Civil asset recoveryParallel proceedings
Is there any restriction on civil proceedings progressing in parallel with, or in advance of, criminal proceedings concerning the same subject matter?
There are no restrictions on civil proceedings progressing in advance of criminal proceedings concerning the same subject matter.
According to the Criminal Procedure Code of Ukraine, the person to whom pecuniary or non-pecuniary damage has been caused by a criminal offence has the right to enter a civil action in the course of criminal proceedings against the suspect, accused or other person or entity civilly liable by law for the damage caused. However, if an action has been dismissed in separate civil proceedings, the claimant cannot file the same civil claim in the course of criminal proceedings, and vice versa. Moreover, the claimant must confirm that he or she did not file the same claim (concerning the subject and grounds of the dispute) regarding the same defendant. Hence, the person has no right to bring a civil action before the civil court in parallel with the civil action in the criminal proceedings concerning the same subject matter.Forum
In which court should proceedings be brought?
According to the Civil Procedure Code of Ukraine, all cases that are examined in accordance with civil procedure are considered by the district courts as the first instance courts. In this regard, if the claimant wishes to recover his or her property from a defendant, it is a private property dispute. Therefore, such claims for the recovery of assets shall be brought in district courts, which have jurisdiction to hear at first instance any civil actions. However, there is a specificity of jurisdiction depending on the legal status of parties to the dispute. According to the Commercial Procedure Code of Ukraine, if the dispute is raised between legal entities, the claim shall be brought in the district commercial courts as the first instance courts.Limitation
What are the time limits for starting civil court proceedings?
The Civil Code of Ukraine provides general and specific time limitations for starting civil court proceedings. As regards asset recovery claims, the general time limitation shall be applied; the general limitation of an action is three years. In addition, the Civil Code provides that the duration of a limitation period shall begin from the day when a person finds out, or could find out, about the violation of his or her right, or about a person that violated the right.Jurisdiction
In what circumstances does the civil court have jurisdiction? How can a defendant challenge jurisdiction?
Under the Civil Procedure Code, civil jurisdiction is the defendant’s home location, namely, the place of residence of an individual, and the legal address of a legal entity. However, a claimant may use other jurisdictions. In particular, claims for damage caused to property may also be filed at the place of the damage.
In terms of challenging jurisdiction, first, a defendant can submit a response to the claim concerning jurisdiction irrelevance. Secondly, a defendant has the right to appeal the decision of the court of first instance under the Civil Procedure Code providing, inter alia, arguments are challenging jurisdiction.Time frame
What is the usual time frame for a claim to reach trial?
In general, there are several steps to the proceedings. This affects their general time frame. Pursuant to the Civil Procedure Code, the court commences proceedings in a case within five days of claim submission. The next step provides preliminary proceedings, which shall be conducted within 60 days of the day when proceedings are opened. The last step is a consideration on the merits. The court shall consider a case within 30 days. Therefore, if the hearings are not postponed, a claim reaches trial within approximately 90 days.Admissibility of evidence
What rules apply to the admissibility of evidence in civil proceedings?
Evidence in a civil proceeding is witnesses and their testimony, material evidence, written evidence, electronic evidence and experts’ reports.
The Civil Procedure Code establishes the following for recognising evidence as admissible:
- relevance of evidence: it shall include any information regarding the subject matter of the dispute;
- admissibility of evidence: the court shall not consider evidence obtained by violation of the procedure established by law;
- reliability of evidence: the credibility of a source that is being used as evidence; and
- sufficiency of evidence: it provides the possibility of establishing the existence or absence of the relevant circumstances of the case concerning the subject matter of the dispute.
What powers are available to compel witnesses to give evidence?
Under the Civil Procedure Code, there are several actions that may be used to compel witnesses to give evidence. For instance, parties in a case can summon witnesses by issuing a summons. However, if a properly summoned witness does not appear at the court hearing without a justified reason, or did not report the reason for non-appearance, he or she may be subject to the relevant authorities of the National Police of Ukraine with reimbursement to the state’s revenue for the costs of its implementation.Publicly available information
What sources of information about assets are publicly available?
