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December 6, 2018

Recovering ill-gotten wealth from abroad a daunting task


December 6, 2018

LAHORE: The present government is continuously pursuing recovery of looted wealth by tightening noose around wrongdoers, but any expectation of bringing billions of dollars back to the country in a short span of time seemed unrealistic.

The World Bank’s Stolen Asset Recovery Initiative said asset recovery matters because depriving corrupt officials from their ill-gotten gains is a significant deterrent. Additionally, recovering even a reasonable portion of the $40 billion stolen assets would make a huge difference for the developing countries. However, it is easy said than done. Recovering overseas assets of Pakistani nationals is an arduous job.

According to a UN report, illicit transfers worth $40 billion are made by corrupt officials, businessmen and politicians in tax heavens across the world. The recovery rates are; however, painfully slow.

According to the World Bank, Philippines has recovered more than $1 billion of money, mostly from Switzerland, stolen by Ferdinand Marcos around 21 years ago. After a decade of pursuit, Peru in 2007 was able to recover over $174 million from jurisdictions such as Switzerland, Cayman Islands and the United States, stolen by Vladimiro Montesinos. In 2006 and 2007, British and South African authorities helped Nigeria recover $17.7 million of the illicit gains obtained by Diepreye Alamieyeseigha, governor of the oil-rich Bayelsa state.

We are talking about recovery of at least $10 million to $20 million in the short-term and much more in the future. The World Bank said international asset recovery is undertaken by countries using legal procedures. This usually entails legal cooperation between two national authorities.

Asset recovery is a lengthy legal process that may take up to six years from the launch of investigations to the judgment confiscating and returning the stolen assets. However, there are cases that last much longer.

Our government would have to overcome the resistance from declaring assets even by friendly countries. Prime Minister Imran Khan has himself admitted that the government did not receive any details of bank accounts and assets of those Pakistanis that have obtained Aqama from the Gulf States. This has conveniently hidden the assets of leading politicians from both sides of the political divide.

Some countries are notorious for protecting foreign nationals. The Transparency International believes that the UK’s asset recovery regime is not working effectively.

According to the World Bank, corrupt leaders of poor countries steal as much as $40 billion each year in stolen assets and then stash them overseas. And in 2011, the United Nations Office for Drugs and Crime (UNODC) estimated that the global detection rate of illicit funds by the law-enforcement is as low as one percent for criminal proceeds, and the seizure rate is possibly 0.2 percent. Once removed, funds are extremely difficult to recover, and a lot of these funds come into, or through the UK.

Transparency International UK believes that the British institutions and organisations have been used as repositories or intermediaries for stolen funds from several countries, including Bangladesh, Kenya, Nigeria, Pakistan and Zambia.

Like many other countries, the UK must operate within the framework of its obligations under international arrangements and conventions to which it is a party, notably the Financial Action Task Force (FATF) and the UN Convention against Corruption (UNCAC). However, when the proceeds of corruption are laundered through the UK, it presents a criminal, reputational, and national security risk, as well as a great injustice for the countries from which the funds have been stolen. The UK has an added responsibility arising out from its unique status.

London’s international reputation has often attracted money launderers who find it easier to mingle their dirty funds in a larger centre with substantial flows of legitimate money.

Immunity from prosecution enables some public officials to avoid prosecution for criminal offenses. In most jurisdictions, immunities incorporated into domestic laws or constitutional provisions are referred to as “national immunities”.

In addition, there are “international immunities” that apply in all jurisdictions under customary international law and treaties, including functional and personal immunity.

Many developing countries had already sought to recover stolen assets. A number of successful high-profile cases with creative international cooperation have demonstrated that asset recovery is possible. However, it is highly complex, involving coordination and collaboration with domestic agencies and ministries in multiple jurisdictions, as well as the capacity to trace and secure assets and pursue various legal options — whether criminal confiscation, non-conviction-based confiscation, civil actions, or other alternatives. This process can be overwhelming for even the most experienced practitioners.

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