Ukraine's Fiscal Service exerts undue pressure on Olam Ukraine: UGA

The searches at the office of Olam Ukraine, a subsidiary of Singapore-based Olam International, are nothing but pressure on the company, preventing it from operating and this may lead to a withdrawal of the Singapore company's investments in Ukraine and their redirection to another jurisdiction, the Ukrainian Grain Association (UGA) says in a statement.

Olam Ukraine reported about the searches in the company's offices and in the residences of its executives by the investigators of the Financial Investigations Department of the Main Directorate of the State Fiscal Service in Kyiv on 2 June. These investigative actions were carried out as part of a pre-trial criminal investigation.

As reported, in a criminal case that was not registered until April 2021, investigators received an order from an investigating judge on 11 May 2021 authorising a search of the offices of the international company, the investor and its employees.

"Within the framework of this criminal proceedings, the pre-trial investigation body neither requested documents or information in accordance with Article 93 of the Criminal Procedural Code of Ukraine, nor granted temporary access to property and documents, but immediately applied onerous investigative actions in the form of searches for the company and its employees. Such actions, in the company's opinion, are nothing but pressure on an international investor," the statement reads.

Furthermore, the basis for entering information about the criminal proceedings were reports of operational officers of the State Fiscal Service in Kyiv, information from internal databases of the State Fiscal Service (the analytical system Tax Block the Register of Tax Invoices), protocols of interrogation of operational officers of the Administration of the State Fiscal Service in Kyiv, which are exclusively internal documents of the State Fiscal Service. This was done without studying any materials or documents describing the economic activities of the company, in other words, without proper justification, the company states.

Olam Ukraine stressed that these investigative actions were carried out with significant violations of the legislation in force, in particular:

• the searches were conducted as part of criminal proceedings without taking adequate and less burdensome measures for the company to ensure that the lawful business activities of Olam Ukraine were not impeded, in particular by granting temporary access and seizing copies of relevant documents;
• the investigative actions were in fact carried out in violation of the company's and its officials' right to defense, as the searches were initiated before the arrival of defense lawyers, despite the fact that the investigator had been notified of their arrival;

• during the search the hard drives of the accounting department of Olam Ukraine were seized, which will inevitably cause disruptions in the work of the company and delays in payment under contracts entered into by Olam Ukraine with suppliers, problems in submitting reports, etc;

• despite the fact that the resolution to search the residential premises of the company's chief accountant contained an error in the address, which was pointed out by the investigator, the investigators did carry out the search, which is a material breach;

"Representatives of the pre-trial investigation body did not hesitate to climb over the fence to enter the adjoining territory of the private house of the Olam Ukraine official before a search warrant was served, causing nervous stress, resentment and confusion over persons who break into private territory," the company officials comment.

• the company and officials were not given a copy of the search report following the searches, only photocopies in some cases;

"The search of the officials' residential premises was carried out as those allegedly 'used by Olam Ukraine' which, of course, is not true since the listed residential premises are private residences. Unfortunately, no purpose other than a planned action of pressure in the form of intimidation and blocking the work of a company with foreign investments can be seen in the actions of law enforcers," the press service writes.

Olam Ukraine believes that the aforementioned investigative actions were not aimed at establishing certain circumstances and obtaining evidence in criminal proceedings, but rather at creating obstacles to the lawful economic activities of the company and exerting psychological pressure on officials. In addition, these actions cast doubt on the company's future investment plans in Ukraine and may lead to a review of such plans in favour of investing in other jurisdictions with a more reliable and predictable investment climate.

"Instead of helping businesses, we experience such unpleasant events that not only suspend the activity of Olam Ukraine for a day, they create obstacles in further work, administrative resource costs, involvement of lawyers to protect violated rights, return the company's property and restore regular operations," the company argues.

Olam Ukraine adds that in the course of the searches, the investigators and operational officers repeatedly and explicitly stated verbally that this was only the beginning, and further interrogations, searches, etc. would be carried out.

"The company hopes that these outrageous violations are an isolated case, and in order to prevent them from becoming systemic, it will seek protection both in the relevant courts and by appealing to industry organisations and diplomatic institutions of the Republic of Singapore," Olam Ukraine stresses.