Alternative Funding for the Ukrainian State – the Price of Sabotage?

While the Ukrainian state does not stop asking for financial assistance and new loan facilities from international financial institutions, the value of assets stolen by former government officials is appraised at UAH 300 billion. That was the introductory point made by Andriy Stelmashchuk, the recently appointed new managing partner of Vasil Kisil & Partners, at a press breakfast held on Monday, 8 June.

“Such high stake sums may fill the Ukrainian budget. However, political will is the launching mechanism of this process”, he said. It is noteworthy that Parliament expected that half of the mentioned sum could be recovered by Ukraine already in 2015. However, this process has not even been initiated, as serious legal work by a big multijurisdictional team of lawyers is required.

The situation stresses the pitfalls of Ukrainian procedural legislation, as it took almost six months to initiate subsequent criminal proceedings against officials under Western sanctions. Moreover, the former officials are rather successful in appealing against sanctions. This is testimony that time is against the Ukrainian state in this regard, and existing sabotage of some current officials leaves room for wide- reaching considerations.

According to Mr. Stelmashchuk, a special law on assets recovery could be an important step. In addition, the situation is blocked in Ukraine, because criminal proceedings against former state officials are not finalized. In its turn, this fact disables foreign jurisdictions with frozen assets to proceed with their recovery to Ukraine. The process is long-lasting and requires experienced foreign lawyers and strong coordination from Ukraine. “We explain this to our governmental authorities on a regular basis. But no reaction from their side is observed”, he admitted.