13:17 09.07.2021

ARMA reform bill may harm asset management practice in Ukraine - statement by anti-corruption organizations

3 min read
ARMA reform bill may harm asset management practice in Ukraine - statement by anti-corruption organizations

Transparency International Ukraine and the EU Anti-Corruption Initiative in Ukraine (EUACI) warned MPs against the adoption of bill No. 5141 on the reform of the National Agency for the detection, search and management of assets received from corruption and other crimes (ARMA) in the current version, as it creates new risks and may harm the practice of managing seized assets.

Thus, experts pointed out the shortcomings of the bill. In particular, they emphasize that the document can create preconditions for blocking the sale of seized property that cannot be effectively managed. In their opinion, this will lead to the loss of the value of the seized property or to such expenses for its management, which will significantly exceed its value. This approach is economically disadvantageous and contrary to international practice.

In their conclusions, anti-corruption organizations also note that the emergence of a rule providing for a "different way of managing" assets along with the sale and transfer of assets under a contract creates uncertainty, because the draft law does not contain any description of any other way of management.

"Overestimation of the threshold value of assets that can be transferred to ARMA will reduce the amount of assets in the agency's management, contrary to the idea of the existence of a body. The ability of interested parties to provide ARMA with a court decision to cancel the seizure of assets creates room for abuse, since any interested person can leave the prosecutor behind the asset recovery process. The absence of a requirement for law enforcement officers regarding mandatory consultations with ARMA on the transfer of assets to management will not allow effective planning of the transfer of property and proper management of it," the message says.

According to experts, these norms provide only for limiting the functions of ARMA without taking into account judicial practice, the experience of the Agency and its foreign counterparts. "The document does not propose any positive changes and contradicts Ukraine's international obligations regarding the management of seized assets," says Transparency International Ukraine.

At the same time, the EU Anti-Corruption Initiative in Ukraine in its conclusions draws attention to the fact that bill No. 5141 will not achieve its goals and may harm the practice of asset management in Ukraine: "It does not provide significant reform, but on the contrary creates new risks."

As reported, on June 30, the Verkhovna Rada adopted at the first reading bill No. 5141 "On amendments to the law "On the National Agency of Ukraine for the identification, search and management of assets received from corruption and other crimes," which proposes to increase the efficiency of the search and management system of relevant assets and prohibit their sale pending the entry into force of the court decision.

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