Ukraine is reforming the Asset Recovery and Management Agency. Why is this important?

The Verkhovna Rada approved in the second reading draft law No. 12374-d, which provides for the reform of the National Agency of Ukraine for the Identification, Tracing and Management of Assets Obtained from Corruption and Other Crimes (ARMA).

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

253 MPs voted pro. The fact that the law was passed will open up access for Ukraine to €600 million in assistance under the Ukraine Facility program.

The draft law aims to ensure efficient, transparent and corruption-free management of seized assets and balance the interests of the state and owners within the framework of criminal proceedings. Here are the main provisions of the document:

• seized assets remain with the owners, unless this hinders the investigation;
• ARMA will manage valuable assets only when it is economically feasible to do so;
• property that quickly loses value will be allowed to be sold quickly;
• managers will be elected automatically, through a system that minimizes the influence of the human factor;
• measures are provided to prevent abuse, for example, artificially inflating costs;
• control over the activities of managers will be strengthened;
• for financial stability, ARMA will create a separate fund with clearly defined sources of funding;
• The position of ARMA Chairman will be held by a candidate selected through an open and transparent competition, with the participation of an independent external commission.

The draft law also provides for changes to the legislation regulating the work of ARMA and enforcement agencies. In particular, it concerns increasing the qualification requirements for the agencyʼs management, clearer criteria for dishonesty, and prohibitions on holding positions.

Competitions for positions in ARMA should be open, with the participation of the public and international experts. It is also proposed to improve working conditions for ARMA employees to guarantee them adequate material support.

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 must be clear.

The National Agency itself emphasized that their amendments were taken into account in the draft law before the second reading:

• allowed ARMA to manage the corporate rights of the Russian Federation without the consent of the aggressor country;
• strengthened the institutional capacity of the agency: it is now possible to appoint a head, deputies and conduct an external audit;
• the seized funds can be invested in government bonds for the restoration of Ukraine;
• expanded powers to preserve assets;
• ARMA received automated access to registers to search for property;
• ARMA will be able to manage cryptocurrencies — have its own wallets and accounts on exchanges;
• strengthened public control: an independent Public Control Council and an internal control department will be created.
• ARMA employees were provided with unhindered access to the assets they manage.

ARMA will continue to use the “Prozorro” and “Prozorro.Sales” platforms. The selection of managers and the sale of assets through these systems, which the agency has already implemented, remain in effect.

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