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Eva Van Der Merwe: Publications - Fighting Corruption in Sri Lanka

Updated: Jul 20, 2021

The fight against corruption is to intensify in Sri Lanka with new laws being proposed and worked on, including an online asset declaration system and non-conviction-based confiscation of assets from overseas accounts.

Commission to Investigate Allegations of Bribery or Corruption (CIABOC) Director General Sarath Jayamanne told The Sunday Morning that the Legal Draftsman prepared a second draft of the new anti-corruption laws and it will be submitted to the Sectoral Oversight Committee this week.

He said that archaic laws in Sri Lanka have hampered the authorities in the fight against corruption and the proposed new laws will remove most obstacles.

Jayamanne said that among the proposals made to strengthen the fight against corruption is an online asset declaration system. He said that this will ease the process for public service officials to submit their assets and for the authorities to check the information.

He also said that another obstacle faced by the authorities is recovering assets stored in overseas accounts without a conviction. There have been reports that some individuals, including politicians accused of bribery and corruption, have stored some of the illegally

acquired money in foreign accounts.

Jayamanne said the proposed new laws look at non-conviction-based asset confiscation so the authorities can seize assets from overseas accounts even while investigations are ongoing.

A foreign expert who was in Sri Lanka last week told The Sunday Morning that Sri Lanka can also look at working with other countries on sharing information with regard to the location of corrupt assets and how those assets can be frozen in those countries.

“The most successful enforcement agencies also work to instigate and maintain good working relationships with government investigators in oversees countries; they can help Sri Lanka’s enforcement agencies by sharing information on, for example, which corrupt individuals are entering their country, what assets they are purchasing, the location of corrupt assets and who owns and controls those assets, and how those assets can be frozen in those countries so that suspects cannot sell, hide, or dissipate those assets,” Eva van der Merwe said.

International Senior Lawyers Project (ISLP) Programme Director – Anti-Bribery and Corruption Eva van der Merwe and QC of the Eastern Caribbean Supreme Court, British Virgin Islands Circuit, Grand Cayman, and Turks and Caicos Islands Mark Rainsford were in Sri Lanka last week for a series of discussions with lawyers and others to share their expertise in proceeds of crime, money laundering, and international asset recovery.

The two experts noted that investing in enforcement is the key pillar of any successful anti-corruption strategy and that it must aim high.

“Everyone must be equal in the eyes of the law; there cannot be rules that apply to some but not others. If mid to junior-level officials are the only ones facing justice, and if enforcement action is only targeted against public sector bribery and not private sector bribery, loopholes will continue to be exploited by the corrupt. More senior, powerful individuals will always have greater opportunities to steal larger sums of money. So, leading by example can be a very effective approach, including by publishing asset declarations. It’s not necessary to prosecute every official accused of corruption, which can overwhelm an enforcement agency. If the most powerful in society are also equally subject to the rule of law, that approach can be an excellent example to set for the whole of society.

“Proceeds of crime laws can help empower enforcement agencies by giving them the tools they need to confiscate stolen assets so that crime doesn’t pay. But until very senior officials and powerful individuals accused of corruption are prosecuted, the public in any country will doubt there exists genuine political will for reform, and they may, justifiably, lack faith in the independence and effectiveness of enforcement bodies,” the two experts said.

Jayamanne said that a lack of knowledge among legal experts in Sri Lanka is among the reasons why it is taking a long time to draft more effective laws to curb corruption.

He also said that CIABOC managed to use its available resources and crackdown on bribery and corruption, although yet, it is not enough in the eyes of the public.

“The public doesn’t see what is going on in courts and behind the scenes. They want a big gun to be arrested. Only then will they be satisfied,” he noted.

Eva van der Merwe and Mark Rainsford QC noted that the corrupt can be very sophisticated in how they hide dirty money and therefore, it is essential that enforcement agencies use all the sources available to gather that information.

They noted that most recently, an NGO run by Hollywood actor George Clooney, called the Sentry, shared information with the Australian Police on the location of a multimillion-dollar mansion in Melbourne owned by a South Sudanese military official purchased with ill-gotten gains, so that the Police could seize that luxury property and sports cars with a view to returning the money to South Sudan.

“The most successful enforcement agencies widen their network of sources and relationships to include investigative journalists and civil society groups, at home and abroad, because they often have information on corrupt individuals or where stolen assets are hidden. In recent years, civil society and journalists have been instrumental in leaks such as the Panama Papers, which revealed a vast amount of information on corrupt assets hidden offshore, which enabled enforcement agencies and tax officials to go after those individuals,” the two experts added.

They also noted that technologies like telephone and internet banking, cryptocurrencies, and the use of offshore banking secrecy havens contributed to the ease with which the corrupt acquire and hide their ill-gotten gains.

“Law enforcement (authorities) need to quickly understand and seek to combat these emerging trends. The concept of beneficial ownership exists because the direct legal owner of an asset is not always the person controlling and benefiting from it. Recently, civil society calls for reform meant that the UK and EU governments are developing legislation to register and disclose the beneficial owners of companies and assets, i.e. the true owners or controllers of assets, to state investigators, so they can more easily trace and confiscate stolen assets. Asset declarations can also be a great tool to help identify and prevent corruption,” they added.

The two experts also noted that viewing corruption as rooted in culture can sometimes be an excuse for not targeting the problem scientifically in a rational, logical, and pragmatic manner.

“Corruption is opportunistic. Like water, it finds and flows through the cracks. Corruption manifests itself differently in different countries depending on the opportunities for corruption that are available. It may be more prevalent in certain, more secretive sectors like arms and defence contracts or in public infrastructure spending because more opportunities exist in those sectors. In some countries, corruption may be more prevalent amongst politicians, and in others, it’s a problem more commonly associated with multinational companies. The key to eradication is to identify those cracks and opportunities and tackle those with a specific solution such as ensuring that all elected representatives comply with asset declarations and face suitable penalties if they don’t comply,” they added.

Proceeds of Crime Laws (POCA) exist all over the world, including in the UK, the US, and South Africa. They provide a framework and toolset for enforcement agencies to remove stolen assets from those responsible for financial crimes, including corruption. CIABOC proposed similar laws in Sri Lanka.

The POCA regime is harsh and helps to deter criminals from operating in the UK and in those jurisdictions with POCA laws. Defendants in the UK who commit crimes together can be individually responsible for the entire sum obtained by all of them. Where four criminals – two armed robbers, a driver, and a lookout – rob a jewellery shop, for example, and if the only one of them with assets is the driver, he may be responsible for paying back the entire value of the stolen jewels.

This article was originally published here: Fight Against Corruption in Sri Lanka- the Sunday Morning (15 September 2019)

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