Criminal Risks in Public Procurement: Where Mistakes End and Crime Begins

Public procurement has traditionally been an area subject to heightened scrutiny by law enforcement and regulatory authorities. An inflated price, a questionable supplementary agreement, acceptance of defective work, or a decision favoring a particular supplier may trigger an audit and subsequently lead to criminal proceedings.

However, recent case law of the Supreme Court of Ukraine demonstrates an important trend: a violation of public procurement legislation does not, in itself, constitute a criminal offense. Criminal liability requires proof of all elements of a specific offense — from the person's authority and form of culpability to the actual amount of damage and the causal link. This distinction is now of fundamental importance to both contracting authorities and suppliers.

From a Procedural Violation to Criminal Proceedings

Procurement-related cases most commonly involve Articles 191, 364, 366, 367, and 368 of the Criminal Code of Ukraine. Depending on the circumstances, Articles 209, 210, 212, 358, 364-1, 369, and 369-2 may also apply. Typical scenarios are well known: payment for work that was not actually performed, overstating the volume of completed work, supplying different or cheaper goods, entering false information in acceptance certificates, creating advantages for a particular bidder, or providing an undue benefit in exchange for winning a tender or securing acceptance of a delivery without proper scrutiny. Yet there is a considerable legal distance between a procurement violation and a criminal offense.

A notable example is the judgment of the Criminal Cassation Court of the Supreme Court dated September 19, 2024, in case No. 761/27823/14-к. The head of a private company submitted construction work certificates containing false information to the contracting authority, after which public funds were transferred. The Supreme Court confirmed that such conduct could be qualified under Article 191 in conjunction with forgery in office. Thus, criminal risk arises not from a defect in the procurement procedure as such, but from a specific mechanism used to misappropriate funds and the role played by a particular individual in that mechanism.

Signing an Acceptance Certificate Does Not Automatically Mean Misappropriating Funds

One of the most significant recent decisions for legal practice was delivered by the Criminal Cassation Court in case No. 161/21477/20. A technical supervision engineer was accused of aiding and abetting the misappropriation of funds allegedly paid for construction work that had not been performed. The Court upheld the acquittal approach because the necessary scope of the individual's authority over the property had not been proven. Supervising the performance of works does not automatically mean exercising control over the contracting authority's public funds. For conduct to be qualified as misappropriation of property through abuse of office, it must be established that the person had specific authority over the relevant property or held a position that enabled them to influence the person to whom the property had been entrusted. This approach is particularly important for technical supervision engineers, procurement officers, and other employees involved only in specific stages of a procurement procedure. In criminal proceedings, demonstrating that a person's signature appears on a document is not enough. It must be established what that individual was actually authorized to decide, what resources they controlled, and how their actions affected the movement of public funds.

An Inflated Price Does Not Automatically Equal Damage

Another problematic category involves so-called overpayment cases. The prosecution's reasoning often appears straightforward: goods were purchased for UAH 10 million, while investigators claim they could have been purchased for UAH 7 million; therefore, the state allegedly suffered UAH 3 million in losses. The Supreme Court imposes considerably stricter requirements on such calculations. In case No. 991/6712/20, the Court stated on October 1, 2024, that an arithmetic difference between prices is insufficient unless the actual market value of the property has been properly established. This means that an expert valuation must take into account the procurement date, technical specifications of the goods, VAT, delivery costs, warranty terms, size of the consignment, payment terms, currency fluctuations, urgency of delivery, and other commercial conditions. For wartime procurement, logistical and security factors must also be considered. Consequently, the mere existence of a cheaper offer on the market does not in itself prove that damage was caused.

Abuse of Office: An Incorrect Decision Is Not Always an Intentional Crime

Another important benchmark was established by the Joint Chamber of the Criminal Cassation Court in its judgment of February 10, 2025, in case No. 757/11969/18-к. For liability under Article 364 of the Criminal Code, it is not necessary to prove a prior agreement between the official and the person who obtained the benefit. However, it must be established that the official was aware that their authority was being exercised contrary to the interests of the service and understood that their actions were aimed at obtaining an undue benefit. This distinction is fundamental in procurement cases. An unjustified rejection of a bid, an improperly formulated tender requirement, or even the unlawful selection of a winning bidder may result in administrative or commercial-law consequences. But such circumstances are insufficient for liability under Article 364 unless the requisite intent is proven. Otherwise, virtually any erroneous decision by a public official could potentially be transformed into a criminal offense.

“Bid Rigging” and Criminal Liability Are Not the Same Thing

Distortion of tender results through anticompetitive concerted practices constitutes a violation of competition law. However, the Criminal Code of Ukraine does not contain a separate criminal offense specifically defined as “bid rigging” or “tender collusion.”

Criminal liability may arise where, in addition to coordination between bidders, the elements of another criminal offense are established — for example, misappropriation of funds, provision of an undue benefit, use of forged documents, fraud, or money laundering. Case No. 922/3456/23 is illustrative in this respect. In December 2025, the Joint Chamber of the Commercial Cassation Court emphasized that the mere fact that the Antimonopoly Committee of Ukraine had established anticompetitive concerted practices was not automatically sufficient to impose other punitive consequences.

The same logic applies in criminal proceedings: every element of the relevant criminal offense must be proven separately.