11 April 2017, by Tetiana Shevchuk, Anti-corruption Action Centre.

Three years ago the ousted President of Ukraine, Viktor Yanukovych, and his close associates (so called the “Family”) fled the country. Given that they are under investigation for embezzlement and misuse of public funds, the public had high expectations that any money stolen by them would soon return to Ukraine. The new government promised to obtain the return of any stolen funds as soon as possible and even established a special fund in the budget for recovered proceeds of corruption. These high expectations were supported by the international community with the introduction of personal sanctions against the former Ukrainian leadership by the EU, Canada and Switzerland.

Asset recovery hopes fade

In the intervening years since 2014, the hopes and illusions for immediate reform and effective investigations of corruption faded. Yanukovych has gone, but the same system of governance remains in place.

The reform of the General Prosecutor’s Office failed and the Office remained politically dependent, opaque and ineffective. The reform of the judiciary was delayed until the end of 2016, and even now the results of purifying the system from corrupt judges (if any) will not be realised for another five years until the process is complete. Since the old law enforcement and judicial system has largely been retained, there is an absence of prompt and effective investigation of the criminal cases relating to Yanukovych and his associates. None of the investigations of corruption has yet led to a conviction. The evidence is being lost; the investigations are stuck with procedural protractions or frozen due to the absence of suspects. Thus, the court verdicts are either delayed for years or may not happen at all.

Due to the absence of effective investigations, EU sanctions were gradually lifted from seven of the 22 former officials, and their assets primarily blocked in the EU were released from seizure. For instance, due to the absence of a proper investigation, the EU had to lift sanctions from close Yanukovych ally Yuriy Ivaniushchenko; although there were credible and convincing reports of his involvement in the appropriation of millions. Now he can freely use his assets abroad.

The special budgetary fund for the recovered proceeds of corruption, which expected to receive millions, totalled only 265,071 UAH (approx. 9,000 euro) in 2015-2016, which was mostly sourced from the prosecution of minor corruption offences. The chances of getting any money stolen by Yanukovych either from abroad or domestically are disappearing as the General Prosecutor’s Office has lost precious time.

A silver lining

At least there is a silver lining. In recent years, Ukraine has managed to establish a parallel system of independent law enforcement and asset recovery bodies aimed at tackling top-level political corruption. The National Anti-corruption Bureau and Specialised Anti-corruption Prosecution, while not investigating Yanukovych’s crimes, are focusing on the misconduct of acting officials. They will become fully functional once a specialised system of anti-corruption courts is established.

Currently, in different cases the new bodies have already seized assets valued at approximately US$200 million, which have the potential to be recovered once the independent anti-corruption courts are fully in place. In order to facilitate the work, a new agency in the sphere of asset recovery was created, the National Asset Recovery and Management Agency. It is tasked with tracing illicit assets, proper management of seized and confiscated assets and supporting recovery of stolen assets from abroad.

So while Ukraine may never repatriate the assets of its fugitive former president, there is still a chance of prosecuting acting kleptocrats and returning their illicit funds to the people of Ukraine.

About the author

Tetiana Shevchuk is an expert in the field of corporate and financial law. Currently she works on asset recovery and anti-money laundering initiatives. Prior to her engagement with the Anti-corruption Action Centre she worked for leading multinational professional services companies.