LEGALIZATION OF ASSETS – CONSULTATION OF A LAWYER

Mechanism of action: in order to legalize undeclared wealth and property, the declarant must participate in a large (large business) or small privatization (small and medium-sized business). If the privatization is small, then depending on the amount of undeclared assets, the entity participates only in the privatization auction that corresponds to the amount of legalization of its undeclared funds or property, assets. The scale of the subject's undeclared wealth must correspond to (be proportional to) the scale of the value of one or another non-strategic asset of the state subject to privatization.

According to the Law of Ukraine On the Privatization of State and Communal Property:

Article 13. Methods of privatization

Privatization of state or communal property is carried out by:

1. sale of objects of state or communal ownership at an auction, including: an auction with conditions; auction without conditions; auctions using the method of step-by-step reduction of the starting price and subsequent submission of price offers; auctions with a lower starting price;
2. purchase of privatization objects.

If we choose the first option of privatization, that is, an auction with conditions (the main condition is that after privatization, the owner must develop this enterprise or institution for at least 5 years and does not have the right to sell it), then a legal question arises:

Since only the person who won the bidding at the open auction, that is, who privatized a certain state non-strategic object, is exempt from legal prosecution, the Tax Amnesty Law should also guarantee their protection to all other participants. Otherwise, no one will participate in the auction, as they will be afraid of legal prosecution. But if protection is guaranteed to all participants of the auction, then there will be only participants without a winner. So how can we ensure potential bidders are protected from legal action?

The Privatization Law also provides for the submission of an application for participation in privatization (Article 14). For legal entities in case of large-scale privatization, it is:

• extract from the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations of Ukraine - for resident legal entities;
• a document on registration in the state of its location (excerpt from the trade, bank or court register, etc.), certified in accordance with the legislation of the state of its issuance, translated into Ukrainian, - for non-resident legal entities;
• information about the ultimate beneficial owner. If a person does not have a final beneficial owner, information on the absence of a final beneficial owner and the reason for his absence is indicated;
• the latest annual or quarterly financial statements;

For potential buyers - natural persons who are citizens of Ukraine - only information on the sources of funds for the purchase of a large-scale privatization object, a copy of the passport is submitted;

Almost the same is required in the case of small privatization. And, as we can see, one of the points of the application is "the last annual or quarterly financial statements" or "sources of origin of funds for the acquisition of a large privatization object", which can also only alarm potential declarants who will be afraid of legal persecution.

So how can we ensure potential bidders are safe from legal prosecution when filling out an auction application?

If we take the experience of tax amnesty from D. Hetmantsev (Law No. 1539), then the legal gaps are as follows.

Legal inaccuracies:

The need to make changes to update the Law on Tax Amnesty to the Criminal Code, the Criminal Procedure Code and the Code of Ukraine on Administrative Offenses. The provisions of paragraph 14 of the previous Law on Tax Amnesty should have been placed not in the Law, but in the Criminal Procedure Code of Ukraine, because, in accordance with the provisions of Article 3 of the Criminal Code of Ukraine and Article 1 of the Criminal Procedure Code of Ukraine, changes to the legislation of Ukraine on criminal liability and criminal procedure legislation, should be introduced exclusively by laws on amendments to the Criminal Code of Ukraine and/or to the criminal procedural legislation of Ukraine.

The provision of Clause 14 of the previous Tax Amnesty Law nullifies its own ideology and narrative about the absence of legal prosecution of the declarant. That is, according to the text of this provision, the passage of all financial monitoring procedures cannot be avoided with their further investigation and the possibility of bringing the declarant to court.

Lack of detail regarding the definition of persons on whom the tax amnesty does not apply. Therefore, it is necessary to detail the circle of amnesty subjects.

Can we take into account (correct) these inaccuracies in our idea of the same tax amnesty, but through privatization, for example?

The question is still rhetorical, but not deprived of the right to life.