How a state-owned enterprise, which has personal data of almost all Ukrainians, began to cooperate with Putin’s supporters already during the war

The state enterprise “Document”, which produces documents for Ukrainians and has access to personal information of almost every citizen, has entered into an agreement with a company that is associated with the aggressor state

What are the risks and is such cooperation even legal?

One is an ardent supporter of Vladimir Putin and an “international friend” of occupied Crimea. The other is a lawyer who actively works with Russia. We are talking about Karl Eckstein and Frank Schmieder, the founders of the German law firm Schmider & Eckstein.

For 20 years, Schmider & Eckstein have been providing services to clients from “Russia, Central and Eastern Europe”. They help to open a business in Germany, as well as in matters of migration, accompanying the entire process. They talk about this on their website - in German and Russian.

Both of the company's co-founders had long worked in Russia and touted the prospects of doing business with the country led by Vladimir Putin. One of them calls the Russian Federation his “second homeland” and supports it in the war with Ukraine.

Despite this, Schmider & Eckstein signed new clients in 2022. They became the Ukrainian state enterprise “Document”, which produces documents for Ukrainians and has access to personal information of almost every citizen.

Passports for Ukrainians abroad

In the summer of 2022, six months after Russia’s full-scale invasion of Ukraine, the state enterprise Document opened an office abroad for the first time - in Warsaw, Poland. This made it possible for millions of Ukrainians who fled their homes due to the Russian attack to receive their documents without having to come home.

At that time, almost 7 million Ukrainian refugees alone lived in Europe. To cope with the flow of Ukrainians, three more Documenta units were opened in Poland by the end of the year. And now there are 12 state-owned enterprise offices operating abroad in six countries.

Clients of the State Enterprise “Document” abroad can obtain passports, driver’s licenses, affix apostilles, and so on. You can register for most documents online and receive them directly at the offices. After opening branches abroad, the state-owned enterprise's net income increased almost 190 times. As OpenDatabot's analytics shows, last year Document earned almost 700 million hryvnia, while in 2021 - only 3.7 million.

At the same time, at the beginning of this year, the State Audit Service discovered financial irregularities at Document amounting to 84 million hryvnia. Some of them concerned specifically foreign branches. Now, as the State Audit Service told reporters, law enforcement officers are investigating certain facts from the financial activities of the enterprise.

In Germany, where the largest number of Ukrainian refugees now live, the Document company has opened three offices - in Berlin, Munich and Cologne. Legal support in the country was provided by the State Enterprise “Document” to the already mentioned company – Schmider & Eckstein.

This became known in the spring of 2024, when, due to the new mobilization legislation, branches of the State Enterprise “Document” abroad temporarily “froze” their services for Ukrainian men of military age. Therefore, some of them began to submit legal requests to the state-owned enterprise. The answer to these requests was no longer provided by the Documenta offices, but by Schmider & Eckstein.

Editorial “How are you?” I got acquainted with several letters that Ukrainian men abroad received in response to an appeal to the State Enterprise “Document”. Thus, a power of attorney was attached to the letters, according to which, from February 2023, a lawyer from Schmider & Eckstein represents the interests of Document in Germany.

Subsequently, journalists learned that cooperation with the company began even earlier - in the fall of 2022.

In addition, even the legal addresses of the company Schmider & Eckstein and the German “Document” coincide.

“Friend” of occupied Crimea

The co-founder of the firm Schmider & Eckstein, Professor Karl Eckstein, is a Swiss lawyer who, even now, during the great war, calls Russia his “second homeland.”

In his biography on his website, Karl Eckstein indicates that he has been cooperating with Moscow for 40 years. At first, he represented the interests of Swiss companies on the territory of the then USSR, and later opened his own law firm in Russia. There Eckstein received a professorial scientific title. Since 1995, he has taught law at the Moscow State Institute of International Relations, some of whose graduates have been associated with Russian intelligence.

Professor Boris Babin examines the activities of the “association” from the beginning of its creation - then the Ukrainian scientist served as the representative of the President of Ukraine in Crimea. According to him, the main goal of the activities of the “International Association of Friends of Crimea” is, with the help of so-called agents of influence, to legalize the annexation of the Ukrainian peninsula and advocate for the lifting of sanctions against the Russian Federation.

“A lot of different politicians were brought to Crimea. People came to Crimea and then said: “I was interested,” “and I wanted to know everyone’s opinions.” But there is another level - absolutely precisely coordinated by the Russian system of puppets, who did not just go to Crimea, walked around there, took photographs, but who specifically voice the Kremlin’s narratives that Crimea is supposedly Russia. They were given the task of making this club as broad as possible,” says the Ukrainian scientist.

