INDONESIAN IS ONE OF FAMOUS IN THE WORLD AS THIEVES?ROBBER?GANGSTER TO ALL BATAK PEOPLE PLEASE DONT MAKE A FOOL WESTERNER THEY KNOW WHAT YOU ARE DOING?

http://tbn0.google.com/images?q=tbn:KEymf6C2bHZD8M:http://siteresources.worldbank.org/PUBLICSECTORANDGOVERNANCE/Images/star.jpgFormer president Suharto and stolen state assets.

A report issued by the “Stolen Asset Recovery (StAR) Initiative”, a joint program of the United Nations Office of Drugs and Crime (UNODC) and the World Bank, claims that former president Suharto stole between 15 and 35 billion dollars of state funds between 1967 and 198998.

Suharto in 1965, attending the funeral of an assassinated general.

Not relying on Time magazine reports but using 2004 data from the anti-corruption watchdog Transparency International the list reads: [1]

1. Suharto, 1967-98, Indonesia, $15-35 billion stolen, or 0.6%-1.3% of GDP.
2. Ferdinand Marcos, 1972-86, Philippines, $5-10 billion stolen, or 1.5%-4.5% of GDP.
3. Mobutu Sese Seko, 1965-97, Zaire, $5 billion stolen, or 1.8% of GDP.
4. Sani Abacha, 1993-98, Nigeria, $2-5 billion stolen, or 1.5%-3.7% of GDP.
5. Slobodan Milosevic, 1989-2000, Serbia/Yugoslavia, $1 billion stolen, or 0.7% of GDP.
6. Jean-Claude Duvalier, 1971-86, Haiti, $0.3-0.8 billion or 1.7%-4.5% of GDP.
7. Alberto Fujimori, 1990-2000, Peru, $0.6 billion, or 0.1% of GDP.
8. Pavlo Lazarenko, 1996-97, Ukraine, $0.1-0.2 billion, or 0.2%-0.4% of GDP.
9. Arnoldo Alemán, 1997-2002, Nicaragua, $0.1 billion, or 0.6% of GDP.
10. Joseph Estrada, 1998-2001, Philippines, $0.07-0.08 billion, or 0.04% of GDP.
Foreign Minister Hassan Wirajuda said that President Susilo Bambang Yudhoyono will meet the World Bank president, Robert B. Zoellick, when he visits New York from September 22nd-26th to find out what the World Bank intends on doing with this information and how Indonesia might be able to help to recover some of the stolen funds. [2]

The Righteous Dude Says:

September 20th, 2007 at 2:48 pm
A report issued by the “Stolen Asset Recovery (StAR) Initiative”, a joint program of the United Nations Office of Drugs and Crime (UNODC) and the World Bank, claims that former president Suharto stole between 15 and 35 billion dollars of state funds between 1967 and 1989.

What about the 1990s? Shouldn’t “1989″ be 1998, when he resigned?

Sputjam Says:

September 21st, 2007 at 9:18 am
I believe the figures are exaggerated.
In most likelihood, suharto gave monopolies to his friend and families. These are the guys who plundered and looted.

Rambutan Says:

September 21st, 2007 at 10:03 am
I believe the figures are exaggerated.
In most likelihood, suharto gave monopolies to his friend and families. These are the guys who plundered and looted.

Wouldn’t make it any better, though!

Dragonwall Says:

September 21st, 2007 at 12:54 pm
The figures were far too exaggerated by these people base on conjecture without actual proof.

Why is Soeharto so confident and not making too much comments? There isn’t that much money for them to find. Money from Tommy doesn’t mean a thing.
If a smart lawyer making the defence will be able to simply get away with that without much arguments.

Moreover if they have the proof they would have blown the trumpet all over and not sit there for it to rot. Being a government there is no difficulty at all for them to subpeona any of those evidence for the person to be charge in court for that crime. The problem is that they don’t have them at all and mostl of it are likey to be fabricated.

Much was heard but no action taken like the new AG is also another good for nothing BS. If they were in possession of such sensitive documents will they hesitate to take action knowing that there will be plenty of money waiting for them to get. Say what they like they are one of a kind, no difference. Tukang peras.

For them to put Soeharto on trial? Angin saja.

Those from the Kehakiman, the louder their voice the bigger the cut they are getting.
Politic is dirty when it comes to power and money.

Janma Says:

September 21st, 2007 at 1:05 pm
I have an american friend who grew up in Indonesia and during the fall of soeharto he was a veritible live broadcast on all the goings on, and he would expound on all the events as they transpired. We would all listen with baited breath because he loved to try out his own little theories on what would happen and what various events really meant.

Sometimes his theories could get a bit wild and speculative to say the least and I remember one day I was visiting him with a friend who is the editor or kep redaksi of Kompas newspaper… not a speculative sort of a fellow really… a professional journalist, and Kurt was trying out a new theory on that day… the “Soeharto doesn’t have any money” theory… he made Soeharto seem like a pawn at the mercy of the machinations of his children, friends, cronies, family.

By the end of it he had Soeharto living out a lonely old age not being able to afford to pay his electricity… it was quite funny really, should have seen Ninoks face! After he left Kurt turns to me and asks, “so who was that again? Your brother in law?”….
“That was Ninok Leksono, editor in chief Kompas” I told him… and close your mouth for goodness sake… don’t worry, he won’t print that!

Dragonwall Says:

September 21st, 2007 at 10:27 pm
Janma, it is interesting to know that there are still people that are willing to accept the fact and reality in life.

When a person fall from a high position, there are people who used to be his/her cronies will start pointing fingers and saying his/her ill deeds. Behind the political scene it is very different. You have to resort to anything to make people happy and be able to control them. Once you loosen the grip you are finish like Habibie vs Soeharto at the time of his impeachment. He will soon fell victim to a lot of accusations. During his/her heydays those that surround him/her were busy grabbing what they could and that includes his family, friends, relatives, cronies etc and he could do nothing about them because any action taken will reflect his/her well being.

SIt is quite fortunate that soeharto still have his kin folks to accomodate him at Cendana and buddies like Mahatir and LKY still visits him.

How much can a person eat, use or spend. What kind of luxury would you asked for when you are of his age. He will eventually pass away as a pauper.

Like I said I am not pro Soeharto. But does anyone being an Indonesian, right down the heart, ever thought of what good he had done for the country? Of course there are bad times like in China as to Mongolia. But in Mongolia, everyone is happy now after everything is being straightened out. Not in Indonesia.

Those that were the actual culprits shy away, like what Wiranto said during Soeharto’s impeachment, that he will use his very effort to protect Soeharto and his family with what!. That was only a damned bullshit pretence. He together with his clique were the peran utama together with Habibie that tried to frame Prabowo and cause Soeharto’s downfall. They were all even promoted! F**k. what kind of crap If this is a democratic country and is constitutional these people should have been tried for high treason for undermining the country’s security. It was witness in many African countries and the eastern block. If Putin wants to put in more effort, Rusia will not break up. But he understands the difficulties in managing a huge country so all those went unscathed by his experience as the ex-head of KGB.

These, to what I see are just distraction so that attentions will be focused on Soeharto rather than on the people and internal affairs. You know that Indonesians are good with that, right. Like ‘Sekarang lagi sibuk, ngak ada waktu untuk urusan lain’. You will not be able to see anyone politican right now in Indonesia that is capable of overcoming all these problems at one go. even with SBY especially when his hands are tied and and not much help from his cabinets when those GFN were busy with their ‘urusan pribadi’. Those that were capable were not put into good use, whereas those blood suckers using money to buy a position were busy to realize their ROPI ( return of political investment).

This is so sad and really pathetic. I told my children that they should seek the highest education possible too endeavor their future and go out and get what they think they want and are capable of. Don’t let the Indonesian political happennings and the corrupt mind hamper their thinking. If Indonesia is not a place for them then go somewhere else.

I fully understand the Indonesians and the predicament of Chinese that came to America that is why the lawyers we are working with exerts every efforts of making these people migrating to ensure they receive the necessary help to enable their stay. But sometime these Indonesian attitudes doesn’t change. I hope the world could be a better place in the future.

Pena Budaya Says:

September 22nd, 2007 at 4:33 pm
Do you know the owner of Taman Mini Indonesia Indah? It could be a start.

Does anyone care to investigate the recent divorce process of Suharto’s son? We are not talking about rubbish gossips, of course, but the multi-billions of “harta gono-gini”. It could be a start to investigate Suharto’s family assets, or not?

John Orford Says:

September 24th, 2007 at 4:11 am
Dear Mr Indonesia Matters,

This article is clearly defaming the Grand ol’ President of Indonesia. Please cease and desist your defamation, and send $100,000,000,000 to the Suharto Family immediately!

Yours sincerely,

Suharto’s rabid Gang of Lawyers.

PS. this is not a joke.

Ditto Poerbo Says:

January 23rd, 2008 at 11:29 am
I have to say, the corruption numbers.. it is exagerated. I do believe that Soeharto’s cronies and their families and his former gang of traitors who used to be his cabinet ministers (Ginandjar Kartasasmita, BJ Habibie, Akbar Tandjung, Harmoko, Wiranto, etc) – are the ones reaping, looting the wealth of the nation. These same gangs of thugs who think they run this country have been eloquently changing phrases and faces from time to time: during Soeharto’s time they were claiming as “His Trusted Allies” but entering the May 1998 downfall of the regime, these same people quickly turned into “Anti Soehartoist” “Reformers” and ditch practically any visible contacts with Soeharto and his family. (Well, some of them came back for greetings & blessings to Soeharto’s residence in Cendana many years after mid-May riot.. what a bunch of hypocrits).

These people have layers of masks and unlimited resources, and it is very easy if not convinient for a person like Wiranto or Habibie to sacrifice a bright, rising star like Prabowo during the 1998 turmoil and turned the latter into a scapegoat for everything-wrong in Indonesia. And how on earth Habibie have the guts crying on national TV “Pak Harto doesn’t want to see mee…” “I’ve tried calling him and ask for a chance to meet him but he said to continue my work..” (How dumb this Habibie is? Off course Soeharto wouldn’t see him. To Soeharto and his family, Habibie will always be a traitor).

And now Soeharto is dead sick.
And I don’t think the UN or World Bank or any Indonesian President will ever find this “treasure”.
And I am extremely disturbed that even established International Organizations like UN and World Bank can issued such amount of figures of some so-called dictators without sufficient evidence. Anyway, talking about international organizations will mean that you will enter another powerplay games. And this time, we are not dealing with just a gang of traitors, because these organizations are capable to ruin countries, make up and break up governments, topple a junta, reinstated a president, turned the economy upside down.

Last but not least: I don’t think those UN – World Bank report will do any good to Indonesians, anyway.

Dragonwall Says:

February 11th, 2008 at 6:21 am
When you are dynamci like a dynamite, your political and allies called youan allie. But when you are down they will turn into dynamite and treat you like a foe.

These foes simply need to indoctrinate the public in general by pointing out several of the weak points and injected adrenalin into them to spurn them.

It was Soeharto’s greatest mistake by not being harsh. Especially the West were ever eager to be good ggod friend of Indonesia by ridding what they think is their hindrance in progress or getting what they want.

All these bunch of traitors and traitors are betraying the trust of the Indonesians by taking 100 and giving 10 to the public. They will bagi bagi on the 90. Whoever they are right now, they will put their trusted people so that secrets don’t leak for sure. Lets take Taufik Kiemas for example on how he also enrich himself during the term of Mega. Then there were accusation and they just subside.

INDONESIA IS ON THE PATHETIS ROAD OF NO RETURN……

Like in the AG Office, they have plenty of cases lying waiting to be filed and have these people indicted but it just sits there waiting to rot in the flood. Later on it is the story of BUKTINYA SEMUA DIBAKAR, DIRUSAK BANJIR,HILANG ETC..ETC…MAJU TERUS KORUPSI…. whoever the person is the AG or Minister of Justice..Damn f88k**g useless scumbags.

