Institutional and organizational matters

This category is anchored by the revised ARMA Regulation. The Law of June 18, 2025, introduced substantial clarifications regarding the Agency’s powers and organizational structure, and the Cabinet of Ministers brought the Regulation in line with the amended law accordingly.

The Regulation now expressly provides that ARMA disposes of assets under management through electronic auctions conducted on the state and municipal property privatization platform (Prozorro.Sale), in the manner and within the timelines established by the Cabinet of Ministers. It also provides that the Agency shall notify the prosecutor of the need to transition to asset disposal where, in the course of monitoring management effectiveness, circumstances are identified that preclude preservation of the asset’s economic value.

In connection with this last power, it is critically important that the corresponding prosecutorial authority be regulated — either through joint departmental instruments or through amendments to the Criminal Procedure Code — so that prosecutors can respond effectively to ARMA’s referrals on issues arising in the management of seized assets.

Amendments have also been made to the Regulation on ARMA authorized officers. Pursuant to the ARMA Law, authorized officers may now access assets transferred to ARMA for management, as well as seized assets in the identification stage, upon presentation of their official credentials — without restriction. This will enable the Agency to effectively exercise its authority to assess whether, and by what means, it can efficiently manage any given seized asset.

In addition, ARMA approved by internal order the Regulation on the Internal Control and Risk Assessment Department of ARMA’s Central Office and the Regulation on the Internal Security Department of ARMA’s Central Office. 

The Internal Control and Risk Assessment Department coordinates ARMA’s institutional oversight and risk management framework, conducts audits and investigations to identify violations in the area of asset tracing, preservation, and management, monitors the lawfulness of procurement and the use of budgetary funds, and prepares policy proposals on the detection, tracing, and management of seized and confiscated assets. The Internal Security Department is charged with safeguarding the integrity of ARMA personnel: it prevents corruption-related misconduct, conducts internal investigations, monitors compliance with ethical standards and conflict-of-interest rules, investigates reports of staff involvement in unlawful conduct, organizes pre-appointment vetting of candidates, and advises staff on ethics.

Accountability matters

The Regulation on the Public Oversight Council (POC) defines the status, mandate, and operating procedures of the Council as a standing collegial body exercising civil oversight at ARMA. The Council oversees ARMA’s activities, monitors the effectiveness of the Agency’s operations, reviews draft regulations, controls the lawfulness of manager selection and the progress of asset disposal, and facilitates ARMA’s engagement with civil society. The Council comprises nine members serving on a voluntary, unpaid basis. Sessions are held no less than quarterly, and its decisions are recommendatory in nature.

In the area of asset management, the Council has the following powers: 

• exercising civil oversight over the lawfulness and transparency of asset manager selection, by delegating its representatives directly to selection procedures; 
• monitoring the lawfulness and transparency of asset disposal and the effectiveness of the management of assets transferred to ARMA. 

The Head of ARMA may involve POC representatives in asset management effectiveness reviews and, where a complaint is received from an asset owner, in establishing grounds for a further review — up to and including membership of the relevant commission. POC representatives are correspondingly obliged to maintain the confidentiality of commercial and other legally protected information obtained in the course of such oversight activities.

The Council Formation Procedure establishes a competitive selection process through open-ranking online public voting. Candidates are nominated by civil society organizations active in anti-corruption, criminal justice or business protection for at least two years, and are subject to an extensive list of eligibility restrictions — including former ARMA employees, individuals with conflicts of interest, and foreign nationals. Voting must be conducted online for no fewer than three days, and the nine candidates with the highest vote tallies are deemed elected.

Previously, public oversight functions were performed by the Public Council at ARMA, which held a broad range of powers, including participation in the inter-agency asset disposal commission, oversight of budgetary expenditure, anti-corruption review, and the right to delegate representatives to competitive selection commissions. The new framework establishes the POC as a standing elected collegial body with enhanced powers in the area of asset management. The predecessor council has accordingly ceased to exist, while the new Council has yet to be constituted.

Additionally, the government approved the composition of the commission for conducting an independent external assessment (audit) of ARMA’s performance. Under the revised framework, all members of this commission are nominated by development partners, with a view to strengthening independence and eliminating undue influence from appointing entities.

Asset identification and intake

In this area, regrettably, no secondary legislation has yet been adopted. The government has yet to enact instruments governing how ARMA will store seized assets transferred to it for management, how valuators of seized assets will be selected, and what methodology will be applied to determine the feasibility of managing a given asset. 

In coordination with the Prosecutor General’s Office, instruments must be adopted to regulate asset identification and intake into management.

Interaction between law enforcement authorities and ARMA was previously ad hoc, which meant that assets that were objectively difficult to manage could be transferred to the Agency. The identification stage was introduced specifically to address this problem. On the other hand, there had been difficulties with prosecutors signing asset transfer and acceptance records; it is therefore significant that the Law now establishes deadlines for executing such records and mandates that these processes be regulated by joint orders of ARMA and the PGO at the secondary legislation level.

