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 Management and Tracing Agency (ARMA) plays a key role in the process of managing 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 may be deprived of this right, except in cases provided for by law, when it is necessary to protect public interests.
These principles are also reflected in international instruments. Article 1 of Protocol 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms guarantees that any interference with the right to property must be lawful and pursue a legitimate aim, in particular in the public interest. Such interference must be subject to conditions provided for by law and must strike a fair balance between the protection of the public interest and the rights of the owner.
That is, if the state restricts the right to property by transferring assets to the management of ARMA, it is obliged to prove that this interference is necessary to achieve a legitimate aim and is proportionate.
Criteria for the legality of asset transfer
Courts are obliged to verify 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 meets the public interest. Usually, assets are transferred to management when there is a risk of their concealment, damage or other harm. When making the appropriate decision, the court must make sure that such risks really exist, assess how the owner treats the asset, whether there have been attempts to sell such an asset or additionally burden it with obligations, transform, destroy, etc. If, even after the seizure, the owner continues to properly maintain the asset, develop it and pay taxes on the income received, then its transfer to ARMA management is premature and unlawful.
The transfer of assets is particularly relevant when they may lose their value due to improper management. In such cases, ARMA must ensure effective management to preserve and even increase the value of the assets.
Is ARMA always managed effectively?
Unfortunately, practice shows that ARMA asset management does not always lead to positive results. One example is the situation with thermal power plants (TPPs) in the Lviv region. After these enterprises were transferred to ARMA management, they became unprofitable. Although they previously provided the population with heat and jobs, after the arrest and transfer to the agency’s management, the TPPs experienced financial difficulties and began to require 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.
Alternative to ARMA management
Transferring assets to ARMA is not always the only right solution. 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 itself to arrest without transfer to ARMA. This will avoid loss of value of the assets and preserve their economic efficiency.
Thus, the balance between the protection of the owner's rights and the public interest can be achieved through less invasive measures, such as a ban on the alienation of assets without their transfer to the management of ARMA.
Conclusion
The transfer of assets to the ARMA is an important tool for protecting the public interest. However, this mechanism should be applied taking into account the interests of the owners of the assets and only when there is a real threat of their loss or damage. According to Article 1 of Protocol 1 to the Convention for 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 the ARMA, but also on court decisions, which must ensure a fair balance between public and private interests.