===============here is document from THE IMF BANK STATEMENT===============

Stolen Asset Recovery (StAR) Initiative:
Challenges, Opportunities, and Action Plan
By signaling to corrupt leaders that there will be no safe haven for stolen
assets, StAR would constitute a formidable deterrent to corruption in
developing countries. StAR would also serve to bring in the other side of
the corruption equation, as stolen assets tend to be stashed in developed
country financial centers.
Stolen Asset Recovery (StAR) Initiative:
Challenges, Opportunities, and Action Plan
June 2007
© 2007 The International Bank for Reconstruction and Development/The World Bank
1818 H Street, NW
Washington, DC 20433
Telephone 202-473-1000
Internet http://www.worldbank.org
E-mail feedback@worldbank.org
All rights reserved.
The findings, interpretations, and conclusions expressed herein are those of the author(s) and do
not necessarily reflect the views of the Board of Executive Directors of the World Bank or the
governments they represent.
The World Bank does not guarantee the accuracy of the data included in this work. The boundaries,
colors, denominations, and other information shown on any map in this work do not imply any
judgment on the part of the World Bank concerning the legal status of any territory or the endorsement
or acceptance of such boundaries.
Rights and Permissions
The material in this work is copyrighted. Copying and/or transmitting portions or all of this work
without permission may be a violation of applicable law. The World Bank encourages dissemination of
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For permission to photocopy or reprint any part of this work, please send a request with complete
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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of
the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail
pubrights@worldbank.org.
Table of Contents
Acknowledgments …………………………………………………………………..………………………………………….……………………………………….iv
Executive Summary……………………………………………………………………………………………………………………………………………………..1
1. Why StAR? Why Now?…………………………………………………………………………………………………………………………………………..5
2. Estimates of the Size of the Problem and Potential Benefits from Tackling High-level Corruption …………………8
2.1 Global Estimates……………………………………………………………………………………………………………………………………………..9
2.2 Country-level Estimates ………………………………………………………………………………………………………………………………..10
2.3 The Development Impact of StAR………………………………………………………………………………………………………………….11
3. How Stolen Money is Hidden ……………………………………………………………………………………………………………………………….13
4. Legal Framework: The UN Convention Against Corruption (UNCAC) ………………………………………………………………..15
5. Findings from Country Case Studies…………………………………………………………………………………………………………………..18
5.1 Synopsis of Country Case Studies………………………………………………………………………………………………………………..18
5.1.a Nigeria ……………………………………………………………………………………………………………………………………………………18
5.1.b Peru ………………………………………………………………………………………………………………………………………………………..19
5.1.c The Philippines………………………………………………………………………………………………………………………………………20
5.2 Asset Theft Facilitated by Lack of Transparency and Low Public Accountability………………………………………22
5.3 Domestic Political Will and International Cooperation Key to Asset Recovery ………………………………………….23
5.4 Monitoring Use of Recovered Assets Impeded by Weak Systems and Fungibility……………………………………..24
5.5 Challenges Ahead …………………………………………………………………………………………………………………………………………26
6. An Action Plan …………………………………………………………………………………………………………………………………………………….30
6.1 Action Plan Matrix …………………………………………………………………………………………………………………………………………31
6.2 UNODC-WBG Joint Program…………………………………………………………………………………………………………………………33
6.2.a Building Global Partnerships on StAR …………………………………………………………………………………………………33
6.2.b Building Institutional Capacity and Providing Technical Assistance at the Country Level………………34
6.2.c Implementation and Monitoring of UNCAC…………………………………………………………………………………………36
Appendix A. Options to Improve Public Financial Management……………………………………………………………………………..38
Appendix B. What Other Agencies are Doing…………………………………………………………………………………………………………..41
Appendix C. Focal Point Questionnaire……………………………………………………………………………………………………………………45
References…………………………………………………………………………………………………………………………………………………………………47
Note: All dollar amounts are in U.S. dollars, unless otherwise indicated.
Acknowledgments
This report was prepared jointly by the United Nations Office on Drugs and Crime (UNODC) and the
World Bank. The World Bank effort was led by Brian Pinto (PRMED), with valuable contributions
from Daniel Kaufmann (WBI); Victor A. Dumas and Francis Rowe (PRMED); Theodore S.
Greenberg (FPDFI); William L. Dorotinsky and Richard Messick (PRMPS); and Scott White (LEG).
The UNODC effort was led by Francis Maertens (DPA), Dimitri Vlassis (DTA/CCS), and Stuart C.
Gilman (DO/GPAC), with valuable contributions from Rick McDonnell and Delphine Schantz
(DO/GPML) and Oliver Stolpe (DO/GPAC). The report was prepared under the overall leadership
and supervision of Dr. Ngozi Okonjo-Iweala (former Finance Minister of Nigeria) and Danny
Leipziger (PRMVP). Guidance from Juan Jose Daboub (MDD), Vikram Nehru (PRMED), Sanjay
Pradhan and Randi Ryterman (PRMPS), and Joachim von Amsburg (EACPF) is gratefully
acknowledged.
Three country case studies on Nigeria, Peru, and the Philippines were commissioned as analytical
background papers in support of the StAR Initiative. The Nigeria case study was prepared by Dr.
Ngozi Okonjo-Iweala. The Peru case study was prepared by Victor A. Dumas. The Philippines case
study was prepared by Professor Leonor Briones. For further information regarding the StAR
Initiative, please contact Randi Ryterman, Sector Manager PRMPS (Rryterman@worldbank.org).
iv Stolen Asset Recovery (StAR) Initiative:
Executive Summary
The theft of public assets from developing countries is a huge and serious problem:
• The cross-border flow of the global proceeds from criminal activities, corruption, and tax
evasion is estimated at between $1 trillion and $1.6 trillion per year.
• Corrupt money associated with bribes received by public officials from developing and transition
countries is estimated at $20 billion to $40 billion per year—a figure equivalent to 20 to 40
percent of flows of official development assistance (ODA).
These estimates, while imprecise, give an idea of the large magnitude of the problem and the
need for concerted action to address it. Indeed, the coming into force in 2005 of the landmark
UN Convention Against Corruption (UNCAC), which devotes a chapter to asset recovery, signals
the growing global consensus for urgent action.
Assets stolen by corrupt leaders at the country-level are frequently of staggering magnitude. The
true cost of corruption far exceeds the value of assets stolen by the leaders of countries. This would
include the degradation of public institutions, especially those involved in public financial management
and financial sector governance, the weakening if not destruction of the private investment climate,
and the corruption of social service delivery mechanisms for basic health and education programs,
with a particularly adverse impact on the poor. This “collateral damage” in terms of foregone growth
and poverty alleviation will be proportional to the duration of the tenure of the corrupt leader.
While the traditional focus of the international development community has been on addressing
corruption and weak governance within the developing countries themselves, this approach
ignores the “other side of the equation”: stolen assets are often hidden in the financial centers
of developed countries; bribes to public officials from developing countries often originate from
multinational corporations; and the intermediary services provided by lawyers, accountants, and
company formation agents, which could be used to launder or hide the proceeds of asset theft
by developing country rulers, are often located in developed country financial centers.
Addressing the problem of stolen assets is an immense challenge. Even though countries as
diverse as Nigeria, Peru, and the Philippines have enjoyed some success in asset recovery, the
process has been time-consuming and costly.
• Generalizing from the experience of these countries, developing countries are likely to
encounter serious obstacles in recovering stolen assets.
• Even where the political will to pursue stolen assets exists, limited legal, investigative, and judicial
capacity and inadequate financial resources could hamper the process.
• Jurisdictions where stolen assets are hidden, often developed countries, may not be responsive to
requests for legal assistance.
Challenges, Opportunities, and Action Plan 1
The Stolen Asset Recovery (StAR) initiative is being launched jointly by the UN Office on
Drugs and Crime (UNODC) and the World Bank Group (WBG) to respond to this problem. Given
the nature of the problem, success will depend critically upon forging and strengthening partnerships
among developed and developing countries, as well as other bilateral and multilateral agencies
with an interest in the problem.
The development pay-off to the StAR initiative is expected to be significant. Even a portion
of recovered assets could provide much-needed funding for social programs or badly needed
infrastructure. Every $100 million recovered could fund full immunizations for 4 million children or
provide water connections for some 250,000 households. The total benefit would far exceed that
associated with the asset restitution itself, assuming that the released funds are well spent.
First, a StAR program that transmits the signal that there is no safe haven for stolen assets will
embody a powerful deterrent effect. Second, over the long run, one would expect significant and
lasting benefits, assuming the asset recovery effort is accompanied by institutional reform and
better governance. Indeed, without improvements in governance, a StAR initiative will not have
lasting benefits.
The UNODC-WBG StAR initiative is an integral part of the World Bank Group’s recently
approved Governance and Anti-Corruption Strategy, which recognizes the need to help developing
countries recover stolen assets. The international legal framework underpinning StAR is
provided by the UN Convention Against Corruption, the first global anticorruption agreement,
which entered into force in December 2005. UNODC is both the custodian and the lead agency supporting
the implementation of UNCAC, as well as the Secretariat to the Conference of State Parties.
The Action Plan presented in this report responds to feedback received from consultations
with developed and developing countries, as well as lessons from the experience of Nigeria,
Peru, and the Philippines:
• Theft of public assets is facilitated by a lack of transparency and public accountability.
• Developing countries need to strengthen their legal, financial, and public financial management
systems.
• Even when political will exists in victim countries, legal differences across jurisdictions or the
unwillingness of developed countries to help can derail asset recovery.
A fundamental premise of the Action Plan is that a successful effort on stolen asset recovery
calls for global action:
• Political will and legal reform are also needed in developed countries, not just in developing
countries. Both sets of countries need to ratify and implement the UN Convention Against
Corruption (UNCAC).
• Time is of the essence. Prolonging the process of asset recovery will take a toll on the credibility
of the victim country. A prompt response is needed from countries where stolen assets are hidden.
• Global cooperation is needed to ensure that new financial havens do not replace the existing
ones and developing countries receive the legal support they need.
2 Stolen Asset Recovery (StAR) Initiative:
Examples of proposed actions include:
• Implementation of UNCAC, including developing and strengthening partnerships with multilateral
and bilateral agencies in pursuit of this effort.
• Developing a pilot program aimed at helping countries recover the stock of stolen assets by
providing the needed legal and technical assistance. This could include help on filing a request
for mutual legal assistance and advice on experts needed. Neither the WBG nor UNODC would
get directly involved in the investigation, tracing, law enforcement, prosecution,
confiscation, and repatriation of stolen assets—activities that may be best suited for
government-to-government assistance or private sector assistance, working with the relevant
government authorities.
• Offering countries alternatives for monitoring recovered assets, within an overall framework
of public financial management reform, to ensure transparency and effective use of those
assets. Such monitoring would be on a voluntary basis, with the agreement of all the countries
concerned, in keeping with the fundamental principle of the return of stolen assets as embodied
in UNCAC.
• Building global partnerships on StAR.
At the 2007 IMF-World Bank Spring Meetings, during a side-event introducing the StAR
Initiative, representatives of developed and developing countries and multilateral development
banks expressed strong support for the Initiative. The consensus was that StAR is an idea
whose time has come and that every country or international agency must do its part to make it
succeed. Indeed, a collective global effort is essential for success and unequivocally transmitting
the signal that corruption does not pay. In this sense, StAR was described as the “missing link” in
an effective anti-corruption effort. By putting corrupt leaders on notice that stolen assets will be
traced, seized, confiscated, and returned to the victim country, StAR would constitute a formidable
deterrent to corruption. Working in close partnership with the international development community,
UNODC and the WBG hope to make a positive difference to developing countries through the
StAR Initiative.
Challenges, Opportunities, and Action Plan 3
4 Stolen Asset Recovery (StAR) Initiative:
Working in close partnership with the international development
community, the United Nations Office on Drugs and Crime and the
World Bank Group hope to make a positive difference to developing
countries through the StAR initiative.
In recent years, countries as far-flung and diverse as Nigeria, Peru, and the Philippines have enjoyed
some success in securing the repatriation of assets stolen by their corrupt former leaders. Success,
however, has been neither easy nor quick. Consider the Philippines. In 1986, the Republic of the
Philippines filed a request for mutual assistance with the Swiss authorities in connection with the
repatriation of Marcos deposits in Swiss banks. Twelve years elapsed before these deposits were
transferred to escrow accounts in the Philippine National Bank (PNB) and another six years passed
before the concerned $624 million was transferred to the Philippine Treasury. In between, several
major legal hurdles had to be crossed, including presenting evidence that the monies were the
product of embezzlement, diversion of public property, and plundering of the public treasury. Only
after the Philippine government won a ruling that the monies could be moved out of Switzerland
without a final conviction of Mrs. Marcos under article 74A of the International Mutual Assistance
on Criminal Matters Act (IMAC) was the money moved to the Philippine National Bank in 1998. It
was released to the Philippine Treasury in 2004 following a Philippine Supreme Court decision
ordering the forfeiture of the Marcos Swiss deposits in July 2003.1
Quite apart from the hurdles faced by developing countries in asset recovery, at least three other
sets of events have shone a spotlight on the problem of assets stolen by corrupt leaders. First,
starting in 1997, several important pieces of international legislation against corruption, bribery,
and transnational organized crime have been adopted. The landmark UN Convention Against
Corruption (UNCAC), which came into force in December 2005, includes a chapter exclusively
devoted to asset recovery, attesting to the need to address this problem urgently. Second, the
9/11 terrorist attack of the United States in 2001 has intensified the campaign against the financing
of terrorism and money laundering. The main financial centers of the world, in being seen as
a safe haven for the stolen assets of corrupt leaders, criminals, and terrorists, face a higher
reputational risk today than they did 10 years ago. Third, developing countries themselves are
gearing up to recover stolen assets and use the proceeds to fund development programs and
facilitate the achievement of the Millennium Development Goals (MDGs). Consider the 2001
Nyanga Declaration on the recovery and repatriation of Africa’s wealth by the representatives of
Challenges, Opportunities, and Action Plan 5
Why StAR?
Why Now? 1.
1. Drawn from a December 12, 2006 statement by the Philippines’ Ombudsman to the first meeting of the State Parties to the UN
Convention Against Corruption (UNCAC) in Amman, Jordan.
Transparency International in 11 African countries, which explicitly refers to”…Nigeria’s President
