On 24 January 2025, Members of Parliament registered Draft Law No. 12439 ‘On Amendments to the Criminal Procedure Code of Ukraine to Improve Safeguards for Business Entities during Criminal Proceedings’. On 25 February, it was adopted at first reading, and on 27 August, the Verkhovna Rada Committee on Law Enforcement recommended that the draft law be adopted in full. On 1 September, the comparative table for the second reading was published.
Context
The draft law was prepared in line with the decision of the NSDC of 23 January 2024, ‘On Urgent Measures to Ensure Economic Security during Martial Law’. That decision recommended establishing additional safeguards for protecting the legitimate interests of entrepreneurs in the course of criminal proceedings. Furthermore, the Decree of the President of Ukraine No. 30/2024 of 26 January 2024 established the Council for Entrepreneurship Support under Martial Law as an advisory body to the President of Ukraine.
According to the explanatory note to Draft Law No. 12439, members of the Council for Entrepreneurship Support, together with business representatives and relevant experts, have been regularly reviewing and addressing problem situations faced by the business community during the performance of law enforcement agencies’ duties. Based on the results of these in-depth discussions, the corresponding draft law was prepared.
Against this background, business associations supported the draft law at its first reading. However, the version prepared for the second reading, while preserving the main idea of the draft law, was supplemented with provisions that have raised concern. At present, it is being criticised by civil society organisations (Transparency International, the Centre of Policy and Legal Reform, the Anti-Corruption Action Centre, ‘Mezha’, Automaidan, the Centre for Investigative Journalism, and others). Government bodies — the NABU, the SAPO and the ESBU — have also joined in the criticism. The Agency for Legislative Initiatives has weighed in with its own analysis.
Content Analysis
Draft Law No. 12439 introduces amendments to both the Criminal Code and the Criminal Procedure Code of Ukraine. However, the title of the draft law makes no reference to changes to the Criminal Code, thereby violating Article 116 of the Rules of Procedure of the Verkhovna Rada of Ukraine.
The proposed changes are highlighted in italics below, followed in each case (or group of changes) by an assessment from the Agency for Legislative Initiatives.
It is proposed to supplement the Criminal Code of Ukraine (CC of Ukraine) with Article 41-1 ‘Compliance with Official Positions of State Authorities’, reading as follows: ‘An act committed by a person on the basis of explanations provided by authorised central executive bodies regarding the application of tax legislation, customs legislation or legislation on public procurement shall not constitute a criminal offence’.
This provision of the draft law undermines established approaches to determining the legitimacy of circumstances that exclude the criminality of an act. Under it, a person could avoid criminal liability for tax evasion, smuggling, abuse of office and similar offences if there is an explanatory note from a state financial control body (the Ministry of Finance of Ukraine, the Accounting Chamber, the State Audit Service of Ukraine, the State Tax Service of Ukraine, the State Customs Service of Ukraine, the Antimonopoly Committee of Ukraine, or other central and local executive authorities exercising control within their competence). Such an explanation may contradict both current tax, customs or public procurement legislation and the interpretation issued by another state authority.
Approaches to the extensive interpretation of legal norms are contested in legal theory. At present, the power to interpret laws lies with the courts when adjudicating specific cases, and conclusions on the application of law set out in rulings of the Supreme Court are binding on all public authorities applying the relevant legal provision in their work (Part 5 of Article 13 of the Law of Ukraine ‘On the Judiciary and the Status of Judges’). In other words, any narrowing (for instance, in case No. 415/2182/20 concerning the perpetrator of the crime of aggression) or broadening (for instance, in case No. 453/225/19 concerning domestic violence) of a legal norm must be carried out by the Supreme Court, drawing on judicial practice. Granting such powers to executive authorities is a misstep not only from a theoretical standpoint. It also creates opportunities for abuse, when the necessary ‘explanations’ may be obtained through corrupt means and become part of schemes to circumvent the law.
As the Economic Security Bureau of Ukraine notes: ‘Explanations provided by authorised bodies would become not merely proof of good faith in court, but an automatic “alibi” that blocks the very initiation of criminal proceedings. Such explanations could be obtained regarding tax, customs or public procurement legislation. This would not only create unequal conditions for businesses but also increase corruption risks’.
