Creating companies in a foreign jurisdiction was the only possible way to pass the assets of Ukrainian President Petro Poroshenko to a reputable international trust for management, the Avellum law firm providing legal counsel for the head of state has said, according to Interfax.
"Companies in foreign jurisdictions are necessary and used for transfers to a blind trust. These companies did not open bank accounts and they did not make any financial transactions. Therefore any allegations of tax evasion are ungrounded," reads a press release from Avellum, issued on the request of the client in connection with the journalist investigation made public on 3 April.
Roshen Confectionery Corporation, founded by President of Ukraine Petro Poroshenko, has been transferred into the trust, and the Ukrainian president is not involved in the operations of the asset, any activities around the asset or the process of its sale, Makar Pasenyuk, managing director of the ICU, a company providing financial advice to the president, has told reporters.
"To date, the trust agreement has been signed, the Roshen asset has been transferred, and the process in this part has been completed," said Pasenyuk. He added that the contract on trust was signed in January 2016. "The contract is indefinite, and its action is not time-bound. It is tied to [Poroshenko’s] post of the president," Pasenyuk said.
The trust was the only possible tool for the head of state to transfer his assets for management or further sale, he stressed.
"After taking the decision on the sale and transfer [of Roshen] to a trust company, the president was not involved in the processes with the asset. The work has been done by a group of hired lawyers, including the ICU group and the law firm Avellum,” Pasenyuk said.
Meanwhile, Pasenyuk noted that that the Ukrainian legislation does not provide for creating a trust structure as a management contract.
"And so it was decided to create a clearer structure. To implement the mechanism of transfer [of Roshen] into a trust, several companies have been registered, including the offshore company Prime Assets Partners Ltd in the British Virgin Islands. This is a common scheme, which is used globally," Pasenyuk said.
"The company was basically opened in Poroshenko's name to prevent it looking like hiding of assets. This company does not facilitate evasion from paying taxes or declaring [assets]. This structure is built on the principle of transparency," a senior lawyer at Avellum, Vadym Medvedev, said.
However, he said that because the statutory funds of foreign companies were not paid and the shares had no nominal value, they are not subject to declaration in accordance with Ukrainian legislation. "However, as soon as the norm on electronic declaration enters into force, all the officials will have to submit data on their income in 2015 in accordance with the new requirements. And then the information [about the offshore company] will have to be specified in the declaration," he added.