Why Security Service of Ukraine came to Dragon Capital: lessons for business


Natalia Osadchaya, Co-founder of S&P Agency, Investment Risk Advisor.

How not to become an object of attention of law enforcement officers and what to do if the security forces nevertheless came with a search. Opinion of lawyer Natalia Osadchaya

All last week, the media were full of news about the SBU search in the office of Dragon Capital investment company. According to the company’s official statements, only a part of the equipment was seized during the search, which made it possible to continue work as usual. The general director of the aforementioned company, Tomas Fiala, did not rule out that the search could be a means of pressure in connection with the conflict over the Skymall shopping center.

After analyzing information from open sources, it is possible to give a legal assessment of the current situation around Dragon Capital, as well as analyze the mistakes that led to this situation.

Causes of the conflict

The criminal proceedings, which became the reason for the search in the company, were opened in early 2016. According to the SBU, the management of several firms “deliberately purchased illegal software” of Russian production, which refers to special technical means of secretly obtaining information.

At the end of 2016, the SBU conducted a series of searches at the premises of software developers and sellers: Smart Control, Infobezpeka LTD, Stakhanovets and Spetsbayt. Last week, the security forces visited the companies that bought and used it: Ukrgasvydobycha, Dragon Capital, Kiy Avia, 112.Yuey News Agency. During the searches, they seized computer equipment with conflicting software installed on it.

The investigation also has the conclusion of an expert from the Ukrainian Research Institute of Special Equipment and Forensic Expertise of the Security Service of Ukraine dated October 11, 2016 that technical devices (server and client laptops) in combination with the Stakhanovets software installed on them belong to special technical means of obtaining information.

“One thing is for sure: if investigations have already begun against the company, then continuation will follow”

As you can see, not only Dragon Capital, but also other fairly well-known companies, such as Ukrgasdobycha and Kiy Avia, came under fire in this case. The case itself was opened almost a year ago. Therefore, the voiced version of a specific order for Dragon Capital, and even in connection with the conflict with the Skymall shopping center, is most likely unlikely. In this case, only they would be touched.

But one thing is for sure: if investigative actions have already been launched against the company in question, then continuation will follow.

Risks not calculated

By carefully reading criminal cases, we will see significant risks for companies that have purchased and used controversial software. According to the plot of the case, representatives of special and intelligence agencies of the Russian Federation acted by prior agreement with representatives of Smart Control, Infobezpeka LTD and other business entities established in Ukraine that illegally sell and use personal computers, mobile phones and Russian-made software related to special technical means of secretly obtaining information.

Dragon Capital is not listed in the plot of the criminal case. Despite this, it is highly likely to fall into the category of “other business entities” that carry out illegal use of software. Therefore, the risks of bringing Dragon Capital and other companies involved in this case to criminal liability are quite high. It is also quite likely that the heads of companies will be suspected, with the ensuing consequences (such as the choice by the court of a measure of restraint in the form of arrest, house arrest, undertaking not to leave, personal guarantee, and others).

Wrong or not insured

Many Ukrainian companies make typical mistakes in such cases.

Firstly, companies lack monitoring of counterparty problems. In today’s realities, you need to keep your finger on the pulse and constantly study all possible information about your partners. What is it for? Obtaining up-to-date information about criminal cases against counterparties gives the company the opportunity to be one step ahead, study the situation, and prepare a defense strategy.

Secondly, this information can show with almost 100% accuracy that your company can already come with investigative actions. You can even roughly calculate when. Therefore, the possible arrival of guests will no longer be a surprise for the company.

Thirdly, you can know exactly what issue they will come for and what they will be looking for. And again, be a couple of steps ahead.

Get ready to receive guests

In today’s realities, every company must be ready for the arrival of the enemy and do their homework: write down instructions, work out entrances and exits from the office, instruct all employees and security services, block all weak points. If documents or computers were taken away from the company during the search, it is obvious that it did not work out the possibility of conducting a search in advance and was not ready for it va. If you’re prepared, a search always follows a pre-planned business scenario, not a law enforcement scenario.

Once documents, computers, servers have been taken from you (provided that the right to seize such property was clearly provided for in the court ruling), it is almost impossible to return them in a short time

One of the most serious mistakes that can cost a company too much is storing documents on hard drives and servers directly in the office. An incredible amount of information about the company’s activities falls into the hands of the SBU, which can and will be used to search for new episodes or elements of crimes. As a rule, documents and computers are confiscated precisely for this purpose, and the second time law enforcement officers come very quickly, with a specific list of documents that are subject to seizure.

“Once documents, computers, servers have been taken away from you (provided that the right to confiscate such property was clearly provided for in the court ruling), it is practically impossible to return them in a short time.”

Bringing the government’s attention and going to the press are good tools, but only at certain stages and after the necessary amount of work has been done. You should not consider them as the only effective way to deal with the security forces.

And most importantly, the risks, especially in our country, must be calculated in advance. Only in this way will you be ready for battle even before it starts.

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