part. However, if it is not possible to separate such a part, then its value is recovered. Similarly, the value of the asset is recovered in the case of effective impossibility to confiscate the unjustified asset, for example, when this property is no longer in the possession of the defendants. 

SAPO prosecutors file lawsuits to recover the asset itself, its value, or the money spent on its acquisition. The legislation does not provide under which conditions and when it is appropriate to use a particular method of protection, but the level of interference with the rights of the defendant directly depends on the choice of such a method.

It means that over time, the value of assets may increase due to the usual market price increase or improvement.

SAPO prosecutors usually request to recover not the asset itself, but its value or part of the value at the date of acquisition (according to Art. 290, part 3 of the Civil Procedural Code of Ukraine). This approach to civil forfeiture is the most liberal and prevents accidental recovery of legitimate assets.

But the problem is that it is about collecting the amount “as of the date of acquisition,” and this allows officials to make money on market fluctuations in the price of assets (mostly real estate), which can also be considered income from an unjustified asset.

This happened in the case of the head of a Lviv Customs Department, who was charged UAH 1.86 million, that is, the cost of the apartment as of the date of its acquisition. However, as of the date of the decision, the average market value of such a three-room apartment of 103.3 square meters was more than UAH 5 million. The difference is huge—more than UAH 3 million.

But there are two cases in the case law of the HACC, where the prosecutor asked to recover the assets themselves, and not their value. One of them ended with a refusal to recognize the assets as unjustified and, accordingly, to recover them, while the other was more effective.

This second case concerned the assets of an Odesa customs officer. The court decided to confiscate, among other things, an apartment, but within its value at the time of acquisition. The Appeals Chamber changed the form of confiscation to the recovery of only the amount of money. After all, significant improvements (repairs) were carried out in the apartment, but not at the expense of unjustified assets, which the defendant proved.

Interestingly, on June 20, 2024, in the case of civil forfeiture of assets belonging to the head of the Lviv Customs Department, the Supreme Court made a significantly different conclusion. The court pointed out that the indication of the value is important for the qualification of such an asset as unjustified, and not for its recovery into the national income. Therefore, the courts do not need to indicate the value of the asset or determine a certain amount of money within which a lawsuit will be filed to recover the property. That is, it is necessary to recover not the value of the asset established as of the date of its acquisition, but the property.

6 HACC decisions to grant the prosecutor’s lawsuit for the recovery of assets (other than monetary assets) relate to the recovery of their value as of the date of acquisition or recovery of the asset within a certain amount. That is, we are talking exclusively about the money spent on the acquisition of these unjustified assets.

Therefore, this conclusion of the Supreme Court contradicts the case law of the HACC and obviously puts the defendants in a much worse position, since it allows the confiscation of the asset with all its improvements and increase in value.

International standards of confiscation without a verdict interpret that in the case of mixing property, confiscation of its illegal part is allowed. 

The opinion of the Supreme Court as of June 20, 2024, does not consider various situations where a legitimate asset can be mixed with an unjustified one. Therefore, this may cause a dangerous precedent for an overly repressive and indiscriminate mechanism of civil forfeiture. 

But we should expect that the Supreme Court will provide a more detailed conclusion in another case, which, unfortunately, the Grand Chamber of the Supreme Court refused to hear. On October 21, the Specialized Anti-Corruption Prosecutor’s Office announced that the Supreme Court concluded this case, upholding the HACC’s decision as legal. However, at the time of publication, the full text of the decision had not yet been released.

In this proceeding, the prosecutor filed a lawsuit to recover not the controversial apartment itself or its value, but the funds used for the purchase. The HACC recovered a part of the value of the asset, recognized as unjustified, and the HACC AC upheld this decision.

Therefore, the Supreme Court faces important questions about the possibility:

• for the prosecutor: to file a lawsuit for the recovery of funds used to purchase unjustified assets, and not the asset itself;
• for the court: to recover the difference between the value of acquired unjustified assets and the maximum possible legal income of the official;
• the prosecutor: to file a lawsuit against another individual or legal entity (and not exclusively against an official) if the issue of recovery of assets from such persons is not brought before the court.

We hope the Supreme Court’s answers are well-founded and comprehensive, guiding the practice of civil forfeiture cases in the right direction.

In our opinion, it is more rational to recover an unjustified asset rather than its value, but only in cases where no permanent improvements have been made to it for legitimate income. This will help prevent the opportunity for officials to make money on market fluctuations in the price of assets.  

