ARMA Reform Draft Law: Cutting Through the Myths

Qualitative reform of the Asset Recovery and Management Agency (the ARMA) remains one of Ukraine’s key commitments on the path to European integration and securing critical funding under the Ukraine Facility Plan.

Yet the closer Parliament comes to adopting the necessary legislative changes, the more aggressively the ARMA resists the MPs’ proposals. Specifically, Draft Law No. 12374-d, which the Anti-Corruption Policy Committee has finalized and recommended for full adoption, has become a particular target of the ARMA’s resistance.

The Agency’s negative tone toward the draft law became especially pronounced in mid-April, following another public discussion organized by the ARMA. Since then, the number of openly categorical — and at times aggressive — statements against the draft has risen sharply.

The ARMA’s active campaign against the draft law offers a good opportunity to dig into the real reasons behind its resistance and to scrutinize the arguments voiced during the recent public discussion. That’s exactly what we’re about to do.

Why is the ARMA fighting the draft law so hard?

It’s worth recalling that under the Ukraine Facility Plan, the government registered a draft law to strengthen the ARMA’s institutional capacity on December 30, 2024. Shortly after, on January 8 and 14, 2025, MPs submitted two alternative drafts: the first, by Oleksandr Tkachenko, Antonina Slavytska, and others; the second, by Oleksii Movchan, Anastasiia Radina, Yaroslav Zheliezniak, among others.

On February 12, 2025, the Verkhovna Rada adopted alternative draft law No. 12374-d in the first reading, which is intended to serve as the basis for a comprehensive reform of the Asset Recovery and Management Agency.

After that, an active discussion of amendments to the regulation for the second reading continued for more than a month. Finally, at its meeting, the Anti-Corruption Committee recommended the revised draft law for consideration in the session hall, noting significant improvements in managing seized assets.

It’s important to note right away that all versions of the ARMA reform were nearly identical when it came to introducing a competitive selection process for the Agency’s head and mandating an independent external audit. However, they diverged significantly on the issue of managing seized assets. While the government’s draft, still backed by ARMA, proposed regulating asset management procedures through a Cabinet resolution, the revised version spells out these processes directly in the law, while also requiring further detail to be set out in bylaws. Experts argue that this approach is qualitatively better, as it leaves far fewer loopholes for potential abuse by Agency officials.

In addition, Draft Law No. 12374-d introduces a number of provisions that would significantly boost the transparency and efficiency of seized asset management. It expands public access to information on ARMA’s performance, establishes clear oversight mechanisms, and improves asset management procedures. At present, these procedures are not properly regulated: they are only loosely outlined in methodological recommendations approved by the ARMA’s own head. Convenient, isn’t it — when an Agency can single-handedly decide how it operates in such a critical area?

Such changes initiated by MPs on the Anti-Corruption Committee are entirely justified. It’s worth noting that full public access to the Unified State Register of Seized Assets — something the ARMA’s leadership now proudly claims as a voluntary step — was achieved only after persistent pressure from committee members.

Exposing ARMA’s inaccuracies and manipulations

An analysis of the ARMA’s rather active public communication suggests that the Agency’s primary concern is not the introduction of meaningful reforms, but ensuring that its current leadership can continue operating as it has. That’s why, across its publications, the ARMA mainly insists it has already “transformed” since 2023, a talking point that runs through all of its messaging in recent months.

However, when the ARMA addresses the reform, the clarity of its position shifts noticeably — a trend that became particularly obvious after the public discussion on April 15. Over the course of our monitoring, we have uncovered a whole series of manipulations and inaccuracies.

1. Criticizing an outdated version of the draft law

A significant portion of ARMA’s arguments is based on the outdated version of the draft law, not the current version under discussion. In particular, the ARMA continues to regularly cite:

• the involvement of arbitration managers and private bailiffs, even though these provisions were removed from the current version;
• “unknown management methods for Ukraine,” despite the fact that the draft law simply codifies and refines the existing manager selection process through Prozorro;
• claims about a supposed lack of consultations, even though, according to the Committee Chair, discussions with ARMA representatives were indeed held.

Such an approach raises serious doubts about the objectivity and professionalism of ARMA’s assessment of the draft law.

2. Contradicting their own proposals

Interestingly, many of the innovations the ARMA now opposes were ones it previously supported.

• Asset identification procedure. ARMA’s leadership previously endorsed the need for planning before transferring assets — exactly what the draft law now proposes.
• Regulating cultural assets. The ARMA itself once proposed introducing a dedicated mechanism for the assessment and management of cultural property. Yet now, the Agency claims such measures pose a threat, not only to its own operations but also to the Ministry of Culture.
• Speeding up asset transfers from prosecutors. The ARMA previously criticised prosecutors for delays, but now stands against the very reforms intended to solve that issue.

