The Draft Asset Recovery Proclamation of Ethiopia: A Comprehensive Overview
A draft Asset Recovery proclamation presented to lawmakers aims to empower the government to seize assets purchased with undeclared income. The draft Asset Recovery Proclamation targets tangible and intangible assets worth over five million birr, with retroactive seizures extending up to 10 years.
This draft Asset Recovery Proclamation is distinct from existing anti-corruption legislation and focuses on assets acquired through untaxed income. It covers a wide range of assets, including bank credits, stocks, bonds, and other economically beneficial assets.
The government can freeze or seize assets even without a court ruling, applying to public institutions, private entities, and individuals. However, assets acquired through unknown channels remain subject to criminal and anti-corruption laws.
The draft Asset Recovery Proclamation includes mechanism allowing individuals to avoid prosecution if they fully disclose illegally acquired assets, which would still be forfeited. Investigations can look back 10 years for assets valued at five million birr or more.
The Asset Recovery Proclamation permits investigators to bypass privacy laws, accessing bank accounts, emails, and more without a court order. It also provides for undercover operations and cooperation with other countries to recover assets. The Ministry of Justice will create a new department to enforce the law. Parliament’s Legal and Justice Affairs standing committee is reviewing the draft. This blog provides an in-depth analysis of the Proclamation, citing relevant legal articles and provisions.
Legal Framework and Definitions
The Proclamation, officially titled “Asset Recovery Proclamation No. —-/2024,” outlines its objectives in the preamble. It emphasizes the need to prevent individuals from benefiting from illegal acts and to address the detrimental effects of economic crimes on the country’s economy. Key definitions include:
- Asset: Includes movable and immovable property, money, securities, and virtual assets (Article 2(1)).
- Proceeds of Crime: Assets obtained directly or indirectly from a crime (Article 2(2)).
- Confiscation: Permanent deprivation of ownership rights upon the asset based on a court decision (Article 2(6)).
Scope of Application
The Proclamation applies to asset recovery cases within Ethiopia’s jurisdiction, including unexplained assets (Article 3). Legal persons, except government institutions, are subject to asset recovery laws if there is evidence of obtaining undue advantage from criminal activity (Article 4).
Recovery of Unexplained Assets
Article 5 outlines the conditions for the recovery of unexplained assets. If a person maintains a lifestyle disproportionate to their legitimate income and fails to explain the source of their wealth satisfactorily, the assets can be confiscated. This provision ensures that individuals cannot conceal ill-gotten gains under the guise of unexplained wealth.
Pretrial and Investigation Procedures
Articles 6-10 detail the pretrial and investigation processes. The prosecutor may request individuals to disclose asset details and the means of acquisition. Special investigation techniques, such as monitoring bank accounts and conducting undercover operations, are authorized to gather evidence (Article 11).
Asset Freezing and Seizure
Articles 15-22 cover asset freezing and seizure procedures. Freezing orders can be issued if there is an investigation that may lead to asset confiscation or if there is a risk of asset dissipation. The court must decide on freezing orders within 15 days of application (Article 15(6)).
Confiscation Provisions
Articles 23-30 address asset confiscation. Both conviction-based and non-conviction-based confiscations are provided for. For instance, non-conviction-based confiscation can occur if the suspect absconds or dies (Article 30).
Asset Management and Utilization
Articles 31-37 discuss the appointment of asset managers and the utilization of confiscated assets. Confiscated assets can be used to support justice administration institutions or returned to victims (Article 37).
International Cooperation
Articles 38-47 emphasize international cooperation for asset recovery. The Ministry of Justice acts as the central authority for mutual legal assistance requests from other states, ensuring Ethiopia’s alignment with international standards (Article 38).
Miscellaneous Provisions
Articles 48-57 include provisions for whistleblower rewards, the establishment of a dedicated asset recovery department, and transitional arrangements for pending cases. The Proclamation repeals conflicting laws, ensuring a unified legal framework for asset recovery (Article 55).
The Draft Asset Recovery Proclamation in Ethiopia has ignited significant debate among Ethiopians both locally and abroad. The comprehensive bill, which spans eight sections and 57 articles, aims to combat illicit wealth by mandating proof of legitimacy for all income, including digital currencies and foreign remittances. However, critics worry that its broad scope and detailed provisions could be misused to unfairly target citizens, especially given the current lack of trust in judicial and law enforcement institutions. Concerns also arise from the retroactive nature of the law, its potential to disrupt legitimate economic activities, and legal ambiguities around modern income sources such as social media platforms. While the proclamation’s intent to enhance asset recovery is clear, its stringent requirements and the fear of political misuse have led to widespread apprehension about its implementation and potential impacts on both individuals and the broader economy.
