Prosecutor General’s Office of Ukraine jointly with the Shevchenkivsky District Court in Kyiv froze bank accounts of ArcelorMittal Kryvyi Rih. Prosecutors ordered Ukrainian banks to halt all transactions in these accounts based on 30 November 2021 court ruling in tax evasion probe launched in November. Ukrainian steel giant ArcelorMittal Kryvyi Rih has termed ramifications from Prosecutor General’s decision to freeze company’s bank accounts as unjustified. ArcelorMittal Kryvyi Rih’s Chief Administrative Officer Mr Artyom Filipyev said “The rule of law as a principle seems to have eroded in Ukraine. After the district court ruled in favor of ArcelorMittal and while the civil appeal of authorities is pending, aggressive measures were taken by General Prosecutor against the company, in contravention to the letter and the spirit of the law. It is difficult to understand what is driving this action, which is unheard of in any reasonable jurisdiction around the world. It’s outrageous that the law enforcers are prepared to paralyze the operation of the country’s largest steel and mining company and to put at risk more than 20,000 people who will not be paid their salaries on time. These charges and the account freezes are groundless, and we will fight to protect the legitimate interests of our business and its numerous employees, suppliers and partners.”ArcelorMittal said “This action is related to the way the company calculates tax payments for the use of subsoil for mining. It is a matter which has been ongoing for some time and has previously been dealt with through the appropriate legal channels. On November 4, the administrative district court upheld ArcelorMittal Kryvyi Rih’s position by dismissing the civil case against the company brought by the State Tax Administration, ruling that ArcelorMittal Kryvyi Rih has paid all appropriate taxes in full and in line with Ukrainian state tax legislature. The tax authorities have filed an appeal and the company is preparing to defend its position in the civil court of appeals.”ArcelorMittal added “Even after the administrative court ruled in favor of ArcelorMittal Kryvyi Rih, on November 17 the Prosecutor General’s Office and the Security Service of Ukraine brought criminal charges against an ArcelorMittal Kryvyi Rih senior executive. The company considers these charges baseless and a clear example of political pressure on a major foreign investor. Still, the criminal charges, however contrived, are brought against an individual, not the company. There is no current tax related civil proceeding against ArcelorMittal Kryvyi Rih and therefore no legal grounds to freeze the company’s accounts.”On November 17, the Prosecutor General’s Office and Ukraine’s Security Service charged the financial director of ArcelorMittal Kryvyi Rih with tax evasion. The law enforcement agencies didn’t publish the suspect’s name, however, Ukrainian media reported that CFO Mr Serhiy Plychko is the one being charged in the case. According to the investigation, between 2017 and 2019 the financial director and the company’s chief accountant forged the sum received from the extraction of minerals, thus not paying UAH 2.24 billion (USD 82 million) in rent fees. The frozen sum is now considered case evidenceIn a separate case, the Kyiv District Administrative Court rejected a civil lawsuit against ArcelorMittal Kryvyi Rih filed by the State Tax Service on 4 November. The company filed an appeal with the tax authorities to drop all charges against it.
Prosecutor General’s Office of Ukraine jointly with the Shevchenkivsky District Court in Kyiv froze bank accounts of ArcelorMittal Kryvyi Rih. Prosecutors ordered Ukrainian banks to halt all transactions in these accounts based on 30 November 2021 court ruling in tax evasion probe launched in November. Ukrainian steel giant ArcelorMittal Kryvyi Rih has termed ramifications from Prosecutor General’s decision to freeze company’s bank accounts as unjustified. ArcelorMittal Kryvyi Rih’s Chief Administrative Officer Mr Artyom Filipyev said “The rule of law as a principle seems to have eroded in Ukraine. After the district court ruled in favor of ArcelorMittal and while the civil appeal of authorities is pending, aggressive measures were taken by General Prosecutor against the company, in contravention to the letter and the spirit of the law. It is difficult to understand what is driving this action, which is unheard of in any reasonable jurisdiction around the world. It’s outrageous that the law enforcers are prepared to paralyze the operation of the country’s largest steel and mining company and to put at risk more than 20,000 people who will not be paid their salaries on time. These charges and the account freezes are groundless, and we will fight to protect the legitimate interests of our business and its numerous employees, suppliers and partners.”ArcelorMittal said “This action is related to the way the company calculates tax payments for the use of subsoil for mining. It is a matter which has been ongoing for some time and has previously been dealt with through the appropriate legal channels. On November 4, the administrative district court upheld ArcelorMittal Kryvyi Rih’s position by dismissing the civil case against the company brought by the State Tax Administration, ruling that ArcelorMittal Kryvyi Rih has paid all appropriate taxes in full and in line with Ukrainian state tax legislature. The tax authorities have filed an appeal and the company is preparing to defend its position in the civil court of appeals.”ArcelorMittal added “Even after the administrative court ruled in favor of ArcelorMittal Kryvyi Rih, on November 17 the Prosecutor General’s Office and the Security Service of Ukraine brought criminal charges against an ArcelorMittal Kryvyi Rih senior executive. The company considers these charges baseless and a clear example of political pressure on a major foreign investor. Still, the criminal charges, however contrived, are brought against an individual, not the company. There is no current tax related civil proceeding against ArcelorMittal Kryvyi Rih and therefore no legal grounds to freeze the company’s accounts.”On November 17, the Prosecutor General’s Office and Ukraine’s Security Service charged the financial director of ArcelorMittal Kryvyi Rih with tax evasion. The law enforcement agencies didn’t publish the suspect’s name, however, Ukrainian media reported that CFO Mr Serhiy Plychko is the one being charged in the case. According to the investigation, between 2017 and 2019 the financial director and the company’s chief accountant forged the sum received from the extraction of minerals, thus not paying UAH 2.24 billion (USD 82 million) in rent fees. The frozen sum is now considered case evidenceIn a separate case, the Kyiv District Administrative Court rejected a civil lawsuit against ArcelorMittal Kryvyi Rih filed by the State Tax Service on 4 November. The company filed an appeal with the tax authorities to drop all charges against it.
