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1 Mar 2011

Europe failing developing countries over pillaged assets

Assets deposited in European financial institutions by despotic developing world leaders are not adequately scrutinised, according to a global corruption watchdog.

Brussels-based Transparency International maintains that the recent civil unrest and toppling of regimes in North Africa has thrown a spotlight on the inadequacies of EU banking regulation. The group has called on the EU to ‘take action for the immediate freezing, thorough investigation and swift repatriation of all illicitly acquired assets’.

In the longer term, the campaigners say that the union must ensure that banks in its member states exercise scrutiny and due diligence regarding ‘politically exposed persons’ as defined by the United Nations Convention against Corruption.

A Transparency International statement issued earlier this month was stinging in its criticism. ‘Why did the EU only move to freeze ... assets when the pressure to act was too great to ignore, and why are assets deposited in EU banks and other financial centres not adequately scrutinised in the first place?’

Meanwhile, the organisation was also critical of EU oil and gas companies for a ‘poor record of transparency and accountability’ in their operations in Algeria, Egypt and Libya. It pointed a finger at the European Commission for, on the one hand, recognising the importance of country-by-country corporate disclosure in the 2004 Transparency Directive, but, on the other, failing to make reporting obligatory.