How to seize a billion: exploring mechanisms to recover the proceeds of kleptocracy
The Russian Ruble is falling through the ice, some of it is still on the surface. Photography: Metelevan.
March 2023
Research Paper 16
Maria Nizzero, Royal United Services Institute (RUSI)
SOC ACE Project: Exploring mechanisms to recover the proceeds of kleptocracy
PUBLICATION SUMMARY
The imposition of sanctions against the ‘oligarchs’ following Russia’s invasion of Ukraine has triggered a policy conversation about the potential to move ‘from freeze to seize’: achieving permanent confiscation of assets that are currently temporarily frozen under sanctions. Acting against the oligarchs’ assets represents a way for the UK government to reaffirm its intention to support Ukraine, but also to show that the UK is not a haven for the proceeds of patronage, bribery or corruption. However, the UK’s asset recovery mechanisms have previously fallen short when dealing with the challenges related to seizing such proceeds. In addition, while the intention to move ‘from freeze to seize’ is high on the government’s agenda, it is important that any future solutions do not undermine the UK’s status as a rule-of-law jurisdiction and supporter of fundamental human rights.
This research explores alternative asset recovery mechanisms that could help respond to the immediate policy goal surrounding Russian-linked sanctioned assets, and also contribute to strengthening the broader asset recovery framework in the UK for the longer term. It uses the example of kleptocratic assets to set out the current limitations of UK civil recovery mechanisms. Given these challenges, the research looks at examples of three alternative mechanisms: lowering the standard of proof, reversing the burden of proof, and ‘societal danger’ models, across four jurisdictions – Australia, Switzerland, Ireland and Italy – weighing their potential and legal applicability in UK legislation.
With these factors in mind, the research concludes with a set of considerations for UK policymakers, which apply equally to the global debate, when thinking about reforming the country’s asset recovery mechanisms. While it does not intend to categorically push for one model to be adopted over others, it suggests that amendments to the current asset recovery mechanisms to incorporate a social damage or national security basis for asset recovery may be a starting point for discussion. Incorporating such concepts into the UK’s asset recovery framework may ensure they have better reach. Alongside this, some adjustments to existing legislation to include certain elements, such as a full reverse burden of proof and, most importantly, appropriate resourcing of law enforcement, will place law enforcement on the front foot when recovering the proceeds of crime and corruption in the UK.
