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Asset Recovery

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Flickr/Creative Commons – nARCOTO

 

Transparency International believes that the UK’s asset recovery regime is not working effectively. According to the World Bank, corrupt leaders of poor countries steal as much as US $40 billion each year in stolen assets they then stash overseas. And in 2011 the United Nations Office for Drugs and Crime (UNODC) estimated that the global detection rate of illicit funds by law enforcement is as low as 1 per cent for criminal proceeds, and the seizure rate is possibly 0.2 per cent. Once removed, funds are extremely difficult to recover, and a lot of these funds come into, or through the UK.

The UK does have a number of strengths in its asset recovery regime, and its record of recovering and returning dirty money compares well to a lot of other states. Nevertheless, the UK’s record is still very poor in real terms. It has been estimated that £23 – 57 billion of dirty money is laundered in the UK each year. Against this threat, the UK National Audit Office (NAO) estimates that only 26p out of every £100 is confiscated from organised criminals. While it is not possible to determine what proportion of this figure represents financial proceeds specifically from bribery and corruption, concerns remain that the sums are substantial and embrace both looted state assets and the proceeds of procurement bribery.

Transparency International UK believes that the UK’s institutions and organisations have been used as repositories or intermediaries for stolen funds from several countries, including Bangladesh, Kenya, Nigeria, Pakistan and Zambia. Like many other countries, the UK must operate within the framework of its obligations under international arrangements and conventions to which it is a party, notably the Financial Action Task Force (FATF) and the UN Convention against Corruption (UNCAC).however, when the proceeds of corruption are laundered through the UK, it presents a criminal, reputational, and national security risk, as well as a great injustice for the countries from which the funds have been stolen. The UK has an added responsibility arising from its unique status. London’s international reputation has often attracted money launderers who find it easier to mingle their dirty funds in a larger centre with substantial flows of legitimate money.

It is therefore imperative that the UK is able to prevent money laundering and detect, seize and recover those stolen assets that do enter the country. Due to ‘London’s status as a safe haven’ and the resultant high volume of foreign capital that comes in or through the UK, this country has an opportunity to take a pro-active leadership role in the detection and recovery of the proceeds of corruption laundered through this jurisdiction.

As an anti-corruption body, Transparency International UK (TI-UK) is concerned with campaigning for more effective asset recovery. In 2009 TI-UK published Combating Money Laundering and Recovering Looted Gains: Raising the UK’s Game, and in 2013 published Closing Down the Safe Havens: Ending Impunity For Corrupt Individuals By Seizing And Recovering Their Assets In The UK, a lessons learned report shining light on the asset recovery barriers following the ‘Arab Spring’. Most recently, owing to the impending FATF mutual evaluation of the UK’s AML regime, and the Serious Crime Bill, we formally submitted our response to the government’s national risk assessment of money laundering and terrorist financing, and published 10 tests: Can UK Legislation Tackle Corrupt Capital?


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