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Weekly analytics for 22 – 28 September 2020

28.09.2020

Political Points of the Centre of Policy and Legal Reform include a weekly expert analysis of the most important processes in Ukraine in areas of constitutionalism, political parties and elections, governance and public administration reform, judiciary, combatting corruption, criminal justice, etc. 

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Government proposes to prevent abuse of securing a claim


Event

On September 23, the governmental draft law “On Amendments to the Law of Ukraine “On Enforcement Proceedings” regarding the Peculiarities of the Execution of a Court Decision on Securing a Claim” No. 4064-1 was registered by the Parliament.  The draft law provides for the establishment of a prohibition on the recovery of funds and/or shifting recovery to the debtor’s property, except for seizure, in execution of a court decision to secure the claim.

It should be reminded that on February 9, 2017, the Pechersk District Court of Kyiv took measures to secure the claim in case No. 757/7499/17-c by obliging JSC CB “Pryvatbank” to service deposit agreements of several foreign companies (including in terms of managing and payment of funds in the accounts). In early September 2020, having considered the application to determine the procedure for execution of this decision, the court obligated the bank to return the funds transferred by foreign companies under the relevant deposit agreements in the amount of about 10 billion hryvnias.

In fact, this led to the satisfaction of claims without considering the dispute on the merits. However, a few days later the Supreme Court suspended the execution of the decision of the Pechersk District Court of Kyiv of February 9, 2017.

After the decision of the court of first instance on the interpretation of a resolution on securing a claim, the Minister of Justice D. Malyuska published an address to people’s deputies on social networks calling them to urgently register a draft law aimed at preventing abuse in the application of measures to secure a claim.

CPLR assessment

Governmental draft law No. 4064-1 turned out to be an alternative to the draft law No. 4064 introduced by the People’s Deputy Yuriy Kamelchuk on September 7 this year. In fact, they are identical in content (there are insignificant and minor differences only in the explanatory notes).

CPLR experts are of the opinion that the idea these draft laws should be supported, as it is aimed at preventing abuse of the institution of securing the claim in cases. The measures taken to secure the claim in their essence cannot replace the final court decision resolving the dispute between the parties, as the purpose of securing the claim is to enable enforcement of the court decision, which will be adopted after consideration of the case in essence, but not resolution of the dispute in merits.  At the stage of consideration of the case, it is only possible to resolve the issue of the seizure of funds or other property, but not of their recovery.

In summary, the prohibition proposed by the draft law is aimed at bringing the provisions of the legislation on enforcement proceedings in line with the purpose and content of the institution of securing the claim.

At the same time, it is advisable to introduce such amendments to the procedural codes, as this should be a requirement first of all for the courts when considering issues related to securing a claim, and not for the activities of public or private executors. After all, in the above situation, it was the courts that allowed the abuse.



People's deputies propose the Verkhovna Rada to call on the President to reorganize district administrative courts in the city of Kyiv


Event

On September 23, the Parliament registered a draft resolution “On the Address of the Verkhovna Rada of Ukraine to the President of Ukraine on the Activities of the District Administrative Court of Kyiv”, submitted by the people’s deputies from “Holos” and “Servant of the People” parties. Deputies propose to call on the President to submit to the Verkhovna Rada a draft law on the liquidation of the District Administrative Court of Kyiv, the Kyiv District Administrative Court and the establishment of the Kyiv District Administrative Court on their basis, as well as to initiate a review of the subject jurisdiction of the newly created judicial body (in particular, to transfer the exclusive jurisdiction of disputes with the participation of central executive authorities to the Supreme Court).

As stated in the explanatory note to the draft resolution, the reasons for this address are: “sabotage” of qualification assessment by judges of the District Administrative Court of Kyiv, the court’s involvement in high-profile corruption scandals, possible use of powers by judges of this court in their own interests and for unlawful influence on public authorities, as well as the undermining by this court of confidence in the entire judicial system.

CPLR assessment

Part 2 of Article 125 of the Constitution of Ukraine stipulates that the formation, reorganization and liquidation of a court is carried out by law, the draft of which is submitted to the Parliament by the President. That is, only President Volodymyr Zelensky can  initiate the reorganization of the District Administrative Court of Kyiv and the Kyiv District Administrative Court.

In this relation, it is expedient to support the submitted draft resolution. However, according to Article 19 of the Law “On the Judiciary and the Status of Judges”, “the grounds for establishing or liquidating a court are: changes in the judicial system defined by this Law, the need to ensure access to justice, optimization of state budget expenditures or a change in administrative-territorial structure”, but not the ones stated by the people’s deputies in the explanatory note.

In fact, at the same time as part of the jurisdiction of the District Administrative Court of Kyiv is transferred to another court (either the Supreme Court, as proposed by the people’s deputies, or the newly created High Administrative Court, as proposed  by the CPLR experts), there may be a need to optimize state budget expenditures and consequently to consolidate two district administrative courts located in Kyiv (municipal court and regional court by territorial jurisdiction). In accordance with the transitional provisions of the Constitution, the newly established court should be formed on the basis of a competition.

