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Recovering stolen wealth
AS BANGLADESH rebuilds after the 16-year reign of former Prime Minister Sheikh Hasina, the search is on to locate and recover the funds that were allegedly siphoned off through the corrupt activities of those in her regime and their associates...
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Recovering stolen wealth
Syed Rahman and Angelika Hellweger 10 January, 2025, 00:00
AS BANGLADESH rebuilds after the 16-year reign of former Prime Minister Sheikh Hasina, the search is on to locate and recover the funds that were allegedly siphoned off through the corrupt activities of those in her regime and their associates.
Authorities in Bangladesh believe that a small number of families and businesses with links to Hasina’s Awami League party illegally obtained billions of pounds, with large amounts removed from the country. The interim government is seeking assistance to track down an estimated £13 billion worth of assets. This includes United Kingdom property worth hundreds of millions of pounds, owned by UK and offshore companies headed by former Hasina regime ministers and Bangladeshi businessmen who prospered under her rule. It is a situation that is tailor-made for asset recovery.
Asset recovery is the process by which money or other assets that have been illegally obtained are traced and then restored to their legal owners. The owners could be individuals, companies, organisations or, as with Bangladesh, states. In Bangladesh’s case, any recovered wealth could be used for its original purpose or reinvested to benefit some or all of the population.
Asset recovery sends a message that corrupt and illicit activity does not necessarily bring rewards. It does, however, require an investment of time and resources. Those who took assets illegally will go to great lengths to hide them from anyone looking to locate them. Illegally-obtained money may be moved around the world in transaction chains that are designed to disguise the origins of the wealth. It may, as has been reported with Bangladesh, be moved to secretive offshore companies and/or invested in property or other assets that are not immediately identifiable.
Mechanisms
COMMON law jurisdictions offer a variety of mechanisms that make it possible to secure and recover assets through the civil route. When illicit assets are placed in the jurisdiction of one state, the country, individual or body from which they were taken could, for instance, seek damages based on torts, breach of contract or illicit enrichment. They may also petition the civil courts to issue a wide range of orders – for example, freezing orders – to secure the allegedly ill-gotten assets and compel the defendants or third parties to disclose information regarding how they obtained them.
Civil law methods of asset recovery can be a more worthwhile option than going down the criminal law route. This is because the burden of proof that has to be established by those bringing the action can be much higher in a criminal case than in a civil case. If we take the example of England and Wales, a criminal case has to be proven beyond reasonable doubt, whereas a civil case only has to be proven on the balance of probabilities; meaning that it only has to be shown that it is more likely than not that the defendant is responsible for the wrongdoing.
It would be logical for the authorities in Bangladesh to turn to the UK as part of their efforts to reclaim the wealth that has been taken from the country. This is partly because some of that wealth is in the UK or has a UK connection, and partly because previous cases have shown that such activity can be successful in UK courts. To take one notable example, Nigeria successfully recovered millions through successful civil lawsuits filed in the United Kingdom relating to a former state governor who admitted to money laundering and corruption. A similar case occurred in 2012 in relation to a property in London, in which the High Court adjudicated in favour of Libya. Although it should be emphasised that the UK is not the only jurisdiction that is receptive to such civil action.
Process
RECOVERING assets can be a lengthy and resource-intensive process, often requiring significant funding. Tracing hidden assets demands time, expertise and coordination across jurisdictions. The complexity of money laundering schemes and challenges in international cooperation can compound the costs involved, especially on a limited budget.
But litigation funding can address such financial hurdles. This is seen as an ‘access-to-justice tool’: litigation funding allows a party to secure the financial resources needed to pursue recovery. The party seeking funds to help it recover assets comes to an arrangement with a funder, where repayment of the funds is dependent on success in the asset recovery proceedings. In such arrangements, repayment is contingent on success. If the assets are recovered, the funder is compensated via an agreed premium or percentage of the recovered value.
Careful consideration is required when structuring these agreements to ensure that both parties’ interests are protected while advancing the recovery process. A very important factor for both the funder and the funded party will be exactly how much of the costs of the proceedings the funder will cover. There is also the issue of whether or not the security interest in the award will be on a non-recourse basis. That means whether the funder will have a right of action against the funded party if the total value of assets eventually recovered does not meet a specific amount or an agreed portion of the funder’s investment.
A regime change, like the one witnessed in Bangladesh, provides a significant opportunity for proactive asset recovery. However, in order to succeed, the country must adopt a clear, well-planned strategy tailored to the challenges of tracing and recovering stolen wealth. International examples show that successful outcomes depend on combining legal expertise, resourcefulness and a collaborative approach. While asset recovery is challenging, the rewards — both financial and symbolic — are undeniable.
As Bangladesh seeks to rebuild, employing innovative solutions such as litigation funding alongside established asset recovery mechanisms could unlock paths to justice and recovery. Lawyers and advisors with expertise in this field are well-placed to help design and execute such strategies, ensuring that stolen assets are traced and returned to their rightful owners.
