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Financial Centers Urged to Take Lead in Recovering Corruption Proceeds

In a bid to combat corruption, financial centers are being encouraged to take the initiative in recovering proceeds of corruption within their jurisdictions. According to a new policy note by the World Bank and the United Nations Office on Drugs and Crime (UNODC), financial centers can play a crucial role in this fight against corruption.

The policy note, titled “Stolen Asset Recovery: Global Architecture for Asset Recovery,” emphasizes the importance of financial centers taking proactive steps to recover proceeds of corruption. Specifically, it recommends that financial centers:

  • Establish teams or assign specialists to work on recovering proceeds of corruption
  • Pursue cases related to foreign corruption and facilitate the recovery and return of stolen assets

The policy note also highlights the need for greater cooperation between national authorities, international organizations, and financial institutions to combat corruption.

Tackling the Proceeds of Corruption

The Financial Action Task Force (FATF) can play a key role in addressing the laundering of proceeds of corruption by:

  • Strengthening its risk and structural elements in assessing anti-money laundering and combating the financing of terrorism (AML/CFT)
  • Incorporating UNCAC provisions into its standards
  • Issuing interpretative notes to clarify implementation issues on politically exposed persons
  • Adopting technical solutions to foster compliance with recommendations on beneficial ownership

Coordination and Cooperation

National authorities can strengthen coordination between anti-money laundering and anti-corruption efforts by:

  • Integrating key anti-corruption bodies and financial intelligence units into multi-agency teams working on specific asset recovery cases
  • Developing policy guidance based on assessments of risks posed by the laundering of domestic and foreign sources of proceeds of corruption
  • Integrating anti-money laundering and anti-corruption efforts within development assistance programs

International organizations can support this integration by issuing appropriate guidance or typology.

Cooperation on Asset Recovery

National authorities are encouraged to facilitate and expedite the exchange of information and mutual legal assistance regime in support of asset recovery. International bodies can support these efforts by:

  • Developing international standards, guidance, and tools supporting streamlined procedures for implementation at the national level
  • Promoting and signposting appropriate gateways for formal cooperation
  • Developing guidance on the use of alternative, informal channels and supporting the development of informal networks linking practitioners at a regional and international level

Acknowledgments

The policy note was made possible through the collaborative effort of experts from inside and outside the World Bank and UNODC, as well as from developed and developing countries. The team is grateful to all those who contributed to this guide.

Country Examples

The policy note includes several country examples that would not have been possible without the generous support of Ricardo Gil Iribarne (Head, Money Laundering and Assets Office, Uruguay), Willie Hofmeyr (Head, Asset Forfeiture Unit, South Africa), Drew Tetlow (Governance Adviser, Department for International Development, United Kingdom), and Valentin Zellweger (Ministry of Foreign Affairs, Switzerland).

Peer Review

The policy note underwent a peer review process chaired by Debbie Wetzel, Director, PRMPS. The peer reviewers included Jean Pesme (Manager, Financial Market Integrity, World Bank), Dimitri Vlassis (Chief, Corruption and Economic Crime Section, UNODC), France Chain (Senior Legal Adviser, OECD Anti-Corruption Division), and Piers Harrison (Senior Governance Adviser, DFID).

Expert Workshops

Two expert workshops were held in Vienna and London to discuss the policy note. The workshops were chaired by Tim Steele (StAR) and included experts from various organizations and countries.

Conclusion

The fight against corruption requires a concerted effort from financial centers, national authorities, international organizations, and financial institutions. By working together and implementing effective measures to recover proceeds of corruption, we can make progress in combating this pervasive problem.