Effective business protection. S&P Agency version

Preventing problems is not only more effective but also cheaper than overcoming their negative consequences. This applies to all spheres of our life – both health and business.

The last year was marked by high-profile cases of raider seizure attempts and of growing pressure on business from the state, especially from law enforcement agencies.

The complaints of businesses about illegal criminal prosecution and illegal actions of the State Fiscal Service (SFS), which have only grown in recent years, remain present. These are loud accusations of attempting to block business activity and conduct large-scale searches at the Nova Poshta company, at the grain terminal of the Swiss-Ukrainian company Risoil S.A., so the business activity was blocked for more than 5 days. These actions include attempts of a raider seizure of gas station belonging to BRSM-Nafta, LLC Euro Power, LLC Rostok Holding, attempts to seize Victoria Mall – the largest shopping mall in Western Ukraine owned by Dragon Capital. The conflict between Philip Morris and DFS was resonant and unprecedented from the perspective of the amount of additional tax accruals – UAH 635.3 million. This is only the tip of the iceberg and only those conflicts that were discovered by business in the media space and occurred in 2018.

Still, the case of LLC Promotion Outsourcing and LLC Promotion Staff has been and remains the most interesting in 2018. We wrote about it, conducted a business training which analyzed the causes, errors and possible consequences of this criminal case for business in detail. I will try to briefly dwell on this loud case. The unprecedented nature of this case lies in the fact that the Kiev Prosecutor’s Office began a pre-trial investigation in which 42 companies with foreign investments, including Huawei, Samsung, Kievstar, Bayer, Sanofi,and other international giants were accused of tax evasion and illegal withdrawal of funds abroad. The total amount of unpaid taxes, according to the results of law enforcement, was about 950 million UAH.

The essence of the conflict: according to the materials of the pre-trial investigation, it was established that the largest budget-forming enterprises of the country, including ones with foreign capital, used the services of illegal withdrawal of funds abroad and tax evasion and obligatory payments. It is noted that officials of enterprises entered into an agreement with unidentified persons and transferred funds to the accounts of domestic commercial structures under their control – LLC Promotion Outsourcing and Promotion Staff LLC – for allegedly providing them with own qualified specialists necessary for carrying out the main customers’ activities (outsourcing services). In fact, employees were selected and employed by the customer companies. Thus, 42 companies in the text of the resolution are directly accused of illegally withdrawing funds abroad using the services of Promotion Staff LLC and Promotion Outsourcing LLC by concluding fictitious outsourcing contracts.

Criminal prosecution of business is a painful issue for all companies in Ukraine without exceptions, and for foreign companies, it may be a disaster. This is often used by law enforcement officers.

First of all, among the main business mistakes which led to negative consequences, there is the unwillingness of companies to actively defend their rights within the framework of criminal prosecution, including the lack of readiness for investigative actions in the form of temporary access to things and documents and to direct searches.

Secondly, companies lack truly well-established monitoring of counterparties and a system for miscalculation of risks from transactions with them. Many companies do not check their business partners and often enter economic relationships with enterprises in respect of which criminal proceedings have already been opened. This automatically puts the very company that transferred funds to the “problem” counterparty at risk of prosecution. As we can see, with the trend of 2018, verification and criminal prosecution of agreements on the provision of services entered, law enforcement agencies are also defined as fictitious.

Also, the lack of a communication strategy with law enforcement agencies is among the main mistakes. What do I mean by “communication strategy”? The fact that a company calculates and simulates possible risks for themselves and their business at the stage of receiving any request from law enforcement agencies. Therefore, any answer, even to a supposedly innocent (at first glance) letter, request or demand, must be carefully verified to completely prevent law enforcement authorities from obtaining permission to conduct investigative actions against your company.

You can still highlight such errors as the absence of a defense strategy in criminal proceedings. Maybe the company doesn’t have a certain strategy, but it doesn’t include counting and minimizing possible risks at all. Therefore, companies often complain about blocking their activities, especially during or after a search. Many negative consequences – foreclosure, disclosure of banking or commercial secrets, financial and reputational losses – can be avoided if you formulate a security strategy at the “zero” stage. That is, before the active phase of the conflict. Preventive measures are the only effective tool for minimizing negative consequences. Unfortunately, the demand for preventive measures is only for those companies that have already gained experience of hard confrontation, felt all the “delights” of conflicts and no longer want this kind of wars.

With many years of experience in solving the above-mentioned conflicts, our company has closed 25 high-profile criminal cases against large foreign enterprises and their leaders on tax avoidance for the total amount of over UAH 950 million in the last three years!


  • Reduced premiums for taxes and fees to companies totaling UAH 400 million
  • Including 2018 – UAH 200 million
  • During 2018, due to the successful business cases, the VAT amount of UAH 50 million was returned to the settlement account
  • During 2017-2018 business was returned illegally blocked VAT in the amount of USD 370 million to the settlement account
  • 25 criminal cases were opened against company executives regarding tax avoidance for the total amount of UAH 950 million
Have a question?
a specialist!


  • Criminal prosecution often begins with a request. Therefore, the first important position – the answer to this request should be very well prepared. It is this “strategic communication” that makes it impossible for law enforcement officers to obtain any investigative actions against your company.
  • The second important position is preventive measures as the only effective means of protection against criminal proceedings and minimization of negative consequences.
  • Third, what you have to take care of is the monitoring of counterparties and the risk assessment system for the contracts with them.
  • So, take care of your business security in advance! Actively defend your rights if you did not succeed in avoiding criminal proceedings.
Liked the article?

Name: Mykola

Surname: Siutkin

Email: siutkin@sp.agency

Phone: +380443830000

Company address: 10 Redutnaya Street, Kyiv, Ukraine

Send a message

Leave comment

Вы не можете скопировать содержимое этой страницы