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UAH 10 billion of the Prosecutor General’s Office: How to Inflate the Indicator – NASHI GROSHI

Ways to inflate the statistics are not the initiative of separate prosecutors. They are anchored in the official Instructions.

At the beginning of 2017, the Prosecutor General Yuriy Lutsenko reported on the results of work of the Prosecutor General’s Office for 2016 in representing interests of citizens and state in court. He informed that the Prosecutor General’s Office returned 10 billion UAH to the state and its citizens.

Upon the request from the MP, Deputy Head of the Committee on Prevention and Counteraction of Corruption, Viktor Chumak, the Prosecutor General’s Office provided paper copies of court decisions based on which a number indicated above was calculated. Data provided by the Prosecutor General’s Office was divided in three blocks: Land, Money and Property. In total, there were 51 volumes of court decisions with attached documents that had to prove payments and property costs.

“Nashy Groshy” analyzed them and made the following conclusions:

  • In the volumes of the Prosecutor General’s Office provided to the MP Mr Chumak, there were more than 5,6 thousand court decisions lately analyzed by journalists of “Nashy Groshy”.
  • The sum of legal claims was nearly 9,6 billion UAH in more than 5,6 thousand court decisions.
  • “Nashy Groshy” managed to proved the protection of interests of state and citizens for the amount of UAH 3,8 billion. However, if all the peculiarities mentioned below had been taken into consideration, the real amount would have been even.
  • “Nashy Groshy” identified problems in the methodology of counting data on recover of funds upon a prosecutors’ actions and forming real indicators for information of the civil society.
Screenshot 2017-06-17 at 00.45.39
In this and all the following tables all data is taken from the documents provided to MP Viktor Chumak by the Prosecutor General’s Office to prove the published data regarding the allegedly returned UAH 10 billion as a result of protection of interests of state and citizens through the prosecutor’s representation in courts in 2016.

 

Before going to the detailed consideration of each block of recovered assets, the main problem should be mentioned: as of today, the Prosecutor General’s Office has lots of opportunities for manipulations with the amount of funds recovered in favour of state and citizens, since it’s almost impossible to prove it.

This should be described in more detail. Each sum within claims of the Prosecution office has to be proven by a court decision, published in the state register. It’s hard to find all this by yourself. One needs a list of court decisions the Prosecutor General’s Office refers to in its report. However, it’s also pretty hard to receive them, even MP Chumak could not do it. In reply to the official request to provide him such a list the Prosecutor General’s Office advised him to use the State Register of Court Decisions which is like searching for a needle in a haystack (though later he did receive the indicated 51 volumes in paper which were left after the press-conference of Mr. Lutsenko).

Besides this, we would like to get back to the recovered funds. One may lose his head from the numbers stated by representatives of the Prosecutor General’s Office.

It was on Christmas when Lutsenko wrote on Facebook about UAH 15,5 billion recovered in favour of citizens and state in 2016 upon claims of the Prosecutor General’s Office of Ukraine. “It is real to recover UAH 9 billion during the year,” he said and also added the information about the reversed illegal court decisions which prevented state losses in the amount of UAH  2,3 billion.

On 19 January 2017, the press-service of the Prosecutor General’s Office of Ukraine informed about more than UAH 16 billion. Along with this, it referred to “de facto enforced court decisions for the amount of UAH 6,4 billion” and UAH 2,6 billion of voluntary reimbursements in course of case proceedings. Totally it’s 8,9 billion UAH, meaning close to the number indicated by Lutsenko before.

In 2016, courts satisfied more than 4 thousand claims of prosecutors for the amount of UAH 7,5 billion, and additionally around UAH 2,5 billion was reimbursed voluntarily in the course of case proceedings. Court decisions were enforced for the amount of UAH 6,4 billion. UAH 3,9 billion was awarded iIn favour of parties in the interest of which acted the prosecutor. There were more than 1 thousand reversed illegal court decisions as the results of appeals which allowed to prevent state losses of UAH 2,2 billion. In general, as a result of conducted civil and legal measures more than UAh 16 billion was recovered in favour of citizens and the state.
In 2016, courts satisfied more than 4 thousand claims of prosecutors for the amount of UAH 7,5 billion, and additionally around UAH 2,5 billion was reimbursed voluntarily in the course of case proceedings. Court decisions were enforced for the amount of UAH 6,4 billion. UAH 3,9 billion was awarded iIn favour of parties in the interest of which acted the prosecutor. There were more than 1 thousand reversed illegal court decisions as the results of appeals which allowed to prevent state losses of UAH 2,2 billion. In general, as a result of conducted civil and legal measures more than UAh 16 billion was recovered in favour of citizens and the state.

 

Along with this, in February there was a press-conference of the Prosecutor General, where Mr Lutsenko when mentioning UAH 16 billion informed that in 2016 “there was around UAH 10 billion recovered based on enforced court decisions and claims of the prosecution office”.

ТАБЛ3
Representation of State Interests. Results of Representation of Interests of State and Citizens in Courts. More than UAH 16 billion was recovered as a result of representation of interests of state and citizens by prosecutors in courts. Nearly UAH 10 billion was reimbursed based on enforced court decisions and claims of the prosecution office. More than 1000 illegal court decisions were reversed which prevented state losses of UAH 2,3 billion.

 

Along with this, in the course of report it turns out that one has to say not ‘nearly 10 billion UAH’, but UAH 10,56 billion.

Representation of State Interests. Reimbursement of Funds. Totally in 2016 in favour of state and interests of citizens prosecution authorities recovered UAH 10 billion 560 million. UAH 10 billion upon the result representation in courts. UAH 560 million in the course of criminal investigations
Representation of State Interests. Reimbursement of Funds. Totally in 2016 in favour of state and interests of citizens prosecution authorities recovered UAH 10 billion 560 million. UAH 10 billion upon the result representation in courts. UAH 560 million in the course of criminal investigations.

 

In order to make it clear, everyone who is interested may refer to the main source containing the information about the recovered amounts, the report “On the work of a Prosecutor”, published on the official website of the Prosecutor General’s Office of Ukraine. However, one can count both 8 and 11 billion or any other number depending on how to count the provided numbers and without guidance regarding UAH 10 billion.

