Securing the Assets in Stolen asset recovery Initive.
Posted on September 25th, 2022

A Guide for Practitioners Courtesy Worldbank Group

5.1 Introductory Remarks
Efforts toward asset confiscation are of little value if, at the end of the day, no asset is available for confiscation. Stolen assets may be hidden or moved out of reach in a short period, while investigation and confiscation proceedings may take years, often giving the target ample time to move or dissipate assets. Therefore, it is critical that measures be taken to secure the assets that may become subject to a confiscation judgment. These measures, referred to as provisional measures,” include the seizure and restraint of assets and should be taken as close to the beginning of the case as possible to secure the
assets, where feasible, and until the conclusion of the confiscation proceedings.1
Under the United Nations Convention against Corruption (UNCAC), article 54 (2),states parties are required to take the necessary measures to permit the freezing or seizing of assets based upon either a court’s (or other competent authority’s) order or arequest that provides a reasonable basis for the requested state party to believe thatthere are sufficient grounds for taking such actions and that the property wouldeventually be subject to an order of confiscation.” States are also required to consider
measures to preserve property for confiscation based on a lower threshold, such as onthe basis of a foreign arrest or criminal charge related to the acquisition of such property.In most jurisdictions, the laws governing provisional measures involve the balancing of two opposing principles: On one hand, the public interest requires that suspected proceeds and instrumentalities of crime be preserved and maintained until the end of the confiscation case (as discussed in box 5.3, on Switzerland’s constitutional power to freeze assets to protect its national interests).2 On the other hand, individuals’ right to
enjoy the own

5.2 Terminology: Seizure and Restraint
In both common and civil law jurisdictions, two distinct mechanisms have been developed to control and preserve assets that may be subject to confiscation: seizure and restraint.

Seizure means taking physical possession of the targeted asset. Although a prior court order or authorization from prosecutors or investigative judges might generally be required, some jurisdictions grant law enforcement officers the right to seize assets. For example, bulk cash or other assets reasonably suspected or believed” to be the proceeds or instrumentalities of a crime may be seized, in exigent circumstances, without a prior court order. Such powers are particularly useful for seizing suspicious cash that is transported across international boundaries in contravention of cash import or export reporting laws.
A restraint order is a form of mandatory injunction issued by a judge or a court that restrains any person from dealing with or disposing of the assets mentioned in the order, pending the determination of confiscation proceedings. Unlike seizure orders,restraint orders do not result in the physical possession of the asset. Judicial authorization is usually required, although some jurisdictions permit restraint to be ordered by prosecutors or other authorities.

The terminology for seizure and restraint of assets may vary among jurisdictions. For example, one jurisdiction may seize” bank accounts, whereas another may restrain” them. Other jurisdictions have introduced other terms, such as freezing” or blocking.”Practitioners should be aware of the distinction between the terms when sending or receiving an order involving another jurisdiction and should ensure that requests use terminology that can be understood. Hence, it may be a good idea to describe the purpose of the order instead of simply using the name of the order to be requested, because the terminology may confuse the recipient authorities. (For additional information on drafting requests for mutual legal assistance [MLA], see chapter 9, section 9.2.)

5.3 Provisional Order Requirements
In most jurisdictions, provisional measures typically require a judicial authorization by a judge or investigating magistrate. Many jurisdictions also allow for emergency or short-term provisional measures to be implemented administratively, through either the financial intelligence unit (FIU), law enforcement agency, or other authority under law. (For a discussion of emergency provisional measures, see chapter 8, section 8.5.4 and chapter 9, section 9.2.6.) Jurisdictions may also have varying evidentiary and procedural requirements for obtaining provisional orders.

5.3.1 Evidentiary Requirements
The requirements for obtaining a seizure or restraint order usually involve the following (for seizure orders, see also chapter 3, section 3.4.8):
• Either (a) a target is suspected of having committed an offense from which a benefit has been derived (value-based confiscation), or (b) the assets being sought are linked to criminal activities (property-based confiscation). (See chapter 7 for adiscussion of property-based and value-based confiscation.)
• Proceedings have been instituted or are about to be instituted.
In some jurisdictions, criminal proceedings will allow the seizure of substitute assets that can be
seized or frozen if the proceeds of the crime were previously spent. In nonconviction based (NCB) confiscation proceedings, however, there is often a requirement that the assets be directly traced back to the crime.
In common law jurisdictions, these requirements are generally established on a reasonable grounds to believe” or probable cause” standard of proof.
Similarly, in civil law jurisdictions, the decision will rest with the prosecutor’s or judge’s belief in
that the freezing order is necessary to avoid diversion or loss of assets during the investigation. Additional requirements may include grounds to believe that there is a risk of dissipation or that the assets are subject to confiscation and an undertaking as to damages.

