The National Bar Association of Ukraine has, for the first time, initiated an open discussion within the legal community regarding Parliamentary Bill No. 12374-d, which is causing concern among experts and poses significant risks.
The bill provides for the reorganization of the National Agency for Asset Tracing and Management and changes to its operational approaches within the framework of criminal proceedings. It is surprising, however, that the government’s bill No. 12374—which had previously been agreed upon by all branches of government—has disappeared.
To date, nearly 900 amendments have already been submitted to the bill. This is thanks to lawyers, human rights defenders, scholars, and representatives of state institutions who did not stand idly by. This is eloquent proof that the proposed version raises serious doubts regarding its compliance with the Constitution and the general principles of criminal procedure law.
What is the main problem?
Among the many inconsistencies and concerns, the bill effectively shifts administrative functions related to the management of seized assets to the prosecutor, who, according to the Constitution (Art. 1311) and the Code of Criminal Procedure (Article 36), has entirely different powers—namely, ensuring procedural oversight and conducting the public prosecution in court. In other words, the prosecutor is not and should not be a “logistics manager” or accountant for assets transferred to ARMA.
The Specialized Anti-Corruption Prosecutor’s Office has also clearly pointed this out. In its official letter, the SAP explicitly stated that the proposed changes not only exceed the prosecutor’s authority but also violate the principles of procedural equality of the parties, as provided for in Article 7 of the CPC. Furthermore, the 10-day deadline for the transfer of assets provided for in the draft is unrealistic and could lead to numerous violations of the parties’ procedural rights.
A similar position was expressed by the Office of the Prosecutor General, which, in its letter to the National Agency of Ukraine for the Identification, Tracing, and Management of Assets, emphasized that certain provisions of the draft law are inconsistent with the provisions of the Code of Criminal Procedure. In particular, it was noted that the transfer of assets to ARMA’s control based on acceptance and transfer acts, as well as the determination of their value, is inconsistent with criminal procedural law, which does not provide for such actions within the framework of criminal proceedings. The OGP cautioned that implementing the proposed model would make asset management dependent on ARMA’s own position, which contradicts its key purpose—ensuring the preservation of the economic value of assets. The agency also noted that the mechanism provided for in the draft law exceeds the powers of the prosecutor’s office, particularly regarding the joint approval with ARMA of the procedure for asset valuation.
In its opinion on the draft law, the Ministry of Finance also expressed a number of comments and proposals. In particular, the Ministry of Finance drew attention to the need to adhere to the principle of a balanced state budget, emphasizing that the implementation of the bill would lead to additional budgetary expenditures without corresponding offsetting measures. The opinion also states that the draft requires further refinement to comply with the provisions of the Budget Code, as well as coordination with other relevant central executive authorities. The Ministry stressed the importance of proper financial and economic justification for legislative initiatives in order to avoid risks to the stability of public finances.
Discussions in Parliamentary Committees
It should be noted that during the preparation of Bill No. 12374-d for the second reading, a significant portion of the comments and proposals submitted by ARMA and other government agencies were ignored. Despite the official letters of criticism submitted (dated February 26, 2025, and March 4, 2025), ARMA representatives were not invited to the meeting of the relevant committee, and 906 amendments proposed by members of parliament aimed at improving the bill were rejected. This disregard for the positions of key stakeholders has sparked outrage among the legal community and cast doubt on the transparency of the decision-making process.
In addition, the Main Legal Department of the Verkhovna Rada Secretariat and the Committee on EU Integration issued negative opinions on the draft law, pointing out a number of legal and procedural shortcomings. In particular, the document lacks the necessary legal mechanisms to implement the proposed changes, and a number of provisions directly contradict the provisions of current legislation, including the Code of Criminal Procedure and the Law “On the Prosecutor’s Office.”
Of particular concern is the proposed lowering of the qualification requirements for candidates for the position of ARMA head. Unlike the National Anti-Corruption Bureau of Ukraine (NABU), the Specialized Anti-Corruption Prosecutor’s Office (SAPO), or the State Bureau of Investigation (DBR)—for which high standards of professional experience and age are established—draft law No. 12374-d requires only five years of professional experience in the relevant field, which opens the door to potentially incompetent appointments. Such an imbalance in requirements appears, at the very least, biased and contradicts the principles of integrity and professionalism in public service.
Among the serious shortcomings of Bill No. 12374-d, experts note the absence of a clearly defined threshold for the value of seized assets subject to transfer to ARMA’s management. The proposed version of Article 181 merely refers to Article 100 of the Code of Criminal Procedure, without providing specific details in the relevant law itself. Such a blanket approach creates gaps in law enforcement, which, in particular, may complicate the process of repatriating assets from abroad—especially in jurisdictions where clear legal certainty is required for international cooperation.
The financial standards proposed by the FATF, as well as the practices of EU countries, emphasize the need for national thresholds for the identification and management of assets. In Ukraine, however, the current version of Law No. 772-VIII sets a threshold of 200 subsistence minimums, while the draft version of Bill No. 12374-d avoids explicitly specifying this threshold. This not only increases the risk of legal conflicts but also poses the threat of an excessive burden on ARMA in the form of the transfer of assets that have neither strategic nor financial significance.
Of particular concern is a provision in the bill that allows the Commission for Conducting an Independent External Evaluation (Audit) of ARMA’s Effectiveness to independently approve the criteria and methodology for evaluating the agency’s activities. Such discretion, without adequate government oversight, creates the risk of a subjective approach to evaluating ARMA’s performance, as well as the potential for manipulation in forming conclusions regarding the effectiveness of its leadership. In accordance with current practice, it is the Cabinet of Ministers—as the body coordinating ARMA’s activities—that should approve the evaluation methodology, given its institutional responsibility.
Equally problematic is the model for the competitive selection of managers for complex assets proposed in the draft law. The participation of representatives from external bodies on the relevant commission has already led to the blocking of its work at critical moments. A striking example was the situation where it was impossible to hold a competition for the sale of a strategically important asset—the vessel “NIKA SPIRIT,” linked to the Russian Federation—due to the absence of one of the commission members from the Ministry of Justice. Such precedents demonstrate the procedure’s vulnerability to deliberate disruption and its direct impact on state budget revenues.
We are not opposed to change—we support reasonable and lawful approaches
Any attempt to reform the management of seized assets under martial law must be based on strict adherence to the principles of constitutionality, legal certainty, and the balance of powers. One of the most important institutions in the criminal justice system must not be dismantled under the guise of “optimization.”
The legal community warns: the adoption of Bill No. 12374-d in its current form is an experiment with unpredictable consequences, including violations of asset owners’ rights, the risk of challenges to the legality of property transfers, and paralysis in cooperation among law enforcement agencies.
The Bar Association—a guarantor of legal stability
We will not stand idly by. It is our duty as attorneys to protect not only the rights and freedoms of specific individuals but also the principles upon which the entire justice system is based. And today, for the first time, we are publicly addressing the legislature: reform cannot be pursued for reform’s sake. Maintaining the balance of roles in criminal proceedings is not a matter of convenience, but a matter of the constitutional order.
Author: Oleksiy Shevchuk, Attorney and Partner at Barristers
Source: https://zib.com.ua/ua/166565-reforma_arma_chomu_yuridichna_spilnota_vistupae_proti_zakono.html?fbclid=IwY2xjawJsXMVleHRuA2FlbQIxMAABHmblIFp1U0hMtljE2X7_Qg1KEvaxK3Xm_fesnk11JvhEM32JLmwvPaIDmO1f_aem_2XE-HzODhUGWepbr1K8LQQ