The newly established ARMA agency carried out the first assets confiscation. Let’s see what business owners thought of this situation on the example of the Gulliver entertainment center.
On September 6, 2017, at a briefing in Kyiv, Chief Military Prosecutor of Ukraine Anatolii Matios informed that the assets of ex-Minister of Revenue and Duties of Ukraine Oleksandr Klymenko were seized and transferred to the National Agency for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes ARMA.
Among the assets transferred to the ARMA are dozens of luxury apartments, office spaces, parking spaces, cars, buildings, land lots, three floors of the Gulliver center in Kyiv and a thousand of railcars.
These assets were referred for management to ARMA, which was established this year. For now, it is the first instance of assets transfer to the agency, especially in such amounts.
In the countries of the European Union, the practice of similar governmental bodies was introduced a long time ago. Moreover, the creation of such institutions is mandatory according to the EU directives. A close cooperation between such institutions is also accounted for.
While the process of finding and tracing of assets is clear (since such functions were fulfilled by other governmental bodies prior to the establishment of the National Agency), the management function is a newly implemented one in Ukraine. Moreover, a new market of services appears alongside – the market of management and disposal of the seized assets, in which the state directly cooperates with the private sector.
The management of assets implies preservation of the assets and their economic value as well as their sale. Before, it would often happen that, after the seizure, the assets were not used in the economic activity. And even if the consideration of the criminal case ended up with the confiscation order, the economic value of the asset could be lost.
According to the article 19 of the Law of Ukraine on ARMA, the National Agency carries out the management of assets which were seized in a criminal proceeding. The amount or value of such assets equals or exceeds the minimum wage times 200 (UAH 640 thousand and above). The National Agency can only receive the assets for further management based on the court decision or on consent of their owner. ARMA does not make independent decisions about which assets to manage.
There are two ways in which, based on the legislation, the assets can be managed: sales or transfer for management. One of the first steps in management is evaluation of assets. The evaluator is selected on the competitive basis. The managers are also selected on the competitive basis in accordance with the Law on Public Procurement. ARMA Tender Committee has already identified 10 companies that can manage assets.
The example of Gulliver is the first instance when ARMA received assets for management. And until the moment when the body starts actively fulfilling its functions, the owners of the seized assets might have questions about the process. We should stress that, in this situation and in general, the ARMA is first and foremost an executive body. The management of seized property which constitutes the direct function of ARMA is intended to keep property in circulation in order to preserve and increase its value. Moreover, as the assets are transferred to the ARMA for management, they do not “disappear” or lose value while the case is considered.
ARMA is one of the newly established governmental bodies in Ukraine. With time, it will become clear whether such approach to management of seized assets is efficient. It is definitely more transparent then previously used methods. Taking into account the amount and variety of the seized assets, the National Agency has a large field of work. ARMA’s effective work is only possible provided there is an understanding of the principles of work and cooperation of all the involved parties.