After a revolution overthrew Ukraine’s disgraced president, Theresa May promised to help the country’s new leaders recover stolen assets. But the UK’s first case collapsed within a year.

On 11 March 2014, a London branch of the French bank BNP Paribas received a request from a Ukrainian lawyer. He asked the bank to close accounts belonging to his client and transfer their balances to Cyprus.

The accounts contained a mere $23m, and the transaction should have been routine. But although the amount was unremarkable by the standards of the City, the times were not. Ukraine had just overthrown its president, Viktor Yanukovich, and the world was on the lookout for money that Yanukovich and his associates had stashed abroad.

Yanukovich was a man whose corruption had to be seen to be believed. The colossal greed of the president and his cronies beggared the Ukrainian state and infuriated ordinary citizens. Tens of thousands of people protested in central Kiev throughout the winter of 2013-14, until Yanukovich fled Ukraine that February. After the revolution, protesters who broke into his private residence found vintage cars, ostriches, a drinking den shaped like a galleon. There were stacks of treasures in the garage; he had had no space left for them in his $30m, six-storey, log-built palace.

The country’s new government accused its predecessors of stealing $100bn, and the west – perhaps embarrassed that so much of this money had ended up in its banks – promised to do what it could to help return it to Ukraine.

At the end of April 2014, London hosted a summit that would – in the words of then-home secretary Theresa May – “provide practical leadership and assistance to the Ukrainian government as they identify and recover assets looted under the Yanukovich regime … It is the tangible manifestation of our shared determination to end the culture of impunity, and prevent our open societies and open economies from being abused by corrupt individuals to launder and hide stolen funds.”

Dozens of countries sent representatives to the summit, from the United States and the United Kingdom down to the tiniest tax havens: Bermuda, Monaco, the Isle of Man. On the summit’s final afternoon, Britain’s then-attorney general, Dominic Grieve QC, made a dramatic announcement: the UK had already joined the fight. A transfer had been flagged as suspicious, and British authorities had frozen the account and initiated a money-laundering investigation.

“This week the UK’s Serious Fraud Office (SFO) announced that it is investigating allegations of corruption linked to the Yanukovich regime and has obtained a court order to restrain assets valued at approximately $23m,”

Grieve told the assembled delegates. “There will be no effective deterrent for corruption whilst levels of detection of illicit financial flows and recovery of misappropriated assets remain small.”

If the frozen $23m was indeed linked to corruption in Ukraine, it would still be only a fraction of what Yanukovich and his associates had been accused of embezzling. But the case was intended to send a message – about the west’s determination to make sure Ukraine could regain what had been stolen, and that its looters be punished. This pleasingly specific number, $23m, dominated headlines from the summit, where it was held up as concrete proof that the rulers of the west were finally helping the rest of the world fight corruption.

“The message is clear,” May said. “We are making it harder than ever for corrupt regimes or individuals around the world to move, hide and profit from the proceeds of their crime.”

For decades, hundreds of billions of dollars have vanished from the world’s poorest countries, finding their way – via the tax and secrecy havens of Europe, south-east Asia and the Caribbean – into the banking system, real estate and luxury goods markets of the west. According to the World Bank, between $20bn and $40bn is stolen each year by public officials from developing countries. Rich countries returned only $147.2m worth of these assets between 2010 and 2012 – far less than one cent out of every misappropriated dollar. And that may even understate the scale of the problem. Some lawyers involved in asset-recovery cases estimate the volume of money embezzled globally at around $1tn a year, which makes the tiny amount of money recovered look even feebler.

As both a financial centre that launders an estimated £100bn a year and a prime real estate market for the investors of crooked cash, London has a special responsibility in the fight against corruption – one that it has rarely accepted. The 2014 summit – much like David Cameron’s highly publicised global Anti-Corruption Summit in 2016 – was intended to show Britain’s determination to live up to its responsibilities.

Instead, the case of the $23m collapsed within a year – when a British judge ruled that the SFO had built its case on “conjecture and suspicion”, and ordered the money returned to its owner. This is the story of how a very high-profile corruption investigation fell apart – and what it means for Ukraine and the UK.

READ THE WHOLE STORY – http://bit.ly/2o5DdUx