Twenty years after the fall of the Wall, the controversial lustration process – the epuration of those who cooperated with the police of Communist regimes – is still in deep waters. And many wonder whether rummaging archives still makes sense.
As the summer ended, the Macedonian lustration commission finally opened its doors for politicians who rushed in to submit their statements swearing they had not collaborated with the communist secret services. The commission, the chief instrument created to implement the law on lustration, has to verify these statements against the old secret police files.
A year and half after the Macedonian lustration law was passed, and 18 years since the beginning of transition, lustration has finally commenced.
Time is still needed to see the actual effect on Macedonian society. Some experts argued that a loud bang is out of the question; perhaps even a hushed whimper would be too much to expect. Some believe that after all these years the powerful politicians have found ways to get their names out of the dusty files.
Even the initial steps, however, hinge on the constitutional court’s assessment of the lustration law. The court recently agreed to review several petitions made by citizens and NGOs that challenged the legitimacy of parts of the legislation. Some people would be surprised if the court finds the law to be in accord with the constitution. Throughout eastern Europe, constitutional courts have regularly reviewed lustration laws.
The start of lustration makes Macedonia a leader in the western Balkans region. Albania’s lustration law adopted in early 2009 was repealed by the Albanian constitutional court just months later. The court’s decision was preceded by strong criticism by the international community, which found the bill to be a potentially serious threat to human rights in the country.
Lustration laws regularly have difficulties withstanding constitutional scrutiny. Some of their features, such as retroactive effect, broad and ill-defined categories of offenders; and problems in differentiating between the public and the private sphere, have provided reasons for constitutional courts to repeal the law. In Bulgaria, the constitutional court annulled an early lustration attempts in 1992. (Sofia enacted its last lustration instrument at the very end of 2006, two weeks before it joined the European Union. Similarly, the constitutional court in the former Czechoslovakia ruled in November 1992 to reduce the scope of the law by restricting the category of “lustrati“. More recently (May 2007), the constitutional court in Poland rescinded most key provisions of the Kaczynski brothers’ mega-lustration bill. The Polish court had also reacted similarly with the bill in 2000, which expanded the scope of previous phases of lustration.
In view of this history, the Macedonian constitutional court may also follow suit. The Macedonian law is also broad in scope, both in categories of “lustrati”, as well as the period it covers.
However, Albania and Macedonia are not the only countries in the Balkans finding it difficult to start their lustrations.
The first country in the region to actually adopt lustration legislation was Serbia. Belgrade passed its law back in 2003. However, lustration has still not effectively begun, nor is there indication that it would begin anywhere in the near future. The 2003 legislation was “born dead”. The commission that was supposed to begin work by lustrating candidates for the 2003 snap elections, never started working, and later it simply dissolved. Commentators say the lustration law had no power because supplementary legislation on opening of secret police files, which was supposed to ensue within two months, never took place.
The other countries in the region are even further behind in the process. Croatia, Montenegro, and Bosnia and Herzegovina do not even have legislation.
Croatia had several attempts to enact lustration legislation. Lustration bills were on the agenda of parliament in 1998 and 1999, and they were voted down both times. Neither Montenegro nor Bosnia has a law, although Podgorica at least has a draft bill.
Twenty years after the end of communism, lustration is still an issue, and it has not even effectively commenced. Perhaps countries in the Balkans should really rethink if they want to “forgive and forget”. In 2000, Adam Michnik advocated the abandoning of lustration in Poland and said that states cannot move forward without having reconciled with the past, but that the challenge is how to achieve this and maintain balance between justice and stability. In 2007, Serbian President Boris Tadic said it was too late for lustration in Serbia. He probably (and rightfully) feared it would further antagonise the already polarised country.
In the Balkans, the overall problem is the delay. If 18 years after the beginning of transition, countries have not even started the lustration, when will they be able to complete it? The experience of the central and east European countries has shown that immediate and quick lustration was the best and least painful way. Subsequent waves of late lustration tended to broaden, protract, and become overly politicised processes. Both the theoretical and the expert community share the consensus that timeliness was a primary factor of effectiveness in the lustration process.
How meaningful can lustration be almost two decades later? Some answers to this dilemma should perhaps be expected from the Macedonian lustration commission members. As small, busy mice, they will be sniffing the dusty police files during the coming winter.
A “historic day,” the “fall of the wall,” the “end of visas” — these were some of the headlines in the Balkan media in response to the European Commission (E.C.) proposing visa liberalization for Macedonia, Serbia, and Montenegro. The visa-free travel could ideally be possible by the beginning of January 2010. Macedonia has already fulfilled all the technical conditions, while some benchmarks still remain to be met by Serbia and Montenegro.
The E.C. proposal would next be discussed in the European Parliament, and the final decision would be made by the European Council later in the year. “I trust that this proposal should be adopted by the E.U. member states by the end of this year after we have also consulted the European Parliament,” Enlargement Commissioner Olli Rehn said at the announcement of the Commission’s proposal yesterday in Brussels. Visa liberalization will bring an end to a costly, unpleasant, and sometimes humiliating ritual for people who need to travel abroad. “For the citizens of the Western Balkans, visa-free travel means no more queuing at embassies, no more visa fees, and no more collecting of supporting documents such as invitation letters, tickets and paying for their translation,” Rehn said. “In a nutshell,” he added, “this will mean a further Europeanization of the civil societies in the Western Balkans and it is an example that European integration is not only a matter of integrating nations, but also peoples and citizens.” The news was greeted with undivided enthusiasm in the three countries.
