Accessing Justice
The number of criminal proceedings opened has increased significantly over the last couple of years. It would be unfair to underestimate the proliferating scope of white collar-crimes in this country. However, it appears to be, at the same time, a very powerful and coarse tool for putting pressure on business and competitive fight. The ongoing redistribution of assets has forced businessmen to try and stay one step ahead in efforts to secure their freedom and property with the help of an army of lawyers and consultants. On their road to accessing justice, some clients have got lost, while others have stumbled over legislative loopholes. In the view of criminal defence attorneys, they face not only challenges to navigate the turbulence in these types of cases, but also broader challenges enforcing the governance of law. Vitaliy Serdyuk and Igor Fedorenko, partners of the highly specialized AVER LEX attorneys at law, touched upon real examples from their recent practice, discussed novelties in criminal legislation, and shared their views on why progressive measures are not bringing such anticipated results today.
UJBL.: What are the criminal risks your customers face most frequently today?
Vitaliy Serdyuk: The list of criminal legal risks has never been a short one. And some modern political and public trends only extended it. Traditionally, in the risk zone still there are possible contracts with unscrupulous counterparts, fraud, forgery of documents, attacks by competitors. The tools of the criminal process are becoming more popular, which can be used by the hands of unscrupulous representatives of law-enforcement bodies in their own interests, by competitors or other opponents, including political ones. In such cases there is, for instance, a risk of becoming a suspect of terrorism financing after possible planting of forged documents, or the risk of an enterprise’s activity being blocked for a long period of time by unauthorized removal of original documents.
Neither should we disregard the internal risks associated with the quality and training of personnel, their loyalty, internal procedures for accounting and document circulation, with possible theft and other crimes by the employees or partners of a company.
Analyzing appeals of our clients from the recent period, I can say that at the moment criminal legal risks have in part turned into an area for unlimited imagination. Therefore, the business needs to “keep its head on a swivel” to the fullest extent, in order to incur minimum losses in the event of unexpected attacks.
UJBL.: Pre-trial investigations have now become a fairly widespread way of putting pressure on business, which, due to various set of circumstances, often do not find continuation in the judicial field. What happens at the pre-trial investigation stage? What is basically the role of a criminal attorney in this process?
Igor Fedorenko: There is no secret that, given the specifics of the Criminal Procedure Code adopted in 2012, the number of criminal cases in Ukraine will exceed the number of operating companies by several times. This trend is caused by simplification of the procedure for opening criminal proceedings.
According to the Code, a ground for initiating a criminal proceeding shall be any notification containing information about an imminent offence. The availability of such information obliges an investigator or a prosecutor to register a criminal proceeding in the Unified Register of Pre-Trial Investigations, then conduct its investigation and adopt one of two legally stipulated decisions — to stop due to the absence of elements of a crime or other grounds, or to bring the case to court.
For each registered criminal proceeding, an investigator has a possibility to apply all the plenitude of criminal coercive measures, ranging from summoning for interrogations to searches, arrests of property and the taking of officials into custody. This is rather frequently applied in order to put pressure on business or other opponents.
The way an investigation will progress depends on the task that is assigned and what became the basis for registration of such criminal proceeding in the URPI. If real offences have been found, such criminal proceedings usually lead to the drawing of an indictment and referral of the case to court. But, unfortunately, business is facing such scenario developments much more rarely.
More often such criminal proceedings arise in case of illegal criminal encroachments on a business. In this regard, there may be provocations on the part of unscrupulous contractors or company employees who provide the information necessary for registration in the URPI, which is not always reliable. Further on, a criminal proceeding is transformed into a way of using criminal coercion tools to force an entrepreneur either to pay an illegal reward, or to force an action in favor of a competitor and so on.
In this case, a criminal case is on the path of aggravation in the most inconve- nient for an enterprise or a businessman’s situation — mass interrogations, searches, seizure of documents, blocking of activities through the arrest of property.
In such situations, the role of lawyers in criminal cases lies in the correctness of identified threats and the development of an algorithm of protection against illegal attacks. Our task is to protect the rights of businessmen and employees of an enterprise during interrogations, to control the legality of search, to prevent illegal seizure of property or to return illegally arrested property and, most importantly, to let the intruders know that the business is resisting pressure and the investigation must be halted.
And if a criminal case is referred to court, it is necessary to ensure the observance of rights and provision of evidence for the benefit of the client on the groundlessness of a charge, which will lead to its closure.
UJBL.: How could the situation be remedied at legislative level?
