Interview with J.C. Weliamuna on Sri Lanka’s asset recovery efforts

11 April 2017.

J.C. Weliamuna is a human rights lawyer and President of the Sri Lankan Presidential Task Force on Stolen Assets Recovery. He is former executive director of Transparency International Sri Lanka and a former member of the International Board of Transparency International. Representing the Presidential Task Force, he participated in two meetings on asset recovery that took place in February in Addis Ababa and Lausanne.

In January 2015 you were quoted as saying: “A small group have captured all [Sri Lankan] state organs and accumulated huge wealth and power. It is one of the worst periods of corruption in my lifetime”. Since then, a new government has been elected in Sri Lanka. How would you assess the progress since then in terms of transparency, accountability, rule of law and good governance?

Well, I think there has been huge progress, because we have come from state capture to the first steps of democracy. I’m sure we have a long way to go, because transparency, accountability and good governance is a culture change and requires several steps to be taken.

We have to understand the political reality in the country. It’s a unity government led by two political parties and both parties are trying hard to protect their own party interests as well. One might say that they have compromised certain values to maintain a political marriage, which shouldn’t have happened, but overall certainly there’s progress.

We are seeing things like the introduction of the right to information legislation, which is fairly strong: among the best ten in the world now. And we don’t see open interference with police investigations anymore.

So while we see tremendous progress from January last year, if you ask me whether we are satisfied – I think there’s a lot more to be done.

How would you assess Sri Lanka’s legal framework and institutions for carrying out asset recovery?

Asset recovery has never before been on our political or legal agenda. It is the first time that we’re actually seriously looking at foreign assets and it becomes quite a nightmare when one thinks about it, because institutions are not interconnected. There are five different institutions each working on their own without any coordination and that’s the legal framework we inherited.

We have proposed overall structural changes to the anti-corruption framework, which include some statutory amendments to address these issues, particularly on coordination and the secrecy clauses that prevent coordination, and also on the management of assets and how assets are going to be frozen. So we are looking forward to having a few statutory changes, but we don’t know when these will come.

We are also looking forward to a civil or non-conviction based asset recovery system. We have hope that an adjustment of the legal framework will take place if the government continues with its anti-corruption commitments.

Nevertheless in the international asset recovery agenda, Sri Lanka is trying its best to identify assets, but has yet to successfully recover them. We have a number of challenges – like many other countries – including lack of experience and experts working in this area, and the lack of mutual legal assistance from other countries. All the countries speak about mutual legal assistance, but when it comes to actual assistance there’s a lot of red tape within their own systems.

As head of the Presidential Task Force on Stolen Assets Recovery, what do you think is the value of such national organisations and what kind of challenges do they face?

This is only a task force; although it is ad hoc it is based on a cabinet decision where all investigative agencies including customs and the tax department come to one table. Of course we are looking forward to making it a statutory body, but for the time being all the agencies involved are assisting the task force and this is a good mechanism.

Certain agencies cannot share information under the law, so this reduces the speed of the task force and some of our work.

What is the estimated amount of proceeds of corruption to be recovered by Sri Lanka? Where do you believe those assets are held?

At the moment we are unable to give you clear estimates because we have some intelligence, but not details.

What steps has Sri Lanka taken in the last 18 months to recover the proceeds of corruption and how much has been recovered? What have been the main obstacles to recovery?

Sri Lanka made a political appeal to the international community and we are very glad that so many countries have lent their support to us including the US, UK, Switzerland and India, and of course some other countries and agencies such as the StAR Initiative of the World Bank.

Initially we wanted experts and we got experts. Then we had to sign agreements with various countries and agencies and that took a year or more. So we are now starting the serious business of identifying the location of assets.

Most important is that we have fairly concrete agreements with some countries on asset recovery; we have been exchanging intelligence and we are starting to get more responses to our requests for mutual legal assistance. We also have a strong and professionally qualified team.

Banking secrecy in other jurisdictions is a challenge, but where they are not opening up we are coordinating with other friendly countries to keep knocking on the door.

We must remember that we are starting from zero or minus 100, and so this process takes time.

What action has been taken against those who stole the money and what have been the main obstacles to bringing action against them?