Separately, the appraiser selection procedure has yet to be aligned with the Law. A specific competitive selection procedure for valuation entities previously existed; however, the Law streamlined the process by providing that valuation entities are to be selected in accordance with the Law on Public Procurement. A draft instrument published on ARMA’s website specifies that valuation entities will be selected through open tender procedures in accordance with Article 15 of that Law, and that the corresponding framework agreement will be concluded for a term not exceeding one year. 

Selection of asset managers

We have previously addressed the updated framework for selecting managers of seized assets under the amended Law. On February 5, however, the government finally adopted the secondary legislation defining several important procedural nuances. TI Ukraine participated in the drafting of the asset manager selection instruments — our priority was to ensure that the substantive provisions and safeguards we developed were preserved through the subsequent clearance and adoption process. Fortunately, the structural logic and the safeguards were retained, and the text prepared with our involvement underwent primarily editorial revisions. 

The government has introduced its own definition of “related person” through four categories: related persons under the Tax Code, close persons under the Anti-Corruption Law, affiliated persons under the Joint-Stock Companies Law, and persons in civil-law or employment relationships with the owner or suspect where such relationships terminated fewer than five years before the announcement. 

For both simple and complex asset selection procedures, one open question remains: whether it is appropriate to cap the maximum manager’s remuneration at 100% of asset management profit. However, no sufficiently justified alternative approach was identified during the drafting process. Accordingly, unless the resolutions are amended, participants will be able to enter auctions at a starting remuneration level of 100%. 

Implementation of the selection procedures in the Prozorro system is ongoing, and initial steps have already been taken. 

Simple assets

For the pre-qualification of prospective managers, the resolution clarified the announcement timeline: it remains in effect from the date of publication until the date of the subsequent announcement, but no later than December 1 of the following year. Amendments to the announcement are prohibited throughout its validity period.

The resolution separately provides that the electronic system automatically calculates abnormally low tenders and notifies both the participant and ARMA — a mechanism not found in the Law, which merely defined the concept of an abnormally low tender and set deadlines for justification.

Pursuant to our proposals, the simple asset manager selection rules now include:

• a key safeguard providing that ARMA and the auction winner enter into a contract on the exact terms and at the exact remuneration level specified in the announcement and the winner’s tender, which neither the contracting authority nor the manager may vary unilaterally,
• the auction mechanics: the Prozorro system automatically evaluates tenders, including identification of abnormally low ones, and notifies both participants and ARMA. The correct sequence of participant actions is specified — the starting point is the highest remuneration level, each participant may lower the price by at least one step per auction stage, and where tenders are equal, the participant who submitted later proceeds first; 
• the necessary procedural detail: how tenders are submitted and recorded by the electronic system; the impossibility of submitting a tender after the established deadline; a participant’s right to submit only one tender, or to withdraw or amend it; the register of submitted tenders and its content; and separate provisions on the publication of information and documents. 

Additionally, the rules governing simple asset manager selection have the potential for improvement if future amendments were to:

• remove asset-specific details from the pre-qualification announcement, given that pre-qualification is not conducted in respect of specific assets — which are unknown at that stage;
• by analogy with the complex asset selection procedure, define what constitutes adequate justification for an abnormally low tender, and provide for publication of documents confirming a winner’s refusal to execute a management agreement;
• introduce a safeguard ensuring that the list of documents ARMA requires from pre-qualification participants is non-discriminatory and does not include documents not required by law;
• include in the auction announcement information on the owner of the seized asset and any suspect or accused in the relevant criminal proceedings, or any respondent in civil forfeiture proceedings (where applicable), so that participants and the public may assess any connection between such persons and the auction winner.

Complex assets

The new selection rules for complex asset managers focus on ensuring a transparent, non-discriminatory and clearly defined process. A key objective was to distinguish between the commission’s pre-auction document review and the automated evaluation of tenders (remuneration levels) in the auction itself, among participants admitted thereto — an area where the Law contained certain inaccuracies. 

Pursuant to TI Ukraine’s proposals, the following measures were incorporated: 

• a document deficiency cure mechanism: where the commission identifies deficiencies, it must issue a single request to the participant to remedy the documents within 24 hours;
• requirements for justifying abnormally low tenders: the resolution provides that adequate justification must include calculations demonstrating cost reductions, favorable conditions or increased revenue relative to the indicative plan;
• substantive limitations on additional qualification requirements: these must not restrict competition, create discrimination or confer advantages on specific entities, and must be proportionate to the management needs of the particular asset;
• regulation of cases where ARMA amends an announcement: the Agency has the right to make amendments prior to the deadline for document submission. To ensure non-discriminatory treatment, the document submission period is automatically extended so that at least ten days remain from the date of amendment until the deadline;
• a specific provision addressing the scenario where ARMA fails to issue clarifications in time: the Prozorro system automatically suspends the procedure and does not advance to the next stage; to reinstate the procedure, ARMA must publish its response and simultaneously extend the document submission period by at least seven days.