If it is impossible to separate a “legitimate” asset from an “unjustified” one, then it will be rational to confiscate the market value of the unjustified part. Similarly, when the defendant sold an unjustified asset, income from its sale or funds in the amount of the market value at the time of alienation should be subject to confiscation if the asset was sold free of charge or at an underestimated cost.

Establishing the link between the official and the asset

Recognizing an asset as unjustified is possible only if a link is established between it and the official. This connection can be displayed in the direct ownership of an asset by a person, the nominal ownership of another person on the behalf of the former, as well as in actions identical to the disposal of assets.

Proving this connection is one of the most difficult tasks SAPO prosecutors face.

The substantiation of such a connection is based on the testimony of witnesses (asset sellers, nominal owners, relatives), information about telephone connections of officials, video recordings of public spaces, chats from messengers, etc.

When assessing the fact of acquiring unjustified assets, the court is guided by the standard of proof “preponderance of evidence.” It is the logical errors in the positions of the parties that become key benchmarks for judges when recognizing a fact as more likely.

For example, in the well-known case of the “pulp pit,” former MP Illia Kyva tried to prove that he owned the property legally, and the sale of the asset, for which he received unjustified UAH 1.25 million, was committed fraudulently, without his knowledge. But the judges critically assessed this statement and questioned the reality of the transaction of leasing the pulp pit because the company that rented it did not use it.

Describing the link between the apartment and two parking spaces with the former head of the Odesa customs, the court also found inconsistencies in his statements. The defendant stated that the property was purchased by his mother, a retiree, who had lived there since 2020. However, from the interrogation of the seller and the tracking of telephone connections, it was established that the defendant himself was engaged in the search for real estate and its registration. In addition, from 2020 to 2022, the apartment was under renovation, which would not allow the mother to live there. The court also questioned the fact that, having no cars, the defendant’s mother purchased two parking spaces. In this case, the HACC established that the mother was only the nominal owner of the property, and the actual user was the official himself.

The most difficult issue in this category of cases is ensuring the rights of third parties, actual owners of assets, which the prosecutor considers unjustified.

Practice shows that one of the most common ways to disguise unjustified assets of officials is their nominal ownership by a person who is not an official. Under these conditions, the court must analyze the financial capacity of both to acquire the controversial asset.

In one of the cases, the defendant did not deny the acquisition of a three-room apartment in Lviv as a gift from her parents. The court concluded that her financial resources and her parents’ resources would not be enough to purchase an apartment. The connection between the official and the asset, according to the court, was expressed in the “direct method of acquiring assets, which at the same time is indirect” because the gifting of the apartment took place the day after the purchase by the mother. The Appeals Chamber agreed with this wording and all the consequences derived from it. This was also confirmed by the Supreme Court.

However, such categories of cases raise many questions because depending on the type of connection with the asset, the court decides whose property status is subject to assessment. At the same time, the assessment of the financial capacity of third parties is not directly provided for by law and, although it is not key in confirming the ownership of the controversial asset by the official, it still becomes a crucial circumstance in such cases.

The legitimacy of assessing the financial position of third parties cannot be questioned. At the same time, the court is often limited in its ability to verify the possibility for a third party to acquire the controversial asset because this person is not obliged to declare the assets. Therefore, the law could clearly regulate that the receipt of information by the court from the formal owner of the asset about their income will not be an interference with privacy if the prosecutor has proved the connection of this person with the official.

Enforcement of HACC decisions

As of the first half of 2024, the HACC issued 8 enforcement orders for the recovery of unjustified assets from 9 persons. 2 out of 9 enforcement proceedings have been completed. 7 proceedings are still pending.

Our study once again proves that the lion’s share of problems of legal proceedings concerns the enforcement of decisions. We have already studied the enforcement of HACC verdicts with confiscation, and its effectiveness leaves much to be desired. A similar situation is observed in this case. The search for the property of dishonest officials who skillfully disguise it becomes a serious obstacle to the recovery of unjustified assets into the state income for their legal distribution.

The average duration of open enforcement proceedings is almost a year. Notably, the first HACC decision on civil forfeiture in the case of the “pulp pit” has not yet been enforced, although former MP Kyva has already died. Enforcement proceedings were opened on December 13, 2021, and as of September 2024, in accordance with the Automated System of Enforcement Proceedings, they were not completed.

Interim relief in the form of seizing the controversial property is used quite often, but not always.