To obtain information relevant for finding and tracing assets, the following databases or state registers can be used (the list is non-exhaustive):
- the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organisations of Ukraine contains information on legal entities and individual entrepreneurs registered in Ukraine and information on the ownership structure of legal entities, including the beneficial owners (controllers) of such persons, etc;
- the State Register of Proprietary Rights to Real Estate, and the State Land Cadastre contain information on land plots, other real estate objects and their owners;
- the Unified State Register of the Ministry of Internal Affairs, concerning vehicles contains information on registered vehicles and their owners; and
- the Unified State Register of Declarations of Persons Authorised to Perform Functions of the State or Local Self-Government contains information about property, income, expenses, financial obligations and private interests of all public servants, including the beneficiary ownership of assets.
The mentioned registers are publicly available, and information therefrom can be obtained via the internet (in some cases, it may require a fee payment), with the exception of certain confidential data.Cooperation with law enforcement agencies
Can information and evidence be obtained from law enforcement and regulatory agencies for use in civil proceedings?
Yes, the information and evidence from law enforcement and regulatory agencies may be obtained for use in civil proceedings. Under national legislation, any person has the right to information, namely, the free acquisition, use, distribution, storage and protection of information that is necessary for the exercising of rights, freedoms and legitimate interests. In order to obtain certain information, a person shall file a request to the competent authorities. If such information includes relevant circumstances, it can be recognised by a court as admissible evidence.Third-party disclosure
How can information be obtained from third parties not suspected of wrongdoing?
Information can be obtained from third parties by a witness summons in accordance with the special procedure under the Civil Procedure Code (see question 7). Moreover, concerning a legal entity, a party of the dispute can obtain relevant information by making a request to a different competent agency or authority. As to banks, the customer has the right to access information concerning bank activities. However, if a person wants to obtain information related to bank secrecy, it may be possible only under judicial procedure.Interim relief
What interim relief is available pre-judgment to prevent the dissipation of assets by, and to obtain information from, those suspected of involvement in the fraud?
According to the Civil Procedure Code, the following interim relief can be used as measures of procedural compulsion in a civil proceeding:
- seizure of property and money (or both) belonging to, or subject to transfer or payment to, the defendant and held by him or her or other persons;
- prohibition of taking certain actions;
- obligation of performing certain actions;
- prohibition of other persons taking actions on the subject matter of the dispute, making payments, transferring the property to the defendant or performing other obligations on behalf of him or her;
- suspension of the sale of the arrested property, if a claim is filed for the recognition of title to this property and a challenge to the property’s arrest;
- suspension of enforcement based on an executive document, which is contested by the debtor in court;
- transfer of the item that is the subject of the dispute to the custody of other persons who are not involved in resolving the dispute; and
- suspension of customs clearance of goods or objects.
How do courts punish failure to comply with court orders?
There are several types of legal liabilities on this matter. For instance, according to the Law on Enforcement Proceedings, when a debtor does not comply with a binding decision, the bailiff makes a resolution to impose a fine on the debtor and establishes a new term of execution. The amount of the fine depends on the status of the debtor (individual, legal entity or official). If the debtor repeatedly fails to comply with a decision without valid reasons, the bailiff in the same order imposes a double fine and appeals to the bodies of the pretrial investigation with a statement of commission of a criminal offence. Pursuant to the Criminal Code of Ukraine, failure to comply with a legally binding court order is recognised as a criminal offence and shall be punished by a fine or imprisonment. Moreover, the deprivation of the right to occupy certain positions or engage in certain activities within a certain term shall also be applied to officials. The Civil Procedure Code also provides a fine for non-compliance with a court order, namely, if a person fails to comply with court requirements during the civil proceedings; disobeys or resists the lawful order, process or other mandate of a court; does not provide relevant evidence in time; or interferes with the judicial proceedings.Obtaining evidence from other jurisdictions
How can information be obtained through courts in other jurisdictions to assist in the civil proceedings?
