Igor Osyka, researcher University of Internal Affairs Kharkov, Ukraine organised economic crime problems in ukraine* icon

Igor Osyka, researcher University of Internal Affairs Kharkov, Ukraine organised economic crime problems in ukraine*

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Igor Osyka, researcher

University of Internal Affairs

Kharkov, Ukraine



Ukraine, like other countries of Eastern Europe, has been changing its economic system from a command to a market one. Ukraine became an independent State only in 1991, and currently is experiencing many difficulties in its economic and legal development. An important component of this is certain kinds of economic activities which turned out to be unprotected in terms of legislation and administrative regulations. Arguably, the absence of legislation encouraged the development of quantitative and qualitative changes of criminality, including ‘organised’ financial, computer and economic crimes (the latter including pollution and environmental offences).

According to the data given by the Ministry of Internal Affairs (further MIA), the economy has been criminalised greatly. The analysis of the structure and dynamics of economic criminality shows the straight growth of the quantity of economic crimes registered in the territory of the country from 1992 until 1998. For instance, in 1992 in Ukraine, 36,866 economic crimes were registered, rising to 65,322 in 1998, a rise of 73.9%. The growth of all crime in the country is just 20.4% for the same period, though from a larger base rate [1]. It is of course possible that some of this rise may be artificial, reflecting increased policing activity responding in turn to social concern rather than underlying crime itself: but there are no obvious changes in policing patterns, especially of a proactive nature, that could account for a large proportion of this rise in recorded economic crime. The new directions of the economic criminal activity which are connected with criminal aggression have appeared also.

The main reasons which are stimulating considerable expansion of criminality in the country have socio-economic roots. We can highlight such reasons as an inconsistency and subsequently a slowing down of the process of social and economic reforms; the presence of considerable overt and hidden unemployment; reduction in living standards of the majority of population, lack of resolution of the problems of property ownership, disorder in the process of privatisation; lack of co-ordination within the inland revenue, financial, investment, industrial, customs and excise and many other components of the economic policy of the State.

The active development of market relations, the appearance of new forms of property, and new opportunities in the sphere of private business have also been reflected in the structure and dynamics of economic crime. We also have many “white spots” in legislation, especially in the field of civil, economic and fiscal legislation, Criminal and Criminal Procedural Law which are abused very actively by criminals to launder their illegal proceeds and commit different kinds of economic crimes. During the process of the ”great privatisation”, the controlling share-holdings in those industries that are most important for the State could turn out to be held by criminals.

Shadow economy”

The process of the growth of the “shadow economy” has increased to half the legal economy, according to the opinion of the specialists. Criminals own a considerable capital, using corrupted State executives: they are striving for political power, possibly to influence the economic and political development of the State, but certainly to influence the local environment so as to minimise threats[2]. Illustrations at the local level include the murder of the Editor of an Odessa regional newspaper in 1997, and attempts to kill two more journalists and the kidnapping of another in Odessa. These crimes allegedly were part of the sharing of power between the mayor of Odessa and the Head of Administration of the President in the Odessa region, who are supported by leaders of organised criminal groups which are operating in the Odessa region. But at the national level, it is arguable that some are interested in what they can steal from internal investment due to loose laundering controls.

The existence of such a large percentage of “shadow economy” may slow down the process of development of private business, which has a rudimentary character in the State. This “shadow economy” is not just a black market: it includes the circulation of dirty money and goods and services that have evaded registration by the tax authorities. It is alleged by the tax authorities that 9 out of 10 existing companies are involved in tax evasion (which, with a 98 per cent tax rate, is not surprising) [2]. On one side there is the entrepreneur who needs cash and on the other hand, there is a criminal who owns considerable amounts of cash and needs bearer bonds to use it in legal business, so they prefer to by-pass the banking system. There is no doubt that honest business is losing the competition with criminalised ones, because the latter have more financial resources, with facilitated because of poor control by State executives, caused by the high level of corruption and the absence of any civil and financial regulations connected with combating money laundering in the State. Investment of laundered money into the legal companies and enterprises provide an opportunity to return the capital in a legitimately and generate an inexhaustible source of “clean” money (for covering of routine expenses), whether from lawful business or crime [3]. In short, there is a strong counterforce against the survival of honest entrepreneurialism in Ukraine, since criminal capital drives out legitimate business.


