No guilt illusion while closing criminal proceedings due to expiration of limitation periods
The expiration of the statute of limitations for prosecution is a long- known legal construction, which is widespread in the legislation of most countries of the world. It dates back to Roman law. Advocate General Joseph Gand aptly described the main purpose of this institution: the institution of limitation expresses, in legal terms, “a common truth […], that is, that time is the great healer, that after a more or less extensive period there always comes a point when, in the relationships of society, the past can no longer be called in question and even if it was wrongful it is better to wipe the slate clean”1.
Relevant provisions of the closure of criminal proceedings due to the expiration of the statute of limitations for criminal prosecution are provided, of course, in the national law. Thus, para. 1 of part 2 of Article 284 of the Criminal Procedure Code of Ukraine (the Criminal Procedure Code) provides that “criminal proceedings are closed by the court in connection with the discharge of a person from criminal liability on the grounds provided for in para. 3-1 of part one of this Article”, and such ground is “expiration of the statute of limitations for criminal prosecution”.
As a matter of interest to us: whether the guilt of the person should be established when closing the criminal proceeding on this ground, and whether the person should be considered guilty in such a case, as well as how does this is correlated to the prejudicial nature of such rulings for courts in administrative, civil, commercial cases?
Who can be discharged from criminal liability
The answer to the question about necessity to establish guilt, in our opinion, lies in the very terminology used by the legislator.
As follows from part 1 of Article 44 of the Criminal Code of Ukraine (the Criminal Code), only “a person, who committed a criminal offense” is a subject to discharge from criminal liability. Similar wording is also contained in part 1 of Article 49 of the Criminal Code, which provided that “a person shall be discharged from criminal liability, if the following periods have elapsed from the date of the criminal offense to the effective date of the judgment…”.
Part 1 of Article 2 of the Criminal Code provides that “commission by a person of a socially dangerous act that has elements of criminal offence gives grounds for criminal liability”. In accordance with part 1 of Article 11 of the Criminal Code, criminal offense is “… a socially dangerous culpable act (action or omission) committed by an offender”. So, only culpable act will be considered a criminal offense. The key point is the wording “culpable act” (synonym to guilty), which refers to the definition of guilt, as provided in Article 23 of the Criminal Code – “a mental state of a person in regard to the performed act or omission under this Code and to the consequences thereof, which is expressed in the form of intent or recklessness”.
So, as we understand, that only a person, who is guilty of committing a criminal offense may be discharged from criminal liability. For these reasons, in fact, this ground for discharge from criminal liability is considered non-rehabilitative in theory.
Closure of a criminal proceeding without admission of guilt is an illusion
In practice, for a long time the national courts were establishing the person’s guilt of committing a criminal offense or at least were demanding the person to plead guilty when closing the criminal proceedings due to the expiration of the statute of limitations according to the instructions of the Plenum of the Supreme Court of Ukraine. These instructions are specified in the Resolution of the Plenum of the Supreme Court of Ukraine as of December 23, 2005 No. 12 “On practice of application of the legislation about discharge of the person from criminal liability by courts of Ukraine”. The Plenum of the Supreme Court of Ukraine pointed that “when deciding regarding the discharge of the person from criminal liability, the court (judge) … must make sure …, that the act the person is charged for really took place, that it contains elements of crime and the person is guilty of its commission…”.
However, the Supreme Court of Ukraine formed another practice in this matter and noted in its Decision as of March 26, 2020 in case No. 730/67/16-к: “pleading guilty is a right but not an obligation for suspect or accused, so if they do not plead guilty to committing a criminal offense, even though they agree to discharge from criminal liability, it cannot be an obstacle to exercise their right to such discharge and cannot be a legal basis for the court’s refusal to satisfy the petition. The institution of discharge of a suspect or accused from criminal liability provided by the law (Article 49 of the Criminal Code) does not relate such discharge with their pleading guilty to committing a crime”.
Moreover, in the Decision as of November 11, 2020 in case No. 455/229/17 the Supreme Court noted that the compliance with the conditions, set out in Article 49 of the Criminal Code, is unconditional and mandatory ground for the court to discharge person from criminal liability, even though the person does not plead guilty:
“Moreover, the appeal court’s statement that it is impossible to apply discharge from criminal liability due to the expiration of the statute of limitations because the accused did not plead guilty to committing a criminal offense is not based on the law as well.
Compliance with the conditions, provided in parts 1 – 3 of Article 49 of the Criminal Code of Ukraine, is an unconditional and mandatory ground to discharge person from criminal liability. The requirements of this article do not provide for the mandatory plea of guilt by the person who filed a motion about discharge from criminal liability under Article 49 of the Criminal Code of Ukraine”.