Olusegun Obasanjo’s address to the UN General Assembly in September 1999 calling for the
creation of an international convention for the repatriation of Africa’s wealth illicitly appropriated
and kept abroad.”2 This support was more broadly manifested during the first session of the Ad
hoc Committee negotiating UNCAC, when developing countries from all regions decided to make
asset recovery a high priority of the Convention.
While there is clearly positive momentum and support for recovery of stolen assets, the challenges
are immense. Differences in legal systems across jurisdictions where the theft occurs and money
is laundered and parked present a formidable impediment to asset recovery. So far, countries
have largely pursued their cases on a bilateral basis and with great difficulty. And while the entering
into force of UNCAC is a big step forward, half the G-8 countries have yet to ratify it. Moreover, there
is the issue of building capacity in developing countries hoping to invoke UNCAC. The following are
likely to be impediments:
• Countries that seek the recovery of stolen assets may not have a domestic regime to deal with
money laundering and the forfeiture of stolen assets. These countries usually lack the capacity
in their criminal justice system to produce adequate and appropriate requests for international
legal assistance.
• Death, the fugitive status, and immunity of persons engaged in looting assets could impede the
process, as could the continuing political influence and power of former corrupt officials.
Even when the conditions are right for pursuing asset recovery, some developed countries may
not cooperate because they do not trust the requesting country or lack confidence in their rule
of law or for political reasons.3
Against this background of positive momentum yet immense challenge, the World Bank Group
(WBG), in partnership with the United Nations Office of Drugs and Crime (UNODC), is launching
the Stolen Asset Recovery (StAR) initiative. The roles of these institutions will be framed by their
respective mandates: in the case of UNODC by its responsibility as the custodian of UNCAC and
Secretariat to the Conference of State Parties; and in the case of the WBG, by the recently
approved Governance and Anti-Corruption (GAC) strategy, which recognizes the need for global
action on stolen asset recovery.4
The objective of the UNODC-WBG partnership is three-fold:
• Use both institutions’ convening power to enhance cooperation between developed and developing
countries on StAR and persuade all countries to ratify and implement UNCAC. This agenda will
be pursued in close partnership with other agencies working on related topics.
6 Stolen Asset Recovery (StAR) Initiative:
2. See http://ww1.transparency.org/pressreleases_archive/2001/nyanga_declaration.html
3. The term “requesting” or “sending” country in the context of stolen asset recovery typically refers to developing countries from which
assets were stolen and “sent” to developed country havens (“receiving countries”). The former then request the latter to return the
stolen assets.
4. The World Bank Group’s Board unanimously endorsed the Governance and Anti-Corruption strategy paper on March 20, 2007. See
World Bank (2007).
• Build partnerships aimed at enhancing legislative, investigative, judicial, and enforcement
capacity in developing countries to enable them to successfully recover the stock of stolen
assets kept either in the home country or secreted abroad, while deterring the new flow.
• Help concerned developing countries—when voluntarily agreed within the legal framework of
UNCAC—monitor the use of recovered assets, as was done in Nigeria (discussed in section 5).
While UNCAC is clear that recovered assets should be returned, in some cases recovery efforts
could be enhanced by voluntary agreements on monitoring to ensure that recovered assets are
used transparently for developmental purposes. The WBG’s experience with public expenditure
tracking can be put to use in helping monitor the use of recovered assets, at the election of the
country in question.5 A StAR role for the WBG would thus be an integral part of its Governance
and Anti-Corruption (GAC) Strategy, with its focus on financial sector governance, transparent
and sound public financial management, global collective action, and the deterrence of corruption
by public officials.
Challenges, Opportunities, and Action Plan 7
5. This is discussed further in section 5.
This section presents global and country-level estimates of theft by corrupt leaders. The theft of
public assets involves two key steps: stealing assets, and then laundering the proceeds—either at
home or abroad—to avoid detection and make them appear legitimate. Global estimates are
derived from estimates of sums of money laundered worldwide. Country-level estimates linked
to the names of specific rulers are obtained from Transparency International, which has compiled
the data from various sources.6
Given the nature of the activity, accurate measurement of the amount of illegal monies involved
at either the global or country-level may not be feasible. Another source of ambiguity stems from
differing definitions of corruption and the scope of the activities included in the various estimates
of illegal monies, not all of which involve cross-border flows. Thus the theft of public assets by
corrupt leaders—the focus of this paper—which is usually referred to as grand corruption, may simply
be the tip of the iceberg. For example, the billions looted by the corrupt leader of an oil exporting
developing country, while visible and significant enough to warrant action in its own right, may be
only one part of an extensive network of corruption that infects the whole economy, creating a
pyramid of corruption. This could include public sector companies, the financial system, and petty
corruption associated with policemen and factory inspectors. These various interpretations of
the scope of corruption need to be kept in mind when reviewing estimates of the sums of money
involved in illegal activity.
Before proceeding to estimates of the sums of illegal and corrupt monies, it is worth stressing
that the true cost of corruption far exceeds the value of assets stolen by the leaders of countries.
This would include the degradation of public institutions, especially those involved in public
financial management and financial sector governance, the weakening if not destruction of the
private investment climate, and the corruption of social service delivery mechanisms for basic
8 Stolen Asset Recovery (StAR) Initiative:
Estimates of the Size of
the Problem and Potential
Benefits from Tackling
High-level Corruption 2.
6. See Transparency International’s 2004 Global Corruption Report, chapter 1, p. 13. Introduction available at
http://www.transparency.org/publications/gcr/download_gcr/download_gcr_2004
health and education programs with a particularly adverse impact on the poor. This “collateral
damage” in terms of growth and poverty alleviation will be proportional to the duration of the
tenure of the corrupt leader.
2.1 GLOBAL ESTIMATES
Numerous studies have attempted to estimate the sums of money being laundered worldwide.
Besides suffering from serious flaws in estimation techniques, attempts to derive complete estimates
are hampered by the fact that the volume of laundered money is not restricted to assets corruptly
acquired by country leaders. Money laundering (ML) services could also be demanded by those
evading taxes or involved in the trade of illegal arms or narcotics. The estimates available, therefore,
need to be taken as, at best, rough approximations. Several estimates provide the upper or lower
bounds, ranging from:
• 2 to 5 percent of global GDP (Camdessus 1998), which amounts to $800 billion to $2 trillion in
current U.S. dollars, as an estimate of the total funds involved in various illegal activities.7
• $3.4 trillion as an upper bound (cited in Reuter and Truman 2004). This number is based on
estimates of the unobserved economy, which is a broad definition of illegal and legal activities
excluded from GDP in 21 OECD countries, based on Schneider and Enste (2000) and Schneider
(2002).
• $20 billion to $40 billion (2001 Nyanga Declaration). This is an estimated stock of assets
acquired by corrupt leaders of poor countries, mostly in Africa, and stashed overseas.
• $500 billion in criminal activities, $20 billion to $40 billion in corrupt money, and $500 billion
in tax evasion per year (Baker and others 2003; Baker 2005). This adds up to roughly $1 trillion,
with half coming from developing and transition economies.
• 25 percent of the GDP of African states lost to corruption every year, amounting to $148 billion
(U4 Anti-Corruption Resource Centre 2007). This estimate is likely to encompass the full range
of corrupt actions, from petty bribe-taking done by low level government officials to inflated
public procurement contracts, kickbacks, and raiding the public treasury as part of public asset
theft by political leaders.
Of the above numbers, all are annual flows, except those cited in the 2001 Nyanga Declaration
by the representatives of Transparency International in 11 African countries. It notes that $20 billion
to $40 billion “…has over the decades been illegally and corruptly acquired from some of the
world’s poorest countries, most of them in Africa, by politicians, soldiers, businesspersons and
other leaders, and kept abroad in the form of cash, stocks and bonds, real estate and other
assets.”8 This stock figure is much lower than what one might expect, given the flow of 25 percent
of African GDP often cited as being lost in total corruption, which amounts to $148 billion per
year in current dollars.9
Challenges, Opportunities, and Action Plan 9
7. This figure has been widely quoted in the literature; however, a documented basis for it could not be found. IMF (2001, p. 10) quotes an
FATF estimate of flows associated with drug trafficking at 2 percent of global GDP, so by assumption, 2 to 5 percent is likely to be
referring to total flows.
8. http://ww1.transparency.org/pressreleases_archive/2001/nyanga_declaration.html
9. However, neither a precise source nor an underlying methodology for this number could be pinned down. It appears to have become a
“fact” as a result of being repeatedly cited.
Baker (2005) presents global estimates of annual money laundering based on a “bottom up”
approach. The funds needing money laundering are divided into the three components: criminal,
including drugs, counterfeited goods and money, human trafficking, illegal arms trade, and
unrecorded oil sales; corrupt, essentially accruing to Politically Exposed Persons (PEPs), the
focus of this paper, from illegal activities like bribery, extortion, fraud, and embezzlement from
national treasury; and proceeds linked to tax evasion.10 Baker estimates the sums involved from
these three components at a global level of between $1 and $1.6 trillion annually, with roughly
half coming from developing and transitional economies.11
While the numbers are alarming, one should guard against cloaking them with an aura of scientific
precision in view of the weaknesses in the estimation methods used. Reuter and Truman (2004,
p. 16) acknowledge that “At best, the various estimates suggest that there is substantial potential
demand for money-laundering services, but there is little basis for concluding whether it
amounts to hundreds of billions or trillions of US dollars.” And IMF (2001, p. 12, para. 24) notes in
like vein: “Measurements based on reported crimes underestimate the amount of financial system
abuse, while estimates based on underground activity clearly exaggerate it.”
2.2 COUNTRY-LEVEL ESTIMATES
Directly relevant to this paper are estimates of the total stock of assets stolen by the corrupt
leaders of various countries, which in an individual context, are often highly significant. Table 1,
based on Transparency International (2004), focuses on 10 of the notorious cases of the past few
decades. As the TI report cautions, the political leaders shown are not necessarily the 10 most
corrupt leaders of the period under consideration and “…the estimates of funds allegedly embezzled
are extremely approximate.” Indeed, the sources cited by TI (2004) are chiefly journalistic. The
only number coming from an official country source is that for Fujimori, from the Office of the
Special State Attorney for the Montesinos/Fujimori Case, Peru.
The third column of the table gives the estimated total stock of stolen assets, lower and upper
bound, in billions of U.S. dollars, based on TI (2004). The fourth column gives average annual
nominal GDP in dollars over the period the corrupt leader ruled. The final columns convert the
stock of stolen assets into an equivalent annual flow, expressed as a percentage of average annual
GDP, giving both the lower and upper bound for the annual rate of theft.12 According to the numbers
in table 1, Jean-Claude Duvalier allegedly stole the equivalent of 1.7 to 4.5 percent of Haitian GDP
for every year he was in power. The only other two kleptocrats to come close as a percentage of
GDP were Ferdinand Marcos and Sani Abacha.13
10 Stolen Asset Recovery (StAR) Initiative:
10. Politically Exposed Persons (PEPs) are defined in the Glossary to the Financial Action Task Force Forty Recommendations (FATF 2003,
p. 14) as “individuals who are or have been entrusted with prominent public functions in a foreign country, for example, Heads of State
or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations,
important political party officials. Business relationships with family members or close associates of PEPs involve reputational risks
similar to those with PEPs themselves. The definition is not intended to cover middle ranking or more junior individuals in the foregoing
categories.” The document is available at http://www.fatf-gafi.org/dataoecd/7/40/34849567.PDF
11. For details, see Baker (2005, pp. 165–73 and table 4.4, p. 172). Bottom-up or micro methods are also discussed in Reuter and Truman
(2004, pp. 19–23). They note that the estimates are subject to serious flaws.
12. For example, in the case of Suharto, the number of 0.6 is obtained as {[(15/31)/86.6] X 100}, where 31 is the number of years for which
Suharto ruled Indonesia.
13. The term “kleptocrat” is used to describe corrupt heads of state and other politically exposed persons (PEPs).
2.3 THE DEVELOPMENT IMPACT OF STAR
The first source of development impact or benefit from the StAR initiative would come from the asset
restitution itself, by releasing much-needed funds for development. However, this benefit will accrue
only if the recovered assets are used well, to support the attainment of the Millennium Development
Goals (MDGs) or invest in badly needed infrastructure, for example. As the country case studies in
section 5 will show, transparent and effective use of recovered assets cannot be taken for granted.
Consider these examples of the development impact that could result from restitution of stolen
assets. Table 2 contains unit cost estimates of key inputs in various health programs used by the
World Bank’s Africa Region in its operational work, as well as infrastructure projects. The cost
estimates suggest that every $100 million restituted to a developing country could fund:
• 3.3–10 million insecticide-treated bednets, which are twice as effective as regular bednets; or
• First-line treatment for over 600,000 people for one year for HIV/AIDS; or
• 50–100 million ACT treatments for malaria; or
• Full immunizations for 4 million children; or
• Approximately 250,000 water connections for households; or
• 240 kilometers of two-lane paved road.
Challenges, Opportunities, and Action Plan 11
TABLE 1. ESTIMATES OF FUNDS ALLEGEDLY EMBEZZLED FROM 9 COUNTRIES
Source: TI (2004) for first three columns; World Bank staff for the rest.
Note: The GDP calculations for Indonesia cover 1970–98, and for Zaire, 1970–97.
Political leader Country
Stolen
assets
($billion)
Average
annual
GDP
($billion)
Annual theft as
percent of average
nominal GDP
Lower
bound
Upper
bound
Mohamed Suharto (1967–98) Indonesia 15 to 35 86.6 0.6 1.3
Ferdinand Marcos (1972–86) Philippines 5 to 10 23.9 1.5 4.5
Mobutu Sese Seko (1965–97) Zaire 5 8.8 1.8 1.8
Sani Abacha (1993–98) Nigeria 2 to 5 27.1 1.5 3.7
Slobodan Milosevic (1989–2000) Serbia/Yugoslavia 1 12.7 0.7 0.7
Jean-Claude Duvalier (1971–86) Haiti 0.3 to 0.8 1.2 1.7 4.5
Alberto Fujimori (1990–2000) Peru 0.6 44.5 0.1 0.1
Pavlo Lazarenko (1996–97) Ukraine 0.114 to 0.2 46.7 0.2 0.4
Arnoldo Alemán (1997–2002) Nicaragua 0.1 3.4 0.6 0.6
Joseph Estrada (1998–2001) Philippines 0.07 to 0.08 77.6 0.04 0.04
Average % of GDP 0.9 1.8
12 Stolen Asset Recovery (StAR) Initiative:
The total benefit would far exceed that associated with the asset restitution itself, assuming that
the released funds are well spent. First, a StAR program that transmits the signal that there is
no safe haven for stolen assets will embody a powerful deterrent effect. Second, over the long
run, one would expect significant and lasting benefits, assuming the asset recovery effort is
accompanied by institutional reform.
The potential benefit from institutional reform is illustrated by the case of the Philippines.
