Asset recovery in Pakistan: a call for international cooperation

Sahar Iqbal
Akhund Forbes, Karachi, Pakistan
sahar.iqbal@akhundforbes.com

The NAB Ordinance

The National Accountability Bureau (NAB) Ordinance aims to eradicate corruption and hold accountable individuals involved in corrupt practices. This ordinance establishes NAB for providing effective measures for the detection, investigation, prosecution and speedy disposal of corruption cases. It also addresses the recovery of outstanding amounts from defaulters and the misappropriation of state money and assets. Significantly, the Ordinance overrides other existing laws and applies to all persons in Pakistan, including those in service of the country.

In order to explore the mechanism for asset recovery under the Ordinance, we shall first discuss the broad definition of ‘Assets’ under the Ordinance which is:

‘any property owned, controlled by or belonging to any accused, whether directly or indirectly, or held benami in the name of his spouse or relatives or associates, whether within or outside Pakistan, for which they cannot reasonably account, or for which they cannot prove payment of full and lawful consideration.’

The corrupt practices which may lead to penalties such as the seizure of assets are delineated in section 9 of the Ordinance and include accepting or offering gratification for official acts, obtaining valuable things without consideration, misappropriating entrusted property, seeking personal gains through illegal means, owning disproportionate assets, misusing authority for personal benefit, issuing directives for personal or associate benefit and committing willful default. All offences under this ordinance are non-bailable, and no court, including the High Court, has the jurisdiction to grant bail. The Chairman of NAB may release an accused person after considering the gravity of the charges, but if an amount is specified in the accusation, it must be deposited with NAB. The deposited amount is subsequently transferred to the appropriate government or financial institution within one month.

The punishment for committing corruption and corrupt practices, as subsequently stipulated under section 10, is imprisonment for a maximum term of 14 years, a fine or both. Additionally, any assets and property found to conflict with the individual’s revealed and legitimate sources of income or acquired through corrupt means can be forfeited to the government, including assets held in the person's name, their dependents’ names or under the names of benamidars (persons holding assets on behalf of someone else). Furthermore, individuals involved in giving illegal gratification, assisting public office holders in corruption, or benefiting from assets acquired through corruption may also be liable for punishment, which can be the same or a lesser penalty than that awarded to public office holders, as determined by the court. The focus of these punishments is on the recovery of ill-gotten assets and property for the benefit of the appropriate government.

While the Ordinance provides a comprehensive framework for the prosecution of contraveners and the recovery of their assets, it recognises the fact that the collaboration of foreign governments is required for the complete implementation of the law. Under section 21 of the Ordinance, the chairman of NAB or an authorised officer can request a foreign state to cooperate in accordance with the law of that state. Gathering evidence, producing documents or other articles, executing search warrants to locate and seize relevant items in that state, freezing assets believed to be located there, confiscating articles and forfeiting assets in that state, transferring evidence, documents, items, assets or proceeds to Pakistan, and, with the consent of the detained person, transferring them to Pakistan to assist in the relevant investigation or proceedings, are all actions which the foreign government can be requested to take. This provision allows for international cooperation and assistance in investigations and proceedings conducted by NAB.

Call for mutual legal assistance

Resolution 5/3 of the Fifth Session of the Conference of the States Parties to the United Nations Convention against Corruption emphasises the importance of international cooperation in asset recovery, in line with the United Nations Convention against Corruption. It calls upon states to enact laws and mechanisms to prosecute corruption, detect illegal acquisition and transfer of assets, and facilitate the recovery of identified proceeds of corruption through confiscation. The resolution urges states to offer mutual legal assistance and cooperate in civil and administrative proceedings.

As a response to the resolution, NAB, in a comprehensive four-page document, stated that the lack of responsiveness from developed countries in exchanging information and records, along with various barriers to asset recovery, has been identified by the working group. These barriers fall under three categories: general barriers and institutional issues; legal barriers and requirements; and operational barriers and communication issues. General barriers, as stated in the report, include the absence of a comprehensive policy which prioritises asset recovery and the lack of adherence to anti-money laundering measures. Legal barriers involve onerous requirements for mutual legal assistance, excessive banking secrecy, and the absence of non-conviction-based asset confiscation procedures. Operational barriers pertain to difficulties in communication, delays in processing requests, and challenges in identifying bank account owners. To overcome these barriers, the recommendations as provided by NAB include adopting comprehensive strategic plans, improving communication and trust, introducing legislative reforms, implementing anti-money laundering measures, providing a strong legal basis for mutual legal assistance, and encouraging informal assistance.

Conclusion

Efforts to curb corruption and recover illegal assets in Pakistan face difficulties due to the lack of responsiveness from developed countries, along with a host of other barriers to asset recovery. To overcome such obstacles, it is essential to prioritise asset recovery, enforce anti-money laundering measures, introduce legislative reforms, improve communication and trust and establish a strong legal framework for mutual legal assistance between Pakistan and other countries. International cooperation and assistance, as emphasised in Resolution 5/3 of the United Nations Convention against Corruption, play a vital role in facilitating asset recovery and combating corruption globally. By adopting comprehensive strategies and implementing recommended measures, the effectiveness of asset recovery can be significantly enhanced.