Methodology for Determining the Feasibility of Asset Management: A Legal Analysis

The government has adopted a resolution approving the Methodology for Determining the Feasibility of Managing an Asset(s).

Transparency International Ukraine has been consistently monitoring the secondary legislation being developed to implement Law No. 4503-IX of June 18, 2025. In March, we analyzed the first wave of secondary instruments and found that a considerable share of them had not yet been adopted. In May, we assessed the joint order of ARMA and the Prosecutor General’s Office approving the Procedure for Transferring Seized Assets into ARMA’s Management. 

This analysis continues that work and examines another key secondary instrument in the field of asset identification.

Where things stand on the secondary legislation for ARMA’s work

The secondary instruments needed for the ARMA reform to function fully fall into the following categories: 

• institutional and organizational matters; 
• accountability and public oversight; 
• asset identification and intake into management; 
• selection of asset managers; 
• procurement of manager services; 
• asset management and oversight of it; asset disposal; 
• maintenance of the Unified State Register of Seized Assets (USRSA).

As of the second half of June 2026, nearly all the secondary legislation has been adopted; only the procedure for disposing of seized assets has yet to be updated.

The Methodology approved in June is one of the foundational elements of ARMA’s new regulatory architecture. This instrument governs the procedure for analyzing a seized asset to determine whether it can be managed effectively, and it also serves as an “entry filter” for the entire subsequent management process: without a positive conclusion from ARMA, an asset cannot be transferred into the Agency’s management.

How it used to be

Before the ARMA reform law took effect, there was no separate statutory rule on asset identification, nor any secondary instrument governing that procedure. Article 18-1 of the Law, which introduced the identification mechanism, is an entirely new provision. 

Before the reform, the practice was that the Agency issued written opinions on whether effective management of an asset could be ensured and its economic value preserved. However, the joint orders of the PGO and ARMA on the form of a request for such an opinion were never adopted, and the procedure for the Agency’s assessment of management feasibility was never regulated at the level of a Cabinet of Ministers resolution.

This produced several negative consequences: 

• ARMA took into management whatever it was given: an investigating judge’s ruling transferring an asset into management served as the sole and sufficient basis, and the Agency had no formal mechanism to assess in advance whether it could manage a particular asset effectively. As a result, assets accumulated at the Agency that it had no way of actually managing; neither the Law nor the secondary instruments required ARMA to conduct a mandatory site visit to inspect an asset before accepting it. 
•  Assets could therefore be transferred into management without proper documentation of their actual condition, which created risks of later disputes between the prosecutor and the Agency and made it impossible to plan management properly;
• the Law did not require ARMA to compare management and disposal options or assess an asset’s economic potential before deciding how to manage it;
•  interaction between prosecutors and ARMA at the stage preceding an asset’s transfer into management was ad hoc and unformalized. In practice, this led to assets being handed over with incomplete or contradictory information.

What the adopted Methodology sets out in detail 

The ARMA reform law introduced a fundamentally new model — a mandatory identification procedure as a precondition for accepting an asset into management — and the resolution adopted by the Cabinet of Ministers spells out that model at the secondary-legislation level. 

The key innovations are as follows: 

• Identification as a mandatory “entry filter.” ARMA manages only those seized assets for which a positive identification conclusion has been prepared (Article 18-1(1) of the Law). This is the first time the Agency’s right to assess management feasibility in advance has been enshrined in law;
• a standardized procedure for prosecutorial requests. The Methodology clearly defines the list of documents a prosecutor must attach to a request — title documents, a valuation report, technical specifications, photo and video materials — and sets the condition for submitting them: “where available and where doing so would not harm the criminal proceedings.” This balances ARMA’s need for information against the interests of the investigation;
• a mandatory physical inspection of the asset. The Methodology requires ARMA specialists to conduct an on-site visit to the asset’s actual location for inspection, documentation of its condition, and photo and video recording. The instruction to the relevant Interregional Territorial Department (ITD) of ARMA to accept an asset into management must be issued no later than the next business day after the request is received — a rule designed to keep the central office from stalling the start of the process;
• a comprehensive analysis of economic potential. The secondary legislation now requires ARMA to determine the optimal management approach through comparative analysis, weighing expected management income against the costs of storing and maintaining the asset. This provides the basis for a well-reasoned choice of strategy; 
• clear deadlines with a mechanism for extension. A baseline 10-day period is set for issuing a conclusion, extendable to 20 business days where grounds exist, provided a prosecutor is notified in writing within 5 business days. This removes the previous uncertainty over how long the procedure could take;
• a special regime for combat zones. The Methodology introduces a new exception — a moratorium on identifying assets located in temporarily occupied territories or areas where hostilities are underway. This resolves the previous uncertainty over such assets and ties the resumption of their identification to the official list maintained by the Ministry for Development of Communities and Territories.

