• Artem Drozdov

    Partner, AVER LEX


Address: 2  Khrestovyi Alley, 5th Floor, Kyiv, 01010, Ukraine

Tel.: +380 44 300 1151

Fax: +380 44 300 1153

E-mail: info@averlex.com

Web-site: www.averlex.com

AVER LEX is the leading WCC boutique law firm in Ukraine, focused on high-profile economic crimes and politically-motiva­ted prosecutions, cases regarding defence of corporate executives in criminal proceedings and corporate security matters. The firm stands out for its mature highly specialized team, and commands unrivalled capacities for being a preferred criminal defense counsel in particular compound and complex WCC litigations in Ukraine.

The majority of cases are unique and first-hearing cases that set precedents for the criminal judiciary system in Ukraine and established practice for future hearings. These cases are highly public; require massive, regular and open communication with the entire spectrum of media outlets in Ukraine. The client portfolio includes state officials and high net worth individuals looking for protection from politically-motivated prosecutions, consulting and law firms, big corporate clients from a range of economic sectors.


Complex legal decisions

The firm advises on all aspects of criminal law, providing both the traditional services of legal prosecution and defence, and the new requirements of preventive criminal law and corporate compliance. Expertise encompasses:

— White-Collar Crime;

— Corporate Criminal Law;

— Corruption and Bribery;

— Tax Fraud and Evasion;

— International Criminal Law;

— Extradition;

— Business Crime, Fraud;

— Risk Assessment;

— Criminal Due Diligence, etc.

AVER LEX provides for complex legal decisions in corporate security aimed at identifying and minimizing criminal risks in business; defence of legal rights of detained and convicted persons during a provisional arrest; measures to release from custody; comprehensive legal defence during operational search activities and pre-trial investigations by the law-enforcement bodies; successful advocating in court hearings within a criminal proceeding; legal aid to complainants; recovery of damages ­judgments.

International level

AVER LEX was recognized as:

— Chambers Europe 2017-2019: the sole leader (Band 1) in ‘Dispute resolution:
White-collar crime’;

— Best Lawyers 2019: Law Firm of the Year in Criminal Defense;

— Legal Awards 2018, 2016: Law Firm of the Year in Criminal Law;

— Who is Who Legal 2016-2018: listed among the top firms in Business Crime, etc.

To ensure the rights of our clients and to prevent them being violated, the Firm has developed a strong best friends’ network of firms throughout the world (UK, Portugal, Switzerland, Netherlands, Belarus, Russia, Armenia), and is well equipped to handle cases with cross-jurisdictional elements. Also, the Firm cooperates with a number of leading worldwide and local human right organizations within the framework of ongoing matters. These include Amnesty International in Ukraine, Transparency International Ukraine, Ukrainian Helsinki Human Rights Union, Ukrainian Human Rights Union, Amnesty International European Institutions Office, etc.

Business Crime in Ukraine

Ongoing dialog took place in Ukraine last year between the authorities and business with the involvement of top government officials on the topic of a ‘healthy’ business environment. There are a number of reasons behind the need for such dialog. For example, in terms of perception of the national business environment by foreign investors, the latter point to a lack of confidence in the judiciary (7.7 points out of 10), cumbersome and quickly changing legislation (5 out of 10), oppressive law-enforcement agencies (4.8 out of 10) and complicated tax administration (4.6 out of 10), etc., among the biggest obstacles for business (based on the results of the Annual Foreign Investor Survey on obstacles and barriers that prevent capital investment in Ukraine, conducted by Dragon Capital, the European Business Association (EBA) and the Centre for Economic Strategy (CES) in 2018).

In addition, in terms of pressure from law-enforcement agencies, as of 2018, there were 2,159 registered criminal proceedings on the abuse of power or authority by a representative of a law-enforcement agency (Article 365 of the Criminal Code of Ukraine). At the same time, only in 34 cases (1.6%) was a notice of suspicion issued to representatives of law-enforcement agencies; of them in 24 cases was an indictment transferred to court (Unified Report on Criminal Offenses in the Country of the PGO in 2018). In the remaining 98.4% of cases, the investigation was either not even started or is being carried out slowly. The aforementioned data indicates that the business sector is still waiting for positive change.

Noteworthy, during last year, lob­bying of business protection has streng­thened in Parliament. The so-called Masks-show Stop No. 1 and Masks-show Stop No. 2 laws, aimed at protec­ting business against direct interference by law-enforcement agencies in its operations, were adopted. The draft Masks-show Stop No. 3 is now being actively discussed.

