CPS Attorneys Blog

Legal innovation from State Fiscal Service investigators during recognition of property as a material evidence

While declaring the necessity to establish a Financial Investigative Service, the headquarters of the State Fiscal Service of Ukraine refused from attempts to correct a so-called “technical error” and to cancel “du jure” liquidation of tax police, which was made in Ukraine since January 1, 2017. While the legislator tried to return this body to the legal framework, provided by the Tax Code of Ukraine, tax police officials often try to exercise their powers outside the framework of the current legislation.


Noteworthy is the precedent faced by the entrepreneurs, who carry out their economic activities at the ports of the Big Odessa, and the CPS Attorneys specialists, while protecting their interests.


In February 2017, an investigator of the tax police of one of the districts of Kiev during investigation of criminal proceedings according Art. 205 (fake business activity), Art. 209 (money laundering), Art. 212 (tax and duties evasion) of the Criminal Code of Ukraine, issued a resolution on recognition of goods at the terminal as material evidence.


By a separate paragraph of the resolution the investigator also ordered the terminal to take the goods for safe keeping, while the goods were not arrested or seized in the framework of the investigative actions. Considering that the terminal is not the owner of the goods, such order to the terminal for safe keeping without the terminal’s consent is a serious violation of the terminal’s rights and goes beyond the powers of the investigator.


While submitting the noted resolution for execution directly to the terminal, the investigator did not inspect, did not seize, and whatsoever did convinced of the actual existence of the goods at the terminal, and did not identified the owner of the goods with generic characteristics. By his actions, the investigator seriously violated the rules of Part 1 Art. 100 of the Code of Criminal Procedure of Ukraine and clause 7 (Storage of material evidence) of Storage procedure of material evidence, approved by the Resolution of the Cabinet of Ministers of Ukraine No. 1104 dd. 19.11.2012.


The specified norms provide the procedure for obtaining a material evidence by a party to criminal proceedings – (1) delivering of material evidence to the party, or (2) seizure of material evidence by the party. Thus, the investigator decided to simplify his task and by his own resolution without examination, seizure or arrest of the goods, recognized the goods as material evidence and by the same resolution passed the goods for safe keeping to the enterprise, which is not related to criminal proceedings.


Taking into account the obvious absurdity, such decisions should be appealed according Art. 303 of the Code of Criminal Procedure of Ukraine. Since Art. 303 of the Code of Criminal Procedure contains a fairly narrow list of grounds for appealing and narrow list of claimants, while submitting a complaint, it is appropriate to refer to Part 6 Art. 9 of the Criminal Procedure Code of Ukraine and the decision of the Constitutional Court of Ukraine No. 1-29/2011 dd. 14.12.2011.


It remains to hope that, if not the prosecutors or the investigative judges, then the creation of the law-abiding Financial Investigative Service will positively influence the existing “innovative” tendencies of the investigators.


Sergey Kalitenko, attorney-at-law

Sergey Sushko, lawyer