kimberley prost asset recovery - oecd.org...kimberley prost 2 components of asset recovery...

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ASSET RECOVERY UNDER THE UNITED

NATIONS CONVENTION AGAINST CORRUPTION

Kimberley Prost

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COMPONENTS OF ASSET RECOVERY

CRIMINILIZATION/PUBLIC FINANCE PREVENTION OF MONEY LAUNDERINGIDENTIFICATION/TRACKINGFREEZING/SEIZURECONFISCATIONINTERNATIONAL COOPERATIONRETURN

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OFFENCES/PUBLIC FUNDS

LAW SHOULD BE CLEAR AS TO EXPENDITURE/RIGHTS RE PUBLIC FUNDSAPPLICABLE TO HEADS OF STATE, GOVERNMENT, MINISTERS, OFFICIALSAPPLICABLE CRIMINAL OFFENCES

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ARTICLE 31 – DOMESTIC CONFISCATION REGIME

NECESSARY FOR EFFECTIVE ACTION AS REQUESTING/REQUESTED STATECOMPONENTS - IDENTIFICATION, TRACKING,FREEZING/SEIZING, MANAGEMENT, CONFISCATION AND RETURN PROCEEDS/INSTRUMENTALITIES

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IDENTIFICATION/TRACKING

MANDATORY REQUIREMENTS• Measures – general police powers,

search warrants (31(2))• Power in courts/competent

authorities to order bank, financial or commercial instruments be made available/seized (31(7))

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IDENTIFICATION/TRACKING

BEST PRACTICE!• FULL RANGE OF FINANCIAL

INVESTIGATIVE POWERS –MONITORING ORDERS, PRODUCTION ORDERS

• APPLICATION OF ARTICLE 50 POWERS-CONTROLLED DELIVERY, INTERCEPT, UNDERCOVER OPERATIONS

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FREEZING/SEIZING

MANDATORY TO HAVE MEASURES TO FREEZE/SEIZE

GENERALLY BY COURT ORDER

ADMINISTRATIVE ALSO POSSIBLE

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FREEZING/SEIZING

BEST PRACTICE!• EX PARTE APPLICATIONS

• FLEXIBLE TIMING

• REASONABLE GROUNDS TO SUSPECT/BELIEVE

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MANAGEMENT OF ASSETS(31(3))

NEED TO HAVE MEASURES FOR ADMINISTRATION OF FROZEN, SEIZED, CONFISCATED ASSETS

CRITICALLY IMPORTANT ON PRACTICAL LEVEL

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CONFISCATION

PROCEEDS Property derived from or obtained directly or indirectly through commission of convention offences

Includes transformed, converted, intermingled, income or other benefit

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CONFISCATION

INSTRUMENTALITIES

• PROPERTY, EQUIPMENT OR OTHER INSTRUMENTALITIES USED IN OR DESTINED FOR USE IN OFFENCES ESTABLISHED IN ACCORDANCE WITH CONVENTION

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CONFISCATION

BEST PRACTICE!• APPLICABLE TO OFFENCES/SERIOUS

OFFENCES

• COVERS BOTH DOMESTIC OFFENCES AND FOREIGN OFFENCES WITH DUAL CRIMINALITY

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CONFISCATION

PROTECTIONS FOR BONA FIDE THIRD PARTIES (31(9))

MAY USE REVERSE ONUS (31(8))

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NO BANK SECRECY

• Article 40 mandates measures for domestic investigations to overcome obstacles arising from bank secrecy

• May maintain protections for information but subject to access for investigations

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INTERNATIONAL COOPERATION (GENERAL)

Article 44 – Extradition – use of convention as basis, deemed into listsArticle 46 – Mutual assistance –mandates powers in domestic law to render broad range of assistance (best practice is general MLA law) Central Authority (46(13))/ No bank secrecy refusal (46(8))

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CHAPTER V – ASSET RECOVERY

Special focus on powers needed to effect return

Covers prevention, cooperation and recovery mechanisms

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ARTICLE 52 - PREVENTION

Customer identification ID beneficial owners on high value acctEnhanced scrutiny of PEP’s (for/dom)Prevent establishment of banks with no physical presence Consider financial disclosures, sharing of disclosures, report of foreign inv

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DIRECT RECOVERY (Article 53)

• State parties shall be allowed to initiate civil action in another SP court to establish ownership

• Courts shall be allowed to order offenders to pay compensation

• In confiscation decisions, Courts shall recognize another SP claim as legitimate owner

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COOPERATION IN FREEZING AND CONFISCATION

Article 54(1) – Confiscation • Must have measures to give effect to

foreign confiscation order – optional approaches

• Historically using criminal conviction based confiscation regimes

• Problems both domestically and with foreign requests

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• Use money laundering or other such offence for confiscation

• Consider measures to allow for confiscation without criminal conviction in appropriate cases including death, flight

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Non conviction based asset confiscation

Action v. property not person

Standard “civil” – balance of probabilities

Use of civil as opposed to criminal rules

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COOPERATION IN FREEZING/SEIZING

Must have powers to freeze/seize:On the basis of a foreign order for freezing/seizingOn the basis of a foreign request (by implication must extend domestic law to foreign offences)Consider measures based on foreign arrest or charge (blocking orders)

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COOPERATION N FREEZING/SEIZING

Where foreign order, optional approaches implied – direct (order registered and enforced); indirect (domestic order obtained) Action required only where reasonable basis for the requested State Party to believe that there are sufficient grounds and property would be subject to conf.

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ARTICLE 55- COOPERATION IN CONFISCATION

Upon request:• Indirect enforcement – obtain and give

effect to a domestic order

• Direct – Give effect to foreign order (register and enforce)

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COOPERATION IN FREEZING/CONFISCATION

BEST PRACTICE!!

For freezing/seizure and confiscation mechanism for direct enforcement!!!

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ARTICLE 57 - RETURN

In case of • embezzlement of public funds or

laundering of such funds;• prior ownership of confiscated property

(reasonably established by requesting state party )shall return where confiscated on request and final order

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ARTICLE 57- RETURN

In all other cases give priority consideration to return to State party, prior legitimate owners, or compensating victims of crime

Reasonable expenses/ agreements