The Asset Recovery The Asset Recovery ImperativeImperative

Daniel H. ClamanDaniel H. ClamanSenior Trial AttorneySenior Trial Attorney

U.S. Department of JusticeU.S. Department of Justice

USD 1.5 to 5 billion

USD 23 million to 1 billion

USD 250 million or more

USD 106 to 700 million

USD 4 to 8 billion

USD 3 to 14 billion

USD 4.5 to 45 billion

USD 1 to 2.8 billion

USD 100 million

CHALLENGES

Difficulty Proving Underlying CrimeDifficulty Proving Underlying Crime Difficulty Proving Financial Difficulty Proving Financial

RelationshipsRelationships Resource IntensiveResource Intensive Strong presumptions in favor of Strong presumptions in favor of

property rightsproperty rights Differences in Legal SystemsDifferences in Legal Systems

OPPORTUNITY NOW International Commitment to Asset International Commitment to Asset

RecoveryRecovery– Denial of Safe Haven commitmentsDenial of Safe Haven commitments– G-8 Justice and Home Affairs Declaration G-8 Justice and Home Affairs Declaration

on Asset Recoveryon Asset Recovery Legal toolsLegal tools– Inter-American ConventionInter-American Convention– OECD ConventionOECD Convention– U.N. Convention Against CorruptionU.N. Convention Against Corruption

Recent SuccessesRecent Successes

DECLARATION OFNUEVO LEON

““In the framework of applicable national In the framework of applicable national and international law, and international law, we commit to deny we commit to deny safe haven to corrupt officials, to those safe haven to corrupt officials, to those who corrupt them, and their assets; and who corrupt them, and their assets; and to cooperate in their extradition as well as to cooperate in their extradition as well as in the recovery and return of the in the recovery and return of the proceeds of corruption to their legitimate proceeds of corruption to their legitimate owners.owners. We also commit to enhance We also commit to enhance regional mechanisms for mutual legal regional mechanisms for mutual legal assistance in criminal matters and their assistance in criminal matters and their implementation.”implementation.”

DENIAL OF SAFE HAVEN

Political CommitmentsPolitical Commitments–Visa DenialVisa Denial–ExtraditionExtradition–Asset RecoveryAsset Recovery

Broadly EndorsedBroadly Endorsed– Summit of the AmericasSummit of the Americas–G-8G-8–APECAPEC

G-8 JUSTICE MINISTERIAL INITIATIVE

2004 Justice and Home Affairs Ministers 2004 Justice and Home Affairs Ministers Declaration on Recovering the Proceeds Declaration on Recovering the Proceeds of Corruptionof Corruption– Practical steps to facilitate cooperationPractical steps to facilitate cooperation

– Ensure G-8 states have legal tools to be able Ensure G-8 states have legal tools to be able to provide assistanceto provide assistance

G-8 JUSTICE MINISTERIAL INITIATIVE

Facilitate Requests for AssistanceFacilitate Requests for Assistance Multilateral Case CoordinationMultilateral Case Coordination Seminars to share experiences, practicesSeminars to share experiences, practices Enhanced Due Diligence and Wire Enhanced Due Diligence and Wire

Originator InformationOriginator Information Examine Recovery without Conviction Examine Recovery without Conviction

(death, immunity, fugitivity)(death, immunity, fugitivity) Facilitate RepatriationFacilitate Repatriation

MULTILATERAL ANTI-CORRUPTION TREATIES

Inter-American Convention Against CorruptionInter-American Convention Against Corruption– Entered into force: 6 March 1997; Parties: 33Entered into force: 6 March 1997; Parties: 33

OECD Convention on Combating Bribery of OECD Convention on Combating Bribery of Foreign Public Officials in International Foreign Public Officials in International Business TransactionsBusiness Transactions– Entered into force: 17 December 1997; Parties: 36Entered into force: 17 December 1997; Parties: 36

