Lawyer Volodymyr Bogatyr analyzes the effectiveness of the management of ARMA's seized assets and raises the question of the legality of such decisions from the point of view of protecting public interests and the rights of owners.
The Asset Tracing and Management Agency (ARMA) plays a key role in the management of assets seized in criminal proceedings. The main task of the agency is not only to preserve these assets, but also to increase their economic value if possible. However, the decision to transfer assets to management is not made by ARMA, but by the court. The question arises: is this transfer always justified from the point of view of public interest?
Constitutional guarantees and international standards of the right to property
The Constitution of Ukraine guarantees everyone the right to own, use and dispose of their property. No person can be deprived of this right, except in cases provided by law, when it is necessary to protect public interests.
These principles are also reflected in international acts. Article 1 of Protocol 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms guarantees that any interference with property rights must be lawful and pursue a legitimate aim, in particular, serving the public interest. This intervention must be carried out under the conditions prescribed by law and ensure a fair balance between the protection of public interests and the rights of the owner.
That is, if the state restricts the right of ownership by transferring assets to the management of ARMA, it is obliged to prove that this intervention is necessary to achieve a legitimate goal and is proportionate.
Criteria for legality of transfer of assets
Courts are obliged to check whether the transfer of assets to ARMA is justified and proportionate. In other words, the court must make sure that the transfer of assets does not cause excessive harm to the owner and at the same time is in the public interest. Typically, assets are transferred to management when there is a risk of their concealment, damage or other harm. Making the appropriate decision, the court must make sure that such risks really exist, assess how the owner behaves with the asset, whether there have been attempts to realize such an asset or additionally burden it with obligations, convert, destroy, etc. If, even after the seizure, the owner continues to properly maintain the asset, develop it and pay taxes on the received income, then its transfer to ARMA's management is premature and illegal.
The transfer of assets is especially relevant when they may lose their value due to improper management. In such cases, ARMA must provide effective management to preserve and even increase the value of assets.
Is ARMA always effective management?
Unfortunately, practice shows that ARMA asset management does not always lead to positive results. One of the examples is the situation with thermal power plants (CHP) in Lviv Oblast. After these enterprises were transferred to the management of ARMA, they became unprofitable. Although they previously provided the population with heat and jobs, after the arrest and transfer to the management of the CHPP agency, they experienced financial difficulties and began to need subsidies from the state budget, and what is very painful for society is the termination of heat supply by the manager during the heating season.
An alternative to ARMA management
Transferring assets to ARMA is not always the only correct decision. In cases where the owner of the assets or the manager appointed by him can prove his ability to effectively manage the assets, the court may limit himself to seizure without transfer to ARMA. This will avoid loss of value of assets and preserve their economic efficiency.
Thus, the balance between the protection of the rights of the owner and the public interest can be achieved with the help of less invasive measures, such as the prohibition of alienation of assets without their transfer to the management of ARMA.
Conclusion
The transfer of assets to the management of ARMA is an important tool for the protection of public interests. However, this mechanism should be applied taking into account the interests of asset owners and only when there is a real threat of their loss or damage. According to Article 1 of Protocol 1 to the Convention on the Protection of Human Rights, any interference with the right to property must be lawful, pursue a legitimate aim and be proportionate. The effectiveness of asset management depends not only on ARMA, but also on court decisions, which should ensure a fair balance between public and private interests.