On 21 July 2001, Ukraine ratified the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters 1970. According to article 1 of this Convention, in civil or commercial matters, a judicial authority of a contracting state may, in accordance with the provisions of the law of that state, request the competent authority of another contracting state, by means of a letter of request, to provide evidence or to perform some other judicial act. According to article 2 of this Convention, a contracting state shall designate a central authority, which will undertake to receive letters of request coming from a judicial authority of another contracting state and to transmit them to the authority competent to execute them.
On 11 November 1994, Ukraine ratified the Minsk Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters. According to article 6 of this Convention, the contracting parties grant legal assistance to each other by carrying out the following procedural (and other) actions envisaged by law of the contracting parties, in particular:
- compiling and sending documents;
- sending and delivering exhibits;
- conducting expertise and interrogations of the parties, witnesses and experts; and
- recognising and fulfilling court decisions in civil cases, writs of execution and by way of handing.
What assistance will the civil court give in connection with civil asset recovery proceedings in other jurisdictions?
As mentioned in question 13, Ukraine is a party to the Hague Convention. Therefore, it undertakes to fulfil obligations for transmitting judicial documents. In accordance with the Convention, the contracting state makes a request to the competent central body designated by the international treaty with Ukraine. The central body sends the request to the Ministry of Justice of Ukraine to process the service of documents from the contracting state. For information on the Minsk Convention, see question 13.Causes of action
What are the main causes of action in civil asset recovery cases, and do they include proprietary claims?
Under the Civil Code, the main causes of action in civil asset recovery cases are as follows:
- breach of a contract;
- tort as the main cause of action;
- unjust enrichment; and
- infringement of intellectual property rights.
What remedies are available in a civil recovery action?
The Civil Code provides the following possible remedies in a civil recovery action, namely:
- recognition of title;
- recognition of the transaction as invalid;
- termination of the action that violates the right;
- compulsory fulfilment of duty;
- change in a legal relationship;
- termination of the legal relation;
- indemnification and other methods of compensation of property damage;
- compensation of moral (non-property) damage; and
- recognition of decisions, actions or omissions of the state authorities or their officials as illegal.
Moreover, the court may protect civil rights or interests in another way established by the contract, the law or by the court in cases determined by law.Judgment without full trial
Can a victim obtain a judgment without the need for a full trial?
Under the Civil Procedure Code, the following proceedings do not require a full trial:
- simplified proceedings (or summary proceedings), which are applied to minor cases (depending on the cost of the claim, the importance of the case, the legal remedies that the claimant is asking the court to apply, the category and complexity of the case, the existence of public interest in the current case, etc); and
- default proceedings, which are applied when all conditions are fulfilled as follows:
- a defendant was duly notified about the judicial hearing;
- a defendant did not appear at the judicial hearing and did not have a valid reasons for non-appearance or did not inform the court about the reasons;
- a defendant did not submit a response; and
- a claimant does not object to the dispute resolution.
What post-judgment relief is available to successful claimants?
Under the Civil Procedure Code, the successful claimant can apply for debt collection by filing an action before the court. The court also can limit the right of a person to cross the border until the defendant complies with the court’s decision. Moreover, the state enforcement officer can take coercive measures to enforce the judgment and recover the debt, including, but not limited to, seizure of the debtor’s funds or other assets, sale of the debtor’s assets at a public auction and collection of any regular payments.Enforcement
What methods of enforcement are available?
The Law on Enforcement Proceedings provides for the following methods of enforcement:
- collection of funds, securities or other property (property rights);
- recovery of salary, pension, scholarship and other debtor income;
- withdrawal from the debtor and transfer to the collector of the items specified in the decision; and
- a prohibition on the debtor to dispose of or use property owned by him or her on the right of ownership, including funds, or to establish a debtor’s obligation to use the property on terms and conditions specified by the bailiff.
What funding arrangements are available to parties contemplating or involved in litigation and do the courts have any powers to manage the overall cost of that litigation?
