Riding the Anti-Corruption Tide

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Riding the Anti-Corruption Tide #7 (113) July 2017 What kind of land reform Will Ukraine lose the transit Updates on Ukraine’s captives will boost the economy of Russian gas in Russia and Crimea RIDING THE ANTI-CORRUPTION TIDE WWW.UKRAINIANWEEK.COM Featuring selected content from The Economist FOR FREE DISTRIBUTION CONTENTS | 3 BRIEFING 32 So many suspects, so little evidence: 4 The very costly secret: Ukrainian prisoners The pitfalls of Yanukovych’s in Russia and Crimea $1.5bn case 34 Ihor Luniov: “Our enemies no longer sleep tight” Commander POLITICS of Ukraine’s new Special Operations 7 Farmers vs agriholdings: Forces on progress, plans What kind of land market 36 Martin Brest: “Victory is not possible Ukraine needs until the people start to truly love 10 The Holy Grail: Who wants a change their military“ of Ukraine’s Constitution, and why Veteran and blogger on problems 12 Pre-Constitutional changes: and spirit in the Army, veteran What preceded the 1996 Constitution activism and life after war FOCUS NEIGHBOURS 16 A new kind of sport: 38 The crossroads of the new Silk Road: Why the trend of fighting government Kazakhstan is open for business corruption yields no visible results but only half-ready for it 18 Numerical anti-corruption: 40 Michael Binyon on the UK’s sense Scores in international rankings and of loss as Brexit talks start reports by domestic law enforcers 42 Gerardo Ángel Bugallo Ottone: “The image and ideas we project and ECONOMICS discuss today are not dissimilar 20 No transit, no cry: Dealing to the ones discussed during WWII” with the termination of Russia’s gas Ambassador of Spain on his country transit through Ukraine in 2019 in the EU, eurooptimism 24 Oil for food: How Ukraine should and relations with Ukraine behave in further economic interaction with Russia HISTORY 46 Riding the currents: SOCIETY The history of Dnipro 28 One-on-one with the war: CULTRE & ARTS Who is helping civilians affected 50 Open-air classics, underground art by the fighting and evolution of Ukraine’s fashion: 30 Stuck in the dark: Civilian hostages The Ukrainian Week offers in the occupied parts of the Donbas a selection of events to attend in July E-mail [email protected] www.ukrainianweek.com Tel. (044) 351-13-00 The Ukrainian Week #7 (113) July 2017 Office address Kyiv, Ukraine, 36A, vul. Bohdana Khmelnytskoho, apt. 3 Founder ECEM Media GmbH. Publisher ECEM Media GmbH Print run 15 000. Free distribution Address Austria, Am Gestade,1, 1010 Vienna Our partner State registration certificate КВ № 19823-9623ПР 19.03.2013 Chief Editor Dmytro Krapyvenko Editors Anna Korbut, Lidia Wolanskyj #7 (113) July 2017 | THE UKRAINIAN WEEK THE UKRAINIAN WEEK | #7 (113) July 2017 BRIEFING The very costly secret Andriy Holub t’s been more than two months since Prosecutor General Yuriy Lutsenko announced that US $ 1.5 billion of “money belonging to the Yanukovych crime syndicate” had been confis- cated. The money had barely been transferred into the Treasury when ATO Prosecutor Kosti- Iantyn Kulyk, who Lutsenko says was in charge of this investigation, was awarded the Presi- dential Order “For Service” III Degree. Official sources still offer little information about the details of this case. On April 28, Lutsenko announced that one of the members of the “Yanukovych crime syndicate” had cut a deal with the investigators to reveal the way the organization operated and to name other members. Based on this plea bargain, the court was able to confiscate “nearly US $1.5bn from the accounts of several companies. However, the Single Registry of Court Rulings (SRCR) contains the ruling of the Donetsk Oblast Court of Appeals in a suit brought by six Cypriot and Swiss companies who challenged the March 28 UNIAN PHOTO: #7 (113) July 2017 | THE UKRAINIAN WEEK 6 | BRIEFING | decision of the Kramatorsk District Court. This docu- swers to at least some of the questions ignored the meet- ment makes it clear that what is being challenged is this ing. According to TI Ukraine representative Andriy Sliu- plea bargain with the investigation that brought the PG sar, this raises doubts about the presence of a predicate so much glory. The seven foreign companies are the offense in this high-profile case. In other words, accusing owners of some of the confiscated accounts. Accord- someone of laundering money that was gained by illegal ing to the agreement, the suspect admitted his guilt in means is only possible after the “illegal provenance” of two crimes. One of these involved participating in the the money has been proven in a court of law. criminal syndicate, the other involved laundering mon- “By law, the court is not supposed to recognize the ey that had been gotten through illegal means. This agreement with the investigation if there is no objective is about as much as can