This Week in Markets and Democracy: BRICS Fund Infrastructure, France’s Corruption Trial, UK Takes on Kleptocrats

BRICS Fund Infrastructure

As commodity prices have plunged, global growth slowed, and geopolitical competition risen, the BRICS’ interests have diverged, making annual meetings of the five emerging economies more complicated. Last weekend’s get-together in Goa, India focused mostly on counterterrorism and the New Development Bank (NBD), a two-year old alternative to the World Bank and other Western-dominated institutions. Its focus is green and sustainable infrastructure, seeded with $100 billion in capital. At the BRICS Summit, leaders celebrated the NBD’s first $900 million in loans for renewable energy projects in Brazil, China, India, and South Africa, and promised to expand the bank’s portfolio tenfold by 2020. The NBD joins the new Beijing-led Asian Infrastructure Investment Bank (AIIB), which promises a similar capital base for a more traditional infrastructure-based projects. Together they could rival the World Bank’s lending power.

France’s Obiang Corruption Case

France is set to try Teodoro Obiang—the vice president of Equatorial Guinea and the son of its long-ruling dictator—on money laundering, corruption, and embezzlement charges. Obiang’s court date comes almost a decade after Transparency International and other civil society groups filed a criminal complaint accusing him of using stolen public funds to fund a lavish lifestyle in Paris. France’s highest court allowed the case to move forward, and the government took measures to confiscate millions in assets, including at least eleven luxury cars, a multi-million dollar wine collection, artwork by Degas and Rodin, and a $3.7 million clock. Equatorial Guinea has fought back, trying to have the case dismissed by claiming diplomatic immunity, and Obiang refuses to appear in court. If the case continues and succeeds with a criminal prosecution, it will represent a significant blow to kleptocrats.

The UK May Make it Easier to Seize Suspect Assets

The United Kingdom is also looking to crack down on kleptocrats, going after those who hide their money in the country, often in its real estate market—London alone has over 36,000 anonymously-owned properties. The new Criminal Finances Bill, introduced last week, creates Unexplained Wealth Orders, which would allow British authorities to freeze and seize assets worth over £100,000—including property and jewelry—bought with suspect funds. The bill puts the burden on owners to prove their properties’ legal providence, and addresses major weaknesses in UK asset recovery, including law enforcement’s preference to wait on convictions in corrupt officials’ home countries before seizing assets (this often takes decades). If passed, the bill could come into effect as soon as spring 2017, following through on the UK’s pledge to strengthen anti-money laundering laws at the Anticorruption Summit it hosted last May.