The government also elaborated on a number of procedural aspects of the selection process. ARMA prepares in advance a list of possible additional qualification requirements relating to participants’ experience, facilities, permits and licenses, which it transmits to the commission. The commission then decides whether to apply these requirements no later than two business days before the announcement is published. 

The resolution further clarifies the post-announcement procedure: the day after the document submission deadline, ARMA notifies the commission of the participants and transmits the relevant materials. Participation by joint ventures is regulated separately, with consolidated aggregation of their indicators.

To further improve the regulation of complex asset manager selection, it may be advisable to: 

• include in the auction announcement information on the owner of the seized asset and any suspect or accused in the relevant criminal proceedings, or any respondent in civil forfeiture proceedings (where applicable), so that participants and the public may assess any connection between such persons and the auction winner;
• add a clarification specifying that the list of information and/or documents required for the 24-hour deficiency cure must correspond to the requirements set out in the selection announcement, so that no new requirements are introduced at the proposal review stage;
• by analogy with the public procurement framework, introduce a safeguard ensuring that ARMA’s list of required documents does not include documents not required by law.

The resolution also regulates the operation of the Commission for the selection of the manager of complex assets. It provides for roll-call voting with each member’s position recorded in the minutes, individual written assessments by each member for each qualification requirement in respect of each participant separately, recusal and conflict-of-interest procedures with a mandatory disclosure obligation no later than the next business day, the right to record a dissenting opinion in writing, the option of remote sessions, and the commission’s right to invite participants to sessions and to send them written requests.

Procurement of asset management services

The ARMA Law provides that where no manager of a simple or complex asset is identified following a repeat selection procedure conducted under Article 21-3 or 21-4 of the Law, the Agency shall procure asset management services through an open tender procedure in accordance with the Law on Public Procurement. Participation in such procurement is open to business entities meeting the qualification requirements set out in Article 21-3(7) and Article 21-4(5) of the ARMA Law, except for participants who refused to execute a management agreement following simple or complex asset manager selection procedures.

The government resolution regulates the process for determining the estimated value of the procurement item — that is, the projected expenditure on engaging a manager, which serves as the basis for budget planning and tendering. 

Four instruments are established for calculating the estimated value, arranged in a hierarchy. The primary methods are market consultations (sending requests to market participants to ascertain current prices and possible management approaches) and the market price comparison method (a minimum of three price proposals, from which abnormally high and low figures are excluded, with the remaining proposals averaged). Where fewer than three proposals remain after filtering, historical procurement price analysis with inflation and exchange rate indexation is applied.

The fallback instrument is calculation on the basis of an approved indicative asset management plan — applied either where none of the preceding methods yields a result, or where the figures obtained exceed the planned values by a factor of two or more. The formula incorporates expected monthly management income, minimum storage costs, and the manager’s base remuneration at 10% of profit, multiplied by twelve months. The Procedure thus provides a methodological framework for a reasoned determination of the cost of management services in the most complex cases where market-based selection has not produced a result.

That said, the Procedure has certain shortcomings that it would be advisable to address in any future revision:

• insufficient safeguards against inflation of the estimated procurement value. In particular, for the market price comparison method to be applied effectively, requests to business entities should be identical in content for all recipients and should include all material conditions of service delivery, thereby enabling the solicitation of relevant pricing information and the formulation of proposals. As currently drafted, there are no requirements as to the content of the request. The class of economic operators to whom requests will be sent is framed rather broadly and is not entirely appropriate for management services — requests are directed primarily to “manufacturers, official representatives, and dealers,” whereas the procurement item is management services; 
• no provision for publication of any information on how ARMA determined the estimated value of the procurement; 
• the current definition of estimated value is rather broad — it encompasses “all possible costs associated with engaging a manager” and does not include the criterion of service delivery “on specific conditions,” in contrast, for example, to the definition of estimated value under the Ministry of Economy Order No. 275 of February 18, 2020. 

Attention should also be drawn to technical shortcomings in the Procedure. The market consultation process should yield not only “optimal procurement item requirements” but also the estimated value itself. Additionally, paragraph 8 of the Procedure should apply only “where the historical procurement price analysis method is used,” rather than in all cases of estimated value determination. 

The formula for calculating estimated value on the basis of historical procurement prices incorporates a “historical period price” figure. It is not, however, specified how a single historical period price is derived, given that the method generally draws on multiple sources. If the arithmetic mean is to be used in the formula, a provision to that effect — together with other relevant details — must be included.

Asset management and oversight

In this area, only the Procedure and Timelines for Developing, Approving, and Amending the Indicative Asset Management Plan, and the Procedure for Monitoring the Effectiveness of Asset Management, have been developed to date. The government has not yet adopted model management agreements.

The Procedure for Developing and Approving the Indicative Asset Management Plan elaborates on the mechanics of this document, which serves as the foundation for all subsequent manager selection procedures. Whereas the Law merely referenced the existence of the plan and its mandatory content, the resolution establishes specific drafting timelines: 20 business days for simple assets and 30 business days for complex assets, running from the date of execution of the transfer and acceptance certificate. For complex assets, an additional 20-business-day benchmark is introduced to maintain compliance with the statutory timelines for transferring an asset into management. 