What to watch for during implementation

Despite the clear progress this regulation represents, its practical implementation may reveal certain shortcomings that should be tracked and promptly corrected through amendments to the relevant instruments. Some questions, moreover, were already apparent when the amendments to the ARMA Law were first adopted. 

Inconsistency with the Criminal Procedure Code

One of the key systemic risks remains the mismatch between the new identification procedure introduced by the ARMA reform law and the current version of Ukraine’s Criminal Procedure Code (CPC). Article 100 of the CPC still does not require a positive ARMA conclusion as a precondition for a prosecutor to petition an investigating judge to transfer an asset into management. In practice, the CPC still allows a prosecutor to initiate an asset’s transfer to ARMA without going through identification at all, which conflicts with the logic of the amended Law.

Article 100(6) of the CPC also does not reflect the new grounds for asset disposal introduced by Law No. 4503-IX, and the existing mechanism for notifying ARMA (Article 100(7)) remains in a provision that would now logically belong in Article 175 of the CPC, as part of the enforcement of a seizure order. The CPC’s failure to establish corresponding prosecutorial obligations regarding deadlines for responding to an ARMA conclusion, or to a notice that an asset’s economic value cannot be preserved, creates a degree of legal conflict that, in practice, is likely to be resolved in favor of the special provisions of the ARMA Law.

No consequences defined for a negative ARMA conclusion

The Methodology sets out in detail the procedure for identifying an asset and preparing the Agency’s conclusion on whether it can be managed. It does not, however, define any legal consequences for cases where ARMA formally determines that effective management of a given asset is not possible.

What happens to the asset after that? Who is required to act, and within what timeframe? Can the prosecutor apply again? These questions remain unanswered, since ARMA cannot accept such an asset into management in these cases — and if an investigating judge nonetheless issues a ruling to that effect, it will not meet the requirements of the special provision, Article 18-1 of the ARMA Law.

Conclusions and recommendations

The resolution adopted by the government is an important step toward a systemic approach to determining whether ARMA can manage a given asset effectively. It closes one of the key gaps in the ARMA reform’s secondary legislation by formalizing a procedure for identification that previously either did not exist at all or existed only in fragmentary form.

To prevent problems in law enforcement practice, the following recommendations should be considered alongside ongoing systemic monitoring of how the secondary legislation is being implemented.

1. The Criminal Procedure Code needs to be brought into line with the new model of interaction between prosecutors and ARMA. This requires amending Articles 100 and 175 of the CPC, specifically:

• aligning the list of grounds in Article 100(6) for transferring physical evidence into ARMA’s management (and for its disposal) with the provisions of the ARMA Law;
• moving to Article 175 of the CPC the requirement that a prosecutor send ARMA a copy of the seizure ruling and a request on the feasibility of transferring the asset into management no later than the next business day after the ruling is issued — together with requirements for the content of the request and the list of documents to be attached;
• establishing in Article 175 an obligation for the prosecutor to petition the investigating judge (or court) to transfer property into ARMA’s management no later than three days after receiving a positive conclusion, provided the owner has not given written consent;
• establishing an obligation for the prosecutor to petition the investigating judge or court to change the management approach or take other measures, within no more than five business days of receiving information from ARMA about circumstances that make it impossible to preserve the asset’s economic value. 

2. Regulate the consequences of a negative ARMA conclusion. Either a separate instrument or amendments to existing regulation should define what a prosecutor is to do after receiving a negative conclusion, and whether a repeat request is possible once the grounds for refusal have been addressed.

3. ARMA should develop internal operating procedures (a standard operating procedure) for staff at its central office and Interregional Territorial Departments, setting out in chronological order all actions relating to seized assets, with references to the specific regulatory provisions involved. Such a document would remove operational uncertainty and minimize the risk of inconsistent interpretation of similar situations.