Weekly analytics for 08 – 14 July

New Benefit in Manual Administrative Decision-Making Mode

Event

On June 25 draft law № 13423 “On Amendments to the Criminal Code of Ukraine and the Criminal Procedure Code of Ukraine Regarding Support for Enterprises of the Defense-Industrial Complex” (hereinafter – the Draft Law) was submitted to the Verkhovna Rada’s consideration.

The Draft Law proposes, in particular, to supplement Section IX-1 of the Criminal Procedure Code of Ukraine (hereinafter – the CPC) titled “Special Procedure for Pre-Trial Investigation and Trial under Martial Law” with a new Article 616-1 “Peculiarities of Criminal Proceedings Involving Enterprises of the Defense-Industrial Complex and Their Officials”.

Article 616-1 of the CPC proposes to introduce additional safeguards for the protection of enterprises in the defense-industrial complex (hereinafter – DIC), which are included in the relevant DIC enterprises list by the Ministry of Defense of Ukraine (hereinafter – MoD) and their officials (hereinafter – the List), as well as their officials. These safeguards include, in particular the following:

1) to introduce a moratorium on pre-trial investigations against legal entities included in the List and their officials effective throughout the duration of martial law in Ukraine and for a period of three years following its termination or cancellation;

2) to exclude from the scope of the moratorium cases in which key procedural decisions in such criminal proceedings are made or approved by the Prosecutor General (or by an individual acting in that capacity), namely: a) to initiate a pre-trial investigation; b) to approve motions for authorization to detain individuals, impose preventive measures in the form of custody or house arrest, suspend officials from their positions, grant temporary access to items and documents, seize property, conduct searches, interfere with the confidentiality of correspondence, telephone communications, telegraphic or other forms of communication, and apply other measures, including covert investigative (search) actions; c) to approve the notice of suspicion issued to an official of a legal entity included in the List.

CPLR’s assessment

The nature and role of the proposed provisions within the system of criminal procedure law. The Draft Law introduces an additional procedural sub-regime of criminal proceedings which constitutes, in essence, an eclectic synthesis of two procedural models: a) proceedings conducted under martial law (Section IX-1 of the CPC); and b) proceedings involving specific categories of individuals (Chapter 37 of the CPC). Among these, the second – proceedings tailored to specific categories of individuals – appear to be the more significant in terms of the substantive safeguards being proposed.

Currently Article 480 of the CPC establishes a separate procedural regime for certain public officials who perform critical public and societal functions (e.g., Members of Parliament, judges). This special regime reflects the concept of functional immunity (inviolability), granted by the legislature to ensure their public (official) or professional performance is protected from any undue pressure or external influence, especially in the form of criminal prosecution, in order to safeguard the integrity of decision-making and prevent any distortion of genuine intent, which, if compromised, could pose a serious threat to democratic governance. 

The level of the proposed procedural safeguards is disproportionate.

Draft Law introduces a new category of subjects – certain legal entities (enterprises) within the DIC and their officials – who would be granted immunity from criminal prosecution. Notably, the level of immunity proposed mirrors the highest standards of procedural protection afforded under Ukrainian law, comparable to that granted to Members of Parliament under Articles 481 and 482-2 of the CPC. The decision to vest exclusive authority for approving or initiating key procedural actions in the Prosecutor General, rather than in the Deputy Prosecutor General – Head of the Specialized Defense Prosecutor’s Office, or in the heads and deputy heads of regional Specialized Defense Prosecutor’s Offices, raises both legal and practical concerns. These officials, by virtue of their scope of competence, would be more appropriately placed to handle such matters. Furthermore, assigning these powers to the Prosecutor General creates an excessive administrative burden, as it requires significant time and attention to properly review and assess each case and motion, thereby impeding the timely and informed adoption of decisions. This raises legitimate concerns about the potential political motivation behind the legislative initiative.

Extension of immunity to this new category of individuals is inconsistent with the historically established principles guiding the legislature’s allocation of procedural safeguards. For instance, Members of Parliament are elected by the people of Ukraine, while other individuals granted such immunities typically undergo rigorous competitive selection processes to attain their legal status, are subject to clearly defined termination rules, and are regulated by professional codes of ethics.

In contrast, the inclusion of enterprises in the DIC List is based on individual administrative decisions of the Ministry of Defense, which may likewise remove them from the List. This process lacks the filtering criteria traditionally associated with the conferral of legal immunities. Moreover, business activity in Ukraine is recognized as free and conducted at one’s own risk (Article 42 of the Constitution of Ukraine; Article 1 of the Law “On Entrepreneurship”). 

Therefore, the proposed procedural safeguards for DIC enterprises are disproportionate.