For example, in the “pulp pit” case, such measures as the seizure of funds (unjustified income from the lease of real estate) were not applied. The same situation is with the couple of Kharkiv tax officials, who acquired an unjustified house and a land plot. Interim relief measures were not applied to this property or funds.

The HACC statistics and the court register allow observing a tendency to increase the number of applications for interim relief. Thus, in 2021, 2022, prosecutors did not file any such application; in 2023, they filed five, and in 2024, there were six such applications.

That is, if these assets are not seized, for example, within criminal proceedings, the lack of interim relief may cause serious obstacles to the confiscation of unjustified assets or their value, given the workload and related problems of the executive service.

However, the fate of open enforcement proceedings, where the controversial assets were seized, remains in question; the decisions on their recovery entered into force, but the assets were never fully confiscated.

The executive service does not provide information on how it enforces certain decisions of the HACC, so it is currently impossible to find out for sure what becomes an obstacle to replenishing the treasury with unjustified assets. We can state that the problem of non-enforcement or poor-quality enforcement of HACC court decisions on asset recovery can turn into a systemic one.

Conclusions

The tool of recognizing assets as unjustified and recovering them into the national income (civil forfeiture) is becoming widespread in Ukraine. This is evidenced by the increase in the number of SAPO lawsuits against officials in this regard. 

However, there are certain procedural problems that can be solved either by changes in legislation or by the development of case law. Unfortunately, the current state of enforcement of decisions on civil forfeiture is difficult to track, which requires increased public attention to this stage.

The analyzed case law of the HACC and the Supreme Court in the issue of civil forfeiture allows formulating the key features inherent in these processes, as well as to offer opportunities for their development.

1. Civil forfeiture cases are marked by lower regulation of the evidence collection process compared to criminal proceedings. The problem of uncertainty in the rules for collecting evidence to confirm the acquisition of unjustified assets by officials is solved by case law. However, to prevent different approaches to assessing sources of evidence, the case law needs to be structured.
2. Questions remain in terms of assessment of the value of assets, the amount of legitimate income and expenses. While in public service, individuals should pay special attention to documenting both their own income (through the submission of e-declarations) and expenses. To improve the quality of the lawsuits filed, the prosecutor should be allowed to conduct a preliminary interview of the potential defendant on expenses and income at the legislative level. 
3. Undefined forms of recovery of unjustified assets. Confiscation of an asset with improvements is possible only if the prosecutor has proved the unjustified nature not only of the asset, but also of the improvements made (in particular, the funds used for them). In the case when the defendant has already sold an unjustified asset before confiscation, it is necessary to recover income from its sale or, if the asset was sold free of charge or at a lower cost, the market value at the time of alienation. But as a general rule, it is necessary to confiscate the unjustified asset itself, and not its value at the date of acquisition.
4. Difficulties in establishing the connection between the official and the asset are still relevant. The legitimacy of assessing the financial position of third parties cannot be questioned. However, the court often cannot verify the possibility of a third party to acquire the controversial asset, since they are not obliged to declare the assets. Therefore, the law should clearly regulate that the receipt of information by the court from the formal owner of the asset about their income will not be an interference with privacy if the prosecutor has proved the connection of this person with the official.
5. There is no public communication on the enforcement of decisions on civil forfeiture. The executive service does not provide information on how it enforces certain decisions of the HACC, so it is currently impossible to know for sure what becomes an obstacle to replenishing the treasury with unjustified assets. The issue of non-enforcement or poor-quality enforcement of HACC court decisions on material recovery of assets may turn into a systemic one. 

In the future, the tool of civil forfeiture might still develop, in particular in terms of expanding the grounds for its application. The Asset Recovery Strategy, approved in August 2023, proposes to expand the application of confiscation of unjustified assets. However, based on the analysis of the ECHR decision in the case of Gogitidze and Others v. Georgia, we reiterate that such measures should be implemented in compliance with human rights standards.

In addition, the tool of civil forfeiture should extend to assets acquired by criminal organizations if they cannot be recovered through criminal proceedings. In April 2024, the EU adopted Directive 2024/1260 on asset recovery and confiscation, which introduced such a measure. At the same time, it is necessary to consider such factors as the incommensurability of the value of the property with the legitimate income of the owner, the lack of a legitimate source, and the owner’s connection to criminal organizations. Considering these new European provisions and expanding civil forfeiture are important factors because of the need to harmonize Ukrainian legislation with EU law. 

