Ukraine: Anti-Corruption Internal Investigations as an Effective Compliance Tool

Last Updated: 5 September 2018
Article by Ario Dehghani and Viktoria Shevchuk
Most Read Contributor in Ukraine, September 2018

An internal investigation is an important compliance instrument for many companies residing in the U.S. and Europe. The main goals of such investigations are to assess any possible compliance violations, potential liability risks and to strengthen the compliance system already in place. With the help of this tool a company may also collect documents and evidence before an investigation is started by an authority.

In Ukraine, internal compliance investigations are mostly conducted by Ukrainian private companies acting on an international level and by Ukrainian subsidiaries of international companies, which are linked to the U.S., UK or other European countries. Many internationally acting companies are subject to foreign laws which can be also applicable for fulfilment in Ukraine. For example, the Foreign Corrupt Practices Act (the FCPA), the UK Bribery Act, and the UK Criminal Finances Act. All these acts can include significant fines for violating companies residing in Ukraine. Ukrainian subsidiaries of international companies often become subjects of investigations by foreign authorities relating to alleged conducts in Ukraine and are penalised by foreign authorities. However, Ukrainian companies and/or groups can also be in focus (e.g., the case of Dmytro Firtash).

Requirements of laws

Ukrainian legislation does not prescribe any specific procedures or specific deadlines for conducting an internal compliance investigation in private companies. However, the model anti-corruption programme, the provisions of which are mandatory under certain requirements for private and public entities1 contains a procedure for conducting internal investigations. This procedure can also serve as a framework for internal investigations in private companies which do not fall within the scope of the programme.

Based on these rules, a compliance officer shall notify the management regarding each indication towards a corruption violation. The founders and management are obliged to take, e.g., the following measures:

  • initiate an internal investigation;
  • apply disciplinary measures on the basis of the results of an investigation;
  • based on the results of an investigation to solve a negative effect on the company and identify preventive measures for future violations; and
  • notify the authorities in the event of violations of corruption being found which are subject to criminal or administrative liability

Nevertheless, private companies which do not fall within the scope of the model anti-corruption programme may develop their own procedures based on further needed risk mitigation steps and existing international best practices.

Data protection issues

During an investigation the company will comply with the applicable personal data protection legislation. For example, Ukrainian legislation does not entitle an employer to simply assess private emails of its employees. This can even lead to criminal liability and constitutes a violation of the constitutional right for secrecy of correspondence.

In general terms the consent of the data subject/employee would be necessary to collect and process its personal data during an internal investigation. These requirements also apply if the company uses outside counsels for the respective investigation.

If such consent was obtained beforehand, the law requires the employer, nevertheless, to inform the respective employee within ten days of the transfer that its personal data has been passed to third parties.

Phases of internal investigation

In the majority of cases, and based on best practices, internal compliance investigations can be divided into three general phases:

(1) Assessment and preparation phase;

(2) Investigation phase; and

(3) Shaping the future phase.

(a) Assessment and preparation phase

The documentation of every fact and first undertaken measures from the beginning for reporting reasons towards the management and potentially in the future for the proof of evidence for the authorities, is recommended.

The authorities, for the determining of penalty fines, always also take into account the direct reaction right after the violation took place, including an effective internal investigation. These circumstances can directly influence the sum of the penalty fine imposed. Therefore, the company should make sure that no further compliance violations can occur. It should "stop the bleeding" immediately

During this phase one responsible person should collect and assess all already known facts and allegations, potential liability risks should be evaluated straightaway, and potential notification obligations to stakeholders, insurances and authorities should be checked.

Regarding the following internal compliance investigation, the following actions may be helpful:

  • Identification of one investigation leader who receives all necessary information and monitors the entire investigation;
  • identification of the scope of the investigation;
  • coordination with the relevant stakeholders and development of a sufficiently detailed investigation plan;
  • list of documents that needs to be collected and assessed during the investigation;
  • list of employees and outside persons that need to be interviewed within the investigation;
  • potential necessities with regard to a forensic investigation;
  • potential statute of limitations deadlines which can start after the knowledge of potential misconduct;
  • potential notification deadlines based on public law or contract (e.g., insurance contracts) which might start with the knowledge of potential misconduct; and
  • further information that needs to be collected.

(b) Investigation phase

The internal investigation itself requires careful and effective project management, with established goals and timelines, divided responsibilities and an adequate budget.

One investigation leader should outline the tasks in an investigation plan, track the progress of the investigation regularly on the basis of transparent deadlines and document every action taken. In addition to the investigation, the preparation of a draft reactive and pro-active external press statement and/or a Q&A form for communication with external sources, may also be recommended.

During the investigation, the data should be properly stored, and collected evidence kept in a structured form.

(c) Shaping the future

After the investigation itself the outcome should be stated to stakeholders and/ or insurances (if applicable) to mitigate any potential connected financial risks.

Retaliatory measures should be decided and also communicated (if necessary) internally, but also externally (e.g., to the public or to the authorities, if recommended).

According to applicable law it may also be necessary to introduce damage claims against the respective transgressing employees or other individuals transgressing the law in order to preserve the company's interests.

Involvement of outside counsels

The involvement of outside counsels may be recommended in cases where attorney-client-privilege can protect the company from sharing certain documents with the authorities (particularly according to U.S. law).

It may also be helpful to include outside counsels to fully investigate and assess the violation from the viewpoint of an objective third party to avoid any influence from inside. In particular, it is better for critical internal investigations that require a lot of time and resources as well as proper documentation intended to be disclosed to the authorities to be conducted by outside counsels.


There are several reasons why Ukrainian companies doing business on an international level need to get more familiar with the instrument of internal compliance investigations. It can support strengthening or assessing the existing compliance system. It can also save real money when it comes to penalising a company from the authorities based on a compliance violation that took place in Ukraine.


1  The model anti-corruption programme is obligatory for the companies taking part in public procurements, if the value of procurable services or goods is equal to or exceeds UAH 20 million; and legal entities more than 50% owned by a state or municipal enterprise that have more than 50 employees and a turnover for the most recent financial year exceeding UAH 70 million.

Originally published in the Ukrainian Journal of Business Law

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions