Will the assets stolen by the former regime be returned and what is the legal status of Mezhyhiria? How many assets were siphoned off from the state by Kurchenko, Zakharchenko, Pshonka? Is their overall amount estimated and who should manage the assets?
These issues are of rhetorical nature due to the lack of legal and institutional mechanisms allowed the state to trace and manage stolen assets. The task of the newly developed body the National Assets Recovery and Management Agency (ARMA) is to change the situation and provide answers to these rhetorical questions.
Strengths of the international network
The idea to connect all European countries into one network and provide information on corrupt assets in different countries as well as to prevent criminals from concealing stolen assets abroad has a long history. For the first time, the idea was formulated in 2007. And then, the decision of the EU Council highlighted the need to establish similar offices for the detection and tracing of assets in all EU countries.
Ukraine postponed the development of such a body because there was no political will. And this delay has helped these very politicians to hide their wealth and escape from the robbed country.
After the Revolution of Dignity (2014), a need to trace and recover the corrupt assets of the former regime became apparent. Nor was there any state agency able to deal with this matter, so journalists performed as investigators. Thanks to their work and the support of international partners, Ukraine froze the wealth of corrupt officials abroad. But for a short period of time only. Indeed, because of the absence of court sentences and decisions in criminal proceedings for the seizure of these assets, most of the assets are now refrozen.
A year later, the need to develop this type of the body responsible to trace and recover the assets has become too painfully evident. Vitalii Kasko, performed as the Deputy Prosecutor General in 2015, headed the Interdepartmental Working Group on the Coordination of the Assets Recovery in Ukraine stolen by former high-ranking officials, and this agency developed the legal framework for the designated institution.
The Law on the Assets Recovery and Management Agency came into force in 2016, and since February 2016 the agency has worked. There is any state system or agency in Ukraine with similar content, scope of functions and legal status. ARMA is a central executive body with a special status, and it is necessary to provide it with more independence, transparency and reduce risks of corruption.
How ARMA works
Just image that ARMA was in force when Yanukovych and his associates run away. Responding to the appeal of the investigator of the prosecutor’s office, the court or the body of pre-trial investigation, the Agency would prove the facts of the existence of assets: money, real estate, shares, etc. Having access to international and interdepartmental databases, all foreign assets of suspects would also be discovered. During the trial ARMA would manage the arrested assets and would have to preserve the value of seized and confiscated assets.
It is important to understand that among the assets there may be shares that can all loose their value, and tons of grain that can easily deteriorate. ARMA will be responsible for preserving the value of the asset. After the court makes a decision on confiscation or special confiscation of assets, the Agency helps to sell these assets, for example, to sell the property and recover the money to the state. Consequently, the entire process from the search to the recovery of funds to the budget now is the competence of one body.
It is an interesting fact that the “asset management” function combined with detection and tracing is the initiative of Ukraine. Each EU Member State has created similar institutions since 2007, but in most cases it has two separate bodies: the Asset Recovery Offices (APO), and the Asset Management Offices (AMO). Today, with the 28 EU Member States, only the Romanian office combines the same functions such as the prosecution and management of corrupt assets as the Ukrainian one.
In addition, in different countries, similar bodies are subjected to different jurisdictions. For example, in Belgium, the Netherlands, Luxembourg and Spain, ARO-AMO works as part of the prosecutor’s office or subjected to monitoring of the justice system. In Austria, Hungary, the Czech Republic, Slovakia and Poland, they operate as a part of the internal affairs system. In Bulgaria and Estonia, they are subjected to the executive authorities (the so-called quasi-administrative office).
In addition to these functions, ARMA have to create the United State Register of Assets, including the objects arrested in criminal proceedings and develop the anti-corruption policy of the state.
The creation of ARMA as a central body with the assigned special status was not a result of the existing political engagement and selectivity of Ukraine’s law enforcement and law enforcement agencies only. As explained by Vitalii Kasko, the head of the interdepartmental group working on the development of the regulatory framework for ARMA, and the board member of Transparency International Ukraine, this body should search criminal assets and manage them – it is a corruption causing factor. Therefore, there were many who wanted to control this agency. Vitalii Kasko underlines it is necessary to avoid direct control of any agency during the stage of formation and ensure transparency of conditions for ARMA. The open and honest competition for the position of the agency’s head was organized as well as decent wage conditions, public council, independence of the body (including foreign auditing) – all of these should work for the best.
An equally important risk is the access of Ukrainian specialists to international databases. To provide ARMA with an opportunity to establish effective relations with international organizations, it is important that the newly created authority had a high confidence level among international partners because the exchange of information, expected at the international network, demands the highest level of accountability and secrecy.
ARMA is working with other asset recovery agencies (not limited to EU member states only). It will also be joined to the CARIN network (the Camden Assets Recovery Inter-Agency Network), which unites 67 members and observers; to the StAR initiative. It also has access to regional networks, such as the Asia-Pacific Asset Recovery Interagency Network Asia Pacific (ARIN-AP), etc. To prevent misuse of data, international partners must be absolutely sure that ARMA are transparent and accountable.
How to join the Public Council
It is sadly to say but Ukraine has a bad experience creating an independent body with a special status – the National Agency on Corruption Prevention (NACP). Right now, it has almost discredited itself on the national and international areas.
Problems with NACP became apparent at its formation stage of the public part of the commission when the head of the commission had to be elected. Then, it is important to mention, the public part was formed by some of the organizations in pockets of politicians, and because of this TI Ukraine filed a lawsuit against the Cabinet and made re-election of the commission.
In order for a new supra-authority body works effectively, it is vital to elect the transparent and independent public council at this very stage. The main responsibilities of the body will be to control the expenditure of the state budget by the Agency, share opinions on regulatory acts, delegate representatives to the competition commission for vacant positions. Representatives of the community are elected perpetually.
Right now, competition is held for the public council at ARMA. Any public organization whose statutory activities are related to the fight against corruption or human rights activities and which registered for at least two years may nominate a candidate.
There are 9 vacant seats. The candidates could be from the following categories: scholars, foreigners, civil servants, civic activists, journalists, lawyers interested in development of the country.
Deadline – August 22. The requirements and details of the voting are available HERE
As soon as the commission verifies the authenticity of the documents, there will be internet voting for the candidates.
It is very important that this public council is not biased and it is not guided by political elites, therefore Transparency International Ukraine actively encourages non-interested individuals to submit their candidacies and nominate honest candidates.