The issue of painful visa regime has made headlines and topped political agendas for some years. “Our citizens deserved this, and this is success of the European idea in Macedonia,” said Macedonian Prime Minister Nikola Gruevski, welcoming the news in Skopje. Montenegrin Prime Minister Milo Djukanovic received the news in Kotor where he was in a meeting with E.U.’s H.F.S.P. chief Javier Solana. Djukanovic said that Montenegro will meet the remaining conditions by October and expressed confidence that his country will be visa free on January 1, 2010. “We have fulfilled most of the conditions from the roadmap for visa liberalization and now we have a few more things to do,” Djukanovic said. “There is no doubt that our partners will be satisfied with our results.”
In response to the motion from Brussels, Serbian President Boris Tadic said that the Commission’s recommendation is an important thing for the citizens of Serbia. He added it was good that other countries in the region would also be visa free because that would improve the quality of life in the region overall. “Serbia is not responsible only for itself, but also for the cooperation in the region, given that it is the central country in Southeast Europe,” President Tadic said. Serbian Prime Minister Mirko Cvetkovic added that visa liberalization would restore people’s dignity. “From January 1, the citizens of Serbia will be able to travel without visas to Europe, and this will give them back their dignity,” Cvetkovic said. Serbian Deputy Prime Minister for European Integration Bozidar Djelic also welcomed the move but underscored that work had to continue. “The visa darkness has been lifted from the citizens of Serbia, but there is no time for relaxation. We have to continue the reforms.” Djelic was cited by Serbian media comparing the fall of the visa barrier with the national holiday celebrated by the French, the fall of the Bastille in 1789.
Some of the reactions in Serbia expressed concern over the fact that the visa liberalization will divide Serbs in Serbia from Serbs living in Kosovo. The visa-free travel will be a possibility for Serbian citizens with biometric passports, but because of security concerns, even with new biometric passports, residents of Kosovo will still need visas. Kosovo authorities accepted the decision as a further recognition of their separate independent status from Serbia. In addition to Kosovo, Bosnia, Herzegovina and Albania were excluded from the recommendation because they did not make sufficient progress with the needed reforms. Mr. Rehn, however, left the door open. “The ‘roadmaps’ that the E.U. gave them last year are still valid, and they are still perfectly doable if the authorities in these two countries put their full will into delivering now,” Rehn said. “If Albania and Bosnia and Herzegovina keep up the pace of reforms and thus meet the conditions, the Commission could envisage making a new proposal by mid-2010.” Bosnia greeted the news with expected disappointment, but Minister of Civilian Affairs Sredoje Novic said that the government could start issuing new biometric passports by mid-October. B.I.H. officials hope that could allow the country to join the first three countries by mid-2010.
Reactions in Albania also showed optimism. Albanian Interior Minister Bujar Nishani said that Albania needs only to meet a few technical conditions in to join the visa liberalization process, and that the country would come on target by the end of 2009. After a longer period of time, Brussels sent an encouraging message to the Balkans. For most people in the Balkans the European idea is by and large associated with the freedom of movement. This article was originally published at www.osservatoriobalcani.org
Sam Vaknin, Ph.D. Corruption runs against the grain of meritocratic capitalism. It skews the level playing-field; it guarantees extra returns where none should have been had; it encourages the mis-allocation of economic resources; and it subverts the proper functioning of institutions. It is, in other words, without a single redeeming feature, a scourge. Strangely, this is not how it is perceived by its perpetrators: both the givers and the recipients. They believe that corruption helps facilitate the flow and exchange of goods and services in hopelessly clogged and dysfunctional systems and markets (corruption and the informal economy "get things done" and "keep people employed"); that it serves as an organizing principle where chaos reins and institutions are in their early formative stages; that it supplements income and thus helps the state employ qualified and skilled personnel; and that it preserves peace and harmony by financing networks of cronyism, nepotism, and patronage.
I. The Facts
In 2002, just days before a much-awaited donor conference, the influential International Crisis Group (ICG) recommended to place all funds pledged to Macedonia under the oversight of a "corruption advisor" appointed by the European Commission. The donors ignored this and other recommendations. To appease the critics, the affable Attorney General of Macedonia charged a former Minister of Defense with abuse of duty for allegedly having channeled millions of DM to his relatives during the recent civil war. Macedonia has belatedly passed an anti-money laundering law recently, but failed, yet again, to adopt strict anti-corruption legislation.
In Albania, the Chairman of the Albanian Socialist Party, Fatos Nano, was accused by Albanian media of laundering $1 billion through the Albanian government. Pavel Borodin, the former chief of Kremlin Property, decided not appeal his money laundering conviction in a Swiss court. The Slovak daily "Sme" described in scathing detail the newly acquired wealth and lavish lifestyles of formerly impoverished HZDS politicians. Some of them now reside in refurbished castles. Others have swimming pools replete with wine bars.
Pavlo Lazarenko, a former Ukrainian prime minister, is detained in San Francisco on money laundering charges. His defense team accuses the US authorities of "selective prosecution".
They are quoted by Radio Free Europe as saying:
"The impetus for this prosecution comes from allegations made by the Kuchma regime, which itself is corrupt and dedicated to using undemocratic and repressive methods to stifle political opposition … (other Ukrainian officials) including Kuchma himself and his closest associates, have committed conduct similar to that with which Lazarenko is charged but have not been prosecuted by the U.S. government".
