Cover Story (#7-8 July-August 2021)

Comfortable Defense

The Western partners of the state of Ukraine consistently pursue ongoing anti-corruption reform with a special focus on developing its institutional capacities. The commitments resulted in the establishment of subsequent authorities, namely the Anti-Corruption Bureau, Anti-Corruption Court and the Anti-Corruption Prosecutors Office.

The new wave of political cases and investigation of business crimes resulted in the initiation of resonant criminal proceedings. The white-collar crime practice continued its upcoming track, keeping criminal defense attorneys busy and ready for high media resonance. We met up with Olga Prosyanyuk and Igor Fedorenko, partners of AVER LEX attorney at law, to discuss the current practice and peculiarities of client representation before the High Anti-Corruption Court of Ukraine.

Anti-corruption investigations against politicians and public officials have become more frequent in recent years in Ukraine. What kinds of requests do lawyers receive most of all?

Olga Prosyanyuk: Anti-corruption investigations against public officials and well-known politicians have always evoked wide public response. Due to the established jurisdiction, the majority of such cases are now tried by the newly-established High Anti-Corruption Court. Naturally, this category of cases sparks a high level of professional interest for us, as we are a specialized law firm. When the anti-corruption authorities, such as the National Anti-Corruption Bureau of Ukraine (NABU), Special Anti-Corruption Prosecutors Office (SAPO) and High Anti-Corruption Court (HACC) were being established, it was assumed that they would be considering cases related, for the most part, to politicians, public officials and state-owned enterprises. Indeed, we work with a large number of claims regarding inaccurate income declarations, abuse of office, receiving and giving unlawful benefit and other charges that are typical of the sphere of public administration.

Igor Fedorenko: However, we also frequently receive requests for legal defense in proceedings carried out by the anti-corruption agencies from representatives of private business. For example, businessmen can be charged with embezzlement of government property by malversation (corrupt behavior while holding public office), with charges of legalization (laundering) of the proceeds of crime.

It is common knowledge that the High Anti-Corruption Court was established for trying anti-corruption cases in Ukraine. How would you describe its effectiveness?

O.P.: I believe the effectiveness of any court, including the HACC, must be determined by how the basic principles of justice are ensured and observed, and not by the statistics of how many cases were tried and individuals convicted. We need to focus on whether the court is committed to the rule of law and whether it provides for the principle of equality of arms; whether it is professional and whether it is subjected to influence, including by the government or the media. Also, in todays legal reality, its effectiveness can be determined by the number of cases, when the rights of a person were protected against groundless charges and when acquittals were delivered.

Taking into consideration the fact that the court has not been in operation for long, it is still too early to evaluate its effectiveness. The first attempts at evaluation of the effectiveness can be made after the case law of consideration of HACC decisions by the Supreme Court is established.

What is your experience of participation in court cases in criminal proceedings that fall within the jurisdiction of the HACC? Can these cases relate to the interests of companies or are they related only to the public sector?

I.F.: A large part of the firms client projects is related specifically to defending client interests in the HACC, either at the stage of pre-trial investigation or in court proceedings. Attorneys and partners participate in the sessions of this court essentially every day.

As weve already mentioned, a significant part of these projects is related to the interests of private business in public procurement cases. Unfortunately, quite often NABU detectives mistakenly classify legitimate commercial activity, for which a certain risk is typical, as a way of committing a crime. This approach by law-enforcement agencies has been recognized by the European Court of Human Rights as wrong and violating fundamental human rights (ECHR Judgment in Navalnyy and Ofitserov v. Russia of 23 February 2016 (Applications nos. 46632/13 and 28671/14). However, the NABU continues to charge representatives of business with malfeasance in office and property offenses for activity that is carried out in compliance with the provisions of the law and contract laws.

Therefore, our hope is that the HACC will become the instruction that will impartially separate commercial relations from criminal activity and will be the protector of interests of businesses that operate legally against the mistakes and arbitrariness of law-enforcement agencies.

Are there any differences or certain peculiarities in consideration of cases in criminal proceedings by HACC judges compared to courts of general jurisdiction? What are they?

O.P.: The differences do exist. The HACC is about complying with reasonable time, ensuring maximum opportunities for exercising the procedural right to appeal to court and receiving a reasoned judgment. The HACCs judgments are generally a separate form of legal art, where the judges employ different types of interpretation of the provisions of the law, thus even introducing conceptually new case law. In addition, protection of client interests in the High Anti-Corruption Court is definitely comfortable even from the standpoint of such simple things as communications with the parties to the case and a balanced schedule of court hearings, with consideration of the interests of the parties and other participants of the case.

How is HACC case law formed? Do you see any peculiarities?

I.F.: The particular feature of the HACC judgments is a rather thorough presentation of the reasoning and conclusions that the judgment is based on. It is rather indicative that the HACC judges actively apply the conclusions presented in the judgments of the European Court of Human Rights, citing them not just formally, but according to a certain situation. Consideration of cases is described by its rather fast pace and, on the basis of the results of a short period of work, we can already see acquittals as well as rather hard guilty verdicts that involve real punishment in the form of imprisonment against convicted persons.

What is the situation with observance of the rights of the representatives of business and commercial entities during consideration of cases by HACC judges? Do HACC judges observe the principle of balancing interests when trying these cases?

