ARMA Spends Almost 18 Months Launching Tenders to Find Managers

According to TI Ukraine experts, on average, a year and a half elapse between the moment the ARMA receives a decision on the management of seized assets and the publication of a lot in the Prozorro system. 

According to the processed data on the procurement of property managers’ services in the Bi.Prozorro system for 2023-2024 and the response of the ARMA to the request of our organization, the Agency regularly and significantly delays the transfer of seized assets for management. 

The lengthiest although successful bidding concerned non-residential premises in Kyiv. It took the ARMA many as 1,316 days to announce the tender. These assets appear in the case of an alleged bribe to Hroisman from former MP Mykytas for the appointment of the latter’s assistant to the position of the president of the Ukrbud state corporation. The ARMA received the decision to transfer the premises for management on December 28, 2020, and the lot was put up in the procurement system on August 5, 2024.  

The fastest term in which bidding was organized amounted to 49 days. They concerned the corporate rights of PJSC MC Ukrnaftoburinnya. These assets appear in the case of alleged abuse by officials of PJSC NJSC Nadra Ukrainy and a number of commercial structures, due to which Ukraine de facto lost the right to the Sakhalin oil and gas field in the Kharkiv region. In this case, the ARMA received the decision on May 4, 2023, and the lot was put up in the Prozorro system on June 22.  

“The reasons for such delays are difficult to understand. The problem is also that even a large number of announced tenders do not take place at all because there are no participants in these competitions. This is probably due to the fact that the level of trust in the ARMA has not yet increased, and the tender process itself is too complex and not transparent enough.  

In general, until the asset is transferred to the manager, it either stands idle or, if the arrest is of poor quality, continues to bring income to its owner. The ARMA, as a service body in the criminal justice system, must ensure high-quality management of seized property. Then, in the case of overturned seizure, the owner will have no claims against the state, and in the case of a confiscated asset, it will still be attractive for investment for future buyers,” notes Pavlo Demchuk, legal advisor to TI Ukraine.  

For the situation with asset management to change, it is necessary to ensure planning before the transfer of assets to the ARMA, to formalize the tender procedure so that it is clear and definite both for the owners of the seized property and for potential managers. ARMA employees, for their part, must efficiently fulfill their duties in terms of seized property management.  

Overall, the matter of seized asset management remains pressing for Ukraine. Thus, the need to ensure a transparent procedure for seized assets is directly spelled out in the Ukraine Facility Plan, and the European Commission emphasizes the ARMA reform in its latest report on Ukraine.