And here we come to the most important issue. How does the Prosecutor General’s Office do calculations?

A report “On the work of a Prosecutor” is formed based on the data of primary accounting: not later than the next day a prosecution officer who performs the job fills out the card in the system “Accounting and Statistics of Prosecution Authorities”. Along with this, this officer has to ensure completeness and accuracy of data entered which then shall be checked under the supervision of leadership of the respective units. The source of data about the work of a prosecutor may also be the supervisory proceedings, nomenclature cases, materials of inspections, procedural and other documents.

The general consolidated report “On the Work of a Prosecutor” covering all Ukraine is formed by the unit of organizational provision of the Unified Register of Pre-Trial Investigations and Informational and Analytical Work of the Prosecutor General’s Office.

Report “On the Work of a Prosecutor” is formed according to the requirements of the Instruction for Reporting on the Work of a Prosecutor (hereinafter referred to as – Instruction).

The instruction defines the order and methodology of counting amounts, satisfied by the court upon claims of the prosecutor. It clarifies that the table represents general results of the claims work of the prosecutor in the civil, economic, administrative and criminal proceedings. Along with this, data on satisfied claims in the interest of citizens, interests of state, on certain spheres (budget sphere, communal and state property, land issues etc.) shall be provided separately.

We would like to turn your attention to the fact that the Instruction outlines that during the accounting the prosecution office takes into consideration the value of property and land that is leased. Below we will explain why “Nashy Groshy” believe that it is these amounts (according to our calculations the value of property returned from different sources of use amounted to more than UAH 2 billion) that allow to substantially inflate indicators of work of the prosecution office.

Besides this, there is another important moment which concerns actually the amounts counted by the prosecution office. The Instruction only has the following statement regarding this:

The amount of the satisfied claim has to correspond with the amount indicated in resolution part of a court decision, and regarding the property (incl. lands that were owned or used) – with its value, indicated in the resolution part of a court decision, or indicated in the conclusion of an expert or another authorized person (authority).

Here we would like to once again turn your attention to the fact that according to “Nashy Groshy” calculations, value of the rented property, meaning the property in the state or communal ownership, but temporarily belonging to a private entity or a person is an incorrect way to increase the amounts of funds recovered to the budget. We would also like to mention that to many decisions, where the value of property was indicated by the court in the resolution part, there were evaluations attached received from private estimators, and the Prosecution Office made calculations based on the data from the latter. And it was the evaluations of property value that sometimes raised doubts. This again shows that the independent inspection of data provided by the Prosecutor General’s Office is doomed to failure.

Instruction has no clarifications regarding certain complicated cases. And we have faced hundreds of them while analyzing the provided “volumes of the Prosecutor General’s Office”. It is easy to count when a specific amount of damage or fine is being charged, or a land plot/property with certain value is being returned to state ownership. And how does the Prosecution Office count when there is no such clarity? For example, does the Prosecution office count as “income” around UAH 4 million of contracts for the supply of self-rescuers and respirators to “Lysychanskvugillya”. In this case the Prosecution office asked to invalidate the agreements and the court cancelled only the article of agreement (the method of payment – 100% advance payment), leaving the purchase in force.

Or did the Prosecution office make calculations upon decisions where the Prosecution office demanded to recognize as illegal the inactivity of city council regarding failure to plan expanses for vocational lyceum and oblige the city council to do this? These proceedings were stopped by the court since the city council adopted relevant decisions. In total the amount of the approved expanses for the lyceum equaled UAH 22 million, which obviously were counted by the prosecution office.

Generally, regarding the fact of how the prosecution office makes calculations and the facts that we have seen with our own eyes we would like to add the following:

  • prosecution office calculated decisions that were cancelled in the very same 2016. It’s worth mentioning that among the provided by the Prosecutor General’s Office of Ukraine data there are a lot of decisions that haven’t come into force and can be further cancelled or amounts of demands can be lessened.
  • We have already mentioned cases when it was totally unclear how does the prosecution make calculations. For example, there is a decision where the value of property was not indicated at all. Along with this, it has documents attached indicating the value of property dated back to USSR times and indicated in rubles: court obliged the city council to accept residential houses from state into communal property, and the value of houses was indicated according to the inventory made in 1977, 1988 and 1990.

Or here is another example, the decision about the hydraulic structure. The prosecution office attached to this decision a conclusion made in 1980 indicating the estimated value in Soviet rubles, and not of the hydraulic structure itself but of the whole pond where it is located.

We would also like to mention that there are a lot of court decisions that do not have any data on the amount of claim. And even in the “volumes of the Prosecutor General’s Office” it was not always that all rulings had relevant certificates or receipts attached to them, though it should have been obligatory. And we do not know what was taken for calculation by the Prosecution office in those cases. We also found working notes of one of the officers in the “volumes of the Prosecutor General’s Office”. It was indicating on decisions without any receipts attached. We’d like to add that the State Register of Court Decisions also does not have all court decisions that were taken into account by the Prosecution office.

  • The Prosecutor General’s Office does not always take omissions into account. In such cases a court makes a separate ruling on correction of omission. The amount may become much less. For example, we have seen a case when in the “volumes of the Prosecutor General’s Office” there were decisions for the amount of UAH 984 thousand and after checking the electronic state register and finding the court ruling on correction of omission it turned out that the real value of the property that was returned to the state equaled UAH 146 thousand. However, the prosecution office did not take that into account.
  • The Prosecutor General’s Office includes data from other years into the reporting period. We identified more than two dozens court decisions that were adopted in 2015 and neither revoked nor changed later. We also found decisions adopted in January 2017. Generally, this decision was about nearly UAH 1,8 million.
  • Not everything was really reocvered in 2016 since enterprises often receive a court permission to pay the amount in parts.

Meaning the volumes provided by the Prosecutor General’s Office have data on claims for UAH 9,6 billion. It is about two thirds of this amount that cannot be counted as state income. We are talking first of all about charging amounts from state enterprises in favor of the state; about the return of state land or property from lease or another way of temporary usage, revoked court decisions which the Prosecutor General’s Office reported on, or the amounts settled in previous years.

