On June 30, the Verkhovna Rada adopted draft law No. 4547, which provided for amendments to the Criminal Procedure Code of Ukraine on peculiarities of submitting civil lawsuits in criminal proceedings in interests of depositors of bankrupt banks. This law is one of the conditionalities for cooperation between Ukraine and the International Monetary Fund.
This draft law aimed to increase chances of recovering stolen funds from banks to depositors, but one amendment nullified the idea.
However, Members of Parliament snuffed out the key provision of this draft law between the first and the second reading. This amendment was initiated by Members of Parliament from the “Servant of the People” Yuliia Yatsyk, Maksym Buzhanskyi, Mykola Galushko, Members of Parliament from the group “Za Maybutne” Sergiy Minko and the group “Dovira” Volodymyr Areshonkov.
This amendment was confirmed and supported by 226 Members of Parliament during the plenary session.
If the initial version of the draft law provided for the right of the Deposit Guarantee Fund to submit civil lawsuits in interests of those depositors who had demanded the recover of their assets from bankrupt bank, then in the second reading there was the amendment that allowed the Fund to submit such lawsuits only “on behalf of such persons”.
“The benefit of this amendment is not for owners of funds and assets in bankrupt banks and not for the Deposit Guarantee Fund, which tries to recover these funds, but only for owners of banks who illegally withdrew billions of hryvnia and bankrupted banks”, stated the expert of the AntAC Anton Marchuk.
This means that in order to submit the civil lawsuit in criminal proceeding the Deposit Guarantee Fund must first receive power of attorney from the depositor, who had demanded the recover of assets of bankrupt bank. Only then the Deposit Guarantee Fund will be able to submit the civil lawsuit regarding compensation of damages.
In practice, this will require the Deposit Guarantee Fund to send requests to hundreds and thousands of individuals, who had demanded the recover of assets lost in a bank, so the latter could provide power of attorney to the Fund in order to submit respective lawsuits.
It will also make it more difficult to comply with the priority of satisfaction of creditors’ requirements, which is established by the law, and will create unjustified preferences for those persons who have provided power of attorney to the Deposit Guarantee Fund to submit the civil lawsuit in criminal proceeding.
The amendment may also slow down lawsuits against owners and managers of bankrupt banks, as the number of participants in these lawsuits could significantly increase if civil lawsuits are submitted not by Deposit Guarantee Fund, but individual depositors who did not provide the Fund with a power of attorney.