Under the Civil Procedure Code, there is a general rule that provides for the proportional partition of the court fee. This partition depends on the party’s satisfied claims: if a claim is fully satisfied by the court, the defendant shall pay the total sum of the court fee. If the claim is refused by the court, the claimant shall pay the total sum of the court fee. In the case of partial satisfaction, the parties shall pay a sum that is proportional to the satisfied claim. The same rule is established for overall court costs, including the costs of the legal assistance. In addition, a court has the power to limit the compensation of the overall costs. However, this limitation can only be applied based on a party’s application in cases of non-proportionality of costs, and complexity of the claim and trial.
Criminal asset recoveryInterim measures
Describe the legal framework in relation to interim measures in your jurisdiction.
According to the Criminal Procedure Code, the seizure of property as an interim measure can be applied by the court based on the motion of the investigator and prosecutor for the following:
- preservation of material evidence;
- special confiscation;
- confiscation of property as a type of punishment or criminal measure against a legal entity; and
- compensation for damage caused as a result of a criminal offence, or recovery from the legal entity of wrongful benefit received.
The court’s verdict can result in special confiscation orders transferring to the state any of the following property:
- that was obtained as a result of the commission of crime, or that was a proceed of such crime;
- that was intended (or used) to induce a person to commit a criminal violation, or finance and provide material support to, or as a reward for, its commission;
- that was the object of a criminal offence, except those items that should be returned to its owner; or
- that was found, fabricated, adapted or used as means or instrument for the commission of a criminal offence, preserved signs of it, or all of the above.
Is an investigation to identify, trace and freeze proceeds automatically initiated when certain serious crimes are detected? If not, what triggers an investigation?
Proceeds of crime can be subject to special confiscation. Special confiscation can be applied in cases where the offence warrants imprisonment as the basic punishment or a fine of more than 3000 tax-free minimum incomes of citizens (approximately 51,000 hryvnas at the time of writing). The investigator or prosecutor, or both, shall identify and trace the proceeds of the crimes through investigative and procedural actions (including but not limited to filing official requests to the National Agency of Ukraine for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes) and applying measures to ensure criminal proceedings (eg, temporary arrest of property).Confiscation – legal framework
Describe the legal framework in relation to confiscation of the proceeds of crime, including how the benefit figure is calculated.
According to the Criminal Code and the Criminal Procedure Code, the proceeds of crime could be confiscated under the special confiscation procedure applied by a court’s verdict (see question 21).
The approach for calculating the value of the benefit unlawfully obtained is not prescribed by the law, thus it should be established by court practice. However, owing to the lack of relevant proceedings, common case practice has not yet been established in this regard.
Additionally, the Criminal Procedure Code provides that to determine the value of damage caused by a criminal offence, expert research should be conducted in criminal proceedings.Confiscation procedure
Describe how confiscation works in practice.
The procedure of confiscation is established in the Criminal Executive Code of Ukraine. In particular, a court that has issued a verdict with confiscation of property sends an executive letter, a copy of the description of the property (if available) and a copy of the sentence for execution to the State Executive Service. The execution of punishment in the form of confiscation of property shall be carried out by the State Executive Service at the location of the property in accordance with the Law on Enforcement Proceedings.
If the property subject to confiscation was not defined in the court verdict, the bailiff shall locate a person’s assets by referring to public authorities, legal entities and individuals. The executive officer of the State Executive Service also has direct access to all state registers of property rights. All real estate property and vehicles shall be appraised by a professional appraiser. All other property shall be appraised by a bailiff based on the market prices or the information provided by parties. After the appraisal, the property is transferred for sale via electronic trading. The funds from the sale of confiscated property shall be transferred to the special account in the State Treasury. If the property is not sold through electronic trading, it shall be transferred for sale once more with a decreased price. If the property is not sold on the third electronic trading attempt, it becomes the property of the state.
