A. Article 57 UNCAC

Article 57 UNCAC lays out detailed rules on the return of assets. Its first clause provides that confiscated property ‘shall be disposed of, including by return to its prior legitimate owners, pursuant to paragraph 3 of this article, by that State Party in accordance with the provisions of this Convention and its domestic law’ (emphasis added). It is notable that Article 57(1) implicitly admits of ways to dispose of the confiscated property other than by its return to the Victim State. Moreover, the property should be returned to ‘prior legitimate owners’—no mention of any State here—whereas the following provisions of Article 57 speak of the ‘requesting State Party’. The notion of ‘prior legitimate owners’ is elaborated on later in this article when the concept of the victims of corruption is explored.

Article 57(2) stipulates that each party to the UNCAC shall take such legislative and other measures as may be necessary to ensure the return of property in compliance with the Convention. Thereafter, Article 57(3) clarifies the Holding State's obligation to return stolen assets:

These provisions show that the scope of the Holding State's obligation to return assets depends on the degree of the Victim State's involvement in the recovery process. Namely, the obligation of unconditional return is triggered if the following three conditions are cumulatively met: (1) the imputed crime is the embezzlement of public funds or the laundering of such funds; (2) the confiscation of the assets was executed in accordance with Article 55 UNCAC, which deals with how the Holding State must respond to a request for confiscation received from the Victim State; and (3) the confiscation took place on the basis of a final judgement in the Victim State. The Interpretative Notes to the Convention, which have been agreed to by the negotiating States Parties and must be taken to reflect their intentions, slightly mollify the requirement for a final judgment by providing that it should be waived if the offender is dead or absconded.Footnote ⁵⁷

Article 57(3)(b) covers the proceeds of offences under the UNCAC other than the embezzlement of public funds or the laundering of the proceeds of such a crime. It introduces an additional requirement that the Victim State must be able to establish its prior ownership over the confiscated property or achieve recognition of the damage it suffered from the crime.

Finally, Article 57(3)(c) includes within its ambit all other cases and requires no more than ‘giv[ing] priority consideration’ to the return of stolen assets. This is the requirement identical to that contained in Article 14(2) of the UNCTOC. It is this provision that applies to all cases in which the perpetrator's assets have been confiscated in legal proceedings launched by the Holding State.

It is worth emphasizing that Article 57 has direct bearing on the fate of monetary penalties collected in out-of-court settlements, which are particularly common in foreign bribery cases. In its report Left out of the Bargain published in 2014, the Stolen Asset Recovery Initiative (StAR), which was established jointly by the UNODC and World Bank, wrote that States where alleged bribery took place typically played a very limited role in settlement proceedings and only received 3.3 per cent of the total monetary sanctions levied.Footnote ⁵⁸ Accordingly, StAR recommended bolstering information sharing on foreign settlements with a view to allowing Victim States to participate in the respective proceedings and lay their claims to the monetary penalties that result from settlements.Footnote ⁵⁹ The proceeds of such settlements fall within the scope of Article 57(3)(c) UNCAC and do not have to be shared with the Victim State. However, consideration should be given to doing so.

The thinking behind Article 57(3) is easy to fathom. It would be inappropriate for a State to reap the benefits of investigatory and prosecutorial efforts that were entirely those of another State. Indeed, the listlessness of the Victim State can be viewed as an indirect indication that it is not serious about fighting corruption. In an extreme scenario, an all-encompassing obligation to return confiscated corruption proceeds would force the Holding State to hand them over to a kleptocratic regime that continues to exercise its grip on the Victim State.

Article 57(4) authorizes the Holding State to withhold its reasonable expenses from the repatriated amount. According to the Interpretative Notes, these only include ‘costs and expenses incurred and not (…) finders’ fees or other unspecified charges’.Footnote ⁶⁰ This provision has to be read in conjunction with other prescriptions of Article 57. It is true that the Holding State must not deplete the assets that are subject to return by deducting from them anything above its reasonable expenses. However, an unconditional obligation of return in the first place only arises in certain predefined circumstances under Article 57(3)(a)–(b), as just described. Lastly, Article 57(5) suggests mutually acceptable arrangements as something that States may resort to. As discussed later, this is the path that several States have taken.

