How Ukraine protects its citizens from raiding – Endless story: How Ukraine protects its citizens from raiding and why this issue cannot be overcomed | #espionage | #surveillance | #ceo


The new cadence of the government decided on radical measures: last year, all state registrars and notaries were required to undergo verification, and the adopted presidential bills made it possible to close access to state registers for unscrupulous specialists. The new “anti-raider” commission in the Ministry of Justice reported that there are almost no “black registrars” left, but complaints about illegal registration actions and seizing of property continue to come regularly. Victims of raider attacks are outraged: courts, police and prosecutors often work in the interests of criminals, allowing them to dispose of other people’s property and make money on it; and the collegium in the Anti-Raiding Office delays the consideration of applications, making it possible to carry out a number of re-registrations for third parties, which significantly complicates the process of returning property to its legal owners.

Some again associate what is happening with the connivance of the Ministry of Justice, and in the department itself they report that they do not stop fighting against raiding for a minute: they, together with independent experts, have prepared a number of new bills, which have already been submitted for consideration to parliamentary committees.

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The mention of raiding throws the imagination of many Ukrainians back to the past – to the 90s. Then the raider attacks were carried out mainly by force and gross blackmail, and the owner of an attractive real estate or profitable business, under the mortal threat of a pistol pointed at the temple, was informed that he would have to give up property rights in any case, dead or alive. Forceful seizures, when a group of “sportsmen” breaks into the premises of the enterprise and vacates it for “new owners”, still occur today, but are no longer the main tool for taking possession of other people’s property. Classic banditry has long acquired mafia features: nowadays, not a single raider takeover can do without the patronage of government officials.

“Seizing” story

Particularly indicative was the period in 2016-2019, when the exploitation of other people’s property was facilitated not only by falsified criminal proceedings, corporate espionage, fraud with the loan portfolio of production, but also by the regulatory legal acts themselves. In this regard, in July last year, human rights defenders of the “Business-Varta” public organization, together with the leadership of several enterprises and associations of entrepreneurs of Ukraine, drew up a statement of a criminal offense against the former Minister of Justice Pavlo Petrenko. In the text of the document, experts indicate that during the administrative reform in 2015, the authorities liquidated the State Registration Service of Ukraine as an independent body and transferred it to the management of the Ministry of Justice; at the same time, the ministry initiated a number of regulations that simplified access to state registers, the very procedure for registering property rights and obtaining accreditation to carry out such operations.

In general, not only civil servants, but also private notaries could now change the owner of a company in the Unified State Register of Legal Entities and Individual Entrepreneurs or re-register an apartment on the basis of a deed of gift in the Unified Register of Material Rights to Real Estate.

However, officials could not ignore the resulting collapse in the system of property legal entities registration of: already in June 2016, the MPs at an accelerated pace began to develop an “anti-raider” bill. As a result, Ukrainians were able to appeal against the actions of state registrars and notaries in a special commission under the Ministry of Justice, and the articles of the Criminal Code on abuse of office and forgery of documents were supplemented by new subjects – state registrars and notaries. Since most of the illegal operations were carried out on the basis of falsified, if not completely non-existent, judicial decisions, it was even planned to establish automated interaction between the Ukraine’s State Register and this of the USSR, but this has not happened so far.

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“In essence, such changes did not bring any special results: it is almost impossible to prove intent in illegal actions of state registrars, and the” anti-raider “commission significantly delayed the consideration of submitted complaints or refused to do so for formal reasons: for example, due to incorrectly certified copies of documents or lack of law norms. Artificially created delays in the administrative way of appealing the actions or inaction of the state registrar allow raiders to repeatedly re-register property to third parties. Due to this becomes more difficult to “roll back” the whole process, and a specific appealed action is already being replaced by a number of new ones. If we are talking about some kind of industrial production, then the raiders will safely make money on it, they will be able to steal equipment and machinery, withdraw the company’s assets … In fact, the scheme worked in the following sequence: entity or its branch carries out a criminal registration action without grounds and documents, depriving the owner of property or business; the victim appeals to the Commission with a complaint, and intermediaries “come out” to the victim, who, for a certain amount of money, offer to cancel illegal actions by the hands of the same “black registrar” or by a decision of the commission members; the victim is offered time to “think”, and in case of a negative decision, the complaint is denied due to formal reasons,” says Andriy Nakhod.

According to experts, there is no one to complain about all such chaos: in fact, the raiders sit in power, imperceptibly leading the decisions of specialized commissions and collegiums, so they can ignore and ignore some illegal actions, and with respect to others, start a showy struggle for society and the media …

“New history” of Ukrainian raiding

The appearance “black registrars” did not bypass the attention of not only Ukrainians, but also foreign observers. So, in 2015, in the ranking of countries, which is annually compiled by the Property Rights Alliance American organization, Ukraine took 109th place (out of 128 countries), and in 2016 it dropped by 6 positions – to 115th place. … The new cadence of the Ministry of Justice vouched to take control of the situation. In July 2019, all state registrars and notaries had to appear with a passport and an electronic key to the State Enterprise (which is the administrator of the Unified and State Registers) to verify and confirm their activities: the bulk of illegal re-registration was carried out by the hands of “specialists” for counterfeit or lost passports, the owners of which, according to border guards, were in the occupied territory and were often unaware of their participation in such scams.

All these steps by the authorities returned Ukraine back to 109th place in the Property Rights Alliance rating for 2019, but experts admit that the situation with raiding in Ukraine remains deplorable. Any property is at risk, not just an apartment in the elite district of the city inherited from a grandfather, or a promising company that has just begun to make a profit. Despite the fact that almost all “black registrars” are in the past, the old grandfather’s methods have not disappeared, and it is much more difficult to appeal against them and defend their rights.

