GLOBAL ARCHITECTURE SUPPORTING ASSET RECOVERY CONCEPT NOTE

Transcription

1 GLOBAL ARCHITECTURE SUPPORTING ASSET RECOVERY CONCEPT NOTE December 8, 2008

2 A. CONTEXT 1. The UN Convention against Corruption (UNCAC) provides the legal framework for international collaboration in the return of stolen assets that are the proceeds of corruption. The Convention establishes the presumption that when the proceeds of corruption are traced to another jurisdiction they should be returned to the originating state and establishes a formal legal framework for doing so. The Convention entered into force in December 2005 and has been ratified by 128 countries. 2. Implementation of the Convention requires both the domestication of the legal framework through the alignment of national legislation and the development of institutions with the mandate and capability to support asset recovery activities. Countries have adopted different approaches to domestication, depending on their legal traditions, the nature of existing legal framework and policy choices regarding the extent to which they incorporate voluntary as well as mandatory provisions under the convention. The result has been to create a patchwork quilt rather than a standardized legal framework. 3. At the national level, the taking forward asset recovery cases requires the collaboration of a wide range of institutions, including financial sector oversight authorities, intelligence agencies, law enforcement and prosecutors. Co-ordination between these institutions has often proved challenging. There is growing recognition that despite the close links between corruption and money laundering, anti-money laundering and anti-corruption structures have developed independently of each other in many countries and do not communicate effectively. Problems also arise at an operational level where regulations prohibit exchange of information or more often a lack of established networks hinders the transfer of intelligence to the appropriate law enforcement bodies and the routing of complex economic crime cases to suitable prosecutors. 4. Where the proceeds of corruption have been transferred abroad, the recovery of assets requires collaboration between a returning and originating country. Where assets are transferred across multiple jurisdictions, the recovery of assets requires is even more challenging. Collaboration is hindered by differing documentary requirements, lack of clear contact points and poor communication between officials in different jurisdictions. These difficulties may be handicapped by capacity constraints in both sending and receiving jurisdictions, particularly where institutions and staff are new to asset recovery in general or have limited experience in dealing with institutions in other jurisdictions. Unfortunately, capacity is often weakest in the sending jurisdictions, the jurisdiction which generally has to initiate and drive the asset recovery process. 5. A complex architecture of institutions has emerged to support, facilitate and promote this international collaboration. Many of these institutions address asset recovery as part of a broader institutional mandate, and focus on one particular dimension of the asset recovery process. These include institutions responsible for setting and monitoring international standards, such as UNODC with normative responsibilities in support of UNCAC, OECD bodies responsible for monitoring conventions and agreements on bribery and taxation, and the Financial Action Task Force and related regional bodies which monitor progress in establishing anti-money laundering regimes. 1