The execution of the court rulings on confiscation, and special confiscation of assets with a value exceeding 10,000 minimum wages (approximately 37 million hryvnas at the time of writing), can be conducted by the National Agency for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes instead of the State Executive Service.Agencies
What agencies are responsible for tracing and confiscating the proceeds of crime in your jurisdiction?
According to the Criminal Procedure Code, only courts are empowered to make a decision on confiscation. As mentioned in question 24, the state agency dealing with the actual enforcement of confiscation ruling is the State Executive Service.
The tracing of proceeds of crime can be conducted by several state agencies, such as the following investigative authorities:
- the National Anti-Corruption Bureau of Ukraine;
- the National Police of Ukraine;
- the State Security Service of Ukraine;
- the State Bureau of Investigation of Ukraine (currently in the process of being established); and
- the Prosecutor General’s Office of Ukraine.
Also, the tracing of assets, including proceeds of crime, is one of the core functions of the National Agency for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes. The State Service for Financial Monitoring of Ukraine can also conduct some activities related to the tracing of assets, namely, monitoring suspicious financial transactions.Secondary proceeds
Is confiscation of secondary proceeds possible?
The Criminal Code provides that special confiscation can be applied to both property that was a proceed of crime and property that was an earning of one (secondary proceeds). Moreover, if the money, profits and other proceeds of crime have been completely or partially converted into other property, that property is also subject to special confiscation.Third-party ownership
Is it possible to confiscate property acquired by a third party or close relatives?
The Criminal Code provides the possibility of special confiscation of property acquired by any third party, including close relatives. In particular, proceeds of crime shall be confiscated from a third party if this party acquired the property from a suspect or accused person and knew, or should and could have known, that the proceeds were obtained illegally. Special confiscation shall not be applied to property owned by a bona fide purchaser.Expenses
Can the costs of tracing and confiscating assets be recovered by a relevant state agency?
Costs of tracing and confiscating assets are allocated from the budget of Ukraine for the purpose of the corresponding state agency conducting the actions. These costs cannot be recovered by other state authorities.Value-based confiscation
Is value-based confiscation allowed? If yes, how is the value assessment made?
If the special confiscation of proceeds of crime is inapplicable owing to their use, the impossibility of their separation from legally acquired property, their disposal or for other reasons, the court shall apply a confiscation of the amount of money equivalent to the value of the property. This amount will be determined by the court based on the evidence provided by the prosecution.Burden of proof
On whom is the burden of proof in a procedure to confiscate the proceeds of crime? Can the burden be reversed?
The burden of proof in criminal proceedings is borne by the prosecution, and it cannot be reversed.
However, in civil proceedings the burden of proof could be reversed on the owner of assets in the case of a prosecutor filing a claim recognising the assets as unjustified, and recovering them after the judgment of conviction against a public official comes into legal force, convicting him or her of the corruption (embezzlement, bribery, abuse of power, etc) or money laundering.Using confiscated property to settle claims
May confiscated property be used in satisfaction of civil claims for damages or compensation from a claim arising from the conviction?
As mentioned in question 24, the proceeds from selling confiscated property must be transferred to the state budget, which means that it cannot be used for compensation of damage. Moreover, according to the Criminal Code, special confiscation is not applicable to the proceeds, profits and other property intended for return to the owner, or for compensation for damage caused by a crime.Confiscation of profits
Is it possible to recover the financial advantage or profit obtained through the commission of criminal offences?
As mentioned in questions 21, 26 and 27, the financial profit obtained through the commission of crime is a subject to special confiscation in the case of meeting all other requirements for the legal procedure.Non-conviction based forfeiture
Can the proceeds of crime be confiscated without a conviction? Describe how the system works and any legal challenges to in rem confiscation.
No, proceeds of crime can only be confiscated based on the judgment of conviction, both in criminal and civil confiscations.Management of assets
After the seizure of the assets, how are they managed, and by whom? How does the managing authority deal with the hidden cost of management of the assets? Can the assets be utilised by the managing authority or a government agency as their own?
