Material by the Agency for Legislative Initiatives for Dzerkalo Tyzhnia
Draft Law No. 12439 emerged as a response to the decision of the National Security and Defence Council (NSDC) on the need to protect economic security during wartime. In February 2025, Parliament supported it at the first reading. This looked like a triumph of common sense: business was to receive the long-awaited protection from state pressure, while the state gained a chance to restore entrepreneurs’ trust. As a result, everyone would benefit: business would operate effectively, taxes would flow into the budget, and Ukraine’s investment appeal would grow, enabling the attraction of larger foreign capital. After all, the economy in wartime is crucial for defence capability, making this a matter of national security rather than merely business.
However, between the first and second readings, the draft law turned into something of a monstrosity. Provisions appeared that created new corruption risks and weakened the anti-corruption authorities and the Bureau of Economic Security (ESBU). This compels us to ask: is it truly about the consistent protection of entrepreneurs, or another attempt to covertly destabilise criminal justice in a direction convenient for certain actors? According to sources of the Agency for Legislative Initiatives, the updated text of Draft Law No. 12439 was carefully concealed and is expected to be put to a vote in the near future.
New provisions have provoked sharp criticism from civil society organisations, academics and state bodies, including the ESBU, the Specialised Anti-Corruption Prosecutor’s Office (SAPO) and the National Anti-Corruption Bureau of Ukraine (NABU). Let us examine the main advantages and disadvantages of this new pig in a poke from the Ukrainian authorities, and what businesses can expect. A detailed analysis of the draft law is available on the ALI website.
Indulgences for Avoiding Liability
Given the events of July 2025, when attempts were made to restrict the independence of the NABU and SAPO, and the appointment of the winner of the competition for Director of the ESBU was delayed, further introduction of provisions into the Criminal Code is a matter of concern. They may help the guilty evade responsibility, provided they have the ‘right’ connections.
The most problematic is the provision of exemption from criminal liability for tax evasion, smuggling, abuse of office, and so forth on the basis of ‘clarifications’ by the state financial control authority or other central and local executive bodies. In essence, the state is creating a mechanism of official indulgences: the necessary clarification could be obtained even through corrupt means. This would make it possible to circumvent the law and would serve as automatic protection from prosecution, undermining the role of the courts and opening space for abuse in the tax, customs and procurement spheres.
The ESBU also emphasises the danger: ‘Clarifications by authorised bodies become not merely evidence of good faith in court, but an automatic “alibi” that blocks the very initiation of criminal proceedings’.
Executive bodies cannot interpret the substance of a legal norm enacted by the legislator. Only the Supreme Court and the Constitutional Court of Ukraine may claim this role — and even then, only in defined cases. Such ‘indulgences’ grant executive authorities excessively broad discretion, which they may exercise solely within the boundaries of the law. A rhetorical question arises: what kind of ‘school of law’ could have written such a provision?
On a Short Leash: Selective Jurisdiction and the Prosecutorial Filter
No less controversial is the attempt to limit the independence of the ESBU. Draft Law No. 12439 proposes new mechanisms. The first — a suspect or their defence lawyer would be able to request a higher-level prosecutor to change the jurisdiction of their case if they believe it is being investigated by ‘the wrong authority’. At first glance, this seems a safeguard for a business or citizen to avoid situations where a case is handled by a body they deem incompetent or conflicted. Yet the defence would need information they usually do not possess to prove a breach of jurisdiction. Thus, one could quite reasonably insist that the ESBU (or any other law enforcement agency) cannot investigate a case. After all, the Criminal Procedure Code of Ukraine (CPC) does not define what constitutes a ‘breach of the jurisdiction of a criminal offence’. Prosecutors could approach this matter creatively, including by citing ineffectiveness.
The second mechanism — only the Prosecutor General would be able to register criminal proceedings in cases under Article 191 of the Criminal Code (embezzlement in the economic sphere by officials). Yet these cases fall within the jurisdiction of the ESBU. Formally, this is an ‘additional filter against abuse’, with the prosecution checking whether an investigation should begin. What is striking, however, is the selectivity: why does this apply only to the Economic Security Bureau of Ukraine and specifically to Article 191? It looks more like an additional layer of administrative control over the ESBU, which already has limited resources and an unstable state of reform, rather than a systemic solution to the problem of jurisdiction.
