On 26 March, the Asset Recovery and Management Agency (ARMA) presented a report on its work in 2024. The text of this report, however, became public only in the second half of April. We have analyzed it.
If you try to understand the agency’s reports in general, you will see an interesting picture: behind the facade of amazing figures lies a completely different reality.
ARMA’s report is full of impressive moments: billions of dollars in “identified assets,” significant budget revenues and a huge volume of management duties. But upon closer examination, these successes appear far less impressive. For example, it turns out that in the whole of 2024, the agency selected only seven managers for seized assets, while many seized assets remain unmanaged.
This is reminiscent of the situation with a hospital that reports excellent work, demonstrating the successful treatment of a dozen VIP patients. But at the same time, hundreds of ordinary patients in general wards do not receive even basic medical care for months. Yes, those ten VIP patients were treated brilliantly and even rehabilitated to the highest standards. But is this a success for a medical facility whose main task is to ensure the health of the entire community?
We decided to find out what is really hidden behind the results of ARMA’s work in 2024.
Identification and tracing of assets
Let’s start with the first of the two functions reflected in the Agency’s concise name, asset tracing.
As set out in paragraph 5 of the preamble to EU Directive 2024/1260, an effective asset recovery system requires “the swift tracing and identification of instrumentalities and proceeds of crime, and property suspected to be of criminal origin.” This function is the first critical step in the chain of depriving criminals of their ill-gotten gains.
According to paragraph 14 of the preamble to the Directive, asset identification and tracing, should begin at an early stage of a criminal investigation to ensure the prompt identification of property that may be subsequently confiscated, including property related to criminal activities located in other jurisdictions.
According to ARMA reports, in 2024, the agency identified and traced 141,500 assets. This is more than in 2023 (96,000), but significantly less than in 2022 (196,600).
At the same time, it is difficult to say how this number was formed. If you look at the information on identified and traced assets in the ARMA report for 2024, 107,066 land plots alone were found (their number increased by 57,900 compared to the previous year). Therefore, not many other types of assets were traced.
The further fate of these assets demonstrates serious problems in the agency's work, particularly when looking at the proportion of assets that have already been traced and subsequently seized, and the proportion of assets that have been transferred to ARMA. This may indicate systemic shortcomings in the quality of the information collected and that the owners had already managed to transfer the property before it was seized.
For example, with regard to real estate, ARMA reports about identifying 12,352 objects (6,372 residential + 5,980 non-residential), of which 1,512 objects were seized (12.2 percent of those identified) and 289 objects were transferred to management (19.1 percent of those seized and only 2.3 percent of those identified).
At the request of law enforcement agencies, 106,470 land plots were identified, 1,759 were seized (1.7 percent of the identified land plots) and 305 were transferred to ARMA (17.3 percent of the land plots seized and only 0.3 percent of the land plots identified).
Moving on to transport, ARMA detected 17,376 units of aviation, road, rail and maritime assets. However, 1,845 of these were seized (10.6 percent of the identified items) and 393 were transferred to management (21.3 percent of the seized items and 2.3 percent of the identified items).
The data on money is no less interesting. ARMA reports finding significant amounts: €103.7 million, $79.9 million and UAH 8.3 billion. However, only €2.3 million (2.2 percent of the detected amount), $14.3 million (17.9 percent of the detected amount) and UAH 163.3 million (only 2 percent of the detected amount) were seized. And even less was transferred to ARMA's management: €1.58 million (69.9 percent of the seized but only 1.5 percent of the detected amount), $10.6 million (74 percent of the seized, 13.3 percent of the detected amount) and UAH 86 million (52.7 percent of the seized but a negligible 1 percent of the total detected amount).
The information on corporate rights identified by ARMA is particularly impressive. The agency reports on the search for corporate rights with a total nominal value of UAH 34 billion, €1.2 million and other currencies equivalent to UAH 305 million. At the same time, the documents do not contain any information on the seizure or transfer of these assets into management.
