Movement exists, but results are lacking: ILI presents a Shadow Report on ARMA's activities

Seized assets still fail to generate economic benefit for the state. Responsibility for this lies with the Asset Recovery and Management Agency (ARMA) – a body with special status tasked with managing these assets. Some problems in its work and in the implementation of the reform are ones ARMA must resolve on its own, while others require state assistance and intervention. This was the key message of the expert event "What the Reform Has (Not) Changed: A Shadow Report on ARMA's Activities."

The discussion centered on the presentation of independent research conducted by experts from the Institute of Legislative Ideas (ILI) analytical center, with support from the Organized Crime and Corruption Reporting Project (OCCRP). The document covers the period 2024-2025, as well as 2026 (in terms of assessing progress in implementing the ARMA reform). The Shadow Report points to both achieved and unfulfilled results over this period.

More than 50 participants took part in the discussion, including representatives of the Verkhovna Rada, ARMA, the Ministry of Justice, the Ministry of Economy, the European Commission, embassies, international organizations, the legal community, business, and civil society.

"The ARMA reform has already brought important changes, but the key question today is how well they work in practice. We analyzed all of the agency's main functions to identify the systemic results of the reform and outline directions for its further improvement," said Tetiana Khutor, head of the ILI analytical center.

The ILI Shadow Report focuses not on auditing individual cases but on identifying systemic trends and problems in the agency's work, noted ILI analyst Alina Bihdan.

"The system currently works more effectively at the stage of asset tracing than at the stage of their actual return. To change this situation, it is necessary to strengthen interagency and international cooperation, as well as introduce a unified approach to assessing results," the expert emphasized.

ILI project manager Taras Riabchenko presented the results of an analysis of the practice of managing and disposing of seized assets, and assessed ARMA's institutional capacity after the reform. He noted that despite positive changes, the agency still faces systemic problems that hinder effective asset management.

"We see progress in ARMA's work, but some systemic problems recur year after year. It is important not only to record successful results but also to analyze the reasons behind failed cases in order to improve legislation and practice," Taras Riabchenko recommends.

Parliament and ARMA representatives also commented on the research findings. Anastasia Radina, head of the Verkhovna Rada Committee on Anti-Corruption Policy, stated that the ARMA reform created the necessary preconditions for effective management of seized assets, but its practical implementation is proceeding more slowly than expected.

"Of the more than 20,700 assets that ARMA itself identified as promising for management, tenders have been announced for only 0.06%, and only about 0.02% have been transferred into management. This is not the result we expected after launching the reform," the lawmaker said.

Bohdan Koval, deputy director of ARMA's legal department, acknowledged that the agency's reform implementation had faced delays. However, he stressed that the regulatory framework is now fully in place and the system has begun to function.

"The further pace of reform will largely depend on adequate funding and improvements to the asset identification process," the ARMA representative emphasized.

Based on the research findings, ILI experts recommend:

1. Complete personnel reform: elect an ARMA Director and deputy directors to ensure the agency's functions are fully carried out.

2. Settle funding issues: ensure adequate state budget funding in exchange for ARMA demonstrating successful cases of fund usage.

3. Introduce end-to-end statistics: move from reporting on individual indicators to transparent tracking of an asset's entire lifecycle: identified → seized → transferred into management → sold/confiscated.

4. Modernize the Unified Register: eliminate the Register's technical limitations, integrate it with other state registers, and unify asset accounting.

5. Optimize asset management: amend the Criminal Procedure Code (CPC) to improve cooperation with law enforcement (in order to reduce the flow of irrelevant assets) and launch a selection procedure for managers of simple assets.

6. Improve the quality of asset disposal: evaluate auctions not only by sale amount but also by the level of competition and the reasons for failed bids. Block access to tenders for persons connected to asset owners.

7. Harmonize legislation and strengthen international cooperation: align national norms with EU Directive 2024/1260 and orient international cooperation toward the ultimate goal – the actual return of assets.

More on ARMA's activities can be found in the Shadow Report and policy brief prepared by ILI.