Asset Declaration

Asset Declaration refers to the formal disclosure of all assets, financial holdings, and interests, often of the public officials. The sole purpose of this declaration is to enable proper knowledge of the illicit wealth held and prevent conflicts of interest between officials.

The modern versions of asset declaration forms for employees working in the public sector started after the Second World War. Later, former President Truman of the United States urged the need to impose public disclosure of personal finances in 1951. Since then, almost 150 countries have made it mandatory for public officials to declare asset-related information.

Asset declaration makes public officials disclose their personal financial information regarding assets held and make the figures public for further reference and consideration. These public officials are elected by a country's local, state, or central government. They include senior ministers, deputy ministers, legislators, judges at all court levels, senior prosecutors, civil servants (exercising budgetary discretion or authority), and senior judiciary officials. It also includes those actors and their close family members involved in the nation’s decision-making process. So, if they own any financial holdings, this declaration makes it transparent to the public. It also helps detect unidentified (or unjustified) assets that can indicate anti-money laundering or illegal activities. 

Among the financial holdings, the major assets under declaration include the following:

• Vehicles,
• Jewelry and fine art
• Financial assets such as bank accounts (both domestic and foreign) 
• Stocks and bonds
• All other sources of wealth (such as educational scholarships for one’s children or expenditures like paying tuition for their education abroad).

Since the 1970s, every country has implemented the asset declaration system for integrity purposes. However, in 2003, it gained international attention (or status) in the United Nations Convention Against Corruption (UNCAC). This act boosted international cooperation and created a genuine reason for identifying, recovering, and reporting assets to the concerned government. Moreover, it is also necessary to apply this regime to both national and sub-national level officials. As a result, an asset declaration online (or e-form) system is made available for federal employees.  

Every country requires its officials to follow a standardized procedure to fill out the form and maintain the asset declaration system online. Let us look at each step in brief below:

• Check disclosure forms: The first step is to determine the type of asset declaration forms to fill in, depending on the tenure of employment. Some common ones include the candidate’s declaration, application upon entering public office, regular while in office, before or upon terminating the office, post-employment, corrected form, and ad hoc. For instance, signs of unjustified wealth or unverified assets require submitting an ad hoc form.  
• Fill in the details: Upon deciding on the disclosure form, officials must fill in the personal details and financial position. Also, sections detailing current positions may include options like temporary staff, permanent, tenured, contract-based employment, or any other type. Likewise, information on family members and assets must be disclosed similarly. 

Here, applicants can list details of the assets, like land, buildings, apartments, real estate, unfinished construction, vehicles, boats, aircraft, machinery, securities, stocks, investments in commercial entities, and beneficial ownership or interest in entities. It also includes intangible assets, accounts in banks and financial institutions, safe deposit boxes, virtual assets, cash, and precious metals. Any money owed to the declarant (or family member), gifts, or insurance contracts must also be reported to the government.  

• Submission: After filling in the required details, the next step is to submit the asset declaration online or offline per details on the government site. 
• Validation and verification: Once submitted, verifying and validating the financial information regarding assets begins. Any misappropriation or signs of unjustified wealth are taken into account for further investigation. 
• Publication of information: Later, this data is published on the official channels concerning the country’s jurisdiction. At this point, any illicit funds may result in penalties on public officials who do not follow the declaration requirements. 

Let us look at a few examples that explain the use of asset declaration forms by public officials:

Example #1 

Suppose Kevin is a federal employee working in the Department of Energy. As per the rules, he has to disclose the assets, liabilities, and interests held to date. He shared the following financial records as of November 2024. 

Income - ($176,000)

Salary: $174,000 (US Senator Salary)

Dividends: $5,000 (Investment in mutual funds)

Interest: $1,000 (Savings account)

Assets - $1,870,000

Real estate: $1,500,000

Mutual Funds: $200,000

Stocks (Publicly traded companies): $100,000

Bonds: $50,000

Bank balance: $20,000

Apart from the above details, Kevin did not own any liabilities. Hence, his declaration form consisted of assets worth $1,870,000. 

Example #2

According to news published in December 2024, the Prime Minister of Malta, Robert Abela, is yet to provide disclosures on the annual asset declaration of cabinet fellows. Per the rules, the declaration must happen by March every year, to be later published in the Parliament. Moreover, on interrogating this nine-month due, the spokesperson of PM, Edward Montebello, did not provide any clarification on the same.

Declaration of assets serves as proof of financial assets held by public officials. It also avoids conflict of interest and detects any unjustified asset prevalent in the due course. More specifically, this process helps build integrity and transparency of public service in the country. As a result, most nations deploy this regulation to create a wealth balance in an economy with extreme transparency and accountability and make public officials and employees work in the public interest. Any person who is found guilty of having illicit funds, assets, or wealth is identified as a politically exposed person (PEP).