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Leading the Way on Recovering the Proceeds of Corruption


Martin Kenney

The head of Peru’s judiciary, Javier Arévalo Vela, recently publicly highlighted Peru’s success in recovering the proceeds of corruption and related financial crimes through its non-conviction based forfeiture law, Extinción de Dominio.

The subsystem Peru has rolled out to implement the law “allows the state to recover money from cases of corruption, money laundering and more,” Vela said at a recent conference run by the Swiss organization, the Basel Institute on Governance. Around $64 million has already been recovered, with many more cases in the pipeline.

This all highlights the inroads Peru is making into fighting corruption through non-conviction based forfeiture. Many developed states have similar laws designed to frustrate those who would pilfer the public purse, but there will be others wondering if such legislation is advantageous, if it does not already exist: the answer should be a resounding “yes.”

Legislation of this type removes the need for lengthy and expensive criminal investigations that will likely fizzle out, leaving the wrongdoer to hang onto illicit gains. By implementing a process using the civil-law burden of proof, the state can right the wrong and ensure that crime does not pay.

There may be those who find this premise draconian and unfair, who see such a process as being in conflict with human rights and open to abuse. If you have significant wealth and assets, it should be straightforward to account for these if asked to do so. It’s unlikely that you can be a civil servant earning $60k per annum and have a private yacht berthed off Monaco; however, if you do, then you should be able to evidence the derivation of this wealth.

However, the concern that there is the potential for abuse of process by a rogue state is also valid. History is littered with examples of political opponents falling foul of those in power and being stripped of their assets. The question is, then, do we rule out such powers for the many on the basis that a few may abuse them?

There is no easy answer to this quandary. My perspective is that a rogue state will abuse its citizens and political opponents regardless of whether there is a law in place allowing non-conviction based forfeiture. However, those countries with the willingness to embrace the notion that corruption is wrong and that it needs addressing can be guided in developing legislation that fits the bill and, as importantly, shown how these powers need to be wielded fairly and justly.

Therefore, the Basel Institute and its partners should be congratulated on their efforts, as must the Peruvian government and judiciary who are embracing change and making a difference on behalf of their people.

SOURCE: ACFE Insights – A Publication of the Association of Certified Fraud Examiners

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