56 MPs approached the Constitutional Court with a motion to recognize the activity of Asset Recovery and Management Agency on actual asset management unconstitutional. No matter if the text of the motion corrupts the idea of ARMA’s work and international practices it is based on… The funniest part is that the authors include MPs who voted for establishment of the agency.

The Agency has been active for a year and a half. And only now, suddenly, MPs representing Opposition Bloc, Vidrodzhennia (Renaissance) and BPP have become interested whether the Law of Ukraine on ARMA and related clauses of CPC of Ukraine, Art. 100 are constitutional. The clauses in question are connected with management and sale of property seized in a criminal investigation. Among those most interested is Yaroslav Dubnevych. Coincidentally, two heat and power plants which belong to him and his brother Bohdan and which were used to inflict damages of UAH 1.5 billion to the national budget were placed under ARMA’s management less than a month ago. Another interested individual is Boryslav Rozenblat, who is now involved in a criminal proceeding.

MPs claim that sale of the seized assets enables the state to use seized property for budgetary profit beyond the institute of seizure before final court decision. However, if seizure of assets under ARMA’s management is cancelled, the National Agency returns them to their rightful owner. If the question is about money, the money is given back including revenue generated during management through the use of this particular asset. The same works for funds obtained from sale of another BMW X6. Comparing seizure, special seizure and placement of seized assets under management is inadequate to say the least, if not conscious misinterpretation of legislative provisions.

ARMA refers to principles set forth in EU directive which clearly specifies that management of seized assets must be efficient. That is, the primary goal is to preserve the assets and their value. That is the very reason why, in some cases, assets must be sold. Currently, about 10% of all assets placed under the Agency’s management, are for sale. First of all, the list includes products prone to quick spoilage, followed by bulky objects and things whose cost of preservation exceeds or is equal to their own value. Everyone interested can find a detailed list in the Directive of the Cabinet of Ministers “On Approximate List of Property for Sale…” Thus, property is sold not with the aim to take an asset away from its rightful owner – on the contrary, to preserve his or her money if the person does prove to be innocent. If the court rules that the person is not guilty, and they want to have their BMW back, the funds plus the interest may well be enough to buy a new one.

The unhappy MPs’ idea on reverse operation of the law is interesting in its absurdity. Based on the motion, ARMA cannot receive for management assets purchased by individuals involved in criminal proceedings before the law on the Agency was passed. However, first of all, the Agency only receives for management assets of individuals who are involved in open criminal proceedings. Secondly, the principle works with criminal liability, while placement of assets under management for the duration of the investigation is not a type of criminal liability.

The authors are convinced that ARMA’s activity is not consistent with European legislation, since one of the directives used by the Agency as reference supposedly sets forth an exhaustive list of cases when the Agency must step in. They do not say, however, that the system of directives and decisions of the EU Court on issues pertaining to the work of similar agencies across Europe do not suggest such lists. They specify the purpose of the institution, while the way of its achievement depends solely on the government. Not to mention that formation of ARMA was one of the conditions for visa liberalization with the EU.

Thus, juristic rationale behind statements of unconstitutionality of a few standards regulating ARMA’s activity in MPs’ constitutional motion attests to rather superficial understanding of the Agency’s work, its value and its role in the anti-corruption reform. Or to MPs’ attempt to block the institution which may receive their own precious cars at one point.

First published on “Ukrainska Pravda”

This publication has been prepared with the financial support of the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.

Transparency International Ukraine works with the National Agency within the project Enhancing the Role of Civil Society in Public Finance Oversight, financed by the European Union. The project aims at empowering civil society and journalists with effective anti-corruption, asset recovery and anti-money laundering tools to perform the public finance oversight, support the launch of Asset Recovery and Management Agency (ARMA) and to update the list of Politically Exposed Persons. Find out more at https://goo.gl/Jgr9ic