For example, “cooperating” with law enforcement officers in the power structures, raiders can carry out searches with their hands – on the basis of fictitious criminal proceedings. In the process, the investigating judge gives the go-ahead to seize the originals of the company’s charter documents and the registration file for an “examination”, after which metamorphoses take place with some documents: for example, the text of the general meeting of the joint-stock company’s participants suddenly testifies to the legal rights of the invaders.

MPs strike back

However, despite the obvious origins of raiding in the judicial and law enforcement systems, the MPs, together with human rights activists, continue to fight this negative phenomenon through the next revision of the already complex Ukrainian legislation. So, in early July, the Verkhovna Rada registered two relevant bills: they were developed by the MPs from the Temporary Special Commission on the protection of investors’ rights with the support of the Ministry of Justice and public activists from the Business-Varta association.

The first bill, number 3774, offers, among others, the following innovations:

  • Implementation of the so-called “red button” mechanism. After receiving the relevant complaint, the Board will be able to suspend all actions in the registers in relation to this object.
  • The time for revising the text of the complaint in case of improper execution is not included in the established general deadline for appealing the registration actions. In addition, this period is increased from the current 60 days to 3 months.
  • During business registration, the possibility of “waiting” of the registers is excluded: this was used by unscrupulous registrars, starting an action in the system and not ending it, which is why, within 15 days (without a court decision), all functionality in relation to the registration object was blocked.
  • The docs of the legal entity general meeting on the change of the head will have to be signed by all its participants. According to the current legislation, for the legal force of such a protocol, only the autographs of the head and the chairman of the meeting are sufficient, which makes it possible to indicate untrue number of voters for any decision.
  • To terminate the agricultural land lease agreement, it will be necessary to hold a general meeting of the legal entity-tenant (such a transaction will receive a significant status).
  • If the state registrar discovers the fact of unauthorized access to the registers using his identification key, he will have to immediately notify the Ministry of Justice about this.
  • Carrying out some actions in the Unified State Register will be possible without the services of a state registrar – using the portal of electronic services. So, it will be possible to independently register an individual entrepreneur, correct data, make changes regarding the activities of a legal entity (if all participants with the help of their signatures unanimously make a decision).

In addition to these changes, on July 6, the process of obligatory connection of notaries and state registrars to additional identification means began. This stage will last until September 4, after which the entry into the system will need to be confirmed by an SMS password. This, in turn, is due to the increasing frequency of hacker attacks on the computers of registrars and notaries. Despite the recommendations of the SBU and numerous seminars on computer security, many of them leave the USB flash drive with their access key to the registries in the computer and do not pull it out after the session ends: for hackers, this is easy prey, using which they themselves can make changes to the registries.

The second bill, which should get in the way of raiding in Ukraine, is registered under number 8773. It proposes to make significant amendments to the Criminal and Administrative Codes.

According to human rights activists, if in 50% of cases Ukrainians are lucky, snatching their property from the clutches of criminals and defending their rights in court, then they no longer care. Almost no one monitors the further process: whether the raiders were punished, whether it is adequate enough for the gravity of the crimes and the damage suffered. At the same time, it is almost impossible to bring “black registrars” and notaries to criminal liability, since it was impossible to prove intent in their actions: even if the Ministry of Justice received over a hundred complaints about the registration actions of an authorized person, the maximum that threatened him was disabling access to state registers … Now the legislators are proposing to amend 12 articles of the Criminal Code, which are intended to both increase the punishment and make it inevitable (as far as possible in Ukrainian realities). Among other things, the text of the document calls for attributing to the category of serious crimes under the articles “Abuse of official powers by persons providing public services” (including notaries and state registrars), as well as “Official forgery”.

Some lawyers believe that this is too radical measure; others argue that without such a step, the whole fight against illegal registration actions will lose its meaning. Investigation of grave crimes allows for covert investigative actions, without which it is now impossible to fix the entire chain of crimes, from the initial forgery of a document to the ultimate beneficiary. Along with others, the bill proposes a number of changes in the life of raiders:

  • for persons submitting fake documents for state registration, fines are increased 10 times (from 5 to 10 thousand tax-free minimum citizens);
  • the disposition of articles for forging documents that must be submitted for state registration, abuse of office, as well as official forgery is expanding;
  • a number of articles, in addition to fines, include punishment in the form of imprisonment for up to 7 years;
    notaries and registrars who participate in raider attacks (a crime committed by a group of persons, causing damage on an especially large scale, in case of abuse of official powers) are subject to a fine from 20 thousand to 40 thousand tax-free minimums.

In addition to such innovations, two more articles of the Administrative Code are being expanded: Art. 92 “Violation of the legislation on the National Archival Fund and Archival Institutions” establishes punishment for illegal transfer, damage and concealment of notarial documents.

According to human rights activists, these are not the last documents that they are going to propose to the MPs for consideration. However, changes in legislation in all areas are belated in the fight against the consequences, so there is no need to talk about the final victory over raiding: while the committees are considering the texts of the amendments, the criminals are already looking for new loopholes.

“For some tangible changes, it is necessary to change the foundations of the system that allows cheating. Black registrars are only its consequence, the roots of raiding are in the officials of the Ministry of Justice themselves, and the soil is the corrupt nature of state governance. So the fight against raiding in Ukraine, in my opinion is still cosmetic in nature, sometimes reaching the point of absurdity,” Dmytro Fomenko concludes with irony.

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