Corruption is the one most major reason which favours the growth of crime in the country. It has a very close connection with organised crime. All criminal groups which operate all over the country have some kind of protection which actually helps them to operate over a long time with little or no problems with law-enforcement. In Russian slang, such protection is called “roof”. This word reflects perfectly the functions of such protection. The “roof” is usually an executive of a variety of levels of power, including law-enforcement officers. Another meaning of “roof” could be a person who is respected in criminal society and again has an influence on somebody from executive power bodies: a sort of ‘fixer’. The main role of the “roof” is to help criminals to cover their criminal activities, avoid criminal liability and punishment, hide criminal proceeds, and enjoy some privileges.

In 1997 the Police and Service of security of Ukraine (further SSU) recorded 2,679 crimes which are defined as a corruption.§ This figure is considerably bigger in comparison with 1996. The government is working very actively under the Law and administrative aegis of the National Programme Fighting Corruption in the State. The realisation of the Programme has already had some results, but they remain insufficient The level of corruption is still very high. There were three main flows in the State’s policy and activity towards fighting corruption in the country. The first one is domination of power and administrative measures rather than prevention, especially situational prevention, “Actually we are fighting with consequences but not with conditions”,- stated V. Durdinec. Secondly the legislation which is directed at fighting corruption is poorly drafted and supported, and officials are reluctant to take action because of the fear of sanction for making a mistake in their investigation. And finally, there is the benign sentencing levels for corrupt executives. Quite often the Deputies of different levels are beyond the reach of the Law and law-enforcement agencies, because ‘intelligence’ is not evidence according to the Criminal Procedure Code and because of the absence of funds for a proper implementation of the witness protection programme, plus possible police corruption1. Permission of the Parliament is required before a Deputy can be arrested. This was refused in the cases like an MP who smuggling abroad $26,000; another MP who illegally set up currency bank accounts abroad, committed embezzlement and abuse of power and position; and another who beat up a colleague [4]. Such situation creates a serious threat for the political integrity and economic security of the State. In addition, it will demoralise active law enforcement officers, aggravating the situation.

Organised crime

The most dangerous manifestation of the economic criminality is its organised form, a view appreciated by Parliament and Government. Many steps have been made towards combating organised crime in the country. 30th of June 1993 “Administrative-and-Law Basis of Combating Organised Crime Act” was adopted by Ukrainian Parliament and signed by the President of Ukraine. Article 1(1) of the Act defines organised criminality as a “Totality of crimes which are committed in connection with the creation and activity of an organised criminal group”. Article 1(2) states: “Kinds and the main features of these crimes as well as criminal-and-law measures against the person who has committed such crimes are defined by the Criminal Code of Ukraine”. But unfortunately until now there is no definition of organised criminal group in the criminal Code. There are some definitions which concern criminal activity if a group of persons is involved. In the theory of criminal Law, the group of persons is defined as a unit of 2 or more persons conspiring for co-operative criminal activity (to commit one or more crimes); there is also a definition of banda (art.69 of CC) - a group of armed persons who conspired for the same aim for long term criminal activity; the group inside the prison population which conspired to commit a crime inside the prison or to defy prison authority (art.69-1 of CC); and illegal armed formation as a group of persons hired and armed by somebody with aim of protection of somebody’s interests (art.187-6 of CC). The characteristics of crimes defined in articles 69,69-1, 187-6 of CC is that criminal liability is provided even for membership of such groups. For Criminal Law it does not matter whether they together or somebody separated from the group committed a crime or not. The existence of such groups and membership of it is a crime.

