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International Efforts in Support of the Recovery of Stolen Assets

Asset Recovery

Professor Juliet Sorensen (Northwestern University School of Law) and Northwestern Law students Michelle Kennedy and Cassandra Myers are attending the Sixth Conference of the State Parties (CoSP) to the United Nations Convention against Corruption in St. Petersburg, Russia. For more on the opening of the Conference, see here and hereOver the next few days, FCPA Professor will be publishing various posts regarding the proceedings.  

This post is from Michelle Kennedy.

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A central challenge to addressing corruption is the recovery of assets that were stolen through the course of the corrupt activity. This process, which requires complex international cooperation when the assets are secreted overseas, was explored in depth at an all-day special event that joined several important actors.

The Stolen Asset Recovery Initiative (“StAR”), a partnership between the World Bank Group and the UN Office on Drugs and Crime, facilitates the return of stolen assets by setting international standards and enhancing communication among countries. In order to act as an effective intermediary, StAR must receive an official request from the country itself, not from private parties. Surprisingly, the average time that StAR takes to respond to country requests ranges between just twenty-one days and four and a half months. StAR also provides case-based technical training to enable the participating countries to effectively deal with the asset recovery issues themselves. A common critique of the program, however, is that developing countries do not have the necessary resources to retain and maintain the components of an effective domestic asset recovery program, such as investigators and experts. StAR’s response that its purpose is to aid countries in asset recovery, not to do the job for them.

A central challenge StAR faces involves countries that have and continue to undergo dramatic changes in governance, which disrupts any programs StAR has helped implement. Similarly, a lack of mobilization and good will from certain countries creates roadblocks for compliant countries to effectively recover stolen assets. Overall though, StAR has successfully returned $28.8 million in stolen assets as well as $58 million worth of physical assets. In two examples discussed today, StAR aided Tunisia in overcoming the influx of corruption after its 2011 revolution by organizing meetings between Tunisian judges and their foreign counterparts to aid them in dealing with corruption cases. It also recently helped Mongolia in equipping its domestic law enforcement organizations with the necessary tools to trace, identify, and recover stolen assets as well as draft a handbook that is to be formally approved within the month.

In terms of available resources, the UNODC has created a Digest of Asset Recovery Cases, which highlights notable corruption cases and traces the recovery of the stolen assets involved. Within the next year, the UNODC will release a new resource, entitled the Effective Management and Disposal of Seized/Frozen and Confiscated Assets, to help states strengthen their domestic management of assets that are seized from corrupt networks. Countries who manage asset recovery funds in a transparent manner are more likely to receive support from other countries, which highlights the prominent theme that international cooperation is essential to improving the overall recovery of stolen assets. Another new resource is the “Silver Notice” now issued by Interpol, which aids countries in locating, identifying, monitoring, and seizing or freezing the confiscation of assets. This provides countries the opportunity to alert one another of any movement of illicit assets and thus enhance the speed of international cooperation.

To conclude the panel, Switzerland presented its 2014 draft of Proposed Practical Guidelines for Efficient Asset Recovery, which has yet to be officially adopted. The overall message was that the preliminary investigation phase of asset recovery is the most important, given that corrupt individuals are becoming increasingly clever and more aware of when they are suspected of possessing illegal proceeds or fruits of crime. States must therefore carefully identify their targets, create a clear strategy, and exhibit patience to ensure that their investigation of stolen assets and eventual recovery proves successful.

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