Wed, Jun 29, 2016

Opportunities and Challenges Facing New UK International Anti-Corruption Initiative

At the recent Anti-Corruption Summit in London, the establishment of the International Anti-Corruption Coordination Centre (IACCC) was announced, which will be based in London and hosted by the UK’s National Crime Agency (NCA).

The press release accompanying the Summit described IACCC’s role as to “strengthen cross-border investigations.” We anticipate this collaborative initiative will provide synergies such as closer cooperation, increased knowledge-sharing, and potential shorter and quicker decision-making processes. However, whilst such synergies may be gained, there are legitimate concerns over potential duplication of effort between the parties involved.

In order to meet the challenges faced in dealing with complex and multifaceted cases, the IACCC will be partnered with Interpol, the U.S., Australia, Canada, New Zealand, and Switzerland. With the NCA as host, the IACCC will be co-located with the International Corruption Unit (ICU), itself formed last year, and funded by the UK’s Department for International Development (DfID). This co-location could potentially result in a duplication of effort and put a significant strain on resources.

Currently the ICU concentrates on cases with a UK nexus, but the IACCC is proposed to have a far broader remit. This remit is described by the NCA as:

“to provide a platform that can bring together law enforcement agencies from around the world to ensure a coordinated and effective approach to tackling grand corruption, kleptocracy and related money laundering threats wherever they arise.”

What are the challenges facing the anti-corruption initiative?

Whilst these are laudable aims, the requirement to tackle “threats wherever they arise” doesn’t exclude the IACCC from tackling issues with a UK nexus. It therefore strongly hints at potential overlap of the activities of the ICU and the IACCC, particularly at the operational level where the nuances of competition and cooperation will need to be finessed to avoid wasted efforts. Assuming that this issue can be satisfactorily resolved, we anticipate the IACCC to face a number of further significant challenges considering that globally over US$1 trillion is paid in bribes each year.

Indeed, the scale of the tasks facing the IACCC was further evidenced by U.S. Secretary of State John Kerry’s recent remarks that some tens of billions of dollars were stolen from Nigeria by generals and put into other nations, including some $350 million which they are looking to restore. And Nigeria is just one of many nations that will be demanding the return of their assets.

President Buhari of Nigeria’s statement: “I’m not going to demand an apology, what I’ll demand is a return of assets”, was swiftly followed by former Prime Minister David Cameron’s commitment to the IACCC, and stolen asset recovery. Is the IACCC going to be expected to quickly facilitate the repatriation of stolen funds to their country of origin? If so, this could be an unfair expectation, taking into account: a) the scale of global bribery with over US$1 trillion paid in bribes each year; b) that we currently have no clear indication of the resourcing in terms of manpower and capacity the IACCC will possess; and c) that ultimately any claim made against funds considered to be stolen sovereign wealth will need to be made by the home state to the country that is holding them, i.e., it requires the political will of the home state to successfully recover stolen assets.

Legal claims will need to be made in order for stolen assets to be returned to their original nations. The many assets currently frozen across the world awaiting the resolution of such cases which have stalled or been discontinued due to a lack of political will or insufficient evidence readily attest to the complex nature of cross-border asset recovery.

In addition, unless the fundamental principles of international cooperation, knowledge-sharing, and true political desire to take rigorous action are demonstrated by all of the developed nations, the temptation will always remain simply to transfer assets to nations less actively supporting the work of the IACCC.

Despite these concerns, we warmly welcome the introduction of the IACCC. We hope that it will receive the funding and resourcing in order to make it a successful initiative, staffed with personnel experienced in the recovery of assets. It is noteworthy that progress has already started with the NCA currently recruiting staff to fill vacancies at both operational and management levels, with the intent to develop a functioning International Anti-Corruption Coordination Centre within the next 12 months.

Notable Kroll asset search and recovery cases

Kroll has an unmatched record of successful fraud investigations and unparalleled experience in the field of asset search and recovery. We have worked closely with a number of prosecutorial, law enforcement, and political bodies in the recovery of state assets and in the investigation of bribery and corruption cases, including the multijurisdictional searches for assets hidden by Liberia’s Charles Taylor, the Philippines’ Ferdinand and Imelda Marcos, Haiti’s Jean Claude “Baby Doc” Duvalier, and Iraq’s Saddam Hussein.

Authored by Angela Barkhouse, Associate Managing Director, and Gary Brogan, Senior Director, from Kroll’s Investigations and Disputes practice, based in the London office.

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