White Collar Crimes in Ukraine

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White Collar Crimes in Ukraine White Collar Crimes in Ukraine

Among all white collar crimes the most difficult to fight is corruption, as it devours major components of social life.

In Ukraine, for instance, it has already taken over the Ukrainian healthcare and education systems and has already pervaded all state agencies. Consequently, corruption is the highest threat to the welfare of Ukraine. U.S. Business Council President Morgan Williams commented that “Kyiv is fighting two wars: one against Russian President Vladimir Putin and one against the old guard of corrupt bureaucrats who benefited from the previous system.”

Although the Ukrainian Parliament is working to refine Ukrainian anti-corruption legislation practically on a non-stop basis, the cornerstone for rooting out corruption is the full criminalization of bribery. If bribery was previously only in certain cases considered a criminal offense (for instance, bribery among public officials), now almost any act of active or passive bribery in the public or private sector can be considered a crime.

The implementation of the full criminalization concept has followed a long and complicated path, beginning with the ratification of the Council of Europe Civil Law Convention on Corruption in March 2005. Ukraine joined the Council of Europe’s Group of States against Corruption (“GRECO”) and had to adjust its laws according to its requirements. Consequently, in 2006 the development of new anti-corruption legislation started, and it is still going on.

New laws have resulted in prominent changes to the concepts of corruption and anti-corruption in Ukraine. Practically all actions connected with receiving an improper advantage were transformed into criminal offenses. For instance, the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine to Harmonize the National Legislation with the Standards of the Criminal Law Convention on Corruption” (the “Law on Harmonization”) excluded Articles 172-2 and 172-3 from the Code of Ukraine on Administrative Offenses, which established administrative liability for violation of restrictions related to abuse of office by offering or providing improper advantages. The Law on Harmonization refined and amended some articles of the Criminal Code of Ukraine in order to improve the statutory regime establishing criminal liability for bribery. Moreover, it provided amendments to Article 1 of the Law of Ukraine “On Grounds of Corruption Prevention and Counteraction,” so that now an improper advantage means funds or other property, advantages, privileges, services, or intangible assets promised, offered, provided, or received without lawful grounds. This definition provided grounds for the full criminalization of all actions connected with receiving an improper advantage. The term “improper advantage” has a very broad meaning, and covers both material and non-material values. Moreover, all acts of active and passive bribery are criminalized and the liability for corruption offenses in the public sector have become stricter.

In 2014 the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine to Implement the Action Plan for the European Union Liberalization of the Visa Regime for Ukraine, Regarding Liability of Legal Entities” (the “Law on Legal Entities”) entered into force. It established grounds for imposing criminal sanctions against legal entities by supplementing the Criminal Code of Ukraine with new articles concerning penalties against legal entities. As of September 1, 2014, criminal sanctions can be applied against any enterprise, agency, or organization except: state authorities, local self-governmental authorities, organizations established by them which are entirely financed from state or municipal budgets, compulsory social state insurance funds, the Deposit Guarantee Fund, and international organizations. Criminal sanctions can be applied to legal entities for crimes committed by authorized representatives on its behalf to obtain an improper advantage. If a crime has been committed, applicable sanctions can include a fine, seizure of property, or liquidation.

New anti-corruption legislation is only a first step in a long fight against corruption. Ukraine is fighting against the last 25 years of corruption, and there is still much to be done in this field.

By Oleksiy Didkovskiy, Managing Partner, Yaroslav Petrov, Counsel, and Oleksandr Yakovenko, Associate, Asters

This Article was originally published in Issue 2.2. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Last modified onFriday, 08 January 2016 17:12
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