Existential problem of property confiscation

The UN Convention against Corruption obliges states to apply confiscation only to assets that are of a criminal nature, that is, the proceeds of crime, as well as property that was used to commit these offenses.   However, an analysis of national jurisprudence shows that confiscation as a punishment is used to some extent to deprive a person of the opportunity to enjoy improper advantage, for example, in situations where the prosecution did not try to prove the criminal nature of the property acquired by the convicted person. In this case, it is impossible to apply special confiscation, and the court can only apply confiscation of property as a punishment.

The confiscation of property as a form of punishment under Ukrainian law has long been criticized. This is a legacy of the Soviet regime, inherent in many countries of the former USSR.

For example, Latvia faced a similar problem. At one time, the ECHR stated in the decision of Markus v. Latvia that the Latvian national confiscation legislation was vague and unpredictable, it did not provide the necessary procedural guarantees and did not guarantee protection against arbitrariness. Therefore, there was a violation of Article 1 of Protocol No. 1 to the Convention.

That is, for a lawful confiscation of property, it is necessary to prove its connection with the offense — so that the accused clearly knows which asset is confiscated and on what grounds.

Some academics also criticize the Ukrainian model of property confiscation. Their arguments refer to inequality in financial situations, allegedly, a person who has assets to confiscate loses much more than one who has no assets to confiscate.

The latter point is also illustrated by the practice of enforcing HACC decisions. In some cases, the state executive service failed to enforce a decision on confiscation due to the lack of property of the convicted persons or the lack of access to property in the temporarily occupied territories.

This is exactly what happened in the case of a judge of the Sievierodonetsk City Court of Luhansk Oblast, who was convicted of receiving a bribe of USD 4,000 for adopting the “right” decision. The response of the enforcement service indicated that he did not have any movable and immovable property, and the funds were not enough even to cover court costs. In another case, the state managed to recover almost UAH 400,000 from the confiscation of the property of a convicted judge of the Mizhhiria District Court in Zakarpattia Oblast.

Another interesting example is when searching for the car of the director of the State Enterprise Hutianske Forestry, law enforcement officers found UAH 92,900 and USD 5,700 of cash. The prosecution did not try to prove its criminal nature, but by convicting this person for bribery of a detective, the court confiscated the money under the rules of confiscation as a punishment. In the same case, USD 100,000 as a bribe was specially confiscated.

There is also a problem with the application of confiscation when concluding agreements. Namely, if the court approves an agreement under which a person will be exempted from serving a sentence, then in accordance with Art. 77 of the Criminal Code of Ukraine, the parties to the agreement cannot agree on the confiscation of property as an additional punishment.

This all points to the need to revise legislative approaches to the understanding and the scope of confiscation of property as a punishment. Convicted corrupt officials must compensate for losses, as well as lose the proceeds of crime, and these processes must take place lawfully, without the risks that the state will apply unlawful procedures.

How does the HACC decide which property to confiscate?

Most often, choosing between full or partial, the HACC prefers the confiscation of all property. We see this in the statistics: out of 44 publicly available verdicts of the court of first instance, in 40 cases, confiscation of all property was imposed on persons (71%) versus 16 cases of partial confiscation (29%).

The HACC takes different approaches to partial confiscation. It mainly takes place through a free transfer of half of the convicted person’s property to the state. We have identified 10 such cases. In 5 cases, the court confiscated specific items, such as cars, land plots, houses, etc. One case concerned the confiscation of all property except half of the apartment.

The legislation does not regulate how to decide whether to confiscate all the property of the convicted person or a part of it. Considering this, judges are guided by the general principles of sentencing provided for in Art. 65 of the Criminal Code of Ukraine, as well as the criteria developed by practice, including:

• the sizeof the bribe received;
• the amountof the damage caused;
• committing an offense undermercenary motives (in particular, the amount of a bribe is UAH 5,000);
• significantpublic danger of the offense and its special graveness;
• the property statusof the accused, etc.

But judges do not always use such arguments. For example, the HACC ordered the full confiscation of property of a convicted judge of the Babushkinskyi District Court of Dnipro for receiving a bribe of USD 15,000 since “this type of punishment is directly provided for in the sanctions of these articles.” This is not the only case when HACC judges do not resort to a clear explanation of the reasons for applying a certain amount of confiscation.