The resolution also specifies the information sources for preparing the plan: the management feasibility assessment, the asset inspection report, valuation and expert findings, inventory data, and publicly available sources ranging from Prozorro to statistical services of foreign states. A notable new requirement is the mandatory approval of the plan by the National Security and Stock Market Committee (NSSMC) where the asset comprises a share in the capital or shares of a professional capital markets participant — with the NSSMC afforded ten business days for that purpose.

Regarding amendments to the plan, the resolution introduces several important procedural mechanisms. First, a manager may initiate amendments, but not earlier than 30 calendar days after taking the asset over — a safeguard against premature revision of planned performance benchmarks. The manager’s submission must include a list of proposed amendments, a reasoned justification with supporting calculations, and a risk analysis. ARMA must consider the submission within ten business days and communicate its decision within the following five business days; any refusal must be reasoned. Second, where amendments to the plan are made after the manager selection announcement has been published — for both simple and complex assets — the proposal submission period is automatically extended so that at least seven calendar days remain from the date of the amendment. Once the proposal submission deadline has passed, no further amendments to the plan are permitted — an important guarantee of the stability of competition conditions.

The government has also approved the Expenditure Approval Procedure for asset managers. This instrument establishes the mechanism for ARMA to approve the expenditures that managers incur in the effective management of seized assets and that are reimbursed from management revenues. The Procedure defines five categories of expenditure subject to approval: the manager’s remuneration; costs of asset maintenance and security; insurance costs; costs of professional services (consulting, legal, valuation, etc.); and other costs provided for in the indicative management plan and agreement. The overriding requirement is that all expenditures be economically justified, efficient and directed toward achieving the objectives of asset management.

The Procedure establishes a detailed approval process: the manager submits a cost estimate for the forthcoming reporting period, together with a justification, a market price analysis and a projected economic return calculation. ARMA conducts a comprehensive review — legal, financial-economic and technical — within 15 business days, and issues a reasoned decision to approve or refuse. Significantly, expenditures not approved by ARMA or exceeding approved amounts without supplementary authorization are not reimbursable. The procedure also mandates that the manager file reports on actual expenditure, with a comparison of planned against actual figures.

The Procedure for Monitoring the Effectiveness of Asset Management represents a substantial expansion of the conceptual apparatus compared to its predecessor: it introduces definitions of material agreement terms, management effectiveness criteria, complaints and complainants, and — critically — the concepts of potential and actual conflicts of interest on the part of the manager, with a clear distinction between them. Moreover, new management effectiveness criteria are now approved by a separate ARMA order, grounded in four principles: profitability, preservation of operational capacity, financial stability and economic viability — a dimension entirely absent from the previous procedure.

The architecture of oversight modalities has also been significantly restructured. The previous procedure provided for two forms: a desk review (conducted on ARMA premises) and a field review, with the desk review as the primary modality and field reviews reserved for cases arising from desk reviews or exceptional circumstances. The new procedure restructures the system entirely: it introduces a documentary review (equivalent to the former desk review, conducted no less than monthly, within up to seven business days), a field review (no less than quarterly, within up to 14 business days), and an additional complaint-triggered review (within up to seven business days). The field review is no longer derivative of the documentary review but is conducted independently on a regular basis. The minimum composition of the review commission has also changed, from three members under the previous procedure to four under the new one.

A fundamentally new element is the procedure for reviewing complaints lodged by asset owners. It provides for the establishment of a standing working group for complaint review, including two POC representatives; grants the authorized unit the right to conduct an additional review without mandatory prior notification to the manager; and establishes clear requirements as to the content of complaints and supporting documents. The participation of the POC has simultaneously been expanded — its representatives may be included in the review commission during additional complaint-triggered reviews. 

Procedural safeguards for managers have also been strengthened. The advance notice period for field reviews has been extended from two to five business days, and managers have been afforded more time to submit objections — five business days rather than three. The review report is now also sent to the manager’s email address as specified in the agreement, which was not previously required. Finally, the new procedure expands the grounds for action: in addition to the existing grounds of deficient management and attempts to dispose of assets, a new ground has been added — the identification of circumstances precluding preservation of an asset’s economic value — which triggers a distinct set of measures pursuant to Article 21-6 of the Law.

Asset disposal

The government has not adopted any new instruments on asset disposal. It should be noted that the ARMA Law specifies that asset disposal, with certain exceptions, is to be conducted through electronic auctions on the Prozorro.Sale electronic trading platform.

Although disposal was already conducted through that platform under the previous procedure, there are grounds for further regulatory improvement.

One such ground concerns the inability of former owners to acquire an asset — an issue illustrated by the sale of land on the Borzhava resort. Prohibiting this would align with international standards. For example, a new FATF guide on recovering assets obtained through crime notes that allowing criminals to regain their assets through auctions, even at market price, may undermine confiscation goals (such as deterrence) and damage the reputation of authorities. Some states conduct relevant checks on buyers. This is stated more directly in paragraph 40 of the Preamble to EU Directive 2024/1260 of April 24, 2024, which provides that the state should take measures to prevent assets from returning into the ownership of convicted persons or persons associated with them.

