- New anti-corruption legislation implementation next week
With the United Nations Office on Drugs and Crime (UNODC) pledging its support in the recovery of illicitly obtained assets stashed in foreign nations, the Government is going ahead with drafting a crucial law to kickstart this process.
Minister of Justice Dr. Wijeyadasa Rajapakshe made this announcement during a special meeting with UNODC South Asia Representative Marco Teixeira held at the Ministry of Justice on Monday (4).
The Justice Minister stated that the efforts to repatriate funds hidden abroad by individuals involved in fraudulent asset accumulation would commence in the coming days. He further noted that the UNODC, acting on behalf of the World Bank, was actively involved in recovering assets acquired through fraudulent means and stashed in foreign jurisdictions.
Moreover, the Minister highlighted the upcoming implementation of the new Anti-Corruption Act, scheduled for 15 September, and its role in empowering the newly-formed Bribery or Corruption Investigation Commission of Sri Lanka to address such cases.
The World Bank and UNODC employ the Stolen Asset Recovery Assistance (StAR) system in their joint efforts to retrieve stolen assets. StAR serves as a collaborative initiative between the World Bank Group and the United Nations Office on Drugs and Crime, focusing on preventing the laundering of corruptly acquired funds and facilitating the prompt and systematic return of misappropriated assets.
Proceeds of Crime Bill
Ministry of Justice Secretary Wasantha Perera disclosed that a committee was currently in the process of drafting the Proceeds of Crime Bill. This legislation is integral to advancing the repatriation of assets obtained through criminal activities. The drafting process is expected to be lengthy due to the bill’s comprehensive nature, with similar laws in Australia and the UK spanning approximately 800 pages each.
“The Proceeds of Crime Bill is being drafted by a committee to go ahead with the process of repatriation of stolen assets. The drafting might take some time, as it is a very lengthy document and a very serious law, so many aspects have to be looked into. For example, the Australian law is 800 pages and the UK one is about the same. Tentatively, we plan to come out with the first draft by the end of this year,” Perera told The Sunday Morning.
Perera emphasised that while the existing Anti-Corruption Act did contain provisions for the recovery of stolen assets, any gaps or unaddressed issues would be covered by the Proceeds of Crime Bill.
“There are provisions under the current Anti-Corruption Act to recover stolen assets, but whichever areas that have not been addressed in the Anti-Corruption Act will be covered in the Proceeds of Crime Bill,” Perera said.
Legal framework
President’s Counsel Sarath Jayamanne, who is a member of the committee responsible for drafting the Anti-Corruption Act and the forthcoming Proceeds of Crime Bill, provided insights into the legal framework.
The Anti-Corruption Act includes provisions for conviction-based and non-conviction-based forfeiture of assets. Jayamanne highlighted the importance of seeking assistance from the UNODC and its partnership with the World Bank – the StAR initiative – in implementing these sections and acknowledged the necessity of expertise in this area, which the UNODC and World Bank could provide.
“In the Anti-Corruption Act, there are several provisions with regard to conviction-based forfeiture and non-conviction-based forfeiture. In doing so, we need to get the assistance of the UNODC, which has an arrangement and understanding with the World Bank. The World Bank has a separate initiative called the StAR initiative and has developed the expertise and helped other countries as well.
“In the event that we implement these new sections in the Anti-Corruption Act, we will have to seek its assistance because it is a highly skilled area of expertise. Worldwide, it is the UNODC that helps other countries,” Jayamanne explained.
Furthermore, Jayamanne explained that the committee was currently drafting a detailed Proceeds of Crime Bill that would outline the procedures for recovering stolen assets. It is anticipated that this bill will be finalised by the end of the following year.
“At the moment we are drafting a more detailed Proceeds of Crime Bill. This bill would give the procedures as to how the stolen assets would be recovered. I believe it will probably come out by the end of next year. In that event as well, once that law is passed, we need to get the assistance of the UNODC to recover the assets stolen from our country.
“Even at the drafting stage, the UNODC can assist and bring in various other experts from the world over to finetune what is being drafted at the moment by the committee headed by Justice Yasantha Kodagoda, of which I am also a member. It is gradually coming out nicely,” he shared.
Global efforts
The UK, the US, and Australia have already established comprehensive legislation regarding the recovery of stolen assets.
“The UK, the US, and Australia have very comprehensive pieces of legislation with regard to stolen asset recovery. Even if the law is passed, that does not mean we have the expertise. We need to ultimately obtain the assistance of the UNODC and the World Bank,” Jayamanne stressed.
He noted that countries such as Uganda, Nigeria, and the Philippines had successfully recovered stolen assets with the assistance of the UNODC, the World Bank, and the StAR initiative.
“Uganda, Nigeria, the Philippines, and several other countries have been able to recover stolen assets with the assistance of the UNODC, the World Bank, and the StAR initiative. The UNODC has lent some of its officers to the World Bank and therefore the World Bank is obliged to adhere to the requests of the UNODC and they both have very good coordination with each other. We need their assistance because only they have that capacity,” Jayamanne explained.
Conditions for returning assets
Jayamanne did, however, highlight that the asset recovery processes could be protracted, often taking years or even a decade to yield results.
“The one issue is that this process to recover stolen assets can take years and sometimes even a decade or more. This is a very cumbersome procedure. However keen we are, it takes years for the process to bear fruit. Normally, a major portion of the stolen assets are given back to the origin country; of course, there may be some expenses for litigation.”
Despite the lengthy duration, most of the repatriated assets are returned to the originating country, albeit with certain conditions. These conditions require that the repatriated funds be used for the same or similar purposes as originally intended. This ensures that the recovered assets are allocated to legitimate projects and initiatives.
“However, the stolen assets are returned under strict conditions. The money is repatriated to the origin country on the premise that this money should be used for the same purpose it was originally planned to be used for, because these monies are stolen from some legitimate project.
“The StAR condition is that if they are to return the stolen money, then it must be used for the same or similar purpose. The repatriated money cannot be used for some other purpose. For example, if it was meant for the benefit of the downtrodden, even if that project is now complete, this money must be used for a similar project.”
Sri Lanka is taking significant steps to recover stolen assets that have been fraudulently acquired and stashed away in foreign countries. The collaboration with the UNODC and its StAR initiative, in conjunction with the drafting of the Proceeds of Crime Bill, reflects a commitment to combat corruption and reclaim ill-gotten gains.
While the legal framework for asset recovery is being meticulously constructed, it is evident that the UNODC and the World Bank’s expertise will play an essential role in ensuring the effectiveness of these efforts. Countries such as the UK, the US, and Australia have already set the precedent with comprehensive legislation, and Sri Lanka is poised to follow suit.