Solution Overview

The Open Asset Repatriation System (OARS) is an open-source, web-based tool that can be used to create a permanent record of the movement and allocation of repatriated assets from one country to another by leveraging distributed ledger technology (DLT). OARS is currently developed to a proof of concept (POC) stage.

This research brief is intended as a public resource to demonstrate how OARS is designed to harness the power of DLT to strengthen trust and transparency in international asset return processes and to encourage public engagement in the development of digital public goods that strengthen accountability measures.

The research and work associated with the development of the OARS prototype help to advance the mission of New America’s Digital Impact and Governance Initiative (DIGI) to improve the provision of public systems and services by catalyzing next-generation systems and digital solutions through cross-sector collaboration with government partners, the technology sector, and civil society. Interoperable, open, and replicable digital solutions are tools to be leveraged for more inclusive, transparent, and secure societies and do not need to come at the cost of privacy or human rights. The emerging field of digital public infrastructure is grounded in the effectiveness and efficiency of modular, interoperable digital solutions, powered by open-source, open-data architecture that integrates with other solutions.

As currently designed, OARS is not intended to be used to move funds. Rather, it has the potential to create permanent records of the movement of repatriated funds.

While technology alone can’t monitor what actions may take place offline or off-ledger, the goal of OARS is to empower partners in an asset return scenario to accurately track and record how funds are allocated and with what oversight. A return process managed through OARS respects the autonomy of the origin country by complementing existing oversight structures. Additionally, OARS has the potential to empower community involvement in public administration by giving civil society organizations and others a transparency tool to help monitor whether money is being spent as determined by agreements overseeing the provision of an asset return. These measures have the potential to bolster trust and accountability in public institutions.

OARS was developed through a collaboration between DIGI, the technical provider R3, and the State Department’s Bureau of International Narcotics and Law Enforcement Affairs.

Asset recovery is recognized as “a fundamental principle” of the United Nations Convention against Corruption (UNCAC), the only legally binding universal anti-corruption instrument. UNCAC has been signed and ratified by over 160 countries and is widely perceived as a major step in furthering cooperation among countries to join forces to fight corruption and assist each other in recovering looted assets.

In the United States, the Department of Justice’s Kleptocracy Asset Recovery Initiative under the Money Laundering and Asset Recovery Section (MLARS) has repatriated or assisted in the return of $2 billion in proceeds from foreign official corruption since 2010.

Under current international law and norms, there is no defined or standardized process for how seized assets are returned from one country to another. As a result, returning countries often bear the cost of litigation and multijurisdictional investigations to ensure that repatriated assets are not lost to corruption or misuse. Countries are increasingly working together to return recovered assets to their country of origin in line with domestic laws and international obligations.

The concept driving the design of OARS is creating a trusted, permanent, and auditable record of the movement of returned funds, transferred through existing channels such as bank accounts, between and within countries. OARS is a digital tool designed to help facilitate the asset repatriation processes by tracking decisions and actions on a secure, decentralized, consensus-based digital ledger. It does this in two ways:

1. Managing and recording the workflow of authorized participants in an asset return; and
2. Facilitating real-time auditing capabilities by logging when a transfer of funds has been initiated or completed or a withdrawal has been requested, and whether the requests were approved, rejected, or flagged.

A cryptographically secured and consensus-based ledger helps ensure that on-ledger records are immutable and that all system transactions are inherently visible and auditable in real time. The term “transactions,” in this case, refers to actions that represent a change in the ledger status such as in a record or information. For example, an approval or rejection in OARS of a requested use of funds would represent a system transaction. It is essential to remember that OARS is not facilitating fund movement but is creating a permanent and auditable record of system transactions.

Each transaction is assigned a unique ID, or hash, in OARS. OARS acts as a notary to verify the transaction. Each hashed on-ledger transaction contains a list of information pertaining to that transaction, including amount, account, purpose, time stamp, and participants involved. All of this information is available to specific OARS users on a real-time, need-to-know basis.

The proof of concept of OARS is powered by Corda, an open and permissioned distributed application platform developed by R3. Corda is a method of codifying process flows that ensure compliance and accurate records.

