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- Serhii Lysenko
Managing Partner, Founder, GRACERS
Serhii Lysenko was awarded the prize Advocate of the Year 2020 in the White-Сollar Crime category and Advocate of the Year 2021 in the Advocate of the Year in Criminal Cases category according to the Ukrainian Bar Association
Corrupt Officials are to be Punished under Wartime Laws: Is it Possible to Compensate Damages Without Going to Jail?
With the start of Russia’s large-scale invasion, it may have seemed that corruption in Ukraine had disappeared because it was “not the right time”. There were no high-profile revelations, anti-corruption agencies mostly worked, like other law-enforcement agencies, on documenting and solving war crimes. But soon after the de-occupation of Kyiv, Chernihiv and Sumy Regions, it turned out that in fact, new corruption schemes were added to old ones, and those who used to earn money by having access to public resources did not disappear.
Reacting to this, MPs proposed two radically different approaches to the fight against corruption in wartime. While the first draft law provides for toughening up punishment – up to life imprisonment, the second draft law proposes to replenish the budget at the expense of corrupt officials, and to release them from jail in return.
How the Schemes have Changed
A reminder that the fight against corruption is one of the pieces of “homework” that Ukraine needs to do if we really want to become a full member of the European Union. But it is obvious that not everyone is paying attention to this. One of the most widespread schemes, which is constantly reported in the media, is the movement of men of military age across the border for bribes.
But it is not the only one among the schemes that are related primarily to border crossing. For example, the National Agency for the Prevention of Corruption has the identification of corruption risks as being among its functions. And when they studied this topic, they said publicly that they had identified seven such risks.
One of them is abuse around the “Shlyakh” system. Some companies that have a license for the right carry out international transportation of passengers in the status of a driver sell the right to be entered into the system as a driver. The study showed that such persons are registered as drivers often do not even have a driver’s license.
Another profitable “business” for some relates to the contact line. A good example is a large-scale corruption scheme for crossing the contact line, which was exposed in Zaporizhzhia Region by employees of several law-enforcement agencies in cooperation with the Vice Prime Minister – Minister for Reintegration of the Temporarily Occupied Territories of Ukraine Iryna Vereshchuk. According to law-enforcement officers, the participants of the meeting included some representatives of Zaporizhzhia Regional State Administration, city council and law-enforcement agencies.
The procedure for crossing the contact line by citizens of Ukraine was approved in May of this year by the decision of the Defense Council of Zaporizhzhia Region. According to this procedure, Ukrainians must submit relevant applications, which are considered by authorized persons, and only then are lists of those who are allowed to cross compiled on the basis of these applications. But this consideration was artificially delayed for a long time by certain persons. Therefore, people paid bribes, the amount of which depended on the means of transportation involved and the speed of consideration. In particular, the illegal benefit from one car could reach up to USD 800. And the money was received by specially involved intermediaries.
The exposure of officials in Zaporizhzhia who, according to law-enforcement officers, embezzled many tons of humanitarian aid that came to the region, caused no less resonance in society. It’s important to see what will be the results of the investigation of this case. After all, such scandals are watched not only by Ukrainians, but also by our international partners who want to know how the aid they provide to Ukraine is being used.
It is clear that such actions of officials of different levels and law-enforcement officers cause a rather sharp reaction in society, people compare corrupt officials with looters, demanding stricter punishment for them. At the same time, the Ukrainian Parliament also started talking about toughening up punishment.
Why Corrupt Officials Should Pay
In particular, draft law No. 7348, which was registered in the Ukrainian Parliament, refers to stepping up responsibility for corrupt actions committed in wartime. Thus, its author, MP Oleh Dunda (Servant of the People faction), proposes to equate corruption actions committed by officials with high treason under the provisions of this document during martial law.
And the acquisition of assets by a person authorized to perform the functions of the state or local self-government, the value of which exceeds his or her legitimate income by more than 6,500 tax-free minimum incomes (110,500 hryvnias), shall be considered treason.
According to the bill, the acquisition of such assets entails imprisonment for up to 15 years or life imprisonment with confiscation of property and a ban on holding certain positions or engaging in certain activities.
Moreover, the author of the bill proposes to extend this provision not only for the period of martial law, but also for another year after its termination or cancellation.
The draft law states that such assets should be understood as cash, bank accounts, other property, property rights, intangible assets, particularly cryptocurrencies, the amount of reduction of financial obligations, as well as works or services provided to this person.