be learned from open official evidence of a crime,” says Sliusar. “But the problem is sources. Incidentally, the Appeals Court denied the sev- that the court ruling has not been published, so the ar- en companies the right to a second hearing in the case. guments used by the judges in the case are not known.” Far more can be learned from unofficial, but equally MP Serhiy Leshchenko, who was at the commit- open sources. The name of this “member of the Yanu- tee meeting, noted that even a request by MPs to make kovych crime syndicate” did not manage to remain se- the court ruling available was denied. Nevertheless, he cret for even a day. By evening on March 28, the press somehow managed to get his hands on the decision. “I got its hands on several pages from the Kramatorsk can say openly that I have seen the ruling,” Leshchenko court ruling, which not only mentioned the suspect by says. “There are two parts. The first is about Kashkin and name as Arkadiy Kashkin, but also his residential ad- Gas Ukraina-2020. The second is a description of the dress and the names of several companies whose money money-laundering scheme involving the Yanukovych was confiscated. It appears that Kashkin was the fictive crime syndicate. But there is no link between the two.” director of Gas Ukraina-2020 in Serhiy Kurchenko’s Meanwhile, Leshchenko is not revealing his sourc- circle, for which he had already been tried in 2015, also es. However, the SRCR contains other court rulings based on a plea bargain. At that time, Kashkin admit- that generally point to the scheme Leshchenko men- ted that he sold his passport for US $500, after which tions. From March until the end of May this year, the he was made director of the company. This crime cost Komintern District Court in Kharkiv ruled on at least him UAH 51,000 in fines, nearly US $2,000. five cases involving Kashkin’s “colleagues”—other fic- tive directors of companies related to Kurchenko. In contrast to the Kramatorsk Court ruling, there weren’t AN ECHR DECISION THAT GOES AGAINST UKRAINE any special confiscations but they also involved plea- COULD PUT A FINAL END TO ANY ATTEMPTS bargaining and contain detailed descriptions of how the Yanukovych-Kurchenko group organized their crimes— TO LEGALLY RETURN YANUKOVYCH’S MONEY. without reference to any court rulings that might con- IT MIGHT HELP OFFSHORE COMPANIES HAVE THEIR firm this. There is also a list of over 400 companies MONEY LAUNDERED through which money was supposedly laundered. Of them, at least 140 are registered in Cyprus, Switzerland, Panama and other offshore zones, including the ones The companies whose names became known to- already known to have been subject to confiscation. gether with Kashkin’s, according to the SRCR, were Of course, not all of these 140 companies kept money involved in other criminal cases as well. Some of them in Ukrainian bank accounts. Still, a significant number were first noticed back in 2014 in the material evidence of them had such accounts and lost their money after the in a case charging former NBU Governor Serhiy Arbu- Kramatorsk case. The list includes the seven companies zov with money-laundering through a “Bank TV” that that tried to challenge this ruling in an appeals court: he set up under the central bank. As of the end of May Wonderbliss LTD, Erosaria LTD, Aldoza Investments 2017, this case remains unresolved. Later on, these Limited, Opalcore LTD, Akemi Management Limited, companies appear in a case about billions in machina- Loricom Holding Group LTD, and Foxtron Networks tions involving domestic government bonds (OBDP), Limited. Dmytro Shcherbin, who represents three of the supposedly with the participation of top officials in firms, says that after the Donetsk Oblast Court of Ap- the Yanukovych regime. So far, there’s no information peals denied them a hearing, the lawsuit has been passed about a final judgment in this case, either. on to a cassation court, Ukraine’s High Specialized Court. However, the PGO and its boss, Yuriy Lutsenko, He adds that neither he himself nor his clients have seen continue to earnestly maintain the “secret of Polichi- the full text of the Kramatorsk ruling. When asked if nelle” in the full text of the Kramatorsk District Court’s his clients will resort to the European Court of Human ruling. Officially, the military prosecutor has forbidden Rights, Shcherbin responds, “If the cassation court re- the publication of the ruling for security reasons. Even jects our case, of course, we will turn to the European without this, though, it’s hard to give a final answer to Court. No question about that.” the $64,000 question: What kind of information about According to TI Ukraine’s Sliusar, an ECHR deci- hypothetical deals involving Yanukovych, Kurchenko sion that goes against Ukraine could put a final end to and Co.
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