Recovery of Stolen Assets in Ukraine: Losing Time and Money

Three years ago the ousted President of Ukraine, Viktor Yanukovych, and his close associates (so called “Family) had fled the country. Given their reported history of graft, embezzlement and misuse of public funds, there were high expectations from the public that the money stolen by them would soon return to the country.

The new government promised to return the stolen funds as soon as possible and even established a special fund in the budget for recovered proceeds of corruption. The high expectations were supported by the international community with introduction of personal sanctions against former Ukrainian leadership by the EU, US, Canada, and Switzerland.

In this three years, the hopes and illusions for immediate reforms and effective investigation of corruption faded. Yanukovych was gone, but the corrupt system of governance remained on place and kept benefiting those in power. As the reform of General Prosecutor’s Office failed, the authority remained politically dependent, non-transparent and ineffective. The start of judiciary reform was delayed until the end of 2016, and the results of purifying the system from corrupt judges (if any) would become substantial enough only in five years. The major preservation of old law enforcement and judiciary system resulted in the absence of prompt and effective investigation of the criminal cases regarding Yanukovych and his henchmen. Only one minor police officer has been convicted for the mass murder of protesters during Maidan events. None of the investigations of corrupt crimes has led to conviction yet. The evidence is being lost, the investigations are stuck with procedural protractions or frozen due to absence of suspects. Thus, the court verdicts are either delayed for years or may not happen at all.

Due to the absence of effective investigations, the EU sanctions were gradually lifted from 7 former officials out of 22. Their assets primarily blocked in the EU were released from seizure. For instance, due to absence of the proper investigation the EU had to lift sanctions from close Yanukovych’s ally, Yuriy Ivaniushchenko, although there were overwhelming reports of his involvement in multi million misappropriation of funds. Now he can freely use his assets abroad. Also, the special budgetary fund out of planned millions received only 265,071 UAH (approx. 9,000 EUR) in 2015-2016 which is mostly sourced from the prosecution of minor corruption offences. The chances of getting money stolen by Yanukovych both from abroad and domestically are almost lost as the General Prosecutor’s Office lost the precious time.

At least there is some silver lining. Recent years, Ukraine managed to establish parallel system of independent law enforcement and asset recovery bodies aimed at tackling top political corruption, namely National Anti-corruption Bureau and Specialized Anti-corruption Prosecution.  They are not investigating Yanukovych’s crimes, but are focused on the misconducts of acting officials. They will become fully functional once specialized system of anti-corruption courts is established. Currently, in different cases the new bodies have already seized assets valued approx. 200 mln USD, which have the potential to be recovered if the independent anti-corruption courts are fully functional. In order to facilitate the work new law enforcement agencies in the sphere of asset recovery, the National Asset Recovery and Management Agency was created. It is tasked with tracing illicit assets, proper management of seized and confiscated assets as well as support of recovery of stolen assets from abroad. Maybe, if Ukraine cannot return assets of fugitive former president, there is still a chance to prosecute acting kleptocrats and return their illicit funds to the people of Ukraine.

By Tetiana Shevchuk, AntAC lawyer, for 

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