Cross-posted from the Transparency International EU office blog
As events continue unfolding in Ukraine, we hear that targeted asset freezes for those responsible for corruption in Ukraine are imminent. It is expected that the Council will agree on a list of individuals responsible for embezzling public assets in the Ukraine, similar to actions taken for Egypt and Tunisia in 2011. The decision and list of persons is likely to be published in the Official Journal this Thursday, and will take immediate effect.
Asset freezes are needed as a matter of urgency. Every day that passes without these measures poses the risk that stolen assets are transferred and made untraceable. The lessons from the Arab Spring show that EU governments need to act swiftly to freeze and return this wealth to the Ukrainian people. Three years after their revolutions, the people of Egypt and Tunisia have seen worryingly little of their stolen wealth returned to them.
Corruption has been at the heart of the Ukrainian political system for years. According to the latest Corruption Perceptions Index, Ukraine scored 25 out of 100, making it the lowest scoring country in Europe. The Global Corruption Barometer found that 74 percent of Ukrainians said public sector corruption is a serious problem. 47 percent said their government is entirely run by a few big entities acting in their own interest.
The problem of stolen assets in the EU also raises the question how they got here in the first place. Despite EU anti-money laundering rules, kleptocrats around the world are still able to launder in the EU with relative ease.
Important loopholes continue to exist in the EU’s anti-money laundering framework, and need to be addressed in the current review. Specifically, the failure to collect and publish beneficial ownership information and enforce Know-Your-Customer policies make it possible for high profile figures to hide stolen wealth in the EU financial system.