There are a few cases and in some jurisdictions money has been frozen. It is a huge challenge to bring it back here.

How should assets be used when returned to Sri Lanka and how should decision-making about their use be undertaken? What role do you see for civil society in asset recovery efforts?

This question arises probably at the last stage of asset recovery. In Sri Lanka when you look at our constitutional framework, it appears that when the funds are returned such funds will go to the consolidated fund [the government fund for the taxes, imposts, rates and duties and all other revenues of the central government].

I personally think it’s all right for it to go to a consolidated fund, but we have to make sure that it is used properly. We have a fairly strong constitutional framework on this, but they have not thought about asset recovery.

Civil society needs to be aware of this, but I will be frank and say I don’t think civil society has ever considered this aspect. When money goes missing, people will raise it as an issue, but when the money eventually comes back, whether it is used for the benefit of those same people is a matter that needs to be addressed.

So far, I think I am not wrong in assuming that as far as Sri Lanka is concerned, we want to bring the money back and it would automatically go to the consolidated fund unless there is a change of the law. This may pose a problem because Sri Lanka is a debt-ridden country and if it goes into the consolidated fund, it will probably be used to service debt.

Civil society should try to raise this issue and change the legislation.

What have been the main issues discussed at the recent international meetings on asset recovery in Addis Ababa and Lausanne?

Addis was a kind of discussion looking at the final end and how to manage the recovered assets.

Lausanne focused on the process, which is a real practical exercise for all countries. I cannot find any other guidelines except these, and actual practitioners are developing them. I think they will finally be the textbook for all investigators and I hope they will be used. I can see the benefit of this process.

What are your expectations for the Global Forum on Asset Recovery in July in Washington DC in terms of progress in asset recovery efforts? (Sri Lanka is one of the focus countries at that meeting.) And how about thereafter at the UNCAC Working Group on Asset Recovery in August 2017 and the UNCAC Conference of States Parties in November 2017?

We have high expectations for the Global Forum and we are very pleased that Sri Lanka was chosen as one of the four focus countries. Sri Lanka is just beginning in this process and the other countries will have done much more, but we have our own story to present and we will also learn from others.

The Global Forum is a real opportunity for investigators to sit down and look at actual cases and solve some of the international challenges. I don’t see that there has ever been an attempt on this scale and we will be the beneficiaries, but also Sri Lanka will do everything possible to support other countries.

We also have expectations for the UNCAC Working Group. We think the Conference of States Parties will make much more progress than before as a result. While asset recovery was not given priority in the initial stage by the UNCAC practitioners, it is now gathering momentum. There are some countries and civil society organisations that are really pushing the agenda and I’m glad they are; the UNCAC and the working group are even being referred to in the media and local papers.

Our challenge in Sri Lanka is managing expectations. This is not easy, as people have unrealistic expectations of recovering large assets and when the money does not come back easily there is a lot of criticism.

Do you think the UNCAC second cycle reviews will contribute to improving global asset recovery efforts?

We all know how UNCAC was drafted and how it came into being, and these peer reviews are good. They may not be the answer to all the questions under the sun, but looking at the framework and real reviews will really help a government that is keen to improve. But for other countries, like for human rights reviews, if the country is not interested in it, it will not make sense.

When only the state organs without sufficient participation of civil society do the UNCAC review, those reviews are not accurate – you and I know that. We need to strengthen that civil society input within the UNCAC review, even within asset recovery.

What steps do you believe individual countries and the international community should take with regard to the problem of grand corruption?

I could write a book on this. The issue is how countries are now divided on political lines – we have two groups and for some of those countries corruption is not something that they are openly talking about. All countries need to look inwards first and then make sure that they block all their own loopholes and ensure their own citizens, corporations etc. cannot participate.

The banking system and legislation needs to be looked at from a different angle and tax havens – for goodness sake, we need to find an international answer to this nonsense.

Anything can be done if there are two things in place: political commitment and then strong civil society and institutions.

But my final message is this: we need to invest in fighting corruption.

We need at least 5 per cent of the proceeds of grand corruption to make a difference and seriously address the issue. If we do not invest in our police and investigative agencies with training and technology, and in our awareness and understanding of corruption, other political priorities take over.