Corruption, especially grand corruption, has had a staggering impact on Moldova. Between 2010 and 2014, the biggest bank fraud in history relative to a country’s size, cost Moldova an estimated 10 to 15 percent of its GDP. Concurrently, Moldova’s banking and judicial systems were compromised by the Laundromat scheme, which laundered more than USD 20 billion out of Russia through a network of Moldovan and Latvian banks and through fraudulent court orders by Moldovan judges which facilitated the transfer of these funds into the global banking system, making them appear as legitimate business transactions.
The StAR Initiative started its engagement with Moldovan authorities in 2019 to facilitate contacts between the Moldovan Anti-Corruption Prosecutor’s Office (APO) and foreign jurisdictions related to the bank fraud case, which was paused due to management changes and lack of political will in January 2020.
In December 2022, President Maia Sandu appealed to the international community at the 20th International Anti-Corruption Conference (IACC) to organize a forum to bring together law enforcement and asset recovery professionals from Moldova with practitioners from jurisdictions where laundered money ended up. As StAR had been preparing the launch of a reinvigorated Global Forum on Asset Recovery, Moldova joined the GFAR Action Series as the first focus country in June 2023. The GFAR Action Series presented Moldova with the opportunity to make tangible progress on its cross-border asset recovery cases by facilitating communication and negotiations between Moldovan authorities and requested countries in connection with on-going cases. StAR’s partners in the Action Series, the International Anti-Corruption Coordination Centre (IACCC) and the International Centre for Asset Recovery (ICAR), also provided support to Moldova to prepare for the case consultations.
StAR built on past capacity-building efforts by delivering guidance at both leadership and practitioner levels on how to strategically approach asset recovery from abroad. Key areas of focus included more effective screening of cases and prioritizing efforts for maximum impact; dedicating more resources to proceedings closer to adjudication and enforcement stages; improving domestic coordination to better harness resources; enhancing case-planning and sequencing of requests for assistance and setting realistic expectations and goals by focusing on cases with potential for speedier returns. StAR emphasized the importance of building trust and credibility with foreign jurisdictions through quick responses to requests for further information and persistent follow-up in order to achieve results.
This practitioner-based approach led to significant improvements in Moldova’s asset recovery efforts. Moldovan authorities refined and focused their requests, ensuring that assistance sought is well-motivated and ensuring that links between assets and alleged offences are well established. This resulted in tangible outcomes, such as the Swiss Federal Criminal Court maintaining a block on a villa in Geneva linked to Vladimir Plahotniuc, and the freezing of USD 100 million by a foreign jurisdiction in a money laundering case related to the Laundromat scheme.
Legislative changes and better allocation of responsibilities among domestic authorities are also being pursued, promising a more enduring solution to the problem of enforcing domestic confiscation orders abroad.
StAR’s sustained engagement and mentoring of criminal justice officials on strategically approaching international cooperation and asset recovery has created significant momentum in Moldova. The approaches implemented are likely to endure, as they have grown out of practical problem-solving between local officials and foreign counterparts and is also evidenced in the willingness of the latter to provide legal assistance in high-level corruption cases.
The GFAR Action Series approach, which focuses on the quality of engagements over time, long-term outcomes and partnerships, allowed the StAR team to support Moldovan authorities at a deeper level, reinforcing learning incrementally and sustainably. Moldovan practitioners have benefited from numerous trainings, but the continuing facilitation provided by StAR was crucial in building their capacity to effectively pursue asset recovery.
Moldovan authorities have significantly improved their ability to recover stolen assets and combat corruption, setting a strong foundation for future efforts in this critical area and the StAR Initiative will continue to support where needed.