But the organised criminal group in the sense of the above Act should be treated in different way because of the different social danger, characteristics and the nature of organised criminality as a whole. There are a lot of discussions about the definition of organised criminal group in the theory of Criminal Law now. We can provide the most wide-ranging one: an organised criminal group is a stable unit of 2 or more persons conspiring for co-operative criminal activity (to commit one or more crimes). The stability of group means close connections between the members of the group, different roles in criminal activity, division of labour, planning of the criminal activity, and special regulations of their behaviour such as jargon, special body language, share of power, individual responsibility for different kinds of criminal and routine activity of the group, different “social levels” of members of the group, clear hierarchical structure of the group, behaviour in the case of arrest of one of the member of the group, punishment for giving evidence against other members of the group or other collaboration with the Police. There is also one legal definition of organised criminal group which actually is being used by MIA, SSU and other law-enforcement agencies in their activity and criminal statistics. This definition is contained in the paragraph 25 of the resolution of Supreme Court of Ukraine “About the court practice cases of crimes for gain committed against private property” adopted on 25.12.1992. The resolution defines organised criminal group as a stable unit of 2 or more persons specially organised for co-operative criminal activity.

But the above definitions still do not reflect the social danger and particularities of organised criminal activity, which appear to be nothing more than a small, well organised group of persons. In our opinion, the lack of the connection of organised criminal group with state’s officials· of different levels or their membership in the group is a serious defect. The element of corruption should be a key one in the definition of organised criminal group in terms of our understanding of organised criminality and its social danger: such a definition of an organised criminal group was adopted in Poland in 1996.

Organisations which are responsible for combating organised criminality

The Act also required to set up special subdivisions in fighting against corruption and organised criminality in the country in the system of the Ministry of Internal Affairs and Service of Security of Ukraine. And in 1993 the Department In Fighting Organised Criminality was founded in the MIA. The staff of the Department consists of experienced professionals from the Criminal Search Service and The State Service in Fighting Against Economic Criminality. The Department deals with armed bandit groups (gangs) and organised criminal groups which commit crimes in the sphere of economy. It also has a special armed emergent department called “FALCON” which deals with release of hostages and arrest of armed criminals. In the structure of the SSU, the Department In Fighting Corruption has also been founded.

The Act also established the Co-ordinating Committee In Fighting Corruption And Organised Criminality, which consists of heads of law-enforcement agencies of the State, excluding the general Prosecutor, though he/she and his/her Deputy take part in sessions of the Committee according to the Act. The Committee is responsible for fighting organised criminality and corruption all over the country. Its functions according to the Act are:

- co-ordination of and assistance to all agencies which are involved in fighting organised criminality;

- working out of the strategy and recommendations concerning tactics of fighting organised criminality;

- organisation of liaison and co-operation with corresponding foreign agencies and international organisations in fighting organised criminality;

- preparation of annual and special reports (information) about the state of organised criminality in the Ukraine, the main directions and results of fighting organised criminality and their presentation to the President and Parliament;

- disposal of the Fund of assistance of fighting organised criminality and corruption.

Organised criminal groups

Organised criminal groups in the territory of Ukraine dominate in spheres of black market such as drug dealing, illegal car trading, and particular kinds of smuggling. They control illegal migration of population, firearms market, and “white slavery” – the sale or rent of women and children. Organised criminal groups that have foreign roots have a special danger for the State because those with international connections can more easily escape abroad, in the knowing that international co-operation capacity is still underdeveloped in the Ukrainian authorities. They also possess quality equipment that is seldom available to the modest forensic skills of the police. Sometimes, foreign killers are hired to operate in Ukraine: in 1995, a Polish ‘contract killer’ who had been hired by one leader of a Ukrainian organised criminal group to kill a businessman who refused to pay for ”protection” of his company, was arrested in Ukraine.

The nature of organised economic criminality in Ukraine is in agreement with activities of violent and non-violent (white-collar) criminals. The latter use increasingly “services” of violence-oriented criminals to help them make money. This leads to a real danger of the development of well organised criminal groups which would consist for example of a company director, professional killer and having a state executive or law-enforcement officer as a “roof” as a result of bribery, violence or threat of violence.

Given the above examples in Odessa, and the attempted murder in 1997 of an MP at Doneck airport because he was investigating abuses in the coal industry, we have every reason to suggest that heavyweight criminal organisations are enforcing their connections with some political and power structures using considerable criminal capital, pressurising certain politicians and State’s executives, and law-enforcement officers with help of blackmail, threats, bribery, and violence.

