Legal Strategies for Asset Recovery and Corporate Investigations in Ukraine

Kostiantyn Kryvenko, Counsel, Head of Criminal Law Practice at Ilyashev & Partners Law Firm

As Ukraine intensifies its anti-corruption efforts and strengthens the rule of law in the context of EU accession and post-war recovery, legal mechanisms for asset tracing, recovery, and corporate investigations are becoming increasingly sophisticated and effective.

International companies, creditors, investors and compliance professionals involved in Ukraine-related disputes or enforcement actions must understand the multifaceted tools available for protecting their interests. These include civil litigation, criminal proceedings, interim measures, cross-border cooperation, and forensic investigations.

This guide outlines core strategies and instruments available to pursue asset recovery and conduct corporate investigations in Ukraine, highlighting practical issues, procedural mechanisms, and emerging risks.

Challenges Faced by International Businesses in Ukraine

Foreign companies operating in Ukraine or participating in local tenders may encounter a range of legal and operational risks – especially when it comes to asset recovery, fraud detection, or internal investigations. Key challenges include:

• Concealed asset withdrawal: Sophisticated schemes involving offshore jurisdictions, shell entities, and fictitious transactions can obscure the trail of misappropriated assets, making detection and recovery difficult.
• Internal fraud and embezzlement: Dishonest employees or executives may exploit weak internal controls, causing significant losses that remain undiscovered for extended periods.
• Corruption risks: Although Ukraine has advanced its anti-corruption reforms, risks of bribery or undue influence persist. Investigations must therefore be discreet, well-documented, and legally sound.
• Complex legal environment: Navigating Ukrainian law enforcement, asset recovery, and evidentiary procedures often requires expert local counsel with knowledge of judicial and regulatory nuances.
• Cross-border asset tracing: Many schemes involve international components, requiring coordination with foreign authorities, compliance with mutual legal assistance treaties, and recognition of judgments across jurisdictions.
• Reputational exposure: Investigations involving allegations of fraud or corruption carry reputational risks that must be managed carefully, especially for listed or regulated companies.

Legal Mechanisms for Asset Recovery and Loss Prevention

At Ilyashev & Partners, we have developed a multifaceted approach that allows us to effectively protect the interests of our clients and achieve their goals.

1. Strategic Corporate Investigations. We conduct confidential and in-depth internal investigations of any instances of misconduct, including:

• Forensic audit: detecting financial abuse, transaction analysis, tracing hidden cash flows.
• Fraud and embezzlement investigations: establishing facts, collecting evidence, and identifying responsible parties.
• Corruption and compliance investigations: detecting bribery, conflicts of interest, and other illegal actions.
• Electronic data analysis (e-discovery) and cyber investigations: recovering and analyzing digital evidence.
• Asset tracing & freezing.

2. International asset tracing. Use of a wide network of contacts and international mechanisms to trace assets transferred abroad.
3. Use of national interim measures. Initiation of litigation to seize assets (property, corporate rights, funds) in Ukraine and abroad to prevent their further withdrawal.
4. Effective ligation and legal representation:

• Representation of the client’s interests in courts of all instances to recover illegally withdrawn assets or seek to compensate for losses.
• Strategic cooperation with Ukrainian law enforcement agencies in criminal proceedings related to the loss of assets to secure seizure and confiscation of criminal proceeds.
• Representing clients in international arbitrations and foreign courts in asset recovery cases, as well as ensuring the enforcement of foreign judgments in Ukraine.

5. Preventive measures and risk management:

• Development of internal policies. Creation and implementation of reliable corporate governance systems, anti-corruption, and anti-fraud policies.
• Due diligence. An in-depth examination of potential partners, investment objects, and transactions to identify hidden risks.
• Staff training. Training employees to identify and report suspicious activities.

6. Cooperation with international partners. We act as a trusted partner for foreign law firms and consultants needing detailed expertise in Ukrainian law and enforcement for cross-border investigations and asset recovery projects.

Information Sources and Mechanisms for Effective Investigations

The success of asset recovery and corporate investigations largely depends on the ability of lawyers to systematically collect, analyze, and use relevant information. Despite certain challenges, Ukraine offers a broad array of information tools and sources for building a convincing evidence base.

