Egypt: Why amend the illicit gains law now?

Ziad Bahaa-Eldin
Friday 25 Dec 2015

On Wednesday, December 16, the Cabinet approved several amendments to Law 62/1975 on illicit gains,stating the fight against corruption to be the reason behind such amendments. But in my opinion this is the wrong approach to combating corruption and is unlikely to yield any results.

The illicit gains law gives the Justice Ministry’s Illicit Gains Bureau (IGB) the power to investigate any state employee for unexplained increases in wealth. If the person can’t prove the source of the gains in question, his/her assets are frozen, and they are prohibited from travel and can be prosecuted on corruption charges.

The proposed amendments expand the coverage of the law as well as the scope of the crime and allow defendants to avoid prosecution if they pay back the funds of unknown origin along with banking interest.

While it seems that the law now gives the state more tools to fight corruption, I’m afraid it could be counterproductive for the following reasons.

First, amending this law means continuing to rely on a legal system that flagrantly contravenes the Constitution as well as principles of justice. The law assumes defendants are guilty until proven innocent and permits the state to charge them without concrete evidence.

It requires them to produce documentation for all increases in their assets, regardless of how trivial or how far in the past.This violates Article 96 of the Constitution, which states that defendants are innocent until proven guilty in a fair trial. It also runs counter to the fundamental principle of criminal justice that the burden of proof rests with the investigating body.

Second, however much the amendments attempt to invest the IGB with real judicial authority, it is anomalous in its closeness to the Justice Ministry and cannot claim judicial independence. That it can continue to exercise broad powers to confiscate funds, issue travel bans, and bring charges is yet another constitutional violation.

As a rule, the Public Prosecution and judiciary are the sole bodies empowered to investigate crimes, take custodial measures, and impose penalties. Anything else is an exceptional judicial body that violates the spirit of the Constitution.

Third, the law will give the IGB a new, absolute authority to settle with defendants if they return funds gained illicitly with interest. This is highly irregular. Settlement in criminal cases isn't an absolute right and should reflect public interest.

Moreover, any settlement should entail a fine or additional deterrent penalty beyond interest paid on illegally gained wealth. Settlements should also be subject to judicial oversight. They should not be at the discretion of the same body that charges defendants given the conflict of interest this entails.

Finally, as amply illustrated by past experience, this type of measure will have no real impact in curtailing corruption. Thousands of investigations and dozens of cases referred to trial during the last few years ultimately ended in acquittals at the first-instance or appellate level because evidence given to the courts consisted only of rumors, malicious complaints, and innuendo not backed by any serious investigation and proving no specific crimes.

As a result, state agencies wasted time and effort, defendants were smeared without evidence, those actually involved in corruption eluded justice, the state administrative apparatus became paralysed, and the door opened to politically motivated prosecutions.

Fighting corruption is of vital importance for Egypt and its economic future, but issuing more laws that violate the Constitution and basic justice will do little. What we need is to amend laws that permit legalized corruption, in particular laws regulating government tenders, land allocation, and licensing, while also enforcing laws governing conflicts of interest.

Economic and commercial information must be made available to society, and prosecutorial bodies, civil society, and the independent media must be empowered to assume their watchdog role. Resources and capacities should be mobilized to train and improve the effectiveness of the Public Prosecution and the courts with jurisdiction over complex economic crimes.

But relying on exceptional laws and systems that violate the Constitution will only give state administrative authorities more absolute power, which just opens the door to more corruption.

The writer holds a PhD in financial law from the London School of Economics. He is former deputy prime minister, former chairman of the Egyptian Financial Supervisory Authority and former chairman of the General Authority for Investment.

This article was published in Arabic in El-Shorouq newspaper on Monday, 21 December.

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