draining development.pdf - Khazar University

The Kleptocrat’s Portfolio Decisions 427respondents. These respondents were incorporated in jurisdictions suchas British Virgin Islands, Ireland, Isle of Man, and Liechtenstein (therewere also quite a few Nigerian corporations). No satisfactory explanationwas ever given by Mohammed Abacha as to the provenance of the monies:he relied on the privilege against self-incrimination.Full disclosure was made by the banks named as defendants in theU.K. proceedings, and, within six weeks, all the information that it hadtaken the U.K. authorities four years to transmit had been obtained.However, only about £50 million remained in the U.K. bank accounts.This money was frozen, but, over the ensuing years, the court allowedmuch of it to be disbursed to pay the Abachas’s legal fees, which had beensubstantial.This being the case, little effort went into pursuing the named companiesin offshore jurisdictions. The value of such an exercise would, in anyevent, have been highly dubious. There was sufficient evidence fromSwitzerland to show that these offshore entities were connected with theAbacha enterprise. Expending time, effort, and money on trying toestablish the beneficial ownership of these offshore entities would thereforehave been a largely futile exercise. The assumption that these wereAbacha-related companies was never challenged by the Abachas in suchevidence as they saw fit to file in the various proceedings.The U.K. action never proceeded beyond freezing all the Abachaassets held by the named banks and disclosing all the account information.The freezing order was a worldwide one and remains in force.Although such orders made by the U.K. courts can be difficult to implementoverseas, they do have the effect of putting major internationalbanks on notice all around the world, and, in practice, banks avoidbreaching such orders in case it opens them up to liability before theU.K. courts. Continuing the action might have yielded further information,and it might ultimately have led to a judgment. This could havebeen useful for enforcement purposes in other jurisdictions, but, inpractice, other ways have been found to secure compliance.ConclusionAbacha is probably still the single most successful case in terms of assetsrecovered by a state. Some of the hurdles faced have been referred toabove. Recovery efforts continue. 15 Perhaps as much as US$3 billion may