Key Amendments to the Criminal Procedure Code of Ukraine (CPC of Ukraine):
- On the Legal Status of the Victim
1) The provisions regulating the legal status of the victim in criminal proceedings are improved by granting the right to receive written information on the nature of suspicion and charges, to collect evidence, and to obtain without delay an extract from the Unified Register of Pre-trial Investigations, as well as the resolution initiating a pre-trial investigation.
2) The investigating judge, the trial judge and the victim are granted the right to initiate an expert examination in criminal proceedings.
The legal status of victims in criminal proceedings is indeed not secured by sufficient guarantees of participation. For a long time, victims remained outside the focus of the criminal justice system, with noticeable change only recently in cases of war crimes. In other categories of cases, however, the retributive approach still prevails over the victim-centred one. In other words, the state places greater emphasis on punishing the offender than on restoring the victim’s rights and compensating for harm. As a result, there are persistent problems such as poor communication between victims and law enforcement agencies, practices that lead to secondary victimisation and similar issues.
The 2020 study ‘Rights of Victims of Violent Crime in Ukraine’ set out a series of recommendations providing such guarantees to victims, including the possibility of initiating expert examinations before an investigating judge or court. Accordingly, part of these recommendations is proposed for implementation in the CPC of Ukraine through Draft Law No. 12439, which can be regarded as a positive aspect of the draft law.
- On Property Issues:
3) The procedure for recognising a material object as physical evidence is clarified, in particular regarding the time limits for issuing such a ruling. The rules governing temporary access to items and documents, their legal status, and the execution of such orders are also refined.
4) The method of recording the course and results of a search is specified by adding provisions granting the defence counsel, the victim, their representative or legal representative the right to record the course and results of a search freely by means of audio or video using any available devices.
5) The list of documents to be attached to a motion for the seizure of property is expanded. These include documents confirming the delivery or dispatch of a copy of the motion for seizure of property to the suspect, the accused, another owner or holder of the property, or to their defence counsel, legal representative, representative or civil claimant. Such motions may be considered in the absence of the prosecution if they fail to appear without a valid reason.
The seizure of property is one of the most problematic aspects for businesses and is widely criticised as a practice of ‘pressuring business’. This is particularly acute in wartime, when enterprises operating in the defence industry face heightened scrutiny — including scrutiny of their contractors — that often ends in indefinite freezing of accounts, effectively paralysing economic activity. Property seizure is a relatively straightforward procedure for law enforcement, since investigating judges generally grant such motions. By contrast, lifting a seizure is an extremely difficult process due to the absence of clear time limits and the lack of initiative from law enforcement bodies and the prosecution. The introduction of a maximum four-month period for freezing funds, with further extension allowed only by a reasoned court ruling, is a positive step towards countering the practice of ‘perpetual seizures’.
Favourable changes also include provisions under which, if a court has already refused a motion for seizure of property or for a preventive measure, law enforcement bodies may not submit the same motion again without new grounds (Part 8 of Article 132 of the CPC of Ukraine). A motion for temporary access to items and documents must now be considered within a maximum of 15 days. If the party that filed the motion fails to appear at the hearing, it will remain without consideration (Parts 4 and Part 8 of Article 163 of the CPC of Ukraine). Where the seizure of property has been lifted, the property must be returned to its owner no later than 30 days. This provision is intended to put an end to the practice of delaying the return of property — for example, by sending it for ‘expert examination’ (Part 5 of Article 174, Article 175 of the CPC of Ukraine).
Taken together, these changes are generally positive. However, attempts to solve problems with property seizure by amending the CPC of Ukraine — beginning with the ‘Maski-Show Stop’ laws Nos. 1, 2 and 3 since 2017 — highlight the limits of such legislative measures. There is also a need to develop proper disciplinary practice within law enforcement and prosecutorial bodies, holding them genuinely accountable in cases of delay, abuse and similar misconduct.
- On Measures to Secure Criminal Proceedings:
6) The provisions governing the general rules for applying measures to secure criminal proceedings are improved. In particular, the powers of the investigating judge or the court are detailed, allowing them — when considering a motion for the application of such measures at the request of the parties or on their own initiative — to question the suspect, the accused, a witness, the victim or an expert, or to examine any items or documents relevant to deciding the motion.
