Monopoly on ransom: why HACC blocked Kachnyi’s three million but let Pashynskyi’s half-billion through

Behind high-profile billion-hryvnia plea deals in top-corruption cases, a dangerous legal collision is taking shape — one that could alter the very nature of anti-corruption justice in Ukraine.

The issue is not only the size of fines or compensation, but a fundamental question: who becomes the steward of funds collected in the state’s name. The courts now stand at a fork between protecting the public interest and procedural convenience, drawing private charitable foundations in as intermediaries.

Two September rulings of the High Anti-Corruption Court illustrate the problem clearly. On 24 September, HACC approved a plea agreement with Serhii Pashynskyi, former acting head of the Presidential Administration. The case concerned events in spring 2014 — misappropriation of seized petroleum products that caused the state losses of more than UAH 817 million. Having admitted guilt under Part 2 of Article 364 and Part 1 of Article 255 of the Criminal Code of Ukraine (abuse of power with grave consequences and participation in a criminal organisation), he avoided imprisonment. His sentence was limited to a fine, a one-year ban on holding public office, and a financial obligation totalling UAH 1.1 billion.

Of that sum, UAH 600 million is to go to the state budget over two and a half years. The rest is allocated differently: UAH 400 million to the Come Back Alive foundation (in cash or as weaponry), and another UAH 100 million to the account of the Sternenko Community charitable foundation within 30 days, earmarked directly for the needs of the Defence Forces.

Yet only days later, at the end of September, the same HACC refused to approve another agreement (dated 26 August 2026) between an SAPO prosecutor and MP Oleksandr Kachnyi of the banned OPZZh party. The deputy was charged with illicit enrichment (Article 368-5 of the CCU) of more than UAH 12.7 million. Kachnyi admitted guilt, agreed to special confiscation of nearly UAH 13 million, and undertook to transfer UAH 3 million to Come Back Alive to counter enemy drones. The court rejected the deal.

The refusal in Kachnyi’s case rested on several key points that undercut the logic applied in Pashynskyi’s case.

First, HACC expressly held that transferring funds to a private charity’s account removes that money from the control of the parties to the agreement and of the court itself. The court therefore cannot verify that the arrangement meets the Criminal Procedure Code’s requirements for protecting the “public interest”. It offered a coherent alternative: a National Bank special account or Ministry of Defence accounts. There, the money remains public and goes to state procurement or directly to military units — without becoming income of a private legal entity with its own brand.

Second, the court stressed the fiction of “voluntariness”. When a donation becomes a non-negotiable condition for approving a plea deal and avoiding prison, it ceases to look like a charitable gift.

There was also a further procedural ground for refusing Kachnyi: the parties sought special confiscation of property titled to a third person — Ihor Zhukovskyi. The court held that a notarised consent was not enough to establish grounds for confiscation. Still, it treated the UAH 3 million donation as a separate obstacle in its own right.

The Specialised Anti-Corruption Prosecutor’s Office reacted sharply, calling the ruling an artificial barrier. SAPO’s argument is that major foundations enjoy public trust and open reporting, while state accounts do not make it possible to trace every hryvnia to its intended use. In substance, the debate is about who should control multi-million corruption recoveries — the state treasury or a private structure.

Analysing the legal mechanics requires the statute book. Chapter 35 of the CPC (Articles 468–476) governs plea agreements, but no article requires donations to be written into them. Softening of sentence here rests on Part 2 of Article 66 of the CCU, which allows the court to consider circumstances outside a closed list. Prosecutors fit this under Article 470 of the CPC (public interest).

In that light, the Cassation Criminal Court of the Supreme Court ruling of 19 July 2023 (case No. 442/2407/22) is telling. It treated transferring bail to the needs of the Armed Forces as a mitigating factor. The cassation court’s reference point, however, was a state special account — not a foundation’s account.

Legally, a transfer to a foundation is neither a fine nor compensation for damages, but a voluntary charitable donation. Under Part 3 of Article 16 of the Law “On Charitable Activity and Charitable Organisations”, a foundation may lawfully spend up to 20% of its annual income on administrative costs (salaries, logistics, rent). Article 11 of the same law bars distribution of profits among founders, yet the 20% ceiling for running the organisation remains lawful.

That means when UAH 100 million lands in a private organisation’s account (for example, the Sternenko Community foundation, registered only on 15 January 2025), the payment becomes its income. Even if marked as earmarked (“directly for weaponry”), it counts toward the foundation’s total annual income, from which the administrative cap is calculated. Tracking which hryvnia went to a drone and which to staff salaries is nearly impossible — and certainly not within the court’s power. A fully lawful “shadow” thus appears, with hallmarks of corruption risk: a named recipient, conversion of state recoveries into the foundation’s political and reputational capital, and no direct accountability chain to the army.

The practice of sending money to the military grew under martial law. In February–March 2022, judges began transferring posted bail to Armed Forces special accounts (for example, UAH 2.6 million under a HACC decision of 28 February 2022). The payee then was exclusively the state.

Gradually, donations entered the text of plea agreements themselves. The baseline precedent is usually cited as the HACC judgment of 3 March 2023 (case No. 991/175/23). Practice then spread to district courts, and alongside state accounts came charitable foundations’ accounts — including named ones. The scale is striking: according to HACC, in 2025 alone, 72 of 109 judgments rested on plea deals through which the Armed Forces received more than UAH 321 million. Overall, the figures run into the billions.

Behind the upbeat reports, several details get lost. For example, under the CCC SC ruling of 13 August 2024 (case No. 569/730/22), approving a plea deal does not strip the state of the right to sue for civil compensation for loss. So Pashynskyi’s UAH 600 million is not repayment of the UAH 817 million loss from 2014 adjusted for the present value of money.

There is also Article 476 of the CPC, which provides for setting aside a judgment if the plea terms are not performed. But if UAH 100 million reaches a foundation’s account on time, the agreement is treated as performed in procedural terms. Even if procurement reporting is vague, the court will have no leverage — because, as the Kachnyi ruling notes, it loses control of the funds the moment they are credited to a private person’s account.

One way or another, good intentions have put the system to a hard test. Channelling half a billion through private foundations in one case while refusing on principle to allow a similar three million in another creates a double-standard precedent. The state must decide: will anti-corruption judgments fill the state budget and direct Defence Forces accounts, or become a tool for parallel financial flows to selected charities.

See also: attorney–client confidentiality and verifying the authenticity of synthetic audio and video recordings in criminal proceedings.