Markiyan Bem, a partner at the Nazar Kulchytskyy and Partners Law Firm, delivered a speech at the XII Annual Forum of Corporate Counsel, held on October 30 and organized by the Yurydychna Praktyka Publishing House. Markiyan Bem’s speech focused on managing seized assets and the challenges of maintaining the proper functioning of “sanctioned” businesses in the context of war.
Photo: Pravo.ua
“There is no doubt that sanctions and sanction laws are necessary. Nor is there any doubt about the need to apply sanctions to individuals supporting Russia’s aggressive policies. It is entirely logical to confiscate assets belonging to such individuals in Ukraine. Otherwise, an absurd situation arises where funds generated in Ukraine are used in the war against Ukraine. However, it is crucial to apply sanction laws to avoid backlash, such as appeals to international organizations, investment arbitrations, and the European Court of Human Rights,” Bem emphasized.
The sanction of “confiscation for the benefit of the state” is the most severe and has been in effect for over two years. Straightforward cases have been exhausted; most remaining cases are significantly more complex. These cases involve assets structured entirely in offshore jurisdictions, for example. A common practice has been to transfer such companies’ assets to the Asset Recovery and Management Agency (ARMA). However, Bem argues that the professional institution of asset managers is ineffective, and those interested in managing such assets fall into two categories: those who plan to acquire them or those who seek to degrade them.
Bem raised a controversial issue regarding confiscating assets where only a portion belongs to sanctioned individuals. The Ministry of Justice files claims to confiscate 100% of such assets for the state, violating the rights of individuals not under sanctions. For instance, in the Shell case, the High Anti-Corruption Court ruled to confiscate 100% of the assets; however, following Shell’s petition, the company’s share in the Ukrainian asset was returned. Another example is the case involving the mineral water producer IDS: 49% of the assets belong to sanctioned individuals, while 51% belong to those not under sanctions. Yet, despite existing alternative practices, the Ministry of Justice seeks a court ruling to confiscate 100%.
Additionally, in the forum session “WCC Realities and Business Protection,” speakers and participants discussed:
- ● Trends in criminal offenses in the business sector
- ● Issues in the interaction between businesses and law enforcement agencies
- ● Standards of prosecutorial activities in the protection of investments
- ● Searches, asset seizures, and response strategies
- ● Compliance and the growing responsibility of companies for corruption
- ● Protection of top management in criminal cases
- ● Mechanisms for protecting third-party property rights and analyzing proposed legislative changes
- ● The Ministry of Justice’s anti-raiding efforts
Photo: Pravo.ua