UKRAINE Law and Practice Contributed by: Denys Bugay, Volodymyr Vashchenko, Denys Shkarovsky and Oleksandr Lukianenko, VB Partners
an obligation. At the same time, if a person conceals information in a situation where they are themselves a participant in a corruption scheme, such behaviour may be regarded as complicity in the offence. The situation differs for public officials: the Law on Prevention of Corruption obliges them to report an offer of unlawful benefit (Article 24) and conflicts of interest (Article 28). Failure to do so entails disciplinary sanctions, up to and including dismissal. Consequences of failure to report: • for private citizens and employees of private com - panies – none; and • for public officials – disciplinary liability, which may include dismissal from office. Criminal liability in Ukraine arises only for active con - cealment of a serious crime; mere failure to report is not treated as such. 3.4 Insider Dealing, Market Abuse and Criminal Banking Law Insider Dealing Under Article 232-1 of the Criminal Code of Ukraine, criminal liability for insider dealing arises in the fol - lowing cases. • Unlawful use of insider information – the misuse of insider information results in: (a) unjust profit – receipt of undue profit by the individual or a third party; (b) avoidance of losses – evading significant finan - cial losses; and (c) harm to interests – substantial damage to indi - viduals, legal entities or public interests. • Transactions based on insider information – engag - ing in transactions using insider information leads to: (a) significant unjust profit – acquisition of sub - stantial undue profit; (b) avoidance of losses – preventing significant losses by market participants or others; and (c) damage to interests – notable harm to individu - als, legal entities or public interests.
The maximum penalty for such actions is a fine of up to UAH170,000 (EUR3,500), as well as disqualification from holding certain positions or engaging in specific activities for up to three years. Market Abuse Articles 222-1 and 222-2 of the Criminal Code of Ukraine address criminal liability for market manipu - lation. For manipulation on organised markets, criminal liabil - ity arises if manipulative actions result in: • significant profits – receipt of considerable profits by the individual or others; • avoidance of losses – preventing significant finan - cial losses; and • damage to interests – significant harm to individu - als, legal entities or public interests. The maximum penalty for market manipulation on organised markets includes a fine of up to UAH170,000 (EUR3,500) and a prohibition on holding certain posi - tions or engaging in specified activities for up to three years. For manipulations in the energy market, the sanctions are stricter, with a maximum fine of up to UAH1.4 mil - lion (EUR29,000). Criminal Banking Law Criminal offences related to banking activities include: • insolvency of banks – bringing a bank to insolvency (Article 218-1); • misuse of bank secrecy – unlawful use of confiden - tial banking information (Article 231); • disclosure of banking secrets – intentional disclo - sure of banking secrets on capital and commodity markets (Article 232); • database and reporting violations – violations relat - ed to maintaining depositor databases or forming reports (Article 220-1); and • falsification and concealment – falsification of financial documents and reports, or concealing insolvency or grounds for revoking a licence (Article 220-2).
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