U4 Anti-Corruption Resource Centre

This Anti-Corruption Helpdesk brief was produced in response to a query from a U4 Partner Agency. The U4 Helpdesk is operated by Transparency International in collaboration with the U4 Anti-Corruption Resource Centre based at the Chr. Michelsen Institute.

Query

What recent examples are there of success stories at country level from international work on anti-money laundering and asset tracing/recovery and support for financial intelligence units? What are the existing tools/indicators to measure the effectiveness/impact of these approaches which are not just about the process?

Purpose

We are particularly interested in any success stories which demonstrate an impact on people's lives, savings in public losses and concrete policy changes.

Content

  1. Following the money: progress in anti-money laundering (AML) approaches
  2. Repatriating the money: asset recovery success stories
  3. Measuring the impact of AML and asset recovery
  4. References
  5. Appendix: potential indicators for SDG target 16.4 on illicit flows

Summary

There are few documented “success stories” in AML and asset recovery in the literature. Some progress has been achieved in AML in the last two decades, with many countries adopting AML regimes and complying with the Financial Action Task Force (FATF) recommendations. In spite of this progress, implementation and enforcement of AML standards remain low.

The recovery process of stolen assets is complex and characterised by decade-long international legal processes with limited return compared to the estimated US$20-40 billion that are stolen annually from developing countries. There are few recent examples of successful asset recovery cases, apart from the four well documented asset recovery processes in Nigeria, Peru, the Philipinnes and Kazaksthan.

There is, therefore, little evidence of the impact recovered assets and AML have on poverty alleviation, and there are no mechanisms in place to systematically track this impact. In fact, the literature points to a lack of theoretical and empirical work to measure and track the impact of AML/asset recovery processes. There is a need for robust oversight mechanisms as well as continuous monitoring of the use of recovered assets to ensure that they are used properly and efficiently for development outcomes and poverty alleviation.

Authors

Marie Chêne, Transparency International, mchene@transparency.org

Date

18/05/2017

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