The Crimean “Center for Investigative Journalism” researched members of the “association” from different European countries. For example, French politician Jean-Pierre Thomas, convicted of participating in extorting kickbacks from local businesses in France, became a “friend of Crimea.” Or – Bulgarian communist and member of the “Russophile” association Ivan Rusev Marazov. And, for example, the Serbian cell of “friends of Crimea” was represented by Alexander Sheshel, the son of Vojislav Sesel, a war criminal convicted of ethnic cleansing.

In “Friends of Crimea,” Karl Eckstein heads the Swiss cell. This figure repeatedly visited the annexed peninsula and proposed creating there a tourist route for the “peoples of Russia” and a blockchain platform for investments from abroad, bypassing international sanctions.

With the help of colleagues of the “Schemes” project, we learned that Karl Eckstein has had Russian citizenship since 2002. This data is contained in numerous Russian databases and official registers. Eckstein actively used his passport, in particular, to fly around Russia and receive medical services. In 2019, Eckstein received a new passport as a citizen of the Russian Federation.

Karl Eckstein considers the start of a full-scale Russian invasion of Ukraine justified. He even says that Putin “restored a sense of pride to Russians.”

Boris Babin believes that Karl Eckstein can cooperate with Russian intelligence services.

“Imagine, in 1986 a person was entrusted with opening a law firm in Moscow. Well, I don’t know who you have to be not to understand that he worked and is working, respectively, for the Russian and Soviet intelligence services,” the Ukrainian scientist is convinced.

There is no independent confirmation of this, at the same time, Eckstein himself, in the end, admits that he was friends with representatives of the Russian special services.

“I still have good relations with the KGB,” noted Karl Eckstein in an interview in 2023. “Now it’s not like that anymore, now everything is stricter. But these people never asked anything bad from me.”

Personal data of Ukrainians

In his study of “International Friends of Crimea,” Boris Babin found that after resigning as consul in Switzerland, Karl Eckstein became the legal director of the Swiss company Terra Quantum.

“These companies that deal with cryptographic protection issues, accordingly, hired a bunch of Russian professors. And if we are talking about the State Enterprise “Document”, the activities of the passport service, it is also based on cryptography. This is also the subject of their interest,” says the Ukrainian scientist.

The power of attorney from the Ukrainian state-owned enterprise, which was at the disposal of the “How are you?” project, does not provide a clear understanding of exactly what information Schmider & Eckstein can have access to. Only general formulations related to the representation of a state-owned enterprise.

In a comment to our editors, the State Enterprise “Document” assured that access was limited to “data that is necessary to represent the interests of the enterprise” or conduct cases in the courts. And that, they say, no one “had access to the Unified State Demographic Register or personal data of citizens.”

However, lawyers at Transparency International Ukraine, after reviewing the power of attorney, came to a different conclusion.

“It seems that the powers are quite broad, they are not exhaustive. And, rather, it looks like the information that a representative can receive is actually unlimited. I personally did not see in the document any exceptions or any very detailed provisions that could be interpreted as restrictions on obtaining information,” noted legal adviser to Transparency International Ukraine Natalia Sychevlyuk.

Also, according to her, given the activities of Karl Eckstein, the company Schmider & Eckstein would have to be subject to sanctions from Ukraine.

“I was surprised that in Ukraine this company is not under sanctions, since they really quite openly supported Russia and even Russia’s armed aggression, one of the partners. Therefore, this looks a little strange to me, since our sanctions lists are constantly expanding and people end up there for some minor statements or cooperation,” explained the legal adviser to TI Ukraine.

Who represents the State Enterprise “Document”?

Journalists of the project “How are you?” turned to the state-owned enterprise Document with a request for details of cooperation with Schmider & Eckstein.

“Document” refused to show the editorial agreement itself, but the State Enterprise assured that not the entire company is authorized to represent the interests, but only Frank Schmieder, Eckstein’s partner and co-founder of the company.

“Usually it doesn’t work like that - if at the end of an agreement or power of attorney, or any other documentation there is a link to a company, this means that after all cooperation is being carried out with this company,” says Natalya Sichevlyuk, “The fact that the Ukrainian enterprise is hiding this contract, it also doesn’t look like they have anything to hide. Although even this one partner they are talking about still has no fewer questions regarding its activities with the Russian Federation.”

On his LinkedIn page, Frank Schmieder notes that he lives and provides his services in Berlin. However, his entire biography is also connected with Russia and his business partner, the owner of the Russian passport, Karl Eckstein.

