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18-03-2019

Certain aspects on asset transfer into ARMA’s management explanation

The monitoring of informational resources has indicated a certain interest in discussing the issue of transfer of seized assets into ARMA’s management. In particular, often arises the question of difference in the number of assets transferred into management of ARMA with the number specified in court rulings. Alongside, the novelty of the institution on management of seized property together with a large amount of inaccurate data in the informational space, sometimes leads to false conclusions in the media on how the transfer of seized assets into management should take place and how it actually does.

In this connection, the following should be noted.

Firstly, ARMA defines all law enforcement authorities of Ukraine as important partners in the implementation of the functions and tasks of ARMA. The implementation of the function of seized property management began upon launch of cooperation between ARMA and the Chief Military Prosecutor's Office of the General Prosecutor's Office of Ukraine. From October 2017 and up until now, this cooperation has allowed us to form a positive practice in seized property management and to overcome a number of obstacles to this public function fulfilment.

In particular, after many difficulties, the profitability of managing commercial real estate seized at the Gulliver Business Centre in Kyiv was achieved, seized vehicles were sold at market prices, and the proceeds from their sale were secured by accruing high interest per annum for almost a year and a half.

ARMA is aware that effective management of seized property depends on the coordinated work and cooperation between ARMA, the pre-trial investigation authority and the prosecutor's office. For this reason, no official position of ARMA or the Head of ARMA has or shall have criticism of law enforcement authorities.

Secondly, the task of seizure in criminal proceedings is to prevent the possibility of concealment, damage, destruction, transformation, alienation of property for which there is a combination of grounds or reasonable suspicion to believe that it is a proof of a crime or subject to confiscation or special confiscation. Under such circumstances, seizure may be imposed on property held under supervision of law enforcement bodies and on property owned by third parties, including unidentified ones.

The objective of the institution on management of seized property is to achieve the purpose and tasks of seizure in criminal proceedings. Thus, pursuant to the legal nature, management of seized property is a unique instrument to secure seizure, which is a measure to ensure the criminal proceeding. Accordingly, upon decision of the investigating judge, the court seized property may be transferred into the management of ARMA regardless of whether it is held under supervision of the law enforcement body at the time of such a decision issuing. In particular, it is stipulated by the need for procedural economy. At the same time, the very fact of such a transfer enhances seizure in criminal proceedings, specifically in connection with the following:

1) On the basis of the corresponding court decision and in order to organize the management of seized property ARMA obtains a set of rights, which, during the term of seizure have a legal priority over the rights of any third parties with respect to such property, including the rights of the owner; information on the occurrence of such rights must be included in the relevant state registers and databases, which serves as an additional safeguard against attempts to bypass seizure in criminal proceedings; in the event of unauthorized actions in regards of such property, ARMA is authorized to protect its rights to management, including by filing appeals on the registration actions, filing claims for the invalidation of transactions, etc.;

2) Even without direct access to property in management, ARMA has the right to partially exercise its functions in organizing the management of a seized asset, in particular, by collecting information on it, conducting analyses, ordering researches, communicating with law-enforcement bodies, organizing procurement of goods, works, services, necessary for further management, etc.

Accordingly, a ruling on the transfer of a seized asset into the management of ARMA leads to the emergence of a new subject of law with respect to a particular asset. Neglecting of such rights by the owner or any third party is unlawful. In the event of violation, ARMA is authorized to protect its rights to the management as prescribed by law.

Lack of full access to assets transferred to ARMA into management under a court decision hinders the implementation of the total amount of organizational measures for the management of seized property. At the same time, it is the issuance of a court decision on the transfer of a seized asset into the management of ARMA, which creates additional guarantees for preservation of seized property in a criminal proceeding.

At present, the portfolio of seized assets, transferred into the management of ARMA under the court decisions, is about 700 different positions - depending on the way of accounting. Their management status is dynamically changing. You will find more details on the types, description and status of management of such assets in the relevant list, to be made public soon. Follow the latest news on ARMA.