ARMA has never conducted a full-fledged external audit - expert

A full external audit of the National Agency of Ukraine for finding, tracing and management of assets derived from corruption and other crimes (ARMA) has never been conducted. At the same time, the limited amount of information available on ARMA's activities may pose corruption risks. This opinion was expressed in an exclusive commentary to UNN by Pavlo Demchuk, legal advisor of Transparency International Ukraine.

I would like to emphasize that an external audit of ARMA has never been conducted, and this is a problem

According to him, the audit conducted by Crowe Ukraine in 2022 should have been only a component of an external independent audit.

Demchuk also emphasized that the valuation of seized assets is key to the realization of assets. It is on this basis that, for example, the amount for which ARMA insures the asset is determined. And, potentially, if there are any problems with the seized asset, its owner, after the seizure is canceled, may demand compensation from the state due to inefficient management of his property.

Another problem, according to Demchuk, is that the procedure for selecting managers of seized property has not yet been determined, as the Agency does not manage the assets on its own.

The ARMU law refers to the provisions of the public procurement law, which, according to the expert, is not very suitable for these procedures. Demchuk explained that the selection of a manager should be based not on the lowest price for services, but on how effectively the manager can manage the asset so that it retains its value.

For example, if we take a plant that is being transferred to management, which has been seized and transferred to the ARMA, the ARMA announces a tender for the manager of this plant. And interested businesses have to offer, so to speak, a business plan on how they are going to develop it. Do they plan to launch some kind of advertising, will they continue the processes that were carried out before, and so on

According to Demchuk, the problem of the limited amount of information about the Agency's activities is equally important to solve.

In fact, what are the corruption risks? In the lack of transparency of information - a very limited amount of publicly available information about what is happening to a particular asset. We have a state register of seized assets, which is not fully filled and not all the information in it is correct. And so we have corruption risks - just a subjective approach to choosing a manager. And it is clear that ARMA selects the managers, and if ARMA officials want to get some kind of benefit, illegal, they can do it

According to the expert, the Government could approve a procedure for selecting managers that would clearly set out comprehensive evaluation criteria. According to him, a similar example is already in place when selecting sellers of seized assets.

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In early June, Kyiv's Shevchenkivskyi District Court granted the Prosecutor General's Office's motion and allowed the transfer of the Gulliver complex to ARMA. However, representatives of Gulliver claim that this decision grossly violates the procedural and substantive rules of law and actually means a business takeover with the assistance of law enforcement and security agencies.

It is not yet clear how this situation will develop further, as representatives of the company that owns the complex are arguing in court that this decision is groundless and illegal.