I. F.: It is rather not about legislative changes, but the state’s unwillingness to lose its lever of pressure on business. It is also necessary to create in the minds of prosecutors and investigators their high responsibility precisely for compliance with the legality of the process, which now, unfortunately, is not in place. But this will become possible if the prestige of the law-enforcement profession increased, primarily through financial motivation. Then subordinate employees will not succumb to pressure from their leaders or representatives of the power for personal or political purposes. In fact, the point is not whether the process is perfect, but how it is interpreted by law-enforcement officers, depending on the tasks assigned by management.
If law-enforcement representatives are implicitly aware of the full responsibility of their profession, they will be as professional as possible, unbiased and honest, will be provided with a decent salary level, then it will be possible to talk about the development of the law-enforcement system and a quality investigation as a whole.
In addition, the publicizing of a case also has a negative effect on an investigation. As a result of high-profile statements voiced in the mass media, investigators of cases are forced to conduct their activities based on words spoken, and not on the provisions of the Criminal Procedure Code. This has a direct effect, lowering the level of quality of the investigation and prevents the truth being reached about the relationships being investigated.
UJBL.: What opportunities for abuse by law-enforcement bodies are de facto legalized by effective legislation? What do you have to deal with in your practice?
V. S.: At the moment, I can name the two most outrageous aspects. The first are changes adopted regarding the simplification of the procedure for applying a special pre-trial investigation. Let’s be honest, an “absent” procedure in this form is necessary for specific criminal proceedings. And only with unreasonable carelessness (“it will not concern me”) does it give an opportunity to allow such changes. After all, now a business trip outside of Ukraine both by businessmen, as well as MPs themselves, or stay in the occupied territories or in the ATO zone can become the basis for applying the “in absentia” procedure, passing a verdict and detaining a person upon their return immediately on the border. This law clearly limits the right to protection and access to justice.
The second is the impossibility of appealing against the commencement of a criminal prosecution procedure and further use of criminal investigation tools. In this case, the situation is rather connected not with the provision, but with the manipulations of its use. It is impossible to draft and adopt a perfect law. Only as soon as there is understanding that the investigation is an activity aimed at establishing the truth, not even an absolutely perfect law will work.
UJBL.: Is there any use, from your point of view, in introducing liability for law-enforcement officials for illegal criminal prosecution of business?
I. F.: I will say more, such responsibility had already been provided for in the Criminal Code of Ukraine in a number of articles. Both in case of excess of powers by law-enforcement officers, and illegal interference in business activities, as well as illegal arrest, detention, and so on. But there are very few cases in practice of prosecution of such persons.
At the moment, in a case brought by one of our clients, to whom the employees of the prosecutor’s office and the Security Service of Ukraine inflicted damage in the amount of UAH 1 million during an investigation, the relevant criminal complaint was filed. Unfortunately, a year and a half went by, after which the damage was, nevertheless, recovered.
In addition, it is rather often permissible to conduct investigative actions having nothing to do with a proceeding being investigated. At the same time, carrying out a search is accompanied by complete destruction of office premises, seized items may disappear, and the person responsible for such situations cannot be found. Therefore, it is logical to fix at the legislative level the compensation of the damage caused by actions of law-enforcement bodies by the latter or the state in the event that a victim’s fault had not been proven due to such actions.
UJBL.: What are the peculiarities of interaction between criminal attorneys with the new body of pre-trial investigations within the framework of corruption criminal proceedings, namely the National Anti-Corruption Bureau of Ukraine (NABU)?
V. S.: In our practice there have been various situations when interacting with representatives of the NABU. This is a fairly young body, for which the hopes are high. In our practice there are projects, working on which we met high-quality specialists, who communicate correctly and conduct investigative actions in an objective way. But if a case is of political interest, then the impression of NABU employees is the dramatic opposite. In such cases, we have repeatedly encountered violation of the principles of criminal proceedings, which are incompatible with the principles of legality and the rule of law.
This is most likely due to the fact that, in fact, there had been no facts of bringing employees to responsibility, since many NABU cases have not yet reached the trial stage. In this regard, there are no consequences from violation of the law by certain NABU employees who abuse their powers. Such consequences can be the recognition of invalid and unacceptable evidence in connection with the violation of the procedure for conducting investigative actions, which will lead to the collapse of high-profile cases in court and bringing of employees to criminal liability.
UJBL.: Why did the mechanism of application of the special judicial examination procedure that operates in European countries cause such a skeptical reaction in our lawyers community?
V. S.: First, this skeptical reaction is caused by the changes made with regard to the continuation of the simplified form of application of the special pre-trial investigation of criminal proceedings, allowing its application if:
— a suspect is hiding from investigative and judicial authorities in order to evade criminal responsibility and is put on an interstate and/or international wanted list;
— a suspect has been hiding for more than six months from investigative and judicial authorities in order to evade criminal responsibility;
— there is evidence that a suspect is outside Ukraine, on temporarily occupied territory of Ukraine or in the area where the Anti-Terrorist Operation is being conducted.