The approach of Ilyashev & Partners’ team is based on a combination of open sources, specialized databases, and classical methods of evidence collection.

1. Open state registers and databases. Ukraine has made major strides towards transparency by opening access to key registers. This provides invaluable opportunities for the initial stage of investigations:

• The Unified State Register of Legal Entities, Private Entrepreneurs, and Public Organizations (USR). It allows the identification of the ultimate beneficial owners (UBOs), the ownership structure of companies, their directors, and the history of registration changes.
• State Register of Real Property Rights. Provides information on real estate ownership, encumbrances, and arrests.
• State Registerof Movable Property Encumbrance. Allows you to check for pledges and other encumbrances on vehicles, equipment, etc.
• Unified State Register of Court Decisions. Contains millions of court decisions from all instances, allowing you to study precedents, see the history of litigation of companies or individuals, analyze their relationships, and identify potential risks.
• The Unified State Register of Persons Who Have Committed Corruption or Corruption-Related Offenses (the Register of Offenders).
• State Register of Sanctions.

2. Specialized and commercial databases. Beyond government registers, we utilize specialized commercial databases and analytical platforms. They often aggregate information from various sources, analyze it, and provide intelligence on financial ties, political influence (PEP), sanctions lists, news mentions, and other critical information that may not be available through state registers alone.
3. Classical methods of evidence collection. Despite digitalization, traditional methods remain the foundation of any investigation:

• Obtaining witness statements. Conducting interviews with persons who may have relevant information, documenting their testimony.
• Working with documents. Systematization and analysis of financial documents, contracts, internal correspondence, bank statements, and other material evidence.
• Obtaining information at the lawyer’s request. Ukrainian legislation gives lawyers the right to receive information from government agencies, enterprises, institutions, and organizations, which is a powerful tool for collecting the necessary data.
• Conducting expert research. Involvement of forensic experts (economic, handwriting, technical) to analyze documents, data, and other materials.

4. Interaction with law enforcement agencies. In cases where signs of a criminal offense are detected, we initiate the relevant criminal proceedings, within which we file a request for the necessary procedural actions to collect and record evidence (searches, seizures, interrogations).

It is important to note that evidence collected in Ukraine can play a decisive role in winning a case in another jurisdiction, provided that it is properly documented and legalized. Ukraine is a party to several international conventions governing legal assistance and the recognition of documents.

Our lawyers are experienced in handling international requests for legal assistance, drafting documents for use abroad, and coordinating evidence collection processes with foreign partners. This ensures that all the information collected is not only relevant and convincing but also legally valid and admissible in international litigation and arbitration proceedings, as well as in international investigations. Thus, a well-collected evidence base in Ukraine becomes a solid foundation for protecting the client’s interests in any global jurisdiction.

Criminal Instruments in Corporate Disputes

Criminal proceedings in Ukraine often serve as a key instrument for protecting the rights and interests of businesses in complex corporate disputes. In cases where there are signs of misconduct – from falsification of documents and abuse of power to corporate raids, asset fraud, or misappropriation of corporate rights the use of criminal proceedings can be crucial.

• Initiation and support of criminal proceedings. We thoroughly analyze the situation and, if there are legal grounds, draft substantiated statements of crime based on facts that have signs of criminal offenses (for example, under Article 190 “Fraud”, Article 191 “Misappropriation, embezzlement or seizure of property through abuse of office”, Article 205-1 “Forgery of documents submitted for state registration of a legal entity and individual entrepreneur”, Article 206 “Counteraction to legitimate economic activity”, Article 364-1 “Abuse of authority by an official of a legal entity of private law regardless of organizational and legal form”, Article 366 “Official forgery” of the Criminal Code of Ukraine), describing the proper qualification of actions and effective procedural support at all stages of investigation and trial.
• Application of interim measures. One of the main advantages of criminal proceedings is the ability to promptly apply interim measures, including the arrest of property, corporate rights, shares, or other assets involved in a corporate dispute or used in a criminal scheme. This allows us to effectively block the further alienation or concealment of disputed assets by order of an investigating judge or court, creating a powerful lever to protect the client’s interests.
• Use of investigative tools to collect evidence. In criminal proceedings, law enforcement agencies have broader powers to collect information that may not be available in civil or commercial cases. This includes interrogations of interested parties, operational arrests of documents, and temporary access to bank transactions, constituent documents of companies, registry data, as well as forensic economic, accounting, computer, and other examinations to identify facts of abuse and confirm criminal conduct.
• Creating legal pressure and strategic leverage. The existence of criminal proceedings against opponents in a corporate dispute creates significant legal pressure, prompting them to negotiate and find compromise solutions. It can also become a powerful lever for strengthening the client’s position in parallel civil or commercial proceedings.
• Protection against unlawful criminal pressure. We also defend our clients in cases where criminal proceedings are unlawfully initiated against them or their officials to exert pressure in a corporate conflict. Our strategy includes actively challenging illegal actions of law enforcement agencies and fully protecting the client’s rights.