On the one hand, the Supreme Court admits that a person may not plead guilty for the purposes of discharge from liability. As there will still be no criminal prosecution of a person in case of discharge, the position of the Supreme Court seems reasonable from a practical point of view. Why waste time for establishing guilt if the consequences for the person will not change? But this practical approach does not take into account two aspects.
The first aspect is related to the general provisions of the Criminal Code and the Criminal Procedure Code of Ukraine, which stipulate that only a person who has committed a crime, i.e. is guilty, can be released from criminal liability on this ground.
If a person voluntarily pleads guilty to committing a criminal offense, the discharge on this ground does not raise questions. But if the person does not plead guilty to committing a criminal offense, and does not mind closing the proceeding, then in such circumstances the closure of the proceeding is essentially an “illusion” created by the court to such a person.
The Criminal Procedure Code really does not directly oblige the court to establish the guilt of a person when closing proceeding. However, this follows from the very essence of the institution of discharge of a person from criminal liability: only a person who has committed a criminal offense may be discharged.
In accordance with part 3 of Article 285, part 2 of Article 286, para. 8 of part 1 of Article 287 of the Criminal Procedure Code, the court is obliged to establish whether the suspect or accused, in respect of whom the discharge from criminal liability is provided, does not object against closing criminal proceeding on this ground. However, the law does not oblige the court to explain the consequences of such closure, in particular, that the person will be considered guilty of committing a criminal offense for which he/she is discharged from criminal liability regardless of whether he/she pleads guilty or not.
At the same time, in case the suspect or the accused objects against the closure of criminal proceeding on this ground, such closure shall not be allowed. The criminal proceeding continues in the general order. I.e., full-scale pre-trial investigation and judicial proceedings shall be conducted in accordance with the general procedure (as noted in part 8 of Article 284, part 3 of Article 285 of the Criminal Procedure Code). In fact, by denying the admission of guilt, the person denies the closure of the proceeding on this ground.
When such cases take place (the person does not plead guilty to committing a criminal offense, but at the same time gives consent to the closure of criminal proceedings on the ground of expiration of the statute of limitations), criminal proceeding, in our opinion, should continue in accordance with the general procedure in order to establish the guilt of the person for his acquittal or conviction, or should be closed on the ground of non-identification of the person, who committed the criminal offense. Currently, the Criminal Procedure Code provides for the possibility of closing the proceeding due to non-identification of the person, who committed the criminal offense, in case of expiration of the statute of limitations for criminal prosecution. This is the mechanism that should be used if the person does not plead guilty.
This is the approach, in our opinion, that corresponds to the presumption of innocence of the person – the guilt of the person can be established only by the guilty verdict given by the court (as noted in the Article 62 of the Constitution of Ukraine, part 1 of Article 17 of the Criminal Procedure Code, part 2 of Article 2 of the Criminal Code). According to the current practice, it turns out that the guilt of the person is established not by a court judgment, but by the ruling on discharge from criminal liability. Moreover, there is a manipulation, because such rulings states that the person does not plead guilty.
Legal consequences of the criminal proceeding closure
The second aspect of the abovementioned approach of the Supreme Court regarding the lack of necessity to establish the guilt of a person when closing the criminal proceeding due to the expiration of the statute of limitations is particularly manifested in the further legal consequences of such closure, for example, when appealing the tax notification-decisions in administrative cases. Part 6 of Article 78 of the Code of Administrative Procedure of Ukraine stipulates that “…a ruling on closure of criminal proceeding and on discharge of a person from criminal liability… is binding to the administrative court,… only with regard to whether these actions (omission) took place and whether they were committed by this person”.
Furthermore, the Code of Administrative Procedure of Ukraine also provides that knowingly misleading testimony of witnesses, knowingly incorrect expert’s findings, knowingly incorrect translation, falsity of written, physical, or electronic evidences, that are established by a ruling on closure of criminal proceeding and on discharge of a person from criminal liability, may be grounds for review of court decisions upon newly found circumstances (in accordance with para. 2 of part 2 of Article 361 of the Code of Administrative Procedure of Ukraine).
The similar provisions are provided in the Code of Civil Procedure of Ukraine (part 6 of Article 82, para. 2, part 2 of Article 423). And only the Code of Commercial Procedure of Ukraine, namely part 6 of Article 75 stipulates that only a guilty verdict in criminal proceeding can be regarded as a prejudicial for a commercial court. At the same time, it is provided, that such ruling may be a ground for review of the court decisions upon newly found circumstances (in accordance with para. 2 of part 2 of Article 320 of the Code of Commercial Procedure of Ukraine).
As it follows from the content of these provisions, the court must establish and verify the issues about whether actions (omission) took place, whether a criminal offense has been committed and whether the person is guilty of committing it. The court must indicate this information in the ruling on closure of criminal proceeding and on discharge of a person from criminal liability.
