Previously, we studied how Ukrainian confiscations are carried out abroad. The time has come to find out how these same punishments are carried out in Ukraine.
Many corruption crimes are mercenary in nature, that is, the defendants seek to obtain a certain benefit from their positions. Therefore, the law provides for property punishment in the form of confiscation (confiscation-punishment). The document also indicates the possibility of special confiscation. With ordinary confiscation, we are talking about the legal property of the convicted person, and criminal proceeds and funds are subject to special confiscation, notes the publication ZN.ua.
Over the four years of its operation, the High Anti-Corruption Court (HACC) handed down more than 150 verdicts, and 48 of them included punishment in the form of confiscation of property (this includes classified verdicts). In total, as of December 31, 2023, such punishment was awarded to 61 persons (see Fig. 1).
The VAKS can apply special confiscation in the event of the commission of any of the crimes charged to it, except for the theft of official documents (parts 1 and 3 of Article 357 of the Criminal Code of Ukraine). However, the Anticorruption Court applied this article only in 22 sentences (as of December 31, 2023).
In contrast to confiscation-punishment, special confiscation is used more than half as often, and we do not observe a tendency towards an increase in the cases of its use (see Fig. 2). And this can lead to very negative consequences. Why is this so, say Transparency International Ukraine experts.
How VAKS decides what property to confiscate
Most often, when choosing between full or partial, VAKS gives preference to confiscation of all property. We see this in the statistics: of the 44 publicly available verdicts of the court of first instance, in 40 cases it was about ordering the confiscation of all property (71%) versus 16 cases of partial confiscation (29%) (see Fig. 3).
At the same time, HACS uses various approaches to partial confiscation. Mostly it occurs through the free transfer to the state of half the property of the convicted person. We have identified a dozen such cases. In five cases, the court confiscated specific items - cars, land plots, houses, etc., and 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 or part of a convicted person’s property. Taking this into account, judges primarily focus on the size of the bribe or damage caused, the property status of the accused or the severity of the crime.
But obviously not always. For example, HACS ordered the complete confiscation of property of a convicted judge of the Babushkinsky District Court of Dnieper for receiving 15 thousand dollars in bribes, since “this type of punishment is directly provided for in the sanctions of these articles.” This is not the only case where HACC judges do not provide a clear explanation of the reasons for applying a certain amount of confiscation.
In some cases, special attention is paid to the role of the convicted person in the commission of the crime. Therefore, perpetrators of crimes are often awarded confiscation of all property, while accomplices receive confiscation of half.
HACC judges do not always order confiscation of property even in cases where it is defined in the sanction of the article as an additional, but not mandatory, punishment. Thus, the practice of imposing punishment in the form of confiscation of property is not constant, which creates legal uncertainty and the risk of abuse.
Confiscation of property is not as effective as it should be
As of December 31, 2023, 24 VAKS verdicts that entered into legal force and which ordered confiscation of property were publicly available. But the number of actually executed sentences is significantly lower.
Only five were carried out in terms of confiscation-punishment. 17 enforcement proceedings are still ongoing, and in two cases enforcement proceedings have not even been opened at the beginning of 2024.
The fact is that state enforcement agents are limited in their ability to obtain information about the property of convicted persons. Even law enforcement officers, who have an arsenal of investigative actions, and ARMA do not always fully search for property that can be seized.
We also found that in at least five cases out of 44 publicly available decisions where the HACS issued a sentence with confiscation, the property of the suspects or accused was not seized. For example, in the case of an SBU employee extorting a bribe of 55 thousand dollars, VAKS ordered him to confiscate all his property, but there is no information about the arrests of such assets in this proceeding.
The quality of implementation of confiscation decisions is also difficult to verify. In the course of researching this topic, we sent more than 20 requests about the results of the execution of HACS sentences to regional executive services. But most of them refused to provide any information.
In the VACS statistics there is a column with the value of property confiscated from convicts, but in all five reports it is empty. Such information is provided in the reports of the National Anti-Corruption Bureau of Ukraine, but in physical form, that is, without information about how much money was received after the sale of these assets.
In cases where the property of convicts was sold on the Open Market, there were no particularly impressive results either. Thus, the car of Konstantin Starovoit, the ex-director of the Tsentrgaz subsidiary OJSC Kirovogradgaz, convicted of embezzlement of property, was sold at auction at a starting price of UAH 265,018. Or, for example, the third part of the apartment confiscated from the ex-judge of the Mezhgorsky District Court of the Transcarpathian region Anton Gaidur was bought at the starting price by Gaidur Yuri Antonovich.
Unexploited special forfeiture opportunities
The value of property to which HACC judges have applied special confiscation is growing. This is a positive trend, because the majority of specially confiscated property is seized funds, which were usually the subject of criminal proceedings or received as a result of their commission. An exception is the case of ex-GPU investigator Dmitry Sus, where a panel of judges of the VAKS recovered gaming machines and other equipment that the convict wanted to take possession of as state income.
In general, VAKS declares that it managed to collect more than 370 million UAH from the budget, and 90% of this amount was received only for 2023 (see Fig. 4).
The grounds for special confiscation are defined in the Criminal Code of Ukraine; we are talking about cases (see Fig. 5) in which assets:
- obtained as a result of a crime – six cases;
- intended to finance a crime – zero cases;
- were the subject of a crime – five cases;
- were used as means or instruments of crime – four cases.
The use of special confiscation should be convenient, because when the person involved in the case 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 criminal proceedings.
In addition, the justified use of special confiscation should not create problems with the execution of sentences in this regard abroad. VAKS has cases where final verdicts have not yet been made, but property has been seized in foreign jurisdictions. The ability to confiscate assets abroad if the court makes a guilty verdict will depend on the quality of the position of the prosecution and the reasoning of the court decision.
As we see, the confiscation of all property of corrupt officials does not justify its existence. This mechanism could potentially be considered illegal; it does not bring significant revenue to the state budget, and also contains a number of risks of abuse both at the stage of seizure of property and at the stage of execution of this punishment.
In order to deprive corrupt officials of the purpose of their existence - illegal enrichment, it is necessary to develop the institution of special confiscation, as well as civil confiscation (not within the framework of criminal proceedings). This requires additional efforts from the prosecution to prove the criminal origin of the property, but we are confident that such efforts will be rewarded.
And in order for such goals to be achieved, both legislation and the practice of its application should be improved.
