Editor’s Note: This story is the result of an investigation by StateWatch, a Ukrainian expert organization advocating for the principles of good governance, into how Ukraine imposes sanctions against high-profile pro-Russian individuals, many of whom are under sanctions in the U.S., UK or EU. The author, Hlib Kanevsky, is the head of StateWatch. The story has been translated and edited by the Kyiv Independent.
Key findings:
- StateWatch, a Ukrainian think tank, identified at least 32 influential pro-Russian politicians and tycoons in Ukraine – high-profile people who publicly spread pro-Russian views. Out of them, only seven have come under Ukrainian sanctions since Russia launched its full-scale invasion in February 2022
- The Security Service of Ukraine (SBU) has not initiated sanctions against most of the top pro-Russian politicians, which makes it impossible for the state to seize their assets for the needs of reconstruction
- At the same time, the SBU initiates sanctions against hundreds of low-profile collaborators who hold minor positions in the occupation administrations and don’t have significant assets to confiscate
- In one example, a year after the cross-government working group on sanctions sent to the National Security and Defense Council the documents needed to impose sanctions on Vitaly Zakharchenko, ex-Interior Minister, no decision has been made.
Russia’s full-scale invasion in February 2022 has become a stress test for the existence of Ukraine. Sanctions, designed to respond to threats to the country's national security, have become one of the tools of resistance for Kyiv.
In Ukraine, sanctions make it possible to link a person, company, or organization to Russian aggression and, based on that, freeze and seize their Ukraine-based assets.
Since the beginning of the all-out war, the National Security and Defense Council (NSDC), chaired by President Volodymyr Zelensky, has imposed sanctions against more than 5,500 organizations and 6,000 individuals. According to the Justice Ministry, 250 of them have assets in Ukraine. But to date, the state has seized assets only from 26 people subject to sanctions.
Among the assets seized from Russia-affiliated individuals are ownership shares of apartments and parking spaces, belonging to small and little-known officials from Crimea and significant assets, such as the Kyiv shopping mall "Ocean Plaza" of the family of Arkady Rotenberg, an influential Russian oligarch and childhood friend of Russia’s President Vladimir Putin.
Exclusively for the Kyiv Independent, a Ukrainian non-profit StateWatch conducted an investigation and found that the country’s authorities are reluctant to add high-profile and influential pro-Russian politicians to the new sanctions lists: at least 25 top pro-Russian politicians in Ukraine, who for years supported Putin’s regime, have not yet been included in the sanctions lists and, as a result, retained control over their assets – which could have already been seized by the state for reconstruction purposes.
The key reason appears to be that the SBU plays favorites in initiating sanctions within the cross-government working group on sanctions. This group, established in August 2022, unites multiple state bodies like the Economy Ministry and the SBU. It regularly meets to greenlight sanctions and pass them over to NSDC for approval.
According to StateWatch’s sources in the cross-government working group on sanctions, the SBU explains their sluggishness by arguing it takes them more time to collect information on influential pro-Russian politicians than on lower-level collaborators.
Having analyzed sanctions lists, StateWatch found that over 600 citizens of Ukraine on them not only are not high-profile political figures but are generally little known. However, the SBU initiated sanctions against them.
At the same time, the SBU hasn’t initiated sanctions against most of Ukraine’s top pro-Russian politicians: out of at least 32 such politicians, only seven became subject to Ukrainian sanctions. The property of only one of them, Viktor Yanukovych, was confiscated.
When the world is looking for ways to accumulate money for the reconstruction of Ukraine, including through the confiscation of foreign assets of the Russian central bank and oligarchs, Ukrainian officials prove passive in sanctioning and seizing the numerous assets of rich pro-Russian Ukrainian politicians.
Failing to sync Ukrainian sanctions with global ones
In April 2023, Zelensky promised to synchronize Ukrainian sanctions with those of the G7 countries.
“We synchronize all Ukrainian sanctions with global sanctions. It is an inevitable process,” Zelensky said in one of his daily video addresses to the nation.
Anders Åslund
To some extent, this is happening. Following the example of the U.S., UK, the EU, and others, the Ukrainian Security Council has been introducing sanctions against Russian military and political leadership, business circles, companies, and organizations.
But this doesn’t apply to the most prominent Ukrainian pro-Russian politicians. Some of them have been on foreign countries' sanctions lists for eight years but have yet to be put under sanctions in Ukraine.