The question that arises is regarding the prejudicial nature of such rulings. If the circumstances of the commission of a criminal offense and the guilt of a person of its commission are not established by the court when closing the proceeding and discharging from criminal liability, then what kind of obligation for the court are we talking about? The proceeding is closed on the formal grounds of expiration of the statute of limitations and by the consent of the person to such closure, who may not even plead guilty. This approach contradicts the provisions of part 5 of Article 17 of the Criminal Procedure Code, which provides that “a person whose criminal guilt has not been found in a valid judgement of conviction shall be treated as an innocent one”.
In most cases, the closure of proceeding is carried out in accordance with para. 2 of part 3 of Article 314 of the Criminal Procedure Code in the preparatory court session, which is intended primarily to address issues of preparation of the case for trial. So, such preparatory court session is conducted without comprehensive, complete, and impartial examination of all circumstances in criminal proceedings, without summons and examination of witnesses, without examination and evaluation of written or physical evidences from the point of view of adequacy, admissibility, certainty, sufficiency and correlation. The circumstances are usually not described in such rulings. The court only states in which criminal offence the person is accused.
Accordingly, if the court, when closing criminal proceeding, does not establish existence of elements of criminal offense and guilt of the person of its commission in accordance with the general procedure, how then the rulings can be taken into account by courts when considering administrative and civil cases and confirm “whether these actions (omission) took place and whether they were committed by this person”. In our opinion, such rulings should be excluded from the Code of Administrative Procedure of Ukraine, the Code of Commercial Procedure of Ukraine, the Code of Civil Procedure of Ukraine from the list of those which discharge from proving. Additionally, such rulings should be excluded from the list of the grounds of review of the court decision upon newly found circumstances.
As a result of the closure of criminal proceeding in the existing legal field, a person may receive a civil claim from individuals who have suffered from a criminal offense. After that, such court ruling can be used as an evidence of the person’s guilt of the damage caused.
The reality of this development is confirmed by the experience of other countries. In this respect, attention should be paid to the decision of the European Court of Human Rights (the ECHR) in the case “Agapov v. Russia” dated of October 06,2020. In this case the tax authorities conducted a tax audit of the company, which resulted in additional tax liabilities and fines. The court judgment confirmed the legality of the additional tax claims, due to which the company went bankrupt.
At the same time, the director was investigated for tax evasion. The investigator established that due to the audit report the director had evaded taxes by the company, however the investigator issued a decision and refused to institute a criminal investigation on the charge of tax evasion in respect of the applicant due to the expiration of the statute of limitations for criminal prosecution. The tax authorities filed a civil claim against the director to recover damages caused to the budget by tax evasion.
The ECHR stated in the judgment that the investigator refused to initiate criminal proceeding against the director for tax evasion due to the expiration of the statute of limitations. So, the director has never been convicted or sentenced of this crime by the court. Despite this, the civil courts granted the claims to recover damages. The courts found the applicant liable, stating that the director had committed “illegal acts with a criminal intent to evade the payment of taxes”. The fact that the director was not acquitted in the criminal case was an automatic and sufficient ground for the courts to recover damages.
The ECHR noted that the wording used by the civil courts reflected those courts’ unequivocal opinion that a criminal offence had been committed and that the applicant was guilty of that offence, even though he had never been convicted of that offence and had never had the opportunity to exercise his rights of defense in a criminal trial. In the Court’s view, the civil courts’ statement was inconsistent with the discontinuation of the criminal proceedings against the applicant and amounted to a pronouncement that the applicant had committed a criminal offence.
The ECHR also noted that the Government’s argument that the applicant did not appeal against the investigator’s decision on refusal to open a criminal investigation is irrelevant, as far as, the legislation did not provide that the absence of an appeal against such a decision could be considered as a proof of a person’s guilt or a ground for his civil liability. In view of this, the ECHR established a violation by the State of the presumption of innocence of the director and his property rights, in connection with which it awarded the director EUR 688 of pecuniary damage and EUR 7,800 of non-pecuniary damage.
This example demonstrates the reality of the risk of negative consequences for the person in respect of whom the proceeding was closed. However, what is more important in the light of the present article, is that the ECHR considers the occurrence of such consequences as contradicting to the principle of the presumption of innocence.
The above commentary presents the general statement for information purposes only and as such may not be practically used in specific cases without professional advice.
“Let’s go!”: The Bureau of Economic Security of Ukraine has started its activity
Statistics of criminal proceedings on taxes for 2019
Updating! False start. Increased liability on tax evasion
and some other crimes,
some other important changes of the Law on Amendments on Simplifying the Pre-Trial Investigation of Certain Categories of Criminal Offences
Decriminalization of “sham business activity”: what`s on practice?