By Kevin Stephenson on Thu, 2011-06-23 10:25
The recent upheavals in the Middle East, North Africa and elsewhere have put asset recovery in the spotlight. Indeed, as the citizens of these countries look towards the future, recovering wealth that former public officials are alleged to have acquired illegally remains a main concern.
But as their asset recovery practitioners will soon find out, it is by no means a straightforward process. Corruption, which is estimated to cost the world’s poorest people as much as $40 billion per year, is often a difficult offense to prove. Jurisdictions where these funds are deposited require proof of an offense or a nexus to criminal activity before the assets can be returned to the jurisdiction from which they were stolen.
To help explain why it can be so difficult to recover money that has been lost through corruption, my colleagues and I at the StAR Initiative – a partnership of the World Bank Group and the United Nations Office on Drugs and Crime – consulted with over 50 international asset recovery practitioners to identify the Barriers to Asset Recovery. We found several key obstacles that make it difficult to trace, freeze, recover and return assets lost to corruption and other related offenses:
• Asset recovery is a complex process. The legal tools and procedures used by jurisdictions are not all the same. Law enforcement, prosecutors and investigating magistrates have to know how to navigate the laws of other countries and be prepared for a lengthy campaign.
• Not all available tools are used to their full potential. Many practitioners simply do not have the specialized training, skills and experience that would permit them to use asset recovery tools effectively, or to choose the appropriate strategy. Informal assistance – or simply talking to colleagues in another jurisdiction directly without formal mutual legal assistance procedures – is rarely utilized to its full potential. The tools in the United Nations Convention against Corruption, signed by 140 states, are also under used.
• Trust is essential, but hard to establish. These are often sensitive, high profile cases, so practitioners need to be able to trust their counterparts and believe that they won’t make inappropriate public statements or inhibit the case for political reasons. Trust, however, takes time to build, especially when one isworking with people from different cultures and legal systems, which are halfway across the world. The reality is that often these cases require urgent action to freeze assets before they can be moved.
• Preventative measures often fail. Anti-money laundering measures that should intercept stolen assets are not fully or effectively implemented. If corrupt leaders and officials never had the chance to deposit stolen assets into a foreign financial system in the first place, there would be no need for recovery!
The obstacles may sound daunting, but we must not lose hope. In recent years, some countries have made asset recovery more of a priority and taken important steps towards overcoming the barriers. To help guide their efforts, our study offers many workable recommendations – many of which are not cost prohibitive – that can be tailored to each jurisdiction’s particular weaknesses.
To start, it is important to give practitioners the tools they need for asset recovery - pass laws that make asset recovery and international cooperation easier, give specialized agencies dedicated resources, and ensure that practitioners and judges get sufficient training. Countries can also use mentoring, networking and other methods of improving communication to create trust, share knowledge and build expertise. To ensure that assets are not dispersed before the asset recovery process can run its course, jurisdictions need to allow assets to be frozen quickly. And governments also need to take steps to ensure that banks fully implement preventive anti-money laundering measures that can intercept stolen assets.
There is clearly room to improve the stolen asset recovery process, which is important as nations rebuild and pursue a course of transparency and economic growth. When jurisdictions work together to overcome the obstacles, stolen assets can be returned to the citizens to whom they rightfully belong.