B. Drafting History of Article 57 UNCAC

The UNCAC's drafting history provides some insight into the thinking behind Chapter V of the Convention. Asset recovery sat high on the UN's agenda from the outset of the negotiations.Footnote ⁶¹ According to Thomas Stelzer, one of the Vice-Chairmen of the Ad Hoc Committee for Negotiation of the Convention, it was also one of the most controversial issues.Footnote ⁶² Who should get to decide what to do with the confiscated assets was the major bone of contention. As early as during the second session of the Ad Hoc Committee, one of the issues discussed was ‘whether requested countries should have a role in distributing proceeds or simply transfer them back en masse, leaving distribution to the requesting countries’.Footnote ⁶³

In the ensuing negotiations, conflicting views were presented. The draft texts that had initially been tabled were ambiguous and oscillated between the two positions. Draft Article 61Footnote ⁶⁴ (Disposal of confiscated proceeds of crime or property) was jointly submitted by Austria and the Netherlands and modelled on the rather non-committal provisions of Article 14 UNCTOC.Footnote ⁶⁵ Under Article 14(2) UNCTOC, States Parties shall ‘give priority consideration’ to returning confiscated crime proceeds, while Article 14(3)(b) provides that special consideration shall also be given to arrangements for sharing such proceeds.

Latin American and Caribbean States were keen to see ‘the prompt return of assets … without any conditionalities or sharing’.Footnote ⁶⁶ A competing version of Article 61 was proposed by Mexico. It required States Parties to ‘enable’ their competent authorities to share the proceeds of crime with the Victim States ‘in cases when this would not entail damage to the property of those States’. The meaning of this provision is elucidated by Mexico's preferred draft of another article, namely Article 62 (Return of property to the country of origin in cases of damage to State property). It established an obligation on the part of the Holding State to ‘return to the country of origin property constituting proceeds of crime that has been obtained to the detriment of that country’. For the avoidance of doubt, Mexico's draft stipulated that ‘[i]n such cases, the property shall not be subject to the system of sharing between the requesting State and the requested State’.Footnote ⁶⁷

A different sentiment altogether was conveyed by an unnumbered article on the disposition of assets submitted by the US. It studiously avoided any reference to the Victim State whatsoever. States Parties would ‘to the extent permitted by domestic law … [g]ive priority consideration to transferring the recovered assets in such a manner as to compensate the victims of the crime or to return the assets to their legitimate owners’, as well as ‘consider sharing confiscated assets with foreign authorities that assisted in the investigation, prosecution or judicial proceeding leading to the confiscation’.Footnote ⁶⁸

Several delegations were unhappy with the US proposal because they felt that assets should be returned to the Victim State and the power of disposal over them should lie with it.Footnote ⁶⁹ An alternative suggestion was made by Pakistan, which envisaged an unambiguous obligation to return the assets to the Victim State. In its turn, the Victim State would be ‘responsible for making payments to the victims, potential claimants or rightful owners or other rightful recipients within the State’.Footnote ⁷⁰

By the fourth session of the Ad Hoc Committee, the differences of opinion among the delegations had crystallized. To resolve them, the Committee's Vice-Chairman responsible for asset recovery established an informal working group under the leadership of Switzerland.Footnote ⁷¹ Although the Committee's next session failed to forge a consensus, the working group produced a text that resembled in its structure what was to become the final version of Article 57. Building on it, India proposed at the Committee's sixth session a revised version which States Parties ultimately adopted as Article 57.Footnote ⁷²

The first paragraph of the Swiss draft had provided that the confiscated assets shall be ‘disposed of’ by the Holding State. Some delegations insisted that the wording should be changed to ‘returned to the country of origin’.Footnote ⁷³ India's proposal merged both formulations and gave the provision its final shape: ‘disposed of, including by return to its prior legitimate owners’. It left intact the Swiss suggestion that the assets must be repatriated if confiscated upon request of the Victim State and on the basis of a final court judgment from the Victim State. The provision that did not survive the Committee's sixth session was the stipulation in the Swiss draft that the purpose of asset recovery is to ‘make restitution to the victims of the crime or return such proceeds of crime or property to their legitimate owners’. The omission of this phrase must be taken to mean that its opponents gained the upper hand in arguing that the Victim State should remain unconstrained in how it uses the recovered assets.Footnote ⁷⁴