The UNDP estimated, in 1997, that, even in rich, industrialized, countries, 15% of all firms had to pay bribes. The figure rises to 40% in Asia and 60% in Russia.
Corruption is rife and all pervasive, though many allegations are nothing but political mud-slinging. Luckily, in countries like Macedonia, it is confined to its rapacious elites: its politicians, managers, university professors, medical doctors, judges, journalists, and top bureaucrats. The police and customs are hopelessly compromised. Yet, one rarely comes across graft and venality in daily life. There are no false detentions (as in Russia), spurious traffic tickets (as in Latin America), or widespread stealthy payments for public goods and services (as in Africa).
It is widely accepted that corruption retards growth by deterring foreign investment and encouraging brain drain. It leads to the misallocation of economic resources and distorts competition. It depletes the affected country’s endowments – both natural and acquired. It demolishes the tenuous trust between citizen and state. It casts civil and government institutions in doubt, tarnishes the entire political class, and, thus, endangers the democratic system and the rule of law, property rights included.
This is why both governments and business show a growing commitment to tackling it. According to Transparency International’s "Global Corruption Report 2001", corruption has been successfully contained in private banking and the diamond trade, for instance.
Hence also the involvement of the World Bank and the IMF in fighting corruption. Both institutions are increasingly concerned with poverty reduction through economic growth and development. The World Bank estimates that corruption reduces the growth rate of an affected country by 0.5 to 1 percent annually. Graft amounts to an increase in the marginal tax rate and has pernicious effects on inward investment as well.
The World Bank has appointed in 2001 a Director of Institutional Integrity – a new department that combines the Anti-Corruption and Fraud Investigations Unit and the Office of Business Ethics and Integrity. The Bank helps countries to fight corruption by providing them with technical assistance, educational programs, and lending.
Anti-corruption projects are an integral part of every Country Assistance Strategy (CAS). The Bank also supports international efforts to reduce corruption by sponsoring conferences and the exchange of information. It collaborates closely with Transparency International, for instance.
At the request of member-governments (such as Bosnia-Herzegovina and Romania) it has prepared detailed country corruption surveys covering both the public and the private sectors. Together with the EBRD, it publishes a corruption survey of 3000 firms in 22 transition countries (BEEPS – Business Environment and Enterprise Performance Survey). It has even set up a multilingual hotline for whistleblowers.
The IMF made corruption an integral part of its country evaluation process. It suspended arrangements with endemically corrupt recipients of IMF financing. Since 1997, it has introduced policies regarding misreporting, abuse of IMF funds, monitoring the use of debt relief for poverty reduction, data dissemination, legal and judicial reform, fiscal and monetary transparency, and even internal governance (e.g., financial disclosure by staff members).
Yet, no one seems to agree on a universal definition of corruption. What amounts to venality in one culture (Sweden) is considered no more than hospitality, or an expression of gratitude, in another (France, or Italy). Corruption is discussed freely and forgivingly in one place – but concealed shamefully in another. Corruption, like other crimes, is probably seriously under-reported and under-penalized.
Moreover, bribing officials is often the unstated policy of multinationals, foreign investors, and expatriates. Many of them believe that it is inevitable if one is to expedite matters or secure a beneficial outcome. Rich world governments turn a blind eye, even where laws against such practices are extant and strict.
In his address to the Inter-American Development Bank on March 14, 2002 President Bush promised to "reward nations that root out corruption" within the framework of the Millennium Challenge Account initiative. The USA has pioneered global anti-corruption campaigns and is a signatory to the 1996 IAS Inter-American Convention against Corruption, the Council of Europe’s Criminal Law Convention on Corruption, and the OECD’s 1997 anti-bribery convention. The USA has had a comprehensive "Foreign Corrupt Practices Act" since 1977.
The Act applies to all American firms, to all firms – including foreign ones – traded in an American stock exchange, and to bribery on American territory by foreign and American firms alike. It outlaws the payment of bribes to foreign officials, political parties, party officials, and political candidates in foreign countries. A similar law has now been adopted by Britain.
Yet, "The Economist" reports that the American SEC has brought only three cases against listed companies until 1997. The US Department of Justice brought another 30 cases. Britain has persecuted successfully only one of its officials for overseas bribery since 1889. In the Netherlands bribery is tax deductible. Transparency International now publishes a name and shame Bribery Payers Index to complement its 91-country strong Corruption Perceptions Index.
Many rich world corporations and wealthy individuals make use of off-shore havens or "special purpose entities" to launder money, make illicit payments, avoid or evade taxes, and conceal assets or liabilities. According to Swiss authorities, more than $40 billion are held by Russians in its banking system alone. The figure may be 5 to 10 times higher in the tax havens of the United Kingdom.
In a survey it conducted in February 2002 of 82 companies in which it invests, "Friends, Ivory, and Sime" found that only a quarter had clear anti-corruption management and accountability systems in place.
Tellingly only 35 countries signed the 1997 OECD "Convention on Combating Bribery of Foreign Public Officials in International Business Transactions" – including four non-OECD members: Chile, Argentina, Bulgaria, and Brazil. The convention has been in force since February 1999 and is only one of many OECD anti-corruption drives, among which are SIGMA (Support for Improvement in Governance and Management in Central and Eastern European countries), ACN (Anti-Corruption Network for Transition Economies in Europe), and FATF (the Financial Action Task Force on Money Laundering).
