UAH 1.7 mn seized funds returned to pet stores network

Tax issues: Criminal proceedings against business initiated by State Fiscal Service Kharkiv region

Complainee:  The State Fiscal Service (SFS), Main Investigation Department of Financial Investigations of the SFS
Complaint in brief: The Business Ombudsman Council received a complaint from a pet stores network. The company complained that law enforcers conducted 12 searches of its stores in Kharkiv and Kyiv and seized computers, documents and funds worth UAH 1.7 mn. According to the SFS, the pet stores network evaded tax. Tax authorities found out that during 2018-2020 the company allegedly did not pay 78k UAH. Disagreeing with property seizure, the pet store chain challenged investigators’ actions in court. As a result, the court ordered the police to return the company’s seized property, but the complainant could not receive the seized items for over 3 months. In addition, the complainant was concerned that the restitution of property could be complicated or delayed due to the SFS of Ukraine reforming process, which had just been launched. The company turned to the BOC for assistance.
Actions taken: The investigator examined the circumstances of the case and found the complaint substantiated. The Council recommended that the Prosecutor General’s Office of Ukraine and the SFS return temporarily seized property to the complainant in accordance with the court ruling. In a letter to the regional Prosecutor’s Office Head, the Council stressed that the seized property should be returned to the owner as soon as possible, as the court did not satisfy the investigator’s motion on property arrest. However, investigators returned only computers and documents to the complainant. The Council again appealed to the Prosecutor General’s Office and the SFS with a request to return seized UAH 1.7 mn to the company.
Result achieved: The investigators followed the Council’s recommendations and returned the company’s property in full. The case was closed.

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