Asset recovery and the theft of public money

According to a 2010 estimate, each year developing countries lose US$20-40 billion due to corruption. This money comes from public assets and could be spent on tackling poverty and providing decent public services. Instead, the proceeds of corruption are transferred abroad by corrupt public officials and their partners and enablers in the private sector. Much of the proceeds of corruption finds a "safe haven" in the world's financial centres.

Asset recovery is the process of reclaiming and returning these stolen proceeds to the country from which they were taken. The process includes tracing, freezing, confiscating and repatriating the stolen assets and is usually complex and lengthy, involving multiple jurisdictions.

The UN Convention against Corruption (UNCAC) includes a landmark chapter on asset recovery which recognizes the return of assets as a fundamental principle of the Convention and which is currently being monitored as part of the 2nd cycle of the UNCAC review process.

Asset recovery is included in the Sustainable Development Goals under Goal 16.4 and in the commitments under the Addis Ababa Action Agenda on Financing for Development.

The financial losses from corruption drain resources for development and provide corrupt elites with the means to pay off allies and undermine representative government. Poverty, healthcare, education and unemployment are all negatively impacted by the theft of public assets and money. Environmental sustainability and green interventions become especially weakened.

Stolen assets from developing countries are often legally managed by some of the best known banks in financial centres around the world. Even when corrupt funds are located and frozen, banks continue to benefit from the interest.

Funds invested in asset recovery can leverage considerable resources in developing countries: for each dollar spent on investigating the proceeds of corruption, up to US$20 is tracked and frozen, with a significant proportion of that sum being then repatriated to the source country.

The key issues we work to overcome in the asset recovery process include

• lack of political will
• lack of adherence to anti-money laundering requirements
• difficulties in detection and tracing across many jurisdictions
• onerous requirements for mutual legal assistance and other legal barriers
• operational barriers relating to processes and communication between parties.
• lack of transparency and accountability in the asset recovery process, namely about the assets seized, confiscated and returned to their original countries.

We are working towards reducing the barriers to accountable asset recovery by advocating for:

• Public, freely available, and verified Beneficial Ownership registers for property, companies and trusts.
• Higher quality Suspicious Activities Reports, which impacts the timely detection of suspicions of corruption.
• Increased prosecution of corrupt public officials and their private sector partners
• Introduction of non-conviction-based asset confiscation and related presumptions
• Closing gaps in existing laws or, where appropriate, by enacting specific laws such as a Proceeds of Crime Act.
• Increased standing for victims in asset recovery cases, including in foreign bribery settlements
• Increased transparency and accountability in the return of assets, following the Global Forum on Asset Recovery (GFAR) Principles for Disposition and Transfer of Confiscated Stolen Assets in Corruption Cases
• A robust review of UNCAC chapter V on asset recovery as part of the 2nd cycle of the UNCAC review process.