According to the Criminal Procedure Code, the seized assets with a value exceeding 200 minimum wages (approximately 368,000 hyrvnas as at the time of writing), based on the court ruling, can be transferred to the National Agency for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes for management. The management of the seized assets should be efficient, and maintain or increase their value; additionally, the managing agency cannot sell the managed property. The costs of management of the assets can be recovered by the manager from the revenue obtained from such management.Making requests for foreign legal assistance
Describe your jurisdiction’s legal framework and procedure to request international legal assistance concerning provisional measures in relation to the recovery of assets.
The request for foreign legal assistance is possible under the Criminal Procedure Code and the relevant international treaties that were ratified by Ukraine. As a general rule, in order to obtain foreign legal assistance, the prosecutor, or the court or investigator (with approval of the prosecutor), shall send to the empowered central authority of Ukraine a request for foreign legal assistance in criminal proceedings. During the pretrial investigation, the central authority is the Prosecutor General’s Office or the National Anti-Corruption Bureau of Ukraine. If the competent authority recognises this request as applicable, it sends the request to the empowered central authority of the country from which legal assistance is required directly or via diplomatic channels. Ukraine also has decentralised communication with Poland, Moldova and Hungary according to bilateral treaties.
Evidence obtained as a result of foreign legal assistance can be used only in the criminal proceeding related to the request sent if no other agreements were made with the requested party. This evidence shall not be recognised as admissible by the court if the request was transferred to the requested party by violating established procedures.Complying with requests for foreign legal assistance
Describe your jurisdiction’s legal framework and procedure to meet foreign requests for legal assistance concerning provisional measures in relation to the recovery of assets.
Under the Criminal Procedure Code, the foreign request can be executed in the following way. First, after receiving a foreign request, the central authority assesses its relevance and compliance with the laws or international treaties of Ukraine. If the request is appropriate, the central authority sends it to the competent authority for execution. The central authority of Ukraine shall send materials obtained during the execution of the request to the designated authority of the requesting party within 10 days of receiving them from the competent authority concerned. During the pretrial investigation, the empowered central authority is the Prosecutor General’s Office or the National Anti-Corruption Bureau.
If, according to Ukranian law, permission is required from the court to carry out a specific procedural action, it can only be carried out after obtaining permission, even if it is not required under the legislation of the requesting party.
Based on the request for foreign legal assistance, the relevant state authorities of Ukraine can conduct procedural actions aimed to trace and seize proceeds of crime and property owned by suspected or convicted persons. Those assets can be confiscated to the state budget of Ukraine if it is prescribed by a verdict or other judgment of the requesting party court. The Ukrainian court can decide to transfer confiscated assets to the requesting party as compensation for the damage caused to the victims of a crime, or following the international treaties on distribution of confiscated assets or its monetary equivalent.
Providing foreign legal assistance can be fully or partially postponed if it interrupts a pretrial investigation or court trial in Ukraine. Transferring seized and confiscated assets can also be postponed until after the conclusion of a pretrial investigation, the court trial or hearing of the case regarding third parties’ rights.Treaties
To which international conventions with provisions on asset recovery is your state a signatory?
Ukraine is a signatory to the following conventions relating to asset recovery:
- the United Nations Convention against Corruption 2003;
- the European Convention on Mutual Assistance in Criminal Matters 1959, Additional Protocol of 1978 and Second Additional Protocol of 2001;
- the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime 1990 and the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism 2005;
- the Council of Europe Criminal Law Convention on Corruption 1999; and
- the Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters 1993 (the Minsk Convention), which can be applicable only in relations between Ukraine and some Commonwealth of Independent States countries.
Can criminal asset recovery powers be used by private prosecutors?
No, there is no private prosecution service in Ukraine. However, if after filing an indictment to the court, a public prosecutor refuses to continue to press charges during the trial, the victim or victim’s attorney can press charges instead of the public prosecutor.
Update and trendsEmerging trends
Are there any emerging trends or hot topics in civil and criminal asset recovery in your jurisdiction?Emerging trends39 Are there any emerging trends or hot topics in civil and criminal asset recovery in your jurisdiction?
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