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

Country and Regional Measures for Sovereign Asset Recovery UNECA Subregional Workshop on Curbing Illicit Financial Flows (IFFs) from Africa 14 to 15 September 2015 Nairobi, Kenya 1

ALSF Presentation for UNECA + What the ALSF does Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015 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) 2

ALSF Presentation for UNECA + Strategic Considerations Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015 Jurisdiction  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 of the financing of terrorism) Financial Action Task Force Standards – 40  recommendations 3

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. 4

ALSF Presentation for UNECA + Importance of Preparation Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015 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? 5

ALSF Presentation for UNECA + Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015 6 Source: Asset Recovery Handbook, Stolen Asset Recovery Initiative

ALSF Presentation for UNECA + Legislative Reform at Home Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015 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 officials) 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 7

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015 Building the Chain Considerations in Managing Information 8

ALSF Presentation for UNECA + Workshop on Curbing Illicit Financial Flows from Africa Building the Chain Nairobi, 14 September 2015 Build a profile of target 9 Source: Asset Recovery Handbook, Stolen Asset Recovery Initiative

ALSF Presentation for UNECA + Workshop on Curbing Illicit Financial Flows from Africa Building the Chain Nairobi, 14 September 2015 Following the money 10 Source: Asset Recovery Handbook, Stolen Asset Recovery Initiative

ALSF Presentation for UNECA + Workshop on Curbing Illicit Financial Flows from Africa Gather Evidence Nairobi, 14 September 2015 control and preserve 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 11

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? 12

ALSF Presentation for UNECA + Workshop on Curbing Illicit Financial Flows from Africa Many types of Assets Nairobi, 14 September 2015 Value must be preserved  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 13

ALSF Presentation for UNECA + Workshop on Curbing Illicit Financial Flows from Africa What can governments do? Nairobi, 14 September 2015 Framework for returned assets  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 14

ALSF Presentation for UNECA Workshop on Curbing Illicit Financial Flows from Africa Nairobi, 14 September 2015 What’s next? It’s a long process 15

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 16 development community, in pursuit of this effort.

Thank you for your attention. For any questions or comments, please contact the African Legal Support Facility (ALSF) at alsf@afdb.org Nairobi, 14 September 2015 17