On March 12, MP Anastasiia Radina filed draft law No. 5141-1 “Draft Law on Amendments to the Law of Ukraine ‘On the National Agency of Ukraine for finding, tracing and management of assets derived from corruption and other crimes’” and draft law No. 5142-1 “Draft law on amendments to the Criminal Procedural Code of Ukraine on improvement of activity on management of assets derived from corruption and other crimes.”
These draft laws are alternatives to the primary initiatives whose legal analysis can be found here.
What do these draft laws change in the current version?
- Initiate a planning procedure before transferring the seized assets to management;
- Create a foundation for transparent sale as a way of management. Provide the possibility of sale only in clearly defined cases.
- Assign the choice of the way to manage seized assets only to judicial decision.
- Eliminate a number of shortcomings and inconsistencies in domestic legislation governing the activities of the ARMA.
What Is It Like Now?
In 2015, the Parliament passed the Law “On the ARMA.” Until then, there was no effective regulation of the management of seized assets to preserve their economic value.
Imperfect legislation has caused a whole host of problems in the field of management of seized assets (opacity of sale, inability to quickly and efficiently manage individual seized assets, inconsistencies between different regulations).
What Is Proposed?
Ensure the direct participation of the ARMA in the preparation of seized asets for management. This will allow more efficient and effective management of the seized property and ensure that the optimal way of management is chosen. The planning activities should become the first step towards bringing the whole process in line with international practices. The successful experience of the US, Canada, and France shows how necessary it is to plan management activities in order to fulfill the tasks of a criminal proceeding.
Assign the definition of the ways of management (transfer for management or sale) exclusively to investigative judges or the court. Introduce a clear and transparent mechanism for the sale of assets, which can only take place with an exhaustive list of assets, such as those that quickly lose value.
Experts have repeatedly spoken about the shortcomings of national legislation, the imperfection of certain processes in the work of the ARMA, in particular in the sale function of the Agency, which was corroborated by an external audit. There is a need to change the current model of sale of seized assets.
The proposed changes will allow the ARMA to work with market leaders to conduct e-bidding to eliminate corruption-causing gaps and reduce reputational risks, increase budget revenues and positive changes in the ARMA’s standing.
Since 2015, there have been a number of shortcomings and inconsistencies in Ukrainian legislation between regulations. The registered initiatives aim to bring in line Art. 19 of the designated law and the Criminal Procedural Code of Ukraine in terms of definition of the amount of assets which can be transferred to the ARMA.
Also, these changes are designed to address the imperfections of the procedures for returning assets to the owner, which is essential. The draft laws provide for a clear regulation of measures for the transfer of seized assets for management, termination or change of such management.
The ARMA’s activities to manage the seized assets are designed to assist in the fulfillment of a task of criminal proceedings, namely—to protect the interests of the State and the owner of the assets. The national agency must implement this function by guaranteeing the preservation of the economic value of the property.
Draft laws No. 5141-1 and No. 5142-1 are designed to ensure transparency in the activities of the ARMA, increase the efficiency of management of seized assets, increase revenues to the national budget, and eliminate corruption risks in the activities of the ARMA.