Sanctions As a Tool For Asset Recovery: Moldova
This research study assesses the current state of play in the use of sanctions as an asset recovery tool, examining their application in Moldova, and their prospects for addressing grand corruption.
To date, the effectiveness, drawbacks, and limitations of using sanctions as an anti-corruption at the global and regional levels to respond to cases of suspected grand, cross-border corruption has not been assessed. In part, this is because the use of sanctions for cases of corruption is rather new and is usually tied to human rights abuses or cases of political instability.
However, because of this and the political nature of sanctions and their growing usage as one of the anti-corruption tools, there is room to consider whether this approach is the most effective to take or whether other mechanisms, such as those based on legal processes, could be more effective and more rules-based in fighting this form of corruption.
- The Billion Dollar Bank Theft through which USD 1 billion was stolen from the country brought about economic crisis and severely damaged Moldova’s image and credibility.
- Despite pressure from the public and the international community, Moldovan authorities have failed to bring any substantial results in the investigation of the alleged financial crimes, recovering the stolen assets, and punishing those responsible.
- The withdrawal of financial assistance by the IMF, World Bank, and EU to the country in response to the theft did not produce any meaningful change to the way the authorities responded.
- The implementation of a number of international sanctions regimes were advocated for to aid Moldova in its fight against kleptocracy. This included civil society campaigning for the introduction of a Global Magnitsky Act in Moldova itself, and the imposition of Magnitsky-style sanctions against Moldovan kleptocrats by the EU and the US. To date, however, little has been adopted.