The struggles of the Mubarak-era asset recovery process

Daily News Egypt
8 Min Read

By Waleed Nassar

Egypt’s post-revolution efforts to repatriate Mubarak-era assets have garnered widespread international attention since his ouster in 2011.There are serious questions concerning what progress has been made over the past year and a half, however, as the international recovery process has not yielded the results many had hoped.

For instance, only three countries have officially frozen funds, the United Kingdom, Switzerland and Spain, with varying degrees of actual oversight, despite the great likelihood that illicit assets have widely proliferated across the globe into numerous other countries.

Similarly disconcerting, several countries where Mubarak assets are rumored to have landed, including the United States and Canada, have enacted largely symbolic measures, failing to freeze a single dollar worth of assets.

Some opine that the lack of results stem from a largely un-sympathetic international community that does not desire to come down too hard on Mubarak, a once loyal former ally. This, however, fails to capture the full picture, as the reasons for the frustration of Egypt’s attempts run much deeper than a weak international will to assist.

Recently, news of the UK’s failure to properly freeze Mubarak-era assets has come to light. The British Treasury’s Asset Freezing Unit had frozen approximately $138 million in Egyptian assets after Mubarak’s fall, however, asix-month BBC investigation, broadcast in September, highlighted public documents showing that Mubarak assets in London had yet to be frozen by the UK government.

This, despite the UK’s public commitment to do so and a European Union sanctions agreement that they signed in March 2011 requiring the same.While various accusations of wrongdoing have been levelled at the UK government, it is important toidentify the proper causes for complaint.

The Egyptian government has valid concerns regarding the UK’s shoddy administration of their asset freeze. For instance, as the BBC investigation uncovered, many bank accounts and real property of regime officials that were supposed to have been frozen were not.

This, in all likelihood, has allowed for the funds to move outside the UK, invariably adding further layers of complexity and challenges towards ultimate recovery of those sums. The British have also stymied the Egyptian authorities’ investigation into the nature and ownership of the frozen assets, citing domestic privacy laws. Due to public backlash in the wake of the BBC investigation, however, the British were quick to appoint experienced practitioners to assist the Egyptians to navigate those very same privacy laws.

The Egyptian government pronouncements have also, at times, illustrated a misapprehension of the specifics of the UK’s failures, as well as a greater lack of understanding of the general asset recovery process.For example, some Egyptian officials have publicly complained that it should be easy enough for the British to return the assets, as they have already been located and frozen, and that their refusal to do so evidences bad faith. This misconstrues the process.

Asking the British Treasury to return the funds is similar to requesting an arresting officer to conduct a trial of an arrested person, secure a conviction and pronounce a sentence.Just as the officer merely has the authority to locate and arrest an individual and it is for the judicial system to determine guilt and dispense justice, the same too goes for illicit asset repatriation.

The UK has strict laws and procedures for asset repatriation, even after a freeze, and the Egyptian government will have to navigate the proper legal channels to satisfy the procedural and evidentiary hurdles before ultimate recovery of the frozen funds.

More broadly speaking, the transitional Egyptian government failed to take the proper steps to ensure a smooth path to recovery of illicit assets housed abroad.Egyptian prosecutors did not secure convictions on the corruption charges that were laid against Mubarak and his two sons in the recent “trial of the century,” although they did get convictions related to the ordering of the deaths of the estimated 850 people killed in the revolution.

Without underlying domestic findings of law clearly stating that the funds in question were gained through illicit means, there is shaky foundation upon which to build the asset recovery process.The evidence of wrongdoing is in Egypt, comprising of documents and witnesses, not in the foreign countries where the assets lie.

Rumours and innuendo simply do not satisfy the high legal burden of proof necessary to allow for repatriation of the assets.Going forward, Egypt needs to aggressively pursue the necessary convictions and predicate legal findings needed to effect proper recovery. If they choose not to, it will be disingenuous for any Egyptian official to blame failure on outside countries.

It is necessary to understand the exact reasons for the troubles, so as to determine how best to proceed to obtain maximum recovery. Despite the challenges ahead, and the limited successes the asset recovery process has achieved, the window to recover the assets frozen is still open. For example, the Swiss have provided a three year period for the Egyptians to effect repatriation of the over $700 million frozen there, while Canada has provided a five year window for potential freezes.

Additionally, Egypt’s greater efforts to track undisclosed assets have barely scratched the surface and with proper forensic investigation and coordinated legal efforts many new avenues of recovery may emerge. Conducting a thorough asset recovery process necessitates more than sending a delegation of officials to diplomatic meetings abroad and receiving assurances from various governments, but, rather, requires a much more sophisticated approach than what has been exhibited to date.

Mubarak and his corrupt cadre of cronies are known to have employed many of the most sophisticated international accountants and lawyers illicit money can buy, and to retrieve that money will require a level of sophistication that is on par.The road to ultimate recovery will invariably be long and fraught with a multitude of hurdles, however, it may successfully be navigated with proper legal understanding and a domestic political will to press forward.

Waleed Nassar is an associate at Lewis Baach PLLC,specialising in international dispute resolution and foreign asset tracing and is a member of the Egyptian American Rule of Law Association

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