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06KIEV521, UKRAINE: PROSECUTOR GENERAL SEES LIMITED ROLE IN

February 7, 2006

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Reference ID Created Released Classification Origin
06KIEV521 2006-02-07 15:41 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Kyiv
This record is a partial extract of the original cable. The full text of the original cable is not available.

 

UNCLAS SECTION 01 OF 03 KIEV 000521 

SIPDIS 

DEPT FOR EUR/UMB, G/TIP, INL/AEE, AND EUR/ACE 
JUSTICE FOR OIA, AFMLS, NDDS AND OPDAT 
TREASURY FOR MGAERTNER/NLEE/BCOX 

SENSITIVE 

E.O. 12958: DECL: N/A 
TAGS: ECON EFIN
SUBJECT: UKRAINE: PROSECUTOR GENERAL SEES LIMITED ROLE IN 
MONEY-LAUNDERING AND TIP ENFORCEMENT 

REF: KIEV 340 

Sensitive but Unclassified - Not for Internet Distribution 

1. (SBU) Summary.  Ambassador recommended to Prosecutor 
General Oleksandr Medvedko on 3 February that he create 
administrative divisions devoted to anti-money laundering 
(AML) and to fighting trafficking in persons (TIP).  In both 
areas, Medvedko deflected blame for the low level of 
convictions by stressing that the PGO functioned merely as 
overseer for investigations, which law enforcement agencies 
actually conducted.  Medvedko said he did not see a need for 
court prosecutors to specialize in these areas.  He said the 
Prosecutor General's Office (PGO) was engaged in the GOU's 
law enforcement reform discussion and supported designation 
of a single agency for pretrial investigation, and creation 
of a specialized agency for investigation and prosecution of 
crimes committed by high-level government officials. 
Ambassador asked for fair and transparent treatment in the 
trial of notorious hacker Dmitriy Golubov as well as in 
court proceedings in Dniprodzerzhynsk against a business 
partially owned by a U.S. investor.  End Summary. 

Anti Money Laundering - Poor Court Record Not Our Fault 
--------------------------------------------- ---------- 

2. (SBU) This was the Ambassador's first formal meeting with 
Medvedko, who was appointed on November 4 after President 
Yushchenko had fired previous incumbent Svyatyslav Piskun. 
(Note: Piskun has won a lawsuit declaring his dismissal 
illegal, but the GOU filed an appeal that will be heard on 
February 7.)  Medvedko was accompanied by his Oleksandr 
Shynalsky (Deputy Prosecutor General), Serhiy Kravchuk and 
Oleksandr Kovalenko(Director and Deputy Director of the 
International Law Department), and Svitlana Olinyk 
(Prosecutor in the International Cooperation Section of the 
International Law Department).  Ambassador was accompanied 
by the U.S. Treasury Advisor on Anti-Money Laundering and 
Counter-Terrorism Finance, Legal Attache, Resident Legal 
Advisor (RLA), Chief of the Law Enforcement Section (LES), 
and Econoff. 

3. (SBU) After congratulating Medvedko on the decision by 
the Financial Action Task Force (FATF) the day before to end 
active monitoring of Ukraine, Ambassador noted that the 
Prosecutor General's Office (PGO) had promised to FATF to 
create an anti-money laundering (AML) division.  (Note: 
although the PGO did establish such a division in 2002, it 
has since been downgraded to a unit.  In January, Deputy 
Prosecutor General (DPG) Kuornikova reassigned four of the 
unit's eight remaining staffers, who only focus on oversight 
of investigations and not on prosecutor's advocacy in the 
courts.  Only at the division level may the PGO oversee 
local prosecution of cases.  Local prosecutors rarely bring 
cases to trial and let alone get convictions.)  Ambassador 
noted that of 179 cases Ukraine's Financial Monitoring 
Department (FMD) had prepared and referred to the PGO, only 
one had been brought to trial.  Ukraine boasted some of the 
best financial manipulators in the world, Ambassador said, 
and the GOU should bring an end to money-laundering. 

4. (SBU) Medvedko responded with a review of the development 
of AML legislation since 2001.  He noted that the PGO's role 
was to oversee implementation of the law, not to investigate 
money-laundering cases.  A presidential decree in 2003 had 
listed the agencies with investigative responsibility as the 
Financial Monitoring Department (FMD), the State Tax 
Administration, Customs, Border Guards, the Ministry of 
Interior (MOI), and the Security Service.  Nonetheless, 
Medvedko said, the PGO had created an AML analysis unit, 
though not a division, which, in his view, worked "rather 
well." 

5. (SBU) Medvedko said that the various agencies had 
referred to the PGO around 1000 criminal cases, half of 
which had been brought to court.  (Note: He said nothing 
about the number of convictions.)  He conceded that the 
proliferation of agencies with some AML jurisdiction made it 
difficult to determine where responsibility for AML 
enforcement responsibility lay.  He had discussed this 
problem with the heads of the law enforcement agencies and 
with regional prosecutors. 

6. (SBU) DPG Shynalski argued that the FMD's job was to 
identify suspicious transactions and refer information to an 
appropriate investigative body to determine if the 
transactions constituted crimes.  In this process, the PGO 
functioned only as a mailbox for the FMD's information.  The 
investigative agencies may have poorly prepared the cases, 
he said, or more probably the PGO may have concluded they 
did not involve criminal activity. 