It is important to emphasize that all our interactions with law enforcement are conducted exclusively within the bounds of the law. When signs of a criminal offense are identified, we initiate appropriate procedural actions and effectively interact with law enforcement agencies, ensuring that they use their legal tools to collect and record evidence. This comprehensive approach demands deep knowledge of the Criminal Procedure Code of Ukraine, experience in interacting with law enforcement agencies, and the ability to effectively coordinate actions at all stages, which is one of our key strengths.

Civil Asset Tracing and Freezing Orders

In addition to criminal law tools, effective “asset recovery” of assets lost as a result of misconduct or contractual breaches relies heavily on civil and commercial litigation tools. Our firm actively uses these mechanisms to trace, protect, and recover assets that have been illegally diverted or concealed, acting both in Ukraine and coordinating actions internationally.

The civil asset tracing process begins with an in-depth analysis of financial flows, property registers, and corporate structures. We use all available legitimate sources of information, including public registers (as discussed earlier), specialized analytical databases, and data obtained in the course of our investigation. The purpose of this stage is not only to identify the current location of the assets, but also to disclose the schemes for their withdrawal and identify the persons involved in their concealment.

Following successful tracing, a critical step is to immediately ensure the safety of the identified assets. This is where interim measures (similar to freezing orders) imposed by a court in a civil or commercial proceeding come in handy. These measures may include:

• Seizure of funds in bank accounts;
• Seizure of property (land plots, buildings, vehicles, equipment)
• Prohibition on alienation of corporate rights (shares in the authorized capital, shares);
• Prohibition of certain actions that may lead to further withdrawal of assets or change of their legal status.

An important advantage of civil interim measures is their speed and the possibility of applying them at the stage when the main court proceedings have not yet begun or are ongoing. This helps to prevent further withdrawal of assets and ensure the actual enforcement of a future court decision on their return to the rightful owner. Our lawyers have extensive experience in preparing and successfully supporting motions for interim relief, justifying the need for immediate action to protect the client’s interests.

Further recovery of assets is carried out through filing and supporting claims for damages, invalidation of transactions, reclamation of property from someone else’s illegal possession, or other relevant civil claims. In case of a positive court decision, we provide full support in the process of its enforcement.

On the international level, we work closely with a network of trusted partners to trace assets located outside Ukraine and initiate appropriate interim measures in foreign jurisdictions. Our firm’s expertise in understanding Ukrainian law and international norms makes us a reliable partner in complex cross-border asset recovery cases.

Case Snapshot

Ilyashev & Partners’ team has successfully implemented a project on the arrest of twelve An-124-100 Ruslan transport aircraft of the Russian airline Volga-Dnepr in several jurisdictions, including Germany and Canada, within the framework of criminal proceedings initiated at the request of the State Enterprise Antonov. The seizure was imposed to ensure the preservation of material evidence and further compensation for damage. The total value of the aircraft is over UAH 24 billion.

Investigating Corporate Ownership and Shell Structure

Effective identification of actual owners and controllers of companies is a cornerstone of any investigation, especially in the context of asset recovery or corporate dispute resolution. In Ukraine, this process relies on a combination of legal tools and in-depth analysis.

