Specific Features of Judicial Application of Special Confiscation of Third-Party Property

Author: Mykhailo Zveriev, Paralegal at Grain Law Firm

Any form of deprivation of property against the owner’s will is an evident negative consequence. In criminal law, this measure has traditionally been perceived as punitive, which is confirmed by the placement of Article 59 of the Criminal Code of Ukraine, “Confiscation of Property,” within the section “Punishments and Their Types.”

Alongside this, Ukrainian legislation provides for the institution of special confiscation (Article 96-2 of the Criminal Code of Ukraine), which is placed in the section “Other Measures of Criminal Law Character.”

It is called “special” for a reason: this measure may be applied not only to a convicted person but also to a third party who may have no objective connection to the crime, no intent to participate in it, and against whom no conviction has been rendered.

This article analyses how courts balance the property rights of third parties with the interests of justice.

When property becomes “toxic”: the regulatory framework

Paragraphs 1–4 of Part 1 of Article 96-2 of the Criminal Code of Ukraine define four grounds for special confiscation:

• property that is the result of a crime or income derived from it;
• property used to induce the commission of a crime or to finance its aspects;
• property that was the subject of a crime (except for property subject to return to its rightful owner);
• property used as an instrument or means of committing a crime.

For third parties, the key threshold is awareness. In order to confiscate property from a third party, the court must establish a set of factual circumstances.

1. The person received the property from the offender (free of charge or at a significantly reduced price).
   A key factor:
2. The owner knew or should have known about the criminal origin or intended criminal use of the property.

The application of paragraphs 1–3 is relatively rare in judicial practice and does not generally create systemic difficulties in enforcement. The most contentious issues arise under paragraph 4 of Article 96-2 of the Criminal Code of Ukraine — confiscation of instruments of crime, most commonly vehicles.

Marital share as a “shield” against confiscation

The Supreme Court consistently protects the rights of a bona fide co-owner. If a vehicle is acquired during marriage, it constitutes joint marital property.

Thus, in case No. 520/16693/15-к (Supreme Court ruling of 01.12.2020), the Court held that confiscation of a vehicle was unlawful, as the wife was unaware of her husband’s criminal intent.

A similar position was expressed in case No. 676/2199/19 (ruling of 09.04.2020). The Court emphasized two key points:

• confiscation of a 1/2 share of a vehicle is impossible if it results in the loss of its functional purpose;
• a criminal court has no authority to divide marital property or determine its legal regime.

Conclusion: If the share of the offender cannot be separated in kind without damaging the item, and the other co-owner is bona fide, special confiscation is not applicable.

Exception: the “nominal owner”

However, protection of property rights is not absolute where the court identifies signs of fictitious ownership. If a person formally owns the property but is фактично disengaged from it (“passive owner”), special confiscation may be applied.

The Supreme Court has noted that if a person is merely a “title” owner and does not show any interest in the property, references to lack of awareness will not prevent confiscation (Supreme Court ruling of 09.04.2019 in case No. 138/2740/16-к).

Conclusion

Judicial practice demonstrates that courts seek to balance the principle of inevitability of punishment with the protection of property rights:

• Good faith is the key criterion. If a third party (e.g., spouse) was unaware of the crime, the regime of joint marital ownership serves as an effective safeguard against confiscation of indivisible property.
• Real rather than formal ownership matters. The status of a “nominal owner” does not grant immunity. Courts assess the actual connection of a person to the property, not merely the entry in registration documents.