The High Anti-Corruption Court (HACC), established primarily as a specialised court for hearing corruption-related criminal offences, is today no longer a court of exclusively criminal jurisdiction. Its competence now extends to three types of proceedings: criminal, civil and administrative. Somewhat unexpectedly, it is precisely the civil and administrative cases heard by the HACC that attract particular attention from practising lawyers, as these proceedings concern legal institutions that are new to Ukraine.

One such institution is the civil confiscation of unjustified assets, introduced by Law No. 263-IX in 2019. While it cannot be regarded as typical of classical Ukrainian law, it fully complies with the provisions of the 2005 UN Convention against Corruption and the recommendations of FATF.

Previously, Ukrainian courts had no separate mechanism for recovering unjustified assets outside criminal proceedings, so the case law in this area has effectively been formed “from scratch”.

In this article, we seek to explore the key features of civil confiscation proceedings and analyse the emerging case law of the HACC and the Supreme Court.

In personam vs in rem: what is the difference?

International practice distinguishes two main approaches to confiscation:

• in personam — confiscation of personal property within criminal proceedings, carried out simultaneously with bringing a person to criminal liability;


• in rem — asset-based confiscation aimed not at holding a person criminally liable, but solely at depriving them of property obtained unlawfully or without justification.

The European Court of Human Rights (ECtHR), in Gogitidze and Others v Georgia (application no. 36862/05, §§ 91, 107, judgment of 12 May 2015), clearly stated that in rem confiscation is, by its nature, a civil procedure aimed at recovering assets obtained unlawfully or whose origin cannot be justified, and which belong to public officials and persons close to them.

Accordingly, proceedings concerning unjustified assets are a classic form of in rem proceedings, which do not require a criminal charge and do not violate the presumption of innocence. In such procedures, the court is not required to assess the illegality of the asset’s origin “beyond reasonable doubt”.

The burden of proving the lawful origin of property obtained unlawfully may be shifted to the defendants in such civil confiscation proceedings. At the same time, proof on the balance of probabilities or a high likelihood of the unlawful origin of assets, combined with the owner’s inability to prove the contrary, is sufficient to assess compliance with the proportionality criterion under Article 1 of Protocol No. 1 to the ECHR on the protection of property rights.

Standards of Proof: Why the “Balance of Probabilities” Applies

Under the general rule set out in Article 81(1) of the Civil Procedure Code of Ukraine (CPC), each party must prove the circumstances on which it relies as the basis of its claims or objections. However, Article 81(2), paragraph 2, establishes a special rule for cases concerning the recognition of assets as unjustified and their recovery for the benefit of the state. Under this rule, the claimant must set out factual data confirming the link between the assets and a person authorised to perform state or local government functions, as well as their unjustified nature — namely, the discrepancy between the value of the assets and the lawful income of that person.

If, based on the evidence submitted, the court recognises these facts as sufficiently established, the burden of disproving the unjustified nature of the assets shifts to the defendant. The court rules in favour of the party whose body of evidence is more convincing than that of the opposing party (Article 89(4) CPC).

Thus, in civil cases concerning unjustified assets, the standard of proof applied is the “preponderance of the evidence”, or the so-called balance of probabilities. This means that a fact is considered proven if it is more likely to have occurred than not.

In such cases, determining the balance of probabilities effectively comes down to assessing which of the parties’ competing versions appears more convincing and credible. This approach is fully consistent with Articles 80 and 89 of the CPC and does not contradict Article 81(6) CPC, which provides that claims cannot be based on assumptions.

The case law of the HACC and the Supreme Court (cases Nos. 991/5241/24 and 991/1786/22) has established the following approach:

• first, the claimant must prove the link between the asset and the declarant, as well as the existence of a discrepancy between asset value and income;


• thereafter, the burden of proof shifts to the defendant. The asset owner must demonstrate the lawful origin of the property, and in cases of indirect acquisition through third parties — must disprove any connection with the asset;


• the court assesses not merely the totality of evidence, but the competition between the parties’ versions.

This mechanism fully corresponds with the ECtHR’s approach to in rem proceedings. The standard of proof in civil confiscation is less stringent than in criminal proceedings, but it is by no means “automatic”.

Financial Capacity and the “Multiplication” of Income: What the Court Takes into Account

One of the key conclusions drawn from the emerging practice concerns the determination of lawful income and its comparison with the value of assets.