Key sources and methods include:

• The Unified State Register of Legal Entities, Private Entrepreneurs, and Public Organizations (USR). This is the primary public source of information on the ultimate beneficial owners (UBOs) of Ukrainian companies, which is the starting point for assessing the transparency of the ownership structure.
• Tax information. Available through legal requests or court/criminal proceedings, revealing indirect control or financial ties.
• Out-of-court investigations (Forensic, Whistleblower Data). In-depth out-of-court investigations, including forensic audits, play a key role. This is a detailed analysis of financial transactions, documentation, and email correspondence to identify hidden schemes. Whistleblower data can also provide valuable insights.
• International legal assistance. In cases where the beneficiaries or their assets are hidden outside Ukraine, we actively use international legal assistance mechanisms, cooperating with foreign jurisdictions through official requests for information.

In Ukrainian court practice, the technique of “piercing the corporate veil” is increasingly used, which allows courts to ignore the formal independence of a company and hold its actual controllers liable for the company’s obligations. This is possible when a company is used for fraud, abuse of law, or concealment of beneficiaries. Although there is no direct legal provision, courts are guided by the principles of good faith and fairness.

The key in these proceedings is the definition of “control” without formal ownership of shares in the authorized capital. The courts may recognize a person as exercising actual control based on a combination of evidence that demonstrates the influence on key decisions of the company. Such evidence includes family ties, regular participation in management decisions without an official position, financing of activities, third-party evidence of actual influence, and the identification of hidden schemes.

Thus, in complex corporate disputes and asset recovery efforts, our strategy is not only to identify the formal owners but also to identify the persons who exercise real influence and control, to bring them to justice.

Cross-Border Recovery and Recognition Issues

In today’s world, where assets can be quickly moved across national borders, effective recovery of lost funds and property often requires going beyond the borders of one jurisdiction. Ilyashev & Partners Law Firm has extensive experience developing and implementing cross-border asset recovery strategies, understanding the complexity of interaction between different legal systems.

The key tool in such cases is the recognition and enforcement of foreign judgments and arbitral awards in Ukraine. Ukraine is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and has a number of bilateral international treaties on legal assistance, which greatly simplify this process. Once recognized, a foreign judgment acquires the status of a Ukrainian judgment and can be enforced in Ukraine, which is a powerful additional tool for recovering assets located here.

Equally important in cross-border investigations is coordination with foreign investigative authorities to freeze assets abroad. In cases involving white-collar crime, fraud, or money laundering, where assets have been transferred abroad, we actively use international legal assistance tools in criminal matters. This allows us to initiate official enquiries to foreign law enforcement agencies to conduct investigative actions, obtain information about accounts and property, and most importantly, to seize assets in the relevant jurisdiction. Such parallel work, covering several countries at the same time, is extremely effective in preventing further movement or alienation of illegally obtained property.

Success in the most complex asset recovery cases often depends on the application of multimodal strategies that combine different legal instruments. A civil case, criminal proceeding, or administrative mechanism alone can rarely lead to full restitution. An effective strategy involves the synchronized use of several components, including civil, criminal, and administrative legal mechanisms.

Our experts can not only apply these tools separately but also skillfully integrate them into a single, powerful strategy. This allows us to create synergies, where information obtained in one type of proceeding strengthens positions in another, maximizing the chances of successful asset recovery and protecting the client’s interests.

Red Flags and Common Obstacles

Even the most thorough investigations and asset recovery strategies in Ukraine can encounter significant challenges and obstacles. Understanding these “red flags” and common barriers is critical for foreign investors and businesses, as it enables them to proactively develop effective legal defenses in advance.

Criminals often use shell companies (“fronts”) and loan agreements to conceal the true owners of assets or to illegally withdraw them. Suspiciously complex corporate structures with numerous intermediate links, the use of offshore jurisdictions, and atypical loan agreements (e.g., with unreasonably high interest rates, between related parties without an economic purpose) may indicate an attempt to create the illusion of legitimate transactions. Our countermeasures include in-depth due diligence, invalidation of such agreements in court, and initiation of criminal proceedings, which allows us to “pierce the corporate veil” and identify the real beneficiaries.

Another common obstacle is fictitious bankruptcies or liquidations of companies. A sudden declaration of insolvency, hasty withdrawal of assets before bankruptcy proceedings, or initiation of bankruptcy by “friendly” creditors are all warning signs. The purpose of such actions is to avoid liability, write off debts, and transfer assets to new, controlled entities. To protect the interests of our clients, we ensure active participation in bankruptcy proceedings, challenge questionable transactions, and, if signs of a crime are detected, initiate criminal investigations into fraudulent bankruptcy.

