World Bank

Covid, pending laws delay Lux reply to stolen assets survey

Justice minister Sam Tanson (déi Gréng) Photo: Romain Gamba / Maison Moderne

Justice minister Sam Tanson (déi Gréng) Photo: Romain Gamba / Maison Moderne

Luxembourg has yet to answer a survey on stolen assets by the World Bank with justice minister Sam Tanson saying the pandemic and the pending transposition of EU rules on freezing and confiscating the proceeds of crime had caused the delay.

The Stolen Asset Recovery Initiative (Star) is a joint project between the World Bank and the UN’s Office on Drugs and Crime (UNODC). It works to deny safe havens for stolen assets and promote asset recovery. In 2020, the initiative sent a survey to World Bank members requesting updates on progress to asset recovery. But Luxembourg has not yet responded to the call for information.

“The questionnaire requires serious research but also reflection as it is not simply a question to provide statistics but detailed information on the assets seized and/or confiscated in connection with corruption cases over a period of 10 years,” justice minister Sam Tanson (déi Gréng) said in answer to a parliamentary question on Thursday.

“This implies by important work for the actors concerned who do not have computerised access to all information requested but must extract data manually from records. Given the context of the health crisis, the questionnaire could not be finalised in good time, which was communicated to the organisation,” the minister said.

The government also wanted to await the results of the transposition of an EU directive on seized assets before responding to the survey, Tanson said.

The European Commission in June asked the Court of Justice of the European Union to issue a penalty against the grand duchy for failing to fully transpose the directive on the freezing and confiscation of proceeds of crime by a 2016 deadline.

A 2019 draft law, which responds to the failings highlighted by the European Commission, is in the process of being finalised. “Since substantial changes will be made by the aforementioned bill, the ministry deemed it appropriate to include them in the responses to the survey,” Tanson said about the additional delay to the World Bank questionnaire.

An online Star database includes information on cases pending in more than 60 jurisdictions. The World Bank counts 189 member countries. The database aims to collect and systematise information about completed and ongoing recovery efforts of corruption proceeds.

However, the UNODC has received funding from Luxembourg and a handful of other countries to support the Star project. Star primarily works with developing countries, which can request assistance, for example to open an asset recovery case.

“By conservative estimates, $20bn to $40bn is stolen from developing countries each year. The costs go far beyond the amount of the money lost,” the organisation said in a brochure.

The database of corruption cases is meant to be a reference tool for policy makers and practitioners. The organisation also works to improve legal frameworks for asset recovery and providing training, guidance and practical assistance.

Tanson said the government has been in contact with the organisation since it received the survey but did not indicate when it will submit the survey response.