Victor Surnik, joined the Round Table “Justice of the Future”

Among all the sanctions measures currently being implemented in Ukraine, special attention is paid to the processes of “nationalization” of sanctioning assets. These are fairly detailed regulated processes that provide for a mandatory trial, however, as practice shows, in general, the procedure remains far from perfect.

Victor Surnik, Managing Partner of Alarius AG, prepared his commentary on how to protect the interests of the state in the process of implementing sanctions policy, specifically for the “Legal Practice” material.

“The collection of assets into state revenue is one of the most actively discussed aspects of sanctions enforcement. First of all, attention is drawn to the processes in which the issue of nationalization of complex corporate structures, large successfully operating businesses is resolved. Even if we do not delve into the subtleties of identifying the relevant assets, establishing beneficial relationships, ensuring the interests of minorities, the state faces another important task in such matters — preserving the value and functionality of such enterprises and their subsequent profitable realization. It is important to establish clear and transparent mechanisms at all stages of this process: from blocking/arrest and management for the period of trial to the moment of transfer of assets to a designated public authority and transparent sale.

Separately, it should be mentioned that people usually work in such enterprises and significant taxes are paid. It is important that all this can be saved at least for the period mentioned above. If procedures such as freezing (blocking or arrest) have mostly already been worked out, and in privatization processes we can note individual success stories, then the mechanism for transferring sanctioning assets to external management probably needs to be adjusted. It is about creating incentives for professional independent managers, defining their rights and responsibilities, on the one hand, and ensuring constant monitoring of their activities on the other.

Only with an integrated approach can we hope for the effectiveness of sanctions mechanisms, the preservation of the assets collected in the state income and the use of the profits from their sale for the reconstruction of Ukraine”, said Viktor Surnyk, managing partner of Alarius AO