On June 30, the Parliament approved draft law 5141 in the first reading regarding changes in the work of the Asset Recovery and Management Agency (ARMA). The document supported by the MPs will block its activity in managing certain seized assets and will turn the Agency into a “storage room” for seized property.

In addition, the draft law contradicts Ukraine’s international obligations regarding the management of seized assets. After all, the creation of an effective body for managing seized assets was one of the main criteria for Ukraine’s implementation of the Action Plan on Visa Liberalization with the EU.

Main dangers of draft law 5141:

1. The draft law prohibits the sale of seized assets.

This change destroys some of ARMA’s powers. The lack of possibility for realization will make it impossible to manage certain assets, as well as maintain their economic value. 

Medical masks, mobile phones, and vehicles are examples of assets that have already been transferred to the ARMA and cannot be managed through transfer to a manager. However, all these assets need storage, protection, and so on.

  1. The document creates gaps and uncertainties in the legislation.

Today, the relevant legislation provides for two ways to manage the seized property: through transfer to the manager for management and through realization. The proposed changes include “other way besides transfer for management and realization.” However, the draft law does not specify any other ways of management, except for those mentioned.

This change will allow certain judges to transfer the ARMA assets for management in a different way, which will be impossible to do because the ARMA simply does not have such functionality.

  1. The ARMA will only receive extremely expensive assets for management.

It is proposed to transfer assets worth more than UAH 1 mln to the Agency. Thus, valuable items with an official value less than this amount will not be transferred to ARMA’s management, which directly contradicts the very idea of creating such an institution.

At the same time, the legislation does not provide for the possibility of spending money by the Agency on asset management. Therefore, it remains an open question at whose expense this will happen.

The above-mentioned provisions of the draft law provide only for limiting the functionality of the ARMA, without taking into account judicial practice, the Agency’s work experience, and its foreign analogues. At the same time, the draft law does not make any really positive changes.

Transparency International Ukraine calls on the Verkhovna Rada to eliminate all these dangers of the draft law and make the necessary changes to it.

 

 

The above-mentioned provisions of the draft law provide only for limiting the functionality of the ARMA, without taking into account judicial practice, the Agency’s work experience, and its foreign analogues.