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(Oct 03, 2012)

On August 23, 2012, the Ukrainian Commission on Financial Markets Regulation approved draft legislation banning financial pyramids in Ukraine and forwarded it to the legislature. The draft is published on the Commission's website. (Proposal on Banning Financial Pyramids in Ukraine [in Ukrainian] (last visited Oct. 1, 2012).) According to the proposed law, people who assist in organizing a pyramid scheme will be prosecuted, together with the formal organizers, even if they received a payment from only one participant in the scam. The draft measure recognizes as assistants those individuals who provide organizers of a pyramid with space, means of transportation, technical services, or any other equipment or who advertise the pyramid and help to attract customers. (Criminal Responsibility for Advertisement of Financial Pyramids [in Russian], SEGODNIA.UA (Aug. 27, 2012).)

A fine and/or imprisonment for a term of from one to three years is foreseen for organizing or assisting in organizing a pyramid; for repeated activities of this nature, the term of imprisonment increases to five years. If a large amount of money or electronic communication or modern information technologies have been used to carry out the scam, a punishment of eight years of imprisonment is prescribed. (Id.)

It appears that the proposed legislation was drafted in response to activities of a notorious Russian businessman who had allegedly initiated a number of financial pyramids and was moving his activities to Ukraine. He had expressed his intention to establish a political party there formed by people who invest in his financial scheme. Russia does not have a law prosecuting initiators of such financial machinations. (Ukrainian Officials Recommend Imprisonment of Organizers of Financial Pyramids, Even if There Is Only One Participant [in Russian], NEWSRU.COM (Aug. 28, 2012).)

Author:

Peter Roudik More by this author

Topic:

Criminal law and procedure More on this topic

Jurisdiction:

Ukraine More about this jurisdiction

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Last updated: 10/03/2012