Dealing with public money? Get ready for inspections as soon as possible

Dealing with public money? Get ready for inspections as soon as possible

Head of Department, White Collar Crime, Juscutum law firm
19.04.2023, 12:03

Analysing business processes, training employees on how to act during searches, and cybersecurity – preparing for inspections in advance is a must

Law enforcers in Ukraine have stepped up inspections of businesses for abuses in the implementation of government programmes, misuse of funds, embezzlement in contracting, fraud in tender procurement, and so on, focusing on the last two to three years of operation.

Additional attention may also be paid to possible economic ties with Russia, or the affiliation of the beneficiaries or management of the contractor company with the aggressor country.

It is better to prepare for contacts with law enforcement officials in advance to prevent blocking of business activities. They usually follow the common pattern of action.

First, law enforcement sends out requests for primary documents regarding interaction with individual businesses, work in a particular industry, tenders or work using public funds, and the implementation of targeted programmes.

If you ignore them, law enforcement officers may conduct seizures or searches. If a criminal investigation has already been opened, the searches are followed by summonses for the company's employees.

This stage is no less important, as the testimony that employees can provide, regardless of their position – from manager to driver – is the basis for further investigation.

Conducting a legitimate business does not protect you from problems related to criminal prosecution, as modern realities dictate somewhat ‘blurred’ rules of the game.

Therefore, the first preventive step should be to analyse all business processes for legal risks. It is worth reviewing financial and accounting documentation, constituent documents, contracts with individual entrepreneurs / employment agreements, company instructions and regulations, etc.

Given the military and political situation in Ukraine, one must be especially vigilant in checking your counterparties for any ties to Russia.

Particular attention should be paid to staff training in case of investigative actions prior to the visit of law enforcement officers, as in extreme situations, employees are easily subject to provocations and psychological pressure.

This includes training on the basic rules of conduct during a search. The mandatory rule is to communicate with law enforcement officials only in the presence of a lawyer, in particular, if a summons has been presented.

Cybersecurity should also not be neglected, and all important documentation should be stored exclusively in cloud storage. In this case, even after the seizure of computers and laptops during a search, you can resume your activities as quickly as possible simply by replacing the seized equipment with a new one.

And most importantly, you should immediately seek legal assistance from specialised lawyers, which is the key to successful problem solving.

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