Moreover, The moral authority of those who preach against corruption in poor countries – the officials of the IMF, the World Bank, the EU, the OECD – is strained by their ostentatious lifestyle, conspicuous consumption, and "pragmatic" morality.
II. What to Do? What is Being Done?
A few years ago, I proposed a taxonomy of corruption, venality, and graft. I suggested this cumulative definition:
• The withholding of a service, information, or goods that, by law, and by right, should have been provided or divulged.
• The provision of a service, information, or goods that, by law, and by right, should not have been provided or divulged.
• That the withholding or the provision of said service, information, or goods are in the power of the withholder or the provider to withhold or to provide AND That the withholding or the provision of said service, information, or goods constitute an integral and substantial part of the authority or the function of the withholder or the provider.
• That the service, information, or goods that are provided or divulged are provided or divulged against a benefit or the promise of a benefit from the recipient and as a result of the receipt of this specific benefit or the promise to receive such benefit.
• That the service, information, or goods that are withheld are withheld because no benefit was provided or promised by the recipient.
There is also what the World Bank calls "State Capture" defined thus:
"The actions of individuals, groups, or firms, both in the public and private sectors, to influence the formation of laws, regulations, decrees, and other government policies to their own advantage as a result of the illicit and non-transparent provision of private benefits to public officials."
We can classify corrupt and venal behaviors according to their outcomes:
• Income Supplement - Corrupt actions whose sole outcome is the supplementing of the income of the provider without affecting the "real world" in any manner.
• Acceleration or Facilitation Fees - Corrupt practices whose sole outcome is to accelerate or facilitate decision making, the provision of goods and services or the divulging of information.
• Decision Altering (State Capture) Fees – Bribes and promises of bribes which alter decisions or affect them, or which affect the formation of policies, laws, regulations, or decrees beneficial to the bribing entity or person.
• Information Altering Fees - Backhanders and bribes that subvert the flow of true and complete information within a society or an economic unit (for instance, by selling professional diplomas, certificates, or permits).
• Reallocation Fees – Benefits paid (mainly to politicians and political decision makers) in order to affect the allocation of economic resources and material wealth or the rights thereto. Concessions, licenses, permits, assets privatized, tenders awarded are all subject to reallocation fees.
To eradicate corruption, one must tackle both giver and taker.
History shows that all effective programs shared these common elements:
• The persecution of corrupt, high-profile, public figures, multinationals, and institutions (domestic and foreign). This demonstrates that no one is above the law and that crime does not pay.
• The conditioning of international aid, credits, and investments on a monitored reduction in corruption levels. The structural roots of corruption should be tackled rather than merely its symptoms.
• The institution of incentives to avoid corruption, such as a higher pay, the fostering of civic pride, "good behavior" bonuses, alternative income and pension plans, and so on.
• In many new countries (in Asia, Africa, and Eastern Europe) the very concepts of "private" versus "public" property are fuzzy and impermissible behaviors are not clearly demarcated. Massive investments in education of the public and of state officials are required.
• Liberalization and deregulation of the economy. Abolition of red tape, licensing, protectionism, capital controls, monopolies, discretionary, non-public, procurement. Greater access to information and a public debate intended to foster a "stakeholder society".
• Strengthening of institutions: the police, the customs, the courts, the government, its agencies, the tax authorities – under time limited foreign management and supervision.
Awareness to corruption and graft is growing – though it mostly results in lip service. The Global Coalition for Africa adopted anti-corruption guidelines in 1999. The otherwise opaque Asia Pacific Economic Cooperation (APEC) forum is now championing transparency and good governance. The UN is promoting its pet convention against corruption.
The G-8 asked its Lyon Group of senior experts on transnational crime to recommend ways to fight corruption related to large money flows and money laundering. The USA and the Netherlands hosted global forums on corruption – as did South Korea in 2003. The OSCE has responded with its own initiative, in collaboration with the US Congressional Helsinki Commission.
The south-eastern Europe Stability Pact sports its own Stability Pact Anti-corruption Initiative (SPAI). It held its first conference in September 2001 in Croatia. More than 1200 delegates participated in the 10th International Anti-Corruption Conference in Prague last year. The conference was attended by the Czech prime minister, the Mexican president, and the head of the Interpol.
The most potent remedy against corruption is sunshine – free, accessible, and available information disseminated and probed by an active opposition, uncompromised press, and assertive civic organizations and NGO’s. In the absence of these, the fight against official avarice and criminality is doomed to failure. With them, it stands a chance.
Corruption can never be entirely eliminated – but it can be restrained and its effects confined. The cooperation of good people with trustworthy institutions is indispensable. Corruption can be defeated only from the inside, though with plenty of outside help. It is a process of self-redemption and self-transformation. It is the real transition.
III. Asset Confiscation and Asset Forfeiture
The abuse of asset confiscation and forfeiture statutes by governments, law enforcement agencies, and political appointees and cronies throughout the world is well-documented. In many developing countries and countries in transition, assets confiscated from real and alleged criminals and tax evaders are sold in fake auctions to party hacks, cronies, police officers, tax inspectors, and relatives of prominent politicians at bargain basement prices.
That the assets of suspects in grave crimes and corruption should be frozen or "disrupted" until they are convicted or exonerated by the courts – having exhausted their appeals – is understandable and in accordance with the Vienna Convention. But there is no justification for the seizure and sale of property otherwise.
