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

USD 1.5 to 5 billion USD 1 to 2.8 billion USD 3 to 14 billion Global Problem of Money Laundering: IMF Estimates: between 2% y 5% of Gross World Product, At least USD $600,000,000 USD 23 million to 1 billion USD 100 million USD 250 million or more USD 106 to 700 million

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

OPPORTUNITY NOW International Commitment to Asset Recovery Legal tools 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

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.”

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

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

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

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

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

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

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

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

STRUCTURE Chapter V: Asset Recovery 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 TOC – 41 articles UNCAC – 71 Articles More focus on prevention and implementation

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) Article 40 Bank Secrecy

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

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

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

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

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

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)

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

DEVELOPING PRACTICE Abacha Fujimori/Montesinos Aleman/Jerez 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

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

? USD 1.5 to 5 billion USD 1 to 2.8 billion USD 3 to 14 billion Global Problem of Money Laundering: IMF Estimates: between 2% y 5% of Gross World Product, At least USD $600,000,000 USD 23 million to 1 billion USD 100 million USD 250 million or more USD 106 to 700 million

SHARED COMMITMENTS SHARED RESPONSIBILITY

Asset Forfeiture and Money Laundering Section Daniel H. Claman Senior Trial Attorney Asset Forfeiture and Money Laundering Section U.S. Department of Justice Criminal Division (AFMLS) Washington, D.C. 20530 Tel. (202) 514-6340 Fax (202) 514-5522 Daniel.Claman@usdoj.gov