GAB is pleased to welcome back Robert Packer, from the University of Nanterre, who contributes the following guest post:
Article 57 of the United Nations Convention Against Corruption (UNCAC), which outlines provisions concerning the return of stolen assets, was the most contentious piece of the entire convention. A straightforward reading of Article 57 appears to require state parties to return assets “on the basis of a final judgement in the requesting State Party” (emphasis added). Often, however, a final judgement is not forthcoming. Article 57 addresses that contingency in its final paragraph, which provides for “agreements or mutually acceptable arrangements, on a case-by-case basis, for the final disposal of confiscated property.” That gives rise to another extremely contentious question, discussed previously on this blog (see here, here, and here): Is it legally permissible for states that confiscate the assets to attach conditions on their return?
Claimant countries would claim that the answer is no. First of all, they argue, attaching conditions to the return of assets would violate principles of sovereignty and non-intervention provided for in Article 2 Paragraph 7 of the United Nations Charter. Whereas placing conditions on foreign aid is accepted as a legitimate intervention, withholding a state’s stolen property is not. Furthermore, the state that seized illicit assets in its territory (the “holding state”) has no legal right to this property, and may be at least partly responsible for its theft and concealment in the first place.
Holding states argue, however, that they should not be obliged to return stolen assets to a country where there is a high probability that these assets will once again be lost to corruption. On this view, the claimant state’s right to the property is outweighed by the international interest in the prevention of corruption, an interest affirmed through UNCAC. Attaching conditions to the return of stolen assets (in those cases where there has not been a final judgment in the claimant country, one that holds someone accountable for the theft) also goes towards fulfilling victims’ rights to the truth and guaranties of non-repetition. Therefore, the argument continues, it is sensible to assume that Article 57’s final paragraph implies that conditions on the return of assets (in the absence of a definitive final judgment in the claimant country’s courts) are permissible so long as those conditions further those anticorruption ends.
This latter way of understanding Article 57 is attractive: it does not give a carte blanche to holding states, and permits conditions only so long as those conditions contribute to the suppression and prevention of corruption, and to the reparation of victims. These conditions must be in furtherance of those legitimate ends of UNCAC, and must be proportional. This “proportionality” approach might help resolve what has long been a bone of contention between holding and claimant parties.
Interesting views on an admittedly contentious topic.
I think it is fair to distinguish between stolen assets and foreign aid. They are not analogous. Foreign aid includes funds lent to third countries. It is reasonable to attach conditions to state resources (and tax payers funds) lent to other countries. It is also reasonable to attach conditions to grants. This applies in the public and private sectors. Stolen funds on the other hand – while secreted in foreign jurisdictions – are not owned by tax payers or lent to third countries. They were stolen from the victims of corruption and brought illegally into the holding country’s jurisdiction. And in many cases, in regulated financial institutions.
The travaux préparatoires record negotiators’ understanding of UNCAC as a framework that would allow for legally enforceable and appropriate ways for return within the diversity of the legal systems involved. These principles are also articulated in the GA resolution and Secretary-General Anan’s comments. UNCAC was not intended to, and does not include the creation of powers to determine the budgetary allocations of victim countries.
UNCAC was created as a framework for cooperation. While UNCAC does provide for “special considerations” in concluding agreements, it does not support unilateral imposition of conditions.
Article 57 should be interpreted within that context.
Perhaps we should also give attention to subparagraph (c) of the same article 57 (3): “In all other cases, give priority consideration to returning confiscated property to the requesting State Party, returning such property to its prior legitimate owners or compensating the victims of the crime.”
This topic is fascinating. I wonder if you could explain a bit more about what you mean by “proportionality” in terms of conditions placed on return to the claiming state. Who would determine whether the holding state’s conditions are proportional? Is there room for a third-party to arbitrate disputes related to the “proportionality” of conditions? If so, would that be a good idea, and is there an existing entity well-suited to serving that role? Thanks for an interesting post.
Thanks for your comments Nathan and Oluwafunmilayo, I think I can respond to both with just one comment of my own. Oluwafunmilayo, I agree with your interpretation of one of the functions of the UNCAC being the prevention of the unilateral imposition of conditions upon claimant countries. Hence, article 57 should be read in this context, but perhaps as a derogation (in the case of non-conviction in the claimant country). Unfortunately this is as far as the convention goes, giving us no further details on just what these ““agreements or mutually acceptable arrangements” might consist of. For me, subparagraph (c) of the same article 57 (3): regarding the “legitimate owners or … victims of the crime” doesn’t really help us, it seems to open up far more questions than it clarifies. Now, whereas there is no need to restate the clear distinction between foreign aid and returning stolen assets, a similar debate on the legitimacy of conditions has long been going on within the aid sector; a debate from which anti-corruption academics and practitioners may be able to borrow from. It seems that after around 30 years, the aid community have reached some kind of consensus on conditionality which is embodied in the Paris declaration on aid effectiveness and the Accra agenda and has at its heart the principle of ownership. This principle is supposed to ensure proportionality between the desires of donor countries and the sovereignty of aid recipients by requiring that conditions are only justified when based upon a legitimate development plan of the recipient state. Progress indicators have been established which can be used to hold contracting parties to account through an OECD Working Party on Aid Effectiveness. Despite their flaws, I think many of these mechanisms could be borrowed from and improved upon in order to begin putting together a legal framework for the large proportion of restitutions that occur largely outside the UNCAC framework. I would naturally be inclined to prefer this happen at the UN level (rather than an organization such as the OECD or G8) given the required by-in of claimant countries being more important for asset restitution than foreign aid. Also, the potential of a more “hard-law” approach at the EU level is an exciting one but given the current political situation, still just an idea.
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