In Switzerland, financial institutions are obliged to automatically freeze suspect transactions for a period of five days, subject to the review of an investigative judge. In France, the Financial Intelligence Unit can freeze funds involved in a reported suspicious transaction by administrative fiat. In both jurisdictions, the fast track freezing of assets has proven to be a more than adequate measure to cope with organized crime and venality.
The presumption of innocence must fully apply and due process upheld to prevent self-enrichment and corrupt dealings with confiscated property, including the unethical and unseemly use of the proceeds from the sale of forfeited assets to close gaping holes in strained state and municipal budgets.
In the United States, according to The Civil Asset Forfeiture Reform Act of 2000 (HR 1658), the assets of suspects under investigation and of criminals convicted of a variety of more than 400 minor and major offenses (from soliciting a prostitute to gambling and from narcotics charges to corruption and tax evasion) are often confiscated and forfeited ("in personam, or value-based confiscation").
Technically and theoretically, assets can be impounded or forfeited and disposed of even in hitherto minor Federal civil offenses (mistakes in fulfilling Medicare or tax return forms)
The UK’s Assets Recovery Agency (ARA) that is in charge of enforcing the Proceeds of Crime Act 2002, had this chilling statement to make on May 24, 2007:
“We are pursuing the assets of those involved in a wide range of crime including drug dealing, people trafficking, fraud, extortion, smuggling, control of prostitution, counterfeiting, benefit fraud, tax evasion and environmental crimes such as illegal dumping of waste and illegal fishing." (!)
Drug dealing and illegal fishing in the same sentence.
The British firm Bentley-Jennison, who provide Forensic Accounting Services, add:
"In some cases the defendants will even have their assets seized at the start of an investigation, before any charges have been considered. In many cases the authorities will assume that all of the assets held by the defendant are illegally obtained as he has a “criminal lifestyle”. It is then down to the defendant to prove otherwise. If the defendant is judged to have a criminal lifestyle then it will be assumed that physical assets, such as properties and motor vehicles, have been acquired through the use of criminal funds and it will be necessary to present evidence to contradict this.
The defendant?s bank accounts will also be scanned for evidence of spending and any expenditure on unidentified assets (and in some cases identified assets) is also likely to be included as alleged criminal benefit. This often leads to the inclusion of sums from legitimate sources and double counting both of which need to be eliminated."
Under the influence of the post-September 11 United States and the FATF (Financial Action Task Force on Money Laundering), Canada, Australia, the United Kingdom, Greece, South Korea, and Russia have similar asset recovery and money laundering laws in place.
International treaties (for instance, the 1959 European Convention on Mutual Legal Assistance in Criminal Matters, the 1990 Convention of the Council of Europe on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (ETS 141), and The U.N. Convention against Corruption 2003- UNCAC) and European Union Directives (e.g., 2001/97/EC) allow the seizure and confiscation of the assets and "unexplained wealth" of criminals and suspects globally, even if their alleged or proven crime does not constitute an offense where they own property or have bank accounts.
This abrogation of the principle of dual criminality sometimes leads to serious violations of human and civil rights. Hitler could have used it to ask the United Kingdom’s Assets Recovery Agency (ARA) to confiscate the property of refugee Jews who committed "crimes" by infringing on the infamous Nuremberg race laws.
Only offshore tax havens, such as Andorra, Antigua, Aruba, the British Virgin Islands, Guernsey, Monaco, the Netherlands Antilles, Samoa, St. Vincent, the US Virgin Islands, and Vanuatu still resist the pressure to join in the efforts to trace and seize suspects’ assets and bank accounts in the absence of a conviction or even charges.
Even worse, unlike in other criminal proceedings, the burden of proof is on the defendant who has to demonstrate that the source of the funds used to purchase the confiscated or forfeited assets is legal. When the defendant fails to furnish such evidence conclusively and convincingly, or if he has left the United States or had died, the assets are sold at an auction and the proceeds usually revert to various law enforcement agencies, to the government’s budget, or to good social causes and programs. This is the case in many countries, including United Kingdom, United States, Germany, France, Hong Kong, Italy, Denmark, Belgium, Austria, Greece, Ireland, New Zealand, Singapore and Switzerland.
According to a brief written by Jack Smith, Mark Pieth, and Guillermo Jorge at the Basel Institute on Governance, International Centre for Asset Recovery:
Article 54(1)(c) of the UNCAC recommends that states parties establish non-criminal systems of confiscation, which have several advantages for recovery actions: the standard of evidence is lower (“preponderance of the evidence” rather than “beyond a reasonable doubt”); they are not subject to some of the more restrictive traditional safeguards of international cooperation such as the offense for which the defendant is accused has to be a crime in the receiving state (dual criminality); and it opens more formal avenues for negotiation and settlements. This is already the practice in some jurisdictions such as the US, Ireland, the UK, Italy, Colombia, Slovenia, and South Africa, as well as some Australian and Canadian States."
In most countries, including the United Kingdom, the United States, Austria, Germany, Indonesia, Macedonia, and Ireland, assets can be impounded, confiscated, frozen, forfeited, and even sold prior to and without any criminal conviction. In Australia, Austria, Ireland, Hong-Kong, New Zealand, Singapore, United Kingdom, South Africa, United States and the Netherlands alleged and suspected criminals, their family members, friends, employees, and partners can be stripped of their assets even for crimes they have committed in other countries and even if they have merely made use of revenues obtained from illicit activities (this is called "in rem, or property-based confiscation"). This often gives rise to cases of double jeopardy.