There are other examples. In the case of bribery of the acting head of the State Agency for the Management of the Exclusion Zone by the ex-director of the State Enterprise Association Radon, the court decided to confiscate all property except housing since the accused had two minor children. A similar situation was in the case of embezzlement of the property of PJSC Agrarian Fund, where the convicted person’s house was not confiscated due to the fact that 5 people lived in it.

In certain cases, special attention is paid to the role of the convicted person during the commission of an offense. Therefore, often the perpetrators of crimes are ordered the confiscation of all property, while the accomplices get half of their property confiscated.

HACC judges do not always impose confiscation of property even in cases where it is defined in the sanction of the article as an additional, but not mandatory punishment. This can be explained by the fact that confiscation (as a general rule) is imposed when a grave or especially grave mercenary offense has been committed. It can also be imposed for offenses against the foundations of the national security of Ukraine and public safety, regardless of their graveness.

The choice whether to impose confiscation is granted to the court by the sanctions of Articles 365-2 and 369 of the Criminal Code of Ukraine. Judges do not clearly establish in all cases whether the accused receives any property advantage from the commission of an offense.

For example, in the case regarding the accusation of a Poltava Regional Council member and one of the managers of the ME Poltavapharm in providing police officers with a bribe of UAH 35,000, the court did not establish the facts of enrichment of convicted persons from the offense, so it did not impose confiscation on them. The court also took into consideration the presence of dependants.

In contrast, in the case of a Moldovan citizen who was found guilty of bribing a military prosecutor for lifting the arrest of the Sky Moon vessel, the court found that the offense was mercenary, but did not impose confiscation.

Thus, the practice of imposing a punishment in the form of property confiscation is not sustainable, which creates legal uncertainty and the risk of abuse. 

How does the property confiscation of top corrupt officials replenish the national budget?

As of December 31, 2023, there were 24 HACC verdicts in the public domain, which entered into force and which were intended to confiscate property. But the verdict and its entry into force are only the first steps in the procedure for enforcing the sentence.

The procedure for the enforcement of a sentence in terms of confiscation consists of several steps provided for by the Procedure on the organization of enforcement of decisions.

Firstly, the court has to draw up a writ of execution and send it along with a description of the convicted person’s property (if any) to the enforcement service. After that, the state executor must open enforcement proceedings. The High Anti-Corruption Court usually quickly draws up such writs and sends them for enforcement, as the period from the date of entry into force of the sentence and the opening of enforcement proceedings in most cases does not exceed 30 days.

Next, the executor seizes the property that will be subject to confiscation. In addition, the executor can search for property that can be confiscated by sending queries or analyzing databases.

Search for property that can be confiscated

Executors are often limited in their ability to obtain information about the property of convicted persons, in contrast to law enforcement officers who have public and secret investigative (search) actions at their disposal and can also apply to the ARMA for this purpose.

However, the quality of the Agency’s asset tracing is also difficult to verify due to the lack of the necessary statistics. In addition, the practice of the ARMA to report on the recovered property on its own website allows for the expression of doubts about the possibility of effective seizure and confiscation. This is despite the fact that the Agency, at our request, did not want to share information about the volume of property that is searched for in cases where the HACC adopted final decisions.

An important role in the quality of property search by state executors is affected by problems with administrative powers and the quality of their use. We are talking primarily about problems with access to certain registers and databases, the complexity of communication, etc., which Human Research has already analyzed in the Report on the results of the study of the field of enforcing decisions of courts and other bodies in Ukraine.

For its part, the State Enforcement Service within the framework of enforcement proceedings has the opportunity to seize property without hindrance, but before that it must be found and described.

Seizing the searched assets is a challenge

Of course, one should not hope that the property of the defendant, not seized after a suspicion notice was served, will remain in their ownership after the verdict entered into force. That is why Article 170 of the Criminal Procedure Code of Ukraine imposes on an investigator the obligation to search for all property that can be confiscated in the future, as well as to apply to the court with a motion to seize these assets.

Public data indicate that at least in 5 cases out of 44 publicly available decisions where the HACC delivered a verdict with confiscation, the property of suspects or accused was not seized.

For example, in the case of extortion by an SSU employee of a bribe of USD 55,000, the HACC ordered confiscation of all his property, but there is no information about the seizures of such assets in this proceeding. The absence of restrictions on the disposal of property is also indicated by the fact that the judges in the verdict did not decide on the fate of the seizures. We see a similar situation in the case against a judge of the Kalanchak District Court, convicted of bribery, and a similar case against a judge of the Mukachevo City District Court. Moreover, according to the declarations of the latter, he owned money savings, and while the cases were heard, he sold his car and bought another one, but registered it to a relative.

