NABU detectives and SAPO prosecutors are increasingly charging suspects with laundering criminally obtained property. This is a fairly complex criminal offense to prove, and its wording in the Criminal Code has been amended several times.

In this article, we briefly explain what property laundering is and what elements must be established to convict a person of this crime.

Why did liability for legalization of property arise?

It is worth starting with the point that property laundering did not become a crime in and of itself — it was a response to global threats:

• Fighting drug trafficking. Historically, money laundering was closely tied to the drug trade. In the 1980s, the international community realized that to stop the drug barons, it was not enough to simply catch couriers — the barons had to be stripped of the ability to use the profits from the drug trade. Ukraine officially joined this process by signing the UN Vienna Convention in 1989.
• Globalization of crime. Crime turned transnational — money earned in one country was easily wired to another. This pushed countries to set common rules of the game so that criminals could not find a “safe haven” for their assets.
• Economic logic. The core idea was that crime loses its purpose if the criminal cannot spend what they have earned. Criminalizing laundering became a way to make criminal activity economically unprofitable.
• European integration and Ukraine's reputation. For Ukraine, the path to the European Union was an important driver. International organizations such as FATF and MONEYVAL set a requirement: if a country wants to be a reliable partner, it must have effective laws against “dirty” money.

In this way, the world agreed: taking a criminal's money is just as important as putting them behind bars.

What is the essence of legalization of property as a phenomenon?

Legalization (laundering) of property is the process of turning “dirty” assets obtained from crime into ones that appear entirely legal. The core idea is that the criminal can freely use these funds in real life without raising suspicion with law enforcement.

In international practice, the money laundering process is traditionally divided into three classic stages:

1. Placement. The first stage, when cash obtained from crime enters the financial system. This often happens through “conversion centers” or by physically moving large sums of cash across borders.

2. Layering. At this stage, criminals build complex chains of financial transactions to obscure the trail as much as possible and distance the funds from their illegal source. This includes transfers between accounts, changing the form of assets (for example, buying cryptocurrency), or disguising the true nature of the income.

3. Integration. This is the final stage, where the funds return to the owner already as  legal.  At this stage, the assets are acquired, used, or invested in legitimate businesses or real estate, giving them the appearance of legal origin.

A note: this is an analytical model, not a legal construct. In real schemes, the stages can blend, repeat, or be missing altogether.

Hence the essence of property laundering can be put simply as follows:

• The main goal is to give the possession or use of property an appearance of legitimacy. This is the masking of the true source of the money so that it  blends in  with legal finances.
• Laundering is always a secondary act. A primary (predicate) offense must occur first — for example, bribery, theft, or drug trafficking — which generates dirty money.
• It is not necessarily an elaborate scheme. It can be an ordinary real-estate purchase, a change in the form of money (for example, converting cash into cryptocurrency), or even simply possessing property that has been  stolen.
• From the law's standpoint, the phenomenon becomes a crime when the person realizes (or, given the circumstances, should understand) that the property has a criminal past.

These aspects are reflected in the conduct elements of Article 209 of the Criminal Code of Ukraine, which covers all actions — from acquiring and possessing property to converting and disguising it.

How has Article 209 of the Criminal Code of Ukraine changed after 2020?

After the 2020 reform, Article 209 of the Criminal Code of Ukraine on criminal liability for the legalization (laundering) of criminally obtained property underwent substantial changes — in order to harmonize Ukrainian legislation with international standards.

The key innovations were:

• Introduction of “autonomous” laundering. This is one of the most important changes. Previously, a conviction for laundering required a prior verdict for the main (predicate) offense that generated the proceeds (for example, fraud or bribery). Now, a conviction for laundering is possible without a prior verdict for the main offense: the court can establish the criminal origin of the property within the same proceedings. It is enough to prove that the property has a criminal origin, even if the “thief” themselves has not yet been convicted.
• Use of circumstantial evidence. The text of the article now contains the phrase: property “the factual circumstances of which show that it was obtained by criminal means.” This allows law enforcement to use circumstantial evidence to prove guilt. For example, if a person without official income operates with millions, the court can draw a logical conclusion about the criminal origin of this money based on the totality of circumstances.
• A new standard of awareness of one's actions and their consequences. Liability now arises not only when the person knew for certain about the criminal origin of the money, but also when they should have known. This means that a person cannot simply “turn a blind eye” to an obviously suspicious transaction — they are obliged to exercise reasonable due diligence. That said, this refers to objectively obvious indicators of the property's criminal origin.
• Expansion of the concept of property. Although the article itself uses the term “property,” through its reference to the relevant law this concept now effectively covers any assets: cash, real estate, property rights, and even cryptocurrencies (virtual assets).
• Consolidation of forms of activity. The amendments to the law consolidated in a single paragraph various actions involving criminal property: acquisition, possession, use, disposal, change of form (conversion), or disguise of its true source.

In this way, the state has obtained the tools to more effectively deprive criminals of the very sources of their illegal income and of the ability to obtain it, without waiting years for final verdicts in complex corruption or economic cases.

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Despite this, the practice of applying this article is only gaining momentum and comes with certain difficulties. The use of circumstantial evidence and the concept of “autonomous” laundering — without a verdict for the main offense — may be perceived as a threat to the presumption of innocence. There are persuasive counterarguments to this objection in the relevant research. However, without charging suspects under this article, the practice will not develop. And for Ukraine, this is at once a requirement of European integration and a matter of domestic justice: the public must see that the corrupt not only bear liability for corruption, but also lose the assets acquired with corruption money.