Research Topics

Publications

The U4 Blog

Learning & events

About Us

U4 Issue

Asset recovery and illicit financial flows from a developmental perspective: Concepts, scope, and potential

Returning the ill-gotten gains of corrupt officials to their rightful owners has become a global priority since the adoption of the United Nations Convention against Corruption (UNCAC). Assets acquired through corruption and then transferred abroad are part of the broader phenomenon of illicit financial flows (IFFs), which deprive developing countries of their domestic resources. According to some estimates, tens of billions of dollars are lost to different kinds of IFFs from Africa every year. Asset recovery as envisaged by UNCAC offers a path to repatriate the share of IFFs that relates to corruption, although the total amount recovered so far pales in comparison to the estimated outflows. How can asset recovery serve development goals? Practitioners and activists can build on a range of initiatives from development cooperation, mutual legal assistance, and rules concerning financial transparency. New policies in the United States, Switzerland, and the United Kingdom show how key jurisdictions increasingly take a progressive stance on asset recovery and work with developing countries to overcome obstacles. Yet challenges and blind spots remain. To make the most of the existing tools, political objectives must be aligned across several dimensions of foreign policy and financial regulation.
18 September 2019
Download PDFRead short version
Loading PDF…

Main points

  • Assets acquired through corruption and transferred abroad are part of the phenomenon of illicit financial flows (IFFs), which deprive developing countries of huge domestic resources.
  • Policymakers and practitioners can build on a range of initiatives to ensure asset recovery efforts serve development goals.
  • Key jurisdictions, including the US, UK and Switzerland, increasingly take a progressive stance on asset recovery and work with developing countries to overcome obstacles.
  • Despite the high issue salience since the early 2000s, it is not clear whether enforcement action has increased significantly.
  • Foreign assets under dispute are massive in scale: the mean value is US$450 million, with the median case still valued at US$22 million.
  • Although there are a moderate number of proceedings ongoing, asset recovery has the potential to make significant economic impacts for developing countries.
  • Researchers and practitioners interested in IFFs from an anti-corruption angle must pay attention to nuances in method and terminology.
  • The politics of international asset recovery unfold not just during summits or in the boardrooms of intergovernmental organisations. Equal attention must be paid to what happens in financial centres around the world.

Cite this publication


Lohaus, M.; (2019) Asset recovery and illicit financial flows from a developmental perspective: Concepts, scope, and potential. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Issue 2019:12)

Download PDFRead short version

About the author

Mathis Lohaus

Political scientist and post doctoral researcher at the Otto Suhr Institute, Freie Universität, Berlin, Germany.

Disclaimer


All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)

Keywords


illicit financial flows, asset recovery, sustainable development goals, financial integrity, money laundering, anti-money laundering, corruption, United States of America, United Kingdom, Switzerland, EU – European Union, UNCAC – United Nations Convention against Corruption, EITI – Extractive Industries Transparency Initiative