It is hard to disagree with the author of the document, who in the explanatory note points out that “the only option to prevent the ‘cutting’ of international aid during the war and after our victory is to strike a preventive blow, equating corruption during the war with cooperation with the enemy”. But let’s look at the situation from the other side. Under what conditions can it work? The most important thing is to have independent law-enforcement agencies and courts. That is, we must be sure that there will be no fabricated proceedings or fight against “inconvenient” people for the authorities.
In addition, it is worth calculating how much it will cost the state, whose budget today is partially formed at the expense of international assistance, to keep corrupt officials in prison for life. The draft law does not provide financial and economic justification, so it is impossible to say what its impact on the revenue and expenditure sides of the state budget will be. Unless, purely theoretically, we can assume that the state will receive additional revenues in the event of confiscation of the property of such corrupt officials. But we can only guess how long it will take to deliver verdicts in such cases and how long it will take to sell confiscated property.
In addition, if you look at the experience of China, where they have the strictest anti-corruption legislation and where bribes are punishable by imprisonment, and officials with particularly “sticky” hands face the death penalty, punitive methods alone do not solve the problem. We can, of course, borrow from them the idea in the program of weaning officials off bribes and to take them to prisons to see with their own eyes the conditions in which bribe-takers are kept, but it is necessary to engage in such re-education of high-ranking officials not when the country is facing an enemy in wartime.
Will the Indulgence for Corrupt Officials Work?
Therefore, the mechanism of compensation for losses provided for in draft law No. 7333 seems to be more effective now. This document proposes to supplement Article 45 of the Criminal Code on effective repentance and to release a person from criminal liability if he or she pays compensation in full for damages caused before the verdict is passed during martial law. At the same time, the authors – MPs of two factions, the ruling “Servant of the People” and the opposition “European Solidarity” – stipulated in the document that this provision will only be valid if a person is brought to justice for the first time.
Among the arguments they cite in favor of this legislative initiative is the NABU report for the second half of 2021, according to which the amount of losses caused by crimes of corruption is UAH 98.58 billion, while only UAH 3.8 billion has been reimbursed. That is, the voluntary desire to pay – in fact, not to end up behind bars – can potentially increase the performance of law- enforcement officers in this field.
But will this be sufficient motivation not to commit crimes of corruption? Especially since the proposed rule on effective repentance concerns the following four articles: misappropriation, embezzlement or seizure of property by abuse of office (Article 191); legalization (laundering) of the proceeds of crime (Article 209); abuse of power or official position (Article 364); negligence by officials (Article 367). Thus, the legislator allows not only people who have committed a criminal offense, but also those who have committed serious crimes, to avoid criminal liability.
And now let’s imagine the following situation. A top official, abusing his/her position as an official, embezzles budget funds or international aid allocated for restoring housing destroyed during the war, and buys property, which he registers in the name of third parties. How effective will his/her repentance be? It is hardly worth talking about morality in this case, but if he/she returns the stolen property in full, it will definitely be better than just sitting in jail without paying a penny or only part of it. And if he also returns everything legalized, the state budget will have many times more money from such cases than the revenues from the tax amnesty.
But large-scale corruption schemes usually involve a group of people. Therefore, if we resort to such a step as giving corrupt officials exemption from criminal liability, we should provide for the conditions that will force them to surrender their accomplices. Then the state treasury will receive even more money.
In addition, there is also the question as to how much will he really lose by compensating for the losses? And will not the process of determining the amount of damage be the subject of some bargaining by law-enforcement officers and experts? Especially in high-profile cases where the amount of losses reaches hundreds of millions of hryvnias. Otherwise, this draft law, designed to reduce corruption risks will have the opposite effect of increasing them.
Of course, public activists and lawyers who emphasize that such a draft law does, to some extent, break the logic of the approach to combating corruption, are right. Since the norms of the current Criminal Code, which make it impossible to release corrupt officials from criminal liability in the event of effective repentance, as well as in connection with the reconciliation of the perpetrator with the victim, were prescribed in such a way due to the need to step up the fight against corruption offenses, which pose one of the most serious threats to the national security of Ukraine and cause particularly great harm to the rights, freedoms and interests of citizens, state or public interests or the interests of individual legal entities. Therefore, before voting for such a document, MPs should think long and hard about what the indulgence that they want to grant to corrupt officials will actually mean for the country.