Former President Marcos is estimated to have siphoned off between $5 billion and $10 billion by
the time he was forced out in 1986; he ruled the country as a dictator for the last 14 of the 21
years he was in power. Even taking the lower end of the range and assuming a modest nominal
interest of 5 percent, the $5 billion would have accumulated to over $13 billion by today, amounting
to approximately 22 percent of the country’s external debt at the end of 2006. The channels
whereby the money was allegedly stolen were diverse, including the takeover of private companies;
creation of monopolies for sugar, coconuts, shipping, construction, and the media; fraudulent
government loans; bribes from companies; and skimming off foreign loans and raiding the public
treasury. These channels suggest that the total costs in all likelihood far exceeded the $5 billion
to $10 billion estimate. These costs would include the degradation of public institutions, including
public financial management, the judiciary and financial sector supervision, a poor investment
climate, macroeconomic uncertainty, and a tainted and unstable financial system—all of which
are inimical to growth and poverty reduction and a stimulus to capital flight. This example highlights
the need to embed StAR in a broader strategy to improve public governance, as envisaged
in the WBG’s Governance and Anti-Corruption Strategy.
TABLE 2. COST ESTIMATES FOR BASIC HEALTH PROGRAMS AND INFRASTRUCTURE
Source: Items 1–4: Africa Region, the World Bank, drawn from estimates used in operational work. Items 5–6: Fay and Yepes (2003, table 6).
Note: These cost estimates are subject to high variance.
a. First-line anti-retroviral treatment, ART. Cost in rich countries is $1,000. Donor assistance factored in. Second-line treatment is much more expensive.
Item Estimated cost
1. Insecticide-treated bednets (ITNs) $10–30 per net
(cost varies depending upon taxes and internal transport costs)
2. HIV/AIDS treatment $150 per person per yeara
3. Malaria treatment • 10 cents per full dosage where chloroquine is effective (drugs
only)
• $1 to $2 per full dosage (artemisinine combination treatment,
ACT, drugs only)
4. Immunizations • $0.50 DPT (diphtheria, pertussis, and tetanus; three doses of
vaccine)
• $1.50 (vaccines for a fully immunized child, including DPT; BCG,
against a form of TB; tetanus; and measles. Total cost approx.
$25, including health service delivery)
5. Water $400 per connected household
6. Roads $410,000 per kilometer of two-lane paved road
Challenges, Opportunities, and Action Plan 13
Stolen assets can be hidden either at home or abroad. The focus of this paper is on the crossborder
component of public assets stolen from developing countries. Such assets are often
hidden in banks located in the financial centers of developed countries, although financial havens
have begun to appear in emerging market countries as well. Further, multinational
corporations from developed countries are often the source of bribes paid to public officials in
developing countries. The crimes of bribery, corruption, and money laundering are inextricably
linked; indeed, money laundering (ML), understood as hiding or obscuring the source, ownership,
control, and movement of assets, could be seen as the last link in a long chain of corrupt acts.
Money laundering seeks to lower the chances of detecting stolen funds, as well as breaking the
direct link between the kleptocrat or politically exposed person (PEP) and the stolen assets by
disguising ownership.
Money laundering is a diverse activity that can range from simple wire transactions to complex
mechanisms that rely on shell banks, undisclosed trusts, and hedge funds, often set up with
advisers from developed countries. The money laundering process is usually described as involving
three main stages: placement, layering, and integration.
• Placement is the process of separating the illicit funds from their illegal source and placing
them into one or more financial institutions, domestically or internationally.
• Layering is the process of separating criminal proceeds from their source by using layers of
financial transactions designed to hide the audit trail and provide anonymity.
• Integration schemes place the laundered proceeds back into the legitimate economy in such a
way that they appear to be normal business funds.
Figure 1 illustrates the money laundering process (see p. 14).
The FATF’s annual typologies reports describe in detail the variety and “creativity” behind ML
mechanisms.14 An interesting feature is that different types of crime tend to rely on different
How Stolen
Money is Hidden 3.
14. Given the speed with which mechanisms for ML evolve, the FATF has a Typologies Working Group, which brings together experts from
law enforcement and the regulatory authorities of FATF members to share information on the latest trends in ML and terrorist financing
and the effectiveness of counter-measures.
types of laundering mechanisms. Using reports from the FATF and the Egmont Group, Reuter and
Truman (2004) tabulate the laundering mechanism employed by each particular type of crime.15
They find that out of 580 cases analyzed, nearly 25 percent of them used wire transfers as the
laundering mechanism and 13 percent used front companies. They also find that, while drug trafficking
tends to use the full spectrum of alternatives, bribery and corruption rely heavily on wire
transfers and use significantly fewer typologies of laundering mechanisms. These differences
indicate that in order to reduce the frequency of crimes like bribery and corruption, special
attention should be given to wire transfers.16
14 Stolen Asset Recovery (StAR) Initiative:
15. The Egmont Group is an informal international gathering of financial intelligence units.
16. Although new mechanisms are likely to arise in response to counter-measures!
• Corruption and bribery
• Fraud
• Organized crime
• Drug and human trafficking
• Environmental crime
• Terrorism
• Other serious crime
• Initial introduction of
criminal proceeds into the
stream of commerce
• Most vulnerable stage of
money-laundering process
• Involves distancing the
money from its criminal
source:
– movement of money to
different accounts
– movement of money to
different countries
• Increasingly difficult
to detect
• Last stage in the laundering
process
• Occurs when the laundered
proceeds are distributed
back to the criminal
• Creates appearance
of legitimate wealth
Source: Levi, Dakolias, and Greenberg (2007, Part III).
1. PREDICATE CRIMES
4. INTEGRATION 3. LAYERING
2. PLACEMENT
FIGURE 1. THE MONEY LAUNDERING PROCESS
The preceding description of money laundering brings out the critical importance of cooperation
between developed countries, especially the financial center jurisdictions (which often serve as
havens for assets stolen by PEPs) and the developing countries from which assets are stolen. A
recurring and serious impediment to cooperation has been the difference in legal systems
between these two sets of countries.
In recent years, some progress has been made in terms of adopting new international instruments
governing proceeds of corruption and corrupt behavior on the part of legal entities (companies)
and individuals that pay the bribes:17
• Organization of American States Inter-American Convention Against Corruption (OAS
Convention), entered into force in 1997
• OECD Convention on Combating Bribery of Foreign Public Officials, entered into force in 1999
• Council of Europe’s Criminal Law Convention on Corruption, entered into force in 2002, and
the Civil Law Convention on Corruption, entered into force in 2003
• Convention of the European Union on the Fight Against Corruption, involving officials of the
European Communities or officials of member states, various protocols adopted in 1995, 1997,
1998, and 2003 (focused more narrowly on EU interests)
• African Union Convention on Preventing and Combating Corruption, adopted in Mozambique
in 2003. As of November 2004, only 4 of the 53 states had ratified the convention; it requires
15 ratifications to come into force.
• UN Convention Against Transnational Organized Crime, entered into force in 2003. So far, 147
countries have signed, with 126 ratifications/acceptances/approvals/accessions (UN Web site)
• FATF noncooperation list, to put pressure on countries to fight money laundering.18
In what is seen as a watershed, the UN Convention Against Corruption, UNCAC, entered into
force in December 2005 as the first legally binding global anti-corruption agreement. As of
November 2006, 140 countries had signed the Convention and 92 had ratified it. This Convention
Challenges, Opportunities, and Action Plan 15
Legal Framework:
The UN Convention
Against Corruption
(UNCAC) 4.
17. See Webb (2005).
18. See http://www.fatf-gafi.org/document/4/0,2340,en_32250379_32236992_33916420_1_1_1_1,00.html
is a strong affirmation that urgent, global action is needed on the problem of stolen assets; in
fact, a whole chapter is dedicated to asset recovery. Looking forward, UNCAC provides a stateof-
the-art unifying legal framework for StAR across developed and developing countries. UNCAC
contains 71 Articles (see box 1). Its legal architecture includes:19
• Prevention: This embraces wide-ranging measures directed at both the public and private sectors,
including the establishment of anti-corruption bodies and enhanced transparency in the
financing of elections, citizens’ rights, and the involvement of civil society in raising public
awareness of corruption and what can be done about it. It includes mandatory consideration
of establishing Financial Intelligence Units (FIUs) responsible for analyzing suspicious financial
transaction reports filed by financial institutions.
• Criminalization: The Convention requires countries to criminalize a wide range of acts, including
bribery, embezzlement of public funds, money laundering, and obstruction of justice. It also
recommends that other acts be criminalized, such as trading in influence.
• International cooperation: UNCAC promotes cooperation between law enforcement agencies,
the protection of witnesses, and the removal of bank secrecy as a barrier for prosecution. It
also provides for mutual legal assistance in gathering and transferring evidence for use in
court and to extradite offenders. Countries are also required to help trace, freeze, and confiscate
the proceeds of corruption.
• Asset recovery: “The return of assets…is a fundamental principle of this Convention, and
States Parties shall afford one another the widest measure of cooperation and assistance in
this regard.”
Box 1 summarizes key articles of UNCAC, as well as the impediments developing countries are
likely to face in availing of its provisions.
16 Stolen Asset Recovery (StAR) Initiative:
19. The Convention, along with a list of countries that have signed or ratified it, is available at http://www.unodc.org/pdf/crime/convention_
corruption/signing/Convention-e.pdf.
Challenges, Opportunities, and Action Plan 17
BOX 1. KEY ARTICLES OF UNCAC
Article 8 mandates that states parties shall promote integrity among their public officials, inter alia, by considering
the establishment of codes or standards of conduct.
Article 8, paragraph 5 obliges each state party to endeavor, in order to prevent the embezzlement of public
funds, to establish measures requiring public officials to declare their assets, benefits, and outside activities
from which a conflict of interest may result with respect to their functions.
Article 9 provides that states parties shall establish transparent, competitive, and objective systems of
procurement and shall promote transparency and accountability in the management of public finances.
Article 12 requires states parties to take measures to prevent corruption and to enhance accounting and
auditing standards in the private sector.
Article 14 mandates the establishment of domestic regulatory and supervisory regimes for banks and nonbank
financial institutions in order to combat money laundering, including through international cooperation, and
recommends measures to monitor the cross-border movement of cash and monetary instruments in order to
prevent the transfer of illicit assets abroad.
Article 23 mandates the criminalization of the laundering of proceeds of crime.
Article 26 requires states parties to establish the criminal, civil, or administrative liability of legal persons for
participation in the offences established in accordance with the Convention.
Article 31 mandates the establishment of a basic regime for domestic freezing and confiscation of assets as
a prerequisite for international cooperation and the return of assets.
Article 40 requires states parties to ensure that their bank secrecy laws do not obstruct domestic criminal
investigations of offences established in accordance with the Convention.
Article 43 obligates states parties to extend the widest possible cooperation to one another in the investigation
and prosecution of offences defined in the Convention. Thus the Convention requires that when requested, states
parties must take measures to identify, trace, and freeze or seize proceeds of crime, property, equipment, or
other instrumentalities.
Article 46 provides that states parties shall afford one another the widest measure of mutual legal assistance
in investigations, prosecutions, and judicial proceedings, including for the purpose of the return of assets.
Article 51 states: “The return of assets [derived from corruption] is a fundamental principle of [UNCAC] and
State Parties shall afford one another the widest measure of cooperation and assistance in this regard.”
Article 52 requires states to take reasonable steps to determine the identity of the beneficial owners of funds
deposited into high value accounts and to conduct enhanced scrutiny of accounts sought or maintained by or
on behalf of individuals who are, or have been, entrusted with prominent public functions and their family
members and close associates (essentially, due diligence with regard to PEPs).
Article 55 requires a state party to enforce a confiscation order from another state party or begin its own
proceedings to obtain a domestic order of confiscation and, if granted, give effect to it.
Article 57 requires the return of confiscated property to a requesting state party—in cases of public fund
embezzlement or laundering of embezzled funds—on the basis of final judgment in the requesting state;
however, this condition can be waived by the requested state.
Article 57 also requires the return of confiscated property to a requested state in cases of other offences
(including money laundering) covered by the Convention when confiscation was properly executed on the
basis of a final judgment—which may be waived—and upon reasonable establishment of prior ownership by the
requesting state or recognition of damage by the requested state (Art. 57, para. 3b).
Article 57, paragraph 5 provides that states parties may give special consideration to bilateral agreements on
a case-by-case basis to address the final disposal of confiscated property.
Source: UN Convention Against Corruption, adopted by General Assembly resolution 58/4 of October 31, 2003.
It came into force on December 14, 2005.
Three country case studies on Nigeria, Peru, and the Philippines were prepared on stolen asset
recovery as part of the background for this report. Drawing upon these case studies, this section
summarizes the key findings and challenges related to StAR. The reason for selecting these
countries from the several that have suffered the consequences of grand corruption is two-fold:
the relatively easy availability of documentation, and some success in recovering stolen assets.
The section starts by providing a synopsis of each country’s experience. It then presents the
main findings organized around three topics: theft and spiriting away of assets; asset recovery
efforts; and monitoring use of recovered assets. The section concludes by defining the challenges
flowing from the findings.
5.1 SYNOPSIS OF COUNTRY CASE STUDIES
5.1.a Nigeria20
General Sani Abacha, who had governed Nigeria for five years from 1993 to 1998, died on June
8, 1998 of a reported heart attack. He is estimated to have looted from $3 billion to $5 billion
over the five years of his rule.21 His death prompted the opening of investigations, first by General
Abdusalami Abubakar and then by President Olusegun Obasanjo, into Abacha’s criminal dealings,
culminating in campaigns to recover the assets stolen by him and his associates and hidden both
within and especially outside the country.
Abacha is alleged to have used four methods for plundering public assets: outright theft from the
public treasury through the central bank; inflation of the value of public contracts; extortion of
bribes from contractors; and fraudulent transactions. The corruptly acquired proceeds were laundered
through a complex web of banks and front companies in several countries and localities, but
principally Nigeria, the UK, Switzerland, Luxembourg, Liechtenstein, Jersey, and the Bahamas.
18 Stolen Asset Recovery (StAR) Initiative:
Findings from
Country Case Studies 5.