In its ruling of 14 December 2022 (case No. 991/366/22), the HACC Appeals Chamber formulated a fundamental rule: only real income that could actually have been used to acquire the asset is taken into account.

This means that:

• conditional (nominal) income or an abstract “potential earning capacity” is disregarded;


• income from different years is not aggregated, as it is either transformed into assets subject to declaration in a subsequent period, or spent on purchases of a “below-threshold” value.

This excludes the possibility of retroactively “accumulating” income to legalise an asset and prevents the artificial inflation of lawful доход through the aggregation of declaration data from multiple periods.

The Supreme Court confirmed this approach in its decision of 16 October 2024.

750 Subsistence Minimums: Why the Minimum Threshold Is a Mandatory Condition

One of the safeguards of the civil confiscation mechanism, ensuring a fair balance between the general interests of society and the protection of fundamental human rights, is the legal requirement to meet a minimum threshold between the value of the asset and the person’s lawful income.

In order to bring a claim for the recovery of unjustified assets, the difference between the value of the assets and lawful income must exceed a certain number of subsistence minimums for able-bodied persons.

This criterion is explicitly set out in law. Article 290(2) of the CPC provides that the value of the asset must exceed 750 subsistence minimums, but must not exceed the limits set by Article 368-5 of the Criminal Code of Ukraine. Failure to meet this threshold constitutes an independent ground for dismissing the claim, as stated in the ruling of the HACC Appeals Chamber of 23 August 2023 (case No. 991/2175/23).

The statutory minimum threshold serves several functions, in particular:

• it prevents excessive interference with property rights;


• it corresponds with Article 1 of Protocol No. 1 to the ECHR;


• it avoids overburdening the court system with claims concerning low-value assets.

How Courts Determine a Proportionate Method of Recovery

The method of protecting state interests in cases concerning the recognition of assets as unjustified and their recovery for the benefit of the state must meet the following criteria: it must pursue a legitimate aim; be appropriate; be proportionate to the violated right (state interest); and ensure fair restoration.

Proportionality is the key element of the civil confiscation institution. In this regard, the case of the HACC Appeals Chamber No. 991/9734/23 is illustrative. The court found it disproportionate to confiscate an entire flat where its value had been increased through lawful improvement works funded from legal income. Instead, an alternative approach was applied — recovery only of the funds used directly for the acquisition of the asset.

This approach minimises interference with property rights and complies with ECtHR standards.

Why Civil Confiscation Is Not a “Criminal Punishment”

A common argument raised by defendants in this category of cases is that “confiscation constitutes a criminal sanction” and must therefore fall under the guarantees of Article 6 of the Convention.

However, the ECtHR’s case law on this issue is unequivocal:

• proceedings for the recovery of unjustified assets are civil in nature, even if they result in the loss of property;


• by their essence, they constitute a specific form of control over the use of property, rather than a criminal penalty (Gogitidze and Others v Georgia, inter alia);


• the ECtHR recognises that confiscation of assets outside criminal proceedings does not violate the presumption of innocence, property rights, or the prohibition of punishment without law (see M v Italy, Autorino v Italy, Arcuri v Italy, Riela and Others v Italy, Butler v the United Kingdom, Walsh v the United Kingdom).

The Supreme Court, in its decision of 24 January 2024 (case No. 991/1786/22), confirmed this legal nature of the Ukrainian mechanism.

Conclusions: The Direction of Case Law and Legislation

Over recent years, civil confiscation has developed into an independent instrument for countering illicit enrichment, operating outside criminal proceedings and significantly simplifying the recovery of illegally obtained assets.

To date, the practice of the HACC, the HACC Appeals Chamber and the Supreme Court has already established:

• criteria for assessing the lawfulness of income;


• standards of proof;


• algorithms for establishing the unjustified nature of assets;


• approaches to ensuring proportionality of interference with property rights.

At the same time, the procedure itself continues to be refined. In particular, Government Bill No. 14033 (registered on 11 September 2025) proposes introducing single-judge consideration of civil confiscation cases, which could significantly speed up the process.

It can be confidently stated that under current conditions, civil confiscation is becoming one of the most important instruments of anti-corruption policy — effective, flexible, and already supported by a sufficiently developed judicial “road map” ensuring predictability in its application.

the authors

NATALIA GNATENKO

MYROSLAV HNATIUK