This is ostensibly meant to protect businesses from abuse by the ESBU. However, if case materials are first reviewed by a prosecutor, then in situations where there is mistrust of the prosecutor, and the ESBU must act swiftly, this could damage the proceedings. Such violations can be prevented through disciplinary liability, anti-corruption restrictions and internal control mechanisms, rather than by filters of this kind.
Filtering of Reports and an Active Court: Back to the Past
The draft law also proposes an unbalanced approach to protecting business by reintroducing the ‘filtering’ practices of the 1960 CPC at the stage of registering criminal proceedings. Under the proposed amendments, a crime report would need to contain sufficient data to be registered. For entrepreneurs, this creates a barrier against unfounded proceedings, but other categories of the criminal process would suffer — victims of ordinary crimes. For them, there is a risk that their reports will not move forward. Even now, it is often necessary to apply to an investigating judge to have a crime report entered when investigators ignore it. What then to say of situations where one must provide ‘sufficient data’ that is often not visible even during the investigation itself, as in cases of sexual violence?
Equally controversial is the expansion of the role of investigating judges, who would be empowered to summon and interrogate witnesses and collect evidence independently. This moves us away from the European model of adversarial proceedings, where the judge’s role is to act as an impartial arbiter. Instead, the judge would be given the right to summon witnesses and experts or examine documents and objects, even if neither party initiated it. In effect, the judge would be ‘supplementing’ the evidence rather than merely assessing what was provided. A biased investigating judge could create conditions for the prosecution to ‘supply’ the missing evidence.
An even greater threat arises in ordinary criminal cases, for instance, when a preventive measure in the form of detention is being considered. The prosecutor submits a motion supported by evidence. The defence objects, arguing that there are no risks and that the evidentiary base is weak. Draft Law No. 12439 would allow the judge to demand additional materials, interrogate witnesses and so on — effectively correcting the shortcomings of the investigation. In such logic, the court ceases to be the guarantor of balance and instead becomes another player on the prosecution’s or the defence’s team.
This resembles the inquisitorial system characteristic of the Soviet CPC. It also goes beyond the impartiality of the court, creating a risk of biased decisions. A judge who independently initiates ‘additional’ testimony or evidence inevitably becomes a party to the process. Instead of remaining neutral, the judge turns into an active player who undermines the principle of adversarial proceedings and may erode trust in criminal court judgments.
Safeguards on the Path to a Fair Trial
At the same time, the draft law contains several positive innovations for business that remain overshadowed by its negative provisions. These would make the criminal process less punitive and more procedurally fair. Business gains real safeguards against procedural pressure, victims receive effective mechanisms to defend their rights, and judicial oversight is provided with clearer standards of reasoning and time limits.
One Code for All: Why Exceptions for Business Threaten Justice
Although Draft Law No. 12439 does include many positive changes for business, in its current form, under the guise of ‘protection’, it weakens the anti-corruption infrastructure and the ESBU.
There is one Criminal Procedure Code in Ukraine. It does not contain adaptations ‘for business’, ‘for officials’ or ‘for ordinary citizens’. All provisions apply equally to different types of criminal offences. If Draft Law No. 12439 now seems like salvation for business, tomorrow these same provisions may work against, say, a victim of a violent crime.
The criminal process should not serve the interests of only one group. Its logic must work for everyone. Otherwise, any amendment intended to ‘protect business’ will in practice undermine victims’ rights, create new loopholes for evading liability or deprive the court of impartiality. We have already experienced this with the ‘Lozovyi amendments’, which we have been unable to repeal fully since 2018. Now we are falling into the same trap again.
If Parliament genuinely wishes to support business rather than provide new tools for abuse, the draft law must be substantially revised, with harmful provisions removed. Otherwise, the so-called ‘protection of business’ will turn into a new spiral of impunity.
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