Moves to freeze assets heat up

Asset Freeze Focus: The asset freeze is on in the Arab world as governments scramble to find former dictators' money and give it back to the people. Finding and returning assets, however, won't be quick or easy.

60m francs' worth of assets belonging to the toppled Tunisian president Zine el Abidine Ben Aliwere frozen, the Swiss foreign ministry said. Fethi Belaid / AFP Photo

The international financial crackdown on leaders of Arab countries where protests flared this spring continues to intensify.

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Last Updated: May 04, 2011

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The US last Friday imposed asset freezes on Maher al Assad, the brother of the Syrian president Bashar al Assad, and Atif Najib, his cousin. The US also imposed new sanctions on the country's general intelligence directorate and Ali Mamluk, who heads the agency. They are accused of overseeing military units that violently put down protests, resulting in the deaths of at least 400 people.

The sanctions are only the most recent in a growing list of asset freezes and other financial pressure brought to bear against embattled and deposed Arab leaders including Zine el Abidine Ben Ali, the former Tunisian president, Hosni Mubarak, who was ousted as Egypt's president in February, and Muammar Qaddafi, Libya's leader.

Lawyers and investigators have made progress finding and freezing dictators' assets after the UN joined the EU and dozens of individual countries in imposing sanctions against them this year. Swiss authorities yesterday announced they had put the brakes on almost US$1 billion (Dh3.67bn) of deposits held in the country's banks by Mr Mubarak, Col Qaddafi and Mr Ben Ali.

But asset tracing and recovery experts say getting back money squirrelled away by fallen Arab dictators is likely to take years, if not decades. With all the resources of their governments behind them, they say, the former leaders hired skilled lawyers and other highly paid advisers to hide their ill-gotten gains.

"Dictators may be dictators, but they're still heads of sovereign governments," said Richard Blaksley, a partner at GPW, a corporate investigation company based in London. "If you're in charge of a country's banks, you can do some clever stuff."

To illustrate their difficulties, investigators hark back to cases such as that of the late Sani Abacha, who presided over a corrupt Nigerian regime between 1993 and 1998. After Abacha's death in 1998, the country's new government began an investigation into corruption estimated to have robbed the country of about $8bn. Today, some $2bn of those assets have been frozen and only $1.2bn returned.

Enrico Monfrini, a Swiss lawyer who has led the charge to recover Abacha assets since 1999, said in a report on the case two years ago political co-operation, civil lawsuits and criminal complaints - the main tools at asset-recovery experts' disposal - had many faults.

"The main weakness of mutual assistance in penal matters as a tool for asset tracing and recovery is its slowness," he wrote in a brief published by the Basel Institute on Governance. "Even in the most co-operative jurisdictions, it usually takes at least one year until the documentary evidence relating to transfers of proceeds of crimes is transmitted to the requesting authority. In most cases, it is then too late to trace the assets to other jurisdictions in time to freeze them."

Getting the money back requires close co-operation between international judicial, legal, political and law enforcement bodies - a complex network of people who rarely work together. When countries are in states of transition, as in Tunisia and Egypt, repatriating stolen assets comes with the added challenge of not knowing exactly on whose behalf lawyers and governments are acting in returning the money. Then there is the ambiguity that sometimes arises about whether pools of assets are personally controlled by dictators or by their governments, an uncertainty that can throw up further legal obstacles.

"We hate the person who invented the term 'asset search', because it sounds so easy to be successful at," Mr Blaksley said. "It's deeply complex and that's why it takes a long time."