News / Europe

    Multinational Efforts Focus on Recovering Billions of Ukraine Loot

    In this framegrab provided by Russian TV Channel Vesti24 via The Associated Press Television News, showing Ukraine's fugitive president, Viktor Yanukovych speaking on Russian state television in Rostov-on-Don, Russia, Sunday, April 13, 2014
    In this framegrab provided by Russian TV Channel Vesti24 via The Associated Press Television News, showing Ukraine's fugitive president, Viktor Yanukovych speaking on Russian state television in Rostov-on-Don, Russia, Sunday, April 13, 2014
    Viktor Yanukovych and his “kleptocrat” inner circle took massive sums of cash and other assets from Ukraine since his presidency began in 2010.
     
    Now the challenge is locating and recovering that loot.
     
    And, experts say the task is daunting, and that it will probably take years to accomplish.
     
    There’s no official figure as to the size of Yanukovych’s theft. But Ukraine’s acting Prosecutor General, Oleh Makhnitsky, has said it could be as much as $100 billion. That would be more than half of Ukraine’s 2013 GDP.
     
    Makhnitsky told Reuters that up to $32 billion of that was cash transported in trucks to Russia as Yanukovych’s grip on power was crumbling.
     
    Some of that money, he said, “is being used to finance the separatist actions in the east of Ukraine.”
     
    Hiding massive amounts of cash and other assets is relatively simple, thanks to the structure of the world’s financial system, banking secrecy laws, and the use of anonymous shell corporations to move funds around.
     
    “It is at the moment very easy to create legal entities, making it impossible to know that it’s one of these corrupt officials, or their associates, or their representatives, who de-facto [in fact] control these assets,” said Jean Pesme, Coordinator of StAR, the Stolen Assets Recovery Initiative run by the World Bank and the United Nations Office of Drugs and Crime.
     
    “They can easily move money around without this being easily detected,” Pesme said, adding this tactic has been used in many countries.
     
    The hunt for Yanukovych’s loot, according to Pesme, uses tools that are widely applicable in most financial crimes cases.
     
    “You need a starting point,” he said, “and then, you unravel the process [sequence of financial transactions].  And what is absolutely critical to that is international cooperation, because, obviously, all of these transactions jump from one jurisdiction to another.
     
    “It’s complicated, and it takes time, because it’s technically complicated for one to trace.” Pesme said. “The second challenge is to prove that the assets that you have been able to identify and trace are actually the proceeds of corruption.”
     
    StAR is one of a number of participants in UFAR, the Ukraine Forum for Asset Recovery, which met in London last month.
     
    The United States was represented by Attorney General Eric Holder. Britain’s Home Secretary Theresa May was also there, as were delegates from a number of European and other countries. 
     
    Holder told participants that within days of the February departure of Yanukovych, he sent a U.S. Justice Department team to Kyiv “to assess the needs of Ukraine’s investigation into any stolen assets belonging to its people.”
     
    He also pledged that “the United States will never stop fighting alongside Ukraine and its partners to ensure accountability.”
     
    Support for UFAR also comes from former U.S. Ambassador to Ukraine John Herbst, now Eurasia Center Director for The Atlantic Council.
     
    “For over 20 years,” he told VOA, “elites in the [countries of] the former Soviet Union have robbed their countries’ assets and deposited them in Western financial institutions. This meeting suggests that, at least in some instances, Western countries will take concerted action to stop such looting.”
     
    Ukraine’s transparency and accountability advocates applaud the internationally-led recovery effort.
     
    “UFAR is crucially important for Ukrainian law enforcement to maintain [the] right focus on complex money laundering investigations,” said Daria Kaleniuk, executive director of the Anti-Corruption Action Center in Kyiv.
     
    “With such support,” she said, “Ukraine has no right to fail on the asset recovery task. We as [elements of] civil society will keep pressure on law enforcement and government in Ukraine to ensure we don’t lose this opportunity. We are ready to be partners and assist them.”
     
    One nation absent from the UFAR meeting was Russia, a signatory to the United Nation’s Convention on Corruption - one of the international community’s frameworks for collective action.  Kaleniuk was not optimistic that Moscow would assist Kyiv.
     
    “This country hides criminals like Yanukovych, [and] accepted billions in cash looted from Ukraine,” she said and makes it “unlikely we will recover these assets.”
     
    But Herbst said it is hard to predict Russian President Vladimir Putin’s reaction to UFAR and Ukraine’s recovery efforts.
     
    “He might decide that it is important to take a stand on principle, to send a signal to his team [cohorts] that he will take all measures to protect their ill-gotten gains by not allowing a precedent to be set with Mr. Yanukovych’s assets,” he said. “Alternately, as a small gesture to the west, or as part of an effort to build support for his puppets in East Ukraine, he could take a stand against Ukrainian oligarchs, including Mr. Yanukovych.”
     
    The London meeting, while focused on Ukraine, also encouraged participating nations to improve their own anti-corruption laws and structures.
     
    UFAR’s “Chairs Statement” notes “efforts by several countries to review their legal frameworks to benefit from best practices in other jurisdictions, and to ensure they can act diligently, effectively, and efficiently on asset recovery,” adding “both for preventing corruption and money laundering, and recovering assets.”
     
