CMS Expert Guide To Mandatory Reporting Of Criminal Offences For Companies And Their Responsible Persons in Ukraine

Article 396 of the Criminal Code of Ukraine (“CCU”) provides for the criminal liability for concealing of severe or extremely severe crimes. The crime is considered severe if the sanction for it envisages a fine in the amount of more than UAH 170,000 (approximately EUR 4,000) or a prison sentence of more than five years (part 5 of article 12 of the CCU). The sanctions for the extremely severe crimes are even more serious.

At the same time, in Ukraine there is no separate direct criminal liability for non-reporting the crime (i.e. as opposed to concealing). In practice, however, non-reporting may fall within the scope of concealing offence depending on circumstances.

This is important because most white-collar crimes, such as fraud (article 190 of the CCU), property appropriation (article 191 of the CCU), tax evasion (article 212 of the CCU), accepting and offering bribes during business activity (articles 368 and 369 of the CCU), money laundering (article 209 of the CCU), abuse of official position (article 364 of the CCU), are punishable by fines exceeding  UAH 170,000 or imprisonment for more than five years (i.e. qualify for severe or extremely severe crimes).

Therefore, all these crimes may need to be reported to avoid concealing allegations, and the background facts potentially requiring such reporting need to be considered thoroughly on case-by-case basis.

In Ukraine, the company does not have the obligation to report the criminal offence. Accordingly, the company is not obliged to appoint a particular person to be specifically responsible for reporting crimes.

Under the general rule, the responsibility to report/not conceal a criminal offence is a responsibility of an individual in his or her personal capacity.  

The only connection of non-reporting/concealing the crime to the company in Ukraine may be if a person becomes aware of the offence while performing his or her duties as a company’s officer or employee. Still, even in such case the responsibility lies on individuals only.

If the criminal offence is concealed (i.e. not reported – as explained in clause 1 above), the liable individual may be prosecuted and convicted by the criminal court for concealment of a criminal offence. The liability for this offence is up to three years of imprisonment.

It shall be also noted that family members and close relatives of the perpetrator cannot be held liable for concealing the crime, if this was not promised in advance (part 2 of article 396 of the CCU).

If the criminal offence is reported in good faith exercising the reasonable caution and attention, there is no associated risk even if the reported event turns out not to be a criminal offence, and the pre-trial investigation is eventually closed by law enforcement on this ground.

For the sake of full picture, in Ukraine there is the criminal liability for the knowingly false reporting of crime (article 383 of the CCU), but such offence requires clear evidence of the perpetrator’s intent (e.g. creating false evidence), and for this reason it is not viewed as constituting any risks for good faith reporting.

There is no accessory criminal liability for the company as, as mentioned, according to the Ukrainian criminal law the company cannot be prosecuted for concealment of a criminal offence – only individuals (including, officers or employees of the company, but in their personal capacity) can be prosecuted for this offense.