Make a mistake on your tax return form, you get a warning. Divert public funds for private gain, you might just be offered a foreign bank account. That seems to be the modus operandi of corrupt leaders who have often used the opacity in the global financial system to divert public funds for their own personal gain.
That is why Transparency International (TI) is urgently pressuring both leaders of G20 countries and global financial institutions immediately to freeze and thoroughly investigate all suspect assets. TI sent an urgent request to the G20 heads of states and the Emir of Dubai to investigate any assets thought to be owned by former Egyptian president Hosni Mubarak.
The longer it takes, the greater the chance that they will be moved beyond the reach of investigators and the smaller the chance that public funds will be recovered.
According to some estimates Egypt lost more than US$6 billion per year to illicit financial activities and official government corruption. The repatriation of assets illicitly transferred from Egypt could provide much needed funds for development in a country where 40 per cent of the population lives on less than US$2 a day.
Egypt has already asked other governments to freeze the foreign assets of Mubarak and his closest family members. Switzerland has been the first to respond freezing funds based on new legislation that allows them to confiscate assets for up to 10 years. This gives the country from where the assets have allegedly been stolen time to initiate restitution requests.
Countries that accept assets from politically exposed people, the official definition of a potentially risky high-profile client, should act more quickly to identify illicit flows. This is a requirement of the UN Convention against Corruption which has been ratified by 148 countries. That is why TI lobbies for stronger and better international cooperation to prevent illicit flows and recover stolen assets.
World leaders need to support people who risked their lives on the streets to put an end to corruption and autocracy. As geopolitical events move quickly, financial authorities should be ready to prevent deposed leaders from moving ill-gotten wealth to offshore bank accounts. TI issued the Bangkok Declaration in November 2010 calling on governments in countries that might be home to stolen assets to take action to both stop illicit money from entering their countries and to take steps to freeze, investigate and repatriate funds that are already there.
As part of the UNCAC Coalition, a group of more than 240 civil society organisations in more than 100 countries, TI expressed concern about public wealth being illicitly transferred out of Egypt.
In France, a preliminary enquiry into the assets of former Tunisian leader Ben Ali is ongoing, thanks to the efforts of Transparency International France and other NGOs.
In November 2010, following a long legal battle fought by TI France, a ruling in France paved the way for a full investigation into three African leaders after a preliminary investigations uncovered more than 50 properties and 100 bank accounts linked to them.
Governments must be ready to cast the net far and wide when there is a risk of asset flight.
The international community needs to start preparing new rules that curb banks’ ability to accept corrupt funds and frameworks that allow better international cooperation, especially between developing countries and authorities in large financial centres. G20 governments should create a fund to assist developing countries in their asset recovery efforts. It would be financially beneficial: illicit financial flows far exceed overseas development assistance.
On 15 February 2011 Transparency International (TI) and Global Witness, together with 76 other organisations from around the world called on the G20 to put their anti-corruption commitments into practice.
In Seoul last November, the Group of 20 world leading economies announced its G20 Anti-Corruption Action Plan, targeting a sound, well regulated, accountable, financial system.
It committed its member to using the United Nations Convention against Corruption (UNCAC) framework to fight corruption, including the return of stolen assets.
The return of stolen assets is a fundamental principle of the UNCAC, which includes comprehensive guidelines for countries to work together to that end.