When Sviatoslav Piskun was reinstated as Prosecutor-General, the position from which he was dismissed in 2003, he reestablished the department tasked with combating criminal money laundering.
The departmental staff is very determined. According to department chief Hanna Tsyhanenko, 194 cases have already been opened under Article 209 of the Criminal Code, which deals with illicit money. During a selective audit of businesses that had instructed banks to purchase money from other states, they managed to launch 6 court cases to investigate the laundering of this money through banking institutions in Kyiv. Ms. Tsyhanenko refuses to reveal the names of these businesses and banks on the grounds that the banking system is frail and needs peace, which may be jeopardized by gratuitous comments.
On the other hand, the Prosecutor-General’s Office is not going to stand on ceremony with this illicit capital. Ms. Tsyhanenko told the press that approximately 1 billion dollars’ worth of private and public capital was smuggled out of Ukraine in November-December 2004 via banking and other financial institutions. The Prosecutor-General’s Office of Ukraine has now launched six court cases. Ms. Tsyhanenko has not ruled out the possibility that the number of cases will increase because the audit is still underway. “There were very many smuggling schemes. We are now unraveling them,” Ms. Tsyhanenko said.
While the investigation is in progress, it is impossible to determine who is to blame for money laundering. When she was asked if any well-known names are involved in the outflow of capital, Ms. Tsyhanenko replied in the affirmative. She also pointed out that the Prosecutor-General’s Office has not instituted any politically-motivated criminal proceedings related to illicit money.
This may be so, but Andriy Trypilka, chief of the Prosecutor-General’s department responsible for protecting the state’s financial and economic interests, noted that his staff is concentrating on the mining and metallurgical complex, mainly concentrated in the six regions that displayed well-known preferences during the presidential elections. The reason for the audit was the unlawful schemes devised by these enterprises.
According to Mr. Trypilka, enterprises belonging to the former Ukrrudprom association should be closely scrutinized. One ore-dressing mill (ODM) used to sell its products on the domestic market at reduced prices, which dealt a serious blow to the state budget. Mr. Trypilka also mentioned the audit of another ODM that “supplied metal products through quite an intricate scheme.” The customs service says that, although this ODM’s products have never been exported, the enterprise has already received a VAT refund.
There seem to be no grounds to accuse the Prosecutor-General’s Office of a biased attitude toward the businesses that earlier ran the risk of being reprivatized. However, such actions and audits suggest that if the Ukrainian state sues enterprises for additional payments, it will be able either to hike the amount payable or confiscate the enterprise. The question is to decide in whose favor the confiscation should be carried out.