Therefore, we propose to take a closer look at what exactly was counted by the prosecution office and what, according to “Nashy Groshy”, should not be included:

PROVISIONAL SECTION: FROM STATE TO STATE

  • Recovery of debts and penalties from state and communal enterprises to the state budget.
  • Dispute between the state and a local authority, communal institution or a state enterprise regarding the right to property/land. Herewith, the value of this property is being counted.
  • Decisions of the court on obligations of the local authority to accept the property from state into communal ownership or to consider this issue during the session.

It should be mentioned that the local authority is not always happy to take the property to communal ownership which is then reported on by the Prosecutor General’s Office.

For example, since 2014 in Zhytomir region the district prosecutor’s office has demanded from the village council to take the melioration system on its balance sheets. In reality the system has not been operational for 10 years. In 2016, the court recognised the inactivity of the village council as illegal and obliged it to consider the issue of including the melioration system to its balance sheets. There is an interesting moment: a representative of the village council stated in his objections that, in particular, the prosecution office indicated in its claim that the value of this system equals UAH 740 thousand (this very amount was counted), but the system cannot cost that much as the mentioned objects were not taken care of and were not operational.

Or another example: a claim for UAH 80,5 million. This is the price of three residential houses in Poltava that the prosecution office makes the city take to communal ownership in court. Let us point out, that Poltava city council filed an appeal and cassation against a court decision obliging it to consider the relevant issue.

  • Court decisions according to which the land is being transferred from reserve fund to the state enterprise or there is a change of village boundaries, and the value of land plots is counted as that sums returned to the state.

For example, in Mykolaiv region the decision of the village council to withdraw land from the state enterprise «Ochakiv Forestry» and transfer it to reserve lands was cancelled . The Prosecution office believes that it recovered more than UAH 41 million.

One more case, in Volyn region court recognized as illegal a decision of district council to change boundaries of a village Svityaz and counted more than UAH 157 million, namely the cost of land, which have changed the boundaries, as the amount recovered by the Prosecution office.

PROVISIONAL SECTION: COUNTING VALUE OF PROPERTY/LAND RETURNED FROM EXPLOITATION 

Lease

  • Cancellation and invalidation of contracts / agreements (lease, use, personal term easement, superficies, etc.). It also includes court decisions on the return or recovery of property after the lease; cancellation of orders of local authorities in relation to such contracts.

The prosecutor’s office took into account the cost of state or municipal property that has been leased or used in other way. “Nashy Groshy” believe that the status of property has not changed – it belongs to the state as it has belonged before. Considering the decisions on the lease (and other types of usage) only really recovered damages, fines, etc. that should be considered.

Examples:

  1. In ”volumes of the Prosecutor General’s Office”, there is a ruling of the Economic court of Kharkiv region of October 2016 on putting on hold proceedings in the case. Prosecution office requested in its lawsuit to recover UAH 30 thousand of damage from the farm caused as a result of unauthorized occupation of 18 ha land plot. The firm voluntarily paid damages in the pretrial order and left the land plot. We counted that the state received 30 thousand UAH mentioned in the ruling. And the prosecution office also included the cost of the land, having eventually received the amount of UAH 616 thousand.
  2. There is also decision of 1 December 2016 made by the Economic court of Poltava region. This was a lawsuit on recovery of debt for lease, termination of a contract on lease of land and an obligation to return the 4,5 ha land plot to the village council. The court satisfied claim of a prosecutor, lease debt in the amount of UAH 47 thousand was recovered, the contract on lease of land was terminated. But the court refused to satisfy an obligation to return the land plot to the village council (it turned out that the firm did not use it at all after concluding a contract). The prosecution office calculated UAH 47 thousand of debt and UAH 2,2 million of land plot value.

You can see more examples regarding lease of land below in the section «Land».

  • Termination of storage contract: property that is not dropped out of the state property, returned to the owner, the state. In calculating the recovered costs prosecution office counts the price of this property.

PROVISIONAL SECTION: LACK OF ARGUABLE CASE, DECREE OF RESTITUTION

Offset Of Debts 

There are plenty of decisions having no arguable case, but the prosecution office counts the price of property anyway.

Examples:

  1. Prosecution Office filed a lawsuit on the recovery of UAH 520 thousand from a contractor that was, according to their data, appropriated by him by inflating the indicators in the act of acceptance without completing the works. But in the end, the trial was closed. It turned out that the object was completed and put into operation. The prosecution office counted these UAH 520 thousand.
  2. There is a court decision on recovery of UAH 7,6 million of debt for the consumed heat from the Communal Enterprise “Kryvbasvodokanal” in favour of SE “Kryvorizka Teplozentral”. According to the state register, it turned out that after this court decision mentioned communal and state enterprises concluded an agreement on termination of obligations by offsetting mutual homogeneous counter-claims.
  3. A court invalidated a sales and purchase contract for a BMW (1990) vehicle which was sold to the communal enterprise “Zhytomirvodokanal” in 2014 by a private person for UAH 133 thousand. The court obliged a person to return money to “Zhytomirvodokanal” and the communal enterprise, in its turn, to return a car to the person.
  4. There is a court decision on recognition of a sales and purchase agreement for property (pumping station and equipment) invalid. The court obliged a person to return the property worth UAH 32 thousand, and the city council was obliged to return UAH 31314 paid for this equipment to a person. It was not only that the restitution was applied, but this decision was cancelled by the Supreme Economic Court of Ukraine and sent to new trial.
  5. A court recognised a sales and purchase contract for a land plot in the landscape park “Zagrebellya” invalid and obliged a company to return the land plot. The city council was obliged to return to the ex-buyer UAH 2,1 million (the amount which the company paid for it).

