The Sunday Mail
Corruption Watch
Comm John Makamure
AS spokesperson of the Zimbabwe Anti-Corruption Commission (ZACC), I am always inundated with calls from journalists keen to know how far we have gone to recover assets stashed abroad and suspected to have been acquired through corrupt activities.
In this article, I will explain why asset recovery from abroad is a priority for ZACC and the country at large, but difficult to achieve overnight.
Asset recovery, as outlined in the United Nations (UN) Convention Against Corruption (UNCAC chapter V), refers to the process by which the proceeds of corruption transferred abroad are recovered and repatriated to the country from which they were taken or to their rightful owners.
While a precise account of the proceeds of corruption circulating the globe is not possible, the World Bank estimates that developing countries lose between US$20 billion and US$40 billion each year due to corruption.
It is estimated that Zimbabwe is losing nearly US$700 million annually through illicit dealings.
There is no doubt that this huge amount of money could be spent on tackling poverty, providing decent public services and achieving Vision 2030 and the Sustainable Development Goals (SDG) agendas.
Stealing of public assets often occurs in plain sight. But due to legal and institutional complexities and lack of co-operation between countries, it is all too easy for the corrupt to hold on to their ill-gotten gains.
The UN says with only US$1,398 billion assets frozen and US$147,2 million returned by the Organisation for Economic Co-operation and Development (OECD) countries between 2010 and 2012, there is a huge gap between what goes missing and what is recovered, and ultimately returned.
This, therefore, calls for concerted global efforts to improve asset recovery systems and increase co-operation and co-ordination between jurisdictions.
Zimbabweans must understand that the process of tracing and returning assets is not straightforward. It is long and complex. This is because a criminal can transfer stolen funds to an account in another country in seconds using an app on a smartphone. But it might take years, huge resources and several judicial orders translated into different languages for a financial investigator to trace that money.
The World Bank has grouped the obstacles to asset recovery under three headings; general barriers and institutional issues, legal barriers and requirements that delay assistance, and operational barriers and communication issues.
General barriers and
institutional issues
This speaks to lack of political will to identify asset recovery as a priority, and failure to attend to anti-money laundering measures to prevent asset flight.
Legal barriers and requirements that delay assistance
These are the onerous requirements for mutual legal assistance, banking secrecy, lack of non-conviction based recovery procedures, and restrictive evidentiary and procedural legislation.
Operational barriers and communication issues
This refers to difficulties identifying contact points in other countries, and delays in processing mutual legal assistance requests or poorly drafted requests.
There are three main stages in successful asset recovery. They include identifying and tracing assets; freezing and confiscating assets; and recovering and returning assets. Identifying assets is not as simple as following the money flow from bribes, embezzlement or other diversions of public funds. It is necessary to prove that the assets were unlawfully acquired.
Tracing assets means conducting investigations that follow the assets in order to establish the paper trail and prove the assets were unlawfully acquired. This requires resources, expertise and effective international co-operation.
The UN recommends implementing strong legal frameworks, minimising structural impediments through co-ordination, communication and resourcing, streamlining procedures and addressing cultural issues.
We have money laundering which disguises or mingles ill-gotten assets with legitimate funds or assets to hide their origin. This makes them all the more difficult to locate. This is enabled by certain financial centres, in which financial service providers help conceal the proceeds of unlawful activities.
The international anti-money laundering (AML) framework includes due diligence requirements for gatekeepers and institutions, including non-financial professions that might handle the proceeds of crime, such as law firms.
All these processes need constant updating to remain steps ahead of technological advances that give greater mobility to wealth and the possibilities of hiding and disguising it.
With a mouse click, the proceeds of corruption can easily be shifted to off-shore accounts, laundered and then moved again, mingling with legitimate funds and disappearing from view.
Freezing and confiscating the proceeds of corruption stops the assets from being used for further criminal activity. The OECD defines confiscation as “the permanent deprivation of assets by order of a court or other competent authority”.
The confiscation can either follow a criminal conviction by a court or civil forfeiture. In Zimbabwe, the Money Laundering and Proceeds of Crime Act (Chapter 9:24) and the recently enacted Unexplained Wealth Orders, are the main statutes for confiscation of assets.
Assets can be confiscated in two ways: property-based confiscation, which requires the identification of a particular asset; or value-based, which is based on the monetary value of assets that cannot be materially recovered, because for example they have been moved on or destroyed.
Once corrupt assets have been identified and legally confiscated, they must be returned to their “prior legitimate owners” (UNCAC, Article 57).
This final step in the asset recovery process can be complex, as it entails considering how to ensure the process is both transparent and accountable.
The whole asset recovery process relies mainly on effective co-operation between jurisdictions. Mutual legal assistance is covered in UNCAC (Articles 46; 54-57), and countries are required to “afford one another the widest measure of legal mutual assistance in investigations, prosecutions and judicial proceedings”.
Although some progress has been made in recent years, there is still a long way to go before asset recovery processes deter corrupt activity and provide remedies. In 2014, the OECD found that its members had made little progress — with advances being made in only a handful of countries, leaving much room for improvement.
However, international efforts are beginning to bear fruit. With the UNCAC Review Mechanism, all State Parties are being assessed on their asset recovery legislation and processes with the aim of completing the reviews by 2020.
This is opening up discussions and adding to our understanding as well as building on the potential for greater international co-operation. Zimbabwe has made significant advances in legislation and appropriate anti-corruption institutions.
Further reforms are being implemented in order to fully comply with UNCAC, SADC and AU anti-corruption protocols.
The Framework for the Return of Assets from Corruption and Crime in Kenya (FRACCK), signed by Kenya, Jersey, Switzerland and the United Kingdom in 2018 with support from the Basel Institute’s International Centre for Asset Recovery (ICAR), is another prime example of co-operation between states.
It illustrates how foreign parties can come together to agree on good practices for the return of stolen assets and their use to advance sustainable development and benefit citizens.
Thus, this clearly demonstrates that it will take several years for all the billions of dollars stashed abroad to be repatriated back to Zimbabwe.
What is important is that the processes have commenced and ZACC is strengthening its internal capacities to trace and recover these assets. Both the National Anti-Corruption Strategy and the ZACC Strategic Plan have included asset recovery as one of the priorities.
Zimbabwe is party to the UN Convention Against Corruption, the AU Convention on Preventing and Combating Corruption and the SADC Protocol Against Corruption.
ZACC will make maximum use of the country’s membership of this family of nations to intensify its efforts to recover ill-gotten wealth. Some of the suspects are fugitives from justice. While for the time being they may escape criminal conviction, the country must be able to score on recovery of their assets.
Commissioner John Makamure is ZACC spokesperson. He chairs the committee on prevention and corporate governance.
