Constitutional Court of Ukraine strikes down law criminalizing illicit enrichment

14/ 03/ 2019

Olga Vorozhbyt, Partner, Head of Litigation & Regulatory DLA Piper in Ukraine Oleksii Gerasymchuk, Associate DLA Piper in Ukraine On 26 February 2019, the Constitutional Court of Ukraine held Article 368-2 of the Criminal Code to be inconsistent with the Constitution of Ukraine. The article in question criminalized illicit enrichment and made it punishable by imprisonment and removal of the right to perform certain functions related to the exercise of public service if found guilty. According to the provisions that have been struck down, public officials of any level were obligated to provide explanation and evidence of the origin of any obtained “assets of significant value,” defined as “money or any other property, as well as benefits obtained from their use,” in excess of UAH 960,500 (equivalent of USD 36,400) as of 2019. Should a public official fail to prove the legal origin of his or her assets or income, such an official would be subject to prosecution. The Constitutional Court of Ukraine held that such provisions of the Criminal Code were “unconstitutional” and contradicted the principle of presumption of innocence, as in criminal proceedings it is for the prosecution to prove that a person is guilty. The immediate consequences of the Constitutional Court’s decision is that Article 368-2 of the Criminal Code becomes ineffective. Criminal proceedings initiated so far in Ukraine in cases of illicit enrichment may now have to be dismissed, with ongoing investigations terminated. Article 368-2 was added to the Criminal Code as part of the anti-corruption reform in Ukraine, which is why it being struck down has raised so many concerns. At the same time, two days after the Constitutional Court’s controversial decision, President Poroshenko proposed new wording of article in order to prevent any possibility of illicit enrichment by public officials. According to the newly proposed article, public officials no longer have the obligation to prove the legal origin of their assets, so the burden of proof shifts to law enforcement agencies. At the same time, public officials will not be liable under this article if the assets of significant value were obtained through malfeasance (misuse of authority). Liability for malfeasance is regulated by another provision of the Criminal Code. However, should the Ukrainian Parliament adopt the proposed article, it will not have a retroactive effect, meaning that past acts of illicit enrichment will go unpunished. The draft law is now under review by Parliament’s committees. If the committees submit no further comments, Parliament is likely to consider the law proposed by the President during the upcoming plenary session set for 12-15 March 2019.


Olga Vorozhbyt, Partner, Head of Litigation & Regulatory DLA Piper in Ukraine	Oleksii Gerasymchuk, Associate DLA Piper in Ukraine

On 26 February 2019, the Constitutional Court of Ukraine held Article 368-2 of the Criminal Code to be inconsistent with the Constitution of Ukraine. The article in question criminalized illicit enrichment and made it punishable by imprisonment and removal of the right to perform certain functions related to the exercise of public service if found guilty.

According to the provisions that have been struck down, public officials of any level were obligated to provide explanation and evidence of the origin of any obtained “assets of significant value,” defined as “money or any other property, as well as benefits obtained from their use,” in excess of UAH 960,500 (equivalent of USD 36,400) as of 2019. Should a public official fail to prove the legal origin of his or her assets or income, such an official would be subject to prosecution.

The Constitutional Court of Ukraine held that such provisions of the Criminal Code were “unconstitutional” and contradicted the principle of presumption of innocence, as in criminal proceedings it is for the prosecution to prove that a person is guilty.

The immediate consequences of the Constitutional Court’s decision is that Article 368-2 of the Criminal Code becomes ineffective. Criminal proceedings initiated so far in Ukraine in cases of illicit enrichment may now have to be dismissed, with ongoing investigations terminated. Article 368-2 was added to the Criminal Code as part of the anti-corruption reform in Ukraine, which is why it being struck down has raised so many concerns.

At the same time, two days after the Constitutional Court’s controversial decision, President Poroshenko proposed new wording of article in order to prevent any possibility of illicit enrichment by public officials.

According to the newly proposed article, public officials no longer have the obligation to prove the legal origin of their assets, so the burden of proof shifts to law enforcement agencies. At the same time, public officials will not be liable under this article if the assets of significant value were obtained through malfeasance (misuse of authority). Liability for malfeasance is regulated by another provision of the Criminal Code.

However, should the Ukrainian Parliament adopt the proposed article, it will not have a retroactive effect, meaning that past acts of illicit enrichment will go unpunished.

The draft law is now under review by Parliament’s committees. If the committees submit no further comments, Parliament is likely to consider the law proposed by the President during the upcoming plenary session set for 12-15 March 2019.