Date of publication: 2 June 2025
Volodymyr Adonin, Attorney at Law
Source: The Page
“The analyst at the Economic Security Bureau of Ukraine is responsible for the objectivity, completeness, and impartiality of the analytical product created.” It is precisely this quote from the Law of Ukraine “On the Economic Security Bureau of Ukraine” that should serve as a starting point for discussing the problems faced by businesses in criminal proceedings involving the ESBU.
Almost every newly established company faces requests from the ESB following Article 93 of the Criminal Procedure Code of Ukraine in its second year of operation. This approach to information gathering does not raise any particular questions; on the contrary, it commands a certain amount of respect.
However, another approach seems more interesting, where criminal proceedings against a company begin with a search, and already at the stage of formalization with the search warrant, it becomes apparent that criminal proceedings have been initiated based on an analytical product.
What is an Economic Security Bureau analytical product, and why is it dangerous?
There is a lot of information online about the possibility of the ESBU using analytical products as evidence during the pre-trial investigation stage. However, the main factor perpetuating this vicious circle is the position of investigating judges, who ignore such subtleties and allow the ESBU to continue actively using analytical products at the stage of asset freezing by imposing seizures on accounts and property, etc.
The analytical product is compiled using ESBU’s information systems and other sources and contains a description of the research conducted and conclusions drawn based on its results, answers to questions posed by the customer requesting the analysis, or questions posed on their initiative during the study of the available information.
We are unlikely ever to see any business benefits from this analytical product, as the customer for such analysis is the ESBU itself, and the purpose of such analysis is always to identify violations of tax legislation. This conclusion is obvious given the area of application of analytical products: in almost 100% of cases, such products become the basis for opening criminal proceedings, since the very essence of an analyst’s work is to identify violations.
In practice, after compiling such a product and entering information based on it into the Unified Register of Pre-trial Investigations, ESBU’s detectives do not always act under the tasks defied by the Law of Ukraine “On the Economic Security Bureau of Ukraine”, one of which is to prevent, identify, and eliminate risks in the economic sphere by analyzing structured and unstructured data.
Unfortunately, a common consequence of compiling analytical products is pressure on businesses in various forms (searches, seizure of property), since at the stage of compiling analytical products, businesses cannot influence the process and potentially become hostage to the competence and motivation of a particular analyst.
It is no coincidence that this article begins with the words “The analyst at the Economic Security Bureau of Ukraine is responsible for the objectivity, completeness, and impartiality of the analytical product created,” because in analytical products (research) it was not always possible to see such a phrase as “probable violation” before, but in the future, analysts use this phrase under each of their conclusions, since no one has repealed, for example, Article 366 of the Criminal Code of Ukraine which defines and outlines the penalties for official forgery, because potentially every analyst may be held liable for compiling such a product, even with an indication of the likelihood of violations.
Even such wording as “probability of violations” still acts as a direct condition for entering information into the Unified Register of Pre-trial Investigations and initiating the active stage of criminal proceedings. And verification of circumstances likely established by the analyst usually takes place not from the standpoint of probability, but from the standpoint of facts and subsequent intervention in the company’s economic activities.
Accusations by the Economic Security Bureau of tax evasion
In 2023, ESB analysts compiled over 1,000 analytical products totaling UAH 155.9 billion. Of this amount, UAH 2.2 billion was transferred to Ukraine’s State Budget. The main sources of these revenues are criminal proceedings related to tax evasion and the circulation of excisable goods.
However, these figures should not be considered a success.
Firstly, we are not talking about convictions in which property was seized, thereby replenishing the budget with revenues that had previously been legalized from unpaid taxes, etc.
Secondly, the lion’s share of such indicators consists of companies that have chosen the path of voluntary compensation, although the admission by a certain person of their guilt for tax evasion. Thus, the budget does indeed receive replenishment, but not because of the success of the ESBU’s actions, but usually because of the freezing of assets and, as a result, the unwillingness to confront the system, which can take more than a year and considerable business resources, which is exactly what the ESBU is counting on.
Litigation in criminal proceedings under the Bureau’s jurisdiction
The activities of the ESBU in terms of compiling analytical products and their subsequent use are directly contrary to the provisions of the Criminal Procedure Code of Ukraine regarding the probative value of such products and case law on tax evasion cases, since it is the intentional violation of accounting and tax payment that is subject to proof in such cases, and not the result of an error or incorrect application of certain provisions of Tax Code.
However, after compiling an analytical report, the ESBU often does not initiate an investigation into the circumstances identified by the analyst, but immediately applies measures that only harm business processes and sometimes even block them.
In the practice of Ilyashev & Partners Law Firm, there was a case of accusations against a client, a Ukrainian retailer of fashion accessories, of alleged tax evasion for UAH 50 million based on an analytical product of the ESBU. This was sufficient to conduct searches and subsequently freeze assets. Thanks to our prompt work, we were able to quickly build a case, which led to the unfreezing of assets and the closure of criminal proceedings.
At the same time, this case is rather an exception, as choosing an active defense position does not usually prompt the ESBU to admit its mistakes and, even if there are strong arguments, may not prevent it from issuing a notice of suspicion and referring the case to court.
How to protect your business from criminal prosecution by the Economic Security Bureau?
We have long advised businesses to stay ahead of the curve. The ESBU is interested in almost all entrepreneurs, as the budget requires adherence to the principle of “quick money,” especially since their statistics are only expected to increase year after year.
What should you do then? Do not wait for an analytical report to be compiled, criminal proceedings to be initiated, and assets to be frozen. Instead, protect yourself with certain safeguards.
The first such safeguard could be a tax audit that does not reveal any violations, and if any are found, you will pay the funds officially into the budget.
The second option is to conduct an economic examination by private or state experts. If you have at least one of these documents, it will be much easier for you to defend yourself, as such documents will have higher legal force and discredit the analyst and his product when attempting to seize assets, and will subsequently help to close such proceedings.
In any case, it is advisable to start by engaging legal advisors who will analyze the risks of disputed issues and suggest the best way to minimize risks in the future.