Corruption Risks. The procedural safeguards proposed for legal entities within the DIC create corruption risks, particularly at the stages of inclusion in, or removal from, the List. Furthermore, paragraph 6 of the proposed Article 616-1 of the CPC extends certain guarantees even to enterprises that were already subject to criminal proceedings prior to their inclusion in the List, and whose officials had been subject to pretrial security measures, as specified in clauses 3, 4, and 6–9 of Part 2, Article 131 of the CPC. Such enterprises are granted the right, within 30 days from the date of inclusion in the List, to submit a motion to the Prosecutor General requesting a review of the applied measure. This motion must be considered within 5 days. In fact, the Prosecutor General may personally file (or authorize subordinate prosecutors to file) a motion with the investigating judge to cancel the previously imposed measure. The investigating judge, in turn, would be required to grant such a motion, provided it has been approved by the Prosecutor General. This mechanism introduces a serious risk of abuse, as it may enable legal entities and their officials to avoid criminal liability not only for current offenses but also for past offenses. This is particularly concerning in cases where a enterprise begins fulfilling defense contracts and succeeds in lobbying for its inclusion in the List.

Public Perception. There is no doubt that, under martial law, the proper, conscientious and timely fulfillment of duties and contractual obligations by all actors involved in Ukraine’s defense effort is of critical importance. However, among the hundreds of entities directly contributing to national defense, the selective extension of procedural safeguards against criminal prosecution is widely perceived as disproportionate and unjust. This perception is further amplified by high-profile media investigations that have uncovered instances of official misconduct – some of which involve financial losses in the billions. In this context, the introduction of procedural immunity for certain individuals raises legitimate concerns within society, reinforcing the belief that such legal mechanisms could serve as a tool for impunity.

Therefore, legislative initiatives of this nature must be approached with caution and critical scrutiny.

Equating Corruption with Treason: A Pure Populism

Event

On July 9, Draft Law № 13423-1 “On Amendments to the Criminal Code of Ukraine and the Criminal Procedure Code of Ukraine Regarding the Equating of Criminal Liability for Corruption Offenses with High Treason During Martial Law” (hereinafter – the Draft Law) was registered in the Verkhovna Rada. The Draft Law proposes, in particular, to supplement the Criminal Code of Ukraine (hereinafter – the CC) with a new Article 111-3, which would establish criminal liability for corruption-related criminal offenses committed during the period of martial law.

CPLR’s assessment 

1.The Special Part of the current CC is structured based on the generic object of the offense, with each section specifying a distinct object of encroachment. The Draft Law proposes to reclassify criminal offenses already established in Part 2 of Article 191, Part 1 of Article 210, and Article 368-5 of the CC – currently dispersed across different sections of the Special Part – under a new Article 111-3. This new article would include additional qualifying criteria, namely “during the period of martial law” and “an official holding a responsible or particularly responsible position”, which would be placed in Section 1 of the Special Part titled “Criminal Offenses Against the Foundations of National Security of Ukraine”.

Such duplication undermines the systematic structure of the CC and, in practice, will significantly complicate the legal qualification of offenses, as well as the investigation and judicial proceedings related to these crimes.

2. The note to the proposed Article 111-3 attempts to define a list of officials considered to hold responsible and particularly responsible positions. This contradicts with the definitions provided in paragraphs 2 and 3 of the note to Article 368 of the CC, which clearly distinguishes between officials holding responsible positions and those holding particularly responsible positions, thus adding confusion to law enforcement application.

3. All parts of Article 111-3 of the CC propose punishments of imprisonment for 15 years or life imprisonment, accompanied by confiscation of property. This approach clearly violates the principle of proportionality, which requires criminal liability to be individualized (as established in Article 61 of the Constitution of Ukraine), particularly by considering the role of the individual in the commission of the crime, including cases of complicity. Such a rigid sentencing framework will also hinder the use of plea agreements and complicate effective investigations overall.

However, harsher penalties do not deter crime. The key factor in preventing crime is the inevitability of punishment.

4. Although the Draft Law maintains the jurisdiction of the National Anti-Corruption Bureau over cases under Article 111-3 of the CC and assigns trials to the High Anti-Corruption Court, it lacks a coherent, systematic approach to corruption-related criminal offenses. Notably, it fails to classify these crimes as corruption offenses under Article 45 of the CC. This omission is unacceptable, as it would permit the application of provisions that allow for lighter punishments than those prescribed in the Special Part of the CC. Consequently, offenders might be exempted from punishment or enforcement, unlike individuals convicted of other corruption offenses. Additionally, this would prevent the inclusion of these offenders in the Unified State Register of individuals who have committed corruption of corruption-related offences.

Such an approach risks reinforcing existing negative trends of selective justice.

Overall, the Draft Law, in case of its adoption, is unlikely to enhance the effectiveness of preventing corruption-related crime.