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New UN initiative launched to recover assets stolen by corrupt leaders

New UN initiative launched to recover assets stolen by corrupt leaders

The United Nations today launched a new partnership between the World Bank and the UN Office on Drugs and Crime (UNODC) to help developing nations to recover assets stolen by corrupt leaders and invest those funds in development programmes.

“Corruption undermines democracy and the rule of law,” Secretary-General Ban Ki-moon said at the inauguration of the Stolen Asset Recovery (StAR) Initiative. “It leads to violations of human rights. It erodes public trust in government. It can even kill – for example, when corrupt officials allow medicines to be tampered with, or when they accept bribes that enable terrorist acts to take place.”

The proceeds from criminal activities, corruption and tax evasion worldwide is estimated to be between $1 trillion and $1.6 trillion, and one quarter of the gross domestic product of African States – or $148 billion – is lost to corruption yearly. Additionally, public officials from developing and transition countries collectively receive bribes worth between $20 billion and $40 billion every year, which is equivalent to 20 to 40 per cent of flows of official development assistance.

“Many developing countries are haemorrhaging money desperately needed to try to support the attack against poverty,” said Robert B. Zoellick, president of the World Bank, an independent specialized agency of the UN. “Of course, the development impact of theft on such a massive scale is devastating.”

He cited the example of former Nigerian President Sani Abacha, members of his family and accomplices who collectively stole between $3 billion and $5 billion of the country’s public assets in five years. That sum exceeds the federal Government’s 2006 expenditures on education and health, and could also have provided antiretroviral therapy for 2 million to 3 million Nigerians living with HIV/AIDS for a decade.

UNODC Executive Director Antonio Maria Costa underlined the importance of acting quickly to retrieve stolen funds. “Time is crucial. Stolen assets are more likely to be detected during the initial phase and therefore before they disappear in an international money laundromat,” he said, noting that only 10-15 per cent of such funds are recovered a decade or so after the crime has taken place.

Mr. Costa pointed out his Office’s experience in Nigeria – where some $5 billion of stolen monies has been recovered – to shrink fraud.

To both reclaim stolen funds and to prevent deter such crimes, the World Bank and UNODC believe that developed countries – often the source of bribes, kickbacks and other illegal incomes, as well as the location where stolen funds are kept – and developing countries must work in tandem.

The World Bank and UNODC appealed for all countries to ratify the UN Convention against Corruption, which only half of the Group of Eight (G8) developed countries has done. Mr. Costa stressed that one of the Convention’s breakthroughs is that banking secrecy is no longer an obstacle to money-laundering investigations, which could deal a serious blow to efforts to export stolen funds.

“Developing countries frequently lack the institutional capacity to locate and repatriate stolen assets, so this initiative will provide financial and technical assistance to strengthen the institutional capacity of government agencies to do so,” Mr. Zoellick said. “And it will also help these countries bring their laws into compliance with the UN Convention against Corruption.”

The StAR Initiative will endeavour to ensure that there is no safe haven for the proceeds derived from corruption, as well as to suppress the flow of these funds among countries.