PROVISIONAL SECTION: OTHER

  • There is a court decision on amendment of lease contract, namely increase of rent. What is counted by the Prosecution office in this case? For example, there is a court decision to increase the price of rent for a 0,3 ha land plot from 0,08% (UAH 699 annually) to 3% (UAH 26 309 annually). Should the difference in the annual rent be counted? Or should one count the rent amounts for months after the decision came into force?
  • There is a court decision where the prosecution office asked in its claim to recognise the contract of rent invalid and withdraw the property. After the prosecutor’s claim was filed to court, the village council and the firm removed illegal provisions from the rent contract for irrigation system (the rent amount was calculated in the amount of 10% (it was not clear what it was before)  UAH 8008,43 per month; depreciation payments should be designated for renewal of the system; the terms of insurance for the subject of rent were defined. What has bee counted in this case by the prosecution office is not clear. Possibly, it was the price of this irrigation system (UAH 1,4 million).
  • There are four court decisions on recognition as invalid and cancellation of decisions of a city council and ownership certificates of PJSC “State Food and Grain Corporation of Ukraine” for property complexes worth UAH 16,5 million that belong to state. The main peculiarity of these cases is that the state has a 100% share in PJSC “State Food and Grain Corporation of Ukraine”. And the dispute was about the fact that the mentioned property complexes shall stay in state ownership and shall not be transferred to the statutory fund of the PJSC “State Food and Grain Corporation of Ukraine”).

So having subtracted UAH 5,8 billion which were calculated based on type of decisions mentioned above in the provisional sections, we get UAH 3,8 billion of real recoveries in favour of the state and citizens with the help of prosecution office. However these are not all the cases where participation of prosecution office was necessary. This can be treated as another way to increase the indicators  by the Prosecutor General’s Office, because the prosecutor participated in cases where the claim could have been filed by the local authority, state enterprise etc., meaning parties could have solved the dispute without the participation of the prosecution office.

The most indicative in this situation is the story about the recovery of debt and penalties from “Kyivenergo” in favour of “Naftogaz”. In 2015, “Kyivenergo” had a debt for the supplied gas. On the same year, the Deputy Prosecutor of Kyiv filed a lawsuit for UAH 3,09 billion, with UAH 2,12 billion being the main debt, and the rest – penalties. Courts of first two instances did not consider this lawsuit because of lack of grounds for initiation of a claim by the prosecutor in the interests of “Naftogaz” that has its own lawyers. Only thanks to the Supreme Economic Court of Ukraine (judges – T.Drobotov, I.Aleeva, L.Rogach) pointing out the “particular importance of functioning of NJSC “Naftogaz of Ukraine” in the context of interests of state”, that this claim was put into trial. As a result, the court recovered from “Kyivenergo” in favour of “Naftogaz” UAH 728,2 million of penalties, a fine of 3% annual interest and inflation costs. This amount was accounted within the period from February to November 2015, namely a period of delay in payment for supplied gas (main debt was settled in a pre-trial proceedings). Let us mention that penalties recovered from “Kyivenergo” make more than a half of all amount of funds which “Nashy Groshy” counted as results of the prosecution office in 2016 in section “Funds”.

It is also not clear why the prosecution office was recovering additional debts instead of the Tax Service or was returning to the ownership of local communities the nonoperational property and escheat instead of lawyers of city or village councils, or was recovering debts for utilities instead of communal enterprises or a shortfall of received money instead of the Pension Fund.

The law “On Prosecution” clearly defines when a prosecutor can protect citizens in court – we are talking about the underage and disabled people. It also describes cases when a prosecutor has to represent interests of the state in a court  “if the protection of these interests is not conducted or is improperly conducted by state authorities, local authorities or by another acting authority having necessary mandate, as well as in case of lack of such a body”. Along with this, the law clearly defines cases when a prosecutor shall not represent interests of state in court.

Since we do not know all the circumstances of proceedings within the framework of which UAH 3,8 billion was recovered, we cannot confidently distinguish cases where participation of the prosecution office was really necessary, and where acting authorities could cope by themselves. We do not exclude the fact that there are cases when acting authorities and prosecution office collude and consciously help each other to improve the indicators.

Taking the above mentioned into account we stress on the fact that real indicators of the Prosecutor General’s Office can be less than stated billions.

One can’t omit the topic of recovery of funds in favour of state in corruption crimes. In the “volumes of the Prosecutor General’s Office” that “Nashy Groshy” read, there are not many criminal cases and the respective amounts are rather small. For example, ex-head of unit of the State Inspection of Agriculture in Kherson region, who was illegally writing-off and appropriating gasoline, was obliged by the court to pay in favour of this State Inspection UAH 55 000. Or the ex-chief specialist of Bilotserkivska District State Administration who had to reimburse UAH 41 000 for fraud operations with sanatorium and resort vouchers. Ex-chief accountant of the communal enterprise “Teplocomunenergo” from Odessa region had to return to the communal enterprise UAH 34 000 that was appropriated by her.

More indicative than the provided examples is the official data on execution of state budget of Ukraine for 2016. The line “confiscated funds and funds received from the sale of property, confiscated according to a court decision for a corruption-related felony” shows that last year the state received UAH 165 000 (out of planned 7,7 billion UAH)

Mainly recoveries mentioned in the “volumes of the Prosecutor General’s Office” were done in economic and civil cases. The Prosecutor General Yuriy Lutsenko, when boasting with much higher indicators compared to previous years, explained that out of 10 billion UAH – UAH 5 billion was received after return of lands, UAH 1,5 billion was real property and UAH 3,4 billion was received in cash.

We propose to review in detail the data of “Nashy Groshy” prepared based on the analysis of “volumes of the Prosecutor General’s Office of Ukraine” in each of the sections.

