Preventing Illicit Funds From Entering the EU: Lessons From the Arab Spring

“Misappropriation used to be a taboo, as it was the regime that was doing the misappropriating.” So said Mr. Mohamed Askri, member of the Tunisian Committee for the Recovery of Misappropriated Assets Abroad at today’s European Parliament seminar on the Arab Spring and Asset Recovery.

Transparency International joined a debate with a diverse range of speakers, including representatives of the governments of Tunisia,  Libya and Egypt. The message was clear: political will is absolutely necessary, but so are practical steps to help facilitate third countries’ attempts to repatriate assets held in European financial centers.

Asset recovery is a complex process. From the variety of legal structures of different EU member states, to the need to differentiate between those assets which are legally held from property which has been acquired with stolen funds, it all means that recovering stolen assets is a lengthy and drawn out process. Almost two years after the toppling of Ben Ali, the Tunisian government, in the words of its representative, is still waiting ‘for a single bean to come back’. By way of assurance, the External Action Service predicted that the first repatriation of Tunisian assets from an EU member state will take place next month.

Whilst the discussions focused on the steps that the EU and EU member states can take to help facilitate the process of asset recovery, speakers were resolute; the EU needs to do more to ensure that stolen funds cannot enter EU financial markets in the first place. In other words, banks and other financial institutions need to get better at turning away transactions if the source of funds or the owner of an asset cannot be easily accounted for.

In this context, the EU’s ongoing revision of its Anti-Money Laundering regulations is key. The Transparency International EU Office has been campaigning to ensure that the new proposals, the initial draft of which is expected from the Commission early next month, must do more to increase rates of compliance.

Specifically, this means regular reviews of the compliance rates of covered institutions, as well as the enforcement of adequate sanctions to deter those institutions covered by anti-money laundering regulations from engaging in risky behaviour  To this end, the TI-EU office is especially interested in proposals which are expected from DG Home Affairs later in the year, which will explore the harmonisation of criminal sanctions for money laundering offences across EU member states.

My colleague Nienke has written a blog post looking at what the EU could do to further address the issue of stolen assets.

Picture – anitakhart NC

One thought on “Preventing Illicit Funds From Entering the EU: Lessons From the Arab Spring

  1. Pingback: Stand up and deliver! More EU action on stolen assets | Transparency International EU Office

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