The lack of property seizures is a serious problem. Persons involved in cases, when they learn about their status, can alienate and take other actions to avoid punishment in the form of confiscation. Under such conditions, it is difficult to imagine that the state executive service is searching for and seizing property.

A similar situation occurred in one of the NABU cases, but then the Bureau had the authority to apply to the court with claims for invalidation of agreements. The case reached the Supreme Court, where the judges recognized that the conclusion of contracts should not be used to avoid a seizure or possible confiscation. It upheld the claim of the NABU despite the fact that by the decision of the CCU, after filing a claim, the fact of a pre-trial investigation body having such powers was declared unconstitutional.

Considering the legal positions of the Supreme Court and the Constitutional Court of Ukraine, SAPO prosecutors need to counteract such cases of withdrawal of property from possible confiscation through the instruments of agreement invalidation.

But with special confiscation, such problems can be avoided because under Art. 96-2, part 4 of the Criminal Code of Ukraine, property can be confiscated from a third party, if they knew or should have known and could have known that such property could be subject to special confiscation.

Public data on confiscated property are barely collected

The quality of enforcing confiscation decisions is also difficult to verify. When researching this topic, we sent more than 20 inquiries about the results of enforcing HACC sentences to the regional executive services. But most of them refused to provide us with any information about how much property the national budget received from confiscating incomes of top corrupt officials.

By the way, the HACC statistics has a column with the value of property confiscated from convicted persons, but it is empty in all five reports. Such information is provided in the reports of the NABU, but without information on how much money was received after the sale of these assets.

Information about the revenues received from the confiscation of property to the national budget could be obtained from the ARMA if such assets were transferred to it for management. In such cases, it is the ARMA that deals with their sale.

The ARMA register of seized assets shows one case where assets at the stage of pre-trial investigation were transferred to the Agency for management, and it concerns the embezzlement of UAH 25 million of SE Eastern Mining and Processing Plant. In this criminal proceeding, the corporate rights of LLC Trading House Eco-Service belonging to one of the convicted persons were seized. Therefore, the ARMA must sell these corporate rights on one of the Prozorro.Sale platforms. However, this information is not available in the asset register and neither are the data on which assets were seized in most of the criminal cases we analyzed.

If the property has not been transferred to the ARMA, then it is managed by the executive service, in accordance with a special Procedure. The fate of such property can be different: it can be transferred to the ownership of the state, sold, transferred free of charge to hospitals, schools, orphanages, etc., or destroyed.

While researching, we have found that the enforcement of confiscation is a long process, and currently, out of 24 sentences that have entered into force, only 5 have been enforced in terms of confiscation, as evidenced by the completion of enforcement proceedings. 17 enforcement proceedings are still ongoing, and in 2 cases, enforcement proceedings have not even been opened as of the beginning of 2024.

In cases where the property of convicted persons was sold on the Open Market site, there are no particularly impressive results either. For example, the car of Kostiantyn Starovoit, ex-director of OJSC Kirovogradgaz (a subsidiary of Tsentrgaz), convicted of embezzlement of property, was sold at an auction at a starting price of UAH 265,018. For example, a third part of the apartment confiscated from the above-mentioned Anton Haidur, ex-judge of the Mizhhiria District Court of Zakarpattia oblast, was bought by Yurii Haidur at the starting price.

Thus, the enforcement of property confiscation is a long process. Its effectiveness remains doubtful, at least due to the fact that the executive service bodies are in no hurry to share information on how many assets were sold as a result of enforcing specific sentences. Long periods of time between the entry of the sentence into legal force and the actual sale of the asset can also adversely affect its value.

Unused opportunities for special confiscation

The value of property to which the HACC judges applied special confiscation is growing. This is a positive trend because most of the special confiscated property is money seized, which was usually the subject of criminal proceedings or obtained as a result of committing an offense. The exception is the case of Dmytro Sus, the investigator of the Prosecutor General’s Office, where the panel of HACC judges collected gaming machines and other equipment that the convict wanted to seize into the national income.

The HACC declares that it managed to collect more than UAH 370 million to the budget, and 90% of this amount was received in 2023 alone.