Eventually, the drafters of UNCAC managed to come up with a finely crafted compromise. In doing so, they strove to reconcile two opposing visions of asset recovery. One may be termed ‘return-focussed’. Represented by the South American States, it stood for the notion that the Victim State is entitled to recuperate its losses. The other approach may be called ‘discretionary’, and is best represented in the US draft. On that conception, the return of assets was a matter of the Holding State's generosity rather than of legal obligation. The US draft was strewn with qualifications such as ‘when appropriate’ and ‘to the extent permitted by domestic laws’.

Attempts to find the middle ground led to the discovery of a third path, which can be dubbed ‘desert-focussed’. It allowed the Victim State to demand the return of assets, but only as long as it was the driving force behind the confiscation. That way the Victim State would not freeride on the efforts of other governments; nor would the Holding State be placed in the impossible position of having to return stolen assets to the regime that has stolen them in the first place.

C. Implications of Article 57 UNCAC

Although the UNCAC has avoided the pitfalls associated with extreme positions, a cynic might question whether as a result it failed to make a significant contribution to the law. The obligation of unconditional return is effectively confined to situations when a foreign judgment is recognized and enforced. But assuming that a foreign judgment is successfully enforced, assets will be returned in conformity with such a judgment quite irrespectively of any international agreement. In other words, Article 57 UNCAC is, essentially, merely saying that confiscated assets must be returned to the Victim State in cases when the Holding State has enforced a judgment which orders that the assets be returned to the Victim State.

According to Dimitri Vlassis and Dorothee Gottwald, the practical import of Article 57 is to ensure that the Holding State can impose no conditions on the return of assets in situations that are covered by Article 57(3)(a). They rightly emphasize that what Article 57 does is allocate the decision-making power to either the Holding State or the Victim State depending on how the confiscation of corruption proceeds was secured. If the Holding State must return the assets, it cannot say that it will return them subject to conditions on their use:

As recognized in the statement just cited, the Victim State will nonetheless have to withstand some scrutiny in the courts of the Holding State as the former seeks to enforce a final judgment issued by its court. For instance, Switzerland will refuse enforcement if the proceedings that led to the judgment did not meet the standards of the European Convention on Human Rights or the International Covenant on Civil and Political Rights.Footnote ⁷⁶ It has also been argued that the Holding State may be in breach of its international human rights obligations if it enforces a foreign confiscation order that was issued in a proceeding marked by severe irregularities.Footnote ⁷⁷ Although this issue is distinct from that of how well the Victim State is governed, these matters are related and a perception that the Victim State is incorrigibly corrupt may in practice hinder the enforcement of a judgment issued by its court.

The impact of Article 57 may come across as surprisingly modest when considering that Article 51 elevates asset recovery to a ‘fundamental principle’ of the Convention:

However, the Interpretative Notes clarify that ‘[t]he expression “fundamental principle” will not have legal consequences on the other provisions of [Chapter V UNCAC]’.Footnote ⁷⁸ It is arguable that Chapter V of the Convention should be viewed as a valuable means of drawing political attention to asset recovery and raising the profile of the issue. It also contains other important provisions that deal with asset recovery, although this is not the place to examine them in detail. One should perhaps only note Article 53, which lays down three modalities of ‘direct recovery of property’ and thus enables the Victim State to seek judgment in its favour directly in the courts of the Holding State.

D. Swiss Experience: Lex Duvalier

It may happen that the Victim State takes some steps towards asset recovery at first but stalls thereafter, eg because of a lack of resources or political turmoil. From a legal standpoint, even if the Holding State freezes the assets pursuant to a mutual legal assistance (MLA) request from the Victim State, the Convention does not oblige the Holding State to repatriate these assets unless they are ultimately confiscated on the basis of a final judgment from the Victim State. But politically speaking, it may be particularly appropriate to seek a bilateral solution as to how the confiscated funds should be disbursed in such cases.

