x Abu Dhabi, UAEFriday 21 July 2017

Call for closer ties to recover illicit cash for Arab Spring states

The World Bank is calling on countries to help each other return corrupt officials' money amid an asset-recovery bonanza in the wake of revolutions in Egypt and Tunisia.

Hosni Mubarak, the former president of Egypt, has been accused of amassing a personal fortune at the expense of the state's coffers. Amr Abdallah Dalsh / Reuters
Hosni Mubarak, the former president of Egypt, has been accused of amassing a personal fortune at the expense of the state's coffers. Amr Abdallah Dalsh / Reuters

The World Bank is calling on countries to work more closely together to recover corrupt officials' stolen assets.

It is a plea that could help Egypt and Tunisia bring back billions of dollars believed to be held by their ousted leaders.

In a new study titled Barriers to Asset Recovery, researchers at the World Bank said international cooperation was still not up to the required level when it came to freezing and recovering assets held in foreign jurisdictions by corrupt officials.

The study recommended devoting more resources to asset recovery and to training more people to work on asset freezes and asset repatriation requests. It also said countries should develop trusting relationships, ease banking secrecy laws and relax rules that require criminal convictions before assets can be sent back to countries of origin.

Despite international agreements such as the UN convention against corruption and the convention against transnational organised crime, the study's authors said, "the lengthy process for asset recovery, the low level of activity and the difficulties reported by practitioners suggest that many barriers are still firmly in place".

That lack of progress is worrying because of the global scale of corruption, which the UN estimates takes between US$20 billion (Dh73.46bn) and $40bn from developing countries every year, the study's authors said.

According to the Stolen Asset Recovery Initiative, a joint World Bank and UN body, only $5bn of stolen assets have been returned in the past 15 years, leaving a "huge gap" that international cooperation has yet to bridge.

Revolutions and unrest in parts of the Arab world have lent urgency to efforts to boost cooperation on international corruption cases.

In addition to freezing the assets of Hosni Mubarak, who was ousted from the Egyptian presidency in February, and Zine El Abidine Ben Ali, the former president of Tunisia, many countries have blocked accounts linked to embattled regimes in Libya and Syria.

Estimates of the value of assets frozen during the upheaval in parts of the region are in the tens of billions of dollars.

Experts say it will take years before new governments in Egypt, Tunisia or elsewhere in the region can get their hands on any substantial amount of money illegally stashed away in foreign accounts.

But Enrico Monfrini, a Swiss lawyer known as the "dictator hunter" for going after the assets of Sani Abacha, a late Nigerian leader, told The Nationalthis month that new governments in the Middle East would have an easier time getting money back because the political will was there.

"In the Abacha case, the political problem was much bigger because there was no political will to go ahead with this case," he said. "I had to force the doors in Switzerland and other countries. Many countries did not have laws allowing any confiscation, and there are still countries that do not have laws allowing confiscation."

The World Bank report on asset recovery was aimed at policymakers and identified 29 obstacles in the way of countries trying to repatriate assets.

The barriers include differences in countries' legal systems, operational and communications problems, a failure to adhere to anti-money laundering rules in some jurisdictions and a lack of mechanisms to quickly freeze assets.

"International asset recovery is a complex legal issue, and its practice is further complicated by its reliance on international cooperation at every stage of the process," the study said.

"This complexity makes it even more difficult to mobilise attention and efforts to overcome the barriers."

The hope, the authors said, was that identifying the barriers and making recommendations would "lead to an increased number of successful asset recovery cases - which is the ultimate acid test".

afitch@thenational.ae