The Ukrainian Parliament made the first step towards transfer of powers to the National Agency of Ukraine for discovery, search and administration of assets received on the basis of corruption and other crimes. The powers are related not only to saving the assets arrested within the criminal proceedings but also to possessing, using and/or disposing such assets including the rights of sale, technical processing or transfer into management of the assets confiscated within the criminal proceedings. A corresponding draft law No. 4056 was approved in the first reading, but, however, the deputies did not support it in its entirety on the same day.
Ivan Bozhko, a lawyer at Ilyashev & Partners Law Firm made his comments about the novelties to The Yurydychna Praktyka:
“By the mentioned draft law it is proposed to vest the National Agency with the powers to possess, use and/or dispose of the assets arrested within the criminal proceedings including the rights to sell the assets confiscated within the criminal proceedings, subject them to technical processing or transfer into management.
It needs to be noted that the similar provisions are stipulated in the Directive 2014/42/EU of the European Parliament and of the Council as of April 03, 2014 “On the freezing and confiscation of instrumentalities and proceeds of crime in the European Union” item 32 of which states that property frozen with a view to possible subsequent confiscation should be managed adequately in order not to lose its economic value (for this purpose the member-states should take steps, including the possibility of selling or transferring the property to minimize such losses). It means that the proposed amendments are actually directed at adaptation of Ukrainian laws to the legislation of the EU on fighting the money laundering.
As regards to disposal of the mentioned assets, Article 21(4) of the Law of Ukraine “On National Agency of Ukraine for discovery, search and administration of assets received on the basis of corruption and other crimes” (as worded in the draft law) stipulates that sale or technical processing are allowed in case of objects or large volumes of goods safekeeping of which (through their bulkiness or through other reasons) is only possible with exertion of strong difficulties or when the expenses directed at ensuring the special conditions of safekeeping of assets are comparable to their value, or in case of goods or products that spoil quickly. On the one hand, the formulations are quite vague and may allow double interpretation, on the other hand – the draft law stipulates that the Cabinet of Ministers of Ukraine will establish an approximate list of such property. The National Agency will be able to apply the mentioned measures only on the basis of the corresponding decree upheld by investigating judge or court but, at the same time, the draft law misses clarifications about the possibility of appealing such decisions, as well as about the fact that submitting the appeal against the decree on transfer of the assets for sale or technical processing freezes its execution.
In the process of protection of assets from illegal activities it should be taken into consideration that the National Agency for Discovery and Administration of assets has the right to exercise its powers only after imposing seizure onto the certain property. It means that protection of proprietary rights, as in the past, will be based on appealing or preventing application by the investigating judge/court of the mentioned measures of support of criminal proceedings. In particular, attention should be placed onto the necessity of provision of proof by investigation authorities and prosecutors that such property was received by the
In particular one should zero in on attention at the necessity for the investigation authorities and prosecutors to provide proof that certain property was received by the suspect, defendant or convicted defendant by illegal means or represents profit received from the committed crime or that the third person, who is not a legitimate buyer of such property, knew or could have known about its origin.
It will be possible to talk about application of such norms after formation of corresponding judicial practice”.