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StAR: Few and Far: The Hard Facts of Asset Recovery

Written by Guest on Tuesday, 16 September 2014

‘Few and Far: The Hard Facts of Asset Recovery’ is the latest publication from the Stolen Asset Recovery Initiative (StAR) a joint World Bank and UNODC project. So here are the hard facts…


‘Few and Far: The Hard Facts of Asset Recovery’ is the latest publication from the Stolen Asset Recovery Initiative (StAR) a joint World Bank and UNODC project

So here are the hard facts… The report found that assets frozen by OECD states increased to US$1.398 billion in 2010–2012[1] up from US$1.225 billion in the period of 2006–2009. In terms of returning stolen funds, US$147.2 million was returned by only three OECD members (UK, USA and Switzerland) between 2010 and June 2012 – a fraction of the $20–40 billion estimated to have been stolen each year from the period 2006–2012. Taking the average, the amount that can be said to have been frozen and seized over the period is therefore 1.9% and 0.2% of the total respectively.[2]

By its own admission StAR says that the $20–40 billion figure of funds stolen is a conservative estimate. So, if for instance the same calculations were done using estimates by the One Foundation who suggest that $1 trillion is stolen from developing countries each year, then the percentages become infinitesimally small (0.056% and 0.0059% to be precise). Numbers aside, the report ultimately concluded that a huge gap remains between the results achieved and the billions of dollars that are estimated stolen from developing countries.

Promisingly the report found that new, innovative methods of asset freezing and recovery were increasingly being used, such as non-conviction based confiscation, unexplained wealth orders and administrative freezes.

The report recommends that the situation can be improved through obtaining a high-level of commitment, and proactivity, towards asset recovery; providing the necessary resources to law enforcement investigations; and ensuring that a wide range of asset recovery tools are available and used, such as non-conviction based asset forfeiture and unexplained wealth orders to tackle illicit enrichment.[3]

These low asset recovery figures indicate a broader problem even in the most proactive countries, that financial centres are largely failing to stem the tide of corrupt money flowing through their jurisdiction.

TI-UK’s forthcoming research agenda will develop to delve further into the role of the UK – specifically London – in attracting corrupt funds, and where, and how, they get to where they go. This research is TI-UK’s contribution to a broader chapter movement, Unmask the Corrupt. We want to find solutions to the problem and campaign for their implementation, including:

  1.      Evaluating the need for a law on corrupt enrichment – so that officials with unexplained suspicious          wealth need to prove where they got it from
  2.      Imposing stricter controls on visas for the corrupt – so corrupt officials don’t end up here in the first        place
  3.      Enforcement of the UK’s commitment to publish a public register of company owners – so we know        which companies are owned by the corrupt

Many TI activists around the world have recognised the UK as a vital player in corruption in their own countries as their national wealth is cleared through or transferred to Britain. You might think that Britain, a country which ranks relatively highly on issues such as transparency, open governance and human rights, would surely never allow money intended for development to end up in the pockets of London’s resources-resources-businesses? Think again – millions possibly billions, of corrupt funds are laundered in and via the UK every year. Join us in putting a stop to this injustice.

The UK strand of the campaign will aim to reduce the role of London as a safe haven for corrupt money and individuals and will begin in early 2015. Keep up to date with our work on this via our website Twitter and Facebook.

 

Matthew Race works for the Financial Conduct Authority (FCA) and is currently on a research secondment with Transparency International UK.

 

[1] StAR refers to the 2010–2012 period as a ‘two and a half year period’.

[2] Calculated by dividing the total frozen ($1.398 billion) and the total returned ($147.2 million) over $75 billion (average $30 billion stolen per annum x 2.5 year period).

[3] UNCAC article 20 says that states should consider illicit enrichment offences. 

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Read 3804 times Last modified on Tuesday, 24 November 2015 11:47

Guest

The TI-UK blog features thought and opinion from guest writers as well as TI staff. Any opinions expressed by external contributors do not necessarily reflect the views of Transparency International UK.

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