In the United Kingdom, an interim freezing order (IFO) may be made if the court has issued an unexplained wealth order (UWO) regarding the property in question (as further discussed in chapter 3, box 3.11). The freezing of the property identified in a UWO prevents the property from being dissipated while it is subject to the order (Home Office 2017, 16). Box 5.1 describes the efforts to freeze assets
belonging to a former Nigerian minister, Diezani Alison-Madueke.

For a freezing order to be enforceable against the assets belonging to politically exposed persons (PEPs) in foreign countries, legislation in Switzerland (box 5.3) and Canada requires the fulfillment of a number of conditions, including the following:
• Loss of power by the foreign government
• Notoriously high corruption levels in the country
• Assets likely to have been acquired by corruption, criminal mismanagement, or
other felonies
• Collapse of the judicial system
• Country’s inability to satisfy MLA requirements
• Safeguarding of national interests (in the case of Switzerland)9
• Internal turmoil and uncertain political situation in the foreign state, as well as
international relations interests (in the case of Canada).10

5.3.2 Procedural Requirements
Applicable rules of procedure for a seizure or restraint order may be outlined in confiscation laws or may incorporate criminal or civil procedural laws by reference. Common law jurisdictions, for example, require the application to be in writing, while the application or motion usually consists of two documents: (a) the seizure warrant or restraint order, and (b) the supporting affidavit. Box 5.2 describes affidavits and the
important evidence to include.
In contrast, civil law jurisdictions may simply require a recitation of the facts demonstrated by relevant documents or evidence contained in the case file before the judicial authority. In certain civil law jurisdictions, however, prosecutors or investigative judges may seize or restrain assets based only on a demonstrated need to preserve evidence or avoid dissipation of assets subject to confiscation.

Provisional measures can be contested or appealed by targets and their families or associates,11 particularly when substantial property interests are subject to restraint orseizure. The result is that the application process for provisional measures may be converted into a mini trial in which allegations supporting the application are challenged.
In some countries that are often key to asset recovery procedures, given the size of their financial systems (including the United States), practitioners must keep in mind that the process can hit procedural obstacles. Mindful that provisional measures simply require a reasonable belief of certain facts, prosecutors should urge the court to avoid deliberating upon the ultimate merits of the case, which will be determined at trial. This determination is most appropriately left to the court dealing with the related prosecution and confiscation.
Many jurisdictions permit the prosecutor to make applications for provisional measures ex parte, or without notice to the asset holders, on the notion that notice would tip them off and create an opportunity to move or hide assets. In some jurisdictions, prosecutors or investigative magistrates have an absolute right to proceed ex parte if they choose; others may permit such applications only if certain conditions are satisfied, such as showing a risk of dissipation.
If there is any risk that notice of an application for a restraint order will result in the dissipation of the assets or if the assets subject to the restraint are inherently moveable (such as funds in a bank account, jewelry, cash, or vehicles), good practice dictates that the application proceed on an ex parte basis.
An ex parte order may be effective for a limited time, during which the applicant must either (a) provide notice to the asset holder and an opportunity for a hearing, or (b) apply to the court for an extension of time in which to do so. Some jurisdictions require that the asset holder be provided with details of the proceedings, such as a transcript.

5.3.3 Provisional Restraint or Seizure of Assets in Foreign Jurisdictions
There are various avenues to achieve seizure or restraint of assets located in foreign jurisdictions. On receipt of a jurisdiction’s request, the authorities in the foreign jurisdiction may enforce the restraint or seizure order that is in place in the requesting jurisdiction. Alternatively, the authorities in the requested jurisdiction may apply for a domestic restraint or seizure order based upon the facts provided by the

For full report read

Leave a Reply

You must be logged in to post a comment.



Copyright © 2022 All Rights Reserved. Powered by Wordpress