Typically, the defendant is notified of the impending forfeiture or confiscation of his or her assets and has recourse to a hearing within the relevant law enforcement agency and also to the courts. If he or she can prove "substantial harm" to life and business, the property may be released to be used, though ownership is rarely restored.
When the process of asset confiscation or asset forfeiture is initiated, banking secrecy is automatically lifted and the government indemnifies the banks for any damage they may suffer for disclosing confidential information about their clients’ accounts.
In many countries from South Korea to Greece, lawyer-client privilege is largely waived. The same requirements of monitoring of clients’ activities and reporting to the authorities apply to credit and financial institutions, venture capital firms, tax advisers, accountants, and notaries.
Elsewhere, there are some other worrying developments:
In Bulgaria, the assets of tax evaders have recently begun to be confiscated and turned over to the National Revenue Agency and the State Receivables Collection Agency. Property is confiscated even when the tax assessment is disputed in the courts. The Agency cannot, however, confiscate single-dwelling houses, bank accounts up to 250 leva of one member of the family, salary or pension up to 250 leva a month, social care, and alimony, support money or allowances.
Venezuela has recently reformed its Organic Tax Code to allow for:
"(P)re-judgment enforcement measures (to) include closure of premises for up to ten days and confiscation of merchandise. These measures will be applied in addition to the attachment or sequestration of personal property and the prohibition against alienation or encumbrance of realty. During closure of premises, the employer must continue to pay workers, thereby avoiding an appeal for constitutional protection."
Finally, in many states in the United States, "community responsibility" statutes require of owners of legal businesses to
"abate crime" by openly fighting it themselves. If they fail to tackle the criminals in their neighborhood, the police can seize and sell their property, including their apartments and cars. The proceeds from such sales accrue to the local municipality.
In New-York City, the police confiscated a restaurant because one of its regular patrons was an alleged drug dealer. In Alabama, police seized the home of a senior citizen because her yard was used, without her consent, for drug dealing. In Maryland, the police confiscated a family’s home and converted it into a retreat for its officers, having mailed one of the occupants a package of marijuana.
Note – The Psychology of Corruption
Most politicians bend the laws of the land and steal money or solicit bribes because they need the funds to support networks of patronage. Others do it in order to reward their nearest and dearest or to maintain a lavish lifestyle when their political lives are over.
But these mundane reasons fail to explain why some officeholders go on a rampage and binge on endless quantities of lucre. All rationales crumble in the face of a Mobutu Sese Seko or a Saddam Hussein or a Ferdinand Marcos who absconded with billions of US dollars from the coffers of Zaire, Iraq, and the Philippines, respectively.
These inconceivable dollops of hard cash and valuables often remain stashed and untouched, moldering in bank accounts and safes in Western banks. They serve no purpose, either political or economic. But they do fulfill a psychological need. These hoards are not the megalomaniacal equivalents of savings accounts. Rather they are of the nature of compulsive collections.
Erstwhile president of Sierra Leone, Momoh, amassed hundreds of video players and other consumer goods in vast rooms in his mansion. As electricity supply was intermittent at best, his was a curious choice. He used to sit among these relics of his cupidity, fondling and counting them insatiably.
While Momoh relished things with shiny buttons, people like Sese Seko, Hussein, and Marcos drooled over money. The ever-heightening mountains of greenbacks in their vaults soothed them, filled them with confidence, regulated their sense of self-worth, and served as a love substitute. The balances in their bulging bank accounts were of no practical import or intent. They merely catered to their psychopathology.
These politicos were not only crooks but also kleptomaniacs. They could no more stop thieving than Hitler could stop murdering. Venality was an integral part of their psychological makeup.
Kleptomania is about acting out. It is a compensatory act. Politics is a drab, uninspiring, unintelligent, and, often humiliating business. It is also risky and rather arbitrary. It involves enormous stress and unceasing conflict. Politicians with mental health disorders (for instance, narcissists or psychopaths) react by decompensation. They rob the state and coerce businessmen to grease their palms because it makes them feel better, it helps them to repress their mounting fears and frustrations, and to restore their psychodynamic equilibrium. These politicians and bureaucrats "let off steam" by looting.
Kleptomaniacs fail to resist or control the impulse to steal, even if they have no use for the booty. According to the Diagnostic and Statistical Manual IV-TR (2000), the bible of psychiatry, kleptomaniacs feel "pleasure, gratification, or relief when committing the theft." The good book proceeds to say that " … (T)he individual may hoard the stolen objects …".
As most kleptomaniac politicians are also psychopaths, they rarely feel remorse or fear the consequences of their misdeeds. But this only makes them more culpable and dangerous.
Mother Theresa, one of the icons of the XXth century, was born in Skopje. Her place of birth commemorates her with a special award for humanitarian engagement and a Monumental House in the centre of the capital of Macedonia “There is hunger for ordinary bread, and there is hunger for love, for kindness, for thoughtfulness; and this is the great poverty that makes people suffer so much.” – Mother Theresa
Today her closest company is young Skopje skaters. They like the smooth marble and the many curbs and sharp edges around her small square. Skater blogs on the web indicate that the best skating ground in Skopje is next to Mother Theresa.
She wouldn’t mind this company, many would agree. Amid a siege of Beirut in 1982 she negotiated a ceasefire between the Israeli army and the Palestinian guerillas to save some other young skaters. Children have been trapped in a hospital near the front line. Mother Theresa made the war stop and lead the Red Cross to take the children to safety.