    While UFAR is focused on Ukraine, many of the problems there are experienced in many other nations.
     
    Raymond Baker, president of Global Financial Integrity, a Washington-based transparency and good governance advocacy organization, said a collective international response is needed to combat "this shadow financial system comprised of anonymous shell companies, tax haven secrecy, and trade-based money laundering techniques,” which he says, “siphons roughly a trillion dollars out of developing and emerging economies each year, decimates government revenues, facilitates corruption, and propels transnational crime.”

    Jeffrey Young

    Jeffrey Young is a Senior Analyst in VOA’s Global English TV.  He has spent years covering global strategic issues, corruption, the Middle East, and Africa. During most of 2013, he was on special assignment in Baghdad and elsewhere with the Special Inspector General for Iraq Reconstruction (SIGIR).  Previous VOA activities include video journalism and the “Focus” news analysis unit. He also does journalist training overseas for VOA.

    You May Like

    US-Russia Tensions Complicate Syria War

    With a shared enemy and opposing allies, Russia and the US are working to avoid confrontation

    Video Re-opening Old Wounds in Beirut's Bullet-riddled Yellow House

    Built in neo-Ottoman style in 1920s, it is set to be re-opened in Sept. as ‘memory museum’ - bullet-riddled walls and bunkered positions overlooking city’s notorious ‘Green Line’ maintained for posterity

    Cambodian-Americans Lobby for Human Rights Resolution

    Resolution condemns all forms of political violence in Cambodia, urges Cambodian government to end human rights violations, calls for respect of press freedom

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Brexit Vote Plunges Global Markets Into Uncharted Territoryi
    X
    June 24, 2016 9:38 PM
    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Brexit Vote Plunges Global Markets Into Uncharted Territory

    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.
    Video

    Video Tunisian Fishing Town Searches for Jobs, Local Development Solutions

    As the European Union tries to come to grips with its migrant crisis, some newcomers are leaving voluntarily. But those returning to their home countries face an uncertain future.  Five years after Tunisia's revolution, the tiny North African country is struggling with unrest, soaring unemployment and plummeting growth. From the southern Tunisian fishing town of Zarzis, Lisa Bryant takes a look for VOA at a search for local solutions.
    Video

    Video 'American Troops' in Russia Despite Tensions

    Historic battle re-enactment is a niche hobby with a fair number of adherents in Russia where past military victories are played-up by the Kremlin as a show of national strength. But, one group of World War II re-enactors in Moscow has the rare distinction of choosing to play western ally troops. VOA's Daniel Schearf explains.
    Video

    Video Experts: Very Few Killed in US Gun Violence Are Victims of Mass Shootings

    The deadly shooting at a Florida nightclub has reignited the debate in the U.S. over gun control. Although Congress doesn't provide government health agencies funds to study gun violence, public health experts say private research has helped them learn some things about the issue. VOA's Carol Pearson reports.
    Video

    Video Trump Unleashes Broadside Against Clinton to Try to Ease GOP Doubts

    Recent public opinion polls show Republican Donald Trump slipping behind Democrat Hillary Clinton in the presidential election matchup for November. Trump trails her both in fundraising and campaign organization, but he's intensifying his attacks on the former secretary of state. VOA National Correspondent Jim Malone reports.
    Video

    Video Muslim American Mayor Calls for Tolerance

    Syrian-born Mohamed Khairullah describes himself as "an American mayor who happens to be Muslim." As the three-term mayor of Prospect Park, New Jersey, he believes his town of 6,000 is an example of how ethnicity and religious beliefs should not determine a community's leadership. Ramon Taylor has this report from Prospect Park.
    Video

    Video Internal Rifts Over Syria Policy Could Be Headache for Next US President

    With the Obama administration showing little outward enthusiasm for adopting a more robust Syria policy, there is a strong likelihood that the internal discontent expressed by State Department employees will roll over to the next administration. VOA State Department correspondent Pam Dockins reports.
    Video

    Video Senegal to Park Colorful ‘Cars Rapide’ Permanently

    Brightly painted cars rapide are a hallmark of Dakar, offering residents a cheap way to get around the capital city since 1976. But the privately owned minibuses are scheduled to be parked for good in late 2018, as Ricci Shryock reports for VOA.
    Video

    Video Florida Gets $1 Million in Emergency Government Funding for Orlando

    The U.S. government has granted $1 million in emergency funding to the state of Florida to cover the costs linked to the June 12 massacre in Orlando. U.S. Attorney General Loretta Lynch announced the grant Tuesday in Orlando, where she met with survivors of the shooting attack that killed 49 people. Zlatica Hoke reports.
    Video

    Video How to Print Impossible Shapes with Metal

    3-D printing with metals is rapidly becoming more advanced. As printers become more affordable, the industry is partnering with universities to refine processes for manufacturing previously impossible things. A new 3-D printing lab aims to bring the new technology closer to everyday use. VOA's George Putic reports.
    Video

    Video Big Somali Community in Minnesota Observes Muslim Religious Feast

    Ramadan is widely observed in the north central US state of Minnesota, which a large Muslim community calls home. VOA Somali service reporter Mohmud Masadde files this report from Minneapolis, the state's biggest city.

    Special Report

    Adrift The Invisible African Diaspora