Kyiv, August 19, 2015. Experts presented the creation of a new specialized executive body – the Ukrainian National Agency for the Investigation and Disposal of Assets, whose task will be to focus on corruption and other crimes, during a briefing at Ukraine Crisis Media Center. The adoption of the draft law establishing the Agency will help to eliminate the existing shortcomings in legislation that prevent the efficient tracing, return and management of criminal assets, and create mechanisms designed to return illegally derived assets to Ukraine. “Government agencies have thus far not delivered the expected results. Corrupt assets totaling 7,865.77 UAH were returned to the budget over six months in 2015. The 2015 budget accounted for $ 1.5 billion UAH from the sale of confiscated property obtained through corruption,” said Daria Kalenyuk, the Anti-Corruption Action Centre executive director.
Authors of the draft law believe that the Agency’s establishment will speed up the process and make it more effective, as well as help to put in place countermeasures for law enforcement inaction. The project is based on the study of European and American experiences and a universal model, which operates in France, taking into account Ukrainian realities. Kalenyuk said that the creation of such an asset recovery agency is a requirement for both EU visa liberalization and IMF creditors’ claims.
“The National Agency will deal with sourcing, tracing and managing assets, obtained as a result of corruption. Our foreign colleagues will return money to Ukraine once they understand that there is a transparent mechanism for the further management of these funds, “said Natalia Sevostyanova, first Deputy Minister of Justice of Ukraine.
The proposed innovations will significantly improve the speed and effectiveness of the return of illegally obtained assets. Firstly, the Agency will simplify and accelerate the procedure for obtaining investigative information. “Today, the investigator must send a request, and then wait 30 days or more, then send it to the Ministry of Justice to ensure that it reaches a foreign Ministry of Justice, and then wait for its return. This procedure takes a long time, and during that time those assets “evaporate.” Now any investigator may address the Agency for specific information. Within 24 hours, the Agency representative writes to other agencies around the world using closed channels and on the same day receives and transmits this information to the investigator,” explained Sevostyanova. “This is an important tool for the effective locating of assets.”
Vitaly Kasko, Deputy Prosecutor General of Ukraine and head of an interdepartmental working group on coordinating the return criminally obtained funds by former Ukraine officials, noted that similar organizations exist in various forms in all EU countries. “It is important that Ukraine has chosen the way by which many EU countries are approaching the problem and proposing to combine the functions of assets tracing and assets disposal into one institution. In fact, this approach is the best one, and this agency will become advanced even by European standards,” he stressed.
Among the most useful innovations, the Deputy Prosecutor General mentioned the transmission of confiscated assets management to a particular body, and the ability to sell assets that lose value over time (e.g., cars, computers) without the owner’s permission according to a court decision. Two bills are now being developed, which will improve both the restraint and special confiscation institution. After making changes, it will be possible to levy restraint for property such those as taken from a scene of a crime, at the stage when the suspect or accused have not yet been identified. If there is evidence that the property has illegal origin, restraint will be levied for third (front) persons . Kasko stated that now the status of a bona fide purchaser will not protect the person possessing the criminal asset, because if a person knew or, under the circumstances of the acquisition, should have known that the property may be criminal asset, they cannot be considered legitimate buyers.
Other innovations include restraint regulations for the implementation of criminal law for legal citizens, a separate authorization by an investigating judge for the arrest of property seized during the search (ensuring the right of the owner to appeal the arrest during the investigation), extending prosecutions in absentia to a wider range of crimes and extending the institution of special confiscation to all intentional crimes.
“Assets that have been taken out of Ukraine within the years of independence are unknown to me, but under Yanukovych, according to various estimates, more than 30 billion dollars were taken,” said Hanna Hopko, MP of Ukraine, and Chairperson of the Parliament Foreign Affairs Committee. “If we look at the efficiency of the bodies involved – the Ministry of Justice, General Prosecutor’s Office – if you give a sober assessment – this work was a failure. Eight thousand hryvnia out of billions of dollars that were exported is a paltry sum,” said Hopko. She stressed that international partners cannot start the return of arrested assets to Ukraine until they receive appropriate evidence from the Ukrainian side, but the latter shows complete inaction that may be considered incompetence or sabotage, or corruption among employees.
According to Hopko, it is important to make the issue of the Agency’s establishment one of the main themes of the National Reforms Council meeting on September 27. If the draft laws are adopted in September, the Agency will start work in December. It is expected that the parallel work of the Anti-Corruption Bureau, the National Anti-Corruption Agency and the aforementioned Agency, together with reform of the Prosecutor General, may make strides in improve the situation in the country. “The process may become somewhat lengthy, but it is vital in order to implement best practices and establish a new structure. Every official and citizen should understand: they cannot steal, otherwise they will be responsible,” summarized Hopko.
* For details about the functions of the Agency, the chairperson election system and requirements, and the system of financing and control over the activities of the National Agency, see project authors’ info graphics.