The Verkhovna Rada supported the reform of ARMA. Why is this important?

The Verkhovna Rada supported in the first reading draft law No. 12374-d, which provides for the reform of the Asset Recovery and Management Agency (ARMA).

This was reported by the MP from “Voice” Yaroslav Zheleznyak.

233 MPs voted pro. The adoption of this law is one of Ukraineʼs obligations under the Ukraine Facility program, with a deadline of March 31. The Ukraine Facility is a macro-financial assistance to Ukraine of €50 billion, designed for four years. Ukraine will receive the money if it continues democratic reforms, guarantees a multi-party parliamentary system and the rule of law, and respects human rights.

The draft law envisages creating conditions for cost-effective and corruption-proof management of seized assets, as well as for balancing public and private interests in criminal proceedings. Here is what the document proposes:

• assets remain with the owners unless this interferes with a criminal investigation;
• ARMA will manage valuable assets if it is economically justified;
• quick sale of assets that can quickly lose their value;
• involving professionals — arbitration managers and private executors — to manage assets;
• automated manager selection system to eliminate the influence of the human factor;
• preventing abuse, in particular overstating asset management costs;
• increasing control over how assets are managed;
• financial stability of ARMA — creation of a special fund and determination of sources of its replenishment;
• a transparent competition for the position of head of ARMA and an independent external system for assessing the effectiveness of the agencyʼs work.

The document proposes amendments to the laws regulating the work of ARMA and enforcement bodies. The main innovations may include strengthening the requirements for the head of ARMA — higher standards of qualification and integrity, an expanded list of reasons why a person cannot hold this position. And also — updating the competitive selection process to involve international experts in the process and make it transparent. ARMA employees will also be appointed through an open competition, in which representatives of the Public Control Council under the National Agency and representatives of public associations nominated by the assembly will participate.

The draft law also proposes to strengthen guarantees of adequate material support for the employees of the National Agency.

Another key change is the increase in the threshold for asset value for transfer to ARMA from 200 to 500 subsistence minimums. The terms for transferring assets to management should be clear.

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