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Article of the Criminal Code on illegal enrichment was recognized unconstitutional by the Constitutional Court
1. CPLR expert opinion
On February 26, 2019, judges of the Constitutional Court adopted a decision on the unconstitutionality of Article 368-2 of the Criminal Code, which provided for criminal liability for illegal enrichment. According to the media, four judges voted against this decision, and individual opinions of two of them have already been made public.
The CPLR experts are convinced that even despite some drawbacks of the design of this article, there were no grounds to declare it unconstitutional. Such a conclusion was provided earlier upon request of the reporting judge of the Constitutional Court in a case under the constitutional petition of 59 people’s deputies of Ukraine on the compliance of Article 368-2 of the Criminal Code of Ukraine with the Constitution of Ukraine (constitutionality). Previously, experts involved by the EU Anticorruption Initiative in Ukraine expressed a similar position.
Decision of the Constitutional Court has led to the situation when 65 criminal proceedings of NABU and SAP concerning illegal enrichment are subject to closure. This number includes 4 cases under this article that were earlier submitted to the court. In accordance with Article 50 of the Law “On Prevention of Corruption”, the National Agency for Corruption Prevention carries out comprehensive inspections of the declarations of officials, which include, in particular, verification of the presence of signs of illegal enrichment, but after the adoption of the Constitutional Court’s decision, the Agency has virtually no definition of what is considered “illegal enrichment” and what criteria should be applied for the verification of declarations for this purpose.
2. Respective authorities counter-point/argument
The Constitutional Court’s decision states that the wording of Article 368-2 of the Criminal Code, which established criminal liability for illegal enrichment, contradicts the principle of presumption of innocence of a person, violates the right of a person to not testify against him-/herself, and the article itself, in the opinion of the judges of the Constitutional Court, does not correspond to the principle of legal certainty.
3. CPLR assessment of the authorities counter-point
The CPLR experts repeatedly denied all the aforementioned statements. Article 368-2 of the Criminal Code in its wording, which came into force in April 2015, has a very similar content to Article 20 of the UN Convention against Corruption, which states that intentional illegal enrichment, that is, a significant increase in assets of a public official, which exceeds his/her legal income and which can not be reasonably justified, is recognized as a crime. However, at the same time, the Verkhovna Rada deliberately formulated the Ukrainian version of the article of the Criminal Code in such a wording that this article would differ from the article of the Convention, in order to avoid imposing the burden of proof on the suspect or accused.
Constitutional Court’s arguments can easily be refuted. First of all, the violation of the presumption of innocence principle does not occur, since the recognition of the person’s guilt takes place only on the basis of the conviction of the court. Pre-trial investigation bodies and the prosecutor’s offices should ensure a thorough examination of the case circumstances, having checked all possible versions of the lawfulness of the grounds for acquiring assets by the official, and only if none of the versions has been proven, that would give rise to the criminal liability for the acquisition of significant amounts of assets , the legality of which sources of origin has not been confirmed.
Criminal investigation procedure, including illegal enrichment, is determined by the Criminal Procedure Code, which does not contain any special procedures for criminal proceedings against illegal enrichment, and therefore the burden of proof of the guilt of a person lies exclusively with an investigator and a prosecutor; a person has the right to remain silent and not to testify against him-/herself, but retains the right to provide appropriate and admissible evidence in his-/her defense. All doubts about the provability of the person’s guilt are interpreted in his-/her favor, and the guilt of a person must be proved by the prosecution party beyond the reasonable doubt.
4. Related legislation/instructions which require the authorities act in a certain manner
Article 20 of the UN Convention against Corruption; Articles 62, 63 of the Constitution; Article 368-2 of the Criminal Code; Articles 17, 18, 20, 22 of the CPC; Article 50 of the Law “On Prevention of Corruption”.
5. CPLR expert suggestions on how to fix the problem using the legal instruments available in Ukraine
Since the Constitutional Court’s decision is final and is not subject to appeal, it is necessary, in the light of this decision, to develop legislative amendments to the Criminal Code concerning criminal liability for illegal enrichment, and the article itself should be formulated in the new wording. Two draft laws on the introduction of a new article to the CC, presented earlier by President of Ukraine and the people’s deputy, do not comply with the provisions of Art. 20 of the UN Convention against Corruption.
Presidential draft law contains two key disadvantages. First, it is proposed to establish a criminal liability for “acquiring … property of a large amount of assets without legitimate grounds”, but it will be virtually impossible to bring a person to liability under this article, since in the vast majority of cases, the acquisition of assets takes place on lawful grounds (for example, on the basis of a contract for the sale of property). It is not only the issue of whether the right to property has been acquired legally, but also whether the legal income of an official was sufficient to acquire ownership of certain property. Secondly, in the proposed wording, the crime is clearly distinguished from two other crimes: “… in the absence of signs of abuse of power or office, or of signs of acceptance of a proposal, promise or receipt of an unlawful benefit by an official.” It is unclear why the distinction was made only with these two crimes, and all other corruption crimes (committed through the use of the official position and related possibilities to obtain an unlawful benefit) remained unconsidered.
Wording of another draft law provides for criminal liability for “acquiring … property of a large amount of assets, when the illegality of the grounds for such acquisition has been recognized by the court“. Firstly, implementation of such a procedure will take long time, since in order to bring a person to criminal responsibility, consideration of circumstances within the civil justice will be required. Secondly, criminal proceedings recognize the prejudice of only those court decisions, which establish violation of human rights and fundamental freedoms, when the court decides on the admissibility of evidence. It is unacceptable to make the execution of criminal proceedings depend on civil proceedings.
Now, the experts should put forward their suggestions and propose such a wording for the article of the Criminal Code, which, on the one hand, would be as close as possible to the international standard, but, on the other hand, would be in accordance with the Constitution and the decision of the Constitutional Court.
Due attention should also be paid to the possibility of confiscation of public servants’ assets, when the legality of their sources is not confirmed by evidence, within the framework of civil proceedings. This practice has shown its efficiency in many countries, but in Ukraine the confiscation of unjustified assets is not effective, since it depends on the conviction by a court in relation to a person for committing a corrupt crime or legalization of proceeds from crime. The scope of persons whose assets can be confiscated in this way only covers public servants themselves. The package of legislative changes to the Civil Code, the Civil Procedure Code, and anti-corruption legislation will make it possible to turn the civil confiscation instrument into an effective tool for counteracting the acquisition of unjustified wealth by officials.