Haiti's initially energetic but then half-hearted attempts to recover the money stolen by former President Jean-Claude ‘Baby Doc’ Duvalier are an apt example of asset recovery efforts gone off the rails. Almost immediately after Duvalier fled the country, Haiti launched legal proceedings against him in France seeking a return of US$120 million. It also obtained a worldwide freezing injunction in support of these proceedings in an English court.Footnote ⁷⁹ But the Tribunal de Grande Instance de Grasse refused jurisdiction to rule over the claims that it held to be based in Haiti's public law.Footnote ⁸⁰ The Cour d'Appel d'Aix-en-Provence reversed the judgment in 1988 on the basis that the claims were of a private law nature; by that time, however, the assets had already been dissipated.Footnote ⁸¹ Moreover, two years later, the Cour de Cassation overruled the appeal ruling and reinstated the Tribunal's judgment. This outcome would now be incompatible with Article 53 UNCAC, which requires that Victim States be able to initiate civil claims and obtain compensation in foreign courts. More importantly, by 1988 Haiti had evidently lost its resolve to pursue Duvalier's assets in other jurisdictions and the recovery efforts ground to a halt. Haiti's lawyers were reportedly receiving no cooperation from the government and their bills were left unpaid.Footnote ⁸²

In response to the Haitian debacle, Switzerland, where part of Duvalier's funds had been frozen, enacted a law colloquially known as the Lex Duvalier that entered into force on 1 October 2010.Footnote ⁸³ The law enables forfeiture and repatriation of the assets frozen based on the Victim State's MLA request whenever further proceedings are impossible due to a complete or partial collapse of the Victim State's legal system. The freezing of the assets must also be in the Swiss national interest.Footnote ⁸⁴ Assets seized under the Act must be used ‘to improve living conditions for the people in the country of origin’ or ‘reinforce the rule of law in the country of origin’ pursuant to an agreement to be concluded with the Victim State.Footnote ⁸⁵ In December 2015, Switzerland amended the Act by adopting what some called the Lex Ben Ali, in a nod to ex-President of Tunisia.Footnote ⁸⁶ Under the Lex Ben Ali, the Swiss Federal Council can freeze the assets before receiving an MLA request and can provide information on frozen assets to the country concerned of its own initiative.Footnote ⁸⁷

While the Lex Duvalier is a trailblazing achievement in the field of asset recovery, it must be recognized that its enactment was possible thanks to the architecture of Article 57 UNCAC. Importantly, the Lex Duvalier sets conditions on how the returned assets must be used, namely to improve living conditions and the rule of the law in the Victim State. Moreover, the operation of the law is subject to the Swiss national interest proviso. None of this would be possible if the confiscated assets were always treated as the Victim State's property.

E. Bilateral Treaties

The UNCAC is the only multilateral anti-corruption treaty with detailed provisions on asset recovery. The Inter-American Convention against Corruption (1996) and the African Union Convention on Preventing and Combating Corruption (2003) contain generic provisions on the seizure of the proceeds of corruption and international cooperation.Footnote ⁸⁸ However, they do not clarify how assets are to be shared between the States involved. The Council of Europe's Civil Law Convention on Corruption (1999) demands that ‘[e]ach Party shall provide in its internal law for persons who have suffered damage as a result of corruption to have the right to initiate an action in order to obtain full compensation for such damage’.Footnote ⁸⁹ There is no clarification as to whether ‘persons who have suffered damage’ can include foreign States. If they can, then the effect of the Convention is similar to that of Article 53 UNCAC.

If States wish to agree on a legal framework for asset recovery that is more detailed than the UNCAC's provisions or otherwise differs from them, they should conclude bilateral agreements, as recommended by the FATF and at the 7th Conference of UNCAC States Parties.Footnote ⁹⁰ In early 2005, the UNODC convened an expert group to design a draft model bilateral agreement on disposal of the proceeds of crime covered by the UNCTOC and the UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. The US proposed a draft model treaty whereby confiscated assets could only be shared ‘where cooperation has been given by a Party (Cooperating Party) to a Party in possession of forfeited or confiscated assets (Holding Party) which facilitates the forfeiture or confiscation of assets’.Footnote ⁹¹ The version of the model agreement endorsed by the UN Economic and Social Council (ECOSOC) went along the same lines.Footnote ⁹² However, while the US draft made no mention of the UNCAC, the preamble to the ECOSOC's agreement made clear that ‘this Agreement should not prejudice the principles set forth in the United Nations Convention against Corruption or the development, at a later stage, of any appropriate mechanism to facilitate the implementation of that Convention’. This caveat evinces a perception that the UNCAC's asset recovery provisions are more detailed and therefore require a different approach to the sharing of assets than treaties dealing with other types of crime. However, it appears that no comparable model agreement has ever been designed under the UNCAC.

