When Property Seizure Loses Its Purpose: Recent Supreme Court Approaches

Seizure of property in criminal proceedings is intended to be a temporary procedural measure. In practice, however, it can turn into a prolonged restriction of property rights. For businesses, the consequences may be particularly significant: freezing bank accounts, equipment, vehicles, goods, or other assets can affect contractual performance, settlements with counterparties, and the ability to continue business operations.

The key question in such disputes is not only whether there were lawful grounds for the seizure when it was initially imposed. Equally important is whether those grounds continue to exist months or even years later. Article 174 of the Criminal Procedure Code of Ukraine allows an owner or lawful possessor to seek full or partial lifting of a seizure if they can demonstrate that there is no longer a need for the measure or that the seizure was initially imposed without sufficient grounds.

A change in circumstances after the seizure was imposed therefore often becomes the central issue before the court.

The Lawfulness of a Seizure Must Be Assessed Beyond the Date It Was Imposed

Property may be seized to preserve physical evidence, secure special confiscation, confiscation as a criminal penalty, a civil claim, or recovery of unlawfully obtained benefits. However, the existence of a legitimate purpose at the beginning of criminal proceedings does not mean that the restriction automatically remains justified until those proceedings are completed. Circumstances may change substantially: expert examinations may have been completed, data may have been copied from electronic devices, the necessary investigative measures may have been conducted, the investigation may have moved to another stage, or investigators may have failed to establish a sufficient connection between a particular asset and the alleged criminal offence.

When seeking the lifting of a seizure, it may therefore be more effective to shift the focus from challenging the original court order to demonstrating the absence of a current procedural need for the restriction to continue. This is particularly important where the owner of the property is neither a suspect nor an accused person. Such status does not in itself guarantee the lifting of the seizure, but a prolonged restriction of a third party’s property rights requires proper justification by the state.

A Refusal Does Not Prevent a Subsequent Application

An important benchmark was established by the Joint Chamber of the Criminal Cassation Court within the Supreme Court in its judgment of May 20, 2024, in case No. 712/191/23.

The Court held that investigating judges’ orders fully or partially lifting a seizure, as well as orders refusing to lift a seizure under Article 174 of the Criminal Procedure Code, are not subject to appeal. At the same time, a refusal does not prevent the owner from filing another application for the seizure to be lifted. This distinction has considerable practical significance.

If, following the first refusal, an expert examination has been completed, a particular stage of the investigation has ended, the need to retain an original document or electronic device has disappeared, or other new circumstances have arisen, those developments may provide grounds for a new application under Article 174 of the Criminal Procedure Code. Accordingly, the strategy for protecting property rights does not necessarily end with the first adverse court decision.

The Supreme Court Rejects Procedural Barriers Not Provided for by the Criminal Procedure Code

Another important conclusion can be found in the judgment of the Criminal Cassation Court within the Supreme Court dated February 6, 2025, in case No. 757/37763/23-к.

In that case, an investigating judge returned an application to lift a seizure because of deficiencies in the supporting documents. The appellate court refused to open appellate proceedings on the grounds that such an order was not included in the statutory list of decisions subject to appeal. The Supreme Court drew attention to a fundamental point: Article 174 of the Criminal Procedure Code does not provide for a procedure under which an application to lift a seizure may be returned to the applicant. Unlike the procedure for imposing a seizure, the law does not establish special requirements regarding the form and attachments of such an application, a procedure for leaving it without consideration pending correction, or a deadline for remedying deficiencies. Accordingly, an investigating judge cannot create a procedural mechanism that is not provided for by the Criminal Procedure Code.

This position has broader significance than the formal requirements applicable to a particular application. It concerns the owner’s effective access to judicial review of an existing restriction on their property rights.

What Must Be Proven to Have a Seizure Lifted

Article 174 of the Criminal Procedure Code places much of the initiative for reviewing a seizure on the applicant. It is therefore generally insufficient merely to refer to the duration of the investigation, the absence of a notice of suspicion, or a general interference with property rights. A considerably stronger argument is one that demonstrates what has changed since the seizure was imposed.

For businesses, it may also be important to demonstrate the practical consequences of the continuing restriction: inability to use production equipment, perform contracts, conduct ordinary business operations, or dispose of working assets. This shifts the discussion away from the formal question of whether “the seizure was lawful when originally imposed” toward a different question: does the interference remain necessary and proportionate today?

A Seizure Should Not Continue by Inertia

The modern approach to protecting property rights in criminal proceedings is gradually shifting from a one-time assessment of the lawfulness of a seizure toward ongoing scrutiny of whether its continued application remains justified. This is particularly important in criminal proceedings that continue for years. A temporary procedural measure should not effectively deprive a person or business of the ability to use or dispose of property merely because grounds for its seizure existed at some point in the past.

Supreme Court case law also establishes the procedural boundaries of this protection. On the one hand, a decision of an investigating judge following consideration of an application under Article 174 of the Criminal Procedure Code generally cannot be appealed, although a new application may be filed where appropriate grounds arise. On the other hand, courts may not create additional barriers to consideration of such applications where those barriers are not provided for by criminal procedural law.

Therefore, in disputes over lifting a seizure, the decisive factor is not simply the length of time for which the property has remained restricted. What matters is the applicant’s ability to demonstrate that the procedural purpose of the seizure has already been achieved or no longer justifies continued interference with property rights.