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Wednesday, 27 May 2020

Egypt struggles to recover UK's frozen Mubarak assets

Finding assets owned by those close to the former president was the easy part; Egypt faces an uphill battle bringing the monies back to Cairo, experts in London say

Amer Sultan in London, Tuesday 24 Apr 2012
Hosni Mubarak
Former Egyptian president Hosni Mubarak (Photo: AP)
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Tracing ill-gotten funds is often much less complicated than repatriating them -- and frozen Egyptian assets in the UK seem to be no exception.

The Egyptian government failed to recover £85 million (roughly LE850 million) worth of assets frozen since March of last year by UK authorities. The Egyptian justice ministry says it has not received the necessary cooperation from the UK to recover the frozen assets.
 
The UK Treasury "has refused to provide us with information about the frozen assets," officials from the ministry's Illicit Gains Department (IGD) have said.
 
"They're concerned that the information could be used in any judicial proceeding that we may take in the UK to recover the assets," said IGD head Essam El-Gouhary.
 
El-Gouhary said that the UK Treasury had sent him a formal letter saying that it could not provide any information on frozen assets.
 
The UK Treasury's Asset Freezing Unit asserts that revealing information about frozen assets breaches UK laws governing banking secrecy and data protection.
 
UK officials have consistently stressed that their government was doing its best to help the Egyptian government recover the frozen assets if it could prove that the assets in question had been obtained illegally.
 
"The British are just paying us lip service," a senior Egyptian judicial source told Ahram Online. "Following 13 months of meetings and consultations, the IGD concluded that taking the UK Treasury to court was the only option left."
 
According to informed sources, judicial proceedings against the UK government before the UK's High Administrative Court – which received the case file on 9 March – were taken on the "advice" of British experts.
 
Documents presented in the lawsuit suggest that the UK Treasury has violated the UN's International Convention against Corruption.  According to Article 56 of the convention, the UK Treasury is obliged to provide Egypt with any information regarding frozen assets.  
 
El-Gouhary said that EU regulations issued in March of last year require that the UK Treasury provide the sought-after information.
 
The UK government, however, believes that its national laws supersede EU regulations. According to UK negotiators, the UN convention on corruption confirms that cooperation with other countries should not come at the expense of domestic law.
 
British officialdom contends that Egyptian legal authorities should obtain all information needed about ill-gotten gains and its whereabouts inside the UK.
 
Steven Harwoods, who works at a London-based law firm with experience in asset recovery and is currently dealing with UK authorities on behalf of the Egyptian government, counter-argues that the obligation to protect banking confidentiality is not absolute.
 
But the British Financial Ombudsman Service, a dispute resolution body, says that disclosure of such information can be compelled by law.
 
The IGD hopes that the UK's High Administrative Court will issue a judicial order for the Asset Freezing Unit (AFU) to provide the information.
 
Experts point out that the recovery of frozen assets from the UK could take several years, pointing to similar cases involving James Ibori, a former governor of an oil-producing Nigerian state and late Nigerian president Sani Abacha. 
 
Last Month, Ibori pleaded guilty in a British court to multiple counts of money laundering and conspiracy to defraud the public purse after several of his UK assets were frozen for almost five years.
 
Abacha, meanwhile, 14 years after his death, still stands accused of stealing billions of dollars worth of state funds, which UK investigators are still trying to trace.
 
Informed sources told Ahram Online that, in tandem with judicial procedures, Egypt has commissioned private investigators to track down additional Egyptian assets in the UK.
 
The UK's Serious Organized Crime Agency (SOCA) and Serious Fraud Office (SFO) are both said to have detailed information about all assets belonging to former regime figures.
 
SFO Director Richard Alderman announced on 13 February of last year – two days after the former president's ouster – that his office had already tracked down all of Mubarak's assets.
 
 "The public would expect us to be looking for some of this money if we became aware of it, and to try to repatriate it for the benefit of the people of those countries," Alderman told the Sunday Times newspaper.
 
Perhaps the only major thing on which Egyptian and UK officials agree is that recovering the money will need a great deal of patience. They both say that recovering individual assets is several times more complicated than repatriating assets owned or registered by institutions or governmental bodies.
 
"Recovery of Egyptian assets needs more than patience." Mustafa Ragab, advisor to  the Egyptian Association in the UK told Ahram Online.
 
 He believes the British government needs to translate its statements on supporting Egypt's revolution into concrete action.
 
"Our association asked Alistair Burt [Parliamentary Under Secretary of State for the Foreign and Commonwealth Office] to take tangible steps to help
Egyptian people recover their money siphoned off by corrupt personalities from the former regime," Ragab said, adding that it is not only about legal obligations, as British officials claim. 
 
Others say that providing full details on the assets could be a dangerous precedent.
 
"Passing information about frozen assets to Egyptians in order to use it as evidence in judicial assistance applications with the purpose of recovering assets would give the wrong message to other foreign businessmen and members of ruling Arab families who inject billions into the UK economy," one London-based financial expert said.
 
The City of London, the city's famous financial quarter, competes with New York as the world's financial hub.
 
With the start of the Arab uprisings, Swiss banks and financial institutions were quicker in freezing assets of Libyans, Tunisians and Egyptians than their counterparts in other European nations.
 
Some UK politicians criticised the UK government for failing to act quickly after Mubarak left power.
 
Last February, former foreign office minister Lord Malloch-Brown urged the UK to follow in the footsteps of Switzerland which froze Mubaraks assets a matter of hours after he stepped down.
 
UK Business Secretary Vince Cable has admitted that "it would be a very prudent thing to do to freeze suspicious accounts here because it will take a new government [in Egypt] quite a while to mount some kind of legal claim on them".
 
According to the law, the UK government has the power to not only trace assets but to also freeze them before any European or international action plan is agreed upon. 
 
Three days after Mubarak's resignation, the UK Foreign Secretary told  the House of Commons that Egypt has already asked UK to freeze assets of former regime figures.
 
However, the British government did not take action until 21 March 2011, after the EU has issued regulations on freezing assets.
 
Business experts say London is very keen to be seen as a safe haven for other wealthy Arab families who fear being subject to possible scrutiny or unfairly caught up in a Swiss catch-all probe into assets held by authoritarian regimes. 
 
Prime central London dwellings can also act as a store of global wealth in the face of unexpected global events, Savills for Business Research has said.
 
"The Swiss make rules and respect them. In [the rest of] Europe, they make rules but sometimes close an eye," the Financial Express newspaper quoted Yves Mirabaud, partner at Geneva-based private bank Mirabaud & Cie, as saying.
 
An Egyptian official, speaking on condition of anonymity, complained that the UK deliberately ignored  some properties in England registered by Mubarak's two sons which Egyptian law enforcement bodies  have already documented.
 
Ragab, who is currently head of Egyptian House in London, suggested that Egyptians need to put more political pressure on the UK to force them to find and recover their monies.
 
"We are ready to lobby MPs [members of parliament] to ask the government about what is being done to help Egyptian people to recover their stolen money," Ragab said.
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