Furthermore, the quantity of discovered organised criminal groups has risen sharply: in 1998, 1,777 organised criminal groups were discovered compared with 4,556 in 1995, a growth of 67.1 per cent. (Though given the breadth of definition not too much should be read into this apparent rise.) In 1998, organised groups were held responsible for 9,273 crimes including 648 facts of different kinds of larceny, 553 facts of embezzlement and 216 briberies were committed by organised criminal groups in 1998. If crimes are divided depending on sphere of commission – 750 crimes were committed in credit-and-financial sphere, 133 in sphere of international economic activity, 59 in sphere of privatisation and 573 in commercial structures[1].


Activity of organised criminal groups in the area of private business is also a considerable problem for Ukrainian law-enforcement. Private business is a new and profitable field of economic activity for Ukraine. Therefor criminals are trying to have an influence on entrepreneurs and particular power in this field. Organised criminal groups which operate in area of private business usually resort to extortion against entrepreneurs using violence or threat of violence, damaging or over destructing the business or property. Quite often they are “employed” by some dishonest directors or owners of companies or entrepreneurs to help them to retrieve their debts or “maintain” their local business monopoly by frightening off the competition. They also could propose their expensive services for the “protection” of beginners in the business. The refusal of such services sometimes could cause extortion with violence or threat of violence or attacks against property, goods and business.

They also can use money and property obtained by extortion to commit business crimes. For example recently, the organised criminal group which consists of more then 10 persons, headed by the director of one joint-stock company, was detected and its members arrested. The criminals dealt with extortion for hire in sphere of private business. As a result of their criminal activity they held passports, statuses and financial documents of companies, companies’ blanks, invoices, samples of their seals and stamps. Further they used all these documents and equipment to commit crimes. They committed long-firm frauds using forged documents and presented the banks’ and company’s documentation as a guarantee of their creditworthiness and identity. However, after they received the goods, they sold them elsewhere and disappeared or made false excuses[5].

Recent changes and additions to the Criminal Code of Ukraine such as the appearance of crimes like the use of threats to require performance of civil obligations such as debts (art.198-2 of CC), and inadequate performance of public duty by officials (art.155-8 of the CC), the formation of illegal armed groups (art.187-6 of the CC), in my opinion confirm the seriousness of the situation in the sphere of private business, since in practice, the Ukrainian Parliament does not like to pass merely symbolic laws.

Credit-and-bank system

The largest increase of crime was recorded in the credit-and-bank system, where the occurrence of crime is difficult to control. During 1998, almost 8,539 crimes, including larceny with an extremely high level of damage, have been registered in this field. The total amount of the damage in this field was calculated as approximately more then 17 millions hrivnas (approx. £6 million ): a sum which has to be set in the context of the poor financial state of the Ukrainian economy[6].

There is also ‘disorder’ in the bank system. In 1998, 225 commercial banks and 2,377 of their branches were operating in Ukraine, but all but two of these were formed after liberalisation of the economy. There were recorded 362 crimes in 1995 and 533 in 1996 in this field, but 6,312 crimes in the 1998 [1]. According to V. Durdinec, the main reason for such a relatively high crime rate is the existence of “black holes” in legislation which concerns the regulation of bank activity as well as of regulations involving credit regulations, investments, international money transfers, and electronic money transfers. But the main factor is an absence of any clear and effective control mechanism of the activity of commercial banks on the part of the National Bank of Ukraine (further NBU) and its Departments in the all regions of Ukraine.

The NBU are insufficiently active in their use of powers to licence banks, and there is no specific anti-fraud monitoring policy, nor is there any sign of any major speeding up of activity. Only in the legislative sphere some activity is noticed. There are some draft bills such as the “National Bank of Ukraine Act”, “Changes and additions to the ‘Banks and banks’ activity Act” which have been sent to the Parliament by the Board of Directors of the NBU. The NBU established a the Department of Banking Supervision, including regulations about liaison with law-enforcement bodies. But proper and effective practical implementations remain problematic, as for example effective liaisons between the Ministry of Internal Affairs, the National Security Service and the National Bank of Ukraine in the field of fighting organised economic crime.

