Statement by Huguette Labelle, Chair, Transparency International on the Stolen Asset Recovery (StAR)
Tranparency International Press Release
New York, 17 September 2007.
Transparency International (TI) welcomes the Stolen Asset Recovery (StAR) Initiative of the World Bank and United Nations. It is an important element of the Bank’s comprehensive attack on corruption. The programme, which will provide resources to help countries locate and repatriate assets lost through illicit acts, is a wake-up call to those who steal and to those who facilitate or harbour stolen assets.
Corruption’s drain on resources available to alleviate poverty, disease and illiteracy is profound. The annual cross-border flow of proceeds from criminal activity, corruption and tax evasion is estimated by the StAR report at between US $1 trillion and US $1.6 trillion. Furthermore, bribes received by public officials from developing and transition countries are estimated at US $20 to $40 billion annually. Indeed, these estimates are roughly equivalent to the Bank’s total annual lending portfolio.
Transparency International has long called for action to end safe havens for such funds and to secure their return to their rightful owners. Our national chapters around the world actively supported inclusion of strong provisions for this purpose in the UN Convention against Corruption (UNCAC) in order to ensure cooperation between developing and developed countries.
Realising the full potential of these legal requirements will require political will and strong support from many stakeholders. Locating, freezing and repatriating stolen assets will require cooperation among governments seeking recovery, from financial institutions holding the assets and from the governments that regulate these institutions and provide offshore accounts.
Civil society must play a key role in the implementation of StAR, and that critical role must be reflected in the initiative’s structure.
The World Bank and other donors can also play a supportive role. They can assist governments with the skills and resources to navigate complex procedures and legal requirements, and support their efforts to implement the UNCAC’s provisions on budget, expenditure and procurement transparency.
They can also create transparency and accountability mechanisms to ensure that the returned funds are used to benefit the citizens. Countries can also sanction publicly held companies that are complicit in corruption, and promote compliance by financial centres with anti-money laundering rules.
Well performing judiciaries and financial systems are essential to fighting corruption, and nations should support their development where they are deficient.
The StAR initiative is an important development, adding a powerful deterrent to those seeking to plunder their nation’s wealth and to those who have wilfully or inadvertently provided them safe havens. With strong top-level leadership from these institutions, from governments and from the banking and legal community, StAR can be a valuable component of the broader anti-corruption reform agenda.
In addition, all countries must ratify UNCAC, the global legal framework essential for the success of initiatives such as StAR. To date, four of the Group of Eight countries have not yet ratified: Canada, Germany, Italy and Japan.