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White Collar Crime

White Collar Crime

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Criminal law has been among the most rapidly growing practices in Ukraine over the past few years, a result of two factors: low economic activity and increased political and criminal pressure.

The main instrument used by the state to exert pressure on businesses is arranging demonstrative searches, which as a rule are conducted by a large number of law enforcement officers in the presence of armed special forces units. Because the officers hide their faces behind masks, such “unfriendly actions” by the state against businesses are called “Mask Shows.” 

A number of laws have already been adopted to protect businesses from direct interference with their operations by law enforcement agencies, including the so-called “Mask Show STOP No. 1” and “Mask Show STOP No. 2” laws. Among other things, these protections include: a requirement that a video record be made of the decision to search a business and the conduct of the search itself; a requirement that a lawyer of the target be present during the search; a limitation on the right to seize original documents related to the conduct of the target’s business; amendments to the procedure for considering complaints; an increase in the investigator’s liability for damage caused by unlawful decisions; and the prevention of attempts to extend the period of preliminary investigation without sufficient cause.

Significantly, most of the changes aimed at protecting against unlawful prosecution will be applied only to cases initiated after March 15, 2017.

Ukrainian criminal defense attorneys face another common practice when crimes are investigated by multiple law enforcement agencies, which frequently come into conflict.

At the end of 2018, the prosecutor’s office is to be deprived of its powers as an investigative agency, while retaining its functions of procedural support of investigators and support of charges in court. The newly created investigative agency, the State Bureau of Investigation, should operate instead on cases related to the actions of government officials and business and law enforcement officers.

Meanwhile, legislative initiatives related to the establishment of the Bureau of Financial Investigations are also controversial. This agency will be authorized, among other things, to investigate all crimes related to businesses, including those related to taxes. Currently, conflicts between the National Anti-Corruption Bureau of Ukraine, the Specialized Anti-Corruption Prosecutor’s Office, and the Security Service of Ukraine are widely publicized. It is likely that conflicts may occur again even after the launch of the new law enforcement agencies (the State Bureau of Investigation and the Bureau of Financial Investigations), which have overlapping competences.

From our perspective, we anticipate an increase in the number of cases related to the mandatory declaration of income by state officials, including, for example, charges related to incorrect declarations and the concealment of personal income or income of family members.

Given these developments, the role of attorneys in protecting individuals from unlawful criminal prosecution is growing significantly. Unfortunately, the lodging of criminal cases against attorneys who are active in this field is increasingly common. Quite often the state tries to use legal aid attorneys to resolve their departmental issues – sometimes with success, as the free attorneys introduced into proceedings instead of retained attorneys can be illegally manipulated into acting against client interests, which makes it easier for law enforcement agencies to settle procedural issues of prosecuting a particular person.

The infringements on the professional rights of attorneys has reached a critical point in Ukraine. As the Coordinator of the Initiative Group for Protection of Rights of Attorneys, I have initiated and published a report on the infringement of the rights of attorneys entitled “Defenseless Defenders.” Now we are actively disseminating this information among international human rights institutions and the legal community, to keep on fighting for our rights at the national level.

We expect an increase in demand for our criminal practice next year. Therefore, the systemic and comprehensive protection of the interests of citizens, provided by a team of lawyers from a highly specialized criminal boutique law firm, for several defendants or in an extensive territory, will remain in great demand.

By Olha Prosyanyuk, Managing Partner, Aver Lex

This Article was originally published in Issue 5.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Ukraine Knowledge Partner

AVELLUM is a leading Ukrainian full service law firm with a key focus on Finance, Corporate, Dispute Resolution, Tax, and Antitrust.

Our aim is to be the firm of choice for large businesses and financial institutions in respect of their most important and challenging transactions.

We build lasting relationships with our clients and make them feel secure in new uncertain economic and legal realities.

We incorporate the most advanced Western legal techniques and practices into our work. By adding our first-hand knowledge, broad industry experience, and unparalleled level of service we deliver the best results to our clients in their business endeavours. Our partners are taking an active role in every transaction and ensure smooth teamwork.

AVELLUM is recognised as one of the leading law firms in Ukraine by various international and Ukrainian legal editions (Chambers, The Legal500, IFLR1000, The Ukrainian Law Firms, and others).

Firm's website: www.avellum.com


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