20. Based on a case study by Ngozi Okonjo-Iweala, commissioned as an analytical background paper in support of the StAR Initiative.
21. Table 1, based on TI (2004), lists the range as $2 billion to $5 billion.
The chronology of events leading to eventual repatriation was as follows:
• In 1998 a Special Police Investigation was launched to investigate Abacha’s theft.
• On May 26, 1999, General Abubakar issued Decree No. 53, which facilitated the domestic recovery
of $800 million in cash and assets from the Abacha family and associates.
• President Obasanjo, who assumed office in May 1999, redoubled the effort to find more of the
stolen assets. In September 1999, the Nigerian government engaged a Swiss legal firm,
Monfrini and Partners, to assist with tracing and recovering of monies held abroad.
• Swiss authorities accepted a request for Mutual Legal Assistance on December 1999, leading
to the issuance of a general freezing order.
• Before the funds could be repatriated, however, Swiss law required Nigeria to present the Swiss
authorities with a final forfeiture judgment reached in the Nigerian courts. This proved legally
and politically daunting. In a landmark ruling rendered in 2004, Monfrini and Partners got
around this hurdle by arguing successfully that, since there was adequate proof of the criminal
origin of the Abacha funds, Swiss authorities could waive the final forfeiture requirement.
• It took Nigeria five years to obtain a repatriation decision from the Swiss authorities due to
numerous appeals brought by the Abachas, who employed large numbers of lawyers to block
or slow down the case.
• After a series of negotiations, which led to the selection of the World Bank as a bona fide third
party for the monitoring of recovered assets, repatriation finally took place in September and
November 2005 and early 2006, for a total of $505.5 million.
• With a grant from the Swiss government, the World Bank mobilized Nigerian civil society
organizations to participate in the review and analysis of the use of the looted funds. The
review found that the funds had generally been used to increase budget spending in support
of the MDG areas, as promised.
5.1.b Peru22
During the 10 years President Alberto Fujimori was in office (1990–2000), the intelligence police
chief, Vladimiro Montesinos, methodically bribed judges, politicians, and the news media. On
September 14 2000, cable Channel N broadcast a video showing Montesinos bribing
Congressman Alex Kuori with $15,000. This event was followed by investigations that led to
Fujimori’s resignation and uncovered a network of corruption that had taken control of the country,
undermining the institutional governance systems that existed in the country (the Constitution,
elections, rule of law, free press, independent judiciary). During Fujimori’s administration, more
than $2 billion was allegedly stolen from the state.23 After his resignation, the interim government
led by President Valentín Paniagua redesigned the legal and institutional framework. A new
Anti-corruption System was put in place, which included the creation of prosecution
agencies and anti-corruption courts, as well as a series of innovations to the judicial system:
the establishment of a negotiated justice system (plea bargaining), special criminal proceedings,
and procedural instruments.
Challenges, Opportunities, and Action Plan 19
22. Based on a case study by Victor A. Dumas, commissioned as an analytical background paper in support of the StAR Initiative.
23. Table 1, based on TI (2004), suggests $600 million as being looted by Fujimori, citing as its source the Office of the Special State
Attorney for the Montesinos/Fujimori case, Peru.
The main source of theft by Montesinos and his cronies was through the extortion of bribes in
awarding national defense procurement contracts. These bribes were hidden from the public
based on a legal provision that allowed the executive to deny disclosure of the bidding process
on the grounds of “national security.” For laundering their proceeds, Montesinos and his cronies
used shell companies based in tax haven jurisdictions that were managed by trustees.
The main events during the Peruvian asset recovery experience were as follows:
• In November 2000, two months after the scandal broke and with Montesinos on the loose,
Swiss authorities froze $48 million linked to him and his cronies.
• That same month, Fujimori appointed a Special Prosecutor to investigate the Montesinos affair.
Fujimori then proceeded to leave the country and seek asylum in Japan.
• Between December 2000 and January 2001, the Peruvian government introduced the aforementioned
legislative and judicial reforms, which proved fundamental to the advancement of
investigations, the dismantling of the prevailing corruption network, and the repatriation of
part of the stolen assets.
• In March 2001, the Cayman Islands froze nearly $33 million, which was repatriated to Peru in
August 2001.
• In June 2001, Montesinos was captured in Caracas and extradited to Peru.
• In August 2002, after almost two years of investigation and litigation, Swiss authorities
returned $77.5 million to the Peruvian government.
• In January 2004, after the signature of a bilateral agreement, the United States repatriated to
Peru $20 million in funds that it forfeited from Montesinos and one of his associates.
• All the repatriated assets went into a special fund called FEDADOI, which was managed by a
board of five members appointed from different government ministries.
• Although guidelines and detailed procedures were defined to ensure the transparent use of
the nearly $185 million in recovered assets, these resources ended up mainly supplementing
the budgets of the institutions that had a member on the FEDADOI board.
5.1.c The Philippines24
Ferdinand Marcos started accumulating his ill-gotten wealth in 1965, when he was first elected
president. He was reelected four years later but declared Martial Law in September 1972, before
his second term was completed. The Martial Law regime continued until February 1986, when
Marcos was toppled by the so-called peaceful “People Power Revolution”. He is estimated to have
siphoned off between $5 and $10 billion.
This ill-gotten wealth was accumulated through six channels: outright takeover of large private
enterprises; creation of state-owned monopolies in vital sectors of the economy; awarding
government loans to private individuals acting as fronts for Marcos or his cronies; direct raiding
of the public treasury and government financial institutions; kickbacks and commissions from
20 Stolen Asset Recovery (StAR) Initiative:
24. Based on a case study by Leonor Briones, commissioned as an analytical background paper in support of the StAR Initiative.
firms working in the Philippines; and skimming off foreign aid and other forms of international
assistance. The proceeds of corruption were laundered through the use of shell corporations,
which invested the funds in real estate inside the United States, or by depositing the funds in various
domestic and offshore banks under pseudonyms, in numbered accounts or accounts with code names.
The asset recovery efforts of the Philippines extended over 18 years before achieving some
success. The following were the landmark events:25
• February 28, 1986—The Presidential Commission on Good Government (PCGG) was launched
and made responsible for recovering assets stolen by Marcos. Informal representations were
made to the U.S. and Swiss courts to freeze Marcos assets abroad.
• March 25, 1986—Swiss authorities froze Marcos assets in Switzerland.
• April 7, 1986—PCGG filed a request for mutual assistance with the Swiss Federal Police
Department under the provisions of the International Mutual Assistance on Criminal Matters
Act (IMAC). This was not accepted, on the grounds of being “indeterminate and generic.”
• December 21, 1990—The Swiss Federal Supreme Court authorized the transfer of Swiss banking
documents on Marcos deposits in Geneva, Zurich, and Fribourg to the Philippine government.
It gave the Philippine government one year in which to file a case for the forfeiture of the
deposits in Philippine courts, failing which the freeze would be lifted.
• December 17, 1991—PCGG filed civil case 141 in Sandiganbayan,26 seeking to recover the Marcos
assets.
• August 10, 1995—PCGG filed with the District Attorney in Zurich a Petition for Additional
Request for Mutual Assistance asking for asset repatriation even before the rendering of a
final judgment in the Philippines. It also showed that the Marcos assets in Switzerland were a
product of embezzlement, fraud, and the plunder of the public treasury.
• August 21, 1995—Examining Magistrate Peter Cosandey granted the request and ordered all
Marcos-related securities and accounts transferred to an escrow account with the Philippine
National Bank (PNB). However, the Zurich Superior Court of Appeals denied the Order.
• December 10, 1997—The Swiss Federal Supreme Court upheld Cosandey’s Order. In April 1998,
the Swiss deposits were transferred to an escrow account in PNB.
• July 15, 2003—The Philippine Supreme Court issued a forfeiture decision in respect of the
Marcos Swiss deposits.
• February 4, 2004—PCGG remitted to the Bureau of the Treasury the amount of $624 million
pertaining to the deposits.
Challenges, Opportunities, and Action Plan 21
25. Drawing upon Marcelo (2005) and the statement by the Ombudsman of the Republic of the Philippines delivered on December 12,
2006 to the first meeting of the State Parties to UNCAC in Amman, Jordan.
26. This is a special court in the Philippines that has jurisdiction over criminal and civil cases involving graft, corrupt practices, and other
offenses committed by public officers and employees.
5.2 ASSET THEFT FACILITATED BY LACK OF TRANSPARENCY AND LOW
PUBLIC ACCOUNTABILITY
Six main findings are presented in this section. These are supported by the evidence provided by
the background country case studies.
Finding 1: Lack of transparency and low public accountability facilitate the looting of public
assets. Typically, adherence to principles of open, accountable government tends to be weak,
with deficiencies in the system of checks and balances and key public institutions, limited
freedom of civil society organizations to monitor public activity, and low respect for—or outright
flouting of—the rule of law.
It is not a coincidence that at the height of the looting, all three countries had governmental systems
in place that lacked transparency and public accountability. This first finding stresses the importance
of promoting open, accountable government, building institutional capacity, and implementing a
system of checks and balances in developing countries.
Finding 2: Despite high levels of corruption, small steps toward accountability and transparency
may significantly reduce the theft of public assets.
Table 1 (page 11) shows that while Marcos looted between 1.5 and 4.5 percent of annual GDP, and
while Abacha stole between 1.5 and 3.7 percent, Fujimori/Montesinos were able to steal only
about 0.1 percent of GDP for every year in power.27 A closer look at how assets were stolen reveals
important differences between Marcos and Abacha, on the one hand, and Montesinos/Fujimori on
the other. Marcos and Abacha unabashedly raided the public treasury by having truckloads of foreign
currency stolen from the central bank. They also had a significantly smaller network of cronies
than did Montesinos/Fujimori, mainly because the complete lack of accountability reduced the
need to get others “on board” in order to accomplish their criminal purposes. The Peru case
shows how large amounts had to be “invested” by Montesinos and Fujimori in bribing judges and
media sources, in order to accomplish their looting.28 The Peru case study also shows that the
processes used by Montesinos/Fujimori to spirit away assets were far more sophisticated than
moving truckloads of cash or wiring funds out of the central bank. In Peru, most of the theft was
made through the extortion of bribes from public contractors, particularly regarding the purchase
of materiel for the armed forces and police. This stealing pattern was made possible by
classifying such purchases as a state secret; this made it difficult for Congress or any other public
institution to exercise oversight.
22 Stolen Asset Recovery (StAR) Initiative:
27. The magnitude of the theft from the Philippines shows that grand corruption, while more likely in countries rich in natural resources,
is by no means confined to such countries.
28. This raises the question of whether the $600 million allegedly looted by Fujimori was net of bribes paid to others. There is no information
on this. If net, then actual theft would have been higher.
Challenges, Opportunities, and Action Plan 23
In short, established processes of open and accountable government, a system of checks and
balances, public accountability, and strong institutional capacity can keep corrupt leaders in
check and should be the first line of defense against asset theft.
Finding 3: The main techniques used to launder the proceeds of corruption include wire
transfers, the use of shell corporations in bank secrecy jurisdictions, and direct deposits in
the form of cash or bearer instruments.
This narrow spectrum of laundering techniques, as opposed to the broader one employed in
other illegal activities like drug trafficking, suggests that concentrating efforts on monitoring a
specific set of transactions and related institutions might have a significant deterrent effect on
corrupt leaders.29
5.3 DOMESTIC POLITICAL WILL AND INTERNATIONAL COOPERATION KEY
TO ASSET RECOVERY
Any successful asset recovery effort must have its origin in the domestic political will to go after
the stolen assets as an integral part of a process of basic governance reform.
Finding 4: Strong domestic political will to embark on the long and winding road to asset
recovery is fundamental to successful asset recovery. The willingness and ability to introduce
legislative reforms and prosecute former corrupt officials, despite the power and influence
they might still wield, are unambiguous signals that the government is serious about
asset recovery.
The three case studies analyzed were selected because they are to some extent success stories
on stolen asset recovery. It would be interesting to compare their experience with that of countries
that suffered a different fate (such as Kenya’s so far unsuccessful effort to recover funds allegedly
embezzled by Daniel Arap Moi).30 The Government of the Philippines sustained an effort over 18
years to recover part of Marcos’s loot. The case studies on Abacha and Fujimori/Montesinos
stress the importance of introducing domestic reforms that can boost domestic asset recovery
and/or provide overseas investigators with a minimum critical amount of information to launch
the process of asset repatriation. The introduction of judicial reforms in Peru like the Negotiated
Justice System, and General Abubakar’s Decree No. 53 of 1999 in Nigeria that led to the domestic
confiscation of nearly $800 million in assets stolen by Abacha and his cronies, underline this
important point.31
29. However, new techniques are constantly evolving in response to counter-measures and as financial technology becomes more sophisticated.
30. Scher (2005) highlights the lack of domestic political will as one of the reasons for Kenya’s unsuccessful attempt to recover assets
allegedly stolen by Moi.
31. To the extent that such measures are ad hoc, they should be seen only as the first step in more basic institutional and legal reform.
Finding 5: Little can be achieved without the effective cooperation and goodwill of countries
where proceeds of corruption are hidden.
The importance of international cooperation becomes evident when contrasting the eighteenyear
Philippine saga in recovering Marcos’s loot with the three to five years it took Peru and
Nigeria to recover assets stolen by Montesinos and Abacha, respectively. The fact that Swiss
authorities issued a general freezing order against Abacha with only a limited amount of initial
evidence, and their decision to investigate Montesinos and freeze $48 million on November 3,
2000, even before Peru formally requested it, illustrates a positive shift in the attitude toward
international cooperation in stolen asset restitution.
5.4 MONITORING USE OF RECOVERED ASSETS IMPEDED BY WEAK
SYSTEMS AND FUNGIBILITY
The three country case studies exhibit mixed results in monitoring the use of recovered assets.
Box 2 highlights some of the features of each country’s monitoring framework.
In Nigeria, monitoring followed sound practice but experienced difficulties in the presence of
constraints. Recovered assets in the Philippines were suspected of being been poorly used. In
Peru, while the spending superficially adhered to standard budgetary procedures, the allocation
was decided not by Congress, but by a five-member board susceptible to special interests.
The experiences of these three countries illustrate one major point:
Finding 6: To varying degree, the monitoring program in each case study country fell short,
either because sound international practice in public financial management was not followed