Land

 1 Terminated/recognized illegal/invalidated documents/decisions/decrees of executive authorities and/or local authorities and registrars certifying right to ownership of land/property; terminated agreements of sales and purchase of land between private persons and local authorities; land withdrawn from private persons; land/property recognized as state/communal or transferred into such ownership; the right of private persons to ownership of land terminated. 2 Land plots that were illegally used for gas stations, parking lot (1 decision) 3 Termination, suspension, invalidation of contracts/agreements (lease, use, personal term easement, superficies, joint activities, the organization of amateur and sports fishing on fishery water object, cooperation, services, training and organization of the production process, the actual use of land, socio-economic partnership). This also includes termination of decrees/decisions of executive and local authorities regarding such agreements, as well as decisions of courts on reimbursement or recovery of property after agreements ended. 4 Recovery of debts for lease; cases when together with this lease a contract was terminated; decision regarding amendments to lease contracts 5 Losses for actual/free use of land; damages for unauthorized occupation of a land plot; payables under the contract of sale and purchase and tax arrears 6 Obligation to not intervene with the access to state property, terminated contracts of barter, cancellation of decisions of local authorities regarding changes of boundaries of the settlement/withdrawal of lands from a state enterprise and their transfer to reserve funds, invalidation of a contract for reserving land, obligation to eliminate unauthorized construction, damage caused by illegal fishing, charged costs for treating the victim. 7 Decisions cancelled by the court of highest instance; sent for trial to the first instance; not within the year of 2016 8 Decisions cancelled by the highest instance; not within the year of 2016 9 Decisions, where the cost of land was not taken into account because it anyway belonged to state 10 Did not count the money value of land when the debts for lease were being recovered and at the same time the contract was being terminated 11 Did not count the money value of land plots 12 The money value of land plots was not taken into account, because according to the decisions made, the land was not returned to the state. For example, decisions on changing the boundaries of a village or transfer of land plots from reserve fund of the village to the state enterprise. 13 Decisions took into account not the complete regulatory evaluation but only the part of private persons had claims for: ½, 1/3 etc. Decisions cancelled by court of highest instance and decisions made not within the year of 2016 were also taken into account.

1 Terminated/recognized illegal/invalidated documents/decisions/decrees of executive authorities and/or local authorities and registrars certifying right to ownership of land/property; terminated agreements of sales and purchase of land between private persons and local authorities; land withdrawn from private persons; land/property recognized as state/communal or transferred into such ownership; the right of private persons to ownership of land terminated.
2 Land plots that were illegally used for gas stations, parking lot (1 decision)
3 Termination, suspension, invalidation of contracts/agreements (lease, use, personal term easement, superficies, joint activities, the organization of amateur and sports fishing on fishery water object, cooperation, services, training and organization of the production process, the actual use of land, socio-economic partnership). This also includes termination of decrees/decisions of executive and local authorities regarding such agreements, as well as decisions of courts on reimbursement or recovery of property after agreements ended.
4 Recovery of debts for lease; cases when together with this lease a contract was terminated; decision regarding amendments to lease contracts
5 Losses for actual/free use of land; damages for unauthorized occupation of a land plot; payables under the contract of sale and purchase and tax arrears
6 Obligation to not intervene with the access to state property, terminated contracts of barter, cancellation of decisions of local authorities regarding changes of boundaries of the settlement/withdrawal of lands from a state enterprise and their transfer to reserve funds, invalidation of a contract for reserving land, obligation to eliminate unauthorized construction, damage caused by illegal fishing, charged costs for treating the victim.
7 Decisions cancelled by the court of highest instance; sent for trial to the first instance; not within the year of 2016
8 Decisions cancelled by the highest instance; not within the year of 2016
9 Decisions, where the cost of land was not taken into account because it anyway belonged to state
10 Did not count the money value of land when the debts for lease were being recovered and at the same time the contract was being terminated
11 Did not count the money value of land plots
12 The money value of land plots was not taken into account, because according to the decisions made, the land was not returned to the state. For example, decisions on changing the boundaries of a village or transfer of land plots from reserve fund of the village to the state enterprise.
13 Decisions took into account not the complete regulatory evaluation but only the part of private persons had claims for: ½, 1/3 etc. Decisions cancelled by court of highest instance and decisions made not within the year of 2016 were also taken into account.

 

Calculations of “Nashy Groshy” showed that the cost of lands from Lutsenko’s folders is UAH 5,3 billion. However, it is by far not the whole amount that, using the common sense, can be counted. This UAH 5,3 billion does not include a penny of real money. This amount means the price of land indicated in the judicial documents.

What was proved

UAH 2,1 billion is evaluation of land that was returned by the state having withdrawn it from the private persons. The biggest amount of money was received from land plots near the Black Sea in Odessa and the ones in Kyiv and Kyiv region. However, even in those cases that we calculated we cannot say for sure that the land was finally returned. It is also hard to say what is its exact price.

Let’s take the case about Versailles of Ivaniushenko in Koncha-Zaspa, the land under which was returned by the Prosecutor General’s Office to Kyiv. The Prosecutor General’s Office itself gives two different numbers: UAH 1,4 billion  and UAH 166 million. At the same time the materials of the case have a third number,UAH 107 million that was taken by us for calculation.

The “Versailles” trial of Ivaniushenko has been going on since 2014, the case has undergone two cassations and the Supreme Court – the latter returned it back because the courts of previous instances did not say anything about the statute of limitations, since the land has been in the process of transfer from the city’s ownership starting from 2007. So now it is interesting how the Supreme Economic Court of Ukraine, that has already scheduled the caliam for cassation trial  for 13 June 2017, will react to the interpretation of the statute of limitation period and what the Supreme Court of Ukraine will have to say about this. They can both cancel the decisions of previous instances and return the case for the new consideration as it was done beforr. But the Prosecutor General’s Office has already reported that it returned the land to Kyiv.

UAH 83,5 million is returned to the state come from escheat – nobody’s lands, owners of which died without having any successors. Generally, the right of communities to such land shall be established in court, with local authorities being parties of the trial. However, the prosecution office is not forbidden to file a lawsuit because due to the escheat prosecutors improve their statistics. Communities are never against it  since in this case the court fee is the problem of the prosecutor.

UAH 42,6 million is the price of land that the prosecution helped return to communities. With UAH 38 million of this amount coming from one court decision. Communal Agricultural Enterprise “Kyinske” in Chernihiv region owned 2684 ha of land. Later the CAE became LLC, the property of CAE was divided among owners, people received certificates for it which later sold to private entrepreneurs. But the documents for ownership or usage of land plots could not be received by private persons, because the land was formally owned by the CAE. The prosecution office goes to court which cancels the right of CAE to ownership of land. The prosecution puts it as its achievement that it could return the land worth UAH 38 million to people. This was in the end calculated by us because the private persons could in the end register the land on themselves.

