Industry officials have given a mixed response to a worldwide governmental pledge designed to block the flow of corrupt money into the global banking system following the Arab Spring. The resolution was signed by 140 governments last week at a United Nations (U.N.) anti-corruption conference in Marrakesh, Morocco.
The nations issued their support for a previous UN convention calling for proper anti-money laundering (AML) laws to be put in place in jurisdictions and put forward a new motion calling for banks to do more to prevent the money entering the system in the first place. The resolution made specific reference to the Middle East and North Africa (MENA) region and called for existing anti-money laundering laws to be more rigorously enforced. It also said that countries should do more to help return misappropriated money to countries.
The agreement also called for “non-conviction based asset recovery” where countries would not have to convict ex-leaders of corruption before funds are returned. At present countries largely require convictions of state leaders before they return money from banks. In practice this is a difficult process and is largely the reason why countries can wait up to 20 years for the return of money.
The move was welcomed by anti-corruption campaign group Global Witness, but a senior anti-money laundering expert questioned what more banks could do to help this process. The UN Convention Against Corruption (UNCAC), which meets every two years, saw Egypt lead a call for corrupt money stolen by dictators to be returned more easily to host countries. The meeting was the first time the countries have gathered since the Arab Spring, which saw the toppling of regimes in Libya, Tunisia and Egypt as well as widespread uprisings in the Middle East and North Africa.
The Egyptian delegation pointed to the difficulties it has had in getting hold of money spirited abroad by the old administration headed by President Mubarak. It said that much of the corrupt money, estimated to be in the region of $70 billion, had ended up in UK and Swiss bank accounts. It is understood that the country has become increasingly frustrated in its attempts to reclaim this money. The country has been “bombarded” with “requests for information” and other letters from the countries holding the rotten cash, which has held up the procedure. Egyptian officials have described the process as much like a game of ping pong. Officials from Tunisia, Nigeria, and Indonesia, countries that all have huge amounts of stolen money sat in overseas accounts, strongly supported Egypt’s stance.
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