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FCPA Blog - Why isn't asset recovery on the agenda

Wednesday, 19th July 2017

Martin Kenney: Why isn't asset recovery on the international enforcement agenda?

 

I have long advocated that Grand Corruption should be considered a crime against humanity, under Article 7(1)(k) of the Rome Statute establishing the International Criminal Court.

Given my prior interest and area of professional expertise, the recent announcement that the UK’s National Crime Agency (NCA) will be heading up and hosting a team of specialist investigators to target Grand Corruption from countries such as Australia, Canada, New Zealand, Singapore and the USA grabbed my attention.

The initiative will be called the International Anti-Corruption Coordination Centre.

Grand Corruption is one of the greatest scourges the world faces, and it is showing few signs of abating. The Cambridge Dictionary defineskleptocracy as "…..a society whose leaders make themselves rich and powerful by stealing from the rest of the people.” This captures the essence of Grand Corruption as a crime perfectly.

The people worst affected by Grand Corruption are the ordinary people in the country concerned: the same people who have no voice, or whose voice goes unheard. Grand Corruption is extremely difficult to investigate and to deal with. In many instances it is those in the higher echelons of government perpetrating the crime. Invariably the corrupt network will have tentacles reaching into the police, courts and judiciary.

This fact renders those who would investigate the crime "from within" almost impotent. International sanctions may put pressure on the rulers, but again it will be the poorest who are worst affected. Add to this that sanction busting is itself a growing business, and the problematic nature of addressing this insidious crime becomes even more apparent.

The NCA is effectively the UK’s equivalent of the FBI. Its reputation with other UK law enforcement agencies is, at best, mixed as is its track record.

The NCA oversees asset recovery in the UK on behalf of law enforcement agencies, empowered by the Proceeds of Crime Act 2002 (POCA). In effect, a hard working police force whose investigators recover significant assets from a drug trafficker will see their figures swallowed up by the NCA, which then effectively publishes as its own.

The National Audit Office’s most recent figures indicate that the NCA oversaw £155 million ($202 million) collected by law enforcement agencies between 2014-2015. This figure includes confiscations in respect of all acquisitive and POCA-qualifying crime. The NCA itself states that drug trafficking alone cost the UK £10.7 billion ($14 billion) in 2015.

This puts into perspective the £155 million collected, especially when the NAO also indicates law enforcement has secured £1.61 billion ($2 billion) in confiscation orders in terms of value, all of which is outstanding and hasn’t been collected. Presumably this money remains with the criminals. Could this be construed as being a successful confiscation regime?

If we put this into the context of the new International Anti-Corruption Coordination Centre (IACCC), who will it be pursuing and what will be its objectives? Having read the NCA press release, the founding members all make admirable statements of intent and of bringing the “corrupt elites to justice.”

So why have I mentioned the NCA in the context of POCA and its questionable results in the area of confiscation?

Well, when you read the IACCC press release there is a glaring omission in terms of its ambition and those extolled by its partners. Each organization’s spokesperson talks in soundbites. How they are going to bring culprits to justice in the context of a corrupt state where they have no jurisdiction is debatable. This brings me to the case in point.

Nowhere is it mentioned that there is any plan in place to recover the value in terms of assets lost to the people of the corrupt state. How can you launch an initiative such as this and not mention asset recovery? What is the point of point of setting up a flagship initiative directed at the problem of Grand Corruption, with no apparent remit or ambition to recover the assets stolen in the crime?

Historically such failings have seen the culprits incarcerated, but their families allowed to live the high life, living off illicit proceeds. And, when the convicted are eventually released from jail, their luxury houses, cars and fat bank balances are still in situ awaiting their return. Meanwhile, the poor have all gotten poorer.

Confiscation, forfeiture, call it what you will, is vital to ensuring that the shysters do not get to enjoy the fructus corruptio (the fruits of corruption). When criminals are subjected to confiscation, others see them stripped of their ill-gotten wealth. It serves as a warning to those who may consider following in the crook’s footsteps. In effect, you remove the incentive to commit crime by removing the assets -- and thereby the negative role model.

The UK’s anti-money laundering armory will soon include the Criminal Finances Bill, due to be enacted in September this year. This legislation will enable easier information sharing in respect of money laundering, and require suspects to justify their financial means and lifestyle via Unexplained Wealth Orders. In addition, it will enable the authorities to seize money via forfeiture held in bank accounts suspected of having its derivation in serious crime and terrorism.

Again, there is not one mention of this forthcoming legislation by the National Crime Agency. This could be a groundbreaking law and it will be at the disposal of the new team. One clearly compliments the other.

I have no doubt that the International Anti-Corruption Coordination Centre will look at the issue of asset recovery when the time comes, because a lowly investigator will see to it that it does, and wholeheartedly welcome its arrival. But until then, the National Crime Agency and its partners in the IACCC have done themselves no favors in trumpeting their initiative and missing out any reference to asset recovery.

 

This post originally featured on the FCPA blog and can be found here: http://www.fcpablog.com/blog/2017/7/19/martin-kenney-why-isnt-asset-recovery-on-the-international-e.html