3 Law enforcement agencies have established international institutions (such as Interpol) and networks of practitioners (such as the Camden Asset Recovery Network) to exchange experience and information to tackle organized crime. Networks have also been established to facilitate information exchange and collaboration between financial intelligence units (the Egmont Group) and anti-corruption agencies (the International Association of Anti-Corruption Agencies), which include asset recovery as part of their broader interests in the combat of money laundering and domestic anti-corruption programs. Complementing these public sector-oriented institutions are organizations representing and regulating the banking sector (Wolfsberg Group) and professions (lawyers, accountants), which have sought to respond to and influence the emerging regulatory framework governing money laundering. 6. More recent additions to this international architecture are the development agencies, which tend to view asset recovery from a governance rather than a law enforcement perspective. In some countries, development agencies and Ministries of Foreign Affairs who have no interest or involvement in domestic confiscation activities have emerged as key stakeholders at the national level in some jurisdictions. For these institutions, collaboration in international asset recovery efforts contributes to global good governance, addresses potential risks in bilateral relations and more broadly contributes to the country s international image. 7. The development community has established dedicated bodies to support asset recovery within multi-lateral institutions, notably through StAR, to support the global good governance agenda. Specialist institutions have also emerged in the nongovernmental sector, notably the Basel-based International Center for Asset Recovery. Private sector initiatives have followed suite, such as the Caux Forum s recent announcement of its intention to establish a not-for-profit foundation to finance developing countries efforts to secure the return of stolen assets. 8. The growing complexity of this institutional architecture underlines the need for key actors to understand the roles, functions, mandates, competencies and sources of legitimacy of these organizations in order to function effectively. Furthermore, since the institutional architecture is still in a state of flux, as institutions develop their own strategies and seek to define their role in asset recovery process, the international community is faced with an ideal opportunity to take stock of the global system of asset recovery as a whole, to minimize gaps, and to streamline networks in the overall structure. 9. While there is literature on various stages of the asset return process, most focuses on specific cases, legal innovations and aspects of the recovery process: there is no literature on how the structures and systems fit together at the national and international levels. Although there are a number of initiatives currently under way which may help clarify some of these issues, none covers the full range of the asset recovery process. The United Kingdom, during its presidency of FATF, proposed a review of asset recovery structures insofar as they relate to areas within FATF s mandate. In October 2008, a working group was established to review progress on confiscation. StAR will be represented in this working group. In a related initiative, the Anti-Corruption Task Team of Govnet at the OECD Development Assistance Committee discussed the need to link Anti-Money Laundering work with the more traditional anti-corruption initiatives during 2

4 its November 2008 meeting. During this meeting, Task Team specifically identified the need for work on global architecture for asset recovery. A third on-going initiative is the Norwegian-sponsored Illicit Funds Flow Study, which includes seeks to identify potential entry points for curbing a wide range of illicit financial flows impacting on developing countries. A final report of the Task Team was presented in November Norway is financing a follow-up study aimed at quantifying these flows. B. OBJECTIVES 10. The overall objective of the proposed study is to inform debate on the development of the global architecture for asset recovery, with a view to facilitating the recovery of assets by victim states. The study is not intended as a definite statement on the global architecture. Rather, the study seeks to provoke debate, identify some actions that would relatively easy to implement and contribute to longer-term policy development at a national and international level. 11. To this end, the study has four intermediate objectives. a) Map the institutional and legal architecture for asset recovery. This mapping exercise will identify the key national and international institutions engaged at each stage of the asset recovery process, describe their mandate, activities and capabilities, and identify activities and functions where these institutions currently collaborate. The mapping exercise will include a typology of functions and institutional arrangements for asset recovery at the national and international level. b) Identify strengths and weaknesses in the institutional and legal architecture for asset recovery. These will include: alignment and potential mismatches between mandates, activities and capabilities; overlaps between the mandates and activities undertaken by different institutions; functions and activities important to asset recovery that are not currently supported by the institutional and legal architecture. The review will distinguish between national and international institutions and legal arrangements. c) Propose adjustments in the institutional and legal architecture. These may include proposals for: national and international institutions to play a more active or changed role in asset recovery; rationalizing the institutional arrangements; the development of functions and activities that are not adequately supported at present at the national or international level; and adjustments in the allocation of resources to bolster the weakest elements of the system. The proposals will include a feasibility assessment and indicate likely implementation requirements. d) Propose innovations in the institutional and legal architecture. These innovations may seek to exploit opportunities that have not yet been exploited within the national and international institutional and legal architecture. Some of the innovations that have been discussed include: the establishment of funding to cover victim states legal fees when pursuing asset recovery cases; the creation of a system for resolving 3

