Parliamentarians continue discussing the effectiveness of the Agency’s work on asset recovery and management, in particular, the management of the seized sanctioned assets.

On May 23, the Temporary Investigative Commission (TIC) of the Verkhovna Rada on Economic Security and the Verkhovna Rada Committee on Anti-Corruption Policy held a meeting on the work of the ARMA in the field of seized property management. At one of the previous meetings, the TIC had already discussed the sale of property and, in fact, this week’s meeting was a logical continuation of the previous discussion. The main role was given, of course, to the work of the ARMA. 

What’s interesting this time

Earlier, there was information in the media that the property of individual seized enterprises was embezzled. Representatives of law enforcement agencies stated that they situationally performed the function of control over the preservation of assets until the ARMA determined the manager. They can also transfer the seized property for safe custody to the owner of the property.

And if the SBI, the SSU, the BES, and the National Police were able to dwell on the number and characteristics of assets that were transferred to the ARMA by court decisions, then the representative of the Agency, who, by the way, is the head of the specialized department of the institution, were unable to give a complete answer how many assets were transferred to the managers selected by the Agency.

The Agency was also asked about why it took so long to announce competitions for property managers. The representative of the ARMA said that the preparation for these competitions included, in particular, checking whether the information provided in the decision on the seized property was reliable and corresponded to the actually available property. At the same time, the Agency selects those managers for the property, about whom the necessary information has already been collected. However, the terms of preparation for the competition are not regulated by any regulatory act, so it is impossible to talk about any deadlines.

It is noteworthy that detailed information about the asset, interesting to a potential manager, can be obtained only on a written request to the ARMA, and not immediately on the site. This is a form of underdigitization.

Moreover, our attention was drawn to the fact that in December 2022, the selection of the managers of the seized property was carried out by the authorized persons of the ARMA alone, although the “advisory group” participated in the consideration of proposals. However, at the meeting, the head of the asset management department, Oleksii Tamozhanskyi, said that the selection of managers was carried out by the selection commission, while no relevant order on this was posted on the Agency’s website.

 

What is obvious after the TIC meeting

Based on the results of the meeting, it is possible to formulate such interim conclusions. Sadly, we’ve been talking about some of these things for years. 

1. The quality of the arrests imposed on the property leaves much to be desired. 

Quite often, law enforcement officers try to seize as much as possible, and then even the accounts of the enterprise are seized, which makes it impossible for an enterprise to pay wages and taxes. 

In addition, in the conditions of quick preparation of motions, investigators do not check the compliance of the property declared for seizure with what is available. As a result, not all the property seized by the court decision is transferred to the manager. And there may be questions where the rest of the property indicated in the decision went.

2. The ARMA did not regulate the terms and procedure for preparing for the competition to determine the manager.

Indeed, the seized property needs to be inspected and the necessary information about it needs to be collected. However, there are no deadlines for preparatory actions, and this can lead to abuses and delays. 

In addition, the Accounting Chamber noted the insufficient workload of the territorial departments of the ARMA in the auditIt is necessary to develop a regulatory act in which the responsibilities and deadlines for performing all actions in preparation for the competition should be distributed. 

3. Neither is there a procedure for competitive selection of the manager of the seized property. 

Determining winners is the discretion of the ARMA, limited by quite general provisions of the specialized law. The requirements for the documents to be submitted by interested parties are not defined, but are indicated in each announcement of the competitive selection on the ARMA website. 

At the same time, the deadlines for making decisions on the announcement of the competition, as well as other issues related to its conduct, are neither regulated. In addition, there are no criteria and methodology for evaluating the proposals of participants, and the decisions on the results of the competition for the manager and contracts concluded with them are not published. These are all corruption risks.

 

What’s next?

Based on the results of its work, the TIC should develop a report, which, in particular, will contain conclusions about the circumstances established by the investigative commission regarding possible facts of violations of legislation in the field of economic security and evidence that confirms this. 

These conclusions may be referred both to the Prosecutor General’s Office for appropriate response, and to other competent authorities, which should consider them in their work. This report should also contain proposals on how the conclusions of the investigative commission can be used in the work of the Verkhovna Rada. 

Therefore, we should expect a public report of the TIC on economic security and hope that it will finally formulate such proposals to reduce corruption risks in the activities of the ARMA, which will really work. After all, to a large extent, these risks are based on shortcomings, and sometimes the lack of a regulatory framework for the functioning of the Agency. 

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The selection of the managers of the seized property was carried out by the authorized persons of the ARMA alone, although the “advisory group” participated in the consideration of proposals. However, at the meeting, the head of the asset management department, Oleksii Tamozhanskyi, said that the selection of managers was carried out by the selection commission, while no relevant order on this was posted on the Agency's website.