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Reconciliation with illicit gainers opens door for more corruption: researcher - Daily News Egypt

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Reconciliation with illicit gainers opens door for more corruption: researcher

The Mubaraks’ offshore activities in the Panama Papers is not new information, inadequate for the judicial procedure, says Osama Diab

Minister of Justice Hossam Abdel Rehim said there are increased efforts in the reconciliation process with Mubarak regime figures.

In press statements to state run-newspaper Al-Ahram, he said: “There are three cases so far in which the defendants refunded their illicit gains in return for reconciliation.”

There are 35 cases pending the refund and reconciliation that the Illicit Gains Authority is still working on, according to Abdel Rehim.

Following in the footsteps of his dismissed predecessor Ahmed Al-Zind, Abdel Rehim said the reviewing process takes place in partnership with the prosecution to lift the defendants’ names from the travel or arrivals ban list and overturn the charges against them upon refunding the money.

The ministry’s statements come amid the publishing of massive leaks from a law firm based in Panama named Mossack Fonseca. Known as the Panama Papers, at least 11m documents linked to world leaders, businessmen and celebrities, including the former president’s son Alaa Mubarak in Egypt. The leaks triggered official investigations in some of the countries including the British Virgin Islands (BVI).

Since October 2015, a new strategy was adopted by the Justice Ministry to drop charges against the Mubarak family and other regime figures in return for refunding the money they gained illicitly and smuggled in offshore businesses.

Researcher Osama Diab commented that while the reconciliation process may seem far more practical than legal proceedings, it sets a precedent, posing a great threat in terms of the prevalence of corruption.

Diab, who works at the Egyptian Initiative for Egyptian Rights (EIPR), told Daily News Egypt: “If all corruption cases ended up with reconciliation, it would constitute an indirect approval of the act of illicitly gaining funds itself that simply drops by returning the fund.”

“There should be a deterrent to committing such a corrupt act.”

Since 2011, eight judicial committees were formed to follow up on the money smuggled to foreign private banks, including Swiss banks, but all of them failed to retain control of the funds since most of the corruption-related charges against Mubarak-regime figures have been dismissed.

A former high-ranking judicial official who led one of those committees told Daily News Egypt, on condition of anonymity, that the Panama Papers may be a used as an asset in the investigations against Mubarak sons.

“There is no evidence against the Mubaraks for offshore activities, but there are court verdicts that could be used,” the source said. Though it may take years to reach these verdicts, this does not mean the state will give up on retrieving the funds, according to the source.

The reason behind this failure to retrieve the funds has been attributed to the notorious lengthy judicial procedures. In his recent visit to Cairo, Swiss prosecutor-general Michel Lauber said Egypt must prove a link between the crimes committed by the Mubarak sons and regime figures and their frozen assets in Switzerland in order to return the money.

“Egypt’s illicit gains authority is already aware of the Mubaraks’ offshore activities, especially Pan World Investment Ltd., which appeared in one of their memos in 2011,” Diab said. “There is no new information in the leaks, but Egypt still has an opportunity to push for freezing their assets in BVI.”

Both Gamal and Alaa Mubarak will reportedly be summoned for investigations in relation to the Panama Papers. A final verdict was issued against them in late 2015, sentencing them to three years strict imprisonment in the infamous Presidential Palaces case.

The case, however, cannot be grounds for obtaining the funds in Switzerland or anywhere in the world, according to Diab. “It only tackles small amounts of money related to logistic expenditures for those palaces.”

There are at least CHF 590m in frozen assets in Swiss banks, a cumulative value made up of the holdings of a total of 14 accused officials, including former president Hosni Mubarak and his family.

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