Syed Rahman, a partner at Rahman Ravelli, is a London-based international asset recovery specialist. Angelika Hellweger is a legal director at Rahman Ravelli in London.
Syed Rahman and Angelika Hellweger 10 January, 2025, 00:00
AS BANGLADESH rebuilds after the 16-year reign of former Prime Minister Sheikh Hasina, the search is on to locate and recover the funds that were allegedly siphoned off through the corrupt activities of those in her regime and their associates.
Authorities in Bangladesh believe that a small number of families and businesses with links to Hasina’s Awami League party illegally obtained billions of pounds, with large amounts removed from the country. The interim government is seeking assistance to track down an estimated £13 billion worth of assets. This includes United Kingdom property worth hundreds of millions of pounds, owned by UK and offshore companies headed by former Hasina regime ministers and Bangladeshi businessmen who prospered under her rule. It is a situation that is tailor-made for asset recovery.
Asset recovery is the process by which money or other assets that have been illegally obtained are traced and then restored to their legal owners. The owners could be individuals, companies, organisations or, as with Bangladesh, states. In Bangladesh’s case, any recovered wealth could be used for its original purpose or reinvested to benefit some or all of the population.
Asset recovery sends a message that corrupt and illicit activity does not necessarily bring rewards. It does, however, require an investment of time and resources. Those who took assets illegally will go to great lengths to hide them from anyone looking to locate them. Illegally-obtained money may be moved around the world in transaction chains that are designed to disguise the origins of the wealth. It may, as has been reported with Bangladesh, be moved to secretive offshore companies and/or invested in property or other assets that are not immediately identifiable.
Mechanisms
COMMON law jurisdictions offer a variety of mechanisms that make it possible to secure and recover assets through the civil route. When illicit assets are placed in the jurisdiction of one state, the country, individual or body from which they were taken could, for instance, seek damages based on torts, breach of contract or illicit enrichment. They may also petition the civil courts to issue a wide range of orders – for example, freezing orders – to secure the allegedly ill-gotten assets and compel the defendants or third parties to disclose information regarding how they obtained them.
Civil law methods of asset recovery can be a more worthwhile option than going down the criminal law route. This is because the burden of proof that has to be established by those bringing the action can be much higher in a criminal case than in a civil case. If we take the example of England and Wales, a criminal case has to be proven beyond reasonable doubt, whereas a civil case only has to be proven on the balance of probabilities; meaning that it only has to be shown that it is more likely than not that the defendant is responsible for the wrongdoing.
It would be logical for the authorities in Bangladesh to turn to the UK as part of their efforts to reclaim the wealth that has been taken from the country. This is partly because some of that wealth is in the UK or has a UK connection, and partly because previous cases have shown that such activity can be successful in UK courts. To take one notable example, Nigeria successfully recovered millions through successful civil lawsuits filed in the United Kingdom relating to a former state governor who admitted to money laundering and corruption. A similar case occurred in 2012 in relation to a property in London, in which the High Court adjudicated in favour of Libya. Although it should be emphasised that the UK is not the only jurisdiction that is receptive to such civil action.
Process
RECOVERING assets can be a lengthy and resource-intensive process, often requiring significant funding. Tracing hidden assets demands time, expertise and coordination across jurisdictions. The complexity of money laundering schemes and challenges in international cooperation can compound the costs involved, especially on a limited budget.
But litigation funding can address such financial hurdles. This is seen as an ‘access-to-justice tool’: litigation funding allows a party to secure the financial resources needed to pursue recovery. The party seeking funds to help it recover assets comes to an arrangement with a funder, where repayment of the funds is dependent on success in the asset recovery proceedings. In such arrangements, repayment is contingent on success. If the assets are recovered, the funder is compensated via an agreed premium or percentage of the recovered value.
Careful consideration is required when structuring these agreements to ensure that both parties’ interests are protected while advancing the recovery process. A very important factor for both the funder and the funded party will be exactly how much of the costs of the proceedings the funder will cover. There is also the issue of whether or not the security interest in the award will be on a non-recourse basis. That means whether the funder will have a right of action against the funded party if the total value of assets eventually recovered does not meet a specific amount or an agreed portion of the funder’s investment.
A regime change, like the one witnessed in Bangladesh, provides a significant opportunity for proactive asset recovery. However, in order to succeed, the country must adopt a clear, well-planned strategy tailored to the challenges of tracing and recovering stolen wealth. International examples show that successful outcomes depend on combining legal expertise, resourcefulness and a collaborative approach. While asset recovery is challenging, the rewards — both financial and symbolic — are undeniable.
As Bangladesh seeks to rebuild, employing innovative solutions such as litigation funding alongside established asset recovery mechanisms could unlock paths to justice and recovery. Lawyers and advisors with expertise in this field are well-placed to help design and execute such strategies, ensuring that stolen assets are traced and returned to their rightful owners.
Syed Rahman, a partner at Rahman Ravelli, is a London-based international asset recovery specialist. Angelika Hellweger is a legal director at Rahman Ravelli in London.