These legislative proposals appear excessive and inconsistent with the principles of criminal procedure. The draft law proposes to expand the powers of the investigating judge and the court by granting them the right to summon witnesses and experts and to examine items when deciding on motions to apply measures to secure criminal proceedings (Part 6 of Article 132 of the CPC of Ukraine), for example, when ordering the seizure of property. Such powers go beyond the impartial role of the court in an adversarial process and move towards the ‘active’ court of the inquisitorial model, where the judge does not simply evaluate the evidence presented as a neutral arbiter but actively shapes its scope — for instance, by requesting additional materials. For this reason, these amendments must be regarded as negative.
- On the Initiation of Criminal Proceedings:
7) Applications reporting the commission of a criminal offence must now ‘contain sufficient data on circumstances that may indicate the commission of a criminal offence’ (amendments to Articles 214 and 303 of the CPC of Ukraine)
In effect, this represents a return to the 1960 CPC of Ukraine, which distinguished between grounds and reasons for initiating a criminal case (opening a pre-trial investigation). This issue has long been debated in academic literature and professional circles and became known as the ‘abolition of the automatic initiation of criminal proceedings’.
Previously, the ‘filtering’ of unpromising crime reports was carried out through the institution of initiating a criminal case. This allowed, by means of a preliminary inquiry (Article 97 of the 1960 CPC of Ukraine), a refusal to initiate proceedings if a statement or report contained no grounds or reasons for doing so. A major step in criminal procedure reform was the abolition of this institution and the introduction of the Unified Register of Pre-Trial Investigations, into which all crime reports were to be entered, with criminal proceedings automatically initiated on their basis (Article 214 of the 2012 CPC of Ukraine). In other words, investigators, inquiry officers and prosecutors were not supposed to establish the four elements of a criminal offence or search for evidentiary information but simply to register the report of a crime as a matter of fact (an allegation that it had been committed).
In practice, the ‘automatic’ procedure helps prevent the non-registration of crime reports, a widespread problem given that failures to register criminal proceedings based on victims’ complaints remain significant. Registration figures continue to affect evaluations of law enforcement performance, which are often judged by statistical indicators expected to show constant growth. As a result, victims of offences such as bodily injury, theft, robbery and fraud have had a greater chance of seeing justice. At the same time, these provisions are viewed negatively by business representatives, since the ability to initiate criminal proceedings without sufficient grounds enables the use of criminal justice as a tool for exerting pressure on businesses.
Both positions have their strengths and weaknesses. However, the overall logic of the 2012 CPC should remain unchanged: if the fact of a criminal offence is not confirmed, the criminal proceeding must be closed. The question then becomes an organisational one — what materials are required, who exercises oversight, and how much time and resources the process takes. Most of these problems stem not from the criminal procedure framework itself but from enforcement and organisational practice.
In this regard, the draft law advances an unbalanced approach to protecting business by reverting to the ‘filtering’ practices of the 1960 CPC. This would harm other categories of proceedings, particularly victims of common crimes. Accordingly, such proposals should be regarded as negative.
- On Jurisdiction and Case Registration by the ESBU:
8) A suspect, their defence counsel, or the representative of a legal entity under investigation is granted the right — if circumstances are identified during the pre-trial investigation confirming a violation of investigative jurisdiction — to file a motion with a higher-level prosecutor requesting a change of jurisdiction (amendments to Article 216 of the CPC of Ukraine).
9) Information on offences under Article 191 of the CPC of Ukraine may be entered into the Unified Register of Pre-Trial Investigations only by the head of a prosecution body (amendments to Article 214 of the CPC of Ukraine).
Jurisdiction over criminal offences essentially concerns specialisation: as a rule, all criminal offences are investigated by the police. In cases defined by the CPC of Ukraine, however, specialised bodies take over — such as the SSU, the NABU, the SBI and the ESBU. The prosecutor may change jurisdiction if an authority is ineffective — for instance, if a particular body (such as the ESBU) lacks sufficient resources — or due to other priorities, such as the SSU’s focus on war crimes.