30 million UAH of the calculated amount came from squatting. Meaning: a private entity or a person walks around the city, sees the free land plot and puts a fence. Most often for the gas station but there was also one case with the parking lot. As the practice shows, communal enterprises do a good job without the prosecution office. For example, one week before the Eurovision city authorities by themselves dismantled 90 gas stations.

UAH 25 million is the recovered from private entities or persons as debts for lease, actual usage of land etc. or as damages inflicted to the state. We counted here only the amount that was recovered.

What we did not prove

“Nashy Groshy” did not prove UAH 3,04 billion in land cost. We did not calculate money evaluation of land in decisions on termination and invalidation of contracts/agreements (lease, use, personal term easement, superficies, etc.). This also includes court decisions on recovery or withdrawal of property after lease contract; cancellation of decrees of local authorities regarding such contracts. And we found hundreds of such cases. Prosecution office took into account the price of state or communal property that was on lease or used otherwise. “Nashy Groshy” believe that the state of property was not changed, it belongs to state as it did before. In decision on lease (and other forms of usage) one should take into account only really recovered losses, penalties etc. We also did not calculate the price of land after termination of storage contract: property that stayed in state property, returned to owner, the state. In calculations made by the prosecution office the price of this property was calculated.

There are hundreds appeals of higher courts, because we’re talking about dozens of hectares of land worth tens of millions of dollars, tenants go to courts and win them. Thus, for example, at the beginning of April Rivno agricultural cooperative won an appeal against the prosecution office. The appeal against a decision according to which a lease contract for land of forestry fund between the district state administration and the cooperative was terminated because damages caused by illegal mining of amber on it were identified. However, the prosecutors have already boasted that by this decision the state received back the land worth UAH 175,6 million.

There were lots of cases regarding amendments to lease contracts. For example, prosecution office is suing Communal Enterprise Bakhmatskiy and requires to invalidate the land lease contract for a 125,6 ha because the lease contract does not have a money evaluation of land, and due to that the amount of rent is being incorrectly calculated. In the end, the case ends with a settlement agreement whereas communal enterprise concludes an agreement on money evaluation of land. As of 2016 the evaluation has not been conducted. The prosecution office also added the document on evaluation of land to the court decision about termination of proceedings in this case that was provided in folders given to MP Chumak. The document said that the land plot of 125,26 ha costed UAH 3,05 million. We did not calculate this money because neither the land nor the money was returned to the state.

There are dozens of cases that we have assigned to a separate group which we call “good deeds”. Meaning a prosecution office did something good, but the budget or people did not get a penny of it. For example, the case when the Novhorod-Siverska District State Administration in 2011 allowed the land management organizations to form documents on allotment of land plots, which right to lease had to be sold during the auction. The area of land plots was 7,4 thousand ha costing more than UAH 181 million. The prosecution office filed a lawsuit, six years passed but the land plots were almost never rented, contracts on elaboration of land management projects were not concluded, so they asked to cancel this order because it did not bring money to the budget from using these lands. And the court canceled the order. When these 7 hectares are finally rented, then the money coming from this rent will be the income of state budget received thanks to the actions of the prosecution office. But does the Prosecutor General’s Office of Ukraine have the right to say that it returned to the budget UAH 181 million for 7 ha of land if the land was and stayed in the state property? If no, then what does that document on money evaluation of this land do in those folders?

Or there was another case when in November 2016 the prosecution office through the Volyn District Administrative Court recognized illegal and cancelled the decision of the district council “On Approval of the Project of Land Management Regarding Definition and Change of Boundaries of village Svityaz”, according to which the district council planned to enlarge the boundaries of Svityaz for 292,06 ha. Why do these folders with achievements of the Prosecutor General’s Office of Ukraine for 2016 include a document about the price of this land worth UAH 157,6 million?

Dozens of cases have mutual settlements. Meaning, when the state returned itself a land plot, but state or a city had to pay a private entity or a person money for it. For example, the city council sold a 4,2 ha land plot for UAH 2,1 million to a private company. The land plot was part of the landscape park “Zagrebellya”. The prosecution office indicated that the plot under dispute was part of the natural reserve fund to be used for forestry purposes. That is why the prosecution office asked to cancel the decision of the city council by which the land plot was sold, recognize the contract on sales and purchase invalid and oblige the company to return the land plot to the city council. In the end, the court satisfied the prosecutor’s claim. But the court also obliged the city council to return money to a private company that the latter spent for a land plot, UAH 2,1 million UAH. As a result, the prosecution office informed that it returned to the state a land plot worth UAH 2,1 million, but held back information that the same amount had to be repaid to a private company by the city council.

Funds

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1 Penalties in favour of NJSC “Naftogaz of Ukraine” recovered from: “PJSC “Kyivenergo” (UAH 788 262 008), PJSC “Oblteplokomunenergo” (UAH 10 906 440). Besides this, penalties recovered from communal enterprises “Mariupolteplomerezha” (UAH 49 726 967) and “Vyshgorodteplomerezha” (UAH 219 874), as well as from State Enterprise “Joint boiler- house of UMT and GZ of DG of MIA of Ukraine in Kyiv Region” (UAH 194 252).

2 The biggest tax penalties were established by the court in relation to the PJSC “Dnipropetrovsk Pointer Works” (UAH 22 696 326,82) and “Joint Ukrainian-American Enterprise “UKRKARPATOIL LTD” LLC (during proceedings the company voluntarily reimbursed the debt in the amount of UAH 12 783 789,87, and the court recovered additional UAH 17 151 166,6). From the rest of the enterprises recovered was up to UAH 4,5 million of debt.

3 The biggest debt for land share payments (UAH 22 415 210) was recovered from “Service-Technobud” Llc building a residential quarter at 5 Saperne pole St. in Kyiv.