or systems were weak.
Adhering to sound practice in public financial management is complicated because resources are
fungible and systems tend to be weak; but above all because tracking systems tend to be perceived
as intrusive and therefore require political will to implement.
Monitoring the use of recovered assets in the context of StAR and UNCAC can take place only on
a voluntary basis; the unilateral imposition of measures regarding the monitoring of funds would
be a violation of UNCAC. The international legal framework, as well as the technical and political
difficulties inherent in public financial management, is likely to make the monitoring of the use
of funds in the context of StAR a difficult challenge.
24 Stolen Asset Recovery (StAR) Initiative:
Challenges, Opportunities, and Action Plan 25
BOX 2. MONITORING THE USE OF RECOVERED ASSETS: EXPERIENCE OF NIGERIA, PERU,
AND THE PHILIPPINES
Nigeria
Nigeria received some $500 million in 2005 from Switzerland as part of the restitution of assets stolen by
Sani Abacha and kept in Swiss banks. The stated purpose for the money was for incremental funding of MDGrelated
activities in the budget (such as health, education, and rural infrastructure programs) within the context
of the government’s new National Economic Empowerment and Development strategy (NEEDs). Nigeria followed
good practice principles in using these resources as general revenues, and expending them through its usual
public financial processes. However, the funds were originally expected to be received in 2004 and were therefore
included in the 2004 budget. With the delay in restitution, the incremental 2004 spending was eventually
financed through new debt; the monies were received only in 2005. This caused complications in tracking
spending. Weaknesses of the Nigerian public financial management system also made tracking of spending
difficult, including shortcomings in Nigeria’s public audit system that should itself have monitored fund use.
Nevertheless, a World Bank Public Expenditure Review found that the funds had generally been used in accordance
with stated policy. Nigeria has since adopted a virtual poverty fund approach for monitoring the use of funds
resulting from debt relief in support of the MDGs, where existing budget classification systems are used
to identify the specific activities receiving additional funds. This enables total spending on those activities,
from all sources, to be monitored.
Peru
Peru recovered approximately $180 million over a five-year period beginning in 2001. On October 28, 2001,
the government set up the Fund for Special Administration of Money Obtained Illicitly to the Detriment of
the State (FEDADOI). The goal of the fund was to provide a framework that would allow the appropriate and
transparent management of the proceeds of corruption recovered by the state. While money from the fund
went through normal budgetary channels, the specific allocations were determined by board members of
FEDADOI. Spending items were not clearly set out in advance and the funds were used to supplement the annual
fiscal budget of agencies that had an appointed member on the FEDADOI board. Questionable spending allocations
resulted. For example, the Interior Ministry received over $9 million in 2004 that were used for the
payment of vacations for both active and retired police personnel outstanding from fiscal years 1995 and
1996.
The Philippines
The largest single cash remittance from looted Marcos funds was made in February 2004, when $624 million
was taken out of escrow and remitted to the Philippines Treasury. All receipts from assets recovered went
through an off-budget fund called the “Agrarian Reform Fund,” to be spent on agrarian reform programs.
In October 2006, the Commission on Audit noted that a significant portion of the recovered assets were used
to finance excessive, unnecessary expenses unlikely to benefit the agrarian reform beneficiaries. Monies were
also found to have been used to procure items at inflated prices, while many spending items were not among
the approved priority projects.
5.5 CHALLENGES AHEAD
This section outlines the challenges related to the above findings. The first challenge is based on
Findings 1 and 2, on the importance of open and accountable public processes and strong
public institutions.
Challenge 1: Developing countries seeking to recover stolen assets need to strengthen their
public institutions and promote a system of checks and balances that increases accountability
and transparency. The international donor community should assist these countries in the
development of open and accountable government.
While responding to this challenge is primarily the responsibility of the developing countries
themselves, the international community could play an important role in helping countries that
genuinely want to get out of the corruption trap. The WBG’s GAC platform and UNODC’s global
efforts fit squarely into this agenda.
It stands to reason that stolen assets are most vulnerable to detection during the initial placement
overseas as part of the laundering process (see figure 1). This assumption, combined with
Finding 3 on the favored techniques for laundering stolen assets, suggests that financial centers
in developed countries need to speed up the implementation of guidelines that would increase
the chances of detection during this initial stage and in applying sanctions when these guidelines
are not followed. This leads to the second challenge:
Challenge 2: Jurisdictions need to implement requirements on due diligence (including “know
your customer” norms) and should comply with the FATF 40 +9 Recommendations on Anti-
Money Laundering and Combating the Financing of Terrorism, particularly in the case of
Politically Exposed Persons (PEPs), as well as transactions involving wire transfers.32
Domestic political will, while necessary for success in StAR, may not suffice. Countries that suffer
from widespread corruption and the looting of assets are also likely to be less able to respond
rapidly when such crimes are detected because of the weakening of public institutions. The lack
of resources and institutional capacity to conduct investigations, file requests for mutual legal
assistance in receiving countries, and pay the onerous fees of international law firms erect barriers
to asset recovery. The next challenge focuses on developing assistance programs for such countries.
26 Stolen Asset Recovery (StAR) Initiative:
32. The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of national
and international policies to combat money laundering and terrorist financing. The FATF Standards are comprised of the Forty
Recommendations on Money Laundering and the Nine Special Recommendations on Terrorist Financing. For more information see
http://www.fatf-gafi.org/pages/0,3417,en_32250379_32235720_1_1_1_1_1,00.html
Challenge 3: Effective and efficient mechanisms are needed that will enable developing
countries to quickly respond to asset theft and provide them with the necessary technical
assistance in this complex process.
Many developing countries lack the capacity to prepare indictments, collect, preserve and present
evidence, properly adjudicate cases and obtain convictions, as well as trace the proceeds of corruption
and obtain valid freezing and confiscation orders. More broadly, an important roadblock exists
because of the limited capacity of the law enforcement, prosecutorial, and judicial authorities—in
short, the criminal justice system—to effectively prevent asset looting and recover stolen assets
in a manner that meets internationally accepted legal standards.
The related challenge is to capitalize on the attention StAR is receiving in the international community
and push for the ratification and implementation of UNCAC. Responding to this challenge
will go a long way not only in recovering assets but also in deterring asset theft in the first place.
Challenge 4: All countries need to be persuaded to ratify UNCAC. State parties to the
Convention need to domesticate UNCAC and monitor its implementation.
Asset recovery entails an extensive list of complications and difficulties that include completing
investigations in two different jurisdictions, legal differences between common law and civil law
countries, complying with confiscation procedures in the law, burden of proof and dual criminality
conditions, to name just a few. UNCAC is a big step forward in addressing many of these issues.
If countries adhere to UNCAC and domesticate its provisions while also funding agencies in
charge of prosecuting and investigating asset recovery cases, then corrupt leaders are much less
likely to find a safe haven for the proceeds of their theft.
Half the G-8 countries have not yet ratified the Convention, nor have some of the most important
financial centers. Further, UNCAC does not yet have a monitoring mechanism; the Conference of
State Parties held in Amman in December 2006 agreed on a self-assessment mechanism that is
nonintrusive, does not produce any form of ranking, and complements other existing international
and regional review mechanisms. This review method is less stringent than those established in
other multilateral agreements like the Council of Europe Criminal Law Convention on Corruption
or those included in the OECD Convention against Bribery.
Challenge 5: A framework needs to be developed for monitoring the use of recovered assets
that adheres to sound principles of pubic financial management, conforms to UNCAC, and
offers countries a menu of options tailored to their specific institutional constraints and/or
any terms set down in the treaties between the restituting and recipient countries.
Challenges, Opportunities, and Action Plan 27
The following basic principles would need to be reflected in formulating a framework:33
• All public expenditures need to be monitored, not just expenditures financed with recovered
assets. Budget resources are fungible, so in practice it may be difficult to show that recovered
assets have been used for additional spending in the areas laid out in a government’s medium-term
spending plan.34 Measuring only the spending resulting from recovered assets will not, therefore,
provide insights into the government’s efforts to redirect spending into priority areas as
a result of repatriating assets. In order to achieve the enduring value of a more transparent,
robust public finance system, the focus of improvements in the public financial management
system should be comprehensive, extending beyond recovered assets.
• Ring-fencing of recovered funds to separate these from regular budgetary operations may not
be effective, and such parallel public finance systems could weaken mainstream systems. The
Paris Declaration on Aid Effectiveness, for example, recognizes the importance of strengthening
overall country public financial management (PFM) systems, not simply those handling donor
funds. Strengthening a country’s overall PFM system helps assure that all public funds are
used as intended, regardless of source. Strengthening country PFM systems will help prevent,
detect, and deter the theft of public assets, in addition to tracking public expenditures.
If country public financial management systems are weak, the decision should not be to go with
a parallel system but to instead use some combination of country and parallel systems. Over
time, this combination will improve country systems. This would be consistent with the concept
of using country systems for donor funds. The challenge is to identify specific weaknesses and
then develop supplemental measures that strengthen country systems and provide some assurance
of proper functioning. In cases where budget systems are particularly weak, short-term adaptations
to existing budget systems may be made to produce the requisite data on the spending items
desired for use by recovered assets. A virtual poverty fund is an example of such a short-term
bridging mechanism (such as in Nigeria). The existing budget system is used to tag and track
spending items without setting up of separate institutional arrangements.35 Appendix A provides
options for supplementing PFM systems where specific aspects are deemed weak. Box 3 details
the steps involved in monitoring public assets.
28 Stolen Asset Recovery (StAR) Initiative:
33. See also Veglio and Siegenthaler (2007).
34. For example, the government may reduce its own spending in the areas identified as uses for recovered assets.
35. Other examples of bridging mechanisms include controlling the use of cash releases for certain spending items rather than providing
global allocations to ministries, and simply improving coverage of what is being currently reported in the budget.
Challenges, Opportunities, and Action Plan 29
BOX 3. STEPS IN MONITORING PUBLIC ASSETS
There are some basic principles that should be followed for ALL assets, including looted assets. These are:
• Officially (publicly) recording receipt of the asset (amount, value, date of receipt, date of availability for use)
• Safeguarding of the asset once received
• Official declaration of intended use of the asset (specific uses, amounts, time period of availability,
entity responsible for executing the activity and expending the asset and accountable for results),
customarily through the approved budget
• Official recording of actual expenditure (amount, object of expenditure, date)
• Official reporting of actual expenditure (amount, object of expenditure, date) and results achieved
• Official audit of financial statements and results to verify accuracy of reporting, identify weaknesses,
and assure that appropriate processes were followed (procurement, hiring, accounting, and the like)
• Official response to material weaknesses identified in audit findings (corrective actions to be taken and
actually taken).
Source: Authors.
Preliminary consultations with high-ranking officials in the finance and development ministries
of developed countries, including the G-8, have indicated strong support for the StAR initiative.
African countries have been concerned about the restitution of stolen assets at least since 1999,
when Nigeria’s President Obasanjo’s address to the UN General Assembly included a plea for an
international convention for the repatriation of Africa’s wealth illicitly appropriated and kept
abroad.36 At the 2007 IMF-World Bank Spring meetings, during a side-event introducing the StAR
initiative, representatives of developed and developing countries and multilateral development
banks present there expressed unanimous support for the initiative. The consensus was that
StAR is an idea whose time has come and that every country or international agency has to play
its part in ensuring the initiative’s success; indeed, a collective global effort is essential for
success and unequivocally transmitting the signal that corruption does not pay. In this sense,
StAR was described as the “missing link” in an effective anti-corruption effort. By putting corrupt
leaders on notice that stolen assets will be traced, seized, confiscated, and returned to the victim
country, StAR would constitute a formidable deterrent to corruption.
The Action Plan presented next reflects feedback from various stakeholders on the essential
ingredients for a successful effort, which to a large extent overlap with the insights and challenges
emerging from the country case studies presented above:
• Political will, legal reform, and enhancement of investigative capacity are needed in developed
countries, not just the developing countries. The former should see stolen asset recovery as a
development issue (because it is a signal against corruption while also providing a source of
development funds).
• Time is of the essence. For most developing countries, prolonging the process of asset recovery
will take a toll on credibility and give kleptocrats an excuse to claim victimization. A prompt,
proactive response is needed from countries where stolen assets are stashed.
30 Stolen Asset Recovery (StAR) Initiative:
An Action Plan 6.
36. Cited in the 2001 Nyanga Declaration mentioned above.
Challenges, Opportunities, and Action Plan 31
• A global partnership must be formed to ensure that new financial havens do not replace
the existing ones and that developing countries receive the legal support they need.
• Civil society and the media in developing countries should be brought into the process of
monitoring the use of recovered assets, where feasible.
6.1 ACTION PLAN MATRIX
At the simplest level, there are two ways to help developing countries recover stolen assets. One
is to lower the hurdles they face when seeking the return of assets located in other jurisdictions.
The second is to strengthen laws and institutions governing asset recovery in these countries.
Thus actions can be grouped under two headings: reducing barriers in developed countries to
recover stolen assets; and strengthening the ability of developing countries to recover them. In
addition, to ensure transparency, monitoring the use of recovered assets on a voluntary basis,
with the agreement of all the countries concerned, is likely to be needed. Table 3 presents a
