ARMA announced a competition to determine the new organizer of the electronic bidding. Based on the results of the selection, the platform which complies with all the requirements will be used throughout 2018 to sell arrested assets which have been put under ARMA’s management by court decision and which are subject to a decision to sell them.
The requirements are established by the Directive of the Cabinet of Ministers of Ukraine of August 9, 2017 N558 “On Competitive Selection of Legal Entities Which Execute Sale of Arrested Assets.”
However, as of today, the Directive contains a number of discriminatory standards, which, we believe, prevent ARMA from fully exercising its function of sale of arrested assets. Representatives of TI Ukraine and platforms of the ProZorro.Sale system contributed to the discussion of the respective changes. TIU’s reservations have to do with the requirements to sellers of the arrested property in the part concerning storage and transportation of assets, initial price and property evaluation.
We recommend the following:
Firstly, if none of the platforms has the facilities and resources for transportation, storage, sale, ARMA conducts a tender for each kind of work separately complying with the total amount stated in the relevant Directive. For instance, most platforms do not have storage facilities for various kinds of goods in their possession or rented. This approach will allow to increase the number of platforms used to sell the asset, which, in its turn, will increase the volume of sales and create honest competition. Currently, only SE Setam can comply with this requirement.
Secondly, the price of the asset must be reduced gradually depending on the demand. For the first auction, the initial price of the asset must be not lower than the market price, and in the case of lack of demand, the price for the following auctions has to be reduced taking into account all factors affecting it (the arrest, the demand, the condition etc.) Currently, due to the lack of a functional formula of asset evaluation, most valuable property is not old at all.
Thirdly, standards need to be established to ensure unobstructed access of the evaluator to the asset. The possibility to verify real value of the asset will lead to the increase in demand.
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