LAUNCHING CORRUPTION SCHEMES INSTEAD OFPROTECTING BUSINESSES

Analytics about draft law #12439

Executive summary

• One of the main challenges to Ukraine’s economic resilience is the excessive pressure exerted by law enforcement agencies on businesses.
• Alongside positive provisions aimed at protecting businesses from unlawful pressure, draft law 12439 also includes changes that concentrate power in the hands of a loyal prosecutor’s office and may legiti-mise corrupt practices behind closed doors.
• MEZHA insists that draft law 12439 be revised to ensure genuine protection for businesses, maintain a fair balance of public interests, and prevent authorities from acquiring new corrupt powers.

Main threats of the draft law 12439

1. Covering corruption schemes in customs, taxation, or procurement through “explanations” issued by government agencies
   
   According to Article 68 of the Constitution of Ukraine, everyone is obliged to strictly adhere to the Consti tution of Ukraine and the laws of Ukraine. Ignorance laws do not exempt from legal responsibility. However, MPs propose a rule that removes criminal liability for actions based on official explanations of customs, tax, or procurement laws. This would allow corruption schemes to be easily legitimised through the mechanism of “individual explanations.” An agreement with an official involved in the scheme could make it formally legal and prevent any investigation or prosecution related to customs, tax, or procurement abuses.
2. Direct Assault on the Procedural Independence of the ESBU
   
   MPs propose that thousands of crimes related to economic activity and misappropriation or embezzlement of property (Article 191 of the Criminal Code) be registered manually only by the Prosecutor General, heads of district prosecutor’s offices, and their deputies. This is an unprecedented proposal that has no equivalent in the Criminal Procedure Code, as all other crimes, including the most serious ones, are registered independently by investigative bodies. In reality, the initiative shields shadow schemes from ESBU investigations
   by creating an arbitration mechanism controlled by the leadership of the General Prosecutor’s Office.
3. Launching Criminal Investigations at the Discretion of Law Enforcement
   
   Currently, criminal proceedings are initiated if there are “circumstances that may indicate the commission of a criminal offense”. However, MPs propose allowing investigations only when there is “sufficient data” to indicate a crime, giving law enforcement broad discretion to decide whether to open a case. In practice, this would allow authorities to dismiss complaints ranging from corruption involving whistleblowers or influential suspects to ordinary citizens` reports of theft or assault, using “insufficient data” as a formal excuse.
4. No More “Urgent” Searches in Corruption Cases
   
   Currently a search before a court order is issued may be carried out in urgent cases to save people and property, as well as during the prosecution of a suspect. The changes propose to exclude such a reason for conducting a search without a court order as the rescue of property, including physical evidence, which will make it impossible to seize them urgently – for example, a bribe that they are trying to get rid of. Also, the right to enter premises during the pursuit of individuals would be limited to suspects of around 30 specific crimes (mostly against national and public security, the lives of citizens, state and public figures), among which only one is regarding corruption (receiving an illegal benefit). This change would effectively block law enforcement from pursuing suspects in other corruption offenses, including those that are typically committed through direct hand-to-hand transfers of money (e.g., offering a bribe, bribing a service provider, or influence peddling).

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