“The special confiscation regime is serving and working for Ukraine. All those who doubt the special confiscation of (ex-President Viktor) Yanukovych’s $1.5 billion surely pander to Yanukovych’s interests. They are nothing but enemies of the state and are helping to reverse confiscation through a fake decision abroad, as this decision cannot be reversed in Ukrainian courts.”
That was the gist of the Prosecutor General Yuriy Lutsenko’s recent speech at the meeting of the national security and defense committee of the Verkhovna Rada of Ukraine.
Let us remind how this “special confiscation regime” actually came to be in our legislation.
In 2015, as required by the European Union in the course of visa liberalization, Ukraine was obliged to pass a law allowing to confiscate criminal assets from the third parties — meaning assets that nominally belong not directly to a criminal, but to their in-laws, a sibling, a second cousin or a company. The new regulations on confiscation had to comply with the EU Directive 2014/42/EU which outlines the basic principles on criminal assets confiscation.
In order to meet the EU requirements, the government drafted amendments to the Criminal Code of Ukraine and the Criminal Procedural Code of Ukraine, namely on defining the special confiscation regime for assets of criminal origin and regulation on the seizure of assets in criminal proceedings.
They were agreed with the EU experts and forwarded to parliament for consideration.
The amendments came for review to the committee on the legislative support of law enforcement, where they were watered down by the members of parliament, including the then committee member Lutsenko himself. The committee rewrote the amendments from scratch, disabling confiscation of assets from the third parties. It was done despite ex-Prime Minister Arseniy Yatsenyuk and Justice Minister Pavlo Petrenko’s warnings that these amendments, when redone, do not comply with the EU standards.
Lutsenko himself, as former head of the Bloc of Petro Poroshenko faction, then confidently claimed: “The legislation as it was drafted by the Ministry of Justice can enable prospective abuse from the law enforcement. Good intentions of seizing Yanukovych’s assets pave the way to hell. It is unacceptable to just go around seizing everything.”
With no effect, the Anti-Corruption Action Centre, experts and journalists, even the then EU Ambassador in Ukraine, Jan Tombiński, tried to reason with Lutsenko and his colleagues at that time, that regulations on special confiscation of assets in the form, submitted by the government, do not contradict the EU Directive.
After the diluted amendments were hastily adopted by parliament with the majority of votes, the EU had to say that the legislation did not comply with the EU standards and visa liberalization requirements. In the end, being under pressure from the international partners and the threat to lose the visa-free regime, parliament had to reconsider and adopt the amendments in the correct form in February of 2016 and agreed to the terms of the special confiscation with the EU requirements and standards.
As time passed, roles and scenery changed. Lutsenko evolved from the head of the presidential faction in parliament to the prosecutor general and, in 2017, went on actively implementation of the special confiscation terms.
This time, for Lutsenko, all wasn’t well with the EU standards either, as they call for two stipulations to enable special confiscation from the third parties:
to provide proof of the criminal origin of the assets (art. 6 of the Directives) and
to give an opportunity to the third party to defend their rights in the court of law during the confiscation hearing (art.8 Directives):
Have these two stipulations been kept during special confiscation of $1.5 billion?
Evidence of illegal origin of the assets
As we all know, this confiscation was brought upon by Kramatorsk Court decision, which also approved plea bargain of Kashkin (a dummy individual paid $500 to register the company in his name) with the prosecution and passed the decision to confiscate assets, which never belonged to Kashkin.
Under the Criminal Code, when approving the plea bargain, the court does not look into the evidence. However, when passing a decision on the special confiscation, the court absolutely has to investigate the evidence and pass decisions based on that.
One can see from the text of the court decision, published by Al Jazeera, that Kramatorsk City Court never looked into the evidence of the criminal origin of the confiscated billions. Such evidence doesn’t make an appearance in the decision. All we see is just a list of eight possible schemes and 400 companies, with the help of which, according to the prosecution, over Hr 13.24 billion was stolen from the state budget.
No connection between the criminal schemes and companies or money movement abroad is reflected in the decision. Lutsenko names only 30 court decisions as evidence of the criminal origin of the money, the decisions, which registered the existence of Yanukovych’s criminal organization and hundreds of companies owned by the organization.
Twenty-three of these 30 decisions are still available in the register of court decisions. All of them ended in plea bargains with the prosecution, mostly with small fish – dummy individuals, the likes of Kashkin. Also, even though each of those decisions concerns a different embezzlement episode, descriptions of plot and mechanics of the scheme seem to be almost identical, without significant new details and evidence evaluation by the court.
Perhaps, the prosecution has such evidence at their disposal and keeps it in a “secret room” at the prosecutor general’s office? However, without its evaluation, the court had no legal grounds to confiscate assets of the third parties.
Possibility for third party to defend their rights
Lutsenko stressed the fact that only the lawyer, prosecutor, judge and the accused took part in the Kramatorsk court hearing, and third parties have no right to interfere with the court proceeding on the plea bargain with the accused. This much is true.
However, as it was not Kashkin’s assets that were being confiscated in the court proceeding, but that of the third parties, they should have been at least notified of the legal grounds of such confiscation. It is not our personal whim, but the basic principle of the right to fair trial (art. 6 of the European Convention on Human Rights) and European standard (art. 8 of the EU Directive). Instead, the Prosecutor General’s Office deliberately violated the right to fair trial of the companies-owners of the confiscated government bonds, notwithstanding their origin and personality.
It is based on these procedural violations that the companies which had their billions confiscated can appeal Kramatorsk court decision in the European Court of Human Rights. These violations on the part of the Prosecutor General’s Office and the court are the most obvious ones. Instead of conducting the proper investigation, collecting evidence and legally confiscating the $1.5 billion as well as frozen assets of Yanukovych’s henchmen, the prosecution and Kramatorsk Court simply took this money from the companies. The money that will have to be paid back – by each of us after the lawlessness of the decision is proved in the court of law. Right now it amounts to Hr 1,000 from every Ukrainian citizen.
It is also very unlikely that international institutions would consider a decision passed by the European Court of Human Rights a fake one, as is the case with this super-top-secret decision of Kramatorsk City Court.
Daria Kaleniuk is the executive director of the Anti-Corruption Action Centre in Kyiv.