4 In general, courts, according to the data provided by the Prosecutor General’s Office, in 2016 recovered 10,3 million of debt and penalties for utilities. UAH 2,1 million of them was recovered from private enterprises and sole proprietors, and UAH 8,2 million was recovered from state and communal enterprises (with UAH 7,7 million recovered from the Communal Enterprise “Kryvbasvodokanal” which later concluded an agreement on termination of obligations by offsetting mutual homogeneous counter-claims with State Enterprise “Kryvorizka Teplotsentral”).

5 Debt before the Ukrainian State Fund for Support of Agricultural Companies for unreturned amount of financial aid.

6 From the indicated general amount, UAH 2 162 981 is the debt of PE “Brothers KIP” (Ivano-Frankivsk region), which belongs to brothers Petro and Mykola Protsyv. The latter is ex-head of Service of Automobile Roads in the region. PE “Brothers KIP” is mentioned in investigations of local mass media regarding contractors’ agreements on cleaning and regulating of Carpathian rivers waterways.

7 Debt before local authorities for putting external advertisements (UAH 453 382), Debt for purchased state land plot (UAH 443 615), Recovery of Payment for Using Automobile Roads of General Usage by Heavy Vehicles (UAH 288 459), Debt for Provided Educational Services upon the Contract of Education on Commercial Basis (UAH 248 084).

8 Reimbursement of expenses for payment and delivery of preferential pensions before an employee reaches retirement age shall be carried our according to item 2 of Final Provisions of the Law of Ukraine “On General Obligatory State Pension Insurance” and article 13 of the Law of Ukraine “On Pension Provision”.

9 The biggest number of court decisions in the volumes provided by the Prosecutor General’s Office of Ukraine concerned reimbursement of expenses for treatment of a victim: 1630 decisions from the total of 5,6 thousand. Mainly these were small amounts of not more than several thousand UAH.

10 Illegally received state social aid for children for single mothers, low-income families, unemployment aid, subsidies, etc.

11 This includes, particularly, “State Scientific and Production Complex for Harvesting and Preservation of Autologous Blood and Blood Components”, where the part of State Property Fund of Ukraine amounts to 50,99% (UAH 85 thousand fine).

12 According to the data UAH, 616 thousand was recovered from PJSC “DTEK Pavlogradvugyllia” (Dnipropetrovsk region), UAH 58 thousand was recovered from the Communal Enterprise “Sokalteplocomunenergo” (Lviv region).

13 Agreement with the biggest amount, that was terminated in court in 2016, according to the data provided by the Prosecution Office, was the agreement on procurement of construction works of heating network between the Communal Enterprise “Heat of Odessa” and “Corporation DPL” Llc for the amount of 36 288 640,92 UAH. Besides this, in Kherson region after initiation of proceedings parties terminated at their own initiative the contracts on procurement of cafeteria services (13 contracts) for the amount of UAH 8 477 446,35.

14 In general, the Prosecutor General’s Office provided data regarding penalties in 2016 for the amount of almost UAH 59 million of the unused advance payment. UAH 55 929 106,47 of that amount was recovered by the “Ukrautodor” from PJSC “Construction Management Company №813” within the contract on reconstruction of the road “Kyiv-Kharkiv-Dovzhanskiy”.

15 The biggest reimbursement (UAH 2 360 948) awarded by the court, according to the data of the Prosecutor General’s Office of Ukraine, was assigned to the entrepreneur from Lviv region who inflated the costs of delivered construction works of multi-apartment residential house in the town Novyi Rozdil for officers of the Ministry of Internal Affairs of Ukraine (this decision has not yet come into force as of 15 May 2017).

16 This includes recovery of damages inflicted by illegally issued bonuses, sick leaves, compensations, pensions etc., as well as recovery of appropriated funds of state and communal enterprises. Amounts of claims in this line reach from around UAH 300 thousand to UAH 575 thousand.

17 This is the only decision and it concerns the PJSC “On Production of Insulin “Indar”” (PSJC “Ukrmedprom” owns a share in 70,7%, founder is the Ministry of Healthcare of Ukraine). The Ministry of Healthcare of Ukraine recovered from “Indar” penalties for violation of delivery terms within the procurement contract of pharmaceuticals for state funds.

18 One of the court decisions considered reimbursement of costs of wrongfully appropriated property (an official received a service apartment which he illegally sold). Other two decisions, included to this item on reimbursement of losses inflicted by abuse of office (illegal allotment of land plots; payment for a car that was not delivered), were reversed and returned for new trial.

19 1. “Nashy Groshy” in the line “Other” calculated decision of the court on amendments to the lease contract according to which the rent payments were increased (“Nashy Groshy” calculated the difference between the new and the old annual payment); price of the returned kindergarten in Cherkassy region which was illegally sold; recovered damage, inflicted by crimes. The biggest amount (UAH 8,31 million) in the line “Other” make recoveries from ex-law enforcement officers, judges and doctors. These are the amounts that the state paid to victims as a result of their actions as well as a result of making an illegal decision.

  1. “Nashy Groshy” did not calculate UAH 2,35 billion. 2,13 billion UAH out of this is the debt of “Kyivenergo” before the “Naftogaz” for the supplied gas (this amount was settled in a pre-trial order), UAH 138 million is a debt of CE “Mariupolteplomerezha” before the “Naftogaz”, paid already in 2015 at the expense of budget funds; another UAH 82 million was amount upon decisions which were later cancelled, decisions for 2015 or 2017, one proceeding closed due to limitation period, this was also the price of state property which was returned from lease, amounts of claims of prosecution office on inactivity of city council regarding planning expenses for vocational lyceums, amounts of contracts on procurement with state funds corrected by the court (in part of methods of payment).

20 Other recoveries from private persons in favour of other private persons (for example, amount of stolen property, lease, expenses for treatment or damages inflicted by using survivor’s pension not within its purpose).