Among them are the once highly influential ex-head of Yanukovych's presidential administration, Andriy Klyuyev, and former Deputy Secretary of the NSDC, Volodymyr Sivkovich, against whom the U.S. imposed sanctions back in 2015 and 2022, respectively.
After 2014, the Prosecutor General's Office pointed to Klyuyev, Sivkovich, and ex-Interior Minister Vitaliy Zakharchenko as the organizers of the police crackdown on anti-government protesters during the EuroMaidan Revolution. In 2023, the State Bureau of Investigation, in cooperation with the SBU, published evidence that Klyuyev and Sivkovich engaged in subversive activities in Ukraine before Russia’s full-scale invasion. According to the investigation, in cooperation with the FSB, the Russian security service, they created a so-called "political office" to recruit influential Ukrainian politicians, high-ranking officials, and law enforcement officers to work in Russia’s interests in Ukraine.
Another notorious former official under the sanctions of the U.S., but not Ukraine, is Klyuyev's ex-deputy Andriy Portnov, infamous for his open support for Russia, denial of the riot police’s killings of EuroMaidan activists, and conflicts with journalists. In December 2021, the U.S. imposed sanctions against Portnov for corrupting Ukrainian courts under the so-called "Magnitsky Act,” a global law that applies to all citizens who violate human rights and freedoms or are involved in corruption.
Alexander Query
Oleksii Danilov, secretary of the NSDC, told Radio Free Europe/Radio Liberty that Portnov is not under sanctions in Ukraine because the SBU didn’t initiate them.
When asked by StateWatch whether they had initiated sanctions against Portnov, the SBU declined to comment. The agency also refused to address questions on its reluctance to initiate sanctions against pro-Russian top politicians in Ukraine.
A source in the SBU who is not authorized to comment on the matter said that the agency couldn’t disclose the information about their ongoing work on sanctions to not scare off the candidates for such restrictions, so they don’t transfer their assets to a proxy.
According to a government source who spoke anonymously since he wasn’t authorized to talk to the press, at the meetings of the cross-government working group on sanctions, representatives of the SBU explain their favoritism in initiating sanctions by saying they have to abide by the law. The legislation says sanctions can be imposed only in two cases: against persons with non-Ukrainian citizenship, or those involved in terrorism.
Proving a foreign citizenship is relatively easy. But when it comes to proving a person’s involvement in terrorism, everything is up to SBU: in some cases, the agency can quickly provide the government’s working group with the evidence, while in others, it can spend years looking for it.
According to a StateWatch source in the government, many notorious pro-Russian figures in Ukraine would have been sanctioned a long time ago if the SBU had shared information about the progress of its own terrorism probes into those individuals during the meetings of the cross-government working group on sanctions. But this is not happening.
Instead, the SBU is actively investigating numerous collaborators who went to work for the authorities of the occupiers.
The StateWatch analysts studied the Ukrainian sanctions lists and found that the SBU mainly initiates sanctions against "small fish" – individuals who don’t wield influence and don’t appear to have significant assets.
Since the beginning of Russia’s full-scale invasion, the NSDC has imposed sanctions against 648 citizens of Ukraine. Almost half of them are the people working as “officials” at the illegal governing agencies installed by Russians in the occupied territories. The most common reason for imposing sanctions is not terrorism but active political collaboration with the enemy.
Sanctions delays
In the seventh month of the full-scale invasion, Ukraine’s Economy Ministry came out with a statement.
"Retribution for the ‘gendarme Yanukovych’: the government took a step to seize the assets of the former Minister of Internal Affairs Zakharchenko," says the September 2022 press release.
In May 2022, the parliament amended the law on sanctions by adding the ability to block and seize the assets of sanctioned persons and their entourage. The law is not retroactive, meaning all sanctions introduced before May 2022 must be reimposed.
Zakharchenko was on the sanctions lists as early as 2021, but these old sanctions were purely decorative and did not include the seizure of assets. Therefore, to confiscate Zakharchenko's property for the benefit of the state, he had to be re-entered into the sanctions lists.
New sanctions mechanism
According to the sanctions mechanism introduced in May 2022, after the sanctions are imposed, the Justice Ministry gets the right to prepare a lawsuit to the High Anti-Corruption Court to seize the sanctioned individual’s assets.
