FINDING AND TRACING ASSETS IN CRIMINAL PROCEEDINGS
Legal Grounds
The activities of the National Agency of Ukraine for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes (ARMA) to find and trace assets that may be seized pursuant to rulings in criminal proceedings are carried out in a manner similar to that of asset recovery agencies successfully operating in EU Member States, in accordance with Council Decision 2007/845/JHA of 6 December 2007 and other EU legislation.
ARMA is a central executive body with special status that ensures the formation and implementation of state policy in the field of finding and tracing assets that may be seized in criminal proceedings or in cases involving the recognition of assets as unjustified and their Recovery to the State Budget.
Finding of assets means establishing the fact of the existence of assets.
Tracing of assets means determining the location of assets.
In accordance with Part One of Article 170 of the Criminal Procedure Code of Ukraine, investigators and prosecutors must take the necessary measures to find and trace property that may be seized in criminal proceedings, in particular by requesting information from ARMA, other state authorities, local self-government bodies, individuals and legal entities.
According to Part One of Article 9 of the Law of Ukraine “On the National Agency of Ukraine for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes”, one of the main functions of ARMA is to take measures for finding and tracing assets upon the request of investigators, detectives, prosecutors, courts (investigating judges), and central executive bodies within their legal powers. ARMA also provides explanations, methodological and advisory assistance to investigators, detectives, prosecutors and judges on issues related to the finding and tracing of assets.
Article 16 of the Law stipulates that, for the purposes of finding and tracing assets, ARMA:
- Takes measures pursuant to requests from pre-trial investigation authorities, prosecutors and courts, and cooperates with these authorities to ensure seizure and, where applicable, confiscation of such assets;
- Cooperates internationally with the competent authorities of foreign states in exchanging information and best practices in the field of asset finding, tracing and management;
- Ensures cooperation with international and intergovernmental organisations and networks engaged in international asset finding, tracing and management, including the Camden Asset Recovery Inter-Agency Network (CARIN), representing Ukraine within this organisation.
To support procedures for finding and tracing assets that may be seized in criminal proceedings, ARMA has established necessary cooperation with all law enforcement bodies.
By Order of the National Agency of Ukraine for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes (ARMA), the National Anti-Corruption Bureau of Ukraine, the Prosecutor General’s Office of Ukraine, the Security Service of Ukraine, the Ministry of Internal Affairs of Ukraine, and the Ministry of Finance of Ukraine dated 20 October 2017 No. 115/197-o/297/586/869/857, registered with the Ministry of Justice of Ukraine on 2 November 2017 under No. 1342/31210, the Procedure for Interaction in the Consideration of Requests from Pre-trial Investigation Authorities, Prosecutors’ Offices and the Execution of Requests from Foreign States for the Finding and Tracing of Assets was approved.
By Order of ARMA and the State Bureau of Investigations dated 26 April 2021 No. 151/262, registered with the Ministry of Justice of Ukraine on 14 May 2021 under No. 642/36264, the Procedure for Interaction between ARMA and the State Bureau of Investigations on the Finding and Tracing of Assets was approved.
By Order of ARMA and the Economic Security Bureau of Ukraine dated 22 February 2022 No. 54/50, registered with the Ministry of Justice of Ukraine on 11 May 2022 under No. 507/37843, the Procedure for Interaction between ARMA and the Economic Security Bureau of Ukraine regarding the Finding and Tracing of Assets was approved.
Applicants in criminal proceedings
Applicants in criminal proceedings are investigators, detectives, and prosecutors acting within their powers.
Pre-trial investigation bodies and prosecution bodies, represented by their heads, may also submit requests to ARMA.
The parties to the proceedings are independent in drafting and submitting requests to the ARMA.
The request is signed personally by:
the investigator, detective or prosecutor, if the party to the proceedings is an investigator, detective or prosecutor, respectively;
the head of the pre-trial investigation body, the head of the prosecution authority - if the applicant is, respectively, a pre-trial investigation body or a prosecution authority.
Consideration of requests in criminal proceedings
ARMA accepts requests in specific criminal proceedings.
The powers of the investigator, detective, or prosecutor to submit an request are confirmed by an extract from the Unified Register of Pre-trial Investigations, which is attached to the request and certifies the existence of the criminal proceedings specified in the request and the status of the subject of the request in it, if it is an investigator, detective, or prosecutor.
Please note!
- The request must contain ARMA's task to identify and Tracing assets that may be seized in criminal proceedings and its connection with the actual circumstances of the criminal proceedings that may indicate the commission of a crime.
- If it is necessary for ARMA to take measures to identify and Tracing assets that are (may be) located outside Ukraine, the request must contain, in addition to the basic information, the factual circumstances indicating the legal connection of the person or property specified in the request with a specific foreign jurisdiction (foreign jurisdictions).
- The request shall specify an objectively justified period during which ARMA must ensure the execution of the request and provide a response.
ARMA shall take measures to identify and trace assets based on the content of the request, within the powers defined by law and taking into account the degree of actual access to data sources available to third parties.
ARMA ensures that requests are fulfilled as soon as possible, but no later than within three working days from the date of receipt, or within a longer period specified in the request.
If necessary, ARMA requests additional information on the subject of the request, justifying the need for clarification.
The consideration and decision-making based on the information provided in ARMA's response are carried out in accordance with the procedure established by the legislation of Ukraine by the entity that submitted the request for which such a response was prepared.
Example of asset Finding and tracing in criminal proceedings
Between 2020 and 2023, a person authorized to perform state functions acquires ownership of assets in the form of movable and immovable property with a total value of over UAH 61 million by registering them in the name of close relatives of his wife, which exceeds his official income by UAH 56 million.
In addition, in order to conceal the fact of acquiring these assets and wishing to avoid criminal liability, the person, being a subject of declaration, enters knowingly false information for the reporting period into the declarations of a person authorised to perform state or local self-government functions.
The acquired assets are registered in the names of the parents and grandmother of the spouse, while the official and his spouse use part of this property, as can be seen from open sources of data (between 2020 and 2023, the wife's parents and grandmother become owners of luxury real estate in residential complexes in the city of Kyiv and the Kyiv region, premium real estate in the city of Uzhhorod, and two high-end SUVs).
It should also be noted that, according to information received by ARMA from all banks in Ukraine, between 2021 and 2023, relatives of the official carried out several transactions at one of Ukraine's banks without opening accounts, with the following payment purposes: payment under a contract for the sale of property rights; payment for the above-mentioned cars, purchase of currency.
At the same time, analysing the information obtained from the database on official income from which taxes were paid, it was established that the relatives of the official mainly receive social benefits, there is no official confirmation that they are engaged in business, and they are currently pensioners.
In other words, the total amount of funds received from legal income does not allow them to purchase numerous properties and cars, with a total value of over UAH 61 million.
As for the spouse, according to the official's declarations, she also did not officially have sufficient funds, as did the official himself, based on his salary and declared savings, to help relatives purchase such a large amount of movable and immovable property.
A typical example of a request from law enforcement agencies to the ARMA