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Controversial Draft Law on the Special Confiscation Regime


Artem Orel, Attorney at Law at Ilyashev & Partners Law Firm
Source:  Liga

Artem Orel, attorney at Ilyashev & Partners Law Firm, analyzes the draft law of people’s deputy Tetyana Chornovol aimed at return of Yanukovych’s money to Ukraine

One of the most discussed topics of the last week is the draft law of people’s deputy Tetyana Chornovol (No. 3025) on the special regime of confiscation of property of former government officials, which was registered in the Verkhovna Rada. The official justification for the special confiscation regime is quite logical: a year and a half s after the Revolution of Dignity only crumbs of billion stolen by the former government officials were returned to the state. However, many experts and civil society activists immediately started to sound the alarm claiming that the law is inconsistent with the Constitution, and instead of returning the loot it will result in numerous judicial recourse and multi-million fines. The apologists of the law, on the contrary, assure that the proposed arrangements are entirely legal, and adoption of the law is sabotaged by the order of Yanukovych and Co. The point in dispute was made by the scientific and expert department of the Verkhovna Rada, which did not approve the law. Artem Orel, attorney at Ilyashev & Partners Law Firm, analyzes weaknesses and controversial points of the law.

The draftsmen argue that the main purpose of the law is confiscation of criminally derived assets of Viktor Yanukovych and his entourage. However, under the effective legislation of Ukraine such confiscation is virtually impossible now. That is why the drafters propose to develop a framework for the application of the special confiscation regime regardless of proof of guilt of the person.

Nevertheless some provisions of the draft law are inconsistent. In particular, according to Art. 2 of the draft, a special regime is applied in the cases provided for by the first-fourth paragraphs of Art.  96-2 of the Criminal Code of Ukraine on the basis of a court order regardless of the time of acquisition of the property. In accordance with these articles of the Criminal Code, “special confiscation” is considered a measure of criminal law and means compulsory withdrawal in favor of the state pursuant to the court order of money, valuables and other property in case of offences under articles 354 (bribery), 364 (abuse of office), 364-1, 365-2 (abuse of power), 368-369 (obtaining illegal benefits (bribe-taking)). In accordance with Section XIV of the Criminal Code of Ukraine, “special confiscation” is a measure of criminal law. Although, pursuant to the same Articles 354, 364, 364-1, 365-2, 368-369 of the Criminal Code of Ukraine “special confiscation” is a kind of punishment, which in accordance with the general rules of the Criminal Code of Ukraine shall be imposed  in case of a verdict of guilty.

It should be noted that the draft law contradicts the criminal procedure rules of Ukraine regarding application of a special regime of special confiscation, because the draft does not introduce the necessary amendments to the Code of Criminal Procedure of Ukraine.

Further application of the law may be inconsistent with the constitutional principles such as the presumption of lawfulness of acquisition of property, presumption of innocence, equality of all trial participants, securing the right to defense. Thus, in accordance with Art. 41 of the Constitution of Ukraine “No one shall be unlawfully deprived of the right of property. The right of private property is inviolable. The expropriation of private property may be applied only as an exception by court order in cases, to the extent and by the procedure established by law”. In accordance with Art. 62 of the Constitution of Ukraine “A person is presumed innocent of committing a crime and shall not be subjected to criminal punishment until his or her guilt is proved through legal procedure and established by a court verdict of guilty”.

Obviously, the procedural subtleties regarding the procedure for the application of such an exceptional process, as the special confiscation of property without a court sentence, shall be duly set forth in the relevant legal acts. In particular, the Code of Criminal Procedure of Ukraine must be amended regarding protection of procedural rights of owners of the property, which is confiscated, and procedure for appeal against court decisions in the special regime of confiscation of property.

The Ukrainian lawmaker must not forget that, in accordance with the practice of the European Court of Human Rights (ECtHR), the regulatory provisions should be of high quality and conform to the principle of the rule of law. Further, judicial decisions should be based on appropriate evidence regarding the criminal origin of the property.

Otherwise, in the absence of such procedures laid down in legislation and/or their failure, adjudication on the special confiscation of property under a special regime will be contradictory considering Art. 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms. According to the above Article, “Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law, that will decide the dispute regarding his rights and obligations, or establish the validity of any charge against him…”.

Subsequently, proceedings regarding appeal against conflicting judicial acts would have a clear positive outlook in the ECtHR.

As for the appearance of this draft law right now, and not before, we can consider the version of receipt of some “dividends” before the local elections. In any case, the question regarding the time of appearance of the draft law is political rather than legal.

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