Raiding Under the Flag: When the Fight Against Corruption Becomes Its Cover

When a country is fighting for its survival during wartime, the eyes of the world are fixed on the front line. But today, Ukraine faces another fault line — an internal one. In Kyiv, one initiative after another is being launched that threatens not only the country's reputation but also its international support. It is becoming clear: If Ukraine continues to play with fire, it won't be the front line that collapses first, but trust. And trust underpins something far more critical — money, investment, and allies.

On 17 June, the Verkhovna Rada passed a curious law aimed at 'strengthening the fight' against corruption. Officially, it claims to enhance anti-corruption efforts — in practice, it dismantles them. Under the guise of a 'technical adjustment,' a whole arsenal of loopholes has been introduced to shield the corrupt, from raising the threshold for criminal liability to obstructing lifestyle monitoring. Officials can now legalise their pre-office millions without fear of consequences, and any assets registered in the name of a wife or godfather automatically fall outside the purview of the NACP. Auditors, notaries, and other intermediaries often used to launder money are now beyond the reach of both the state and civil oversight. A parliamentary indulgence, one might say.

Critics of the law — from the specialised Anti-Corruption Action Centre, known for exposing dirty-handed officials, to the Verkhovna Rada's own analysts — have already sounded the alarm. Under the pretext of boosting public trust, this law systematises and legitimises corruption. Corruption is becoming more neatly packaged and less vulnerable to prosecution.

Tame Institutions and Tame Arrests

The second trend is even more alarming. Authorities are tightening their grip on anti-corruption and law enforcement agencies. Loyal figures are being appointed to key roles. Insiders link NABU chief Semen Kryvonos to Deputy Prime Minister Oleksiy Kuleba. At the same time, new legal barriers are hindering investigations. The fight against corruption now looks more like a staged performance for Western embassies. This isn't just a rhetorical issue — it's about real outcomes. Too often, these criminal cases are used as tools for blackmail or corporate raiding.

Particular attention should be paid to the phenomenon of sanctions. Originally conceived as a means of defending Ukraine from collaborators and enemies, the system of sanctions pressure is now being used to eliminate inconvenient businesspeople and seize assets. Under this pretext, both multinational corporations and European partners have come under fire.

These sanctions are increasingly being wielded not to protect the state, but as a cudgel in commercial disputes — with reputational and legal consequences far beyond Ukraine's borders. This is precisely what we see in the cases of the Estonian company Arricano and TIS owner, Monaco resident Alekszej Fedoricsev: foreign investors become targets under trumped-up allegations that fail to withstand legal scrutiny but nonetheless unleash destructive consequences — from asset freezes to plummeting business valuations. Officially, it's all in the name of national security. In reality, it's a conflict of interest cloaked in a national flag.

When Sanctions Backfire on Ukraine

A symbolic case is that of ArcelorMittal. The international giant, which has invested billions in Ukraine, became the target of sustained pressure: first, a criminal case over 'ecocide' (a precedent in Ukrainian jurisprudence), then a tax claim of 1.35 billion UAH (£23.8 million), followed by endless inspections. Although the criminal case was eventually closed, the company's management remains under pressure, and the business remains at risk. Environmental concerns served merely as a pretext. In essence, the message to investors is clear: Even if you follow all the rules, you are not safe.

Investors in green energy have also become victims of Ukraine's unpredictability. At first, they were offered attractive terms — only to be 'rewarded' with unilateral tariff cuts and payment delays. The mechanisms of the Guaranteed Buyer system began to stall, prompting companies to turn to international arbitration. Cases are now being handled in Stockholm and by ICSID. The claims already amount to tens of millions of euros. And every such case is another nail in the coffin of Ukraine's investment climate.

The case of Arricano deserves its own chapter. This Estonian investor built Sky Mall in Kyiv. He was placed under Ukrainian sanctions, allegedly for doing business in Crimea — though no evidence was ever shown. Dragon Capital co-owner Tomas Fiala openly called the government's actions an attempted corporate raid. Under the cover of sanctions pressure, efforts were made to wrest the asset from foreign shareholders. The business came under seizure, and court proceedings were left in limbo. The message was clear: your investments are not welcome here.

But the most striking and scandalous example is the case of Alekszej Fedoricsev. A businessman who invested hundreds of millions of dollars into port terminals in the Odesa region, he found himself at the centre of criminal prosecution over a decade-old accusation. Officially, the case concerns allegedly undervalued grain purchases from the State Food and Grain Corporation. But in reality, the situation resembles a commercial raid carefully disguised as an anti-corruption measure.

According to the defence, Fedoricsev received a letter back in 2017 from blackmailers offering to 'settle the matter' for $25 million (£18.5 million). He refused. Soon after, a NABU case was opened against him. Even though Ukrainian courts repeatedly lifted the asset seizures, investigators managed to secure international legal assistance from Italy. There, a court in Florence — without delving into the substance of the case — froze assets worth tens of millions of euros. However, it is likely that this arrest decision will ultimately be deemed legally untenable.

Fedoricsev claims to be the victim of an organised blackmail scheme. His lawyer, the prominent Zabaldano, presented transcripts of phone calls in which key figures admit to bribing Ukrainian investigators and forging signatures.

Among the evidence is the confession of one suspect who said he spent $2.4 million (£1.7 million) to exert pressure through Ukraine's law enforcement system. Amid media noise, amplified by Italian press coverage, the case went international. But instead of a fight against corruption, we see Ukrainian sanctions and investigative tools being exported — using European jurisdictions as instruments of pressure.

Ukraine currently stands at the forefront of global attention. But while Western leaders campaign for its support, a domestic scenario is unfolding that could undo all previous progress. Pressure on businesses, manipulation of sanctions, and corruption impunity for officials all point in one direction: the erosion of trust.

If this parade of investor cases — from ArcelorMittal to Fedoricsev — continues, the West will begin asking questions. If Ukraine itself is undermining the rule of law and treating investors with contempt, why should it expect help? If the government indulges in kleptocracy, who will continue to fund it?

The core issue is that Ukraine risks becoming an inconvenient ally. And when sanctions and corporate raiding become systemic, the entire framework of support for Ukraine may start to crumble.

About the author: Patrick Maxwell is an English journalist, covering international finance, politics, as well as cultural developments.