In September 2016, China and Canada signed an Agreement regarding the Sharing of Forfeited Assets and the Return of Property, but its text has not been made public.Footnote ⁹³ The treaty was reportedly still awaiting ratification as of June 2017.Footnote ⁹⁴ The conclusion of this treaty is apparently part of China's ongoing effort, dubbed Skynet, to repatriate the proceeds of corruption stashed away by absconded Chinese officials and secure their extradition.Footnote ⁹⁵ It is worth noting that, at the time of the writing, the US database of treaties in force contains no mention of an agreement with China on the sharing of confiscated assets.Footnote ⁹⁶

A. Objectives of Asset Recovery

As mentioned earlier, asset recovery serves two distinct objectives. The first is confiscatory in the sense that it is solely concerned with depriving the criminal of what is not lawfully his. This broadly framed objective could be further unpacked: for some, ensuring that the criminal does not profit from crime is an end in itself;Footnote ⁹⁷ others point to a variety of utilitarian purposes served by confiscation, such as reducing the economic appeal of crime or preventing the reinvestment of ill-gotten wealth in criminal enterprise.Footnote ⁹⁸ The end result is the same and the precept that crime should not pay is as uncontroversial as a criminal justice principle can be. The second objective of asset recovery is restorative in that it focuses on restoring the property to the victims. Ideally, both of these objectives will be achieved. However, they can also be in conflict.

If the primary objective of asset recovery is the actual recovery qua repatriation, then confiscation without repatriation is worth little. Conversely, if divesting the criminals of their ill-gotten gains outweighs other considerations, it is imperative to ensure that disagreements over the fate of the assets do not prevent their confiscation in the first place. Taking this reasoning one step further, it may even be permissible to put the Holding State's self-interest in the service of asset recovery by encouraging it to keep the recovered proceeds.

In his 2017 book The Despot's Guide to Wealth Management, Jason Sharman suggests that there is value to depriving the corrupt of their loot even if none of it ends up returned to the Victim State. Guided by this principle, Sharman proposes to harness the profit motive in asset recovery by engaging private actors in the capacity of litigation funders. Under such an arrangement, a private company would shoulder the costs of litigation, including legal fees, in return for a substantial proportion of the recovery:

A major attraction of this proposal is its potential to relieve the financial burdens on countries that may lack the wherewithal to aggressively pursue their claims. It would also shift the financial risks of a defeat unto the private funder/litigant. If this logic is taken to its limits, writes Sharman, it is appropriate for those States who feel unable to obtain recovery on their own to sell claims at a discount to private parties. This approach could open up a new market to vulture funds that are now in the business of purchasing distressed securities. The effect of this ‘Baptist and bootlegger coalition’ of States with vulture funds, Sharman argues, will be to harness the profit motive ‘in the effort to pursue and confiscate (if not return) kleptocrats’ ill-gotten gains’.Footnote ¹⁰⁰

While innovative, Sharman's proposal is a perfectly logical corollary of the principle that confiscating the proceeds of corruption is worthwhile even if they never make their way to the Victim State. This principle applies with at least equal force to the involvement of the Holding State as it does to vulture funds. Although the UNCAC says nothing about the role of private sector in asset recovery, it outlines the roles of the Holding State and the Victim State with a result that the former is entitled to keep the confiscated assets in a variety of scenarios. As mentioned earlier, this is subject to the stipulation that ‘priority consideration’ be given to retuning the property to the Victim State or its prior legitimate owners or, alternatively, compensating the victims.Footnote ¹⁰¹

If allowing States to keep the proceeds of corruption that they confiscate can galvanize anti-corruption enforcement, one should be careful not to deify the return of the assets to the exclusion of other legitimate considerations. The simplest and most natural way of heeding Sharman's call to harness the profit motive is by allowing the Holding State, and not vulture funds or private parties, to keep the confiscated property.

