30 June 2011, by Tim Daniel, Edwards Angell Palmer & Dodge UK LLP.
The European Union adopted a Council Regulation on 21 March 2011 that provides for restrictive measures directed against certain persons and entities in view of the situation in Egypt, specifically those identified as responsible for the misappropriation of Egyptian State funds. As a result, on 22 March the UK Treasury published the Egypt (Asset Freezing) Regulations, by which the Asset Freezing Unit of the Treasury published relevant lists.
However, no court actions have as yet been commenced by the UK authorities to recover assets. As required under the UNCAC, specific requests from the appropriate authority in Egypt for mutual legal assistance would have to be made first. Hence a fundamental shortcoming under UNCAC is that difficulties will arise if such requests are not made.
Switzerland has recently sought to surmount this kind of problem by introducing the Federal Act on the Restitution of Assets of Politically Exposed Persons obtained by Unlawful Means (RIAA), which came into force on 1 February 2011. The Act governs the freezing, forfeiture and restitution of the assets of politically exposed persons, in cases where a request for mutual assistance cannot succeed in the requesting state due to the failure of its judicial system.
It is to be hoped that other states will consider introducing similar legislation, as it is by no means certain that civil society groups can ‘fill the gap’ of failing States, particularly in common law countries.