Thus, the very fact of crossing the border or leaving the ATO zone is sufficient for investigation and consideration of a case in absentia. They are adopted for a specific period which ends on 15 April 2017. But on 23 February 2017 MPs adopted a draft law extending the deadline till 2019.
A simplified procedure can also turn into a convenient mechanism for solving not only political but business conflicts too. In fact, in the notice of suspicion it will be sufficient to qualify the actions of a person as per corresponding with the “in absentia” provisions. And the prosecution does not even need to prove that a suspect is outside Ukraine to evade criminal responsibility. The very fact of the absence of a person in Ukraine is already enough to obtain a “permit” for an in absentia criminal proceeding. That is, a vacation abroad can result in an actual loss of freedom and business. This could become the most popular raiding scheme.
Secondly, MPs deliberately deprived the defence of the possibility of appealing against the decisions of the investigating judge in appellate and cassation order.
Such initiatives attempt to restrict one of the constitutional rights of a person and a citizen — the right to freedom of movement, free choice of residence, the right to freely leave the territory of Ukraine, which can significantly undermine the state’s authority for citizens.
UJBL.: How can one use the special confiscation procedure? What should be envisaged so that this does not become a legal tool for the divvying up of businesses and political persecution?
I. F.: Provisions adopted on special confiscation do not allow the attainment of the main goal of application of this proce- dure — filling budget coffers. Now this is a real instrument of violation of the rights of all categories of persons, including businessmen.
The main inconsistency of this procedure is that a special confiscation is applied to a person, who committed a crime at the investigation stage, when there is still no guilty verdict. There are many questions: whether the property had been confiscated and, as a result of the examination of the case, the person was not convicted, how the property will be returned, what to do if the property had been turned into someone’s property, etc. In addition, the use of confiscation prior to the sentence violates the general principles of presumption of innocence, property rights and the legitimacy of transactions. Proceeding from these principles, a person cannot be charged with the duty to prove the legality of possession of property.
Special confiscation is possible only in the case of a relevant court decision on the guilt of the suspect. In this case, this tool will not be used for political or business aims. Other deprivation of ownership can be only performed on the grounds provided by the Civil Code of Ukraine. If the transaction is proven invalid in a civil or business procedure, this is grounds for a verdict on taking away the property from a person who owns it illegally, regardless of the availability of criminal proceedings and judgments regarding it.
UJBL.: Do you expect a new wave of investigations based on analysis of electronic declarations? Can special confiscation be applied to the property stated in such declarations?
V. S.: Electronic declarations were introduced to ensure transparency of incomes and the financial condition of officials. And also as a deterrent against illegal actions by the latter.
But, taking into account national peculiarities, the information indicated in them is an essential lever for abuse and pressure on declarants by intruders. At the present time, if there is a need to neutralize an “objectionable” official, it is sufficient to have an application from any person who has read the declaration and believes that the information is incomplete, without any preliminary checks. The consequences are obvious — negative reputation, the end of a political career and the application of the entire scope of criminal procedure tools.
Therefore, it is necessary to analyze the risks that exist, including the political components, job position, the presence of conflicts, as well as to consult with specialists at the stage of completion of the declaration. This will help to avoid illegal criminal prosecution and its consequences.
With regard to the use of special confiscation of the property indicated, it is possible. But not because of the indication of property in the declaration, but as a result of the commission of a crime. There is a simple mechanism applied by NABU employees: the declarant worked in the public sphere and if his/her incomes do not coincide with expenses and acquisitions, then they can initiate criminal proceedings on illegal enrichment, recognize the property obtained as a result of the crime, which may become the basis for the application of special confiscation.
UJBL.: Do you expect mass, so-called corrupt criminal proceedings, in the near future? What should criminal lawyers be ready for?
I. F.: Demand on the part of law-enforcement bodies for corruption cases had always existed. The essential difference is that today mass actions are very public. Whereas earlier an investigation was quiet and, apart from sparse headlines and petty reports already at the stage of consideration of the case in court, there were no sensational statements, now every law-enforcer tries to provide a “scoop” for the media at any stage.
The real fight against corruption is not through high-profile cases, but by creating conditions in which corruption is not beneficial either to corrupt officials or to consumers of their illegal actions. Such conditions have not been created yet. And to the question “What should criminal lawyers be ready for?” I can answer that criminal lawyers are always in omnia paratus, ready for anything!
AVER LEX Key facts:
• Year of establishment
2012
• Number of lawyers/partners
20/6
• Core practice areas
Criminal Law/White-Collar Crime
Litigation
Tax
