On 24 November 2021, Ukraine launched a new law enforcement authority – the Bureau of Economic Security of Ukraine (“BES”). BES will focus on analytical activities aimed at early detection of risks in the economy, as well as pre-trial investigation of certain criminal offences.
BES investigates tax crimes, crimes, committed in the sphere of public finance, as well as other business crimes, namely:
- tax evasion
- misuse of public funds
- manipulations on capital markets
- fraud with financial resources
- forced insolvency
- illegal use of trademarks
- conduct of unlicensed gambling
- embezzlement in public sector (except for the crimes investigated by the National Anticorruption Bureau of Ukraine)
The Criminal Procedure Code of Ukraine (as recently amended) sets out the following key peculiarities of BES operation:
- BES may not investigate the criminal offences if they overlap with the jurisdiction of the State Bureau of Investigations or the National Anticorruption Bureau of Ukraine
- BES is empowered to put a preliminary (e.g., prior to obtaining the court order) freeze on the assets and funds on bank accounts for 48 hours
- BES may request from banks information protected by bank secrecy, without prior authorisation of the court (to the extent established by law)
- failure to produce information at the request of BES may trigger administrative liability in the form of fine amounting to UAH10,200 (approximately USD380)
We anticipate that BES will ramp up in early 2022. At the same time, other law enforcement authorities retained their jurisdiction over certain business crimes despite the launch of BES. In particular, corporate fraud and embezzlement in private sector are still to be investigated by the National Police of Ukraine.
By Vadim Medvedev, Partner, and Andriy Fortunenko, Counsel, Avellum