You Can Now Get Rich Illegally in Ukraine. What Does This Mean?
3 March, 2019

As of now, civil servants in Ukraine can earn a few hundred thousand hryvnias a year, but still lead a millionaire’s lifestyle. And get away with it.

Previously, these inconsistencies would have caught the attention of the Ukraine’s National Anti-corruption Bureau (NABU) and illegal enrichment cases would have opened. But, on February 26, the Constitutional Court ruled that corresponding legislature (Article 368-2 of the Criminal Code of Ukraine) was unconstitutional, and therefore null and void.

The Ukrainian Constitutional Court in session, Kyiv, September 24, 2018. Photo: Vyacheslav Ratynskiy/UNIAN

A a direct consequence of this decision, 65 cases against MPs, judges, prosecutors and other officials, who were all suspected of illegal enrichment to the combined amount of almost $19 million, have been closed.

Hromadske takes a look at who is likely to get the most out of this decision, how Europe has reacted and whether anything can be done to prevent impunity for Ukraine’s high-rolling officials.

What happened?

Back in December 2017, 59 MPs appealed to the Constitutional Court to review the issue of whether article 368-2 of the Criminal Code violates Article 9 of the country’s constitution. When it came to the vote over a year later, 14 of the 18 judges supported the request, stating that the article was not clearly formulated, which allowed for its ambiguous interpretation, and that it was also inconsistent with the principle of presumed innocence.

According to MP Mustafa Nayyem, three of the four judges that voted against the legislation’s annulment were appointed to the Constitutional Court as part of Petro Poroshenko’s presidential quota.

One of the dissenting judges, Serhiy Holovatiy, took it one step further and published a statement, in which he explains in detail why he disagrees with his colleagues. He believes that Article 368-2 provides a clear interpretation of criminal liability when it comes to illegal enrichment. What’s more, he says that it does not violate the principle of presumed innocence because people suspected of illegal enrichment are not obligated to prove the legality of their income sources. Instead, it is the prosecution’s task to prove guilt.  

His colleague Viktor Kolisnyk, who also voted against, actually agrees with the majority of the Constitutional Court judges in that the article is extremely poorly written. However, he is convinced that the court could have postponed the termination date of the illegal enrichment legislation, which would have given the parliament time to clarify the legislative wording.

The head of the Constitutional Court Stanislav Shevchuk has also commented on the decision.

“Unfortunately, I had to admit that this edit of the norm is unconstitutional and unsuitable for the application and achievement of its aim,” Shevchuk wrote on Facebook, noting that the U.S. had also refused criminalize illegal enrichment for the same reasons regarding the presumption of innocence.

Shevchuk further stressed that the court “does not align itself with the political situation, does not carry out orders, but fulfils its primary constitutional function.”

“The only thing above us is the Constitution,” he added.

Case closures

NABU chief Artem Sytnyk believes the decision to remove the illegal enrichment legislation is a step backwards in Ukraine’s anti-corruption efforts.

“The Constitutional Court’s decision means that all investigations conducted under this article are now meaningless because all the cases must be closed… All the illegally acquired wealth, all the wealth which cannot be legally explained, is now legal,” a statement from NABU chief Artem Sytnyk reads.

NABU detectives are investigating the circumstances surrounding 65 cases of illegal enrichment. The combined sum of these cases is around $19 million. Some of these cases had already reached the court.

One such case is that of military prosecutor Kostiantyn Kulyk, who, together with his wife, spent around $171,000 over the course of nine months in 2015, despite only having an annual  income of around $42,000. The case is now being heard in Kyiv’s Holosiyivsky district court.

Similarly, the Specialized Anti-corruption Court is also hearing the case of Infrastructure Minister Volodymyr Omelyan. According to NABU, he bought a new BMW car for almost $19,000 and received $90,000 and 25,000 euros in cash in 2015. The preliminary hearing is scheduled for April 3.

Military prosecutor Konstiantyn Kulyk (center) is suspected of illegal enrichment worth around $104,000. He is facing up to five years’ imprisonment. Kulyk during a hearing on his case, Kyiv, July 4, 2016.  Photo: Vyacheslav Ratynskiy/UNIAN

Other suspects in illegal enrichment cases include Andriy Lozoviy, aide to Radical Party leader Oleg Lyashko, who only earned around $24,000 in 2014, but that figure rose sevenfold by the following year; and deputy security service chief Pavlo Demchyna, who is suspected of illegal enrichment amounting to almost $150,000.

Europe’s reaction

European Commission Vice President Valdis Dombrovskis, who was in Kyiv for a working visit when the news broke, expressed his concerns over the annulment of the illegal enrichment legislation during an interview with Ukrainian television channel UA:Pershiy.

“The principle of presumption of law, when it comes to proving the sources of income or other assets is an internationally common principle. It is very difficult to transfer the burden of evidence to the investigation. Therefore, if someone has major assets, then they have to be prepared to prove where they came from,” Dombrovskis commented.

He also expressed concerns over the impact on the country’s fight against corruption. He believes that a new law would help resolve the issue because “it’s difficult to fight corruption is it’s impossible to fight illegal enrichment.”

The EU’s European External Action Service were also quick to remind Ukraine that the country’s anti-corruption progress has been a cornerstone of its cooperation with the Union since 2014. The 2015 law ensuring criminal liability for illegal enrichment was one of the conditions for receiving aid with both the EU and the IMF.

Then, in 2016, Ukraine introduced obligatory e-declarations for officials and civil servants in order to secure visa-free travel with the EU.

The Ukrainian Foreign Ministry issued a statement assuring Ukrainians that they will not be punished for the decision of the Constitutional Court.

What’s next?

Ukraine’s politicians reacted instantly to the Constitutional Court’s decision. Batkivshchyna party leader and presidential candidate Yulia Tymoshenko was the first to register a draft bill on illegal enrichment on February 28.

Incumbent President Poroshenko also announced that he was registering his draft bill as a matter of urgency during a speech at the Kirovohrad Regional Development Council on February 28. The urgent status of the presidential bill means it can only be considered under reduced procedure.

However, this is going to be difficult to achieve before the March 31 presidential elections as there are only two session weeks lefts between now and them. What’s more the parliament is set to consider the language law, which has already been through over 2,000 amendments.

That being said, in the short time before the elections, both Tymoshenko and Poroshenko are likely to do everything in their power to prove that they are real anti-corruption fighters.