Illicit Enrichment and Unjustified Assets: How They Are Checked

When the value of the property acquired by an official visibly exceeds their official income, the state has two distinct tools to respond — criminal prosecution for illicit enrichment and civil forfeiture of unjustified assets. They differ in threshold, procedure, burden of proof and consequences, yet both rest on the same economic operation: comparing acquired assets against lawful, documented income. Below is how exactly the National Agency on Corruption Prevention (NAZK) and the court establish this mismatch, and where the forensic economic expert fits into the process.

Two regimes: criminal and civil

The most important thing to grasp from the outset: “a mismatch between assets and income” is not a single offence but two parallel mechanisms with different thresholds.

• Criminal illicit enrichment — Article 368-5 of the Criminal Code of Ukraine (KKU). It concerns the acquisition, by a person authorized to perform functions of the state or local self-government, of assets whose value exceeds their lawful income by more than 6,500 tax-free minimum incomes of citizens (nmdg). This is a criminal proceeding with all its procedural guarantees, and the standard of proof is “beyond reasonable doubt”.
• Civil forfeiture of unjustified assets — a separate proceeding under Articles 290–292 of the Civil Procedure Code of Ukraine (TsPK). Through the court, the state recovers into the budget assets whose lawful grounds of acquisition the person has failed to confirm, where their value exceeds lawful income by 500 or more subsistence minimums for able-bodied persons, but the gap does not reach the threshold of criminal liability.

In essence, civil forfeiture covers the band below the criminal threshold: where the gap is too small for Article 368-5 but too large to ignore. It is not a punishment for a crime but a civil-law mechanism for returning to the state property of unconfirmed origin, applied even when criminal prosecution is, for whatever reason, impossible.

Feature	Criminal illicit enrichment	Civil forfeiture
Norm	Art. 368-5 KKU	Arts. 290–292 TsPK
Gap threshold	over 6,500 nmdg	from 500 subsistence minimums (below the criminal threshold)
Standard of proof	beyond reasonable doubt	preponderance of evidence (balance of probabilities)
Burden	rests on the prosecution	as to lawfulness of assets, effectively shifted to the respondent
Consequence	criminal record, punishment, confiscation	recovery of assets into the state budget
Court	High Anti-Corruption Court (HACC)	HACC

Who initiates the review

The starting point is almost always the same — the asset declaration of a person authorized to perform state functions. It is analyzed by the NAZK, which conducts a full audit of the declaration and lifestyle monitoring, during which the potential gap between wealth and declared income surfaces.

From there the path forks:

• if the indicators point to criminal illicit enrichment, the materials go to law enforcement: the pre-trial investigation is run by the National Anti-Corruption Bureau of Ukraine (NABU), procedural supervision is exercised by the Specialized Anti-Corruption Prosecutor’s Office (SAP), and the case is heard by the HACC;
• if the gap does not reach the criminal threshold, a SAP prosecutor files a claim with the HACC to have the assets declared unjustified and recovered into the state budget — this is already a civil process under the rules of the TsPK.

So the NAZK detects and substantiates the gap, while SAP together with the HACC give it a procedural form — criminal or civil. These regimes do not mechanically exclude one another: the choice of path depends on the size of the mismatch and the available evidence of the assets’ origin. Adjacent economic offences (tax evasion, fictitious entrepreneurship) may be investigated by other bodies — in particular the Bureau of Economic Security (BEB) — while the official’s illicit enrichment itself stays within the NABU–SAP–HACC vertical.

Method: matching assets against lawful income

Regardless of the regime, the core of the review is the same — a variant of the net worth method. The logic is simple: everything the person (and their family members) acquired over a period is set against the total of their lawful, documented income. If the growth in assets plus expenditures substantially exceeds legal inflows, a gap arises that requires explanation.

In practice the calculation has three steps:

1. Valuation of assets. The list and value of the acquired property are established — real estate, vehicles, corporate rights, cash, funds in accounts, valuables. This often requires an appraisal of the property’s market value.
2. Tallying lawful income. Official income for the period is summed: salary, business income, dividends, proceeds from selling previously acquired property, inheritance, and confirmed loans and gifts.
3. Computing the mismatch. The difference between the value of what was acquired and the sum of lawful income (allowing for living expenses) is the figure compared against the thresholds of Article 368-5 KKU or Articles 290–292 TsPK.

Sources of the review

The calculation relies on official registers and data sets. In the Ukrainian context these are primarily:

• the Unified State Register of Declarations of persons authorized to perform state functions (maintained by the NAZK) — the starting point and basis of comparison;
• the State Register of Real Property Rights (DRRP) — real-estate objects, dates and grounds of acquisition;
• the Unified State Register of Vehicles (Ministry of Internal Affairs / service centers) — cars and other machinery;
• the Unified State Register of Legal Entities, Sole Proprietors and Public Formations (EDR) — corporate rights, business participation, ultimate beneficial owners;
• banking data — movement and balances on accounts; obtained only through procedural means (in criminal proceedings, by an investigating judge’s ruling on temporary access to items and documents; in civil proceedings, by the court’s request for evidence);
• State Tax Service data on official income, together with materials of the State Financial Monitoring Service on suspicious transactions.

