140 governments acknowledged systemic failures in the controls that should stop banks taking dictators’ money, in a move welcomed by anti-corruption campaigners Global Witness and Sherpa. The resolution, initiated by Egypt and passed at a UN anti-corruption conference which focused heavily on the Arab Spring, also agreed more action was needed to help claw back stolen funds.
“Corruption on the scale that causes revolutions cannot happen without a bank to take the money. The very fact that some states are trying to get stolen money returned makes it clear that something has gone very wrong; these funds, which belong to the people of Egypt and Tunisia, should not be in foreign bank accounts in the first place,” said George Boden, a campaigner at Global Witness.
The resolution calls on governments to force banks to know which of their customers are senior politicians and to make sure that they are not handling looted state funds. Existing laws require this, but are not being enforced. The UN meeting recognised that robust regulatory action was needed.
“Banks need to do proper checks because once government coffers have been raided it is incredibly difficult to get the money back. Many governments that have emerged from the revolutions across North Africa have had real difficulty in getting their state assets returned to them,” said Maud Perdriel-Vaissière, Managing Director at Sherpa.
Countries where overthrown corrupt dictators have hidden their loot in bank accounts, real estate and luxury goods are urged by the resolution to be quicker at responding to requests for assistance from victim countries and to be more proactive in providing information.
Whilst encouraging, the resolution does not address the problem of incumbent corrupt leaders who are unlikely to initiate the call for the return of assets. In these situations, states should follow the example of the US Department of Justice which earlier this week filed civil forfeiture complaints to seek to recover from Teodorin Obiang, Government Minister of Equatorial Guinea, and son of the president, approximately $70.8 million of property which it alleged was the proceeds of corruption.
The resolution comes at the end of a week long meeting of states parties to the UN Convention Against Corruption (UNCAC), whose commitments include provisions for tackling money laundering and returning stolen funds which each state is obliged to implement.