The Stolen Asset Recovery Initiative (StAR) is a partnership between the World Bank Group and the United Nations Office on Drugs and Crime that supports international efforts to end safe havens for corrupt funds. Operating under the Financial and Private Sector Development Vice Presidency, StAR works with developing countries and financial centers to prevent the laundering of the proceeds of corruption and to facilitate more systematic and timely return of stolen assets. The Bank’s work on the StAR initiative is undertaken as an integral part of its overall work on governance and anti-corruption, known as the “GAC Strategy”.
StAR’s work is built on four pillars which may be summarized as follows: (1) empowering countries by helping them to establish the legal tools and institutions required to recover the proceeds of corruption and develop the specific skills needed to pursue asset recovery cases; (2) promoting partnerships by working with governments, regulatory authorities, donor agencies, financial institutions, and civil society organizations from both financial centers and developing countries, fostering collective responsibility and action for the deterrence, detection and recovery of stolen assets; (3) fostering innovation by generating knowledge on the legal and technical tools used to recover the proceeds of corruption and promoting the sharing of global best practices; and (4) supporting the application of international standards by advocating for the strengthening and effective implementation of Chapter 5 of the UN Convention Against Corruption and other international standards to detect, deter and recover the proceeds of corruption.
The Role of the Legal Vice Presidency in the StAR Initiative. The Legal Vice Presidency has been actively engaged with the StAR team at each stage of the initiative, such as: (1) drafting of the StAR Concept Note; providing the StAR team with legal advice on the legal parameters for the initiative; (2) collaborating to the development of a guidance on country engagement under StAR outlining permitted activities in this area, such as assistance with audits aimed at tracing possible stolen assets, legal research, financial analysis, and broad legal advice and assistance on preparing requests for mutual legal assistance (MLA); and (3) acting as peer reviewers for StAR products and publications.
Legal Aspects of the StAR Initiative. As an integral part of the Bank’s overall GAC work, the StAR Initiative plays an important complementary role in the Bank’s efforts in the area of governance and anti-corruption. Such efforts include the Bank’s involvement in the criminal justice sector, which is not precluded under the Bank’s mandate, provided that proposed interventions are grounded in an appropriate and objective economic rationale and are structured so as to avoid interference in the political affairs of a member country. Successful asset recovery has an immediate and direct economic benefit through the recovery of funds that would otherwise have been lost. It is a key element in deterring corruption, which is widely recognized as a major obstacle to development and growth. Furthermore, it promotes greater accountability and transparency and has significant potential benefits, such as supporting institutional reform and the effective functioning of the rule of law.
In light of the ‘political prohibition’ in the Bank’s Articles of Agreement, the Legal Vice Presidency recommended a risk management approach to political interference issues, with a case-by-base assessment of the risks and the measure that may be taken to mitigate those risks. Cases related to stolen asset recovery are generally set against a background of partisan politics, forming part of a larger struggle between rival political forces. As highlighted in the Legal Note on "Bank Involvement in the Criminal Justice Sector":
The Bank must be particularly sensitive in such cases to both the perception and the reality of interference in the relevant member country’s political affairs, since the Bank may all too easily find itself unwittingly drawn into the political affairs of its member counties. As a general matter, therefore, […] the Bank would be well advised to focus its engagement in the criminal justice sector principally on institutional capacity building, technical assistance and other activities that address sector or sub-sector-wide issues.
Since assistance to member countries in recovering stolen assets is the most legally challenging aspect of the StAR Initiative, the Legal Vice Presidency advised the StAR team to focus on generic capacity building for dealing with stolen asset recovery under the overall rubric of implementing the UN Convention Against Corruption, analogous to the Bank’s pre-existing work on money laundering, thus avoiding involvement in specific cases that may have political implications. Along the same lines, the Legal Vice Presidency counseled that direct support for specific cases would constitute the sort of interference in the internal political affairs of a member country that the political prohibition is meant to proscribe. This is not to say, however, that the Bank may never support specific cases of law enforcement. As stated in the Legal Note:
There may be cases where it is beyond doubt that there is little or no potential political implications to a particular case. There may also be cases where counter-considerations weigh in favor of support: in cases involving the diversion of Bank loan proceeds, for example, consideration of the political prohibition must be weighed against the Bank’s fiduciary duty under the Articles to ensure the proper use of loan proceeds. And there are activities ancillary or preparatory to potential specific cases that the Bank may support without incurring undue political interference risk, for example, forensic audits, financial analysis and other forms fact-finding, as well as briefings on relevant legal requirements, that would inform a decision whether or not to pursue a case.
The Legal Vice Presidency noted that working within the parameters of international norms, such as the UN Convention against Corruption, will ensure compliance with the Bank’s constituent instrument and minimize the risk of charges of political interference. In assisting practitioners and facilitating international cooperation, as with other aspects of the StAR initiative, the Bank should maintain strict neutrality by playing the role of an “honest broker” without taking sides in any dispute between members. As the matter is one to be judged on a case-by-case basis, the Legal Vice Presidency works together with the StAR team to assess and manage risks.