Old Habits Die Hard: Reality of White-Collar and Economic Crime Investigations in Ukraine

Last year we analyzed investigations in the defense sector in the Ukrainian Law Firms. Handbook for Foreign Clients. Since then, despite expectations, there have been no systemic changes in the approaches taken by law-enforcement agencies.

This time, I suggest focusing on investigations in the area of white-collar and economic crime where, based on our clients’ practical experience, legal uncertainty continues to dominate—at times reaching the level of outright absurdity, and occasionally involving abuses by certain representatives of investigative authorities (particularly with regard to jurisdiction).

These phenomena have a direct economic impact: they foster mistrust in the law-enforcement and judicial systems, deter investment, increase risks for entrepreneurs, and ultimately slow Ukraine’s economic recovery. It’s hardly a revelation to point out that, at a time when the economy is suffering daily from Russia’s armed aggression, such internal problems only deepen the crisis.

Why is this happening? Personally, I identify three key reasons, the elimination of which could potentially change the situation.

As always—based solely on real cases.

Reason 1: Absence of Clear Hierarchy Within Law- Enforcement Agencies

For more than six months now, Ukraine has been without a Prosecutor-General. The previous one was dismissed on 31 October  2024, and since then, the position has been held by an acting official. This has resulted in several serious problems for the country.

The first is a gap in international relations. In dealings with international institutions, it is the Prosecutor-General who officially represents the Prosecutor-General’s Office. Amid Russia’s ongoing aggression, such cooperation is crucial—for international searches, the prosecution of war criminals, and laying the groundwork for an international tribunal.

The second issue is that the absence of a Prosecutor-General hinders investigations involving high-ranking Ukrainian officials. Certain categories of individuals—such as Members of Parliament, judges, the heads of the Specialized Anti-Corruption Prosecutor’s Office, and the National Anti-Corruption Bureau (NABU)—can only be formally served with suspicion notices by the Prosecutor-General or his/her deputy.

In addition, the lack of a clear chain of command—effectively, a lack of leadership—at the top often leads to chaos at the lower levels of the prosecutorial system: regional and local prosecutors’ offices. This, in turn, puts pressure on the entire law-enforcement system. As a result, violations of the Criminal Procedure Code’s rules on investigative jurisdiction are frequent and have a significant effect on the conduct of investigations.

It is not uncommon for a law-enforcement agency to investigate a case that legally falls outside its jurisdiction.

In our practice, we have encountered cases where we filed criminal complaints on behalf of clients involving individuals whose actions clearly fell under the jurisdiction of the State Bureau of Investigations (SBI)—as in one case involving a well-known bank whose license, in our view, was unlawfully revoked by the regulator. Understanding that a thorough and objective investigation could reveal the involvement of high-ranking officials, the SBI effectively “washed its hands” of the matter. Law-enforcement agencies resorted to procedural manipulation by reassigning the jurisdiction and transferring the case to a district police department—an authority already under critical staffing and resource strain, especially in wartime, when many officers are engaged in defending the nation.

As a result, the investigation moved at a glacial pace. When it was time to make key procedural decisions, the leadership of the local prosecutor’s office refused to approve further actions, citing a lack of competence. This creates a vicious circle: the agency responsible for the investigation passes the case to another, which in turn refuses to take responsibility.

Reason 2: Winning a Tender—Now a Criminal Risk and a Reputation Trap

Another major issue we often encounter in practice is the pressure, chaos, and excessive fragmentation of investigations involving companies that work with public funds.

Here’s a concrete example. One of our clients is a manufacturer of specialized equipment for the State Emergency Service and other first responders. Their machinery is actively used across Ukraine to mitigate the aftermath of Russian missile strikes. The company won a series of public tenders via Prozorro and signed contracts to supply around 20 units of equipment to various regions. However, after a change in leadership at the regulatory authority overseeing this sector, law-enforcement responded to our client’s successful bids with aggressive and highly fragmented actions.

Instead of conducting a centralized investigation, authorities opened around 20 separate criminal proceedings—one in each region where the equipment had been delivered. Each case involved identical allegations, identical expert assessments of the product’s value, and the same questions about potential damage to the state. In some regions, investigations have concluded: expert reports confirmed no damages, and the cases were closed. But in other regions, investigators took a different path—launching searches, interrogations, temporary access orders, and securing court rulings stating that “officials of the regulatory body acted with the intent of receiving unlawful benefit from our client.”

Even without any formal suspicion notices, such language in the Unified State Register of Court Decisions causes serious reputational harm to a business. The end result: a company that openly won a public tender, fulfilled its contractual obligations, and delivered life-saving equipment—ends up coming under attack.

In our case, the very idea of a “conspiracy” among regional buyers borders on absurdity. Is it realistic to suggest that dozens of regional-level agencies simultaneously coordinated their actions to purchase from a single supplier? The procedure was competitive—none of the participants contested the results.

In my view, the law-enforcement resources poured into this campaign could have been put to far better use investigating real threats. Instead, certain officials are manufacturing artificial cases, duplicating them across jurisdictions, and using them to apply reputational pressure on business.

Reason 3: Criminal Investigations as a Tool of Political or Business Pressure

A widespread and increasingly dangerous trend is the use of law-enforcement as a weapon in political or business conflicts.

These are cases where criminal proceedings are initiated not because of actual crimes, but to eliminate a competitor, force someone out of a market, or shift spheres of influence. Such proceedings often involve disproportionate—and at times outright illegal—methods: wiretapping, surveillance, covert collection of business and even personal data.

While some of these actions may technically fall under the definition of “covert investigative activities,” their real purpose is often not crime-solving, but the gathering of kompromat—damaging, and sometimes intimate, (potentially comprising) information. These materials are later laundered through media leaks and anonymous Telegram channels. Just a few of these orchestrated “media drops” can destroy a business or a career—long before a court ever sees the case.

Unfortunately, we’ve seen such tactics used against our clients. One example involves an infrastructure company that, before the full-scale invasion, was a key regional player. After the de-occupation of Kherson and Kharkiv Regions, the company actively contributed to restoring critical infrastructure. But over time, its presence on the market became “inconvenient” for certain actors. As a result, artificial obstacles began to emerge: audits, contracts were blocked, pressure put on business partners. Surveillance and wiretaps followed. Ultimately, the company nearly lost its market position.

How Can the Situation Be Changed?

In my firm belief, the process should start with strict adherence to the Criminal Procedure Code—not just its letter, but also its spirit. If an investigator acts outside his her defined jurisdiction, this is not a technical error; it is a potential source for manipulation.

Here, quality judicial oversight is critical: when a judge notices a violation, they must respond to it. Because evidence gathered in violation of jurisdictional rules is inadmissible and should not be included in case files.

The law-enforcement vertical must operate under unified rules. If one entity is allowed to violate the law, others will start doing the same. This leads to systemic abuse of power.

Responsibility also lies with the defense. And here’s the positive thing: the legal system is evolving, and it’s evolving for the better. For instance, cases in the High Anti-Corruption Court are being heard quite swiftly, despite their volume and complexity. This creates new standards and forces lawyers to work differently—strategically, professionally, and constructively.

Clients are changing as well. They no longer expect grand speeches or media noise; they demand swift, quality work and a flexible strategy that adapts itself to the situation. Methods that worked five years ago, such as “creating a spectacle,” no longer produce the desired results. And that’s a good sign: expectations are rising, and so is the quality.