I.F.: Any criminal law activity on the part of law-enforcement agencies and the HACC is aimed at performance of the public law enforcement function and involves interference as well as possible violation of the rights of private entities. Therefore, maintaining the balance between these categories is the hardest and most important task of any court, including the HACC. There are, however, many external circumstances, when the HACC is inclined to break this balance in favor of law-enforcement agencies under the influence of political, media and social factors. After all, any judgment in favor of business or a private individual in criminal proceedings is viewed as treason even if such judgment is lawful and reasoned. At the same time, it is realistic to defend business interests at the HACC, provided that you have a well-grounded legal position, confirmed by the proper evidence. This applies to both cancellation of asset seizure, which was groundlessly initiated by law-enforcement agencies, and to other issues that impact the rights and interests of business during the investigation of criminal proceedings of relevant categories.

Asset forfeiture and civil forfeiture: what is the difference between these instruments, and which of them plays the leading role for the HACC?

O.P.: The legal mechanism of civil forfeiture, which was introduced with the objective of collecting unjustified assets for the national budget, is new for the national law of Ukraine. Unjustified assets are assets acquired by a person from unknown (unidentified) sources while working as a public servant or performing the functions of the state, with no evidence that these were obtained legally.

According to the information published by the HACC, as of the beginning of June 2021 the court had received only two such civil claims. The peculiarity of this mechanism is that the claim on recognizing the assets as unjustified can be filed even without the initiation of criminal proceedings if the difference between the value of such assets and legal income of the person exceeds UAH 1,003,500 and, at the same time, does not exceed the limit set by the article of law on criminal liability for illicit enrichment. In the event of initiation of criminal proceedings, the lodging of a claim is done under condition of closure of the criminal proceedings on the grounds of the illicit enrichment article with regard to the authorized exclusively due to lack of evidence, decriminalization of the offense, death of a person, failure by the issuing state to provide consent, or expiry of the period of pre-trial investigation.

I.F.: It is important to keep in mind that when we speak about civil forfeiture, only assets obtained after 28 November 2019 can come under the scrutiny of law-enforcement officers, while the asset forfeiture mechanism involves no such restrictions. Civil forfeiture is realized in a much simpler way than asset forfeiture within criminal proceedings, as it is the asset owner who has to prove the lawfulness of possession of his/her assets and not a law-enforcement agency. While asset forfeiture cannot be applied to assets owned by a bona fide purchaser, the civil forfeiture mechanism does not provide for such restrictions, and an action to declare the assets as unjustified may be brought against any third party, and is not limited to relatives or family members.

The HACC naturally plays the leading role in the implementation of the civil forfeiture mechanism, as the HACCs judges will be the ones to consider the corresponding claims within the civil justice procedure (with the exception of the claims in which a judge or a HACC employee is the respondent).

Has the HACC become a significant instrument of the fight against corruption? Can citizens and businesses feel better protected against cases of corruption now that we have NABU and HACC?

O.P.: September 2021 will mark the start of the third year of the HACCs operation. The first year could be marked as the year of formation of a single coordinated mechanism of work of the anti-corruption infrastructure consisting of the HACC, NABU and SAPO. It would have been too demanding on the part of society to expect some global results in the first year. Nonetheless, even then, the court, guided by the principle of impartial and fair justice, was able to show the first indicators of activity in the form of a large number of cases and dozens of judgments delivered. I am convinced that outside observers and attorneys representing their clients at the HACC have no doubts about the professionalism, high level of responsibility and dedication of HACC judges. Nonetheless, only the final judgments in the case of top public officials can become the litmus test that society believes will testify to the effectiveness of anti-corruption authorities. Therefore, there is obviously discussion about whether or not the work of the HACC and other anti-corruption institutions has met expectations. The HACC has definitely become an important instrument in the fight against corruption, as its role is not only punitive but also preventive.

In your opinion, does the HACC observe the adversarial principle? Or is it inclined towards delivering more guilty verdicts?

I.F.: We quite often hear attorneys say that the HACC is inclined to deliver more guilty verdicts. Based on my own experience, I can only say that from the defense point of view, in certain situations attorneys have to take a few more steps to achieving the goal and to get the court to deliver a judgment in favor of protecting the interests of the client, but this does not mean that approval of such judgments is unreal or that they are unique. Representing the interests of a client at the HACC requires a high level of professionalism from an attorney, in addition to critical thinking, the ability to correctly interpret criminal procedure law and, naturally, creativity. If an attorney has all of those things then HACC judges will not only carefully hear the position of the defense which, by the way, happens absolutely always, but will also pass legal judgment in favor of the client.

Does the high level of media coverage of cases that are usually tried by the court impact the work of the defense counsel. If so, to what extent?

O.P.: In conditions of modern information content, the influence of the media can be seen not only in the field of justice, but in absolutely every area of social life. The work of the defense counsel involves, among other things, timely monitoring of the information related to the client and the case in general covered by open source media. The medias influence is primarily about the fact that disseminated information which, by the way, is not always fact-based, can cause a judge to theoretically form a certain subjective conviction regarding a person, the circumstances of events, etc. Under such conditions, the task of the defense counsel is not only to form the position of the defense and to refute the version of the prosecution, but also to prove in court the absence of the connection between the media component and the facts of a particular case.

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