Despite the progress in reforms, bureaucracy in state registries and delays in case processing remain real challenges. Unreasonable delays in making changes to the registers, lengthy court proceedings, or delays in issuing documents may allow unscrupulous parties to hide assets or change their legal status. Our response is to continuously monitor, use all procedural opportunities to expedite the proceedings, file formal complaints against the inaction of officials, and, if necessary, initiate legal actions to challenge such delays or inaction.

A particularly acute problem may be potential corruption in the executive service, which may impede the enforcement of court decisions. Unjustified delays, selective enforcement, pressure on state enforcement officers, or questionable valuation of seized property are red flags. To protect our clients from such actions, we use a multi-level approach: thorough legal control over the bailiff’s actions; filing formal complaints with the senior management of the Enforcement Service and the Ministry of Justice; challenging unlawful actions or inaction of bailiffs in court; and, if there are sufficient grounds, applying to anti-corruption authorities such as the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAP). This comprehensive approach, based exclusively on legal mechanisms, allows us to counteract attempts to sabotage the asset recovery process and ensure that the client’s rights are restored.

Recommendations for International Firms and Investors

Effective protection of interests and successful asset recovery in Ukraine requires not only a deep understanding of the local legal landscape but also the development of proactive and multi-vector strategies. Based on our experience, we offer the following key recommendations for international firms and investors operating or planning to operate in Ukraine.

• Work with local lawyers at the Pre-Litigation Asset Mapping stage. Don’t wait until a dispute arises or assets are lost. Engaging experienced Ukrainian legal advisors to conduct pre-litigation asset mapping is a critical preventive measure. It allows identifying potential assets, their owners, possible risks of withdrawal or encumbrance, and developing a rapid response strategy even before possible litigation. Understanding the ownership structure, affiliates, and potential weaknesses of your opponents before the conflict begins is a significant advantage and increases the chances of successful asset recovery.
• Do not rely solely on civil proceedings – use multi-channel approaches. Although civil and commercial proceedings are the basis for resolving many disputes, they are often insufficient in complex asset recovery cases or corporate conflicts. As we have already mentioned, an effective strategy requires a multi-channel (multi-modal) approach that combines different legal instruments.
• Negotiate jurisdictional and arbitration clauses in contracts indicating the application of Ukrainian law to assets. It is crucial to clearly define dispute resolution mechanisms at the stage of concluding contracts and structuring investments. The inclusion of arbitration clauses (e.g., applying the rules of reputable international arbitration institutions) can provide a more neutral and efficient environment for dispute resolution. However, it is equally important to specify the application of Ukrainian substantive law to assets located in Ukraine. This will help to avoid difficulties with conflicts of law and ensure that Ukrainian courts and law enforcement agencies apply the rules they are familiar with when dealing with issues directly related to the assets. In addition, the correct formulation of jurisdictional provisions can greatly simplify the subsequent enforcement of foreign judgments in Ukraine.

Adherence to these recommendations and working closely with experienced local counsel significantly increases the chances of successful asset recovery and minimizes the risks for international businesses in the Ukrainian legal environment.

Our team’s experience shows that even in a difficult environment, Ukraine has an effective system for recovering assets lost as a result of misconduct. However, its successful use requires not only legal literacy but also exceptionally correct and qualified legal support. This system, although multifaceted and sometimes bureaucratized, still provides powerful tools to protect the interests of international business.

The key to success lies in a systematic and integrated approach based on deep local expertise and a strategic combination of different tools. This includes not only careful asset tracing and the use of both commercial and criminal proceedings, but also an understanding of the actual practices of applying the law. A reliable partner in Ukraine that is able to navigate all the nuances of the legal field and effectively interact with all parties involved – from state registries to law enforcement agencies – is not just desirable, but essential for the successful restoration of violated rights and protection of investments.

Ilyashev & Partners is one of the most reputable and experienced law firms in Ukraine, with recognized expertise in complex litigation, white-collar crime, and international asset recovery. Our team advises international clients, corporations, financial institutions, and state bodies on high-profile investigations, fraud claims, cross-border enforcement, and crisis legal strategies.

To learn more, please visit the Ilyashev & Partners Law Firm website or contact Kostiantyn Kryvenko directly.