By awarding the Mother Theresa award to several deserving humanitarians last week, Skopje quietly paid its respects to its easily greatest native.
She was born here, in the Vlach neighborhood on 26 August 1910, in what was then the Ottoman Empire. There is confusion concerning the exact date of her birthday. According to some sources it was a day later, on August 27. That was however the date of her baptism in the Jesus Heart Church. It was this day she considered as the beginning of her Christian life.
The church, which is no more, was right where Mother Theresa’s monument is now. Half -way between the Stone Bridge and the Old Train Station, in the center of town. She went there with her school friends and sang in the church choir. The church was destroyed in the 1963 earthquake. As those were communist times, authorities were not eager to restore it.
On this very spot the government is now building the Mother Theresa Memorial House. Foundations were put in May and the memorial should be completed by the end of the year. It will comprise a monument, exhibition, an open gate, and a shrine. A local architect, Vangel Bozinovski, won the project on an international competition. The structure should combine traditional style with architectonic materials never before used in the country.
Mother Theresa lived in Skopje until she was 18, when she left to Ireland to join the Sisters of Loreto, from where she proceeded to her true home, Calcutta. In all truth, she always felt her real home were the poor.
“By blood I am Albanian, by citizenship Indian, by faith a Catholic nun, by calling I belong to the world, but my heart belongs to the heart of Jesus”, cited the words of the great missionary, Anton Sereci, a novelist, at last year’s 10th anniversary of Mother Theresa’s death commemorated in Macedonian parliament.
Mr. Sereci was one of the people who got Mother Theresa’s award this year. The price regularly goes to people with strong humanitarian engagement, or who have dedicated themselves to researching the great woman’s life.
The Saint of the Gutters, as LIFE Magazine once called her, was born as Agnes Gonxha Bojaxhiu, in a family of Albanian descent, originally from Skhoder, Albania. She was the youngest child of Nikola and Drane Bojaxhiu.
Her father died when she was eight years old after which her mother raised her as a Roman Catholic. Early in hew childhood she becomes fascinated by stories of missionary work and already at the age of 12 she decides to commit to religious life. She leaves Skopje in 1928, at the age of 18. The rest is history.
No ranking of great contemporaries can be even imagined without her name. Consistently over the years Gallup polls had found Mother Theresa to be the most admired person in the United States. A poll from 1999 conducted in the US ranked her “the most admired person in the 20th century”.
“She is the United Nations. She is peace in the world.” said once of Mother Theresa former UN Secretary General Javier Perez de Cuellar.
Mother Theresa returned to her native Skopje several times over the years; in 1970, 1978, 1980, and 1986.
In 1980, a year after she was awarded the Nobel Peace Prize, the City of Skopje declared her an honorary citizen.
In her unselfish giving she also gave something to her place of birth. And it is a lot. It is the right to associate itself with this contemporary saint.
When celebrated conductor and great humanitarian, Zubin Mehta visited the country last summer for the Ohrid summer festival, Prime Minister Nikola Gruevski gave him a small statue of Mother Theresa. Skopje should be proud of being able to claim even a little bit of Mother Theresa’s greatness.
The recent book “Mother Theresa of Skopje” by Stojan Trencevski, a dedicated researcher of the great woman’s life and president of the association with the same name, explores the life of the Bojaxhiu family in Skopje over generations and sheds light on her childhood years. The book stresses the emotional connection Mother Theresa kept with her native town over the years.
“If there had not been for Skopje, there would not have been me. There would not have been Mother Theresa.”
Whether Mother Theresa had actually ever said those words, or they are just a product of skillful narration, Skopje should be proud. It gets a chance to show that greatness and love can grow everywhere.
By Risto Karajkov, Osservatorio sui Balcani, Rovereto, Italy, July 3, 2008
The Balkans is safer than thought. This is the basic message from a recently published report, “Crime and Its Impact on the Balkans,” by the United Nations Office on Drugs and Crime.
The report, which was launched last week, made global headlines as some of its arguments run counter to common wisdom–that the Balkans is a gloomy and risky place.
With detailed, comprehensive statistics, the report concludes that the Balkans, contrary to widespread opinion, does not have a problem with conventional crime: “South East Europe does not, in fact, suffer from high rates of crime, at least in terms of the range of offences commonly referred to as ‘conventional crime’: murder, rape, assault, robbery, burglary, theft, and the like. In fact, most of the region is safer than West Europe in this respect.” The report notes, “This key fact is often omitted from discussions on crime in the region.”
The report focuses on the so-called Western Balkan countries (former Yugoslavia minus Slovenia plus Albania), Bulgaria, Romania, and Moldova, but its comparisons include Central and Western European countries, and other parts of the world.
In 130 pages of in-depth analysis, the report gives a full account of all crime-related issues that concern the Balkans, from conventional to organized crime and corruption. It discusses both the socioeconomic and political preconditions of crime, and, in turn, the possible impact crime has on the region’s development.
The report first analyzes the social conditions in the Balkans and notes, “The social conditions in South East Europe are not the sort generally associated with high crime regions. In essence the Balkans does not represent a favourable environment for crime.” The report reaches these conclusions because of a set of factors that include the region’s demographic makeup–aging population, low fertility rates (with the exception of Kosovo), combined with strong outward migration, again mostly involving young people. The report considers the additional factors of income and education levels. Incomes are small but the number of people in abject poverty is limited. The region’s communist legacy has left a low, although now widening, income inequality, which is “regarded as the most robust quantitative correlate of crime rates.” Education levels are relatively high (by global standards).
