How Ukrainian notaries defend bloody Russian money

A stable organized group has formed in the notarial sphere.

The resistance to the sanctions process is enormous. All possible resources are being thrown into protecting assets and removing them from sanctions. We have already reported on the "postal terror" from former owners, amendments to the statutory documents, and even dubious stock emissions. This time, together with Trap Aggressor, we will show an example of how "black" notaries help counteract the sanctions process, and how the Higher Qualification Commission of Notaries covers for colleagues instead of controlling their integrity, as written by the Chairman of the StateWatch Board, Oleksandr Lemenov, on the ZN.ua website.

At one time, dozens of betting companies operated in Ukraine, including those with parent companies from the Russian Federation. After the start of full-scale war, some of them independently ceased operations. Some received sanctions from the Ukrainian state. However, since the industry had long gone online, the operation of betting companies required not only websites where players place bets but also a financial infrastructure that provides circulation tools between the player and the bookmaker.

Thus, in Ukraine after February 24, 2022, both the companies (for example, "Parimatch") and the financial companies related to them (for example, Royal Pay Europe) fell under sanctions. The latter is discussed below.

In Ukraine, before the full-scale Russian invasion, Megabank operated halfheartedly. I think most of you haven’t heard of this name since the bank was more regional than national. By the end of 2021, Megabank had clearly defined financial difficulties, and in early February 2022, it mortgaged real estate in Kharkiv to two foreign companies—Latvian SIA Royal Pay Europe (owner—Russian citizen Sergey Kondratenko) and Cypriot Startling Limited (owner—Russian citizen Galina Kondratenko). An exchange occurred: the Kondratenkos to the bank—loans, and the bank to the Kondratenkos—pledge of several buildings.

In July 2022, the National Bank of Ukraine, considering the pitiful liquidity state of the financial institution and its non-compliance with mandatory criteria, revoked Megabank’s license and launched its liquidation process. Megabank’s legal challenge involving the Deposit Guarantee Fund against the two mentioned companies was not very successful.

We won’t delve into the detailed relationships between the Kondratenkos and the bank, but they are clearly not strangers to each other.

Specifically, under the terms of an initial deposit of 1.5 million euros, the property was not supposed to be secured by the bank. Moreover, the bank reassigned its property rights to a company "Option-Trade," owned by Viktor Subotin (the main shareholder of Megabank) and his wife Olena Subotina (CEO of 75% state-owned "Turbine Plant"). Later, the bank transferred part of the premises into a mortgage to the Kondratenko couple who helped to "withdraw."

Thus, firms owned by the Kondratenkos were able to resell 361 million UAH worth of real estate, which the bank pledged. It is understood that the state planned to use this real estate to settle Megabank’s debts. Transfer from one legal entity to another controlled by the Kondratenkos was intended to avoid further recovery to the state’s benefit, and now I will explain why.

On January 12, 2023, President of Ukraine Volodymyr Zelenskyy imposed economic sanctions and restrictive measures on the Latvian company Royal Pay Europe for five years. These measures, provided by the National Security and Defence Council, include asset blocking in Ukraine, prevention of capital withdrawal outside Ukraine, and suspension of economic and financial obligations.

As a result, selling property mortgaged to a foreign firm directly violates current laws, including its sanctions part. Already on March 10, 2023, similar sanctions were imposed for 50 years against the Cypriot company Startling Limited, along with personal sanctions for the Kondratenko couple and the director of one of their companies, Cypriot citizen Aaron Mkhitaryan.

The cause for such a radical state machine turn against the above-listed individuals is the connection with the Russian betting company 1xBet. Rumors circulated in the market that Sergey Kondratenko had or has a stake with the said bookmaker, but this has yet to be proven.

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Now the key point—a certain Nataliya Dzhun purchased the mortgaged real estate from Latvian Royal Pay Europe and Cypriot Startling Limited given by Megabank. However, as of the purchase date, February 16, 2023, that same Latvian firm was already under sanctions. Why notary Mykola Zhuravel did not check the registry for seller restrictions and proceed with this transaction? Perhaps he forgot...

Why does the Kondratenko couple need this? To withdraw even these few real estate objects from the Ministry of Justice’s sight and avoid their recovery to the state. Hence, they sell various properties, likely by pre-conspiring with buyers and unscrupulous notaries.

There’s more intrigue. Megabank appeals to the Anti-Raider Commission of the Ministry of Justice, claiming illegal dispossession aiming to avoid sanctions. After this, the commission makes a decision to submit a proposal for the revocation of this notary’s certificate. Fair, as the notary should have checked that the parent company was under sanctions and refused to perform notarial acts.

But as it turned out, the Ministry of Justice currently cannot revoke this notary’s certificate because the Higher Qualification Commission of Notaries, primarily composed of notaries, delayed the review so much that there’s nothing left to decide.

While the qualification commission lingered, the notary involved in these reregistration actions appealed to the court and received an injunction forbidding the Ministry of Justice and commission from reviewing the certificate revocation submission. Furthermore, the qualification commission dragged the time until its members’ term ended. A pure coincidence? And convening a new commission requires gathering all notaries of Ukraine. It’s challenging because the president of the notarial chamber (assembly of all notaries) doesn’t want to conduct this gathering (since no notary is thrilled that the qualification commission exists at all). Thus, the commission is now unauthorized, so neither our specific notary nor any other can be held accountable.

An unpresentable picture emerges: some notaries across the entire vertical, using legal and not entirely methods, are fighting on the side of sanctioned persons, ignoring the lawful demands of the Ministry of Justice. The judicial system supports them, providing injunctions forbidding the notary’s license revocation. A wide window of opportunity has been created by certain representatives of this state for anyone planning to withdraw their assets from state sanctions.