Parliament Takes First Step Toward ARMA Reform: Details of the Draft Law and Positions of the Parties
12 February 15:03
The Verkhovna Rada of Ukraine has approved in the first reading the draft law No. 12374-d, which provides for the reform of the Asset Recovery and Management Agency. This was reported by MP Yaroslav Zheleznyak, "Komersant Ukrainian" reports.
“It provides for the independent selection of the head of the ARMA (with the predominant right of internationals). Significant improvement of the management process. Improving the work of the institution itself. It is also the implementation of the Ukraine Facility with a deadline of March 31,”
– said the MP.
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What does the draft law No. 12374-d provide for?
The document tightens the requirements for candidates for the position of the head of the agency. The competitive selection process itself is also updated. Employees will now be selected through an open competition involving the Public Control Council and civil society organizations.
A clear deadline is introduced for announcing the search for a manager for seized property.
In addition, the minimum value of assets that can be managed by the ARMA is significantly increased from 200 to 500 subsistence minimums (calculated for able-bodied persons as of January 1 of this year).
An important innovation is the requirement to preserve the economic value of the asset during management – this becomes a prerequisite for the transfer of property to ARMA.
There is also a new mechanism: before the transfer of property, its value will be assessed. At the same time, the owner will be able to make a guarantee payment to keep using the asset, but under the supervision of the agency.
Position
The need to adopt the document was substantiated by MP Anastasia Radina. According to her, the work of the ARMA is currently extremely inefficient.
“80% of the seized assets transferred to ARMA under court orders do not generate income for the state. Moreover, these assets have not even been transferred to managers and sometimes continue to “feed” the owners involved in criminal proceedings or corrupt officials. Despite the growth of income from the management of seized assets, ARMA does not ensure effective management of even half of their “portfolio”,”
– the MP wrote on Facebook.
She listed clear problems that the agency faces today:
- “ARMA does not accept seized assets for management, or prosecutors simply do not hand over these assets.
- Most assets have not been transferred to ARMA for years. The average period from the transfer of an asset to ARMA to the announcement of a tender for the search for a manager is 17 months.
- It is often not possible to find asset managers for assets even when ARMA announces tenders.
- Revenues from asset management in ARMA could be higher.
According to the MP, this document tries to solve these problems.
It is worth noting that draft law No. 12374-d was developed in the Committee on Anti-Corruption Policy. It is an alternative to the government’s draft law No. 12374 (without the letter “e”). The Head of the ARMA, Olena Duma, believes that it is the government’s draft law No. 12374 that should be adopted.
She notes that the decision to fundamentally change the way seized assets are managed, including transferring them to insolvency officers, has not been approved.
“The draft law No. 12374-D introduced by the relevant Committee, unlike the Government’s, completely changes the procedure for managing seized assets, namely, introduces debatable provisions on determining the asset manager by the automated asset distribution system and changes to asset managers who are insolvency officers and private executors,”
– wrote the head of the ARMA.
In addition, according to her, Yaroslav Zheleznyak is wrong, because it is a government document that meets the requirements of the Ukraine Facility program.
“I would like to add that when the agency has started to give billions of hryvnias, not 34 million a year, it is not time to change the methods that have just started working! It is time to finalize and approve the changes that the agency has been initiating for over a year. There are many issues that really need legislative regulation. But they need to be improved and moved on, not broken and something new created that works only in New Zealand and is unknown even to the initiators of the bill,”
– the official summarized.
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