After analyzing the standard indicators of conventional crime, such as murders and theft (especially auto theft), the report unequivocally concludes that the region is safer overall than Western Europe, “In terms of the standardized murder rates â?¦ most countries of the region fall at or below the European average. Moldova and Albania are exceptions, but even these two countries are safer than most of Eastern Europe.” For example, the West European average of murders per 100,000 people (2004 data) stands at 2.5, Macedonia at 2.3, Croatia at 1.8, Romania at 2.5, Bulgaria at 4.1, Albania at 5.7, and Moldova at 8.0. Russia has the worst statistics with an average of 19.9 murders per 100,000 people.
“Albania stands out as having a relatively high murder rate,” concedes the report, but “the number of murders committed in Albania in 2006 is only 5% of what it was after the collapse of government in 1997.”
In addition, the report notes the positive trend over the past decade of declining murder rates throughout the region: “Combining the data from Moldova, Albania, Romania, Croatia, Bulgaria, and Serbia, the number of murders in the region essentially halved between 1998 and 2006.”
In other forms of conventional crime, the report finds Western Europe “to have over twice the burglary, over four times as much assault, and 15 times as much robbery as South East Europe.” For example, in terms of vehicle thefts per 100,000 vehicles, the United Kingdom has the worst statistics with 1,330, Greece has 185, and Austria has 125, whereas Moldova has 184, Croatia has 166, Macedonia has 113, and Albania has 90. Bulgaria has the worst statistics in the region with 412 vehicle thefts per 100,000 vehicles, but the report notes Bulgaria’s declining trend.
With in-depth discussion and analysis for possible mistakes, the report concludes that these relatively positive numbers are not the result of government “adjustments” to look better before the international monitors: “The only conclusion that can be drawn is that South East Europe is one of the safer areas of the world, and that progress is being made in making the region even safer.”
The data on conventional crimes provides the good news; however, the report moves on to discuss the real issues in the region, and that is organized crime: “The issue that makes headlines in South East Europe is not conventional crime â?¦ but organized crime.” Here, the report notes two dimensions: “the role that groups from South East Europe have played in organized crime in West Europe” and “the impact that organized crime has had on the region itself.”
In the section on organized crime, the central issue is drug trafficking. A shorter section covers human trafficking and smuggling of migrants, but the report seems to consider these a much smaller threat, which is nevertheless declining.
The report provides details of the Balkans’ role as a major drug route from Asia to Western Europe: “The most valuable form of contraband crossing the region is heroin. South East Europe lies along the most convenient route (the so-called ‘Balkan route’) between the supplier of some 90% of the world’s heroin (Afghanistan) and its most lucrative consumer market (Western Europe). It is estimated that about 100 tons of heroin crosses South East Europe on its way to Western Europe, of which 85 tons eventually makes it to the consumer, a flow valued at US$25-30 billion. This is more than the GDPs of most of the countries of the region, and consequently this flow has great corrupting power.”
Although “the ‘Balkan route’ has been the continent’s primary heroin trafficking route for decades” the report notes, “the share of South East Europeans who consume opiates is half that of West Europe and one-sixth that of East Europe.” This, according to the authors, “suggests the flow has been conducted by highly organized groups determined to command the highest return for their product, rather than by a diffuse network of couriers who might ’spill’ some of the heroin into their local communities.”
The report additionally notes that “the problem of South East Europe as a gateway for drugs to West Europe must be distinguished from the problem of South East Europeans dealing drugs in West European countries, although the two issues are obviously related.”
In discussing drug trafficking as the most serious form of organized crime concerning the Balkans, the report strongly emphasizes the role of “ethnic Albanians” in the drug trade: “Since the mid-1990s, ethnic Albanian traffickers have been said to control the trafficking of this commodity west into Europe. Past estimates suggested that ethnic Albanian traffickers controlled 70% or more of the heroin entering a number of key destination markets.” For example, the report notes, “About half the heroin seized by the Italian authorities in 2006 was taken from Albanian nationals.”
In trying to explain the “ethnic colour” of organized drug trafficking, the report uses numerous references from national sources in Western Europe, which have singled out Albanian ethnicity: “‘Ethnic Albanian Criminal Groups’ are the only national group discussed in the 2006 Europol publication ‘The Threat From Organized Crime.’”
The report suggests that “ethnic Albanian heroin trafficking is arguably the single most prominent organized crime problem in Europe today.”
Corruption, which is a major issue in the Balkans, is not a focus of the report, but it does observe that “while conventional crime levels are low and organised crime appears to be in decline, [the] one area of criminal activity that is especially problematic in the Balkans [is] corruption and economic crime.”
The report refers to studies from Transparency International to illustrate the scope of corruption in the region: “Large shares of the population continue to report paying bribes. Albania had the highest rate of annual bribe paying (66%) of the 57 countries polled in the 2006 TI Global Corruption Barometer, and the South East European average was 4.5 times as high as the West European average.”
By offering detailed statistics and a realistic approach in analyzing the Balkan crime problem, the report is timely and relevant. It disproves some previous partial or incomplete research and statistics, which feed the stereotype that the Balkans is simply dangerous. The report provides a comprehensive overview of the state of crime in the region. The problem is organized crime and corruption. Conventional crime, although much higher than before the beginning of transition, is still low.
Corruption runs against the grain of 
