Fourteen years after its first ‘ill-gotten gains’ case, France now has the opportunity to be a global leader in combating transnational corruption: its planned mechanism for the restitution of illicit assets to affected populations promises to become a model for others to follow.
In December 2007 a French court dismissed charges against a number of foreign leaders accused of sheltering their fortunes in France — fortunes amassed by embezzling money in their home countries. The following day, several NGOs, including Transparency International France, published a petition calling for the restitution of these ‘ill-gotten gains’ (biens mal acquis) to the populations affected by these illicit practices.
After 14 further years of investigations, prosecutions, petitions and pressure, a crucial step has been taken to achieving just that: France’s National Assembly has finally addressed the issue of restitution of ill-gotten gains.
On 2 March 2021, within the framework of the draft legislation on solidarity-based development and the fight against global inequality, the National Assembly unanimously adopted a series of provisions allowing assets confiscated in so-called ‘ill-gotten gains’ cases (for example the Obiang case) to be returned to the populations in the countries of origin. Through the spring of 2021, senators will examine the legislation to refine and reinforce the restitution mechanism.
France’s law for tackling global inequality will support restitution efforts
Once a foreign politically exposed person has been convicted by a French court of laundering the proceeds of corruption or of laundering embezzled public funds, their assets can be seized, confiscated, and then sold off. Under the new law, the revenues from the sale will no longer end up in the French state budget, as is currently the case, but will be returned ‘as close as possible to the population of the foreign state in question’, with the aim of financing ‘co-operation and development initiatives’.
In practical terms, specific budgetary lines will be created under the auspices of the Public Development Assistance Mission, which falls under the Ministry of Foreign Affairs. Ring-fencing the revenues in this way gives the Ministry of Foreign Affairs the flexibility to decide on a case-by-case basis how funds will be returned. For example, funds could be allocated to the French Development Agency, to international organisations like the World Bank, to local or international NGOs, or directly back to the national treasury of countries of origin.
This budgetary ring-fencing should also ensure the traceability of funds from the very beginning of the restitution process and, more importantly, should prevent the funds from being absorbed into the French state general budget.
It is critical that these funds be clearly accounted for independently France’s development assistance budget. This is a vital measure for ensuring transparency, and we should never lose sight of the fact that these funds are neither donations nor loans: they are embezzled money that never belonged to France.
Transparency, accountability and inclusion must be part of the process
While the restitution mechanism is a first step, it is still in need of refinement in order to honour its objectives: ensuring that the restitution funds reach the affected populations and do not find their way back into corruption networks.
To achieve these objectives, transparency, accountability and the inclusion of civil society in France and in the countries of origin — guided by GFAR principles and by the Civil Society Principles for Accountable Asset Return — need to form the backbone of the restitution process.
Studies of past restitution processes, orchestrated for instance by Switzerland, the US or the UK, and under the monitoring of international financial institutions such as the World Bank, provide concrete examples of good practices and show us what happens when fit and proper procedures are not in place. Wherever processes have not been open and transparent, restitution of assets has failed, nurturing mistrust and reinforcing the vicious circle of corruption and embezzlement. Transparency, accountability and inclusion of civil society need to be explicitly written into law to guarantee the integrity and efficacy of the restitution process.
France can lead the way in responsible restitution of illicit assets
On 14 April the Senate’s Foreign affairs Committee examined the draft legislation and enshrined such principles, giving the Senate the opportunity to adopt an ambitious restitution mechanism in the weeks ahead. Fourteen years after French civil society organisations initiated the first ill-gotten gains cases, and a few months away from the Court of Cassation’s decision on the Equatorial-Guinean dossier, the road to effective restitution of ill-gotten assets to affected populations is still a long one. France, however, is well placed to put forward a model of responsible restitution of illicit assets which could inspire numerous countries and which could deal a powerful blow to transnational corruption.
All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.
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