Objections against this proposal are likely to be based on the impropriety of a State benefitting, albeit in an indirect way, from a crime that took place elsewhere—in a sense, ‘stealing from the thief’. Besides, one could argue that the mere fact of the proceeds of corruption having been invested in the Holding State means it had failed in its AML controls, thereby acting as a quasi-enabler of the crime. Finally, if the Victim State is a poor developing country, the moral imperative of returning the proceeds of corruption is all the more pressing.

Although these are valid points, what they prove is that foreign States should do their best to provide maximum cooperation to the Victim State pursuant to Article 55 UNCAC when requested to do so. This does not mean that other States should take over the recovery of stolen assets in the interests of the Victim State when it is unable or unwilling to do so itself. One should keep in mind that the State where the crime took place is the most natural forum for any criminal or civil proceedings, not least because the evidence and witnesses are likely to be located there. As a consequence, a failure by the Victim State to take action against the alleged perpetrators can signal either a lack of political will or the incapacity of its law enforcement system. In either case, the repatriation of assets back to this country is arguably inadvisable. In those circumstances, the choice is essentially not between confiscation by the Holding State and a return to the Victim State but between confiscation by the Holding State and impunity.

This line of reasoning raises the question of whether the profit motive is an effective driver of anti-corruption enforcement by States. The obvious source of analogies is the FCPA enforcement in the US. Initially, the US government's decision to step up the enforcement of the Act was undoubtedly dictated by policy considerations. However, in a world of scarce resources and conflicting prosecutorial priorities, there are reasons to believe that its continued vigorous enforcement is at least partly due to the pay-offs that the Act generates for the US treasury.

At first, the FCPA had lain dormant for decades since its enactment in 1977.Footnote ¹⁰² A surge in enforcement took place in 2005 after the Bush administration expanded the numbers of staff responsible for FCPA investigations in the Securities and Exchange Commission.Footnote ¹⁰³ That was part of a concerted campaign against foreign corruption led by George W Bush, which included the promulgation of the National Strategy to Internationalize Efforts against Kleptocracy in 2006. This campaign responded to a perceived connection between corruption, organized crime and terrorism in rogue States such as Saddam Hussein's Iraq or Bashar al-Assad's Syria.Footnote ¹⁰⁴

Today, the prominence of the FCPA among the US anti-corruption tools is hard to overestimate. As mentioned earlier, 10 largest-ever FCPA enforcement actions as of December 2017 had netted US$6 billion in monetary sanctions, with eight out of 10 actions relating to the conduct of corporations headquartered outside the US.Footnote ¹⁰⁵ Mike Koehler has criticized the US DOJ for supposedly using the FCPA enforcement as a ‘cash cow’ by levying hefty fines.Footnote ¹⁰⁶ Matthew Stephenson argues that the FCPA enforcement is driven by policy values but its financial component is an added bonus:

It is worth noting that the US experience has not been replicated in other countries, with the exception perhaps of the UK, where in January 2017 the Serious Fraud Office entered into a deferred prosecution agreement with Rolls Royce whereby the latter agreed to pay £497.25 million plus interest.Footnote ¹⁰⁸ As of June 2014, the OECD's analysis demonstrated that only 17 out of 41 States Parties to the OECD Anti-Bribery Convention had sanctioned foreign bribery, the US being the leader with 128 enforcement actions and Germany coming second with 26 actions.Footnote ¹⁰⁹ It is telling that the State which levies largest fines is also the most active enforcer of foreign bribery laws.

Another insight of the FCPA enforcement is the alarming asymmetry in prosecutions, namely that many developing countries fail to take action against bribe-taking public officials after the bribe-givers have been prosecuted in the US.Footnote ¹¹⁰ The issue is neither limited to bribery alone, nor to the US prosecutions. When the convicted Nigerian governor James Ibori returned to Nigeria after serving his term in a UK prison, he was cheered by supporters and is reportedly contemplating a political comeback.Footnote ¹¹¹ This experience casts further doubt on the advisability of asset-sharing in situations when the Victim State has failed to take any meaningful anti-corruption action in the past, since the culture of corruption may persist in that country.