The grounds for special confiscation are defined in the Criminal Code of Ukraine. To simplify, such a means of criminal legal influence can be used if the assets:

• were obtained due to an offense (Article 96-2, part 1, clause 1 of the Criminal Code of Ukraine) — 6 cases;
• intended to finance an offense (Article 96-2, part 1, clause 2 of the Criminal Code of Ukraine) — 0 cases;
• were the subject of an offense (Article 96-2, part 1, clause 3 of the Criminal Code of Ukraine) — 5 cases;
• were used as means or instruments of an offense (Art. 96-2, part 1, clause 4 of the Criminal Code of Ukraine) – 4 cases.

In 6 cases, there were several grounds for confiscation of assets at once.

The legality of the special confiscation was to be appealed in the Constitutional Court of Ukraine. But in late June 2022, the constitutional justice body recognized that the articles on special confiscation of property did not violate the constitutional guarantees of protection of property rights and did not contradict the Fundamental Law.

The use of special confiscation should be convenient because when the defendant has sold or transferred property to someone, it can still be confiscated. To do this, it is necessary to prove that this third party knew or should have and could have known about the connection of the property with the criminal proceedings.

This was the case with SE Eastern Mining and Processing Plant. The judges of the HACC confiscated the funds that the state-owned enterprise transferred to the accounts of LLC Trading House Eco-Service because the director of the LLC was an accused who knew about the criminal origin of this money.

In addition, the justified use of special confiscation should not cause problems with the enforcement of sentences in this part abroad. The HACC has cases where final verdicts have not yet been delivered, but the property has been seized in foreign jurisdictions. It is on the quality of the prosecution’s position and the reasoning of the court decision that the possibility of confiscation of assets abroad, if the court decides on a conviction, will depend.

Often, the provisions of Art. 100, part 9, clause 6-1 of the Criminal Procedure Code of Ukraine, which establish the possibility of confiscation of property belonging to a convicted person for committing a corruption offense, legalization (laundering) of proceeds from crime, their related party, are also ignored by law enforcement officers if the legality of the grounds for acquiring rights to such property is not confirmed in court.

Therefore, the use of this provision in cases of money laundering and corruption crimes should be enhanced and the problems that prevent this should be addressed.

Conclusions and recommendations

As we can see, the confiscation of all property of corrupt officials does not justify its existence. This mechanism can potentially be recognized as unlawful; it does not generate significant revenues to the national budget, and also contains a number of risks of abuse both at the stage of seizure of property and at the stage of enforcing this punishment.

To deprive corrupt officials of the purpose of their existence — illicit enrichment — it is necessary to develop the institution of special confiscation, as well as confiscation not within the framework of criminal proceedings. This requires additional efforts on the part of the prosecution to prove the criminal origin of the property, but we are confident that such efforts will be rewarded.

To achieve such goals, efforts should be made to change the legislation and the practice of its application. Namely:

•   to remove unconditional confiscation of all or a part of property as punishment from the criminal law. This point does not meet international standards for the protection of human rights because it is clearly disproportionate. In addition, it will complicate the enforcement of such a punishment if it concerns property abroad;
• to strengthen the work of law enforcement agencies in terms of proving the origin of the seized property: whether it is a means or instrument of an offense or was acquired as a result of an offense. Effective special confiscation is a tool that complies with the Constitution of Ukraine and international standards for the protection of human rights;
• to strengthen the quality of the search for assets that can be seized within the framework of criminal proceedings with the collection of proper evidence of their criminal origin to timely and effectively seize such assets for the purpose of special confiscation;
• to improve the quality of filling the Unified Register of Seized Assets, which will unify the practice of law enforcement agencies in this part;
• to increase the transparency of the work and the capacity of the executive service bodies to confiscate property. These agencies perform almost the same functions as the ARMA, only for a much larger number of assets, but access to information about their work leaves much to be desired.

Effective confiscation of criminal property should become a high-quality tool for anti-corruption because in this case, the person will lose the main incentive to commit offenses — financial gain.

The study covers the period from August 2020 to June 2023 with some events afterward. Anti-corruption agencies, namely the NACP, the NABU, the SAPO, the ARMA, and the HACC, were assessed on a scale from 1 to 5. 

The research methodology has been developed taking into account the main approaches of the National Integrity System (NIS), developed and implemented by the international anti-corruption network Transparency International. 

The draft study was provided to anti-corruption infrastructure agencies for preliminary perusal, comments, and corrections.

Appendices to the study include a review and a list of interviewees.