Value comes not from any single register but from cross-referencing them: when the declared property is overlaid onto register entries, banking flows and tax history. A discrepancy between the declaration and the registers is already the first signal.

Burden of proof: why it shifts in civil proceedings

This is the key feature of civil forfeiture, and it is often underestimated. In a classic claim, the plaintiff proves everything. In unjustified-asset cases a different construction applies: once the prosecutor has proven the mismatch between the value of assets and lawful income, the initiative passes to the respondent — it is they who must supply evidence of the lawful grounds of acquisition.

The practical consequences of this shift are significant:

• not the criminal “beyond reasonable doubt” standard applies but the preponderance of evidence — the court assesses whose account of the assets’ origin is more probable;
• the respondent’s passivity works against them: if a lawful source is not confirmed by documents, the asset is highly likely to be found unjustified;
• it concerns property acquired after the relevant legislative amendments came into force, so the period and chronology of acquisition matter.

For a civil servant or their lawyer the practical conclusion is clear: in civil proceedings the defense is built not on silence but on evidence of lawful origin gathered in advance for every significant asset.

The role of economic expertise in calculating the mismatch

When establishing the size of the mismatch requires specialized economic knowledge, the court or a party engages a forensic economic expert. In criminal proceedings, the grounds for ordering an examination are set by Article 242 of the Criminal Procedure Code of Ukraine (KPK); in civil proceedings, by the corresponding provisions of the TsPK. The expert operates within the Law of Ukraine “On Forensic Expert Examination” and the Instruction on the Assignment and Conduct of Forensic Examinations and Expert Studies, approved by Order of the Ministry of Justice of Ukraine No. 53/5.

The economic expert’s task is to objectively compute the size of the gap: to bring together lawful income for the period, set it against the value and dates of asset acquisition, account for documented sources (loans, gifts, sale of property), and show the resulting mismatch with a transparent, reproducible methodology. Appraisal of the market value of individual objects is often carried out within a commodity or valuation examination — in which case the study becomes a complex, multi-disciplinary one.

What the expert does not do: does not establish guilt, does not give a legal qualification, and does not decide whether a particular income is lawful from a legal standpoint. The expert answers economic questions within the materials provided. That is precisely why a sound report is valuable to both sides: it either confirms the gap or, conversely, shows that once all lawful sources are accounted for there is no mismatch at all.

Typical defense arguments and how to document them

In forensic economic practice, the gap between assets and income is most often explained by a few typical sources. The problem is usually not that the sources are invented but that they are not properly documented.

• Loans. A written contract with a date is needed and, above all, confirmation of reality: did the lender actually have the funds, how were they transferred (a non-cash trail is easier to follow), is repayment reflected. A backdated receipt with no trace of money movement persuades a court weakly.
• Gifts. A gift agreement and, for significant sums, confirmation that the donor had corresponding means, plus compliance with the tax consequences under the Tax Code. A gift not declared in time weakens the position.
• Family members’ income. Assets are often acquired out of the income of a spouse or other family members. Here what matters is the family’s official income, the regime of spouses’ joint property, and the mutual consistency of their declarations.
• Prior-year savings and sale of property. Accumulations from earlier periods and proceeds from selling previously acquired assets are a legitimate source — provided they are visible in declarations and banking history, not asserted for the first time during the review.

General rule: evidence of a lawful source must be contemporaneous with the event (created when the transaction took place) and leave a verifiable trail. An explanation that appears only in response to the claim is assessed more critically by the court.

Common mistakes

• A declaration that contradicts the registers. A discrepancy between what is declared and the entries in the DRRP or the vehicle register is the first reason for a deeper review. Accuracy in declaring is the cheapest form of defense.
• Betting on silence in civil proceedings. Given the shifted burden of proof, the respondent’s passivity works against them.
• Retroactive “reconstruction” of sources. Loan and gift contracts with no trace of real money movement rarely survive scrutiny.
• Ignoring the market valuation of assets. An understated or overstated property value distorts the entire mismatch calculation — so valuation should be done correctly from both sides.

Illicit enrichment and civil forfeiture are an area where the outcome is decided by the quality of the economic calculation and the discipline of documenting sources, not by the loudness of the wording. If you are a civil servant, a lawyer or a manager facing a review of assets against income, or you need to assess an existing expert report, it is wise to engage a forensic economic expert at an early stage. I would be glad to help you understand your situation within the bounds of the law and to prepare a well-substantiated expert report.