B. Victims of Corruption and Who Represents Them

Article 57(3)(c) UNCAC provides that in cases not covered by the preceding provisions of the same article States shall ‘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 mention of prior legitimate owners and victims points to the possibility of treating someone other than the Victim State as a proper recipient of the confiscated assets. This is in line with Article 35 UNCAC, which reads as follows:

Whether a person can bring a claim as a result of suffering damage due to an act of corruption will depend on the legislation of the State where the claim is brought. In principle, corruption hurts the State as a whole and all of its citizens can be seen as victims—in a similar way to the shareholders that are harmed by self-dealing of a company's directors.Footnote ¹¹² In acknowledgment of the corrosive impact of corruption, UN bodies have increasingly addressed corruption and asset recovery from the standpoint of human rights,Footnote ¹¹³ which is an approach that resonates with some academic commentators.Footnote ¹¹⁴

However, in many countries the doctrine of standing, or equivalent legal rules, requires that the claimant demonstrate a direct and specific interest in the matter before he or she is allowed to bring claims based on the conduct that harms a broad and potentially indeterminate range of individuals.Footnote ¹¹⁵ Such doctrines impede potential claims by individuals or NGOs who wish to take on a direct role in asset recovery.

On a conceptual level, there is some appeal in the prospect of actors other than the Victim State taking the lead in asset recovery. As then-President of the US Barack Obama said in his address to the Arab Forum on Asset Recovery, ‘[the stolen] money–potentially billions of dollars–does not belong to those who wielded power, it belongs to the people’.Footnote ¹¹⁶ Although this is in tension with a view of the government as the authorized representative of its nation, State authorities do not always fulfil that function in societies that find themselves in the grip of endemic high-level corruption. A natural solution is to look for legal ways in which the State's government can by bypassed so that the benefits of asset recovery accrue directly to the population.

Unfortunately, it is difficult to conceive of practical solutions. Since the State acts in the interests of all of its citizens, at least notionally, it would be inappropriate for any person, group of persons, or organization to seek recovery of the proceeds of corruption for its own benefit. One of the few feasible alternatives is an arrangement along the lines of the BOTA Foundation whereby an international charity or NGO disburses the confiscated funds for the benefit of the population of the Victim State. In like vein, the Holding State may commit the confiscated funds to its overseas development budget, especially if the money will be spent for the benefit of the Victim State.

To say that a charity should be entrusted by the Holding State with disbursing the funds does not mean that such a charity should be able to assert ownership in the assets and seek their recovery in the first place, or ‘represent’ the victim population who can assert its ownership. Allowing such claims would open up a significant potential for abuse, and the difficulty of fashioning appropriate legal rules would likely prove insurmountable. In contrast, NGOs such as Transparency International have demonstrated the capacity of non-State actors to initiate criminal investigations in some countries with favourable legal frameworks. That role too does not involve claiming any rights to the confiscated assets.Footnote ¹¹⁷

The issue of identifying the victims of corruption took centre stage during the 7th Conference of UNCAC States Parties, but the paper on this subject presented by the Conference Secretariat stopped short of making any notable recommendations. In fact, it noted that most States Parties do not even ‘explicitly address the right, set out in the Convention, of foreign States to stand before courts and receive compensation’.Footnote ¹¹⁸ The participants therefore encouraged the Open-Ended Intergovernmental Working Group on Asset Recovery, which was established at the 2006 Conference of States Parties, to continue its examination of the matter.Footnote ¹¹⁹

At the end of the day, one returns to the dilemma that dominated the UNCAC negotiations, namely whether it is the Holding State or the Victim State that has the say over the use of the confiscated funds. The role of third parties, such as anti-corruption NGOs, is in advocating that they be used in a transparent manner for the benefit of the victims. However, even the Holding State keeping the money for its own benefit is preferable to a situation where the criminal preserves his or her ill-gotten gains.