5 disputes when one country rejects or does not act on another country s requests for mutual legal assistance; the integration of anti-money laundering and anti-corruption work in development agencies programs at the country level. 12. The study will contribute to StAR s development objective ( to encourage and facilitate more systematic and timely return of assets stolen by politically exposed persons through acts of corruption ) in three ways. Firstly, the study will stimulate debate on how national and international organizations can best harmonize their activities to facilitate asset recovery, thereby raising the profile of asset recovery in institutions that can play an important role but may not be doing so at present (contributing to StAR s intermediate objective 1: Promote commitment at the highest level in both recipient and sending jurisdictions to recover stolen assets and deter asset theft ). Secondly, the study will help identify barriers to international asset recovery which are not being addressed currently either by national or transnational institutions and propose solutions to help fill these gaps through national initiatives or international cooperation (contributing to StAR intermediate objective 3: Promote networks of practitioners in the field of asset recovery as a means of facilitating the exchange of information, knowledge and collaboration at an operational level ). And thirdly, the study will help agencies define their role in asset recovery, identifying opportunities for national and international agencies to strengthen their engagement and promote international cooperation (contributing to StAR intermediate objective 4: Support partner countries efforts to build institutional capacity for asset recovery as a routine part of its anti-corruption strategy ). This last element in particularly important for many OECD countries where development agencies have a clear incentive to see stolen assets returned to poor countries and there are opportunities for them to mainstream work on asset recovery into their Governance and Anti- Corruption Programs. C. AUDIENCE AND LINKS TO STAR ACTIVITIES 13. The study is primarily intended for policy makers and senior practitioners working in the field of asset recovery. At the national level, policy makers will include senior officials and technical staff working in government agencies responsible for specific aspects of the asset recovery process including financial sector oversight authorities, anti-corruption agencies, law enforcement, the judiciary, ministries of foreign affairs and international development agencies. At the international level, the policy makers and practitioners will include technical staff of international organizations, multilateral institutions and international networks supporting asset recovery activities. This audience already has some familiarity with asset recovery issues, though often from only one institutional or professional perspective. The team intends that the study will be used by these policy makers and practitioners at both an operational and a policy level. 14. At the operational level, the study seeks to increase awareness of the key actors involved in asset recovery at the national and international level. This will assist key actors identify linkages, potential areas for collaboration and strengthen networks between institutions. 15. At a policy level, the study seeks to inform discussion on the evolving configuration of the international architecture on asset recovery. Policies impacting on 4

6 the architecture are formulated at the national level and through agreements of member states and states parties to conventions. The study will provide information to policy makers on the current architecture, its strengths and weaknesses as well providing concrete proposals for adjustments and innovations. 16. The team intends that the study should also be useful to a broader audience, including policy makers and stakeholders not directly involved in the asset recovery activities. These include staff in international development agencies, to help them position asset recovery within their governance work at the country level. Other stakeholders include civil society organizations advocating for progress in asset recovery, to help them identify key players and inform their advocacy for adjustments in the international architecture. 17. Furthermore, the study will help inform the implementation of StAR s work plan. At an operational level, the study will help the Secretariat identify key institutional partners for StAR s support to networks and the audiences for its analytical work and knowledge products. The study will also inform the design of these products (such as the Asset Recovery Handbook) by highlighting institutional roles and responsibilities and gaps in the institutional architecture. At a strategic level, study will help inform decisions regarding StAR s role in the institutional architecture by highlighting the gaps in the institutional architecture that StAR initiative should seek to fill in the short, medium and long term. D. PROCESS AND PARTICIPATION 18. The study will follow a four step process. a) Constitution of the expert group and contracting of the lead consultant. The study will be undertaken by the TTL in collaboration with a consultant (the team) and a small (ten to fifteen person), multidisciplinary expert group. The expert group will include senior policy makers and technicians from the range of national and international institutions engaged in the various stages of the asset recovery process. The expert group will be selected in consultation with the StAR Secretariat. Participants are expected to include:..during the initial stages of the study, the expert group will be polled by telephone and regarding the appropriate scope and structure of the study and its products. b) Desk Review. The team will undertake a desk review drawing on available published, on-line and unpublished sources, complemented by telephone contacts with key stakeholders. Based on the information gathered through the desk review the team will prepare a draft report. The report will respond to the issues identified in the objectives for the study. The proposals for adjustments and innovations in the international architecture may developed or presented only at the concept stage, simply providing a sense of the issue to be addressed and possible solutions. c) Expert Group Meeting. The draft report will be submitted to the expert group for comment, serving as the basis for discussion at an expert group meeting. The expert group meeting will focus on the proposals for 5

