Stolen wealth

Nobody really knows how much money public officials have stolen and hidden outside of Sri Lanka.

Previous government estimates made in 2015, put the number at a minimum of $ 10 billion. For a comparison, that’s about the cost of eight Hambantota Port projects.

But there’s a chance that some of that money, which is held in offshore bank accounts, could be seized and brought back to Sri Lanka.

At a recent conference in Washington, D.C., Attorney General Jayantha Jayasuriya said that Sri Lanka’s financial crimes units have made 34 mutual legal assistance requests to other countries on international asset recovery cases.

Asset recovery, or the process of retrieving money that was taken by public officials through corruption and hidden in offshore bank accounts, requires intense collaboration between foreign countries and banks and the home jurisdiction.

Speaking at an international conference on asset recovery earlier this month, Attorney General Jayasuriya said, “Sri Lanka is trying hard to achieve the objective that we all are gathered here and expecting to achieve: the fight against corruption and to have the stolen assets being brought back to the jurisdiction, to the benefit of its rightful owners.”

Asset recovery around the world

Executive Director of Transparency International Sri Lanka, Asoka Obeyesekera.

Asset recovery is a complex, tedious, and hard-fought process. It requires legal cooperation between law enforcement agencies, banks and lawyers across international borders.

Perhaps the most famous example of asset recovery, which may hold important lessons for Sri Lanka’s new attempts at asset recovery, is the case of former Filipino dictator Ferdinand Marcos.

Marcos ruled the Philippines with an iron fist for more than 20 years, amassing an estimated $ 10 billion while in office. After a revolution overthrew him in 1986, he and his wife Imelda fled their presidential palace as the military turned against them, bringing along jewellery, ivory and gold bricks.

One of the first moves new President Corazon Aquino made was to establish a “Presidential Commission on Good Government,” tasked with finding and returning Marcos’ stolen billions to the Philippines.

30 years later the commission is still running and has recovered about $ 4 billion; less than half of what experts think Marcos accumulated through corruption and graft. Nobody from the Marcos family or their associates, has been imprisoned for their crimes.

Asset recovery in Sri Lanka

Legal analysts say that in Sri Lanka, the current framework of laws will slow down any attempt at asset recovery.

Asoka Obeyesekera, the Executive Director of the anti-corruption non-profit Transparency International Sri Lanka, said asset recovery under the current system requires a criminal conviction in court: a process that can take many, many years.

But according to him, “We don’t need to depend on criminal justice proceedings to ensure that assets can be recovered and returned to Sri Lanka.”

Obeyesekera said that countries around the world are turning towards civil law to recover stolen assets, in what is known in legal jargon as “non-conviction based civil forfeiture.”

“The idea of putting somebody behind bars and recovering stolen assets are linked issues, however they require very different approaches,” he said in an interview. “On the legislative side, there is a need to look at newer innovations in anti-corruption work.”

The World Bank’s Stolen Asset Recovery Initiative recognizes the statutory need to convict, as one of the main barriers faced by countries for asset recovery.

“In most jurisdictions, a criminal conviction must be obtained before stolen assets can be confiscated,” analysts for the World Bank write in a 2011 report. “Convictions can be especially problematic if corrupt officials prevent or delay criminal investigations.”

The authors recommend lowering the burden of proof for the United National Convention against Corruption offences, which Sri Lanka is signed on to, and to shift the burden of proof so that the alleged offender must prove that his or her assets are in fact from a legitimate source.

The World Bank estimates that $20 to $40 billion is lost to developing countries each year through corruption. Changing Sri Lanka’s legal framework, they suggest, could begin to bring some of that money back.

Attorney General Jayasuriya recognized this as well in his speech in D.C. earlier this month.

“The need to further enhance and strengthen this legal regime has been well recognized and acknowledged in the recent past,” he said.“The insufficiency of the current legislation in relation to stolen property to deter offenders and serve the needs of the society was further highlighted.”

President’s task force

J.C. Weliamuna, the Chairman of the Presidential Task Force for the Recovery of Illegally Acquired State Assets, said that even though the international asset recovery process in Sri Lanka is young, it’s off to a solid start.

“It’s only in the last two and a half years that most of these things are being addressed positively,” he said in an interview.

But, Weliamuna also acknowledged that Sri Lanka faces significant barriers to asset recovery.

“At the moment we don’t have a proceeds of crime law here,” he said. “We are in the process of drafting one and by mid-next year that law will come into operation.”

He said the recent asset recovery conference in D.C. was encouraging and gave Sri Lanka, as one of the four countries highlighted, a unique international platform.

“Previously our investigators had no international exposure. But meeting with World Bank representatives and foreign investigative counterparts face-to-face would do much to ease asset recovery cases in the future,” he said.

He pointed to the recent and successful conclusion of a Nigerian case involving Swiss banks as an inspiration.

On December 4th, the Swiss and Nigerian government signed a Memorandum of Understanding with the World Bank to return to Nigeria $ 321 that was taken by military ruler Sani Abacha.

“With all these things, we will reap the harvest in due course,” Weliamuna said.

The future

Asset recovery requires a lot of political will. The cases of Filipino dictator Ferdinand Marcos or Nigerian military leader Sani Abacha, for example, didn’t get off the ground until they were run out of power, or dead.

Obeyesekera, of Transparency International, worries that the lack of public communication by the government now, could jeopardize Sri Lanka’s cases in the future.

“Public communication is essential,” he said. “Because even if there was a change of government tomorrow, and as there is zero public communication at the moment, all of the work that has been done up to now would amount to nothing, because nobody has communicated anything.”

“We have a government that has its entire mandate anchored on anti-corruption,” he added. “Asset recovery is a key component of it and you need to be able to communicate some momentum.”

Disclosing specific names and amounts of money could harm investigations.

“But you can give out certain amounts of information without jeopardizing investigations,” Obeyesekere said. Knowing just how much is out there and how many cases the government has opened, could be a start. 

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