7. (SBU) Ambassador reiterated his request for creation of 
an AML division, underscoring that only the PGO had the 
authority to take cases to court; i.e., that is where their 
focus should be.  He suggested that the PGO staff meet with 
Law Enforcement Section Chief and with U.S. Treasury Advisor 
to discuss ways of improving AML enforcement, including 
possible training or visits to U.S. agencies.  Medvedko 
responded that, in light of the Ambas
sador's points, he 
would consider reorganizing to create a division. 

Trafficking in Persons (TIP): Same Story 
---------------------------------------- 

8. (SBU) Ambassador reminded Medvedko that the State 
Department had designated Ukraine as a Tier Two TIP Watch 
List country and warned that if Ukraine slipped to Tier 
Three, it could lose significant U.S. assistance.  To avoid 
slipping, and perhaps be promoted Tier One, the PGO should 
create a division dedicated to TIP.  Over the last year, the 
GOU had created Ministry of Interior Department for 
Combating TIP, harmonized its Criminal Code with TIP 
provisions of the UN Palermo Convention, and had begun to 
speak out on destigmitizing TIP victims, but the next step 
would be to increase the number of successful prosecutions 
of traffickers. (Reftel) 

9. (SBU) Medvedko said in 2005 there had been 302 criminal 
cases opened on TIP.  The PGO, he said, worked closely with 
the international community -- especially the International 
Organization on Migration.  Members of the PGO had attended 
eleven TIP conferences in 2005 including events in Israel 
and Germany, and would soon be attending a meeting in 
Romania organized by the RLA.  As he had when discussing 
AML, Medvedko stressed that the PGO's role was to oversee 
investigations conducted by law enforcement agencies.  MOI, 
for example, had a special Department for Combating TIP 
charged with such investigations. 

10. (SBU) Ambassador, once again, told Medvedko it was 
important to remember that no one but the PGO was 
responsible for bringing cases to court and thus the PGO 
needed adequate and expert personnel.  Medvedko replied 
that, in his judgment, his prosecutors were capable of 
presenting cases in court although they were "generalists" 
with no specialization in these areas.  He noted that in the 
last year the Cabinet of Ministers had approved the addition 
of more than 300 new prosecutors. 

PGO View of Law Enforcement Reform 
---------------------------------- 

11. (SBU) Medvedko confirmed that the PGO had been actively 
participating in National Security and Defense Council 
(NSDC) development of a concept for law enforcement reform 
There had been five meetings of the Heads of law enforcement 
agencies, academics, and experts with the NSDC, most 
recently on January 27.  At that meeting a draft concept was 
adoptedthat, Medvedko said, included most of the 
recommendations of the PGO.  The next step would be for the 
NSDC to discuss the paper with the President.  The President 
would then issue a Presidential Resolution. (Note: USG is 
funding experts to support this process.  The goal is an 
action plan for restructuring the Ukrainian law enforcement 
community to be compliant with European norms and standards. 
Final product is to be provided to the President the first 
week of March. End Note). 

12. (SBU) Medvedko said the PGO's office supported the GOU 
designating a single agency for pretrial investigation, and 
creation of an independent agency for investigation and 
prosecution of crimes -- including corruption -- committed 
by high-level government officials.  MOI, he said, opposed 
making this new agency responsible for investigation, 
fearing it would be too powerful, but Medvedko thought the 
same agency should handle cases from start to finish.  He 
added that another PGO suggestion was that there be a review 
of the division of jurisdictions in the Criminal Procedure 
Code (CPC).  (Note: USG is providing assistance to the GOU 
to draft a new Council of Europe compliant CPC.  End Note) 

Legal Cases 
----------- 

13. (SBU) Ambassador brought up the case of notorious hacker 
and internet thief Dmitriy Golubov, noting that Golubov had 
recently been released on bail.  Ambassador said he hoped 
Golubov would be brought to justice in an honest and fair 
trial. 

14. (SBU) Ambassador asked for the PGO's assistance in the 
case involving U.S. investor Judge Thomas Fitzpatrick of New 
York (reftel).  (Note: Fitzpatrick and his family had 
purchased a small parking and car wash business in 
Dniprodzerzhynsk, which is operated by his brother-in-law. 
According to Fitzpatrick, the previous owner tried last year 
to force the investors to give up the business by getting 
local officials to harass and threaten the brother-in-law. 
Now the former owner has filed suit to get the business back 
via the courts.  End Note.)  Ambassador said he had met 
twice in early 2005 with PG Piskun, who managed to end the 
harassment.  Ambassador asked Medvedko to look into the 
situation, and gave Medvedko a letter he had written on the 
topic.  Medvedko promised to make inquiries and report what 
he learned. 

15. (SBU) Comment:  Medvedko's apparent goal was to deflect 
blame for the meager number of convictions of criminals 
involved in money laundering or TIP.  He showed little 
comprehension of the need for court prosecutors with 
specialized expertise in these areas, though he did reveal 
his appreciation of conferences and seminars abroad. 
Nonetheless, the Ambassador's frank message, as well as LES 
Chief's discussions after the meeting, may have gotten 
through, as the PGO called on February 6 to request meetings 
with the Law Enforcement Section, RLA, and the AML Treasury 
Advisor on February 7.

 

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