United Nations Convention Against CorruptionUnited Nations Convention Against Corruption– Entered into force: 14 December 2005; Parties: 51Entered into force: 14 December 2005; Parties: 51

United Nations Convention Against United Nations Convention Against Transnational Organized CrimeTransnational Organized Crime– Entered into force: 29 September 2003; Parties: 119Entered into force: 29 September 2003; Parties: 119

MULTILATERAL TREATIES

Set Binding Standards for Set Binding Standards for National LawNational Law

Legal Framework for Mutual Legal Framework for Mutual Legal AssistanceLegal Assistance

Follow-up, Monitoring Follow-up, Monitoring MechanismsMechanisms

INTER-AMERICAN CONVENTION AGAINST CORRUPTION

Wide range of corruption offensesWide range of corruption offenses Illicit Enrichment offense (Article IX)Illicit Enrichment offense (Article IX)– Subject to Constitution, fundamental principlesSubject to Constitution, fundamental principles

Assistance regarding property (Article XV)Assistance regarding property (Article XV)– Broadest possible measure of assistance in Broadest possible measure of assistance in

identification, tracing, freezing, seizure and identification, tracing, freezing, seizure and forfeitureforfeiture

– Property derived from or used in covered Property derived from or used in covered offensesoffenses

– Authorizes transfers to assisting countriesAuthorizes transfers to assisting countries

OECD CONVENTION AGAINST BRIBERY

Attack the Supply Side of Attack the Supply Side of CorruptionCorruption

Criminalize Payment of Bribes to Criminalize Payment of Bribes to Foreign OfficialsForeign Officials

Nationality JurisdictionNationality Jurisdiction Peer ReviewPeer Review

United Nations Convention Against Corruption

Negotiated January 2002 Negotiated January 2002 to October 2003to October 2003

Opened for signature Opened for signature December 9, 2003 in December 9, 2003 in Merida, MexicoMerida, Mexico

Entered into force Entered into force December 14, 2005December 14, 2005

51 Parties, 140 Signatories51 Parties, 140 Signatories U.S. is a signatory but not U.S. is a signatory but not

yet a Partyyet a Party

STRUCTURE Chapter I: General ProvisionsChapter I: General Provisions Chapter II: Preventive MeasuresChapter II: Preventive Measures Chapter III: Criminalization and Law Chapter III: Criminalization and Law

EnforcementEnforcement Chapter IV: International CooperationChapter IV: International Cooperation Chapter V: Asset RecoveryChapter V: Asset Recovery Chapter VI: Technical Assistance and Chapter VI: Technical Assistance and

Information ExchangeInformation Exchange Chapter VII: Mechanisms for ImplementationChapter VII: Mechanisms for Implementation Chapter VIII: Final ProvisionsChapter VIII: Final Provisions

HIGHLIGHTS FOR ASSET RECOVERY

Detection/Identification – Articles 14, 52, 58Detection/Identification – Articles 14, 52, 58 Money laundering, confiscation – Articles 23, 31Money laundering, confiscation – Articles 23, 31 Required ability to provide assistance in Required ability to provide assistance in

forfeiture – Articles 53, 54forfeiture – Articles 53, 54 Forfeiture assistance – Article 55Forfeiture assistance – Article 55 Disposition of forfeited property – Article 57Disposition of forfeited property – Article 57 Dual criminality – Article 46 (9)Dual criminality – Article 46 (9)

MONEY LAUNDERING PREVENTION – ARTICLE 14

Based upon Palermo Transnational Based upon Palermo Transnational Organized Crime ConventionOrganized Crime Convention

–Must require customer identificationMust require customer identification–Must have suspicious activity reportingMust have suspicious activity reporting

– Should have a financial intelligence unitShould have a financial intelligence unit Should require inclusion of wire originator Should require inclusion of wire originator

informationinformation

MONEY LAUNDERING PREVENTION – ARTICLE 14

Should require complete wire originator Should require complete wire originator informationinformation– Accurate, meaningful information on Accurate, meaningful information on

originatororiginator

–Maintain information throughout Maintain information throughout payment chainpayment chain

