Analysis
14 July 2021

Future promulgation of a Law regarding the restitution of ill-gottens assets diverted by officials to the local population

Bastille Day Newsletter 2021 - Legislative, Regulatory & Policy Updates

 

The concept of asset recovery refers to the process by which assets misappropriated through certain offences are confiscated, recovered, and repatriated to the country from which they were wrongly removed[i].

The amount of confiscations executed in France reached 253.4 million euros in 2019[ii]. Nevertheless, the French system still does not provide, to date, for a mechanism allowing the restitution of assets derived from corruption to local populations, even though the United Nations Convention against Corruption, to which France is a signatory, declares a general principle of cooperation and assistance between States concerning the restitution of illicit assets to these populations[iii].

While the most privileged populations can compensate for their State’s failure to fight corruption and the misappropriation of assets by public officials, the poorest populations suffer from the consequences of these misappropriations[iv].

This failure was highlighted by the Paris Criminal Court in October 2017 in the case of Mr. Obiang, Vice-President of Equatorial Guinea who was found guilty of money laundering, misappropriation of public funds and breach of trust[v] as well as by several NGOs, including Transparency International France, which has established recommendations for a responsible return of assets derived from corruption[vi].

After several unsuccessful attempts[vii], a new bill entitled “programming bill for solidarity development and fight against global inequalities” was submitted in December 2020, to create a mechanism for restitution to local populations[viii].

The bill establishes a principle of restitution to local population of the revenue derived from the sale of property confiscated following a final conviction[ix]. This conviction must relate to money laundering or concealment of a list of designated offences, e., breach of trust, offenses relating to breaches of the duty of probity (except for the offense of concussion), active bribery and influence peddling by individuals, the removal and misappropriation of goods contained in a public depository, passive and active corruption and influence peddling or the infringement of legal proceedings and obstruction of justice[x].

The original offence must have been committed by a person who is a public official of a foreign State, who holds a public office in a foreign State, or who performs a public service in a foreign State, in the exercise of his or her functions[xi].

It should be noted that the scope of this new project was envisaged by the drafters on the basis of emblematic cases of ill-gotten goods identified by the Ministry of Justice[xii] and in particular the aforementioned Obiang case involving the embezzlement of 150 million euros, which led to numerous confiscations in France[xiii] and for which the International Court of Justice in a decision rendered on December 10, 2020 accepted that the seizure by France of Mr. Obiang’s illicit assets was not contrary to the provisions of the Vienna Convention on Diplomatic Relations of April 18, 1961[xiv] and that Mr. Obiang could not benefit from the principle of immunity of the offices of a diplomatic mission regarding these seized goods [xv].

Concerning the implementation modalities, the provisions of the draft specify that these sums give rise to the opening of budgetary credits within the “Official Development Assistance” mission, placed under the responsibility of the Ministry of Foreign Affairs[xvi]. The creation of a new budget program falls within the exclusive domain of the finance laws[xvii]. Therefore, a new provision will be inserted in the forthcoming 2022 Finance Act to track appropriations according to the principles of transparency, accountability and association of representative organizations as defined by Transparency International[xviii].

It should be noted that the accelerated legislative procedure was initiated by the government in order to allow for a rapid application to ongoing cases[xix]. The draft was unanimously adopted by the French National Assembly on 2 March 2021 and by the Senate on 17 May 2021[xx] . On June 24, 2021, deputies and senators, meeting in joint committee, found a compromise text. The promulgation of the text should therefore be finished shortly[xxi].

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