OARS provides transparency into funds drawn from a defined pool of returned assets. After the funds have been withdrawn, the amount of accountability and enforceability will vary depending on what information is shared with the system. Transparency is the key feature of this approach as all participants in the network can see when the withdrawals occur. Accountability is relatively low in this context as there is no ability to prevent or delay funds from being withdrawn in order to conduct enhanced due diligence on transactions. However, additional accountability measures could be included in future iterations of OARS.

Key Features of OARS

• Requires mutual consent to complete the creation of a record or transaction, increasing accountability measures. For example, this mutual consent could be from individuals in different government agencies or offices.
• Offers transparency to preapproved observers by incorporating “observer—read only” access that determines when information is visible, what information is visible, and for whom. This feature is designed to be inclusive of cross-sector oversight, including civil society organizations.
• Shares minimal data to verify transactions, allowing for data transparency while maximizing data security.
• Provides mobile accessibility through a web-based platform to facilitate use and minimize broadband issues.
• Uses open-source technology to support accessible replication and scale.
• Integrates with existing systems, including potentially with in-country banking infrastructure, to add more seamless layers of transparency and accountability if desired.

OARS could help recipient and repatriating countries operationalize asset return procedures and record the movement and allocation of returned assets pursuant to agreements. Countries repatriating the assets stolen by corrupt individuals or organizations from other governments may agree with the recipient or origin country to use the recovered assets to benefit the people harmed by acts of corruption and abuse of office or contribute in some other meaningful way to social and economic development within the recipient country.

For example, in 2020, the U.S. repatriated over $311 million to the people of Nigeria under an agreement that allocated the returned funds to support three critical infrastructure projects: the Second Niger Bridge, the Lagos-Ibadan Expressway, and the Abuja-Kano Road. These allocations represent the repurposing of money laundered during and after the military regime of General Sani Abacha. Such allocations help new governments send a strong message of commitment to the public good. There are also recent examples of the U.S. repatriating recovered assets to Malaysia and Peru.

Addressing four areas of consideration—partners, financial infrastructure, technical infrastructure, and costs and timeline—will help partners determine whether OARS is a viable solution for a specific asset repatriation process and the extent of the information that can be recorded for a given asset return.

Partners

• Viable Partners: Partner countries, agencies, or institutions must have an appropriate level of technical capacity, financial infrastructure, and broadband access to accommodate OARS implementation. OARS requires political will by all partners to effectively utilize the system. Participating governments should be committed to transparency and accountability measures and willing to actively engage in the system deployment to help ensure effective use and oversight.
• Partner Roles and Responsibilities: Determine which partner oversees the implementation and management of OARS inclusive of technology considerations, costs and timelines. Assess if that same partner or an alternative serves as administrator of the system. Assess if there is a need for a neutral party to serve as an implementation manager or system manager, this could include a government, multilateral organization, auditor, contracted technical provider, consultant, or civil society organization.
• Terms of Use: The more data points partners agree to record on-ledger, the greater the transaction auditing capacity and transparency.

Financial Infrastructure

• Fund Management: Determine where funds are held—central bank, private bank, subaccount, or other agreed-upon location—will inform what information is possible to access and record on-ledger through OARS.
• Automation: Assess if there is an option to have off-ledger movement (to or from a limited number of predetermined bank accounts) be automatically recorded on-ledger (as opposed to manually input). Assess the feasibility of having the system trigger permissions to release funds off-ledger.
• Local Banking: Assess if there is an option to connect OARS to local banking systems.

Technical Infrastructure

• Connectivity: Limited reliable access to broadband and internet may slow or limit the capabilities of recording transactions in OARS.
• Technical Capacity: Participating countries or other partners will need either in-house expertise or a technical provider to manage front-end services for governments to access the OARS platform, train developers to support and maintain the application, and deploy and support the application in a local jurisdiction.

Costs and Timeline

• Implementation Costs: Unless partners have the technical expertise to customize and manage the solution, a technical provider is needed to implement, deploy, host, and support OARS.
• Associated Costs: Exchange rates, interest rates, and operational fees including hosting and administration should be taken into account.
• Timeline: Once partners are identified to participate in an asset return using OARS, it will take an estimated four to six months to develop the proof of concept version. However, if there is a need to upgrade the features beyond current capabilities, iterations of OARS as described above may require more integration with financial infrastructure and could add to project timelines.