The allocation of assets into lots also warrants attention. In the Borzhava case, ARMA structured the disposal into just three lots: the first comprising 245 land plots, the second comprising 208 land plots, and the third comprising the lower terminal with a chairlift, the upper terminal of a ski lift, and 41 land plots. ARMA’s explanation — that the lots were formed taking into account the adjacency and size of the plots to maximize the commercial attractiveness of each lot and minimize the time to receipt of disposal proceeds — is far from persuasive, given that all prior auctions had been unsuccessful, save for the price-reduction auctions.

Maintenance of the seized assets register

The new Regulation on the Seized Assets Register was adopted by the Ministry of Justice rather than ARMA. This instrument substantially expands the scope of data recorded in the Register with respect to asset management activities. The previous instrument captured only proceeds from asset management and disposal. The new Regulation provides for detailed recording of the entire management lifecycle: the results of manager selection; the material terms of the management agreement, including remuneration; a link to the agreement itself; monthly management revenues; the amount of reimbursed costs; and the results of management effectiveness monitoring. Asset pools are now also recorded separately, with an indication of the economic, technological or functional unity of the assets comprising the pool. With respect to asset disposal, the Register now records a link to the electronic auction and the asset’s valuation, rather than merely the disposal proceeds.

The timelines and mechanism for entering information into the Register have also changed. The previous Regulation established a deadline of seven business days from receipt of data. The new Regulation has reduced this to the next business day following receipt of information from authorized entities. A right has also been introduced for the authorized official to return incomplete information with an indication of the missing particulars — a data quality mechanism that did not previously exist. The grounds for deletion of personal data have been clarified as well: the new Regulation adds the entry of an acquittal or the termination of criminal proceedings as distinct grounds for deletion, whereas the previous instrument was limited to the lifting of the seizure order.

Conclusions and recommendations

The ARMA reform enacted by Law No. 4503-IX constitutes a genuine systemic step forward — it has materially strengthened the mechanisms for manager selection, management effectiveness oversight, accountability and transparency. As of February 2026, however, the reform has been only partially implemented: a significant portion of the secondary legislation remains outstanding, without which the new mechanisms cannot become fully operational. This creates operational uncertainty and the risk that ambitious legislative changes will remain aspirational rather than effective.

In light of the foregoing, the following steps are recommended:

• adopt joint orders of ARMA and the Prosecutor General’s Office on the asset identification and intake procedures;
• approve the procedure for storing assets accepted into ARMA’s management and the methodology for determining management feasibility;
• adopt model asset management agreements and the expenditure approval procedure;
• align the appraiser selection procedure with the amended Law;
• adopt a revised asset disposal procedure incorporating key new features: a prohibition on asset acquisition by former owners or their related persons (in accordance with FATF standards and EU Directive 2024/1260), and clear lot formation criteria designed to maximize disposal proceeds;
• regulate the corresponding obligations of prosecutorial authorities with respect to the timelines and manner of responding to ARMA’s referrals on the need to transition to asset disposal.

It is also critically important to establish a monitoring mechanism for the implementation of adopted secondary instruments, incorporating the views of key stakeholders, in order to identify practical challenges and operational needs in the processes within the Agency’s remit. 

Overall, the pace of secondary legislation adoption is insufficient, given that the key provisions of the Law were to take effect as of February 2026. Notwithstanding this, provided that high-quality secondary legislation is adopted promptly, there remains a genuine prospect that ARMA will, in time, be able to build greater institutional credibility — both among other government authorities and with the broader public. 

Reform status and implementation of the law

To meet the requirements of the ARMA reform law, a package of subordinate regulations has already been drafted, and a substantial portion has entered into force. The implementation status of the key documents is as follows:

• The government has approved procedures for selecting asset managers for “simple” and “complex” assets, for monitoring the effectiveness of management, and for calculating estimated value.
• The resolution on asset insurance has successfully passed the government committee stage and is being prepared for consideration at a Cabinet of Ministers meeting.
• The procedure for approving template agreements and asset management programs is at the final stage of review within the Cabinet of Ministers Secretariat.

In addition, the meeting noted that the commission for selecting managers for complex assets is being finalized, and central executive authorities have already submitted nominations.

Inventory results and asset classification

This was among the most extensive tasks to be completed in the six months after the updated ARMA law was adopted. According to the Agency, as of December 31, 2025, the Unified Register of Seized Assets contained 102,569 entries. To determine the real volume of liquid assets, ARMA filtered out items without independent economic value, including 28,000 household items from Mezhyhiria and 20,000 items from Medvezha Dibrova.

