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