7 adjustments in the institutional architecture and potential innovations, advising the team on the feasibility of the proposals, their relative priority and proposals that require further analysis. The expert group will also be asked to advise on the configuration of the deliverables with a view to reaching the appropriate target audience. The expert group will be asked to provide written comments prior to the meeting. The comments will be used to structure an agenda to permit the meeting to take place over one day. d) Finalization of the Study. The team will finalize the study and key deliverables taking into account the recommendations of the expert group. Where the team and expert group have identified proposals as requiring further analysis and development. The team may contract specialists to undertake follow-up analysis that may be incorporated in the final report and deliverables. 19. The Governments of Netherlands and the United Kingdom have expressed special interest in the proposed study. Representatives have agreed to act as peer reviewers for the study. The Government of the United Kingdom has also indicated that it would be willing to contribute by financing specific follow-up analysis and co-sponsoring a dissemination event. E. KEY DELIVERABLES 20. The team will deliver a final report, responding to the objectives laid out in section B above and taking into account consultations with key stakeholders and the recommendations of the expert group. The report will include a short executive summary (no more than four pages), a main report (no more than thirty pages) and annexes. The annexes will include: simple, visual representations of the architecture for international asset recovery as currently structured and the proposed adjustments and innovations; summary descriptions of each of the key institutions; a typology of roles and functions for institutions at the national level; and technical analysis supporting key proposals for adjustments and innovations in the architecture. 21. The team will also deliver products to support the dissemination of the results of the study and promote dialogue with key stakeholders. These will include: a power point presentation covering the scope of the study aimed at an audience of policy makers and practitioners in the field of asset recovery; a discussion note of two pages aimed at senior decision-makers, highlighting the key recommendations from the report; and a discussion note on the role of international development agencies in the asset recovery process. This specific deliverable responds to a request by the DAC GOVNET Anti-Corruption Task Team. 22. The team will present progress reports subject every six months during implementation (first report scheduled June 2009) and undertake an impact assessment six months after delivery of the final report. The report and impact assessments will monitor progress against indicators for process and outputs, intermediate outcomes and outcomes (see Table 1). The focus of the outcome indicators and the design and scope of the impact assessment be determined at the decision meeting. The impact assessment will be undertaken by the task team. 6

8 F. DISSEMINATION 23. At this stage, the dissemination strategy will capitalize on StAR s engagement in international events in support of asset recovery rather than holding a specific dissemination event. The final report will be published on-line. A limited number of publications will be printed on standard paper. The team intends to make a presentation at the DAC GOVNET Anti-Corruption Task Team meeting scheduled for March 2009 drawing on the draft report. This presentation will focus on the role of development agencies in asset recovery. The team, and StAR Secretariat colleagues, will incorporate the results of the study into their dialogue with national authorities and international institutions as well scheduled outreach events. This will include presentations at events scheduled by GOPAC, CARIN. The study will also be included in the package of materials presented at the third Conference of State Parties to be held in Doha in November Depending on progress the status of discussions with key stakeholders at this point, the team may request a side event focusing on the global architecture for asset recovery. 24. The proposed dissemination strategy will be reviewed at the decision meeting, at which point it will be possible to identify schedule the international events where the study will be discussed and the nature of dissemination activities at these events. 25. DfID has expressed interest in co-sponsoring a dissemination event on the global architecture for asset recovery alongside a major international conference should the results of the study point to proposals that of sufficient weight and interest to a broad range of policy makers. 26. The team expects the members of the expert group, who will have contributed to the design of the study and its proposals, to complement StAR s dissemination efforts. As informed, well-placed policy makers, these partners are well placed to use the study to inform and structure debate on the development of the international architecture for asset recovery. G. TEAM AND IMPLEMENTATION ARRANGEMENTS 27. The activity will be task managed by Tim Steele (StAR Secretariat & UNODC). For administrative purposes, the activity is Bank-managed and mapped to PREMPS. An individual consultant will be hired to prepare the key deliverables under the supervision of the task manager. The consultant will be hired for a period of forty working days. This will include participation in the meeting of the expert group. The consultant will be selected on a competitive basis, through comparison of CVs. Terms of reference will be posted on e-consult. Additional consultants may be hired to prepare follow-up analysis, up to the amount of ten working days. 28. Peer Reviewers are Piers Harrison (DfID), Dennis de Joeng (Netherlands Ministry of Foreign Affairs), and (UNODC) and Jean Pesme (World Bank). H. BUDGET AND TIMETABLE 29. The overall budget is presented in Table 2. Expenditures from StAR Multi-Donor Trust Fund will cover preparation costs: hiring of short-term consultants; travel costs for the consultant and two StAR Secretariat staff to Europe for the expert group meeting; workshop costs, including the travel of up to fifteen participants to the expert group 7