Since 2012, however, jurisdiction in Ukraine has increasingly become a rigid mechanism for assigning specific ‘criminal procedure work’ to a specific body, leaving little flexibility. This trend has been reinforced by changes regarding NABU’s ‘exclusive jurisdiction’ and the special rule that only the Prosecutor General may assign cases to the ESBU (Part 5 of Article 36 of the CPC of Ukraine). At the conceptual level, the Rule of Law Roadmap (the key EU integration document in this area) provides for amendments to the CPC of Ukraine in the fourth quarter of 2027 to improve the institution of jurisdiction. These are expected to include: clear delineation of the investigative powers of pre-trial investigation bodies; a clear procedure for transferring cases from one investigative authority to another; and the introduction of liability for prosecutors for violations of jurisdiction. Similar provisions are contained in the Action Plan for the Overarching Strategic Plan for Reforming Law Enforcement Agencies for 2023–2027, adopted in 2024.
Thus, instead of working together with the Government on a comprehensive solution to the problem of jurisdiction, Members of Parliament propose only a partial fix in the form of allowing motions to change jurisdiction. Yet the grounds for considering jurisdiction to have been violated may not always be substantiated due to lack of information — for example, the absence of details on the resolution changing jurisdiction or the reasons for it. The effectiveness of this tool in addressing the broader problem is minimal. In any case, the issue of jurisdiction requires a comprehensive solution.
Continuing the idea of ‘adjusting jurisdiction’, it is proposed to grant only the head of a prosecution body the authority to register crimes under Article 191 of the CC of Ukraine (offences in the sphere of economic activity committed by officials of a business entity). At the same time, except for a business entity in which the share of state or municipal ownership in the authorised capital exceeds 50 per cent (jurisdiction of NABU). Thus, this provision concerns exclusively the jurisdiction of the ESBU.
The Constitution of Ukraine (Article 131-1) defines the prosecutor as the direct organiser and procedural supervisor of pre-trial investigation. The prosecutor is responsible for the investigation strategy and makes the key decisions in criminal proceedings (notification of suspicion, application to the investigating judge regarding measures to secure proceedings, submission of the indictment to the court), since it is the prosecutor who conducts the public prosecution in court. Unlike the ‘passive’ model of the prosecutor, who only supervised legality under the 1960 CPC, the current CPC provides for the presence of the prosecutor ‘from the beginning to the end of the investigation’.
In this regard, it should be noted that regardless of who enters the information into the URPTI, in ESBU cases, the prosecutor (a group of prosecutors) will, in any case, be appointed by the head of the prosecution body. Thus, there cannot be a situation in which investigators independently enter information into the Register and conduct the investigation, since from the very beginning it is necessary to interact with the prosecutor — especially for adopting any procedural decisions that affect the rights and freedoms of the subject of criminal prosecution.
Therefore, the proposed provision, on the one hand, corresponds to the conceptual foundations of the CPC of Ukraine, although it is unclear why it is established exclusively for ESBU proceedings under Article 191 of the Criminal Code of Ukraine. This inconsistency is rightly pointed out by the Bureau itself. At the same time, a special procedure for registration is provided only for special subjects (Article 481 of the CPC of Ukraine), such as Members of Parliament. That is why it is necessary to speak of a comprehensive solution to the issue of jurisdiction and the relationship between the pre-trial investigation body and the prosecution, since such amendments appear selective and have a hidden purpose.
The hidden purpose may be ‘additional control’ over ESBU proceedings. On the one hand, this would appear to protect businesses from abuses by the ESBU; on the other hand, if the prosecutor sees the materials first, then in cases of distrust towards the prosecutor and situations where ESBU detectives must act quickly, this could harm the proceedings. These and other scenarios that could be modelled go beyond the scope of procedural law. Preventing such violations should take place at the level of disciplinary liability, anti-corruption restrictions, professional ethics and the application of internal control mechanisms.
In view of this, we consider that such amendments to Article 214 of the CPC of Ukraine may negatively affect the independence of the ESBU and, therefore, its effectiveness. Moreover, the prosecutor who exercises procedural supervision in ESBU cases already has full control powers over the proceedings, since they appear in it immediately after the information is entered into the URPTI. What the hidden purpose of granting the prosecutor such powers may be can only be guessed. Thus, such amendments are negative.