Money laundering

Though there is no evidence about how much money is laundered, either generally (van Duyne, forthcoming) or in the Ukraine particularly, banking is obviously a sphere where substantial domestic and international laundering can take place. There are some strong channels inside the system which exist for the creation of favourable conditions for companies and individuals to transfer bearer bonds into local cash and then to transfer this into foreign currency with the aim to bring it abroad and use it in some overseas “shadow economy”. With this aim a considerable quantity of so called “one day” companies appeared, using people with false identity and forged documents: the number of such companies discovered rose from 210 in 1996 to 280 in 1997.

Analysis of practical experience shows that banks are interested in the existence of such fraudulent companies, partly to avoid credit risk but sometimes to obtain a ‘cut’ in the proceeds for the bank employees personally. For example, one criminal group in one of the regions of Ukraine during 1996-1997 with support of one of the commercial banks in Ukraine and commercial banks in Byelorussia, Poland, Baltic Countries and Germany used false companies to transfer and withdraw from the accounts more then $1.7 million. In the opinion of specialists – though it is unclear how they could be so precise – about 9 out of 10 existing companies use illegal transfers of money (such as under-invoicing for goods exported and over-invoicing for those imported) with the aim of tax evasion. Criminals transfer huge amounts of the money using so called “loro” (overseas personal) accounts. In 1996, money transfers in total amounted to more than 250 millions hrivnas (approx. £81 millions) were discovered but in 1997 such accounts with a total sum of almost 50 millions hrivnas (approx. £16.6 millions) have been discovered. This may reflect declining law enforcement capability, but it is possibly a real fall in transfers. The branch of one of the banks in the one region of Ukraine made 61 transfers of currency, totalling more then 5 million hrivnas (approx. £1.6 million), abroad without the licence of the National Bank of Ukraine (NBU).

The question of repatriation of stolen funds that have been exported is still very important for Ukraine, since sums are believed to be very substantial. Attention is being paid to how these funds can be stopped before leaving the country and about how to get the money back. About $1.5 billion has been returned in recent years, including just $19 million in 1997[6].

The State funds and budget sphere

The problems of financial resources fraud and abuse of credit are still sharp. Some banks are lax in checking the financial state of the companies which wish to borrow money, either because of incompetence (and transparency difficulties) or because of corruption. The funds then disappear and may be lost to the economy. The inspection which has been conducted by the State Control-and-Inventory Service into almost 500 banks and their branches testifies to this. For example one bank gave a credit for £200,000 to one private company and another one for almost £850,000 to another private company and in both cases the money was embezzled or stolen.

The State also suffers because of the lack of the control of the return to the state’s budget of expenses connected with the use of the export credit guarantee obligations of the Cabinet of the Ministers. In October 1997, $236 million were paid from the State’s budget as a result of non-fulfilment of the debtors’ obligations which were guaranteed by Cabinet Ministers: only 3 out of 14 debtors repaid the budget. During 1997, the State Control-and-Inspection Service conducted inspections into more than 64,000 companies and organisations and in a third of them, abuses and thefts were discovered to the total amount of 1.6 billion hrivnas (approx. £530 million). As a result of investigations, 350 million (approx. £116 millions) hrivnas were returned into the budget but the problem and the risk remain serious. The individual responsibility for use of the budget funds of top and middle management, as well as executives of the controlling bodies, should be enforced. Recently adopted “Changes and additions to the Criminal and Criminal Procedural Codes of the Ukraine as for enforcement fighting offences in budget sphere Act” should create favourable conditions for these regulatory efforts.

Public sector companies

Activities of organised (multi-offence) criminal groups inside the companies of the Ministry of the Coal Industry have become widespread recently. For instance more then 900 crimes were registered in just one coal mining region during 1997, and almost half of them were committed by organised criminal groups. Almost 30 high level executives are under investigation at the present time (1998). The damage caused by these crimes is more than 1 million hrivnas (approx. £330 000). The sorts of crimes include bribery, embezzlement, tax evasion, illegal trading in stolen coal. There are also unsafe working conditions because of shortage of funds caused by these frauds [6].

