Draft bill #12374 of January 2, 2025 

Sponsor: Cabinet of Ministers 

Status: sent for review to the Anti-Corruption Committee of the Verkhovna Rada 

Who is affected: the National Agency of Ukraine for Finding, Tracing, and Management of Assets Derived from Corruption and Other Crimes (hereinafter — ARMA), the Cabinet of Ministers, the Ministry of Foreign Affairs, and NGOs 

Summary: 

Guarantees of ARMA’s independence 

  • the following guarantees of independence for ARMA from influence or interference in its activities will be established: 
    • special status 
    • special procedure for the selection, appointment, and dismissal of the ARMA Head and deputy heads 
    • procedure for financing and logistical support defined in a law (it is harder to change than a bylaw) 
    • operational transparency 
    • only the Prosecutor General and the head of the Specialized Anti-Corruption Prosecutor’s Office will have the authority to issue a notice of suspicion of a crime against the ARMA Head or a deputy head. The same will apply to requests for temporary suspension from work of the Head or deputy head if they are suspected of a crime 
    • the Cabinet will have no power to fully or partially annul ARMA’s acts 
  • it will be prohibited to use ARMA for the benefit of party, group, or private interests, and no activities of political parties will be allowed within ARMA 
  • the bill prohibits state institutions, local authorities, officials, political parties, public associations, and anyone else from interfering with ARMA’s work and hindering it in performing its duties 
  • any written or oral instructions, requests, or assignments to ARMA or its employees that are not provided for by law will be recognized as unlawful and will not be executed. If an ARMA employee receives such an oral instruction or request, they will have to immediately report it in writing to the ARMA Head. 

Head of ARMA 

  • new grounds for termination of the ARMA Head will be introduced: 
    • resignation request submitted by the Head 
    • acquisition of citizenship of another country 
    • a court ruling that has come into legal effect requiring the civil confiscation of their unjustified assets 
    • a persistent real or potential conflict of interest that cannot be resolved otherwise. 

Selection of the ARMA Head 

  • selection will be conducted by a selection committee comprising of: 
    • three individuals appointed by the Cabinet 
    • three individuals appointed by the Cabinet based on nominations from international organizations assisting Ukraine in combating corruption, reforming law enforcement, or searching for and managing illegally obtained assets 
  • the Ministry of Foreign Affairs will compile the list of such partner organizations no later than three months before the current ARMA Head’s term ends, or within three working days in case of the Head’s early dismissal 
  • the selection committee will be formed no later than two months before the end of the Head’s term or within 14 days in case of the Head’s early dismissal 
  • a member of the selection committee will be required to have a higher education, an impeccable business reputation, high professional and moral qualities required for the proper execution of a committee member’s duties, and meet integrity criteria 
  • a person will not be allowed to become a committee member if they: 
    • are deemed legally incompetent or have their rights limited by a court 
    • have an unspent or unexpunged offense, or fined for a corruption offense during the past year 
    • a court prohibited them from holding public office or performing state functions 
    • currently employed in state or local services (as prescribed by the anti-corruption legislation) 
    • is a member of a governing body of a political party 
  • the selection committee will be operational only after its full composition is approved 
  • the Secretariat of the Cabinet will provide organizational and technical support for the committee’s activities 
  • an applicant for the ARMA Head position will also have to submit a motivation letter and their vision for future activities 
  • the selection committee will conduct testing, interviews, and checks of candidates for the ARMA Head position. Then, through open voting, they will select up to two best candidates who have the most professional experience, deep knowledge, excellent personal qualities, and are competent and honest. The committee will propose the selected candidates to the Cabinet for appointment 
  • committee decisions will be made during its sessions. A decision will be recognized as adopted if at least four committee members vote in favor, including at least two members nominated by international organizations 
  • if a decision is not made within 24 hours from the first vote during repeated votes, the decision supported by at least three committee members, including at least two members nominated by international organizations, will be recognized as adopted. 

Other issues related to ARMA’s operations 

  • if the ARMA Head has a real or potential conflict of interest, they will have to inform the Cabinet in writing no later than the next working day to resolve it 
  • to prevent, detect, and investigate offenses in the work of ARMA employees, an internal security and control unit will operate within its central apparatus. 

Status of ARMA employees 

  • all ARMA employees will be appointed to their positions only via the competition as required by the Law on Civil Service 
  • the ARMA Head will have the right to appoint without competition only their deputies 
  • to select employees for ARMA, the Head will establish selection committees. Each committee will consist of five people, with at least two nominated by representatives of NGOs, and two proposed by the ARMA’s Public Control Council. 

Control over ARMA’s activities 

  • independent external evaluation (audit) of ARMA’s effectiveness will be conducted one year and three years after a new head is appointed 
  • the evaluation will be conducted by a dedicated commission, consisting of three individuals appointed by the Cabinet based on nominations from international organizations 
  • public control over ARMA’s activities will be exercised via the ARMA’s Public Control Council, consisting of nine people elected based on a rating vote. The Council’s composition will be approved by the Cabinet. 

Realization of assets 

  • asset realization will be conducted at electronic auctions in the Prozorro.Sales electronic trading system and at other platforms 
  • it will be allowed to transfer movable property for realization without the owner’s consent by a decision of the investigative judge if storage costs exceed 30% of the asset’s value within one calendar year (instead of 50%). 

Implementation 

  • the law will come into effect the day after its publication 
  • on the law’s effective date, the formation of the commission for evaluation will begin, which will have to reach a conclusion on ARMA’s effectiveness within 12 months 
  • within six years after the law is enacted, a draft bill on terminating international organizations’ participation in forming the committee selecting the ARMA Head and the evaluation commission will be prepared (in eight years). 

What is right: 

  • the bill will establish guarantees of ARMA’s independence 
  • the procedure for the selection of the ARMA Head will be clear and transparent 
  • the bill improves the procedure for external evaluation of ARMA’s performance 
  • implementation of the bill is one of the components of the Ukraine Facility plan. 

Background information: the creation of the Asset Recovery and Management Agency (ARMA) was once a requirement for Ukraine to obtain a visa-free regime with the EU. The law defines ARMA as an executive body tasked with tracing assets of criminal case figures upon law enforcement request and managing seized assets.