If you want to spread Russian propaganda, be prepared to say goodbye to your property. This is the fate that befell two rectors who supported the occupiers in every way possible
Source: Ukrayinska Pravda
The High Anti-Corruption Court confiscated the property of the rectors of higher education institutions in Crimea and Belgorod at the request of the Ministry of Justice of Ukraine . Earlier, the Ukrainian assets of the Russian arms manufacturer oligarch Yevtushenkov were confiscated (read more here).
What assets were confiscated and who is next in line? And what should we expect from the confiscation of assets of those who contribute to the war? We will tell you in our review.
Whose property was confiscated and what kind?
The rector of the Vernadsky Crimean Federal University was the first to say goodbye to his property. In particular, the court confiscated a 74 sq m apartment, which is probably located in Sevastopol. We are talking about Andriy Falaleev, who was appointed rector in October 2020.
In March 2022, Falaleyev, together with a number of rectors of higher education institutions of the Russian Federation, supported the appeal of the Russian Union of Rectors, which, among other things, legitimised Russia's military aggression against Ukraine and supported the illegal actions of the top political leadership and military personnel of the Russian Federation.
In addition, the Crimean University's social media repeatedly posted posts supporting the war in Ukraine and the Russian army:
- a publication titled ‘Let's support our country Ru’, which shared a video featuring the Latin letters ‘Z’ and ‘V’ used as symbols of the Russian armed forces;
- a publication dated 21 July 2022, in which the university informs about a ‘meeting with Russian military returning from the zone of the special military operation’ and uses one of the slogans in support of the Russian military attack on Ukraine, namely ‘We do not abandon our own’;
- a publication dated 23 August 2022 informing the university about the start of accepting applications for the competition of ‘patriotic projects’, which include, in particular, ‘We do not abandon our own’ and ‘Heroes of Donbas - Heroes of Russia’.
The NSDC imposed sanctions on Falaleyev in June 2022. The Ministry of Justice filed a lawsuit for confiscation on 24 November. The case was upheld on 5 December.
The next HACCU decision on confiscation concerns the rector of Belgorod University. It concerns Oleg Polukhin, who has held this position since 2012.
Polukhin, who is a member of the United Russia party, also signed the rectors' appeal to support Putin.
According to the court's decision , ‘Polukhin is responsible for informational and ideological support for the actions of the aggressor state that undermine and threaten the territorial integrity, sovereignty and independence of Ukraine by spreading among the students of the university of which he is the rector the ideas of denazification and demilitarisation of Ukraine, promoting support for the actions of the top political leadership of the Russian Federation and justifying military actions against Ukraine, and contributing to crimes against the territorial integrity of Ukraine, genocide of the people of Ukraine and humanity.’
The HACC confiscated the propagandist rector's
- an apartment with a total area of 324.5 sq m, located in Crimea;
- a share of 25.00% (UAH 64,820.00) of the authorised capital of STAV-2003 LLC.
What do these decisions mean?
Unlike the case on the confiscation of Yevtushenkov's assets, which was heard in closed session and the decision contained only the introductory and operative parts, the rectors' cases were open and the published decisions were full. This makes it possible to assess the court's motivation and analyse the HACC's position on important aspects of the confiscation process.
The HACC uses the recommendations provided on the application of such a measure, taking into account the practice of the ECHR, in particular, it pays considerable attention to the issue of proportionality of intervention.
In addition, the decisions contain important conclusions for the further consideration of such cases, in particular
- to be able to confiscate the assets of Ukrainians, it is necessary to establish signs of terrorist activity in the actions of a person;
- the court examines the legality of the NSDC's application of the asset freeze as a necessary condition for confiscation;
- the court draws conclusions about the nature and purpose of the sanctioned confiscation. The HACC points out that such a measure is aimed primarily at stopping the aggressive actions of the Russian Federation, ending support for its current political regime by striking at the financial capabilities of supporters of such a policy. It also aims to provide quick and effective compensation for losses at the expense of funds received from confiscation.
Particular attention should be paid to the court's conclusions regarding the retrospective effect of the confiscation law.
The HACC, referring to Article 58 of the Constitution of Ukraine, which prohibits the retroactive effect of laws, did not apply the retroactivity of the law to the grounds for confiscation that existed before the relevant amendments to the Law of Ukraine ‘On Sanctions’.
The court points out that the relevant grounds for the defendant's actions must arise or exist and continue to exist after the entry into force of Law of Ukraine No. 2257-IX (which introduced confiscation), namely as of 24.05.2022. This means that the assets of those who refused to support the aggression after this date will not be subject to confiscation.
