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The Asset Recovery Imperative Daniel H. Claman Senior Trial Attorney U.S. Department of Justice.

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Presentation on theme: "The Asset Recovery Imperative Daniel H. Claman Senior Trial Attorney U.S. Department of Justice."— Presentation transcript:

1 The Asset Recovery Imperative Daniel H. Claman Senior Trial Attorney U.S. Department of Justice

2 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

3 CHALLENGES  Difficulty Proving Underlying Crime  Difficulty Proving Financial Relationships  Resource Intensive  Strong presumptions in favor of property rights  Differences in Legal Systems

4 OPPORTUNITY NOW  International Commitment to Asset Recovery –Denial of Safe Haven commitments –G-8 Justice and Home Affairs Declaration on Asset Recovery  Legal tools –Inter-American Convention –OECD Convention –U.N. Convention Against Corruption  Recent Successes

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

6 DENIAL OF SAFE HAVEN  Political Commitments –Visa Denial –Extradition –Asset Recovery  Broadly Endorsed –Summit of the Americas –G-8 –APEC

7 G-8 JUSTICE MINISTERIAL INITIATIVE  2004 Justice and Home Affairs Ministers Declaration on Recovering the Proceeds of Corruption –Practical steps to facilitate cooperation –Ensure G-8 states have legal tools to be able to provide assistance

8 G-8 JUSTICE MINISTERIAL INITIATIVE  Facilitate Requests for Assistance  Multilateral Case Coordination  Seminars to share experiences, practices  Enhanced Due Diligence and Wire Originator Information  Examine Recovery without Conviction (death, immunity, fugitivity)  Facilitate Repatriation

9 MULTILATERAL ANTI-CORRUPTION TREATIES  Inter-American Convention Against Corruption –Entered into force: 6 March 1997; Parties: 33  OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions –Entered into force: 17 December 1997; Parties: 36  United Nations Convention Against Corruption –Entered into force: 14 December 2005; Parties: 51  United Nations Convention Against Transnational Organized Crime –Entered into force: 29 September 2003; Parties: 119

10 MULTILATERAL TREATIES  Set Binding Standards for National Law  Legal Framework for Mutual Legal Assistance  Follow-up, Monitoring Mechanisms

11 INTER-AMERICAN CONVENTION AGAINST CORRUPTION  Wide range of corruption offenses  Illicit Enrichment offense (Article IX) –Subject to Constitution, fundamental principles  Assistance regarding property (Article XV) –Broadest possible measure of assistance in identification, tracing, freezing, seizure and forfeiture –Property derived from or used in covered offenses –Authorizes transfers to assisting countries

12 OECD CONVENTION AGAINST BRIBERY  Attack the Supply Side of Corruption  Criminalize Payment of Bribes to Foreign Officials  Nationality Jurisdiction  Peer Review

13 United Nations Convention Against Corruption  Negotiated January 2002 to October 2003  Opened for signature December 9, 2003 in Merida, Mexico  Entered into force December 14, 2005  51 Parties, 140 Signatories  U.S. is a signatory but not yet a Party

14 STRUCTURE  Chapter I: General Provisions  Chapter II: Preventive Measures  Chapter III: Criminalization and Law Enforcement  Chapter IV: International Cooperation  Chapter V: Asset Recovery  Chapter VI: Technical Assistance and Information Exchange  Chapter VII: Mechanisms for Implementation  Chapter VIII: Final Provisions

15 HIGHLIGHTS FOR ASSET RECOVERY  Detection/Identification – Articles 14, 52, 58  Money laundering, confiscation – Articles 23, 31  Required ability to provide assistance in forfeiture – Articles 53, 54  Forfeiture assistance – Article 55  Disposition of forfeited property – Article 57  Dual criminality – Article 46 (9)

16 MONEY LAUNDERING PREVENTION – ARTICLE 14  Based upon Palermo Transnational Organized Crime Convention –Must require customer identification –Must have suspicious activity reporting –Should have a financial intelligence unit  Should require inclusion of wire originator information

17 MONEY LAUNDERING PREVENTION – ARTICLE 14  Should require complete wire originator information –Accurate, meaningful information on originator –Maintain information throughout payment chain –Enhanced scrutiny to transfers that do not include complete originator information

18 DETECTION OF GRAND CORRUPTION – ARTICLE 52  MUST require financial institutions to identify beneficial owner of high-value accounts  MUST require financial institutions to conduct enhanced scrutiny of accounts of politically exposed persons –Senior foreign politicians, family, associates  MUST issue advisories concerning types of accounts/persons  Disseminate identification of officials on request

19 DETECTION OF GRAND CORRUPTION – ARTICLE 52  No business with shell banks (no physical presence)  Should require financial disclosure and permit to share with foreign authorities  Should require disclosure of existence of foreign accounts

20 OLD FORFEITURE LEGAL ASSISTANCE REGIME  1988 Vienna Convention on Narcotics  2000 Palermo Convention on Transnational Organized Crime  Requested country either –open own case OR –enforce a foreign confiscation judgment

21 NEW FORFEITURE LEGAL ASSISTANCE REGIME  Direct recovery without forfeiture (Art. 53)  MUST have basis to provide assistance (Art. 54)  Procedures for international cooperation (Art. 55)

22 RETURN AND DISPOSAL ARTICLE 57  Major Focus of Negotiations  REMEMBER: DIRECT FORFEITURE ALSO AVAILABLE (ARTICLE 53)  MUST FIRST FIND, RESTRAIN, PRESERVE VALUE, CONFISCATE

23 DEVELOPING PRACTICE  Abacha –Switzerland $500 million repatriated –Jersey $160 million repatriated  Fujimori/Montesinos –Switzerland $77 million repatriated –United States $20.2 million repatriated  Aleman/Jerez –United States $2.7 million repatriated

24 CONFERENCE  Corruption Investigations  Asset Tracking and Financial Investigations  Mutual Legal Assistance  Transparency and Looking Forward

25 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 ?

26 SHARED COMMITMENTS SHARED RESPONSIBILITY

27 Daniel H. Claman Senior Trial Attorney Asset Forfeiture and Money Laundering Section U.S. Department of Justice Criminal Division (AFMLS) Washington, D.C Tel. (202) Fax (202)


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