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China to toughen measures to recover officials' illicit assets

Publication Date : 29-06-2012


China will strengthen the measures it uses to recover corrupt officials' illicit assets transferred abroad and demand other countries freeze such assets to cut off the officials' means for living overseas, a member of the supreme procuratorate said on Wednesday.

The official, from the anti-corruption bureau of the Chinese Supreme People's Procuratorate, made the remarks on the sidelines of the fourth seminar of the International Association of Anti-Corruption Authorities, which concluded yesterday.

The official, who declined to be named, said China has prevented a large amount of illicit assets from being transferred abroad by coordinating with other countries and regions.

However, there is an obstacle to the work, as procuratorates can only seal, freeze or seize illicit assets involving crimes committed while working for the public for a limited period of time, instead of permanently confiscating them, if the suspects are still at large or have escaped custody.

Political and legal differences, less effective cooperation between authorities and the limited capability of law enforcers are the main obstacles hindering the fight against the cross-border transfer of illegal assets, said Vincent Cheng Yang, a Chinese-Canadian who is a professor in international law at the University of Saint Joseph in Macao.

"The biggest problem facing China and some Western countries, such as the United States and Canada, in the field of mutual legal assistance is the Chinese corrupt officials who fled there and their transferred illegal assets," he said.

Once they are exposed, these officials immediately escape to Western countries with a tourist visa and seek refugee status due to legal system differences and a lack of bilateral extradition treaties, he said.

"It's so difficult for the Chinese judicial organs to recover and return the illegal funds sent aboard," said Zhao Jianwei, chief prosecutor of Dalian people's procuratorate in Northeast China's Liaoning province.

"We didn't have the judicial power to recover the property transferred," he said.

In 2011, Chinese prosecuting authorities arrested 1,631 corrupt officials who fled to other countries and seized billions in illegal funds, according to statistics from the Supreme People's Procuratorate.

Lai Changxing, one of China's most notorious fugitives, serves as an example. In May, Lai was convicted of smuggling and offering bribes and sentenced to life imprisonment after spending 12 years on the run in Canada.

According to the court's verdict, Lai launched companies in Hong Kong and Xiamen in 1991, and between 1995 and 1999 Lai's group smuggled cigarettes, cars, petroleum, cooking oil, chemicals, equipment and other goods through Xiamen Customs. The smuggled goods and taxes that Lai evaded were valued at nearly 40 billion yuan (US$6 billion).

In 1999, when his scheme was exposed, Lai fled to Canada, which doesn't have an extradition treaty with China, on a tourist visa and sought refugee status.

"Although the court made a decision to recover all of his illegal gains, there's a long way to go," said Vincent Cheng Yang, who has been closed following Lai's case.

"Actually, we still don't know how much illegal funds Lai brought abroad, including Canada, and whether it will be returned, or how to handle these assets."

Lai was extradited in July, when the federal court in Canada rejected Lai's appeal to suspend the repatriation order and repatriated him to China to face trial, ending a 12-year effort by Chinese judicial authorities.

"Lai's successful return to China opens the door for further judicial cooperation between China and Canada in the fugitives' pursuit field, but the Canadian side didn't give a definite answer as to the cooperation to recover transferred illegal assets," he said.

"Moreover, the Canadian government just temporarily froze more than 1 million canadian dollars ($975,000) kept in Lai's Canadian bank account, and several rulings made by the Canadian court only focused on his personal repatriation, rather than the return of illegal funds," he said.

Nguyen Hoa Binh, general prosecutor of the Supreme People's Prosecution Office of Vietnam, said there is a need to develop a "unified and comprehensive legal framework" for asset recovery.

"This legal framework must be feasible and flexible to bridge the gaps between national legal systems, which appear to be an obstacle impeding cooperation," he said.

The unnamed official from the Supreme People's Procuratorate said the efforts to retrieve illegal assets will get a shot in the arm after the amendment to the Criminal Procedural Law takes effect on Jan 1.

The amendment to the Criminal Procedural Law, which was endorsed in March at the fifth session of the 11th National People's Congress, stipulates that procuratorates can submit to the courts to confiscate the illicit assets of officials suspected of corruption if the suspects are missing or dead.

Procuratorates can also apply to the courts to confiscate illicit assets overseas. After making a ruling of confiscation, the courts can require other countries to recognise and implement China's judgment.

The official said the major destination countries for China's runaway corrupt officials, such as the United States, the United Kingdom and Australia, all recognise the criminal ruling of confiscation. The practice has also been endorsed by the United Nations Convention against Corruption.

Xinhua contributed to this story.


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