For years Ecuadorians have been wondering, where is the money? Sadly, for now there are no answers. Throughout the country there are voices demanding a referendum and seeking adequate sanctions to corruption acts. Corruption is the main topic in national newspapers, always with bad news. There are no discussions regarding the need to find effective mechanisms to fight corruption. However, leaving aside the political issues, it is necessary to consider relevant legal ammendments thar can make a difference in a country with unreliable legislation.
The answer is complex, but at least it is clear that if in Ecuador crime pays, and in multi-million dollar sums, there is a very high economic incentive to commit acts of corruption; and, a few years in jail doe not seem to discourage anyone. Actually, from a purely financial point of view, it is very profitable to spend a couple of years in prison, as a worst case scenario, in exchange for a life full of luxuries with "easy" money. So, it is clear that the issue of asset recovery in corruption cases should be at the top of the list in the referendum’s amendments.
What is asset recovery?
Asset recovery is a complex process involving the identification, tracking, detention, confiscation, forfeiture and restitution of assets obtained or derived from corrupt acts, and the assets used in or the product of those assets.
The final result of assets recovery is the restitution to the State of all the assets lost due to corrupt acts. This seemengly impossible mission has not been impossible for other countries. Peru achieved the repatriation of important amounts of money misappropriated by former President Fujimori and his advisors; likewise, the Philippines also rescued funds transferred by the Marcos family.
Which are the proposed amendments seeking to fight corruption?
Some proposed constitutional and legal amendments to fight corruption are currently under discussion, including the following:
Amend Article 233 of the Constitution, Article 96 of the Electoral and Political Organizations Organic Law: Democracy Code, Article 10 of the Public Service Organic Law and Article 60 of the Organic Criminal Code, to limit candidacy rights, contracting with the State, holding public offices and the exercise of participation rights to persons convicted of crimes related to acts of corruption.
Amend Article 68 of the Organic Criminal Code to limit participation rights for persons convicted of crimes related to acts of corruption for a period between 10 to 25 years.
Amend articles 280, 285 and 289 of the Organic Criminal Code to punish legal entities that have participated in acts of corruption with their dissolution and liquidation and a fine of 500 to 1,000 unified basic salaries.
Amend Article 77 of the Organic Criminal Code to establish the integral reparation of the State and society for crimes related to acts of corruption; convicted persons will be held liable, with all their assets, up to the amount necessary to fully repair the State. This amendment is perhaps the only one related to asset recovery.
What legal amendments could be included regarding the issue of asset recovery?
From a comparative law point of view, some legal mechanisms have been useful and successful in dissuading corruption from an asset recovery perspective. Among those we can highlight, the following:
First, Ecuador may include an extensive asset forfeiture, or "extended confiscation" for corruption cases. This institution was developed by the European Union and several countries adopted it, as is the case in Spain, for criminal activities within an organized criminal or terrorist group, but could easily be applied to cases of corruption.
Extended confiscation refers to expanding the effect of confiscation, a legal provision that already exists in the Ecuadorian legal system, to include the confiscation of all goods, instruments and profits from criminal activities, in corruption cases, that have a disproportionate value with respect to the income legally obtained by a particular person. This would be detenrmined by a competent judge based on specific facts in each case, and would facilitate the persecution of the crime of unjustified enrichment.
On the other hand, hardening the penalties for some crimes already incorporated in the Organic Criminal Code, such as illicit enrichment, unjustified private enrichment, and “testaferrismo” figureheads, for cases of corruption, would serve to discourage these acts. As a result, the years of imprisonment would not compensate the profits of committing acts of corruption. While this change might be useful, we acknowledge that it is even more important to eliminate impunity and a proper invetigation and punishment of these crimes, effective control could generate better results than new laws.
In addition to the above, an amendment related to the "evidenciary rules" could be very effective. For example, in many legal systems, the defendant is required to prove the lawfulness of unjustified income. Those who defend this position argue that hidden income require that the person who claims that the income is lawful bears the burden of proof. Similarly, in some other countries, such as Italy, the burden of proof to exonerate legal entities from illicit acts committed by senior officers is born by that entity. It is argued that the legal entity is the one that knows if its compliance programs were fulfilled and is in a better position to practice and provide rebuttal evidence.
These evidentiary alterations in criminal matters have been subject to criticism, especially regarding the violation of the principle of innocence and other constitutional rights. However, it has been considered that these figures do not properly imply an alteration on the burden of proof since the prosecution would still need to prove the existence of the criminal offense.
Finally, amendments that promote international cooperation for asset recovery could be incorporated. Ecuador is already signatory of some conventions in this respect, but it is necessary to implement specific measures, such as bilateral cooperation agreements that promote anti-corruption practices. Among the measures that may be adopted in the aforementioned agreements are: (i) to define a conflict resolution body responsible for resolving the repatriation of asset requests from other countries; (ii) to establish mandatory mechanisms for information exchange; and, (iii) to include procedures for the confiscation of misappropriated property.
The suggested amendments address the importance of asset recovery in order to fight corruption. However, we are aware - as it has been anticipated - that for these recovery programs to be successful, legal reforms are not essential. For this endevaour financing is essential. In the long run, these efforts will save the country money and create trained institutions with exclusive functions to track and recover assets. But above all, to achieve these goals it is necessary to have real political will.