Existing laws prescribe requirements for video recording of the granting of a search warrant, the obligation of investigators to allow access to a lawyer for the person whose property is being searched in investigating activities, limitation of the possibility to confiscate the original co­pies of documents relating to the business’s activity, change in the procedure of consideration of claims against an investigation and raise responsibility of investigator for inflicting damage with approved illegal decisions, preventing attempts of groundless extension of the terms of pre-trial investigation, initiation of closing of a criminal case through a court in the event that the notice of suspicion has not been delivered within the determined terms or if a similar case is being investigated by another authority. Although a positive trend towards an increase of legislative instruments for protection of business provided for the lawyers can be observed and there are attempts by law-enforcement agencies to comply with the new norms, the inte­resting part of this reform of criminal law is that the majority of changes directed at protection against unlawful prosecution will only apply to cases opened after 15 March 2018.

With regard to the draft Masks-show Stop No. 3, changes related to the introduction of the obligation to provide the possibility for the owner to copy information in case of temporary seizure of devices seems quite realizable. This will minimize risks that the information the law-enforcement agencies gained access to will be changed. Copying means the possibility to duplicate data and documents to another carrier, required for the company’s seamless operation. However, it will be difficult to implement around 70% of the proposed changes. For example, the regulation on prohibition of confiscation of electronic digital devices in case information contained in them is an instrument, means or subject of a criminal offense, is more of a declarative nature, because the investigator or the prosecutor do not have special knowledge and often a priori do not have the possibility to establish the full scope of information being stored. Accordingly, the representatives of law-enforcement agencies confiscate the given device without obstruction, arguing that they cannot determine the scope of information subject to confiscation on site.

Another widespread risk is the process of division of property, which involves the use of all raiding schemes and law-enforcement agencies.

There have been cases of falsification of criminal proceedings under the pretense of the fight against receipt of unlawful benefit (bribery). There have also been facts of accusations against ‘very specific’ persons of taking/giving bribes solely based on the testimonies of two-three previously unknown persons who allegedly gave/took a ‘bribe’. Subsequently, during a detailed inspection, such persons turned out to be ‘agents’, whose permanent jobs involve writing corresponding statements and staging the transfer of a bribe.

Another method of manipulation involves recognition of property that was temporarily confiscated during a search as material evidence. On these grounds, an arrest may be imposed on the pro­perty without the real ascertainment of its evidential significance. At the same time, subsequently nobody receives a notice of suspicion, and the indictment is not sent to a court for consideration of the case.

The aforementioned violations become possible due to the absence of proper control over the actions of law-enforcement agencies and irreversible mechanisms of bringing individuals to personal responsibility, as envisaged by the Criminal Procedure Code of Ukraine.

By the way, at the end of 2018, the powers of the prosecutor’s office as the investigation authority were partially suspended, while its functions as a procedural support of the investigators and support of the prosecution in court, were preserved. A new investigation authority called the State Bureau of Investigations (SBI) was established in its place, which is involved in the majority of cases related to the actions of government officials. This is another instrument of protection for representatives of business. They can appeal to this authority in the event of actions of force by law-enforcement agencies with the purpose of receiving unlawful benefits. The powers of the SBI also includes considering offenses related to abuse of power or authority by representatives of law-enforcement agencies during a search. For example, if a search is being conducted at a company and the servers are confiscated despite the fact that the search warrant does not include permission for this, the employees and the lawyers of the company register such violations and can file a complaint to the SBI.

At the same time, the legislative initiatives on establishing the Financial Investigation Agency in place of the Tax Police are being widely discussed. The remit of the FIA will include the authority to investigate all offenses related to business, including taxation issues. However, establishment of new government agencies does not exclude the negative trend of different law-enforcement agencies opening several criminal proceedings on the same event with the aim of applying pressure on the entity, which is conditioned by the ‘creativity’ of these agencies in qualifying the unlawful actions.

Pressure on judges to pass ‘specific decisions’ also increased in 2018. The courts practically fully lost their independence due to initiation of criminal proce­edings against judges before and after they pass rulings, their re-certification, where the decisive factors are not impartiality or professionalism of the judges, but the so-called biased notion of ‘good faith’, as well as the process of liquidation/re-organization of district courts, which involves dismissal of judges from their positions with subsequent re-appointment to new, reformed courts.

In overall terms, criminal cases became much more complex, with a large number of persons involved, incriminating episodes, investigations held simultaneously in several regions. That is why systemic comprehensive defense of interests of business and citizens’ rights, carried out by a team of criminal justice lawyers, remains in high demand. At the same time, the 2019 election process remains an important factor in the formation of many trends, including protection of business. As practice of the last few years shows, under these circumstan­ces, the law-enforcement system may be used as an instrument of pressure on business with the aim of obtaining additional financing. It is due to this that defense of the violated rights of citizens who are participants of a criminal procedure ­using Ukrainian human rights institutions, as guaranteed by the state, becomes less effective. However, such systemic violations initiate the monito­ring of these processes by international human rights organizations and corresponding institutions of the EU and ot­her countries. By the way, international criminal practice will increase further as lawyers work closer with Interpol, send requests to law-enforcement agencies of other countries and involve more international human rights organizations and colleagues from other ­jurisdictions.