Who is next?
Of course, confiscating the property of propagandist rectors is not a bad idea, but a 74-square-metre apartment, especially in Crimea, will not improve Ukraine's budget and will not significantly affect support for the Putin regime. A much more tasty morsel is the estates of former fugitive President Yanukovych.
On 16 November 2022, the Ministry of Justice of Ukraine filed a lawsuit with the High Anti-Corruption Court to confiscate Yanukovych's assets.
The information on the status of the proceedings revealed that Yanukovych's mistress Lyubov Polezhay, his wife Lyudmyla Yanukovych and his dentist son Oleksandr Yanukovych are third parties to the case. The third parties in the case are also legal entities: Dom Lesnyka LLC and Tantalit LLC. It was these companies that registered Yanukovych's property, including residences in Mezhyhirya and Sukholuchchya and an elite house in Obolon, Kyiv.
Read more about the confiscation of Yanukovych's assets here
The assets of Russian Duma deputies Boris Paikin and Roman Lyabykhov may also be confiscated soon. The Ministry of Justice filed the relevant lawsuits on 12 and 13 December.
What should the Ukrainian authorities do to make the confiscation process effective?
As we can see, the Ministry of Justice has stepped up its efforts to confiscate the assets of the sanctioned persons, and the HACC supports such claims. Also, no decisions have been appealed so far.
However, this does not mean that the sanctions confiscation is currently as effective as possible.
First, it is necessary to clearly define the approach to prioritising the confiscation of assets of sanctioned persons.
Undoubtedly, such a measure should be applied to all persons whose actions give rise to grounds for confiscation. Nevertheless, the priority of confiscation should be logical and based on certain criteria set out in the law (of course, leaving the Ministry of Justice some flexibility and discretion in its choice).
The decision to confiscate the apartments of rectors in Crimea cannot be considered an effective measure of influence. In addition, the actual execution of the court decision and confiscation is possible only after the de-occupation of Crimea.
Given the large number of existing ‘candidates for confiscation’, when preparing new lawsuits, the Ministry of Justice should first file lawsuits against persons who meet the following criteria:
- The subject's connection to the political regime of Russia.
- It is the assets of persons close to the Putin regime and responsible for the conduct of the aggressive war, as well as the ‘wallets’ of the aggressor, i.e. Russian oligarchs who acquired their wealth through corruption and connections with the authorities, that will have the greatest effect.
- Value of assets. Entities that own ‘more expensive assets’ should be prioritised for confiscation over others.
- The loss of high-value assets can appropriately influence the behaviour of an entity.
The use of the same or similar criteria when selecting the object to be confiscated will make such a measure as effective and efficient as possible. Therefore, the assets of Russian oligarchs, politicians and propagandists with significant wealth should be confiscated first. For example, the Ukrainian assets of oligarch Deripaska are quite substantial, and the oligarch himself is close to Putin.
Secondly, the procedural timeframe for consideration of asset confiscation cases needs to be improved.
The timeframe for consideration of the case is 10 days, the timeframe for consideration of the appeal is 5 days, and the response to the claim must be submitted within 2 days. Such timeframes are insufficient for the normal consideration of a confiscation case, as evidenced by the Yanukovych case, which has been pending in the HACC for almost a month.
In addition, too short timeframes established by law for the confiscation process may later become the basis for appealing court decisions, in particular to the ECtHR, in terms of violation of the right to a fair trial guaranteed by Article 6 of the ECHR.
Thirdly, the state's efforts should be aimed not only at confiscating assets, but also at their effective management.
Despite the excessive haste with the confiscation process, the actual execution of HACC decisions, on the contrary, takes too long. Yevtushenkov's confiscated assets were transferred to the management of the State Property Fund only 3 months later, on 09.12.2022, by the HACCU decision of 01.09.2022.
Fourth, the greatest effect can be achieved by confiscating assets not only in Ukraine but also abroad.
The need to confiscate assets located in Ukraine is indisputable, but the confiscation of assets in European countries (in particular, the UK, Switzerland, France, Italy, Germany, and Austria) may have the greatest impact.
Ukraine should become a driver of confiscation processes in partner countries and try to confiscate not only assets located in Ukraine.
Thus, the Ministry of Justice and the HACCU show good dynamics in the application of sanctioned confiscation of assets of aggressor's accomplices. At the same time, this tool needs to be improved in order to achieve maximum impact and direct as much of the aggressor's funds as possible to rebuild Ukraine.
Analytical Centre ‘Institute of Legislative Ideas’