– Enhanced scrutiny to transfers that do not Enhanced scrutiny to transfers that do not include complete originator informationinclude complete originator information

DETECTION OF GRAND CORRUPTION – ARTICLE 52

MUST require financial institutions to identify MUST require financial institutions to identify beneficial owner of high-value accounts beneficial owner of high-value accounts

MUST require financial institutions to conduct MUST require financial institutions to conduct enhanced scrutiny of accounts of politically enhanced scrutiny of accounts of politically exposed personsexposed persons– Senior foreign politicians, family, associatesSenior foreign politicians, family, associates

MUST issue advisories concerning types of MUST issue advisories concerning types of accounts/persons accounts/persons

Disseminate identification of officials on requestDisseminate identification of officials on request

DETECTION OF GRAND CORRUPTION – ARTICLE 52

No business with shell banks (no physical No business with shell banks (no physical presence)presence)

Should require financial disclosure and Should require financial disclosure and permit to share with foreign authoritiespermit to share with foreign authorities

Should require disclosure of existence of Should require disclosure of existence of foreign accountsforeign accounts

OLD FORFEITURE LEGAL ASSISTANCE REGIME

1988 Vienna Convention on Narcotics1988 Vienna Convention on Narcotics 2000 Palermo Convention on 2000 Palermo Convention on

Transnational Organized CrimeTransnational Organized Crime Requested country eitherRequested country either– open own case open own case OROR

– enforce a foreign confiscation judgmentenforce a foreign confiscation judgment

NEW FORFEITURE LEGAL ASSISTANCE REGIME

Direct recovery Direct recovery without forfeiture without forfeiture (Art. 53)(Art. 53)

MUST have basis to provide MUST have basis to provide assistance (Art. 54)assistance (Art. 54)

Procedures for international Procedures for international cooperation (Art. 55)cooperation (Art. 55)

RETURN AND DISPOSAL ARTICLE 57

Major Focus of NegotiationsMajor Focus of Negotiations REMEMBER: DIRECT REMEMBER: DIRECT

FORFEITURE ALSO AVAILABLE FORFEITURE ALSO AVAILABLE (ARTICLE 53)(ARTICLE 53)

MUST FIRST FIND, RESTRAIN, MUST FIRST FIND, RESTRAIN, PRESERVE VALUE, CONFISCATEPRESERVE VALUE, CONFISCATE

DEVELOPING PRACTICE

AbachaAbacha– Switzerland $500 million repatriatedSwitzerland $500 million repatriated

– Jersey $160 million repatriatedJersey $160 million repatriated Fujimori/MontesinosFujimori/Montesinos– Switzerland $77 million repatriatedSwitzerland $77 million repatriated

– United States $20.2 million repatriatedUnited States $20.2 million repatriated Aleman/JerezAleman/Jerez– United States $2.7 million repatriatedUnited States $2.7 million repatriated

CONFERENCE

Corruption InvestigationsCorruption Investigations Asset Tracking and Financial Asset Tracking and Financial

InvestigationsInvestigations Mutual Legal AssistanceMutual Legal Assistance Transparency and Looking ForwardTransparency and Looking Forward

USD 1.5 to 5

billion

USD 23 million to 1 billion

USD 250 million or more

USD 106 to 700 million

USD 4 to 8 billion

USD 3 to 14 billion

USD 4.5 to 45 billion

USD 1 to 2.8 billion

USD 100 million

?

SHARED COMMITMENTSSHARED RESPONSIBILITY

Daniel H. ClamanSenior Trial Attorney

Asset Forfeiture and Money Laundering Section

U.S. Department of JusticeCriminal Division (AFMLS)Washington, D.C. 20530

Tel. (202) 514-6340Fax (202) 514-5522

Daniel.Claman@usdoj.gov