This claim sparked a serious debate at the committee meeting: participants spent considerable time trying to establish how many assets are actually under ARMA’s management. We find the very reasons for this debate deeply unfortunate, because the same ARMA reform law launched the inventory of remaining assets and introduced the concept of an “asset pool” precisely so that economically meaningful groupings of assets could be identified and transferred for management effectively. 

Committee Chair Anastasiia Radina pointed out that ARMA was unable to produce a single official document confirming the inventory results, relying instead on “working materials” and internal memos. Yaroslava Maksymenko explained that methodological confusion and outdated accounting persist, along with a “clogged” seized assets register filled with small items and limited resources. In fact, a full, in-depth inventory of all 102,000 objects—given current staffing—would take roughly four months.

Ultimately, ARMA proposed fixing as a baseline 44,815 assets transferred since 2017 under 1,435 court rulings received by the Agency as of December 31, 2025.

Overall, the breakdown by asset category is as follows:

• Vehicles and equipment: 22,384 assets (including 19,307 units of railway rolling stock)
• Real estate and land plots: 6,842
• Various types of goods: 6,613
• Movable property and inventory items: 6,162
• Financial assets and corporate rights: 2,814 (including 533 business entities)

As for the economic liquidity of these results, there is still no final assessment. However, an overall review of identified assets showed the following distribution:

• 22,730 assets were deemed potentially manageable or suitable for sale;
• 6,982 items were destroyed, damaged, or located in occupied territories, abroad, or listed as wanted;
• 3,542 assets require procedural follow-up or a change in the method of management through the courts.

In summary, an accounting discrepancy was identified for 11,561 objects. As the Agency explained, this reflects a mismatch between assets transferred in practice and the assets listed in court rulings. In addition, work to define liquid units of assets has not yet been completed. Once identification is finished, the Agency plans to conduct a physical inventory and place assets on its balance sheet. When asked how many assets have been transferred to managers, and how many have been put out to competition, ARMA did not provide an answer.

Overall, Radina sharply criticized the absence of a single administrative act that would formally record the inventory results and establish the final number of assets. ARMA must therefore provide official information with verified figures, clearly distinguishing assets that can be managed, those requiring additional documentation, and the “gray zone” (unidentified property).

Social initiatives: housing for IDPs

Although the committee meeting did not ultimately yield a results-focused discussion of ARMA’s performance, MPs raised several questions they considered important. One concerned developing a mechanism for using seized residential real estate to meet the needs of internally displaced persons. ARMA proposed applying Article 21-1 and transferring such assets to state-sector entities, since commercial competitions for these properties did not attract private investors due to the social burden involved.

Maksymenko, however, pointed to technical obstacles. For example, many apartments are currently occupied by minor children, whose eviction is prohibited by law. In addition, commercial hotels have good-faith tenants whose equipment keeps building infrastructure functioning, and there is no mechanism to relocate people if a court unexpectedly lifts an arrest. The parties agreed to revisit the issue at the next meeting. We previously flagged similar risks related to transferring seized assets for IDP needs in our legal analysis of the relevant draft law.

High-profile asset cases: KAMparytet, Pin-Up, and CHP plants

The discussion of high-profile asset management cases was no less telling.

The first example concerned the KAMparytet management company whose interests, in spring last year, were allegedly advanced by then-ARMA head Olena Duma. Radina cited facts suggesting that the manager sublet shopping centers at prices three times higher than the income it declared to ARMA, leading to direct budget losses. The Agency confirmed the revealed violations and reported that it had begun procedures to terminate the contracts with this manager for inefficiency. 

One MP also expressed outrage at the return of UAH 122 million to Pin-Up owner Ihor Zotkin, described as having a questionable reputation. Yaroslava Maksymenko responded that she was executing a court decision: the plea agreement approved by the prosecutor did not provide for confiscation of these funds, which automatically required returning both the funds and the income generated from their management once the arrest was lifted.

A separate point is worth making here: the amendments allowing confiscation as a punishment when concluding an agreement that provides for release from serving a sentence applied only to corruption offenses. In this case, questions should have been directed not at ARMA’s leadership, but at Prosecutor General’s Office prosecutor Maksym Kapustin, who is listed on the court’s website as the prosecutor who submitted the agreement, and at Pecherskyi District Court judge Oleh Soloviov, who issued the judgment based on that agreement after finding it to be in the public interest. 

As for the management of the Novyi Rozdil and Novoiavorivsk CHP plants, seized in the case involving former MP Dubnevych, MPs emphasized the risk of disrupting the heating season because the current contracts expire in November 2026. They stressed that Naftogaz needs guarantees of continued management now to plan budgets for technical upgrades and modernization. ARMA’s leadership assured the committee that all contracts are being processed, but that extending them through the Cabinet of Ministers takes time.

Financial indicators and budget revenues

One committee member presented an analysis of budget revenues from asset management in the second half of 2025, showing a steep decline:

• July 2025: UAH 102 million
• August 2025: UAH 57 million
• September 2025: UAH 45 million
• November 2025: UAH 29 million

ARMA representatives explained that July’s UAH 102 million was an anomalous one-time spike driven by dividend payments from Ukrnafta and Naftogaz. Subsequent figures, they said, reflect problems with previously concluded contracts for managing seized assets and the genuinely low effectiveness of current management for other assets.

