No matter how high the degree of political will is, the process of recovering stolen assets is immensely intricate, time consuming and resource intensive. The term asset recovery therefore encompasses the series of actions undertaken in order to trace, seize and confiscate and return stolen assets.
This process is complicated at every phase of the asset recovery process, not only because the perpetrators of the criminal offences are attempting to hide the true nature, origin and ownership of the stolen assets, through money laundering techniques, but also because it requires active communication and close coordination between both the relevant authorities in the jurisdiction where the criminal offences have been committed, and between these and their foreign counterparts, where evidence or assets may be found.
Following the money across the globe
This is because skilled money launderers adopt numerous strategies to conceal the origins of assets, and to transform them into numerous forms including hard currency, electronic funds, tangible and intangible property, corporate structures and shareholdings, to name just a few.
They will transfer and spread these assets across multiple jurisdictions under the name of multiple owners to further disguise the true nature of these assets and make it increasingly difficult for state law enforcement agencies to track, trace and legally seize them. This multi-jurisdictional element of money laundering can particularly frustrate asset recovery efforts as it gives rise to several cross-border related hurdles which range from potentially conflicting legislative and procedural differences to language inconsistencies, among others.
This is the principal reason why jurisdictions need to begin active communication with one another early on, beginning at the pre-investigative phase of the asset recovery process (as indicated above). Consequently, if different states have trouble working together efficiently it will be extremely difficult to effectively untangle a money launderer’s web of deceit.
Moreover, even when states do work together effectively, cross-border co-ordination between States can be extremely time consuming, which can give criminals additional opportunities to stay one step ahead of law enforcement agencies.
Asset recovery without a criminal conviction
Another factor which often hampers asset recovery efforts relates to when the person who committed the corrupt acts is deceased or has fled from justice. As a response, many jurisdictions now have the so-called non-conviction-based (NCB) forfeiture. These proceedings are initiated against the proceeds of crime themselves, and not against the person under investigation. The immediate consequence of initiating NCB forfeiture proceedings is that the level of proof is lower when compared to a criminal prosecution, and that there is no need to convict the criminal.
Active communication and co-ordination are essential
In light of these barriers, active communication and co-ordination internally and internationally is the crux of the asset recovery process. No formal action that will directly or indirectly impact intelligence gathering, investigation, prosecution or adjudication of an asset recovery case should be taken by any of the agencies involved alone, without prior consultation and discussion of the risks and mitigating factors with their national and international counterparts. This holds particularly true when countries need to issue or process a request for mutual legal assistance.
Why asset recovery is vital despite the challenges
The return of confiscated assets is of practical importance. In particular, it is widely recognised that the recovery of stolen assets could provide essential resources for the financing of public services and investments in infrastructure and other programmes aimed at enhancing social and economic development.
In addition, the recovery of stolen assets is seen as a deterrent to corruption as it fundamentally undermines the key incentive for corruption – the assets which are stolen.
It is for these reasons that it is imperative that all concerned actors – States, international organisations, the private sector and in particular financial institutions, and CSOs – understand their respective roles, duties and responsibilities in relation to the recovery of stolen assets, and seek to collaborate and mutually support each other as best possible.