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Ukrainian parliament reinstates responsibility for illicit enrichment

Ukrainian legislators at work. Photo:
Ukrainian parliament reinstates responsibility for illicit enrichment
This parliamentarian week in Ukraine saw contradictory discussions heating up around land market reform issues, an MP ordering services of a prostitute amid the session, and another MP crying as her colleagues ignored all her amendments to the draft law on the gas transport system. And it was just a mere part of the passion raging in the Ukrainian Parliament, Verkhovna Rada1, this week. Still, among all the turmoils, the Anti-Corruption Committee continues running like clockwork and anti-corruption initiatives get passed by the pro-presidential majority of MPs one by one. On 31 October, the Parliament approved a bill on criminal liability for illegal enrichment, reversing a decision of the Constitutional Court which struck down illicit enrichment legislature last February.

“Hello to all the officials with modest salaries having luxury real-estate properties [they registered] in their mother-in-law’s name. Now these officials are going to bear criminal responsibility again,” wrote Anastasiia Krasnosilska, an MP from the Servant of the People Party and the head of the Anti-Corruption Committee.

259 MPs voted for the corresponding draft law №1031 “On amendments to certain legislative acts of Ukraine concerning the illegal confiscation of assets of persons authorized to perform state or local government functions, and punishment for the acquisition of such assets.”

Read also: Anti-corruption steps of Ukraine’s new parliament endorsed by activists

The provisions themselves should rather be considered as fixing mistakes committed by the previous parliament and government than as an achievement of the new Rada

What was the problem of the previous illicit enrichment law

On 26 February 2019, the Constitutional Court of Ukraine made a decision that rolled back part of the achievements the country made in fighting corruption. In particular, it ruled to recognize article 368-2 of the Criminal Code which foresaw responsibility for illegal embezzlement as unconstitutional. As a result, according to the National Anti-Corruption Bureau (NABU), a new institution on investigating top-level corruption, 65 of their cases were to be closed. Other new institution, the National Agency on Corruption Prevention (NAZK), had its own complaints too. Due to the decision, it was not able to identify signs of illegal embezzlement in the 500 asset declarations it had started checking in 2019. Additionally, the decision contradicted Ukraine’s international obligations.

The article canceled by the Constitutional Court foresaw bringing to justice the public officials whose assets and expenditures clearly exceeded their official incomes. So, if a judge owned posh buildings and cars his salary couldn’t buy, he would have been considered corrupt. However, to avoid violating the presumption of innocence, investigators and prosecutors had to prove that the assets of suspected officials indeed were too luxurious in regard to their official incomes.

In 2017, 59 MPs had appealed the canceling of responsibility for illegal embezzlement. Some of them were accused under this article. On 26 February 2019, they finally succeeded as the Constitutional Court published its decision on recognizing the article of the Criminal Code on illegal embezzlement as unconstitutional.

According to the Court’s decision, the above-mentioned article did not comply with the principles of the rule of law and the presumption of innocence. In particular, it allegedly obliged a suspect to prove that his wealth is legal, whereas the presumption of innocence implies that these are the prosecutors who should provide proof of wrongdoing.

Read also: Constitutional Court of Ukraine cancels liability for illegal enrichment, striking down anti-corruption progress

Who should start worrying

Before the 31 October vote, the Anti-Corruption Centre, a leading anti-corruption NGO, published a list of officials who escaped justice due to the Constitution Court’s decision.

The officials who might have avoided responsibility for illegal enrichment. Photo: Anti-Corruption Action Centre.

Among them were:

  • Serhiy Semochko, ex-first deputy of the head of the External Intelligence Services suspected of embezzling of UAH 7.4 mn ($298,261);
  • Hennadiy Trukhanov, Odesa mayor – UAH 115 mn ($4.6 mn);
  • Pavlo Demchyna, ex-first deputy of the head of the Security Services – UAH 3.7 mn ($149,130);
  • Myroslav Prodan, the head of the Tax Service – UAH 88.1 mn ($3.6 mn):
  • Pavlo Vovk, the head of the Kyiv District Administrative Court – UAH 12mn ($483,666), a few MPs and other authorities.

Reinstating responsibility

President Volodymyr Zelenskyy drafted the law on amending the legislation in a way that would return the responsibility for illegal embezzlement back on 29 August, on the first working day of the new Parliament.

On 6 September, Parliament’s Anti-Corruption Committee recommended the Verkhovna Rada support the bill as a whole. On 11 September, the draft law passed the first reading.

A few days before the second reading vote, on the meeting of the Servant of the People faction, the President himself asked the MPs to support the bill. Eventually, 227 Servant of the People MPs voted for it. Also, seven MPs from Petro Poroshenko’s European Solidarity, 19 MPs from Sviatoslav Vakarchuk’s Voice (Holos) and six MPs who don’t belong to any faction supported the amended law too.

In fact, the bill is important in the context of Ukraine’s international obligations. The continuity of Ukraine’s anti-corruption policies, in particular, voting for the abovementioned bill, was among the necessary conditions of the International Monetary Fund (IMF) for reaching a new program of cooperation with Ukraine. Other conditions included adopting the state budget for the next year and proceeding with structural reforms, among which the judicial and health care changes are in focus.

How the corrupts are to be punished now

Presenting the law for the second reading Krasnosilska explained that it foresees that officials will bear responsibility in case their assets increase their legal incomes more than by UAH 6.5mn ($261,98). The crime is punishable by 5 to 10 years imprisonment.

The new law envisages that the asset illegally obtained by an official during the four year period before the law came into force is to be confiscated by the state if its cost exceeds UAH 1 mn ($39,74) and it is now owned either by that official or by a third party who acquired the asset following the order of the official or used the official’s money to purchase the asset.

The recently launched High Anti-Corruption Court is going to consider the cases on asset seizure.

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