What is civil asset forfeiture and its consequences?

Civil asset forfeiture is a mechanism under which a court may declare a public official’s assets unjustified and recover them for the benefit of the state. Its key feature is that it is not a criminal penalty: property may be recovered without proving that the person committed a specific corruption offence or obtaining a criminal conviction.

Under Ukrainian law, this procedure is officially referred to as the recognition of assets as unjustified and their recovery for the benefit of the state. In legal practice, it is commonly called civil asset forfeiture because such cases are considered under civil procedure rules. They fall within the jurisdiction of the High Anti-Corruption Court.

What the procedure involves

The central question in a civil asset forfeiture case is whether a person could lawfully acquire particular property in light of their official income and verified sources of funds.

If the value of an apartment, vehicle, land plot, funds held in bank accounts, corporate rights, or other property substantially exceeds a public official’s lawful income, the state may bring a claim before the court. The prosecutor must explain why the origin of the asset raises doubts. At the same time, the property owner has the right to provide explanations and evidence confirming the lawful origin of the funds.

Such evidence may include:

property sale and purchase agreements;

bank statements and payment records;

loan agreements supported by evidence that the funds were actually transferred;

inheritance or gift documents;

evidence of income from business, dividends, or investments;

documents confirming the sale of previously owned property.

An explanation referring only to “savings,” “family money,” or “a loan from an acquaintance” is usually insufficient. The court may consider whether the transaction was genuine, whether the lender had sufficient financial capacity, and whether the movement of funds can be traced.

Who may be affected

Civil asset forfeiture primarily applies to persons authorized to perform state or local self-government functions. This may include civil servants, local government officials, judges, prosecutors, law-enforcement officers, managers of state-owned enterprises, and other persons required to submit asset declarations.

However, the property does not necessarily need to be registered directly in the official’s name. Risks may also arise in relation to assets registered in the name of a relative, partner, acquaintance, or another connected person if it is established that the public official was the actual owner, user, or source of financing.

For example, a vehicle may be registered in the name of a family member with modest official income but may in fact have been purchased, maintained, and used by a public official. In such circumstances, the court may assess not only the registration records but also the actual facts: who paid for the vehicle, who used it, and who covered repair, insurance, and other expenses.

Which assets may be recovered

Almost any valuable asset may become the subject of civil asset forfeiture: real estate, land plots, vehicles, cash, bank deposits, business interests, securities, crypto-assets, luxury goods, and income generated from such property.

In Ukraine, the procedure applies when the difference between the value of an asset and lawful income reaches the threshold set by law. According to information from the High Anti-Corruption Court, in 2026 the minimum threshold for such a claim is UAH 1,505,250. If the value of unjustified assets exceeds UAH 9,984,000, the situation may indicate a criminal offence of illicit enrichment.

The value of a single asset is not the only relevant factor. Authorities may examine total expenses, assets, income for the relevant period, acquisitions through connected persons, loans, investments, and cash transactions.

Consequences for the owner

The primary consequence is that the property may be recovered for the benefit of the state. Where possible, the asset itself may be recovered, such as an apartment, vehicle, funds held in an account, or corporate rights. If the asset has been sold, concealed, or re-registered, the court may recover its value or enforce recovery against other property of the respondent in an equivalent amount.

Before or during court proceedings, the property may be frozen or seized. This may result in a prohibition on selling real estate, transferring ownership of a vehicle, disposing of funds in accounts, or carrying out registration actions involving a business.

In addition to financial losses, a case involving unjustified assets may cause significant reputational damage. For a public official, this may result in a loss of trust, obstacles to career development, and complications in relations with an employer, banks, business partners, and counterparties.

Civil asset forfeiture does not exclude criminal or other legal liability. If an investigation identifies indications of a criminal offence, inaccurate asset declarations, tax evasion, or other violations, separate proceedings may be initiated.

How to reduce risks

The best protection is clear documentary evidence for every significant source of funds and every major acquisition. This is especially important for transactions involving real estate, vehicles, cash, loans, gifts, inheritance, investments, and assets registered in the names of relatives.

Public officials and related persons should retain contracts, bank statements, receipts, inheritance documents, payment confirmations, tax declarations, and documents proving the origin of income. A formally executed agreement without actual movement of funds may not be persuasive in court.

Civil asset forfeiture is intended to prevent assets whose origin does not correspond to a public official’s lawful income from remaining in private ownership. Financial transparency, properly documented transactions, and timely legal advice are therefore essential to reducing the risk of losing property.

If you have questions or face issues related to civil asset forfeiture, the origin of assets, asset declarations, or the protection of your interests in court, it is advisable to seek individualized legal assistance without delay.

Yevhenii Murchenko, Head of Criminal Law and Procedure Practice at the Bar Association “WINNER Law Firm”.