Such contradictions inevitably raise questions about ARMA’s true motives for resisting the draft law.

3. Claims of non-compliance with the Criminal Procedure Code

The ARMA claims that the draft law disregards the Criminal Procedure Code of Ukraine, but these statements are just as manipulative as the others.

Draft Law No. 12374-d clearly outlines the ARMA’s interaction with prosecutors and investigative bodies, within the limits of what can be regulated by the law on the ARMA. Moreover, it introduces differentiated deadlines for transferring various types of assets, based on their complexity, directly addressing the real problems the ARMA itself once raised.

Agency officials should have known that amendments to the Criminal Procedure Code of Ukraine must be made through a separate law. Therefore, they could not have been adopted simultaneously with the changes to the law on the ARMA.

Moreover, in its public statements, the ARMA claims that the draft law assigns prosecutors functions that are not typical for them. In reality, the draft law clearly distributes powers and responsibilities between prosecutors and the ARMA. More importantly, prosecutors are already responsible for transferring assets under current law — a process the draft merely seeks to clarify and improve.

By the way, the SAPO, for its part, generally supports Draft Law No. 12374-d — contrary to the ARMA’s repeated claims that prosecutors oppose it. And this distortion of reality doesn’t stop there. For instance, the Law Enforcement Committee did not even consider the draft law at its meeting, yet the ARMA publicly announced that “the Law Enforcement Committee supported ARMA’s proposals and expressed readiness to cooperate to strengthen the Agency’s institutional capacity.” In other words, the ARMA once again spread false information.

What Draft Law No. 12374-d really changes

ARMA’s public discussion of the draft law on April 15 not only amplified dubious and unreliable claims but also revealed the Agency’s attempts to find allies for its narrative. However, the subsequent refutations of ARMA’s claims of support show not only the manipulative nature of its communication, but also that Draft Law No. 12374-d genuinely strengthens the entire anti-corruption system — something other government agencies clearly recognize.

This is because the draft law addresses several long-standing problems in ARMA’s operations.

1. Regulating asset identification procedures: The draft law introduces a clear mechanism for analyzing assets, which will prevent absurd transfers to the ARMA — like a box of women’s dresses or three rolls of (new) toilet paper.

2. Improving asset management procedures: The draft law takes into account the specifics of different asset categories — both simple and complex — and introduces tailored procedures with clearly defined deadlines. Currently, these deadlines are practically nonexistent, allowing the ARMA to delay management processes indefinitely. Moreover, the new provisions aim to prevent the ARMA from transferring assets to competitors, thereby eliminating the need for the Anti-Monopoly Committee involvement.

For example, in the case of Morshynska, the ARMA cited a prolonged delay in obtaining a concentration permit from the AMCU as the reason for terminating the contract with the asset manager. In reality, it was the AMCU that stalled the special procedure for transferring strategic enterprises into management.

3. Increasing transparency: The draft law expands ARMA’s public reporting obligations, requiring the Agency to disclose more detailed information about the condition of assets, income generated from their management, and overall performance results.

Unfortunately, despite ARMA’s public assurances of openness and transparency, specific information on the effectiveness of seized asset management remains difficult to find in the Unified Register of Seized Assets.

4. Unblocking the management of corporate rights linked to the aggressor state: The draft law addresses a problem the ARMA itself has repeatedly raised — yet now, for some reason, the Agency opposes the solution.

5. Addressing the issue of sanctioned assets: The draft law clarifies that assets seized in criminal proceedings and recovered through sanctions must be transferred to the SPFU for enforcement of the relevant decisions.

By the way, the inclusion of this provision could also explain ARMA’s resistance. After all, the Agency’s leadership was so eager to keep control over sanctioned assets that almost the entire team showed up at the High Anti-Corruption Court’s Appeals Chamber, and still lost the case. Against the backdrop of this “struggle” over sanctioned assets, the ARMA once again revealed its selective communication and glaring inconsistency.

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Overall, it appears that the real reason behind the ARMA’s resistance to Draft Law No. 12374-d is its reluctance to implement effective asset management mechanisms, along with greater transparency and external oversight.

At the same time, the ARMA’s leadership began promoting claims about the “political coloring” of the reform — a surprising move, given that Draft Law No. 12374-d addresses real problems repeatedly highlighted by the ARMA itself, the Accounting Chamber, other institutions, expert organizations, and international partners. In the context of war and the economic challenges facing Ukraine, such changes are essential to ensure the seized assets are used to their fullest benefit.