Asset Recovery in the United Nations Convention against Corruption OSCE – UNODC Workshop on Strengthening International Legal Cooperation among Member States of the OSCE to Combat Transnational Organized Crime 7-9 April 2008 Brigitte Strobel-Shaw, UNODC

Cases of Grand Corruption Mobuto, Zaire US $ 5 billon More Than the Foreign Debt 87% of the Annual Government Budget Duvaliers, Haiti US $ 500 million Nigerian kleptocrats US $ 100 billion 3-4 times the Foreign Debt Brigitte Strobel-Shaw, UNODC

The United Nations Convention against Corruption Criminalization Prevention International Cooperation Asset Recovery Brigitte Strobel-Shaw, UNODC

UNCAC – Status of Ratification Adoption: General Assembly Resolution 58/4 of 31 October 2003 Entry into force: 14 December 2005 Signatories: 140, Parties: 111 Brigitte Strobel-Shaw, UNODC

Brigitte Strobel-Shaw, UNODC Chapter V, Asset Recovery (art. 51-59) “The return of assets is a fundamental principle of this Convention… Parties shall afford one another the widest measure of cooperation and assistance in this regard” (art. 51) Brigitte Strobel-Shaw, UNODC

Asset Recovery: Chapter V of the UNCAC Chapter V on Asset Recovery is a major breakthrough and is closely linked to the other chapters of the Convention: Prevention: Chapter II contain provisions on prevention of the diversion of funds, in particular of corruption (art. 8) and money-laundering (art. 14) Criminalization: Chapter III establishes the criminal offences to which chapter V is applicable International Cooperation: Chapter IV complements Chapter V with innovative provisions on international cooperation, particularly on mutual legal assistance (art. 46) Brigitte Strobel-Shaw, UNODC

Typical steps of an asset recovery case as reflected in the UNCAC: (1) Tracing / identifying / locating: art. 52, 55 (2, 3), 56, 58 Seizure / Freezing: art. 54, 2 / 55, 2, Confiscation: art. 54, 1 / 55,1 Return / Recovery: art. 57 Brigitte Strobel-Shaw, UNODC

Brigitte Strobel-Shaw, UNODC Prevention and detection of transfer of proceeds of corruption (art. 52) States Parties must require their financial institutions to: Verify the identity of customers Determine the identity of beneficial owners of high-level accounts Apply enhanced scrutiny to accounts maintained by prominent public officials Report suspicious transactions to competent authorities Prevent the establishment of banks with no physical presence – “shell banks” Brigitte Strobel-Shaw, UNODC

Special cooperation and Financial Intelligence Units (art.56-58) States Parties shall endeavour Forward information on proceeds of corruption to another Party without request – when believed that this may trigger investigation and prosecution by receiving Party States Parties shall cooperate to prevent and combat transfer of proceeds of corruption and promote recovery and shall consider Establishing Financial Intelligence Units for receiving, analyzing and disseminating to competent authorities reports of suspicious transactions Brigitte Strobel-Shaw, UNODC

Global implementation of article 52 Brigitte Strobel-Shaw, UNODC

Typical steps of an asset recovery case as reflected in the UNCAC: (2) Tracing / identifying / locating: art. 52, 55 (2, 3), 56, 58 Seizure / Freezing: art. 54, 2 / 55, 2 Confiscation: art. 54, 1 / 55,1 Return / Recovery: art. 57 Brigitte Strobel-Shaw, UNODC

Art. 54 para 1: Confiscation Models CONVICTION BASED To give effect to a foreign confiscation order, 54 (1a) (mandatory) To order confiscation of foreign property, 54 (1b) (mandatory) The confiscation follows a criminal conviction against the person. NON CONVICTION BASED (= IN REM, = CIVIL FORFEITURE) Consider: Confiscation without criminal conviction (1c) (non mandatory). The action is against the property, not against a person. Brigitte Strobel-Shaw, UNODC

Criminal Confiscation The model used in the 1988 Drug Convention The Convention does not make any difference between value-based (no need for evidence that the property is tainted = proceeds or instrumentalities), and object-based (tainted property) criminal confiscation regimes. Mostly done through a civil process (civil standard of proof applied after conviction). In common law systems, the confiscation order is a money judgment against the accused for the mount of the benefit of the crime. Brigitte Strobel-Shaw, UNODC

Brigitte Strobel-Shaw, UNODC Criminal Confiscation: Overview over implementation of Art. 54 subpara (1a) and (1b) Brigitte Strobel-Shaw, UNODC

Non-conviction-based confiscation: Art. 54 subpara (1c) Civil action against the property. The non-conviction based confiscation follows a tainted property scheme: It has to be proven that the property is tainted (proceeds / instrumentalities) Advantages: When no conviction is possible (perpetrator absconded, political opposition, weakened judicial system in the requested country) Civil standard of proof is applied from the beginning (confiscation may be possible although the perpetrator has to be acquitted by criminal standards) No need for dual criminality No issues of retroactivity Examples: the US, Ireland, the UK, Italy, Australia, Slovenia, Ontario (Canada), South Africa Brigitte Strobel-Shaw, UNODC

Brigitte Strobel-Shaw, UNODC Non-conviction-based confiscation: Overview over implementation of Art. 54 subpara. 1 c) Global implementation of art. 54 (1 c) Brigitte Strobel-Shaw, UNODC