matrix of recommended relevant actions under the two headings that could be taken by developed
(G-8 and OECD) and developing countries, other stakeholders, and UNODC and the WBG. It
reflects feedback from various consultations and the challenges emerging from the country case
studies outlined above.
The following points are worth noting about the Action Plan: first, a successful StAR effort
requires that the G-8 and OECD lead by example, which would include ratification of UNCAC by
those countries that have not already done so and actively facilitating requests for mutual legal
assistance from developing countries regarding stolen asset recovery. Second, given UNCAC’s
position as the state-of-the-art international legal framework underpinning asset recovery (see
section 4), ratification and implementation of UNCAC by all countries is given special prominence.
Third, the critical need for concerted global action by all countries and relevant agencies is
emphasized by including a role for financial system regulators and the nonfinancial sector.
Fourth, the last row of the table focuses on joint actions by UNODC and the WBG, which fall into
three parts: assistance for individual country-level efforts; using their convening power to advocate
for stolen assets recovery; and sponsoring a forum for sharing experiences among developing
countries in stolen asset recovery.
In addition to what is presented in the table, there are several multilateral and bilateral agencies
that are already playing an important role directly or indirectly in stolen asset recovery. The next
section discusses specific actions that the UNODC and WBG need to take in order to benefit from
the work and expertise of these agencies, including actively involving them in the effort. The next
section also discusses specific actions—such as on monitoring the use of recovered funds—that may
draw upon the comparative advantage of one of these institutions: the WBG, in this particular case.
32 Stolen Asset Recovery (StAR) Initiative:
TABLE 3. ACTION PLAN MATRIX
Reduce barriers in
developed countries
Strengthen capacity of
developing countries
G-8 and OECD • Lead by example and play strong advocacy role
in the global arena
• Ratify and implement UNCAC
• Monitor progress on 2004 G-8 Justice and
Home Affairs Ministers’ Declaration on recovering
proceeds of corruption
• Proactively assist developing countries in recovering
stolen assets in whatever form (including
bank accounts, stocks, and real estate)
• Comply with all FATF recommendations, especially
those on politically exposed persons
(PEPs) and Know Your Customer (KYC) norms
• Put pressure on emerging market countries
serving as havens for stolen assets to ratify and
implement UNCAC.
• Consider adopting measures to permit nonconviction
based confiscation, enforcement of
foreign confiscation judgments and other effective
mechanisms to assist in asset recovery
• Fund programs or directly provide developing
countries with technical assistance that would
enhance the capacity of the criminal justice
system—law enforcement, prosecutorial, and
judicial authorities—to effectively prevent
asset looting and recover the proceeds of
corruption in accordance with internationally
accepted legal standards.
Developing countries • Ensure complete ratification and implementation
of UNCAC
• Fund, staff, and ensure independence of
Financial Intelligence Units (FIUs)
• Comply with all FATF recommendations,
especially those on politically exposed persons
(PEPs) and Know Your Customer (KYC) norms
• Strengthen FIUs and capacity to thwart
money laundering
• Develop capacity to respond to and file international
mutual legal assistance requests
• Adopt and implement effective confiscation
measures, including non-conviction based
confiscation legislation
• Enhance transparency and accountability of
public financial management (PFM) systems
• Create and strengthen national anticorruption
agencies
Financial system
regulating agencies
• Enforce penalties for financial institutions doing
business with corrupt individuals and PEPs
without due diligence
• Comply with FATF 40+9 recommendations
• Establish clear guidelines, regarding the treatment
of PEPs
• Strengthen anti-money laundering regimes by
enforcing KYC, record keeping, and reporting
requirements, especially in relation to PEPs.
Nonfinancial private
sector and NGOs
• Provide training for specialized units in
developing countries in asset recovery
• Engage civil society and media to help in
monitoring use of recovered assets.
UNODC and World
Bank Group
• Form Friends of StAR group composed of influential individuals from developed
and developing countries to monitor progress and advise on the StAR initiative
• Sponsor forum for sharing worldwide experience in stolen asset recovery
• Provide technical assistance to five to six developing countries on implementing UNCAC
• Encourage receiving countries to incorporate civil society and media in monitoring.
6.2 UNODC-WBG JOINT PROGRAM
The UNODC and WBG are working to formulate a joint effort on stolen asset recovery within the
framework of global collective action envisaged in the above matrix. The WBG role would be
defined by its mandate under the Governance and Anti-Corruption strategy approved by the
Board in March 2007. Likewise, the UNODC role would be defined by its designation as the custodian
for UNCAC and the Secretariat for the Conference of State Parties to UNCAC. The UNODC and
WBG would not be involved directly in the investigation, tracing, law enforcement, prosecution,
confiscation, and repatriation of stolen assets: the experience of countries such as Nigeria suggests
that these activities may be best suited for government-to-government assistance or private sector
assistance, working with the relevant government authorities.
The discussion below examines in more detail three sets of important actions from the above
matrix: building global partnerships on StAR; building institutional capacity at the country level;
and implementing and monitoring UNCAC.
6.2.a Building Global Partnerships on StAR
UNODC and the WBG have established a joint working group to take the StAR initiative forward.
An important objective is to include other institutions with an interest in asset recovery; a concerted,
global effort is vital for success. Appendix B briefly describes what other official, multicountry
agencies are doing in this field. An immediate action that could be pursued in this context is to
convene a meeting of experts on confiscation and asset recovery, along with representatives
from selected developing countries, to share experiences and identify good practices that can be
shared more broadly.
A broader partnership will also be needed to implement coordinated, international requests to
freeze assets in relation to a specific Politically Exposed Person (PEP). One of the biggest challenges
facing developing countries is in getting other countries to freeze stolen assets. These
requests are usually made before criminal or civil investigations have been initiated, often without
knowing bank account transaction information and sometimes while the government official
is still covered by some form of domestic immunity. The problem is that a PEP could easily move
funds from one jurisdiction to another in order to escape detection and freezing. UNODC and
WBG, in partnership with other agencies and individual governments, could seek to establish a
uniform request methodology for victim governments to use in making simultaneous international
requests for assistance in freezing stolen assets.
A related initiative involves the creation of a StAR Focal Point List, to help sending countries to
know whom to contact in receiving countries for immediate assistance in the case of an emergency.
The speed of electronic communications (including wire transfers) and the perishability of evidence
require real-time assistance. The G-8 and others have established 24-hour contact systems to
handle terrorism, computer crime, and other issues. There is no list or system for contacting
Challenges, Opportunities, and Action Plan 33
designated national officials who can act as focal points to help countries handle stolen asset
cases, especially those involving PEPs, other government officials, and those who might have
bribed public officials. The UNODC and WBG can work with other agencies to establish a 24-hour,
seven-day Focal Point List of officials in countries who can respond to emergency requests for
assistance. Appendix C contains a draft questionnaire that can be used to help identify focal
points and the information needed to provide responses. The StAR Focal Points can serve as a
channel for international PEP freeze requests.
Another initiative pertains to the formation of a Friends of StAR Group (FSTAR). The cooperation
of the international community is needed to ensure that financial centers meet certain minimum
levels of transparency and agree to cooperate with law enforcement authorities from other jurisdictions.
FSTAR would be an advisory group consisting of distinguished and influential individuals
from countries with a special interest or expertise in stolen asset recovery, with the following
terms of reference:
• Serve as a forum to understand the problems faced by countries in the areas of confiscation,
asset recovery, and international cooperation in anti-money laundering and stolen asset recovery,
and develop recommendations to solve these problems.
• Advocate for ratification and implementation of UNCAC, particularly in developed (receiving)
countries.
6.2.b Building Institutional Capacity and Providing Technical Assistance at the Country Level
First, at the individual country level, the UNODC-WBG effort would follow a two-track approach
consisting of short-run immediate actions and longer-run institution building interventions.
Defining what is needed would depend upon the specific country context and the dimensions of
the stolen asset problem. Immediate actions are likely to include technical assistance to the
country on filing a request for mutual legal assistance, how to approach receiving countries, and
advising on contracts with lawyers and forensic accountants working with the relevant country
authorities.
UNODC and WBG would identify five to six countries for targeted technical assistance on implementing
UNCAC and enhancing the capacity of the criminal justice system to effectively prevent
asset looting and approach asset recovery consistent with internationally accepted legal standards.
This technical assistance will also target the recommended actions for developing countries in
table 3:
• Bring about complete ratification and implementation of UNCAC (see p. 37)
• Fund, staff, and ensure independence of Financial Intelligence Units
• Strengthen FIUs and anti-money laundering capacity
• Develop capacity to respond to and file international mutual legal assistance requests
• Enhance transparency and accountability of public financial management systems
• Create and strengthen domestic anti-corruption agencies.
34 Stolen Asset Recovery (StAR) Initiative:
Second, lasting benefits from a StAR program—including ensuring that recovered assets are used well—
requires developing countries to strengthen public institutions and promote checks and balances in
order to enhance public accountability and transparency. In particular, the focus needs to be on
public financial management and financial sector governance. There are many ongoing efforts
in this regard on which the StAR effort can piggyback, such as the WBG’s GAC Platform. Financial
sector governance is of particular interest. This involves strengthening financial intelligence
units (FIUs) and other institutions working on Anti-Money Laundering and the Combating the
Financing of Terrorism (AML/CFT). The World Bank Group’s Financial Market Integrity
Department, FPDFI, is currently working on enhancing the capacity of institutions responsible for
transparency in the financial sector, especially financial intelligence units, and exploring the free
exchange of expertise and information between Anti-Corruption Agencies and Anti-Money
Laundering authorities. This work is being done in collaboration with other agencies.
Third, actions are being explored to make it easier for countries to recover stolen assets, such as:
• Identifying components of a standard financial investigation training program to combat
money laundering and assist asset recovery
• Developing an investigative template for government officials to follow in exigent circumstances.
• Developing an international network of 24-hour StAR Focal Point contact persons in capitals,
who can respond to emergency requests for legal assistance, as discussed above.
Fourth, once the assets are repatriated, the WBG would offer its services to help monitor the use of
the funds, based on its experience in expenditure tracking systems. Such involvement in monitoring
would be purely voluntary, in keeping with the fundamental principle of the return of stolen
assets as embodied in UNCAC. The WBG is likely to have a comparative advantage in such monitoring.
In the context of UNCAC, the WBG could offer a menu of alternatives to countries willing
to pursue the monitoring of recovered assets in conjunction with the broad reform of their public
financial management (PFM) system. Based on accumulated experience with countries, the
overall goal should be to continue to strengthen country PFM systems directly, both as a
preventive measure against asset theft and misuse and assurance that additional resources from
any source (including asset recovery) are well used. Lessons learned from successful, sustained
public financial management reform emphasizes country ownership and a harmonized and coordinated
approach to reform.37 The involvement of other donors is critical to the process.
Moreover, the experience of Nigeria and the Philippines makes a strong case for involving civil
society and the media in monitoring the use of recovered stolen assets, where feasible.
Challenges, Opportunities, and Action Plan 35
37. See IMF–World Bank (2005), “Update on the Assessments and Implementation of Action Plans to Strengthen Capacity of HIPCs to
Track Poverty-Reducing Public Spending.”
6.2.c Implementation and Monitoring of UNCAC
As noted above, UNODC is the custodian and lead implementation agency for UNCAC. Actions
being considered as part of the UNODC–WBG partnership in the area of UNCAC implementation
are as follows:
• WBG assistance in the 2007 Conference of States Parties to be hosted by Indonesia
• WBG participation in the UNODC/UNCAC working groups on technical assistance, implementation,
and asset recovery
• UNODC and WBG joint technical assistance on adapting domestic legal frameworks for consistency
with UNCAC.
36 Stolen Asset Recovery (StAR) Initiative:
APPENDIXES
APPENDIX A.
Options to Improve Public Financial Management
APPENDIX B.
What Other Agencies are Doing
APPENDIX C.
Focal Point Questionnaire
Challenges, Opportunities, and Action Plan 37
APPENDIX A.
Options to Improve
Public Financial Management
38 Stolen Asset Recovery (StAR) Initiative:
Function Parallel
Supplemented
country system
“Enhanced”
country system “Pure” country system
Budgeting Parallel project budgets,
in many cases not
included in the country’s
budget.
Regular national budget
procedures, supplemented
by more detailed or
reclassified “project
budgets.”
Using existing budget classification
system, selected items
of expenditure might be
“tagged” as beneficiaries of
additional funds and tracked
more closely. A combination
of program, administrative,
economic, geographic, and
functional classifications
might be used for tracking
specific policy objectives.
Expenditures and financing
included in national budget
and approved as part of
regular budget procedures.
Where national procedures
allow for earmarking of multiyear
funds and carry-forward
to future years, these might
be used to attain project
objectives more easily.
Banking Funds retained in
commercial banks or
outside country.
— A subaccount might be created
within the Treasury Single
Account to notionally prevent
co-mingling of project funds
with general funds.
Treasury Single Account,
commonly in central bank.
Payment Project Implementation
Unit (PIU) payment
processing, parallel to
country process.
Contracting with private
or nonprofit entity to act
as fiscal intermediary,
processing payments
(such as the UN) but
operating within the
treasury system.
Or, using country system
with continuous auditing.
Use of treasury system, with
technical assistance, training,
new hardware or software;
or additional strengthened
procedures.
Use of treasury system to
process payments.
Program
management
PIU, embedded with
ministry or program,
typically with higher
salaries. PIU staff/
consultants are project
managers and/or
managers of functions
such as procurement,
financial management.
Contract with third party
to manage project on
behalf of government.
Consultants or “term staff”
reporting to program
managers and line ministry
staff hired for project period
to provide additional capacity.
Challenges, Opportunities, and Action Plan 39
Function Parallel
Supplemented
country system
“Enhanced”