It should be noted that the transfer of exclusive jurisdiction of the District Administrative Court of Kyiv to the Supreme Court proposed by the people’s deputies may in practice lead to an overload of the Supreme Court, in which one of the busiest courts remains the Administrative Court of Cassation and the Grand Chamber.

Therefore, this can only be a temporary solution. A more sustainable option may be to establish a High Administrative Court on a competitive basis, according to a procedure similar to the selection of judges of the High Anti-Corruption Court. In the future, it is advisable to refer to this court the disputes involving the Government, ministries and other central executive bodies, the NAPC and other authorities. Appeal against the decisions of this court could be considered by the Supreme Court.



National Council for Anti-Corruption Policy supported the draft Anti-Corruption Strategy submitted by the government to the parliament


Event

On September 28, for the first time since July 18, 2019, the National Council for Anti-Corruption Policy under the President of Ukraine hold its meeting. There was one issue on the agenda: the draft Anti-Corruption Strategy for 2020-2024, which was registered in the Verkhovna Rada of Ukraine on September 21 under No. 4135 at the initiative of the Cabinet of Ministers of Ukraine. Resolved: to support the draft Anti-Corruption Strategy for 2020-2024 and to determine it as urgent as proposed by the President of Ukraine; to instruct the National Agency for Anti-Corruption Policy to develop a draft State Program for the Implementation of the Anti-Corruption Strategy within three months.

CPLR assessment

Since the beginning of 2018, there is no anti-corruption strategy in Ukraine, and the relevant measures are not implemented or are implemented chaotically. Therefore, it is extremely important to adopt an Anti-Corruption Strategy, which will allow starting work on its implementation immediately, which in turn will be an important condition for the implementation of other important economic, political and social reforms.

Since the Anti-Corruption Strategy provides only a list of problems in various areas and the expected strategic results of their solution and in itself does not contain the provisions that are directly applicable, there is no need for its consideration by the Verkhovna Rada in two readings. After all, the Anti-Corruption Strategy provides for the need to adopt a number of specific laws and governmental regulations that can be further considered and adopted by Parliament and the Government in the usual way. Otherwise, there is a risk of delaying the adoption of the Anti-Corruption Strategy, the destruction of its individual ideas and the imbalance of structural parts.

Therefore, it is expedient that the Anti-Corruption Strategy be adopted by the Verkhovna Rada of Ukraine as a whole as soon as possible.



Grounds for release from punishment for corruption crimes should be clarified in the Criminal Code


Event

On September 22, the Supreme Court announced the results of the cassation appeal in a case of corruption committed by the head of the post office: “A person convicted of a corruption crime cannot be released from serving a probation sentence.”

The Criminal Court of Cassation of the Supreme Court (hereinafter – the CCC of the Supreme Court) noted that by releasing a person found guilty of committing a corruption crime from serving a probation sentence under Article 75 of the Criminal Code of Ukraine, the appellate court incorrectly applied the law of Ukraine on criminal liability against a person convicted under Part 2 of Article 191 of the Criminal Code of Ukraine (appropriation of another’s property by abuse of office by an official) and Part 1 of Article 366 of the Criminal Code of Ukraine (introduction by an official to an official document of knowingly false information), and decided to cancel the decision of the appellate court and to appoint a retrial in the appellate court.

CPLR assessment

In its decision, the CCC of the Supreme Court stated that a fair trial in corruption cases of various scales is a priority, and that corruption crimes themselves, due to their significant public danger, require an exceptional procedure for criminal prosecution. Such an exceptional procedure is established in Article 45 and Part 1 of Article 75 of the Criminal Code: when considering cases of corruption crimes, the court cannot decide on release from probation.

In the case of a corruption offense committed by the head of the post office, the appellate court misapplied the law on criminal liability, namely, it applied a rule that was not applicable. The decision of the CCC of the Supreme Court in this case should clarify the actions of the courts when making decisions in similar cases.

However, the mentioned resolution of the CCC of the Supreme Court does not solve the problem of application of Part 2 of Article 75 of the Criminal Code, which requires the court to release a person from probation in case of approval of a conciliation agreement or admission of guilt, and does not contain exceptions for corruption offenses. Despite the fact that the provision of Part 2 of Article 75 of the Criminal Code is a special norm in relation to the provision of Part 1 of this article (Part 2 of Article 75 of the Criminal Code contains an injunction, and not, as a general rule, the possibility of release from probation in cases where there is a conciliation agreement or admission of guilt, and the parties to the agreement agreed to such an exemption), it is now often considered by the courts as an independent provision. This problem is easier to solve by the legislator by making the necessary amendments to Article 75 of the Criminal Code, than to wait for the relevant cassation appeal to get into the CCC of the Supreme Court.

At the same time, one should take into account the position of prosecutors, who believe that, due to the impossibility of release from probation for corruption crimes, it is impossible to conclude agreements with suspects in such crimes, which, in turn, does not contribute to reaching the goals of criminal proceedings.