The field of the natural energy resources also needs to be protected against criminal encroachments. There are some positive results in this field. During 1997, more than 1.8 thousand crimes for economic gain connected with fuel materials and more than 1,000 concerning other energy resources have been solved. More then 2,500 crimes were detected in the natural gas-and-power complex. The number of detected crimes which connected with the markets in spirits, energy, gas, sugar are considerable. We also have considerable offences which are committed during the importation of fuel and oil materials. Quite often they go to Ukraine accompanied by forged documents. From the sale of 1 tonne of such goods alone, substantial sums do not flow into the state’s coffer because of tax evasion: to this we must add £100-300 million from the total amount of sold fuel and oil materials during the year. Further these proceeds which were obtained from the realisation of this and other smuggled goods are laundered with the help of accounts of the false companies opened in commercial banks, and are spent for the funding of organised criminal groups or bribes to officials.


Discussing the problems of economic and organised criminality in Ukraine, we also have to emphasise the sphere of privatisation. We have a danger of clear trend to criminalisation of the process of changing of forms of property. There is a serious risk that law-breaking in the process of privatisation has became a very threat to society at the present time. And this threat is confirmed by multiple inspections which were made by the Prosecutors Office in September and October of 1997.

Criminals abuse actively the absence of the control of the system of privatisation process for their own criminal aims: in 1997, some 1,870 crimes were discovered. There is also no control of the formation and use of the State Fund of Privatisation, created for support by granting credit to recently privatised companies to help them to develop. The Fund of the State’s Property was established to maintain the process of privatisation, but bribery became routine and no-one was able to establish how much State property had been sold and for ? prise. Many abuses were discovered as a result of inspections carried out by the State Inspection Service and State Tax Administration. Instead of being a support to the companies which were recently privatised, as required by the Law, the money from the Fund was spent on purchases of flats, houses, cars etc. Credits to the private firms and ‘loans’ to the staff of the organs of the privatisation (which later were discharged from the out-of-budget funds) to the total amount of more than 10 million hrivnas (approx. £3.3 millions) were given illegally.

It is not secret that criminals are trying to purchase highly profitable companies, real estate and other objects using money they receive from drug trafficking, sale of stolen vehicles, tax evasion and other criminal activities. We need take urgent measures to prevent abuses and crime commission in the sphere of privatisation.

International criminality

As argued above, organised criminal groups which operate in the economic sphere quite often have international connections. Ukrainian criminals want to invest their criminal money somewhere abroad, or place the money into the accounts in foreign banks. Their behaviour is understandable: they are afraid of losing their money. Ukrainian currency is not strong and the economic situation in the State is very far from stable. Consequently, in fighting organised crime, it is very important to have international co-operation with former socialist States as well as with law-enforcement agencies of the developed countries. For Ukrainian law-enforcement, it is very important to stop the flowing of capital abroad. At the same time law-enforcement agencies of other countries are trying to protect their economies from “injections” of illegal money. So international co-operation is profitable and useful for both sides. Some steps towards this direction have already been made. The Ukraine have signed international agreements with the governments of Russia, Byelorussia, Moldova, Hungary, and the UK in fighting crime, and these agreements should be extended and used actively.

The role of Legal Attachés in the Ukrainian Embassies overseas in defending the country against trans-national organised criminal groups and terrorists is also very important at the present. In this field, we are going to implement actively the experience of the USA’s law-enforcement bodies, especially FBI. Or alternatively it could be effective to establish an international liaison office in the structure of National Bureau of Investigations and give the officer some international powers and competencies. But the most effective level of international co-operation in the field of fighting economic organised crime may be police-to-police contact, though this is a matter for the future.

