Return Mechanisms

Return mechanisms describe the practice of returning recovered money across borders indirectly via third-party entities that stand between cooperating governments. These entities might be called in to aid in the negotiations, as well as in the process of the distribution of the returned assets, especially in situations where there are challenging relationships between the negotiating governments and when the receiving countries lack the necessary corruption controls to mitigate the risk of re-looting the assets.

In the past, asset returns have been channeled to the country of origin in this way through projects implemented by multilateral organisations, special mechanisms established for the purpose of the return, or through the involvement of non-governmental organisations. The BOTA Foundation, Abacha II, US – Equatorial Guinea and Jersey – Kenya returns are some examples of cases where third parties have been involved in the disposal of funds, and which are analysed in this paper. While not an exhaustive list of cases which involve third-party entities, they offer an indication into some of the economic, social and political challenges, as well as opportunities, that might arise with returns conducted through the use of third parties.

Benefits of this kind of return include, for example, increasing transparency and oversight of the return process by involving a third-party entity independent from the governments involved. This increased transparency and oversight, together with additional safeguarding measures usually championed by third-party entities, such as conflict of interest policies, can then lower the risk of misappropriation of the returned assets. This is especially relevant in countries with a weak rule of law or fragile contexts. Moreover, the third-party entities involved can provide additional capacity to the process, ranging from their programmatic strengths to oversight and negotiating skills.

However, the involvement of third parties often comes at a cost of higher administrative and financial burdens versus directly returning assets. The amount of these additional costs directly depends on the number of safeguarding measures and layers of oversight that are placed upon the return, which might need to be higher in politically challenging contexts. Another challenge is that these third-party entities are often chosen in closed-door negotiations between governments and not following an open tendering process or CSO perspective, which raises transparency and accountability concerns.

What we’re doing

CiFAR’s work on asset management over the past years has been to analyse different methods for return and engage in discussions around how to best incorporate principles of accountability, transparency and participation into the process.