27 November 2012, by Tim Daniel.
In February 2012, President Hosni Mubarak was forced from power in Egypt, crowning what came to be called the ‘Arab Spring’. The crowds gathered in Tahrir Square had for months condemned Mubarak’s regime as totally corrupt. He, his family, and cronies were said to have amassed enormous personal fortunes and those same crowds were baying for the looted funds to be returned to Egypt. The international community made grandiose promises to track down and return all of the stolen assets. Following these announcements many Egyptians returned to Tahrir Square with carpet bags held open, ready to receive their individual share of the recovered loot.
Alas, their expectations have been sadly dashed –nearly two years on not a single dollar has been recovered or returned. The United Nations, the European Union, and the UK all issued freezing orders…thirty-seven days after Mubarak was toppled. One country, Switzerland, had a freezing order in place within one hour of the news of Mubarak’s fall. £270 million of assets were initially frozen, and one year later that sum had increased to £470 million: twenty investigators had been deployed full time to seek out and trace Mubarak assets. All it took for Switzerland to set the wheels in motion was for their Chief Prosecutor to make one telephone call to the President.
In the UK £85 million were frozen following the EU sanctions notice. Nineteen members of Mubarak’s family and close circle were identified in the Notice circulated by the UK Treasury. Egypt has issued numerous requests for Mutual Legal Assistance to the UK authorities, as envisaged under UNCAC. These requests have been met with a barrage of counter-requests, many of which the Egyptians have been unable to answer. Not unreasonably, they query why they should answer questions about assets held in the UK, about which they know very little.
BBC Television’s Newsnight programme recently showed entries from the UK’s Property Registry and Companies Registry: this demonstrated that, eighteen months on, the well known London residence of Mubarak’s eldest son, Gamal, was left free to be sold at any time by the Panamanian company in whose name it is registered, and the wife of Mubarak’s Housing Minister was able from her address in Chelsea, to register a UK limited company within a year of the freezing orders made against her and her husband.
The response of the Foreign Office Minister has been that the recovery of assets is beset with many legal problems, not least of which is the impossibility to seize assets without a criminal conviction. But the likelihood of obtaining such convictions when the defendants are for the most part resident abroad is remote. It is for precisely this reason that UK laws were passed in 2001 to permit criminal assets be recovered by civil process, with its much lower burden of proof, a route which the UK authorities appear thus far to have completely ignored.
Once again there seems to be a failure of political will at the top: UK’s Prime Minister David Cameron promised Egypt’s President Morsi in October that a dedicated multi-departmental task force would be set up to assist Egypt in its quest: it seems unlikely that those carpet bags are going to be filled any time soon.
About Tim Daniel
Tim Daniel is Partner at Edwards Wildman Palmer UK LLP.