***

Taken together, these developments show that ARMA’s reform requires significant resources and systematic, parallel management of several processes—something that still has not happened at the highest level.

Unfortunately, we still have not heard a clear picture from ARMA’s new leadership of how many assets are actually manageable. Confusion over the numbers remains, driven by different accounting approaches. That said, Maksymenko’s and Saienko’s answers were more focused on constructive work rather than populist statements—as was often the case before—which gives some hope that the processes described above will pick up pace.

Background of the assets

These lands and real estate are part of a case concerning the embezzlement of funds from the State Agency for Investments and Management of National Projects of Ukraine (State Investment Project). This refers to the theft of more than UAH 259 million from the State Investment Project in 2012–2014, when the agency was headed by Vladyslav Kaskiv. 

The funds were taken by private firms that were allegedly supposed to implement two projects: to install drinking-water vending machines in Ukraine’s largest cities (the Quality Water project) and to prepare infrastructure for a potential Winter Olympics in Ukraine (the Olympic Hope-2022 project). Instead, the money was moved offshore, partially laundered, and “reinvested,” including into the very land plots that have now caused a scandal.

Under a plea agreement approved by a HACC verdict in July 2024, the defendants reimbursed the state for UAH 259 million in damages, and the lands were transferred to ARMA for sale. As early as May 17, 2024, the Agency’s specialists inspected them and announced the sale on Prozorro.Sale platforms.

Three questions about the process

ARMA’s sale of this particularly valuable category of assets has understandably sparked public outrage—both over the price and the buyers. However, this example once again raises important questions. Addressing them will help prevent similar situations in the future. 

1. Was a proper valuation ensured, and were the timeframes for selling the assets appropriate?

ARMA selected companies to run the auctions three times, and the land plots were also valued three times. In the seized-assets register, one of the land plots indicates that Polonex LLC was to organize auctions from November 2024; however, the first and repeat auctions were unsuccessful. The same was true for TENDER ONLINE PE, which attempted to sell these plots from June 2025. A questionable success came only to UKRINVESTENERGOCONSULT LLC, which ultimately sold the asset. 

At the same time, each updated valuation reduced the estimated value. The initial combined valuation of the land plots exceeded UAH 1.067 billion, but by July 2025 the asset was listed for sale at UAH 827.4 million. As ARMA explained in response to our request, the latest valuation was conducted by SVM BUSINESS GROUP LLC at the request of the auction organizer, UKRINVESTENERGOCONSULT LLC, and as of September 26, 2025, amounted to UAH 347.9 million (excluding VAT).

This raises questions about the reasons for the dramatic drop in valuation, as well as whether lessons from the failed prior sales were taken into account in subsequent auctions.

This primarily concerns splitting the land plots into lots, because in every auction iteration the assets were sold in three lots: 

• 245 land plots;
• 208 land plots, as well as the lower station with a chairlift line and the upper station of the ski lift;
• 41 land plots.

In response to a request, ARMA explained that the lots were formed based on a letter from the Specialized Anti-Corruption Prosecutor’s Office dated July 25, 2024. The proposed lots were structured so that, considering the adjacency of the lands and their size, each lot would be maximally commercially attractive and the time needed to receive proceeds from the sale would be minimal.

However, the number of failed auctions shows that buyer interest was still insufficient. And regardless of requests and suggestions from other participants in the process, ARMA bears responsibility for splitting the asset into lots.

2. Were safeguards in place to prevent related parties from buying the assets?

Media reports have suggested that lands seized in the Kaskiv case, purchased with money stolen from the state, have effectively returned to the same people.

Approaches to banning prior owners of criminal assets from “buying them back” from the state after confiscation differ. A new FATF guide on recovering assets obtained through crime notes that allowing criminals to regain their assets through auctions, even at market price, may undermine confiscation goals (such as deterrence) and damage the reputation of authorities. Some states conduct relevant checks on buyers. 

This is stated more directly in paragraph 40 of the Preamble to EU Directive 2024/1260 of April 24, 2024, which provides that the state should take measures to prevent assets from returning into the ownership of convicted persons or persons associated with them.

The HACC verdict approving the agreement in the case involving these land plots states that the criminal proceedings contain no information indicating that the founders and/or directors of the companies owning the land plots (i.e., Borzhava Development LLC, Borzhava Invest LLC, Borzhava Land LLC, Dumka LLC, Taurus Invest LLC, Taurus Property LLC, Taurus Land LLC) knew that the lands had been acquired through criminal means. However, the defendants in the case secured these companies’ consent for proceeds from ARMA’s sale of these lands to be transferred to a special National Bank account for collecting funds in support of Ukraine’s Armed Forces.