So far, the Justice Ministry has 26 successful cases of confiscation of businesses, real estate, cars, and other property. After the court's ruling, such assets become state property, are put up for privatization, and the proceeds go to the reconstruction of Ukraine.
The most famous case of confiscation of assets from a sanctioned politician is the confiscation of the property of fugitive ex-president Viktor Yanukovych in December 2022. Back then, the ruling of the High Anti-Corruption Court confiscated Hr 31 million and $85,000 in bank accounts, 537 pieces of cultural property worth 18.7 million euros, the notorious symbol of Yanukovych's era of corruption, the Mezhyhirya estate, and many other expensive properties were confiscated.
Of all the 26 seized assets for the benefit of the state, the State Property Fund has yet to sell a single one – the process is ongoing.
A year later, the NSDC has not re-entered Zakharchenko to the new sanctions lists.
In May, the Prosecutor General’s Office announced that Zakharchenko and his allies in the Interior Ministry would be tried in absentia for organizing the supply of Russian-made grenades to Ukraine to suppress anti-government protests during the EuroMaidan Revolution.
In February, David Arakhamia, a lawmaker leading Zelensky’s Servant of the People party’s parliament faction, announced that Zelensky had deprived Zakharchenko, among other Yanukovych-era officials, of his Ukrainian citizenship due to them holding Russian passports.
"The next step will be the imposition of sanctions on them, the arrest and confiscation of all their property, corporate rights, and other assets for the benefit of the state," Arakhamia said.
But in the next six months, no action followed. Zakharchenko is subject to sanctions based on two criteria at once – the presence of Russian citizenship and alleged involvement in terrorism.
Anna Myroniuk
Zakharchenko is one of many pro-Russian former top officials who have not been re-entered into the sanctions lists following the change in the procedure in 2022.
Among them is Mykola Azarov, ex-prime minister of Ukraine from Yanukovych time, who makes regular public attacks on Ukraine via Russian propaganda media, Dmytro Tabachnyk, ex-minister of education in Azarov's government, whom SBU recently exposed for cooperation with the FSB, and oligarchs Dmytro Firtash and Pavlo Fuks.
But to confiscate their assets after the change in the legislation in 2022, they must be again added to the sanctions lists.
At this stage, the SBU's selectiveness regarding who will be subject to sanctions is particularly noticeable. There is no evidence of the officials’ deliberate withholding of sanctions against notorious pro-Russian politicians in Ukraine who have extensive assets in Ukraine that could have been seized for the country’s reconstruction. At the same time, the information from the sanctions lists indicates that the SBU spends a lot of resources to sanction unknown petty officials in the occupied territories, which do not have significant assets.
A source in the President's Office explains the delays in imposing sanctions on notorious pro-Russian politicians with two main reasons. First, the interests of criminal proceedings on them sometimes prevail over the interests of confiscation. The second is that the law does not have a retroactive effect, so to justify their repeated inclusion in the sanctions lists, there must be evidence of the illegal actions of a person committed precisely after the Russian Federation’s full-scale invasion.
When asked why Zakharchenko is still not on the new sanctions lists, StateWatch's source in the government said that it looks like Zakharchenko's case has been buried in NSDC.
The cross-government working group on sanctions approved the package of documents for imposing sanctions on Zakharchenko back in September 2022.
The group concluded that Zakharchenko should be sanctioned for 30 years for attempting to “capture the city of Kryvyi Rih.” Oleksandr Vilkul, head of the military administration of Kryvyi Rih, told the Kyiv Independent in August 2022, that Zakharchenko had contacted him in the early days of the all-out war, asking to surrender and collaborate, which he refused.
The working group on sanctions then sent the Zakharchenko documents to the NSDC, where they have been stuck for a year now. Zakharchenko’s Ukrainian assets remain not confiscated.
The NSDC didn’t respond to StateWatch's questions about why they haven’t decided on Zakharchenko’s case yet.
The Zakharchenko case isn’t the only one that has gotten stuck in the NSDC.
The Economy Ministry developed the Concept of the State Sanctions Policy, which could have solved the issue by limiting the SBU’s discretion when it comes to choosing the targets of sanctions.
The Economy Ministry claims to have sent the Concept to the NSDC for approval. A year later, nothing is known regarding its content or when it may be approved.
