France operationalizes its new returns mechanism for illicit assets

An innovative mechanism for the return of illicit assets

Corruption is a complex and persistent problem which affects all regions of the world. It is a threat to the rule of law, an obstacle to the proper running of the economy, a factor for instability at national, regional and international level, and a major hindrance to the sustainable development of our societies.

In certain cases, corruption is used within States to acquire the assets of other States. Returning these illegally acquired assets in cooperation with States of origin and in close proximity with their populations is an effective anti-corruption tool.

France therefore established a now operational mechanism for the return of illicit assets, managed by the French Ministry for Europe and Foreign Affairs (MEAE), via the Programming Act 2021-1031 of 4 August 2021 on inclusive development and the fight against global inequalities.

This innovative mechanism is aimed at returning funds from the sale of illicit assets which have been definitively confiscated in France via cooperation and development actions in close proximity with populations. It has been operational since its details were set out in circular no. 6379/SG of 22 November 2022, signed by the Prime Minister.

How does it work?

When illicit assets have been confiscated by the French judicial authorities, French law enables the State of origin to request their return by making a request for mutual legal assistance. This State may also bring an action before the French courts to have rights of ownership established or to seek redress:

• by filing a complaint in French courts if the matter gave rise to the opening of an independent investigation in France (especially for laundering of corruption);
• or by starting civil proceedings.

The returns mechanism for illicit assets managed by the MEAE allocates the appropriations corresponding to the confiscated sums, after they are incorporated into the State’s overall budget. These sums are then allocated to cooperation and development actions. Various organizations can then use these funds to implement cooperation and development actions in close proximity with the populations concerned.

Returned sums enable the financing of cooperation and development actions

The implementation of the returns mechanism is carried out in cooperation between France and the State of origin of the funds. Since they improve the population’s living conditions, the actions financed by these funds can take on several forms:

• infrastructure projects implemented by international donors;
• initiatives led by UN agencies, such as UNESCO’s actions to enhance the quality of education;
• or support for civil society actions.

These actions are not included under French official development assistance (ODA) because they involve returning to the relevant populations the sums they were wrongly denied.

Full involvement from civil society organizations

The local population is included in the bodies which monitor the implementation of projects financed by the returned sums. Part of the returned funds can finance the capacity-building of local civil society organizations in order to raise their awareness of issues involving the return of assets and enable them to develop their own monitoring and control tools for the use of these funds.

French and international civil society organizations appear to be benchmark partners for carrying out this capacity-building of civil society organizations in countries from which these funds originate.

Correct information for civil society organizations is guaranteed via observance of best practices in terms of transparency and traceability of the use of funds, as set out in the circular. Any written agreements signed with the State of origin with respect to the allocation of funds, information regarding the action financed (cost of the action, purpose, managers’ audit and assessment reports etc.) as well as, where applicable, agreements with organizations responsible project implementation, will be published.