Before Russia’s invasion into Ukraine, the Asset Recovery and Management Agency worked on finding, tracing and managing the property of possible criminals, particularly ones potentially guilty of corruption. Now, the ARMA continues performing its functions, but alongside new initiatives.
The Agency’s main task is finding assets. In addition to Ukrainian officials, the ARMA receives assets in war-related criminal cases. This includes cases on financing of coup, seizure of state power, change of state border of Ukraine (Art. 110-2 of the Criminal Code). Russian planes and railway cars, as well as Belarusian trucks, have already been handed over to the ARMA as part of various criminal proceedings.
From February 24 to May 18, the ARMA received more than 360 appeals from law enforcement agencies to search for assets of people connected with the Russian aggression. The Agency has already found more than $1 billion worth of enterprises, corporate rights, movable and immovable property owned by Russians in Ukraine and abroad.
The ARMA enlisted the support of members of the Ukrainian interagency task force to search for assets abroad. Together, they have launched a portal where everyone who has information about the property of Russians involved in the war can report it. For its part, the ARMA collects files on such citizens of the Russian Federation thanks to special technologies and analysis of open sources of information in the OSINT system. Together with the interagency group, the ARMA had prepared and sent 216 inquiries abroad regarding the assets of the suspects as of May 18, 2022.
The ARMA also cooperates with the European Task Force and participates in meetings of the European Commission on the freezing and confiscation of assets. This enables the Agency to exchange data on Russian property with foreign counterparts.
The ARMA uses international networks — CARIN, StAR, Interpol, Europol, etc. to search for assets. Since the beginning of the full-scale war, the Agency has been communicating with them to improve the joint work. For example, after the ARMA’s appeal, CARIN members expelled Russia and Belarus and began to prioritize requests from Ukraine. In total, the ARMA already sent 336 inquiries regarding 549 people involved in 87 countries from February 24 to May 17.
In addition, the ARMA has found Viktor Medvedchuk’s yacht in a port of Croatia. Subsequently, the Lychakiv District Court ruled to arrest it and transfer it to the Agency. After that, the Prosecutor General’s Office asked the ARMA to develop a roadmap for the yacht’s management. The Agency did so and decided that the best way would be to sell the yacht worth approximately $200 million in open bidding. This will help send the money to the national budget.
Proceeds from the sale will be kept in the state bank at interest, so the state will be able to get more benefits after the court’s decision to confiscate property in the budget.
In early May, the ARMA restored the sale of seized property through the SETAM e-system. Swarovski jewelry, clothes, perfumes and more were put up for auction. Proceeds from the sale of this property, together with accrued interest, will be a potential contribution to the state budget. Auctions took place on May 6-12, where some of the lots were sold, but some auctions did not take place due to the lack of participants.
The innovations in the work of the ARMA include several legislative initiatives:
- The ARMA has finalized a law that provides for granting the Agency the right to ensure the organization and representation of Ukraine in foreign jurisdictions in disputes and cases concerning assets, namely:
– find, trace, manage and inspect them;
– recognize the state’s ownership of assets;
– recover them to Ukraine.
- The ARMA will potentially manage assets confiscated in accordance with the new provisions of the Law “On Sanctions.”
The Agency is a central executive body with a special status. Therefore, the ARMA is convinced that it should be able to find and trace assets that may be blocked, forcibly seized or subject to sanctions upon request to the National Security and Defense Council, the Cabinet of Ministers or on its own initiative.
- Purchase of military bonds. The fact is that the Agency has a deposit portfolio which was over UAH 800 million before the war. This money cannot be used for the needs of the army, because without a final court decision it is the legal property of individuals. Thus, the ARMA suggested using them to buy military bonds. Thus, the rights of suspects and accused will allegedly not be violated.
Such changes should be made carefully so as not to interfere with the Agency’s primary objective of preserving the economic value of assets.
The ARMA supports the military on the frontline and IDPs. The Agency transferred the property that it already manages to cover the needs of the army and medical workers, including equipment, vehicles, etc. In addition, the ARMA works closely with volunteers from the Slovak Republic and ensures the arrival of humanitarian aid in Ukraine. As of the beginning of May, ARMA employees had already organized six deliveries of such humanitarian aid.
However, after the beginning of the full-scale invasion, the competition to select the head of the ARMA did not progress in the slightest. The last time the commission met was on February 21 to consider the status of special checks. But there was no quorum. There were also other issues that arose in the selection process: few participants, little attention to the candidates’ integrity, etc.
TI Ukraine believes that the competition should return to the stage of document submission by candidates with prior publication of the competition procedure and evaluation criteria. Despite the war, the head of the ARMA must be elected in a transparent and full-fledged selection.