Examining a variety of countries prone to cross-border corruption schemes including Egypt, Kenya, Mexico, Moldova, Mozambique, Tunisia and Ukraine, a report published by the Civil Forum for Asset Recovery on Monday uses case studies to explore the best approach to implementing sanctions and recovering the proceeds of corruption.
Between US$20-40 billion per year is lost to bribery, misappropriation of funds, and other corrupt practices in the developing countries alone, according to the UNODC. In these countries, where the rule of law is weakly implemented and law enforcement institutions have little authority, much of these illicit gains are moved abroad and into tax haven countries or offshore companies, making their recovery more challenging.
To confront this issue, the report recommends that sanctions should be applied and asset recovery measures taken by the countries prone to the hosting of illicit assets. This would encourage transparency, accountability, and a “broader political will to fight criminal networks.”
“Directly, they can quickly freeze the assets of persons implicated in corruption cases, which, in turn, can be used as a basis for asset recovery proceedings aimed at using the funds for the benefit of citizens of countries from whom it was stolen from in the first place,” the report says.
“Indirectly, they create financial and public pressure to incentivise non-corrupt behaviour and anti-corruption reforms,” it explains.
Sanctioned individuals involved in corruption often have their assets frozen, but the report suggests that governments should take a step further by including asset recovery provisions in their anti-corruption sanctions regimes and be consistent in applying a transparent sanctions criteria.
The report also suggests that sanctions be used by governments as part of a wider anti-corruption strategy, and not be seen as the “ultimate end” but rather “linked to proactive obligations on law enforcement in countries of destination to work towards asset recovery.”
Experts also placed emphasis on the role civil society groups should play, saying “more transparency around the process is essential in order to enable greater public understanding, as well as the effective engagement and support from civil society.”
