During a ceremony held to release the study report prepared by ACC on the status of asset recovery system in the country. Photo/ACC

No legal framework to recover stolen assets, ACC study says

ACC suggested that a special law be enacted for asset recovery.

16 February 2023

By Mariyam Umna Ismail

The Anti-Corruption Commission (ACC) has expressed concern over the lack of clarity within the legal framework on how the state can recover the proceeds of crime.

The ACC expressed concern over the fact that the law does not provide a way for the state to recover the assets used for crime in its 'Research Report to assess the status of asset recovery system' released by the commission on Wednesday night.

In its report, the commission has also made recommendations to address the issues raised in relation to the country's asset recovery system.

  • Now that the legal framework of the country is in place, the criminal justice system can withdraw the proceeds of corruption

  • Since this has not been specified in law, the state can now withdraw the proceeds of corruption only in cases related to corruption and money laundering

  • It is not possible for the state to recover the proceeds of crime only when corruption is committed without linking it to the crime of money laundering

  • While the Finance Rules have paved the way for the state to recover the proceeds of corrupt offences from the civil level, it does not provide any guidelines on how the state will take advantage of the proceeds of crime.

The report recommended that the law provides for a clear provision that the state can recover the proceeds of corruption and to empower the law enforcement agencies to withdraw the proceeds of crime if the investigating agencies have sufficient evidence.

  • While some laws and regulations specify how the state can recover proceeds of crime from existing laws and how to compensate for losses, they do not specify them within a closed system, which challenges the enforcement agencies

  • Even if different agencies act within their jurisdiction, there is no guideline to be followed across the country for asset recovery and there is no guardian body to look after the asset recovery system in the country.

It has been suggested that a special law be enacted for asset recovery.

  • There is no standard for making it mandatory for those holding public offices to disclose their statements of assets, the persons to do so, the persons to be presented, and the procedures and standards to be followed in doing so

  • The process of verifying financial statements submitted has not been carried out in the best possible manner

  • Financial statements are not audited and verified for its veracity

The bill on asset declarations, which has now been tabled in Peoples’ Majlis, has recommended ensuring that the recommendation contained in studies that meets and publishes international best practices, and that an asset declaration system should be put in place so that the public can see what is required to be disclosed.

No mechanism to work together

  • In foreign countries, many agencies work together to recover proceeds of crime.

ACC has recommended in writing how to work with relevant agencies in recovering proceeds of crime and how to share information among agencies in their document.

In its report, the agency has also made further recommendations to improve the asset recovery system in the country. These include:

  • The Maldives Monetary Authority (MMA) has decided to determine the maximum amount of money that can be used in cash transactions in a way that is relevant to the Maldives and does not interfere with businesses

  • To formulate a single format for collecting and storing information about assets maintained by state agencies to match the same

  • Develop a legal framework to regulate businesses and sectors or Designated Non-Financing Businesses and Professions (DNFBP) that are not related to financial matters

  • Provide necessary training experience and resources to the employees of the concerned government agencies for technical and administrative capabilities in relation to the asset recovery system