As you can see, on average, about 7.8 percent of all types of assets are seized, while less than 3 percent of the total amount of the property found is transferred to management. This indicates a huge gap between the high-profile detection figures and the actual results. Of course, the seizure of property and transfer of assets into management depend not on ARMA but on the work of prosecutors and court judgements. However, such indicators may also indicate the low quality of information provided by the agency, which makes it impossible to seize and transfer assets into management effectively.
Moreover, such data may support the opinion that the dissemination of information about the assets sought, as ARMA typically does, has an negative impact on the possibility of their further effective seizure.
Management of seized assets
Management is a critical function of ARMA that ensures that the economic value of property is preserved during criminal proceedings. According to paragraph 5 of the preamble to EU Directive 2024/1260, an effective asset recovery system requires not only the identification and freezing of assets but also “the effective management of frozen and confiscated property in order to maintain the value of that property for the State or for the restitution for victims.” Without proper management, seized assets can quickly depreciate in value, undermining the very purpose of their seizure.
Paragraph 41 of the preamble to the same directive emphasizes the need for “effective management measures,” including the preservation of businesses as going concerns and the prevention of suspects or defendants from benefiting directly or indirectly from the assets.
And, unfortunately, ARMA again fails to demonstrate effectiveness in this regard: the performance indicators for the management of seized assets are no less disconcerting, despite the fact that the agency claims that “ARMA has unique experience and expertise in the management of seized assets.”
In 2024, 33 tenders for the selection of managers were announced, but only seven management agreements were concluded. Thus, the number of management agreements concluded remains consistently low: 7 in 2024, 11 in 2023 and 10 in 2022.
The agency’s communication on these issues is also noteworthy. In one of its posts, ARMA cites “amazing” figures about 224 competitive selections of appraisers, 89 winning appraisers, and 33 announcements of open tenders with specific management features. However, all these efforts resulted in seven management contracts.
At the same time, the number of assets transferred to ARMA decreased to 2,468 in 2024 (compared to 14,161 in 2022). And the number of on-site inspections of managers remains critically low: only ten took place per year, despite the large number of objects under management.
It is particularly telling that in its report, ARMA boasts of billions (UAH 1,174.7 million) in budget revenues, but these funds are generated by only a few managers, contracts with whom were concluded before the appointment of the current head. Among the most profitable managers are Chornomornaftogaz, Ukrnafta, Ukrtransnafta, Crytex Service and Naftogazenergia. They generated the bulk of the amount that ARMA shows as income from the management of seized assets, UAH 1,139 million.
At the same time, the chairman of the Verkhovna Rada Committee on Anti-Corruption Policy rightly notes that 88 percent of the UAH 1.2 billion in revenue in 2024 came from just two state-owned enterprises. These are revenues from the management of the petrol station network (formerly called GLUSCO) transferred to Ukrnafta and the assets of Ukrnaftoburinnya LLC (73 percent of UAH 1.2 billion), as well as dividends from shares in 26 regional gas companies managed by the state-owned Chornomornaftogaz company (another 15 percent).
What does this mean? A large number of assets transferred to ARMA for management do not receive their manager quickly enough, meaning that the seized asset either continues to generate income for its owner or deteriorates and depreciates due to downtime.
Of course, the process of selecting a manager of seized assets is complex and entails great responsibility, but it is precisely this process that can be regulated by the draft law No. 12374-d, which ARMA actively opposes.
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One thing is important to understand: ARMA is not a fiscal authority. Its main task is not to fill the budget but to ensure the effective management of seized assets. When only a tiny percentage of the total amount of assets found is assigned to managers, and even less is actually managed effectively, there is no doubt that there are systemic problems in the agency’s work.
ARMA demonstrates a classic example of number chasing, when the mission is replaced by the pursuit of a few flashy indicators that can be shown in presentations but do not reflect the real state of affairs in the system of managing seized assets.
While ARMA is an important element of the anti-corruption system, the standards of performance it demonstrates do not match this status. Without genuine systemic changes in the handling of seized assets — from detection to effective management — the agency will continue to be a potentially important but practically ineffective body.
And it is precisely to ensure these changes that the draft law No. 12374-d should be adopted without delay to addresses the problems with the transparent selection of asset managers and other issues directly related to the agency’s effectiveness.