x Abu Dhabi, UAESaturday 22 July 2017

Search for dictators' illicit assets intensifies

Money-hunting lawyers in search of more than $100 billion held in foreign accounts by embattled leaders will test asset recovery laws.

Hosni Mubarak has had assets frozen. EPA
Hosni Mubarak has had assets frozen. EPA

International asset recovery laws are set for their first major test as money-hunting lawyers gear up to find and return more than US$100 billion (Dh367.32bn) held in foreign accounts by embattled leaders from the Middle East and North Africa (Mena) region.

The UAE's Central Bank last week instructed lenders to find and freeze the assets of Zine el Abidine Ben Ali, the former Tunisian president, joining a growing list of countries turning the screws on the finances of crisis-hit leaders in the region.

The freeze follows scores of similar measures in recent months against regional heads of state including Hosni Mubarak, the former Egyptian president, Muammar Qaddafi, the Libyan leader, and Bashar al Assad, the Syrian president.

But the freezes by the US, EU, UK, Switzerland and others are just the beginning of what observers say will be a drawn-out seizure of money owed to Tunisia, Egypt, Libya, Syria and possibly other countries in the region where popular unrest has flared this year.

Lawyers are hoping for increased global co-operation under the UN convention against corruption, which went into effect in 2003. That convention is expected to face its first major test as regimes lose their grip on power in parts of the Arab world and new governments try to get stolen money back.

"We're seeing the development [of international law covering asset recovery] on the basis of practical cases, especially with the Arab Spring where maybe four or five governments will fall," said Abdul Aziz al Yaqout, the Middle East head of DLA Piper, a global law firm.

"It's a good time for seeing this in practice, but we're far away from it working as the convention envisions it, even in western countries. Don't forget, law is a very sovereign thing. Jurisdictions take care of their own sovereignty in that regard. And they have to be careful that they don't just give away assets to another country without a court ruling. It's not that simple."

Given such concerns about sovereignty, a key to the success of asset recovery efforts is political will, observers say. Just as important, however, will be the compliance of traditional havens for illicit assets and the co-operation of banks, some of which have already come under fire for not paying close enough attention to where their customers' funds came from.

"They [banks] need to do legal checks on their customers to ensure they know where the customer gets the funds from and to make sure they're not being diverted from state resources," said Robert Palmer, a campaigner with Global Witness, an advocacy group based in the UK.