The last few months have witnessed a barrage of legislation making its way to Parliament, with the rapid rollout of laws severely limiting public opportunities for review and critical analysis. However, one particular draft, the ‘Asset Recovery Proclamation’ has sparked significant controversy and public concern. Initially met with apprehension, anxieties surrounding the proclamation have intensified over time, becoming a dominant topic of public discourse.
Its introduction by the Ministry of Justice has created a rift of distrust between the Ethiopian government and its citizens. Legal professionals and property owners alike have raised concerns about the law, fearing it undermines long-established legal practices. Political analysts further warn of a potential shift towards a more controlling government, with citizens’ lives subject to increased scrutiny. This has led many to raise the alarm over a potential abuse of power, which they argue will inevitably erode public confidence in the government’s intentions.
During the last couple of weeks, Gedeon Timotheos’s(PhD) team, both officials and experts, have been busy attempting to clarify the proclamation’s provisions, arguing that some interpretations are misleading. However, these explanations appear to have fallen short.
Constitutional Contradictions
Fekadu Petros, Assistant Professor of law at Addis Ababa University and general manager of Fekadu Petros and Partners law firm, is among the legal experts who contend the ‘Asset Recovery Proclamation’ represents a potential violation of the FDRE constitution itself.
The minds behind the draft intend for it to apply retroactively, going as far back as 10 years. Fekadu argues the provision contradicts Article 22 (4) of the Ethiopian constitution. This article prohibits the retroactive application of laws, although some argue this principle applies only to criminal law, which the experts at the Justice Ministry insist the proclamation is not.
Fekadu begs to differ. He observes the draft seeks to repeal several existing criminal laws, as outlined in Article 55 of the proclamation itself, putting the legislation squarely in the bracket of criminal law.
Article 55 of the draft proclamation proposes repealing several existing laws, including the Revised Anti-Corruption Special Procedure and Rules of Evidence proclamations, the Prevention and Suppression of Money Laundering and Financing of Terrorism proclamation, and the Prevention and Suppression of Terrorism Crime and Trafficking in Persons proclamations. Furthermore, the same article states that any existing proclamations or customary practice in contradiction with the draft proclamation would be rendered invalid.
Since no law can supersede the constitution, the proclamation would likely require a constitutional amendment to be enforceable.
In other words, for the proclamation to be valid, either the Constitution needs to be changed, or the proclamation itself might be deemed unconstitutional.
To Tamrat Kidanmeariam, an attorney and member of the Addis Ababa University Law faculty, applying newly enacted laws to past actions is “not only illegal, but also inhumane.”
“The rule of law can only function effectively when people are judged according to clear and established laws,” he said,
‘Guilty Until Proven Innocent’
The draft proclamation raises concerns about its compatibility with the principle of “presumption of innocence,” a fundamental concept in legal proceedings. Traditionally, the burden of proof lies with the prosecution to demonstrate guilt. However, this proclamation appears to shift that burden, requiring individuals with assets exceeding 10 million birr to prove ownership to avoid confiscation. This represents a potential challenge to the presumption of innocence.
It introduces something unusual in the practice of the law. According to this draft proclamation, the burden of proof falls heavily on the defendant.
“Traditionally, the prosecutor would have to prove the property wasn’t rightfully obtained. Now, the owner must demonstrate ownership to avoid losing it. This is quite uncommon,” Fekadu stressed.
For Tamrat, the approach is “simply a conceptual anomaly with the concept of corruption.” He believes that it is unfair to treat officials with unexplained wealth the same as someone who legitimately acquired assets working abroad. He goes further, saying even if someone acquired foreign currency through unofficial channels (parallel market), they should be charged with “transaction in foreign exchange” rather than the broader “unexplained wealth.” He emphasizes the need for concrete evidence, stating any accusation requires proof beyond a reasonable doubt.
Who Does This New Law Apply To?
When the draft proclamation was initially published, many perceived it as primarily targeting the Ethiopian Diaspora community and those who benefit from remittances sent from abroad. However, concerns have since grown to encompass a wider range of citizens. It is now understood that the proclamation’s reach extends beyond.
Given the broad scope of its reach, anyone possessing assets exceeding 10 million birr could potentially be targeted based on suspicion. The burden of proof appears to fall not on the accuser to present evidence, but on the asset owner to demonstrate legitimate ownership. This lack of clear legal safeguards has arguably generated more public debate than any other recent proclamation.
Belayihun Yirga, a state minister of Justice, says the proclamation was never intended for widespread property confiscation. Instead, he argues, the proclamation targets individuals who have amassed unexplained wealth rapidly. Belayihun even indicated some of these individuals ‘have become powerful enough to potentially challenge the government.’ Yet, one can easily point out there are no provisions preventing authorities from using the proclamation for politically motivated investigations against ordinary citizens.
The lack of a standardized and reliable process for asset valuation remains another concern. Tamrat highlights that even assets valued below the 10 million threshold could easily be inflated by prosecutors. In essence, he argues, the determination of innocence or guilt rests entirely with the prosecution, creating a concerning imbalance.
In essence, the broad scope of the proclamation, combined with the absence of clear safeguards, could potentially make almost anyone vulnerable.
“Under this proclamation, almost no one can be confident of avoiding being targeted,” Tamrat emphasizes.
According to the State Minister, the 10 million birr threshold should be understood in relation to its value ten years ago, implying potential adjustments for inflation. However, the proclamation itself lacks any explicit mention of this interpretation.