- On Searches:
10) The grounds for urgent searches (Part 3 of Article 233 of the CPC of Ukraine) are narrowed. An urgent search is possible only in the case of the immediate pursuit of persons suspected of committing a serious or especially serious crime provided for in Section I (Articles 109, 110, 111, 112–114-1), Section II (Article 115), Section VII (Article 201), Section IX (Articles 257, 258, 260, 265-1, 269), Section XIII (Articles 305, 307), Section XIV (Articles 328–332-2), Section XV (Articles 345–347, 348–350), Section XVII (Article 368) of the CC of Ukraine.
11) A motion for the legalisation of the results of an urgent search must be submitted without delay, but no later than 72 hours (previously — simply ‘without delay’). The motion is considered by an investigating judge with the participation of the owner of the property temporarily seized during such a search, the owner of the dwelling or other possession in which the search was conducted, or their representatives.
The proposed changes in this part of the draft law can generally be assessed positively, especially since they aim to implement the ECtHR judgment in Korniyets and Others v. Ukraine (July 2025). However, concern is caused by the removal of such a constitutional ground as ‘saving property’ (Article 30 of the Constitution of Ukraine), under which, according to the position of the Supreme Court, material evidence is understood. Previously, an urgent search could be conducted in cases related to (1) saving human life and property or (2) the immediate pursuit of persons suspected of committing a criminal offence. If the draft law is adopted, the grounds for ‘saving property’ will be removed.
Such narrowing appears unnecessary given that abuses of this ground should have been neutralised by the legalisation of search results by an investigating judge — especially in the event of adoption of the draft law, with the participation of the person (or persons) whose property was searched or their representatives. However, in certain proceedings where there is information precisely about the threat of destruction of material evidence, for example, in NABU cases, such narrowing of grounds may create significant problems and lead to ineffective investigation. In addition, it will make it impossible to conduct an urgent search in cases concerning the offer, promise or giving of a bribe, or abuse of influence, without a relevant ruling by an investigating judge.
In any case, the problem of urgent searches requires comprehensive changes not only of a procedural nature but also at the institutional and enforcement level.
- Familiarisation with Materials:
12) The procedure for familiarisation with pre-trial investigation materials before their completion is detailed. The list of decisions that may be appealed during pre-trial investigation is expanded, including the decision of an investigator, inquiry officer or prosecutor to refuse a motion for familiarisation with pre-trial investigation materials under Article 221 of the CPC of Ukraine.
Familiarisation with pre-trial investigation materials is an important stage of criminal proceedings, since without it, it is impossible to fully form the defence’s position in an adversarial process. Moreover, at the stage of pre-trial investigation, partial disclosure of case materials is possible (before their completion). Addressing these issues, given the practice of pre-trial investigation, is an important step in strengthening guarantees for business in criminal proceedings, which is the aim of the legislative initiative. Such changes are positive.
Overall Assessment
Draft Law No. 12439 represented a consolidated position of business communities, lawyers and criminal justice specialists regarding the resolution of regulatory problems in criminal proceedings involving business. It was developed pursuant to the decision of the NSDC of January 2024, following a comprehensive discussion of problems with unlawful ‘pressure’ on business by the Council for Entrepreneurship Support under the President of Ukraine. The version of Draft Law No. 12439 adopted at first reading in February 2025 fully achieved its declared aim of protecting business, although it was not without shortcomings.
However, by the second reading, the main negative changes were introduced — (1) granting executive authorities the power to determine in certain cases what constitutes a criminal offence (by issuing explanations), and (2) narrowing the independence of the Economic Security Bureau of Ukraine in criminal offences under Article 191 of the CC of Ukraine that fall within its jurisdiction.
Thus, a tactic has been applied that has become quite common in Parliament recently — to submit for consideration large-scale draft laws that contain provisions desirable for certain groups in society. In this case, the draft law contains a significant number of positive changes desired by the business community, to which controversial provisions have been added concerning the ESBU, the initiation of criminal proceedings, the impartiality of the investigating judge and the court, granting executive authorities the power to interpret legal norms, narrowing the grounds for urgent searches in cases requiring the saving of property, which undermines the effectiveness of anti-corruption proceedings, and so on.
In view of this, the draft law cannot be adopted at second reading in its current form and requires substantial revision — first of all, the removal of the negative amendments introduced for the second reading, as well as adjustment of the wording of certain provisions of the legislative initiative supported by the Verkhovna Rada of Ukraine at first reading, in order to avoid an imbalance in criminal procedure.