Property

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1 In 2016 courts recognized the right of state property to a number of real estatr objects. In particular, the court decisions have already come into force that:

  • recognized the right of state property to a sports complex with a total area of 706,3 sq. meters at the address: Dnipropetrovsk region, city Dnipro, 52g Starokozatska st. Dnipropetrovsk regional organization of Physical and Sports Company “Ukraine” was obliged to free this place;
  • withdrew non-residential rooms at the address: 8 Radystiv st., city of Dnipro, from “Tools” Llc in favor of Dnipro City Council;
  • withdraw non-residential rooms with a total area of 64,9 sq. meters at the address 27 D. Yavornitskogo in Dnipro from two private persons in favor of Dnipro City Council;
  • recognized the right of state property (State Property Fund of Ukraine) to administrative 3-storied building with a total area of 2107,5 sq. meters at the address: Poltava, 37 Zhovtneva st.
  • withdrew from illegal ownership of a private person and returned to state property the wooden building with the area of 51,9 sq. meters in sanatorium “Kyrylivka” at the address: Zaporizhzhya region, Yakymivskiy district, village Kyrillivka, Sanatorna st.;
  • withdrew from “Capital Great” Llc in favor of Kyiv Council a group of building №6 (basement, mezzanine, book A) with a total area 706,10 sq. meters at the address: Kyiv, 2-A Mezhygirska st.;
  • withdrew from “Alliancegrad” Llc to property of Kyiv Council buildings № 1 and №7 (groups of premises №11) with a total area of 97,5 sq. meters in book A. And in the premises located at 9 Mykhailyvksa st. in Kyiv;
  • withdrew from a private person to communal property non-residential premises in the basement with an area of 75 sq. meters at the address: 30-A Andriiv Uzviz, city of Kyiv;
  • recognized right of state property in person of the National Academy of Medical Sciences of Ukraine to two apartments with a total area of 459,7 sq. meters at the address: 11 Rishelevska st. in Odessa;
  • withdrew from “Opera” Llc and returned to Odessa City Council the non-residential premises on first two floors with the total area of 590,2 sq. meters at the address: 4 Rishelevska st., Odessa;
  • withdrew from “Avers Stroy” Llc in favor of Odessa City Council the non-residential premises №503 with a total area of 246,3 sq. meters at the address: 8 Lanzheronivska st., Odessa.

Along with this, the following decisions have not yet come into force:

  • withdrew from a private person in favor of Odessa City Council of non-residential premises on the ground floor №595 with a total area of 109,6 sq. meters (alienated by the apparent agreement concluded by the city council with “Art” Llc) at the address in Odessa. Case is being considered by the cassation instance;
  • recognised the right of state property (State Property Fund of Ukraine) to non-residential premises with a total area of 1830,8 sq. meters at the address: 28 Panasa Myrnogo in Kyiv. Premises were withdrawn from the property of “Antur Trade” Llc. The case is being considered at the appeal instance;
  • recognised the right of state property (State Property Fund of Ukraine) to training and sports base “Svyatoshyn” at Zhytomyrske ave., 19 km in Kyiv with a total area of 5803,9 sq. meters; this property complex was withdrawn from the Federation of Trade Unions of Ukraine; the case is being considered by the Supreme Court of Ukraine;
  • “NIK-DAR” Llc is obliged to return to Kyiv Council the non-residential premises with a total area of 61,62 sq. meters at the address: 12-A Sanatorna st. in Kyiv. The case is being under consideration by the Supreme Court of Ukraine.

2  Court decisions of 2016 came into force, according to which:

  • a contract of sales and purchase was terminated and “Eximenergo” Llc was obliged to return to the department of the State Property Fund of Ukraine the object of unfinished construction of health complex at the address: city of Dnipro, 3 Akademika Starodubova sq.;
  • a contract of sales and purchase was invalidated and a hotel with a total are of 783,4 sq. meters at the address 44 Melnykova st (letter “A”) in Kyiv was withdrawn from “Matey” Llc to the state property;
  • invalidated was a contract of sales and purchase, concluded on 15.07.2010 between the Directorate General of Communal Ownership of Kyiv and PJSC “Svitanok”, of non-residential premises at 3-A B.Khmelnitskogo st. in Kyiv with a total area of 1231,5 sq. meters from №1 to №5 (groups of premises №10), №1 to №32 (groups of premises №11), from №1 to №29 (groups of premises №12) with a total area of 1019,8 sq. meters, places of joint usage with an area of 211,7 sq. meters.

The decision that has not yet come into force is, particularly, the one of 08 June 2016 on invalidation of a contract of sales and purchase and withdrawal from “Maksymakar” Llc and “Tomaks” Llc in favor of Kyiv Council a group of non-residential premises with a total area of 856,3 sq. meters at the address: Kyiv, 1-A Rudneva lane).

3 In the line “Other” it is calculated: the size of land share payment of the firm upon the contract, recognized by the court as concluded; size of share of state in the pensionate; amount for which price of building was lowered, which sales was recognized as illegal by the court; lease payments upon the contract established by the court; price of buildings of three schools, decision regarding privatization of which was cancelled by the court; as well as the costs of state property which was returned by court from illegal mortgage contract.

In the line “Other” there is an amount of UAH 86,1 million which “Nashy Groshy” did not calculate. This amount includes: decisions of the court on illegal transfer of property rights to trade mark (price of property rights – UAH 7,61 million) into a joint ownership with “Samson-IF” Llc by the Ivano-Frankivsk Regional State Union of Alcohol and Liquor Industry, since it was cancelled by the appellate instance; decisions of courts on cancellation of certificates for right of ownership of PJSC “DPZKU” to a number of complexes which belong to the state property; decisions of the court on cancellation of the state registration of the right of communal property to state hydraulic structures; decisions of courts on obligations of the city council to adopt from the state property into communal property the residential buildings the price of which was established according to the inventory conducted in 1977, 1988 and 1990; two cancelled by appellate decisions of the court of first instance which recognized as illegal the notary approval of the gift contract on communal building; as well as a court decision on recognition as illegal and cancellation of acts of description of property of the State Agency of Water Resources of Ukraine for the tax collateral, concluded by the tax inspection.

4 Recognition of the right to ownership of minors for the inherited property, prohibition of disposal of property until the child reaches the age of majority etc. It also includes two decisions in favour of disabled persons.

Pablished by Nashi Grohi on 2 June, 2017