The White Elephant in the Room: Exchange Rates
Remittances from Ethiopian migrants abroad constitute a significant source of income for the country’s economy. Annually, this inflow reaches up to USD 5 billion, translating to roughly 5 percent of Ethiopia’s GDP and a critical 25 percent of its foreign exchange earnings. A 2020 report by the United Nations Capital Development Fund (UNCDF) estimates there are nearly one million Ethiopian migrants globally, with the largest concentrations residing in the United States (26 percent), Saudi Arabia (17 percent), and Israel (8 percent).
A significant challenge to tracking remittance flows in Ethiopia is the vast difference between the official exchange rates offered at banks and the parallel market. As it stands, the parallel market offers a much higher exchange rate, reaching up to 120 birr per USD, compared to the bank rate of 57 birr. This significant incentive naturally pushes people towards informal channels, reducing transparency in remittance data. This harsh reality surrounding remittances is a key reason why the recent controversial proclamation has caused shockwaves within the Ethiopian Diaspora community.
Similarly, the government faces a critical shortage of foreign exchange. The nation’s forex reserves are reportedly at their lowest point in recent history, sufficient to cover less than three weeks’ worth of imports.
Walking the Socialist Path?
The Prosperity Party, from the beginning, has claimed to distance itself from strict ideological adherence, promoting “Medemer” (Amharic for “synergy”) as its guiding principle, allowing them to adopt policies deemed beneficial. However, some critics see echoes of socialist policies in many of the incumbent’s recent moves.
In socialist Ethiopia, Proclamation 47/67 issued in 1975 following the coming into power of the Dergue mandated that any “extra houses” within towns or municipalities be surrendered to the government with the responsibility to notify the government to claim the property strangely falling on the owners themselves. The Marxist government had also enacted rent controls in urban areas.
A senior urbanization expert who spoke to The Reporter Magazine anonymously compares the introduction of the ‘Asset Recovery’ and the ‘Residential Rent and Administration’ proclamations to the “chaotic socialist proclamations” of the past. He expressed concerns that the Prosperity Party’s pragmatism might lean towards socialist-style interventions in the economy.
“While the goal was fair wealth distribution by taking from those who amassed riches unfairly, [the chaotic socialist proclamations of the past] ended up taking even small amounts from the poor. Even though it targeted ‘extra houses’ from the wealthy, it resulted in confiscating homes from ordinary people, including elderly women who had saved to build small houses for their retirement,” he noted. The expert fears that this new proclamation has the potential to lead to similar negative outcomes.
Ethiopia recently ratified a new proclamation affecting rental housing in cities i.e the Residential Property Control and Administration Proclamation (No. 1320/2024), which significantly expands government control over rental housing in cities. This proclamation grants the government the power to not only regulate rent increases but also set the actual rent prices themselves, mirroring the policy used during Ethiopia’s socialist era. While this may initially favor renters, it raises concerns about the government’s growing influence over people’s economic freedom.
Tamrat cautions that the ‘Asset Recovery’ proclamation’s potential consequences could be even more severe than those experienced under socialist policies.
“Individuals targeted under this system could face immediate homelessness,” he said.
Intended Purpose
Political economists, legal experts, and urbanization professionals The Reporter Magazine spoke with mostly agree with one thing; the draft proclamation appears to lack thorough consideration of potential consequences.
Fekadu questions the true purpose of this particular proclamation.
“Is it meant to educate?” he asks. “No, because it applies retroactively for ten years. Is it for revenge? Perhaps, but it doesn’t effectively distinguish the guilty from the innocent. Just because someone can’t produce evidence doesn’t necessarily mean they acquired wealth unjustly. The purpose remains unclear.”
“This is a political maneuver, not a matter of law and justice,” argues a political economist who spoke with The Reporter Magazine anonymously.
Stressing the dangers of potential misuse, the expert warns that these legal loopholes could be exploited for personal gain or revenge.
“Anyone in a position of power could abuse this to settle scores or line their pockets,” he cautioned.
The draft proclamation grants investigators broad powers to bypass privacy laws without a court order. This includes accessing financial records, digital data (emails, server information), communication records (phone, fax, postal mail), and online activity (internet and messaging platforms).
The political economist warns that these policies often overlook the devastating economic impact. They discourage investment and incentivize immediate consumption.
“Certainty is vital for investment,” he stressed. “How can anyone invest with trust when a new law could appear overnight and seize their assets? It’s dangerous. It simply stifles citizens’ entrepreneurial spirit and their ability to create wealth.”
He further voiced fear of a substantial outflow of capital abroad.
“Even now, there are early signs of this happening,” said the expert.
He observes a temporary lull since the media began discussing the draft. He anticipates a decrease in black market currency exchange activity, but warns it will be short-lived.
“People will soon find loopholes within this new system,” he predicts. “It won’t take long.”
From a legal standpoint, the attorney highlights a critical issue: these policies potentially violate core constitutional principles. This, Fekadu argues, acts as a red flag for citizens, eroding their confidence in the law’s stability.
“It risks further fracturing the already fragile bridge of trust between the public and the government,” Fekadu noted.
The approach, according to the political economist, creates a chilling atmosphere. It implies constant government surveillance, breeding fear among the public.
Calls have grown for the government to provide further clarification and ensure transparency regarding the draft ‘Asset Recovery Proclamation’. Many stress the need for public engagement if the proclamation is to genuinely fulfill its stated purpose of recovering stolen assets.
