Corporate Criminal Liability in Ukraine: Dead or Alive?
Author: Orest Stasiuk
Source: Bribery Matters, 4 June 2024

In many jurisdictions, the concept of corporate criminal liability is well-developed, making risk assessment in this regard a routine practice.

In Ukraine however the concept of corporate criminal liability, known locally as "measures of criminal law nature,” wasn’t introduced until 2014 when the concept was presented in cases wherein corporate representatives were convicted of crimes committed on behalf of and in the interests of legal entities (e.g. bribing, money laundering).

Since 2014 there has been an increase in times in which measures of a criminal law nature (i.e. fines, liquidation and confiscation of property) could have been applied to such crimes, but their application remains rare with many cases failing to address practical questions businesses might have about the application of the offense and potential defenses. 

In view of the absence of sufficient cases applying measures of criminal law nature, the recent verdict of the High Anti-Corruption Court handed down on 4 March 2024 in the "VMS-10" case, has stirred interest within Ukraine's legal community. The "VMS-10" case involved the imposition of a fine on a legal entity as a result of its authorized representative being convicted of bribing a governmental official on behalf of the company.

Historically, fines have been imposed in Ukraine based on the bribe amount. In this case the court diverged by referencing the crime's gravity to determine the ultimate fine although it did not specify the final fine, leaving questions about the criteria applied. This lack of clarity continues the trend of ambiguity surrounding the application of measures of criminal law nature.

Despite these uncertainties, the "VMS-10" case verdict indicates an amenability on the part of the courts to apply measures of criminal law nature. Considering the relative activity of the High Anti-Corruption Court and its trend towards establishing new jurisprudence it is possible Ukraine may see a more frequent application of this legal mechanism in the future.

To note, adoption of the above decision was followed by the National Anti-Corruption Bureau's announcement of a draft law aimed at amending the provisions related to corporate criminal liability. It remains to be seen whether these changes will enhance the existing framework or introduce an entirely new concept.

In conclusion, while the recent verdict does not resolve many issues related to the application of criminal liability to legal entities, it signals that this mechanism is not dead and might even be evolving in its application.

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