country system “Pure” country system
Internal
controls
Special project procedures
and manuals
developed and used.
National rules, procedures,
and manuals,
supplemented by additional
rules or procedures
in areas where
these are considered
weak (such as additional
internal control audits,
additional physical
audits).
Use of additional staff or
consultants to ensure
adherence to/compliance
with national rules, procedures,
and manuals.
National rules, procedures,
and manuals.
Accounting Using World Bank-supplied
chart of accounts
or other international
standard.
Separate, project-only
financial management
information system
operational.
Use national system
of classification and
account. Supplement
it with additional
classification system
and if needed, accounting
system (essentially
this means operating
two systems simultaneously);
or contract
with third party to
support government
accounting.
(In practice, it is highly
problematic to manage
two separate sets of
books through one system.
Local capacity
might be overwhelmed.)
Using existing national
chart of accounts and
budget classification,
possibly with project-related
spending “tagged” in
treasury for easier reporting
and tracking.
Some investment in classification
improvements, training,
software, or hardware
might be needed.
Using existing national
chart of accounts and
budget classification,
and accounting system.
Financial
reporting
Reporting formats,
information requirements,
and report frequency
to meet World
Bank requirements;
sometimes multiple
requirements such as
for financial oversight,
disbursement, and
project management.
Operate two reporting
systems simultaneously:
national reporting
formats, and World
Bank-defined reporting
formats and information
requirements.
National reporting formats,
possibly with enhancements
applicable to all funds
(formats, training, hardware/
software).
National reporting formats,
frequency, and content.
40 Stolen Asset Recovery (StAR) Initiative:
Function Parallel
Supplemented
country system
“Enhanced”
country system “Pure” country system
Recordkeeping
PIU record-keeping. Third-party maintenance
of records (contracted
by the World Bank or
government).
National record keeping,
using government staff,
with training, system
improvements.
Existing country recordkeeping
arrangements.
Audit
(internal and
external)
Private audit firm
contracted to conduct
audits.
Parallel audit supplementing
national audit
procedures.
National audit system
(internal and external)
twinned with private firm
or with another country’s
Supreme Audit Institution.
Training, system improvements
might be needed as
part of enhancements.
National audit procedures.
Procurement Bank procurement
procedures.
Contracting with private
or nonprofit entity to
act as procuring agent
on behalf of government
for project implementation,
or twinning
with national procurement
agents, but using
national procurement
procedures.
National procurement
system, with additional
training in good practices,
perhaps twinned with private
or nonprofit agents for
training, but primarily using
national procedures.
National procurement
procedures.
Oversight Special or no oversight
arrangements by
ministry or parliament
over project expenditures.
Oversight done
primarily by donor
agencies.
Government oversight,
with parallel donor
oversight arrangements.
Funds subject to national
oversight procedures by
line ministry, MoF, and parliament,
supplemented by
additional oversight (such
as additional transparency
requirements, Project
Oversight committee).
Project funds subject to
national oversight procedures
by line ministry, MoF,
and parliament.
APPENDIX B.
What Other Agencies are Doing
Challenges, Opportunities, and Action Plan 41
Several organizations, official and private, are gearing up to play a role at the international level
in StAR. The following are selected examples of the work being done by official, multicountry
agencies. The list is in alphabetical order and is by no means exhaustive.
Camden Assets Recovery Inter-Agency Network (CARIN)
CARIN is an informal government forfeiture organization. Its primary purpose is to build an informal
international network for law enforcement and prosecutorial/juridical officers who are asset
forfeiture practitioners. CARIN currently has 33 member-states, covering most of Europe, including
two members that are European Union-wide police and juridical assistance organizations
(Europol and Eurojust). CARIN has set up a secure Web site, accessible only to law enforcement
agencies, to list forfeiture laws. CARIN’s objectives include:
• Establishing centralized yet informal points of contact for forfeiture assistance in every member
country, both within the law enforcement and the prosecutorial or quasi-judicial arms of
government, depending upon the system.
• Promoting the exchange of information and good practices between CARIN members
• Focusing upon and promoting the forfeiture of all assets that are currently within the scope of
existing ratified international agreements
• Facilitating training in forfeiting the proceeds and instrumentalities of crime
• Encouraging members to establish national asset recovery offices within their jurisdictions.
Commission for Africa
The Commission for Africa’s central purpose is to generate new ideas and action for a strong and
prosperous Africa. The Commission, in a 2005 report, notes that the basis for securing progress
in stolen asset recovery is to be found in taking action in four linked areas:
• Introducing measures to prevent the theft of assets at source
• Improving systems to identify funds that have been acquired illicitly
• Facilitating the power of relevant national authorities to freeze and confiscate assets
• Creating instruments to hand back funds to the jurisdiction from which they were looted.
Council of Europe Framework Decision, 2006/783/HA, October 6, 2006
This is an important step because it provides a mechanism for the mutual recognition of confiscation
orders within the European Union. It applies to corruption, money laundering, participation in a
criminal organization, and other crimes. It sets out the rules under which a member state shall
recognize and execute in its territory a confiscation order issued by a court competent in criminal
matters of another member state. Execution under the Framework requires a confiscation order,
together with a standardized certificate to be used by all member states.
Financial Action Task Force (FATF)
In June 2003, as part of the revision of its Forty Recommendations on Money Laundering (FAFT
2003), FATF added corruption and bribery as necessary predicate offenses for anti-money laundering
regimes (Recommendation 1). This requires countries to provide for the availability of provisional
measures and confiscation in corruption and bribery money laundering cases (Recommendation
3), while also enlarging the areas of international judicial and administrative cooperation available
under the Recommendations.
While the UN Conventions against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and
Transnational Organized Crime are referenced in FATF’s June 2003 Recommendations, UNCAC was
not included, as it was not yet in force. In June 2006, FATF amended the Joint Assessment
Methodology to require assessors to look at the general framework in a country, including whether
there are appropriate measures to prevent and combat corruption and their participation in UNCAC,
as well as in the OECD Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions, the Group of States against Corruption (GRECO), the African Union Convention
on Preventing and Combating Corruption, and the Inter-American Convention against Corruption.38
G-8 Efforts
A useful summary of G-8 efforts in the area of stolen assets recovery is contained in the “Statement
On Fighting High-Level Corruption,” issued in St Petersburg, July 16, 2006.39 This statement starts
with an expression of renewal of commitment by the Leaders of the G-8 to fight corruption and
improve transparency and accountability. Corruption is seen as a threat to the agenda on global
security and stability, open markets and free trade, economic prosperity, and the rule of law.
Transparency in public financial management and accountability have been pursued by the G-8
through, among other channels, the 2004 Sea Island commitment to launch four compacts, and the
2005 Gleneagles commitment to increase support for the Extractive Industries Transparency
Initiative (EITI) and countries implementing it. The G-8 have committed to seek, when appropriate
and in accordance with national laws, to deny entry and safe haven to public officials found guilty of
corruption, enforce anti-bribery laws rigorously, and establish procedures and controls to conduct
enhanced due diligence on accounts of “politically exposed persons.”
42 Stolen Asset Recovery (StAR) Initiative:
38. For more information on FATF see their Web site at: http://www.fatf-gafi.org/
pages/0,2966,en_32250379_32236836_1_1_1_1_1,00.html. See also their “Handbook for Countries and Assessors,”
which addresses assessing and making recommendations on forfeiture of proceeds from crimes (http://www.fatf-gafi.org/
dataoecd/3/26/36254892.pdf).
39. Much of what follows in this subsection is based on verbatim excerpts from the July 2006 G-8 Statement.
The G-8 Justice and Home Affairs Ministers have undertaken to advance recovery of the proceeds
of high-level, large-scale corruption, taking into account final disposal of confiscated property,
where appropriate, including through holding G-8 regional asset recovery workshops and the
creation of best practices for modalities of disposition and return of recovered assets. The G-8
commitment to implement and promote the FATF recommendations, the UN Convention on
Transnational Organized Crime, and the UN Convention Against Corruption was emphasized. In
the statement, the G-8 leaders committed to:
• Continue to investigate and prosecute corrupt public officials and those who bribe them
• Work with all the international financial centers and G-8 private sectors to deny safe haven to
assets illicitly acquired by individuals engaged in high-level corruption by pressing all financial
centers to attain and implement the highest international standards of transparency and
exchange of information
• Implement fully the commitment to seek, when appropriate and in accordance with national
laws, to deny entry and safe haven, to public officials found guilty of corruption
• Support the global ratification and implementation of the UNCAC and call upon those states
that have not already ratified the UNCAC to do so at the earliest date possible. Ensure vigorous
implementation of the OECD Anti-bribery Convention by parties to the Convention, including
through ensuring that domestic law adopted in this framework is effectively implemented and
through further effective peer review evaluation. Fight vigorously against money laundering,
including by prosecuting money laundering offences and by implementing the revised recommendations
of the FATF-related customer due diligence, transparency of legal persons, and
arrangements that are essential to tackling corruption.
The Organisation for Economic Co-operation and Development (OECD)
The OECD’s assistance on asset recovery issues has focused largely in the areas of
training/knowledge-product and research, as part of its larger anti-corruption activities.40 OECD
produced a joint report with the Asian Development Bank that specifically addresses asset recovery
and is entitled, “Mutual Legal Assistance, Extradition and Recovery of Proceeds of Corruption in
Asia and the Pacific.”41 This report was produced as part of the Anti-Corruption Action Plan for
Asia and the Pacific, a joint initiative with the Asian Development Bank.42 The OECD has also
examined the issue of asset recovery as part of its Development Assistance Committee (DAC),
in the context of learning events that it has organized on improving donor effectiveness in
combating corruption.43
Challenges, Opportunities, and Action Plan 43
40. More information on OECD’s anti-corruption activities can be found at:
http://www.oecd.org/topic/0,2686,en_2649_37447_1_1_1_1_37447,00.html
41. This report is available at: http://www.oecd.org/corruption/asiapacific;
http://www.oecd.org/document/9/0,2340,en_34982156_34982460_37892041_1_1_1_1,00.html. Another report, “Denying Safe Haven
to the Corrupt and the Proceeds of Corruption,” is also available.
42. More information on this initiative can be found at its Web site:
http://www.oecd.org/pages/0,2966,en_34982156_34982385_1_1_1_1_1,00.html
43. See, for example, http://www.oecd.org/dataoecd/41/32/34098324.PDF, for a paper on recovery of assets presented at a conference
organized by OECD-DAC with Transparency International. The final report of this conference is available at this site:
http://www.oecd.org/dataoecd/34/10/34542653.pdf.
Work on the OECD Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions (ratified by 30 countries) is carried out by the Investment Committee,
Working Group on Bribery (experts from 36 member countries). The Working Group can be an
important vehicle for raising political awareness regarding asset recovery of member countries
and for providing cooperation to World Bank members through OECD Regional Dialogues.
Organization for Security and Co-operation in Europe (OSCE)
The Organization for Security and Co-operation in Europe (OSCE) has also addressed the issue
of asset recovery to a limited extent as part of a knowledge product on anti-corruption (“Best
Practices in Combating Corruption”).44
44 Stolen Asset Recovery (StAR) Initiative:
44. Full text of this manual is available at: http://www.osce.org/publications/eea/2004/05/13568_67_en.pdf
Questionnaire for Designating Focal Points and Obtaining Information Regarding
Legal Tools and Procedures to Identify, Trace, and Seize Corruption Proceeds
1. Has your country ratified the United Nations Convention against Corruption? Did your country
take any reservations?
2. What type of information does your government need from a requesting government in order
to successfully assist in the identification, tracing, or seizure of stolen assets?
3. Does your government require the initiation of a formal investigation or proceeding by the
requesting state in order to provide assistance?
4. How is a formal request for assistance initiated?
5. What type of assistance is available in response to a formal request?
6. What are your government’s internal procedures for responding to a formal request?
7. Can a foreign government make a request directly to an individual agency without going
through a central point of contact?
8. What evidence is necessary for your government to open its own criminal investigation or
initiate a civil action regarding stolen or embezzled assets?
9. Do foreign governments have the ability to directly bring civil actions in your domestic courts?
10. Please identify all offices or agencies within your government that may become involved in an
investigation relating to the repatriation of stolen foreign assets, and describe their authorities
and potential activities in this area. Please identify those agencies that can respond directly to
foreign requests, and describe the required circumstances and procedures for such assistance.
Challenges, Opportunities, and Action Plan 45
APPENDIX C.
Focal Point Questionnaire
11. Please identify a government-wide focal point that foreign governments can contact on a 24-hour,
7-day basis for technical and legal assistance in stole and embezzled asset matters. Please identify
telephone and fax numbers as well as e-mail addresses.
12. Please identify points of contact for each of the agencies discussed in Question 10, including
telephone numbers, fax numbers, and e-mail addresses.
13. In order to repatriate assets to a foreign government, it is generally necessary to first come
into possession or control of those assets. Please describe in detail the process by which your
government can sufficiently attain possession or control of assets so they can be repatriated.
14. Please explain in detail the authority of your government to repatriate stolen assets, once
those assets are in your custody or control.
15. Does your country have the authority to enforce foreign forfeiture judgments?
16. Please indicate whether your country can extradite persons who participated in foreign
corruption offenses.
46 Stolen Asset Recovery (StAR) Initiative:
Challenges, Opportunities, and Action Plan 47
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Baker, Raymond, Brionne Dawson, Ilya Shulman, and Clint Brewer. 2003. “Dirty Money and Its Global
Effects.” International Policy Report (January). http://www.ciponline.org/dirtymoney.pdf
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14(4): 17–26.
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48 Stolen Asset Recovery (StAR) Initiative:
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governancefeedback/gacpaper-03212007.pdf
Photo Credits:
Front cover: (clockwise from top left); Ami Vitale,
Dominic Sansoni, Dominic Sansoni, Joel Blit
Back cover: Curt Carnemark
Design:
Studio Grafik
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