Future measures for combating organised crime in Ukraine

The facts mentioned above confirm the perspicaciousness of the decision of the President of Ukraine to create a National Bureau of Investigations (NBI) as a special State organ which will have tasks of detection and investigation of organised crime, corruption and other serious crimes, concentrating the efforts and abilities of special sub-divisions of the Ministry of Internal Affairs (MIA) and the Service of Security of the Ukraine (SSU). Currently we need such an organisation as an NBI, because the work of the MIA and SSU is hampered by lack of mutual assistance powers in their constitution.

The unification of the special sub-divisions of the MIA and SSU into the one structure of the NBI will create favourable conditions for the work of these sub-divisions in combating organised criminality without doubling the work of the other law-enforcement agencies. Fighting organised crime in the State needs also proper scientific basis, for example in relation to data about the methods by which crimes are committed in the private business sector, criminalistics methods of investigating economic crimes, criminological characteristics of organised criminality, criminalistics characteristics of organised criminal groups which operate in the economic sphere. The Inter-administrative Scientific and Research Centre In Problems Of Fighting Organised Criminality is finishing at present the working out of the draft of new text of the strategy and tactics of fighting organised criminality and corruption in modern conditions. The basic research of the social-and-criminological characteristics of so called “fifth power” in the Ukraine has been started. But the most important stage of all scientific researches is their practical implementation. This could be a problem. Because of this we need to change our attitude to scientific work in this field and take it more seriously.


The economic crime situation in Ukraine is quite complicated and extensive. The unmistakeable apparent rise in economic crime creates a need for clearly focused, evidence-based preventative and repressive law-enforcement strategies. We need to process more quickly and apply efficiently intelligence on known organised criminal groups rather than waiting until their crimes are completed. Otherwise, if left to themselves, we may end up with something approaching the Italian situation prior to the mani pulite (‘Clean Hands’) investigations, where the State was controlled by organised crime, in alliance with politicians. Some of our legislation looks good on paper, but there is inadequate resourcing and co-ordination for effective implementation.

The problem of economic crime prevention – including anti-laundering action - needs more attention from law-makers, executive powers, and law-enforcement agencies. The mutual evaluation regime instituted by the Council of Europe, and harmonisation with EU policy will undoubtedly take place, but currently and historically, all prevention policy in Ukraine is confined merely to the adoption of changes and additions to the Criminal Code. This needs to be supplemented by proper Civil and Administrative Law structures, to make it clear what activities are supposed to be protected by law. There is also an opportunity for situational crime prevention in the economic arena, backed by legal sanctions, properly administered, for those who succeed in evading controls.


1. Statistical report of the Ministry of Interior for 1998; analysis of the state of criminality in Ukraine in the period from 1992 to 1997 conducted by Criminological Laboratory of the University of Internal Affairs.

2 Mterials of the workshop dedicated to the problems of fighting organised and economic crime in the Ukraine. - “Вісник академії правових наук України” № 4(11), Харьков, 1997.

3. Волобуєв А.Ф., “Криміналістична характеристика розкрадань в сфері підприємництва”. – “Вісник Університету внутрішніх справ”, Вип. 2. Харків, 1997.

4. “Факти”, 27.03.1998.

5. Report of the Department of the MIA in Kharkiv region for 1997.

6. В.Дурдинець, “Боротьба зі злочинністю повинна бути всеохоплюючою та ефективною”, “Право України”, N1, 1998.

Published in a book: ‘Cross-border crime in a changing Europe’, edited by Petrus C. Van Duyne, Vincenzo Ruggiero, Miroslav Scheinost, Wim Vlkeburg; published by Tilburg University, Netherlands and Institute of Criminology and Social Prevention, Czech Republic, April 2000.

* The paper is based on the analyse of the state of organised criminality in Ukraine conducted by the Head of Co-ordinating Committee In Fighting Corruption and Organised Criminality run by the President of Ukraine, who is at the same time the Director of just founded National Bureau of Investigations. The analysis was published in the journal “Право України ” N1, 1998, p.p.26-32.

§ Bribery, abuse of power and position, activities directed against the interests of service.


· The state’s official is a person with power or political influence in the State from the President, MP to local government member or ordinary police officer level.


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«Education», Doctrine of National Education as well as experience of compiling similar programme of the Centre of humanities of Ukraine,...
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