Country and Regional Measures for Sovereign Asset Recovery UNECA - - PowerPoint PPT Presentation

Country and Regional Measures for Sovereign Asset Recovery

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UNECA Subregional Workshop on Curbing Illicit Financial Flows (IFFs) from Africa 14 to 15 September 2015 Nairobi, Kenya

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

+ What the ALSF does

Broad mandate and role

 Commercial Creditor (Vulture Fund) Litigation

 Focus is on international litigation initiated by commercial creditors

against African Governments

 Particular emphasis on post-HIPC completion point countries

 Supporting negotiations of Complex Commercial Transactions

 Debt Agreements  Mining and Natural Resource Contracts  PPPs & Infrastructure

 Capacity Building - Includes Capacity in Sovereign Asset Recovery

(Already succeeded in one case)

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ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

+ Strategic Considerations

Jurisdiction

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 Where are the assets hidden – Multi-jurisdiction

cooperation (Double Taxation; extradition; judicial cooperation)

 What is the law in the respective jurisdictions (Changes

in law made over the last 15 years – such as Switzerland – Financial information)

 Existence of relevant International Treaties

• UN Conventions (against illicit traffic of narcotics;

transnational organized crime; corruption; suppression

• f the financing of terrorism)
• Financial Action Task Force Standards – 40

recommendations

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

Domestic Preparation?

Domestic preparation will lead to better outcomes in the long run.

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ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

+ Importance of Preparation

Government Organization

 Who do you need on the team?

 Ministers or technocrats?  Finance, Central Bank, Foreign Affairs, Judicial/Attorney

General, Revenue Institutions (Customs), Immigration, Accountants, Auditors, Private Sector, Public Sector, CSOs

 Statutory Authority?

 What are the limits?  How are they funded?  New Institution (Specific or broad mandate) ?

 Civil or Criminal case?

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ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

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Source: Asset Recovery Handbook, Stolen Asset Recovery Initiative

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

+ Legislative Reform at Home

Peru

 Investigated chief of Peru’s intelligence unit

 Peru adopted a law to assist in case

 Plea agreement mechanism for investigations into organized

crime

 Guilty pleas and plea agreements did not exist in Peru

 Law allowed members of criminal organization subject to

prosecution (with exception of leaders and some public

• fficials) to engage with prosecutors in plea agreements

 Information exchanged for reduced sentences

 Law helped secure convictions and avoided years of litigation

 Enabled authorities to obtain information on the flow of funds and

recover $175 million in foreign jurisdictions

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ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

Building the Chain

Considerations in Managing Information

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ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

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Building the Chain

Build a profile of target

Source: Asset Recovery Handbook, Stolen Asset Recovery Initiative

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

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Building the Chain

Following the money

Source: Asset Recovery Handbook, Stolen Asset Recovery Initiative

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

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Gather Evidence

 Must create a comprehensive system for dealing with

evidence

 Resources required to collect and analyze, must

allocate sufficient domestic resources to this task

 Gathering Evidence abroad requires patience, political

assistance, and more patience

 Maintaining evidence is key to admissibility in other

jurisdictions

 Utilize technology

control and preserve evidence

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

Success brings challenges

Assets have been identified and seized. How do you maintain the value?

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ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

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Many types of Assets

 Commingled Assets – legitimate and illegitimate assets

mixed, how do you account for these

 Functioning Businesses – how do you keep them running?  Real Property – what if there are tenants?  Companies – what if the companies have debt?  Exotic Animals – who will maintain the race horses?  Depreciating assets – cars stored improperly or not

maintained

Value must be preserved

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

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What can governments do?

 Will the government hire asset managers?  Will the government liquidate?  What happens to the funds / assets when returned to

the state?

 Do they go in the general budget?  Special fund for anti-corruption?  Used to finance ongoing investigations?  Balance costs of recovery against benefits

Framework for returned assets

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

What’s next?

It’s a long process

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ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015

Way Forward

• Country-Specific Measures
• Lower the hurdles when seeking the return of assets located in other

jurisdictions.

• Strengthen the laws, regulations, policies and institutions governing

asset recovering in these countries to encourage transparent financial transactions.

• Regional Measures
• Enhanced monitoring mechanisms required.
• Harmonization of laws
• Sensitization campaign on the main issues to policymakers and other

relevant stakeholders

• ALSF-led initiatives: building institutional capacity and providing

technical assistance at the country-level

• The ALSF provides legal and technical advisory services to its member

countries with the aim of recovering stock of stolen assets.

• Developing and strengthening partnerships with multilateral and

bilateral agencies, as well as with the broader international development community, in pursuit of this effort.

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Nairobi, 14 September 2015

Thank you for your attention. For any questions or comments, please contact the African Legal Support Facility (ALSF) at alsf@afdb.org