Experts in various sectors discussed problematic points in management of seized assets in Kyiv on 25 April. Lawyers of the Asset Recovery and Management Agency and the National Anti-Corruption Bureau, prosecutors of SAPO and PGO, judges, attorneys, investigative journalists, managers of seized assets and representatives of the public participated in the event, organized by TI Ukraine.
Part of the conversation was dedicated to legislative obstacles to the ARMA’s activity. For instance, Head of the Agency Anton Yanchuk explained how the institution falls victim to the situation because it is not a full-fledged participant of the criminal process and cannot affect transfer of assets under its management in any way.
“Before seizure and transfer of assets under management, the process needs to be properly planned. It is also necessary to obtain the conclusion of the ARMA or an expert in this or that sector… Another point is to define the procedural role of the ARMA in the court process,” said Yanchuk.
At the same time, head of the law department under the ARMA Andrii Potiomkin said, “Our legislation is quite undeveloped when it comes to finding and management of assets. We lack many European tools. For instance, there is no mechanism of obtaining advice before seizure to identify whether the asset can be seized this or that way, whether it makes sense to keep it as evidence transferring it to the ARMA or it should be seized and maintained in some other way.”
Deputy head of the Specialized Anti-Corruption Prosecutor’s Office Volodymyr Kryvenko said, “One of the main cornerstones that have to be resolved in the criminal procedural code is probably the status of the ARMA. The designated law on the ARMA was adopted later than the Criminal Procedural Code. The law contains many professional, creative ideas, that should absolutely be reflected in the CPC.”
Judge of Podilskyi District Court Svitlana Zakharchuk has examined multiple motions on transfer of assets to the ARMA. At the discussion, the judge pointed out that the main obstacle in such cases is the discrepancy between Article 100 of the CPC and the specialized law. The law defines certain things more broadly.
“It is essential to eliminate these discrepancies and harmonize the Criminal Procedural Code and the Law on the ARMA. There should be a separate provision regulating the transfer procedure and review of motions on transfer of assets under the management of the ARMA,” she summed up.
Judge of Melitopol Rayon Court Viktor Fomin supported his colleague. He said that the procedure of evidence recognition is not included in the new CPC, while Article 131, which identifies types of maintenance measures in a crimial proceeding, needs to include transfer of items to the ARMA. The procedure of appealing asset transfer should be laid out as well.
Defense attorney and member of Public Council under the ARMA Vasyl Bilous suggested engaging the ARMA in discussion of asset management at the stage of pre-trial investigation. Based on Article 71 of rhe CPC, investigative agencies and prosecution have the necessary authority to do it.
The second part of the event was dedicated to problems with management of technologically complicated assets. Head of Special Investigations Department Serhii Horbatiuk, whose department was behind transfer of Mezhyhiria under the management of the ARMA, expressed an interesting idea:
“Creation of the ARMA is positive. A lot of issues connected with seizure, maintenance, preservation of the property until the court verdict are assigned to a specialized agency, which means that both the investigator and the prosecutor can focus on their respective tasks in a criminal proceeding. But I believe the strategy of maintenance of seized property should be somewhat different. Maintenance of certain property should be financed without taking into account the profit, with regard to historic value or some other peculiarities of this property. This includes Mezhyhiria, too.”
Mykola Lytovchenko, a representative of the temporary manager of two seized heat and power plants in Lviv oblast, added, “When assets are transferred to a temporary manager, specialized public institutions and the ministry should be involved. It should be included in the law that the manager should obtain everything necessary for management. Assets should also be divided into technological procedures, with a separate manager assigned to each procedure.”
Head of Special Assets Subdivision of the NABU Law Department Andrii Tsybulia added another thing: “All assets in criminal proceedings are toxic.”
At the end of the event, all the participants agreed that the points and recommendations brought up during the event would be systematized and sent to public agencies and institutions participating in the legislative process and decision-making in relation to management of seized assets.
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