In particular, on Schmieder’s website it is stated in his biography that back in 1996 he worked in St. Petersburg. And in the early 2000s - in Moscow in the company of Eckstein. Colleagues from the “Schemes” project, using Russian registers and databases, established that at least since 2001, Schmieder has an individual tax number of the Russian Federation.

Since then, Schmieder has continued to work with Russia and encourage economic cooperation with the country led by Putin. In 2005, he and Eckstein published a book about “the rules of doing business in Russia.” Schmieder also indicates in his biography that he is an official partner of the Chamber of Commerce and Industry of the Russian Federation and a member of the board of the German-Russian Union of Lawyers. The latter - it is worth noting - condemned on their website the full-scale Russian invasion of Ukraine.

Despite this, Frank Schmieder still states on his LinkedIn profile that he provides services in Russia. And on the website “Russian-speaking lawyer Berlin,” which advertises Schmieder’s services, it is indicated that a lawyer can provide the necessary assistance by attracting partners in Russia.

Project “How are you?” I repeatedly tried to contact Frank Schmieder to learn more about his cooperation with the Ukrainian state-owned enterprise and the history of relations with Russia. However, no one responded to journalists for a month.

But the State Enterprise “Document” gave the following assessment of cooperation with the lawyer: “Frank Schmieder has established himself as a conscientious professional with high moral qualities who condemns Russian aggression and supports the territorial integrity of Ukraine.” But at the same time they said: “the agreement has now been terminated.”

The state-owned enterprise explained that the agreement was terminated because Schmieder had completed “all the tasks assigned to him.” Interestingly, the need for its services disappeared precisely after journalists asked the state-owned enterprise about cooperation with a dubious company with a Russian trace.

Responsibility for cooperation with citizens of the Russian Federation

Meanwhile, Transparency International Ukraine is wondering whether the deal with Schmider & Eckstein was even legal. Lawyers also talk about the potential criminal liability of the signatories.

“After the full-scale invasion, we have relevant legislation in place that prohibits cooperation with Russian citizens, companies that are registered under Russian law, or in which the ultimate beneficial owner is Russians. There were corresponding resolutions of the Cabinet of Ministers that imposed a moratorium on cooperation. We have adopted new articles into the Criminal Code of Ukraine.

Persons who conduct business activities with the Russian state or its residents, etc., may be subject to criminal liability - 10-15 years of imprisonment with confiscation of property. This may be the manager who made the corresponding decision and signed the agreement. But a company that entered into these relations and continued them until the last moment, until, in fact, your editorial office contacted us,” explains Natalya Sichevlyuk, can also be liquidated.

Who is the signatory to the agreement? Journalists “How are you?” They asked the current head of Document, Sergei Prokopchenko, about this. He personally did not comment on this story, but in a written response, the company noted that those who entered into an agreement with Schmider & Eckstein no longer work for the state enterprise.

The department only noted that, according to the charter of the state enterprise, making such a decision is the competence of the general director. Until the end of 2023, he was Vladimir Shvachko, who intermittently headed Document for almost 20 years. At the end of last year, the man was suspended from his position pending an internal investigation.

Vladimir Shvachko was reluctant to talk to journalists - he only noted: “Well, there was probably such a company.” Regarding the details of the deal, the man said that he “doesn’t remember.”

“The main point that worries me in this case is the extent to which the Ukrainian GP understood with whom it was signing a contract. Have they checked that this company and its two partners, who are the founders, have been cooperating with Russia for a long time, one of them even has Russian citizenship? The fact that for two years, in fact, they provided access to information about the documents of Ukrainian citizens to a company with such a reputation, it does not look very good, to put it mildly. The information is sensitive from the point of view of even national security interests,” explained the legal adviser of TI Ukraine.

The state-owned enterprise claims that they are now carefully checking all their counterparties. In particular, owners and key employees of companies, their activities and potential connections with Russia. However, as the State Enterprise reported in response to the journalists’ question “How are you?”, they have no information about whether the Schmider & Eckstein company passed such a check.

However, it is only known from open sources that the founders of the law firm are associated with the Russian Federation. And one of them, as follows from the journalists’ investigation, is a citizen of the Russian Federation who actively supports aggression against Ukraine.

Analysis of the project “How are you?” showed the threat that Schmider & Eckstein could gain access to the personal data of Ukrainians.

And he posed the question: why has it not yet found itself under Ukrainian sanctions?

The state-owned enterprise does not provide details of the agreement with Schmider & Eckstein to journalists, nor does it provide information on how much this two-year cooperation cost.

The German company and two of its partners also did not respond to journalists’ requests.