Anti-corruption practice in Ukraine: Legal aspects of recovering unjustified assets

In Ukraine, the fight against corruption and illicit assets remains one of the main tasks of state bodies, particularly in the context of ensuring transparency and increasing trust in state institutions. One of the main tools for combating corruption is the mechanism for confiscating unjustified assets. This allows persons authorized to perform state functions, as well as their relatives and associates, to be deprived of illegally acquired property that cannot be justified by legitimate income.

1. Legal basis for the recovery of unjustified assets

The procedure for recovering unjustified assets in Ukraine is based on the Civil Procedure Code of Ukraine (CPC of Ukraine), the Civil Code of Ukraine, and special legislation, in particular the Law of Ukraine “On Prevention of Corruption.” Here are the key legal aspects of this practice:

• Article 290 of the Code of Civil Procedure of Ukraine provides for the possibility of confiscating property acquired by a person authorized to perform state functions but which cannot be justified by their legal income. This applies to property acquired as a result of corrupt transactions, illegal financing schemes, or other unlawful actions.
• Unjustified assets are defined as property belonging to a person authorized to perform state functions or their relatives, which cannot be explained by the lawful income of that person. The definition of “unjustified assets” implies that the authorities have sufficient grounds to investigate the sources of property that clearly exceeds the possible income of an official or their family.
  

2. Recovery of unjustified assets: principles and grounds

In order to recognize assets as unjustified, it is necessary to conduct a thorough analysis and prove that the property cannot be acquired through the person’s legal income. The basic principles of recovering unjustified assets are as follows:

• Presumption of legitimacy: According to the Civil Code of Ukraine (Article 328), the acquisition of ownership rights to property is considered legitimate until proven otherwise. The burden of proving that the property was acquired illegally lies with the plaintiff—the prosecutor’s office or anti-corruption authorities, which must provide relevant evidence.
• Civil forfeiture: The recovery of assets through civil forfeiture allows authorities to seize property without initiating criminal proceedings. Importantly, this process is not criminal in nature and does not violate the presumption of innocence.
• Recovery mechanism: Once the assets have been declared unjustified by the court, the property may be recovered as state revenue. This may be a specific piece of real estate or a car, or cash that cannot be explained as the person’s legitimate income.

3. Specifics of procedural stages

The initial stage involves monitoring the lifestyle of individuals holding public office and analyzing their income declarations. If it is found that significant assets have been acquired that cannot be justified by income, the prosecutor’s office files a lawsuit. Important aspects of this process include:

• Proof of income: A key step is to prove that the person’s income is insufficient to acquire the assets. If this cannot be proven, the assets may be deemed unjustifiable. Financial documents, bank statements, declarations, and other materials are used for this purpose.
• Seizure of assets: During the proceedings, assets may be seized to ensure that they can be recovered in the event of a positive court decision.

4. Identification of unjustified assets in judicial practice

Legal practice shows that courts widely use this tool, confirming its effectiveness. For example, in cases where large sums of money or real estate were seized, courts are guided by the following principles:

• Balance of evidence: The court must evaluate all evidence provided, in particular proving the connection between the acquired assets and the official or their relatives. It is important to note that the presence of certain amounts in accounts, their enormous volume without confirmed sources of income, may be grounds for recognizing the assets as unjustified.
• Use of evidence: The entire range of evidence is taken into account, including real estate transactions, bank transactions, income declarations, and third-party testimony, if they confirm the illegality of the acquisition of assets.

5. Importance for legal entities

Legal entities, particularly those engaged in human rights activities, should be aware of these issues, as they directly affect not only public officials but also businesspeople who have ties to government officials. The recognition of assets as unjustified may also apply to companies if their owners or managers use illegal schemes to acquire property.

The mechanism for recovering unjustified assets is an important tool in the fight against corruption in Ukraine. Thanks to this mechanism, the state can deprive corrupt officials of their illegally acquired property, which significantly improves the country’s financial situation and contributes to increased trust in law enforcement agencies. It is important for law firms and human rights defenders to be aware of this tool, as it covers not only public figures but also possible links between business and corruption schemes.