According to YouControl, the buyer of the land plots, Ihor Vlasiuk, is a co-founder of Borzhava Asset LLC, whose ultimate beneficial owners are Andrii Vinhranovskyi (the buyer of the other two lots) and Renata Huseinova. Even from these public data, it is clear that Borzhava Asset LLC has connections with the companies that are the formal owners of the lands—Borzhava Development LLC, Borzhava Invest LLC, Borzhava Land LLC, Dumka LLC, Taurus Invest LLC, Taurus Property LLC, Taurus Land LLC.

It is important to emphasize that the updated ARMA law includes provisions prohibiting persons associated with an owner, suspect, or defendant from managing assets. The Agency is currently developing secondary legislation to implement the new law, including these provisions. Those acts should clearly define the same ban for cases of asset sales as well—so that property does not, through negligence or oversight, return to former owners.

3. Has environmentally responsible stewardship of sites with ecological value been ensured?

The Borzhava mountain meadow has special ecological and recreational value. Despite this, in July 2025 ARMA indicated that land plots in this area have development potential—specifically, that the designated purpose of these lands allows their use for tourism, recreation, and residential development.

At the same time, a Bihus.Info investigation mentioned that Serhii Liovochkin plans to build a ski resort called “Borzhava” in this area. The sold assets also include the upper and lower stations of the ski lift.

This raises the question of whether mechanisms are in place to ensure environmentally responsible use of such sites after their sale.

What comes next?

According to information published by the head of the Verkhovna Rada’s Anti-Corruption Committee, ARMA may still cancel the result of these auctions.

It should be understood that the key decisions regarding this sale were made back in May–June 2024—before ARMA’s reform and the change in the agency’s leadership. However, now that the rules have changed, the example of assets “returning” to people close to Kaskiv and Liovochkin has become a painful irritant for society. 

Therefore, both the Agency and lawmakers need to study this case in detail and use it to further improve the process for selling seized assets, and to develop solutions that make it impossible for similar situations to recur.

What exactly has changed in the approach to the competition

The new selection procedure gives a key role to experts delegated by international partners: without their votes, it becomes impossible to adopt any decision. This is a significant step forward compared to the previous model, which left the competition more vulnerable to undue political influence.

Previously, the selection commission consisted of three representatives of the Verkhovna Rada and one representative each from the Prosecutor General, the NABU Director, the Minister of Justice, the Head of the State Financial Monitoring Service, and the Minister of Finance. The new model, by contrast, provides for a six-member commission appointed by the government. At the same time, the Cabinet of Ministers must appoint half of its members based on nominations from international development partners.

The pool of potential candidates has also expanded. From now on, not only lawyers, as in prior selections, but also economists may apply, which significantly broadens the range of professionals. In addition, the law introduced a mandatory requirement that the new Head of ARMA command one of the official languages of the Council of Europe.

The law also detailed the integrity and professional competence criteria for candidates—shortcomings that TI Ukraine repeatedly highlighted in its publications. The political neutrality requirement has been strengthened as well: candidates must now have no ties to political parties for two years, whereas previously the cooling-off period was one year.

Finally, the selection procedure has been supplemented with a stage involving practical tasks. By decision of the commission, additional testing or other assignments may also be introduced. The current commission selecting ARMA’s Head has already approved all of these elements.

Who can take part in the competition and how

As provided by the new law, preparations for the new selection of ARMA’s Head began practically immediately after Olena Duma’s dismissal. On September 25, the Cabinet of Ministers appointed members of the selection commission, and on November 20, it held its first meeting. 

Then, on December 19, the start of document submission was announced—anyone willing to take part may apply until January 19.

As I have already mentioned, the competition is now open to a wider circle of candidates. A person may apply for the position of ARMA Head if they are a citizen of Ukraine, have a higher legal or economic education, at least five years of professional experience and at least three years of managerial experience, are fluent in the state language and one of the official languages of the Council of Europe, and meet integrity and competence requirements. All requirements are set out in detail on the Cabinet of Ministers’ website.

However, submitting documents is only the first stage. In addition to the above, the Commission has approved the criteria and methodology for evaluating candidates as well as the procedure for conducting the competition. It also described in detail all stages that applicants will need to pass. 

The competition itself is intended to be as transparent as possible. Before adopting the above-mentioned evaluation criteria and methodology and the competition procedure, the Commission presented them for public comment and reviewed all feedback received in order to refine these documents. In addition, at its most recent meeting, commission members explained how knowledge and skills would be assessed and stated that the practical assignments completed by participants would be made public. 

And, of course, all interviews assessing integrity and professionalism will also be public—so anyone interested will be able to watch and form their own impression of who may go on to lead the Asset Recovery and Management Agency.

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ARMA’s reform is a necessary step towards building an effective system for managing seized assets obtained through corruption and other crimes. The institution was created to prevent losses, both for asset owners and for the state, if seized assets are ultimately confiscated. But so far, the Agency has not achieved these goals. And, unfortunately, an obstacle has too often been the reluctance of previous Heads to initiate and properly implement the necessary changes.

That is precisely why meaningful reform of ARMA is impossible without professional leadership of the institution. We therefore call on all ethical professionals to apply for the competition.