9 meeting. Expenditures covered by UNODC are the task manager, through the staff member assigned to the StAR Secretariat. Administrative support will be provided by the StAR Secretariat. Administrative staff time will be charged to the World Bank budget for this task as required. The budget does not provide for dissemination activities, since these will be incorporated in StAR s on-going outreach efforts at international events. 30. The schedule of disbursements from and estimated expenditures covered by the StAR Multi-Donor Trust Fund is presented in Table 3. The timeline for deliverables is presented in Table 4. Activities will be completed by the end of June

10 Table 1: Results Framework INDICATORS OF SUCCESS MEANS OF VERIFICATION Key institutions are involved in the preparation and dissemination of the study Study meets quality standards and is responsive to requirements of key stakeholders PROCESS AND OUTPUTS Composition of expert group Follow-up by members of expert group at international events Expert Group s comments on first draft and external peer reviewers comments on final product Study is timely Study delivered in time for key dissemination events (first draft in time for GOVNET meeting and final product for COSP) Study is used by intended audience to support operational work and / or policy development Study provokes discussed in key international bodies INTERMEDIATE-OUTCOMES Telephone / follow-up with a small number of policy makers in sending and receiving jurisdictions and international organizations Proposals and issues raised in the study are reflected in agenda and minutes of key international meetings Study reaches broad audience Number of times study is downloaded from StAR website Study informs policy decisions in sending and/or receiving jurisdictions and/or international organizations OUTCOMES Telephone / follow-up with a small number of policy makers in sending and receiving jurisdictions and international organizations Key proposals implemented Monitoring of institutional reforms (including through study on lowering the barriers to asset recovery in key financial centers) 9

11 Table 2: Overall Budget World Bank UNODC StAR MDTF Units USD Units USD Units USD Short-Term Consultants (weeks) 10 37,500 Extended-Term Consultants (weeks) Staff Costs (weeks) 4 15,000 Contractual Services Travel Expenses (trips) 3 15,000 Equipment Costs Media Costs Workshop Costs (participants) 15 22,500 Total 4 15, ,000 Other Table 3: Scheduled Disbursements from the StAR MDTF I II I II Short-Term Consultants (weeks) 37,500 Extended-Term Consultants (weeks) Staff Costs (weeks) Contractual Services Travel Expenses (trips) 15,000 Equipment Costs Media Costs Workshop Costs (participants) 22,500 Total 75, Table 4: Processing Schedule Concept Review Meeting December 18, 2008 Contracting of Training Service Provider January 31, 2009 First training event February 28, 2009 Expert Group Meeting March 31, 2009 Second Draft Report April 30, 2009 Decision Meeting May 15, 2009 Final Report May 30, 2009 ACS Impact Assessment November 30,