Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Few and Far Stolen Asset Recovery (StAR) Series StAR—the Stolen Asset Recovery Initiative—is a partnership between the World Bank Group and the United Nations Offi ce on Drugs and Crime (UNODC) that supports international eff orts to end safe havens for corrupt funds. StAR works with developing countries and fi nancial centers to prevent the laundering of the proceeds of corruption and to facilitate more systematic and timely return of stolen assets. Th e Stolen Asset Recovery (StAR) Series supports the eff orts of StAR and UNODC by providing practitioners with knowledge and policy tools that consolidate international good practice and wide-ranging practical experience on cutting edge issues related to anticorruption and asset recovery eff orts. For more information, visit www.worldbank .org/star. Titles in the Stolen Asset Recovery (StAR) Series Stolen Asset Recovery: A Good Practices Guide for Non-Conviction Based Asset Forfeiture (2009) by Th eodore S. Greenberg, Linda M. Samuel, Wingate Grant, and Larissa Gray Politically Exposed Persons: Preventive Measures for the Banking Sector (2010) by Th eo- dore S. Greenberg, Larissa Gray, Delphine Schantz, Carolin Gardner, and Michael Latham Asset Recovery Handbook: A Guide for Practitioners (2011) by Jean-Pierre Brun, Larissa Gray, Clive Scott, and Kevin Stephenson Barriers to Asset Recovery: An Analysis of the Key Barriers and Recommendations for Action (2011) by Kevin Stephenson, Larissa Gray, and Ric Power Th e Puppet Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It (2011) by Emile van der Does de Willebois, J.C. Sharman, Robert Harrison, Ji Won Park, and Emily Halter Public Offi ce, Private Interests: Accountability through Income and Asset Disclosure (2012) On the Take: Criminalizing Illicit Enrichment to Fight Corruption (2012) by Lindy Muzila, Michelle Morales, Marianne Mathias, and Tammar Berger Left out of the Bargain: Settlements in Foreign Bribery Cases and Implications for Asset Recovery (2014) by Jacinta Anyango Oduor, Francisca M. U. Fernando, Agustin Flah, Dorothee Gottwald, Jeanne M. Hauch, Marianne Mathias, Ji Won Park, and Oliver Stolpe. All books in the Stolen Asset Recovery (StAR) Series are available for free at https://open- knowledge.worldbank.org/handle/10986/2172 Few and Far The Hard Facts on Stolen Asset Recovery Larissa Gray Kjetil Hansen Pranvera Recica-Kirkbride Linnea Mills © 2014 International Bank for Reconstruction and Development / The World Bank and the OECD 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 17 16 15 14 This work is a product of the staff of The World Bank with external contributions. The findings, interpreta- tions, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http:// creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: Gray, Larissa, Kjetil Hansen, Pranvera Recica-Kirkbride, and Linnea Mills. 2014. Few and Far: The Hard Facts on Stolen Asset Recovery. DOI: 10.1596/978-1-4648-0274-4. Washington, DC: World Bank and OEC D. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Responsibility for the views and opinions expressed in the adaptation rests solely with the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. ISBN: 978-1-4648-0274-4 e-ISBN: 978-1-4648-0275-1 DOI: 10.1596/978-1-4648-0274-4 Cover: Debra Naylor, Naylor Design, Inc. Library of Congress Cataloging-in-Publication Data has been applied for Contents StAR and OECD ix Acknowledgments xi Abbreviations xiii Executive Summary 1 Key Findings 1 Main Recommendations 2 1. Introduction 5 Scope of the Report 8 Methodology 8 Terminology 9 Organization of the Report 9 References 10 2. General Observations on the Data 11 References 15 3. Progress on Cases: Tracing, Freezing, and Recovering Proceeds of Corruption 17 OECD Members Pursuing Cases 17 Value of Assets Frozen and Returned by OECD Members 18 Jurisdictions Where the Proceeds Originated 23 How Are Cases Being Initiated? 26 Legal Avenues for Asset Recovery 26 Reference 29 Annex 3.1 30 4. Policy Developments 33 Setting Asset Recovery as a Policy Priority 33 Strengthening International Commitments on Asset Recovery 34 References 35 5. Legislative Developments 37 Rebuttable Presumptions 37 Administrative Freezing and Confiscation Measures 41 v Unexplained Wealth Provisions, Illicit or Unjust Enrichment Laws 43 Non-conviction Based Confiscation 43 Legislative Gaps Remain 43 Including Asset Return in Settlement Agreements 44 References 45 6. Institutional Developments 47 Specialized Units That Focus on Asset Recovery 47 Adequate Resources and a Mandate and Incentives to be Proactive in Asset Recovery 47 Forming and Using Practitioner Networks 48 Capacity Building in Developing Countries 49 References 50 7. The Role of Developing Countries 51 Reference 54 8. The Role of Development Agencies 55 Incorporating Asset Recovery Efforts into Development Policies 55 Supporting Domestic Law Enforcement Efforts in Pursuing Cases 56 Advising on Ways to Secure Asset Return 56 Adequate Financing for Capacity-Building Efforts in Developing Countries 57 Facilitating Data Collection 58 Communicating Asset Recovery Policies, Actions, and Results 58 Advocating Policies, Laws, and Institutional Development 58 References 59 9. Conclusions 61 Appendix A. Recommendations 63 Main Recommendations from the Executive Summary 63 Additional Recommendations 64 Data Collection (from chapter 2) 64 Policy Recommendations (from chapter 4) 64 Legal Recommendations (from chapter 5) 64 Operational Recommendations (from chapter 6) 65 Recommendations for Developing Countries (from chapter 7) 65 Recommendations for Development Agencies (from chapter 8) 65 Appendix B. Nine Key Principles of Effective Asset Recovery Adopted by the G20 Anticorruption Working Group, Cannes, 2011 67 Policy Development 67 Legislative Framework 67 Institutional Framework 68 Appendix C. StAR/OECD Questionnaire 71 vi I Contents Boxes 1.1 The Busan Partnership for Effective Development Co-operation—Combating Corruption and Illicit Flows 7 3.1 International Commercial Arbitration—An Innovative Avenue for Asset Recovery 28 4.1 Good Practice Examples: Elements of Successful Asset Recovery Policies 34 4.2 Guidance and Tools on Asset Recovery and Related Topics Produced by G8, G20, and the Financial Action Task Force (FATF) 35 5.1 Good Practice: Innovative Legislation to Overcome Barriers 40 5.2 Arab Spring Asset Freezing Measures 42 6.1 Specialized Units Focusing on Corruption Offenses and Asset Recovery 48 6.2 Good Practices in Building Capacity of Requesting