Recovering the proceeds of corruption

Abstract

Purpose -Until very recently there was little real concern in governments and inter-governmental organisations to address the problems and issues of corruption in the context of sustainable development and stability. This article aims to focus on the present situation with regard to asset recovery in the domestic and international arena. Design/methodology/approach -The article takes the form of an analysis and discussion of the present situation. Findings -The new United Nations Convention on Corruption represents a significant achievement in the on going fight against those who seek to corrupt societies. It does not and cannot provide a panacea. There are numerous compromises, fudges and lacuna. However, it does point in the right direction in regard to many issues and provide a vehicle for those pursuing the fight against corruption. Originality/value -The article provides some pointers for the interdiction and recovery of the proceeds of corruption.

Corruption: delving into the muddy water through the lens of Islam

“…The limited approach, according to Polzer (2001), is based on the common Western conception of corruption, and to anthropologist Gupta (1995) who made an early contribution to the international scholarly debate about corruption, is predicated on a particular European cultural and historical experience which is far from universal. Rider (2007), thus, rightly points out that it is an arduous task to come up with an exhaustive definition of corruption since its meaning can vary at different times in different societies.…”

Rethinking the internal mechanism of the EGMONT group in financial crime control

“…Money laundering is an old crime with a new name, in contrast to Blum (Blum et al, 1998) that the term money laundering was coined around 1920 by the American gangsters, hiding of wealth has been in practice as far back as the eighteenth century[1] when men began to hide their wealth so as to either avoid or evade tax, money laundering is not necessarily repugnant or illegal as prudence might have necessitated the weaving of secrecy around one's wealth (Rider, 2007). Firstly, hiding the proceeds of crime or proceeds of legitimate income so as to evade tax is a crime, again it is doubtful to assert that the sole aim of money laundering is to evade tax because, whilst tax evaders are likely to underreport the earnings of legal enterprises to pay less tax than legally required, money launderers on the other hand, would rather over report the earnings of an illegal enterprise and therefore, pay more tax than would normally be required to legitimise an illicit wealth (Mitchell, 2004); secondly, under the exchange control measures, like the UK Exchange Control Act, 1947Act, (repealed in 1979, British residents were prohibited from holding currency in foreign jurisdictions to help the state maintain currency reserves and balance of payment, thirdly, under the civil law of tracing,[2] stolen property that has been transferred or hidden even if it is in a thirdparty's account can be traced, identified and recovered.…”

“…The only recent development is the recognition of money laundering as a separate offence, compared to other classical offences like stealing, fraud and corruption; invariably, these classical offences are predicate crime of money laundering. However, money laundering began to receive judicial recognition around 1982 (Hinterseer, 2002), the scope and meaning of which has been largely influenced by legislations and judicial interpretations (Rider, 2007).…”

“…Generally, money laundering is the process of concealing illegally obtained wealth through devises that make it appear legitimate, it is a process of transforming illegal activities or unlawfully acquired money into legitimate capital through an infinite number of mechanisms of financial transaction (Alldridge, 2008), the oldest forms of which are Hawalah in the middle East and parts of North Africa [4] and Hundi systems in India[5] which operate outside the financial service system; hence, the transactions leave no audit trail (Hinterseer, 2002), they have capacity to transfer huge wealth, they have become useful for money launderers (Rider, 2007) and are susceptible to abuse by organised criminals, illegal goods and service providers, illicit drug and arm dealers and human traffickers.…”

“…Furthermore, the process of laundering stolen wealth is distinct from reverse money laundering, the latter process is utilised to finance terrorism, the source of which does not necessarily need to derive from criminal activities (Rider, 2007) because legal, clean money could be clandestinely utilised to finance terrorism because huge fund is not often required for financing of terrorism; therefore, it is very difficult to be detected via the existing SAR or TTD report regime except where fund is directly transferred to an identified terrorist group through financial systems. The challenges associated with detecting the sources of terrorist financing is demonstrated in recent years by escalation of local or national terrorist threats (Al-Qaeda in Afghanistan and Pakistan, ISIS in Syria, Al-Shabaab in Somali and Boko haram in Nigeria) from local to regional and global dimensions, control of which involve moral and public policy dilemma, particularly with regards to payment of ransom by governments when diplomatic and military interventions have failed, a good example was the negotiated release of 276 "Chibok girls" kidnapped on 14 April 2014 and the 110 "Dapchi girls' kidnapped" 19 February 2018 in the North East Nigeria when some arrested Boko haram terrorist commanders were exchanged for some of the kidnapped girls, under a Internal mechanism of the EGMONT group strong suspicion that the Nigerian government paid ransom to effect the release of the kidnapped girls (This day Newspaper, 2017; BBC News, 2017; CNN News, 2017; BBC News, 2018) because diplomatic and military interventions failed to provide result, and probably due to concerns that failure to pay ransom might put the lives of the kidnapped girls in jeopardy.…”