Increasing control over the activities of ARMA

31/ 08/ 2023

Author: Oleksandr Chornukha, attorney at Dynasty law & investment Non-transparent procedures for determining managers for assets transferred to the management of ARMA, cases of economically inefficient sale of such assets, delays in determining managers and transferring to them assets seized on the territory of Ukraine, allegedly related to the Russian Federation, lead not only to a lack of revenues to the state budget and loss jobs, but also to the threat of additional financial obligations for the state budget in connection with the need to compensate the owner of the lost value of assets, in the event of acquittals by the court or the cancellation of the corresponding seizures of these assets. As established by the Temporary Investigative Commission of the Verkhovna Rada of Ukraine, ARMA has up to a thousand assets worth 80 billion hryvnias. At the same time, ARMA concluded only 10 asset management contracts in 2022. Thus, ARMA generated 34 million hryvnias of revenue for the budget of Ukraine in 2022, and expenses amounted to 748 million hryvnias, which indicates the debatable effectiveness of work for 2022. Currently, the Verkhovna Rada of Ukraine is considering a draft law whose task is to improve the mechanism of external independent control over the work of ARMA, including as a mechanism of accountability of the head of ARMA, as well as establishing guarantees of the openness of the state register of assets in criminal proceedings that have been seized. Changes to this law provide for the procedures for creating and monitoring the work of the commission for the external independent assessment of the performance of the search and asset management agency. As for the composition of the commission, instead of three people, the composition of the commission will increase to six people, who will be determined by the Cabinet of Ministers of Ukraine in accordance with the mutual proposal of international organizations, three people and one person each from the Prosecutor General, the head of the State Financial Monitoring Service of Ukraine, and the Director of NABU. The adoption of the draft law will allow to increase control over the effectiveness of ARMAs activities, will create appropriate conditions for the openness and accountability of its activities, and possibly change the agencys performance to the best.

Author: Oleksandr Chornukha, attorney at Dynasty law & investment

Non-transparent procedures for determining managers for assets transferred to the management of ARMA, cases of economically inefficient sale of such assets, delays in determining managers and transferring to them assets seized on the territory of Ukraine, allegedly related to the Russian Federation, lead not only to a lack of revenues to the state budget and loss jobs, but also to the threat of additional financial obligations for the state budget in connection with the need to compensate the owner of the lost value of assets, in the event of acquittals by the court or the cancellation of the corresponding seizures of these assets.

As established by the Temporary Investigative Commission of the Verkhovna Rada of Ukraine, ARMA has up to a thousand assets worth 80 billion hryvnias. At the same time, ARMA concluded only 10 asset management contracts in 2022. Thus, ARMA generated 34 million hryvnias of revenue for the budget of Ukraine in 2022, and expenses amounted to 748 million hryvnias, which indicates the debatable effectiveness of work for 2022.

Currently, the Verkhovna Rada of Ukraine is considering a draft law whose task is to improve the mechanism of external independent control over the work of ARMA, including as a mechanism of accountability of the head of ARMA, as well as establishing guarantees of the openness of the state register of assets in criminal proceedings that have been seized.

Changes to this law provide for the procedures for creating and monitoring the work of the commission for the external independent assessment of the performance of the search and asset management agency.

As for the composition of the commission, instead of three people, the composition of the commission will increase to six people, who will be determined by the Cabinet of Ministers of Ukraine in accordance with the mutual proposal of international organizations, three people and one person each from the Prosecutor General, the head of the State Financial Monitoring Service of Ukraine, and the Director of NABU.

The adoption of the draft law will allow to increase control over the effectiveness of ARMA’s activities, will create appropriate conditions for the openness and accountability of its activities, and possibly change the agency’s performance to the best.