Alternative: Direct recovery, art. 53 Civil action to establish title to or ownership of property (art. 53, 1) Compensation or damages (art. 53, 2) Legitimate ownership of a third party in the decision on confiscation (art. 53, 3) Brigitte Strobel-Shaw, UNODC

Direct Recovery Overview over implementation of art. 53 Brigitte Strobel-Shaw, UNODC

Brigitte Strobel-Shaw, UNODC Complementary provision on international cooperation: Overview over implementation of Art. 55 Brigitte Strobel-Shaw, UNODC

Typical steps of an asset recovery case as reflected in the UNCAC: (3) Tracing / identifying / locating: art. 52, 55 (2, 3), 56, 58 Seizure / Freezing: art. 54, 2 / 55, 2, Confiscation: art. 54, 1 / 55,1 Return / Recovery: art. 57 Brigitte Strobel-Shaw, UNODC

The Disposal of Confiscated Property (art.57) Return to requesting Party Embezzled public funds or laundering of embezzled public funds Return to requesting Party if it can reasonably establishes prior ownership Proceeds of other offences of corruption Confiscated property may be returned to the requesting Party, prior legitimate owner or used for compensating victims Other cases Return of assets is unconditional, Parties to give special consideration to agreements for the final disposal of assets Brigitte Strobel-Shaw, UNODC

Brigitte Strobel-Shaw, UNODC Specifics of art. 57 UNCAC, compared to the UNTOC regime on the sharing of confiscated proceeds of crime Return of assets is unconditional, the return is not at the discretion of the confiscating State Convention establishes rules for the return of assets, depending on how closely the assets were linked to the requesting State Party Asset-sharing not foreseen in the Convention, reasonable expenses can be deducted Bilateral agreements on the final disposal of confiscated funds are possible, including on voluntary monitoring of the use of returned funds Brigitte Strobel-Shaw, UNODC

Global Implementation of Art. 57 Brigitte Strobel-Shaw, UNODC

Global technical assistance needs for the implementation of UNCAC Brigitte Strobel-Shaw, UNODC

Conference of the States Parties Promote, Facilitate & Review Implementation Make recommendations Facilitate Information Exchange Brigitte Strobel-Shaw, UNODC

Conference of the States Parties COSP 3 2009 Qatar COSP 2 28/1 – 1/2/2008, Indonesia 10-14/12/2006, Jordan COSP 1 Entry into Force 14 Dec 2005 Brigitte Strobel-Shaw, UNODC

The 1st Session of the Conference of the States Parties Asset Recovery Review of Implementation Amman, Jordan December 2006 The first session of the CoSP held in Jordan in December 2006, adopted 8 resolutions and 1 decision. I would like to focus on what emerged as the three key areas at the Conference: which were Review of Implementation, Asset Recovery and Technical Assistance. Related to these, the Conference also adopted a resolution on how it wants the Secretariat to gather information both on the implementation of the Convention and on technical assistance needs. Technical Assistance Information Gathering Brigitte Strobel-Shaw, UNODC

Brigitte Strobel-Shaw, UNODC Asset recovery: recommendations of the Working Group of the Conference of the States Parties pertaining to asset confiscation and forfeiture 1st session, Vienna, August 2007 Practical tools: Database containing domestic legislation and judicial decisions, practical handbook, expanding the MLA request writer tool Analysis of legal frameworks, development of different forfeiture models, including for non-conviction-based forfeiture Establishment of a global network of focal point on asset confiscation and recovery Brigitte Strobel-Shaw, UNODC

Brigitte Strobel-Shaw, UNODC The Second Session of the CoSP: Indonesia, January 2008 Resolution 2/3 on Asset Recovery The Conference reiterated that the return of assets is one of the main objectives and also a fundamental principle of the United Nations Convention against Corruption The Working Group shall continue its work and hold at least two meetings prior to CoSP 3 identify ways and means to translate its recommendations into action explore the means of building confidence, facilitate the exchange of information and ideas on the expeditious return of assets and encourage cooperation between requesting and requested States continue its discussions with a view to further developing cumulative knowledge in the area of asset recovery The Conference requests UNODC and invites, as appropriate, other organizations to continue to support States to strengthen their capacities in all areas relevant to the successful recovery of assets Brigitte Strobel-Shaw, UNODC

Stolen Asset Recovery (StAR) Initiative Launched in Washington by the World Bank and UNODC on 17 September 2007 to: Help countries recover assets Help countries to build capacity to deter new flows Pilot countries will receive special assistance to develop legal and investigative capacities (anti-corruption agencies, FIUs, mutual legal assistance) Engage in global advocacy to lower barriers to asset recovery Brigitte Strobel-Shaw, UNODC

For further information: THANK YOU FOR YOUR ATTENTION United Nations Office on Drugs and Crime Vienna International Centre PO Box 500, A-1400 Vienna, Austria Tel: +43-1-26060-5179 Fax: +43-1-26060-7 5179 http://www.unodc.org/unodc/en/crime_ convention_corruption.html dorothee.gottwald@unodc.org THANK YOU FOR YOUR ATTENTION Brigitte Strobel-Shaw, UNODC